Yan Melvin Kei Wai v. Lan Yunqing and Others

HCA 2529/2024

[2025] HKCFI 3257

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2529 OF 2024

________________

BETWEEN

________________

________________

J U D G M E N T

________________

INTRODUCTION

1.This is the hearing of the Plaintiff’s summonses for disclosure orders against HSBC and Hang Seng Bank, respectively, pursuant to section 21 of the Evidence Ordinance, Cap 8 or under Norwich Pharmacal principles.

2.The Plaintiff is a victim of online fraud. Pursuant to the scammer’s instructions, he transferred various sums of money totalling HK$4,257,266.20 (“the Sum”) to bank accounts under the names of D1-D9 (collectively, “the Defendants”) maintained with HSBC or Hang Seng Bank. There are 2 other recipients but because of the relatively small sums involved, the Plaintiff does not seek disclosure orders against their banks.

3.By these summonses, the Plaintiff seeks disclosure of information in the bank accounts held in the names of the Defendants to enable him to trace the Sum and the second-tier recipients.

LEGAL PRINCIPLES

4.Section 21(1) of the Evidence Ordinance provides that on the application of any party to any proceedings, the court may order that such party be at liberty to inspect and take copies of any entries in a banker’s record for any of the purposes of such proceedings.

5.This type of order is justified where the plaintiff seeks to trace funds which, in equity, belong to him and of which there is strong evidence that he had been fraudulently deprived: Yaron Brown v Lexinta Ltd [2018] HKCFI 2302, §16(2), DHCJ William Wong SC.

6.The jurisdiction of the court rests on the proposition that unless the assets in question can be located and secured, the ultimate determination of ownership of those assets may be frustrated by their dissipation and there will be no point in requiring the production of documents or information at trial: Yaron Brown, §16(4).

7.There are 3 limits to a section 21 application: Yaron Brown, §16(5).

(1) The Plaintiff must demonstrate a real prospect that the information may lead to the location or preservation of assets to which he is making a proprietary claim;

(2) The documents sought to be disclosed must be identified with some level of specificity, similar to what would be expected of a subpoena; and

(3) The Court needs to balance the potential advantage of disclosure against the potential detriment to the person against whom the order is sought. This includes considering the costs, invasion of privacy and breach of obligations of confidence owed to others.

8.As a general rule, where innocent parties are caught up or have become involved in the tortious or wrongful activities of others, justice may require that they come under a duty to assist the victim through the provision of information. There must be a nexus between the bank accounts to be discovered and the misappropriated funds: Yaron Brown, §§18, 20-21.

9.For a Norwich Pharmacal Order to be made, the Court must be satisfied (i) that there was cogent and compelling evidence that serious tortious or wrongful activities had taken place; (ii) that the order would very likely reap substantial benefits for the Plaintiff; and (iii) that the discovery sought would not be unduly wide: A Co v B Co [2002] 3 HKLRD 111, §13, Ma J (as he then was).

APPLICATION OF THE LEGAL PRINCIPLES

10.The Plaintiff has strong and compelling evidence that he was defrauded into transferring money on various occasions to the Defendants’ individual bank accounts in HSBC and the Hang Seng Bank. The Plaintiff did not have any dealings with any of the Defendants and they have no legitimate reason to receive or retain the Plaintiff’s money. As pleaded, the Plaintiff has a proprietary right over the Sum. He has a legitimate claim in constructive trust, unjust enrichment and conspiracy to defraud.

11.The Plaintiff has no claim against each of HSBC and Hang Seng Bank, who were innocently involved in the tortious or wrongful acts of the Defendants. The 2 Banks are plainly in possession of the documents sought.

12.The order for discovery would likely reap substantial benefits for the Plaintiff in establishing his proprietary claim, understanding the fund flow, identifying the next layer of recipients, and tracing the proceeds.

13.The discovery sought is not unduly wide and the terms are specific. It covers bank accounts of each defendant and the period of discovery is, in respect of each Defendant (save for D4), to start from the date of the Plaintiff’s deposit into the bank account of each Defendant.

14.In respect of D4, the Plaintiff asks for disclosure to commence from 17 September 2024. There is no evidence as to why this date was picked. Accordingly, the application in respect of D4 is adjourned pending filing of a further affirmation explaining why the 17 September 2024 start date was chosen. The Plaintiff shall file and serve the further affirmation within 21 days. The application will be dealt with on paper.

15.The 2 Banks take a neutral stance.

16.For the reasons given, I am satisfied that I should give an order in terms of the draft orders, except those in relation to D4.

17.I thank Ms Pan for her assistance.

Ms Chris Pan, of Yan Lawyers, for the Plaintiff