UBE SINGAPORE PTE LTD v. TONGX CO., LTD AND OTHERS

HCA 157/2023

[2026] HKCFI 2876

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 157 OF 2023

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J U D G M E N T

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A.  Introduction and Background

1.  This is the trial of the claims by the Plaintiff (“P”) against the 1^st Defendant (“D1”) and the 3^rd Defendant (“D3”). P’s claim against the 2^nd Defendant (“D2”) has been settled prior to this trial. D1 and D3 have not filed any acknowledgment of service of the Writ of Summons filed on 2 February 2023 and have never participated in this action at all. P seeks to prove its case against D1 and D3 at this trial in which they are absent.

2.  P, a company registered in the Singapore, is the victim of a fraud whereby fraudsters impersonated the CEO of P’s parent company, UBE Industries Ltd (“UBE”), and gave purported instructions to P’s staff and procured them to make a payment of US$998,750 to D1 which was then dissipated by D1 to D2 and D3.

3.  In P’s oral opening submissions and written closing submissions, it was confirmed that P’s claims against D1 and D3 are based only on unjust enrichment and P no longer pursues the proprietary claims. P also seeks a continuation of the Mareva injunction that had been obtained against D1 and D3 for 6 months post-judgment.

4.  P is represented by Mr Vincent Chiu, counsel.

B.  My Factual Findings

5.  To prove its case against D1 and D3, P has adduced the evidence of Mr Yaoki Hashimoto (“Hashimoto”) who was at all material time the Managing Director of P. In his witness statement, he set out the following matters:

(1)  In the morning of 30 November 2021, at around 11:30am, Ms Mai Hanagasaki, an Assistant Sales Manager at P, received a phone call from a man (“the Imposter”) who introduced himself as Mr Masato Izumihara (“Izumihara”), the President and CEO of UBE;

(2)  The Imposter requested to speak with P’s director. Ms Hanagasaki provided the Imposter with his mobile contact;

(3)  At around 12:30pm, he received a call from the Imposter with the number +81 3 5419 6110, which is the phone number for UBE’s Tokyo head office. During the call, the Imposter spoke fluent Japanese and had a similar voice to Izumihara, whom he had heard at company briefings. He mistakenly believed that the Imposter was Izumihara;

(4)  The Imposter alleged that the head office was arranging an urgent and highly confidential acquisition of a foreign-affiliated company in Asia (“the Fake Transaction”), and an urgent deposit was required to be made (“the Deposit”). To ensure that he did not verify the matter through normal corporate channels, the Imposter alleged that the acquisition stalled due to insiders’ leak, and instructed him to act independently and confidentially on the Fake Transaction. He mistakenly believed that the Fake Transaction was genuine;

(5)  The Imposter asked him to contact the purported lawyer (“the Fake Lawyer”) of the Fake Transaction at “tim@lawfirm-cole.co.uk” (“the Fake Lawyer’s Email”) immediately to obtain the payee details and to pay the Deposit on an urgent basis;

(6)  By email dated 30 November 2021, the Fake Lawyer gave him the payment instructions for payment to D1’s bank account no. 382557101687301 maintained with the Bank of Communications (Hong Kong) Limited (“D1’s Account”) in the sum of US$998,750;

(7)  He then instructed P’s accounting manager to execute the remittance of US$998,750 from P’s Account to D1’s Account (“the Remittance”);

(8)  There was further email correspondence between the Fake Lawyer and him regarding the records of the Remittance;

(9)  At around 5pm, the Imposter called him and said that the negotiations with the counterparty went well and he would contact him again the next day;

(10)  On 1 December 2021, at around 9am, the Imposter called him to request him to send all documents received from P’s bank to confirm that the counterparty had received the payment which he did;

(11)  On 2 December 2021, at around 9am the Imposter called again and asked if he had received the SWIFT MT103 message of the Remittance which P’s bank provided later and was sent to the Fake Lawyer by him;

(12)  On 3 December 2021, the Imposter called him at around 9am and said that an additional US$3M was required. Initially, he still believed the Imposter and he arranged the further payment at around 11:30am but P’s bank informed him that it might be a scam. He then sought confirmation of the genuineness of the Fake Transaction from UBE, which the Secretary to Izumihara informed him that in fact, Izumihara had never called him or anyone at P, and UBE was not conducting any company acquisition at the time, whether secret or otherwise;

(13)  The matter was then reported to the Hong Kong and Singapore Police on 3 and 6 December 2021 respectively; and

(14)  He confirms that apart from this fraud, there has never been any relationship, business or otherwise, between P or UBE or any of its affiliates with any of the three Defendants.

6.  Hashimoto attended this trial to adopt his witness statement as evidence in chief for P. There is no reason to not accept his evidence when he was not subject to any cross-examination and his evidence is corroborated by documentary evidence obtained from the banks adduced as evidence by P which is not the subject of any challenge. His evidence should be taken as my findings of fact.

7.  Furthermore, based on the documents obtained from D1’s bank and D3’s bank, it is demonstrated and I find that:

(1)  Prior to the receipt of the Remittance, D1’s Account had a US dollar (“USD”) balance of US$45.14;

(2)  At about 5:20pm on 1 December 2021, a sum of US$998,750 was credited to D1’s Account from P;

(3)  At about 10:38am on 2 December 2021, D1 converted US$500,000 in D1’s Account into Hong Kong dollars (“HKD”) in the sum of HK$3,892,027.75, bringing the HKD balance of D1’s Account to HK$3,892,327.75. Thus prior to this conversion, D1’s Account had a HKD balance of HK$300;

(4)  Shortly after the currency conversion, the HKD dollar balance of D1’s Account was increased to HK$3,892,327.75, at around 11:07am. At 11:32am on 2 December 2021, 2 sums of HK$1,237,500 and HK$1,230,960 respectively were remitted from D1’s Account to D2’s bank account (“the D2 Remittance”). Following the D2 Remittance (together with bank charges), the HKD balance of D1’s Account became HK$1,423,767.75;

(5)  Following the conversion of US$500,000 at 10:38am on 2 December 2021, the USD balance of D1’s Account became US$498,795.14. Three further payments (which made up the majority part of the USD balance of D1’s Account) took place whereby such payments were dissipated out of Hong Kong: (a) at 11:27am, a payment of US$186,033 was made to Huaiyang County Zhenglin Textile Printing and Dyeing Co Ltd at an account with Bank of China Henan Branch Zhengzhou in the PRC and a bank charge of US$51.28 was incurred; (b) at 12:29pm, a payment of US$150,002 was made to Hongkong Hky Trading Limited at an account with East-West Bank Pasadena in the United States of America and a bank charge of US$51.28 was incurred; and (c) at 12:50pm, a payment of US$150,001 was made to Pujiang Xinma Import Export Co Ltd at an account with Bank of Taizhou in the PRC and a bank charge of US$51.28 was incurred. Following these payments, the USD balance of D1’s Account became US$12,605.30;

(6)  On 2 December 2021 at 12:52pm, a sum of HK$1,423,000 was converted into USD and credited as US$182,361.04 to D1’s Account, thus increasing the USD balance in D1’s Account to US$194,966.34. The HKD balance was accordingly reduced from HK$1,423,767.75 to HK$767.75;

(7)  On 2 December 2021 at 1:44pm, the sum of US$194,000 was remitted from D1’s Account to D3’s bank account (“D3’s Account”) and credited to D3’s Account; and

(8)  The account balance of D1’s Account was eventually reduced to zero on 18 January 2022 and the account was then closed.

C.  Applicable Legal Principles

8.  In Shanghai Tongji Science & Technology Industrial Co Ltd v Casil Clearing Ltd (2004) 7 HKCFAR 79 at §67, the Court of Final Appeal approved a useful framework for approaching claims for restitution based on the principles of unjust enrichment as involving asking 4 questions: (1) was the defendant enriched? (2) was the enrichment at the plaintiff’s expense? (3) was the enrichment unjust? and (4) are any of the defences applicable? 

9.  If the first three matters are established by the plaintiff, it is then for the defendant to prove that there is a defence: see Samsoondar v Capital Insurance Company Limited [2021] 2 All ER 1105 at §18 per Lord Burrows.

10.  As to whether the defendant’s enrichment is at the expense of the plaintiff, these were set out in the judgment of Lord Reed JSC (with whom Lord Neuberger PSC, Lord Mance, Lord Carnwath and Lord Hodge JJSC agreed) in Investment Trust Companies v Revenue & Customs Commissioners [2018] AC 275 (“ITC”) which was helpfully summarized by Recorder Eugene Fung SC (as he then was) in BCPE Diamond Holdco SRL v Sunwe Plastic HK Ltd & Ors [2025] 2 HKC 415 at §14 as follows:

(1)  The reversal of unjust enrichment is premised on the defendant having received a benefit from the plaintiff such that the plaintiff has incurred a loss as a result of the provision of the benefit (ITC at §43);

(2)  As a general rule, the plaintiff must have directly provided a benefit to the defendant in order for the defendant’s enrichment to be at the expense of the plaintiff (ITC at §§46 & 50);

(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);

(4)  There is an exception to the general rule mentioned above. Where the plaintiff discharges a debt owed by the defendant to a third party, the remedy of subrogation may apply to reverse or prevent unjust enrichment (ITC at §49);

(5)  On the other hand, where the defendant has not received a benefit directly from the plaintiff and none of the above situations is applicable, it is generally difficult to maintain that the defendant has been enriched at the plaintiff’s expense (ITC at §51).

11.  Thus in the case where the defendant had not received a benefit directly from the plaintiff, the law treats the defendant’s enrichment as equivalent to direct transfer of benefit where the plaintiff can trace its interest into the assets of the defendant. The process of tracing was usefully explained by Lord Millett in Foskett v McKeown and Others [2001] 1 AC 102:

“ The process of ascertaining what happened to the plaintiffs’ money involves both tracing and following. These are both exercises in locating assets which are or may be taken to represent an asset belonging to the plaintiffs and to which they assert ownership. The processes of following and tracing are, however, distinct. Following is the process of following the same asset as it moves from hand to hand. Tracing is the process of identifying a new asset as the substitute for the old. Where one asset is exchanged for another, a claimant can elect whether to follow the original asset into the hands of the new owner or to trace its value into the new asset in the hands of the same owner. In practice his choice is often dictated by the circumstances… [127B-C]

… We speak of tracing money into and out of the account, but there is no money in the account. There is merely a single debt of an amount equal to the final balance standing to the credit of the account holder. No money passes from paying bank to receiving bank or through the clearing system (where the money flows may be in the opposite direction). There is simply a series of debits and credits which are causally and transactionally linked. We also speak of tracing one asset into another, but this too is inaccurate. The original asset still exists in the hands of the new owner, or it may have become untraceable. The claimant claims the new asset because it was acquired in whole or in part with the original asset. What he traces, therefore, is not the physical asset itself but the value inherent in it.

Tracing is thus neither a claim nor a remedy. It is merely the process by which a claimant demonstrates what has happened to his property, identifies its proceeds and the persons who have handled or received them, and justifies his claim that the proceeds can properly be regarded as representing his property. Tracing is also distinct from claiming. It identifies the traceable proceeds of the claimant's property. It enables the claimant to substitute the traceable proceeds for the original asset as the subject matter of his claim. But it does not affect or establish his claim. That will depend on a number of factors including the nature of his interest in the original asset. He will normally be able to maintain the same claim to the substituted asset as he could have maintained to the original asset. [128A-E] ”

12.  If a fund is made up of a mixture of the plaintiff’s money and that of the alleged wrongdoer, the initial withdrawals are presumed to be made with the wrongdoer’s own funds: see Re Hallett’s Estate (1880) 13 Ch D 696 and BCPE Diamond Holdco SRL at §15(h).

13.  As for enrichment being unjust, whilst mistake may be an unjust factor where the claim is made against a direct recipient, this could not be the case for a claim against an indirect recipient given there could not have been any intention to enrich the indirect recipient so the plaintiff could not have been under a mistaken belief in relation to that enrichment. However, where there was no legitimate or any basis for the recipient to receive the misappropriated funds, the defendant’s enrichment may be unjust on the ground of want of authority. See BCPE Diamond Holdco SRL at §§21-30.

14.  As for the grant of a post-judgment Mareva injunction, as held by DHCJ Keith Yeung SC (as he then was) in China Citic Bank Corporation Limited (Quanzhou Branch) v Li Kwai Chun & Ors [2018] HKCFI 1800 at §32, although the mere fact a judgment has been obtained does not itself justify a Mareva injunction, if it is otherwise justified (applying the established considerations and with the fact that it is post-judgment application factored in), a post-judgment Mareva injunction may be granted subject to the rider that it should normally be of limited and specific duration.

D.               Whether P has proved its claims in unjust enrichment against D1 and D3 and is entitled to the relief sought

15.  I am satisfied on a balance of probabilities that D1 is liable for unjust enrichment for US$998,750. I hold that:

(1)  D1 was enriched by obtaining the benefit of the crediting of US$998,750 to D1’s Account;

(2)  D1’s enrichment was at the expense of P having directly remitted US$998,750 to D1;

(3)  Given the lack of proper or legitimate basis for the remittance (there not having been any relationship, business or otherwise between P with D1) and P’s mistake as to the genuineness of the Fake Transaction, the enrichment is unjust; and

(4)  There is no applicable defence proven by D1 who has not appeared to contest P’s claims.

16.  I am also satisfied on a balance of probabilities that D3 is liable for unjust enrichment for US$194,000. I hold that:

(1)  D3 was enriched by obtaining the benefit of the crediting of US$194,000 to D3’s Account;

(2)  Applying the presumption in Re Hallett, by the time of the withdrawal from D1’s Account all the funds which belonged to D1 (US$45.14 and HK$300) had been completely withdrawn such that the sum of US$194,000 is presumed to be P’s money. Therefore, D3’s enrichment is at P’s expense;

(3)  Given the total lack of proper or legitimate basis for the remittance (there not having been any relationship, business or otherwise between P with D3) and the transfer of US$194,000 to D3 was without proper authority, enrichment is unjust; and

(4)  There is no applicable defence proven by D3 who has not appeared to contest P’s claims.

17.  I am also satisfied that the Mareva injunction previously granted should be continued as against D1 and D3 for a period of 6 months as an aid to enforcement of P’s judgment against them.

E.  Disposition and Orders

18.  I will grant judgment in favour of P and make the following orders:

(1)  D1 shall pay to P the sum of US$998,750 (or the Hong Kong dollar equivalent at the time of payment) together with interest at 1% above HSBC prime rate from 1 December 2021 until the date of Judgment and thereafter at judgment rate until full payment;

(2)  D3 shall pay to P the sum of US$194,000 (or the Hong Kong dollar equivalent at the time of payment) together with interest at 1% above HSBC prime rate from 2 December 2021 until the date of Judgment and thereafter at judgment rate until full payment;

(3)  The Mareva injunction granted by ST Poon J on 17 February 2023 as against D1 and D3 (i.e. paragraphs 2(a), (b), (e) and (f) of the Order dated 17 February 2023) shall be continued for 6 months from the date hereof; and

(4)  The costs of this action as between P and D1 and D3 (including all costs reserved) be paid by D1 and D3 jointly and severally to P, to be taxed if not agreed.