CHAN LAU FUK TSANG v. LOK CHUN KIT AND OTHERS

DCCJ 3248/2022

[2024] HKDC 281

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3248 OF 2022

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REASONS FOR DECISION

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Introduction

1.  This is an application by the plaintiff under Order 19 rule 7 of the Rules of the District Court for judgment in default of notice of intention to defend against the 1^st, 2^nd, 4^th and 5^th defendants.

2.  At the hearing on 22 December 2023 (“the hearing”), Mr Earl Deng, counsel for the plaintiff, applied to have the application against the 5^th defendant adjourned sine die with liberty to restore because the writ has yet to be served on him. I therefore granted the application.

3.  At the hearing, I granted the reliefs sought against the 1^st, 2^nd and 4^th defendants with costs. Here are my reasons.

Service

4.  The amended writ of summons was served on the 1^st and 4^th defendants on 22 August 2022 by inserting in the letter box at the usual and last known address of the 1^st defendant and leaving at the registered office of the 4^th defendant.

5.  Service of the concurrent writ of summons was served on the 2^nd defendant out of jurisdiction on 13 October 2022.

6.  The 2^nd defendant entered an acknowledgment of service through a firm of solicitors on 12 April 2023.

7.  No acknowledgment of service was entered by either of the 1^st and 4^th defendants.

8.  The statement of claim was served on the 1^st and 4^th defendants by ordinary post on the usual and last known address of the 1^st defendant, by leaving at the registered office of the 4^th defendant and by hand on Messrs Chih, the then solicitors acting for the 2^nd defendant all on 18 May 2023.

9.  The present summons was served on the 1^st and 4^th defendants by ordinary post on the usual and last known address of the 1^st defendant and the registered office of the 4^th defendant on 11 October 2023. It was also served on the 2^nd defendant by ordinary post on Messrs Chih, the then solicitors acting for the 2^nd defendant and the usual and last known address of the 2^nd defendant in China on 11 October 2023.

10.  I am satisfied that the writ of summons and the present summons were duly served on the 1^st, 2^nd and 4^th defendants and they have chosen not to take any action nor to appear.

Legal principles

11.  In an application under Order 19 rule 7, the court cannot receive any evidence in cases hereunder, but must give judgment according to the pleadings alone: see Hong Kong Civil Procedure 2022 Vol 1 at 19/7/11.

12.  It is not the practice of the court to make a declaration of right in default of defence, or on admissions or by consent but where such relief is to be granted without trial or evidence, the right course for the court is not to make a declaration but to state on what footing the relief is to be granted: see Hong Kong Civil Procedure 2022 Vol 1 at 19/7/14.

13.  The declaratory reliefs to be granted should not be in terms wider than what the plaintiffs are entitled to and what is necessary to do justice to them: see Hong Kong Civil Procedure 2022 Vol 1 at 19/7/20.

The plaintiff’s pleaded case

14.  Mr Earl Deng, counsel for the plaintiff, has helpfully summarized the plaintiff’s pleaded case, which I gratefully adopt.

15.  By a series of phone- and video-calls between 10 July 2020 and 12 July 2020 with persons who held themselves out as members of a public security bureau in Beijing (“the fraudsters”), the plaintiff was misled into believing that she had committed financial crimes. This in turn led her to meet with a person who claimed to represent the fraudsters and set up an online banking services for Bank of China (Hong Kong) (“BOCHK”) which had access to her Hong Kong dollar savings account maintained with BOCHK No 01292410054488 (“P’s savings account”) and her foreign currency savings account maintained with BOCHK No 03135192055732 (“P’s forex account”). The frausters told her that setting up the online banking services were necessary in order to arrange or funds for the production of a notarised document to be issued by the Beijing Fangyuan Notary Public Office (北京東城區方園公証處); they also told her that the purpose of this document is to certifying that the plaintiff does not have a criminal record.

16.  On 13 and 14 July 2020, and upon instructions from the fraudsters, the plaintiff set up online banking services and transferred sums of money from her various accounts to the P’s savings account.

17.  On 16 July 2020, the plaintiff discovered that all the funds in P’s forex account and most of the funds in P’s savings account were withdrawn. She immediately instructed BOCHK to freeze the accounts and then reported the matter to the police the following day (“the reported crime”).

18.  Subsequently, the plaintiff discovered that bank accounts maintained by the 1^st, 2^nd, 4^th and 5^th defendants were found to contain money related to the reported crime.

19.  For the purpose of this application, it was discovered that:

(a)  a sum of HK$117,000 was transferred from P’s savings account to the 1^st defendant’s Nanyang Commercial Bank account No 04347710888239 on 16 July 2020;

(b)  a sum of US$36,341 was transferred from P’s forex account to the 2^nd defendant’s China Minsheng Bank account No 100185279 on 15 July 2020; and

(c)  a sum of HK$100,000 was found to have been received by the 4^th defendant’s Standard Chartered Bank account No 41500457784 on 16 July 2020.

Money judgment

20.  The monies received by the 1^st, 2^nd and 4^th defendants were out of the plaintiff’s accounts without the plaintiff’s prior consent nor authorisation.

21.  I am satisfied that the plaintiff is entitled to money judgment against the 1^st, 2^nd and 4^th defendants on the basis of unjust enrichment as they were unjustly enriched at the expense of the plaintiff: see Chan Ting Ting v Zhang Qingrun & Ors [2023] 3 HKC 626.

22.  I therefore give judgment in favour of the plaintiff against:

(a)  against the 1^st defendant for the sum of HK$117,000 together with interest thereon at the rate of 1% over the best lending rate of HSBC from 16 July 2020 to the date of judgment and thereafter at judgment rate to the date of payment;

(b)  against the 2^nd defendant for the sum of US$36,341 together with interest thereon at the rate of 1% over the best lending rate of HSBC from 15 July 2020 to the date of judgment and thereafter at judgment rate to the date of payment; and

(c)  against the 4^th defendant for the sum of HK$100,000 together with interest thereon at the rate of 1% over the best lending rate of HSBC from 16 July 2020 to the date of judgment and thereafter at judgment rate to the date of payment.

Declaratory relief

23.  Mr Deng submitted that there is no evidence to show whether the portions of the money transferred to the 1^st defendant’s account, the 2^nd defendant’s account and the 5^th defendant’s account are still in the hands of the 1^st defendant, the 2^nd defendant and the 5^th defendant. The 4^th defendant’s account was cancelled on 30 April 2021. It is difficult for the plaintiff to prove whether the HK$100,000 transferred to the 4^th defendant’s account is still in the 4^th defendant’s hands. In the light of the approach adopted in Milestone Electric Inc v Meihoukang Trading Co Ltd [2020] HKCFI 2524, the plaintiff is no longer seeking a declaration that the relevant sums are held by the respective defendants on constructive trust for the plaintiff.

Costs

24.  I order that the 1^st, 2^nd and 4^th defendants do pay the plaintiff the costs of this action including this application (with certificate for counsel), to be taxed if not agreed.

25.  The plaintiff’s own costs shall be taxed in accordance with the Legal Aid Regulations.