ALEKSANDER JANEZIC AND OTHERS v. YEO TENG HWEE AKA YEO TENG HWEE CHRISTOPHER AND OTHERS

HCA 9/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 9 OF 2009

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BETWEEN

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J U D G M E N T

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1.  This is an appeal by the Claimant against the Decision of Master Ko dated 23^rd September 2009 whereby Master Ko made a Garnishee Order Absolute against the Fubon Bank (Hong Kong) Limited (“Fubon”) in favour of the Plaintiffs ordering that Fubon (Garnishee) do forthwith pay to the Plaintiffs (Judgment Creditors) the amount of debt due or accruing from Fubon to the 2^nd Defendant (Judgment Debitor), or so much thereof as was sufficient to satisfy the balance of judgment debt (and interest and costs) arising out of a Judgment entered on 22^nd January 2009 by the Plaintiffs against the 1^st, 2^nd and 3^rd Defendants in this Action in the sum of US$587,325.73 and €15,000.00.

2.  At the hearing before me, the Claimant appeared in person and the Plaintiffs did not appear and were not represented.

Background

3.  This unfortunate case has had a rather chequered history. It is the subject of a Judgment handed down by Saunders J. on 14^th April 2009 which Judgment was referred to by Master Ko in his Reasons For Decision handed down on 28^th December 2009 which I have to consider in this Appeal.

4.  In his Reasons For Decision, Master Ko has given a succinct summary of the factual background which I gratefully adopt and set out below : -

Background

5.   The background of this action and other related proceedings have been fully set out in Saunders J’s judgment dated 14 April 2009 (“the Judgment”).  I shall only highlight some of the more relevant matters below to put the application in context.

6.   The Plaintiffs, Mr Thakur and one Mr Al Husseini are all victims of the fraudulent “cold calling” scheme perpetrated by the 1^st Defendant (“Christopher Yeo”) through First Prime and Pacific Wealth.  They all suffered a loss represented by the money they deposited into various bank accounts operated by Christopher Yeo and in the names of First Prime and Pacific Wealth.  More particularly :

(a)   The 6 Plaintiffs deposited a total sum of $597,325.73 and €15,000 into various bank accounts (including a total sum of US$249,370.18 deposited by the 2^nd, 3^rd and 4^th Plaintiffs into Fubon Bank).

(b)   Mr Al Husseini deposited a total sum of US$139,400 into Fubon Bank.

(c)   Mr. Thakur deposited a total sum of US$92,894.85 into Fubon Bank.

7.   The judgment obtained by the Plaintiffs in this action is a global judgment.  It does not set out the respective entitlement of each plaintiff or the basis of their entitlement.  Apart from the subject garnishee order nisi in respect of First Prime’s money in Fubon Bank, the Plaintiffs also obtained a garnishee order nisi in respect Pacific Wealth’s money in Cathay Bank.

8.   Mr Al Husseini has also obtained judgment against First Prime in HCA 124/2009 for US$139,400 plus interest and costs.  He subsequently obtained a garnishee order nisi in respect of First Prime’s money in Fubon Bank.

9.   Insofar as Mr Thakur is concerned, he has only commenced an action in HCA 521/2009 against First Prime, Christopher Yeo and one First Prime International Limited claiming, inter alia, the total sum of US$450,501.93 (including the US$92,894.85 he deposited into Fubon Bank as mentioned above).  No judgment has been entered in that action

10.   Faced with competing claims, Fubon Bank took out an interpleader proceeding on 9 February 2009 in HCMP 223/2009 for disposal of the money standing in credit in First Prime’s bank accounts.  First Prime has two bank accounts in Fubon Bank : a current account and a US$ fixed deposit account.

11.   On 13 March 2009, the Plaintiffs’ two garnishee orders nisi and Mr Al Husseini’s garnishee order nisi all came before the Registrar.  The learned Registrar made all these garnishee orders absolute despite Mr Thakur’s objection.  Mr Thakur appealed.

12.   Both the interpleader proceeding and Mr Thakur’s appeal came before Saunders J on 7 April 2009.

13.   By the Judgment handed down on 14 April 2009, the learned Judge ruled (at paragraph 57) that :

“In those circumstances it seems sensible that each of those three groups of  claimants, the three Croatian defendants [i.e. the 2^nd, 3^rd and 4^th Plaintiffs herein], Mr Al Husseini and Mr Thakur, should be entitled to trace their funds, retrieve them, and any balance in the account at Fubon Bank, (after the Bank’s costs), be available to any other general creditors.”

And the learned Judge concluded (at paragraphs 61` and 62) that :

“For the foregoing reasons the appeal against the orders of the Registrar makingthe garnishee orders absolute, and the consequent costs orders, must be allowed.  The garnishee orders absolute are set aside, and the garnishee orders nisi restored.  All orders for costs made by the Registrar below are set aside…” (emphasis added)

“No submissions were made to me in respect of the appropriate course to be adopted should it be necessary to determine the competing claims between theclaimants.  The solicitors for the Croatian defendants [i.e. the Plaintiffs herein], and for Mr Thakur should be able to agree on an appropriate procedure.  Leave is reserved to the parties to apply should they not be able to agree upon an appropriate order.  I note however that already boasts of these parties have expended far too much in the way of legal costs in these proceedings.  The sensible and just way of resolving the matter appears to me to lie in paragraph 57 of this judgment.”

14.   Upon further application by the parties, Saunders J made an order on 22 April 2009 that the money in First Prime’s current account at Fubon Bank be paid out as follows :

(a)   HK$60,000 be paid to Fubon Bank as their costs;

(b)   US$249,370.18 be paid to the 2^nd, 3^rd and 4^th Plaintiffs (and Mr Thakur be entitled to payment of his legal costs in the sum of HK$300,000 from this amount);

(c)   US$139,400 be paid to Mr Thakur; and

(d)   the balance be paid to the 1^st, 5^th and 6^th Plaintiffs.

15.   Saunders J’s above orders have left the money in First Prime’s US$ fixed deposit account with Fubon Bank undisposed of.  According to Fubon Bank’s affirmation filed in HCMP 223/2009, there was a credit balance of US$10,144.18 in that account as at 9 February 2009.”

5.  I should point out that in paragraph 14(c) of Master Ko’s Reasons For Decision quoted above there is a clerical error. The figure which Saunders J. ordered to be paid by Fubon to the Claimant was US$92,894.85 and not “US$139,400”. The Claimant confirmed to me that he had indeed received that sum of money.

6.  It is also clear from the above that the subject-matter of the Charging Order Absolute and this Appeal is the credit balance in the sum of US$10,144.18 remaining in the U.S. dollar fixed deposited account with Fubon held in the name of the 2^nd Defendant (“the US Dollar Account”).

The Claimant’s Argument

7.  Before Master Ko, the Claimant took a number of points which the Master dealt with one by one.

8.  The really substantial point taken by the Claimant was that, based on the Judgment of Saunders J., he should have the benefit of a “constructive trust or proprietary interest” in all moneys in the accounts with Fubon held in the name of the 2^nd Defendant. Thus, he should also have a claim over the money in the U.S. Dollar Account.

9.  I agree with Master Ko that the Claimant had misinterpreted the Judgment of Saunders J.. The reason why Saunders J. made the Order set out in paragraph 14 of the Reasons For Decision quoted in paragraph 4 above (subject to correction of the clerical error referred to in paragraph 5 above) was that the relevant Plaintiffs and the Claimant had actually remitted the specific sums into the account of the 2^nd Defendant with Fubon (other than the U.S. Dollar Account) which sums had never been withdrawn. Thus, the relevant Plaintiffs as well as the Claimant had the benefit of a “constructive trust or proprietary interest” and were able to trace the money. The same, however, cannot be said about the money remaining in the U.S. Dollar Account. Neither the Plaintiffs nor the Claimant ever remitted any money into the U.S. Dollar Account.

10.  The Charging Order Absolute made by Master Ko in favour of the Plaintiffs was on the basis that they were entitled to execute on the assets belonging to the 2^nd Defendant because they had a Judgment entered against the Defendants which had not been fully satisfied. The problem with the Claimant is that he has only commenced an action, High Court Action No. 521 of 2009, against the Defendants. He has not secured any judgment.

11.  In my judgment Master Ko was absolutely correct in making the Charging Order Absolute.

12.  Before me, the Claimant submitted that Master Ko did not take into account fully the points he made. I do not agree. In his Reasons For Decision, Master Ko has in fact set out in detail and carefully dealt with all the points made by the Claimant.

13.  The Claimant also asked for a stay of the Charging Order Absolute so as to enable him to take steps to wind up the 2^nd Defendant. I can see no justification for such a stay.

14.  In all the circumstances, much sympathy though I may have for the Claimant who together with the Plaintiffs are all victims of the fraud of the Defendants, I have no alternative but to dismiss the Claimant’s Appeal.