Lanton Nicole Elizabeth v Shu Wenqin [2026] 2 HKLRD 49; [2025] HKDC 2029 (Brian Tsui)

Brian Tsui represented the plaintiff in Lanton Nicole Elizabeth v Shu Wenqin [2026] 2 HKLRD 49; [2025] HKDC 2029.

Held, ordering D to pay the Sum to P and to account for its whereabouts, that:

1. On the evidence, the Court rejected D’s evidence that she had received the transfers without knowledge of P’s mistake. (See paras.53-55.)
2. D, having received the transfers, was enriched to the extent of the Sum. Such enrichment was entirely at P’s expense even though one of the transfers was via another person, there being a sufficiently close link between P’s loss and D’s gain (Shanghai Tongji Science & Technology Industrial Co Ltd v Casil Clearing Ltd (2004) 7 HKCFAR 79, [2004] 2 HKLRD 548, AXHT Co Ltd v Freeway Finance Co Ltd [2020] 4 HKLRD 133, JSP International SRO v Alacrity Ltd [2022] HKCFI 977, Chan Ting Ting v Guo George [2025] HKDC 1928 applied). (See paras.56-61.)
3. As to whether the enrichment was unjust, it was argued on D’s behalf that it was not unjust because P was participating in an investment scheme in virtual currencies, which carried a high risk, and D was not a party to that scheme. This argument was to be rejected for these reasons. P’s case was based on fraud and mistake. The scheme was a façade used to defraud P into parting with her money. That being so, the transfers into accounts designated by a third party (Z), including D’s Bank Account, were made by mistake. (See para.63.)
4. It was further argued on D’s behalf as follows. P had deliberately sidestepped warnings given to her by the banks. In doing so, she had acted unreasonably. Her mistake was self-induced because she had waived inquiries. Therefore, she could not now assert that she had been labouring under a mistake. This further argument was to be rejected. Only having a subjective doubt, as opposed to being objectively negligent, would negative a mistake. P’s conduct was objectively less than prudent; but that did not mean that she was not acting under an operative mistake. She made the transfers because she was a victim of fraud, not because she intended to make any payment or gift to D, whom she did not know (Globenet Droid Ltd v Hong Kong Hang Lung Electronic Co [2016] 3 HKLRD 863, Cheung Yiu Leung v Cheung Chong Money Exchange o/b Cheung Chong Ltd [2024] HKDC 1596 applied). (See paras.64-68.)
5. A “change of position defence” was raised by D. To establish such a defence it had to be shown: (i) that there was a link between the receipt of the benefit and a change of position so that but for such receipt there would not have been such change; (ii) the change was in good faith; and (iii) the circumstances made it inequitable to order restitution. The facts were these. $650,000 was withdrawn from D’s Bank Account by way of a cashier’s order; but the deposit of that sum into Y’s bank account was by way of a cheque deposit. That cast doubt on whether the transactions were of the same monies. D, whose evidence the Court rejected, adduced no further evidence to explain the discrepancy. Accordingly, the “change of position” defence failed (Idemitsu Chemicals (Hong Kong) Co Ltd v Yanqing Ltd [2024] HKCFI 1075 applied). (See paras.69-71.)
6. With it failed D’s “ministerial receipt” defence. (See para.72.)
7. Accordingly, the unjust enrichment claim succeeded, and D must therefore make restitution and return the Sum to P. (See para.73.)
8. However, there would be no declaration of a constructive trust, there being no evidence that that the Sum was still in D’s ownership (Welly Grace Ltd v Keung Yee Man[2023] HKCFI 3082 applied). (See paras.74-78.)
9. Even if not a party to the fraud, D had been shown on a balance of probabilities to have such knowledge of P’s mistake as to make D’s receipt of the Sum unconscionable. The taking of an account to identify the whereabouts of the Sum was necessary; and D was personally liable to account for the Sum to P (Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669, Guaranty Bank and Trust Co v ZZZIK Inc Ltd (HCA 1139/2016, [2016] HKEC 1556), JP Morgan SE Luxembourg Branch v LV Guangxin Trade Co Ltd [2023] HKCFI 1094 applied). (See paras.79-85.)

Action

This was an action by the plaintiff claiming for the recovery of a sum of money from the defendant as a victim of an online fraud on the ground of unjust enrichment.

[The above is excerpted from the headnote to the report in HKLRD.]