E FINANCE LTD v. MAK MUN YEE CONNIE AND ANOTHER

HCMP 219/2020& HCA 1876/2021

(Heard together)

[2025] HKCFI 862

HCMP 219/2020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 219 OF 2020

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BETWEEN

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AND

HCA 1876/2021

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1876 OF 2021

_________________

BETWEEN

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(Heard together)

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JUDGMENT

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Introduction

1.  E Finance Limited (“the Company”) was and still is a licensed moneylender under the Money Lenders Ordinance, Cap.163. It commenced these proceedings against Mak Mun Yee Connie (“Connie”) to enforce a legal charge dated 12 November 2019 (“the Legal Charge”) by an Originating Summons dated 10 March 2020 (“the OS”). Madam Doo joined the OS proceedings subsequently.

2.  On the other hand, Madam Doo brought an action by writ issued on 13 December 2021 (“the Action”) against Ho Yuet Sang (“Ho”), Li Cho Chuen (“Li”) and Connie and she seeks to, among other matters, set aside an assignment (“the Assignment”) whereby she assigned a property of her late mother (“the Property”) to Connie as the sole executrix of the estate of her late mother. The Company intervened and was joined as the 4^th defendant subsequently.

3.  In a nutshell, the Company extended a loan to Connie under a written loan agreement dated 12 November 2019 (“the Loan Agreement”) and the loan was secured by the Legal Charge whereby the Property was charged in favour of the Company. Connie defaulted on repayment pursuant to the Loan Agreement and so the Company seeks to enforce the Legal Charge and asks for delivery of vacant possession of the Property by the OS. Madam Doo was joined as the second defendant in the OS by an order dated 10 May 2021 on the basis of her actual occupation of the Property.

4.  In the Action, Madam Doo claims that the Assignment was not supported by good consideration and/or induced by fraud. She seeks, among other things, declarations to the effect that the Assignment and the sale and purchase agreement dated 11 October 2019 (“the FSPA”) in respect of the Property are void and that Connie holds the Property on trust for her.

5.  By an order of Master David Chan dated 7 September 2022, the OS and the Action were to be tried together with the Action being the leading case. This is the trial.

6.  Madam Doo has acted in person since 8 August 2024. Only Madam Doo and the Company took part in the trial.

Undisputed background facts

7.  I shall first give an account of undisputed facts relevant to the OS and the Action. A large majority of these facts are evidenced by documentary evidence.

8.  The late mother of Madam Doo purchased the Property and became its sole registered owner in 1980. The late mother of Madam Doo passed away in November 2003 leaving her last will (“the Will”) in which Madam Doo was appointed the sole executrix of the estate.

9.  Under the Will, Madam Doo was also bequeathed 75% of the estate and the remaining 25% was bequeathed to her sister Doo Sze Man Jennifer. Madam Doo obtained the grant of probate in respect of the estate of her late mother on 4 October 2018. The major asset of the estate is the Property.

10.  On 27 September 2019, Madam Doo signed a provisional sale and purchase agreement (“the PSPA”) for the sale of the Property to Connie. The express terms of the PSPA included the following terms:

(1) The sale price of the Property was agreed to be HK$7,500,000 (“the Purchase Price”).

(2) The initial deposit of HK$2,500,000 (“the Initial Deposit”) should be paid at the time of the execution of the PSPA.

(3) The FSPA would be signed on 30 October 2019.

(4) On or before the completion of the sale on 30 October 2019, the balance of the Purchase Price in the amount of HK$5,000,000 should be paid.

(5) The Property was sold to Connie free from all encumbrances.

(6) Madam Doo sold the Property to Connie on the basis that she was the executrix of the estate of her late mother.

(7) The PSPA superseded all previous negotiations, representations, understanding and agreements of the parties.

11.  Madam Doo further signed at the end of the PSPA to acknowledge receipt of the Initial Deposit of HK$2,500,000.

12.  On 9 November 2019, Madam Doo and Connie entered into a written tenancy agreement (“the Tenancy Agreement”) in respect of the Property. The tenancy created thereunder covered the 3-year period from 12 November 2019 to 11 November 2022 at a monthly rent of HK$18,000 (“the Tenancy”).

13.  On 12 November 2019, Madam Doo and Connie executed the FSPA and the Assignment dated 12 November 2019 whereby Madam Doo assigned the Property to Connie.

14.  In the Assignment, Madam Doo expressly acknowledged receipt of the Purchase Price.

15.  Throughout the sale transaction in respect of the Property, both Connie and Madam Doo were separately represented by their respective solicitors. Connie was represented by Messrs. David Y.M. Man & Co (“DMC”) and Madam Doo was represented by Messrs. YL Yeung & Co (“YLY”).

16.  On the same day, Connie executed the Loan Agreement and the Legal Charge with the Company. Under the Loan Agreement, the Company agreed to lend Connie an amount of HK$5,000,000 repayable by 11 November 2020. Interest was payable throughout the loan period on a monthly basis on the 11^th day of the month. The interest rate was 14.4% for the first month instalment and thereafter 12% for the 2^nd to 12^th month instalments.

17.  Connie signed on the Loan Agreement to acknowledge her receipt of the loan amount of HK$5,000,000.

18.  On 11 December 2019, Connie defaulted on the very first interest instalment and has never made any repayment under the Loan Agreement ever since.

19.  The Company then on 10 March 2020 issued the OS to enforce the Loan Agreement and the Legal Charge against Connie. In the OS, the Company prays for:

(1) Payment of all money due and owing under the Legal Charge;

(2) In default of payment of such sum as may be adjudged to be due under the Legal Charge, delivery of vacant possession of the Property and title deeds and documents in the possession of Connie of the Property; and

(3) Costs on a full indemnity basis.

20.  By summons dated 27 November 2020, Madam Doo applied to join the OS proceedings. The application was supported by her affirmation dated 4 January 2021 in which she alleged that the sale transaction in respect of the Property was procured by fraud and she did not know the contents of the PSPA, the FSPA and the Assignment (“the Supporting Affirmation”). On that basis, she now claims to retain the beneficial interest in the Property.

21.  By an order dated 7 January 2021 (“the Judgment Order”), Master Lai entered monetary judgment against Connie and adjourned the claim for delivery of vacant possession of the Property of the Company to 12 May 2021.

22.  By a consent order dated 10 May 2021, Master Lai ordered that Madam Doo be added as the 2^nd defendant in the OS proceedings and the OS proceedings be continued as if the cause had been begun by writ.

23.  In respect of the Action, by summons filed on 7 July 2022, the Company applied to intervene the Action.

24.  By an order of Master Ho dated 18 July 2022, it was ordered that the Company be granted leave to join as the 4^th defendant in the Action.

25.  None of the other parties has put in appearance in these proceedings. They have even failed to file an Acknowledgment of Service. The only protagonists at the trial are Madam Doo and the Company. The only live witnesses are Madam Doo herself and Mr Ng who is the director of the Company.

Respective cases of the parties

The case of the Company

26.  The case of the Company is simple and straightforward. It merely seeks to enforce the Loan Agreement and the Legal Charge when the indebtedness of Connie and her breach of the same are not challenged or contradicted by any contrary evidence. Indeed, the Company has already obtained the Judgment Order against Connie.

27.  The Company has since 2012 carried on its money lending business in Hong Kong as a wholly owned subsidiary of Minerva Group Holding Limited, a company listed on the Main Board of the Hong Kong Stock Exchange (Stock Code: 0397).

28.  At the trial, Mr Ng explained the steps taken by the Company leading to the signing of the Loan Agreement and the Legal Charge. Due diligence exercise was carried out.

29.  As a result, the Company obtained the following information:

(1) Connie had a stable job with a monthly salary of HK$62,400 per month;

(2) Connie sold her residence on 1 August 2019 and intended to purchase and move to the Property to improve her living condition;

(3) Connie was in need of a mortgage loan of HK$5 million to purchase the Property;

(4) The registered owner of the Property was Madam Doo as the executrix;

(5) The Property was then subject to two legal charges in favour of Quick Credit Limited (“QCL”); and

(6) The market valuation of the Property at the material time, with saleable area of about 448 square feet, was about HK$7,500,000.

30.  The Loan Committee had a credit assessment with all the information obtained and made the decision to approve the mortgage loan application of Connie. The Company then proceeded to instruct YLY to carry out title investigation of the Property and to prepare the Legal Charge.

31.  On 11 November 2019, to perform its obligations under the Loan Agreement, the Company remitted a sum of HK$5,000,000 being principal under the Loan Agreement to the client’s account of YLY acting as the stakeholder of the said amount.

32.  After the execution of the Loan Agreement and the Legal Charge, with the authorization of the Company, YLY paid out the sum of HK$5,000,000 to Madam Doo directly by 4 cheques all dated 12 November 2019 payable to such recipients as instructed by Madam Doo. The details of the said 4 cheques are as follows:

Payee	Amount	Purpose
QCL	HK$3,703,627	Redemption money for the discharge of the two existing legal charges
Madam Doo	HK$1,286,373	Partial payment of the Purchase Price
DMC	HK$6,000	Legal costs
Messrs. Wong Fung & Co. (“WFC”)	HK$4,000	Legal costs
	Total: HK$5,000,000

33.  On the basis of Connie’s default on her repayment under the Loan Agreement and the Legal Charge, the Company obtained the Judgment Order.

The case of Madam Doo

34.  Madam Doo, with the assistance of her former solicitors, has filed lengthy pleadings and affirmations. For present purposes, the following summary of her core allegations would suffice.

35.  By way of background, Madam Doo received tertiary education in Hong Kong and had worked for the Immigration Department since about 1995.

36.  Since the passing of her late mother, Madam Doo has been residing in the Property by herself since 2003.

37.  In about late 2017, Madam Doo was seriously indebted to financial companies and also Hang Seng Bank for her outstanding credit card payments.

38.  In early 2018, Madam Doo received a cold call from Ho. She did not know Ho but Ho offered her financial assistance to pay off her debts. She then came to know Ho.

39.  Through the arrangements of Ho, Madam Doo obtained loans to ease her financial difficulties. First, in March 2018, Madam Doo attended the office of Messrs. Philip T.F. Wong & Co (“PW”), a firm of solicitors, to sign a loan agreement dated 19 March 2018 with Ms Tsoi for a loan of HK$900,000 (“the 1^st Loan”). Madam Doo did not know Ms Tsoi personally and was not involved in any discussion with her about the 1^st Loan.

40.  Only a portion of the 1^st Loan went to the pocket of Madam Doo. First, a sum of HK$162,000 was kept by Ms Tsoi for advance payment of interest for 18 months. Second, a sum of HK$300,000 was paid to United Asia Finance Limited for settlement of Madam Doo’s indebtedness. Third, a sum of HK$180,000 was paid to PrimeCredit Limited to discharge Madam Doo’s outstanding liability. Fourth, PW were given a sum of HK$8,000 as their professional charge of handling all the matters relating to the 1^st Loan and another sum of HK$35,000 for handling Madam Doo’s probate application. Finally, the remaining sum of HK$215,000 was actually paid to Madam Doo.

41.  In September 2018, Madam Doo was still unable to clear her debts and Ho proposed another loan of HK$1 million for Madam Doo (“the 2^nd Loan”). The 2^nd Loan was to be extended by one Mr Tsang whom Madam Doo did not know on the condition that Madam Doo made a declaration at the Home Affairs Department to the effect that Mr Tsang lent the 2^nd Loan to Ho and another declaration to the effect that Madam Doo borrowed the 2^nd Loan from Ho. Those declarations were required by Ho as Mr Tsang would only agree to extend a loan to Ho and not to someone he did not know including Madam Doo.

42.  Madam Doo agreed and went to the Home Affairs Department with Ho on or about 26 September 2018 to make the declarations.

43.  Eventually, Ho only gave HK$250,000 of the 2^nd Loan to Madam Doo and he kept the balance of HK$750,000. Ho claimed that he would pay the balance of the 2^nd Loan by instalments to the bank account of Madam Doo on a monthly basis. However, Ho failed to do so.

44.  On 21 November 2018, PW acting for Ms Tsoi issued a letter to Madam Doo. In the letter, PW alleged that Madam Doo was in breach of the 1^st Loan Agreement by her application for the 2^nd Loan from a finance company. Madam Doo then sought assistance from Ho and Ho told her that Ms Tsoi had decided to expedite full repayment of the 1^st Loan because of her breach.

45.  Ho further suggested to Madam Doo that she should secure another loan to repay the 1^st Loan. Madam Doo agreed and this time she wanted to borrow HK$2.5 million.

46.  In December 2018, Ho introduced Ms Law who was the mortgage advisor of QCL to Madam Doo. On 31 December 2018, Ho brought Madam Doo to the office of QCL in Yuen Long and Madam Doo signed some documents for the purpose of a loan of HK$2.5 million there (“the 3^rd Loan”).

47.  Then they went to WFC to sign a legal charge to secure the 3^rd Loan. The legal charge was registered in the Land Registry.

48.  On the same day, Madam Doo received HK$1 million of the 3^rd Loan by way of a cheque only. The remaining HK$1.5 million was retained by WFC for the following dispositions.

49.  First, on 4 January 2019, a cheque of HK$848,613 was issued to Ms Tsoi to settle the 1^st Loan. Second, on the same day, another cheque of HK$5,600 was issued to PW for their legal costs and disbursement. Third, on 28 January 2019, a cheque of HK$300,000 was issued to Madam Doo. Fourth, on 8 April 2019, a cheque of HK$310,864.71 was also issued to Madam Doo. Finally, the remaining sum of HK$34,922.29 was used to settle outstanding management fee, registration fee and disbursements.

50.  After Madam Doo was given the cheque of HK$1 million on 31 December 2018, she was asked to go to the Bank of China branch in Yuen Long to deposit the cheque into her account. Madam Doo did so.

51.  Then Ho asked Madam Doo to pay him HK$850,000 so that he could manage her finance more effectively and repay her creditors including QCL and Mr Tsang. Ho promised to transfer the balance to her account.

52.  However, Ho again failed to keep his promise and did not pay Madam Doo the full amount of HK$850,000.

53.  In August 2019, Ho told Madam Doo that the 3^rd Loan was not enough to pay off her debts and suggested her that she should apply for another loan of HK$1 million from QCL. Madam Doo agreed and entered into another loan agreement with QCL for a loan of HK$1 million on 29 August 2019 (“the 4^th Loan”). The 4^th Loan was secured by a further charge on the Property. Madam Doo was given a cheque of HK$1 million.

54.  Similarly, after depositing the said cheque, Madam Doo paid Ho a sum of HK$700,000 for him to repay the 2^nd Loan. She alleged that Ho told her that he would pay such a sum into her account by monthly instalments.

55.  Ho defaulted and did not transfer any money to Madam Doo out of the sum of HK$700,000 from the 4^th Loan.

56.  Madam Doo alleges that out of the 1^st to 4^th Loans (totalling HK$5.4 million), Ho has not accounted to her a total balance of HK$1,909,490 and she only received from him a total sum of HK$390,510 from October 2018 to August 2019. Hence, in the Action, Madam Ho makes a monetary claim for the said sum against Ho.

57.  Madam Doo was still in financial difficulties and she still trusted Ho despite all his repeated defaults. Ho came up with a plan to raise funds with the Property. He suggested that the Property should be transferred to another party for 3 years and she could buy back the Property thereafter. Madam Doo was interested in the plan.

58.  Subsequently, Ho introduced Mr Chan to Madam Doo and MrChan in turn introduced Li to Madam Doo. Ho, Mr Chan, Li, Connie and Madam Doo attended a meeting in September 2019. Li explained the plan to Madam Doo in the following terms (“the Plan”):

(1) Connie would first give Madam Doo the Purchase Price in exchange of a temporary transfer of the Property to her.

(2) The Property would all along belong to Madam Doo. Connie would transfer the Property to Madam Doo three years later and Madam Doo would pay Connie the market price of the Property in return at the time of the transfer.

(3) Madam Doo could continue to reside at the Property when it was registered in the name of Connie on a temporary basis.

(4) The temporary transfer was for 3 years to avoid special stamp duty.

59.  A few days later, Madam Doo indicated to Ho that she wanted Connie to additionally agree that she would not resell or mortgage the Property for her own purpose and she would transfer the Property back to her after 3 years (“the Additional Term”). Connie agreed to the Additional Term.

60.  On 26 September 2019, Madam Doo attended a meeting in the office of YLY (“the September Meeting”). Mr Chan, Li and Connie were present. Another young man known to be Kevin Wong (“Wong”) also took part. Wong was Credit Manager of the Company. At the meeting, Li reiterated the Plan and the Additional Term.

61.  On the following day, Madam Doo, Mr Chan and Connie met in a café in Fortress Hill and the PSPA was signed. Connie then handed over a cheque of HK$2.5 million (“the $2.5m Cheque”) to Mr Chan. Mr Chan kept the $2.5m Cheque.

62.  On 3 October 2019, Madam Doo went to the office of DMC with Li to meet Michael Lee who was the law clerk of DMC. Michael Lee would handle the transactions relating to the transfer of the Property on behalf of Madam Doo.

63.  On 24 October 2019, Li told Madam Doo that she was required to pay the stamp duty of the transfer transaction in the sum of HK$400,000. Li further said that he had already arranged a loan advanced by Man Base International Development Limited (“Man Base”). Madam Doo agreed and went to the office of YLY to sign a loan agreement with Man Base for the loan of HK$400,000 (“the 5^th Loan”). With the 5^th Loan, Li claimed that he would pay the stamp duty for Madam Doo.

64.  On 9 November 2019, Ho took Madam Doo to the home of Connie. On the basis of the Plan with the Additional Term confirmed by Connie, Madam Doo signed the Tenancy Agreement.

65.  On 12 November 2019, Madam Doo went to the office of YLY to complete the transfer of the Property to Connie temporarily. Ho, Mr Chan, Li, Connie, Wong and Michael Lee were present. Madam Doo signed the FSPA, the Assignment, a photocopy of the $2.5m Cheque ad some cheques prepared by YLY.

66.  Madam Doo had no idea of the contents of the documents signed by her. Nor did she receive the $2.5m Cheque.

67.  On 12 November 2019, Madam Doo received a cheque of HK$1,289,737. Ho accompanied her to Hang Seng Bank. Li and Connie were also there. Li asked Madam Doo to transfer HK$400,000 to Man Base for the repayment of the 5^th Loan after depositing the said cheque. Madam Doo did so.

68.  D1 then asked Madam Doo to withdraw HK$880,000 in cash to pay HK$630,000 to Connie for the rent under the Tenancy Agreement. The balance would be used to repay her outstanding indebtedness. Madam Doo did so and gave Mr Chan HK$880,000.

69.  In early December 2019, Ho called Madam Doo to tell her that Connie was missing. It was until then that Madam Doo realised that Connie had created the Legal Charge to secure her loan under the Loan Agreement with the Company.

70.  Since then, Madam Doo was troubled by the enforcement actions taken by the debt collectors to recover the loans made to Connie at the Property. She reported the matter to the police on 11 January 2020.

71.  On 4 February 2020, Ho, Li and Madam Doo had a meeting in a restaurant in Sheung Wan (“the Feb 2020 Meeting”). Li claimed to be an employee or an agent of the Company and in charge of the Company. He could make decisions relating to the Property for the Company. Li said Madam Doo could continue to reside at the Property. He further indicated that he was just able to locate the $2.5m Cheque and handed it over to Madam Doo. He told Madam Doo that it would be dishonoured if presented for payment, in which case Madam Doo could sue Connie.

72.  On 6 February 2020, the $2.5m Cheque was dishonoured and returned to Madam Doo.

73.  Madam Doo says that despite repeated demands, Connie has failed to pay the Initial Deposit in the sum of HK$2.5 million and the stamp duty of HK$400,000. Madam Doo contends that Connie was in breach of the PSPA and/or the FSPA by failing to provide good consideration and is liable to transfer the Property back to her.

74.  Madam Doo claims that Connie should pay her damages for fraud and/or misrepresentation and that she held the Property as her trustee by reason of the Additional Term. Connie and the Company were also unjustly enriched.

75.  Alternatively, Madam Doo claims against Connie for the amount of HK$2.5 million and payment of the stamp duty in the amount of HK$400,000.

76.  Madam Doo says that Ho, Li and Connie induced her into signing the PSPA, the FSPA and the Assignment by fraud. She relies on the Plan and the Additional Term and the fact that Connie mortgaged the Property for her own purpose and eventually failed to transfer the Property back to her.

77.  To implicate the Company in the alleged fraud perpetrated on her, Madam Doo basically relies on three matter. First, she pleads that by reason of the attendance of Wong at the two meetings in the office of YLY, the Company was aware of Connie’s non-payment of the Initial Deposit and the stamp duty.

78.  Second, Madam Doo asserts that the Company was a party to or had knowledge of the facts and acts set out in her pleadings. She avers that the Company is bound by the acts and knowledge of Ho, Li and/or Wong.

79.  Third, Madam Doo says that the fraudulent acts by Ho, Li and/or Wong were committed within the authority of the agent or employee or a contractor of the Company or in excess of their authority and the Company knew or ought to have known about the same.

Discussion

80.  At the very outset, I have to point out that many of Madam Doo’s claims, especially those made against Connie and the Company, are incomprehensible and illogical despite her pleadings were filed when she was legally represented. Madam Doo has obviously adopted a kitchen sinks approach and sought to exhaust all possible causes of action without serious consideration of their essential elements. Most of her claims are legally unsound and cannot survive legal analysis. Nevertheless, I shall first examine the validity of her key factual allegations.

81.  Mr Wong, for the Company, submits that though Ho, Li and Connie have done nothing to deny the claim of Madam Doo, Madam Doo is required to discharge the burden of proof and prove her pleaded case with credible evidence. He must be right.

82.  Only Madam Doo and Mr Ng testified. Mr Ng was not meaningfully cross-examined. He in fact knows nothing about the alleged money transactions among Madam Doo, Ho, Mr Chan, Li and Connie. Madam Doo does not allege that Mr Ng does. His evidence is largely supported by undisputed contemporaneous documents. I find him to be a reliable and truthful witness.

83.  Madam Doo, on the contrary, is not assisted by supportive independent contemporaneous documents to prove her factual allegations. This is a significant handicap considering her evidential burden to be discharged in respect of her fraud claim.

84.  Madam Doo’s credibility is determinative of her claims. Particular attention has been paid on her oral testimony for the purpose of my assessment of her credibility. Madam Doo struck me as an undependable and dishonest witness through and through. She did not show sufficient knowledge of her pleaded case and she had little conviction in her allegations in her witness statement. She was prone to deflecting the blame on her former solicitors whenever she was unable to deal with the challenge to her evidence in cross-examination.

85.  Whilst the focus of her pleading and witness statement filed in the Action is on the Plan and the Additional Term, the Supporting Affirmation and her Defence filed in the OS proceedings tell a different story. There, Madam Doo claims that she was not aware of the contents or legal effects of the PSPA, the FSPA and the Assignment. If she had relied on the Plan and the Additional Term and signed the conveyancing documents, she must have known their contents and the legal effect.

86.  At trial, Madam Doo insisted on her position in the OS proceedings.

87.  It is plain that Madam Doo’s purported lack of knowledge alone could not assist her. The established principles are that Madam Doo must be held to the documents which she has chosen to sign unless there is shown to be a recognized legal basis for concluding that her apparent consent has been in some way vitiated or that reliance on those documents by some other persons falls into some category of unconscionable conduct justifying relief in equity: see Ming Shiu Chung v Ming Shiu Sum (2006) 9 HKCFAR 334 at §84 per Ribeiro PJ.

88.  More fundamentaly, I simply cannot believe her testimony. To begin with, I cannot accept that an educated civil servant making HK$33,000 per month would go to the office of a solicitors firm and unquestioningly sign some documents without any knowledge of their contents and legal effect.

89.  Further, if Madam Doo had been completely in the dark, she would not have accepted the $2.5m Cheque and presented it for payment. If she had not known that the legal effect of the FSPA and the Assignment, she would not have signed the Tenancy Agreement.

90.  I have perused the WhatsApp messages exchanged between Madam Doo and Connie from 27 September 2019 to 5 January 2020 (“the WhatsApp Messages”). Their conversations actually rebut her purported lack of knowledge of the documents signed by her.

91.  On 27 September 2019, at 11:14 a.m., Madam Doo told Connie that Mr Chan would bring a preliminary agreement for them to sign in Fortress Hill or North Point at about 4:30 p.m..

92.  At 4:43 p.m. on the same day, Madam Doo sent some photographs of the PSPA signed by them to Connie.

93.  It is, thus, evident that Madam Doo was fully involved in the sale transaction of the Property. She could not give any comprehensible explanation about this contrary evidence. She even had the audacity to say that she had no recollection about the PSPA.

94.  I have also perused the transcript of the conversations among Ho, Li and Madam Doo at the Feb 2020 Meeting purportedly recorded by Madam Doo (“the Transcript”).

95.  The Transcript indeed demolishes the case of Madam Doo against the Company. It points to the non-existence of the Plan and the Additional Term underpinning her fraud claim. It shows that the Company was not involved in their scheme. It does not support the allegation of Madam Doo that Li was the employee or the agent of the Company or in any way duly authorised by the Company to make any representation on its behalf.

96.  The conversations took place after the Assignment was signed and Connie defaulted the Loan Agreement and went missing purportedly. From the Transcript, it can be seen that Li made certain assurances to Madam Doo to the effect that when the Company obtained possession of the Property, the Company might sell it to Madam Doo at HK$5 million odd but whether Madam Doo had the money to purchase the Property from the Company was another matter.

97.  Madam Doo then asked Li whether the Company would press for delivery of the possession of the Property and Li told her to expect that it would succeed in doing so in about 9 months’ time. Li advised Madam Doo that she could use the Tenancy Agreement to resist delivery of vacant possession.

98.  They went on to discuss how to ensure that the Tenancy Agreement could prevent the Company from obtaining an order for delivery of vacant possession of the Property.

99.  Throughout the conversation, there was no mention about the Plan and the Additional Term. Nor was there any suggestion that the Company was in any way involved in the Plan. Nothing was said about Wong, either.

100.  Neither Ho nor Li represented to Madam Doo that they were the employees or agents of the Company. Li did speak as if he could control and manipulate the actions of the Company. However, it is plain that Li merely bluffed and he did not have any actual authority to act on behalf of the Company. If indeed Li had had the authority to control the Company, Li would have avoided any legal action to be taken to claim possession of the Property pursuant to the Legal Charge and it would not have been necessary for them to consider how to resist such a legal action.

101.  In the premises, Madam Doo’s allegation of the Plan and the Additional Term is not proved by credible evidence. Her fraud case has no evidential basis. Any of her causes of action based on the allegation of the Plan and Additional Term must fail.

102.  For completeness, I should make it clear that I do not accept any allegation about Li’s authority to act for the Company and Wong’s involvement in any alleged wrongful activities on behalf of the Company.

103.  The evidence of Mr Ng is clear and well-supported by documents. Li was merely a representative of Hong Kong Golden Express Limited (“Golden Express”) which was engaged by the Company to promote its business. There was an agreement dated 7 May 2018 made by the Company and Golden Express whereby Golden Express agreed to use its reasonable endeavours to introduce prospective clients to the Company for borrowing or obtaining loans from the Company.

104.  There is an express condition in the said agreement in the following term:

“Golden Express shall not represent or hold out to any prospective client that it has any authority from the Company to make any agreement with the client which will bind the Company in any way in relation to the processing and approval of an application for the loan or the granting of the loan, nor have authority whether express or implied from the Company to obtain any information from any prospective client in connection with its application. Without any prior written approval of the Company to be given from time to time, Golden Express shall not make any representation in respect of the terms and conditions of the loan and Golden Express shall indemnify the Company for any loss or damages on a full indemnity basis, including but not limited to all costs and expenses and claims, caused by any such representations to be made by Godin Express.”

105.  As recorded in the Loan Agreement, Li was just an agent of Golden Express. He introduced Connie to the Company as a prospective client.

106.  The solicitors of the Company made enquiries with Golden Express concerning Li after the commencement of these proceedings. Golden Express confirmed in writing on 8 February 2022 that Li was one of their many outsourced agents.

107.  Madam Doo did not challenge this evidence when cross-examining Mr Ng. I have no reason not to accept it.

108.  As regards Wong, Mr Ng explained that he was Loan Manager of the Company. He was responsible for handling the loan application of Connie including the preparation of draft loan agreements. Wong was present at the meetings merely for the Loan Agreement and the Legal Charge.

109.  Wong left the employment of the Company in January 2021. Mr Ng has tried to contact him by phone but in vain.

110.  Again Madam Doo did not dispute these matters at trial.

111.  It should be noted that it is not controversial that the Company did make the advancement of HK$5 million to Connie pursuant to the Loan Agreements.

112.  The Company has provided good consideration for the Loan Agreement and the Legal Charge. By the Assignment, the Property was transferred to Connie. There is no concern about the validity of the Legal Charge. There is no reason why the Company should not be allowed to enforce the Legal Charge and obtain vacant possession of the Property.

113.  Now I turn to the claims of Madam Doo against Ho, Li and Connie.

114.  I have read all the messages exchanged between Ho and Madam Doo in addition to the Transcript and the WhatsApp Messages. The overall impression I have is that they had been engaged in some suspect transactions and none of them acted honestly. Ho was always evasive and did not keep his promise to pay Madam Doo. Li gave Madam Doo bad advice. Connie herself was head over heels in debt and from the Transcript it can be seen that she even asked Madam Doo to lend her money. She does not appear to be a bona fide purchaser of the Property having a genuine intention to acquire the same for her own occupation.

115.  I am not surprised that Ho and Li may owe some money to Madam Doo. However, on account of the dubious nature of Madam Doo’s evidence, I am not convinced that she has presented a real and full picture to this court. I am unable to act on her evidence and I do not know what they have agreed with each other. I am not satisfied that her allegations against Ho and Li can be proved even though they have not contested her claims and adduced any evidence in rebuttal.

116.  On the basis of the unchallenged allegations that Connie failed to pay the stamp duty of HK$400,000 under the FSPA and that the $2.5m Cheque issued to Madam Doo was dishonoured, I am prepared to allow Madam Doo’s claim against Connie in respect of these two sums.

117.  Lastly, I note that the Company has a counterclaim in the Action and an all-embracing claim for damages is included. Very sensibly Mr Wong has made no submissions on this monetary claim in both opening submissions and closing submissions. I treat it as abandoned.

Conclusion and order

118.  In light of the foregoing analysis, I come to the conclusion that the Company’s claim in the OS must be allowed and the Company is entitled to vacant possession of the Property. I further conclude that all of the claims of Madam Doo in the Action should be dismissed except judgment should be entered against Connie for the sums of HK$2.5 million and HK$400,000. The Company’s claim for vacant possession in its counterclaim should be granted.

119.  I make an order that Madam Doo do deliver vacant possession of the Property together with all title deeds and documents in relation to the Property in her possession (if any) on or before 30 May 2025.

120.  There is no apparent reason why costs should not follow the event. Mr Wong in his closing submissions asks this court to make a costs order nisi that as between Madam Doo and the Company, Madam Doo do pay the Company its costs of both the OS and the Action including all costs reserved, to be taxed if not agreed. I so order.

121.  As between Madam Doo and Ho and Li, I make an order that there be no order as to costs. I order that Connie should pay Madam Doo her costs of the Action, to be taxed if not agreed.

122.  It remains for me to thank Mr Wong for his able submissions.

In respect of HCMP 219/2020：

In respect of HCA 1876/2021：