China Stem Cells Holdings Ltd v. Zheng Ting and Others
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CACV 81, 85 & 90/2024, [2025] HKCA 326 On Appeal From [2024] HKCFI 481 CACV 81, 85 & 90/2024 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NOS 81, 85 AND 90 OF 2024 (ON APPEAL FROM HCA NO 1407 OF 2022) ________________________
________________________ AND CACV 82, 86 & 91/2024 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NOS 82, 86 AND 91 OF 2024 (ON APPEAL FROM HCA NO 1408 OF 2022) ________________________
________________________ AND CACV 83, 87 & 92/2024 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NOS 83, 87 AND 92 OF 2024 (ON APPEAL FROM HCA NO 1409 OF 2022) ________________________
________________________ AND CACV 84, 88 & 93/2024 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NOS 84, 88 AND 93 OF 2024 (ON APPEAL FROM HCA NO 1410 OF 2022) ________________________
________________________ (Heard together)
__________________ J U D G M E N T __________________ Hon Chow JA (giving the Judgment of the Court): INTRODUCTION 1.These are appeals brought by Zheng Ting (“Tina”), Chen Bing Chuen Albert (“Albert”) and Prime Intelligent Management Limited (“PIML”) against the determinations made by Madam Justice Linda Chan in her judgment dated 8 February 2024 (“the Judgment”) after a trial of preliminary issues in 4 actions (“the HK Actions”) heard together. 2.The HK Actions are brought by the joint provisional liquidators of Global Cord Blood Corporation (“GCBC”), a Cayman Islands company, in the names of 3 indirect wholly owned subsidiaries of GCBC (collectively “the Plaintiffs”) to take control of 4 direct wholly owned subsidiaries of the Plaintiffs in Hong Kong (“the HK Subsidiaries”). 3.The Plaintiffs in the HK Actions are:
4.The HK Subsidiaries are:
5.In each of the HK Actions, the relevant HK Subsidiary has been made the 4th Defendant in that action:
BACKGROUND FACTS 6.The disputes in the HK Actions concern the validity of various allotments/transfers of shares, and appointments of directors/secretaries, of the HK Subsidiaries, and are part of a wider dispute over the ownership and control of GCBC and its subsidiaries (“the Group”) between 2 camps of shareholders/former shareholders of GCBC, with those associated or affiliated with Kam Yuen (“Kam”) on one side and Yuan Ya Fei (“Yuan”) on the other. The Group is engaged in apparently highly profitable business relating to cord blood banking services, with most of its operations and assets located in the Mainland. 7.The underlying facts of this case are of considerable complexity, and involved numerous transactions amongst many different parties. However, for the purpose of disposing of the present appeals, the following brief summary of the background facts should suffice. (i) The parties involved 8.GCBC is a Cayman Islands company incorporated in 2003. Its shares were listed on the New York Stock Exchange in November 2009[1]. On 22 September 2022, GCBC was put into provisional liquidation by the Cayman Court. GCBC is an investment holding company, and holds, indirectly through China Cord Blood Services Corporation (another Cayman Islands company), 100% of the issued share capital of CSC Holdings. 9.CSC Holdings holds, directly and indirectly, a number of companies incorporated in Hong Kong (including the HK Subsidiaries), Mainland China, and other jurisdictions (including South BVI). A corporate chart of the Group can be found at §7 of the Judgment. 10.Up until 30 December 2016, Golden Meditech Holdings Limited (“GMHL”), a medical device company whose shares were formerly listed on The Stock Exchange of Hong Kong until its privatisation in 2020, indirectly owned or controlled, through a BVI company called Golden Meditech Stem Cells (BVI) Company Limited (“GMSC”), 78,874,106 shares (amounting to 65.4% of the issued capital) of GCBC (“the GCBC Shares”). 11.The founder of GMHL is Kam, who was the majority shareholder, chairman and an executive director of GMHL. 12.Tina is a qualified accountant and has substantial experience in managing business. She was appointed as an executive director of GMHL in September 2001 until she became a non-executive director in August 2012, a position she held until May 2019. She was also appointed as executive director and chairman of the board of GCBC in June 2009 and 2018 respectively, and as GCBC’s chief executive officer before 2016. She remained a director and the chairman of the board of GCBC after the 2016 SPA referred to in §16 below. Tina apparently has an intimate personal relationship with Kam, and has 2 children with him. 13.Albert joined GMHL as its corporate finance vice president in 2005. He was appointed as a director and chief financial officer of GCBC in 2009, and remained a director of GCBC after the 2016 SPA. 14.Up until 24 September 2022, Tina and/or Albert were in control of, inter alia, CSC Holdings, South BVI and the HK Subsidiaries, being their only directors or secretaries:
15.Nanjing Ying Peng Hui Kang Medical Industry Investment Partnership (“Ying Peng Partnership”) is a limited partnership established in the Mainland and operates as a private equity fund. The executive general partner of Ying Peng Partnership is a company called Nanjing Ying Peng Asset Management Co Ltd (“Ying Peng AMC”), which is vested with all the powers to act for Ying Peng Partnership in dealing with third parties. Ying Peng AMC is ultimately controlled by Yuan of Sanpower Group Co Ltd (“Sanpower”), a Mainland company. (ii) The sale of the GCBC Shares 16.By an agreement dated 30 December 2016 (“the 2016 SPA”) entered into between GMSC (as seller) and Ying Peng Partnership (as purchaser), GMSC agreed to sell the GCBC Shares to Ying Peng Partnership at the price of RMB 5,764 million. Both Yuan and Sanpower acted as guarantors to guarantee Ying Peng Partnership’s obligations under the 2016 SPA. 17.The 2016 SPA was completed on 31 January 2018. Ying Peng Partnership used a BVI company called Blue Ocean Structure Investment Company Limited (“Blue Ocean BVI”) to hold the GCBC Shares. Notwithstanding the completion of the 2016 SPA, 5 directors of GCBC, including Tina (the chairperson) and Albert (the chief financial officer), previously nominated by Kam remained on the board of GCBC, while Blue Ocean BVI appointed one non-executive director, Xu Ping (“Xu”), to the board of GCBC. Two independent non-executive directors were later appointed to the board of GCBC. (iii) The appointment of joint provisional liquidators over GCBC 18.On 29 April 2022, GCBC announced that it had entered into what is referred to in the Judgment as the “Cellenkos Transaction”, under which GCBC agreed to acquire a 100% interest in Cellenkos Inc. (“Cellenkos”), a Delaware biotechnology company, together with certain rights under a licence agreement to market a Cellenkos product in Asia (“the Licence Rights”), for substantial considerations:
19.Blue Ocean BVI, who would stand to lose its majority shareholding of GCBC after completion of the Cellenkos Transaction, objected to the transaction on the grounds that:
20.On 12 May 2022, Blue Ocean BVI obtained an interlocutory injunction (“the Cellenkos Injunction”) from the Cayman Court to restrain GCBC from proceeding with the Cellenkos Transaction. At a subsequent hearing before Kawaley J in July 2022, GCBC (then under the control of its board of directors, including Tina and Albert) contended that the injunction ought to be set aside because the balance of convenience clearly favoured permitting the company to complete the part-performed Cellenkos Transaction. In support of this contention, GCBC relied on an affirmation of Albert sworn on 7 June 2022, in which he stated that Stage 1 of the Cellenkos Transaction had already been completed in that, inter alia, US$664 million had been paid by GCBC on 29 April 2022. In a further undated affirmation made by Albert in reply to Blue Ocean BVI’s evidence, he produced a bank statement (“the Guangfa Bank Statement”) purportedly issued by China Guangfa Bank as evidence of the said payment. On the basis of such evidence, Kawaley J was satisfied that the Cellenkos Injunction should be discharged on balance of convenience ground. However, no order was drawn up by either party to give effect to this part of the judgment of Kawaley J, and thus the Cellenkos Injunction appeared to be still in place by the time that Blue Ocean BVI applied for the appointment of provisional liquidators of GCBC on 22 August 2022[2]. 21.Disputes also arose between GMHL/GMSC on one side and Ying Peng Partnership/Blue Ocean BVI on the other side over the ownership of GCBC. In particular, GMSC alleged that it held a share charge executed by Blue Ocean BVI dated 30 March 2018 over the GCBC Shares to secure Ying Peng Partnership’s obligations under 2 loan agreements dated 29 and 30 March 2018. 22.On 9 August 2022, Blue Ocean BVI obtained evidence which indicated that the Guangfa Bank Statement relied upon by GCBC to support the application for the discharge of the Cellenkos Injunction was a forgery. On 22 August 2022, Blue Ocean BVI made an application to the Cayman Court for the appointment of provisional liquidators over GCBC. On 22 September 2022, Kawaley J made an order appointing Chow Tsz Nga Georgia (“Chow”), Margot McInnis and John Royle as joint provisional liquidators (“the PLs”) over GCBC. In his judgment delivered on 28 September 2022, Kawaley J stated that:
(iv) The Impugned Documents 23.As earlier mentioned, up until 24 September 2022, Tina and/or Albert were in control of CSC Holdings, South BVI and the HK Subsidiaries, being their only directors or secretaries. 24.After their appointment on 22 September 2022, the PLs took steps to secure and take control of the subsidiaries of GCBC. In particular:
25.While the PLs were in the course of taking the above steps, they discovered 30 filings made at the Companies Registry (“CR”) concerning the HK Subsidiaries since 27 September 2022. Those filings purported to notify the public on changes of director and company secretary (ND2A), allotment of shares (NSC1), change of registered address (NR1), change of company name (NNC2), and amendment of articles (NAA1) in respect of the HK Subsidiaries. All these CR filings (except the last NAA1 filed on 21 October 2022) were presented by PIML. When the PLs made inquiries with PIML about those filings, PIML’s response was that the PLs were not shareholders of the HK Subsidiaries. 26.The PLs say that the aforesaid filings were unauthorized, and challenge the validity of the transactions as evidenced by the following documents (“the Impugned Documents”):
Particulars of the Impugned Documents are set out by the Judge in Schedule A to the Judgment. 27.The Impugned Documents, if valid, would have the effect of vesting the ownership and control of the HK Subsidiaries in MS and Notake away from GCBC, because:
(v) The HK Actions 28.On 25 October 2022, the PLs commenced the HK Actions in the name of the Plaintiffs. 29.It is the PLs’ case that since their appointment on 22 September 2022, they have become the only persons with proper authority to take control and manage all the direct and indirect subsidiaries of GCBC, including the HK Subsidiaries. They contend, inter alia, that:
30.On the other hand, Tina and Albert both said that the Impugned Documents were executed in connection with the enforcement of what is referred to in the judgment as the “2019 Security Arrangement”, of which a “Four-Party Agreement” and a “2019 Guarantee” formed part (hereinafter collectively referred to as the “2019 Security Arrangement”), entered into between Yuan (and his companies) on one side and Kam (and his companies) on the other. The Judge summarized Albert’s case at §53 of the Judgment, as follows:
31.As for Tina’s case, the Judge summarized it at §54 of the Judgment, as follows:
32.Insofar as PIML’s position was concerned, although it claimed to adopt a neutral position, its counsel submitted to the Judge that the court could only presently proceed on the footing that Tina and Albert’s case that they signed the 1st Transfer Documents and the 1st Appointment Resolutions before 12 September 2022 was correct. 33.CISIL, MS and Notake, who apparently had some real interests in the HK Actions, did not enter any appearance to defend the Plaintiffs’ claims. (vi) Trial of preliminary issues 34.The Judge took the view that the issue as to who had proper authority to act for the HK Subsidiaries depended entirely on whether the Impugned Documents were back-dated and therefore void, and whether they were made by the directors in breach of fiduciary duties and therefore voidable. Upon the Plaintiffs’ application by summons dated 17 February 2023, the Judge made an order on 2 March 2023 for the trial of 7 preliminary issues. At §56 of the Judgment, the Judge set out the 7 issues (“the Preliminary Issues”) appearing in an “Agreed List of Issues” of the parties:
THE JUDGMENT 35.The trial of preliminary issues took place before the Judge in September 2023. At the trial, the Judge received oral evidence from the following witnesses:
36.The Judge considered that Chow gave evidence in a straight forward and candid manner, and answered all the questions put to her directly. She readily made concessions where appropriate, and remained unshaken throughout cross-examination. The Judge accepted Chow’s evidence in full, and where her evidence on a matter differed from that of Tina, Albert, Lo or Chen, the Judge preferred her evidence to that of the other witnesses. 37.The Judge considered neither Chen nor Lo to be a truthful witness.
38.As for Tina, the Judge noted that her counsel was unable to refute any of the criticisms made by Ms Eva Sit, SC (the Plaintiffs’ trial counsel) concerning her evidence (including obvious falsity, incredibility, evasiveness, and change of evidence), and considered her evidence on the 1st Transfers Documents and the 1st Appointment Resolutions to be “plagued with inconsistencies and … unreliable”. The Judge specifically rejected her evidence that the 1st Transfers Documents and the 1st Appointment Resolutions were signed by her in late August 2022, which the Judge considered to be untrue. 39.Finally, as for Albert, the Judge found that he was not a truthful witness and his evidence regarding the date on which he signed the resolutions approving the 1st Transfers and the 1st Appointment Resolutions in relation to North HK[5] and FFL was unreliable. The Judge rejected his evidence that the resolutions approving the 1st Transfers and the 1st Appointment Resolutions in respect of North HK and FFL were signed by him in the week of 5 September 2022. 40.In respect of the Preliminary Issues, the Judge made the following determinations:
THE APPEALS 41.Tina, Albert and PIML have each lodged an appeal against the Judge’s determinations of the Preliminary Issues. 42.In Tina’s Supplemental Notice of Appeal dated 17 June 2024, Tina raises 5 grounds of appeal:
43.Albert’s Supplemental Notice of Appeal dated 18 March 2024 raises 7 substantive grounds of appeal:
44.PIML’s Notice of Appeal dated 7 March 2024 raises 2 substantive grounds of appeal:
45.In what follows, we shall first deal with some common grounds of appeal raised by Tina, Albert and/or PIML, in particular, the complaint that the Judge dealt with issues outside the scope of the Preliminary Issues and erred in reversing the burden of proof, before we turn to PIML’s pleading objections and finally the litany of complaints raised by Tina and Albert concerning the Judge’s findings of fact. THE COMPLAINT THAT THE JUDGE MADE FINDINGS ON MATTERS OUTSIDE THE SCOPE OF THE PRELIMINARY ISSUES 46.Tina, Albert and PIML all complain that the Judge erred in making findings in relation to the validity or veracity of the 2019 Security Arrangement which were outside the scope of the Preliminary Issues. This complaint encapsulates:
47.It is not in dispute that the Preliminary Issues did not include the question of the validity or veracity of the 2019 Security Arrangement. That arrangement was in fact raised by Albert and Tina to explain or justify their conduct in signing the 1st Transfers Documents and the 1st Appointment Resolutions[6], in answer to the allegations of breach of fiduciary duties on the part of Tina/Albert under Issues 2 and 7. 48.In response to Tina, Albert and PIML’s complaint, Mr Rimsky Yuen, SC (for the Plaintiffs) argues that the Judge did not go beyond the scope of the Preliminary Issues in the Judgment. Mr Yuen argues, alternatively, that even if the Judge did go beyond the scope of the Preliminary Issues, those parts of the Judgment which travelled outside the Preliminary Issues concerned only the question of whether Tina and Albert acted in breach of fiduciary duties, but not the question of backdating, which was a standalone issue. Hence, the Judge’s determination of Issues 1, 4 and 6 should stand in any event. Mr Yuen argues in the further alternative that even if the Judge did go beyond the scope of the Preliminary Issues when considering both the question of backdating and the question of breach of fiduciary duties, those affected parts in the Judgment may be ignored, but her conclusions on the Preliminary Issues would be the same in light of her findings on other matters. 49.We do not accept the complaint that the Judge erred in making findings on matters outside the scope of the Preliminary Issues. The Judge was well aware that “…the veracity or validity of the 2019 Guarantee and the 2019 Security Agreement do not fall within the preliminary issues…”[7]. In the Judgment, she referred to the 2019 Security Arrangement in two contexts. 50.First, the Judge referred to the 2019 Security Arrangement at §§81(1), 83(1), (2) & (3), 84(3), and 85 of the Judgment in the context of her assessment of the credibility or reliability of Tina and Albert’s evidence. In those parts of the Judgment, the Judge did not make any positive finding on the veracity or validity of the 2019 Security Arrangement. What the Judge did was to consider the credibility of Tina and Albert’s evidence, in particular their evidence that they executed the 1st Transfers Documents and the 1st Appointment Resolutions in late August 2022 (Tina) or in the week of 5 September 2022 (Albert), in light of their assertions that they signed those documents in furtherance of Kam/GMHL’s decision to enforce the 2019 Security Arrangement. 51.Second, the Judge discussed the 2019 Security Arrangement at §§119-127 and 140 of the Judgment in the context of her consideration of the allegation of breach of fiduciary duties on the part of Tina/Albert under Issues 2 and 7. In those parts of the Judgment, the Judge considered Tina and Albert’s reliance on the 2019 Security Arrangement, in the course of which she did make some adverse comments on the veracity or validity of the 2019 Security Arrangement. 52.At the trial, Tina, Albert and PIML’s counsel all objected to the Judge making any findings on the validity or veracity of the 2019 Security Agreement on the ground that it was outside the scope of the Preliminary Issues. Those objections were rejected by the Judge. She saw no reason why the court could not make any findings on the validity or veracity of the 2019 Security Agreement insofar as they were relevant to (i) the credibility of Albert and Tina’s evidence and the issue as to when they actually signed the 1st Transfer Documents and the 1st Appointment Resolutions, and (ii) the question of whether Tina and Albert acted in breach of fiduciary duties[8]. 53.We agree with the Judge on this matter. The Preliminary Issues were issues which the parties had agreed were to be determined at the trial. If, in the course of determining the Preliminary Issues, some other issues arose and the resolution of those other issues would have a bearing or impact on the answers to the Preliminary Issues, it seems to us that, as a matter of principle, the court ought to have regard to those issues and make such findings on them as may be necessary in order to reach the correct answers to the Preliminary Issues. To hold otherwise would mean that the Judge might be required to reach a conclusion contrary to the true state of the evidence. 54.We shall now deal with the specific points raised by Tina, Albert and/or PIML in support of the complaint that the Judge made findings on matters outside the scope for the Preliminary Issues. 55.On behalf of Tina, Mr Ronny Tong, SC submitted that the Other Findings “either involved individuals and businesses which are not parties to this action, such as Yuan, Kam, Sanpower, Ying Peng Partnership, GCBC, GMSC and GMHL, who could testify on the existence and validity of the 2019 Security Arrangement and 2019 Guarantee, the parties’ respective concerns, justification, purposes and other connected considerations or were not based on any evidence before the court”[9]. In our view, the fact that the Other Findings involved individuals or businesses which were not parties before the court did not make it improper or inappropriate for the Judge to make those findings. As correctly submitted by Mr Yuen, the Judgment is not binding on non-parties including those mentioned above, there being no suggestion that Tina, Albert or PIML could or should be regarded as their “privies” for the purpose of the application of the doctrines of res judicata or issue estoppel. It is also incorrect to suggest that the Judge made the Other Findings not based on evidence before the court. The Judge’s findings were based on such evidence as was properly adduced by the parties before her (ie the Plaintiffs, Tina, Albert and PIML). 56.The same comment applies to the next point raised by Mr Tong, namely, that the Judge had “overlooked the undisputed fact that Kam and Yuan are the individuals who, at the material times, had control respectively of the two camps. The Court should be presented with full evidence regarding the running of the companies controlled and dominated by these two individuals”[10]. 57.In Tina Ground 4, she complains that the Judge erred in proceeding on the basis that it was “not the Plaintiffs’ pleaded case that the 2019 Security Arrangement did not exist or that it was invalid”, so as to find it was open to the court to make the Other Findings. This complaint is also made by Albert in his Supplemental Notice of Appeal, at §3. 58.At §127 of the Judgment, the Judge stated as follows:
59.The above underlined statement of the Judge would seem, on the face of it, to be inconsistent with §8.4(f)(v) of the Plaintiffs’ Reply to Defence of the 1st Defendant (ie Tina), and §8.7(f)(v) of the Plaintiffs’ Reply to Defence of the 5th Defendant (ie Albert) in HCA 1407/2022, where it was expressly pleaded that “… the alleged 2019 Security Arrangement(s) was/were invalid, unlawful, void and/liable to be set aside”. 60.As we see it, at §127(3) of the Judgment, the Judge was explaining why she considered that there was no inconsistency between the Plaintiffs’ complaint that Tina and Albert acted in breach of their fiduciary duties in executing the 1st Transfers Documents and the 1st Appointment Resolutions, and the Plaintiffs’ stated position that they would not be inviting the court to resolve the competing factual allegations between Blue Ocean BVI and Tina/Albert in respect of the 2019 Security Arrangement. It was in that context that the Judge said it was “not the Plaintiffs’ pleaded case that the 2019 Security Arrangement did not exist or that it was invalid”. On one reading of the Judgment, when the Judge said that it was not “the Plaintiffs’ pleaded case …”, she was focusing on the Plaintiffs’ case as pleaded in the Statement of Claim, which did not involve any allegation concerning the veracity or validity of the 2019 Security Arrangement. The 2019 Security Arrangement came into the picture only because it was raised by Tina and Albert to counter the allegation of breach of fiduciary duties on their part. 61.This having been said, on a literal reading of §127(3) of the Judgment, the Judge was incorrect to say that it was “not the Plaintiffs’ pleaded case that the 2019 Security Arrangement did not exist or that it was invalid”. For the purpose of the present appeals, we are prepared to read §127(3) of the Judgment in favour of Tina and Albert, and proceed on the basis that the Judge had overlooked the aforesaid pleas in the Plaintiffs’ Replies and was mistaken in her statement that it was not the Plaintiffs’ pleaded case that the 2019 Security Arrangement did not exist or that it was invalid. However, notwithstanding such mistake, we consider that the Judge was correct to adopt the approach that the veracity and validity of the 2019 Security Arrangement was a matter which she was entitled to take into account when assessing the credibility of Tina and Albert, and when considering whether Albert and Tina acted in breach of fiduciary duties in executing the 1st Transfers Documents and the 1st Appointment Resolutions. In other words, the mistake made by the Judge is not material. 62.On behalf of Albert, Mr Anson Wong, SC argues that the Judge erred in making findings on the veracity and validity of the 2019 Security Arrangement because the Plaintiffs had confirmed, at §21 of Chow’s 6th Affidavit, that they “do not intend to invite this Honourable Court to resolve those factual disputes or call Xu in these proceedings”, and Chow had also confirmed that it was for this reason that the Plaintiffs would not call Xu to testify at the trial. Mr Wong further contends that the Plaintiffs’ unequivocal confirmation of their position gave rise to an election or estoppel, and the Plaintiffs should not be permitted to approbate and reprobate and ask the Judge to resolve the disputes on the 2019 Security Arrangement[11]. A similar complaint is made by Ms Lilian Ip on behalf of PIML[12]. 63.At §21 of Chow’s 6th Affidavit, she stated the following:
64.In her cross-examination by Mr Wong, Chow confirmed that the PLs did not intend to invite the court to resolve factual issues concerning the 2019 Security Arrangement, and therefore would not call Xu to give evidence at the trial. 65.Issues 2 and 7 of the Preliminary Issues expressly raised the question of whether Tina and Albert had acted in breach of fiduciary duties in executing the 1st Transfers Documents and the 1st Appointment Resolutions. Tina and Albert sought to justify their conduct by relying upon the 2019 Security Arrangement. In our view, it was incumbent on the Judge to examine whether the justification put forward by Tina and Albert had substance. The Judge could not be bound by the stance taken by the Plaintiffs to adopt a blinkered approach. 66.Mr Wong’s suggestion that Albert did not have a full and fair opportunity to (i) adduce full evidence and call witnesses in relation to the 2019 Security Arrangement (for example, calling one Mr Huen Ho Yin, who witnessed the signing of the 2019 Guarantee as a solicitor), and/or (ii) properly challenge or cross-examine Chow on the issues pertaining to the 2019 Security Arrangement, is unfounded. It was up to Tina and Albert to adduce such evidence as they could muster to make good their case. What Chow said cannot sensibly be taken to mean that the Plaintiffs accepted the veracity or validity of the 2019 Security Arrangement such that it was not necessary for Tina or Albert to adduce evidence to prove the same. Neither would it be reasonable for Tina or Albert to think that was the position. It was for Albert and Tina (with advice from their respective legal teams), not the Plaintiffs, still less the court, to decide how best to run their cases. The fact that the PLs decided not to call Xu to give evidence at the trial meant that Albert and Tina did not have to deal with direct evidence coming from Xu, who denied the existence of the 2019 Security Arrangement. To the extent that PIML wished to rely on the 2019 Security Arrangement in any way in support of its case at the trial of preliminary issues, it was likewise for PIML to arrange for relevant evidence to be adduced at the trial. The complaint of estoppel or election against the Plaintiffs has no validity, since it was for the Judge, not the Plaintiffs, to decide what findings to make on the evidence before her and how those findings would impact on her determination of the Preliminary Issues. 67.Mr Wong argues that the Judge ought to have at least assumed that the 2019 Security Arrangement was valid and in existence, or alternatively if she could not isolate the issues relating to the 2019 Security Arrangement from the Preliminary Issues, the Judge should have directed all the issues to be resolved together at the substantive trial of the HK Actions, pursuant to the court’s case management powers under Order 1B, rule 1 of the Rules of the High Court, Cap 4A. We see no reason or basis for the suggestion that the Judge ought to have assumed that the 2019 Security Arrangement was valid and in existence. As for the suggestion that the Judge should have directed all the issues to be resolved together at the substantive trial of the actions, while we accept the Judge would have power to do so notwithstanding the previous order for the trial of preliminary issues, plainly that was something which should be considered only as a matter of last resort bearing in mind the time and costs already spent or incurred. It was, in our view, well within the Judge’s discretion to continue with the trial in the circumstances of this case. THE COMPLAINT ABOUT REVERSAL OF BURDEN OF PROOF 68.In Albert Ground 6, he complains that the Judge erred in law in reversing or misapplying the burden of proof on Issues 1 and 6. A similar complaint is raised in Ground 1(5) in PIML’s Notice of Appeal. Although not raised in Tina’s Supplemental Notice of Appeal, the issue of burden of proof is also mentioned in Mr Tong’s Skeleton Submissions for Tina dated 30 October 2024, at §25. 69.The part of the Judgment in which it is said that the Judge erred in reversing or misapplying the burden of proof is to be found at §§108 and 109 thereof:
70.By way of preliminary observation, it may be noted that the Judge’s discussion on the issue of burden of proof was in the context of dealing with the pleading objection raised on behalf of PIML referred to at §§106-107 of the Judgment. This is a matter which we will deal with below. 71.Apparently, the Judge took the view that while the Plaintiffs bore the burden of proof that the Impugned Documents were backdated, upon her satisfaction that the Plaintiffs had discharged that burden, the evidential burden then shifted to Tina, Albert and PIML to prove their assertions as to when the Impugned Documents were signed and delivered to PIML. 72.Mr Wong argues that the Judge wrongly rejected the submissions that “Ps bore the burden of proving that the Impugned Documents were backdated and disproving the assertions advanced by Tina, Albert and PMIL” at §108 of the Judgment. Mr Wong submits that the burden of proof “remain[ed] unchanged throughout the trial exactly where the pleadings place it, and never shifting”. The Plaintiffs bore the burden of proving the “backdating” allegations against Albert, including disproving the evidence adduced by Albert on when the relevant documents were signed by him. It was for the Plaintiffs to demonstrate that Albert had not already signed and delivered the documents to Kathy Chan by 13 September 2022 (on which Albert gave evidence and put the matter in issue). Such burden never shifted to Albert. 73.PIML argues that the Judge erred in holding that after the Plaintiffs had proved that the Impugned Documents were backdated, the evidential burden shifted to Tina, Albert and PIML to prove their assertions. PIML contends that in respect of the issue of backdating, the burden of proof was fixed by the state of the pleadings, and it remained unchanged throughout the trial and never shifted. 74.Both Albert and PIML rely on Phipson on Evidence, 20th Ed, at §6-06. That passage concerns the “persuasive” (or “legal”), not “evidential”, burden of proof:
75.Insofar as Albert is complaining that the Judge erred in reversing the persuasive burden of proof, such complaint is obviously unsustainable. The Judge never held that Tina, Albert and PIML bore the persuasive burden to prove that the Impugned Documents were signed and delivered to PIML on or before 13 September 2022 as asserted by them. 76.Insofar as evidential burden of proof is concerned, we consider that the Judge’s discussion at §109 of the Judgment over-complicated the matter. The question of whether the Impugned Documents were signed on or before 13 September 2022 (as alleged by Tina, Albert and PIML), or on or after 29 September 2022 but backdated to 12-13 September 2022 (as alleged by the Plaintiffs) was a simple question of fact. There was no dispute, and the Judge plainly accepted, that the Plaintiffs bore the persuasive burden to prove that the Impugned Documents were created on or after 29 September 2022 and backdated to 12-13 September 2022[13]. The Judge was satisfied that the Plaintiffs had discharged such burden for the detailed reasons given at Section D1 of the Judgment. Although the Judge considered, mistakenly in our view, that there was an evidential burden on Tina, Albert and PIML to prove their assertions as to when the Impugned Documents were signed and delivered, this mistake has no material impact on the outcome of the case, because the Judge rejected the evidence given by or on behalf of Tina, Albert and PIML as untruthful, inconsistent, unreliable or incredible. In other words, the Judge found that the Impugned Documents were backdated not because she considered that Tina, Albert and PIML had failed to discharge any burden of proof. Instead, she found positively, on the evidence before her, that the Impugned Documents were backdated as alleged by the Plaintiffs. Albert and Tina’s complaint about reversal of burden of proof is a red-herring. PIML’S PLEADING OBJECTION 77.Under PIML Ground 1, PIML argues that the Judge erred in law in rejecting the objection that the Plaintiffs’ pleadings on backdating were devoid of particulars. In her skeleton submissions, Ms Ip argues, in support of this ground of appeal, that the Judge’s finding that PIML dishonestly backdated the Impugned Documents was unfair to PIML, for the following reasons:
For the above reasons, PIML invites the Court to set aside the Judge’s determinations of Issues 1, 4 and 6. 78.Central to PIML Ground 1 is the complaint that the Plaintiffs’ plea on backdating is devoid of particulars. It is argued that the Plaintiffs’ failure to properly particularise the plea is contrary to the principle that where a party alleges fraud or makes serious allegations against other parties, the allegations must be pleaded with sufficient particularity, and it is not open to the court to infer fraud or dishonesty from facts which have not been pleaded[14]. 79.This argument has no merit. It can be seen from the Amended Statement of Claim that the Plaintiffs have advanced different causes of actions against the Defendants, including invalidity of the Impugned Documents on the grounds of want of authority, conspiracy to injure, breach of fiduciary duties, knowing receipt and knowing assistance. Many of these causes of action are not directed against PIML. Out of the allegations raised by the Plaintiffs in the Amended Statement of Claim, the Judge identified 7 distinct issues which she ordered were to be tried as preliminary issues. Of those 7 issues, the ones which are relevant for the purpose of the present discussion are Issues 1, 4 and 6, ie the backdating issue. Each of them raises a simple question of fact, namely, whether the 1st and 2nd Transfers Documents/Allotments/1st and 2nd Appointment Resolutions were created on a date or dates on or after 29 September 2022 and were backdated. 80.The backdating of a document may (but does not necessarily) give rise to a cause or causes of action. As pointed out by the Judge at §106(2) of the Judgment, the backdating of the Impugned Documents in this case gave rise to or supported the Plaintiffs’ claim that the relevant documents were invalid for want of authority as well as the claim of conspiracy against Tina, Albert, CISIL and MS[15]. However, the issues which were tried as preliminary issues were whether the relevant documents were backdated, not whether the causes of action which might be supported by the backdating were made out. The issues as framed did not involve any allegation of fraud or dishonesty. The principle that fraud must be clearly and distinctly pleaded has simply no application in the present case. In passing, it may be noted that in Issue 1, but not Issues 4 and 6, the additional words “… and, therefore, invalid for want of authority” appear at the end. However, the Judge’s finding on the invalidity of the Impugned Documents for want of authority was a conclusion which followed directly from her finding that those documents were created on or after 29 September 2022 and were backdated. No further finding was required to be made by the Judge to reach the finding that the Impugned Documents were void for want of authority[16]. 81.At §1(2)(i) of its Notice of Appeal, PIML complains that the Judge erred in finding that the cause of action of want of authority was not the subject of the preliminary issues when it was precisely the subject of Issue 1[17]. 82.At §106(2) of the Judgment, where the Judge dealt with PIML’s pleading objection, the Judge stated the following:
83.The Judge was well aware that the question of “want of authority” was within the scope of Issue 1[18], and made specific findings that the Impugned Documents were void for want of authority[19]. We accept Mr Yuen’s submission that this slip in the Judgment is not material because, in the context of the discussion concerning PIML’s pleading objection, what was material was whether Issues 1, 4 and 6 involved any allegation of fraud or dishonesty against Tina, Albert and/or PIML. As earlier mentioned, we are of the view that the issues as framed did not involve any such allegation. 84.We shall now briefly deal with the points raised by PIML mentioned at §77 above:
APPEALS AGAINST FINDINGS OF FACT 85.The proper approach for considering appeals against findings of fact made by a trial judge is well settled, and will not be repeated here. (i) Tina Ground 1 86.Under this ground of appeal, Tina argues that the Judge’s assessment of her credibility and consequently the Judge’s finding as to the dates on which she signed the 1st Transfers Documents and the 1st Appointment Resolutions[22] (which Tina referred to in her Affirmation filed on 29 May 2023 as 完成文件 (“Completion Documents”)) is plainly wrong, in that:
87.In his opening speech on behalf of Tina, Mr Tong said that there was essentially only one point in Tina’s appeal, namely, whether the Judge properly used her advantage as the judge presiding over the trial to assess the evidence before her. Mr Tong submitted that the Plaintiffs made a very serious allegation against Tina, and the Judge, in her assessment of Tina’s evidence, overlooked an important consideration, namely, the lack of motive on the part of Tina to backdate the Completion Documents. Mr Tong referred to and relied upon the following passage in the judgment of Robert Goff LJ in The Ocean Frost [1985] 1 Lloyd’s Rep 1 at 57 (quoted by DHCJ Eugene Fung, SC in Hui Cheung Fai, at §81):
88.In his Skeleton Submissions for Tina, Mr Tong further submits that there was plainly no motive for Tina, a well-educated, qualified accountant and sophisticated businesswoman to risk committing forgery when:
89.In response to the argument that the Judge failed to consider the issue of motive when assessing Tina’s credibility, Mr Yuen submits that this point was not made at the trial below, whether via affirmation evidence or by way of opening/closing submissions; nor was the alleged lack of motive put to the Plaintiffs’ witness (Chow) during cross-examination, and thus, Tina should not be allowed to raise it on appeal. In any event, the motive point is hopeless because:
90.Mr Yuen further submits that the 2019 Security Arrangement does not assist Tina’s case, because Tina and Albert had been removed as directors of CSC Holdings and South BVI on 24 September 2022 after the appointment of PLs on 22 September 2022, and thus it would be necessary to backdate the Impugned Documents so as to make it looked like that they were created before the PLs were appointed. 91.Although we do not consider that Tina should necessarily be debarred from raising the motive point on appeal because it was not taken below, we agree with Mr Yuen that the point has no merit. On the evidence before the court, Tina plainly had a very close personal and business relationship with Kam (see §12 above). Kam and Yuan (and their respective companies) were involved in a dispute over the ownership and/or control of the Group, and the HK Subsidiaries were integral parts of the Group. The suggestion that Tina had no motive to assist Kam to take control of the HK Subsidiaries is unrealistic. 92.In any event, the absence of positive evidence on Tina’s motive is not a matter of great significance in the present case. There were ample materials which justified the Judge’s view that Tina was not a credible witness, as well as the conclusion that the Impugned Documents were executed on or after 29 September 2022 and backdated to 12 or 13 September 2022. At §§78-82 of the Judgment, the Judge explained why she considered Tina’s evidence was unreliable, and at §§87-105, she set out the matters which she relied upon as well as her reasoning for the conclusion that the Impugned Documents had been backdated, including (i) Section D1.1 – “Objective facts”, (ii) Section D1.2 – “No contemporaneous documents in support of defendants’ case”, (iii) Section D1.3 – “MS, CISIL and Notake did not contest Plaintiffs’ claims”, and (iv) Section D1.4 – “Internal inconsistencies in Tina, Albert’s and Lo/Chen’s evidence”. While it is true that the Judge did not expressly refer to the issue of motive in the Judgment, it is by no means clear that she had overlooked the point, having expressly referred to the proper approach for fact finding and assessment of the credibility of a witness that was discussed at §§77-83 of Hui Cheung Fai (which included the very passage about the relevance of motive in the judgment of Robert Goff LJ in The Ocean Frost now relied upon by Tina). The Judge cannot be criticized for not having expressly dealt with the issue of Tina’s motive in the Judgment, since this was not a point taken on behalf of Tina at the trial below, probably because of the obvious unattractiveness of the point. In any event, even if one assumes that the Judge had overlooked the point, we are satisfied that, had she expressly considered it in the Judgment, she would have reached the same conclusion having regard to the evidence and materials before her referred to at §§78-82 and §§87-105 of the Judgment. 93.We also accept Mr Yuen’s submission that the 2019 Security Arrangement does not assist Tina’s case. The simple fact of the matter is that it must have been obvious to Tina, being a qualified accountant with substantial business experience, that consequent upon the appointment of the PLs over GCBC by the Cayman Court on 22 September 2022, all the assets and affairs of GCBC, including all its direct and indirect subsidiaries, would come be the control of the PLs. Even if the 2019 Security Arrangement existed and was valid (disputed by Yuan), the HK Subsidiaries would still come under the control of the PLs unless and until their appointment was discharged. Such difficulty could, however, be bypassed if it could be shown that prior to the appointment of the PLs, the HK Subsidiaries had already ceased to be part of the Group. Thus, the existence and validity of the alleged 2019 Security Arrangement would not mean that Tina (or Kam’s camp) had no motive to backdate the Impugned Documents. 94.At §20 of the Skeleton Submissions for Tina, Mr Tong complains that the Judge made a point of there being no “contemporaneous documents in support of the defendants’ case” at §99 of the Judgment, but ignored the contemporaneous documents relating to the existence of the 2019 Security Arrangement itemized at §20(1) to (10) of the Skeleton Submissions. This complaint is off focus because the Judge’s comment at §99 of the Judgment was directed at the absence of contemporaneous documents which supported Tina and Albert’s assertions they signed the 1st Transfers Documents and the 1st Appointment Resolutions in late August 2022 (Tina) or the week of 5 September 2022 (Albert), and PIML’s allegations that those documents were provided to it on 13 September 2022 and the Allotment Resolutions, the 2nd Transfers Documents and the 2nd Appointment Resolutions were created and signed on 13 September 2022. 95.Mr Tong’s further complaint at §21 of the Skeleton Submissions for Tina that the failure of PIML to produce documents relating to the preparation of the Impugned Documents is not evidence of dishonestly on the part of Tina is beside the point. The Judge did not find that Tina was dishonest because of PIML’s failure to produce relevant documents relating to the preparation of the Impugned Documents. 96.At §22 of the Skeleton Submissions for Tina, Mr Tong submits that when the Completion Documents were passed to PIML for handling, they must have already been signed by Tina. The change or alteration of the date chopped on the I/T for the 1st Transfer in respect of East HK from “29 SEP 2022” to “12-9-2022” contained no initials of Tina, showing that she was not aware of, or could not have been privy to, the dating or any alteration of the date thereon. Mr Tong argues that the Judge failed to see the vital distinction between when the Completion Documents were signed and when they were dated and how. As the preparation of the Completion Documents and their filing were handled by PIML, Tina should not be blamed for any mistake or alleged anomalies associated with the handling of the documents. We do not accept this argument of Mr Tong. It is premised on the assumption that at the time when Tina signed the I/T for the 1st Transfer in respect of East HK, it was undated. However, this assumption is not supported by Tina’s evidence. On the contrary, Tina said, at §36 of her Affirmation filed on 29 May 2023, that some of the “Completion Documents” (ie the 1st Transfers Documents and the 1st Appointment Resolutions), without specifying which of them, “were already post-dated as 12 or 13 September 2022 when they were delivered to me, notwithstanding that such documents came to me for execution, whilst still in August 2022…”. The crossing out of the date chop of “29 SEP 2022” on the I/T for the 1st Transfer in respect of East HK and the replacement thereof by the handwritten words “12-9-2022” was one of the “objective facts” which the Judge took into account in coming to the view that “all the steps taken by PIML to implement the Impugned Documents only took place on or after 29 September 2022”[23]. We consider that it was open to the Judge, on the evidence before her, to come to this view. 97.At §25 of the Skeleton Submissions for Tina, Mr Tong argues, in the context of his submission about “burden of proof”, that the Plaintiffs produced no evidence as to when the Impugned Documents were signed, and that disbelieving all of the Defendants’ witnesses would not establish the Plaintiffs’ case. As pointed out by Mr Yuen, this argument is outside the scope of Tina’s Supplemental Notice of Appeal. In any event, it has no merit. The Judge took into account all the evidence and materials before her to come to the conclusion that the Impugned Documents were backdated (see Section D of the Judgment). It matters little that the materials which the Judge relied upon to come to that conclusion were originally produced or created by the Plaintiffs or the Defendants. 98.In his Skeleton Submissions for Tina, Mr Tong has raised a few other complaints concerning the Judge’s findings of fact in the Judgment, including the Judge’s seriously flawed criticisms of Tina’s evidence in various specific aspects[24], and the Judge’s improper or incorrect drawing of adverse inference from the absence of other parties[25]. We do not consider that Tina is entitled to rely on these complaints because, as pointed out by Mr Yuen, they are outside the scope of Tina’s Notice of Appeal[26]. In any event, they have been adequately answered by Mr Yuen[27]. (ii) Albert Ground 7 99.Under this ground of appeal, Albert argues that the Judge erred in finding that he had committed the serious misconduct of backdating the relevant documents (which Albert referred to in his 2nd Affirmation of 19 May 2023 as the “Enforcement Documents”) based solely on inferences, which were reached on conjecture and without any proper foundation. In particular, Albert argues that:
100.In respect of §§99(1) to (3) above, Mr Wong submits that while Albert gave direct evidence that he signed the Enforcement Documents in the week of 5 September 2022, the Plaintiffs adduced no direct evidence to disprove his evidence. The Judge’s observations and findings on the evidence given by PIML on the handling of the Impugned Documents (at §§89-98 and 104 of the Judgment) are incapable of “disproving” Albert’s evidence as to when he signed the relevant documents, because Albert was not involved in the passing of those documents to PIML or the subsequent handling of those documents; and the Plaintiffs adduced no evidence and put forward no case of any conspiracy or collusion between Albert and PIML. As for the Judge’s observation that there was no contemporaneous document in support of the defence case, the Judge erred in reversing the burden of proof. She also erred in failing to take into account contemporaneous documents relating to the 2019 Security Arrangement, which were not disputed for the purposes of the trial of preliminary issues and which should be assumed in favour of the defence. Such contemporaneous documents supported Albert’s evidence that he simply gave effect to what he believed to be the prior legal commitments of the relevant companies when he signed on the Enforcement Documents, and they also militate against any “backdating” allegation. As for the Judge’s reliance on the fact that MS, CISIL and Notake did not contest these proceedings, this simply does not support any inference that Albert did not sign on the Enforcement Documents in the week of 5 September 2022. Not only did the Judge err in surmising the reasons for these parties not appearing in these proceedings, she further erred in drawing inferences against Albert on the basis of such surmise. 101.None of these arguments has merit. They are merely attempts to re-argue Albert’s factual case, but do not show that the Judge made any palpable errors in her findings of fact, or that those findings are plainly wrong:
102.In respect of §99(4) above, Mr Wong argues that:
103.In answer to these arguments, Mr Yuen submits as follows:
104.We do not accept Mr Wong’s submissions. At §83 of the Judgment, the Judge set out the criticisms made by Ms Sit of various aspects of Albert’s evidence which she submitted were clearly incredible. One of the criticisms made by Ms Sit related to the apparent inconsistency between Albert’s evidence that he signed the Enforcement Documents in the week of 5 September 2022 and the position that he adopted in Albert Sixth. The Judge said this at §83(3) of the Judgment:
105.In respect of the first reason given by Mr Wong for contending that the Judge’s view that there was inconsistency between Albert’s evidence and his position in Albert Sixth is plainly wrong, it would appear that at the trial, Mr Wong never took the point that Albert Sixth could be affirmed before Albert signed the Enforcement Documents because “the week of 5 September 2022” in fact extended up to 11 September 2022 (Sunday)[38]. The Judge cannot be criticised for not dealing with this point in the Judgment when it was not raised by Mr Wong at the trial. In any event, as submitted by Mr Yuen, Albert ought to have filed a supplemental affirmation to update the Cayman Court of the position if there was indeed a material change of circumstances (ie the transfer of the HK Subsidiaries, which took place subsequent to the making of Albert Sixth). When this point was put to Albert in cross-examination, he did not disagree with it. Neither did Mr Wong in his written closing submissions to the Judge. As for the second reason relied upon by Mr Wong, while Albert did not give a precise date for the signing of the Enforcement Documents in his 2nd Affirmation, he was clear in his oral evidence that he signed those documents in the week of 5 September 2022[39]. In his closing, Mr Wong submitted to the Judge that “Albert’s clear evidence is that he had signed the Enforcement Documents during the week of 5.9.2022”[40]. In our view, Mr Wong’s second reason adds nothing of substance to his first reason. 106.We agree with the Judge that there was no unfairness to Albert merely because Albert Sixth was not shown to him to refresh his memory. We have read the transcript of Albert’s cross-examination. There was no indication that he needed to refresh his memory of what he had said in Albert Sixth in order to answer questions put to him by Ms Sit. Mr Wong also did not suggest to the Judge that Albert ought to be given a copy of Albert Sixth to refresh his memory. 107.As for the relevance of the transfer of the HK Subsidiaries to the contents of Albert Sixth in the Cayman Proceeding, Mr Wong has no effective answer to Mr Yuen’s submission referred to at §103(3) above. The Judge was aware of Albert’s assertion that he considered the transfer of the HK Subsidiaries to be not relevant to the contents of Albert Sixth[41], but plainly did not accept such assertion. 108.Finally, the apparent inconsistency between Albert’s evidence and Albert Sixth referred in §83(3) of the Judgment was just one of the matters which the Judge took into account in her assessment of Albert’s credibility. Even if one disregards that inconsistency, there were other mattes which amply justified the Judge’s view that Albert was not a truthful witness. 109.In respect of §99(5) above, Mr Wong argues that it is plainly wrong for the Judge to reject Albert’s explanation given in his cross-examination as to why the 2019 Guarantee was not approved by GCBC’s board (namely, he had been told by Xu that he (Xu) would inform other GCBC directors and obtain their approval of the same) because at §35 of Albert’s 2nd Affirmation, he merely said that “Xu had assured me that he had already consulted legal advisors, who confirmed that there was no requirement to make any disclosures with respect of the 2019 Security Arrangement”[42], for 3 reasons. First, the Plaintiffs had confirmed that they did not intend to ask the Court to resolve disputes concerning the 2019 Security Arrangement, and for this reason chose not to call Xu as a witness. It was thus wrong for the Judge to rely on such matters to discredit Albert’s evidence. Second, contrary to the Judge’s view, Albert’s oral evidence that “he was told by Xu that [Xu] would inform other GCBC directors and obtain their approval ”is not inconsistent with what he said at §35 of his 2nd Affirmation. In this regard, one must bear in mind that the 2nd Affirmation of Albert was not meant to be full narratives of the 2019 Security Arrangement, but was made for the purposes of the trial of preliminary issues only. Third, the alleged inconsistency is in any event incapable of supporting any inference that Albert was guilty of “backdating” the documents in question. 110.Mr Yuen submits that this criticism of the Judge’s assessment of Albert’s credibility is unjustified, because the Judge was entitled to reject Albert’s explanation as to why the 2019 Guarantee was not approved by board of GCBC on the basis that this explanation was only given by him for the first time in cross-examination. 111.We do not consider Mr Wong’s argument to have merit. At §83(1) of the Judgment, the Judge set out another aspect of Albert’s evidence which Ms Sit submitted was clearly incredible:
112.At §85 of the Judgment, the Judge pointed out that Mr Wong did not advance any submissions to contradict the criticisms made by Ms Sit. Instead, the main plank of Mr Wong’s argument was that the court should not make any findings on the veracity or validity of the 2019 Security Arrangement. We have already rejected this argument above. Further, regardless of whether Albert’s aforesaid explanation was strictly inconsistent with what he said at §35 of his 2nd Affirmation, it is a fact that the explanation came out for the first time in his cross-examination. The Judge was entitled to take the view that since Albert was seeking, at §35 of his 2nd Affirmation, to justify the non-disclosure of the 2019 Security Arrangement by reference to some advice or confirmation allegedly given by Xu, there was no reason why Albert would omit to mention Xu’s assurance that he would obtain GCBC’s board approval of the 2019 Guarantee (if Albert’s evidence was true). In our view, the Judge was entitled to take this matter into account, not necessarily as supporting an inference that Albert was guilty of “backdating” the documents in question, but certainly for the purpose of assessing his credibility (which was what the Judge did at §§83-86 of the Judgment). 113.In respect of §99(6) above, Mr Wong refers to §103(3) of the Judgment –
and argues that it is plainly wrong for the Judge to refer to GCBC’s defence of the application for appointment of provisional liquidators up to 22 September 2022, in finding that “the need for more aggressive measures on Tina/Albert’s part only materialized after the PLs had been appointed”. Not only did Albert disagree with this suggestion during cross-examination, it was not supported even by the Plaintiffs’ own evidence. It was Chow’s evidence that after the Cayman Court on 15 September 2022 had directed, inter alia, that it was willing to hear the application for the appointment of provisional liquidators on an ex parte basis on 22 September 2022, Carey Olsen (GCBC’s then lawyers) on 16 September 2022 by letter informed Bedell Cristin (Blue Ocean BVI’s then lawyers), and by email informed the Cayman Court, that (i) they were instructed by GCBC not to attend the hearing on 22 September 2022 “in order to save costs”, and (ii) Carey Olsen merely requested Bedell Cristin to present their submissions made in the letter to the Cayman Court[43]. Thus, even on the Plaintiffs’ own evidence, GCBC had on no later than 16 September 2022 ceased instructing Carey Olsen to attend the hearing for the appointment of provisional liquidators in order to save costs. 114.Mr Yuen submits that this argument of Albert is unsustainable. It is Albert’s own evidence during cross-examination that GCBC defended the application for the appointment of provisional liquidators up to 22 September 2022[44]. In any event, the thrust of the point – which remains valid regardless of whether GCBC ceased defending the application on 16 or 22 September 2022 – is that there was a need for more aggressive measures by Albert and Tina after the appointment of the PLs on 22 September 2022 (viz creating the Impugned Documents and backdating them to 12 or 13 September 2022), therefore it is unmeritorious for Tina to rely on the removal of GCBC’s name plaque from the BOC Address (ie GCBC’s principal place of business at 48/F, Bank of China Tower) on 13 September 2022 to support her case of no backdating[45]. We consider Mr Yuen’s submissions to be well-founded. 115.In all, Tina and Albert’s challenges to the findings of fact made by the Judge are all rejected. CONCLUSION AND DISPOSITION 116.For the above reasons, none of the grounds of appeal raised by Tina, Albert and PIML has merit. Their appeals are dismissed. We also make an order nisi that the Plaintiffs shall have the costs of the appeals, to be taxed if not agreed. The above costs order shall become absolute unless an application is made to vary the same within 14 days from the date of handing down of this judgment.
Mr Rimsky Yuen SC leading Mr Jonathan Ng, instructed by Tanner De Witt, for the Plaintiffs in all cases Mr Ronny Tong SC leading Mr Lawrence Cheung, instructed by Jones Day, for the 1st Defendant in CACV 81, 82, 84-86, 88, 90, 91 & 93/2024 and the 5th Defendant in CACV 83, 87 & 92/2024 The 2nd Defendant in all cases was not represented and did not appear Ms Lilian Ip, instructed by Wai & Co, Solicitors, for the 3rd Defendant in CACV 81-84/2024 K.L. Chan & Co., for the 3rd Defendant in CACV 85-88 & 90-93/2024 did not appear Mr Anson Wong SC leading Mr Martin Kok, instructed by Lee & Yik Lawyers, for the 5th Defendant in CACV 81, 82, 84-86, 88, 90, 91 & 93/2024 and the 1st Defendant in CACV 83, 87 & 92/2024 The 6th Defendant in all cases was not represented and did not appear The 7th Defendant in all cases was not represented and did not appear [1] GCBC was delisted on 22 June 2023. [2] See §22 below. [3] As noted by the Judge at footnote 70 of the Judgment, this issue is not relevant to Albert in HCA 1409/2022. [4] See §76 of the Judgment. [5] The first reference to “South HK” at §86 of the Judgment should read “North HK”, because Albert signed the resolutions approving the 1st Transfers and the 1st Appointment Resolutions in relation to “North HK”, but not South HK. [6] See §119 of the Judgment. [7] See §85 of the Judgment. [8] See §§85 and 127 of the Judgment. [9] See §27 of the Skeleton Submissions for Tina dated 30 October 2024. [10] See §28 of the Skeleton Submissions for Tina dated 30 October 2024. [11] See §§21-22 of Skeleton Submissions for Albert dated 31 October 2024. [12] See §23 of PIML’s Skeleton Submissions dated 31 October 2024. [13] See §§87-88 and 109 and of the Judgment. [14] See §1(1) of PIML’s Notice of Appeal. [15] See §17G of the Amended Statement of Claim. [16] See §§111 and 112 of the Judgment. [17] See §106(2) of the Judgment. [18] See §§56(1) and 143(1) of the Judgment. [19] See §§111 and 112 of the Judgment. [20] See §§68-72 of the Judgment. [21] See §§73-75 of the Judgment. [22] At §§102-103, 105, 109-110 of the Judgment. [23] See §89 of the Judgment. [24] See §19 of Skeleton Submissions for Tina. [25] See §§23-24 of Skeleton Submissions for Tina. [26] See Skeleton Submissions of the Plaintiffs dated 18 November 2024, footnotes 37 and 41. [27] See §§23 & 25-26 of Skeleton Submissions of the Plaintiffs. [28] In the transcript of the trial, it was mentioned that Albert Sixth was filed on 8 September 2022. None of the parties has suggested that it would make any difference to the outcome of this appeal whether Albert Sixth was made on 8 or 9 September 2022. [29] See §83(1) of the Judgment. [30] See §103(3) of the Judgment. [31] See §90 of the Judgment. [32] The reference to the time when “the Cellenkos Transaction” was entered into is probably a mistake, and the reference should be to the time when Albert Sixth was made. However, this slip does not affect the Judge’s reasoning on this matter. [33] See §§83(3) and 103(2) of the Judgment. [34] See §§41 and 50 of the 2nd Affirmation of Albert made on 19 May 2023. [35] Transcript Bundle, p 61 (internal page 67M-67Q). [36] See §83(3) of the Judgment. [37] Transcript Bundle, pp 59-62 (internal pages 65K-68C). [38] See §14(4) of the Closing Submissions for Albert dated 21 September 2023. [39] See Transcript Bundle, p 58 (internal p 64 lines G-H), p 61 (internal p 67 lines J-K). [40] See §14(1) of the Closing Submissions for Albert. [41] See §103(3) of, and footnote 100 to, the Judgment. [42] See §83(1) of the Judgment. [43] See, §§32-33 of the 6th Affidavit of Chow filed on 21 July 2023. [44] As recorded by the Judge at §103(3) of the Judgment. [45] See §§14-15 of Tina’s Opening Submissions before the Judge dated 14 September 2023. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Further hearings and rulings under CACV 85/2024