NG KWOK PIU PHILIP AND OTHERS v. TO PUI KUI AND OTHERS

CACV 21/2016, CACV 24-29/2016
(Heard Together)
[2021] HKCA 106

CACV 21/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 21 OF 2016

(ON APPEAL FROM HCA NO 51 OF 2007, HCA NO 1040 OF 2009 AND HCA NO 1041 OF 2009)

________________________

HCA 51/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 51 OF 2007

________________________

________________________

AND

HCA 1040/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1040 OF 2009

________________________

________________________

AND

HCA 1041/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1041 OF 2009

________________________

________________________

(HEARD TOGETHER)

AND

CACV 24 & 25/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 24 OF 2016 AND NO 25 OF 2016

(ON APPEAL FROM HCA NO 51 OF 2007)

________________________

________________________

AND

CACV 26 & 28/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 26 OF 2016 AND NO 28 OF 2016

(ON APPEAL FROM HCA NO 1040 OF 2009)

________________________

________________________

AND

CACV 27 & 29/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 27 OF 2016 AND NO 29 OF 2016

(ON APPEAL FROM HCA NO 1041 OF 2009)

________________________

________________________

(HEARD TOGETHER)

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J U D G M E N T

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Hon Yuen JA (giving the Judgment of the Court):

Background

1.  On 31 August 2020, this court handed down a Judgment (“the Judgment”) in 7 appeals from M Chan J (“the judge”) arising out of 3 sets of legal proceedings¹ involving members of a family and companies controlled by the deceased family patriarch (referred to as “Father” in the judge’s judgment and this court’s Judgment).

2.  There were 6 main grounds of appeal²:

(1)  the judge wrongly thought that Father’s signatures on the restructuring documents had been held to be genuine in HCA523, when that case dealt only with the allotment of CAGL shares to him and his transfer of those shares;

(2)  the persuasive burden should not have been on the appellants;

(3)  the judge erred in finding that the signatures of the appellants on the restructuring documents were genuine;

(4)  the judge erred in finding Eleanor³ had signed the subject documents without reading the contents, as that was not pleaded by the Philip Group⁴ and was not suggested to the parties during trial;

(5)  the signatures on the attendance lists were insufficient to prove consent;

(6)  as the judge had found that Eleanor might not have read the contents of the documents she signed for the restructuring, she could not have approved them, and so the Duomatic⁵ principle could not apply.

3.  For reasons set out in the Judgment, all the appeals were dismissed with costs.

Appellants’ applications for leave to appeal to the Court of Final Appeal

4.1.  On 28 September 2020, Notices of Motion (“N/Ms”) for leave to appeal to the Court of Final Appeal were filed by all the appellants.

4.2.  The challenge in all the N/Ms was to this Court’s judgment relating to grounds (5) and (6), i.e. [50] - [57], and [58] - [62] in which it was held, in summary, that the appellants’ signatures on the relevant documents signified their assent, they had not alleged or proved any vitiating factors such as fraud, mistake, etc.⁶, and the fact that Eleanor was happy to sign documents in order to comply with Father’s wishes, without bringing an independent mind to bear on the contents, did not invalidate her assent as required for the application of the Duomatic principle. 

4.3.  The following questions (in more or less the same language in each of the N/Ms) are said to be ones of great or general or public importance, or which otherwise, ought to be submitted to the CFA:

“How the principle/case of Ming Shu Chung & Ors v Ming Shiu Sum & Ors ... is applicable in the context of the Duomatic Principle under the company law? viz.

(a) whether ‘full’ knowledge or ‘informed’ assent is an essential requirement of the Duomatic Principle? Especially when the effect is to affect the substantive rights of the parties? Or

(b)  merely signing a document without knowing the contents and/or effect and/or without being aware or heard of the subject matter of a document (Ming Shiu Chung) is sufficient to invoke the Duomatic Principle?”

Discussion

5.  Although expressed in different forms, the substance of both questions is the same, so it will be treated as one question. 

6.1.  The appellants have provided written submissions referring, amongst others, to a number of cases which had not been cited to this court at the hearing of the appeals.  Be that as it may, that is not material, because the question posed above (howsoever worded) was not engaged. 

6.2.  Nowhere in the Judgment was it suggested that full knowledge or informed consent was not an essential requirement of the Duomatic principle.  The issue was whether, despite the assent apparently shown by Eleanor’s signatures, the inference made by the judge that she had not read the documents before signing them vitiated it such that the Duomatic principle did not apply.

6.3.  It is clear from the Judgment that:

(a)  the judge was entitled to find on the overall evidence that (contrary to Eleanor’s case that her signatures were forged), she did in fact sign the documents⁷;

(b)  the judge “did not consider that [Eleanor] had lied or made up evidence” but the judge was entitled to find on the overall evidence that, although Eleanor was honest, her evidence was not reliable⁸;

(c)  even though the judge found it was probable that Eleanor might not have read the entire contents of the documents when they were given to her to sign, and had simply put her signature to the documents she was told to sign⁹, the requirements of the Duomatic principle were still satisfied because the overall evidence showed that even on Eleanor’s own case¹⁰, Father controlled the family companies, and she had always deferred to him and complied with his instructions regarding them. 

6.4.  It was not this court’s decision that the Duomatic principle was satisfied solely by Eleanor’s signature despite the judge’s finding that it was probable that she might not have read the documents.  If that had been this court’s decision, the following crucial passage at [62] of the Judgment would not have been necessary:

“What the judge found was that it was probable that because of Eleanor’s and Angela’s attitude that the companies were controlled by the Father whom they respected and trusted, they were happy to sign documents to comply with his wishes without bringing an independent mind to bear on the contents. But this attitude does not lead to the conclusion that they had not signified their consent by their signatures. On the contrary, a person who defers to another’s wishes, and who signs a document in fulfilment of those wishes, obviously consents to it. It is no different from approval given in advance [referring to EIC¹¹ at para.122] for whatever course the Father decides to take for the companies. Such approval is binding”. (Emphasis added).

6.5.  Put another way¹², Eleanor was voluntarily relying on the judgment of her father (who founded and throughout controlled the family companies) in giving her assent.  Such an assent is not the less a true assent.   

7.  Accordingly, the question posed in the N/Ms (irrespective of whether great general or public importance is raised thereby) was not engaged.  That being the case, s.22(1)(b) of the Hong Kong Court of Final Appeal Ordinance Cap. 484 is not satisfied. 

8.  As for the appellants’ reliance on the “or otherwise” ground, the practice of this court is to leave this to the CFA, and no exceptional circumstances have been shown why this practice should be departed from¹³.

Order

9.  The Notices of Motion are dismissed with an order that the appellants pay the respondents’ costs.  Having examined the statements of costs of all the parties, it is ordered by way of summary assessment under Order 62 rule 9A of the Rules of the High Court that the appellants pay the respondents $375,000 which liability shall be joint and several.