Quadpack Asia Pacific Ltd v. Hang Seng Bank Ltd

HCMP 1286/2018 [2018] HKCFI 2502 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO 1286 OF 2018 ________________________   IN THE MATTER OF the inherent jurisdiction of the High Court   and   IN THE MATTER of an application for a Norwich Pharmacal Order

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BETWEEN
	QUADPACK ASIA PACIFIC LIMITED	Plaintiff
and
	HANG SENG BANK LIMITED	Defendant

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Before:

DHCJ Bernard Man, SC in Chambers (Open to the Public)

Date of Hearing:	1 November 2018
Date of Decision:	1 November 2018

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D E C I S I O N

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1.This is an application by the plaintiff for a Norwich Pharmacal order against the defendant, a well-known bank in Hong Kong.  The defendant has indicated it will adopt a neutral stance in the present application and seeks 28 days from the service of the order to be made to comply with the order upon the plaintiff’s undertaking to indemnify its costs and expenses in complying with the order.  The plaintiff is willing to give the undertaking, and as Mr Lai very fairly submitted, for good order, that undertaking should be embodied in the terms of the order that I shall make, and I will come back to this aspect in a moment. 

2.The plaintiff’s case is that it is a victim of email fraud.  The plaintiff engaged in the business of cosmetic packaging for the beauty industry.  It had a supplier called K K Plastic Factory Limited which is abbreviated as “KKP” in the papers. 

3.On 18 July 2018, the plaintiff’s finance manager, Ms Robyn Haddican, received an email purportedly from Ms May Fai of KKP to the effect that the usual account into which payment was made would no longer be used, and the plaintiff was asked to pay any outstanding sum for goods purchased into an account with the defendant under the name of one Xianyu Home Appliances Limited, and that account is abbreviated as “the Receiving Account” in the papers.

4.On the following day, that is 19 July 2018, Ms Haddican received another email from another member of staff of KKP, one Ms Joyce Deng, enquiring whether she had received the earlier email from Ms Fai. Ms Haddican replied that she had indeed received it but she needed to confirm the information therein before she could arrange for payment. Ms Haddican forwarded the email she apparently received from Ms Fai to one of her colleagues within the plaintiff, one Ms Jane Tsui.  Ms Haddican asked Ms Tsui by email to make a telephone call to Ms Fai to confirm the change in bank account.

5.Ms Haddican then received two emails on 19 July 2018 apparently from Ms Tsui.  The first one stated that Ms Tsui had called Ms Deng and would update Ms Haddican later.  The second email of 19 July 2018 gave an impression that the change in bank account had been confirmed with KKP, but it turns out that this second email of 19 July 2018 was most likely a spoofed email because it came from an address which is very similar to, but actually different from, Ms Tsui’s real email address.

6.As a result of the events described above, Ms Haddican caused a remittance of US$231,857.79 to be made to the Receiving Account.  Subsequent information from the police shows that there were reports that KKP’s email had been hacked.  It also appears that at the relevant time, various emails had been sent by Ms Tsui and KKP to Ms Haddican to the effect that KKP’s bank account had actually not been changed.  But for some reason which is not apparent to me, Ms Haddican never received or read those emails.  The evidence adduced by the plaintiff shows that Ms Haddican’s email was actually not hacked. That evidence is in the form of an IT expert’s confirmation to the plaintiff.

7.The various aspects of the story at the moment may not be totally clear,  primarily because it might not be totally clear at this point in time precisely how the fraud was committed, due to the lack of clarity of the evidence on whether Ms Haddican’s email address was indeed hacked. And if Ms Haddican’s email was not hacked, it is difficult to see how precisely the fraud could have been committed, and as I said in the discussion with Mr Lai, the possibilities might be infinite.  But as Mr Lai submitted and I agree, although it is not clear what exactly happened to Ms Haddican’s account, on the evidence adduced by the plaintiff, there is cogent and compelling evidence that some serious wrong was committed against the plaintiff although it is not precisely clear as to how that was done and precisely what persons were involved in it.     

8.For these reasons, I am satisfied that there is cogent and compelling evidence that serious tortious or wrongful activities have taken place against the plaintiff.  I am further satisfied that the order sought will or will very likely reap substantial and worthwhile benefits for the plaintiff, to enable it to investigate the passage of moneys in and out of the receiving account to aid tracing and proprietary claims.

9.Indeed, this is a classic situation where an innocent party - the bank in this case - is caught up or has become involved in the tortious or wrongful activities of others, and equity and justice require such innocent person to come under a duty to assist the victim by providing information.  And for these reasons, I am prepared to grant the order sought, subject to the amendments I discussed with Mr Lai just now which I will set out presently.

10.The first amendment I will make is to delete the first six words in paragraph 1 of the originating summons because I take the view that there is no need to state the jurisdiction for the order sought.

11.The second amendment is in respect of the schedule.  For paragraphs 2, 5 and 6, I would add the words “documents relating to” before each of these paragraphs.  I would also delete the words in paragraph 4, “information relating to the receiving account”, and all these amendments were discussed with Mr Lai and he has no objection to them.  

12.As I said earlier, Mr Lai has fairly suggested that the time for provision of documents should be 28 rather than 14 days in paragraph 1 and also that there should be an additional paragraph, I suspect between 2 and 3, expressly providing that the plaintiff do reimburse the defendant for the costs and expenses in complying with the order in paragraph 1 on a full indemnity basis.

 

	(Bernard Man, SC)
	Deputy High Court Judge

Mr Lai Chun-ho, instructed by Loeb & Loeb LLP, for the plaintiff

The defendant was not represented and did not appear