ANTHONY MICHAEL SMITH v. THOMPSON BRIGHT LTD

DCCJ 4673/2021

[2023] HKDC 1252

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4673 OF 2021

————————

BETWEEN

————————

————————————————

ASSESSMENT OF DAMAGES

————————————————

INTRODUCTION

1.  This is the assessment of damages of the plaintiff’s claim against the defendant in respect of damages suffered by reason of a conspiracy to injure the plaintiff using unlawful means by the defendant and others.

2.  In the absence of notice of intention to defend, the plaintiff obtained final and interlocutory judgment against the defendant on 28 February 2022. It was adjudged that the defendant do pay the plaintiff (1) the sum of US$11,723.59 or the Hong Kong dollar equivalent at the time of payment together with interest thereon at the rate 8% per annum from 10 August 2016 to the date of the final and interlocutory judgment and thereafter at judgment rate until payment; (2) damages to be assessed; and (3) costs.

3.  By order of Master Maurice Lam dated 5 May 2023 (“the 5 May 2023 Order”), assessment of damages was set down for 6 September 2023 at 9:30 AM in Court No 18, with the estimated length of hearing being 1 day.

4.  By the same order, the plaintiff was ordered to draw up, file and serve the Order on the defendant.

5.  By the 4^th affirmation of Lam Kwai Lung dated 9 August 2023 and filed on behalf of the plaintiff, it was affirmed that the 5 May 2023 Order had been served on the defendant by leaving the same at the defendant’s registered address.

6.  In such circumstances, while the defendant was not represented and was absent at the hearing, I am satisfied that the defendant has due notice of today’s assessment hearing. I shall therefore proceed with the assessment in the defendant’s absence.

THE PLAINTIFF’S CASE

7.  Between August and November 2016, the plaintiff paid funds in a total amount of US$82,430.46 (“Funds”) into the respective bank accounts of the defendant and AWDH Trading Ltd (“AWDH”):

(a) US$11,723.59 was transferred to and deposited in the defendant’s account at Bank of China (Hong Kong) Limited, account number 01258492134843 on 10 August 2016;

(b) US$50,506.87 was transferred to and deposited in AWDH’s account at DBS Bank (Hong Kong) Limited, account number 0167886898530 on 27 October 2016 (“First DBS Sum”); and

(c) US$20,200.00 was transferred to and deposited in AWDH’s account at DBS Bank (Hong Kong) Limited, account number 0167886898530 on 28 November 2016 (“Second DBS Sum”).

8.  According to the plaintiff, he had made those payments in the belief that the Funds would be used to purchase shares in various publicly listed companies on his behalf.

9.  The plaintiff’s belief was induced by statements made to him by a person purporting to be a Mr Shawn Wellington of LV Partners, and by other persons purporting to be associates of Mr Wellington (“Mr Wellington and his associates”).

10.  On 17 May 2017, the plaintiff received a letter from the Australian Securities and Investments Commission informing him that he had been identified by the Hong Kong Police as a potential victim of a Hong Kong investment scam.

11.  The plaintiff then realized the statements made to the him by Mr Wellington and his associates were false and made with the intention to deceive him, and did deceive him, resulting in him suffering the loss of the Funds.

12.  Therefore, the defendant, AWDH and Mr Wellington and his associates acted in combination to deceive the plaintiff and by means of that deception caused the plaintiff injury through the loss of the Funds.

LEGAL PRINCIPLES

13.  The plaintiff seeks compensation from the defendant, despite the fact that the First DBS Sum and the Second DBS Sum were transferred to the bank account of AWDH. This is consistent with the starting point that a defendant to a successful conspiracy claim will be jointly and severally liable to the claimant in respect of the damage caused by the conspiracy: Civil Fraud: Law, Practice & Procedure by Grant & Mumford (1^st ed) at [2-129].

14.  In terms of the damages to be awarded, damages for unlawful means conspiracy should put the innocent party back in the financial position he was in before he sustained the wrong: Chan Shu Chun v Dr Kung Yan Sum [2023] HKCFI 840 per Hon Au-Yeung J at [218].

EVIDENCE

15.  The only witness is the plaintiff himself. He adopted his witness statement dated 4 April 2023 during his examination-in-chief. He also answered questions I raised during the hearing.

16.  I find the plaintiff to be an honest witness and have no hesitation in accepting his evidence, which is also consistent with the documentary evidence of this case.

17.  In particular, there are contemporaneous documents showing the transfer of the First DBS Sum and the Second DBS Sum from the plaintiff to AWDH on 27 October 2016 and 28 November 2016 respectively.

DAMAGES

18.  The plaintiff seeks damages in the sum of US$50,506.87 and US$20,200.00, being equivalent to the First DBS Sum and the Second DBS Sum respectively.

19.  Based on the evidence before me, I am satisfied damages assessed at US$50,506.87 (or the Hong Kong dollar equivalent at the time of transfer) and US$20,200.00 (or the Hong Kong dollar equivalent at the time of transfer) should put the plaintiff back in the financial position he was in before he fell victim to the abovementioned unlawful conspiracy.

PRE-JUDGMENT INTEREST

20.  The plaintiff originally sought pre-judgment interest at judgment rate on the damages to be awarded by this court.

21.  Pre-judgment interest is awarded to compensate a plaintiff for being kept out of his money, on the footing that it is to be taken as having borrowed commercially the amount of its successful claim so that he would not have any shortfall in his funds pending the determination of his action: Waddington Ltd v Chan Chun Hoo Thomas CACV 10/2014 (unrep, 20 May 2016) at [172].

22.  It was observed by the Court of Appeal that courts have consistently awarded pre-judgment interest at the rate of 1% above prime, although there have been occasions when this practice has been departed from.

23.  This practice has not changed despite the involvement of foreign currency. In Sahara Investment Group Private Ltd v Liu Zhijia and Others [2018] HKCFI 16, the plaintiff company had transferred a sum of US$4.5 million to an entity unknown to it because of an internet fraud. For the damages awarded in favour of the plaintiff, Anthony Chan J ordered pre-judgment interest to run from the date of transfer to the date of judgment at US dollar prime rate plus 1% and thereafter at judgment rate until payment.

24.  At the hearing, Mr Raymond Shek, solicitor appearing on behalf of the plaintiff, agreed with the principles laid down by the Court of Appeal in Waddington Ltd v Chan Chun Hoo Thomas (supra) and therefore he no longer sought pre-judgment interest at judgment rate. Instead, he agreed pre-judgment interest on damages awarded should run from the date of transfer to the date of judgment at US dollar prime rate plus 1% and thereafter at judgment rate until payment.

COSTS

25.  Costs should follow the event. Mr Shek confirmed the plaintiff would only seek costs of the action in the amount of HK$1,260, which I shall allow in full.

DISPOSITION

26.  Based on the aforesaid matters, I enter final judgment in favour of the plaintiff against the defendant and order as follows:

(1) The defendant do pay the plaintiff damages in the sum of US$50,506.87 (or the Hong Kong dollar equivalent at the time of transfer) with interest to run from 27 October 2016 to the date of judgment at US dollar prime rate plus 1% and thereafter at judgment rate until payment.

(2) The defendant do pay the plaintiff damages in the sum of US$20,200.00 (or the Hong Kong dollar equivalent at the time of transfer) with interest to run from 28 November 2016 to the date of judgment at US dollar prime rate plus 1% and thereafter at judgment rate until payment.

(3) The defendant shall pay the plaintiff’s costs of the action (including the assessment of damages), summarily assessed at HK$1,260.