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Ming Shiu Chung And Others v Ming Shiu Sum And Others

Judgment Cited authorities 16 Cited in Precedent Map Related
Vincent
Judgment Date23 May 2006
Year2006
Citation[2006] 2 HKLRD 831; (2006) 9 HKCFAR 334
Judgement NumberFACV25/2005
Subject MatterFinal Appeal (Civil)
CourtCourt of Final Appeal (Hong Kong)
FACV000025/2005 MING SHIU CHUNG AND OTHERS v. MING SHIU SUM AND OTHERS

FACV No. 25 of 2005

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 25 of 2005 (CIVIL)

(On appeal from CACV No. 180 of 2004)

_____________________

Between :

MING SHIU CHUNG
also known as HUBERT MING 		1st Plaintiff
(1st Respondent)
MING SHIU TONG 2nd Plaintiff
(2nd Respondent)
MING SHIU HUNG
also known as RONALD MING SIU HUNG 		3rd Plaintiff
(3rd Respondent)
MING SHIU KUEN
also known as BERTHA SHIU KUEN SHAW 		4th Plaintiff
(4th Respondent)
and
MING SHIU SUM
also known as LAWRENCE MING SHUI SUM 		1st Defendant
(Appellant)
J F MING INC 2nd Defendant
(5th Respondent)
THE PERSONAL REPRESENTATIVE OF MING SHIU WAH also known as KENNETH MING 3rd Defendant
(6th Respondent)
MING SHIU KOW 4th Defendant
(7th Respondent)

_____________________

Court : Mr Justice Bokhary PJ, Mr Justice Chan PJ, Mr Justice Ribeiro PJ, Mr Justice Fuad NPJ and Sir Thomas Eichelbaum NPJ

Dates of Hearing : 10-12 May 2006

Date of Judgment : 23 May 2006

_______________________

J U D G M E N T

_______________________

Mr Justice Bokhary PJ:

1. I agree with the judgment of Mr Justice Ribeiro PJ.

Mr Justice Chan PJ:

2. I agree with the judgment of Mr Justice Ribeiro PJ.

Mr Justice Ribeiro PJ:

3. Ming John Foo (“the father”) was the father of seven children. Lawrence Ming Shiu Sum (“Lawrence”) is one of his sons. He is the 1st defendant in the proceedings and the appellant in this appeal. The four plaintiffs, namely, Hubert Ming Shiu Chung, Ming Shiu Tong, Ronald Ming Shiu Hung and Bertha Ming Shiu Kuen, are all siblings of Lawrence and are the 1st to 4th respondents in this appeal.

4. Another sibling, Alex Ming Shiu Kow was joined in the action as 4th defendant. He took an active part in the proceedings, representing himself. He continues to represent himself in this appeal but, not having filed a printed case, was not entitled to be heard (as stipulated by rule 24 of the Rules of the Court). A further sibling, Kenneth Ming Shiu Wah, died in 1998. His personal representative was joined as 3rd defendant but did not take an active part.

5. The father, who was born in 1909, died on 21 December 1992.

6. The Court is indebted to counsel for their helpful submissions, Mr Benjamin Yu SC appearing with Mr Johnny Mok for Lawrence, and Mr Clive Grossman SC appearing with Mr Paul Lam for the plaintiffs.

A. The dispute

7. In 1972, the father, then in his sixties, commenced a property development business. This was done using Ming Hsing Development Co Ltd (“MHD”) as the corporate vehicle, with the father acting as chairman, and Lawrence as managing director, but without the participation of the other children who had all settled abroad. Over the next 20 years, the business prospered with the father and Lawrence at the helm. Older buildings were acquired, redeveloped and sold, with the proceeds, together with bank borrowings, used to acquire further buildings for similar redevelopment.

8. In 1992, through this process of trading up its assets, the business had grown to encompass a group of at least six companies, including MHD, with holdings worth some $288 million. In support of the banking facilities enjoyed by the group, Lawrence was providing personal guarantees carrying an exposure of some $214 million. However, the health of the father, then in his eighties, was failing. With a view to saving estate duty, he caused J F Ming Inc (“JFM”), a British Virgin Islands company, to be formed and to act as the holding company of the group. JFM was joined as the 2nd defendant in these proceedings.

9. It is common ground that each of the seven children had duly been allotted 1,000 bearer shares in JFM. However, Lawrence claims to have been allotted 10,000 additional shares in JFM (comprising 5,000 bearer shares and 5,000 ordinary shares issued in his name), constituting him the majority shareholder. The plaintiffs dispute this and ask the Court to declare the purported issue and allotment of the 10,000 shares void and of no effect.

10. Both Deputy High Court Judge To (HCA 18407/1999, 30 April 2004) and the Court of Appeal (Cheung and Tang JJA, and Kwan J, CACV 180/2004, 26 May 2005; Tang JA giving the judgment of the court) granted the declarations of invalidity and consequential orders sought by the plaintiffs, although on different grounds. Lawrence brings this appeal.

B. The documents challenged by the plaintiffs

11. In support of his claim to be holder of the 10,000 shares, Lawrence relies on two board minutes dated 8 August 1992 (referred to as “M1” and “M2” respectively and together as “the August minutes”). He also relies on ten share certificates for 1,000 shares each of the same date.

12. The August minutes purport to relate to a meeting of JFM’s directors attended by the father and Lawrence on 8 August 1992 at the company’s offices in Jade Centre on Wellington Street. M1 records a resolution to issue 5,000 ordinary shares in JFM to Lawrence, while M2 does the same in relation to the issue of 5,000 bearer shares. The ten share certificates comprise five certificates (numbered 01 to 05) for 1,000 ordinary shares each made out in Lawrence’s name, and five certificates (numbered BSS1 to BSS5) for 1,000 bearer shares each. Each of the August minutes and the ten share certificates bear the purported signatures of the father and Lawrence signing as officers of JFM.

C. The basis of the plaintiffs’ challenge

13. The basis of the plaintiffs’ challenge to the validity of Lawrence’s shareholding is set out in the following paragraphs of the Statement of Claim:

“15. There was no director’s meeting of [JFM] held on 8 August 1992 as alleged or at all. The minutes produced by [Lawrence] were tampered with, they were in fact dated October 1992.

16. The plaintiffs dispute the genuineness of all the purported signatures of [the father] on the [relevant] ...... share certificates and the minutes of the 2 board meetings allegedly held on 8th August 1992.

17. The plaintiffs aver that the alleged allotment and/or issuance of the 10,000 shares of and in [JFM] to [Lawrence] was carried out without the knowledge or consent of the [father], and there has never been any valid allotment and/or issuance of the 10,000 shares to [Lawrence] in August 1992 as alleged or at all.”

14. Although the Statement of Claim does not expressly allege that the documents are forgeries, it is clear that such is the gravamen of the charge made in paragraphs 15 and 16.

15. On its face, paragraph 17 appears merely to be consequential on the plea of forgery. If, as the two preceding paragraphs allege, the documents were signed by a forger and not by the father, the purported allotment and issuance of the 10,000 shares were not the father’s acts and one can well understand why paragraph 17 goes on to allege that he did not know of and did not consent to those acts.

16. However, it has been essential to the plaintiffs’ case below and is essential to its case before the Court, that paragraph 17 should be understood as asserting an independent and alternative basis for alleging that there has been no valid allotment and issuance of the 10,000 shares. The plaintiffs seek to contend that even if the father’s signatures are held to be genuine, he signed the documents without knowing what he was doing. By this, Mr Grossman explained, they mean that the father did not know the nature and quality of, that is, did not know the contents of, the documents he was signing.

17. Such a case is not what the language of paragraph 17 of the Statement of Claim conveys. Nevertheless, it is clear that the case has always proceeded on the footing that the plaintiffs are making a separate assertion of lack of knowledge and consent in the sense explained by Mr Grossman and that no objection based on the pleadings was taken on Lawrence’s behalf. Thus, summarising the plaintiffs’ case, the Judge states:

“The inference they ask me to draw is that the Father’s signatures on some of the share certificates were forged or even if they were genuine, they were signed without the Father’s knowledge and consent as to the contents and effect of these documents.” (§8)

And, likewise, the plaintiffs’ case was articulated by the Court of Appeal as follows:

“The plaintiffs’ claim was put on two bases. First, the minutes as well as the share certificates (the documents) were not signed by the father. Secondly, if they had been signed by the father, he did not know what he was signing.” (§22)

18. What is very much in issue is whether, without the alleged forgery being established, an absence of knowledge and consent as to the contents of the documents can be inferred and, if so, whether that is capable of constituting a sound, free-standing, legal basis for invalidating the allotment and issuance of the 10,000 shares.

D. The decision at first instance

(i) The evidence relied on by the plaintiffs

19. At the forefront of the plaintiffs’ case is the document in Chinese dated 29 September 1992, referred to as “the Chinese memorandum”. This was the document which the father caused to be prepared and which, on 10 October 1992, he caused to be read out to his seven children whom he had assembled in Hong Kong, offering them each the incentive of $5 million for attending. In its English translation, it is a three-page document with a schedule of assets and liabilities annexed. The schedule shows JFM as the holding company of six other companies, indicating the assets and liabilities of each such company and giving a figure of some $288 million as the net assets of the group. In the body of the Chinese...

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