LAM KIT LAN CYNTHIA AND LAM CHI WAI ADRIAN appointed by Order dated 12th April 2021 to represent the estate of Lam Hon Keung Keith, since deceased v. LAM CHI TAT ANTHONY AND OTHERS

HCA725/2015, HCA 726/2015, HCA 1230/2015, HCA 2426/2015,

HCA 2427/2015, HCA 2428/2015 and HCA 2550/2015

[2025] HKCFI 5484

HCA 725/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 725 OF 2015

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AND

HCA 726/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 726 OF 2015

________________________

________________________

AND

HCA 1230/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1230 OF 2015

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________________________

AND

HCA 2426/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2426 OF 2015

________________________

________________________

AND

HCA 2427/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2427 OF 2015

________________________

________________________

AND

HCA 2428/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2428 OF 2015

________________________

________________________

AND

HCA 2550/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2550 OF 2015

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________________________

(Heard Together)

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J U D G M E N T

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A.  Introduction

1.  By these 7 actions, the late Lam Hon Keung Keith (“Father”) seeks declarations that the shares in various companies under the name of his son Lam Chi Tat Anthony (“Anthony”), Anthony’s wife Cheng Shui Yee (“Cana”) and their corporate vehicles, and certain properties held by these companies, are held on trust for him.

2.  The shares were transferred or allotted to Anthony and Cana at different points of time, and for no consideration. The changes in the shareholding in the subject companies over the years and the existence of any related declaration of trust (“DOT”) are set out in the agreed table of shareholding of companies appended to this Judgment (“Shareholding Table”).

3.  Father’s case is that Anthony and Cana hold the shares on trust for him. In respect of the assets (whether properties or shares) held by the various companies, they were acquired with funds coming from Father and were not intended as gifts, and they are therefore held on trust for Father.

4.  Anthony and Cana contend that the shares are inter vivos gifts made by Father to them, and the claimed assets belong to the companies holding them.

5.  The ultimate question is a binary one: whether the claimed shares and assets are gifts, or trust properties. The resolution of this question turns on Father’s actual intention at the time of the transfers and allotments of the shares and acquisition of the assets held by the companies.

6.  Unfortunately, Father passed away in January 2021 before trial was originally scheduled to commence in June 2021. Two of his children, Lam Kit Lan Cynthia (“Cynthia”) (born out of his first marriage) and Lam Chi Wai Adrian (“Adrian”) (born out of his second marriage), carried on these proceedings on behalf of Father’s estate. The witness statements made by Father in the actions were admitted as hearsay evidence.

7.  At trial, Father was represented by Mr Anson Wong SC, leading Ms Tara Liao and Mr Keith Cheung. Anthony, Cana and their corporate vehicles were represented by Mr Keith Lam and Mr Alexander Burg. Through the usual industry of counsel (for which I express gratitude), comprehensive written opening, closing and reply submissions have been lodged, all buttressed by succinct oral submissions at the hearing. I also have had the benefit of a full transcript of the trial, the material parts of which have been extracted in the written submissions by counsel. It is not possible – nor do I find it necessary for the just and fair resolution of these actions – to deal with each and every argument raised by counsel and every point of disagreement. In this Judgment I shall set out what I consider to be the key issues in dispute.

B.  The Lam family

8.  Father is the eldest son of the late Lam Man Kit, founder of the law firm Messrs MK Lam & Co (“Firm”) in Hong Kong. He has been working in the Firm with the title of Legal Executive/Manager from the time Mr Lam Man Kit was principal and until around April 2015. He was also an experienced businessman, and a former member of the Legislative Council from 1984 to 1985.

9.  Father has three children out of his first marriage with the late Madam May Lam (“Madam Lam”): Lam Kit Lin Kathleen (“Kathleen”) (born in 1966), Cynthia (born in 1967) and Anthony (born in 1972).

10.  Madam Lam passed away in 1988. In 1992, Father married his second wife Chan Lai Kuen Lavien (“Lavien”). They have two children: Adrian (born in 1992) and Lam Chi Ho Andre (“Andre”) (born in 1997). In 2008, Lavien petitioned for divorce (“Divorce Proceedings”). In 2011, Father entered into a settlement with Lavien, resulting in a consent order dated 10 February 2011 (“HCMC Order”).

11.  Anthony and Cana are both solicitors in Hong Kong. At the time when these actions were commenced, they were partners of the Firm. They were married in 2004, and have four children.

12.  In one regard, the witnesses from the Lam family (Cynthia, Lavien, Anthony and Cana) spoke with one voice. Father harboured traditional Chinese values and regarded himself as the patriarch of the family. He expected to be obeyed by his family members (and they did) and would also take care of them. He was also a well-respected member of society. He was an experienced businessman, especially in real estate investment. He maintained full control over the income of his companies, and would make use of the income to make ad hoc provisions to his children and grandchildren.

C.  The parties’ rival cases

C.1  HCA 725/2015

13.  HCA 725/2015 concerns the shares in Tennyson Estate Limited (“TEL”). TEL is the registered owner of House A7 in Manly Villa on Ocean Park Road. It was also until 2011 the registered owner of House A5 in the same development.

14.  Houses A5 and A7 are 2 of the 8 houses built on land passed down by the late Mr Lam Man Kit to his 4 children, including Father. They were allotted to Father in 1983.

15.  TEL was incorporated in 1982. Its 2 subscriber shares were held on trust for Father, initially by 2 nominee companies, MK Lam (Nominees) Company Limited (“MKL Nominees”) and MK Lam (Agencies) Company Limited (“MKL Agencies”), and later by two employees of the Firm, Candy Ng (“Candy”)[1] and Annie Lau (“Annie”).[2] All of them were Father’s nominees.

16.  In 1993, TEL allotted 499 shares to each of Anthony and Lavien.

17.  In 2008, the 2 shares held on trust for Father were transferred to Anthony and Cana.

18.  In 2011, pursuant to the HCMC Order: (1) Lavien transferred her 499 shares to Anthony; and (2) House A5 was sold with the proceeds paid to Lavien. As from this time, Anthony and Cana held all the shares in TEL, which in turn held House A7.

19.  Father’s case is that:

(1)  He was all along the sole beneficial owner of TEL. The 1993 allotments were not paid for by Anthony and Lavien and were not intended as gifts. Their 998 shares are held on trust for Father.

(2)  When the 2 shares were transferred to Anthony and Cana in 2008, no consideration was paid and they were not intended as gifts. They are held on trust for Father.

(3)  When Lavien petitioned for divorce, Anthony advised Father to cause TEL to confirm that House A7 beneficially belonged to Anthony to avoid it being claimed by Lavien. This led TEL to pass a board resolution to this effect and was attached to the HCMC Order.

(4)  The transfer of the 499 shares by Lavien to Anthony in 2011 was not paid for by Anthony and not intended as gift. The 499 shares are held on trust for Father.

(5)  Father demanded Anthony and Cana to move out of House A7 in 2013, and claims rent or mesne profits for their occupation thereafter. Alternatively, he claims to enjoy a life interest to exclusively occupy House A7, and Anthony and Cana should pay for their occupation during Father’s lifetime. These claims were not pursued at trial.

20.  Anthony and Cana’s case is that:

(1)  It was all along Father’s intention that House A7 would be passed to Anthony as Father’s eldest son. After Father married Lavien and their son Adrian was born, he formed a similar intention to pass House A5 to them. The 1993 allotments were made to implement such intention, and they were intended to be gifts to Anthony and Lavien (who held them for Adrian).

(2)  Father, Anthony and Lavien agreed that Father would have the right to use the rental income derived from Houses A5 and A7 during his lifetime, and after his death, Anthony and Lavien (for Adrian and Andre) would have the right to exclusive possession and use of the rental income of House A7 and House A5 respectively. Such agreement was reflected in the board resolutions of TEL made in 1994, 1995 and 1997.

(3)  When the 2 shares were transferred to Anthony and Cana in 2008, Father intended that to be a gift because: (a) he was concerned that Lavien might petition for divorce and wanted to ensure that Anthony would be able to control TEL; and (b) he was extremely happy when Cana became pregnant with his first grandson (born later that year).

(4)  When Lavien petitioned for divorce, Father asked Anthony to seek legal advice on whether Anthony could claim a beneficial interest in House A7. Anthony obtained advice from a retired Justice of Appeal in 2008 (who advised that Anthony had a “cast iron case” to assert ownership over House A7) and a Senior Counsel in 2009 (who was less bullish and advised that Anthony may rely on constructive trust, but Father’s life interest “may pose a difficulty in [Anthony’s] case”, and in the meantime “House A7 belongs to Father”). Father was privy to the advice received by Anthony and was present at the conference with the Senior Counsel. Father did not tell the Senior Counsel that House A7 was trust property held for him, as he now claims in these actions.

(5)  Anthony denied that he held the 499 shares transferred from Lavien in 2011 upon the divorce settlement on trust for Father.

C.2  Other Actions

21.  The other actions are similar and can be dealt with together.

22.  In HCA 726/2015, Father claims to be the beneficial owner of the following assets:

(1)  1,000 shares in Silver Door Development Limited (“Silver Door”) (999 shares held by Anthony and then by Cana’s corporate vehicle Ample Island Investments Limited, and 1 share held by Cana), which were transferred to them in 2008;

(2)  180 shares in General Target Development Limited (“General Target”). Amongst them, 29 were allotted to Anthony in 1993, 120 were allotted to Cana in 2008 (and later transferred to her corporate vehicle Genius Villa Limited), 1 was transferred to Anthony in 2008, and 30 were initially allotted to Kathleen in 1992/1993 and then transferred to Anthony in 2009;

(3)  300 shares in New Alliance Development Limited (“New Alliance”) allotted to Silver Door in 1991 (not pursued at trial); and

(4)  General Target’s 12.5% interest in certain unsold property units in the basement of Manly Plaza in Quarry Bay, which was a joint development of General Target and New Alliance (not pursued at trial).

23.  In HCA 1230/2015, Father claims to be the beneficial owner of the following assets:

(1)  2 shares in Harvest Win Development Limited (“Harvest Win”) held by Anthony. Kathleen originally held 3 shares, 1 was transferred to her in 1993 and 2 were allotted to her in 2002. She executed a DOT in favour of Anthony for 1 share at the time of the 2002 allotment. She transferred 1 share to Cana in 2008, and the remaining 2 shares to Anthony in 2009; and

(2)  Office 9A of Gold Shine Towner in Sheung Wan (“Office 9A”) acquired by Harvest Win in 1994 (not pursued at trial).

24.  In HCA 2426/2015, Father claims to be the beneficial owner of the following assets:

(1)  720 shares in Dalny Estates Limited (“Dalny”) (240 shares held by Anthony, and 480 shares held by Cana’s corporate vehicle Genius Villa Limited). These shares came from an allotment of 30 shares to Anthony (and other family members) in 1988, another allotment of 69 shares to Anthony (and other family members) in 1994, a transfer of 20 shares from MKL Nominees to Anthony (and other family members) in 2003, a transfer of 1 share from Candy to Anthony in 2007, an allotment of 480 shares to Cana in 2008 (who then transferred to her corporate vehicle), and a transfer of 120 shares from Kathleen to Anthony in 2009; and

(2)  Basement Unit 130 in Manly Plaza (“Unit 130”) acquired by Dalny in 1994 (not pursued at trial).

25.  In HCA 2427/2015, Father claims to be the beneficial owner of the following assets:

(1)  200 shares in Elegant Fund Limited (“Elegant Fund”) now held by Anthony (100 shares) and Cana (100 shares). 1 share was transferred by Candy to Anthony in 1994, 98 shares were allotted to Anthony in 1994, 1 share was transferred by Lavien to Anthony in 2008,[3] and 100 shares were allotted to Cana in 2008; and

(2)  Basement Unit 127 in Manly Plaza (“Unit 127”) acquired by Elegant Fund in 1994 (not pursued at trial).

26.  In HCA 2428/2015, Father claims to be the beneficial owner of the following assets:

(1)  2 shares in Jollida Enterprises Limited (“Jollida”) now held by Cana (1 share) and her corporate vehicle Ample Island Investments Limited (1 share). 1 share was transferred by Candy to Anthony (and then to Cana’s corporate vehicle) in 2008, and 1 share was transferred by Annie to Cana in 2008; and

(2)  Basement Unit 221 in Manly Plaza (“Unit 221”) acquired by Jollida in 1994 (not pursued at trial).

27.  In HCA 2550/2015, Father claims to be the beneficial owner of the following assets:

(1)  2 shares in Gold & Silver Enterprises Company Limited (“Gold & Silver”) now held by Cana (1 share) and her corporate vehicle Virtual Garden Holdings Limited (1 share). 1 share was transferred by MKL Nominees to Anthony (and then to Cana’s corporate vehicle) in 2008, and 1 share was transferred by MKL Agencies to Cana in 2008;

(2)  Apartment A on First Level of Mount Chalet No.19 of the Sea Ranch on Lantau Island (“Sea Ranch Property”) (not pursued at trial);

(3)  Basement Unit 217 in Manly Plaza (“Unit 217”) acquired by Gold & Silver in 1994 (not pursued at trial); and

(4)  39 shares in Holiday Resorts Holding Limited (“Holiday Resorts”) acquired and subscribed for by Gold & Silver between 1998 and 2001 (not pursued at trial).

28.  In all of the above actions, Father’s case is that:

(1)  In respect of the shares in the various companies, the allotments and/or transfers were made to Father’s family members without consideration and were not intended as gifts, and they are thus held on trust for Father.

(2)  In respect of the assets (whether properties or shares) held by the various companies, they were acquired with funds coming from Father and not from the various legal owners, and were not intended as gifts, and they are thus held on trust for Father. These claims were not pursued at trial.

29.  Anthony and Cana deny that Father has any beneficial interest in the shares or assets claimed by him.

30.  In respect of the shares in the various companies, it is Anthony and Cana’s case that the allotments and transfers were made by Father to his family members as gifts. The reason for making such gifts were as follows:

(1)  The allotments and transfers from 1988 to early 1990s were made pursuant to Father’s promise (a) to Madam Lam to distribute assets to Kathleen, Cynthia and Anthony, and (b) later to Kathleen, Cynthia and Anthony if they agreed to attend his marriage ceremony with Lavien;

(2)  The 99 shares in Elegant Fund were transferred to Anthony in 1994 as a reward for him working towards becoming a lawyer and being admitted to the Postgraduate Certificate in Laws programme (“PCLL”) at the University of Hong Kong;

(3)  Some of the transfers to Anthony (20 shares in Dalny in 2003 from MKL Nominees, 1 share in Dalny in 2007 from Candy, 1 share in Harvest Win in 2008 from Kathleen, and 1 share in Elegant Fund in 2008 from Lavien) were made pursuant to the DOTs previously executed in favour of Anthony;

(4)  The allotments and transfers in 2008 were made because: (a) Father was concerned that Lavien might petition for divorce and wanted to divide his assets first to avoid argument amongst his two households; and (b) for the allotments to Cana, he was extremely happy when she became pregnant with his first grandson; and

(5)  For the shares transferred by Kathleen to Anthony in 2009 (30 shares in General Target, 2 shares in Harvest Win and 120 shares in Dalny), those shares belonged to Kathleen and were not held on trust for Father. The transfers were made because Kathleen was heavily in debt at that time, and Kathleen and Anthony agreed that her shares and assets should be transferred to Anthony.

31.  In respect of the assets (whether properties or shares) held by the various companies, it is Anthony and Cana’s case that the assets were intended to be held through the companies and thus intended to be legally and beneficially owned by them.

D.  Nature of the trust claimed by Father

32.  In opening, Mr Wong SC relied on both resulting trust and common intention constructive trust. Mr Lam argued that it is not open to Father to rely on common intention constructive trust because it was not pleaded. I should point out that Mr Wong SC was not the drafter of the pleadings.

33.  Mr Lam contended that common intention, detrimental reliance and unconscionability are the constituient elements of a claim of common intention constructive trust: Lui Xing Juan v Estate of Hui Shui See (2009) 12 HKCFAR 1 at [38].

34.  On common intention, Mr Wong SC relied on para 17 of the Re-Amended Statement of Claim in HCA 725/2015:

“[Anthony] represented to [Father] that he would continue to hold the shares in TEL in trust for [Father].”

35.  As Mr Lam pointed out, this paragraph referred to a promise allegedly made at the time of Father’s divorce settlement with Lavien in 2011, and could not affect the shares previously vested in 1993 and 2008. I also add that this did not plead a common intention shared between Father and Anthony, and in any event only related to the TEL shares.

36.  On detrimental reliance, Mr Wong SC relied on paras 15 and 19 of the Re-Amended Statement of Claim in HCA 725/2015:

“15. On the basis of such [Anthony]’s said advice,[4] [Father] agreed to (a) cause TEL to pass a board resolution dated 18^th January 2011 acknowledging that House A7 is beneficially owned by [Anthony] … and that House A5 be sold as soon as possible on the open market and the proceeds be dealt with as per the divorce settlement with Lavien; (b) enter into a divorce settlement with Lavien as stated in [the HCMC Order] …; (c) cause Lavien to transfer the 499 shares in TEL registered in her name to the [Anthony].

…

19. Since early 2013, [Father] had been in poor health and has incurred substantial medical fees. Despite repeated requests, [Anthony and Cana] [are] unwilling to assist [Father] with such medical fees and/or to pay rent in respect of their occupation of House A7. In March 2013, [Father] demanded [Anthony and Cana] to move out of the Defendants’ portion thereby terminating the gratuitous licence at will but [Anthony and Cana] have refused to vacate the Defendants’ portion and had since been, and still are, in wrongful occupation of the same and [Father] has thereby suffered loss and damage.”

37.  I agree with Mr Lam that neither paragraph pleads that the matters were done in reliance on any common intention or understanding. Also, the acknowledgment of Anthony’s title in House A7 (para 15), or Father not having money to pay for medical fees (at para 19), cannot qualify as the relevant detriment as it was not apparent how Father was placed in a worse position in reliance on any purported common intention or understanding.

38.  For the above reasons, it is not open to Father, on his pleaded case, to rely on common intention constructive trust.

E.  Ascertaining Father’s intention

39.  It is assumed that equity follows the law and that the beneficial interests reflect the legal interests in a property. The onus is on the person (here, Father) seeking to show that the beneficial ownership is different from the legal ownership and in what way, and this is not a task to be lightly embarked upon: Mok Hing Chung v Wong Kwong Yiu [2019] HKCA 452 at [21].

40.  Case authorities made reference to the rival presumptions of resulting trust and of advancement, and how they counteract against each other in different contexts. In my view, these two notions are commonsense guides to help the Court draw an inference on the actual intention of the transferor at the time of the transfer. They should not be applied as mechanical rules of law. Reliance on them should be the last resort, when either direct evidence on intention is absent, or there is no evidence from which an inference as to intention may properly be drawn, such that a default rule is needed: Big Island Construction (HK) Ltd v Wu Yi Development Co Ltd (2015) 18 HKCFAR 364 at [46]; Gany Holdings (PTC) SA v Khan (2018) 21 ITELR 310 at [17]. For reasons set out in this Judgment, I do not find it necessary to resort to either notions.

41.  In ascertaining the intention of the transferor, contemporaneous conduct is inherently more likely to be a reliable indicator, to be given greater weight, than words and conduct after the event, especially in the case of self-serving statements or conduct of the transferor, who may long after the transaction be regretting earlier generosity: Leung Wing Yi Asther v Kwok Yu Wah (2015) 18 HKCFAR 605 at [56]. The less proximate in time is the conduct or declaration subsequent to disposition of the property, the less is the weight to be attached to such evidence in gauging the intention of the transferor at the time of the transfer: Re Estate of Kan Kit Wan [2018] HKCFI 1949 at [65].

42.  If the transferor or transferee makes a declaration as to the beneficial interest, that will generally be decisive, regardless of the subjective intentions of either of them: Gany Holdings (supra) at [17]; Whitlock v Moree (2017) 20 ITELR 658 at [23].

F.  Weight on Father’s witness statements

43.  By the time of trial, Father has passed away and cannot be subject to cross-examination. Mr Lam submitted that the Court should not place any weight on Father’s witness statements insofar as they contain any evidence which is in dispute. He emphasized that an integral part of the litigation process is the ability to test a witness’s evidence by cross-examination. In the absence of cross-examination, the Court must be slow to accept an unsworn and untested account, otherwise it will be grossly unfair to the other side. This is especially when Father’s witness statements concern the central issues which are hotly disputed and turn heavily on credibility.

44.  Whilst no doubt I should be cautious in according weight to Father’s untested evidence on disputed items for the reasons advanced by Mr Lam, I disagree that such evidence should be ignored just because Father could not be cross-examined.

45.  As Mr Wong SC submitted, general caution in hearsay does not mean that there is a hard and fast rule that the Court should give no weight to hearsay evidence irrespective of the circumstances. What weight should be given to the evidence of a witness who could not be cross-examined because of his demise must be assessed on a case-by-case basis, and in the course of such consideration, the factors set out in section 49 of the Evidence Ordinance (Cap 8) must be taken into account: Shum Wing Lok v Shum Man [2022] HKCFI 2622 at [49].

46.  It is almost a truism that the Court should make a holistic assessment of all the evidence in the entirety in deciding which side of the story should be accepted. If Father’s account is supported by undisputed or indisputable objective evidence, or is inherently plausible or probable, and there is also good foundation to reject the rival account put forward by Anthony and Cana, there is no principled reason why the Court should not accept Father’s evidence. I should however exercise caution in preferring Father’s account and to compare Anthony and Cana’s case with an untested case.

G.  Approach to witness evidence

47.  In assessing credibility of witnesses and fact-finding, I adopt the approach set out by Coleman J in Delco Participation BV v HWH Holdings Limited [2025] HKCFI 4739 at [84]-[88]. In summary:

(1)  The modern approach focuses less on demeanor, and considerably more upon (a) the consistency of a witness’s evidence with contemporaneous written documents and documents which came into existence before the problems in question emerged, (b) consistency with undisputed or indisputable evidence, (c) the internal consistency of a witness’s evidence, and (d) comparative testing between a witness’s oral testimony and his witness statement. There can also be testing against what seem to be the inherent likelihoods and probabilities.

(2)  The fact that a particular aspect of a witness’s testimony is rejected as being dishonest or incredible does not in itself impugn the entirety of his evidence. This is simply a factor to be taken into account when assessing the reliability or credibility of other parts of his evidence.

(3)  The Court may draw adverse inference where a party without explanation fails to call as a witness a person who might reasonably be expected to give direct evidence on a particular matter in question. If the Court is willing to draw such inferences, they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call witness. However, there must be some evidence, however weak, adduced by the former on the matter in question before the Court is entitled to draw the desired inference. In other words, there must first be a case to answer on that issue.

(4)  There may be occasions where the truth runs against the grain having regard to all the facts that are known.

48.  There were 5 witnesses of fact at trial: Cynthia, Lavien, and Annie for Father, and Anthony and Cana.

49.  Mr Charles Lo (one of Father’s witnesses) and Mr Wong Siu Loong (one of Anthony and Cana’s witnesses) passed away before trial. Their witness statements were admitted as hearsay evidence. Nothing turned on their evidence.

50.  Kathleen was not called by Anthony and Cana to testify. They did not explain why. According to Cynthia, the relationship between Kathleen and Anthony broke down in 2020. At that time, Kathleen visited Father and she stayed at House A7. Anthony allegedly mis-treated her by cutting off her Wi-Fi connection and air-conditioning in her room in the basement. This forced her to leave House A7 and go to Canada.

51.  Mr Lam submitted that it was plain that the relationship breakdown was the reason why Kathleeen was not called, even though Anthony and Cana did not mention about the deteriorating relationship in their evidence. I do not believe I could arrive at such a conclusion when this was not the explanation (and there was in fact none) proffered by Anthony and Cana.

52.  Mr Wong SC asked me to draw adverse inference against Anthony and Cana on all disputed facts on which Kathleen’s evidence may shed light. I do not accept that this should be the course to take as a general proposition. As noted above, there is no presumption that an adverse inference is to be drawn whenever a witness is not called to give evidence. There must first be a case to answer before an inference can be drawn that the witness would not have assisted in answering the prima facie case. A party’s failure to call a witness cannot transform the opposing party’s unsatisfactory evidence into satisfactory evidence.

53.  For the reasons explained below, I do not think Kathleen’s absence would have a material bearing on the outcome of these actions.

H.  Father’s contradicting position in the Divorce Proceedings

H.1  Documents filed in the Divorce Proceedings

54.  As an overarching point, Mr Lam submitted that Father’s case is contradicted by his position in the Divorce Proceedings.

55.  Father was represented and advised by Messrs Chain, Chow & Barbara Hung (“CCBH”) in the Divorce Proceedings.

56.  In the Divorce Proceedings, Father was required to file a Form E (financial statement) to disclose his assets and liabilities. It was filed on 3 January 2009.

57.  The first page of the Form E contained a warning of perjury and other possible penal consequences for failing to provide a full and frank disclosure of all financial circumstances. On the last page of the Form E, Father made an affirmation before a solicitor in Hong Kong to confirm the information given in the Form E was a full, frank, clear, and accurate disclosure of his financial and other relevant circumstances.

58.  In his Form E, save for Harvest Win, Father did not include any of the companies that are subject to his claims in these actions as companies in which he held a beneficial interest.

59.  As regards Harvest Win, in the Form E:

(1)  Father asserted that he had a beneficial interest in the 5 shares transferred from him to Anthony in April 2008. But these 5 shares are not the subject of Father’s claims in these actions. His pleaded case in HCA 1230/2015 is that these 5 shares were subject to a DOT in favour of Lavien, Adrian and Andre. There is a competing version from Anthony – he produced a DOT which stated that the beneficiaries are himself and TEL. Parties agreed that I do not need to make a determination in this regard.

(2)  Father also did not assert any beneficial interest (as per the shareholding in January 2009) over the 2 shares held by Cana, the 2 shares held by Cynthia, or the 1 share held by Lavien. In HCA 1230/2015, he is claiming the 2 shares held by Kathleen (as of July 2008) which were transferred to Anthony in January 2009.

60.  In response to Lavien’s questionnaires regarding his Form E, Father maintained the above position. Indeed, he specifically confirmed that he had no beneficial interest in:

(1)  Silver Door (subject of HCA 726/2015);

(2)  New Alliance (subject of HCA 726/2015);

(3)  Dalny (subject of HCA 2426/2015) – specifically, he confirmed that the 480 shares allotted to Cana in 2008 were for the benefit of the (then) 3 children of Anthony and Cana;

(4)  Elegant Fund (subject of HCA 2427/2015) – specifically, he stated that Lavien’s 1 share was held on trust for Anthony under a DOT;

(5)  Jollida (subject of HCA 2428/2015) – he also confirmed that Anthony was the beneficial owner of the company; and

(6)  Gold & Silver (subject of HCA 2550/2015) – he also confirmed that Anthony was the beneficial owner of the company.

61.  As to Father’s claim of beneficial ownership of the properties held in the name of the various companies:

(1)  None was listed in the Form E as landed properties in which Father had a beneficial interest.

(2)  In response to Lavien’s questionnaires regarding his Form E, he specifically confirmed that he had no beneficial interest in: (a) the Sea Ranch Property (held by Gold & Silver); (b) Unit 130 (held by Dalny); (c) Unit 221 (held by Jollida); and (d) any shops or properties in Manly Plaza (other than Shop 272 which was not a subject of his claims). He also confirmed that he did not make any financial contribution to the acquisition of Office 9A (held by Harvest Win).

62.  Mr Lam submitted that the statements filed by Father in the Divorce Proceedings constituted admissions against his interest, and should accordingly be given considerable weight by the Court as compared to his witness statements filed in these proceedings: Li Man Wai v Ngan Suet Fong Bonnie [2021] HKCFI 931 at [15]. Further, the Form E is the most important and reliable contemporaneous documentary evidence on Father’s state of mind and intention. It was signed and sworn by Father in legal proceedings, with legal advice, under the warning of perjury and other penal consequences, and well before the disputes in the present proceedings arose. At the time when he signed off the Form E, he had no motive to confirm anything to suit his purposes in these actions: Fung Sau Mui Janne v Fung Wing Tong [2018] HKCFI 2247 at [35].

63.  I agree with Mr Lam. I cannot see how Father should be allowed to approbate and reprobate, i.e. by blowing hot in the Divorce Proceedings, and blowing cold in the present actions. At the very least, the inconsistency of positions adopted by Father across two sets of litigations would be a highly relevant and weighty factor when assessing Father’s credibility in the instant trial.

64.  Faced with his inconsistent position in the Divorce Proceedings, Father claimed that the information in the Form E was false and it was Anthony who advised him to provide the false information to avoid Lavien laying her hands in Father’s assets in the Divorce Proceedings. Father’s case is as follows:

(1)  The relationship between Father and Lavien turned sour by the end of 2007. It was clear to Father that Lavien was contemplating a divorce and one is ultimately inevitable.

(2)  Father was very much concerned about Lavien’s claims over his assets on divorce and wanted to keep as much of his assets from Lavien as possible.

(3)  Father discussed his concerns with Anthony and Cana and sought advice from them. As both of them were practising solicitors, he sought their advice on the position regarding his assets.

(4)  Anthony suggested that Father could make allotment and/or transfer of shares of his companies to him and Cana, so that he would not be shown on record to have any interest in any of such companies or properties held by them. They promised Father that those shares would be held on trust for him. When the time came that Father had to disclose his assets in the Divorce Proceedings, he then needed not disclose that he had interest in those companies and properties.

(5)  Father had full trust in Anthony and the propriety of his suggestion. As a result, in 2008, he caused the shares in a number of companies to be transferred and/or allotted to Anthony and Cana. He caused these transfers and allotments to be made specifically upon Anthony’s suggestion, not because Cana was going to give him a male grandson.

(6)  Also because of his trust in Anthony, Father signed various documents during that time as per the advice of Anthony, including his affirmations and court documents filed in the Divorce Proceedings. Anthony actively participated in the preparation of the drafts, and gave instructions on behalf of Father to CCHB.

65.  As Mr Lam submitted, Father’s case is tantamount to suggesting that he had perjured himself in the Divorce Proceedings, and that Anthony and Cana had advised or encouraged or knowingly participated in such fraudulent conduct. Father bears a heavy burden to show that his sworn statements in the Divorce Proceedings were false.

66.  Further, the allegations against Anthony and Cana – both being solicitors in Hong Kong – were serious as going against their honesty and integrity. Mr Wong SC further suggested that they were “manipulating and taking advantage of Father for personal benefits”. It would require cogent evidence in support.

67.  Mr Lam also stressed that Father was clearly a sophisticated person. He was an experienced businessman and a former member of the Legislative Council. Lavien described him as “a very savvy person”. It was incredible for him to do whatever Anthony suggested and would be easily manipulated into making false statements on oath.

68.  In addition, Father had his experienced matrimonial counsel and solicitors advising him in the Divorce Proceedings. They would have properly advised Father of his rights and duties, especially the duty to make full and frank disclosure of his assets.

69.  Mr Wong SC contended otherwise. He submitted that Father admitted that he did not tell the truth in the Divorce Proceedings despite knowing the risk of being criticized or found to have committed perjury. There was no reason why Father, who had fought hard for his standing and reputation in early years, would have done so unless what he said is true. Thus, the Court should give weight to Father’s evidence.

70.  It is not for me to speculate why Father claimed to have provided false information in the Divorce Proceedings without Father being subject to cross-examination. But as Mr Lam pointed out (which I agree), Father’s claim that he has lied to the Court in the Divorce Proceedings betrays his readiness to assert (even on oath) whatever that suits his interest. It begs the question how the Court can now safely conclude that Father has been truthful in these proceedings, especially in the absence of cross-examination.

H.2  Anthony’s involvement in the Divorce Proceedings

71.  One matter which Mr Wong SC relied upon as supporting Father’s case is Anthony’s active involvement in the preparation of the documents filed in the Divorce Proceedings.

72.  Mr Wong SC contended that it was inherently probable for Father to seek the assistance of Anthony and Cana:

(1)  Father was aged around 68 in 2008. He never acquired legal qualification even though he worked in the Firm. He had focused on his real estate investment and public services. He also spent 4 to 5 days a week with Anthony’s family. When his concern about Lavien’s potential divorce proceedings loomed large, it would be most natural for Father to seek advice from Anthony and Cana, who are qualified solicitors, on such personal affairs.

(2)  Lavien’s claims against his assets in the Divorce Proceedings could significantly reduce the assets which Anthony and Cana would be able to obtain from Father. By reason of their personal interest in the outcome of the contemplated Divorce Proceedings, it would be likely for Father to seek advice from Anthony and Cana. By the same token, Anthony and Cana would have every reason to advise and assist Father in order to advance their personal interest.

(3)  Anthony and Cana were Father’s first points of contact in the past when he needed assistance to handle matters arising from his deteriorating relationship with Lavien. In particular:

(a)  He asked Anthony to draft the Memorandum and Articles of Association for a new company, “Adrian Andre Investments Co Ltd” (“AAIL”), in preparation of a possible transfer of House A5 to it as his parting gift to Lavien and their two sons.

(b)  When he suspected that Lavien was having an extra-marital affair, he told Cana the daily routine of Lavien and asked Cana to introduce a private investigator to conduct surveillance on Lavien.

73.  Mr Wong SC further submitted that the bills issued by CCBH supported Father’s case that Anthony and Cana took an active role in the Divorce Proceedings:

(1)  CCBH did not bill for the preparation of the initial draft of Father’s affirmations. There were items suggesting that the drafts were received from Anthony by email.

(2)  In particular, a trainee spent a total of 200 minutes going through the draft 1^st affirmation. The filed affirmation was a 25-page document with 70 paragraphs. The reasonable inference is that a “near-perfect first draft” was circulated to CCBH from Anthony.

(3)  Before the draft Form E was recorded to be received by CCBH, there was no item showing CCBH had spent time in preparing the initial draft.

(4)  The bills showed there was a draft affirmation of Cana which was sent to CCBH. There was no entry showing that CCBH had spent any time in preparing the initial draft.

74.  Anthony explained in cross-examination that his involvement in the Divorce Proceedings was limited:

(1)  Anthony made the initial call to CCBH, and attended (with other members of the Firm) the first conference with CCBH.

(2)  Father would record his instructions via a dictaphone and had his secretary type them out. Upon Father’s request, Anthony would also type up documents using the track-change functions for Father, because both Father and his secretary did not know how to use that function.

(3)  When Anthony’s interest is at stake, he would look at the documents to ensure that his interest was protected.

(4)  When Father’s secretary was not around, Father had also asked Anthony to send out emails for him.

(5)  Occasionally when Father was not available (for example when he was visiting the doctor), Father would instruct Anthony to call CCBH to provide updates to them.

(6)  Anthony did not want to get involved too much because there were a lot of things he did not know, and he was very busy with his new-born son and his civil celebrant practice at the time.

75.  Mr Wong SC contended that Anthony’s above account was incredible. At the time, Father was aged 68 and in poor health. Neither he himself nor his secretary had legal qualification. It was unbelievable that Father would take up the onerous tasks of dictating lengthy affirmations and Form E by himself. The CCBH bills only had one entry relating to Father’s secretary, but there were numerous entries involving Anthony. The only inference that could be drawn from the circumstances is that it was Anthony who drafted the documents filed on Father’s behalf in the Divorce Proceedings.

76.  Mr Wong SC invited the Court to draw adverse inference against Anthony for not producing his email exchanges with CCBH, which would cast light on his involvement in the Divorce Proceedings.

77.  Mr Wong SC also submitted that it is unnecessary for the Court to come to a definitive finding on the precise extent of Anthony’s involvement. If the Court concludes that Anthony was trying not conceal his involvement, this will “tilt the balance” in accepting Father’s case that Anthony advised him what to say and what not to say in the Divorce Proceedings.

78.  As Mr Lam pointed out, Father’s witness statements did not claim that Anthony had drafted the documents in the Divorce Proceedings. All that Father said was that the contents “were made out consequent upon and in line with the advice given to [him] by Anthony”, not that they were drafted by Anthony.

79.  Mr Lam also submitted that it would be unfair to criticize Anthony for not producing his emails with CCBH. He could not be expected to pre-empt the cross-examination questions relating specifically to emails sent by him attaching the draft affirmations.

80.  Mr Lam made the further point that given the limited documentary evidence available (essentially just two CCBH bills), the case put by Father as to the extent of Anthony’s involvement was no more than speculation. In any event, it must be entirely natural for Anthony as a son to be involved in Father’s legal proceedings, especially when Anthony was a solicitor. On the other hand, the suggestion that Cana was involved was far-fetched. There is no evidence on what the affirmation of Cana as recorded in the CCBH bills was, or if it was ever filed. There is no factual foundation for the Court to find that Cana had advised Father about his divorce or was involved in the Divorce Proceedings in any significant way.

81.  There is considerable force in Mr Lam’s submissions above. In any event, as Mr Lam submitted, even if Anthony and Cana were involved in the Divorce Proceedings, this does not prove that the various statements made in the Court documents were false, let alone that it was Anthony or Cana who advised Father to make them. Where Father could not be cross-examined and there was no other witness to corroborate his account, the Court should be very slow to reach the conclusion that Father had committed perjury and Anthony and Cana, both practising solicitors, were the ones who advised him to do so. On the evidence before me, I am not satisfied that there is any basis for Father to resile from his sworn position adopted in the Divorce Proceedings.

H.3  Payments made by Father via Anthony and Cana

82.  Mr Wong SC submitted that another matter which lends support to Father’s case that Anthony and Cana have advised and assisted him to conceal assets from Lavien is Father channeling payments through Anthony and Cana to settle the mortgage loans of TEL.

83.  Father’s case is that he was advised by Anthony to transfer his money to Anthony and Cana for them to make deposits into the bank account of TEL to enable TEL to make the mortgage repayment. This was to show that they had made contributions to TEL and that TEL was indebted to them such that Lavien could claim less in the Divorce Proceedings against him.

84.  To make good the allegation, Father produced a List of Payments setting out his payments to Anthony and Cana:

(1)  From September 2008 to May 2009, Father paid a total sum in excess of HK$19 million to Anthony’s account.

(2)  From May 2011 to August 2012, Father regularly caused cheques to be issued and paid into Cana’s account, and she would then use such money to settle the mortgage repayments of TEL.

85.  I accept the explanations from Anthony and Cana:

(1)  Anthony explained that because of Father’s poor health, Father caused various funds to be paid to Anthony’s account so that Anthony could arrange for their payment. Thus, the funds in question were for the payment of all the expenses of Father and the two households, and included mortgage repayments.

(2)  The above is corroborated by Father’s affirmation filed in the Divorce Proceedings where he disclosed the fact that he had transferred HK$6.4 million to Anthony for him to pay for various family expenses, which included the overdraft repayments for House A7 from October 2008 to January 2009. Mr Wong SC contended that figure was “demonstrably false”. By cross-referencing Father’s List of Payments, for that period Father had transferred approximately HK$12 million to Anthony. In my view, this has missed the point. The significance of Father’s disclosure in the Divorce Proceedings is not so much on the precise sum paid by him to Anthony, but the fact that he claimed to have paid substantial sums to Anthony for him to settle, inter alia, mortgage repayments for House A7, and this is consistent with Anthony’s case.

(3)  As regards the payments to Cana, they were made after the Divorce Proceedings were settled in February 2011. The payments could not have been made to pre-empt a claim by Lavien, or such that Lavien could claim less, when the divorce settlement had been reached.

(4)  As explained by Cana, between May 2011 and August 2012, Father had occasionally missed repayments of mortgage instalments. There was therefore an arrangement that Cana would make the repayments first using her own funds (regardless of whether Father paid her in advance) and Father would reimburse Cana. She would sign the cheques in advance in good time to avoid Father making the payments late.

86.  Mr Wong SC pointed to a payment of HK$1 million from Father to Cana on 17 May 2011 in the List of Payments. He argued that this could not have been repayment to Cana because on Cana’s own evidence, by then she had only made mortgage repayments of HK$880,000. It would be impossible for Father to repay Cana more than she had allegedly advanced for him.

87.  Mr Wong SC also made the point that 2 days after she received the HK$1 million, Father drew another cheque of HK$90,000 to cover the mortgage repayment of House A7. He would not have done so if the HK$1 million was paid to enable Cana to arrange for the mortgage repayments.

88.  As a start, by including this payment in the List of Payments, it would suggest that this sum was also paid to Anthony and Cana to pay for the mortgage to create the false impression. But as Mr Lam pointed out, this is inconsistent with Father’s own case, when he claimed this was a loan to Cana to be repaid by 25 instalments.

89.  Cana’s evidence was that Father had serious financial difficulties in 2010 and was unable to repay the mortgage instalments. Cana therefore agreed to use her own funds to make such repayments from July 2010 to June 2011. Instead of being a loan, the HK$1 million was repayment to her. Cana’s explanation made sense. If the HK$1 million was not made to Cana to meet the mortgage repayments, there could be no other source of repayments identified in the evidence.

90.  For the further sum of HK$90,000 received by Cana, she said that Father might have “mixed up” the payments. There is nothing inherently incredible in such assertion.

91.  In the premises, I am not convinced that Father’s payments to Anthony and Cana would lend support to Father’s case that the two of them advised him to lie in the Divorce Proceedings.

I.  Father’s pattern of arranging his shareholding

92.  Mr Lam made a further overarching point that Father’s case is inconsistent with his pattern of arranging his shareholding in the companies both before and after the subject transfers or allotments.

93.  Mr Lam summarized the broad parameters of Father’s case as follows:

(1)  It was his business practice to use limited companies to hold his investments and assets (most of which are landed properties), but in order not to disclose his identity as shareholder so as to facilitate his property dealings, the shares of such companies “are always held by nominees in trust for [himself]”.

(2)  These companies would also hold the assets “on a resulting trust” for him because they were acquired with his money.

(3)  Initially, he used unrelated persons (his secretary, accountant or other staff or trust companies) as his nominee shareholders, but later he changed the nominees to his family members.

(4)  For family members, Father would often informally (in the sense that this was done orally and without any written trust document such as DOT) ask them to hold shares on his behalf. In this respect, none of the shares claimed by Father in these actions was based on any express trust document.

94.  Mr Lam developed his arguments as follows.

95.  As a start, contrary to the suggestion that Father did not want to disclose his identity, he held shares in no fewer than 14 companies in his own name. These include companies that Father specifically said were his property holding companies. These also include BVI companies where he held the shares with some family members (and also outsiders). For these offshore companies, the shareholding information would not be publicly available so there was no reason for Father to have a nominee hold shares on trust for him.

96.  As to the subject companies of these actions, Father was a registered shareholder of Harvest Win from June 2002 to April 2008, and of Dalny from January 1980 to November 1994.

97.  Furthermore, Father all along had nominees at his disposal. He did not give any reason why he would later on need to change the nominees to his family members, or add them as additional nominees.

98.  There were also many instances where DOT of shares in the companies (or other assets) had been executed at Father’s direction. MKL Nominees, MKL Agencies, Candy and Annie all executed DOTs over shares held in their respective names. There were also DOTs made by Cynthia, Kathleen, Anthony and Lavien over the shares of other companies. Father himself had also done so. Clearly, Father was familiar with the concept of trust and the use of formal trust documents in respect of shares in what he claimed to be his companies. Yet he gave no reason why no trust documents were executed when it came to the shares which he claimed to be held by his family members on trust for himself.

99.  Indeed, even for the shares in the companies which form the subject matter of Father’s claims in these actions, there were DOT declaring the beneficial owner to be someone else other than Father – see the Shareholding Table. This called into doubt Father’s claim that he intended to retain beneficial interest in the shares in these companies, and his blanket case that all shares in the property holding companies were held on trust for him, and all shareholders were his nominees.

100.  Still further, the pattern in relation to the transfers and allotments of shares in the subject companies in these actions was inconsistent with Father’s case that all his family members were holding the same on trust for him:

(1)  There were instances where the shareholdings were divided amongst up to 4 of his family members. For example, in September 1988, Father caused Dalny to allot 30 shares to Kathleen, 30 shares to Cynthia and 30 shares to Anthony. The registered shareholders then became Father, Kathleen, Cynthia, Anthony and Candy. There was no reason why Father would need multiple family members (together with his existing nominee(s)) to hold the shares on trust for him at the same time.

(2)  There were also instances where the shareholding structure as amongst his family members would be altered from time to time. For example, in the case of Elegant Fund, prior to November 1994, Lavien and Anthony each held 1 of the 2 issued shares. In November 1994, Father caused 98 new shares to be allotted to Anthony. In the case of Dalny, ts shareholding structure evolved with transfers and allotments taking place in September 1988, July 1994 and November 2003. There would be no reason for such alterations if all family members were mere trustees for Father.

101.  Mr Wong SC had no real answer to the above points. He argued that the shareholding pattern “is entirely neutral” and does not negate Father’s case to “park” his shares in the companies in the names of his children and Lavien for the purpose of saving estate duty, without prejudice to his right to re-distribute them. He also made the point that Father’s ability to cause allotments to be made and re-distribute the shareholding ratio showed that Father remained the beneficial owners of the shares registered in the names of his family members. I am unable to accept his submissions. There was no logical reason for Father to “park” his shares with multiple and different nominees at the same and different points in time. Father’s retaining a say in the share structures was entirely consistent with him being the head of the family and the family culture of obedience to his instructions.

J.  TEL, and Houses A5 and A7

J.1  The 1993 allotment

102.  Anthony’s evidence on the 1993 allotment can be summarized as follows:

(1)  Since Anthony was young, Father had made promises to Anthony and Madam Lam that House A7 would be given to Anthony – these include occasions in 1983 when Anthony was 11 years old, and in 1988 after Madam Lam was diagnosed with cancer. To symbolize his promise, Father asked Anthony to sign his name on the cement pavement outside House A7.

(2)  Whilst Mr Wong SC challenged Anthony’s ability to recall a promise made so many years ago when he was only aged 11 years old, Mr Lam pointed out that Anthony’s account was corroborated by the attendance note by Messrs Gallant YT Ho (“GTYH”) taken at the conference with Senior Counsel ([20(4)] above), which recorded the following explanation to the Senior Counsel from Father and Anthony:

“The share structure of TEL. All the shares were owned by [Father] through nominees (his secretaries). In 1983 when [Anthony] was 11 years old, [Father] made a promise that House A7 would be given to [Anthony]. [Anthony] was born in 1972. By 1993, when he was 21 years old, shares of TEL were allotted to him. So, at age 21, the share structure of TEL was 499+499+2. The two shares[5] were controlled by [Father] to protect his life interest and to keep the balance between the 2 camps.”

(3)  Mr Wong SC highlighted that Anthony’s evidence was that in 1983, Father had promised Madam Lam that both Houses A5 and A7 would belong to Anthony once he attained the age of 21. The 1988 promise was in respect of House A7 only. I do not consider this matter to be of significance. The point in Anthony’s case is that at least House A7 had long been promised by Father to him.

(4)  Mr Wong SC made the further point that the promises by Father to Madam Lam in the 1980s were not mentioned in the “Instructions to Counsel” prepared for the retired Justice of Appeal. I am not convinced this is a significant omission. The document did make reference to Father warranting to Anthony in 1983 that House A7 would be gifted to Anthony when he attained 21. This would seem sufficient for the purpose of obtaining advice on Anthony’s chances of keeping House A7.

(5)  After Father married Lavien and their first son Adrian was born, Father formed a similar intention to pass House A5 to them. In about November 1993 at House A5, Father had a conversation with Lavien and Anthony, during which he said that he intended to keep his promise by leaving House A7 to Anthony subject to a “life interest” of his, and similarly leaving House A5 to Adrian subject to Lavien’s and his life interest.

(6)  On 22 November 1993, when Anthony was about to turn 21 years old, Father allotted 499 shares in TEL to each of Anthony and Lavien.

(7)  Shortly after the allotment, in around January to February 1994, Father again referred to his promise to pass House A7 to Anthony and House A5 to Adrian, subject to his life interest in both houses. Lavien and Anthony agreed to this arrangement.

(8)  Later, board minutes of TEL were passed in 1994, 1995, and 1997 which continued to reflect the substance of the arrangement above. Anthony’s evidence is that the 1995 minutes were to record the increase of banking facilities secured by the mortgage over House A5, and the 1997 board minutes were to include the newly born Andre as having the same rights to House A5 jointly with Adrian.

(9)  Sometime in November 1997, Father asked Anthony to draft the Memorandum and Articles of Association for AAIL – named after Adrian and Andre – to receive House A5. Father’s idea was to persuade Lavien to agree to transfer House A5 to AAIL, and transfer all her shares in TEL to Anthony. The result would be that Anthony would own TEL that held House A7, and Lavien (and Adrian and Andre) would hold AAIL that held House A5.

103.  In Father’s written evidence:

(1)  He denied making promises to Anthony or Madam Lam in the 1980s ([20(1) above], or the conversation in November 1993 at House A5 [20(3) above].

(2)  He claimed that he intended that the shares allotted in 1993 were to be held on trust for him, and Anthony and Lavien agreed. He also had in mind at the time that this allotment of shares might operate as a device of Houses A5 and A7 to them avoiding payment of any estate duty, that is to say, upon his death, the shares may simply be given to them free from his trust and they would through TEL inherit the properties.

(3)  In relation to the TEL board resolutions, he claimed that they recorded his wish regarding the dealing of Houses A5 and A7, which is that the houses, which came from his father, should be passed on from generation to generation as the family assets, and that this was the reason why the resolutions were in those terms.

104.  As regards the statements recorded in the attendance note with Senior Counsel which were attributed to him, Father claimed that they were “not correct”. In his own words:

“At that time, I had not refuted such allegation as that in 1983 when Anthony was 11 years old, I made a promise that House A7 would be given to Anthony because it was central to Anthony’s claim, and I was thinking that Anthony’s claim might also help to ward off any claim by Lavien.”

105.  By that I took it that Father did not dispute that the explanations from him and Anthony given to the Senior Counsel as recorded in the attendance notes were indeed given in the conference, but those explanations were factually incorrect. Yet, he chose not to refute them on the spot, because he believed this would support Anthony’s claim for an interest in House A7.

106.  I have no hesitation in rejecting Father’s account above. It made no sense for him to seek the advice of Senior Counsel only to provide the Senior Counsel with incorrect information.

107.  Lavien’s evidence was that:

(1)  At the time of the 1993 allotment, Father told her that he wanted Anthony and her to hold the shares on trust for him, and that they were not gifts.

(2)  Father told her that he intended to pass Houses A5 and A7 to his male descendants upon his death, and that was the reason for the TEL board resolutions.

(3)  The TEL board resolutions were merely to record Father’s intention at the time, and they were subject to change and Father would cause the passing of new resolution when he decided to change his mind, and Father was someone who was prone to changing his mind.

(4)  She refused to sign the draft papers prepared for the purpose of passing the beneficial interest in House A5 to AAIL after seeing that Father wanted to control AAIL and hold 50% of its shares until Adrian and Andre came of age.

108.  In cross-examination, Lavien said that Father’s intention regarding Houses A5 and A7 would change from time to time, and he once told her that they would be shared with the daughters as well. I reject her evidence in this regard. This was contrary to her witness statement that Father was “always very emphatic” that Houses A5 and A7 would be passed to his male descendants, and that Father once explained to her, to make sure that she agreed, that Anthony would inherit House A7 from him when he passed away, and Adrian and Andre would inherit House A5. There was no evidence to suggest that Father had changed his mind regarding the houses. In addition, a GYTH letter dated 3 June 2009 addressed to Anthony, recounting a meeting with Father, Anthony and Cana on 7 May 2009, also recorded as follows:

“In our said meeting with you, [Father] reiterated that it had always been his intention to leave the Family Home (House A5 and House A7) passed on to him by his father to his male descendants upon his death. [Father] further elaborated that his intention was that House A7 would devolve onto Anthony and Anthony’s line of descendants subject to his [Father’s] own life interest whereas House A5 would devolve onto Adrian and Andre subject to the life interest of [Father] and Lavien.”

109.  Mr Lam made the further point, which I agree, that the fact that Lavien felt that she could reject Father’s proposal and refuse to sign the draft documents prepared for AAIL to receive House A5 was telling. Lavien’s belief that she could refuse to comply with Father’s instructions regarding the TEL shares does not sit well with Father’s claim that he had made clear to her that he was the beneficial owners of the shares.

J.2  The TEL board resolutions

110.  On 18 February 1994, which was shortly after the allotment of 499 shares to each of Lavien and Anthony in November 1993, the board of directors of TEL (comprising Father, Lavien and Anthony) resolved that:

(1)  Houses A5 and A7 shall be for long-term investment, i.e. for rental purpose and not for sale unless and until all shareholders unanimously agree to the contrary.

(2)  All the rental income derived from Houses A5 and A7 shall be used at the sole discretion of Father.

(3)  After Father’s death:

(a)  Anthony shall have the sole discretion to use all rental income derived from House A7, and to make decision whether House A7 is for rent or for self-residential use.

(b)  Anthony shall have the exclusive right to use, occupy, possess, and enjoy House A7.

(c)  Lavien shall have the sole discretion to use all rental income derived from House A5, and to make decision whether House A5 is for rent or for self-residential use for life, and after her death the discretion shall belong to Adrian.

(d)  Lavien shall have the exclusive right to use, occupy, possess and enjoy House A5 for life, and after her death Adrian shall have such right absolutely.

111.  A similar resolution was passed on 18 October 1995. The change that was made was in essence that the right to use the rental income derived from Houses A7 and A5 would only pass to Anthony and Lavien respectively after Father’s death and after the repayment of the outstanding banking facilities secured on respectively Houses A7 and A5.

112.  Another similar resolution was passed on 29 September 1997. This was shortly after the birth of the second son of Father and Lavien, Andre, and the change that was made was that the rights given to Adrian (their first son) after Lavien’s death were now to be given to both Adrian and Andre jointly.

113.  All of these resolutions were signed by Father, Lavien, and Anthony.

114.  Mr Lam submitted that these resolutions showed that it was Father’s intention since 1994 to pass House A7 to Anthony and House A5 to Lavien, Adrian and Andre through the TEL shares:

(1)  If Father’s intention was to retain the beneficial ownership in the shares, there would have been no point for the elaborate resolutions to be passed. As full beneficial owner of the shares, Father could simply decide what to do during his lifetime and effect his desired arrangement through his will.

(2)  The fact that the resolutions only purported to reserve a right for Father during his lifetime to use the rental income suggested that he had no other rights during his life in the properties.

(3)  The provision that the houses could not be sold without unanimous consent of the shareholders would also be pointless, if Father retained beneficial interest in the shares allotted to Lavien and Anthony.

115.  Mr Lam further made the point that Father’s suggestion that the allotment may be a device for avoiding estate duty is not to the point. If the shares were held on trust for Father, they would after his death pass to Father’s estate and would not achieve the alleged purpose. Indeed, the only way to avoid estate duty was to ensure that the beneficial interest had passed during Father’s lifetime.

116.  In response, Mr Wong SC’s main arguments are as follows:

(1)  The TEL board resolutions had the following salient features:

(a)  Houses A5 and A7 were purchased for “rental income purpose” and all rental income derived shall be used at the sole discretion of Father during his lifetime.

(b)  Unless all shareholders agreed, Houses A5 and A7 could not be sold.

(c)  Even after Father’s death, Anthony’s right in relation to House A7 was to determine whether to reside in it or to rent it out for rentals. There was no mention that Anthony shall have the right to sell House A7. The resolutions also provided that after Father’s death, no further charge or extension of the existing banking facilities leveraging on Houses A5 and A7 would be allowed unless and until all shareholders unanimously agreed to the contrary.

(2)  The above features in the resolutions supported Father’s case that he had no intention to pass the beneficial ownership of Houses A5 and A7, or the 499 shares which he caused TEL to allot to each of Anthony and Lavien in 1993, during his lifetime. The resolutions evinced a clear intention that Father had absolute control.

(3)  At the time of the TEL board resolutions, TEL only held House A7. House A5 was only assigned to TEL in 2000. Whatever were stated in the resolutions between 1994 and 1997 only represented Father’s plan for the future, as opposed to a present intent to make an outright gift by way of the 1993 allotment.

(4)  Father still regarded Houses A5 and A7 as part of his assets which he could decide how to devise them upon his death. This was borne out by the fact that in his will made in 1997, he still made specific provisions for the bequest of House A5 (to Lavien during her lifetime, and upon death as trustee for Adrian and Andre) and House A7 (to Anthony absolutely) upon his death. This showed that in procuring the 1993 allotments, Father had no intention to divest his interest in TEL, which held House A7 and (since 2000) House A5.

(5)  All the above matters were consistent with Father’s habit of retaining ultimate control in the family assets. As he said in his witness statement:

“There is absolutely no reason for me to gift away my assets and properties to Anthony and [Cana] in my life time when I would and I can provide for them and my other children and grandchildren by will as I have done in the past. Making inter vivo (sic) gifts of my assets and properties to them would simply defeat my will.”

117.  I agree with Mr Lam that none of the points raised by Mr Wong SC above advanced Father’s case:

(1)  By the time of the 1994 TEL board resolution, TEL had already signed a sale and purchase agreement dated 29 September 1988 to acquire both Houses A5 and A7. The fact that House A5 was only assigned to TEL in 2000 was of no significance. There was nothing to suggest that TEL would not complete the acquisition.

(2)  The features of the resolutions highlighted by Mr Wong SC did not say anything about the beneficial ownership of the TEL shares or the Houses. All they showed was that the control of how the Houses would be used were set out in the resolutions, and to be controlled by all shareholders.

(3)  If Father regarded himself as the beneficial owner of all the TEL shares, the references to needing the agreement of “all shareholders” would be otiose.

(4)  If Father wanted absolute control over the shares or the Houses, there would have been no need to allot shares to Anthony or Lavien, or pass the resolutions. In any case, just because Father himself did not want the Houses to be sold does not mean that the shares are not gifts to Anthony and Lavien. As the head of the family, it was understandable that Father wished to place restrictions on what he had all along treated as the ancestral home. The arrangement set out in the resolutions in substance achieved Father’s intention of retaining control (as opposed to beneficial interest) over the Houses and passing them to Anthony and Lavien (Adrian/Andre) for them to enjoy after his death:

(a)  The Houses could not be sold and must be rented out. The only benefits arising from the Houses would be the rental and where the Houses are mortgaged to secure a loan. The former would be enjoyed by Father alone. He also solely decided how the overdraft facilities were to be used.

(b)  Father would also be able to maintain this position as the resolutions could not be changed without the agreement of all shareholders. With the 2 shares held by his nominees and under his control, he could veto any shareholder resolution.

(c)  After Father’s death, the rights to enjoy the Houses would belong to Anthony and Lavien (Adrian/Andre) absolutely.

(5)  It is true that Anthony and Lavien carrying 998 shares in TEL could “join hands” and replace the existing directors, and with the new board in control, pass a resolution to revoke the 1994, 1995 and 1997 board resolutions. However, this is somewhat divorced from reality, in the context of a traditional Chinese family, where all family members were accustomed to carrying out Father’s instructions. It could also not be assumed that Father knew the law to appreciate that it was possible for Anthony and Lavien to effect the changes despite the resolutions, when Father was not a lawyer.

(6)  The relevant provision in Father’s will referred to Father’s “rights and privileges (if any)” in Houses A5 and A7. This is at best equivocal, especially when there is no evidence from Father as to the reason for these provisions.

J.3  Father’s position in the Divorce Proceedings

118.  In Annexure 5.5 to his Form E in which he explained the history of development of Manly Villa, Father stated:

(1)  “In the same year (about 1983), when Anthony was about 11 years old, I promised to Anthony and May that House A7 would belong to Anthony as a family house when he attains the age of 21 because he is my first son and thereafter to the descendants of the Lam’s family.”

(2)  “It was always my intention to leave the Family House (House A5 and House A7) passed to me by my father to my male descendants upon my death. I had already promised Anthony House A7 when he was about 11 years old.”

(3)  “Therefore, on 22^nd November 1993, TEL allotted 499 shares to [Lavien] and 499 shares to Anthony. The remaining two shares continued to be held by my nominees. My intention was very clear. I want to maintain control over TEL during my life time and I do not want any conflict between the two “lines” (兩房).”

(4)  “Further, the said allotment of 499 shares to [Lavien] and Anthony respectively was on the specific understanding between Lavien, Anthony and I that the heirs and successors of Anthony shall have the exclusive right to use occupy possess and enjoy House A7.”

(5)  “My intention and the tri-parte agreement was evidenced in writing by a minute of Board of Directors of TEL dated 18^th February 1994 … The following resolutions were passed and recorded in the 1994 Minute … Upon my death, House A7 should belong solely to Anthony and his successors …”

119.  That House A7 was beneficially owned by Anthony was repeated in Father’s various affirmations and answers to questionnaires filed in the Divorce Proceedings.

120.  Whilst the present proceedings concerned the beneficial ownership of the TEL shares and not House A7, Mr Lam must be right in saying that they logically go hand in hand. If Father’s intention was for Anthony to have an immediate beneficial interest in House A7 subject to Father’s life interest, there would have been no point for Father to intend to retain the beneficial ownership in the shares in TEL.

J.4  Recorded conversation in March 2013

121.  In March 2013, Father, Anthony, and Kathleen had a meeting at House A7. Anthony taped recorded their discussions covertly (“2013 Conversation”). It was Anthony’s evidence that Father called the meeting. The discussions were transcribed and the audio recording was provided to the Court.

122.  Father started out by saying that he wanted to have a peaceful discussion. He would not ask for House A7 from Anthony, which he had promised Anthony all along since he was young. He would want Anthony to transfer back to him some of the other companies and shops, as he had to meet substantial monthly expenses:

“揾你地，call你地呢就係講講呢大家都心平氣和吖，因為理由點解呢我而家呢就病咁我就要（… 聽不清楚 …）即係因為我以前簽落返俾你地啲嘢呢就，哪衣間我由細到大都應承你嘅，衣間已經值2億幾元架喇，我就唔郁你嘅就一定就係我pass away就一定係你嘅，就學你話長子嫡孫你就盡量係照顧個家姐，我要求你嘅就衣2億幾元就係咁啫，咁其他嗰啲呢即係濕濕碎碎嗰啲，我二澳啊、Er嗰個Er澄碧村呀，Er我嗰個舖位呀果D就assign返曬果啲share俾我，我嗰度都係得二千零萬度嘅啫，咁我就夠，哪我個開支呢你可以問得Apple講大約衣家嘅開支大約30幾萬一個月，你可以check返啲record，唔係我做出嚟嘅。”

123.  There is no dispute that the reference in the discussions to the property worth “in excess of 200 million dollars” (衣間已經值2億幾元) was House A7. Mr Lam submitted, and I agree, that the above contradicted Father’s case that the shares in TEL were held on trust for him, and he never promised Anthony when he was young that House A7 would belong to Anthony. If Father indeed considered the shares transferred to Anthony and Cana were held on trust for him and they promised him so, it was unthinkable that he would not have pointed this out in the course of the 2013 Conversation when the transfer of shares was mentioned.

124.  Mr Wong SC suggested that Anthony chose not to tell Father about the recording because he had been told by Father that Father wanted to discuss with Anthony his demand for the return of shares of the relevant companies, and he wanted to “trap” Father in the hope that he would say something prejudicial to himself, or that he would not correct some self-serving statements made by Anthony. This is speculative. In any event, in circumstances where the authenticity and accuracy of the discussions were not in dispute, the reason for Anthony to record the discussions was of no significance.

J.5  Transfer of 2 shares in 2008

125.  In Father’s witness statements, he stated that:

(1)  He caused his 2 shares (held by Candy and Annie) to be transferred to Anthony and Cana upon their advice to protect his properties from claims by Lavien in the Divorce Proceedings;

(2)  He intended the shares to be held on trust for him and he had told Anthony and Cana so, and they had promised to hold on trust for him; and

(3)  He would not give 1 TEL share to Cana to make her happy for giving him a grandson well knowing there would be dispute with Lavien in relation to TEL, and that would only bring Cana trouble. Also, he had always regarded Houses A5 and A7 as family property to be passed from generation to generation, and he would not give 1 TEL share to Cana as a gift.

126.  In cross-examination, Annie mentioned for the first time that for all the share transfers or allotments in 2008 made to Anthony or Cana, there were DOTs signed, and that they were taken away by Anthony. I reject her evidence:

(1)  Annie admitted that this was a very important incident, because she would have to pass Father the DOTs if he asked for them. She could not explain its omission from her witness statement, save by claiming that she did not have a clear mind when it was prepared because she was getting old.

(2)  Annie’s testimony was that all DOTs were prepared at Father’s initiation and instruction. Nowhere in Father’s witness statements did he ever mention that Anthony and Cana had executed DOTs in relation to the shares which he was claiming for in these actions. It is unthinkable that Father did not know about the execution of DOTs by Anthony and Cana, or that he would not have mentioned in his witness statements, if this indeed happened.

127.  The evidence of Anthony and Cana was as follows:

(1)  In 2007/2008, Father’s relationship with Lavien turned sour. His health had also deteriorated drastically. As a result, Father was concerned that Anthony might not be able to control TEL if Father was unable to exercise his voting rights as a director or holder of 2 shares due to any health problems. He was also worried that litigation might occur between Lavien and Anthony after his death.

(2)  Father first came up with the idea of setting up AAIL and to have House A5 transferred to AAIL, and Lavien’s 499 shares to be transferred to Anthony. But Lavien rejected this proposal.

(3)  Then in March 2008, Father learned that Cana had become pregnant with a boy. He was very happy and indicated that he wished to transfer his 2 shares to Anthony and Cana to make them happy and to ensure that they would be in control of TEL. The attendance note with Senior Counsel supported the above:

“… in 2008, when [Cana] was carrying a baby, [Father] was delighted and caused the 2 shares be transferred to [Anthony] and [Cana] respectively.”

(4)  During lunch at the Hong Kong Jockey Club Happy Valley Clubhouse (“HKJC”) and dinner at home on 10 March 2008, Father also indicated that he would divide his assets amongst his two households in contemplation of divorce proceedings and to avoid arguments after his death, and that he would transfer various properties to Anthony on the understanding that he would take care of Kathleen and Cynthia. The HKJC lunch meeting was supported by the “Instructions to Counsel” prepared by Anthony for the retired Justice of Appeal, which appended the item “copy receipt of a tea meeting amongst [Father], Anthony and [Cana] on 10^th March 2008”. The 10 March 2008 discussion was also corroborated by the 2013 Conversation as follows:

“[Anthony]: 我就你嗰陣時都轉左啲野比我咁就講到明話分身家咁樣樣，大家姐呢in any event我都承諾我會睇佢嘅，呢個你可以放心，呢個亦都係我嘅承諾。因當其時呢你轉野比我講到明話咗俾你聽我一定唔會唔照顧我大家姐嘅。”

(5)  In this regard, Mr Wong SC made the point that Anthony only referred to taking care of “大家姐” i.e. Kathleen, when his case is that at the HKJC lunch, Father made him promise to take care of both of his sisters. I do not believe the omission of Cynthia would undermine the support of the above extract to the existence of the HKJC lunch.

(6)  Mr Wong SC further submitted that since Father already made provisions in his 1994 and 1995 wills to make direct bequests to his children, there was no reason for Father to make inter vivos gifts to Anthony on the understanding that he would take care of his sisters. I do not believe the two notions are mutually exclusive. Just because Father extracted a promise from Anthony to take care of his sisters did not mean Father himself would not make provisions to take care of them.

(7)  When Father was shown the ultrasound scan of Cana on 18 March 2008 in the offices of the Firm which confirmed the baby would be a boy, Father further indicated that he wished to transfer assets or shares to Anthony and Cana to provide for his future generation. To the best of Anthony’s recollection, Father’s words were along the lines of the following:

“嗱，你即將會生個仔喇，會分啲嘢比你，但你係呢刻唔好停，你要繼續生，佢強調要多過一個男孫。”

(8)  It was as a result of the above matters that Father: (a) caused his 2 shares in TEL to be transferred to Anthony and Cana in March 2008, and for Cana to be appointed as an additional director; and (b) caused the shares in various companies to be transferred and allotted to Anthony and Cana in April and July 2008 (which formed the subject claims in other actions).

(9)  Specifically, on an occasion in about May or June 2008, Father said to Anthony and Cana that he was worried about going on a long trip with Lavien, Adrian and Andre in the summer of 2008 due to his health condition. He also said that he appreciated Cana for taking care of him and allowing him to stay in their home for various times, and he mentioned that he would allot shares in General Target and Dalny to Cana. He was worried he might die during the trip and he wished to leave some assets for Cana and his grandchildren before he went on the trip. Cana’s evidence was that Father had on this occasion specifically mentioned to her that the shares in Dalny and General Target to be allotted would represent gifts to her, her twin daughters, and her unborn son in 4 equal shares.

128.  There could be no dispute that Father’s relationship with Lavien turned sour in 2007/2008 such that Father perceived there to be a likelihood of divorce:

(1)  Anthony’s evidence was that during that period of time, Father’s relationship with Lavien had turned sour and they often had quarrels.

(2)  In December 2007, Father and Lavien signed a note, which Father explained, “comprised some terms proposed by Lavien for divorce settlement”. The note stated as follows:

“1) $800k for studying (Adrian and Andre) ($500 in shares & $300 in cash)

2) $100k for 不時之需

3) A-7 for Anthony’s family (including Kathleen & Cynthia) subject to life interest of Keith

4) a/ A5 for Adrian & Andre subject to life interest of Keith & Lavien and not allow to mortgage unless with consent of at least 50% of the ultimate beneficial owner

b/ (Not allow to sell)

c/ All rental income or mortgage loan will be used to provide education expenses for Adrian & Andre and the living expenses for Lavien, Adrian and Andre

5) The loan made to Lavien by Keith for Convention Plaza Rm 2707 be a gift to Lavien and Lavien need not repay a cent of the said loan to anybody”

(3)  Lavien admitted in cross-examination that she had considered divorce at that time and had told her friend of such thought.

129.  There could be no dispute that Father’s health drastically deteriorated in 2007/2008 to the extent that he had genuine concerns of death:

(1)  Anthony’s evidence was that:

(a)  Between late 2007 and early 2008, Father was suffering from various conditions, including diabetes, heart disease, and renal failure and was hospitalized 3 times.

(b)  In around March 2008, the doctors had described Father as being very feeble and his condition was not optimistic.

(c)  In April 2008, Anthony arranged a grand birthday banquet (大壽) for Father with many friends and relatives attending.

(d)  In around June 2008, Lavien urged Father to go on a family trip with her, Adrian, and Andre in summer. Father expressed his worry that he may die during the trip, and they sought the advice from Father’s supervising doctor, who gave his travel advice in writing on the basis of Father’s “previous operation and present diabetic and renal status”, and provided medical contacts in Vancouver and Toronto in case of medical needs.

(2)  Lavien’s evidence was that Father had a heart surgery towards the end of 2007 and his health was “delicate” after the surgery, such that he was “very concerned” about providing for Adrian and Andre should something happen to Father. She therefore asked Father to set aside some money for her “in case of emergency”.

(3)  In Father’s words, his “health deteriorate[d] drastically during end of 2007 and early 2008”, and “since March 2008 [his] health was so frail that [he could] hardly attend to any businesses”.

130.  The fact that Father had put forward the proposed arrangement regarding AAIL and Lavien’s refusal was not in dispute.

131.  There was no serious challenge that Cana first learned that she was pregnant and that it was likely to be a boy in early March 2008, and this was later confirmed by an ultrasound scan on 18 March 2008.

132.  Father disputed the HKJC lunch on 10 March 2008. Mr Wong SC challenged the alleged HKJC lunch on 10 March 2008 as being highly unbelievable. He argued that:

(1)  The documents suggested that Father finished his medical appointment in Central at 13:02, and the taxi trip to the HKJC started at 14:22 and ended at 15:08. Even taking into account the time taken for Anthony and Cana to walk from their offices to meet Father, it would be quite impossible for them to take so long to get to the HKJC.

(2)  It was questionable for Father to have said during lunch that he would divide assets amongst his two households, when in 2008, Father only caused shares to be transferred or allotted to Anthony and Cana.

(3)  It was unbelievable that Father took out a pre-prepared note during lunch stating his intention to put Houses A5 and A7 under TEL to be further passed on to his male descendants, signed it in front of Anthony and Cana (without asking them to sign as witnesses), and then took it back with him.

(4)  At that time, Father stayed with Anthony for about 4 to 5 days a week. There would have been plenty opportunities for Father to announce his wishes at home, rather than showing Anthony and Cana a document at the HKJC and then took it back with him.

133.  Father also disputed the dinner on 10 March 2008:

(1)  The dinner was allegedly attended also by Kathleen. By not calling Kathleen to testify at trial, the Court should draw all necessary adverse inference against the account of Anthony and Cana.

(2)  Given Father had already (allegedly) stated his intention to make a gift to Anthony and Cana at lunch earlier that day, there was no point for Father to repeat such intention at the dinner.

(3)  Insofar as it was suggested that Father would like to make his intention known to his other children, such suggestion could not explain why Father did not ask Cynthia to join the dinner.

134.  Mr Wong SC submitted that Anthony and Cana’s account of events in the offices of the Firm on 18 March 2008 should also be rejected by the Court:

(1)  By then Cana was only pregnant for about 10 weeks. On that day, she claimed to have shown her ultrasound scan to all the staff of the Firm. Local Chinese would regard it a “taboo” to let others know of the pregnancy until at least after 3 months.

(2)  Cana said that Father was excited to be able to see the male genitals of the baby on the ultrasound scan. Cana admitted that she herself was unable to do so.

(3)  According to Anthony and Cana, Father had been told multiple times before 18 March 2008 that Cana was pregnant with a boy and had on multiple occasions expressed his happiness and intention to make a gift to them. It is highly contrived to suggest that Father would again say he wanted to transfer some assets or shares to Anthony and Cana on 18 March 2008.

(4)  The medical receipts showed that Father attended two medical appointments on 18 March 2008. The Court was invited to accept Father’s evidence that he did not attend the offices of the Firm and was not shown the ultrasound scan on 18 March 2008.

135.  Without Father’s tested evidence to back up, the points made by Mr Wong SC were insufficient to lead me to reject the account of Anthony and Cana, which was consistent with the objective circumstances. I accept the evidence of Anthony and Cana.

J.6  Transfer of Lavien’s 499 shares to Anthony in 2011

136.  Mr Lam submitted that if the Court accepted that Father’s intention was all along to gift the TEL shares to Anthony, it must follow that his intention remained the same in 2011 after his divorce settlement with Lavien. I agree.

137.  It is therefore unnecessary for me to express any view on Mr Lam’s submissions that the 499 shares transferred by Lavien to Anthony pursuant to the HCMC Order could not have been held on trust for Father since: (1) Lavien was the transferor so that it was her intention that was relevant; and (2) given the terms of the HCMC Order, Lavien must have intended to vest the beneficial interest in the 499 shares on Anthony.

K.  Shares in other companies

138.  This part of the Judgment addresses Father’s claims over the shares in Silver Door and General Target (HCA 726/2015), Harvest Win (HCA 1230/2015), Dalny (HCA 2426/2015), Elegant Fund (HCA 2427/2015), Jollida (HCA 2428/2015), and Gold & Silver (HCA 2550/2015). It would be convenient to first discuss the rival overall theories as to Father’s likely intention in respect of the shares, and then proceed to a focused discussion on the specific shares in each of the companies.

K.1  Overall theories

139.  There are two competing theories: (1) the recipients held the shares on trust for Father (“Trust Theory”); and (2) the shares were outright gifts (“Gift Theory”).

K.2  The Trust Theory

140.  The gist of the Trust Theory is that Father’s intention was that the recipients f the transfers and allotments were his nominees and held the shares on trust for him, because all the companies held properties of his property development business and Father could not have intended to part with such properties, nor would he have intended to relinquish control over them.

141.  As a start, the Trust Theory is inconsistent Father’s stance in his sworn statements in the Divorce Proceedings: section H above. In my view, there is insufficient evidence (let alone cogent ones) for Father to disown his statements.

142.  The Trust Theory also does not sit well with Father’s pattern of arranging his shareholding both before and after the transfers or allotments: section I above. In particular, there is a lack of plausible reason for there to be multiple nominees, or for the change of the nominees, or for the change in the shareholding structure amongst the nominees. In this regard:

(1)  Both Cynthia and Lavien claimed that Father had made clear to them that the shares allotted or transferred to them were not gifts but were held on trust for him. This carried little weight in the absence of corroboration of Father’s tested evidence.

(2)  Cynthia claimed that Father trusted and relied on his family members to hold on trust for him and would not require a DOT. But as Mr Lam pointed out, there were various examples of Father executing a DOT in favour of other family members, and the family members executing a DOT in favour of other family members, as referred to in the Shareholding Table.

(3)  Lavien claimed that Father was a “very savvy” person and would not have made outright gifts to his family members because he would have the option to redistribute such assets as he liked. This may be Lavien’s own impression, but this did not explain why Father would not require the family members to execute DOTs. If Father was intent on redistributing the shares when family members disobeyed him, he would run into great difficulties in even getting back the shares without any proof of the trusts.

143.  Mr Lam also relied on the contents of two statutory declarations made by Father. On their face, they were both made on 25 June 2008 before a solicitor in Hong Kong and with an interpretation clause. Anthony claimed that he only discovered them (along with various other documents) on or about 14 February 2021 in a secret compartment in House A7, and he had no prior knowledge of their existence.

144.  In one of the statutory declarations, Father stated that:

(1)  He was the beneficial owner of certain shares in a number of companies, and he had the intent to assign the shares to Anthony as legal and beneficial owner. He had therefore on various dates caused to be transferred his title and interest, whether legal or otherwise, in those shares to Anthony.

(2)  Those shares included:

(a)  1 share in Gold & Silver (date of transfer stated to be 21 April 2008);

(b)  1 share in Jollida (date of transfer stated to be 8 May 2008); and

(c)  999 shares in Silver Door (date of transfer stated to be 6 May 2008).

(3)  He confirmed his assignment of those shares to Anthony and divest himself from any title and interest of and in the same.

145.  Mr Lam submitted that the above statutory declaration contradicted Father’s case that he retained beneficial ownership over the shares in Gold & Silver, Jollida, and Silver Door transferred to Anthony.

146.  In the other statutory declaration, Father stated that:

(1)  He was the legal owner of certain shares in a number of companies, and that some of the shares “may have already been beneficially owned by” Anthony, or otherwise he had intent to assign them to Anthony as legal and beneficial owner.

(2)  He had on various dates transferred his title and interest, whether legal or otherwise, in those shares to Anthony. The shares included 5 shares in Harvest Win (date of transfer stated to be 24 April 2008).

(3)  He confirmed his assignment of those shares to Anthony and divest himself from any title and interest of and in the same.

147.  Mr Lam submitted that the above statutory declaration contradicted Father’s case that the 5 shares in Harvest Win which Father originally held was held on trust for Lavien, Adrian and Andre (as opposed to Anthony and TEL), and that when he transferred those shares to Anthony in 2008, they were held on trust for Lavien, Adrian and Andre.

148.  I place no weight on these two statutory declarations. As Mr Wong SC submitted, they were produced only after Father’s death. Father did not have the opportunity to respond to them by way of witness statement and explain their genesis. It would be unsafe to just rely on their contents without a full picture of why they were made and who was involved in their drafting. It is unnecessary for me to address Mr Wong SC’s further submission that they were discovered by Anthony in “dubious circumstances”.

K.3  The Gift Theory

149.  Mr Lam submitted that the Gift Theory, in contrast to the Trust Theory, is the only inherently credible proposition that explains all the features of the present case.

150.  Mr Lam made the point that there is nothing incredible for Father to make gifts of shares to his family members. He is the patriarch and would provide for them.

151.  Mr Lam summarized the points taken by Father to challenge the Gift Theory as follows:

(1)  Despite the transfer or allotment of the shares to his family members, Father continued to be the person managing the property dealings;

(2)  Father was able to alter the shareholding structure of the companies which would affect the interest of the existing shareholders; and

(3)  Father continued to be the person enjoying the fruits of the property dealings.

152.  I agree with Mr Lam that there are good answers to each of the three points above.

153.  In relation to the first point on Father’s continued involvement in the management and dealing of the assets, this can be explained by the following:

(1)  Father regarded the various property-holding companies as family companies and that the business was a family business. This was borne out from evidence of Anthony and Lavien.

(2)  That being so, it was unsurprising that Father would continue to run and manage the investments, despite having gifted the shares to his family members. Lavien accepted that Father regarded himself as good at handling such business affairs, and he, as head of the family, was working for the benefit of his family members holding those shares.

(3)  Father had made personal loans to the companies. It was Annie’s evidence that Father provided the purchase price for the properties held by the companies and these funds would be booked as a director’s loan. Many of such loans were also recorded in Father’s Form E in the Divorce Proceedings. It would have been natural for Father to ensure that these companies made profits so that he could recoup these loans.

(4)  Given his status as the head of the family and that the family members were all accustomed to respecting him and following his instructions, Father could trust the family members to allow him to continue to run and manage the assets and businesses.

154.  In relation to the second point on Father’s ability to alter the shareholding structure after the transfers or allotments:

(1)  Again, since Father was the patriarch of the family, the family members would usually defer to his wishes. Both Cynthia and Lavien accepted that it was understood that if a family member did not obey, Father might cut him or her off financially.

(2)  As Lavien also accepted, at any given time Father owned many other assets (which the family members would not know the full extent of). If one refuses to comply with his wishes, Father would not distribute further assets to him or her. There was one occasion when Lavien asked Father why she had not received dividends, and Father indicated to her that if she refused to sign documents, he would in the future distribute less assets to her.

(3)  When Father altered the shareholding structure in the various companies (for example, the distribution of Dalny shares in 2003 and the allotment of Dalny shares to Cana in 2008), it was more likely than not that he did so (and believed he could do so) on the basis that he thought his family members would not object, since these were meant to be family companies and the family members would generally comply with his wishes.

(4)  The fact that Father had procured a change in the shareholding structure after the initial transfers or allotments to his family members does not mean that Father retained full beneficial ownership of all the shares from the start. It was equally consistent with Father originally intending that the shares were absolute gifts, but later changing his mind because of a change of circumstances (for example, the birth of a new child or grandchild), and he thought that the other family members would not object to the change.

155.  In relation to the third point on Father purporting to continue to receive the fruits of the property dealings:

(1)  There is no evidence that any of the companies had distributed dividends. There was a bare assertion from Father that he had full control and use of the profits from the property dealings, and his major income was from the rents and proceeds from his property dealings. But he did not produce any evidence to that effect.

(2)  The only example Father gave and elaborated upon in his witness statement related to the sale of a unit on No 18 Russell Street in 2011. That was a joint venture in which Father owned (through Jollida) a 70% stake. Jollida’s share of the sale proceeds was applied to pay off Father’s banking facilities (HK$10 million) with the balance paid over to Father (HK$5.9 million).

(3)  Anthony and Cana explained that the funds were released to Father to allow him to pay off his medical fees. Mr Wong SC submitted that this explanation was incredible: (a) there was no reason for the entire balance of the sale proceeds to be applied for Father’s benefit in one go; and (b) Anthony could not explain why he did not choose to make monthly payments of a smaller sum to meet Father’s medical and personal needs. Mr Wong SC asked the Court to draw the natural inference that both Anthony and Cana recognized that Father remained the true beneficial owner of the shares of Jollida despite having caused the same to be transferred to them in 2008, and they therefore applied the balance of the sale proceeds for Father’s sole benefit in 2011.

(4)  There is attraction in Mr Wong SC’s submissions, but in the absence of Father giving evidence, I am unable to prefer Father’s version to Anthony and Cana’s version.

(5)  Mr Lam further submitted that the evidence suggested the companies did not generate any significant rental income sufficient to pay off its expenses in order to distribute any dividends:

(a)  Anthony’s evidence was that the limited rental income generated by the shops in Manly Plaza held under Dalny, Elegant Fund, Gold & Silver and Jollida were used to discharge the respective company expenses.

(b)  There is no evidence that the Sea Ranch Property held by Gold & Silver was ever rented out. Lavien’s evidence was that it was not being maintained and was in a dilapidated state.

(c)  As to the Holiday Resorts shares held by Gold & Silver, the evidence from Anthony was that the Sea Ranch development was generally not a well-managed or profitable one, and no investors were willing to take up and redevelop the same.

(d)  Anthony explained that the Manly Plaza shop units jointly held by New Alliance and General Target were all subject to mortgage, and the rental income had been used to discharge the mortgage repayments and expenses for the shops (at least up to 2014), and he was not aware of any dividend declared by New Alliance and paid to Silver Door over the years. Outstanding mortgage liabilities were recorded in the annual returns of General Target (2009, 2012 and 2015) and New Alliance (2001, 2014).

(e)  In relation to Harvest Win, from the limited financial statements available, no dividend was declared for the year ended 31 March 2007, and it had a net loss for the year ended 31 March 2008. Office 9A held by Harvest Win was used by Cynthia (and/or a friend of hers) until 2021, and did not generate any rental income. Cynthia claimed in cross-examination that she only used the office address as her company’s registered office, but that must still mean that it could not be rented out for other tenants.

(6)  Relatedly, there is no evidence that Father himself paid for the expenses of these various companies:

(a)  For those companies where there was rental income generated, the rental income would be used to pay off such expenses – for example, the Manly Plaza units.

(b)  In the case of Silver Door, as it received no dividends from New Alliance, the expenses were paid for by Cana.

(c)  Whilst Cynthia asserted that Father was paying the government rent / rates / management fees of Office 9A held by Harvest Win until 2009, no documents were produced before the Court, and in any case there was no suggestion that Father continued to pay for them after 2009. Anthony’s evidence was that these were paid by him and Cana.

156.  Mr Wong SC made a further point that Manly Plaza was Father’s “long-standing” and “signature” project and his “brain child”. It was inherently incredible for Father to divest his interest in the shares in companies holding units in Manly Plaza especially in the early stage of the development. But as Mr Lam submitted:

(1)  Unlike Houses A5 and A7, Manly Plaza was a commercial investment. Whilst it may be one which Father cared a lot about, or was proud of, as with any investment, the objective must have been to make a profit.

(2)  Lavien’s evidence that Father would not give away units in Manly Plaza because his project would only be profitable if the plaza was sold en bloc, is inconsistent with the fact that some units were in fact sold separately.

(3)  The shares in the holding companies were not sold off to any random stranger, but were given to Father’s family members. This is consistent with the fact that Father would continue to manage the investments because the family members holding the shares would benefit therefrom.

K.4  General Target (HCA 726/2015)

157.  I agree with Mr Lam that the evidence suggested that both General Target and Dalny (which from 1993 to 2008 held a substantial shareholding in General Target) were companies which Father intended the shareholding to be equally shared by his children:

(1)  As can be seen from the Shareholding Table:

(a)  In the case of Dalny, following the allotment in September 1988, other than Father, the shares were basically held in equal proportion amongst his then 3 children (Kathleen, Cynthia and Anthony).

(b)  The allotment July 1994 introduced Lavien as a shareholder in equal proportion, which coupled with later year events was clearly to represent the interest of Adrian who was just born.

(c)  Then in November 1994, Father transferred the shares held in his name to MKL Nominees, which executed a DOT in favour of Kathleen, Cynthia, Anthony and Adrian, his then 4 children, in equal shares.

(d)  In 2003, the shares held by MKL Nominees were transferred to Lavien, Kathleen, Cynthia and Anthony. Lavien also executed a DOT in favour of Adrian and Andre. The result was basically that all Father’s 5 children held equal shares.

(e)  The shareholding pattern in General Target was similar. After the allotment in October 1993, Kathleen, Cynthia, Anthony and Lavien (who would represent the interest of the just born Adrian) basically held equal shares. Dalny also held some shares in General Target, but Dalny’s shareholding basically reflected equal shareholding of Father’s children.

(2)  Anthony also explained that Father had told him and Kathleen one night in 1993 that he had distributed some shares in Dalny, which was a company used by him to hold assets for the benefit of the family, and that he would continue to arrange for distributing shares in Dalny to them and Adrian equally.

(3)  The above matters strongly suggested that the shares were intended to be gifts to Father’s children, and were not intended to be held on trust for him. This was especially so when some DOTs over Dalny shares were involved over the years (in 1994 and 2003), which indisputably suggested that those shares were not held for Father. This in turn must defeat Father’s case that he intended to retain beneficial interest in all the shareholding in Dalny and General Target.

158.  Regarding the allotment of shares in General Target on 18 October 1993, it is Anthony and Cana’s case that they were made pursuant to Father’s promise before his marriage with Lavien:

(1)  In or about December 1991 (shortly before Father’s marriage with Lavien), Father called for a family meeting with Kathleen, Cynthia and Anthony, and informed them that he would soon marry Lavien, and said that if they did not attend the wedding, it would be disrespectful to him as head of the family.

(2)  Father also indicated that (a) if they objected to the marriage and did not attend the wedding ceremony and banquet, he would declare publicly in the newspaper that he would disown them and would not distribute his assets to them, save for those assets in Canada already given to them, but (b) if they attended the wedding, he would make arrangements to distribute his assets to them.

(3)  The 3 children did not respond on that occasion. In particular, Anthony wanted to wait and see what his sisters’ stance would be, and did not want to betray them by immediately agreeing to attend.

(4)  On a separate occasion subsequently, Father (a) warned Anthony that he should attend the wedding regardless of Kathleen and Cynthia’s decision because Anthony is his heir, and (b) threatened Anthony that if he did not attend, Father would not pay for Anthony’s daily expenses and tuition fees for his final year at university.

(5)  In fear of losing his schooling, Anthony agreed to attend the wedding. Eventually, Kathleen, Cynthia and Anthony all attended the wedding ceremony and banquet.

159.  I agree with Mr Lam that Anthony’s evidence was credible. This was consistent with (1) Father’s evidence that he had objected to his marriage with Lavien, (2) Cynthia’s evidence that she, Kathleen and Anthony all disliked Lavien, but had eventually attended the wedding, and (3) Father’s character of using threats to cut off a family member financially to secure their compliance.

160.  Mr Wong SC sought to raise doubts over the time gap between Father’s promise and the allotments. As Anthony explained, which I accept, he connected the allotments in General Target and Dalny with Father’s promise prior to his marriage with Lavien because subsequent to the promise, these were the only 2 companies which Father arranged for shares to be given to his children in more or less equal proportions after they had attended the wedding. Indeed, it was Anthony’s evidence that before the allotment, Father told Kathleen, Cynthia and Anthony that some shares would be given to them and had asked them to sign various documents in relation to the allotment. If it was indicated to them that shares would be “given” to them, and there was no suggestion that they would be held on trust, it was plain that was Father meant was that the shares would be gifts.

161.  Cynthia’s denial in cross-examination of the family meeting in December 1991 must be viewed with some degree of suspicion. There was no explanation from her as to why despite filing many rounds of witness statements in these proceedings, she did not see fit to take a stance on the conversations.

162.  Mr Lam made the point that Father’s assertion in his witness statement that Kathleen, Cynthia and Anthony “had no argument with my marriage to Lavien and they all gladly attended the wedding ceremony and banquet” was incredible, as this was inconsistent with his earlier acceptance that Anthony opposed the marriage. I need not come to a conclusion in this regard. In the absence of live evidence from Father, I do not find his bare assertion to be of sufficient weight to lead me to reject Anthony’s account of events.

163.  In relation to the allotment of 120 shares to Cana on 2 July 2008 and the transfer of 1 share to Anthony from Candy on 29 July 2008, Anthony and Cana’s evidence was that these were done pursuant to Father’s promises. I agree with Mr Lam that their evidence should be accepted:

(1)  Father’s intention in 2007/2008 was clearly that he would gift his shares to Anthony and Cana.

(2)  Father likely intended the shares to be shared amongst his children or family members. The allotment of 120 shares fitted the existing system, as this represented 4 portions, for Cana and her 3 children.

(3)  It would not make sense for the shares to be held on trust. There was no reason to introduce yet another nominee (namely, Cana).

(4)  Whilst the allotment to Cana had reduced the interest of the existing shareholders, this was explicable on the basis that Father believed the other shareholders would follow his wishes and consent to it.

164.  For the transfer of 30 shares in 2009 from Kathleen to Anthony (together with 120 shares in Dalny and 2 shares in Harvest Win), it is common ground that this was done because Kathleen was in financial trouble after losing a lot of money from her investments, and the transfers were to avoid her assets being put in jeopardy. The difference between the parties’ cases is that Father claims this was his idea and that Anthony would still hold the shares on trust for him. Anthony’s evidence is that it was his idea and they were outright transfers to him.

165.  I agree with Mr Lam that since I conclude that the shares in these companies were not held on trust by Kathleen for Father, that is the end of the matter. Father would have no claim in respect of the shares transferred from Kathleen to Anthony. It would follow that the line of cross-examination as to whether the shares were held by Anthony on trust for Kathleen, or were “purchased” by Anthony who claimed to have paid off debts for Kathleen, is irrelevant for the present proceedings. I simply record Anthony’s evidence in this regard:

(1)  Around later 2008/early 2009, Kathleen had lost substantial amounts from her investments and dealings in securities during the financial crisis. There was litigation against Kathleen in relation to this.

(2)  Over the years, and on this occasion as well, Anthony helped Kathleen by repaying money for her. Cana also helped Kathleen repaid her loans. An IOU was signed between them.

(3)  Therefore, during a conversation between Kathleen and Anthony regarding her financial condition, it was agreed between them that the shares and assets held by Kathleen would be transferred to Anthony (以股代債).

(4)  Anthony later (in December 2008) informed Father about this arrangement as a matter of courtesy, because Father had originally gifted these shares to Kathleen and so that Father would not think it is strange that Anthony had extra shares.

(5)  Given Anthony and Kathleen are siblings, they did not calculate precisely the value of the shares that were transferred to Anthony. Anthony claimed that the amount of debt owed by Kathleen was about HK$2 million, and while the properties held by General Target, Dalny and Harvest Win were worth a few million dollars, HK$400,000 and around HK$1 million respectively, Kathleen only had a small percentage of the shares in the companies. These companies were also subject to mortgage liabilities and/or directors’ loans at the time. Taking into account the above, Anthony believed what he had paid off for Kathleen would be more than the value of the shares which Kathleen transferred to him.

166.  Anthony and Cana’s case is supported by Father’s position adopted in the Divorce Proceedings.

K.5  Silver Door (HCA 726/2015)

167.  On 18 October 1993, 998 shares in Silver Door were allotted to General Target. This allotment was made on the same day as shares in General Target were allotted to Father’s children (Kathleen, Cynthia and Anthony), Lavien, and Dalny. I agree with Mr Lam that the inference was that it was Father’s intention for Silver Door to be ultimately held by the shareholders of General Target. Otherwise there would have been no need to allot shares to General Target simply to have yet another nominee. Indeed, the number of shares allotted to General Target (998 shares) was significantly more than the shares in the 2 original nominees (MKL Nominees and MKL Agencies) (each holding 1 share), which also suggested that General Target was not a nominee. Given my finding above that the General Target allotments were intended as gifts, it follows that the Silver Door allotments were likewise gifts.

168.  As to the transfer of 999 shares to Anthony and 1 share to Cana on 10 April 2008, that was the date on which Father caused the shares in various companies to be transferred to them – see Shareholding Table. Mr Lam submitted, and I agree, that Father’s intention must be the same in respect of all these companies, namely to divide his assets first in light of the likely divorce by Lavien to avoid argument amongst his two households, and as gifts to Cana becoming pregnant with his first grandson.

169.  Anthony and Cana’s case is supported by Father’s position adopted in the Divorce Proceedings.

K.6  Harvest Win (HCA 1230/2015)

170.  Father’s claim only pertained to the 2 shares transferred by Kathleen to Anthony in January 2009. This was addressed above with the transfer of the General Target shares.

171.  Anthony and Cana’s case is supported by Father’s position adopted in the Divorce Proceedings.

K.7  Dalny (HCA 2426/2015)

172.  In relation to the allotments on 20 September 1988 and 1 July 1994:

(1)  Anthony’s evidence was that: (a) since June 1988, Father had made repeated assurances to Madam Lam that he would take care of their 3 children; (b) when the 1988 allotment was made, he was not aware of it; (c) it was only after he returned to Hong Kong in around 1993, Father told Kathleen and Anthony on one occasion that he had allotted shares in Dalny to them and will continue to allot shares to them and to Adrian.

(2)  Anthony’s evidence explained the 2 allotments in 1988 and 1994. I accept his evidence. Father’s case theory did not explain why he had to allot shares to his children equally. As Mr Lam submitted, it would not make sense for the children to all be Father’s nominees, especially when: (a) Father had been holding the overwhelming majority of the shares before 1988 together with Candy as his nominee; (b) there would have been no point to alter the shareholding structure repeatedly by allotments if all of the children were nominees; and (c) the fact that Candy was holding her 1 share on trust for Anthony since 12 May 1988 was inconsistent with the suggestion that all the shares were intended to be held on trust for Father.

173.  On 30 November 1994, Father transferred all his 200 shares to MKL Nominees, and had MKL Nominees execute a DOT in favour of his children in equal shares. As Mr Lam submitted, Father’s intention was clear: he no longer intended to retain any beneficial interest in Dalny. This suggested that he did not intend the allotments to other family members to be held on trust.

174.  On 28 November 2003, MKL Nominees transferred all its shares to Kathleen, Cynthia, Anthony, and Lavien. Lavien executed a DOT in favour of Adrian and Andre (in equal shares). Whilst these transfers did not accord with the DOT executed by MKL Nominees, the intention was clear. From that point onwards, Father’s children would hold the shares in equal proportions.

175.  As to the transfer of 1 share held by Candy to Anthony on 4 July 2007, Anthony explained that after Candy left the Firm in 2004, in early 2007, during a casual telephone call with Candy, she mentioned that she did not want to be the shareholder or director of any of the various companies relating to the Lam family. Anthony discovered that Candy still held 1 share in Dalny as trustee and she had executed a DOT in favour of Anthony long ago on 12 May 1988. The instrument of transfer and bought and sold notes signed by Candy were also kept in Dalny’s file in the offices of the Firm. He therefore signed on the instrument of transfer and bought and sold notes to effect the transfer. I accept Anthony’s evidence.

176.  As to the allotment of 480 shares to Cana on 2 July 2008, this was done on the same day as the allotment of shares in General Target to her. This was addressed above.

177.  The transfer of 120 shares from Kathleen to Anthony in January 2009 was addressed above with the transfer of General Target shares.

178.  Anthony and Cana’s case is supported by Father’s position adopted in the Divorce Proceedings.

K.8  Elegant Fund (HCA 2427/2015)

179.  On 30 April 1993, Candy and Lavien were the 2 registered shareholders, each holding 1 share. Lavien executed a DOT in favour of Anthony. She accepted that, upon signing this DOT, she held the share on trust for Anthony, not Father. As stated above, Father no longer claims against this 1 share.

180.  This DOT contradicted Father’s case that he intended to retain the beneficial ownership of all the shares in Elegant Fund. If he had intended for this 1 share to be held by a nominee, he could just have Lavien be one.

181.  On 23 August 1994, the 1 share held by Candy was transferred to Anthony. Since Anthony was already the beneficial owner of the other share, it would make no sense for Father to intend for this share transferred to Anthony in 1994 to be held on trust for himself. There would have been no point for the transfer.

182.  Anthony’s evidence was that: (1) Father was pleased that he decided to study law and was admitted to the PCLL programme in the summer of 1994. The transfer of 1 share by Candy to Anthony was a reward for this; (2) since then, Father had from time to time told Anthony that upon the commencement of the PCLL programme, Father would distribute some assets to Anthony and give him more assets if he could complete the course. I accept his evidence.

183.  On 15 November 1994, Father caused Elegant Fund to allot 98 shares to Anthony. It is more likely than not that this was part of Father’s reward to Anthony for taking up the PCLL course. If Father’s intention was to have the shares held on trust for him all along, there would have been no point for this allotment.

184.  Anthony and Cana’s case is supported by Father’s position adopted in the Divorce Proceedings.

K.9  Jollida (HCA 2428/2015)

185.  The shares in Jollida were all along held by Candy and Annie (each holding 1 share). On 7 June 1994, Father issued a letter to them stating that the beneficial owner of the shares was Dalny. Annie accepted in cross-examination that she held the share on trust for Dalny. Mr Lam submitted that it necessarily follows that Father cannot have any claim over the Jollida shares.

186.  I note that Father’s pleaded case is that the letter was not intended to have, and did not have, the effect of transferring the beneficial interest in the Jollida shares to Dalny. His witness statement in that action did not explain why.

187.  I do not believe the contents of Father’s letter is necessarily inconsistent with Father’s case, which is that all the Dalny shares were held on trust for him. Stripping of all the legal niceties, Dalny may loosely be regarded as Father’s company and in turn alter ego.

188.  Regardless, Candy and Annie transferred their 1 share to Cana and Anthony on 10 April 2008. This was addressed above in relation to all the shares transferred on this day.

189.  Anthony and Cana’s case is supported by Father’s position adopted in the Divorce Proceedings.

K.10  Gold & Silver (HCA 1230/2015)

190.  The only relevant transfer was the transfer of 1 share each to Cana and Anthony from MKL Agencies and MKL Nominees on 10 April 2008. This was addressed above in relation to all the shares transferred on this day.

L.  Father’s claims over the underlying properties or assets

191.  These claims were not pursued by Father.

M.  Disposition

192.  Father’s case is inconsistent with the two overarching points highlighted in sections H and I above. I also accept Anthony and Cana’s evidence on the transfers and allotments of the shares to them. Father’s claims in these actions must therefore fall to be dismissed in their entirety.

193.  Costs should follow the event. I order Father to pay the costs of Anthony, Cana and their corporate vehicle Defendants in these actions (including any costs reserved), to be taxed if not agreed, with certificate for two counsel.

194.  I thank counsel for their assistance.

Annex – Shareholding Table