TAN KAH ENG v. The executors or intended executors of the estate of TAN ENG KHIAM, deceased, namely TAN SECK YEOW and TAN SECK CHUN
HTML content
HCA 9640/1999
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
HIGH COURT ACTION NO 9640 OF 1999
------------------------
BETWEEN
| TAN KAH ENG | Plaintiff | |
and | ||
| The executors or intended executors of the estate of TAN ENG KHIAM, deceased, namely TAN SECK YEOW and TAN SECK CHUN | Defendant | |
------------------------
Before : Mr Recorder Shieh SC in Court
Date of Hearing : 25, 28 – 30 November, 1 – 2, 23 December 2011
Date of Judgment : 26 April 2012
-------------------------
J U D G M E N T
--------------------------
The nature of the claim
1. The plaintiff in this case, Tan Kah Eng, and the defendant, Tan Eng Khiam, are both Singaporean nationals. The defendant is the plaintiff’s uncle.
2. This action was commenced by writ on 11 June 1999. For reasons I shall explain later, it had progressed at an unusually slow pace. In October 2007 the defendant suffered a heart attack. Thereafter he became mentally incapacitated and by order dated 21 July 2008, his brother Tan Eng Yam was appointed guardian ad litem. The defendant unfortunately passed away in 2009 and by order dated 25 May 2011, Tan Seck Yeow and Tan Seck Chun were appointed to carry on the proceedings on behalf of his estate.
3. The action started off as a simple one for the recovery of money due and owing from the defendant to the plaintiff, lent on divers dates in 1997 and 1998 totaling S$3,120,190 and HK$3,000,000. In the Statement of Claim theplaintiff also relied on a letter dated 3 May 1998 headed “Acknowledgement of Friendly Loans” which appeared to bear the defendant’s signature, and which contained an acknowledgement of indebtedness.
4. The Statement of Claim set out the particulars of the loans as follows :‑
Date of loan Amount of loan 2 October 1997 S$1,732,330 13 November 1997 S$420,000 20 December 1997 S$100,000 30 December 1997 S567,000 17 January 1998 S300,000 21 February 1998 HK$3,000,000 Total : S$3,120,190 HK$3,000,000
5. I would add that “Date of loan” were the actual words used in the Statement of Claim. The plaintiff’s evidence, however, was that the loans were actually not lent on the “date of loan” set out in the Statement of Claim. Those dates were dates of six vouchers which appeared to have been signed by the defendant and the amounts pleaded were the amounts stated on the respective vouchers. According to the plaintiff’s evidence he had lent various sums of money in RMB, Singapore dollars and HKD to the defendant from August 1997 to February 1998. Most of the time he handed over the money in cash. Sometimes money was lent by way of giving of cheques, which the defendant would encash at the bank. Notes would be signed by the defendant or his girlfriend every time such loans were made. From time to time, the plaintiff and the defendant would take stock of the money lent so far and convert them into Singapore dollars (taking the mean of the highest and lowest exchange rate on the date the voucher was signed), and the defendant would sign on the payment vouchers as a form of receipt of loans (the figure written on each voucher would be the total of the loans thus consolidated and converted).
6. Each of the vouchers is in a standard form, containing pre‑printed English words of “pay to”, “received by” and “approved by”. On each of them, the defendant’s name was written next to “pay to”; the defendant’s signature appeared next to “received by” and the plaintiff’s name appeared next to “approved by”. Each voucher stated (in handwriting) the amount outstanding (five of them in Singapore dollars and one in HKD) in arabic numerals. In the middle of each voucher there were handwritten Chinese words indicating that the amount (written out again in handwriting in Chinese characters) was borrowed. According to the plaintiff, in return for the payment vouchers, the plaintiff surrendered all the notes previously signed by the defendant (or his girlfriend) without keeping any copies.
7. I should also mention that, other than relying on the vouchers and pleading the letter dated 3 May 1998 referred to above, the plaintiff relies on two more letters apparently signed by the defendant to support his claim. One of these letters was undated (but said by the plaintiff to have been signed in mid‑1998 at the Hong Kong Park Hotel, where both of them were staying at the time) ; another one was dated 12 February 1999. These two letters did not acknowledge any particular items or amounts of indebtedness, but admitted in general terms that the defendant was indebted to the plaintiff.
The nature of the dispute
8. The defendant’s case is a simple one of denial. He denies that the loans have ever been made. As to the vouchers, his case is that when they were signed, they only contained the Arabic numerals. There was not even any notation before the $ sign indicating whether they were HKD or Singapore dollars. There was no Chinese handwriting acknowledging any loans on any of the vouchers, and no names were written or signed except his signature next to “received by”. His pleaded case is that he and the plaintiff had invested in a company by the name of Wai Wai Private Limited (“Wai Wai”) in 1997 for the purpose of doing business in the Mainland. He had given numerous sums of money (in Hong Kong dollars, Singapore dollars and Malaysian Ringgit) totaling about HK$2,700,000 to the plaintiff for him to take to the Mainland as the defendant’s contribution towards Wai Wai. Later in 1998 they agreed that Wai Wai should be wound up and his contribution should be refunded. The plaintiff told him that the vouchers had to be signed for the purpose of facilitating the repatriation of the defendant’s funds out of the Mainland (five of them as “receipts in advance” and one of them ‑ the one for $3,000,000 ‑ as a “cash declaration form”). The vouchers were signed in these circumstances (except that in relation to the voucher for S$1,732,330, he stated in his 2nd affidavit in relation to his unsuccessful application to strike out the action for want of prosecution that it was for monies taken into the Mainland to purchase a property through Wai Wai).
9. Necessarily it is part of his case that all writings on the vouchers, apart from the dates, the numerical figures and the dollar signs, were written after he had signed them. The defendant has produced, in his own trial bundle, copies of the vouchers which purported to depict what he says to be the format of the vouchers immediately after he had signed them.
10. These are the battlelines between the parties at trial.
The plaintiff’s background
11. As part of the factual background, the following information about the plaintiff is relevant.
12. The plaintiff has been declared bankrupt twice in Singapore. He was first declared bankrupt in May 1980 and the bankruptcy was annulled in 1982. He was declared bankrupt for a second time in November 1994. His bankruptcy was annulled in 2000 on the basis of a settlement with his creditors under which he paid only 20% of their debts. The debts which the plaintiff sought to recover from the defendant were all extended at a time when he was still an undischarged bankrupt. At the time when the plaintiff sought (and was granted) leave under Order 11 to serve the writ out of the jurisdiction, he was still an undischarged bankrupt. However, he had not disclosed this fact to the Hong Kong Court when he sought and obtained Order 11 leave.
13. In 2010 (when the case was originally scheduled to come on for trial) the defendant applied to strike out the plaintiff’s claim on the ground that the proceedings were a nullity because at the time of commencement of the action the plaintiff was an undischarged bankrupt and had no capacity to bring the proceedings. For reasons contained in his judgment dated 13 August 2010, Bharwaney J refused to strike out the action on that ground.
14. However, the defendant also contended that the plaintiff had been guilty of material non‑disclosure (“MND”) at the time of obtaining Order 11 leave in that he had not disclosed the fact that he was an undischarged bankrupt. Bharwaney J held that there had been MND and that the order granting leave should be discharged. He went on to consider his discretion in ordering a re‑grant. He accepted that the MND was deliberate. He concluded that he was unable to re‑grant Order 11 leave unless the plaintiff was prepared to disclose the Special Resolution resulting in the issue of the certificate of annulment in 2000 (which effected the annulment of his bankruptcy) so as to satisfy him that no fraud had been committed by him on his creditors (it will be remembered that at the time of the annulment in 2000, he only paid 20% of the creditors’ claims, and the concern was that if he ‑ as he asserts ‑ had significant assets to lend to the defendant then he would have committed a fraud by not disclosing such assets). The matter was adjourned for further directions.
15. The matter was overtaken by events because when it came to the notice of the Official Assignee (“the OA”, the Singapore equivalent of the Official Receiver in Hong Kong) that the plaintiff had claimed to have substantial assets and business dealings since 1994, the OA decided to apply to the Singapore Court to revoke the annulment of 2000 (with the result that the plaintiff was a bankrupt again) but upon the plaintiff making full payment of his creditors, there could be an application to the Singapore Court for a further annulment so that the plaintiff would again be restored to full capacity to pursue the proceedings.
16. In September 2010 (when the matter returned to Bharwaney J) he adjourned the matter to enable the plaintiff to obtain the grant of the necessary annulment so that he could be restored to full capacity.
17. In January 2011 the Singapore Court revoked the plaintiff’s 2000 annulment. Thereafter, all the plaintiff’s creditors were paid off in full (and not, as was previously the case in 2000, only as to 20%). After they were paid off, the plaintiff made a fresh application for annulment and the Singapore Court ordered on 26 January 2011 that the plaintiff’s bankruptcy be annulled. For reasons set out in his judgment dated 14 March 2011, Bharwaney J exercised his discretion to extend the validity of the writ and re-granted leave to serve the same out of the jurisdiction.
18. Apart from the above two bankruptcies, the plaintiff has had two criminal convictions against him, one in Singapore and one in the Mainland.
19. The Singapore conviction took place in 1992. The plaintiff had a grand uncle called Kwek Hong Png, who was the founder of the Hong Leong Group in Singapore. The plaintiff was originally charged with attempting to extort S$5.28m from Kwek but the charges were later amended to corruption (apparently of a lesser sum), to which the plaintiff pleaded guilty.
20. The Mainland conviction took place in 2001. On 7 August 2001 the plaintiff was arrested by the Public Security Bureau (“PSB”) in Zhuhai in the Mainland. He was convicted of conspiracy to defraud and sentenced to a term of imprisonment. He appealed against his conviction and his appeal was allowed in 2003. The case was remitted for re‑trial.
21. According to the plaintiff (in §15 of his affirmation in response the unsuccessful application by the defendant to dismiss the action for want of prosecution) the second trial “was not fully conducted” but he was sentenced to 5 years imprisonment in June 2004 without any fine.
22. It is true that there was no reasoned judgment of any re‑trial but according to a “certificate of release” dated 6 July 2006 issued by the Guangdong prison authorities, he was sentenced by the Guangdong Court to five years imprisonment on 21 June 2004 for he crime of contractual fraud and it is difficult to see how a Court could sentence someone to imprisonment without an underlying conviction. The plaintiff had failed to explain properly what he meant by “not fully conducted” but, be that as it may, it is not in dispute that he was imprisoned in the Mainland and released from prison on 6 July 2006. During the period between his arrest and his release, this action remained dormant.
The Defendant
23. The defendant was single until his death. According to the plaintiff he studied in England and the United States. He started to stay in Shenzhen in 1997.
24. On one occasion in 1991, the defendant lent a sum of S$8,000 to the plaintiff on terms that it was to be repaid by monthly instalments of S$1,000 each. The debt was acknowledged by a handwritten IOU in Chinese dated 21 August 1991 signed by the plaintiff.
25. In September 1997, the defendant purchased a property in the Mainland at 32D King Yuen Building (North) at Shekou, Shenzhen. The purchase price was HK$1,619,000. The written agreement of purchase (dated 9 September 1997) also provided for handling charges of HK$113,330. The two amounts add up to HK$1,732,330, which is exactly the same amount as that started on one of the six vouchers relied on by the plaintiff as evidence of the loans, except that in that voucher the denomination was in Singapore dollars. I shall have to return to the significance of this later in this judgment.
The witnesses
26. At trial the parties called the following witnesses :‑
For the plaintiff
(1) The plaintiff himself.
(2) The plaintiff’s younger brother Tan Kah Hock. He gave evidence about an incident in 1998 when the defendant borrowed money from him (which was repaid in the same year in full).
(3) Mr Tan Kim Lock, who claimed to be a good friend of the plaintiff and the defendant. He testified about incidents in 1997 when he saw (in the defendant’s home in Shekou) the plaintiff give substantial amounts of RMB cash to the defendant and the defendant saying that he was borrowing money from the plaintiff. He also described another incident in 1999 when the plaintiff told him that the defendant had not repaid him, and what he did in consequence thereof.
(4) Cheng Yau Sang, Patrick, a handwriting expert who testified on the handwriting on the three letters the authenticity of which was disputed.
For the defendant
(1) Olivia Woo Yan Kuang, who in 1998 and 1999 was an employee of a company called the Asia Life Insurance Society Ltd as a personal assistant to one Mrs Patsy Lee, the then secretary of one Tan Eng Heng (who was the chairman of that company as well as the elder brother of the defendant). She testified on the circumstances under which she made photocopies of the defendant’s Singaporean passport in January 1999.
(2) Tan Eng Yam, who is the elder brother of the defendant. He testified on certain aspects of the relationship between the plaintiff and the defendant insofar as the same was within his personal knowledge.
(3) Madam Gek Kwee Lee, a handwriting expert who testified on the three letters the authenticity of which was being challenged.
One decisive issue
27. There is only one decisive issue in this case, namely whether the alleged loans were in fact lent by the plaintiff to the defendant as alleged.
28. In the present case, the defendant disputes having signed the various pieces of documentary evidence relied on by the plaintiff. The defendant unfortunately cannot give live evidence before me, but that does not necessarily mean that the plaintiff ‘s oral evidence must necessarily be regarded as “uncontradicted” or that I must accepted his oral evidence without further ado. His evidence must still be tested against the usual yardsticks and criterion applied by the Court in assessing credibility namely :‑
(1) inherently credibility ;
(2) contemporaneous documents ;
(3) such facts as are undisputed or indisputable.
29. As far as demeanour is concerned, the appellate courts have warned against undue reliance on the demeanour of witnesses or the manner in which they testify (for very often the Court only sees a witnesses for the first time, and it is sometimes difficult to tell whether the “demeanour” of a witness is because he or she is lying, or simply because that was the way he or she is born to speak). That said, demeanour still has a role to play in assessing credibility, especially when the Court has had a chance of observing a witness give evidence over a prolonged period of time, but it has to be judiciously applied in conjunction with the three surer guides I mentioned in the previous paragraph.
30. Cross examination of the plaintiff had taken a long time. I had allowed the defendant a certain amount of leeway because of several factors. First the defendant cannot testify before me. That is of course not the plaintiff’s fault, but it does mean that there will be no live witness to contradict the plaintiff‘s evidence. The plaintiff’s burden of proof remains the same (balance of probabilities), but I have to be extra careful not to allow the plaintiff’s evidence to, as it were, go “by default”. It has to be tested critically. Second there are unusual features in this case about the plaintiff (twice bankrupt, twice convicted) and the circumstances of this case (as I shall explain below) which make cross examination extremely important.
31. A wide range of topics were covered: the plaintiff’s means, his previous convictions, his work history, his business background, the circumstances of his bankrupty and the like. Most of these are justified by defence counsel on the ground that they go to credibility. Some are more relevant to the main issue than others. I had at all times borne in mind that the single issue requiring my determination which is dispositive of this action is whether the plaintiff did lend the money to the defendant and I must “keep my eyes on the ball”. I have from time to time tried to constrain the scope of such cross examination as to credit.
Preliminary observation on credibility
32. Obviously, the one witness whose testimony is going to be examined under the spotlight is the plaintiff himself.
33. I shall be commenting on individual aspects of the plaintiff ‘s evidence when I analyse the various topics. But on a high level of generality, I find the plaintiff a wholly unimpressive and incredible witness. I have come to the view that even in the absence of live evidence from the defendant contradicting what he says, I cannot rely on what he tells me on any controversial matter unless it is backed up by contemporaneous documentation or consistent with incontrovertible background facts.
34. I say so for the following broad reasons (more detailed examples would be provided under individual topics, where necessary).
35. He was constantly evasive and not answering the simplest of questions. This, I am sure, is not due to any misunderstanding of the question or innate personality problems. Instead of addressing the question, he would give a long winded discourse on something else. I regard this as the hallmark of someone who had no good answer to the question posed and had to resort to filibustering, hoping that by giving a sufficiently long winded, complicated and irrelevant answer, he could bamboozle it through.
36. When confronted with difficult questions, he would regularly take refuge in the instinctive answer “I do not understand this document because I do not know English”. However, from time to time his answers and behavior in the witness box reveals a deeper understanding of English than he had cared to admit. He would answer before a question was translated. And there was a rather revealing incident in Court when he actually muttered the words of an English letter to himself when he was questioned on it. When this was spotted and pointed out to him, he admitted that he actually knew a little English but the standard was not good. Of course it is a commonplace occurrence in the Hong Kong Courts that witnesses might know a little (or some) English but might find it difficult to grasp the more subtle nuances of a document, or more difficult phraseology and sentence structures. That is all well understood and Courts do not hold such things against a witness. But that was not the plaintiff ‘s position (at least until the incident in Court which I pointed out above). His dogmatic and absolute position, when confronted with difficult questions, was that he would quickly say that he did not know English and therefore did not know what the document said at all, as if it would provide a blanket excuse for not answering a question on a document. Again I regard this as the hallmark of a witness who tries to find excuses in not answering difficult questions.
37. On numerous occasions he would also take refuge in the answer “I have forgotten”. Of course ordinary mortals forget things. But the sort of things that the plaintiff said he had forgotten were things that were inherently unlikely to have been forgotten. And from the way in which the plaintiff was able to ramble on about details of various matters from long ago, I refuse to accept that the plaintiff was telling the truth when he said he had forgotten. Again I regard that as the hallmark of a witness who was trying to find an excuse for not answering questions.
38. Other factual witnesses are also tested in cross examination, though not as severely as the plaintiff. Of these, no one was seriously shaken and I largely accept their evidence (I shall deal with them below) with the exception of Tan Kim Lock. For reasons I shall describe later, his credibility had been reduced to vanishing point.
39. I now move on to specific aspects and topics in the plaintiff’s evidence.
40. The plaintiff’s case is that the loans were extended to the defendant by way of numerous cash payments (plus a few payments by “cash cheques”) and that on each occasion either the defendant or his girlfriend would sign notes to acknowledge the debts, but then those notes had been surrendered by him to the defendant when the various disputed vouchers were issued. This was relied on to account for the absence of the individual notes by way of contemporaries documentary evidence.
41. In my view the plaintiff’s story makes little sense. He has not offered any reason as to why it was necessary for him to agree to the regular “stocktaking” of the individual cash advances. Most of the debts were (according to him) extended in RMB or HKD. The only reason given by him as to why the loans needed to be “converted” was because he and the defendant were Singaporeans but I do not regard that as convincing at all. It is not suggested that he would require repayment in Singapore dollars for him to be able to spend the money in Singapore. On his case he was living in the Mainland at that time. In any event it is not as if all the debts were converted into one single currency for ease of calculation. On his own case ultimately the vouchers were recorded in two currencies (five in Singapore dollars, one in HKD) anyway.
42. Among the various cash payments, it is his case that two cheques were involved. These were cheques drawn on the First Pacific Bank. The cheques were not marked “cash” but were drawn in favour of the plaintiff (with the words “or bearer” crossed out but they were not “crossed” generally). According to the plaintiff’s oral evidence, this means that these were not “cash cheques” but the defendant could encash the cheques by producing proof that he was the payee of the cheques, but he did not accompany the defendant to encash the cheques at the bank. He said that he had tried to obtain copies of his bank statements or of the cheques from the Bank of East Asia (which took over the First Pacific Bank) but he was told that no record of transactions were kept after seven years.
43. There are a number of problems with such evidence.
44. First, even though he said in oral evidence that he did not accompany the defendant to the bank to encash the cheques, in his witness statement he said that he went with the defendant to encash the cheques. When confronted with this in cross examination he did not attempt to explain it but talked about something else. Such inconsistency and evasiveness dented his credibility.
45. More importantly, if the cheques had truly been encashed by the defendant, one would have expected contemporaneous documentary evidence from the bank (such as copies of the cleared cheque, or copies of the plaintiff’s bank statements) to prove it. That would be the natural thing to do when one is trying to prove that loans had been extended. However, he only requested such documents more than 7 years after the event. The documents showed that he only asked (in writing) in 2009. This prompted the question as to why he had not asked earlier.
46. I bear in mind that the plaintiff was imprisoned in the Mainland from 2001 to 2006. But it could legitimately be asked why he had not asked in or before 2001. The plaintiff explained that he thought that it was enough for him to rely on the vouchers. I reject this explanation without hesitation. In his defence the defendant had already denied the loans and set out his case about how the six vouchers came to be signed. He had also set out his case in pre‑action correspondence between his Singapore lawyers (Peter Pang & Co) and the plaintiff. Therefore, long before his imprisonment in the Mainland the plaintiff would have appreciated the significance and importance of gathering evidence to prove the advancing of the loans (and not merely relying on the vouchers whose authenticity was being disputed). Yet there is no evidence to show that he had done anything at that early stage to reserve any primary documentary evidence.
47. In this connection, I should add that the plaintiff’s evidence was thoroughly unsatisfactory and evasive when he was being cross examined on the pre‑action correspondence between Peter Pang & Co and him (in which the provenance of the six vouchers were discussed). Very little turns on that series of correspondence (because he did not accept Peter Pang’s version of events and so it is not as if the correspondence contained any damning admission against his own interest), except that (i) they serve as the defendant’s contemporaneous position towards the origin of the vouchers and (ii) they must have put him on notice as to the defendant’s case about the provenance of the six vouchers (see my point in the preceding paragraph).
48. However, the plaintiff had tried a wide variety of incredible ways to disclaim knowledge of (and distance himself from) the correspondence : from asserting that a letter had been sent to the wrong address and not delivered to his home (only to admit, soon thereafter, that one of the addresses on that letter namely 11‑C Lorong H, Telok Kurau, Singapore 425995 was his correct residential address), to claiming that he had no recollection of signing a letter which expressly acknowledged having received a letter from Peter Pang, and even to implicitly blaming his domestic helper who might have signed the receipt of a letter sent by registered mail and somehow failed to give it to him. I have no doubt (and I so find) that he had received the series of correspondence. His “twisting and turning” in the witness box did nothing to instill confidence in his credibility.
49. As the case concerns whether the plaintiff had in fact advanced the alleged loans to the defendant, a relevant point worth noting is the defendant’s financial position.
50. This aspect of the case takes on a special significance because of the fact that at the time of the alleged loans, the plaintiff was an undischarged bankrupt in Singapore (this was during his second bankruptcy). Prima facie, therefore, the plaintiff was unable to pay his debts and was insolvent. This raises the legitimate question as to how the plaintiff had funds to lend to the defendant.
51. According to the plaintiff, during the time of his second bankruptcy in Singapore in the 1990’s he actually had huge amounts of cash kept in his house in the Mainland. He also had money in a bank account in Hong Kong. Also, various people owed him money then (he was extremely shifty about whether these debts were owed in the Mainland or in Malaysia or in Hong Kong, and he mentioned various reasons as to why these people would owe him money ‑ from property transactions to casino related debts).
52. In his statement of affairs in Singapore, however, he had not declared any of these assets. He explained that he had informed the OA about his cash in Mainland, but not about the people who owed him money or about his money in the bank account in Hong Kong, and that he had been told by the Official Assignee in Singapore that because there was no communications between Singapore and China and there would be difficulties transferring money from China to Singapore, he need not declare his assets outside Singapore.
53. He had also attempted to give some explanation about why he had not mentioned his other assets to the OA, but I confess that I had found those explanations incoherent and incomprehensible.
54. I have no hesitation in rejecting his explanation for not declaring his cash in the Mainland (if he indeed had such cash) to the OA. First of all (and this is the obvious question) if he was so cash rich there was no reason for him to allow himself to become bankrupt in the first place. His never provided any satisfactory explanation.
55. In any event I find it hard to believe that if he did have such huge amount of cash in the Mainland and that he had informed the OA about it (as he alleged), the OA (as the responsible official in charge of bankruptcy in a respected overseas common law jurisdiction) would have advised him not to disclose it.
56. This aspect of his evidence is symptomatic of large parts of the plaintiff’s evidence : when he is confronted with a point where his conduct or behavior is contrary to contemporaneous documents or common sense, he would resort to blaming other people. I have referred above to the (implicit) blaming of his domestic helper for receiving mail without informing him. Here he blames the OA. On other occasions he had blamed his former and even present legal advisors. If he was let down once by people around him, one could call that unlucky. But if he was “let down” on so many occasions, it brings his credibility into serious doubt.
57. As I said above, he had failed to disclose his bankruptcy status in seeking Order 11 leave. According to him, his then lawyers advised him that there was no need to disclose it. I have no hesitation in rejecting this explanation, which apparently was not placed before Bharwaney J (who found the MND to be deliberate). In any event it is incredible that lawyers would advise him that the bankruptcy status is irrelevant. Irrespective of whether it was perceived as relevant to his legal status to sue, it must obviously be relevant to his ability to lend money to the defendant at the time. I refuse to believe that any lawyer would have regarded that as irrelevant and have so advised the plaintiff. This “blaming mentality” again reflects badly on his credit.
58. I have not overlooked the fact that the plaintiff had produced copies of two cheques drawn on a First Pacific Bank account in 1997 (during his second bankruptcy). It may be said that this provides some basis for inferring that he did have an account, and hence some funds, in Hong Kong (not declared in his statement of affairs) during the period of his bankruptcy. Also, upon the revocation (in 2010) of the 2000 annulment of his bankruptcy he was able to pay off 100% of his creditors. Again it may be said that this provides some basis for inferring that he did have some means to enable him to lend to the defendant. Lastly he produced some documents to show that in 2000 his Australian company Tan Homes Building Pty Limited lent A$10,000,000 to a borrower in Shanghai and again this may be said to provide evidence of his means.
59. I do not think that any of these items of evidence detract from the prima facie conclusion that at the time of the alleged loans to the defendant he was an undischarged bankrupt and hence with little means. Insofar as the two cheques are concerned, at most they shows that he had a bank account. They do not show how much he had in the account. As far as the payment of 100% of his creditors is concerned, that took place in 2011 and provides no basis for finding or inferring that he had any means in 1997 (the time of the loans).
60. As far as the loan in Shanghai in 2000 is concerned, it was extended in 2000 and does not provide any basis for finding or inferring that he had any means in 1997. Insofar as it may be suggested that the 2000 loan shows that despite his bankruptcy (his bankruptcy was only annulled later that year) he did have substantial means, that is a most unattractive argument. There is no evidence that the loan (or his interest in the company which extended the loan) had been declared in Singapore. In effect the argument is asking me to find that since (despite his bankruptcy) he managed to conceal his assets in 2000 for him to be able to lend the money in Shanghai, I should find that he had likewise hidden an identified amount of money in 1997 for him to lend to the plaintiff. I refuse to so find. The fact that he had some undeclared means in 2000 to enable him to lend money in Shanghai provide no basis for me to speculate that he had means in 1997 to lend to the plaintiff.
61. On the evidence I find it inherently more likely that he had gone bankrupt and had not declared his “assets” (whether in the form of his Mainland cash, or the money which other people owed him, or his money in a bank account in Hong Kong) in his Singapore statement of affairs simply because he did not have significant assets at the time.
62. I am of course aware that very often people feign impoverishment and procure their own bankruptcy, with a view to evading their debts and cheating their creditors. But this is not the plaintiff’s case. It is not the defendant’s case either (the defendant’s case, naturally, is that the plaintiff was truly impoverished). Having rejected the plaintiff’s case, I am left with nothing else but the defendant’s case. In our adversarial system it is not for the tribunal to speculate or think of possible “third scenarios” or “half way house” solutions. No one had asked me to find such a “half way house”. Even if I were to try to look for such a “half way house” of facts, the extremely unsatisfactory and shifty evidence produced by the plaintiff as to the nature and quantum of his means at the material time (1997‑1998) failed to persuade me that he had anything near the sort of amount of money involved in the present case to enable him to lend to the defendant.
63. A related topic is the plaintiff’s evidence as to how he managed to accumulate so much cash in the Mainland in the 1990’s. On this, his evidence had undergone a three‑stage evolution. First, in his witness statement, he stated that since 1994 he had taken large amounts of cash into the Mainland.
64. In his oral evidence he changed his evidence and said that he actually handed the cash to a Singaporean banker friend of his who worked in the Far East Bank (one Mr Ng Eng Kiat) for Ng to bring into the Mainland for him (though he also suggested that he had brought some cash to the Mainland himself and said that he had records of that which he had given to his current lawyers; his lawyers never produced any such records). Then in re‑examination he changed his evidence again and said that he gave the money to Ng Eng Kiat who then sent it to his friend in the Mainland called 林日順, and whenever he needed cash he would go to this 林日順 to get cash. From time to time he gave numerous other rambling accounts as to how he took money to the Mainland and where the money came from. It was an exasperating experience listening to his evidence and he simply refused to be pinned down to one simple straightforward version of facts.
65. On the subject of the source of his funds, he referred to the sale, in 1983, of a property at 563 East Coast Road (two houses erected on 30,319 sq ft) in Singapore for about S$4m. His witness statement did not explicitly say that the proceeds of this sale had been brought by him to the Mainland, but in his oral evidence he seemed to have suggested so. In line with his manner of giving evidence, he was not particularly specific about this point. This trial is not about the sale of the Singapore property, but since he had chosen to bring it up (no doubt to bolster the credibility of the loans by showing that he did possess substantial means) he was cross examined on it. He gave a thoroughly unsatisfactory account of this sale and his evidence reflected badly on his credibility.
66. The documentary evidence showed that the property in question consisted of two lots : Lot 5414 and Lot 5415. At the material time they were vested in the names of the plaintiff’s father and the OA (this was during the period of the plaintiff’s first bankruptcy, in the early 1980’s). Both lots were sold by the plaintiff’s father and the OA and the documentary evidence showed that Lot 5414 had been sold for S$320,000, and Lot 5415 had been sold for S$1,570,000. The sale price of both lots therefore added up to less than S$2,000,000 and not S$4m as he suggested.
67. When he was asked to explain this, he rambled on some irrelevant matters for a while. Then he explained that the “real” sale price of the properties was actually far more than S$2,000,000. He mentioned that the properties were worth about S$8,000,000. He said that on top of the purchase price written in the agreements, a lot of cash was collected by his father. He said that the full price was not written in the contracts because his father wanted to save stamp duty. He said that at that time the debts that he owed to his creditors were only about S$100,000 and on top of that, a debt of S$300,000 was also owed to the Far East Bank. After the transaction had been completed, the S$100,000 was deducted and the S$300,000 was deducted and then the remaining balance (presumably he meant the balance from the combined “documented” purchase price) was returned to him, and the cash collected by his father was also returned to him. The total of the funds returned to him was about S$4,000,000.
68. I find this extraordinary. If what he said was true, he and his father would have been engaging in a dishonest scheme of defrauding the Singapore revenue. He did not answer the question (put to him in cross examination) whether the OA was a party to this activity. If it is his case that the OA was a party, then his evidence is doubly extraordinary. But with or without the OA’s connivance, there are many unanswered questions about this blatant tax fraud. I do not need to make a definitive finding. Either way his credibility is significantly damaged. Either he will have given untruthful evidence to me about having sold the properties for S$4,000,000, or he will have been privy to a fraud against the Singaporean revenue (I add that it is no excuse for him to say that his father arranged it for him). If he could defraud the Singapore revenue he could equally lie in this Court.
69. Also, the plaintiff’s case as to how much cash he had in the Mainland had not been consistent. In his evidence he maintained that even as at 2001 he still had around RMB20,000,000 cash in his house in Shenzhen in the Mainland. He first tried to say that all this cash was taken away by the PSB when he was arrested on 7 August 2001. Then when pressed, he said that the cash was taken away at a later stage: after his arrest he was questioned about where certain documents were kept and the PSB went to his house to take the documents as well as the cash.
70. However, none of this was mentioned when he made an affirmation in opposition to the application to strike out his claim for want of prosecution. In the affirmation he said that cash in the amount of RMB200,000 was taken away. His attempted explanation was that he had two villas in Shenzhen and he forgot whether when he gave instructions for the purpose of his affirmation he had mentioned he had two villas. I reject that entirely. If he truly had RMB20,000,000 taken away, it is something that he could not have failed to mention to his lawyers. I appreciate that this is about the state of his cash as at 2001, but the point must have an inevitable bearing on the general credibility of his evidence as to his means.
71. Of course I am not doing a general audit of his assets and means at various points of time during his bankruptcy. Strictly speaking I do not need to find that he had $X at the material time before I can find that he had made the loans. In most cases on debt recovery the Court does not inquire deeply into the plaintiff’s means. But this is an unusual case. Given the fact of his bankruptcy during the time of the loans, the extremely unsatisfactory nature of his explanation about his means is something to be taken into account in assessing the credibility of whether he had indeed made the alleged loans.
72. By way of corroboration, the plaintiff called Tan Kim Lock to support his case. He is 70 years old now. His evidence is to the effect that he was a friend of the plaintiff and he had stayed at his home in Shekou (the address of which he could not recall) for 2 weeks in 1997. He was also a friend of the defendant and was familiar with his family members.
73. In his written witness statement he stated that on two occasions in 1997 he saw the plaintiff giving the defendant a substantial amount of RMB in cash and heard the defendant say that he was borrowing money from the plaintiff. On the first occasion he also saw the defendant putting the money in his luggage bag. Then he said that in 1999 the plaintiff told him that the defendant did not repay the money to him, and he went to the defendant’s elder brother (Tan Eng Wan) to suggest that he should advise the defendant to settle the debt. Tan Eng Wan told him not to worry and that the defendant would repay soon.
74. When Tan Kim Lock was cross examined, the whole of his evidence took on a completely different complexion.
75. First he readily admitted that because of his age, his memory had faded and his memory of events in 1997 and 1998 was not good.
76. Second he readily admitted that what he was at the plaintiff’s Shekou home was the plaintiff pulling a trolley with some packages and passed them to the defendant. When he was asked how he knew that those were cash, he said that it was his guess.
77. Third (and this was a rather dramatic moment in the course of the trial), when he described the defendant’s family members whom he claimed to know, he mentioned the name of Tan Eng Yam (who was the defendant’s elder brother). Tan Eng Yam (who was appointed as the defendant’s Guardian ad litem at an earlier point in time, and who actually testified in Court) was in Court when Tan Kim Lock gave evidence. He sat in the public gallery. Tan Kim Lock was asked to look at Tan Eng Yam (at the public gallery) and identify who he was. Tan Kim Lok said that the man in the public gallery was the defendant Tan Eng Khiam (who in fact has already passed away). He also said that the defendant’s elder brother Tan Eng Yam (who, as everyone in Court knew, was the man sitting in the public gallery) was dead.
78. Mr Sherry, doing his very best, tried to salvage the situation in re‑examination. He asked the specific question whether Tan Kim Lock saw Tan Eng Yam (the defendant’s elder brother, who was sitting in the public gallery) in Court. The witness said no. He said Tan Eng Yam passed away recently. When asked whether he knew someone called Tan Eng Khiam (the defendant), he pointed at Tan Eng Yam in the public gallery.
79. Mr Sherry tried to ask a leading question as to whether it was possible that the witness had got the names mixed up. As expected an objection was made and quite rightly so.
80. Lest the point be lost on any reader of this judgment : this witness (who claimed to be a good friend of the plaintiff and the defendant) told me that the defendant (who was in fact dead) was still alive, and his elder brother (who had in fact been sitting in Court) had died recently. This witness’s evidence carries no weight.
81. I now turn to the evidence concerning the disputed documents. I first deal with the three letters allegedly signed by the defendant.
82. These three disputed letters were typed in English. As a matter of inherent probabilities, it is unlikely for the defendant to type letters to the plaintiff in English. On the plaintiff’s own case he does not know English (or, as he was forced to admit in the box, he only knew a little English) and if it were so, there is little reason why the defendant would write to him in English. The only other IOU in evidence between the parties (albeit relating to a loan from the defendant to the plaintiff) was written in Chinese.
83. The letters are the subject of evidence from the handwriting experts. The focus of their evidence is, on proper analysis, within a narrow compass.
84. For ease of reference I shall use the following notation to describe the three disputed documents. This is also the way in which the plaintiff’s expert had referred to them in his report :
(1) Q1 :‑ The letter dated 3 May 1998.
(2) Q2 :‑ The undated letter said to have been signed at the Park Hotel in mid‑1998.
(3) Q3 :‑ the letter dated 12 February 1999.
85. A common feature of all three disputed documents is that the experts could only examine a photocopy of them. The original was unavailable for examination. I shall turn to the reason as to why the original is unavailable later in this judgment. But the immediate point is that the plaintiff’s expert acknowledged that all he could say is that the signature on the photocopies is a signature of the defendant. He could not say whether the signature was actually penned by the defendant onto the original.
86. The defendant’s expert, on the other hand, did not challenge that the signatures appearing on the copies were the defendant’s signature. However, her view is that the copies could be the result of (put colloquially) a “cut and paste” operation. She based her opinion broadly on two factors : (1) the quality of the copying and (2) the fact that in Q1 and Q2 (where there was a line on which the defendant was supposed to sign) the signatures appeared not close to the line, but at a distance above the line whereas evidence of his undisputed signatures showed that his habit was to sign on the line.
87. The plaintiff’s expert had not been asked to express an opinion about the possibility of “cut and paste” in his written report. In cross‑examination, however, he accepted that he could not exclude the possibility of this; nor could be confirm it. As to the point raised by the defendant’s expert about the defendant signing “on the line”, he referred to three samples of the defendant’s signatures (C3, C7 and C8 in his report) as counter‑examples where the defendant had signed at a distance above the line.
88. In my judgment, a rather glaring feature of the signatures appearing on Q1 and Q2 (and pointed out by the defendant’s expert) is that they all appeared at a slight distance above the horizontal line whereas other samples of the defendant’s signatures showed his signatures on the line, save and except samples C3, C7 and C8 as pointed out by the plaintiff’s expert. However, all these three exceptions were official government notification documents and not personal correspondence, and while the signature did not appear on the line, they were appended at the space where the signature was supposed to be appended. For example for C3, even though the signature appeared slightly above the line, it was nonetheless next to the word “signed”. The line was in fact not where the signer was supposed to sign ‑ it was supposed to be where the name of the signer was to be typed or written on.
89. Mr Cheng (the plaintiff’s expert) also fairly accepted that while some people would sign next to the word “signed” and some would not, it is not an unreasonable explanation that people would sign above the line when obeying instructions as to where to sign.
90. Therefore C3, C7 and C8 are actually examples where the defendant tended to sign where the signature was supposed to be appended : The totality of the samples showed that if there is a line, then he would sign on the line except that if there is a more specific indication as to where he should sign (such as next to the word “signed”) he would sign there (even though that would involve signing slightly above the line). C3, C7 and C8 are not counter‑examples showing that where there was a line and the layout of the document is such that he was supposed or expected to sign on the line, he would stillsign at a distance above the line.
91. In the case of Q1 and Q2, the line was prima facie meant to be where the signer was supposed to sign and yet the signature appeared slightly above the line. I have not been referred to any sample signature of the defendant where he had signed in this manner.
92. As to Q3, there was no line to be signed on. However, the plaintiff’s expert agreed that the quality of the signature appearing thereon is of poorer quality that the typed contents of the document. He also accepted that this indicates a possibility that the signature had been “multi‑generated” to a greater extent than the typed content (in the sense of having been copied more times). The defendant’s expert said, and I accept, that this is indicative of a “copy and paste” job having been done. This is because if the signature and the typed text had been of the same generation originally, then the signature and the text should deteriorate equally through copy processes.
93. The experts are in disagreement in relation to the quality of the copied signature in Q2. The defendant’s expert criticized the quality of the signature in Q2 while the plaintiff’s expert disagreed. However, it is not necessary for me to resolve this difference because while poor quality of the signature could indicate a “cut and paste job”, the fact that there was no “quality problem” in the appearance of the signature does not make a “cut and paste job” less likely. “Cut and paste” operation can be done in two ways. One is by literally “cutting” a sample signature and then “pasting” it. The other is by scanning a sample. Both experts accept that a skilful forger could do a “cut and paste” job in a way that a reader would not be able to tell whether it was in fact a forgery. Therefore even if there is no “quality difference in Q2”, it is only a neutral factor.
94. I now come to the question of why the originals cannot be produced for examination. Both experts are handicapped by the absence of the original for examination.
95. The plaintiff’s case is that he has at one stage had the originals of the three disputed documents (bearing the signatures of the defendant which he appended on the documents). At the commencement of the action he gave them to his then solicitors, Livarisi & Co and he was told by a Mr Chung Moon Hing of Livarisi in 2001 that the defendant’s former solicitors Baker & McKenzie had inspected the originals listed in his List of Documents. In 2001 he changed solicitors to Danny Lau & Lam but Livarisi refused to release the documents because of a dispute on fees. Recently Livisari confirmed that the six original vouchers, the disputed letter dated 3 May 1998 and the letter signed at the Park Hotel were misplaced and could not be located.
96. The problem with this story is that there is no clear and contemporaneous document confirming that the originals had once been handed to Livarisi or that the originals had been lost by Livasiri. There was no letter confirming the alleged inspection by Baker & McKenzie either.
97. There is a series of correspondence between Livarisi & Co and the plaintiff’s then solicitors Danny Lau & Lam in December 2008 and January 2009 which touched on this issue. Danny Lau & Lam asserted that the plaintiff had given the originals of the three disputed letters to Livasiri and asked for their return. Livarisi replied that the case handler had left and they could only locate a number of documents (none of which were the three disputed letters). Livarisi did not admit, in these letters, that they had at any time received the originals of the disputed letters. Of course that may not mean a lot, because for obvious reasons even if that had indeed happened, the recipient might not wish to admit it on record. But the fact remains that there is no direct admission from Livarisi.
98. In re‑examination, the plaintiff was referred to an e‑mail dated 27 July 2006 from Eric Pang of Livarisi & Co. In the e‑mail Eric Pang referred to an earlier request by the plaintiff’s lawyers for certain documents. Of the three disputed documents (Q1‑3), only the original of Q1 was asked for. There was no request for the originals of Q2 and Q3. In Eric Pang’s e‑mail he said that the firm had successfully located five documents (one of which was Q1) (for the avoidance of doubt the e‑mail went on to talk about not being able find certain originals but those originals had nothing to do with the disputed documents in issue in this action). The e‑mail went on to set out conditions (including payment of outstanding fees of HK$113,542) on the basis of which the documents could be delivered to the plaintiff.
99. The first point to note is that this e-mail does not support any suggestion by the plaintiff that Livasiri had admitted that they had “lost” the three originals.
100. The plaintiff tried to describe what he did after receiving the e‑mail but what he said made very little sense. He said he actually brought $200,000 to Livarisi but Eric Pang asked him to put down the money first and return to collect the documents the next day, and he said that in that case he would go back the next day with the money and would only pay when he saw the documents. On the appointed day he went to Livasiri again and he was told by Eric Pang that the documents could not be located.
101. I find this wholly incredible. It would be extremely bizarre behaviour for Livarisi to ask the plaintiff to leave the cash first and then to collect the documents the next day. It is even more bizarre for documents to be lost overnight.
102. There is therefore no satisfactory evidence before me as to what he had done in consequence of that email : eg whether he had indeed obtained the original of Q1 from Livasiri, if not why not, and if so why he had not produced it at trial.
103. The plaintiff’s case is also not entirely internally coherent as to what documents were initially given to, and then “lost” by, Livarisi. In a series of correspondence in late 2008/early 2009 (referred to above) the plaintiff’s lawyers stated that the originals of all three (Q1‑Q3) were given.
104. In his witness statement (which he adopted as his evidence in Court) at §47 he said that recently Livasiri “confirmed” that (among other things) the letter dated 3 May 1998 (Q1) and the undated letter (Q2) had been lost. But neither the Eric Pang e‑mail nor the series of correspondence in late 2008/early 2009 contained any explicit confirmation. At most, if one reads it in conjunction with the Eric Pang e‑mail in 2006, one could perhapsextract the conclusion that if in 2006 Eric Pang said they the firm had located the original of Q1 and in late 2008/early 2009 Livasiri could not locate Q1, then the original of Q1 must have been lost.
105. In §32 of his witness statement he said that he (not his solicitor) had “lost” the original of the letter dated 12 February 1998 (Q3) and has only had a copy of it since the commencement of the action. Significantly he did not say that he had given the original of Q3 to his solicitors and they had lost it.
106. I harbor very significant misgivings about the truthfulness of the plaintiff’s story that he once had the originals but his former solicitors had lost them. One point in his favour on this point is the fact that in the List of Documents, Q1 and Q2 were described as “original” but Q3 was described as a copy. At most, therefore, the List of Documents is evidence that the originals of Q1 and Q2 have at one time been given to Livasiri. It is not evidence that the original of Q3 had been given to Livasiri.
107. At the end of the day it is unnecessary to make any definitive findings on the plaintiff’s version of events. If no satisfactory reason is given as to the unavailability of the originals, then there is room for drawing an adverse inference against the plaintiff. But even if a satisfactory explanation can be given, it only means that the Court will not draw any adverse inference on the ground of the lack of an original. The fact remains that the Court and the experts are constrained by the lack of the originals. The experts can only give their view, and the Court can only give its judgment, on the basis of such evidence as are before the Court. The Court cannot infer that the originals would have assisted the plaintiff (eg that the originals would have positively led to a finding that Q1‑Q3 were not the results of a “cut and paste” job). Therefore even if I proceed on the assumed basis that the plaintiff’s explanation is true, it would not assist him.
108. There is an oddity concerning Q1 (not involving expert evidence) which goes against its genuineness. Q1 reads “ I, Tan Eng Khiam…hereby acknowledges receipt of the undermentioned sums being friendly loans (without interest) advanced by you to me at my request on the respective dates stated hereunder...” and then there follows the dates of the six vouchers. But the plaintiff’s case is that the dates of the vouchers were not the dates of the actual loans. The content of Q1 is therefore not consistent with the plaintiff’s case as it eventually unfolds. Even in the Statement of Claim the plaintiff had also pleaded that the dates of the loans were the dates of the vouchers. The defendant had argued that the plaintiff was “caught out” because the defendant’s passport copies showed that he was not in Hong Kong on some of the dates borne by the respective vouchers and so he had to change his case. I need not make specific findings as to the plaintiff saw it necessary to change his case. It suffices to note that the plaintiff had plainly changed his case as to when the loans were advanced. Q1 was probably created at a time when the plaintiff still thought of running his original case that the loans were advanced on the dates of the vouchers. Later the plaintiff decided to change his case, but he is already “stuck” with the language of Q1 (reflecting his previous case before he decided to change it). Of course he may say that Q1 was written by the defendant and he could not control whether the defendant made a mistake about the dates. But the same “mistake” was made in the Statement of Claim. One mistake may be explained away as a genuine mistake. Two mistakes (one in the pleading, one in Q1 itself) would be too much for me to swallow.
109. There is one further point (again not concerning expert evidence) which goes against the genuineness of Q3. Since January 1999 the defendant had (through Peter Pang & Co.) been in correspondence with the plaintiff over their disputed financial dealings. The correspondence is contentious. It is therefore odd and inexplicable that the defendant should on 12 February 1999 (the date of Q3) write to the plaintiff to acknowledge his indebtedness in the middle of such contentious correspondence. Q3 is particularly odd because shortly thereafter on 24 February 1999 Peter Pang wrote to the plaintiff disputing the loans and the authenticity of Q1, as well as setting out his case on the six vouchers. I see no reason why someone should instruct lawyers to engage in contentious correspondence, and then in the midst of the correspondence write personally to acknowledge his indebtedness and then turn round again to engage in contentious correspondence disputing the debts. Also, had Q3 been genuine, the plaintiff would have immediately used it to rebut Peter Pang’s denial of debts. The fact is that he did not. This casts grave doubts on the genuineness of the 12 February 1999 letter (Q3).
110. I therefore find that all of Q1 to Q3 were forgeries in the sense that they were the result of a “cut and paste operation”.
111. In so finding, I have borne in mind the well known principles concerning the standard of proof concerning serious allegations such as forgery and fraud :‑
“The balance of probability standard means that a court is satisfied an event occurred if the court considers that, on the evidence, the occurrence of the event was more likely than not. When assessing the probabilities the court will have in mind as a factor, to whatever extent is appropriate in the particular case, that the more serious the allegation the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability…Built into the preponderance of probability standard is a generous degree of flexibility in respect of the seriousness of the allegation.
Although the result is much the same, this does not mean that where a serious allegation is in issue the standard of proof required is higher. It means only that the inherent probability or improbability of an event is itself a matter to be taken into account when weighing the probabilities and deciding whether, on balance, the event occurred. The more improbable the event, the stronger must be the evidence that it did occur before, on the balance of probability, its occurrence will be established. Ungoed‑Thomas J expressed this neatly in In re Dellow’s Will Trusts [1964] 1 WLR 451, 455 : ‘The more serious the allegation the more cogent is the evidence required to overcome the unlikelihood of what is alleged and thus to prove it.’ (See Re H Minors [1996] AC 563 at 586 per Lord Nicholls)”
112. My finding is fortified by evidence of “propensity” (see Nina Wang v Wang Din Shin [2005] 8 HKCFAR 387 at paragraph 626 per Lord Scott) :‑
“…The passage from Lord Nicholls’ opinion in Re H & Others (Minors) (Sexual Abuse : Standard of Proof) [1996] AC 563 that I have cited stresses the need to concentrate on the inherent probability or improbability of the serious allegation being true…The probability of these allegations being true must be judged on the evidence adduced in the case. But it must also take account of propensity. If such an allegation is made against a person with a record of involvement in forgery or fraud, the strength of the other evidence necessary to satisfy the balance of probability test is obviously less than would otherwise be required. Evidence of propensity must go into the balance…” (emphasis added)
While the plaintiff protests his innocence about his Mainland conviction, the plaintiff does not dispute the facts underlying his Singapore conviction. The conduct involved was dishonest and dishonourable.
113. I now turn to the six vouchers.
114. In the defendant’s trial bundle there is a document which consists of all six disputed vouchers with only the figures written on but without any other handwritten words or “S”/”HK” before the $ sign. I have mentioned this earlier in this judgment. It is the defendant’s case that this set of copies depicted what the vouchers looked like after the defendant had signed them and before they were given to the plaintiff.
115. This document purports to be a set “certified true copies” of the vouchers and the defendant argued that the plaintiff had not challenged the authenticity of the certified copies. That is strictly correct. However, that only means that the plaintiff has not challenged the fact that the copies are certified by the plaintiff to be true copies of an original document. But there is no evidence describing the circumstances under which the original documents were executed or copied. For present purposes I shall proceed on the basis that the “certified true copies” of the vouchers cannot be relied on to show the appearance of the vouchers at time when they were signed by him.
116. That, however, does not mean that I must necessarily accept the six vouchers as what they purport to be. I must still scrutinize them with care against the background of the totality of all the evidence.
117. To start with, the six “payment vouchers” were in a rather odd format. If the intention had been to create documents in the nature of an IOU, it could easily and readily be done in a simple and explicit way. There was in fact a precedent for this because there was an IOU when the plaintiff borrowed from the defendant in Thailand. On the plaintiff’s case, in fact individual documents in the nature of IOU’s did exist but they were returned in exchange for the payment vouchers. If so, it is difficult why the “replacement” should be in the form of “payment vouchers” which are pre‑printed documents not explicitly worded as an IOU. The plaintiff’s story and the format of the vouchers made no sense. The odd format of the six vouchers strongly suggests that when they were signed they were signed for a purpose other than merely acknowledging a loan (or series of loans).
118. Further, the figure contained in one of them raised serious questions as to what that voucher was intended for. I am referring to a voucher dated 2 October 1997 in the amount of S$1,732,330. As I noted above, the amount is exactly the same as the purchase price (plus expenses) of a property in the Mainland that the defendant had purchased except that the denomination of the purchase price (and expenses) was Hong Kong dollars.
119. It is the plaintiff’s evidence that the defendant actually borrowed money from him to purchase this property and the loan formed part of the debts which he is pursuing in this action. However, he said that the loan was not covered by the HK$3,000,000 payment voucher (denominated in HKD) but he could not recall which of the remaining five Singaporean dollar vouchers covered this loan.
120. If what the plaintiff says is correct then this would be one of the most remarkable coincidences in life. The numerical value of one of the Singapore dollars vouchers (said to record loans) is exactly the same as the numerical value of the HKD purchase price a Mainland property bought by the defendant. Coupled with the other unsatisfactory features of the plaintiff’s evidence (together with the rather odd format of the vouchers which I commented on above), this coincidence impacts adversely on whether the payment voucher for S$1,732,330, and indeed all six vouchers (as, in the circumstances of this case, the six vouchers must be considered as a whole) truly evidenced loans extended by the plaintiff to the defendant.
121. The authenticity of the six vouchers cannot be considered in isolation (indeed none of the pieces of evidence in the present case can be considered in isolation). Having considered them against the background of all the evidence in the present case, I reject the plaintiff’s evidence that they were signed by the defendant in the circumstances alleged by the plaintiff (ie as acknowledgement of debts after a ‘stock taking exercise’ as to debts extended by the plaintiff). The defendant’s affirmation evidence in the bundles has not been tested by cross examination and I am not confident in relying on his unwritten, untested, evidence. But even without any positive testimony from the defendant and without placing weight on the defendant’s ‘certified true copy’ of the vouchers, I still find (if any such positive finding is needed for the purpose of resolving the issue of ‘authenticity’ of the six vouchers) that the six vouchers were signed for a purpose other than acknowledging debts, that the S$1,732,330 voucher did not have the “S” written in when it was first signed and that the Chinese words indicating “borrowing” in all six vouchers were not there when they were signed. I am able to do so because of the cumulative effect of the factors discussed above namely (i) the oddity and inherent improbability of using the format of ‘payment vouchers’ to acknowledge debts ; (ii) the fact the a previous IOU (albeit from the plaintiff to the defendant) had been written in Chinese ; (iii) the curious coincidence that the figure on one of them was exactly the same as the figure for the purchase of the Mainland property except for the currency. If I am wrong in refusing to place weight on the defendant’s ‘certified true copies’ (ie if the ‘certified true copies’ can indeed be relied upon as evidence of what the vouchers looked like before they were handed to the plaintiff), then my above conclusion will even be fortified because in that event the ‘certified true copies’ show that when the vouchers were given to the plaintiff they only had the figures and therefore the contents must have been subsequently filled in.
122. On the basis of the totality of the evidence, I do not accept that the plaintiff had extended the loans he relies on in this action. This is on the basis of the inherent unlikelihood of the plaintiff’s story as to how the loans came to be made, my finding that Q1 to Q3 were forged, my rejection of the plaintiff’s evidence as to how the six vouchers came to be signed and the absence of any contemporaneous documents in support of the loan.
123. Many other items of evidence have been traversed and tested in the course of the trial. I do not regard it as necessary to discuss every such item in great detail. Insofar as I have not explicitly dealt with or discussed any particular item of evidence it is because I do not think that it would have materially affected my adjudication on the central issue in this case namely whether the loans had been extended by the plaintiff to the defendant. For the sake of completeness I offer very brief comments on the evidence on these issues :‑
(1) The plaintiff claims in his witness statement that in 1997 and 1998 he had substantial money and intended to purchase a commercial building in Hong Kong at HK$120,000,000 in 1998 even though it fell through. The impression sought to be created was that he was a man of substance to such an extent that he could afford to pay HK$120,000,000 for a building. In cross examination he said that his banker friend in Singapore Ng Eng Kiat (who, it will be recalled, is the same name mentioned by the plaintiff as being involved in bringing cash into the Mainland for him) told him about a commercial building for sale in Hong Kong. Through a lawyer they (I take that to mean the plaintiff and Ng, with or without others) made inquiries. The upshot is that a bid was made but the bid failed. The plaintiff said that had the bid succeeded, then a bank was going to lend them 70% of the purchase price and also that he would purchase a cashier order of HK$12,000,000 (presumably as some sort of deposit). However, because the bid was not accepted nothing was paid. Leaving aside the fact that the plaintiff was a bankrupt at the material time, this part of the case consists of his self serving bare assertions on which little reliance can be placed because of his general lack of credibility. The impression he tried to create in his witness statement was significantly watered down when he was cross examined. I reject his evidence about his attempt to purchase a commercial building. Even if what he said was true, it did not show that he had substantial funds at the time. The fact remains that the bid was unsuccessful, and no one ever saw the “colour of his money”.
(2) I should note that in the context of cross examination on this topic, he was asked point blank a few times whether he had substantial money in Hong Kong and if so, how much. He never gave a straightforward and clear answer. I regard that as signs of evasiveness and indicative of a self‑consciousness that he did not in fact have any substantial amount of cash in Hong Kong (and indeed anywhere).
(3) In his witness statement he said that in 1996 a company in Shenzhen called Green East Co Ltd borrowed A$2,000,000 from him and /or Tan Home Building Pty Ltd. As Green East had no money to repay, a Chen Qiming (owner of Green East) repaid him partially in RMB. The plaintiff instructed Chen Qiming to deliver part of the repayment in RMB in cash to the defendant in the plaintiff’s presence directly on about 5‑6 occasions in Shekou. The money was treated as his loans to the defendant. This part of the evidence was put forward to explain (in part) the source of his funds in lending money to the defendant. He was cross examined extensively on this. After a good deal of unsatisfactory vacillation and prevarication, he said that his witness statement was wrong. In fact the lender was an Australian company called Home Building (not Tan Home), Green was a Hong Kong company and was only a guarantor, the borrower was another company in Shenzhen owned by Chen QiMing and he lent the money by giving cash to Chen QiMing. He could not explain why there was such a huge discrepancy between what he said in the witness statement and what he said in the box, save to say he was not aware of the mistake made by his lawyer in preparing his witness statement. Insofar as it is relevant at all, I reject his evidence on the making of such a loan.
(4) The plaintiff’s younger brother Tan Ka Hock gave a witness statement and testified in Court. His evidence was to the effect that in 1998 the defendant had borrowed about S$80,000 from him and the defendant had pledged some share certificates with him as security. The loan was repaid in August 1998. This evidence was proffered to refute any suggestion that the defendant was not in need of money in 1998. The defendant did not dispute the loan and its repayment. In my judgment the fact that the defendant had borrowed from the plaintiff’s younger brother has very little probative value (if at all) from the issues in this case. He might need cash from time to time, but that does not necessarily mean that on this occasion he borrowed from the plaintiff.
(5) The defendant called Madam Olivia Woo as a witness. She testified to an incident in around January 1999 when she photocopied the defendant’s Singaporean passport. The relevance of the defendant’s passport is that the passport pages could show his departures from and entry into Singapore, and could show whether he could be at a particular place (say, in Hong Kong) at a particular time, when documents were said to have been signed. She was cross examined as to the reliability of her evidence and the details of the events surrounding the making of the photocopies. She was not shaken in cross examination. In any event the copying of an entire passport is not something that is inherently susceptible to any “mistaken recollection” or “accidental omission”. No suggestion was made or to why she should or might, accidentally or deliberately leave out any pages containing relevant information. I think I can safely act on her evidence and I accept the copies of the defendant’s Singapore passport (which copies were placed before me) were copies of the entire Singapore passport of the defendant.
(6) The defendant’s elder brother Tan Eng Yam gave evidence. His evidence is of a peripheral nature, touching on his observations as to the sort of person the defendant was and his relationship with the plaintiff. I do not regard his evidence as particularly helpful.
(7) The plaintiff was cross examined on a separate litigation (HCA No A15167 of 1998) between Mustafa Tjie Atteng and Edgar Wong as plaintiffs and Wai Wai and the defendant as defendants. The relevance of this litigation is extremely peripheral. The claim against the defendant was eventually dismissed (by two separate orders, one for each plaintiff and on different dates ‑ it is not necessary to go into the details). The defendant relies on it as some sort of similar fact evidence to demonstrate the plaintiff’s propensity to engage in unmeritorious conduct. The plaintiff relies on it to show that the defendant had a “propensity” to make unfounded allegations of forgery. I do not place any weight on the evidence concerning this separate litigation. To rely on it for the purpose of either side’s contention would have required a wholly disproportionate inquiry in the issues in that case when it is not that action which is on trial before me and when the plaintiffs in that case are not before me. I am not influenced by the evidence concerning that litigation.
124. I should mention here two points which may be said to be in the plaintiff’s favour.
125. First, it may be said that there has been no response to the letter before action. But the defendant has put his story about the six vouchers (and his denial of loans) at a relatively early point in time through his Singapore lawyers.
126. Second, I have not lost sight of the fact that during interlocutory battles, certain remarks in the judgment of Deputy Judge To (as he then was) were made which could be interpreted as skeptical of the defendant’s defence. However, I have reviewed in detail that judgment relied on by the plaintiff. Those remarks were made in an interlocutory context, when materials were purely presented on paper, when there had been no oral evidence and cross examination, and when the matter was dealt with “on paper” in a pragmatic and swift manner in line with the approach commensurate with interlocutory proceedings. “Merits” was not even directly in issue in that application (which was an application to dismiss for want of prosecution). In the full trial before me the matter has taken on a COMPLETELY different complexion after oral testimony and detailed cross examination.
127. I therefore dismiss this action with a costs order nisi that the plaintiff is to pay the defendant’s costs of the action (including all costs reserved) to be taxed if not agreed.
| (Paul Shieh SC) Recorder of the Court of First Instance High Court |
Mr Anthony James Sherry, instructed by Raymond Chan, Kenneth Yuen & Co, for the plaintiff
Mr Leo Remedios and Mr Jose Remedios, instructed by John Ip & Co, for the defendant
Please refer to CACV109/2012 for the relevant appeal(s) to the Court of Appeal.