PENG XULEI v. CHANGZ TRADE LTD AND OTHERS

PENG XULEI v. CHANGZ TRADE LTD AND OTHERS

Defendants were duly served and defaulted; on the pleaded facts plaintiff transferred sums as a result of fraud which enriched defendants unjustly and no defence was pleaded; equity imposes a constructive trust over the sums in favour of the plaintiff; therefore judgment for repayment and declarations of constructive trust are warranted; interest is allowed at prime plus 1% from date of transfer until judgment and at judgment rate thereafter; the court exercises discretion to grant declaratory and proprietary relief in default judgment to enable tracing and recovery.

Citation
[2024] HKDC 2023
Parties
Plaintiff: Peng Xulei; 1st Defendant: Changz Trade Limited (創正安貿易有限公司); 2nd Defendant: Duohui Trade Co., Limited (多惠商貿有限公司); 3rd Defendant: Jumping Overseas Limited (跳動貿易有限公司); 4th Defendant: Salmoph Limited (莎拉曼菲有限公司); 5th Defendant: World Beating Limited (名品貿易有限公司); 6th Defendant: Zhuo Yang Trading Co., Limited (卓揚貿易有限公司)
Court
District Court
Jurisdiction
Hong Kong
Judgment Date
26 November 2024
Case Number
DCCJ4871/2024
Procedural Posture
Civil Action for Recovery of Sums Paid as a Result of Investment Fraud; Claims in Unjust Enrichment and Proprietary Remedies / Application for Default Judgment Under Order 19 R 7 (summons Dated 4 October 2024); Judgment Entered 26 November 2024
Outcome
Judgment entered for the plaintiff against the 1st to 6th defendants
Legal Topics
Default Judgment, Constructive Trust, Declaratory Relief, Service of Process, Interest on Judgment, Tracing
Source Language
EN
Civil Procedure Equity Trusts Commercial Fraud Unjust Enrichment Default Judgment Constructive Trust Declaratory Relief +3 more

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Parties

Peng Xulei

Plaintiff

Changz Trade Limited (創正安貿易有限公司)

1st Defendant

Duohui Trade Co., Limited (多惠商貿有限公司)

2nd Defendant

Jumping Overseas Limited (跳動貿易有限公司)

3rd Defendant

Salmoph Limited (莎拉曼菲有限公司)

4th Defendant

World Beating Limited (名品貿易有限公司)

5th Defendant

Zhuo Yang Trading Co., Limited (卓揚貿易有限公司)

6th Defendant

Procedural Posture

Civil Action for Recovery of Sums Paid as a Result of Investment Fraud; Claims in Unjust Enrichment and Proprietary Remedies / Application for Default Judgment Under Order 19 R 7 (summons Dated 4 October 2024); Judgment Entered 26 November 2024

Legal Issues

  1. 1 Whether default judgment should be entered against defendants under O 19 r 7 RDC
  2. 2 Whether the pleaded facts establish unjust enrichment and entitlement to repayment
  3. 3 Whether a constructive trust arises in favour of the plaintiff over the sums paid to defendants

Ratio Decidendi

Defendants were duly served and defaulted; on the pleaded facts plaintiff transferred sums as a result of fraud which enriched defendants unjustly and no defence was pleaded; equity imposes a constructive trust over the sums in favour of the plaintiff; therefore judgment for repayment and declarations of constructive trust are warranted; interest is allowed at prime plus 1% from date of transfer until judgment and at judgment rate thereafter; the court exercises discretion to grant declaratory and proprietary relief in default judgment to enable tracing and recovery.

Court Disposition

Judgment entered for the plaintiff against the 1st to 6th defendants

Orders

  • Judgment entered for plaintiff against the 1st to 6th defendants for repayment of the sums transferred as pleaded in the Statement of Claim
  • Declarations that the sums paid to the defendants are held on constructive trust for the plaintiff and are traceable