Hou Yuanjie v. Law Lap San Nixon

DCCJ 1110/2023

[2025] HKDC 1684

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1110 OF 2023

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JUDGMENT

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1.In this action, the Plaintiff (“P”) sues the Defendant (“D”) to recover the loan of HK$2,000,000 made pursuant to a loan agreement said to be made partly orally and partly in writing by a written agreement dated 7 May 2019 signed by D as borrower and Ng Chit Chung Eddie (“Ng”) as guarantor (“the Written Agreement”), or alternatively, said to be made orally and evidenced by the Written Agreement.

2.Save several aspects, the factual versions advanced by both parties are quite different and conflicting. P called 3 witnesses – himself, his uncle Hou Zhenkan (“Uncle Hou”) and Ms 謝麗玲 (“Tse”). D himself was the only witness for D’s case.

3.As the adjudication of the claim depends very much on which version is accepted by this Court, I will begin by setting out the principles and approach in assessing evidence and fact finding, trite though they are.

APPROACH IN ASSESSING CREDIBILITY AND RELIABILITY OF EVIDENCE AND FACT FINDING

4.The basic principles and approach are not disputed. They have been helpfully summarized by DHCJ Eugene Fung SC (as he then was) in Hui Cheung Fai & Another v Daiwa Development Ltd & Others HCA 1734/2009, unrep, 8 April 2014 :

“76. In making my findings of fact in this case, I am guided by a number of general principles which judges apply as to fact finding and the assessment of credibility.

77. Generally speaking, contemporaneous written documents and documents which came into existence before the problems in question emerged are of the greatest importance in assessing credibility: Onassis v Vergottis [1968] 2 Lloyd’s Rep 403 at 431 (Lord Pearce). ....

78. In deciding whether to accept a witness’ account, importance should also be attached to the inherent likelihood or unlikelihood of an event having happened, or the apparent logic of events: eg Lam Rogerio Sou Fung v Tan Soon Gin George (unreported, HCA 2576/2005, 5 May 2011) §39 (Chu J).

79. In determining a witness’ credibility, I have also attached importance to the consistency of the witness’ evidence with undisputed or indisputable evidence, and the internal consistency of the witness’ evidence. The latter type of consistency is often tested by a comparison between the witness’ oral testimony and his or her witness statement.

80. I have cautioned myself against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses (Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336 at §§36-37 (Bokhary PJ)), or from the assessment of the witnesses’ character (Esquire (Electronics) Ltd v HSBC [2007] 3 HKLRD 439 at §135 (Stock JA)).”

5.Moreover, it is also well-established that if a witness has told lies on a central issue, that may have a significant adverse impact on the credibility of his or her evidence as a whole (Progetto Jewellery Co Ltd v Lau Chiu Ying [2020] HKCFI 209 at §§28-31; PC Enterprises (HK) Ltd and Another v Chan Wai Ching [2021] HKDC 966 at §41).

THE FACTUAL MATTERS – UNDISPUTED AND DISPUTED

6.It was not seriously disputed that :

(a)  P was a Mainland citizen, 22 years old in 2019, has been a merchant after leaving his studies in the first year of university education, and has been engaging in trading with or in Peru where he occasionally resided;

(b)  Uncle Hou lived in Hong Kong;

(c)  P was desirous of emigrating to Hong Kong under the Quality Migrant Admission Scheme ("QMAS"). For that purpose, he sought the help of Uncle Hou;

(d)  Through his friend Tse, Uncle Hou was introduced to Ng as someone who could assist P in successfully applying under QMAS;

(e)  According to D, not disputed by P, Ng was a successful businessman, a racehorse owner and a member of the Jockey Club, and Ng knew many retired government officials;

(f)  Also according to D, not disputed by P, D has a Master degree obtained from an online university, and in 2019, he was working as the team secretary of a team of insurance agents and was frequently consulted by many wealthy individuals; D “also worked with Ng on assisting him for various projects for administrative tasks”.[1]

7.It is not disputed that Uncle Hou met Ng in late March or early April 2019 in the office of Tse situated in Fo Tan, Shatin (respectively, “Tse’s Office” and “the 1^st Meeting”). P’s case, not accepted by D, is that in that meeting Ng mentioned that he and his business partner were in financial difficulty and needed a loan of HK$3,000,000.

8.P’s version is that several days after the 1^st Meeting, there was another meeting (“the 2^nd Meeting”) at Uncle Hou’s home in North Point between himself, Ng and D in which :

(a)  Ng introduced D as his business partner who could assist P in his QMAS application;

(b)  Ng and D proposed that (a) P would make a loan to D in the amount of HK$2,000,000 repayable in one year and D and Ng would jointly be responsible for the repayment, and (b) P would make another loan to Ng in the amount of HK$1,000,000 and Ng would be solely responsible for its repayment; and

(c)  D confirmed the loan proposal and said that if P agreed to make those 2 loans, Uncle Hou could contact Ng who had authority to represent him.

9.P’s version is that after the 2^nd Meeting :

(a)  Uncle Hou discussed with P about the loan proposal and P agreed to it;

(b)  Uncle Hou then called Ng to confirm P’s agreement to the 2 proposed loans and it was also agreed that the interest rate for the 2 loans would be 0.01% per annum[2] (“the Oral Agreement”);

(c)  Uncle Hou then requested Tse, who was a friend and business associate, to transfer, and Tse did, the following 3 sums totalling RMB 1,526,280 to bank accounts designated by Ng. These 3 transfers (“the 3 Transfers”) are disputed by D :

(i)  RMB 150,000 on 11 April 2019;

(ii)  RMB 50,280 on 12 April 2019; and

(iii)  RMB 1,326,000 on 25 April 2019;

(d)  Having made the 3 Transfers, P became concerned that he should obtain written agreements on the loans from Ng and D. In late April 2019, Uncle Hou informed Ng that P required written agreements for the loans and that Ng should send the signed written agreements to Tse’s Office as Uncle Hou might be travelling in and out of Hong Kong.

10.D hotly disputes P’s version on the 2^nd Meeting. D’s version is that he was not even present in the 2^nd Meeting and that he had not even gotten to know Uncle Hou or P up to this point in time, and that he was only first introduced to Uncle Hou in the Racecourse Lunch (defined below). D thus denies any knowledge or involvement in any of the events and matters above mentioned.

11.It is common ground that on 5 May 2019, Ng and his wife, D and his wife, Uncle Hou and 2 of his friends attended a lunch gathering in Shatin Racecourse hosted by Ng (“the Racecourse Lunch”).

12.P’s version on what happened during the Racecourse Lunch was, in gist, that it was essentially a social gathering, but in which Ng and D boasted about the successes they had in assisting others to apply under QMAS and were effectively selling their such services to the 2 friends of Uncle Hou (and people they knew who might be interested).

13.D’s version about what happened in the Racecourse Lunch, on the other hand, is this, and I quote from §9 of his witness statement[3] :

“9. During the meeting, I hear the following from Ng and [Uncle Hou]’s conversations :

(a) I learned that [Uncle Hou]‘s nephew (the Plaintiff) and two of [Uncle Hou]’s friends were interested in applying for QMAS;

(b) Ng told [Uncle Hou] that in order for the Plaintiff to apply successfully, Ng needs to offer a job position to the Plaintiff for fulfilling the criteria of the QMAS;

(c) In that regard, Ng has to pay salary to the Plaintiff;

(d) Ng informed [Uncle Hou] that he can arrange to pay the salary to the Plaintiff provided that [Uncle Hou] and/or the Plaintiff pays the salary to Ng in advance so that Ng can use that sum to pay the salary to the Plaintiff;

(e) To enable the Plaintiff to apply for QMAS successfully, Ng suggests [Uncle Hou] and/or the Plaintiff to pay Ng a sum of HK$2,100,000.00 so that Ng’s company can pay monthly salary to the Plaintiff by this HK$2,100,000 for total of 7 years of work (KH$2,100,000 for 7 years, ie HK$300,000.00 per annum, ie HK$25,000.00 per month – this is the basic requirement for the QMAS application);

(f) [Uncle Hou] agrees;

(g) I am and was not involved in the arrangement;

(h) Ng at the meeting simply asked me to handle the administrative work for the Plaintiff;

(i) I was not involved in the salary arrangement.”

14.It is also common ground that two days later on 7 May 2019, Ng and D attended Tse’s Office (“the May 7 Occasion”). Tse in her orally evidence accepted that this occasion happened and said she was also present in Tse’s Office at the time but she had left Ng and D in a room to attend their own business. D’s version is that Uncle Hou was also present in Tse’s Office on the May 7 Occasion. P’s version and Uncle Hou’s and Tse’s evidence are that Uncle Hou was not present on the May 7 Occasion.

15.Importantly, D’s case is that on the May 7 Occasion, he was “forced” to sign the Written Agreement in Tse’s Office under the undue influence of Ng. I would return to D’s case of undue influence later.

16.I would also note at this juncture that D said in oral evidence that, undue influence or not, he thought the HK$2,000,000 loan as stipulated in the Written Agreement would not be drawn down or borrowed at the time of the signing of the Written Agreement, but would be so drawn down or borrowed after P has successfully obtained his immigration status under QMAS, which would be some months later.

17.As is shown by the printouts of the WeChat messages exchanged between D and P contained in the trial bundles[4], since the evening on 7 May 2019, P and D began to communicate with each other by WeChat messages and that since then there were frequent messages exchanged between them concerning P’s application under QMAS.

18.P’s case is that 2 days after the Written Agreement was signed by D and Ng, ie 9 May 2019, Uncle Hou requested Tse to, and Tse did, transferred the outstanding balance of HK$3,000,000 net the 3 Transfers, by 2 transfers, namely the transfers of RMB 300,000 and HK$971,483 to bank accounts designated by Ng. These 2 transfers (“the 2 Subsequent Transfers”) are disputed by D.

19.D disputes P’s case that the HK$3,000,000 was in fact transferred to Ng as P said. As have mentioned, his case is that he thought the loans would only be borrowed by Ng after the QMAS application was successful. In any case, D’s case was that the loan was in fact taken out by Ng, he has nothing to do with it and he had not received any money from the loan.

20.It is common ground that after almost a year had lapsed since May 2019, Ng and D’s “service” in assisting P’s application under QMAS remained unsuccessful.

21.It is not seriously disputed that :

(a)  Upon demand by Uncle Hou, Ng issued altogether 13 post-dated bearer’s cheques to Uncle Hou to purportedly repay HK$3,000,000[5] (“the 13 Cheques”). The first 3 cheques respectively dated 15 October 2020, 30 November 2020 and 30 December 2020 were each for the amount of HK$500,000 and the remaining 10, all dated the 15^th day of consecutives month, beginning from January 2021 to October 2021, were each for HK$150,000;

(b)  However, the first cheque dated 15 October 2020 bounced and was marked “payment stopped” upon presentation;

(c)  By 2 WeChat messages respective sent to D on 29 October 2020 and 24 March 2021[6], Uncle Hou demanded the repayment from D of the total loan amount of HK$3,000,000. D did not responded to these 2 messages;

(d)  Ng was adjudged bankrupt on 7 July 2021;

(e)  P issued a solicitors’ letter to D dated 10 February 2023 demanding repayment of the loan of HK$2,000,000, to which D never replied.

22.On 16 March 2023, P issued the writ herein and commenced this action against D.

DISCUSSION

The changes in D’s case regarding his role

23.In his Defence filed on 19 April 2023, D only pleaded barely that he had no knowledge of or involvement in the subject loan but was forced to sign the Written Agreement. It was in his Amended Defence filed on 25 September 2024 that D introduced for the first time the factual circumstances that the subject loan was connected with P’s QMAS application.

24.In relation to D’s involvement in the arrangement concerning giving “assistance” to P for his QMAS application, D pleaded in the Amended Defence :

(a)  That “[he] is just a rubber stamp”[7];

(b)  “Ng asked the Defendant to handle the administrative tasks for him on this project … help in filing out the forms of the QMAS application and to follow up and answer the enquiries of the Immigration Department”[8] ; and

(c)  “The Defendant agrees to work for Ng independently … not employed by Ng” [9].

25.The picture D portraited in the Amended Defence, as a setting to his version, was that his role was minor, was “administrative”, and that the dealings were essentially entirely those between Uncle Hou/P with Ng.

26.In his witness statement, D reiterated the above. But significantly, D added that Ng would pay him “service fees” and “[he] can have 3-5% of the application fees for reward”[10]. In other words, it was all along envisaged and known to D that “application fees” would be paid by Uncle Hou/P, and D was to have a percentage share in it. Also significantly, D never explained in his witness statement or in oral evidence what was the nature of, and how much, the “application fees” were that P was supposed to pay Ng, when it was the HKSAR Government that processed the QMAS application.

27.However, when cross-examined, D said that in fact he was the one much more familiar than Ng with QMAS requirements, procedures and the forms required to be lodged as he “had helped” other people in QMAS applications before. When further pressed and most significantly, D answered that the nature of relationship between Ng and him in the subject dealings was one of “partners” working together.

28.D’s role in the subject dealings evidently is an important setting in assessing which of the parties’ respective versions is to be accepted. I think such shifting in D’s version and his latest divulgence that he and Ng were “partners” working together are telling. I am unimpressed with his such shifting and how he only divulged bit by bit when being pressed and cornered. I see it as indicative that he has been attempting to withhold from the Court the whole truth regarding the dealings with Uncle Hou/P concerning their purported “assistance” to P in his QMAS application.

29.Moreover, because of D’s own evidence that he in fact knew much more than Ng about the requirements, procedures and the forms for the QMAS application, I take the view that it is quite inherently improbable that Ng would meet with Uncle Hou alone in the 2^nd Meeting without bringing along D as the purpose for Ng of the meeting, I find, was quite clear in that he wanted to successfully persuade Uncle Hou to engage his (or his and D’s) service in helping P in the QMAS application.

Did D sign the Written Agreement under undue influence by Ng ?

30.It is convenient for me to deal next with this matter.

31.There is no dispute that the Written Agreement[11] was signed by D and Ng, and it is clearly stated therein that D was the borrower and Ng the guarantor, that the loan amount was HK$2,000,000 and the loan period was from 7 May 2019 to 6 May 2020.

32.In the course of trial, Mr Poon, counsel for D, confirmed that despite there were loose averments in the Amended Defence such as that D “had never read the Alleged Agreements in detail; Nobody has ever explained the terms of the Alleged Agreements to the Defendant” [12] and “Ng then forced the Defendant to sign”[13], the only ground relies on by D for vitiating the Written Agreement is that of undue influence.

33.It is not disputed that the relevant principles regarding undue influence were elucidated by Recorder Ma SC (as the former Chief Justice then was) in Bank of China (Hong Kong) Ltd v Wong King Sing & Others [2002] 1 HKLRD 358 :

“1. I should preface the discussion of this defence with the observation that, as with all aspects of the law, one has to apply a large degree of common sense to the matter. … it is to be borne in mind that the defence of undue influence is ultimately a simple concept. It has all to do with informed consent. Once a court forms the view that consent was freely given with full knowledge of the consequences of entering into the relevant transaction, that is the end of the matter, however improvident the transaction may objectively appear. The rationale for the defence of undue influence is to prevent the victimisation of the complainant. It is there to protect people from being forced, tricked or misled in any way by others into entering into a disadvantageous transaction : see Allcard v. Skinner (1887) 36 Ch D 145, at 182–3; National Westminster Bank Plc v Morgan [1985] AC 686, at 705. As Lord Nicholls of Birkenhead said in Royal Bank of Scotland v Etridge at 1029 paragraph 8, the unacceptable conduct lies in “a relationship between two persons where one has acquired over another a measure of influence, or ascendancy, of which the ascendant person then takes unfair advantage.”

2. The burden is of course on the person seeking to set aside or avoid liability under the relevant transaction. It is not for the other party to prove that the transaction was entered into with full understanding of the nature and consequences of the transaction. …

3. That said, although the legal burden of proof is throughout on the party seeking to set aside, the evidential burden may shift. Here, presumptions may arise depending on the circumstances. I will return to this aspect in due course.

4. It is convenient at this point to identify the different classes of undue influence. Here, the starting point is the classification adopted by the English Court of Appeal in Bank of Credit and Commerce International SA v Aboody [1990] QB 923, summarised by Lord Browne‑Wilkinson in his speech in Barclays Bank Plc v. O’Brien at 189–190 :

“Class 1 : Actual undue influence

In these cases it is necessary for the claimant to prove affirmatively that the wrongdoer exerted undue influence on the complainant to enter into the particular transaction which is impugned.

Class 2: Presumed undue influence

In these cases the complainant only has to show, in the first instance, that there was a relationship of trust and confidence between the complainant and the wrongdoer of such a nature that it is fair to presume that the wrongdoer abused that relationship in procuring the complainant to enter into the impugned transaction. In Class 2 cases therefore there is no need to produce evidence that actual undue influence was exerted in relation to the particular transaction impugned : once a confidential relationship has been proved, the burden then shifts to the wrongdoer to prove that the complainant entered into the impugned transaction freely, for example by showing that the complainant had independent advice. Such a confidential relationship can be established in two ways, viz,

Class 2(A)

Certain relationships (for example solicitor and client, medical advisor and patient) as a matter of law raise the presumption that undue influence has been exercised.

Class 2(B)

Even if there is no relationship falling within Class 2(A), if the complainant proves the de facto existence of a relationship under which the complainant generally reposed trust and confidence in the wrongdoer, the existence of such relationship raises the presumption of undue influence. In a Class 2(B) case therefore, in the absence of evidence disproving undue influence, the complainant will succeed in setting aside the impugned transaction merely by proof that the complainant reposed trust and confidence in the wrongdoer without having to prove that the wrongdoer exerted actual undue influence or otherwise abused such trust and confidence in relation to the particular transaction impugned.”

5. In the case of actual undue influence (Class 1), the complainant (on whom the burden of proof on this issue rests) has to demonstrate the following, namely that :

(a) the person who allegedly influenced (I will refer to him as “the influencer”) had the capacity to influence the complainant;

(b) influence was in fact exerted;

(c) the exercise of influence by the influencer was undue; and

(d) the exercise of undue influence resulted in the transaction complained about (although it need not be the only reason as long as it was a significant reason : Chitty on Contracts Vol 1 (28^th edition) at paragraphs 7–50).

See : Bank of Credit and Commerce International SA v Aboody at 967.

6. In cases of actual undue influence, it is not necessary in order for the transaction to be set aside to demonstrate that it was manifestly disadvantageous to the complainant : see the House of Lords decision in CIBC Mortgages Plc v Pitt [1994] 1 AC 200, at 208–9. As Lord Browne‑Wilkinson remarked, actual undue influence is a species of fraud; “A man guilty of fraud is no more entitled to argue that the transaction was beneficial to the person defrauded than is a man who has procured a transaction by misrepresentation. The effect of the wrongdoer’s conduct is to prevent the wronged party from bringing a free will and properly informed mind to bear on the proposed transaction which accordingly must be set aside in equity as a matter of justice”: CIBC Mortgages Plc v Pitt at 209C–D.

7. In cases of presumed undue influence (Class 2), there is first a two‑step inquiry :–

(a) Was the relationship between the complainant and the influencer one of those established types of relationship that as a matter of law, undue influence is presumed? This is commonly known as the Class 2(A) category.

(b) If not within Class 2(A), was the relationship nevertheless one in which the complainant generally reposed such a degree of trust and confidence that the presumption of undue influence can be presumed? This is the Class 2(B) category.

8. Once it can be shown by the complainant that he falls within either Class 2(A) or Class 2(B), a presumption arises in his favour that the relevant transaction has been entered into as a result of undue influence. The effect of this presumption is that once it arises, whether Class 2(A) or 2(B), the burden then shifts to the influencer (or, as will be dealt with below, by the relevant third party such as the Bank in the present case) to show that the transaction was entered into with an independent mind and free of any undue influence …”

34.Mr Poon contended that this was a Class 2(B) category of presumed undue influence in that the relationship between Ng and D was one in which D generally reposed such a degree of trust and confidence in Ng such that undue influence should be presumed. To support that contention, it was argued that the relationship was pre-existing to the present dealings and Ng was “akin to a supervisor or leader”[14] .

35.I completely reject D’s case of undue influence, for the following reasons.

36.First, D’s evidence touching on the relationship between him and Ng was only that he believed Ng was a very successful businessman[15] and that D had previously “assisted Ng in various projects”[16]. Such scanty evidence hardly supports, not to say sufficient to justify, the allegation that the relation between Ng and D was one in which D had generally reposed such a degree of trust and confidence as would justify the Court to presume that there would have been undue influence by Ng over D.

37.Second, I find completely incredible and unreliable D’s case and evidence on how the alleged undue influence was exerted :

(a)  The original case of undue influence pleaded in §5(d) of the Defence was :

“on 5 May 2019, Ng drove the Defendant to the industrial building unit located at Fo Tan. As soon as they arrived the unit, 4-5 adults surrounded the Defendant and they said that they had already transferred the Loan to Ng and then forced the Defendant to sign an informal IOU (the “Alleged Agreement”) as they said that Ng could not be the principal borrower as they had doubts about Ng’s ability to repay the Loan” (my emphasis)

(b)  These were allegations of coercion and not Class 2(B) undue influence, as is now contended;

(c)  Evidently, being surrounded and intimidated by 4-5 adults who threatened the use of force would be an experience anyone would remember distinctly. Moreover, the reason requiring D to sign the Written Agreement was said to have been articulated - they had doubts on Ng’s ability to repay;

(d)  Yet, in D’s Amended Defence, the above allegations were completely deleted and resiled from, instead it was said that Ng forced D to sign;

(e)  When asked in cross-examination to explain this drastic change, the only explanation D gave was that there were several persons working for Tse walking around in Tse’s Office at the time, so he “thought” he was surrounded. D did not give any explanation as to why he retracted his original allegation as to what these 4-5 adult said concerning the loan having been transferred and they had doubt about Ng’s inability to repay. I find such explanation as completely disingenuous and was no good explanation for such blatant inconsistency in his story about how he was “forced” to sign the Written Agreement; and

(f)  I think such drastic and unexplained shift clearly show that he had been inventing his case concerning how he was “forced” to sign the Written Agreement.

38.Third, when further pressed in cross-examination, D answered that the undue pressure came from Ng’s threat that if D would not sign the Written Agreement as borrower, then there could be no such further “projects” of “assisting others in QMAS applications” or Ng would no longer collaborate with D in the future on such “projects”, and that therefore D would lose the opportunities to earn a share in the “application fees” in the future. By such an answer, it is in my view very clear that the threat or undue pressure that he was allegedly under was no more than a monetary reason or motive he yielded to leading him to choose or agree to sign. In other words, he agreed to sign because he wanted to have opportunities to further “cooperate” with Ng on “such projects” and thus to further “earn his share of fees”.

39.Lastly, contrary to what he pleaded in his Amended Defence that he had never read the Written Agreement in detail, when pressed in cross-examination, he admitted that he had read it before he signed.

40.For completeness, I said at the time that I will give my reasons for this ruling. Mr Poon attempted to stop this Court, in the course of D’s oral evidence, to elicit from D an explanation, if any, as to why he had so drastically changed his pleaded case concerning how he was “forced” to sign. Mr Poon submitted that I was not entitled to do so because by the amendment D had already deleted the earlier version. I ruled that I was entitled. With respect to Mr Poon, this Court is not only always entitled so to ask in connection with the issue of credibility, in fact, it could be seen as unfair to D if this Court later adjudicates against D’s credibility because of such matter without first giving D an opportunity to explain.

D's challenge that the loan amount was never drawn down

41.P’s case that a total sum of HK$3,000,000 (including the subject loan of HK$2,000,000) had been transferred to accounts designated by Ng was challenged in the Amended Defence on the basis that D had no knowledge about it. At trial, it was contended that P has failed to produce the bank transfer documents relating to the 3 Transfers and the 2 respective documents relating to the 2 Subsequent Transfers show that the 2 sums had been transferred to one 黄浩伦[17] and Dowse Technology (Hong Kong) Ltd[18] respectively, which on the face of the documents show no connection with Ng.

42.Apart from the 2 bank documents mentioned above, P also proffered a hand written note produced by Tse (“the Note”), said to have been written contemporaneous partly by her and partly by her accounting staff, listing out the dates of the 5 transfers and their amounts and the exchange rate of 0.883 between HK$ and RMB. In fact, it can be seen that the $300,000 was mistakenly stated in the Note as HK$ when the bank document[19] indicates that the amount transferred was in RMB, and therefore indeed a total sum equivalent to more than HK$3,000,000 (under the then prevailing exchange rate) was transferred.

43.While not all the related bank documents were produced and those produced could not on their face show that the bank account was designated by Ng and there was this minor mistake in recording the currency, I find on balance of probability that HK$3,000,000 had been transferred to Ng’s designated account as P said, for the following reasons :

(a)  I find Tse an honest witness and I accept her evidence;

(b)  There is no dispute that Ng did issue the 13 Cheques to Uncle Hou in purported repayment of the subject loan (on which Ng is a guarantor) and his HK$1,000,000 loan. The dates of the 13 Cheques matched the time when Uncle Hou demanded repayment of the loans. There is no suggestion whatsoever that Ng owed Uncle Hou/P any other sum except these 2 loans in question. In my view, the issuance of the 13 Cheques by Ng was very probative evidence showing that Ng admitted his lability over these 2 loans, which thus show that the subject loan was made;

(c)  When Uncle Hou demanded from D the repayment of the loan 3 times - 2 times by WeChat messages and once by solicitors’ letter, D never raised any dispute that the loan in fact had not been made;

(d)  I completely reject D’s evidence, said only for the first time in cross-examination, that the subject loan was to be made after P successfully applied under QMAS. If that were the case :

(i)  D could not explain why Uncle Hou/P required the Written Agreement to be signed on 7 May 2019, which would have been months before the drawn down of the loan;

(ii)  There is also no explanation why the loan period was stated in the Written Agreement as from 7 May 2019 to 6 May 2020;

(iii)  It could not explain why Ng and D would agree to sign, making themselves potentially liable; and

(iv)  The signing of the Written Agreement coincided exactly with the time D began to contact P for the purpose of the QMAS application in the evening of 7 May 2019.

Credibility and reliability of the witnesses’ evidence and my findings regarding the other disputed matters

44.I refer to the adverse comments and findings I made above on certain specific aspects of D’s evidence. As said, D’s role in the dealings I regard as an important setting, while D’s case of undue influence is a central piece in his defence case. On these 2 important matters I find D’s evidence far from truthful or reliable. Moreover, not only do I reject D’s oral evidence that the loan was to be drawn down only after P’s QMAS application was successful, I think his such claim disingenuous. In all, I come to a clear view that D is not a credible or reliable witness at all.

45.Uncle Hou and P were severely cross-examined as to their inability to produce any text messages exchanged between them regarding the subject matters. Mr Poon heavily criticized the reliability of their evidence on that basis, even though both of them had testified that they communicated by voice calls. Be that as it may, I find that the same criticism can be levied against D, if not more severely, in that D admitted that he had been communicating with Ng regarding the related matters by text messages, but he did not produce the text messages. In oral evidence, D gave the explanation that he thought that they had little to do with the subject matter of loan. I do not accept his explanation at all. Firstly, by amending his Defence, D himself brought in P’s QMAS application as a connected matter and into issue, and therefore must have known that matters relating thereto are relevant. Second, D has all along been legally represented and I doubt very much that he would have been explained by his lawyers that such text messages are not required to be produced for the reason D gave. In any case, I am prepared to view the matter as both parties having failed to produce relevant documents, and I would not draw any adverse inference against one without drawing the same against the other.

46.Though Uncle Hou and Tse at times were unable to recollection details and timing of events, I find them, as well as P, generally credible and reliable witnesses. P’s version is also to an extent corroborated and evidenced by the Written Agreement, by which D agreed to borrow the loan of HK$2,000,000 as on 7 May 2019.

47.Moreover, as said in §29 above, considering the inherent probabilities, I find that P’s version that D was present in the 2^nd Meeting more inherently probable.

48.In the premises, I have no hesitation in preferring the evidence of Uncle Hou, Tse and P over that of D’s, whenever they conflict.

49.Thus, I find for P’s version that D in fact attended the 2^nd Meeting, that D and Ng made the loan proposal in that meeting, and D had expressed to Uncle Hou that Ng represented him in the matters concerning the loans, that the subject loan had been drawn down by the loan amount having been transferred to the accounts designated by Ng, pursuant to the oral representation given by D to Uncle Hou in the 2^nd Meeting that Ng represented him in the matters relating to the loan. I also find that D knew on 7 May 2019 that part of the loan (the 3 Transfers) had been drawn down and paid to Ng and also knew that the balance of the loan (in the form of the 2 Subsequent Transfers) would be paid soon after the signing of the Written Agreement on 7 May 2019. Thus, I hold that whether D in fact pocketed none of the loan amount (as he claimed, and I make no finding thereon) is neither here nor there.

50.For completeness, I reject Mr Poon’s various submissions that (a) I should consider only “the oral part of the agreement”, (b) there was no intention to create legal relations, and (c) there was no certainty of terms in the agreement. With respect, there is clearly no basis for, nor any merits on, those submissions.

Disposal

51.In the premises, I find for P’s claim against D and will enter judgment against D for the repayment of HK$2,000,000. As P’s case of contractual interest, as stated in Uncle Hou’s witness statement, is 0.01% per annum, I order interest at such a rate from 7 May 2019 to the date of this judgment, and then after at judgment rate until full payment.

52.I order on nisi basis that costs should follow the event and D pays P’s costs of this action, including all costs reserved, with certificate for counsel, to be taxed if not agreed.

53.Lastly, I thank Ms Chan and Mr Poon for their assistance.

Ms Vivian Chan, instructed by C Y Tsang & Co, for the Plaintiff

Mr Marco M H Poon, instructed by Tai & Co, Solicitors, for the Defendant