TIN WAN TUNG v. WONG SEE YIN AND OTHERS

[2018] HKCFI 1143

HCA 167/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 167 OF 2011

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AND

HCA 1801/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1801 OF 2010

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J U D G M E N T

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A. INTRODUCTION

1.  At the trial, Mr Michael Liu appeared for Mr Tin Wan Tung (田運棟) (“Tin”), the plaintiff in HCA 167/2011.  Mr Jeremy Cheung appeared for Full Pacific Development Limited (富廣發展有限公司) (“Full Pacific”), the plaintiff in HCA 1801/2010.  The 1^st defendant in both actions, Mr Wong See Yin (黃斯彥) (“Wong”) appeared in person.  The Provisional and Joint Liquidators of Matrix Wealth Limited (宏策有限公司) (“Matrix Wealth”), the 2^nd defendant in both actions, and the Official Receiver on behalf of Fully Fortune (Asia) Limited (富豐(亞洲)有限公司) (“Fully Fortune”), the 3^rd defendant in both actions, confirmed that they would not participate in nor defend these proceedings.

B.  THE PARTIES AND OTHER RELEVANT PERSONS/ENTITIES

2.  The following persons and companies have featured prominently during the course of the trial: –

(1)  Natural Persons

(a)  Chan Chuen Keung Donovan (陳傳強) (“Chan”)

(i) A friend, neighbour and business associate of Tin and Pong Park Kaw (龐佰球) (“Pong”).

(ii) Owner of an apartment in Kwun Tong Mansion known as Flat 24, 10^th Floor, Kwun Tong Mansion, 36 Yuet Wah Street, Kwun Tong (“Chan’s Property”).

(iii) A witness in the trial for the plaintiffs. 

(b)  Cheng Yuk (鄭旭) (“Cheng”)

(i) An accountant and a friend of Wong.

(ii) A witness in the trial for Wong. 

(c)  Pong

(i) The occupier of the property known as Flat 17, 4^th Floor, Kwun Tong Mansion, 36 Yuet Wah Street, Kwun Tong (“Pong’s Property”) which was registered in the name of the family company, namely, Full Pacific.

(ii) A friend, neighbour and business associate of Tin and Chan.

(iii) A witness in the trial for Full Pacific.

(d)  Pong Wing Shan (龐穎珊) (“Wing Shan”)

(i) Daughter of Pong.

(ii) One of the occupiers of Pong’s Property.

(iii) A shareholder and director of Full Pacific.

(iv) A witness in the trial for Full Pacific.

(e)  So May Kin (蘇美堅) (“So”)

(i) Wife of Pong.

(ii) One of the occupiers of Pong’s Property.

(iii) A shareholder and director of Full Pacific.

(iv) A witness in the trial for Full Pacific.

(f)  Tin

(i) A friend, neighbour and business associate of Pong and Chan.

(ii) The registered owner and one of the occupiers of the property known as Flat 27, 10^th Floor, Kwun Tong Mansion, 36 Yuet Wah Street, Kwun Tong (“Tin’s Property”).

(iii) The plaintiff in HCA167/2011.

(iv) A witness in the trial for himself as the plaintiff.

(g)  Tsang Chiu Wing (曾昭嶸) (“Tsang”)

(i) A solicitors’ clerk at the material time in early to mid-2008 in the employ of Messrs Damien Shea & Co.

(ii) The person handling the conveyancing transaction of the Tin’s Property and Pong’s Property in March 2008.

(iii) A witness in the trial for Wong and the other 2 company defendants of Wong. 

(h)  WONG Hoi Yin (黃海燕) (“Hoi Yin”)

(i) Purported to be an employee of Wong’s companies.

(ii) Made witness statements in the trial for Wong and the other 2 company defendants of Wong.

(i)  Wong

(i) 1^st defendant in both HCA 167/2011 and HCA 1801/2010.

(ii) A CPA and a member of the Hong Kong Institute of Certified Public Accountants;

(iii) A director, shareholder and the person in control of Matrix Wealth, Fully Fortune and Mega City Limited (達成有限公司) (“Mega City”).

(iv) A witness in the trial for himself as the 1^st defendant in both actions.

(j)  Wu Sing Yen (胡承欣) (“Wu”)

(i) Purported to be an employee of Wong’s companies.

(ii) A witness in the trial for Wong.

(2)  Companies

(a)  E-Pacific Technologies Limited (恒駿科技有限公司) (“E-Pacific”)

(i) Company owned by Tin, Pong, Chan and other persons for their construction business purposes.

(b)  Full Pacific

(i) The plaintiff in HCA 1801/2010 against Wong, Matrix Wealth and Fully Fortune. 

(ii) Company of the Pong’s family with So and Wing Shan as its shareholders and directors.

(iii) It was the registered owner of the Pong’s Property before the same was transferred to Fully Fortune on 17 March 2008.

(c)  Fully Fortune

(i) The 3^rd defendant in both actions.

(ii) Fully Fortune is and was at all material times a company controlled by Wong, who is also a shareholder and director of the company.

(iii) Purchaser in the conveyancing transaction of Tin’s Property and Pong’s Property which took place on 17 March 2008.  It is currently the registered owner of Tin’s Property and Pong’s Property since these two properties were transferred to it on 17 March 2008.

(iv) It was the mortgagor of Tin’s Property and Pong’s Property in the HSBC Mortgage on 13 June 2008 and the Wing Lung Bank Mortgage on 9 November 2009.  It is also the mortgagor in the current mortgage of the two properties to Dah Sing Bank on 2 August 2010.

(v) Fully Fortune is now being wound up pursuant to the Order made by DHCJ To on 11 August 2017 upon Tin’s petition in HCCW 250/2016.

(d)  Matrix Wealth

(i) The 3^rd defendant in both actions.

(ii) Matrix Wealth is and was at all material times a company controlled by Wong, who is also a shareholder and director of the company.

(iii) Confirmor in the conveyancing transaction of Tin’s Property and Pong’s Property which took place on 17 March 2008.

(iv) Matrix Wealth is now being wound up pursuant to the Order made by DHCJ To on 11 August 2017 upon Tin’s petition in HCCW 251/2016.

(e)  Mega City

(i) Mega City is and was at all material times a company controlled by Wong, who is also a shareholder and director of the company.

(ii) On 20 August 2009, Wong carried out a shares swapping exercise by transferring 16 shares in Matrix Wealth registered the name of Tin (representing an 8% shareholding in Matrix Wealth) into Wong’s own name and at the same time transferring 80 shares in Mega City registered under the name of Wong (representing an 8% shareholding in Mega City) into Tin’s name.

(3)  Mortgagee Banks

(a)  Dah Sing Bank Limited (“Dah Sing Bank”)

(i) Mortgagee bank in the Dah Sing Bank Mortgage taken out by Fully Fortune as the mortgagor on 2 August 2010 in respect of Tin’s Property and Pong’s Property.

(b)  The Hongkong and Shanghai Banking Corporation Limited (“HSBC”)

(i) Mortgagee bank in the HSBC Mortgage taken out by Fully Fortune as the mortgagor on 13 June 2008 in respect of Tin’s Property and Pong’s Property.

(c)  Wing Lung Bank Limited (“Wing Lung Bank”)

(i) Mortgagee bank in the Wing Lung Bank Mortgage taken out by Fully Fortune as the mortgagor on 9 November 2009 in respect of Tin’s Property and Pong’s Property.

C.     SUMMARY OF THE PLAINTIFFS’ CASE

3.  Tin is and was the occupier and owner of Tin’s Property, which was at all material times free of any mortgage loan encumbrances.

4.  Tin’s friend, Pong, is and was the occupier of Pong’s Property.  Pong’s Property was at all material times registered in the name of Full Pacific, which is a company owned and controlled by So (Pong’s wife) and Wing Shan (Pong’s daughter).  Pong’s Property was at all material times free of any mortgage loan encumbrances.

5.  Wong is a Certified Public Accountant.  He is also a director, shareholder and the person in control of Matrix Wealth and Fully Fortune, which appear to be Wong’s shelf companies and are not entities of substance.

6.  Tin came to know Wong in or about 2003 and had sought professional advice from Wong on several occasions in relation to the financing of certain construction projects of Tin and Pong in Mainland China.

7.  As a result of certain false representations made to Tin and Pong by Wong fraudulently or recklessly or negligently on 3 occasions during the period between the end of December 2007 and 24 January 2008 (namely, (i) end of December 2007, (ii) on or about 9 January 2008, and (iii) on or about 24 January 2008), Tin transferred Tin’s Property and Pong also caused Full Pacific to transfer Pong’s Property to Matrix Wealth and/or Fully Fortune in around mid-March 2008 in accordance with the arrangements made and instructions given by Wong.

8.  Representations made by Wong to Tin and Pong include: –

(1)  Wong would set up an asset management company with net asset value of HK$10 million;

(2)  Tin, Pong, and Chan (who is a friend of Tin and Pong and is also the registered owner of Chan’s Property) could invest in the said asset management company;

(3)  Such asset management company would be publicly listed on the Singapore Stock Exchange within about a year’s time;

(4)  After its public listing, such asset management company could help Tin, Pong and Chan to raise monies for financing their construction projects in Mainland China and/or Hong Kong;

(5)  Tin could invest in the asset management company in the following way if he did not have sufficient money: –

(a) Tin could inject Tin’s Property into the asset management company at a nominal value of HK$800,000.00;

(b) in return, Tin would be allotted 8% shareholding in the asset management company;

(c) Tin and his family could continue to reside in Tin’s Property without rent and would only be required to pay management fees, rates and government rent and maintenance fee in respect of Tin’s Property;

(6)  By injecting Tin’s Property into the asset management company, it would

(a) facilitate the asset management company to raise money from banks for financing their construction projects;

(b) facilitate the asset management company to be publicly listed on the Singapore Stock Exchange;

(7)  Pong and Chan could also invest in the asset management company in the same way as described above.

9.  Tin did not receive any purchase price for the transfer of Tin’s Property, though it was stated in the relevant document that Tin sold Tin’s Property to Matrix Wealth for HK$800,000.00 and that Matrix Wealth sub-sold Tin’s Property to Fully Fortune for HK$990,000.00.  Neither did Pong or Full Pacific receive any purchase price for the transfer of Pong’s Property to Matrix Wealth and/or Fully Fortune.

10.  All the parties involved in the transfer of Tin’s Property and Pong’s Property were represented by the same firm of solicitors, namely Messrs Damien Shea & Co (“DSC”), as arranged by Wong.

11.  Unbeknown to Tin and Pong at the material time, even before the 2 properties were transferred to Fully Fortune on 17 March 2008, Wong acting on behalf of Fully Fortune had already arranged with HSBC to borrow a mortgage loan in the sum of HK$1,600,000.00 and to set up overdraft facilities for HK$800,000.00 by using Tin’s Property and Pong’s Property as security as early as on 12 February 2008.  A mortgage deed for the HSBC mortgage were subsequently signed on 13 June 2008.  Later, Wong also arranged Fully Fortune to borrow mortgage loans from the Wing Lung Bank on or about 9 November 2009, and Dah Sing Bank on or about 2 August 2010, by using Tin’s Property and Pong’s Property as security whilst Tin and his family and Pong and his family continue to reside respectively in Tin’s Property and Pong’s Property until now.

12.  No asset management company has been set up by Wong up to now, though unbeknown to Tin and Pong, Wong had purportedly transferred from his own name and into the name of Tin 16 shares in Matrix Wealth, which is equivalent to an 8% shareholding of Matrix Wealth, on or about 15 July 2008.  Also unbeknown to Tin at the material time, on or about 20 August 2009, Wong swapped the 8% shareholding in Matrix Wealth registered under the name of Tin for an 8% shareholding in Mega City which is and was under the control of Wong.

13.  In September 2008, each of Tin and Pong signed or caused to be signed a tenancy agreement in respect of each of Tin’s Property and Pong’s Property under pressure from Wong on the pretext that such tenancy agreements were for complying with accounting requirements and in order to make it easier for Wong and his companies to obtain finance for the construction projects of Tin and Pong.

14.  In early December 2008, Fully Fortune claimed to be the owner of Tin’s Property and Pong’s Property and demanded Tin to pay certain alleged outstanding management fees and rent for Tin’s Property for the months of November and December 2008.  Similar demand letters were sent again in April 2009 but were ignored by Tin because such demands were inconsistent with the right of Tin to occupy Tin’s Property rent free.

15.  It is Tin’s and Pong’s case that the transfer of Tin’s Property and Pong’s Property were procured by fraud and/or misrepresentation on the part of the defendants (namely, Wong, Matrix Wealth and Fully Fortune) and that the consideration for the transfer of Tin’s Property and Pong’s Property have wholly failed.  Further or alternatively, Wong and his two companies have been unjustly enriched by the transfer of Tin’s Property and Pong’s Property.  Hence, Tin is entitled to have Tin’s Property transferred back to him, and Full Pacific is entitled to have Pong’s Property transferred back to it free from any encumbrances and at the costs of the defendants.  Tin and Full Pacific also claim against the defendants for the loss and damage suffered by them.

16.  It can be seen from the Statement of Claim filed in the 2 actions that Tin and Full Pacific rely on the following causes of action in their claims against Wong, Matrix Wealth and Fully Fortune: –

(1)  Misrepresentation

(a) Fraudulent misrepresentation;

(b) Reckless misrepresentation; and/or

(c) Negligent misrepresentation.

(2)  Total failure of consideration.

(3)  Unjust enrichment.

D.  THE ISSUES

17.  At the trial, the major issues to be tried between Tin and Full Pacific on the one hand and the defendants on the other include: –

(1)  What was the relationship between Tin/Pong and Wong during the period of 2007/2008?

(2)  What representations were made by Wong to Tin/Pong?

(3)  Did Tin/Pong make any representations to Wong as alleged by the latter?

(4)  Were the representations made by Wong to Tin/Pong true?

(5)  If the representations made by Wong were false, did he make such representations fraudulently, recklessly or negligently?

(6)  What were the circumstances under which the various “home-made” documents were signed?

(7)  What were the circumstances under which the legal documents prepared by DSC were signed in March 2008?  When were these documents signed?

(8)  Did the defendants or any of them obtain any mortgage loan by using Tin’s Property and Pong’s Property as security from HSBC, Wing Lung Bank, or Dah Sing Bank?

(9)  What were the circumstances under which the tenancy agreements in respect of Tin’s Property and Pong’s Property were signed in September 2008?

(10)  Is Tin entitled to have Tin’s Property back as its owner, and is Full Pacific entitled to have Pong’s Property back as its owner?

(11)  Are Tin and Full Pacific entitled to any damages?

(12)  What were the loss and damage suffered by Tin and Full Pacific?

(13)  Are the defendants or any of them entitled to any of the remedies as contained in the counterclaim?

E.  GENERAL OBSERVATIONS OF THE WITNESSES

E.1    Plaintiffs’ witnesses

Tin

18.  Tin is a dreamer, as accepted by Wong.  As such, everything surrounds the dream of listing an “asset management company” on the Singapore Stock Exchange (“SGX”) with net asset value of HK$10 million (“AMC”).  All the other minor details were irrelevant to Tin.

19.  There were facts that Tin does not remember well due to the lapse of time.  However, I agree that Tin did give a truthful account as to what he remembers, and his evidence as a whole should be accepted.

20.  Wong attacked Tin for ‘lying’ to the Social Welfare Department about his assets in order to claim Comprehensive Social Security Assistance (“CSSA”) in order to dent Tin’s credibility.  However, I agree that Tin’s answer is reasonable – Tin had in fact told the Social Welfare Department that he would report to them once the AMC was incorporated; however, no such AMC was ever incorporated.  Furthermore, Wong had complained about Tin to the Social Welfare Department, and after investigation, Tin still continued to receive CSSA. 

Chan

21.  I agree that overall, Chan is a truthful witness, and his evidence should be accepted.

(1)  He candidly accepted under cross-examination that he had not graduated from his ‘distance learning course’ even though it was stated in the “Introduction to E-Pacific’s Main Managing Personnel (恒駿科技有限公司主要管理人員介紹)” that he graduated in 1978.  He also did not shy away from the fact that he only put his name (掛名) as E-Pacific’s financial director.

(2)  Although the events occurred around some 10 years ago, Chan was clear as to what happened, and he frankly admitted that he could not remember when he was not sure.

(3)  Furthermore, it is important to note that Chan does not have a financial interest in the outcome of the case.

Pong

22.  Pong is the head of his family, and the shadow director and controller of Full Pacific, instructing Madam So, his wife, and Wing Shan, his daughter, to sign various documents on behalf of Full Pacific.

23.  Pong seems to be very forthcoming and straightforward.  I agree that he is a credible witness and can be relied upon when recounting events that occurred with Tin and Wong. It is noted, however, that his understanding of the transaction was somewhat different as he admits that there was a sale and purchase of Pong’s Property.

So

24.  Graduated from high school, Madam So has very limited English ability, and does not have much experience in business.  She speaks softly and seems quite timid.  From her evidence, So will do whatever Pong tells her to do – ie, to sign any document Pong tells her to sign, even when she does not understand the contents.

25.  I note that some of her evidence is inconsistent, but I agree that this is probably due to lapse of time and her lack of understanding as to the significance of the events.  Even so, her habit of keeping a ‘diary of events’ on her wall calendar is useful for recollecting what happened in 2007 and 2008.  When Wong cross-examined her to find her birthday celebration for 2007 and 2008, So managed to easily find the relevant dates with her written notes.

26.  I agree that generally, So appears to be truthful, but unfortunately, it seems that a lot of her memory has faded during these last 10 or so years. 

Wing Shan

27.  The role Wing Shan played in the overall scheme of things was very limited, as her consistent evidence is that she signed documents on the instructions of Pong, her father, despite not fully understanding the contents.

E.2    Wong

28.  Wong was a defensive and evasive witness who very often would not respond directly to questions put to him.  The following are some examples which show that Wong is not a credible witness: –

(1)  When asked if Wong also conducted a land registry search on Chan’s Property, he said there was no documentary evidence so he “could not answer” (not that he could not remember).  He clarified that his oral evidence is based on documents, as he cannot remember events from so long ago.

(2)  Wong steadfastly refused to provide his residential address in his witness statement, only providing his office address instead.  His reason was that starting from around mid-2016, he had no money to rent a flat, so he moved into his office. 

(a) Yet, Wong has been providing his business address as his residential address since as early as 2008 [see: Matrix Wealth’s annual return dated 4 August 2010, when Tin (and Full Pacific) had not yet begun these proceedings against him].  It was pointed out to Wong that he had provided this address despite the specific requirements of sections 23 and 664 of the Companies Ordinance, Cap 622 and sections 2A and 107 of the former Companies Ordinance, Cap 32.  He then changed his reason to being so busy that he sometimes needed to work overnight (通宵), so that his understanding was that his office address was his residential address.

(b) The only residential address of Wong that can be found is within the conveyancing bundle when Fully Fortune applied for a loan on 12 August 2009, where Wong was the guarantor.  Underneath the residential address, it was ticked ‘self-owned’, but Wong states that it was not ticked by him.  When put to Wong that he signed on the second page of the loan application, of which paragraph 6 of the Declaration states, “I/We hereby confirm that all the particulars given above and on relevant supplementary sheet(s) (if any) are true and correct”, he tried to say that this signature does not include the previous page as he did not sign on that page.  When the court says that it must have included the previous page, Wong finally admitted that he may have missed it.

29.  Wong also tried to flatly avoid dealing with some of the obvious evidence when it was inconvenient for him to do so.  The most obvious example was when he was cross-examined on the documents contained within the conveyancing file provided by DSC (the “DSC Conveyancing File”).

(1)  The DSC Conveyancing File contained, inter alia, the following: –

(a) The fax from Fully Fortune to Tsang of DSC on 29 February 2008 (the “29 Feb 2008 Fax”);

(b) The instructions letter from Wong to Tsang of DSC dated 3 March 2008 (the “3 March 2008 Instructions Letter”); and

(c) The post-it sticker on the 3 March 2008 Instructions Letter (the “Post-It Sticker”) [Exhibit P3A].

(2)  Wong claimed under cross-examination that he could not remember whether he provided the 2-page blank “Provisional Agreement for sale and purchase in Chinese (物業臨時買賣合約)” (the “24 Jan 2008 PSPA”) or the Post-It Sticker to DSC.

(a) Wong claimed that it was very long ago, so he could not remember and because there was no ‘Return Receipt Chop’ so he could not confirm.

(b) Even more outrageously, he tried to claim that such instructions on the Post-It Sticker could have been Tin’s intention (rather than his own). 

(c) Additionally, when asked whether Wong had the intention of providing each instructions on the Post-It Sticker to DSC, he replied that he was unsure or that he could not remember:

(i) Instruction 1: Wong was unsure because there is no contemporaneous evidence to prove that he provided clauses 1 to 14 of the 24 Jan 2008 PSPA to DSC.

(ii) Instruction 2: Wong said that it does not entirely reflect his intentions.

(iii) Instruction 3: Wong claimed that it does not entirely reflect his intentions either because the instructions are not complete – the new sale and purchase agreement (later being the 7 March 2008 SPA) should not completely supersede all previous agreements.  This is because the documents signed by Wong, Tin and So on 24 January 2008 (the “24 Jan 2008 Chinese Documents”) included agreements other than just the sale and purchase of Tin’s Property and Pong’s Property, it also included business agreements, which could not be superseded by a subsequent property transaction agreement.

(iv) Instruction 4: Wong was not sure if it was his intention to provide to JSM because it was too long ago.

I agree that Wong’s answers are evasive and unpersuasive.

(d) He claimed that the handwriting on the Post-It Sticker was not his, but he was unsure whether it was one of his employees’ handwriting.  When Wu was asked about the handwriting on the Post-It Sticker, she immediately replied that it looked like Hoi Yin’s handwriting.  I agree that it is quite unbelievable that Wong could not recognise his sister’s handwriting despite working together for so long.

(e) Wong even tried to brush aside the fact that the “Mr.” at instruction 2 of the Post-It Sticker refers to him, by saying that it could be “Mrs.” or something else.  Yet, when seen by Wu and Tsang, they both immediately responded that it says “Mr.”, which is referring to Wong himself.  It is noted that Wong admitted that there is no “Mrs. Wong” as both he and Hoi Yin are not married.

(3)  Wong complained that the 3 March 2008 Instructions Letter was never disclosed to him until late 2017, although it was put to him that it was provided to his lawyers at the time on 6 January 2014 as shown by the time stamp (although contents not verified).  In this regard, he kept changing his evidence. 

30.  I agree with the plaintiffs’ submissions that Wong’s evidence is often confusing, contradictory, and always changing; so little weight should be given.

E.3    Wu

31.  I agree that Wu’s evidence is quite unbelievable, and her evidence should not be given weight.

(1)  Wu gave unconvincing evidence that her role as a secretary (being one of the only two employees of Wong’s companies) was to sit outside a meeting room and listen to Wong’s meetings with clients, waiting to be called upon to photocopy or to fetch water. 

(2)  Furthermore, the striking similarities between her witness statement and the witness statement of Hoi Yin show that her witness statement was in fact not drafted by her. When this matter was put to Wu, she could only flatly reply that the witness statement was typed by Hoi Yin upon her oral dictation. 

(3)  Worst still, when Wu was referred to paragraph (8) of her witness statement and asked why she emphasised the rental clause and the confirmor clause in the 24 Jan 2008 PSPA, she replied that when she was reading the 24 Jan 2008 PSPA, she was wondering what it meant so she remembered the clauses.  Despite such deep impression, Wu was completely unable to find such clauses on the first day of cross-examination (even though she was given ample time to do so).  On the very next day during re-examination, she could miraculously point to those clauses (ie clauses 6, 7 and 14) almost immediately.  Given a chance to explain how she was able to do so, she stated that when she read each clause carefully she missed it, yet she was able to spot the clauses when casually glancing at the 24 Jan 2008 PSPA again.  I agree that this explanation is plainly unbelievable.

E.4    Tsang

32.  In essence, Tsang has no independent recollection of what happened around 10 years ago.  All his answers are deduced from the documents at hand.  He does note that dates stated on any conveyancing documents may not mean that they were in fact signed on those dates.

E.5    Cheng

33.  Cheng seemed to be quite truthful as to the events recounted from his memory; however, the information in his witness statement has to be taken with a pinch of salt as it was not drafted by him.  He said that he found a lawyer, who is a friend of a friend, to help him look at his witness statement so that it would look more legalistic.  However, he could not remember the name of this lawyer.

E.6    Hoi Yin

E.6.1 Adverse inference due to Hoi Yin’s unexplained absence

(i)  Relevant legal principles

34.  No adequate explanation has been given for the absence of Hoi Yin as a witness, and adverse inference should be drawn for matters at issue to be discussed below.

35.  There is no inflexible rule that whenever a party fails to call a witness who might be expected to give material evidence on an issue adverse inference should be drawn against him.  It depends on the actual circumstances of the case.  [see: Ip Man Shan Henry & Anor v Ching Hing Construction Co Ltd & Ors (No 2) [2003] 1 HKC 256, [2003] HKCFI 916 at paragraph 155 per Deputy Judge Lam (as he then was), which has been applied in DBS Bank (Hong Kong) Ltd v Sit Pan Jit [2016] 5 HKC 104, [2016] HKCA 246].

36.  During trial, Wong confirmed that Hoi Yin is his younger sister. 

37.  On the last day of trial, Hoi Yin failed to appear to give evidence due to a “502-neck injury”, for which the doctor gave her 1-day sick leave.  Originally, Wong decided not to call Hoi Yin to give evidence; however, when warned by the court about the possibility of drawing adverse inference from such decision, Wong agreed to an adjournment to the following Monday to seek further information of Hoi Yin’s injury.

38.  On the following Monday, Wong provided another medical chit from another doctor stating that Hoi Yin had “head and neck injury”, giving her 5-day sick leave, and an X-Ray report.  Wong continued to tell the court that he did not know anything other than the fact that Hoi Yin had hurt herself falling out of bed, and did not know the seriousness of the injury. 

39.  Despite given the opportunity to apply to adjourn the case to call Hoi Yin and again warned of possible adverse inference, Wong confirmed that he closed his case.

40.  The circumstances surrounding the ‘disappearance’ of Hoi Yin is highly suspicious, and appropriate adverse inference should be drawn.

(ii)  The land registry search of Chan’s Property

41.  Wu did not print out the land registry search of Tin’s Property or Chan’s Property, and neither did Wong.  Thus, the question of whether Hoi Yin completed a land search of Chan’s Property and on a date as early as 8 January 2008 could only be answered by her.  However, she was not called as a witness.

42.  This is especially so as the document name (as a footer) of the land registry search of Tin’s Property and Pong’s Property is “file://C:\Documents and Settings\Joan\My Documents\WHYJOAN\JOAN W...”.  Wu confirmed that this was Hoi Yin’s computer, and Hoi Yin is also known as Joan Wong.

(iii)  The 24 Jan 2008 PSPA, the 29 Feb 2008 Fax, the 3 March 2008 Instructions Letter, and the Post-It Sticker

43.  Evidence was given that the 24 Jan 2008 PSPA, the 3 March 2008 Instructions Letter and the Post-It Sticker may have been typed / written by Hoi Yin.  Wong alleges that he does not know if the instructions on the Post-It Sticker were his intentions as they were not written by him.  Hoi Yin would have been able to explain the Post-It Sticker if she was called to give evidence.

44.  Similarly, Hoi Yin might have been able to explain the 29 Feb 2008 Fax.

45.  Tsang did not help much in this area as he did not have any independent recollection. 

(iv)  Witness statements of Wu, Hoi Yin and Cheng

46.  When put to Wu that someone may have drafted her witness statement, she replied in the negative. Yet she could not explain why her witness statement was so similar to Hoi Yin’s witness statement.  However, Wu gave evidence that it was Hoi Yin who typed her witness statement upon her oral instructions. 

47.  Cheng also gave evidence that Hoi Yin was the one who typed his witness statement, and his ‘lawyer friend’ would revise and edit it.

F.  WHAT REPRESENTATIONS WERE MADE BY WONG TO TIN/PONG?

48.  The representations allegedly made by Wong to Tin (and Pong) are set out at paragraph 8 above.

F.1    Wong denies meeting Tin, Pong and Chan at the end of December2007

49.  Wong denies having made any representation at the end of December 2007, as he denies meeting Tin, Pong and Chan in “Italiano”, an Italian restaurant in Sai Kung.

50.  However, I agree that such denial should be rejected as there is evidence from So’s calendar [Exhibit P1] and Chan’s oral evidence where he stated that the dinner meeting took place at the end of December, after Christmas, but before the New Year.

51.  It is the case of Tin (and Pong) that at the meeting in December 2007, Wong advised them to obtain TransUnion credit reports.  If Wong’s case were true, then there would be no reason for Tin, Pong and Chan to get their respective TransUnion credit reports.  All three of them are clear in their evidence that it was Wong who requested them to obtain TransUnion credit reports.  In fact, Wong admits to meeting Tin and Pong on 9 January 2008, which is the date on their TransUnion credit reports.  It was highly unlikely that Tin, Pong and Chan would have known of TransUnion, let alone to get a credit report from TransUnion, other than for the purpose of assisting Wong in deciding whether to accept them as an investor in the AMC.

52.  Chan also confirmed that Wong advised them to obtain TransUnion credit reports during that meeting. 

53.  Although Wu stated that Wong did not attend such a meeting in her witness statement, she confirmed during cross-examination that she in fact did not know if the lunch occurred.

F.2    Wong would set up the AMC

54.  There was uncertainty as to the precise definition of the AMC, and how the AMC would run its business.  However, Wong did discuss the concept of the AMC and setting it up (no matter how illusory it was) with various parties.

(1)  During Tin’s oral opening submissions, it was accepted that the business of the AMC was not discussed.  However, the AMC would need to at least fulfil, inter alia, the following requirements: –

(a) having net asset value of HK$10 million;

(b) Tin (and Pong and Chan) would have 8% shareholding each in the AMC (see Section F.3 below as to how they could invest);

(c) be listed on the SGX within one year of incorporation; and

(d) it would help Tin (and Pong and Chan) to raise monies for financing their construction projects in Mainland China and/or Hong Kong.

(2)  According to Tin during his cross-examination, the AMC, after listing, would be used as guarantor for borrowing monies for their construction projects.  From Tin’s point of view, the benefit of the AMC is to obtain financing for the Mainland China construction projects, and not to gain as AMC’s shareholder.

(3)  Wong’s definition of the AMC is indeed very illusive.  According to Wong during his opening submissions, the AMC would be a private company, which could be Matrix Wealth or Fully Fortune at the time, but until the entire process is completed, the identity of the AMC is unknown.

(4)  Chan explained the AMC as an investment by the parties, into which their respective properties would be invested for the time being before they earned HK$800,000.  Upon earning HK$800,000, then their properties would be returned to the parties.

(5)  Cheng also stated that Wong discussed incorporating an AMC before he moved to Yantai in 2009. According to Cheng, the AMC would hold assets (including landed properties) for a while before selling them, and the object of the AMC is to manage the assets, possibly mortgaging the assets to borrow more money. 

F.3    If Tin did not have sufficient money to invest in the AMC, he could inject Tin’s Property into the AMC at a nominal value of HK$800,000 in return for 8% shareholding of the AMC

55.  Wong continued to deny that he made such representation as he took the position that none of the agreements included such clause, and that all representations made were noted in writing.  He specifically denies that Tin’s Property would be injected into the AMC and Tin would receive 8% shareholding of the AMC.

56.  Chan’s evidence in this regard plays a significant role as he has nothing to gain from these proceedings.  He clearly supports the case of Tin (and Pong) in this aspect, as he himself also considered injecting Chan’s Property into the AMC for a nominal value of HK$800,000 in return for an 8% shareholding.  The reason that he did not do so was because he had already mortgaged Chan’s Property, so Wong did not want him to be an investor.

F.4    If Tin injected Tin’s Property into the AMC, he and his family could continue to reside in Tin’s Property without rent

57.  Again, this is supported by the evidence of Chan and Pong.  Both of them gave evidence that Wong made such representation at the end of December 2007.

58.  This representation is based on the understanding that Tin would need to pay only the management fees, rates and government rent and maintenance fee in respect of Tin’s Property.

59.  Furthermore, Pong was certain that during the 9 January 2008 dinner meeting, he noticed that there was no such clause in his agreement with Wong; however, he was assured by Wong that the document which So signed that evening (the “9 Jan 2008 Chinese Document”) were only for formality, and that Pong and his family could continue living in Pong’s Property rent free.

60.  Pong was also very adamant, and I accept, that there was no way he would have signed the 9 Jan 2008 Chinese Documents (or instructed So and/or Wing Shan to sign the 9 Jan 2008 Chinese Documents) if there was no agreement in relation to living in Pong’s Property rent free.  Furthermore, he confirmed during re-examination that he would not have gone to DSC’s Office on 17 March 2008 to sign the 7 March 2008 SPA or the assignment dated 17 March 2008 (the “17 March 2008 Assignment”).

F.5    By injecting Tin’s Property and Pong’s Property into the AMC, it would facilitate the AMC to raise money from banks for financing the construction projects and facilitate the AMC to be publicly listed on the SGX

61.  Tin gave evidence at paragraph 10 of his witness statement that Wong made this representation, which is supported by Pong. 

G.  DID TIN/PONG MAKE ANY REPRESENTATION TO WONG AS ALLEGED BY THE LATTER?

62.  Wong made allegations that Tin made various representations to him.

G.1    In or around the 2^nd quarter of 2007, Tin did not represent to Wong that he was a rich man with substantial experience and high qualification proposing construction projects of over RMB100 million in Mainland China with the partners in Hong Kong and the partners from Mainland China

63.  Wong alleges that Tin and Pong represented to him that they had purportedly been running a business with assets of over RMB100 million together with their partners in Mainland China, and had shown a number of documents to Wong in an effort to persuade Wong into lending Tin and Pong money. 

64.  The documents Wong relied on as evidence included the following: –

(1)  The TransUnion credit reports of Tin (and Pong);

(2)  A copy of the “Introduction to E-Pacific’s Main Managing Personnel (恒駿科技有限公司主要管理人員介紹)” (the “E-Pacific CV”);

(3)  HSBC bank statement of E-Pacific for December 2007 (the “E-Pacific Dec 2007 Bank Statement”); and

(4)  Emails between E-Pacific and Wong (through Matrix Wealth’s email account) regarding project proposals and other relevant documents (the “E-Pacific Emails”).

65.  Wong claimed that the TransUnion credit report showed that Tin was wealthy.  However, this cannot be seen from the TransUnion credit report, as the TransUnion credit report only shows the credit rating of Tin.  It does not state Tin’s wealth or other assets.  Furthermore, according to Tin, Pong and Chan, the TransUnion credit reports were only obtained by them upon Wong’s request. 

66.  According to Wong, the E-Pacific CV was given to him by Tin around the 2^nd or 3^rd quarter of 2007 to show their abundant experience in construction projects and the Mainland China projects, and the numerous Mainland China contacts.  The evidence of Tin, Pong and Chan all say otherwise: –

(1)  Tin accepted that he gave the E-Pacific CV to Wong (and his companies).  Wong tried to paint the picture that Tin lied about Chan’s qualifications; however, Tin replied that Chan provided the education qualifications himself.  As for Chan’s title of E-Pacific’s Chief Financial Officer (財務總監), Tin explained that such title was if E-Pacific could find a project, then Chan would be in charge of finance.

(2)  Similarly, Tin explained that Grant Thornton Corporate Finance Limited would become the accountant of E-Pacific if E-Pacific could find a project.  Tin did seek informal advice from Grant Thornton for some of the Mainland China construction projects, but he did not seek advice about working with Wong.

(3)  During cross-examination, Pong told the Court that he did not remember giving the E-Pacific CV to Wong (or his companies), but he confirmed that the contents as to his own qualifications are correct.

(4)  From the very beginning, Chan accepted that his qualifications listed on the E-Pacific CV was not entirely truthful.  He also confirmed that he was the one who typed the E-Pacific CV.

67.  In relation to the E-Pacific CV and one of the E-Pacific Emails, more specifically the e-mail dated 20 August 2007 from E-Pacific to Matrix Wealth, Wong took issue as to Feng’s qualifications and financial ability.  However: 

(1)  Tin confirmed during his cross-examination that there was no misrepresentation as to E-Pacific’s collaboration with Feng.  Similar to the other parties, the roles that they play as stated on the E-Pacific CV would only become relevant when they find a suitable Mainland China project.

(2)  Tin explained that the letter from Feng to Wong (of Matrix Wealth) dated 16 August 2008 on E-Pacific’s letterhead may have been drafted by himself and typed out by Chan as Feng told Tin that he would provide RMB40 million by mortgaging his assets if they could find an appropriate Mainland China construction project.  Chan confirmed that it was indeed drafted by Tin and typed by Chan.

(3)  It is noted that Tin consistently stated that these monies could be provided by Feng to finance the Mainland China construction projects.

(4)  Wong met Feng once before in Guangzhou in 2007.  He had time to ask Feng about Feng’s financial ability and ask Feng about his role in E-Pacific.

(5)  Pong also confirmed that Feng should not be a partner (合夥人) of E-Pacific as he did not have any shares in E-Pacific. 

(6)  Chan also believed that Feng had the ability to finance RMB40 million as the hotel was owned by Feng, and he had seen a copy of the certificate from the ICBC bank manager (although he did not personally verify the contents with the ICBC bank manager).

68.  Wong was misconceived to claim that the E-Pacific Dec 2007 Bank Statement showed that E-Pacific had a business transaction of some HK$1.2 million.

(1)  Wong only provided one bank statement of E-Pacific, and only one transaction was of more than HK$1 million. 

(2)  At this junction, it is also important to note that E-Pacific was originally a business owned by Pong relating to LED lights.  Pong explained that there were no separate bank accounts for his original business and the new business with Tin, but if there is income or expenses from the new business with Tin, then E-Pacific would need to open a new bank account. 

(3)  During re-examination, Pong explained that the sum of around HK$1.2 million was from a friend who entrusted E-Pacific to exchange the said amount into JP¥17 million to buy machines in Japan, so the said amount was transferred out the next day.

(4)  If one disregards the one-off transaction of around HK$1.2 million and JP¥17 million, then the bank account balance of E-Pacific was negative.

69.  Wong alleges that Tin (and Pong) must be rich with substantial experience and high qualification in order to propose Mainland China construction projects of over RMB100 million within the E-Pacific Emails.  However, when asked by the court, Tin told the court that he found such large development projects because Wong had represented that he could find a lot of money as he knows many fund companies.

70.  Wong has furiously attacked the fact that Tin lied about his financial background, especially the fact that he was receiving CSSA.  However, Tin gave evidence that he never lied to CSSA: see paragraph 20 above. 

(1)  Furthermore, Tin gave evidence in court that he had told Wong from the beginning, so Wong must have known.

(2)  Wong asked whether Chan knew Tin was receiving CSSA – Chan did not know, but he told the court that Tin never told him his financial background.

(3)  However, the most prominent evidence, which was pointed out by the court during Wong’s oral opening submissions, is that Tin did not even have HK$800,000 to inject into the project.  The objective fact is that when Tin is asked to contribute to the project, he could not even provide HK$800,000, and had to inject his home which, according to Wong, was worth less than HK$1 million.

H.  WERE THE REPRESENTATIONS MADE BY WONG TO TIN/PONG TRUE?

71.  The evidence emerged during the trial proves that the representations made by Wong were false, and the position as represented by Wong would have been likely to induce a reasonable person in the position of Tin (and Pong) to enter into the contracts (ie the 9 Jan 2008 Chinese Documents, the 24 Jan 2008 Chinese Documents, the 7 March 2008 SPA, and the 17 March 2008 Assignment).

72.  The traditional rule is that a misrepresentation must be a false statement of fact, past or present, as distinct from a statement of opinion, a statement of intention or a mere commendatory statement.  However, the distinction between a statement of fact on the one hand and a statement of opinion or intention on the other, is not clear cut.  A statement of opinion or of intention may itself be a misrepresentation if the maker does not in fact hold the opinion or have the intention stated.  Also a statement of opinion may amount to an implied representation that the maker has reasonable grounds for the opinion, and a statement of intention that he reasonably believes that he can carry out his intentions.  In determining whether there has been an express representation, and to what effect, the court has to consider what a reasonable person would have understood from the words used in the context in which they were used.  [see: Chitty on Contracts, 32^nd ed, §7-006 at pp 646-7]

73.  In certain circumstances a statement of opinion (or of intention) may be regarded as a statement of fact, and therefore as a ground for avoiding a contract if the statement is false.  Thus, if it can be proved that the person who expressed the opinion did not hold it, or could not, as a reasonable man having his knowledge of the facts, honestly held it, the statement may be regarded as a statement of fact.  If a person states as his opinion something which he does not in fact believe, or which given the facts known to him, he could not honestly hold, he makes a false statement of fact. [see: Chitty on Contracts, 32^nd ed, §7-008 at p 648]

H.1    Wong did not plan on setting up the AMC

74.  It seems that Wong was planning on incorporating a company, but it would not be the AMC as represented, as it would not be fulfilling the requirements as stated above at paragraph 54(1): –

(1)  the AMC to be incorporated would not and did not have net asset value of HK$10 million;

(2)  Tin (and Pong and Chan) would not have 8% shareholding each in the AMC to be incorporated (see Section H.2 below); and

(3)  the AMC to be incorporated would not help Tin (and Pong and Chan) to raise monies for financing their construction projects in Mainland China and/or Hong Kong (see Section H.3 below).

H.2    Wong did not plan to allow Tin and Pong to invest in the AMC and receive 8% shareholding in the AMC each

75.  The strongest evidence is the way Wong drafted his agreements (either signed personally, or on behalf of Matrix Wealth): –

(1)  According to clause 2 of the 9 Jan 2008 Chinese Document, Tin would sell Tin’s Property for HK$800,000 to “a company, group, institution or persons appointed by Wong (甲方指定的公司，團體、機構或人士)”, and the consideration would be directly “injected (注入)” into a Hong Kong company appointed by Wong (“該有限公司” as defined in clause 1 of the 9 Jan 2008 Chinese Document), without passing through Tin, for purchasing 8% ordinary shares of this said Hong Kong company.  Identical terms appeared in the document entered into between Wong and Full Pacific.

(2)  Thus, the 8% shares received by Tin/Full Pacific would not be in the AMC, but in some other Hong Kong company appointed by Wong.

(3)  Similarly, according to clause 2 of the 24 Jan 2008 Chinese Document, Tin would sell Tin’s Property for HK$800,000 to “a company, group, institution or persons appointed by Wong (甲方指定的公司、團體、機構或人士)”, and the consideration of not less than HK$800,000 would be directly “deposited (存入)” into Matrix Wealth (“該有限公司” as defined in clause 1 of the 24 Jan 2008 Chinese Document), without passing through Tin, for purchasing Matrix Wealth’s 8% ordinary shares.

(4)  Wong’s intention is further shown at clause 3(b) of the 24 Jan 2008 PSPA as to Matrix Wealth’s payment method in purchasing Tin’s Property from Tin: –

(a) Clause 3(b)(ii) – Matrix Wealth would transfer _(blank)_ number of ordinary shares of HK$1.00 each of _(blank)_ company to Tin (and Tin would return the HK$10.00 initial deposit (as stipulated in clause 3(b)(i) of the 24 Jan 2008 PSPA)); and

(b) Clause 3(b)(iii) – HK$_(blank)_ would be directly deposited into Matrix Wealth’s bank account, without passing through Tin.

76.  Although Wong stated that Matrix Wealth or Fully Fortune could have been the AMC, this is contrary to what he explained in his opening – for the case of Tin’s Property and Pong’s Property, he deliberately arranged it so that the shareholders would not hold shares in a company with any material assets.  This is because he was afraid of shareholder disputes whereby the company would be sued by its shareholders, so the company cannot utilise its assets; therefore, Wong came up with the arrangement where Tin (and Pong) would receive 8% shares in a company appointed by Wong, but not in the AMC.

77.  This is supported by Wong’s actions. 

(1)  Wong first transferred 16 shares of Matrix Wealth (equivalent to 8% shareholding in Matrix Wealth) to Tin on or about 15 July 2008.  This is unknown to Tin, as according to Tin’s memory, he had never seen or signed the alleged Instruments of Transfer and/or the alleged Bought and Sold Note on 15 July 2008 as alleged by Wong.

(2)  On around 20 August 2009, Wong transferred the said 16 shares in Matrix Wealth under the name of Tin into Wong’s own name, and transferred 80 shares in Mega City under the name of Wong (equivalent to 8% shareholding in Mega City) into Tin’s name without Tin’s knowledge nor consent.

(3)  During cross-examination, Tin was adamant that Wong never sent a copy of such documents or Share Certificate to Tin, nor was he ever notified of any shareholder’s meeting of Mega City.

(4)  Wong gave evidence that he mailed the Instrument of Transfer and Share Certificate of Mega City to Tin and Pong; however, he never considered to use registered post despite the importance of such document (though other less important letters were sent by Wong to Tin by registered post).

(5)  Furthermore, Wong does not remember if he had asked for the 16 shares of Matrix Wealth back from Tin or not, even though it is the usual practice to do so for share swap.  His excuse was that he was busy chasing rent.

(6)  Tin still does not know the amount of assets (if any) owned by Matrix Wealth or Mega City, but the position is that neither Matrix Wealth nor Mega City is the AMC, and Wong would not have allowed Tin/Full Pacific to have 8% shares of the AMC.

78.  Furthermore, Cheng confirmed that he indeed incorporated an AMC with Wong in the Cayman Islands, one Leading Capital Limited, but it has not found any appropriate assets to purchase yet.  The shareholding in the said Cayman Islands company is 49% for Cheng, 49% for Wong, and another 2% for Wong’s friend.  This was never mentioned to Tin and/or Pong, confirming the fact that Wong did not want Tin (or Pong) to invest in the AMC.

H.3    Wong did not plan on raising money for financing the construction projects of Tin and Pong in Mainland China and/or Hong Kong through the AMC

79.  Wong made excuses that he did consider the Mainland China construction projects proposed by Tin and Pong.  Despite knowing that there was a financial crisis, Wong kept asking Tin to find more projects, and only told Tin that it was not the appropriate time when he refused a project.

80.  Furthermore, he claimed expenses for travelling to Mainland China to view the construction projects. However, the documentary evidence provided by him does not support his case.

(1)  Wong provided receipts to Sichuan, although there was never any project proposal from Tin (or Pong) which was located in Sichuan.

(2)  He also provided receipts for a trip to Yantai, alleging that it was to discuss the Mainland China project proposals with Cheng; however, he does not remember which project proposal, and the length of the trip (of around 9 days) reveals that it was more of a holiday trip.  Cheng confirmed that he was with Wong only for around 2 to 3 days.

81.  Cheng confirmed that the AMC did not have to be related to the Mainland China construction projects.

H.4    Wong did not plan on allowing Tin or Tin’s family to continue to reside in Tin’s Property rent free if Tin injected Tin’s Property into the AMC (or any of Wong’s companies)

82.  Wong insisted that there were no oral representations or agreements, as the representations and agreements made were all written.  So, turning to the written agreements between the parties, mostly drafted by Wong, it can be seen that Wong did not plan on allowing Tin or Tin’s family to continue to reside in Tin’s Property.

(1)  There is no clause in the 9 Jan 2008 Chinese Documents allowing Tin to live in Tin’s Property rent-free.

(2)  There is no rent-free clause in the 24 Jan 2008 Chinese Documents, but paragraphs 13 and 14 refers to Tin’s responsibility to pay the bills for water, electricity, gas, telephone, etc.

(3)  Paragraph 6 of the 24 Jan 2008 PSPA specifically states that a separate tenancy agreement can be entered into (in accordance with paragraph 7 of the 24 Jan 2008 PSPA) upon completion of the conveyance.

(4)  Clause 5(1) of the 7 March 2008 SPA states that if no tenancy agreement is specified, then vacant possession of Tin’s Property shall be given to Matrix Wealth on the actual day of completion.  As there was “NIL” tenancy agreement stated in Part VIII of the First Schedule, vacant possession of Tin’s Property should have been given to Matrix Wealth on the completion date.

(5)  The tenancy agreement between Tin and Fully Fortune dated 4 September 2008 (the “4 Sept 2008 Tenancy Agreement”) states that Tin rented Tin’s Property from Fully Fortune at a monthly rent of HK$6,500 from 1 October 2008 to 30 September 2010.

(6)  Wong drafted the letter dated 4 September 2008 seeking assistance from Matrix Wealth to pay rental expenses owed to Fully Fortune from 1 October 2008 to 30 September 2010 (the “4 Sept 2008 Letter”).

(7)  The letter dated 8 December 2008 from Fully Fortune to Tin chasing, inter alia, rent in arrears (the “8 Dec 2008 Letter”).

(8)  The letter dated 1 April 2009 from Fully Fortune to Tin chasing, inter alia, rent in arrears (the “1 Apr 2009 Letter”).

(9)  The letter dated 9 April 2009 from Fully Fortune’s solicitors to Tin chasing, inter alia, rent in arrears (the “9^th Apr 2009 Letter”).

83.  Clearly, Wong did not intend to allow Tin to live in Tin’s Property rent free.

I.  IF THE REPRESENTATIONS MADE BY WONG WERE FALSE, DID HE MAKE SUCH REPRESENTATIONS FRAUDULENTLY, RECKLESSLY OR NEGLIGENTLY?

84.  The representations made by Wong were false, and I find that they were made fraudulently, as Wong clearly made the representations set out at Section F above knowingly, without belief in their truth.

85.  Although the motive behind a misrepresentation is irrelevant in proving fraudulent misrepresentation, it seems that the whole arrangement created by Wong is so that he could obtain money by mortgaging Tin’s Property and the Pong’s Property.  For example, through Fully Fortune, Wong obtained 3 mortgages on Tin’s Property and Pong’s Property from HSBC on 13 June 2008, Wing Lung Bank on 9 November 2009, and eventually the Dah Sing Bank.

J.  WHAT WERE THE CIRCUMSTANCES UNDER WHICH THE VARIOUS “HOME-MADE” DOCUMENTS WERE SIGNED?

86.  The “home-made” documents refer to the 9 Jan 2008 Chinese Documents, the 24 Jan 2008 Chinese Documents, and the 24 Jan 2008 PSPA.

87.  Both Wu and Wong claimed that drafts of the 9 Jan 2008 Chinese Documents were given to Tin (and Pong) prior to signing them.  On the other hand, Tin (and Pong) gave evidence that they did not receive any drafts prior to the meeting on 9 January 2008.

(1)  In Wu’s witness statement and oral evidence, she stated that Wong specifically “叮囑” Tin and Pong to consider the draft of the 9 Jan 2008 Chinese Documents and to seek lawyer advice as to the contents of the draft.  However, when asked more about the events during cross-examination, she could not remember exactly what happened.

(2)  Wu’s evidence in this regard seems far-fetched, and does not sound realistic, especially as she is not able to recount the important details.

(3)  I agree it is more likely than not that this event never occurred, and no drafts were ever provided to Tin or Pong.

(4)  So also confirmed during cross-examination that she did not see any draft prior to 9 January 2008.

88.  During cross-examination, Pong explained that Wong has read out the contents of the 9 Jan 2008 Chinese Documents once during the meeting on 9 January 2008, and that Wong has said that the 9 Jan 2008 Chinese Documents were just a formality, so that the oral representation that Tin and Pong could live in their respective properties rent free never changed.  Pong then confirmed, and I accept, that Tin and Pong would never have agreed to sign any agreement if they were unable to live in their respective properties rent free.

89.  According to Tin, Wong read the 24 Jan 2008 Chinese Documents out loud during the dinner meeting that day, assuring all present that it was only for the purposes of reducing tax, so that the properties would be put into another company before putting it into the AMC later.  Tin gave evidence that it was signed in Mongkok where there were dim lights.

(1)  Pong gave a different account whereby Wong did not read out the 24 Jan 2008 Chinese Documents, but rather just told Pong to take a look at it and said that the reason for such documents is to amend some errors.

(2)  So gave evidence that the 24 Jan 2008 Chinese Documents were signed in the evening at around 8 pm while eating dinner.  She also provided her calendar, which shows that such dinner took place that day.

(3)  Wong denies that Tin, Pong and So signed the 24 Jan 2008 Chinese Documents that night, and he claimed during cross-examination that he signed the documents sometime after Tin and So had signed the 24 Jan 2008 Chinese Documents.  When Wong was shown that he wrote that the events occurred on 24 January 2008 in his opening submissions at paragraph 11, he coyly replied that it should have included ‘on around’.

(4)  Furthermore, Wong also stated that he had sent the draft of the 24 Jan 2008 Chinese Documents to Tin and/or Pong one to two weeks before signing the said documents.  Despite being a very meticulous and careful accountant, he provided no documentary evidence to prove that such draft was given to them.  His excuse of not sending a draft by email because he was scared of hackers is not credible.

(5)  Wu confirmed that the she did not know when the said documents were signed. 

(6)  Although there is some inconsistent evidence given by all the parties as to what happened that night, it seems likely that such meeting did in fact took place that evening.

90.  Wong put to Tin repeatedly that Tin had the right to find separate legal representation; however, Tin’s evidence is clear – Wong had already found a lawyer to represent them all, so Tin did not find another lawyer.

91.  It is also Tin’s evidence that the 24 Jan 2008 PSPA was signed at the same time of signing the 24 Jan 2008 Chinese Documents, as there was a cheque of HK$10 dated 24 January 2008 from Matrix Wealth to Tin.  Tin explained that he was given the cheque by Wong as proof that the 24 Jan 2008 PSPA was legal, so he kept it, and that is why he remembered that the 24 Jan 2008 PSPA was signed on 24 January 2008.

92.  Tin’s evidence should be accepted as it seems more likely that the documents were signed by Tin on the dates on the agreement.  I accept that Tin believed the words of Wong and did not pay much attention to the detailed contents of the 9 Jan 2008 Chinese Documents, the 24 Jan 2008 Chinese Documents and the 24 Jan 2008 PSPA.

K.  WHAT WERE THE CIRCUMSTANCES UNDER WHICH THE LEGAL DOCUMENTS PREPARED BY DSC WERE SIGNED IN MARCH 2008?

93.  These legal documents include the 7 March 2008 SPA, the 17 March 2008 Statutory Declaration, and the 17 March 2008 Assignment.

94.  Tin and Pong gave clear evidence that they went to DSC’s Office twice on respectively 15 March 2008 and 17 March 2008, but they only signed documents on 17 March 2008 because So did not attend the meeting on 15 March 2008 so no documents could be signed on behalf of Full Pacific, and the parties (ie Tin, Pong and Wong) went to Shenzhen for sauna instead.  This is clearly supported by contemporaneous documents and witness evidence, including: –

(1)  So’s 2008 Calendar;

(2)  Statement of travel records of Tin and Pong; and

(3)  Fax from DSC to Fully Fortune dated 14 March 2008 asking the parties to bring certain documents for signing on 15 March 2008. 

95.  As to when the documents were signed, Tsang confirmed that the date the document was signed did not have to be the date stated on the document.  This was his practice. Therefore, it would not be a surprise if the documents were in fact all signed on 17 March 2008.

96.  There is inconsistent evidence given by the parties as to whether Wong was present on the day of signing on 17 March 2008, and what was explained by Tsang to the parties. Tsang’s evidence was that he did not remember what happened as the events occurred so many years ago; however, it was consistent practice that he would interpret the documents (generally and not interpret line by line) to the clients.

(1)  Tsang stated that explaining a document such as the 7 Mar 2008 SPA would take around 20 to 30 minutes; however, he cannot remember how many people were present, whether he explained it twice (to both Tin and Pong) or just once.  He also cannot remember which documents he explained or how many times he explained, or if there were any questions from Tin, Pong or other parties.  Generally, Tsang has no independent recollection of what occurred on that day.

(2)  He pointed to the documents to show that there was no tenancy agreement at the time that the parties signed the 7 March 2008 SPA and the 17 March 2008 Assignment.  He said that if there was such tenancy agreement, then it would have been included in the 7 March 2008 SPA and also the lawyers of DSC would have told him.

(3)  He confirmed that delivery of vacant possession is usually by the act of passing keys from the vendor to the purchaser, but this act does not have to be done through law firms, but could be through estate agents and clients directly. 

(a) There was a standard form dated 10 March 2008 confirming that the settlement of consideration for the transfer of Tin’s Property would take place between Tin and Matrix Wealth outside DSC’s Office.

(b) On this form, there is also an area where the clients could confirm that the passing of the keys would not be dealt by DSC (ie item (6) on the form).

(c) Tsang then deduced that since there was no tick, then the clients would not have dealt with the passing of the keys themselves; however, he could not remember if any record was kept in regard to this area.

(d) Furthermore, there was an area on the form regarding rates, water and electricity fees, gas fees, etc., which was not ticked; thus, the clients would not have done it themselves.  Tsang does not remember if he provided any explanation as to this area, or if he checked the accounts (對數).

97.  All in all, the gist of Tsang’s evidence is that the documents were explained and signed rather quickly, including the time that Tin went to another law firm to sign the 17 March 2008 Statutory Declaration.  I accept that the explanation of the documents could not have been thorough.

L.  DID THE DEFENDANTS OBTAIN ANY MORTGAGE LOAN BY USING TIN’S PROPERTY AND PONG’S PROPERTY AS SECURITY?

98.  It is not disputed that Fully Fortune obtained mortgage loan using Tin’s Property and Pong’s Property as security from HSBC on 13 June 2008, Wing Lung Bank on 9 November 2009, and later the Dah Sing Bank.

M.  WHAT WERE THE CIRCUMSTANCES UNDER WHICH THE TENANCY AGREEMENTS IN RESPECT OF TIN’S PROPERTY AND PONG’S PROPERTY WERE SIGNED IN SEPTEMBER 2008?

99.  Tin’s evidence was that Wong invited Tin and Pong for a lunch on around 3 September 2008, asking them to sign the 4 Sept 2008 Tenancy Agreement.  This was initially refused by Tin and Pong; however, they were subsequently persuaded by Wong to go to Wong’s office on 4 September 2008 and signed their respective tenancy agreement in Wong’s office.  He further said that according to Wong, if Tin and Pong did not sign their respective tenancy agreements, then the AMC could not be incorporated and could not borrow money; however, Wong repeated his oral representation that Tin and Pong in fact did not need to pay rent. 

100.  Pong gave similar evidence during his cross-examination.  He stated that if he did not sign his tenancy agreement for Pong’s Property, then there would be financing issues and problems with listing the AMC.

101.  Furthermore, Tin confirmed that he did not need to pay any deposit (despite clause 5 of the 4 Sept 2008 Tenancy Agreement) nor did Tin receive any keys from Fully Fortune of Tin’s Property (despite clause 9 of the 4 Sept 2008 Tenancy Agreement).

102.  The 4 Sept 2008 Tenancy Agreement was signed with 2 other documents: an IOU of HK$800 from Tin to Wong dated 4 September 2008; and the 4 Sept 2008 Letter, referred to above, on the face of it seeking assistance from Matrix Wealth to pay rental expenses owed to Fully Fortune from 1 October 2008 to 30 September 2010.  Tin does not remember exactly when these documents were signed. 

103.  During cross-examination, Wong’s account for these documents became illogical.

(1)  Wong admitted that he thought that the 4 Sept 2008 Letter is a document with legal effect.  However, he claims that it is only a unilateral letter, and it does not bar Fully Fortune from claiming rent from Tin, as Matrix Wealth and Fully Fortune are separate entities.  He confirmed the same reasoning for the issuance of the 1 Apr 2009 Letter and the 9 Apr 2009 Letter.

(2)  Wong also admitted that he drafted the 4 Sept 2008 Letter, wherein Tin asked Matrix Wealth to assist Tin in paying rent to Fully Fortune first.  Even so, Fully Fortune asked Tin for rent and management fees in the 8 Dec 2008 Letter, rather than asking Matrix Wealth for the same.

(3)  Wong could not offer any explanation as to why it took him nearly 6 months to draft and prepare the 4 Sept 2008 Tenancy Agreement, rather than having it prepared for the date of completion (ie on the date of signing the 17 March 2008 Assignment).

(4)  Wong also could not explain why there is no clause providing for the payment of rent in the 24 Jan 2008 Chinese Documents.

N.  CLAUSES 22 & 23 OF THE 24 JAN 2008 CHINESE DOCUMENTS

104.  During the trial, Wong relied on clause 23 of the 24 Jan 2008 Chinese Documents, which provides as follows: “此契約取代甲乙雙方過往全部談判、聲稱、理解、協議、合約及於2008年1月9日簽訂的契約。”

105.  With assistance of the court interpreter, clause 23 has been translated into English to read as follows: “This deed supersedes all past negotiations, statements/allegations, understandings, agreements, contracts of Party A and Party B, and the deed signed on 9 January 2008”.

106.  I agree that Wong cannot rely on clause 23 to avoid his liability, because: –

(1)  At common law a person cannot contract out of liability for fraud inducing the making of a contract with him [see: Chitty on Contracts, 32^nd ed, §7-143 at pp 725-6; Spencer Bower, Actionable Misrepresentation, 5^th ed, paragraph 13.08]

(2)  As a matter of construction, clause 23 does not exclude liability for “misrepresentations” [see: Axa Sun Life Services plc v Campbell Martin Ltd [2011] 2 Lloyd’s Rep 1, paragraphs 80, 81 and 94; Spencer Bower, Actionable Misrepresentation, 5^th ed, paragraph 13.10]

107.  Wong further relies on clause 22 of the 24 Jan 2008 Chinese Documents, which provides, inter alia, that “…契約參與方現確認完全清楚、瞭解及明白此契約全部內容”. 

108.  Wong relies on “contractual estoppel”, the essence of which has been summarised at paragraph 35 of Wong’s Closing Submissions as follows: “The parties to a contract may agree a state of affairs which is incompatible with the necessary factual elements of an action in misrepresentation”. Thus, Wong argues that by virtue of clause 22 of the 24 Jan 2008 Chinese Documents, Tin and Pong are estopped from claiming that they did not understand the contents of the document.

109.  In my view, the doctrine of “contractual estoppel” does not assist Wong in the present case, for the reason that contractual statement that would otherwise raise contractual estoppel will not do so if the content or effect of that statement has been misrepresented to the party sought to be estopped.  This limit on contractual estoppel was considered in Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd [2006] 2 Lloyd’s Rep 511 at paragraph 44:

“From time to time one party to a contract misrepresents to the other the contents or effect of the document which is intended to embody the agreement. In such cases it has been held that the party making the representation is prevented from enforcing the contract in accordance with its terms. An example is to be found in the well-known case of Curtis v The Chemical Cleaning and Dyeing Co Ltd [1951]1 K.B. 805 in which the defendant was prevented from relying on a general exemption clause on the back of the cleaning ticket after its shop assistant had induced the customer to sign it by telling her that it excluded liability only for damage to beads or sequins”.

110.  In the present case, it is indeed part of Tin’s and Pong’s case, which I accept, that Wong had misrepresented the effect of the 24 Jan 2008 Chinese Documents [see: paragraph 15.1(e) of the Statements of Claim].

O.  IS TIN ENTITLED TO HAVE TIN’S PROPERTY BACK, AND IS FULL PACIFIC ENTITLED TO HAVE PONG’S PROPERTY BACK?

O.1    The 9 Jan 2008 Chinese Documents, the 24 Jan 2008 Chinese Documents, the 7 March 2008 SPA, and the 17 March 2008 Assignment should be rescinded

111.  I agree that as a result of Wong’s fraudulent misrepresentations (see Sections F and H above), the 9 Jan 2008 Chinese Documents, the 24 Jan 2008 Chinese Documents, the 7 March 2008 SPA and the 17 March 2008 Assignment should be rescinded ab initio.

112.  Wong is a director, shareholder and the person in control of both Matrix Wealth and Fully Fortune. Thus, his fraudulent misrepresentations also bind Matrix Wealth and Fully Fortune as an agent of Matrix Wealth and Fully Fortune: see Chitty on Contracts, 32^nd ed, §7‑025 at p 660.  In any case, Matrix Wealth and Fully Fortune would have had constructive notice that Tin entered into the 9 Jan 2008 Chinese Documents, the 24 Jan 2008 Chinese Documents, the 7 March 2008 SPA and the 17 March 2008 Assignment as a result of Wong’s misrepresentation and should be unable to enforce them: see Chitty on Contracts, §7-029 at p 663.

O.2    The consideration for the transfer of Tin’s Property by Tin and the transfer of Pong’s Property by Full Pacific to Matrix Wealth and/or Fully Fortune has wholly failed, and Fully Fortune has been unjustly enriched

113.  In cases of unjust enrichment,

(1)  When determining the validity of the claim, the courts consider: –

(a) Was the defendant enriched?

(b) Was the enrichment at the plaintiff’s expense?

(c) Was the enrichment unjust?

(d) Are any of the defences available?

See: Shanghai Tongji Science & Technology Industrial Co Ltd v Casil Clearing Ltd(2004) 7 HKCFAR 79, at paragraph 67 (Ribeiro PJ) and Yukio Takahashi v Cheng Zhen Shu(2011) 14 HKCFAR 558, at paragraph 26 (Ribeiro PJ).

(2)  “Consideration” in the context of a claim in unjust enrichment is different from that in the law of contract.  “Consideration” for the purposes of the law of unjust enrichment does not mean the quid pro quo for there to be a binding contract as it is used in the law of contract.  In the law of unjust enrichment, “consideration” refers to the condition which formed the basis of the plaintiff’s transfer to the defendant of the benefit in question.  In Shanghai Tongji (supra) paragraph 79, Ribeiro PJ referred to it as “the anticipated performance for which the money was paid, or the ‘basis or purpose’ of the payment”.

(3)  Where total failure of consideration is relied upon as the “unjust factor”, it is crucial to correctly identify and characterise the transaction providing the basis for the defendant’s enrichment, and it is only then can one identify the relevant anticipated performance and ascertain whether it has totally failed: see Shanghai Tongji, paragraph 80 (Ribeiro PJ).

(4)  In the law of unjust enrichment, the usual consideration that fails which gives rise to restitution is the promised counter-performance.  If money was paid to secure performance and if performance fails, the inducement which brought about the payment is not fulfilled: see Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32 at 48 (Viscount Simon LC); Shanghai Tongji,paragraph 79 (Ribeiro PJ).

114.  I agree that in the present case, Tin’s and Pong’s claims are valid: –

(1)  Wong and Fully Fortune have been enriched with Tin’s Property and Pong’s Property;

(2)  Such enrichment is at Tin’s expense and Full Pacific’s expense; and

(3)  Such enrichment is unjust because there was total failure of basis / consideration – the basis / consideration being the expected formation of the AMC and/or the expected listing of the AMC onto the SGX and/or the expected financing of the Mainland China construction projects and/or the expected ability to live in Tin’s Property and Pong’s Property free of rent.

O.3    The Defendants are holding Tin’s Property and Pong’s Property as bare trustees on resulting trust and/or constructive trust for respective Tin and Full Pacific

115.  As a result of the rescission of the 9 Jan 2008 Chinese Documents, the 24 Jan 2008 Chinese Documents, the 7 March 2008 SPA and the 17 March 2008 Assignment, Wong, Matrix Wealth and/or Fully Fortune hold Tin’s Property on constructive trust for Tin, and Wong, Matrix Wealth and/or Fully Fortune hold Pong’s Property on constructive trust for Full Pacific: see Chitty on Contracts,§7-122 at p 714.

116.  Further, as a result of the total failure of consideration, the defendants hold Tin’s Property on a resulting trust for Tin, and Pong’s Property on a resulting trust for Full Pacific.

117.  The advantages of proprietary restitutionary claims include, first, that they may lie against an innocent recipient of the property, even where no personal claim, whether in tort, unjust enrichment, or equity, would lie against him; secondly, if the recipient of the property is insolvent, the true owner may, subject to statutory requirements in certain cases, claim specific property in priority to the claims of general creditors; thirdly, if the true owner traces his property into investments bearing interest, he will be entitled to claim the interest in addition.

O.4    Tin was at all material times the sole legal and beneficial owner of Tin’s Property and in actual possession and occupation of Tin’s Property.  The position regarding Pong/Full Pacific was the same

118.  It is not in dispute that Tin was at all material times in actual possession and occupation of Tin’s Property.

119.  If the 9 Jan 2008 Chinese Documents, the 24 Jan 2008 Chinese Documents, the 7 March 2008 SPA and the 17 March 2008 Assignment are rescinded ab initio, then Tin would be the sole legal and beneficial owner of Tin’s Property.  The position regarding Pong/Full Pacific is the same.

O.5    The Defendants should do all such necessary acts and execute such necessary documents so as to transfer the legal and beneficial title of Tin’s Property back to Tin and Pong’s Property back to Full Pacific free from any encumbrance

120.  Currently, the defendants cannot transfer Tin’s Property directly back to Tin (or Pong’s Property back to Full Pacific) due to the Dah Sing Bank Mortgage, which has not been discharged.  Dah Sing Bank has started proceedings against Fully Fortune and Wong, HCMP 78/2017 (the “Mortgagee Proceedings”), in which Tin and Full Pacific have intervened.  Thus, Tin’s ability to obtain legal and beneficial title of Tin’s Property (and Full Pacific’s ability to obtain title to Pong’s Property) is still at risk.

121.  As such, an order should be made against the defendants to do all such necessary acts and execute such necessary documents so as to transfer the legal and beneficial title of Tin’s Property back to Tin and Pong’s Property back to Full Pacific free from any encumbrance.

P.     ARE TIN AND FULL PACIFIC ENTITLED TO ANY DAMAGES?

P.1    General principles

122.  As Tin/Full Pacific were induced to enter into the 9 Jan 2008 Chinese Documents, the 24 Jan 2008 Chinese Documents, the 7 March 2008 SPA and the 17 March 2008 Assignment as a result of Wong’s fraudulent misrepresentation, they may rescind the contracts, claim damages or both. 

123.  To claim damages for fraud, Tin/Full Pacific would need to prove causation.  In the present case, I accept that Tin/Full Pacific would not have entered into the 9 Jan 2008 Chinese Documents, the 24 Jan 2008 Chinese Documents, the 7 March 2008 SPA and the 17 March 2008 Assignment ‘but for’ Wong’s misrepresentations.

124.  Generally, the damages would be to put Tin/Full Pacific in the position as if Wong did not make the misrepresentations. 

125.  There are essentially two types of loss and damage which Tin/Full Pacific are entitled to seek Wong to indemnify: (i) loss directly flowing from Wong’s wrongful acts; and (ii) costs of the litigation arising from Wong’s wrongful acts.

P.2    Discharge the Dah Sing Bank Mortgage

126.  Tin/Full Pacific primarily seeks the return of respectively Tin’s Property and Pong’s Property as their respective rightful legal and beneficial owners, free from any encumbrance (see Section O above).  This as an order itself should not raise any issues.  However, the issue lies with the Dah Sing Bank Mortgage, where it is more likely than not that Wong (or his companies) will not repay the said mortgage.  Thus, Tin/Full Pacific seeks that Wong indemnifies Tin/Full Pacific for losses arising from the Dah Sing Bank Mortgage.

P.3   Costs of the other satellite proceedings

127.  The total costs of the other satellite proceedings are currently not assessable due to their ongoing nature.  The other satellite proceedings (currently) include: –

(1)  HCSD 11/2016 – Wong’s Application to set aside Statutory Demand;

(2)  CACV 160/2016 – Wong’s Appeal against Anthony Chan J’s dismissal of HCSD 11/2016;

(3)  HCB 5289/2016 – Bankruptcy Proceedings against Wong by Tin;

(4)  HCCW 250 and 251/2016 –Winding-up Proceedings against respectively Fully Fortune and Matrix Wealth by Tin;

(5)  CACV 219 and 220/2017 – Wong’s Appeal against HCCW 250 and 251/2016 respectively; and

(6)  HCMP 78/2017 – the Mortgagee Proceedings.

128.  Tin/Full Pacific do not propose to deal with them in the current trial, but proposes that they are to be assessed together when the other proceedings have been completed.

Q.  ARE THE DEFENDANTS ENTITLED TO THE RELIEF SOUGHT IN THE COUNTERCLAIM?

Q.1    Counterclaim by Matrix Wealth and Fully Fortune should be dismissed

129.  Both Matrix Wealth and Fully Fortune did not attend the trial.

(1)  By letter dated 16 November 2017, the Joint and Several Provisional Liquidators of Matrix Wealth confirmed that Matrix Wealth “will not participate and / or defend” these proceedings.

(2)  Similarly, by letter dated 20 December 2017, the Official Receiver as provisional liquidator of Fully Fortune “decided not to participate in and/or defend [these proceedings] or give consent to or assign the right of action to any third party to participate in and/or defend [these proceedings]”.

130.  In the circumstances, I agree that the counterclaim by Matrix Wealth and Fully Fortune should be dismissed.

131.  In fact, nearly the entire counterclaim can be dismissed, except prayer for relief (2), whereby Wong seeks a “Declaration that the Deed signed 24^th January 2008 is binding and in full force”, but that is, of course, on the basis that Tin/Full Pacific’s case on misrepresentation is not made out.

Q.2    Wong is not entitled to his counterclaim

132.  Since this court agrees that the 24 Jan 2008 Chinese Documents should be rescinded, Wong is clearly not entitled to a “Declaration that the Deed signed 24^th January 2008 is binding and in full force”.

133.  Similarly, Wong is not entitled to “Overdue mortgage loan repayments, building management fees and Government rent and rates plus interest and/or late charges in the sum of HK$138,377.20 as at 5^th March 2012 and further sum of the repayment of mortgage instalments, building management fees, Government rent and rates and any other sum(s) or expense(s) in the future to be incurred according to the Chinese Deed dated 24^th January 2008 and/or Tenancy Agreement dated 4^th September 2008”.  Further, Wong is not able to claim under the 4 Sept 2008 Tenancy Agreement as that was signed between Tin and Fully Fortune.

134.  Wong’s claim for “Indemnity for legal fees incurred by the Defendants to be ascertained on indemnity basis” and “Further and/or other relief(s) and/or damages together with the specific performance(s) requested by the 1^st Defendant, 2^nd Defendant and 3^rd Defendant if enforceable through the judgment(s) of the Court” should likewise be dismissed.

R.  CONCLUSION

135.  For the reasons stated above, I grant the following relief in favour of Tin: –

(1)  A Declaration that Fully Fortune is holding Tin’s Property as bare trustee on a resulting trust and/or constructive trust for Tin.

(2)  A Declaration that Tin is and was at all material times the sole legal and beneficial owner of Tin’s Property and in actual possession and occupation of Tin’s Property.

(3)  An Order for rescission of:

(a) the 9 Jan 2008 Chinese Document;

(b) the 24 Jan 2008 Chinese Document;

(c) the 7 March 2008 SPA; and

(d) the 17 March 2008 Assignment.

(4)  An Order that the defendants do all such necessary acts and execute all such necessary documents so as to transfer the legal and beneficial title of Tin’s Property back to Tin free from any encumbrances.

(5)  An Order that Wong shall indemnify Tin against all the loss and damage which he has suffered or may suffer and all the expenses and costs which he has incurred or may incur as a result of or in connection with or arising from or incidental to the Dah Sing Bank Mortgage.

(6)  An Order that Wong shall indemnify Tin against all the expenses and costs that he has incurred or may incur as a result of or in connection with or arising from or incidental to the following six pending legal proceedings, and any further proceedings that may arise from them:

(a) HCSD 11/2016;

(b) CACV 160/2016;

(c) HCB 5289/2016;

(d) HCCW 250 and 251/2016;

(e) CACV 219 and 220/2017; and

(f) HCMP 78/2017.

(7)  The counterclaim by Wong, Matrix Wealth and Fully Fortune against Tin be dismissed.

136.  Further, I grant the following relief in favour of Full Pacific: –

(1)  A Declaration that Fully Fortune is holding Pong’s Property as bare trustee on a resulting trust and/or constructive trust for Full Pacific.

(2)  A Declaration that Full Pacific is and was at all material times the sole legal and beneficial owner of Pong’s Property and in actual possession and occupation of Pong’s Property.

(3)  An Order for rescission of:

(a) the 9 Jan 2008 Chinese Document;

(b) the 24 Jan 2008 Chinese Document;

(c) the 7 March 2008 SPA; and

(d) the 17 March 2008 Assignment.

(4)  An Order that the defendants do all such necessary acts and execute all such necessary documents so as to transfer the legal and beneficial title of Pong’s Property back to Full Pacific free from any encumbrances.

(5)  An Order that Wong shall indemnify Full Pacific against all the loss and damage which it has suffered or may suffer and all the expenses and costs which it has incurred or may incur as a result of or in connection with or arising from or incidental to the Dah Sing Bank Mortgage.

(6)  An Order that Wong shall indemnify Full Pacific against all the expenses and costs that it has incurred or may incur as a result of or in connection with or arising from or incidental to the following three pending legal proceedings, and any further proceedings that may arise from them:

(a) HCSD 11/2016;

(b) CACV 160/2016; and

(c) HCMP 78/2017.

(7)  The counterclaim by Wong, Matrix Wealth and Fully Fortune against Full Pacific be dismissed.

137.  I further order that Wong do pay interest to Tin and Full Pacific on the sums found to be due at the judgment rate from the time when the said loss and damage was suffered and/or the said expenses and costs were incurred up to the date of payment.

138.  Finally, I order that the defendants do pay the plaintiffs their costs of these consolidated proceedings.  Such costs are to be taxed if not agreed.  Tin’s own costs be taxed in accordance with the Legal Aid Regulations.

139.  The above orders as to interest and costs are nisi and shall become absolute in the absence of any application within 14 days to vary the same.