FONG SZE MING v. YAI MING INVESTNEET CO LTD AND ANOTHER

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JUDGMENT

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1. Gentlemen, I had hoped to have last evening and night to devote to the preparation of a skeleton judgment: Alas that time was denied to me, and, as you are aware, I am to-day not   in the best of health, but I am not prepared to stand this over to tomorrow; so this judgment will be given extempore and will probably lack the elegance that you may be expecting of it.

2. To begin this judgment I shall embark on a history. Because of the manner in which I   propose to dispose of the issues, it behoves me to commence with the recitation of a chronology.

3. In the New Territories of this Colony, near to a place known to most of us as Dragon Inn, or Yung Lung Bi Shui, there lies a large piece of land which originally belonged to a Mr. LEUNG Pak-chung. That piece of land is known as “LEUNG Yuen.” It was the subject of a mortgage about ten years ago, and Mr. Leung concerning the land I have described.

4. Now, in respect of that land, the Government issued Letters A and B on the 7^th   of August, 1974. Those are to be found at pages A1to A4 and A5 to A9 respectively.

5. On that very day, the 1^st defendant was incorporated. That is to be found at   page A10.

6. Some six days later, Mr. Leung Pak-chung accepted and signed the Letters A and B. That is   to be found at pages A4 and A9.

7. In the following year, Mr. KUNG Yeuk-man and Mrs. KUNG WONG Sau-hin acquired the   shareholding in the 1^st defendant. The 1^st defendant by that time   held the Letters of Entitlement to which I have referred.

8. The acquisition that I have just referred to is minuted in the First Directors' Meeting of the defendant on the 12th of April, 1975, which is Exhibit 14B. It is a very strangely worded Minute because it is a Minute of the company, and the first resolution is that it was decided that all the shares of the company should be purchased. Whoever drew this did not know much about the procedure. It would appear that that may be the plaintiff, because he signed qua secretary. The two directors, Mr. and Mrs. KUNG, signed in the name of KUNG Yeuk-man and WONG Sau-hin. The address was given as 9 Wing Kut Street. One of the resolution was that the plaintiff be appointed company secretary. Wing Kut Street had been mentioned a number of times in the course of this Action.

9. The Letters of Entitlement were valued at the 31st of March, 1977 at about $2,500,000: That   is to be found at page A30.

10. In October 1977 certain agreements, undertakings, etc., came into existence, which are to   be found in Exhibit 50, concerning the land in question, and involving a Mr. FONG Ching, Mr. CHIU Ming-sun, who featured largely in this action, and a Mr. K.K. WONG, of whom the   same can be said. As I say, those documents are to be found in Exhibit 50.

11. The first document with which I am concerned today is Exhibit 3. It is on the paper of   Verbier Investments Limited. It is dated the 8th of April, 1978. It purports to be a   letter of appointment, and it is signed by Mr. CHIU Ming-sun. The effect of it was to   appoint the plaintiff to represent Mr. CHIU in the purchasing, it says, of all the shares   in the 1^st defendant - and this is the beginning of the distinction between   these things - and the Letter B Land Exchange Entitlements for Leung Yuen, which it   describes as begin land of about 180,000 sq. ft. Mr. Chiu says that he is willing to pay   $15 m. - a considerable increase of the book value of 1977 (A30) - and he will pay a   reward to the plaintiff of $3 m.. But he provides for his own default in these words,

            

In case of a default on my part to pay such reward within the time specified, then $3 m. will be appropriated for investment as share capital in Yat Ming.”

  

Then it contains a request for assistance, and continues thus, after the signature of Mr. CHIU Ming-sun,

  

If there is any profit made, I am willing to pay one-third of all the net profit to Mr. FONG Ming as reward. For fear of words of mouth cannot serve as proof, this is specially made to this effect”,

   

  

and then it is signed again by Mr. CHIU Ming-sun. that was modified on the 12^th of April, 1978 in a manner that I shall describe in a few minutes.

12. Exhibit 17 effected the modification. It is a handwritten document in Chinese. It is   signed by both the plaintiff and CHIU Ming-sun and it reads as follows.

I emphasise at this stage, the phrase   "appropriated for investment" in paragraph 2. This document, however, was itself cancelled on the 9th of May of the same year.

13. On the 15^th of April of the same year Mr. KUNG Yeuk-man signed a document,   Exhibit 1, which was an instruction to the plaintiff to try to sell the shares of the 1^st   defendant and, in bracket, it recites the Letter A of 11,400 ft and the Letter B of   167,000 odd feet. It recites that the price is fixed at $15 m., and Mr. KUNG says that he   is willing to take $15 m., and then he says that anything over that price, irrespective of   how much, should "all belong to the plaintiff and all excess sum should be collected   directly by the plaintiff without influence", which I presume means interference,   from him, and it is said to be a remuneration for the plaintiff for his "toiling all   these years" for Mr. KUNG. The name of the 1st defendant appears on the last line of   the document preceding the signature, a signature as Mr. Litton has pointed out to me is   very shaky - but we know that Mr. KUNG was by then an elderly gentleman.

14. On the 20th of April, Sir Yuet-keung KAN’s committee made its Report to which reference had been made in the course of these proceedings – some cross-examination arose out of it - and that is Exhibit 16A.

15. I now come to the month of May, not “merry" in this case, but a month of contention.

16. The plaintiff alleges that, on the 1st of May of that year, an oral agreement was reached whereby Mr. CHIU would buy the 5,002 shares for $15m. from Mr. and Mrs. KUNG, and there would be paid to the plaintiff a commission of $3 $3 m.: see D50. Against that evidence   there is nothing, for the 2nd Defendant was not present.

17. The next day, 2nd May, Mr. CHIU met some people - I know not whom - for and on behalf of Romulus Company Limited. That meeting is recited in the first paragraph on A21A. The   letter, which is A21A to A21C, is a Letter of Intent. It recites an agreement by ROMULUS to buy all the shares of the 1st defendant, or its entitlement to the land known as Lung Yuen. I cannot believe that it means “or”, for when I look at item (m) on page A21C, issue that it deals with Stamp Duty on the transfer of shares, and not on any purchase. The Letter recites an agreement that $13m. would be released upon satisfactory verification that the 1st defendant was entitled to the Letters A, (A21B) and that Mr. CHIU was beneficially the owner of all the shares in the 1st defendant. I am not going to read right through that. It is not necessary for me to do more than to refer to (1) on page A21C, because an agreement was eventually reached between Mr. CHIU and ROMULUS.

18. According to the plaintiff, that was the day when he first met the 2nd defendant: it was ta the offices of Messrs. Peter Mark & Co..

19. The following day, 3rd May, the 1^st defendant resolved to sell all the shares to Mr. CHIU and Mr. MA for $15m., that Peter Mark & Co. should be the solicitors, that Mr. and Mrs. KUNG should resign, Mr. CHIU and 1 to the 2nd defendant. It was signed by Mr. and Mrs. KUNG, and also by the plaintiff in his capacity as Secretary. That is Exhibit 14C and it is in Chinese. It comes form a Minute Book, Exhibit 14. The place of the meeting is said to be and is recited to be 9 Wing Kut Street. The only persons present were Mr. and Mrs. KUNG; it said.

20. The same day there is another Minute, which is to be found at A41. That one is in English. The place of that meeting is said to be "Grand Building, 11th floor", which I apprehend is the address of Peter Mark & Co.; and there are various resolutions in it, including the change of the registered office of the company to 802 Gammon House and the transfer of the shares to give effect to what I have just said - 5,001 to Mr. MA.

21. The resignations are on A42 and 43, and a Form X was signed by Mr. KUNG on the same day, and lodged some five days later: That is to be found at A44. It says that Mr. Michael MA, named MA WING, no former Christian names, no former surnames, of Chinese nationality, if 29A Ventris Road, Merchant, was appointed a director on that day. Nothing in that document   redounds to the discredit of Mr. MA, because he was not asked how “nil”came into it, and he was not the maker of the document.

22. On the same day, and, it would appear, probably, most probably, in the office of Peter Mark & Co., and agreement was entered into, which is pages A22 to A28, incorporating the arrangements to which I have just referred. It is signed by Mr. and Mrs. KUNG in the presence of Mr. MARK, interpreted by one of his clerks and signed by Mr. CHIU and Mr. MA in the presence of Mr. MARK himself - and again interpreted to Mr. CHIU and Mr. MA by the same clerk. A28 is the receipt by Mr. and Mrs. KUNG for the $13m.: that is on A28.

23. The plaintiff alleges that on that day there was meeting at one of the Jade Gardens - I  remember not which - where a number of cheques was given by Mr. CHIU to the plaintiff. I will deal in greater detail with that in a moment, but I should just say that Exhibits 4 and 5 are two of those cheques. Against this piece of evidence there is nothing, and whether or not I accept it turns wholly on what view I form of the Plaintiff's credibility.

24. The plaintiff's case in regard to this meeting is pleaded in paragraphs 6 and 7 of the present Statement of Claim, which appear at D50 and 51. What paragraph 6 says is this,  

    "On or about the 3rd May 1978 the said agreement in paragraph 5(b) was orally varied in so far as it was agreed by the plaintiff and Chiu that the commission of $3,000,000 would be paid, as to $1,500,000 to Plaintiff, and as to $1,500,000 to Wong Keng Keung (hereinafter referred to as “Wong”).”:

  

And what paragraph 7 says is this,

   

"On the 3rd May 1978 Chiu and the 2nd Defendant orally informed the plaintiff and the said KUNG Yeuk Man that Chiu had nominated the 2nd Defendant and to act as a director of the 1st defendant as nominee for Chiu, and that, in all matters relating to the 1st Defendant, the 2nd Defendant would act entirely in accordance with Chiu's wishes.”.

      

The relevant words in 7 are that “Mr. MA would act entirely in accordance with Mr. CHIU's wishes”.

25. The bought and sold notes and the Instruments of Transfer of the shares in the 1st   defendant 5,001 to Mr. CHIU and 1 to Mr. MA can be found at pages A32 to 40.

26. Also on that day there was executed a Deed of Indemnity by K.K. WONG in favour of Mr. CHIU   - A45 to A48. The deed was drawn by Peter Mark & Co. It contains A47A, a plan. And   what it recites is this; that Mr. K.K. WONG has made a proposal to Mr. CHIU that he, Mr.   WONG, is “now in a   position to convert” the land I have been talking about, “an area of not less that 180,000 square feet”; and that he is in a position - again it means then - "in a position to process all application on behalf of Mr. CHIU to the Government of this Colony to obtain the following terms in respect of the said land, and in exchange for the Letters of Entitlement to which I have referred, namely:-

27. It contains a further warranty that that will all be done within five months from that date, and it contains a warranty that the rate of premium would be $110 a square foot. The last is somewhat strange in that that premium would have to be calculated in accordance with certain Government calculations, which are to be found in Exhibit 16, which is in fact chart W taken out of Sir Y.K. KAN’S report, Exhibit 16A.

28. As I said, it is a deed of indemnity. And what Mr. WONG did was to indemnity Mr. CHIU against any failure on his, Mr. WONG’s, part to obtain the said land on those terms and conditions that I have just recited, and expenses on account of himself should he enter into any agreement with a third party in connection with obtaining the said land on the terms and conditions aforesaid. It is a deed that was done in the presence of Mr. MARK, or somebody form his office, and it is an important document in this case.

29. The next day, the 4th of May, according to the plaintiff, he received a telephone call form Mr. CHIU to the effect that Mr. CHIU would be unable to meet the first cheque, which was to fail due on the 5th of May, a cheque said to be for $500,000. The Plaintiff tells me that he agreed that he would not present that cheque. My acceptance or refection of that evidence will, again, turn on my assessment of the Plaintiff's credibility.

30. The 6th of May saw the Letter of Intent (to which I referred earlier) incorporated into an agreement, and that is pages A49 to 61, containing a plan at A60. And that was an agreement drawn by Messrs. P.C. Woo & Co. and It is between Mr. CHIU and ROMULUS. And it is an agreement for the sale of all the shares in the 1st defendant, free from all charges, liens, other incumbrances and with all rights attaching thereto. The consideration “should   be calculated” - it should be conditional upon ROMULUS obtaining from the Hong Kong Government with six months - and gives a time extension - the land I referred to. It agrees that the grant from the Government “shall be on the following terms” - the same (1) to (4) that I mentioned earlier. It recites an understanding that the Government will grant the land in exchange for the Letters A and B, which are in the company’s name.

31. As I say, the total consideration is $441 per square foot, and that is said to be “inclusive of premium paid to the government for the grant of the said land”. This is only three days after the Deed of Indemnity to which I have referred. It provides for a deposit of $13 million by ROMULUS on the payment, and that, upon supply of security to ROMULUS, a further $2,400,000 would be paid.

32. Clause 7 says if the conditions are not fulfilled within 6 months, ROMULUS will have the option either to cancel the agreement or to grant an extension of time. There are warranties by Mr. CHIU that all the statements in the recital are true, that none of the   shares is subject to lien and so on. This document in fact is somewhat strange, because,  if taken at its face value, it would allow ROMULUS to keep it in existence until 3 days before the expiry of the lease of the land in question form HIS late Imperial Majesty of China to Her late Majesty Queen Victoria.

33. Additional security is dealt with at page A57. Mr. Chiu will procure YAT MING to execute a legal mortgage of the letters in favour of ROMULUS. There are certain default clauses into which I need not go. I mention the mortgage for this reason; The plaintiff told me in his evidence that he did not know until very recently indeed that Mr. Chiu had agreed to sell the shares!: He knew about a mortgage, and a sale of land, but he said not about the shares. I merely mention that in passing: But, again, whether that be so or not will hang on my decision on credibility.

34. The mortgage referred to is to be found from A61A to A61G. that is dated the same day, the 6th of May.

35. According to plaintiff, two days thereafter, on the 8th of May, there was an oral agreement between Mr. Chiu , the plaintiff and Mr. K.K. Wong at the Furama Hotal. Mr. Croft would have me believe this to be a valid, binding oral agreement, Mr. Litton would have me believe it to be a discussion, a conversation or a chat, of no contractual force.  This is a matter of the greatest contention, but against the Plaintiff's version there is nothing form the defendants. Again, whether I accept that evidence or not, will depend on my view of the respective credibility of the Plaintiff and the 2nd defendant.

36. According to the pleading, the agreement - and it is important that I read them -  contained 5 clauses and 5 sub-clauses.

37. The first clause is that the 1st defendant had no assets other that two letters of entitlement.

38. The second clause was the plaintiff and Mr. Wong should waive their tights to commission,  that is the $3 million I have referred to.

39. The third is that Mr. Chiu would seek to make a profit out of his ownership of shares and the 1st defendant's ownership of the letters of entitlement.

40. The fourth was that any monies accruing to Mr. Chiu from his ownership of the shares should be paid out in this way - and this, presumably, is upon his sale of the shares,  which would carry with them the letters of entitlement. It does not say “any monies accruing to Chiu from his ownership of the letter of entitlement”- such costs that he incurred would be paid out first.

41. The next will be $15 million to Mr. Chiu.

42. The next would be the $3 million that I have referred to which would go to the plaintiff, K.K. Wong.

43. The next that the balance should be shared equally between the three of them, Mr. CHIU, the plaintiff and Mr. Wong.

44. The last was said was that if after the payment of the costs and the $15 million, “there was less that $3 million, such remaining sum should be divided equally between Mr. Fong and Mr. Wong.”In other words they would have to forego their $1,500,000 each, if things did not turn out as well as they hoped.

45. The fifth was this; that the plaintiff and K.K. Wong should have an interest in the shares owned by Chiu to the extent that they have a claim to the monies to which I have just referred, almost like an equitable charge. Not have just referred, almost like an   equitable charge. Not quite the description given to me on the 30^th of October by the Plaintiff in his evidence. (By courtesy of Mrs. Ho, I have a transcript of what he said to me on that day).

46. The next day, 9^th May, according to the plaintiff, there was a further meeting at the Mandarin Penthouse. It was a confused account of the day, but basically it is this:  On that day there came into existence Exhibit 6, which is in the plaintiff's writing. It   is on Tucker & Chiu Ltd. paper, the address being 802Gammon House, which, as I have already said, was the registered office of the 1^st defendant as provided for in that Minute. It purports to be a receipt. It is signed by Mr. CHIU. It says

 

“ Hereby received from Mr. Wong King Keung and Mr. Fong Ming partnership capital money Hong Kong Dollars Three Million only (HK$3,000,000.00), the said partnership capital money is used for investment in this (Yat Ming Investment Company Limited ) Company to carry on the real estate business of Letters A and B of Castle Peak D.D. Lot 376, New Territories. The mode thereof is to be in of meeting of this Company.”    

  

47. It then says "This notice in witness of the foregoing". According to the plaintiff, at that time the "memorandum" was not complete. On the last line of   the document prior to the signature, in the plaintiff's handwriting is the name of the company against which Mr. Chiu signed , and it is witnessed by Mr. Mok Tin-hung, who was mentioned in the course of the proceedings.

48. On the same day Mr. Chiu signed another document, again on Tucker & Chiu paper: It is Exhibit 7. He signed as Chairman of the Directors of Yat Ming. It is an authority to the plaintiff to obtain on obtain on behalf of the 1^st defendant $21 million for the letters A and B, $15 million to be paid at the signing of the Agreement for Sale and   Purchase and $6 million to be paid on completion of shares, and it has three days to run and becomes null and void after the third day. It is a singular document, with some indication of the nature of Mr. Chiu - considering the other documents he signed, to which   I have already referred.

49. The parties moved form the Mandarin Penthouse to the offices of a Mr. Lam, the 1^st  defendant's accountant. When I say "they moved", it is the plaintiff's case is that they moved. There the Minutes referred to in Exhibit 6, according to the plaintiff, were completed. Those Minutes are important and I shall now have to come to them. Gentlemen, I shall deal with those in a few moments.

11:28 a.m. Court adjourns

11:45 a.m. Court resumes

Appearances as before.

COURT: I believe I had just come to the Minutes. The Minutes are A64 to A66. The are said to be Minutes of a meeting at 10 a.m. at Gammon House: And present were Mr. Chiu, Mr. MA, in attendance Mr. Fong Ming, the plaintiff , Mrs. K.K. Wong and the gentleman I have referred to, the accountant, Mr. H.H. Lam. One of the few undisputed facts in this saga which is unfolding, is that Mr. Ma Was not there. I am asked by Mr. Croft to read into the address that this was a pre-prepared Minute and that it was completed only later. According to the document, whick was since been the subject of other litigation, and whick, as against the 1^st defendant, is void, the the plaintiff and Mrs. Wong were appointed directors immediately. it was resolved that Mr. MA should resign as a director, that the registered office should be change form 9 Wing Kut Street to the address I have just given, 802 Gammon House. Somewhat conflicting is that Mr. Chiu should be authorised to be the sole signatory of cheques, but the next item, 5, said that every deed or document must be signed by Mr. Chiu and countersigned by Mr. Fong or Mrs. Wong.

50. And then there is a rather strange item. Item 6, headed “Director’s disclosure of interest”. It reads as follow:  

"Mr. Chiu Ming Sun disclosed to the Board that he had already borrowed $13,000,000.00 form a third party so as to acquire all the shareholdings form Yat Ming Investment Company Limited. He was also entitled to borrow further sum of $2,400,000.00 from the third party for such purpose….”

    

Those sums, it will be recalled, are the sums provided for in the agreement with ROMULUS, to which I have already referred. The plaintiff was not necessarily to know that, unless Mr. Chiu had in fact been very frank with him. Then there seems to have been inserted something - we have never finally solved the problem - but there seems to have been inserted another sentence which reads as follows”

      The aforesaid loan was borrowed in accordance with the Letter of Intent addressed to Mr. Chiu by the third party on 2nd May, 1978.”:

That is A21A to A21D, to which I have already referred.

51. It says “The Letter of Intent addressed to Mr. Chiu by the third party…”; that may just be had English, or it may in fact be deliberately misleading,. Because it is hard to imagine the persons who were present, that is the plaintiff and Mrs. Wong and Mr. Lam himself, accepting the two words “borrow”, if A21A to A21D had been either before them or within their knowledge.

52. It is also hard to understand, if this were intended by Mr. Chiu to be an honest document,  why he did not refer to the Agreement that followed the Letter of Intent, but referred only to Letter of Intent itself. He also reported that the loan would cover 6 months,  during which he would try his best to get the land exchanged, and, if he failed, the load would have to be repaid at 10%.

53. It recites that , having considered that disclosure, the Board gave consent to Mr. Chiu’s borrowing and urged him to expedite the exchange of land form the Government by means of the company's letters A and B. That exchange is dealt with in paragraph 7 of the Minute, which recites that the company's holdings were "in the region of 189,800 sq. ft.", and it resolved that the company would exercise the right to apply to the Government of exchange of land in that area, and that , upon completing, the whole would be sold exclusively to Mr. Chiu at $290 per square foot. If this were a written judgment, I would insert there an exclamation mark.

54. It then deals with the division of net profit in paragraph 8. As resolved, the net profit derived from paragraph 7, after deducting all expenses, should be divided into 3 equal   parts, Mr., Chiu Mr. Fong and Madam Chan Suk-mui (who is Mrs. K.K. Wong). That lady has commenced an Action against the 1^st and 2^nd defendants, to which I will refer later: it is bundle V.

55. It was resolved, in paragraph 9, that Mr. Chiu had the right to appoint Mr. K.K. Wong to   negotiate with the Government "in the best terms possible as follows", and there   follow items (i) to (iv), which are identical with the ones that I have already recited   form the earlier documents.

56. Then the next paragraph, paragraph 10, at p.A66, is a resolution that the Board agreed to   treat $3 million as deposit “lodged in the company”by the [plaintiff and Mrs. Wong with immediate effect. It goes on:-

      

"In the case of the successful disposal of land at $290.00 per sq. ft. as mentioned previously, the Company should repay the deposit of $3,000,000.00 to Mr. Fong Ming Madam Chan Shuet Mui in priority to the distribution of Net Profits. In the case of unsuccessful deal in the said land disposal, Mr. Fong Ming and Madam Chan Shuet Mui agreed to follow the terms in the agreement entered...”.

  

The "agreement", as nothing else has been mentioned, must be A21A or "any subsequent agreement". It is hard to determine to what that related. It could, of course, be A49 to A60, but it is wide enough to cover anything. : ... between Mr. Chiu and the third party as mentioned in (6) above.”. “(6) above "refers only to the Letter of Intent. And then, after other resolutions about the bank account and specimen signatures, the follows., in paragraph 12 “Resolved that Mr. Michael Ma be appointed adviser of the Company with immediate effect.”. and then it deals with the appointment of Lamborne (Nominees) as secretary with immediate effect. That seems to be a company operated by the public accountants H.H. Lam & Co. - form looking at its name, that is.

57. Another of the 9^th of May documents is Exhibit 18, which is the document I mentioned earlier cancelling the agreement of the 12^th of April, (that is Exhibit 17). It reads as follows:

      

“CHIU Ming Sun and Fong Ming have both agreed to revoke the commitment and appointment document signed on 12th April 1978. Also, both have agreed to do thins in accordance with the Company's minutes of meeting recorded on 9th the May, 1978.”,

    

  

and it is signed by both of them.

58. The following day is said to be the maturity date of the second of Mr. Chiu's cheques for $500,000.

59. The 12th of May is undoubtedly the maturity date of a cheque of Mr. Chiu's which is one of the tow I mentioned earlier, that is Exhibit 4. That is for $250,000.

60. On the 16th of May, a Form X bearing that date, the 9th of May, and signed by Mr. Chiu,   was lodged in the Companies' Registry, showing the resignation of Mr. Ma as a director of   the 1st defendant on the 9th of May, (the date of the document and the date of the matters   I have just referred to), and the appointment of the plaintiff and Mrs. Wong as directors. That is to be found at page B40.

61. The next matter is the other cheque that I mentioned earlier, Exhibit 5. The maturity date of that is the 18th of May. That is for $250,000. Assuming that the first tow cheques were indeed for $500,000, that would make $1,500,000.

62. In the course of the next three moths Mr. Chiu paid the plaintiff $230,000 and Mr. Wong   $150,000.

63. On the 14th of June there was executed the deed drawn by Messrs. P.C. Woo & Co. between the 1st defendant and ROMULUS; it is to be found at A70A to A70D. it related to an   apparent request form Mr. Chiu for the further deposit of $2,400,000 (the provision for   which I dealt with earlier in this recital of history). It is in fact a further charge   signed by Mr. Chiu, but it is also signed by Mr. Ma. It says as follows: “Sealed with a common seal of the mortgage signed by Chiu Ming-sun and Michael Ma as directors.”. Underneath Mr. Chiu’s signature is that indeed of the 2nd defendant, Mr. Ma: But this is only tow months after the form X that I have referred to, also signed by Mr. Chiu: B40. No documents have been put before me to explain that situation, no re-appointment of Mr. Ma, no resignation documents by Mr. Fong and Mrs. Wong.

64. Then, apparently, on 4th July, Mr Chiu gave Mr. Ma to understand that he was going to go out of the Colony, and he got Messrs. Peter Mark & Co. to prepare for him a power of   attorney in favour of Mr. MA: That is at A71 to A73. In it, Mr. Chiu says that he is one   of the directors, and he is "now on behalf of the company applying for and   negotiating with the Government ... . To obtain a piece of Land ... . In exchange   for" the Letters of Entitlement and it recites again terms (i) to (iv). The power of   attorney to Mr. Ma is to complete the application for negotiation with the Government to   obtain the land and to sign all documents or minutes, resolutions and so on. It is very   strange, having regard to the background of the matter which I have just recited.

65. About the end of that month, according to the defence, (see D71, Mr. Chiu turned to the   2nd defendant and asked for assistance in the financial problems that he was having. It is   clear that he was having them, and , in fact, he had told the plaintiff not to present the   cheques. The agreement is said to be that Mr. Ma would take over 5,000 shares, become a   beneficial owner of one share and he would lend $1,500,000 to Mr. Chiu which, according to   the defence, Mr. Chiu said was a liability to the plaintiff. That is at page D71 and D72.

66. The next date of importance is the 3rd of August. It is a crucial date in this action. The plaintiff's case as pleaded is that it took place in the Lee Gardens Hotel. It is pleaded   in paragraph 17 which is to be found on pages D55 to D56 and it recites an oral agreement   between Mr. Ma, Mr. Fong and K.K. Wong. It sets out 7 terms of that agreement. The first   being that Mr. Ma would attempt to buy the 5,001 shares held by Mr. Chiu and the   beneficial interests in the share held by himself. Mr. Ma and Mr. Wong should not seek to   resist such a sale but rather they should attempt to persuade Mr. Ma to do it. Mr. Ma   should be free to deal with the shares of the 1^st defendant which he obtained in such a way as to secure the maximum profit for himself, the plaintiff and Wong.

67. It also recites an undertaking by Mr. Ma that he would undertake the same duties - the   word is “duties” - to plaintiff and Wong as Mr. Chiu had owed to them. Mr. Ma would step into the shoes of Chiu and the plaintiff and Wong would receive their shares of the monies accruing to Mr. Ma in the same way as they would in respect of any monies accruing to Mr. Chiu as set out in paragraph 10(4) of the pleading which I have already read: that is, D52.

68. Mr. Fong Ming should pay the legal cost of the transfer of the shares and that Mr. Ma   would lend or arrange a sum of $2 million to be lent to the plaintiff. The plaintiff would   pay to Mr. Ma a broker’s commission of 1% on money lent and $100,000 in cash. The defendant denies that there was any such agreement. And, further, it is urged upon me by Mr. Litton, in his analysis of the evidence that at the most, these were “chats” or “conversation”, and not agreements. There is no possibility of mistaking a conversation for a Deed; but at what precise moment a discussion becomes an oral agreement is hard to determine. but that is the task on which I have embarked. I can decide that issue only on the balance of probabilities as between the oral evidence of the plaintiff and the 2^nd Defendant, as neither party called Mr. Wong, the subsequent (or consequent) actions of those tow persons and such documents as may throw light on them.

69. It appears that over the next five days there were meetings, “many” is what Mr. Ma tells me, between himself and the plaintiff, between himself and Mr. Wong and between the three of them and Mr. Ma with certain friends.

70. To revert to my chronology, on the 5^th of August Mr. Chiu gave a general power of attorney to the Plaintiff, and that was drawn for them by Messrs. Peter Mark & Co.   it was signed and sealed in the presence of somebody form that firm. It is to be found at   A74 to A75.

71. Three days later Mr. Chiu transferred the shares to Mr. Ma as appears form pages A76 to A77.

72. On that date a strange event occurred. There is a receipt, Exhibit 24, from Messrs. Peter   Mark & Co. issued to the plaintiff for $30,000 on account, in relation to a company,   Silvenspurn Investment Ltd.. That is a highly contentious matter. There has been produced   the file and a number of documents in relation to Silverspurn. The ledger of Peter Mark & Co. shews the receipt at page 193 of the ledger. It is Exhibit 58A.

73. On 23rd of August a document, which is to be found at a77A, was executed. It does not appear form that document by whom, or by which firm, if any, it was drawn. It is in a type-face completely different from all the documents produced before me from Messrs.   Peter Mark & Co.. it is alleged, however, to have been made in the offices of Peter Mark & Co. it is a deed of indemnity between Mr. MA and Mr. K.K. WONG. It is not the same as A45, to which I have referred - that is the earlier deed of indemnity - but it is   very like it. It recites that Mr. Wong had made a proposal to Mr. Ma that he is “now in a posititon to acquire” a piece of land in Castle Peak and adjacent Crown land near Dragon Inn, and there is a plan said to be attached (but there is not one on the copies that we have). Mr. Wong warrants in this deed that he is in a position to acquire the said land on the same five terms that I have mentioned earlier. He warrants that the land will be available for sale, (that is, having been exchanged, and the five terms having been obtained form the Government) on or before the 1^st of March of the following year, that is 1979, and “the price including premium” - difficult words to understand – to be $450 per square foot. And deed conations a covenant by Mr. WONG that he will acquire the land on those terms and conditions – how anyone could execute that document is beyond me, yet he did - and will keep Mr. MA indemnified against any failure on his part to obtain the land on those terms and conditions. And, again, it contains the indemnity against damages, costs, interest, charges, expenses should he enter into an agreement with a third party in connection with the acquisition of the land. That, as I say, is the 23^rd of August.

74. There is no doubt that it was accepted by Mr. Ms. But three days later, on the 26^th   of august, Mr. Ma executed a Power of Attorney, which was certainly drafted by Peter Mark   & Co., in favour of a Mr. Harry HUNG Hin-ming: It is Exhibit 28. the power recites   that Mr. Ma is one of the directors of the 1^st defendant, that he is negotiating with the Government to obtain the land, and he appoints that Mr. Harry HUNG   Hin-ming his attorney to make applications to, negotiate with the Government and   Government Departments and authorities to obtain the land in exchange of the tow separate   Letters of Entitlement and to complete his, that is Mr. MA, purchase of the 1^st   defendant share, etc..   It is quite astonishing that that should be executed just tree days after the indemnity, A77A, that I have just read, was obtained from Mr. WONG.

75. Now, the "friends" I referred to, obtained, I gather, a shelf company known as Langcork   Limited, and there is at the moment litigation between that company and Mr. MA. I will   come back to this matter of Langcork: Suffice it to say that $2,500,000 was obtained by   Mr. MA from Langcork on the 30^th of August, and paid into his bank account with   the United Chinese Bank as appears from Exhibit 25, page 2.

76. The next day, the 31^st of August, a deed was entered into between the 2^nd   defendant and the plaintiff: It is Exhibits 20A and 20B. I have read paragraph 17 of the   defence already, and the contention of Mr. MA has been this: 'I never entered into any agreement with the plaintiff as has   been pleaded and has been told in evidence. What I did arrange was this: I would but off   the pressure begin exerted on Mr. CHIU by the plaintiff and Mr. WONG for money, by paying   them $2 million, and that would be in full and final settlement of any claims that they   might have against Mr. CHIU, and that on the receipt of the $2 million any claim against   Mr. CHIU would be extinguished at a stroke.' There is a slight difference between that and   the alleged agreement. The only point of similarity is the mention of $2 million.

77. The document was drafted, I know not by who, but I am told by Peter Mark & Co.. It is   in the form of a Deed; it is, as I have said, Exhibit 20A and 20B. it is a deed under the   hands and seal of the plaintiff and the 2^nd Defendant, and it is a deed of   loan. It is a deed of loan reciting that Mr. FONG Ming, that is the plaintiff, ahs   requested Mr. MA, that is the 2^nd defendant, to lend and advance $2 million,   which he has agreed to do so, free of interest, provided that by the following February,   the principal sum shall have been repaid, but if it be not, "liquidated damages" of a further $2 million "shall   become immediate due and be repaid forthwith by the Borrower to the Lender". Again, if this   were not extempore, I would put here an exclamation mark.

78. Mr. MA tells me that this document is a sham. He makes a very serious allegation against   LANGCORK, which he said was party to the sham; he says that this was, in fact, the   document which extinguished as against Mr. CHIU any claims that the plaintiff and Mr. WONG   might have, leaving him, Mr. MA, entirely free to so as he pleased with the shares of the   1^st defendant and of course the Letters A and B.

79. There is no doubt that the $2 million was paid, because that appears from the cheque at A80. and that, obviously, was met, as appears from page 2 of Exhibit 25 is quite cleat   that it went into the plaintiff's bank account, as appears form the first deposit item on   A79.

80. On the same day, there is a withdrawal of a cheque for $130,000: A79. That would be - the   alleged agreement of the 3^rd of August provided for Mr. MA to have broker's commission of one per cent n the money lent to the plaintiff, and $100,000 in cash, and, it is said, this $130,000 was paid as a "rounded-up sum" to Mr. MA.

81. While I am on page A79, the next item of $687,500 is said to be the payment, on the 1^st of September, by the plaintiff, to K.K. WONG.

82. The agreement for a "rounded-up sum?of $130,000 is said by the plaintiff to have occurred, also n the 1^st of September, actually in the premises of the Wing   Lung Bank, whose statement is A79.

83. The next month, in October that is, there is a "paper meeting" of the 1st   defendant, transferring the registered office to the home of Mr. MA. It said that Mr. CHIU   and Mr. MA were present, the chairman - Mr. MA. It is dated the 21^st of October   - it is Exhibit 13 - and it is signed by Mr. MA. It is also signed by Mr. FONG, which is a   little surprising as, according to the 2^nd defendant, all the plaintiff's interests had been extinguished 51 days earlier, on the 1^st of September, on the payment of the 32 million.

84. On the 8^th of December of that year, Messrs. Peter Mark & Co. paid to a   firm of solicitors in London, a sum equal to HK$6,700 for advice "for" the 1^st   defendant. The name of their client obtaining the advice for the 1^st defendant   is the same Silvenspurn Investment Limited to which I have referred earlier, when I dealt   with the receipt, Exhibit 24. This was all eventually proved by production of a cheque   voucher and the firm's ledgers, which were produced before me - Exhibit 57 is the voucher, page 258 of the ledger shews the payment cheque number and so on to Maxwell Bately, that is page 258 in Exhibit 58 and made Exhibit 58A. That is the company in respect of which the plaintiff paid $30,000, and the receipt which was issued, to which I have already referred: Exhibit 24.

85. On a date I am not entirely sure of, but it is certainly after this, there came into   existence a memorandum - or rather, it is translated as "memorandum"- from the 2^nd   defendant, was, on his dictation, to be sent to Mr. WONG in Taiwan. The first part of the   document, up to question No. 7, is written in Chinese. Underneath in English appears this,

    

"K.K." - that is obviously addressed to Mr. Wong - "please consider the above points seriously with Fong Ming. I assure you the situation is very critical. Your expression is essential"

  

and it is initialed "H.H." which is the 2^nd defendant. But as I have said, Mr. Ma's case is that the plaintiff's interest had long since been extinguished, and I ask myself why the plaintiff should still be concerned or bothered, if he had no interest in the result?

86. It is said in evidence that, in the middle of the next month, the remaining share in the 1^st defendant was transferred to a Mr. TANG Wai.

87. And on the 18^th of February; I must return to Exhibit 20, which I referred to   earlier, for that is the date when the principal sum of $2 million, lent to - allegedly   "lent according to the plaintiff, and "given as a final payment" according to the 2nd defendant - the plaintiff became repayable, and upon failure to repay,   liquidated damages of an additional $21 million became due.

88. Then the next month there is a number of documents relation to the decoration of the plaintiff's flat in Blue Pool Road. And estimate was obtained by the plaintiff form Kwan Yau Kee Decoration Company on the 15^th of Mach - it is page A921. It was accepted by the plaintiff, and a signed by him and the proprietor of that firm. And between that date and the 10^th of August there was issued a number of receipts by the decoration firm to the plaintiff: They are pages A92 to 995 inclusive, and they bear the identity card number of the decorator. The plaintiff tells me that that was put in in order to "demonstrate to the 2^nd defendant that there was such a person as the decorator"

89. On the 20^th of April, Mr. CHIU issued a writ against Mr. MA, the 2^nd   defendant here, against YAT MING, the 1^st defendant here, and against the   solicitor Mr. Peter Mark: That is to be found in Bundle Q. I mention that particularly in   relation to Mr. MARK, because he was very distressed by it indeed. Basically that was an attempt by Mr. CHIU to get back his shares.

90. Some five days later, the transfer of the single share to Mr. Tang Wai that I have already   mentioned, was stamped for duty; with a penalty. That is page A84.

91. Then, sometime towards the end of that month, there was apparently a meeting in the   offices of Peter Mark & Co., where Mr. MARK encountered the plaintiff, the 2^nd   defendant and a Mr. SZETO Liang of LANGCORK. This piece of evidence is a most contentious   matter, and Mr. MARK's credibility   is put to the test on it.

92. At about that time, and I think it must be undeniably in relation to Mr. CHIU'S action which I have just   mentioned, the plaintiff made a Statutory Declaration which was prepared for him by   Messrs. C.C. Lee & Co., and it bears the date the 30^th of April - it is   pages A85 to A87 - and it reads thus:-

93. As I say, it would appear that that must have been in relation to the action of Mr. CHIU, which is no. 1600 of 1979 (and which has been referred to as “1600’ throughout the evidence), because, on the following day, Messrs. C.C. Lee & Co. issued a receipt to the plaintiff for the sum of $15,000, and that is said to be an amount on account “in respect of Yat Ming Investment Company Limited". But there is plaintiff, paying money in respect of the 1^st defendant, some eight or nine months after the "total extinction", according to the 2^nd defendant, of all his, the plaintiff's interest in that company and its affairs, its shareholding etc.. There is no suggestion that that money came to the plaintiff from anyone else. It appears that it was his own money. Why should he have done such a thing if Mr. MA’s version of the events were true?

94. Sometime about then, there came into existence a statement - I say a "statement" as a neutral term - in the had of the plaintiff, on the paper of a company of his, Mun Ming Keung Kee Company Limited, of 5 Li Yuen Street West. It is Exhibit 3. It is strange, because he tells me that it is not a truthful document. It is not alleged to be the truth. It is alleged to be a product of an arrangement between the plaintiff and the 2^nd defendant in preparation for a joint attempt deliberately to deceive this Court in Action 1600. The allegation of it being intended to deceive came from its maker - the plaintiff. The statement that it is not correct came from its maker - the plaintiff. The allegation that parts of it are untrue as opposed to mistaken came from its maker - the plaintiff. It may or may not be of some assistance to find when it was made, to remember that the Statement of Claim in Mr. CHIU's Action 1600 was served on the 15^th of May of that year. It is pages Q1 to Q6.

95. Now, sometime around then - I am not sure when; it does not really matter - the document that I have just referred to, the statement of the plaintiff, Exhibit 8, was reduced to a   smaller statement, that is Exhibit 9. It is in the hand of the plaintiff. He tells me that   some parts of it are untrue, some parts of it are mistaken, some parts of it are in the   wrong order and that it was a further part of the preparation for giving false evidence in   Action 1600 to which I referred; but it is not the only one. There was a proof, which is   Exhibit 15, which was taken from the plaintiff by Messrs. C.P. LAI. There is another proof   that was taken by a Mr. K.Y. CHAN, that is Exhibit 12. That was taken orally in Cantonese,   it was then typewritten in English, and it was thereafter handwritten in Chinese, and that   Chinese has been re-translated, bank into English; and that is Exhibit 12A.

96. In relation to those four documents I have to ask myself why the plaintiff should go to such trouble, even to the extent of seeing another solicitor, if the truth be a the 2^nd defendant has told me - that every claim and right of the plaintiff had been extinguished when he received the $2 million I have already mentioned.

97. Later that summer, the 2^nd defendant moved into the plaintiff’s premise, his flat in Blue Pool Road, because his own place was being demolished. It was the plaintiff's. No rent was ever paid. And it is said that the reason why contemplating its purchase; but it was a very long time indeed before the purchases was effected. Again, it is something I shall have to bear in mind.

98. It is also said that there was a great deal of anxiety about costs of defending the action   brought by Mr. CHIU, and the plaintiff's assistance, it is said, was sought. The plaintiff tells me that the obtained some moneys from Mr. K.K. WONG, who was still in Taiwan, had them sent to Hong Kong in some extraordinary manner to somebody who had been a foci of Mr. WONG's some years before, but who was at that time an out of work hawker. The money did reach Hong Kong, and it then reached the hands of the plaintiff, and eventually a cashier's order in respect of it was issued in favour of the 2^nd defendant Mr. MA: The cashier’s order is Exhibit 21. It also appears on Exhibit 22 as a Photostat above a receipt, which reads as follows,

  

    “Received from Mr. Lam Chung Sun HK$100,000.00 (Hang Seng Bank Cashier Order No.314731). This payment is made by     Mr. Lam on behalf of Mr. Wong Keng Keung to Mr. Michael Ma. This is written for proof”.

  

The Plaintiff says that that was the return by Mr. K.K. WONG of part of moneys advance by him to Mr. WONG, in order that he, the plaintiff

99. On the 10^th of November of that year, Mr. MA guaranteed an overdraft of the plaintiff at the United Chinese Bank, and that is page A90. The undertaking for repayment   of that overdraft appears at page A89. That sum of money, plus interest, is the subject of part of the counterclaim in this matter, and is admitted.

100. The next event was an Originating Summons issued on the 2^nd of April, 1960 by   the 1^st defendant against ROMULUS, and it sought the determination of certain   questions concerning the Mortgage and Further Charge, which I referred to earlier, a   declaration that they were illegal and void, that ROMULUS is liable to account to YAT MING   as constructive trustee in respect of Letters of Entitlement, delivery up of the two   documents and the two Letters of Entitlement and other matters. That appears at R1 to R4.

101. And on the same day an affidavit in support was sworn by Mr. MA. That is R5 to R10.   Paragraph 18 is the only paragraph I need to refer to , and it is averred therein, or deposed to , that the transfer of the 5,000 shares in the 1^st defendant by Mr. CHIU to the 2^nd defendant and the beneficial ownership of another share, was done in consideration of $500,000 “paid” by Mr. MA to Mr. CHIU on or about the 8^th of August, 1978. It was not.

102. In the same action Mr. MA swore another affidavit, of which, with the exhibits, is pages   R22 to R62. Paragraph 1 contains the following two sentences,

  

    

I claim that on the 8^th August 1978 Mr. CHIU sold the 5,000 share to me for HK$ 500,000. I hold an instrument of transfer and a sold note. I paid the price to Mr. CHIU on the same day as well as lending him HK$1.5 million.”

  

He did not. Those two sums make up the $2 million that was paid by Mr. MA to the plaintiff.

103. Gentlemen, I will deal with Action 1600 after luncheon. Will you please be back at 2.30

1.00 p.m. Court adjourns.

2.30 p.m. Court resumes

Appearances as before.

COURT: In 1980, the plaintiff had been unwell, and had gone to a hospital or sanatorium. In July, Mr. CHIU's action was called on. That was on the 8^th of July, before Mr. Commissioner Gittens. I take that date from Q27.

104. Coincidentally the plaintiff discharged himself from hospital so as to be available, says   the plaintiff, for the assistance of the 1^st and then-3^rd   defendants, (Mr. Mark having been discharged as the 2^nd defendant sometime earlier), unnecessarily as it turned out because the parties came to an agreement. It is in bundle L, at pages L52 to L54. That is the 10^th of July.

105. The action was settled, and the arrangement was that Mr. CHIU would get $1,500,000 and Mr. MA would be left in charge of the company, the 1^st defendant in this action.   That was given effect to by the judgment of Mr. Commissioner Gittens on the 11^th of July, which is Q27 to Q28.

106. The 18^th of July, when that was all over, there was another change of address   of the registered office of the 1^st defendant. It was from Ventris Road to the   premises I have referred to in Blue Pool Road. That is to be found at A164.

107. The plaintiff's overdraft that I referred to earlier was paid off in the sum, which is the subject of a counterclaim and agreed, of $114,960.

108. The sale of the Blue Pool Road premises to the lady with whom Mr. MA was then cohabiting, was completed on the 1^st of August, 1980, (that was the lady who attended on   subpoena at a very early stage of this trial), which means that it was for just about 12 months that Mr. MA was in the plaintiff's remises with his wife and family, rent-free.

109. On the 16th of August Mr. MA entered into an agreement with LANGCORK. That was drawn by   Spencer, Hung & Co. it is Exhibit 27. The recitals include these:

110. Clause 1(c) contained an undertaking by 2^nd defendant to hold the proceeds of  sale and/or all income derived from shares in trust in equal shares. The less I say about this particular document the better, because I apprehend it may well form an important part in the other Action that I have referred to.

111. On the 29^th of September of that year Mr. MA entered an agreement with another company, Celberg Limited. That was to sell the Letters of Entitlement of CELBENG at the   price of $113,165,965. That sale was completed in the following month, 13^th of   October. The agreement was never exhibited, out it is referred to in paragraph 7(5) at C4, paragraph 7 at C18 and paragraph 6(5) at C37.

112. In November of that year, there is a letter from the plaintiff to the 2^nd defendant concerning Mr. Chiu's behaviour. It is Exhibit 11. It is in the form of a report. It is dated 12^th of November. The Plaintiff recites what happened on the 6^th of November when he said he recites what happened on the 6th of November when he said he met Mr. CHIU at Fuk Lok Hin Restaurant in Sugar Street, Causeway Bay. It ends: “Humbly submitted for your notification. Hope you are fine. Brother Szei Ming.” He was reporting to Mr. MA, as it were.

113. The next thing that happened was that Mr. CHIU issued another writ. That is on the 4^th of December, 1980. the writ and statement of claim are to be found at S1 to S10. Mr. MA was made the 1^st defendant; Mr. Peter MARK, the solicitor, the 2^nd  defendant; YAT MING, the 3^rd; Mr. FOOK Tak-ching, the 4^th; and   CSLBERG the 5^th.

114. On the 22^nd of May the plaintiff in this action was interviewed by the I.C.A.C.   A report of the interview has been put before me in the form of questions and answers, and form Exhibits 52 and 52(A). Exhibit 52(A) is supposed to be the typescript of the handwritten notes of Exhibit 52, but there is a number of minor inaccuracies. I do not propose to recite them. I merely mention that so that a reader of this judgment should   know that the two documents should be read together, and that he should not go straight to the typescript thinking it is the same as the manuscript.

115. On the 3rd of June the plaintiff had a second interview, and again I would commend anybody   to look at the manuscript as well as the typescript. They are Exhibits 53 and 53(A).

116. On the 19th of January of 1982 Mr. Chiu's second action was struck out. That is S56 to S57.

117. He appealed, and that appeal was dismissed on the 31st of March of last year. That is S58   to S60.

118. The Plaintiff had been ill. In fact he had been very ill. He is still not at all well, as became apparent during these proceedings, when I had to adjourn, and in respect of which I   have a letter from his doctor which is an Exhibit, Exhibit 19.

119. He tells me that he thought he was dying. Being close to death, he wrote a document which he described as his "last will and testament.? It was for his descendants to read.   They were not supposed to see it in his lifetime. He told me that the intention was that it should be burnt at his grave, so that it would thereby instantly be transferred form   the graveside to the presiding judge of court number 5, whom he named, of the ten courts in the next world. There the learned judge would be able to deal with it. It is a singular   document because it is not accurate. When I say it is not accurate, its nature - the plaintiff himself tells me it is not accurate. It is sequentially wrong, and it contains mistakes. Among other things, it contains no reference to either of the oral agreements to   which I have referred: The May one with Mr. Chiu and the August one with Mr. MA.

120. On the 15^th of August last year, LANGCORK issued a writ against YAT MING, that is the 1^st defendant here and the 1^st defendant there, and Michael   MA, the 2^nd defendant here and the 2^nd defendant there. A claim,   that is T1 to T4, seeks a declaration that Mr. MA, through YAT MING, holds the proceeds of   sale of, the Letters of Entitlement, to which I have just referred, on trust for the plaintiff and himself, Mr. MA, alternatively a declaration that he holds the shares in the   capital of YAT MING on trust; and asks for various injunctions, accounts and inquiries and   a receiver. The less I say about that action, as I have said earlier, the better. I   believe it is set down for hearing next May, before whom I know not, but it behoves me not   to go to any depth into it.

121. But there is a number of things that I must mention. The first is this: On the same day, 15th August, Mr. SZETO Leung of LANGCORK made an affirmation, that is pages T11 to T20, and it was in support of an application for injunctions. They were granted ex parte by my   brother Macdougall in Chambers. He enjoined the 1st defendant from transferring disposing, alienating or dealing wit the proceeds of sale of the two Letters of Entitlement and from   transferring, disposing, alienating or dealing with the shares of the 1st defendant.

122. Included in paragraph 2 is this Order "The cost of this application be reserved with   certificate for tow counsels.? The solicitors were Philip K.H. Wong & Co. they   attempted to see Mr. MA, but were not successful.

123. On the 18th of August, that is 14 days after the issue of the writ in this Action, the plaintiff obtained from my brother Macdougall certain Orders based on an affirmation which   appears at L1 to L76. the proceedings before Mr. Justice Macdougall ran a strange course,   and the learned judge has been kind enough to allow me to see his notes of what happened.

124. The Order that was obtained from the learned judge on that particular day, as against Mr. Ma enjoining him from transferring, disposing, alienating or dealing with the proceeds of sale of the Letters of Entitlement, C8 to C10, was in these words:-

      

"Upon hearing counsel for the plaintiff and upon reading the Writ of Summons and the affirmation of the Plaintiff and the exhibits referred to therein.

    

    And the plaintiff by his counsel undertaking to have the Certificate of Urgency and the affirmation of Fong Ming and the exhibits referred to therein filed by 19^th August, 1983 and to abide by any order this court may make as to damages in case this court shall hereafter be of opinion that the defendants or any of them shall have sustained any be reason of this order which the plaintiff ought to         pay, and to pay all or any costs and expenses incurred by and fees payable to any person to whom notice of this order is given arising from the making or implementation of this order which costs and expenses are properly incurred by reason of such person complying       with the terms of such order:-

 

It is ordered and directed that the 1^st   defendant be restrained whether by otherwise howsoever form:

(1)	transferring, disposing, alienating or dealing with the said proceeds of sale of the 2 Letters of Entitlement dated 7th August 1974 and registered in the District Office or any part thereof in any manner whatsoever inconsistent with the said trust.
(2)	be further restrained form withdrawing, disposing of or otherwise dealing with the monies in its accounts with any bank or deposit taking company safe insofar as the sum standing to the credit of the 1st defendant in any such account shall exceed HK$40 million until after judgment in this action or until further order.

  

It is further ordered and directed that the 2nd defendant whether by himself , his servants, agents or otherwise howsoever be restrained   and an injunction is hereby granted restraining him from doing the following acts, that is to say:-  

 

(i)	transferring, disposing, alienating or dealing in anyway with the said proceeds of sale or any pat thereof in any manner inconsistent with the aforesaid trust;
(ii)	be further restrained from withdrawing, disposing of or otherwise dealing with the monies in his accounts with any bank or deposit taking company save insofar as the sum standing to the credit of the 2nd defendant in any such account shall exceed HK$40 million until after judgment in this action or until further order.
(iii)	transferring, disposing, alienating or dealing with the said shares of the 1st defendant in any manner inconsistent with the trust held in favour of the plaintiff until after the hearing of a summons returnable on Friday, the 2nd day of September 1983 at 9:30 of lock in the forenoon or until further order and that thecosts of this application be reserved with certificate for 2 counsels."(sic);

  

be on page C15 is matter which I believe I do not have to investigate, but which may well be looked at by the Law Society in due course when this matter is concluded.

125. The plaintiff affirmed a second affirmation on the 19th of August, that is L77 to L91, a third one on the 1st of September, L92 to L129, and a fourth one on the 7th of September,   L130 to L142. Without doubt those affirmations contain inaccuracies and mistakes, sequential errors and additionally, untruths. They make no reference to the principal   matters in issue in this hearing, the alleged oral agreements.

126. None of those four affirmations discloses that it had been translated to him. On the face of them, therefore, they were not translated to him. However, in his evidence he told me   that they had been translated to him word for word, sentence by sentence, paragraph by   paragraph.

127. After re-examination, I had cause to ask him about him relationship with certain persons   mentioned in evidence, and it then transpired that the solicitor in charge of the action   at that time is a close relation of his. Having ascertained that , I felt it is my duty to   ask him again about these affirmations, and he then told me that, in fact, they had never   been translated to him word for word, line for line, paragraph by paragraph. He had just   been told, hurriedly nastily, the gist of each, and he said that he had told we an untruth on his oath earlier concerning them, to protect his former solicitor and close relation.   It is a matter which, course , I can not an will not overlook.

be on page C15 is matter which I believe I do not have to investigate, but which may well be looked at by the Law Society in due course when this matter is concluded.

128. The plaintiff affirmed a second affirmation on the 19th of August, that is L77 to L91, a   third one on the 1st of September, L92 to L129, and a fourth one on the 7th of September,   L130 to L142. Without doubt those affirmations contain inaccuracies and mistakes, sequential errors and additionally, untruths. They make no reference to the principal   matters in issue in this hearing, the alleged oral agreements.

129. None of those four affirmations discloses that it had been translated to him. On the face of them, therefore, they were not translated to him. However, in his evidence he told me   that they had been translated to him word for word, sentence by sentence, paragraph by   paragraph.

130. After re-examination, I had cause to ask him about him relationship with certain persons   mentioned in evidence, and it then transpired that the solicitor in charge of the action   at that time is a close relation of his. Having ascertained that , I felt it is my duty to   ask him again about these affirmations, and he then told me that, in fact, they had never   been translated to him word for word, line for line, paragraph by paragraph. He had just   been told, hurriedly nastily, the gist of each, and he said that he had told we an untruth   on his oath earlier concerning them, to protect his former solicitor and close relation.   It is a matter which, course , I can not an will not overlook.

131. But of one thing there is no doubt, he rode into action against the fess in this case on the bank Langcork's Marvels,   which eventually came to any unhappy end. On the 30th of August Mr. Justice Jones suspended the Orders: C42 to C56. On the 16th of September, Mr. Justice Mayo discharged the Orders, and his judgment is to be found at C73 to C101.

132. The last matter in this chronology is the issue of a writ by Mrs. K.K. Wong on 7th of August this year. It is in bundle V. it bears a striking resemblance to the final combined   effort of pleading of Mr. Barretto and Mr. Craft.

133. I must now come to the principal matter that I have to deal with. But before I do, I want   to make one thing perfectly clear, so that there be no misunderstanding by the public. For   reasons unknown to me, on the last occasion that this matter received publicity, it   received publicity only in the English language Press. It is possible that this time, it   might receive publicity in a Chinese language newspaper as well, although probably not one   connected with that newspaper with which the 2^nd defendant was at one time   connected.

134. What I want to make clear is this: Many allegations have been made against Mr. Ma. I shall   repeat what I said in my ruling of the 8^th of November; probably it would be   better if I read what I then said, and repeat it in this judgment;

  

"I am not a jury, and it matters no to me whether a man during the war wore a black, brown or green shirt.”

  

- that is , while I am sitting here it does not matter -

      

"It does not matter to me whether he was an     Iron Guard in Hungary, an Arrow Cross in Rumania or a member of the Croix de Feu in     France. I am not, until this judgment is over, concerned with anything that Mr. Ma may have done during the war.”.

 

135. I am not concerned that he misled the United States Government: That is matter for the Secretary of the State in Washington.

136. I am not concerned that he misled the Department of Navy: That is matter for the Secretary of the Navy in Washington or the Naval Liaison Officer of the United States Navy here in   Hong Kong.

137. I am not concerned with his quisling-like activities in the second World War II occupied Hong Kong: That is a matter for the Judge Advocate General in London, and for the Attorney   General here.

138. I am not concerned with the falsehoods that appear in his application for his identity   card: That is a matter for the Commissioner of Registration in Hong Kong.

139. I am not concerned with the falsehoods that brought him his Certificate of Identity. That   is a matter for the Director of Immigration here.

140. And I am not concerned with how he obtained the visas contained in that Certificate of Identity: That is, possibly, for the Commissioners for Australia and Canada, and the   Consuls-General of Japan, Switzerland, Thailand and the United States of America.

141. None of those matters in any way whatever will affect this judgment, or my assessment of   the witness.

142. In the course of the arguments concerning amendments yesterday, (on which I gave my   Decision this morning), Mr. Litton reminded me that I am not sitting as a family judge,   and that this is not a family dispute. But I must say it bears much more resemblance to a   family dispute than to a commercial action. Anyone hearing the plaintiff and Mr. Ma would have thought they were divorcing each other. Two angry fishwives at Aberdeen would have   been less verbose and more to the point than the plaintiff and Mr. Ma, each of whom gave   me the impression that , when last vaccinated, the doctor had accidentally used on them a   long-life gramophone needle. Mr. Croft was visibly exasperated with his lay client: Mr.   Litton was moved physically to manifest his exasperated with his lay client: The Court   shorthand writers were moved to ask for shorter stints in Court and longer intervals   between sessions: We were all sorely tried.

143. As I said in one of my earlier rulings, I think it was that of the 8^th of   November, this case will resolve itself eventually into a very simple matter of whom I   believe, because the documentation is slender and a lot of the documentation is admittedly   false.

144. Today is the 54^th day of the trial, the evidence of the plaintiff having commenced on the 10^th day. In order to decide whose evidence I prefer, because   the burden of proof here is on a balance of probabilities only, I have to weigh the evidence of each witness thus: By looking and listening, I have to form some assessment of   their veracity, and their evidence has to be tested one against the other and against the   entire background of the action and the other evidence. The evidence has to be tested for   consistencies and inconsistencies within itself, against other witnesses evidence and   against the documents. And I have to decide on the totality of the evidence whom I prefer.

145. My assessment of the witnesses is this. The Plaintiff is an incredibly long-winded, muddle-headed ninny, but basically honest. That is the conclusion I form at the end of   this long trial.

146. My difficulty with the defendant is to discover from the hidden depths of my memory sufficient euphemisms. I know who the defendant is not. He is not a retired barrister, as he told Miss Winnie Mak. He is not a lawyer as the told the attendants of a well-known teahouse in Wing Kut Street and of other teahouse. He is not a solicitor's clerk, as he told Mr. William Kwan, a solicitor of this Court, and he is not a solicitor's clerk as he permitted Mr. Kwan, in his presence, to introduce him to Mr. Raymond Chau of P.C. Woo & Co. he is not a retired Major-General and Director of Foreign Affairs from the Central china command. He is not a retired Major from General Chenault’s “Flying tigers”, with a magnificent record of shooting down Japanese aircraft and an unhappy ending of being shot down himself, as Mr. William Kwan was led to believe. He is not a man who rescued Sir Murray MacLehose's daughters form a fate worse than death in China, as he led Mr. Peter Mark, another solicitor of this Court, to believe. He is not, indeed, Mr. Michael Ma, born in 1916 in Minneapolis, as he led the United States Foreign Service to believe , and I will come to Minneapolis in a monument. He is not the Michael MA who was born in Hong Kong in 1913, as he led the Immigration Department of Hong Kong to believe. He is not a man who rescued Sir Murray Maclehese's daughters from a fate worse than death in China, as he led Mr. Peter Mark, another solicitor of this Court, to believe. He is not, indeed, Mr. Michael Ma, born in 1916 in Minneapolis, as he led the United States Foreign Service to believe, and I will come to Minneapolis in a moment. He is not the Michael Ma who was born in Hong Kong in 1913, as he led the Immigration Department of Hong Kong to believe.

147. Who is he? Well, he was born a Mr. Tse in Hoi Ping in August 1910. Hoi Ping is in the Sae Yap, not very far from Canton; the same districts, more or less, as those from which Mr.   FONG Ming came.

148. His family name is TSE. His brother, who works in Hong Kong at the United Chinese Bank, is   TSE. He is still addressed by relations in America, when whey write to him here, as TSE.   He was born TSE Shui-leung. In Australia be was known as Howard Torr; and he is now known   here as Michael MA Wing. He has told me on his onth that those were indeed his names, and   that the TSE and MA names are names that he uses now.

149. It is quite clear from what I have said, that in the final analysis I am going to prefer the evidence of the plaintiff, and the evidence called on behalf of the all those   background matters for this reason, that there was earlier before me an application to amend, to add those names to the title. Having included them now in the judgment, I will   be able give leave, if necessary, to the plaintiff to execute in all or any of those   names.

150. The fact that Mr. Ma is none of those things case, does not of itself help the plaintiff   home because the plaintiff has to prove his own case, and that is something to which I   shall come in a moment. I am dealing at this stage with assessment only.

151. I do not know if the phrase is still used, but Mr. Ma is an experienced confidence trickster; a practised dissembler. He deceived not only Mr. Kwan, Mr. Mark, Miss Mak and   the plaintiff; he most blatantly decived my Brother Mayo, because, in his endeavours,   belatedly, to get the Marevas set aside, (and those names I have mentioned may be   important in that respect), he made an affidavit, which is Bundle M.

152. He told my Brother Mayo that, in 1980, he moved with his wife to 6 Blue Pool Road which he   had purchased: A paragraph 15. That was false. He, talking of Mr. FONG Ming as a war-time sergeant, told my Brother Mayo that at that time he held the rauk of Major-General. That,   as he has been constrained to admit, was false. He told my Brother Mayo that his last   residence before the eruption of World War II was Repulse Bay Lot 405, a house which he   built and which he subsequently sold: M Paragraph 22. The property was never his, and he   did not sell it. That was false.

153. He told my Brother Mayo that he was in detention in Hong Kong for a period during the war   and then in China - this is during the war - serving in various senior posts, the last of   which was Director of Foreign Affairs, Central China Command, holding the Bank of Major-General: paragraph 22. That was false.

154. He told my Brother Mayo that he returned to Hong Kong to administer the policy of the   United Nations embargo and the foreign assets control of the United States Government: He   held the position of an administrative assistant in the purchasing branch of the United   States Mavy here: H paragraph 22. That, I suppose, is not a lie. It is the act of a   braggart, but it is the act of a braggart in order to get a judge of the High Court to set   aside Orders of another judge.

155. He told my Brother Mayo that he had an invitation from the Government of the Province of   Ontario to go there at their expense to look over investment opportunities in that   Province: H paragraph 25. That was basically false.

156. He told my Brother Mayo that he had been approached by his old university, Adelaide   University, for a donation: H paragraph 25. Both those matters were false. He had not been   approached by Adelaide University, and Adelaide University was not his old university.

157. Yes, thank you.Court adjourns 3.30 p.m

3.35 p.m. Court resumes.

Appearances as before.COURT: He was not as Queen's College, Oxfords, as an undergraduate or a graduate, as he the plaintiff to believe. He was not a graduate of the U.B. Maval Academy, as he told Mr. Mark, not is he entitled to wear a graduation ring thereof. Whether he went to the Mavy Supply School or did a course in Supplies at Annapolis, is not a matter for to decide: That may be a matter for the American Consulate-General.

There are some United States' documents before me which contain falsehoods, including an affidavit. His allegation made in evidence, is that those falsehoods were made at the instigation of someone in the service of the Department of the Navy.

I must make it quite clear that I am not concerned at all whether Mr. Ma was a Kuomintang "plant" in the United States Navy office here, or whether he was co-operating with the United States Navy in the then aim of one the United States Administrations to give Hong Kong over to the Kuomintang Administration: Those matters I shut entirely out of my mind in assessing this witness.

Going back to Annapolis. I mentioned those because he, Mr. Mark, told me and I accept, that he was shewn a graduation ring - the type that Americans wear - by Mr. MA, and he believed, that Mr. MA had attended the U.S. Naval Academy in Annapolis, and had graduated therefrom.

Now why do I go through all those matters? It is very simply this. He has shewn himself to me, and he has been demonstrated to be, a practised and successful deceiver. And that is a very important point when it comes to explaining the bizarre actions of the plaintiff in court and in 1978, 1979, 1980 and 1981. Mr. MA was quite clearly the dominant one of the pair. The plaintiff was quite clearly the servient one, in almost every sense of the world. Mr. MA dominated the plaintiff and had him believe all sorts of things which, rationally, he would not have done.

158. Even here, in this very court, he scarred off by trying to deceive me. He was asked where he was born, and, on his oath, he said "Minneapolis". Lest there be any   misunderstanding, the next question in cross-examination was "In Minnesota, in America?" and the answer was "That is correct": But it was not, as two   answers later he himself admitted. He gave me a long, rambling story of how he came by the name MA. It was, he tells me, the way his parents got him, as a small child, into the   United States: By the use of either a false, forged or purloined birth certificate. In   many circumstances the use of a false or forged birth certificate can be justified: It was   quite commonplace in the last war for young men who wanted to join up, to present false   documents in order to get into the Armed Forces of the Crown below the normal joining age.   This, however, is not a parallel of those actions.

159. I am not concerned with that history. What I am concerned with is Mr. Ma's credibility. And when he is prepared, at the beginning of his cross-examination, to tell me that he   was born in Miuneapolis, only three questions later to tell me that he was born in the Kwantung province of China, it does not advance his credibility, but, nor, at this point,   does his incredibility advance the plaintiff's case.

160. I said that I used an old-fashioned phrase about Mr. Ma's of his being a practised confidence trickster. Having observed him, having listened to him, having read through his   evidence, having weighed that evidence against the background of the documents, against   his internal inconsistencies and against the plaintiff, I have come in the end without   hesitation to say that I prefer the plaintiff's evidence, and I reject the explanations,   advanced by Ma Ma. of what happened. And I am fortified in that belief by this - that such   contemponaeous documents as relate to Mr. Ma do not support his version of events, but do   support the plaintiff's. And if I do not accept Mr. Ma's explanation of those documents,   then those documents form some corroboration of the plaintiff's evidence and thereby   noticeably advance the plaintiff's case.

161. I have said that the plaintiff was muddle-headed, but basically truthful. I did not say he   was wholly truthful: Tot that I am prepared to admit the existence of anyone who is wholly   truthful, but that is neither here nor there. What I mean is this. Undoubtedly the   plaintiff has told some untruths. He has certainly affirmed to some untruths but then, as   I say, I accept his explanation of the affidavits, unfortunate though that may be; but, as   I said before, that is a matter for the Law Society, not for me. Mr. Litton, in the course   of a compelling - up to a point compelling - and exceedingly able summary, he pointed out   a number of untruths. But when I weigh up everything, I reach the conclusion of basic   truthfulness by the plaintiff. As I said, when I weigh up everything, I find that Mr. Ma   is basically untruthful. Whether he is untruthful because he no longer knows what the   truth is, or untruthful in an attempt to deceive me, or untruthful merely to defend this   action does not matter. What does matter is my assessment of him - seeing him, hearing   him, observing him, weighing his evidence as a basically untruthful person.

162. I shall give one example, at which I believe I hinted in the course of my chronology, and   it is the Deed of loan. That is a Deed (under seal, of course) made by the defendant,   prepared by a very respectable solicitor and it says that $2 million was lent to the   plaintiff. A man is entitled to deny his own Deed. He may certainly do so at any time. It   is not an easy task, but he may do so. A judge in those circumstances would decide whether   such denial be true or not. But this story of a conspiracy with Mr. SZETO and others to   put a bogus Deed forward as "security", is something that I can not and do not accept. But, much more importantly, it is this, it is totally inconsistent with   "buying-off" Mr. Fong by a once-and-for-all payment of $2 million, thereby,   "at a stroke", wiping out such obligations as Mr. Chiu had had to Mr. Fong and   Mr. Wong. That is but one example of what I mean.

163. If I accept the version of Mr. Fong, it would explain why he should write out the whole of   exhibit 8, why he should re-write it as exhibit 9. It would not necessarily explain the   proof to Mr. C.P. Lai, because, as any witness, he might give a proof. It would explain   why he gave a proof to Mr. Chan. It would explain why he spent the $30,000 on Silvenspurn.   It would explain why he spent $15,000 at Messrs. C.C. Lee. It would explain his   "letter of report" to which I have referred. It would explain the note from Mr. MA to Mr. K.K. WONG. Only the plaintiff's version fits in with his actions, his acts and   deeds and with the documentation. That is my finding. That is why I prefer, on the balance   of probabilities, the explanation proffered by the plaintiff of what he did and why he did   it.

                  having seen and heard them, both, and what was agreed all up, I accept the plaintiff's   evidence of what was agreed between him and Mr. Chiu. I find as a fact that there was a   valid binding oral agreement between them. I accept his version of what happened at the   Mandarin and in Mr. Lam's office. I accept his version of what happened in August 1978. I find as a fact that there was a valid binding oral agreement between the plaintiff, Mr.   K.K. WONG and Mr. MA. I find that Mr. MA did know exactly what Mr. CHIU had agreed to, and   that he accepted, and that he took over, Mr. Chiu's liabilities to the plaintiff. I have   now gone beyond preferring, because, at the end of the day, I accept the plaintiff's   version. When I talked about preferring the evidence, I meant generally; specifically I   accept the description the plaintiff has given me.

164. At one time I thought that what the plaintiff said to me at 3 o'clock in the afternoon of   the 30th of October amounted in some way to an abandonment of part of his claim. Mr. Croft, having gone through it line by line with me, taking D52 against the answers at the sub-paragraphs and paragraphs of paragraph 10 at D52 were covered by the plaintiff.

165. That, however is not all, because there is some corroborative oral evidence, and that is   the evidence of Mr. Peter MARK. Severe attacks have been made by Mr. Litton on   instructions, on Mr. MARK's recollection. If it had rested there, I would have been able   to say, "well, I just prefer this to that", but Mr. MA would not have it thus.   He wishes me to believe that Mr. MARK came to this court and deliberately perjured   himself. He said that what Mr. MARK said about what happened in his office in April 1979   was a lie. I do not accept that it was a lie. I accept it - I accept the whole of Mr.   Mark's evidence - as being truthful. It was, I agree, a long time ago. It was a fleeting   moment in one sense, but it was not that sort of fleeting moment that makes the memory   unreliable in the other sense, because it was a fleeting moment in a whole history of   matters. Mr. MARK has been reminded of this over and over again, and he eventually was   made a party to two Actions. He has every reason to remember exactly what happened, and I   have no hesitation in accepting Mr. MARK's evidence and recollection. When I say that, it   also relates to Silvensourn - and furthermore it explains Silvenspurn.

166. How I said earlier that I thought I could dispose of this matter simply, and that is why I gave such a long history, because, once the history is recited and the analysis of the   witnesses follows, everything else falls into place, and there is no need for me now to go   at length through the evidence, because I have demonstrated the processes of fact and of reasoning and of assessment that have led me to the conclusion that the plaintiff must   succeed in his action against Mr. Ha.

167. In so far as the 1st defendant is concerned, I cannot for the life of me, find any evidence against it. Such evidence as came from the plaintiff shewed that there was no case against   it ,and there will, therefore, be judgment for the 1st defendant against the plaintiff,   but there will, following my findings, be judgment for the plaintiff against the 2nd defendant and I will hear Mr. Croft in a moment as to the form of the Order her seeks.

168. There will be an Order for payment of the sums claimed under paragraph 9 of the prayer of   the final version of the Statement of Claims at D49.

169. I must now pass to the counterclaim. The counterclaim s brought on the plaintiff's   undertakings which he gave when he obtained the Mareva in junctions and the warrant for   arrest.

170. We evidence has been called on behalf of the 1st defendant in relation to the   counterclaim, and the councarclaim by the 1st defendant will be dismissed.

171. There will, by consent, be judgment for the defendants in the sum of $114,960, and I must   now pass to the remaining matter.

172. When the Mareva injunctions were obtained the plaintiff knew, and his solicitor knew, that   LAMGCORK had already obtained Mareva injunctions, and his solicitors were rightly   concerned that their client should be protected; they, therefore, commenced the   proceedings.(As I have said already, the matter of the affidavits is a matter for the Law   Society and not for me.) But, having obtained these Order from Mr. Justice Macdougall, the   then solicitors for the plaintiff proceeded to serve the Mareva Injunction on 490   financial institutions in Hong Kong. That is a course of which I thoroughly disapprove. In   my judge, upon whom it is sought to serve notice of the Order. If it is not known where   the person against whom the order is obtained, has his, her or its assets, the judge ought   to be asked for Directions as to whom should be served, and in what manner - by notice, by   advertisement, etc. I say I thoroughly disapprove - at one time I thought that I ought to   mark that disapproval by some Order, that I have come to the conclusion that I should not,   and , indeed, that I can not.

173. My brother Macdougall, on evidence put before him, which, itself, relied upon Mr. SZETO's   evidence ,made an Order that the was entitled to make, and put no limit upon those who should be served with notice of it .It was a perfectly proper Order, properly made. I say   " proper" in the strict practitioner's sense and strict judicial sense of the word. The fact that I may disapprove of what happened subsequently, cannot taint the   Order, or its service, with such impropriety as would give the 2nd defendant a cause of   action or a right to claim damages.

174. It was noticeable that Mr. MA said absolutely nothing about damage or loss, or   inconvenience suffered, as a result of the Marava Injunctions. Whether that is, as Mr. Croft urged on me, because he had assets in his- if I may call it   such-"birth-name", I know not, and it matters not. What does matter is that no   evidence has been advanced before me of any damage suffered by reason of the plaintiff   having obtained this injunctions.

175. The undertaking is in standard form. It is to abide by any Order this Court   "may" make as to damage " in case" this Court shall hereafter be of   opinion that the defendants or any of them shall have substained by reason of the Order   which the plaintiff "ought to pay".

176. But there is no evidence of the defendants substaining any damage. Certainly there was a   temporary freezing of an account with Continental Ilinois: But is that something as a   result of which I ought to make an Order? Is it something for which the plaintiff ought to   pay?

177. To that there are two answers. They can be taken jointly or severally. The first is this:   that without any evidence I cannot make an Order. The second is this: it is only an Order   that I "may" make, and it is something which the plaintiff "ought to   pay"? which means that I have a discretion, and, when I have a discretion, I have to   look at the whole of the background, the background against which the Orders were   obtained, the conduct of the defendant himself when the Orders were discharged. And, in   the exercise of my discretion, having taken into account all that Mr. Litton and Mr. Croft   have said, and on one side the affirmations of the plaintiff which cannot be relied on,   (but Mr. Justice Macdougall was not to know that ), on the other hand the affidavit of Mr.   Ma which cannot be relied upon, (but Mr. Justice Mayo was not to know that), I would   exercise my discretion, if it has to be taken in the alternative, against making any Order   in Favour of the 2nd defendant. However, ex abundanti cauteld, if I were wrong on either   or both of those, I would award $100 damages.

178. So far as the $114,960 is concerned that will be set-off against the claim and, therefore,   most probably extinguished. I cannot see that there would be any costs to go with that,   save as to pleading. Unless Mr. Croft has anything to say to the contrary ,on prayer 1 of   the counter-claim there will be an order for the costs, if any, attributable to prayer 1.   That will be a matter for the Taxing Master. The time taken on the counterclaim totals one   working may out on the 54 that we have had. Apart from that Order, therefore, the   counterclaim is dismissed on behalf of both defendants.

179. So far as the 1st defendant's costs are concerned, the Order will be "the 1st   defendant's costs, if any".

(MR. LITTON ENTERS COURT)

4.50p.m. Court rises