WONG CHAK WING AND ANOTHER v. CAMELO INVESTMENT LTD AND OTHERS

CACV 32/2022, [2024] HKCA 1155

On appeal from [2021] HKCFI 3710

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 32 OF 2022

(ON APPEAL FROM HCA NO 65/2011)

-----------------------------------

-----------------------------------

___________________

D E C I S I O N

___________________

The Court:

1.  This is the plaintiff’s application for leave to adduce further evidence on appeal.  It is opposed by the 9^th and 10^th defendants.  The 1^st, 3^rd to 5^th defendants adopt a neutral stance while the remaining defendants have not responded to the application.  Having considered the materials, we take the view that the application can be properly dealt with without a hearing on the basis of written submissions only pursuant to Order 59, rule 14A(1) of the Rules of the High Court.[1]  We now hand down our decision.

Background

2.  Ms Wong Chak Wing (“Ms Wong”) is the widow of Mr Wan Sing Hon (“Deceased”) who passed away on 9 July 2010.  She and her younger sister, Ms Wong Yuen Han Maggie are the joint administratrix of the Deceased’s estate.  They as plaintiff commenced HCA 65/2011 in February 2011 against the defendants in respect of nine landed properties held by the 1^st to 6^th defendants as trustees, which were described in the proceedings below as Albion Gardens, Shop 68, 31 Cumberland Road, Ho Fai Garden, Shop 21, Shop 66, Yuk Sing House, Shop 40 and Shop 42.  They claimed that those properties were purchased with the Deceased’s funds so that he and upon his death his estate was the beneficial owner.  Among the defendants, the main protagonists were the 9^th and 10^th defendants, who were the Deceased’s elder siblings.  They counterclaimed that the properties were purchased by funds provided by the family business of the Wans including their father’s.  The Wan family, comprising the Deceased, the 9^th and 10^th defendants and their eldest sibling, was the beneficial owner.

3.  By a judgment handed down on 8 December 2021,[2] Keith Yeung J dismissed both the plaintiff’s claim and the 9^th and 10^th defendants’ counterclaim.  He found that the absence of documentary evidence in support of the plaintiff’s case, if true, was inherently most improbable; and that the 9^th and 10^th defendants’ case was unreliable as their evidence that the father was the source of funds were bare assertions.  So it would appear that the lack of documentary evidence was fatal to both the plaintiff’s claim and the 9^th and 10^th defendants’ counterclaim.

New evidence

4.  The plaintiff now seeks to adduce the following fresh evidence on appeal, which Ms Wong said she obtained after judgment:

(1)  documents from HSBC and Hang Seng Bank, including account statements;

(2)  documents found in the sealed staircase on the rooftop of Albion Garden;

(3)  papers handed over by the plaintiff’s former solicitors, Lam & Co (“LC”), to their current solicitors;

(4)  documents obtained from searches at the Land Registry, which LC failed to conduct.

5.  The plaintiff’s case is that the fresh evidence proves or tends to prove that the Deceased had paid for:

(1)  the initial and further deposits and balance of the purchase price for Albion Garden;

(2)  the initial deposit and balance of the purchase price and stamp duty for Shop 68;

(3)  the initial deposit, balance of purchase price, mortgage interests, building and renovation fee, government rents and rates for No 31 Cumberland Road;

(4)  the initial and further deposits and balance of purchase price for Ho Fai Garden;

(5)  the initial deposit for Shop 21 and rental deposit received from the tenant;

(6)  the balance of purchase price and stamp duty for Shop 66; and

(7)  the balance of purchase price for Yuk Shing House.

6.  The fresh evidence, according to the plaintiff, also proves that the Deceased was the sole holder and controller of the following accounts and had made deposits into them:

(1)  HSBC bank account of Shooting Star International Limited, the sole shareholder of Yorick International Limited and the 2^nd defendant, which is the legal owner of Yuk Shing House, Ho Fai Garden and Shop 21;

(2)  HSBC bank account of Yorick International Limited, the majority shareholder of (i) the 3^rd defendant, the purchaser of Shop 40 in 2004; and (ii) Topmond Enterprise Limited, the initial purchaser of Shop 66 and Shop 42 in 2001; and

(3)  Hang Seng Bank account of Mass Profit (Hong Kong) Limited, the company the Deceased used to operate his computer business.

7.  Evidently, the plaintiff wish to adduce the fresh evidence to fill in the documentary blank found by the Judge to be fatal to their claim.

Discussion

8.  The principles for adducing fresh evidence on appeal are well‑established: see Ladd v Marshall [1954] 1 WLR 1489.  The applicant must satisfy three conditions, namely:

(1)  the evidence could not have been obtained with reasonable diligence for use in the proceedings below;

(2)  the evidence would probably have an important influence on the result of the case; and

(3)  the evidence must be apparently credible though it need not be incontrovertible.

9.  In our view, the plaintiff fails to satisfy the very first condition.

10.  It is not in dispute that all the fresh documentary evidence was in existence at the time when the trial took place and in some cases well before then.  Ms Wong in her affirmation filed in support of the present application gave detailed explanations why they were not produced before the Judge.  Ms Cindy Kong, counsel for the plaintiff for the present application but not at trial, reduced them into two primary reasons.  First, the plaintiff only had limited knowledge, capability and authority regarding the Deceased’s business and associated companies.  Second, because of their misconduct, LC had failed to advise the plaintiff of the importance of the documents.  They explicitly advised, erroneously, that the purchase of the properties had to be payments made by the Deceased directly, otherwise the evidence would be useless for the purpose of the trial.  LC further retained the documents, which they only forwarded to the plaintiff’s current solicitors subsequent to the trial.  Lastly, LC had failed to conduct the requisite land searches. After trial, the plaintiff woke up to the fact that the main issue of the trial was fund flow and even documentary proof of indirect payments made by the Deceased would have assisted their case.  It led them to make efforts to locate and eventually obtain the fresh evidence.

11.  Ms Kong made it clear that the plaintiff is not relying on LC’s alleged misconduct as a ground to satisfy the reasonable diligence test but only wished to bring such background to our attention when considering whether to exercise the discretion to allow the application.  With respect, Ms Kong’s position is rather equivocal.

12.  It is well settled that in considering the reasonable diligence test, the failure to produce evidence at trial because of legal advice or alleged incompetence of legal advisers does not constitute a special ground for admitting the fresh evidence on appeal: Chan Koon Nam v Ng Man Sum, CACV 281/2011, 5 March 2013, unreported, per Kwan JA (as she then was) at [44], citing Dr Kwong Kowk Hay v Medical Council of Hong Kong (No 2) [2007] 4 HKC 446.  In a similar vein, the reasonable diligence test is not met when the legal advisers failed to appreciate the significance of the evidence in question: see Sunny Square Ltd v Artsland Properties Investment Ltd & Ors, CACV 34 & 35/1999, 18 May 1999, unreported, per Nazareth VP at [11].  That being the legal position, we fail to see how LC’s alleged misconduct, even as background, is relevant to the exercise of our discretion.

13.  In any event, even accepting (without deciding) for present purpose that Ms Wong’s allegations about LC’s misconduct are true, what about the three counsel who had represented the plaintiff at different stages of the proceedings below, especially, trial counsel?  The plaintiff has not made any similar complaints of misconduct against them about the evidence required to prove their case.  It raises a number of important questions.  Did each of them in fact also give similar erroneous advice?  Or did they simply remain silent?  Or no counsel advice on evidence had been obtained?  If either of the above scenario is the case, why did Ms Wong not say so in her affirmation?  On the other hand, if counsel did give proper advice on the evidence required to prove their case, why did the plaintiff not act on such advice?

14.  Turning to the first reason relating to the plaintiff’s alleged difficulty in obtaining the fresh evidence for trial, we have some reservation in accepting what Ms Wong has said in her affirmation. Leaving that aside, whatever difficulties they might have in the past, the plaintiff was able to obtain or locate the documents after trial now after they had been alerted to the need to produce the requisite evidence to prove their case.  That brings us back to our earlier query about Ms Wong’s silence on counsel’s advice on evidence.  If counsel did give proper advice, the plaintiff presumably should have no difficulty in locating the evidence.  Why did they not do it?

15.  For the above reasons, there is significant evidential lacuna in the plaintiff’s case relating to the reasonable diligence test, which leads us to conclude that the plaintiff has not satisfied the test.

16.  Ms Kong sought to rely on A Solicitor v Law Society of Hong Kong [2022] 1 HKC 290 and submitted that even if the three conditions in Ladd v Marshall are not satisfied, the Court of Appeal retains a residual discretion to admit fresh evidence in exceptional circumstances when the interests of justice so required.

17.  However, A Solicitor is a public law case where the context is wholly different from an ordinary civil dispute like the present.  In any event, the exceptional circumstances that would persuade the Court of Appeal to exercise the residual discretion must, by nature, be rare. In this regard, Ms Kong referred us to (1) the substantial value of the assets in dispute; (2) the fact that the conviction of the 9^th defendant for conspiracy to steal nine cheques and HK$16 million in the Deceased’s bank account in DCCC 722/2013, which the Judge had already dealt with in his judgment; and (3) a letter by the 9^th and 10^th defendants’ solicitors demanding Ms Wong and her family to vacate No 31 Cumberland Road, their family home by end of January 2022. However, none of these matters is special enough to warrant this Court to exercise the residual discretion in the plaintiff’s favour.

18.  In consequence, we dismiss the plaintiff’s application with costs.  In their statement of costs, the 9^th and 10^th defendants ask for total costs of HK$330,305.  With respect, the costs claimed are disproportionately high.  We would only allow a total sum of HK$200,000 on summary assessment.  And we so order.