CHOI KEUNG v. CHOI LEUNG CHUEN

CACV 80/2021

[2022] HKCA 808

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 80 OF 2021

(ON APPEAL FROM HCA NO 296 OF 2018)

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REASONS FOR JUDGMENT

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Hon Kwan VP:

1.  On 2 February 2021, Linda Chan J handed down her judgment[1] after a three-day trial in December 2020 dismissing the plaintiff’s claims against the defendant for conversion of a classical Chinese scroll (entitled “雜菜卷”) consisting of a painting of vegetables and accompanying Chinese calligraphy (“the Painting”). The plaintiff alleged a bailment when he entrusted the Painting in 1998 to the defendant, his fifth uncle, to look for a buyer for him. The defendant denied there was a bailment and claimed that the plaintiff sold the Painting to him in 2000 for HK$30,000. The judge rejected the plaintiff’s case and found in favour of the defendant’s case. The plaintiff brought this appeal to challenge the judge’s findings of fact. We dismissed his appeal at the end of the hearing. These are my reasons for dismissing the appeal.

The judgment below

2.  As this action turns entirely on whether the plaintiff transferred the Painting to the defendant pursuant to a bailment or a sale, the parties’ evidence as to the nature of the transaction is of critical importance. Before setting out the judge’s analysis, these undisputed background matters may be noted.

3.  In 1998, the plaintiff bought five pieces of artwork in Nanjing for RMB 60,000, one of which was the Painting. On returning to Hong Kong, he took the Painting to Christie’s for appraisal and got an offer to have the Painting auctioned in England with a reserve price of HK$80,000. Instead of taking up the offer, he brought the Painting to the defendant. As mentioned, there is dispute whether this was in 1998 or 2000 and, crucially, whether this was a bailment or a sale.

4.  In the late 1990s, the defendant was operating a travel agency business through his company EOT Travel Service Ltd. He was not an art dealer but had an interest in calligraphy and art appreciation. He was fluent in Japanese and had many Japanese customers in his travel service business. During June 1997 to May 1999, his office was in 833 Cheung Sha Wan Road, Cheung Sha Wan Plaza. In May 1999, he moved his office to 778 Cheung Sha Wan Road, Clifford Centre. He retired in August 2003.

5.  In or around 2000, the plaintiff received HK$30,000 from the defendant. There is dispute whether this was the purchase price for the Painting, or whether this was a loan extended by the defendant to the plaintiff. There is no dispute the plaintiff was in financial difficulty at the time when he was in a forwarding business, and that he did not at any time pay back the defendant HK$30,000.

6.  In 2013, the defendant had the Painting scanned professionally by his younger daughter Choi Hoi Nam (“Hoi Nam”) and her boyfriend.

7.  In early 2014, Hoi Nam was estranged from the defendant. The defendant’s wife, Wong Hiu Lan (“Madam Wong”), brought divorce proceedings in April that year. Agreement on ancillary relief was reached in June 2014.

8.  The Painting remained with the defendant until 2017. In May 2017, the defendant signed a preliminary sales agreement to engage Sotheby’s in Hong Kong to sell the Painting. A formal sale agreement was signed on 22 June 2017. The Painting was described in the agreement as “Attributable to Zhang Yu, Vegetables, ink and colour on paper, handscroll”, with a low estimate of HK$100,000, a high estimate of HK$200,000 and an agreed reserve price of HK$100,000.

9.  By a sales result statement of Sotheby’s dated 6 October 2017, the defendant was notified that the Painting was sold on 1 October 2017 at the hammer price of HK$2.4 million and after the deduction of commission and other charges, the net sale proceeds payable to him was HK$2,176,500.

10.  On 20 November 2017, Hoi Nam informed the plaintiff that the Painting was sold by the defendant through Sotheby’s in late 2017 for HK$2,980,000 inclusive of the purchaser’s commission.

11.  Between 21 and 29 November 2017, the plaintiff confronted the defendant about the sale through Sotheby’s in a series of telephone calls and WhatsApp messages. In his messages, the defendant claimed he was not responsible for the sale by auction, as he had sold the Painting to a Japanese friend five years ago for roughly HK$50,000, and when he called this friend to inquire about the sale, the friend informed the defendant that the Painting was sold at a low price two years ago and declined to disclose to the defendant the identity of the purchaser. The defendant had since admitted to have fabricated the story of the Japanese buyer.

12.  On 5 January 2018, the plaintiff’s solicitors wrote to the defendant alleging that the Painting was entrusted to him for sale on the plaintiff’s behalf, that the defendant had lied about the sale of the Painting to a Japanese buyer in the WhatsApp messages, and that he had changed his stance and alleged the Painting was sold to him in 2000 for HK$30,000 when this was actually a loan to the plaintiff. The letter demanded that unless the defendant was to admit within seven days the Painting belonged to the plaintiff and account for the proceeds of sale, legal proceedings would be brought without further notice.

13.  The defendant replied by his solicitors’ letter dated 18 January 2018 in which he gave his version of events that the Painting was sold to him in around 2000 and the purchase price of HK$30,000 was settled by cheque. The defendant did not respond to the fact that he had changed his allegation from the version in the WhatsApp messages.

14.  The writ in this action was issued on 2 February 2018. The plaintiff applied for summary judgment on 24 April 2018 and relied heavily on the fact that the defendant gave a different version in his WhatsApp messages. In his lengthy affirmation in opposition filed on 5 June 2018, the defendant objected to the plaintiff’s use of the screenshot of the WhatsApp messages, alleging that the screenshot was “potentially inadmissible with significant risks of the same having been the results of undue manipulation”, “given [his] Estranged Daughter familiarity with Photoshop”[2]. He did not make any substantive response to the version given in the WhatsApp messages.

15.  The plaintiff and the defendant testified at the trial. Hoi Nam and Madam Wong also gave evidence for the plaintiff. The defendant called his niece and former employee Choi Wing Shan (“Wing Shan”) as his witness. In her judgment, the judge gave detailed references to the transcript of the evidence of the witnesses that she had considered in arriving at the findings as summarised below.

16.  The judge considered that the plaintiff’s evidence does not hold up to scrutiny. His version of events means that he allowed the defendant to hold on to the Painting for nearly two decades, when his case all along was that he bought the Painting in Nanjing for resale at a profit and that he was of limited means and the Painting was a substantial investment for him. She took into account that the plaintiff clearly had viable alternative means to sell the Painting and it is unlikely that the defendant would have better access to the art collector’s market than an established auction house. The judge rejected the plaintiff’s proposition as “wholly implausible”[3]. The plaintiff accepted he never asked for the Painting back and was unable to proffer any explanation for his inaction[4].

17.  The judge regarded the plaintiff’s assertion that the HK$30,000 was a loan as “doubtful” and found it “incredible” that the sum was never repaid[5].

18.  It was also held that the plaintiff’s version suffers from factual inconsistencies. The plaintiff testified he handed over the Painting to the defendant at the latter’s office in Clifford Centre and recalled it was an open-area office without any conference room. As borne out by the Land Registry search record, the defendant’s office was in Cheung Sha Wan Plaza from June 1997 to May 1999 and he only moved to Clifford Centre afterwards. Madam Wong confirmed that the office in Cheung Sha Wan Plaza had a conference room whereas the layout of the office at Clifford Centre was open plan. The judge found that the plaintiff could not have handed over the Painting to the defendant in 1998[6].

19.  The judge noted that the plaintiff’s case is not corroborated by the oral evidence of Madam Wong and Hoi Nam. While they might have assumed that the Painting still belonged to the plaintiff, there is no evidence to support their belief[7]. None of the witnesses who regularly attended the Choi family gatherings were able to recall any instance where the topic of the Painting was brought up[8].

20.  Conversely, the judge found the defendant’s evidence “on the whole cogent” and noted that it is consistent with the plaintiff’s testimony that the meeting in which the Painting was handed over occurred in Clifford Centre. The defendant’s version explains why the plaintiff never asked for the Painting back all these years, why the defendant issued a cheque of HK$30,000 to the plaintiff, and why the plaintiff never repaid the amount[9]. Wing Shan’s evidence that the meeting when the plaintiff brought the Painting to the defendant occurred in 2000 is consistent with the plaintiff’s and the defendant’s evidence that the transfer took place in Clifford Centre[10].

21.  The judge considered the defendant’s admitted lie in the WhatsApp messages the “main flaw” in his evidence and “certainly damaging to [his] credibility”. On balance, she did not think it fatal to his case as lies in themselves do not necessarily mean that the entirety of the witness’s evidence should be rejected. She found his explanation (that he had lied because he did not want the plaintiff to have any hard feelings if the plaintiff learned he sold the Painting at such a high price and attempted to forestall further questioning by the plaintiff) “inherently credible”[11].

22.  For the above reasons, the judge accepted the defendant’s evidence that he purchased the Painting from the plaintiff in 2000 for HK$30,000 and found that the plaintiff failed to prove the existence of a bailment of the Painting on the balance of probabilities[12].

This appeal

23.  Mr Edward Chan, SC[13], who was not the trial counsel, submitted on behalf of the plaintiff that the judge’s findings of fact under challenge are not findings of primary fact but based on inferences and evaluation of primary facts, documentary evidence and inherent probabilities. Nor were the findings based on credibility and demeanour of witnesses. Hence, the appeal court is in as good a position as the trial judge to assess the evidence and interfere if her decision cannot be reasonably explained or justified.

24.  I do not think it correct to characterise this appeal in that way. The evaluation of oral evidence is crucial to resolving the material conflict of the parties regarding the transaction in which the Painting was handed over to the defendant. It is of vital importance to assess the credibility and reliability of witnesses as there is a straight conflict of primary facts. The judge was clearly mindful of this and had observed closely the witnesses when they gave evidence[14]. Considering that there is a spectrum of the importance of the part played by a trial judge in assessing evidence, I think the present situation is at or near that end of the spectrum where the trial judge has a definite advantage over the appeal court in assessing the credibility of the witnesses and receiving their evidence at first-hand[15].

25.  In these circumstances, in accordance with established principles, the threshold for appellate interference with the judge’s findings of fact is high. Judges can reasonably reach conclusions different from each other on findings of fact and such findings in a judgment may well be inherently incomplete statements of the impression made upon the trial judge. The Court of Appeal should interfere with the findings of the primary judge only if satisfied that the conclusion on facts is plainly wrong. The starting point is for the appellant to identify palpable errors in the judgment sufficiently material to warrant appellate intervention. The appellate process is not designed to give a litigant a platform to repeat submissions on the evidence with the hope that the appeal court may come to a view different from the primary judge.

26.  The broad grounds of appeal may be summarised as follows:

(1)  The judge erred in finding that the defendant’s explanation regarding his lies in the WhatsApp messages was “inherently credible”.

(2)  The judge erred in finding that the plaintiff’s case was not corroborated by the evidence of Madam Wong and Hoi Nam.

(3)  The judge wrongly permitted the defendant to adduce at trial the land search record of his office in Cheung Sha Wan Plaza.

(4)  The judge erred in finding that it was “implausible” for the Painting to have remained with the defendant for nearly two decades under bailment.

(5)  The judge erred in finding that it was neither “implausible” nor “incredible” for the plaintiff to have sold the Painting to the defendant at HK$30,000.

(6)  The judge failed to resolve key questions concerning the mode of payment of HK$30,000 to the plaintiff.

(7)  The judge took into account irrelevant matters concerning the defendant’s behaviour.

(8)  The judge erred in finding that the alleged loan was “incredible”.

27.  The grounds of appeal will be considered in the order set out above.

Ground (1): the judge erred in finding that the defendant’s explanation regarding his lies in the WhatsApp messages was “inherently credible”

28.  In support of this contention, the plaintiff raised three points.

29.  First, it was submitted that the judge failed to appreciate and resolve an inconsistency in the defendant’s evidence.

30.  The inconsistency was said to arise in this manner. Mr Chan referred this court to certain parts of the transcript[16] in which the defendant gave evidence about his telephone conversation with the plaintiff prior to the WhatsApp messages. According to Mr Chan’s reading of those parts of the transcript, the defendant said in evidence he told the plaintiff on the telephone he purchased the Painting from the plaintiff and had paid for it by cheque and therefore had the right to sell. Mr Chan submitted if the defendant had indeed said to the plaintiff in the first telephone conversation the words as mentioned, this would render his explanation why he had to lie in the subsequent WhatsApp messages (which Mr Chan said was wrongly accepted by the judge) inconsistent, inexplicable and irreconcilable with the judge’s finding of fact. Had the judge appreciated what was said in the first telephone conversation, she would have found there was no reason for the defendant to lie in the WhatsApp messages. There would be no question of wanting to avoid hard feelings to the plaintiff, as the plaintiff had already been told the truth. There would be no need to make up a story to forestall further questioning by the plaintiff, as the plaintiff had been told by the defendant that he was the purchaser.

31.  As I have pointed out to Mr Chan in the course of the argument, there are ambiguities arising from that part of the transcript whether the defendant had indeed said those words to the plaintiff in the telephone conversation as understood by Mr Chan. It would appear to me that parts of the defendant’s testimony and certain words put in quotation marks in the transcript[17] might not be words actually spoken by the plaintiff to the defendant on the telephone but might well be the thoughts that crossed the defendant’s mind at the time and which he did not convey to the plaintiff. In the defendant’s witness statement at §31, he mentioned that in the telephone conversation, he “gave [the plaintiff] some answers neither here nor there”. Further, the part singled out by Mr Chan[18] must be read with what the defendant said in evidence immediately after[19], in which he denied that he had told the plaintiff on the telephone the Painting was sold by him through auction at HK$2.9 million and said he had told the plaintiff a story that the Painting was sold to a Japanese at HK$50,000 odd.

32.  Nor do I think what the defendant said in answer to the judge’s questioning[20] was sufficiently clear to amount to confirmation that he had indeed told the plaintiff on the telephone he bought the Painting from the plaintiff. The judge did not appear to have understood the plaintiff’s evidence in that sense, or she would not have continued to question the plaintiff at some length why he had to make up a story subsequently.

33.  I do not accept Mr Chan’s contention there was apparent inconsistency in the defendant’s evidence, or that the judge had failed to appreciate any such inconsistency. Having embarked on a thorough questioning of the defendant why he chose to lie to the plaintiff, and why he chose to prevaricate and did not come clean[21], it is inconceivable that the judge would have failed to appreciate that the defendant should have no need for lies and subterfuge, if he had indeed told the plaintiff in the first telephone conversation that the Painting was sold to him in 2000.

34.  Mr Chan sought to make mileage out of one of the WhatsApp exchanges in which the defendant wrote (in English translation): “30 thousand, 80 thousand, 500 thousand yen + 20 thousand HK dollars, how do you want to resolve? Half for each person? Full refund?”[22] He submitted that this was offering a refund and is critical, for it was premised on the thinking that part or all of the proceeds of sale belonged to the plaintiff, otherwise the defendant would not have described the process as a “refund”. This supported the plaintiff’s case that when the Painting was entrusted to the defendant to find a buyer, it was on the understanding that the “commission” to the defendant was to be determined later. He submitted that the judge failed to appreciate the “only plausible explanation” for the refund was that both the plaintiff and the defendant had a common understanding that the plaintiff was entitled to the proceeds of sale.

35.  I do not agree with him the “only plausible explanation” for mentioning a full refund was that there was a common understanding the plaintiff was entitled to the proceeds. The judge had asked the defendant specifically why he mentioned in his WhatsApp message various sums that might be paid to the plaintiff, and he had given full explanation[23]. He admitted that the lies were not the best way to handle the situation. The judge is entitled to accept the defendant’s explanation as “inherently credible”.

36.  The pertinent exchanges read as follows:

問: 咁點解唔直接話畀佢聽「咁你都賣咗畀我喇，你仲問咩嘢呢? 關你咩嘢事呢?」 好自然嘅反應啫?

答: 我又冇諗到呢度，即係佢既然唔肯講，佢用第二種方法嚟問我嘅，咁佢都係����啲銀啫，咁樣囉。

問: 咁你咪話「咁咪分啲畀你囉，你賣咗畀我㗎喇，不過我…」，即係點解唔可以直接講呢，我都係唔明?

答: 如果你講一個話分啲畀佢，就證明佢有份個囉喎。

問: 你頭先自己都咁講，你話「可以分畀佢嘅」，你自己嗰個 – 嗰啲WhatsApp都係咁講，$20,000、$50,000、$80,000都係啫。

答: 係，我願意出嗰幾萬鈫係想擺平呢件事啫，我冇諗到呢個方式係比較合適啲嘅、更好啲嘅，冇諗到咁樣，只不過佢突然間打電話嚟，如果佢老老實實同我講「你個女講畀我聽嘅」咁樣喇。

問: 因為個常理，常人睇嘢好簡單，如果個事實係咁簡單咪就話「賣咗畀你囉」，咁但係調番轉喎，就費咁多周章，作咁 -- 兩個咁嘅故仔，咁咪仲複雜? 即係除非 -- 變咗常人嘅諗法就話，除非你有嘢想隱瞞喇，咁你咪作個故仔話賣咗畀人囉，「唔關你事」，呢個係一個常理嘅睇法，咁所以你有咩嘢解釋呢? 因為佢已經問到你喇，你知佢 -- 應該又係你個女講畀佢聽喇，咁你正常咪就咁講，講真話囉，最直接嘅講法?

答: 估計啫，都唔確定吖嘛，係咪?

…

答: 冇咩嘢原因㗎，冇咩嘢原因㗎，總之不過唔想佢知道拍賣咗咁多錢，佢聽起上嚟唔舒服咁啫。

問: 即係純粹就唔想佢知道佢賣咗咁多錢，佢唔舒服?

答: 係喇，佢聽起上嚟唔舒服，因為30,000鈫同佢買，拍賣咗二百幾萬，個difference太大喇，任何人聽到都唔舒服喇，咁樣囉。

…

問: … 咁你啲WhatsApp有開[價]吖嘛，咪畀佢?

答: 哦，佢唔肯見我，我咪 -- 佢唔肯見我，我喺嬲嘅情況底下講一啲晦氣說話啫，咁呢啲晦氣說話唔係協議，唔係一個promise嘅嘢嘅，「你如果真係要呢幾萬鈫，都幾萬鈫啫，畀你冇所謂，唔好冤住我喇，係」，打發佢走喇咁樣。

37.  Second, Mr Chan contended the judge had overlooked the defendant’s answer in cross-examination that he suggested a refund because he was angry. Mr Chan said this was the first time the defendant sought to justify what he had said on the basis of anger. This is not quite right. The defendant did mention in his witness statement that he was “a bit angry about the manner [the plaintiff] called to confront [him].”[24] Mr Chan further argued there was no real basis for the defendant to feel angry if he had “legitimately” bought the Painting and this was a “marked shift” from his stance of not wanting further inquiries from the plaintiff. He submitted that the judge failed to consider the defendant had mentioned in his WhatsApp message (in English translation): “Hope the truth will out soon enough to prove my innocence.” The context was that the defendant asserted his innocence because he did not sell the Painting by auction. Mr Chan argued “the only reasonable explanation” that guilt or innocence would have a role to play was if the Painting did belong to the plaintiff, and that the judge failed to appreciate the defendant’s “plea of innocence” could only have been made by him if he had regarded the Painting as belonging to the plaintiff.

38.  I do not accept the above submissions. It is not necessary for the trial judge to address every point raised and discuss all the evidence in minutiae[25]. The WhatsApp message in which the defendant mentioned about hoping the truth would come out to prove his innocence was canvassed in cross-examination and he had disagreed with the suggestion if he had caused the Painting to be sold by auction, it would mean that he was not innocent[26]. It could not be said that the “only reasonable explanation” must be the one suggested by Mr Chan and put to the defendant in cross-examination. The cross-examiner had suggested to the defendant at one point that even if he had sold the Painting it did not mean he was not innocent[27], to which the defendant agreed.

39.  Third, Mr Chan submitted that the judge failed to take into account the defendant had resorted to lies in other instances. When the defendant was confronted about the WhatsApp messages in the letter before action of the plaintiff’s solicitors, the defendant did not give the explanation he gave to the judge under questioning. In his affirmation filed in opposition to the application for summary judgment, he did not respond to the WhatsApp messages in a substantive way and instead insinuated that the screenshot of those messages could have been photoshopped by his estranged daughter. He also sought to explain that he made up the story about a Japanese buyer because he could not disclose his sales agreement with Sotheby’s due to a confidentiality provision, which was non-existent.

40.  The fact that these matters were not mentioned in the judgment did not mean that the judge had overlooked them or not taken them into account. As the judge had noted[28], witnesses can regularly lie and lies in themselves do not necessarily mean that the entirety of that witness’s evidence is to be rejected. This goes to the credibility of a witness and I do not think there is any proper basis to interfere with the judge’s finding of primary fact that the defendant’s explanation regarding his lies in the WhatsApp messages was “inherently credible”.

Ground (2): the judge erred in finding that the plaintiff’s case was not corroborated by the evidence of Madam Wong and Hoi Nam

41.  The complaint of Mr Chan is that the judge had misunderstood and misinterpreted Madam Wong’s “clear” evidence that the defendant had said to her the Painting belonged to the plaintiff on the day the defendant took it home. Had the judge not misunderstood this evidence, she would not have found that Madam Wong did not say that “[the defendant] was holding the Painting for [the plaintiff].”[29] Mr Chan also submitted that Madam Wong had testified that the defendant spoke of a loan of HK$30,000 advanced to the plaintiff some two to three years after he took the Painting home and this was shortly before his retirement. So this corroborated the plaintiff’s case the Painting was entrusted to the defendant in 1998 and the loan was received some time after.

42.  As for Hoi Nam’s evidence, it was contended that the judge failed to give weight to her evidence she learned from the defendant the Painting belonged to the plaintiff, that it was not surprising she was not able to recall a particular incident of her being told by the defendant to that effect, and that the part she played in informing the plaintiff of the defendant’s auction sale is strong evidence of her belief and conviction that the Painting belonged to the plaintiff.

43.  There is no merit in any of the above contentions. They are hardly palpable errors of sufficient materiality to undermine the judge’s conclusion. The judge had given cogent reasons in §26 of the judgment for finding that there is no evidence before the court to support the assumption or belief of Madam Wong and Hoi Nam that the Painting still belonged to the plaintiff. I do not agree that the judge had misunderstood or misinterpreted Madam Wong’s evidence, nor did she testify that the defendant had told her the Painting belonged to the plaintiff when he took it home. As pointed out by the judge, what she said was: “佢話「今日阿強攞咗幅畫嚟」[30]. She admitted that she was not sure if the defendant had said to her 「阿強畀我，叫我幫佢賣㗎」[31]. She also agreed she could not remember clearly in which year the defendant spoke to her about the Painting, whether it was in 2000 or some other time[32].

44.  There is no basis to interfere with the judge’s finding that the plaintiff’s case was not corroborated by the evidence of Madam Wong or Hoi Nam.

Ground (3): the judge wrongly permitted the defendant to adduce the land search record of his office in Cheung Sha Wan Plaza

45.  This ground of appeal is based on the rule in Browne v Dunn (1894) 6 R 67. The proposition is that where the court is to be asked to disbelieve a witness, the witness should be cross-examined and the failure to cross-examine on some material part of his evidence may be treated as an acceptance of the truth of that part of his evidence.

46.  Mr Chan’s arguments may be stated as follows.

47.  He contended that the judge was wrong to permit the defendant’s counsel, Mr Yip Chi Ho, to produce the land search record of the office premises in Cheung Sha Wan Plaza in the cross-examination of Madam Wong. The land search record was not put to the plaintiff when he was cross-examined earlier. It is unfair to the plaintiff because he was deprived of an opportunity to explain. The location of the meeting (that it was in Clifford Centre) was never at issue, it was only the timing of the meeting that was in dispute (whether it was in 1998 or 2000). The land search record showed that the meeting in Clifford Centre, which is common ground, could not have been in 1998, as the defendant’s office was in Cheung Sha Wan Plaza in 1998, with a two-year tenancy running from June 1997 to May 1999. Applying the rule in Browne v Dunn, the defendant should have put to the plaintiff in cross-examination the nature of the case upon which it is proposed to rely in contradiction of the plaintiff’s evidence that the meeting was in 1998, particularly where that case relies upon inferences to be drawn from other evidence, such as the land search record.

48.  The nub of the matter is whether there is any unfairness to the plaintiff in not putting the land search record to him when he was cross-examined earlier.

49.  I do not think there is unfairness in this instance. As pointed out by Mr Yip, the defendant had distinctly referred to the parties’ meeting in Clifford Centre in his WhatsApp messages with the plaintiff. The defendant was not laying an ambush for the plaintiff. The plaintiff agreed in evidence that was where the meeting took place[33]. He gave a description of the layout of the office that accorded with the office in Clifford Centre, which was an open plan office with no conference room and was the address on the business card of the defendant produced in the plaintiff’s list of documents[34].

50.  The defendant had consistently put forward the case that the transaction in Clifford Centre was in 2000, not in 1998 as alleged by the plaintiff. This was put to the plaintiff in cross-examination[35]. He was given the opportunity to respond to the defendant’s case about the year of the meeting. He chose to maintain it was in 1998, in light of the information available to him about the address of the defendant’s office.

51.  As noted by the judge[36], the land search record is a public record accessible to both parties all along. Moreover, this was not the only public record showing that the meeting in Clifford Centre could not have taken place in 1998. There was already disclosed a notification of situation of registered office filed in the Companies Registry of EOT Travel Service Ltd [37], showing that with effect from 24 May 1999, the registered office of that company was changed to Clifford Centre. So it should not have been a matter of surprise to the plaintiff that according to public record, there could not have been a meeting at Clifford Centre in 1998.

52.  In these circumstances, I do not think there is unfairness to the plaintiff that the land search record was not shown to him in cross-examination but was shown only to Madam Wong subsequently to assist her to recall the timing when she said she could not remember if the defendant moved his office to Cheung Sha Wan Plaza in 1997 and to Clifford Centre in 1999[38]. The plaintiff’s trial counsel did not raise any objection to the production of the land search record at the time. He had every opportunity to re-examine Madam Wong on this document, and to cross-examine the defendant and Wing Shan on this document and the timing of the meeting.

53.  Mr Chan submitted that on the evidence of Wing Shan, it was unclear whether it could be said that the Cheung Sha Wan office had a conference room or whether it was an open plan office with some “low partitions” as she said in cross-examination and re-examination that the height of the partition was similar to the partition in the court room and was more than two metres high[39]. I do not think her evidence is unclear. Besides, Madam Wong said categorically there was a conference room in the Cheung Sha Wan office[40]. In any event, it is immaterial as it was the evidence of the plaintiff[41] and of Madam Wong[42] that the office in Clifford Centre (where the meeting took place according to both sides) was an open plan office.

Ground (4): the judge erred in finding it was “implausible” for the Painting to have remained with the defendant for nearly two decades under bailment

54.  In support of this contention, Mr Chan submitted that the judge had failed to consider various matters: the plaintiff’s unchallenged evidence in cross-examination that he had entrusted three other pieces of artwork, which were purchased with the Painting, to his brother-in-law in Australia[43] for sale and none of them had been sold over the years[44]; it was not unreasonable for an antique artwork not to be sold until the right purchaser came along as, even on the defendant’s case, he only sold the Painting in 2017 having bought it in 2000; it was entirely reasonable for the plaintiff to entrust the Painting to the defendant to find a buyer in view of his connections in the travel industry and his previous success in selling a valuable painting for another[45]; the fact that other witnesses were not able to recall any instance in which the Painting was discussed at family gatherings did not necessarily undermine the plaintiff’s case; the defendant had asked for the Painting to be scanned and this would tend to support the plaintiff’s case the defendant wished to show an image of the Painting to potential buyers; it was significant that Madam Wong and Hoi Nam decided to inform the plaintiff about the auction and they did so out of “their sense of justice and fairness”.

55.  The above matters, whether taken separately or cumulatively, and which the judge had allegedly failed to consider, are plainly insufficient to undermine her reasoning and conclusion that it was “wholly implausible” for the Painting to have remained with the defendant for nearly two decades under bailment and the plaintiff never once thought of asking for the Painting back and was unable to proffer any explanation for his inaction when this was put to him[46]. Mr Chan repeated to this court the explanation given by the plaintiff for his inaction. They were the same parts of the transcript that the judge made reference to in her judgment, being the questioning by the judge of the plaintiff[47]. The appeal process is not to provide another platform for the appellant to repeat submissions on evidence that had been made or should have been made in closing submissions before the trial judge.

Ground (5): the judge erred in finding it was neither “implausible” nor “incredible” for the plaintiff to have sold the Painting to the defendant at HK$30,000

56.  Mr Chan attacked the finding there is no evidence as to the value of the other four paintings purchased by the plaintiff in Nanjing in 1998[48]. He submitted that the judge overlooked the plaintiff’s evidence (mentioned for the first time in cross-examination) that he bought the Painting for RMB 50,000 odd[49] out of the total purchase price of RMB 60,000 and hence the other four paintings were worth far less. Had the plaintiff sold the Painting to the defendant at HK$30,000 as found by the judge, the plaintiff would have made a significant loss. This should be considered with the evidence that the plaintiff had an earlier offer from Christie’s to sell at the reserve price of HK$80,000, that the plaintiff had in his own mind thought of selling at HK$100,000 to HK$200,000[50], and the judge also accepted that the plaintiff was of limited means and the acquisition of the Painting was a substantial investment for him[51]. Mr Chan suggested that the plaintiff could have asked Christie’s to auction the Painting for him, and he could have waited. He contended that it was illogical for the plaintiff to realise a 50% loss on a recent investment when his cash flow problem was only short term. The judge’s finding “presupposed that the plaintiff was acting unreasonably against his interests”.

57.  Further, from the defendant’s perspective, he did not know about the reserve price offered by Christie’s[52]. Nor did he verify or obtain an independent valuation of the Painting. Mr Chan submitted it “defied common sense” for the defendant to purchase the Painting at HK$30,000 which was then a significant amount[53] and despite criticisms from his family[54].

58.  Thus, Mr Chan argued that the judge’s conclusion “fundamentally presumed both parties to have been acting so financially unreasonably and irresponsibly, and must accordingly be erroneous.”

59.  Most of the matters raised above were considered by the judge, who gave reasons in §31 of the judgment why she did not think it implausible or incredible for the plaintiff to have sold the Painting to the defendant at HK$30,000. Even if the judge may not be strictly correct in stating that there is no evidence as to the value of the other four paintings, I am unable to say that the other reasons given by her are such that it is plainly wrong to conclude that it is neither implausible nor incredible for the Painting to be sold to the defendant at HK$30,000. The defendant gave evidence why he bought the Painting from the plaintiff and how they struck a bargain at HK$30,000[55]. The judge is entitled to prefer his evidence.

Ground (6): the judge failed to resolve key questions concerning the mode of payment of HK$30,000 to the plaintiff

60.  Mr Chan submitted that the judge had wrongly regarded it as non-contentious that the HK$30,000 was paid to the plaintiff by cheque when she mentioned this at the outset of the judgment in §6 as part of the factual background. Due to this error, the judge failed to resolve whether the drawing of the cheque took place at the same time the Painting was handed over to the defendant. Under cross-examination, the plaintiff mentioned for the first time that he did not receive the HK$30,000 by cheque (as alleged by the defendant in the letter of his solicitors dated 18 January 2018) but the amount was paid into his bank account by the defendant by bank transfer[56].

61.  Mr Chan submitted that it was not the defendant’s case that the cheque was given to the plaintiff at the meeting when the Painting was handed over but subsequently. He latched on to this sentence of the aforesaid letter of the defendant’s solicitors: “Upon the parties entering into the Sale and Purchase Agreement, a Chinese Artwork was sold to [the defendant] for a consideration of HK$30,000, the same transaction of which has since been settled by [the defendant] by way of cheque …” (emphasis supplied). He claimed that the judge never attempted to resolve when and how the payment of HK$30,000 was effected and that the judge “plainly misunderstood” the evidence.

62.  I do not think it is correct neither party had suggested that the payment of HK$30,000 took place during the meeting, as asserted by Mr Chan. It is pertinent to note the defendant’s affirmation filed in opposition to summary judgment, in which he stated clearly that “it was on even date” at his office that he drew a cheque for HK$30,000 after negotiating with the plaintiff on the price and they had “a simultaneous exchange”, when the plaintiff handed over the Painting and he handed over the cheque immediately[57]. The defence[58] and the defendant’s witness statement[59] contained clear statements to the same effect.

63.  The plaintiff chose not to refute in his witness statement the clear statement of the defendant regarding the mode of payment of HK$30,000 and only denied for the first time under cross-examination that the payment was by cheque. The defendant gave evidence in cross-examination there was a simultaneous exchange of the Painting and the cheque[60]. He was not even challenged that there was no payment by cheque and that it was done by bank transfer. The judge had found in §29 of the judgment that the payment was by cheque. There is ample evidence on which she is entitled to reach that finding.

Ground (7): the judge took into account irrelevant matters concerning the defendant’s behaviour

64.  Mr Chan submitted that in holding that the defendant’s behaviour between 2000 and 2017 was consistent with him being the owner of the Painting, the judge took into account these irrelevant matters: the defendant asked Hoi Nam to scan the Painting and he discussed with Madam Wong the possibility of sending the Painting to Taiwan for repair. He contended that these matters should carry no weight, and such behaviour of the defendant was not inconsistent with the plaintiff’s case of bailment.

65.  The judge explained in §30 of the judgment she took the above matters into account because she regarded it as significant that neither Madam Wong nor Hoi Nam had suggested that the defendant thought it necessary to seek the plaintiff’s approval when he dealt with the Painting. It could not be said that the judge is plainly wrong. I see no reason why it must be specifically put to Madam Wong and Hoi Nam that the defendant did not seek the plaintiff’s approval.

Ground (8): the judge erred in finding that the alleged loan was “incredible”

66.  The judge regarded the plaintiff’s allegation of a loan as “doubtful” and found it “incredible” that it was never repaid. She rejected the plaintiff’s explanation for non-payment (that the parties agreed the loan would be repaid when the defendant sold the Painting) as this does not sit well with the plaintiff’s case that the payment and the Painting were unrelated. She also found it difficult to accept that the parties would have resorted to such an arrangement, given the plaintiff’s evidence that the purpose of the loan was to alleviate a short-term liquidity and he had repaid all other relatives from whom he had borrowed money[61].

67.  Mr Chan’s challenge of the judge’s reasoning is quite hopeless. He is merely seeking to re-argue the plaintiff’s case instead of pointing out palpable errors of sufficient materiality to justify appellate intervention with the judge’s finding of primary fact.

Conclusion

68.  For the above reasons, none of the grounds of appeal are of merit. There is no basis to interfere with the findings of fact in the judgment. I have therefore dismissed the appeal with costs to the defendant.

Hon Yuen JA:

69.  I am in broad agreement with the reasons for judgment of Kwan VP. With respect, where I differ from her ladyship’s reasons is in relation to Ground (1) on the construction of the transcript of the defendant’s evidence (starting at p 122 F) in respect of his telephone conversation with the plaintiff on the morning of 21 November 2017 (“the Telephone Conversation”).

70.  Irrespective of where the transcriber inserted quotation marks in the transcript, it is in my view clear that the defendant’s oral evidence was that during the Telephone Conversation:

-  he said to the plaintiff that he had bought the Painting from him (p 122 G); he repeated this in his answers to the judge’s questions at the end of his evidence (p 136 C-E);

-  he did not say that it was he (the defendant) who had sold the Painting for $2.9 million (p 137 A); instead, he said that he had already sold it earlier to a Japanese person for 500,000 yen and HKD20,000 (p 137 D-E). This was the story that he continued to tell in the WhatsApp messages.

71.  The defendant explained that he did so because he did not wish his extended family to know about his windfall of more than $2 million, emphasising repeatedly that “財不可以露眼” (fortune should not be exposed to other people’s eyes) (p 136 Q-R and S-T).

72.  The judge had questioned him closely about this at the end of his oral evidence (p 136 G – p 138 J). The defendant said that he had a complicated family situation (he had divorced his wife, and her claim for ancillary relief was settled only a few years earlier, and he was not on good terms with his daughter). He did not regard himself as very rich, he wanted to buy a unit, and he did not wish his extended family to know how much money he had received from the auction. Although he had told his daughter (who had introduced him to a friend at Sotheby’s) not to tell anyone, he suspected (though he was not sure) that she had disclosed information to the plaintiff. The plaintiff was asking him for money, and although he was prepared to give him something on the pretext that he had sold the Painting for a few ten thousand dollars, the difference between the price at which the Painting was acquired and the auction price of more than $2 million was so large that anyone would have “hard feelings”. In this respect, of course the defendant would not have been legally obliged to give the plaintiff any money after a straightforward sale and purchase of the Painting, but the plaintiff was not an unrelated counterparty in an ordinary business transaction, but was his nephew who had spotted the Painting and acquired it from Nanjing in the first place.

73.  The judge was entitled on that evidence to find that the defendant’s explanation regarding the story in the WhatsApp messages was “inherently credible”. In my view, it is clear that the explanation is also consistent with the defendant’s evidence that during the Telephone Conversation, he had expressly referred to having bought the Painting from the plaintiff.

Hon Chow JA:

74.  I agree that the appeal should be dismissed with costs to the defendant.

75.  In relation to the issue of how the defendant’s evidence regarding his telephone conversation with the plaintiff on 21 November 2017, as recorded in the transcript, should be read or understood, I wish to briefly express my views as follows. This issue arises out of Mr Edward Chan, SC’s argument concerning the incredibility (or inconsistency) of the defendant’s explanation for his lies in the WhatsApp messages. According to the defendant, he had, prior to the WhatsApp messages, told the plaintiff on the telephone that he had purchased the Painting from him and paid for it by cheque and therefore had the right to sell it. He also said that he subsequently lied to the plaintiff in the WhatsApp messages by claiming that he had sold the Painting to a Japanese friend some 5 years ago for roughly HK$50,000, and was not responsible for the sale of the Painting through Sotheby’s for over HK$2.9 million in November 2017. The reason for the lies, according to the defendant, was to avoid hard feelings of the part of the plaintiff. Mr Chan argues that if the defendant had already said to the plaintiff that he had purchased the Painting from him and thus the Painting belonged to him, the subsequent lies would not be necessary, or would make no sense, because if “D had told the truth [ie the fact that he had brought the Painting from the plaintiff] shortly before the WhatsApp exchange, P already felt those hard feelings” (see §6(2) of the Plaintiff/Appellant’s Skeleton Submissions).

76.  It does not, I consider, matter much whether the words in quotation marks in the transcript relied upon by Mr Chan represented what the defendant actually said to the plaintiff over the telephone (to the best of his recollection), or represented only the thoughts that crossed his mind at the time and which he did not convey to the plaintiff, because I am unable to accept the logic of Mr Chan’s argument in the first place. From the defendant’s point of view, he had purchased the Painting from the plaintiff, and paid the purchase price to him, in around 2000. It was not a situation of the defendant telling the plaintiff something that he had not already known, or the plaintiff finding out for the first time the “truth” during the telephone conversation. Assuming that the transcript should be read in the manner as suggested by Mr Chan, it seems to me entirely plausible that the defendant would nevertheless have thought it better to hide from the plaintiff the fact that he had made a huge profit out of the purchase and sale of the Painting by making up a story that he had only made a small profit from selling it to a Japanese friend for about HK$50,000 some years ago (see p 123A-E of the transcript), in order to, in his words, avoid hard feelings on the part of the plaintiff (bearing in mind their relationship as uncle and nephew). The present factual argument advanced by Mr Chan may of course be deployed at the trial, but I do not consider it is an argument of such strength that should lead this Court to overturn a finding of primary fact by the trial judge.