WONG SEE LUNG v. HUANG HUA JIANG AND OTHERS

CACV 194/2014 & CACV 196/2014
(Heard Together)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 194 OF 2014

(ON APPEAL FROM HCA 2067 OF 2009)

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AND

CIVIL APPEAL NO 196 OF 2014

(ON APPEAL FROM HCA 2067 OF 2009)

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REASONS FOR JUDGMENT

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Hon Barma JA (giving the Reasons for Judgment of the Court):

1.  These were appeals by the 2^nd, 3^rd and 4^th defendants against a judgment of Mr Recorder Pow SC dated 1 September 2014, by which he found in favour of the plaintiff in respect of claims made against those defendants (the plaintiff’s claim against the 1^st defendant having earlier been the subject of a default judgment in the plaintiff’s favour, for damages to be assessed). CACV 194 of 2014 was the appeal of the 3^rd and 4^th defendants, while CACV 196 of 2014 was the appeal of the 2^nd defendant. Separate appeals were brought because these defendants had different legal representation at the trial, and at the time when they lodged their appeals. However, by the time of the hearing before us (and of an earlier hearing of an unsuccessful application for leave to adduce fresh evidence), all three defendants were represented by the same solicitors and counsel (none of whom had acted for them below).

2.  At the conclusion of the hearing, we dismissed the appeals with costs to the plaintiff.  These are our reasons for doing so.

The background to the proceedings

3.  The background to the proceedings is somewhat convoluted, but is set out in some detail by the Recorder in his judgment, at paragraphs 1 to 37.  For present purposes, it can be summarised as follows.

4.  The plaintiff, who was educated to primary three level in the Mainland, owned a flat in Kowloon (“the property”), in which he and his family resided.  In late 2006, he and the 1^st defendant became, through their respective shareholdings in the 2^nd defendant, co-investors in a property development project in Wuzhou in Guangxi province.

5.  In about December 2006, the plaintiff told the 1^st defendant that he wanted to sell the property.  Following negotiations, they agreed on a sale to the 1^st defendant at a price of HK$22 million.  However, the 1^st defendant said that his financial position was somewhat difficult, and that he was already indebted to the 3^rd defendant (the main shareholder of the 4^th defendant, a registered moneylender) for about HK$12 million.  He asked the plaintiff to transfer the property to the 2^nd defendant first (in advance of the proposed sale) to enable funds to be raised on the security of the property, so as to enable the 1^st defendant to repay his debt to the 3^rd defendant.  He would later proceed with the purchase of the property once his financial position improved.  Until that happened, the plaintiff and his family could continue to live in the property.

6.  On 22 December, the plaintiff and the 1^st defendant entered into a written agreement concerning this proposal.  The agreement was in Chinese, and was handwritten. Its terms are of central importance to this action.  They were (translated into English) as follows:

(1)  [The plaintiff] agrees to sell the property for a consideration of HK$22 million.  All incidental expenses shall be borne by [the 1^st defendant].  The property shall be transferred to [the 2^nd defendant].

(2)  [The 1^st defendant] pays deposit in the sum of HK$12 million within 15 days, balance to be settled within 3 months.

(3)  Before the purchase price of the property is paid off, [the plaintiff] continues to use the property and needs not give vacant possession.

(4)  Given the comparatively special nature of this transaction, [the 1^st defendant] agrees to use equivalent asset as the security.

(5)  [The plaintiff] signs all documents at lawyers’ firm.  [The 1^st defendant] on that day owed [the plaintiff] HK$22 million to be set off after payment.

(6)  This agreement is the final agreement [between the parties].  All other agreements made between the parties are used externally in order to tie in with this transaction.

7.  So much was common ground between the parties.  From this point, however, their cases diverged significantly.

The plaintiff’s case

8.  According to the plaintiff, he went to the office of the 4^th defendant a few days after 22 December 2006, where he met the 1^st and 3^rd defendants, and was asked to sign a pile of documents.  The documents were in English, and he thus did not understand them.  He claimed to have been misled into signing them by misrepresentations made by the 1^st and 3^rd defendants, and that all four defendants were involved in a fraud perpetrated upon him.

9.  The plaintiff said that when signing the documents as requested, he noticed a figure of HK$100,000 and asked what this referred to.  When the 3^rd defendant told him it was in relation to a deposit, the plaintiff pointed out that he had not received any, but he was told by the 3^rd defendant that this was just a formality.  Believing that he was just signing some documentation relating to a preliminary agreement and receipt of a first deposit, the plaintiff signed all the documents he was asked to.  However, unknown to him, the documents included a formal sale and purchase agreement relating to the property under which he would have to deliver vacant possession (there were in fact two originals of this, both of which the plaintiff signed), an assignment of the property acknowledging receipt of full payment (again, two originals were signed by the plaintiff), two receipts acknowledging receipt of the balance of the purchase price, an authorisation letter to the Bank of China seeking to redeem the then existing mortgage taken out by the plaintiff over the property, resolutions of the 2^nd defendants’ board of directors resolving to purchase the property and to obtain a loan from the 4^th defendant, the proceeds of which were to be paid to the 1^st defendant.

10.  The plaintiff says that the documents he was asked to sign were never explained to him, and that he never instructed or met solicitors in connection with this transaction.  Notwithstanding this, the sale & purchase agreement prepared by Tung, Ng, Tse & Heung (“TNTH”), a firm of solicitors, apparently acting for the plaintiff, and dated 22 December 2006, was signed in two places by the plaintiff (by way of execution and acknowledgment of receipt of a deposit), and signed in two places by a Mr Yau Chap Yin, a solicitor at TNTH, to attest to the fact that the document had been executed by the plaintiff in Mr Yau’s presence, and that Mr Yau had duly interpreted the document to the plaintiff.  Additionally, the assignment, dated 3 January 2007, having been prepared by Quan & Co as solicitors for the purchaser (stated to be the 2^nd defendant), was signed by the plaintiff as vendor, and also had two signatures of Mr Yau, attesting to the plaintiff’s execution of the document in his presence and to the fact that Mr Yau had duly interpreted it to the plaintiff.  As noted above, two copies of each of these documents were signed by the plaintiff – however, only one copy of each was attested by Mr Yau.  The letter of authorisation relating to the redemption of mortgage and the two acknowledgments of receipt also referred to TNTH in a manner suggesting that the firm was acting for the plaintiff in respect of the sale of the property.

The defendants’ position

11.  The defendants’ position was very different, and was principally advanced by the 3^rd and 4^th defendants (the 1^st defendant took no part in the proceedings, and had default judgment entered against him, while the 2^nd defendant did not call any witnesses and basically contended that any misrepresentation by the 1^st defendant could not be attributed to it).

12.  The 3^rd defendant, who gave evidence at the trial, claimed that he was introduced to the 1^st defendant in mid-December 2006, as someone who wished to obtain a loan from the 4^th defendant against the security of property in Hong Kong.  Thereafter, an initial meeting between the plaintiff, the 1^st defendant and the 3^rd defendant, to discuss the details of a possible loan, took place at the 4^th defendant’s offices on 20 December 2006, following which a facility letter from the 4^th defendant, offering a loan to the 2^nd defendant of the amount discussed, was issued the same day.  Two days later, on 22 December 2006, a further meeting between the plaintiff, 1^st defendant and 3^rd defendant took place at the offices of the 4^th defendant, at which the board resolutions of the 2^nd defendant mentioned in paragraph 9 above, along with a memorandum under the Money Lenders Ordinance, were executed.  The 3^rd defendant said that these were the only documents executed in meetings with him, and claimed that the plaintiff and 1^st defendant had said, on 22 December 2006, that they had already executed a sale & purchase agreement relating to the property at TNTH.

13.  There was thus a clear divergence between the parties’ cases as to the circumstances in which the documents, in particular the sale & purchase agreement and the assignment, were executed.  The plaintiff said that they were all executed in one go, some days after 22 December 2006, at the offices of the 4^th defendant, with only the plaintiff and the 1^st and 3^rd defendants (who misled the plaintiff into signing them) present.  On the other hand, the 3^rd and 4^th defendants’ position was that the sale & purchase agreement, assignment and two acknowledgments of receipt were signed at TNTH’s offices, with the sale and purchase agreement and assignment having been signed separately, on 22 December 2006 and 3 January 2007 respectively, on each occasion in the presence of Mr Yau, who witnessed the plaintiff’s signature, and had interpreted the documents to the plaintiff, who could accordingly be under no misapprehension as to their nature and effect.

Subsequent events

14.  The effect of these documents was that, as of 3^rd January 2007, the 2^nd defendant became the owner of the property, and became entitled to possession of it.  The 2^nd defendant granted a Legal Charge to the 4^th defendant to secure loans totalling HK$12 million made to it by the 4^th defendant, which had been disbursed in five tranches between 22 December 2006 and 20 January 2007.

15.  Notwithstanding the execution of the various documents (including the assignment), and whatever the actual circumstances of their execution, the plaintiff and his family continued to reside in the property.  The plaintiff says that, from time to time, he asked the 1^st defendant why completion was still (as the plaintiff saw it) not taking place, and was told that the 1^st defendant’s financial position had not improved sufficiently to enable him to do this.  The 1^st defendant gave three post-dated cheques to the plaintiff during 2007, but because he continued to insist that his financial position had not improved, the plaintiff never sought to present these for payment.

16.  However, as noted above, following the execution of the assignment dated 3 January 2007, the 2^nd defendant on the same day charged the property to the 4^th defendant by the legal charge referred to above, and entered into a second mortgage in favour of the 4^th defendant dated 26 March 2007 to secure a further loan of HK$2 million.  On 10 July 2007, the legal charge and second mortgage were discharged and replaced by a first legal charge in favour of Chong Hing Bank Limited, to secure a mortgage loan by that bank to the 2^nd defendant of HK$12 million, which was used to repay in part the 2^nd defendant’s indebtedness to the 4^th defendant.  The outstanding balance of such indebtedness was restructured as a new loan, secured by a new second mortgage over the property, also dated 10 July 2007.

17.  On 25 July 2007, additional shares in the 2^nd defendant were allotted to the 3^rd defendant and a Mr Teng Kui Ming – the result of the allotment was that the plaintiff and the 1^st defendant, who had previously owned 70% and 30% of the shares in the 2^nd defendant, had their interests diluted to 28% and 12% respectively, with the 3^rd defendant and Mr Teng each holding 30% of the enlarged share capital of the 2^nd defendant.

18.  In 2008, the 1^st defendant was charged in the Mainland with criminal offences relating to fraud.  He ceased to be a director of the 2^nd defendant, leaving the 3^rd defendant as the sole director.  He and Mr Teng also transferred their shareholdings in the 2^nd defendant to the 3^rd defendant, who thereafter held 88% of the shares in the 2^nd defendant.  The plaintiff noticed the increasing involvement of the 3^rd defendant in the 2^nd defendant’s affairs, and reminded him that the purchase price of the property had still not been settled.  He was, he says, assured that payment would eventually be forthcoming, and that he and his family could continue to occupy the property.  Despite this, in July 2009, the plaintiff received, at the property, court papers relating to an action by the 2^nd defendant seeking to recover possession of the property from the plaintiff.  He was told by the 3^rd defendant to ignore these, but the 2^nd defendant then obtained default judgment on the basis of a statement of claim alleging that the plaintiff had been an employee of the 2^nd defendant who had been granted a licence to occupy the property, which came to an end when he ceased to be an employee on 19 April 2007.  In fact, the plaintiff had never been employed by the 2^nd defendant, but was its director until 19 April 2007.  When the plaintiff received a court order requiring him to deliver up possession of the property, he challenged the 3^rd defendant, and eventually successfully set aside the default judgment.

19.  However, as the 2^nd defendant was by this time no longer repaying the loan from Chong Hing Bank, the bank claimed repayment of its loan and sought to recover vacant possession of the property pursuant to its legal charge.  The plaintiff and his wife were unable to resist the bank’s claim, and eventually gave up vacant possession of the property, which the bank sold (in 2011) for HK$32,500,000, resulting (after deduction of amounts owing to the bank and legal costs) in a balance of HK$18,919,721.81, which the bank paid into court on 23 October 2013 under HCMP 2429/2013.

20.  As will be apparent from the foregoing summary, the major difference between the parties related to the circumstances in which the documents, and in particular the sale and purchase agreement and the assignment relating to the property, were executed.  With the plaintiff maintaining that he signed all documents that bore his signature on one occasion at the office of the 4^th defendant, some days after 22 December 2006 when he and the 1^st defendant entered into their handwritten agreement, and the 3^rd and 4^th defendants insisting that only a small number of documents were signed at the 4^th defendant’s office on 22 December 2006, and that the sale and purchase agreement and assignment were executed on the dates they bore, at the offices of TNTH in the presence of Mr Yau, it is not surprising that the judge regarded the way in which this difference was resolved as being, as he put it, “pivotal to [his] assessment of the veracity of the parties’ respective cases”.

The trial and the judgment below

21.  With the plaintiff and the 3^rd defendant being the only witnesses scheduled to give evidence, the judge, of his own motion (but with the assent of the parties), issued subpoenas requiring Mr Yau to attend to give evidence at the trial and requiring TNTH to produce the original of its conveyancing file.  Mr Yau duly attended at the trial to produce the file on behalf of TNTH, and thereafter, having been given an opportunity to review the contents of the file (a copy of which was provided to him) over a period of some three days (which included a weekend), gave oral evidence.  In his evidence, Mr Yau provided a detailed account of what he said was his actual recollection of his involvement in the transaction, including the two meetings he claimed to have had with the plaintiff (in the afternoon on 22 December 2006, and then on 3 January 2007) at which (according to Mr Yau, and consistently with the defendants’ case) the plaintiff executed the sale and purchase agreement and the assignment respectively.  Mr Yau said that he explained the documents and their contents to the plaintiff in detail, and saw the plaintiff sign them, after which he immediately added his signature by way of attestation.

22.  The judge set out Mr Yau’s evidence in detail in his judgment (paragraphs 41 to 54).  He then went on to express scepticism about Mr Yau’s ability to recollect matters relating to what must have been a fairly commonplace transaction in such detail, after a lapse of some seven years.  The judge then focused on what he considered to be crucial documents that exposed Mr Yau’s evidence as untrue – these were original versions of the draft sale and purchase agreement and the draft assignment signed only by the plaintiff and not attested by Mr Yau, which were found in the original conveyancing file produced pursuant to the subpoena.  Mr Yau’s evidence, however, had been that he attested and signed all copies of these documents which had been signed by the plaintiff.  Mr Yau was unable to explain how these original documents came to be in the conveyancing file, despite being pressed to do so in cross-examination by counsel for the plaintiff.

23.  As the judge concluded, these documents were entirely inconsistent with the version of events put forward by Mr Yau.  Apart from this glaring difficulty with Mr Yau’s evidence, the judge also highlighted (in paragraph 61 of the judgment) several other respects in which Mr Yau’s evidence was unsatisfactory.  It is therefore entirely understandable that the judge should have regarded Mr Yau’s evidence as unreliable, and that he should have rejected it.

24.  The judge went on to examine the evidence given by the 3^rd defendant, finding it unsatisfactory, and rejecting it, for the reasons set out in some detail in paragraphs 64 and 65 of the judgment.

25.  In the event, the judge found, as the plaintiff claimed, that the plaintiff had only attended a single meeting at the office of the 4^th defendant some days after 22 December 2006, at which he was asked to sign a number of documents, which were in English and were not explained to the plaintiff, having been told by the 3^rd defendant that they were in furtherance of the agreement that the plaintiff had entered into with the 1^st defendant on 22 December 2006.  The 3^rd defendant also told the plaintiff that the documents reflecting the receipt of a deposit of HK$100,000 was simply a formality.  The judge further concluded that the 3^rd defendant was well aware that the documents that the plaintiff was being asked to sign were at variance with the terms of the agreement between the plaintiff and the 1^st defendant, and that the receipts were not intended to be mere formalities, thus rendering his representations to the plaintiff, which he had made with the intention that the plaintiff should rely on them, false, and knowingly so.

26.  In the light of these findings, the judge concluded that the 3^rd and 4^th defendants had been guilty of misrepresentation (the knowledge and intention of the 3^rd defendant being attributed to the 4^th defendant).  He assessed the damages for such misrepresentation at HK$22,000,000, being the value for which the plaintiff had been prepared to dispose of the property to the 1^st defendant, as he considered that the plaintiff was, on his own case, likely to have sold the property for about that price in late 2006 or early 2007, had he not entered into the agreement with the 1^st defendant of 22 December 2006.  In relation to the 2^nd defendant, the judge concluded that as it had provided no consideration for the property, which the plaintiff clearly did not intend to gift to the 2^nd defendant, it held the property on constructive trust for the plaintiff, so that the balance of the proceeds of sale by Chong Hing Bank should be held for the benefit of the plaintiff.  Given that the plaintiff would recover the monies lodged in court under HCMP 2429/2013, credit would be given to the extent of those monies against the damages awarded against the 3^rd and 4^th defendants, so that the extent of their liability would be the difference between HK$22,000,000 and the net amount paid out to the plaintiff from those funds.

The arguments advanced on appeal

27.  Although the grounds of appeal, as set out in the defendants’ respective notices of appeal and supplementary notices of appeal, were numerous and scattered across several different documents, Mr Bell, who appeared for the 2^nd, 3^rd and 4^th defendants at the hearing of the appeal, helpfully suggested that they could be grouped into three broad areas.  These were:

(1)  The effect of the Chinese agreement was such that it was always envisaged the beneficial interest in the property should be transferred to the 2^nd defendant to enable it to raise funds on the security of the property, on terms that the purchase price for the property would be settled subsequently, and that documentation would be created “for external use”, to satisfy third parties such as potential lenders that the property was duly vested in the 2^nd defendant.  Mr Bell submitted that on this basis, the documents signed by the plaintiff were consistent with the Chinese agreement, whatever the circumstances in which they came to be signed.  Thus, said Mr Bell, even assuming that the facts were as alleged by the plaintiff and found by the judge, they were in fact in furtherance of the Chinese agreement, so that there had been no misrepresentation when the plaintiff was told by the 3^rd defendant that the documents he was being asked to sign were in furtherance of that agreement.  The judge was therefore wrong to have found that this alleged misrepresentation had been made out.

(2)  The second broad point taken by Mr Bell was that the judge had been wrong to come to the conclusion that the property was held by the 2^nd defendant on constructive trust for the plaintiff, because it had always been the intention to transfer the beneficial interest in the property to the 2^nd defendant.  While it might be that the 1^st defendant was in breach of his obligation to make payment to the plaintiff for the property, this did not affect the 2^nd defendant’s title to it.

(3)  The judge had erred in his assessment of Mr Yau’s evidence, and had failed to take into account matters that could provide an explanation for the apparent inconsistency in his evidence relating to the signing of the documents by the plaintiff in his presence and his attestation of the plaintiff’s signature.

28.  In our view, none of these arguments can succeed.

The effect of the Chinese agreement

29.  So far as the first point is concerned, Mr Bell relied on clause 6 of the Chinese agreement, in particular the second sentence which stated “All other agreements made between the parties are used externally in order to tie in with this transaction.”  He submitted that this made it clear that other agreements would be produced for the purpose of the transaction, which could be shown to third parties to enable the transaction to proceed as intended – that is, by transferring title to the property to the 2^nd defendant in order to enable it to raise funds on the security of the property.  He went on to submit that so understood, there was no real inconsistency between the documents signed by the plaintiff (whatever the circumstances in which they were signed) and the Chinese agreement, and that the documents signed by the plaintiff could properly be regarded as being in furtherance of the Chinese agreement.

30.  Mr Chan, appearing for the plaintiff, contended that this argument was not open to the 3^rd and 4^th defendants on appeal, as it had neither been pleaded nor put to the plaintiff at trial, so that the plaintiff had never had a fair opportunity of dealing with it.  When pressed on this point by the court, Mr Bell initially accepted that this had not been pleaded.  He also was not able to show that this had been put to the plaintiff in cross-examination.

31.  Towards the end of his submissions, Mr Bell sought to place reliance on paragraph 14A of the 2^nd defendant’s Amended Defence, and paragraph 22 of the 3^rd and 4^th defendants’ Amended Defence.  The former alleged that the plaintiff and the 1^st defendant had the intention to enable the 2^nd defendant to raise funds using the property as security, and that the plaintiff (as a shareholder in the 2^nd defendant) benefited from doing this, so that he was estopped from pleading non est factum.  The latter simply pleaded (in its last sentence) that the plaintiff and the 1^st defendant wanted to raise funds for the 2^nd defendant and that the plaintiff transferred the property to the 2^nd defendant for this purpose, as was also stated in the Chinese agreement.  With respect, neither of these allegations make it clear that the defendants’ case was that even if the representation alleged (that the documents being signed were in furtherance of the Chinese agreement) had been made, it was true, or that any differences between the documents signed and the Chinese agreement were immaterial.  In our view, these pleadings do not provide an adequate foundation for the case which Mr Bell sought to advance before us.

32.  Further, as we have noted, Mr Bell was unable to identify in the cross-examination of the plaintiff by his predecessor any passage in which this contention was properly put to the plaintiff so as to give him a fair opportunity to deal with it.

33.  In these circumstances, we think that Mr Chan is correct to submit that this point is simply not one which is open to Mr Bell on appeal, as it was never properly raised below.

34.  Further, it seems to us that it is in any event questionable whether the point is a valid one.  Even if it had been the intention of the plaintiff to transfer the property to the 2^nd defendant in advance of payment being received, it is not immediately apparent why the sale and purchase agreement and assignment could not have been drafted so as to accurately reflect the arrangements as embodied in the Chinese agreement, rather than suggesting that there had been a straightforward sale at a price different to that which had been agreed, which had been settled in full by the time of the assignment, when this was simply not the case.  The documents placed before the plaintiff for signature did not reflect what had been agreed between the plaintiff and the 1^st defendant.  There was no provision for security of equivalent value to the purchase price which the 1^st defendant was required to provide under the Chinese agreement.  More importantly, the documents suggested that the purchase consideration had been settled in full by the time of the assignment, which was clearly not the case, and was not what had been agreed.  It seems to us, therefore, that the judge’s finding in relation to this misrepresentation was one which he was entitled to make.

Whether the 2^nd defendant was a constructive trustee

35.  Turning to Mr Bell’s second point, we cannot agree that the judge was in error in concluding that, in the circumstances, the 2^nd defendant held the property on constructive trust for the plaintiff. 

36.  Mr Bell’s argument here was that the objective of the transaction was for the plaintiff to transfer the beneficial interest in the property to the 2^nd defendant, and that this having been done, there was no room for the imposition of a constructive trust, since what was achieved was precisely what was intended by the parties. 

37.  The flaw in this argument, however, is that it is far from obvious that this was what was intended.  The Chinese agreement, which was the relevant agreement setting out the terms on which the transaction was to be effected was made, not between the plaintiff and the 2^nd defendant, but between the plaintiff and the 1^st defendant.  The 2^nd defendant was not a party to the agreement at all, although it was mentioned as the entity to which the property was intended (by the plaintiff and the 1^st defendant) to be transferred. 

38.  Although Mr Bell pressed on us his submission that the appropriate inference to draw in these circumstances was that it was intended to transfer the beneficial interest in the property to the 2^nd defendant, we cannot agree. In our view, where (as here) the plaintiff and the 1^st defendant are the only parties to the agreement by which the plaintiff agrees to sell the property, the natural understanding of such an agreement would be that the property is intended to be sold to the 1^st defendant.  This conclusion is reinforced by the fact that under the agreement, it was clearly the 1^st defendant that was responsible for payment of the price.  The fact that it was agreed that the property was to be transferred to the 2^nd defendant would indicate only that the 2^nd defendant was to obtain the legal title to the property as nominee for and on behalf of the 1^st defendant.  It clearly was not the plaintiff’s intention to make a gift of the property to the 2^nd defendant come what may: that being the case, it cannot be said that the 2^nd defendant was entitled to retain the property as against the plaintiff even if the 1^st defendant never paid for it.  In those circumstances, the 2^nd defendant would, as the judge held, hold the property for the plaintiff.

39.  Moreover, as Mr Bell accepted, the defendants’ pleadings nowhere suggested that the 1^st defendant had entered into the Chinese agreement on behalf of the 2^nd defendant.  On the contrary, as Chu JA pointed out, the 2^nd defendant’s own case (in paragraph 36(1) of its Amended Defence) was that it was merely a nominee company used to implement the Chinese agreement – and as the plaintiff’s counterparty in the Chinese agreement was the 1^st defendant, the 2^nd defendant must necessarily be understood as saying that it was the nominee of the 1^st defendant, a position that is inconsistent with this argument of Mr Bell’s.

Rejection of Mr Yau’s evidence

40.  Mr Bell’s final submission was that the judge was wrong to have rejected Mr Yau’s evidence that the plaintiff had in fact signed the sale and purchase agreement and the assignment before him, on two separate occasions.  He submitted that in concluding that Mr Yau’s evidence was untrue, or at least unreliable, the judge had failed to have regard to possible explanations for the presence in the TNTH conveyancing file of the versions of the execution pages of the sale and purchase agreement and the assignment bearing only signatures of the plaintiff and not of Mr Yau, and thus wrongly concluded from the presence of those documents in the file that Mr Yau was not telling the truth when he said that the plaintiff attended before him to execute these documents, and that he attested them immediately after the plaintiff signed them.

41.  As the judge correctly observed, the presence in the TNTH conveyancing file of original versions of the sale and purchase agreement and the assignment bearing only the signature of the plaintiff and not of Mr Yau was something that cast very grave doubt on the veracity of Mr Yau’s account of matters.  Mr Yau’s evidence was that the plaintiff signed one original sale and purchase agreement in his presence on 22 December 2006 and signed one original assignment in his presence on 3 January 2007.  On each occasion, according to Mr Yau, he immediately added his own signature by way of attestation.  It was not (as Mr Bell accepted) Mr Yau’s position that there were two sets of each document, both of which were signed by the plaintiff, but only one of which was attested by Mr Yau.

42.  Given that evidence, an explanation of how it came to be that there were additional versions of these two documents with the plaintiff’s original signature on them, but not Mr Yau’s, was clearly called for.  Without such an explanation, it was, we think, open to the judge to conclude, as he did, that the truth was that the plaintiff did not attend before Mr Yau at all, but had signed the documents in the way which the plaintiff described (at a meeting with the 1^st and 3^rd defendants), after which the documents were passed on to Mr Yau for processing.  Mr Bell criticised this conclusion as speculative, but it seems to us that it was an entirely reasonable view for the judge to take.  Mr Yau was pressed on this point during his cross-examination, and was afforded the opportunity to provide such explanation as he could.  However, he was unable to put forward any explanation at all.

43.  At the hearing, Mr Bell suggested that other possible explanations existed for the presence of an additional version of the signature pages, signed by the plaintiff but not Mr Yau, in the TNTH files, such as the possibility that the plaintiff had been asked to sign an extra copy of the sale and purchase agreement and the assignment by either Mr Valent Tse, a partner of TNTH, or by Ms Isabella Au, the conveyancing clerk in charge of the file.  However, these were not explanations suggested by Mr Yau.  Nor were they explanations put forward by the defendants, who could, if necessary have called Mr Tse or Ms Au as witnesses had there been some foundation for these suggestions, or at least explained why they were not in a position to call them.  Absent any explanation by Mr Yau or the defendants, we do not think there is any basis for criticising the judge for coming to the conclusion that he reached.

44.  Further, as is apparent from paragraph 61 of the judgment, the judge found Mr Yau’s evidence to be unsatisfactory in a number of other respects as well.  In the circumstances, we do not think that his rejection of Mr Yau’s evidence can be complained of.

Conclusion and disposition

45.  For the reasons explained above, we did not consider that any of the grounds of appeal relied upon by Mr Bell before us had merit.  Accordingly, we dismissed the appeals, with costs to the plaintiff and a certificate for two counsel.