YONG LI INVESTMENTS LTD AND ANOTHER v. LEE SING LEUNG ROBIN

HCA 1050/2015 and HCA 542/2016

(Consolidated)

[2026] HKCFI 2341

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NOS 1050 OF 2015 AND 542 OF 2016

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(Consolidated pursuant to the Order of
Master Gary CC Lam dated 29 January 2018)

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J U D G M E N T

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A.   INTRODUCTION

1.  This protracted litigation concerned events which took place over 16 years ago between two former friends and their disputes over their business dealings.

2.  The present two actions, HCA 1050/2015 and HCA 542/2016 have been consolidated (“Consolidated Actions”). Prior to these two actions, there was an earlier action HCA 1367/2010 (“2010 Action”)  and a trial took place before the then Recorder A Chow SC (“Recorder Chow”)  who handed down a judgment on 28 June 2013 (“Chow Judgment”)[1]. The defendant herein was the same defendant in the 2010 Action and he was absent during that trial but Recorder Chow decided to proceed in his absence, and the reasons have been set out in the Chow Judgment[2].

3.  Counsel Mr Felix Ng appeared on behalf of the plaintiffs (“Ps”)  in this trial, and Counsel Mr Kenny Kwok appeared on behalf of the defendant Lee Sing Leung, Robin (hereinafter referred to “D” or “Robin”).

4.  The present trial was originally scheduled to take place on 1 September 2025, but at last minute, Robin applied for an adjournment on the ground of his health condition.  His application was allowed and the trial was adjourned and re-fixed before this Court.

B.    BACKGROUND

5.  The two former friends were Mr Lee Shing (“Shing”), now deceased, and Robin.

6.  Shing’s evidence was that they first met in about 2006 or 2007 but it was Robin’s evidence during the present trial that they met for the first time in early 2009 and became close friends after Robin “saved” Shing when the latter had an accidental fall during their visit to a gold mine in the first quarter of 2009. 

7.  In early 2009, Shing was an executive director and the chief executive officer of a company listed on the Main Board of the Hong Kong Stock Exchange (“Main Board”)  now called Wuling Motors Holdings Limited (Stock Code: 305)[3] (“Wuling Motors”).  Shing was a major shareholder of Wuling Motors[4].  Shing and his wife Madam Kwan To Yin (“Madam Kwan”)  also owned a private limited company called Dragon Hill Development Limited (“Dragon Hill”)  of which Shing was the sole director[5].

8.  In 2009, Robin already had over 26 years of experience in banking/financial services/mergers and acquisitions in Hong Kong, Mainland China and South Africa, and was the Chairman and legal representative of a company SSC Mandarin Financial Services Limited (文華新城理財顧問有限公司, 簡稱 “文華新城”)  (“SSC Mandarin”)[6]. 

9.  According to Robin, he became the Chairman of the Board and legal representative of a sino-foreign joint venture company SSC Sino Gold Mining Investment Limited (文華中金(北京)礦業投資顧問有限公司, 簡稱 “文華中金”)  (“SSC Sino Gold ”)[7] in 2004, and at about end of 2007, SSC Sino Gold acquired 80% of a Mainland mining company Tongguan Taizhou Mining Company Limited (“Taizhou Mining”).  Taizhou Mining held exploration and mining rights for gold and precious metals in Mainland China. Through a further joint venture at end of 2007, Taizhou Mining was injected into a limited company incorporated under the laws of Cayman Islands and listed on the GEM Board of the Hong Kong Stock Exchange (Stock Code 8299), which thereafter changed its name to Grand TG Gold Holdings Limited (“Company”).  SSC Sino Gold and Taizhou Mining became subsidiaries of the Company[8].

10.  Robin also owned and controlled at least two other private companies, namely, one incorporated under the law of British Virgin Islands called Golden Contest Limited (“Golden Contest”), and the other one called Golden Garden Limited (“Golden Garden” or “GG”)[9].

11.  According to Robin, the Hong Kong billionaire Mr Cheng Yu-Tung (now deceased)  (“Mr Cheng”)  was interested in investing in the Company in 2008 and Mr Cheng and his company Chow Tai Fook Nominee Limited (“CTF”)  then became significant shareholders of the Company.

12.  What was not disputed was that on 3 September 2008, Robin and his company Golden Contest entered into a loan agreement with CTF[10], whereby CTF granted a loan of HKD 60,000,000 to Golden Contest as borrower with Robin as a guarantor (“CTF Loan Agreement”).  It was Robin’s case that the loan was obtained for the use and benefit of the Company and not because he personally was in financial difficulties.  The loan was secured by amongst other things, (i) a total of 362,000,000 issued shares of the Company, (ii)  convertible bonds of a face value/principal amount of a total HKD 241,920,000 due in 2013[11] (“Convertible Bonds”); and (iii)  promissory note/s issued by the Company in the principal amount of HKD 78,240,000 (“Promissory Note B”)[12].

13.  It was not disputed that in 2008 Robin and his affiliates, a Lee Wing Leung and a company called Rubional Holdings Limited (Lee Wing Leung and Rubional will be referred to herein collectively as “Affiliates”)  had also borrowed funds from 4 different fund companies.  According to Robin, those borrowed funds were used at the end of 2007 to acquire the Company for the purpose of injecting SSC Sino Gold and Taizhou Mining into the Company[13]. Robin and the Affiliates were unable to repay and on 29 April 2009, they entered into a settlement agreement with each of the 4 fund companies (collectively referred to as “4 Settlement Agreements”)  to repay to each of them respectively HKD 8,572,000, HKD 4,276,000, HKD 4,640,000 and HKD 2,512,000 on or before 28 October 2010, and such repayments to be secured by charges of shares of the Company (collectively referred to herein as the “4 Share Charges”).  The 4 fund companies will be referred to respectively as Chargee A, B, C, D ^[14] (collectively the “4 Chargees”).

14.  According to Robin, as Shing was interested in investing in the Company, in June 2009, he and Shing had an oral agreement (“June 2009 Co-operation Agreement”)  with 5 main terms, the first of which concerned the sale and purchase of shares in the Company and the other four terms concerned the management rights.  The pleaded terms will be set out later in this judgment.

15.  Shing denied the existence of the above oral agreement, and his evidence was that all the agreed terms between them were recorded and contained in the Chinese Agreement (defined below).

16.  What was not disputed was that on about 3 July 2009, Shing acquired a limited company incorporated in the Republic of Seychelles called Yong Li Investment Limited (“YLIL”), which was controlled and beneficially owned by Shing.  YLIL is the 1^st plaintiff in the Consolidated Actions. 

17.  According to Robin, it was at about this time Mr Cheng and/or CTF wanted to withdraw their investments in the Company, and CTF then sought repayment of its loan to Robin/Golden Contest.  Robin and Golden Contest negotiated with CTF a settlement, the terms of which were contained in an agreement dated 9 July 2009 (“CTF Settlement Agreement”)[15] .

18.  As at 9 July 2009, Mr Cheng and CTF each held 302,000,000 shares, i.e. each about 11.07% of the listed shares of the Company, whereas Robin held 765,630,000 shares or 28.07% [16].

19.  Under the CTF Settlement Agreement, a total sum of HKD 65,546,220 (principal and interest)  was to be repaid by 5 monthly instalments on the 9^th day of each month commencing from 9 July 2009, with the first 4 monthly instalments each of HKD 12,000,000 , and the 5^th  instalment, being the  balance of HKD 17,546,220 payable on 9 November 2009 ( the instalments will be referred to hereinafter as respectively  “1^st Instalment”, “2^nd Instalment”, “3^rd Instalment”,  “4^th Instalment”, and “5^th Instalment”). 

20.  As set out in the CTF Settlement Agreement , subject to the proviso and  the payment of the 1^st Instalment  on 9 July 2009 and compliance with the conditions sets out in clauses 1.2 and 1.3, CTF was to release 100,000,000 of the charged shares of the Company to Robin absolutely and CTF undertook to procure the release of the balance of the shares held by CTF, namely 262,000,000 shares to Shing on condition the same number of the shares was to be charged to CTF at the same time by Shing by way of execution of a share charge; and CTF was to release  Convertible Bonds of a principal amount of HKD 40,000,000  (“Released Convertible Bonds”)  to Robin absolutely. The balance of the Convertible Bonds of principal value of HKD 201,120,000 (“Balance of Convertible Bonds”)  was to be released to Robin absolutely upon full repayment of the loan and compliance with all the terms in the CTF Settlement Agreement [17].

21.  The conditions in clause 1.3 included amongst other things, the following:

(1)  Robin and Golden Contest to ensure 3 registered holders of 73m shares of “another listed company”, namely Wuling Motors shall charge the said shares in favour of CTF, and that should the closing price per share was to fall below the price stated therein, Robin and Golden Contest and/or Shing was, at the option of CTF, immediately deliver sufficient number of shares in Wuling Motors to CTF;

(2)  Robin and Shing each to provide a personal guarantee for the due performance of the terms of the CTF Settlement Agreement.

22.  On the same day that Robin entered into the CTF Settlement Agreement with CTF, he and YLIL entered into a Chinese sale and purchase agreement dated 9 July 2009 (“Chinese Agreement”)[18] whereby Robin as vendor agreed to sell a total of 312,000,000 of the issued shares of the Company to YLIL as the purchaser, and the consideration of the sale was HKD 31,200,000. According to Shing, as part of the consideration and at the request of Robin, a sum of HKD 12,000,000 was paid by Shing by way of a cashier order directly payable to CTF[19].   The purchase was duly completed on 10 July 2009.

23.  It was Robin’s written evidence that in July 2009, Shing indicated to Robin that he wanted to acquire more shares in the Company after purchasing the 312,000,000 shares pursuant to the Chinese Agreement, and they then had an oral agreement (“July 2009 Oral Agreement”). Suffice to say at this stage, the terms of the  July 2009 Oral Agreement were alleged to be , amongst other things, that Shing would be responsible to pay CTF the 1^st, 4^th and 5^th Instalments under the CTF Settlement Agreement, and that upon paying the 4^th Instalment of HKD 12,000,000 on behalf of Robin,  Robin would transfer to Shing  convertible bonds of principal amount of HKD 81,228,000 issued by the Company  (“81.228m CB”)  , and upon paying the 5^th Instalment of HKD 17,548,220 on behalf of Robin , Robin would transfer to Shing a promissory note of face value of HKD 50,856,000 issued by the Company (“50.856m PN”).

24.  Shing denied the existence of the July 2009 Oral Agreement.  It was however Shing’s case that he and Robin executed a deed in Chinese dated 16 July 2009 (“Deed”), which provided, amongst other things, and subject to the terms therein, Under the Deed, Shing was to help Robin repay the 1^st, 4^th and 5^th Instalments to CTF under the CTF Settlement Agreement[20]. It was provided by the Deed that, amongst other things, that in consideration of Shing repaying the 4^th Instalment of HKD 12,000,000 on behalf of Robin, Robin was to transfer to Shing the 81.228m CB, and in consideration of upon Shing repaying the 5^th Instalment of HKD 17,546,220 on behalf of Robin, Robin was to transfer to Shing 50.856m PN.   Other relevant terms of the Deed will be set out later in this Judgment. Initially, in his pleadings, Robin’s case was he did not recall signing the Deed.

25.  It was not disputed that Shing was appointed as an executive director of the Company on 17 July 2009. Robin was also appointed an executive director on the same day[21]. Prior thereto, Robin was only a non-executive director.

26.  According to Shing’s written evidence, in August 2009, Robin had difficulty in repaying the 2^nd and the 3^rd Instalments to CTF under the CTF Settlement Agreement, and that Robin requested Shing to vary the Deed in that instead of the 4^th and 5^th Instalments, Shing was to help Robin to repay the 2^nd and the 3^rd Instalments instead, subject to certain terms (“1^st Oral Agreement about the Note”). Briefly, Shing would get the 81.228m CB upon repaying the 2^nd Instalment on behalf of Robin, and the 50.856m PN upon repaying the 3^rd Instalment on behalf of Robin.  The 1^st Oral Agreement about the Note was then recorded in a letter dated 15 September 2009 endorsed by Shing and Robin by signing thereon (“Letter”).

27.  Again, initially in his pleadings, Robin’s case was he did not recall signing on the Letter.

28.  Thereafter, according to Shing, in August 2009, Robin requested him to assist again in making debt restructuring arrangements with his other creditors and asked whether YLIL could provide 50 million issued shares of the Company as security by way of charging the same in favour of Robin’s creditors. Shing said initially he was not interested. The creditors Robin was referring to turned out to be the 4 Chargees mentioned earlier. 

29.  Eventually, Shing said he acceded to Robin’s repeated requests but before the 4 Share Charges were executed,  he (on behalf of YLIL)  and Shing entered into an oral agreement under which Shing/YLIL agreed to  provide Robin with 50 million shares of the Company subject to 3 conditions (“3 Conditions”), namely (i)  Robin would carry out his obligations under the Settlement Agreements; (ii)  Robin would within 2 weeks after the execution of the Settlement Agreements/Share Charges deliver to Shing the Settlement Agreements; and (iii)  if YLIL’s shares were to be transferred to someone else and YLIL were to suffer any loss, Robin was to indemnify YLIL of such loss (“Oral Agreement”).

30.  The 4 Share Charges were then duly executed by Robin/YLIL respectively to the 4 Chargees on 9 September 2009, charging a total of 50 m shares held by YLIL to secure repayment obligations by the borrowers (namely Robin and/or the Affiliates)  under the 4 Settlement Agreements. 

31.  Thereafter, on 28 September 2009, Robin and the Affiliates entered into a supplemental settlement agreement with each of the 4 Chargees, pursuant to which each of the 4 Chargees executed a deed of waiver dated 28 September 2009 in favour of Robin and the Affiliates, agreeing to reduce the amount of indebtedness by half [22]. It would appear from the Chow Judgment that copies of these supplemental settlement agreements were not provided to Shing/YLIL at the time.

32.  Anyway, it was Robin’s written evidence that there was an oral overall global  settlement agreement between him and  Shing (on behalf of YLIL)  in December 2009 , in that Robin would transfer to YLIL  the 81.228m CB  out of the Balance of Convertible Bonds held by Robin   to settle YLIL’s  claims in relation to his transfer of 50 m shares to the 4 Chargees and also to settle  Shing’s claims over his payments for the 2^nd and the 3^rd Instalments  to CTF , and all other monetary disputes between them (“December 2009 Settlement Agreement”).

33.  Thereafter, according to Robin, on 8 December 2009, he duly transferred the 81.228m CB to YLIL which was completed on 29 December 2009[23] .

34.  According to Robin, Shing/YLIL exercised their rights under the 81.228 CB on 28 December 2009 and obtained 1,160,400,000 shares of the Company, and as the shares were traded at HKD 0.133 each on 29 December 2009, Shing/YLIL would have made a profit of no less than HKD 25,528,800[24].

35.  Shing denied there was the December 2009 Settlement Agreement, or any global settlement agreement with Robin.  According to Shing’s written evidence, in early 2010, there was another oral agreement between him and Robin, and that Shing agreed to forebear to sue Robin over his non-compliance with the terms of the Deed and the Letter, and Robin agreed to transfer the 50.856m PN to Shing by December 2010 (“2^nd Oral Agreement about the Note”). 

36.  Robin denied that there was the 2^nd Oral Agreement about the Note.  It was Robin’s case that it was announced by the Company in a public announcement on 24 December 2009 (“24.12.09 Announcement”)[25]  in relation to capitalisation of debts, and it was stated therein that the Company owed Robin HKD 31,355,366 and that Robin had exercised the rights under the Promissory Note B and acquired shares of the Company at HKD 0.11 each.  It was Robin’s case that as the public announcement was signed by Shing on behalf of the Company, Shing was thus aware that the rights under the Promissory Note B had been exercised by him and another and there was no 50.856m PN, and hence the 2^nd Oral Agreement about the Note did not exist.

37.  According to Robin, at end of March 2010, he and Shing were still in a very good relationship, and that they went to Taizhou Mining to participate in the groundbreaking ceremony for its mining factory, and that the construction of the factory was to take 3 years. There was also a public announcement by the Company on 6 April 2010.  However, it appeared that by May 2010 the relationship between Shing and Robin had deteriorated as Shing/YLIL instructed their solicitors to write to Robin enquiring whether Robin and the Affiliates had complied with the terms of the 4 Settlement Agreements and seeking release of the shares charged under the 4 Share Charges. 

38.  The 2010 AGM of the Company was scheduled to take place on 16 August 2010 (“2010 AGM”). According to Robin, even 5 days prior to the AGM, with the consent of Shing, he was giving interviews to the media about the Company.  Then, during the 2010 AGM, according to Robin, without any warning, Shing and his related persons voted against Robin being re-elected as an executive director of the Company and Robin was thereafter removed from all his posts at the Company.

39.  On 9 September 2010, YLIL issued the 2010 Action against Robin over Robin’s breach of the Oral Agreement, in that Robin failed to deliver to YLIL the 4 Settlement Agreements within 2 weeks after the execution of the 4 Share Charges or at any time thereafter.

40.  It was not disputed that about two months later, on 11 November 2010, the Company suspended trading of its shares on the GEM Board[26]. According to Robin, this was because after his removal as an executive director, Shing was in control of the management of the Company and as Shing lacked experience in managing mines, he was not able to co-operate with other shareholders.

41.  As Robin and the Affiliates failed to meet their obligations for repayments to the 4 Chargees under the 4 Settlement Agreements, in exercise of their rights under the 4 Share Charges, the 4 Chargees transferred the 50 m shares to themselves or their nominee/s on 11 and 17 January 2011.

42.  The trial in the 2010 Action eventually took place on 11 and 13 June 2013.  Shortly before the commencement of the trial, Robin sent a letter to Recorder Chow to seek and adjournment as he was unable to attend the trial due to sudden acute health problems, including high blood pressure level and other symptoms and that he was sent to Ruttonjee Hospital. As seen in the Chow Judgment, Recorder Chow proceeded with the trial for reasons including that the letter from the hospital did not provide any information regarding Robin’s medical condition, the diagnosis if any, or when it was expected that Robin could be discharged.  Recorder Chow heard oral evidence from Shing, and found that overall, as a fact, that Robin had agreed to the 3 Conditions in the Oral Agreement as consideration for YLIL’s execution of the 4 Share Charges and that those 3 Conditions were binding on Robin as an oral agreement between YLIL and Robin[27].

43.  As explained in the Chow Judgment, at that time Recorder Chow was only prepared to make an order that Robin was to deliver the 4 Settlement Agreements to YLIL, with liberty to YLIL to apply for delivery of further documents arising therefrom. In their statement of claim, YLIL had sought damages for the loss of the charged securities, but for reasons set out in the Chow Judgment, Recorder Chow did not make any order for damages at that time[28].

44.  Robin did not appeal against the Chow Judgment and on 20 September 2013, he sent to the solicitors for YLIL copies of the 4 Settlement Agreements as ordered by Recorder Chow[29].

45.  On 13 May 2015, YLIL commenced a new action, namely HCA 1050/2015 claiming against Robin damages for his breach of the Oral Agreement.   On 2 March 2016, Shing further issued an action HCA 542/2016 claiming against Robin for his breach of his obligations under the Deed as varied by the Letter and the breach of the 2^nd Oral Agreement About the Note and claiming damages as a result thereof.  On 29 January 2018, the two actions were consolidated.

46.  Shing unfortunately passed away in January 2022 and his widow Madam Kwan obtained an order to carry on the present litigation on behalf of Shing’s estate, being now the 2^nd plaintiff in the Consolidated Actions.

47.  Essentially, Ps’ claims in the Consolidated Actions are:

(i)  Damages for the loss of the 50m shares in the Company (“50m Shares Claim”);

(ii)  Damages arising from Robin’s failure to transfer the 50.856m PN to YLIL (“Promissory Note Claim”)

48.  Robin counterclaimed in the Consolidated Actions for damages arising from Shing’s breach of the June 2009 Co-Operation Agreement (“Robin’s Counterclaim”).

C.   LIST OF DISPUTED ISSUES

49.  The parties’ agreed list of disputed issues was dated 26 August 2025.

50.  By the time of the trial, in D’s Counsel’s Opening Submissions, it was indicated to the Court that Robin no longer challenged the existence of the Oral Agreement as found in the Chow Judgment, subject to Robin’s case that there was the December 2009 Settlement Agreement which formed an overall global settlement of all the parties’ then disputes.

51.  After hearing Ps’ witnesses, the Court was informed of 3 further concessions by Robin as follows:

(1)  That the signature on the Deed alleged to be his was his;

(2)  That the signature on the Letter alleged by to be his was his;

(3)  Robin would no longer rely on the July 2009 Oral Agreement as alleged and pleaded by him.

52.  At Closing Submissions, there was one further concession from Robin, in that Robin would not pursue “the blank space” issue on page 5 of the Deed[30]. D’s Counsel Mr Kwok further indicated that in light of Robin’s oral evidence, the abandonment by the parties of their respective obligations under the Deed and the Letter was part of terms of the December 2009 Settlement Agreement.

53.  As a result of Robin’s concessions, the remaining main factual issues can be largely grouped into the following:

(1)  Whether there was the June 2009 Co-Operation Agreement as alleged by Robin? If so, whether there was breach on the part of Shing?

(2)  Whether there was the December 2009 Settlement Agreement as alleged by Robin? If so, whether the Deed and the Letter were subject to the global settlement?

(3)  Whether there was the 2^nd Oral Agreement on the Note?

D.   APPROACH IN ASSESSING FACTUAL EVIDENCE

54.  On assessing factual evidence and a witness’s credibility, the correct approach has been summarised by DHCJ E Fung SC as he then was in his judgment dated 8 April 2014 in Hui Cheung Fai v Daiwa Development Ltd, HCA 1734/2009, at paragraphs 77-83[31]:

(1)  contemporaneous written documents and documents which came into existence before the problems in question emerged are of the greatest importance in assessing credibility;

(2)  in deciding whether to accept a witness’ account, importance should also be attached to the inherent likelihood or unlikelihood of an event having happened, or the apparent logic of events;

(3)  regard should be had to the consistency of the witness’ evidence with undisputed or indisputable evidence, and the internal consistency of the witness’ evidence;

(4)  care should be taken in drawing conclusions about truthfulness and reliability solely or mainly from the appearance of a witness or from the assessment of a witness’ character;

(5)  witnesses’ credibility should be tested by reference to the objective facts proved independently of their testimony, and regard should be had to their motives and to the overall probabilities.

55.  With the above principles in mind, I turn to the witnesses in the present action and their evidence in relation to the disputed issues.

E.    THE WINTESSES 

Ps’ witnesses

56.  Ps called 2 witnesses to give oral evidence at the trial: - 

(1)  Edward Lai Shi Hong (“Edward”), whose statement was dated 10 May 2019[32].

(2)  Lee Chi Ho (“Chi Ho”), whose witness statement was dated 17 January 2023[33];

57.  There was a witness statement from a Mr Cheng Kam Chiu Stewart dated 7 May 2019[34] but he was not eventually called.  His witness statement was not admitted.

58.  Edward met Shing at end of 2006 when Shing was the executive director and chief executive officer of Wuling Motors.  Edward later   joined Wuling Motors and he has been the company secretary and chief financial officer of Wuling Motors since 31 January 2007.  He had worked together with Shing.  Edward attended trial to confirm his written evidence that on 16 July 2009, he accompanied Shing to go to the offices of Messrs Patrick Mak and Tse who were the solicitors acting for Robin at that time.  Edward confirmed that he saw Shing and Robin signing on the Deed and that Edward himself and Robin’s solicitors Patrick Mak both then signed as witnesses to Robin’s and Shing’s respective signature. 

59.  Edward had also attended the 2010 AGM of the Company when the majority of the shareholders voted against the re-election of Robin as executive director.  Edward had voted as a proxy for HKSCC Nominees Ltd and Reach Gold Holdings Ltd[35]. When Edward was asked why he voted against Robin’s re-election, his answer was he only voted as proxies on behalf of owners of the shares, and he said he could not now recall who gave him the proxies save a Mr Tse. He also could not recall whether he had discussed with Shing regarding the voting or whether it was Shing who had asked him to vote against Robin’s re-election.

60.  As for Chi Ho, he is Shing’s son.  Chi Ho’s evidence was clear and succinct, and he gave straight forward answers.  He readily admitted there were parts of his father’s written evidence to which he had no personal knowledge and he only adopted those part of his father’s written evidence which he had personal knowledge.  Chi Ho had assisted his father in the preparation of these proceedings since the beginning and that he was either copied or shown all correspondences between his father his solicitors, and that he had also accompanied his father to attend conferences with solicitors or counsel in relation to the Consolidated Actions.   For those matters which his father had told him, Chi Ho admitted that he would have no way in knowing whether   his father had told him the truth or all the facts.  Having heard his evidence, I find Chi Ho a credible witness and accept his evidence to the extent of those matters which he had/has personal knowledge and/or supported by documentary evidence. 

61.  Shing had filed 3 witness statements before his death.

62.  Ps served a Hearsay Notice under section 47A of the Evidence Ordinance on 23 June 2023 to put D on notice of their desire to adduce Shing’s 3 witness statements by way of hearsay evidence[36].

63.  The law on hearsay evidence is not really disputed by the parties and will not be repeated herein.

64.  In short, this Court has discretion to give leave to adduce hearsay evidence and to consider the weight to be attached to it at the trial[37].

65.  Robin’s position was that Shing’s written evidence was admissible but they should be attached no or at most, very little weight. 

66.  It would not have been practicable to call Shing as he had passed away suddenly in January 2022.  There was no evidence to challenge Ps’ case that Shing passed away suddenly.  Shing was 64 years old at the time of his death.

67.  Shing’s 3 witness statements were made respectively in May 2019, January 2021, and January 2022.  The material events took place in 2009 and 2010.   Shing’s 3 witness statements were thus made some 10 to 12 years thereafter.  Even though Shing was said to be not able to read English, and his 3 witness statements were drafted in English.  However, Shing’s 1^st witness statement made in May 2019 did contain an interpretation paragraph and that the contents thereof were stated to be truly, audibly and distinctively interpreted to Shing in Cantonese by his solicitor.  Shing’s 1^st witness statement essentially contained all his evidence as to the Oral Agreement, the Deed, the Letter (which incorporated the terms of the 1^st Oral Agreement about the Note), and also Shing’s evidence as to the 2^nd Oral Agreement about the Note.  Shing’s 2^nd witness statement was made mainly in reply to (i)  Robin’s complaint of material omissions in Shing’s production of the relevant correspondence, (ii)  Robin’s allegation of there being the June 2009 Co-operation Agreement for Shing to help Robin to remain on the board of the Company, and (iii)  Robin’s allegations against Shing referring to other litigations HCA 598/2011 and HCA 1890/2010, and also the CACV 236/2009.  As for Shing’s 3^rd witness statement, this was mainly   to supplement his reply to Robin’s complaint of Shing’s material omissions in producing the correspondence, and also in relation to the voting at the 2010 AGM. Suffice to say at this stage, and as submitted by Ps’ Counsel Mr Ng, this case was really a “documents case”, in that the no longer disputed documents would speak for themselves.

68.  Although Shing had every motive to present his own case and to undermine Robin’s, there was no sufficient evidence that Shing had any motive to conceal or misrepresent matters. There was no sufficient evidence that Shing’s witness statements were an edited account, or were made in collaboration with another or for a particular purpose, save for the purpose of a trial, nor were there circumstances in which Shing’s witness statements were adduced were such as to suggest an attempt to prevent proper evaluation of their weight. 

69.  It was accepted by Robin that Shing’s 3 witness statements did not involve multiple hearsay. In fact, there was documentary evidence to support Shing’s written evidence.

70.  In light of all above said, in short, having considered all the circumstances of this case and those factors under section 49(2)  of the Evidence Ordinance, Cap 8, and all the undisputed documentary evidence, I am of the view that Shing’s evidence in his 3 witness statements should be given due weight.

D’s witness

71.  Robin was the only witness who attended the trial to give oral evidence for the defence. Robin made a witness statement dated 14 May 2019, and 3 Supplemental Witness Statements, dated respectively 14 May 2019, 22 December 2020, 8 December 2021, and 15 June 2023.

72.  Robin is now 74 years old. in a medical report dated 29 August 2025 from a psychiatrist Dr Chow Lok Yee, Robin suffered from epilepsy caused by limbic encephalitis since 2012[38] with subsequent recurrent epileptic attacks, and that there was concern about his impairment in cognitive function and his lesions in left temporal lobe may affect his memory and other cognitive functions[39]. It would appear that laboratory findings in September 2012 and April 2013 indicated that Robin’s neurological symptoms were likely to be associated with a form of potentially reversible autoimmune limbic encephalitis. The medical reports showed he had a serious attack on 27 October 2012 and was discharged on 5 November 2012, and that he had a few minor seizures in June 2013 resulting in admission to Ruttonjee Hospital and there had been no major seizure in the past one year.

73.  There were no medical reports produced/mentioned in relation to his epilepsy after 2013, save there was a MRI report of brain dated 28 August 2025, which indicated that there were abnormal left mesial temporal lobe lesions in 2013 and the hippocampus was found to be atrophic on 28 August 2025.  From the reports, there appeared to be no mention as to whether he had any epileptic attacks after June 2013.

74.  In any event, the trial of the Consolidated Actions was originally scheduled to commence on 1 September 2025 before Fung J. Robin was admitted to the Ruttonjee Hospital on 25 August 2025 for “medical condition” and was given sick leave for 7 days, but it appeared that Robin was discharged on the same day[40]. According to Dr Chow Lok Yee’s medical report produced by Robin at the time of his application for an adjournment of the September trial, Dr Chow, a psychiatrist, examined him on 26 August 2025.  Robin was found to have no subnormal behaviour.  His speech was found to be coherent and relevant and his thought process was organized[41]. According to Dr Chow, Robin had been suffering from adjustment disorder with depressed mood, and that the stressor of his adjustment disorder was the present litigation, and that his depressed mood had affected his drive and he procrastinated about the litigation.

75.  During the trial, Robin admitted that he was not suffering from epilepsy in 2010 although he had work pressure or stress at that time.  From the medical report/s, it would appear that Robin started suffering from epilepsy only since about June 2012. Robin’s defence in the 2010 Action was first filed in November 2010 and later amended and re-amended in May 2012, and his 1^st witness statement was filed in January 2012, followed by a supplemental witness statement filed in July 2012. All these documents were filed before his major attack in October 2012 and in any event at the very early start of his epilepsy, and in my view, they were relevant evidence in the present trial.  There was no objection to their production, and after production, there was no application from either side to re-open cross examination or re-examination.  

76.  Robin was the only witness who could give first hand evidence as to those business dealings between him and Shing back in 2009 and 2010.  He was under cross examination for some two and half days with a weekend break. The only time that he expressed tiredness was towards the end of his cross examination.  Robin’s Counsel Mr Kwok submitted on his behalf that he often had difficulties recalling details of the events. This is understandable, whether it was because of his medical condition or whether the events took place some 16 or 17 years ago.  However, although on occasions he had said he could not recall, more often, Robin was able to recall and he had given lengthy answers with unnecessary explanations and details, instead of a straightforward answer. 

77.  I will further analyse his evidence later in this judgment.

F.   DISCUSSION AND ANALYSIS OF THE EVIDENCE

Oral Agreement, the Deed, and the Letter

78.  Shing/YLIL had relied on the existence of the Oral Agreement for YLIL’s claim against Robin in the 2010 Action.

79.  Shing gave oral evidence during the trial before the then Recorder Chow and although there was no cross examination and Shing was observed to be confused at one stage, Recorder Chow accepted his evidence and found that the Oral Agreement with the 3 Conditions did exist. Even though it now transpires that Robin had a few minor epileptic seizures in June 2013, there was no sufficient reason why he could not have applied for an adjournment of the then trial with proper medical evidence, and/or lodged any notice of appeal against the Chow Judgment.   In fact, Robin duly complied with the order as on 30 September 2013, he sent to YLIL’s solicitors a set of the copies of the 4 Settlement Agreements [42].

80.  Shing again relied on the Oral Agreement with the 3 Conditions for Ps’ 50m Shares Claim in the Consolidated Actions.  Notwithstanding the Chow Judgment and Robin having complied with it, yet, in his defence in the Consolidated Actions, he denied the existence of the Oral Agreement, and it was only during his Counsel’s Opening at the present trial that he indicated that he no longer challenged the findings in the Chow Judgment, subject to his case about the December 2009 Settlement Agreement. 

81.  Shing’s written evidence in relation to the Oral Agreement with the 3 Conditions in his witness statements in the Consolidated Actions was largely consistent with his written and oral evidence in the 2010 Action and the findings in the Chow Judgment. Having considered Shing’s written evidence, and in light of the findings in the Chow Judgment and Robin’s concession, I am satisfied that Ps have proved the existence of the Oral Agreement with the 3 Conditions as found by Recorder Chow.

82.  In relation to Ps’ Promissory Note Claim, as seen in Ps’ pleadings in the Consolidated Actions, Ps relied on the Deed as varied by the Letter. It was Robin’s defence that pending further discovery and interrogatories, he had no specific recollection about signing and/or executing the Deed and/or the Letter, and he had reserved the right to adduce evidence from forensic expert and he appeared to have also queried the authenticity of the Deed by pointing out there was an unexplained “blank space” and a missing clause (4)(ii)  on page 5 of the Deed (“Blank Space Issue”).  There was eventually no forensic evidence produced by Robin, and further after hearing Edward’s oral evidence, Robin decided not to challenge those signatures on the Deed and the Letter alleged to be his were in fact his.  Further, during Closing Submissions, Robin’s Counsel informed the Court that Robin would not pursue the Blank Space Issue.   Edward’s evidence supported Shing’s evidence about Robin’s signature on the Deed and the Letter.  Having considered their evidence, and in light of Robin’s concession, I am satisfied that Ps have proved the existence of the Deed and the Letter and that Robin did sign on the Deed and the Letter.

83.  To put the Deed in context, the CTF Settlement Agreement was signed on 9 July 2009, and on the same day, Robin and YLIL signed the Chinese Agreement for the sale and purchase of 312m shares of the Company. Then 7 days thereafter, Robin and Shing executed the Deed. 

84.  The Deed contained 6 main clauses. I will set out hereunder some salient clauses/sub-clauses of the Deed.

85.  Under clause (1), subject to the terms set out in the Deed, Shing undertook to:

(a)  pay on behalf of Robin the 1^st, 4^th and 5^th Instalments to CTF;

(b)  to introduce to CTF   registered holders of shares of Wuling Motors for them to provide their shares to be charged to CTF as security;

(c)  to provide a personal guarantee to CTF as security;

(d)  to provide 262,000,000 shares out of the 312,000,000 shares newly acquired by YLIL from Robin, to be charged to CTF as security. 

86.  On Robin’s part, under clause (2)  he undertook to, amongst other things:

(i)  To pay the 2^nd and 3^rd Instalments to CTF from either (a) shareholder’s loans approved by the Company; or (b)  from the consideration of 20% of the remaining shares in the Company held by Robin;

(ii)  To sell to Shing or his company 312m shares in the Company held by Robin, at a consideration of HKD 31,200,000 to be paid as set out therein;

(iii)  Upon Shing paying the 4^th Instalment of HKD 12,000,000, the said HKD 12,000,000 be treated as the consideration for which Robin was to sell to Shing the 81.228m CB;

(iv)  Upon Shing paying the 5^th Instalment of HKD 17,546,220, the said HKD 17,546,220 be treated as the consideration for which Robin was to sell to Shing the 50.856m PN;

(v)  Upon Robin complying with his undertakings in the Deed and upon Shing and Robin having acquired their shares after exercising all their respective rights under the Convertible Bonds, and subject to the proviso therein, they agreed as follows, amongst other things:

(a)  To deduct 20% thereof for dealing with the disputes over amounts receivables and payables incurred by Robin arising out of the process of his investing in the Company;

(b)  To repay both Robin and Shing (in the proportion of their respective payments/contributions)  for the funding capital from CTF and Sung Hung Kai Securities Company, totalling HKD 80m;

(c)  To deduct the amount payable to Mr Ma Qianzhou (a director and shareholder of Taizhou Mining)  (“Mr Ma”)  for his bonus project when carrying out the matters set out in clause (3)  (total not exceeding RMB 250,000,000);

(vi)  Robin agreed to form a holding company with Shing with Shing as the majority shareholder and with such holding company holding not less than 20% of the shares in the listed company;

(vii)  To guarantee all directors and company secretary (except those whom Shing had requested to remain)  to resign within the period designated by Shing, and further within the period designated by Shing, to appoint Shing as the Chairman of the Board of the Company and to nominate persons appointed by Shing as executive directors and company secretary, with a view that the persons appointed by Shing would form 50% of the executive directors on the board, and such resignations and appointments should be effective immediately upon the completion of the sale and purchase of the shares mentioned in clause 2(ii);

(viii)  To guarantee appointing persons nominated by Shing as the chief financial officer/consultant, but all salaries and benefits shall be responsible by the Company.

87.  Under clause (3)  of the Deed, Shing agreed, amongst other things, that

(i)  Robin could introduce to new gold mine resources to increase the gold storage of the Company and to introduce large scale international investment companies to invest in the Company as strategic shareholders and in the process to pay for the capital for the bonus project of Mr Ma;

(ii)  without prejudice to clause (2)(vi)  above, and within the time designated by Robin, to appoint Robin as the Deputy Chairman of the Board and the Chief Executive Officer of the Company, and to nominate Robin as an Executive Director of the Board.

88.  Clause (4)  of the Deed had set out other important provisions in the Deed, namely:

(i)  Without obtaining the written consent of Shing, Robin could not unilaterally deal with all the shares of the Company mentioned in the Deed, the Convertible Bonds issued by the Company and the Promissory Note/s (including but not limited those loaned, charged or subject to other financial arrangement which would result in those assets become liabilities);

(ii)  (missing with blank space)

(iii)  Save as provided in the Deed, Robin undertook, guaranteed and agreed that Shing was absolutely not to be responsible for any debts and liabilities incurred by Robin to third parties and Robin was to be solely be liable for such debts and liabilities;

(iv)  Robin guaranteed and undertook to Shing the provisions set out therein;

(v)  Under whatever circumstances, Robin guaranteed and undertook that if Robin failed to comply with any provisions in the Deed or any declarations, undertakings or if any guarantees were untrue or misleading, Robin was to compensate Shing for his loss, dollar for dollar (plus compensating Shing for all legal costs or disbursements incurred as a result thereof).

89.  As for the Letter, this recorded the terms of the variation of the Deed, mainly that the parties agreed that Shing was to pay the 2^nd and the 3^rd Instalments under the CTF Settlement Deed for Robin, instead of the 4^th and the 5^th Instalments, and that upon paying the 2^nd Instalment, Robin was to transfer to Shing the 81.228m CB within 7 days of the Letter, and upon paying the 3^rd Instalment, Robin was to transfer to Shing the 50.856m PN within 30 days of the Letter.  Robin was to undertake to pay the 4^th and 5^th Instalment and that all other terms and conditions stated in the Deed and the CTF Settlement Agreement were to remain the same.

90.  To summarise, although Shing was not a party to the CTF Settlement Agreement, but he clearly was aware of there being a settlement between CTF and Robin and Golden Contest.  Shing in fact played an important role in the settlement, as seen in CTF Settlement Agreement and the Deed. 

91.  Further, although the Deed was dated 7 days after the Chinese Agreement and the CTF Settlement Agreement, it would appear that, as set out in a letter before action dated 19 February 2016 sent by Shing’s solicitors to Robin,[43] that prior to the execution of those two agreements and/or prior to the Deed, there had been rounds of negotiations took place between Shing and Robin which led to the Deed being prepared and duly executed. It is also noted that Shing’s undertakings/obligations under clause (1)  of the Deed for the transfer to him of the 81.228m CB and the 50.856m PN had included not only the payments of the 1^st, 4^th and 5^th Instalments to CTF and his providing 262m shares purchased by YLIL to CTF as security ,  but also to introduce to  Robin  Wuling Motors shareholders  for their shares to be charged to CTF as security and to make up the number of charged shares of Wuling Motors to CTF under clause 1.3 of the Deed in case of a drop of the market value and further to provide his own personal guarantee to CTF .

The December 2009 Settlement Agreement

92.  Robin’s case was essentially that there was the December 2009 Settlement Agreement, which was a global settlement reached orally with Shing and Shing was not entitled to claim under the Oral Agreement and the Deed as varied by the Letter.  The terms of the December 2009 Settlement Agreement pleaded by Robin were as follows[44]:

“(a)  Robin should assign and/or sell the [81.228m CB] in favour of YLIL at the discounted de facto rate of HKD 0.111 per share;

(b)  In exchange, YLIL, should waive and/or forego all its intended and/or potential claim and/or potential complaints for the financial loss in relation to (i)  the said 50,000,000 shares in the Company that had been charged in favour of the 4 Chargees, and (ii)  the July 2009 Agreement/Consensus as well as all dealings relating to the repayment of the HKD 60,000,000 loan owed to CTF (ie. the parties’ acts, conducts, performance of obligations/duties owed to each other and failure/omission to perform obligations/duties owed to each other), and all the parties’ disputes or potential disputes should be fully and finally settled.”

93.  It was averred by Robin in his pleadings that due to the lapse of time, the aforesaid terms were the only express material terms of the December 2009 Settlement Agreement and were all that Robin could recall. At the end of the trial, Robin had further indicated that he would not rely on the July 2009 Oral Agreement which was referred to in his pleaded terms above.   In fact, in his oral evidence, Robin was referring to and relying on the terms of the Deed and the Letter instead.  In any event, some if not all the terms of his alleged July 2009 Oral Agreement seemed to have been contained in the Deed.

94.  In short, the pleaded terms of the December 2009 Settlement Agreement were simply that upon receipt of the 81.228m CB, Shing was to waive all intended and potential claims against Robin in relation to Shing’s/YLIL’s loss of the 50m shares charged to the 4 Chargees and for all the repayments Shing/YLIL had made on behalf to Robin to CTF under the CTF Settlement Agreement.

95.  Shing denied the existence of the above alleged July 2009 Oral Agreement and the December 2009 Settlement Agreement.

96.  Having considered his written evidence and heard his oral evidence, I have to say I do not find Robin a reliable witness and my reasons are set out hereinafter.

97.  First, according Robin’s witness statement in May 2019, he held a certificate in accounts from the Hong Kong Polytechnic University, a master degree in business administration from the East Asia University in Macau, and a certificate in management from a university in South Africa, and that he was also a founding member of the Hong Kong Institute of Directors.  He had had extensive experience in providing financial services for mergers and acquisitions, banking and financing in Hong Kong, Mainland China and South Africa, and that he had provided services for a number of mining companies listed on the Hong Kong Stock Exchange.  He was also the legal representative of SSC Sino Gold and also Taizhou Mining.  By December 2009, Robin had entered into various written settlement agreements with a number of his creditors. The loss of the 50m shares and the amounts Shing had repaid on behalf to CTF were not insubstantial amounts.  I find it inherently improbable that with Robin’s extensive experience in finance and business, had there indeed been a global overall settlement between him and Shing/YLIL, such settlement agreement would not be recorded in writing.

98.  Second, I find there was inconsistency in Robin’s case.  There was no mention in the Chow Judgment about the December 2009 Settlement Agreement or any global settlement between Shing and Robin. When this was pointed out to Robin by this Court, he readily admitted that the December 2009 Settlement Agreement was only pleaded or raised by him for the first time in his defence in the Consolidated Actions.   In order to be fair to the witness, Ps’ solicitors then produced copies of the pleadings and the parties’ respective witness statements in the 2010 Action.  As mentioned earlier, there was no objection to these documents being produced, and it was clear that that there was no mention at all in the 2010 Action that there was any global settlement between Shing/YLIL and Robin.

99.  During the trial, Robin was asked by Ps’ Counsel whether he was aware of the trial of the 2010 Action, Robin answered he would not deny he knew, and when asked whether he lodged any appeal against the Chow Judgment, his answer was it seemed not.  When asked why he did not attempt to appeal, Robin said as there had already been a global settlement in December 2009.  When further asked whether he had mentioned to the Court in the 2010 Action that there had been a global settlement in December 2009, Robin’s answer was no because he was ill.  

100.  It was submitted on behalf of Robin that whether Robin appealed against the Chow Judgment or whether Robin had mentioned the December 2009 Settlement Agreement were irrelevant as the only issue in the 2010 Action was whether there was the failure on part of Robin to deliver the 4 Settlement Agreements to Shing, and that the issue of indemnification of loss from the 50m shares had not yet arisen and was thus not an issue then. 

101.  I do not agree those questions were irrelevant. In the 2010 Action, YLIL had set out in their statement of claim their case that (i)  the Oral Agreement had existed; (ii)  Robin had breached the 3 Conditions, which included the indemnification condition; (ii)  YLIL sought delivery of the 4 Settlement Agreements and YLIL had also sought damages and interests arising out of Robin’s breach of the Oral Agreement.  In his defence, Robin simply denied the existence of the Oral Agreement.  Had there been a global settlement, one would have thought Robin would have mentioned it then in his defence, namely that even if the Oral Agreement had existed and that if he was in breach, there had already been a global settlement and that Shing/YLIL was not entitled to make any claims under the Oral Agreement, whether for delivery of the 4 Settlement Agreements or any damages for breach of the Oral Agreement.

102.  As Robin was absent during the trial, he would not have known what went on during the trial.  It would appear that it was only during the trial   that Recorder Chow pointed out that at the time of the commencement of the 2010 Action, the 50m shares had not yet been lost, and therefore he was not satisfied that YLIL had shown that its loss of the 50m shares was the result of Robin’s failure to deliver the 4 Settlement Agreements.  In fact, Recorder Chow made it clear that YLIL was not precluded from bringing a further action against Robin to recover its loss and damage arising from the loss of the 50m shares.  Recorder Chow’s findings were clearly against Robin. Irrespective of the chances of whether Robin would be able to succeed in lodging an appeal or not, the fact was he never even made any attempt to do so, and yet after complying with Recorder Chow’s order, he then denied the existence of the Oral Agreement again in the Consolidated Actions.  

103.  In any event, I find it inherently improbable that had there indeed been any overall global settlement, there was no mention by Robin of this in his pleadings or in his witness statements in the 2010 Action.

104.  Third, when asked during the present trial whether there was any documentary evidence to support his allegation of the overall settlement, Robin referred to (i)  a “work arrangement timetable” (“Timetable”)[45] and (ii)  an announcement of the Company dated 24.12.2009 (“24.12.09 Announcement”)[46]. 

105.  The Timetable bore a handwritten date of 5 December 2009, and was purportedly signed by Shing, Robin and Mr Ma. The Timetable purportedly set out the agreed timetable for work leading up to the application for the Company to be listed on the Main Board. What can be seen is that there was a further company announcement about a month later on 8 January 2010 that on 6 January 2010, the Company entered into an agreement with Mr Ma for the capitalisation of the debt due to the Mr Ma by the Company and for the issue to Mr Ma of subscription shares at a price of HKD 0.07 each in consideration for full and final settlement of the capitalized debt[47]. After completion, YLIL held 1,472,400,000 shares (15.72%), Robin held 71,854,000 shares (0.77%), a company Osborne Pacific Limited (a company wholly owned by a former executive director Mr Chan Hing Yin)  held 196,008,500 shares (2.09%), and Mr Ma held 169,348,000 shares (13.18%). As seen, YLIL’s shareholding was reduced from 17.74% to 15.72 % after the allotment of subscribed shares to Mr Ma, whereas Robin’s was reduced from 0.87% to 0.77%.

106.  It was not Robin’s pleaded case that any agreement or any work for the listing of the Company on the Main Board was part of the terms of the December 2009 Settlement Agreement. In fact, the December 2009 Settlement Agreement, as pleaded, was only between two parties Robin and Shing, and Mr Ma was not a party thereof.  Further, Robin produced the Timetable in his witness statement only as evidence to show that the relationship between him and Shing was very good at that time, and the Timetable was described by him as “05.12.2009 Co-operation Agreement”[48], namely a co-operation agreement between 3 persons, namely Robin, Shing, and Mr Ma.

107.  The Timetable appeared to set out the time frame for various items of work to be carried out leading to the listing of the Company on the Main Board by 31 March 2010.  It was stated that   between 15 and 24 December, and before 24 December, the reconciliation of shareholders’ loans of over 70m was to be completed and that the signing of settlement agreement and service agreement was to be added in the public announcement. There was no sufficient evidence that this item had anything to do with the purported global settlement agreement with Shing, nor was this Robin’s case.

108.  In any event, the 24.12.09 Announcement only referred to the settlement of loans /amounts payable to Robin himself, GG and another creditor J. Thomson Assets Investment Limited (“JT”)  by the Company. 

109.  In short, there was no mention in the Timetable in relation to any oral global settlement between Shing and Robin of Shing’s claims against Robin.  At most, the Timetable would seem to indicate that there was an agreement to co-operate among Robin, Shing and Mr Ma for the listing of the Company on the Main Board.  The Timetable could not assist Robin in proving that there was the December 2009 Oral Agreement between him and Shing as pleaded by him, or any global settlement between him and Shing.

110.  Robin’s written evidence was that there was in fact no 50.856m PN issued by the Company, and that the 24.12.09 Announcement confirmed that the Company owed Robin HKD 31,355,366 and Robin was the owner of HKD 62,592,000 rights under the Promissory Note B issued by the Company and that Robin had exercised his rights thereunder and acquired shares of the Company at 0.11 each[49].

111.  Thus, it was Robin’s own admission that the Company did not issue any 50.856m PN. As Robin never produced copies of any promissory notes issued by the Company, the terms thereof were not clear. Although it appeared that face amount of the Promissory Note B could be split, there was no evidence that Robin had the intention of requesting the Company, or otherwise, to carve out a separate promissory note for the face amount of HKD 50,856,000 under the Promissory Note B to transfer to Shing.  Robin was further not able to provide satisfactory explanations as to how the amount of HKD 50,856,000 was arrived at in the Deed and/or in the Letter. This Court had given him time during the trial to try and recall and set out the calculations for the amount of HKD 50,856,000 , and in response, Robin had first produced trial exhibit D-1 for his calculations which he later said were not correct and he then produced exhibit D-2, but he then admitted that those calculations in exhibit D-2 were an attempt on his part to re-construct the amount of HKD 50,856,000 from the contents of the Deed and that he really could not recall how the amount was arrived at.

112.  Robin relied on the 24.12.09 Announcement to show that Shing was fully aware and had approved Robin’s exercise of all his rights under Promissory Note B, and that had there not been the overall global settlement, Shing should have stopped Robin from exercising his rights as stated in the 24.12.09 Announcement. Thus, according to Robin, the 24.12.09 Announcement supported Robin’s case about the overall global settlement, and that there was no 2^nd Oral Agreement About the Note as alleged by Shing, and further Shing/YLIL was not entitled to claim for the delivery of the 50.856m PN.

113.  There was no mention about the 24.12.09 Announcement in Robin’s pleadings, and it was never Robin’s pleaded case that by reason of matters stated in the 24.12.00 Announcement that Shing was fully aware that there was never any 50,856m PN referred to in the Deed, or that Shing was fully aware that. Robin had exercised the same, as part of his/GG’s rights under the Promissory Note B, for his own benefit.

114.  It was Chi Ho’s evidence that his father was not aware that HKD 62,592,000 part of the Promissory Note B had included the 50.856m PN referred to under the Deed. I accept that Chi Ho’s part of this evidence would be hearsay as there was no such evidence from Shing.

115.  In any event, the 24.12.09 Announcement appeared to be only an announcement of the Company for capitalization of its debts by issuing and allotting further shares for amounts payable to holders of promissory notes.  The Company announced that on 23 December 2009, it had entered into a 1^st  Share Subscription  Agreement with Robin and GG (Golden Garden)  for them to subscribe and purchase respectively 272,727,273 and 569,018,182 shares at HKD 0.11 each,  as a consideration for amounts payable by the Company (limited to HKD 30m)  and for capitalisation of the amount owing to GG , and  that any remaining balance payable by the Company was to be paid by the Company at appropriate times, and that according to the Promissory Note B,  any  interest owing to GG by the Company  would be paid  in cash on completion date .  It was also announced that on the same day, the Company had entered into a 2^nd Share Subscription Agreement with JT   upon similar terms. 

116.  As stated in the 24.12.09 Announcement, GG was holder of HKD 62,692,000 and interest HKD 4,136,217 under Promissory Note B and JT was the holder of HKD 15,648,000 and interest HKD 1,034,054 under Promissory Note B. 

117.  According to Robin’s evidence during the trial, there were only two promissory notes issued by the Company in 2008, namely a Promissory Note A and the Promissory Note B.   Promissory Note A was for the amount of HKD 50m to GG for one year which was repaid in April 2009. Promissory Note B was for the amount of HKD 78,240,000.

118.  Robin had not produced any promissory notes issued by the Company in these proceedings. There was no evidence that there were only two promissory notes issued by the Company in 2009, and in fact in the CTF Settlement Deed, in the “Interpretation” section, the amount of HKD 78,240,000 was the principal amount of promissory notes by the Company, and the definition of “Promissory Notes” would seem to refer to more than one note.  In the CTF Settlement Deed, the promissory notes of principal value of HKD 78,240,000 were charged to CTF.  In the Deed, in the recital B (3), it was stated that Robin owned a promissory note of total value of HKD 78,240,000, and yet in clause (2)(iv), what Robin agreed to transfer to Shing was a promissory note of value of HKD 50,856,000.  There was no reference that the promissory note that Shing was entitled to receive in the Deed was the same promissory note of face value of HKD 78,240,000, or a part thereof.

119.  Having considered all the above, I find there was no sufficient evidence that Shing knew at the time of issuing the 24.12.09 Announcement that the Promissory Note B referred to in the 24.12.09 Announcement was the same promissory note, or part of which was the 50.856m PN that he was supposed to receive under the Deed.

120.  In fact, there was a letter before action sent by YLIL’s solicitors on 10 May 2010 to Robin complaining about Robin’s breach of his obligations under the Deed as varied by the Letter and threatening legal action [50]. In particular, it was stated therein that Robin had failed to transfer to Shing the 50.856m PN under clause 2(iv)  of the Deed as varied by the Letter, and that Robin had also breached his obligations under clause 2 (vi), (vii), (viii)  of the Deed. There appeared to be no reply from Robin, and it appeared that YLIL’s solicitors followed up with a further letter dated 27 May 2010.  Then, there appeared to be a reply from Robin’s then solicitors dated 11 August 2010[51], in which there was no mention of the December 2009 Settlement Agreement or any global settlement between Robin and Shing., or that Shing knew that Robin had exercised his rights under Promissory Note B and there were no other promissory notes or the 50,856m PN.  There was no satisfactory explanation from Robin why there was no mention of any global settlement by him in reply to Shing’s solicitors’ letter before action.  I find it inherently improbable that had there been an overall global settlement, Robin would not have mentioned it earlier in any pre-action correspondence between him/his solicitors and Ps’ solicitors.

121.  During the trial, Robin had explained that the December 2009 Settlement Agreement had the effect of the parties’ respective obligations in the Deed as varied by the Letter being abandoned, and that under the December 2009 Settlement Agreement Shing did not have to bear the obligations under clauses 2(v)  and (vi)  of the Deed and/or to repay various creditors of the Company and that such obligations were solely borne by Robin instead. During the trial, Robin’s evidence was that he had repaid creditors with the Balance of the Convertible Bonds[52], and he relied on a “CB Register” of the Company[53].  However, under clause 2(v)(b)  and (c)  of the Deed, the creditors were stated to be CTF, Sung Hung Kai Securities Limited.  There was no sufficient evidence that those alleged creditors on the CB Register which Robin said he repaid were creditors connected with those in clause 2(v)(b)  and (c), or indeed whether they were in fact creditors of the Company or whether they were Robin’s personal creditors.

122.  According to Robin’s pleaded case, YLIL had on 28 December 2009 exercised the conversion option under the 81.228m CB, and acquired 1,160,400,000 shares and that the actual profits received by YLIL was no less than HKD 25,528,800, ie 1,160,400,000 shares at (HKD 0.133 per share, the then market price as at 28 December 2009, less HKD 0.111 per share).[54]

123.  Under the Deed, Robin had agreed to transfer the 81.228m CB to Shing at a consideration of HKD 12m, after Shing had paid the 4^th Instalment of HKD 12m under on behalf of Robin, and Robin had agreed to transfer the 50.856m PN to Shing at a consideration of HKD 17,546,220 after Shing paid the 5^th Instalment of HKD 17,546,220 on behalf of Robin.  As varied by the Letter, in consideration of Shing having paid the 2^nd and the 3^rd Instalments on behalf of Robin, Robin was supposed to transfer the 81.228m CB within 7 days and 50.856m PN within 30 days, of the date of the Letter.

124.  In short, it would appear that according to Robin’s oral evidence during the trial, as a result of the global settlement, Shing agreed not to pursue the 50.856m PN from Robin, and Robin’s obligation to transfer the 50.856m PN to Shing was abandoned under the overall settlement upon Robin taking over all the obligations to repay the creditors of the Company under clause 2(v)  of the Deed. This was new evidence from Robin and was inconsistent with Robin’s pleaded case and/or his written evidence.

125.  There was no sufficient evidence that Shing/YLIL had agreed to any abandonment of the Deed as varied by the Letter. The letters before action and the commencement of HCA 542/2016 clearly indicated otherwise.  Further, by a letter dated 17 June 2019[55], Ps’ solicitors wrote to Robin’s solicitors to state that in light of Robin’s breach of, inter alia, clauses 2(vi)  – 2(x)  of the Deed, Shing/YLIL their client accepted Robin’s repudiation of the Deed.

126.  Having considered all the above, I find Robin has not been able to satisfy this Court that there was an overall global settlement in the terms of the December 2009 Settlement Agreement as pleaded by him.

The 2^nd Oral Agreement About the Note

127.  Shing’s written evidence was that there were further negotiations between him and Robin in early 2010 and that there was the 2^nd Oral Agreement About the Note, upon which Shing allowed Robin until December 2010 to transfer the 50,856 PN to Shing, and that Shing agreed to forbear to sue Robin over the delivery thereof until December 2010. 

128.  According to the Company’s disclosure statement on 27 December 2009, as at 8 December 2009, CTF held 356,800,000 shares (6.35%), Mr Cheng held 356,800,000 shares (6.35%), and YLIL held 312,000,000 shares (5.55%); as at 18 December 2009, Shing held 339,000,000 shares (6.03%); and as at 23 December 2009, Robin held 3,896,599,455 shares (67.29%)  in the Company and GG held 569,018,182 shares (9.83%)  [56]

129.  By 28 December 2009, all outstanding loans to CTF under the CTF Settlement Agreement had been paid off and the charged securities and Shing’s personal guarantee were released/re-assigned by CTF [57]. By 28 December 2009, CTF and Mr Cheng were no longer shareholders.  As at 28 December 2009, Shing held 1,499.400,000 (25.89%)  and YLIL held 1,472,400,000 (25.43%), and Robin held 1,224,198,455 shares (21.14%)[58].  It would thus appear that Shing and YLIL had each acquired 1,160,400,000 shares, although according to Robin, the 81.228m CB was assigned to YLIL only which had exercised its rights on 28 December 2009 and acquired 1,160,400,000 shares thereunder.

130.  As further seen in the Company’s announcement 8 January 2010[59], the Company and Mr Ma entered into an agreement whereby the Company was to issue and Mr Ma was to subscribe for certain subscription shares at a price of HKD 0.07 per share, in consideration for full and final settlement of the “Capitalized Debt” due to Mr Ma.  After the date of that announcement/completion of the share subscription, YLIL held 1,472,400,000 shares (15.72%), Robin held 71,854,000 (0.77%)  and Mr Ma held 1,234,776,571 (13.18%)  of the issued share capital of the Company [60]. This would seem to indicate that, contrary to what was alleged by Robin, on 8 January 2010, YLIL had not yet sold the 1,160,400,000 shares acquired under the 81.228m CB. Further, there was no mention in the Company’s announcement that Shing was still holding any shares in the Company in his personal name.

131.  What is clear is that by early January 2010, Mr Ma had become a registered shareholder of the Company and had become more directly involved in the Company.  There were 8 stages set out in the Timetable, and that with the capitalisation of the loans due to GG, JT and Mr Ma completed by early January 2010, it would appear that there was an understanding between Shing, Robin and Mr Ma to proceed with the preparation work for the listing of the Company on the Main Board.  As the relationship between Shing and Robin was still good at this time, and I have found no sufficient evidence of any global settlement as alleged by Robin, in my view, it was probable that Shing did agree to withhold/forebear any action to demand the 50.856m PN from Robin and extended the time for Robin to transfer the 50.856 PN to him to end of 2010.

132.  Further, by a letter dated 19 February 2016[61] , Ps’ solicitors had written to Robin a further letter before action for the Promissory Note Claim (HCA 542/2016), claiming damages suffered as a result of Robin’s breach of the 2^nd Oral Agreement About the Note.  There was no reply to that letter from Robin or any denial of the 2^nd Oral Agreement until after the commencement of that action.

133.  Having considered all the above, I find more probable than not, that the 2^nd Oral Agreement About the Note, as pleaded by Ps, did exist.

The June 2009 Co-operation Agreement 

134.  As pleaded by Robin, the terms of the June 2009 Co-operation Agreement were[62] :

“(1)  Robin would sell to Shing 312,000,000 shares in the Company (which constituted 11.44% shareholdings)  in the Company to YLIL at the consideration of HKD 31,200,000;

(2)  Robin would use his best endeavours to persuade the Company’s Board of Directors to appoint Shing as chairman of the board and executive director of the Company;

(3)  Robin and Shing/YLIL would mutually exercise their best endeavours to ensure that until the Company acquired listing status on the Main Board of the HKEx:

(a)  Robin should continue to hold office and/or positions as the Company’s executive director and chief executive officer; and

(b)  Shing should continue to hold office and/or positions as the Company’s executive director and chairman.

(4)  Before the Company acquires a listing on the Main Board of the HKEx, Robin and Shing/YLIL should always deal with each other in good faith and cooperate with each other with regard to the management and affairs of the Company.

(5)     In particular, Robin and Shing/YLIL should first obtain the consent of the other before they exercised their rights and powers as shareholders and/or directors of the Company.”

135.  The alleged June 2009 Co-operation Agreement was only raised in the Consolidated Actions. some 6 years after Robin was ousted during the 2010 AGM.

136.  It was Robin’s oral evidence that he and Shing only met for the first time in early 2009, and that they only became close friends after he had “saved” Shing when Shing had the accidental fall during their visit to the gold mine of Taizhou Mining in the first quarter of 2009. This was in fact not consistent with Robin’s own written evidence in the 2010 Action when he said the friendship between him and Shing began since about 2006[63].

137.  Robin also maintained throughout that in June 2009 he was not in financial difficulties and that all the loans were incurred by him on behalf of the Company, and that it was   Shing who himself wanted to invest in the Company. However, as seen in clause (2)(ii)  of the Deed, by then, Robin had owed personal loans to Shing of at least two amounts, i.e. HKD 14.2m and HKD 2,239m.  The documentary evidence showed that Robin was clearly in financial difficulties. Having said this, it was not really disputed by Shing that in or about June 2009, he was also looking for investment opportunities.

138.  I accept that the two of them would probably have discussed orally about Shing’s purchase of the shares in the Company prior to putting their discussed terms into writing. It was also not disputed that there were negotiations between them.  However, in June 2009, YLIL was not even in existence, and further the word “continue “was used in the pleaded terms, but in June 2009, Robin was not yet appointed an executive director. 

139.  More importantly, the Chinese Agreement contained an “entire agreement” clause[64] . It was submitted on behalf of Robin that the Chinese Agreement only covered the sale of Robin’s shares and therefore the “entire agreement” clause only superseded any prior agreement in relation to the sale of the shares, and that the clause did not supersede those terms regarding the co-operation of Shing and Robin regarding the Company’s management.

140.  Robin’s pleaded case was that the June 2009 Co-operation Agreement contained five main terms, the first of which was the sale and purchase of the shares.   The other four main terms have been set out earlier, and concerned management and co-operation terms including appointing Shing as the chairman and an executive director, as pleaded by Robin, the terms and conditions of the June 2009 Co-operation Agreement that were pertinent to the issues in dispute between the parties were fully pleaded by him.  [65]

141.  Whether Shing and Robin were then in a very good relationship or not, Robin clearly saw the need to put their agreement for sale and purchase of shares into a detailed agreement.  It was his then solicitors Tai, Mak & Partners who drafted the agreement in Chinese, with some 13 pages of contents and another some 18 pages of 4 attachments[66]. Robin had pointed out in his oral evidence that Shing could not read English. It was a comprehensive agreement. Clause 2 sets out all condition’s precedent. Attachment 2 in particular sets out the seller’s (Robin’s)  guarantees, declarations and undertakings.  Attachment 3 also sets out the arrangement for completion, including resignation letters were to be obtained from all then existing directors and company secretary and to facilitate the Company to hold a directors’ meeting to approve the resignation of all existing directors and the company secretary and to approve nominations by the purchaser (YLIL)  for new directors and company secretary.  There was then the “entire agreement” clause in Clause 14.1.

142.  Robin’s solicitors Tai, Mak & Partners not only drafted the Chinese Agreement, but also the CTF Settlement Agreement and also the Deed.   The Deed also contained detailed agreed terms about resignation of existing directors and company secretary, nominating and appointing new directors and company secretary and the chief financial officers by Shing. What Shing had agreed was to appoint Robin as deputy chairman and the chief executive officer and an executive director of the Company. There was no agreement hat Shing would ensure Robin would continue to hold those positions under any circumstances.   Had there been an oral  June 2009 Co-operation Agreement with those terms as pleaded by Robin, I find it improbable that Robin, being an educated and experienced businessman providing financial services  for mergers and acquisitions  would not have instructed his solicitors to include those alleged terms of the June 2009 Co-operation Agreement  in the Chinese Agreement and/or the Deed and/or prepare a separate shareholders agreement between Shing/YLIL and Robin, or anything in writing, upon  Shing/YLIL  becoming a shareholder of the Company. 

143.  Having considered Robin’s evidence, I do not find it probable that there was June 2009 Co-operation Agreement, or any other binding co-operation agreement with the terms as pleaded by Robin. Whatever discussions Robin had with Shing prior to the sale of his shares to YLIL, if agreed, would have been contained in the Chinese Agreement and/or the Deed as varied by the Letter.

144.  It was not in fact disputed that prior to Robin being ousted during the 2010 AGM, there had been letters sent to the Company from what his Counsel described as “whistle blowers”[67].  These letters showed that there were at that time already two actions commenced by different creditors against Robin and also Robin had issued a dishonoured cheque to a third creditor.  In the circumstances, Robin’s ousting as an executive director and chief executive officer should not have come as a surprise to him.  There was also no sufficient evidence that Robin had ever made any complaint to Shing or to any one regarding him being ousted at the 2010 AGM.

G.   CONCLUSIONS AND ORDERS

The 50m Shares Claim

145.  Recorder Chow had already found that the 3 Conditions existed and that there was breach on the part of Robin of the Oral Agreement.

146.  In the amended consolidated statement of claim, YLIL claimed damages in the sum of HKD 7,700,000 arising from loss of the 50 m shares or alternatively, damages to be assessed. In Ps Counsel’s Closing Submissions, the amount of damages was stated to be HKD 3,600,000 having regard to the share price on 11 and on 17 January 2011. 

147.  There were no closing submissions from Robin’s Counsel in relation to the damages claimed.  In the circumstances, I allow Ps’ claim and award damages of HKD 3,600,000 to YLIL to be paid by Robin.  As for interests, Ps sought interest at half judgment rate from 17.11.2011, there was no proper explanation as to why HCA 1050/2015 was issued only in 2015, and also no proper explanation/submission as to why pre-judgment interest rate should be at half judgment rate.  Having considered the circumstances in this case, I order Robin to pay interest at prime rate plus 1 % per annum from date of issue of the writ in the HCA 1050/2015 Action until date of judgment and thereafter at judgment rate until full payment.

The Promissory Note Claim

148.  Shing had provided evidence that he had procured Dragon Hill to pay for the 1^st, 2^nd and 3^rd Instalments on behalf of Robin to CTF under the Deed as varied by the Letter.  It was not disputed that Robin never delivered the 50.856m PN within the time stipulated in the Deed as varied by the Letter and/or prior to December 2010 as agreed under the 2^nd Oral Agreement About the Note, and I find Robin has breached his obligations thereunder.

149.  Ps’ statement of claim was amended on 24 September 2019.  By the amended pleading, it was pleaded that to the best knowledge of Shing that Robin had converted the 50.856m PN into shares and then cashed out to pay himself, and that despite the conversion exercise, Shing got neither the 50.856 PN nor HKD 50,856,000 from Robin, and Shing thus claimed damages of HKD 50,856,000.

150.  There were no submissions from Robin’s Counsel in relation to the amount claimed. I will allow Ps’ claim and award damages of HKD 50,856,000 to be paid by Robin to Shing’s estate. As for interests, Ps have asked for interests to be calculated from 31 December 2010 (the deadline imposed in the 2^nd Oral Agreement About the Note).  There was no proper explanation from Ps as to why the Promissory Note Claim was only taken out in 2016, or that pre-judgment interest rate should be at half the judgment rate.  Having considered the circumstances of this case, I am only prepared to order Robin to pay interest at prime rate plus 1% per annum on the amount ordered from the date of writ in the HCA 542/2016 Action until judgment and thereafter at judgment rate until full payment.

Robin’s Counterclaim

151.  In light of my finding that the June 2009 Co-operation Agreement as pleaded by him did not exist, I dismiss Robin’s Counterclaim.

Costs

152.  As Ps have succeeded in their claims, costs normally follow the event.  I order that D shall pay Ps costs of the 50m Shares Claim in the Consolidated Actions and/or HCA 1050/2015, including any costs reserved, to be taxed on party and party basis, if not agreed.

153.  As for the Promissory Note Claim, i.e. HCA 542/2016, Ps have sought costs on indemnity basis by reason of clause 4(v)  of the Deed.  Upon my reading, the reference to legal costs were in brackets, I am not satisfied that the “one dollar for one dollar” indemnity phrase refers to the legal costs.  I will order D to pay Shing’s estate costs of the Promissory Note Claim in the Consolidated Actions and/or HCA 542/2016 including any costs reserved, to be taxed on party and party basis, if not agreed.  

154.  As Robin’s Counterclaim, I order Robin to pay Ps’ costs including any costs reserved, to be taxed on party and party basis, if not agreed. 

155.  The above costs orders are on nisi basis and shall be final after 14 days.

Mr Felix Ng, instructed by Y.S. Lau & Partners, for the Plaintiffs

Mr Kenny Kwok, instructed by L & L Lawyers, for the Defendant