WONG SHUM v. OVERSEAS TRUST BANK LTD

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

ACTION NO. 1741 of 1985

___________

JUDGMENT

___________

1. The plaintiff brings this action against the defendant Bank claiming commission for the sale of a subsidiary bank under a written agency agreement dated the 25th of October, 1983.

2. By that agreement, he was made the agent of The Overseas Trust Bank in respect of the sale of The Hong Kong Chinese Bank which was the subsidiary to which I referred. The OTB owned some 88 per cent of the shares of The Hong Kong Chinese Bank and the agreement related to a sale to an intended buyer.

3. By the second recital of the agreement, the OTB appointed the plaintiff to negotiate on their behalf the sale of the seller's beneficial shareholdings and rights, if any, incidental thereto in the Bank to such company or person (hereinafter called "the intended buyer") in the proposed terms as detailed in the third schedule hereto or such other terms as may be agreed upon by the seller and the intended buyer.

4. The identity of the intended buyer was not named in the body of the agreement for reasons which will appear, but was disclosed on the defendant's director, Patrick CHANG, signing. The identity of the intended buyer which was disclosed was the Lippo group or its associates.

5. There is some dispute as to exactly what was said but as will appear -- the exact issues as to what was said are not particularly significant.

6. It is common ground between the parties that neither the Lippo group nor anyone connected with them bought immediately or even entered into serious negotiations immediately after this disclosure.

7. It is clear on the evidence that the OTB were trying to sell The Hong Kong Chinese Bank and had been offering that subsidiary for sale for some time before October 1983. At that time because of the well-known political and economic situation in Hong Kong, it was a buyers, market. Patrick CHANG, who was the director mainly involved in trying to dispose of The Hong Kong Chinese Bank, was interested in negotiating with any serious purchaser.

8. It is clear on the evidence that negotiations were continued with a number of potential buyers, and the policy was laid down by Patrick CHANG and carried out by his trusted and able lieutenants, C.F. CHANG and Andrew YEOH, that they could negotiate simultaneously with seriously interested buyers, of course, without disclosing always that negotiations were so carried on simultaneously.

9. After October 1983, the evidence shows that such negotiations were conducted with a number of possible buyers and indeed in one case the case of Hendra Rehardja and the Harapan group, an agreement was signed on the 19th of March of 1984 and a thirty-million-dollar deposit was paid. In fact, the Harapan group got into difficulties about completing the agreement and the defendant exercised its right to determine the agreement and forfeit the deposit.

10. Negotiations with several others continued thereafter. They all came to nothing, save for negotiation eventually with Mochtar Riady who everyone accepts was one of the leading figures, if not the leading figure, in the Lippo group. On the 31st of October of 1984, one year and one week after the agency agreement had been signed, The Hong Kong Chinese Bank was sold to Airfield Limited.

11. The plaintiff's case is that Airfield is part of the Lippo group, that he is entitled to his commission on the sale because the sale was to the intended buyer that he disclosed under the agreement and that the defendant has cut him out from negotiations, first of all, by relieving him from negotiating and, secondly, by keeping negotiations secret and he says that he has fulfilled his part of the bargain by introducing the buyer and that this was the effective cause of the deal which was eventually made.

12. He further says that the proposed sale to that buyer never fell through between the time when the agency agreement was signed and the time when the sale was made to Airfield, the point of that being that by clause 5 of the agreement it was agreed between the plaintiff and the OTB that the agreement should continue in force until the said proposed sale to the intended buyer "is fallen through".

13. It is an undisputed fact between the parties that the plaintiff did not negotiate in any way on behalf of the defendant. As I have said, the plaintiff says that was because of the defendant's wish or his default.

14. On the other hand, the defendant says that the original introduction never came to anything. If a sale was ever contemplated, then it fell through in the course of events, which I will go into in a little more detail, which followed, and that if it didn't fall through as a result of lack of interest by the intended buyer, the Lippo group, then it certainly fell through when Hendra Rehardja put down his deposit or the Harapan group put dorm their deposit and agreed to buy.

15. And further, the defendant says that in any event the plaintiff never fulfilled his part of the bargain because he never negotiated on their behalf as was his duty under the agreement itself.

16. Further, the introduction by the plaintiff was not the effective cause of the deal which eventually came about. The deal, says the defendant, was the result of an entirely different introduction of Mochtar Riady by another director of the OTB who knew him, a Mr. Susanta Lyman, and it was as a result of that later meeting that the deal came about.

17. It is also said by the defendant that the agreement was to introduce a buyer who would buy on the terms met out in the third schedule to the agreement and no such deal was ever made and, perhaps less enthusiastically, the defendant keeps open, as I understand it, the question as to whether the eventual sale was to the intended buyer at all.

18. That is, as it were, a thumb-nail sketch of the case. It is now necessary for me to go into matters in a little more detail and I will deal, first of all, with the events leading up to the 25th of October of 1984, the signing of the agreement.

19. The plaintiff is a graduate of The Hong Kong University. He is now in business on his own account, as I understand it. He has an agency and he is in computers. But in 1983, he was the sales manager for IBM and this put him in touch with many companies in Hong Kong over the years. Although he was still with IBM, he seemed to be putting this knowledge to what he regarded as good use because he regularly negotiated deals as agent.

20. Long before he became the sales manager for IBM, he had known Mr. Peter LO, a solicitor, then a partner in Messrs. CHAN & L0, and through Mr. Peter LO he heard that there was possibly a bank for sale in Hong Kong.

21. Through his work, he knew a Mr. John SUN. Mr. John SUN worked for a French deposit-taking company and had previously been vice-president of the Citibank of America in Hong Kong. Mr. John SUN told the plaintiff that he knew someone who was interested in buying a bank in Hong kong.

22. With those two vital pieces of information, the plaintiff set about putting them together.

23. On the 17th of September, 1983, John SUN introduced the plaintiff to Paul HSIA at a meeting at Stephens Finance in Hong Kong. Mr. Paul HSIA was connected with the Lippo group. That perhaps plays down his real position to which I will refer in due course.

24. Mr. Paul HSIA produced his visiting card and there was some discussion. The plaintiff wanted to know why at this time the Lippo group should be interested in buying a bank in Hong Kong, and Mr. HSIA said something to the effect that his group were not afraid of China and that Mochtar Riady, his boss, was looking for opportunities to do business in China and wanted a bank in Hong Kong.

25. A booklet, that is P1 in the case, was shown to the plaintiff by Mr. Paul HSIA. It was noted that the Lippo group, there was a suggestion there - I think it is at page 6 of P1 - there was a suggestion that the Lippo group were moving into Hong Kong with full banking facility and that the Lippo group were looking for banks. They had bought one in Macau, planning to buy in the US. It describes how Mr. Riady was in association with a gentleman called LIEM Sioe-liong.

26. The plaintiff asked to be appointed agent to look for a Hong Kong bank on commission. Mr. HSIA said he would talk to his boss and they Would meet again the next day. He said that in fact Schroders & Chartered had been engaged or retained to find a bank for them.

27. The next day, the 18th of September, they met again and Mr. HSIA told the plaintiff that he was not, and his boss was not, willing to appoint him as agent and the reasons were given. But Mr. Paul HSIA was prepared to write a letter which he eventually sent to the plaintiff. It is page 30 of the bundle. It is dated the 21st of September. It is a hey document in the case, written by Paul HSIA to the plaintiff and Paul HSIA is described at the top as Senior Adviser to the Chairman and Senior Vice-President of the Lippo Group. It is "re: Bank Acquisition", and without reading the whole letter out, the letter days:

"Dear Mr. WONG,

 

             It is our sincere desire to acquire banks in Hong Kong after acquiring sizable banks in USA and Macau recently. "

28. It goes on to say in the third paragraph:

"This letter is to show our sincerity. Hevertheless, we are not obliged to purchase 'any' bank. We want to buy the 'right' bank at the 'right' price. "

29. At the same time it is clear from a document P5 that Mr. Paul HSIA was approaching Chartered Credit (Hong Kong) Limited, expressing his interest or the group's interest in a bank in Hong Kong and the document repeats some of the information which is in the letter of the 21st of September. It is from Mr. Michael Palin (he didn't give evidence) but the memorandum states this:

"My friend Paul Hsia, senior adviser to Liem Sioe Liong and close confidant of Mochtar Riady, has asked me to looK at the possibility of acquiring a bans in Hong Kong. "

30. And in the fourth paragraph:

"The concept of buying a bank in Hong Kong at this time is that the Indonesian principals feel extremely close to the Mainland Chinese and feel that the current situation may help them price-wise. They are also keen to expand their banking empire. "

31. It is a document which is consistent with the letter written by Paul HSIA and consistent with what the plaintiff said Mr. Paul HSIA told him at that meeting.

32. I haven't any doubt that at that time Mr. Paul HSIA was, as described, a senior adviser to the Chairman. I have no doubt that he held a key position in the Lippo group and I have no doubt whatsoever that the Lippo group were at that time in the market for a bank in Hong Kong. In the face of those documents, indeed I don't believe any other view of the evidence is possible.

33. Now armed with the knowledge that he then had and the letter, the plaintiff set about finding a seller, finding the bank which he had heard might be for sale.

34. He approached Mr. LAM who gave evidence. Mr. LAM is a headmaster and as a result of his calling, he had contact with a lot of influential people. It was through Mr. LAM that Mr. HAR Lui-hon was contacted and Mr. HAR knew at least two managing directors of sizable banks here in Hong Kong. As it later transpired, both those banks were ill-fated. Both banks the court knows about -- one was the Hang Lung and the other was the defendant in this case.

35. It was through those intermediaries that eventually the plaintiff made contact with Mr. Patrick CHANG. There were some hiccoughs on the way, for on the 28th of September of 1983 the Hang Lung Bank collapsed and was acquired by the Government and it was feared at the time by the plaintiff that that was the bank concerned, but he discovered it was not.

36. There were then negotiations through these intermediaries and Mr. WONG, the plaintiff, was explaining that commission had to be paid and the other side were requesting the name of the seller. Eventually the plaintiff managed to get the name of the seller, the OTB selling The Hong Kong Chinese Bank, but he refused to disclose the name of the buyer and he refused to disclose to Patrick CHANG that vital and valuable piece of information through thick and thin.

37. As these talks through intermediaries were continuing, Mr. HSIA paid a further visit to Hong Kong, still expressing interest of his group in a bank but also saying that he thought the price would be somewhat cheaper after the Hang Lung collapse.

38. Eventually there was what was described by one witness as this "technical difficulty". The impasse was reached, Mr. Patrick CHANG saying (apparently) that the payment of commission wouldn't be a problem but he wanted the name of the buyer to decide whether the buyer was capable of buying.

39. Briefly, by the 12th of October a meeting was arranged between Mr. Patrick CHANG and the plaintiff to try to resolve the matter. By this time the plaintiff was taking advice about the sort of agreement which he ought to try to make.

40. At this meeting Mr. Patrick CHANG fell in with the plaintiff's suggestion that an agency agreement should be drawn up and then when the agency agreement was signed, he would release the name of the intended buyer to Mr. Patrick CHANG. If Mr. Patrick CHANG was satisfied with the name then the agreement would become effective; if not, the whole thing would be torn up.

41. At some later date the question of the sale, not of The Hong Kong Chinese Bank but of the OTB itself came up. It is not exactly clear in what circumstances and it doesn't matter. So far as the plaintiff was concerned, I believe he realized that some agreement in relation to the OTB would have to be made if the agreement, the proposed agreement was made in relation to The Hong Kong Chinese Bank, in order to protect his commission.

42. Mr. Joe CHAN, the other partner in the firm of CHAN & LO at that time, was advising Patrick CHANG. Although there has been some reluctance on the part of Patrick CHANG to accept Joe CHAN's position, on the evidence there is not the slightest doubt that either informally or formally Joe CHAN was acting on Patrick CHANG's behalf in this matter and, therefore, in certain respects on behalf of the OTB. 

43. Joe CHAN at this time was also trying to persuade the plaintiff to disclose the buyer, no doubt at the request of Mr. Patrick CHANG, but he was unsuccessful. Eventually on the 22nd of October a meeting was held at Patrick CHANG's flat, Grand Court in happy Valley. This has been described as the "Grand Court meeting" in the course of the case. There were present Joe CHAN, HAR Lui-hon, Patrick CHANG and Mr. LAM and the plaintiff.

44. I needn't go into the details of what was said at that meeting out detailed arrangements were made about the commission, who was to share in the commission and when the, agreements were to be signed. I am satisfied that draft agreements were present at that meeting, but of course the schedules were not filled in.

45. All that was preliminary to the meeting to sign the agreements on the 25th of October and that took place in Patrick CHANG's office. For the purposes of the present action, the Hong Kong Chinese Bank agreement was signed and then the plaintiff and Patrick CHANG were alone. The name of the intended buyer was disclosed and the booklet, or a copy of it, was given by the plaintiff to Patrick CHANG.

46. The intended buyer so disclosed was accepted by Patrick CHANG as being a competent buyer and the agreement became effective.

47. Of course, I say by way of completion that the Overseas Trust Bank agency agreement was also signed and various sub-agreements about commission were either signed then or within a few days.

48. There were two originals of each agreement signed. One was placed in a safe-deposit box at the OTB in the name of HAR and the plaintiff and the other copy, the other original, was given to Joe CHAN for safekeeping on behalf of Patrick CHANG.

49. The schedules to the agreement which had by then been completed had been filled in, I am satisfied, by Joe CHAN that morning and it included the third schedule to the HCB agreement. The third schedule set out the proposed terms of the sale.

50. It is to be noted that under "consideration" the five hundred million Hong Kong is crossed out and it is put in there five hundred and twenty million Hong Kong. That came about as a result of a discussion at the final signing meeting.

51. I am quite satisfied the discussion was on the lines that Patrick CHANG was raising the amount of the commission and well he might have done. It was being said, “Well, there is no problem about the amount in the proposed terms", and so it was that the amount was increased.

52. What is clear - there is no dispute about this; everybody agrees, including Patrick CHANG - is that the amount of five hundred and twenty million for 88 per cent of the issued shares of The Hong Kong Chinese Bank Limited at that time was a quite unrealistic figure.

53. In the course of my description of what happened at those meetings, I have missed out a very important matter and I refer to it now. The important matter was what was said, if anything, about what the plaintiff was to do in fulfilment of the contract, in fulfilment of his agreement to negotiate on behalf of the seller, the OTB; but I will return to that in due course.

54. It is certain that one thing tile plaintiff had to do was to make an introduction and the introduction was to be in the person of Paul HSIA and he was, by appointment which was later made, to introduce Paul HSIA to C.F. CHUNG and Andrew YEOH.

55. In fact, Mr. Paul HSIA arrived or was here in Hong Kong by the 26th of October and there was a meeting between Mr. Paul HSIA and the plaintiff. It seems that Mr. James Riady, Mochtar Riady's son, was present but nothing was said in the presence of Mr. Riady about what was to happen in relation to the purchase of this bank.

56. Criticism is made saying that cannot be correct if the plaintiff's evidence is true. Well, I don't accept that criticism of the plaintiff. I think the plaintiff was far too circumspect to bring matters up, not knowing what exactly was the relationship between James Riady and Paul ASIA. He was a very careful man above all else.

57. At any rate it is clear that on the 27th of October Paul ASIA was taken by appointment to The Overseas Trust Bank and he met C.F. CHUNG and Andrew YEOH. Those were the two who Patrick CHANG appointed, either individually or together, to negotiate not only in respect of this matter but in respect of other proposed sales as well. Andrew YEOH who had worked for many years in The Hong Kong Chinese Bank knew a great deal about it. At all times those two negotiated and acted under very careful supervision and direction of Patrick CHANG.

58. The meeting was very preliminary, but I can say this about it: The plaintiff gave a fairly detailed account of what took place. It is an account I accept. It is a very convincing account because it follows exactly the pattern that one would expect such a meeting to follow. For example, without going into any others, the question one will note was asked by Paul HSIA, which was a vital one at that time, ''Why are you selling?" and an answer was given that the bank already had two subsidiary banks and an explanation of that kind was given. It is probably not the correct explanation but it doesn't matter.

59. After that meeting, it was arranged that if Paul HSIA and, therefore, the Lippo group wanted to take the matter any further, Paul HSIA would revert, would come back to the seller, the OTB. We know that he did not revert and there are issues in the case about these events.

60. The background in relation to any enquiries that might have been made of Paul HSIA or Mochtar Riady by Patrick CHANG is this: Patrick CHANG had some connection with Mochtar Riady already before he and his group were disclosed as the intended buyer, but Patrick CHANG didn't say anything about that. The connection was that Mochtar Riady had known Patrick CHANG's father.

61. But it was Patrick CHANG'S principle in relation to negotiation passed on to Andrew YEOH: (he gave evidence about it) never, when you are the seller, to approach the buyer because it displays a weakness in the negotiating. I haven't any doubt that Patrick CHANG was well-versed in those matters.

62. So when the question arose as to why no one had heard from Paul HSIA, the matter was dealt with through the intermediaries. Patrick CHANG also occasionally asked Andrew YEOH whether there had been any feedback about this and so it was that messages went out. Andrew YEOH gave evidence that these requests, these questions about if there was any feedback went on for some time after about the beginning of November and probably went over into either December or January.

63. So far as the plaintiff was concerned, he telephoned Paul HSIA in the States and a record of calls has been put in. He had some difficulty in getting hold of him but he got hold of him eventually, I am satisfied, on the 5th of November and HSIA said that he hadn't had any chance of discussing matters with his boss, Mochtar Riady, and asked the plaintiff to call later. He did get him again on the 9th of November.

64. There is a dispute as to what happened. The dispute is what was passed on by the plaintiff about that conversation. The plaintiff says that HSIA told him that right noes" his boss, Mochtar Riady, was too busy with newly acquired banks in the US and that after he had settled things in the US, he (Mochtar Riady) would contact the OTB direct.

65. If true, as he reported what was happening, it is somewhat significant because on one view of the evidence that is exactly what happened later. But according to the plaintiff, that message was passed along the line back to Patrick CHANG and Patrick CHANG's response, again along the line, was "Well, there is no point in standing and waiting. Find other buyers on the same terms as in the agreement. " That is the plaintiff's side of matters.

66. According to HAR Lui-hon, the message which was given to him through LAM and the plaintiff was that Lippo had bought in the US and were not buying in Hong Kong and that the deal had fallen through, but that the plaintiff by then had a Japanese buyer. HAR Lui-hon also says that what was said about the deal having fallen through was confirmed by the plaintiff at a somewhat casual social meeting by a remark he made.

67. HAR goes on to say in his evidence that he reported the matter to CHANG, also reported about the Japanese buyer and that the reply from Patrick CHANG was "No, no more please". In other words, he wasn't going to deal with the plaintiff any more.

68. So if the defendant's witnesses are correct, there can be no doubt at all that by about mid-November any question of a deal through Paul HSIA with the Lippo group was absolutely at an end and that no one could have been in any doubt about that.

69. In fact, of course, whatever the resolution of those issues, the OTB was still vigorously looking for buyers and negotiating, as was the practice, simultaneously with buyers who shorted serious intent; and so it is that the next important event is that as a result of negotiations, Hendra Rehardja's group, Harapan, agreed to buy and put down their deposit of thirty million on the 19th of March, 1984 or thereabouts. It does seem from the evidence that by the end of November or the beginning of January 1984 negotiations were under way with Hendra Rehardja leading to that agreement. After that, the next instalment that was to be paid for The Hong Kong Chinese Bank shares fell due on the 23rd of MarCh. By then the Harapan group were in some financial difficulty about meeting the date and on the 26th of March the deposit was forfeited.

70. It is quite clear on the evidence that at the time when the Hendra Rehardja deal was being concluded and was being made and even after the deposit had been paid, that negotiations were not terminated with others because one can find a letter of the 28th of March from Dato Loy, who was another proposed purchaser, to Andrew YEOH which shows that there had been previous negotiations which had reached a fairly - well, they had reached a stage where things were being put down in letters.

71. So it doesn't appear on the evidence that all negotiations were stopped with others because a deposit had been put down.

72. There is a further matter which is marginal but of some significance. On the 9th of April there is a telex. It is from Dato Loy to the OTB, to YEOH, saying that Dato Loy decided not to proceed with the deal and it would appear from that as though negotiations with Dato Loy had fallen through.

73. In fact, it was not the position because the evidence shows that in spite of that telex, negotiation with Dato Loy as an intended buyer had, maybe, gone quiet for a time but on the 20th of September there was still some negotiation with Dato Loy. At that time, of course, there were negotiations going on with Mochtar Riady on behalf of himself or his group.

74. According to Patrick CHANG, in June or July Mochtar Riady paid him a courtesy visit here in Hong Kong. The evidence given by Patrick CHANG and the pleading as to what happened then is not consistent.

75. The courtesy visit, according to Patrick CHANG, led to other visits when Mochtar Riady was here in Hong Kong. For each time he came, he would pay Patrick CHANG a visit, and in circumstances which remain vague on the evidence The Hong Kong Chinese Bank was mentioned. Patrick CHANG says he can't remember exactly who mentioned it, but he says he was very surprised that Mochtar Riady was still interested in Hong Kong banks.

76. He went on to say that Mochter Riady expressed his interest in very explicit terms. He said he had banks in Indonesia and the United States and had a financial company in Hong Kong and wanted a bank in Hong Kong so that he could serve his clients. A remarkably similar account of his interest and the interest of the Lippo group that had been expressed long before in the previous September and October through Paul HSIA and indeed in the documents which are in the case.

77. Negotiations followed resulted in the sale of the shares in The Hong Kong Chinese Bank to Airfield Limited. The sale was at a price which Patrick CHANG would not have thought inappropriate, remembering that 100 per cent of the shares were sold but not the building. The building was, I think, taken out of the sale at book value.

78. Of this matter and the relationship or possible relationship between the final sale to Airfield Limited and the introduction by the plaintiff of the Lippo group, Patrick CHANG said that instinctively he felt the plaintiff had nothing to do with this introduction of Riady (meaning the introduction of Riady which led to the sale), because Susanta Lyman and Mochtar Riady were good friends.

79. In the pleadings it was alleged that Patrick CHANG asked Riady if he would be interested to buy Hong Kong bank shares, but Patrick CHANG said that was not the case; it arose only after Riady had made some suggestions.                 

80. I am going to go back again a little in time to deal with the picture. The plaintiff heard that Hendra Rehardja had placed the deposit and it was his contention that the introduction of Hendra Rehardja had something to do with him, because he had told Enca NG that The Hong Kong Chinese Bank was for sale and Enca's wife and Hendra Rehardja's wife were related. So it was that having heard about the deposit, the plaintiff eventually claimed through solicitors, claiming commission under the agreement.

81. The basis of this claim was that, first, in any event he had been told by Patrick CHANG to find a buyer on the same terms; but if that were not so, then he had done a lot of running around and wanted something for his trouble. He admitted in cross-examination that this claim was a try-on.

82. There are two important things in relation to that claim. First, it is said by the defendant that it is significant, for if the plaintiff is prepared to try on a claim in relation to the Hendra Rehardja matter, how much more would he be prepared to try on this claim with such an enormous amount of money involved. That is one matter that I must consider with care.

83. The second is this, that it led to extraordinary happenings which may be relevant to other parts of the evidence. The extraordinary happenings were these that it is beyond doubt that negotiations were started in relation to this try-on and the negotiations were basically between HAR and the plaintiff.                 

84. It started with a claim for lucky money but ended with an agreement that, according to LIAR, he was going to pay five hundred thousand dollars. The basis of the eventual agreement to pay over five hundred thousand dollars was that there was to be a deed of discharge and release. The discharge and release was to be that the plaintiff was to give up any kind of claim that he might have under the agreement; the agency agreement of the 25th of October of 1983.

85. In fact, that negotiation came to nothing because of two things, as I see it; First, that the plaintiff would only accept any money if it was said to come from Patrick CHANG; and, secondly, he was not prepared to give up any rights he may have had at that time under the agreement of the 25th of October.

86. HAR was inclined to say at one time that this negotiation leading to the offer to pay was entirely his doing. In the light of all we know now and I know in the evidence, that is quite unacceptable. There cannot really be any doubt that somewhere behind that deed of discharge and release lay the hand of Patrick CHANG. And if that is so, the next question which one asks is: Why was he seeking release for the payment of a reasonably formidable sum at that time?

87. The time when this negotiation was taking place can be identified because the negotiations are referred to in a letter dated the 23rd of July of 1984. It is page 381 in the bundle. A letter written on the plaintiff's behalf to CHAN & LO representing the OTB/Patrick CHANG in which it is said on the plaintiff's behalf:

"Since writing to you on the 2nd July 1984, your client has through its representative contacted our client with certain proposals which our client is still considering with the other interested persons. "

And that relates to that negotiation that was going on. That was at a time, on Patrick CHANG's evidence, after Hochtar Riady was in touch with him again or was in touch with him.

88. Now I am going to digress slightly to say very briefly what view I take in general of some of the witnesses. I will refer to them again in certain contexts.

89. The plaintiff -- I find the plaintiff to be a careful witness. I think he is basically a reliable witness. I bear in mind the criticism that has been made of him that he appears to be rehearsed. I have no doubt that he has thought very carefully about his evidence. But having borne in, mind and considered that significant criticism of him, it is quite clear from what he said that his evidence holds together, it is consistent. When he is describing events, he is describing events which are significantly likely.

90. I think Mr. LAM, although he sometimes allowed his enthusiasm to get the better of him; I think also is basically reliable.

91. I regret to say that I cannot say the same about HAR Lui-hon or Patrick CHANG. I think HAR Lui-hon is not a significantly reliable witness. I think he was attimes not telling the truth, in particular, about the negotiations which he was undertaking in respect of the lucky money and the Hendra Renardja commission.

92. Patrick CHANG was prepared to lie if he felt that it would assist him. He told a significant lie, as one example, about the letter which is 29A in the bundle. That was the letter which Joe CHAN, with considerable frankness, said was written on Patrick CHANG's instructions to pretend that he had an interested purchaser. Patrick CHANG certainly would know exactly what that letter was about and he gave evidence which, I am quite satisfied, he was lying.

93. So far as the written evidence is concerned, some of what Paul HSIA said and Mochtar Riady -- so far as Paul HSIA is concerned, he is absolutely discredited over his description of the meeting with C.F. CHUNG and Andrew YEOH.

94. I heed say little more about Andrew YEOH, save to say that I thought he was an impressive witness and certainly I accept what he said about the meeting. It doesn't fit in at all with what Paul HSIA said in the statement about it. For some reason Paul HSIA, I am satisfied, was under pressure from Mochtar Riady.

95. So far as Mochtar Riady is concerned, he gave careful answers to careful questions. Inevitably (it always happens when this is done) the questions that were asked were not always the particular and relevant questions that the court would have asked itself or which counsel would have asked had he been giving evidence here.

96. It is quite clear to me that he could have been called by the defendant if the defendant had required him to be called. He is after all very closely connected with a bank here in Hong Kong.

97. I mention that really to exclude it because it is not a matter that I take against him or against the defendant. It is my task simply to': deal with the evidence that I have in front of me. If the evidence in front of me lacks cogency or is irrelevant, then there it is. The fact that he is not here and I take the view that he could have been is not a matter I take into account against the defendant. Of course, I must remind myself there always may be a very good reason why a witness is not called.

98. I then turn again to the plaintiff because, in considering his evidence, I haven't omitted the fact for my consideration that he was on his account quite prepared to do down., by way of the amount of commission that he was going to hand over, John SUN who was perhaps his most important contact in the whole case.

99. Let me turn now to deal with some of the -- indeed I dope all--the important issues in the case, first of all, the agreement itself.

100. In so far as the defendant continues to say that the agreement is limited in its effect to a sale on the proposed terms in the third schedule so that as the sale which was eventually made was not in accordance with those terms and, therefore, the plaintiff cannot succeed, then I reject that out of hand.

101. It is self-evident from the agreement itself that that was not its effect. One only has to look at the second recital and the cords. It should read:

"... in the proposed terms as detailed in the third schedule hereto or such other terns as may be agreed upon by the seller and the intended buyer. ”

I don't propose to say anything further about that particular issue.

102. I turn now to a more important matter, because the agreement was to negotiate on behalf of the seller. Mat was the plaintiff's part of the agreement. He was appointed to negotiate and whereas as I have said already, it is common ground that the plaintiff did no negotiating on behalf of the OTB, the defendant, at all.

103. It is important to remember that these were terms drawn up by the plaintiff and agreed to by Patrick CHANG in return for the disclosing of the intended buyer.

104. Having heard the whole of the evidence in the case, I am quite satisfied that what Patrick CHANG was interested in was in the name of the intended buyer.

105. The Hong kong Chinese Lank was on the market. Patrick CHANG was certainly experienced enough to negotiate any sale, either by himself or through his team. If it had been suggested to him that the plaintiff was going to negotiate on his behalf for the sale of The Hong Kong Chinese Bank with the Lippo group, I haven't any doubt in my mind as to what Patrick CHANG would have said.

106. And the question arises: Was anything said about who was to negotiate? It is certain in my view that something must have been said about it. The matter couldn't simply be left, as it were, in the air. The agreement is signed -- agreement to negotiate. What is one to expect of the parties who are there?

107. The plaintiff says, in effect, "I asked, "Now what do you want me to do now?" Patrick CHANG says nothing like that was said at all.

108. Well, common sense dictates, to me at any rate, that that question must have been asked. The result is that I am driven to accept the plaintiff's evidence that he did ask at that meeting, "Well, what do you want me to do now?"

109. I am satisfied that Patrick CHANG wanted the introduction and I am satisfied that he certainly did not want anything more. Indeed it would have been very much against Patrick CHANG's own interest to have the plaintiff negotiate on his own behalf with the plaintiff's inexperience and inexpertise in banking.

110. So I am satisfied on the facts that all Patrick CHANG wanted was for Paul HSIA to be introduced, and I am quite satisfied that the plaintiff wag released from doing any negotiation by Patrick CHANG at that first meeting.

111. At the meeting of the 22nd, the Grand Court meeting, LAM says. that he also asked a similar question. It is very likely, in my view, that this sort of question would be asked: We are going to earn commission and what do you want us to do for it?

112. However, I don't think it matters greatly as to what happened at that meeting so far as LAM was concerned. It is, I think, a very important finding on my part as to what happened at the signing of the agreement.

113. However, there is a further dimension to this. Patrick CHANG says that he wanted the agreement to be locked up in the safe-deposit box because of confidentiality so that it would not get about that the bank was for sale because of its possible effect on the OTB, and I certainly accent that that was a reason why he wanted confidentiality.

114. However, I am also satisfied that it went further than that. I am satisfied that Patrick CHANG was determined that it would not be voiced about that he had made this deal with the plaintiff. I am quite sure that he regarded the plaintiff in relation to this particular contract as having got the better of him.

115. He was very anxious for some reason only known to himself, but it is clear he was very anxious to find an appropriate buyer for The Hong Kong Chinese Bank. An investigation into the affairs of the OTB may reveal why, but I don't know.

116. He felt that the plaintiff had put him at a disadvantage because he was under that pressure and he had had to make this agreement for this enormous amount of commission. He didn't want anyone to know about that other than those who had to know. He regarded the plaintiff as an upstart and as an adventurer.

117. In support of my view is the fact that he didn't even tell his trusted confidant, Andrew YEOH, about this agreement when it was made. I think it may well be that he took the view that the agreement made was not in the best interests of The Overseas Trust Bank.

118. Returning now to the question of negotiating, as I say, that was another reason why he didn't want the plaintiff to negotiate on behalf of the OTB because the question would be asked: Why on earth is the sales manager for IBM negotiating on behalf of The Overseas Trust Bank? And I suppose Patrick CHANG had visions of those in the Lippo group holding their sides with laughter at the idea.

119. There were no negotiations to begin with. The plaintiff did all he was asked to do which was to introduce HSIA. Later on when negotiations began in earnest in the period something between July and September of 1984, he was never told of the negotiations at all. Assuming for a moment that the sale had not fallen through, then he was in effect cut out of the negotiations.

120. Now so far as this part of the case is concerned, I am quite satisfied that the plaintiff was initially released from negotiating and later there gas never any question of him negotiating. So far as the agreement was concerned, he was cut out.

121. So whether one looks at the case as a release, which relates to the first part, or as to the breach of the implied term which is relied upon by Mr. Swaine, or an estoppel by convention, one achieves the same answer, that the plaintiff is not to be deprived of success in this case on the contract simply on the basis that he did not negotiate.

122. I am comforted as well by the fact that this view of the contract and what Patrick CHANG did, gives the agreement commercial efficacy and also accords with common sense. If the plaintiff is told in effect not to negotiate and then later is not told about negotiations, how can that defeat his claim of itself?

123. The second matter I have dealt with is this: Was the intended buyer the Lippo group in the market at the time when the introduction was made? I have given my reasons. I am satisfied that the Lippo group was in the market at the time for a bank. I am quite satisfied actually that the Lippo group remained in the market for a bank from the time of the introduction until the time when the bank was bought.

124. In relation to the question whether the bank was in the market as a ready, willing and able purchaser at the time of the introduction, first, Paul HSIA's letter is significant. His authority is challenged in some of the evidence, but the basis of the challenge is whether he had the power to negotiate without consulting others. Well, of course, he didn't have that; but had he the authority to make the approaches that he made; I haven't the slightest doubt that he had.

125. That is supported by what appears in P5; his approach to Chartered Credit (Hong Kong) Limited also on behalf of the same group and being an adviser to Liam Sioe Liong and a close confidant of Mochtar Riady as he is described. He was at that time, I doubt whether he still is now.

126. Also I accept the account of the meeting given by the plaintiff; his account of the meeting at Stephens Finance with HSIA.

127. The next question is: Did the intended buyer eventually buy? Patrick CHANG and the plaintiff differ slightly, I think, in recollection as to what was actually said about the intended buyer.

128. The plaintiff says that he dealt with the matter rather elaborately, whereas Patrick CHANG simply says that the Lippo group or its associates were mentioned and that Mochtar Riady was understood to be the person behind it and that the magazine was produced with the names of the Lippo group.

129. On a balance of probability, I think the plaintiff is more likely to be right than Patrick CHANG in his recollection of this matter. The reason for me thinking that is that the plaintiff had been very concerned to try and make a contract with Patrick CHANG which would stick. He appreciated the difficulties of making this type of contract and the relative ease with which his claim to commission could be defeated by, for example, the sale of OTB, or a sale to some other party not directly connected with the intended buyer. And I on balance accept that the plaintiff would deal with this -- the intended buyer -- in as much detail as he was able at the time.

130. In the result, Airfield was the company who bought. Mochtar Riardy was the one who was buying. That is clear from Patrick CHANG's evidence. He said initially to Patrick CHAUG that he was interested in the Hong Kong Chinese Bank at the right price and so it was that he negotiated, and the Hong Kong Chinese bank is now part of the Lippo Group. I find without hesitation that the plaintiff's disclosure was wide enough to cover this eventual purchaser.

131. But the real question in the case is at the time when the Lippo Group bought, was the agreement of 25th October 1985 still in force?

132. The defendant says that long before it had fallen through and that the original disclosure and introduction was not an effective cause of the eventual sale.

133. A number of considerations in the case really come together because once one has decided (as I have) that the introduction was of an intended buyer who was in the market at the time, who was a ready and willing buyer; there has never been any question that this buyer was an able one; there was never any question that after the initial meeting between HSIA, CHUNG and YEOH, that HSIA never reverted.

134. Then comes the question whether the plaintiff said that the sale had 'fallen through', through the intermediaries after the phone call and whether he said to HAR that the matter had 'fallen through'. And if it hadn't 'fallen through' by then, whether he said at the time of the Hendra Rahardja deposit that it had come to an end; and whether in any event the payment of that deposit and the agreement made by the Harapan Group as a matter of law put an end to the agreement so that it had fallen through; and then whether the negotiation which took place with Mochtar Riardy had anything to do with the original introduction or whether it came quite separately through Susanta Lyman.

135. The telephone call between Paul HSIA and the plaintiff on 9th November.

136. Having considered the whole of the evidence, I am satisfied on the balance of probability that the plaintiff's account of what HSIA said is accurate. I am quite satisfied that he was told at that time, not the whole thing was off, but that they were busy with the bank in the United States. And I am quite satisfied that the plaintiff never said, therefore, that the matter had fallen through.

137. I am quite satisfied, in fact, that the Lippo Group's interest in a bank in Hong Kong was maintained during that time. Indeed, any decision to the contrary would seem to me to fly in the face of reality because here they are in October, 1983, through Paul HSIA, making very detailed investigations in Hong Kong or enquiries in Hong Kong. They are, at the same time, purchasing a bank in the States. They are expressing in the literature their interest in Hong Kong and later when Patrick CHANG describes his meeting with Paul HSIA, Paul HSIA expresses the very interest that was the very type of interest that was being expressed earlier by - did I say HEIA? I meant Riardy - when Patrick CHANG met Riardy in about - June, July, August of 1984, he was expressing the same type of interest that had been expressed by HSIA to the plaintiff so long before.

138. I am supported in my view as to that phone call by YEOH's evidence that CHANG was asking for feedback about the Lippo Group long after that phone call had taken place.

139. I am further fortified in my view by this not at any time was there a contemporaneous document or letter from Patrick CHANG saying in effect "What is your claim all about? You have been saying long ago that this whole deal fell through. " Now if that had been Patrick CHANG's view of this matter, I am quite sure that it would have been somewhere in the correspondence, whereas in fact, it is nowhere.

140. It is not even said in answer to the plaintiff's letter of 23rd July, 1984 when he was affirming his rights under the agreement; his rights in relation to the Lippo Group.

141. And I -- in forming that view, I have borne in mind what has been said about any reply to that particular letter.

142. The further matter which assists me in coming to the conclusion that the plaintiff had not said that the deal had fallen through because of any phone call with HSIA was the negotiations which I have mentioned and the proposed payment of $500,000 in respect of commission so-called after the Hendra Rahardja deal. If it had been thought at that time that the agreement had come to as end and that the plaintiff had said so, what was the point of negotiating for that sum of money and trying to persuade the plaintiff to sign a deed of release which let him out of the agreement of 25th October, 1983?

143. So I am satisfied that the plaintiff did not say the deal had fallen through and I am satisfied for the same reasons that he was not -- he didn't say at any time to HAR on any social occasion words to the same effect.

144. There is one further reason, but it is a minor one. Joe CHAN throughout this time had been advising Patrick CHANG and he released the agreements back to Patrick CHANG, and he released them back after Hendra Rahardja had paid his deposit, not, it is to be noted, at any time earlier when it is suggested that the plaintiff was saying that the deal had fallen through. So it was not, I believe, Joe CHAN's view either, that anyone was saying the deal had fallen through earlier.

145. Let me turn now to the question whether the agreement made with Hendra Rahardja on -- probably the Harapan Group will be a better way of putting it -- on 19th March and the deposit being paid put an end once and for all to the plaintiff's agreement.

146. It is put by the defendants as a matter of law. It is said that if an agreement for the sale had been made, then that is an end to the matter because there was nothing which could be sold to the intended buyer.

147. Now if the sale had been completed, then the Overseas Trust Bank would never have been able to sell again and I think that in those circumstances I would have been driven to say that that put an end to the agency agreement in respect of the intended buyer.

148. But that was not the position. The deposit had been put down and the question was whether the sale was going to be completed or not.

149. Potential buyers do not have to lose interest altogether because an agreement has been signed which has certain conditions or because a deposit has been put down.

150. There is many a slip -- as anyone who has practised in these courts for any length of time is only too well awere, there is many a slip between cup and lip in these matters, and it was not the situation that the OTB had been put in the position of not being able ever to sell those shares to anyone else. Indeed; events showed that.

151. And if I am right about the dates of the negotiations with Dato Loy it is certain that the OTB didn't tape the view that they had to stop negotiating with others because the deposit had been paid and that there had been a signature on 19th March; either.

152. In fact, as we know, that agreement with Hendra Rahasdja was brought to an end (as he had the right under the agreement) by Patrick CHANG and he forfeited the $30 million and pocketed it for the OTB as indeed it was his right under the agreement.

153. If the agreement with the plaintiff Was alive at the time when the deposit was paid by Hendra Rahaxdja, then as a matter of law, I do not think the agreement with Hendra Rahardja killed it off. It's probably put it into intensive care, however. But it did survive.

154. Now if the agreement survived the Hendra Rahardja deposit, what happened thereafter? The meeting which came about between Patrick CHANG and Mochtar Riardy, and the fact that the question of the sale of the Hong Kong Chinese Bank arose between them; first, having accepted the Plaintiff as to what was said by HSIA in that phone call of 9th November, 1983 when HSIA said to him that when the time came, they would contact OTB direct, is exactly consistent with what did later happen because on Patrick CHANG's evidence, along came Mochtar Riardy paying the courtesy visit.

155. It is not clear on the evidence how the matter of the Hong Kong Chinese Bank arose. But what I cannot accept is that the plaintiffs position was out of Patrick CHANG's mind. Indeed it is clear that it was in his mind because he was eventually seeking advice about what his position was, and instead of dealing with the matter after the letter when the plaintiff says, "Look, I am still claiming my rights under the agreement. he left the matter open. And why was he doing that?

156. I think the only reason was that he knew that the renewed negotiations with Mochtar Riardy had come about because of his knowledge through the plaintiff that Mochtar Riardy was in the market. Of course, Patrick CHANG would approach, and did approach, the question with great circumspection because it was his view that if the seller approaches the buyer, it puts the seller at a disadvantage in negotiations. So how the matter came about is not entirely clear, and I bear in mind what was said in the pleadings. However, pleadings are not evidence in the case.

157. In those circumstances, what was the effective cause of this sale which was eventually reached? After, I confess, some hesitation, as I have jumped hurdle after hurdle and felt obliged to do so in this case. I am satisfied on the balance of probability that the effective cause of the sale which was eventually made was indeed the plaintiff's disclosure of the intended buyer.

158. In the result; therefore, I am satisfied that the agency agreement did not require for its effictcy a sale in the terms of the third schedule. I am satisfied that the plaintiff was relieved by Patrick CHANG from negotiating and I would just add in relation to that that having regard to the amount of money that was involved, if there was any hint that the plaintiff had to do the negotiating, he wouldn't have been hanging back.

159. I am satisfied that the Lippo Group at the time when their name was disclosed by the plaintiff was in the market. I am satisfied that after the initial meeting with CHUNG, YEOH and HSIA that in respect of acquisitions in the States, those who were the top of the Lippo Group would be involved in acquisitions of this kind and were extremely busy and were - had not time at that moment to pursue the initial introduction, and I am satisfied that they said so.

160. I am satisfied that Patrick CHANG told the plaintiff to find other buyers on the same terms in the meantime. I am satisfied that Hendra - the Hendra Rahardja deal did not cause the sale to fall through, and I am satisfied that the plaintiff never said to anyone that the sale had fallen through as a result of his contact with HSIA in the States.

161. I am also satisfied that Patrick CHANG never regarded the agreement as having come to an end in the sense that it had fallen through, and that is why he tried to put an end to it through HAR by the offer of the $500,000.

162. I am satisfied that the agreement nearly came to an and through the effluxion of time end the deposit paid by Hendra Rahardja but it never quite did.

163. And finally, I am satisfied that the effective cause of the eventual sale was the plaintiff's introduction.

164. Before I leave the matter, I'd just like to say one or two other things.

165. Patrick CHANG in making this agreement I very much doubt was acting in the best interest of the OTB. It was a ridiculously high rate of commission, and for reasons, as I have said, best known to himself, he wanted and was anxious to find a buyer for the Hong Kong Chinese Bank. And he didn't want that to be put around.

166. I think he thought, perhaps rightly, that it reflected very badly upon him personally and also he felt that he had been put and taken at a disadvantage by the plaintiff. And I believe that he was determined in those circumstances hot to pay commission if he could avoid it. He regarded the plaintiff as an opportunist and an adventurer.

167. He knew that the agreement was not at an end. Otherwise, he would have said so in the course of the negotiations that went on. And he tried to get out of it by the payment of that $500,000 through HAR, but I am afraid that on that occasion as well, the plaintiff got the better of him.

168. I believe that it is likely that Mochtar Riardy as a result of his association with the CHANG family also came to regard the plaintiff as an upstart adventurer who had taken advantage of CHANG, and that may well be the answer as to why he takes the view that he does and why he has put some pressure on Paul HSIA, and I have in mind what was said in the phone conversation.

169. So far as the plaintiff is concerned, I think he is an opportunist. I think, he is not too scrupulous in what he does and how he deals with those who assist him. I think he is extremely intelligent and he takes advantage when he can of his contacts.

170. However, having said all that, he has satisfied me in this case that what he has said is accurate and he is entitled to judgment.

171. I should say this, that there is also a counter-claim in this case, although very little has been said about it during the course of the case. But having mentioned it 'just at the end, the plaintiff succeeds and the counter-claim is dismissed.

MR. SWAINE: With costs, my Lord.