CABLE, BRADLEY PAUL v. RED BRIDGE UNIVERSAL LTD AND OTHERS

HCA 1877/2021

[2022] HKCFI 1911

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1877 OF 2021

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D E C I S I O N

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A.  Introduction

1.  The Plaintiff was the victim of a fraudulent scheme. This is his action against the 2^nd layer recipients who, he claims, actively handled the funds defrauded out of him without his consent.

2.  The present summons is taken out by the Plaintiff for, amongst others, disclosure against HSBC (which holds accounts of D1), pursuant to section 21 of the Evidence Ordinance, Cap 8 (“EO”). The purpose is to trace, preserve and recover his money. The rest of the summons has been disposed of. (See the decision dated 27 May 2022.)

3.  D1 and HSBC have been served with the summons and the supporting affirmations of the Plaintiff and Mr Anthony Leung and notice of this adjourned hearing. D1 asserts that it is not a party to the summons and queries, by letter dated 18 May 2022, why it should consent to the application. HSBC remains neutral in this application. I am satisfied that I can proceed to dispose of the summons in the absence of D1 and HSBC.

B.  Background

4.  According to the pleaded case, the Plaintiff was induced by fraudulent misrepresentation to invest in a sham spot gold investment scheme and thus made repeated money transfers for a total of HK$14,405,555 (“the Sum”) between 31 October 2019 and 2 March 2020 (“the Fraud”).

5.  The Plaintiff commenced proceedings in HCA 937/2021 against, amongst others, ePaylinks Technology Co Ltd (“ePaylinks”) and Rely International Ltd (“Rely”), the 1^st layer recipients of part of the Sum. The Plaintiff has obtained default judgment against Rely on 23 February 2022.

6.  The present action involves the 2^nd layer recipients. Amongst others, D1 was said to have received and dissipated a total sum of HK$9,000,000; and D2 was said to have received a total sum of HK$4,401,020 transferred to its accounts at BEA and OCBC by Rely, shortly after the Sum (in tranches) was received by the 1^st layer recipients.

7.  The Plaintiff’s case is that Rely engaged D1 to facilitate the disguising and dispersing of the Sum. D1 opened 2 electronic accounts with ePaylinks, a company which sold Global Cash Cards, a type of cash debit card issued by MasterCard. Rely gave instructions to the Plaintiff to make 13 deposits between 31 October 2019 and 20 January 2020 totalling HK$9,000,000 into ePaylinks’ bank account(s). D1 then emailed ePaylinks on or around the same dates, instructing ePaylinks to credit D1’s electronic accounts for the same amounts. ePaylinks would comply by “topping up” the Global Cash Card(s) issued to D1. Those amounts were then, almost immediately, emptied.

8.  The Plaintiff had never made the withdrawals or authorized any of his money to be transferred to Global Cash Cards in any manner. He had expected his funds to be applied to a mobile software application or e-trading account to make spot gold investments, which never occurred.

9.  D1’s pleaded defence is that it was ePaylinks’ agent helping in the sale of Global Cash Cards. Whilst D1 did not dispute the process in which Global Cash Cards were “topped up”, D1 made a bare denial of knowledge over the debits made by the Plaintiff or that D1 had received the HK$9,000.000.

10.  The Plaintiff had never had any business dealings with D1 or other 2^nd layer recipients and had never heard of them before the Fraud. D1 did not have any legitimate reason or entitlement to receive any part of the Sum from the Plaintiff. By receiving and transferring away part of the Sum, D1 and others facilitated the fraudulent scheme.

11.  The Plaintiff has previously obtained an Injunction Order dated 13 May 2022 against D1 to freeze D1’s assets up to the value of HK$9,000,000. That injunction was extended on 19 May 2022 by consent, until further order.

12.  Together with the injunction, on 13 May 2022, a Disclosure Order was made, requiring D1 to:

“(1) … inform the Plaintiff in writing within 3 days of service of this order on it of their assets of an individual value of HK$10,000 or more in Hong Kong, whether in its own name or not and whether solely or jointly owned, giving the value, location and details of all such assets.

(2) This information must be confirmed in an affirmation which must be served on the Plaintiff’s solicitors within 4 days thereafter.”

13.  The Injunction and Disclosure Order was served on 17 May 2022 on D1’s legal representatives. D1 breached the Disclosure Order and did not inform the Plaintiff of its assets.

14.  In this application, the Plaintiff seeks a disclosure order on the basis that it is very likely that at least part (if not all) of the HK$9,000,000 handled by D1 would have found its way back to D1’s account, in order for D1 to have full control over such amounts.

C.  Disclosure Order

15.  Section 21 of the EO provides that the Court may make an order for inspection of banker’s record for the purpose of the proceedings.

16.  The power to order inspection under section 21 should be exercised with great caution as the privacy of the account holder and banker/customer relationship have to be respected. When considering an application under section 21, the main test is relevance: Tiger Resort Asia Ltd v Kazuo Okada [2018] HKCFI 472, DHCJ Keith Yeung SC (as he then was), §28.

17.  The accounts which the Plaintiff sought disclosure of are likely to contain material relevant to its tracing exercise. They were in fact highly germane to the issues of fund flow and the identities of the wrongdoers.

18.  On the facts of this case, by nature, the Global Cash Cards would involve fund flows and may well be between D1’s own accounts. The first day of the discovery period (31 October 2019) was when the money was first defrauded out of the Plaintiff. The end date of the discovery period was 30 April 2020 (about 2 months after the Plaintiff’s last transfer to ePaylinks and then to Rely), to cater for the fact that it might have taken D1, as a 2^nd layer recipient, same time to siphon off funds received by it.

19.  The Plaintiff has made out a case under section 21 of the EO. I therefore make an order for disclosure against HSBC similar to the one I made in respect of D2’s accounts at BEA and OCBC. In essence, HSBC is to disclose:

(1)  All account numbers of the accounts of D1 held with HSBC, including but not limited to an account at HSBC specified in paragraph 1(b) of the Summons (“HSBC Accounts”);

(2)  The identity and addresses of the persons giving instructions for all transactions in relation to the HSBC Accounts;

(3)  The amount of money remaining in the HSBC Accounts; and

(4)  Copies of the bank statements of the HSBC Accounts during the period from 31 October 2019 to 30 April 2020.

20.  I also give leave to the Plaintiff to use and disclose the documents obtained as a result of this order for the purpose of

(i)  investigating the whereabouts of the money transferred out of the HSBC Account, and the identities of the wrongdoers; and

(ii)  to commence or pursue legal proceedings (whether in Hong Kong or elsewhere) against the wrongdoers,

relating to the Fraud but not other matters.

21.  There is no evidence to suggest that D1 or HSBC would suffer damage in view of the limited scope of the order.

22.  I therefore make an order in terms, together with incidental orders, and orders on costs (of the summons and of compliance with the order) as set out in the draft order.