Sun Man Wai Kennis, Appointed By the Order of Master S P Yip Dated 30th May 2016 To Act As the Representative of the Estate of Uy Moon Eng, Deceased v. Sun David Tse Chien

HCA 1322/2018

[2021] HKCFI 591

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1322 OF 2018

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Before: Madam Recorder Eva Sit SC for paper disposal

Date of written submissions: 23, 30 September and 6 October 2020

Date of Decision: 18 March 2021

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D E C I S I O N

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1.This is the Defendant’s appeal against the orders of Master Anthony H K Chan made on 7 July 2020:-

(1)  allowing the Plaintiff’s application for specific discovery, specifically to make and file an affidavit with respect to and provide inspection for 2 classes of documents, namely (i) documents the Defendant submitted to the Social Welfare Department for application of “Old Age Living Allowance” (“SWD Documents”) and (ii) documents the Defendant submitted to the Housing Authority for application of public housing which he ultimately obtained in Pak Tin Estate, Kowloon (“HA Documents”); and

(2)  granting leave to the Plaintiff to serve the Witness Statement of Lam Mei Chu dated 22 November 2019 (“Lam Statement”).

2.The Defendant has also issued a summons dated 28 August 2020 for leave to adduce further evidence in this appeal.

3.Pursuant to the directions of Madam Justice Au-Yeung made on 28 August 2020 and 3 September 2020, both the appeal and the further evidence application are to be disposed of on the papers.

THE FACTS

4.The main protagonists in this case are the late Madam Uy Moon Eng (“Deceased”) and the Defendant, who were never married but cohabited prior to the Deceased’s demise in 2016.

5.The Plaintiff is one of the Deceased’s daughters and is appointed by an order of the court to act as the representative of the Deceased’s estate in these proceedings.

6.The Deceased was the registered owner of Flat G on 20^th Floor of Block 3, Mount Haven, No. 3 Liu To Road, Tsing Yi, New Territories, Hong Kong (“Tsing Yi Property”). The Plaintiff claims that the Defendant has been in wrongful occupation of the Tsing Yi Property since the Deceased’s demise, and seeks on behalf of the Deceased’s estate vacant possession and damages for trespass.

7.The Defendant denies he has been in wrongful occupation.  Instead, he advances a case of common intention constructive trust, alternatively resulting trust, in his Amended Defence and Counterclaim as follows:-

(1)  He and the Deceased had lived together as de facto man and wife since 1989.  They had wanted to but could not marry each other as they remain married to others from whom they were estranged.

(2)  Throughout their relationship, the Defendant was the sole breadwinner who paid for all the expenses as well as the purchase price for acquisition of properties, and the Deceased was a housewife with no gainful employment.

(3)  They had previously purchased a property in Tai Po in 1991 as joint tenants, with the consideration wholly funded by the Defendant, as their family home.

(4)  When the Tai Po property was sold at a gain in 1992, they then purchased Flat G, 7/F, Hip Lee Building, Nos. 12-30 Hang On Street, Kowloon (“Kwun Tong Property”), again as joint tenants, for use as their family home. The Defendant says that the consideration for the Kwun Tong Property was also wholly funded by him.

(5)  In the meantime, they also purchased a property in the Mainland, 廣州花都市湖畔花園康景樓26D室 (“PRC Property”), in their joint names in 1993, also said to be funded by the Defendant.

(6)  In 1999, the Defendant assigned his half moiety in the Kwun Tong Property to the Deceased at a stated consideration of HK$350,000.  He claims this was not a true sale, but was undertaken because of his health considerations which led to concerns that he might become paralyzed and unable to co-sign documents relating to the Kwun Tong Property, and he never received any of the stated consideration from the Deceased.

(7)  In late 2001, the Tsing Yi Property was purchased, this time in the Deceased’s sole name. The Defendant says this was for the same reason in (6) above.  He also claims that like previous purchases, he alone funded the whole of the consideration.

(8)  The Defendant claims that the Tsing Yi Property (as with all properties previously purchased) was acquired and put into the Deceased’s sole name on the common intention, agreement and understanding between them that they would be the beneficial joint tenants and the same would be used as their family home.

(9)  Although the Tsing Yi Property was not in the end used as the family home, there was a specific, health-related reason for it; nevertheless the Deceased and the Defendant continued to live together in other rented premises, and continued to use the Tsing Yi Property for storage of personal effects.

8.The Defendant therefore counterclaims for a declaration that the Tsing Yi Property was held by the Deceased on constructive trust for herself and the Defendant as joint tenants, alternatively on resulting trust for the Defendant.  He also seeks similar declarations with respect to (i) the PRC Property and (ii) the proceeds of the Kwun Tong Property from its sale to the Urban Renewal Authority in 2015.

9.Although the Plaintiff does not dispute (i) the property transactions and the registered ownership with respect to them, or (ii) that the Deceased and the Defendant had cohabited as man and wife between 1989 and 1999 and continued to live under the same roof after 1999, she denies there was any trust, constructive or resulting, and gives a completely different account on the parties’ relationship and dealings:-

(1)  The Plaintiff says that the Deceased, who was a (probably unlicensed) medical practitioner, derived substantial income from her medical practice far exceeding that of the Defendant, and was the sole contributor of the funds for acquiring the properties over the years.

(2)  In 1999, the romantic relationship between the Deceased and the Defendant came to an end as a result of the Defendant’s infidelity, whereupon the Deceased “bought out” the Defendant’s share in the Kwun Tong Property and actually paid HK$350,000 to the Defendant.

(3)  In 2001, the Deceased acquired the Tsing Yi Property in her own name with her own funds.  The Defendant was made a co-borrower of the mortgage loan only because the Deceased was unable to furnish income proof and hence an additional borrower was provided to satisfy the bank’s requirements.

(4)  After their separation, the Defendant begged the Deceased to allow him to stay with her in her properties, as he had nowhere else to live in Hong Kong.  The Deceased allowed him to stay under the same roof but they no long maintained any romantic relationship.

10.In the premises, at trial the court will have to determine:-

(1)  Whether there was any common intention, agreement and understanding between the Deceased and the Defendant that they would be the joint tenants of the Tsing Yi Property, the Kwun Tong Property and the PRC Property, whatever may be the registered ownership of the same; and

(2)  who funded the consideration of each of the aforesaid properties.

SPECIFIC DISCOVERY APPLICATION

11.By summons dated 18 December 2019, the Plaintiff sought specific discovery of 5 classes of documents.

12.By March 2020, the Defendant had disclosed certain documents under 3 of the 5 classes sought by way of a supplemental list of documents and verified the same, as directed by an order of Registrar S Kwang dated 10 January 2020.  Thereafter the Plaintiff confirmed, in good time before the hearing before Master Anthony H K Chan, that she would no longer pursue those 3 classes.

13.Thus, only 2 of the 5 classes remained, namely (i) the SWD Documents and (ii) the HA Documents.  Before the Master, the Defendant opposed them solely on the ground of lack of relevance.

14.As indicated above, the Master ordered specific discovery against the Defendant with respect to both classes.

15.On appeal, the Defendant relies on 2 grounds to oppose specific discovery:-

(1)  lack of relevance; and

(2)  privilege against self-incrimination, on the basis that disclosure of the SWD Documents and the HA Documents “could plausibly incriminate [him] in allegedly contravening the provisions governing the respective statutory regimes for Social Welfare Subsistence & Public Housing Accommodation”.

16.This being an appeal from Master, the hearing is conducted de novo. I will accordingly consider all the arguments raised by the Defendant before me, regardless of whether they were raised before the Master.

17.There is no real dispute between the parties on principles applicable to specific discovery applications, which are summarized in Paul’s Model Art Gmbh v UT Ltd [2006] 1 HKC 238.

Relevance

18.On relevance, the Plaintiff’s case is that:-

(1)  It is not disputed by the Defendant that he has (i) been in receipt of the government’s Old Age Living Allowance since 2010; and (ii) applied for and was allocated a public housing unit in 2014. 

(2)  It is common knowledge that eligibility for these benefits require the applicant’s income and assets not to exceed certain prescribed limits, and that the applicant should not have any interest in domestic property.  The SWD Documents and the HA Documents would reveal whether the Defendant has stated, as a matter of fact, that he owned or had an interest in the Tsing Yi Property (and indeed the Kwun Tong Property) as at the time of these applications.

(3)  This is relevant to the Defendant’s defence that notwithstanding the Tsing Yi Property and the Kwun Tong Property were then in the Deceased’s sole name, they were held on trust for him as joint tenant pursuant to the alleged common understanding between the parties.

19.The Defendant’s opposition based on lack of relevance is essentially four-fold:-

(1)  Discovery will not be ordered in respect of an allegation not made in the pleadings, and the Plaintiff did not plead the Old Age Living Allowance or the public housing unit in her pleadings.

(2)  The purpose of the SWD Documents and the HA Documents is to discredit the Defendant, by showing that he was concealing his beneficial interest in the Tsing Yi Property. Discovery relating solely to a party’s credit is not allowed.

(3)  The SWD Documents and the HA Documents only concerned events that took place in 2010 and 2011, long after the events in dispute in this action, which took place between 1990 and 2001.

(4)  Discovery is also unnecessary since the criteria for entitlement to these benefits are publicly available, and this would suffice for the Plaintiff to impugn the Defendant’s credit.

20.For the reasons below, none of the Defendant’s contentions has any substance.

21.First, while relevance is to be determined primarily by reference to the pleadings, the pleadings must be looked at broadly: Jade’s Realm Limited v Director of Lands (unreported, HCA 1509/2012, 9.1.2015), §20(5).  A distinction is also to be drawn between a material fact (which needs to be pleaded) and evidence in substantiation thereof (which need not be pleaded).  In this case, the issue is the material fact, which has been clearly raised in the pleadings, on whether there was a common understanding involving the Defendant that he had a beneficial interest in (inter alia) the Tsing Yi Property, which he said was held on trust for him by the Deceased since 2001.  The SWD Documents and the HA Documents (and the information contained therein) are evidence that go towards proving or disproving that issue.

22.Second, in light of the above, I do not agree that the SWD Documents and the HA Documents relate solely to the Defendant’s credit. They are clearly relevant to the factual question of what was the Defendant’s own understanding as to whether he had an interest in the Tsing Yi Property (as well as the Kwun Tong Property). 

23.Third, that the SWD Documents and the HA Documents only came into existence in or after 2010 is no answer, since on the Defendant’s case he has a beneficial interest in (inter alia) the Tsing Yi Property at all times after 2001, and these documents would show whether his position in 2010 was consistent with that assertion.

24.Fourth, the availability of the eligibility criteria wholly misses the point, as what is relevant is the factual position on ownership asserted by the Defendant, not what the criteria were, in 2010.

25.For completeness, I do not consider that the classes of the SWD Documents and the HA Documents as described are too wide. Although there is no time or year specified for these classes, it is clear from the description that they are limited to the application documents submitted by the Defendant for the Old Age Living Allowance and the public housing unit, and the Defendant plainly has no difficulty understanding which time period they refer to, which he has identified in paragraphs 11 and 12 of his 1^st affirmation.

Privilege against Self-incrimination

26.The issue of privilege against self-incrimination (“PSI”) arises in the following circumstances.

(1)  As indicated above, PSI was not relied upon before the Master.

(2)  After the appeal was launched, in his 5^th affirmation filed on 29 July 2020, the Defendant raised for the first time PSI as a basis to resist discovery. The relevant paragraph in his affirmation states “[a]s advised by my lawyers, I verily believe that the discovery sought … could plausibly incriminate myself in allegedly contravening the provisions governing the respective statutory regimes for Social Welfare Subsistence & Public Housing Accommodation”.  There are then assertions of there being a real and appreciable risk of his being prosecuted “under the aforesaid statutory regimes”.  No further particulars are given.

(3)  In written submissions filed on behalf of the Defendant, it was then stated that the HA Documents insinuated the Defendant “most probably contravened the full and frank disclosure provision described under section 26(1) of the Housing Ordinance”, whereas for the SWD Documents, it is asserted that “a standard declaration is not uncommonly found in an application form … that any false statement knowingly or wilfully made or any information knowingly or wilfully withhold by the applicant will render him liable to prosecution”.  They go on to say the Plaintiff “is certainly curious about how the Defendant could apply for public assistance if he had a beneficial interest in the Tsing Yi Property unless the application documents he submitted to the Social Welfare Department and the Housing Authority failed to divulge such beneficial interest”, and that “both welfare allowance and public housing schemes are subject to criminal sanction in relation to any false information”.

27.Privilege against self-incrimination is a deep-rooted privilege at common law, which entitles a person to refuse to answer a question, or to produce any document or thing, if to do so may tend to bring him into the peril and possibility of being convicted as a criminal: HKSAR v Lee Ming Tee (2001) 4 HKCFAR 133, 156D-F. 

28.Its purpose is to respect the will of the accused to remain silent, thereby ensuring that the accused is not compelled to provide proof of his guilt.  The privilege therefore has no application to evidence which exists independently of the will of the deceased: 177E-G op.cit. See also Koon Wing Yee v Insider Dealing Tribunal (2008) 11 HKCFAR 170, §81.

29.The common law privilege overlaps, but is not coterminous, with the protections under articles 10 (right to a fair trial) and 11(2)(g) (not to be compelled to testify against himself or to confess guilt in criminal proceedings) of the Hong Kong Bill of Rights, for the latter is only a testimonial immunity and is much narrower in scope than the common law privilege.  It also has no application to evidence compulsorily obtained which exists independently of the will of the accused: Lee Ming Tee 171H; Koon Wing Yee §81.

30.The following principles on the common law privilege against self-incrimination are applicable:-

(1)  PSI is only engaged if it exposes a party to a real and appreciable risk of incrimination or a risk of prosecution, not a theoretical or fanciful one. The matter must be looked at realistically and the court should consider the balance of the proceedings in the light of all the materials before it: Pacific Harbor Advisors Ptd Ltd v Winson Federal Ltd, CACV 115/2016 (unrep., 22 June 2016), §5.

(2)  That said, it is not necessary that there is a pending criminal investigation, and it suffices that the evidence may set in train a process which may lead to discovery of real evidence of a criminal character: Secretary for Justice v FTCW [2014] 1 HKLRD 849, §47.

(3)  PSI must be claimed on oath by the party asserting it on his own behalf. However, the mere fact that a party swears that his answer would incriminate him is not conclusive or sufficient: AT&T Istel Ltd v Tully [1993] AC 45, 67H-68B.  The matter should be dealt with by proper evidence by affidavits: FTCW §14.

(4)  It is not enough for the party invoking PSI to establish that he is facing a real risk of prosecution of a particular offence.  He must go further and establish that requiring him to provide disclosure has a tendency to expose him to a criminal charge: China Shanshui Cement Group Ltd v Zhang Caikui [2017] 2 HKLRD 719, §8.

(5)  In deciding whether a claim for PSI should be upheld, the court has to examine whether there is a “clear link” between the information sought and the offence: China Shanshui §9.

(6)  Where the court considers it appropriate, any danger to the witness can be removed by protective measures: Pacific Harbor Advisors §§24-25.

31.The basis for the Defendant invoking PSI is (i) the bare and unparticularized assertion in his 5^th affirmation in §26(2) above; and (ii) a few short paragraphs in his written submissions (summarized in §26(3) above).

32.In my view, the Defendant has demonstrably failed to establish PSI in this case.

33.First, while the Defendant has claimed the privilege in his 5^th affirmation, his affirmation evidence has wholly failed to set out the basis for PSI being engaged, and there being a real and appreciable risk of prosecution. The offence(s) that the Defendant is supposed to be exposed to is not even identified in his evidence, and only one (when there are 2 separately statutory regimes) is mentioned in his written submissions, without any analysis. Such requirement is no mere formality; since the Defendant is alleging that disclosure would expose him to risk of prosecution, it behoves him to identify which provisions or offences he is said to be potentially liable for, as such identification (which would also reveal the formulation and what is required to establish the same) enables the court to assess, by reference to the circumstances of the case, whether the asserted risk is a real and appreciable one.  This is important, as the court must make sure that the privilege is not abused: China Shanshui §7.  In this case, other than an assertion of section 26 of the Housing Ordinance (Cap.283) in written submissions, there is no evidence at all concerning what standard declarations the Defendant would have been required to be made (or their terms), or which provision in the statute concerning social welfare regime that is said to be engaged. Accordingly I do not consider the Defendant has discharged his burden.

34.Second, and without prejudice to the above, I consider that on the materials placed before me (including the evidence of the Plaintiff on the same), on the assumption that the Defendant would not have been eligible for a public housing unit if he had interests in a domestic property, then his being allocated a public housing unit may indicate that he had not disclosed his interest in the Tsing Yi Property.  This could potentially raise a risk of prosecution for making false declaration to the Housing Authority.  However, I am not satisfied that on the facts of this case, a real and appreciable risk has been raised, because whether the Defendant in fact had an interest in the Tsing Yi Property and the Kwun Tong Property is not an undisputed fact but is the subject matter that is pending determination before the court. It is only after trial that the relevant fact will be established, and depending on what that finding is, the Defendant may or may not have made a false declaration. 

35.As to the SWD Documents, there is simply insufficient materials before the court and the Defendant has failed to establish what the alleged risk is, or how it is said to be real and appreciable.

36.Third and in any event, the Defendant has failed to establish a “clear link” between disclosure of the HA Documents and SWD Documents and the risk of prosecution.  These documents are already in the possession of the relevant public authorities.  If the Defendant’s case is made out at trial and a finding that he has beneficial interest in the Tsing Yi Property and/or the Kwun Tong Property is made, the declarations made by the Defendant would be false regardless of disclosure and production of the HA Documents and the SWD Documents now.  This is not a situation where the evidence was made available to the authorities solely by reason of the order for specific discovery, or the declarations were made solely by reason of the order.

37.Fourth, the HA Documents and SWD Documents are documents that exist independently of the will of the Defendant.

(1)  Independent evidence means “evidence that came into existence independently of (and usually prior to) any compulsory questioning of the defendant or any application of the court’s compulsory discovery process”: C plc v P [2008] Ch 1, §6, cited in FTCW §52.

(2)  The HA Documents and the SWD Documents clearly came into existence prior to and independently of these proceedings.  Although the Defendant was involved in filling them out, these documents were required by the public authorities and retained by them for their own purposes. As Ribeiro PJ explained in Lee Ming Tee 177F, there is no inherent unfairness in establishing a person’s guilt by the use of reliable objective evidence obtained from an independent source, even if the acquisition of that evidence was facilitated by clues contained in the excluded admissions of an accused.

(3)  Further, the authorities relied upon by the Defendant on this aspect do not assist him.

(a)  Funke v France (Application no. 10828/84)  (1993) is wholly distinguishable, for in that case the issue was breach of article 6(1) of the European Convention of Human Rights (in substantially similar terms to articles 10 and 11 of the Hong Kong Bill of Rights), and the finding of breach was based on extravagant and oppressive use by the custom authorities of criminal prosecutions and convictions to obtain banking documents of the accused which they could easily have obtained from the banks themselves.

(b)  As for R v K [2010] QB 343, that was considered by the Court of Appeal in FTCW, the court declined to follow it (§§62-70).

38.Accordingly, there is no merit in the Defendant’s opposition to specific discovery, and his appeal is dismissed.

A LEAVE TO FILE ADDITIONAL WITNESS STATEMENT

39.The Lam Statement was made by a long-time acquaintance of the Deceased (since around 1973), and sets out (inter alia) the deponent’s understanding of the Deceased’s vocation and financial circumstances in the 1980s and 1990s, based on what she has observed and experienced, as well as what the Deceased had told her.

40.The Lam Statement is clearly relevant to a main issue in this case, namely the financial circumstances of the Deceased and whether it was her or the Defendant who funded the acquisition of properties over the years.

41.This case is not at an advanced stage.  Case management directions were given on 5 March 2019.  With respect to the exchange of witness statements there were a few extensions, and an unless order was made on 16 September 2019 (“Unless Order”). On 23 September 2019, the Plaintiff filed and exchanged witness statements in compliance with the Unless Order.

42.The Plaintiff has explained in her 5^th affirmation how she came to be aware of the evidence that Madam Lam may be able to give and its relevance to the issues in dispute in October 2019.  The Lam Statement was then prepared in November 2019, and leave was then sought in December 2019 to adduce the same.

43.Given the obvious relevance, the lack of delay as well as lack of prejudice to the Defendant in derailing any milestone date, it is surprising that not only did the Defendant object to its admission, but pursued the matter all the way up to an appeal.

44.The absence of basis of the Defendant’s opposition is made clear by his grounds of opposition, none of which has any merit.

(1)  Contrary to the Defendant’s allegation, there was no breach of the Unless Order.  The Lam Statement is further evidence, which only became available to the Plaintiff after she has filed her witness statements, for which she is separately seeking leave to adduce.

(2)  As to the Defendant’s arguments on the contents of the Lam Statement and whether they are believable, or are based on personal knowledge or hearsay, or are tailored to meet the Defendant’s evidence, those are matters which should be reserved for trial, and provide no basis to oppose the Lam Statement being adduced when it is prima facie relevant and admissible.  I should also mention that the contents of the Lam Statement are not all hearsay; she has deposed to her personal experience of attending the Deceased’s clinic and consulting her professionally for medical needs.

45.In the premises the Defendant’s appeal on this application is also dismissed.

LEAVE TO ADDUCE FURTHER EVIDENCE

46.On 28 August 2020, the Defendant sought leave to adduce 2 pieces of additional evidence in support of the present appeal, namely (i) the Deceased’s document of identity dated 19 April 1980 describing her occupation as a “worker”; and (ii) Certificate of Registered Particulars of the Defendant showing that on 31 December 1996, the Defendant reported that he was married to the Deceased (“Further Evidence”).

47.However, the present appeal does not turn on the Further Evidence at all.  The Further Evidence only goes to support the Defendant’s case as to the financial situation of the Deceased and the relationship between the Defendant and Deceased.  However, these are not matters that need to be determined at this stage, the present appeal being on procedural matters rather than the substantive merits of the parties’ respective cases.  The Further Evidence has no impact on the analysis as to the relevance and materiality of the Documents and the Witness Statement.

48.I bear in mind the Ladd v Marshall conditions as to the special grounds for accepting further evidence for appeal to judge in chambers.  I do not consider that the first and second conditions in Ladd v Marshall have been satisfied:-

(1)  The Further Evidence is clearly evidence that could have been obtained with reasonable diligence for use at the hearing below, and no satisfactory explanation has been given as to why it was not adduced earlier.

(2)  More importantly, one simply cannot see how the Further Evidence is relevant to the issues on this appeal, which would not require the court to determine the underlying disputes between the parties but only to consider the relevance of the discovery and the Lam Statement in light of the issues revealed in the pleadings.  They cannot conceivably have an influence on the result of the application, still less an important influence.

49.As such the Defendant’s summons to adduce the Further Evidence is also dismissed.

CONCLUSION

50.The Defendant’s appeal with respect to specific discovery and the Lam Statement is dismissed, as is his summons to adduce the Further Evidence.

51.Costs should follow the event. The Defendant has made submissions on the basis that the Defendant is legally aided.  However I do not see how that would render it inappropriate for me to summarily assess the Plaintiff’s costs payable by the Defendant, which I will do.  As to whether the costs orders I make will be enforced against the Defendant at this juncture, that will be subject to the Legal Aid Ordinance (Cap.91) in any event.

52.The Plaintiff also asks for costs to be assessed on an indemnity basis, alternatively for an order that costs of assigned lawyers for the Defendant be disallowed on legal aid taxation.  I do not consider that proper basis for these orders have been made out and I reject such applications.

53.The following costs are summarily assessed and payable by the Defendant to the Plaintiff:-

(1)  For the appeal against the specific discovery order, HK$60,000.

(2)  For the appeal against the witness statement order, HK$38,150.

(3)  For the Defendant’s further evidence summons, HK$55,000.

54.I should mention that while the hearing bundles in this case contain just under 270 pages and the authorities cited by both sides are, while on the high side, not voluminous, the Plaintiff’s solicitors have sought to claim photocopy charges for 3,000 pages.  This is wholly unjustified and has been reflected in the amounts assessed above.

55.The Plaintiff also seeks costs of the application for the 3 classes of documents which she did not pursue, since it was only after the issuance of the summons that those documents were disclosed.  I consider that to be reasonable and will so order.  There is however no information placed before me on the amount.   Accordingly I will direct that such costs be paid by the Defendant to the Plaintiff, to be taxed if not agreed.

Mr Simon Wong, instructed by Christopher K Y Wong, for the Plaintiff

Mr Jeremy Cheung, instructed by Joseph Li & Co, for the Defendants