CHOY TIAN FOOK v. YOUSISHENG TRADE CO., LTD

DCCJ 2685/2020

[2020] HKDC 931

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2685 OF 2020

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JUDGMENT

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1.  This is an email fraud case. The plaintiff seeks to recover part of his money that he has been deceived into transferring to parties with which he had no dealings. The defendant is the second-tier recipient of such part of his money.

2.  The plaintiff commenced the present action in June 2020.  The affidavit evidence shows that the court documents have been served on the defendant at its registered office address last known to the plaintiff.  The defendant did not enter appearance.  I see no reason why the plaintiff should not be allowed to proceed pursuant to O32, r5(1) of the Rules of the District Court, Cap 336H.

3.  The pleaded case of the plaintiff is this.  The plaintiff resides in Singapore.  In about September 2018, he came into contact with a person claiming to be Xie Xiao Ting (“Xie”) first on Facebook and then through WeChat.  Xie represented that she was an investment broker and convinced the plaintiff to make investment in her forex currency plans.  Xie provided a purported website on which the plaintiff was invited to check the progress of his investment. Acting on her representation, the plaintiff transferred a total sum of USD520,000 (HK$4,056,000) to the bank accounts in the name of two companies in Hong Kong.  The plaintiff attempted to recuperate his funds in the following month, which Xie evaded.  Eventually, the plaintiff lost contact with Xie altogether.  The website provided by Xie was a bogus one.  The plaintiff reported the fraud to the Singapore police in November 2018.

4.  The Hong Kong Police was eventually involved, which informed the plaintiff that part of his money transferred to the accounts of those two companies mentioned above has since been transferred to the defendant’s bank account in Hong Kong. The latter has since been frozen by the police.  The amount involved was US$165,000 (“the Sum”).  Those two other companies were also dissolved in 2019.

5.  By the present action, the plaintiff claims:-

(1)  Restitution of the Sum from the defendant;

(2)  Declaration that the defendant is liable to return the Sum which it holds on constructive trust for the plaintiff on the ground of knowing receipt and dishonest assistance;

(3)  Interest; and

(4)  Costs.

6.  It is not the practice of the court to grant declaratory judgment by default. However, the court would do so, if the declaratory judgment is necessary for the purpose of manifesting justice to which the plaintiff is clearly entitled to^[1].

7.  On the basis of the pleaded case, I find that the plaintiff is entitled to trace the Sum now in the defendant’s account on the ground of constructive trust^[2], both as a matter of fact and inference.  The plaintiff needs the declaratory relief in respect of the Sum to render the proprietary claim effective.  The defendant in the circumstances is unjustly enriched by the Sum.  The plaintiff is entitled to the return of the Sum or payment by the defendant of the equivalent sum with interest.

8.  I therefore give judgment in terms of the summons.  As confirmed by counsel, that includes the costs of the action, including this application, to be taxed, if not agreed.