Robert Chan, representing D19, Tian Cheng Trading Co, successfully appealed Master’s decision to grant summary judgment to the Plaintiffs, the alleged victims of a large-scale fraud.

D19’s case was that it was a sizeable trading outfit, and that it had received a portion of the defrauded sum from D1 (allegedly a 1st layer recipient) as part-payment for a genuine arms-length commercial transaction – and so there was a bona fide purchase for value without notice of the fraud.

The Plaintiffs pointed out numerous inconsistencies or weaknesses in the defence case, but the judge held that the “logical” and “much better” starting point was to examine the transactional documents connected with the subject money to see whether it was believable that the transaction actually took place. The defence case was held to be believable.

As for the issues of bona fide and notice, the judge held that the Plaintiffs were not able to point to the existence of any compelling or indisputable evidence to show that D19’s defence was not credible, and so those issues would be left to trial.

A sum of HK$1.6 million which D19 had previously paid into court (to discharge a Mareva injunction imposed on it) would remain in court as a condition for the grant of leave to defend.