Shen Dong Sung v. Thomas Tak Suen Shuen Alias Shum Chuk Suen Thomas and Others

HCA001612A/1986

IN THE HIGH COURT OF JUSTICE

HONG KONG

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BETWEEN

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Coram: Hon. Jones J. in Court

Dates of hearing: 9th, 10th - 13th, 16th - 19th, March 1987

Date of delivery of judgment: 26th March 1987

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JUDGMENT

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1. The plaintiff, by this action, seeks inter alia an order for . accounts and enquiries against the defendants in respect of a partnership at will that was carried on under the name of Oriental Industrial Company (O.I.C.). A further claim was also made against the 1st defendant for damages for breach of fiduciary duty arising from allegations that he had misappropriated partnership funds for the benefit of himself and his wife. However, after hearing submissions by counsel, I made a ruling on the 11th March that evidence in these proceedings relating to the allegations of misappropriation was irrelevant and inadmissible. As a result, the only issue that now falls to be determined is whether the plaintiff was a partner in O.I.C. or whether as alleged by the defendants he was employed as a manager.

2. The evidence before me consists of viva voce testimony from the plaintiff and the 1st defendant, hearsay evidence of the 2nd and 3rd defendants, and a large amount of documentary evidence.

3. I will deal first with some of the background. The plaintiff is now aged 69. He was employed by Jardines Airways Limited (Jardines) from 1947 as a traffic officer and later as the duty officer at Kai Tak airport until he retired in 1970. During the period from 1961 until 1963, he went to London on three courses organised and sponsored by Jardines that related to traffic operations. When he was in England, he observed that wall-paper was used in most English homes in contrast to Hong Kong where he had not seen it before. Accordingly after attending the second course in 1962, he brought back with him to Hong Kong some sample rolls of wall-paper in order to try them out here with a view to its commercial development. However, as he lacked business experience, the plaintiff decided to approach the 1st defendant in order to consider the commercial possibilities for the product in Hong Kong. The 1st defendant is the plaintiff's cousin and 19 years his junior and at this time, he was engaged in the business of costume jewellery with O.I.C. of which company the 2nd and 3rd defendants who are brothers and their mother Madam Tsang Chung Tin were registered as the partners. According to the business registration application form, the business commenced on the 1st January 1960. Although Madam Tsang Chung Tin was registered as a partner she was according to the 1st defendant's evidence acting as his nominee. This was because the 2nd and 3rd defendants considered that the 1st defendant was too young to be recorded as a partner and they were concerned that they may become responsible for liabilities incurred by him as a result of inexperience. In fact no steps were taken to register the name of the 1st defendant as a partner until 1979 when an application was made to the Business Registration Office. This application does not appear to have been acted upon for the 1st defendant was not in fact registered as a partner of O I. C until the end of 1985.

4. The plaintiff testified that he was introduced to the 2nd and 3rd defendants at the end of 1962 by the 1st defendant and attended a meeting at a restuarant when the parties agreed that a wall-paper business would be started with a capital of $40,000 to be paid in equal shares and the business to be operated by O.I.C. However, as the plaintiff did not have sufficient funds for this purpose, his share was paid by the 1st defendant in consideration for the plaintiff agreeing to start the business. This evidence was disputed by the 1st defendant who claimed that he made a contribution of $20,000 towards the capital and claims thereby that he is entitled to a 50% share in the partnership whilst the 2nd and 3rd defendants each made a contribution of $10,000 and therefore are each entitled to a 25% share According to the plaintiff the 1st defendant reimbursed himself for the plaintiff's share about 2 years later from the company's account.

5. It is clear that the wall-paper division of O.I.C. has always been conducted separately from the costume jewellery side, but it has never been registered as a business on its own. The defendants regarded the wall-paper division as a sub-partnership of the costume jewellery side of the business while it is common ground that the plaintiff has at no time had any interest in the costume jewellery side. Further it is not in dispute that both the 2nd and 3rd defendants have at all times been sleeping partners in the activities of the wall-paper business apart from the signing of cheques.

6. From the commencement of the wall-paper business towards the end of 1962, the plaintiff devoted as much of his time as he could afford to it consistent with his duties with Jardines He was concerned with the importation of wall-paper, sales and the day to day management of the business. On the other hand the 1st defendant did not take a very active part during the first two years, but later when he became more involved, he dealt with the company's finance and tax matters. Later he became concerned with sales. After the plaintiff retired from Jardines in 1970, he began to devote his full time working for O.I.C..

7. From small beginnings, the wall-paper business began prosper whilst the costume jewllery side declined and ceased altogether in about 1979. When the costume jewellery business closed, the 1st defendant also worked full time for the wall-paper business. Gradually he took over the greater part of the sales and development side of the business whilst the plaintiff concentrated upon internal management.

8. Substantial profits were made from the wall-paper business which resulted in various investments being made by the plaintiff and. the defendants. Three properties in Hong Kong were purchased in their own names as tenants in common out of the profits of the company whilst other properties were purchased in the same way through a company called Hop Kee Wo Enterprises Limited (H.K.W.) to which I shall return later. In addition a large shareholding in the Hong Kong stock market was acquired over the years which shares were held. either individually or jointly by the plaintiff and the defendants under various permutations.

9. The breakdown in the relationship between the parties occurred at the end of 1985 when the plaintiff discovered, whilst the 1st defendant was in the United States, certain irregularities in the books and accounts of O.I.C. This led to the plaintiff suspecting that the 1st defendant had misappropriated funds of O.I.C. for his own purposes. The plaintiff, as a consequence, reported the matter to the 2nd and 3rd defendants who then entered into two agreements with the plaintiff dated the 30th December 1985 end the 2nd January 1986, which can be found in the bundle C29 -36. These agreements set out details for the future conduct of the company including proposed action to betaken to obtain the resignation of the 1st defendant from O.I.C. The plaintiff and the 2nd and 3rd defendants also agreed to sell the share portfolio and to uplift some time deposits that were held by O.I.C. and H.K.W. The proceeds from the sale of the shares and the time deposits were agreed to be shared between the plaintiff and the three defendants.

10. When the 1st defendant returned to Hong Kong at the beginning of January 1986 from the United States, he saw the plaintiff and the 2nd and 3rd defendants when certain discussions took place about the allegations of misappropriation. However the 1st defendant also saw the 2nd and 3rd defendants about these allegations later in the absence of the plaintiff when he showed them some accounts and where he claims that he put their minds at rest. Following his explanation which was made on a Sunday afternoon, the 2nd and 3rd defendants took steps to resile from the agreements that they had made with the plaintiff and changed their allegiance to the 1st defendant.

11. Negotiations took place at the beginning of 1986 between the plaintiff and the defendants in an attempt to achieve a settlement, but proved abortive. The plaintiff eventually through his solicitors, dissolved the partnership of O.I.C. by a written notice given to each of the defendants on the 20th March 1986.

12. The 1st defendant in his evidence denied that the wall-paper business was the idea of the plaintiff, but that O.I.C. obtained the agency to deal in wall-paper from a company in England called Sanderson through the introduction of Mr. Michael Arnold, a customer from the United Kingdom of the costume jewellery business, which agency was obtained in place of the former agent Lane Crawford. The 1st defendant nevertheless agreed that the plaintiff did bring back some rolls of wall-paper from England, but that it was for his own home. The 1st defendant maintained that it was purely coincidence that the plaintiff had shown an interest in wall-paper at the same time. Thereafter the 1st defendant said that the plaintiff was employed by O.I.C. in the wall-paper business on a part-time basis until 1970 and was paid a monthly salary together with expenses. In 1970, the 1st defendant claimed that the plaintiff took early retirement from Jardines and became employed by O.I.C. as a manager. However, as O.I.C. could not afford to pay a salary commensurate with' that received by the plaintiff at Jardines, the 1st defendant made an agreement with him to pay 50% of his share of the profits.

13. I shall now deal with the documentary evidence under various headings.

Bank Mandates

14. The first account opened for the wall-paper business referred to as the No. 2 account was opened with the head-office of the Bank of Canton, Hong Kong on the 9th November 1962, when the authorised signatories were the plaintiff and the 2nd defendant who were required to sign jointly. This arrangement continued until the 7th May 1965 when it was changed to either the plaintiff or the 1st defendant and the 2nd defendant. This mandate remained in force until the 11th October 1965 when it was changed to the plaintiff or the 1st defendant and the 2nd or the 3rd defendant. This arrangement continued to operate until the breakdown in the relationship between the parties.

15. A second account was opened by the wall-paper division with the Bank of Canton in San Francisco on the 26th December 1967 which required the signatures of either the plaintiff or the 1st defendant together with either the 2nd or the 3rd defendant. This mandate has not been changed.

16. During the early 1970s, a third account was opened with the Hong Kong & Shanghai Banking Corporation where the authorised signatories are the plaintiff and the 1st defendant. Document B13 is a bank mandate dated the 20th July 1983 which is a re-issue of earlier mandates and which is signed by both the plaintiff and the 1st defendant. The mandate is described as a 'Mandate For Accounts of A Partnership' and refers to the signatories as the present partners in the firm of Oriental Industrial Company for which they accept joint and several liability. The form also states that the mandate has been signed by all partners of the firm. Both the plaintiff and the 1st defendant, on the form for specimen signatures, described themselves as manager of Oriental Industrial . Company Neither the 1st defendant nor the 3rd defendant signed this document nor earlier mandates.

Small Claims Tribunal

17. In 1983, the plaintiff conducted on behalf of O.I.C. a claim made in the Small Claims Tribunal. In connection with this claim, a letter was written on the 23rd November 1983 to the Small Claims Tribunal which can be found at B443 in which the plaintiff certified that Oriental Wall-paper Company was a hundred percent owned subsidiary of the Oriental Industrial Company and signed himself as executive partner of O.I.C. This statement was countersigned by the 1st defendant as manager of Oriental Wall-paper Company to be true and correct.

Correspondence

18. A considerable volume of correspondence was produced in which the plaintiff has described himself as executive partner. Examples include letters written to the International Mail Order Service, Jones Laing Wootton and the solicitors who acted for O.I.C., K.M. Lai & Li.

Notices of Insurance and Employer's Returns

19. Notices of insurance pursuant to the Employee's Compensation Ordinance which were posted at the various premises occupied by O.I.C. and a number of Employer's returns of remuneration and pensions paid to employees were also signed by the plaintiff in the same capacity.

Other Documentary Evidence

20. Other evidence which acknowledges that the plaintiff was a partner is contained in a letter dated the 6th January 1986 to Winfield Design Associates Inc. which is signed by the plaintiff and the 2nd and 3rd defendants, which gave authority to the plaintiff to discuss business matters on behalf of O.I.C. after the alleged misappropriations had been discovered. This letter can be found at C16. Further evidence is contained in the two agreements dated the 30th December 1985 and the 2nd January 1986 to which I have already referred.

21. The only documentary evidence produced on behalf of the defendants that indicates that the plaintiff was not a partner is set out in a letter dated the 20th July 1970, which is signed by the plaintiff as manager and is addressed to the Naturalisation Section of the Immigration Department which certifies that the 1st defendant is the managing partner of Oriental Industrial Company and owns a 50% share of the interest of the company. This letter which can be found at F18 has been typed on an O.I.C. letterhead in which O.I.C. is described as 'Agents Wall-paper - Furnishing Fabrics - Costume Jewellery'.

Oriental Wall-papers Company (O.W.C.)

22. This company was formed in 1971 as the retail arm of O.I.C, as it was considered that it would better reflect the business interests of O.I.C. However, the firm was registered only in the names of the plaintiff and the 1st defendant and not in the names of the 2nd and 3rd defendants. On the 10th January 1986, the 1st defendant gave notice to the plaintiff, dissolving the partnership with effect from the 31st January 1986. However, by a letter dated the 28th may 1986, the 1st defendant, in response to a request by the plaintiff to inspect the accounts and tax returns of O.W.C., refused this request, claiming that O.W.C. was owned by O.I.C It was the plaintiff's contention that O.W.C. was company that was held in trust for O.I.C. During his evidence, the 1st defendant retracted his previous refusal to allow the plaintiff to see the accounts and tax returns.

Oriental Shades and Accessories Limited (O.S.A.L.)

23. O.S.A.L. under its former name of Instaccato Limited was incorporated in August 1975 and was concerned mainly with the. manufacture and sale of lamp shades, blinds and other furnishings. In about 1974 or 1975, the plaintiff and the 1st defendant each purchased 1,400 shares in the company out of the funds of O.I.C. A petition to wind-up the company on the just and equitable ground was presented by the 1st defendant on the 14th November 1986. No opposition was filed to the petition with the result that the Company was wound-up on the 5th January 1987.

Hop Kee Wo Enterprises Ltd.

24. H.K.W. was incorporated in 1971 for the purpose, inter alia, of purchasing land and property development. The plaintiff and the three defendants each purchased 5,000 shares in the company in 1975 out of the profits of O.I.C. Payment was made to H.K.W. and the amount was divided into four in the books of H.K.W. and treated as loans from the four shareholders to H.K.W. H.K.W. has been used to buy five properties on behalf of O.I.C., three of which have been used as godowns for storage purposes for O.I.C. Surplus monies that have been acquired by H.K.W. as a result of payments of rent have been distributed amongst the plaintiff and the three defendants whilst other monies have been placed upon fixed deposit. A petition to wind-up this company was presented by the plaintiff on the 20th March 1986 and has been fixed for hearing after the conclusion of the present action.

Breakdown of relationship between the parties

25. Towards the end of 1985 when the 1st defendant was in the United States, the plaintiff received a letter from the Inland Revenue Department dated the 21st November 1985, which was addressed to the managing partner of O.I.C. enquiring if Mr. Tsang Chung Tin which appears to be a mistake for Madam Tsang Chung Tin had retired from the partnership and whether the 1st defendant had been admitted as a partner The plaintiff was disturbed to learn . of the contents of this letter for he gained the impression that the 1st defendant was attempting to register himself as a partner at his own expense for he came to realise that despite numerous assurances in the past, the 1st defendant had failed to register his name as a partner with the Business Registration Office. It appears from the Business Registration records that Madam Tsang Chung Tin had given up her share in the partnership in August 1979 and returned to Mainland China. The purported signature of Madam Tsang Chung Tin on this document was in fact not written by her but by the 2nd defendant. In September 1979, the 1st defendant is recorded as becoming an incoming partner of O.I.C. as from the 1st January 1972 although the Business Registration Office did not apparently act on this information and it was not rectified until the end of 1985.

26. Following his discovery, the plaintiff took steps to register his name as a partner of O.I.C. in December 1985, but his name was removed on the 9th January 1986 after a letter had been written to the Business Registration Office by the solicitors on behalf of the defendants and signed by each of the defendants, stating that the change of partner was unauthorised. The letter also stated that the plaintiff had never been and would not be admitted as a partner unless all the defendants agreed in writing.

27. The plaintiff also learnt that tax returns had been submitted in recent years by the 1st defendant on the basis that only the 1st, 2nd and 3rd defendants were partners and that their shares in the partnership were respectively 30%, 35% and 35%.

28. After the notice of dissolution of the partnership of O.I.C. was sent on behalf of the plaintiff to the three defendants on the 20th March 1986, the defendants' solicitors wrote to the plaintiff on the 9th April 1986 informing him that his employment as manager of O.I.C. had been terminated with immediate effect and that he was entitled to two months' salary in lieu of notice.

29. The defendants later succeeded in having the plaintiff's name removed as a signatory of the bank accounts of the Bank of Canton in Hong Kong and the Hong Kong & Shanghai Banking Corporation, but failed to have his name removed from the bank account of the Bank of Canton in San Francisco.

Evidence of the 2nd defendant

30. The 2nd defendant suffered a stroke in December 1986 and was admitted into hospital on the 23rd December 1986, and he is still in hospital. Although he understands what is said to him, he is unable to talk. Accordingly, his evidence was admitted under the hearsay provisions of section 47 of the Evidence Ordinance.

31. He said that the plaintiff approached him and the 3rd defendant in December 1985 with regard to the allegations of misappropriation by the 1st defendant of the funds, of O.I.C. The plaintiff claimed that the matters alleged required investigation and that as the 2nd and 3rd defendants were not sufficiently equipped or interested to pursue the investigations themselves, he would be the best person to conduct them and that it would facilitate his investigations if he were to be treated as a partner of O.I.C.

32. The 2nd defendant went on to say that he and the 3rd defendant were willing to agree to that suggestion as the plaintiff was in any event, entitled to a 25% share of the profits of the wall-paper division, so that he and the 3rd defendant agreed to sign the documents already referred to, which acknowledged the status of the plaintiff as a partner of O.I.C.

33. After the 1st defendant returned to Hong Kong in early January 1986, he and the 3rd defendant were satisfied with the explanations given by the 1st defendant that he had not misappropriated any funds of the partnership, so for that reason, he and the 3rd defendant no longer considered it necessary to continue to recognise the plaintiff as a partner of O.I.C. Accordingly, he and the 3rd defendant agreed to countersign the letter dated the 9th January 1986 written by K.M. Lai & Li to the Inland Revenue Department stating that the plaintiff was not a partner in the firm.

34. In a statement that he made to the Commercial Crimes Bureau on the 20th October 1986, the 2nd defendant said that he and the 1st and 3rd defendants each held a one-third share in O.I.C. That in about 1963, the wall-paper department was established in the company in which he and the 3rd defendant invested 25% each, whilst the 1st defendant invested 50%. He also said that when the wall-paper department was established, the plaintiff joined O.I.C. as the manager of the company managing the internal administration. In this statement, he also said that he and the 3rd defendant were aware that when H.K.W. deposited money into O.I .C s account with the Hong Kong & Shanghai Banking Corporation, the 1st defendant immediately took out this money from the account and made a record in the account book of O.I.C. in the form of account payable (contra). This evidence is in marked contrast to the contents of the agreement dated the 2nd January 1986 with the 3rd defendant and the plaintiff when he referred to alleged corruption activities of the 1st defendant and to. a discrepancy of $670,000 in the accounts of H.K.W. Paragraph 8A of the re-amended defence refers to a sum of $640,147.55 in respect of cheques drawn between July 1981 and June 1984 as having been paid to the 1st defendant in respect of entertainment expenses which had the consent of the 2nd and 3rd defendants.

Evidence of the 3rd defendant

35. The evidence of the 3rd defendant was also admitted under the hearsay provisions of the Evidence Ordinance as he left Hong Kong for Canada on the 8th March 1987 and he is still there. The 3rd defendant was in Hong Kong on the 31st December 1986 for on that day, he made a statement to the Commercial Crimes Bureau. He confirms the evidence of the 2nd defendant that the 1st defendant had permission to withdraw sums from O.I.C. Again this contradicts the evidence provided by the agreement between himself, the 2nd defendant and the plaintiff which was dated the 2nd January 1986. The 3rd defendant went to Canada earlier this year but he returned to Hong Kong on the 8th February. However, as I have said, he again left on the 8th March, the day before the present hearing. It is significant that the hearsay notices were filed on the 5th February 1987 and counter-notices were filed on the 16th February 1987, requiring both the 2nd and 3rd defendants to attend the trial to give evidence. No efforts were made to take the evidence of the 3rd defendant de bene esse before the trial. By his solicitors' affirmation made on the 18th March 1987, the 3rd defendant says he left on the 8th March for business purposes and had executed a power of attorney in favour of the 2nd defendant, authorising him to defend the action. From the evidence it appears that the 3rd defendant has now emigrated to Canada.

36. The defendants place great reliance upon a letter written by their solicitors to the plaintiff's solicitors on the 30th January 1986 in which the defendants made a proposal to distribute to the plaintiff about 25% of the partnership assets on the grounds that as he had made no contribution of capital to the partnership, he was not therefore entitled to any share of the capital. Quite understandably this proposal was not accepted by the plaintiff.

37. The defendants did not accept the partnership implications of the bank mandate of the Hong Kong & Shanghai Bank as it was merely in standard form which also applies to that of the Bank of Canton. Further as the mandate of the Hong Kong & Shanghai Bank was required to be signed by all the partners, it was contended that the plaintiff had signed a false document.

38. Mr. Ching, who appeared on behalf of the defendants, submitted that there was evidence that the plaintiff was an employee for he had received regular monthly sums from O.I.C. which indicated that he was receiving a salary and also received an extra payment of one month's salary at Chinese New Year. No reference is made in the accounts that these amounts represented payments of salary nor is there any evidence that any returns were ever made to the Inland Revenue Department to support the defendants' contention that the plaintiff was a partner. Indeed it is significant that the 1st defendant received exactly the same benefits as the plaintiff.

39. With regard to the date for his registration as a partner, in 1985 which was the subject of criticism, the plaintiff said that he was not aware that he was entitled to back date this date for he believed that the document had to reflect the date of the actual amendment.

Conclusions

40. It was abundantly clear from the documentary evidence that the plaintiff was held out to the outside world as a partner of O.I.C. The banks must have accepted him as a partner from the mandates that were signed and in which he is acknowledged to be a partner. The insurance notices posted on the various premises of O.I.C. clearly indicated to the staff that he was a partner and I am quite sure that the 1st defendant was aware of these notices. It would be unrealistic to come to a contrary view. The correspondece in which the plaintiff is described as executive partner strongly supports his case.I am unable to accept the submission made on behalf of the defendants that any of the documents that he signed were self-serving for until the actual breakdown in the relationship between the parties, the plaintiff had no idea that his position as a partner was to be challenged. Further the criticism levelled at the plaintiff that the bank mandate of the Hong Kong & Shanghai Bank was a false document, also applies to the 1st defendant but does not in any event detract from the evidence adduced by the plaintiff that he is a partner. Indeed, it has little validity for the 1st defendant was himself responsible as I have already said for the financial side of the business. The only evidence to the contrary was the letter addressed to the Immigration Department, F18. In respect of this letter, I have no hesitation in accepting the evidence of the plaintiff and reject that given by the 1st defendant I am quite satisfied, that the letter was drawn up and presented the plaintiff by the 1st defendant for signature and that he agreed to do so as a favour. The document, in any event, on the 1st defendant's own evidence, does not accurately reflect his true interest in the partnership for although he claimed to have a 50% interest in the wall-paper division, he had a 30% interest in the costume jewellery side.

41. I found the plaintiff to be a very impressive and thoroughly honest witness. He gave his evidence clearly although at times he required some interpretation. He is an intelligent man and gave careful consideration to his answers. On the other hand, I found the 1st defendant to be a most unconvincing witness upon whose evidence where it conflicts with that of the plaintiff I place no reliance. In fact on several matters he was not telling the truth. In particular, I find that he was not telling the truth about the meeting with Mr. Arnold. His, evidence that the plaintiff happened to bring back rolls of wall-paper at this time for his own home was most unconvincing. I have no hesitation in rejecting his evidence that his explanation that the plaintiff brought the wall-paper was merely by way of coincidence. Again his reasons for allowing the plaintiff to use the title executive partner because he was senior and it would amount to a loss of face had a hollow ring. Another example of the 1st defendant's evidence that was totally lacking in credibility was his assertion that he entered into a voluntary agreement in 1970 to pay 50% of his share of the profits to the plaintiff. Although this allegation was not put to the plaintiff in cross-examination, it was clearly in my judgment wholly untrue. His evidence that the 2nd and 3rd defendants were satisfied with his explanation after his return from the United States which resulted in their change of allegiance did not have the hallmark of truth. There is no doubt in my judgment that the plaintiff returned to Hong Kong from England with the idea of setting up the wall-paper business and that the 1st defendant, together with the 2nd and 3rd defendants, agreed to enter into a partnership for this purpose. Although the company was called O.I.C. which was carrying on the costume jewellery business, the wall-paper division was set up as a separate entity with different partners and different shares. It was not as submitted for the defendants a sub-partnership of the costume jewellery business. The subsequent conduct of the defendants over the years clearly showed that the plaintiff was regarded by them and accepted by them as an equal partner. I accept the plaintiff's evidence that he was not recorded as a partner was entirely due to the failure of the 1st defendant to take the necessary steps to have him registered as a partner, and I am satisfied he was telling the truth when he believed the date that he submitted to the Business Registration Office was the date of amendment. The plaintiff's position in O.W.C., O.S.A.L. and H.K.W. also provide cogent evidence that the plaintiff was a partner. Where the evidence conflicts between that of the plaintiff and the 1st defendant, I have no hesitation in accepting beyond any doubt that given by the plaintiff. One matter of significance that occurred during the evidence of the plaintiff, was when he was shown the letter dated the 9th April 1986 in which the defendants purported to give notice of the plaintiff's termination of his employment as a manager. The plaintiff was quite naturally deeply hurt, and understandably showed some degree of emotion at this point. It was a cruel letter written without the slightest justification. Another example upon which I do not propose to dwell was the attitude shown towards the plaintiff with regard to the vans and car which can only be described as trivial and indicate that the 1st defendant was clutching vainly at any straw that he could find. There was no comparison between the demeanour of the plaintiff and that of the 1st defendant. The plaintiff, as I have said, acquitted himself well in the witness box and proved himself to be an excellent witness whilst the 1st defendant was totally lacking in candour He was after a business relationship that lasted for 23 years, prepared to lie for his own reasons and to serve his own purposes. The 1st defendant's conduct can only be described as despicable. He has chosen to humiliate a man who is his close relative several years his senior and the person who is his responsible for the idea of setting up the business and I am sure was to a large extent responsible for its great success.

42. The 2nd defendant's evidence which has not been tested on oath or by cross-examination, was in any event, most unsatisfactory. The reasons for changing allegiance. from the plaintiff to the 1st defendant was not explained. I do not place any reliance on the evidence of the 2nd defendant.

43. Again the 3rd defendant left the jurisdiction before the commencement of this trial. The same criticisms that I have directed towards the 2nd defendant equally apply to him and I have no hesitation in placing no reliance, whatsoever, upon the 3rd defendant's evidence on the grounds that it was neither tested in the witness box by examination and cross-examination and in any event his evidence conflicts in the same way as that of the 2nd defendant. His failure to appear in Court renders his evidence worthless.

44. In my judgment the plaintiff entered into a partnership at will in 1962 with the three defendants which, at the time, came under the umbrella of the costume jewellery division. The costume jewellery division was quite separate and the plaintiff had no interest in that part of the business. The partners in the costume jewellery business were the 2nd and 3rd defendants and their mother who was later replaced by the 1st defendant. The shares in that part of the business were quite separate from the wall-paper division. I am wholly satisfied that the plaintiff and each of the defendants was entitled to a one quarter share in the wall-paper division. The evidence in this case both documentary and that given in the witness box was overwhelming. Not only did the plaintiff receive his share in the profits, but he was actively engaged in the activities and decision making of the Company.

45. I have, therefore, no hesitation in holding that the plaintiff was a partner in the wall-paper division of O.I.C. and make a declaration that that partnership was dissolved on the 20th March 1986. I will hear counsel as to the form of order that should be made.

Representation:

Mr. J. Swaine, Q.C. & Mr. R. Whitehead (Vivien Chan & Co.) for the Plaintiff

Mr. C. Chin g & Mr. Clifford Smith (K.M. Lai & Li) for the Defendants