HCA1600/2020 PURPLE SURGICAL UK LTD v. WIN BILLION INVESTMENT GROUP LTD AND OTHERS - LawHero
HCA1600/2020
高等法院（民事訴訟）Deputy High Court Judge Kent Yee20/6/2024[2024] HKCFI 1643
HCA1600/2020
A
A
HCA 1600/2020
B
[2024] HKCFI 1643 B
C IN THE HIGH COURT OF THE C
HONG KONG SPECIAL ADMINISTRATIVE REGION
D
D
COURT OF FIRST INSTANCE
E ACTION NO 1600 OF 2020 E
F
BETWEEN F
G PURPLE SURGICAL UK LIMITED Plaintiff
G
and
H
H
WIN BILLION INVESTMENT GROUP 1st Defendant
I LIMITED
I
(永億投資集團有限公司)
J
J
WU YUN FAI (鄔潤輝) 2nd Defendant
K
STRONGJET (ASIA) SUPPLY CHAIN 3rd Defendant K
COMPANY LIMITED
L
(創捷(亞洲)供應鏈有限公司) L
M SMART UP INCUBATOR LIMITED 4th Defendant M
N
N
_______________________
O
O
P Before: Deputy High Court Judge Kent Yee in Court P
Q Dates of Hearing: 11-15 and 22 March 2024
Q
Date of Judgment: 21 June 2024
R
________________________ R
S
JUDGMENT S
________________________
T
T
U
U
V
V
A - 2 - A
B Introduction B
C 1. In this action, Purple Surgical UK Limited (“Purple Surgical”) C
claims to recover part of USD 27 million (“the Earnest Money”) paid for
D D
its purchase of 5 million pieces of “3M 9332+” surgical masks (“the
E Masks”) from Win Billion Investment Group Limited (“Win Billion”) E
pursuant to a sale and purchase agreement (“the SPA”) during the
F F
Covid-19 pandemic in late May 2020. Eventually, each of the defendants
G G
received certain portions of the Earnest Money.
H H
2. Not a single mask was supplied to Purple Surgical at the end.
I None of the defendants attended the trial to claim innocence except Mr Wu. I
J J
3. The claim of Purple Surgical against the defendants is
K
essentially restitutionary in nature though a contractual claim is included as K
an alternative. The primary case of Purple Surgical against Mr Wu is deceit
L L
and fraudulent representation.
M M
4. In a nutshell, Mr Wu insists that Win Billion has made a
N genuine effort to source the Masks to complete the transaction and it was N
Purple Surgical which terminated the SPA prematurely. Win Billion was at
O O
liberty to use the Earnest Money for its own purposes and Mr Wu
P characterises the present dispute as a contractual matter only. Mr Wu P
believes he cannot be personally liable no matter even if Win Billion
Q Q
breached the SPA.
R R
5. At the very outset, Win Billion, Mr Wu and Smart Up
S S
Incubator Limited (“Smart Up”) were represented by Messrs. Henry Yu &
T Associates and a joint defence dated 17 December 2020 was filed on their T
behalf. Messrs. Henry Yu & Associates ceased to act for these defendants
U U
V V
A - 3 - A
B by an order dated 21 April 2023 and Win Billion and Smart Up have had B
no legal representation since then. They have not applied for leave to be
C C
represented by their directors either. They were absent at the trial despite
D the attendance of Mr Wu, their common director. D
E 6. As regards Strongjet (Asia) Supply Chain Company Limited E
(“Strongjet”), it was separately represented and it paid into court a sum of
F F
USD6,525,000 being the amount Purple Surgical claims against it by
G G
consent on or about 29 October 2020. Eventually, on 14 October 2022,
H
Purple Surgical obtained default judgment against Strongjet. H
I 7. The upshot is that Purple Surgical and Mr Wu turn out to be I
the only participating adversaries at the trial hearing. Despite the absence
J J
of Win Billion and Smart Up, this court should determine whether the
K claim of Purple Surgical against each of these absentees is borne out by K
evidence.
L L
M 8. At the trial, Purple Surgical was represented by Ms Lam SC M
and Mr Luxton whereas Mr Wu was represented by Mr Zhu. Mr Sharpe,
N N
Chief Executive Officer of Purple Surgical, was the sole witness of Purple
O Surgical and Mr Wu alone testified for himself. O
P 9. The bulk of the factual evidence of Purple Surgical in support P
of its claim is not in dispute. The limelight is on the defence case of Mr Wu,
Q Q
who was skilfully and thoroughly cross-examined by Ms Lam for 4 days.
R R
Background facts
S S
T
10. By way of introduction, I shall first give some details about T
the parties and key characters.
U U
V V
A - 4 - A
B 11. Purple Surgical is a company incorporated in England and B
Wales and is the leading manufacturer of laparoscopic instruments and
C C
devices. One of its major customers is National Health Service (“NHS”)
D within the Department of Health and Social Care (“DHSC”) of the United D
Kingdom. The Masks were sourced by Purple Surgical to be delivered to
E E
NHS pursuant to a written contract between Purple Surgical and DHSC
F (“the Masks Contract”). F
G G
12. Win Billion is a company incorporated in the British Virgin
H
Islands. Mr Wu is the sole shareholder and director of Win Billion. Win H
Billion has no employee other than Mr Wu.
I I
13. Mr Wu is a Hong Kong permanent resident. He was born and
J J
bred in Hong Kong and in 2004 he graduated from Hong Kong University
K with a degree in Computer Science. K
L L
14. Strongjet is a locally incorporated company and is a wholly-
M owned subsidiary of a company incorporated in Mainland China known as M
Shenzhen Strongjet Supply Chain Co., Ltd.
N N
15. Smart Up is another locally incorporated company and Mr Wu
O O
is its sole shareholder and director. Smart Up, as alleged by Mr Wu,
P specializes in supporting and funding entrepreneurs, in particular, start-up P
business. Win Billion and Smart Up apparently entered into a written
Q Q
agreement entitled “Intermediary Service Agreement” dated 19 May 2020
R whereby Smart Up agreed to provide intermediary services to Win Billion R
S
for its surgical masks business in return of a remuneration of USD300,000. S
T T
U U
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A - 5 - A
B Transactions between Purple Surgical and Win Billion B
C 16. The whole story was started by the Masks Contract created on C
or about 28 April 2020. By the agreement, DHSC agreed Purple Surgical to
D D
purchase 5 million units of “3M Aura 9332+” masks to be delivered prior
E to 30 June 2020. It needs no reminder that there had been a frantic search E
for surgical masks since the outbreak of the COVID-19 pandemic.
F F
G 17. 3M is a multinational company based in the United States and G
is a well-known medical equipment supplier. Its surgical masks were in
H H
huge demand and 3M only trades with its official distributors, agents and
I some private resellers and brokers. I
J J
18. Purple Surgical first turned to Mr Kohler of Currency UK
K
which is a foreign exchange trading company and has a long-standing K
business relationship with Purple Surgical. Mr Kohler in turn introduced
L L
Mr Cline who is associated with Abraham & Sons Engineering PVT Ltd
M (“ASE”) in Israel to Purple Surgical. Subsequently, through the M
introduction of ASE via some intermediaries, Purple Surgical came to
N N
know Mr Wu and Win Billion. On or around 19 May 2020, Mr Sharpe
O received a draft of the SPA through ASE. O
P 19. Mr Sharpe agreed to the terms and Purple Surgical and Win P
Billion entered into the SPA. Mr Wu executed the SPA on behalf of Win
Q Q
Billion. The material terms of the SPA (pleaded by Purple Surgical and
R admitted by the defence in the pleadings) are as follows: R
S S
(1) Purple Surgical agreed to purchase and Win Billion agreed to
T sell 5,000,000 units of the Masks at the unit price of USD5.4 T
U U
V V
A - 6 - A
B per piece and the total purchase price was USD27,000,000 B
(“the Purchase Price”);
C C
(2) The origin of the Masks was the United States of America;
D D
E (3) Win Billion was required to deliver the Masks on a CIF basis, E
to Birmingham International Airport, United Kingdom;
F F
(4) Purple Surgical was required to transfer the Purchase Price to
G G
an agreed escrow account within 48 hours after both parties
H H
execute the SPA;
I I
(5) The parties were required to sign an escrow agreement after
J the signing of the SPA; J
K K
(6) Upon receipt of the Purchase Price into the designated
L escrow account, the escrow agent was required to release 35% L
of the total goods value USD9,450,000 (“the 1 Payment”) to
st
M M
a bank account designated by Win Billion;
N N
(7) The bank account designated by Win Billion was account
O numbered 081-915-654-8 (“UOB Account”) with United O
Overseas Bank Limited (“UOB”);
P P
Q (8) After receipt of the 1st Payment into the UOB Account, Win Q
Billion shall start preparing the production procedure by
R R
placing orders with 3M factory. Win Billion should get ready
S for SGS inspection for the Masks and shall then process S
ordering to 3M distributor, and to disclose the 3M distributor’s
T T
name and qualification documents for this batch of products to
U U
V V
A - 7 - A
B Purple Surgical within 5 working days after receiving the 1st B
Payment;
C C
(9) Purple Surgical was entitled to request to arrange SGS at his
D D
own source and expenses with prior notice to Win Billion.
E Further, Win Billion may provide video according to Purple E
Surgical’s request and code;
F F
G (10) Once the SGS report is passed satisfactory and video verified, G
escrow shall release the further payment to the UOB Account,
H H
being 65% of the Purchase Price, i.e. USD17,550,000 (“the 2nd
I Payment”) within 24 hours; I
J J
(11) Once the 2nd Payment is received into the designated account
K
of Win Billion, Win Billion would prepare the shipping K
arrangements and pack the Masks for air freight to the
L L
destination port;
M M
(12) The “lead time” for supply of the Masks was 7-10 working
N days after Win Billion receives the 1st Payment; and N
O O
(13) Win Billion guarantees that the Masks to be supplied were
P authentic and in conformity with the quality, specifications P
and quantity specified in the SPA.
Q Q
20. Win Billion was the account holder of the UOB Account and
R R
Mr Wu was the sole approved signatory of the UOB Account pursuant to a
S S
resolution of Win Billion dated 24 July 2018.
T T
U U
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A - 8 - A
B B
Escrow Agreement and Jody Wong
C C
21. Jody Wong (“Jody”) was a lawyer practising at the San
D D
Francisco Bar in the United States. Jody provided escrow agent services for
E Win Billion. E
F 22. On or about 21 May 2020, Purple Surgical and Win Billion F
entered into an escrow agreement dated 21 May 2020 (“the Escrow
G G
Agreement”) pursuant to the SPA. It was signed by Mr Sharpe on behalf
H H
of Purple Surgical, Mr Wu on behalf of Win Billion and Jody.
I I
23. In the recital of the Escrow Agreement, it was expressly stated
J that Purple Surgical and Win Billion had appointed Jody to hold the J
Earnest Money in accordance with the terms of the Escrow Agreement.
K K
The Escrow Agreement contained the following essential terms:
L L
(1) Jody was to act as stakeholder only;
M M
(2) Jody was not to release or disburse the Earnest Money, except
N N
that:
O O
(i) Jody was required to send the 1st Payment and the 2nd
P P
Payment in accordance with the terms of the SPA; and
Q Q
(ii) Jody was required to pay out professional fees upon
R disbursement of funds. R
S S
(3) The instructions for payment must be consistent and written
T instructions from both Purple Surgical and Win Billion (“Joint T
Instruction Requirement”);
U U
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A - 9 - A
B (4) Purple Surgical was required to transfer the Earnest B
Money/Purchase Price to an agreed escrow account within 48
C C
hours after both parties execute the SPA;
D D
(5) In the event that there was a dispute between Purple Surgical
E and Win Billion and Purple Surgical terminated the SPA, Jody E
had the right to tender the Earnest Money to a court of
F F
competent jurisdiction in an interpleader action; and
G G
(6) The Earnest Money was to be paid into the Trust Account of
H H
Jody, being account number 090-000639 at the Bank of the
I West in San Francisco, the United State of America (“Escrow I
Account”).
J J
K
24. To all intents and purposes, it was a genuine commercial K
transaction involving an enormous sum of money. Purple Surgical, Win
L L
Billion and Jody were bound by serious legal agreements whereby their
M respective positions are safeguarded. M
N 25. On 22 May 2020, Purple Surgical transferred the Earnest N
Money from its Barclays Bank account into the Escrow Account. Purple
O O
Surgical has completed its payment obligation under the SPA in
P accordance with the Escrow Agreement. To its frustration, Purple Surgical P
soon found out that it was the only party which honoured the two
Q Q
agreements.
R R
26. By a letter dated 31 July 2020, Stephenson Harwood (“SH”),
S S
current solicitors for Purple Surgical, gave its notice of termination of the
T SPA on account of its non-delivery of the Masks constituting repudiation of T
the SPA. SH further demanded that the 1st Payment be refunded to Purple
U U
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A - 10 - A
B Surgical and a written confirmation be given by Win Billion to Jody about B
the termination of the SPA and the return of the balance of the Earnest
C C
Money in the Escrow Account to Purple Surgical.
D D
27. Win Billion did not give any response to these demands at all.
E E
28. SH had no idea as to what had happened to the Earnest Money
F F
and neither Jody nor Mr Wu was forthcoming. Immediately before and
G after the commencement of these proceedings on 18 September 2020, G
Purple Surgical obtained an ex parte order of DHCJ Man SC dated 18
H H
September 2020 containing a Mareva injunction against all the defendants
I to this action, together with ancillary disclosure orders by the order of Mr I
Justice Wilson Chan dated 25 September 2020. Purple Surgical, Mr Wu
J J
and Smart Up opposed the continuation of the Mareva injunction at an inter
K partes hearing before Mr Recorder Houghton SC. K
L L
29. By his Judgment dated 24 February 2021, Mr Recorder
M Houghton SC ordered that the injunction orders be continued. The learned M
Recorder opined that Purple Surgical was entitled to Mareva relief and a
N N
proprietary injunction against Mr Wu and Smart Up in respect of the
O proceeds of the 1st Payment on the basis that these represent proceeds of O
monies paid pursuant to a fraud instigated prior to those monies being paid
P P
by Purple Surgical.
Q Q
30. In addition, as elaborated below, Purple Surgical commenced
R a legal action in the United States of America against Jody, Win Billion R
S
and Mr Wu (“the US Action”) in August 2020. As a result of the S
disclosure orders ancillary to the Mareva injunction, and the three Norwich
T T
Pharmacal orders subsequently obtained by Purple Surgical together with
U U
V V
A - 11 - A
B the further discovery in the US Action 1, Purple Surgical has been able to B
trace the transfers of the Earnest Money out of the Escrow Account and
C C
from Win Billion’s bank accounts. All these transfers are well documented
D and no issues about any of them was raised at the trial. D
E 31. Ms Lam has provided me with a fund flow diagram showing E
all the transfers. Mr Zhu has confirmed the accuracy of the fund flow
F F
diagram. A copy of the fund flow diagram is annexed to this Judgment and
G G
its content is self-explanatory.
H H
32. Basically, there were four layers of payments and I shall focus
I on the first three layers for the present purposes. I
J J
33. After receipt of the Earnest Money, Jody released the 1st
K
Payment to Win Billion on 2 June 2020 pursuant to the SPA. This turns out K
to be the only legitimate and duly authorised transfer in accordance with
L L
the SPA and the Escrow Agreement.
M M
34. In spite of the lack of authorisation of Purple Surgical, on the
N instruction of Win Billion, unbeknownst to Purple Surgical, Jody made the N
following transfers of funds out of the Escrow Account.
O O
P 35. On 29 May 2020, Jody transferred USD 2 million to P
Homesum, USD4,990,000 to Strongjet and USD500,000 to Skyin
Q Q
Development LLC.
R R
S S
1
A Norwich Pharmacal Order made by Anthony Chan J against UOB in HCMP 1237/2020 on 21 August
2020 concerning the whereabouts of the 1st Payment received in the UOB Account of Win Billion; a
T Norwich Pharmacal Order made by DHCJ Winnie Tsui in HCMP 689/2021 dated 4 June 2021 concerning T
the payment of USD2 million to Homesun Technology Co Ltd (“Homesun”) by Jody and lastly a
Norwich Pharmacal Order made by DHCJ Leung in HCMP 32/2022 dated 9 February 2022 concerning
U the payments made by Homesun. U
V V
A - 12 - A
B 36. On 2 June 2020, Jody transferred to Sepideh Madahian a sum B
of USD360,000. On 4 June 2020, he transferred to Paulo Alexandre
C C
Salvador Leitao a sum of USD500,000.
D D
37. Lastly, on 9 June 2020, Jody transferred to Win Billion a sum
E of USD 3 million. E
F F
38. All these transfers were procured by Win Billion purportedly
G through one Mr Tony Xie (“Tony”), whom Mr Wu alleges to be his G
business partner. On diver dates, Tony emailed to Jody to make requests
H H
for transfers to designated recipients with their account details. Jody,
I without any instruction or confirmation of Purple Surgical and in breach of I
the Joint Instruction Requirement, made such transfers pursuant to the
J J
requests of Tony.
K K
39. Upon receipt of the total sum of USD12,450,000 out of the
L L
Earnest Money, Win Billion made the payments out of its UOB Account.
M These payments are set out in the table below (taken from Ms Lam’s M
Opening Submissions):
N N
No Date Description Withdrawals Deposits
O (USD) (USD) O
1 2 June 2020 Receipt of the 1st $9,449,988.54
P Payment from the P
Escrow Account
Q 2 3 June 2020 Transfer to Mr $413,650.47 Q
Wu
R
3 4 June 2020 Transfer to Smart $100,000.00 R
Up
4 4 June 2020 Transfer to $6,525,023.27
S S
Strongjet
5 5 June 2020 Transfer to 3M $247,545.25
T Georgia LLC T
U U
V V
A - 13 - A
B 6 10 June 2020 Receipt of $2,999,988.54 B
Earnest Money
from the Escrow
C C
Account
7 11 June 2020 Receipt of funds $9,496.54
D D
8 11 June 2020 Transfer to Phase $1,000,000.00
Scientific
E International Ltd E
("Phase
F Scientific") F
9 11 June 2020 Transfer to Mr $1,000,000.00
G Wu G
10 12 June 2020 Transfer to Mr $775,694.89
H
Wu H
11 15 June 2020 Transfer to Phase $1,000,000.00
Scientific
I I
12 16 June 2020 Return of funds $247,471.04
from 3M Georgia
J LLC J
13 23 June 2020 Transfer to Mr $452,488.69
K Wu K
14 26 June 2020 Transfer to Mr $129,265.77
L Wu L
15 30 June 2020 Transfer to $66,000.00
M Advanced M
Fabrics Factory
Company
N N
16 2 July 2020 Transfer to Mr $517,129.93
Wu
O O
17 3 July 2020 Transfer to Mr $478,361.99
Wu
P P
Q Q
40. All these transfer activities are evidenced by the bank
R R
statements of the UOB Account and are not disputed.
S S
41. Mr Wu personally received a total sum of USD3,766,591.74 in
T T
his two bank accounts. One is with the Bank of China and the other one is
U with OCBC. U
V V
A - 14 - A
B Purple Surgical’s partial recovery of the Earnest Money B
C 42. Mr Sharpe in his supplemental witness statement gave an C
account of Purple Surgical’s partial recovery of the Earnest Money since
D D
the termination of the SPA. His evidence is uncontroversial and not
E challenged. E
F F
43. First, upon a joint application of Purple Surgical and Strongjet,
G Master Hui made an order dated 17 November 2021 that the sum of G
USD4,989,981.60 together with any interest accruing thereon being held in
H H
court be paid out to Purple Surgical. Pursuant to this order, on 9 December
I 2021, Purple Surgical received a cheque of a total sum of I
USD4,991,967.39 inclusive of interest from the court.
J J
K
44. By the default judgment entered by Mr Recorder William K
Wong SC dated 14 October 2022, Purple Surgical is entitled to recover
L L
from Strongjet the principal sum of USD6,525,000 together with interest
M thereon at different rates for different periods until payment. Eventually, a M
payment of the sum of USD6,595,992.89 (inclusive of interest) out of court
N N
was made to Purple Surgical in satisfaction of the default judgment.
O O
45. Further recovery from Strongjet was made by way of several
P garnishee applications. A total sum of USD344,829.61 was recovered. P
Q Q
46. On the other hand, Phase Scientific commenced an
R interpleader action under HCMP 200/2022 in respect of the total amount of R
USD 2 million received from Mr Wong out of the Escrow Account. Both
S S
SH on behalf of Purple Surgical and Win Billion Investment Holdings
T Limited which was incorporated in the Cayman Islands (“Win Billion T
Cayman Islands”) asked Phase Scientific for the return of the said sum.
U U
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A - 15 - A
B 47. On 29 June 2022, Phase Scientific paid USD1,999,996.12 (i.e. B
the USD 2 million minus bank charges) into court pursuant to the order of
C C
Master Matthew Leung dated 14 June 2022 pending the determination of
D the issue as to the entitlement of the said sum as between Purple Surgical D
and Win Billion Cayman Islands.
E E
48. Subsequently, Win Billion Cayman Islands defaulted in filing
F F
its defence to the claim of Purple Surgical in the interpleader proceedings.
G G
Purple Surgical obtained judgment as a result and Master J Wong ordered
H
that a sum of USD1,999,996.12 inclusive of interest of USD31,329 be paid H
out of court to Purple Surgical less USD42,696 being the assessed costs of
I I
Phase Scientific.
J J
49. On the other hand, one Ms Leung Yuk Yee on diver dates
K received a total amount of HK$2,700,522 from Mr Wu and one Ms Wu K
Wong Lai Fong on diver dates received a sum of HK$1,195,000 from Mr
L L
Wu. On 22 September 2023, Purple Surgical commenced a High Court
M action under HCA 1530/2023 against both Ms Leung and Ms Wu to M
recover the money they had received from Mr Wu.
N N
O 50. On 12 December 2023, Purple Surgical and Ms Leung reached O
a settlement agreement. Ms Leung paid Purple Surgical HK$620,000 as
P P
full and final settlement of her liabilities to Purple Surgical arising from her
Q receipt of a portion of the Earnest Money. Q
R 51. Now I should examine the dealings between Purple Surgical R
S
and Jody. Before the termination of the SPA, Purple Surgical became S
suspicious about Jody. On 17 July 2020, SH made a written request to Jody
T T
for documentary proof of the balance in the Escrow Account.
U U
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A - 16 - A
B 52. On 20 July 2020, Jody emailed to SH and said that the balance B
st
of the Earnest Money (after the 1 Payment) remained to be in the Escrow
C C
Account but he was in Florida and had no access to the Escrow Account.
D Jody, thus, was able to provide any documentary proof. D
E 53. As narrated above, the reply of Jody cannot be truthful. E
F F
54. SH further sent letters to Jody on 4 and 11 August 2020 to
G press for documentary proof of the balance in the Escrow Account but Jody G
did not reply to these letters.
H H
I
55. Feeling increasingly suspicious, Purple Surgical instructed I
Sheppard Mullin, its legal representatives in the United States, to deal with
J J
Jody. On 17 August 2020, Sheppard Mullin contacted Jody by phone and
K
again Jody maintained that he was still out of town and could not have K
access to the bank information of the Escrow Account in California. Jody
L L
assured Sheppard Mullin that the 2nd Payment remained in the Escrow
M Account. However, Sheppard Mullin’s subsequent request for a written M
confirmation was simply ignored by Jody.
N N
56. Purple Surgical through Sheppard Mullin started the US
O O
Action against Win Billion and Mr Wu in the Superior Court of the State of
P California for the County of San Francisco on 25 August 2020. Jody was P
later joined as a defendant.
Q Q
R 57. By the US Action, Purple Surgical managed to freeze the R
Escrow Account and obtain some information of the Escrow Account. The
S S
Bank of the West disclosed to Purple Surgical that the balance in the
T Escrow Account was only USD1,110,996.96. This showed that Jody had T
previously given false information to Purple Surgical, to say the least.
U U
V V
A - 17 - A
B 58. In November 2020, the California Court granted Purple B
Surgical’s application for disclosure of all the records relating to the
C C
Escrow Account by the Bank of the West despite the opposition of Win
D Billion. D
E 59. On 16 February 2022, Purple Surgical reached a settlement E
agreement with Jody and his insurers. The settlement agreement was
F F
approved by the California Court on 15 April 2022. Upon payment of
G G
USD3,925,000 by Jody to Purple Surgical in accordance with the terms of
H
their settlement agreement on 20 May 2022, the US Action as against Jody H
was dismissed.
I I
60. Ms Lam has helpfully provided this court with the following
J J
table giving a summary of all the recoveries and the remaining loss of the
K Earnest Money: K
DESCRIPTION PRINCIPAL INTEREST
L L
Purple Surgical's Earnest Money USD27,000,000
M M
Less recoveries of the Earnest
N Money: N
The sum recovered from Strongjet on 9 (USD4,989,981) (USD1,985)
O O
December 2021 pursuant to the Order
P of Master Hui dated 17 November 2021 P
The sum recovered from Strongjet on (USD6,525,000) (USD70,992)
Q Q
11 November 2022 pursuant to default
R judgment/Order of Recorder William R
Wong SC dated 14 October 2022,
S S
together with interest payments:
T Garnishee application (HSBC) (USD340,019) T
Garnishee application (HSBC - 2nd) (USD108)
U U
V V
A - 18 - A
B Garnishee application (Industrial Bank) (USD2,862) B
Garnishee application (Bank of China) (USD1,838)
C C
The sum recovered from Phase (USD1,957,300) (USD31,329)
D Scientific in HCMP 200/2022 on 9 D
February 2023
E E
The sum recovered from Ms Kimberly (USD79,487)
F Leung on 12 December 2023 in Sum of F
settlement of Purple Surgical’s claims HK$620,000 at
G G
against Ms Kimberley Leung in HCA exchange rate of
H 1530/2023 USD1 = HK$7.80 H
The sum recovered from Jody's insurer (USD3,925,000)
I I
on 20 May 2022 in settlement of Purple
J Surgical’s claim against Jody in the US J
Action
K K
Total recoveries (USD17,476,768) (USD449,127)
L L
Purple Surgical’s outstanding claims USD9,523,232
M for Earnest Money M
N N
O O
61. Based on the foregoing facts, Purple Surgical makes its claims
P against Win Billion and Mr Wu based on the following causes of action: (1) P
breach of trust, (2) breach of fiduciary duty, (3) deceit and fraudulent
Q Q
misrepresentation; (4) dishonest assistance; (5) knowing receipt; (6) unjust
R enrichment; and (7) conspiracy. R
S S
62. As against Win Billion, Purple Surgical has an additional
T cause of action, namely, breach of contract. T
U U
V V
A - 19 - A
B 63. As against Smart Up, Purple Surgical’s claim is based on (1) B
conspiracy, (2) dishonest assistance, (3) knowing receipt; and (4) unjust
C C
enrichment.
D D
64. I should first focus on Purple Surgical’s claim of deceit and
E fraudulent misrepresentation against Win Billion and Mr Wu and the E
conspiracy claim against Smart Up and them. Ms Lam confirms that the
F F
primary contention of Purple Surgical is that there was a conspiracy among
G G
Win Billion, Mr Wu and Smart Up toinjure Purple Surgical by fraud.
H H
Purple Surgical’s pleaded case of deceit and fraudulent misrepresentation
I and its claim based on conspiracy to injure I
J J
65. In gist, Purple Surgical’s pleaded case of deceit and fraudulent
K
misrepresentation against Win Billion and Mr Wu can be summarised as K
follows.
L L
66. Win Billion and Mr Wu induced Purple Surgical to pay the
M M
Earnest Money/Purchase Price to the Earnest Account by preparation of the
N SPA and the Escrow Agreement and the representation (“the N
Representation”) that Win Billion had a genuine intention to perform its
O O
obligations under the SPA and the Escrow Agreement (in particular the
P Joint Instruction Requirement), the prime duty being the supply of the P
Masks originating from 3M to Purple Surgical.
Q Q
R 67. Purple Surgical claims to have been induced by the R
Representation and acted on the Representation to enter into the SPA and
S S
the Escrow Agreement and thereafter paid the Earnest Money into the
T Escrow Account. T
U U
V V
A - 20 - A
B 68. Purple Surgical pleads that Win Billion and Mr Wu made the B
Representation fraudulently in that they knew that the Representation was
C C
false or were reckless, not caring whether it was true or false. It relies on
D the following particulars: D
E (1) At no stage did Win Billion and/or Mr Wu provide any E
independently verifiable evidence to Purple Surgical that Win
F F
Billion had procured any of the Masks;
G G
(2) Win Billion and/or Mr Wu misrepresented to Purple Surgical
H H
that Win Billion had paid 3M for the Masks when they knew
I this was false; I
J J
(3) Win Billion and/or Mr Wu repeatedly delayed inspection of
K
the Masks by Purple Surgical and delayed delivery of the K
Masks with ever-changing explanations;
L L
(4) Win Billion and/or Mr Wu introduced Jody to Purple Surgical
M M
to act as the Escrow Agent. They then procured Jody to pay
N out of the Escrow Account the Earnest Money other than the N
1st Payment in breach of the Joint Instruction Requirement
O O
without the knowledge or approval of Purple Surgical; and
P P
(5) Despite the non-delivery of any of the Masks, Win Billion has
Q Q
never repaid any of the 1st Payment or the other traceable
R proceeds of the Earnest Money to Purple Surgical or procured R
Jody to repay any of the Earnest Money to Purple Surgical. Mr
S S
Wu and Smart Up have also failed to repay any of the sums
T they received that are traceable proceeds of the Earnest Money, T
but have used such sums for their own benefit.
U U
V V
A - 21 - A
B 69. For the conspiracy claim made against Win Billion, Mr Wu B
and Smart Up, Purple Surgical pleads that they wrongfully and with intent
C C
to injure Purple Surgical by unlawful means conspired and combined
D together to defraud Purple Surgical. Purple Surgical relies on the same D
particulars and the following additional matters:
E E
(1) Mr Wu being the sole director of Win Billion knew that Win
F F
Billion never had a genuine intention to perform its
G G
obligations under the SPA and Escrow Agreement;
H H
(2) Tony and/or Mr Wu on behalf of Win Billion gave instructions
I to Jody to make payments out of the Escrow Account to Win I
Billion and Strongjet in breach of the Joint Instruction
J J
Requirement without the knowledge or approval of Purple
K Surgical; K
L L
(3) Mr Wu gave instructions on behalf of Win Billion for payment
M out from the UOB Account to, among other persons, Mr Wu, M
Strongjet and Smart Up; and
N N
(4) Win Billion, Mr Wu and Smart Up were aware that Purple
O O
Surgical had paid the Earnest Money as a result of the
P fraudulent misrepresentations of Win Billion and/or Mr Wu. P
Q Q
Purported Defence to Purple Surgical’s claim in deceit and fraudulent
R misrepresentation and conspiracy claim R
S S
70. In their Amended Defence dated 5 October 2021, Win Billion,
T
Mr Wu and Smart Up deny Purple Surgical’s claim in deceit and fraudulent T
misrepresentation and its conspiracy claim. They aver that Win Billion and
U U
V V
A - 22 - A
B Mr Wu had a genuine intention to fulfil the obligations of Win Billion B
under the SPA.
C C
71. They even complain that Purple Surgical wrongfully
D D
terminated the SPA. It is asserted that under the SPA, time was not of the
E essence for the delivery of the Masks and Win Billion’s obligation was E
only to deliver the Masks within a reasonable time. They contend that the
F F
SPA was terminated prematurely.
G G
72. They plead the following account of what Win Billion had
H H
purportedly done to fulfil the SPA.
I I
73. First, by way of background, Mr Wu alleged one Wang Yin
J J
Ying (“Yin Ying”) who was a lawyer in the Mainland informed Jessica Qu
K
and him that a party (Purple Surgical) was interested in purchasing the K
Masks on or around 17 May 2020. Jessica Qu was a colleague of Mr Wu
L L
and an executive director of Starlight International Capital Group Limited
M solely owned by Mr Wu. M
N 74. On the same day, a WeChat message group (“the WeChat N
Group”) was formed among Mr Wu, Yin Yang, Jessica Qu and other
O O
intermediaries to facilitate discussion concerning the intended sale of the
P Masks to Purple Surgical. P
Q Q
75. On the other hand, before the entry of the SPA, in May 2020,
R Tony was referred to YG Tech Ltd (“YG Tech”), a South Korean company, R
purported to be a distributor of 3M products including the Masks by his
S S
business associate known as Mr Xu.
T T
U U
V V
A - 23 - A
B 76. At or around the same time, Win Billion contacted Utility B
Sugar Trading Ltd (“Utility Sugar”) which is a local company. There was
C C
a draft agreement between Utility Sugar and Win Billion dated 19 May
D 2020 whereby Utility Sugar represented that it could source the Masks D
from YG Tech.
E E
77. Win Billion was therefore convinced that YG Tech could
F F
supply the Masks to Win Billion for the purpose of the SPA. On 25 May
G G
2020, Win Billion entered into a sale and purchase agreement with YG
H
Tech (“YG Tech SPA”) whereby YG Tech agreed to sell to Win Billion H
the Masks at the price of USD 14.5 million with part of contract payment
I I
of USD247,500 (“the Contract Payment”).
J J
78. In the YG Tech SPA, it was expressly provided that all
K financial, commercial and other information connected with the agreement K
shall be considered confidential. It was further provided that the parties
L L
shall take all necessary and reasonable measures to prevent divulgence of
M the received information to any other parties and only under mutual M
agreement the parties shall be entitled to disclose the information to other
N N
parties where necessary.
O O
79. On 2 June 2020, YG Tech issued a proforma invoice bearing
P P
the “3M” logo and purportedly from 3M Co. Ltd in the United Kingdom to
Q Win Billion for the Contract Payment (“the YG Tech Invoice”). Q
R 80. On 5 June 2020, Win Billion remitted the Contract Payment R
S
from the UOB Account to 3M Georgia LLC in its bank account with the S
Bank of Georgia (“the 3M Remittance”).
T T
U U
V V
A - 24 - A
B 81. On or around 12 June 2020, YG Tech showed to Win Billion B
an email purportedly sent from 3M to Mr Yoo of YG Tech whereby 3M
C C
informed YG Tech that shipment in the UK would be delayed until further
D notice “due to a last minute cancellation of one key component for the D
product from the raw material supplier.”
E E
82. On 15 June 2020, YG Tech informed Win Billion that it would
F F
stop signing the contract and a new company, Dumb & Dumber Co. Ltd
G (“D & D”) would sign a new agreement with Win Billion for the supply of G
H
the Masks in its stead, which would be guaranteed by YG Tech. H
I 83. On 16 June 2020, the 3M Remittance was returned to Win I
Billion. It was stated in the written advice from UOB dated 11 June 2020
J J
that the payment was returned due to “internal policy”.
K K
84. As a result, on the same day, Win Billion entered into a new
L L
sale and purchase agreement with D & D for the supply of the Masks at the
M price of USD 14.5 million (“the D & D SPA”). M
N 85. The terms of the D & D SPA are by and large identical to N
those of the YG Tech SPA.
O O
P 86. After the signing of the D & D SPA, Tony on behalf of Win P
Billion dealt with Erika Cheng (“Erika”) who was a representative of YG
Q Q
Tech to complete the transaction.
R R
87. On 17 June 2020, Erika provided an invoice for USD725,000
S S
to Purple Surgical. Erika represented to Tony that D & D had provided an
T
initial deposit of USD247,500 to 3M and further presented an invoice T
U U
V V
A - 25 - A
B purportedly issued by 3M to D & D dated 16 June 2020 (“D & D 3M B
Inovice”).
C C
88. Moreover, Purple Surgical claims to have received the
D D
following emails (“the Emails”) purportedly sent by 3M to Mr Yoo
E providing updates of the delivery progress of the Masks: E
F F
(1) By an email dated 18 June 2020, Mr Yoo was informed that
G shipment will be ready on 25 June 2020 and delivery to the G
airport in Birmingham would take place before 30 June 2020.
H H
I
(2) By an email dated 30 June 2020, Mr Yoo was informed that I
there were more delays to the shipment due to the fact that
J J
valves of the Masks provided by an alternative supplier did not
K
pass quality control. The earliest possible delivery time would K
be around mid-July 2020.
L L
(3) By an email dated 15 July 2020, Mr Yoo was informed that
M M
SGS inspection would be arranged and shipment would take
N place early the week after. N
O O
(4) By an email dated 27 July 2020, Mr Yoo was informed that
P in-house testing was still ongoing due to some testing P
equipment not being available, and further updates on the
Q Q
progress would be provided “these few days.”
R R
89. It is pleaded that Win Billion and Mr Wu had taken reasonable
S S
steps and acted in good faith to provide all available updates to Purple
T
Surgical on the status of the Masks and the SPA based on the information T
provided by YG Tech and D & D. All the Emails and the 3M Remittance
U U
V V
A - 26 - A
B were provided to Purple Surgical albeit they were heavily redacted due to B
Win Billion’s confidentiality obligations under the YG Tech and D & D
C C
SPAs.
D D
90. It should be noted that all these documents are controversial.
E E
91. The defence goes on to say that despite the wrongful
F F
termination of the SPA by Purple Surgical, Win Billion continued to make
G efforts to source the Masks for Purple Surgical. First, on 7 August 2020, G
Purple Surgical advanced USD725,000 to D & D as deposit for the Masks
H H
after YG Tech/ D & D had represented to Tony that the Masks had been
I produced and delivered to Birmingham in late July 2020. I
J J
92. However, on 11 September 2020, D & D informed Win
K
Billion that the stocks of Masks originally reserved to Win Billion had been K
resold already and an additional deposit was required from Win Billion for
L L
a new order.
M M
93. Eventually, Mr Wu procured Sing Kong Supply Chain
N Management Company Limited (“Sing Kong”) to supply to it 850,220 N
units of the Masks for the purpose of the sale of the same to Purple Surgical.
O O
Inspection of the same by Bureau Veritas BIVAC Asian CRE (Shanghai)
P Inspection Co., Ltd was completed on 9 November 2020. Upon completion P
of such inspection, Win Billion agreed to purchase the units of Masks from
Q Q
Sing Kong in order for the same to be supplied to Purple Surgical. It is
R pleaded that the intention of Win Billion and Mr Wu has always been to R
S
supply the Masks to Purple Surgical pursuant to the SPA. S
T T
U U
V V
A - 27 - A
B 94. By reason of their genuine intention to complete the B
transaction, there cannot be any conspiracy among Win Billion, Mr Wu and
C C
Smart Up to injure Purple Surgical.
D D
Relevant legal principles
E E
95. Before examining and evaluating the material evidence, it is
F F
helpful to remind myself of the legal principles germane to these pleas of
G Purple Surgical. G
H H
96. The tort of deceit consists of the following elements:
I I
(1) A false representation by X to Y;
J J
(2) the knowledge of X that the representation is false or the
K K
absence of belief in its truth, or the recklessness as to its truth;
L L
(3) the intention of X that Y would rely on the representation;
M M
(4) the reliance of Y on the representation; and
N N
(5) Y’s acting to his detriment as a result of such reliance.
O O
P See: Tort Law & Practice in Hong Kong (3rd ed), §23.001 P
Q 97. What a person promises to do in future can be a representation Q
of his present intention for future conduct. This comes within the ambit of
R R
an existing fact: see Edgington v Fitzmaurice (1885) 29 Ch D 459 at p.483.
S S
98. In Edgington, Bowen LJ said this at pp.481-482,
T T
“In order to sustain his action he must first prove that there was a
U statement as to facts which was false; and secondly, that it was U
V V
A - 28 - A
B
false to the knowledge of the Defendants, or that they made it not B
caring whether it was true or false. For it is immaterial whether
they made the statement knowing it to be untrue, or recklessly,
C without caring whether it was true or not, because to make a C
statement recklessly for the purpose of influencing another person
is dishonest.”
D D
99. Fraud is proved upon finding of deceit. When it is shown that
E E
a false representation has been made knowingly, or without belief in its
F truth or recklessly, careless whether it be true or false, a claim in fraud is F
established: Derry v Peek (1889) 14 App 337.
G G
H 100. A director attracts personal liability for his own fraud where H
he was effectively the mind of the company and where he made the
I I
fraudulent representation knowingly, even if the company itself is liable for
J the deceit: Contex Drouzhba Ltd v Wiseman [2008] BCC 301 at §14. J
K K
101. In Pido v Compass Technology Co Ltd [2010] 2 HKLRD 537,
L
§13-17, Ma CJHC (as he then was), after a review of the authorities L
including Lonrho Plc v Fayed [1992] 1 AC 448, set out the essential
M M
elements of a claim based on conspiracy: (i) there is an agreement between
N two or more persons; (ii) there is an intention to injure the plaintiff by N
unlawful means whether or not it is the predominant purpose; (iii) the acts
O O
were carried out pursuant to the agreement and the stated intention; and (iv)
P there is damage caused to the plaintiff as a result. P
Q 102. In Apple Inc v Proview International Holdings Ltd, Q
HCA739/2010 (unreported, 14 July 2011), Poon J (as he then was) said this
R R
at §32,
S S
“A company, being a separate legal person, can conspire with its
T directors; and the knowledge of the company may be found in a T
director who has management or control for the transaction or act
in question.”
U U
V V
A - 29 - A
B Discussion B
C Comments on parties’ evidence generally C
D D
103. Only Mr Sharpe and Mr Wu testified in the witness box. The
E evidence of Mr Sharpe was not subject to any meaningful challenges in E
cross-examination. His evidence was largely supported by
F F
contemporaneous documents. Mr Sharpe sounded confident in his answers
G and appeared to be forthcoming in his oral testimony. I am satisfied that he G
was a reliable and truthful witness and I have no difficulties in accepting
H H
his evidence in its entirety.
I I
104. In stark contrast, I can hardly have any confidence in the
J J
testimony of Mr Wu. For those matters of peripheral concern not covered
K
by any evidence of Purple Surgical, Mr Wu was articulate and eloquent and K
he tended to give lengthy and detailed answers.
L L
105. However, Mr Wu was clearly evasive on important matters
M M
and was unable to answer pertinent questions. He did not hesitate to shirk
N responsibility by saying that Tony was the key figure acting on behalf of N
Win Billion in procuring the execution of the SPA and the performance of
O O
the same and it was Tony who dealt directly with the suppliers.
P P
106. Inconsistencies between Mr Wu’s oral evidence and his
Q Q
witness statements, his disposition in the US Action and indisputable
R contemporaneous documents abound. Mr Wu did not appear to be troubled R
by such inconsistencies when challenged cross-examination. He often
S S
replied that he had no further explanation and more often he blamed his
T former solicitors. T
U U
V V
A - 30 - A
B 107. Mr Wu was also unable to produce documents of obvious B
importance to prove the defence case. The authenticity of those documents
C C
he managed to provide was seriously, and quite righty, challenged. Mr Wu
D was never short of excuses and he often found his former solicitors a D
convenient scapegoat.
E E
108. I shall delve into his evidence below. At this juncture, I should
F F
make it clear that I am not prepared to accept any of Mr Wu’s evidence
G G
unless it is collaborated by credible contemporaneous documents.
H H
Evidence before the entry of the SPA and the Escrow Agreement
I I
109. Before deciding on the bona fide of Win Billion in procuring
J J
the creation of the SPA and the Escrow Agreement, it is necessary to
K
examine all the background facts about Mr Wu, Tony and Win Billion. K
L 110. Mr Wu first worked in the insurance industry after graduation L
from the university. He became the District Director of Prudential Hong
M M
Kong Limited. He quitted in 2010 and thereafter has engaged in various
N business ventures. He set up an insurance brokerage firm. In 2015, he set N
up a capital management company in Hong Kong known as Starlight. He
O O
has solid experience in the business world and should not be unfamiliar
P with handling commercial contracts. P
Q Q
111. Purple Surgical was able to find out more about the personal
R financial situation of Mr Wu at the relevant time. Mr Wu actually had some R
legal actions to deal with and his hands should be quite full.
S S
T
112. First, on 14 November 2017, Manulife (International) Limited T
(“Manulife”) an action against Mr Wu under HCA 2605/2017 to claim for
U U
V V
A - 31 - A
B unpaid loans and advances during his employment in the amounts of B
HK$1,774,236.53 plus interest and costs. Judgment was entered against Mr
C C
Wu in or about March 2018.
D D
113. On 24 of September 2019, on the strength of the judgment
E debt, Manulife issued a bankruptcy petition under HCB 5819/2019 against E
Mr Wu. In the petition, it was alleged that Mr Wu only paid HK$450,000
F F
toward the judgment debt leaving a balance of HK$1,526,537.00
G G
unsatisfied to.
H H
114. On the other hand, one Choy Ka Man (“Choy”) issued a writ
I of summons in DCCJ 1886/2019 on 12 April 2019 against Mr Wu to claim I
for repayment of a personal loan of HK$400,000 advanced to him in 2017.
J J
K
115. Choy obtained judgment against Mr Wu on 3 July 2019. Mr K
Wu was only able to pay HK$120,000 in partial satisfaction of the
L L
judgment debt. In the subsequent enforcement action, Choy obtained a
M charging order dated 10 October 2019 against the residential property of M
Mr Wu. The charge was duly registered on 24 October 2019.
N N
116. To get rid of the bankruptcy petition and the charge against his
O O
residential property, Mr Wu took out a second legal charge over his
P residential property with Fortune Capital Strategy Limited (“Fortune P
Capital”) on 7 January 2020. Fortunate Capital apparently granted a credit
Q Q
facility of HK$3.83 million to Mr Wu.
R R
117. With this credit facility, Mr Wu managed to get Manulife to
S S
withdraw the bankruptcy petition on 13 January 2020 and to cause Choy to
T discharge the charge against his residential property on 23 January 2020. T
U U
V V
A - 32 - A
B 118. Mr Wu was only able to pay off the outstanding loan owed to B
Fortune Capital after the receipt of a portion of the Earnest Money.
C C
119. In cross-examination, after being asked about all these legal
D D
actions and financial liabilities, Mr Wu agreed with Ms Lam that he was in
E fact in dire financial straits at the time of the SPA. E
F F
120. Win Billion did not fare better. It was incorporated in May
G 2018. Mr Wu accepted that there were not many profits from any business G
in the year of 2020.
H H
I
121. Mr Wu asserted that there had never been any accounts, I
audited or not, prepared for Purple Surgical. He explained that there were
J J
not many transactions and only a little profits, less than hundreds of
K
thousands, had been made. Most of such deals were completed by Tony. K
L 122. Mr Wu said that in light of the Covid-19 pandemic in 2020, L
Win Billion started trading in medical equipment including non-woven
M M
fabrics and PPE products by the supply of such products through other
N third-party distributors and manufacturers. N
O O
123. However, there is a complete lack of documents evidencing
P the alleged business activities. P
Q 124. Win Billion holds accounts with two banks, namely, UOB and Q
DBS Bank (Hong Kong) Limited (“the DBS Account”). It can be seen
R R
from the bank statements of the UOB Account that as at 31 May 2020, the
S S
credit balance of the account is about HK$350,000.
T T
125. Win Billion has not produced the bank statements showing the
U balance in the DBS Account prior to the entry of the SPA. U
V V
A - 33 - A
B 126. I now turn to Tony. Little is known about his personal B
background. The pleaded case is that Tony was the business partner of Mr
C C
Wu and he acted on behalf of Win Billion. On the other hand, Mr Wu in his
D affirmation stated that Win Billion was mainly an investment vehicle for D
overseas business established by Tony and him.
E E
127. According to Mr Wu, Tony has high-level business
F F
connections with Chinese national corporations. He relied on Tony to assist
G G
Win Billion in sourcing sellers and/or distributors of medical equipment.
H H
128. Mr Sharpe did not have any communication with Tony. Mr
I Sharpe did not know that Tony was involved in the transaction. I
J J
129. For Jody, Mr Wu made an obvious effort to distance himself
K
from him. In the pleaded case, it is asserted that Jody was not a legal K
representative of Win Billion and/or Mr Wu. They had never represented to
L L
Purple Surgical that Jody acted on behalf of Win Billion and Mr Wu.
M M
130. In his evidence, Mr Wu claimed that Tony introduced Jody to
N Win Billion to act as the Escrow Agent under the SPA. However, Mr Wu N
denies that Jody acted for Win Billion. He claims that he had never spoken
O O
to him personally and he relied on Tony to communicate with Jody. It was
P Tony who gave instructions to Jody for making the payments out of the P
Escrow Account.
Q Q
R 131. In the messages of the WeChat Group generated on or about R
17 May 2020, it can be seen that Mr Wu referred Jody as his lawyer and it
S S
was Mr Wu who suggested that payment should be made to the escrow
T account of “my lawyer”. T
U U
V V
A - 34 - A
B 132. On 22 May 2020, Mr Sharpe received an email from Jody. B
There, Jody referred Win Billion as his client.
C C
133. For completeness, Mr Wu called Ms Rosy Chan of SH on 7
D D
July 2020 and told her that Jody, his lawyer, had advised him not to speak
E to the solicitors of Purple Surgical. E
F F
WIN BILLION a bona fide supplier?
G G
134. Returning to the crux of the dispute, I find Mr Wu to be an
H H
untrustworthy witness being very economical with the truth. It is plain and
I
obvious to me that Mr Wu had no genuine intention whatsoever to cause I
Win Billion to perform the SPA and the Escrow Agreement when
J J
contracting with Purple Surgical for the following reasons.
K K
135. Firstly, it is inherently improbable that Win Billion and/or Mr
L Wu would delegate the task of fulfilling the SPA almost entirely to Tony L
and abstain from taking an active part in the transaction.
M M
N (1) Before the creation of the SPA, the financial condition of Mr N
Wu was poor. He was under serious stress in view of the legal
O O
actions against him and his home property was jeopardised.
P P
(2) The SPA was the biggest deal in his trading career. It came at
Q a time when he badly needed money. The resultant sizeable Q
profits made out of the SPA must be a strong incentive for Mr
R R
Wu to work tirelessly to ensure that the profits would
S S
eventually go to his pocket so that he could break away from
T
his financial plight. T
U U
V V
A - 35 - A
B (3) On the other hand, Mr Wu, a seasoned businessman with B
extensive experience in handling commercial contracts, should
C C
know very well that if Win Billion was unable to complete the
D transaction, there would be grave legal and financial D
consequences and Win Billion would be liable to cover the
E E
loss of Purple Surgical which could be very substantial.
F F
(4) The Masks were rare commodities at that time when there was
G G
a huge demand of such products worldwide. Governments of
H
many countries all over the world took an active part in H
sourcing surgical masks for their citizens to combat Covid-19.
I I
This is exactly the case here and the Masks were for the NHS.
J
Mr Wu must be alive to the urgency of the need of the Masks J
too.
K K
(5) Against this background, fulfilment of the contractual duties
L L
under the SPA was no mean feat and it should indeed be a
M daunting task for Win Billion. Neither Mr Wu nor Win Billion M
had ever dealt in medical products before. Nor is there any
N N
evidence that Tony had ever handled similar sales and had any
O business relationship with 3M himself. There is no basis of O
any trust and confidence of Mr Wu in Tony that he could
P P
single-handedly source the Masks under such severe time
Q constraint. It is unbelievable that Mr Wu would simply give Q
Tony a free hand to complete the transaction.
R R
S (6) Tony was not even in the WeChat Group meaning that he was S
not involved at the initial stage. There is no reason why Mr
T T
Wu would refrain from liaising with the purported suppliers
U U
V V
A - 36 - A
B himself and just let Tony step in and take over the entire task B
of performing the SPA.
C C
136. Secondly, there is no reason why Win Billion and Mr Wu did
D D
not enlist assistance from Tony by way of either testifying at trial for them
E or disclosing more relevant documents to support the defence case. E
F F
(1) In cross-examination, Mr Wu agreed with Ms Lam that Tony
G had caused Win Billion, Mr Wu and Smart Up substantial loss G
by causing unauthorised transfers out of the Escrow Account.
H H
When Mr Wu was asked whether he had ever contemplated
I suing Tony, he said, rather perplexingly, that his bank account I
was frozen.
J J
K
(2) Mr Wu also said that he and Tony were still on speaking terms K
and Tony was still contactable. Mr Wu even claimed that
L L
Tony had a conference with him and his former solicitors and
M they discussed about preparation of a witness statement for M
this action. There is simply no reason why Mr Wu did not
N N
procure Tony to testify. Tony should be in the best position to
O explain what steps Win Billion had taken to perform the SPA O
with reference to all those documents produced by Win Billion.
P P
This would show that Win Billion was a bona fide supplier
Q under the SPA and his evidence would be fundamental to the Q
defence case.
R R
S
(3) Furthermore, Win Billion only disclosed a few texted S
messages exchanged between Tony and Mr Wu. And the
T T
disclosure seemed very cautious and selective. There should
U
be a large number of such materials and they must have very U
V V
A - 37 - A
B frequent communications during the currency of the SPA B
which represented the biggest business of their partnership.
C C
Their conversations would be very telling as to how they
D caused to Win Billion to perform the SPA. D
E (4) When asked about this inadequate disclosure, Mr Wu first E
claimed that he had lost his phone and thus he no longer had
F F
such messages. This is hardly acceptable. Even in the
G G
improbable event that there was no backup of such messages,
H
he could simply ask Tony to send him back all such messages H
to support the defence case.
I I
(5) And Mr Wu proffered another excuse. He was reminded that
J J
in his disposition made in the US Action, he claimed that he
K had given a vast amount of messages, WeChat messages and K
emails to his former solicitors. Mr Wu again blamed his
L L
former solicitors and claimed that due to their inexperience,
M they failed to disclose such documents in these proceedings. M
This is wholly unreasonable. Even his former solicitors for
N N
whatever reasons have failed to disclose such documents, his
O current solicitors no doubt should remedy the situation and O
seek to produce them to strengthen the defence case. This
P P
court suggested to Mr Wu that he might consider making an
Q application albeit late to disclose such material documents and Q
he did not do anything in this regard. His inaction is telling.
R R
He only made up excuses and he had no supportive documents
S S
to produce.
T T
(6) Ms Lam submits that due to the failure to call Tony as a
U witness and/or to produce documents which relate to his U
V V
A - 38 - A
B exchanges with Mr Wu, coupled with a lack of any plausible B
explanation for such a failure, this court is fully entitled to and
C C
ought to draw adverse inferences against Mr Wu, see Tjang
D Siu Thu v Profield Construction Engineering Ltd [2015] 5 D
HKC 22, §33; Wisniewski v Central Manchester Health
E E
Authority [1998] PIQR 324, 340; and Telings International
F Hong Kong Ltd v John Ho (CACV 10/2010, 22 October 2010), F
§79.
G G
H
(7) Her submission must be correct. I am satisfied that I could H
draw the inference that Tony, allegedly responsible for
I I
sourcing the Masks for the SPA, could not give any useful
J
evidence of his purported performance of SPA on behalf of J
Win Billion. There is evidently no such evidence. Win Billion
K K
never made any genuine effort to supply the Masks to Purple
L Surgical. L
M 137. Thirdly, the evidence produced by the defence relating to the M
sourcing of the Masks is dubious and does not bear scrutiny.
N N
O (1) The SPA involved a mega business deal. Win Billion O
contracted with Purple Surgical to supply the Masks in huge
P P
quantity originating from 3M, a reputable international
Q manufacturer for the use of a governmental medical institution Q
in England. It is only reasonable to expect Win Billion would
R R
make an all-out effort and deal with credible suppliers to fulfil
S its obligations under the SPA. The evidence of its purported S
sourcing effort is, however, hopelessly inadequate and utterly
T T
incredible.
U U
V V
A - 39 - A
B (2) Win Billion relied on YG Tech to supply the Masks. In the B
first place, even on its own case, the way Win Billion got rid
C C
of Utility Sugar and dealt with YG Tech directly for a bigger
D profit margin shows that the commercial morality of Win D
Billion was questionable.
E E
(3) YG Tech is in itself suspect. In his email sent to Mr Sharpe on
F F
13 June 2020, Mr Wu represented to Mr Sharpe that Win
G G
Billion had sourced the Masks through a Korean company
H
called YG Tech which was an official 3M distributor in South H
Korea. He added that YG Tech was “our associated company”.
I I
Clearly, Mr Wu did not tell Mr Sharpe the truth. To start with,
J
if the YG Tech SPA was signed on 25 May 2020, there is no J
reason why Mr Wu only disclosed the identity of YG Tech to
K K
Purple Surgical almost three weeks later. Moreover, Mr Wu
L had to accept that YG Tech was not in any way associated L
with Win Billion. The investigation carried out by Purple
M M
Surgical through SH reveals that YG Tech is merely a sole
N trader registered in its Certificate of Business Registration N
dated 16 March 2020 as a lamp and lightbulb business. When
O O
confronted with this finding, Mr Wu asserted that YG Tech
P had changed its business and now traded in medical products. P
I find it improbable that YG Tech could change its business
Q Q
into an entirely different area and thence become a 3M
R authorised distributor in South Korea 2 months later. This R
change of business should be reflected in its Certificate of
S S
Business Registration too. I cannot accept Mr Wu’s assertion.
T T
U U
V V
A - 40 - A
B (4) It follows that YG Tech could never be a supplier of the B
Masks. All the alleged subsequent communications between
C C
YG Tech and 3M including the Emails must be falsified
D documents. Mr Wu forwarded such communications to Mr D
Sharpe to make him believe that Win Billion was performing
E E
the SPA while dissipating the Earnest Money for his personal
F use. F
G (5) The whole story of Win Billion’s performance of the SPA is G
H
beyond belief. Given the analysis above, it is really not H
necessary to set out all other inexplicable and unbelievable
I I
features here. For completeness, I would only highlight the
J
following matters. J
K (6) In the YG Tech SPA, YG Tech was required only to supply K
the Masks with the country of origin to be confirmed whilst
L L
under the SPA, the Masks must be manufactured in the United
M States. There was no certainty that the masks supplied by YG M
Tech would satisfy the contractual requirement of the Masks
N N
under the SPA.
O O
(7) The unilateral switch from YG Tech to D & D as the
P P
purported supplier of Win Billion looked improbable in the
Q business world. It was made on 15 June 2020 when Purple Q
Surgical was already pressing hard for delivery. Mr Wu had
R R
confirmed that delivery would be on 17 June 2020. I do not
S understand why YG Tech said in its letter of the even date that S
it would stop signing the contract too. The YG Tech SPA had
T T
already been executed and the parties had signed thereon.
U Moreover, Win Billion and Mr Wu could not have accepted U
V V
A - 41 - A
B this arrangement. He should know that he was not shopping in B
a flea market where he might readily switch to another stall
C C
nearby to buy the same products.
D D
(8) When pressed by Mr Sharpe for proof of Win Billion’s
E payment to the authorised 3M dealer on 30 June 2020, Mr Wu E
sent to Mr Sharpe a redacted transfer advice showing the 3M
F F
Remittance. Apparently there was a transfer of
G USD247,545.25 from the UOB Account to “3M Georgia G
H
LLC”. H
I (9) However, Mr Wu did not disclose to Mr Sharpe that the same I
payment had already been refunded to Win Billion on 16 June
J J
2020. Mr Wu deliberately misled Mr Sharpe by withholding
K this information. He could not give any plausible explanation K
why he did so.
L L
M (10) Subsequently, it was found out that 3M Georgia LLC is only a M
company registered in Georgia, Eastern Europe and has
N N
nothing to do with 3M. Alarmingly, the photos of its business
O address showed that it is an automobile maintenance centre in O
Tbilisi, the capital of Georgia. Mr Wu could say nothing about
P P
this. It was clearly a scam.
Q Q
(11) The redaction of such documents sent to Purple Surgical by
R Mr Wu was said to be necessary owing to the confidentiality R
S
provision in the YG Tech SPA. It, however, does not explain S
why even those documents purportedly originating from 3M
T T
including the D & D 3M Invoice and its written apology (“the
U
3M Apology”) in its email dated 12 June 2020 were redacted U
V V
A - 42 - A
B as well. Mr Wu sought to explain that in dealing with 3M, he B
found that certain information in a lot of contracts and
C C
invoices were redacted and he had once asked a 3M distributor
D in Vietnam why redaction was needed. The 3M distributor told D
him that the official information of 3M was too sensitive and
E E
3M feared that the general public would contact it directly. I
F note that this explanation was not given to Mr Sharpe and was F
not included in any of his affirmations and witness statement.
G G
In any event, this does not make sense at all. There is no
H reason why such redactions should not be removed when the H
documents are being adduced as evidence to be used solely for
I I
litigation purpose. It is clear that Mr Wu merely made this up.
J J
(12) In passing, I should point out that I could not believe that 3M
K K
made the written apology for the delay of making the shipment
L pursuant to the demand of Purple Surgical after such a demand L
was made less than 24 hours ago. 3M is not a small local
M M
business entity and it is unrealistic to expect that it would
N accept any liability in writing so readily. More importantly, N
there was no contractual relationship between 3M and Purple
O O
Surgical at all and 3M had no reason to make such an apology.
P Only Mr Wu knows the actual provenance of the 3M Apology. P
Q (13) I have no idea why the falsified documents required redaction. Q
The information in such documents was false anyway. Perhaps
R R
the fraudsters producing such documents believe that the
S S
redaction would make such documents appear to be genuine.
T T
138. Fourthly, the way that Mr Wu handled and/or dissipated the
U Earnest Money indicates that he had no intention to cause Win Billion to U
V V
A - 43 - A
B honour the SPA and the Escrow Agreement. I only need to give these B
examples.
C C
(1) On 10 June 2020, Jody paid Win Billion out of the Escrow
D D
Account a sum of USD 3 million. Mr Wu was aware of the
E receipt of the USD 3 million. However, he claimed that he did E
not know that it came from the Escrow Account.
F F
G (2) Mr Wu’s purported ignorance must be rejected. Mr Wu G
explained that he had asked Tony to pay him some profits in
H H
advance so that he could make investments in some companies.
I He forgot that he himself was then in very poor financial I
condition and that Win Billion had had no significant business
J J
before the SPA. He claimed to believe that the said sum was
K gained from other transactions done by Tony and him. K
However, he could not identify any transactions which had
L L
been completed or near completion. This is inconceivable. Mr
M Wu must be interested to know which transaction other than M
the SPA would bring him such a huge profit. Mr Wu should
N N
have asked Tony about the details of the alleged transaction.
O O
(3) Of course Mr Wu knew that the said sum came from the
P P
Escrow Account. There could be no other source. Mr Wu must
Q be aware that it was against the Joint Instruction Requirement Q
for Jody to pay the said sum to Win Billion. He must be
R R
alarmed and should refuse to accept the said sum if he was a
S decent businessman having a genuine intention to honour the S
SPA and the Escrow Agreement.
T T
U U
V V
A - 44 - A
B (4) Mr Wu was unable to disclose any communication with Tony B
and/or Jody in relation to the transfer of the said sum. Nor did
C C
he ask Jody to testify for him to give an account about the
D transfer apparently in breach of the Escrow Agreement so as to D
exonerate him. Such a failure could only point to the fact that
E E
Mr Wu was acting in concert with Jody in regard to this
F unauthorised transfer. F
G G
(5) Next, Mr Wu paid HK$1,000,000 to Polar Pay Ltd on 5 June
H
2020 and the sums totalling HK$2,000,000 to Easypasscorp H
Ltd on 4 June and 10 July 2020 respectively. Mr Wu cannot
I I
even produce the receipts of Polar Pay Ltd and Easypasscorp
J
Ltd. J
K (6) Mr Wu now claimed that these payments were “tea money” K
payments made to some anonymous military leaders in the
L L
Mainland. This explanation is inconsistent with his earlier
M evidence given by way of his affirmation and his deposition in M
the US Action. In his 4th Affirmation, Mr Wu said that the
N N
payments were for “business associate’s profit”. In his
O deposition in the US Action, Mr Wu stated that the payment to O
Polar Pay Ltd was for payment of expenses in Mainland
P P
China.
Q Q
(7) Mr Wu explained that Tony had advised him that such tea
R R
money was required because the anonymous military leaders
S could procure the supply of the Masks for Win Billion. Such S
military leaders had to be anonymous because their activities
T T
were very sensitive.
U U
V V
A - 45 - A
B (8) This explanation is simply absurd. I cannot understand and B
there is no credible evidence to show how such military
C C
leaders could be involved in the trade of 3M’s medical
D products. Mr Wu also forgot his earlier version as to how he D
came to know YG Tech. In his witness statement, he stated
E E
that YG Tech was introduced to Tony by Mr Xu. YG Tech
F contracted to supply the Masks to Win Billion as early as 25 F
May 2020. The anonymous military leaders played no part in
G G
the sourcing of the Masks at all.
H H
(9) Mr Wu was quick to make a merger of these two different
I I
versions in the witness box. He explained that Mr Xu had
J
actually been appointed by the military leader to assist him. I J
cannot accept his new story. He forgot that he had also stated
K K
that he came to know YG Tech when dealing with Utility
L Sugar and he was able to deal with YG Tech through Utility L
Sugar without the assistance of the military leaders.
M M
(10) On 4 June 2020, Smart Up received USD100,000 from Win
N N
Billion and an additional total sum of HK$4,431,380 from Mr
O Wu. These payments were made for no discernible purpose. I O
reject Mr Wu’s explanation that Smart Up was entitled to
P P
these sums under a consultancy agreement dated 19 May 2020
Q regarding the supply of the Masks to Purple Surgical pursuant Q
to the SPA for an intermediary remuneration of USD300,000.
R R
S (11) Ms. Lam submits that Smart Up could not serve as a S
consultant to Win Billion given the fact that Mr Wu is their
T T
common sole director and shareholder. More importantly, Win
U Billion had no intention whatsoever to look for a genuine U
V V
A - 46 - A
B supplier to fulfil the SPA at all and Smart Up could not B
provide any service of value to Win Billion. Mr Wu could not
C C
explain why Smart Up had received more than the stipulated
D reward under the purported consultancy agreement at the end. D
The purported consultancy agreement is merely a sham in my
E E
view. Smart Up is merely another business vehicle of Mr Wu
F to receive and dissipate the Earnest Money. F
G G
(12) On the other hand, from 3 June 2020 to 3 July 2020, Win
H
Billion transferred a total sum of USD3,766,591.74 to Mr Wu. H
Mr Wu said that these sums were dividends paid to him as
I I
shareholder of Win Billion. In cross-examination, Mr Wu said
J
he pinned all his hopes on the SPA and expected to make a J
large profit. Therefore, Win Billion saw fit to declare
K K
dividends. Ms Lam submits that this explanation is
L preposterous and I agree with her. L
M (13) Even on his own evidence, Win Billion was then nowhere near M
securing the Masks to be supplied to Purple Surgical within
N N
the lead time of 7 to 10 business days after the receipt of the
O 1st Payment. As stated earlier, Mr Wu had confirmed to Purple O
Surgical in his email that delivery could be made on 20 June
P P
2020. The 3M Remittance was returned without credible
Q explanation. YG Tech decided to jump ship and let D & D Q
took over the deal with Win Billion. D & D was only
R R
incorporated on 3 June 2020 in South Korea and it is hard to
S S
believe that it was already an authorised distributor of 3M. Mr
T
Wu even told Purple Surgical that Win Billion intended to sue T
3M for non-delivery of the Masks. Against this background, it
U U
V V
A - 47 - A
B is inexplicable how Mr Wu could still believe that Win Billion B
could complete the transaction in accordance with the SPA
C C
and was confident that Win Billion would be able to gain the
D profit under the SPA legitimately. Mr Wu could not believe D
that such dividends were declared in the circumstances.
E E
(14) It can also be seen that after the receipt of the 1 st Payment,
F F
Win Billion did not reserve any part of the Earnest Money to
G G
purchase the Masks so as to supply the same to Purple
H
Surgical. The 3M Remittance turned out to be a farce. There is H
no evidence that Win Billion has ever settled the D & D 3M
I I
Invoice. Mr Wu was quick to use such portions of the Earnest
J
Money transferred to him for his personal use including J
paying off his outstanding debts owing to Fortune Capital in
K K
the sum of HK$158,693 on 3 June 2020 and HK$3,915,317.20
L on 12 June 2020. Obviously, Mr Wu was just too happy with L
st
the 1 Payment without making any genuine effort to use any
M M
portion of the same to fulfil the obligations of Win Billion
N under the SPA. There is no evidence of any such payment to N
buy a single mask.
O O
(15) Lastly, Mr Wu’s reliance on Sing Kong to supply the Masks to
P P
Purple Surgical is misconceived. Mr Wu had the audacity to
Q make the offer to supply the Masks through Sing Kong in Q
November 2020, long after the termination of the SPA in July
R R
2020.
S S
(16) In fact, in early September 2020, the son of Mr Sharpe saw a
T T
post on LinkedIn by a broker in Chad, Africa offering to sell 5
U million units of the Masks and such masks were currently in U
V V
A - 48 - A
B Hong Kong. Further investigation has revealed that Sing Kong B
was the ultimate supplier. Mr Wu being one of the directors of
C C
Sing Kong should know that such masks, if ever existed,
D should be supplied to Purple Surgical in September 2020 as a D
matter of urgency to remedy the breach of the SPA on the part
E E
of Win Billion and should not be offered to the general public.
F The offer of Sing Kong on LinkedIn is fishy indeed and F
appears to be another scam.
G G
H
(17) There is also not a shred of evidence to support Mr Wu’s H
allegation that the Masks sourced from Sing Kong were still in
I I
the warehouse and were ready for delivery as at 7 September
J
2022, the date of his witness statement. J
K K
139. For these reasons, I have no hesitation in rejecting the
L evidence of Mr Wu in its entirety except those supported by undisputed L
documentary evidence, which is very rare. I am not prepared to further
M M
analyse his evidence particularly those relating to the fourth layer of
N payment of the Earnest Money. He simply used the Earnest Money as if it N
were all his personal monies without any intention to purchase the Masks
O O
for Purple Surgical. Ms Lam in her closing submissions has literally left no
P stone unturned to expose the numerous lies that Mr Wu told throughout the P
4 days in the witness box. Suffice it to say, I am in total agreement with her
Q Q
analysis.
R R
140. On the incontrovertible evidence adduced by Purple Surgical
S S
and in the absence of any credible evidence of the defence, I come to the
T conclusion that Win Billion through Mr Wu knowingly made the T
Representation to Purple Surgical that Win Billion intended to perform the
U U
V V
A - 49 - A
B SPA and the Escrow Agreement. Purple Surgical relied and act upon the B
Representations and paid the Earnest Money to the Escrow Account. The
C C
Representation was false and Purple Surgical has suffered financial loss in
D the sum of USD9,523,232. D
E E
141. I conclude that the tort of deceit and fraudulent
F misrepresentation is established by compelling evidence. Mr Wu and Win F
Billion are inseparable in this matter. Mr Wu being the controlling mind of
G G
Win Billion knowingly procured and directed Win Billion to commit the
H tort. He must be personally liable together with Win Billion. I, therefore, H
hold that the tort was committed by both of them jointly and both of them
I I
are liable.
J J
142. As Lord Bingham said in HIH Casualty and General
K K
Insurance Ltd. v Chase Manhattan Bank [2003] 1 All ER (Comm) 349 at
L §15, fraud unravels all and once fraud is proved, it vitiates all judgments, L
contracts and or transactions whatsoever. Rescission is in order.
M M
N 143. As regards the claim based on conspiracy to injure by N
unlawful means, I am satisfied that Mr Wu, Win Billion and Smart Up
O O
agreed to work in cohort and conspired to deceive Purple Surgical into
P paying the Earnest Money pursuant to the SPA by the Representation. P
After receiving the 1st Payment, knowingly in breach of the SPA and the
Q Q
Escrow Agreement, Mr Wu caused payments to be made out of the Escrow
R R
Account for their own use to the detriment of Purple Surgical. Purple
S
Surgical has suffered financial loss as a result. S
T T
144. In the premises, I hold that the conspiracy claim against Win
U
Billion, Mr Wu and Smart Up is also made out on the evidence. U
V V
A - 50 - A
B B
145. All the other causes of action pleaded by Purple Surgical
C C
become academic in light of my foregoing conclusions. I do not find it
D necessary to deal with them any further. D
E E
Conclusion and costs
F 146. For the reasons given, the claim of Purple Surgical against F
Win Billion, Mr Wu and Smart Up must succeed. Purple Surgical must be
G G
indemnified against all its loss caused by its entry to the SPA induced by
H fraud. I order that judgment be entered against Win Billion, Wu and Smart H
Up for the sum of USD9,523,231.40.
I I
J 147. I also order that all the injunction orders be continued until J
further order.
K K
L 148. This is a case of serious and complex fraud involving oversea L
participants. At least a Georgian business entity together with its account
M M
with a bank in Georgia and a lawyer in the United States other than Mr Wu
N and Win Billion were involved. Quite a few forged documents were N
produced. I do not believe that Mr Wu perpetrated the fraud on his own. He
O O
basically deflected all the blames to Tony and his former solicitors. Not
P being sarcastic or cynical, I cannot say with any certainty whether Tony is P
a real character or whether Tony is the real name. Mr Wu was determined
Q Q
not to tell the truth in his testimony and he just lied extensively and
R R
casually.
S S
149. In view of the gravity of the fraud and the egregious conduct
T T
of the defence, I make an order nisi that Purple Surgical’s costs of this
U
action including all costs reserved be paid by Win Billion, Mr Wu and U
V V
A - 51 - A
B Smart Up, to be taxed if not agreed, on an indemnity basis, with a B
certificate for two counsel.
C C
D 150. Lastly, I thank Ms Lam, Mr Luxton and Mr Zhu for their able D
assistance in this matter.
E E
F F
G G
H H
(Kent Yee)
I Deputy High Court Judge I
J J
K Ms Rachel Lam SC leading Mr Nick Luxton, instructed by Stephenson K
Harwood, for the Plaintiff
L L
The 1st Defendant was not represented and did not appear
M M
Mr Peter Zhu, instructed by P. C. Woo & Co, for the 2nd Defendant (until 6
May 2024)
N N
The 4th Defendant was not represented and did not appear
O O
P P
Q Q
R R
S S
T T
U U
V V
A - 52 - A
B Annex B
C C
D D
E E
F F
G G
H H
I I
J J
K K
L L
M M
N N
O O
P P
Q Q
R R
S S
T T
U U
V V
A - 53 - A
B B
C C
D D
E E
F F
G G
H H
I I
J J
K K
L L
M M
N N
O O
P P
Q Q
R R
S S
T T
U U
V V
PURPLE SURGICAL UK LTD v. WIN BILLION INVESTMENT GROUP LTD AND OTHERS
A
A
HCA 1600/2020
B
[2024] HKCFI 1643 B
C IN THE HIGH COURT OF THE C
HONG KONG SPECIAL ADMINISTRATIVE REGION
D
D
COURT OF FIRST INSTANCE
E ACTION NO 1600 OF 2020 E
F
BETWEEN F
G PURPLE SURGICAL UK LIMITED Plaintiff
G
and
H
H
WIN BILLION INVESTMENT GROUP 1st Defendant
I LIMITED
I
(永億投資集團有限公司)
J
J
WU YUN FAI (鄔潤輝) 2nd Defendant
K
STRONGJET (ASIA) SUPPLY CHAIN 3rd Defendant K
COMPANY LIMITED
L
(創捷(亞洲)供應鏈有限公司) L
M SMART UP INCUBATOR LIMITED 4th Defendant M
N
N
_______________________
O
O
P Before: Deputy High Court Judge Kent Yee in Court P
Q Dates of Hearing: 11-15 and 22 March 2024
Q
Date of Judgment: 21 June 2024
R
________________________ R
S
JUDGMENT S
________________________
T
T
U
U
V
V
A - 2 - A
B Introduction B
C 1. In this action, Purple Surgical UK Limited (“Purple Surgical”) C
claims to recover part of USD 27 million (“the Earnest Money”) paid for
D D
its purchase of 5 million pieces of “3M 9332+” surgical masks (“the
E Masks”) from Win Billion Investment Group Limited (“Win Billion”) E
pursuant to a sale and purchase agreement (“the SPA”) during the
F F
Covid-19 pandemic in late May 2020. Eventually, each of the defendants
G G
received certain portions of the Earnest Money.
H H
2. Not a single mask was supplied to Purple Surgical at the end.
I None of the defendants attended the trial to claim innocence except Mr Wu. I
J J
3. The claim of Purple Surgical against the defendants is
K
essentially restitutionary in nature though a contractual claim is included as K
an alternative. The primary case of Purple Surgical against Mr Wu is deceit
L L
and fraudulent representation.
M M
4. In a nutshell, Mr Wu insists that Win Billion has made a
N genuine effort to source the Masks to complete the transaction and it was N
Purple Surgical which terminated the SPA prematurely. Win Billion was at
O O
liberty to use the Earnest Money for its own purposes and Mr Wu
P characterises the present dispute as a contractual matter only. Mr Wu P
believes he cannot be personally liable no matter even if Win Billion
Q Q
breached the SPA.
R R
5. At the very outset, Win Billion, Mr Wu and Smart Up
S S
Incubator Limited (“Smart Up”) were represented by Messrs. Henry Yu &
T Associates and a joint defence dated 17 December 2020 was filed on their T
behalf. Messrs. Henry Yu & Associates ceased to act for these defendants
U U
V V
A - 3 - A
B by an order dated 21 April 2023 and Win Billion and Smart Up have had B
no legal representation since then. They have not applied for leave to be
C C
represented by their directors either. They were absent at the trial despite
D the attendance of Mr Wu, their common director. D
E 6. As regards Strongjet (Asia) Supply Chain Company Limited E
(“Strongjet”), it was separately represented and it paid into court a sum of
F F
USD6,525,000 being the amount Purple Surgical claims against it by
G G
consent on or about 29 October 2020. Eventually, on 14 October 2022,
H
Purple Surgical obtained default judgment against Strongjet. H
I 7. The upshot is that Purple Surgical and Mr Wu turn out to be I
the only participating adversaries at the trial hearing. Despite the absence
J J
of Win Billion and Smart Up, this court should determine whether the
K claim of Purple Surgical against each of these absentees is borne out by K
evidence.
L L
M 8. At the trial, Purple Surgical was represented by Ms Lam SC M
and Mr Luxton whereas Mr Wu was represented by Mr Zhu. Mr Sharpe,
N N
Chief Executive Officer of Purple Surgical, was the sole witness of Purple
O Surgical and Mr Wu alone testified for himself. O
P 9. The bulk of the factual evidence of Purple Surgical in support P
of its claim is not in dispute. The limelight is on the defence case of Mr Wu,
Q Q
who was skilfully and thoroughly cross-examined by Ms Lam for 4 days.
R R
Background facts
S S
T
10. By way of introduction, I shall first give some details about T
the parties and key characters.
U U
V V
A - 4 - A
B 11. Purple Surgical is a company incorporated in England and B
Wales and is the leading manufacturer of laparoscopic instruments and
C C
devices. One of its major customers is National Health Service (“NHS”)
D within the Department of Health and Social Care (“DHSC”) of the United D
Kingdom. The Masks were sourced by Purple Surgical to be delivered to
E E
NHS pursuant to a written contract between Purple Surgical and DHSC
F (“the Masks Contract”). F
G G
12. Win Billion is a company incorporated in the British Virgin
H
Islands. Mr Wu is the sole shareholder and director of Win Billion. Win H
Billion has no employee other than Mr Wu.
I I
13. Mr Wu is a Hong Kong permanent resident. He was born and
J J
bred in Hong Kong and in 2004 he graduated from Hong Kong University
K with a degree in Computer Science. K
L L
14. Strongjet is a locally incorporated company and is a wholly-
M owned subsidiary of a company incorporated in Mainland China known as M
Shenzhen Strongjet Supply Chain Co., Ltd.
N N
15. Smart Up is another locally incorporated company and Mr Wu
O O
is its sole shareholder and director. Smart Up, as alleged by Mr Wu,
P specializes in supporting and funding entrepreneurs, in particular, start-up P
business. Win Billion and Smart Up apparently entered into a written
Q Q
agreement entitled “Intermediary Service Agreement” dated 19 May 2020
R whereby Smart Up agreed to provide intermediary services to Win Billion R
S
for its surgical masks business in return of a remuneration of USD300,000. S
T T
U U
V V
A - 5 - A
B Transactions between Purple Surgical and Win Billion B
C 16. The whole story was started by the Masks Contract created on C
or about 28 April 2020. By the agreement, DHSC agreed Purple Surgical to
D D
purchase 5 million units of “3M Aura 9332+” masks to be delivered prior
E to 30 June 2020. It needs no reminder that there had been a frantic search E
for surgical masks since the outbreak of the COVID-19 pandemic.
F F
G 17. 3M is a multinational company based in the United States and G
is a well-known medical equipment supplier. Its surgical masks were in
H H
huge demand and 3M only trades with its official distributors, agents and
I some private resellers and brokers. I
J J
18. Purple Surgical first turned to Mr Kohler of Currency UK
K
which is a foreign exchange trading company and has a long-standing K
business relationship with Purple Surgical. Mr Kohler in turn introduced
L L
Mr Cline who is associated with Abraham & Sons Engineering PVT Ltd
M (“ASE”) in Israel to Purple Surgical. Subsequently, through the M
introduction of ASE via some intermediaries, Purple Surgical came to
N N
know Mr Wu and Win Billion. On or around 19 May 2020, Mr Sharpe
O received a draft of the SPA through ASE. O
P 19. Mr Sharpe agreed to the terms and Purple Surgical and Win P
Billion entered into the SPA. Mr Wu executed the SPA on behalf of Win
Q Q
Billion. The material terms of the SPA (pleaded by Purple Surgical and
R admitted by the defence in the pleadings) are as follows: R
S S
(1) Purple Surgical agreed to purchase and Win Billion agreed to
T sell 5,000,000 units of the Masks at the unit price of USD5.4 T
U U
V V
A - 6 - A
B per piece and the total purchase price was USD27,000,000 B
(“the Purchase Price”);
C C
(2) The origin of the Masks was the United States of America;
D D
E (3) Win Billion was required to deliver the Masks on a CIF basis, E
to Birmingham International Airport, United Kingdom;
F F
(4) Purple Surgical was required to transfer the Purchase Price to
G G
an agreed escrow account within 48 hours after both parties
H H
execute the SPA;
I I
(5) The parties were required to sign an escrow agreement after
J the signing of the SPA; J
K K
(6) Upon receipt of the Purchase Price into the designated
L escrow account, the escrow agent was required to release 35% L
of the total goods value USD9,450,000 (“the 1 Payment”) to
st
M M
a bank account designated by Win Billion;
N N
(7) The bank account designated by Win Billion was account
O numbered 081-915-654-8 (“UOB Account”) with United O
Overseas Bank Limited (“UOB”);
P P
Q (8) After receipt of the 1st Payment into the UOB Account, Win Q
Billion shall start preparing the production procedure by
R R
placing orders with 3M factory. Win Billion should get ready
S for SGS inspection for the Masks and shall then process S
ordering to 3M distributor, and to disclose the 3M distributor’s
T T
name and qualification documents for this batch of products to
U U
V V
A - 7 - A
B Purple Surgical within 5 working days after receiving the 1st B
Payment;
C C
(9) Purple Surgical was entitled to request to arrange SGS at his
D D
own source and expenses with prior notice to Win Billion.
E Further, Win Billion may provide video according to Purple E
Surgical’s request and code;
F F
G (10) Once the SGS report is passed satisfactory and video verified, G
escrow shall release the further payment to the UOB Account,
H H
being 65% of the Purchase Price, i.e. USD17,550,000 (“the 2nd
I Payment”) within 24 hours; I
J J
(11) Once the 2nd Payment is received into the designated account
K
of Win Billion, Win Billion would prepare the shipping K
arrangements and pack the Masks for air freight to the
L L
destination port;
M M
(12) The “lead time” for supply of the Masks was 7-10 working
N days after Win Billion receives the 1st Payment; and N
O O
(13) Win Billion guarantees that the Masks to be supplied were
P authentic and in conformity with the quality, specifications P
and quantity specified in the SPA.
Q Q
20. Win Billion was the account holder of the UOB Account and
R R
Mr Wu was the sole approved signatory of the UOB Account pursuant to a
S S
resolution of Win Billion dated 24 July 2018.
T T
U U
V V
A - 8 - A
B B
Escrow Agreement and Jody Wong
C C
21. Jody Wong (“Jody”) was a lawyer practising at the San
D D
Francisco Bar in the United States. Jody provided escrow agent services for
E Win Billion. E
F 22. On or about 21 May 2020, Purple Surgical and Win Billion F
entered into an escrow agreement dated 21 May 2020 (“the Escrow
G G
Agreement”) pursuant to the SPA. It was signed by Mr Sharpe on behalf
H H
of Purple Surgical, Mr Wu on behalf of Win Billion and Jody.
I I
23. In the recital of the Escrow Agreement, it was expressly stated
J that Purple Surgical and Win Billion had appointed Jody to hold the J
Earnest Money in accordance with the terms of the Escrow Agreement.
K K
The Escrow Agreement contained the following essential terms:
L L
(1) Jody was to act as stakeholder only;
M M
(2) Jody was not to release or disburse the Earnest Money, except
N N
that:
O O
(i) Jody was required to send the 1st Payment and the 2nd
P P
Payment in accordance with the terms of the SPA; and
Q Q
(ii) Jody was required to pay out professional fees upon
R disbursement of funds. R
S S
(3) The instructions for payment must be consistent and written
T instructions from both Purple Surgical and Win Billion (“Joint T
Instruction Requirement”);
U U
V V
A - 9 - A
B (4) Purple Surgical was required to transfer the Earnest B
Money/Purchase Price to an agreed escrow account within 48
C C
hours after both parties execute the SPA;
D D
(5) In the event that there was a dispute between Purple Surgical
E and Win Billion and Purple Surgical terminated the SPA, Jody E
had the right to tender the Earnest Money to a court of
F F
competent jurisdiction in an interpleader action; and
G G
(6) The Earnest Money was to be paid into the Trust Account of
H H
Jody, being account number 090-000639 at the Bank of the
I West in San Francisco, the United State of America (“Escrow I
Account”).
J J
K
24. To all intents and purposes, it was a genuine commercial K
transaction involving an enormous sum of money. Purple Surgical, Win
L L
Billion and Jody were bound by serious legal agreements whereby their
M respective positions are safeguarded. M
N 25. On 22 May 2020, Purple Surgical transferred the Earnest N
Money from its Barclays Bank account into the Escrow Account. Purple
O O
Surgical has completed its payment obligation under the SPA in
P accordance with the Escrow Agreement. To its frustration, Purple Surgical P
soon found out that it was the only party which honoured the two
Q Q
agreements.
R R
26. By a letter dated 31 July 2020, Stephenson Harwood (“SH”),
S S
current solicitors for Purple Surgical, gave its notice of termination of the
T SPA on account of its non-delivery of the Masks constituting repudiation of T
the SPA. SH further demanded that the 1st Payment be refunded to Purple
U U
V V
A - 10 - A
B Surgical and a written confirmation be given by Win Billion to Jody about B
the termination of the SPA and the return of the balance of the Earnest
C C
Money in the Escrow Account to Purple Surgical.
D D
27. Win Billion did not give any response to these demands at all.
E E
28. SH had no idea as to what had happened to the Earnest Money
F F
and neither Jody nor Mr Wu was forthcoming. Immediately before and
G after the commencement of these proceedings on 18 September 2020, G
Purple Surgical obtained an ex parte order of DHCJ Man SC dated 18
H H
September 2020 containing a Mareva injunction against all the defendants
I to this action, together with ancillary disclosure orders by the order of Mr I
Justice Wilson Chan dated 25 September 2020. Purple Surgical, Mr Wu
J J
and Smart Up opposed the continuation of the Mareva injunction at an inter
K partes hearing before Mr Recorder Houghton SC. K
L L
29. By his Judgment dated 24 February 2021, Mr Recorder
M Houghton SC ordered that the injunction orders be continued. The learned M
Recorder opined that Purple Surgical was entitled to Mareva relief and a
N N
proprietary injunction against Mr Wu and Smart Up in respect of the
O proceeds of the 1st Payment on the basis that these represent proceeds of O
monies paid pursuant to a fraud instigated prior to those monies being paid
P P
by Purple Surgical.
Q Q
30. In addition, as elaborated below, Purple Surgical commenced
R a legal action in the United States of America against Jody, Win Billion R
S
and Mr Wu (“the US Action”) in August 2020. As a result of the S
disclosure orders ancillary to the Mareva injunction, and the three Norwich
T T
Pharmacal orders subsequently obtained by Purple Surgical together with
U U
V V
A - 11 - A
B the further discovery in the US Action 1, Purple Surgical has been able to B
trace the transfers of the Earnest Money out of the Escrow Account and
C C
from Win Billion’s bank accounts. All these transfers are well documented
D and no issues about any of them was raised at the trial. D
E 31. Ms Lam has provided me with a fund flow diagram showing E
all the transfers. Mr Zhu has confirmed the accuracy of the fund flow
F F
diagram. A copy of the fund flow diagram is annexed to this Judgment and
G G
its content is self-explanatory.
H H
32. Basically, there were four layers of payments and I shall focus
I on the first three layers for the present purposes. I
J J
33. After receipt of the Earnest Money, Jody released the 1st
K
Payment to Win Billion on 2 June 2020 pursuant to the SPA. This turns out K
to be the only legitimate and duly authorised transfer in accordance with
L L
the SPA and the Escrow Agreement.
M M
34. In spite of the lack of authorisation of Purple Surgical, on the
N instruction of Win Billion, unbeknownst to Purple Surgical, Jody made the N
following transfers of funds out of the Escrow Account.
O O
P 35. On 29 May 2020, Jody transferred USD 2 million to P
Homesum, USD4,990,000 to Strongjet and USD500,000 to Skyin
Q Q
Development LLC.
R R
S S
1
A Norwich Pharmacal Order made by Anthony Chan J against UOB in HCMP 1237/2020 on 21 August
2020 concerning the whereabouts of the 1st Payment received in the UOB Account of Win Billion; a
T Norwich Pharmacal Order made by DHCJ Winnie Tsui in HCMP 689/2021 dated 4 June 2021 concerning T
the payment of USD2 million to Homesun Technology Co Ltd (“Homesun”) by Jody and lastly a
Norwich Pharmacal Order made by DHCJ Leung in HCMP 32/2022 dated 9 February 2022 concerning
U the payments made by Homesun. U
V V
A - 12 - A
B 36. On 2 June 2020, Jody transferred to Sepideh Madahian a sum B
of USD360,000. On 4 June 2020, he transferred to Paulo Alexandre
C C
Salvador Leitao a sum of USD500,000.
D D
37. Lastly, on 9 June 2020, Jody transferred to Win Billion a sum
E of USD 3 million. E
F F
38. All these transfers were procured by Win Billion purportedly
G through one Mr Tony Xie (“Tony”), whom Mr Wu alleges to be his G
business partner. On diver dates, Tony emailed to Jody to make requests
H H
for transfers to designated recipients with their account details. Jody,
I without any instruction or confirmation of Purple Surgical and in breach of I
the Joint Instruction Requirement, made such transfers pursuant to the
J J
requests of Tony.
K K
39. Upon receipt of the total sum of USD12,450,000 out of the
L L
Earnest Money, Win Billion made the payments out of its UOB Account.
M These payments are set out in the table below (taken from Ms Lam’s M
Opening Submissions):
N N
No Date Description Withdrawals Deposits
O (USD) (USD) O
1 2 June 2020 Receipt of the 1st $9,449,988.54
P Payment from the P
Escrow Account
Q 2 3 June 2020 Transfer to Mr $413,650.47 Q
Wu
R
3 4 June 2020 Transfer to Smart $100,000.00 R
Up
4 4 June 2020 Transfer to $6,525,023.27
S S
Strongjet
5 5 June 2020 Transfer to 3M $247,545.25
T Georgia LLC T
U U
V V
A - 13 - A
B 6 10 June 2020 Receipt of $2,999,988.54 B
Earnest Money
from the Escrow
C C
Account
7 11 June 2020 Receipt of funds $9,496.54
D D
8 11 June 2020 Transfer to Phase $1,000,000.00
Scientific
E International Ltd E
("Phase
F Scientific") F
9 11 June 2020 Transfer to Mr $1,000,000.00
G Wu G
10 12 June 2020 Transfer to Mr $775,694.89
H
Wu H
11 15 June 2020 Transfer to Phase $1,000,000.00
Scientific
I I
12 16 June 2020 Return of funds $247,471.04
from 3M Georgia
J LLC J
13 23 June 2020 Transfer to Mr $452,488.69
K Wu K
14 26 June 2020 Transfer to Mr $129,265.77
L Wu L
15 30 June 2020 Transfer to $66,000.00
M Advanced M
Fabrics Factory
Company
N N
16 2 July 2020 Transfer to Mr $517,129.93
Wu
O O
17 3 July 2020 Transfer to Mr $478,361.99
Wu
P P
Q Q
40. All these transfer activities are evidenced by the bank
R R
statements of the UOB Account and are not disputed.
S S
41. Mr Wu personally received a total sum of USD3,766,591.74 in
T T
his two bank accounts. One is with the Bank of China and the other one is
U with OCBC. U
V V
A - 14 - A
B Purple Surgical’s partial recovery of the Earnest Money B
C 42. Mr Sharpe in his supplemental witness statement gave an C
account of Purple Surgical’s partial recovery of the Earnest Money since
D D
the termination of the SPA. His evidence is uncontroversial and not
E challenged. E
F F
43. First, upon a joint application of Purple Surgical and Strongjet,
G Master Hui made an order dated 17 November 2021 that the sum of G
USD4,989,981.60 together with any interest accruing thereon being held in
H H
court be paid out to Purple Surgical. Pursuant to this order, on 9 December
I 2021, Purple Surgical received a cheque of a total sum of I
USD4,991,967.39 inclusive of interest from the court.
J J
K
44. By the default judgment entered by Mr Recorder William K
Wong SC dated 14 October 2022, Purple Surgical is entitled to recover
L L
from Strongjet the principal sum of USD6,525,000 together with interest
M thereon at different rates for different periods until payment. Eventually, a M
payment of the sum of USD6,595,992.89 (inclusive of interest) out of court
N N
was made to Purple Surgical in satisfaction of the default judgment.
O O
45. Further recovery from Strongjet was made by way of several
P garnishee applications. A total sum of USD344,829.61 was recovered. P
Q Q
46. On the other hand, Phase Scientific commenced an
R interpleader action under HCMP 200/2022 in respect of the total amount of R
USD 2 million received from Mr Wong out of the Escrow Account. Both
S S
SH on behalf of Purple Surgical and Win Billion Investment Holdings
T Limited which was incorporated in the Cayman Islands (“Win Billion T
Cayman Islands”) asked Phase Scientific for the return of the said sum.
U U
V V
A - 15 - A
B 47. On 29 June 2022, Phase Scientific paid USD1,999,996.12 (i.e. B
the USD 2 million minus bank charges) into court pursuant to the order of
C C
Master Matthew Leung dated 14 June 2022 pending the determination of
D the issue as to the entitlement of the said sum as between Purple Surgical D
and Win Billion Cayman Islands.
E E
48. Subsequently, Win Billion Cayman Islands defaulted in filing
F F
its defence to the claim of Purple Surgical in the interpleader proceedings.
G G
Purple Surgical obtained judgment as a result and Master J Wong ordered
H
that a sum of USD1,999,996.12 inclusive of interest of USD31,329 be paid H
out of court to Purple Surgical less USD42,696 being the assessed costs of
I I
Phase Scientific.
J J
49. On the other hand, one Ms Leung Yuk Yee on diver dates
K received a total amount of HK$2,700,522 from Mr Wu and one Ms Wu K
Wong Lai Fong on diver dates received a sum of HK$1,195,000 from Mr
L L
Wu. On 22 September 2023, Purple Surgical commenced a High Court
M action under HCA 1530/2023 against both Ms Leung and Ms Wu to M
recover the money they had received from Mr Wu.
N N
O 50. On 12 December 2023, Purple Surgical and Ms Leung reached O
a settlement agreement. Ms Leung paid Purple Surgical HK$620,000 as
P P
full and final settlement of her liabilities to Purple Surgical arising from her
Q receipt of a portion of the Earnest Money. Q
R 51. Now I should examine the dealings between Purple Surgical R
S
and Jody. Before the termination of the SPA, Purple Surgical became S
suspicious about Jody. On 17 July 2020, SH made a written request to Jody
T T
for documentary proof of the balance in the Escrow Account.
U U
V V
A - 16 - A
B 52. On 20 July 2020, Jody emailed to SH and said that the balance B
st
of the Earnest Money (after the 1 Payment) remained to be in the Escrow
C C
Account but he was in Florida and had no access to the Escrow Account.
D Jody, thus, was able to provide any documentary proof. D
E 53. As narrated above, the reply of Jody cannot be truthful. E
F F
54. SH further sent letters to Jody on 4 and 11 August 2020 to
G press for documentary proof of the balance in the Escrow Account but Jody G
did not reply to these letters.
H H
I
55. Feeling increasingly suspicious, Purple Surgical instructed I
Sheppard Mullin, its legal representatives in the United States, to deal with
J J
Jody. On 17 August 2020, Sheppard Mullin contacted Jody by phone and
K
again Jody maintained that he was still out of town and could not have K
access to the bank information of the Escrow Account in California. Jody
L L
assured Sheppard Mullin that the 2nd Payment remained in the Escrow
M Account. However, Sheppard Mullin’s subsequent request for a written M
confirmation was simply ignored by Jody.
N N
56. Purple Surgical through Sheppard Mullin started the US
O O
Action against Win Billion and Mr Wu in the Superior Court of the State of
P California for the County of San Francisco on 25 August 2020. Jody was P
later joined as a defendant.
Q Q
R 57. By the US Action, Purple Surgical managed to freeze the R
Escrow Account and obtain some information of the Escrow Account. The
S S
Bank of the West disclosed to Purple Surgical that the balance in the
T Escrow Account was only USD1,110,996.96. This showed that Jody had T
previously given false information to Purple Surgical, to say the least.
U U
V V
A - 17 - A
B 58. In November 2020, the California Court granted Purple B
Surgical’s application for disclosure of all the records relating to the
C C
Escrow Account by the Bank of the West despite the opposition of Win
D Billion. D
E 59. On 16 February 2022, Purple Surgical reached a settlement E
agreement with Jody and his insurers. The settlement agreement was
F F
approved by the California Court on 15 April 2022. Upon payment of
G G
USD3,925,000 by Jody to Purple Surgical in accordance with the terms of
H
their settlement agreement on 20 May 2022, the US Action as against Jody H
was dismissed.
I I
60. Ms Lam has helpfully provided this court with the following
J J
table giving a summary of all the recoveries and the remaining loss of the
K Earnest Money: K
DESCRIPTION PRINCIPAL INTEREST
L L
Purple Surgical's Earnest Money USD27,000,000
M M
Less recoveries of the Earnest
N Money: N
The sum recovered from Strongjet on 9 (USD4,989,981) (USD1,985)
O O
December 2021 pursuant to the Order
P of Master Hui dated 17 November 2021 P
The sum recovered from Strongjet on (USD6,525,000) (USD70,992)
Q Q
11 November 2022 pursuant to default
R judgment/Order of Recorder William R
Wong SC dated 14 October 2022,
S S
together with interest payments:
T Garnishee application (HSBC) (USD340,019) T
Garnishee application (HSBC - 2nd) (USD108)
U U
V V
A - 18 - A
B Garnishee application (Industrial Bank) (USD2,862) B
Garnishee application (Bank of China) (USD1,838)
C C
The sum recovered from Phase (USD1,957,300) (USD31,329)
D Scientific in HCMP 200/2022 on 9 D
February 2023
E E
The sum recovered from Ms Kimberly (USD79,487)
F Leung on 12 December 2023 in Sum of F
settlement of Purple Surgical’s claims HK$620,000 at
G G
against Ms Kimberley Leung in HCA exchange rate of
H 1530/2023 USD1 = HK$7.80 H
The sum recovered from Jody's insurer (USD3,925,000)
I I
on 20 May 2022 in settlement of Purple
J Surgical’s claim against Jody in the US J
Action
K K
Total recoveries (USD17,476,768) (USD449,127)
L L
Purple Surgical’s outstanding claims USD9,523,232
M for Earnest Money M
N N
O O
61. Based on the foregoing facts, Purple Surgical makes its claims
P against Win Billion and Mr Wu based on the following causes of action: (1) P
breach of trust, (2) breach of fiduciary duty, (3) deceit and fraudulent
Q Q
misrepresentation; (4) dishonest assistance; (5) knowing receipt; (6) unjust
R enrichment; and (7) conspiracy. R
S S
62. As against Win Billion, Purple Surgical has an additional
T cause of action, namely, breach of contract. T
U U
V V
A - 19 - A
B 63. As against Smart Up, Purple Surgical’s claim is based on (1) B
conspiracy, (2) dishonest assistance, (3) knowing receipt; and (4) unjust
C C
enrichment.
D D
64. I should first focus on Purple Surgical’s claim of deceit and
E fraudulent misrepresentation against Win Billion and Mr Wu and the E
conspiracy claim against Smart Up and them. Ms Lam confirms that the
F F
primary contention of Purple Surgical is that there was a conspiracy among
G G
Win Billion, Mr Wu and Smart Up toinjure Purple Surgical by fraud.
H H
Purple Surgical’s pleaded case of deceit and fraudulent misrepresentation
I and its claim based on conspiracy to injure I
J J
65. In gist, Purple Surgical’s pleaded case of deceit and fraudulent
K
misrepresentation against Win Billion and Mr Wu can be summarised as K
follows.
L L
66. Win Billion and Mr Wu induced Purple Surgical to pay the
M M
Earnest Money/Purchase Price to the Earnest Account by preparation of the
N SPA and the Escrow Agreement and the representation (“the N
Representation”) that Win Billion had a genuine intention to perform its
O O
obligations under the SPA and the Escrow Agreement (in particular the
P Joint Instruction Requirement), the prime duty being the supply of the P
Masks originating from 3M to Purple Surgical.
Q Q
R 67. Purple Surgical claims to have been induced by the R
Representation and acted on the Representation to enter into the SPA and
S S
the Escrow Agreement and thereafter paid the Earnest Money into the
T Escrow Account. T
U U
V V
A - 20 - A
B 68. Purple Surgical pleads that Win Billion and Mr Wu made the B
Representation fraudulently in that they knew that the Representation was
C C
false or were reckless, not caring whether it was true or false. It relies on
D the following particulars: D
E (1) At no stage did Win Billion and/or Mr Wu provide any E
independently verifiable evidence to Purple Surgical that Win
F F
Billion had procured any of the Masks;
G G
(2) Win Billion and/or Mr Wu misrepresented to Purple Surgical
H H
that Win Billion had paid 3M for the Masks when they knew
I this was false; I
J J
(3) Win Billion and/or Mr Wu repeatedly delayed inspection of
K
the Masks by Purple Surgical and delayed delivery of the K
Masks with ever-changing explanations;
L L
(4) Win Billion and/or Mr Wu introduced Jody to Purple Surgical
M M
to act as the Escrow Agent. They then procured Jody to pay
N out of the Escrow Account the Earnest Money other than the N
1st Payment in breach of the Joint Instruction Requirement
O O
without the knowledge or approval of Purple Surgical; and
P P
(5) Despite the non-delivery of any of the Masks, Win Billion has
Q Q
never repaid any of the 1st Payment or the other traceable
R proceeds of the Earnest Money to Purple Surgical or procured R
Jody to repay any of the Earnest Money to Purple Surgical. Mr
S S
Wu and Smart Up have also failed to repay any of the sums
T they received that are traceable proceeds of the Earnest Money, T
but have used such sums for their own benefit.
U U
V V
A - 21 - A
B 69. For the conspiracy claim made against Win Billion, Mr Wu B
and Smart Up, Purple Surgical pleads that they wrongfully and with intent
C C
to injure Purple Surgical by unlawful means conspired and combined
D together to defraud Purple Surgical. Purple Surgical relies on the same D
particulars and the following additional matters:
E E
(1) Mr Wu being the sole director of Win Billion knew that Win
F F
Billion never had a genuine intention to perform its
G G
obligations under the SPA and Escrow Agreement;
H H
(2) Tony and/or Mr Wu on behalf of Win Billion gave instructions
I to Jody to make payments out of the Escrow Account to Win I
Billion and Strongjet in breach of the Joint Instruction
J J
Requirement without the knowledge or approval of Purple
K Surgical; K
L L
(3) Mr Wu gave instructions on behalf of Win Billion for payment
M out from the UOB Account to, among other persons, Mr Wu, M
Strongjet and Smart Up; and
N N
(4) Win Billion, Mr Wu and Smart Up were aware that Purple
O O
Surgical had paid the Earnest Money as a result of the
P fraudulent misrepresentations of Win Billion and/or Mr Wu. P
Q Q
Purported Defence to Purple Surgical’s claim in deceit and fraudulent
R misrepresentation and conspiracy claim R
S S
70. In their Amended Defence dated 5 October 2021, Win Billion,
T
Mr Wu and Smart Up deny Purple Surgical’s claim in deceit and fraudulent T
misrepresentation and its conspiracy claim. They aver that Win Billion and
U U
V V
A - 22 - A
B Mr Wu had a genuine intention to fulfil the obligations of Win Billion B
under the SPA.
C C
71. They even complain that Purple Surgical wrongfully
D D
terminated the SPA. It is asserted that under the SPA, time was not of the
E essence for the delivery of the Masks and Win Billion’s obligation was E
only to deliver the Masks within a reasonable time. They contend that the
F F
SPA was terminated prematurely.
G G
72. They plead the following account of what Win Billion had
H H
purportedly done to fulfil the SPA.
I I
73. First, by way of background, Mr Wu alleged one Wang Yin
J J
Ying (“Yin Ying”) who was a lawyer in the Mainland informed Jessica Qu
K
and him that a party (Purple Surgical) was interested in purchasing the K
Masks on or around 17 May 2020. Jessica Qu was a colleague of Mr Wu
L L
and an executive director of Starlight International Capital Group Limited
M solely owned by Mr Wu. M
N 74. On the same day, a WeChat message group (“the WeChat N
Group”) was formed among Mr Wu, Yin Yang, Jessica Qu and other
O O
intermediaries to facilitate discussion concerning the intended sale of the
P Masks to Purple Surgical. P
Q Q
75. On the other hand, before the entry of the SPA, in May 2020,
R Tony was referred to YG Tech Ltd (“YG Tech”), a South Korean company, R
purported to be a distributor of 3M products including the Masks by his
S S
business associate known as Mr Xu.
T T
U U
V V
A - 23 - A
B 76. At or around the same time, Win Billion contacted Utility B
Sugar Trading Ltd (“Utility Sugar”) which is a local company. There was
C C
a draft agreement between Utility Sugar and Win Billion dated 19 May
D 2020 whereby Utility Sugar represented that it could source the Masks D
from YG Tech.
E E
77. Win Billion was therefore convinced that YG Tech could
F F
supply the Masks to Win Billion for the purpose of the SPA. On 25 May
G G
2020, Win Billion entered into a sale and purchase agreement with YG
H
Tech (“YG Tech SPA”) whereby YG Tech agreed to sell to Win Billion H
the Masks at the price of USD 14.5 million with part of contract payment
I I
of USD247,500 (“the Contract Payment”).
J J
78. In the YG Tech SPA, it was expressly provided that all
K financial, commercial and other information connected with the agreement K
shall be considered confidential. It was further provided that the parties
L L
shall take all necessary and reasonable measures to prevent divulgence of
M the received information to any other parties and only under mutual M
agreement the parties shall be entitled to disclose the information to other
N N
parties where necessary.
O O
79. On 2 June 2020, YG Tech issued a proforma invoice bearing
P P
the “3M” logo and purportedly from 3M Co. Ltd in the United Kingdom to
Q Win Billion for the Contract Payment (“the YG Tech Invoice”). Q
R 80. On 5 June 2020, Win Billion remitted the Contract Payment R
S
from the UOB Account to 3M Georgia LLC in its bank account with the S
Bank of Georgia (“the 3M Remittance”).
T T
U U
V V
A - 24 - A
B 81. On or around 12 June 2020, YG Tech showed to Win Billion B
an email purportedly sent from 3M to Mr Yoo of YG Tech whereby 3M
C C
informed YG Tech that shipment in the UK would be delayed until further
D notice “due to a last minute cancellation of one key component for the D
product from the raw material supplier.”
E E
82. On 15 June 2020, YG Tech informed Win Billion that it would
F F
stop signing the contract and a new company, Dumb & Dumber Co. Ltd
G (“D & D”) would sign a new agreement with Win Billion for the supply of G
H
the Masks in its stead, which would be guaranteed by YG Tech. H
I 83. On 16 June 2020, the 3M Remittance was returned to Win I
Billion. It was stated in the written advice from UOB dated 11 June 2020
J J
that the payment was returned due to “internal policy”.
K K
84. As a result, on the same day, Win Billion entered into a new
L L
sale and purchase agreement with D & D for the supply of the Masks at the
M price of USD 14.5 million (“the D & D SPA”). M
N 85. The terms of the D & D SPA are by and large identical to N
those of the YG Tech SPA.
O O
P 86. After the signing of the D & D SPA, Tony on behalf of Win P
Billion dealt with Erika Cheng (“Erika”) who was a representative of YG
Q Q
Tech to complete the transaction.
R R
87. On 17 June 2020, Erika provided an invoice for USD725,000
S S
to Purple Surgical. Erika represented to Tony that D & D had provided an
T
initial deposit of USD247,500 to 3M and further presented an invoice T
U U
V V
A - 25 - A
B purportedly issued by 3M to D & D dated 16 June 2020 (“D & D 3M B
Inovice”).
C C
88. Moreover, Purple Surgical claims to have received the
D D
following emails (“the Emails”) purportedly sent by 3M to Mr Yoo
E providing updates of the delivery progress of the Masks: E
F F
(1) By an email dated 18 June 2020, Mr Yoo was informed that
G shipment will be ready on 25 June 2020 and delivery to the G
airport in Birmingham would take place before 30 June 2020.
H H
I
(2) By an email dated 30 June 2020, Mr Yoo was informed that I
there were more delays to the shipment due to the fact that
J J
valves of the Masks provided by an alternative supplier did not
K
pass quality control. The earliest possible delivery time would K
be around mid-July 2020.
L L
(3) By an email dated 15 July 2020, Mr Yoo was informed that
M M
SGS inspection would be arranged and shipment would take
N place early the week after. N
O O
(4) By an email dated 27 July 2020, Mr Yoo was informed that
P in-house testing was still ongoing due to some testing P
equipment not being available, and further updates on the
Q Q
progress would be provided “these few days.”
R R
89. It is pleaded that Win Billion and Mr Wu had taken reasonable
S S
steps and acted in good faith to provide all available updates to Purple
T
Surgical on the status of the Masks and the SPA based on the information T
provided by YG Tech and D & D. All the Emails and the 3M Remittance
U U
V V
A - 26 - A
B were provided to Purple Surgical albeit they were heavily redacted due to B
Win Billion’s confidentiality obligations under the YG Tech and D & D
C C
SPAs.
D D
90. It should be noted that all these documents are controversial.
E E
91. The defence goes on to say that despite the wrongful
F F
termination of the SPA by Purple Surgical, Win Billion continued to make
G efforts to source the Masks for Purple Surgical. First, on 7 August 2020, G
Purple Surgical advanced USD725,000 to D & D as deposit for the Masks
H H
after YG Tech/ D & D had represented to Tony that the Masks had been
I produced and delivered to Birmingham in late July 2020. I
J J
92. However, on 11 September 2020, D & D informed Win
K
Billion that the stocks of Masks originally reserved to Win Billion had been K
resold already and an additional deposit was required from Win Billion for
L L
a new order.
M M
93. Eventually, Mr Wu procured Sing Kong Supply Chain
N Management Company Limited (“Sing Kong”) to supply to it 850,220 N
units of the Masks for the purpose of the sale of the same to Purple Surgical.
O O
Inspection of the same by Bureau Veritas BIVAC Asian CRE (Shanghai)
P Inspection Co., Ltd was completed on 9 November 2020. Upon completion P
of such inspection, Win Billion agreed to purchase the units of Masks from
Q Q
Sing Kong in order for the same to be supplied to Purple Surgical. It is
R pleaded that the intention of Win Billion and Mr Wu has always been to R
S
supply the Masks to Purple Surgical pursuant to the SPA. S
T T
U U
V V
A - 27 - A
B 94. By reason of their genuine intention to complete the B
transaction, there cannot be any conspiracy among Win Billion, Mr Wu and
C C
Smart Up to injure Purple Surgical.
D D
Relevant legal principles
E E
95. Before examining and evaluating the material evidence, it is
F F
helpful to remind myself of the legal principles germane to these pleas of
G Purple Surgical. G
H H
96. The tort of deceit consists of the following elements:
I I
(1) A false representation by X to Y;
J J
(2) the knowledge of X that the representation is false or the
K K
absence of belief in its truth, or the recklessness as to its truth;
L L
(3) the intention of X that Y would rely on the representation;
M M
(4) the reliance of Y on the representation; and
N N
(5) Y’s acting to his detriment as a result of such reliance.
O O
P See: Tort Law & Practice in Hong Kong (3rd ed), §23.001 P
Q 97. What a person promises to do in future can be a representation Q
of his present intention for future conduct. This comes within the ambit of
R R
an existing fact: see Edgington v Fitzmaurice (1885) 29 Ch D 459 at p.483.
S S
98. In Edgington, Bowen LJ said this at pp.481-482,
T T
“In order to sustain his action he must first prove that there was a
U statement as to facts which was false; and secondly, that it was U
V V
A - 28 - A
B
false to the knowledge of the Defendants, or that they made it not B
caring whether it was true or false. For it is immaterial whether
they made the statement knowing it to be untrue, or recklessly,
C without caring whether it was true or not, because to make a C
statement recklessly for the purpose of influencing another person
is dishonest.”
D D
99. Fraud is proved upon finding of deceit. When it is shown that
E E
a false representation has been made knowingly, or without belief in its
F truth or recklessly, careless whether it be true or false, a claim in fraud is F
established: Derry v Peek (1889) 14 App 337.
G G
H 100. A director attracts personal liability for his own fraud where H
he was effectively the mind of the company and where he made the
I I
fraudulent representation knowingly, even if the company itself is liable for
J the deceit: Contex Drouzhba Ltd v Wiseman [2008] BCC 301 at §14. J
K K
101. In Pido v Compass Technology Co Ltd [2010] 2 HKLRD 537,
L
§13-17, Ma CJHC (as he then was), after a review of the authorities L
including Lonrho Plc v Fayed [1992] 1 AC 448, set out the essential
M M
elements of a claim based on conspiracy: (i) there is an agreement between
N two or more persons; (ii) there is an intention to injure the plaintiff by N
unlawful means whether or not it is the predominant purpose; (iii) the acts
O O
were carried out pursuant to the agreement and the stated intention; and (iv)
P there is damage caused to the plaintiff as a result. P
Q 102. In Apple Inc v Proview International Holdings Ltd, Q
HCA739/2010 (unreported, 14 July 2011), Poon J (as he then was) said this
R R
at §32,
S S
“A company, being a separate legal person, can conspire with its
T directors; and the knowledge of the company may be found in a T
director who has management or control for the transaction or act
in question.”
U U
V V
A - 29 - A
B Discussion B
C Comments on parties’ evidence generally C
D D
103. Only Mr Sharpe and Mr Wu testified in the witness box. The
E evidence of Mr Sharpe was not subject to any meaningful challenges in E
cross-examination. His evidence was largely supported by
F F
contemporaneous documents. Mr Sharpe sounded confident in his answers
G and appeared to be forthcoming in his oral testimony. I am satisfied that he G
was a reliable and truthful witness and I have no difficulties in accepting
H H
his evidence in its entirety.
I I
104. In stark contrast, I can hardly have any confidence in the
J J
testimony of Mr Wu. For those matters of peripheral concern not covered
K
by any evidence of Purple Surgical, Mr Wu was articulate and eloquent and K
he tended to give lengthy and detailed answers.
L L
105. However, Mr Wu was clearly evasive on important matters
M M
and was unable to answer pertinent questions. He did not hesitate to shirk
N responsibility by saying that Tony was the key figure acting on behalf of N
Win Billion in procuring the execution of the SPA and the performance of
O O
the same and it was Tony who dealt directly with the suppliers.
P P
106. Inconsistencies between Mr Wu’s oral evidence and his
Q Q
witness statements, his disposition in the US Action and indisputable
R contemporaneous documents abound. Mr Wu did not appear to be troubled R
by such inconsistencies when challenged cross-examination. He often
S S
replied that he had no further explanation and more often he blamed his
T former solicitors. T
U U
V V
A - 30 - A
B 107. Mr Wu was also unable to produce documents of obvious B
importance to prove the defence case. The authenticity of those documents
C C
he managed to provide was seriously, and quite righty, challenged. Mr Wu
D was never short of excuses and he often found his former solicitors a D
convenient scapegoat.
E E
108. I shall delve into his evidence below. At this juncture, I should
F F
make it clear that I am not prepared to accept any of Mr Wu’s evidence
G G
unless it is collaborated by credible contemporaneous documents.
H H
Evidence before the entry of the SPA and the Escrow Agreement
I I
109. Before deciding on the bona fide of Win Billion in procuring
J J
the creation of the SPA and the Escrow Agreement, it is necessary to
K
examine all the background facts about Mr Wu, Tony and Win Billion. K
L 110. Mr Wu first worked in the insurance industry after graduation L
from the university. He became the District Director of Prudential Hong
M M
Kong Limited. He quitted in 2010 and thereafter has engaged in various
N business ventures. He set up an insurance brokerage firm. In 2015, he set N
up a capital management company in Hong Kong known as Starlight. He
O O
has solid experience in the business world and should not be unfamiliar
P with handling commercial contracts. P
Q Q
111. Purple Surgical was able to find out more about the personal
R financial situation of Mr Wu at the relevant time. Mr Wu actually had some R
legal actions to deal with and his hands should be quite full.
S S
T
112. First, on 14 November 2017, Manulife (International) Limited T
(“Manulife”) an action against Mr Wu under HCA 2605/2017 to claim for
U U
V V
A - 31 - A
B unpaid loans and advances during his employment in the amounts of B
HK$1,774,236.53 plus interest and costs. Judgment was entered against Mr
C C
Wu in or about March 2018.
D D
113. On 24 of September 2019, on the strength of the judgment
E debt, Manulife issued a bankruptcy petition under HCB 5819/2019 against E
Mr Wu. In the petition, it was alleged that Mr Wu only paid HK$450,000
F F
toward the judgment debt leaving a balance of HK$1,526,537.00
G G
unsatisfied to.
H H
114. On the other hand, one Choy Ka Man (“Choy”) issued a writ
I of summons in DCCJ 1886/2019 on 12 April 2019 against Mr Wu to claim I
for repayment of a personal loan of HK$400,000 advanced to him in 2017.
J J
K
115. Choy obtained judgment against Mr Wu on 3 July 2019. Mr K
Wu was only able to pay HK$120,000 in partial satisfaction of the
L L
judgment debt. In the subsequent enforcement action, Choy obtained a
M charging order dated 10 October 2019 against the residential property of M
Mr Wu. The charge was duly registered on 24 October 2019.
N N
116. To get rid of the bankruptcy petition and the charge against his
O O
residential property, Mr Wu took out a second legal charge over his
P residential property with Fortune Capital Strategy Limited (“Fortune P
Capital”) on 7 January 2020. Fortunate Capital apparently granted a credit
Q Q
facility of HK$3.83 million to Mr Wu.
R R
117. With this credit facility, Mr Wu managed to get Manulife to
S S
withdraw the bankruptcy petition on 13 January 2020 and to cause Choy to
T discharge the charge against his residential property on 23 January 2020. T
U U
V V
A - 32 - A
B 118. Mr Wu was only able to pay off the outstanding loan owed to B
Fortune Capital after the receipt of a portion of the Earnest Money.
C C
119. In cross-examination, after being asked about all these legal
D D
actions and financial liabilities, Mr Wu agreed with Ms Lam that he was in
E fact in dire financial straits at the time of the SPA. E
F F
120. Win Billion did not fare better. It was incorporated in May
G 2018. Mr Wu accepted that there were not many profits from any business G
in the year of 2020.
H H
I
121. Mr Wu asserted that there had never been any accounts, I
audited or not, prepared for Purple Surgical. He explained that there were
J J
not many transactions and only a little profits, less than hundreds of
K
thousands, had been made. Most of such deals were completed by Tony. K
L 122. Mr Wu said that in light of the Covid-19 pandemic in 2020, L
Win Billion started trading in medical equipment including non-woven
M M
fabrics and PPE products by the supply of such products through other
N third-party distributors and manufacturers. N
O O
123. However, there is a complete lack of documents evidencing
P the alleged business activities. P
Q 124. Win Billion holds accounts with two banks, namely, UOB and Q
DBS Bank (Hong Kong) Limited (“the DBS Account”). It can be seen
R R
from the bank statements of the UOB Account that as at 31 May 2020, the
S S
credit balance of the account is about HK$350,000.
T T
125. Win Billion has not produced the bank statements showing the
U balance in the DBS Account prior to the entry of the SPA. U
V V
A - 33 - A
B 126. I now turn to Tony. Little is known about his personal B
background. The pleaded case is that Tony was the business partner of Mr
C C
Wu and he acted on behalf of Win Billion. On the other hand, Mr Wu in his
D affirmation stated that Win Billion was mainly an investment vehicle for D
overseas business established by Tony and him.
E E
127. According to Mr Wu, Tony has high-level business
F F
connections with Chinese national corporations. He relied on Tony to assist
G G
Win Billion in sourcing sellers and/or distributors of medical equipment.
H H
128. Mr Sharpe did not have any communication with Tony. Mr
I Sharpe did not know that Tony was involved in the transaction. I
J J
129. For Jody, Mr Wu made an obvious effort to distance himself
K
from him. In the pleaded case, it is asserted that Jody was not a legal K
representative of Win Billion and/or Mr Wu. They had never represented to
L L
Purple Surgical that Jody acted on behalf of Win Billion and Mr Wu.
M M
130. In his evidence, Mr Wu claimed that Tony introduced Jody to
N Win Billion to act as the Escrow Agent under the SPA. However, Mr Wu N
denies that Jody acted for Win Billion. He claims that he had never spoken
O O
to him personally and he relied on Tony to communicate with Jody. It was
P Tony who gave instructions to Jody for making the payments out of the P
Escrow Account.
Q Q
R 131. In the messages of the WeChat Group generated on or about R
17 May 2020, it can be seen that Mr Wu referred Jody as his lawyer and it
S S
was Mr Wu who suggested that payment should be made to the escrow
T account of “my lawyer”. T
U U
V V
A - 34 - A
B 132. On 22 May 2020, Mr Sharpe received an email from Jody. B
There, Jody referred Win Billion as his client.
C C
133. For completeness, Mr Wu called Ms Rosy Chan of SH on 7
D D
July 2020 and told her that Jody, his lawyer, had advised him not to speak
E to the solicitors of Purple Surgical. E
F F
WIN BILLION a bona fide supplier?
G G
134. Returning to the crux of the dispute, I find Mr Wu to be an
H H
untrustworthy witness being very economical with the truth. It is plain and
I
obvious to me that Mr Wu had no genuine intention whatsoever to cause I
Win Billion to perform the SPA and the Escrow Agreement when
J J
contracting with Purple Surgical for the following reasons.
K K
135. Firstly, it is inherently improbable that Win Billion and/or Mr
L Wu would delegate the task of fulfilling the SPA almost entirely to Tony L
and abstain from taking an active part in the transaction.
M M
N (1) Before the creation of the SPA, the financial condition of Mr N
Wu was poor. He was under serious stress in view of the legal
O O
actions against him and his home property was jeopardised.
P P
(2) The SPA was the biggest deal in his trading career. It came at
Q a time when he badly needed money. The resultant sizeable Q
profits made out of the SPA must be a strong incentive for Mr
R R
Wu to work tirelessly to ensure that the profits would
S S
eventually go to his pocket so that he could break away from
T
his financial plight. T
U U
V V
A - 35 - A
B (3) On the other hand, Mr Wu, a seasoned businessman with B
extensive experience in handling commercial contracts, should
C C
know very well that if Win Billion was unable to complete the
D transaction, there would be grave legal and financial D
consequences and Win Billion would be liable to cover the
E E
loss of Purple Surgical which could be very substantial.
F F
(4) The Masks were rare commodities at that time when there was
G G
a huge demand of such products worldwide. Governments of
H
many countries all over the world took an active part in H
sourcing surgical masks for their citizens to combat Covid-19.
I I
This is exactly the case here and the Masks were for the NHS.
J
Mr Wu must be alive to the urgency of the need of the Masks J
too.
K K
(5) Against this background, fulfilment of the contractual duties
L L
under the SPA was no mean feat and it should indeed be a
M daunting task for Win Billion. Neither Mr Wu nor Win Billion M
had ever dealt in medical products before. Nor is there any
N N
evidence that Tony had ever handled similar sales and had any
O business relationship with 3M himself. There is no basis of O
any trust and confidence of Mr Wu in Tony that he could
P P
single-handedly source the Masks under such severe time
Q constraint. It is unbelievable that Mr Wu would simply give Q
Tony a free hand to complete the transaction.
R R
S (6) Tony was not even in the WeChat Group meaning that he was S
not involved at the initial stage. There is no reason why Mr
T T
Wu would refrain from liaising with the purported suppliers
U U
V V
A - 36 - A
B himself and just let Tony step in and take over the entire task B
of performing the SPA.
C C
136. Secondly, there is no reason why Win Billion and Mr Wu did
D D
not enlist assistance from Tony by way of either testifying at trial for them
E or disclosing more relevant documents to support the defence case. E
F F
(1) In cross-examination, Mr Wu agreed with Ms Lam that Tony
G had caused Win Billion, Mr Wu and Smart Up substantial loss G
by causing unauthorised transfers out of the Escrow Account.
H H
When Mr Wu was asked whether he had ever contemplated
I suing Tony, he said, rather perplexingly, that his bank account I
was frozen.
J J
K
(2) Mr Wu also said that he and Tony were still on speaking terms K
and Tony was still contactable. Mr Wu even claimed that
L L
Tony had a conference with him and his former solicitors and
M they discussed about preparation of a witness statement for M
this action. There is simply no reason why Mr Wu did not
N N
procure Tony to testify. Tony should be in the best position to
O explain what steps Win Billion had taken to perform the SPA O
with reference to all those documents produced by Win Billion.
P P
This would show that Win Billion was a bona fide supplier
Q under the SPA and his evidence would be fundamental to the Q
defence case.
R R
S
(3) Furthermore, Win Billion only disclosed a few texted S
messages exchanged between Tony and Mr Wu. And the
T T
disclosure seemed very cautious and selective. There should
U
be a large number of such materials and they must have very U
V V
A - 37 - A
B frequent communications during the currency of the SPA B
which represented the biggest business of their partnership.
C C
Their conversations would be very telling as to how they
D caused to Win Billion to perform the SPA. D
E (4) When asked about this inadequate disclosure, Mr Wu first E
claimed that he had lost his phone and thus he no longer had
F F
such messages. This is hardly acceptable. Even in the
G G
improbable event that there was no backup of such messages,
H
he could simply ask Tony to send him back all such messages H
to support the defence case.
I I
(5) And Mr Wu proffered another excuse. He was reminded that
J J
in his disposition made in the US Action, he claimed that he
K had given a vast amount of messages, WeChat messages and K
emails to his former solicitors. Mr Wu again blamed his
L L
former solicitors and claimed that due to their inexperience,
M they failed to disclose such documents in these proceedings. M
This is wholly unreasonable. Even his former solicitors for
N N
whatever reasons have failed to disclose such documents, his
O current solicitors no doubt should remedy the situation and O
seek to produce them to strengthen the defence case. This
P P
court suggested to Mr Wu that he might consider making an
Q application albeit late to disclose such material documents and Q
he did not do anything in this regard. His inaction is telling.
R R
He only made up excuses and he had no supportive documents
S S
to produce.
T T
(6) Ms Lam submits that due to the failure to call Tony as a
U witness and/or to produce documents which relate to his U
V V
A - 38 - A
B exchanges with Mr Wu, coupled with a lack of any plausible B
explanation for such a failure, this court is fully entitled to and
C C
ought to draw adverse inferences against Mr Wu, see Tjang
D Siu Thu v Profield Construction Engineering Ltd [2015] 5 D
HKC 22, §33; Wisniewski v Central Manchester Health
E E
Authority [1998] PIQR 324, 340; and Telings International
F Hong Kong Ltd v John Ho (CACV 10/2010, 22 October 2010), F
§79.
G G
H
(7) Her submission must be correct. I am satisfied that I could H
draw the inference that Tony, allegedly responsible for
I I
sourcing the Masks for the SPA, could not give any useful
J
evidence of his purported performance of SPA on behalf of J
Win Billion. There is evidently no such evidence. Win Billion
K K
never made any genuine effort to supply the Masks to Purple
L Surgical. L
M 137. Thirdly, the evidence produced by the defence relating to the M
sourcing of the Masks is dubious and does not bear scrutiny.
N N
O (1) The SPA involved a mega business deal. Win Billion O
contracted with Purple Surgical to supply the Masks in huge
P P
quantity originating from 3M, a reputable international
Q manufacturer for the use of a governmental medical institution Q
in England. It is only reasonable to expect Win Billion would
R R
make an all-out effort and deal with credible suppliers to fulfil
S its obligations under the SPA. The evidence of its purported S
sourcing effort is, however, hopelessly inadequate and utterly
T T
incredible.
U U
V V
A - 39 - A
B (2) Win Billion relied on YG Tech to supply the Masks. In the B
first place, even on its own case, the way Win Billion got rid
C C
of Utility Sugar and dealt with YG Tech directly for a bigger
D profit margin shows that the commercial morality of Win D
Billion was questionable.
E E
(3) YG Tech is in itself suspect. In his email sent to Mr Sharpe on
F F
13 June 2020, Mr Wu represented to Mr Sharpe that Win
G G
Billion had sourced the Masks through a Korean company
H
called YG Tech which was an official 3M distributor in South H
Korea. He added that YG Tech was “our associated company”.
I I
Clearly, Mr Wu did not tell Mr Sharpe the truth. To start with,
J
if the YG Tech SPA was signed on 25 May 2020, there is no J
reason why Mr Wu only disclosed the identity of YG Tech to
K K
Purple Surgical almost three weeks later. Moreover, Mr Wu
L had to accept that YG Tech was not in any way associated L
with Win Billion. The investigation carried out by Purple
M M
Surgical through SH reveals that YG Tech is merely a sole
N trader registered in its Certificate of Business Registration N
dated 16 March 2020 as a lamp and lightbulb business. When
O O
confronted with this finding, Mr Wu asserted that YG Tech
P had changed its business and now traded in medical products. P
I find it improbable that YG Tech could change its business
Q Q
into an entirely different area and thence become a 3M
R authorised distributor in South Korea 2 months later. This R
change of business should be reflected in its Certificate of
S S
Business Registration too. I cannot accept Mr Wu’s assertion.
T T
U U
V V
A - 40 - A
B (4) It follows that YG Tech could never be a supplier of the B
Masks. All the alleged subsequent communications between
C C
YG Tech and 3M including the Emails must be falsified
D documents. Mr Wu forwarded such communications to Mr D
Sharpe to make him believe that Win Billion was performing
E E
the SPA while dissipating the Earnest Money for his personal
F use. F
G (5) The whole story of Win Billion’s performance of the SPA is G
H
beyond belief. Given the analysis above, it is really not H
necessary to set out all other inexplicable and unbelievable
I I
features here. For completeness, I would only highlight the
J
following matters. J
K (6) In the YG Tech SPA, YG Tech was required only to supply K
the Masks with the country of origin to be confirmed whilst
L L
under the SPA, the Masks must be manufactured in the United
M States. There was no certainty that the masks supplied by YG M
Tech would satisfy the contractual requirement of the Masks
N N
under the SPA.
O O
(7) The unilateral switch from YG Tech to D & D as the
P P
purported supplier of Win Billion looked improbable in the
Q business world. It was made on 15 June 2020 when Purple Q
Surgical was already pressing hard for delivery. Mr Wu had
R R
confirmed that delivery would be on 17 June 2020. I do not
S understand why YG Tech said in its letter of the even date that S
it would stop signing the contract too. The YG Tech SPA had
T T
already been executed and the parties had signed thereon.
U Moreover, Win Billion and Mr Wu could not have accepted U
V V
A - 41 - A
B this arrangement. He should know that he was not shopping in B
a flea market where he might readily switch to another stall
C C
nearby to buy the same products.
D D
(8) When pressed by Mr Sharpe for proof of Win Billion’s
E payment to the authorised 3M dealer on 30 June 2020, Mr Wu E
sent to Mr Sharpe a redacted transfer advice showing the 3M
F F
Remittance. Apparently there was a transfer of
G USD247,545.25 from the UOB Account to “3M Georgia G
H
LLC”. H
I (9) However, Mr Wu did not disclose to Mr Sharpe that the same I
payment had already been refunded to Win Billion on 16 June
J J
2020. Mr Wu deliberately misled Mr Sharpe by withholding
K this information. He could not give any plausible explanation K
why he did so.
L L
M (10) Subsequently, it was found out that 3M Georgia LLC is only a M
company registered in Georgia, Eastern Europe and has
N N
nothing to do with 3M. Alarmingly, the photos of its business
O address showed that it is an automobile maintenance centre in O
Tbilisi, the capital of Georgia. Mr Wu could say nothing about
P P
this. It was clearly a scam.
Q Q
(11) The redaction of such documents sent to Purple Surgical by
R Mr Wu was said to be necessary owing to the confidentiality R
S
provision in the YG Tech SPA. It, however, does not explain S
why even those documents purportedly originating from 3M
T T
including the D & D 3M Invoice and its written apology (“the
U
3M Apology”) in its email dated 12 June 2020 were redacted U
V V
A - 42 - A
B as well. Mr Wu sought to explain that in dealing with 3M, he B
found that certain information in a lot of contracts and
C C
invoices were redacted and he had once asked a 3M distributor
D in Vietnam why redaction was needed. The 3M distributor told D
him that the official information of 3M was too sensitive and
E E
3M feared that the general public would contact it directly. I
F note that this explanation was not given to Mr Sharpe and was F
not included in any of his affirmations and witness statement.
G G
In any event, this does not make sense at all. There is no
H reason why such redactions should not be removed when the H
documents are being adduced as evidence to be used solely for
I I
litigation purpose. It is clear that Mr Wu merely made this up.
J J
(12) In passing, I should point out that I could not believe that 3M
K K
made the written apology for the delay of making the shipment
L pursuant to the demand of Purple Surgical after such a demand L
was made less than 24 hours ago. 3M is not a small local
M M
business entity and it is unrealistic to expect that it would
N accept any liability in writing so readily. More importantly, N
there was no contractual relationship between 3M and Purple
O O
Surgical at all and 3M had no reason to make such an apology.
P Only Mr Wu knows the actual provenance of the 3M Apology. P
Q (13) I have no idea why the falsified documents required redaction. Q
The information in such documents was false anyway. Perhaps
R R
the fraudsters producing such documents believe that the
S S
redaction would make such documents appear to be genuine.
T T
138. Fourthly, the way that Mr Wu handled and/or dissipated the
U Earnest Money indicates that he had no intention to cause Win Billion to U
V V
A - 43 - A
B honour the SPA and the Escrow Agreement. I only need to give these B
examples.
C C
(1) On 10 June 2020, Jody paid Win Billion out of the Escrow
D D
Account a sum of USD 3 million. Mr Wu was aware of the
E receipt of the USD 3 million. However, he claimed that he did E
not know that it came from the Escrow Account.
F F
G (2) Mr Wu’s purported ignorance must be rejected. Mr Wu G
explained that he had asked Tony to pay him some profits in
H H
advance so that he could make investments in some companies.
I He forgot that he himself was then in very poor financial I
condition and that Win Billion had had no significant business
J J
before the SPA. He claimed to believe that the said sum was
K gained from other transactions done by Tony and him. K
However, he could not identify any transactions which had
L L
been completed or near completion. This is inconceivable. Mr
M Wu must be interested to know which transaction other than M
the SPA would bring him such a huge profit. Mr Wu should
N N
have asked Tony about the details of the alleged transaction.
O O
(3) Of course Mr Wu knew that the said sum came from the
P P
Escrow Account. There could be no other source. Mr Wu must
Q be aware that it was against the Joint Instruction Requirement Q
for Jody to pay the said sum to Win Billion. He must be
R R
alarmed and should refuse to accept the said sum if he was a
S decent businessman having a genuine intention to honour the S
SPA and the Escrow Agreement.
T T
U U
V V
A - 44 - A
B (4) Mr Wu was unable to disclose any communication with Tony B
and/or Jody in relation to the transfer of the said sum. Nor did
C C
he ask Jody to testify for him to give an account about the
D transfer apparently in breach of the Escrow Agreement so as to D
exonerate him. Such a failure could only point to the fact that
E E
Mr Wu was acting in concert with Jody in regard to this
F unauthorised transfer. F
G G
(5) Next, Mr Wu paid HK$1,000,000 to Polar Pay Ltd on 5 June
H
2020 and the sums totalling HK$2,000,000 to Easypasscorp H
Ltd on 4 June and 10 July 2020 respectively. Mr Wu cannot
I I
even produce the receipts of Polar Pay Ltd and Easypasscorp
J
Ltd. J
K (6) Mr Wu now claimed that these payments were “tea money” K
payments made to some anonymous military leaders in the
L L
Mainland. This explanation is inconsistent with his earlier
M evidence given by way of his affirmation and his deposition in M
the US Action. In his 4th Affirmation, Mr Wu said that the
N N
payments were for “business associate’s profit”. In his
O deposition in the US Action, Mr Wu stated that the payment to O
Polar Pay Ltd was for payment of expenses in Mainland
P P
China.
Q Q
(7) Mr Wu explained that Tony had advised him that such tea
R R
money was required because the anonymous military leaders
S could procure the supply of the Masks for Win Billion. Such S
military leaders had to be anonymous because their activities
T T
were very sensitive.
U U
V V
A - 45 - A
B (8) This explanation is simply absurd. I cannot understand and B
there is no credible evidence to show how such military
C C
leaders could be involved in the trade of 3M’s medical
D products. Mr Wu also forgot his earlier version as to how he D
came to know YG Tech. In his witness statement, he stated
E E
that YG Tech was introduced to Tony by Mr Xu. YG Tech
F contracted to supply the Masks to Win Billion as early as 25 F
May 2020. The anonymous military leaders played no part in
G G
the sourcing of the Masks at all.
H H
(9) Mr Wu was quick to make a merger of these two different
I I
versions in the witness box. He explained that Mr Xu had
J
actually been appointed by the military leader to assist him. I J
cannot accept his new story. He forgot that he had also stated
K K
that he came to know YG Tech when dealing with Utility
L Sugar and he was able to deal with YG Tech through Utility L
Sugar without the assistance of the military leaders.
M M
(10) On 4 June 2020, Smart Up received USD100,000 from Win
N N
Billion and an additional total sum of HK$4,431,380 from Mr
O Wu. These payments were made for no discernible purpose. I O
reject Mr Wu’s explanation that Smart Up was entitled to
P P
these sums under a consultancy agreement dated 19 May 2020
Q regarding the supply of the Masks to Purple Surgical pursuant Q
to the SPA for an intermediary remuneration of USD300,000.
R R
S (11) Ms. Lam submits that Smart Up could not serve as a S
consultant to Win Billion given the fact that Mr Wu is their
T T
common sole director and shareholder. More importantly, Win
U Billion had no intention whatsoever to look for a genuine U
V V
A - 46 - A
B supplier to fulfil the SPA at all and Smart Up could not B
provide any service of value to Win Billion. Mr Wu could not
C C
explain why Smart Up had received more than the stipulated
D reward under the purported consultancy agreement at the end. D
The purported consultancy agreement is merely a sham in my
E E
view. Smart Up is merely another business vehicle of Mr Wu
F to receive and dissipate the Earnest Money. F
G G
(12) On the other hand, from 3 June 2020 to 3 July 2020, Win
H
Billion transferred a total sum of USD3,766,591.74 to Mr Wu. H
Mr Wu said that these sums were dividends paid to him as
I I
shareholder of Win Billion. In cross-examination, Mr Wu said
J
he pinned all his hopes on the SPA and expected to make a J
large profit. Therefore, Win Billion saw fit to declare
K K
dividends. Ms Lam submits that this explanation is
L preposterous and I agree with her. L
M (13) Even on his own evidence, Win Billion was then nowhere near M
securing the Masks to be supplied to Purple Surgical within
N N
the lead time of 7 to 10 business days after the receipt of the
O 1st Payment. As stated earlier, Mr Wu had confirmed to Purple O
Surgical in his email that delivery could be made on 20 June
P P
2020. The 3M Remittance was returned without credible
Q explanation. YG Tech decided to jump ship and let D & D Q
took over the deal with Win Billion. D & D was only
R R
incorporated on 3 June 2020 in South Korea and it is hard to
S S
believe that it was already an authorised distributor of 3M. Mr
T
Wu even told Purple Surgical that Win Billion intended to sue T
3M for non-delivery of the Masks. Against this background, it
U U
V V
A - 47 - A
B is inexplicable how Mr Wu could still believe that Win Billion B
could complete the transaction in accordance with the SPA
C C
and was confident that Win Billion would be able to gain the
D profit under the SPA legitimately. Mr Wu could not believe D
that such dividends were declared in the circumstances.
E E
(14) It can also be seen that after the receipt of the 1 st Payment,
F F
Win Billion did not reserve any part of the Earnest Money to
G G
purchase the Masks so as to supply the same to Purple
H
Surgical. The 3M Remittance turned out to be a farce. There is H
no evidence that Win Billion has ever settled the D & D 3M
I I
Invoice. Mr Wu was quick to use such portions of the Earnest
J
Money transferred to him for his personal use including J
paying off his outstanding debts owing to Fortune Capital in
K K
the sum of HK$158,693 on 3 June 2020 and HK$3,915,317.20
L on 12 June 2020. Obviously, Mr Wu was just too happy with L
st
the 1 Payment without making any genuine effort to use any
M M
portion of the same to fulfil the obligations of Win Billion
N under the SPA. There is no evidence of any such payment to N
buy a single mask.
O O
(15) Lastly, Mr Wu’s reliance on Sing Kong to supply the Masks to
P P
Purple Surgical is misconceived. Mr Wu had the audacity to
Q make the offer to supply the Masks through Sing Kong in Q
November 2020, long after the termination of the SPA in July
R R
2020.
S S
(16) In fact, in early September 2020, the son of Mr Sharpe saw a
T T
post on LinkedIn by a broker in Chad, Africa offering to sell 5
U million units of the Masks and such masks were currently in U
V V
A - 48 - A
B Hong Kong. Further investigation has revealed that Sing Kong B
was the ultimate supplier. Mr Wu being one of the directors of
C C
Sing Kong should know that such masks, if ever existed,
D should be supplied to Purple Surgical in September 2020 as a D
matter of urgency to remedy the breach of the SPA on the part
E E
of Win Billion and should not be offered to the general public.
F The offer of Sing Kong on LinkedIn is fishy indeed and F
appears to be another scam.
G G
H
(17) There is also not a shred of evidence to support Mr Wu’s H
allegation that the Masks sourced from Sing Kong were still in
I I
the warehouse and were ready for delivery as at 7 September
J
2022, the date of his witness statement. J
K K
139. For these reasons, I have no hesitation in rejecting the
L evidence of Mr Wu in its entirety except those supported by undisputed L
documentary evidence, which is very rare. I am not prepared to further
M M
analyse his evidence particularly those relating to the fourth layer of
N payment of the Earnest Money. He simply used the Earnest Money as if it N
were all his personal monies without any intention to purchase the Masks
O O
for Purple Surgical. Ms Lam in her closing submissions has literally left no
P stone unturned to expose the numerous lies that Mr Wu told throughout the P
4 days in the witness box. Suffice it to say, I am in total agreement with her
Q Q
analysis.
R R
140. On the incontrovertible evidence adduced by Purple Surgical
S S
and in the absence of any credible evidence of the defence, I come to the
T conclusion that Win Billion through Mr Wu knowingly made the T
Representation to Purple Surgical that Win Billion intended to perform the
U U
V V
A - 49 - A
B SPA and the Escrow Agreement. Purple Surgical relied and act upon the B
Representations and paid the Earnest Money to the Escrow Account. The
C C
Representation was false and Purple Surgical has suffered financial loss in
D the sum of USD9,523,232. D
E E
141. I conclude that the tort of deceit and fraudulent
F misrepresentation is established by compelling evidence. Mr Wu and Win F
Billion are inseparable in this matter. Mr Wu being the controlling mind of
G G
Win Billion knowingly procured and directed Win Billion to commit the
H tort. He must be personally liable together with Win Billion. I, therefore, H
hold that the tort was committed by both of them jointly and both of them
I I
are liable.
J J
142. As Lord Bingham said in HIH Casualty and General
K K
Insurance Ltd. v Chase Manhattan Bank [2003] 1 All ER (Comm) 349 at
L §15, fraud unravels all and once fraud is proved, it vitiates all judgments, L
contracts and or transactions whatsoever. Rescission is in order.
M M
N 143. As regards the claim based on conspiracy to injure by N
unlawful means, I am satisfied that Mr Wu, Win Billion and Smart Up
O O
agreed to work in cohort and conspired to deceive Purple Surgical into
P paying the Earnest Money pursuant to the SPA by the Representation. P
After receiving the 1st Payment, knowingly in breach of the SPA and the
Q Q
Escrow Agreement, Mr Wu caused payments to be made out of the Escrow
R R
Account for their own use to the detriment of Purple Surgical. Purple
S
Surgical has suffered financial loss as a result. S
T T
144. In the premises, I hold that the conspiracy claim against Win
U
Billion, Mr Wu and Smart Up is also made out on the evidence. U
V V
A - 50 - A
B B
145. All the other causes of action pleaded by Purple Surgical
C C
become academic in light of my foregoing conclusions. I do not find it
D necessary to deal with them any further. D
E E
Conclusion and costs
F 146. For the reasons given, the claim of Purple Surgical against F
Win Billion, Mr Wu and Smart Up must succeed. Purple Surgical must be
G G
indemnified against all its loss caused by its entry to the SPA induced by
H fraud. I order that judgment be entered against Win Billion, Wu and Smart H
Up for the sum of USD9,523,231.40.
I I
J 147. I also order that all the injunction orders be continued until J
further order.
K K
L 148. This is a case of serious and complex fraud involving oversea L
participants. At least a Georgian business entity together with its account
M M
with a bank in Georgia and a lawyer in the United States other than Mr Wu
N and Win Billion were involved. Quite a few forged documents were N
produced. I do not believe that Mr Wu perpetrated the fraud on his own. He
O O
basically deflected all the blames to Tony and his former solicitors. Not
P being sarcastic or cynical, I cannot say with any certainty whether Tony is P
a real character or whether Tony is the real name. Mr Wu was determined
Q Q
not to tell the truth in his testimony and he just lied extensively and
R R
casually.
S S
149. In view of the gravity of the fraud and the egregious conduct
T T
of the defence, I make an order nisi that Purple Surgical’s costs of this
U
action including all costs reserved be paid by Win Billion, Mr Wu and U
V V
A - 51 - A
B Smart Up, to be taxed if not agreed, on an indemnity basis, with a B
certificate for two counsel.
C C
D 150. Lastly, I thank Ms Lam, Mr Luxton and Mr Zhu for their able D
assistance in this matter.
E E
F F
G G
H H
(Kent Yee)
I Deputy High Court Judge I
J J
K Ms Rachel Lam SC leading Mr Nick Luxton, instructed by Stephenson K
Harwood, for the Plaintiff
L L
The 1st Defendant was not represented and did not appear
M M
Mr Peter Zhu, instructed by P. C. Woo & Co, for the 2nd Defendant (until 6
May 2024)
N N
The 4th Defendant was not represented and did not appear
O O
P P
Q Q
R R
S S
T T
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B Annex B
C C
D D
E E
F F
G G
H H
I I
J J
K K
L L
M M
N N
O O
P P
Q Q
R R
S S
T T
U U
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A - 53 - A
B B
C C
D D
E E
F F
G G
H H
I I
J J
K K
L L
M M
N N
O O
P P
Q Q
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S S
T T
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V V