Neoh v Macquarie Equities Ltd (ACN 002 574 923) - [2005] SASC 342

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
NEOH & ORS v MACQUARIE EQUITIES LTD (ACN 002 574 923)
Judgment of The Honourable Justice Besanko
9 September 2005
BANKING AND FINANCE - NON-BANK FINANCIAL INSTITUTIONS - SHARES, SHAREHOLDERS AND MEMBERS
Appeal against orders made in the Magistrates Court dismissing the appellants’ claim against the respondent for breach of contract and, in the alternative, for breach of a fiduciary duty or breach of a duty of care – where third appellant traded in financial instruments on behalf of the first and second appellants and other clients – where respondent engaged as the third appellant’s stockbroker – where third appellant signed blank lodgement forms to use shares owned by one client as collateral security in relation to the liabilities of another client – whether magistrate erred in finding that the third appellant authorised the use of shares owned by the first and second appellants as collateral security in relation to the liabilities of another client – whether magistrate erred in finding that the third appellant authorised the subsequent shales of the shares – findings of fact – not contrary to incontrovertible facts or uncontested testimony – not glaringly improbable or contrary to compelling inferences – appeal dismissed.
Magistrates Court Act 1991 s 40; Superannuation Industry (Supervision) Act 1993 s 67, referred to.
The Commonwealth v Verwayen (1990) 170 CLR 394; Fox v Percy (2003) 214 CLR 118; Jones v Hyde (1989) 63 ALJR 349; Abalos v Australian Postal Commission (1990) 171 CLR 167; Devries v Australian National Railways Commission (1993) 177 CLR 472, considered.

NEOH & ORS v MACQUARIE EQUITIES LTD (ACN 002 574 923)
[2005] SASC 342
Magistrates Appeal: Civil

BESANKO J. This is an appeal pursuant to s 40 of the Magistrates Court Act 1991 against orders made by a magistrate in an action in the Magistrates Court. The first and second appellants, Li-Sien Rebekah Neoh and Sim Hee Neoh, were the first and second plaintiffs in the action and the third appellant, Sick Ching Neoh, was the third party in the action. The respondent, Macquarie Equities Limited (ACN 002 574 923), was the defendant in the action. I will continue to refer to the parties by reference to their status before the magistrate. The orders challenged are that the plaintiffs’ claim against the defendant be dismissed and that the third party’s claim be dismissed. The effect of the second order is unclear. The defendant issued third party proceedings against the third party, and the third party filed a defence which, among other things, seemed to raise a counterclaim against the defendant. The effect of the magistrate’s order is to dismiss the third party claim including the counterclaim. It was not suggested on the appeal that if the judge was right to dismiss the plaintiffs’ claim then some order other than that made by the magistrate should be made on the third party proceedings. As I have reached the conclusion that the magistrate was right to dismiss the plaintiffs’ claim it is unnecessary for me to give separate consideration to the third party proceedings.
The finding of fact made by the judge
The plaintiffs claimed damages of $18,801 against the defendant for breach of contract and, in the alternative, for breach of a fiduciary duty or breach of a duty of care. The defendant denied liability and issued a third party claim against the third party seeking an indemnity against the plaintiffs’ claim should it be held liable to the plaintiffs. The third party denied liability to indemnify the defendant and, as I have said, sought to raise a counterclaim. The plaintiffs and the third party were represented by the same counsel at trial and on the appeal.
The first plaintiff is the daughter of the second plaintiff and the third party. The first plaintiff is married and she commenced working as a medical practitioner in Whyalla in approximately mid-2000. At that time she had one child. A second child was born in early 2001 and the first plaintiff returned to work about six weeks after the birth of that child. On occasions during 2000 and 2001, the third party stayed in Whyalla to care for the first plaintiff’s children while she worked. The first plaintiff received a good income and before 19 September 2001 was the beneficial owner of a number of shares including 1200 CSR shares. However, she had little interest in trading on the Stock Exchange and the magistrate said that he doubted that the first plaintiff was aware of the details of her shareholdings and she left those matters to the third party. The magistrate said that he was confident that the first plaintiff did not instigate the action and had little interest in it. The second plaintiff is married to the third party and he is a retired scientist. Before 19 September 2001 the second plaintiff was the beneficial owner of a number of shares including 1200 CSR shares and 300 ANZ shares. Like the first plaintiff, the second plaintiff had little interest in trading on the Stock Exchange and the magistrate said that he doubted the second plaintiff was aware of the details of his shareholdings and he left those matters to the third party. The magistrate said he was confident that the second plaintiff did not instigate the action and had little interest in it.
The third party is a retired physiotherapist and after her retirement she developed an interest in the stock market. Initially, the third party traded for the second plaintiff and herself. After a time, as her interest and experience grew, the third party also traded for the Neoh Family Superannuation Fund, of which the plaintiffs and the third party were trustees, and for the first plaintiff.
The third party also traded in shares and derivatives for others. She traded in shares and derivatives for the Marshall Superannuation Fund, which was a superannuation fund established by Mr and Mrs Marshall, who were longstanding friends of the second plaintiff and the third party.
The third party had a computer, which not only allowed her to have access to the Stock Exchange internet site or a particular stockbroker’s internet site, but it was programmed to allow her to watch the stock market in real time and to see the trades as they occurred.
In 2000, the third party began to trade for the following persons:
1.Dr Lin Siaw Liaw, who was a medical practitioner in the practice of which the first plaintiff was a member. The third party traded for the Liaw Superannuation Fund and Dr Liaw bought her a laptop computer so that she could follow the stock market while in Whyalla.
2.Dr James Kia Song Heng, who was an anaesthetist at the Whyalla Hospital. Initially, Dr Heng provided the money for the third party to trade through the Neoh Superannuation Fund, but as the trades proved profitable, Dr Heng allowed the third party to trade on behalf of the Heng Superannuation Fund. It seems the third party also commenced trading for Dr Heng’s wife, Sally.
In the early stages, the third party traded in shares, but after a time she moved to trading in derivatives. A derivative was described by the magistrate as follows:
A derivative is a financial instrument that derives its value from an underlying instrument such as a share. An option is a contract between two parties giving the buyer the right but not the obligation, to buy or sell the underlying asset at a particular price on or before a particular date. A call option is a contract which gives the holder the right, but not the obligation to buy the share at the exercise price at or before an expiry date. A put option gives the holder the right, but not the obligation to sell the underlying asset at the exercise price.
In 2001 the third party traded for the most part in put options, although on occasions she also traded in call options. She traded often and the trades involved large sums of money.
Until early 2001, the third party traded through the stockbroking firm, Dicksons. She wished to reduce the commission she paid and so she decided to engage the defendant as her stockbroker. The person she dealt with in March 2001 was Mr Brenton Howard who was a strategic financial planner employed by the defendant. His role was to provide stock market advice to the defendant’s clients.
The magistrate found that the third party told Mr Howard that she was trading on behalf of others as well as herself. The other persons were individuals of “high net worth”. She proposed doing a lot of transactions involving “quite sizeable amounts” and she intended to make “all of her own decisions … (with) … either little or no advice”. Mr Howard agreed that the defendant would charge a reduced commission.
The third party also told Mr Howard that she had been predominantly trading in options and had been “using third party security on the different accounts and would like to continue that same method by signing lodgement forms to lodge security on different accounts”. Mr Howard told the third party that that would be acceptable, but that the defendant would require signed authorities allowing her to act as agents for others. In due course the relevant authorities were signed.
On 7 March 2001 the Neoh Family Superannuation Fund opened an account with the defendant and on 5 April 2001 the plaintiffs and the third party opened individual accounts with the defendant. The magistrate said that he assumed accounts were also opened by the Marshall Superannuation Fund and the Liaw Superannuation Fund, but he said that he could find no documentary evidence to establish that as a fact.
On 10 June 2001, Dr Heng and Ms Sally Heng signed an authority for the third party to deal on the Heng Superannuation Fund account. On 28 June 2001, Ms Sally Heng signed an authority for the third party to transfer funds from her cash management account to any of the following accounts: the third party’s account, the Neoh Family Superannuation Fund, the Liaw Superannuation Fund or the Marshall Superannuation Fund, to cover option margins, a concept I will explain in a moment. On 10 July 2001, Dr Heng and Ms Sally Heng signed an authority for the third party to transfer funds from the Heng cash management account to any of the following accounts: the third party’s accounts, the Neoh Family Superannuation Fund, the Liaw Superannuation Fund, the Marshall Superannuation Fund or Ms Heng’s account, to cover margins.
The third party’s initial trading through the defendant was profitable and she carried out several trades a day on the various accounts. As I said earlier, for the most part she was trading in put options but on occasions she engaged in trading in call options.
The third party traded profitably on behalf of the various entities during the period April to June 2001. She spoke to Mr Howard several times a day when she made her trades and demanded instant action. Through her computer the third party was able to watch her trades going through the stock market. The magistrate found that the third party was trading on these various accounts as if they were her own. While the magistrate said that he was not suggesting impropriety on the part of the third party, as subsequent events showed she failed to consider what was in the best interests of those for whom she was trading. Some open trades carried out by the third party required collateral security and this created difficulties on those occasions when the third party was in Whyalla caring for her grandchildren.
The magistrate said that there was an agreement between the defendant and various account holders although he did not identify the particular account holders. The schedule to the agreement contained the following statements:
Effect of ‘Leverage’ or ‘Geering’
Transactions in all ASX Derivative Products carry a degree of risk. The initial outlay of capital may be small relative to the total contract value so that transactions are “leveraged” or “geared”. A relatively small market movement may have a proportionately larger impact on the value of the contract. This may work against you as well as for you. You may sustain a total loss of margin funds deposited with your broker in relation to your positions.
If the market moves against your position or margin levels are increased, you may be called upon to pay substantial additional funds on short notice to maintain your position, or upon settlement of contracts. If you fail to comply with a request from your broker for additional funds within the time prescribed, your broker may close out your position and you will be liable to your broker for any loss that might result.
The terms “Closing-out” and a “Margin” were defined in the agreement as follows:
means in relation to a Contract, the act of entering into arrangements to reverse the effect of that Contract including, without limitation, the entry into an opposite Contract.
means cash or securities lodged by the client with either OCH (Options Clearing House) or Macquarie as security for the contingent obligations of the client which arise from dealing in Contracts.
The magistrate found that at times the only collateral security the third party could provide was shares, and, at times, that was third party security. In other words, shares owned by one of the third party’s clients would be used to secure the liabilities of another client. In the normal course, the beneficial owner of the shares was required to sign a document entitled “Notice of Lodgement/Withdrawal of Securities As Collateral”. I will refer to this document as a lodgement form. The third party had been given authority to sign lodgement forms by those persons for whom she traded. Initially the third party signed such lodgement forms after they had been completed, but it soon became a nuisance for her when in Adelaide and impossible when she was in Whyalla. The solution was for the third party to sign blank lodgement forms which she did. These could then be completed by the defendant when necessary and lodged with the Options Clearing House thereby providing the necessary collateral security. The security was only necessary when the third party’s trades were vulnerable. The third party instructed the defendant to fill in the detail on the lodgement forms to transfer shares as collateral security for the third party’s open and exposed trades. The magistrate said that in most cases no harm was done because when the contract was closed out, the profit or loss was crystallised and the shares were taken off the register of security for that trade. The shares, by then unencumbered, would be held, sold or used as security for other open option trades where security might be required.
The magistrate found that the signed lodgement forms were probably kept by Mr Howard’s assistant, Ms Debby Saunders, whose responsibility it was to attend to the third party’s trading. On the third party’s instructions to Mr Howard, Ms Saunders would complete the blank, but signed, lodgement forms and send the forms to the Options Clearing House. I pause at this point to note that the magistrate said that his finding that the third party signed blank lodgement forms was of no relevance other than with respect to the assessment of the credit of the third party, Mr Howard and Ms Saunders.
At the beginning of July 2001, the relationship between the third party and the defendant turned sour. She had open positions on her trades and the market moved against her open positions. There was a need for security. On 5 July 2001 the defendant asked the third party to pay the sum of $250,000 to cover her various margins for that day. At about 1.00 pm the third party took $200,000 to the defendant and a form to transfer some stock from Barton Securities to cover the balance of $50,000. The magistrate was not able to make a finding as to the identity of the person who was the beneficial owner of that stock. The cheque was not met on presentation and the defendant could not contact the third party that afternoon. On the following Monday, there was a discussion between the third party and Mr Howard about the cheque. The magistrate notes that on 10 July 2001, Dr Heng and his wife signed an authority for the third party to transfer monies from their cash management account to various other accounts. There were several conversations between the third party and Mr Howard during the week of 8 July 2001. It is not necessary for me to relate the details. It is sufficient to note that in this period the defendant was insisting on security in relation to the third party’s open positions, that there was a breakdown in trust between the third party and the defendant, and that the third party had decided she would instruct another stockbroker.
On 19 July 2001 the third party signed a request to the defendant to transfer any security provided by the Marshall Superannuation Fund, the first plaintiff and the second plaintiff for the Neoh Family Superannuation Fund to the third party’s account. On the same day, the third party signed a bundle of blank lodgement forms to have the shares held by the Marshall Superannuation Fund, the first plaintiff and the second plaintiff as security on her personal account. It is implicit in the magistrate’s findings as to what later occurred on or about 30 July 2001 that the third party countermanded the written instruction of 19 July 2001 in relation to the first plaintiff’s CSR shares and the second plaintiff’s CSR and ANZ shares.
The third party continued to trade during July, August and into September 2001. She was gradually closing out the trades on behalf of the Heng Superannuation Fund in order to minimise losses and she was trying to trade the various other accounts she controlled out of their vulnerable positions.
The defendant’s case before the magistrate was that on 30 July 2001, the third party authorised it to use the shares of the first plaintiff (1200 CSR shares) and the shares of the second plaintiff (1200 CSR shares and 300 ANZ shares) (together referred to as “the shares”) as security for the open trades conducted on behalf of the Heng Superannuation Fund.
The third party’s case is that this was done without her authority by the defendant using the blank but signed lodgement forms that she had signed some time earlier.
On 13 September 2001, the third party contacted Mr Howard and asked him to close out the open trades on behalf of the Heng Superannuation Fund account, which at that time was in debit. On 14 September 2001, after the trades on behalf of the Heng Superannuation Fund had been closed out, the account was in debit in the amount of $51,002.64. Eventually, after a number of discussions, Dr Heng agreed to pay half and the third party agreed to pay the other half. Mr Howard said that the third party instructed him to sell the shares being held as security and that was subsequently done realising an amount of $18,831. The third party paid the balance of $6,670.32 by a cheque drawn on the first plaintiff’s account and Dr Heng paid his half share.
The plaintiffs’ case was that the proceeds of the sale of the shares should have been transferred to them and not used to discharge a debt of the Heng Superannuation Fund. The plaintiffs’ case was that the defendant did not have the authority to apply the proceeds in that way.
In about September 2001, the third party’s accounts and those for whom she traded were closed and transferred to another broker. About one year later, the first plaintiff wrote to Mr Howard complaining about the sale of the shares and asserting that no authority had been given to use the shares as security for the trading positions of the Heng Superannuation Fund. The magistrate found that this letter was written by the third party and that she had arranged for the first plaintiff to sign it. Further correspondence ensued, but it is unnecessary for me to relate the details.

The magistrate found that the third party had authorised the use of the shares as collateral security on the Heng Superannuation account, and that she had authorised the subsequent sale of the shares.
In summary, the critical findings made by the magistrate were first, the plaintiffs authorised the third party to trade on their behalf, which included the authority to sell shares of which they were the beneficial owners and the lodging of such shares as collateral on other accounts. Secondly, the third party authorised the defendant to transfer the shares as third party collateral in relation to the liabilities of the Heng Superannuation Fund Account. Thirdly, the third party agreed to pay half the loss incurred on the account for the Heng Superannuation Fund. Fourthly, the third party authorised the sale of the shares and the use of the proceeds to pay that debt and paid the shortfall after that had been done by a cheque drawn on the first plaintiff’s account.
Issues on appeal
The plaintiffs challenge certain findings of fact made and conclusions reached by the magistrate. Before discussing these challenges in detail, I will set out in summary form the findings and conclusions which I understand the plaintiffs accept and those which they challenge.
First, the plaintiffs accept that the third party had their authority to direct that the shares be used as collateral security in relation to the liabilities of the Heng Superannuation Fund.
Secondly, the three lodgement forms are each dated (in terms of the date appearing near the signature) 30 July 2001. The third party signed each form. The plaintiffs do not challenge these findings.
Thirdly, the third party signed the lodgement forms some time before 30 July 2001. It is unclear precisely when the lodgement forms were signed. The lodgement forms were blank when they were signed by the third party in the sense that the information to be included in the forms had not been included. That information was included in the lodgement forms by Ms Debby Saunders at Mr Howard’s direction on or about 30 July 2001. The plaintiffs do not challenge these findings.
Fourthly, the information was included in the lodgement forms by the defendant a short time after the third party had spoken to Mr Howard and given him instructions that the shares were to be used as collateral security in relation to the liabilities of the Heng Superannuation Fund. The plaintiffs challenge this finding and I will come to the particular grounds of that challenge in a moment. The plaintiffs put an alternative submission and that was that even if the finding was correct, the defendant’s defence to the plaintiffs’ claim should have failed because it was required to, but did not, have an instruction in writing from the third party to lodge the shares as collateral security. It is convenient to deal with that submission at this point. The plaintiffs referred to clause 7 of the Option and Warrant Trading Terms which relevantly provides:
Every notice or other communication of any nature whatsoever required to be given, served or made under or arising from this Agreement:
1. must be in writing in order to be valid;
There are a number of answers to this submission. First, it is not established by the evidence that clause 7 applied to the transaction involving the plaintiffs’ shares. It appears that the plaintiffs had share trading accounts rather than option trading accounts and, in those circumstances, clause 7 would not apply. Secondly, even if the clause did apply, it has not been established that the third party’s instructions that the plaintiffs’ shares be used as collateral security in relation to the liabilities of the Heng Superannuation Fund is a “notice or other communication … required to be given, served or made under or arising from” the agreement, and in that respect, the plaintiffs did not identify a particular clause in the Agreement. Thirdly, it is strongly arguable that in any event the communication is in writing because it does not seem to me to be necessary for the writing to be the writing of the person communicating the information. Finally, although I do not need to decide the point on this basis, it is at least arguable that by a course of conduct there has been a waiver of compliance with the clause in the sense of a variation of the agreement or an estoppel (The Commonwealth v Verwayen (1990) 170 CLR 394 per Mason CJ at 406 – 407 per Brennan J at 424 – 428).
It is also convenient at this point to deal with another legal point raised by the plaintiffs on the appeal. The magistrate does not deal with the point and it is not raised in the notice of appeal. As I understand it, the plaintiffs submit that even if all of the magistrate’s conclusions of fact are correct, the transaction whereby the shares became collateral security for the liabilities of the Heng Superannuation Fund was illegal and unenforceable. It is said that it was illegal for the trustees of a superannuation fund to borrow money and that the lodging of the shares as collateral security amounted to the borrowing of money from the beneficial owners of the shares. The plaintiffs referred to s 67 of the Superannuation Industry (Supervision) Act 1993. The submission was not developed in any detail before me. I would reject the submission. Not only is it being raised at a very late stage but, more significantly, I agree the defendant’s response to the submission that there is insufficient evidence to determine whether the transaction falls within the terms of the section.
Having dealt with these two points, I turn to consider the plaintiffs’ main submission on the appeal which was that the magistrate erred in accepting Mr Howard’s evidence that the third party contacted him and authorised him to use the shares as collateral security in relation to the liabilities of the Heng Superannuation Fund. The plaintiffs’ counsel accepts that in the ordinary case it is very difficult to upset a finding by a trial judge to prefer one witness over another, but submits that in this case there are circumstances which mean the magistrate erred in accepting Mr Howard’s evidence. The powers and functions of an appeal court when considering a challenge to a finding of fact made by a trial judge were considered by the High Court in Fox v Percy (2003) 214 CLR 118. Gleeson CJ, Gummow and Kirby JJ emphasised the need for the appellate court to conduct a real review and not be deterred from doing so by a trial judge’s ritual incantation about witness credibility. Their Honours identified the dangers of relying on the demeanour of a witness alone. Nevertheless, they affirmed the importance of an appeal court recognising the advantages enjoyed by the trial judge and referred to previous decisions of the Court in Jones v Hyde (1989) 63 ALJR 349 at 351 – 352, Abalos v Australian Postal Commission (1990) 171 CLR 167 at 179 and Devries v Australian National Railways Commission (1993) 177 CLR 472 (at 127; see also McHugh J at 147). A trial court’s assessment of a witness may be set aside if incontrovertible facts or uncontested testimony demonstrate that the trial judge’s conclusions are wrong and the cases show that something less than this – glaring improbability or a conclusion contrary to compelling inferences – will also be sufficient to warrant appellate intervention.
The plaintiffs submit that the magistrate should not have accepted the evidence of Mr Howard that the third party gave instructions to lodge the shares as collateral security in relation to the liabilities of the Heng Superannuation Fund, for a number of reasons. First, Mr Howard’s evidence was that the defendant’s usual practice was to require written instructions to lodge collateral security and ordinarily that was not done by completing blank lodgement forms which had been signed some time previously. Mr Howard gave evidence that blank lodgement forms were not used in the case of the shares, and although he said that he could not remember the third party signing the completed forms, the effect of his evidence was that that was what must have occurred. It was said by the plaintiffs that that was how the defendant pleaded its case and how it conducted its case in terms of its cross-examination of the third party. It was said that the magistrate found that blank signed lodgement forms were used in the case of the shares and that in those circumstances he should have rejected Mr Howard’s evidence. Furthermore, it was said that he erred in rejecting the evidence of the third party because she had given evidence that she signed a number of blank lodgement forms and did not sign completed lodgement forms in relation to the shares.
These are arguments of substance to be put and considered carefully at the trial but they are not so compelling as to lead to the conclusion on the appeal that the magistrate’s findings should be set aside. I have read Mr Howard’s evidence carefully. He was in the witness box for a considerable period of time. Leaving aside his evidence about the completion of the lodgement forms in relation to the shares, Mr Howard gave evidence on a number of matters which was by no means implausible, and the magistrate was entitled to accept that he was a witness of truth and to accept his evidence on a number of matters including his evidence as to the instructions he was given by the third party. Furthermore, Mr Howard acknowledged that the third party may on occasion have signed blank lodgement forms.
On the other hand, the magistrate was entitled to, and did, reject the evidence of the third party on a number of matters. In considering whether the third party had signed blank lodgement forms, he said he was not prepared to accept the third party’s evidence “unless corroborated”. The magistrate rejected the third party’s evidence that she did not know that the shares had been used as collateral security on the Heng Superannuation Fund and found that in fact she had authorised that to occur. The magistrate rejected the third party’s evidence that on 19 September 2001 she spoke to Mr Howard about how the shares had been used as collateral security in relation to the Heng Superannuation Fund and that Mr Howard would not discuss how that occurred. He said he did believe the third party in relation to those matters.
There were other facts which supported the magistrate’s conclusion that the third party authorised the use of the shares as collateral security for the Heng Superannuation Fund. First, the magistrate found that the third party knew that the shares had been transferred by way of collateral security because she was notified through the Clearing House Electronic Subregister System or CHESS. The third party followed the market and her trades carefully and I see no reason to interfere with this finding. Secondly, the magistrate found that the third party authorised Mr Howard to sell the shares on 19 September 2001 and indeed, she accepted that she had given him authority to sell the shares. Having regard to the discussions which were taking place at that time concerning the need to meet the liabilities of the Heng Superannuation Fund, the magistrate was entitled to reject any suggestion that the third party gave such authority in the expectation that the proceeds would be paid to the plaintiffs. It is also to be noted that the third party arranged to pay the shortfall of $6,670.32 by way of a cheque drawn on the first plaintiff’s account. Thirdly, having considered the evidence of the communications and correspondence which followed the sale of the shares, I think the magistrate was correct to find that it was consistent with the defendant’s case that the third party had the plaintiffs’ authority to act on their behalf and consistent with its case that the third party authorised the sale of the shares.
The plaintiffs made two further submissions in support of their general submission that the magistrate erred in finding that the third party authorised the use of the shares as collateral security in relation to the liabilities of the Heng Superannuation Fund. First, it was submitted that the absence of a written document was a strong indicator that no instructions had been given orally in view of Mr Howard’s evidence that instructions were usually given in writing and the fact that shortly prior to the alleged oral instruction, the third party had given a written instruction about the use of security, namely, the letter dated 19 July 2005. The answer to this submission is that Mr Howard gave evidence that the lodgement form itself was sufficient writing and the fact that the written instruction from the third party of 19 July 2001 was a matter to be weighed in the balance in considering the appropriate finding, but of itself it could not be decisive. Secondly, it was said that the evidence of Ms Saunders was inconsistent with Mr Howard’s evidence and the fact that the plaintiffs were required to call her should in some way reflect adversely on Mr Howard’s evidence. There is no substance in the second point and, as to the first point, I have read Ms Saunders’ evidence carefully and I do not think it is inconsistent with Mr Howard’s evidence.
Mr Howard’s evidence that he received instructions from the third party to use the shares as collateral security in relation to the liabilities of the Heng Superannuation Fund is not contrary to incontrovertible facts or uncontested testimony. Nor is it glaringly improbable or contrary to compelling inferences.
I reject the plaintiffs’ challenge to the findings of fact made by the magistrate.
Conclusion
For these reasons I would dismiss the appeal.