PACIFIC RAINBOW INTERNATIONAL INC v. SHENZHEN WOLVERINE TECH LTD AND OTHERS

HCA 3023/2016

[2023] HKCFI 1292

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 3023 OF 2016

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BETWEEN

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J U D G M E N T

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A. INTRODUCTION

1.  This is the trial of the Plaintiff’s claim against the 2^nd to 4^th Defendants (collectively, “the Defendants”). The claim against the 1^st Defendant has been discontinued. In gist, the Plaintiff is a victim of email fraud who is seeking recovery from various layers of recipients of money defrauded. The 2^nd and 3^rd Defendants are the 2^nd layer recipients, whereas the 4^th Defendant is the controller of the 3^rd Defendant (“D2”, “D3” and “D4” respectively, and “Defendants” collectively).

2.  The Plaintiff’s claims against D2 and D3 are based on (i) unjust enrichment, (ii) proprietary restitution and (iii) knowing receipt. The Plaintiff further claims against all the Defendants for dishonest assistance of D1, constructive trust, and conspiracy to injure by unlawful means.

3.  I am satisfied that the Defendants have been properly served with notice of the trial. I shall proceed in their absence.

4.  Only Mr Zhang He (“Mr Zhang”) and Ms Han Dong Mei (“Ms Han”) of the Plaintiff have given evidence, which remains unchallenged. Since the Defendants have not appeared, their witness statements and affirmations have been expunged from the trial bundles and shall not be treated as evidence in this trial.

5.  Although the Defendants are absent, the Plaintiff still has an obligation to fairly present its case and identify points of factual or legal note which may be of benefit to the Defendants. The Plaintiff should not pursue claims that are not sustainable and should identify to the court points which a Defendant had taken before it decided to play no further part in the action. The Plaintiff should also consider and bring to the Court’s attention points which had not been taken by the Defendants but which might well have been had they decided to defend the proceedings. See China Citic Bank International Ltd v Cheuk Shuk Hing & ors [2022] HKCFI 3646, Recorder Manzoni SC.

B. FACTUAL BACKGROUND AND FUND FLOWS

6.  The facts are taken from the helpful summary of Mr Ernest Ng, counsel for the Plaintiff.

7.  On 22 March 2016, the Plaintiff placed an order with Xiamen Kingdomway Limited (“KDW”): ASOC at §8; Invoice.

8.  On or around 8 November 2016, the Plaintiff received an email from “bexxxxx@kingdomway.com” purportedly from Ms Han of KDW (with a missing “-” between “kingdom” and “way”) for early payment with a discount of 2.5%. The Plaintiff agreed: ASOC at §§9-10.

9.  On or around 10 November 2016, the Plaintiff received an email from the same account directing payment to D1 which was held out to be a subsidiary of KDW, citing the reason that KDW’s bank account had a lien. At the same time, payment authorisation and a (forged) revised Invoice for US$1,443,000 was provided (“the Email”, “the Invoice” and “the Sum” respectively): ASOC at §11.

10.  On or around 15 November 2016, misled by the Email and the Invoice, the Plaintiff paid the Sum to D1’s account with Hang Seng Bank in Hong Kong (Account No. 796-0xxxxx-883) (“D1’s Account”), resulting in a deposit of US$1,442,978.64 minus bank charges: ASOC at §12. More particularly, the deposit was made into the foreign currency saving component of D1’s Account (the “FX Sub-Account”).

11.  The Plaintiff discovered the fraud on 16 November 2016 when the Plaintiff sent the payment record to Ms Han and was informed that KDW did not request the payment.

12.  Mr Ernest Ng has ably analyzed the transfers amongst D1-D3 in Tables 1 and 2 below, which I adopt.

13.  The treatment of the Sum in D1’s Account was as follows: -

Table 1

Time (15 Nov)	FX Sub-Account (PEB[1] : US$100; EUR111.50)	HKD Saving Sub-Account (PEB: HK$2,897.19)
	Out	In	Out
15:00	US$129,082.23 (converted to HKD to D1’s HKD Current Sub-Account as HK$1,000,000)
15:00	US$258,164.45	HK$2,000,000
15:01	US$258,164.45	HK$2,000,000
15:01		HK$1,000,000 (From D1’s HKD Current Sub-Account)
15:02			HK$4,368,400 (to D2) & HK$55(Bank Charges)
15:03	US$258,164.45	HK$2,000,000
15:04			HK$2,000,000 (to D1’s HKD Current Sub-Account)
15:04		HK$200,000 (From D1’s HKD Current Sub-Account)
15:05		HK$1,800,000 (From D1’s HKD Current Sub-Account)
15:05	US$258,164.45	HK$2,000,000
15:06	US$ 25,819.78	HK$200,000
15:07	US$245,256.23	HK$1,900,000
15:07	US$10,162.00	HK$78,714.85
15:14			HK$2,000,000 (to D3)
15:36			HK$4,807,663 (to D2) & HK$55 (Bank Charges)
Total	US$1,442,978.04

14.  The treatment of the Sum in D2’s Account was as follows: -

Table 2

Time		HKD Saving Sub-Account (PEB: HK$5,306.73)		CAD Sub-Account (PEB: C$12,011.61)
		In	Out	In	Out
15 Nov		HK$4,368,385
15 Nov		HK$4,807,648
17 Nov 12:10			HK$100,000
17 Nov 12:10			HK$4,000
17 Nov 14:32			HK$2,000,000
17 Nov 14:34			HK$2,580,000 (To D3)
17 Nov 14:35			HK$2,000,000
17 Nov 14:35			HK$288,000
17 Nov 14:36			HK$400,000
17 Nov 15:38			HK$6,000
17 Nov 19:46			HK$493
17 Nov 19:55			HK$3,600
17 Nov 20:36			HK$320
18 Nov 20:14			HK$14,778
21 Nov 11:05			HK$1,671,560 (to CAD)	C$290,000
21 Nov 15:14					C$300,000 (To D2’s Canada Account)
Total	HK$9,176,03

15.  In the light of the magnitude of the fund transfers in D1’s and D2’s Accounts, the pre-existing balance (“PEB”) in each Account (and its component(s)) could be treated as de minimus.

16.  The material transactions were as follows: -

(1) In respect of D2, (i) the onward transfers of HK$4,368,400 and HK$4,807,663 from D1 to D2’s account with Bank of East Asia (Account No. 52xxxxxxx62) (“D2’s Account”); (ii) the transfer of C$300,000 to D2’s Canada Account held with the National Bank of Canada (“D2’s Canada Account”); and

(2) In respect of D3, (i) the onward transfer of HK$2,000,000 to D3’s account with Hang Seng Bank (Account No. 789-x8x-xx4-833) (“D3’s Account”); (ii) the onward transfer of HK$2,580,000 from D2’s Account to D3’s Account.

C. LEGAL PRINCIPLES ON TRACING

17.  For the purpose of establishing a proprietary claim, the Plaintiff must establish that its assets are traceable into the hands of D2 and D3.

18.  The general principles on tracing are as follows:

(1) A thief or fraudulent recipient holds the stolen property on constructive trust for the true owner: RPB SA v Xinwanyi Trade Limited [2022] HKCFI 2541 at §§11-20, DHCJ Jonathan Chang SC.

(2) Evidential presumption may be employed as to the intention of a recipient where there were mixed funds in their accounts, eg by applying the first in first out rule (“FIFO rule”) or the punitive presumption rule (“PP rule”)”.

(3) Funds lose their separate identities as a result of the mixing of the defendant’s own money with money received from a claimant to which the defendant knows he is not entitled. The defendant is deemed to have kept the claimant’s money intact and to have spent his own money. Goff & Jones, The Law of Unjust Enrichment (9^th ed., 2016), at §7-49.

(4) The PP rule of identification applies where the other contributor to the bank account is a wrongdoer. It aims to preserve the value contributed by the claimant to the mixed fund in the bank account at the expense of the value contributed by the wrongdoer. A reversed burden of proof operates. Hence, if a trustee mixes trust assets with his own, the onus is on the trustee to distinguish the separate assets, and to the extent that he fails to do so, they belong to the trust. See Snell’s Equity (34^th ed.) §§30-056 – 30-057.

(5) The traditional approach has been to apply the rule in Clayton’s Case to allocate the mixture in the bank account between contributors of the money. Specific credits in the account are matched against specific debits. It is presumed that the money first withdrawn from the account is drawn against the contribution of the party whose money was first deposited. Once that contribution has been exhausted, later withdrawals are treated as made against the contribution of the party whose money was next deposited. In attributing withdrawals to one party or the other, the court does not take into account – as it would with a wrongdoer – whether the money withdrawn is dissipated or preserved. See Snell’s Equity (34^th ed, 2020), at §30-059.

(6) A presumption would not apply where it was contrary to the actual presumed intentions of the contributors, or was unjust or impractical in its operation. See Snell’s Equity (34^th ed., 2020), at §§30-056 to 30-060.

19.  The plaintiff has the right to choose whichever presumption produces the best result for him and trace in the manner which is most advantageous to him: Americhip Inc v Zhu Hongling [2021] 4 HKLRD 490 at §19, M Chan J.

D. TRACING

D1. The Status of D1

20.  There was no discernible reason why the Sum would be paid or directed to D1’s Account and the irresistible inference must be that D1 was a fraudulent recipient controlled by the fraudster(s) impersonating Ms Han. Then the Sum was dissipated extremely quickly on the same day upon receipt. D1’s purported business was “electronic products and gift”, which had nothing to do with the Plaintiff who had had no dealings with D1. Indeed, D1 never appeared to answer the present action.

21.  D1 is to be considered as holding the stolen property on constructive trust for the Plaintiff for the purpose of tracing assets into D2 and D3: RPB SA v Xinwanyi at §12(1). Although no action is maintained against D1 as the 1^st layer recipient, I do not see that as a bar to the present claims against the Defendants. It only means that possibly, res judicata may operate against the Plaintiff’s future claim against D1.

D2. From D1 to D2 & D3

22.  As per Table 1, the 2 tranches of US$258,164.45 (in D1’s FX Sub-Account) were converted to a total HK$4,000,000 into D1’s HKD Saving Sub-Account. The HK$4,000,000 must be the Plaintiff’s traceable asset. There was a subsequent payment from D1’s HKD Current Sub-Account of HK$1,000,000 which could be traced back to US$129,082.23 (in D1’s FX Sub-Account) coming from the Sum. Thus, the HK$4,368,400 pay-out to D2 would wholly be the Plaintiff’s traceable asset, regardless of which presumption is to be applied.

23.  After the pay-out of HK$4,368,400 and HK$55 bank charges, the balance in D1’s HKD Saving Sub-Account was HK$631,545 (consisting purely of the Plaintiff’s traceable asset). Subsequently, a total sum of US$797,566.91 was converted into HK$6,178,714.85 in the HKD Saving Sub-Account (between 15:03 and 15:07). Hence, both the HK$2,000,000 payment to D3 and HK$4,807,663 payment to D2 thereafter would be the Plaintiff’s traceable asset.

D3. From D2 to D3 & D2’s Canada Account

24.  As per Table 2, when 2 sums totalling HK$9,176,033 were paid from D1 and D2 (all of which being the Plaintiff’s traceable assets), it was clear that the HK$2,580,000 which were paid to D3 were the Plaintiff’s traceable asset, regardless of which presumption is to be applied.

25.  Similarly, the C$300,000 paid into D2’s Canada Account were also the Plaintiff’s traceable asset.

D4. Retention of the monies in D2 and D3’s Accounts

26.  The next question is whether the traceable assets remain in D2 and D3’s hands. If they have ceased to exist, there can be no tracing.

27.  In respect of D2, on 29 November 2016, the balance of its HKD component dropped to HK$146,626.73, and further dropped to HK$136,734.27 on 6 December 2016. On the same day, D2’ Account was frozen.

28.  In respect of D3, on 17 November 2016, the balance of its HKD component dropped to HK$2,314.45. There were subsequent movements until 30 November 2016 when the balance rose to HK$13,989.21, but was again reduced to HK$13,809.21 on 10 December 2016. On 6 December 2016, D3’s Account was frozen.

D5. Summary of receipt of money

29.  In summary:

(1) D2 has received HK$9,176,033 of the Plaintiff’s traceable assets from D1 (“D2’s Receipts”), with HK$136,734.27 resting in D2’s Account which I find to be subject to a constructive trust; and

(2) D3 has received HK$2,000,000 of the Plaintiff’s traceable assets from D1 directly and HK$2,580,000 from D1 via D2 (“D3’s Receipts”), with HK$2,314.45 resting in D3’s Account, which I find to be subject to a constructive trust.

E. UNJUST ENRICHMENT

30.  There are 4 elements to a claim in unjust enrichment: (a) enrichment of the defendant; (b) at the expense of the plaintiff; (c) enrichment being unjust; and (d) no defence applicable. See Shanghai Tongji Science & Technology Industrial Co Ltd v Casil Clearing Ltd (2004) 7 HKCFAR 79.

31.  D2 and D3, having no entitlement to funds from the Plaintiff, have plainly been enriched by D2’s Receipts and D3’s Receipts respectively.

32.  The enrichment was at the expense of the Plaintiff who lost:

(1) In respect of D2’s Receipts and D3’s Receipts, a total of HK$9,176,033; and

(2) In respect of D3’s Receipts, a total of HK$4,580,000.

33.  The enrichment was unjust as I am satisfied that, but for its mistake that the Email and the Invoice had come from Ms Han, the Plaintiff would not have transferred any funds to D1 with whom the Plaintiff had had no business dealings. In turn, D2 and D3 would not have received the Sum but for D1’s fraud on the Plaintiff. Therefore, D2 and D3 are not entitled to retain the money, subject to any defence that they can establish.

F. PROPRIETARY RESTITUTION

34.  In general, as a victim of fraud, the Plaintiff may assert a proprietary claim to the extent that their funds can be traced and identified as representing recognisable assets of the Plaintiff. For the reasons given in Section D above, this head of claim is made out. The Plaintiff is entitled to the monies retained in D2 and D3’s Accounts, subject to any defence that they establish.

G. OTHER CAUSES OF ACTION

35.  The other causes of action are: (i) knowing receipt (as against D2 and D3); (ii) dishonest assistance (as against the Defendants); and (iii) conspiracy (as against the Defendants).

G1. Knowledge

36.  With regard to knowing receipt, the defendant must “know enough of the facts surrounding the misapplication of trust property to make it unconscionable for him to retain the benefit of his receipt”. In other words, the recipient's state of knowledge must be such as to make it “unconscionable” for the recipient to retain the benefit of the receipt: China Metal Recycling (Holdings) Ltd v Chun Chi Wai [2021] HKCFI 378 at §85.

37.  Constructive knowledge is insufficient for establishing liability in knowing receipt, but for knowing receipt and in the context of a claim of restitution, “unconscionability” is a lower standard than dishonesty: Americhip (above) at §63.

38.  With regard to dishonest assistance, a dishonest state of mind may involve knowledge that the transaction is one in which one cannot honestly participate. Blind-eye knowledge is equated with actual knowledge, but it requires two conditions, first being the existence of a suspicion that certain facts may exist, and the second being a conscious decision to refrain from taking any step to confirm their existence. See Americhip, at §§61-62.

39.  As to conspiracy, knowledge would be relevant to whether or not the defendant knew of the existence of the agreement/common design and the intention to injure the plaintiff.

40.  Three types of “notice” would defeat the defence of good faith and/or without notice: Papadimitriou v Crédit Agricole Corpn and Investment Bank [2015] 1 WLR 4265 at §§14, 15 and 20:

(1) Where the recipient appreciates that a proprietary right in the property probably exists, the recipient would have actual notice of the right;

(2) Where a reasonable person with the attributes of the recipient should have appreciated, based on facts already available to him, that the right probably existed, the recipient has constructive notice of the existence of the right; and

(3) If the facts known to the recipient would give a reasonable recipient in the position of the particular recipient serious cause to question the propriety of the transaction, the recipient should have made inquiries or sought advice, which would have revealed the probable existence of a proprietary right.

41.  In the same decision, Lord Sumption JSC further explained at §33 that: -

“33 […] Whether a person claims to be a bona fide purchaser of assets without notice of a prior interest in them, or disputes a claim to make him accountable as a constructive trustee on the footing of knowing receipt, the question what constitutes notice or knowledge is the same. … The principle is, I think clear. We are in the realm of property rights, and are not concerned with an actionable duty to investigate. The hypothesis is that the claimant has established a proprietary interest in the asset, and the question is whether the defendant has established such absence of notice as entitles him to assume that there are no adverse interests. The mere possibility that such interests exist cannot be enough to warrant inquiries. There must be something which the defendant actually knows (or would actually know if he had a reasonable appreciation of the meaning of the information in his hands) which calls for inquiry. The rule is that the defendant in this position cannot say that there might well have been an honest explanation, if he has not made the inquiries suggested by the facts at his disposal with a view to ascertaining whether there really is. I would eschew words like "possible”, which set the bar too low, or "probable” which suggest something that would justify a forensic finding of fact. If even without inquiry or explanation the transaction appears to be a proper one, then there is no justification for requiring the defendant to make inquiries. He is without notice. But if there are features of the transaction such that if left unexplained they are indicative of wrongdoing, then an explanation must be sought before it can be assumed that there is none. In the present case, on the facts actually known to the bank, there was no apparent explanation of the interposition of the Panamanian and Liechtenstein entities unless it was to conceal the origin of funds derived from third parties. That was why the bank had to make inquiries before proceeding as if there was an innocent explanation.” (emphasis added)

42.  The Plaintiff relies on both actual and “blind-eye” knowledge as against D2 and D3. The pleaded particulars are supported by the evidence of Mr Zhang, which I accept. They include (i) speed of transfer in (from D1’s Account and transfer out (from D2 and D3’s Accounts); (ii) D4 making available D3, his corporate vehicle, for receipt of part of the Sum; (iii) lack of prior dealings between the Plaintiff and the Defendants; (iv) lack of commercial justification for the transfers; (v) acts being contrary to normally accepted standards of honesty; and (vi) lack of genuineness of all the transactions held out by the Defendants.

G2. Knowing Receipt

43.  The Plaintiff has to show that: (1) there was property subject to a trust; (2) the property was transferred; (3) the transfer was in breach of trust; (4) the property (or its traceable proceeds) was received by the defendant; (5) the receipt was for the defendant's own benefit; and (6) the defendant received the property with the requisite knowledge: China Metal, at §84.

44.  There was property subject to a constructive trust arising from the fact that D1 has received the stolen sum: Grant’s Civil Fraud at §§12-031 to 12-032. The trust property was transferred to D2 and D3 in breach of trust. The property was traceable into D2 and D3, who received the money for their own benefit. They had the requisite knowledge when they received the Sum, as shown in §42 above. What they did in receiving and siphoning off money which they did not have reason to receive was contrary to normally accepted standards of dishonesty. It was unconsciousable for them to retain any part of the Sum. This cause of action is established.

G3. Dishonest Assistance

45.  The Plaintiff has to show: (1) a breach of trust or fiduciary duty by someone other than the defendant; (2) in which the defendant assisted; (3) dishonesty; and (4) resultant loss: China Metal, at §§76-79.

46.  D1’s act in breach of constructive trust is sufficient to meet the first criterion: Hotel Portfolio II UK Limited, (In Liquidation) & Ors v Andrew Joseph Ruhan & Ors [2022] EWHC 383 (Comm), at §277; Natures Mark HK Ltd v Hongkong Hongxintai Trading Co Ltd [2022] HKCFI 1382, §23. D2 and D3 assisted and transferred away the Sum dishonestly. It resulted in loss to the Plaintiff. This cause of action is established.

G4. Conspiracy

47.  The elements of this cause of action are as follows: (1) a combination, arrangement or understanding between 2 or more people; (2) an intention to injure another; (3) concerted action (in the sense of active participation) consequent upon the combination or understanding; (4) use of unlawful means as part of the concerted action; and (5) loss being caused to the target of the conspiracy: China Metal at §§92-93.

48.  One has to recognize that in real life conspiracy is clandestine and it is difficult to have direct evidence of the combination of the Defendants. However, the facts referred to in Sections G2 and G3 above are equally applicable.

49.  There was no other explanation for the flow of funds and the irresistible inference is that the Defendants have acted in concert to cause injury to the Plaintiff by the unlawful means of fraud, knowing receipt and/or dishonest assistance.

H. DEFENCES

H1. Defences

50.  D2 pleads that it was a bona fide purchaser for value without notice (“BFP Defence”) and changed his position in good faith (“COP Defence”). D2 alleges that he had genuine commercial trading in Blackberry phones with D1.

51.  D3 also relies on the BFP Defence and the COP Defence. It alleges that there were 2 bona fide currency exchange transactions (one for the HK$2,000,000 received from D1 and the other for the HK$2,580,000 received from D2).

52.  In respect of the BFP Defence, a defendant must prove that (i) there was a purchase for value; (ii) of the legal estate in property; (iii) in good faith; (iv) without notice; (v) at the time of transfer of the legal estate: TTI Global Resources HK Ltd v Hong Kong Myphone Technology Co Ltd [2021] HKCFI 306, DHCJ To, at §22. Some academic commentators have expressed the view that the BFP Defence only applies in respect of proprietary restitution: Zief Incorporated v Tekchandani Ajai Mohan [2021] 3 HKC 69, Recorder E Fung SC at §30. I assume without deciding that this principle applies to both proprietary restitution and unjust enrichment.

53.  In respect of the COP Defence, the defendant must prove that: (i) there was a causative link between the receipt of the benefit and his change of position, either because the defendant no longer has the benefit received or because he has changed his position in some other way in reliance on the receipt of the benefit; and (ii) the defendant’s position must have changed in circumstances which make it inequitable for him to make restitution to the plaintiff: TTI Global Resources HK Ltd (above) at §55.

54.  D2 accepts that he had received part of the Sum from D1 but transferred away the bulk of it to other persons including D3. As the Defendants are absent from this trial, their defences remain bare assertions.

55.  On the other hand, the evidence of Mr Zhang has explained why the Defendants’ evidence fell short of showing genuineness and good faith. By way of example:

(1) The documents do not appear to be genuine, showing manipulation of evidence.

(2) On D2’s own case, it was impossible for him to deliver the goods to D1 when the PRC suppliers would only supply goods on cash on delivery terms but substantial sums were outstanding to the alleged suppliers.

(3) D1 was allegedly willing to pay more than HK$10 million to D2 and D3 in advance of delivery of goods without any security, which was inherently incredible.

(4) The assertion of D3 that he was D2’s currency partner was inconsistent with D3’s own evidence. According to its bank account opening form, D3 carried out an oxygen concentrator trading business. D3’s disclosure of assets did not show that it had any bank account of a minimum individual value of HK$20,000 in Hong Kong and one wonders how it could have carried on currency exchange business.

56.  Accordingly, none of the defences have been or could be established.

H2. Illegality

57.  The Plaintiff challenges the legality of the alleged transactions relied upon by D2 for the BFP Defence and COP Defence:

(1) The purchase and sale of second-hand mobile phones for profit was an unlicensed business and business operations;

(2) There was tax evasion;

(3) There was unlawful use of Hong Kong dollars, instead of RMB, as contract and/or payment currency in breach of Exchange Control Regulations; and

(4) There was smuggling of second-hand mobile phones.

58.  The Plaintiff also challenges the legality of D3 and D4’s money exchange conduct as being in breach of Foreign Exchange Control Regulations and the business was unlicensed.

59.  However, the issues of illegality will only arise if the Court finds any of the defences established, which I do not. It is therefore not necessary to go into those issues. In any case, the Plaintiff’s case is supported by PRC legal opinion which I accept.

I. CONCLUSION

60.  Based on the above analyses, I find the Plaintiff’s claims in unjust enrichment, proprietary restitution, knowing receipt, dishonest assistance and conspiracy proved on balance of probabilities. The defences have not been established for want of evidence.

61.  I therefore give judgment to the Plaintiff as follows:

(1) As against D2:-

(a) D2 do pay the Plaintiff the sum of HK$9,176,033 together with interest thereon since 15 November 2016.

(b) It be declared that the sums of HK$4,368,385 and HK$4,807,648 paid into D2’s Account maintained with the Bank of East Asia Limited numbered 52xxxxxxx62 (“D2’s Account”) on 15 November 2016 belonged to the Plaintiff at the time of receipt.

(c) In respect of the HK$136,734.27 remaining balance in D2’s Account as at 6 December 2016 (the “D2 Trust Property”):

(i) It be declared that D2 holds that on constructive trust for the Plaintiff; and

(ii) D2 do pay the D2 Trust Property to the Plaintiff.

(d) In respect of CAD300,000 transferred from D2’s Account to D2’s Account maintained with the National Bank of Canada numbered 3xxxxx2 on 21 November 2016 (the “Canadian D2 Property”)

(i) It be declared that that sum belonged to the Plaintiff as at the time of receipt; and

(ii) D2 do pay the Canadian D2 Property, insofar as still in the possession of D2, to the Plaintiff.

(2) As against D3:-

(a) D3 do pay the Plaintiff the sum of HK$2,000,000 together with interest thereon since 15 November 2016 and the sum of HK$2,580,000 together with interest thereon since 17 November 2016.

(b) It be declared that the sums of HK$2,000,000 and HK$2,580,000 as paid into D3’s Account maintained with the Hang Seng Bank Limited numbered 789-x8xxx4-883 (“D3 Account”) on 15 November 2016 and 17 November 2016 respectively belong to the Plaintiff at the time of receipt.

(c) It be declared that D3 holds the HK$2,314.45 remaining balance in the D3 Account as at 17 November 2016 (the “D3 Trust Property”) on constructive trust for the Plaintiff as constructive trustee; and

(d) D3 do pay the D3 Trust Property to the Plaintiff.

(3) As against D2, D3 and D4, each of them do jointly and severally pay the Plaintiff damages in the sum of US$1,443,000 or the Hong Kong dollar equivalent at the time of payment together with interest thereon since 15 November 2016.

(4) The above paragraphs are subject to the followings: -

(a) Payment(s) under §§1(a) and 2(b) be subject to a ceiling that the Plaintiff be paid no more than a total of HK$9,176,033;

(b) Payment(s) under §§1 to 3 be further subject to a ceiling that the Plaintiff be paid no more than a total of US$1,443,000 or the Hong Kong dollar equivalent at the time of payment.

(c) §§4(a) and (b) above do not apply to interest.

(5) On a nisi basis, the costs of and incidental to this action as between the Plaintiff and D2, D3 and D4 be paid by D2, D3 and D4 jointly and severally to the Plaintiff, to be taxed if not agreed.

(6) On a nisi basis, interest pre judgment shall be at the rate of P+1% up to and including 12 May 2023; interests thereafter shall be at judgment rate until the date of payment.

62.  I thank Mr Ernest Ng for his fair presentation of each party’s case even in the absence of the Defendants and the clear statements of legal principles which are of great assistance to the Court.