This judgment is now reported in [2019] 4 HKLRD 135.

On 5 August 2019, the Court of Appeal allowed the appeal in Ngan Pui Chi & Anor v Bao Quan [2019] HKCA 852, reversing Deputy High Court Judge Cooney SC’s critical finding that certain shares had been transferred by means of transfer documents which contained forged signatures.

The Court of Appeal held that the Judge fell into error when he held that the onus was on the defendant to establish the genuineness of the transfers.  In so doing, the Judge actually required the defendant to disprove the allegations of forgery put forward by the plaintiffs in respect of the signatures on the transfer documents.

Having regard to leading authorities on fraud and forgery in civil claims, the Court of Appeal clarified the proper approach to the burden of proof in those cases.  Where a share transfer had been registered, the defendant need not prove anything to establish her legal title in the shares, and the Court of Appeal held that the burden falls squarely on the plaintiffs to prove that such apparent transfer of the title was invalid.

In the present case, the Court of Appeal held that the plaintiffs had not discharged their burden of proof with respect to the issue of forgery.  Citing the cases of Nina Kung v Wong Din Shin (2005) 8 HKCFAR 387 and Ming Shiu Chung v Ming Shiu Sum (2006) 9 HKCFAR 334, it was held that “[i]nferences of fraud or forgery cannot be reached by conjecture, and without a reasonable foundation for an inference to be drawn, one cannot elevate the rejection of the defence’s evidence or the defence’s case or failure to dispel suspicious circumstances as proof of such serious allegations”.

Paul Lam SC leading Benjamin Lam appeared for the appellant.

The full judgment is available here.