Hounö a/S v. Teckali (HK) Industries Ltd and Others

HCA 2796/2015

[2021] HKCFI 1548

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2796 OF 2015

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Before: Hon Mimmie Chan J in Court

Dates of Hearing:  24 and 28 May 2021

Date of Judgment: 28 May 2021

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J U D G M E N T

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1.The 3^rd Defendant having been given notice of the trial, chose neither to instruct lawyers to attend nor to seek leave from the Court to be represented by a director. Wu Yaodun who made the witness statement on behalf of the 3^rd Defendant was not called to give evidence at trial, and the statement is accordingly not in evidence and will not be considered by the Court.

2.I am satisfied that the Plaintiff has proved its case against the 3^rd Defendant on unjust enrichment.  The sum of EUR9,022,000 was paid by the Plaintiff to the 1^st Defendant by mistake and was induced by fraud.  The sum of US$633,000 received by the 3^rd Defendant in its Hong Kong bank account was from the money which had been transferred from the Plaintiff’s account to the 1^st Defendant’s account, which was then transferred to the 2^nd Defendant and/or the 3^rd Defendant’s accounts.  I am satisfied that there is a sufficient causal connection between the Plaintiff’s loss and the benefit of the money received by the 3^rd Defendant.

3.None of the defences set out by the 3^rd Defendant have been established.  On the Plaintiff’s evidence, the 3^rd Defendant did not hold any licence to carry on currency exchange business in Hong Kong.  On its own case set out in its Defence, the 3^rd Defendant was either engaged in an unlawful currency exchange business in Hong Kong without a license, or otherwise assisting third parties to circumvent foreign exchange control measures on the Mainland.  On the facts pleaded in its Defence, the 3^rd Defendant should have been put on enquiry as to the legality of the transfers and exchanges it was effecting.  I am not satisfied that it would be entitled to rely on any defence of being a bona fide purchaser for value, or on a bona fide change of position.

4.I am also satisfied that the Plaintiff has proved its case on knowing receipt and dishonest assistance.

5.Accordingly, I enter judgment against the 3^rd Defendant for payment of the sum of US$633,000, interest and costs of the action.

6.Orders in terms of the draft order prepared by the Plaintiff on the judgment are granted, with amendments shown in the draft.

Mr Hugh Kam, instructed by Skadden, Arps, Slate, Meagher & Flom, for the plaintiff

The 3^rd defendant was not represented and did not appear