MING SHIU CHUNG AND OTHERS v. MING SHIU SUM AND OTHERS

HCA 18407/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 18407 OF 1999

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J U D G M E N T

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INTRODUCTION

1. This is an action for a declaration that the purported allotments and/or issuance of 5,000 bearer shares having share certificates number "BSS1" to "BSS5" and 5,000 ordinary shares having share certificate number "01" to "05" (the "Additional Shares") of the 2nd Defendant ("JFM Inc") to the 1st Defendant are void and of no effect and an injunction to restrain the 1st Defendant from continuing to act as director of the 2nd Defendant. The parties, except the 2nd Defendant which is a corporate defendant, were the children of the late Ming John Fook (the "Father"), who died on 21 December 1992. Their mother passed away in 1984.

Background

2. The Father was one of those Shanghai businessmen who came to Hong Kong in the 1950s and earned themselves a great fortune. He had seven children. He entered into the construction business and later incorporated Ming Hsing Development Company Limited ("MHD") to acquire properties for redevelopment. For his estate duty planning purpose, he incorporated JFM Inc in April 1992 to which he transferred all his business and assets. He was helped in his business by his second son, the 1st Defendant ("Lawrence Ming") who is a director of MHD and JFM Inc. All his other children worked and lived overseas for most of the time.

3. In 1992, the Father's health was deteriorating. On 29 September 1992, he signed a memorandum in Chinese (the "Chinese Memorandum") stating that he had transferred all his assets to JFM Inc and had decided to divide all the shares of JFM Inc into seven equal parts to be distributed equally to his children. The Chinese Memorandum was executed in the presence of a trainee solicitor and a clerk from Messrs Baker & McKenzie. Then he arranged for all his children to return to Hong Kong for a dinner on 10 October 1992, during which the Chinese Memorandum was read out. Each child was given $5 million for attending the dinner on that occasion. On 21 December 1992, the Father died.

4. In January 1993, Lawrence Ming issued seven lots of 1,000 bearer shares in JFM Inc to himself and his siblings. In February or March 1993, he gave himself and each sibling $5 million as dividend from JFM Inc. On 30 April 1993, the siblings had a shareholders meeting chaired by the 4th Defendant ("Alex Ming") in which it was resolved that the group of companies under JFM Inc be liquidated. But no action was taken to liquidate the companies.

5. On 28 January 1994, the siblings had another shareholders meeting in which Lawrence Ming distributed $1 million as dividend to himself and each sibling and announced the appointment of the 3rd Defendant ("Kenneth Ming") as a director of MHD. On 21 February 1994, some of the siblings passed a resolution to remove Lawrence Ming as director of JFM Inc and to appoint themselves as directors. The Plaintiffs' solicitors, Messrs Hau, Lau, Li & Yeung wrote to inform Lawrence Ming of his removal. On 11 March 1994, Messrs Baker & McKenzie replied on behalf of Lawrence Ming stating that the siblings were not the majority shareholders of JFM Inc because of the Additional Shares held by Lawrence Ming.

6. On 28 October 1994, the Plaintiffs made a report to the Commercial Crime Bureau asserting forged signatures on the share certificates in respect of the 10,000 Additional Shares in JFM Inc held by Lawrence Ming.

7. On 24 September 1996, the Plaintiffs issued proceedings in High Court Action No. P16 of 1996 seeking a declaration that the Chinese Memorandum is the will of the Father. On 7 January 1998, Yam J ordered Lawrence Ming to release the ten share certificates in respect of the Additional Shares and the two minutes dated 8 August 1992 approving the allotment of the Additional Shares (the "August Minutes") for forensic examination. Lawrence Ming appealed against the order of Yam J. The appeal was dismissed by the Court of Appeal on 10 June 1998. On 29 November 1999, the Plaintiffs issued the present proceedings.

The Plaintiffs' case

8. The Plaintiffs' case is relatively straightforward. First and foremost, they rely on the intention of the Father as expressed in the Chinese Memorandum which is that he intended to give each of his children an equal one-seventh share in JFM Inc. For the purpose of these proceedings, there is no need for me to decide whether the Chinese Memorandum is a testamentary document. Secondly, the Plaintiffs rely on the alterations in the August Minutes and the ten share certificates in respect of the Additional Shares as evidence of forgery. These alterations are not disputed. They also rely on the evidence of the two handwriting experts called by the parties that they are unable to arrive at any concluded opinion whether six of the ten signatures purportedly signed by the Father on the ten share certificates and the two signatures on the August Minutes were genuine or forged. Lastly, they rely on Lawrence Ming's failure to disclose the Additional Shares until a very late stage. The inference they ask me to draw is that the Father's signatures on some of the share certificates were forged or even if they were genuine, they were signed without the Father's knowledge and consent as to the contents and effect of these documents.

Lawrence Ming's case

9. Lawrence Ming's case is that he was his Father's business partner and the Father agreed to issue him 10,000 shares in JFM Inc in respect of his interest in the partnership and to compensate him for $14 million and $35 million drawn by the Father from the business respectively in 1988 and 1992 in making payments to himself and his siblings. At a directors' meeting of JFM Inc held on 8 August 1992 as evidence by the August Minutes the Father allotted 5,000 ordinary shares and 5,000 bearer shares to him, i.e. the Additional Shares. At another directors' meeting on 18 September 1992, a resolution was passed allotting 7,000 bearer shares to the Father for the purpose of distribution after the Father's death in accordance with the Chinese Memorandum (the "September Minutes"). He said it was the Father's intention that the allotment of the Additional Shares to him was to be kept secret to avoid dispute with his siblings and that the Father would have a subtle way of telling his siblings about the allotment in the Chinese Memorandum. He relies on his handwriting expert's evidence that the Father's signatures on four of the share certificates were genuine and that the signatures on the remaining six share certificates and the two August Minutes may well have been signed by the Father. He also relies on Ivy Wong's evidence that she saw the Father signing the August Minutes and the share certificates. The alterations were just innocent corrections made by Ivy Wong. He also relies on the corroborating evidence of Betty Wong of MF Accounting & Secretarial Services Ltd, the service company which provided secretarial services to JFM Inc. Lastly, he seeks to put in evidence the past events, including the 1977 incident, as part of the factual matrix for the purpose of construing the Chinese Memorandum.

The issues

10. The primary issue in this case is whether the ten share certificates in respect of the Additional Shares allegedly held by Lawrence Ming are valid or genuine. This involves a finding whether the Father signed the August Minutes and the ten share certificates physically; and if he did, whether he did so with the knowledge and consent as to their contents and effect.

11. The legal issue raised in this case is whether the Plaintiffs should bear the legal burden of proving the Father's signatures on the August Minutes and the ten share certificates were forgeries or whether the Defendants should bear the legal burden of proving their authenticity.

12. The factual issues are what was the intention of the Father as ascertained from the Chinese Memorandum, whether the Father's signatures on the August Minutes and the ten share certificates in respect of the Additional Shares were genuine or forged and if they were genuine, whether they were signed by the Father with knowledge and consent as to their contents and effect.

13. The parties' case stands or falls on my finding of the credibility of Lawrence Ming and Ivy Wong and the reliability of their evidence. Little, if any, would turn on the credibility of Ronald Ming and Betty Wong.

Burden of proof

14. Before turning to the evidence, I shall first deal with the question of burden of proof. Counsel differ as to who bears the legal burden of proof. Mr Wong, SC, submitted that the principle is that he who asserts must prove. He quoted the following passages of Phipson on Evidence, 15th Ed (2000) at 4-03 and 4-04:

"The rule [that he who asserts must prove, not he who denies] is adopted principally because it is but just that he who invokes the aid of the law should be the first to prove his case; and partly because, in the nature of things, a negative is more difficult to establish than an affirmative. ...

In deciding which party asserts the affirmative, regard must be had to the substance of the issue and not merely to its grammatical form, which latter the pleader can frequently vary at will. Moreover, a negative allegation must not be confused with the mere traverse of an affirmative one. The true meaning of the rule is that where a given allegation, whether affirmative or negative, forms an essential part of a party's case, the proof of such allegation rests on him."

15. He cited the following dicta of Viscount Maugham in Joseph Constantine Steamship Line, Limited And Imperial Smelting Corporation Limited [1942] AC 154 [H.L.] at 174 in support of the above proposition:

"The burden of proof in any particular case depends on the circumstances under which the claim arises. In general the rule which applies is 'Ei qui affirmat non ei qui negat incumbit probatio' (i.e. Proof rests on he who affirms not he who denies). It is an ancient rule founded on considerations of good sense and it should not be departed from without strong reasons."

16. Reliance was also placed on the following dicta of Bowen LJ in Abrath v The North Eastern Railway Co. (1883) 11 QBD 440 (C.A.) at 457:

"Wherever a person asserts affirmatively as part of his case that a certain state of facts is present or is absent, or that a particular thing is insufficient for a particular purpose, that is an averment which he is bound to prove positively."

17. Mr Wong, SC, also referred me to the recent decision of Wang Din Shin And Nina Kung alias Nina T H Wang, Probate Action No. 8 of 1999, in which Yam J held that since it was the plaintiff who alleged forgery, the burden was on him to prove that the signatures and documents were forged. He urged me to follow the approach of Yam J.

18. On these authorities, Mr Wong, SC, submitted that the burden of proof rests fairly and squarely on the Plaintiffs, who alleged forgery or put forward other arguments to impeach the authenticity or validity of the two August Minutes and the ten share certificates in respect of the Additional Shares.

19. On the other hand, Mr Grossman, SC, referred me to Doe D Devine v Wilson (1855) 10 Moo PC 502, in which the Privy Council held that in a civil case, the onus of proving the genuineness of a deed is on the party who produces it and asserts its validity. The Privy Council held at 531:

"Now, there is a great distinction between a civil and a criminal case, when a question of forgery arises. In a civil case the onus of proving the genuineness of a deed is cast upon the party who produces it, and asserts its validity. If there be conflicting evidence as to the genuineness, either by reason of alleged forgery, or otherwise, the party asserting the deed must satisfy the jury that it is genuine. The jury must weigh the conflicting evidence, consider all the probabilities of the case, not excluding the ordinary presumption of innocence, and must determine the question according to the balance of those probabilities. In a criminal case the onus of proving the forgery is cast on the prosecutor who asserts it, and unless he can satisfy the jury that the instrument is forged to the exclusion of reasonable doubt, the prisoner must be acquitted."

20. The above dicta were adopted by the Court of Appeal in Club Deluxe Ltd And Club Metropolitan and others [1995] 2 HKLR 69. In that case, the plaintiff sued on the basis that the 3rd defendant had signed an employment contract for two years. The 3rd defendant denied her signature on the contract and alleged it was a forgery. The trial judge seemingly assumed that the burden was on the 3rd defendant to prove the forgery and reached the conclusion that she failed to discharge that burden. The Court of Appeal held that was incorrect. Litton JA (as he then was) said at 82:

"This is plainly erroneous. There was no legal burden imposed on the defendant to prove forgery, 'irrefragable' or otherwise. The legal burden rested on the plaintiff, to satisfy the court on a balance of probabilities that the signature on the contract was that of D3."

Penlington JA also held at 88:

"Here however I have come to the view that Barnett, J did not approach the matter on the correct basis as to where the onus lay in considering the authenticity of the contract. It was submitted to him that he should base his decision on the legal maxim that the contract should be presumed to be authentic unless it was shown, on a balance of probabilities to be false and, although he does not specifically say so, he seems to have done so ... Barnett, J was not referred to the decision, relied on here by Mr Wong, of Devine v Wilson (1855) 10 Moo PC 502 which while now some 150 years old is good authority that there is an onus on a party tending a document, which is challenged as being a forgery, to prove it is in fact genuine."

21. I have no doubt that the principles cited by Mr Wong, SC, are correct. However, applying those principles to the circumstances in this case leads me to a contrary conclusion, which is consistent with that reached by the Privy Council in Doe D Devine v Wilson and the Court of Appeal in Club Deluxe Ltd And Club Metropolitan and others. The question who bears the burden of proof cannot be considered in vacuo without first considering what is to be proved. To answer this question, the court must have regard to the substance of the issue and the circumstances in which the claim arose. The court must also consider which party asserts the affirmative. Burden of proof is not to be decided as a game of words. An affirmative may always be expressed as a negative allegation. Moreover, a negative allegation must not be confused with the mere traverse of an affirmative one. A burden on the part of the plaintiff to prove the forgery of a document may be expressed as a burden on the part of the defendant to prove its authenticity. The difference between Mr Grossman, SC and Mr Wong, SC is whether it is the Plaintiffs who have the burden of proving the forgery or whether it is the Defendants who have the burden of proving the authenticity of the August Minutes and the ten share certificates.

22. The circumstances in which the claim arose are as follows. The siblings passed a resolution to remove Lawrence Ming as director of JFM Inc on the basis that they were shareholders of JFM Inc to which the Defendants had no dispute. Lawrence Ming relied on the two August Minutes and ten share certificates in respect of the Additional Shares to invalidate the resolutions passed by the Plaintiffs. Considering the substance of the issue and the circumstances in which the claim arose, Lawrence Ming does not simply put the Plaintiffs to the proof but specifically asserts the affirmative, i.e. the validity of the August Minutes and the ten share certificates. He falls squarely within the dicta of Bowen LJ in Abrath v The North Eastern Railway Co cited by Mr Wong, SC. The Plaintiffs, on the other hand, are not relying on these documents, whether on their authenticity or on their falsity. Thus, the issue here is the authenticity of the two August Minutes and the ten share certificates. If someone tenders a document and seeks to rely on it, the burden must be his to show that the document is authentic, the signatures thereon are genuine and that the signatories signed with knowledge of the contents and effect of the document. The general rule "'Ei qui affirmat non ei qui negat incumbit probatio' (i.e. Proof rests on he who affirms not he who denies) applies. This is an ancient rule founded on considerations of good sense. It would be an impossible task for a litigant if he has to bear the burden of disproving each and every document produced by his opponent.

23. A party who disputes the authenticity of a document relied on by his opponent has to discharge the evidential burden of proving a prima facie case that the document is not genuine for one reason or another. Then, it would be up to the party who seeks to rely on that document to discharge the legal burden of proving that the document is authentic. Hence, the Defendants must bear the burden of proving on a balance of probabilities that the August Minutes and the ten share certificates are valid and genuine.

24. Despite their difference as to who bears the burden of proof, counsel are ad idem that the question of burden of proof would only arise if the court cannot decide whether the signatures on the documents were genuine/forged or the evidence is so evenly balanced and the one who has the legal burden of proof would fail, i.e. the Defendants in this case would fail if they are unable to prove the authenticity of the documents and the genuineness of the Father's signatures on the documents. As my analysis will show, this is not a case which will have to be resolved on the burden of proof.

FACTUAL BACKGROUND

25. The Defendants seek to rely on the total background since incorporation of MHD for the purpose of proving the Father's allotment of the Additional Shares to Lawrence Ming and for the purpose of construing the Chinese Memorandum.

Lawrence Ming's contribution to MHD

26. Lawrence Ming relies heavily upon his contribution to MHD as a reason for the Father's allotment of the Additional Shares to him. He gave up a senior position in Grande Price Wine and Spirits Limited when he was next to the top in order to join MHD in 1972. He suffered a reduction in his income and employment prospects. He negotiated for the purchase of a property in Kin Wah Street which MHD redeveloped and which resulted in an enormous increase in the wealth of the family. He was appointed managing director of MHD and was awarded 1,400 shares in MHD for his contribution. He became a business partner of the Father because of his contribution to the family business.

27. He devoted himself to the family business and developed it into a very successful one. He offered himself as guarantor for the company's debt to the extent of $214 million. He remained in Hong Kong and lived with the Father until the Father's death. By way of contrast, all his siblings left the Father to work or reside abroad and did not contribute anything to the family business. Ronald Ming in particular was unbecoming. His management of Ming Hsing Trading (UK) Limited ("MHT(UK)") was a total failure which ended up with his instant dismissal by the Father in 1976. When he returned to Hong Kong to join MHD, his performance was unsatisfactory.

28. The Plaintiffs disputes that Lawrence Ming was allotted 1,400 shares in MHD. According to Ronald Ming, except for the 4th Plaintiff ("Bertha Ming") and Lawrence Ming, each sibling was given 1,000 shares in MHD in 1973. The Father was not pleased with Bertha Ming's then boyfriend and so did not give any shares to Bertha Ming. Hence the Father gave another 400 shares to Lawrence Ming and another 600 shares to the Mother to be held in trust for Bertha Ming. This is denied by Lawrence Ming. Bertha Ming did not give evidence. On the totality of the evidence, I accept the version of Ronald Ming as the Father was a man who treated his children equally. Nothing significant turned on Bertha Ming's entitlement to the shares.

The 1977 incident

29. According to Lawrence Ming, the preference by the Father in appointing him as managing director of MHD led to the 1977 incident. This incident is heavily relied upon by Lawrence Ming as the reason for the secretive way in which the Father allotted the Additional Shares to him and as part of the factual matrix which I should take into account in construing the Chinese Memorandum.

30. According to Lawrence Ming, all the siblings, with the exception of Alex Ming who was then in Canada, suddenly confronted the Father in 1977 and complained about his appointment as managing director of MHD. The Father was angry and demanded the siblings to return the shares in MHD. Subsequently, the Father purchased the shares back from all of the siblings for $200,000 and Lawrence Ming received $280,000 for his 1,400 shares. Lawrence Ming maintained his position as managing director in MHD. Ronald Ming denied there was such a confrontation and repurchase of the shares in MHD by the Father. He said the Father recalled the shares to avoid further conflict because of a complaint made by Kenneth Ming to ICAC about Lawrence Ming. That was hearsay and undocumented. He said the $200,000 was a gift in consideration of love and affection. Ronald Ming was totally discredited as the repurchase of the shares was fully documented with bought and sold note for which ad valorem duty was paid.

31. Ronald Ming was also discredited in relation to his management of MHT(UK) in the United Kingdom which ended up with his immediate dismissal as director by the Father in February 1976, the sale of the company property in which he lived and the sale of the company car which he used. His dismissal and the sale of the company property were documented in the company's minutes signed by the Father. Ronald Ming's evidence was that he was suddenly told by Kenneth Ming that he was dismissed and Kenneth Ming took the company car away from him. He was so annoyed that he left his work without even complaining to the Father. That explanation is incredible. Anyway, I do not need to go into details about this incident as nothing in these proceedings turns on his credibility. It is the credibility of Lawrence Ming and Ivy Wong which is the central issue of credibility in this case.

THE CHINESE MEMORANDUM

Principles of construction

32. For the purposes of these proceedings, the Chinese Memorandum is not to be treated as a testamentary document. It is admitted for the purpose of proving the Father's contemporaneous intention was such that he could not have consented to the allotment of the Additional Shares. The Chinese Memorandum is not a bilateral contractual document, encapsulating the product of a negotiation or bargain between two parties. It is a unilateral statement written by the Father setting out his thinking and wishes. On that basis, Mr Wong, SC, submitted that I should adopt the "armchair principle" in construing the Chinese Memorandum as if it were a will. A clearer statement of that principle is to be found in the following passage in Allgood And Others v Blake (1873) LR 8 Ex 160 at 162:

"The general rule is that, in construing a will, the Court is entitled to put itself in the position of the testator, and to consider all material facts and circumstances known to the testator with reference to which he is to be taken to have used the words in the will, and then to declare what is the intention evidenced by the words used with reference to those facts and circumstances which were (or ought to have been) in the mind of the testator when he used those words..."

33. Mr Wong, SC, also submitted that as in the construction of a will, the court may refer to extrinsic evidence even if the words are clear. He cited the following passage from Theobald on Wills ((16th Ed 2001) para 17-23:

"The testator's intention is to be ascertained from an examination of the whole of his will, construed with the aid of any admissible extrinsic evidence. The testator's 'overriding' intention, when ascertained with reasonable certainty in this way, 'is competent not only to fix the sense of ambiguous words, but to control the sense even of clear words, and to supply the place of express words, in cases of difficulty or ambiguity.'"

34. In my view, the principles concerning interpretation of a contract applies equally to the interpretation of a unilateral document: see Rabin And Others v Gerson Berger Association Ltd [1986] 1 WLR 526. I can find nothing in the cases cited by Mr Wong, SC, on construction of wills which adopts any principle inconsistent with those stated by Lord Hoffmann, NPJ, in Jumbo King Ltd and Faithful Properties Ltd & Others, [1999] 2 HKCFAR 279 at 296 or in Investors Compensation Scheme Ltd and West Bromwich Building Society [1998] 1 WLR 897 at 912F - 913F. The meaning of a document is to be sought in the document itself. Interpretation of a unilateral document is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the maker of the document in the situation he was at the time of making the document. The background or the matrix of fact includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man. In the case of construction of a contract, there is a requirement that the background should have been reasonably available to the parties and it does not include the previous negotiations of the parties and their declarations of subjective intent. In the case of construction of a unilateral document, such as a will or a deed, the background must include all the material facts and surrounding circumstances known to the maker of the document. Hence, we have the "armchair principle" for construction of a will. But as Lord Hoffmann said in Investors Compensation Scheme Ltd v West Bromwich Building Society, the factual matrix must be that which would have affected the way in which the language of the document would have been understood by a reasonable man. Thus the intention has to be found in the document and by applying the objective test. The intention to be found is the intention which a reasonable man would have had if placed in the situation of the maker of the document. The reasonable man should not go outside the document to look for what the maker has declared on earlier occasions. Extrinsic evidence is admissible to explain what a person has written but not for the purpose of showing what he really intended. Evidence of the intention of the maker of the document must be excluded.

35. It is said in Theobald on Wills (16th Ed 2000) that a testator's intention may be found with the aid of extrinsic evidence. But, there is a limit to which extrinsic evidence may be used. It is a cardinal presumption that a person intends what he says. His words must be construed as they stand and the intention is to be sought in the document itself: see Bewise Motors Co Ltd and Hoi Kong Container Services Ltd [1997-98] 1 HKCFAR 256 at 275. Thus, the factual matrix can only be used to elucidate the document but not to contradict it. Where ordinary words have been used they must be taken to have been used according to the ordinary meaning of those words. If their meaning is clear and unambiguous, effect must be given to them because that is the intention as expressed by the maker of the document. It is not for the court to go beyond the document to create ambiguity which according to the ordinary meaning of the words, is not there. If the ordinary meaning of the words makes sense in relation to the rest of the document and the factual background, then the court will give effect to that language, even though the consequences may appear hard for one side or the other: see Jumbo King Ltd and Faithful Properties Ltd & Others [1999] 2 HKCFAR 279 at 296. In the examples cited by the learned author of Theobald on Wills, extrinsic evidence was admitted to give meaning to words or identities of beneficiaries described in the will when they were ambiguous but not when they were unambiguous.

36. The major dispute between counsel is whether the 1977 incident should be considered as part of the factual matrix in construing the Chinese Memorandum. It is Lawrence Ming's case that it was because of the Father's concern that this incident should not be repeated which caused the Father to write the Chinese Memorandum in the subtle way he did. The Father was concerned that the family business and name should continue but all his children, except Lawrence Ming, lived overseas and were not interested in the continuation of the family business. He submitted that the Father was concerned that Lawrence Ming should be given what he deserved for his contribution but was mindful of accusation of favouritism and wanted to avoid a repetition of the 1977 incident and did not want to see his provision for the children degenerate into a recipe for power scramble. The Father also wanted to get the children together harmoniously. Hence, the Father made this rather complex bearer shares arrangement without telling the children that he had made Lawrence Ming the majority shareholder. Mr Wong, SC, submitted that all these and the 1977 incident should be taken into consideration when interpreting the Chinese Memorandum.

37. Quite apart from the fact that I think that such secretive arrangement would not achieve the Father's desired result but would only invite a long and bitter legal battle, Mr Wong, SC, is seeking to add to the Chinese Memorandum words which are not there so as to give the document a distorted construction and to attribute an intention to its maker which is inconsistent with that which the plain language of the Chinese Memorandum conveys. This is contrary to the cardinal principle of construction that the intention is to be ascertained from the document itself and the factual matrix can only be used to elucidate the document but not to contradict it. The provision in relation to the allotment of shares in the Chinese Memorandum, as I shall show, is unambiguous. I agree with Mr Grossman, SC's view that such evidence is inadmissible for the purpose of construing the Chinese Memorandum. The evidence may be relevant for the purpose of considering whether the Father did allot the Additional Shares and for the purpose of considering the credibility of Ronald Ming who gave evidence on behalf of the Plaintiffs.

38. In my view, the relevant admissible factual matrix is as follows:

(a) at the material time, the Father knew he was dying but he was still of clear mind;

(b) he had to decide how to deal with his estate; he also wished to give his last lesson and express his last wishes to his children;

(c) he wrote down these matters in Chinese, which is his native language which he knew well, and caused them to be typed up;

(d) he asked lawyers to witness his signature on the document;

(e) he asked Lawrence Ming to make photocopies for distribution to his children at the dinner;

(f) he called all his children back from overseas in order that the Chinese Memorandum could be read out in their presence so that there would be no misunderstanding.

39. With the above conclusion, I now turn to the construction of the Chinese Memorandum.

Construction of the Chinese Memorandum

40. There is no doubt that the Father treated the Chinese Memorandum very seriously. He had the document typed up. It was addressed to each of his seven children and he named them all in the document. He arranged a trainee solicitor and a clerk from Messrs Baker & McKenzie to witness the execution of the document. He must have satisfied himself that the wording of the document accurately reflected his intention. Then he called his children back from around the world to attend a dinner on 10 October 1992. He promised each of his children $5 million for attending the dinner on that occasion. He arranged photocopies of the Chinese Memorandum to be given to all his children. Then he had one of his children, Alex Ming, read out the Chinese Memorandum. He assented to what was read out in their presence. In view of the background about the execution of the document and the arrangement leading to the dinner on 10 October 1992, I have no doubt that the Father must have satisfied himself that the Chinese Memorandum accurately reflected his wishes and that he seriously intended to give effect to the Chinese Memorandum.

41. In the first page of the Chinese Memorandum, he described his struggle in Shanghai and in Hong Kong and how he set up his construction business. He gave credit to Lawrence Ming for accepting his suggestion to quit his job to join MHD.

42. Then in the last sentence on the first page, he wrote:

"為了我將來的遺產稅問題，我組織了一間明長福海外公司，將我名下所有資産撥入明長福海外公司之内，其資産及負債列出如附表。"

"To resolve the problem of my future estate tax, I founded Ming John Fook Inc where I put all the capital and assets in my name, The statement of assets and liabilities is in the appendix."

43. Mr Wong, SC, submitted that what the Father did could not have been for the sake of avoiding payment of estate duty because JFM Inc is a company incorporated in British Virgin Island and transfer of shares thereof does not attract Hong Kong estate duty. I think that was precisely the reason why the Father founded JFM Inc. I do not think much turned on that.

44. What is important is that the Father annexed a statement of his assets and liabilities in the appendix. The Father specifically mentioned, firstly, that he founded JFM Inc for his estate duty planning purpose and secondly, that he transferred all his assets to JFM Inc. In the preceding paragraph, the Father gave credit to the assistance given by Lawrence Ming, but here he did not mention anything about Lawrence Ming. There is not the slightest suggestion that anyone else other than the Father was the owner of JFM Inc and the assets which he transferred to JFM Inc.

45. Then he continued:

"現在我已決定把明長福海外公司的股份分為七份，同樣股數同一樣的價值，分配給我的子女每人一份(此乃不記名股票)，肇鍾、肇森、肇棠、肇華、肇雄、肇娟、肇球每人各得一份。"

"Now I have decided to divide the shares of Ming Cheung Fok Overseas Company into seven parts, each of which has the same number of shares and worth. Each of you is entitled to one part (these are all bearer stocks), i.e. Siu-chung, Siu-sum, Siu-tong, Siu-wah, Siu-hung, Siu-kuen and Siu-kau shall all have one part."

46. It has been rightly pointed out by Mr Wong, SC, that the Father did not say he decided to divide "all the shares of JFM Inc" in the Chinese Memorandum as it appeared in the English translation. He also referred to the part in parenthesis, "these are all bearer stocks". Mr Wong, SC, submitted that the Father knew full well the difference between bearer shares and ordinary shares and that the Father treated Lawrence Ming as wearing two hats: one as the person in control of the family business and the other as one of his seven children. Hence, Mr Wong, SC, submitted that the shares the Father intended to divide were limited to bearer shares and were not all the shares in JFM Inc, implying that there are other shares held by Lawrence Ming. I think the words "these are all bearer stocks" are descriptive and not qualifying or limiting in nature. Reading the sentence as a whole, I am unable to find that the Father as implying there were other shares in JFM Inc held by the Father, not being the subject matter of this distribution or being held by another person. If indeed the Father intended to mean there were other shares other than the seven lots, it would not have been difficult for him to say "I have decided to divide the shares that I own in JFM Inc into seven parts." The Father repeatedly emphasised equal division of the shares into seven lots, each lot has the same number of shares and worth and each of the children is entitled to one part. He went to the trouble of naming each child as being entitled to one lot only. The Father's intention could not have been clearer. It is irreconcilable with any suggestion that any one child would get more than the others.

47. Then the Father went on and wrote:

"我在生之時，我要肇森和嘉福把那七份股票存於銀行保險箱之内，要他們兩人同時簽名才有效開啓。直至我百年歸老後，才准分給你們。我要强調：在你們還未分到這份不記名的股票之前，你們全部人等都不是該公司股東，所以你們是無權過問該公司一切業務、内政及決策，直到你們每人分到一份不記名股票時為止。"

"While I am still alive, Siu-sum and Ka-fok are required to store these seven parts of shares in a safety box of a bank which can only be opened when they sign for its opening at the same time. The shares shall only be given to you after my death. Let me reiterate: none of you is a shareholder of the company before you are given the bearer stocks. Therefore, you have no right to interfere with the company's business, internal affairs and policies until you are all given one bearer stock."

48. The Father made no distinction between Lawrence Ming and his siblings. He used unequivocal language "all of you". He reiterated that none of them is a shareholder of JFM Inc and might not interfere with the company until after his death when they would be given the bearer shares. This is consistent with Lawrence Ming being able to manage JFM Inc as a director but not as a shareholder but is irreconcilable with the suggestion that any one of the children was a shareholder of JFM Inc before the Father's death. This is inconsistent with Lawrence Ming's case that the Father had allotted him 10,000 shares in JFM Inc a month and half before the Father signed the Chinese Memorandum.

49. Then he wrote:

"如果你們想處理明長福海外公司的資產，你們先要徵求肇森的同意，因為他知道所有程序，同時亦熟知香港地產市況。"

"If you want to transact any business which involves Ming Cheung Fok Overseas Company's assets, you have to secure Siu-sum's consent first because he knows all the procedures and is well-informed on Hong Kong's realty."

50. Obviously, this is the Father's direction as to what the children should do after becoming shareholders of JFM Inc upon his death. For good reason, he told the children to secure Lawrence Ming's consent if they want to transact any business involving the assets of JFM Inc. The reason was because Lawrence Ming is better informed about Hong Kong than the other children and not because he is the majority shareholder.

51. After that he wrote a few words of encouragement. In the last paragraph, the Father again gave credit to his brother, Ka-fook and to Lawrence Ming for the achievement of the company. He reminded the children not to be greedy.

52. The intention of the Father as could be ascertained by reading the Chinese Memorandum as a whole was simply that all the shares in JFM Inc, which represented his total estate, would be divided into seven equal portions and each of the seven children, and he named each one of them, shall be given an equal portion. The words and language used are clear and unambiguous. There is no room for assistance to be sought from extrinsic evidence.

53. Mr Wong, SC, submitted that the Father was a fair man who would reward and punish according to merits and wanted to give Lawrence Ming what he deserved as a business partner. Hence, the Chinese Memorandum was drafted by the Father in a subtle manner because the Father had good reasons not to expose the differential treatment between Lawrence Ming and his other children. By giving the children the impression that they might be getting an equal share, the Father managed to have the children accompanying him happily on the occasion in October 1992 and avoided the children from interfering with the business of JFM Inc and avoided a confrontation with his children. I am not convinced by these arguments. If the Father had indeed made Lawrence Ming the majority shareholder, he would be telling a very cruel lie to his six other children who were expecting to receive a one-seventh share of his estate. By the very subtle way of telling his children that they were not to receive a one-seventh share, he would be inviting litigation and bitterness among his children. If indeed he had made Lawrence Ming the majority shareholder, he should have unequivocally told his children during his lifetime to avoid dispute and while he would be in a position to secure Lawrence Ming's right by his prerogative as donor of his generosity. If what Lawrence Ming said were true, the Father knowingly landed his children into a long and wasting legal battle just for a few moments peace of mind and a dinner together with his children. This is hardly credible. Apart from that, these extrinsic evidence of the Father's intention are clearly inadmissible. Even if they were admissible, they are insufficient to overturn the clear and unambiguous language of the Chinese Memorandum as to give the document a clandestine meaning.

54. Lawrence Ming said he gave up a senior employment with Grande Price Wine and Spirits Limited when he was next to the top in order to join MHD. I have no doubt that he has contributed significantly to MHD's success and that none of his siblings participated in the company in the way he did. He stood as guarantor for the company's debt to the extent of $214 million. He was the only one who kept the Father company after the Mother died. His contribution was recognised by the Father in the Chinese Memorandum. He said the Father was a very fair man and would reward and punish according to merit and had promised him that he deserved more than his other siblings. Hence he argued that the Father could not have intended to equal distribution of the shares in JFM Inc.

55. This evidence, if accepted, supports his case that the Father gave him the Additional Shares. But the evidence is not admissible as part of the factual matrix for the purpose of construing the Chinese Memorandum. Even if it is admissible for that purpose, at the highest it would only enable him to argue that when construing the Chinese Memorandum, it should be assumed that the Father would not have intended an unreasonable and unfair result. But it is insufficient to override the clear language used in the Chinese Memorandum. Whether that result is fair or reasonable is very much a matter of opinion. But so far as the disposal of a person's asset is concerned, it is very much a matter for the donor. He may intend a reasonable and fair result which may, on an objective view, turn out to be unreasonable and unfair because of his own preference and prejudice. Or, he may have his own notion of fairness and may consider equal distribution fair and reasonable. One must not assume the Father's decision on fairness is based solely on fairness to one child. He may consider equal distribution the fairest. He may even consider Lawrence Ming has been adequately compensated by his remuneration package. As I said, the language used in the Chinese Memorandum is clear and unambiguous. The Father's intention to effect an equal distribution of his estate is clear beyond doubt. It is not the Court's business to go outside the Chinese Memorandum to search for evidence to prove otherwise and to re-write the Chinese Memorandum because on an objective view it is unfair.

56. I do not agree that the Father used to reward or punish in accordance with merits. I think all along, the Father treated every child equally, irrespective of merit. The Father disliked Bertha Ming's boyfriend. Yet, the Father gave each of the children, including Bertha Ming 1,000 shares in MHD, though Bertha Ming's share was held on trust by Lawrence Ming and the Mother. However, when the Father recalled or repurchased the shares as a result of the 1977 incident, all siblings were punished, including Lawrence Ming, whom he said was not at fault and Alex Ming who took no part in the incident. All sibling received $200,000. Thus equality rather than merit or demerit was a more important consideration in the Father's mind.

57. In 1988, the Father gave each child $2 million, irrespective of merit. Lawrence Ming did not receive anything extra for his contribution to MHD. Again in 1992, the Father gave each child $5 million for returning to Hong Kong to attend the dinner. Lawrence Ming also received his $5 million though he did not need any "incentive" to come to Hong Kong to attend the meeting. Thus, it was again equality which was the Father's sole consideration.

58. Lawrence Ming referred to Ronald Ming's dismissal as evidence of the Father's punishment in 1976. But soon after that, Ronald Ming was reinstated in MHD. Thus the Father was forgiving and equality ranked higher than punishment in the Father's list of priority.

59. All these are inadmissible as part of the factual matrix. Indeed if they are admissible, they support the interpretation of equal distribution more than Lawrence Ming's case of fairness and merit. In any event, none of these matters relied on by Lawrence Ming is sufficient to displace the clear and unambiguous language used in the Chinese Memorandum that the Father intended equal distribution of the shares in JFM Inc.

ALTERATIONS ON THE AUGUST MINUTES AND TEN SHARE CERTIFICATES

60. It is common ground that there were alterations on the two August Minutes and the ten share certificates in respect of the Additional Shares. The experts cannot tell who, when and why the alterations were made. If a party to a litigation puts in a document and seeks to rely on it, he must prove to the satisfaction of the court that the document is authentic, the circumstances the document came into being and that the person who signed the document did so freely and with knowledge of its contents. The circumstance speaks for itself. If the maker of the document is literate and the document is written in his own handwriting, the burden is easily discharged. If the maker is illiterate or if the document is written in a foreign language, a higher standard of proof is called for. If the document contains alterations and if the party seeks to rely on the document as altered, he must bear the burden of proving to the satisfaction of the court when and why the alterations were made. He has to prove to the satisfaction of the court that the person who signed the document did so with the knowledge of the alterations and agreed to the contents of the document as altered. Where the maker of the document is not called, there is a need for extra caution. Though in a civil case, the standard of proof required is that of the civil standard, the standard has to commensurate with the nature of the document as well as the nature and consequence of the alteration. An alteration which has the effect of amending the figure of one hundred to one hundred million requires much more cogent evidence than one which has the effect of amending the figure to one hundred and one. The same applies, where the date when the document was signed is material. If the alteration is not relied on by the party putting in the document and if the alteration is consistent with the document as a whole, the inference that the alteration was innocuous could be drawn.

The alterations

61. There are alterations to the two August minutes approving the allotment of 5,000 ordinary shares and 5,000 bearer shares to Lawrence Ming. The material alterations in both minutes are that the date of the minutes was changed from "8th October, 1992" to "8th August, 1992". There are erasures and alterations in other parts of the minutes which I consider immaterial and probably innocuous.

62. In respect of the share certificates for the 5,000 ordinary shares issued to Lawrence Ming, the date of issue was altered from "8th October 1992" to "8th August 1992." There are no other alterations.

63. In respect of the share certificates for the 5,000 bearer shares, the date of issue had been similarly altered. The certificate numbers were altered from "B" to "BSS". The distinctive numbers of the shares included in the certificate have also been altered.

The explanation for the alterations

64. According to Lawrence Ming, these minutes and share certificates were prepared by his secretary, Ivy Wong. Ivy Wong gave the following explanation in Court.

65. Sometime between August and October 1992, she received some documents from Betty Wong of MF Accounting & Secretarial Services Ltd. She passed the documents to Lawrence Ming. Later Lawrence Ming handed her copies of two minutes of board meetings of JFM Inc and ten share certificates. Lawrence Ming told her to type the date of meeting on the minutes and to type the information onto the share certificates according to the terms of the minutes. She was very busy. So, he placed the minutes and share certificates on one side or on a side table.

66. Some time later, she could not recall when but probably on 8 October 1992, she received some other documents from Betty Wong and she passed them to Lawrence Ming. Later, Lawrence Ming gave her another set of minutes of a board meeting of JFM Inc. Lawrence Ming told her that the meeting was held on 18 September 1992 and that 7,000 shares were allotted to the Father. Lawrence Ming told her specifically to type that date on the minutes. Then Lawrence Ming inquired if she had typed the previous sets of minutes and share certificates. She replied that she had not but would do so immediately, which she did.

67. She typed the date, "18th September 1992" on the minutes which Lawrence Ming just gave her. The authenticity of this Minutes is not in dispute. The date of this minutes was less than two weeks before the Father executed the Chinese Memorandum. This is the September Minutes.

68. Then Ivy Wong started to work on the earlier two sets of minutes and the ten share certificates. This was the first time she was asked to type on blank share certificates and she was very concerned to do it properly. She drafted the particulars of what to type on a piece of paper. Because of the seniority of the Father, she set aside the first 7,000 numbers for the 7,000 bearer shares to be allotted to the Father without following chronological order in which the shares were allotted. She typed the date "8 October 1992" as the date of issue, presumably that was the date when she did the typing. Then she typed the other particulars onto the certificates. Share number "7001" to "12000" were entered into the "Distinctive Nos" column of the five bearer share certificates allotted to Lawrence Ming which were numbered "B008" to "B012" and share number "0001" to "5000" were entered into the five ordinary share certificates allotted to Lawrence Ming numbered "01" to "05".

69. While she was checking her typing, Lawrence Ming instructed her over the intercom to have his initials "SS" typed on his bearer certificates. So she corrected the certificate numbers from "B008" to "BSS1" and so on. After that she felt it strange for the shares to be numbered from "7001" for share certificate "BSS1" instead of from "0001". Thus she altered the distinctive numbers for the share from "7001" to "12000" to "0000" to "5000".

70. Then she took the three sets of minutes and ten share certificates to the Father for signature. When she referred to the date of 8 October 1992 on the first two sets of minutes, the Father told her that it was a mistake as the meeting was held in August and instructed her to correct the minutes and the share certificates accordingly. She took the documents back and corrected the dates on the documents to 8 August 1992. Then she took the corrected minutes and share certificates to the Father who signed them in her presence. After that, she gave the documents to Lawrence Ming for signature.

71. The alterations to the date on the August Minutes and share certificates in respect of the Additional Shares, according to the Plaintiffs, are significant. The original date typed on these documents was "8th October". It would be nine days after the Chinese Memorandum was executed and just two days before it was read out to the children during the dinner. The allotment of the 10,000 shares to Lawrence Ming was so inconsistent with the intention as expressed in the Chinese Memorandum that it was unlikely that the Father would have so written the Chinese Memorandum the way he did if he had the allotment of the 10,000 shares in mind. On the other hand, it also stuns one's mind if the Father had the allotment in mind that he would cause the Chinese Memorandum to be read out during the dinner, making such a cruel lie to his children when reading out what was understood to be a testamentary document giving the children a equal share in his estate. The date is also very significant in another respect in that it would be a date after the 7,000 bearer shares had been allotted to the Father. Thus the Father's majority interest in JFM Inc would be adversely affected by the allotment of the 10,000 shares, if in fact the resolution contained in the August Minutes was made in October. A written consent from the Father would be required, according to Betty Wong. The need to prepare such a consent would have alerted Betty Wong and the need to procure the Father's signature on the consent might have revealed to the Father the fraudulent design, if the August Minutes was a forgery. In that connection the change in the share certificate numbers from "B008" etc. to "BSS1" etc. is also significant in that it supports the fact that the purported allotment of the 10,000 shares to Lawrence Ming came after the allotment of the 7,000 shares to the Father. At the time, Ivy Wong who had not yet developed an affair with Lawrence Ming, might have been an innocent agent and typed in the numbers B008 etc. because of her knowledge of the prior allotment of the 7,000 shares to the Father. At a later stage, it became necessary to change the numbers to "BSS" series to suit the fraudulent design because a simple change of the numbers to "B001" etc. would be too obvious.

72. These alterations were made under such suspicious circumstances that it calls for very cogent evidence if Ivy Wong's explanation is to be believed. But what heightens and confirms the suspicion is the numerous coincidence upon coincidence required to explain the alterations and the conduct of Lawrence Ming and Ivy Wong.

Ivy Wong's conduct and credibility

73. Ivy Wong was an experienced secretary. She joined MHD in June 1991. After the Father's death, she developed an intimate relationship with Lawrence Ming and gave birth to their daughter in January 1994. Owing to her knowledge that Lawrence had a relationship with another woman, they lived in separate rooms since about the end of 1995 until Lawrence Ming moved out altogether in or about 2001. However, Lawrence Ming sees the daughter from time to time, supports her living expenses of $20,000 to $30,000 a month and provides her with accommodation in Conduit Road. She is not an entirely independent witness as she depended financially on Lawrence Ming to a considerable extent.

74. Her lack of impartiality is revealed in her statement to the police when she told the police that she was married and living with a husband and was not related to Lawrence Ming. She explained in Court that she was indeed married though not to Lawrence Ming and though that marriage was not consummated. At the same time, she explained she was living with Lawrence Ming whom she regarded as her husband. This is disingenuous. A person may lie for innocent reasons. It may be embarrassing for her to disclose her relations with Lawrence Ming. She was certainly misleading the police when she told them that she was not related to the Ming's family. She objected to the release of her police statement to the Plaintiffs allegedly for fear that somebody might harm her and her daughter. This is both groundless and irrational. She was provocative when being cross-examined by Alex Ming which showed that she was not afraid. She was certainly insincere in her explanation which suggests she was selective and defensive in her evidence.

75. Like Lawrence Ming, she made the extraordinary claim that she had not discussed the alterations and the serious allegation of fraud with one another over the years. She was asked by the police to assist in their investigation. She said she was in bad terms with Lawrence Ming by then and though she informed Lawrence Ming about the police inquiry, he responded in a disinterested manner by telling her to "tell them the truth". She was interviewed by the police a second time in 1995 and a third time in 2000 expressly to assist in a forgery case. Yet she did not talk to Lawrence Ming because she thought it was pointless in view of his disinterested attitude on the last occasion. This is extraordinary. Despite that their relations had turned sour, they were still living under the same roof. The allegation is a serious one of fraud affecting Lawrence Ming's entitlement to the Additional Shares. It is a serious concern to Lawrence Ming and would affect her indirectly. Yet both of them wished to impress me that they had never discussed with one another when Ivy Wong was the very person who prepared the documents. They never discussed how and why the police could have brought the blame on either of them and they never sought explanation, sympathy or support from the other. This is incredible.

76. She did not tell the police about the alterations in her two police statements in 1995, despite she knew the police were investigating about a suspected case of fraud. There were numerous and unusually large number of alterations in the documents which would arouse suspicion. If she had an innocent explanation for the alterations, one would expect her to volunteer the explanation, if not to save the police time and effort in meaningless investigations, at least to clear herself of suspicion at the first available moment. She said she forgot about the alterations and attributed that to her fright and nervousness. In Court, she guarded herself by complaining that the police asked her leading questions.

77. What is important for Ivy Wong is to explain the delay of two months in typing the date on the August Minutes and preparing the share certificates so as to put that transaction ahead of the allotment of the 7,000 shares to the Father. She explained that she did not carry out Lawrence Ming's instructions immediately as she was busy. At that time, MHD had just moved from Alliance Building to Jade Centre and she had to take care of the filing system in Jade Centre, show clients to the show offices in Jade Centre and handle the documentation for Kyoto Plaza in occupation permit of which had just been issued. It was only on 8 October 1992 when Lawrence Ming gave her the September Minutes with specific instruction to date them 18 September 1992 and asked about the August Minutes that she proceeded with the work, but she was muddle-headed and put down the current date on the August Minutes and share certificates.

78. What had to be done was a very simple operation which involved inserting a date on the August Minutes and typing ten share certificates. All that would take no more than 20 minutes, inclusive of drafting and typing, for a competent secretary like herself. She explained that she treated the job very seriously as it was the first time she had to type on share certificates. Yet she allowed these very valuable documents to lie somewhere in her office for two months. That is incredible. It is also too much of a coincidence that Lawrence Ming did not follow up with these certificates which represented 58% of the Father's net worth and which he had been waiting for over 15 years.

79. It is inexplicable that an experienced secretary like herself would have simply typed a current date on the August Minutes and share certificates. The date was important. Typing a date on a document requires a conscious decision as to what date to type. It is not a subconscious decision or a conditioned action like tapping the space bar after keying in a full-stop. On her evidence, she just typed the current date without thinking. On her account, the minutes were given to her two months ago when she was reminded of the job. If Lawrence Ming had given her a date to put in the documents, she should have typed that in and not simply the current date. If she had forgotten the date, the natural thing she would have done was to ask Lawrence Ming instead of typing in the current date. Alternatively, if she were to put any date of her choice, she would have dated the minutes with a date earlier than 18 September 1992 which was the date Lawrence Ming instructed her to type on the September Minutes which she just received. The account that she gave in Court is also inconsistent with what she told the police in her first statement in that she typed the August Minutes on 8 August 1992. She attributed that mistake to "leading questions" from the police. But as the statement shows, that certainly was not true. I do not consider that an honest mistake. She had something to hide.

80. Ivy Wong does not impress me as a credible witness. She has a selective memory. She could not remember things which should be of importance to her personally, for example, when Lawrence Ming moved out of her home. She could not remember when she was given the August Minutes and how long she kept them before filling in the date and what date Lawrence Ming asked her to type into the minutes and share certificates. It is now eleven years since the events. She may be excused for not being able to remember the precise date now, but not then. However, she could not even give an approximate indication when the event took place. On the other hand, she was able to recall her unprompted description of how the Father tidied the documents in a pile before signing them. She obviously trimmed her evidence to match the expert's report so as to add strength to Lawrence Ming's case that the documents were genuine and signed by the Father on the same occasion with the result that impressions of indisputably genuine signatures on some of the documents were left on the other documents with questioned signatures below or via versa. I consider her an evasive and unreliable witness who was selective in what she wanted the Court to know. Her explanation for the delay is incredible. It is built on coincidence upon coincidence and has all the features of a recent concoction trimmed to meet the indisputable evidence.

Lawrence Ming's conduct and credibility

81. Lawrence Ming's conduct brings suspicion to himself. He tried extremely hard to avoid the questioned documents from being examined and distanced himself from the alterations. When the Plaintiffs challenged the validity of the Additional Shares and requested forensic examination, he resisted the request vigorously in High Court Action No. P16 of 1996. When his effort failed before Yam J, he engaged leading counsel and took the matter to the Court of Appeal which dismissed his appeal as being purely technical but without substance. Even when that failed, he continued to create difficulties in releasing the documents for the forensic examination and insisted on inspection at the office of his solicitors. He explained his conduct by saying that he was merely exercising his legal right upon advice of his leading counsel. Under cross-examination, he said he could not distinguish between a technical argument and a substantive argument and said that his solicitors had not told him that he only had a technical argument for appeal. I do not think he could be allowed to shrug off the actions of his lawyers as being of no consequence to himself. Lawyers act on instructions of their clients and their actions must perforce be imputed to their clients who bear responsibility for their action. I do not think he would have contested the application for no purpose except to advance a technical argument to satisfy leading counsel's interest in intellectual pursuit. If he had nothing to hide, it would have been sensible to settle the dispute by allowing the documents to be examined without the need of engaging himself in an uncertain legal battle costing several hundred thousand dollars merely for the purpose of advancing a technical argument.

82. He tried hard to distance both himself and Ivy Wong from the alterations. According to his own case, Ivy Wong was the only person responsible for preparing the documents and he did not know about the alterations until he was shown Dr Cheng's report by the police in October 1999. He was cautioned for the criminal offence of deception on that occasion. Instead of telling the police that Ivy Wong was the only person who could have made the alterations, that there was an innocent explanation for the alterations and Ivy Wong had nothing to gain by making the alterations, he chose to remain silent. He pretended that he did not know who made the alterations in his affirmation as well as in his witness statement made in this action. He deliberately kept her out of the scene. His explanation is that he had not contacted Ivy Wong by that time. But, according to Ivy Wong, he was still living with her in or about 2001, though in separate rooms. He had no difficulties in contacting her. It is incredible that in the circumstances he did not even ask her why she made the alterations as she was the only one responsible for getting him into trouble with the police. A further explanation he offered is that he thought the alterations were unimportant. He was cautioned by the police in respect of the alterations. It must be something that he should take seriously and seek legal advice. Had he done so, he must have been advised of the relevance and importance of Ivy Wong's evidence. His answer to that is that he thought the alterations were so unimportant that he did not even tell his lawyers about it. This is hardly credible.

83. However, eventually he sought leave to file Ivy Wong's witness statement in May 2003. His explanation for the delay is that he did not wish to drag her into a family dispute and that he wished to keep their relationship secret. They have a daughter and he has been maintaining her. It would be naive for him to believe that their relationship could be kept a secret. What is at stake in this litigation must outweigh the potential embarrassment to Ivy Wong and his daughter. In the circumstances, it flies against common sense that Lawrence Ming only chose to call Ivy Wong as a witness until such a late stage. I think there is no truth in his evidence that he thought the alterations were unimportant and that he had not informed his lawyers until recently that it was Ivy Wong who made the alterations. He deliberately kept her out of the scene. The circumstances strongly suggest that the two of them had something to hide and Ivy Wong's evidence is a recent concoction. I consider Lawrence Ming's explanation incredible.

Betty Wong's evidence

84. Lawrence Ming relied heavily on the evidence of Betty Wong as an independent witness. Betty Wong had been providing secretarial services to MHD and JFM Inc since 1989.

85. She received instructions from Lawrence Ming to prepare the two sets of minutes allotting 5,000 ordinary shares and 5,000 bearer shares to Lawrence Ming (these were subsequently dated 8 August 1992) in 1992 some weeks after MHD and JFM Inc moved to Jade Centre. Lawrence Ming told her at the time of his worry that the disclosure of his majority shareholdings might lead to a family dispute among his siblings. She also received instructions from Lawrence Ming to prepare the third set of minutes allotting 7,000 bearer shares to the Father. The dates on all the three sets of minutes were left blank. She could not remember which set of minutes was prepared first but she believed that she had received instructions to prepare the two sets which were subsequently dated 8 August 1992 first. The basis of her belief is that had the allotment of the 7,000 shares been approved first, the Father's majority shareholding would have been adversely affected by the allotment under the two sets of minutes allotting 10,000 shares to Lawrence Ming and it would have been necessary for her to prepare a consent to the allotment for the Father to sign.

86. I have no doubt about Betty Wong's honesty. She is an independent and disinterested witness. However, I have serious reservation as to the weight to be placed on her belief as to the order in which the instructions relating to the three sets of minutes were given. She said in her witness statement, which she also repeated in Court, that it was her company's practice to prepare the documents according to the time sequence of instructions received from her client and hence she believed she received instruction for the August Minutes prior to that for the September Minutes. In Court, she also added her knowledge that Lawrence Ming was the majority shareholder as another reason in support of her belief. This was not mentioned in her witness statement. Her belief was based on the dates she saw appearing on the minutes and then she took a mental backtrack to work out a reason to justify her belief. She preconceived. Had she known that the August Minutes were originally dated October, she would have worked out another reason to justify her belief that the instructions were given in the reverse order and would have advanced reason that the Father's consent was not necessary. I give no weight to her belief as to the order the instructions were given. In any event, her evidence was that she could not recall.

Conclusion - the alterations

87. In conclusion, I am not satisfied that Ivy Wong is a credible witness. Her explanation for the alterations is full of coincidences. I reject her explanation about the alterations to the date on the August Minutes and the alterations to the date and share certificate numbers on the ten share certificates in respect of the Additional Shares. The alterations, considered individually, does not raise any adverse inference. However, when taken together and in the proper context, they suggest that the purported allotment of the Additional Shares probably was made after the date of the September Minutes. Hence, Ivy Wong numbered the bearer share certificates "B008" to "B012". The alterations were necessary to obviate the need to have the Father's consent because of the effect the allotment of the Additional Shares would have on the Father's majority shareholding. These alterations are highly suspicious. There were a few other minor alterations which were left unexplained. They were not challenged by the Plaintiffs and I accept those alterations as innocent typographical errors.

THE FATHER'S SIGNATURES

88. The Plaintiffs challenge the authenticity of the Father's signatures on the two August Minutes and on the ten share certificates. Of the twelve questioned signatures, four of them belonged to the more complicated form. Both experts opined that they were genuine signatures by the Father. They gave reasons for their opinion. Having regard to the totality of the evidence, I accept their evidence and their expert opinion. These signatures were signed on two bearer certificates, numbered "BSS1" and "BSS2", and two ordinary share certificates, numbered "02 and 03".

89. The remaining eight signatures belonged to the simplified form. They appeared on the two August Minutes and the remaining six share certificates. The Plaintiffs' expert, Dr Cheng, was unable to form any view whether they were signed by the Father. He opined that the signatures "might have been" signed by the Father. The Defendants' expert, Mr Westwood, expressed a qualified positive opinion that there was a "distinct possibility" that they were signed by the Father. The two experts used a slightly different scale of opinion. Dr Cheng adopted a three level scale, "probable", "might have been" and "inconclusive". Mr Westwood adopted a four level scale, with Dr Cheng's "might have been" level sub-divided into "distinctly possible" and "possible". If Mr Westwood's four level scale is merged with Dr Cheng's three level scale, his opinion would be in line with Dr Cheng's, i.e. the signatures might have been signed by the Father. But he is slightly more positive than Dr Cheng. Thus the difference between the two experts is minimal. Both of them cannot say with certainty that the signatures were probably that of the Father's. Dr Cheng thought they "might have been" the Father's and Mr Westwood was slightly more positive and thought they "might well have been" signed by the Father.

90. The experts also agreed that indentations of the signatures on some of the documents were found on the other documents. Mr Wong, SC, submitted that the presence of indentations create a nexus between the documents which gives rise to the reasonable inference that they were executed on one occasion. Further, with the genuine signatures on "02", "03" and the September Minutes as the nexus between the documents, Mr Wong, SC, invited me to draw the inference that all these twelve documents were indeed signed by the Father on one and the same occasion. With respect, this is not the only inference that could be drawn. Though it must be conclusive that the documents bearing the indentations of the signature of another document must be placed beneath that other document when that other document was signed, that does not mean the two documents must have been signed on the same occasion.

91. Indeed, a different and interesting inference could also be drawn from the indentations. The indentations on the minutes show that the August Minutes allotting 5,000 bearer shares to Lawrence Ming was signed on top of the September Minutes allotting 7,000 bearer shares to the Father and that the September Minutes was signed on top of the other August Minutes allotting 5,000 ordinary shares to Lawrence Ming. These indentations are inconsistent with and even discredit Ivy Wong's evidence. Ivy Wong would not have placed the three minutes in that illogical order with the September Minutes between the two August Minutes for the Father to sign. A possible, though not necessarily irresistible, inference is that someone or Ivy Wong had re-arranged the minutes and placed them in that illogical order for the Father to sign as one set of minutes. An explanation based on coincidence upon coincidence is required to give an innocent explanation to these indentations. I say no more than that this adds doubts to the already incredible evidence of Ivy Wong on how the Father came to sign the August Minutes and the ten share certificates. I reject Ivy Wong's evidence. The Father was of old age and could not read English. One may surmise that these minutes and seven of the share certificates were given to the Father by someone whom he trusted to sign in one lot as if they were one set of minutes allotting the 7,000 bearer shares to the Father. I am not drawing such an inference and for the purpose of this judgment there is no need for me to.

92. The indentations also show that "BSS3" was signed whilst on top of "BSS4". "BSS4" was signed whilst on top of "BSS5". "BSS5" was signed on top of "02" which has a genuine signature. "02" was signed on top of "03" which also has a genuine signature and on top of "04", but no indentations of "03" were found on "04" or vice versa. "04" and "01" were signed on top of "05", but there was no indentations of "04" on "01" or vice versa. "BSS1" and "BSS2" left no indentation on any other document. It is not possible to draw any irresistible inference from these indentations. Having rejected Ivy Wong's evidence about the Father signing on the August Minutes and the September Minutes, I must also reject her evidence that she saw the Father signing on the ten share certificates.

93. The remaining signatures belonged to the simplified form. Many of the control signatures, the authenticity of which were not in dispute, considered by the two experts were also in the simplified form. The experts identified various characteristics and advanced certain theories. But they cannot come to a concluded view one way or the other. The Father was eighty-three years of age at the time the signatures were allegedly signed by him. He was then suffering from a brain tumour. In view of the condition of the Father, I cannot expect any degree of consistency in his signatures, especially if he had to sign a number of signatures at one go. It is not unlikely that his signatures would deteriorate from the complicated form to the various types of simplified forms as he proceeded. This supposition would be the most favourable to Lawrence Ming. On this view, if all the twelve signatures or any number of them were done on one occasion, the Father would have signed the four share certificates, "BSS1", "BSS2", "02" and "03" (but not necessarily in that order) before the other share certificates and the August Minutes, if in fact he did sign them.

94. I think this is the furthest I can go on the basis of the evidence of the two experts and Ivy Wong and the real evidence, i.e., the share certificates, the August Minutes. According to the defence case, Ivy Wong was the only witness who saw the Father signing the twelve signatures. As I have rejected Ivy Wong's evidence as to how the Father came to sign the other documents, I can only conclude as did the two experts that the Father's signatures in the complicated form on the four share certificates I referred to above were genuine and cannot come to a conclusion one way or the other in respect of the eight questioned signatures in the simplified form. Thus, as the evidence stands, Lawrence Ming has failed to discharge the burden of proving authenticity of the August Minutes and the ten share certificates.

95. However, when coupled with my rejection of Lawrence Ming's evidence as to his agreement with the Father about the allotment of the Additional Shares, which I shall explain in the later part of this judgment, I can only come to a negative conclusion that of the remaining eight signatures in the simplified form, at the highest, five of them were the Father's and three of them were forgeries. I cannot say which is which and it is impossible and unnecessary for me to go any further.

LAWRENCE MING'S CASE ABOUT ALLOTMENT OF THE ADDITIONAL SHARES

96. Lawrence Ming's case is that he was the Father's business partner and it was the Father's wish to reward him by the shares which he deserved in view of his contribution to the business. The Father promised to give him 10,000 shares in JFM Inc representing half of the total shares of the company. The Father had worries as to the best way to proceed because of the "thorn" left over from the 1977 incident. The Father wished to leave something for his children and also wished the family business and family name to continue. In August 1992, Lawrence Ming had a discussion with the Father. He suggested, on the basis that the total net worth of JFM Inc was about $280 million, of which he was entitled to half as the Father's business partner and to be represented by 10,000 shares which the Father had promised him, that the value per share would be $14,000. Because the Father had withdrawn $14 million in 1988 to give each child $2 million and would withdraw another $35 million in October 1992 to give each child $5 million for attending the dinner on 10 October 1992, he suggested to deduct $49 million from the Father's share in JFM Inc. After deducting $49 million the Father's interest in JFM Inc would be reduced to $91 million, which would be equivalent to 6,500 shares at $14,000 per share. As the Father had wanted to have 7,000 shares to distribute to his children, Lawrence Ming agreed that the Father should be allotted 7,000 shares. Hence, he reached agreement with the Father to allot 10,000 shares to himself and 7,000 shares to the Father.

Credibility of the scheme of allotment of the Additional Shares

97. Mr Wong, SC, submitted that Lawrence Ming's account as to how the allotment was agreed is highly credible as being supported by historical data, while Mr Grossman, SC argued that it was incredible as this account was full of approximation and had never been disclosed in any of Lawrence Ming's affirmations and witness statements throughout the years. I tend to agree with Mr Grossman SC's view. The issue of these Additional Shares is central to the dispute between Lawrence Ming and the Plaintiffs in this as well as in the other proceedings. As indicated by his readiness to launch frivolous appeals, he is a man who would not spare any money on his lawyers. It is most surprising that this mathematical basis was never disclosed in any of his witness statements and no attempt has been made for filing of a supplemental witness statement to explain the basis of the allotment of the Additional Shares. In my view, his account bears the hallmark of a recent concoction.

98. Lawrence Ming's account implies that back in August 1992, the Father had in mind writing the Chinese Memorandum and to pay each child $5 million for attending the dinner two months later and Lawrence Ming had prior knowledge of the Father's intention. On his evidence, how the shares in JFM Inc were to be distributed was agreed on the same occasion. His knowledge of the Father's intention was not mentioned in his witness statement. This may be a minor point. But his account does not sit well with why the resolution to allot the 7,000 shares to the Father was not passed on the same occasion as the allotment of the 10,000 shares to himself. His evidence does not explain why it was necessary to pass three separate resolutions on two different dates to give effect to the agreement reached on same occasion.

Non disclosure of the Additional Shares before the Father's death

99. It is common ground that the siblings had a meeting at the coffee shop of the Century Hotel when they returned to Hong Kong. According to Ronald Ming, Lawrence Ming showed them a copy of the Chinese Memorandum and told them that the Father had brain cancer and his condition was deteriorating. Lawrence Ming denied showing them the Chinese Memorandum or mentioning anything about the cancer. If Lawrence Ming had not shown the Chinese Memorandum to his siblings, I doubt Ronald Ming could have made up such a fine point for counsel to build on. Though I consider Ronald Ming's credibility destroyed in relation to his dismissal from MHT(UK) in 1976 and the 1977 incident, I have no doubt about his evidence about this meeting. Given the unfavourable view I formed of Lawrence Ming's credibility, I accept Ronald Ming's evidence about what happened during this meeting.

100. On a fair reading of the Chinese Memorandum, each sibling would expect to have 14% of the shares in JFM Inc. According to Lawrence Ming, he had 58% before the Father's death or would have 65% after. He must have realised that it was in his own interest to inform his siblings about the Additional Shares as soon as possible and in any event before his Father's death so that his siblings could verify that directly with the Father and nib any possible quarrel in the bud. He knew of the Father's failing health. He must realise that if he did not disclose his Additional Shares before his Father's death, there would be no one to support him and his Father was the only person who possessed the authority to deal with such dispute.

101. To protect himself, one would expect he should disclose the Additional Shares himself or persuade the Father to do so. He had sight of the Chinese Memorandum before the Father called for the meeting. He ought to know that the Chinese Memorandum was misleading if indeed he had been issued the Additional Shares. He ought to have asked the Father to state in the Chinese Memorandum that he too was the holder of 10,000 shares to put everything beyond dispute. Alternatively, he could have asked his Father to execute a document to be witnessed by solicitors to confirm the issue of the Additional Shares to him than to rely on the August Minutes of a meeting attended by himself and the Father. Lawrence Ming's evidence is that he had expressed his worry to his Father and was comforted by the Father telling him not to worry and that the Father had a subtle way to tell the children. On the other hand, it is also his evidence that he was so worried that he told Betty Wong, a complete outsider. Mr Wong, SC, submitted that the Father might not wish to disclose the allotment of the Additional Shares to Lawrence Ming because it would not be to the Father's interest to arouse any unhappy feeling between the siblings otherwise the Father could not have enjoyed a happy reunion with his children. With respect, I think that is unrealistic. The Father gave each child $5 million for attending the dinner and to listen to the Chinese Memorandum being read out openly. The Father's execution of the Chinese Memorandum was witnessed by staff of a respectable solicitors firm. It expressed in unequivocal terms the Father's intention of equal distribution of his estate. Under the circumstances, the children, except Lawrence Ming, were led to the expectation that each of them would have one-seventh share in the Father's estate. If the Father had in mind the secret allotment of 10,000 shares in JFM Inc to Lawrence Ming, it would be a cruel lie to the other six children. The Father must have also realised that unless he disclosed the allotment of the 10,000 shares, the Chinese Memorandum would only invite litigation and create bitterness among his six children towards Lawrence Ming. It is inherently improbable that the Father would have told such a cruel lie to his children in return for the comfort of a reunion dinner with all the consequences of long, bitter and costly litigation.

Late disclosure of the Additional Shares after the Father's death

102. After the Father's death, Ronald Ming chased for his shares in February or March 1993. He asked Lawrence Ming if there were other shares issued apart from the 7,000 bearer shares. Lawrence Ming said no. This is denied by Lawrence Ming. For similar reasons, I prefer Ronald Ming's evidence as the probability is that Ronald Ming would have sought to reassure himself as to the extent of his equity in JFM Inc.

103. Lawrence Ming gave each sibling $5 million in March 1993 and another $1 million in January 1994. His evidence is that the siblings kept on demanding him for money every time they met. Such substantial amount of cash drawing must adversely affect the cash flow of JFM Inc. This does not tally with his case that he was indeed the 65% majority shareholder of the company. For each $1 million drawn by each of his sibling, Lawrence Ming would be entitled to draw $11 million, if indeed he had held the Additional Shares. Thus for the $6 million drawn by each of his sibling, he would have been entitled to draw $66 million and not $6 million. There is no reason why he did not do so and allow his interest in the company to be prejudiced by the disproportionate drawing by his siblings. It is surprising, if indeed he was the majority shareholder, why he did not put an end to those demands by disclosing his Additional Shares.

104. The seven siblings attended a shareholders meeting on 30 April 1993 during which it was decided to liquidate JFM Inc. Lawrence Ming signed his name on the notes of the meeting kept by Alex Ming. Lawrence Ming said the meeting was forced upon him and he signed the notes under tremendous pressure. What Lawrence Ming said is wholly incredible. Firstly, the telephone message received by Alex Ming from Ivy Wong suggests that it was Lawrence Ming who called for the meeting. Secondly, what Lawrence Ming said in evidence is also contrary to what he said in his statement that he did not mind at the time if JFM Inc was wound up. Again, there is no reason why Lawrence Ming did not exercise his majority vote with the Additional Shares to vote down the resolution to liquidate the company. He explained that he was concerned that if the Additional Shares were disclosed, there would be dispute and litigation which may force JFM Inc into a forced liquidation and forced sale of the company's assets. This is groundless as the company had substantial assets and the present litigation has not led to any application by any third party to wind up the company. Without disclosing the Additional Shares, he was in effect inducing the siblings to go forward with winding up petition.

105. At the end of May 1993, there was another meeting in which Lawrence Ming's then girlfriend, Stella Fung, suggested it was a pity to liquidate JFM Inc and asked the siblings to give Lawrence Ming a chance. Lawrence Ming promised to hold shareholders meetings and produce business plans to his siblings. The action to liquidate the company was then postponed. Again, if Lawrence Ming had the Additional Shares, there was no reason why he did not produce the Additional Shares to vote down the resolution to liquidate the group of companies but instead subject himself to the mercy of his siblings.

106. Then came the last meeting on 28 January 1994 when Lawrence Ming announced his appointment of Kenneth Ming as a director of MHD and gave the siblings each $1 million. The unanswered and unanswerable questions are why did he not give $11 million to himself, why should he prejudice his majority interest in the company in that manner and why did he not choose to disclose the Additional Shares to put an end to the siblings' demand for money and liquidation.

107. According to Lawrence Ming's supplemental witness statement, he disclosed the Additional Shares to Kenneth Ming when he decided to appoint him as a director of MHD. Whatever is the worth of that disclosure, Lawrence Ming knew it could not be verified as Kenneth Ming died well before Lawrence Ming gave the supplemental statement. According to his own case, that disclosure was against the wish of the Father. Lawrence Ming was quite unable to explain why disclosure of his majority shareholding in JFM Inc was necessary to Kenneth Ming as a director of MHD. Had he indeed told Kenneth Ming, one wonders what would have been Kenneth Ming's reaction to learn that his shareholding in this very substantial company was reduced from 14.28% which he expected to just 5.88%.

108. Mr Wong, SC, asked the rhetoric question why it was that Lawrence Ming disclosed the shares so late if it was in his interest to disclose it immediately after the Father died. Mr Grossman, SC, answered that well to the point that it was not for us to speculate but it may well be that relying on forged documents as he was, Lawrence Ming did not want to do so until he was forced to by the resolution to remove him. Probably, up till then, Lawrence Ming had not quite finalised his fraudulent design as indicated by his latest explanation in Court about the mathematic basis of the allotment of the Additional Shares.

109. In my view, Lawrence Ming's late disclosure of the Additional Shares is inexplicable. The Additional Shares are so inconsistent with the intention of the Father as expressed in the Chinese Memorandum and that his late disclosure adds fuel to the fire of suspicion and invites adverse inference to be drawn. That he agreed to the liquidation is further evidence that he did not know what to do in the face of the siblings' demand because he was, like any of them, a one-seventh shareholder of JFM Inc. Then he sought the assistance of his then girlfriend to negotiate a stay of the liquidation. It may well be that he thought it would not be to his Father's interest to arouse any unhappy feeling between the siblings and the Father. But that consideration disappeared once the Father died. It was not until more than a year after the Father's death, that the Additional Shares were disclosed. The inference that could be drawn from his failure to disclose the Additional Shares and his conduct in relation to the alterations I referred to earlier is that the Additional Shares have never been allotted to him.

Conclusion - allotment of the Additional Shares

110. I reject the evidence of Lawrence Ming. I am not satisfied that the Father had agreed to allot him 10,000 shares in JFM Inc and I am not satisfied that the resolutions as recorded in the August Minutes had in fact been passed.

FINDING

111. Before proceeding to my final conclusion, I shall first conduct a stock taking exercise of the available evidence.

112. I have rejected the evidence of Lawrence Ming and Ivy Wong. I reject in particular Lawrence Ming's evidence that the Father agreed to allot him 10,000 shares in JFM Inc and reject Ivy Wong's evidence that she had explained the contents of the two August Minutes to the Father and that the Father signed the August Minutes and ten share certificates in her presence. I give no weight to the evidence of Betty Wong. These are negative findings. They do not prove anything but exclude certain possibilities.

113. I am left with the unequivocal intention of the Father of equal distribution of his estate as expressed in the Chinese Memorandum, the Father's genuine signatures on two ordinary share certificates in the name of Lawrence Ming and two bearer share certificates and the September Minutes allotting 7,000 shares in JFM Inc to the Father. I find that the Father's signature on these documents were genuine.

114. In addition, I am left with the August Minutes and the remaining six share certificates. Though these documents might have been signed or might well have been signed by the Father, I am not satisfied that they all were because the Father could not have allotted the 10,000 Additional Shares in view of his intention of equal distribution of his estate as expressed in the Chinese Memorandum and my rejection of Lawrence Ming's evidence.

The August Minutes

115. In the circumstances, it is incredible that the Father would have signed the August Minutes on 8 August 1992, a month and half before he signed the Chinese Memorandum. It is even more incredible that he would have signed the August Minutes on 8 October 1992 as originally dated on the document, just two days before he had the Chinese Memorandum read out at the dinner. Thus, the inferences are that the Father's purported signatures on the August Minutes were either not genuine or if they were, the minutes could not have been signed with the Father's consent and knowledge of the contents. The further inference is that there never was any resolution passed allotting the Additional Shares to Lawrence Ming. The two August Minutes are forgeries, whether the Father's signatures were genuine or not. There never was any meeting of JFM Inc in August or October 1992 to pass the resolutions recorded in the two August Minutes.

The share certificates in respect of the Additional Shares

116. As for the ten share certificates in respect of the Additional Shares, I have found that four of the signatures on two bearer share certificates and two ordinary share certificates in the name of Lawrence Ming were signed by the Father. The Father had expressed his intention to divide his shares in JFM Inc in the form of bearer shares into seven equal lots for distribution to each of his children. As I have rejected Ivy Wong's evidence about the Father signing the August Minutes and the share certificates for the Additional Shares and as I have rejected Lawrence Ming's evidence about the allotment of the 10,000 Additional Shares to himself and found that there never was any resolution passed allotting the Additional Shares, the Father would not have knowingly created any ordinary shares by signing the two ordinary share certificates, "02" and "03" and would not have given Lawrence Ming these 4,000 shares without giving each of his other six children the like amount of shares. The Father was a man of eighty-three when he signed the share certificates. He had in mind giving to each of his children an equal one-seventh share in JFM Inc by way of bearer shares. He was not in good health then and he died two months afterwards. I draw as the only reasonable inference that when he signed his name on these four share certificates he thought he was signing four of the seven lots of bearer shares in JFM Inc for distribution to his children and had no knowledge that two of them were ordinary share certificates in the name of Lawrence Ming. The shares represented by these shares certificates were accordingly invalid despite the genuine signature of the Father.

117. I cannot come to a concluded view, one way or the other as regards the authenticity of the Father's signatures on the remaining six share certificates. As the Father had in mind creating seven equal lots of bearer shares in JFM Inc and as he had signed four share certificates, I draw as the only reasonable inference that at the highest, three of the purported signatures of the Father in these six certificates were genuine and the other three were forgeries. I cannot say which is which. Irrespective of whether the purported signatures of the Father were genuine or not, the shares represented by these six share certificates are not valid as no resolution has been passed approving their issue. I am able to make to the above finding of fact and reach a conclusion on the invalidity of the Additional Shares without resort to Lawrence Ming's or the Defendants' failure in discharging the burden of proof.

Conjecture

118. This is a case of fraud. Lawrence Ming presented the August Minutes and the ten share certificates as having been signed by the Father, when in fact some of them were not. I am satisfied that a fraud has been practised on the Father who was induced to sign some of the share certificates and perhaps the August Minutes as well. Three of the purported signatures of the Father on three of the certificates or the August Minutes could be forgeries. This is a civil case. As Litton JA, as he then was, held in Club Deluxe Ltd v Club Metropolitan Ltd and Others, [1995] 2 HKLR 69 that the Plaintiffs only need to show a forgery and there is no need for them to prove how the forgery have taken place. Litton JA said at 84:

"The logical sequel to this finding must be, of course, that the signature on Ex C244 was forged. But by whom, where, under what circumstances: these are matters of speculation and call for no answer in this litigation. The forgery must have taken place before 1st October 1990 when the plaintiff's solicitors made reference to it in their letter of that date for the first time. That is all. By this finding no accusation is levelled at any one. This is simply the consequence of civil litigation conducted under rules in our system of law."

CONCLUSION

119. For the above reasons, I find that the 5,000 shares bearing share certificate numbers "BSS1" to "BSS5" and 5,000 shares bearing share certificate numbers "01" to "05" issued to the 1st Defendant are void and of no effect. It must necessarily follow that the resolution passed on 21 February 1994 to remove the 1st Defendant as a director of the 2nd Defendant is valid and effective. Accordingly, I grant the Plaintiffs the declaration that these shares are void and of no effect and an injunction that 1st Defendant be restrained from continuing to act as director of the 2nd Defendant.

120. What Lawrence Ming did involved a fraudulent breach of trust. It would be appropriate that he should be ordered to pay costs to the Plaintiffs on a full indemnity basis. I consider the 2nd to 4th Defendants as notional defendants and make no costs order against them. Accordingly, I make a costs order nisi to the above effect.