LAU YUEN YING v. CHUNG MAN CHI AND ANOTHER

HCA 432/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 432 OF 2010

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J U D G M E N T

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Introduction

1. In this action, the Plaintiff claims against:-

(1)  the 1^st Defendant only, for the amount of HK$250,000; and

(2)  the 1^st and 2^nd Defendants, jointly and severally, for the amount of HK$1,895,854.

2. In a nutshell, the Plaintiff’s complaint is that he was induced by the 1^st Defendant’s fraud or deceit to part with various sums of money.  The first amount of HK$250,000, made up of a number of smaller amounts, was paid in the form of cash to the 1^st Defendant over a period of time from about December 2001 to early 2002, and the second amount of HK$1,895,854, made up of numerous smaller amounts, was paid, upon the 1^st Defendant’ direction, into a bank account of the 2^nd Defendant, being the wife of the 1^st Defendant, over a period of time from August 2002 to December 2004.

3. The Plaintiff accepts that he had no direct dealings with the 2^nd Defendant, and has not suggested that she was in any way involved in the 1^st Defendant’s fraud or deceit.  His case against the 2^nd Defendant is based purely on the fact that he had paid moneys in her bank account as a result of the 1^st Defendant’s fraud or deceit.

The Plaintiff’s case

4. The Plaintiff was born in Nanhai, China, and received education up to the secondary level.  He is married and has 2 sons and a daughter who were born in China.  His children have no right of abode in Hong Kong.

5. The Plaintiff came to settle in Hong Kong in around 1981.  He worked as a machine driver until about 2001 and thereafter he made his living by renting out two cranes. 

6. At all material times, the Plaintiff had two bank accounts at HSBC, namely:-

(1)  account no. 553-5-008196 (“P’s 1^st Account”);

(2)  account no. 102-4-036558 (“P’s 2^nd Account”)

7. The 1^st and 2^nd Defendants are husband and wife.  The 2^nd Defendant is the registered holder of a bank account at Hang Seng Bank, account no. 224-310-4391 (“D2’s Account”).  It is common ground that the 1^st Defendant had at all material times access to and control over D2’s Account and held the automatic teller machine card of D2’s Account (“ATM Card”) for his own use.

8. In August 2001, the Plaintiff was injured in a traffic accident and underwent an operation for amputation of his right leg. Whilst in hospital, the Plaintiff became acquainted with the 1^st Defendant, who was there also for a leg amputation.  The 1^st Defendant met the Plaintiff’s younger son, who was visiting Hong Kong on a two-way permit, when he came to the hospital to visit and render assistance to his father.  From his discussion with the Plaintiff, the 1^st Defendant came to know that the Plaintiff wished to apply for his younger son to come to settle in Hong Kong permanently.

9. In November 2001, the 1^st Defendant was discharged from the hospital.  Thereafter, the Plaintiff and the 1^st Defendant maintained contact with each other.

10. The Plaintiff’s evidence is that, starting in or about December 2001, the 1^st Defendant suggested that he could assist the Plaintiff in his application for his younger son to come to settle in Hong Kong by representing to the Plaintiff that he had the means to assist in making the application successful, he had connections with officials and/or persons of influence in China who could assist in the application, he would personally make trips to China to handle the application, and the Plaintiff should make various payments to him or as he might direct in order to enable the application to proceed.  Induced by 1^st Defendant’s representations as aforesaid, the Plaintiff paid the total amount of HK$250,000 by a number of payments in cash to the 1^st Defendant over the period from about December 2001 to early 2002.

11. The Plaintiff further said that starting from about August 2002 until December 2004, he began to receive a series of telephone calls first from the 1^st Defendant and then from persons who claimed to be the 1^st Defendant’s elder brother in Greece, the son of the 1^st Defendant’s elder brother, lawyers, investigators, bank officers, etc. asking for various loans or advances under different pretexts, including that the 1^st Defendant was in financial difficulty, became very ill in America and needed a liver transplant, had been assaulted by officers of the public security bureau in China for failing to pay sufficient money to senior officials from whom the 1^st Defendant had sought assistance in relation to the Plaintiff’s application, and had passed away, that the 1^st Defendant’s estate would be transferred to the Plaintiff, that the 1^st Defendant’s elder brother had also passed away, that the 1^st Defendant’s elder brother had also left money in his estate to the Plaintiff, and that various fees or expenses had to be paid to enable payments to be made from those estates to the Plaintiff.  Induced by these representations, the Plaintiff transferred the total amount of HK$1,895,854 from P’s 1^st/2^nd Accounts to D2’s Account over the period from August 2002 to December 2004.

12. The relevant bank records and documents establish that during the period from 3 August 2002 to 31 December 2002 there were 113 transfers in the total amount of HK$221,672 from P’s 1^st Account to D2’s Account, and during the period from 29 January 2003 to 24 December 2004 there were 295 transfers in the total amount of HK$1,674,182 from P’s 2^nd Account to D2’s Account.

13. The 1^st Defendant’s fraud or deceit was discovered in December 2004 when the Plaintiff was informed by his physiotherapist that the 1^st Defendant had not passed away.  A report was made to the police and the 1^st Defendant was eventually arrested on 29 December 2004.

14. In his video recorded interview by the police under caution, the 1^st Defendant admitted that the representations that he had made to the Plaintiff to induce him to pay the total amount of $250,000 were false, he having made no attempt to assist the Plaintiff in his application for his younger son to come to settle in Hong Kong and he had no means to do so.  He also admitted that he had no elder brother in Greece and had assumed the identities of his elder brother, the son of his elder brother, lawyers, investigators, bank officers, etc. to deceive the Plaintiff into transferring various sums of money to D2’s Account. The 1^st Defendant also said that he used the ATM Card to withdraw moneys from D2’s Account and had lost the moneys transferred by the Plaintiff through gambling.

15. Arising out of the above matters, on 16 July 2005, the 1^st Defendant after a trial in the District Court in DCCC No.284 of 2005 in which he was represented by counsel and solicitors, was convicted of:-

(1)  one charge of fraud contrary to section 16A of the Theft Ordinance, Cap 210 – this charge related to the amount of HK$250,000 paid by the Plaintiff to the 1^st Defendant during the period from about December 2001 to early 2002;

(2)  two charges of theft contrary to section 9 of the Theft Ordinance, Cap 210 – these charges related to (i) the amount of HK$221,672 transferred from P’s 1^st Account to D2’s Account during the period from August 2002 to December 2004, and (ii) the amount of HK$1,674,182 transferred from P’s 2^nd Account to D2’s Account during the period from 29 January 2003 to 24 December 2004.

16. As a result of these convictions, the 1^st Defendant was sentenced to be imprisoned for 3 years and 6 months.  The 1^st Defendant was released from prison on 30 August 2007, having served that sentence.

17. There was originally a notice of appeal against conviction filed on behalf of the 1^st Defendant on 2 August 2005, but the appeal was abandoned on 25 January 2006.  The 1^st Defendant’s application to treat the notice of abandonment of appeal as a nullity was dismissed by the Court of Appeal on 25 May 2012 in CACC 334/2005.

The 1^st Defendant’s defence

18. At the trial, the 1^st Defendant denied that he had defrauded the Plaintiff and said that he had only borrowed between HK$200,000 and HK$300,000 from the Plaintiff.  This defence is contrary to his admissions made in his video recorded interview by the police, and also inconsistent with the bank records and documents which clearly show that over HK$1.8 million was transferred by the Plaintiff to D2’s Account.

19. The 1^st Defendant maintained that his admissions made to the police were involuntary, he having been beaten up and threatened by the police to make those admissions.  However, in the 1^st Defendant’s criminal trial, Deputy District Judge Browne was satisfied beyond reasonable doubt that the admissions were made voluntarily.

20. The 1^st Defendant also complained that the Plaintiff’s original demand in the letter before action was for HK$3.6 million, the total amount claimed was reduced to about HK$2.6 million in the Statement of Claim, and the total amount claimed was further reduced to about HK$2.1 million in the Amended Statement of Claim.  However, Mr Timmy Yip for the Plaintiff has explained that the amount ultimately claimed has been reduced to tally with the amounts referred to in the criminal charges of which the 1^st Defendant was convicted.

21. I accept the Plaintiff’s evidence and reject the 1^st Defendant’s evidence, and find in favour of the Plaintiff against the 1^st Defendant as claimed.

The claim against the 2^nd Defendant

22. As earlier mentioned, the Plaintiff accepts that he had no direct dealings with the 2^nd Defendant and there is no evidence that the 2^nd Defendant was a party to the 1^st Defendant’s fraud or deceit.  Although there is some general evidence that the 2^nd Defendant had on occasions withdrawn money from D2’s Account when told to do so by the 1^st Defendant to defray family expenses, Mr Yip fairly accepts that there were deposits into D2’s Account which did not come from the Plaintiff and there was no clear evidence as to when money was withdrawn by the 2^nd Defendant and how much was withdrawn by the 2^nd Defendant on each occasion.  According to the 2^nd Defendant, she also deposited moneys which she received from her friends or relatives by way of loans or from her daughter into D2’s Account.

23. On such bare evidence, I am not satisfied that the Plaintiff has made out a claim against the 2^nd Defendant based on the cause of action of “money had and received”.  It seems clear that “ministerial receipt” by an agent is a defence to such cause of action (see Goff & Jones, The Law of Unjust Enrichment, 8^th Ed, paragraphs 28-14 to 28-16).  The 2^nd Defendant was not even an agent of the 1^st Defendant to receive the moneys transferred by the Plaintiff, and there would be no reason to find the 2^nd Defendant liable to the Plaintiff on the principles of unjust enrichment.

Conclusion

24. I give judgment to the Plaintiff against the 1^st Defendant in the total sum of HK$2,145,854, together with interest on the judgment sum at the rate of prime plus 1% per annum from 24 December 2004 to the date of judgment and thereafter at judgment rate until the date of payment.  The Plaintiff shall also have the costs of the action against the 1^st Defendant to be taxed on an indemnity basis if not agreed, in view of the 1^st Defendant’s fraudulent conduct and wholly unmeritorious defence.

25. I dismiss the Plaintiff’s claim against the 2^nd Defendant.

26. In so far as the 2^nd Defendant’s costs are concerned, I make a Sanderson order that they be paid by the 1^st Defendant directly.

27. Lastly, the Plaintiff’s own costs are to be taxed in accordance with legal aid regulations.