JOEL ENRIQUE VIVEROS GALINDO v. TAN ZHIRONG AND OTHERS

HCA 733/2022

[2026] HKCFI 1616

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 733 OF 2022

____________

____________

_______________

J U D G M E N T

_______________

A.  INTRODUCTION

1.  This is the Plaintiff’s Summons dated 26 January 2026 for default judgment to be entered against D3, who had obtained the Plaintiff’s shares by fraudulent means.

2.  The power to enter default judgment is discretionary. Under Order 19 rule 7 of the RHC, the court is required to scrutinize whether the matters pleaded in the statement of claim entitle the plaintiff to the judgment sought, rather than rely on evidence: Hong Kong Civil Procedure 2026 (“HKCP”) at §19/7/14.

B.  THE PLEADED CASE

3.  D1 is a PRC national who owned a company in Hong Kong which provided corporate secretarial services.

4.  D2 was a company incorporated in Samoa.

5.  D3 is an individual residing in Hong Kong.

6.  The Plaintiff incorporated 2 companies via D1, being: (1) Vantary Co. Limited (“Vantary”) in Hong Kong; and (2) 廣州市創翎服務設計有限公司 (“CL”) in the PRC. The Plaintiff allowed D1 to keep the company kits and books and accounts of Vantary and CL on his behalf.

7.  The Plaintiff was the only director and shareholder of the 10,000 shares of Vantary (the “Vantary Shares”) and Vantary is the sole shareholder of CL.

8.  The Plaintiff acquired 3 landed properties in Guangzhou in the name of CL (the “3 PRC Properties”), at a total purchase price of RMB13,009,273.00. The current market value of the 3 PRC Properties as at December 2025 was more than RMB20,000,000.00.

9.  For 2 years between 15 October 2019 and 6 November 2021, the Plaintiff had to stay in Mexico and was unable to return to China due to the COVID pandemic.

10.  Through falsifying the Plaintiff’s signature and Vantary’s company chop, D1, inter alia: (1) transferred the Vantary Shares to himself; (2) replaced the Plaintiff with himself as the director of Vantary; and (3) procured the transfer of control over CL to himself.

11.  Upon the Plaintiff’s application to the PRC authorities, the changes in control and key personnel of CL were revoked by notice on 19 May 2022 (“the Revocation Notice”), in consequence of which the Plaintiff regained control of CL. The Revocation Notice was published on the National Enterprise Credit Information Publicity System and remains available for public search (including by the Defendants) at all times.

12.  D1 later transferred the Vantary Shares to D2 at nil consideration.

13.  On 17 June 2022, the Plaintiff issued the writ in this action against D1 and D2. On the following day, the Plaintiff obtained an interim injunction restraining D1 and D2 from, inter alia: (1) disposing of the Vantary Shares; and (2) interfering with the management of Vantary and/or CL (“1^st Injunction Order”).

14.  In early October 2024, it came to the Plaintiff’s notice that both D1 and D2 breached the 1^st Injunction Order:

(1)  D1 interfered in the management of Vantary by resigning as the director of Vantary and appointing D3 as the same.

(2)  D2 transferred the Vantary Shares to D3 at nil consideration.

15.  In an attempt to avoid the Plaintiff’s discovery of D3’s appointment as director and share transfer, D3 delayed the filing of the relevant ND2A and NAR1 in breach of sections 654(1) and 662(1) of the Companies Ordinance (Cap 622).

16.  D3 successfully applied to the Administrative Bureau of Guangzhou Tianhe District for a set of CL’s company documents including its business licence, using false explanations that documents were lost.

17.  D3 attempted to procure control over CL and its bank account from the Plaintiff to himself with a falsified company chop of Vantary.

18.  D3 then attempted to sell the 3 PRC Properties at an undervalue of RMB 6.7 million, requiring the purchaser to pay the proceeds to another entity instead of CL.

19.  On 24 October 2024, the Plaintiff obtained the 2^nd Injunction Order against D3 from, inter alia, (1) disposing of the Vantary Shares; and (2) interfering with the management of Vantary and/or CL.

20.  On 28 October 2024, D3 was served with the Amended Writ, the Amended SOC and the 2^nd Injunction Order. On 21 December 2024, the 1^st Injunction Order was served on D3.

21.  On 12 December 2025, the Plaintiff filed and served the Re-Amended Writ and the Re-Amended Statement of Claim (“RASOC”) on D3 by registered mail to D3’s address in Hong Kong.

22.  The Plaintiff’s causes of action against D3 are conspiracy of the 3 Defendants to defraud or injure the Plaintiff, knowing receipt, unjust enrichment and constructive trust.

23.  D3 had never filed an acknowledgement of service or returned the Vantary Shares to the Plaintiff.

24.  D1 has not been validly served out of jurisdiction in Mainland China. D2 has been served but has not acknowledged service.

C.  CONSPIRACY TO DEFRAUD OR TO INJURE

25.  A case based on conspiracy must plead the following elements:

(1)  The agreement between two or more persons. The means of carrying out the agreement, whether lawful or unlawful, must be set out.

(2)  The intention to injure the plaintiff, whether predominant (in the case of a lawful means conspiracy) or merely an intention to injure (in the case of an unlawful means conspiracy).

(3)  The acts that were carried out pursuant to the agreement and the stated intention.

(4)  The damage caused to the plaintiff.

See Pido v Compass Technologies Co Ltd [2010] 2 HKLRD 537 at §17, by Ma CJHC (as he then was).

26.  It is not necessary that every overt act is done by every conspirator, but the act must be done pursuant to the conspiracy or combination. The very existence of the agreement can be inferred from overt acts. It is not necessary for the conspirators to join the conspiracy at the same time, but the parties to it must be sufficiently aware of the surrounding circumstances and share the same object for it properly to be said that they were acting in concert at the time of the acts complained of; Chan Shu Chun and Another v Dr Kung Yan Sum and Others [2023] HKCFI 840 at §144, Au-Yeung J.

27.  Although each of the Defendants appeared at different stages, I am satisfied from the RASOC that the Defendants had conspired to defraud or injure the Plaintiff:

(1)  There was a combination of the 3 Defendants, to misappropriate the Vantary Shares from the Plaintiff, seize control of CL and sell the 3 PRC Properties.

(2)  Unlawful means of forgery, false company chops and resolutions, or false representation to the administrative authorities were used in every transfer of the Vantary Shares to D1, D2 and D3. Those acts were only consistent with dishonesty.

(3)  The intention to injure the Plaintiff was plain as the effect of the transfers of Vantary Shares was to strip him of beneficial interest in the Vantary Shares and ultimately to lay hands on the 3 PRC Properties.

(4)  The overt acts were pleaded. D2 transferred the Vantary Shares to D3 in breach of the 1^st Injunction Order within a week of the Plaintiff’s service of the same on D2. At or around that time, D1 was also in breach of the 1^st Injunction Order when he resigned as a director and appointed D3 as the same. The proximity in time of these acts of the Defendants reinforced the fact that they were acting in concert.

(5)  Damage was caused to the Plaintiff in that the Vantary Shares were transferred away from him at nil consideration and he lost control over both Vantary and CL and nearly the 3 PRC Properties.

28.  Adverse inference should be drawn against D3 as he received the Vantary Shares for no legitimate cause, for no consideration and without the business licence/documents of CL (something no reasonable transferee would have accepted). D3 failed to come clean despite being served with the Re-Amended Writ, the RASOC and the 2 Injunction Orders. He failed to raise objection despite the Plaintiff’s efforts in preventing D3 from selling the 3 PRC Properties in or around October 2024.

29.  Conspiracy only requires an agreement a combination between 2 or more persons, which is the case here. D3 can still be held liable although D1 and D2 are not parties to this Summons.

D.  KNOWING RECEIPT

30.  The plaintiff must show (1) a disposal of his assets in breach of fiduciary duty, (2) the beneficial receipt by the defendant of assets which are traceable as representing the assets of the plaintiff, and (3) knowledge on the part of the defendant that the assets he received are traceable to a breach of fiduciary duty: see Bank of Credit and Commerce International (Overseas) Ltd and Another v Akindele [2001] Ch 437 at 448B-C.

31.  Knowledge does not have to be acquired at the time of receipt, it can be acquired subsequently eg, from being served with the injunction order, the statement of claim, the summons for judgment and affidavits: Guaranty Bank and Trust Co v Zzzik Inc Ltd (HCA 1139/2016, 18/07/2016) at §§33-36, DHCJ Cooney SC.

32.  The defendant must have received the trust property for his own use and benefit, given that the receipt-based liability is to be properly confined to those cases where the receipt is relevant to the loss: see Agip (Africa) Ltd v Jackson [1990] Ch 265 at 292A-D.

33.  D1’s transfer of the Vantary Shares to himself and attempted take-over of CL was in breach of his fiduciary duties to the Plaintiff to keeping the company kit and company chop of those 2 companies safely.

34.  D2 had received the Vantary Shares and his intent must have been fraudulent, well knowing that the Vantary Shares did not belong to D1 by virtue of the lack of consideration.

35.  D2 transferred the Vantary Shares to D3 in breach of the 1^st Injunction Order, such that D3 became the ultimate holder of the Vantary Shares. D3 must have knowledge of D2’s fraud as D3 paid no consideration, had to rely on false information to the Administrative Bureau to apply for a set of CL’s company documents. His delayed filing of documents with the Companies Registry in Hong Kong was further evidence of his fraudulent intent to conceal his receipt of the Vantary Shares. The irresistible inference is that he wanted to defeat the Plaintiff’s claim against D1 and/or D2 in relation to the Vantary Shares. He played an active role in trying to get the most out of his shareholding and nearly accomplished the conspiracy by attempting to sell the 3 PRC Properties. It would be unconscionable for him to retain the Vantary Shares.

36.  D3 would have acquired the necessary knowledge of the fraud, latest, when the Re-Amended Writ, and RASOC were served on him. D3 must be accountable to the Plaintiff as a constructive trustee on the basis of knowing receipt.

E.  UNJUST ENRICHMENT

37.  The plaintiff has to show that the defendant was enriched at the expense of the plaintiff, that the enrichment was unjust and that no defence is applicable: Shanghai Tongji Science and Technology Industrial Co Ltd v Casil Cleaning Ltd (2004) 7 HKCFAR 79 at §67.

38.  The “at the expense of” requirement can be satisfied even when the claimant and the defendant have not dealt directly with each other. As summarized by Mr Recorder Eugene Fung SC (as he then was) in BCPE Diamond Holdco SRL v Sunwe Plastic HK Ltd and Others [2025] 2 HKC 415 at §14(3):

“There are a number of situations in which the plaintiff has not directly provided a benefit to the defendant, but the law treats the defendant’s enrichment as being equivalent to a direct transfer of the benefit from the plaintiff to the defendant. Such situations include (a) where an agent is interposed between the plaintiff and the defendant; (b) where the right to restitution is assigned; (c) where an intervening transaction itself is a sham; (d) where a series of co-ordinated transactions are treated in substance as a single transaction; (e) where the defendant receives property from a third party into which the plaintiff can trace an interest ( ITC at [47], [48] & 50]).”

(Also see the discussion in Semgas Supply Pte Ltd and Another v Hong Kong Xin Chuang Decorative Material Co Ltd [2023] HKDC 1823 at §§54 – 55)

39.  D3 was enriched in obtaining the Vantary Shares. Although there was no direct dealing between the Plaintiff and D3, the law can still treat D3’s enrichment as equivalent of a direct transfer having regard to the fraudulent manner in which each transfer up to him was made. At least the situations of (d) and (e) in BCPE Diamond exist in D3’s case.

40.  The transfer to D3 was at the expense of the Plaintiff due to the lack of consideration flowing from D3 and more importantly, his conduct in trying to conceal the transfer to him whilst making attempts to sell the assets ultimately owned by the Plaintiff. It was unjust to allow such a fraudster to keep the shares traceable to the Plaintiff’s ownership. D3 raised no defence and cannot possibly raise any. The RASOC does disclose a case of unjust enrichment.

F.  CONSTRUCTIVE TRUST

41.  Where a property is obtained by fraud, equity imposes a constructive trust on the fraudulent recipient and the property is recoverable and traceable in equity: see Creative Impact (Hong Kong) Ltd v Luckon Travel Ltd and Another [2021] HKCFI 1552 per Au-Yeung J at §17.

42.  Again, if a defendant’s state of knowledge is such as to make it unconscionable for him to retain the money, the defrauded claimant has a tracing remedy. Knowledge does not have to be acquired at the time of receipt, it can be acquired subsequently while the property is in the recipient's hands: see Guaranty Bank.

43.  This was plainly a case where the Vantary Shares were knowingly obtained by fraud and equity imposes a constructive trust on each tier of recipient, including D3. It would be unconscionable for D3 to retain the Vantary Shares.

G.  ORDERS AND COSTS

44.  In the light of the above analyses, whilst there had to be some findings made against the other 2 Defendants, I grant reliefs only as against D3 under this Summons.

45.  It is not the normal practice of the court to grant a declaration without going to trial. That is, however, only a rule of practice, rather than a rule of law. It has to give way to the paramount duty of the court to do the fullest justice to the plaintiff to which he is entitled: HKCP at §19/7/14.

46.  To reflect the full proprietary rights of the Plaintiff in the Vantary Shares traceable into the hands of D3 and to do the fullest justice to the Plaintiff, there should be a declaration that D3 at all material times held and holds the Vantary Shares and their traceable proceeds on constructive trust for the Plaintiff. D3 should execute documents to transfer back those Shares to the Plaintiff.

47.  Having regard to the fraudulent means in which D3 obtained the Vantary Shares in the past and attempt to obtain control over CL, an injunction is necessary to restrain D3 from dealing with the Vantary Shares or interfering with the management of Vantary. I impose this injunction for 12 months pending enforcement action by the Plaintiff.

48.  I also give an order for accounts and enquiries.

49.  There shall be an order in terms of the draft order submitted by the Plaintiff with some clerical changes by me.

50.  I disallow the costs incurred for the hearing on 28 January 2026 because that hearing was fixed without observing the rule that there should be 2 clear days between the issue of the summons and the hearing.

51.  On a broad-brush basis, I assess the overall costs to be $220,000, payable by D3 to the Plaintiff.

52.  I thank Ms Sui for her assistance.