WONG HONG GAY PATRICK JONATHAN v. SIEW YEW KHUEN

HCA 1946/2021

[2025] HKCFI 2585

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1946 OF 2021

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J U D G M E N T

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A. Introduction and Undisputed Background

1.  In this action, the Plaintiff (“P”)  claims that pursuant to a Loan Agreement dated 12 December 2016 (“the Loan Agreement”)  between him and the Defendant (“D”), he advanced HK$9M to D through Mr John Ho Kok Fi (“Ho”), D’s friend.  P claims that D failed to repay the HK$9M advanced and therefore seeks judgment against D for the principal of HK$9M together with interest at 48% per annum pursuant to the Loan Agreement.

2.  The background to the Loan Agreement was a project to list D’s company, TOMO Holdings Limited (“TOMO”), on the Growth Enterprise Market (“GEM”)  board of the Hong Kong Stock Exchange (“HKSE”).  It is not in dispute that P made substantial contribution towards the successful listing of TOMO on 13 July 2017 (“the Listing”).

3.  The fundflow between P and Ho during the material time, as evidenced by the contemporaneous documents, set out below is also not in dispute:

Date	Amount	Mode	From	To
21 December 2016	HK$4.5M	Bank transfer	P	Ho’s Credit Suisse bank account (“Ho’s CS Account”)
30 March 2017	HK$4.5M	Bank transfer	P	Ho’s CS Account
14 July 2017	HK$6.15M	Cheque	P	Ho’s DBS bank account (“Ho’s DBS Account”)
8 February 2018	HK$9M	Bank transfer	Ho’s CS Account	P
8 February 2018	HK$6.15M	Cheque	Ho’s DBS Account	P

4.  By D’s Notice of Admission filed pursuant to O.27, r.1 of the Rules of the High Court, Cap.4A on 18 December 2024 (“NOA”)[1], it is now undisputed that:

(1)  The Loan Agreement, including Appendix 1 of the Loan Agreement (“Notice of Drawing”), were signed by D;

(2)  Pursuant to the Loan Agreement, the first advance of HK$4.5M was made by P to D via Ho on 21 December 2016 (“the 1^st Advance”);

(3)  Pursuant to the Loan Agreement, the second advance of HK$4.5M was made by P to D via Ho on 30 March 2017 (“the 2^nd Advance”);

(4)  Without prejudice to D’s pleaded case that he had made repayment to P in full on 8 and 9 February 2018, D is liable to the repay the 1^st Advance and 2^nd Advance to P with interest in accordance with the terms of the Loan Agreement; and

(5)  The validity and enforceability of the Loan Agreement are not affected by the Money Lenders Ordinance, Cap.163 (“MLO”).

5.  By the NOA, D no longer maintained his pleaded case that:

(1)  He did not sign the Loan Agreement on 12 December 2016 but had only signed a draft loan agreement consisting of about one to two pages (excluding the signing page)[2];

(2)  He did not sign the Notice of Drawing[3];

(3)  The 1^st Advance and the 2^nd Advance were made on P’s own accord and not pursuant to prior request to P by him and thus he did not draw down on any loan[4];

(4)  As he did not sign the Loan Agreement nor draw down any loan pursuant to the Loan Agreement, he is not bound by the Loan Agreement[5]; and

(5)  The effective interest rate exceeding 48% per annum under the Loan Agreement is extortionate and liable to be re-opened under MLO[6].

6.  For the avoidance of doubt, the undisputed background and admitted facts should be taken to form part of my finding of facts.

7.  What remained in dispute by the time of the trial of this action, and required the determination of this Court (“the Factual Issue”), is the nature of the HK$9M payment transferred by bank transfer by Ho to P on 8 February 2018 (“the HK$9M Payment”)  and the HK$6.15M payment by cheque made by Ho to P on 8 February 2018 (“the HK$6.15M Payment”).

8.  D’s case is that the HK$9M Payment was for repayment of the HK$9M principal whereas the HK$6.15M Payment was for: (1)  repayment of the 48% per annum interest accrued on the HK$9M in the sum of HK$4,514,082.19; plus (2)  the excess sum of HK$1,835,917.81 (“the Excess Sum”).  Hence, D’s case is that he has fully repaid the principal of HK$9M together with the accrued interest.  D counterclaims for the Excess Sum.

9.  On the other hand, P’s case is that neither the HK$9M Payment nor the HK$6.15M Payment had anything to do with the Loan Agreement.  Rather, the HK$9M Payment was remuneration for P’s assistance in respect of the Listing as orally agreed between P and D in around October 2016 (“the Oral Agreement”).  As for the HK$6.15M Payment, this was the return by Ho to P for the sum of HK$6.15M which was transferred by P to Ho on 14 July 2017 in respect of their agreement to invest in the share of TOMO on P’s behalf (“Joint Investment Agreement”).

10.  At the trial of this action, P was represented by Mr Victor Dawes SC leading Mr Sik Chee Ching and D was represented by Mr Christopher Chain SC leading Mr Charlie Liu.  I am grateful to counsel for their assistance throughout the trial.

B.  Applicable Principles

11.  Counsel for both parties agreed that the determination of the Factual Issue turned on this court’s assessment of the credibility of the witnesses.

12.  Both sides’ witnesses have presented conflicting versions of events and I was invited to find which version of events was more probable and credible. In carrying out this task, I shall adopt the helpful approach set out in Hu Lan v David Golden [2023] HKCFI 873 by Deputy High Court Judge H Au-Yeung (as he then was)  at §36:

“ When I consider the credibility of various witnesses who had given evidence in court, I shall take into the following matters into account:

(1)  Generally speaking, contemporaneous written documents and documents which came into existence before the problems in question emerged are of the greatest importance in assessing credibility;

(2)  Importance should be attached to the inherent likelihood or unlikelihood of an event having happened, or the apparent logic of events;

(3)  The court will also attach importance to the consistency of the witness’ evidence with undisputed or indisputable evidence, and the internal consistency of the witness’ evidence. The latter type of consistency is often tested by a comparison between the witness’ oral testimony and his or her witness statement;

(4)  The court should consider a witness’ motive for deliberately not giving truthful testimony. For example, telling the truth may prejudice his interest, or a just determination of the litigation may affect his interest;

(5)  It is essential to have regard to the entirety of a witness’ evidence. A witness can make mistakes, but the mistakes do not necessarily affect other parts of his evidence. Likewise, a witness may lie. However, lies themselves do not mean necessarily that the entirety of that witness’ evidence is to be rejected. A witness may lie in a stupid attempt to bolster his case, but the actual case nevertheless remains good irrespective of the lie;

(6)  On the other hand, where it is shown that a witness has been discredited over one or more matters to which he has testified, this fact is relevant to the assessment of his overall credibility;

(7)  While the court is entitled to take demeanour into account when assessing testimony, it should be borne in mind that demeanour can be deceptive and is therefore to be approached with care.”

13.  Furthermore, the following quotation taken from Lord Bingham’s book, The Business of Judging, cited in Fung Sau Mui Janne v Fung Wing Tong [2018] HKCFI 2247 at §13 by Deputy High Court Judge William Wong SC is instructive on the resolution of a conflict of evidence between witnesses:

“ Let me then turn to the central questions. Faced with a conflict of evidence on an issue substantially effecting the outcome of an action, often knowing that a decision this way or that will have momentous consequences on the parties’ lives or fortune, how can and should the judge set about his task of resolving it? How is he to resolve which witness is honest and which dishonest, which reliable and which unreliable? How, as between competing experts in a field not his own, is a judge to determine where the truth lies? Is our existing way of resolving expert conflicts the best way? I shall begin by considering the resolution of issues of primary fact, the choice between first-hand eye-witnesses. Then I shall turn to expert evidence.

  The normal first step in resolving issues of primary fact is, I feel sure, to add to what is common ground between the parties (which the pleadings in the action should have identified, but often do not)  such facts as shown to be incontrovertible. In many cases, letter or minutes written well before there was any breath of dispute between the parties may throw a very clear light on their knowledge and intentions at a particular time ….

  The most compendious statement known to me of the judicial process involved in assessing the credibility of an oral witness is to be found in the dissenting speech of Lord Pearce in the House of Lords in Onassis v Vergottis.  In this he touches on so many of the matters which I wish to mention that I may perhaps be forgiven for citing the relevant passage in full:

‘ Credibility’ involves wider problems than mere ‘demeanour’ which is mostly concerned with whether the witness appears to be telling the truth as he now believes it to be. Credibility covers the following problems.  First, is the witness a truthful or untruthful person?  Secondly, is he, though a truthful person, telling something less than the truth on this issue, or, though an untruthful person, telling the truth on this issue?  Thirdly, though he is a truthful person telling the truth as he sees it, did he register the intentions of the conversation correctly and, if so, has his memory correctly retained them? Also, has his recollection even subsequently altered by unconscious bias or wishful thinking or by over-much discussion of it with others? Witnesses, especially those who are emotional, who think that they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist.  It is a truism, often used in accident cases, that with every day that passes the memory becomes fainter and the imagination becomes more active.  For that reason a witness, however honest, rarely persuades a Judge that his present recollection is preferable to that which was taken down in writing immediately after the accident occurred.  Therefore, contemporary documents are always of the utmost importance.  And lastly, although the honest witness believes he heard or saw this or that, is it so improbable that it is on balance more likely that he was mistaken?  On this point it is essential that the balance of probability is put correctly into the scales in weighing the credibility of a witness.  And motive is one aspect of probability. All these problems compendiously are entailed when a Judge assesses the credibility of a witness; they are all part of one judicial process.  And in the process contemporary documents and admitted or incontrovertible facts and probabilities must play their proper part.’

  Every judge is familiar with cases in which the conflict between the accounts of different witnesses is so gross as to be inexplicable save on the basis that one or some of the witnesses are deliberately giving evidence which they know to be untrue.  There are, no doubt, witnesses who follow the guidance of the Good Soldier Sveyk that ‘The main thing is always to say in court what isn’t true,’ as a matter of principle, but more often dishonest evidence is likely to be prompted by the hope of gain, the desire to avert blame or criticism, or misplaced loyalty to one or other of the parties.  The main tests needed to determine whether a witness is lying or not are, I think, the following, although their relative importance will vary widely from case to case:

(1)  the consistency of the witness’s evidence with what is agreed, or clearly shown by other evidence, to have occurred;

(2)  the internal consistency of the witness’s evidence;

(3)  consistency with what the witness has said or deposed on other occasions;

(4)  the credit of the witness in relation to matters not germane to the litigation;

(5)  the demeanour of the witness.

  The first three of these tests may in general be regarded as giving a useful pointer to where the truth lies.  If a witness’s evidence conflicts with what is clearly shown to have occurred, or is internally self-contradictory, or conflicts with what the witness has previously said, it may usually be regarded as suspect.   It may only be unreliable, and not dishonest, but the nature of the case may effectively rule out that possibility.”

14.  I also remind myself of the court’s approach in making findings of facts when faced with two conflicting versions of events as set out by Poon J (as he then was)  in Big Island Construction (HK)  Limited v Wu Yi Development Company Limited & Anor (unrep)  HCA 1957/2005, HCA 714/2007, HCA 886/2007 & HCA 1364/2008, 28 July 2011 at §§16-21:

“ 16. The court decides a fact in issue on the balance of probabilities. The occurrence of the fact in issue must be proved to have been more probable than not. The burden of proof rests with the party who substantially asserts the affirmative of the issue: Phipson on Evidence, 17^th Edition, para.6-06 at p.151. If he fails to discharge the burden, then the fact is treated as not having happened. As Lord Hoffmann explained in In re B (Children), supra, at para.2:

‘ If a legal rule requires a fact to be proved (a ‘fact in issue’), a judge or jury must decide whether or not it happened. There is no room for a finding that it might have happened. The law operates a binary system in which the only values are zero and one. The fact either happened or it did not. If the tribunal is left in doubt, the doubt is resolved by a rule that one party or the other carries the burden of proof. If the party who bears the burden of proof fails to discharge it, a value of zero is returned and the fact is treated as not having happened. If he does discharge it, a value of one is returned and the fact is treated as having happened.’

17. The task of making a finding when faced with two sharply conflicting versions of events is sometimes a difficult one.  The court must still perform it without prejudice and preconceived ideas to its best ability.  In In re B (Children), supra, Baroness Hale exhorted judges in these terms:

‘ 32. In our legal system, if a judge finds it more likely than not that something did take place, then it is treated as having taken place. If he finds it more likely than not that it did not take place, then it is treated as not having taken place. He is not allowed to sit on the fence. He has to find for one side or the other. Sometimes the burden of proof will come to his rescue: the party with the burden of showing that something took place will not have satisfied him that it did. But generally speaking a judge is able to make up his mind where the truth lies without needing to rely upon the burden of proof.’[Emphasis supplied]

18. As Baroness Hale observed, in most of the cases, the court will be able to decide which of the two conflicting versions is probable and which is improbable and make a finding on the fact in issue accordingly.

19. If one version is found to be improbable, it does not necessarily lead to the acceptance of the other when, owing to the unsatisfactory state of the evidence, the court is not satisfied that the latter is probable.  There are judicial utterances to the effect that in such scenario, the judge would be forced to say “I just do not know” on which side of the line the decision ought to be drawn.  However, such judicial utterances should not be understood to mean that the court will or should shy from making a finding.  What the court will do is to resort to deciding the matter on the burden of proof: The Popi M, supra, per Lord Brandon at p.956A; see also Yau Wah Yau v Commissioner of Inland Revenue, supra, per Tang JA (as he then was)  at paras.42 to 46.  Applying In re B (Children), supra, the court will treat the matter of which the party carrying the burden of proof but failing to discharge it, as having not taken place.

20. If neither version is improbable, rejection of one may justifiably lead to the acceptance of the other: Datec Electronics Holdings Ltd and others v UPS Ltd, supra, per Richards LJ at para.83 (upheld on appeal); Ide v ATB Sales Ltd, supra, per Thomas LJ at para.6.

21. Finally, a good dose of common sense is required when the court evaluates the evidence in determining the probability or otherwise of the conflicting versions of events.”

C.  The Witnesses and their Overall Credibility

15.  The following were adopted as the respective evidence in chief of the witnesses called to give evidence at the trial of this action:

(1)  Witness Statement of P[7] (“P’s 1^st WS”), Supplemental Witness Statement of P[8] (“P’s 2^nd WS”)  and Affidavit of P[9] (“P’s Aff”);

(2)  Witness Statement of Ko Wai Lun, Warren (“Ko”)[10] (“Ko’s 1^st WS”)  and Supplemental Witness Statement of Ko[11] (“Ko’s 2^nd WS”);

(3)  Witness Statement of Leung Chi Hang Benson (“Benson”)  [12] (“Benson’s 1^st WS”)  and Supplemental Witness Statement of Benson[13] (“Benson’s 2^nd WS”);

(4)  Witness Statement of D[14] (“D’s 1^st WS”); Second Witness Statement of D[15] (“D’s 2^nd WS”); and Third Witness Statement of D[16] (“D’s 3^rd WS”); and

(5)  Witness Statement of Ho[17] (“Ho’s 1^st WS”)  and Second Witness Statement of Ho[18] (“Ho’s 2^nd WS”).

16.  From the authorities cited in the previous section, testing the evidence of the witnesses against what is clearly admitted or shown by contemporaneous documents to have occurred, and the internal consistency of the witness’ evidence, are important factors to determine the credibility of the witnesses.

17.  Having had the opportunity to observe the oral testimony of the witnesses (the most salient witnesses were of course P, D and Ho), it is clear to me that D’s and Ho’s evidence were inconsistent and incoherent with D’s pleaded case and the matters which are now undisputed, which undermined their credibility and reliability.

18.  Despite the NOA, in the witness box, D and Ho continued to maintain D’s factual case that D did not sign the Loan Agreement and the Notice of Drawing because D and TOMO did not need and did not use any loan to pay for the listing expenses.

19.  D’s evidence was that he did not have any immediate need to borrow funds from anyone to pay for the listing expenses of the Listing[19] (which P accepts was about HK$22.593M[20]). TOMO had maintained a cash balance in its accounts totaling S$4.9M to 7.1M.[21]  Furthermore, he and his wife co-owned 9 properties in Singapore and Malaysia (the total valuation of which as at December 2016 were approximately S$10M to 12M).[22]  In cross-examination, P accepted that from the balance sheet of TOMO, one can see that as at 31 December 2016, TOMO had zero bank borrowings, cash of about S$5.2M which would have been sufficient to pay for the Listing expenses.[23]  He also agreed that looking at the bank accounts of TOMO in around April 2017, the balance was much greater than the remaining listing expenses to be paid in May 2017, and that TOMO did not need to use his loan.[24]  However, D having admitted that he did sign the Loan Agreement and the Notice of Drawing, it is neither here nor there that TOMO and/or D had sufficient cash to pay for the listing expenses and ultimately did not use the loan advanced by P.

20.  Towards the end of November 2016 and before the “kick-off” meeting for the Listing held on 28 November 2016, according to P, during the conversations and physical meetings held, D requested and P confirmed again his agreement to advance a loan up to HK$12M to D.  Again, D denied that he made such requests.

21.  However, D’s evidence that he did not request any loan and that, whilst he was sent the emails circulating the draft loan agreement, he never read and opened the attachments, does not sit comfortably with the contemporaneous documents and his eventual admission that he had signed the Loan Agreement and Notice of Drawing.

22.  Firstly, it is not disputed that P had instructed Ko to draft a loan agreement in early December 2016.  A draft loan agreement from Ko was forwarded to D and Ho by email on 7 December 2016[25]. The draft contained D’s personal details such as his passport number which could only have been provided by D.  The fact that a draft loan agreement was professionally prepared by TOMO’s legal advisors and personal details given by D is contrary to D’s evidence that TOMO did not need and did not request a loan from P in connection with the Listing case.

23.  Secondly, Ko’s email with a revised loan agreement was forwarded by P to D, copied to Ho, on 8 December 2016.[26] That email stated: “This should address Lai Fong’s concern; let’s print it out and I can walk you through when we meet.  Once the loan is signed I am obligated to disburse the funds and therefore you can take comfort to sign the mandates so all parties can take comfort that you will pay.  That is how it works…”.  Evidently, and D agreed in cross-examination, as Lai Fong (D’s wife)  was never involved in any loan discussion between P and D, any concerns must have been relayed by D.[27]  By commenting on the draft agreement, it is contrary to D’s evidence that all along he was never interested in the loan from P and never opened the email attachments.  The discomfort with the loan agreement, purportedly by D’s wife, was apparently the concern that if TOMO was not successfully listed the loan should not be repaid.  This kind of details must have required a prior reading by D of the first draft circulated.  The draft was circulated to D and Ho, and subsequently the comments he (or his wife)  had were taken into account in the revised drafts circulated to D and Ho.  His evidence that he did not read or open the attachment to the email but nonetheless replied, “Got it, thanks”, as a matter of courtesy, is incredible.  The email is also consistent with the Loan Agreement being taken out for payment of the listing expenses for giving comfort to the professional parties that there were funds for payment of their fees.

24.  Thirdly, D has now admitted that he signed the Loan Agreement and Notice of Drawing.  However prior to that, he went to great lengths to find hand handwriting experts to support his allegation that he did not sign the same[28], which essentially is making a serious allegation of forgery.  Yet D still maintained at trial that he remembers clearly only signing once a two-page or three-page loan agreement.[29] Although at one point he came up with a suggestion, for the first time in the witness box, that the 2 pages may actually have been part of the Loan Agreement, being the last two page of the Loan Agreement[30], but that cannot be right because he still maintained he only signed once.  Furthermore, his evidence was that he distinctly remembered that the 48% interest rate appeared on the front page of the document[31].  The two pages document he saw could not have been the two signing pages.  The shift of his evidence plainly is a matter which goes against his credibility.  Furthermore, D admitted that his evidence that he did not sign the Loan Agreement and Notice of Drawing simply cannot square with his admissions in the NOA.[32]

25.  Ho similarly maintained that he recalled clearly that he saw D sign a two page document and not the Loan Agreement.  This evidence is now plainly contradicted by the NOA and D’s admission that his recollection was mistaken. His sticking to D’s factual case, despite not being able to explain how his evidence can square with D’s admissions, demonstrates that he is willing to put forward untrue evidence in support of his long time friend.

26.  When ultimately, it is accepted that D had signed the Loan Agreement and the Notice of Drawing, and there was never any basis to allege forgery, the fact that a core part of D’s case, maintained in their evidence, has been discredited, undermines the overall credit worthiness of both D and Ho.

27.  Furthermore, even if D was genuinely mistaken on his recollection as to whether or not he had signed the Loan Agreement and Notice of Drawing, at the very least he must accept that his evidence on this important aspect of the case is unreliable.  Whilst I accept that a witness may make a mistake which does not necessarily affect other parts of his evidence, this is unfortunately not such a case.  In the present case, the domino effect of his mistaken belief as to whether he signed the Loan Agreement and Notice of Drawing impacted on the veracity of a great deal of his other evidence (as will be further discussed below). Regrettably, I find that both D’ and Ho’s evidence cannot be relied upon.

28.  On the other hand, P’s evidence was not hugely shaken notwithstanding the skillful cross-examination of Mr Chain, and was generally consistent with his pleaded case, witness statements and the contemporaneous documents.   Overall, I find that his evidence is credible and reliable.  In the case of any conflict between their respective evidence, I would prefer P’s over D’s and Ho’s.

29.  I shall discuss in greater details my assessment of the respective evidence of the witnesses in the following section.

D.  Analysis of the Evidence and My Findings

30.  It is not disputed that there was a first introductory meeting sometime in October or November 2016, at D’s office in Singapore, attended by P, Mr Teo (who introduced P and D to each other), D and Ho.  At this meeting, the parties discussed the proposed listing of TOMO on HKSE.[33]

31.  P claimed to have extensive experience and contacts in respect of listing companies on HKSE whereas D did not have such experience.  D admitted that he was not familiar with the listing process and he thought that he could rely on P’s experience and contacts for the initial public offerings in Hong Kong.[34]

32.  P’s evidence is that after discussion at that initial meeting, it was orally agreed between him and D that: (a)  he would provide assistance on all aspects of the Listing as a co-ordinator and assistant to D; and (b)  upon the successful completion of the Listing, D would pay a remuneration, the amount of which would equal to approximately 38% of the total proceeds of the sale of D’s share in TOMO upon and after the Listing (“the Oral Agreement”).[35]

33.  It is not in dispute that ultimately D sold all his shares in TOMO in two lots:

(1)  In late January 2018, D sold 23.89% of his shares in TOMO at HK$86M; and

(2)  In June 2021, D sold 51.11% of his shares in TOMO at HK$133M.

34.  During cross-examination, when asked by Mr Chain, P explained that the proceeds of the sale of D’s share in TOMO upon the Listing meant that he was entitled to 38% of the proceeds from the public float of HK$82M, i.e. HK$31.16M[36]. Whilst Mr Chain suggested to P that, as he had never mentioned this claim and no such figure was ever given in his witness statements, it was only first put forward in the witness box, P maintained in P’s 1^st WS he mentioned the Oral Agreement relates to the sale upon and after the Listing.[37]  As for the figure not being mentioned, he explained that it was because in this action he was not claiming under the Oral Agreement but only under the Loan Agreement.[38]

35.  As this action does not concern any claim under the Oral Agreement, I accept the fact that he has not mentioned the details of his entire entitlements under the Oral Agreement in his witness statements is not a matter from which I should find that P’s evidence should be treated with skepticism. Mr Chain relied on the observations of DHCJ Winnie Tsui (as she then was)  in Li Jian Chao v TC Orient Lighting Holdings Limited [2022] HKCFI 2324 at §§88-89, to the effect that if a witness makes a new allegation or provides an account of events at trial on an issue which has long been disputed between the parties, the court is almost bound to treat the new allegation or account with some degree of skepticism.  However, it is clear that that is the case where the new allegation or account concerned material issues in dispute.  Where P does not seek enforcement of the Oral Agreement in this action, and the Oral Agreement was raised in answer to D’s defence that he has repaid the HK$9M advanced by P to D, in the context that prior to the NOA, D was disputing that he had even signed the Loan Agreement and drawn down the loan, the observations of Recorder Eva Sit SC in Sky King Machinery Engineering Limited v China Harbor Engineering Company Limited [2023] HKCFI 1516 at §50 is more apt:

“ Mr Liao criticized TP Wong’s testimony as unreliable on the basis that TP Wong only mentioned (i)  he had attended meetings with Hau of Gammon before the Plaintiff formally submitted a bid, and (ii)  Gammon having supplied TKO137 plans to him which he used to prepare Hand Drawn Plans A and D in the course of cross-examination. I do not accept this. These are matters of fine details of a nature that one would not expect them to be included in the witness statement, and would only be ‘teased out’ in cross-examination when the witness was asked to recall matters which were on their face not material such that the witness could be expected to focus his mind on when preparing his witness statement …”

36.  On the other hand, turning to D’s evidence, he maintained that there was never any agreement to provide any remuneration to P for his assistance and advice in relation to the Listing.  At most, he accepted that there was a discussion at that first meeting, which did not result in any agreement or consensus, of a funding offer (“the Funding Offer”)  whereby P proposed:

(1)  P would advance HK$12M which could be used for settling the Listing expenses and would not be subject to any interest;

(2)  However, in the event that P’s funds were used, P would be entitled to 38% of the proceeds of sale of D’s shares in TOMO if he managed to find a buyer for his shares for HK$300M, plus net asset value of its assets, within a year of the Listing;

(3)  D would be guaranteed a sum of HK$168M for the disposal of his shares in TOMO based on the minimum sale price of HK$300M;

(4)  In the event that more than HK$300M proceeds were realized, D would be entitled to 56% of the excess consideration, plus the aforesaid guaranteed sum of HK$168M and P would be entitled to the remaining 44%;

(5)  In addition, D would be reimbursed the Listing expenses which were expected to be around HK$25M at that time; and

(6)  If D did not use P’s funds, P would not be entitled to any reward.[39]

37.  Given the undisputed background and evidence of the independent witnesses, I find it inherently incredible that no agreement was reached to remunerate P for his significant role in the listing of TOMO and valuable assistance to D, whom prior to this meeting was a complete stranger to him.

38.  P’s role in the Listing, and the assistance provided to D, was confirmed by Benson and Ko, independent third party professionals who have no stake in these proceedings or motive to lie.  Indeed, their evidence was accepted by D[40].  I find that they were credible and reliable witnesses.  I would accept their evidence in full.

39.  They both confirmed that P told them that he would be providing assistance on all aspects of the Listing as a co-ordinator and assistant to D, he was helping introduce D to other professional teams for the purpose of the listing and throughout the listing process, P attended almost all or many of the meetings.[41]

40.  According to Ko (a partner of Messrs Robertson), P was the one driving the entire Listing exercise on behalf of D and TOMO.[42]

41.  According to Benson (a partner of PricewaterhouseCoopers), P was a key person coordinating the preparation of the Listing with the professional parties.[43]

42.  Furthermore, at the listing banquet of TOMO held on 13 July 2017, their evidence was that in D’s speech, he thanked P for his efforts which led to the success of the Listing.[44]

43.  Even D himself acknowledged that P did assist with and provide value to the Listing in acting as an “overall organizer” and “networking hub” and that this was an important contribution.[45] In cross-examination, he accepted that P played an “instrumental” role in the Listing.[46]  D accepted that it was P who put the right people to sit on the Board of Directors, helped review the listing prospectus, decided the colour of the prospectus, arranged the training for the directors and kept an eye on the payment of expenses for listing.[47]  I cannot accept Mr Chain’s submissions that HK$4.3M, the 48% interest on the HK$9M principal, was already a substantial level of remuneration to P for his involvement in the Listing.

44.  In light of the circumstances of this case, I find that the existence of an agreement to remunerate P for his role in the listing process is inherently probable. Indeed, in Mr Chain’s closing submissions stated that he would not go as far to say P’s version of events is inherently improbable.[48]  He must accept therefore the Oral Agreement is inherently probable.

45.  Mr Chain, however, submitted that P’s case on the Oral Agreement does not stand up to scrutiny.

46.  Firstly, he submitted that it was inherently improbable that a contract attracting HK$114M was not put in writing and there is no written record of it.  P claimed that he was entitled to HK$31.16M in respect of the public float, HK$32.68M in respect of D’s sale of his shares in January 2018 and roughly HK$50M in respect of the sale in June 2021.  Mr Chain relied on the oft cited observation of DHCJ Jin Pao SC in Leung Chin Sing Rabo & Anor v Ko Chun Hay, Kelvin [2021] HKCFI 2242 at §42.  He submitted that it was just inexplicable that the agreement was not put in writing.

47.  However, P did explain why the Oral Agreement was not put in writing and signed.  His evidence was that it was D who did not want any agreement signed and that they consciously put effort not to talk about this in email or in WhatsApp. Mr Chain submitted that P himself admitted that he had never mentioned in his witness statements that it was D who did not want to have anything signed. Nonetheless, in P’s 1^st WS he did mention at the meeting on 12 December 2016, D raised that he did not want to have any direct fund flow with him and if he were to pay any remuneration pursuant to the Oral Agreement, he would not pay such remuneration directly but would make payment to him via Ho.[49]

48.  P’s evidence that D did not want to have any direct fund flow is consistent with the fact that there was never any direct fund flow between P and D even in respect of monies supposedly meant for D and was legitimately his money.  Ho, his personal friend whom has known D for over 20 years, testified that D was a very careful person.[50] It is also not disputed that P and D met in Singapore once a week or at least twice a month during the nine months leading up to the Listing so they had many opportunity to discuss matters in person and not leave a paper trial.

49.  Furthermore, P’s evidence was that as he had changed at least two Iphones since 2016 and he was not able to unlock the old phones, even though there might have been some conversations, he could not produce any text messages to support his case.

50.  In these circumstances, I do not find P’s explanation as to why there were no contemporaneous written record of the Oral Agreement incredible.

51.  Secondly, Mr Chain submitted that the alleged remuneration would be disproportionate having regard to the total listing expenses of HK$23.23M and that Messrs Robertsons earned approximately HK$4.55M[51]. However, as mentioned, from the undisputed evidence it was P who was running the entire show and was the co-ordinator of all the professional parties in the listing process.  Given his undisputed role and efforts, which were instrumental to the Listing, it is not unbelievable that he would be remunerated much more than any one professional party or all parties put together.  It is to be noted that without the successful Listing he would not be entitled to receive any remuneration whereas the professional fees would still have to be paid.  Whilst it is true that regardless, P would be entitled to the high interest for monies advanced pursuant to the Loan Agreement, in the circumstances of this case, the interest alone may not be commensurate to the undisputed efforts and part played by P in the Listing.

52.  Furthermore, on D’s case on the Funding Offer made by P, this figure of 38% of the total proceeds was mentioned and is consistent with the level of remuneration that P was expecting in return for his efforts towards the Listing.  Although D’s case is that, whilst discussed, there was no agreement on it and he did not accept the Funding Offer, ultimately he accepted that he received funding from P and he signed the Loan Agreement.

53.  Thirdly, Mr Chain submitted that if there was a genuine agreement for P’s remuneration, there is no reason why P would not have made any claim or given up such a substantial claim by letting it go time-barred.  However, I can see why, when the Loan Agreement had been signed but the Oral Agreement was not in writing, that P would choose to seek recovery of the HK$9M together with 48% interest by the present action.  I also can understand the rationality and commercial sense of his answer, and accept it as credible, when asked by Mr Chain why he gave up the remuneration claim:

“ If this is all I do every day, I would be pursuing it, which I did. I approached people to approach Mr Siew. I have approached Mr Siew. I’ve tried. But … he blocked me the moment he sold his 51 per cent. From that day he blocked me; there was nowhere I can find him. The only way I can reach out to me is through friends, common friends. If this was the only thing I do, I would dedicate my whole life to it, but in business, sometimes you make some, you lose some. I have made some and walked away from some. What’s wrong with that? I don’t want to come across like I’m a wealthy person. There are other things I’m doing. Now I’m focused on this action, on this loan agreement…”[52]

54.  Fourthly, Mr Chain submitted that the Oral Agreement is inherently vague and uncertain, and P did not evince the intention that he was bound by the Oral Agreement.

55.  Although Mr Chain complained that the Oral Agreement was unparticularised, even after particulars were requested[53], I do not regard that the Oral Agreement is vague and uncertain on the quantum of agreed remuneration. In any event, this is only one matter to consider on the question of inherent probabilities of its existence.  Furthermore, whether or not it is legally enforceable as an agreement by reason of the alleged vagueness or lack of intention to create legal relations is not a matter before me when this action is not concerned with the enforcement of the Oral Agreement.

56.  Lastly, Mr Chain also submitted that P’s case that the monies advanced pursuant to a loan agreement entered into between D and D’s wife and P’s company, Adsociety.Com Limited (“the Adsociety Loan Agreement[54]), were part of the remuneration payable by D to P pursuant to the Oral Agreement[55], should be rejected.  This he submitted impacted on the credibility of P’s evidence on the Oral Agreement.  Essentially, Mr Chain relied on: (1)  Ko’s evidence that the Adsociety Loan Agreement was drafted by him and he understood from both P and D that it was a genuine loan document[56]; (2)  there was no room for any collateral agreement not to enforce the terms of that agreement as there was an “entire agreement clause”[57]; and (3)  the email exchange of 9 February 2018 between P and D (copied to D’s wife and Ko)  where P wrote, “Thank you David and Lai Fong for making the loan to me.  I am grateful”, and D replied, “You are most welcome”[58].

57.  In cross-examination, P’s response was that Ko was not professionally engaged to draft the Adsociety Loan Agreement and did it as a favour to both of them.[59] He further responded by saying that a loan agreement was drafted to show the banks if questions were asked about the transaction or remittance.[60]  He further explained that he did not believe he and D paid close attention to the particulars of the Adsociety Loan Agreement and he did not understand the meaning of the entire agreement clause[61].  He also said that the email exchange on 9 February 2018 was for “humour” or internal joke between themselves[62].

58.  In my view, even if Ko was professionally instructed to draft a loan agreement (which Ko confirmed he did not charge anything for)  and he was never told it was not intended to be enforced, it does not mean that as between P and D there could not have been an understanding or agreement not to enforce the same.  The same would apply to the Adsociety Loan Agreement containing an entire agreement clause.  That clause would simply not be enforced on P’s case.

59.  I also do not accept Mr Chain’s submissions that as there were no other joking emails disclosed and the tone of the emails was serious, this contradicts P’s evidence that the email exchange was meant for “humour”.

60.  As for Mr Chain’s submissions that P’s evidence that the Adsociety Loan Agreement was only drafted to show the bank was not mentioned in his witness statements, again this is only a matter going to the details when this action is not concerned with the enforcement of the Adsociety Loan Agreement.  Indeed, this agreement was first raised by D to argue that if D owed any monies under the Loan Agreement, P would not have thanked him (and his wife)  for the loan requested by P.[63] As explained by P, in his witness statements there was no focus on the Adsociety Loan Agreement because that concerned his remuneration but in this action he was pursuing the Loan Agreement.[64]

61.  I also do not accept Mr Chain’s submissions that given D’s admitted unfamiliarity with listing in Hong Kong, it made no sense for D to disagree with P’s view that there should be no reason to avoid direct transfers. According to P, D believed that remunerating P on a percentage of the sale proceeds would have to be disclosed in the prospectus.[65]  Effectively, P was saying they had a difference of opinion but P respected and accepted D’s belief and there was no reason to argue about that.  I do not find this explanation incredible.

62.  Overall, testing P’s evidence of the Oral Agreement against the undisputed and indisputable background, its inherent probability, and Mr Chain not having demonstrated that P is not a credible witness, in all, I accept P’s evidence on the Oral Agreement.

63.  On the other hand, D’s case that there was no Oral Agreement or any agreement on P’s remuneration but the HK$9M was repayment of the principal is problematic.  Whilst prima facie the email from Ho to his banker on 8 February 2018, “As spoken this morning kindly remit 9M HKD to the following account as repayment of loan”, was a contemporaneous document which would support D’s case, this email was never sent to P.  It could not be the most direct evidence of what was the understanding between P and D over the HK$9M Payment.

64.  Furthermore, the veracity of Ho’s statement in that email to his banker that the HK$9M was for repayment of a loan is questionable, when Ho stood by his evidence in his witness statements that he distinctly remembers that D did not sign the Loan Agreement and Notice of Drawing but only signed a two page document, and that the 1^st Advance and 2^nd Advance were never drawn down by D.

65.  In any event, more weight should be given to D’s evidence as to what was discussed between him and P in respect of the HK$9M Payment.  His evidence was that there was a conversation on around 10 February 2018 when he made it clear to P that he had not drawn down on the Loan Agreement and the HK$9M was returned to him.[66] If that was true (i.e. in his mind there was never any draw down pursuant to the Loan Agreement), inherently, it could not have been intended nor could he have conveyed to P his intention that the HK$9M Payment was to repay the principal of HK$9M.  Furthermore, he would not have made the HK$6.15M Payment on the same day for payment of interest of a loan that he made clear he did not draw down.

66.  Moreover, when D’s evidence is assessed against the undisputed fact that he had signed the Loan Agreement and Notice of Drawing, it is not probable that he would have had that conversation with P.  Firstly, he would not have said to P that he did not draw down on the loan. Secondly, as at that point in time, the final repayment date for the 2^nd Advance had not been reached, D could not have intended to repay the principal and P would not have accepted the HK$9M Payment as repayment of the principal which would be early repayment.  According to the Loan Agreement, D as borrower shall repay the loan together with interest in full on the “Final Repayment Date” (which is defined in clause 1.1 as the date falling on the earlier of the expiry of 12 months from the date on which the Advance is made; or any other later date as may be determined by the Lender)  and D may not prepay all or part of the loan unless with the consent of the Lender.[67]  The Final Repayment Date in respect of the 2^nd Advance would be in March 2018.

67.  In terms of timing, given that D had successfully sold his 23.89% shares in late January 2018, the HK$9M Payment was more inherently consistent with it being part remuneration to P as agreed.

68.  On balance, I find P’s version of events more probable.  I find that on a balance of probabilities the HK$9M Payment had nothing to do with repayment of the Loan Agreement but was for remunerating P’s role in the Listing as agreed between P and D.

69.  Turning to the HK$6.15M Payment, given that the HK$9M Payment and HK$6.15M Payment were made on the same day, and D’s case was that they were repayment of principal and interest respectively, logically D’s case on the HK$6.15M Payment stands or falls together with the HK$9M Payment.

70.  In any event, it has to be recalled that D’s evidence on the HK$6.15M Payment had shifted in a material way.  The lack of internal consistency of his evidence and incoherency of his evidence, as explained below, cast doubt on his credibility.

71.  D’s initial pleaded case, for which he signed the Statement of Truth, was that he did not drawdown the loan under the Loan Agreement but to avoid any dispute whether there was a draw down, he asked Ho to calculate how much interest would be due had the loan been drawn down with an interest rate of 48% per annum.[68] Ho then informed him that the amount would be around HK$6.15M.[69]  He then later amended his pleadings to plea that the amount calculated by Ho was HK$4.3M and claimed that it was a mistake on his part.[70]

72.  However, given that D has admitted that he signed the Notice of Drawing, inherently, as mentioned above, the alleged conversation with Ho could not have happened.  He could not have made repayment of the principal and interest, “to avoid dispute on whether there was a draw down” as plainly D has signed the Notice of Drawing.  There can be no dispute on whether there was a draw down. Furthermore, he could not have asked Ho to calculate the interest “as if” the loan was drawn down.

73.  It is also incredible that if one genuinely did not believe one to be liable under the Loan Agreement for the 1^st Advance and 2^nd Advance, that would D have agreed to repayment with interest as if he was liable, particularly in view of the very high interest rate.

74.  Although D’s evidence in the witness box, was that he thought he would give P interest on the loan not drawn by him as a token of appreciation of P’s role in the listing[71], not only was this not his pleaded case, it seems to me to be a very convoluted way of paying P remuneration, which on D’s case, there was never any concluded agreement reached to pay P any remuneration.

75.  He could have simply done so by way of payment of a sum and not with reference to interest on a loan agreement, which he said he genuinely believed he had not signed and regarded the interest rate as extortionate.

76.  Besides, if, as his evidence was that he thought that he would give P HK$4.3M as remuneration, there is no reason why he should go about this by asking Ho to transfer HK$6.15M (an overpayment)  to P and leaving the difference to be worked out later by telling P that he will discuss it with him later.  He could have made payment for that exact amount by asking Ho to transfer that HK$4.3M to P and to transfer back the balance to him when according to him he believed the earnest money was rightfully belonging to him.[72]

77.  Whilst Ho’s evidence seems to provide some justification for the transfer of HK$6.15M, as being his idea since he was not comfortable with the earnest money sitting in his account, Ho’s evidence in this respect is also incredible and incoherent.

78.  In cross-examination, Ho said that he was uncomfortable with D’s request that the “earnest money” be paid to him even on day 1 but to help his friend D, he agreed.[73] Nonetheless, after having kept the money for around 7 months, his evidence that he proposed to D to transfer back to P the entire HK$6.15M because he was not comfortable with it[74] sounds rather hallow.

79.  D’s evidence, and similarly, Ho’s evidence, was that in about early July 2017, P had informed him over the phone that a potential buyer expressed keen interest in buying his shares in TOMO and was willing to pay a non-refundable “earnest money” upfront, in consideration of his giving first priority to the potential buyer in the event that he wished to sell his shares.  If the deal failed to materialize, the earnest money would not need to be returned[75].

80.  D himself recognized in his witness statement that the terms of the earnest money appeared “extraordinary” at the outset.  However, he thought that as there was strong demand from investors who wished to buy newly listed companies on the GEM board or main board, the non-refundable deposit would not matter too much to the desperate buyer.[76] I agree with Mr Dawes that this account of the earnest money seems too good to be true particularly when D himself admitted in cross-examination that there was never anything really special about TOMO and the offer was really quite amazing[77].  When D had no idea who this buyer was and the terms of the potential sale, D’s belief that the HK$6.15M was earnest money is difficult to believe.

81.  Whilst P’s case that HK6.15M Payment was returned by Ho to P in respect of the Joint Investment Agreement which not supported by any contemporaneous document, and there were inexplicable features such as why P could not have purchased TOMO shares himself and what Ho would get in return out of the Joint Investment Agreement, on balance, I am of the view that P’s evidence and explanation as to why he needed Ho to purchase the shares on his behalf is to be preferred over the case of D’s and Ho’s in case of any inconsistency.

82.  I therefore also find on a balance of probabilities that the HK$6.15M Payment was not related to the Loan Agreement.

83.  In any event, at the very least, I find that D has not satisfied his burden to demonstrate that he has repaid the 1^st Advance and the 2^nd Advance together with the interests accrued thereon under the Loan Agreement.

E.  Disposition and Orders

84.  Accordingly, I will enter judgment in favour of P against D and dismiss D’s counterclaim.

85.  Mr Chain did not dispute that notwithstanding the wording of clause 5.2 of the Loan Agreement[78], interest at 48% per annum is payable from the drawdown date of the advance up to the date of repayment of the principal.[79]

86.  I make an order nisi that D do pay to P the sum of HK$30,414,000 (being the outstanding sum up to the date of the Writ)  together with interest thereon at 48% per annum up to the date of this Judgment and thereafter at judgment rate until full payment.

87.  Costs should follow the event.  I make a costs order nisi that D shall pay to P the costs of this action (including any reserved costs)  with certificate for two counsel to be taxed, if not agreed.

88.  In the event that no application to vary is made within 14 days from the handing down of this Judgment, the abovementioned orders nisi shall become absolute.