Justice Bokhary PJ & Justice Chan PJ
Where a trial court has inordinately delayed giving judgment it is appropriate for the appellate court to emphasise, for the purpose of future cases, that litigants are entitled to have their cases decided with reasonable promptitude. And then the appellate court must get down to doing the best practical justice it can in the case at hand. We would not rule out the possibility of circumstances in which, however hard one tries to avoid it, a new trial has to be ordered. That, mercifully, is not the position in the present case. Quite simply, the claim is for the repayment of the balance of money which, it is not disputed, had been paid by the plaintiff to the defendant. Such payment had been made in anticipation of a stock exchange listing. The listing not having gone through, it is difficult to see how the defendant could have successfully resisted repayment even if his evidence had been accepted. Moreover, as it happens, the Recorder rejected his evidence. And so inherently improbable was his evidence that no argument for reversing her rejection of it can get off the ground even under the heightened appellate scrutiny called for by the elapse of 30 months between the end of the trial and her decision. For these reasons and the reasons given in more detail by Mr Justice Ribeiro PJ and Mr Justice Mortimer NPJ, we were party to the decision, announced at the conclusion of the hearing, dismissing this appeal. Upon the defendant’s counsel indicating that he could not resist costs, the Court awarded costs to the plaintiff.
Justice Ribeiro PJ
I respectfully agree with the judgment of Mr Justice Mortimer NPJ and gratefully adopt his recitation of the facts. I would like to make a few additional comments of my own.
WHY THE APPEAL MUST FAIL
After hearing the submissions on behalf of the defendant, despite the valiant efforts of Mr Jat Sew-tong SC, it became clear that the appeal had to be dismissed. This was so notwithstanding the disturbingly inordinate delay which had ensued between the end of the trial and delivery of judgment by the learned Recorder and notwithstanding Mr Jat’s complaint that her Ladyship had decided the case on a basis which neither side had advanced.
The fundamental reason why the appeal had to fail is that, on any view, payment over of the monies by the plaintiff to the defendant was premised on the proposed listing of GBRE (by reference to which I include the proposed listing vehicle which would hold GBRE). While there was a dispute as to what precise legal rights the defendant had contracted to acquire for the money paid, that did not ultimately matter. Whatever form the investment was intended to take, it was, on any reasonable hypothesis based on the pleadings and on the evidence, an investment which was contingent upon the intended listing. No listing having occurred, no legal basis exists for the defendant retaining the money.
As I shall endeavour to show, the pivotal nature of the intended listing is pleaded by the plaintiff and is also part of the defendant’s pleaded case. The two key documents relied on by Mr Jat also make this clear. The Recorder agreed, finding that in the absence of a listing, the monies paid had to be returned. She differed from the plaintiff in this context only in respect of the time by which a listing had to be achieved, rejecting the pleaded contention that this had to happen by the end of July 1997, but accepting his alternative case that it had to occur within a reasonable time after the payments. By the time of the trial, some 5 years had passed without any listing. Plainly, if a reasonable time was relevant, that time had long since passed.
THE PLEADED CASES
It is common ground that the plaintiff paid to the defendant the sums referred to in the judgment of Mr Justice Mortimer. There was, however, a dispute as to exactly what it was that he had bargained to obtain for that money.
The plaintiff’s case was that he was purchasing shares in GBRE owned by the defendant (see Re-Amended Statement of Claim (“RAMSOC”) §§5, 6, 14), it having been represented to him (RAMSOC §3(e)), that if for any reason GBRE could not be listed on the Hong Kong Stock Exchange by the end of July 1997, “the defendant would refund to the plaintiff the entire purchase price paid by the plaintiff for the purchase of the defendant’s shares in GBRE.” The plaintiff goes on to plead that the listing did not occur by the end of July 1997 (RAMSOC §17) or alternatively, within a reasonable time on the basis of an implied term (RAMSOC §27(a)), and so claims the return of the money. Pleaded refinements as to the rights of the parties arising only after a listing, such as the defendant’s option to deliver listed shares or a sum calculated according to a particular formula instead, need not detain us.
The defendant denied any contract to sell GBRE shares to the plaintiff. He asserted that the plaintiff had agreed to purchase shares, referred to as “redeemable preference shares”, in a Cayman Islands company called The PRC Expressways Fund Ltd (“the Fund Company”) as an indirect means of investing in the proposed flotation of GBRE. The pleading explains the scheme as follows, citing contemporaneous documents:
Prior to its intended flotation, larger investors, meaning those willing to invest at least US$10 million in the project, were offered GBRE shares owned by the defendant (and others) at a price said to be heavily discounted against the net asset value of GBRE (Re-Re-Amended Defence (“Re-RAMDEF”) §4(c)). Such investors would benefit from their discount and any market appreciation upon flotation.
Smaller investors were not sold any GBRE shares but were offered a chance to invest in the Fund Company which would exclusively hold GBRE shares as its assets - Re-RAMDEF §4(g)(v). The pleading specifies that:
The mode of participation [of these smaller investors] is in the form of [redeemable preference shares] which are intended to be redeemed at the option of the Fund as far as possible within 6 months after the date of listing of the shares of GBRE ... (Re-RAMDEF §4(g)(vi)).
The Redeemable Preference Shares would not be dealt in on any securities market; returns to Shareholders will be through redemptions of the Redeemable Preference Shares. The Fund intends to make redemptions of the Redeemable Preference Shares in specie by the distribution of shares representing its interest in GBRE which are dealt in on a recognised securities exchange over the 6 months following the date of the listing of such marketable shares - Re-RAMDEF §4(g)(vii).
The defendant asserts that the plaintiff, through him, was to subscribe for redeemable preference shares in the relevant amounts - Re-RAMDEF §11(a). It is therefore the defendant’s case that the money was paid to purchase shares in the Fund Company, which was an investment in which the plaintiff’s “mode of participation” involved his getting returns through a distribution by the Fund Company in specie of listed GBRE shares within 6 months following the date of the listing. Of course, after a listing, such distributed shares could be sold on the market, translating the investment into cash. But without a listing, the sole specified mode of participation in the investment was inoperative.
A refinement pleaded was that due to the plaintiff’s anxiety not to have his investment tied up for as long as 6 months after flotation (Re-RAMDEF §4(p)), the defendant undertook an obligation to relieve him of his redeemable preference shares at a stated price if the Fund Company had not itself redeemed them within one month of the flotation. That is a refinement which obviously only becomes relevant if and when a listing occurs.
The defendant’s pleading also recognizes that a listing might not take place and refers to warnings given that this might be so. This emphasises the central importance of the proposed listing to the scheme and does not, of course, in any way suggest that without a listing the money could still somehow be retained by the defendant.
It is therefore clear that there was no dispute that the money was paid over on the premise that GBRE would be listed. The defendant’s pleaded defence was that he was entitled to hold on to the monies because there was effectively no time limit for achieving the listing.
Thus, he pleads that there was no agreement for a refund “if [GBRE] could not be listed on the SEHK by the end of July 1997.” He makes the emphasis clear when he states: “None of the letters ... which the plaintiff signed, mentioned that the listing [of GBRE] must take place by a certain date.” (Re-RAMDEF §15.)
After stating that the listing had to be postponed because of “economic turmoil” (Re-RAMDEF §32) and then made a term of the agreement (RAMSOC §§6(a)), he pleads as follows:
.... Arrangements are still being made for the listing of [GBRE] and the defendant remains willing and ready to fulfil his payment obligations in the event of the Fund failing to redeem the plaintiff’s Redeemable Preference Shares within one month after the listing of [GBRE]. In the premises, the plaintiff is not entitled to any repayment from the defendant as alleged .... (Re-RAMDEF §42).
Not surprisingly, the Recorder rejected the notion of an open-ended right to keep the money without any realistic prospect of a listing and Mr Jat disowned that contention. The position adopted by the defendant in the pleading is legally and commercially unsustainable. It appears to rely on the defendant’s alleged promise to effect an early redemption a month after listing if the Fund Company should by then not itself have redeemed the redeemable preference shares, as somehow justifying the indefinite retention of the monies paid. But that early redemption obligation is itself expressly dependent upon a successful listing and so plainly cannot govern the position where the stock exchange has rejected the application for a listing and no flotation is in prospect.
There necessarily had to be implied a reasonable time requirement to give the transaction business efficacy, as the Recorder held. And that time had plainly expired. The payments must either have been conditional on there being a listing within a reasonable time or made in consideration of being allotted shares which were capable of being redeemed for listed shares within a reasonable time. Where the listing has not occurred, the money must, as a matter of general principle, be returned either because the condition has not been satisfied or because there has been a total failure of consideration. In fact no shares in the Fund Company were ever allotted to the plaintiff. But even if they had been allotted, they were never “redeemable” against listed shares as promised, so that they would not have constituted the agreed consideration.
MR JAT'S ARGUMENT
Ironically, having attacked the Recorder for departing from the pleadings, that is precisely what Mr Jat then sought to do on his client’s behalf. He endeavoured to argue that the true agreement was that the money was paid over, not to purchase redeemable preference shares in the Fund Company, but on a contract for some kind of informal derivative investment whereby the money was to be repaid in an amount calculated by reference to the value of the pre-listing GBRE shares and without any obligation to make a refund notwithstanding the absence of a listing. That was plainly a departure from the defendant’s pleading which repeatedly asserts that the plaintiff’s investment was in the purchase of redeemable preference shares in the Fund Company, the only variations agreed having been in relation to the amount invested - Re-RAMDEF §§12, 21 and 25.
Mr Jat rested this argument on the terms of two letters, dated 4 February 1997 and 17 February 1997 respectively, which are set out in full in paragraph 50 of the judgment of Mr Justice Mortimer. With respect to Mr Jat, far from bearing out his argument, they contradict it.
Thus, paragraph 1 of the 4 February 1997 letter is concerned with calculating the number of Fund Company redeemable preference shares either actually or notionally to be purchased by the plaintiff pursuant to the parties’ agreement. It refers to the money as having been paid “to participate in the profit and gains” of the number of redeemable preference shares so calculated. Then paragraph 2 makes it unequivocally clear that such participation is dependent on, and can only operate if there is, a listing:
[Subject to the payments being made] I will, in full satisfaction of your above participating interest, repay you within one (1) month after the listing of the holding company of GBRE (‘LISTCO’), in the amount equivalent to the value of such number of redeemable preference shares [in the Fund Company] as determined above, by reference to the issue price of the initial public offer of the shares in LISTCO or by reference to the closing market price of the shares in LISTCO on the date preceding the date of payment, whichever is the higher.
The emphasis added show that the transaction envisaged by this letter can only take effect if and when there is a listing so that the month referred to can start to run and so that the repayment amounts can be calculated.
The letter of 17 February 1997 is structured in the same way, with the first part of paragraph 2 being concerned with determining the equivalent number of shares the plaintiff is to be treated as having acquired, with a repayment obligation again arising one month after listing to pay a sum calculated by reference either to the issue price or to a relevant closing market price.
Mr Jat sought to argue that the agreement reached by the parties entitled the defendant to keep the money since it was always possible that some value might in some indeterminate way, at some indeterminate time in the future, be realised by disposal of the assets of GBRE, thereby producing returns for investors in the position of the plaintiff. He suggested that some other enterprise might wish to purchase GBRE or its assets or that those assets might even be acquired by the state. That, he submitted, would suffice since that would satisfy the plaintiff’s contractual right “to participate in the profit and gains” referred to in the 4 February 1997 letter. I cannot accept that as an arguable construction of that letter. It ignores the second paragraph set out above which specifies how that “participation interest” is to be fully satisfied, namely, by payment a month after listing in an amount calculated on figures derived from listed prices. There is no escape from the crucial requirement of a listing. No legal basis exists for the defendant holding onto the plaintiff’s money pending some wholly amorphous and uncertain disposal of the GBRE shares.
THE RECORDER'S DECISION
The Recorder did not accept either party’s case on the precise legal rights bargained for by the plaintiff. She did not accept either that he was purchasing GBRE shares owned by the defendant (Judgment §43) or that he was purchasing redeemable preference shares in the Fund Company - Judgment §51. Her Ladyship found instead (on the basis of the two letters referred to above) that - Judgment §49:
.... what the defendant undertakes is to pay a sum of money to the plaintiff within one month after the listing of the holding company of GBRE calculated according to different formulae which enabled the plaintiff to benefit from any upside in the market price of the shares of the listed company. The plaintiff signed and accepted the terms in each letter. There is no option or obligation on the defendant to deliver any shares to the plaintiff.
It may be arguable whether the Recorder was entitled to come to such a conclusion (echoed to some extent in Mr Jat’s aforesaid argument), contrary to the pleaded cases of both sides. But that aspect of her decision does not matter. The case never reached the stage of having to determine the precise nature of the legal rights acquired. What is crucial is that the Recorder decided that payment of the money was always conditional upon there being a listing within a reasonable time. Thus, she stated - Judgment §54:
Upon the proper construction of these letters, in return for the plaintiff’s payments in the stated amounts, the defendant is bound to make a payment to the plaintiff within one month after the listing of the holding company of GBRE of an amount calculated in accordance with the terms set out in the letters. Thus, unlike an investment involving a purchase of GBRE shares or Fund shares which may have been made in the expectation of a listing but is nonetheless a complete transaction in itself, the agreement entered into between the plaintiff and the defendant is premised on the occurrence of a listing because only upon a listing could it be determined what the plaintiff was to receive in return for the money which he had paid. If there is no listing, there must be a total failure of consideration on the part of the defendant as the plaintiff will have parted with his money for nothing ....
She added, in relation to an implied term - Judgment §56:
The agreements are only workable if there is implied into them a term that the listing will take place within a reasonable time. The agreements rested upon the basis of there being a listing of ‘LISTCO’ without which the amount due to the plaintiff could not be calculated. Thus, if there was no listing, the defendant would be bound to repay the plaintiff the full amount of his investment. However, without an express contractual date by which the listing should have occurred, the agreements would be unworkable and there must be an implied term that the listing would take place within a reasonable time of the making of the agreements.
She concluded, rejecting the defendant’s case that the period for achieving a listing was open-ended, as follows - Judgment §63:
.... Given the statements which the defendant made to the plaintiff prior to the agreements about the timing of the listing and the defendant’s admission that he understood that the plaintiff’s investment was intended to be a short-term investment, a reasonable time had certainly expired well before the plaintiff’s solicitors wrote to the defendant on 6 May 1999. After all, while the listing was pending, the defendant had interest-free use of the plaintiff’s investment and the plaintiff was forgoing alternative investment opportunities for the HK$50 million paid to the defendant. In the circumstances, I hold that a reasonable time had expired by the end of 1997.
In my view, while the extraordinary delay was extremely regrettable, the Recorder’s judgment rests on a basis that can plainly be seen to be objectively sound. That a public listing of GBRE was an essential condition of the transaction was acknowledged in both sides’ pleadings, supported by the evidence in general and the key documents relied on by the defendant in particular. The implication of a reasonable time term was plainly and obviously necessary. Accordingly, the essential features of the case are such that the Recorder’s decision was fortunately unaffected by the inordinate delay which has occurred and the appeal must be dismissed.
Justice Mortimer NPJ
This is a Defendant’s appeal against a decision of the Court of Appeal on 14 February 2006 which upheld Recorder Gladys Li SC’s judgment in the Plaintiff’s favour awarding him Hong Kong $32 million with interest and costs.
The hearing of this action ended on 2 May 2002. The Recorder delivered her judgment on 12 November 2004 – a delay of 30 months. With this background, the first issue for our consideration concerns the evidence. It is in two parts. On the evidence, was it open to the Recorder to make the findings she made on the terms of the agreement upon which the Plaintiff parted with his money? Then, has it been demonstrated that the judgment contained misunderstandings, errors, omissions, shortcuts and the like brought about by the delay so that it is unsafe? The second issue overlaps and concerns both the pleadings and the evidence. Was it fair or just to give judgment against the Defendant when the precise terms of the bargain found by the Recorder had not been pleaded by either party?
At the conclusion of the hearing the appeal was dismissed and the Plaintiff was awarded his costs. I now give reasons.
The Plaintiff is a surveyor. He is wealthy having been highly successful both in his profession and as an investor. The Defendant is a solicitor. When working for a large international firm he became involved in projects on the mainland. So, in 1994 he established his own practice. In 1995 he formed the Asia-Pac Group of Companies which undertook direct investment in property and infrastructure development on the mainland. The Group included Asia-Pac Infrastructure Development Limited (APID) and Asia-Pac Expressways Investment Management Limited (APEIM). Both were wholly owned by him.
In 1996 he formed Greater Beijing Region Expressways Limited (GBRE), a British Virgin Islands company, with Mr Gao Jiaren. Through subsidiaries this company held interests in the building and running of toll roads in Beijing, Tianjin and Hebei regions. It was intended that GBRE would become listed on the Hong Kong Stock Exchange during 1997.
The Plaintiff and the Defendant became known to each other before 1996 and were friends. They were involved together in investment in property development on the mainland.
Before the events concerned in this appeal there had been a number of highly successful Initial Public Offerings (IPO) on the Hong Kong Stock Exchange of companies involved in mainland development and infrastructure.
All the shares in GBRE were held by Miracle Chance Limited which itself was owned in the proportion 65% and 35% respectively by Gao and the Defendant. With the intended listing of GBRE in mind, a first tranche of its shares were offered for private placement at 58% of net asset value (NAV) – however this had been calculated. This tranche was offered to institutional investors in individual placements of not less than US $10 million. Secondly, for individual investors, and in order to cater for investors who did not want to invest as much as US$10 million, the Defendant set up PRC Expressways Fund Limited (the Fund) which had agreed itself to invest US $30 million but offered individual investors an allotment of “redeemable preference shares” in the Fund with a minimum investment of US $2 million each. As will be explained these so called ‘redeemable preference shares’ were not preference shares nor were they ‘redeemable’ in the ordinary sense of the word.
A Confidential Information Memorandum (CIM) was issued on 10 October 1996 for this first tranche placement. The CIM outlined the intention to place the shares in 1996 and to have GBRE listed with an IPO no later than 30 June 1997.
The Fund’s only asset was its GBRE shares and the CIM indicated that the ‘preference’ shares were to be ‘redeemed’ within six months of the listing of GBRE either in cash or in specie by the transfer to the investors of GBRE shares. The intention was that the Fund, and thus the individual investors would benefit from a listing and an IPO of GBRE shares. But, in any event the fund was to be liquidated at the end of three years.
The successful placement of the GBRE shares was greatly in the Defendant’s interest.
In October 1996 the Defendant tried to interest the Plaintiff in the first tranche investment by sending him the CIM and other documents with a letter informing him of the “tremendous response” but the Plaintiff was not interested and did not take up the invitation.
THE SECOND TRANCHE
In December 1996 the Defendant offered a second tranche of the GBRE shares for placement. A draft CIM was produced with other documents which included a December Term Sheet. In her judgment the Recorder noted that the listing date forecast in the latter document was “[a]round 31 March 1997, but not later than 30 June 1997 subject to market conditions.”
As the intended listing date was nearer to this placement the discount to NAV offered was reduced to 45%. Investment through redeemable preference shares in the Fund was still offered.
Against this background the Plaintiff agreed with the Defendant to invest by participating in the GBRE project. I will return to the circumstances and terms of this agreement but it is common ground that pursuant to their agreement the Plaintiff paid a total of $50 million to the Defendant in several installments. On 5 February 1997 he paid $10 million. On 17 February 1997 he parted with $20 million and he invested a further $20 million on 4 March 1997. Of these sums the Defendant later repaid $10 million on 29 May 1998 and a further $8 million on 15 July 1998. He failed to repay the balance of $32 million which is the subject of this claim.
THE PLAINTIFF'S PLEADED CASE
The Plaintiff pleaded that his investment was made under two agreements. The first was made partly orally at a meeting on 3 February 1997 and partly in writing in letters from the Defendant to which he assented on 4 February and 17 February 1997. The oral representations related to the nature of GBRE and arrangements for its listing no later than July 1997; also, that the Plaintiff would pay for discounted GBRE shares which would be allocated to him so that he could realize the profit on the price he paid and the increased share price at the IPO; further, that if for any reason listing did not take place by the end of July the Defendant would refund all the money to the Plaintiff. This was recorded in the Defendant’s letter dated 4 February 1997.
The original agreement was for an investment of $20 million, $10 million of which was paid on 5 February 1997. But on 17 February 1997 the parties orally agreed to vary the total amount to $30 million and the balance of $20 million was paid on the same day. This variation was set out in the Defendant’s letter of 17 February 1997.
The Plaintiff’s pleading then alleged a second oral agreement on about 20 February 1997 in which the parties agreed that the Plaintiff would buy an additional $20 million worth of shares on the same discounted terms as in the first agreement. This sum was duly paid on 4 March 1997.
It was agreed that on the listing and the IPO of GBRE the Defendant had the option either to deliver the GBRE shares in accordance with the discounted price or to pay to the Plaintiff within one month of the listing a sum calculated according to an agreed formula. See the letters of 4 and 17 February.
As the listing had not taken place by 30 June 1997 or within a reasonable time, the Plaintiff claimed the balance of $32 million under the agreements, or on the basis of a total failure of consideration, or because the contracts had been frustrated.
THE DEFENDANT'S PLEADINGS
The Defendant’s re-re-amended pleaded case was that the agreements, partly oral and partly in writing, were for the Plaintiff to invest in the Fund so as to be entitled to redeemable preference shares in that company. In the absence of a listing, the Defendant had no obligation to pay money to the Plaintiff who remained entitled to the shares but with all the risks and consequences outlined in the health warning in the CIM.
THE EVIDENCE AT THE HEARING
The Plaintiff’s evidence was generally in accordance with his pleadings.
The Defendant’s evidence, contrary to his pleaded case, was not that the agreements were for the Plaintiff to invest in the redeemable preference shares of the Fund, but that they were to participate in the profits and gains of the Fund according to the formula in the letter of 4 February. If therefore GBRE was listed, the payment to the Plaintiff would be on the basis of the value of the shares as offered on the IPO or their market value within one month of the IPO whichever was the higher. On the other hand, if there was no listing he would only have an entitlement to retain his shares in the Fund until the liquidation of the Fund at the end of the three years.
The Defendant said his later repayments totaling $18 million were ex gratia only. They were made because the Plaintiff complained of being short of money and were not repayments under the agreements.
On a practical level the crucial difference between the parties is what were the agreed consequences (if any) of GBRE failing to be listed. As I have indicated, the Plaintiff contended that in the absence of a listing by the end of July 1997 the Defendant orally undertook to refund the whole sum. On the other hand the Defendant said that as the agreement was for the Plaintiff to buy an entitlement to shares in the Fund, he would be able in the absence of a listing to hold those shares for what they were worth knowing that the Fund was to be liquidated within three years.
THE RECORDER'S FINDINGS
As can be seen from her judgment the Recorder analysed the evidence in detail and with care. She was able to accept neither the Plaintiff’s nor the Defendant’s evidence in full.
The background was that the Defendant had initially failed to interest the Plaintiff in GBRE shares. However, when the second tranche placement at 45% discount to NAV was being planned the Plaintiff’s interest was stirred after he had been sent the draft CIM and other documents. Consequently, there was no dispute that at a meeting on 3 February 1997 followed by the two letters of 4 February and 17 February 1997 it was agreed that the Plaintiff would participate to the extent of $30 million. Although the letter of 4 February recorded part of the agreement the Recorder held that this was superseded by the letter of 17 February. Contrary to the contentions advanced this was not an agreement for a purchase of shares in either the Fund or the GBRE but a purely money arrangement whereby the Plaintiff would pay $30 million to the Defendant and the Defendant would repay on listing and the IPO a sum calculated with reference to the formula set out in the letter of 17 February.
The two letters read as follows: First the letter of 4 February:
The PRC Expressways Fund Limited
I refer to our discussion yesterday.
As agreed, I understand you will send me the amount of HK$20,000,000 (equivalent to US$2,587,322 at rate of US$1=HK$7.73) on the following basis :
Please confirm your acceptance of the above by signing and returning a copy of this letter to me.
Then the letter of 17 February:
I refer to our recent discussions and the letter agreement dated 4th February, 1997 (“Letter Agreement”), which will be superseded by the following :
Please confirm your acceptance of the above by signing and returning a copy of this letter to me.
Significantly, as can be seen neither letter provided for the Plaintiff to purchase shares in either the Fund, GBRE or Listco. The letter of 17 February varied the method by which the repayment was calculated and both clarified and simplified the agreement.
The Recorder carefully reasoned and supported her findings on these points. The contemporaneous letter of 17 February agreed to and signed by both parties was in such unequivocal terms that she felt obliged to reject the alternative inconsistent contentions. Further it was clear to her that when the Plaintiff was cross-examined upon his answer to interrogatories on 29 May 2001 he accepted in effect that the statement that the listing would take place by the end of July 1997 was more “sales talk” than a contractual warranty. Nevertheless she held it necessary to imply a term that the listing would take place within a reasonable time in order to give the agreement commercial effect. This ‘reasonable time’ she held to have expired at the end of 1997. The listing and an IPO was pivotal and an essential term of the agreement, there being no provision in the event of listing not taking place.
Both parties conceded that the agreement was for a short term investment and the Recorder held that the Defendant undertook orally to repay the money in the absence of listing. She held that in any event the absence of listing would involve a total failure of consideration which would entitle the plaintiff to repayment.
I turn now to the main grounds of appeal. Through his Counsel Mr Jat Sew-Tong S.C. the Defendant raises the issues to which I have referred. He contends that it was not open to the Recorder to find an agreement in the terms I have outlined and give judgment in the Plaintiff’s favour, when such agreement was not precisely pleaded by either party. Although this is expressed as a pleading point Mr Jat elaborates that neither the Recorder nor the Court of Appeal correctly understood the evidence on the bargain struck between the parties at the 3 February 1997 meeting and set out in the February letters. This led to the Defendant having an unfair trial because he was deprived of the opportunity of properly preparing for trial to meet the case found against him.
Mr Jat’s other submissions are related. He submits that the Recorder’s delay in delivering judgment “probably or possibly” led to her misunderstanding of the evidence and to other errors, omissions, inconsistencies and the like in the judgment. Consequently the judgment is unsafe and should be reversed.
DELAY IN DELIVERING JUDGMENT
Initially it is convenient to turn to the delay. What problems, if any, led to this able Recorder failing to deliver judgment for 30 months are unknown and in any event are not relevant to our determination. A delay of 30 months before delivering judgment after trial is wholly excessive and unacceptable. Obviously, it may lead to a denial of justice as a Judge’s memory of the evidence, the witnesses, the submissions and the trial itself may fade with time. In these circumstances how should an appellate court approach submissions on the probable or possible effect of such delay?
First, it is necessary to note that even delay of this length cannot alone succeed as a ground of appeal in the absence of it being shown that there are omissions, errors, misunderstandings, inconsistencies and the like which invalidate the Recorder’s findings, render the judgment unsafe, and have led to injustice to the Appellant.
Delay of this nature therefore increases the burden on an appellate court. Necessarily it must be vigilant to ensure that the decision and reasoning have not been harmed in any significant or fatal way by the passage of time. Counsel’s submissions and the evidence require detailed examination.
On the other hand, much as an appellate court may deplore delay of the length here shown, to overturn an otherwise sound judgment simply on delay would amount to a greater injustice than the delay itself.
The point is eloquently made by Lord Scott in Cobham v Frett (PC)  1WLR 1775 at 1783 H to 1784 A:
In their Lordships’ opinion, if excessive delay, and they agree that 12 months would normally justify that description, is to be relied on in attacking a judgment, a fair case must be shown for believing that the judgment contains errors that are probably, or even possibly, attributable to the delay. The appellate court must be satisfied that the judgment is not safe and that to allow it to stand would be unfair to the complainant.
Later in the same judgment at 1784 D to H he cited a number of cases which illustrate the point:
In Goose v Wilson Sandford & Co The Times, 19 February 1998; Court of Appeal (Civil Division) Transcript No 196 of 1998, in which Peter Gibson LJ gave the judgment of the court on 13 February 1998, the Court of Appeal set aside a judgment of Harman J on certain issues and sent the issues back for rehearing before another judge. There had been a delay between trial and judgment of some 20 months during which some of the judge’s notes had been lost. Material factual errors in the judgment were demonstrated. In Gardiner Fire Ltd v Jones The Times, 22 October 1998; Court of Appeal (Civil Division) Transcript No 1638 of 1998, in which Lord Woolf MR handed down judgment on 20 October 1998, a 22-month delay was severely criticised, but only a minor error in the Judgment (on a point on the pleadings) was identified and the appeal was dismissed. In Times Newspapers Ltd v Singh and Choudry (unreported) 17 December 1999; Court of Appeal (Civil Division) Transcript No 2156 of 1999, in which Peter Gibson LJ handed down the judgment of the Court of Appeal, the judge had taken seven months to complete an 80-page judgment. The court did not think he could be criticised for taking so long but Peter Gibson LJ added: ‘More pertinently, in the absence of any sign whatsoever that the Judge has misremembered any evidence it is, in our judgment, impossible to see how the appeal could succeed on this ground’.
These cases demonstrate, in their Lordships’ view, the correct approach to be adopted by an appellate court to an appeal based on excessive delay in delivering judgment.
The possible injustice caused by delay in delivering a decision is not limited to the failing of the Judge’s memory leading to error; delayed resolution of a dispute is an injustice in itself. However, the focus for present purposes is upon the Recorder’s recollection. It is therefore pertinent to note that the Recorder took a full and accurate note. The Court of Appeal was able to compare her note with the transcript. Both were available. Although we have not seen this note, there is no suggestion from Counsel that there is any relevant material discrepancy. Further, a Judge’s note often records not only the salient parts of the evidence but also his or her initial impressions of the reliability of the witness and the evidence. Of course, these initial impressions may be later revised and recorded in further notes. If unusually (as here) the Judge’s record of the evidence is disclosed to the parties a Judge’s comments for his own assistance are not revealed. Such comments are an invaluable aid to a Judge who has reserved judgment.
Having compared the Recorder’s note with the transcript, Rogers VP giving the leading judgment in the Court of Appeal observed at 13S:
A comparison of the notes and the transcript shows two things. Firstly, the judge took a very full note. Secondly, it would appear that the judge must have confirmed material parts of the evidence by listening to the recording.
In passing, I refer to the Recorder’s approach to the demeanour of the witnesses. This overall impression that a Judge has of a witness when giving evidence is often relied upon as a guide to reliability or even truth. It is one of the first matters to fade in a Judge’s memory even if an appropriate note is taken. But the risks of relying upon demeanour as a guide as to the truth or otherwise of a witness are widely and properly recognised. Demeanor is a poor and possibly misleading yardstick compared with consistency, contemporaneous documents and the like.
It is relevant to note therefore that in making her findings against the Defendant the Recorder said :
I do not, however, rely on his demeanour in making these findings.
Nor did she rely on the demeanour of the Plaintiff who was the only other live witness.
I am in full agreement with Rogers VP when he said at page 13 of his judgment:
As a preliminary observation, I would mention that in the first place the judgment itself demonstrates that far from the judge not recollecting the events and issues at the trial, her concise and precise reasoning demonstrates that she was fully aware of all the facts and matters and, indeed, events of the trial.
But the matter cannot be left there. I turn to the Defendant’s detailed submissions to ascertain whether he has demonstrated any of the material findings to be unsafe.
I turn first to consider whether on the evidence it was open to the Recorder to find as she did. In examining the evidence it is convenient to decide whether the judgment has been shown to be unsafe because of the effects of the passage of time. Finally, I will turn to the pleading point and whether it is shown that there was any unfairness towards the Defendant.
SUMMARY OF MR JAT'S SUBMISSIONS
In summary, Mr Jat contends that the Recorder misunderstood the agreement reached because she gave no weight to the 4 February 1997 letter which recorded the central terms of the oral agreement reached on the 3 February. She was not therefore entitled to find that the letter of 17 February 1997 superseded the earlier letter. It was intended to record the same bargain save for the amount involved.
In further support he urges that the letter of 4 February was signed by the Plaintiff without query; that the other investment discussed on 3 February was for a “participation interest” only; that save for a telephone call concerning the sum to be invested no further negotiation took place between the signing of the first letter and the second letter; and the receipts for the sums invested were inconsistent with the finding. The receipt of 18 February 1997 for $30 million records that it relates to the PRC Expressways Fund Limited and “being as to payment of subscription”.
Therefore, says Mr Jat, on the basis of the 4 February letter the Recorder ought to have found that the true bargain was that the Plaintiff participated in the profits of shares in the Fund (without taking them up) but also there was a one month cash option after any IPO based on the sum invested and the value of the shares in the Fund.
On the basis that this is correct, Counsel argues that it was unnecessary and erroneous to imply any term that listing would take place within a reasonable time. Although there was a specific provision in the event of an IPO the Plaintiff’s participation was in the value of the shares in the Fund whether or not the listing took place.
He then advances three other unrelated submissions.
First, that the Recorder’s version of the agreement was inconsistent with her rejection of the Plaintiff’s evidence that the Defendant had guaranteed to buy back the shares in the absence of a listing.
Secondly, she omitted to consider evidence that the agreement was framed in the way contended for by the Defendant so as to avoid a six month “lock up” of the shares after the IPO.
Thirdly, she failed to take sufficient account of the Plaintiff’s inconsistent conduct after the agreement. In this he relies upon the following:
I have referred to the submissions in unusual detail. It is now necessary to examine whether Mr Jat is able to demonstrate that the Recorder’s delay led to an unsafe judgment.
THE LETTERS OF 4TH & 17TH JANUARY 1997
It is clear from the structure of the judgment that far from overlooking the letter of 4 February, the Recorder’s focus when considering the terms of the agreement was firmly on the meeting of 3 February 1997 and the two letters recording its salient terms. She had the letter of 4 February well in mind. In paragraph 43 of her judgment she evaluates the evidence of both the Plaintiff and the Defendant concluding that neither really understood the letter.
I accept though that the plaintiff may well have misunderstood what the defendant was offering since even when the plaintiff saw the letter of 4 February 1997, he was not able to fully understand it. Even more significantly, when in cross-examination, the defendant was asked to explain how the formula in the 1st numbered paragraph of the letter worked, all he could do was to reiterate that it was very simple. This lead to a farcical re-examination when counsel for the defendant took him arithmetical step by arithmetical step through a calculation which was dictated to him by counsel.
In all probabilities, the formula was unworkable which may have been one of the reasons why the formula was much simplified in the letter of 17 February 1997. So during the conversation, the plaintiff may well have misunderstood that the defendant was to allocate GBRE shares to him upon listing.
She returns to the letters in paragraph 49 when assessing the Plaintiff’s case:
Even though these letters contain different terms and the latter supersedes the former, in neither letter does the defendant promise or agree or have the option to deliver GBRE shares to the plaintiff. In both letters, what the defendant undertakes is to pay a sum of money to the plaintiff within one month after the listing of the holding company of GBRE calculated according to different formulae which enabled the plaintiff to benefit from any upside in the market price of the shares of the listed company. The plaintiff signed and accepted the terms in each letter.
Again she refers to the two letters in paragraph 50 when evaluating the Plaintiff’s plea that the Defendant agreed to refund the money if the company was not listed by the end of July 1997. Her conclusion is in paragraph 52:
Whatever may have been the position as at 4 February 1997 after the plaintiff had signed and accepted its terms, this letter and the terms contained in it were superseded by the letter of 17 February 1997 which related to the plaintiff’s investment of HK $30 million.
These passages demonstrate conclusively that there is no merit in the suggestion that the letter of 4 February 1997 was overlooked or not given weight.
Whether or not there had been any further discussion on the terms of the agreement other than the total sum between 4 and 17 February seems unlikely but it is immaterial. The letter of 17 February plainly states at the outset that it supersedes the earlier letter. Consistently it specified different terms which were more simple and more practical. Both parties signed.
It is worth mentioning that the Defendant begins a number of his letters with “As discussed …” or similar without concern to its accuracy. See his letters of 29 May 1998 and 15 July 1998 to which I will return.
This leaves the unchallenged yet inconsistent receipt for the $30 million on 18 February 1997. Although Mr Jat did not invite our attention to the passage, the Plaintiff was cross-examined upon the terms of this receipt (18 March 2002 T1 299 B-M). He accepted that he had received the receipt and by implication had not challenged it. He said his attention was merely drawn to the $30 million and he thought the receipt referred to GBRE. We have not been invited to consider any other relevant passages of the transcript and I am not aware of any reference to it in the Defendant’s closing skeleton.
It seems therefore that little was made of this at trial and nothing more can be made of it now. The receipt is inconsistent with the agreement found and the letter of 17 February. The clear terms of the letter cannot be varied by the later receipt. No valid criticism of the judgment can be advanced that the Recorder ought to have considered it in her finding. Rightly it was not thought to be significant.
THE IMPLIED TERM
In consequence, Mr Jat’s submission that the Recorder was wrong to imply a term in the agreement that listing would take place within a reasonable time fails. Listing was the essential basis of the agreement. The whole bargain depended upon it so the implied term was necessary to give it commercial effect. Alternatively, in the absence of listing there was total failure of consideration which led to the same result.
FINDINGS ON THE “BUY BACK GUARANTEE”
Nor is Mr Jat able to make good his submissions that the Recorder made inconsistent findings on the “Buy Back Guarantee”. It is necessary to return to the judgment. The Recorder deals with this in paragraph 47.
The defendant admits that there was discussion between himself and the plaintiff as to what would happen if there were no listing but his evidence is that he told the plaintiff there were a number of possibilities as exit strategies from the investment. I do not accept the latter part of his evidence. However, while I accept that the defendant in all probability did say that the plaintiff would get his money back if there were no listing, I do not accept that the defendant made an express contractual promise that the plaintiff would get his money back if the listing had not taken place by the end of July.
She returns to consider the effect of a failure to list in some detail in paragraphs 54, 55 and 56. I quote the relevant parts:
.... thus, unlike an investment involving a purchase of GBRE shares or Fund shares which may have been made in the expectation of a listing but is nonetheless a complete transaction in itself, the agreement entered into between the plaintiff and the defendant is premised on the occurrence of a listing because only upon a listing could it be determined what the plaintiff was to receive in return for the money which he had paid. If there is no listing, there must be a total failure of consideration on the part of the defendant as the plaintiff will have parted with his money for nothing. The plaintiff is not wagering on there being a listing.
.... moreover, the agreements were entered into against the background of an extant application for listing on the Exchange which at the time of the discussions between the plaintiff and the defendant were running smoothly and according to the expected timetable.
The agreements are only workable if there is implied into them a term that the listing will take place within a reasonable time. The agreements rested upon the basis of there being a listing of ‘Listco’ without which the amount due to the plaintiff could not be calculated. Thus, if there was no listing, the defendant would be bound to repay the plaintiff the full amount of his investment. However, without an express contractual date by which the listing should have occurred, the agreements would be unworkable and there must be an implied term that the listing would take place within a reasonable time of the making of the agreements.
She later held that the reasonable time expired at the end of 1997. Far from demonstrating an inconsistent approach to these matters, these passages show the care with which the Recorder analysed and reasoned her findings on these issues and reached her consistent conclusion.
THE SIX MONTHS LOCK-UP
Part of the Defendant’s case at trial was that the Plaintiff was reluctant to invest directly in the Fund because the GBRE shares held by it could not be put on the market within six months of any listing. This was the ‘lock up period’. The Defendant said that this made his version of the agreement more likely but once the Recorder’s view of the effect of the letter of 17 February is recognized to be unassailable the relevance of the six-month lock up period becomes irrelevant. In any event in cross-examination the Plaintiff denied that there had been any discussion about the lock up period.
Put shortly, there was no good reason for the Recorder to make any further findings on the point.
THE PLAINTIFF'S LATER CONDUCT
The Defendant equally fails to demonstrate that the Recorder’s failure to find in his favour was in any way a consequence of her failure to appreciate the significance of the Plaintiff’s conduct after 17 February 1997. She may not have reached the conclusions hoped for by the Defendant but the conclusions she reached were open to her and were appropriately reasoned.
She examined the Plaintiff’s request for an allotment of $25 million worth of GBRE shares at the IPO stage in paragraph 49 concluding:
If the agreement already made had been for the allotment of GBRE shares, the Plaintiff would more likely have been requesting an allotment of a further Hong Kong $25 million worth of GBRE shares in addition to that already agreed. The request made by the Plaintiff is more consistent with there having been no such agreement prior to his request for allotment of GBRE shares at the IPO stage.
On 21 April 1997 the Stock Exchange rejected a revised proposal for GBRE to be listed with reasons. The terms in which the Stock Exchange refused the listing are relevant. They are:
The Committee decided to reject the revised proposal (“Proposal”) for the following reasons:-
Even if this did not put an end to the proposal, it was a serious setback from which GBRE never recovered. The Defendant did not inform the Plaintiff of the true position. On this in paragraph 61 the Recorder commented:
I accept that it is inconceivable that the plaintiff would have bought HK $25 million worth of GBRE shares on top of the HK $50 million which he had already invested on the basis of a GBRE listing if the Defendant had told him of the true position.
To conclude the point, the Recorder dealt with the Defendant’s later repurchase of the shares in paragraph 62:
Ultimately, the first amount which the defendant refunded to the plaintiff when a listing did not materialise in July 1997 was the purchase price of these shares. While the defendant sought to portray it as an act of goodwill on his part without any legal obligation, as a lawyer, the defendant must have known that he faced a grave risk of being sued for misrepresentation.
THE LETTERS OF 29 MAY AND 15 JULY 1998
Both letters are in similar terms, so it is necessary only to set out that of 29 May 1998.
As discussed, I shall pay you HK$10,000,000 by the enclosed cheque no.142865 on the following basis:
Please confirm your acceptance of the above and receipt of the said cheque of HK$10,000,000 by signing and returning a copy of this letter to me.
It is surprising that the Defendant wishes to remind the Court of these letters but he relies upon them as being inconsistent with the implied term. Indeed the text is inconsistent with the reasonable time for listing having expired by the end of 1997 for the letters seek to breathe life into a continued prospect of a listing and an IPO in May1998 and later. The Recorder expressed her view of the letters in paragraph 74 against the background that the prospects of a listing had faltered if not worse on 21 April 1997 and a Bloomberg Release of 18 May 1998 reporting that the Defendant and Gao Jiarem, the two partners in GBRE, were locked in a legal battle that threatened its future. She said:
These letters demonstrate the deviousness of the Defendant’s character. Both letters commence with the words ‘As discussed, I shall pay you HK$(…) by the enclosed cheque number (…) on the following basis:” Yet, as the Defendant and the Plaintiff both say, there was no further contact of any kind between the Plaintiff and the Defendant, after the Defendant had telephoned the Plaintiff to complain that his threats had upset the defendant’s secretary. This had all taken place before the plaintiff let the handwritten note on the Bloomberg releases. Thus, there was no discussion of any kind between the plaintiff and the defendant as to any continuing investment on the same terms as before. The defendant had told the plaintiff he would not deal with him again and all dealings would be with Clement Loong Ping Kwan. The statement at the beginning of the letters was thus plainly untrue, known to the defendant to be untrue, and completely inconsistent with a note which the plaintiff left on the Bloomberg release on 29 May 1998. Yet, the defendant seeks to rely on them as agreements binding on the plaintiff for the continued investment of HK$32 million. I find that there were no such agreements between the plaintiff and the defendant and that the plaintiff signed to acknowledge receipt of the cheques. The plaintiff did not agree to wait any further for a listing of the GBRE shares.
These strictures are entirely justified and Counsel has not demonstrated otherwise.
THE FIRST LETTER OF DEMAND 6 MAY 1999
Through Mr Jat the Defendant contends that the Recorder ought to have given weight to the Plaintiff’s failure in his first Letter of Demand on 6 May 1999 to make any reference to the breach of an implied term on listing. It suffices to say that there is no substance in this point either. The Recorder had the letter well in mind and she accurately described it in paragraph 50 of the judgment when considering the Plaintiff’s case that the agreement included an undertaking to return his investment if the listing did not take place by the end of July 1997. Although she does not make the point preferred by Counsel, she demonstrates an impressive grasp of the detail:
Even when the plaintiff’s solicitors first wrote to the defendant on the plaintiff’s behalf on 6 May 1999 demanding repayment of the balance of HK $32 million, the plaintiff’s case, stated to be on the basis of instructions, was that prior to the plaintiff advancing HK $50 million, the defendant represented to the plaintiff that the listing of the holding company of GBRE would be completed by about July 1997 and that the anticipated listing failed to materialise by July 1997. It was not until the letter of 8 July 1999 that the case now pleaded by the plaintiff was set out in his solicitors’ letter for the first time.
THE PLEADING POINT
There remains the pleadings issue. In the absence of either the Plaintiff or the Defendant specifically pleading the terms of the agreement found by the Recorder was she entitled to give judgment for the Plaintiff?
Categorising it as the ‘Unpleaded Agreement’ Mr Jat submits not. He says the agreement found was a radical departure from the pleadings and the Defendant had no full opportunity to meet the case against him. In consequence his client had an unfair trial.
He supports his proposition with authority. In particular the judgment of this court in Poon Hau Kei v Hsin Chong Construction Co Ltd (2004) 7 HKCFAR 148 at 156-157 reversing the decision of the C.A. but approving the principle in Ma JA’s judgment below  2 HKLRD 56 at 68 B-G:
In circumstances where the version of events as pleaded or advanced by a party is found not to be accurate or true, and another version is held to represent the true position, a court must be careful when asked to make a finding of liability (or some other legal consequence) based on this other version. Before attempting to do so, the court must first be satisfied that the issue has been properly put before it and identified so that the other party becomes fully aware of the case he has to meet. This is usually done by the matter being made clear in the pleadings. Next, the court must also be satisfied that the “new version” is one that the other party has been given a full opportunity to deal with. Both elements must exist before a court can then proceed to make a finding of liability, or some other legal consequence based on the “new version”. There may, of course, be other considerations as well, but these two are usually the most important.
In dealing with the situation I have just identified (which is the position in the present case), the court may ask itself questions such as :
Mr Jat then invites our attention to Rhesa Shipping v Edmunds (H.L.(E))  1 W.L.R. 948 at 951 for the basic, proposition that the burden rests on the plaintiff and even where the Defendant advances a positive case on the pleadings no burden rests upon him.
Also he cites Soar v National Coal Board  1 W.L.R. 886, Waghorn v George Wimpey & Co Ltd  1 W.L.R. 1764 and Glenys Newman v Whitbread Plc (Unreported) 26 Feb.2001 C of A. These latter are all personal injury cases in which the Plaintiff failed on his pleaded case but advanced an alternative version at trial not pleaded by the defendant. In each the defendant either had not the opportunity of pleading a Statutory defence (Soar’s case) or had not the opportunity of preparing differently or had not the opportunity of calling expert evidence. Each failed either at first instance or on Appeal.
THE GENERAL APPROACH TO THE PLEADING ISSUE
Poon’s case in the Court of Appeal sets out the practical tests and the principle that the trial must be fair. A party must not be ambushed at trial by a case he has not been called upon to prepare and meet. As was said by Bokhary PJ in the same case in this court at page 160 J:
Was there any unfairness in the process by which the trial judge reached his findings? In Bank of America National Trusts and Savings Association v. Chai Yen  1 WLR 350 at p.353D, Lord Lane, delivering the advice of the Privy Council, said that “the essence of any rule of procedure must be fairness”. The same is true of any rule of practice.
However, industrial accident cases often raise the pleading point more clearly than others. If the accident is not shown to have taken place in the way or at the place alleged usually the plaintiff must fail. The defendant has pleaded and prepared his case to meet the case alleged and no other.
On the other hand, in such cases it is not unusual for a defendant to plead an alternative version of the accident knowing that at least partial liability may result. A plaintiff may then succeed on the defendant’s pleaded case if it is accepted by the judge. If wise he may amend to plead the defendant’s version as an alternative. But in any event, the defendant cannot suggest he is taken by surprise, nor that he is unprepared, nor that the trial is unfair if his pleaded version is accepted.
In contract cases such as this one, where there is a dispute about the terms agreed the situation may be less clear cut. The parties advance their pleaded cases with all the surrounding relevant facts leading up to the agreement and following it. Taking all into account the judge decides what the parties agreed as a question of mixed fact and law. These may not be precisely those advanced by either party.
Unless the judge moves outside the evidence and makes findings unwarranted by the oral dealings between the parties or the contemporaneous documents this normally is not unfair on either party but an attempt to do justice between them according to law. As in this case, parties frequently seek the assistance of the court to construe a disputed contract as a question of law once the facts are established.
Indeed, in the absence of some exceptional circumstance no person who has concluded a contract can be said to have been taken by surprise by the terms he has agreed. This is so whether or not he or the other party has precisely pleaded those terms in a dispute about them.
This said, if an appellant complains of unfairness the burden is upon him to demonstrate it.
DID THE DEFENDANT HAVE AN UNFAIR TRIAL?
It is an understatement to say that the facts surrounding the payment of the $50 M by the Plaintiff were investigated in depth at trial. Every relevant or marginally relevant document was produced. The whole history of the relationship and dealings between the parties in this transaction and others was investigated. The Plaintiff’s complete investment history seems to have been the subject of cross examination.
Consequently the Defendant was in the witness box for no less than 12 days of which his re-examination occupied more than 100 pages of transcript. The Plaintiff was in the witness box for over 5 days. The focus of the trial was upon the nature of the ‘investment’ agreement and the terms (if any) about any failure to obtain a listing. Both parties were aware of the importance of the oral agreement made at the meeting of the 3 February 1997 and the following two letters.
The defendant is aggrieved by the Recorder’s finding and says that he had no opportunity to meet the findings the Recorder made concerning the meeting he attended and the letters he wrote. But, I am unable to accept that he did not put forward everything he could, and everything he wished, to put forward.
He says that had he known that he had to meet the findings he would have called other investors in the fund to explain how this avoided the 6-month lock-up period. But such evidence would not have assisted him. The explanation was before the court, was irrelevant on the findings and the Plaintiff denied it was ever discussed.
Further he says he would have called witnesses who wrote the two letters to further explain them and to give evidence about similar investments in which the Plaintiff was involved. These matters were already in evidence. If the Defendant had thought these witnesses could assist him it was open to him to call them.
Other points were made on the evidence. These I have considered and already rejected.
Relevant also to this issue is the shifting nature of the Defendant’s pleaded case. For example, at one stage the defendant’s amended pleading alleged:
THE DEFENDANT LATER REMOVED THIS PASSAGE BY AMENDMENT IN 2000
I echo the view of Rogers VP in the Court of Appeal at Paragraphs 30 and 31:
In my view having read large parts of the transcript it is quite clear that there was a great deal of focus, particularly in the defendant’s evidence, as to the nature of the agreement which had been reached. I do not consider that many of the matters which the defendant now avers should be taken into account, such as the defendant’s dealings with other persons who also invested either in GBRE or the Fund or in relation to other investments such as the real property investments in Beijing, would assist the defendant. In my view, the judge was correct. The agreement between the plaintiff and the defendant was effectively reduced to writing and that writing is clear. There was no direct investment either in GBRE shares or in Fund shares. The contract was simply that the defendant would pay the plaintiff a sum to be calculated in proportion to the amount which plaintiff invested and the eventual price of the GBRE shares, or the listed company shares if that were different, at the time of the IPO.
In this respect sight cannot be lost of the ever changing nature of the defendant’s case as to what he considered was the nature of the agreement.
First, on the ‘pleadings issue’ I am not persuaded that the Recorder’s findings were a radical departure from the pleaded cases. On the central issue about the absence of a listing the Plaintiff alleged a warranty that the listing would take place by the end of July 1997. His evidence was vague and the Recorder found an implied term that listing would take place within a reasonable time expiring at the end of 1997. Hardly a radical departure.
On the other main issue concerning the agreed basis of the investment, both parties contended that the investment was linked to the price of GBRE shares with a view to an IPO. The defendant said it was linked to the fund of which the only asset was GBRE shares. The Recorder found that the investment was a money transaction only but linked directly to the price of GBRE shares. Again not a radical departure.
Nevertheless, it is still necessary to consider whether the defendant has demonstrated that he did not have a fair trial.
For the reasons outlined already he has completely failed to satisfy this burden. The issues about the agreement were investigated. It was for the Recorder to decide these issues of mixed law and fact. The defendant had every opportunity to advance such case as he chose and nothing he has put forward persuades me otherwise. The findings were based on a letter written by him and oral negotiations which he undertook. In spite of the absence of the specific pleading there is nothing demonstrated that could have taken him by surprise or which led to any injustice to him.
Because of the delay, I have felt obliged to set out the Defendant’s submissions on the evidence in more detail than in the result they merited.
Having done so I am satisfied, as was the Court of Appeal, that the Recorder had a remarkable recollection and grasp of the evidence, the two witnesses, the documents, the issues and indeed the trial itself. Nothing has been demonstrated to indicate that the judgment is other than sound, safe and correct. Indeed, in spite of the inordinate delay this is an excellent, careful and fully reasoned judgment.
For these reasons the appeal was dismissed and the Plaintiff was awarded his costs.
THE TIMELY DELIVERY OF JUDGMENTS
Before leaving this appeal it is necessary to refer again to the importance of the delivery of judgments in a timely fashion.
As the Chief Justice and 3 other members of this court said in Yeung May Wan v HKSAR (2005) 8 HKCFAR 137 at 178J – 179C:
However, it must be clearly and firmly reiterated that judges at all levels of court have a duty to give judgments within a reasonable time after the conclusion of the hearing. This is important not only for ensuring that justice is done to the parties but also for the maintenance of public confidence in the Judiciary and the judicial system.
An interval of over 14 months between the conclusion of the hearing and the delivery of judgment in a criminal appeal is most exceptional. Irrespective of whether art.11(2)(c) was breached in this case, a question on which it is unnecessary to express any view, even taking into account the complexity of the issues involved and the fact that the appellants were not in custody, we think that delay of this order is unacceptable and should not occur again.
There are administrative arrangements to ensure that judges do not overlook cases which they have tried. They should not therefore increase the inherent delay in litigation beyond that which is necessary or reasonable.
The length of time taken for delivery of decisions is an objective standard by which any Judiciary is viewed internally and externally. It is worth noting that the delay in the present case is without precedent. In spite of the increasing pressure of work to which judges are subject, it must be emphasised yet again that judgment should be delivered within a reasonable time, Judges bare a responsibility to ensure that there is no undue delay in delivery judgment.
Lord Scott of Foscote NPJ
I agree with the judgments of the other members to the Court.
Justice Bokhary PJ
As announced at the conclusion of the hearing, the appeal is dismissed with costs.
Cobham v Frett (PC)  1WLR 1775
Goose v Wilson Sandford & Co The Times, 19 February 1998; Court of Appeal (Civil Division) Transcript No 196 of 1998
Gardiner Fire Ltd v Jones The Times, 22 October 1998; Court of Appeal (Civil Division) Transcript No 1638 of 1998
Times Newspapers Ltd v Singh and Choudry (unreported) 17 December 1999; Court of Appeal (Civil Division) Transcript No 2156 of 1999
Rhesa Shipping v Edmunds (H.L.(E))  1 W.L.R. 948
Soar v National Coal Board  1 W.L.R. 886
Waghorn v George Wimpey & Co Ltd  1 W.L.R. 1764
Glenys Newman v Whitbread Plc (Unreported) 26 Feb.2001 CA
Bank of America National Trusts and Savings Association v. Chai Yen  1 WLR 350
Mr S.T. Jat SC and Mr Mike Lui (instructed by Messrs Allen & Overy) for the appellant
Ms Lisa K.Y. Wong SC and Mr Kenneth W.H. Ng (instructed by Messrs Ng & Partners) for the respondent
all rights reserved