BCPE Diamond Holdco SRL v Sunwe Plastic HK Limited & Ors

 [2024] HKCFI 3370 addresses two fundamental issues central to the law of unjust enrichment: (1) whether the defendants’ enrichment was ‘at the expense of the plaintiff’, and (2) whether their enrichment was ‘unjust’. The decision involved a victim of cyber fraud who successfully brought claims against indirect recipients of misappropriated assets.

On the first issue, Mr Recorder Eugene Fung SC applied the ‘direct transfer rule’ laid down by the UK Supreme Court in 

[2018] AC 275. The effect of this is that the ‘at the expense of’ requirement will generally only be met where the plaintiff has directly provided a benefit to the defendant. Although 

 recognises a number of scenarios as being ‘equivalent to a direct transfer’, the burden lies squarely on the plaintiff to specifically plead and prove the availability of those exceptions, particularly in an Order 14 application. On the facts, the Plaintiff successfully invoked the tracing exception, applying the presumptions in 

On the second issue, the Court made clear that while ‘mistake’ may have been the correct basis to show why a 

 recipient’s enrichment was ‘unjust’, the Plaintiff could not have been labouring under any mistaken belief regarding 

 recipients as the Plaintiff was simply unaware of their existence. In this regard, the Court gave express recognition to ‘want of authority’ as the proper unjust factor. The Court surveyed a number of English, Australian and New Zealand authorities on claims against indirect recipients in reaching this conclusion.

, instructed by Deacons, acted for the Plaintiff.

, instructed by Bobby Tse & Co, acted for the 5

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Recognition of ‘Want of Authority’ as Unjust Factor in Claims Brought Against Indirect Recipients

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