Hmpg Gmbh v. Hong Kong Xianghui De Trading Co Ltd

HCA 1882/2021

[2022] HKCFI 2313

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1882 OF 2021

________________________

BETWEEN

________________________

_______________________________

J U D G M E N T

_______________________________

1.This is the plaintiff’s application by summons filed on 17 May 2022 (“the Summons”) for judgment in default of defence against the defendant.

2.The plaintiff is a German company. It commenced this action by writ issued on 14 December 2021 to recover a sum of US$997,500 (“the Sum”) transferred to the defendant’s bank account maintained at the Bank of East Asia Limited (account no. 01518568035543) (“the Account”) on 19 November 2021. The plaintiff claimed that it was deceived into making the transfer by an email on 18 November 2021 sent from someone disguising as the true intended recipient New Gene (Hangzhou) Bioengineering Co., Ltd. (“New Gene”). That email stated that the defendant is New Gene’s sister company in Hong Kong. New Gene confirmed with the plaintiff one week later that it had not received the funds and had never instructed the plaintiff to make the transfer to the Account. The plaintiff’s case is that in such circumstances, the defendant held the Sum, which it had obtained by fraud, on constructive trust for the plaintiff.

3.I am satisfied that the plaintiff has duly served the writ, the Statement of Claim and the Summons on the defendant by leaving them at the defendant’s registered address stated in its Annual Return. The defendant has not acknowledged service of the writ nor has it filed any Defence. The plaintiff is therefore entitled to enter judgment against the defendant.

4.The plaintiff seeks a declaration that the defendant held the Sum or its traceable proceeds on trust for the plaintiff. Whilst it is not the normal practice of the court to make a declaration without a trial, that is a rule of practice which may be departed from when the plaintiff has a genuine need for the declaratory relief and justice would not be done if such relief were denied. In cases concerning alleged email frauds where a proprietary claim was asserted (as in the present case), the courts have granted declaratory relief in the default judgment context to enable the plaintiff to pursue proprietary in addition to mere personal remedies against the defendant. See Hong Kong Civil Procedure 2022, Vol 1, para 19/7/20 at p 565; Wismettac Asian Foods Inc v United Top Properties Ltd [2020] 3 HKLRD 732 at [15]. I am satisfied that the present case is one where justice requires the court to grant the declaration sought by the plaintiff.

5.For the above reasons, I enter judgment in default of defence against the defendant on the following terms:

(1)  There be a declaration that the defendant held the Sum transferred to the Account on 19 November 2021 or its traceable proceeds on trust for the plaintiff;

(2)  The defendant do forthwith repay the Sum to the plaintiff;

(3)  The defendant do pay the plaintiff interest on the Sum at the rate of HSBC prime rate + 1% from 19 November 2021 until the date of judgment (25 July 2022), and thereafter at judgment rate until full payment; and

(4)  The defendant do pay the plaintiff’s costs of this action, including costs of the Summons, costs of today’s hearing, costs of the plaintiff’s injunction application, and all costs reserved, on a party and party basis, summarily assessed at HK$350,000.

Mr Albert Cheung, instructed by Lam, Lee & Lai, for the Plaintiff

The Defendant was not represented and did not appear