HUNG WAI CHING v. LEE LAP YAN AND OTHERS

HUNG WAI CHING v. LEE LAP YAN AND OTHERS

The court found on the evidence the plaintiff was the victim of a fraud and that the recipients (1st and 3rd defendants) were fraudulent recipients; constructive trusts arose over the sums transferred, the relevant balances in the bank accounts were traceable to the plaintiff (HK$600,000 in the HSBC account and HK$240,270 in the BOC account), and it was appropriate and expedient to grant declarations of constructive trust and vesting orders under s52 Trustee Ordinance directing the banks to pay those sums to the plaintiff; accordingly the 1st and 3rd defendants were held liable to account and pay the relevant sums with interest and costs as ordered.

Citation
[2023] HKDC 1834
Parties
Plaintiff: Hung Wai Ching; 1st Defendant: Lee Lap Yan; 2nd Defendant: The Hongkong and Shanghai Banking Corporation Limited; 3rd Defendant: Lu Junzhang; 4th Defendant: Bank of China (Hong Kong) Limited
Court
District Court
Jurisdiction
Hong Kong
Judgment Date
28 December 2023
Case Number
DCMP1760/2022
Procedural Posture
Miscellaneous Proceedings (originating Summons) / Judgment (summary Disposal)
Outcome
Originating Summons summarily determined in favour of plaintiff; declarations and vesting orders granted in part; costs awarded to plaintiff as per draft order
Legal Topics
Constructive Trust, Vesting Order Under Trustee Ordinance S52, Tracing in Equity, Unjust Enrichment, Summary Disposal (rdc O.28)
Source Language
EN
Trusts and Trustees Equity and Proprietary Remedies Fraud Banking Law Civil Procedure Constructive Trust Vesting Order Under Trustee Ordinance S52 Tracing in Equity +2 more

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Parties

Hung Wai Ching

Plaintiff

Lee Lap Yan

1st Defendant

The Hongkong and Shanghai Banking Corporation Limited

2nd Defendant

Lu Junzhang

3rd Defendant

Bank of China (Hong Kong) Limited

4th Defendant

Procedural Posture

Miscellaneous Proceedings (originating Summons) / Judgment (summary Disposal)

Legal Issues

  1. 1 Whether a constructive trust arose over funds paid by the plaintiff into third party bank accounts as a result of fraud
  2. 2 Whether the sums remaining in the relevant bank accounts are traceable to the plaintiff and subject to proprietary claims
  3. 3 Whether vesting orders under s52 Trustee Ordinance should be made against the banks to pay the plaintiff

Ratio Decidendi

The court found on the evidence the plaintiff was the victim of a fraud and that the recipients (1st and 3rd defendants) were fraudulent recipients; constructive trusts arose over the sums transferred, the relevant balances in the bank accounts were traceable to the plaintiff (HK$600,000 in the HSBC account and HK$240,270 in the BOC account), and it was appropriate and expedient to grant declarations of constructive trust and vesting orders under s52 Trustee Ordinance directing the banks to pay those sums to the plaintiff; accordingly the 1st and 3rd defendants were held liable to account and pay the relevant sums with interest and costs as ordered.

Court Disposition

Originating Summons summarily determined in favour of plaintiff; declarations and vesting orders granted in part; costs awarded to plaintiff as per draft order

Orders

  • Declaration that the 1st defendant held HK$600,000 transferred into HSBC account on 1 April 2021 on constructive trust for the plaintiff and is liable to account
  • Order that the 2nd defendant (HSBC) pay to the plaintiff the sums in the HSBC Bank Account pursuant to s52(5) Trustee Ordinance and that those sums be vested in the plaintiff under s52(1)(e) Trustee Ordinance