Shieh Shin Jiu v. Mak Shiu Kei Johnny and Another

CACV 174/1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 174 OF 1997

(ON APPEAL FROM HCA NO. A9096 OF 1991)

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J U D G M E N T

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Godfrey, J.A. :

Introduction

1. This is an appeal from an order of Master Woolley (sitting as a deputy judge of the Court of First Instance of the High Court) made on 25 March 1997. The dispute which the judge had to resolve was a dispute as to the authenticity of the signatures appearing on two undated instruments of transfer of shares made in May 1991, the first being a transfer by Mak Shiu Kei, Johnny ("Mr. Mak") of one share in Zheng Yuan Enterprises Co. Ltd. ("the company") to Shieh Shin Jiu ("Mr. Shieh"), and the second a transfer of another share in the company by Ma Shuk Hing ("Mrs. Mak") to Mr. Shieh. The stated consideration in each transfer was $1. The instruments of transfer were accompanied by sold and bought notes relating to the transaction. All these documents appear to have been signed as appropriate by Mr. or Mrs. Mak, but the authenticity of the transfers is denied.

2. At the trial of the action, Mr. and Mrs. Mak appeared in person, and Mr. Mak gave evidence. The judge, contrary to the submissions made by Mr. Mak on behalf of himself and Mrs. Mak, held that the signatures on the instruments of transfer were authentic and accordingly resolved the proceedings in favour of Mr. Shieh. Mr. and Mrs. Mak now appeal to this court.

The background

3. The background may be shortly stated.

4. The plaintiff is a Taiwanese businessman, in the business of, among other things, manufacturing parts for the mechanism of tape recorders. Mr. and Mrs. Mak have been associated with him for some years. Mr. and Mrs. Mak worked for him in Hong Kong. The company was incorporated in Hong Kong for the further pursuance of the business. Four shares in the company were allotted, each of $1; one was allotted to Mr. Mak, one to Mrs. Mak, one to Mr. Shieh and one to his wife.

5. Mr. and Mrs. Mak's case, which Mr. Shieh denies, is that these shares were issued to them to reflect a 50% beneficial ownership in the company; but this is not a question which fell to the judge to decide, and is not one which we can review.

6. Although the company had some success, the first set of audited accounts showed an overall loss. It appears that in early 1991, Mr. and Mrs. Mak wished to resign as directors, and to give up their shares in the company.

7. The minutes of a meeting of the company held on 31 March 1991 record the resignation of Mr. and Mrs. Mak as directors of the company and record that the transfers of their shares to Mr. Shieh was approved.

8. The evidence at the trial given by Mr. Mak was to the effect that he and Mrs. Mak did not sign the instruments of transfer. As I have already said, Mrs. Mak did not give evidence. Mr. Shieh said that Mr. and Mrs. Mak did execute these transfers, but he was unable at the trial to produce the originals, and was only able to produce photocopies of the transfers. There was evidence at the trial from a handwriting expert who expressed the view that it was possible that the documents were forgeries and said this :-

"... I cannot express any opinion about whether each of the questioned documents as a whole was genuine without examining the originals."

The judgment below

9. The judge reviewed all the evidence, and after considering all the matters which he had to consider (including the inherent probabilities of the case, as to which he had some sympathy with the position of Mr. and Mrs. Mak), found Mr. Shieh's case as to these documents "overwhelming". He said this :

"As to whether they were in fact signed by the Defendants, I accept the evidence of Mr. Shieh where it differs from that of Mr. Mak, in addition to that of the Plaintiff's other witnesses which I also accept. I accordingly find that there was an agreement to transfer the shares, that the consideration was $1, and that the Defendants signed the documents of transfer confirming the agreement."

The appeal

10. It is said by Mr. Li for Mr. and Mrs. Mak today that the facts of the case dictate a different conclusion, because the initial arrangements in favour of Mr. and Mrs. Mak must have given them a substantial beneficial interest in the company, which they would not be prepared to transfer for only a nominal consideration. He says the judge should have found himself compelled to find that these instruments of transfer were forged.

Conclusion

11. For myself, I find it quite impossible to accept that submission. This is an appeal on a pure question of fact; a, very serious, allegation of forgery. The judge refused to find as a fact these documents were forged.

12. The appeal is by way of rehearing, but that does not mean that this court will retry the case. This court will not usurp the function of the trial judge to find the facts. It certainly will not disturb his findings of primary fact when these are based on the credibility of the witnesses and a preference for the evidence of one witness over that of another. The extent to which an appellate court can interfere with a judge's findings of primary fact is very limited. An appellant who seeks to disturb an adverse finding of primary fact has to demonstrate either (1) that there is no evidence to support it; or (2) that it is contrary to documentary or other incontrovertible evidence which the judge overlooked. It is not enough to show that there is very little evidence to support the judge's finding or that it was "contrary to the weight of the evidence". The weight of the evidence is a matter for the trial judge. It does not matter how many witnesses say one thing, and how few say the contrary. The judge is entitled to prefer the evidence of the few to that of the many.

13. In a case like the present, in which the judge recoiled from finding that the instruments of transfer in question here were forged, it is really impossible for us to come to a contrary conclusion without having seen or heard the witnesses and therefore not having the advantages which the trial judge had.

14. For these reasons, I consider there is no course open to us but to dismiss this appeal.

Liu, J.A. :

15. I agree that the appeal should be dismissed for the reasons given by the President. I also agree that at the root of this appeal is the question whether the documents were forged as alleged. It really matters not what the Maks said of the two shares, nor what Mr Shieh said about his wanting them to have one percent, nor that the two shares to the Maks only came to light when they were about to resign as directors.

Findlay, J. :

16. I agree.

17. I would only like to say that I have an uncomfortable feeling that the appellants in this case might have had a far better case than was ever pleaded or advanced in the court below, but that is no more than a suspicion. The court below, and, of course, this court, must deal with the case as pleaded and advanced by the appellants.

18. So, for the reasons given by my brothers, I would agree that the appeal must be dismissed.