Universal Capital Bank v. Deep Sea Seafood Trading Ltd
Read the full judgment text of HCA 1213/2015 on BabelCite. This High Court CFI judgment was delivered on 10 December 2015.
1. On 10 December 2015, I ordered that:
Cited by 1 case
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HCA 1213/2015 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 1213 of 2015 __________________
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____________________________________ REASONS FOR DECISION Orders made 1.On 10 December 2015, I ordered that:
2.I now give my reasons. Relevant background 3.On 1 June 2015, the plaintiff, a bank in Montenegro, issued the Writ in this action against the defendant, a private company incorporated in Hong Kong, then having its registered office at Flat A, 3rd floor, Excelsior Building, 358‑366 Nathan Road (“D’s registered office”). 4.The plaintiff claimed US$889,500 as money had and received by the defendant which was unjustly enriched by the transfer of EUR$678,900.21 as follows:
5.On 16 July 2015, the plaintiff obtained judgment in the sum of US$889,500 against the defendant in default of notice of intention to defend. The defendant and the intended intervener accepted that the default judgment was a regular judgment. 6.On 21 July 2015, the plaintiff obtained the Garnishee Order to Show Cause attaching all debts due from HSBC to the defendant judgment debtor to answer the default judgment in the sum of US$889,500. 7.By letter dated 30 July 2015, HSBC advised the defendant that HSBC had frozen the following amounts in the defendant’s account:
8.On 20 August 2015, the intended intervener issued a summons asking:
9.Francis Kong & Co felt able to act for both the intended intervener and the defendant. 10.By an affirmation affirmed on 20 August 2015, Madam Au‑Yeung Mui Lai Veronica (“Au‑Yeung”) of the defendant deposed, among others, that:
11.By an affirmation affirmed on 20 August 2015, Lam deposed, among others, that:
Setting aside regular judgments 12.On an application to set aside a regular default judgment, the major consideration is whether the defendant has shown a defence on the merits to which the court should pay heed, not as a rule of law, but as a matter of common sense, since there is no point in setting aside a judgment if the defendant has no defence, and because, if the defendant can show merits, the court will not prima facie desire to let a judgment pass on which there has been no proper adjudication, Hong Kong Civil Procedure, 2016, para 13/9/13. It is not sufficient to show a merely “arguable” defence that would justify leave to defend under order 14. The defendant must show that he has “a real prospect of success”. To do so, he must satisfy the court that his case and the evidence that he adduces in support of it is potentially credible and carries some degree of conviction, Hong Kong Civil Procedure, 2016, para 13/9/14. Joinder of parties 13.Order 15, rule 6(2) of The Rules of the High Court, Cap 4A, provides that:
Plaintiff’s case 14.The plaintiff’s case is supported by contemporaneous banking documents, the authenticity of which is not in dispute. 15.The transfer on 4 August 2014 of EUR678,900.21 to the account of China Jiahao with Hang Seng Bank Limited was made as a result of a spoof email. The email was sent using the email address [email protected], not from the designated email address [email protected]. Thus, the plaintiff did not have the authority of its customer (Firstright) to make the transfer and it had no right to debit the account of Firstright. Through its solicitor, the plaintiff confirmed that it did not debit the amount from Firstright’s account (§12 of Affirmation of Law Wing Chung Vincent). The plaintiff, not Firstright, suffered loss and was the correct party to sue as plaintiff. 16.The transfer of EUR678,900.21 was evidenced by contemporaneous banking documents (Exh LWCV‑2). 17.The transfer on 5 August 2014 of US$889,500, part of EUR678,900.21, from China Jiahao’s account with Hang Seng Bank Limited to the HSBC account was also evidenced by contemporaneous banking documents (Exh LWCV‑5). Moreover, the deposit of US$889,500 into the HSBC account on 5 August 2014 is admitted by Lam, see §11(e) above. Intended intervener’s case 18.The defendant claimed that it could not afford HK$50,000 to H$60,000 in May 2014. The defendant did not disclose its assets and liabilities. Nor did it disclose the May 2014 bank statement of the HSBC account. The defendant claimed that it did not carry on any business but did not explain why the HSBC account was a “Business Direct” account. 19.The defendant claimed that the HSBC account had been “borrowed” to the intended intervener as from 1 June 2014. Inexplicably (and there is no explanation), the address of the account holder printed on the HSBC August 2014 bank statement for the HSBC account was the defendant’s, not the intended intervener’s, address. 20.Au‑Yeung claimed that after 30 June 2014, she had no knowledge “about all the transactions in the HSBC account (§10(e) and (f) above). There was no explanation why she seemed to have knowledge about transactions in June 2014. 21.The defendant’s name is “Deep Sea Seafood Trading Limited” and Au‑Yeung’s name is “Au‑Yeung Mui Lai Veronica”. The August 2014 bank statement of the HSBC account recorded the following transactions:
22.It is reasonable to suspect that “Au‑Yeung Mui La” and “Deep Sea S Tra” may be connected to the defendant and its sole shareholder and director, Au‑Yeung. There is no denial of any connection and there is no explanation. This discredits the defendant’s and the intended intervener’s case that the defendant had nothing to do with the amount claimed. 23.What is more important is that there is no banking documents showing that the alleged payments to the four accounts in Mainland China was from the HSBC account or any other account. If the intended intervener had carried on genuine and bona fide money exchange business, banking documents should exist showing the transfer or deposit of more than RMB$5 million into bank accounts in China. None has been produced. The attempt to prove the payments out of millions in RMB by producing what purports to be mobile phone text messages is pathetic. Conclusion 24.The defendant’s and intended intervener’s case and the evidence that they adduced in support of it is not potentially credible and does not carry any degree of conviction. They have no real prospect of success. 25.For these reasons, I dismissed the Inter Parte Summons issued on 20 August 2015 by the intended intervener and ordered that the Garnishee Order to Show Cause dated 21 July 2015 be made absolute.
Mr Vincent Law, of Mayer Brown JSM, for the plaintiff Ms Carmen Kei, instructed by Francis Kong & Co,for the defendant and the intended intervener Garnishee, absent with excuse | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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