CABLE, BRADLEY PAUL v. RED BRIDGE UNIVERSAL LTD AND OTHERS

HCA 1877/2021 [2022] HKCFI 1556 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 1877 OF 2021 ____________ BETWEEN CABLE, BRADLEY PAUL Plaintiff and RED BRIDGE UNIVERSAL LIMITED （紅橋國際有限公司） 1st Defendant GOLDEN FORT TRADING CO., LIMITED （皇家金堡貿易有限公司） 2nd Defendant TAK FAT TRADING CO 3rd Defendant ____________ Before: Hon Au-Yeung J in Chambers Dates of Hearing: 20 May 2022 Date of Decision: 20 May 2022 Date of Reasons for Decision: 27 May 2022 _________________________________ R E A S O N S F O R D E C I S I O N _________________________________ Introduction The Plaintiff was the victim of a fraudulent scheme. This is his action against the 2nd layer recipients who, he claims, actively handled the funds defrauded out of him without his consent. The present summons was taken out by the Plaintiff for disclosure against two banks of D2, Bank of East Asia (“BEA”) and OCBC Wing Hang Bank Limited (“OCBC”), pursuant to section 21 of the Evidence Ordinance, Cap 8. The purpose was to trace, preserve and recover his money. D2 has been served with the summons and the supporting affirmations of the Plaintiff and Mr Anthony Leung but D2 has not responded or appeared. Letters have been sent to BEA and OCBC as early as 6 May 2022 indicating the Plaintiff’s intention to apply for disclosure in respect of bank accounts belonging to D2 and again on 17 May 2022. No reply has been received from OCBC. BEA remained neutral although it has appeared by legal representative to assist the Court on the terms of the disclosure order. I am satisfied that I can proceed to dispose of the disclosure summons in the absence of D2 and OCBC. That part of the disclosure summons relating to D1’s bank accounts at HSBC was adjourned as D1 was not served before this hearing. Background According to the pleaded case, the Plaintiff was induced by fraudulent misrepresentation to invest in a sham spot gold investment scheme and thus made repeated money transfers for a total of HK$14,405,555 (“the Sum”) between 31 October 2019 and 2 March 2020 (“the Fraud”). The Plaintiff commenced proceedings in HCA 937/2021 against, amongst others, ePaylinks Technology Co Ltd (“ePaylinks”) and Rely International Ltd (“Rely”), the 1st layer recipients of part of the Sum. The Plaintiff has obtained default judgment against Rely on 23 February 2022. The present action involves the 2nd layer recipients. D1 was said to have received a total sum of HK$9,000,000 transferred to its HSBC account by Rely; and D2 was said to have received a total sum of HK$4,401,020 transferred to its accounts at BEA and OCBC by Rely. Those transfers took place shortly after the Sum (in tranches) was received by the 1st layer recipients. The Plaintiff’s case is that Rely engaged D1 to facilitate the disguising and dispersing of the Sum. D1 opened 2 electronic accounts with ePaylinks, a company which sold Global Cash Cards, a type of cash debit card issued by MasterCard. Rely gave instructions to the Plaintiff to make 13 deposits totalling HK$9,000,000 into ePaylinks’ bank account(s). D1 then emailed ePaylinks on or around the same dates, instructing ePaylinks to credit D1’s electronic account for the same amounts. ePaylinks would comply by “topping up” the Global Cash Card(s) issued to D1. Those amounts were then, almost immediately, emptied. The Plaintiff had never made the withdrawals or authorized any of his money to be transferred to Global Cash Cards in any manner. He had expected his funds to be applied to a mobile phone application trading account to make spot gold investments, which never occurred. D1’s pleaded defence is that it was ePaylinks’ agent helping in the sale of Global Cash Cards. Whilst D1 did not dispute the process in which Global Cash Cards were “topped up”, D1 made a bare denial of knowledge over the debits made by the Plaintiff. As for D2, it is the Plaintiff’s case that the Plaintiff’s funds transferred to Rely were onward transferred to D2’s bank accounts. D2 has not filed a defence. The Plaintiff had never had any business dealings with any of D1 or D2 and had never heard of them before the Fraud. Neither of the Defendants had any legitimate reason or entitlement to receive any part of the Sum from the Plaintiff. By receiving and transferring away part of the Sum, D1 and D2 facilitated the fraudulent scheme. As against D2, the Plaintiff seeks return of the HK$4,401,020 on the base of unjust enrichment and/or money had and received by D2, account on the ground of knowing receipt and a declaration of trust, and damages for deceit and conspiracy. The claim against D3 has been discontinued. At this hearing, I continued the Mareva Injunction Order against D2. Having heard Ms Leung for the Plaintiff and Mr Cheng for BEA, I made an order for disclosure of a narrower scope than what was sought by the Plaintiff, namely, that each of BEA and OCBC do disclose: (1) All account numbers of D2 held with each Bank, including a specified account of BEA ending with the digits “7632” and of OCBC ending with “7051”, which received part of the Sum from Rely; (2) The identity and addresses of the persons giving instructions for all transactions in relation to the BEA Accounts and OCBC Accounts; (3) The amount of money remaining in each of those Accounts; and (4) Copies of the bank statements during the period of 31 October 2019 to 30 April 2020 (“the Initial Period”). I also gave leave to the Plaintiff to use and disclose the documents obtained as a result of this order for the purpose of investigating the whereabouts of the money transferred out of the BEA and OCBC Accounts, and the identities of the wrongdoers; and to commence or pursue legal proceedings (whether in Hong Kong or elsewhere) against the wrongdoers, relating to the Fraud. Here are my reasons. Injunction Order The Plaintiff has shown a case, with documents, showing a good arguable case of fraud against D2. Even if fraud could not be relied on, there were serious issues to be tried in that D2, who never had any business with the Plaintiff, had and has no entitlement to the Plaintiff’s money. D2 has assets within the jurisdiction and money is by nature liquid. There is risk of dissipation by the nature of D2’s conduct in receiving, retaining and dispersing the money to which it had no entitlement. The balance of convenience is in favour of the grant of the injunction and so I continued the injunction granted by Linda Chan J. Disclosure Order Section 21 of the Evidence Ordinance, Cap 8, provides that the Court may make an order for inspection of banker’s record for the purpose of the proceedings. The power to order inspection under section 21 should be exercised with great caution as the privacy of the account holder and banker/customer relationship have to be respected. When considering an application under section 21, the main test is relevance: Tiger Resort Asia Ltd v Kazuo Okada [2018] HKCFI 472, DHCJ Keith Yeung SC (as he then was), §28. The accounts which the Plaintiff sought disclosure of were likely to contain material relevant to its tracing exercise. They were in fact highly germane to the issues of fund flow and the identities of the wrongdoers. The 2 specified accounts were accounts into which part of the Sum were transferred by Rely to D2. On the facts of this case, by nature, the Global Cash Cards would involve fund flows and may well be between D2’s own accounts. The first day of the Initial Period was when the money was first defrauded out of the Plaintiff. The end date of the Initial period was 30 April 2020 (about 2 months after the Plaintiff’s last transfer to ePaylinks and then to Rely), to cater for the fact that it might have taken D2, as a 2nd layer recipient, same time to siphon off funds received by him. The Plaintiff asked for an order to require BEA/OCBC, upon his written request, to disclose to his solicitors further documents in relation to the Accounts and, amongst others, to supply copies of monthly bank statements after 30 April 2020 up the date of this order. I declined to grant that order as it was too wide in scope and would give the Plaintiff excessive power without control by the Court. I gave leave to the Plaintiff to use the documents obtained under this order for the purpose of investigation and commencing/pursuing legal proceedings as regards the Fraud (as that would be the legitimate use of section 21) but not other matters. There is no evidence to suggest that D2 or any of BEA or OCBC would suffer damage in view of the limited scope of the order. I therefore made an order in terms of paragraphs 18-19 above, together with incidental orders, and orders on costs (of the summons and of compliance with the order) as set out in the draft order. I thank Ms Leung and Mr Cheung for their assistance. (Queeny Au-Yeung) Judge of the Court of First Instance High Court Ms Lydia Leung, instructed by Siao, Wen and Leung, for the Plaintiff Mr Santos Cheung, of Chungs Lawyers, for The Bank of East Asia, Limited OCBC Wing Hang Bank Limited was not represented and did not appear