New Century Credit Services Co Ltd v. Wong Wing Shong Vincent
Read the full judgment text of HCA 800/2016 on BabelCite. This High Court CFI judgment was delivered on 15 March 2021.
1. In this action, New Century Credit Services Co Ltd (“ Plaintiff ”), a licensed moneylender, makes claims against the Defendant, Mr Vincent Wong Wing Shong (“ Mr Wong ”) under a Loan Agreement in writing dated 7 December 2015 (“ Agreement ”), for recovery of a sum of $3 million as the loan advanced under the Agreement (“ Loan ”), together with interest thereon accrued up to 29 March 2016, in the total sum of $3,351,991.23, and further interest thereafter. The Plaintiff also seeks delivery up
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HCA 800/2016 [2021] HKCFI 627 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 800 OF 2016 ________________________ BETWEEN
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________________________ J U D G M E N T ________________________ Background 1.In this action, New Century Credit Services Co Ltd (“Plaintiff”), a licensed moneylender, makes claims against the Defendant, Mr Vincent Wong Wing Shong (“Mr Wong”) under a Loan Agreement in writing dated 7 December 2015 (“Agreement”), for recovery of a sum of $3 million as the loan advanced under the Agreement (“Loan”), together with interest thereon accrued up to 29 March 2016, in the total sum of $3,351,991.23, and further interest thereafter. The Plaintiff also seeks delivery up of Mr Wong’s property at ground floor, No 467, Reclamation Street, Kowloon (“Property”) which was charged to the Plaintiff under a Third Legal Charge dated 7 December 2015 (“Charge”) as security for repayment of the sums due under the Agreement. 2.Mr Wong was aged 66 at the time of the Agreement. He is a retired banker, had received education up to university level, and is proficient in English and Chinese. 3.By way of Defence, Mr Wong essentially claims that he was the victim of a fraudulent scheme perpetrated by someone holding himself out to be one Alvin Kwok (“Alvin”), of World Link (Holdings) International Enterprise Limited 匯軒（集團）國際企業有限公司 (“World Link”). By virtue of the scheme, Mr Wong was deceived into signing the Charge and the Agreement with the Plaintiff for a loan of $3 million, and another loan agreement with a separate company known as Total Express International (HK) Limited (“Total Express”) for a separate loan of $2 million, in exchange for which Mr Wong has only received a purported “cash rebate” of $35,000 in respect of each of the two loans, but has incurred liability under the loan agreements and the Charge in favour of the Plaintiff. The rest of the money has apparently been pocketed by World Link/Alvin and his cohorts. 4.In his Re-amended Defence dated 9 August 2017 (“Defence”), Mr Wong claims that World Link was the agent of the Plaintiff, and that the Plaintiff had acted in collusion with World Link in deceiving Mr Wong into signing the Agreement under false and fraudulent misrepresentations. Mr Wong claims that the Plaintiff had received money as charges or expenses on account of loans made or to be made to Mr Wong, in contravention of section 27 of the Money Lenders Ordinance (“Ordinance”). It is further alleged that the Plaintiff had charged excessive interest on the Loan, and had contravened sections 24, 21 and 22 (1) (b) of the Ordinance, such that the Agreement is illegal and unenforceable. 5.The misrepresentations pleaded in the Defence were stated to have been made by one Ms Li (paragraph 6 of the Defence), one Mr Li (paragraph 7 of the Defence) and by Alvin of World Link (paragraphs 7, 14, 17, 25, 30, 45 of the Defence). The pleaded case 6.According to Mr Wong’s pleaded claims, he received a telephone call from one Ms Li on about 8 November 2015. Ms Li held herself out to be calling from HSBC, and asked Mr Wong if he had any borrowing needs, as she could arrange a low interest loan for him. Mr Wong explained that at that time, he was interested to borrow a sum of about $1.8 million, to pay for the medical expenses of his younger brother and to carry out some renovation works required for the Property. At the material time in November 2015, the Property was already subject to a mortgage in favour of Fubon Bank. Mr Wong therefore told Ms Li that he wished to borrow about $1.8 million, and at Ms Li’s request, he disclosed his financial and personal information as well as the particulars of the Property, in the hope of obtaining the loan Ms Li was soliciting. 7.Mr Wong then received a telephone call on 9 November 2015 from one Mr Li who held himself out to be from HSBC. Mr Li told Mr Wong that he was eligible for a low interest loan, and asked Mr Wong to provide his Hong Kong identity card number for Mr Li’s consideration of his loan application. This was duly provided. On about 10 November 2015, Mr Li called Mr Wong again and informed him that his loan application had not been approved by HSBC, but that World Link, a subsidiary of HSBC, could help Mr Wong to secure a low interest loan. Mr Wong was asked to attend the office of World Link to further his loan application. 8.The representation made by Mr Li, that World Link was a subsidiary of HSBC, was false. 9.On 11 November 2015, Mr Wong attended at an address stated to be that of World Link, where he met with Alvin. Alvin represented to Mr Wong that World Link could secure a “low interest revolving loan of $3 million” (“Promised Loan”) from HSBC, and that World Link would act as Mr Wong’s guarantor for the Promised Loan, and would only charge Mr Wong a service fee of $500. Alvin further represented to Mr Wong that in order to secure the Promised Loan, Mr Wong would have to: (1) first borrow a sum of $2 million from a finance company, as a loan by way of 2nd mortgage on the Property (“2nd Mortgage Loan”); (2) then borrow a sum of $3 million from another finance company as a loan by way of a 3rd mortgage on the Property (“3rd Mortgage Loan”) to repay the 2nd Mortgage Loan of $2 million. World Link would then procure the Promised Loan from HSBC, to enable Mr Wong to repay the $3 million 3rd Mortgage Loan. Such a complex arrangement may sound obscure, but Mr Wong did not ask Alvin why it was so. According to what Alvin told Mr Wong, World Link had handled several similar transactions every month and he assured Mr Wong that the said loan arrangement was “workable”. Although the $3 million loan proposed was more than the $1.8 million which Mr Wong had need for, he understood that the Promised Loan was a revolving one and that the actual advancement could be less than $3 million if he so wished. 10.According to the Defence, there were further representations made by Alvin after 11 November 2015, as to which bank would provide the Promised Loan. By 17 November 2015, Mr Wong was told that the Promised Loan would be provided by Standard Chartered Bank. He met with Alvin on 17 November 2015, who informed Mr Wong that one Mr TF Li (李梓輝) of World Link (“TFL”) would accompany Mr Wong to sign the loan documents with the finance company which would be extending the $2 million 2nd Mortgage Loan to him. 11.On Mr Wong’s pleaded case, he signed the loan documents for a $2 million loan on 17 November 2015, apparently with Total Express, but at the offices of one Good Choice Finance Ltd (“Good Choice”). This was on Alvin’s representation that the $2 million 2nd Mortgage Loan was an intermediate process to secure the Promised Loan of $3 million, and that the 2nd Mortgage Loan would be fully repaid and discharged once the $3 million Promised Loan was granted. Accompanied by TFL, Mr Wong was taken to the office of a firm of solicitors, where a number of further documents were signed and Mr Wong’s Hong Kong identity card was photocopied. After the signing of documents, Mr Wong was given a cheque for the sum of $2 million, which he understood to be the advance of the 2nd Mortgage Loan. TFL then took Mr Wong back to the office of World Link, where the cheque for $2 million was given to Alvin. 12.The next day, Mr Wong met TFL again, when they went to the bank to cash the cheque for $2 million. The cash was then handed over to Alvin at World Link’s office, upon Alvin’s representation that World Link would follow up with procuring the $3 million 3rd Mortgage Loan for Mr Wong. Mr Wong was given a cash rebate of $35,000 from the $2 million obtained under the 2nd Mortgage Loan. 13.Mr Wong then received a telephone call from Alvin on 4 December 2015, who stated that the 3rd Mortgage Loan was ready, but did not inform Mr Wong of the identity of the lender. Mr Wong was only asked to attend the office of World Link on 7 December 2015 to deal with the loan. 14.Mr Wong also received a telephone call on 5 December 2015 from one Mr Leung of the Plaintiff. According to Mr Wong, Mr Leung only asked why he required a large loan of $3 million, and in reply, Mr Wong asked Mr Leung to liaise with World Link in relation to the loan. On Mr Wong’s case, there was no discussion on the terms of the loan during the telephone conversation at all, and Mr Leung only asked him to attend the office of Cheung & Choy, solicitors (“CC”), on 7 December 2015. 15.Alvin also telephoned Mr Wong on 7 December 2015, and asked Mr Wong to attend the office of World Link at 1:30 pm that day. There, Alvin informed Mr Wong that Dah Sing Bank (“DS Bank”) was offering the Promised Loan to Mr Wong, at a rate of interest lower than that offered by HSBC and Standard Chartered Bank. Mr Wong agreed to borrow the $3 million from DS Bank, but Alvin informed him that he had to deal with the $3 million 3rd Mortgage Loan first. Alvin then asked TFL to accompany Mr Wong to the offices of CC, to sign the loan documents for the 3rd Mortgage Loan. 16.On 7 December 2015, at about 1 pm, TFL brought Mr Wong to the office of CC at Wing On Centre in Central. On Mr Wong’s case, he met with one Mr Leung of the Plaintiff and one Ms Tsang of CC in the reception area. According to the Defence (paragraph 39 thereof), Ms Tsang led Mr Wong into a conference room, while TFL and Mr Leung waited at the reception. In the conference room, Ms Tsang explained to Mr Wong that the Plaintiff was lending a sum of $3 million by way of a mortgage on the Property. Mr Wong was given a number of documents to sign, and he noticed the name of the Plaintiff on a number of the documents. After signing, Mr Wong was asked to wait in the reception and there, he met with TFL again. Ms Tsang returned shortly to the reception area, together with Mr Leung. Mr Wong pleads in the Defence that at the reception, Ms Tsang had asked Mr Leung whether any part of the Loan amount was to be retained for satisfying the first 3 installment repayments to be made to the Plaintiff, but Mr Leung had replied that it was not required. 17.According to Mr Wong, Ms Tsang then handed him a cash cheque for $3 million (“Cheque”), and he left CC’s office together with TFL. The Cheque was given to TFL and they returned to the office of World Link, where they met with Alvin. Arrangements were then made for Mr Wong to meet TFL in the morning of the next day in order to cash the Cheque at HSBC. 18.On 8 December 2015, at about 9:30 am, Mr Wong met TFL and the Cheque was cashed. The two returned to the office of World Link, where Mr Wong handed over the cash to Alvin at his request and upon Alvin’s representation that World Link would use the money to secure the Promised Loan for Mr Wong. According to paragraph 46 of the Defence, Alvin further undertook to Mr Wong in writing that: (1) World Link would cancel the application for the 2nd Mortgage Loan on or before 15 January 2016, at World Link’s costs; and (2) World Link would procure the Promised Loan of $3 million from Standard Chartered Bank or DS Bank on or before 15 January 2016, at World Link’s costs. 19.At the same time, Alvin paid Mr Wong a cash rebate of $35,000 for the $3 million loan from World Link. 20.Thereafter, Mr Wong lost contact with Alvin and World Link. The office of World Link was vacated. Mr Wong was informed that police arrests had taken place at the premises. He also reported the matter to the police. 21.Further particulars and details of the foregoing encounters were dealt with in Mr Wong’s witness statements, but the Defence sets out the essential facts relied upon for the claim that the Agreement is unenforceable and illegal and being in contravention of the Ordinance. 22.The essence of Mr Wong’s Defence (set out in paragraph 53) is that World Link was a group of persons who acted as employees, partners or agents of the Plaintiff, and were in collusion with the Plaintiff to charge interest or remuneration and excessive interests, all in contravention of the provisions of the Ordinance. Ms Li, Mr Li, Alvin, TFL and Mr Leung were all employees, partners or agents, or had colluded with the Plaintiff, such that the misrepresentations made by Mr Li, Ms Li and Alvin were misrepresentations by the Plaintiff, and they had all acted in collusion with the Plaintiff in inducing and deceiving Mr Wong into signing the Agreement with the Plaintiff, which Agreement is unlawful and unenforceable, and had swindled the amounts of the 2nd Mortgage Loan and the Loan (less the rebates given to Mr Wong). 23.Mr Wong claims, in the alternative, that the sum of $2,965,000 (being the Loan less the rebate) was charged by the Plaintiff for the alleged purpose of securing the Loan, and was part of the interest payable and in addition to the alleged interest of 36% per annum set out in the Agreement. The Plaintiff was effectively charging interest at 134.8% per annum, which is exorbitant and above the permissible interest rates under the Ordinance. 24.In the witness statements filed on behalf of the Plaintiff, the Plaintiff denies any relationship or association with World Link, Alvin and TFL, and further denies any knowledge of any fraudulent scheme. The Plaintiff denies that any of the agents to whom Mr Wong had referred were in fact the Plaintiff’s employees, servants or agents, and further claims that the Plaintiff had never authorized any agent to procure the Agreement, and that it had not received any charges or fees for the Agreement. 25.Notwithstanding the detailed particulars given in the Defence of Mr Wong’s alleged contacts and dealings with Mr Li, Ms Li and Alvin prior to his signing of the Agreement, the Plaintiff did not explain in its original witness statements how the Agreement was signed, how and by whom the Loan was negotiated and approved, and how Mr Wong’s personal particulars contained in the Agreement were obtained by the Plaintiff before Mr Wong’s first (and only) meeting with the Plaintiff’s representatives at CC’s office, when the Agreement was produced and signed. The total silence on the Plaintiff’s part with regard to these essential matters was, if not suspicious, then totally unhelpful to the Court’s determination of the key factual matters in dispute at trial. For that reason, the initial trial of the action was adjourned (with costs against the Plaintiff) on the second day of the hearing in July 2018, for further evidence to be filed by the Plaintiff. Supplementary witness statements were thereafter filed and served by the Plaintiff in January 2019, for the trial to resume in September 2020. Is a valid Defence established? 26.Before the defences relied upon by Mr Wong can be established, Mr Wong must show that the misrepresentations on which he relies were made by the Plaintiff, and that Alvin and TKL were acting for and on behalf of the Plaintiff, or otherwise were in collusion with the Plaintiff when they made their misrepresentations and deceived Mr Wong into signing the Agreement and parting with the loan amount under the Agreement. If Alvin, TKL, Mr Li, Ms Li and World Link were acting on their own account, any redress which Mr Wong may have must be sought from these individuals and entities, rather than the Plaintiff. 27.As the Plaintiff has emphasized, collusion is a serious allegation and the authorities are clear that such claims must be distinctly alleged, sufficiently particularized and proved to the requisite standard commensurate with the seriousness of the allegation. 28.The standard of proof applicable in civil cases involving allegations of the commission of a criminal offence, fraud and other serious conduct is that the tribunal of fact has to be reasonably satisfied of the facts sought to be established, having regard to its gravity, though not with the degree of certainty which is required in criminal proceedings (HKSAR v Lee Ming Tee (2003) 6 HKCFAR 336). Inferences of fraud or serious misconduct are not to be reached by conjecture, nor on a mere balance of probabilities, but have to be plainly established as a matter of inference from proved fact. The court guards against drawing an inference where the primary evidence does not logically and reasonably justify such inference. The court is not entitled to merely choose between guesses on the ground that one seems more likely than another (Ming Shiu Chung v Ming Shiu Shum (2006) 9 HKCFAR 334). 29.The standard of proof in the context of forgery was further explained in Re H & Others (Minors) (Sexual Abuse: Standard of Proof) [1996] AC 563 at 856, and cited in Nina Kung v Wong Din Shin (2005) 8 HKCFAR 387, at 560:
30.The Plaintiff has also referred to the judgment of Godfrey Lam J in Securities and Futures Commission v Wang Jian Hua & Ors HCMP 745/2013, 29 October 2015, and His Lordship’s observation at paras 78 -79:
31.The above cited observations are helpful in the assessment of the evidence and are pertinent to my decision in this case, as to whether the claims made have been adequately and sufficiently proved. 32.Collusion involves the necessary ingredients of acting in concert and dishonesty. The offence of collusion under section 27 (3) and (4) of the Ordinance was considered and explained by the Court of Appeal in HKSAR v Wong Kwok Wai [2013] 16 HKCFAR 191. Bokhary NPJ referred to parties “acting in concert and surreptitiously in a dishonest enterprise” to extract money from a victim. Tang PJ referred to parties acting in collusion by “playing the same game” (by reference to the phrase used in Famous Zone Electronics Ltd v Hong Kong and Shanghai Banking Corp Ltd [1998] 3 HKC 723). That phrase was further explained by Deputy Judge Simon Ho in Ever Long Finance Ltd v Yeung Wah Lung [2017] 1 HKLRD 500:
33.I bear in mind the criticisms made by the Plaintiff, that the Defence contains no particulars at all of the dishonesty alleged against the Plaintiff. It is pertinent that although by the time of trial, Mr Wong was acting in person, the original Defence filed in July 2016 and the Amended Defence filed in March 2017 were all settled by lawyers acting for Mr Wong, with the essential claims of collusion, misrepresentation and illegality pleaded, but without particulars of the dishonesty to support the alleged collusion. 34.Leaving aside for the time being the issue of whether there are adequate particulars of dishonesty (which goes to the state of mind of the Plaintiff), the more controversial and the critical question is whether there is any evidence of the act of collusion. 35.In this regard, Mr Wong placed reliance in his witness statements and arguments on the fact, firstly, that he had only met and dealt with Alvin of World Link, and had never met with any representatives of the Plaintiff before 7 December 2015. It was only on 5 December 2015 that he received for the first time a telephone call from Mr Leung of the Plaintiff, but Mr Leung already had knowledge of his requirement for a $3 million loan, and the Plaintiff had his personal particulars for preparing the Agreement presented for his signature at the office of CC on 7 December 2015. Mr Wong claims that when Mr Leung had called him on 5 December, he had simply asked Mr Leung to contact Alvin in relation to his loan application. 36.Secondly, Mr Wong emphasized that when he met with Alvin on 7 December 2015 at the office of World Link, Mr Wong had complained that Mr Leung had been rude to him when he had telephoned, and that Alvin had telephoned the Plaintiff to complain on Mr Wong’s behalf. This, he argued, shows that Alvin was in contact with the Plaintiff. 37.Thirdly, Mr Wong relied on the fact that Alvin had arranged for TFL to accompany him to CC’s office on 7 December 2015 to sign the Agreement, that TFL was present when he met with Mr Leung of World Link there, and that Ms Tsang of CC had asked Mr Leung whether it was necessary to retain any part of the Loan for the first 3 installment payments to be made by Mr Wong to the Plaintiff pursuant to the Agreement. 38.It is Mr Wong’s case that all the above goes to show that the Plaintiff’s representatives, including Mr Leung and Ms Tsang, were all familiar with, and acting together and in conjunction with Alvin, TFL and others of World Link. 39.On the Plaintiff’s part, it denies any knowledge of and any association with World Link, Alvin and TFL, and further denies any knowledge of World Link’s and Alvin’s dealings and relationship with Mr Wong. 40.In the supplementary witness statements filed by the Plaintiff in January 2019, after the adjournment in July 2018, the Plaintiff’s witnesses explained that Mr Wong and his loan application had been a referral from a company known as Imperial Accounting Limited (“IAL”). According to the evidence of Leung Tsz Fung Jacky (“Jacky”) of the Plaintiff, he received a telephone call from one Joey Wong (“Joey”) of IAL on 25 November 2015. Jacky had known Joey since early 2015, and had received approximately 10 loan applications from Joey by way of referral. Joey informed Jacky that she had a potential client (who turned out to be Mr Wong) who wanted to borrow $3 million on the security of a 2nd mortgage. Joey also informed Jacky that the loan was required for Mr Wong’s business operation usage. 41.It is also the evidence of Jacky, that the Plaintiff had an agreement with IAL that if IAL should refer to the Plaintiff loan applications which were approved by the Plaintiff, and if the approved loans should achieve $10 million, the Plaintiff would pay IAL 2% of the total approved loan amount. According to Jacky, Mr Wong’s application was the second loan referred by IAL to the Plaintiff and which had been approved by the Plaintiff. Since Mr Wong failed to pay any monthly installment of the Loan under the Agreement, the Plaintiff did not thereafter approve any other loan referred to it by IAL, and no payment had ever been made by the Plaintiff to IAL, as the approved loan referrals from IAL never achieved 10 million. 42.After the telephone conversation between Joey and Jacky on 25 November 2015, and as evidenced by an email dated 25 November 2015, Joey sent to Jacky on that day a set of documents relating to Mr Wong’s application for the Loan. These included a copy of Mr Wong’s Hong Kong identity card, land search records of the Property, online personal credit report on and bank records of Mr Wong, and other documents relating to the Property such as the demand for rates for the Property. (On Mr Wong’s evidence, he had produced these documents in mid-November 2015, not to the Plaintiff but to Alvin at his request.) These documents were forwarded by Jacky to his supervisor, Mr Lam To Man (“Nathan”), and to Mr Leung Chi Yung (“Oscar”) for their consideration and approval. 43.On Nathan’s evidence, he and Oscar were in charge of assessing Mr Wong’s loan application (“Application”), after it was referred to him by Jacky. On receiving the Application, a land search was conducted against the Property, and on 25 November 2015, an oral valuation on the Property was obtained from Prudential Surveyors (Hong Kong) Limited, which valued the Property at $17 million. Nathan claims that he and Oscar had conducted a background check against Mr Wong, by making inquiries with other moneylenders, and had also visited the Property. Nathan prepared a Credit Approval Memorandum in respect of the Application, on 4 December 2015 (“Approval Memorandum”). The Approval Memorandum referred to an existing 1st mortgage on the Property, in favour of Fubon Bank, for $1.3 million and a 2nd mortgage in favour of Total Express, for $2 million. It referred to the valuation of the Property at $17 million. The Approval Memorandum stated that the Property (on the ground floor of 467 Reclamation Street) was a shop, and that the whole building at 467 Reclamation Street belongs to Mr Wong’s family. The approval of the Application was stated in the Approval Memorandum to be on the basis of Mr Wong’s rental income from the Property and from another property at Tai Kok Tsui, and the low “loan to value ratio” of the Property. The Approval Memorandum further recommended a “phone verification” for due diligence. 44.On 5 December 2015, Jacky was informed by Oscar that the Application and the terms of the Loan to Mr Wong had been approved. Jacky then telephoned Joey, and obtained from Joey the telephone number of Mr Wong. He telephoned Mr Wong on 5 December 2015, and according to Jacky’s evidence, he had introduced himself as calling from the Plaintiff for Mr Wong’s confirmation of a 3rd mortgage loan. Jacky asked for Mr Wong’s Hong Kong identity card number and the address of the Property. Upon receiving Mr Wong’s confirmation in these respects, Jacky inquired from Mr Wong the purpose of the Loan, and was told by Mr Wong that it was for business operation. Jacky told Mr Wong that the Application had been approved, and informed him of the terms such as the Loan amount, the interest rate, and the amount of monthly payment. He asked Mr Wong to attend at the office of CC on 7 December 2015 to meet with him and with Ms Tsang, to sign the loan documents and the mortgage documents, and to collect the cheque. 45.In contrast, Mr Wong’s evidence is that when the “Mr Leung” of the Plaintiff had telephoned him on 5 December 2015, he had only asked why Mr Wong required such a substantial loan, and to attend the office of CC on 7 December 2015. Mr Wong claims that he had only asked Mr Leung to contact Alvin. 46.Mr Wong further claims that when he met with Alvin later, on the same day as Jacky’s call, he had complained to Alvin about the Mr Leung who had called, and that Alvin had immediately called the Plaintiff. 47.Two observations are made in relation to Mr Wong’s evidence. First, Mr Wong’s complaint was that Mr Leung had been rude when he had asked why Mr Wong required the loan for a substantial amount. This supports Jacky’s evidence that he had inquired on the purpose of the Loan, when he telephoned Mr Wong. Second, Mr Wong accepted in his witness statement of 8 March 2017 that he had no means of knowing whether Alvin had indeed placed the call to either the Mr Leung to whom Mr Wong had referred, or to anyone of the Plaintiff, or at all. 48.On the whole, Jacky’s evidence on his telephone call to Mr Wong on 7 December 2015 is more credible. The Approval Memorandum had stated that phone verification was required for due diligence, and it is more probable than not that when Jacky was instructed that the Application had been approved, and when he set up the meeting with Mr Wong for the loan documentation to be signed, he would have sought to verify with Mr Wong on the telephone his identity, the fact of his Application, the purpose of the Loan sought, and the terms of the Application as approved. 49.With regard to the meeting at the office of CC on 7 December 2015, different accounts have been given by Mr Wong on the one part, and the Plaintiff’s witnesses Jacky, Oscar, and Ms Tsang on the other part. 50.According to Jacky and Oscar, they were together in the conference room at their meeting with Mr Wong, who was alone. Jacky and Oscar maintained that they did not see Mr Wong with anyone, whether TFL or at all, when they were at CC’s office. Their evidence is that Jacky asked Mr Wong for his Hong Kong identity card for a photocopy to be made, and that Mr Wong produced the original supporting documents relating to the Application. Jacky maintained that he had explained to Mr Wong the terms of the Agreement and of the Loan, and that Mr Wong signed the Agreement, a memorandum of the Agreement, the Plaintiff’s offer letter, and other documents relating to the Loan in the conference room of CC, in the presence of himself and Oscar. According to Jacky, Mr Wong had read the documents carefully before signing them. As the Plaintiff has pointed out, Mr Wong was a banker before his retirement. He had also executed the first mortgage in favour of Fubon Bank. He could not have been a novice to transactions relating to loans and security documentation, and on Jacky’s evidence, Mr Wong appeared to understand what he had carefully read before signing them. After his signature, Jacky made photocopies of the documents and gave copies to Mr Wong, and the original signed copies to Oscar. Oscar then left CC’s office with the original set of documents. 51.Jacky’s evidence is that after Oscar had left, Ms Tsang then entered the conference room, to explain the contents of the Charge and other relevant documents to Mr Wong, who then signed the Charge before Ms Tsang. Jacky then left CC’s office before any cheque was handed over to Mr Wong. Jacky denies that Ms Tsang had at any time asked him whether any part of the Loan should be retained for payment of the first 3 installment repayments. 52.Oscar’s evidence is to the same effect and confirms Jacky’s account of the meeting on 7 December 2015. 53.Ms Tsang was a paralegal in the employ of CC. According to her evidence, she received an email from Jacky on 6 December 2015, with instructions to prepare the Charge for the Property, in relation to a loan between the Plaintiff and Mr Wong as borrower. It was agreed that Jacky and Mr Wong would attend CC’s office in the afternoon of 7 December 2015, for the relevant Agreement and the Charge to be signed. 54.Ms Tsang claims in her evidence that she had been notified by the receptionist on 7 December 2015 that Oscar and Jacky had arrived and were in the conference room. She had understood that Jacky and Oscar would first arrange for Mr Wong to sign the loan documents, so she did not immediately join them in the conference room. Only later was she informed that Mr Wong had finished signing the loan documents, whereupon she went to the conference room where Jacky and Mr Wong were. Ms Tsang could not remember if Oscar was there, when she joined the meeting. She claimed, however, that there was no TFL in the conference room, as Mr Wong alleged. 55.Ms Tsang’s evidence is that she explained the contents of the Charge and other relevant documents to Mr Wong for his execution. The documents which Mr Wong signed were produced in evidence. After Mr Wong had signed the documents, Ms Tsang gave him the cheque for $3 million, which Mr Wong signed a receipt therefor. According to Ms Tsang, throughout the entire process on 7 December 2015, she had not noticed anyone who had accompanied Mr Wong to CC’s office, or who had left with him. She confirmed that Mr Wong did not introduce any person to her as TFL at the meeting, and that she did not know any TFL. Ms Tsang maintained that she had not asked Jacky, Oscar, or anyone else, whether it was necessary to retain any part of the Loan for the first 3 installment repayments to be made by Mr Wong to the Plaintiff, as alleged by Mr Wong. 56.The evidence of Jacky, Oscar and Ms Tsang was not faulted in cross-examination. 57.Whilst I can appreciate that Mr Wong’s account of his meeting on 7 December 2015 cannot be perfect, bearing in mind the lapse of time, there are nevertheless inconsistencies in the evidence contained in his witness statements made in March and June 2017, when compared to the account of the meeting as pleaded in the Defence. It has to be borne in mind that the original version of the Defence which was filed on behalf of Mr Wong in July 2016 contained very detailed particulars of his dealings and meetings with Alvin, and in particular of his meeting on 7 December 2015. The original Defence was filed but 7 months after the relevant meeting, when Mr Wong’s recollection should have been relatively fresh, bearing in mind the significance and impact of the event. 58.The key point of the meeting which Mr Wong wished to highlight was that the Plaintiff’s Jacky (ie the Mr Leung he had referred to) had had contact and communication with TFL of World Link at CC’s office, such that they must have been in collusion and the Plaintiff must have been a party to Alvin’s and TFL’s fraudulent scheme – “playing the same game”, as the Court had observed in Wong Kwok Wai and Famous Zone Electronics. 59.In his first witness statement of 8 March 2017, Mr Wong stated that he first met with Jacky at the reception area of CC’s office, and that he was then taken into a conference room by Ms Tsang, whilst Jacky and TFL talked in another room. In his second witness statement of 15 November 2017, Mr Wong stated that as soon as Jacky had met up with TFL at the reception area of CC’s office, they had gone into another room to confer, showing that they were very familiar with one another. 60.However, in paragraph 39 of the original version of the Defence dated 8 July 2019, no mention had been made of any discussion or contact between Jacky and TFL at all. In fact, it referred to Mr Wong meeting with Jacky and Ms Tsang in the conference room, whilst TFL waited in the reception area. Nor was there any reference in paragraph 40 of the original Defence, that Jacky was in the reception with TFL when Mr Wong went to the reception area after signing the documents in the conference room. 61.In the Amended Defence dated 10 March 2017, paragraph 39 was amended to plead that Mr Wong was first taken into the conference room by Ms Tsang, whilst TFL and Jacky waited in the reception. If that was true, Mr Wong would have no means of knowing whether and how Jacky and TFL had allegedly conferred and discussed with each other in a familiar manner. 62.Moreover, in paragraph 40 of the Amended Defence, Mr Wong stated that when he returned to the reception to meet TFL after signing the documents, Jacky was not in the reception area, and that Ms Tsang later came to the reception area with Jacky from the office area. This is inconsistent with the claim that Mr Wong had been in the conference room whilst Jacky was with TFL. Paragraph 40 was also amended, from the original plea of Ms Tsang consulting TFL as to the retention of a part of the Loan, to Ms Tsang consulting Mr Leung instead. 63.The Plaintiff highlighted the fact that Mr Wong had never made any mention of Jacky or of the Plaintiff and their involvement in Alvin’s fraudulent scheme, when he reported the matter to the police shortly after the incident. Mr Wong’s report and his first statement to the police was made on 11 December 2015, which was only a few days after his meeting with the Plaintiff on 7 December 2015. In that statement, Mr Wong referred to his liaison and dealings with, and his signing of loan agreements firstly at the offices of the solicitors for Total Express on 17 November 2015, and then at the office of CC on 7 December 2015, in the company of TFL. However, Mr Wong made no claim that either the Plaintiff, Jacky or Oscar were parties to the fraud perpetrated on him. 64.The purpose of reporting the matter to the police was obviously for the identification of persons who had perpetrated the fraud and deceit on Mr Wong, and the focus of making the police statements must have been to give an account of all persons who had a role to play in the entire scheme. As the Plaintiff emphasized, Mr Wong and the police never targeted the Plaintiff or Jacky either when the report was made in December 2015, or thereafter. (According to Mr Wong, Alvin was subsequently arrested.) 65.On 9 May 2016, Mr Wong made a further statement to the police. The statement identified Ms Li (purporting to be from HSBC) as Suspect 1, Mr Li (also purporting to be from HSBC) as Suspect 2, Alvin as Suspect 3, and TFL (or Ah Fai) as Suspect 4. Mr Wong referred in his statement to Jacky (Mr Leung)’s telephone call to him on 5 December 2015, and to his meeting at CC’s office on 5 December 2015. He claimed in his statement that TFL had taken him to CC’s office, and that he had met with Mr Leung of the Plaintiff (ie Jacky) upon arrival there. Mr Wong further stated that it was Ms Tsang who had taken him into the conference room, where he signed the Agreement, but made no mention of Jacky making any contact or having any discussion with TFL - which one would expect him to do, if he had truly believed Jacky and the Plaintiff to be in collusion with TFL and Alvin or World Link. Of significance is the fact that Mr Wong claimed, in his statement to the police, that after Ms Tsang came out of the conference room, she had asked TFL, and not Jacky, whether 3 months’ payment installments should be withheld from the Loan. This contradicts Mr Wong’s case and suggestion that Jacky was privy to the scheme of Alvin and World Link, as Jacky was somehow consulted on the withholding of a part of the Loan from Mr Wong. 66.What can be concluded, from the different narratives made by Mr Wong shortly after the meeting on 7 December 2015: in the police statements of December 2015 and May 2016, in the Defence of July 2016 and March 2017, and in his witness statements in these proceedings, is that Mr Wong’s recollection of the role allegedly played by Jacky in the meeting on 7 December 2015 is unreliable. 67.The Plaintiff in fact submits that Mr Wong’s evidence on Jacky’s involvement in the fraudulent scheme perpetrated by Alvin and World Link is pure fabrication, and an attempt merely to avoid liability to the Plaintiff under the Agreement. The Plaintiff argued that this is supported by the fact that even in the letter from Mr Wong’s solicitors of 24 March 2016, no mention was made at all that the Plaintiff was a party to any fraud or deception perpetrated by Alvin on Mr Wong. This was after letters of demand had already been issued by the Plaintiff’s solicitors, in March 2016, for payment of the amounts due under the Agreement. 68.I am not persuaded that Mr Wong has fabricated the evidence as to TKL and his presence at the office of CC. However, his recollection of the roles played by Jacky and Oscar, and of their presence, throughout his visit to CC on 7 December 2015 is unreliable for the many inconsistencies and shifts in his evidence, and much of his case on Jacky’s alleged involvement and association with Alvin and TKL is based on pure speculation. Obviously, Mr Wong regrets having believed Alvin’s story, and he must have examined and re-examined each part of the scheme and the roles and actions of the different individuals he had encountered, in an attempt to subjectively apportion blame, after the event. Whether the Court can be satisfied, to the requisite standard of proof set out in the authorities, that the Plaintiff is liable in law for collusion as alleged, depends on the evidence adduced at trial. 69.There is no doubt that Mr Wong is an unfortunate victim of fraud, but on the available materials, there is no evidence at all that anyone of the Plaintiff was a party to the fraud and deception practised by Alvin, or TKL, or the Ms Li or Mr Li who had initially called Mr Wong, and no evidence that Alvin or World Link was acting for and on behalf of the Plaintiff. Nor is there any evidence that Jacky or anyone of the Plaintiff was privy to the representations made by and/or the acts of Ms Li, Mr Li, Alvin and TFL, in relation to the 2nd Mortgage Loan and the 3rd Mortgage Loan, or any of the other overt acts pleaded in paragraph 53 of the Defence. There is no clear evidence to show that Jacky or anyone of the Plaintiff had taken part in these acts. Apart from the presence of Jacky and Oscar at the time when Mr Wong signed the Agreement and/or the Charge on 7 December 2015, which can be explained by the fact that they were attending to Mr Wong’s execution of an agreement which they believed to be a genuine contract for a loan to be made by the Plaintiff to Mr Wong, for which approval had been given by the Plaintiff, there is nothing to suggest that Jacky, Oscar or anyone of the Plaintiff had taken part or assisted in Alvin’s fraudulent scheme. There are no reliable and proved facts from which any inference can be made that the Plaintiff had knowledge of Alvin’s dealings with Mr Wong, or had participated to further or assist Alvin’s carrying out of the fraud on Mr Wong. 70.At paragraph 55 of the Defence, Mr Wong claims that the Plaintiff did not have actual or honest belief that Mr Wong could repay the interest and principal according to the terms of the Agreement, and that the Plaintiff had turned a blind eye to the fact that the Loan was beyond Mr Wong’s repayment abilities. On that basis, it was claimed that the Plaintiff and World Link were acting in concert and surreptitiously in a dishonest enterprise to extract money from Mr Wong. 71.Having considered the Plaintiff’s evidence as to the referral of the Application from IAL, and the evidence contained in the Approval Memorandum, I reject the allegation that the Plaintiff had turned a blind eye to Mr Wong’s circumstances and payment abilities. With the facts set out in the Approval Memorandum to explain the approval of the Loan, and the facts known to the Plaintiff at the material time in December 2015, there is no basis to find that there was any dishonesty on the part of the Plaintiff as suggested by Mr Wong. 72.In the absence of any evidence that Alvin was the Plaintiff’s agent, or that the Plaintiff had received any part of the money which had been received by Alvin from the loans obtained for Mr Wong, the claim that the Plaintiff had effectively charged interest of 98.8%, or 134.8%, as alleged in the Defence, cannot stand. The Agreement provides for interest to be paid at 3% per month, namely 36% per year, which is not the excessive rate of 60% per annum prohibited under section 24 of the Ordinance, and further does not exceed the rate of 48% provided for in section 25 (3) of the Ordinance. 73.There is no evidence of the Plaintiff receiving any costs, charges, expenses or remuneration in connection with the Loan under the Agreement. 74.Mr Wong did not at trial pursue the claim that the Agreement is illegal for contravention of sections 21 and 22 (1) (b) of the Ordinance, only maintaining that he was a victim to the fraud. In any event, it is not his case that he had attempted to make repayment of the Loan under the Agreement, or that the Plaintiff had prevented him from making repayment of the Loan by installments. I fail to see how any alleged breach of the provisions of the Ordinance are relevant to affect enforcement of the Agreement. 75.By reason of the matters set out in the preceding paragraphs, there is no basis to find that the Agreement is unlawful or unenforceable. Disposition 76.The Plaintiff is entitled to judgment for the principal Loan of $3 million, outstanding interest thereon at the rate of 3% per calendar month until payment (but subject to the court order made on 18 July 2018 excluding interest payable), and to the order for delivery up of vacant possession of the Property, with costs of the action. A draft Judgment Order should be submitted to the Court within 14 days for approval.
Ms Shannon Leung, instructed by Cheung & Choy, for the plaintiff The defendant appeared in person |
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