TO PUI KUI v. NG KWOK PIU AND OTHERS

HCA 523/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 523 OF 2008

-------------------------------

BETWEEN

-------------------------------

--------------------------

J U D G M E N T

--------------------------

The family background

1.  Mr Ng Po Sum was a successful accountant and businessman who formed a number private companies the assets of which represented the wealth he had accumulated for the benefit of his family including his wife Madam To Pui Kui and himself over many years.

2.  He was born in 1916 and married his wife then 17 years of age in December 1939.  They had eight children who are in order of age:

Ng Kwok Pui (Philip) Eldest son

Ng Yiu Chi (Eleanor) Eldest daughter

Ng Kay Chee (Angela)

Ng Woon Chi (Olympia)

Ng Kwok Tung (Tony)

Ng Kwok Ching (Jeremy)

Ng On Che (Stephanie) and

Ng Kwok Tai (Andrew)

As can be seen all were given or assumed an English Christian name in probably varying circumstances which do not call for any explanation.  They will not, I am sure, mind my referring to them by their respective Christian names hereafter, to avoid any confusion between them and because it will be easier for everyone to understand to whom I am referring.

3.  From what I can gather Mr Ng Po Sum was a patriarchal figure who took pride in his sizeable family and their achievements, and also in his wife who in turn was to become a matriarchal figure in her own right, but whose ultimate status in a family divided against itself, would, I am sure, had he been alive, have caused him much anguish.

4.  Sometime prior to May 1997 the father (and I will refer to him as such from now on) contracted or developed an illness which required him to undergo, in Hong Kong, numerous medical diagnostic tests before a decision was made at very short notice that he would go to Vancouver for surgery on 8 May of that year.  He was understandably somewhat weak physically as a result of the battery of tests and no doubt the illness itself, and perhaps somewhat anxious too about the forthcoming treatment abroad.

5.  Happily the surgery was successful and he returned to Hong Kong in or about the month of July having, it appeared, made an extremely good recovery.  His wife had accompanied him to Canada, stayed with him during his period of convalescence there, and returned with him to Hong Kong.

6.  In the following few years he appeared to progress well but his wife felt that he started to deteriorate in 2002 and he died quite suddenly on 29 March 2002.

7.  The first week or so of the month of May 1997 is a crucially important period in the lives of all concerned in this unhappy action, its events, whatever they truly were, being pivotal and I shall have to return to that in great detail later.

The family companies and businesses

8.  The father set up two accounting businesses, Ng Po Sum & Co in about 1946 and Tony Kwok Tung Ng & Co in about 1977.  The latter firm was responsible for auditing the family companies accounts.

9.  A company called Vercos Limited was incorporated to carry out Secretarial work for the family companies.

10.  The first company founded by the father and mother was Hultucktong Company Limited (“HCL”) incorporated in Hong Kong on 18 May 1965.  This company is referred to as HCL throughout.  The father and mother were the founding directors and were in fact directors for life, owning half the equity between them.  All members of the family were shareholders.

11.  In February 1976 the parents established a company known as Hultucktong Enterprises Limited (henceforth referred to as “HEL”).  It was essentially a property holding company — commercial and residential.  Once again the parents were directors for life.  They were also the shareholders together with another company jointly controlled by them, of well over 50% of the shares.  This company was to provide for their maintenance and expenditure for their lifetimes.

12.  Later in 1976 another company, Hultucktong Commercial and Industrial Company Limited (“HCIL”) was also established by them.  The shareholders were the parents, Eleanor, Andrew and HCL owning just over 50% of the share capital.

13.  In 1982 a company limited by guarantee called Ng Sheung Ming Association Limited (“NSMAL”) was established.  It had no shareholders but members and the qualifications for membership were clearly established.  The dominant feature of this company was that father and mother were permanent managers and directors, jointly and severally in control with the survivor of them continuing such management and direction.  There was provision for salaries, allowances and other benefits for the parents to endure for their lifetime with the survivor, husband or wife, entitled to 70% of the joint income and allowances, and the full continuing benefits.

14.  The principle of such provision for the parents was replicated in a special resolution of HEL in 1983 — joint and several lifetime financial support and benefits.  

15.  In February 1997 the father incorporated in the British Virgin Islands a company known as Confederated Assets Group Limited (“CAGL”).  This was to be the offshore holding company for the Hong Kong family companies and the vehicle for the assets most of which were held by HEL.  There were, it appears, fiscal advantages to such an arrangement the father having some concern, at that time, the year Hong Kong reverted to the Peoples’ Republic of China as a Special Administrative Region, and had in mind that the family might need to move to Canada whose some of them already lived, and where all had been educated at Canadian universities.

The Father, the late Mr Ng Po Sum.

16.  The patriarch of the family who amassed considerable valuable assets which he wanted his sizeable family to enjoy made provision in his life-time and some years before he was seriously ill in 1997, for his wife and children.  I have already reviewed shortly the position in relation to a number of the family companies.  It is somewhat surprising that he did not leave a Will: at least no Will has been found and we are all saddled with that state of affairs despite the reservations of certain parties to this action, and indeed of myself.  One reasonable inference to be drawn from this is that he thought that the situation as he had left it would provide for his widow and children on a just and equitable basis.  How wrong he was and how mortified he would be if he could know what has happened to his family resulting in protracted wasteful litigation in Hong Kong’s courts!

17.  Earlier in this judgment I set out the provisions, in general terms in HEL and NSMAL, which the father used to reflect his intentions to provide fully and fairly for the family including his wife of over 40 years marriage at that time.  They had been married for over 60 years at the time of his death in 2002.

18.  The two documents dated 3 March 1997 are at the forefront of the picture painted by both sides in this conflict.  I have examined them in some detail in the context of the evidence given by the witnesses each of whom has a subjective interest in the version each puts forward.

19.  If what I call the “original” resolution is the valid resolution, then it is in my view in accord with the father’s desire to provide fairly for his wife, and for his children, both male and female, even allowing for the privileged and favoured position of the eldest son.  If the “official” resolution is the valid one then it reflects a substantial diminution in the provision for the wife and is inconsistent with the philosophy enshrined in the NSMAL and HEL Articles and Memorandum.  There is such a radical difference between the two resolutions in this regard that if the “official” one does in fact reflect what the father decided there is at the very least some lingering thought or suspicion that some powerful adverse influence — that is adverse at least to the mother — has been at work.  Alternatively it may be thought that some contrivance has resulted in the father putting his name unwittingly to a document which puts his wife at a disadvantage that he never contemplated.  As I examined this event in the evidence of the principal actors, I am conscious that only the father will have known the true position.

20.  Later in that same year at a time in the first week of May, when a large number of documents came to bear various dates in that week, the father underwent a series of medical diagnostic tests which were certainly tiring, possibly upsetting and involved long attendances at hospitals and extra care at home in the interim periods.  This is self-evident from the nature of the tests disclosed by the reports from the consultants concerned.

21.  On 2 May 1997 he underwent a CT scan of the whole abdomen involving intravenous contrast.  A solid abdominal mass was noticed in the right lower quadrant.  On the following day chest X-rays were taken.  The lung fields were noted as slightly emphysematous.

22.  Two days later (5 May) a barium enema was carried out with other blood tests.  A report of 6 May from the Canossa Hospital conformed, amongst other things, the findings of the CT scan carried out several days earlier.

23.  When he arrived in Vancouver and attended the Burnaby Hospital, Dr CP Lau noted he looked “quite exhausted and frail” and “somewhat dehydrated”.  He had of course endured a 12‑hour flight but earlier that week had undergone the tests referred to a little earlier. The triphasic CT scan “involved thorough cleansing of his G1 (Gastro-Intestinal) tract” and the barium enema on 6 May required “a second time complete evacuation of all the intraluminal content of the colon.” These invasive tests would undoubtedly have been tiring and the second one uncomfortable and difficult — especially for an 80 year old man.  I do not accept that he was working in the office normally that week and in “fine fettle”. On the contrary I think that on the evidence he was vulnerable, probably lacking concentration and not well-equipped to deal with substantial documentation leading to efficient or effective reconstruction; he may well have been susceptible to persuasion and direction.  I think his actual state or condition would have been readily apparent to those who saw him and had contact with him over this period.  Accordingly I commence with substantial reservations, at the very least, concerning the evidence of Stephanie, Tony and Philip Ng.  There is an air of unreality about the picture they paint of their father.

The Issues

24.  The plaintiff relies upon the “original” resolution of CAGL dated 3 March 1997 whereby, inter alia, she was allotted 23 shares in the company and her husband, the deceased father, was allotted 25 shares as the valid resolution by the directors.  This is the document page 17 or 18 of Core Bundle 1 — Exhibit D6.  The original of this document has not materialized — as is the case with so many documents adduced in this case.

25.  She alleges that the “official” resolution bearing the same date.  Pages 15/16 of Core Bundle 1 Exhibit D5 upon which some of the defendants viz. Philip’s group, relies, is a forgery.  An identical allegation is made by her in relation to the documents purporting to effect the transfers of the father’s residual shareholding in CAGL set out in the “official” resolution.

26.  She seeks declarations that the documents referred to are forgeries, that the “original” resolution is the valid one, that the purported transfers of the deceased’s shares are null and void and that the deceased’s shares vest in her as administratrix of his estate.

27.  Philip’s group of defendants (the 1^st, 4^th, 5^th and 7^th) rely upon the “official” resolution as being the complete and valid one with the signatures of all five directors (including the plaintiff and Andrew Ng) confirming the allotment of shares, with the issue of share certificates in conformity with it.

28.  In relation to the purported transfers of the deceased’s 20 shares the pleaded Defence is both interesting and curious.  The defendants admit the state of affairs pleaded in paragraph 14(4) of the Statement of Claim:

“Neither the deceased nor the other defendants made application to the 9th defendant (CAGL) in respect of the alleged transfer. The deceased remained on the share register of the 9th defendant.”

29.  What is averred by them is:

“During the deceased’s lifetime there was no practical need to register the transfer of the shares, out of respect to the deceased it was not done; after a while it was overlooked until disputes arose between the 2 groups of family members in about November 2005.”

The first sentence, about “practical need” is indeed odd.  The second sentence giving some secondary explanation i.e. “out of respect to the deceased” does not make sense.  The foregoing and the final excuse — “after a while it was overlooked” — does not account for the 8½ year gap and is quite inconsistent with Stephanie Ng’s evidence.  This all gives the impression that for one reason or another the distribution of the father’s remaining shares was not a serious exercise or one that might be resorted to only in certain circumstances.  As will appear later in this judgment it was seriously defective in a number of respects and the defendants’ pleading seems to acknowledge this, albeit in a half-hearted fashion.

30.  The issues in this action are clear-cut enough but the evidence has ranged far and wide, trespassing into the issues in some of the other actions.  To an extent this has been inevitable as efforts to undermine the credibility of some witnesses are difficult to circumscribe.

31.  The absence of mother and father has left a number of matters “up in the air” and so I have had to rely upon those few documents which reliably speak for themselves.  The preponderance of copy documents which by their very nature obstruct close analysis has been a substantial handicap.  No satisfactory explanation has been given for their non-appearance.  As a result the live witnesses have been subjected to a detailed consideration.  The handwriting reports from two experts are of very limited value, they having been limited by the form of the copy documents and the scanning of such upon which they have had to rely.

32.  During the early course of the trial, it emerged that the so-caused “Statutory Book” of HEL, was not the original statutory book but was said to be a reconstruction of the old records of HEL. I termed it a “fabrication” to which Mr Sussex, SC for Philip’s group objected.  What he had to concede at a very late stage, however was that no previous notice had been given to the plaintiff as to how it had come into being.  It was not the genuine contemporaneous record that it had been represented to be.  The concession seemed to have been given with some reluctance and as if it were of no consequence.  In my view the so-called record is worthless.  After all the evidence had been given and I was considering aspects of this judgment, I called for the corresponding book for CAGL.  I was informed by the solicitors for Philip’s group that it did not exist.

Mr Sussex’s Applications in the course of the trial

1. Application for further expert handwriting evidence.

33.  This was to enable the defendants’ expert to examine a further 85 documents in the light of the denial by certain of the plaintiff’s witnesses that signatures attributed to them are in fact theirs.  Mr Sussex conceded that the documents do not all relate to this action but did not specify how many.  Nor was he able to say which were original documents and which were copies.  It is entirely unclear how such further examination would assist the determination of the issues in this particular action.

34.  So far there is no real dispute on the reports from the respective experts.  Many of the documents they considered were not original documents but copies which had been subjected to scanning and the limitations that such copies impose upon expert analysis were clearly set out in the reports.  As they stand those reports have very little value, but some residual value given that the father is no longer alive.  That factor in any event bedevils the issues in this case.

35.  The time has long gone when it would have been reasonable to extend the ambit of such limited evidence.  Handwriting evidence was subject to a strict order made during a case management hearing which was not in fact complied with.  I had made it clear, with the agreement of all parties, how I proposed to deal with that existing handwriting evidence, but Mr Sussex seemed to have overlooked or forgotten that agreement.

36.  As far as this new application is concerned into would have been wholly inappropriate to accede to it, quite apart from its vagueness and uncertainty of scope, thereby extending time and cost, when I was able to form necessary views on the basis of the reports already adduced, and at that stage, yet to be adduced.

2. The application to amend the Defence

37.  Some of the proposed amendments seem cosmetic in nature.  Mr Sussex himself said that in any event without them, he was able to make submissions covered by them.  It is clear that they could and should have been made, if they were considered desirable, some years ago.  Although he sought to make his application on the third day of the trial, I decided that it should wait until the end of the plaintiff’s case.

38.  The limitation point would not be a cosmetic addition.  This is, in my view, unarguably a point which should have been pleaded a long time ago.  Had it been raised at the appropriate time consideration could have been given to trying it as a preliminary issue.  The plaintiff would have had the opportunity to deal with the matter fully and fairly.  To have raised it now is a mere diversion in my judgment.  In any event the writ in this action was issued in March 2008.  The documents in relation to the purported transfer of the father’s residual shareholding were hidden from the sight and knowledge of the plaintiff and her witnesses until November 2005, on the evidence of Philip’s group of defendants.

The handwriting evidence

39.  Both parties instructed an expert in this field.  Mr David Browne reported on behalf of Philip’s group and Mr SC Leung reported for the plaintiff.  They were solely concerned with the signatures of Mr Ng Po Sum, the deceased father.

40.  Both reports were limited in the ambit of their examination by the fact that they did not have original documents to consider for detailed examination only scanned images of the disputed and control documents. 

41.  Mr Leung makes it clear that the “examination process was undoubtedly hampered” because of these limitations.  “High definition” scanning is “inevitably subject [to] distortion and loss of details present on the original documents being recorded … therefore examination on scanned images cannot be regarded as a satisfactory substitute for an inspection of the original documents.”  Mr Leung’s assessment of the documents bearing the purported signatures of the father falls into four categories — “probably written”, “may have been written”, “may not have been written”, and “probably not written”.

42.  Mr Browne’s assessments varies only in the terminology he uses — “while I cannot totally exclude the possibility that another person wrote them, I consider this to be highly unlikely”, and “there is moderate evidence that the signatures were made by the author of the reference material … I cannot exclude the possibility that another person wrote them but I consider this to be a less likely explanation …”.  His range of categories of the evidence of examination of the questioned signatures is from “very strong evidence”, to “strong evidence” and finally to “moderate evidence”. 

43.  The element of fairness to be expected of such experts is well demonstrated.  Overall the evidence in relation to the signatures of the father is inconclusive.  I could not find positively one way or the other.  The reservations shared by both experts reflect my own but I have had the advantage over them of considering the substantial extraneous evidence.  Given the problems in relation to the material considered, this is not in my view an exercise to be repeated.

The Evidence in the Plaintiff’s case

The Plaintiff

44.  The mother is now 90 years of age.  She has already been involved in one action in the Hong Kong courts with some of her children the judgment in which we are still awaiting at the time of writing, and she had to take proceedings against her eldest son, Philip, in order to recover a sum of money being a number of loans made by her to him for different reasons.

45.  I do not know the reason why she has not given evidence in this case — it may be due to her age, a degree of infirmity, the stress of such proceedings involving the whole of her family, or some other reason best known to those advising her.  I should not conjecture but it does mean that I have no evidence from her to deal with documents purportedly signed by her.  I have not read her statement and therefore am entirely uninfluenced by it.  I do not know what she has to say about the controversial documents dated 3 March 1997.

The evidence of Eleanor Ng

46.  Eleanor was in Canada, where she owned a house in Vancouver when the father arrived on or about 8/9 May 1997 for his operation.

47.  She said that she first heard of CAGL in May 2005 and then attended a meeting on 28 June 2005 accompanied by a representative of her solicitors Johnson, Stokes and Master.  It was at that meeting that Philip Ng was seeking to sell the property assets accumulated by their father.

48.  She had not been involved in the activity surrounding the documents dated 3 March 1997 although she was one of the list of allottees in both documents but had not signed against her name.  She was not a director of CAGL.  There is no evidence that either of those documents came to her attention at the material time, or for many years afterwards.

49.  There were a large number of documents adduced on which her signature purports to be, but she explained how her father preferred her to sign documents, and that she did not sign a whole batch of documents bearing dates in the first week of May 1997, which Stephanie Ng said were sent by courier to Canada for the signatures of Andrew, Eleanor and Angela.

50.  Eleanor’s testimony does not directly touch upon the issues in this trial save that she confirms the weak state of the father on his arrival in Canada.  The documents concerning her are those relating to the reconstruction of the family companies into CAGL which are the subject of conflicting evidence from Stephanie, Philip and Tony but with which I do not need to be concerned in this action.

51.  Suffice it to say that her demeanour and the content of her evidence was credible though I have made no findings as to the status of the signatures purporting to be hers on many documents.  I prefer her evidence to that of Stephanie on a general basis.

The evidence of Angela Ng

52.  This lady was confident and self-assured and gave her evidence with care.

53.  Her husband is a doctor who had for some years been involved in the medical care of his father-in-law, Mr Ng Po Sum.  She lives in Canada and in 1997 was closely involved with support for her father when he arrived in Vancouver for treatment at the Burnaby Hospital.

54.  She first learned of the documents of 3 March 1997 through Andrew.  She did not see any until late 2006 and then she saw a copy of Core Bundle 1 – p.17 — with Andrew’s signature on it.  This was after Andrew ceased to be employed in Tony’s office.  She first knew of her allotment of shares in CAGL in June 2005 (the meeting called to deal with the sale of assets at which Eleanor attended with her solicitor.)

55.  She rejected the suggestion that there had been a conversation in Eleanor’s kitchen between the father and Philip, (at which Olympia, Angela and mother had been present) to the effect that father had disposed of all his assets by way of distribution.  As I indicate later this suggested conversation does not have the ring of truth about it but is a construction in my view to try and lend credence to the notion that all assets were now in the hands of the children — or at least control of them was.

56.  She was closely involved after 2005 in efforts to obtain access to all the relevant documents of the various family companies and certainly felt that she was being obstructed.  She made it clear that she had no knowledge of the re-structuring of the family companies.  The notion that she signed all the documents bearing her name when she was in Canada, they having been sent by courier, raises a number of questions.  She was in Hong Kong and accompanied her father, mother and Philip to Canada.  She could have had them put to her whilst in Hong Kong.  Alternatively she could have been given them to take to Canada herself, both options being quicker and safer courses as well as being more logical.  The restructuring involved such loss and removal of rights that she as a careful and well-qualified woman would be unlikely to have acquiesced in such activity involving such fundamental changes.

57.  She was cross-examined substantially on matters outside the ambit of this particular action, and for that reason I do not need to consider her evidence in greater detail.  On the material issues she gave an interesting explanation for the 25/23 — father/mother distribution of shares in CAGL set out in the “original” resolution dated 3 March 1997.  In 2008 when she and her mother considered the distribution of shares in the “official” resolution, she said her mother’s reaction was that she would not have agreed to the reduction from 23 to 10 shares, a matter which continues to be an oddity. “If there was no benefit to me I would not sign it” was her mother’s reaction.

58.  Since I am concerned essentially with documents which were not contemporaneously considered by Angela Ng I do not propose at this stage to go beyond the ambit of this action to consider the matter of the authenticity of her signatures.  For the present purpose I found her a reliable witness. 

The evidence of Andrew Ng

59.  It was not difficult to detect a rift between Andrew and Tony in particular and Philip also, but perhaps to a lesser extent. Andrew was somewhat self-deprecating.  He is the youngest of this sizeable clutch of siblings.

60.  He saw the “original” resolution of 3 March 1997 when he was given it to sign.  In fact he made a copy of it and signed the “original” the next day.  There were other signatures on it at that time.  This must of course have been so since he made a copy of the original which had five signatures on it, the father having signed twice.  He said he asked for that “original” to be photocopied for him but for some unknown reason that was not done.

61.  It was not until late 2000 — shortly before 10 November he recalled — that this document came to the fore again.  Tony Ng came to see him about a declaration of trust which he wanted Andrew to sign.  This was to record that Andrew held 16 shares on trust for Tony.  This caused Andrew to get out his copy of the “original” resolution (Core Bundle 1 – p.18) and go and ask Tony why he was alleged to be holding 16 shares on trust for him when, according to the document, he only held 16 shares and those in his own right.  Producing the document to Tony, he saw him cross it — as shown in Core Bundle 1 p.17 and 18 — and write “Illegal and incorrect” on it.  Andrew then took the document back but not long afterwards, Tony asked him to return it to him. Thinking it strange — and one can understand such thought in the circumstances — Andrew made two copies (he was known as the copying man) and gave the one on which Tony Ng had written, to him.  Andrew then signed one of the two copies he had retained.  These are produced as pages 17 and 18.  The copy bearing Tony’s original writing has not been produced by him despite the fact that he was obviously keen to recover it.  I accept the evidence of Andrew on this.  Tony Ng, he said went on to produce a copy of the “official” resolution (Core Bundle 1 – p.15 Exhibit D5) which showed Andrew’s holding to be 24 shares, of which Tony contended 16 were held on trust for him.  When asked why the number should be 16, Tony explained that his sons and his wife’s entitlement was included and added that the company, CAGL, should give 4 shares to Andrew’s wife.  The Declaration of Trust which Tony asked Andrew to sign was in fact signed in November 2000 but backdated by Tony to 3 March 1997.  Similarly Andrew was asked to sign the second page of the “official” resolution, Tony saying to him that the staff had forgotten to ask him to do so at the time (on or about 3 March 1997).  Seeing the other signatures on the sheet (Core Bundle 1 – p.16 Exhibit D5) he did so, although his recollection at the time was that the company stamp or seal was not then embossed on that document.  Given that the embossing is simply a colourless impression on paper, he could be mistaken on this aspect.  Otherwise I accept Andrew’s evidence on these details as well, although they still leave unanswered the questions arising from the two versions of the resolution or resolutions dated 3 March 1997.

62.  For the reasons stated elsewhere I do not propose to examine the issues outside those pleaded in this action. In 2006, shortly after the family unit splintered as a result of what emerged in 2005, Andrew was dismissed by Tony from this employment with Tony Kwok Tung Ng & Co. (in April 2006).  The relationship between himself and his brother seems to have cooled after the meeting on 28 June 2005.

The Evidence in the Defence Case

Stephanie Ng Oi Che

63.  Madam Stephanie is the youngest daughter and has been closely involved with two companies, in particular Vercos Ltd which she says she owns and Wins Secretarial Services which she and Philip jointly control.  Both provide company secretarial services to the Ng family companies as well as outside clients.  In practical terms Stephanie administers both of them.

64.  There is little doubt that on her evidence she was closely involved in the paper work generated by the family companies — and there was plenty of it — from an early stage.  That is probably the limit of the extent to which I can safely rely upon her evidence in this case.

65.  It is essential to deal with the documents prepared by her company Vercos in as chronological an order as can be deduced and the material date, as the starting point, is 3 March 1997 — or at least, on or about 3 March 1997.

66.  The first document is at page 18 in Core Bundle 1 — Exhibit D6.  It is one of many documents that has been photocopied.  Its original does not exist, or, if it does, it has not been produced.  It was prepared on Stephanie’s instructions at her father’s request.  She said that he wanted to reorganize his assets into a British Virgin Islands company in order to make them more secure, and avoid stamp duty and estate duty.  He gave her a piece of paper with figures for share allotments.  He explained that the figures represented the mother’s proposals for the distribution of the shares in the assets amongst members of the family.  She said her father’s signature was already on the document when he brought it to her, she having given it to him after it had been prepared. She then signed against her printed name.  She explained that her allotment of shares included eight held on trust for Angela and eight held similarly for Jeremy.  The document itself does not of course explain this.

67.  At the top of the document is printed “First Directors’ Resolutions of the Corporation passed on 3 March 1997.” Also on it further down under the heading: “Application for and allotment of shares” is typed “Application for share in the company was submitted as follows:”  There then were printed the names of Philip, Eleanor, Olympia, Stephanie, Andrew, father (Ng Po Sum) and mother (To Pui Kui), in that order. The father has signed twice against his name, Philip and Stephanie and the mother have signed against their names.  Underneath those names and signatures is the following printed sentence: “Resolved that the application be approved and that the share certificates be issued accordingly.”  The underlining of words is mine.  Although said by Stephanie to be a draft there is no such word on the document, nor anything to suggest that it is a draft. Hence my underlining of the words that denote the past tense.  Having dealt with the essential details of the document save as to the actual numbers of shares allotted, I shall not repeat those details in my consideration of the other witnesses’ evidence on this document.

68.  She said that her father told her he wanted to follow his idea of the distribution of shareholdings.  If that was the case, and given his position in the family and overall control, it would be surprising if this document — the one she described as a draft — did not in fact reflect what he wanted.  At any early stage I sensed that Madam Stephanie’s evidence, though consistent in this regard with Philip’s, was contrived in order to make it appear that the father wanted to reduce or downgrade somehow the mother’s interest in the family assets.  The suggestion that he was seeking the children’s reactions to proposals emanating from mother which he would be happy to reject, is wholly inconsistent with his long-term regard for her and his desire to give her a preeminent position and the level of security and independence, reflected in the provisions in NSMAL and HEL, set out earlier. 

69.  She did not see the cross which covered the whole of the page and the boldly written words “incorrect and illegal”, which Tony Ng accepts were written by him, until one of these actions was commenced i.e. in 2008 or later, and she had never seen, a copy of that document bearing Andrew’s signature.

70.  Moving on to document page 15/16 in Core Bundle 1 Exhibit D5, her evidence was that she prepared, or arranged for the preparation of this document again on her father’s instructions using, as in relation to the first document, a piece of paper provided by him with the figures for the shareholdings on it.  He said, according to Stephanie that he wanted to follow his formula for share distribution. 

71.  The first page of that document is in identical printed form save as to the figures for the shareholdings.  There is no signature alongside any of the names of the applicants for shares but on the face of it, at the bottom, is what appears to be the signature of the father. The figures for the shareholdings now show significant variations.  The father’s is reduced to 20 but most significantly the mother’s is reduced from 23 to 10.  The reductions in the figures for father and mother are balanced by increases in Stephanie’s from 24 to 34, and in Andrew’s from 16 to 24. Stephanie says that these increases in fact reflect shares held on trust by the two of them for other siblings.  It is somewhat odd that in the case of both documents there is no reference to shares being held on trust.

72.  Attached to the second resolution dated 3 March 1997 (p.15/16 Exh. D5) is a sheet in the same form of printing.  On it are the signatures purportedly of the five directors of CAGL — father and mother, Philip, Stephanie and Andrew.  Although the document is not specific as to the capacity in which they signed, it is to be assumed that it was as directors.  The original of this page, or at least the one bearing actual signatures, has the impressed seal of the company.

73.  In the context of the two-page “Resolution” and “Allotment of shares” at least as far as the printed date (3 March 1997) is concerned, is a series of Photostat share certificates.  In one the mother is the holder of 10 shares, Stephanie’s signature being a squiggle, quite unlike her frequently identifiable signature.  The father’s purported signature also appears on the certificate.  Similarly the certificate recording 20 shares to the father is signed on the face of it, by the father and Stephanie with her squiggle “signature”.  There are two certificates recording the issue of 16 and 8 shares respectively to Andrew.  In relation to Stephanie there are three certificates recording the issue of 18, and 8 and 8 shares respectively, bearing the same signatures in the same form.

74.  In Olympia’s name there is a certificate for 8 shares, and similarly for 8 shares in Eleanor’s name.  Finally there is a certificate in Philip’s name for 16 shares.  All are identically signed.

75.  There are some documents described as “Declarations of Trust” of the same date which are deficient in material respects i.e. absence of signatures and witnesses to signatures, and with manuscript remarks.

76.  All that documentation allegedly of 3 March 1997 gives rise to questions and further consideration but none more so than a series of documents dated 8 May 1997.  The dates are not typed or printed on but put on by a manual rubber (or other material) adjustable date stamp.  This clutch of documents has according to Stephanie’s evidence, a bizarre history created by her own actions.  They are pages numbered 32 to 47 in Core Bundle 1 — (Exhibits D13 & D14).  Initially she said that they were prepared on 8 May 1997, which is the date on all 16 of them stamped by the adjustable manual device.  This was the day on which the father left for Vancouver.  She then said that they were not prepared on the morning of 8 May 1997 but before he left for Canada.  Next, she said that they were prepared and signed by him about one week before he left.  This was enlarged to late April/early May and that he signed them at home when she brought them to him.

77.  They all relate to the purported transfer of the father’s residual holding of 20 shares being Instruments of Transfer and Bought and Sold notes.  They seek to evidence the transfer of 9 shares to Philip, 3 shares each to Tony and Jeremy, and 1 (one) each to Eleanor, Angela, Olympia, Stephanie and Andrew.  To the objective observer that is clearly a disproportionate division amongst the children.  Even more noticeable is the omission of any allocation to the mother of the family.  This is another instance of action, if it truly be his action, which is inconsistent with his practice of making provision for his wife.

78.  In every Instrument of Transfer, Lydia Chu, an employee of Vercos, Stephanie’s company, purports to be the signing witness to the signature of the father.  We now know through Stephanie’s evidence that she did not sign as witnessing his signature.  Instead she signed as purporting to identify his signature from knowledge of having seen his signature in the past.  And yet since, according to Stephanie, the father was in the office every day, his signing of the documents, if in fact he did sign them, could have been properly witnessed.

79.  It is necessary to look at the documents purportedly relating to each transfer starting with that to the eldest son, Philip.  (Core Bundle 1 — p.32 and 33).  He signed as transferee.  There is a signature of a Fiona Leung as witness.  There is no evidence that she signed as witness rather than as identifier of his signature.  That took place in 2005 some 8 years after the document was allegedly prepared.  The “Bought Note” bears Philip’s signature but that was some 8 years later, not on 8 May 1997 the date on the ‘Note”.

80.  Moving on to Tony Ng as transferee in respect of 3 shares, he signed, he said, in November 2005.  Again, Fiona Leung’s signature appears alongside and it is subject to the same comments I have made earlier.  The “Bought Note” is signed by him but again it cannot have been on 8 May 1997, the date on it and the “Sold Note”.

81.  The last of those transfers bearing a signature of the transferee is that in respect of one share to Stephanie.  She appears to have signed but, as she says, it was over 8 years later.  The signature of Fiona Leung appears purportedly as witness.  The “Bought Note” is signed by her but despite its date, 8 May 1997, she too says she signed over 8 years later.

82.  The Transfers and Bought Notes in favour of Eleanor, (1 share) Angela (1 share), Jeremy (3 shares), Andres (1 share), and Olympia (1 share) are all unsigned.

83.  The story became stranger and more questionable when Stephanie explained the time gap between April 1997 and November 2005.

84.  She explained that she thought father wanted the 20 shares distributed because he was old and about to undergo surgery. In virtually the next breath she said he was in fine fettle and working in the office on a daily basis in the first week of May 1997 before he flew to Canada on the afternoon of 8 May.  In the light of one’s knowledge of what he had undergone in the form of medical tests that week, and my conclusions set out earlier, I find her evidence inconsistent and unreliable.

85.  Having prepared these transfer documents in late April or early May 1997 she said she handed them to her father and then in 2001 he returned them to her whereupon she put them in a brown envelope and, in effect, hid them away.  She knew the distribution had excluded her mother and did not want to upset her by telling her.  It appears that she feared some adverse reaction from her mother.  When the dispute between members of the family erupted in 2005 she suddenly remembered this clutch of documents.

86.  Whatever her somewhat dubious account of this strange ‘secret’ between her father and herself which she felt should be kept from her mother, the father survived until late March 2002 — nearly five years after the preparation of these documents and yet nothing was done about completing them and effecting the transfers.  In fact, if Stephanie is to be believed, everybody except father (who died on 29 March 2002) was ignorant of any attempt or plan to distribute his remaining shares until late 2005. The corollary of that is that all were of the view that the father still held 20 shares in CAGL for all those years.  As will appear later my judgment is that he remained the holder of those shares at the time of his death.

87.  There is at least one other document of significance in relation to the father’s residual holding of 20 shares in CAGL.  At page 3581.1 in red Bundle C14 is the first page (in translation) of a draft Agenda of CAGL for a meeting on Tuesday 12 July 2005 at the offices of the solicitors Lo, Wong & Tsui.

88.  Item 10 of that Agenda proposes as follows:

“Regarding the 20 shares in CAGL held by Mr Ng Po Sum, 10 shares should first be allocated to his spouse. (i.e. Madam Ng To Pui Kiu) while the remaining 10 shares be allocated in proportion to holding of shares in CAGL. As Mr Ng Po Sum had made a fair allocation before his death, and it was his hope that his children and sons’ children would be able to enjoy the fruits of his hard work, we should comply with his wish in respect of the allocation, so that the soul of Mr Ng Po Sum in heaven may rest in peace.”

No one has been able to tell me who prepared that Agenda or the source of the proposal.  The meeting did not in fact take place.  There are several copies of this Agenda in the Bundle C14.  In one, at page 3583 paragraph 10 of the Chinese version is completely crossed out manually and above it is written:

“Crossed out by NG KWOK TUNG after given me the first Draft.”

And beneath that sentence is the signature “Andrew”. (P.3583 and 3570).  I think this particular page of one of the copies has been overlooked because neither Andrew nor Tony gave evidence about it so I must be careful about the inferences or conclusions that I should draw.  However there are some very firm conclusions that I can reach in relation to it.

89.  Whoever drew it up as a proposition was totally ignorant of the documents concealed by Stephanie.  She made it clear that she was the only person who knew of the purported transfer documents relating to the father’s 20 shares.  Secondly whoever crossed out that paragraph was determined that mother should have none of the 20 shares held by the father — alternatively it was done to hide any consideration or knowledge that there were 20 shares still in father’s name over three years after his death.

90.  There is of course, if the obliteration of that paragraph (for that was what it was) was done by Tony, an interesting consistency with Andrew’s version of how p.17 or 18 came to be crossed through by Ng Kwok Tung Tony and over-written “Incorrect and illegal.”  Tony Ng’s attitude as I detected it from the way he gave evidence, and its content, was, if not hostile to his mother’s interest, at least indifferent to it.

91.  The other main area of Stephanie’s activities in relation to the family companies concerns the large number of documents bearing a date in the first week of May purporting to be company meetings and resolutions.

92.  In her written statement which was adduced as her principal evidence-in-chief, she asserted that all the documents bearing dates between 1 and 8 May 1997, and all the meetings referred to in the documents as having taken place within those dates were accurately dated and had in fact taken place.  (Bundle B1 page16 paragraph 41 et seq.) Starting with HEL she relates every document to actual activity on the date which it bears.  The inevitable implication was that  in the week before the father flew to Vancouver, he was heavily engaged in giving instructions for the preparation of documents and attending meetings at various times of the days in question.

93.  In fact the reasonable conclusion to be drawn from the succession of diagnostic tests and treatments was that he was in no fit state to be involved for hours in the office attending to this flurry of corporate activity and attending meetings and discussing agenda.  Her statement was dated 2 July 2011.

94.  At some stage it must have dawned on Stephanie, or the lawyers acting for that side of the family, that this assertion was simply untenable.  Eventually, and shortly before this trial started, Stephanie’s supplemental statement contained (at B2 p.596 §51) a different story:

“I want to re-iterate that all the minutes of directors and EGM, consent to short notices in the restructuring in May 1997 were first like all the other minutes in the Ng family companies, circulated for signatures by the directors and shareholders. We did not actually sit down together to have a meeting face to face.”

95.  Her explanation was expanded in her oral evidence to assert that all the documentation was prepared in late April and all signed at the same time by the father, with different dates and times being given, no doubt so as to give the illusion that this was a series of properly planned and properly executed steps at proper meetings recording the actual attendance of those required to make the necessary decisions.  It was a charade even if the practice as such is legitimate.  She confirmed that although her father read one or two thoroughly (she could only assume this on the basis of the time taken by him) he did not read the reminder so thoroughly “as he knew they all related to the restructuring,” involving HEL, HCL, HCIL and Tarron.

96.  For the reasons given earlier I found Stephanie Ng to be an unconvincing witness.

Philip Ng

97.  Philip Ng is the eldest and most favoured son in a culture in which the first-born son receives an advantage over his younger brothers and sisters.  Having said that, this tendency to favour the eldest son in material terms is not wholly unique to this culture.

98.  Philip Ng is single.  He is now a wealthy man, he freely admits, owning several properties in his own right.  He has no dependants.  He is 73 years of age.

99.  He is a director of HEL and confirmed that all the documents pertaining to meetings, notices and resolutions of HEL represented a simple shuffling around of paperwork, no meetings having actually taken place, and the datings and timings typed on these papers constituting a simple charade.

100.  He was one of the subscribers, with father, mother, Stephanie and Andrew to the memorandum and Articles of Association of CAGL, signing one of a number of documents dated 3 March 1997 (Core Bundle 1 p.13 Exhibit D4).  In relation to the single sheet of printing — the “original” resolution of 3 March 1997 — he said, that father gave it to him in the former’s office on or about 3 March, saying that it was a draft based on a formula prepared by the mother as to how assets were to be distributed and that he wanted the children’s opinion.  Philip Ng said that he knew that this allotment was different from his father’s calculation or formula.  He said that he simply signed against his name on the “original” resolution and that was the end of his interest in the matter.  Father asked him to sign and he said “I thought that it would do no harm”. 

101.  He did not see the copy “original” resolution with the ‘X’ and words “Illegal and incorrect” until the litigation started. In relation to the various documents relevant to the family companies he said he signed at his father’s request.

102.  Both he and Stephanie spoke of a conversation in Eleanor’s kitchen in Canada shortly before the father went into Burnaby Hospital for his operation sometime between 9 and 14 May 1997.  Philip is alleged to have said to his father that he should not be so frugal and should spend some money.  The father is said to have replied to the effect that he had given away all his assets — that he did not have any money now as he had distributed it all.

103.  There is something unreal about this purported conversation. According to Stephanie only father and she were aware of any attempt to distribute his remaining interest in CAGL.  And yet Philip was saying that mother was present when this conversation took place.  If the father had genuinely distributed his remaining shares in CAGL to the exclusion of mother and wanted to keep it a secret he would be unlikely to want to excite interest or curiosity in what form that distribution took.  It is also inconsistent with his control over the companies and businesses exercised after his return to Hong Kong in July 1997 following successful surgery and convalescence.

104.  There is yet another area of unreality in Philip Ng’s evidence.  When he left Hong Kong with his parents on 8 May 1997 he said he lent physical support to his mother — his father did not need it.  He could walk by himself.  He added that he did not know that his father had undergone a series of tests and scans that week, that his father went to work every day, that he saw him every day and had dinner at home with father and mother every night, and that his father made no mention of any tests that he had undergone.

105.  I do not find this evidence at all credible. Together with the other aspects I have concluded that it is put forward to try and lend credence and value to the documents purporting to divest the father of his residual shareholding in CAGL and suggest that he was at all material times behaving with full command of his facilities and judgment.

106.  The other curious feature is one I have already dealt with to some extent but needs to be revisited in the light of Philip Ng’s evidence in relation to it.

107.  The Agenda for the EGM of CAGL on 12 July 2005, which did not in fact take place, was prepared by him he said (Bundle C14 Red — p.3575).  He referred to mother’s signature on that page.  It is only one character.  He suggested that mother had thereby endorsed the contents.  If the copy he refers to is the one without the provision for the disposal of father’s 20 shares, I cannot accept that.  Certainly in an identical copy of the Agenda, paragraph 10, providing for that disposal, appears.  Then in another copy it is struck through by a comprehensive obliteration, and on another copy, above the same obliteration, is what on the face of it is Andrew Ng’s comment as to how it came to be struck through. Philip Ng said he prepared every paragraph except paragraph 10 but was unable to shed light on its initial inclusion or on its subsequent exclusion.  That is entirely unsatisfactory and surprising.  It remains somewhat of a mystery.  It is clear however that it was included on the basis that the father was believed to have a residual holding in CAGL of 20 shares.  The incomplete and defective documents purporting to deal with a distribution, lying in Stephanie’s desk according to her, had not yet emerged.

108.  He said that when his mother found out about the distribution referred to in those documents, she was furious.  I think any strong reaction was entirely reasonable.  She must have thought it an extreme slight or the product of some sleight of hand on the part of someone.  He added that he was not surprised that she had only just found out — he had only just learned of their existence himself, according to him, but said that it was in accordance with his father’s wishes.  The simple unfairness of the purported distribution never seemed to have struck him.  Perhaps he was too consumed with the thought that, on the face of it, he was to have almost half the number of shares held by his father.

109.  There is one particularly sad feature of the relationship now between mother and eldest son and that is the fact that mother had to take proceedings in the High Court against Philip Ng in order to recover HK$1.7 million being loans made by her over a few years.  The son contended that they were gifts from her and in some cases reimbursement of sums paid by him for or on behalf of his brothers and/or sisters.

110.  But it was clear from his change of story in an Amended Defence that some of the money was in fact borrowed on a speculative basis — but that it was not due for repayment until the speculation had succeeded.  As a wealthy man in his own right by that time it is difficult to understand why he needed to borrow money from his 80-year old mother and his explanation for what he said were gifts certainly look odd on paper.  Eventually (in 2008) the action was settled by his paying HK$1.2 million to his mother.  This is however of only peripheral interest and does not affect the issues.  Undoubtedly it has added to the bitterness and antipathy of both sides.  It has also coloured his attitude.  I found his evidence overall, unconvincing.

Tony Ng

111.  Tony Ng is the second son of the family.  He is an accountant and runs a practice named Tony Kwok Tung Ng & Co. which is responsible for the audit of many if not all of the family companies.

112.  When what he described as the reorganization of the family companies was taking place, it was his understanding that all the family was told by the father.  He said that he could hear this in phone calls from the father to other family members, because their respective offices were so close.  By this reorganization he understood that the father could achieve for the children, shareholdings in the same proportions as his formula (the NSMAL formula) under a holding company CAGL.

113.  The “original” document dated 3 March 1997 (Page 18 of Core Bundle 1 Exh. D6) was handed to him by his father on that date.  It did not have a second sheet (as there was to p.15 Core Bundle 1 – Exh. D5).  His father told him mother wanted a different division from the proportions set out in HEL.  She wanted sons and daughters to have the same as each other with the exception of Philip.

114.  Tony Ng said that he told his father, in effect, “You have been advocating your method throughout your life — why does it have to be changed suddenly?”  His father having thought about it said that he would prefer to go back to his original method.  Whereupon Tony Ng says that he struck the document through with a cross and wrote the oft-to-be repeated words “Incorrect and Illegal”.  He said he did this first to remind his father that the draft was wrong.  I have made it clear that I do not believe Tony Ng on this point.  It is utterly in congruous for him to have done this in front of his father, was quite unnecessary and would have been insulting to his mother (and his father).  I have serious doubts as to whether Tony Ng first saw this document in the circumstances he outlined, though he certainly saw it at some later stage, before his encounter with his brother Andrew Ng in November 2000.  He added that neither mother nor any of the brothers and sisters made any comment to him about what he had written on the document.

115.  In relation to the purported transfers of father’s 20 shares allocated under the “official” allocation of 3 March 1997 (p.15/16 of Core Bundle 1 — Exh. D5) Tony Ng said that the father kept this to himself.  He agreed that he signed the documents relating to him in November 2005, some 3½ years after the father’s death, and 8½ years after the purported dating of them (i.e. 8 May 1997).

116.  Rather like Stephanie Ng’s evidence on this aspect, he described it is being a secret which father kept to himself, although of course Stephanie alone was, on her evidence, privy to the secret — adding that “he did not want us to know how he treated the 20 shares” although of course if the transfers were to take effect, the documents would have to be completed properly, dated properly and not be deficient in any material respect.

117.  Tony Ng’s action and attitude in striking through the copy of page 18 produced to him by Andrew, confirms to me his knowledge of its existence prior to Andrew’s production of it and his idea of dismissing it as “Incorrect and illegal” indicated a desire to distance himself from it.  Was he caught by surprise at its appearance in November 2000?  At that time his father was still alive.  He could quite simply have said words to the effect “You had better ask father about it”, as well as stating his understanding of the position.  After all he was not one of the identified directors of CAGL nor was he a signatory to either of the two “first resolutions”.  Although he had shares in CAGL they were not in his own name but held on trust for him by Andrew.  It became clear that they were not on good terms, and eventually Tony dismissed Andrew from his job with the accounting practice of Tony Kwok Tung Ng & Co. which he ran with his father.

118.  It was also clear that despite a few perfunctory words about his mother that he had less than normal filial regard for her.  One sentence in his statement about his mother caused one to raise eyebrows, not about the mother but about the son who could see fit to make an utterly irrelevant allegation, gratuitously, about his ageing mother.

119.  I was not impressed by the evidence of Tony Ng.  It had unpleasant aspects to it as well as a strong flavour of self-serving distortion.  It is regrettable to have to make such findings but in a family dispute of intensity where a motivation of greed becomes obvious, it is almost inevitable.  One of the strongest indicators of his reluctance to accord his mother her proper position was his reply to the question “Your father was supported by his wife?” _____ “I don’t know what you mean”.  He sought to explain this as merely indicating financial support which he did not accept as all the wealth was earned by the father.  Very shortly afterwards he agreed that he would defer to his mother if he thought “it was right”.

Olympia Ng

120.  She was in Canada when her father arrived from Hong Kong for his operation.  Apparently he asked her on 9 May 1997 to sign some documents he showed to her.  She signed accordingly but her recollection is that no one else signed in her presence although there were other signatures on the documents.  She knew that there were some blank spaces.

121.  Although she knew she had some shares on the strength of what her father had told her, she had no idea what they were worth and did not have any share certificates.  She spoke of a conversation with him  in July 1997 when out for a walk with him during his recovery period in Canada, which, together with her recollection of the “kitchen conversation” of which Philip Ng gave evidence, appeared to lend some support to his account.  How much of that is her genuine recollection and how much the result of suggestion or discussion between them is difficult to say but it is not in any case essential.  However I find the suggestion that the father should indicate that he was devoid of wealth or assets, in front of his wife and children, somewhat unreal and I discount it accordingly.

122.  She was clear in indicating that she did not pay much attention to what she was asked to sign.  She relied upon her father’s fairness.  He had shown himself to be dedicated to his wife and family and providing for them.  She signed documents because she believed it was in her interest to sign them.  On the crucial issues I do not think that her evidence helped one way or the other.

Jeremy Ng

123.  He did not give evidence and played no direct part in these proceedings.

Lydia Chiu and Lam Chi Ming

124.  Both are still employed by one or more of the family businesses with links with Stephanie Ng and Tony Ng respectively.  The former confirmed that she saw the signatures of the father on the transfer documents.  Her evidence was of no real value.  The latter says that he saw Andrew sign the balance sheet of HEL for the year ended 3 March 2005 which Andrew denies.  That is not relevant to the issues in this trial.

The “Resolutions” dated “3 March 1997”

125.  These documents are crucial.  The one upon which the plaintiff relies as the valid resolution, of which there are two copies with only one variation between them, namely the signature of Andrew Ng, (Pages 17 and 18 in Core Bundle 1), records an allocation or allotment of shares in CAGL, the most significant of which gives the father 25 shares and the mother 23 shares.

126.  The second (page 15/16) on which the defendants rely, changes the allocation significantly.  The father’s drops to 20 but, in stark contrast, the mother’s drops to 10.  The immediate reasonable question is why?

127.  Before that question is answered there is a conflict of evidence between Andrew Ng and Tony Ng which may hold the key to the status of these documents and which I need to resolve.

128.  Andrew Ng says that he first saw the original of p.17/18 in his office on or about 3 March 1997.  He asked for a copy to be made for him, which he retained, and signed the original the next day leaving that in the office with Stephanie.

129.  It was in November 2000 at a meeting of Andrew Ng with his brother Tony Ng that the former had cause to produce the copy he had retained to his brother and on which the  latter drew a large cross and wrote “Incorrect and illegal”.  The context in which this happened is clear enough.  Andrew Ng kept his copy on which he wrote his name.

130.  Tony Ng gave an entirely different version of how the marking came about.  His evidence was that his father produced the copy (of p.17 or 18) for his son’s comments.  The father is alleged to have said that “this is what your mother wants” to which the son says he replied to the effect that it was inconsistent with the formula that he had devised within NSMAL and that the father should adhere to the earlier approach.  Accordingly Tony Ng says that he put a cross on the whole page and wrote boldly “Incorrect and illegal”.

131.  There is no room for compromise between the two versions.  They are as irreconcilable as some members of this family.  I have no doubt whatsoever that Andrew Ng’s version of what occurred is the correct one.  I do not find it credible that Tony Ng would have treated his father in such a peremptory, dismissive and almost impertinent fashion nor do I think that the father, in view of his position in relation to this family, would have tolerated such an action by his son.  On the other hand, in view of the relationship between Tony Ng and his brother Andrew, it is consistent that he should have treated this document in such a high handed fashion.

132.  That of course is far from being the end of the matter.  I need to examine the form and content of the two documents bearing the same date.  I shall refer to P.15 and 16 — the two page document — as the “Official” resolution and the one page document (p.17 or 18) as the “original” resolution simply to distinguish them at this stage.

The “Original” document — p.17 or 18 of Core Bundle 1

133.  The failure to produce the actual “original” document instead of a mere copy had been an obstacle to objective consideration.  It has therefore been impossible to determine whether there was a second page.  It is headed: “First Directors Resolutions of the Corporation passed on 3 March 1997”.  It identifies the five directors who are: Ng Po Sum (father), To Pui Kin (mother), Ng Kwok Tai (Andrew), Ng Kwok Piu (Philip) and Ng Oi Che (Stephanie).  It then goes on to set out the names of the applicants for shares: the five above directors together with Ng Yiu Chi (Eleanor).

134.  Alongside most of those applicants are their signatures.  Father appears to have signed twice on either side of his printed name.  The other signatures are, on the face of the document, of the mother, Stephanie, Philip, and Andrew, whose signature is on p.17 only.  Then the actual allocations are set out.  I repeat them although they are well known by now.

Philip	16
Eleanor	8
Olympia	8
Stephanie	24
Andrew	16
Father	25
Mother	23

135.  It reflected in a general way the father’s regard for or, in more material terms, his estimation of the value of the mother over a lifetime.  It also treated the children on an equal basis, save that Philip, as the eldest son, received the lion’s share.  Both Stephanie and Andrew held shares on trust — Stephanie for Angela and Jeremy and Andrew for Tony.

136.  The form of the document looks like anything but a draft.  It is expressed as a resolution that has been carried out, with shares allotted.  Tony Ng was not a shareholder directly or a director so his name does not appear on the document, so he had no legitimate influence over its existence and his writing on the copy shown to him by Andrew was a presumption to say the least.

The “official” document

137.  The significant reduction in the mother’s allotment of shares, by over 50% stands out clearly.  There is a 20% reduction in the father’s allotment.  It is difficult to believe that the mother having seen and signed the allotment of 23 shares would have agreed to the reduction to 10 shares.  There was likely to be a sharp reaction from her. Stephanie was to say, or at least imply, that she was apprehensive about her mother’s reaction if she was to learn of the secret transfers made by the father in respect of his residual holding in CAGL.  That is of course on the assumption — perhaps an unwise one — that Stephanie was necessarily telling the truth about this.

138.  I think that the father was unlikely to “downgrade” his wife in this regard unless he was put under pressure or was manipulated by one or more of his children at that time — Philip and/or Stephanie and/or Tony.  But I do not believe that he would have willingly reduced her interest on the basis of what Tony or Philip said to him.

139.  I am unable to say that his signatures on the “official” document were forged — though they may have been, and with some skill.

140.  We know from Tony Ng’s “false” marriage certificate that, if he is to be believed, some forger’s skill was available to produce four forged signatures.  If he is not telling the truth about this and he arranged the creation of the document himself, that fabricated document, albeit in photo stated form, nonetheless manifests some real skill in its creation.  The original fabrication, had it been available, would have shed some light on how it had been achieved, an illuminating exercise of which we have, regrettably, been deprived.

141.  Tony Ng’s attitude towards his father when he gave his version of how and when he came to write on the “original” document struck me as overbearing.  Without evidence from the father it is impossible to know with any degree of certainty precisely what happened.  Furthermore without evidence from the mother, it is also impossible to know how she reacted to the great contrast in the allocation of shares in the “original” document against which she had put her signature, with that in the “official” document.

142.  I do not accept that the father told Philip or Tony Ng or Stephanie anything to the effect that the “original” document reflected mother’s calculation.  That I believe has been put forward by them as a contrived explanation for the change in allotment.  They may well have felt that they needed come up with some explanation that it was inconsistent with the father’s formula, and that father went back and changed the allotments of himself and his wife, in particular, in order to hide the fact that somehow their influence or actions had brought about this sudden change.  It may also have been advanced after many years in order additionally to lend credence to other documents purporting to divest the father of his residual shareholding in CAGL.

143.  What caused the father, consciously or unconsciously to change drastically the provision for his wife so as to disadvantage her and fly in the face of all his longstanding commitment, as manifested by the rights accorded to her in NSMAL and HEL, to give her a protected status for her own security and comfort?  I have not been able to answer that and so proper judgment cannot reflect suspicions harboured, however reasonable they may be.

Conclusions

The resolutions of 3 March 1997

144.  Although I have very real concerns about the status of the “original” resolution, I am not in a position to say that the “official” resolution is forged in respect of the father’s signature.  There may have been a second page to the “original” resolution at the earliest stage, along the lines of that attached to the “official” resolution.  There is such an air of unreliability in relation to the mass of documents generated by those members of the family responsible for their initiation and creation that the status of so many of those documents is highly questionable and will remain so for the time being if not permanently.

145.  It is difficult to accept that the father would have gone to the extent of obtaining signatures, of confirmation, approval or acceptance, against the names and allotments on the “original” resolution, only to make fundamental changes in respect of the allotments to himself and his wife after contact with Philip, Tony and Stephanie Ng.  Both Philip and Stephanie Ng had signed that original resolution against their names and opposite their allocation.  The document itself reflects a decision already taken by the directors (who include Philip and Stephanie Ng).  There is nothing on the face of it to suggest it is a draft even though it was typed in a different style from the “official” resolution.

146.  Moreover it is consistent (not inconsistent as Philip’s group has been at pains to advance) with the father’s formula and with the father’s concern to provide generously for his wife and children as reflected in NSMAL and HEL.  Father and mother were joint founders.

147.  Article 1 stated unequivocally that “words importing the masculine gender shall include the feminine gender”.  There was therefore to be no discrimination as between sons and daughters, despite the well-favoured position of the eldest son who in fact was the eldest child.  Had the eldest child been a daughter, then on the same basis, she should have the well favoured one.  That might of course have given rise to a drastic change in the Articles!

148.  Article 44 provided that husband and wife should “be the permanent directors, managers and chairman in all meetings of directors and members of the company”.  Under “Salary and Allowances” were set out the benefits for the surviving permanent manager which included 70% of the previous (i.e. when both were living) joint salary and allowances.

149.  By special resolution at an EGM of HEL, on 18 February 1984 a new article was adopted making husband and wife “permanent directors for life” to be paid “remuneration, quarters, food and living expenses of all types as decided by them either jointly or severally.”

150.  In my view he cannot have intended to deprive his wife of those benefits established over 15 years earlier which, no doubt even then (in 1982) reflected a life-time’s appreciation.

151.  I therefore regard the “official” resolution as aberrant behaviour on his part but which, on the evidence before me, regrettably cannot be explained in such a way as to enable me to find that it is other than the authorized resolution of 3 March.

152.  In respect of the “official” resolution I have to bear in mind that it has a second printed sheet, signed by the directors including mother and Andrew (although that is not conclusive against the “original” version) but I have no evidence to regard it as other than a genuine two-page document, one of the few original documents in this case, and it does bear the imprinted seal of CAGL, although that could have been impressed at any time. Furthermore, it has been acted upon in the course of CAGL’s activities. Accordingly I have to accept, not without some serious reservations, that Core Bundle 1 p.15/16 (Exhibit D5), the “official” resolution as I have termed it, is the valid resolution determining, inter alia, the allocation of shares.

The alleged “transfers” of the 8 May 1997

153.  These documents constitute a wholly different picture.  They are some of the very many pieces of paper of which we have mainly copies and very few originals, which Stephanie Ng said were brought into being in late April or early May before father went to Canada.  That they all bear a date — “8 May 1997” — is clear enough.  When they were actually created is wholly unclear.  They purport to dispose of the father’s remaining 20 shares in CAGL as I have itemized early.

154.  I am not satisfied that the father actually signed them, or if he did sign them, that he actually knew what they purported to be.  His signing of the documents; if he did sign them, was not witnessed. Miss Chiu, an employee of Stephanie Ng’s company, Vercos, said it was a case of her signing that she identified his signature as being identical to other signatures of the father that she had seen.  He was not even in her presence to identify to her that that was, or those were, his signatures.  It was clear from the evidence of both Stephanie Ng and Philip Ng that father, who was in the office on a daily basis, could easily have signed the documents in the presence of a witness, thereby completing legal formalities, if that was what he intended.

155.  According to Stephanie, he told her to keep them in effect on a secret basis.  If that is true, it was not the action of a man who intended the documents to constitute legitimate transactions.  The fact that they were so obviously incomplete meant that a meticulous man like him did not regard them as effective until they were properly completed, witnessed and dated.

156.  The distribution of his 20 shares was entirely inconsistent with his hitherto prevailing sense of fairness and equitable distribution.  There was no justifiable reason for giving Philip almost 50% of the shares.  The father had done nothing to effect a distribution before he died almost five years later.  Nobody else knew anything about this “secret” set of incomplete, defective transfer documents.

157.  CAGL proceeded on the basis that he still held 20 shares.  He stayed on the register as a shareholder to that extent.  In an Agenda for a meeting of CAGL on 12 July 2005, a meeting which never took place, his shareholding featured in a proposed resolution for distribution.  Not until November of 2005 did the documents apparently see the light of day again, 8½ years after date stamped on them.  Then Philip, Tony and Stephanie alone appear eager enough to try and collect the spoils and arrange for their signatures to be countersigned — it is not safe to say witnessed as the solicitor’s clerk has not given evidence to that effect, though it matters not — leaving out the actual date of their signing. 

158.  I do not think for one moment that the father simply forgot these documents.  He was not that type of man.  Assuming that in fact he knew of them he did not intend to put them into effect.  He was content to remain as a shareholder.  Having recovered well from his surgery in Canada, I consider that it is inconceivable that he would have surrendered any control that he could exercise as a shareholder.  Even when his health declined in the final months before his death, he was alert to what he saw as a need to dispose of his interest in Ng Po Sum & Co. and Tony Kwok Tung Ng & Co., assuming those transactions were valid and yet did nothing about the transfer forms, gathering dust in a brown envelope in Stephanie’s desk.

159.  Philip, Stephanie and Tony Ng were quick enough to try and put the cloak of legality on these transfers when they — with Olympia who seems to have been brought under their umbrella in this action perhaps unwittingly — resolved on 23 January 2006 that the “transfers of shares that have been received and entered into the Register of Members at the following date of registration (18 November 2005) be and are hereby approved.”  Two days later — no dates are of course reliable in the context of these corporate activities — there was a resolution purporting to deal with the transfers to the other children, almost as an afterthought.

160.  Those purported transfer documents are null and void.  They do not constitute a settled and completed series of transactions. To hold otherwise would make a travesty of the situation.

161.  The facts of these purported transfers are wholly different from the circumstances in Re Rose [1952] Ch. 499 and Re Paradise Motor Co. Ltd [1968] 1 WLR 1125.  If this purported donor, viz. the father, signed the relevant transfers it is clear from their subsequent history that he had no intention of effecting them.  The fact that they languished in Stephanie’s drawer (according to her) ignored or overlooked, is entirely inconsistent with the actions of a man who organized the companies so as to give effect to his wishes and, as invalid documents, they were incapable of being registered as CAGL subsequently, 8½ years later, attempted to do.  They remained in the father’s ownership until he died, and thereafter should have been dealt with as part of his estate.

The consequences of my findings

162.  The plaintiff has failed to establish the case in relation to the Resolution of 3 March 1997.

163.  However it has established its case in relation to the purported transfers bearing a date 8 May 1997.  Therefore the 20 shares in the name of the father constituted part of his estate on his death in 2002.  Accordingly they vest in the plaintiff as Administratrix of his Estate which was to be distributed on the basis of an intestacy.  The law of the BVI does not differ in these respects from that of Hong Kong.

164.  There will therefore be an order that the 20 shares be registered in the name of the plaintiff as Administratrix of Ng Po Sum deceased.  They will have to be valued as at the date of the deceased’s death.  The plaintiff thus succeeds in her action on this aspect.

Costs

165.  I have concluded that the company CAGL, the 9^th defendant, should bear the costs of the plaintiff’s action.  She has succeeded on a substantial aspect of her claim.  The company, through its servants or agents have resisted her claim, and purported to register invalid transfers thus seeking to defeat her claim.  Mystery surrounds a vast number of documents which have failed to be disclosed.  That is the company’s responsibility.  It has been singularly obstructive in relation to disclosure of existing documents.

General

166.  Although the estimate of the length of this trial was 3-5 days it far exceeded that.  In view of the large number of oral witnesses the estimate was on the optimistic side for which I take some responsibility but the wide ranging cross-examination of the plaintiff’s witnesses, well beyond the issues in this case sometimes verged on the undisciplined.  Moreover the art of cross-examination is not enhanced by self-amusing asides to junior counsel which are disrespectful to a witness and distracting for the other side, and ‘cut no ice’ with any judge.

167.  Given the somewhat lackadaisical and/or obstructive way in which Philip’s group have dealt with disclosure it is possible that some matters may emerge in the future from the woodwork.  One obvious interpretation of this situation is that the offenders have something to hide.  Without doubt there has been a lack of transparency and fairness in this area.  The statutory book ‘episode’ is but one manifestation of it.  I have not sought full detail so as to see the overall extent and nature of the delay in disclosure in this action because there has been enough muddying of the waters and trips down highways and byways, no doubt in the usual quest for credibility or lack of it, and it has been essential to concentrate on the issues confined to this action.

168.  On at least two occasions I took the opportunity to indicate that for family harmony and simple economic considerations, I would strongly encourage the parties to try and reach a compromise.  Counsel for both parties seemed to welcome this and the trial was adjourned twice to enable efforts to be made.  Some optimistic indications were given but when I was eventually alerted to the form or style of negotiations, it was apparent that there was not going to be any meeting of the minds.  That however did not deter counsel for Philip’s “Group” unhelpfully criticising the plaintiff’s Group for the failure to achieve a solution.  The notion of fairness and the import of “without prejudice” discussions seem to have been overlooked.

169.  The defendant’s wide ranging written final submissions extended over 103 pages.  Somewhat surprisingly the last 9 pages were taken up with defence counsel’s criticisms of my interventions by way of preliminary comment on the credibility of some witnesses and clarification of aspects of evidence.  I do not intend to dignify counsel’s comments by any response.  They are more appropriate in the context of grounds of appeal.

170.  It may be that they were advanced with a view to inhibiting my assessment of the evidence of some witnesses, or deterring any adverse comments on the defendant’s case.  If so, these Parthian shafts fell short of their target.  They are not part of an advocate’s proper exercise of his role.