Sun Hsien Long and Others v. Wu Wai Leung Danny

HCA 831/2018

[2024] HKCFI 1285

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 831 OF 2018

________________________

BETWEEN

________________________

AND BETWEEN

________________________

(By original Writ and order to carry on dated 5 September 2019)

________________________

REASONS FOR JUDGMENT

________________________

1.The Plaintiffs seek an assessment of damages in the sum of HK$10,707,030. On 4 September 2023, the Re-re-amended Defence was struck out, with interlocutory judgment on liability entered for the Plaintiffs, with damages to be assessed.

Background

2.This case concerns the Plaintiffs’ claim for the Defendant’s return of value of an investment fund managed by the Defendant which was liquidated in October 2015, in the amount of HK$10,707,030. 

3.In July 2005, the Plaintiffs and other agreed to pay US$6 million to the investment fund. 

4.The contribution was transferred to a BVI company known as Diamond Unit which executed declarations of trust, whereby it acted as a nominee for the Plaintiffs and other, with its operational control vested in the Defendant. 

5.The Defendant invested the funds primarily in a company known as Courage Marine, a company listed in Singapore and since June 2011 in Hong Kong. 

6.In October 2015, the Plaintiffs and other decided to liquidate the investment fund, and a statement dated October 2015 (the “Statement”)  concerning the financial position of the investment fund was prepared and provided to the Plaintiffs.  It is provided in the Statement that 1,784,505 shares in Courage Marine at a price of HK$6 per share, totaling at HK$10,707,030 (the “Sum”), were held by a company named FUS of which the Defendant was a director. 

7.However, the Defendant refused to return the Sum to the Plaintiffs.  By an email on 10 November 2015 from the Defendant to the 1^st Plaintiff, the Defendant claimed that he was entitled to keep the Sum for coordination services related to the listing of Courage Marine in Hong Kong in 2011.  The Plaintiffs denied the existence of such an agreement. 

8.It is therefore the Plaintiffs’ case that they suffered loss, being the Sum less any reasonable remuneration to which the Defendant might successfully claim. 

9.A witness statement is prepared by the 1^st Plaintiff to verify the Plaintiffs’ pleas for the purpose of this assessment. 

10.The Defendant’s struck out defence basically denies the existence of the investment fund and the Defendant’s engagement, and claims that the Courage Marine shares were held for other purposes. 

11.The Defendant was declared bankrupt on 6 December 2022 and the Official Receiver was appointed the trustee in bankruptcy.  

12.On 29 May 2023, leave was granted to the Plaintiffs to proceed with this action on the conditions that no judgment would be enforced against the Official Receiver, and no application for costs would be made against her. 

13.On 26 July 2023, the Official Receiver confirmed that she would not adopt the Defendant’s defence or assign the right of defence, and did not intend to participate in the proceedings. 

14.On 4 September 2023, the Re-re-amended Defence was struck out, with interlocutory judgment entered for the Plaintiffs. 

Discussion

15.In light of the position of the Official Receiver, the Defendant has no interest in his defence, as any right to defend the claim is vested in the Official Receiver: Bankruptcy Ordinance (Cap 6)  ss 12, 58, 61(b); Heath v Tang [1993] 1 WLR 1421 (CA)  at 1424E-G. 

16.The Plaintiffs proceed with these proceedings for the purpose of proving debt within the meaning of s 34(3)  of the Bankruptcy Ordinance, including their costs: In re British Gold Fields of West Africa [1899] 2 Ch 7. 

17.With the Re-re-amended Defence struck out, the allegations in the Statement of Claim are deemed to be admitted: Order 18 rule 13(1)  of the Rules of High Court (Cap 4); Top One International (China)  Property Group Company Limited v Top One Property Group Limited (CACV 269/2011; 20.7.2012)  at §7.

18.As such, it is deemed to be admitted that the Defendant breached his contractual obligation in returning the Sum to the Plaintiffs since October 2015 in the amount of HK$10,707,030. 

19.It is also deemed to be admitted that there was no agreement on any remuneration that the Defendant might receive, and the Defendant did not plead otherwise. 

20.By reason of the above, it is ordered that: 

(a)  Damages is assessed at HK$10,707,030;  

(b)  Pre-judgment interest at the commercial rate plus 1% from 10 November 2015 until the date of judgment (4 September 2023)  and thereafter at judgment rate until payment; and

(c)  The Plaintiffs do lodge and serve its Statement of Costs on or before 13 May 2024.

Mr Josh Baker instructed by James Ho & Co. for the 1^st to 8^th Plaintiffs

Defendant acting in person being absent

Official Receiver and trustee of the estate of the bankrupt defendant being excused from the attendance