Mr Justice Tang PJ (Judgment of the Court): 1. These proceedings are about the beneficial ownership of 200 million shares in Mayer Holdings Ltd, a listed company in Hong Kong (“Mayer HK”). The shares were represented by two share certificates, No 70 and 71, each for 100 million shares registered in the name of Mayer Corporation Development International Ltd (“Mayer BVI”). The share certificates together with instruments of transfer signed in blank were held by Alliance Financial Intelligence Ltd (“AFIL”) under a Custodian Agreement dated 19 June 2009 (“the Custodian Agreement) signed by Alex Ku, its managing director, and on behalf of Mayer BVI by Mr Lai Yueh Hsing, its sole director. 2. The rival claimants were Mayer BVI (the appellants), and Aspial Investment Ltd (“Aspial”) and Bumper East Ltd (“Bumper”)(who were two of the respondents before us). After a 4 day trial, Reyes J decided in favour of Aspial and Bumper. His decision was upheld by the Court of Appeal after a 3 day hearing. Despite the concurrent findings, Mayer BVI was able to appeal to us because the value of these shares exceeded $1 million, accordingly, it was entitled to appeal as of right under s 22(1)(a) of the Hong Kong Court of Final Appeal Ordinance.[1] 3. It is our settled practice not to review concurrent findings of fact save in rare and exceptional circumstances. Nor would we embark on such a review, unless we were persuaded that it would be purposeful to do so.[2] We heard arguments on whether it would be purposeful to embark on such a review and decided that there was no reason to permit such a review. Accordingly, we dismissed the appeal with reasons to be handed down later. These are our reasons. 4. The background facts are complicated and were set out in some detail in the judgments below.[3] We will be deal with them as briefly as possible. 5. Aspial and Bumper were the plaintiffs in HCA 238/2012 and Mayer BVI the defendant. Aspial and Bumper’s case was that they purchased the shares from Capital Wealth Finance Company Ltd (“Capital Wealth”), of which Mr Lam Chin Chun (“Lam”) was the CEO. Capital Wealth was authorised to sell these shares by Mayer BVI. 6. Mayer BVI was the plaintiff in HCCL 3/2012[4] against AFIL, Charles Chan Wai Dune[5] (“Charles Chan”), Lam, Bumper and Aspial[6], alleging that AFIL was guilty of a breach of its fiduciary duties owed to Mayer BVI in respect of the certificates which Mayer BVI had deposited with AFIL under the Custodian Agreement, that Charles Chan and Lam dishonestly assisted AFIL in its breaches of fiduciary duty, and that Aspial and Bumper received the share certificates with notice of AFIL’s breaches of fiduciary duty. According to Lai, the share certificates were deposited with AFIL for one year to take advantage of market movements, but no sale should be made without written authorization from Mayer BVI. 7. According to Lam, he on behalf of Capital Wealth made an oral agreement with Lai who was acting for himself as well as on behalf of Mayer BVI to sell within one year of 19 June 2009, 100 million[7] and 300 million shares respectively in Mayer HK for $100 million, and that Capital Wealth was entitled to keep any excess over $100 million as its profit. Under that agreement Mayer BVI would deposit 200 million shares with AFIL for one year and Capital Wealth would deposit $50 million with AFIL. The deposit of the 200 million shares was evidenced by the Custodian Agreement. The deposit of the $50 million was evidenced by a letter dated 3 June 2009 signed by Ku on behalf of AFIL, addressed to Capital Wealth acknowledging receipt of $50 million “being 承諾金 (in translation ‘promise money’) to be paid to [Mayer BVI] and/or its representative.” Although Capital Wealth’s payment of $50 million to AFIL on 3 June 2009 was not disputed, the authenticity of the letter of 3 June 2009 was very much so, evidently because it described the $50 million as “(promise money) to be paid to (Mayer BVI) …” The authenticity of the Custodian Agreement was common ground as well as the fact that Mayer BVI had procured the issue of the 2 certificates so that they could be deposited with AFIL. 8. Capital Wealth’s case was that $100 million had been paid. As to $55 million[8] upon Lam selling 100 million shares in the market, this sale was common ground and payment admitted. Capital Wealth’s case was that after the sale of 100 million shares and payment of $55 million, there was a further oral agreement made on 24 June 2009[9] between Lam and Lai (the 2nd oral agreement) because “Mayer BVI and Lai were in need of funds”[10] under which Lai/Mayer BVI would be paid the balance of the $45 million, and the 200 million shares held by AFIL would be released to Capital Wealth to sell as it saw fit without any time limit. The shares were in due course sold to Aspial and Bumper. 9. According to Lam, as a result of the 2nd oral agreement Capital Wealth authorized AFIL to pay $45 million to Mayer BVI out of the $50 million promise money paid to AFIL by Capital Wealth. However, only $42.5 million was paid because AFIL was entitled to a fee of $2.5 million being 2.5% of $100 million. The promise money of $50 million was disposed of as follows: $42.5 million to Mayer BVI, $5 million returned to Capital Wealth and $2.5 million retained by AFIL. The disposition of the $50 million was not disputed butMayer BVI’s case was that the payment of $42.5 million had nothing to do with Mayer BVI nor was Lai involved with such payment. According to Lai, in March 2009, his long term friend, a Mr Wang Ing Jye (“Wang”) of Taiwan, was approached by 7 Taiwanese investors who together owned 99 million Mayer HK shares to help them sell their shares in Hong Kong. But because Wang did not know any stock broker in Hong Kong, Lai’s personal assistant, Flora Kao (“Kao”), who also worked for Wang part time, recommended Charles Chan to Wang whom Wang said he met in March 2009. 10. This is what Reyes J said of Wang’s evidence: “ 57. … Charles Chan had (Wang says) responded that it would not be difficult to fetch at least $1 per share, but to do so might take time. 58. Charles Chan is thus said to have suggested to Wang in March 2009 that Wang deposit the shares with CCIF for 1 year. In return, Charles Chan would arrange an initial deposit of $42.5 million to be paid to Wang or other nominees of the investors owning the 99 million shares. 59. When the 99 million shares were handed over on 19 June 2009, Ku is said to have produced another Custodian Agreement…” 11. Wang’s evidence was that it was pursuant to this agreement that on 24 June 2009 $42.5 million[11] were paid by AFIL to persons whose names appeared on a list produced by Kao, acting on his behalf. On the other hand, Ku produced a copy of a letter dated 24 June 2009 from AFIL signed by him and addressed to Mayer BVI which stated: “as instructed by your company’s representative, Ms Flora Kao, we have distributed (Promise Money) of HK$50,000,000 received from (Capital Wealth) in accordance with the endorsed payment schedule presented by her.” Ku’s evidence was that the original was given to Kao, which Kao denied. 12. Both Charles Chan and Ku denied ever having met Wang. Ku also denied that he had signed the Custodian Agreement covering 99 million shares produced by Wang at trial. 13. Charles Chan’s evidence, accepted by Reyes J, was that he was approached by Lai on 24 June 2009 about the payment out from the promise money. To cut a long story short, later on the same day, both Lam and Lai confirmed to him the content of the 2nd oral agreement. Charles Chan also spoke to Ku about the release of the promise money and Ku told him that he saw no problem. 14. Reyes J gave detailed reasons why he rejected Wang’s evidence as unreliable. Reyes J preferred the evidence of Lam, Charles Chan and Ku. The judge said: “164. [Kao and Wang’s] explanation [on how they dealt with the $42.5 million] is incredible. ...... 167. For those reasons, Wang’s evidence must be rejected as unreliable. ...... 169. … In light of my assessment of Wang’s evidence, I cannot regard that [the disputed Custodian] Agreement as authentic.” 15. At paras 170 and 171, Reyes said he accepted Ku’s evidence and rejected the disputed Custodian Agreement as unreliable. He went on to say at para 171: “On the balance of probability, the document is a fake.” 16. Mr Benjamin Yu SC, for Mayer BVI, submitted that Reyes J should not have found the disputed Custodian Agreement to be a fake on a balance of probabilities. He said the judge had overlooked Re H[12]. Mr Yu said that was why we should review the concurrent findings. In support, Mr Yu also pointed to Re D [2008] 1 WLR 1499 and said Reyes J should have subjected the question of the authenticity of the disputed Custodial Agreement to a “heightened examination” but as Lord Carswell went on to explain in Re D the seriousness of the allegation to be proved “[does] not require a different standard of proof or a specially cogent standard of evidence, merely appropriately careful consideration by the tribunal before it is satisfied of the matter which has to be established.” 17. Neither Re H nor Re D assisted Mr Yu. The burden was on Capital Wealth to prove the 1st and 2nd oral agreements[13], on a balance of probabilities. Insofar as Mayer BVI relied on the alleged 99 million shares agreement, it also had to establish it on a balance of probabilities. The fact that, in the process, Wang produced a document the authenticity of which was disputed made no difference.[14] The burden was on Mayer BVI to prove that the document was authentic, again, on a balance of probabilities. That Mayer BVI failed to do. The judge accepted the evidence of Ku who denied having signed the disputed Custodial Agreement. Reyes J accepted the evidence of Charles Chan on the events of 24 June 2009 which were irreconcilable with the existence of a separate agreement with Wang. Moreover, he regarded the evidence of Wang as unreliable and incredible. After a careful examination of the totality of the evidence, Reyes J was satisfied that both the 1st and 2nd agreements were made. The learned judge’s decision was affirmed by the Court of Appeal, where Barma JA said, with the agreement of the other members of the Court: “57. In my view, none of the criticisms directed at the judgment could justify this court in overturning the judge’s factual findings and the conclusions which he reached. On the contrary, for the reasons explained by the judge, there was ample evidence on the basis of which he was justified in making those findings and disposing of these proceedings as he did. The appeal must therefore be dismissed.” 18. The Re H argument is totally unmeritorious, and raised for the first time by Mr Yu before us. It focused on an isolated part of the case and an isolated part of the judgment of Reyes J without any regard of the wider, and more crucial, issues dealt with by the judge. This is as strong a case on unassailable concurrent findings as one could imagine. 19. The second basis upon which Mr Yu submitted we should review the concurrent findings was the allegation that Lai did not have authority to commit Mayer BVI to the oral agreements. This occupied 20 pages of Mr Yu’s written case. Many of the submissions are poorly disguised submissions on why Reyes J was wrong to have found in favour of the 2nd oral agreements. What are left can be disposed of shortly. 20. First, that Lai had no actual, ostensible or apparent authority to bind Mayer BVI to the oral agreements. Lai’s lack of authority was not pleaded. Nor was it an issue at trial. 21. Then, that the 2nd oral agreement, as pleaded, showed that it was made by Lai in breach of his fiduciary duty to Mayer BVI. Mr Yu submitted that it mattered not that neither Lai’s breach nor Lam’s knowledge of such breach was unpleaded. He relied on Lysaght Bros & Co Ltd v Falk (1905) 2 CLR 421. In Lysaght, the plaintiff sued the defendant in the Supreme Court of New South Wales on a contract made with the defendants’ agent. The issue was whether under a plea of non-assumpsit, the principal might give evidence of all circumstances tending to show that the agent, in making the contract, was acting without authority, to the knowledge of the plaintiff, even though that evidence might also show that there was fraudulent collision between the plaintiff and the agent in making the contract. The principal was not allowed to adduce such evidence because the Supreme Court took the view that, under the pre-judicature pleading rules as they then applied in New South Wales, a specific or “special” plea of fraud was required in order to raise that issue. For reasons irrelevant to this appeal, the plaintiff’s applications for leave to amend were unsuccessful. The plaintiff’s appeal to the High Court of Australia was successful and a new trial was ordered. 22. Lysaght was concerned “with a specific rule of pleading” per Griffith CJ at 434 and as Barton J explained at 436 “whether the evidence was not admissible under the plea of non-assumpsit”, and does not help Mr Yu. Time has moved on, our current rule, O18 r8 (1) requires a party to “plead specifically any matter, … (a) which he alleges makes any claim or defence of the opposite party not maintainable; or (b) which, if not pleaded, might take the opposite party by surprise”. The role of pleadings post the Civil Justice Reform has been highlighted by this Court on a number of occasions.[15] 23. We do not agree that a defence based on self dealing by an agent with someone who has knowledge (constructive or actual) of it, need not be pleaded. Moreover, pleaded or not, it was not raised as an issue at trial. So anyway Lysaght cannot help Mr Yu. 24. Mr Yu also submitted that neither Flywin[16] nor lack of pleading mattered[17] because Mayer BVI had an unanswerable case. This is an impossible argument. The issues are fact sensitive. 25. For these reasons, the appeal was dismissed. Costs 26. We make an order nisi against the appellant, such costs to be paid on an indemnity basis. It may assist if we indicate, on a provisional basis, why we consider costs on an indemnity basis appropriate. The appeal was brought as of right because the value of the shares exceeded $1 million. It was plainly hopeless. Had leave been required, it would have been refused. This appeal represents yet again the worst excesses caused by the as of right route of appeal under s 22(1)(a) of the Hong Kong Court of Final Appeal Ordinance. This Court has in the past commented on the anachronistic nature of this provision and the need for its repeal.[18] The present appeal was set down for 2 days. The parties’ written cases amounted in total to over 170 pages. The authorities numbered 75. Ten counsel were briefed on appeal. The following passage from the judgment of the Chief Justice in Kwok Chin Wing v 21 Holdings Limited is apt: “Cases such as the present appeal are inherently wasteful of resources which the Courts have in limited supply. Following the Civil Justice Reform introduced in 2009, this kind of wastage ought no longer be tolerated by the public. It is unfair to the successful parties in a litigation, it is unfair on other litigants who have deserving cases before the Courts and it is ultimately unfair to the community.” 27. If any party wishes to have a different order for costs, written submissions should be served on the other party or parties and lodged with the Registrar of the Court within 14 days of the handing down of this judgment, with liberty on the other party or parties to lodge written submissions within 14 days thereafter. In the absence of such written submission, the order nisi will stand absolute at the expiry of the time limited for these submissions. Mr Benjamin Yu SC, Mr Bernard Man & Mr Justin Ho, instructed by K & L Gates, for the defendant in HCA 238/2012 and the plaintiff in HCCL 3/2012 / appellant Mr Simon Chiu & Mr Timothy Wong, instructed by Hastings & Co, for the 1st & 2nddefendants in HCCL 3/2012 / 1st & 2ndrespondents Mr Edward Chan SC & Mr Law Man Chung, instructed by Fred Kan & Co, for the 3rddefendant in HCCL 3/2012 / 3rdrespondent Mr John Litton, Mr Fredrick H F Chan & Mr Eric Chow, instructed by Samuel LC Yang & Co, for the 1st & 2ndplaintiffs in HCA 238/2012 and the 4th & 5thdefendants in HCCL 3/2012 / 4th & 5threspondents [1] Cap 484. [2] Z v X v C,FACV No 11, 12/2013 (unreported, dated 23 May 2014). [3] In paras 22-24, Barma JA set out the respective cases of the parties. He said at para 21 that the parties’ respective cases on the beneficial ownership of the 200 million shares “were irreconcilably different.” According to Reyes J: “8. … The accounts are contradictory and cannot be reconciled.” [4] HCA 238/2012 and HCCL 3/2012 were consolidated by Reyes J by order dated 22 March 2012. [5] Charles Chan Wai Dunewas the founder of CCIF CPA Ltd who were Mayer HK’s auditors. CCIF changed its name to Crowe Horwath (HK) CPA Ltd which remained as Mayer HK’s auditors until 2011. [6] These defendants in HCCL 3/2012 were referred to below as the Charles Chan faction. However, the main protagonists were in fact Capital Wealth represented by Lam, and Mayer BVI represented by Lai. [7] However, eventually only 99 million shares were provided. According to Lam, Lai told him that he was the beneficial owner of 99 million shares and Mayer BVI 300 million. [8] In fact, $55,009,344.21 was paid. [9] Reyes J said: “69. There are diametrically opposed versions of what happened on 24 June 2009.” The learned judge dealt with these versions at paras 69-88 of his judgment. [10] Barma JA at para 22(5). [11] It should be noted that these proceedings were not directly about the 99 million shares. However, Wang’s allegation about the 99 million shares, if true, would provide an explanation for the payment of the $42.5m. [12] [1996] AC 563, where Lord Nicholls said at 586D-F: “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.” [13] Issues 3 & 4 at trial respectively. Reyes J held both oral agreements were made. The 2nd agreement is irreconcilable with the allegation that the $42.5 million was paid under a separate agreement with Wang. [14] The authenticity of AFIL’s letters of 3 June 2009 and 24 June 2009, paras 7 & 11 above, was also disputed. [15] See Kwok Chin Wing v 21 Holdings Limited and another, FACV 9/2012 (unreported, 30 September 2013), Sinoearn International Limited v Hyundai-CCECC Joint Venture (a firm), FACV 22/2012 (unreported, 30 September 2013). [16] Flywin Co Ltd v Strong & Associates Ltd (2002) 5 HKCFAR 356. [17] Because there was no reasonable possibility that the state of evidence relevant to the point would have been materially more favourable to the other side. [18] See Kwok Chin Wing v 21 Holdings Limited.