GMT INDUSTRIAL LTD v. FAN RONG LI and YAU PAUL as the Administrator of the estate of SELVAM SELVARAJ, deceased

HCA 546/2015

[2026] HKCFI 3275

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 546 OF 2015

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D E C I S I O N

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1.  This court, after a 3-day trial, handed down a judgment in favour of the plaintiff dated 22 May 2025 (“the Judgment”). It was ordered that, among other things, a declaration to the effect that Mr Selvam Selvaraj misappropriated a sum of US$2 million on 27 August 2007, and a sum of US$5 million on 1 November 2007 (collectively “the Payments”), in breach of his fiduciary duties and a declaration that Mr Selvaraj and his estate do hold the amount of such sums and the traceable proceeds and substitutes thereof on constructive trust for the plaintiff.

2.  This court further ordered that all necessary accounts and inquiries to enable the plaintiff to trace and recover the Payments and such traceable proceeds and substitutes thereof (together with all accrued interests) be taken. This court also ordered equitable compensation in the like amount with interest thereon be paid to the plaintiff.

3.  The defendant has not made any payment to the plaintiff pursuant to the Judgment. The Judgment remains outstanding. I understand from Mr Tai, counsel for the plaintiff, that there has been no appeal against the Judgment.

4.  By summons dated 4 August 2025 (“the Summons”), the plaintiff applies under section 21 of the Evidence Ordinance, Cap. 8, fororders, commonly known as bankers’ book orders, that the four banks identified in para graph 1 of the Summons do disclose to the plaintiff details of each and every bank accounts maintained by the defendant. This application is supported by the affidavit of Cosimo Borrelli, one of the liquidators of the plaintiff. His evidence is not contradicted and I see no reason why I should not accept his evidence.

5.  Madam Fan appears on behalf of the defendant to oppose this application. She has filed her written submission and a hearing bundle, and I have heard her oral submission. Mr Tai helpfully draws my attention to several authorities setting out the relevant principles of this kind of applications. In particular, I find Yaron Brown and Others v Lexinta Ltd and Ors [2018] HKCFI 2302 of particular assistance. Mr Tai summarizes the relevant principles expounded by DHCJ William Wong SC as follows:

(1)  A section 21 order is justified where the plaintiff seeks to trace funds which, in equity, belong to him and of which there was strong evidence that he had been fraudulently deprived (§16(2)).

(2)  There are three limited in the Bankers Trust jurisdiction which equally apply to the section 21 jurisdiction (§16(5)):

(a)  First, the plaintiff must demonstrate a real prospect that the information may lead to the location or preservation of assets to which he is making a proprietary claim.

(b)  Secondly, the documents sought to be disclosed must be identified with some specificity as would be expected of a subpoena.

(c)  Thirdly, the court needs to balance the potential advantage against the detriment to the person against whom the order is sought, not merely in terms of costs but by way of invasion of privacy and requiring breach of obligations of confidence to others.

(3)  As a general rule, where innocent parties are caught up or have become involved in the tortious or wrongful activities of others, justice may require that they come under a duty to assist the victim by the provision of information (§18).

(4)  However, there is a need to establish a nexus between the bank accounts to be discovered and the misappropriated funds (§§20-21).

6.  Section 21 of the Evidence Ordinance provides that on the application of any party to any proceedings, the court or a judge may order that such party be at liberty to inspect and take copies of any entries in a banker’s record for any of the purposes of such proceedings. In considering whether to make an order under this provision, this court would bear in mind what Deputy High Court Judge Poon (as he then was) said in CTO (HK) Ltd v Li Man Chiu & Ors [2002] 2 HKLRD 875.

7.  And this court will also bear in mind that the power to be exercised under section 21 of the Evidence Ordinance must be exercised in conformity with the general principles of discovery. This court has to be satisfied that the accounts are worthy that of the party to the proceedings or that the party is so closely connected with the accounts that items in them would be evidence against that party.

8.  In the present case, I am of the view that there is a nexus between the bank accounts to be discovered and the misappropriated funds. I am satisfied that there is a genuine need for the plaintiff to obtain such disclosures from the four banks so that it can enforce the Judgment against the defendant and carry out the tracing exercise.

9.  I have read the correspondence exchanged between the four banks and the plaintiff. And Mr Tai has handed up an updated draft order incorporating their comments on their previous drafts. I am satisfied that such disclosures are of necessity to the plaintiff in its enforcement of the Judgment against the defendant.

10.  I understand that the four banks have no objections to this application and all of them adopt a neutral stance in this matter. I have perused the latest draft order, and I have no difficulty in granting an order in terms thereof. There is no validity in the opposition mounted by the defendant.

11.  All the submissions of Ms Fan are of little relevance, and her complaint about the accuracy or the integrity of the Judgment is misplaced. This is not the occasion for her to reopen the issues resolved by this court in the Judgment.

12.  I agree with Mr Tai that the plaintiff is entitled to the disclosure sought against the four banks. I make an order in terms of the draft order, and costs of this application should be borne by the defendant, to be taxed if not agreed.