The Court of Appeal dismissed an appeal by the first defendant, Madam Cheng Yan (“Cheng”), against summary judgment requiring her to return HK$5.99 million received into her bank account. The monies were part of the US$2.34 million defrauded from the plaintiff in May 2023.
Cheng’s defence was that the payments to her account were loan repayments from a friend, Madame Wang, pursuant to a RMB 6.08 million loan made in 2021. She relied on a written loan agreement and a series of transfer records showing payments made by a relative to various third‑party recipients. She further claimed that Madame Wang orally agreed to repay HK$5.99 million in May 2023 to facilitate Cheng’s planned investment under Hong Kong’s Capital Investment Entrant Scheme.
The CA upheld the finding of the judge below that Cheng’s assertions were “not capable of belief”.
At first instance, the judge had not only found that the documentary record was riddled with gaps – pointing out, e.g. that the transfer records did not link the payments to Madame Wang and there was no contemporaneous evidence of any repayment arrangement, including electronic communications containing instructions for payment or requests for repayment – but also raised queries as to the genuineness of the documents produced by Cheng.
The Court rejected arguments that the judge had conducted a mini‑trial on affidavit and held that he had raised valid questions, emphasizing that a judge assessing an O.14 application is entitled to test assertions against inherent plausibility should not “suspend his critical faculties”.
Key Takeaways
- The importance of contemporaneous documents and electronic communication records. Contemporaneous documents and electronic communications are important in resisting O.14, particularly when events of major significance are now generally accompanied by a corresponding electronic footprint. Defendants should endeavour to adduce such evidence or provide satisfactory explanations in their affirmation if the evidence is lacking.
- Even in an O.14 application, the court does not suspend its critical faculties. O.14 does not require the court to accept a defendant’s assertions at face value simply because some documents exist. The court is entitled to test inherent plausibility, examine gaps or inconsistencies, and assess whether the evidence genuinely supports the defence.
Read the Judgment here: https://legalref.judiciary.hk/lrs/common/search/search_result_detail_frame.jsp?DIS=177324&QS=%28sakinah%2Bsat%29%7C%28joshua%2Byeung%29&TP=JU
Mr Joshua Yeung, instructed by Deacons, for the Plaintiff (Respondent).
Ms Sakinah Sat, instructed by Liu & Co, for the 1st Defendant (Appellant).
