AICI TAN v. ZHU YUAN MU GYXY TRADE LTD AND OTHERS

AICI TAN v. ZHU YUAN MU GYXY TRADE LTD AND OTHERS

On the pleaded facts the plaintiff established that the 6th defendant was enriched to the extent of US$76,653.90 by funds traceable to the plaintiff and that enrichment was unjust; there being no defence filed, judgment in restitution for US$76,653.90 was entered. Declaratory and proprietary relief (constructive trust and account) were refused because the statement of claim did not plead the 6th defendant as a fraudulent recipient nor that the traceable funds remained in the 6th defendant's ownership, and declarations are not normally granted on default without a trial.

Citation
[2023] HKDC 739
Parties
Plaintiff: AICI TAN; 1st Defendant: ZHU YUAN MU; 2nd Defendant: GYXY TRADE LIMITED (廣雲新英貿易有限公司); 3rd Defendant: FANG RU YAN TRADE LIMITED (芳如豔貿易有限公司); 4th Defendant: XING FENG HUA TRADE LIMITED (興鋒華貿易有限公司); 5th Defendant: DONG YONGMING; 6th Defendant: TONGWUZHOU (HONG KONG) TRADE CO., LIMITED (通五洲 (香港) 貿易有限公司); 7th Defendant: KAISHENGXIN TRADING LIMITED (凱盛新貿易有限公司); 8th Defendant: YHS TRADE LIMITED (永和順貿易有限公司)
Court
District Court
Jurisdiction
Hong Kong
Judgment Date
29 May 2023
Case Number
DCCJ2078/2022
Procedural Posture
Civil Restitution/constructive Trust Arising From Alleged Fraud / Application for Default Judgment Under RDC Order 19, Rule 7 (hearing to Enter Judgment)
Outcome
Judgment entered in favour of the plaintiff against the 6th defendant in the sum of US$76,653.90 with interest; remaining declaratory relief dismissed; costs ordered as below.
Legal Topics
Default Judgment, Unjust Enrichment, Constructive Trust, Proprietary Tracing, Service, Costs and Interest
Source Language
EN
Civil Procedure Equity Restitution Trusts Fraud Default Judgment Unjust Enrichment Constructive Trust +3 more

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Parties

AICI TAN

Plaintiff

ZHU YUAN MU

1st Defendant

GYXY TRADE LIMITED (廣雲新英貿易有限公司)

2nd Defendant

FANG RU YAN TRADE LIMITED (芳如豔貿易有限公司)

3rd Defendant

XING FENG HUA TRADE LIMITED (興鋒華貿易有限公司)

4th Defendant

DONG YONGMING

5th Defendant

TONGWUZHOU (HONG KONG) TRADE CO., LIMITED (通五洲 (香港) 貿易有限公司)

6th Defendant

KAISHENGXIN TRADING LIMITED (凱盛新貿易有限公司)

7th Defendant

YHS TRADE LIMITED (永和順貿易有限公司)

8th Defendant

Procedural Posture

Civil Restitution/constructive Trust Arising From Alleged Fraud / Application for Default Judgment Under RDC Order 19, Rule 7 (hearing to Enter Judgment)

Legal Issues

  1. 1 Whether plaintiff is entitled to default judgment against the 6th defendant on the pleaded statement of claim
  2. 2 Whether the 6th defendant was enriched at the plaintiff's expense and whether that enrichment was unjust (unjust enrichment elements)
  3. 3 Whether a constructive trust or proprietary remedy can be imposed on a second‑tier recipient absent pleadings that the recipient was fraudulent or still holds the traceable funds

Ratio Decidendi

On the pleaded facts the plaintiff established that the 6th defendant was enriched to the extent of US$76,653.90 by funds traceable to the plaintiff and that enrichment was unjust; there being no defence filed, judgment in restitution for US$76,653.90 was entered. Declaratory and proprietary relief (constructive trust and account) were refused because the statement of claim did not plead the 6th defendant as a fraudulent recipient nor that the traceable funds remained in the 6th defendant's ownership, and declarations are not normally granted on default without a trial.

Court Disposition

Judgment entered in favour of the plaintiff against the 6th defendant in the sum of US$76,653.90 with interest; remaining declaratory relief dismissed; costs ordered as below.

Orders

  • Judgment entered against the 6th defendant for US$76,653.90
  • Interest at prime rate plus 1% per annum from 7 May 2020 until date of decision and thereafter at judgment rate until payment in full