GENG WEN v. ZHONG YING AND ANOTHER

HCA 239/2023

[2024] HKCFI 3513

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 239 OF 2023

____________

BETWEEN

____________

_____________

D E C I S I O N

_____________

1.  This is the plaintiff’s application by summons filed on 6 November 2024 for judgment against the 2^nd defendant in default of defence.

2.  The facts pleaded in the Amended Statement of Claim are that on 4-5 January 2021, various telephone calls containing misrepresentations were made to the plaintiff purportedly from the authorities on the mainland, as a result of which she provided her online banking details to a website. Between 6 and 15 January 2021, her bank account was debited to the tune of HKD6.93 million. Included in these debit transfers was a sum of HKD1,000,000 to one Chen Cheng Yi, who on the same day (14 January 2021) transferred a sum of HKD500,000 to the 2^nd defendant’s bank account with China Minsheng Banking Corp Ltd.

3.  On 15 February 2023, a concurrent writ was issued, and on 29 March 2023, a master gave leave to issue and serve the concurrent writ on the 2^nd defendant at an address in the PRC (“the PRC Address”).

4.  On 13 October 2023, K.Yeung J granted an ex parte Mareva injunction against the 2^nd defendant restraining him from disposing of the sum of HKD500,000. This injunction has been continued by various judges.

5.  Also on 13 October 2023, K. Yeung J gave an order giving leave to the plaintiff to serve out of the jurisdiction any summonses, documents, notices or orders in this action on the 2^nd defendant at the PRC Address.

6.  On 18 October 2023, the plaintiff filed a statement of claim (“SOC”), which contained a more restricted claim (for HKD500,000) against the 2^nd defendant, the writ having claimed against him jointly and severally the total sum of HKD6.93 million. The SOC was amended to include inconsequential clarifications on 29 February 2024 (“ASOC”).

7.  On 15 March 2024, service of the writ was effected at the PRC Address, as evidenced by a document from the Foshan authorities dated 15 March 2024 and a document from the Guangdong court dated 12 April 2024.

8.  On 7 June 2024, the plaintiff’s solicitors sent by courier a copy of the ASOC to the 2^nd defendant at the PRC Address.

9.  Despite the above, no notice of intention to defend has been filed by the 2^nd defendant.

10.  As the relief sought by the plaintiff includes a declaration, under Order 13 rule 6 of the Rules of the High Court (“RHC”), the plaintiff proceeded with the action as if the 2^nd defendant had given notice of intention to defend.

11.  The 2^nd defendant has not filed a defence. Accordingly, the plaintiff has applied under Order 19 rule 7 RHC for judgment in default of defence.

12.  As service has been effected, and the 2^nd defendant has not filed a defence, the court will assume that the facts pleaded in the ASOC have been impliedly admitted. Hence, it is not necessary to consider evidence in support of the claim[1].

13.  I am satisfied, on the facts pleaded in the ASOC, that a constructive trust arose on the transfer of HKD500,000 into the 2^nd defendant’s bank account. Having scrutinized the application carefully, I am also satisfied that a declaration should be granted by the court even though the claim involves fraud, and that it is not necessary to hold a trial. This is in line with a number of High Court judgments where fraudulent scams had resulted in the transfers of funds[2].

14.  Accordingly, I would make an order in terms of paragraphs 1, 2(a), (b), (c), (d), (e) and (g) with interest to run from 14 January 2021 to 3 December 2024 at prime plus 1, and thereafter at judgment rate, and paragraph 3 of the summons. Notwithstanding K. Yeung J’s order (paragraph 5 above), out of an abundance of caution[3], I would also give retrospective leave to serve the ASOC on the 2^nd defendant out of the jurisdiction.