TO PUI KUI, the administratrix of the estate of NG PO SUM, Deceased v. NG KWOK PIU AND OTHERS

FAMV Nos. 10, 50 & 51 of 2015
(Heard together)

FAMV No. 10 of 2015

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 10 OF 2015 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL
FROM CACV NO. 281 OF 2012)

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AND

FAMV No. 50 of 2015

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 50 OF 2015 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL
FROM CACV NO. 281 OF 2012)

_______________________

_______________________

AND

FAMV No. 51 of 2015

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 51 OF 2015 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL
FROM CACV NO. 1 OF 2013)

_______________________

BETWEEN

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REASONS FOR DETERMINATION

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Mr Justice Fok PJ :

1. At the conclusion of the hearing, we dismissed these applications for leave to appeal and indicated we would provide our reasons in due course, which we now do.

Background

2. The applications arose out of litigation between family members following the death of the family patriarch which has given rise to a number of disputes.[1]

3. These particular applications arose out of an action (HCA 523/2008) concerning the validity of two transactions affecting the ownership of a family company, Confederated Assets Group Limited (9^th defendant in the action).  In that action, there were two issues referred to as “the Allotment Issue” and “the Share Transfer Issue”.  The plaintiff, who is the widow and administratrix of the estate of the deceased patriarch (“the mother”) supported by some of her children formed one camp in the litigation.  The 1^st, 4^th, 5^th and 7^th defendants, being her four other children, formed the other camp and were referred to as “the Philip Group”, after the name of the 1^st defendant, who is the eldest son of the family.

4. The judge[2] determined the Allotment Issue against the mother.  That issue turned on which of two competing resolutions was valid.  The judge held that the resolution referred to as “the official resolution”, rather than the other resolution, referred to as “the original resolution”, was not.  However, he determined the Share Transfer Issue in favour of the mother.

5. Both camps appealed.  The Philip Group appealed against the judgment in respect of the Share Transfer Issue in CACV 281/2012.  The mother appealed against the judgment in respect of the Allotment Issue in CACV 1/2013.

6. In a judgment in respect of the two appeals, the Court of Appeal allowed the appeal of the Philip Group and reversed the judge’s decision on the Share Transfer Issue and dismissed the appeal of the mother in respect of the Allotment Issue.[3] In consequence, the result was that the mother was unsuccessful in her claims in the underlying action.

Application for leave to appeal by the 6^th defendant

7. The 6^th defendant in the action, Jeremy Ng Kwok Ching (“Jeremy”), was one of the children in the mother’s camp.  Although the mother did not seek leave to appeal to this Court from the Court of Appeal’s judgment, Jeremy sought leave to do so but, by a judgment dated 29 January 2015, the Court of Appeal dismissed the application.  The Court of Appeal considered that Jeremy did not have locus to seek leave to appeal and considered his application to be an abuse of process.

Notices of Motion in FAMV 10/2015, 50/2015 and 51/2015

8. In FAMV 10/2015, Jeremy renewed his application for leave to appeal. However, because of the Court of Appeal’s view that Jeremy did not have locus, the mother has separately issued two separate notices of motion, FAMV 50/2015 and FAMV 51/2015, in respect of the two appeals, seeking leave to appeal to this Court.  FAMV 50/2015 concerns the Share Transfer Issue and FAMV 51/2015 concerns the Allotment Issue.

Jeremy’s locus to pursue the appeal

9. Before dealing with the merits of the notices of motion, it is first necessary to deal with a procedural complication arising from the fact that, in July 2015, Jeremy was declared bankrupt on the petition of the Philip Group.

10. Jeremy filed a notice to act in person dated 12 February 2016 and wrote to the Court to indicate that he had lodged an application to annul his bankruptcy order and was challenging the claim of the Official Receiver (“the OR”) as his Trustee for fees in the sum of over HK$500,000.  Further correspondence has ensued between Jeremy and the OR.  The OR has now disclaimed the causes of action in CACV 281/2012, CACV 1/2013, FAMV 10/2015, FAMV 50/2015 and FAMV 51/2015 as onerous properties.[4] Prior to the hearing, the Appeal Committee made an order dispensing with the attendance of the OR at this hearing.

11. However, it remains the case that a bankrupt requires the consent of his trustee in bankruptcy to pursue an appeal.  In the present case, the OR does not so consent.  A preliminary question therefore arises as to whether Jeremy should be permitted to act in person in respect of his proposed appeal and whether he should be permitted to be heard on his application for leave to appeal.

12. Whether he should depends on whether he has locus to pursue the intended appeal.  This question was resolved against him in by the Court of Appeal and he challenges that conclusion.  Independently of that conclusion, Jeremy has now been declared bankrupt and so the question of locus because of that status also arises for consideration.

13. For the purposes of the present applications for leave to appeal, we considered it appropriate to proceed de bene esse (i.e. conditionally or provisionally) on the basis that Jeremy has locus to pursue the appeal.

FAMV 51/2015

14. In her skeleton submissions, the mother indicated that she would not pursue the application for leave to appeal in respect of the Allotment Issue, i.e. the application in FAMV 51/2015.  Jeremy adopted the mother’s submissions in his application and made no separate submissions seeking to maintain that application for leave to appeal.  Accordingly, we made an order dismissing that notice of motion.

FAMV 10/2015 and FAMV 50/2015

15. The remaining applications seek leave to appeal to this Court in respect of the Court of Appeal’s judgment on the Share Transfer Issue.  The mother’s application is out of time and she would need an extension of time in order to pursue it. However, since the merits of the underlying application would have a bearing on the decision whether to grant such an extension, it is convenient to proceed directly to a consideration of those merits.

16. The mother, and Jeremy, who adopts her submissions, both contend that the proposed appeal involves a question of law of great general or public importance.  The specific question for which leave is sought (omitting a footnote reference to the pleadings) is:

“[Where] a Plaintiff pleads that a share transfer form that purports to bear the signatures of a deceased ‘were forged and did not belong to the deceased’ (transferor) (but pleads no forgery allegation against any person and no further fact i.e. a negative case), and the Defendant pleads a positive case that the signature is that of the transferor; is it the law that:-

(i) (as held by the Court of Appeal) both the evidential and legal burden rests entirely on the Plaintiff to prove the signatures were forged and did not belong to the deceased (transferor) and the Defendant that pleads the genuineness of the documents bears no burden whether evidential or legal (§§53-54 of the CA Judgment;

OR

(ii)  (as the Applicant submits) is it for the Plaintiff that pleads forgery to adduce evidence sufficiently cogent to raise a case that the document is not genuine (that being a fact finding exercise for the trial judge) and if the Plaintiff does so, the legal and/or evidential burden shifts/is on the Defendant to satisfy the Court that the document is genuine?”

17. This question is a new point raised in this litigation, it being common ground that it was not raised in the courts below.  As such, it would be an exceptional course for the Court to permit this point to be advanced at this late stage.

18. The merits of the point itself are relevant to whether the Court should embark on that exceptional course.

19. We are not persuaded that the question gives rise to a reasonably arguable ground of appeal.  In the judgment refusing leave to appeal at [30], the Court of Appeal analysed the pleadings and concluded that the mother had clearly pleaded that the signatures on the relevant share transfer documents were forged.  The Court of Appeal distinguished probate cases and cases where a party has to prove a relevant document to support its claim and concluded that the present case was a pure and simple challenge by the mother to the share transfers bearing the deceased patriarch’s signatures on the basis of an allegation of forgery.  It is well-settled that the general rule in civil cases is that the burden of proof lies upon the party who substantially asserts the affirmative of the issue.[5] In the circumstances, there is no reasonable basis for contending that the courts below wrongly placed the burden of proof on the mother.

20. In any event, the mother’s formulation of the question accepts that at least an evidential burden is placed on her to prove that the share transfer documents are not genuine.  In this regard, the Court of Appeal considered in detail (at [68]-[79]) the 15 matters relied upon by the mother in support of her case and concluded that they did not provide a reasonable foundation of primary fact on which to draw the inference of forgery.  We were not persuaded that it is reasonably arguable that the Court of Appeal was in error in its analysis.  Accordingly, the question of law posed is academic on the facts of the case.

21. The mother and Jeremy also rely on the “or otherwise” ground.  We were not satisfied that any of the points sought to be raised, raising various challenges to the Court of Appeal’s assessment of the evidence, give rise to a reasonably arguable ground of appeal.  It was, in particular, contended on behalf of the mother that the Court of Appeal was wrong to conclude that the principle in Re Rose [1952] Ch 499 could not be applied.[6] However, this argument was predicated on the footing that it was open to the mother to challenge the validity of the instruments of transfer on grounds other than forgery.  That premise cannot be accepted for the reasons fully articulated by the Court of Appeal (at [51]).

Conclusion

22. For these reasons, we dismissed the notices of motion and ordered that the mother bear the respondents’ costs of the applications.  Ms Teresa Cheng SC, for the respondents, invited us to grant a certificate for two counsel. This was not resisted by Mr Chan Chi Hung SC, for the mother, and so we were content to so order.  However, since the normal rule is that, subject to the reasonableness of the fees paid, the Registrar will allow the costs incurred by a party who has employed two counsel in this Court, this was strictly unnecessary and such costs would be recoverable in any event even without such a certificate.[7]