JUS DE FRUITS DE MOOREA S.A. v. HONGKONG YIDA COMMERCE CO LTD

DCCJ 45/2020

[2023] HKDC 1283

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 45 OF 2020

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DECISION

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BACKGROUND

1.  This is an application by the plaintiff for bankers’ books order and third party discovery. The background of this application has been set out in the first affirmation of the plaintiff’s CEO, Mr Jean-Michel Monot, who is the CEO of a French Polynesian company in the business of producing and selling fruit juice. As a result of a fraudulent scheme, the plaintiff has transferred funds to the account of a company known as Bo Shengda in 5 transactions as follows:

(a)  28 February 2019 – EUR 398,627.74;

(b)  4 March 2019 – USD 207,223.30;

(c)  11 March 2019 – USD 319,348;

(d)  18 March 2019 – EUR 77,000; &

(e)  19 March 2019 – CFP 4,473,765.

2.  On 19 June 2019, the plaintiff commenced the High Court proceedings HCA 1084/2019 against Bo Shengda for recovery of the monies. On 12 August 2019, plaintiff obtained default judgment. However, the plaintiff was only able to recover a small part of its losses from those proceedings.

3.  In late 2019, the plaintiff’s solicitors were informed by the police that the sum was transferred from Bo Shengda’s account to the defendant’s account. The plaintiff then commenced the present proceedings against the defendant in the District Court on 3 January 2020 to recover US$320,000 which is part of a series of fraudulent e-mails. Both the defendant and the bank adopt a neutral stance towards the present application.

LEGAL PRINCIPLES

4.  The plaintiff is relying on section 21 of the Evidence Ordinance, Cap 8, ie bankers’ books order, section 47B of the District Court Ordinance, Cap 336, and O.24, r.7A(2) of the Rules of the District Court, Cap 336H, ie the third party discovery and the common law principles of Norwich Pharmacal discovery.

5.  It is trite law that there are four requirements of Norwich Pharmacal discovery:

(a)  There must be cogent and compelling evidence to demonstrate the serious tortious or wrongful activities have taken place, the degree of proof required being commensurate with the seriousness of the allegations.

(b)  It must be clearly demonstrated that the order will or will very likely reap substantial and worthwhile benefits for the plaintiff. Where the plaintiff has brought a tracing claim, there must be a serious possibility that the discovery sought will allow the plaintiff to preserve what may well be his assets or realistically lead to discovery of such assets.

(c)  The discovery sought must not be unduly wide. The order must be specific and be restricted to those documents or classes of documents that are necessary to enable the plaintiff to preserve or discover assets.

(d)  The plaintiff must have exhausted other proper and reasonable avenues for obtaining the information sought.

6.  The plaintiff also cited Sofibus Patrimoine v Hongkong and Shanghai Banking Corporation Limited [2020] HKCFI 3063 at paragraphs 9 to 10 and Hwang Joon Sang v Golden Electronics Inc (No 2) [2021] 2 HKLRD 87 at paragraph 12.

DISCUSSION

7.  In respect of the disclosure order, the defendant and the bank have no objections. I am satisfied that the documents sought are relevant and necessary and the discovery is specific in focus.

8.  Furthermore, any concerns about invasion of Bo Shengda’s privacy is displaced and outweighed by the role it has played in acting as a conduit for the fraud. Bo Shengda’s involvement in the fraud is evidenced and confirmed by the fact that it did not even bother to file a notice of intention to defend when proceedings were brought against it by the plaintiff.

COSTS

9.  The plaintiff submitted that the bank should only be entitled to recover reasonable costs, so that there would be disputes as to whether the bank should be entitled to recover at a standard rate.

10.  The plaintiff further submitted that the bank’s standard charges are clearly excessive and it should not be allowed to levy such charges for profit‑making purposes, when banks are not entitled to make profits from compliance of court’s disclosure order (Hwang Joon Sang v Golden Electronics Inc (No 2) (supra) at paragraphs 18 to 22 & 26 to 27 and Dah Sing Bank Ltd v Sing Fai Handbags Manufactory Ltd (unreported, HCMP 1250/2003, 2 January 2007) at paragraph 6).

CONCLUSION

11.  For the above reasons, I am satisfied that the disclosure order as sought by the plaintiff should be granted upon the undertaking given by the plaintiff as per draft order. As such, I make an order in terms of paragraphs 1 and 2 of the draft order.

12.  As to the costs, I order the plaintiff to pay the respondent’s costs of this application and reasonable costs for compliance with the order on an indemnity basis. Such costs are to be summarily assessed by way of paper disposal by the presiding judge or registrar of the District Court.