Pleading
30.8.2002
祥嫂一對兒女鄧翠玉及鄧兆榮周二由律師代為入稟高等法院,控告母親洪金梅,要求法庭聲明洪金梅所指的三百六十萬股祥藝發展有限公司股份,是代表丈夫鄧永祥信託保管,須交代源自上述股份的得益及交回該些股份予鄧永祥遺產管理人。
至 於 今 次 牽 涉 訴 訟 的 祥 藝 發 展 有 限 公 司 , 則 是 鄧 家 名 下 公 司 。 據 公 司 註 冊 記 錄 , 祥 藝 發 展 共 發 行 六 百 萬 股 , 法 定 股 本 總 面 值 六 百 萬 元 , 祥 哥 和 祥 嫂 洪 金 梅 分 別 持 有 二 百 五 十 萬 和 三 百 五 十 萬 股 。 祥 嫂 則 同 時 是 該 公 司 的 兩 名 董 事 的 其 中 之 一 , 另 一 名 董 事 吳 桂 英 ( 譯 音 ) 是 在 祥 哥 去 世 後 才 獲 委 任 。 根 據 當 年 楚 留 香 酒 樓 清 盤 官 司 聆 訊 內 容 顯 示 , 祥 藝 乃 楚 留 香 酒 樓 舖 位 之 業 主 , 祥 藝 在 一 九 八 七 年 以 二 千 萬 元 , 購 入 楚 留 香 酒 樓 所 在 的 物 業 。
小 艾 和 兆 榮 今 次 是 以 祥 哥 遺 產 執 行 人 身 分 興 訟 。 他 們 在 入 稟 狀 中 稱 , 祥 嫂 所 持 三 百 五 十 萬 股 , 乃 分 別 在 八 九 年 七 月 十 日 和 廿 一 日 , 及 九 五 年 六 月 廿 一 日 , 分 三 次 分 配 或 轉 讓 得 來 , 其 中 九 五 年 的 一 次 , 祥 嫂 更 獲 轉 讓 三 百 一 十 五 萬 股 。 他 們 現 要 求 法 庭 作 出 聲 明 , 祥 嫂 所 持 股 份 乃 是 替 祥 哥 所 託 管 。
兩 人 在 入 稟 狀 中 又 指 , 祥 嫂 在 九 五 年 獲 轉 讓 的 股 份 是 以 欺 詐 手 法 獲 配 的 , 故 要 求 法 庭 聲 明 祥 嫂 只 是 替 祥 哥 託 管 股 份 , 或 者 將 該 次 所 配 股 作 廢 。 但 他 們 並 沒 詳 述 指 祥 嫂 欺 詐 的 理 據 。
小 艾 和 兆 榮 又 要 求 祥 嫂 將 其 名 下 股 份 轉 給 他 倆 , 將 他 們 註 冊 成 新 股 東 。 他 們 又 要 求 祥 嫂 交 代 由 她 持 股 所 衍 生 的 利 益 會 計 帳 目 , 及 交 出 所 有 利 益 。 此 外 , 兩 人 亦 要 求 法 庭 裁 定 , 於 九 七 年 十 月 三 日 、 即 祥 哥 去 世 後 五 個 半 月 被 委 任 為 董 事 的 吳 桂 英 之 任 命 無 效 , 祥 嫂 要 將 吳 的 名 字 從 董 事 名 單 中 剔 除 。 兩 人 並 要 求 祥 嫂 作 出 賠 償 。
案 件 編 號 : HCA 3282 / 2002
Pretrial Review
4.2.2006
已故慈善伶王「祥哥」新馬師曾(鄧永祥)九七年過身後,其妻祥嫂(洪金梅)及子女多年來為爭奪祥哥的遺產互相興訟。祥哥子女鄧翠玉(小艾)及鄧兆榮三年半前以祥哥遺產執行人身份興訟,控告祥嫂於九五年以欺詐手法促使祥哥把筲箕灣楚留香酒樓(已清盤)逾五成股份轉名給她,要求祥嫂將股份轉回子女名下,案件現定於下月十三日開審,審期四日。
該案昨日在高院預審,案中三名關鍵人物,包括原告人小艾及兆榮及被告人祥嫂均沒有到庭,各由律師代表,但三人屆時會出庭作供。原告一方亦要求法庭發出證人傳票,傳召一名當時曾被邀出席某次鄧家家庭會議的記者鄭炳華上庭作供,控方指鄭曾見證到祥嫂在該次會議上,曾就楚留香酒樓股權的利益問題承認了一些事實。而祥嫂一方則會以案件已超過法定的六年追討興訟時限作抗辯。
原訴人為鄧永祥次子鄧兆榮及三女兒鄧小艾(原名鄧翠玉),他們以鄧永祥的遺產執行人身分入稟,指擁有筲箕灣楚留香酒樓業權的祥藝發展有限公司全屬原訴一方所有,至於洪在89至95年間獲得祥藝發展的58%股權,只屬信託性質或以欺騙手法獲得。
另外,小艾及兆榮去年入稟高院,向祥嫂追討黃泥涌峽道蔚豪苑及堅尼地道皇朝閣共兩個豪宅單位的案件,將於下周三在高院審理,祥嫂一方屆時會申請剔除該項訴訟
Judgement
2006年7月7日
已故粵劇名伶鄧永祥(祥哥,藝名新馬仔)的妻兒爭產案昨有裁決,女兒鄧翠玉(鄧小艾)一方獲勝訴,敗訴的洪金梅(祥嫂)須向子女交出擁有楚留香酒樓舖位的公司的58%股份。法官在判辭中形容,這宗家庭糾紛恍如一台「大戲」,又批評祥嫂是「非常差的證人」,迴避問題兼且撒謊,甚至「倒自己台」。法官不相信她持有的股份是祥哥「愛的饋贈」,認為祥嫂「呃簽名」、騙丈夫簽下股份轉讓書。
高院暫委法院麥卓智在判辭中表示,祥哥貴為一代粵劇名伶及影星,他的遺孀和子女卻為爭奪其公司股份而興訟,可說是一宗「丟臉」的糾紛,恍如「一台大戲」。
麥卓智指出,洪金梅作供時,一直以祥哥的「愛妻」姿態自居,但他留意到洪在祥哥去世前約半年,便已遷出永祥大廈,直至丈夫病逝也沒有回去﹔而丈夫在醫院期間,她只探望過1次。麥語帶諷刺地說,「鄧先生的死亡證上墨水還未乾,便開始有入稟狀四處飛」,他又舉出祥嫂在97及98年向子女興訟的官司。
麥進一步批評洪是一個「非常差的證人」,屢屢迴避問題,前後矛盾,在代表原訴的資深大狀余若海盤問下,不堪一擊。他舉例指,洪供稱祥哥當年帶她到律師樓簽署股份轉讓書,送她股份,但該家庭律師卻出庭反駁,指祥哥生前從未上過該律師樓。麥認為洪造故事,完全不可信,證供甚至倒轉槍頭對自己不利。
相比之下,麥傾向相信鄧小艾的證供,又評價協助小艾、兆榮的舅父洪泉為「誠實、爽直」。
麥又留意到,洪金梅曾陸續把祥哥的私人物業及逾千萬元聯名存款,暗中調動至自己個人名下。他不相信有關轉讓是經祥哥同意,認為洪是存心盡量謀利,本案的股份轉移只她計劃的一部分。
麥總結說,他相信洪於95年曾向祥哥「講大話」,訛稱股份轉讓書為公司年報,令他簽名轉讓了315萬股,而她在89年所獲的股份則只是以信託人身分替祥哥託管。
關於本案背景,原訴人為祥哥二女鄧小艾及三子鄧兆榮,他們以父親的遺產執行人身分興訟,控告母親洪金梅。涉案的祥藝發展有限公司87年由祥哥及一名商人成立,公司當年斥資2000萬元購入3萬多呎的楚留香酒樓舖位,由鄧氏家族經營,楚留香於04年結業清盤。有報道指,楚留香連營業額計算,在97年市值約1.4億元。
子女一方指出,祥嫂在89至95年分3次取得祥藝逾半的股份(即350萬股),是以欺騙手段或以信託人身分替祥哥託管,故要求洪交出股份,轉回他們的名下。
7/7/2006
5:45:26 PM
HCA
3282/2002
IN THE
HIGH COURT OF THE
HONG
KONG SPECIAL ADMINISTRATIVE REGION
COURT OF
FIRST INSTANCE
ACTION
NO. 3282 OF 2002
____________
BETWEEN
TANG CHUI YUK ANGELA and TANG SIU WING, the executrix and executor of the
estate of TANG WING CHEUNG, deceased Plaintiff
and
HUNG
JIN MUI Defendant
____________
Before:
Deputy High Court Judge Muttrie in Court
Dates of
Trial: 13-16 March and 5-7 June 2006
Date of
Judgment: 7 July 2006
_______________
J U D G
M E N T
_______________
The
Action
1. Tang Wing Cheung was a famous Cantonese opera
singer and film star. He died, aged 80,
in 1997. This case concerns an
unedifying dispute, itself with almost operatic overtones, between Mr Tang’s
children and his widow over shares in a company he once controlled. The children seek the return of the shares,
which they say were held on trust for Mr Tang during his life, and now belong
to his estate; the widow says the shares are hers absolutely.
2. The plaintiffs in this case, Tang Chui Yuk,
Angela (“Ms Tang”), and Tang Siu Wing are two of the four children of Mr Tang
and Madam Hung Jin Mui, the defendant.
They are the executors of Mr Tang’s last will, dated 26 September
1996. The other two children, Tang Siu
Chuen Johnny and Tang Bic Yuk Sannie do not figure in these proceedings, and
indeed Tang Siu Wing has not given evidence.
The
Shares
3. In 1987, Mr Tang had an interest in the Kam
Lai Kung restaurant in Shaukiwan. The
restaurant’s landlord distrained for rent, and Mr Tang decided to buy the premises. This led to the incorporation on 15 May 1987
of a company called Acegrowth Limited (“Acegrowth”)
to buy and hold the restaurant premises (“the Property”) and lease them to the
restaurant. Acegrowth was acquired by Mr
Tang and a Mr Lee Yu Man, who each held one share and were the company’s
directors. On 24 August 1987 the
Property was assigned to Acegrowth at a price of $20 million. $10 million was put up by Mr Tang, and the
balance was on mortgage, which was discharged on 31 January 1991, with funds
obtained from the sale of a business in Macau which belonged to Mr Tang.
4. The Kam Lai Kung restaurant was originally
operated by one Rapid Reach Ltd in which Mr Tang held shares along with others,
but their partnership broke down. Mr
Tang decided to operate the restaurant himself under the name of Chor Lau
Heung. In 1989 the Chor Lau Heung
Restaurant Co. Ltd (“Chor Lau Heung”) was incorporated to take over the
restaurant business, and it is convenient to deal with that company’s history
here also.
5. In 1989, the shareholdings in Acegrowth
changed. Acegrowth issued another
5,999,998 $1 shares, pursuant to a resolution made in 1987 but not yet put into
effect. On 10 July 1989, 225,000 shares
were allotted to Madam Hung and 124,999 to Lee Yu Man, with Mr Tang holding the
remaining 5,649,999. Then on 21 July
1989, the 125,000 shares then held by Mr Lee were allotted to Madam Hung who
became the holder of 350,000 shares in total.
On 7 August 1998, Lee Yu Man resigned as director and Madam Hung was
appointed. The shareholdings remained
the same until 21 June 1995, when a further 3,150,000 shares were transferred
to Madam Hung, who then became the majority shareholder.
6. It is convenient also, at this point, to
trace the history of Chor Lau Heung.
Originally it issued two $1 shares held by Mr Tang and one Tsang Kwok
Wah. On 21 August 1989, the shares were
increased to 500, of which Tsang Kwok Wah held 50 and Mr Tang 450. On 31 December 1993, the 50 shares were
transferred to Ms Tang, and later, on 19 December 1994, they were transferred
to Madam Hung.
7. As appears from the evidence of Ms Tang, the
financial relationship of the two companies was as follows. Mr Tang had put up the money to buy the
Property in the name of Acegrowth.
Acegrowth leased the Property to the original company and later to Chor
Lau Heung. A tax-saving scheme was
formed in 1994 by the companies’ accountant, whereby Mr Tang assigned a loan of
$10 million due to him from Acegrowth to Chor Lau Heung. Interest of 12% per annum, i.e. $1.2 million,
was then payable by Acegrowth to Chor Lau Heung. The rent payable by Chor Lau Heung to
Acegrowth, formerly $200,000 per month was reduced to $150,000, but this was
set off against the interest.
The
Issues
8. The following is a list of issues agreed by
Counsel :
A. Regarding 225,000 ordinary shares of
Acegrowth Development Limited (“the Company”) allotted to the Defendant on 10th
July 1989 :
1.
Whether the allotment was an inter-vivos gift by Mr Tang Wing Cheung or the Defendant has been
and is still holding the said 225,000 shares on trust for the Deceased and his
estate.
B. Regarding 125,000 ordinary shares of the
Company transferred to the Defendant by Mr Lee Yu Man (“Mr Lee”) on 21st July
1989 :
2.
Whether Mr Lee held the said 125,000 shares on trust for the Deceased.
3. Whether
the Defendant paid the sum of about HK$125,000 to purchase the said 125,000
shares from Mr Lee.
4.
Whether the Defendant is the beneficial owner of the said 125,000 shares or
that she has been and is still holding the same on trust for the Deceased and
his estate.
C. Regarding the transfer of 3,150,000
ordinary shares of the Company to the Defendant by the Deceased on 21st June
1995 under the transfer documents :
5.
Whether the said transfer documents were executed by the Deceased under mistake
or as a result of the misrepresentation or (actual or presumed) undue influence
of the Defendant. Whether the Deceased
understood the effect of the said transfer documents.
6.
Whether the said 3,150,000 shares was an inter-vivos gift by the Deceased to the
Defendant or the Defendant has been and is still holding the said 3,150,000
shares on trust for the Deceased and his estate.
9. In addition the defendant pleaded defences of
laches and limitation, but these were not pursued at trial, so they need be mentioned
no further.
10. In brief, the plaintiffs’ case on the first
two assignments is that the shares were assigned to Madam Hung as nominee, in
trust for her husband. The plaintiffs
have no direct evidence on this but Ms Tang says that this was how her father
arranged the shareholdings in the companies he owned. Madam Hung says that the first assignment was
a gift and that she bought the second lot of shares from Lee Yu Man for
$125,000.
11. As to the third and major assignment, this is
supported by an instrument of transfer and bought and sold notes signed by Mr
Tang. The plaintiffs’ case is that Madam
Hung fraudulently misrepresented to her husband that the documents were the
annual returns of Acegrowth. There are
alternative pleadings of undue influence.
Madam Hung’s case is that the transfer was by way of absolute inter
vivos gift to her, and the purported consideration of $3,150,000 was for stamp
duty purposes.
Background
12. Before approaching the evidence on the
specific issues, it is necessary to deal with the background. Some facts are not disputed or indisputable;
others are not. Where there are disputes,
I do not propose to make specific findings of fact because those disputes are
not included in the agreed issues.
Obviously, however, the agreed issues have to be looked at against the
background of the disputed, as well as the undisputed facts, in particular
since this case depends very largely on the credibility of the witnesses, in
relation to the background disputes as well as the specific issues.
13. Mr Tang and Madam Hung met in the 1960s and
began living together. They later
married, but not until 1992. They had
the four children mentioned above; Ms Tang herself was born in 1969.
14. Ms Tang presents herself, at any rate up to
the time of her marriage in 1995, as having been a major assistant to Mr Tang
in his business dealings, as well as taking part in running the Chor Lau Heung
restaurant, of which she was a director.
She even had a joint bank account with her father, though according to
her Madam Hung later insisted, after Ms Tang’s marriage to a Mr Lee Yu Ming in
1995, that she be a joint signatory instead. (Lee Yu Ming has no relation to
the Lee Yu Man mentioned above)
15. There appears to have been some change in the
father/daughter relationship about the time of the marriage, of which Madam
Hung says that Mr Tang did not approve, because Ms Tang ceased to be a director
of Chor Lau Heung and various other companies at that time, but there seems to
be no dispute that thereafter Ms Tang and the other children rallied round
their father.
16. At some stage in the 1970s, Mr Tang acquired
the Wing Cheung Mansion on Morrison Hill Road.
He, or he and Madam Hung, owned various other properties through various
companies, but by 1995, the Wing Cheung Mansion was the major asset. It is said to have been worth about $300
million, though there is no supporting evidence on this point. Originally Mr Tang held a 90% interest and
Madam Hung a 10% interest in this building, presumably by way of shares in a
company; I have not seen the relevant documents, but the proportions are not in
dispute. On about 25 September 1996, the
date of the last will, Mr Tang’s interest was transferred to one Citiwin
International Ltd. A return of
allotments dated 21 August 1996 (Exhibit P17) shows that the shares in this
company were held by the four children in equal shares.
17. Originally the family all lived in a duplex
apartment in the Wing Cheung Mansion. Ms
Tang married and moved out in about 1994, after which the parents remained in
the duplex and the siblings occupied a different part or parts of the building,
though it appears that Ms Tang later moved back in (she divorced) and the
youngest sibling was living elsewhere by the end of 1996.
18. There were also offices in the building, for
looking after the various business interests of the family including a Wing
Cheung Records Company, controlled by Madam Hung. Her younger brother, Mr Hung Chuen Peter,
worked in those offices, supervising the record company, the collection of
rents from tenants of the Wing Cheung Mansion and other properties, and acting
as a general factotum for Mr Tang and Madam Hung.
19. In 1994, Mr Tang made a will in which
appointed Madam Hung as sole executrix and divided his estate into 10 equal
shares, of which six were bequeathed to Madam Hung, two to Ms Tang, one to Tang
Siu Wing and one to Tang Shui Chuen Johnny.
On 26 September 1996, Mr Tang made his last will, in which he left his
estate to the four children in equal shares, and cut out Madam Hung
entirely. Clause 4 of the will reads :
“I HEREBY DECLARE that I am not
making any provisions for my wife Hung Jin Mui ... as she is financially
independent and has been amply provided for during my lift time. I FURTHER DECLARE that if she should contest
the contents of this my Will, I hereby direct my Executors to pay her HK$1.00
in full and final satisfaction of any claim that she may have against my estate.”
20. Ms Tang says that that she and Mr Tang
discovered that Madam Hung had for some time been diverting money and property
held in joint accounts or names between her husband and herself, into her own
name. According to Ms Tang, she and her
father discovered that a bank safe deposit box in the joint names of the
couple, containing jewellery and other valuables, had been emptied; and this
discovery prompted inquiries which led to the discovery of further diversions. Madam Hung denies emptying the safe deposit
box.
21. The further diversions include the transfer
of shares on 21 June 1995, withdrawals from Chor Lau Heung, diversion of the
proceeds of sales of property, and overseas payments in Canadian and US dollars
from the couple’s joint account to Madam Hung’s individual account.
22. That some of these diversions, apart from the
share transfer, were made is disputed, but other diversions are not. Where they are not disputed, Madam Hung says
that they were done with Mr Tang’s knowledge and approval. I refer in particular to withdrawals
totalling about $2.2 million from Chor Lau Heung’s account between November
1995 and October 1996, despite the fact that the company consistently made a
loss (which Madam Hung tried to deny).
She insisted that Mr Tang wanted her to have these sums as a share of
the business.
23. There was also the sale of a property in
Nicholson Tower, originally bought in the name of Citywide International Ltd,
for Ms Tang, with money mainly supplied by Mr Tang. The proceeds of the sale were paid to Madam
Hung’s account. Again, she says that the
property was sold with Mr Tang’s consent, and that he had told her to take the
money by way of reimbursement for properties she had earlier bought for the
three children other than Ms Tang.
24. There were also two transfers overseas, of
over $1.2 million Canadian, and of over $1.9 million U.S. dollars, in February
and July 1996, from the couple’s joint account to individual accounts in Madam
Hung’s name. Again, her evidence is that
these transactions were done with Mr Tang’s knowledge and consent.
25. Ms Tang has spoken to other diversions of
funds or property, and I do not need to detail them, because where Madam Hung
has to admit the fact that a diversion happened her evidence is that it was
done with Mr Tang’s knowledge and consent.
26. Madam Hung in evidence sought to present
herself as a loving wife, right up to her husband’s death, in contrast to the
evidence of Ms Tang who says, in effect, that her parents’ relationship went to
pieces after they formally married in 1992.
However, it is not in dispute that Madam Hung left the matrimonial home
in October 1996, following a family meeting on about 16 October, and did not
return to it. What happened at this
meeting is in dispute and the subject of evidence, to which I will return
later. Mr Tang was admitted to hospital
in early January 1997, and remained there until he died. During that time, Madam Hung visited him
once.
27. No sooner was the ink dry on Mr Tang’s death
certificate than the writs started to fly.
Madam Hung on 28 April 1997 took out a probate action (HCAP 4 of 1997)
in which she sought to propound the 1994 will and have the later will declared
null and void and of no testamentary effect.
28. Madam Hung on 2 December 1997 issued a
winding up petition, HCCW 474 of 1997, to wind up Marvel Ace Co. Ltd, a
property holding company of which Mr Tang had been, and she was still a
director.
29. On 17 November 1997, the present plaintiffs
applied by originating summons for an order that an EGM of Chor Lau Heung be
convened for the appointment of the children as directors of that company,
additional to Madam Hung. On 2 December
1997, however, Madam Hung thereafter issued an originating summons (HCMP 4158
of 1997) for passing a resolution to appoint herself and a proposed
administrator pendente lite of the estate, as directors, and that they together
should appoint a third director. On 15
December 1997 the court appointed receivers and managers of Chor Lau Heung with
a view to preserving the status quo pending the resolution of the proceedings
or until further order.
30. Madam Hung’s probate action, in which she
pleaded lack of testamentary capacity and in the alternative undue influence on
the part of the children was set down for trial on 20 October 1998. However, it was dismissed by consent on 8
October 1998 on Madam Hung’s undertaking not to contest the proving of the 1994
will. The petition relating to Marvel
Ace was also withdrawn. The stay of the
plaintiffs’application for appointment of directors of Chor Lau Heung was
lifted and that matter was to proceed, but then on 19 January 1999 Madam Hung
applied for the winding up of that company (HCCW 63 of 1999).
31. This last matter was heard by Le Pichon J, as
she then was, on 31 March 2000. After a
7-day trial, she dismissed the petition.
She found, inter alia, that Madam Hung held her shares in Chor Lau Heung
on trust for Mr Tang. Her judgment makes
interesting reading in the context of this action and was re-visited in
cross-examination of Madam Hung.
32. An action was also raised in 2002, whereby
Acegrowth sued Chor Lau Heung for vacant possession of the Property and arrears
of 23 months’ rent between 1996 and 1998.
Events
in September and October 1996
33. As indicated, Ms Tang discovered in about
September, if not before, that Madam Hung had been making transfers or
diversions of one sort or another, and she then made inquiries. In particular, she says that she was told by
her uncle, Mr Hung, who had been present when the Acegrowth share transfer
documents were signed, of what had happened.
34. Ms Tang says that on about 14 October 1996
she got a call to go to the office of Ho and Wong, solicitors, with her
brother. When they arrived, Mr Tang told
them that Madam Hung wanted to transfer the 90% interest in the Wing Cheung
Mansion into her own name. He then asked
Madam Hung whether, if he had made a decision, she would accept it, and she
said that she would. He then told her
that he would not make any change to the ownership of the shares in the Wing
Cheung Mansion, which he had already put into the children’s names. At this point, Madam Hung became very angry,
threatened to divorce him, and left the office.
35. Ms Tang also says that there had been an
earlier occasion when Madam Hung had taken Mr Tang to the solicitors’ office
with a view to making this same transfer, but he had not signed the documents.
36. In evidence in chief, Madam Hung denied that
she had been to the solicitor in September 1996 to get the 90% shareholding
transferred to herself. In
cross-examination, however, she appeared to admit that there had been an
occasion when they had gone to the solicitors’ office, concerning the transfer
of the 90% shareholding to the children.
She says he had then been angry because there had also been a mortgage
to an Australian bank. Mr Tang had
called the children to the office in order to scold them. She did not attempt to get the shareholding
transferred to herself, but she did agree that she had been asked if she would
abide by her husband’s decision to transfer it to the children, and had said
that she would. She denied threatening
divorce, but she agreed that at about this time the press had got wind of a
rumour of impending divorce.
37. Under cross-examination, Madam Hung was shown
Exhibit P16, a letter from Ho and Wong to Mr Tang and herself, dealing with
tenancy matters relating to the Wing Cheung Mansion. In the first paragraph the solicitors
confirmed that they had on 24 September
1996 received instructions from Madam Hung herself that a plan to rebuild the Mansion had been abandoned but that :
“Instead, the title of the whole
Wing Cheung Mansion will be transferred to Hung Jin Mui under her sole name and
thereafter plan to renovate and decorate Wing Cheung Mansion.”
38. Under cross-examination, Madam Hung said that
she had never given such instructions, and if she received the letter, she had
never noticed this part of it. In effect
she could produce no sensible explanation why the solicitors should have
written in those terms.
The
Family Meeting
39. It is not in dispute that there was family
meeting on about 16 October 1996 at the Wing Cheung Mansion, at which some
other friends were present, including a reporter, Mr Cheng Bing Wah. There is a dispute as to how Mr Cheng came to
be there; he says that he was an old friend of Mr Tang’s and often visited, and
that Madam Hung had invited him to the
apartment. Madam Hung says that she
found him sitting outside the door, because the family dog barked at the door,
and invited him in. In any event, Mr
Cheng was present at the meeting.
40. Mr Cheng’s evidence, and that of Ms Tang, is
that the meeting was called to ask Madam Hung about the various diversions of
money and property that she had made to herself. Madam Hung admitted that she had made them,
and promised to return what she had taken.
Ms Tang says that the transfer of 3,150,000 shares came into the
discussion, and Madam Hung promised to return them also, but Mr Cheng does not
specifically remember that. In any
event, Mr Cheng managed to take a photograph of some of the family members,
surreptitiously, as they sat around the coffee table in the apartment, and
after the meeting, the whole family went downstairs to meet the press, and a
photograph was taken of them all together, smiling and presenting themselves as
a happy and united family. Mr Cheng next
day published a report of the meeting, as well as the photographs, in the Apple
Daily, for which he was working at the time.
It appears from this report that Madam Hung had agreed to return assets
which she had put into her own name, and that they would be put into a family
company owned by all the family members; and that, although Madam Hung admitted
that she had threatened divorce in a moment of impulse, she would absolutely
not divorce Mr Tang.
41. Madam Hung’s evidence is that on this
occasion, Mr Tang called the children together, and scolded Ms Tang for having
failed to follow his instructions, in that she had been asked to set up a
company in the joint names of the parents and the four children, but had not
done so. She herself was never asked to
return any assets or to put them in the name of such a company. Mr Cheng’s evidence and his newspaper article
were all made up. From cross-examination
it appears that Madam Hung was saying that Ms Tang was being scolded for having
put the company (Citiwin) in the name of only herself and Tang Siu Wing; but
Exhibit P17 shows that the shareholding in that company was in the names of the
four children, and not two of them as at 21 August 1996. Madam Hung
cannot and does not deny that she appeared in the “happy family”
photograph after the meeting.
The
Share Transfer in June 1995
42. I will deal with the issues relating to this
transfer first, because it is the largest and most important part of the
plaintiffs’ claim, and that on which most evidence has been adduced.
43. It is not in dispute that the instrument of
transfer and bought and sold notes dated 21 June 1995 were signed by Mr Tang
and Madam Hung and that the instrument of transfer was signed by Mr Hung Chuen
Peter, as witness. The documents were
prepared by Messrs Edmund Cheung & Co., solicitors. Mr Hung went to the firm’s offices, on Madam
Hung’s instructions, collected the papers, and took them to the couple’s
apartment at the Wing Cheung Mansion.
After they were signed, he returned them to the solicitors’ office.
44. Mr Hung’s evidence is that he checked the
documents when he collected them, and found that they were an instrument of
transfer and bought and sold notes. At
the apartment, in his presence, Madam Hung told Mr Tang that the documents were
the annual reports of the company, and invited him to sign them, which he
did. Mr Hung was then asked to sign as
witness, and did so. He felt very
surprised because what Madam Hung said about the documents was totally
different from what their actual contents were.
But Mr Tang did not do or say anything to indicate that he did not
accept what he was told. Mr Hung told no
one of this incident, until about September 1996, when his nephews complained
that their mother had taken away their father’s assets; and then he told the
children.
45. Madam Hung’s evidence is that in April or May
1996, Mr Tang took her to Edmund Cheung & Co.’s offices, to see Mr Yip Kin
Man. He is a partner in that firm. Mr Tang instructed Mr Yip to prepare the
transfer documents, saying that the transfer would be gift to his wife. Later, when the papers were ready, and Mr
Hung brought them up, Mr Tang said, in Mr Hung’s presence, “Mother, here are
3.15 million shares of Acegrowth which are a gift from me to you”; and then,
having read through the papers, he signed them.
46. There is some suggestion in the pleadings
that this gift was by way of a reward for Madam Hung’s having looked after Mr
Tang in hospital during his many admissions, but there seems to be nothing
specific in the evidence to support this.
47. At the trial, evidence-in-chief was taken
orally. Madam Hung’s evidence relating to the visit to the solicitors’ office
did not appear in her witness statement.
Mr Yu indicated that he might need to apply to call evidence in rebuttal
of this new evidence, and at the end of the trial he did so. Having heard counsel, including Mr Grossman
SC who was brought in specifically to oppose the plaintiffs’ application, I
allowed it, and heard the evidence of the solicitor, Mr Raymond Yip Kin Man, in
rebuttal.
48. Mr Yip had acted for many years for Mr Tang
and Madam Hung, in connection mainly with tenancy matters in the Wing Cheung
Mansion. His evidence was that he had
indeed drafted the documents and had them engrossed, and had given instructions
for them to be handed over to whoever came to collect them. Later, the documents had come back and he had
dealt with stamp duty. But his
instructions to prepare the documents did not come from Mr Tang, and there was
never any meeting between himself, Mr Tang and Madam Hung at his office. He had received the instructions directly
from Madam Hung over the telephone.
Evaluation
49. Mr Hung’s evidence was attacked, mainly on
the basis that he had been dismissed from the family’s service on 31 July 1996,
and must therefore have borne a grudge against Madam Hung, who had dismissed
him; and also that he failed to tell anyone about this matter, in particular Mr
Hung, after his dismissal and until September 1996.
50. The dismissal came about because on 31 July
1996, Mr Hung was not paid his monthly salary of $10,000. He went up to the apartment in the evening
and asked Madam Hung to pay it, but she refused on the basis that the
accounting staff had gone home. One word
followed another, and Mr Hung stamped out without his money, though it is not
clear, as it often is not in this sort of situation, whether he was being
sacked or quitting. I asked him directly
if he had been told “You’re fired” or if he had said “I quit” but he said that
neither had been said. In any event, he
was subsequently paid off, with salary
in lieu of notice, and a notice was put in the newspapers that he no longer
worked for the family. As to why he had
said nothing about the incident for so long, Mr Hung said that in the
beginning, he was still employed by Madam Hung, and was afraid he might have to
shoulder some legal liability; and later, he did not have the chance to go
back, or to telephone Mr Tang, who would not take telephone calls.
51. Mr Hung appeared to me to be an honest and
straightforward witness, and he stood up to cross-examination well enough. It appears that he was not reduced to penury
by being paid off; although he became a taxi driver thereafter, he says that he
had for a long time been in the business of buying and selling taxis, as well
as working for the family. There was no very good reason for him to bear a
grudge. I can well see that divided
loyalties and the employment situation, and indeed the fear that he might have
been involved in some legal liability, might have led him to keep silent until
someone else brought the matter up.
52. Madam Hung was, by contrast, a very bad witness
indeed. She was repeatedly and obviously
evasive, and she was inconsistent. She
did not stand up to cross-examination at all well, on this issue, or on all the
other background matters which I have mentioned.
53. If Madam Hung’s credibility was on the ropes
by the close of her evidence, Mr Yip’s evidence provided the knockout
blow. He was entirely credible. He was the family solicitor, and was used to
taking instructions directly from Madam Hung, or through Mr Hung or Miss Au who
was also employed by the family. He had
known Madam Hung, who was a friend of his in-laws, for a long time, and he knew
Mr Tang, whom he used to meet socially, though rarely. But, he said, Mr Tang had never, in all the
years of their acquaintance, visited his office. This is obviously something Mr Yip would well
know and remember, even after many years.
54. I am led to the conclusion that Madam Hung is
not a witness of truth, and actually made up the story of the instructions
having been given by her husband, in order to support her case.
55. The plaintiffs’ evidence is attacked on the
basis of improbability. Ms Tang says
that her father did not speak, read or write English, and always relied on
herself, or Madam Hung, or Mr Hung, or whomever he instructed, to prepare
documents and produce them for signature.
Madam Hung says that Mr Tang did speak some English, “better than I do”,
and used to have an English teacher, years ago, but how much English he could
speak and read by 1995, on her evidence, is not clear. Everyone says that they spoke Cantonese with
Mr Tang, and if he did learn English in the past, if one does not use a
language, one loses it. In any event, as
I have indicated, she is not a witness of truth. Where there is a conflict I prefer the
evidence of Ms Tang. So it is probable
that Mr Tang could not read English.
56. Even so, the figures are writ large on the
documents, and nowadays in Hong Kong Arabic numerals are in constant use
everywhere, in Chinese advertisements, newspapers and so on. Everyone, or almost everyone, knows how to
read and understand the numbers. This is
particularly so when the numbers relate to money. Also, there is no dispute that Mr Tang had
various companies and would have had to sign company documents from time to
time. It is not unreasonable to assume
that he might, if he was paying attention, have known the difference between a
set of transfer documents and a set of annual reports.
57. There is also the point raised by the defence
counsel Mr Chung, that an annual return dated 15 May 1996 shows the change in
the shareholdings, and this document was also signed by Mr Tang. There appeared to be an attempt to rely on
this as an absolute proof that Mr Tang had in some way ratified the transfer,
which of course it is not; but it is a document which he signed, and which
could be taken, if he paid attention to what he was signing, as indicating that
he accepted the transfer. But again, I
refer to Ms Tang’s evidence as to the common practice which was followed, when
Mr Tang had to sign English documents; he relied on others. So I do not see this document as significant.
58. What we have here is evidence for the
plaintiff which comes from apparently credible witnesses, but to which some
objection can be taken on the ground of probability. This is an allegation of fraud, and therefore
serious; and the more serious the allegation, the more cogent must be the
evidence to prove it. But the standard
of proof is the balance of probabilities.
There is a logical difficulty of requiring more cogent evidence on fraud
than otherwise, while still holding that the allegation is to be proved on the
balance of probabilities. Its resolution
was explained in Re H (minors) [1996] AC 563.
In that case the House of Lords held that even where a serious
allegation is in issue, the standard of proof remains the same. Per Lord Nicholls :
“... this does not mean that that
where a serious allegation is in issue the standard of proof required is
higher. It means only that the inherent
probability or improbability of an event is itself a matter to be taken into
account when weighing the probabilities and deciding whether, on balance, the
event occurred. The more improbable the
event, the stronger must be the evidence that it did occur before, on the
balance of probability, its occurrence will be established.”
59. In this connection Mr Chung relies also on
passages of the judgment of the Court of Final Appeal in Ming v Ming, FACV 25
of 2005, and Nina Kung v Wang Din Shin, FACV 12 of 2004. Mr Yu says that it is not in dispute that the
“Re H” standard of proof applies here but points to the fact that unlike the
situation where the court may be required to draw inferences in order to find
fraud, the court here has direct evidence of it.
60. In considering the balance of probabilities,
I must also take into account the evidence of Madam Hung herself, which is
worthless. Also, I do not believe her
evidence that the various transfers she made earlier were made with the consent
of Mr Tang. It is clear that she had
embarked on a course of getting as much as she could out of joint names and
into her own, and a share transfer of this nature would be part of that course.
61. In fact, Madam Hung’s evidence is worse
than worthless to her own case, because of the obviously deliberate lie she
told about instructions having been given by Mr Tang to the solicitor, face to
face. In a criminal case, it may be
argued that even where the defendant is incredible, the court must be satisfied
of guilt, on the prosecution case, to the required standard. But a defendant’s lie may amount to
corroboration of the case against him, so long as it is deliberate, relates to
a material issue, is motivated by realisation of guilt and fear of the truth,
and is clearly shown to be a lie by extrinsic evidence. See R v Lucas, (1981) 73 Cr. App. R.
159. It seems to me that the lie here
meets those criteria and therefore that it goes to support the probability of
the plaintiffs’ case.
Finding
62. I am therefore satisfied on the balance of
probabilities that the transfer documents were executed by Mr Tang as a result
of the misrepresentation of Madam Hung, and that he did not understand the
effect of the transfer documents. I am
also satisfied that the shares were not an inter vivos gift by Mr Tang to Madam
Hung. It follows that she has been and
is still holding the shares on trust for Mr Tang and his estate.
63. There is no need to consider the issues as to
undue influence and unconscionability.
They would only come in if I did not accept that there was an actual
fraudulent misrepresentation.
The
Allotment of 225,000 Shares
64. There is no dispute that the property held by
Acegrowth was bought with Mr Tang’s own money, and that Madam Hung did not pay
anything for the shares. The couple were
not married, and there is no presumption of advancement.
65. The evidence of Ms Tang is that Mr Hung’s
practice was to allot shares to some other person to hold on trust for him,
because of the legal requirements of having two shareholders and
directors. He allowed her to hold shares
on trust for him, and the same applied to Lee Yu Man. Where there is a conflict I prefer Ms Tang’s
evidence.
66. Madam Hung said that when the shares were
allotted to her, Mr Tang :
“took me and Lee Yu Man to Chau
Wai Hung’s solicitor’s firm, and the shares were allotted to me; and he gave
those shares to me and Lee as gifts.”
If the
allotments were made through a solicitor, it is difficult to see why there is
no documentation as to the nature of the transaction. If there were gifts it would have been in the
interest of Madam Hung and perhaps more particularly in the interests of Mr
Lee, who was a business partner, but not a family member, to have that made
clear.
67. In fact it was found, in HCCW 63 of 1999 that
the shares in Chor Lau Heung were beneficially owned by Mr Tang, and it is
difficult to see why this same practice as to beneficial ownership of part of
the shares would not apply in the case of Acegrowth also. I have set out above the relationship between
Acegrowth, and in particular the tax scheme which came into being involving
them. The picture is the common one, of
a man exercising ownership of his assets through companies, so that he can
enjoy the advantages, be it tax advantages or the advantage of escaping
liability by what I call the “dance of the corporate veils”, which the use of
companies allows. But that picture
itself requires effective control of the companies, and more often than not
beneficial ownership of the entire shareholding, by the man behind them.
Finding
68. I have already indicated my view of Madam
Hung’s credibility. I do not believe
that these shares were a gift, and it follows that she holds them on trust for
the estate.
The
Allotment of 125,000 shares
69. Here, the evidence of Madam Hung is that she
paid Mr Lee Yu Man $125,000 for the shares.
Of course there is no receipt for the money. That does not of itself make the evidence
improbable. Many people toss around
large sums like confetti, without any kind of documentation. But about this transfer Madam Hung again said
:
“Later on 125,000 shares were
allotted to me. Because at that time,
Lee wanted to come out of Acegrowth. He
wanted to leave the restaurant. And then
I talked to my husband about it. He
asked me to buy Lee’s shares. At the
value of $125K. He brought me to Chau
Wai Hung’s firm to get the shares transferred to me. I paid the price of the shares. I gave the money to Lee after he had signed
the documents. All those things took
place at Chau’s firm.” (My note)
70. It is difficult to see that if the transaction
took place at a solicitor’s office, with money changing hands, there would not
have been a receipt. Madam Hung avers
the sale and she must prove it. I have
already expressed my views on her credibility.
I do not believe her evidence on this issue.
Finding
71. I am satisfied on the balance of
probabilities that Mr Lee held the 125,000 shares on trust for Mr Tang, and
that Madam Hung did not buy them from Mr Lee for $125,000.
Result
72. In the result the plaintiffs are entitled to
judgment and judgment is ordered in terms of paragraphs 1-7, 9 and 10 of the
prayer of the Statement of Claim, with costs (nisi) to be taxed if not agreed.
(G.P.
Muttrie)
Deputy
High Court Judge
Mr
Benjamin Yu SC and Mr Anson Wong, instructed by Messrs K C Ho and Fong, for the
Plaintiff
Mr Hylas
Chung, instructed by Messrs Gary Lau & Partners, for the Defendant
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