Xie Li Xin v. Legend Star Wealth Creation Ltd (Company No. 2226263)

HCA 1595/2022

[2023] HKCFI 777

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1595 OF 2022

________________________

BETWEEN

________________________

________________________

DECISION

________________________

1.For background of this matter, I refer with respect to the Judgment handed down by Wilson Chan J on 30 May 2022 in HCA 1476/2017[1] (“HCA 1476”, the “Judgment”).

2.HCA 1476 and the Judgement concerned a fraudulent scheme.  Wilson Chan J has found at §192 that the scheme was an archetypal arrangement whereby the culpable parties took concerted action to induce the plaintiff to invest substantial sums into a scam business, thereby causing substantial losses to him.

3.The present action has become necessary only because, as accepted and indeed pleaded in the Statement of Claim herein (at §110), “due to omission/inadvertence”, one aspect of the scam involving the defendant herein (“Legend Star”)  was not discovered until after the Judgment, so that Legend Star had not been joined as one of the defendants in HCA 1476.  That aspect is the assignment to it of the common area of what has been described in the Judgment as the Tin Shui Wai Shop (the “Common Area”).

4.Legend Star was struck off the Companies Register on 10 January 2020, but was restored by the Order of Deputy Judge Jonathan Chang SC dated 15 September 2022 pursuant to s 767 of the Companies Ordinance (Cap 622). According to s 768(1), upon such restoration, Legend Star is regarded as having continued in existence as if it had not been dissolved.

5.I am satisfied that the Writ and the Statement of Claim have validly been served upon Legend Star.

6.No Acknowledgment of Service or Defence has been filed.

7.Having read the contents of the Statement of Claim herein, the plaintiff appears entitled to the relief he is seeking therein.   

8.It is not the practice of the Court to grant declaratory relief without a trial.  However, in the present case, what is in effect a full trial of the matters has taken place.  Had the involvement of Legend Star been discovered earlier, I have little doubt that judgment would also have been entered against it after trial.  On the facts of this case, I am satisfied that interest of justice justifies this Court granting the declaratory relief sought on default.

9.I grant P leave to withdraw the Summons of 13 December 2022 (which was filed prematurely).  I allow the Summons of 8 March 2023 and grant:

(a)  a declaration that Legend Star is the constructive trustee in respect of the Common Area for the plaintiff;

(b)  an order that Legend Star do execute a conveyance to assign the Common Area to the plaintiff within 14 days from the date of this Judgment; and

(c)  in default, a partner of the solicitors for the plaintiff may be named and empowered to execute the necessary documents for the assignment.

10.As the reason for starting this separate action is the omission/inadvertence in not discovering Legend Star’s role earlier, I make no order as to costs both in respect of the action and this application.  

Mr James Man instructed by Gall, for the Plaintiff

The Defendant was not represented and appeared in person