DCCJ3801/2022 CNC FAR EAST MACHINERY CO. LTD. v. INTELLIGENT TECH TRADING LTD - LawHero
DCCJ3801/2022
CNC FAR EAST MACHINERY CO. LTD. v. INTELLIGENT TECH TRADING LTD
區域法院（民事）Deputy District Judge Tara Liao12/6/2023[2023] HKDC 824
DCCJ3801/2022
A A
B B
DCCJ 3801/2022
C
[2023] HKDC 824 C
D D
IN THE DISTRICT COURT OF THE
E
HONG KONG SPECIAL ADMINISTRATIVE REGION E
CIVIL ACTION NO 3801 OF 2022
F F
G ------------------------------------ G
BETWEEN
H H
CNC FAR EAST MACHINERY CO. LTD. Plaintiff
I and I
INTELLIGENT TECH TRADING LIMITED Defendant
J J
------------------------------------
K K
Before: Deputy District Judge Tara Liao in Chambers
L L
Date of Hearing: 13 June 2023
M Date of Judgment: 13 June 2023 M
N N
------------------------------
O JUDGMENT O
------------------------------
P P
Q 1. The plaintiff by a summons dated 11 April 2023 (the Q
“Summons”) seeks judgment in default of defence, pursuant to Order 19
R R
rule 7 of the Rules of District Court (Cap 336H).
S S
T T
U U
V V
-2-
A A
B B
2. The plaintiff’s pleaded case is, in gist:-
C C
(1) The plaintiff had an on-going relationship with Mr
D D
Lenzotti, the President and CEO of Euromac SPA
E (“Euromac”), and was induced by emails (the E
“Emails”) sent by an unknown person (the
F F
“Fraudster”) between 27 September 2021 and 1
G November 2021 purportedly on behalf of Mr G
Lenzotti/Euromac to deposit funds in a total of
H H
US$251,700 (the “Sum”) from 4 to 28 October 2021
I into the two bank accounts in Defendant’s name, in the I
belief that the funds were required by Euromac for the
J J
purpose of acquiring machines from China. It was
K represented to the plaintiff that machines were to be K
delivered to the plaintiff in Thailand within 40 days of
L L
confirmation of full payment, and then re-exported to
M Euromac in Italy. M
N N
(2) The defendant is a company incorporated in Hong
O Kong, with which the plaintiff had no prior relationship. O
P P
(3) On 29 October 2021, the plaintiff upon communication
Q with Mr Lenzotti discovered that the Emails did not Q
originate from Mr Lenzotti or Euromac and
R R
immediately reported the case to the Hong Kong Police.
S The plaintiff was informed that both accounts of the S
defendant were frozen by the Hong Kong Police under
T T
the letter of no consent regime.
U U
V V
-3-
A A
B B
C (4) The plaintiff never received any machines or anything C
of value from the defendant, and the Sum was never
D D
returned to the plaintiff.
E E
3. The plaintiff claims against the defendant for the Sum inter
F F
alia on the basis of unjust enrichment. It also seeks a declaration that the
G defendant holds the Sum and/or its traceable fruits as the plaintiff’s G
constructive trustee.
H H
I Service of process I
J J
4. The sealed copy of the Amended Writ of Summons endorsed
K with the Statement of Claim dated 23 February 2023 was served by leaving K
at the defendant’s registered office on 23 February 2023. The Notice of
L L
Intention to Enter Judgment dated 13 March 2023 was served by ordinary
M post to the defendant’s registered office on 13 March 2023. M
N N
5. No Acknowledgement of Service, Notice of Intention to
O Defend or Defence has been filed. The Summons together with the O
supporting affirmation were served by by ordinary post to the defendant’s
P P
registered office on 3 May 2023.
Q Q
6. Having read the 3rd Affirmation of Wong Wing Yee dated 22
R R
May 2023, I am satisfied that service of the Amended Writ of Summons
S endorsed with the Statement of Claim and the Summons pursuant to S
section 827 of the Companies Ordinance (Cap 622) is effective.
T T
U U
V V
-4-
A A
B B
Declaratory Relief
C C
7. The approach to be taken by the court when dealing with
D D
applications which seek default judgment for declaratory relief is trite. As
E succinctly summarised by DHCJ Stock, SC in Sultana Distribution E
Services Inc v Hongkong Fuheng Technology Co Limited [2018] HKCFI
F F
1480:-
G G
“7. The principles applicable to an application under Order
H 19, rule 7 have been discussed in several recent cases which H
concern alleged email frauds. The power to grant judgment
under rule 7 is discretionary. The court is required to scrutinise
I whether the matters pleaded in the Statement of Claim entitle the I
plaintiff to the judgment sought. The court’s decision is made
J on the basis of the pleaded facts, rather than on evidence. J
8. As to declaratory relief, it is not the normal practice of
K the court to grant a declaration without going to trial. This K
is, however, only a rule of practice, rather than a rule of law,
and gives way to the paramount duty of the court to do the
L L
fullest justice to the plaintiff to which he is entitled. In a
number of cases involving email fraud, declaratory relief has
M been granted on the basis that there is a genuine need for M
such relief to secure the plaintiff’s proprietary as opposed to
merely personal claim, particularly given that the defendant may
N have other creditors.” (emphasis added) N
O O
8. In Spruce Australia Pty Ltd v New Senjia Trade Limited [2019]
P HKCFI 101, DHCJ Yeung, SC (as he then was) held that:- P
Q Q
“16. I have considered the contents of the Statement of Claim.
The pleaded facts clearly support the plaintiff’s case that it is the
R victim of an email fraud, and that it has suffered loss in the R
amount of the Sum. Constructive trust also attaches—
Westdeutsche Landesbank Girozentrale v Islington London
S S
Borough Council [1996] AC 669, per Lord Browne-Wilkinson
at 716C–D, and 巨展皮具 at paragraph 27. The plaintiff appears
T entitled to relief based on its proprietary interest in the Sum. I T
bear in mind the fact that declaratory relief is being sought. I
need to bear in mind the rules of practice set out above and
U U
V V
-5-
A A
B decide how I should exercise my discretion. I take into account B
the fact that fraud is pleaded and deemed established. I take
C further into account the fact that nothing is known about the C
defendant, including whether it has any other creditors. The
plaintiff has a genuine need for the Declarations sought, so
D as to avert any need for it to race against other creditors. D
The Declarations sought are also necessary for the plaintiff
E
to hopefully get to the balance in [the bank account of the E
defendant] for full or partial satisfaction of the monetary
judgment. In all the circumstances, I am satisfied that the facts
F of the present case are such that I should exercise my discretion F
in favour of granting the declaratory relief sought.” (emphasis
added)
G G
H 9. I am satisfied that the plaintiff’s pleaded case supports that it H
has suffered loss in the amount of the Sum and that constructive trust
I I
attaches by virtue of fraud. Applying the above principles, I accept that
J the plaintiff has a genuine need for declaratory relief to earmark the Sum J
and keeping it out of reach of the defendant’s general creditors, and to
K K
obtain the balance in the defendant’s accounts for full or partial satisfaction
L of the monetary judgment. In these circumstances, it is appropriate to L
exercise my discretion in favour of granting the declaratory relief along
M M
with the monetary judgment sought.
N N
Post-judgment Mareva
O O
P 10. In the Summons, the plaintiff also seeks a post-judgment P
Mareva Injunction.
Q Q
R 11. As Deputy High Court Judge K Yeung (as he then was) held R
in China Citic Bank Corporation Limited (Quanzhou Branch) v Li Kwai
S S
Chun & others [2018] HKCFI 1800 at paragraph 32:-
T T
U U
V V
-6-
A A
B “… The mere fact that a judgment has been obtained does not B
by itself justify [a Mareva injunction]. But if a Mareva
C injunction is otherwise justified (applying the established C
considerations and with the fact that it is a post-judgment
application factored in), a Mareva injunction may be granted
D (subject to the rider that it should normally be of limited and D
specific duration). It acts in personam on the defendant and
E
works in tandem with the usual execution mechanism.” E
(emphasis added)
F F
12. It may be that a plaintiff in an email fraud case such as this
G assumes that the nature of the case readily implies a degree of dishonesty G
and hence risk of dissipation. However, it does not follow that the court
H H
would grant post-judgment injunctive relief as a matter of course without
I any evidence in support of the relief sought. I
J J
13. In the present case, I am not satisfied that a post-judgment
K Mareva injunction should be granted:- K
L L
(1) The plaintiff filed two short affirmations which do not
M exhibit the Emails (even though they are supposed to M
be the crux of the fraud) or any evidence of risk of
N N
dissipation;
O O
(2) The plaintiff’s pleaded case is that the Fraudster made
P P
false representations to the plaintiff inducing the
Q plaintiff to pay the Sum to the defendant. However, it Q
is not the plaintiff’s pleaded case that the Fraudster
R R
made such false representations on behalf of the
S defendant or that the defendant was somehow involved S
in the Fraudster’s misrepresentation;
T T
U U
V V
-7-
A A
B B
(3) It appears that the plaintiff had not applied for any
C interim injunctive relief. There is no explanation why C
or how a post-judgment injunction has now become
D D
necessary.
E E
14. At the hearing, Ms Ho, counsel for the plaintiff, confirmed
F F
that the plaintiff would no longer seek the post-judgment injunction.
G Accordingly, no such relief would be granted. G
H H
Disposition
I I
15. In the premises, I make the following orders:-
J J
K (1) A declaration that the defendant is liable to account to K
the plaintiff for the Sum of US$251,700 together with
L L
interest at the rate of HSBC prime rate +1% from 29
M October 2021 to the date of judgment, and thereafter at M
judgment rate until full payment;
N N
O (2) A declaration that the defendant holds the US$251,700 O
or any part thereof in the defendant’s accounts as
P P
constructive trustee for the plaintiff;
Q Q
(3) The defendant shall pay and return the US$251,700 or
R R
its Hong Kong dollar equivalent together with interest
S accrued thereon to the plaintiff forthwith; S
T T
U U
V V
-8-
A A
B B
(4) The defendant does pay the plaintiff’s costs of this
C action, to be taxed if not agreed, with certificate for C
counsel.
D D
E 16. I thank Ms Ho for her assistance. E
F F
G G
( Tara Liao )
H Deputy District Judge H
I I
J Ms Gigi Ho, instructed by Francis Kong, for the plaintiff J
K The defendant was not represented and did not appear K
L L
M M
N N
O O
P P
Q Q
R R
S S
T T
U U
V V
A A
B B
DCCJ 3801/2022
C
[2023] HKDC 824 C
D D
IN THE DISTRICT COURT OF THE
E
HONG KONG SPECIAL ADMINISTRATIVE REGION E
CIVIL ACTION NO 3801 OF 2022
F F
G ------------------------------------ G
BETWEEN
H H
CNC FAR EAST MACHINERY CO. LTD. Plaintiff
I and I
INTELLIGENT TECH TRADING LIMITED Defendant
J J
------------------------------------
K K
Before: Deputy District Judge Tara Liao in Chambers
L L
Date of Hearing: 13 June 2023
M Date of Judgment: 13 June 2023 M
N N
------------------------------
O JUDGMENT O
------------------------------
P P
Q 1. The plaintiff by a summons dated 11 April 2023 (the Q
“Summons”) seeks judgment in default of defence, pursuant to Order 19
R R
rule 7 of the Rules of District Court (Cap 336H).
S S
T T
U U
V V
-2-
A A
B B
2. The plaintiff’s pleaded case is, in gist:-
C C
(1) The plaintiff had an on-going relationship with Mr
D D
Lenzotti, the President and CEO of Euromac SPA
E (“Euromac”), and was induced by emails (the E
“Emails”) sent by an unknown person (the
F F
“Fraudster”) between 27 September 2021 and 1
G November 2021 purportedly on behalf of Mr G
Lenzotti/Euromac to deposit funds in a total of
H H
US$251,700 (the “Sum”) from 4 to 28 October 2021
I into the two bank accounts in Defendant’s name, in the I
belief that the funds were required by Euromac for the
J J
purpose of acquiring machines from China. It was
K represented to the plaintiff that machines were to be K
delivered to the plaintiff in Thailand within 40 days of
L L
confirmation of full payment, and then re-exported to
M Euromac in Italy. M
N N
(2) The defendant is a company incorporated in Hong
O Kong, with which the plaintiff had no prior relationship. O
P P
(3) On 29 October 2021, the plaintiff upon communication
Q with Mr Lenzotti discovered that the Emails did not Q
originate from Mr Lenzotti or Euromac and
R R
immediately reported the case to the Hong Kong Police.
S The plaintiff was informed that both accounts of the S
defendant were frozen by the Hong Kong Police under
T T
the letter of no consent regime.
U U
V V
-3-
A A
B B
C (4) The plaintiff never received any machines or anything C
of value from the defendant, and the Sum was never
D D
returned to the plaintiff.
E E
3. The plaintiff claims against the defendant for the Sum inter
F F
alia on the basis of unjust enrichment. It also seeks a declaration that the
G defendant holds the Sum and/or its traceable fruits as the plaintiff’s G
constructive trustee.
H H
I Service of process I
J J
4. The sealed copy of the Amended Writ of Summons endorsed
K with the Statement of Claim dated 23 February 2023 was served by leaving K
at the defendant’s registered office on 23 February 2023. The Notice of
L L
Intention to Enter Judgment dated 13 March 2023 was served by ordinary
M post to the defendant’s registered office on 13 March 2023. M
N N
5. No Acknowledgement of Service, Notice of Intention to
O Defend or Defence has been filed. The Summons together with the O
supporting affirmation were served by by ordinary post to the defendant’s
P P
registered office on 3 May 2023.
Q Q
6. Having read the 3rd Affirmation of Wong Wing Yee dated 22
R R
May 2023, I am satisfied that service of the Amended Writ of Summons
S endorsed with the Statement of Claim and the Summons pursuant to S
section 827 of the Companies Ordinance (Cap 622) is effective.
T T
U U
V V
-4-
A A
B B
Declaratory Relief
C C
7. The approach to be taken by the court when dealing with
D D
applications which seek default judgment for declaratory relief is trite. As
E succinctly summarised by DHCJ Stock, SC in Sultana Distribution E
Services Inc v Hongkong Fuheng Technology Co Limited [2018] HKCFI
F F
1480:-
G G
“7. The principles applicable to an application under Order
H 19, rule 7 have been discussed in several recent cases which H
concern alleged email frauds. The power to grant judgment
under rule 7 is discretionary. The court is required to scrutinise
I whether the matters pleaded in the Statement of Claim entitle the I
plaintiff to the judgment sought. The court’s decision is made
J on the basis of the pleaded facts, rather than on evidence. J
8. As to declaratory relief, it is not the normal practice of
K the court to grant a declaration without going to trial. This K
is, however, only a rule of practice, rather than a rule of law,
and gives way to the paramount duty of the court to do the
L L
fullest justice to the plaintiff to which he is entitled. In a
number of cases involving email fraud, declaratory relief has
M been granted on the basis that there is a genuine need for M
such relief to secure the plaintiff’s proprietary as opposed to
merely personal claim, particularly given that the defendant may
N have other creditors.” (emphasis added) N
O O
8. In Spruce Australia Pty Ltd v New Senjia Trade Limited [2019]
P HKCFI 101, DHCJ Yeung, SC (as he then was) held that:- P
Q Q
“16. I have considered the contents of the Statement of Claim.
The pleaded facts clearly support the plaintiff’s case that it is the
R victim of an email fraud, and that it has suffered loss in the R
amount of the Sum. Constructive trust also attaches—
Westdeutsche Landesbank Girozentrale v Islington London
S S
Borough Council [1996] AC 669, per Lord Browne-Wilkinson
at 716C–D, and 巨展皮具 at paragraph 27. The plaintiff appears
T entitled to relief based on its proprietary interest in the Sum. I T
bear in mind the fact that declaratory relief is being sought. I
need to bear in mind the rules of practice set out above and
U U
V V
-5-
A A
B decide how I should exercise my discretion. I take into account B
the fact that fraud is pleaded and deemed established. I take
C further into account the fact that nothing is known about the C
defendant, including whether it has any other creditors. The
plaintiff has a genuine need for the Declarations sought, so
D as to avert any need for it to race against other creditors. D
The Declarations sought are also necessary for the plaintiff
E
to hopefully get to the balance in [the bank account of the E
defendant] for full or partial satisfaction of the monetary
judgment. In all the circumstances, I am satisfied that the facts
F of the present case are such that I should exercise my discretion F
in favour of granting the declaratory relief sought.” (emphasis
added)
G G
H 9. I am satisfied that the plaintiff’s pleaded case supports that it H
has suffered loss in the amount of the Sum and that constructive trust
I I
attaches by virtue of fraud. Applying the above principles, I accept that
J the plaintiff has a genuine need for declaratory relief to earmark the Sum J
and keeping it out of reach of the defendant’s general creditors, and to
K K
obtain the balance in the defendant’s accounts for full or partial satisfaction
L of the monetary judgment. In these circumstances, it is appropriate to L
exercise my discretion in favour of granting the declaratory relief along
M M
with the monetary judgment sought.
N N
Post-judgment Mareva
O O
P 10. In the Summons, the plaintiff also seeks a post-judgment P
Mareva Injunction.
Q Q
R 11. As Deputy High Court Judge K Yeung (as he then was) held R
in China Citic Bank Corporation Limited (Quanzhou Branch) v Li Kwai
S S
Chun & others [2018] HKCFI 1800 at paragraph 32:-
T T
U U
V V
-6-
A A
B “… The mere fact that a judgment has been obtained does not B
by itself justify [a Mareva injunction]. But if a Mareva
C injunction is otherwise justified (applying the established C
considerations and with the fact that it is a post-judgment
application factored in), a Mareva injunction may be granted
D (subject to the rider that it should normally be of limited and D
specific duration). It acts in personam on the defendant and
E
works in tandem with the usual execution mechanism.” E
(emphasis added)
F F
12. It may be that a plaintiff in an email fraud case such as this
G assumes that the nature of the case readily implies a degree of dishonesty G
and hence risk of dissipation. However, it does not follow that the court
H H
would grant post-judgment injunctive relief as a matter of course without
I any evidence in support of the relief sought. I
J J
13. In the present case, I am not satisfied that a post-judgment
K Mareva injunction should be granted:- K
L L
(1) The plaintiff filed two short affirmations which do not
M exhibit the Emails (even though they are supposed to M
be the crux of the fraud) or any evidence of risk of
N N
dissipation;
O O
(2) The plaintiff’s pleaded case is that the Fraudster made
P P
false representations to the plaintiff inducing the
Q plaintiff to pay the Sum to the defendant. However, it Q
is not the plaintiff’s pleaded case that the Fraudster
R R
made such false representations on behalf of the
S defendant or that the defendant was somehow involved S
in the Fraudster’s misrepresentation;
T T
U U
V V
-7-
A A
B B
(3) It appears that the plaintiff had not applied for any
C interim injunctive relief. There is no explanation why C
or how a post-judgment injunction has now become
D D
necessary.
E E
14. At the hearing, Ms Ho, counsel for the plaintiff, confirmed
F F
that the plaintiff would no longer seek the post-judgment injunction.
G Accordingly, no such relief would be granted. G
H H
Disposition
I I
15. In the premises, I make the following orders:-
J J
K (1) A declaration that the defendant is liable to account to K
the plaintiff for the Sum of US$251,700 together with
L L
interest at the rate of HSBC prime rate +1% from 29
M October 2021 to the date of judgment, and thereafter at M
judgment rate until full payment;
N N
O (2) A declaration that the defendant holds the US$251,700 O
or any part thereof in the defendant’s accounts as
P P
constructive trustee for the plaintiff;
Q Q
(3) The defendant shall pay and return the US$251,700 or
R R
its Hong Kong dollar equivalent together with interest
S accrued thereon to the plaintiff forthwith; S
T T
U U
V V
-8-
A A
B B
(4) The defendant does pay the plaintiff’s costs of this
C action, to be taxed if not agreed, with certificate for C
counsel.
D D
E 16. I thank Ms Ho for her assistance. E
F F
G G
( Tara Liao )
H Deputy District Judge H
I I
J Ms Gigi Ho, instructed by Francis Kong, for the plaintiff J
K The defendant was not represented and did not appear K
L L
M M
N N
O O
P P
Q Q
R R
S S
T T
U U
V V