Wong Yuen Mee Elsa v. Wong Chung Hie Jones
Read the full judgment text of HCA 373/2002 on BabelCite. This High Court CFI judgment was delivered on 21 January 2004.
1. The Plaintiff commenced the present action claming against the Defendant the sum of HK$5,000,000.00 being the amount of a dishonoured cheque dated 14 December 2001 payable to her and drawn by the Defendant.
Cites 3 cases
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HCA000373/2002 HCA 373/2002 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 373 OF 2002 ____________
____________ Coram: Deputy High Court Judge Y L Wong, SC in Court Dates of Hearing: 21 - 25 July, 25 - 27, 29 August, 30 September, 9 - 10 October 2003 Date of Judgment: 21 January 2004 ______________ J U D G M E N T ______________ The Plaintiff's Claim 1.The Plaintiff commenced the present action claming against the Defendant the sum of HK$5,000,000.00 being the amount of a dishonoured cheque dated 14 December 2001 payable to her and drawn by the Defendant. 2.The Statement of Claim was subsequently amended to seek, inter alia, damages for breach of trust and/or fiduciary duty, breach of contract, and also conversion. Further and final amendments were made before closing submissions, trimming down the Plaintiff's claim to the following:
The Background 3.The Plaintiff and the Defendant were intimately related in the 1960's when both of them participated in the activities of the boy scouts in Hong Kong. However, the relationship did not work out and they were each married to other persons. 4.They met up again in about May 1989 and resumed their intimate relationship shortly afterwards. The Defendant subsequently divorced his wife in 1994, and the Plaintiff divorced his husband in 1998. 5.They were very close in the first few years of that resumed relationship. The Defendant was generous to the Plaintiff by making her gifts in terms of money, supplementary credit card and club memberships, etc. They went on holidays together. The Plaintiff moved out of her matrimonial home in mid 1990 to stay in premises owned by the Defendant. A flat in Serene Court at Kotewall Road Hong Kong was purchased in August 1991 in the Plaintiff's name where they would spend time together. Although the extent of his payment is in issue, it is not disputed that the Defendant paid for a considerable part of the down payment, mortgage payments, rates, management fees and other sundries. 6.However, by the latest in 1994, the relationship turned difficult. As is evidenced by a letter written by the Defendant to the Plaintiff sometime in 1994, they had frequent rows including one occasion involving fighting and yelling in the street, causing great embarrassment. In the letter, the Defendant suggested separation citing a number of differences and problems. However, the relationship and the difficulties apparently continued. They were never married. 7.By the latter part of 2001, the Defendant apparently was already seeing another woman. On 11 December 2001, the Plaintiff confronted the Defendant and his new girl friend at the Defendant's home in South Bay. The highly emotional incident led to the inevitable break-up of the relationship. 8.On 14 December 2001, less than 3 days after the unhappy incident, the Plaintiff filled out an undated blank cheque signed by the Defendant and drawn on the Heng Seng Bank ("the Blank Cheque"), with the date of 14 December 2001, her name and an amount of HK$5,000,000.00, and presented it for payment. The cheque had been in her possession for over 11 years since 1990. 9.On 15 December 2001, the bank informed the Defendant who countermanded payment of the cheque. A meeting took place on or about 7 January 2002 between them which failed to resolve their disputes. On 11 January 2002, the Plaintiff's solicitors wrote to the Defendant to demand payment of the cheque. On 30 January 2002, the Plaintiff commenced the present action suing for dishonoured cheque as the sole cause of action. 10.In his original Defence filed on 26 February 2002, the Defendant alleged that he believed it was in about July 1990, when the Plaintiff was the Defendant's mistress, that she somehow came into possession of the Blank Cheque, and that their relationship having ended in about May 2001 the Plaintiff decided to pay herself HK$5,000,000.00 without his knowledge or consent. 11.The Plaintiff amended her Statement of Claim on 26 March 2002 and alleged the following:
12.The agreement in relation to the Jade Stones was dismissed by the Defendant as a concoction. In the latest amendments to his Defence in September 2002, the Defendant further explained that in July 1990 he and the Plaintiff were in love and the Blank Cheque was given to the Plaintiff "only in connection with and in the context of that love affair". In essence, he said the amount of the Blank Cheque could only be filled with his agreement, and the Blank Cheque could only be presented for payment during the subsistence of the love affair. The Issues and the Burden of Proof 13.The central issue in this case is a simple one of fact: whether the alleged entrustment of the Jade Stones did take place, and whether it was indeed agreed between the parties that the Blank Cheque was to provide "security" for the payment of the proceeds of the Jade Stones, so that the Plaintiff was entitled to fill it out and present it for payment. 14.Although the Defendant did put up a positive case as to why the Blank Cheque was given to the Plaintiff apart from dismissing the Plaintiff's story as a concoction, the onus of proof is still fairly and squarely on the Plaintiff. The Plaintiff will fail if I accept the Defendant's explanation as to why the Blank Cheque was given. However, even if I reject the Defendant's explanation, it does not follow that I have to believe the Plaintiff's allegation. She still has to satisfy me that her claim is true and valid on balance of probabilities, although any disbelief of the Defendant's version will be a relevant factor to take into account. 15.The fact that it is a claim for dishonoured cheque makes no difference. If the Plaintiff fails to prove the agreement in relation to the Jade Stones, the claim based on dishonoured cheque will fail. As Miss Selina Lau, Counsel for the Plaintiff, fairly conceded in her submissions, the claim based on dishonoured cheque cannot stand alone independently of the transaction involving the Jade Stones. The mere possession of the Blank Cheque signed by the Defendant did not entitle the Plaintiff to sue. The Plaintiff's right and authority to fill out and present the Blank Cheque depends on her successfully proving her case regarding the agreement in relation to the Jade Stones. 16.Although the issue is simple, the resolution of it is by no means easy. But for the special relationship between the parties, I would have little hesitation to dismiss the Plaintiff's claim in view of the dearth of evidence relating to the Jade Stones. However, the parties were lovers and there were undisputed financial dealings between them which were not properly reduced in writing. 17.In their witness statements and at trial, both parties went through many other financial dealings between them including alleged money gifts, contributions towards the purchase of Serene Court, entrustment of funds, mutual loans, investments and joint ventures. Miss Lau originally questioned the relevance of these matters which were raised by the Defendant in the first place. However, instead of seeking to exclude them, she in fact went into these matters in detail and ultimately relied on some of them in support of her submissions. 18.I have allowed these other matters, which the parties described as "collateral matters", to be examined. In my view, these other transactions, especially those taking place close to the time when the Blank Cheque was signed in July 1990, are relevant to the issue which I have to decide. They do not simply go to the credibility of the witnesses. They are relevant for the purpose of understanding the true character of the parties' relationship, which would assist in considering the inherent probability of the alleged transaction, namely, the entrustment of the Jade Stones and the incidental agreements arising out of it. 19.It is however regrettable that the examinations and testimonies on these matters were not completed more succinctly, which accounted for the length of the trial. 20.If the Plaintiff can prove the entrustment of the Jade Stones, the following further issues need be considered:
The Analysis of the Evidence 21.I shall examine the evidence in the following order:
22.As to witnesses, apart from the Plaintiff and the Defendant themselves, the Plaintiff called her ex-husband Cheng Pui Sang to give evidence. Also by consent and subject to certain deletion the parties agreed to put in as evidence the witness statement of one Koo Man Cheong Patrick Louis. In assessing the evidence, the demeanour of the witnesses is of course of vital importance. However, it is important also to bear in mind the inherent probabilities of certain assertions and test them against the undisputed facts and contemporaneous documents. The Entrustment of the Jade Stones in or about July 1990 The existence of the Jade Stones 23.The Plaintiff said the Jade Stones were given to her in 1982 by her late mother who died in 1984. The only document the Plaintiff could produce to prove the existence of the Jade Stones is the cash memo dated 22 June 1959 issued by one Astor Jewellery Company which recorded the sale of a pair of green jade beans for HK$5,000.00. The probative value of this cash memo is however very limited. It is not a certificate or title document of any kind. It does not name the purchaser of the green jade beans or in any other way connect the beans with the Plaintiff's mother. As the proprietor of a jewellery business for many years, the Plaintiff would have come across such documents easily. 24.The Plaintiff gave evidence as to the size, shape and colour of the Jade Stones. For illustration purpose, she further produced extracts of a catalogue published by the auction house Christie's showing a "jadeite Hulu and diamond pendant" due to be auctioned on 31 October 2001 ("the Christie's pendant"). She said there were unusual similarities between the Jade Stones and the Christie's pendant. 25.The Plaintiff's story raises the following remarkable coincidences.
26.The Plaintiff called her ex-husband Cheng Pui Sang for corroboration. I am not impressed by Cheng's testimony. According to Cheng, he had seen the Jade Stones only once in 1982 when he witnessed his mother-in-law passing to the Plaintiff the Jade Stones, which were among a collection of other pieces of jewellery given to her. I do not believe that after almost 20 years he would be able to, as he attempted to do before me, describe the different kinds of shades or colouring of the Jade Stones. In any event, his account contradicted that of the Plaintiff who said on that occasion in 1982 her late mother only picked up the Jade Stones from a packet of jewellery and handed only the Jade Stones to her. 27.I also reject the evidence of the Plaintiff, and of Cheng, that after the Plaintiff allegedly attended the Christie's exhibition, she called Cheng at the end of October or early November 2001 asking him if he still remembered the Jade Stones given to her by her mother. In the same telephone conversation, she allegedly further told him that she had in a recent exhibition come across the Christie's pendant which was similar to the Jade Stones, and that she had earlier entrusted the Jade Stones to a friend for sale.
The determination of the value of the Jade Stones 28.According to the Plaintiff, the reason why she put down HK$5,000,000.00 as the amount for the Blank Cheque on 14 December 2001 was because in May 1997, the Defendant told her the Jade Stones had been sold for HK$5,000,000.00, which became the amount due by the Defendant to her. The price of HK$5,000,000.00 was set by her back in July 1990 when the Jade Stones were handed over to the Defendant. At that time she estimated the Jade Stones were worth at least HK$5,000,000.00 and thus she informed the Defendant the price should not be lower than HK$5,000,000.00. 29.When asked how she could have come up with the valuation of HK$5,000,000.00 in July 1990, the Plaintiff said throughout that period of time, she had looked at auction prices of jade and kept an eye on market items. I am not convinced.
30.In my view, the Plaintiff's rough comparison in terms of colour, shape and dimensions between the Christie's pendant and the Jade Stones is grossly insufficient for the purpose of proving the value of the Jade Stones in 1990 or at all.
31.The significance of the Plaintiff's inability to satisfy this Court that she could and did value the Jade Stones at HK$5,000,000.00 in July 1990 is not limited to the quantum of her claim. It casts very grave doubts on the Plaintiff's account of the events and her justification to fill out the Blank Cheque with this amount. 32.At this juncture, it is also convenient to deal with a point of law in connection with the value of the Jade Stones. It is the contention of Miss Lau that I should treat the Plaintiff's evidence on the value of the Jade Stones as expert opinion admissible under Part IV of Order 38 of the Rules of the High Court. I am unable to accept this submission.
The request by the Defendant for the Jade Stones to sell to Taiwanese customers 33.The Plaintiff said that in or about June or July 1990, in the course of a conversation about their respective businesses during a trip to Thailand, she told the Defendant that Taiwanese people were interested in buying expensive jade. Upon hearing this, the Defendant said he had many friends in Taiwan and if the Plaintiff got any good jade he could try to find interested buyer for her. In response, the Plaintiff said her mother had left her with the Jade Stones which were worth over HK$5,000,000.00. 34.Even if the Plaintiff did have the Jade Stones which were worth HK$5,000,000.00, I find it strange that the Plaintiff would have so lightly parted with her expensive "heirloom". She said she was reluctant to part with them for sentimental reasons. She also admitted she was not in any urgent need of money in July 1990. In any event, the sale of the Jade Stones was not raised in the context of the Plaintiff trying to raise cash. 35.I agree with Mr Liang the entrustment of the Jade Stones with the Defendant is inherently improbable when it was the Plaintiff, rather than the Defendant, who dealt with expensive jewellery. The Plaintiff has for 35 years been running a jewellery shop Cecil Art Jewellery Limited ("Cecil Art") in Central Hong Kong selling fine jewellery including diamonds worth over HK$5 million. The Defendant, on the other hand, was in the business of trading in costume or artificial jewellery (in the range of HK$30 per dozen) for over 37 years. Compared with the Defendant, not only did the Plaintiff have much greater knowledge in genuine and precious jewellery, she would also have much wider clientele for them. In this connection, as mentioned, Miss Lau maintained that I should treat the Plaintiff as an expert in jade stones. If any interested purchaser raised questions on the Jade Stones or sought to bargain on the price, the Defendant, who was not in this trade at all, would not be able to respond meaningfully. 36.Further, the Defendant ran his business in Hong Kong. There is no evidence that he spent any time in Taiwan at all. The Plaintiff did not elaborate on how the Defendant was supposed to show the Jade Stones physically to interested buyers in Taiwan. If indeed an interested buyer had been identified, there was no explanation given as to why the buyer could not have come to view the Jade Stones in Cecil Art in Hong Kong. There was no suggestion by the Plaintiff that the Defendant was to take the Jade Stones and immediately fly to Taiwan to pursue any deal. According to the Plaintiff, she did not ask to whom the Defendant was going to show the Jade Stones, or indeed ask any other question in that connection. Bear in mind the Plaintiff was the one who had been in this trade for 35 years, the Plaintiff's evidence is unconvincing. The Blank Cheque as security 37.According to the Plaintiff, what triggered the provision of the Blank Cheque was her concern over "security". By concern over security, it must mean the Plaintiff's worry over the possible loss of or damage to the Jade Stones once they left her possession. It was never the Plaintiff's case that she had concern over the Defendant's honesty or whether he would refuse to return the Jade Stones or its proceeds after taking them. 38.The taking of a blank cheque from the Defendant did not really address the said concern over security. By that time, she and the Defendant were lovers, and surely she would not want to make the Defendant the insurer having to absorb any loss arising from any loss of or damage to the Jade Stones. If one had to consider questions of insurance, surely the Plaintiff was much better placed to handle them. 39.Even if she did not care whether the Defendant had to bear the risk, I doubt if she could be sure if the Defendant had the means to guarantee the payment of the HK$5,000,000.00. The so-called security provided by such a blank cheque was feeble. It all depended on whether there was sufficient fund in the Defendant' bank account upon which the cheque was drawn. Even if she had any reason to believe in the financial soundness of the Defendant in July 1990, it must be clear to her shortly thereafter that the cheque was no real security, for according to her, the Defendant already had to borrow HK$2,000,000.00 from her in August 1990 and admitted he had no funds to cover the HK$1,000,000.00 cheque shortly after issuing it in November 1990. 40.Another apparent oddity is that if the Plaintiff had intended to sell the Jade Stones for not less than HK$5,000,000.00 and had agreed to let the Defendant pocket the excess, why was the sum HK$5,000,000.00 not put down as the amount of the "security" cheque in the first place? The physical handing over of the Jade Stones 41.In her evidence in chief, the Plaintiff first said she wrapped up the Jade Stones and put them into her handbag. She went downstairs from her shop to meet the Defendant who was waiting in his car and gave him the Jade Stones. They went off for dinner and the Defendant drove her home. It was on that occasion that the Defendant gave her the Blank Cheque pledging that if the Jade Stones were lost or damaged he would be liable. 42.In cross-examination, she gave an inconsistent account. She said she put the box containing Jade Stones into a brown envelope and then the whole envelope into a carrier bag. She had intended to give the Defendant the box while he was driving to the dinner place but the Defendant asked her to hold on to it. Eventually it was in the restaurant where they had dinner that the Plaintiff handed over the Jade Stones to the Defendant. The cheque for HK$1,000,000.00 43.According to the Plaintiff, it was in November 1990 that she asked the Defendant about the Jade Stones after parting with them in July 1990. There was no suggestion by the Plaintiff that the Defendant had been away from Hong Kong between the time he obtained possession of the Jade Stones and her discussion with him in November 1990. In fact, it could not have been the case as in August 1990, the Defendant sought a HK$2,000,000.00 loan from the Plaintiff as bridging finance for his company's use. 44.In my view, it is inconceivable that the Plaintiff would not have asked the Defendant a single question about the Jade Stones for over 4 months after parting with them for the purpose of letting some unknown potential purchaser for viewing. 45.According to the Plaintiff, when she asked the Defendant about the Jade Stones in November 1990 the Defendant told him he had found a buyer interested in buying the Jade Stones for HK$3,000,000.00. The Plaintiff however insisted on HK$5,000,000.00. The Plaintiff said at that juncture the Defendant offered to and did issue a cheque for HK$1,000,000.00 for use as a deposit to indicate sincerity. The cheque was postdated to 30 November 1990. The Plaintiff said when the cheque was due for payment, she was told by the Defendant to withhold presentation of the cheque as the Jade Stones had not been sold and he did not have sufficient funds in the bank to meet payment. The Plaintiff agreed. 46.This additional "security" arrangement was strange. Unless the HK$1,000,000.00 cheque was intended to be presented for payment irrespective of the sale of the Jade Stones, it would practically serve no purpose additional to the Blank Cheque. However, the Plaintiff said upon being told the Defendant did not have fund and the Jade Stones were still unsold, she found it reasonable not to present the cheque and simply left the matter alone. No sale between 1990 and 1997 47.Given the alleged worth of the Jade Stones, the Plaintiff's confessed reluctance in parting with them in the first place, and the apparent failure by the Defendant to sell the same for 6 years, I find it difficult to believe that the Plaintiff would not have sought the return of the Jade Stones throughout that long period of time. 48.According to the Plaintiff, she had not "formally" inquired of the Defendant about the sale of the Jade Stones between 1990 and 1997 because raising the issue would annoy the Defendant and adversely affect the relationship. I am unable to accept this explanation.
49.Miss Lau submitted that the Plaintiff's inaction between November 1990 and May 1997 in not pressing the Defendant for explanation as to what happened to the Jade Stones and after May 1997 for the payment of the proceeds was consistent with her character, namely, not pushy but tolerant with personal and financial matters. Miss Lau referred to the delay in formalizing her divorce until 1998 as an example. I do not accept her submission in this regard.
50.The Plaintiff was an experienced business woman. She first started working for Cecil Art but later she acquired the business from its former owner. She was the one who suggested the Defendant to purchase the Kinson shares, and to utilize a BVI company to invest in real properties. She did not appear to me to be the type of persons who get disorganized or muddled easily with financial affairs. The Defendant's intimation in 1997 that the Jade Stones had been sold for HK$5,000,000.00 51.It is the Plaintiff's case that in or about May 1997, because of the Plaintiff's concern with the political environment in Hong Kong, she urged the Defendant to sell the Jade Stones and hand over the proceeds to her. The Defendant then disclosed he had already sold the Jade Stones for HK$5,000,000.00 and that he had "spent" the money to meet his urgent financial needs. The Defendant promised to return the said proceeds as soon as his financial condition improved. The Plaintiff agreed to the Defendant's request and did not demand the payment of the HK$5,000,000.00 until after the confrontation in December 2001. 52.I have difficulty in accepting the reason for the Plaintiff's approach in May 1997. Any concern over the political changes due to the impending handover of Hong Kong to the PRC would have emerged long before the actual handover in 1997. The fact is the Plaintiff had already made arrangements to emigrate to the USA in as early as 1989. 53.Further, as submitted by Mr Liang for the Defendant and evidenced by the bank statements of the Defendant from May 1997 to December 2000, his financial position was sound during that period. 54.There was no discussion between the parties as to whether or not the Blank Cheque would continue to serve as a kind of "security" for the repayment of the HK$5,000,000.00. Since the Jade Stones had already been sold and the Plaintiff did not insist on immediate payment, it is questionable if the Plaintiff was still authorized to fill the Blank Cheque with the sum of HK$5,000,000.00 and to present it for payment should the Defendant fail to pay the HK$5,000,000.00 upon demand. The Defendant's version as to why the Blank Cheque was given to the Plaintiff 55.The Defendant said when he first learned the Plaintiff had presented for payment a cheque signed by him in December 2001, he could not immediate recall how such a cheque could have come into the Plaintiff's possession. He only realized it was a cheque signed by him when he subsequently received a copy of it from the Plaintiff's solicitors. 56.The Defendant said that after checking against old records and thinking long and hard he could say that the Blank Cheque was given to the Plaintiff in or about July or August 1990 when their relationship was the best. He also discovered that apart from the Blank Cheque which was numbered 037816, there was in fact another cheque numbered 037815 from the same cheque book which was never presented for payment. The cheque numbered 037815 might have been filled out wrongly or destroyed before the Blank Cheque was signed. 57.The Blank Cheque, said the Defendant, was given to the Plaintiff for the purpose of buying something she wanted when the Defendant was not around. For a small amount she could fill out the cheque and present it for payment. However, for a larger amount, i.e. anything more than about HK$10,000.00, she would have to seek the Defendant's consent before presentment for he had to ensure there was sufficient money in his bank account to cover the amount drawn. He said no consent had ever been sought by the Plaintiff and in due course he had completely forgotten about the Blank Cheque. 58.Miss Lau submitted that the stipulation of the relatively small amount of HK$10,000.00 did not sit well with the Defendant's alleged generosity, in particular, in the form of an alleged money gift of HK$2,000,000.00 just a few months ago. While, as dealt with below, I do not accept the Defendant's evidence regarding the money gift of HK$2,000,000.00 and can see the force of the Miss Lau's submission, I do not think what the Defendant said about the use of the Blank Cheque is necessarily inconsistent with the pattern of the Defendant's making substantial money gifts to the Plaintiff during the years 1989 and 1990. It all depended on the purpose of providing the Blank Cheque. The Defendant said the Blank Cheque was to enable the Plaintiff to "buy things" on his account when he was not around. It was not his intention to use the Blank Cheque as a means to make a huge or unlimited money gift to the Plaintiff. 59.In my view, the evidence shows that the Defendant could not remember the exact circumstances in which the Blank Cheque was signed and given to the Plaintiff. There is a strong element of reconstruction in the Defendant's evidence in this regard and hence the artificiality of the figure of HK$10,000.00. The Defendant's explanation also departed from his earlier version in the witness statement that the Blank Cheque was a kind of "souvenir". The Collateral Matters August 1989: money gift of HK$100,000.00 60.August 1989 was the very time when the Defendant and the Plaintiff became intimate after going on a trip to the USA together. According to the Defendant, on 21 August 1989, he gave the Plaintiff a money gift of HK$100,000.00 by a cheque. This was not denied by the Plaintiff who merely said she had no recollection about this payment. Against the background of their relationship, it is more probable than not that the Defendant did give the Plaintiff the sum of HK$100,000.00 as a gift. December 1989: HK$270,000.00 paid by the Defendant to the Plaintiff 61.There is no dispute that the Defendant gave the Plaintiff a sum of HK$270,000.00 by a cheque dated 13 December 1989. The Defendant said it was a gift to the Plaintiff for her to buy a diamond ring. The sum of HK$270,000.00 was decided upon after the Defendant had told the Plaintiff the most expensive gift he had bought for his wife cost HK$240,000.00. 62.The Plaintiff, however, alleged the Defendant merely entrusted the sum of HK$270,000.00 to her for the purpose of buying a sapphire ring for him, which she did. The Plaintiff however could produce no record of the purchase. When she was cross-examined on the details of the sapphire ring, the Plaintiff was unable to provide any detail. She said the blue sapphire was purchased in Thailand or India at HK$260,000.00 odd after the Defendant had given her the money. 63.The Defendant's version is in my view more probable. They had just started their "honeymoon" period and there was reason for the Defendant to demonstrate his sincerity in material ways. In cross-examination, the Plaintiff accepted that in December 1989 she and the Defendant went on a trip to Bangkok where she probably had asked the Defendant how much he paid for the most expensive gift for his wife. Further, the Plaintiff did not explain why she could know in advance the price of the sapphire, which was yet to be found in either Thailand or India, so that a cheque for the exact amount of HK$270,000.00 was issued for that purpose. Moreover, in my view, it would indeed be quite unusual for a man to be interested in spending HK$270,000.00 on a sapphire ring to wear by himself. March 1990: the sum of HK$1,172,550.00 (or US$150,000.00) 64.There is no dispute that in or about March 1990, the Defendant remitted a sum of HK$1,172,550.00 (or US$150,000.00) to the Plaintiff's US bank account. According to the Defendant, the money was a gift to enable the Plaintiff to pay off part of the mortgage loan for her house in San Francisco. 65.The Plaintiff's evidence on this matter is unclear. In her evidence in chief, she was unable to give any real explanation as to why the Defendant remitted this sum to her account. She said the Defendant told her to keep this money and open an account for him in the USA. She thought the Defendant was contemplating emigration to the USA. She denied it was gift to help her pay off the mortgage of the San Francisco property. 66.In cross-examination, she attempted to adopt what was stated in her witness statement in this regard, namely, the US$150,000.00 was repaid by 8 instalments of cash from an account with Chekiang First Bank, totaling US$148,320.00 between August and September 1992. However, it was obvious that she had no independent recollection of this matter. She did not even mention the repayment of this sum either by reference to the 8 cheques or at all when questioned about the US$150,000.00 by her own counsel. 67.Both the Plaintiff and the Defendant have been questioned extensively on an undated document relating to the remittance of the sum of US$137,220.86 or HK$1,060,024.50 ("the remittance document"). From the remittance document, it is tolerably clear that after "taking care" of the Defendant's money for some time, the Plaintiff caused an amount of money, which she believed ought to be US$137,220.86, to be remitted to the Defendant. She wrote a letter to the Defendant asking him to verify the accuracy of the remitted amount and intimated that she would be happy to help him again. By way of verification or record, the Defendant photocopied two bought and sold notes and a further note paper containing the Plaintiff's scribbling onto the reverse side of the Plaintiff's letter. He further typed certain calculations on the photocopy recording the receipt of 4 payments totaling US$107,220.00, two of which were evidenced by the bought and sold notes photocopied. There was a shortfall of US$30,000.00 (i.e. US$137,220.86 - US$107,220.00), which was acknowledged by the Plaintiff in the photocopied scribbled note. 68.The Defendant said the sum of US$137,220.86 should be money he entrusted with the Plaintiff for the purpose of buying stock and shares, and was different from the gift of US$150,000.00. The Defendant was however unable to recall the reason why the Plaintiff should be remitting US$137,220.86 to him. 69.Miss Lau put to the Defendant that the US$137,220.86 was a partial repayment of the US$150,000.00. 70.Although the position is far from clear, on balance I prefer the Defendant's version regarding the US$150,000.00, i.e. it was a gift to the Plaintiff for the purpose of reducing her mortgage of her San Francisco property. I am not satisfied that the US$132,770.00 referred to in the remittance document was a partial repayment of the US$150,000.00.
April 1990: HK$2,000,000.00 cash given by the Defendant to the Plaintiff 71.The Defendant alleged that in or about April 1990, he received HK$2,000,000.00 in cash from a Spanish customer called "Sirio Spri" and gave the money to the Plaintiff. This matter was not mentioned in his witness statement. He explained that he did not mention this matter in his witness statements because he did not have a written record of the payment. 72.I agree with Miss Lau that the Defendant's account of his receiving HK$2,000,000.00 in cash from the Spanish customer in February 1990, and keeping this huge amount of cash physically in the office drawer, and eventually giving the full sum in cash to the Plaintiff in April 1990, simply does not make sense. I reject his evidence in this regard. June 1990: HK$1,000,000.00 for the purpose of investing in shares in Kinson Limited 73.There is no dispute that on 14 June 1990, at the Plaintiff's suggestion, the Defendant advanced a sum of HK$1,000,000.00 to the Plaintiff for the purpose of purchasing the shares of Kinson Limited as an investment. The purchase did not materialize and the HK$1,000,000.00 was repaid by the Plaintiff to the Defendant on 3 July 1990. July 1990: the Blank Cheque 74.See the parties respective contentions set out above. August 1990: the Plaintiff's HK$2,000,000.00 loan to the Defendant's company with interest charged 75.It is common ground between the parties that in August 1990 the Plaintiff lent to the Defendant's company a sum of HK$2,000,000.00. According to the Defendant, his company encountered a short-term liquidity problem caused by discrepant letters of credit in a particular shipment. 76.According to the Plaintiff, apart from the cheque for HK$1,000,000.00 the Defendant gave her in November 1990, this HK$2,000,000.00 loan was the only transaction which she could recall clearly. There is also no dispute that the HK$2,000,000.00 was repaid by two equal instalments of HK$1,000,000.00, first by cheque dated 15 November 1990 and second by cheque dated 28 November 1990. 77.The Plaintiff required the Defendant to pay interest on the HK$2,000,000.00 loan, which upset the Defendant. The Defendant said the interest was paid in cash. The Plaintiff first said the interest was never paid but later said she could not remember if the interest was in fact repaid by the Defendant in cash. September 1990: HK$500,000.00 paid by the Defendant to the Plaintiff and another HK$500,000.00 paid by the Plaintiff to the Defendant 78.According to the Defendant, on 8 September 1990, the Plaintiff obtained a sum of HK$500,000.00 from him, which sum was repaid one week later on 15 September 1990. The Plaintiff said she could not remember about this transaction. The allegation set out in her witness statement, i.e. the HK$500,000 she paid to the Defendant on 15 September 1990 was a new loan made to the Defendant, is simply not made out. November 1990: the cheque for HK$1,000,000.00 - the Defendant's version 79.The Plaintiff's account of this cheque has already been dealt with above. As to the Defendant, he admitted issuing this cheque dated 30 November 1990 for the sum of HK$1,000,000.00 and intended the Plaintiff to have the sum. 80.According to the Defendant, the cheque for HK$1,000,000.00 was issued in the following circumstances. The HK$2,000,000.00 bridging loan from the Plaintiff in August 1990 enabled his company to make a handsome profit in the transaction concerned. Out of appreciation, he decided to give the Plaintiff a further money gift. He originally gave her a cheque without inserting any amount but subsequently wrote down HK$1,000,000.00 as requested by the Plaintiff. He told the Plaintiff to seek his consent before presenting the cheque as he had to ensure the bank account would be put in fund. The cheque, however, was never presented for payment. He and the Plaintiff had simply forgotten about it. 81.I agree with Miss Lau that the Defendant's version in this regard is difficult to believe. The Defendant said he was upset when the Plaintiff charged him interest on the HK$2,000,000.00 loan. It is difficult to understand why the Defendant would almost in the same breadth decide to give the Plaintiff HK$1,000,000.00 out of appreciation for lending the sum of HK$2,000,000.00. Furthermore, it is also difficult to understand why the Plaintiff should forgo and forget about this HK$1,000,000.00 gift which the Defendant had agreed to pay her. August 1991: the purchase of Serene Court 82.Serene Court was purchased in August 1991 in the sole name of the Plaintiff as her residence at the price of HK$6,475,000.00. There is no issue that the Defendant contributed towards the purchase price. The dispute only related to the extent of such contribution. The Defendant did not claim any beneficial interest in Serene Court. His contributions towards the mortgage payments were thus undoubtedly gifts to the Plaintiff. 83.As to the initial payment of the purchase price, the Defendant paid the deposit totaling HK$1,618,750.00 by three cheques. Another HK$3,532,500.00 was raised by a mortgage loan. The balance of the purchase price and legal fees amounted to HK$1,559,662.50 was paid by two cheques dated 22 and 25 January 1992 drawn by the Plaintiff, one cheque dated 22 January 1992 drawn by Cecil Art, and a cashier order dated 21 January 1992. 84.According to the Defendant, he reimbursed the Plaintiff the HK$1,559,662.50 by a cheque dated 15 January 1992 for HK$1,000,000.00 and another dated 28 February 1992 for HK$600,000.00. He further paid the sum of HK$48,750.00 by a cheque dated 12 July 1992 being the balance amount due to the solicitors as demanded by their letters dated 17 February 1992 and 20 June 1992. 85.The parties agreed that the Defendant did pay a total of 25 months' mortgage instalments (out of 60) between 1992 and 1996 by reference to the debit advices available. The Defendant said he had paid more but was unable to provide any documentary evidence. The Defendant accepted that in 1993 there was not a single payment traceable to his bank account. It is also common ground that the Defendant did not pay for at least 9 months in 1994, which the Defendant attributed to quarrels between them. 86.It is again common ground that in or about March 1993, the mortgage loan was reduced by HK$1,000,000.00. The Plaintiff said she did it by her own money. The Defendant said the HK$1,000,000.00 was provided by him and came from profits they made in a joint venture. 87.The mortgage was eventually paid off in February 1997 upon the payment of an amount of HK$1,459,511.51. The Plaintiff said the amount was paid by her but did not elaborate on its provenance. The Defendant disagreed and said that the money was his money coming from the proceeds of the sale the Queen's Road East Property acquired through a BVI company, which sum was in addition to the repayment of HK$5,000,000.00 to the Plaintiff for her share in the investment. However, the Defendant was unable to adduce any evidence to substantiate his claim. 88.It is unnecessary for me to come to any final or specific finding on the precise extent of the Defendant's contribution towards the purchase of Serene Court. On balance, however, I tend to think the initial down payment of over HK$3,000.000.00 was paid by the Defendant by direct payment and reimbursing the Plaintiff. As to the payment beyond this point, the Defendant is unable to prove that his contribution went beyond the 25 monthly instalments paid. January 1992: HK$1,000,000.00 from the Defendant to the Plaintiff 89.According to the Defendant, by a cheque dated 15 January 1992, he gave HK$1,000,000.00 as a money gift to the Plaintiff for paying off part of the mortgage loan of Serene Court. The Plaintiff said she could not remember receiving the HK$1,000,000.00. March 1993: HK$1,000,000.00 from the Plaintiff to the Defendant 90.There is no dispute that a sum of HK$1,000,000.00 was given by the Plaintiff to the Defendant on 1 March 1993. The Defendant was also accused of deliberately omitting to disclose the bank statement relating to this sum in order to mislead the Court. 91.The Defendant accepted it was a sum coming from the Plaintiff and suggested it could be part of the money related to the setting up of their joint venture, namely, the BVI company and the subsequent investment in real property. He was, however, unable to explain why he had initially omitted to mention this sum or disclose the relevant bank statement. 92.The Plaintiff has no recollection of "advancing a loan of HK$1,000,000.00" to the Defendant, although the allegation was mentioned in her witness statement. The financial transactions between the parties in 1993 are by no means straight forward. The bank statements of the BVI company with the Union Bank of Switzerland, which were not in the Defendant's possession, are not in evidence. The eventual disclosure of this statement was not, contrary to Miss Lau's initial suggestion, elicited by any written request for further discovery. Accordingly, I am unable to accede to Miss Lau's submission that the initial omission to disclose the Heng Seng bank statement regarding the HK$1,000,000.00 was a deliberate act of the Defendant to mislead the Court. 93.I should add that Miss Lau also submitted that the Defendant had deliberately concealed the relevant cheque stubs and that the Court should reject his evidence that cheque stubs more than 7 to 8 years' old were not kept. No application for specific discovery had been pursued in this regard. Notwithstanding Miss Lau's able cross-examination, I do not think this serious allegation has been made out. April 1993: HK$250,000 from the Defendant to the Plaintiff 94.The Defendant alleged it was a further money gift to the Plaintiff. The Plaintiff has no recollection of this sum or its purpose. Again, the allegation made in her witness statement that this was a partial repayment of the HK$1,000,000.00 loan from the Plaintiff to the Defendant is not made out. July and August 1993: the loan of HK$1,000,000.00 from the Plaintiff to the Defendant 95.It is common ground between the parties that on 9 and 10 July 1993, the Defendant borrowed HK$600,000.00 and HK$400,000.00 respectively from the Plaintiff. On 3 August 1993, the Defendant repaid HK$1,000,000.00 to the Plaintiff. Late 1993: the joint business venture under Freeway Holdings Limited 96.It is not disputed that on 25 October 1993, the Plaintiff and the Defendant set up a BVI company called Freeway Holdings Limited ("Freeway") for the purpose of investing in certain commercial properties in Hong Kong. In November 1993 Freeway purchased certain office premises at Queen's Road East at HK$12,698,000.00. It made a loss of HK$2,000,000.00 when the premises were sold on 2 December 1996. The Plaintiff's full investment in the sum of HK$5,000,000.00 in the venture was returned to her and the loss of HK$2,000,000.00 was absorbed by the Defendant. January 2001: HK$100,000.00 gift by the Defendant to the Plaintiff 97.As to this payment made on 2 January 2001, the Defendant said it was a money gift to the Plaintiff. In her evidence in chief and cross-examination, the Plaintiff accepted it was a gift given to her on her birthday, to compensate for not giving her a black American Express Card. 98.What was stated in her witness statement, namely, that the HK$100,000.00 was a partial repayment of a HK$1,000,000.00 loan advanced by the Plaintiff to the Defendant back on 1 March 1993, is thus untrue. There was no explanation as to why the witness statement would have been so put. Incident on 11 December 2001 and thereafter 99.On 11 December 2001 there was an emotional and unhappy incident happening at the Defendant's home in South Bay where the Defendant and his new girlfriend (now wife) were confronted by the Plaintiff at the doorstep. 100.There were considerable disputes as to what happened exactly. For example, whether the Plaintiff hit the Defendant with a folding chair, whether the Plaintiff demanded the return of the money the Defendant owed her on account of the Jade Stones and the Defendant asking for time to repay, whether a Rolex watch, a diamond ring and the Defendant's medals were taken away by the Plaintiff, etc. 101.The Plaintiff apparently was not in a stable state even on her own evidence. After gaining entry into Defendant's home after the Defendant's departure, she said she was unaware of the passage of time and did not return to her own home to eat or sleep. She admitted she did cut the Defendant's clothing. I reject her evidence she merely cut a corner for herself to keep as a souvenir. She also scribbled insulting words on envelopes found on the premises. I also reject her evidence that she later became calm and was able to respond positively to the request of the Defendant's maid to get her own maid to clean the flat. 102.There was understandably tremendous frustration and anger on the Plaintiff's part. In her own words, the Plaintiff felt that she had sacrificed too much for the Defendant, including turning his brothers into enemies, abandoning the things she liked, and downgrading herself in order to accommodate the Defendant. 103.What followed was the Plaintiff's presentation of the Blank Cheque on 14 December 2001 and the countermand for payment, as mentioned above. On or about 7 January 2002, the Plaintiff and the Defendant did meet up at the Dot Cod Seafood Restaurant near Cecil Art. Some old photographs and belongings were returned. However, the Plaintiff's claim for HK$5,000,000.00 was not resolved. There was considerable dispute as to what exactly was discussed at this meeting. However, I do not believe the Plaintiff's evidence that, upon reaching this point and after the event on 11 December 2001, the Defendant would still be saying to her that his new girlfriend was no comparison, or that they would be calmly talking about "feelings", or "beg to get back together again". Conclusion on the factual issue 104.In my view, neither the Plaintiff nor the Defendant has been completely frank in their testimonies. Both the Plaintiff's and the Defendant's accounts of the material facts suffer from varying degrees of inconsistencies and inherent improbabilities. 105.For the reasons already given, the Plaintiff's story regarding the existence and entrustment of the Jade Stones is inherently improbable and supported by extremely thin evidence. This view is further reinforced by the review of the collateral matters.
106.Further, in view of the timing of the presentment of the Blank Cheque against the development and the emotional break-up of the relationship in December 2001, one cannot dismiss the probability of the Plaintiff finding means to take revenge against the Defendant. The Defendant reacted strongly to the Plaintiff's threat of litigation and considered it an attempt to destroy his reputation. The Defendant was active in certain social circles including the boy scouts association, the St John's Ambulance Brigade and the Rotary Club. As can be seen in the witness statement of Patrick Koo Man Cheong Patrick Louis, the Plaintiff's action had attracted press coverage. 107.As to the Defendant's explanation regarding the Blank Cheque, it is far from satisfactory with inconsistencies already mentioned above. I believe these inconsistencies came about because the Defendant was unable to recall exactly why he signed it and gave it to the Plaintiff, and he was worried that unless he could come up with some detailed explanation, he would not be able to counter the Plaintiff's contention based upon the alleged entrustment of the Jade Stones. 108.However, after considering all the evidence, I have come to the view that it is more probable that the Blank Cheque was given by the Defendant to the Plaintiff as part of the efforts made by him to provide the Plaintiff with "security" through emotional, monetary and other provisions during the initial period of their relationship.
109.The Defendant was apparently trying hard to convince the Plaintiff of his sincerity and dependability as a partner or husband, so that the Plaintiff would feel more confident and determined to leave her ex-husband. It is not disputed that the Defendant had made numerous marriage proposals to the Plaintiff, including the final one in April 2001, none of which was accepted. 110.It is also significant that the Plaintiff in fact took the plunge in May 1990 by leaving her ex-husband and matrimonial home, and moved into not just the Defendant's premises in Grand Garden and also into his care. This was a time when the Plaintiff, who was already in her mid forties then, needed a lot of re-assurance from the Defendant, as she would be giving up a lot and taking on a huge risk in terms of her family, reputation and future. There is thus a ring of truth when the Defendant said in his cross-examination that the Blank Cheque was given to the Plaintiff to "傍身 or pong sun" (to use in case when necessary) without too much thinking or discussion between them. 111.In coming to this view, I am very conscious of the fact that the Defendant had given explanation on other important matters which are incredible and which reflected badly on his credibility as a witness. In particular, I have already rejected his evidence regarding the alleged cash gift of HK$2,000,000.00 in April 1990 and the HK$1,000,000.00 cheque dated 30 November 1990. However, even if the Defendant was lying on these matters, it does not follow that the Plaintiff's version regarding the Jade Stones would be rendered more believable. 112.In relation to the alleged gift of HK$2,000,000.00, the Defendant might have felt that such an allegation was necessary for plugging an apparent loophole in his case of "generosity" towards the Plaintiff. In August 1990 it was not disputed that his company encountered a liquidity problem and he borrowed HK$2,000,000.00 from the Plaintiff. This fact does not sit well with the Defendant's contention that it was he who had always been showering the Plaintiff with money gifts. The Defendant might have thought that the impression resulting from the Plaintiff's HK$2,000,000.00 loan could be alleviated by this alleged HK$2,000,000.00 money gift. He could then say that but for the HK$2,000,000.00 cash gift, he would not have encountered the liquidity problem, and that the HK$2,000,000.00 loaned by the Plaintiff to him in August 1990 was essentially the same money he gave to the Plaintiff 4 months earlier. 113.Likewise, the incredible reason he gave for the issue of the HK$1,000,000.00 cheque dated 30 November 1990, namely, to show his appreciation for the Plaintiff's provision of the short-term loan of HK$2,000,000.00, might well be motivated by the same thinking that he needed to play up his "generosity" and play down any appearance of financial inferiority vis-à-vis the Plaintiff. 114.However, even if I were to disbelieve the Defendant entirely and reject all his evidence, it does not and cannot restore the credibility of the Plaintiff or her story or compel me to uphold her claim. To say the Defendant is incredible does not necessarily mean that the Plaintiff is truthful. 115.Evidential matters pro and con are quite evenly balanced in many of the factual issues raised. However, it is so not because both parties have given this Court a cogent account of their respective cases. On the contrary, it is because both accounts suffer from significant deficiencies. After weighing all the evidence, I have come to the view that the Plaintiff's case is so thin and inherently improbable that she has failed to discharge the onus of proof that she had the Jade Stones and entrusted them with the Defendant for sale as alleged. The claims for money had and received and for conversion 116.Since the Plaintiff has failed to prove the central issue of fact, it is unnecessary for me to go any further to deal with the questions of law arising from the various causes of actions raised. 117.However, out of deference to the arguments advanced by counsel, I would briefly add the following observations first in respect of the Plaintiff's claim for money had and received:
118.As regards the claim for conversion:
Conclusion 119.For the reasons given above, the Plaintiff's claim is dismissed and I make a cost order nisi that the Plaintiff do pay the Defendant's costs of the action to be taxed if not agreed.
Representation: Ms Selina Lau, instructed by Messrs Andrew Lam & Co., for the Plaintiff Mr Alfred Liang, instructed by Messrs David Wong & Co., for the Defendant |