T v. SHIU WAI TUEN

HCA 2229/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2229 OF 2007

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J U D G M E N T

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Introduction

1.  The Plaintiff’s claim is for the return to her by the Defendant of $17.8 million which the Defendant accepts that he received.  Her case is that $9.5 million, comprising three separate payments of $1.5 million, $4 million and a further payment of $4 million were loans repayable on demand.  The balance of the claim, in the total sum of $8.3 million, was extorted out of her by means of threats that unless she paid what he asked for he would publish photographs and video of them having sexual intercourse which would be brought to the attention of her wealthy boyfriend by whom she has two young children.  It is said by her that she felt obliged to pay him $8.3 million, paid in five separate payments.  These were one of $1.5 million, another of $2 million, a third of $2.5 million, a fourth of $300,000 and finally one of $2 million.

2.  Before I set out the background to all of this, suffice it to say for the moment that the Defendant’s pleaded case is that all of these substantial payments were gifts to him, which are not repayable, arising out of their relationship, although he accepts that if he made any substantial profit out of the various amounts of money given to him by the Plaintiff, it was tacitly recognised that he might be expected to repay what she had given to him.  Nevertheless, that possibility was not one that would ever be expected to give rise to any legal obligation on his part to do so.

3.  The Defendant has a counterclaim against the Plaintiff for damages to be assessed for malicious prosecution.  The Plaintiff says that eventually she plucked up sufficient courage to report the Defendant to the police for blackmail.  She gave them a witness statement based on which the Defendant was arrested and held in custody for 48 hours before being bailed.  Eventually, having taken legal advice the police decided to withdraw the prosecution and the Defendant was unconditionally released.  The Defendant says that the Plaintiff lied to the police who then arrested him based on completely false allegations.

4.  The Defendant says that what caused the Plaintiff to turn against him in this way was that he decided to marry his girlfriend, a much younger woman than the Plaintiff, and that these false allegations, now repeated at the trial, are motivated by the Plaintiff’s desire to exact revenge because he had decided to terminate their relationship.

5.  In its briefest outline, this is what the action is all about.  It’s outcome must largely depend on whose evidence I accept.

The Parties’ Relationship

(i) The engagement of the defendant to investigate the Plaintiff’s boyfriend

6.  The Plaintiff’s long-term boyfriend is a wealthy and well-known Hong Kong businessman.  He lives with his wife and children. The Plaintiff, whose was born in 1962, came to Hong Kong from the Mainland, in 1979 when she was 17 years old.  Initially, she worked in a factory but then trained to become a beautician.  She found employment in a hotel and it was there that she met her boyfriend.  She entered into a relationship with him and now has two children by him aged 13 and 10.  She lives alone with her children.  Since 1996, she has acquired sufficient capital to make investments of her own on the Mainland.  These investments, which include an interest in a hotel, are operated by friends of her’s and she is able to get a return on the profits as a result which she has become independently wealthy.

7.  In 2005, she had reason to suspect that her boyfriend was having an affair with another woman.  She decided to have him investigated to see if her suspicions were true.  A friend of her’s, a Miss Hui, introduced her to the Defendant who was working as a debt collector and private investigator.  Miss Hui had used his services in the past and must have found him suitable to introduce to the Plaintiff.  He met the Plaintiff and Miss Hui at a hotel in Tsimshatsui East and discussed her problem with her.  He gave her his business card [A1/112] which described him as a “Legal Consultant” working with the Kam Ho Investigation Company.  She asked him about his charges and he said it would cost her $70,000.  She gave him details of her boyfriend’s telephone number which he was then able to monitor and pass on to her a log of his incoming and outgoing calls.

8.  Later on as his investigation went further he showed her a video recording of the woman that she suspected was her boyfriend’s new girlfriend.  This showed the woman naked in bed on various occasions with other men having sex with them.  The Defendant said that it would cost her a further $400,000 for him to provide video evidence of her boyfriend with this woman which he could obtain for her.  He said that he was able to hide a camera and film them whilst they were having sex.  For this fee he could also put her boyfriend under pressure by releasing details of his extra-marital activities to the press.  She says that she was rather confused about what she really wanted from the Defendant but in the end she paid him the additional $400,000 for these further investigations.  She could not remember if she paid $400,000 in one or two instalments but she did give him the additional $400,000.

9.  After she had made this payment, she became frightened by what the Defendant was capable of doing to her boyfriend.  She changed her mind because she did not want him to go that far and so instructed him to stop his investigation which he did.  She did not ask for the $400,000 to be repaid to her.

10.  Although she had no further use for his professional services, she says that he continued to telephone her.  According to her, he showed concern for her and was worried that she might become bored if her boyfriend was neglecting her.  He said she should go out a bit.  She says that she was unhappy at the time and started seeing the Defendant socially.  They would go for walks and for drives in his motorcar.  He would call her frequently and they started a sexual relationship although their sexual encounters were far and few between.

11.  The Defendant’s version as to the nature and intensity of their relationship differs markedly from her’s.

12.  He says that he was 24 or 25 years old when he first met the Plaintiff through the introduction of Miss Hui.  He was a debt collector at the time.  He accepted the instruction to investigate her boyfriend in order to discover whether he had another girlfriend.  He did this for one or two months and would regularly report to the Plaintiff on what he had found out.  He says that she paid him $400,000 for his services given in two instalments.  As a result of their frequent contact they became friendly. He would call her by her English name and she called him Wai Chai.  They would meet on 4 or 5 occasions in the course of a week and he also provided her with reports over the telephone.  She had given him the name of the woman that she suspected her boyfriend to be having an affair with.  He says that he took no photographs nor did he have any video recording of the woman concerned.  He says that he was not a professional private investigator and the Plaintiff knew that when she engaged him.  After a while she told the Defendant that she had decided to break-up with her boyfriend and asked the Defendant to stop his investigation which he did.

(ii) The Relationship After the Termination of the Investigation of the Boyfriend

13.  The Plaintiff’s evidence is that after she started to go out with the Defendant, he began to call her repeatedly.  This was in about August and September 2005.  She says that they had sex on about five or six occasions. They would usually go to a hotel for that purpose.  She says that the last time that they had sex was at the end of 2005.  She also says that there were no feelings of affection between them and anyway, he already had a girlfriend which she knew about.

14.  In about September and October 2005, he started to borrow money from her.  Firstly, he asked her to lend him $1.5 million to help him register a company.  Her evidence is that he told her that he would repay her at the rate of $150,000 a month.  He told her that he was going to establish a “financial company”.  She transferred the $1.5 million from her HSBC account to his account on 8 October 2005.  After she had transferred the money she said that he would call her frequently and that they would go out from time to time.  Despite his promise to repay her at the monthly rate of $150,000 he paid nothing.  He said that his new company was not making anything. 

15.  In late November or early December 2005, he told her that he was having family problems.  His brother-in-law in Australia had been arrested for drug trafficking.  At the start of December, by which time he had repaid nothing of the first loan, he met her at Hung Hom and brought a young child with him who he said was his sister’s son.  He told her that he wanted all the family to be together at Christmas and that he needed $4 million to use as bail money for his brother-in-law [the child’s father] in Australia.  She says that she was moved on seeing the child.  She has children of her own.  She told him that she would lend him the $4 million so that his brother-in-law could be released from custody.  On 8 December 2005, she transferred this amount from her HSBC account to his account.  She says that he took the money and went to Australia to arrange bail.  He told her that he needed to remain in Australia for some time.

16.  The way she described the Defendant’s absence in Australia was that he “needed to guard” his brother-in-law meaning, I presume, that as his surety he needed to see to it that he attended court when required to.  She said that he kept calling her for more money.  At the beginning of January 2006, after she had told him that she now wanted the $4 million back, he said that his brother-in-law had absconded and he could not get the money back to her. 

17.  The following month, in February 2006, he told the Plaintiff that he was having problems with his company and was in no position to return the money to her.  Shortly after that he telephoned her again to say that his partners were withdrawing from the business and that he needed a further $4 million to buy them out.  In mid-February 2007, she did as he asked and transferred a further $4 million to his account.

18.  That payment meant that in the course of just over four months, the Plaintiff had, on her account, lent the Defendant who she had met only a few months earlier, $9.5 million.  On his version, as I will relate in a moment, these were gifts stemming from their sexual relationship, with a vague understanding that if he made any money out of these gifts, mostly used to fund business ventures, he might re-pay the capital to her.

19.  The next phase, which lasted from 14 August 2006 until 11 October 2007, relates to five further payments made by the Plaintiff to the Defendant totalling $8.3 million which the Plaintiff says were the result of blackmail by him.  These payments, all agreed by the Defendant as having been received by him, were on 14 August 2006 for $1.5 million, the 25 September 2006 for $2 million, the 28 December 2006 for $2.5 million, a payment in cash of $300,000,000 in either May or June 2007 and finally, a payment of $2 million on 29 August 2007.

20.  Her evidence is that he telephoned her in June 2006, this being about four months after the previous payment to him of $4 million.  She has described what followed as a nightmare.  They went out.  He told her that he had been having problems with his company.  Earlier, she says in March or April 2006, she had tried to press him for repayment of what she had lent to him.  She telephoned his office number.  She left a message and he called her back.  He was furious with her because she had telephoned and because she had asked for repayment.  He threatened to make trouble for her with her boyfriend by telephoning him at the massage establishment that he used to go to.  He also told her that he had video evidence of them having sex and asked whether she wanted this material released to her boyfriend for him to see.  When she heard these threats, she became frightened.  She dared not press him further for repayment of what she had lent him.

21.  In June or July 2006, he telephoned her again. He told her that he would repay her soon.  Shortly afterwards he drove her to an open piece of land at Sham Tseng.  He said he wanted to buy it to operate as a car park.  In that way, he might be able to repay her.  In order to purchase the site, he said that he needed $1.5 million.  She told him that she had no more money — that she had lent him all that she had.  He responded to this by reminding her that he had kept the video recordings of them together.  As she gave this evidence, she began to cry, about which I will have more to say when I assess the evidence of both of them.  Fearing that he would show the video evidence to her boyfriend, she transferred a further amount of $1.5 million to him.  This transfer, it is agreed, took place on 14 August 2006.

22.  She told me that a month later, he telephoned her again saying that he needed a further $2 million from her for work to be done on the site at Sham Tseng.  She told him that she had no money but he persisted and threatened her again, using the same threat to release the video to her boyfriend.  She became so frightened that she let him have the money which she transferred to him on 25 September.

23.  In December 2006, she said that he telephoned her, on this occasion from England.  He told that he had carried out some work in England for a criminal gang and that he was returning to Hong Kong by ship (I presume by cargo vessel) in order to avoid detection.  He had alot of sterling with him and needed HK$2.5 million to exchange for the Sterling.  He told her that he would repay her in due course.  She tried to resist paying him but again he threatened her and fearing the worst, she felt compelled to transfer $2.5 million to his account which she did on 28 December 2006.

24.  After this payment, she lost contact with the Defendant for sometime after which he contacted her saying that he was encountering problems and could not repay her.  This was all at the beginning of 2007.

25.  In the middle of 2007, he telephoned her asking for more money.  On this occasion, he said that he needed $5 million.  The reason why he needed it was that he had accepted a job to find who it was who had splashed red paint at the premises of Mr Cheng Yu Tong (the wealthy businessman) and that he needed to put up a very substantial reward to find out who had done this.  This incident had been reported in the media so she knew about it.  She told him that there was no way by which she could come up with such money.  A little later, in May or June 2007, by arrangement they met at Wylie Road, Kowloon.  He told her that he needed money to pay his staff their salaries.  She took $300,000 in cash from her safe at home and gave it to him.

26.  The 8th and final payment was on 29 August 2007 which followed a trip that she had taken to Singapore between 1 and 7 August to look for schools for her children.  She says that before she departed the defendant had approached her to lend him more money.  She said that she needed to go to Singapore to find schools for her children.  He followed her there and on 6 August, they met at her hotel and had a meal at a restaurant across the road.  He told her that he needed $5 million.  She said that she had already raised that amount for him and that was all that she could do.  They met the following day.  He gave her the address of his hotel where she went to see him.  They had a meal together and did some shopping.  He said that he needed the money so as to raise the reward in order to final out who had splashed paint at Mr Cheng Yu Tung’s premises.  Later that day, she returned to Hong Kong and three weeks after that, on 29 August, again under the compulsion of his threats she provided him with a further $2 million.

27.  Matters turned more nasty when she says threatening posters appeared close to her children’s school in Hong Kong which she suspected had been done by him in order to dissuade from pressing him to repay her and in order to persuade her to give him more money.  At around this time, on 7 October, the Defendant came to see her and gave her a puppy which she paid him for.

28.  At about this time, she also began to receive threatening telephone calls and text messages.  This, combined with what she perceived were threats towards her children through the posters put up close to their school, she decided to see a solicitor.  She felt she now needed to do something about what had been going on.  On 11 October, she reported the Defendant to the police for blackmail.  She gave them witness statements on 11 and 15 October [B1/58 and 76].  On 22 October, the police arrested the Defendant at his home where he was living with his wife, he having married her on 20 June 2007, and searched the premises.  He was interviewed under caution by the police at great length on the day of his arrest, the content which I need to consider in due course.  As a result of what the Defendant had said in his interview, the police took a further statement from the Plaintiff on the following day the 23 October [B1/97].

29.  To complete the chronology, charges were laid against the Defendant on 23 October and the following day he appeared at the magistrates court where he was bailed.  He had spent two nights in custody.  On 26 October, an ex parte Mareva injunction was obtained from Wright J which I continued on 2 November 2007 freezing such assets as the Defendant had.  On 29 October and on 26 November, the police took a 4th and 5th witness statement from the Plaintiff whilst in the meantime seeking legal advice.  As the evidence stood, in terms of any prosecution, the Defendant was denying all suggestions that this very considerable amount of money had been obtained by criminal conduct.

30.  On 18 December, the Defendant answered his bail at the magistrates court and the police told the magistrate that they were offering no evidence against the Defendant as a result of which he was released unconditionally.  The officer-in-charge of the case has said that the charges were dropped following legal advice.  What I get from this is that, in the prosecution’s view, the evidence was not sufficiently strong to secure a conviction.  The Plaintiff has said that it was as a result of threats by text and telephone that she told the police that she was not prepared to come to court to give evidence.  The officer-in-charge, who gave evidence before me, said that he had heard of no report that the Plaintiff, the principal prosecution witness, had said that she was not prepared to come and give evidence.

The Defence Case As Put to the Plaintiff

31.  The Plaintiff has been closely cross-examined by Mr Chu, on the Defendant’s behalf.  The main thrust of the cross-examination was that all of this enormous amount of money had been given to the Defendant by her because she wanted to.  These amounts were gifts and in order to keep him she was prepared to give him these amounts so that he might invest them in business ventures related to money lending and debt collecting.  It was only after she had returned from Singapore when she learnt that he had married and feeling betrayed by this she plotted her revenge on him by falsely accusing him of blackmail.  She denied all of this and made the point that all along she knew that he had a girlfriend who he intended to marry.  It meant nothing to her that he had a girlfriend.

32.  She was also questioned on why, if the initial payments were only loans on her version, she did not get him to sign an IOU evidencing the fact that these payments were loans and not gifts.  She said that it would be embarrassing to get him to sign and IOU.  She was also asked why, if these were loans, she did not charge him interest.  She said that she did not know much about such things.  She was also asked why there was no fixed time for the repayment of these loans.  She said that he had promised to repay after a month.  It was also pointed out to her that she had taken no security for the loans.  She said that she trusted him to repay her.

33.  Mr Chu questioned her about their meetings in Singapore.  As will be seen presently when I consider the Defendant’s evidence, he said that they continued their physical relationship there, her evidence being that he had followed her to Singapore and was demanding more money from her.  Mr Chu asked why she had failed to mention this Singapore visit to the police in the course of her first two witness statements and only referred to it after the Defendant had mentioned this to the police in his recorded interview under caution, as a result of which the police asked her about it.  Her explanation for her failure to mention it was that she had forgotten about it.

34.  Mr Chu also pointed out to her that in her first affidavit in this action in support of the Mareva injunction, she neglected to mention the visit to Singapore.  She repeated that she had forgotten about it.  Mr Chu put it to her that she had deliberately suppressed this evidence.

35.  The Defendant, as I will come to presently, told the police that he had in fact repaid the Plaintiff $3 to $4 million.  Mr Chu put this to her which she said was not true.

36.  As to when she first learnt that the Defendant had married, she said that she first came to know of this at the police station.  It had played no part in her reasons for reporting him to the police.  The only reason was that he was blackmailing and threatening her.

37.  As to the prosecution being withdrawn, she repeated in cross-examination that she had told the police that she was not prepared to give evidence which, presumably, was why the police had no option but to offer no evidence against the Defendant.

The Defendant’s Evidence

38.  The evidence about why and how the parties met, through the introduction of Miss Hui, is not in dispute.  He told me that at the time he was a debt collector rather than a private investigator.  He says that after a two to three-hour discussion of her problem and suspicions about her boyfriend, he accepted the job of following him.  She paid him $400,000 for his services paid in two instalments.  He followed the boyfriend for one or two months and would report back to her on what he had seen.  She had given him the name of the suspected girlfriend as well and he just followed and reported back.  When he saw the boyfriend and the girlfriend, he would report this to the Plaintiff by telephone and then he would meet the Plaintiff at night and they would discuss what he had seen in the course of the day.  As a result of these frequent meetings, four or five times a week, they came to be on friendly terms.  She called him Wai Chai and he would call her by her English name. After about two months, she told him that she had decided to break up with her boyfriend and called off the investigation, which is what happened.  He had taken no video or photographs of the boyfriend nor had he told her that he could put pressure on the boyfriend.  He says that during his two months investigation, the Plaintiff had been very unhappy about her relationship with her boyfriend because he was being unfaithful.

39.  By the time that the investigation finished he and the Plaintiff were on good terms.  She would cook for him and prepare healthy soups.  This was in about July 2005.  He says, “she was good to me and I treated her well”.  He would buy things for her and they would frequently speak on the telephone.  They would go out for a drive and have drinks together.  He was 24 or 25 years old and she was 43.  He says that their relationship together, his evidence of which I will relate more fully in a moment, was very good from July 2005 until October 2007, he having married his wife in Australia in June 2007.  When she learnt of the marriage from one of his colleagues at his office things turned sour.  She refused to speak to him.

40.  He says that they first had sex in about August 2005.  They would go to hotels.  He has lost count on how often they had a physical relationship.  They also had sex at Ocean Pointe, a flat that he had rented.  He first rented this in February 2006 and kept it for about four or five months.  He told the Plaintiff that he was living with his family at Tuen Mun.

41.  He was asked in his evidence in chief about the $17.8 million.  He agrees that he accepted each of the payments comprising this total.  He says that she asked for his account number and she paid the amounts into it.  He says that she gave him this money to do what he wanted with it in business.  Any business that he wished to start up.  In relation to the first payment of $1.5 million, he says that he wanted to use it to start a debt collecting business.  They discussed it for about two weeks before she transferred the money into his account on 8 October 2005.  He remembered that it was about the time of his birthday.  There was not much discussion.  She said that she wanted to support him.

42.  As to the $4 million on 8 December 2005, she had told him that she would support him in any business that he wanted to start. He says that she gave him this money to do anything with it.  She did not want him to be badly dressed.  He says that using the money, he started to buy expensive clothes and accessories and to gamble heavily.  He bought clothes, watches and gambled in Macau.  He did not tell her about that because there was no need to do so.  For her part she never asked him about his business.

43.  As to the second payment of $4 million on 17 February 2006, she told him that she wanted him to buy a flat close to her’s at Homantin.  This is what she told him, but there was not much discussion about it.  Once he had the money, he did not buy a flat, instead he went on a spending binge and gambled.  He bought between six and eight cars.  A Porsche, a BMW, a Mercedes-Benz and a Volkswagen Touareg amongst others.  He also became addicted to gambling.  This is not something that the Plaintiff knew about in the beginning.  At this time, they were seeing each other three to four times a week.  They also spoke on the telephone daily.

44.  As to repayment of these enormous amounts of money, he says that this was never spoken of.  There were no terms for repayment, although she did say to him that if he flourished he ought to give her something back.

45.  One of the projects that he had looked at investing in was renting spaces for car trading.  He found a property at Sham Tseng and he showed it to her.  He told her that this was what he was planning and she gave him the money.

46.  He was asked what he knew of her own financial position.  She had told him that her boyfriend had given her shares in an hotel on the mainland and that she also had two factories on the mainland.  She had to pay $1 million each month in salaries for her employees on the mainland.  He says that the flat where she was living was worth $30 million.  There was no doubting her wealth.

47.  He accepts that although she had encouraged him to use the money that she had given him wisely on business ventures, he had got out of control with his gambling and excessive personal spending.  In the course of their talks, he had discussed with her the possibility of renting an exhibition hall for motor trading, rather like the project a Sham Tseng that he had spoken of.

48.  At no time had he threatened her to get money from her.  She was showering him with these large amounts.  Then in August 2007, she asked him to go to Singapore to keep her company there.  He had been married for two months by then.  He did not want to go with her.  He said it seemed that this would go on forever.  He wanted to break out of this.  He told her that he did not want to go to Singapore, but he used so much of her money that he could not get the upper hand and have his own way.  He had to do as she asked and so he went to Singapore.  Once he got there, they had a meal out together.  Then he went with her to her hotel room where the children were sleep.  He had booked another hotel for himself.  The next day, she went to his hotel.  They had some food and went shopping.  She had told him that if he came to Singapore, there might be a business opportunity for him over there.  She told him that she had friend who was bankrupt and that people in Singapore owed him money.  He could help and earn money for himself by looking for these people. In truth, there was no such person.  He felt that she had made this up to provide him with an incentive to join her in Singapore.  In the event, they just had fun together and had sex in his hotel room in Singapore.  At this time, she had yet to find out that he was married.  They were still on very good terms.  He had not asked her for any money whilst they were in Singapore.

49.  When they got back to Hong Kong, she gave him a further $2 million.  He told her that he wanted to set up a company.  This was on 29 August 2007. 

50.  On 7 October, he bought her the puppy.  It was a gift.  He had paid for it himself.  It cost $3,800.  She did not reimburse him for it.

51.  He explained how she had in addition been extremely generous to him with presents.  Louis Vuitton bags, Hugo Boss shirts, a mobile telephone, expensive shoes, three Rolex watches.  In all he thinks that she gave him more than 200 gifts.  He sold most of them within a day or two and turned them into cash which he would use to gamble amongst other wasteful expenditure.

His Arrest

52.  He described his arrest on 22 October 2007.  The police arrived at about 6 a.m.  His wife was there.  They searched the home. They stayed for about 1½ hours.  About 10 police officers.  The neighbours saw them.  The police removed $300,000 in cash and his mobile telephone.  They put him into the police vehicle.  He wore a black hood over his head, but the neighbours knew it was him.  He was in the custody of the police for 48 hours. Two nights in custody.  He was bailed by the magistrate on 24 October.  Since his arrest he has lived off his savings and has had to work as a hawker in the New Territories.  The mortgage on their home is paid by his wife.  She is an accounts clerk.  Since his arrest and the invasive and sensational publicity caused by this case, he has lost his friends as he has lost his business associates.

How His Relationship With the Plaintiff Ended

53.  He was shown the threatening messages which the Plaintiff has spoken of and had suspected had come from him and been posted close to her children’s school by him or on his behalf.  He denied that he had done any of this.  As to the circumstances of her finding out that he had married his wife, he said that the Plaintiff had gone to his office and that he had been betrayed to her by one of his colleagues.  He heard that it was a colleague by the name of Lai Sze Miu.  Miss Hui told him that the Plaintiff had given Lai money to tell her.  When she learnt of the marriage, the Plaintiff became furious.  He spoke to her to try and explain himself on Miss Hui’s telephone and told that he would return the money to her in order to try and placate her.

54.  Finally, he was asked about his police interview which he accepts is an accurate account of what he told them and that what he told them was the truth. 

The Defendant’s Cross-examination

55.  A point was developed by Mr Fung, on the Plaintiff’s behalf, that the Defendant knew that he was going to be in trouble with the police before his arrest because he knew that he had committed the offences with which he was charged.  Mr Fung based this on the fact that he had consulted solicitors on 1 October and paid $25,000 on account of costs.  This suggestion came as a result of a receipt [B2/415] from those solicitors that he had paid this amount on 1 October.  He denied that this was the case and said that the receipt had been incorrectly dated.

56.  On 1 October, he and his wife had flown to Tokyo and returned to Hong Kong on 5 October when he had to face the music, so to speak, with the Plaintiff who he spoke to from Miss Hui’s telephone.

57.  As to his relationship with the Plaintiff, he says that he had formed an emotional attachment to her because she was kind and generous towards him but, he also agreed that the money was a factor.  He was disarmingly frank about what went on between him and the Plaintiff.  He had never seen so much money before in his life.  He was worth no more than $400,000 to $500,000 and contemplating marrying his girlfriend when he first met the Plaintiff.  He said that he was greedy and liked to spend.  He also liked to gamble and he could indulge himself with the millions of dollars that the Plaintiff had given him.  It was put to him that he spent these millions because he was confident of getting more from her.  He denied that this was so at the beginning but as time went on he felt that she would give him money whatever business he suggested to her that he might wish to start up.  He said that if he did well it would be only right that he would return money to her. As things have turned out he has no money.  Whilst accepting that he has been greedy, he says that he did not deserve to be treated in the way that he has been treated by the Plaintiff who has falsely accused him of serious criminal offences and put him through the mill.  Apart from the indignity of his arrest and appearance at the magistrates’ court, he has been hounded by the press.

The Police Interview

58.  This is a lengthy interview which the Defendant stands by.  He was questioned by Mr Fung about certain questions and answers that he gave to the police.  At Answer 575 [B2/409-410] he said this “I know that I owe her, but I did not borrow money from her formally, I mean I will pay her back.  But with our relationship at the time, there was nothing, that I can see to show that these (sic) money was borrowed from her.  She did not say that, she just said: “Ah, take it for your use first, give me only when (you) are able to make money”.  At B2/393-394, he told the police that he had repaid her some money totalling $3 to $4 million.  This he did in cash.  He had no record of these repayments.  It was put to him by Mr Fung that these passages in particular demonstrated that he saw an obligation to repay her.  He denied that there was any formal obligation to do so.

Discussion of the Evidence

59.  This is a case where I need to proceed with the greatest of care.  On the one hand, it is inherently unlikely that any woman in her right mind would give away $17.8 million simply for the company of and any sexual pleasure that she might obtain from a young man 20 years younger than her but, this having been said, human nature is such that the most improvident acts of generosity and bad judgment are capable of being committed by individuals when the vast majority of us would strongly counsel against such behaviour and characterise it as quite barmy when measured against ordinary good sense and rational behaviour.  This general view of things must substantially militate against the Defendant’s case that these very large sums of money were gifted to him.

60.  The other side of this, certainly in respect of the $8.3 million allegedly obtained by the Defendant by threats, is that such a serious allegation will require the person making it to provide proof of the most compelling kind.  The basis of this being that the more serious the allegation the less likely it is that it was committed, in consequence of which the court will require to be persuaded by the evidence that what is alleged actually took place.  Whilst the civil standard of proof is applicable, the evidence required to satisfy that standard must measure up to the gravity of the allegation.

61.  Ultimately, it is the content of the evidence of the parties that must guide me to a conclusion as to what evidence I accept and what I reject.  Nevertheless, in all of this, demeanour must play its part, albeit to a lesser extent.  The court will judge the evidence of a witness based on what he or she has said but also on how the witness has given that evidence.

62.  I observed both of these witnesses with great care as they gave their evidence.  The plaintiff appeared in court wearing a baseball cap, the peak of which she had drawn down tightly across her forehead.  She also wore large very dark sunglasses.  I asked her whether she wished to wear these whilst she gave her evidence and she said that she did. Understandably, given the nature of this case and the publicity that it attracted (the press gallery was full), she wished to preserve her anonymity as best she could.  I had already directed that her name on the pleadings and the cause list should be given as “T”.  As a result of her facial features being mostly covered up, I could only see her lips move as she spoke but little else of assistance. I did not have the full benefit of being able to have a view of her facial expressions as she gave her evidence.  What she did on a number of occasions, as she gave her evidence, was to become tearful for a short while before recovering her composure.  I am bound to say that I gained the distinct impression that the tears were more for effect than a true reflection of any distress on her part as she recollected the events that she was speaking of at the time.  My judgment of her was that she was trying to underscore a particular incident by breaking down and crying and by doing so to persuade me that she was speaking the truth.

63.  The Defendant on the other hand, who even on his version of events could never emerge with any credit for what he had done — he had on his case after all made off with $17.8 million of the Plaintiff’s money presumably, because she had developed an extreme emotional and physical attraction for him and he was prepared over a two-year period to take advantage of that.  But on demeanour alone, he presented as a much more believable witness prepared to give a full and frank account of himself and of what he had done.  He presented as an open witness who accepted that he was capable of taking and did take these enormous sums of money that he says this lady was prepared to ply him with on his say so to her that he wished to invest in vaguely hoped-for business projects which he then proceeded to lose on the gambling tables of Macau or on aimless luxury expenditure such as on expensive cars and clothing. His demeanour and body language, as he gave his evidence, carried far more conviction and an air of truthfulness which the Plaintiff lacked and, in saying this, I make every allowance that she as I say, quite understandably, gave her evidence well-hidden under a baseball cap and behind large dark sunglasses.

64.  I need to take this demeanour, in each case, into account as I judge the all-important content of their evidence which needs to be understood against the whole of the relevant background of the case and the inherent likelihood of their conflicting accounts being true or otherwise.

65.  My analysis of the parties’ evidence taken as a whole is that the Plaintiff undoubtedly had become besotted with this younger handsome man.  She was perhaps emotionally vulnerable at the time, having decided to break up with her boyfriend who was being unfaithful to her.  I am satisfied that she was wealthy in her own right through her mainland business interests and decided to take on this young man as a lover who she could indulge with money.  He says that he eventually felt that he became her pet. No doubt in giving him money she did so for him to use and invest in his own business ventures, instead of which he squandered it aimlessly on gambling, fast cars and expensive clothes.  I am completely satisfied that she never expected that this relatively poor young man was going to be able to repay her unless by some chance, so remote that I can exclude it, he became wealthy enough out of any business that he might have ventured into which enabled him to repay her.  This I am satisfied is no basis for any legal obligation by him to repay her.  Whilst the payment of such large sums of money might be presumed to have been paid by her in the expectation that they would be repaid, the evidence in this case has persuaded me that these were outright gifts so that the Plaintiff might indulge herself in their relationship.  The Defendant told the police that he repaid $3 to $4 million.  On the evidence, I am not able to be sure about that and I make no finding on this.  Nevertheless, in all the circumstances in which the $17.8 million was paid by the Plaintiff to the Defendant any such repayment would have been purely gratuitous and not indicative of any legal obligation by him to repay what she gave him.

66.  Where the evidence of the Plaintiff and the Defendant conflicts, I prefer that of the Defendant.  I am certain that at no time did the Defendant blackmail the Plaintiff in the way that she has suggested.  Other than her own word, there is no evidence of this.  In this regard, the Defendant is entitled to point to the fact that he was closely investigated by the police on the Plaintiff’s complaint of blackmail.  He was subjected to a comprehensive interview by the police and he denied all the allegations.  The police have found no other evidence and I am satisfied, that having obtained legal advice, the police decided that they had no case against him and released him unconditionally.

67.  She has said that the reason why the police dropped the case is that she told them that she did not wish to give evidence. This in the context of threats that she says she continued to receive.  I reject this account.  The officer in the case, who gave evidence before me, has said that he was not told that the Plaintiff was not prepared to give evidence.  I am satisfied that if she really had said so, this officer would have known about it and reported it to those from whom he was taking legal advice.  I am satisfied the case was dropped entirely based on the prosecution’s assessment of its chance of securing a conviction.

68.  My conclusion is that after the final payment of $2 million, following the return from Singapore, their relationship was still as it had been for the previous two years, although the Defendant who had married by now was trying to break loose from the Plaintiff.  It was only in October when she found out that he had married that she turned against him. She felt betrayed and having regard to the amounts of money that she had plied him with she decided on a course of revenge by making up a false account of blackmail in her report to the police.

69.  It is significant that she failed to mention the visit to Singapore in her first two witness statements to the police.  This was recent and according to her, he had asked her for more money.  Her excuse that she forgot about it is unconvincing in the context of her claim that the $2 million paid by her on 29 August was referable to his threats in Singapore.  The reason why she did not want to tell the police is that she might then have to explain what they got up to when they were in Singapore.  The fact is that she had invited him to Singapore to keep her company and had sex with him whilst they were there.  His account is truthful and her’s is not.

70.  In making these findings against the Plaintiff and in favour of the Defendant, I have paid great heed to the inherent probabilities that I have already referred to and to the part played by the witnesses demeanour, having given this subsidiary weight as I have described. The facts as they have unfolded have persuaded me of the Defendant’s truthfulness and the Plaintiff’s complete lack of frankness.  Accordingly, I find that the payments comprising the $17.8 million were unconditional gifts and that at no time did the Defendant threaten the Plaintiff to obtain the latter payments totalling $8.3 million.  In such circumstances, the claim must stand dismissed and there must be judgment for the Defendant on the claim.

The Counterclaim

71.  The simple fact is that on my finding, the Plaintiff gave the police an untruthful account in support of her allegations of blackmail as a result of which the police, who acted with complete propriety throughout, arrested, detained and charged the Defendant before offering no evidence against him two months later.  The elements of the tort of malicious prosecution are described in Clerk & Lindsell at 16-12:

“(1) The Defendant falsely and maliciously provided information about an alleged crime to a police officer stating willingness to testify against the claimant and in such circumstances and in such a manner as makes it proper to infer that the Defendant desired and intended that a prosecution be brought against the claimant.

(2) The circumstances are such that the facts relating to the alleged crime are exclusively within the knowledge of the defendant so that it is virtually impossible for the police officer to exercise any independent discretion or judgment on the matter.

(3)   The conduct of the defendant must be shown to be such that he makes it virtually inevitable that a prosecution will result from the complaint.  His conduct is or a nature that ‘… if a prosecution is instituted by the police officer the proper view of the matter is that the prosecution has been procured by the complainant’.”

The way it has also been put is that if someone sets in motion the prosecution and misled the police officer, the informant himself would be treated as the prosecutor rather than the police.

72.  It seems to me that this is precisely what has happened here.  These were false witness statements by the Plaintiff causing the Defendant’s arrest, detention and charging by the police.

73.  All the ingredients of the tort of malicious prosecution have been proved and I will enter judgement for the Defendant on the counterclaim.

Damages

74.  The Defendant had to pay legal expenses in respect of the criminal proceedings laid against him and he must therefore have judgment for the amount that he paid those solicitors being the sum of $ 75,000.  This being by way of special damages.  Additionally, he must be awarded general damages.  The correct approach is that set out by the English Court of Appeal in Thompson v Metropolitan Police Commissioner [1998] QB498.  This is a case for a basic award of general damages of a compensatory nature.  In this case, I will have regard to the humiliating circumstances of the Defendant’s arrest at his home which was seen by his neighbours.  Two nights spent by him in custody.  The worry of the prosecution hanging over his head for two months before he was unconditionally released and the distress caused by the publicity in circumstances were he has had to endure the close attentions of the press.  He has also lost his previous employment and is now in less well-paid employment.  Doing my best, I propose to award him general damages of $600,000.

Interest

75.  On special damages interest will be at half the judgment rate from the date of payment of the solicitors fees to the date of judgment and thereafter at the judgment rate until payment.  On general damages from the date of the writ until judgment at 2% per annum and thereafter at the judgment rate until payment.

Costs

76.  These must be to the Defendant on a party-and-party basis on the claim and on an indemnity basis on the counterclaim.  For the purpose of taxation, I will say that half the costs will relate to the claim and half to the counterclaim.  This in the usual way will be an order nisi.