TAN KAH ENG v. TAN SECK YEOW AND ANOTHER

CACV 109/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 109 OF 2012

(ON APPEAL FROM HCA NO. 9640 OF 1999)

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REASONS FOR JUDGMENT
AND DECISION ON COSTS

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Hon Barma JA (giving the Reasons for Judgment and Decision on Costs of the Court):

1. This was an appeal against the judgment of Recorder Shieh SC dated 26 April 2012 by which he dismissed, after trial, the plaintiff’s claim for the repayment of sums totalling S$3,120,190 and HK$3,000,000 allegedly lent by him to his uncle, the late Tan Eng Khiam, during 1997 and 1998.  The action was commenced by the plaintiff against his uncle on 11 June 1999, but for various reasons did not reach trial until late November 2011.  By that time, Tan Eng Khiam had passed away, having died in 2009, and the defendants had been appointed to carry on the defence of the proceedings on behalf of his estate.  For convenience, we shall, in these Reasons for Judgment, refer (as did the Recorder in his judgment) to the late Tan Eng Kheam as “the defendant”.

2. At the conclusion of the hearing, we dismissed the appeal and indicated that we would hand down our reasons for doing so at a later date.  This we now do.  So far as costs were concerned, Mr Bruce SC (who appeared for the plaintiff) accepted that the plaintiff should bear the defendant’s estate’s costs of the appeal with a certificate for two counsel, although he resisted the application of Mr Leo Remedios (appearing for the defendant’s estate) for such costs to be taxed on the indemnity basis.  We indicated that we would make an order nisi dealing with the basis of taxation when handing down our reasons for judgment, and this is done at the end of these reasons.

3. On the face of it, these proceedings were a straightforward claim for the repayment of loans made by the plaintiff to the defendant.  According to the statement of claim, the loans were made to the defendant on six occasions, as follows:

2 October 1997	S$1,732,330
13 November 1997	S$420,000
20 December 1997	S$100,000
30 December 1997	S$567,000
17 January 1998	S$300,000
21 February 1998	HK$3,000,000

These amounts totalled the S$3,120,190 and HK$3,000,000 claimed.

4. In the statement of claim, these dates and amounts were set out in a table, with the dates appearing under the heading “Date of loan”.  However, the plaintiff’s evidence was that the sums indicated against each date were not in fact advanced on the date stated.  Instead, the plaintiff said, various amounts of money were advanced by him to the defendant (sometimes by cash payments to the defendant in various different currencies, and sometimes by Hong Kong dollar cheques) on numerous occasions between August 1997 and February 1998, with acknowledgments being signed by either the defendant, or his girlfriend, on each occasion that money was provided.  The dates and amounts pleaded in the table summarised above were not the dates and amounts of these loans as and when they were actually made, but the dates and amounts recorded on six vouchers signed by the defendant which were (according to the plaintiff) signed as a record of the receipt by the defendant of loans or advances from the plaintiff.  The plaintiff said that, from time to time, he and the defendant would total up the amounts lent since the last time a receipt was signed, convert the total into Singapore or Hong Kong dollars, and create a voucher to record the (further) amount lent up to then.  The vouchers were signed by the defendant as an acknowledgment of his indebtedness to the plaintiff.  The plaintiff said that on each occasion when a voucher was generated, he handed over to the defendant the earlier acknowledgments signed by the defendant or his girlfriend when the loans were actually made, so that the contemporaneous acknowledgments were no longer held by him.

5. The plaintiff also relied on three other documents as evidence of the loans.  These were:

(1)  A letter dated 3 May 1998, headed “Acknowledgement of Friendly Loans” addressed to the plaintiff and bearing the defendant’s signature, which acknowledged receipt of loans made by the plaintiff to the defendant on the dates and in the amounts set out in paragraph 3 above, undertaking to repay them on demand;

(2)  An undated letter, also addressed to the plaintiff and bearing the defendant’s signature, which stated that it had been signed at the Park Hotel in Hong Kong, in which the defendant acknowledged having borrowed substantial amounts from the plaintiff (without specifying the details of such borrowings), and asked for time to repay what was owed to the plaintiff; and

(3)  A letter dated 12 February 1999, also addressed to the plaintiff and bearing the defendant’s signature, in which the defendant again acknowledged an indebtedness to the plaintiff (also without specifying its details) and asked to be allowed to repay the plaintiff by instalments.

6. The defendant denied that any of the alleged loans were made to him by the plaintiff.  He also denied having signed the three letters referred to in the previous paragraph, and alleged that the signatures on the letters were forgeries.  So far as the vouchers were concerned, he agreed that he had signed vouchers that were of the same pre-printed type, bearing dates and amounts in figures that corresponded with those on the vouchers relied upon by the plaintiff in the statement of claim.  However, he said that the vouchers he had signed were different from those relied on by the plaintiff, in that those relied upon by the plaintiff had additional writing on them, which was not there when he signed them.  He also said that the reason why he signed the vouchers that he did was not to acknowledge any indebtedness to the plaintiff, but for a quite different purpose.

7. According to the defendant, when he signed the vouchers, the only markings on them, apart from the pre-printed parts, were the dates, the figures indicating the amounts, and a circle around the printed word “cash”.  Unlike the vouchers relied upon by the plaintiff, there was no indication as to the currency (whether Hong Kong or Singapore dollars) and there was no Chinese handwriting acknowledging the amounts to be loans from the plaintiff to the defendant.

8. So far as the reason for signing the vouchers was concerned, the defendant alleged that he and the plaintiff had (sometime in 1997) invested in a company called Wai Wai Private Limited (“WWPL”) with a view to doing business on the Mainland.  He said that he had given a total of about HK$2,700,000 to the plaintiff as his contribution in respect of WWPL, but that in 1998 it was agreed that WWPL should be wound up and his contribution refunded to him.  He alleged that the plaintiff had said that the vouchers had to be signed to facilitate the repatriation of his funds – calling the first five vouchers “receipts in advance” and the sixth (the one for HK$3,000,000) a “cash declaration form”. He also said that the voucher for S$1,732,330 was in respect of monies taken into China for the purchase of a property through WWPL.

9. His case was therefore that the vouchers were not intended as acknowledgments of loans to him, and that the additional writing by which the amounts were denominated in a particular currency, and by which the sums were purportedly described as loans, was added to the vouchers after he had signed them.  In support of this, he produced copies of the vouchers which matched his description of them, which appeared (apart from their lack of reference to a currency and to their being loans to the defendant) to be identical to those relied upon by the plaintiff.

10. The difference between the parties’ respective cases was therefore stark, and, as the Recorder rightly observed, there was only one issue of fact that called for determination – whether the alleged loans had in fact been made by the plaintiff to the defendant as the plaintiff claimed.

11. At the trial, a number of factual witnesses were called for each party.  The plaintiff himself gave evidence, and was cross-examined at some length.  He also called as witnesses his brother, Mr Tan Kah Hock, and a friend, Mr Tan Kim Lock.  On the defendant’s side, the defendant had, as we have noted, passed away before the trial.  However, two other witnesses, a Ms Olivia Woo and a Mr Tan Eng Yam (one of his elder brothers) gave evidence.  In addition, each side called one handwriting expert to give evidence in relation to the three letters the authenticity of which was in dispute.

12. The Recorder correctly noted that notwithstanding the absence of the defendant as a witness, it would not be appropriate simply to accept the plaintiff’s evidence at face value.  Rather, given the dispute between the parties, the plaintiff’s evidence should be tested by reference to its inherent credibility (or lack of it), and its consistency (or otherwise) with contemporaneous documentation and undisputed (or undisputable) facts.  The Recorder also noted, again correctly, that while the demeanour of a witness would also have some role to play in assessing a witness’ credibility, it should not be given too much weight, the factors previously mentioned being better guides.

13. The Recorder concluded that the plaintiff had failed to prove that the loans were actually made.  He also found that the three documents relied upon by the plaintiff were forgeries, in that the defendant’s signature on them was more likely than not placed on the documents by a process of copying genuine signatures of the defendant and pasting (by computerised means or otherwise) the copy signatures onto the documents.

14. In coming to his conclusion that the plaintiff had not advanced the loans which formed the subject matter of the proceedings, the Recorder took into account a number of factors, apart from the allegation that the vouchers were not signed as acknowledgments of loans, and that the three other letters relied upon were forgeries.  These matters (discussed between paragraphs 32 to 80 of the judgment below) included:

(1)  His assessment of the plaintiff as a wholly unconvincing and incredible witness, whose evidence he was not prepared to accept unless it was supported by contemporaneous documents or incontrovertible background facts. This assessment was reached for a number of reasons, including:

(a)  the plaintiff’s evasiveness and frequent failure to answer questions in a straightforward or relevant manner;

(b)  the plaintiff’s frequent attempts to avoid having to answer difficult questions by purporting not to read or understand English, whereas it was evident that he did in fact have at least a working knowledge of English; and

(c)  the plaintiff’s recourse to assertions that he had forgotten things in answer to many questions in order to avoid answering them, when the matters on which he was being questioned were inherently matters which he would have been expected to recollect, in contrast to the detail with which he was able to recollect other matters of less relevance or significance.

(2)  The inherent improbability of the loans having been recorded in the manner alleged by the plaintiff, since:

(a)  no reason was given as to why it should have been necessary to have the “stocktaking” of such loans from time to time;

(b)  the plaintiff’s suggestion that it was necessary to convert the loans (which were mostly extended in Hong Kong dollars or Renminbi) to Singapore dollars because both parties were Singaporean made little sense, as the plaintiff was not living in Singapore at the time; and

(c)  this suggestion also did not sit well with the fact that one of the vouchers was denominated in Hong Kong dollars.

(3)  The fact that the plaintiff’s evidence in relation to two alleged advances which he said had been advanced by cheques was inconsistent, as he had said in his witness statement that he had accompanied the plaintiff to the bank to encash the cheques, whereas he said in his oral evidence that he did not go to the bank with the plaintiff.

(4)  Further, in relation to these two advances, his explanation for not being able to produce bank statements or records to make good his allegations was unacceptable.  The plaintiff had said that he had sought such records from the bank, but was told that the records were no longer available since the bank did not keep records after seven years.  However, as the dispute between the parties had arisen within seven years of the alleged transactions, with the defendant having set out his case in pre-action correspondence, there was no good reason why the plaintiff could not have sought such records at a much earlier stage when they would presumably still have been available.  The fact that the plaintiff had been imprisoned in the Mainland from 2001 to 2006 did not excuse this failure, since the dispute between the parties had become apparent well before 2001.

(5)  The plaintiff’s financial position at the time that the loans were allegedly advanced was that he was an undischarged bankrupt in Singapore, who had disclosed no significant assets in the course of his bankruptcy.  This suggested that he was not in a position to make the loans to the defendant.  The plaintiff, however, claimed to have had substantial amounts of cash on the Mainland, and that he was owed money by others, but none of these matters were disclosed in his statement of affairs.  The plaintiff claimed that the non-disclosure was on the advice of the Official Assignee in Singapore.  The Recorder did not accept this evidence and accordingly did not accept that the plaintiff was in fact in a financial position to make the loans.  In coming to this conclusion, the Recorder considered various items of evidence that might suggest that the plaintiff in fact had some means from which to make the loans, but explained why he did not consider such evidence to be persuasive in the plaintiff’s favour.

(6)  Moreover, the plaintiff’s evidence as to how he came to have substantial amounts of cash in China was also unsatisfactory, involving as it did an assertion that such funds derived from the sale by the plaintiff’s father of two properties in Singapore for some S$4,000,000.  However, as the Recorder noted, the documentary evidence showed that the properties had in fact been sold for a total of less than S$2,000,000.  The plaintiff claimed, in the face of the records, that the properties had been sold for over S$4,000,000 and were in fact worth some S$8,000,000, but that his father had understated the amount involved in order to reduce the amount of stamp duty payable on the sale.  The Recorder was sceptical about this explanation, involving as it did a fraud on the Singapore tax authorities.

(7)  Further, the plaintiff’s evidence as to how much money he had in cash on the Mainland varied substantially on different occasions, leaving the true position in considerable doubt.

15. Having dealt with these matters, the Recorder went on to consider the genuineness of the three letters relied upon by the plaintiff (paragraphs 81 to 112 of his judgment), and concluded that they were in fact forgeries.  In coming to this conclusion, the Recorder made the following observations:

(1)  The letters were typed in English, which was inherently improbable since the plaintiff claimed not to understand English, making it unlikely that the defendant would write to him in that language.  By contrast, another loan acknowledgment (involving a loan from the defendant to the plaintiff) was in Chinese.

(2)  So far as the handwriting expert evidence was concerned, the experts were hampered by having to examine copies of the disputed letters rather than the originals.  It was not possible to determine from the copies examined whether or not the signature of the defendant on the letters had been actually placed there by the defendant signing the documents himself.  Neither expert could state definitively whether the documents represented a “cut and paste” operation whereby a genuine signature of the defendant was copied and inserted into the documents, so that the documents did not bear an original signature of the defendant placed on it by the defendant himself.  The plaintiff’s expert had not been asked to consider this possibility, but accepted in cross-examination that it could not be excluded.  The defendant’s expert expressed the view that the copies could have been the result of a “cut and paste” operation, a view which she considered was reinforced by the location of the signatures in relation to lines indicating where the document should be signed (on the first two of the disputed documents which had such lines), the tendency of the defendant (shown by the control copies) to sign in the place indicated for his signature (whereas, by contrast, in the first two documents examined, the signature was not in that location) and the quality of the copies (in relation to the third document, where the quality of the copy of the signature appeared to be noticeably poorer than that of the document generally). The Recorder took the view that there was force in the defendant’s expert’s observations, as in all but three of the control documents, the defendant’s signature appeared on the line provided to indicate where it should be placed, and in the other three it appeared against the word “signed”, which served the same purpose.  By contrast, the signature on the first two documents was some distance above the line indicating where the signature should be placed.  He also relied on the quality of the copy of the signature (which was poorer than the rest of the copy document) in the third document, which the defendant’s expert had pointed out.  The plaintiff’s expert had in fact accepted that this difference in quality indicated that the signature may have been copied more times than the rest of the document, a fact which would point to its being a copy which was placed on the document.

(3)  The Recorder also considered the plaintiff’s contentions as to the unavailability of the original documents for examination.  The plaintiff claimed to have handed over the originals of all three documents to his former solicitors, Livasiri & Co, and alleged that they had since been lost by that firm.  However, there was no contemporaneous record of his having done so, and nor was there any clear acknowledgment by Livasiri & Co that they had had possession of the originals but had lost them.  Nor was there any evidence to confirm that the originals had been inspected by the defendant’s former solicitors (Baker & McKenzie) as the plaintiff asserted  The Recorder also noted that although the plaintiff claimed to have given the originals of all three documents to Livasiri & Co, only the first two documents were listed in his List of Documents as originals, and that when the plaintiff’s new solicitors sought original documents from Livasiri & Co in 2006, they seemed only to have asked for the first, but not the second or third, of these documents.  Even as to the first document, the plaintiff’s evidence as to why he had not obtained it from the former solicitors was regarded with considerable scepticism by the Recorder.  As to the third document, the plaintiff (somewhat inconsistently) claimed in his witness statement to have lost it at an early stage, suggesting that he had never in fact given the original to Livasiri & Co.  However, despite having misgivings about the plaintiff’s story about having had the originals of all three documents, which were lost by his former solicitors, the Recorder did not ultimately make any findings as to this, on the basis that even if this were true, it would not take matters further on the issue of whether or not the defendant’s signatures were a “cut and paste” job, and in particular would not have assisted the plaintiff on this point.

(4)  However, the Recorder considered that the first document (the letter of 3 May 1998) and the third document (the 12 February 1999 letter) contained oddities which told against their genuineness:

(a)  The letter of 3 May 1998 purported to be an acknowledgment of loans by the plaintiff to the defendant on six occasions, in the amounts and on the dates of the vouchers relied upon by the plaintiff in his Statement of Claim.  However, as the Recorder noted, the plaintiff’s evidence was that the voucher dates were not in fact the dates of the actual advances, and the actual advances covered by each voucher were made on a number of different occasions in different amounts, prior to the date of the voucher.  The letter thus acknowledged loans which were in line with what was pleaded in the Statement of Claim, but not in accordance with the actual case being advanced by the plaintiff.  The Recorder regarded this as suspicious, and as providing reason to think that this letter was manufactured by the plaintiff in order to support the case he was to plead, prior to his realisation that such a case was unlikely to withstand scrutiny in the light of evidence (in the form of a copy of the defendant’s passport) to show that the defendant was not in Hong Kong on the dates of some of the supposed advances, had they been made on the dates of the vouchers.

(b)  The letter of 12 February 1999 purported to admit (in general terms) that the defendant was indebted to the plaintiff.  But as the Recorder pointed out, the defendant was by this time already engaged in correspondence with the plaintiff through lawyers over their disputed financial dealings.  Shortly after this letter, the defendant’s legal advisers wrote to the plaintiff to deny his indebtedness to the plaintiff, challenging the authenticity of the 3 May 1998 letter, and setting out the defendant’s case as to the six vouchers.  The plaintiff, however, did not refer to this 12 February 1999 letter at the time to rebut the defendant’s case.  The Recorder considered that these matters suggested that the 12 February 1999 letter, too, was not a genuine document, since it was wholly inconsistent with the defendant’s position and it was inexplicable for the plaintiff not to have relied on it in response had it been a genuine document in existence at the time.

(5)  The Recorder also had regard to two previous convictions of the plaintiff as providing evidence of a propensity on the plaintiff’s part for dishonesty.  These were a conviction in Singapore in 1992 on charges of corruption, to which the plaintiff pleaded guilty, and for which he was fined S$30,000 (the charges having been amended from an earlier charge of blackmail), and a conviction in the Mainland in 2001, for which after a successful appeal, the plaintiff was retried and sentenced to five years’ imprisonment for “contractual fraud”.

16. Finally, the Recorder considered the six vouchers relied upon by the plaintiff, and rejected the plaintiff’s case as to the circumstances in which, and the purpose for which, they were signed.  He also concluded that the Chinese words purporting to confirm that the amounts mentioned in them were loans from the plaintiff to the defendant were not there when the documents were signed, and that at least the voucher for S$1,732,330 did not have the “S$” written on it when it was signed.  He did so for three main reasons:

(1)  It seemed to him to be inherently improbable that the parties would have used documents in the format of payment vouchers for the purpose of acknowledging debts;

(2)  There was a previous IOU between the parties (although in relation to a loan from the defendant to the plaintiff) which was simply written out in Chinese, and not in the format of a payment voucher;

(3)  The fact that the voucher for $1,732,330 was for an amount which was exactly the same as the total Hong Kong dollar cost of a Mainland property purchased by the defendant supported the defendant’s case, as it would be straining credulity to accept that, purely by coincidence, the plaintiff had made a loan to the defendant in the exact same amount, but in a different currency.

17. Additionally, the Recorder had regard to all the other evidence in the case (which would include the other matters canvassed by him that led him to the conclusion that no loans had in fact been made, mentioned in paragraph 14 above, and the matters leading him to the conclusion that the three documents relied upon by the plaintiff were forgeries, set out in paragraphs 15(1), (2) and (5) above). However, he expressly ruled out reliance on the versions of the vouchers put forward by the defendant (which have been described in paragraph 7 above).

18. For all of these reasons, the Recorder did not accept that the plaintiff had extended to the defendant the loans upon which he relied in these proceedings.

19. Before us, Mr Bruce SC contended that the Recorder’s rejection of the plaintiff’s case as to the alleged loans was wrong.  The grounds for this criticism were as follows:

(1)  The Recorder was wrong to find that the three documents relied upon by the plaintiff were forgeries as:

(a)  neither expert witness was able to say that they were the product of a “cut and paste” exercise – the best that either could say was that this was possible, or that it could not be ruled out; and

(b)  the Recorder’s points about the first and third documents (summarised in paragraph 15(4) above) were not sufficient grounds for finding that the documents were forged.

(2)  Also in relation to the finding of forgery, the Recorder was wrong to conclude that there was evidence of propensity to engage in forgery or fraudulent conduct on the plaintiff’s part, since:

(a)  the Singapore conviction was stale (being over 20 years ago) and did not involve forgery or fraud;

(b)  the Recorder’s views in relation to the sale of the two properties in Singapore (which the plaintiff had relied on to show that he was in a position to make the loans) could not amount to evidence of such propensity; and

(c)  The Mainland proceedings could not amount to evidence of propensity, as the defendant’s conviction had been successfully appealed and a retrial had been ordered.  The Recorder had been wrong to speculate as to the nature of the charges and to base his conclusions on the fact that the plaintiff had spent some time in custody.

(3)  The Recorder was wrong in harbouring misgivings about the plaintiff’s evidence concerning the existence of original versions of the three documents and their having been lost by his former solicitors, especially when the first two of the documents had been described in the plaintiff’s list of documents as originals which were available for inspection.

(4)  The Recorder should not have regarded the plaintiff’s credibility as damaged by the undervaluation of the sale of his father’s properties in Singapore as there was no cogent evidence as to how the sale had been carried out, or as to any fraud on the Singapore tax authorities.

(5)  The Recorder erred in concluding that the voucher for S$1,732,330 was not for the purpose of acknowledging the loans by reference to the documentation concerning the Mainland property transaction, as the plaintiff had been unable to cross-examine the defendant as to that documentation.

20. In our view, none of these contentions have merit.  We deal with each of them below.

21. The first three complaints relate to the finding of forgery.  So far as that is concerned, it is clear from the judgment that the Recorder was well aware of the correct approach to take to the question of the standard of proof required, referring to the well known passage from Lord Nicholls’ judgment in Re H & others (Minors) (Sexual Abuse: Standard of Proof) [1996] AC 563 at 586, which he set out in paragraph 111 of the judgment below.  As appears from paragraph 112, he also had in mind the views expressed by Lord Scott in Nina Wang v Wang Din Shin [2005] 8 HKCFAR 387 at paragraph 626, where Lord Scott pointed out that apart from taking account of the inherent probability or otherwise of serious allegations of fraud or misconduct being true when considering whether or not the evidence was sufficiently cogent to establish such allegations to the necessary standard of proof, it was necessary to take account of propensity – so that what might seem inherently improbable would be less so where the person against whom the accusation was levelled had a record of involvement in the conduct alleged.  In the case of allegations of forgery, previous involvement in forgery or fraud would go into the balance, meaning that the strength of the other evidence required to make out the allegation would be less than that needed in respect of someone with no previous involvement in such conduct.  Mr Bruce did not dispute that the Recorder was right to follow the approach called for by these principles.

22. As for the criticism that it was inappropriate for the Recorder to have concluded on the basis of the expert evidence that the documents were forgeries as neither expert could say that they clearly were, this is true so far as it goes.  It was indeed the case that neither expert was able to express a categorical or firm view one way or another (although the defendant’s expert’s views appeared to show a distinct inclination towards the view that the documents were forgeries).  However, while expert evidence as to handwriting may often be of considerable assistance to a court in attempting to come to a conclusion as to whether or not a document is genuine or a forgery, it is necessary to bear in mind the limitations of such evidence, particularly where, as here, the expert witnesses were hampered by the unavailability of the original documents for examination.  The conclusion whether or not a document is forged is one that must be reached on a consideration of the totality of the evidence, both expert evidence and other evidence.  This is what the Recorder did.  He clearly recognised that neither expert could say categorically whether or not the signatures were forgeries, but had regard (as he was entitled to) to the questions raised by the placement of the signature on the first two documents, and the poor quality of the signature on the third, and also took into account the other factors mentioned by him – the inherent improbability of documents between the parties being prepared in English, the particular reasons for thinking that the first and third documents were questionable, and the evidence of propensity – in coming to his conclusion.  In our view, he was entirely justified in doing so.

23. In the same way, it seems to us that the criticism in relation to the Recorder’s reliance on the odd features of the first and third documents is also misplaced.  To our mind, they were certainly matters that called for explanation.  We were told that there was quite extensive cross-examination of the plaintiff on these points, but for reasons of which we are unaware, the transcript of such cross-examination was not obtained and put before us.  In these circumstances, it does not seem to us to be right to criticise the Recorder for forming the views that he did as to the documents without seeking to demonstrate that the evidence before him could not have supported those views.  It is clear from the Recorder’s assessment of the plaintiff as a witness that he found him to be unimpressive and unreliable.  Without the transcripts of his evidence, there is no proper basis for attacking that assessment, which clearly would have been an important factor in the Recorder’s thinking on this, and other, points.  For our part, we consider that the points made by the Recorder in paragraphs 108 and 109 of the judgment have real force, and do cast doubt on the genuineness of the documents concerned.  Without being shown the plaintiff’s evidence on these points, it is quite impossible for us say that the Recorder was not justified in concluding that these points, in conjunction with the other matters he referred to, indicated that the documents were, on the balance of probabilities, forged.

24. As for the question of propensity, Mr Bruce accepted that it was a material factor, and would operate (as indicated by Lord Scott) so as to render it possible for the court to come to a finding of forgery on the basis of evidence that might be less strong than that required where a party had no previous history of conduct of the sort alleged.  As we understood it, Mr Bruce’s complaint here was that the matters relied upon as evidence of propensity on the plaintiff’s part were not such as demonstrated a past record of involvement in dishonest or fraudulent conduct.  With respect, we disagree.  The Recorder relied on two matters in this respect – the prior convictions of the plaintiff in Singapore and on the Mainland.  He did not, so far as we can see, rely on the circumstances of the sale of the plaintiff’s father’s properties in Singapore as being evidence of propensity.

25. In our view, each of the Singaporean and Mainland convictions is evidence of dishonest or fraudulent conduct on the part of the plaintiff, and as such is evidence of propensity which should go into the balance in determining the question of forgery.  The Singapore conviction involved charges of corruption – an offence which would ordinarily be regarded as involving dishonest conduct.  As for the Mainland conviction, although Mr Bruce appeared to suggest that the retrial had not taken place (in the court below it was suggested that the retrial was “not fully conducted”), it seems clear from a Certificate of Release issued by the Mainland authorities in respect of the plaintiff that he had been convicted after retrial of contractual fraud, for which he received a sentence of 5 years’ imprisonment.  That is clearly, on the face of it, an offence involving fraud and dishonesty.  Again, we were informed that these were matters on which the plaintiff had been cross-examined at trial, but in relation to which we were not provided with the transcript of the evidence.  In those circumstances, we do not see any basis for disagreeing with the Recorder that there was in this case evidence of propensity to engage in fraudulent conduct, which should be taken into account when weighing up the evidence for and against a finding of forgery.

26. Turning to the complaint that the Recorder should not have had misgivings about the plaintiff’s evidence as to his having previously had the originals of the three documents, but that they were lost by his former solicitors, it is again the case that this was a matter that was the subject of extensive cross-examination, a record of which has not been made available to us.  But more fundamentally, it seems to us that this point does not take the plaintiff anywhere because the Recorder did not in fact take it into account, as is clear from paragraph 107 of his judgment.

27. In addition, as Mr Remedios pointed out, the many other factors identified by the Recorder as suggesting that the loans had never been made were also matters which cast doubt on the genuineness of the documents.

28. For all of these reasons, we do not think that it can be said that the Recorder was wrong to reach the conclusions that he did on the forgery issue.

29. Mr Bruce’s next complaint related to the Recorder’s assessment of the plaintiff’s credibility. It focussed on the Recorder’s consideration of the circumstances of the sale of two properties in Singapore by the plaintiff’s father.  This was a matter that had a bearing on the plaintiff’s financial capacity to make the alleged loans to the defendant.  As we have noted, the Recorder observed that the plaintiff was an undischarged bankrupt in Singapore at the time the loans were allegedly made, and had failed to disclose any significant assets in the course of his bankruptcy.  Among various explanations given by the plaintiff to suggest that he in fact had substantial funds available to him was a suggestion that he had obtained funds from the sale of these properties, and that the amount realised from the sale was substantially higher than the sale price recorded in public documents in Singapore.  The Recorder took the view that plaintiff’s evidence in relation to this matter cast further doubt on his credibility, because it was either untrue (and the amount realised was the amount publicly recorded), or it showed that the plaintiff was privy to conduct which amounted to a fraud on the Singapore tax authorities.

30. Mr Bruce contended that this was unjustified, since there was no cogent evidence of how the sales were carried out, or of the nature of any fraud on the Singapore tax authorities.  But it was the plaintiff’s own evidence that the sales were carried out at a true price that was significantly (some two to four times, depending on which version of his evidence one has regard to) higher than the recorded price.  If this was untrue, it clearly had implications for the plaintiff’s credibility and the reliability of his evidence.  On the other hand, if it were true, it would seem self-evident that the plaintiff was aware of a scheme on his father’s part to defraud the Singapore tax authorities.  While he may or may not himself have been a party to this, the fact that on his own case he was aware of it, and received a substantial share of the sale proceeds, does raise questions about the extent of his involvement.  We therefore think that the Recorder was justified in regarding the plaintiff’s evidence on this matter as something which impacted adversely on his credibility.

31. Moreover, even if (contrary to the view we have just expressed) this was not a matter that should have been held against the plaintiff, there was ample reason for the Recorder to have had serious reservations about the plaintiff as a witness, having regard to the many other unsatisfactory aspects of his evidence which were identified by the Recorder.

32. Mr Bruce’s final point relates to the Recorder’s conclusion that the voucher for S$1,732,330 was not for the purpose of acknowledging the loans.  He contended that in the absence of cross-examination of the defendant about the supposed Chinese property transaction, the Recorder should not have relied on this material. However, the Recorder was well aware of the fact that the defendant was not available to be cross-examined, but considered that having regard to the matters canvassed by him in paragraph 121 of the judgment, it was open to him to conclude that the vouchers were not created for the purpose alleged by the plaintiff.  The coincidence in numbers was but one of these matters.  We are therefore not persuaded that there is any substance to this point either.

33. Further, we think that Mr Remedios was right to point out that there were many other matters on which the Recorder formed views adverse to the plaintiff, to which no challenge had been made.  The complaints raised in this appeal have focussed on specific aspects of the Recorder’s reasoning, and have not had sufficient regard to the totality of the many reasons which the Recorder took into account in coming to the conclusion that the plaintiff had failed to satisfy him that loans had in fact been made to the defendant as claimed.

34. For all of the foregoing reasons, we considered that the appeal was without merit, and accordingly dismissed it.

35. So far as costs are concerned, it will be clear from the reasons which we have given that the appeal was entirely unmeritorious.  In these circumstances, we think that it would be right to make an order nisi that the costs of the appeal, which we ordered should be paid by the plaintiff to the defendant, with certificate for two counsel, should be taxed on the indemnity basis.