HUI CHI MING v. KOON WING YEE

HCA 1479/2009

[2023] HKCFI 93

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1479 OF 2009

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JUDGMENT

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INTRODUCTION

1.  The facts of the present case can be filmed and put on screen as they are both dramatic and extraordinary.

2.  The Plaintiff, Mr Hui Chi Ming (“Mr Hui”), an ex-chairman and the former majority shareholder of a Hong Kong listed company, Sino Union Petroleum & Chemical International Limited (“Sino Union”), says that on a day in mid to end of March 2009, a gang of triad society members led by the 4^th Defendant, nicknamed “大圈尻Dee”, turned up in his office uninvited, on the instructions of the 1^st Defendant, Mr Koon Wing Yee (“Mr Koon”) and threatened and blackmailed him. Under threats to his personal life and his family’s safety, by reason of duress, coercion and intimidation on the part of Mr Koon and his agents, namely, “大圈尻Dee” and his gang, Mr Hui transferred 100 million shares of Sino Union (the “Shares”) (via one Zhou Aiguo (“Mr Zhou”) from whom Mr Hui borrowed the Shares) to the 3^rd Defendant as the nominee of Mr Koon on 26 March 2009 for no consideration (the “Transfer”). There is no dispute that the 3^rd Defendant was the nominee of Mr Koon and there is no consideration for the said transfer of the Shares. Mr Hui, thus, claims for the return of the Shares and/or the sale proceeds thereof and/or loss and damages caused by the Transfer.

3.  Mr Koon’s case is that he could not possibly have turned up at Mr Hui’s office out of the blue and sent gangsters to demand the Transfer. What actually happened was that Mr Hui was interested in boosting and/or maintaining the share price of Sino Union. Thus, on 27 December 2007, Mr Hui and Mr Koon entered into an oral agreement that in consideration of Mr Koon’s purchase of Sino Union’s shares up to a total value of HK$200 million (including what Mr Koon had already bought in the market), Mr Hui would give or gift a further 250 million shares of Sino Union to Mr Koon (the “Oral Agreement”). Mr Koon refines his pleaded case in this action to spending up to HK$200 million instead of purchasing shares up to the value of HK$200 million. Mr Koon claims that, by March 2009, Mr Hui had already transferred 50.7 million to him via third parties (the details will be addressed below). Hence, the Transfer was part consideration for his full performance of the Oral Agreement. He denies that he was involved in any coercion, duress or intimidation which caused the Transfer. He also said that “大圈尻Dee” was only a business acquaintance and he did not know about his background. Pursuant to the Oral Agreement, Mr Koon also counterclaims against Mr Hui for 99,930,000 shares of Sino Union, the remaining balance of the 250 million consideration shares.

4.  In Mr Koon’s opening, Mr Chain strongly relied on the fact that 50.7 million Sino Union shares were arranged by Mr Hui to be transferred to Mr Koon’s nominees. It was submitted that but for the Oral Agreement, there was no conceivable reason for such transfers. Moreover, it is undisputed that Mr Koon spent at least HK$200 million in acquiring the shares of Sino Union. The Oral Agreement is the only plausible explanation for Mr Koon’s investment in such third-tier or fourth-tier shares in the market. Furthermore, it is against common sense for Mr Koon to have suddenly turned up on a day in March 2009 and demanded Mr Hui to make the Transfer. Context is everything, Mr Chain submitted. An important context here is the Oral Agreement. The Oral Agreement does not exist in a vacuum by itself.

5.  Mr Fung SC on behalf of Mr Hui submitted that the Oral Agreement is a fabrication by Mr Koon. The allegation of the Oral Agreement came very late, about 5 to 6 years after the commencement of the present action by Mr Hui. The terms of the Oral Agreement does not make any common and commercial sense. Further, there is not an iota of written record, contemporaneous documents or electronic footprints of the Oral Agreement. For a transaction of such scale, it is incredible that there is no trace of the Oral Agreement in any form, other than Mr Koon’s bare allegation. It was stressed that Mr Hui had the habit of documenting every transaction in detail the absence of which shows that the Oral Agreement is nothing but a concoction by Mr Koon.

6.  Mr Koon himself repeatedly stressed the point that Mr Hui failed to call many essential witnesses, including Mr Xie Xinhua (“Xie”) and Guo Weihua (“Guo”) who were Mr Hui’s nominees and transferred 50.7 million Sino Union shares to Mr Koon’s nominees. Mr Koon repeatedly called them “invisible witnesses”.

7.  Mr Koon also relied heavily on the point that he was acquitted in the criminal trial against him and Mr Hui’s evidence was not accepted by the jury. Having said that, Mr Chain for Mr Koon fairly agreed that the standard of proof in the present trial is different from the criminal trial. I agree that the acquittal itself is of limited weight but Mr Koon can certainly rely on what Mr Hui said under oath during the criminal trial.

8.  Mr Chain is also right that the one essential disputed fact is the existence of the Oral Agreement as to which Mr Koon carries the burden of proof. On the other hand, Mr Hui carries the burden to prove the existence of duress, coercion and intimidation, as a result of which Mr Hui transferred the Shares to the 3^rd Defendant as nominee for Mr Koon. The evidence of both parties on these critical issues is diametrically opposite.

9.  Another comparatively minor disputed fact is whether the payment of HK$1.5 million by Mr Koon to Mr Hui was the result of duress, coercion and intimidation by Shanghai Boy上海仔, another triad society member, said to be engaged by Mr Hui to intimidate Mr Koon.

10.  The Plaintiff’s claims against the 2^nd Defendant, Ng Chi Keung (“Mr Ng”), the 3^rd Defendant and the 4^th Defendant have all been settled.

THE PLAINTIFF’S CASE

11.  The Plaintiff’s case is that by 1 March 2009, Mr Koon, a business acquaintance, had suffered a very substantial loss in trading Sino Union shares resulting in a realised net loss of just under HK$80 million, specifically HK$79,366,901.92, according to the table prepared by Mr Koon himself and adduced in evidence at trial.

12.  On the morning of 1 March 2009, Mr Koon turned up uninvited at Mr Hui’s office (“Mr Hui’s Office”) and demanded that Mr Hui give him, by way of compensation for his aforesaid loss, 100 million Sino Union shares which were last trading at HK$0.77 as of 25 February 2009 (being the last trading day before 1 March 2009) as appeared from Yahoo Finance and agreed by the parties.

13.  Mr Hui rejected such demand on the basis that he bore no liability for Mr Koon’s trading loss.

14.  Then, one afternoon around mid-to-late March 2009, two strangers (one of whom being “大圈尻Dee”) turned up uninvited at Mr Hui’s Office and told Mr Hui in the office conference room that they were there on behalf of Mr Koon to collect 100 million shares from Mr Hui.

15.  “大圈尻Dee” warned Mr Hui in a very loud and aggressive manner not to report the matter to the police; otherwise he would burn down Mr Hui’s Office.

16.  The other stranger left the conference room and returned minutes later with another 7-8 men whom he had let in through the office main entrance.

17.  The gang of some 9-10 men then forcefully threw down their backpacks on the conference room table making a loud clatter, revealing the presence of metal implements inside the backpacks.

18.  “大圈尻Dee” warned Mr Hui that he had 3 days to make all necessary arrangement for the transfer of the 100 million shares, failing which they would not treat Mr Hui with courtesy. “大圈尻Dee” and the gang left thereafter.

19.  Mr Koon turned up at Mr Hui’s Office the following afternoon accompanied by Mr Ng Chi Keung, the 2^nd Defendant (“Mr Ng”) who was at all material times a licensed stockbroker and was the director and majority shareholder of Cheer Union Securities Limited (“Cheer Union”) whereupon:

(1)  Mr Koon told Mr Hui that “大圈尻Dee” had also invested in the shares of Sino Union and suffered loss.

(2)  Mr Koon reiterated that should Mr Hui refuse to hand over the 100 million shares, Mr Hui would suffer serious bodily harm including being killed by the gang of “大圈尻Dee”.

(3)  Mr Ng specifically informed Mr Hui that “大圈尻Dee” was a subordinate of Cheung Tze Keung, the notorious triad serial kidnapper of Victor Lee (the elder son of Lee Ka Shing) and Walter Kwok (the eldest son of the Sun Hung Kai property development dynasty).

20.  On the same occasion, in order to induce Mr Hui to yield more readily to Mr Koon’s duress, coercion and intimidation:-

(1)  Mr Koon told Mr Hui that he would not dispose of the 100 million shares of Sino Union for three months.

(2)  Mr Ng told Mr Hui that he would act as guarantor for Mr Koon’s observance of this lockup period.

(3)  Mr Koon told Mr Hui that the 3^rd Defendant would be his nominee to receive the 100 million shares from Mr Hui.

(4)  Mr Koon stressed that Mr Hui should immediately arrange for the transfer of the 100 million shares, or else Mr Hui’s life would be endangered or Mr Hui would at the very least suffer grievous bodily harm.

(5)  Mr Koon told Mr Hui that he would come the next day to complete the formalities.

21.  Under such duress, coercion and intimidation, Mr Hui yielded to Mr Koon’s demand for the 100 million shares.

22.  In the same afternoon following the conclusion of the above meeting, Mr Hui telephoned Mr Zhou, a substantial shareholder in Sino Union, requesting to borrow from him 100 million shares on an urgent basis in consideration of payment to Mr Zhou of HK$135 million.

23.  Mr Zhou agreed and attended Mr Hui’s Office the next day to implement the share transfer by executing a tripartite share purchase agreement (the “Share Purchase Agreement”) prepared by Mr Ng with Mr Zhou as transferor, the 3^rd Defendant as transferee and Mr Ng as guarantor.

24.  Following the execution of the Share Purchase Agreement, Mr Zhou transferred in late March 2009 to the 3^rd Defendant the 100 million shares but received no payment, let alone HK$135 million, in return.

25.  In the afternoon of 2 April 2009, Mr Hui received a cry for help by phone from Mr Zhou in Shenzhen complaining that he was surrounded in a coffee shop by a gang of 5-6 hostile men led by Mr Ng and was not allowed to leave the coffee shop unless he signed an acknowledgement of receipt purporting to acknowledge, falsely, that he, Mr Zhou, had been paid HK$135 million for the transfer of the 100 million shares.

26.  To avoid harm befalling Mr Zhou, Mr Hui advised Mr Zhou to sign the acknowledgment of receipt whereupon Mr Zhou did so and left the coffee shop.

27.  On 3 April 2009, following the handover of the 100 million shares, Mr Koon invited Mr Hui to meet him for lunch at the Macau Jockey Club where, in the presence of Mr Ng who was also in attendance, Mr Koon told Mr Hui that he would pay Mr Hui HK$1.5 million tea money as a token of appreciation and gratitude for such handover with apologies for any inconvenience caused to Mr Hui.

28.  Later that same afternoon, Mr Hui discovered that Mr Ng had left in Mr Hui’s Office directly above and in the same building as the Macau Jockey Club a paper bag containing HK$1.5 million cash.

29.  On 13 May 2009, Mr Hui reported the blackmail to the Hong Kong Police. Mr Hui confirmed the above under oath in his testimony for the prosecution in the criminal trial of the Defendants herein and one Mr Shum Man Keung, nicknamed Wu Tsz胡子.  Mr. Hui, whose evidence remained unchallenged throughout, testified that:-

“因為呢個係我冇收據，若果我唔誠實嘅話，我可以唔講嘅，冇依據嘅。”

30.  Mr Hui further testified that he was subjected to further intimidation and coercion following the handing over of yet another 100 million shares of Sino Union.

31.  On 24 April 2009, Mr Koon together with other men went to Mr Hui’s Office unannounced, demanding to see Mr Hui, but on being told that Mr Hui was not in the office but travelling overseas, Mr Koon and his party left. Mr Hui was at the time in Indonesia.

32.  On the night of 24 April 2009, “大圈尻Dee” telephoned Mr Hui in Indonesia to explain that the 100 million shares which Mr Hui had already delivered was insufficient such that he must hand over another 100 million shares.

33.  In the afternoon of the following day on 25 April 2009, “大圈尻Dee” telephoned Mr Hui again to demand that Mr Hui follow Mr Koon’s instructions or else Mr Hui would be in deep trouble.

34.  On 28 April 2009, after Mr Hui had returned to Hong Kong, Mr Ng telephoned Mr Hui demanding that the latter attend a lunch meeting on the following day at the Kimberly Hotel with Mr Koon and Mr Ng, failing which “大圈尻Dee” and his gang would harm Mr Hui and his family.

35.  On 29 April 2009, Mr Hui went alone to the Kimberly Hotel at or around 1 pm.

36.  On arrival and on being shown into a large VIP room of the Chinese restaurant in the Kimberly Hotel, Mr Hui saw Mr Koon, Mr Ng, “大圈尻Dee” inside together with a gang of men none of whom he recognised.

37.  “大圈尻Dee” asked Mr Hui whether he was ready (“一切準備就緒沒有”).

38.  “大圈尻Dee” thereupon told Mr Koon, Mr Ng and Mr Hui to adjourn to a smaller room adjacent to the VIP room to discuss next steps (“相量應該怎樣做”).

39.  Inside this smaller room, Mr Koon told Mr Hui in the presence of Mr Ng that “大圈尻Dee” and his gang next door in the VIP room were extremely troublesome (“十分麻煩”) but the matter had to be settled (“事情總要解決”) and so demanded that Mr Hui hand over 50 million in cash or shares of equivalent value to settle such matter.

40.  Mr Koon further told Mr Hui that “大圈尻Dee” and his gang possessed firearms and that if Mr Hui did not comply with the wishes of “大圈尻Dee”, they would eliminate Mr Hui from the face of the earth (“黃先生一夥人有槍有炮, 若然本人不遵照黃先生的意思行事, 他們將會滅了本人及令本人在地球上消失”).

41.  Following such intimidation and coercion, Mr Hui acceded to Mr Koon’s demand. Mr Koon, Mr Ng and Mr Hui then returned to the VIP room.

42.  Upon returning to the VIP room, “大圈尻Dee” introduced Mr Hui to a gang member present known as Wu Tsz 胡子whom “大圈尻Dee” described as prominent and unafraid of death (“鼎鼎有名的胡子, 胡子是不怕死的”).

43.  Mr Ng elaborated to Mr Hui that Wu Tsz 胡子was a very famous triad member who had once served a sentence of imprisonment exceeding ten years (“胡子是非常有名的三合會成員, 曾經在監獄裡渡過10年多”).

44.  Wu Tsz 胡子then pronounced Mr Hui to be unusually lucky, since the latter’s dialogue with Mr Koon had proceeded most happily, or else Wu Tsz 胡子would have to serve Mr Hui “pig’s knuckles”, meaning that Mr Hui would be killed (“胡子說本人非常幸運, 因為本人與官先生的對話非常愉快, 否則本人就需要吃豬腳, 意思即是本人不和他們合作的話, 本人將會被槍殺”).

45.  On 30 April 2009, at noon, while Mr Hui was out of town, a few men showed up at Mr Hui’s Office waving placards and posters inscribed with intimidating threats (“寫有恐嚇字句之海報及咭紙”).

46.  In the same afternoon, Mr Hui who was then in Shenzhen was followed by several strangers one of whom warned Mr Hui not to be so arrogant (“本人發現自己被數個陌生人跟蹤. 其中一名告訴本人: ‘唔好咁寸’”).

47.  That same evening, “大圈尻Dee” telephoned Mr Hui demanding that he deliver the shares to him, failing which they would kidnap Mr Hui, take him to the high seas, cut his back with a knife and throw him overboard to feed the sharks (“黃生致電給本人, 要求本人儘快交出股票, 否則他們會挾本人到公海, 在本人背上劃幾刀後, 拋本人到海裡餵鯊魚”).

48.  On 10 May 2009, in the afternoon, “大圈尻Dee” telephoned Mr Hui asking him whether he knew a Mr Yeung also known as Fei Lo Kwong 肥佬光. He told Mr Hui that Fei Lo Kwong肥佬光was his big brother and that he had heard that Mr Hui knew a person in Beijing known as Brother Sung 宋大哥. He then suggested to Mr Hui that the two of them get together with Fei Lo Kwong肥佬光and Brother Sung宋大哥to discuss an amicable solution to resolve the matter. (“在2009年5月10日下午時分, 黃先生致電給本人, 詢間本人是否識一名叫楊光先生, 外號肥佬光的人士. 黃先生說肥佬光是他的大哥, 黃先生亦告訴本人, 他聽說本人認識他另一位北京朋友叫宋大哥. 黃先生說本人可以在肥佬光及宋大哥的陪同下找他, 大家一同談判及友好地解決問題”).

49.  Shortly thereafter, Brother Sung宋大哥telephoned Mr Hui to say that he had known Mr Hui for a long time; he was very close to “大圈尻Dee”; and he had known Fei Lo Kwong 肥佬光for more than ten years.  (“宋大哥就致電給本人, 謂他與黃先生十分親近, 而宋大哥認識本人已有很長的時間, 而他也認識肥佬光十餘年.”)

50.  After assuring Mr Hui that he would guarantee the latter’s safety, Brother Sung 宋大哥asked Mr Hui to go to the café on the 4/F of the Royal Garden Hotel in Tsim Sha Tsui East for a discussion at 4 pm that same day (“宋大哥說他可以擔保本人的人身安全, 宋大哥要求本人, 在大概4時到尖沙嘴帝苑酒店4樓的咖啡室談判”).

51.  Proceeding on the assurance that Brother Sung宋大哥 would be there to protect him, Mr Hui went to the café on the 4/F of the Royal Garden Hotel at 4 pm and there met “大圈尻Dee”, Wu Tsz 胡子, Brother Sung 宋大哥 and Fei Lo Kwong 肥佬光.

52.  “大圈尻Dee” kicked off the discussion by declaring that, for the sake of everyone’s convenience, the simplest way to resolve the matter would be for Mr Hui as chairman of Sino Union to print out the shares which they required as well as an extra few hundred million shares for “大圈尻Dee” where after “大圈尻Dee” and Mr Hui would become good friends (“黃先生首先開腔講話, 謂為了大家方便, 最簡單直接解決事情的方法, 是本人以上市公司主席的身份, 把他們需要的股票打印出來, 本人更可以多打印幾億股票給他, 那麼我們便能成為好朋友”).

53.  Brother Sung宋大哥and Fei Lo Kwong肥佬光told “大圈尻Dee” that since both Mr Hui and “大圈尻Dee” were their good friends, Mr Hui and “大圈尻Dee” should take the time slowly to discuss and find a solution and that, in addition, Mr Hui should meet “大圈尻Dee” alone to discuss the solution (“宋大哥及肥佬光告訴黃先生, 本人及黃先生都是他們的好朋友, 我們應該慢慢討論以尋求解決方案, 他們並提議本人單獨與黃先生商討解決辦法”).

54.  “大圈尻Dee” thereupon guided Mr Hui to a sofa in the corridor on the 1/F of the hotel where “大圈尻Dee” said that whereas he had originally required only 100 million shares, now that he “大圈尻Dee” had to enlist the assistance of two big brothers Brother Sung 宋大哥and Fei Lo Kwong 肥佬光to settle the matter, he “大圈尻Dee” now required an extra 200 million shares, that is, 300 million shares in total, before Mr Hui could become friends with “大圈尻Dee” (“黃先生說由於宋大哥及肥佬光兩個都是大哥, 本來他只需要本人交出100,000,000股票, 可是現在需要動用到兩位大哥的共同努力去擺平事件, 他需要額外的200,000,000股票. 所以本人需要交出共300,000,000股票以成為黃先生的朋友”).

55.  “大圈尻Dee” warned Mr Hui that if he further delayed in the delivery of the shares, “大圈尻Dee” would lose his temper (“如果本人再拖延下去, 他的脾氣不會那麼好”).

56.  At the same time, “大圈尻Dee” revealed to Mr Hui a pistol-like object under his jacket and told Mr Hui that his pistol might be fired if he was angry (“黃先生當時曾故意顯露在他外套下一支類似槍械的物體, 並告訴本人他的槍, 有時候會在他生氣時走火”).

57.  “大圈尻Dee” thereupon returned with Mr Hui to the café on the 4/F of the hotel where they found only Brother Sung宋大哥who took them to the bar on the 5/F of the hotel where Wu Tsz 胡子and Fei Lo Kwong肥佬光were located.

58.  Wu Tsz 胡子told Mr Hui that he had many firearms and said that Mr Hui was extremely wealthy and earned a lot whereas they earned a little, and that should Mr Hui cooperate, everyone would be happy (“胡子告訴本人他有很多槍械, 並說你就有大把錢, 其實你賺大錢, 我哋賺少錢, 你合作就大家開心’”).

59.  Wu Tsz 胡子further declared that they were unafraid of death and that on the earlier occasion at the Kimberly Hotel, they had brought along 6-7 firearms (“我哋係唔怕死嘅. 果日喺君怡酒店, 我哋都帶咗6-7支搶去架”).

60.  Mr Hui requested Fei Lo Kwong 肥佬光to plead for him to get a discount, but Fei Lo Kwong 肥佬光merely replied that Mr Hui and “大圈尻Dee” needed to resolve the matter among themselves (“本人要求肥佬光幫忙求情減價, 接著肥佬光告訴事情需要靠我們自己解決”).

61.  “大圈尻Dee” proposed continuing this discussion after dinner (“黃先生建議我們可在飯後繼續討”).

62.  Mr Hui pretended to agree to this proposal but thereafter left the hotel by all possible means (“本人假裝同意黃先生的提議, 及後設法離開帝苑酒店”).

63.  Mr Hui testified in cross-examination that it was during the above exchanges that he became very disappointed and realised that Brother Sung宋大哥and Fei Lo Kwong肥佬光were unable or unwilling to help protect him or secure for him any justice.

64.  In the early hours of 11 May 2009, Brother Sung 宋大哥telephoned Mr Hui telling him that “大圈尻Dee” had agreed to reduce his demand to 220 million shares.  Mr Hui rejected this demand.  Brother Sung 宋大哥then told Mr Hui to take care of himself and to be careful in handling this situation before hanging up (“在2009年5月11日凌晨, 宋大哥致電本人, 謂黃先生同意減價至220,000,000股票, 本人向其表示不會接受. 之後, 宋大哥告訴本人要照顧自己, 小心應對這種情況”).

65.  At about 11 am later that same morning being 11 May 2009:-

(1)  A group of masked individuals turned up at the front entrance of Mr Hui’s Office carrying placards displaying Mr Hui’s photograph with threats inscribed thereon and taking photographs and video-taping the event (“一群帶著口罩的人, 手持有本人相片及寫有恐嚇字句紙牌, 正在公司門口錄影同拍照”);

(2)  One of them told Mr Hui’s Office staff that if Mr Hui still refused to contact “大圈尻Dee”, much high drama would follow (“同時有人對公司職員說, 若然本人仍然不與黃先生聯絡, 到時將會有很多好戲上演”).

66.  In the afternoon of the same day being 11 May 2009, Mr Hui who was then in Shenzhen was again followed by strangers.  By that time, Mr Hui felt that even if he were to accede to the demands of “大圈尻Dee”, there would be no guarantee of no further intimidation or that Mr Hui would be spared from harm in the future (“2009年5月11日下午時份，本人在深圳再次被人跟蹤。那時候，本人意識到即使本人今次遵照他們的要求去辦，也難以確保眾被告人在將來不會再勒索及傷害本人”).

67.  Accordingly, Mr Hui resolved to report the matter to the Security Bureau of Shenzhen Municipality, which he did at 9 pm that same evening (“因此，本人決定在當晚9時到深圳市公安局正式報案”).

68.  Over the following two days being 12 May 2009 and 13 May 2009:-

(1)  Again, a group of masked individuals sat down at the front entrance of Mr Hui’s Office carrying placards displaying Mr Hui’s photograph with threats inscribed thereon and taking photographs (“在2009年5月12日及5月13日期間，本人的秘書向本人報告，有戴著口罩的人手持貼有本人相片及寫有恐嚇字句字牌，坐在公司門口展示及拍照”).

(2)  Mr Hui’s Office staff also received telephone calls demanding that Mr Hui resolve the problem with “大圈尻Dee” or else Mr Hui would have to bear the consequences (“公司職員亦收到電話，內容是要求本人與黃先生解決問題，否則後果自負”).

69.  On the morning of 13 May 2009, “大圈尻Dee” telephoned Mr Hui twice:-

(1)  Demanding that Mr Hui deliver the shares to him within two days, failing which his gang would inflict bodily harm on Mr Hui and his family members, an outcome that not even he “大圈尻Dee” would be able to control (“在5月13日上午，黃先生曾致電兩次給本人，要求本人在兩日之內交出股票，否則他的同黨會對本人及本人的家人造成人身傷害，黃先生說他自己也不能控制這件事情發生”); and

(2)  Declaring that he would bad-mouth Mr Hui to the media in Hong Kong and would also do so by distributing pamphlets on the street and displaying banners in the MTR (“另外，黃先生亦聲稱會在全港向媒體發報本人的壞話、在街道上派發傳單及在港鐵張掛橫額”).

70.  In the afternoon of the same day on 13 May 2009, Mr Hui reported the matter to the Hong Kong Police.

71.  Mr Fung SC for Mr Hui submitted that Mr Hui was never challenged, by way of cross-examination, on any of his evidence, set out in paragraphs 45 to 69 above.

72.  On 14 May 2009, the Hong Kong Police set up a command centre in the City Garden Hotel in North Point where they asked Mr Hui to stay for his personal safety and protection as well as for better communication with Mr Hui in pursuit of their investigation including tape-recording Mr Hui’s conversations with Mr Koon, Mr Ng, “大圈尻Dee” and his gang.

73.  On the same day being a Thursday:

(1)  Brother Sung宋大哥telephoned Mr Hui on the morning to suggest lunch at the Macau Jockey Club;

(2)  At around 1 pm, Mr Hui went to the Macau Jockey Club carrying on his person a hidden tape recorder and accompanied by his assistant Cui 崔;

(3)  Mr Hui tape-recorded his lunch conversation with Brother Sung 宋大哥 covertly without the latter’s knowledge.

74.  Over lunch, Brother Sung 宋大哥told Mr Hui that the matter must be resolved before noon, the following day being a Friday, whereafter Mr Hui would return with Brother Sung 宋大哥to Beijing over the weekend to take a rest (“星期五啊, 中午以前把這事了了, 你週末你跟我回北京, 咱們休息休息”).

75.  Mr Hui complained that Mr Koon’s demands were wholly excessive in that, having received 100 million shares, another demand was made for another 100 million shares (“這確實是他媽的太過份了, 原來他們說收一億, 拿了一億, 再加一億, 了不起再加一億”). Brother Sung 宋大哥concluded by saying that he would arrange for Mr Hui to meet with them at noon the next day (“那我就跟他們約明天中午”).

76.  Brother Sung 宋大哥had arranged for such meeting to take place the following lunchtime at the Chinese restaurant in the Kowloon Shangri-la Hotel.

77.  Later that same afternoon at 5 pm:-

(1)  Mr Hui who had by then returned to the Police Command Centre at City Garden Hotel in North Point received a phone call from Fei Lo Kwong肥佬光;

(2)  This telephone conversation was tape-recorded by the Hong Kong Police;

(3)  Mr Hui complained to Fei Lo Kwong肥佬光in the telephone conversation that having received 100 million shares, Mr Koon demanded another 100 million shares, then increased to 300 million shares, now reduced to 170 million shares upon giving face to Fei Lo Kwong肥佬光 (“上一次攞左一億到手啦, 跟住又話再加多1億, 依家又話3億, 咁樣, 跟住依家佢, 當然你出面, 佢依家比面你啦, 就話1 億7千”);

(4)  Brother Sung 宋大哥joined the call halfway through the conversation to tell Mr Hui to meet Mr Koon and the others at noon the next day (being Friday 15 May 2009) to resolve the matter in a couple of sentences (“你明天, 你明天12點, 不是, 你明天12點到了以後, 我們兩個幾句話傾完”).

78.  Later that same evening in the Police Command Centre, Mr Hui received a phone call at 10:56 pm from “大圈尻Dee” who was tape-recorded by the Hong Kong Police telling Mr Hui that:-

(1)  “大圈尻Dee” had been friends with Mr Koon for more than 20 years (“嗱，佢 [Mr Koon] 都係我廿幾年嘅朋友”);

(2)  Mr Koon had helped “大圈尻Dee” over many matters (“佢亦都幫咗我好多嘢”);

(3)  “大圈尻Dee” had pumped a lot of money into Mr Koon (“我哋有好多錢都係揼係佢嗰度㗎”);

(4)  “大圈尻Dee” had lost money and asked Mr Hui to make good his loss. (“喂我蝕咗去嘅，你幫幫手，得唔得).

79.  The following day being Friday 15 May 2009, the Hong Kong Police set up an undercover sting operation at the Chinese restaurant in the Kowloon Shangri-la Hotel to catch red-handed and arrest Mr Koon, Mr Ng, the 3^rd Defendant, “大圈尻Dee” and the rest of their gang.  However, Mr Hui got cold feet and the operation had to be aborted. One of the reasons which caused him to get cold feet was that Brother Sung 宋大哥 was a member of the National Security Bureau of the People’s Republic of China. He did not want to get into a situation where he caused a member of the National Security Bureau of the People’s Republic of China to be arrested for blackmail in Hong Kong.

80.  I should say that the sequence of events set out above covering the period from 14 May 2009 to 15 May 2009 did not surface in the criminal trial. Such evidence came out as a result of this Court’s request for sight of the prosecution’s unused materials in the criminal trial comprising the three taped conversations set out above.

81.  Mr Fung SC for Mr Hui submitted that the three taped  conversations revealed that:-

(1)  Mr Koon’s repeated demands made on Mr Hui to hand over shares to him was not based on the Oral Agreement;

(2)  The contemporaneous evidence shows that no one – whether Mr Koon, Mr Ng, the 3^rd Defendant, “大圈尻Dee”, Wu Tsz 胡子, Fei Lo Kwong肥佬光, Brother Sung宋大哥or the rest of the gang – ever breathed a word of or mentioned the Oral Agreement;

(3)  Mr Koon consorted with a notorious triad gangster “大圈尻Dee” for over 20 years, was friends with him, helped “大圈尻Dee” out over many matters and received a lot of money pumped into him by “大圈尻Dee” who then lost money and required compensation.

82.  As will be analysed below, in such a fact-sensitive case as the present one, this Court attaches great weight to contemporaneous records which are critical in revealing the truth of what happened many years ago since such materials are clearly more reliable than the oral testimony of witnesses attempting to recollect events which had occurred more than a decade ago (in this case, 13 – 15 years ago).

83.  It is also the Plaintiff’s submission that given that the above events took place more than 13 years ago, the dates of the events pleaded in the Re-Re-Amended Statement of Claim can scarcely be expected to be exact.  That said, the evidence shows clearly that:-

(1)  The duress, coercion and intimidation by Mr Koon, Mr Ng and “大圈尻Dee” and his gang took place “in or around mid-to-late March 2009”. (See Re-Re-Amended Statement of Claim at §10(3)).

(2)  The Share Purchase Agreement (though dated 26 March 2009) was signed “on or around 26.3.09”. (See Re-Re-Amended Statement of Claim at §10(12)).

(3)  The evidence presented at trial demonstrates that all the above events took place in mid-to-late March 2009;

(4)  Although Share Purchase Agreement is dated 26 March 2009, it was not necessarily signed on that specific date but the evidence shows that such agreement was executed in mid-to-late March 2009.

THE 1^st DEFENDANT’S CASE

84.  The 1^st Defendant, Mr Koon strenuously denies the existence of the 1 March 2009 meeting or encounter.

85.  His case is that in early or mid-2007, through Mr Ng’s introduction, he met Mr Hui for the first time. Mr Hui told him that Sino Union had good prospects, and persuaded him to purchase shares in Sino Union. He was attracted and after some study, he began trading in the shares of Sino Union on the market in 2007. He did not tell Mr Hui about his trading though.

86.  On 11 December 2007, Mr Hui invited Mr Koon to dinner. At that time, Mr Koon held 1,100,000 shares in Sino Union. During the dinner, Mr Hui told Mr Koon that the prospects of Sino Union were promising and highlighted that Goldman Sachs and Mr Lee Shau Kee (founder of Henderson Land Development Limited) had also invested in Sino Union. Mr Hui again persuaded Mr Koon to purchase shares in Sino Union.  In this regard, it is worthwhile to note that on 14 April 2008, Sino Union held a press conference at Four Seasons Hotel during which Mr Hui informed the press that Dr Lee Shau Kee and/or his company had purchased Sino Union shares.

87.  During the dinner, Mr Hui also gave Mr Koon a piece of paper and explained to Mr Koon that he had control and/or influence over about 4.5 billion shares of Sino Union shares.

88.  After the dinner, Mr Koon, after some study, did purchase more shares in Sino Union, holding 49,650,000 shares as at 18 December 2007.

89.  On 17 December 2017, Sino Union announced its interim results for the 6 months ended 30 September 2007 and that the profits from operating activities was about HK$4.4 billion, which suggested profits of about HK$1 for each of the about 4.6 billion issued shares.

90.  From 17 December 2007 to 18 December 2007, Mr Koon, upon noting the apparently good interim results of Sino Union, spent a total of HK$74 million on, and purchased a total of about 46 million of, Sino Union shares.

91.  However, from 19 December 2007 to 27 December 2007, noting no significant increase in market price, despite the apparently good interim results, Mr Koon sold a net total of 17,250,000 shares in Sino Union. After the close of the market on 27 December 2007, Mr Koon was holding 31.4 million shares for which he had spent about HK$50 million to purchase.

92.  On 27 December 2007, Mr Ng telephoned Mr Koon mentioning that there had been a lot of people selling shares in Sino Union recently. Mr Koon disclosed to Mr Ng it was him. On the same day, Mr Ng telephoned Mr Koon again and said that Mr Hui would like to meet him. They met in Tsim Sha Tsui, talking about Mr Koon’s recent sale of the shares in Sino Union. Having ascertained the details of the shares then still held by Mr Koon, Mr Hui, to entice Mr Koon to purchase more shares in Sino Union, “offered to transfer to [Mr Koon] 250,000,000 Shares free of charge if [Mr Koon] would buy more Shares in the open market and spent up to a total of at least HK$200,000,000 in buying the Shares.” (See §26 of Mr Koon’s witness statement.)

93.  Mr Hui explained that upon that offer, the average cost of all the shares Mr Koon would hold (together with the 250,000,000 shares free of charge) would be HK$0.5 per share only.

94.  Mr Koon accepted this offer and continued to buy Sino Union shares in the market.

95.  Mr Koon duly performed the Oral Agreement by purchasing 151,290,000 shares in Sino Union from 28 December 2017 to 16 April 2008 for a total price of HK$235,569,589.09.

96.  From 28 December 2007 to 11 March 2008, Patrick Tsang Kwok Man (“Mr Tsang”), an executive director of Sino Union, on Mr Hui’s instructions, applied to the Hong Kong Stock Exchange for copies of daily CCASS Participating Shareholding Reports of Sino Union (“PSH Reports”). Such PSH Reports were not available to the public and were available only to directors or authorised persons of listed company. It is Mr Koon’s case that Mr Hui and Mr Tsang, for the purpose of the Oral Agreement, delivered a total of 23 Sino Union PSH Reports to Mr Koon, with the first report dated 28 December 2007 and the last one dated 11 March 2008.

97.  It is Mr Koon’s case that after he duly performed the Oral Agreement, Mr Koon informed Mr Hui about that and requested him to transfer 250,000,000 shares to him free of charge as agreed under the Oral Agreement.

98.  After 16 April 2008, Mr Hui and Mr Koon met for tea or meals from time to time and during one such get together, Mr Hui gave some confidential financial information of Sino Union to Mr Koon, told Mr Koon that the prospect of Sino Union was very good, and persuaded Mr Koon to continue to purchase Sino Union shares.

99.  In early June 2008, Mr Hui, in discharge of his contractual obligation under the Oral Agreement, caused Xie and Guo to transfer a total of 50,070,000 shares in Sino Union to Mr Koon’s nominees for free.

100.  From June 2008 to early 2009, Mr Koon reminded Mr Hui from time to time to transfer the remaining shares to him for free pursuant to the Oral Agreement.

101.  On 20 June 2008, Sino Union published its 2008 Annual Report and stated, inter alia, that there was a material error made in the 2007 Interim Results, namely the profits from ordinary activities was not about HK$4.4 billion but only about HK$1.9 billion.

102.  In August 2008, Mr Hui gave 5 tickets for the 2008 Beijing Olympic Games Opening Ceremony to Mr Koon and one of the 5 tickets was for a seat next to the Ambassador of the Republic of Madagascar in Beijing.

103.  From May to December 2008, Mr Koon sold all his Sino Union shares in the open market slowly over a period of 8 months and the loss was a total sum of HK$79,366,901.92.

104.  On 16 March 2009, at a lunch gathering among Mr Hui, Mr Koon, Mr Ng and Mr Zhou, Mr Hui introduced Mr Zhou to Mr Koon and Mr Ng and said that he would place 250,000,000 shares to Mr Zhou and Mr Zhou would then transfer 100,000,000 shares to Mr Koon. Mr Hui further said that he would then arrange for the transfer of the remaining 100,000,000 shares in due course.

105.  On 16 March 2009, by a 股份買賣協議 (Sale and Purchase of Shares Agreement), Sukapeak Holdings Limited (“Sukapeak”) (represented by Hui) agreed to sell and Mr Zhou agreed to purchase 250 million Sino Union shares at HK$1.2 per share, which was at a premium of 57.89% above the closing price of HK$0.76 per share on 13 March 2009.

106.  On 18 March 2009, Mr Zhou, in Guo’s accompany, came to the office of Cheer Union, was attended to by Mr Ng, and attempted to open a security trading account but was unsuccessful because Mr Zhou failed to provide his address proof.  Nonetheless, Mr Zhou deposited 10 share certificates each of 10 million Sino Union shares no. 019038 – 019047 in the name of Sukapeak at Cheer Union.

107.  On 19 March 2009, Mr Zhou was issued 100 million shares under his own name.

108.  On 23 March 2009, Mr Ng told Mr Koon that the 100,000,000 shares could not be transferred simply by signing bought and sold notes and stamping of the same. Mr Ng said that Mr Hui would like to sign a share purchase agreement. While Mr Koon felt the request strange, he agreed to do so because he would like to have the shares as soon as possible.

109.  On 26 March 2009, the Share Purchase Agreement was signed. However, no shares were transferred.

110.  On 29 March 2009, Mr Koon telephoned Mr Hui about the 100 million shares, and Mr Hui asked Mr Koon to go to his office on 30 March 2009 to get the 200 million shares outstanding under the Oral Agreement from Shanghai Boy 上海仔, person-in-charge of 勝和 (Shing Wo), who was an infamous figure of a triad society.

111.  Mr Koon did not want to talk to Shanghai Boy 上海仔 and asked around for assistance. Eventually, Mr Koon found “大圈尻Dee” who agreed to assist and talk to “Shanghai Boy” 上海仔for the shares.

112.  On 30 March 2009, “大圈尻Dee” visited Mr Hui’s office and met Mr Hui, Shanghai Boy上海仔 and Ching Meng Ky (“Mr Ching”), an executive director of Sino Union, whereupon Mr Hui agreed to give 100 million shares to Koon the following day and the last batch of 100 million shares under the Oral Agreement to Mr Koon soon.  After “大圈尻Dee” left, he told Mr Koon to collect the 100 million shares from Mr Hui the following day. Upon being asked by Mr Hui, Mr Ng also called Mr Koon to have lunch with Mr Hui the following day to collect the 100 million shares.

113.  On 31 March 2009, at the lunch, Mr Hui demanded “yum cha” money of HK$5,000,000 for the members of the triad society he had arranged to come to the next door. Upon Mr Koon’s negotiation, Mr Hui agreed to reduce the “yum cha” money to HK$1,500,000, saying that if it were not paid, Mr Koon’s family would encounter problem.

114.  Feeling intimidated, Mr Koon agreed but having no sufficient cash, he said that he would give the cash a few days later. The lunch ended. Mr Koon left, and did not report the intimidation to the police. Instead, he asked the 3^rd Defendant to get the shares.

115.  On 31 March 2009, the 3^rd Defendant signed bought and sold notes.

116.  On 2 April 2009, Mr Ng informed the 3^rd Defendant that Mr Zhou had already signed a receipt for the transfer of the 100,000,000 shares, and later passed on the receipt to the 3^rd Defendant.

117.  On 3 April 2009, the 3^rd Defendant was issued 20 certificates no. 019875 – 019894 each of 5 million Sino Union shares.

118.  On 3 April 2009, the 3^rd Defendant signed a Standard Form of Transfer to transfer the 100 million shares to Mr Chan Kuok Keong at a total consideration of $77 million but the fact is that Mr Chan Kuok Keong never paid any money to the 3^rd Defendant for the shares, because both of them were holding the 100 million shares as Mr Koon’s nominee.

119.  From April to May 2009, Mr Chan Kuok Keong sold the 45.12 million and the 100 million shares (received from Xie in June 2008 and from the 3^rd Defendant in April 2009 respectively) in the open market and the sale proceeds was a total sum of $107,567,659.17.

120.  Mr Chan Kuok Keong also sold 4.95 million shares received from Guo in June 2008 in the open market and the sale proceeds amounted to a total sum of about HK$2.5 million.

121.  On 6 April 2009, Mr Ng gave HK$1.5 million in cash (Mr Koon’s money) to Mr Hui at Mr Hui’s Office. Despite the transfer of the 100,000,000 shares already, Mr Koon, fearing revenge, still gave HK$1,500,000 in cash to Mr Hui via Mr Ng. (See §62 of Mr Koon’s witness statement.)

122.  On 29 April 2009,     upon Mr Hui’s invitation, Mr Koon, Mr Ng, “大圈尻Dee” and Mr Shum Man Keung, nicknamed “Wu Tsz” went to Kimberley Hotel at about 1 pm and met Mr Hui, Mr Ching, Shanghai Boy上海仔, Mr Ben Siu and other people.

123.  In respect of the last batch 100 million shares, Mr Hui said he would give 50 million shares to Mr Koon first. In respect of the last batch of 50 million shares, he would give to Mr Koon after he had purchased more shares of Sino Union in the open market so as to push up its market price, but Mr Koon refused.

124.  Mr Koon and his party left and Mr Hui stayed behind until about 3 pm and paid the bill.

125.  On 10 May 2009, Mr Hui met “大圈尻Dee”, Wu Tsz, one 宋大哥 and one 肥佬光 at Royal Garden Hotel in Tsim Sha Tsui East, and Mr Hui said he was threatened by “大圈尻Dee”.

126.  On 13 May 2009, Mr Hui made a report to the Hong Kong Police of blackmail and theft of the 100 million shares against Mr Koon, Mr Ng, the 3^rd Defendant, “大圈尻Dee” and Wu Tsz胡子. Mr Hui made a total of 10 police statements afterwards.

127.  On 14 May 2009, Mr Hui met 宋大哥 at lunch and their conversation was audio-recorded by Mr Hui.

128.  On 14 May 2009, Guo withdrew the last and remaining 1.56 million shares from his account at Cheer Union.

129.  On 16 June 2009, Mr Koon, Mr Ng, the 3^rd Defendant, “大圈尻Dee” and Wu Tsz were arrested by the Hong Kong Police for blackmail and theft of 100 million shares.

130.  On 17 June 2009, Xie made a complaint to the Securities and Futures Commission (“SFC”) and the Hong Kong Police against Cheer Union and Mr Ng for theft of 45.12 million shares from his account at Cheer Union.

131.  On 25 June 2009, Mr Hui commenced the present proceedings HCA No. 1479 of 2009 against Mr Koon, Mr Ng, the 3^rd Defendant and “大圈尻Dee”.

132.  In June 2009, Mr Koon, Mr Ng, the 3^rd Defendant, “大圈尻Dee” and Wu Tsz 胡子were charged with blackmail and theft of 100 million shares in ESCC No. 5461 of 2009.

133.  On 20 January 2010, Guo made a statement to the police asserting that Cheer Union and Mr Ng had stolen 4.95 million shares from his account at Cheer Union.

134.  On 21 and 22 January 2010, Xie made 2 statements to the Hong Kong Police asserting Cheer Union and Mr Ng had stolen 45.12 million shares from his account at Cheer Union.

135.  On 25 March 2010, Xie filed his Statement of Claim in HCA No. 287 of 2010 against Cheer Union and Mr Ng for having stolen 45.12 million shares from his account at Cheer Union.

136.  On 2 June 2010, Mr Ng filed his Defence in HCA No. 287 of 2010.

137.  On 30 July 2010, Mr Hui resigned as the Chairman and executive director of Sino Union.

138.  On 17 September 2010, Mr Hui sold all his Sino Union shares.

139.  On 6 October 2010, Mr Ching resigned as an executive director of Sino Union.

140.  On 17 April 2012, as a result of Xie’s complaint to the SFC that Mr Ng had stolen 45.12 million shares from his account at Cheer Union, the SFC investigated the matter and reached an agreement with Mr Ng that Mr Ng be prohibited from taking part in any regulated activity for 10 years, for misconduct under the Code of Conduct for Persons Licensed by or Registered with the SFC.

141.  On 26 October 2012, Mr Koon commenced HCA No. 2004 of 2012 against Mr Hui to claim 99.93 million shares outstanding under the Oral Agreement.

142.  From 10 February 2014 to 26 March 2014, trial of HCCC No. 66 of 2010 took place and Mr Koon and all other defendants were acquitted of all charges and awarded costs.

143.  On 7 May 2015, Mr Koon filed his Defence and Counterclaim in the present proceedings. Out of the 250,000,000 shares agreed under the Oral Agreement, 50,070,000 shares were transferred in June 2008 and 100,000,000 shares were transferred in March 2009. There remain 99,930,000 shares yet to be transferred under the Oral Agreement.

144.  Hence, Mr Koon counterclaims:-

(1)  based on the Oral Agreement, for the remaining 99,930,000 shares and/or damages; and

(2)  based on duress or “for consideration which wholly failed in the event the Plaintiff’s promise to perform his existing contractual obligation to give and transfer the remaining 100 million shares to the 1^st Defendant pursuant to Agreement was consideration”, for the “yum cha” money of HK$1,500,000. (See §34 of the Re-Re-Amended Defence and Counterclaim of the 1^st Defendant.)

APPROACH TO EVALUATION OF EVIDENCE

145.  As can be seen from the narrative of the diametrically opposite account of events, this case turns essentially on the Court’s assessment of the credibility of the parties’ respective case. Central to this exercise is the assessment of the existence of the Oral Agreement.

146.  Lord Bingham in his book The Business of Judging at pp 5 – 6 insightfully said:

“Let me then turn to the central questions. Faced with a conflict of evidence on an issue substantially effecting the outcome of an action, often knowing that a decision this way or that will have momentous consequences on the parties’ lives or fortune, how can and should the judge set about his task of resolving it? How is he to resolve which witness is honest and which dishonest, which reliable and which unreliable? How, as between competing experts in a field not his own, is a judge to determine where the truth lies? Is our existing way of resolving expert conflicts the best way? I shall begin by considering the resolution of issues of primary fact, the choice between first-hand eye-witnesses. Then I shall turn to expert evidence.

The normal first step in resolving issues of primary fact is, I feel sure, to add to what is common ground between the parties (which the pleadings in the action should have identified, but often do not) such facts as shown to be incontrovertible. In many cases, letter or minutes written well before there was any breath of dispute between the parties may throw a very clear light on their knowledge and intentions at a particular time ….

The most compendious statement known to me of the judicial process involved in assessing the credibility of an oral witness is to be found in the dissenting speech of Lord Pearce in the House of Lords in Onassis v Vergottis. In this he touches on so many of the matters which I wish to mention that I may perhaps be forgiven for citing the relevant passage in full:

‘Credibility’ involves wider problems than mere ‘demeanour’ which is mostly concerned with whether the witness appears to be telling the truth as he now believes it to be. Credibility covers the following problems. First, is the witness a truthful or untruthful person? Secondly, is he, though a truthful person, telling something less than the truth on this issue, or, though an untruthful person, telling the truth on this issue? Thirdly, though he is a truthful person telling the truth as he sees it, did he register the intentions of the conversation correctly and, if so, has his memory correctly retained them? Also, has his recollection even subsequently altered by unconscious bias or wishful thinking or by over-much discussion of it with others? Witnesses, especially those who are emotional, who think that they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist. It is a truism, often used in accident cases, that with every day that passes the memory becomes fainter and the imagination becomes more active. For that reason a witness, however honest, rarely persuades a Judge that his present recollection is preferable to that which was taken down in writing immediately after the accident occurred. Therefore, contemporary documents are always of the utmost importance. And lastly, although the honest witness believes he heard or saw this or that, is it so improbable that it is on balance more likely that he was mistaken? On this point it is essential that the balance of probability is put correctly into the scales in weighing the credibility of a witness. And motive is one aspect of probability. All these problems compendiously are entailed when a Judge assesses the credibility of a witness; they are all part of one judicial process. And in the process contemporary documents and admitted or incontrovertible facts and probabilities must play their proper part.

Every judge is familiar with cases in which the conflict between the accounts of different witnesses is so gross as to be inexplicable save on the basis that one or some of the witnesses are deliberately giving evidence which they know to be untrue. There are, no doubt, witnesses who follow the guidance of the Good Soldier Sveyk that ‘The main thing is always to say in court what isn’t true,’ as a matter of principle, but more often dishonest evidence is likely to be prompted by the hope of gain, the desire to avert blame or criticism, or misplaced loyalty to one or other of the parties. The main tests needed to determine whether a witness is lying or not are, I think, the following, although their relative importance will vary widely from case to case:

(1) the consistency of the witness’s evidence with what is agreed, or clearly shown by other evidence, to have occurred;

(2) the internal consistency of the witness’s evidence;

(3) consistency with what the witness has said or deposed on other occasions;

(4) the credit of the witness in relation to matters not germane to the litigation;

(5) the demeanour of the witness.

The first three of these tests may in general be regarded as giving a useful pointer to where the truth lies. If a witness’s evidence conflicts with what is clearly shown to have occurred, or is internally self-contradictory, or conflicts with what the witness has previously said, it may usually be regarded as suspect. It may only be unreliable, and not dishonest, but the nature of the case may effectively rule out that possibility.” (Emphasis added).

147.  In Lee Fu Wing v Yan Paul Po Ting [2009] 5 HKLRD 513, Deputy High Court Judge Au (as he then was) at 524 helpfully set out the well-established approach as to assessment of witnesses:

(1)  whether the party’s case is inherently plausible or implausible;

(2)  whether the party’s case is, in a material way, contradicted by other evidence (documentary or otherwise) which is undisputed or indisputable;

(3)  where it is shown that a witness has been discredited over one or more matters to which he has given evidence using the above tests.  This is relevant to the assessment of his overall credibility; and

(4)  the demeanour of the witnesses.

148.  In Lam Rogerio Sou Fung v Tan Soon Gin George HCA2576/2005, unreported, 5 May 2011, Chu J at §§40-41 said:

“40. Mr Chain has referred me to what Lord Devlin said extra-judicially in The Judge (Oxford University Press, 1979) at p.63, where he endorsed the words of Mr Justice MacKenna in a paper entitled “Discretion” read at University College, Dublin on 21 January 1973 (printed in the Irish Jurist, vol.IX, new series, p.1) as follows:

“This is now I go about the business of finding facts. I start from the undisputed facts which both sides accept. I add to them such other facts as seem very likely to be true, as for example, those recorded in contemporary documents or spoken to by independent witness like the policeman giving evidence in a running down case about the marks on the road. I judge a witness to be unreliable if his evidence is, in any serious respect, inconsistent with these undisputed or indisputable facts, or of course if he contradicts himself on important points. I rely as little as possible on such deceptive matters as his demeanour. When I have done my best to separate the true from the false by these more or less objective tests, I say which story seems to me the more probable, the Plaintiff’s or the Defendant’s”

I respectfully agree.

41. I also agree what was said by Peter Smith J in EPI Environment Technologies Inc & Anor v Symphony Plastic Technologies plc & Anor [2005] 1 WLR 3456, 3470-3471 at para.74, that it is essential to have regard to the entirety of a witness’ evidence. As he observed, witnesses can make mistakes, but the mistakes do not necessarily affect other parts of their evidence. Likewise, witnesses can regularly lie. However, lies themselves do not mean necessarily that the entirety of that witness’ evidence is to be rejected. A witness may lie in a stupid attempt to bolster his case, but the actual case nevertheless remains good irrespective of the lie.”

149.  On fact finding, especially in civil cases, the law is binary. In re B [2009] 1 AC 11, Lord Hoffmann at §2 (p.17) said

“If a legal rule requires a fact to be proved (a “fact in issue”), a judge, or jury must decide whether or not it happened. There is no room for a finding that it might have happened. The law operates a binary system in which the only values are zero and one. The fact either happened or it did not. If the tribunal is left in doubt, the doubt is resolved by a rule that one party or the other carries the burden of proof. If the party who bears the burden of proof fails to discharge it, a value of zero is returned and the fact is treated as not having happened. If he does discharge it, a value of one is returned and the fact is treated as having happened.” (Emphasis added.)

150.  In Lo Ming Chi Charles and another. v Full power Investment Holdings Corp and another [2021] HKCFI 3073, Mimmie Chan J. at §10 insightfully said:

“The Court is the finder of facts, but the finding of facts in any case cannot be equated with the ascertainment of the truth.” (Emphasis added.)

151.  I find the above guidelines helpful and will apply the same in assessing the credibility of the parties’ diametrically different versions of events.

ANALYSIS AND ASSESSMENT

The Oral Agreement

152.  I have carefully considered all the evidence presented to this Court, including the oral testimony of the witnesses. I have no doubt that this Court was not informed of the full facts or the whole truth of the present dispute. However, the role of this Court is to make factual findings according to the available evidence and to its best ability in a fair and equitable manner.

153.  Doing the best this Court can, on balance, I am not convinced that Mr Koon has discharged his burden of proving the existence of the Oral Agreement. In fact, for the reasons to be set out below, I am of the view that the Oral Agreement never existed.

154.  First and foremost, I find the contemporaneous tape recordings illuminating. In particular, the transcript of the phone recording dated 14 May 2009 from 10:57 pm to 11:07 pm shows the following important exchange between Mr Hui (B) and “大圈尻Dee”:

“34.  B:  我純粹呢，當次呢係，即係講係俾面你，我哋先 至傾啫因為呢（C：多謝你吖。），因為呢，當時你都知呢亞官呢佢就話呢有晤..股票損失，到依家佢都無咗去（C：我嗱，呀，呀。）始終呢，我就肯定聽你，依家聽你（C：呀。）啦，啫係一直。

35．  C：  嗱，佢都係我廿幾年嘅朋友（B：喺，喺。），佢亦都幫我咗好多嘢（B：喺，喺，喺。）我哋啲，我哋有好多錢都係揼係佢嗰度，不係我希望即係我亦都唔想講咁多嘢，如估係你話需要亞官（B：啫係。）都可以去幫吓你手嘅無問題。（B：呢，啫係以前呢，即係,係。）我覺得啫係大家從聽日開始解决咗問題呢大家做番，做朋友做兄弟都無乜所謂嘅，將你，喂我蝕咗去嘅，你幫幫手，得唔得（B：唔，唔，唔。）我覺得都無乜困難。” (Emphasis added.)

155.  I am of the view that the above dialogue between Mr Hui and “大圈尻Dee” whom Mr Koon admitted to be his agent sits well with and gives credence to Mr Hui’s case that Mr Koon made substantial loss in his investment in Sino Union’s shares in which “大圈尻Dee” also participated. Mr Koon and “大圈尻Dee” were no doubt looking to Mr Hui to make good their losses. This is understandable because on Mr Koon’s case, Mr Hui did persuade him to invest in the shares of Sino Union by giving him a rather rosy picture of the prospect of Sino Union.

156.  I notice that after the press conference held by Sino Union on 14 April 2008 at Four Seasons Hotel during which Mr Hui said Dr Lee Shau Kee and/or his company had purchased Sino Union shares, Mr Koon spent HK$50,158,223.84 to purchase a total of 27,700,000 Sino Union shares on 15 April 2008 at HK$1.81 per share. On the following day, he spent HK$27,236,228.24 to purchase 15,090,000 Sino Union shares at HK$1.80 per share and HK$4,697,804.79 to purchase 2,600,000 shares at HK$1.81 per share. In other words, in two days’ time after Dr Lee Shau Kee’s investment was made known to the market, Mr Koon invested a total of HK$82,092,256.87 to purchase the shares of Sino Union, a third-tier or fourth-tier stock as Mr Chain put it.

157.  The closing price of Sino Union was HK$1.49 per share on 3 April 2008 before the market closed for a holiday. Its closing price on 14 April 2008 (the day of the information) was HK$1.60 per share. The closing price on 15 and 16 April 2008 was HK$1.81 per share. The trading volume hit a record high on 15 April 2008 at 122,440,000 shares. The trading volume on 16 April 2008 was 67,690,000 shares.

158.  However, the rally in share price was short-lived. After a record high at HK$2.02 per share on 23 April 2008, the share price of Sino Union continued to go south from HK$1.81 per share on 28 April 2008 to a depressing low price at HK$0.77 per share on 25 February 2009. The price movement was, by and large, a continuous fall. Accordingly, by the last trading day in February 2009, Mr Koon would have lost $1.04 per share.

159.  Indeed, Mr Koon’s case is that he sold all his Sino Union shares in the open market slowly over a period of 8 months from May to December 2008 and the loss was a total sum of HK$79,366,901.92. This is, by any standard, not a small sum. This undisputed factual situation sits well with the tape transcript which records that Mr Koon had suffered significant loss in his trading in Sino Union shares in which “大圈尻Dee” also participated. They were then looking to Mr Hui for compensation. 100 million shares in Sino Union were then worth about HK$77 million, roughly the loss suffered by Mr Koon and “大圈尻Dee”.

160.  I am of the firm view that this contemporaneous tape recording has a high probative value because had “大圈尻Dee” simply been a debt collection agent pursuant to the Oral Agreement, he would not have referred to his own loss as well. He looked to Mr Hui for “some help” (“幫幫手”) no doubt because first, he along with Mr Koon suffered an actual loss and secondly, they were under the impression that as the majority shareholder and the chairman of the board of directors of Sino Union, it was within the power of Mr Hui to “print” more shares to make up for their losses.

161.  Indeed, this Court expressed its concern during the trial that the loss of “大圈尻Dee” in the share investment with Mr Koon, on a balance of probabilities, seems to tally with Mr Hui’s case that Mr Koon invested in the shares with the expectation that the price of the shares would rise, but in the end, he suffered a substantial loss of almost HK$80 million, and thus thought that Mr Hui had misled Mr Koon into buying the shares. Mr Koon wished to hold Mr Hui accountable by extorting the 100 million shares from him.

162.  Mr Chain for Mr Koon submitted that the transcripts should be read as a whole as we do not have the audio recording. To that I agree. However, even if one were to read all three transcripts as a whole, in my view, they point not to the existence of the Oral Agreement but an illegitimate attempt to hold Mr Hui accountable for the substantial loss suffered by Mr Koon and “大圈尻Dee”.

163.  According to Mr Koon’s witness statement at §49, Mr Koon briefed “大圈尻Dee about the Oral Agreement and Mr Hui’s obligation to give Mr Koon 250 million shares. Yet, in all of the three tape transcripts, there was no reference at all to the Oral Agreement. I am of the view that this fact, by itself, is an indicium that there was simply no oral agreement between Mr Hui and Mr Koon. Mr Chain for Mr Koon submitted that by that time Mr Hui had already agreed to pay more such that there was no need to make reference to the Oral Agreement. I do not agree. There are many references or complaints by Mr Hui to being first demanded to pay over 100 million shares, then 200 million shares, then 300 million shares. Assuming the Oral Agreement exists, it is inexplicable as to why “大圈尻Dee” did not refer to Mr Hui’s obligations under the Oral Agreement. It is inherently more probable that there was no reference to the Oral Agreement because it simply did not exist.

164.  I reject Mr Chain’s submission that “大圈尻Dee” on that occasion was trying his best to appease Mr Hui, and that “大圈尻Dee” would say anything Mr Hui wanted (or “大圈尻Dee” thought Mr Hui wanted) to hear in order not to rock the boat, so that came the next day, Mr Hui would hand over the shares and the gangsters would pocket the extra 65 million shares. There was no need for “大圈尻Dee” to appease Mr Hui at all because by that time he had already successfully extorted 100 million shares from Mr Hui. I do not find it necessary for “大圈尻Dee”  qua oppressor to deliberately give a false story about his loss in share investment with Mr Koon in order to appease Mr Hui.

165.  Secondly, I am of the view that Mr Koon’s pattern of trading in the shares of Sino Union does not sit well with the existence of the Oral Agreement. Mr Koon, by any standard, is a very successful and seasoned businessman. If he were to invest a total of HK$200 million into the shares of Sino Union as required under the Oral Agreement, a third-tier or fourth-tier stock, he would have paced his purchases in such a way so as not to cause any unnecessary increase in share price. It was in his interest to devise and implement an investment strategy to acquire the maximum possible number of shares with his HK$200 million. However, this was not what happened. Instead:-

(1)  Within two days’ time after Dr Lee Shau Kee’s investment in Sino Union was announced, Mr. Koon carried out a massive purchase of 45,390,000 Sino Union shares at a total cost of HK$82,092,256.87. This does not sit well with the behaviour of someone who was trading to build a position with minimum costs and maximum benefit to himself pursuant to a commercial agreement (i.e. the Oral Agreement), but is rather the conduct of someone who is purely speculating that the shares would abruptly appreciate in value upon the release of favourable news.

(2)  For completeness, I note that the above pattern of trading is consistent with Mr Koon’s earlier conduct before the Oral Agreement was allegedly reached. Shortly after the 2007 Interim Results were announced, Mr. Koon purchased a substantial amount of Sino Union shares, i.e. a total of 27,720,000 shares, at a total cost of HK$45,618.467.85; when he discovered that such announcement did not result in a spike in the share price of Sino Union, he abruptly caused 10,150,000 shares to be sold for a total sum of HK$17,678,306.22.  In my view, such abrupt selling of shares sits better with the behaviour of a stock speculator.

166.  I also note that in fact, Mr Koon actually sold 80,000 shares at HK$0.9 per shares on 4 April 2008. Mr Fung SC submitted that if Mr Koon were to build a position, there was no reason why he would have sold shares before he had accumulated enough. There is force in Mr Fung SC’s submission, and I accept that had the Oral Agreement existed, Mr Koon would unlikely have sold 80,000 shares on 4 April 2008.

167.  Mr Chain, on the other hand, drew my attention to the fact that Mr Koon stopped purchasing shares in Sino Union after 16 April 2008, apparently because Mr Koon had already performed his part of the Oral Agreement by spending a total of HK$200 million in acquiring the same. However, I note that Mr Koon’s cessation in buying more shares after 16 April 2008 does not necessarily prove the existence of the Oral Agreement. His cessation in buying more shares is also consistent with his evidence that he noticed that there was no increase in share price after the announcement of Dr Lee Shau Kee’s investment. In fact, on 15 April 2008, Mr Koon’s purchase constituted 22.62% of the total trading volume in the market (27,700,000/122,440,000). Yet, there was no substantial increase in share price. Indeed, Mr Koon, as an experienced trader in the stock market, gave evidence in court that he then realised that some parties were actually unloading shares in the market and they might be friends of Mr Hui. With such perception, it was not surprising that in Mr Koon’s mind, Mr Hui should be responsible for his loss.

168.  Thirdly, Mr Chain for Mr Koon relied heavily on the transfer of 50.07 million shares of Sino Union by Mr Hui to Mr Koon’s nominees (Chan Kuok Keong and the 3^rd Defendant) in June 2008 as strong objective evidence that the parties actually acted upon the Oral Agreement. This partial performance is, by itself, evidence of the Oral Agreement. Mr Chain submitted that if this Court finds as a matter of fact that the 50.07 million shares transfer was effected as part performance of the Oral Agreement, then this Court should be left with little or no doubt about the existence of the Oral Agreement. As a matter of logic, I agree. In fact, I am of the view that if established, this is a strong indicium evidencing the existence of the Oral Agreement.

169.  However, the evidence does not prove that the 50.07 million shares were transferred to the nominees of Mr Koon as part performance of the Oral Agreement. Mr Koon’s pleaded case on this issue is that Guo and Xie held the 50.07 million shares as Mr Hui’s nominees. Mr Hui suggested to Mr Koon “to make use of a nominee arrangement for holding the said shares to avoid other third parties being aware of the Agreement.” (See §19(2)(a) and (b) of the Re-Re-Amended Defence and Counterclaim of the 1^st Defendant.)

170.  Mr Koon bears the burden in making good his pleaded case, including the nominee relationships. However, such nominee relationships are contradicted by the evidence of Mr Ng who testified that he and his staff had conducted due diligence on the source of funds for the purchase of the 50.07 million shares and were satisfied that such funds came from Guo and Xie and that Guo and Xie held the shares acquired with such funds beneficially. In my view, this not only completely negates Mr Koon’s pleaded case on the nominee relationships, it also adversely affects the credibility of Mr Koon’s evidence and testimony.

171.  Mr Fung SC for Mr Hui rightly submitted that Mr Koon has produced no evidence to prove the nominee relationships. He further relied on the following evidence to prove the contrary:

(1)  When opening their accounts with Cheer Union, Guo and Xie respectively signed a declaration form declaring “本人乃上述戶口之最終受益人及最終風險承擔人，絕無利用或被他人利用本人名義作為第三者之代理人，以從事上述戶口買賣的交易活動”.  Compelling evidence is required to prove that Guo and Xie lied in making this declaration.  However, no such evidence, let alone compelling evidence, has been adduced.

(2)  Mr Ng does not challenge Xie’s statement made to the Hong Kong Police on 21 January 2010 including, in particular, the fact that Xie had ceased working for Mr Hui’s company since July 2006; and purchased the shares on the advice of the general manager of Huaheng Petroleum being a centrally controlled state-owned enterprise which, according to Mr Hui’s evidence, Xie joined in July 2006 as a senior manager after leaving the employment of Mr Hui’s company.

172.  Mr Chain saw the force of Mr Ng’s evidence on the source of funds of the 50.07 million shares and the lack of evidential basis to establish or prove the nominee relationships. However, Mr Chain submitted even if the 50.07 million shares belonged to Xie and Guo beneficially, it does not mean that Mr Hui did not give instructions to Mr Ng to withdraw shares from their accounts and physically passed the said shares to Mr Koon’s nominees. Technically that is correct. However, on balance, I find it inherently improbable that Mr Hui would have simply appropriated (or misappropriated) someone else’s shares and passed the same to Mr Koon’s nominees.

173.  I note that for a receipt of 50.07 million shares, there is no documentary proof at all. Mr Chain also recognises the absence of Mr Hui’s “foot-print” in relation to the transfer of the 50.07 million shares. In my view, this is inexplicable for at least two reasons:-

(1)  First, on Mr Koon’s case, he was entitled to the 250 million shares as from 16 April 2008 when he performed his contractual duties under the Oral Agreement. On 2 June 2008, the price of Sino Union’s shares dropped to HK$1.5 per share. By then, he would have already made a loss by reason of the delay in handling over the 250 million shares by Mr Hui. However, there is no documentary evidence that he had chased for the same from Mr Hui.

(2)  Secondly, on his case, when Mr Hui caused third parties to transfer shares under the name of third parties to him, he did not request for a receipt to prove that the shares were actually transferred by Mr Hui. This is to be contrasted with Mr Koon’s demand for a receipt of the 100 million shares that were transferred to his nominee in April 2009.  As a seasoned businessman, there is no reason why Mr Koon would not be alerted to the risk of receiving substantial shares in the names of third parties without any documentary proof. There is the obvious risk that Xie and Guo could sue him for the return of the said shares as evidenced by the subsequent legal proceedings commenced by Xie and Guo.

174.  Mr Chain for Mr Koon also relied on the following facts to prove that the 50.07 million shares were transferred on the instructions of Mr Hui to Mr Koon’s nominee as part performance of the Oral Agreement.

(1)  Mr Hui’s company Barta Holdings opened a trading account at Cheer Union. Mr Tsang, Hui’s associate, brought Xie to open an account at Cheer Union. Guo (rather coincidentally) also opened an account at Cheer Union.

(2)  Pun Tak Hung and Chan Chau Lan, both being Mr Hui’s staff, were authorised by Xie and Guo to operate their accounts at Cheer Union, and Mr Hui appointed the same two persons to operate the security trading account of Mr Hui’s company, Golden Nova.

(3)  Xie and Guo, all of a sudden, found out that shares were missing from their accounts at the same time when Mr Hui made a report to the Hong Kong Police on 13^th May 2009. Xie and Guo made police statements on two consecutive days in January 2010.

175.  Also, it defies common sense to suggest the other possibility, namely, that Mr Ng stole the shares, not for his own benefit, but to give them to Mr Koon. On the evidence, the fact is that neither Xie nor Guo is making any realistic claim to recover “their” shares. Mr Koon’s evidence is that he had those shares and their proceeds of sale; strangely enough, he was not prosecuted for theft of the same and Xie and Guo had not proceeded with their claims against him.

176.  I agree that there are features in Xie and Guo’s claims which call for proper explanations. However, this Court is not seized of the actions commenced by Xie and Guo. There are facts of the present dispute that the parties have chosen not to disclose to this Court. I am of the view that there is a quantum leap to be taken between the features as identified by Mr Chain and the conclusion that, on balance, Mr Hui deployed the shares  under Xie and Guo’s name and delivered the same to Mr Koon’s nominees as part performance of the Oral Agreement.

177.  For example, as Mr Fung SC submitted, the fact that Xie did not pursue to trial the action he commenced in HCA 287/2010 cannot ipso facto prove that his account was owned by Mr Hui or that Mr Hui was free to handle the shares under his account.  It is axiomatic that there could be multifarious reasons for any plaintiff not to pursue to conclusion any action commenced.

178.  Similarly, although the allegation that somehow Mr Ng had stolen Xie and Guo’s shares, on its fact, is extraordinary, it is, in my view, also quite extraordinary for Mr Ng, as a licenced broker, not to require any documentary proof and to simply hand over the said 50.07 million shares to Mr Koon’s nominees. A receipt of the same would be particularly important given that Xie and Guo, rather than Mr Hui, were the transferors. Absent any receipt, it would be easy for Mr Koon to deny that he had ever received any shares from Mr Hui.

179.  Insofar as Mr Koon relied on the preliminary views of the SFC, although it is stated that SFC took the preliminary view that Mr Ng knew that Xie and Guo’s accounts were nominee accounts, I accept Mr Fung SC’s submissions that first, such preliminary view based on Mr Ng’s own admissions were part and parcel of the settlement he had reached with the SFC in order to avoid more draconian sanctions should such disciplinary action continue. Secondly, such admission is contradictory to the oral testimony of Mr Ng in court.

180.  I also agree that it is clear that the SFC set out no reasons or evidential basis for such preliminary view. Such preliminary view involved no findings of fact in respect of the ownership of Guo and Xie’s respective accounts. Further, footnote 3 to the press release contained in Appendix 2 to the SFC Agreement made it clear that “There is insufficient evidence, at the present time, to establish that the account was part of any manipulative trading activity.”

181.  Importantly, for the reasons to be set out below, I am of the view that the evidence of Mr Koon and Mr Ng are not credible and they are not honest witnesses. This also impacts on the Court’s finding that the 50.07 million shares were not transferred on Mr Hui’s instructions and delivered to Mr Koon’s nominees as part performance of the Oral Agreement.

182.  As Mr Chain quite rightly pointed out, on fact finding, in particular in civil cases, the law is binary. If the party who bears the burden of proof fails to discharge it, a value of zero is returned and the fact is treated as not having happened. In view of the lack of cogent evidence, although there are troubling features of the transfer of 50.07 million shares of Sino Union, I have to return a value of zero to the assertion of part performance by Mr Koon. That, in my view, tends to negate the existence of the Oral Agreement.

183.  There is also one unexplained inconsistency on the transfer of the 50.07 million shares. Mr Koon has made mutually contradictory allegations to explain the extra 70,000 shares transferred from Guo and Xie to him.  In §15 of his statement made to the Hong Kong Police on 1 December 2011, Mr Koon stated that this extra amount of shares just happened to be the amount transferred by the brokerage firm (因為他剛好用這數量從股票行出貨). However, in his witness statement in this trial at §36, Mr Koon stated that Mr Hui told him “the 70,000 Shares would be regarded as compensation to me for the various fees and expenses associated with the transaction”. It is not clear what these various fees and expenses are. Further, if indeed, the 70,000 shares were to compensate Mr Koon for the various fees and expenses associated with the transaction, he would have claimed for 100 million shares instead of 99,930,000 shares in the present action.

184.  Hence, on balance, I reject Mr Koon’s case that the 50.07 million shares were delivered to his nominees on the specific instructions of Mr Hui as part performance of the Oral Agreement.

185.  Fourthly, I also find it inherently improbable and unbelievable that given the downward movement of the share price of Sino Union since 16 April 2008, had the Oral Agreement existed, Mr Koon would not have taken active steps to chase and/or demand Mr Hui to perform his part of the Oral Agreement. The value of 250 million shares as at 16 April 2008 is very different from its value in June 2008, not to say its value in Mach or April 2009. The value of 250 million shares as at 16 April 2008 is HK$1.81 x 250,000,000 = HK$452,500,000. The value of 250 million shares as at 3 April 2009 is HK$0.77 x 250,000,000 = HK$192,500,000. The difference in value is HK$260,000,000. This is, by any standard, not a small sum of money. If the Oral Agreement had indeed existed, I find it difficult to imagine that a seasoned businessman like Mr Koon would have sit and waited for Mr Hui to deliver up the same and would not have taken any active steps to chase for the same. It is difficult to fathom why Mr Koon only made various oral demands in view of the continuous and escalating loss. In the financial market, it makes a huge difference as to when one could dispose of shares in the market.

186.  Even if the relationship between Mr Hui and Mr Koon were good at the material time as suggested by Mr Koon, it is still difficult to fathom the relative inactivity on the part of Mr Koon to chase for the same. At the end of the day, business is business.

187.  What is even more disturbing and troubling is that when Mr Koon demanded for the 100 million shares in March or April 2009, he simply demanded for the said lot of shares without taking into account the drop in share price between 14 April 2008 and 3 April 2009. I am of the view that this is again an indicium that the Oral Agreement simply never existed. Indeed, up to the filing of the written Closing Submissions, Mr Koon was still claiming for the outstanding 99,930,000 shares rather than its value as at 14 April 2008. This does not sit well with the conduct of a savvy businessman who was trying to enforce the Oral Agreement. Rather, on balance, it sits better with Mr Hui’s case that it was an extortion of 100 million shares to compensate Mr Koon’s trading loss as at around March or April 2009.

188.  In addition, I also find Mr Koon’s explanation as to why he did not chase for the shares, which, according to him, were due immediately on 16 April 2008 under the Oral Agreement, incredible. First, he said that he was willing to wait because Mr Hui had told him that Dr Lee Shau Kee would invest in Sino Union, and this would boost the share price and thus he was willing to wait for the shares which he expected would appreciate in value in any event because of Dr Lee Shau Kee’s investment. This is hardly credible because on Mr Koon’s case, he knew that the share price of Sino Union did not rise despite the public becoming aware of Dr Lee Shau Kee’s investment. Hence, he slowly sold off his holding of Sino Union shares and thus made a substantial loss. Given such factual situation, it is incredible that Mr Koon still chose to wait for the share price to rebound.

189.  As a matter of fact, the news of the investment by Dr Lee Shau Kee (or his associates) was already public knowledge by 14 April 2008, two days before 16 April 2008.  It should be all the more urgent for Mr Koon to demand immediate delivery of the shares so that he could capture as high a profit as possible. As set out above, the price of Sino Union surged from the closing price of HK$1.60 on 14 April 2008 to the peak of HK$2.02 on 23 April 2008, whereafter the trading price started a gradual but inexorable decline.

190.  I am of the view that by the time the price of the shares had started to decline after 23 April 2008, an astute stock investor like Mr Koon would have chased Mr Hui for immediate delivery up of the 250 million shares.  Mr Koon’s failure to do so speaks volumes as to the non-existence of the Oral Agreement.

191.  It is also strange that on Mr Koon’s case, he was content to receive a mere 50,070,000 shares in early June 2008 by which time the price of the shares had already been declining for over a month and had by then lost about 25% of their market value, declining from HK$2.02 on 23 April 2008 to HK$1.50 on 5 June 2008. It fell to HK$0.77 on 3 April 2009. It is inherently improbable that Mr Koon would simply make various oral demands only from June 2008 to March or April 2009 whilst watching the share price of Sino Union drop continuously.

192.  Mr Fung SC submitted that it is incredible that Mr Koon was content with making mere oral demands on Mr Hui for the delivery of the shares.  Mr Koon’s failure to issue any written demand letter or letter before action and failure to commence legal proceedings to recover the 250 million shares again speaks volumes as to the non-existence of the Oral Agreement. I agree.

193.  In my view, what is most damaging to Mr Koon’s case is that he did not chase for the value of the 250 million shares as at 16 April 2008.  He appears to be content with the number of shares irrespective of its market price. This is hardly the normal behaviour of a seasoned businessman. I agree with Mr Fung SC that it is simply unbelievable that Mr Hui and Mr Koon’s relationship remained good despite Mr Hui’s clear default in failing to immediately transfer the 250 million shares to Mr Koon on 16 April 2008, particularly in the light of Mr Koon’s own evidence that he had been making repeated oral demands on Mr Hui for transfer of such shares.

194.  Mr Koon told this Court under cross-examination that his instructions to his legal advisers were all along to claim monetary relief rather than the shares. However, in his Statement of Claim at §§14-15 in HCA 2004/2012 and his Re-Re-Amended Defence and Counterclaim at §§32-33, Mr Koon claimed the shares as his primary relief. In Re-Re-Amended Defence and Counterclaim at §32, he even went so far as to plead that he “would not be adequately compensated by damages”.

195.  When confronted with such a glaring discrepancy, Mr Koon’s answer was that he had given clear instructions to his legal advisers and had no idea why such instructions were not properly reflected in his pleadings or, more specifically, reflected in a manner directly antithetical to his express instructions. However, these pleadings are all verified by the Statement of Truth signed by Mr Koon himself repeatedly.  This seriously affects his credibility.

196.  In any event, an inescapable fact is that in or about March or April 2009, he demanded for 100 million shares rather than the value of such 100 million shares as at 16 April 2008. In my view, this seriously negates the existence of the Oral Agreement.

197.  Fifthly, I find it hard to fathom Mr Koon’s conduct in that, having engaged “大圈尻Dee” as his agent to collect the 100 million shares from Mr Hui, he did not demand or ask for the outstanding 200 million shares in one go under the Oral Agreement. As reflected in the transcripts of various tape recordings, Mr Koon did not demand such shares in one go:

(1)  In the transcript of the tape recording on 14 May 2009, Mr Hui complained that Mr Koon’s demands were wholly excessive in that, having received 100 million shares, another demand was made for another 100 million shares (“這確實是他媽的太過份了, 原來他們說收一億, 拿了一億, 再加一億, 了不起再加一億”).

(2)  In the transcript of the tape recording of the same afternoon at 5 pm, Mr Hui complained to Fei Lo Kwong肥佬光in the telephone conversation that having received 100 million shares, Mr Koon demanded another 100 million shares, then increased to 300 million shares, now reduced to 170 million shares upon giving face to Fei Lo Kwong肥佬光. (“上一次攞左億到右手啦, 跟住又話再加多1億, 依家又話3億, 咁樣, 跟住依家佢, 當然你出面, 佢依家比面你啦, 就話1 億7千”)

198.  By the time when one has to resort to the involvement of triad society members, one normally does not do it in a piecemeal manner.  I am of the view that if the Oral Agreement existed, it is more likely than not that Mr Koon would have engaged “大圈尻Dee” to collect all outstanding shares pursuant to the Oral Agreement rather than simply collecting from Mr Hui the 100 million shares.  I am therefore also of the view that the conduct of Mr Koon is more consistent with Mr Hui’s case that there was continuous extortion by Mr Koon and/or “大圈尻Dee” rather than the existence of the Oral Agreement.

199.  Sixthly, I find it hard to believe that, if the Oral Agreement had existed, Mr Koon would not have raised it as early as 2009 when he was arrested. In October 2012, Mr Koon, for the first time raised the existence of the Oral Agreement being almost 5 years after 27 December 2007. Such claim was raised for the first time in HCA 2004/2012.

200.  When asked why he did not raise the Oral Agreement earlier, Mr Koon’s answer was that he would like to remain silent in the light of his imminent criminal trial. This is hardly credible because he raised it in 2012 and his criminal trial would not take place till March 2014.

201.  Further, Mr Koon’s explanation based on his decision to remain silent is contradicted by his voluntary disclosure of the Oral Agreement to the Hong Kong Police on 1 December 2011. Yet, in the said statement to the Hong Kong Police, Mr Koon never mentioned the date of the making of the Oral Agreement.

202.  I also note that Mr Koon first asserted that the Oral Agreement was made on 28 December 2007 being the same day when the PSH/CCASS Reports were delivered to him. On 8 May 2015, some 7.5 years later, Mr Koon brought forward the date of the making of the Oral Agreement to 27 December 2007 without any explanation.

203.  I am of the view that if the Oral Agreement really exists, faced with Mr Hui’s claim, there is no good reason as to why Mr Koon did not raise and rely on its full terms and effects at the first available opportunity. Mr Koon’s failure to do so further weakens his case on the Oral Agreement. In particular, I note that:

(1)  After the commencement of the present action on 23 June 2009, Mr Koon remained silent and did not raise the Oral Agreement in his Defence and Counterclaim until almost 6 years later, namely, 8 May 2015.

(2)  Mr Koon’s plea of the Oral Agreement in his Defence and Counterclaim dated 8 May 2015 would have been time-barred (given that, according to his case, the Oral Agreement was made in December 2007) but for his plea of the Oral Agreement in his Statement of Claim in HCA 2004/2012 dated 26 October 2012 which was almost 5 years after the event in question but not technically time-barred,

(3)  Subsequently, HCA 2004/2012 was subsumed (although not technically consolidated) under the present Action pursuant to the suggestion of Anthony Chan J made on 10 May 2017.

(4)  The first time Mr Koon raised the existence of the Oral Agreement was on 1 December 2011 (being 4 years after the event in question) in his statement volunteered to the Hong Kong Police Commercial Crimes Bureau of the same date, even though such allegation did not appear in his pleadings until it surfaced in his Statement of Claim in HCA 2004/2012 on 26 October 2012 (being almost 5 years after the event in question) and his Defence and Counterclaim in the present Action on 8 May 2015.

204.  I also note that in his statement volunteered to the police on 1 December 2011, Mr Koon:-

(1)  Gave no date as to when the Oral Agreement was made;

(2)  Made no mention of Mr Hui’s discovery that Mr Koon had sold on the open market a substantial amount of shares thereby prompting Mr Hui to suggest to Mr Koon that they meet to discuss the matter;

(3)  Stated that the extra 70,000 shares happened to be the amount of extra shares the brokerage firm transferred (“因為他剛好用這數量從股票行出貨”) – per contra his position in the present action that Mr Hui transferred the extra 70,000 shares to him by way of compensation for fees and expenses incurred by the latter in such transfer.

205.  In his Statement of Claim in HCA 2004/2012, Mr Koon:-

(1)  Again made no mention of Mr Hui’s discovery that Mr Koon had sold on the open market a substantial amount of shares thereby prompting Mr Hui to suggest to Mr Koon that they meet to discuss the matter.

(2)  Mr Fung SC submitted that the above appears to be a later invention by Mr Koon made 7 years later and almost 10 years after the event in question as set out in §§23-24 of his witness statement dated 28 July 2017 in the present action.

(3)  Asserted that the Oral Agreement was made on 28 December 2007: see §6 of his Statement of Claim in HCA 2004/12  – per contra Mr Koon’s allegation that the Oral Agreement was made on 27 December 2007 both in his Defence and Counterclaim as well as in his oral testimony at the trial of the present action.

206.  Importantly, it is pleaded in §6(b) of his Statement of Claim in HCA 2004/12 that “[Mr Hui] orally offered to transfer to [Mr Koon] 250,000,000 Shares free of charge if [Mr Koon] bought the Shares up to an equivalent value of HK$200,000,000” (Emphasis added.).  This plea is verified by Mr Koon to be true and accurate. However, according to this plea, the fulfilment of this condition precedent would depend on the price of the shares which would fluctuate from time to time even in the course of a single trading day.

207.  In the present action, Mr Koon changed the plea by asserting that such condition precedent consisted of him spending up to HK$200 million to purchase Sino Union shares on the open market (See Mr Koon’s witness statement at §§26-27; his Re-Re-Amended Defence and Counterclaim at §10(6)(f)).

208.  I am of the view the above conduct of Mr Koon does not sit well with the existence of the Oral Agreement.

209.  Seventhly, I am also of the view that the terms of the Oral Agreement as pleaded by Mr Koon do not make any common and commercial sense. According to Mr Koon and he confirmed the same in court that under the Oral Agreement, there is no time limit for him to spend up to HK$200 million to purchase the shares of Sino Union. He could have done it in one month, in one year, in 10 years or even in 20 years. This Court proceeds on the basis that both Mr Hui and Mr Koon are seasoned commercial men. I really cannot see what commercial reasons would prompt Mr Hui to enter into such an oral agreement with Mr Koon pursuant to which Mr Koon could take all the time in the world to spend his HK$200 million to purchase shares of Sino Union. Given the unlimited timeframe, there is really no benefit to Mr Hui in entering such an agreement, not to mention at the costs of 250 million shares.

210.  Further, there is no lock-up period in the Oral Agreement. Mr Koon is free to sell his holding at any point in time and thus could push down the share price of Sino Union at his wishes. There is really no conceivable reason why Mr Hui would have entered into such an agreement given that according to Mr Koon, Mr Hui was then seriously concerned that Mr Koon was selling Sino Union’s shares in the market. It is difficult to fathom as to why Mr Hui would create a bigger problem for himself at the costs of 250 million shares. It just does not make any common and commercial sense. On balance, I do not find it credible that the parties would enter into such a useless agreement.

211.  Mr Chain for Mr Koon submitted that the court can imply into the Oral Agreement terms as to reasonable time to spend the HK$200 million. However, Mr Fung SC is correct that no implied terms have ever been pleaded and no implied terms were put to Mr Hui in cross-examination. In fact, Mr Koon’s evidence is contradictory to an implied term that he had to spend the HK$200 million within a reasonable period of time. I agree that a term would only be implied to give effect to the presumed intention of the parties. (See Marks & Spencer Plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2016] AC 742, per Lord Neuberger PSC (with whom Lord Sumption and Lord Hodge JJSC agreed) at §15). In the present case, both Mr Koon and Mr Ng’s evidence is that the time for performance of the Oral Agreement could be indefinite. Hence, the Court cannot imply a term to contradict Mr Koon’s intention in relation to the Oral Agreement.

212.  In any event, it is difficult for this Court to imply a lock-up period when the same is absent from the pleaded terms of the Oral Agreement. It is inherently improbable that the parties would have entered into a useless agreement or an agreement which does not make any commercial sense.

213.  Eighthly and importantly, this Court has carefully considered Mr Koon’s evidence including his oral testimony in court. I do not find him to be a credible witness and I find his evidence, on many material factual issues, to be unbelievable. Apart from the analysis set out above,

(1)  First, I find Mr Koon’s evidence that he was a mere acquaintance of “大圈尻Dee”, meeting him only 2-3 times at cocktail receptions over the past 10 years incredible.

(2)  In the transcript of the covert recording of the telephone conversation between Mr Hui and “大圈尻Dee” over the phone at 10:57pm – 11:57pm on 14 May 2009, constituting the prosecution’s unused materials in the criminal trial kept by Mr Koon since at least 2014, “大圈尻Dee” said at §35:-

“35. C [大圈尻Dee]： 嗱，佢 [Mr Koon] 都係我廿幾年嘅朋友（B [Mr Hui]：喺，喺。），佢亦都幫我咗好多嘢（B：喺，喺，喺。），我哋啲，我哋有好多錢都係揼係佢嗰度㗎…” (emphases added)

(3)  “大圈尻Dee” did not know that his conversation with Mr Hui was being recorded.  There was no reason for him to fabricate any story under such circumstances.

(4)  Hence, I am of the view that Mr Koon’s attempts to distance himself from “大圈尻Dee” severely undermines his credibility.

(5)  Secondly and similarly, it is utterly incredible for Mr Koon to tell this Court that he did not know about the background of “大圈尻Dee” and that he would not have resorted to duress or intimidation in order to obtain 100 million shares from Mr Hui.

(a)  He gave evidence that he paid “大圈尻Dee” 30% of the value of 100 million shares for his services, namely, HK$21 million in cash divided into three bags delivered on three separate days.

(b)  No one would naively paid over such sum of money in cash not knowing what actions “大圈尻Dee” and his gang would take in order to help him to get the 100 million shares from Mr Hui.

(c)  In fact, Mr Koon repeatedly testified in court that at his meeting with “大圈尻Dee” on 29 March 2009, the latter told him that, per “江湖規矩” or the custom of the underworld, a 30% commission or service fee would be charged on monies recovered. Mr Koon agreed and did engage the services of “大圈尻Dee”.

(d)  I find that Mr Koon was not honest with this Court when he said that he had no idea about the background of “大圈尻Dee” and whether he would resort to criminal activities in order to extort the 100 million shares from Mr Hui.

(e)  I further find that Mr Koon knowingly engaged “大圈尻Dee” and his agent to intimidate Mr Hui in order to extort the 100 million shares from him.

(f)  In fact, Mr Chain fairly concedes that Mr Koon did engage “undesirable elements” to obtain the 100 million shares. But he said that it was in response to Mr Hui’s engagement of Shanghai Boy上海仔. Be that as it may, there is no doubt that Mr Koon’s evidence on this material issue is incredible.

(g)  I find that on receipt from Mr Hui of the 100 million shares carrying at the material times a market value of about HK$70 million, Mr Koon immediately sold the shares thereby triggering his obligation to pay “大圈尻Dee” HK$21 million.  Further, I find that Mr Koon did pay “大圈尻Dee” HK$21 million by hand-delivering in person three bags of cash on different dates to “大圈尻Dee” in face-to-face meetings (instead of remitting the above sums through bank transfers or writing “大圈尻Dee” a cheque) because he did not want to leave a paper trail for such criminal activities despite the grave risk of losing one or more of three bags of cash or having them stolen.

(h)  The total absence of documentation evidencing the cash payments of HK$21 million is entirely consistent with Mr Koon’s repeated evidence that if he were to commit a crime, he “would not be so stupid as to leave a paper trail”. When asked in cross examination as to whether he knew that “大圈尻Dee” would go to Mr Hui’s Office to collect the shares, Mr Koon’s initial answer was that he had no idea.  This answer is flatly contradicted by Mr Koon’s own witness statement at §49 where he said that “大圈尻Dee” would go to Mr Hui’s Office to collect the shares.

(i)  Mr Koon’s answer is also contradicted by his own evidence given in the criminal trial that “大圈尻Dee” “would enlist friends to go up [to Mr Hui’s Office] to talk to Mr Hui” (“佢會搵朋友上去同佢傾”). When confronted in cross-examination by the above contradiction as between his answer and his evidence in the criminal trial, Mr Koon was driven to concede that “I do not think I have better memory than that day” being the day he gave the above evidence in the criminal trial on 4 March 2014.

(j)  For the above reasons, I have no difficulty in finding that Mr Koon well knew that “大圈尻Dee” would resort to the criminal intimidation of Mr Hui in order to extort the 100 million shares from him.

(6)  Thirdly, Mr Koon’s attempts in the same vein to distance himself from Wu Tsz 胡子 are not credible.  According to Mr Koon, his first encounter with Wu Tsz胡子took place on 24 April 2009.  On 24 April 2009, he met “大圈尻Dee” at the San Diego Hotel in Jordan to engage “大圈尻Dee” to obtain the 100 million shares from Mr Hui.  At the end of Mr Koon’s meeting with “大圈尻Dee”, Wu Tsz 胡子showed up and the three of them proceeded to Mr Hui’s Office.

(7)  It is Mr Koon’s evidence that he did not know why Wu Tsz 胡子showed up. He did not know why “大圈尻Dee” had asked Wu Tsz 胡子to join them. He did not know the role to be played by Wu Tsz 胡子 and he did not ask. I find this hard to believe.

(8)  According to Mr Koon, his second encounter with Wu Tsz胡子took place on 29 April 2009 before the Kimberly Hotel meeting with Mr Hui. I note there is a discrepancy between Mr Koon’s evidence and Mr Ng’s evidence as to where Mr Koon met up with Wu Tsz 胡子. According to Mr Ng, both “大圈尻Dee” and Wu Tsz 胡子were already in Mr Koon’s office before Mr Ng joined them to set off for the Kimberly Hotel. According to Mr Koon, only him, Mr Ng and “大圈尻Dee” set off together for the Kimberly Hotel, and Wu Tsz 胡子showed up separately at the Kimberly Hotel.

(9)  I agree that, on balance, the fact that Mr Koon needed not and did not ask why Wu Tsz 胡子was also present at the Kimberly Hotel meant that he well knew that Wu Tsz 胡子was there to offer his assistance to intimidate and coerce Mr Hui into handing over the 100 million shares.

(10)  I find that Mr Koon was not honest with the Court and he had full knowledge that Wu Tsz 胡子was up to no good and was there to render criminal assistance to “大圈尻Dee” in the intimidation of Mr Hui. He knew that Wu Tsz  胡子was another triad gangster enlisted by “大圈尻Dee” to help in intimidating Mr Hui so as to force the latter to hand over the 100 million shares.

(11)  Fourthly, for the Kimberly Hotel lunch on 29 April 2009, it is not in dispute that Mr Koon booked a VIP room for 12 people. When asked why he would book a room for so many people, I do not find his answers credible at all. He said that he expected the lunch to be the usual lunch involving only Mr Ng, Mr Hui and himself, as in the past.  This can hardly sit well with the fact that it was Mr Koon who booked a room for 12. This, I agree, must mean that Mr Koon was expecting more people to attend the lunch meeting including “大圈尻Dee” and Wu Tsz 胡子.  He actually took them to lunch. “大圈尻Dee” and Wu Tsz 胡子 did not attend the lunch for no particular purpose. On balance, I am of the view that Mr Koon brought along “大圈尻Dee” and Wu Tsz 胡子 to the lunch so as to intimidate Mr Hui to give him more shares having already received the benefit of the successful extortion in March or early April 2009.

(12)  Fifthly, I find Mr Koon’s case that somehow on 31 March 2009, having successfully deployed“大圈尻Dee” and his gang to “sort things out” and basically neutralized Shanghai Boy上海仔, nevertheless, he was intimidated and coerced to handover HK$1.5 million in cash as “yum cha” money to Mr Hui so that he could pay Mr Ching (boss of “Chuk Luen Bong” in Taiwan) hardly credible. If Mr Hui were able, with the assistance of Mr Ching and Shanghai Boy上海仔, to coerce Mr Koon, he would not have to transfer the 100 million shares to Mr Koon. Mr Koon has not given any evidence as to what Mr Ching had done in order to deserve HK$1.5 million.

(13)  Mr Koon also said that Mr Hui initially asked for HK$5 million but upon negotiation, he reduced the asking “yum cha” money to HK$1.5 million and said that upon the payment of HK$1.5 million cash, he would give the last batch of 100 million shares under the Oral Agreement to Mr Koon, to which Mr Koon agreed. I find this hardly capable of being believed. I reject Mr Koon’s evidence on this issue. It is incredible that Mr Hui somehow was in a position to demand the HK$5 million and then Mr Koon, the subject of  intimidation, was able to negotiate the “yum cha” money down substantially. Further, it was said that having gone through the episode with “大圈尻Dee”, somehow Mr Hui was able to impose the payment of HK$1.5 million in cash as a condition for the performance of the Oral Agreement. Still further, it was said that somehow, after Mr Hui received the cash of HK$1.5 million, he decided not to transfer the other 100 million shares and waited for another intimidation from “大圈尻Dee”. In my view, these allegations are all very fanciful and incredible.

(14)  It is also not very clear as to whether the HK$1.5 million was intended to pay Mr Ching or Shanghai Boy 上海仔. If the former, as said, Mr Ching appeared to have done nothing to deserve such compensation. If the latter, it should be noted that Shanghai Boy上海仔, having utterly failed to either defend or uphold Mr Hui’s interests, was basically neutralized by “大圈尻Dee” and his gang. There was no logical reason for Mr Hui to demand from Mr Koon any tea money or other fees to compensate Shanghai Boy 上海仔 for services rendered since the latter had completely failed to render any such services. It is simply counter-intuitive that somehow an oppressor had agreed to pay the oppressed.

(15)  Sixthly, I also find it incredible that Mr Hui would have borrowed money from Mr Koon or his company Planetic International Limited, through Pun Tak Hung, Cao Yu and his wife. The loans were borrowed not in the name of Mr Hui, and the same were repaid in full by the borrowers. The fact that Mr Hui signed as a personal guarantor for repayment of the loans does not mean that he was the real borrower. There is simply no evidence to support Mr Koon’s case on this issue.

(16)  In relation to the submission that what Mr Hui said in this trial is different from what he told the police since Mr Hui said at the criminal trial that his cheques has nothing to do with the loans, I accept Mr Fung SC’s submission that Mr Hui made his statement to the Hong Kong Police dated 5 January 2010 to reconstruct events which had occurred two years previously. He did enter an express caveat in Answer 7 in his statement to the Hong Kong Police stating as a matter of fact that he did not have before him the relevant documents regarding the loans and the cheques.

“因為我手頭上無任何文件可以幫我記返起, 可能係開俾曹宇, 亦可能係其他人, 因為我經開過好多支票俾朋友用嚟做借錢擔保用…”

(17)  Seventhly, I also find Mr Koon’s evidence that he had not read Mr Ng’s witness statements incredible. Mr Koon told this Court that it was his decision to call Mr Ng to give evidence first. Nonetheless, he repeatedly told this Court that he had never read Mr Ng’s witness statements. It is simply unbelievable that in deciding whether to call Mr Ng to give evidence first, he would not have considered the evidence of Mr Ng. I note in particular that Mr Ng actually proposed amendments to his witness statement in his examination-in-chief.

(18)  Mr Ng’s witness statement was filed on 25 July 2017.  He further filed his supplemental witness statement on 11 July 2019. It is unbelievable that when preparing his own supplemental witness statement, Mr Koon would not have read the other parties’ prior witness statements or had the contents drawn to his attention by his own legal team. It is even more incredible that in preparation of the present trial, he would not have read the content of Mr Ng’s witness statements. If so, what is the point of calling Mr Ng to give evidence to support his case?

(19)  Eighthly, Mr Koon is not honest with the Court when he gave evidence that he had not seen “大圈尻Dee” since 29 April 2009. I note that “大圈尻Dee” categorically states at §§6-7 of his witness statement that:-

“6. On or about 29^th April 2009, I met the 2^nd Defendant for the first time at the 1^st Defendant’s office… Then, I met the 2^nd Defendant again on or about 15^th May 2009 at the 1^st Defendant’s office.

7. Regarding the 3^rd Defendant, the 1^st Defendant introduced him to me on or about 15^th May 2009 and I had only met him once on that day.” (emphases added)

(20) When confronted during cross-examination at trial with the above witness statement, Mr Koon’s only retort was to say that “大圈尻Dee” lied. However, I agree that there was no reason for “大圈尻Dee” to specifically lie on this issue. I note that when Mr Hui took the witness stand to give his oral evidence, Mr Hui had never made any allegations against any of the defendants in relation to the events taking place on or around 14 May 2009 to 15 May 2009. The assertion of “大圈尻Dee” in his witness statement that Mr Koon introduced Mr Ng and the 3^rd Defendant to him on 15 May 2009 was not prompted by anything said by Mr Hui or his witnesses.

(21) I agree with Mr Fung SC’s submission that Mr Koon’s assertion that he did not meet “大圈尻Dee” after 29 April 2009 is a lie. Mr Fung SC also referred this Court to the transcripts of the three telephone recordings made on 14 May 2009 at respectively 1pm, 5pm and 10pm which reveal that a meeting had been arranged for Mr Hui to meet, among others, Mr Koon, Mr Ng, the 3^rd Defendant and “大圈尻Dee” the next day being 15 May 2009 and that Wu Tsz胡子would also be present at such meeting. In the meantime, the Hong Kong Police had organised an undercover sting operation to catch and arrest Mr Koon, Mr Ng, the 3^rd Defendant and “大圈尻Dee” and Wu Tsz 胡子red-handed at the Chinese restaurant of the Kowloon Shangri-la Hotel.

(22) Mr Fung SC submitted that in the face of such overwhelming inculpatory evidence set out in the tape recordings, Mr Koon nevertheless attempted to deny in oral testimony at trial any involvement in such proposed meeting. Mr Koon could not however explain away the contents of the tape recordings, save only to repeat that he could not control what the others had said. All these conversations were recorded covertly leaving, therefore, no room for the possibility that Fei Lo Kwong肥佬光, Brother Sung宋大哥and “大圈尻Dee” had to make up any story to frame Mr Koon. I am of the view that there is force in Mr Fung SC’s submission that the preponderance of probability is that Mr Koon met “大圈尻Dee” on the morning of 15 May 2009, whether at the Chinese restaurant at the Kowloon Shangri-la Hotel or elsewhere prior to proceeding to the said hotel at the lunch hour.

(23) Ninthly, I am also of the view that Mr Koon’s evidence that he did not think it necessary to reduce the Oral Agreement into writing is inherently unbelievable, particularly in the light of his being a seasoned businessman. Mr Koon has been continuously involved in various businesses since he started engaging in garment manufacturing business in the 1980s. By the time of making the Oral Agreement, Mr Koon had already been in business for well over two decades.

(24) I find Mr Koon’s evidence that in garment trading, transactions were customarily carried out without any written documentation unpersuasive and simply incredible.

(25) Mr Koon’s case is that there is nothing illegal about the Oral Agreement. That being the case, I find it hard to believe that the parties would not reduce the Oral Agreement into written form. I note that Mr Hui’s transaction with Dr Lee Shau Kee, Mr Zhou etc were all documented.

(26) I also note that Mr Koon’s evidence under cross-examination is that both he and Mr Ng understood that the Share Purchase Agreement was signed to avoid some “grey area in the securities regulations”. If so, it is all the more important that the Oral Agreement should be reduced in writing.

(27) The lack of documentary trail of the Oral Agreement, whether in the form of a written agreement or any foot prints in any form, electronic or otherwise, I agree, is more consistent with the fact that no such Oral Agreement was ever made.

(28) Tenthly, I also find Mr Koon’s evidence that the share price on any given day, or indeed within a certain period, is not a matter of particular concern or significance to him hardly credible. I agree that it is inherently incredible that Mr Koon, being a seasoned trader and speculator and having so much at stake, would not pay close attention to the fluctuating price of the shares of Sino Union on any given trading day. I fully accept that by the time the price of the shares had started to decline after 23 April 2008, any reasonable person standing in the shoes of Mr Koon would have actively chased Mr Hui for the immediate delivery up of the 250 million shares if the Oral Agreement indeed existed.

(29) Finally, Mr Fung SC for Mr Hui submitted that in assessing the credibility of Mr Koon’s evidence, this Court must take into account the fact that Mr Ng gave evidence prior to Mr Koon’s evidence. While Mr Koon (and his counsel) has the prerogative of deciding the order of witnesses, this does not mean that the Court should disregard common sense, in particular the fact that Mr Koon and his personal assistant were present in Court throughout Mr Ng’s evidence and took copious notes resulting in Mr Koon securing for himself a clear tactical advantage of being able to tailor his evidence when it came to his turn to enter the witness box: see HKSAR v Yeung Ka-sing, Carson, DCCC 860/2011, 28 February 2014, Ruling on the defendant’s application to reserve his decision to give evidence until after calling his defence witnesses §54.

(30) A fortiori this must be the case when prior to Mr Koon’s counsel calling Mr Ng to testify first, Mr Hui through counsel had already specifically drawn to Mr Koon’s attention, citing Yeung Ka-sing, Carson, that adopting such an unusual order of witnesses may well adversely impact the credibility of Mr Koon’s evidence. Despite such express warning, Mr Koon nevertheless pressed ahead with calling Mr Ng to testify first thereby accepting, with open eyes, the substantial risk of undermining his own credibility. Accordingly, Mr Koon must bear the full consequences of proceeding in such unorthodox manner.

(31) However, this is a civil trial. Mr Koon and his counsel have the prerogative to decide on the order of his witnesses. This Court duly exercises its judicial functions impartially, independently and professionally. I am of the view that the order of witnesses Mr Koon decides to adopt has no bearing on his credibility and I so rule.

(32) Nonetheless, for all the reasons stated above, I do not find Mr Koon to be a credible and honest witness. He obviously, contrary to his testimony in court, engaged “大圈尻Dee” and his gang to intimidate and coerce Mr Hui to hand over 100 million shares reflecting at the material time an approximate market value of HK$70 million; and he paid “大圈尻Dee” a hefty sum of HK$21 million in cash for his “services”.

214.  Regrettably, I find Mr Koon to be an unreliable and dishonest witness. This has a substantial bearing on this Court’s rejection of his case on the Oral Agreement.

215.  Ninthly, I have no difficulties in finding Mr Ng to be a completely incredible and dishonest witness. Even Mr Koon himself considered Mr Ng’s evidence inaccurate.

(1)  First, although Mr Chain most fairly informed this Court, prior to Mr Ng’s oral testimony, and as confirmed by Mr Koon’s testimony, that he and his instructing solicitors had conducted a few interviews with Mr Ng before he was to give oral evidence, Mr Ng repeatedly lied to this Court by asserting categorically that he had not met any of Mr Koon’s legal team before giving oral evidence.  This is appalling.

(2)  Mr Ng also lied to this Court in saying that he never told Mr Koon or his legal team that he would like to correct the alleged “mistake” in §21 of his witness Statement, but somehow Mr Koon’s counsel just happened to ask him if he had any “corrections” he would like to make to his witness statement. This is a blatant lie. It reveals that Mr Ng wished to conceal his discussions with Mr Koon and his legal team which focused on those parts of Mr Ng’s witness statement which flatly contradict and undermine Mr Koon’s case and which give rise to the need for Mr Ng to change his evidence so as to support Mr Koon’s case. I find that Mr Ng is a hired-gun for Mr Koon.

(3)  Secondly, I find Mr Ng to be dishonest in changing his evidence in order to suit Mr Koon’s case. During his examination-in-chief, Mr Ng sought to amend his witness statement by deleting the last sentence of §21 of his Witness Statement dated 25 July 2017, namely, “I therefore proceeded to prepare an initial simple draft of the Purported Share Purchase Agreement based on the precedent I had.”

(4)  That sentence supports Mr Hui’s case that the draft had been prepared by Mr Ng and undermines not merely Mr Koon’s evidence in the criminal trial of HCCC 66/10 against the Defendants and Wu Tsz胡子but also Mr Koon’s evidence that the draft was prepared by Mr Hui.

(5)  I do not find Mr Ng’s evidence on this issue credible at all:

(a)  He verified his Witness Statement including §21 by signing the Statement of Truth.

(b)  He also stated that §30 of his Witness Statement contained “some mistake” concerning who prepared the draft Share Purchase Agreement, without specifying which sentence was a mistake.  I agree that this is totally unbelievable given that in §30 of his Witness Statement, he emphasised that the contents of the finalised Share Purchase Agreement “contained far more details than the initial draft provided by me”. It is inconceivable that the solicitors preparing his Witness Statement would add such elaboration without his specific instructions and input.

(c)  Further, the Witness Statement is not the only occasion where Mr Ng verified the fact that he had prepared the Share Purchase Agreement. In his Re-Re-Amended Defence at §6(4), he pleaded that “The Purported Share Purchase Agreement was prepared by or caused to be prepared [by] the 2^nd Defendant”. §6 of his Re-Re-Amended Defence sets out in clear terms for over 7 years his position as stated in his original Defence dated 17 September 2015. As a matter of fact and history, he verified for four times the truth of his pleaded position.

(d)  Asked when he first discovered this alleged “mistake”, Mr Ng was unable to give any clear answer to this Court except to allege that he discovered this “mistake” during the criminal trial.  If so, there is no reason as to why in both his Re-Re-Amended Defence and his Witness Statement, he verified that he drafted the Share Purchase Agreement.

(e)  Mr Ng’s allegation that he did tell his solicitor Ms Fong but the latter misunderstood him, and/or he did not make himself clear is incredible to say the least. On his evidence, a solicitor would have misunderstood the witness four times in the pleadings and for a fifth time in her client’s Witness Statement. Mr Ng would have verified the truth of the same assertion four times in the pleadings and for a fifth time in his Witness Statement the contents whereof flatly contradict his instructions to his solicitors who are qualified and presumably competent practitioners. This is simply incredible.

(f)  I have no difficulties in finding that Mr Ng has no respect for the truth and did not give his evidence in an honest manner.

(6)  Thirdly, in relation to the Share Purchase Agreement, Mr Ng’s evidence under cross-examination is that both he and Mr Koon understood that the Share Purchase Agreement was signed to avoid some “grey area in the securities regulations”. However, when confronted with his own evidence in his Witness Statement at §22 where he said that Mr Koon was “bemused as to why such arrangement [namely, the signing of the Share Purchase Agreement] was required”, Mr Ng simply could not give any explanation as to this glaring inconsistency, but only rambled about the good relationship between Mr Hui and Mr Koon at the time and no one wishing to talk about the grey area in writing.

(7)  Fourthly, in his oral evidence in relation to the 31 March 2009 lunch meeting at Macau Jockey Club, Mr Ng asserted that Mr Hui asked Mr Ching to leave, and that out of concern for such an old man being asked to leave, he accompanied him out of the room. However, in his Witness Statement at §37, his evidence was that Mr Hui asked both him and Mr Ching to leave.

(8)  When confronted with such inconsistency, Mr Ng told the Court that Mr Hui did not ask him to leave.

(9)  Fifthly, during his cross-examination, Mr Ng said that he did not read either Mr Hui’s or Mr Zhou’s statements made to the Hong Kong Police either in detail or at all. He said that he had no idea of the allegations made in those statements, not even those allegations specifically made against him. He only relied upon his then solicitors to briefly explain the contents of the above statements to him.

(10)  I find this evidence of Mr Ng simply defies belief.  The evidence he gave under cross-examination is contradicted by his own Witness Statement at §§95-96, particularly where he had himself referred verbatim to extensive parts of Mr Hui’s statements made to the Hong Kong Police.

(11)  Further, the criminal prosecution of Mr Ng starting in May 2009 and finishing only with the completion of his trial in March 2014 was a serious matter, with any possible conviction resulting in a very long custodial sentence. It is inherently improbable that Mr Ng would take such light attitude in relation to Mr Hui’s statements made to the Hong Kong Police even if he genuinely believed himself to be innocent.

(12)  Sixthly, I also find Mr Ng’s account of his meeting up with Mr Koon, “大圈尻Dee” and Wu Tsz胡子in Mr Koon’s office before proceeding to the Kimberly Hotel on 29 April 2009 not credible. Mr Ng’s evidence is that that was the first time he had ever met “大圈尻Dee” and Wu Tsz胡子. He said that he was expecting the lunch on 29 April 2009 to be the usual, casual lunch involving only Mr Hui, Mr Koon and himself as in the past. This is contradicted by his own witness statement at §45 where he states categorically his expectation that there would be a total of 8 persons at the lunch.

(13)  It is also Mr Ng’s testimony that, upon seeing “大圈尻Dee” and Wu Tsz胡子in Mr Koon’s office (which, according to Mr Ng, was the first time he had ever met “大圈尻Dee” and Wu Tsz胡子), nonetheless, he never inquired what these strangers were doing there. Subsequently, he proceeded to the Kimberly Hotel with Mr Koon accompanied by “大圈尻Dee” and Wu Tsz胡子; still he never asked why the latter two were also coming along to the supposed “casual, usual lunch” involving only Mr Koon, Mr Hui and himself. I find this hardly believable.

(14)  Seventhly, in his oral evidence regarding the 29 April 2009 Kimberly Hotel lunch, Mr Ng said that Mr Hui offered to transfer 50 million shares outright to Mr Koon on condition that Mr Koon would thereafter acquire a further 50 million shares to push up the stock price on the market. Mr Fung SC is right that such oral testimony is contradicted by his own witness statement at §47 where Mr Ng made no mention of any offer by Mr Hui to transfer 50 million shares to Mr Koon at all.

(15)  Eighthly, Mr Ng asserted in his witness statement at §§66 and  87 that Guo’s account and Xie’s account were ultimately beneficially owned by Mr Hui. However, such assertion is contradicted by his own admission that he and his staff at Cheer Union had done due diligence and were satisfied that the investment money for the Guo and Xie accounts came from Guo and Xie personally.

(16)  Mr Ng also conceded during his oral testimony at trial that he did not challenge what Xie had told the Hong Kong Police in his statement made on 21 January 2010 that he made the share purchase in question on the advice of the general manager of a Central Government controlled SOE (央企), namely, Huaheng Petroleum (华橫石油) which, according to Mr Hui’s evidence, Xie joined in July 2006 as senior manager.

(17)  Mr Fung SC also referred this Court to the Account Opening Forms signed by respectively Guo and Xie, each of them declared that he was “the ultimate beneficial owner of the account and had absolutely not been used by any third party as their agent to undergo any transactions using such account” (“本人乃上述戶口之最終受益人及最終風險承擔人，絕無利用或被他人利用本人名義作為第三者之代理人，以從事上述戶口買賣的交易活動”).

(18)  Ninthly, while Mr Ng accepted and was well aware that he was under a legal obligation to verify that the source of funds paid into and held in the various accounts maintained with Cheer Union came from the account holder so as to comply with anti-money laundering requirements, he conceded that he knew “大圈尻Dee” had paid money into Mr Koon’s account maintained with Cheer Union for the purpose of joint stock investment, but took no steps to reject such funds or to report the matter to the SFC or to ask Mr Koon to take immediate remedial action.

(19)  The fact that “大圈尻Dee” paid money into Mr Koon’s account maintained with Cheer Union for the purpose of joint stock investment gives credence to the statement by “大圈尻Dee” that he “pumped” money into Mr Koon’s account and lost money. This evidence corroborates Mr Hui’s case that Mr Koon and “大圈尻Dee” considered him liable for their investment loss to the tune of about HK$70 million in March or April 2009.

(20)  Tenthly, on his first day giving testimony in the witness box, Mr Ng asserted that he suffered a stroke in 2008 leading to brain damage and memory impairment; such memory impairment had recently seriously worsened; and he could produce medical reports to substantiate the same.

(21)  This Court gave special leave to Mr Koon’s legal team to approach Mr Ng to obtain such medical reports. However, Mr Chain, leading counsel for Mr Koon fairly informed this court that Mr Ng supplied the name of a doctor in Central Building to substantiate his brain damage, but such doctor declined to attend Court saying that that he had been consulted merely to treat Mr Ng’s hernia.  I agree that absent any medical evidence, the correct approach is for this Court to simply ignore Mr Ng’s assertion about his memory impairment (See Lee Cheung Ching v Lok Hsiao Pei, John, HCA 978/04, 17 March 2008 at §63 per Deputy High Court Judge L Chan (as he then was)).

(22)  I also take note that after the Court’s inquiry into the matter as outlined above, Mr Ng no longer repeated his story of brain damage. In fact, he gave evidence in a coherent manner.

216.  I find as a matter of fact that Mr Ng is not an impartial and independent witness. He gave incredible evidence in order to bolster Mr Koon’s case. He applied to commence private prosecutions against Xie and Guo and a series of judicial review applications when his application failed. He appealed all the way to the Court of Appeal. I agree that there is no doubt that the legal costs incurred were substantial. But incredibly, Mr Ng said that he had no idea how much legal costs he had incurred.  Mr Fung SC submitted that it is no mere coincidence that Mr Koon also commenced a series of private prosecutions against Mr Hui.

217.  Further, Mr Ng told this Court that when he was arrested for intimidation back in June 2009, it was Mr Koon who “put up the bail money of HK$1.5 million” for him.  Mr Koon did not deny Mr Ng’s evidence on this issue, but simply said that his memory was blurred as to whether he lent or put up the bail money for Mr Ng.

218.  Mr Ng’s evidence is so incredible that even Mr Koon under cross-examination expressly invited this Court to disregard, if not ignore, Mr Ng’s evidence saying that “You have to bear with him as he is over 80 years old.  He may have mixed up his recollections.”

219.  Regrettably, I find Mr Ng to be an unreliable and dishonest witness. This also adversely impacts on this Court’s assessment of the credibility of the Oral Agreement.

220.  In view of the above evidence, Mr Chain for Mr Koon admirably submitted that the Court should look at all the objective  and subsequent acts which are all one-sided and are only consistent with, and point to the existence of the Oral Agreement. First, amongst all the disputed facts, there is one objective fact which stands out and is or cannot be disputed, namely, that between 28 December 2007 and 16 April 2008, Mr Koon paid over HK$185 million to acquire a total of about 120 million shares in Sino Union, which is a 3^rd or 4^th liner. The purchases are fully documented. It is submitted this act on Mr Koon’s part is inexplicable without the Oral Agreement, and it points strongly to the existence of the Oral Agreement. I disagree. As analysed above, the pattern of Mr Koon’s trading in Sino Union’s share was perfectly consistent with a seasoned stock operator who invested on “good news” for the purpose of making a big killing in the market. It is not unusual for such operations to take place amongst 3^rd or 4^th liners. In fact, just on the two days after the release of the information relating to Dr Lee Shau Kee’s investment, Mr Koon spent about HK$80 million in accumulating shares of Sino Union, no doubt, with the expectation to make a big killing. The same applies to Sino Union’s announcement of its 2007 Interim Results. I am of the view that this Court cannot infer from Mr Koon’s purchase of a very substantial amount of Sino Union shares that the Oral Agreement exists.

221.  Secondly, as I analysed above, Mr Chain relied heavily on the transfer of the 50.07 million shares from Xie and Guo to Chan Kuok Keong and the 3^rd Defendant. I have to say that I was impressed with this submission initially. However, given Mr Ng’s evidence that he and his staff had carried out due diligence and were satisfied that the shares in the accounts of Xie and Guo belonged to them beneficially, as analysed above, this Court cannot make its findings based on speculations. I make the finding that Mr Koon has failed to discharge his burden of proof that, on balance of probabilities, the 50.07 million shares were indeed delivered to Mr Koon’s nominees on the instructions of Mr Hui.

222.  Mr Chain submitted that even if the 50.07 million shares were not beneficially owned by Mr Hui, it could still be possible for Mr Hui to direct Mr Ng to withdraw the shares and hand over the same to Mr Koon’s nominees. Given that I find both Mr Koon and Mr Ng to be unreliable witnesses, and the evidence relied on by Mr Koon on this issue is purely his and Mr Ng’s account of events, I find it hard to accept this submission. Xie and Guo might or might not have answers to Mr Chain’s queries. However, as a matter of principle, I cannot rule that simply because certain queries may be answered at this stage (e.g. why Xie and Guo had not checked their monthly statements, why they had not reported to the Hong Kong Police earlier, why they have not proceeded with their civil actions and the fact that Mr Hui’s employees were authorized to operate Xie and Guo’s accounts etc.), therefore, on balance, Mr Hui had instructed Mr Ng to withdraw the 50.07 million shares from their accounts and delivered the same to Mr Koon’s nominees.

223.  Further, I do not find it fair to label Xie and Guo as “invisible witnesses”. The transfer of the 50.07 million shares as part performance of the Oral Agreement is an allegation raised by Mr Koon. In civil cases, whoever asserts a positive case carries the burden of proof. This is an issue raised by Mr Koon. His failure to discharge his burden of proof in fact tends to show that the Oral Agreement never exists.

224.  Thirdly, Mr Chain submitted that if the Court rejects Mr Hui’s case of duress, the subsequent act of the transfer of the 100 million shares becomes the best evidence to prove the existence of the Oral Agreement. As a matter of logic, I agree with Mr Chain’s analysis. But as I have no doubt and found that the transfer of the 100 million shares was the result of duress, coercion and intimidation by Mr Koon’s agent, “大圈尻Dee” and his gang, this negates rather than confirms the existence of the Oral Agreement.

225.  Fourthly, Mr Chain submitted that all the objective evidence plainly establishes that Mr Zhou did not own or “lend” the 100 million shares to Mr Hui. I disagree. The sale of a total of 250 million shares to Mr Zhou was publicly announced. The authenticity of the receipt of the 100 million shares issued by Mr Zhou is not challenged.

226.  Mr Chain also submitted that Mr Hui’s explanation for his borrowing of 100 million shares from Mr Zhou, namely, he had to borrow from Mr Zhou as Mr Koon demanded 100 million shares and it was impossible to purchase 100 million shares on the market without affecting the price, incredible. When the Court followed up and asked “Is it your evidence now that if one is to purchase 100 million shares in the open market, the share price would rise significantly to $3?”, Mr Hui answered “Yes, if the purchase was to be completed within one day.” Mr Hui said the same during the criminal trial. Mr Chain queried and submitted that the above explanation does not explain why Mr Hui did not at least try or offer to pay cash. I am unable to accept the submission. The answer to Mr Chain’s query is simply that Mr Koon demanded the 100 million shares to be delivered within a short period of time. It is difficult to purchase so many shares from the market within a short time and an announcement of a sale by the majority shareholder would inevitably affect Sino Union’s share price. In any event, it is easy with the benefit of hindsight to suggest that Mr Hui could have bargained with Mr Koon.

227.  I accept Mr Fung SC’s submission that the evidence which emerged at trial shows that both Mr Hui and Mr Koon, being seasoned market traders and speculators, appreciated that shares as opposed to cash would be a lot more useful to Mr Koon, whether for the reason that such shares could be used to short the stock and even enable, with margin calls, the takeover of the company on the cheap.

228.  I appreciate that the evidence also shows that the reality faced by Mr Hui at the material time was that “大圈尻Dee” and his gang of triads had intimidated him at his office, and the following day, Mr Koon and Mr Ng appeared at Mr Hui’s Office to threaten harm to Mr Hui and members of Mr Hui’s family if the shares were not transferred to Mr Koon as demanded.

229.  The criticism of Mr Hui’s apparent failure to bargain or negotiate down the demands of Mr Koon, Mr Ng and D1, D2 and “大圈尻Dee” has to be viewed in the above context and reality and Mr Hui’s compelling need under immense pressure to protect himself and his family.

230.  Mr Chain also submitted that it must be a spectacular coincidence that after the transfer, Mr Zhou then approached none other than Mr Ng to open an account, and to deposit, not 250 million shares, but exactly 100 million shares. There is no conceivable reason why Mr Zhou would want to deal with (in this instance only to have the shares transferred into his name) the 100 million shares separately, and it must be another remarkable coincidence that Mr Zhou happened to ask Mr Ng to deal with exactly 100 (not 50, not 150) million shares, the exact quantity Mr Hui later asked for.

231.  I accept that there is force in Mr Chain’s submission on this point. There is coincidence. The question is how far one can go from this coincidence to make a factual finding as requested by Mr Chain. In view of all the evidence I have considered and for all the reasons I have discussed above, it is unsafe for this Court to jump from this happenstance or coincidence to the conclusion that the transfer of the 100 million shares from Mr Zhou and its preparatory steps are proof on a balance of probabilities of the existence of the Oral Agreement.

232.  Mr Chain very powerfully and skilfully submitted that if this Court finds that Mr Hui had voluntarily agreed to transfer the 100 million shares to Mr Koon (hence the arrangement with Mr Zhou on or around 16 March 2009 well before the alleged duress, intimidation and coercion), then this Court should find that it was because Mr Hui reneged on his promise by engaging Shanghai Boy上海仔 that Mr Koon had to engage “大圈尻Dee” to neutralize him. Such facts thus proved the existence of the Oral Agreement.

233.  Mr Fung SC submitted that such submissions must be rejected since the same amount to speculation masquerading as submissions by competent and experienced counsel unsupported by an iota of evidence. Such speculations were never explored, let alone established as truth by Mr Chain, at trial. On the contrary, the evidence shows that the sale to Mr Zhou by way of the Sukapeak Agreement involving 250 million shares was made known to the public including Mr Koon by the shareholding disclosures dated 16 March 2009.

234.  I am of the clear view that this Court cannot jump from such coincidences to the conclusion that the Oral Agreement exists and that Mr Zhou’s deposit of 100 million shares into Cheer Union’s account was a voluntary preparatory step to perform the Oral Agreement. There are many possibilities. It could well be that the truth is Mr Koon did hold Mr Hui responsible for his trading losses and Mr Hui initially agreed to make good such trading losses and thereafter he decided that he in fact should not be responsible. He might even have engaged Shanghai Boy 上海仔. All these are speculations. But these speculations and coincidences, in my view, could not prove the existence of the Oral Agreement. I am keenly aware of the fact that these speculations are not the parties’ cases. I have carefully considered Mr Chain’s submissions, but, on the existing evidence, I have come to the finding that the Oral Agreement never existed and the 100 million shares were transferred as a result of the duress, coercion and intimidation of “大圈尻Dee” and his gang, qua agent of Mr Koon. I am of the view that it is not proper and right for this Court to jump to the conclusion that because of such coincidences, the Oral Agreement must exist. I also note that as a matter of fact, quite a number of Mr Hui’s friends did open accounts with Cheer Union. This Court has to proceed on cogent evidence and not speculations.

235.  For the avoidance of doubt, on balance, I find that Mr Hui has proved that he did pay Mr Zhou for the 100 million shares. The receipt signed by Mr Zhou on 28 May 2009 does acknowledge Mr Zhou’s receipt of 24 payments from Mr Hui totalling the RMB equivalent of HK$135 million.  There is no challenge to the authenticity of this document. It is also inherently improbable that Mr Zhou would have simply gifted 100 million shares to Mr Hui. Insofar as the suggestion that Mr Zhou was the nominee of Mr Hui is concerned, there is no evidence to prove the same.

236.  In relation to Mr Chain’s submission that as a matter of record, there is nothing to show Mr Zhou has dealt with the remaining 150 million shares, I am of the view that there is no need for this Court to resolve whether in view of the profit guarantee under the Sukapeak Agreement, it is credible that Mr Zhou had sold them in the market. As Mr Fung SC rightly submitted the profit guarantee under the Sunkapeak Agreement may not be sufficiently commercially attractive since such guarantee was conditional upon a 6-month lockup period. There is no need for this Court to speculate on the reason or reasons underlying the sale at a loss.  It is a fact of commercial life that multifarious reasons arise in the business world from day-to-day such as liquidity issues or Mr Zhou encountering better alternative investments etc.

237.  Fifthly, in relation to the sale of 63.5 million shares to Mr Chan Ping Che (Chemay Inc.), Mr Koon’s case is that on 16 April 2008, when Mr Koon told Mr Hui that Mr Koon has completed the purchase obligation under the Oral Agreement, Mr Hui then asked Mr Koon to sell 63.5 million shares to Mr Hui’s friend, Mr Chan Ping Che, at HK$1.2 per share. The then market price was about HK$1.8 per share. Mr Hui assured Mr Koon that Mr Koon would not suffer any financial loss because Mr Hui would pay the difference between HK$1.8 and HK$1.2 per share to Mr Koon in cash. Mr Hui also told Mr Koon that Mr Hui would instruct the security trading company Cheer Union and Mr Ng to handle the sale.

238.  Mr Hui arranged Mr Chan Ping Che’s solely owned company, Chemay Inc., to purchase the 63.5 million shares at HK$1.2 per share on 17 April 2008 and 18 April 2008. The purchase price of 63.5 million shares x HK$1.2 per share = HK$76.2 million (with transaction expenses deducted) was paid to Mr Koon through the security company. Mr Hui paid the balance in a total sum of 63.5 million shares x HK$0.6 per share = HK$38.1 million, in cash, to Mr Koon on several occasions. Mr Koon had used some of the cash received and he deposited a total sum of HK$22.65 million into his bank account.

239.  It is submitted that Mr Koon’s agreeing to Mr Hui’s request to sell 63.5 million shares shows that Mr Koon had no special interest in the shares. More importantly, the sale was at HK$1.2 per share on paper when the market price in mid-April 2008 was about HK$1.8 per share. As a matter of fact, on the two previous trading days, namely, 15 April 2008 and 16 April 2008, Mr Koon purchased a total of 45.39 million shares at HK$1.8 or HK$1.81 per share. The sale to Chemay Inc., on paper, would suggest Mr Koon would suffer a loss of HK$63.5 million shares x HK$0.60 per share = HK$38.1 million. But for Mr Hui’s instructions, it is inconceivable that Mr Koon would do so. Mr Koon explained that he did not know Mr Chan Ping Che or Chemay Inc. and he did not contact or speak to Mr Chan Ping Che about the sale of 63.5 million shares, and the sale was requested by Mr Hui.

240.  When Mr Hui was asked about the matter during cross-examination, he agreed that Mr Chan Ping Che had no business dealing with Mr Koon and Mr Chan had nothing to do with Mr Koon. Mr Hui said that when he read Mr Koon’s supplemental witness statement dated 11 July 2019, he asked Mr Chan what happened and Mr Chan told Mr Hui that it was Mr Ng who asked Mr Chan if Mr Chan was interested in buying the 63.5 million shares, because “someone” was trading on margin and suffered huge loss of more than HK$39 million and was at the risk of 斬倉 (forced sale) and that “someone” was in urgent need to sell 63.5 million shares to raise cash. Mr Hui said he was further told by Mr Chan that Mr Ng said Mr Chan could buy the 63.5 million shares at HK$1.2 per share, albeit the then market price was about HK$1.8, if Mr Chan could pay by a cash cheque. Mr Hui was told by Mr Chan that Mr Chan agreed to Mr Ng’s proposal. Mr Hui was told by Mr Chan that Mr Chan never met or talked with Mr Koon in respect of the matter. Mr Hui finally said Mr Chan was very happy because the share price rose to more than HK$2 on the following trading day (that was 23 April 2008, the market close price was HK$2.02 per share and Mr Chan earned very good profits of HK$63.5 million shares x (HK$2 – HK$1.2) per share = HK$50.8 million in just a few days.

241.  Mr Chain submitted that all of these were only revealed when Mr Hui was cross-examined. Mr Hui did not call Mr Chan as a witness and has not even tried to obtain a witness statement. When being asked by the Court why Mr Hui did not tell what he was told by Mr Chan and the matters summarised above in Mr Hui’s supplemental witness statement dated 13 February 2020, which was in reply to Mr Koon’s supplemental witness statement dated 11 September 2019, Mr Hui did not give any direct answer but merely said “I deny what Koon has said is the truth.”

242.  Mr Chain further submitted that there is no evidence that Mr Koon traded on margin, suffered huge loss of more than HK$39 million, was at the risk of 斬倉 (forced sale), and was in urgent need to sell 63.5 million shares. Mr Koon’s trading record shows that after Mr Koon had sold 63.5 million shares to Mr Chan (Chemay Inc.) on 17 April 2008 and 18 April 2008, Mr Koon slowly and gradually sold the remaining shares that he was holding over a long period of 8 months until 22 December 2008. Mr Koon was not in urgent need to sell his shares. There is no valid reason that Mr Koon should agree to sell 63.5 million shares to Chan at a loss of HK$38.1 million.

243.  Indeed, after 18 April 2008, apart from switching his shares from one account to another account, not only that Koon did not sell any shares urgently, he actually purchased a further 4.95 million shares on 29 April 2008. Mr Chain thus submitted that this sale of 63.5 million shares to Mr Chan Ping Che (Chemay Inc.), on 17 April 2008 and 18 April 2008, provides solid evidence to prove (1) the existence of the Oral Agreement, (2) Mr Koon has told Mr Hui that Mr Koon has completed his obligation under the Oral Agreement of spending no less than HK$200 million to purchase Sino Union shares by 16 April 2008, and (3) Mr Hui took no issue with that.

244.  However, apart from the evidence of Mr Koon and Mr Ng as to which this Court has reservations, a key evidential issue is the absence of any evidential proof of the payment of HK$38.1 million in cash by Mr Hui to Mr Koon. Had there been such evidence, I agree with Mr Chain that this would be a powerful piece of objective fact to prove the existence of the Oral Agreement. However, there is none. Mr Fung SC is right that there is not an iota of evidence supporting such alleged cash payments. There are no particulars whatsoever as to how, when and/or by how many instalments Mr Hui allegedly made such cash payments to Mr Koon. No receipt or receipts have ever been produced by Mr Koon of any such alleged cash payments totalling such an extraordinary large amount of money. There is also no allegation that there is something illegal or shabby about this transaction with Mr Chan. I find it hard to believe that for a transaction of such magnitude, there is again the absence of any documentary trail.

245.  I also agree that it is unthinkable and simply unbelievable that Mr Hui would have parted with such a large amount of cash without requiring a single receipt from Mr Koon evidencing such payments.

246.  I also note that the alleged HK$22.65 million cash receipts in Mr Koon’s bank accounts cannot, as a matter of evidence, be proved to have been deposited by Mr Hui.

247.  As to Mr Chain’s submission that but for the Oral Agreement, some of the conduct of Mr Koon could not be explained, I am of the view that on the facts of the present case, that is not a proper and safe way of finding out what the facts are. For example, it is Mr Koon’s evidence that after the release of the news concerning Dr Lee Shau Kee’s investment, the share price of Sino Union did not increase, in particular, given the volume of his own purchases. He gave evidence that he then realized that some entities must be unloading the shares of Sino Union at the material time. Given that he was then holding a very substantial volume of Sino Union, a 3^rd or 4^th liner, it is not surprising that he would have Mr Ng to find investors to unload part of his shares. As a matter of fact, up to March or April 2009, he suffered a total loss of about HK$79 million.

248.  I agree that it would have been better if Mr Hui had solicited Mr Chan to give evidence to this Court. But I also bear in mind that the burden of proof on this issue rests with Mr Koon. Base on the evidence, in particular, the absence of proof, documentary or otherwise, of the payment of HK$38.1 million cash by Mr Hui to Mr Koon, and the incredibility of Mr Koon and Mr Ng’s evidence, I have to return a value of zero to Mr Koon’s case on this factual issue.

249.  I also agree with Mr Fung SC’s submission that the sale, being a bilateral transaction between Mr Koon and Mr Chan Ping Che, cannot ipso facto constitute evidence of the Oral Agreement between Mr Hui and Mr Koon. Mr Koon’s suggestion that he would not have sold such shares but for Mr Hui’s direction is a circular argument since Mr Koon must first prove by cogent and compelling evidence that he did so at Mr Hui’s direction.  I agree that Mr Koon has failed to discharge the burden of proving the existence of Mr Hui’s direction.

250.  Sixthly, Mr Chain relies on the provision of daily CCASS Participating Shareholding Reports (“PSH Reports) of Sino Union which would show the updated holding of the shares by the traders.

251.  Mr Koon said that under the Oral Agreement, Mr Hui provided to him the daily PSH reports of Sino Union and that Koon received a total of 23 such reports, a total of 322 pages, from Mr Hui and/or Mr Tsang Kwok Man (“Mr Tsang”); the first report was dated 28 December 2007. Mr Hui denied Mr Koon’s evidence during this trial as well as in the criminal trial. Mr Hui said the reports were available to the public and on the internet. This is not correct. Mr Hui tried hard to distance himself from those reports. Mr Hui said in this trial “I do not know where they (the reports) come from.”

252.  Mr Tsang accepted he was familiar with the reports as he was an executive director of Sino Union. Initially he said anybody could get and obtain such reports, and these reports were available on the internet, the ET Net. Subsequently, when faced with a Hong Kong Stock Exchange document, he agreed that the reports were not available to anyone in the public but said “These (PSH) reports were not asked by me.”

253.  However, when Mr Tsang was referred to two of the PSH reports where it was stated “Attn. : Mr. Patrick Tsang Kwok Man” (indeed all the 23 reports were issued and Attn. : Mr. Patrick Tsang Kwok Man), and when it was put to Tsang “These reports were generated and supplied to you at your request”, his answer was “Did it say so?”

254.  When Mr Tsang was then referred to the statement of the HKEX officer, in particular para. 11 thereof, his answer was “I do not recall I have applied for and obtained the reports. Do you have the e-mail that I sent out (to apply for the reports)?” It is recalled that a fee of $500 was paid for each of the 23 PSH reports. When the matter was put to Mr Tsang again, he answered “I do not recall I have requested for the reports” and “I do not recall what I did with those reports”.

255.  I accept that both Mr Hui and Mr Tsang were not telling the Court the truth in relation to this issue. However, I remind myself that a witness may lie in a misguided attempt to bolster his case, but the actual case nevertheless remains good irrespective of the lie. Mr Chain submitted the provision of the 23 PSH reports is strong evidence that Mr Hui has made the Oral Agreement with Mr Koon on 27 December 2007. Mr Fung SC submitted otherwise. He submitted that it was Mr Koon’s own evidence or admission under cross-examination that the PSH/CCASS Reports were of “no use” to him in implementing the Oral Agreement. Mr Koon agreed that the CCASS reports are of no use to anyone unless there is only one buyer and only one seller and they did not tell you anything but just consolidated numbers of daily trading.

256.  I am of the view that given the fact that Mr Koon was then a substantial shareholder of Sino Union, even if the PSH/CCASS Reports were supplied to him by Mr Hui and/or Mr Tsang, that very act itself does not, ipso facto, proves the existence of the Oral Agreement. It is not even Mr Koon’s pleaded case that the provision of the PSH/CCASS Reports is a term of the Oral Agreement.

257.  Seventhly, Mr Chain submitted that Mr Koon could not have come up to Mr Hui’s Office on 1 March 2009. Mr Hui’s case is that he first met Mr Koon in dinner in early 2007 and the two of them had several meals afterwards in 2007, which were no more than usual social gathering and Mr Ng was present in most of those meals. Mr Hui did not say there was any contact, business dealing or social get-together with Mr Koon and/or Mr Ng in the entire year of 2008. Then, entirely out of the blue, in early March 2009 (not specifying the exact date and time), Mr Koon came to Mr Hui’s Office to ask to “borrow” 100 million Sino Union shares because Mr Koon was facing serious financial difficulty. Mr Hui elaborated during this trial that Mr Koon said he suffered huge loss as a result of security trading and the residential flat of Mr Koon’s mother had been taken possession of by the mortgagee bank. Mr Hui said Mr Koon did not say the loss was the result of trading of Sino Union shares, but Mr Hui said in the criminal trial that Mr Koon said he suffered loss as a result of trading of Sino Union shares.

258.  Mr Chain submitted that Mr Hui’s allegation about Mr Koon’s visit in early March 2009 is just untrue and impossible. On Mr Hui’s case, Mr Koon, for no apparent reason, suddenly came to Mr Hui’s office. Hui testified in this trial that he and Mr Koon were not close friends and they had met only a few times. Mr Hui did not ask Mr Koon and Mr Koon did not tell Mr Hui why Mr Koon chose to come to Mr Hui for financial assistance. Mr Chain submitted that:

“Hui’s submission (theory) is that Koon suffered a loss of $70 million for trading in Sino Union shares between August 2007 and December 2008, and Koon just (presumably on a day in late February 2009) sat down and calculated his loss, and for no conceivable reason (and none is suggested), decided to “hold Hui accountable”, and then made an almost inexplicable unannounced/unarranged visit to Hui at his office on a Sunday morning to ask for a “loan” of 100 million shares which at the then market price would about cover his loss!”

259.  This Court has similar questions at the beginning of the trial. However, as evidence revealed including the transcripts of the three tape recordings, it becomes clear that as in March 2009, Mr Koon (together with “大圈尻Dee”) did suffer substantial loss in their trading in Sino Union shares. For reasons this Court was not informed about and best known to the parties, it does appear that Mr Koon and “大圈尻Dee” held Mr Hui personally accountable for their losses.

260.  Indeed, it is Mr Koon’s own evidence that on 24 April 2009, he, “大圈尻Dee”, and Wu Tsz胡子turned up at Mr Hui’s Office unannounced and uninvited demanding to see Mr Hui but, on being told that Mr Hui was not in Hong Kong, the three of them left. This is consistent with Mr Koon turning up uninvited on 1 March 2009 to seek compensation from Mr Hui.

261.  Mr Chain relied heavily on Mr Hui’s mistaken recollection of the exact date and time of Mr Koon’s unannounced and uninvited meeting in early March 2009. He referred to his shift of evidence on this part during the criminal trial and his change of evidence to 1 March 2009 (a Sunday). It is submitted that if Mr Koon really came on 1 March 2009 (a Sunday), in the morning, when Mr Hui was busy working in the office and preparing to leave Hong Kong for Beijing for the Two Sessions in the afternoon, Mr Hui certainly would have remembered that and told the police of the precise date and time when Mr Hui made the first police statement on 13 May 2009.

262.  However, I agree with Mr Fung SC that a trial is not a memory test. A fortiori this must be the case where the material events took place 5 years before the criminal trial in 2014 and 13 years before the present trial. What is material is that:-

(1)  Mr Koon did turn up unannounced at Mr Hui’s Office in March 2009 asking for 100 million shares, a demand which Mr Hui rejected outright.

(2)  Shortly thereafter, in mid-to-late March 2009, “大圈尻Dee” and his gang turned up unannounced at Mr Hui’s Office to intimidate Mr Hui and coerce him into handing over the 100 million shares, and spat out a clear warning to Mr Hui in a very loud and aggressive manner not to report the matter to the police, otherwise “大圈尻Dee” and his gang would burn down Mr Hui’s Office.

(3)  On the very next day, Mr Koon and Mr Ng turned up unannounced at Mr Hui’s Office and specifically reminded Mr Hui of “大圈尻Dee” and his gang’s visit the day before, Mr Koon threatening Mr Hui that if he failed to hand over the 100 million shares, Mr Hui’s life would be endangered or Mr Hui would at the very least suffer grievous bodily harm.

(4)  Thereafter, Mr Hui caused Mr Zhou to transfer 100 million shares to the 3^rd Defendant at Mr Koon’s specific direction.

263.  As Mr Chain submitted that this event could only have happened on 1 March 2009, I find that as a matter of fact it did happen in the way as described by Mr Hui. I find his evidence on this aspect credible.

264.  Eighthly, it is reasonable for Mr Chain to submit that it does not make common sense that a criminal blackmails and demands for 100 million shares but not HK$100 million cash or money. Indeed, this Court raised this issue at the beginning of the trial. This Court was puzzled as to:

“Why would a criminal, who has suffered huge loss in stock trading and was in urgent need of money, blackmail and demand a victim to give 100 million shares but not $100 million money, in cash or by cheque? Why shares but not cash?”

265.  However, having heard the evidence, it appears to this Court that, for whatever reasons, indeed “大圈尻Dee” and his gang did demand for up to 300 million Sino Union shares and not cash. This is a fact. “大圈尻Dee” simply asked Mr Hui, as the majority shareholder, to print more shares to help his friends.

266.  Mr Hui testified that he surmised that the advantage accruing to Mr Koon demanding shares instead of cash is that he could short-sell the shares to make a market killing or simply dump the shares to depress the stock price thereby triggering margin calls on all holders of margin accounts including Mr Hui, which would in turn lead to the liquidation of such margin accounts in a rapidly falling market, thereby enabling Mr Koon to acquire the shares at depressed prices leading ultimately to the acquisition of control of Sino Union by Mr Koon.

267.  It is correct that Mr Hui did not tell the Hong Kong Police about his conjectures as to why Mr Koon demanded shares instead of cash. However, I am of the view that his failure to do so and/or the reasonableness of his conjectures do not materially alter the Court’s assessment of whether illegitimate demands for shares of Sino Union were made or not. Plainly, they were made by Mr Koon and his agent “大圈尻Dee”.

268.  Ninthly, on the Share Purchase Agreement, I find that the draft came from Mr Ng, no doubt on the instructions of Mr Koon. Indeed, the very existence of the Share Purchase Agreement tends to negate the Oral Agreement. If the Oral Agreement exists, there was no need to dress up the transfer of the 100 million shares as a share purchase agreement between Mr Zhou and Mr Koon’s nominee.

269.  I also note that in the Share Purchase Agreement, there was a 3-month lock-up period provision. This gives credence to Mr Hui’s evidence that he was worried about the transfer of 100 million shares to Mr Koon who might have dumped the same in the open market and thus adversely affected its share price. In response, Mr Koon offered that he would not sell the said shares for a period of 3-month. Mr Ng also offered himself to be a guarantor for such an obligation. In my view, this explains why the parties came up with the Share Purchase Agreement. According to Mr Ng’s evidence, the parties did spend time on revising and finalizing the terms of the Share Purchase Agreement. If the Share Purchase Agreement was a mere formality and a sham, the lock-up period and the guarantee by Mr Ng would not be necessary. According to Mr Ng’s evidence, time was spent to amend the tripartite agreement and he had to come back the next day. If it were a mere formality, it is difficult to understand why the parties needed to spend so much time on it. As it turned out, Mr Koon sold all the 100 million shares almost immediately instead of observing his obligations pursuant to the lock-up period provision.

270.  The Share Purchase Agreement also shows that there were no difficulties if the parties would like to record their agreements in written form. I find it inherently improbable that according to Mr Koon’s case, Mr Hui had to dress up the 100 million shares transfer as a sale and purchase agreement, but he was perfectly comfortable to transfer 50.07 million shares to Mr Koon with no documentation at all.

271.  Tenthly, in relation to the receipt dated 2 April 2009, given the previous intimidation conduct by “大圈尻Dee” and his gang and the receipt was for the benefit none other than Mr Koon, on balance, I find that Mr Zhou was coerced by Mr Ng and a group of people in a coffee shop in Shenzhen as a result of which Mr Zhou signed a receipt to acknowledge having received HK$135 million for the 100 million shares.

272.  On this issue, I find Mr Ng’ evidence particularly incredible. Though never mentioned in his witness statement, Mr Ng alleged during his oral testimony that he would not have dared to intimidate Mr Zhou because Mr Hui told him that Mr Zhou was among the richest in Shenzhen and “黑白兩道都吃得開”. I agree that such evidence purports to explain why he did not intimidate Mr Zhou, but such critical evidence had never previously been mentioned.

273.  I also find as a matter of fact that it was Mr Koon who instructed Mr Ng to obtain a receipt of the HK$135 million from Mr Zhou. The receipt is only useful for Mr Koon to prove that the 100 million shares were paid. There was no need for Mr Hui to specifically ask Mr Zhou to prepare such a receipt. The fact that Mr Koon insisted on getting a false receipt also tends to negate the existence of the Oral Agreement.

274.  Eleventhly, on the issue of who engaged Shanghai Boy 上海仔, Mr Chain submitted that Shanghai Boy上海仔plainly played an important role in the incident, but according to Mr Hui, he was almost invisible. It is submitted the only reason was because when reporting to the police, Mr Hui could not mention or involve him because it would then be known that Shanghai Boy上海仔was on his side. Mr Hui never mentioned or referred to Shanghai Boy上海仔in any of his police statement.

275.  I have my doubts on this issue. However, there is no cogent evidence for this Court to find that Mr Hui did engage Shanghai Boy上海仔. In particular, there is no evidence on how, if Mr Hui engaged Shanghai Boy上海仔, and despite being neutralized by “大圈尻Dee”, he was able to demand the “yum cha” money from Mr Koon.

276.  Further, I note that it is Mr Fung SC’s submission that only Mr Koon, but not any of the defendants in this action, reported the matter to the police, not just the Hong Kong Police but also the Shenzhen Security Bureau. I agree that it is inherently improbable that Mr Hui would report the matter to both the Hong Kong Police and the Shenzhen Security Bureau if he himself engaged Shanghai Boy 上海仔and was involved in any illegal misconduct or criminal misbehaviour as against Mr Koon.

277.  On balance, I find there is no sufficient evidence to prove that Shanghai Boy 上海仔 was engaged by Mr Hui.

278.  Twelfthly, on the relationship between Mr Hui and Mr Koon from 2007 to March or April 2009, I do not accept Mr Koon’s case that he and/or his company lent substantial money to Mr Hui due to their good relationship. As I analysed above, Mr Hui’s willingness to act as guarantor shows at most a good relationship between Mr Hui and the borrowers, not vis-à-vis the lender. Critically, Mr Koon’s own evidence adduced at trial confirms that the borrowers (rather than Mr Hui or third parties) repaid the loans. I also agree that there was neither evidence adduced nor reason advanced as to why Mr Hui needed to borrow; nor was any reason advanced as to why, if (hypothetically) Mr Hui needed to borrow, he had to do so through nominees.

279.  I do not think anything turns on whether Mr Hui gave Olympic tickets to Mr Koon in 2008 showing that the two of them enjoyed a good relationship. Mr Hui concedes that he was acquainted with Mr Koon throughout 2008. Even if Mr Hui gave Olympic tickets directly to Mr Koon, the same was not inconsistent with such acquaintanceship.

280.  However, I agree that Mr Hui has downplayed his relationship with Mr Koon. I am of the view that Mr Hui’s relationship with Mr Koon is something more than a mere acquaintanceship but short of a good or deep friendship. Nonetheless, I am inclined to the view the relationship was one which obviously allowed Mr Koon to place trust on Mr Hui when he made substantial investments in the shares of Sino Union to which Mr Koon, from his perspective, found it legitimate to hold Mr Hui accountable. For reasons best known to the parties themselves, no evidence was led on this specific issue and I therefore make no specific findings thereon.

281.  Thirteenthly, Mr Chain submitted that there were ample examples of what Mr Hui would do to “manipulate” the shares:-

(1)  By a sale and purchase agreement and another mortgage document, both dated 12 December 2007, Sino Kinetic Limited (“Sino Kinetic”), a company related to Dr. Lee Shau Kee agreed to purchase 220.64 million shares from Wisdom On, Mr Hui’s company, at HK$1.25 per share for a total price of HK$275.8 million. Sino Kinetic did not have to pay any purchase money upfront, but instead the shares were mortgaged to Wisdom On to the extent of 100% of the purchase price. In the event that the share price rose during the mortgage period of 5 years, Sino Kinetic could simply repay the mortgage and pocket the profits. Otherwise Sino Kinetic could simply resell the shares to Wisdom On within 5 years at the same price.

(2)  On 16 March 2009, Mr Hui’s company Sukapeak sold 250 million shares to Mr Zhou at HK$1.2 per share, which was at a premium of 57.89% over the closing price of HK$0.76 on the previous trading day. Mr Hui would 核算 (take an account) with Mr Zhou after 6 months and Mr Hui would pay compensation to Mr Zhou if the price dropped lower than HK$1.25 per share. In other words, Mr Zhou was not exposed to any loss in the event the share price dropped.

(3)  Mr Hui was prepared to pay 5% of the purchase price as commission to Lew Mong Hung for introducing purchasers of the shares. On the sale to Mr Hui Wing Mau’s company alone, Mr Lew’s commission was HK$12.5 million.

282.  Hence, Mr Chain submitted that it is more probable than not Mr Hui would have entered into the Oral Agreement with Mr Koon. I disagree. The agreements with Sino Kinetic and Mr Hui Wing Mau are all well documented unlike the Oral Agreement. Even if the shares Mr Hui transferred to Dr Lee Shau Kee amounted to a free gift, there is a difference between gifting shares to Dr Lee Shau Kee which would bring in Sino Union a strategic investor and Mr Koon who was looking for profits from trading in the shares of Sino Union. According to the evidence, Dr Lee Shau Kee was renowned as “the God of stocks in Asia” (亞洲股神), which explains why Mr Hui was willing to give Dr Lee favoured treatment. At the end of the day, I do not think that the existence of the above three transactions prove the existence of the Oral Agreement.

283.  Finally, I find Mr Hui’s evidence and oral testimony, on the whole, credible and reliable. Obviously, he did not tell the whole truth to the Court, for example, in relation to the PSH Reports and his relationship with Mr Koon. However, in relation to the material issues like the Oral Agreement and the acts of intimidation, duress and coercion, I have no difficulties in accepting that Mr Hui was telling the truth to the Court. As Mr Chain rightly pointed out, witnesses sometimes tell half-truth to the Court. I am of the view that, overall, Mr Hui is a credible and honest witness.

284.  I do not find Mr Lew’s evidence highly relevant.

285.  I do not find Mr Tsang to be a credible witness.

The Counterclaim of HK$1.5 million

286.  In relation to Mr Koon’s counterclaim of HK$1.5 million, as I find above, I am not convinced that Mr Hui and/or Shanghai Boy上海仔 was in a position to intimidate, duress, or coerce Mr Koon to hand over HK$1.5 million in cash as “yum cha” money.

287.  Mr Fung SC submitted that Mr Hui’s volunteering to the Hong Kong Police the fact of his undocumented receipt from Mr Koon of HK$1.5 million in cash on 3 April 2009 underscores the high unlikelihood that such sum constituted tea money demanded by Mr Hui for his engagement of the notorious triad gangster Shanghai Boy 上海仔, thereby directly undermining Mr Koon’s allegation to the same effect.  Put another way, if Mr Koon’s allegation above were true, it would be highly unlikely for Mr Hui to volunteer to the Hong Kong Police the fact of his undocumented receipt from Mr Hui of HK$1.5 million cash since police inquiries and investigations of this incident would lead to and reveal that Mr Hui had engaged triad gangsters to resist Mr Koon’s demand for the 100 million shares.

288.  It is further submitted that the fact that Mr Koon did not even demand any receipt from Mr Hui in respect of the HK$1.5 million in cash payment underscores the overwhelming likelihood that the payment was made in appreciation and gratitude for the handover of the shares together with apologies for any inconvenience caused to Mr Hui as well as, more significantly, as “hush money” (“掩口費”) as described by Mr Hui in his witness statement at §64.

289.  Insofar as Mr Koon’s reliance on the plea that he paid the said sum in return for Mr Hui’s promise to transfer the balance of another 100 million shares under the Oral Agreement is concerned, as I find as a matter of fact the Oral Agreement never exist, I also reject the said plea.

290.  Further, on Mr Koon’s case, he paid over the said sum as a result of intimidation by Mr Hui and/or his agents. That happened on 3 April 2009. It is therefore time-barred in any event.

291.  I accept Mr Fung SC’s submissions that based on Mr Koon’s pleaded causes of action in relation to the counterclaim of HK$1.5 million should be dismissed.

292.  Although I also have reservations over Mr Hui’s explanation that the oppressor would somehow give a token of appreciation to the oppressed, comparatively speaking, Mr Koon’s case is even more incredible. As Mr Koon bears the burden of proving his counterclaim, I would have to return a value of zero to his counterclaim. Accordingly, his counterclaim is dismissed.

293.  For the sake of completeness, I should mention that I have duly considered Mr Fung SC and Mr Chain’s very helpful written and oral submissions. The fact that I do not specifically deal with each and every point does not mean that I have not considered the same.

294.  Also as a result of the findings by this Court, in particular, the Oral Agreement never exists, I do not find it necessary to deal with the illegality issue.

DISPOSITION

295.  For all the reasons stated above I make an order that:

(1)  The 1^st Defendant do pay the Plaintiff damages in the sum of HK$135,000,000, together with interest thereon at HSBC prime rate plus 1% from 23 June 2009 until date of judgment and thereafter at judgment rate until payment;

(2)  The 1^st Defendant’s counterclaim set out in the Re-Re-Amended Defence and Counterclaim be dismissed.

296.  As far as costs is concerned, it is an abuse of process for a litigant, with full knowledge of the facts, to dishonestly invent a claim, and the Court will award costs on an indemnity basis against such a litigant: see Lai Sin Yan Elsie v Tata Communications (Hong Kong) Ltd [2020] 4 HKLRD 363 at §7, where Bharwaney J adopted the observations by Moses LJ in South Wales Fires and Rescue Service v Smith [2011] EWHC 1749 (Admin) at §§2-4:-

“[2] For many years the courts have sought to underline how serious false and lying claims are to the administration of justice. False claims undermine a system whereby those who are injured as a result of the fault of their employer or a defendant can receive just compensation.

[3] They undermine that system in a number of serious ways. They impose upon those liable for such claims the burden of analysis, the burden of searching out those claims which are justified and those claims which are unjustified. They impose a burden upon honest claimants and honest claims, when in response to those claims, understandably those who are liable are required to discern those which are deserving and those which are not.

[4] Quite apart from that effect on those involved in such litigation is the effect upon the court. Our system of adversarial justice depends upon openness, upon transparency and above all upon honesty. The system is seriously damaged by lying claims. It is in those circumstances that the courts have on numerous occasions sought to emphasise how serious it is for someone to make a false claim, either in relation to liability or in relation to claims for compensation as a result of liability.”

297.  In the present case, I agree that Mr Koon well knew that he had obtained the 100 million shares by intimidation and coercion.  Given the success of such intimidation and coercion and not being satisfied with the 100 million shares already obtained, Mr Koon concocted the Oral Agreement to disguise such intimidation and coercion and to demand yet more Shares. If indeed the Oral Agreement existed, he could have commenced a proper High Court Action to claim for it. This was what he did in 2012.

298.  It is also deplorable for him to engage “大圈尻Dee” and his gang, not once but twice, to extort further substantial number of Sino Union shares from Mr Hui. This shows little respect to our legal system.

299.  I am of the view that Mr Koon’s conduct should be met by an order for costs against him to be taxed on an indemnity basis.

300.  Accordingly, I also make a cost order nisi that the 1^st Defendant do pay the costs of and occasioned by this action (including the costs of and occasioned by the 1^st Defendant’s counterclaim and any costs reserved) to the Plaintiff on an indemnity basis, to be taxed if not agreed, with certificate for two counsel.

301.  At the invitation of both counsel teams, for the purpose of taxation, I also certify 4 refreshers for the written Closing Submissions and 3 refreshers for the written Reply Closing Submissions.

302.  Finally, it remains for this Court to thank both counsel team, Mr Fung SC and Mr Lam for Mr Hui, Mr Chain and Mr Lam for Mr Koon for their most able and admirable assistance rendered to this Court.