Haldanes, Solicitors and Notaries > Hong Kong, Hong Kong > Firm Profile

Haldanes, Solicitors and Notaries
7TH FLOOR, RUTTONJEE HOUSE
11 DUDDELL STREET, CENTRAL
HONG KONG
Hong Kong

Hong Kong > TMT Tier 3

Haldanes, Solicitors and Notaries’s media and entertainment group is praised for its ‘understanding and insights’ in the film, television and music industries. Representative work for the team ranges from financing and distribution to artist and talent agreements. Practice head John McLellan is a regional powerhouse for commercial transactions in the APAC region, while Michael Leow’s expertise lies at the intersection between corporate and commercial law and media. Regulatory issues concerning internet streaming and broadcasting make up part of Weiken Yau’s practice and Anthony Leung is another key contact in the group.

Practice head(s):

John McLellan

Other key lawyers:

Testimonials

‘John McLellan and his team at Haldanes have deep understanding and insights in the subject matters and has been instrumental in helping our firm navigate the complicated landscape.’

‘John McLellan takes time to fully understand the issues at hand and comes up with solutions regardless of the difficult nature of the matters at hand.’

Key clients

3125c HK Co. Ltd/CLOT/Edison Chen

Animoca Brands Limited

blackx Pte Ltd

Kobalt Music

Lam Ka Him Terence 林家謙

MOFO MUSIC LIMITED

Mount Bina Holdings Ltd

Thriving Influence Limited

Wave Films Pte Ltd.

ANTA International Limited

Giraffe Pictures Pte Ltd

Cathay Film Company Pte. Ltd.

The Klockworx Co. Ltd

CJ ENM Hong Kong Limited

Brain Motion SAS

Base Entertainment Indonesia

Work highlights

  • Advising Blackx Music Fund on its corporate structure and the acquisition of a music publishing portfolio in Taiwan.
  • Advising Kingpyn Holdings Limited and Mount Bina Holdings Limited on various agreements and their corporate structure.
  • Advising ANTA International Limited on its sponsorship agreement and endorsement agreement with NBA player Klay Thompson.

Hong Kong > Regulatory: white-collar, compliance and investigations Tier 4

Since it was established in 1975, independent Hong Kong-based firm Haldanes, Solicitors and Notaries has had a core focus on defending clients in criminal mandates and has developed ‘a strong reputation in handling white-collar crime’ and anti-corruption matters. The team, which is led by the vastly experienced Felix Ng, is highly adept at handling enforcement and investigation proceedings before a myriad of agencies, including SFC, HKMA, and ICAC, with many of the matters involving cross-border considerations and involvement from other international regulators. Native Mandarin and Cantonese-speaking partner Paul Wang has developed a strong reputation advising on complex commercial criminal matters often involving a significant nexus to the mainland, where he is appreciated for his ability to provide ‘clear and pragmatic advice’. The ‘unbelievably hard working, clever and caring’ associate Christina Ma is also developing an excellent reputation in the field, regularly working alongside Wang on high-profile matters, including cases of fraud and money laundering.

Practice head(s):

Felix Ng

Other key lawyers:

Geoffrey Booth; Andrew Powner; Paul Wang; Timothy Wan; Florence Yan; Christina Ma

Testimonials

‘The team has always provided exceptional support. Their preparation is intelligent, well organised and researched, thorough, flexible and ongoing. You could not ask for better.’

‘Haldanes is one of the leading criminal law firms in town with a strong reputation in handling white-collar crime matters. It has a strong team of criminal practitioners who are able to help clients in complex matters on short notice.’

‘Paul Wang is intelligent and intuitive with a positive, cheerful and outgoing personality. He provides a strong and safe link across the border for those in need of help on the other side. He is warm and caring towards even difficult clients and inspires their trust and confidence.’

‘Paul Wang is a up and coming junior partner who is excellent in dealing with his clients’ needs at any time of the day. Clients appreciate his clear and pragmatic advice.’

‘Christine Ma is a delight to work with. The professional bond between her and Paul Wang is key to the quality of their work and a pleasure to see. Christina is unbelievably hard working, clever and caring.’

When it all started 45 years ago, we had an abacus to do our accounts, an air conditioner which saw its main function as being to drip on people, and a filing system held together by sticky tape and goodwill.

With a staff of fewer than 12 people, including the lawyers, we spent our days running between our tiny law firm and the courts, fighting the antique typewriters in the office and dragging ourselves out at all hours to help clients in distress.

We’ve come a long way since then.

From making our reputation with mainly Criminal Defence, we now excel in a wide range of legal areas – matrimonial and family, media and entertainment, competition law, civil litigation and dispute resolution, intellectual property, corporate and commercial, fraud and asset, property and conveyancing, securities, regulatory and discipline and private clients.

Not only are we the first Hong Kong law firm with two criminal and one civil solicitor advocates with the right to appear in High Court jury trials and all appellate courts, but we also have partners who are practising in England and Wales, Dubai International Financial Centre, and the Greater Bay Area of Mainland China.

And with the implementation of the new National Security Law (NSL) we’ve been advising international press and social media organisations on NSL-related matters, as well as providing seminars to international press agencies and companies on the law’s implications.

But through all the changes, the multiple-legal awards, the installation of a wonderful team of dedicated lawyers, the media recognition, and the precedent-setting legal wins, one thing hasn’t changed.

That’s our ethos.

Without it, we couldn’t have become one of the top law firms in Hong Kong.

It’s simple.

But it defines us today, just as it did 45 years ago.

“Put your clients first.”

It’s something we’ve kept at the forefront of everything we do as a law firm and as lawyers.

And because we’ve never lost sight of this one essential, our talented team now have a reputation that is second to none for providing our clients with the help they need, when they need it, across all practice areas.

So, it’s been an eventful four decades and more.

We’ve learned a lot and come a long way.

Our air conditioning is better for one thing, and we’ve stopped using the abacus.

Department Name Email Telephone
Criminal Defence Jonathan Midgley midgley@haldanes.com (852) 2391 4441
Criminal Defence, Securities, Regulatory and Disciplinary, Matters Matrimonial & Family Law Geoffrey Booth GNBooth@haldanes.com (852) 2868 1234
Corporate and Commercial, Media and Entertainment John McLellan jpm@haldanes.com (852) 2230 2868
Criminal Defence, Securities, Regulatory and Disciplinary Matters Andrew Powner powner@haldanes.com (852) 2230 2887
Civil Litigation and Dispute Resolution Paul Lui paul.lui@haldanes.com (852) 2230 2813
Civil Litigation and Dispute Resolution Patrick Rattigan patrick.rattigan@haldanes.com (852) 2230 2881
Criminal Defence, Securities, Regulatory and Disciplinary Matters, Competition Law Felix Ng felix.ng@haldanes.com (852) 2230 2887
Matrimonial and Family Law Elsie Liu elsie.liu@haldanes.com (852) 2230 2895
Civil Litigation and Dispute Resolution, Trusts, Probate and Wills Yu Kew Leung yukew.leung@haldanes.com (852) 2230 2812
Corporate and Commercial, Media and Entertainment Michael Leow michael.leow@haldanes.com (852) 2230 2876
Civil Litigation and Dispute Resolution Henry Ma henry.ma@haldanes.com (852) 2230 2848
Trusts, Probate and Wills, Private Client William Ahern william.ahern@haldanes.com (852) 2230 2858
Matrimonial and Family Law Willard Li willard.li@haldanes.com (852) 2230 1406
Civil Litigation and Dispute Resolution Nathan Wong nathan.wong@haldanes.com (852) 2230 2856
Matrimonial and Family Law Anita Leung anita.leung@haldanes.com (852) 2230 1406
Corporate and Commercial Media and Entertainment Weiken Yau weiken.yau@haldanes.com (852) 2230 2877
Intellectual Property Tim Hancock tim.hancock@haldanes.com (852) 2868 1234
Partners : 16
Solicitors : 20
English
Chinese (Cantonese and Mandarin)
French
Spanish
Chartered Institute of Arbitrators
Hong Kong International Arbitration Centre (HKIAC)
International Bar Association (IBA)
International Association of Entertainment Lawyers (IAEL)
The Law Society of England and Wales
The Law Society of Hong Kong

Email, telephone and deception cases surge in Hong Kong

Introduction

In recent years, there has been a surge in the number of email scams, telephone scams and other types of deception cases in Hong Kong, resulting in hundreds of thousands or even millions of dollars being misappropriated.  Examples include:

  1. scammers mimicking the email account of a senior official (often the CEO) of a company and sending fictitious emails to victims asking them to transfer funds to designated account(s) in the fraudsters’ control; and
  2. fraudsters pretending to be government officers, calling victims and then alleging the victims have been involved in some sort of crime and demanding they disclose their bank account details.

In most cases by the time the victims discover the fraud and report it to the police and their banks, the accounts have already been emptied.  In a few cases, the police are able to trace at least part of the misappropriated funds and attempt to freeze them by way of a “no-consent” letter to the relevant bank (discussed further below).  It’s then up to the victim to try to recover the frozen funds by taking civil action.

This article will examine the different stages needed to recover fraudulently-obtained funds and provide an update on recent judicial developments in relation to the impact of the usage of the underground banking system, where money is transferred through informal rather than formal mechanisms, in these kinds of cases.

Reporting to the Police

As soon as a person becomes aware they have been the victim of a scam, the first step is to make a report to the police, either in person at a police station or online through an e-Report Centre. Time is of the essence as scammers are capable of cleaning out a bank account and then laundering the money through different accounts, sometimes in just minutes, or at the most, a few hours. The more time that passes before a report is made, the harder it becomes to trace the stolen funds.

To help the police investigation, a victim should collate all the documentary evidence in support of the fraud, like messages between the victim and the fraudster and bank transaction records.

The first step in the police investigation will be to try and trace the funds. Often the money will have been transferred by what is known as a first-layer recipient(s), usually the person(s) perpetrating the fraud, to a second-layer and third-layer recipient(s) and so on.  Where appropriate, the police will issue a “no consent” letter to the bank(s) whose clients have received part or all of the victim’s funds, stating that the police will not consent to the bank(s) dealing with their clients’ accounts.  Effectively those bank account(s) will be “frozen” and no one will be allowed to transfer money out of them.

The no-consent regime has been held by the Hong Kong Court of First Instance as unconstitutional in Tam Sze Leung v. Commissioner of Police [2021] HKCFI 3118.   It is currently unknown whether new legislation will be introduced to replace the no-consent regime.  If a substantial amount of funds are involved, the victim is advised to apply for an injunction order to formally freeze the funds in the recipient(s)’ accounts.

As the police are not in a position to return the fraudulently-obtained funds to the victim, what the victim should do next is to commence a civil action against the recipient(s).

In practice, the police may not disclose or share the results of their investigation with the victim, which means it is possible they may refuse to disclose the last known addresses of the recipients or the transaction details of the accounts.  In that case, the victim may have to apply for a Norwich Pharmacal order, an order for discovery against a third party, from the Court against the banks to obtain those details before commencing legal action.  In most cases, it is likely the bank will adopt a neutral stance and inform the Court it will abide by any court order.

Commencement of Civil Action

On receipt of the necessary information from the bank, the victim can then issue a Writ of Summons against the recipients for recovery of funds. For action(s) against first-layer recipients, it is often not difficult to establish the claim since they are implicated in the fraud itself. However, taking action against second-layer recipients and beyond, may be more difficult, as the victim may not necessarily have the evidence they need to prove the recipient(s) knew about the fraud. In general, the victim will have a prima facie claim to the money and can assert a proprietary claim against a recipient for any fraudulently-obtained funds traceable to them, subject, of course, to any defence the recipient may put forward.

Available Defences

If the defendant doesn’t contest the claim, then the victim can proceed to obtain a default judgment against them, but in some cases, the defendant, particularly second-layer recipients or beyond, may contest the claim.  There are two typical defences put forward in these cases (a) bona fide purchaser defence and (b) change of position defence.

(a) Bona fide purchaser defence

One common defence a recipient may try to establish is that they were a bona fide purchaser for value without notice, in other words, they received the money in consideration of goods or services provided by them.

The burden is on the defendant to prove they are a bona fide purchaser and did not have actual or constructive notice of the existence of a proprietary right in the funds.  Generally speaking, such a defence can be defeated if it can be shown that a reasonable person with the attributes of the defendant should either (a) have appreciated based on the facts available to them that a proprietary right probably existed; or (b) should have made inquiries or sought advice that would have revealed the probable existence of such a right.

(b) Change of position defence

This defence is available to an innocent recipient of the funds where they have changed their position as a result of receiving those funds in good faith.

For this defence to succeed, the recipient of the funds will need to prove two elements:-

  1. There is a causative link between their receipt of the funds and their change of position so that if it were not for the receipt of the funds their position would not have changed; and
  2. The change in the defendant’s position makes it inequitable in all circumstances to require them to make restitution to the plaintiff.

The impact of usage of underground banking system

A typical pattern in email fraud cases is for the recipients, usually, the second-level recipients and beyond, to claim they are parties to genuine commercial transactions and they have no knowledge of the fraud itself, and that they received the tainted money because they made use of the “underground banking system,” described as any informal banking arrangements that run parallel to, but are generally independent of, the formal banking system. Underground banking systems are also referred to as alternative remittance systems.

As an example, due to stringent currency control in Mainland China, it is difficult for someone in the Mainland to pay a person in Hong Kong. Although it is unlawful, what they will do is work with a currency broker, paying a sum in RMB to an account in the Mainland designated by the broker, who in turn will pay into the receiving party’s Hong Kong account. Nominee accounts are often used by the broker throughout the process and it is not uncommon that tainted money is involved.

Often, recipients who receive tainted money through the underground banking system will raise both defences of bona fide purchaser and change of position. However, this kind of underground banking system has been held by Hong Kong courts to be a violation of Mainland foreign exchange laws, which has raised the issue of how this illegality will impact the two defences.

Currently, the Hong Kong courts at the first instance level have adopted conflicting views.  In DBS Bank (Hong Kong) Ltd v Pan Jing [2020] HKCFI 268, in a hearing for an application for a summary judgment against a defendant who was a second-layer recipient of tainted money, Deputy High Court Judge (DHCJ) Blair held that the illegality of the currency exchange itself rendered the defendant unable to rely on both the bona fide purchaser and change of position defences. The judge granted summary judgment in favour of the Plaintiff, adding the decision was justified on the basis of public policy considerations regarding breach of exchange control regulations.

In Idemitsu Chemicals (HK) Co Ltd v Brilliant One Shipping Company Ltd [2021] HKCFI 1175, concerning the defendant’s application to discharge an injunction order, DHCJ Liu cited DBS Bank v Pan Jing in his decision to dismiss the application, taking the view that both defences of bona fide purchaser and change of position would not be open when the defendant was aware the funds had come through the underground banking system.

However, in Lesnina H DOO v Wave Shipping Trade Co Ltd [2022] 2 HKLRD 727, where DHCJ Dawes SC came to an opposite view and held the “absolute” approach adopted in DBS Bank v Pan Jing was problematic, saying the Court should take a more proportionate approach on the question of illegality, by measuring the gravity of the defendant’s criminal conduct against the impact of allowing the defence of change of position, an approach taken from the UK Supreme Court case Patel v Mirza [2016] UKSC 42.  DHCJ Dawes SC held the case should go to trial for more detailed consideration, and refused to grant summary judgment for the Plaintiff and granted the Defendant unconditional leave to mount a defence.

However, the ruling in Lesnina H DOO was not followed in a recent District Court case Ling Weixian v Tsoi Ai Tong [2022] HKDC 967, where the Deputy Judge instead followed the line taken in DBS Bank v Pan Jing and granted summary judgment in favour of the Plaintiff.

As the matter now stands (September 2022), these conflicting decisions have yet to be resolved and it appears clarification from a higher court is urgently needed in relation to the principle of illegality in general.  The current state of the law would certainly add uncertainty to Plaintiff’s strategy in an email fraud case, especially if they intend to make an application for summary judgment.

Haldanes is an independent Hong Kong-based law firm which provides service on all aspects of litigation and arbitration.  We have extensive experience in representing victims of email fraud cases.  For more details, please go to our online profile at [https://www.haldanes.com].

Disclaimer: This article is provided for information purposes only and does not constitute legal advice.

Haldanes

When it all started 45 years ago, we had an abacus to do our accounts, an air conditioner which saw its main function as being to drip on people, and a filing system held together by sticky tape and goodwill.

With a staff of fewer than 12 people, including the lawyers, we spent our days running between our tiny law firm and the courts, fighting the antique typewriters in the office and dragging ourselves out at all hours to help clients in distress.

We’ve come a long way since then.

From making our reputation with mainly Criminal Defence, we now excel in a wide range of legal areas – matrimonial and family, media and entertainment, competition law, civil litigation and dispute resolution, intellectual property, corporate and commercial, fraud and asset, property and conveyancing, securities, regulatory and discipline and private clients.

Not only are we the first Hong Kong law firm with two criminal and one civil solicitor advocates with the right to appear in High Court jury trials and all appellate courts, but we also have partners who are practising in England and Wales, Dubai International Financial Centre, and the Greater Bay Area of Mainland China.

And with the implementation of the new National Security Law (NSL) we’ve been advising international press and social media organisations on NSL-related matters, as well as providing seminars to international press agencies and companies on the law’s implications.

But through all the changes, the multiple-legal awards, the installation of a wonderful team of dedicated lawyers, the media recognition, and the precedent-setting legal wins, one thing hasn’t changed.

That’s our ethos.

Without it, we couldn’t have become one of the top law firms in Hong Kong.

Unhappy Beneficiaries? Three key ways to remove an unfit executor in Hong Kong.

A lot of care and effort normally goes into choosing the right person to act as the executor of a will.

Updating Hong Kong’s Copyright Regime for the Digital Age

After two failed attempts in 2011 and 2014 to amend Hong Kong’s copyright regime due to a severe backlash over concerns about potential abuse and possible restrictions on free speech, the latest amendment is due to finally pass into law.

Are lawyers boring?

It’s a question many have asked, but few have genuinely answered. Find out the truth in the latest Haldanes Law Matters podcast as Jonathan Midgley talks to Ian Winter, KC from Cloth Fair Chambers, rally driver, cyclist, saxophonist … oh and yes, very in-demand lawyer.