Jagdip Kaur Sadhu Singh v. I-Live Ltd
District Court
Civil Action No 3222 of 2017
Judge Liu Man Kin in Chambers
6 February 2018

Civil procedure — default judgment — action for declaration of trust — whether appropriate case for grant of judgment — whether entire value of fund allegedly subject to trust within jurisdiction of District Court — District Court Ordinance (Cap. 336) s. 37(2)

Courts and judicial system — District Court — jurisdiction — action for declaration of trust — value of fund allegedly subject to trust in excess of Court’s jurisdiction — whether abandonment of part of claim under s. 34(1) so as to give Court jurisdiction — District Court Ordinance (Cap. 336) s. 34(1)

P’s case was that after receiving a cold call from TT, purportedly a UK online financial services provider, P opened an investment trading account with TT and deposited into an account at HSBC held by D, a Hong Kong company, USD5,000 initially and subsequently a total of USD130,101 (the ‘Investment Fund’). When P encountered difficulties in terminating the trading account, she made a report to the police and discovered that only US$26,295.22 remained. P brought proceedings against D in the District Court, seeking, inter alia, a declaration that D held the Investment Fund for her on resulting trust or alternatively, TT held the Investment Trust on express trust for P and D as TT’s agent was liable to P as constructive trustee; and an order that D return the Investment Fund in the HSBC account to her. P now applied for judgment in default against D.

Held, dismissing the application, that:

  • TT was not a party to the proceedings and there being no evidence that P had given notice to it, the Court could not make any order against TT in respect of P’s alternative case based on express trust. (See para. 9.)
  • It was inappropriate to grant the relief sought by default judgment, inter alia, on P’s pleaded case. As P had not alleged any fraud, the dispute between P and TT was a contractual one, and its resolution depended on the terms of their agreement. The only wrongful act on D’s part was allowing the Investment Fund to be transferred out of the HSBC account for “purposes unrelated to investment”, but P had not pleaded particulars of this allegation. (See paras. 11–13)
  • Further, contrary to para.4 of Practice Direction 27, P had not pleaded why her claim fell within the jurisdiction of the District Court or specified which of ss. 32–39 of the District Court Ordinance (Cap. 336) applied. P’s claim was for a declaration that a trust subsisted, but s. 37(2) of the Ordinance limited the maximum amount of the fund subject to the trust to HK$1 million. On P’s pleaded case, the value of the entire Investment Fund was about HK$1,014,800 and therefore outside the Court’s jurisdiction. (See paras. 15–17.)
  • As for P’s plea that she would relinquish that part of her claim in excess of the Court’s jurisdiction, s. 34(1) of the Ordinance was of no assistance. First, s. 34(1) concerned monetary claims and P was seeking declaratory relief. Second, reading P’s statement of claim as a whole, a trust relating to the entire Investment Fund, and not any lesser amount, subsisted. (See paras. 18–19.)

Application

This was an application by the plaintiff for default judgment against the defendant on the ground it had failed to file and serve a defence. The facts are set out in the judgment.

Jurisdictions: 

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