M. A (HK) Ltd and Another v. Yeung Yuk Sing and Others

HCA 1641/2010

[2026] HKCFI 5928

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1641 OF 2010

________________________

BETWEEN

________________________

_________________

J U D G M E N T

_________________

INTRODUCTION

1.This is an account-taking exercise in relation to the the 1^st Defendant’s Counterclaim as advanced against the 2^nd Plaintiff in this action.

2.I have also dealt with the issue of costs of arising from or in relation to an application made on 4 December 2025 by the 2^nd Plaintiff, Au (who is defined in the Liability Judgment, as also defined below), including the costs of the parties’ written submissions in relation thereto (“Adjournment Costs Issue”).

BACKGROUND: LIABILITY JUDGMENT AND SECOND JUDGMENT

3.The present exercise stems from the judgment in relation to the Counterclaim[1] advanced by the 1^st Defendant granted by M Ng DHCJ. (as she was then) on 31 October 2017 (“Liability Judgment”) after a trial spanning 16 days, and a subsequent judgment also delivered by the same learned judge on 29 January 2018 [2018] HKCFI 158 (“Second Judgment”) after another hearing.

4.Neither the Liability Judgment nor the Second Judgment have been the subject of any appeal. For present purposes, unless otherwise indicated below, I will use the definitions set out in the Liability Judgment and the Second Judgment.

5.The general background to and various relevant entities and terms, including the names of Au and his family members, Marchant, Yeung, the Three (comprising Au, Yeung, and Marchant), MA-HK (who was the 1^st Plaintiff in these proceedings up until its claim was discontinued on 6 May 2015) as well as the terms Property Investment Agreement[2], the Property Investment[3], Rental Income and PIA Outgoings[4], PIA Properties and 10 Properties[5], the Lloyds Account and PoA[6], can all be found at Paragraphs 1 to 26 of the Liability Judgment.

6.In the Liability Judgment her Ladyship detailed inter alia her observations on the Witnesses (who included Au and Yeung, as well as on the role and the definition of one Pat and the Net Proceeds)[7], the Legal Principles for the Counterclaim [8] , the Garment Business and Yeung’s Refund (being Yeung’s personal monies) out of the Net Proceeds[9] , an overview of the Property Investment and Lloyds Account[10], discussed the duty to account in relation to the Property Investment and the Lloyds Account[11] including as to Status/Transformations[12], and analysed the UK Properties[13], Remittances for the Property Investment[14], and the Lloyds Account[15] so that account/inquiries could be taken in light of such findings. She found that the 2005/2006 Accounts were not settled accounts (and that if she were wrong they were not adequately rendered)[16], and exercised her discretion to order that Au give Yeung proper, complete, and accurate accounts of the Property Investment and Lloyds Account (save for a carve out and caveat in relation to 1-2 Lorenzo Street)[17], an enquiry as to what was due to Yeung upon the taking of such accounts, and an order for payment of the sum found due to Yeung (if any), including an account of profits as a result of deployment of Yeung’s assets and properties, subject to various caveats and further submissions on the final order, with such accounts and inquiries to be heard before a Master of the High Court[18].

7.Her Ladyship also made numerous factual findings and observations in the Liability Judgment. These constitute at least part of the relevant background and context, and inform my assessment of the evidence (including oral evidence) and matters before me. While I will refer in more detail below to certain, and more specific, matters when they are relevant to the specifics of the present exercise, at this stage I would outline the following which arise from the Liability Judgment, the Second Judgment, as well as from the Agreed Statement of Facts:

(1)  In/about 1999/2000, Au, Yeung and Marchant (ie the Three) agreed to jointly invest in UK Properties as per the Property Investment Agreement. Per its terms the Three would share equally the net profit/loss from purchase/sale of the PIA Properties (being properties in the UK acquired for such investment), and Au would keep accounts of such investment and pay the Three their entitlements. There were Remittances from Yeung to the UK pursuant to the Property Investment Agreement, purportedly for the purposes of the Property Investment, at Au’s direction.[19]

(2)  Au was under a duty to keep/give accounts for the Property Investment as the capital investment for such came under his control/management after the relevant Remittances left HK shores and Au/Marchant were in charge of purchase, letting, and sale of PIA Properties. This duty was one to keep/give accounts of the Status/Transformation of Remittances and Net Proceeds received, give overall account upon sale of each PIA Property to work out Yeung’s Refund and the net profit/loss, and give overall account of Rental Income and PIA Outgoings for each PIA Property that was tenanted (since such income/expenses were for Yeung alone).[20]

(3)  As Au told Yeung that Yeung alone was entitled to Rental Income and responsible for PIA Outgoings (both in relation to the Property Investment), for that purpose Yeung executed and gave the PoA in favour of Au for dealing with administrative aspects of the Property Investment, and opened the Lloyds Account (in his sole name and as sole signatory) and gave the Signed Cheques to Au, so that Au could operate the Property Investment and Lloyds Account. The Lloyds Account was (as per the agreed understanding) for the purpose of Rental Income from the Property Investment and PIA Outgoings. Au accessed funds in the Lloyds Account by way of the Signed Cheques, debit/cash point cards, and gave instructions for transfers etc but did not provide Yeung with bank statements that he had received. [21] Yeung entrusted control/operation of the Lloyds Account to Au. Au hence stood as agent/fiduciary to Yeung with custodial control of the Lloyds Account, and Yeung’s Refund out of the Net Proceeds that Au caused to be deposited into the Lloyds Account, giving rise to duties to account.[22]

(4)  Au was (unlike Yeung) both a “details man” and familiar with the English language. He was also astute in corporate operations. Au felt secure in his unique role that earned him Yeung’s ready/complete trust, and he was very aware of such advantage in his relationship with Yeung. Au knew that Yeung’s/MAY-HK’s unquestioning and ready Remittances were just a mere request away, saw himself as the “poorest” of the Three, and was unable to resist helping himself to such funds to feather his property portfolio and to ease his tight cashflow. Au facilitated such steps by telling Yeung directly or via MAY-HK’s then accounting clerk Pat that the required Remittances were for property purchase in UK (Yeung logically understood that to mean the Property Investment, as that was the only venture he knew that involved purchase of UK Properties). However, Au did not tell Yeung about the sale of the 10 Properties (which were at least part of the PIA Properties) until sometime after they had been sold, and Yeung did not know that Au had also arranged the deposit of the Net Proceeds (being the net sale proceeds of certain PIA Properties) into the Lloyds Account (even though it was meant for Rental Income), thus creating a pool of ready funds to which Au also helped himself. Nor did he seek Yeung’s informed authorisation for use of Yeung’s Refund for various purposes.[23]

(5)  Disputes arose over the specific terms of the PIA, such as whether rental income and property outgoing were solely Yeung’s rights and responsibility, and there was disagreement regarding the number and identity of the properties acquired, some of which were held either in the names of MAY Property [24] (namely, M A Y Property Investment Limited) and/or Yeung.[25]

(6)  Au was the sole accounting party to Yeung for the Property Investment and the Lloyds Account, but used substantial parts of such funds (such as the Remittances and the funds in the Lloyds Account) for purposes beyond the agreed scope of the PIA. He made numerous withdrawals, transfers, and cheque payments, some for his personal benefits or for third parties, without Yeung's informed knowledge and authorisation[26].

(7)  At trial before her Ladyship, Au did not present himself as straightforward and open in his dealings with Yeung. His evidence on the Counterclaim was unfocused, vague, confused, and “A story different in several material respects from his from his affirmation/statement evidence emerged that did not bode well for his veracity on the Counterclaim”. The learned Judge found that Au “downplayed the significance of matters perceived to be harmful to his position, and was garrulous on other matters he thought would be helpful.” Ultimately, Au acknowledged that notwithstanding the 2005/2006 Accounts he should provide Yeung with proper, complete and accurate accounts for the Property Investment and Lloyds Account.[27]

(8)  The Contra-Account Arrangement related only to the Garment Business, and not the Property Investment and/or Lloyds Account, and did not (contrary to Au’s claim) enable Au/Marchant to make interim drawings on their countra- accounts and to use monies in the Lloyds Account for personal purposes. There was also no Lloyds Contra-Arrangement as claimed by Au[28].

(9)  There was doubt as to whether (as Au alleged) the PIA Properties were limited to the 10 Properties, which was why Au had to give proper, complete, and accurate accounts of the Property Investment – which scope would be wider than the Admitted Items[29].

(10)  Au had bought 8 properties in the UK his name and/or that of his associates (Au’s Properties, which I describe and define in more detail below but for present purposes were mentioned in the Liability Judgment as being 72 Capital Wharf, No 30 Shackleton, No 9 Onedin Point, No 312 The Listed Building, 226 St Davids Square, 429 St Davids Square, 126 Red Square (although as explained below, on the facts and in the process of the account-taking it emerged and Au accepted that the relevant property that he had purchased for Eric was in fact a property at 128 Red Square[30], subsequently renumbered as 63 Red Square (“128/63 Red Square”)), and a mortgage-free property in Exeter purchased as a gift for Erica, which in the process of the account-taking turned out to be 49 Radford Road, Exeter EX2 4ES (“49 Radford Road”). Such were paid for (apart from by mortgage loans) by (a) Remittances which Yeung was led to believe were for the Property Investment but which Au knew were not legitimate drawings from his contra-account (b) Unauthorised drawings from the Lloyds Account the bulk of which was Yeung’s Refund (being Yeung’s personal monies). “I had no money” was Au’s mantra for helping himself to monies in the Lloyds Account and to Remittances sent to the UK pursuant to his directions, which he used for purchase of Au’s Properties[31]. Indeed, Au looked at the Remittances as “felicitious opportunities to make UK Property investments, to ease his cashflow and to upgrade his family’s lifestyle which [he] knew he could not have afforded otherwise… e.g. moving house to 72 [Capital] Wharf… 226 St Davids Square and further to 429 St Davids Square, and also gifting his children with UK Properties”[32].

(11)  The learned Judge found that Au had a duty to provide proper, complete, and accurate accounts, which duty arose immediately upon Au’s receipt of property in an accountable capacity, that Au was responsible for keeping and had a duty to keep / give accounts of the Property Investment Agreement and the monies of Yeung (including the Status/Transformations of Remittances, and Net Proceeds (that were received in the Lloyds Account)) and of the Status/Transformations of monies in the Lloyds Account and to account for sums he paid out to himself or others, that Au had failed to discharge his duty to account properly, and that Yeung was entitled to an order for proper, complete and accurate accounts, and all sums found due, from Au.[33].

(12)  That duty to account for Status/Transformations in the context of the Property Investment and the Lloyds Account included “an account of the status of the relevant investment monies and the acts/dealings thereto, the fund-flows of such monies, and the transformations they had undergone,” ie “all his dealings and acts in respect of the funds in question”.[34]

8.The Second Judgment concerned the scope and terms of the order for accounts and inquiries (“January 2018 Order”) made by Ladyship after a contested hearing. It is particularly salient as to the purpose and scope of the January 2018 Order, and of the present exercise, given that her Ladyship held that:

(1)  The directions with regard to the manner in which the Ordered Accounts (defined in Paragraph 8 of the Second Judgment) were to be taken or vouched must give effect to the findings and conclusions in the Liability Judgment, and were premised on her Ladyship’s findings in the Liability Judgment, including those referred to in Paragraph 9 of the Liability Judgment; and

(2)  In determining the contents of the order (and in particular by rejecting some of Au’s proposed amendments to the order):

i.  The scope of the Ordered Accounts had to be in line with the duty/obligation to account. Au’s duty to account covered the Status/Transformations of monies for the Property Investment and the Lloyd’s Account, and the scope of the Ordered Accounts should not be dictated by Au’s subjective knowledge, information and belief, while the Ordered Accounts could not and would not be constrained by Au’s best knowledge, or his best knowledge, information and belief[35]; and

ii.  Her Ladyship rejected the suggestion that Au’s duty to verify the Ordered Accounts by relevant documents only extended to those documents within his possession, custody and power, given that Au was the only accounting party, that he (not Yeung) should have kept all necessary vouchers, and that the Liability Judgment contemplated that Au would render proper, complete, and accurate Ordered Accounts. Accordingly she ordered (as reflected in Paragraphs 3(c) and 4(c) of the January 2018 Order) that “all necessary” documents be exhibited to the verifying affidavit.[36]

9.For ease of reference, Annexure 1 to this judgment contains the January 2018 Order as granted by her Ladyship.

BACKGROUND TO THE ACCOUNT-TAKING EXERCISE

10.After the January 2018 Order, Au filed his 5^th Affirmation (“Au 5”) on 4 April 2018 to which he exhibited:

(1)  At AKKR-60, worksheets prepared by Au containing his answers to questions pertinent to the January 2018 Order, and documents, regarding the relevant 36 remittances identified at Annexure 1 of the Liability Judgment (“Remittance Worksheets and Documents”); and

(2)  At AKKR-61, a details report and worksheets prepared by Au containing his answers to questions pertinent to the January 2018 Order, and documents, regarding the relevant 192 out of the 204 transactions (deposits into or withdrawals from) the Lloyds Account (“Lloyds Worksheets and Documents”);

and said that he did not have in his possession, custody or power any other further supporting documents in relation to the said accounts apart from those exhibited thereto.

11.I have reproduced, at Annexure 2 to this judgment, the worksheet relating to Item 5 of AKKR-60 within the hearing bundle, to enable reference to the relevant questions posed in the all of the worksheets that were contained within the Remittance Worksheets and Documents, and the Lloyds Worksheets and Documents.

12.In response, Yeung filed a Notice of Objection to AKKR-60, and a Notice of Objection to AKKR-61 on 16 May 2018.

13.By a summons dated 23 August 2023, Yeung sought an order that there be a taking of accounts before a Master, leave to amend the Notices of Objection, and for the filing and service of a Scott Schedule with respective contentions prior to the date of the hearing for the taking of accounts. Au filed a summons on 11 October 2023 seeking a stay of proceedings of and incidental to the taking of accounts and inquiries pursuant to the January 2018 Order on the basis of delay in prosecution.

14.Au filed his 6^th Affirmation on 12 April 2024 (“Au 6”), to oppose Yeung’s summons and in support of his stay application. Yeung responded in his 3^rd Affirmation filed on 10 November 2023 (“Yeung 3”), in which he explained inter alia that given his disappointment at reading Au 5 in 2018, and his view that Au had defied the January 2018 Order, he had since instructed various advisers to carry out investigations and collect further information and evidence, including from the UK Land Registry.

15.On 15 January 2024, Master Grace Chow rejected Au’s stay application. She also granted leave to Yeung to amend, file, and serve the Notices of Objection, and Au leave to file and serve a further affirmation in reply to such. She also directed that a Case Management Conference (“CMC”) take place, that the parties were to try to agree to and file a joint Scott Schedule summarising contentious items not less than 28 days before the CMC (and if no agreement were reached the parties do file and serve such not less than 14 days before the CMC), and that Yeung be at liberty to cross-examine Au on the affirmations verifying the said accounts subject to further order of the Master hearing the taking of accounts.

16.Pursuant to such, Yeung filed an Amended Notice of Objection (“Amended Notice”) to AKKR-60 and an Amended Notice to AKKR-60, and on 12 April 2024 Au filed his 8^th Affirmation (“Au 8”) in reply to both Amended Notices.

17.On 30 August 2024, and shortly before the CMC that had been scheduled for 9 September 2024, Au filed a Notice to Act in person.

18.Au appeared in person at the CMC on 9 September 2024 before Master MK Liu, at which no joint Scott Schedule was available. The learned Master ordered that the account-taking exercise be set down for 5 days, that the order that Yeung be at liberty to cross-examine Au on the verifying affirmations do stand, and that there be a Pre-Trial Review (“PTR”).

19.The PTR took place before me on 11 February 2025, at which I only had Scott Schedules prepared by Yeung. After hearing from the parties (during which Au, who continued to act in person, indicated that he did not intend to file his own Scott Schedules), I inter alia directed that Master Grace Chow’s order for liberty to cross-examine Au do stand, that there be filing of updated Scott Schedules with bundle page references, and for lodging and service of the parties’ respective opening submissions and various documents.

THE ACCOUNT-TAKING EXERCISE AND ADJOURNMENT COSTS ISSUE

20.The hearing of the account-taking exercise was initially scheduled to take place on from 16-17 and 22-24 April 2025, prior to which Yeung filed a written opening while Au (who continued to appear before me in person until 5 December 2025) chose not to do so but instead only made certain oral opening submissions before me. However, it transpired that more time was required to complete the cross-examination of Mr Au, who hence not only gave evidence on those dates (which he did throughout in Chinese) but continued to do so on 6 May 2025.

21.In the course of such cross-examination, Mr Lau for Yeung sought to explore certain matters and properties that had not been previously raised in the Amended Notices or the Scott Schedules, which he said arose due to the evidence given earlier in the course of Au’s cross- examination. Pursuant to discussion during the original hearing dates about the appropriateness of doing so on the scope of the Amended Notices[37] and while Au was still in the process of giving evidence, Mr Lau eventually indicated – after cross-examination of Au had concluded on 6 May 2025 in relation to the Amended Notices – that Yeung would apply to further amend the Amended Notices to raise such matters so that they could be ventilated by way of further cross-examination of Au. He estimated that at the time such would take one or two days.

22.Yeung made the relevant application to amend and by way of a summons dated 3 June 2025, and supported by the 4^th affirmation of Yeung dated 2 June 2025 (“Yeung 4”), to which Au responded by way of his 9^th Affirmation filed on 20 June 2025 (“Au 9”). In late June 2025, Au also lodged some short written closing submissions in relation to each of AKKR-60 and AKKR-61 (“Au June Closing”). I dealt with the application at a hearing on 4 July 2025 and, after consideration of the parties’ written skeleton[38] and oral submissions, granted leave that day to Yeung to file and serve a Re-Amended Notice of Objections on Account (“Re-Amended Notice”) in relation to each of AKKR-60 and AKKR-61, and leave to Au to file further affirmation evidence in reply to the re- amendments. I also ordered inter alia that that the parties do try and agree and file an updated joint Scott Schedule, that there be further hearings on 29 and 30 September 2025 on which dates Yeung be at liberty to cross- examine Au on such, and that Au do have leave to lodge and serve written submissions prior to such further account-taking hearings.

23.Rather, Au filed his 10^th affirmation (“Au 10”)[39] in reply to the re-amendments within the Re-Amended Notices, and an Agreed Revised Scott Schedule was filed in relation to AKKR-60 (but none was filed in relation to AKKR-61 as Yeung had not seen the need to revise such and Au took no steps in relation thereto). Au did not lodge any written submissions prior to the resumed hearing, which took place on 29 and 30 September 2025 and on which dates he was cross-examined further by Mr Lau for Yeung. I then gave directions for the parties to lodge and serve closing submissions prior to oral closing submissions, which I directed would be heard on 19 December 2025.

24.Pursuant to my directions, Yeung lodged his written closing submissions on 11 November 2025. However, on 5 December 2025, and hence very shortly before the 9 November 2025 deadline for Au to lodge his written closing submissions, Messrs Sit, Fung, Kwung & Shum (“SFKS”), who had been Au’s solicitors in the proceedings until his Notice to Act in person filed on 30 August 2024, filed a Notice to Act on behalf of Au and sought a 7 day extension of time for them to lodge and serve Au’s written closing, inter alia on the basis that they had only recently been instructed to represent Au and Counsel had “just been instructed on an urgent basis for the purpose of preparing [Au’s] written closing submissions” and to appear at the oral closing. This would however leave only 2 clear days for Yeung to review Au’s written closing submissions.

25.Eventually, and pursuant to further correspondence between the parties which I have considered in dealing below with the Adjournment Costs Issue, I granted the extension sought by Au, and directed both that the oral closing of the account-taking exercise take place on 10 February 2026 and that the parties lodge written submissions on the Adjournment Costs Issue prior to that hearing. I also permitted them to address the court on such at that hearing if there were time to do so after closing submissions.

26.Mr Leung lodged Au’s closing submissions by the extended deadline, the parties lodged their submissions on the Adjourment Costs Issue, and on 10 February 2026, I heard oral submissions from both Yeung (through Mr Lau) and Au (through Mr Leung) on both matters.

OVERVIEW OF PARTIES’ STANCES RE: ACCOUNT-TAKING

27.On behalf of Yeung, Mr Lau submitted inter alia in his opening that given, and with reference to certain findings of her Ladyship in the Liability Judgment [40] , the Court should approach the accounts provided by Au with extreme caution and a predisposition to scepticism, since the history of the case revealed deceit, misappropriation, and a wilful avoidance of the duty to account[41].

28.Mr Lau also submitted, with reference to RHC O 43 r 3(1), Joe Zhixiong Zhou v Saif Partners II LP [2022] HKCFI 1095 and [2022]HKCFI 3626, and Libertarian Investments Ltd v Hall (2013) 16 HKCFAR 681, that inter alia Yeung was entitled to claim all the profits that Au had made from UK properties purchased by Au using Yeung’s funds, and that the taking of accounts would identify and establish the quantum of those profits. It was also said, with reference to the authorities and the history of Au’s breach of trust and failure to provide proper accounts, that I should carry out a more critical initial assessment of the accounts provided, that I was entitled to draw adverse inferences against Au in the event he failed to provide accounts that were proper, incomplete, inaccurate, or lacked adequate supporting documentation, to adopt a robust approach to value assets and draw robust assumptions to calculate compensation (not constrained by the limitations of accounts provided if they were unreliable), make assumptions against Au where his actions/conduct had obscured the true financial picture or deprived the court of the necessary evidence, and to consider assessing equitable compensation on a basis that reflected Au’s wilful breaches and potential loss suffered by Yeung due to misconduct.

29.Mr Lau also made submissions on the approach to be taken in relation to the account-taking exercise at Paragraphs 39 to 43 of his written opening concerning matters to be taken into account in the exercise, the approach to be taken, and on how to assess the final sums due.

30.As to the scope of the exercise, Mr Lau referred in his opening inter alia to the 10 Properties (ie those under the Property Investment Agreement), the 8 properties understood to be Au’s Properties, and several other properties which were either not clearly mentioned in the judgment or at all including (as relevant for the purposes of the current exercise) those described at 120 Red Square and 42 Thornton Hill[42], all of which were in the United Kingdom. I was also asked to consider her Ladyship’s observations on Au’s nature as a “details man” with the ability to produce supporting documents (which Mr Lau contrasted with how Au had approached the account-taking exercise, and to her Ladyship’s observations at Paragraphs 104 and 115 of the Liability Judgment.

31.In his opening, and insofar as such are relevant to the present exercise, Au inter alia made the following submissions, which he asked me to take into account:

(1)  There were ten, real genuine investment projects under the Property Investment (for which Yeung had made remittances to make those purchases), he did not know why Yeung thought that there were more than ten, and that he had in the documents already provided a thorough explanation with the names specified.

(2)  In relation to discovery by Yeung of properties purchased by Au or his wife, it was Yeung who (on Au’s behalf) had made those transfers to the solicitors’ firm for the purpose of transaction. All of those sums were in relation to the contra account between himself and Yeung, which was created for the Garment Business between the Three, and because of the UK tax system complications and rates, and which contra account the three of them settled every year.

(3)  It was incorrect for Yeung to say that he had paid for the properties of 72 Capital Wharf, 226 St Davids Square, 429 St Davids Square, and 42 Thornton Hill[43]. As to the last of these it was bought in 2008 to 2010 with the profits he had made from MA-HK, and he could try and get the relevant documents including from his daughter. His operations in the 10 years of co-operation with Marchant since 2005, after the split with Yeung, explained why he had had enough money to buy other properties.

(4)  In relation to the use of funds from the contra account during Au’s co-operation with Yeung (ie prior to 2005), her ladyship had the incorrect perception that Au had used Yeung’s money. He did say he was the poorest but he did not say he did not have money. Rather, during the 8-10 years of co-operation, the sums (while he could not remember them) were not small, as apparently reflected in the amount of penalties resulting from self-declaration to the UK IRD paid by himself and Marchant. Another reason he had financial means to sell one property and buy another one, and the means to buy properties, was that he had made more profits than losses from his investments.

(5)  It was incorrect that there might be some other properties that were not yet disclosed or reported, as all UK properties purchased under his name had been disclosed.

(6)  There were shortcomings in relation his failure to keep a clear account, and he admitted there were many areas in which he failed, but he definitely had no intention to cheat. He also asked me to reject the notion that he had withheld or failed to disclose a lot of information which was not to his interest. He referred to how the matter lasted for more than 30 years, during which time he had moved, changed addresses several times, and lost documents. For those he had managed to obtain from the solicitors’ firm, he had provided the same to Yeung. The relevant handling partner named Tony Miles had retired, he claimed “about 2 to 3 years before the occurrence of these matters”, and there was no response when he asked the firm to provide documents that he had lost.

32.For the purposes of this section I summarise below certain relevant portions of the parties’ closing submissions, and also my determinations in relation to some of them.

33.I begin firstly with the following overarching matters and principles that were agreed, or were not apparently seriously disputed between the parties, and relevant observations/determination of mine in relation to such, all of which I have borne in mind when reaching my decision:

(1)  The account-taking process is one of inquiry, should not be used as an instrument of oppression of the accounting, party, and involves the court vetting the accounts (including supporting oral and written evidence) produced by both parties with a view to arriving at an outstanding figure due from one party to another (Man On Sum v Man Ping Hei [2016] 5 HKLRD 150 at §13; Exsus Travel Ltd. & ors. v James Turner & anor [2014] EWCA Civ 1331 at §24).

(2)  As to issues of how burden, it was Au’s (as the fiduciary) burden to prepare and substantiate the account, being a complete and verified one given the contents of the January 2018 Order and the statutory scheme under RHC O 43: see also Exsus, supra, at §§42, 46-48 and 58 (a case drawn to my attention by Mr Leung).

(3)  Au, as the accounting party, must be prepared to document each item. What information and documents an accounting party must provide depends on the circumstances and should be considered at the hearing. The essential requirement is that the beneficiaries receive sufficient material to enable them to understand the movements on the account. How the burden is discharged will vary from case to case (Willwin Development (Asia) Co Ltd v Wei Xing [2021] HKCFI 2933 at §27, Snell’s Equity, 35^th Edition (2024) §20-009).

(4)  The court can approach the evidential burden with regard to the facts of each case. There may be cases where the court will not require documentary evidence for every single item in an account, and the court may have regard to the overall picture of the evidence provided and find that the accounting party had discharged his burden (Exsus Travel at §§47-48; WCC Henchley Trust [2024] EWHC 607 (Ch) §§20, 44).

(5)  However, in this case it is in my view patent that the existence and contents of the Liability Judgment, the Second Judgment, and the detailed provisions of the January 2018 Order are highly relevant to the question of whether “sufficient material” has been provided to enable Yeung to understand the movements of the account, and as to my assessment of the overall picture of the evidence provided.

(6)  Mr Leung made it clear in the course of his oral closing submissions that Au was not advancing any allegation that there was a break in the chain of causation. Nor did I understand Au to have submitted that that any part of the profits made (and that he was asked to account for) were due to his own efforts or skills, such that I should reduce such so as to ensure that Yeung was not unjustly enriched cf Warman international Ltd & anor v Dwyer and ors (1995) 128 ALR 201 at 211 to 212.

(7)  Yeung could seek to surcharge the account (by contending that the accounting party should have charged themselves on the incoming side of the account with more than they had admitted) and to falsify the account (by challenging an item of discharge entered into the outgoing side of the account). Yeung bore the burden of proving surcharges and falsification, although Au (as fiduciary) bore the burden of proving discharges (ie in respect of all payments and transfers necessary to carry out any of the duties and powers they are invested with), which should be documented, such that he bore the burden of proof if he sought credit or allowance for expenditures and contributions (see Libertarian, supra, apparently at §§93, 124, 123, 114, 168, and 174; Snell’s Equity, §§20-009, 20-010, 20-012; Willwin, supra, at §§27-29, Joe Zhixiong Zhou per LePichon J at §§40-41).

(8)  Where a fiduciary ordered to provide an account fails to comply with the court order and renders an account that is demonstrably inadequate and incomplete, and/or is perfunctory and merely pays lip service to the court order, the beneficiary cannot be expected to surcharge and falsify in the normal way. Furthermore, presumptions may be made against the accounting party if he has not kept proper records or has destroyed them. If evidential difficulties faced by the Court “form part of the consequences created by the defaulting fiduciary”, or put another way if “the absence of evidence is the consequence of the fiduciary’s own breach of duty” [44] the court will adopt a robust approach and to do practical justice/rough and ready justice. In such a situation, it may rely on rely on the presumption against wrongdoers, the onus of proof, take the fiduciary at his own word and use his falsehoods to establish the facts if they were true even though they are known to be untrue, resolve doubtful questions against the party whose actions have made an accurate determination so problematic, and make every assumption against that party. The court, in being robust and doing rough and ready justice, does not have to justify the amount of its award with any degree of precision (Willwin, supra, at §§27, 31-33; Libertarian, supra, at §§138, 174; Joe Zhixiong Zhou per LePichon DHCJ. at §§63-69).

(9)  Mr Leung agreed that Yeung was entitled to advance personal claims against Au as a result of the Liability Judgment and the account-taking process, including claims for orders for compensation, as well as falsification, surcharging, and the consequences that such might entail. He also agreed that the Re-Amended Notices also advanced claims of surcharging and falsification, and that as a matter of law an account of profits could be advanced as a personal claim.

(10)  Tracing is neither a claim nor a remedy. Rather, it is merely the process by which a claimant demonstrates what has happened to his property, identifies its proceeds and the persons who have handled or received them, and justifies his claim that the proceeds can properly be regarded as representing his property. It is also distinct from claiming as it does not affect or establish his claim. It can be deployed in relation to a personal claim based on breach of fiduciary duty, as well as in relation to a proprietary claim. There is nothing inherently legal or equitable about the exercise and one set of rules is enough (see Boscawen v Bajwa [1996] 1 WLR 328 at 334H per Millett LJ (as he was then); Foskett v McKeown [2001] 1 AC 12 per Lord Millett at 128D-F at 111C per Lord Millett).

(11)  Tiger Resort Asia v Kazuo Okada [2019] HKCFI 1415 at §29 per K Yeung DHCJ. (as he was then) contains the relevant principles and rules to be applied in relation to tracing, which are not the result of any presumption or principle peculiar to equity. They include not just the principles set out in Libertarian, supra, §174 but also the following:

i.  That there has to be a “clear link” between the claimant’s funds, and the assets or money into which he seeks to trace. Whether the “clear link” can be established can be a matter of inference.

ii.  The rules include those in Re Hallett’s Estate (1880) 13 Ch D 696 and Re Oatway [1903] 2 Ch 356 which can resolve evidential uncertainty against the wrongdoer. The claimant can cherry pick, as against the wrongdoer, the tracing rule most favourable to him.

iii.  Per Tilley’s Will Trusts [1967] Ch 1179 at 1189A, where the trustee mixes trust money with his own, the equities are unequal. I note that an example given in that case was that where the property purchased has increased in value, the charge will be not merely for the amount of the trust moneys but for a proportionate part of the increased value.

34.Secondly, and in support of Yeung’s case, Mr Lau made extensive submissions on the evidence before me, including that the proceedings arose from an attempt to avoid an account in the original trial, and that Au had persisted in obstruction and non-disclosure and failed to fulfil his duties to account. It was said that the worksheets provided by Au were fundamentally deficient as they were often left empty, partly completed, or contained assertions dismissed by her Ladyship or devoid of much if any supporting evidence. Au’s evidence was criticised as vague, unreliable, inconsistent or contradictory to the findings of her Ladyship (including her observations as to his penchant for details and memory) and as containing multiple and sometimes contradictory explanations for key usages, withdrawals, or transfers. There was also a lack of documentation, including essential documentation. Given Au’s sparse filings, and his attempts to avoid giving proper accounts since 2004 (despite his being a “details man”), I was entitled to adopt a robust approach by drawing adverse inferences where Au’s failures had obscured the true financial position.

35.In relation to the relief and orders sought by Yeung, for present purposes the main area of Mr Lau’s submissions concerned various transactions which Yeung said related to a total of 15 properties (of which 8 were Au’s Properties), as identified in the relevant sheet (titled “Analaysis of Secret Properties”) of an Excel file in Attachment A to Mr Lau’s written closing (“Yeung Closing Attachment A”). A PDF printout of the relevant sheet of the Excel file that included Yeung Closing Attachment A can be found at Annexure 3 to this judgment. It was thereby suggested, in summary, that I should carry out a process whereby I should (pursuant to the Re-Amended Notices) link certain transactions within AKKR-60 and -61 to purchases of various properties in the United Kingdom (including some purchased in the name of Au and Paula, or Eric, or Erica and her husband), and then link the proceeds from those to the purchases of various other properties in Hong Kong (including some purchased in the name of Au and Paula, Paula, or Erica). As a result of this exercise, which Mr Lau submitted was a tracing but not claiming exercise following the rules set out in Tiger Resort Asia, supra, Yeung said I should order (which suggestions I will analyse further below) as a result of the account that Au pay Yeung:

(1)  What were said to be the total unused residuals (“Total Unused Residuals”), calculated in Yeung Closing Attachment A to be HK$37,059,775, which Yeung said did not relate to any further tracing exercise. This sum was comprised by adding up the residual amount from each Item of Remittance/Lloyds Account transaction applied in relation to the purchase of a property. So for example, if (as submitted in Yeung Closing Attachment A) a remittance of GBP100,000 had been used to cover the downpayment of GBP61,800 and costs of GBP3,306 for 30 Shackleton, then there would be an unused residual of GBP34,894.

(2)  What were said to be the total net rental not used in relation to the purchase of subsequent properties (“Total Unused Net Rentals”), being the net rentals from properties that were not (on Yeung’s case) used in the purchase of subsequent properties. Those properties were:

i.  The UK properties 226 St Davids Square, 275 St Davids Square, 128/63 Red Square, 49 Radford Road, and 42 Thornton Hill, which as per Yeung Closing Attachment A, amounted to GBP1,153,479 or HK$13,841,759; and

ii.  The net rental from all of the Hong Kong properties being HK$8,261,500.

(3)  The total amount of Remittances and Lloyd’s Account funds that were unrelated to purchases of property (and hence the tracing exercise) which totalled:

i.  GBP45,000 (or HK$540,000) paid under Items 22, 24, 33, and 34 of AKKR-60. As to the first it was Au’s case that such was used to pay back a personal loan of his, and Au claimed that the other three related to the purchase of 1-2 Lorenzo Road; and

ii.  Various amounts set out in AKKR-61 (including at least a total of GBP20,000 from Items 139 and 140 which were each GBP10,000, as reflected in Yeung Closing Attachment A, and other amounts from the relevant Scott Schedule), but not Item 71 (as that was said to be used to purchase 49 Radford Road), and apparently also certain other items if I were to find on the basis of Yeung’s alternative case that they were used toward the purchase of 42 Thornton Hill and/or 402B Tolo Ridge[45]. This is analysed in more detail below as the relevant amount of such depends on whether I were to find that certain Items had been applied in relation to the purchase of properties, or toward 1-2 Lorenzo Street/MAY Partnership.

Mr. Lau also mentioned some deductions that might be made – for ease of reference I will deal with such when considering these items below.

(4)  Profits made in relation to the 10 Properties under the Property Investment Agreement, which in the interests of proportionality Yeung was prepared to accept as being 1/3 of the profits from the 2005 Account, being GBP15,000.

36.On behalf of Au, Mr Leung’s main objections were that Yeung was not entitled to ask me to carry out the exercise, and grant the claims and relief sought (including in, and as reflected by the exercise set out in, Yeung Closing Attachment A), as against Au, including for tracing and an account of profits. It was said that this was because:

(1)  It was inappropriate to make findings and to seek an account of profits (including for rental income), as suggested by Yeung, in relation to properties apparently owned partly by non-parties, and it was insufficient to rely on the Amended Notices or Re-Amended Notices. This was because Yeung had not pleaded or advanced proprietary claims, tracing, or sufficient facts to support such claims in the original Defence and Counterclaim, including against non-parties such as Paula, Eric, and Erica, and/or as none of them had been joined despite each of them having had been or being the sole owners, or co-owners, of certain of the properties into which Yeung had asked me to trace the Remittances or Lloyds Account funds.

(2)  This must be so particularly when (absent a proprietary injunction) some of the properties had been sold before the conclusion of the account-taking exercise. The court should hence not allow Yeung to use the exercise as a backdoor in the hope that unpleaded proprietary claims could be advanced against those who were not party to the court.

(3)  The court also did not have jurisdiction to impose liability against Paula, Eric, and Erica for knowing receipt as they were non-parties.

37.Despite the vigour with which Mr Leung advanced such arguments, I do not accept that the type and scope of tracing exercise, findings, and relief sought by Yeung exceed my jurisdiction, and/or impermissibly go beyond the ambit of the account-taking exercise, whether as a matter of principle or as ordered by her Ladyship:

(1)  The relevant claims advanced against Au (and which were only advanced against Au) in this action were and are personal in nature. And as I have mentioned at Paragraph 33(9) above, Mr Leung agreed that Yeung was entitled to advance certain personal claims against Au as a result of the Liability Judgment and the account-taking process, including falsification, surcharging (both also agreed to have been advanced by way of the Amended Notices and the Re- Amended Notices), and the consequences entailed, and that as a matter of law a personal claim could be advanced for an account of profits.

(2)  In the Liability Judgment (from which there was no appeal) the learned Judge made certain findings in relation to Au’s Properties, including that he had bought them using Yeung’s money in the names of himself and his associates (including himself and Paula) and/or gifted them to Eric or Erica[46]. It is of course not uncommon for courts to (as her Ladyship clearly did in this case) make factual and other findings regarding matters even if they relate to non-parties. That was of course an essential part of the context in which she ordered the account-taking exercise, including her subsequent order (after hearing from the parties as to the scope of the order) that Au give proper, complete, and accurate accounts by way of the detailed provisions of the January 2018 Order, including explaining the Status/Transformations (see in particular references to portions of the Liability Judgment, the Second Judgment, and the January 2018 Order as mentioned at Paragraphs 7(12) and 8 above).

(3)  It was pursuant to such matters, and as part of the account- taking process, that Yeung raised objections via the Amended and Re-Amended Notices which inter alia identified all 15 of the relevant properties set out in Yeung Closing Attachment A, including in whose name(s) (including Paula, Eric, and/or Erica) they had been purchased, and outlined the tracing exercise that Yeung sought to carry out (eg that the sale proceeds and rental from 30 Shackleton had been used by Au to buy 602A Tolo Ridge[47] in Au’s and Paula’s joint names). Au was clearly able to and did seek to respond, in his evidence, to the Amended Notices and Re-Amended Notices. It was also clearly open to him to seek to adduce (if thought fit) evidence from other individuals mentioned, such as Paula, Eric, and Erica, to deal with Yeung’s objections and exercise as set out in the Amended Notices and Re-Amended Notices. Indeed that possibility was also canvassed inter alia during the course of the hearing of Yeung’s 3 June 2025 summons, and in cross-examination.

(4)  Given the above, and regardless of the contents of the Defence and Counterclaim[48], in my view the exercise has given rise to relevant and sufficient facts and particulars in support of the tracing exercise and Yeung’s claims, and the entire process, (including the tracing exercise, relief, and orders sought by Yeung) is therefore consonant with, and does not impermissibly fall outside, the following procedure as set out in Snell’s, supra, §20-009 and 20-013 both of which are within the section headed “PERSONAL MONETARY CLAIMS”:

(at §20-009) “(3) Taking the account

...The accounting party first submits their verified accounts and explanation and supporting documents as appropriate, and the beneficiary may then raise any specific objections they may have. Objections to an account presented to the court as complete are either by way of surcharge or falsification…”

(at §20-013) “(7) Misapplications An accounting party will not be entitled to a discharge for dispositions of property not authorised by their mandate. Unauthorised outlays are liable to be struck from the account and the account will be taken on the basis that the asset or money had remained. An accounting party may, for example, be liable on this basis if they consume, discard or destroy the property; if they give it to a person not entitled; if they misappropriate the property to their own purposes, or to some other improper purpose; if they make an unauthorised investment; or if an executor pays debts in the wrong order to the detriment of a creditor. The breach does not need to be pleaded, but can simply be raised as an objection to the account. The accounting party would then be required to make good their account with money taken from their own pocket, although the beneficiary might instead choose if they wish to ratify the unauthorised transaction and claim whatever proceeds there may be. [49] Usually the misapplied assets would be accounted for at values ruling on the date when the account is taken.[50]

The evident logic of the resulting personal liability is fundamentally different from that of a claim for compensatory damages.” (emphasis added)

(5)  The present case is hence very different from Grabowski v Conway [2002] EWCA Civ 1885 (see in particular §126), and Amidas Hong Kong Ltd v Che Si Ltd [2025] 5 HKLRD 288 (see in particular §§27-31). The former concerned an order granted as part of the trial judgment and based only on the contents of those pleadings, which did not properly include facts in support of the tracing exercise[51]. That necessarily forms the context for the suggestion that “Any facts relied on to support a tracing “claim” should be fully and properly pleaded” (Bullen & Leake & Jacob’s Precedents of Pleadings, 19^th Edition (2022) §62-17). As for Amidas, supra, that concerned a situation where, instead of the present account and inquiry process (as summarised at §27 of that judgment), the Court was asked to make a “rolled up” order and grant such account and inquiry as part of a default judgment application, which the Court did given the pleadings (in particular those of fact) in that case[52]. I do see that such authorities assist Mr Leung.

(6)  Nor do I agree with Mr Leung’s submissions (based primarily on Tang Ying Loi v Tang Ying Ip (2017) 20 HKCFAR 53 at §§16-17) to the effect that a proprietary claim had to be pleaded and established (including against any relevant co- owners) in relation to purchased properties (apparently, in particular, to ones owned or co-owned in the name of non- parties) in order for there to be an account for profits in the form of income generated from such properties. In particular, I do not see that the argument is supported by the comments in those paragraphs, including on the “incident of ownership”:

i.  Lord Millett’s discussion at §§14-17 of that judgment concerned the true nature of the claim in that case, which was one where the principal already had interest/ownership in the money or property obtained by the fiduciary (as is also the situation in the present case, since Yeung had interest/ownership in the Remittances and of portions of the funds in the Lloyds Account[53]). This was as opposed to a “secret profits” claim whereby e.g. an agent had received a bribe from a negotiating property or had diverted a business opportunity, and in which case the principle “had no previous interest in the money or property obtained by the fiduciary in such a case”.

ii.  There was there (as there is in the present case) already ownership of the funds in question – hence the right to benefit from such was simply an “incident of the ownership”. That was also why his Lordship said that in the case before the CFA that questions of causation that might arise in relation to “secret profits” claims, did not arise.

iii.  Properly understood, the comments and approach in Tang Ying Loi, supra, therefore do not suggest that Yeung had to plead and establish beneficial ownership of property acquired by way of Au’s misapplication of the Remittances and the Lloyd’s Account in order to obtain an account for profits in the nature of income (rental or otherwise) from such properties.

iv.  Indeed I do not see that such proposition is supported by any other authority cited to me, as a matter of principle or policy, or on the facts. In Tang Ying Loi, supra, no proprietary relief was granted in relation to the property purchased with the beneficiary’s misapplied funds, yet the court ordered (against which there was no appeal) that the defendant account for profits derived from the acquisition and holding of that property[54]. Further, at 662 of Scott v Scott [1963] 109 CLR 649 (which authority was cited at every level of Tang Ying Loi, and which as Lord Millett observed had closely corresponding facts):

“In its final analysis the appellant's argument on this branch of the case seems to rest upon the assertion that it cannot be said that there was any liability to account for any part of the profit which accrued to the trustee or, ultimately, to his estate unless it can be established that the estate of the testatrix became entitled to a beneficial interest in the property which [the defendant] purchased… the basis contention finds no support in the innumerable and varied cases in which trustees have been held liable to account for profits arising from the misapplication of trust moneys.”

v.  Rather, and on the authorities before me, it seems that the general nature of the exercise which Yeung asks me (via his closing, including Yeung Closing Attachment A) does not fall outside of Snell’s, supra, §20-009 to - 013[55], given the relevant procedure adopted and the true nature of the tracing exercise (both of which are explained above), and the contents of the January 2018 Order, which has not been appealed and was issued in the context of the Liability Judgment and the Second Judgment (and hence also the need to account regard to the Status/Transformations), and in which her ladyship explicitly ordered that Au identify inter alia rental income and expenses, and the whereabouts of sale proceeds and rental income including the same information if either of such sale proceeds/rental income were used for the further acquisition of landed property (January 2018 Order §3(b)iii.7. and 8).

38.Moving to Au’s position on the evidence itself, since Mr Leung and SKFS for Au had only been instructed on 5 December 2025 and had not heard Au’s evidence, Mr Leung did not make extensive submissions on the evidence. Rather, apart from asking me to take (which I have) into account the contents of the Au June Closing[56] when analysing the evidence[57], he addressed me primarily on matters of law as set out above, and made the following general submissions in relation to the evidence:

(1)  25 years or so had elapsed since the material events and remittances, and as a layperson Au could not have been expected to keep impeccable records or recollections in respect of such. Yeung also had only himself to blame for any loss of memory or evidence given his 5-year delay in issuing his summons seeking an account.

(2)  Insofar as Yeung invited me to draw adverse inferences against Au on the basis that the latter was recalcitrant or evasive during trial, these were serious allegations and there was no basis to suggest that he had intentionally destroyed or refused to supply documents that were known to exist – and absent such evidence I should not conclude that Au was guilty of such behaviour.

(3)  I should ignore Yeung’s attempts to create a prejudicial image of Au and his credibility, insofar as such related to suggestions that Au had potentially engaged in criminal behaviour (such as theft and both UK and Hong Kong tax evasion), in relation to which reference was also made to Au’s reliance on the privilege against self-incrimination.

(4)  There was no basis to invoke the principles set out by Lord Millett at Libertarian §174 as there was no evidence suggesting that Au had deliberately concealed matters or refused to cooperate with Yeung’s request for an account, and it was unfair for Au to be painted as a dishonest and fraudulent man who was intentionally obstructive or evasive at the trial of the account-taking exercise.

(5)  In his written closing submissions, and hence prior to Mr Lau’s elaboration in his oral closing (including of how to approach the exercise and remedies sought by way of Yeung Closing Attachment A), I note that Mr Leung submitted that furthest I was entitled to go was to adopt a robust approach and achieve “rough and ready justice” by ordering Au to personally restore, to Yeung, the entirety of the misappropriated funds under the Property Investment and the Lloyds Account, having regard to the Scott Schedules, Au’s evidence, and presumably also the Au June Closing (Willwin Development, supra, at §33).

39.While I deal with such matters below where relevant, at this juncture it is convenient for me to reiterate that I have (particularly in relation to the first, second-last and last of the above sub-paragraphs) considered and had regard to the correct position (per Paragraph 33(8) above and the FN thereto) as to when and how the principles from Libertarian, supra, §138, 174 might apply.

OVERALL OBSERVATIONS ON AU’S EVDIENCE

40.While I will set out below my analysis and findings in relation to the evidence relevant to the account-taking exercise, which has regard to inter alia the accounts rendered, the complaints raised by the Re- Amended Notices, and the various properties and transactions at hand, this is a convenient juncture for me to summarise my observations on the context of Au’s evidence and how to approach and consider it as a whole.

41.Firstly, and as a matter of context, not only had Au been legally represented at the time of preparation of Au 5 through to Au 8, but Au 9 and Au 10 were also clearly prepared with the assistance of someone with legal training. Au also admitted during the hearing of Yeung’s 3 June 2025 application, that he had sought and would continue to seek advice in relation to the application, including as to his affirmation evidence to be filed subsequent to Au 9 (ie Au 10). He also subsequently admitted in cross-examination that Au 10 had been prepared with the assistance of lawyers.

42.Secondly, from Au’s responses he was (despite his age [58] ) clearly aware of what he was being asked, as well as of the scope and purpose of, and the issues raised within, Mr. Lau’s cross-examination.

43.Thirdly, where Au’s testimony was relevant to matters of material dispute between the parties I did not generally find such to be reliable or credible. While I have dealt with and highlighted certain instances and examples in more detail below, it is convenient for me to highlight some overall observations at this point as to Au’s behaviour and testimony on several occasions throughout the course of the trial:

(1)  Au refused to accept that the learned Judge had ruled against him on relevant matters in the Liability Judgment, and insisted on relying on matters contrary to her Ladyship’s findings, and against which he had not appealed. This was notable in relation to eg the funding and purchase of 72 Capital Wharf, as dealt with in more detail below.

(2)  Au in his oral evidence gave answers that were quite different from (and in some cases unsupported or contradicted by) the contents of his worksheets or indeed his affirmations, notwithstanding that such had been compiled with the legal assistance, or contrary to his prior evidence/concessions he had made in the evidence before her Ladyship eg (i) Again in relation to the reason he had given for Item 1 of AKKR-60 in relation to 72 Capital Wharf; (ii) As I have analysed below in more detail in relation to Item 13 of AKKR-60, Au’s stance also shifted significantly from other matters, such as in relation to the status of the MAY Partnership and MAY Property entities, and as to control over the bank account of MAY Partnership (iii) In relation to the funds used to purchase 429 St Davids Square, as dealt with in more detail below; (iv) In relation to Item 20 of AKKR-60 he eventually resiled in cross-examination from his affirmation evidence that there had been a failure to obtain a mortgage for the purchase of 127 Red Square, and that the date of the transfer meant that it could not have used it to buy 128/63 Red Square; and (v) As to the alleged use of a mortgage/ “down payment” in relation to the purchase of 49 Radford Road.

(3)  Au also made somewhat cavalier attempts to seize on documents in an attempt to support his oral testimony when he thought that it would assist him to do so, even though ultimately they did not do so. For example, when cross- examined on Day 3 in relation to whether there was any ledger to support his claim in his worksheet relating to Item 13 of AKKR-60 being GBP50,000, he (after searching through the bundle for 2 minutes) sought to refer to a page 2 of the nominal ledger of MAY Partnership dated 7 February 2005 (“February 2005 Nominal Ledger”) and claimed that Item 6 thereof of GBP50,000 reflected the transfer. However, that had been adduced in relation to Items 27 and 28 of AKKR-60, and it was ultimately clear, for reasons I have analysed in detail below in relation to Item 13 of AKKR-60 and 275 St Davids Square, that there was no evidential basis linking Item 13 of AKKR-60 to Item 6 of the February 2005 Nominal Ledger.

(4)  All of this was notwithstanding that the documentary evidence disclosed his tendency to be very detail-oriented, having for example made some handwritten changes to the worksheet relating to Item 11 of AKKR-60, and having previously handwritten certain detailed sums up to 2 decimal places on the March 2005 Nominal Ledger (as defined below) in relation to “Loss” and “Net Loss” of not just himself but also Marchant.

44.I would have reached such views even if I were to ignore her Ladyship’s observations and/or characteristisations of portions of Au’s evidence in the Liability Judgment (including those set out at paragraph 7(7) above).

45.I note the submissions made by Au and on his behalf in relation to the lapse of time and documentary evidence (including Au’s General Reasons as defined in Paragraph 49(4)iv below), and that it has been some time since the transactions in question (with the Remittances having taken place from 1999 to 2004, activities in the Lloyds Account from 2002 to 2005), and since Au 5 to Au 8 were sworn. I have also carefully considered whether and how to apply (and where appropriate, have so applied) the principles in Libertarian, supra, §§138, 174. In my view, this is a case where most (if not all) of the evidential difficulties in relation to the Items/transactions, particularly such as relate to the use and deployment of those funds to buy Au’s Properties in the UK, are part of the consequences created by Au, as the defaulting fiduciary, given the following:

(1)  As set out in the Liability Judgment, and as summarised at inter alia Paragraph 7 above, Au was the sole accounting party to Yeung for the Property Investment and the Lloyds Account, and had used substantial parts of such funds (including the Remittances for the Property Investment) for his own purposes, which he had kept under wraps by concealing numerous transactions and not disclosing relevant supporting documents. While he was under a duty to keep/give accounts in relation to such, at the material times he had staunchly resisted giving accounts (including supporting documentation) to Yeung, even though the latter had such on various occasions asked for such, and had never expected to come under intense forensic scrutiny. He even sought to fob off Yeung with[59]:

i.  The 2005 Accounts, which were “startingly sparse”, and comprised of a 2-page “bald statement” that was “inadequate”, contained descriptions that were “misleading”, and unsupported by documentation (and while he claimed to have apparently referred to some primary documents (including some primitive records that he had kept) in coming up with such, none of which were shown to Yeung)[60]; and

ii.  Stalling (along with Maher) Yeung’s further investigations and demands for accounts, information and documents, and by way of the 2006 Accounts, which were also “startlingly sparse” and “even less informative than the 2005 Account”, inconsistent with the latter, and full of serious errors[61].

Au had also subsequently been evasive despite there being a genuine basis for Yeung’s demands for accounts, and had further resisted the counterclaim and Yeung’s attempts to obtain accounts in the action, only conceding in the course of his cross-examination at trial before her Ladyship that the 2005 and 2006 Accounts were insufficient and that he was required to give a proper account of acts/dealings in respect of the Property Investment and Lloyds Account[62]. Moreover, his attempts to rely on other defences, including most notably and for example the alleged contra-account arrangement and Yeung’s authorization as justification, were disbelieved by the trial judge, who made findings inter alia as summarised in Paragraphs 7(3) to (12) above.

(2)  By the time of the Liability Judgment, or at the very latest the January 2018 Order (if not earlier given his concessions before her Ladyship), Au must have been aware that he would need to give a proper, complete, and accurate account and disclose documents relating to the Status/Transformations of relevant transactions in the Remittances and the Lloyds Accounts and that would inevitably involve not just the 10 PIA Properties, but at the very least, Au’s Properties namely 72 Capital Wharf, No. 30 Shackleton, No 9 Onedin Point, No 312 The Listed Building, 226 St Davids Square, 429 St Davids Square, the Red Square property purchased by Eric (understood at the time to be 126 Red Square[63], but which turned out to be 128/63 Red Square), and the property purchased as a gift for Erica[64] (which in the process of the account-taking turned out to be 49 Radford Road). Moreover, by then and as a matter of context, Au would clearly have been aware of her Ladyship’s findings (and the basis thereof)as to his credibility and reliability, as to Yeung’s MO and how Au had dipped into Yeung’s funds and monies (including Remittances allegedly for the Property Investment treated as “felicitious opportunities”, and the Lloyds Account) to feather his property portfolio, and gift his children with UK Properties [65] . He would have also been aware of the attendant rejection of broad swathes of his claims in relation to the Three, the contra-account agreement/arrangement (and hence of the true nature and limit of the Contra-Account Arrangement), the Property Investment, Remittances, the Lloyds Account, and hence the need for information and documentation to support the giving of a proper, complete, and accurate account including by disclosing relevant documents.

APPROACH TO THE ACCOUNT-TAKING EXERCISE

46.I highlight here certain matters relevant to the general approach that I have adopted below:

(1)  For the purpose of granting relief in relation to the account- taking exercise, and given the period in question, Yeung asked the court to apply an exchange rate of GBP1 to HK$12, which was that which had been suggested, and subsequently adopted and agreed by the parties during cross-examination. I have adopted and applied such approach since there was no submission that it was wrong in principle to do so, and given also that I am entitled to apply a rough and ready approach given the principles above.

(2)  Yeung also suggested that when approaching the purchase price of properties, and for the purposes of calculating Unused Residuals and hence Total Unused residuals that I should assume that a property had been bought with a 70% mortgage. The basis for this was Au’s admission on Day 4, while being questioned on 429 St Davids Square, that he would generally speaking take out a mortgage for around 70% of a property’s value.

Item 1 of AKKR-60 and 72 Capital Wharf

47.Yeung’s case was that Item 1 of AKKR-60, being a Remittance of GBP100,000 on 4 March 1999, had been applied by Au for the purchase of 72 Capital Wharf (one of Au’s Properties), and that Au should account for such as part of the exercise at the UK stage (with which this section is concerned). There is no dispute that it was purchased on 29 March 1999 and sold on 10 March 2014. Au also agreed that it was his and Paula’s residence until around August 2001, after which it was rented out.

48.In Au’s worksheet relating to this Item, the reason he gave for the transfer was “Shareholders current account to purchase our main residence in London” in relation to which he clearly identified 72 Capital Wharf. He produced some documentation going back to 1999 in relation to 72 Capital Wharf, which related to the mortgage (being certain statements from 1999 to 2007, which recorded that as of 31 Deecmber 2007 there was still GBP112,868.72 outstanding), the rental received, costs of purchase, and rental expenses, and detailed figures were hence given in relation to the latter three matters. As explored in more detail below, there were however no supporting documents (or explanation) to establish his claim that he had actually paid GBP120,000 (deducting any mortgage) for the property, or why and whether he had allegedly paid GBP401,160.94 as redemption money. Nor did he set out the price for which it was sold in 2014, or the name and address of the vendor’s solicitors. His unsupported claim that the property was bought for GBP335,000[66] also contradicted the figure of GBP325,000 in the official records from the UK land title registration system (which documents Au did not produce but which were instead obtained by Yeung via his inquiries, made after having had sight of Au 5) into the UK land title registration system. Au also did not include an answer in relation to “The amount of profit made in relation to the sale”, even though it had taken place in 2014, only a few years prior to Au 5 having been affirmed.

49.For the following reasons, I find that Au has not discharged his burden to give an account of Remittance Item 1 of AKKR-60, as ordered by the January 2018 Order, and I find that the said Remittance had been applied by Au for the purchase of 72 Capital Wharf:

(1)  As per the Liability Judgment (from which there was no appeal)[67], the learned Judge had found that Au’s Properties were purchased from Remittances, or unauthorised drawings in the Lloyds Account which was only opened in 2002.

(2)  As I have mentioned, in Au’s worksheet he claimed that the reason for the transfer of Item 1 of AKKR-60 was “Shareholders current account to purchase our main residence in London” and in cross-examination he said that I should adopt his evidence in cross-examination elaborating on such, since that portion of the worksheet might not be accurate and as “ 當其時係誤解咗嗰個問題 ”. The evidence he gave was essentially in support of the case that he had previously advanced before her Ladyship, including by claiming that the source of such funds was a loan from Yeung, that he had repaid Yeung via the Contra Account Arrangement, and by trying to explain the contents of Au’s Income Statement. As her Ladyship had rejected such case and made binding findings in relation to such (including as to the scope of the Contra Account Arrangement) in the Liability Judgment[68], this was impermissible. It was also (which Au accepted in cross-examination, although he claimed he had no choice to do so) unreasonable.

(3)  Further, and in any event, Au was and is clearly the wrongdoer in these proceedings, since (as her Ladyship found in the Liability Judgment) he had failed to comply with his duty to keep/give accounts in relation to the Remittances, having at the material times staunchly resisted giving accounts (including supporting documentation) to Yeung, even though the latter had such on various occasions asked for such, and indeed he had never expected to come under intense forensic scrutiny. He had also never intended to be frank/open with Yeung about acts/dealings in relation to the Lloyds Account because he knew he had mishandled/misused monies in such[69]. As I have mentioned in Paragraph 45 above (and its subparagraphs) (i) He even sought to fob off Yeung with the 2005 Accounts, stall Yeung’s further investigations, and the 2006 Accounts (ii) By the time of the Liability Judgment, or at the very latest the January 2018 Order, he must have been aware that he would need to give a proper, complete, and accurate account and disclose “all necessary documents” relating to the Status/Transformations of relevant transactions in the Remittances and the Lloyds Accounts, and that would inevitably involve, at the very least, Au’s Properties including 72 Capital Wharf (with which I am presently concerned); and (iii) Similarly, by the time of the Liability Judgment Au would also have been aware of her Ladyship’s findings as to Yeung’s MO, and how Au had dipped into Yeung’s funds and monies, including Remittances allegedly for the Property Investment and the Lloyds Account, to buy UK Properties and gifting his children with UK Properties[70].

(4)  Despite these matters, and the detailed provisions and scope of the January 2018 Order all of which inform the requisite nature of the exercise, Au’s account and supporting documents in relation to for 72 Capital Wharf were, when viewed holistically and although not qualitatively the worst example in these proceedings, incomplete and inaccurate, and could not be sensibly explained with reference to the documents produced, and lacked other necessary and proper documents. Indeed and with regard to matters that I have mentioned above, and even though Au claimed in cross- examination to have taken the exercise of filling out the worksheet seriously, and admitted that he had kept a file in relation to what were his own private residences (including, obviously, 72 Capital Wharf) (“Au’s Residence File”):

i.  It was Yeung who had to go and find for himself the actual price at which 72 Capital Wharf was sold, and which occurred, despite the scope of the January 2018 Order which required inter alia that the account be verified by affidavit to which “all necessary invoices, vouchers, receipts and other supporting documents must be exhibited”.

ii.  There was no documentary evidence to support Au’s claim in the worksheet that he had in fact paid GBP120,000 (deducting any mortgage) for the Property or that he had paid some GBP401,160.94 as redemption money. On the contrary, such claims contradicted the documents provided by Au. Firstly, (given the actual purchase price of GBP335,000) if he had paid GBP120,000 then the sum of the mortgage would have been GBP205,000, yet the mortgage statements for 1999 clearly indicated that GBP215,000 had been advanced. Secondly, not only was there no explanation or reason on the documents to support the claim that GBP401,160.94 was paid as redemption money in 2014, but on the documents only GBP112,868.72 was outstanding as of December 2007.

iii.  In cross-examination as to the above, Au agreed that the GBP401,160.94 sum in the worksheet was strange, and that his figures in the worksheet would have reduced Yeung’s claim by several tens of thousands of GBP. He could not cogently explain the issues above other than by making the bare assertion that there was a possibility that he had remortgaged 72 Capital Wharf and used the money to buy, or make a downpayment towards the purchase of, 226 St Davids Square. His explanation as to why he did not fill in the profit he had made from the sale of 72 Capital Wharf[71] was simply that at the time he thought he did not have to explain such to the Court. Ultimately he accepted that the worksheet could not be relied on as being truthful and that he had gotten the details wrong.

iv.  Taking Au’s documentary evidence at its highest, the only inquiry he had made was on 7 December 2017 with the mortgagee to seek documents regarding the mortgagee from 2008 to 2014. However there was no documentary evidence to support the apparent claim in Au 6 and Au 8 that the mortgagee’s alleged failure to respond was “due to the lapse of time and loss of records”, or that he had made any other queries with any third parties or other “agents/lawyers” who had apparently failed to respond for the same reasons, which were why he was unable to produce any more information or documents (“Au’s General Reasons”). Moreover, no other documents were apparently sought/produced.

(5)  Given the sub-paragraphs above, I conclude that this was clearly a situation where insofar as there are evidential difficulties/absence of evidence in relation to Item 1 of AKKR-60, and 72 Capital Wharf, such are part of the consequences created by Au and his own breach of duty, hence I am entitled to and do apply the approach and principles set out at Libertarian, supra, §§138, 174 (such that I do not see that Au is materially assisted by his claim that he had lost some documents due to having moved several times in 25 years (a fortiori in relation to his personal residences such at this one as had Au’s Residence File), or by the fact that the transactions took place some time ago ie Au’s General Reasons). I have therefore done so in relation to the ownership of 72 Capital Wharf, and the purpose and accounting outcome of Item 1 of AKKR-60 inter alia by rejecting (in the circumstances above) the claim that he paid GBP401,160.94 as redemption money.

50.As it was Yeung’s case that the relevant proceeds of sale and rental income from 72 Capital Wharf and 429 St Davids Square are clearly linked to and should be traced into the purchases of Coastal Skyline[72] in 2015 by Erica, and of the B29 Workshop[73] in 2016 by Paula, I will deal with those before setting out the ultimate order to be made. However on the evidence before me and while I am entitled to take a robust approach including to make presumptions, it is prudent for me to set out at this point that:

(1)  I will use the actual figure in the mortgage statements of GBP215,000 rather than the 70% mortgage assumption, which affects the relevant entries in Columns K, M, and Q of Yeung Closing Attachment A, and the unused residual amount; and

(2)  As this case only involves misapplication rather than secret profits, then as per the discussion within Paragraphs 33 and 37 above and the tracing rules and account-taking concepts mentioned in Snell, supra, Foskett, supra, and Tiger Resorts Asia, supra, Yeung would only be entitled to remedies that reflect a proportionate share of any figures relevant to the tracing exercise. Although Au is a wrongdoer, I do not see that this is a case where I can or should (insofar as such suggestion was maintained in Yeung’s submissions) apply Libertarian, supra, to grant Yeung any full amounts sought, since the calculation is one of principle to be determined on the basis of findings of fact and does not arise from a lack of evidence[74]. Nor do I see this as an issue of causation, but rather one of the extent to which Yeung is able to successfully challenge the account provided.

51.As I have mentioned in Paragraph 35(1) above, it was Yeung’s case that Au should also account for Total Unused Residuals. As Mr Lau stated, there were instances where the underlying figure in relation to an Item would not give rise to an account in favour of Yeung. Item 1 of AKKR-60 is one such instance, since the GBP100,000 of Item 1 of AKKR- 60 is less than the amount paid by Au excluding mortgage, whether one uses Yeung’s own calculations resulting in GBP105,390 [75] , or my calculations using the actual amount of the mortgage from 1999 on the evidence which results in GBP 117,890[76]. However, as Yeung submitted that I should take an global or overall view of all of the Unused Residuals, and therefore award a sum of Total Unused Residuals, I will return to such suggestion after I have dealt with the present exercise in relation to all of the Items within AKKR-60 and -61 that I find are relevant to property purchases.

Item 2 of AKKR-60 and 30 Shackleton

52.It was Yeung’s case that this Remittance of GBP100,000 of on 22 September 1999 had been applied by Au for the purchase of 30 Shackleton (one of Au’s Properties), and that Au should account for such as part of the exercise.

53.Au’s original worksheet and attempt to account in relation to this Item was clearly incomplete as it only claimed that the sum had been received by “May Trading UK” by reason of “Inter-company loan”, said “I do not have any detail” in response to the question/detail of whether it related to any property purchase, and attached no supporting documents, with the rest of the worksheet being left empty. Yeung was dissatisfied with such and made inquiriesinto inter alia the UK land title registration system and on the website movemarket.com showing that 30 Shackleton was actually purchased on 14 January 2000 for GBP206,000 and was sold on 26 February 2008 for GBP355,000. Au’s further evidence in Au 8 was that it was an investment property for himself and Paula and that Item 2 was not used for the purchase of the property, hence he did not wish to disclose details about it, or profits.

54.In cross-examination, Au admitted that he had during the liability trial agreed that Item 2 of AKKR-60 was actually related to the purchase of 30 Shackleton. He said he could not remember why there was no detail in the worksheet, claimed there was another worksheet with all the details within that had the information regarding 30 Shackleton, but was unable to find it. He subsequently adduced (pursuant to an application which was not opposed by Yeung) further documents that he said related to 30 Shackleton which had had obtained from the “property file”, including some answers/details relating allegedly to the sale and purchase of the property (“Au’s Shackleton Details”), and was cross- examined on such. Later in the account-taking he produced further documents by Exhibit AKKR-72 to Au 9 relating to his and Paula’s sale of Shackleton, including a contemporaneous letter confirming that it had been sold by Au and Paula on 26 February 2008, and there was further cross- examination on this property relating to the question of whether its proceeds had been used to buy properties in Hong Kong.

55.For the following reasons, I find that Au has not discharged his burden to give an account of Remittance Item 2 of AKKR-60, as ordered by the January 2018 Order, and I find that the said Remittance had been applied by Au for the purchase of 30 Shackleton:

(1)  Again, as per the Liability Judgment (from which there was no appeal), the learned Judge had found that Au’s Properties (which included 30 Shackleton) were purchased from Remittances, or unauthorised drawings in the Lloyds Account which was only opened in 2002. Moreover, Au had admitted the purchase price for such property was beyond his means, and her Ladyship had rejected Au’s claim that Yeung had promised Au financial support for such acquisition, while recording that Au had initially admitted that this sum related to the purchase of 30 Shackleton before seeking to resile from such. Au’s claim in his worksheet was an apparent attempt to rely on his alternative explanation as advanced before her Ladyship, namely, that it was an inter-company receipt included at year-end balance by MAY-UK. However, such claim was rejected by her Ladyship in the Liability Judgment, given inter alia her findings as to Au’s Properties, the fact that MAY-UK was incorporated for the Garment Business while the Remittances were for the Property Investment Agreement, and her finding that the Contra-Account Arrangement only concerned the Garment business. Moreover the rent for 30 Shackleton was mentioned in Au’s Income Statement, which is inconsistent with the claim in Au 6 that it was a property investment for Paula and himself. Given the above, and the total lack of any supporting documentation to support such claim, I also reject such claim of Au. Although it is unnecessary to do so, such conclusion is also reinforced by the robust approach I take, which is justified by reason of the matters below.

(2)  Au produced no documentation to support the claim in Au’s Shackleton Details that 30 Shackleton had been purchased with a GBP100,000 mortgage from Mortgage Express, or that Au had paid a total of GBP106,000 for it (excluding mortgage). As to the latter, while the documents mentioned a property named as Plot No 64 Maritime Quay, Westferry Road, Isle of Dogs, London E14 which was apparently also intended to be purchased for GBP206,000, I was not given any documentary proof or cogent evidential basis on which I could (and I hence decline to) find this was also 30 Shackleton[77] as claimed, particularly when such documents were dated from September to October 1999, and 30 Shackleton was purchased on 14 January 2000. As for the mortgage documents, they referred to a mortgage for the Plot No. 64 property, and did not identify the relevant mortgagee or amount. There was no documentary evidence that Au had made any inquiries to seek any missing and/or any other supporting, documents relating to 30 Shackleton.

(3)  Further to the sub-paragraphs above, and given also Paragraph 45 (and its subparagraphs) and 49(3) above (which apply mutatis mutandi to 30 Shackleton, with which I am presently concerned) and the detailed provisions and scope of the January 2018 Order which inform the requisite nature of the exercise, I conclude that insofar as there are evidential difficulties/absence of evidence in relation to the said Item (and insofar as necessary 30 Shackleton), such are part of the consequences created by Au and his own breach of duty, hence I am entitled to and do apply the approach and principles set out at Libertarian, supra, §§138, 174 (and I do not see that Au is materially assisted by his claim that he had moved several times in 25 years and had apparently lost some documents (particularly when he had a file for this property), or by the fact that the transactions took place some time ago (ie Au’s General Reasons). I have therefore done so in relation to the purpose and accounting outcome of Item 2 of AKKR-60 and ownership of 30 Shackleton, such that inter alia I conclude (as mentioned in the head paragraph above) that ultimately Item 2 of AKKR-60 was used by Au to purchase 30 Shackleton.

56.As it was Yeung’s case that the relevant proceeds of sale and rental income from 30 Shackleton and 9 Onedin Point are clearly linked to and should be traced into the purchase 602A Tolo Ridge, I will deal with that before setting out the ultimate order to be made, although it is convenient for me to record here that:

(1)  Au admitted in cross-examination that it was possible, and would not have been unusual, for him to have used the proceeds of sale of 30 Shackleton and 9 Onedin Point to buy properties in Hong Kong, and that he could not remember what else he would have used the proceeds for; and

(2)  I have given the state of the evidence before me applied the 70% mortgage assumption suggested by Yeung. Further, given the discussion at Paragraph 50(2) above which applies here mutatis mutandi, Yeung is entitled to remedies that reflect a proportionate share of any figures relevant to the tracing exercise.

57.As for Yeung’s case that Au should also account for Total Unused Residuals, Item 2 of AKKR-60 produces a component sum of GBP34,894 or HK$418,728. However since Yeung has submitted that I should take an global or overall view of all of the Unused Residuals, and therefore award a sum of Total Unused Residuals, I will return to such suggestion after I have dealt with the present exercise in relation to all of the Items within AKKR-60 and -61 that I find are relevant to property purchases.

Items 4 and 5 of AKKR-60 and 9 Onedin Point

58.It was Yeung’s case that these sums of GBP17,000 transferred on 24 February 2000 (Item 4) and GBP5,000 transferred on 17 May 2000 (Item 5) of the Remittances had been applied by Au for the purchase of 9 Onedin Point (one of Au’s Properties), and that Au should account for such as part of the exercise. There is no dispute that the said property was purchased on 9 June 2000 for GBP211,500 and sold on 2 November 2007 for GBP359,500.

59.As recorded in the Liability Judgment, and as admitted by Au in the worksheet relating to Item 5 of AKKR-60 (which is at Annexure 2 to this judgment), that Item was used for the deposit to cover the purchase of 9 Onedin Point, while there were substantive answers to the questions in that worksheet, and various documents were produced relating to various facets of the purchase, mortgage, rental, and expenses of the property.

60.However in relation to Item 4, Au’s worksheet said the sum had been received by his nephew, Micky Ng, by reason of Au’s “shareholder’s current account for his nephew’s school fee” and attached no supporting documents. In cross-examination he confirmed that he was therefore saying that this was a reference to the contra account and that the amount had been repaid to Yeung (apparently at the end of the year although he needed to check such from the contra-account), and his explanation was that although he was the poorest of the Three from 1999 to 2005, Yeung had transferred money to support him to buy Au’s Properties. Hence he used some of Yeung’s money, but some of it was his, and he was still able to lend money to his nephew.

61.For the following reasons, I find that Au has not discharged his burden to give an account of Remittance Item 4 of AKKR-60, as ordered by the January 2018 Order, and that the said Remittance had been applied by Au for the purchase of 9 Onedin Point:

(1)  As per the Liability Judgment (from which there was no appeal), the learned Judge had found that Au’s Properties were purchased from Remittances, or unauthorised drawings in the Lloyds Account (which was only opened in 2002). Au’s evidence before me was essentially that this sum was part of his drawings from the contra account (ie that it fell under the Contra Account Arrangement). However this claim is inconsistent with her Ladyship’s findings that such only related to the Garment Business, and not to the Remittances (which included Item 4)[78], and must be rejected.

(2)  Mr Lau highlighted from the Completion Statement of 9 Onedin Point that a total of some GBP17,000 had been paid in addition to the GBP50,000 which Au admitted was Item 5 of AKKR-60. Au’s claim before me was not consistent with the fact that Yeung was apparently told in 2004 that Item 4 was for property purchase in the UK[79]. There was also no documentary evidence attached to (and hence to support Au’s claim in) the worksheet for Item 4, in particular that the sum was in fact used for the alleged purpose of paying his nephew’s school fees, or even that Micky Ng was Au’s nephew. Indeed, the documents show that the cheques from one “M Ng” were used to pay some later ongoing expenses of 9 Onedin Point, but in Au 6 he chose not to explain who “M Ng” was (including whether it was Mickey Ng) or why such cheques were used. There was no evidence that Au had made any inquiries to seek any documents necessary to support and explain his worksheet, or that such failure to produce any such documents was related to his apparent claim in Au 6 and Au 8 that he had made inquiries with “agents/lawyers” and that they had not responded “due to the lapse of time and loss of records” (ie Au’s General Reasons).

(3)  Given the above, Paragraph 45 (and its subparagraphs) and 49(3) above (which apply mutatis mutanda to 9 Onedin Point with which I am presently concerned), and the detailed provisions and scope of the January 2018 Order which inform the requisite nature of the exercise, I conclude that insofar as there are evidential difficulties/absence of evidence in relation to Item 4 of AKKR-60 and 9 Onedin Point, such are part of the consequences created by Au and his own breach of duty, hence I am entitled to and do apply the approach and principles set out at Libertarian, supra, §§138, 174 (such that in particular I do not see that Au is materially assisted by his claim that he had lost some documents due to having moved several times in 25 years, or by the fact that the transactions took place some time ago ie Au’s General Reasons). I have therefore done so in relation to the purpose and accounting outcome of Item 4 of AKKR-60 and ownership of 9 Onedin Point, such that inter alia I ultimately conclude that Item 4 was used by Au to purchase 9 Onedin Point.

62.As it was Yeung’s case that the relevant proceeds of sale and rental income from 30 Shackleton and 9 Onedin Point are clearly linked to and should be traced into the purchase 602A Tolo Ridge, I will deal with that before setting out the ultimate order to be made (although again I note Au’s admission in cross-examination as set out at Paragraph 56 above). However, on the evidence before me and while I am entitled to take a robust approach including to make presumptions:

(1)  Rather than adopt the 70% mortgage assumption, I find it more appropriate to use the actual apparent mortgage figure of GBP151,805 from a statement dated 5 April 2001, which was nestled within the numerous bundles before me[80]. This affects the relevant entries in Columns K, M, and Q of Yeung Closing Attachment A, and the unused residual amount; and

(2)  Given the discussion at Paragraph 50(2) above which applies here mutatis mutandi, Yeung is entitled to remedies that reflect a proportionate share of any figures relevant to the tracing exercise.

63.As for Yeung’s case that Au should also account for Total Unused Residuals, Items 4 and 5 as applied to 9 Onedin Point would produce a component sum of GBP2,344 or HK$28,128.[81] I will return to the issue of Total Unused Residuals after I have dealt with the present exercise in relation to all of the Items within AKKR-60 and -61 that I find are relevant to property purchases.

Item 11 of AKKR-60 and 312 Listed Building

64.Yeung’s case was that Item 11 of AKKR-60, being a Remittance of GBP70,000, had been applied by Au for the purchase of 312 Listed Building (one of Au’s Properties), and that Au should account for such as part of the exercise. There is no dispute that it was purchased in 2001, and was sold on 21 January 2003 for GBP345,000. There was also no dispute that Item 11 had in fact been put toward the purchase of 312 Listed Building. The main dispute between the parties was whether and why Au had purchased the property at GBP325,000 (as claimed in his worksheet) or for GBP225,000 as claimed by Yeung.

65.As a matter of context, Au’s worksheet included an attempt to account in relation to this Item, and included various documents including correspondence relating to expenses and, apparently, to the mortgage (said to have been obtained in the sum of GBP260,000) and purchase price (said to be GBP325,000). As Yeung was dissatisfied, he made inquiries into inter alia the UK land title registration system which revealed a lease, which had been stamped and registered with the UK Land Registry and certified to be a true copy of the original by Au’s solicitors Howes Percival (“312 Lease”) clearly stating in English and in Arabic numerals that the (leasehold) property had actually been purchased by Au and Paula on 19 June 2001 for GBP225,000. However, Yeung chose not to dispute Au’s claim that the property was never rented out, or to claim against Au in relation to such. Au’s response in his evidence, including Au 8, was to rely on the documents he had produced alongside the worksheet, and to claim that he had provided “all the records in my possession relating to the mortgage loan”.

66.For the following reasons, I find that Au has not discharged his burden to give an account of Remittance Item 1 of AKKR-60 as ordered by the January 2018 Order, and that Yeung has discharged his burden to challenge the account provided by Au in relation to Remittance Item 11 of AKKR-60, such that the purchase price of 312 Listed Building should hence be GBP225,000 and not GBP325,000:

(1)  As a starting point the account had to be complete and verified, and as per the June 2018 Order, had to include “all necessary” documents. However, Au has never produced a document to support his claim as to the name and address of the seller identified by him on his worksheet (being Peachdrive Properties Ltd of 52 The Phoenix, 19 Barrett Street, London W1U 1BB), even though in cross-examination he said there should have been a relevant document (in relation to which he offered the excuse that he had been careless rather than deliberately not disclosing such). In contrast, the 312 Lease indicated that Au and Paula had purchased 312 Listed Building from an entirely different seller, namely Regalian Homes Limited of 44 Grosvenor Hill London W1A 4NR. Au’s evidence (whether in Au 8 or in cross-examination) proffered no explanation for this discrepancy.

(2)  Not only could Au not explain why the 312 Lease (which he admitted in Au 8 was “a UK land record”) clearly indicated the price of GBP225,000 as opposed to his claimed price of GBP325,000, but more importantly and on the whole, the contents of the documents which he produced to support his allegation of the GBP260,000 mortgage (and hence in support of the claimed GBP325,000 purchase price) contained serious discrepancies that could not be cogently and rationally explained.

(3)  In particular, the apparent 3-page “OFFER DETAILS” from the mortgagee (Mortgage Express) (“312 Offer Details”) specified a monthly mortgage payment of GBP1,389.72 for 15 years, which meant Au would have to only pay a total of GBP250,149.60 to service a loan of GBP260,000, advanced at 6.35% interest, and where (as also indicated on the document) the stated opening balance was GBP262,625. Moreover, the monthly payments specified in the documents were all substantially lower[82] than the monthly payments for a 15-year mortgage granted in relation to 72 Capital Wharf:

	Mortgage Period	Mortgage Principal (GBP)	Interest Rate	Interest payment (GBP)
72 Capital Wharf	15 years	215,000.00	5.69%	1,807.56
312 Listed Building 5.6.2001 Offer Letter	15 years	260,000.00	6.35%	1,389.72
312 18.10.2001 Payment Change Advice	15 years	260,000.00	5.85%	1,280.30
312 16.11.2001 Payment Change Advice	15 years	260,000.00	5.60%	1,225.58
312 17.12.2001 Payment Change Advice	15 years	260,000.00	5.10%	1,116.16

Au could not cogently explain these discrepancies. He claimed only in relation to the first that the reason why the figures led to less than GBP260,000 being payable was because there was a “variable discounted rate” and at that stage the Bank of England was reducing is interest rates. However, while the 312 Offer Details do specify “Base Rate Linked Variable Rate”, I do not see (or accept) from the evidence before me that this is a cogent or credible explanation to which I should accord any weight.

(4)  There was no documentary evidence that either Howes Percival or Mortgage Express (the latter of which Au agreed should still be in operation) had been contacted at any point to seek an explanation for, and/or any other relevant documents (including to provide original copies of such documents) which might explain, the glaring and inherent inconsistencies identified above in relation to the 312 Lease on the one hand, and the other matters identified above. Nor was there any documentary evidence to suggest (insofar as such may be claimed by Au) that if they had been contacted, they had not responded “due to the lapse of time and loss of records” (ie Au’s General Reasons).

(5)  Given the above, as well as Paragraphs 45 and 49(3) above (which apply mutatis mutandi to 312 Listed Building), and the detailed provisions and scope of the January 2018 Order which inform the requisite nature of the exercise, I therefore do not consider it appropriate to accord any weight to the documents produced by Au (including the 312 Lease) insofar as they suggest that 312 Listed Building was purchased for GBP325,000 as claimed. I consider that insofar as there are evidential difficulties/absence of evidence in relation to the said Item (and insofar as necessary 312 Listed Building), such are part of the consequences created by Au and his own breach of duty, hence I am entitled to and do apply the approach and principles set out at Libertarian, supra, §§138, 174 (such that in particular I do not see that Au is materially assisted by his claim that he had moved several times in 25 years and had apparently lost some documents – a fortiori when he had a file for this property – or by the fact that the transactions took place some time ago ie Au’s General Reasons). On the other hand, I accord full weight to the contents of the 312 Lease, which establishes (and hence I accept) that the purchase price was GBP225,000.

(6)  Given the above approach, I do not see that I need to determine (as submitted by Yeung) that Au had altered, and hence forged, the portion of the 312 Lease Offer under the heading “Loan details”. However, had it been necessary for me to come to view on the topic, I would have agreed with Yeung’s submissions due to (as explained above) the inherently illogical and inconsistent contents of such, and the failure to provide any cogent explanation or supporting documentation in support thereof, particularly in the circumstances set out in Paragraphs 48(3) and (4) above, and those in Paragraphs 45 and 49(3) above along with the detailed provisions and scope of the January 2018 Order which inform the requisite nature of the exercise.

67.As it was Yeung’s case that the relevant proceeds of sale and rental income from 312 Listed Building can be said to be clearly linked to the purchases, in Au’s name, of Coastal Skyline in 2005, and of 402B Tolo Ridge in 2007, I will deal with those before setting out the ultimate order to be made. However, as given the above there is no credible evidence as to the amount of the mortgage, given the robust approach and presumptions I am entitled to make, I will apply the suggested standard mortgage amount of 70%. Also, and given the discussion at Paragraph 50(2) above which applies here mutatis mutandi, Yeung is entitled to remedies that reflect a proportionate share of any figures relevant to the tracing exercise.

68.As for Yeung’s case that Au should also account for Total Unused Residuals, Item 11 as applied to 312 Listed Building would produce a component sum of -GBP3,079 or HK$36,948. However I will return to the issue of Total Unused Residuals after I have dealt with the present exercise in relation to all of the Items within AKKR-60 and -61 that I find are relevant to property purchases.

Items 6, 7, and 12 of AKKR-60 and 226 St Davids Square

69.Yeung’s case was that Item 12 of AKKR-60, being a Remittance of GBP10,000 on 29 May 2001, had been applied by Au for the purchase of 226 St Davids Square (one of Au’s Properties, purchased in his and Paula’s names, and to which Au and Paula moved from 72 Capital Wharf), and that Au should account for such as part of the exercise.

70.It was also Yeung’s case that Items 6 and 7 of AKKR-60, being Remittances of (respectively) GBP30,000 on 17 May 2000 and GBP45,000 on 2 August 2000 were relevant to the calculation of Total Unused Residuals.

71.There is no dispute that 226 St Davids Square was purchased on 30 July 2001 for GBP349,950[83] and transferred to Yeung on 30 June 2006. It was also rented out for a period prior to such transfer.

72.As for Au’s original worksheet and attempt to account in relation to Item 12 of AKKR-60, that only claimed that the sum had been received by “MAY UK” by reason of “Inter company loan”, and said that it was not in relation to a purchase of any property. No other details were provided on any of the 3 worksheets, nor were any supporting documents attached.

73.In Au 8, Au said there was no basis to link Item 12 of AKKR- 60 to the purchase of 226 St Davids Square, that the latter was a property investment for Paula and himself and was used as his and his wife’s residence, that it had been transferred to Yeung for GBP210,000 for the corresponding reduction in his liability to Yeung, that the stated consideration of GBP395,000 was not actually paid, and that he did not make a profit from its sale.

74.As Yeung had obtained 226 St Davids Square, he did not ultimately seek to trace the net proceeds of its sale. The issues arising in relation to the use of such Items to purchase 226 St Davids Square related to its rental proceeds (for which Yeung sought GBP81,400), any sum relating to it as a component part of Total Unused Residuals, and the question of whether there should be an overall deduction from the account and payment to be made in favour of Yeung.

75.For the following reasons, I find that Au has not discharged his burden to give an account of Remittance Items 6, 7, and 12 of AKKR- 60, as ordered by the January 2018 Order, and that Item 12 had been applied by Au for the purchase of 226 St Davids Square:

(1)  I refer to and will not repeat Paragraph 61(1) above. Moreover, Au had agreed before her Ladyship that he had purchased this property with Yeung’s Remittances, although he could not remember the details, and she had found that Au took the Remittances as felicitious opportunities that resulted in his inter alia moving house to 226 St Davids Square, which he could not have afforded otherwise.

(2)  Au’s worksheets said that Items 6 and 7 had been transferred to Benet Marden, a friend of Marchant, for “J. Marchant shareholder’s current account”. As for Items 6 and 7, Au failed to produce any documentation to establish his apparent claim in Au 6 and Au 8 that he had made any inquiries with any “agents/lawyers” in relation to such, and that they “did not respond due to the lapse of time and loss of records” (ie Au’s General Reasons).

(3)  Au produced no documentation in support of his claims in the worksheets, which are hence bare allegations. Having had regard to the timing of the Remittances, and the facts above, as well as Paragraphs 45 and 49(3) above (which apply mutatis mutandi to 226 St Davids Square with which I am presently concerned), I conclude that insofar as there are evidential difficulties/absence of evidence in relation to Items 6, 7, and 12 of AKKR-60, and 226 St Davids Square, such are part of the consequences created by Au and his own breach of duty, hence I am entitled to and do apply the approach and principles set out at Libertarian, supra, §§138, 174 (such that in particular I do not see that Au is materially assisted by his claim that he had lost some documents due to having moved several times in 25 years, or by the fact that the transactions took place some time ago ie Au’s General Reasons).

(4)  I have therefore done so in relation to the purpose and accounting outcome of Item 12 of AKKR-60 and ownership of 226 St Davids Square, such that inter alia I conclude that such was used by Au to purchase 226 St Davids Square. I also accept Yeung’s submission that Item 12 should be applied, along with a standard assumption of 70% mortgage/30% downpayment to produce a component unused residual sum for 226 St Davids Square of -GBP94,985 or -HK$1,139,820. However, I do not see that (or how) that Yeung was suggesting that I should apply Items 6 and 7[84] so as to further affect the component portion of unused residuals relating to 226 St Davids Square, and in turn Total Unused Residuals. In the circumstances, and given the lack of submissions to the contrary from Au and doing rough and ready justice, I will therefore use the aforesaid calculations and figures in relation to unused residuals. As Yeung has submitted that I should take an global or overall view of all of the unused residuals, and therefore award a sum of Total Unused Residuals, I will return to such suggestion after I have dealt with the present exercise in relation to all of the Items within AKKR-60 and - 61 that I find are relevant to property purchases.

76.Given the above, I agree with Yeung’s submission (as per Paragraph 35(2)i above) that Au has to account for the net rental income for 226 St Davids Square in relation to the period for which he owned that property. In being robust and applying rough and ready justice to the evidence before me (including by use of Au’s own figure for monthly rental as stated within Au’s Income Statement, and his failure to identify or quantify any rental expenses), and given the discussion at Paragraph 50(2) above which applies here mutatis mutandi:

(1)  Yeung is entitled to an account from Au for a proportionate amount of such net rental. The relevant proportion is 3% thereof, as GBP10,000 (Item 12 of AKKR-60) is approximately 3% of the GBP349,950 purchase price of 226 St Davids Square, and as the suggestion in Yeung Closing Attachment A that Items 6 and 7 are only related to unused residuals/Total Unused Residuals does not appear to justify such amounts being applied toward calculating the proportional share of 226 St Davids rent for which Au must account.

(2)  As I accept and find on the evidence before me that the net rental received from 226 St Davids Square is GBP81,400 or HK$976,800, the total net rental proceeds that Au must account to Yeung for in relation to 226 St Davids Square (ie a component of Paragraph 35(2)i above) is therefore GBP2,326 or HK$27,913. As mentioned, Items 6 and 7 of AKKR-60 are considered to be related to 226 St Davids Square and have been incorporated as part of Yeung’s calculations for Total Unused Residuals.

Item 13 of AKKR-60 and 275 St Davids Square

77.Item 13 of AKKR-60 was a Remittance of GBP50,000 on 8 June 2001. Yeung’s initial case, which Au responded to and denied in inter alia Au 8, was that this Item was used for Au’s purchase of a property known in the proceedings as 26 Hunsbury Close. However, on Day 5 of the account-taking exercise, and in the process of being cross-examined on 128/63 Red Square, Au mentioned 275 St Davids Square as being a property purchased by Eric, along with some information on it. After considering further information relating to 26 Hunsbury Close, and carrying out some searches in relation to 275 St Davids Square, Yeung eventually re-amended this aspect of his case and in the form of the Re- Amended Notices of Objection alleged that Item 13 of AKKR-60 had been applied by Au for the purchase, in the name of Eric, of 275 St Davids Square (and not 26 Hunsbury Close), and that Au should account for such as part of the exercise. Further affirmation evidence relating to such was hence set out in Yeung 4 and 5, and in Au 9 and 10.

78.Au’s overall case throughout in relation to Item 13 of AKKR- 60, as reflected in the relevant worksheet and his affirmation evidence, was that this sum was transferred to Howes Percival Solicitors for the purchase of 1-2 Lorenzo Street, and that such (it was said in Au 10) fitted the timeline of such purchase, with reference to Paragraphs 146, 184-13 and 191 of the Liability Judgment. In Au’s affirmations he also said that there was no linkage between Item 13 of AKKR-60 to the purchase of either (as initially claimed by Yeung) 26 Hunsbury Close, or (as later claimed by Yeung) 275 St Davids Square.

79.The worksheet for Item 13 of AKKR-60 stated in relation to the Name and Address of the vendor: “no know, details should be in the file of the dissolved company, namely M.A.Y. Partnership, unfortunately I do not hold any record of this company except copy of this company’s Nominal Ledger dated 07/02/2005”. There was no answer to the questions below in the worksheet. While no documents were attached to the worksheet, in cross-examination on Day 4 of the account-taking exercise, Au agreed that the ledger referred to was the February 2005 Nominal Ledger within the documents attached to Item 27 of AKKR-60[85], both of which Items Au claimed in their respective worksheets were received in the “MAY Partnership bank account at HSBC Oxford Circus” as a “Loan from [Yeung] as shown in MAY Partnership’s book ledger”, and whereby Item 28 was said to relate to the purchase of 1-2 Lorenzo Street, London.

80.While there is more to be said on MAY Partnership below, and yet further to what was observed by her Ladyship in the Liability Judgment at inter alia Paragraphs 10(b) and 90(d), I mention here in relation to such that:

(1)  Page 1 of another nominal ledger, apparently dated 16 March 2005 (“March 2005 Nominal Ledger”) was also attached to Au’s worksheet on Item 26 of AKKR-60 in relation to which it was described as “the book ledger of MAY Partnership” (the February and March 2005 Nominal Ledgers are hereinafter the “The Nominal Ledgers”);

(2)  As Au agreed in cross-examination, the Nominal Ledgers both seemed to indicate that they related to “THE MAY PARTNERSHIP”, and did not reference any other entity with a similar name or permutations thereof;

(3)  Prior to and during the liability trial, and hence closer to the material time, Au had apparently claimed that MAY Partnership was a partnership and was not a limited company, and had thereby explained that that was why no such audited accounts had been disclosed[86]. Moreover, and as clarified by Mr Lau for Yeung, only annual accounts and management accounts had been produced at the liability trial[87] (not audited accounts as would normally be required of a limited company). However, before me, Au insisted that MAY Partnership was a limited company whose exact name he could not remember and which he gave various possible permutations thereof. Yet none of the names he gave were evident from the documents produced [88] , save for perhaps “May Property Investment” which (as her Ladyship found and defined as “MAY Property” which definition I use herein, in inter alia Paragraphs 15, 152, and 156 of the Liability Judgment) would have referred to the company that had been used to purchase certain of the PIA Properties, and in relation to all of which Au before me claimed (contrary to Liability Judgment Paragraphs 15, 152, 156) had not been purchased by a limited company but only in Yeung’s name; and

(4)  Although Au bore the burden to give proper, complete, and accurate accounts, and while I will below, where and when necessary, consider and analyse Au’s explanations to explain the aforesaid and the following, I did not have from Au any documentation (including any accounts, audited accounts, or purchase/transfer information including pricing) other than the Nominal Ledgers and some transfer slips, in relation to MAY Partnership or indeed the purchase or handling of 1-2 Lorenzo Street. This was notwithstanding her Ladyship’s caveat in Paragraph 302 of the Liability Judgment, with regard to the relevant conclusions in Paragraph 301 and 302 thereof, namely:

“301. … [Yeung’s counsel at the time] must be right in saying the investments in 1-2 Lorenzo Street had been closed/settled by arms-length negotiated sale under legal advice and awareness of outstanding issues, and could not therefore be re-opened.

302. … But an order for accounts/enquiries is a discretionary remedy, and such unfettered discretion must be exercised by taking into account all circumstances. In my view, the discretion must be exercised against ordering accounts in respect of the investments in 1-2 Lorenzo Street subject to the following caveat: if in the course of giving proper accounts of the Property Investment (other than 1-2 Lorenzo Street) and Lloyds Account explanations as to investments, fund-flows, operations and acts/dealings concerning 1-2 Lorenzo Street (which was formerly part of the Property Investment) were necessary to give intelligent explanation and meaningful understanding to such proper accounts to be given by Au, then Au cannot shelter behind the above conclusion to circumvent disclosure/account of necessary matters in respect of 1-2 Lorenzo Street in order to give proper accounts.” (emphasis added)

81.As for Au’s case that there was no link between Item 13 and Eric’s purchase of 275 St Davids Square, Au’s written and oral evidence before me was that such had simply been purchased by Eric using his own funds, and that Eric had paid the deposit(s) and all general subsequent mortgage repayments himself, Au had not funded any part of the purchase, and had never used any money originating from Yeung in such. He said that his only involvement with that property was when he helped Eric pay off the outstanding balance of the mortgage between 2008 and 2010 with profits that Au had made from “M.A. (HK) Limited” (namely MA-HK, which was the 1^st Plaintiff in these proceedings until its claim was discontinued on 6 May 2015), and sought to explain his earlier comments on Eric’s ability to purchase the “modest” property. In Au 10 he had also exhibited some documents in relation to the purchase and letting out of 275 St Davids Square, and said that there was no evidence to link Item 13 with the property “apart from the fact that they happened to take place in the same month” (which appears to be a typographical error since Item 13 was transferred in June 2001 whereas 275 St Davids Square was purchased in August 2001). I address other features below. In Au’s June Closing he simply said that he had reported all details to the court and had nothing to add.

82.There is no dispute that 275 St Davids Square was purchased in Eric’s name on 16 June 2001 for GBP124,950 [89] . It was also not disputed that it had been sold in or around 26 September 2025, and that it was also rented out for a period prior to such transfer. Au’s evidence on Day 8 of the account-taking exercise was that it was sold for around GBP330,000[90], which figure I shall use.

83.For the following reasons, I find that Au has not discharged his burden under the January 2018 Order to give an account of Remittance Item 13 of AKKR-60, and I also find that such Item had been applied by Au for the purchase of 275 St Davids Square.

84.Firstly, I do not accept Au’s account that Item 13 of AKKR- 60 could be and was linked to the purchase of 1-2 Lorenzo Street, including by way of (as Au claimed in cross-examination) Item 6 of the February 2005 Nominal Ledger:

(1)  In Au’s cross-examination he claimed that he did not have any proof that such had been transferred to the HSBC account of MAY Partnership, but he thought it was highly likely that when he filled in the worksheet, that he had seen the GBP50,000 booked in the relevant ledger and reviewed the latter before filling it in. He then spent approximately 2 minutes looking through the bundles for the relevant ledger, and claimed that the relevant item was Item 6 (comprising GBP50,000) of the February 2005 Nominal Ledger.

(2)  However, not only was the latter document not attached to the worksheet for Item 13 of AKKR-60 (even though as per Paragraph 79 above it had been mentioned in its body), but Item 13 of AKKR-60 had been paid to Howes Percival, and not to MAY Partnership, in June 2001 while Item 6 of the February 2005 Nominal Ledger reflected a payment by Yeung to MAY Partnership on 18 February 2003, some 18 months later.

(3)  Au then claimed that although he had relevant documentation before him when he filled in the worksheet, he could not recall why he had filled it in that way. He also could not explain the details as to why, if 1-2 Lorenzo Street was purchased in 2002, Item 13 from 8 June 2001 (which went to Howes Percival) was intended to purchase that property. Indeed, Au ultimately admitted[91] that it was not possible for 1-2 Lorenzo Street to have been purchased in 2000 or 2001 as he had earlier claimed, and that rather it should have only been purchased after April 2002. That year and timing is also consistent with her Ladyship’s observation on the evidence at Paragraph 10(b) and 90(d) of the Liability Judgment, namely: “MAY Partnership was established in 2002 for purchase of 1- 2 Lorenzo Street (which was a significant investment costing about HK$20,000,000 that was funded by Yeung)”.

(4)  Au also admitted that there was no supporting documentation for the entries in the Nominal Ledgers – which were the only documents produced by Au allegedly of MAY Partnership/1- 2 Lorenzo Street including relation to how funds were allocated amongst the Three in relation to such. Before me, Au sought to excuse his lack of access to other underlying documentation of MAY Partnership (and hence relating to 1- 2 Lorenzo Street) on the bases that it was Marchant (and not Au) who had always managed MAY Partnership, that Maher had always managed the accounts and that the latter had such had been allegedly dissolved or liquidated in 2006 since apparently either it and/or 1-2 Lorenzo Street had been sold to Marchant and his brother (“Marchant Brothers”)[92], and that he did not know who were the receivers or liquidators of MAY Partnership (or even if any were appointed), which made it impossible to retrieve any documents relating to 1-2 Lorenzo Street. He also sought to distance himself from having any authority or knowledge of operations over MAY Partnership’s HSBC Account, and claimed that Maher (who he said had compiled the Nominal Ledgers based on underlying documentation) had not responded to his voicemail asking for help, information, and documents. He then eventually said that he had then contacted Marchant to ask for evidence to present to the court, including supporting documents, but Marchant simply told him that he could not help Au with his inquiries, which Au accepted even though he knew of her Ladyship’s requirement that he account for all documents. He similarly said that he was unable to explain the contents of the Nominal Ledgers due to the aforesaid reasons. He admitted that he could have asked Maher (who should have known everything) for more information and documents on MAY Partnership when he was tasked with answering interrogatories in 2013, but he could not remember whether he asked Maher in relation to Interrogatory No 1(b)[93], and that when he asked Maher in relation to Interrogatories 6(a) and (b)[94] , Maher had apparently told him that such documents could not be retrieved.

(5)  However, and even putting aside his unconvincing attempts to resile from his previous stances [95] on the nature of MAY Partnership and MAY Property (see Paragraph 80, and in particular 80(3) above):

i.  None of the claims as to his difficulties in the aforesaid subparagraph (including of attempts to contact Maher and/or Marchant), or indeed as to Au’s General Reasons as applied to here, were supported by any documentary, let alone contemporaneous documentary, evidence. Nor was there any evidence on oath from Maher, or Marchant, to confirm or support such, let alone to explain the contents of the Nominal Ledgers (let alone how if at all those related to Item 13 of AKKR-60) or how the HSBC Bank Account of MAY Partnership was operated and why.

ii.  I do not accept as substantiated (or for that matter, credible) his attempt to resile from his statement, made on oath in his 4^th Affirmation in 2013 prior to the liability trial and again much closer to the material time, that he was in control of MAY Partnership’s HSBC bank account, and to distance himself from its operations and control[96]. This is particularly so when he had earlier admitted in his oral evidence at the liability trial that it was “very likely” that he was a signatory and at the time had apparently only had felt that Marchant should be one of the authorised signatories[97]. Moreover, and while Maher may have assisted in operating the MAY Partnership HSBC account, it is inherently likely that Au had every reason to be aware of – and the ability to inquire into and decide – its underlying operations, given the nature of the 1-2 Lorenzo Street investment which was indisputably the largest single investment operated by the Three, his bilingual abilities and the language limitations of the other two members of the Three and Maher, when he was clearly in the United Kingdom for a significant amount of time from 2002 onward[98], and when he accepted that he was responsible for MAY Partnership accounts[99].

iii.  Such awareness and ability was also reflected in how he himself had handwritten certain detailed sums up to 2 decimal places on the March 2005 Nominal Ledger in relation to “Loss” and “Net Loss” of not just himself but also Marchant, which he admitted on Day 4 had to do with dealings between the both of them, and which clearly related to the MAY Partnership and 1-2 Lorenzo Street. The position is a fortiori given Au’s admission on Day 6 that he had instructed Maher to effect the transfer of GBP115,000 from Yeung’s contribution toward Au’s contribution, as apparently reflected in both Nominal Ledgers.

iv.  It is also inherently likely that Au would also have been aware of, and concerned with, the details by the time of the negotiations to buy out Au’s share of MAY Partnership.

(6)  In any event, even if there really were evidential difficulties as claimed by Au due to the alleged dissolution/liquidation of MAY Property and the associated lapse of time and difficulty with getting information from third parties (ie Au’s General Reasons, including as applied to Maher and Marchant), it is clear and I find that such stem from the fact that Au had sought, as recorded in the Liability Judgment, to stall Yeung’s inquiries made prior to the problematic and incomplete 2006 Accounts, and by providing problematic and incomplete accounts (including in relation to 1-2 Lorenzo Street/MAY Property). Indeed and further to the observations on Paragraph 45 above (and its subparagraphs), on the evidence before me – including his evidence on Day 4 – Au could have made, but chose not to make, all relevant inquiries and to give Yeung a proper, complete, and accurate account at the time, including by way of relevant information and documents as to 1-2 Lorenzo Street/MAY Property, but did not do so and instead acted as observed by her Ladyship findings in Sections XII and XIII (in particular Paragraph 270) of the Liability Judgment, and as I have set out at Paragraph 45 above.

(7)  It is therefore entirely appropriate for me to, and I do, apply the approach in Libertarian, supra at §§138, 174 such that he cannot rely on the alleged subsequent inability to access information and documents including from third-parties due to lapse of time (ie Au’s General Reasons), including in particular insofar as such claims relate to the alleged dissolution/liquidation of MAY Property in 2006, as a basis for his failure to provide a cogent account, and to find or access supporting documentation in support of his alleged account for Item 13 of AKKR-60 (ie that such was related to 1-2 Lorenzo Street). I consider it appropriate to and do apply such approach on the facts of this case, given that:

i.  As I have mentioned above, there was clearly a material failure to properly account at the relevant time in relation to 1-2 Lorenzo Street (and hence MAY Partnership), notwithstanding that such was later settled; and

ii.  The Liability Judgment contained her Ladyship’s caveat at Liability Judgment Paragraph 302, which when read objectively, holistically, and in context with Paragraph 301 and alongside the January 2018 Order, could only mean that if it were Au’s case that Item 13 of AKKR-60 (or indeed any other item) had been settled by way of 1-2 Lorenzo Street, then he had to disclose/account for necessary matters and documents in relation to and in support of such, notwithstanding that such had been settled. A fortiori when Item 13 itself was an Admitted Item (ie one that Au had admitted concerned the Property Investment).

(8)  I do not see that Au’s case is materially assisted by the fact that he had earlier claimed in the liability trial that Item 13 of AKKR-60 was used to purchase 1-2 Lorenzo Street, or indeed that the journal entry in the documents referred to “MAY Property Investment”[100]. While the former may be said to be consistent with Au’s case from the start, the issue is still one to be determined within the scope of the present exercise, including by application of relevant principles such as those in Libertarian, supra. In that regard, and as for the journal entry, in the circumstances (and regardless of whether the approach from Libertarian applies) I find it is on balance more consistent with the name of the corporate entity MAY Property, as defined and found to exist in the Liability Judgment and which had bought some of the PIA Properties (including 127 Red Square on 2 November 2001, only a few months after Item 13 was transferred in June 2001), and indeed a similar journal entry was used in relation to Items 19, 20, and 21 which on Au’s own admission were used to purchase the PIA Properties 127 Red Square and G1.6 & J1.7 Deptford[101]. There are also the other matters relating to the timing of Item 13 (as opposed to the establishment of MAY Partnership and the purchase of 1-2 Lorenzo Street) discussed above.

(9)  I do not regard as credible, and I reject (regardless of whether I apply the approach in Libertarian, supra), Au’s belated and garbled attempt on Day 8 to orally suggest that Item 13 was linked to 1-2 Lorenzo Street on the basis that time was needed to renovate 1-2 Lorenzo Street, hence it should have been purchased and/or MAY Partnership (for the purpose of holding it) had been established prior to 2002. Not only does such claim contradict the findings in the Liability Judgment, but there is no detail, let alone any documentary or contemporaneous documentary evidence, to credibly suggest that these renovations and such purchase took place in 2001, or even prior to 2002, and could have founded the relevant link.

(10)  Given the above, there is therefore, and holistically, insufficient material to enable Yeung to understand the movements and use of Item 13 of AKKR-60.

85.Secondly, on the evidence I consider that Yeung has established his objection to Au’s account, and that Item 13 of AKKR-60 was linked to and used for the purchase of 275 St Davids Square in Eric’s name on 16 August 2001:

(1)  Further to Au’s evidence on the topic which I have summarised above, Au claimed in his evidence that Eric had since graduating in 1997 earned, for 3 years, some GBP1,300 to GBP1,400 per month, which had due to a change to freelance status, increased to GBP5,000 per month by 2000, and that Eric had used rental from 275 St Davids Square as part of his ability to pay off the mortgage. However, other than certain rental documents between 2017 to 2022 produced in Au 10[102] demonstrating that over that period the property had paid out a rental income of GBP1,400 per month (“275 Rental Documents”), no documents were produced by Au to support such claims, although Au produced 2 cheques issued by Eric in June 1999 (when Eric’s monthly income was, on Au’s oral evidence, apparently much lower) to cover a deposit and search fees totalling GBP11,640, and some purchase and mortgage documents addressed to Eric with which I will deal with in more detail below.

(2)  Au’s evidence before me was also that Eric had purchased, nearly 2 months later in or around late October 2001, a property in Red Square, which turned out to be 128/63 Red Square. While I will also deal with that property and Item 20 of AKKR-60 in more detail below, at this point I mention that:

i.  Au was aware (consistent with his testimony as recorded in liability trial transcript p 531-532 and Paragraph 176(g) Liability Judgment) and agreed that such downpayment for Eric’s Red Square property, which property he said at the liability trial he had “bought it for [Eric]”, had possibly come out of Yeung’s Remittances as deployed by Au. He explained on Day 8 that he had reached this conclusion as he had no evidence to prove where the money came from.

ii.  From at least the time of the original Notice of Objection, it was clearly Yeung’s case that an account of Item 20 of AKKR-60 would be linked to a unit in Red Square other than 127 Red Square (which was purchased by the Three under the PIA). In Au 6 and 8, Au merely relied on Au’s General Reasons for being unable to produce further information and documents. However, after Au orally clarified on Day 5 onward that the number of Eric’s unit in Red Square was either 126 or 128, he was in Au 10 able to produce documentation that he had obtained from Eric from 2017 to 2022 demonstrating that 128/63 Red Square had been let out by Eric over that period for GBP1,700 per month (“128/63 Rental Documents”), and other purchase and mortgage documents addressed to Eric relating to 128/63 Red Square, which I will deal with in more detail below.

(3)  Au said that the reason he was able to produce the 275 Rental Documents and the 128/63 Rental Documents (and, presumably, other mortgage and purchase documents relating to both properties) was because Eric – who was all along generally aware of Yeung’s litigation – had given them to him after Au had explained in or around April/May 2025 (ie after Day 5, but before the hearing of Yeung’s application to amend) that Yeung’s case was that both properties were purchased with Yeung’s money, and that Au had to provide the Court with documents relating to both properties.

(4)  The mortgage and purchase documents relating to 275 St Davids Square[103] do seem to indicate that Eric had, in 1999 (at 25 years old, and 2 years after he had graduated), written 2 cheques apparently ordering his bank to pay a sum (which included a deposit) of some GBP11,645 toward the purchase of the property, and that by August 2001 such amount had been received by his solicitors, Eric had signed a direct debit form sent to the mortgagee (which did not indicate the amount to be paid per month), and that the mortgagee had approved such a mortgage in Eric’s name. However, there is nothing in the documents to explain and set out Eric’s underlying assets, his sources and amount of income, and on what basis he was apparently adjudged to be able to service the mortgage, or indeed how and whether it was in fact Eric who had paid (purely out of his own funds) the sum of around 8 months of his salary in 1999. There is also no documentary evidence that the mortgage, if it was in fact granted and proceeded with, was ever actually serviced (let alone discharged) by Eric, and if so how, and out of what income and/or resources of his.

(5)  As for the mortgage and purchase documents relating to 128/63 Red Square [104] , those do seem to indicate that a mortgage was obtained, from another provider (Mortgage Express), in Eric’s name by August 2001. However, there is still nothing in the documents that explains and sets out Eric’s underlying assets, his sources and amount of income, and on what basis he was apparently adjudged to be able to service the mortgage. While the documents also indicated that it was partly serviced over the following 6 months, this was apparently by way of payment of interest only, and there is also no documentary evidence as to whether this was serviced by Eric, and if so of what income and/or resources of his.

(6)  Au admitted under cross-examination that he had not asked Eric for documentation to support his claims as to Eric’s income, including his alleged ability to service the mortgages for each property, and that Eric himself had actually so serviced and paid such out of his income and resources (including any alleged rental proceeds). He said this was because he had thought it was Eric’s income and whether he asked Eric to provide such or not was his right, that he had not apparently thought it was necessary to do so at the time, and that he had not thought about whether a person so young such as Eric would have the means to buy such an expensive house and pay such a large sum. He also mentioned that Eric had also been on holiday at the time Au 10 was being prepared.

(7)  Even if such admission is true, I do not find it to be a good explanation or excuse, and I do not see why I should therefore give such undocumented and unsupported claims any weight. After all, Au must have been aware, given the matters set out at Paragraph 45 above (and its subparagraphs) and the added context of the January 2018 Order and the account-taking exercise as a whole (which included the nature and content of Mr Lau’s cross-examination prior to Au 9), of the importance of producing documentation to support his factual claims, particularly those whereby he claimed that Yeung’s funds had not been used to purchase property, and/or that the funds for purchase had come from other sources. Moreover, Au was assisted in relation to the creation of Au 9 and Au 10, and prior thereto had been previously cross-examined in detail on the need to produce and importance of producing source documents to support his allegations and account.

(8)  I therefore do not see that I can accord any meaningful weight on Au’s claims as to Eric’s income, and Eric’s financial ability out of such, to purchase and fully service the financial obligations (and that he had himself serviced those) relating to 275 St Davids Square and 128/63 Red Square, and in particular Au’s claim that 275 St Davids Square was fully purchased and financed by Eric out of his own resources, and without the use of Item 13 of AKKR-60[105].

(9)  On the contrary, the following factors clearly support Yeung’s case, namely: (i) Au’s tendency and behaviour as set out in the Liability Judgment, and my further findings of prior use as set out above, of Yeung’s Remittances to buy other properties including to gift such to his children; (ii) Au’s admission that he had later in 2001 used some unknown portion of Yeung’s Remittances to pay the downpayment for 128/63 Red Square in Eric’s name; and (iii) The fact that Eric had had, by August 2001, to come up with a total outlay (i.e. excluding the amount paid by mortgage) of GBP47,273.48[106] to complete the purchase, which is slightly less than the GBP50,000 that was earlier received in Item 13, which makes it inherently likely that Au would have used the latter to help Eric buy the property.

(10)  Given the aforesaid, I consider and find that Yeung applied Item 13 of AKKR-60 toward the purchase, in Eric’s name, of 275 St Davids Square. In doing so, I do not see that I need to apply the approach and principles set out in Libertarian, supra, §§138, 174. But if I had to consider doing so, I would and could have done so given my views in relation to the failure to account for 1-2 Lorenzo Street as above, including the status of Item 13 itself as an Admitted Item and as Au’s conduct which has clearly deprived the court of necessary evidence. I would also have had regard to the matters mentioned in Paragraph 45 (and its subparagraphs) above.

86.I note that Yeung had similar argued that Au had failed to provide documents to establish that Au had used any alleged profits from MA-HK (being the 1^st Plaintiff in these proceedings before its claim was discontinued) to help pay off the remainder of the mortgage of 275 St Davids Square, as well as 128/63 Red Square. However, given the way Yeung advanced his claim in relation to such, I understood that to be more of a forensic point, rather than a necessary element or part of either party’s case that I had to decide as part of the account-taking exercise, and in any event I was not referred to any documentary evidence of any such transfer(s) in relation to such mortgages (or in the case of 275 St Davids Square, an alleged mortgage).

87.As for Yeung’s case that Au should also account for Total Unused Residuals, I will use the actual apparent mortgage figure of GBP80,000 from Eric’s solicitor’s completion statement from August 2001[107]. I have also applied a costs of purchase of GBP2,687 by adding up the costs from the same document. That affects the relevant entries in Columns K, L, M, and Q of Yeung Closing Attachment A. The unused residual amount for Item 13 of AKKR-60 as applied to 275 St Davids Square GBP2,363 or HK$28,356. For reasons explained above, I will return to the issue of Total Unused Residuals later in this judgment.

88.Given the above, I agree with Yeung’s submission (as per Paragraph 35(2)i above) that Au has to account to Yeung for the net rental income for 275 St Davids Square in relation to the period for which he owned that property. In being robust and applying rough and ready justice to the evidence before me, including Mr Lau’s figures for rental and expenses canvassed in cross-examination and submission, and given the discussion at Paragraph 50(2) above which applies mutatis mutandi:

(1)  Yeung is entitled to an account from Au for a proportionate amount of such rental. The relevant proportion is 39%, as GBP50,000 (Item 13 of AKKR-60) is approximately 39% of the GBP124,950 purchase price + GBP2,687 costs of purchase of 275 St Davids Square.

(2)  As I accept and find on the evidence before me that the net rental received from 275 St Davids Square over the period is GBP251,160 or HK$3,013,920, the total net rental proceeds that Au must account to Yeung for in relation to 275 St Davids Square (ie a component of Paragraph 35(2)i above) is therefore GBP98,389 or HK$1,180,664.

Item 20 of AKKR-60 and 128/63 Red Square

89.It was Yeung’s case that this Item of the Remittances, being GBP141,000 transferred on 31 October 2001, had been applied by Au for the purchase of a property at Red Square which was held in Eric’s name, being one of Au’s Properties, and that Au should account for such as part of the exercise. While this had been previously mentioned in the Liability Judgment as being 126 Red Square[108], as I have mentioned, in the process of the account-taking it was evident and agreed that the relevant property was in fact 128/63 Red Square.

90.There is no dispute that 128/63 Red Square was purchased in Eric’s name for GBP189,950, with an originally scheduled completion date of 26 October 2001, and that while Eric had since owned and rented out such, he had also put such up for sale around the April 2025 portion of the account-taking exercise.

91.It was Au’s case, as set out in his worksheet and in his affirmations, that Item 20 of AKKR-60 had been used to pay for 127 Red Square as there had been a failure to secure a mortgage in relation to the purchase of that property (which also involved Item 19 of AKKR-60 being a GBP28,438.13 transfer on 22 October 2001, which worksheet had no attachment, but which Yeung accepted for the purpose of these proceedings related to the purchase of 127 Red Square[109] ), and that Item 20 hence covered the completion shortfall. There was no answer to the questions below “Name and address of the vendor:”, and the only document attached to the worksheet was a Completion Statement setting out that a mortgage had been obtained from United Bank of Kuwait in relation to the purchase of 127 Red Square (“United Bank of Kuwait Statement”), with some handwriting. He also relied in Au 8 on Au’s General Reasons in relation to both Items 19 and 20. In Au 10 he sought to rely on Paragraphs 184(20) of the Liability Judgment and the recorded contents of the journal entry and bank advice, arguing that Yeung’s case apparently suggested that Au had colluded with the solicitors.

92.As to whether it had been used to pay for 128/63 Red Square, as I have mentioned above, Au had said at the liability trial that he had probably purchased (but was not sure) the property for Eric with Yeung’s Remittances[110]. He also said in Au 9 and 10 that he might have paid all or part of the initial deposit for 128/63 Red Square as a gift for Eric and he was “not sure whether Yeung’s money was used in this connection”, and said before me that he had concluded that the downpayment for Eric’s Red Square property had possibly come out of Yeung’s money, as he had no evidence to prove where the money came from. However, he had also generally claimed in his affirmations that Eric had otherwise purchased 128/63 Red Square using his own money (including, he said, GBP20,000 on an unknown date and GBP19,749.31 on completion) and that Item 20 could not have been used to pay for 128/63 Red Square as completion took place before Item 20 was transferred, and that there was no evidence to link Item 20 with 128/63 Red Square “apart from the fact that they happened to take place in the same month”. As I have mentioned, Au was also able in Au 10 to produce some documents addressed to Eric relating to the purchase and mortgage of 128/63 Red Square, and the 128/63 Rental Documents. His affirmations also covered the purchase of four Red Square properties at the same time, the reason for such, and that he had also paid off the remainder of Eric’s mortgage using profits from MA-HK, which points were repeated in Au’s June Closing.

93.For the following reasons, I firstly do not accept Au’s account that Item 20 of AKKR-60 could be and was linked to the purchase of 127 Red Square, and secondly consider that Yeung has established his objection to Au’s account and that Item 20 of AKKR-60 was linked to and used for the purchase of 128/63 Red Square in Eric’s name:

(1)  In cross-examination, and upon being taken to the worksheet for Item 20 and the United Bank of Kuwait Statement, Au admitted that there had in fact been a mortgage arranged for the purchase of 127 Red Square (which was, of course, consistent with her Ladyship’s observation at Liability Judgment Paragraph 156A). He could not explain why he had hence claimed to the contrary, why he had asked Yeung to remit Item 20 of AKKR-60, or how that sum had been applied.

(2)  There was also no documentary proof adduced to support Au’s claim (whether in relation to Items 19 or 20 of AKKR-60) that the mortgage had fallen through. While in Item 19 he had simply said “unfortunately records of completion(sic) in both purchase & sale were found missing”, the only apparent explanation for this in his evidence was Au’s General Reasons.

(3)  While Au then admitted under cross-examination that it was possible that the GBP141,000 of Item 20 AKKR-60 could have been used to pay the downpayment for 128/63 Red Square, he later changed course and denied that it had been used to buy any of the four Red Square properties[111] and then claimed, again, that he needed more time to organise his thoughts and possibly identify further documents relating to 127 Red Square. However, no such further documents were identified.

(4)  Au eventually later conceded in cross-examination that he was not certain as to whether it was (as he had claimed in Au 10) impossible for Item 20 of AKKR-60 to have been used to purchase 128/63 Red Square, as he mentioned that it was possible that there was a slight delay due to several Red Square properties having been purchased around the time, and that as they knew that a sum of money was coming in, the situation was almost like there being a bridging loan.

(5)  While documents were later produced from Eric relating to 128/63 Red Square, including the 128/63 Rental Documents, I refer to my observations as set out at Paragraph 85 to 85(8) above on the context of such, and on Au’s allegations (and the lack of weight I accord to such) as to Eric’s income and ability to service such. I add that for 128/63 Red Square there was nothing to support the claim in Au 10 that the GBP20,000 that had been paid on some unknown date prior to October 2001 had come from Eric, and again no evidence that such had come from his resources and/or income.

(6)  In support of Yeung’s case are (i) Au’s own admissions and evidence at the liability trial as mentioned above[112]; and (ii) Au’s tendency and behaviour as set out in the Liability Judgment, and my findings of prior use as set out above (even excluding 275 St Davids Square from present consideration), of Yeung’s Remittances to buy other properties.

(7)  Given the above, the lack of documentation and evidence to support Au’s original written assertions and claims, and the matters at Paragraph 45 (and its subparagraphs) above, I consider that I am entitled to apply the principles in Libertarian, supra, as to the purpose and use of Item 20 of AKKR-60, and to hence ultimately conclude that the money was applied toward fulfilling Eric’s downpayment, and later to assist Eric’s discharge of the mortgage, of 128/63 Red Square. In particular and further to the above:

i.  For 128/63 Red Square Eric had had, by October 2021, to come up with a total outlay (ie excluding the amount paid by mortgage) of GBP36,387.25[113] , around two months after he had completed the purchase of 275 St Davids Square and there is no credible evidence to show that Eric had himself, and out of his own resources, covered the previous GBP20,000 or thereabouts. I therefore consider, having had regard to the principles in Libertarian, that it was inherently likely that Au would have used (and I find that he did use) Item 20 to help cover Eric’s downpayment.

ii.  I also find that Au applied the rest of Item 20 of AKKR- 60 toward settling the mortgage of 128/63 Red Square. After all, as I have mentioned, in the 6 months after its purchase the mortgage for 128/63 Red Square had only been serviced by payment of interest, and not principal, from an unknown source, and there is no documentary evidence that that was (or any subsequent payment(s) were) from Eric, or that he had the income/resources to service such. Nor is there any evidence to support Au’s allegation that he had subsequently used resources derived from MA-HK some years later to discharge the (unknown) remainder of the 128/63 Red Square mortgage. Moreover, in the portions of the Liability Judgment mentioned above, including at Paragraph 45 (and its subparagraphs) above, it was recorded in particular that such property had been purchased as a gift for Eric, and that Au had admitted subsequently Yeung’s monies to buy property for Erica[114].

iii.  I do not think that it materially assists Au that the journal entry specified 127 Red Square, given that there is no other documentation adduced to support such assertion, and given also the other matters above, including those mentioned at Paragraph 45 (and its subparagraphs) above, and in particular sub-(3) thereof. I do not agree with the claim in Au 10 that Yeung’s case relies on Yeung alleging and establishing collusion between Au and Howes Percival, the firm to which Item 20 of AKKR-60 had been transferred. After all, as can be seen from the Liability Judgment, Au’s view was that Yeung’s Remittances were opportunities he could use for his own purposes (including to gift properties to his children, feather his portfolio, and ease his cashflow) when he could not have afforded otherwise, with the vague hope that he would one day be able to repay Yeung. Hence it is inherently likely that he would have deployed Yeung’s Remittances to do so, particularly where the stated property in relation to a transfer would be unknown to Yeung who trusted Au. Indeed I assume and find, given the lack of supporting documentation and applying Libertarian, that this was what happened in relation to Item 20, particularly when it was Howes Percival, to whom Items 19 and 20 of AKKR-60 were transferred, who had apparently handled the purchase of at least both 127 and 128/63 Red Square, and when 4 properties were bought at once in the same development.

94.As for Yeung’s case that Au should also account for Total Unused Residuals, while I am still entitled to apply rough and ready justice, I will use the actual mortgage figure in the documents of GBP153,562l.75, rather than the 70% mortgage assumption. I have also applied a costs of purchase of GBP3,909 by adding up what appear to be the costs from Howes Percival’s Statement For Completion. That affects the relevant entries in Columns K, L, M, and Q of Yeung Closing Attachment A. The unused residual amount for Item 20 of AKKR-60 as applied to 128/63 Red Square produces a component sum of GBP 100,703 or HK$1,208,436. For reasons explained above, I will return to the issue of Total Unused Residuals later in this judgment.

95.Given the above, I agree with Yeung’s submission (as per Paragraph 35(2)i above) that Au has to account for the net rental income for 128/63 Red Square in relation to the period since it has been owned. In being robust and applying rough and ready justice to the evidence before me, including the figures for rental and expenses canvassed in cross- examination and submission, and given the discussion at Paragraph 50(2) above which applies here mutatis mutandi:

(1)  Yeung is entitled to an account from Au for a proportionate amount of such rental. The relevant proportion is 73%, as GBP141,000 (Item 20 of AKKR-60) is approximately 73% of the GBP124,950 purchase price + GBP3,909 purchase cost of 128/63 Red Square.

(2)  As I accept and find on the evidence before me that the net rental received, or that should have been received, from 128/63 Red Square over the period is GBP 291,720 or HK$3,500,640, the total net rental proceeds that Au must account to Yeung for in relation to 128/63 Red Square (ie a component of Paragraph 35(2)i above) is therefore GBP212,177 or HK$2,546,126.

Items 26, 27 and 28 of AKKR-60 and 429 St Davids Square

96.These concern the following transactions:

Item Number of AKKR-60	Amount of Remittance	Date of Remittance
26	GBP250,000	15 April 2002
27	GBP200,000	18 April 2002
28	GBP45,923	18 August 2002

97.In Au’s worksheets on these Items, he only answered the first two sets of details (i.e. up to “Reason for sum”), stating that they had all been transferred to the MAY Partnership HSBC bank account, and that they were “Loan from [Yeung]” as shown in the Nominal Ledgers of MAY Partership. Those, Nominal Ledgers were along with some banking forms documents relating to each transaction [115] , were the only documents attached to the worksheets.

98.Yeung was dissatisfied with this answer and, after having carried out various land searches, advanced a case that these Items had been applied by Au for the purchase of 429 St Davids Square (one of Au’s Properties as recorded in the Liability Judgment), and that Au should account for such as part of the exercise at the UK stage, with which this section of my judgment is concerned.

99.There is no dispute that 429 St Davids Square was purchased in Au’s and Paula’s names on 6 December 2002 for GBP670,000. and was sold on 4 May 2011 for GBP890,000. It was not rented out during the period as it was used as Au’s and Paula’s private residence, their having moved to it from 226 St Davids Square.

100.In response, Au said in Au 8 that he was the least rich of the Three, and not that he had no money at the time, but that 429 St Davids Square was purchased as his family’s residence, the purchase was “solely funded by my family and me using the profits we had made from our property investments” and hence it was not part of the PIA Properties (and hence, implicitly, also the Property Investment). He accused Yeung of baselessly linking it to the transfers and therefore said he saw no reason to disclose details about 429 St Davids Square, let alone profits or rental income, but did not otherwise challenge the land search records obtained by Yeung. As I have mentioned, he agreed in cross-examination on 429 St Davids Square that he would generally purchase property with a 70% mortgage. I will deal further with his evidence in cross-examination below, as well as his claims in Au’s June Closing.

101.For the following reasons, I firstly do not accept that Au has discharged his burden under the January 2018 Order to give an account of Remittance Item 13 of AKKR-60, and I am entitled to (and do) find that such Items had been applied by Au toward the purchase of 429 St Davids Square.

(1)  The starting point is that as her Ladyship recorded, Au’s Properties (including 429 St Davids Square) were purchased using Yeung’s Remittances, and that Au took the Remittances as felicitious opportunities applied toward inter alia moving house to 429 Capital Wharf, and indeed that in Paragraph 176(f) of the Liability Judgment, “Au confessed he could not have afforded the purchase price, and used Yeung’s Remittance(s) for the purchase”. It is and was in that context that the January 2018 Order was made giving rise to the scope and nature of Au’s obligations to account for inter alia such. Au was also clearly aware of such matters.

(2)  Yet Au did not identify which Items of Yeung’s Remittances were used to purchase 429 St Davids Square. Instead, as mentioned above, he in his written evidence (which position was roughly reiterated in Au’s June Closing) said that 429 St Davids Square (purchased in December 2002, which I and the parties have assumed was with the assistance of a 70% mortgage) was “solely funded by my family and me using the profits we had made from our property investments”. This is obviously entirely inconsistent with the contents of the Liability Judgment, including his confession before her Ladyship, yet in Au’s evidence he did not even attempt to explain such inconsistency.

(3)  In any event, and despite her Ladyship’s findings and his obligations under the January 2018 Order, he has never outlined or identified the source of such alleged “profits” and how and what such were used to purchase such, even though (as this was Au’s and Paula’s residence) Au would therefore have had documents relating to 429 St Davids Square in Au’s Residence File.

(4)  Moreover, on Day 4, Au made the further and inconsistent claim that Yeung had loaned him an unknown portion of the funds to pay for 429 St Davids Square because Au did not (as he agreed had been found in the Liability Judgment) have enough sufficient funds to buy the property at the time. While there was no promissory note or relevant loan agreement, he claimed that if there were such sum there would either be a wire transfer document for the law firm stating that it was for the purchase of 429 St Davids, or a cheque from the Lloyds Account with the payee clearly specified on the cheque which would have been explained in AKKR-61. However no such document was ever produced to support this claim, which is in any event inherently improbable given, and inconsistent with, the analysis and findings set out at eg Paragraphs 165, 171, 176(f), and 199 of the Liability Judgment. I therefore reject such allegation, and in doing so find that I am entitled to (and do) apply the principles in Libertarian, supra.

(5)  In relation to Au’s claim that Items 26, 27, and 28 of AKKR- 60 were used to purchase 1-2 Lorenzo Street, I refer to my observations recorded in relation to such in the various sub- paragraphs of Paragraphs 45 (and its subparagraphs) and 84 above, and further to such add that:

i.  There is no documentation other than the Nominal Ledgers to establish how much money was actually involved in the purchase and alleged renovation of 1-2 Lorenzo Street, even though as far as could be understood from the papers before me, it was Au’s case that some GBP690,923 of the Remittances [116] (although given my findings as to Item 13 there could only be GBP640,923) and GBP360,000 from the Lloyds Account[117] were Yeung’s contributions in his name towards 1-2 Lorenzo Street/MAY Partnership, which purchase had allegedly cost GBP1,2750,000.

ii.  In any case, I do not accept that the journal entries and transfer instructions/records for these Items which refer to MAY Partnership, or the contents of the Nominal Ledgers, materially assist or establish Au’s claim that they were applied toward MAY Partnership/Lorenzo Street and he has hence accounted for such Items. I cannot discern how the Nominal Ledgers demonstrate any link between Item 28 of AKKR-60 and MAY Partnership. As for the underlying documentation wherein a purpose was apparently stated for the transfer (i.e. apart from the Nominal Ledgers) I accord that no material weight (a) Given the aforesaid subparagraphs, and the matters set out in Paragraphs 45 (and its sub- paragraphs) and the portions of Partnership 84 above relating to 1-2 Lorenzo Street/MAY; (b) Given that Au’s view was that Yeung’s Remittances were opportunities he could use for his own purposes (including to move to 429 St Davids Square) when he could not have afforded otherwise, with the vague hope that he would one day be able to repay Yeung, making it inherently likely that he would have dipped into Yeung’s Remittances for doing so, particularly where the stated property in relation to a transfer would be unknown to Yeung[118]; and (c) When at the time, and including the time of preparation of the Nominal Ledgers (which Au accepted was in around 2005 or so), Au had the motive to conceal the use of Yeung’s Remittances for his own purposes and toward the purchase of Au’s Properties.

(6)  In the aforesaid circumstances, I have therefore applied the principles in Libertarian, supra, and accept Yeung’s case that Au had applied Items 26, 27, and 28 of AKKR-60 (being Yeung’s Remittances) toward, and in order to meet payment obligations in relation to, the purchase of 429 St Davids Square. Indeed, and given the nature of the numerous transactions, purchases, and apparent returns in question, and the lack of documentation from Au (due to his own wrongdoing) to support his claims, this is an obvious situation where rough and ready justice should be applied.

102.As it was Yeung’s case that the relevant proceeds of sale and rental income from 72 Capital Wharf and 429 St Davids Square are clearly linked to and should be traced into the purchases of Coastal Skyline in 2015 by Erica, and of the B29 Workshop in 2016 by Paula, I will deal with those below before setting out the ultimate order to be made. However on the evidence before me and while I am entitled to take a robust approach including to make presumptions, it is prudent for me to set out at this point that I will use the 70% mortgage figure, and have not provided for any costs of purchase or sale as there was no evidence before me of such figures, and that given the discussion at Paragraph 50(2) above which applies here mutatis mutandi, Yeung is entitled to remedies that reflect a proportionate share of any figures relevant to the tracing exercise.

103.As for Yeung’s case that Au should also account for Total Unused Residuals, Items 26, 27 and 28 of AKKR-60 produce a component sum of GBP294,923 or HK$3,539,073. I will return to the issue of Total Unused Residuals after I have dealt with the present exercise in relation to all of the Items within AKKR-60 and -61 that I find are relevant to property purchases.

Item 29 of AKKR-60, Item 71 of AKKR-61, and 49 Radford Road

104.As recorded in the Liability Judgment, including Paragraph 176(h) and 241, one of Au’s Properties was a property in Exeter which Au said that he had bought, mortgage-free, for Erica out of Cheque 17 for GBP90,000 (ie Item 71 of AKKR-61 dated 16 June 2003) issued out of the Lloyds Account, which withdrawal he had not told Yeung about. It was purchased without a mortgage as Erica was a junior architect and was ineligible to apply for a mortgage due to her limited income. Also, the bulk of the Lloyds Account was Yeung’s Refund and hence Yeung’s personal monies.

105.There is no dispute that Erica and her husband[119] purchased 49 Radford Road on 4 July 2003 for GBP143,000 and its ownership not changed since. Yeung did not dispute that Erica had moved out in around 2009, after which it was rented out.

106.In relation to Item 71 of AKKR-61, Au in his worksheet and his details report claimed it had been paid to Erica at 49 Radford Road out of Au’s current account as a present from him, and stated that it was not in connection with the mortgage of a property. There was no answer to the questions from “DETAILS OF PROPERTY” onward and no documents were attached thereto. In relation to Item 29 of AKKR-60 (which was an Admitted Item, as recorded in the Liability Judgment), in his worksheet he answered only the first two questions by saying that it had been applied toward MAY Partnership, and attached only a transaction record, and the February 2005 Nominal Ledger.

107.Yeung then found and exhibited relevant search records indicating the aforesaid purchase of 49 Radford Road, and advanced a case that these two Items had been applied toward the purchase of 49 Radford Road.

108.Au did not challenge the land search records obtained by Yeung, but in Au 6 maintained in relation to those Items that (i) 49 Radford Road was “solely a property investment made by Erica” and her husband; (ii) Item 29 of AKKR-60 had nothing to do with such; and (iii) Item 71 of AKKR-61 had been applied toward “the initial down payment” of 49 Radford Road, while relying also on Au’s General Reasons. No further documents were exhibited thereto. In Au’s June Closing he essentially said that he had reported details to the court, had no other details to add, and had nothing to hide.

109.For the following reasons, I find that Au has not discharged his burden to give an account of Item 29 of AKKR-60 and Item 71 of AKKR-61, and I find that the said Items had been applied by Au toward the purchase of 49 Radford Road:

(1)  As Au admitted before me, and as consistent with his testimony before her Ladyship, 49 Radford Road was the subject property that he had purchased for Erica, without a mortgage for reasons of her inability to obtain one, such that the only option he had was to pay such in full. Indeed, he admitted on Day 6, shortly after the morning break, that Erica and her husband did not have enough resources of their own to purchase both 49 Radford Road and 42 Thornton Hill, and he had paid in full for the former while he had paid almost all of the money (around GBP375,000, which figure I shall adopt) for the latter. Moreover, there was no documentary evidence (including in the land search records) to suggest that a mortgage had been obtained in relation to its purchase. I reject the suggestion that Item 71 of AKKR-61 only covered the “initial down payment” of 49 Radford Road, and by implication any suggestion that the property was purchased with the help of a mortgage. It speaks very poorly of AU’s credibility and reliability that he saw fit to blithely make such an incorrect claim.

(2)  Au’s claim that he was entitled to draw Item 71 of AKKR-61 due to his alleged current account contradicts the findings in the Liability Judgment and stands to be rejected given that it is contrary to her Ladyship’s findings, including her finding as to the true Contra-Account Arrangement, her rejection of Au’s claim that the Contra-Account Arrangement or the Lloyds Contra-Account Arrangement applied to the Lloyds Account, and that Au had used Yeung’s Refund in the Lloyds Account, without permission, to purchase 49 Radford Road[120]. I also refer to the findings within the Liability Judgment regarding operation of the Lloyds Account, and my summary of the most important portions of within Paragraph 7 above. This reflects poorly on the reliability and accuracy of Au’s evidence and perceptions.

(3)  Although Item 71 of AKKR-61 was hence clearly used in connection with the purchase of 49 Radford Road, apart from providing Erica’s address as being the property at which it was received, it is quite unclear why Au thought he could, in his worksheet, claim that it was not a sum used in relation to purchase of property. He also failed to give substantial details in relation to such (including its actual purchase price, which Yeung had to find out from his searches in the UK), or indeed any supporting documentation in relation thereto

(4)  Further, since 49 Radford Road was purchased at GBP143,000 by Au without a mortgage and as a gift for Erica (as observed by her Ladyship), Item 71 of AKKR-61 was clearly insufficient on its own to cover such.

(5)  In the circumstances, I accept that Item 29 of AKKR-61 was therefore deployed by Au to cover the remaining amount of GBP53,000, not only for reasons I have set out at the above sub-paragraphs, but also given the matters set out at Paragraphs 45 (and its subparagraphs) and 84 above, and at Paragraphs 101(5)i to 102 above, which apply to 49 Radford Road as one of the properties which her Ladyship observed Au had gifted to Erica. In particular, I apply the entire sum of GBP110,000 to cover such GBP53,000, and the remaining GBP57,000 toward unused residuals resulting from such. I do so since while it was Ladyship’s finding that the bulk of the Lloyds Account was Yeung’s personal monies, Au (who is the wrongdoer and the accounting party) has not provided me with sufficient or indeed any information and evidence to establish that some or all of Item 29 of AKKR-61 should be carved out as monies to which Yeung is not entitled. Hence I am entitled to and do apply the principles in Libertarian, supra, to assume and find that all of this was Yeung’s personal monies given the absence of such evidence to the contrary, and to do rough and ready justice.

110.As for Yeung’s case that Au should also account for Total Unused Residuals, I accept that the component sum of unused residuals in relation to 49 Radford Road is the remaining GBP57,000 or HK$684,000 from Item 29 of AKKR-60. For reasons explained above, I will return to the issue of Total Unused Residuals later in this judgment.

111.Given the above, I agree with Yeung’s submission (as per Paragraph 35(2)i above) that Au has to account for the net rental income for 49 Radford Road since it has been owned. In being robust and applying rough and ready justice to the evidence before me, and since Au paid the entire purchase price of the property, I accept that Au should account for all of the relevant rental income which, on the evidence before me including figures canvassed in cross-examination are those set out in Yeung Closing Attachment A, namely GBP226,800 or HK$2,721,600.

Whether to trace from (i) The proceeds of 312 Listed Building (purchased using Item 11 of AKKR-60) to the 2005 purchase of Coastal Skyline, and the 2007 purchase of 402B Tolo Ridge; (ii) Items 43, 124, 154, 190, and 191 from AKKR-61 into the 2007 purchase of 402B Tolo Ridge; and (iii) Proceeds of 9 Onedin Point and 30 Shackleton into the 2008 purchase of 602A Tolo Ridge

112.The dates and purchase prices[121] of Coastal Skyline, 402B Tolo Ridge, and 602A Tolo Ridge can be found near the bottom of Yeung Closing Attachment A.

113.Firstly, and as will be apparent from Yeung Closing Attachment A, the total net proceeds received by Au in relation to 312 Listed Building (which was sold on 21 January 2003) were GBP 182,731 or HK$2,192,772.00.

114.In Au’s worksheet for Item 11 of AKKR-60 (which I have found was applied toward the purchase of 312 Listed Building), he had simply answered that the proceeds of sale went into his and Paula’s bank account, and had answered “No” in relation to the whereabouts of the proceeds and whether they went to other property. He orally said that due to the lapse of time he had forgotten the destination of the proceeds or sale from 312 Listed Building, but that to his knowledge it had not been put toward any property purchase. Au also could not explain how he had deployed the proceeds of sale of 312 Listed Building, although there is a period that had elapsed between the receipt of such proceeds in 2003 and the purchase of Coastal Skyline in July 2005.

115.Au’s evidence in Au 8 and Au 9 was that Coastal Skyline was his family residence as known from the start in these proceedings, it had been bought in 2005 using his own funds, and that no money from Yeung had ever been used to do so (either in 2005, or apparently 2015 when it was purchased with the help of Erica and which I will deal with later). However, no documents were attached in relation to the 2005 purchase, although Au 8 attached some in relation to the 2015 purchase, including as to the expenses thereof. Au also said in cross-examination that there was absolutely no link between the proceeds of 312 Listed Building and the purchase of Coastal Skyline.

116.However, Au is the wrongdoer in relation to the misuse of Yeung’s funds to buy Au’s Properties in the UK and to upgrade his and his family’s lifestyle (including as found in the Liability Judgment and above, by moving to various residences of Paula and himself). It is hence inherently probable that Au would have been tempted to use the fruits of Yeung’s funds/property investment (particularly when he saw them as funds to which he was entitled) to purchase Coastal Skyline as a Hong Kong residence for Paula and himself. A fortiori when Au gave evidence to the effect that he did not have any particularly expensive hobbies and was not particularly profligate as to his daily/monthly outgoings, hence making it inherently unlikely he would have thereby dissipated or frittered away the net proceeds of 312 Listed Building prior to the purchase of Coastal Skyline in 2005.

117.In that regard, the lack of any documentary evidence on what resources of Au (and how he obtained such) were used to fund the 2005 purchase is particularly unusual, given that it was his residence including after 2015, hence he should have had access to relevant documentation in Au’s Property File. Indeed, I did not understand Au to attempt to rely on Au’s General Reasons in relation to the 2005 or 2015 purchases of Coastal Skyline. Moreover, and as observed above, on the evidence Au had derived substantial profits or income (including from the purchase and sale of 312 Listed Building) from use of Yeung’s Remittances. I add that while in cross-examination Au said it was not possible that the purchase of Coastal Skyline was funded by the proceeds of 312 Listed Building, he had earlier, and shortly before the morning break on Day 8, said that it was possible (although he did not think) that the proceeds of 312 Listed Building had been used to (later) purchase 402B Tolo Ridge, which was also used as Au’s and Paula’s residence for a period in Hong Kong. Since he had admitted that proceeds from 2003 could be linked to a purchase in 2007, there is a fortiori a basis to link the 2003 proceeds with the chronologically closer 2005 purchase of Coastal Skyline.

118.Having considered the above, I find that I am also entitled to and do apply the principles from Libertarian, supra, to make assumptions and resolve evidential doubts against Au as the wrongdoer who has not put relevant evidence before the Court, in particular as to the use of the proceeds of 312 Listed Building and contrary to the requirements of the January 2018 Order. I accordingly find that there is sufficient evidence in the circumstances for me to find (which I do) a clear link between the proceeds of 312 Listed Building and the 2005 purchase of Coastal Skyline, and that the latter was purchased using the proceeds of 312 Listed Building.

119.Given the above, and applying the principles in Libertarian, supra, I therefore accept and find (as suggested by Yeung in Yeung’s Closing Attachment A) that Au had used the total net proceeds of GBP 182,731 or HK$2,192,772.00 to cover HK$1,122,000 (being the 30% of the 2005 purchase price of Coastal Skyline), leaving HK$1,070,772 which I deal with below. I will deal below with residuals and the amount of net rental for Coastal Skyline from 2005 to 2015.

120.Secondly, given the above, the question is what findings I should make given:

(1)  Au’s claims as to Items 43, 124, 154, 190, and 191 of AKKR- 61 (which totalled GBP 280,700.00 or HK$ 3,368,400.00) which were that he had accounted for them as being drawings on his current account and were not related to the purchase of property[122];

(2)  Whether Yeung has established a clear link between (i) the HK$1,070,772 from the sale of 312 Listed Building; and (ii) the same Items 43, 124, 154, 190, and 191 of AKKR-61; such that all such sums should be applied (as suggested in Yeung’s Closing Attachment A) toward the purchase of 402B Tolo Ridge, in contrast to Au’s case that its purchase was financed via the use of his profits from MA-HK and without the use of Yeung’s money (in relation to which Au exhibited certain documents to Au 8 and Au 9); and

(3)  Whether Yeung has established a clear link between the proceeds of 30 Shackleton and 9 Onedin Point such that they should be applied toward the purchase of 602A Tolo Ridge, in contrast to Au’s case that such purchase was financed in the same manner as 402B Tolo Ridge.

121.As to the issue at Paragraph 120(1) above, in his worksheets Au only gave such details up to “Was the sum in relation to purchases of property” and attached no supporting documentation. However, the claims within that Au was entitled to draw on such as part of his current account are impermissible and stands to be rejected given that contrary to her Ladyship’s findings, including her rejection of Au’s claim that the Contra- Account Arrangement or the Lloyds Lloyds Contra-Account Arrangement applied to the Lloyds Account[123]. I also do not see that Au’s reliance in his affirmations on Au’s General Reasons assists him in any way, particularly when he was clearly the wrongdoer in having previously tried to avoid providing Yeung with proper accounts of the Lloyds Account. I therefore and in any event do not accept that such amount to a proper account of such items as required by the January 2018 Order.

122.As for the issues at Paragraphs 120(2) and (3) above:

(1)  In Au’s June Closing he submitted that he had purchased both 402B Tolo Ridge and 602A Tolo Ridge[124] on the basis of profits made from MA-HK over the years and from his salaries of over HK$1,000,000 per year.

(2)  However, Au accepted in cross-examination on Day 8 that there was no evidence that the full or any amount of the profits apparently made by MA-HK (according to its audited accounts as at 31 March 2007, 2008, 2009, and 2010, adduced in Au 8 and 9) had actually been received by him, that the extent of his beneficial ownership at the time was unclear and unknown, and that it was not possible to infer a connection, at the relevant time, between MA-HK’s wealth and his own. While he claimed that the fact that he had charged his properties to the bank showed that he had an interest in MA- HK, he acknowledged that there could be other reasons for someone to charge properties to a bank (e.g. to repay other loans or service other matters/relationships). While he had claimed in Au 6 that it was not possible for him to retrieve any documents on MA-HK in relation to the later purchase and funding of 42 Thornton Hill (which was also said to be funded by MA-HK) due to MA-HK having entered compulsory liquidation and been dissolved on 17 February 2021 with liquidators discharged, I did not understand there to be any evidence that he had made any efforts (notwithstanding that he claimed to be a creditor of MA-HK, which had apparently been placed into creditors’ voluntary winding-up) to so inquire with its liquidators or its bank(s) for such records. He also admitted in cross-examination that it might be possible to obtain some such records. Nor did Au deal with such concessions or matters in any of his closing submissions. I therefore do not see that I should accept that Au had been obtained any substantial material wealth from MA-HK at the time which should be taken into account in considering whether such was used to purchase either 402B or 602A Tolo Ridge.

(3)  As for his salaries, in evidence Au claimed that he had a monthly salary of around HK$110,000 to HK$120,000 at the time, and relied on a salaries tax return dated 29 July 2008 to show that his annual income was over HK$1,000,000. However, he also admitted on Day 8 that it was impossible for him to have bought both 402B Tolo Ridge and 602A Tolo Ridge within a year of each other on the basis of such salary, as they were both valuable properties. The position was a fortiori given that his subsequent admission that his and Paula’s monthly expenses at the time were around HK$50,000 to HK$60,000.

(4)  In any case, and while both properties had been used as Au’s and Paula’s residences, Au produced and relied on no other documentation to establish how much (if any) of his alleged wealth had been deployed toward the purchase of either property.

(5)  Moreover, and as I have mentioned in inter alia Paragraph 56 above, Au had admitted in cross-examination that it was possible, and would not have been unusual, for him to have used the proceeds of sale of 30 Shackleton and 9 Onedin Point to buy properties in Hong Kong, and that he could not remember what else he would have used the proceeds for. Yet he had claimed in his worksheet for Item 5 of AKKR-60 that the proceeds of sale of 9 Onedin Point had gone to his and Paula’s bank account and were used for household expenditure, and he had failed to explain in relation to Items 2 and 4 of AKKR-60 that they had been applied toward 30 Shackleton and 9 Onedin and where those proceeds had been applied. None of this was addressed in Au’s June Closing, and I note using the updated figures above that such net proceeds would have been GBP581,447 or HK$6,977,360[125], which as submitted by Yeung would have been more than enough to cover a 30% mortgage of 602A Tolo Ridge.

(6)  There are also my observations on Au’s lifestyle (Paragraph 116 above), and his admission that there was a potential link between the 2003 sale proceeds of 312 Listed Building and the purchase of 402B Tolo Ridge (Paragraph 117 above). Again, none of these were addressed in Au’s June Closing.

(7)  I am also entitled to and do apply the principles from Libertarian, supra, to make assumptions and resolve evidential doubts against Au as the wrongdoer who has not put relevant evidence before the Court in relation to both the relevant unused residuals of AKKR-61, and the application of the proceeds of 9 Onedin Point and 30 Shackleton, contrary to the requirements of the January 2018 Order.

(8)  I therefore find that there is sufficient evidence in the circumstances for me to find (which I do) a clear link between the remaining HK$1,070,772 from the sale of 312 Listed Building and Items 43, 124, 154, 190, and 191 of AKKR-61 (totalling GBP 280,700.00 or HK$3,368,400.00) on one hand, and the purchase of 402B Tolo Ridge for HK$7,800,000 on the other hand. There is also sufficient basis for me to accept and find (which I do) that such sums were applied toward the purchase of 402B Tolo Ridge for HK$7,800,000. I do so applying the approach at Paragraph 109 above mutatis mutandi in relation to such Items of AKKR-61.

(9)  I also therefore find that there is sufficient evidence in the circumstances for me to find (which I do, including by way of inference) a clear link between the net total proceeds of 9 Onedin Point and 30 Shackleton, and sufficient basis me to accept and find (which I do) that such net proceeds of GBP581,447 or HK$6,977,360 were applied toward the 2008 purchase of 602A Tolo Ridge.

123.Given the above, I agree that Au has to account for the net rental income for Coastal Skyline from the 2005 to the 2015 period. However, in being robust and applying rough and ready justice to the evidence before me, including the figures for rent and expenses canvassed in cross-examination, and since the remedy should be for a proportionate share of any figures:

(1)  Yeung is entitled to an account from Au for a proportionate amount of such net rental, which proportion is 9.3%126[126]; and

(2)  As I accept and find on the evidence before me that the net rental that should have been received from Coastal Skyline for this period is HK$1,756,625, the total net rental proceeds that Au must account to Yeung for in relation to that property and for this period is therefore HK$163,952.

124.Given the above, I also agree that Au has to account for the net rental income for 402B Tolo Ridge in relation to the period for which he owned that property. However, in taking a similar approach to the evidence before me, and given that the remedy should be for a proportionate share of any figures:

(1)  Yeung is entitled to an account from Au for a proportionate amount of such net rental, which proportion is 47.4%[127]; and

(2)  As I accept and find on the evidence before me that the net rental that should have been received from 402B Tolo Ridge is HK$1,747,200, the total net rental proceeds that Au must account to Yeung for in relation to that property is therefore HK$829,143.

125.Again given the above and similarly, while Yeung has to account for the net rental income for 602A Tolo Ridge in relation to the period for which he owned that property, taking a similar approach to the evidence before me, and given that the remedy should be for a proportionate share of any figures:

(1)  Yeung is entitled to an account from Au for a proportionate amount of such net rental, which proportion is 18.1%[128]; and

(2)  As I accept and find on the evidence before me that the net rental that should have been received from 602A Tolo Ridge is HK$1,747,200, the total net rental proceeds that Au must account to Yeung for in relation to that property (ie a component of Paragraph 35(2)i above) is therefore HK$396,039.

126.Turning to unused residuals, while I accept that using the total figures from proceeds of sale would give figures for Coastal Skyline in 2005, and 402B Tolo Ridge of, respectively, HK$1,070,772 and - HK$1,269,228 as set out in Yeung Closing Attachment A[129], and a figure for 602A Tolo Ridge of HK$2,477,360, Au should similarly only be required to account to Yeung for the relevant proportion of the residuals.

127.Accordingly, as part of the remedy, and applying the respective proportions of 9.3%, 47.4% and 18.1%, the component sum for for unused residuals should be HK$99,938.72 (2005 purchase of Coastal Skyline), -HK$602,318.50 (402B Tolo Ridge), and HK$449,236.34 (602A Tolo Ridge). I shall reflect such when considering Total Unused Residuals.

42 Thornton Hill

128.As already mentioned, Au admitted before me that Erica and her husband did not have enough resources of their own to purchase both 49 Radford Road and 42 Thornton Hill, and he had paid for all of the money in relation to both properties. Erica had moved from the former to the latter shortly after its purchase and had lived there since. However, and as to the manner of purchase, Au said on Day 6 that he had given them around GBP375,000 to buy 42 Thornton Hill, and that the couple may have obtained a small mortgage given their limited income.

129.Yeung’s case was that Au had purchased this property with the residual balances of the unidentified funds of Yeung under AKKR-60 and -61, alternatively by Items 2, 51, 88, 134, 163 and 167 of AKKR-61.

130.It was Au’s case, as primarily set out in Au 6 and 8 (to which the latter exhibited the 2009 and 2010 audited accounts of MA-HK) that while he did not challenge the land search records, he had purchased this property in Erica’s and her husband’s name with his earnings from MA- HK and “not from any property transactions that formed part of the” January 2018 Order, and that he was not obliged to disclose details of the same including profits and rental income. He reiterated in Au’s June Closing that it was a gift purchased for the couple. I have already mentioned his claim in cross-examination that he had paid around GBP375,000 (which figure I shall adopt) for them, and that a small mortgage covered the remainder.

131.I do not see that I should (and I do not therefore) accept that Au had been obtained any substantial material wealth from MA-HK (or his salaries, which claims were made in relation to 2008) at the time which should be taken into account in considering whether such was used to purchase 42 Thornton Hill given (i) My observations above relating to the status of Au’s resources as apparently derived from MA-HK (ii) My observations above as to Au’s admissions as to his inability to purchase his own residences 402B and 602A Tolo Ridge from his salaries; and (iii) Au’s admission on Day 6 that he did not have any documentary evidence to show that he had used his own monies (and not Yeung’s) for the purchase of this property – indeed he only advanced a bare allegation in cross-examination, that he had instructed MA-HK to advance money to Erica to purchase 42 Thornton Hill.

132.It is also inherently probable that Au would have used Yeung’s money in order to purchase 42 Thornton Hill. Apart from the lack of evidence on his income and source of Erica’s funding, Au had already used Yeung’s money to buy 49 Radford Road outright for Erica, as and for reasons which I had set out above. He had also applied Yeung’s funding in relation to purchases of other UK properties for himself and Eric, as well as toward Coastal Skyline and 402B and 602A Tolo Ridge. Moreover, Au also admitted in cross-examination that it was possible that proceeds from the sale of 30 Shackleton and 9 Onedin had been applied to purchase 42 Thornton Hill – and while I have for present purposes found and applied such proceeds toward the purchase of the 402B and 602A Tolo Ridge properties, this admission makes it more likely that he was prepared to continue to use and treat Yeung’s funds as being at his disposal to purchase properties for himself and his family members.

133.I find that of the GBP461,000 used to purchase 42 Thornton Hill, Yeung provided GBP375,000 (as he claimed) from (i) Items 2, 134, 153, 163, and 167 of AKKR-61 (being various Cheques from the Lloyd’s Account) totalling GBP360,000; and (ii) The remaining GBP15,000 came from what were the total unused residuals from the purchases of UK properties by 2010, which amounted to GBP376,274 or HK$4,515,283 (per the updated figures in Cells M1 to M29 of Yeung’s Closing Attachment A).

134.I reach such conclusion further to Yeung’s admissions above, and as in relation to Items 2, 51, 88, 134, 153, 163, and 167 of AKKR-61 and further to my earlier observations and findings on MAY Partnership and the Nominal Ledgers in relation to 275 St Davids Square (which apply here mutatis mutandi) I do not accept that Au has provided a sufficient account of these Items by claiming in these proceedings that such was applied toward 1-2 Lorenzo Street/MAY Partnership, particularly when (i) As observed above, the lack of documents and evidential difficulties relating thereto stem from Au’s wrongdoing; (ii) I do not see how it can be said that Item 2 of AKKR-61 was reflected in the Nominal Ledgers, which makes it inherently unlikely that such sum was used for MAY Partnership/1-2 Lorenzo Street; (iii) As Items 134 onward were issued from 2004 onward, it is also inherently unlikely that were applied in relation to 1-2 Lorenzo Street/MAY Partnership; (iv) Au has not provided sufficient or indeed any information and supporting documentation to establish that some or part of those Items of AKKR-61 should be carved out as monies to which Yeung is not entitled; and (v) It was Au’s view that he could use the funds in the Lloyds Account for his own purposes, including those unrelated to the Property Investment Agreement [130].

135.Given that I have concluded that Items 2, 51, 88, 134, 153, 163, and 167 of AKKR-61 have been used to buy 42 Thornton Hill, they will be removed from the accounting order from the Lloyds Account[131]. Also, as GBP15,000 of available UK residuals had been used to pay for this property, it seems to me that to reflect this, the figure in Cell M71 of Yeung’s Closing Attachment A should be -GBP15,000 and there is no need to refer to or adjust Cell K71 (which in any event includes the wrong sum of GBP300,000). That would leave GBP362,274 or HK$4,347,288 in unused UK residuals, which in turn affects the Total Unused Residuals amount as addressed below.

136.Given the above, I agree with Yeung’s submission (as per Paragraph 35(2)i above) that Au has to account for the net rental income for 42 Thornton Hill. However, for similar reasons explained in relation to the other properties above, Yeung is entitled to an account from Au for a proportionate amount of such net rental. The relevant proportion is 81%[132]. As I accept and find on the evidence before me that the net rental that should have been received from 42 Thornton Hill was GBP302,400 or HK$3,628,800, the total net rental proceeds that Au must account to Yeung for in relation to this property (ie a component of Paragraph 35(2)i above) is therefore GBP245,987 or HK$2,951,844.

Whether to trace from (i) The proceeds of 72 Capital Wharf (purchased using Item 1 of AKKR-60); and (ii) The proceeds of 429 St Davids Square (purchased using Items 26, 27 and 28 of AKKR-60) to the 2015 purchase of Coastal Skyline, and the 2016 purchase of B29 Workshop

137.Coastal Skyline was sold by Au to Erica (who purchased it without a mortgage) on 27 February 2015 for HK$6,150,000, but Yeung continued to live in it afterward. B29 Workshop was purchased by Paula on 26 March 2016 for HK$2,750,000, without a mortgage.

138.It was Yeung’s case that both were purchased using the proceeds of sale and rental of 72 Capital Wharf, and 429 St Davids Square, as to which:

(1)  429 St Davids Square was sold in late 2011. Au did not provide any answer to the same question for Items 26, 27 and 28 of AKKR-60. In his oral evidence Au agreed that the proceeds of sale would have been over HK$10,000,000, and indeed I have calculated the total net proceeds from such as being $10,680,000. He said in cross-examination that he really had no idea of where the proceeds had gone, but agreed that MA-HK would not have needed financial support at the time.

(2)  72 Capital Wharf was sold in late 2014. However, worksheet Item 1 of AKKR-60 Au had simply set out that he and Paula were the name and address of the person who had received the sale proceeds, and “no” in relation to the question/issue “Where about of the proceed, did to go to other property”. In his oral evidence Au agreed that the proceeds of sale would have been over HK$10,000,000, and I have calculated the total net proceeds as being HK$11,621,088. He orally claimed he genuinely did not remember the details of where the money had gone, although he suggested that some of it might have been used to support MA-HK’s operations.

139.Au’s case in his subsequent written evidence was that the 2015 Coastal Skyline purchase was due to his having executed a charge in favour of the bank as a guarantee for the mortgage provided for his company (MA- HK), but as MA-HK was unable to trade due to lack of funds, the bank as mortgagee threatened to take possession of the property, and it was hence arranged that it would be sold to Erica as that would avoid incurring stamp duty liability, although the purchase was funded by a loan said to be from Marchant (originally of HK$3,000,000 (Au 8, adopted in Au 9) but later said to be GBP200,000 (Au 10)), together with Paula’s savings of some HK$3,500,000 (Au 8, adopted in Au 9). It was said that the purchase price was “paid in full out of an account held by” Paula and Erica (Au 10, to which certain documents were exhibited). As for B29 Workshop, he said that Paula’s purchase of such (which was done without the assistance of a mortgage) had not used Yeung’s monies, and had instead partly used dividends that Au received as a creditor of MA HK, and partly the HK$6,970,877.56 proceeds from the 2015 sale of 602A Tolo Ridge (Au 9, exhibiting inter alia a solicitor’s letter detailing the latter, adopted in Au 10).

140.For the following reasons, I do not see that I can accord weight to Au’s claims, and I find that the proceeds from both 429 St Davids and 72 Capital Wharf were used in the 2015 purchase of Coastal Skyline, and B29 Workshop:

(1)  There is no evidence as to (and Au orally admitted he could not remember) where the substantial proceeds of 429 St Davids went. There were also no substantial purchases of property around the time of its sale. Given that Au was not particularly profligate as to his daily/monthly outgoings and expenses, it is inherently unlikely he would have thereby dissipated or frittered away such a substantial amount of proceeds.

(2)  In cross-examination, Au said that he felt that he had not needed to explain where the proceeds of 72 Capital Wharf had gone and, while he claimed he did not remember the details of where although he thought that some of it had been used to support the company (MA-HK), he did not produce any evidence to support this. He also similarly sought to claim (on Days 5 and 7) that both Tolo Ridge properties had been the subject of a forced sale by MA-HK’s bank in June 2015, and he had not obtained any money from such. However, there was no documentation to support such claims as to MA-HK’s financial position. While the solicitor’s letter indicated that the proceeds of sale of 602A Tolo Ridge had been used to redeem an HSBC loan, the same did show that he had received HK$6,970,877.56 or so of sale proceeds, and there was no indication (particularly given his claim that such had ten been put toward the purchase of B29 Workshop in 2016) that such had been dissipated or used to further settle any such loans. His oral claim that he had not obtained any money from the sale of both hence did not sit well with his claims in Au 9. There was also no documentary proof as to how the proceeds of 402B Tolo Ridge had been used.

(3)  I do not see that Au’s position on B29 Workshop is assisted by the other documentation exhibited, or Au’s other evidence and submissions, in relation to such. It indicated that in April 2016, a dividend of 12.37% would be paid to Anthonina Ignacio as an unsecured creditor. Even if one accepts Au’s oral and highly unusual claim that he had an identical document addressed to him, but he could not find it and hence had to rely on Anthonina’s copy, Paula would have had to pay the full amount by the time of March 2016. When pressed on this, Au then claimed that Paula had borrowed some sort of loan from unnamed people/persons to bridge the gap, which people it was said knew that money would come in. However, there was of course no documentation to support this claim. The other letter indicated that Au’s proof of debt had been adjudicated in May 2018, long after B29 Workshop was purchased. When further cross-examined on why he claimed had the funds to buy B29 Workshop, Au simply said he needed, and needed to purchase, the property. Finally, in Au’s June Closing he submitted (contrary to his prior claims and again without any supporting documentary or sworn evidence) that the B29 Workshop had been purchased by Paula with the use of “purely her own money”.

(4)  Moreover, and in any event, as I have mentioned earlier it did not appear that Au had even made any efforts to so inquire with its liquidators or its banks for any records to support such claims. This was even though Au claimed that it was he who was MA-HK’s biggest creditor and that it was he (and not a bank) who had initiated the creditors’ voluntary winding-up in around 2015. Nor did Au (save as indicated immediately above) deal with any of the aforesaid matters in his closing submissions.

(5)  Au’s evidence as to the source of funding for and purchase of 2015 Coastal Skyline was also far from reliable, being as it was full of surprising and unsupported claims. He claimed for the first time in cross-examination that Erica had contributed some HK$1 to 2 million for the purchase, but could not remember the exact amount and provided no evidence to support such. He claimed that this was because no-one had ever asked such question before. This was clearly a poor excuse, given that by Au 9 he must have been well-aware of the nature of the account-taking exercise and the general nature and manner of Yeung’s case, and when he was assisted in relation to the preparation of Au 9 and Au 10. I reject such claim and find that Erica was named as purchaser for reasons related to tax. The sum allegedly advanced by Marchant also fluctuated when he was referred to the underlying documentation, and I do not see that I should accord any weight to its description “Jason Loan” when it had been advanced by his and Marchant’s company, MAY Trading UK Limited, and when there was no evidence that any attempt had been made to repay it. He also claimed, but only upon being referred to the underlying bank statements in cross- examination, that Paula’s assistance was apparently comprised of a loan from his former colleague Chan Fun Ping (which he had in his written evidence chosen not to mention or provide relevant proof of), and he could not offer any cogent explanation as to how Paula – who up to 2015 was on the evidence a housewife who had would occasionally trade stocks – had apparently managed to find and deposit enough money to put into her and Erica’s joint account and meet the obligations.

(6)  I have considered the above, and I also find that I am entitled to and do apply the principles from Libertarian, supra, to make assumptions and resolve evidential doubt against Au as the wrongdoer who has not put relevant evidence before the Court, in particular as to the use of the proceeds of 72 Capital Wharf and 429 St Davids Square, and contrary to the requirements of the January 2018 Order. I accordingly find that there is sufficient evidence in the circumstances for me to find (which I do) a clear link between their proceeds and the 2015 purchase of Coastal Skyline as well as the purchase of B29 Workshop in Paula’s name.

141.Given the above, and applying the principles in Libertarian, supra, I therefore accept and find (as suggested by Yeung in Yeung’s Closing Attachment A) that Au had used the proceeds of both properties to pay for both Coastal Skyline in 2015, and B29 Workshop.

142.I hence also agree that Au has to account for the net rental income for 2015 Coastal Skyline and 29B Workshop since they were purchased that year. I take an approach to the evidence before me similar to that above, and also consider that the remedy should be for a proportionate share of any figures. Au should hence only be required to account to Yeung for the relevant proportion, which is 100% of the rental of Coastal Skyline[133] and 87% of the rental of B29 Workshop[134].

(1)  As I accept and find on the evidence before me that the net rental that should have been received from 2015 Coastal Skyline is HK$1,970,475, that is the total net rental proceeds that Au must account to Yeung for in relation to that property and hence a component of Paragraph 35(2)i above.

(2)  As I accept and find on the evidence before me that the net rental that should have been received from B29 Workshop is HK$603,200, 87% of that is HK$524,784 and is the component of Paragraph 35(2)i above.

143.Turning to unused residuals, while I accept that using the total figures from proceeds of sale would give figures for Coastal Skyline in 2015, and B29 Workshop, of respectively HK$16,151,088 and HK$13,401,088, Au should similarly be required to account to Yeung for the relevant proportion of the residuals.

144.Accordingly, as part of the remedy, and applying the respective proportions of 100% and 87%, the component sum for for unused residuals should be HK$16,151,088 (for Coastal Skyline), and HK$11,658,946.56 (87% of HK$13,401,088 for B29 Workshop). I shall reflect such when considering Total Unused Residuals.

Total Unused Residuals

145.Having considered the above, and Mr. Lau’s submissions on the topic, I accept that it is appropriate to apply the Total Unused Residuals (see Paragraph 35(1) above) as sums which did not relate to any further tracing exercise and to order Au to account for and pay such to Yeung. In particular, given the overall patterns and evidence as to Au’s daily/monthly expenses/outgoings, it is inherently likely that such would have been generally preserved by Au, unless otherwise applied toward the purchase of properties. Moreover, I did not understand Au to have explained, or sought to put forward a cogent case or submissions, as to how he would have dealt with such.

146.For ease of reference the total relevant figure, and the figures from which it is derived, can be seen in the following table:

Au’s Properties (UK) Unused Residuals	GBP Residuals	HKD Residuals (GBP1=HKD12)
72 Capital Wharf	-GBP17,890	- HK$214,680
30 Shackleton	GBP34,894	HK$418,728
9 Onedin Point	GBP2,344	HK$28,128
312 Listed Building	-GBP3,079	- HK$36,948
226 St Davids Square	-GBP94,985	- HK$1,139,820

Au’s Properties (UK) Unused Residuals	GBP Residuals	HKD Residuals (GBP1=HKD12)
275 St Davids Square	GBP2,363	HK$28,356
128/63 Red Square	GBP100,703	HK$1,208,436
429 St Davids Square	GBP294,923	HK$3,539,076
49 Radford Road	GBP57,000	HK$684,000
42 Thornton Hill	-GBP15,000	-HK$180,000
Au’s Properties (HK) Unused Residuals
Coastal Skyline (2005) – 9.3% proportion		HKD99,938.72
402B Tolo Ridge – 47.4% proportion		- HK$ 602,318.50
602A Tolo Ridge – 18.1% proportion		HK$449,236.34
Coastal Skyline (2015) – 100%		HK$16,151,088
B29 Workshop – 87% proportion		HK$11,658,946.56
TOTAL ( ie Total Unused Residuals)		HK$32,092,174.32

Total Unused Net Rentals

147.Having considered the above, and Mr. Lau’s submissions on the topic, I also accept that it is appropriate to apply an order an account and payment from Au in the amount of the Total Unused Net Rentals (see Paragraph 35(2) above). I repeat my reasoning as to such from 145 above.

148.For ease of reference the total relevant figure, and the figures from which it is derived, can be seen in the following table:

Au’s Properties Unused Net Rentals	GBP Residuals	HKD Residuals (GBP1=HKD12)
226 St Davids Square – 3% proportion	GBP2,326	HK$27,913
275 St Davids Square – 39% proportion	GBP98,389	HK$1,180,664
128/63 Red Square – 73% proportion	GBP212,177	HK$2,546,126
49 Radford Road – 100% proportion	GBP226,800	HK$2,721,600
42 Thornton Hill – 81% proportion	GBP245,987	HK$2,951,844
2005 Coastal Skyline – 9.3% proportion		HK$163,952
402B Tolo Ridge – 47.4% proportion		HK$829,143
602A Tolo Ridge – 18.1% proportion		HK$396,039
2015 Coastal Skyline – 100% proportion		HK$1,970,475
B29 Workshop – 87% proportion		HK$603,200
TOTAL ( ie Total Unused Net Rentals)		HK$13,390,956

Remittances and Lloyds Account transfers unrelated to purchases of property within AKKR-60 and AKKR-61; Deductions

149.Having considered the above, and the evidence and Mr. Lau’s submissions on the topic, I also accept that it is appropriate to apply an order an account and payment from Au in the amount of Items 22, 24, 33 and 34 of AKKR-60. On the evidence, Au had no basis for paying himself Item 22 so that he could use it to repay his own personal loan. As for the other items they were said to relate to 1-2 Lorenzo Road/MAY Partnership. I repeat my above general analysis on such, and add that I cannot even see a link between Item 24 and the Nominal Ledgers.

150.As for AKKR-61, I have excluded Items 2, 51, 88, 134, 153, 163, and 167 which total GBP360,000, from the total sum of disputed items in AKKR-61. I agree with Mr. Lau’s submissions that there is no basis on the evidence for Au to have used those sums and that he should hence be ordered to account for such.

151.As to deductions, I agree with Mr. Lau’s reasons (and as to which Au made no submissions and adduced no evidence to the contrary) that there is no basis for deducting GBP200,000 and GBP156,028 mentioned at Paragraphs 134, 275, 282 Liability Judgment.

152.However as only Item 12 AKKR-60 of GBP10,000 had been applied toward 226 St Davids Square, there should be a GBP200,000 deduction to reflect such. I also note and will apply Yeung’s fair concession that the sum of GBP121,058.90 in Paragraph 282 of the Liability Judgment should be deducted.

Remittances and Lloyds Account transfers unrelated to property	GBP Residuals	HKD Residuals (GBP1=HKD12)
AKKR-60 #22, 24, 33, 34	GBP45,000	HK$540,000
AKKR-61 excluding #2, 51, 88, 134, 153, 163, 167	GBP841,908	HK$10,102,896

Remittances and Lloyds Account transfers unrelated to property	GBP Residuals	HKD Residuals (GBP1=HKD12)
Deductions	-GBP321,058.90	-HK$3,852,706.8
TOTAL ( ie Total Unused Net Rentals)		HK$6,790,189.20

Profits made in relation to the 10 Properties under the Property Investment Agreement

153.As recorded above, Yeung accepted that this would be GBP5,000.

INTEREST

154.Yeung sought an order for pre-judgment interest at the usual rate from the date of the Counterclaim. I mentioned that difficulties might arise depending on when rental was said to fall due, and Mr. Lau said he would leave it to my discretion.

155.At this stage, I consider that a fair order which avoids overcompensating Yeung (and punishing Au) would be to award him judgment interest on all sums awarded at Prime Rate + 1% to run from the date of the January 2018 Order. I hence make such order nisi. Post- judgment interest shall run on the sums due at judgment rate.

ORDER THE AMOUNT PAYABLE BY AU, AND INTEREST

156.I therefore find and order that Au is to account for Yeung in the amounts of:

(1)  HK$32,092,174.32 (being the Total Unused Residuals);

(2)  HK$13,390,956 (being the Total Unused Net Rentals);

(3)  HK$10,642,896 (being the Total Unused Remittances and Lloyds Transfers);

(4)  HK$60,000 (being profits made under the Property Investment Agreement); and

(5)  HK$6,790,189.20 (being Other Sums).

157.I also make the orders above as to interest.

ADJOURNMENT COSTS ISSUE

158.This arises from the parties’ correspondence dated 5, 8, and 9 December 2025, some of which I have referred to in Paragraphs 24 and 25 above, and pursuant to which I have made an order which I have summarised at the same.

159.In essence, in response to Au’s request for an extension as indicated above:

(1)  Yeung had through his solicitors by letter dated 8 December 2025 that unless Au and/or his solicitors were able to explain on affirmation that SFKS had not been involved in case (on and off record) until 4 December 2025 as alleged, and why the application was only made on 5 December 2025 instead of much earlier, Yeung would only agree to an extension of until 12 December 2025 (3 days). Yeung also said he would not seek an adjournment of the hearing date if the closing submissions were filed and served Yeung on or before 12 December 2025, but would do so (and seek wasted costs to be paid by Au forthwith) were I to grant Au’s requested extension; and

(2)  Au had through SFKS by letter dated 9 December 2025 maintained that the extension to 16 December 2025 was required, would cause little if any prejudice to Yeung given Mr Lau’s prior involvement in the case, and relied on legal professional privilege to decline provision of the information. He also maintained a neutral stance in relation to the adjournment issue, but submitted that no wasted costs would be incurred, and resisted costs of and occasioned by any adjournment as Au was ready to proceed with the hearing as originally scheduled.

160.Having considered the parties’ written and oral submissions, I consider that this is a situation where Yeung should have his costs of and occasioned by Au’s application to extend time, including of the written correspondence and submissions relating thereto and of and occasioned by the adjournment. I also reject Au’s submission that there should be no order as to costs other than the usual HK$1,040 for extension of time. This is for the following reasons:

(1)  Apart from the starting point on costs in relation to extensions of time (RHC O 62 r 3(4)), it was Au who chose to only instruct lawyers at an extremely late stage, namely on Friday 5 December 2025 which was some 24 days after receipt of Yeung’s written closing submissions, and 4 days before the deadline.

(2)  The lateness of Au’s application and the manner in which it was made would have been inevitably, and reasonably, significantly prejudiced Yeung’s preparation for the hearing, and necessitated the adjournment of the hearing in the interests of fairness. Not only would Au’s proposed extension have allowed Yeung only 2 clear days to consider Au’s submissions, but prior to my order there was (prior to Mr Leung lodging his written submissions) no indication from Au that the scope of his likely submissions would be as narrow as they eventually turned out to be. On the contrary, the reference in SFKS’s letter of 5 December 2025 to the “voluminous amount of documents” and bundle length tended to suggest to the contrary.

161.I have been provided with Yeung’s statement of costs and, having had regard to the parties’ written and oral submissions on the topic summarily assess such costs at HK$90,000.

COSTS

162.Given the above, at this stage I can see no reason to deprive Yeung of his costs of the account-taking exercise not already covered by the above and any other previous costs orders. He has substantially prevailed, and it is amply clear that the scope of the exercise, and of Yeung’s summons to amend dated 3 June 2025, justified the assistance and instruction of Counsel. I hence make an order nisi that Au do pay Yeung’s costs of and occasioned by Yeung’s summons dated 3 June 2025, and Yeung’s costs of the present taking of account insofar as such are not already covered by any other previous costs orders, with certificate for Counsel in relation to such.

163.The above costs order nisi will become absolute if no application is made to vary such within 14 days hereof.

164.I thank counsel for their helpful submissions.

The 2^nd Plaintiff appeared in person on 16, 17, 22, 23, 24 April, 6 May, and 29 and 30 September 2025

Mr. Raphael Leung, instructed by Sit, Fung, Kwong & Shum, for the 2^nd Plaintiff on 25 February 2026

Mr. Bruce Lau, instructed by Chong & Co, for the 1^st defendant

The 1^st Plaintiff, and the 2^nd and 3^rd Defendants, were absent and not represented

ANNEXURE 1

ANNEXURE 2

ANNEXURE 3