DEFENCE

I, WONG KEAN LI of 11F Hollywood Centre, 77-91 Queen’s Road West, Sheung Wan, Hong Kong do hereby solemnly sincerely and truly affirm and say as follows:-

• I am the Defendant herein. I make this Defence in reply to the Plaintiff’s Statement of Claim dated 26 July 2017. Unless otherwise stated all of the facts and matters referred to herein within my knowledge and are true to the best of my knowledge information and belief.


• I acknowledge that I did sign the Loan Agreement, but I believe that the terms of the Loan Agreement, its very nature, and even its very existence are unfair, unreasonable and makes no sense. Before going into the reasons why, I shall first describe the circumstances under which the Loan Agreement was signed, as I believe the facts will reveal many things about the true nature of the Loan Agreement.

CHRONOLOGY AND CIRCUMSTANCES OF RELEVANT EVENTS

Purchase and Financing

• After the Plaintiff and I got married in 2012, we purchased the Property on 28th January 2002 in our joint names.


• Of the initial purchase price of the Property of $12,000,000, we only had to effectively come up with 5% of funds (ie. $600,000), as 70% was financed by a primary mortgage with HSBC, 20% by Post East Finance as a second mortgage, and 5% was rebated back to us as a cash rebate after the purchase.


• The mortgages were later transferred in full to Hang Seng Bank in January 2005, and then transferred again to Canadian Imperial Bank of Commerce (“CIBC”) in August 2008.

Source of Funds for Purchase

• In addition to the $600,000 of funds required for the 5% of purchase price, we also needed another $550,000 for renovations, and as much as possible more for buying furniture. My father had sent me $400,000 as a gift just before we signed the preliminary sale agreement in late December 2001. In addition to that, we borrowed money from the following:
  
  
  • The Plaintiff’s paternal grandfather (“Ah Kong”) - $500,000
  • The Plaintiff’s maternal aunt (“2nd Aunt”) (US$40,000) - $311,000
  • My friend Li Weibei - $150,000
  
  I attach as “Exhibit KL1-01” a spreadsheet I did around that time to help me manage all cash flows, which shows the above amounts.


• Please note at the outset that I had always been the sole breadwinner of the family at all relevant times (including from and after the time of the purchase of the Property), and therefore all loans were repaid from money I earned or received (primarily through my salary and annual bonuses). All mortgage payments and related expenses were also paid by me from my salary. (NOTE: The only time the Plaintiff ever worked was before the purchase of the Property, over a period of around 6 months some time in 2001 for two kindergartens, both of which she had been fired/asked to leave.)


• 2nd Aunt’s loan was paid back sometime later that year in 2002 or sometime during 2003. My friend Li Weibei’s loan was repaid probably around 2003 or 2004.


• As for Ah Kong’s loan of $500,000, the Plaintiff and the Plaintiff’s mother informed sometime between 2006-2009 that Ah Kong had decided to gift that amount to the Plaintiff, and asked that I repay the loan by paying it to the Plaintiff $500,000 instead, which I did. Even though I considered it rather selfish for the Plaintiff to just take that money and spend it on herself (she bought an ultra expensive Hermes Birkin bag or something), I was consoled that at least I was finally free of debt to her family. Or so I thought.


• However, sometime after we had sold the Property (around 2011) and after the passing of Ah Kong, the Plaintiff’s paternal third Uncle, who was managing Ah Kong’s estate in Taiwan, demanded that I repay the $500,000, and disavowed any knowledge or acceptance that I had already repaid that amount by paying it to the Plaintiff. I was forced to borrow $400,000 from my father and paid another $500,000 to the Plaintiff’s third Uncle soon thereafter.


• In other words, although the Plaintiff did help towards the purchase of the Property by arranging the two loans from her Ah Kong and 2nd Aunt, her actual monetary contribution was $0. In fact, in actuality:
  
  The Plaintiff’s NET financial contribution was negative $500,000.
  
  In contrast, apart from arranging for loan from my friend, I was the one who obtained $400,000 from my father (as a gift, not a loan) and used my salary to service all mortgage payments between 2002-2010. As mentioned in Paragraph 7 above, I was the sole breadwinner of the family at all the relevant times. Furthermore, I not only repaid back the Plaintiff’s family’s two loans eventually, but was made to repay Ah Kong’s loan a second time, with the Plaintiff effectively being unjustly enriched $500,000 as a result.

Running Out of Money

• We sold the Property in June 2010 because we ran out of money. I shall describe the background and events leading up to it, which also explains how the Loan Agreement came into being after the sale of the Property.


• I started my own business called Brillkids (in the early education sector) in early 2008, as a result of educating our daughter from birth. I had made many millions from investments between 2007-2009, which was how I financed the company until 2010. At the peak, the company employed around 13 people and monthly expenses including salary often exceeded $300,000.


• However, the business did not work out as I had hoped, and by early 2010, I only had about 6 months of funds left to sustain both the company and the family. Being a first-time entrepreneur, I do admit that I could have managed the business much better and not been as bullish as I was. Furthermore, our family expenses (including in raising our daughter, who was born in 2005) were high, as we often spent lavishly as a family (eg. on vacations, meals, club memberships).


• Even though I had all along been relatively frugal in what I spent on myself personally, the Plaintiff on the other hand had a habit of excessive spending for herself, and demanded high spending for the family. As the Plaintiff didn’t work, she had a lot of time and spent much of that time online shopping for luxury items, going to spas, and beautifying herself through cosmetic surgery etc. Some of the spending I agreed to willingly, more was agreed under pressure.
  
  Not only that, a lot of the spending was unauthorized spending (eg. through stealing my credit card information and Paypal login details and shopping online with that information). We had many arguments over her dishonest behavior and excessive spending, and indeed, money-related issues had been the no. 1 source of arguments between the Plaintiff and me ever since the day we got married. However much I earned, it was never enough for the Plaintiff.


• This complete lack of trust I had in her (especially regarding anything to do with money) will become very relevant later on in relation to the sale of the Property. A lot of evidence regarding the Plaintiff’s dishonest behavior in relation to finances is already being revealed in our divorce proceedings (FCMC 12808/2017)(“Divorce Proceedings”), and I have reproduced some of it here too under Exhibit KL1-12 as described later.

Sale of the Property

• In early 2010, seeing that money was running out, I started discussing with the Plaintiff about the possibility of selling the Property. At that time, I also felt that property prices were nearing a peak and could crash later that year. I had hoped that we could sell high, and buy property again after market correction and having succeeded in my business. The Plaintiff objected at first, but later agreed to the sale on certain conditions, primarily:
  
  
  • we had to live in Parkview;
  • I should pay her 2 years of rent in advance for her safekeeping so that her staying at Parkview was secured (this request was later dropped);
  • our daughter had to be admitted to Hong Kong International School (HKIS) for the year commencing September 2010;
  • her monthly spending allowance had to increase substantially;
  • she must have a large sum of money to buy a replacement sofa and dining chairs she liked, etc. (I think we agreed to $100,000 in total)
  
  Please see the Google Talk chat conversation on 20th March 2010 between the Plaintiff and me showing some of the demands she was making in agreeing for the Property to be sold, attached as “Exhibit KL1-02”.


• Since the Plaintiff has never been a team player with the family’s best interests at heart, I was effectively at her mercy as I needed her agreement to sell the Property in order to save the business and be able to maintain the family. She therefore used that leverage to further demand money from me in various ways, such as paying her $10,000 to compensate her for her “inconvenience” of having to be present in the house for house-viewing by potential buyers, and funding the purchase of a luxury wallet (costing $8800) – please see the Google Talk chat conversations on 16th and 28th April 2010 between the Plaintiff and me, attached as “Exhibit KL1-03”. These are just two examples I managed to find evidence of.


• Sometime in April or May 2010, we had found a buyer, and finally agreed to a price of $27 million. We first signed a preliminary sale agreement around late May or early June 2010, and arranged to sign the formal Sale and Purchase Agreement on 17th June 2010. Further to the preliminary sale agreement, a non-refundable deposit was transferred to my account.


• On 17th June 2010, we went to the CIBC offices to execute the Sale and Purchase Agreement, and the lawyers involved (I think CIBC lawyers) ran through the process with us. I was told that since the Property was in our joint names, the sale proceeds would have to be transferred to both the Plaintiff and me, either in a lump sum to a joint account, or split so that 50% was to the Plaintiff’s account and 50% to my account.


• I immediately objected to this as I could foresee a huge amount of trouble if that were to happen. Firstly, by way of background, it should be noted that over the past many years before then, it had always been me to manage all family finances, so it was clearly implicit that all the sale proceeds would continue to be managed by me, and used for the purposes already agreed – ie. for the business, and for the family. Naturally, it was an unstated agreement that the funds should have been transferred solely to me, and there was never any discussion as to whether she should be receiving any of the proceeds from the Property. For example, the initial deposit paid under the preliminary sale agreement was transferred to my account without any question or discussion.


• Of course, I could have gone along with the lawyers’ request and had 50% transferred to her first and for her to transfer it back to me for management, and she even asked me to trust her that she would do that, but as explained earlier, I simply did not and could not trust her, especially with such a large amount. I was certain that either she would make arbitrary ‘deductions’ from it at her whim and fancy, or she would use it as further leverage against me to extort more things from me. Best case scenario was she would make only ‘minor’ deductions but there would be a lot of unnecessary argument before she would be willing to transfer the rest of it to me for management. But worst case scenario was that the entire 50% of the proceeds would have been ‘wasted’ by her on her personal extravagances and that would completely defeat the whole purpose of selling the Property in the first place.


• The lawyers told me that in order to have the proceeds transferred solely to my account, the Plaintiff would need her to sign off on it. After this situation was explained to the Plaintiff and when she heard that 50% of the proceeds should technically-speaking be transferred to her, her eyes lit up as she saw the possibility of having so much cash in her account. When I told her that doing so would be unacceptable and requested her to sign the waiver, she at first refused, and we got into a very heated argument at the CIBC offices. I told her that if she insisted on having half the proceeds transferred to her account instead of letting me continue to manage all family money like before, I would prefer not to sell the Property. Indeed, for a couple of hours, we had virtually called off the entire transaction, and I was already prepared to go home. At last, however, she agreed and signed the waiver. We then proceeded to sign the Sale and Purchase agreement and the first tranch of the proceeds went to my account, as originally planned.


• SIDE NOTE: I was not always the one who controlled family finances. As mentioned, we always had arguments over money, especially over the Plaintiff’s dishonest behavior which to me was hardly any different from theft (see further below for more details). Around 2003, the Plaintiff said that a big reason for such behavior was due to the fact that she had no control over family finances, and suggested that things would be different if she was the one responsible, as having this responsibility would would make her ensure our money was managed properly.
  
  I decided to give her a chance, and for a period of over a year, I transferred the entirety of my salary (around $100,000) to her every month, and she was the one who decided on all expenditure and managed all bills and payments. I only needed around $2000 a month for personal expenses, which she would transfer to me. I never once looked at the bank statements nor asked her for details, and trusted her whenever she said that we had enough, even when worryingly large purchases were being made.
  
  I started finding out that we were in serious financial trouble around a year or more later in early 2004, when debt collectors started knocking on our door. I soon found out that huge amounts were long overdue on my credit cards, including over $200,000 on just my Standard Chartered credit card alone, and furthermore, over two years’ worth of income tax was unpaid, and that’s just the big items. In total, after paying off one year’s income tax, we still had a financial hole of around $500,000, and I had to borrow from friends, including a $425,000 loan from Mr. King Tsai on 4th May 2004 (copy of loan agreement can be provided, and he can also testify in court if necessary).
  
  Naturally, I took back control of family finances immediately and later she even apologized and agreed that she should not be given control again in the future. However, the damage was already done, which included not only the debt I had to repay, but also my having to deal with a very low credit score for a few years after that. Unfortunately, despite this experience, we continued to argue over money matters, and this persisted all the way until our divorce proceedings in 2017. Some of this is described further below with evidence attached in Exhibit KL1-12.

The Signing of the Loan Agreement

• Immediately after the signing of the Sale and Purchase Agreement on 17th June 2010, things were initially fine. In terms of how money was to be spent, we had only agreed to the terms mentioned in Paragraph 17 above, and even so, our cost of staying at Parkview was already higher than anticipated - $90,000 instead of $80,000). I had made clear to her (and she agreed) that even though we would have a lot of money from the sale of the Property, we still had to be prudent with how we spend, as we needed to make sure the money lasted until the business became profitable and could sustain our lifestyle. However, this promise was soon forgotten or ignored.


• As she was well aware that we would have many millions from the sale of the Property, she started making increasingly more demands for luxury purchases. One example of her demands can be seen in an email conversation with the Plaintiff on 24th June 2010 (barely a week after signing the Sale and Purchase Agreement) where she was asking to purchase a Frank Muller watch (see “Exhibit KL1-04”) even though she already had several luxury watches including a custom Rolex watch. Just the balance alone for this purchase that I was asked to pay was already US$4,000 (around HK$30,000).


• Soon after, we also started having big arguments over the furniture she was asking to buy. I remember we had agreed to cap the costs at around $100,000 (which I already felt was way over the top, as it was primarily just a sofa and dining chairs that we agreed to replace), but she was now asking for a budget of much more than that (the final amount was over $150,000 just for the sofa and dining chairs (!!), as can be seen in our Google Talk chat conversation on 21st July 2010 (see “Exhibit KL1-05”)).


• I remember for the days leading up to the Loan Agreement, I would be hearing non-stop from her how she was now in such a pitiful state, as she no longer had the security of the Property, and how she was now reduced to being a beggar having to beg for money. She also felt like I had cheated her out of her half-share of the Property, and it was as if I had taken what was rightfully hers for my own benefit only, despite the fact that half of the money was to be spent on the family and half on the business (which she would also be entitled to in the event of a divorce), and if we didn’t sell the Property, we wouldn’t have money for the family eventually and would not have money to service the mortgage payments so we’d eventually have to relinquish the flat anyway. I remember that I could not even get any sleep, as she would go into manic rages, and wake me up in the middle of the night to continue whining about it, often screaming at the top of her lungs and exhibiting violent behavior. The screaming and yelling and violence resulting from it was also starting to really affect our 5 year old daughter.


• I have since come to understand that the Plaintiff has all along been suffering from a personality disorder, and this type of behavior (including shopping addiction and unrelenting manic rages) are not uncommon among people with this mental condition. I shall elaborate on this further below, but in short, my life was a living hell, though I know it is probably very hard for someone to imagine unless they have lived with someone with a similarly serious case of a personality disorder such as hers.


• On or shortly before 17th July 2018 (one month after the Sale and Purchase Agreement had been executed), after days and nights of unrelenting badgering and manic rage episodes from the Plaintiff, I agreed to write her a loan agreement as if the entire consideration of the sale of the Property was hers and all of it would be treated as a loan from her to me. I did not even care that the terms of the loan agreement was completely unfair and didn’t even make sense – I simply agreed to everything she asked for as I just wanted peace in the house for my and our daughter’s sake, and was willing to do anything to make the torment stop. We can see the Plaintiff asking me to write out a loan agreement to her in a Google Talk chat conversation that very day (see “Exhibit KL1-06”).


• As I was used to drafting agreements and did not want to spend unnecessary money on lawyers, I quickly drafted up an agreement two days later over lunch (at 1.03pm on 19th July 2010, according to the “Created on” data of the Word document of the Loan Agreement as shown in “Exhibit KL1-07”). However, that was not enough for her and she insisted that we sign it in front of our lawyer and that he review it. We then made an appointment with our lawyer Mr. Chan Chun Tin (who had drafted our Sale and Purchase Agreement) on 20th July 2010. The Plaintiff asked the lawyer to make whatever amendments needed to be made for her benefit, and the lawyer did make several changes to the agreement on the spot, all of which I agreed to without much thought or consideration (again, I just wanted the whole episode to be over). We then signed the Loan Agreement later that day.


• I didn’t even bother keeping a copy of the signed Loan Agreement. The great thing was, I achieved what I had hoped for – no more tormenting from her over the sale of the Property, and I honestly forgot all about it during the intervening years, so much so that when the Plaintiff mentioned it again during an argument over money more than six years later around August 2016, I honestly thought she was talking rubbish again, until she later produced a copy of the Loan Agreement for me. I then slowly remembered all the details.

Use of Proceeds from Sale of Property

• The Plaintiff seems to believe (and tells others) that I stole her money that was supposed to have been hers from the sale proceeds of the Property, implying that all the money was spent for my own benefit, and had nothing to do with her and what she wanted. Let us therefore now examine what happened to the sale proceeds.


• First, what was the actual amount we received from the sale of the Property? At the time of the sale, the Property was mortgaged to CIBC under a legal charge, and shortly before the execution of the Sale and Purchase Agreement the outstanding amount owed to CIBC was $10.7 million (see the CIBC confirmation letter dated 10th June 2010 as attached as “Exhibit KL1-08”).


• During final negotiations of the Property sale when the sale was looking very likely, I started planning how the proceeds of the sale would be used, and wrote down my calculations on an Excel sheet (see “Exhibit KL1-09”). The document was created on 15th April 2010 and was last edited on 17th June 2010 (the Court and the Plaintiff are welcome to inspect the original document directly on my computer to verify this).
  
  According to the Excel sheet, after deducting one-off expenses, including repayment of the mortgate to CIBC, stamp duty (4.25%) and broker fees (1%), the net amount received was $14.9 million. The figure should actually be $14.7 million because the amount owing to CIBC by the time of sale was at least $10.7 million as mentioned above. Total amount received should therefore have been $14.7 million.
  
  


• Two and a half years after the Property sale, towards the end of 2012, we were already running out of money again. Where did the $14.7 million go? Was it ‘stolen’ by me as the Plaintiff likes to claim?


• In the same Excel sheet, I did rough calculations of projected family-related expenses over two years, for the purpose of estimating how much I could use for the business. According to my estimations then, family expenses were already estimated to use $7 million, with a large part being an estimate of $160,000 a month for household expenses. Looking at this figure today (after having lived frugally for the past many years), I wonder if I had written that correctly as it does seem very high. Thinking back, I believe a large reason for such high expenses was due to the Plaintiff’s regular spending on private yoga lessons, spas, cosmetic-related sessions, as well as very high extracurricular tuition costs for our daughter, in addition to very frequent outside dining at expensive restaurants. In any case, this was clearly what I had written in 2010 and there’s no reason to believe my estimate then was unrealistic. Again, the Plaintiff and the Court are welcome to examine the Excel document directly on my computer to see that the document was last edited on 17th June 2010 (the day of the sale).


• Using the estimation in the Excel sheet and projecting it over two and a half years (to the end of 2012 when we were almost totally out of money), estimated family expenses would be around $8.75 million. This also assumes that we stuck to that estimation, which itself is not necessarily the case given the many extravagant spendings and ‘unauthorized spendings/thefts’ made during those two and a half years.


• How much did I spend on the business? I attach audited financial reports for the company, BrillKids International Limited, for the years 2010 and 2011 as “Exhibit KL1-10”. The amount of cash I put into the company can be seen in the balance sheet, under “Amount due to a director”. In the 2010 audit report (page 5), it can be seen that this amount increased from $6.4 million to $7.5 million, meaning I had funded the company $1.1 million. In the 2011 audit report (page 5), the amount increased to $11.6 million, meaning I had funded another $4.1 million. This was mainly due to my having made a big investment (costing many millions) in creating and launching a TV infomercial campaign for the US market. I had good reasons to go for it, but it was a make or break “all-in” decision which unfortunately didn’t get a good enough response after the first trial, and I was already running out of money and afraid of putting in more to make the required changes to try to make it work.
  In total over 2010 and 2011, I had funded the company in total of around $5.2 million. (2012 didn’t require additional funding so the “amount due to a director” didn’t change much. 2012 audit report can also be provided if required.)


• There was also a big unexpected expense in 2012 due to the Inland Revenue Department (IRD) not accepting a tax avoidance scheme that I (and other company directors) had adopted during my time at Softbank Investment in 2004/2005. They investigated the matter in 2012 and judged that the scheme was not valid, and we had to pay unpaid taxes and a penalty. For me, I had to pay unpaid taxes of $457,268 together with a penalty sum of $330,000, totaling around nearly $790,000 (see letter excerpt from the IRD to me dated 13th November 2012, attached as “Exhibit KL1-11”).


• So far, I have already accounted for more than $27 million:
  


• Of course, as mentioned already, the estimated family expenses over the 2.5 years may not have ended up being as much, but I cannot say it is unrealistic. Unfortunately, I no longer have my bank statements from that period as they were thrown away during our move to China in 2012, and the banks (eg. Hang Seng) are only able to provide records for up to 7 years prior (from 2012 onwards).


• It should also be noted that the above estimates do not cover unplanned expenditure, some of which I can remember now. For example, soon after the sale, the Plaintiff insisted we also became VIP members of the Four Seasons Hotel entitling us access to the heated swimming pool and spa. I remember that cost us $100,000 a year ($200,000 over two years), not including the additional charges from the innumerable spa sessions the Plaintiff would have there. What about several holidays we had, including to Maldives (which alone I remember was around $100,000 due to hotel and spa charges), Thailand, Malaysia, etc.? What about all the luxury purchases like the Frank Muller watch mentioned earlier, a top-of-the-line threadmill the Plaintiff insisted on buying which cost $75,000, and other stuff I cannot remember? Afterall, we are talking about 7-9 years ago.


• Lastly, the Plaintiff also often made unauthorized expenditure, by typically (but not limited to) secretly swiping my credit cards, as mentioned earlier. I am attaching as “Exhibit KL1-12” certain emails and Google Talk chat history and related documents from November to December 2012 that show most of what I described above, including repeated and continuous dishonest or unauthorized spendings by the Respondent. The Respondent’s dishonest actions are not in dispute – it is clear from the correspondence that she has acknowledged her actions. How much more unbudgeted expenditure was incurred from such behavior?


• To sum up, it is not difficult to see what happened to the entire $27 million of sale proceeds. We only received around $15 million, and about 60% went to family expenses (a large part of which was primarily for the benefit of or at the insistence of the Plaintiff herself), with only about 35% going to my business (half of which she is now claiming to be entitled to anyway in the Divorce Proceedings).



LEGAL ISSUES REGARDING THE LOAN AGREEMENT

A.  Duress

• As already alluded to above, it is difficult to describe the helplessness I felt in the days (maybe even weeks) leading up to the signing of the Loan Agreement. I basically either had to give into her demands to sign a loan agreement for her, or continue to undergo harassment and mental torture from her day after day, night after night. I shall describe in detail, and with evidence, the type of behavior I am talking about, but suffice it to say that I felt that if I did not give her what she wanted, I would be driven insane.


• First, it is clear to me that the Plaintiff has been suffering from a mental disorder, symptoms of which became very apparent very soon after marriage. I only became aware it was a mental illness after it was first suggested to me in private by a psychologist who acted as a marriage counsellor to us (probably around 2005). The psychologist suggested I learn more about “personality disorders”, after which I found that the descriptions of “narcissistic” and “borderline” personality disorders seem to fit the Plaintiff very well. However, as the consultations ended before there was any official diagnosis, I had no real proof and kept it to myself.


• I had similar suggestions too from others over the years, but the most recent indication came in the Child Custody Evaluation report dated 8th June 2018 conducted by child psychologist Dr. Jadis Blurton and her team pursuant to our Divorce Proceedings. In the report, this was mentioned about the Plaintiff:
  
  “clinical observations both in-person and those occuring via email correspondence revealed Ms. Fang to exhibit many characteristics associated with Cluster B personality disorders (i.e. Narcissistic; Boarderline; Histrionic) whereby individuals with these disorders often appear dramatic, emotional and/or erratic.”
  
  I have attached an excerpt of this report as “Exhibit KL1-13”. I am happy to provide the Court with the entire report if necessary.


• It is not appropriate for me to get into detail here regarding such personality disorders, but the following are four types of behavior that I had to deal with that is relevant to my contention that I felt I had no choice:
  
  
  • harassment / lack of peace;
  • suicide attempts and threats;
  • violence and threats of violence
  • forcing others to sign things for the Plaintiff’s benefit
  
  I had to deal with the above behavior innumerable times throughout our marriage, and I shall give clear evidence of each of these behaviors.



(i)  Harassment / lack of peace

• Even though incidents of harassment by the Plaintiff were very commonplace soon after our marriage, I only started recording events after our marriage was irretrievably broken (some were from 2013 onwards, but most were from 2016 onwards). The first example of her harassment I am showing is from 19th October 2016, where I show a series of video recordings of her continually waking me up by banging outside the door from 5.57am in the morning until 6.22am, with the harassment continuing even when I left the house at 10am. I have included a description and video screenshots, as well as a download link, as “Exhibit KL1-14”. The Plaintiff was harassing me for money (even though she had recently refused to pay back $126,000 which she had swiped from my credit cards). Like usual, she would not stop harassing me until she got what she wanted, but thankfully this time, I had my own room and had the door locked, though it still didn’t stop her from disturbing my sleep.


• Some other times, the Plaintiff would even try to damage the door to get me to open it. One example is one incident on 13th November 2013 when the Plaintiff damaged the door after I refused to open it. I am attaching as “Exhibit KL1-15” two pictures showing this damage, as well as my written account of the events that day by way of a written journal sent by email to the Plaintiff the following day. From the journal, it seems that it was (again) because I did not give her the money she wanted (which was again due to her ‘theft’ beforehand). The journal also mentioned an earlier incident when she had thrown food at my door when I wouldn’t open it.


• Now, can you imagine what it was like back in 2010 when I did not have my own bedroom and could not keep the Plaintiff away at distance? I already consider myself lucky in the later years in China for having my own bedroom, and frankly was already used to her antics after all those years, but the situation was almost impossible to live with back in Hong Kong, especially during that relevant period back in 2010 when I was effectively forced to draft that loan agreement. The Plaintiff would go on and on (often getting into manic rages with violent behavior) and there would be no chance for any decent rest, let alone any peace.


• I remember so often back in Hong Kong I was almost driven insane to the point of wanting to end my life. I had never considered divorce a realistic option back then because of our daughter, lack of funds for the high lawyer fees I imagined, and fear of the complete upheaval in everyone’s lives due to retaliation by the Plaintiff during the course of a divorce, like what has been happening currently during our Divorce Proceedings. Therefore, my life was a living hell, and the only option other than ending my life would be to give in to her demands.


• A minor version of the Plaintiff’s mental torment happened to be captured by our car’s dashboard camera on 12th June 2017. I have attached a transcript of the recordings, together with a download link, as “Exhibit KL1-16”. The recipient of her mental torment here was unfortunately our daughter FW, and it was over just a trivial issue (dissatisfaction over FW’s performance at a competition the previous day, even though she had performed the best among all contestants). Yet, the Plaintiff would just go on and on about it, causing FW scream back, pleading for the Plaintiff to stop. For example:
  
  “LEAVE ME ALONE I TOLD YOU ALREADY, I’M TRYING!!! WHAT ELSE DO YOU WANT ME TO SAY?!!!!”
  “STOOOOOOOOOOOOOOOOOPPPPPPPP!!!!!!!!!!!!! LEAVE ME ALONE!!!!” (starts crying)
  “GOOOOOO AWAAAAAAAAAAAAAAAAAAYYYY!!!!!!!”
  “YOU ALREADY GAVE ME YOUR CRITICISM TEN TIMES!!!!!”


• The way FW felt is very similar to how I used to feel, including during the days leading up to the signing of the Loan Agreement. I just wanted the mental torture to stop, and was willing to do anything to make it stop. Please be reminded that these are only the incidents which have been recorded, and there have been innumerable more instances over our marriage which were not recorded.



(ii)  Suicide attempts and threats

• The other thing I had to deal with regularly was the Plaintiff’s suicide threats. Once in 2006, she even attempted suicide by deliberately taking a large quantity of sleeping pills in the middle of the night, then waking me up to tell me about it around 3am, resulting in my sending her to the hospital immediately. Although that was her only suicide attempt, she would threaten or suggest it very often throughout our marriage, especially in the earlier days, including, I remember, during the period leading up to the signing of the Loan Agreement.


• I attach as “Exhibit KL1-17” four items of correspondence over the years ranging from September 2011 to April 2014 where the Plaintiff talks about her suicide attempt or threatens/suggests suicide. The attempted suicide incident was described by the Plaintiff in an email dated 5th September 2011 to the leader of a course (Landmark Forum leadership course) she was taking (see the first attachment), although it was embellished or exaggerated in certain aspects, and false in other details. She has also mentioned it in several other correspondences with others which I have not attached.


• In the second item attached (Google Talk chat conversation dated 13th November 2013), the Plaintiff was very upset that I was deducting her allowance due to (again) her earlier unauthorized purchases on the credit card, and she later threatens suicide:
  
  “I hate my life and our relationship and the way you are threatening me with my weekly allowance - my own means of livelihood. So I've decided - I've found a quiet hotel in Taipei to end my own life.” (12:06pm)
  
  She even goes on to curse me:
  
  “And yes, I do curse you even after my death. I curse you that you'll fail at all your future endeavors, and you will die lonely and impoverished.” (12:13pm)


• The third item attached in Exhibit KL1-17 is an email the Plaintiff sent on 22nd September 2013 to seven people including my parents and our daughter’s Godparents after I had emailed her to tell her my feelings and how I no longer wished to work at the marriage following her “continuous screams, foul language, curses and personal insults”. The Plaintiff considered my email to be putting her under “psychological torment”, and in forwarding the email to the recipients, told them:
  
  “Perhaps he won’t stop until I commit suicide again.”


• Last but not least, the fourth item is a QQ conversation dated 26th April 2014 (copied and archived onto my Gmail on 22nd May 2014) showing the Plaintiff’s threats regarding her own mother (who she calls “this monstrosity”). The Plaintiff did not want her mother to continue staying in our house and was trying to persuade me to kick her out (as I was the one who invited her and was paying for rent), saying:
  
  “I just want this monstrosity out of my sight.” (8:11am)
  
  “Your installation of her here without your presence is going to have two effects: we killing each other; two, a homicide followed by a suicide.” (8:12am)
  
  She mentions “homicide” and “suicide” another two times in that conversation at 8:16am and 8:33am.


• Truth be told, during the later years of marriage, I had already learned not to take her suicide threats seriously, but during the first few years after her attempted suicide in 2006, including during the period leading up to the Loan Agreement, this was something that I had to take very seriously. During the relevant period, I remember that the Plaintiff was threatening suicide again, and I was in real fear she would attempt it again, and this was a huge contributing factor to my agreeing to draft a loan agreement for her and eventually sign it.



(iii)  Violence and threats of violence

• I have already shown examples of violence on the part of the Plaintiff above, namely, her violence towards the door, and her threats of violence (murder) towards her own mother (who I shall refer to as “Ms. Huang”). Unfortunately for everyone around her, violence was a common behavior with the Plaintiff, especially towards Ms. Huang and our daughter.


• As early as 2014, Ms. Huang was often physically abused by the Plaintiff. The first time that this was recorded was on 5th April 2014, when Ms. Huang told me that the Plaintiff had scratched her face and strangled her with a scarf for a short duration. I attach as “Exhibit KL1-18” a picture that Ms. Huang asked me to take shortly after the event (she had called me to return home).


• Ms. Huang suffered abuse at the hands of the Plaintiff often, both physically as well as in other ways (like the Plaintiff locking Ms. Huang out of the house, and attempting to burn Ms. Huang’s passport). Once, during the peak of their bad relationship sometime in 2017, Ms. Huang told me she had discovered oil poured all over her toilet when she went to use the toilet in the middle of the night. She believed that the Plaintiff was attempting to cause her to slip and fall. Things were so bad that Ms. Huang filed police reports against the Plaintiff on no less than three separate occasions. On the third time, the police wrote a letter to the Plaintiff on 16th February 2017, requesting that the Plaintiff do/not do certain things, including to:
  
  “Stop all forms of physical violence towards family members”
  
  The police letter is attached as “Exhibit KL1-19”.


• I also attach certain Wechat conversations from Ms. Huang to me where she describes in detail the Plaintiff’s violence towards her and how she feared for her life (see “Exhibit KL1-20”). I have made this offer to the Plaintiff in the Divorce Proceedings before already but will make it again here: the Plaintiff and/or her lawyers are welcome to verify the Wechat conversations and any other digital evidence I include here directly on the device (ie. computer or phone) to verify the veracity of the evidence. So far they have not taken me up on the offer even though the Plaintiff keeps saying that the evidence has been faked (without giving details as to what exactly was faked or how it was faked).


• I also experienced violence frequently from her too, even soon after marriage, though I only remember one instance of physical assault at me. My experience of her violence was typically during her manic rages when she would destroy things in the house and throw things out of the window (it’s a miracle no one below ever got hurt).


• 67. One example of such manic rage and violence against me from the Plaintiff can be seen in a series of videos I recorded of her on 12th June 2016. I attach screenshots and further details of those videos in “Exhibit KL1-21”. We had been discussing our daughter’s education and she had got into a rage just because I told her I believed that what was most important was our daughter’s happiness, and not necessarily getting into the best school or into Harvard which was what she wanted me to say. She went ballistic that I said “happiness” and started pushing everything off my desk and creating a mess, so I started recording her, both in order to have evidence of the damage she was causing, and also to encourage her to stop her violent behaviour after knowing she was on video.
  
  It should be noted that after she noticed I was video-recording her, she started to pretend that I had beaten her, though it will be clear from the rest of the video that her manic rage was caused simply by my use of the word “happiness” (which she mentioned 15 times later on and which I have highlighted in the transcript).
  
  In fact, the incident didn’t end with these three videos. There are 1 more video and (after my phone ran out of battery) 2 more audio recordings that were taken after these three videos where she continues to go on outside my door about how I should not have brought up “happiness”, as I clear up the mess she made in my room. I would be happy to provide those if requested, and can show them during trial.
  
  


• These videos show a number of things:
  
  
  • The Plaintiff is physically violent;
  • The Plaintiff goes into a manic rage over something trivial (in this case, my mentioning the word “happiness” in response to her question);
  • The Plaintiff goes on and on about it and continues to harass me despite a lack of response on my part
  
  This sort of behavior was what I had to endure very often over all the years of our marriage. Based on what I remember, I am also quite certain that the Plaintiff also went into manic rages, and perhaps with accompanying violence too (most likely throwing things outside the window from our 33rd floor flat) in the days leading up to the signing of the Loan Agreement.



(iv)  Forcing Others to Sign Things To Benefit the Plaintiff

• From very early on in our marriage, the Plaintiff would not only exert tremendous pressure on people around her to do what she asked for, but in certain cases she would also exert further pressure to get that person to put it down in writing and sign it. Those things ranged from simple things, all the way to more serious matters like loan agreements, with the one thing the agreements had in common being that all of them would be very one-sided agreements in favor of the Plaintiff that had no benefit for the person signing. Fortunately, most of those ‘agreements’ seem to have been lost by the Plaintiff (I never bothered to keep those agreements in the first place).


• Everyone around the Plaintiff has experienced being made to sign things against their will, including our daughter FW and the Plaintiff’s mother Ms. Huang. This was especially the case with our daughter, and I have attached three Exhibits showing this.


• “Exhibit KL1-22” is a transcript of an audio recording on 20th November 2016 (together with a download link) made during one of the Plaintiff’s manic rages against FW, who had disobeyed the Plaintiff’s order not to see me. The Plaintiff declared that she would no longer be FW’s mother and was demanding that FW sign a declaration to that effect. During that episode, the Plaintiff even threatened violence by brandishing a knife. The audio recording shows:
  
  
  • The Plaintiff kept trying to make FW sign things against her will
  • The Plaintiff kept threatening FW for not signing, in ways that would make FW feel embarrassed at school
  • The Plaintiff threatened violence (including brandishing a knife)
  • FW was very badly affected emotionally by the Plaintiff’s behavior, and considered her life to be “screwed up” because of the Plaintiff


• “Exhibit KL1-23” is a transcript of a phone call conversation on 26th March 2017 mainly between the Plaintiff and FW. Similarly, the Plaintiff had been very upset at having found out that FW had slipped away to come see me, and kept reminding FW of the agreement that FW had signed for her. The recording shows:
  
  
  • The Plaintiff had made FW sign agreements against her will that were totally unreasonable (ie. restricted or prevented FW from seeing me)
  • FW also said that she was “made to” sign it, and believed she should never have signed it in the first place
  • The Plaintiff constantly threatened FW (eg. with the withholding of forgiveness) unless FW did as the Plaintiff demanded


• Sadly, according to the Plaintiff’s mother, it seems like FW was even made to sign a “self-cursing poison oath”, presumably that FW would do everything the Plaintiff asked or she would be cursed forever. In a Wechat conversation between Ms. Huang and her friend that she later forwarded to me on 26th June 2017 (attached as “Exhibit KL1-24”), Ms. Huang had told her friend:
  
  “What I am even more unable to accept is how the mother, in order to get a winning hand, forced her daughter to sign a self-cursing poison oath. Therefore her own daughter is now freely at her command, lying without care, giving false evidence, deliberately maligning her loved ones who care for her.”


• Even Ms. Huang herself has given in before to pressure by the Plaintiff to write and sign unconscionable documents. In the Divorce Proceedings, I described how Ms. Huang was made to write, sign and file a false police report against me claiming that I stole her identity in buying a car. I cooperated fully with the police who, upon examining all the evidence, swiftly dropped the case and concluded that there was “no factual truth” in the accusations. Ms. Huang then wrote an apology letter where she “voluntarily admits her wrongdoing” and “hopes that [I] will forgive and understand”. The Plaintiff already has all these documents but I would be happy to produce them to the Court too if required.
  
  This false police report is just the latest example of someone (first FW, and now a fully-grown adult – Ms. Huang) being forced to sign something completely false and unconscionable, with no benefit to that person signing. In Ms. Huang’s case of writing a false police report, this not only had zero benefit to her, it could also have had serious negative effects on her – ie. possibility of a criminal record and detention in China.



Duress – Conclusion

• I hope I have managed to give some idea as to what I had to endure all those years. Like what most partners or close-relatives of people with personality disorders attest to, it is very hard for others people without similar experience to begin to understand what it is like to live with such people. Because it is hard to understand, it is also hard to imagine that the constant and overwhelming torment people like myself go through, and how such torment could make even intelligent people do the stupidest of things against their true will, such as (in my case) drafting and signing a completely one-sided Loan Agreement which doesn’t even make sense on the face of it.



B.  Lack of Intention to Create Legal Relations

• I understand that it would be difficult for the Court to believe that I never had an intention to create legal relations with the Plaintiff through the Loan Agreement, since I was a lawyer previously and I was the one who drafted the Loan Agreement in the first place, not to mention that the agreement was signed in the presence of a lawyer. However, the truth is that I did not have such an intention, and only drafted and signed it for the Plaintiff according to her demands in a desperate attempt to get some peace in the house for everyone concerned (for me, and also for my daughter who was witnessing the Plaintiff’s frequent manic rage episodes).


• My only real intention was to have the Plaintiff cease her torment towards me, and the Loan Agreement was only done to calm her down. I never imagined that the Plaintiff would actually sue me with it. And that’s why I just wrote everything she asked for, and let the lawyer change everything he suggested.



C.  Lack of Consideration

• I also believe there was no consideration given for the agreement. What exactly was the benefit to me for signing the Loan Agreement? I got nothing from the deal, except for cessation of torment over the sale of the Property. However, that cannot be considered good consideration because that is equivalent to saying that agreeing to remove a gun pointed at my head should be considered as valid consideration.


• What the Loan Agreement writes as supposed consideration is simply not true, and goes against actual facts. It must be remembered that when the Loan Agreement was even conceived was on or around 17th July 2010, one whole month after the Sale and Purchase Agreement had already been signed (17th June 2010). As I have already proven, I only started to draft the Loan Agreement on 19th July 2010, and signed it at the lawyer’s office a day later on 20th July 2010.


• The Plaintiff will claim that she only agreed to sign the Sale and Purchase Agreement because I had previously agreed to treat the proceeds as a loan from her to me, but how likely is this really, given the facts, and given her nature where money is the number one most important thing to her ever?


• If I really had made such a promise to her before signing, why did we wait until ONE WHOLE MONTH LATER to have it drafted? Looking at her history of pressuring others relentlessly to sign things, is it really believable that she would “remind” me only one month later instead of in the following days? Notice that after we first see it mentioned on the 17th, I had the agreement drafted on the 19th, and then signed on the 20th. This is exactly the sort of speed one would expect that she would demand for something that is so important for her. For her to have waited one whole month to “remind” me to draft her a loan agreement I supposedly agreed to before signing the Sale and Purchase Agreement is simply not believable. I challenge her to show any mention of entering into a loan agreement before the 17th July, especially before the signing on 17th June. I am 100% certain she will not be able to show anything, and that is because there simply was never any such agreement when the Sale and Purchase Agreement was signed or even soon after.


• The truth is, the entire idea of the loan was only concocted by her long after the Sale and Purchase Agreement, because she probably received push-back from me at her demands for luxury purchases (like the Frank Muller watch mentioned in Paragraph 26 above. Arguments ensued as always – see all the other past examples I have already shown above which are almost invariably over my not meeting the Plaintiff’s monetary demands – and I was then pressured by the Plaintiff to draft the loan agreement, and forced to do so under duress using her standard arsenal of torment tactics like continual harassment, suicide threats, threats of violence, and frequent manic rage episodes, which although were targeted at only me, produced severe collateral damage too especially to our 5 year old daughter who had to witness and experience a lot of it.


• So, with the Sale and Purchase Agreement and the waiver letter already signed, and the money would be coming into my account already anyway, what exactly was the benefit to me for signing the Loan Agreement? NOTHING! She had already signed the waiver (otherwise I would not have proceeded with the Property sale in the first place), so she cannot claim my signing the Loan Agreement she dreamt of subsequently was in consideration of her signing that waiver.


• Having the proceeds transferred to my account also represented nothing new, and was a continuation of the previous state of affairs where I was the one to manage all our finances (and with good reason too given the Plaintiff’s previous disastrous track record at handling it), so there’s no benefit there to me in any case. It is also clear that the proceeds was not used for my sole benefit, but continued to be used (like with previous funds from my investment earnings before) for the family and for the business (which she is also entitled to upon divorce), so it’s not like she was doing me any personal favours that benefited me solely by signing the waiver anyway.


• If the situation was the opposite and she was the one who was managing our family money, then I would have naturally signed the waiver, and my signing would not benefit her more than what was already agreed to beforehand.


• The bottom line is, I never had any good reason (other than getting her to cease tormenting me) to sign the Loan Agreement, and signing it brought me absolutely zero benefit. Regardless of what the Loan Agreement said about consideration, it should be clear that in actuality, there was absolutely none given by the Plaintiff.



D.  Nonsensicality and Unfairness

• The terms of the Loan Agreement don’t even make sense. How can she lend me $27 million when she never had (and could never have had) $27 million to lend to me in the first place? As shown, the total net proceeds was less than $15 million. On what basis should I have been the one shouldering 100% of the mortgage liability and other associated costs, with 100% of the proceeds belonging to her? How can that make any sense at all in this universe we live in?


• It is clearly also a wholly unfair agreement, not to mention being completely one-sided. The entirety of the sale proceeds are being used to support the family and the business, both of which she is either a part of or has a legal interest in, yet the Loan Agreement requires me to repay the entire amount back to her, and yet not deduct from the proceeds any of the payments that are made to her as her living expenses, nor deduct any money that is spent on the family? Again, in other words, I should bear 100% of all expenses (including expenses on the family as well as on Plaintiff personally), and any and all benefit should go to the Plaintiff without any need to shoulder any costs whatsoever.


• I know that that has always been the Plaintiff’s mindset (she has often said, “what is yours is mine; what is mine is mine”), but can anyone honestly say that this is in any way fair or reasonable? Given the ridulously unfair terms and terms that do not even make sense, can anyone honestly imagine any person of sound mind drafting it and signing it?



CONCLUSION

• It has been very difficult for me to write this Defence and to relive my past stupidity in signing the Loan Agreement, as well as to remember the torment by the Plaintiff that I had to endure for all those years that caused me to do so. Despite my firm belief that the Loan Agreement should not be considered legally binding due to all the reasons mentioned, I also know the law may not care much for everything I described above, especially since my financial situation does not allow me to engage lawyers to argue my case for me.


• If the law does care, I hope I have produced enough evidence to show that the Loan Agreement was not signed fully voluntarily, and to show that even though it might be hard to believe from the point of view of someone who has not encountered the Plaintiff personally (or someone with a severe case of personality disorder), it does not mean it is not true.


• I also hope that it is clear that in reality I gained absolutely nothing from having signed the Loan Agreement. There was truly zero consideration.


• Lastly, I hope that it will also be obvious that I never bothered to challenge what she was asking for, regardless of how ridiculous and nonsensical it was, because I never imagined it would be used in court against me, and I was under duress to just give her what she wanted and stop the torment I was experiencing.