Foshan Nanhai Branch of Industrial and Commercial Bank of China Ltd v. Foshan Ruifeng Petroleum and Chemical Fuel Co Ltd and Others

HCMP 2378/2014

[2019] HKCFI 708

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2378 OF 2014

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D E C I S I O N

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Background

1.These have been unnecessarily protracted proceedings for registration of two Mainland judgments under the Mainland Judgments (Reciprocal Enforcement) Ordinance, Cap 597 (“Ordinance”).

2.On 19 June 2012, the Applicant, which is stated as the Foshan Nanhai Branch of the ICBC Bank Limited, obtained a main judgment against 9 Defendants from the Foshan Intermediate Court on the Mainland, which main judgment was amended by a corrigendum dated 22 August 2012 (the main judgment and the corrigendum are together referred to as “Mainland Judgment”).  On 24 September 2014, the Applicant made an ex parte application for registration of the Mainland Judgment under section 5 of the Ordinance, and the Mainland Judgment was recorded as registered, by Order of the Master made on 23 October 2014 and sealed on 17 February 2015 (“Order”).  On 22 April 2015, notice of registration of the Mainland Judgment by the Order was issued to the defendants, who are now named as the 9 Respondents in these proceedings. 

3.On 20 May 2015, the 4^th, 5^th and 9^th Respondents applied by summons to set aside the registration of the Mainland Judgment (“Summons”).  (The 5^th Respondent has not pursued the application, having been put into liquidation.) Directions for the filing of evidence and for adjournment of the substantive arguments on the setting aside were given by the Master on 9 June 2015.  The first round of evidence had been filed in May, July and September 2015, and there were no developments until a Notice of Intention to Proceed was filed on 13 October 2016 by the Applicant.  Further directions were made by the Court on 9 May 2017. 

4.The first hearing for substantive argument on the Summons took place on 12 December 2017, when leave was granted to the parties to file further expert evidence on the issue raised by the Respondents, regarding the standing and status of the Applicant to sue.  An extended timetable (of 90 days to each side) was allowed for the parties to file the evidence.

5.Extensive expert evidence was filed, and the adjourned hearing of the Summons only came before the Court on 15 November 2018.  As this Court indicated in the course of the hearing, the delay in the disposal of what should be a straightforward application for registration or setting aside of the registration of the Mainland Judgment under the Ordinance was totally unjustified.  If any party applying to the Court for relief has no intention to further pursue the application, such application should be withdrawn.  If any application is left languishing without progress post-CJR, a respondent should either take the initiative to proceed, or otherwise apply for the application to be dismissed.

6.By the time of the hearing on 15 November 2018, 6 expert reports on PRC law have been filed and served by each side.  However, despite the lapse of nearly 42 months from the issue of the Summons, which should have been more than ample time for both parties to properly consider and prepare their evidence for the disposal of the Summons, none of the expert reports contain the declaration required by Order 38 rule 37C RHC.  This rule states that an expert report is not admissible in evidence unless the report contains a declaration by the expert witness that he has read the code of conduct for experts, that he understands his duty to the Court, and that he has complied with and will continue to comply with that duty.  In the case of The Joint & Several Liquidators of China Medical Technologies, Inc.v KPMG HCCW 435/2012, 24 February 2016 and Companies A, B, C v Companies D, E, F HCCT 31/2018, 3 October 2018, expert reports were excluded from the evidence for absence of the declaration of the experts.

7.Since no explanation could be offered by the parties as to why Order 38 rule 37C was not complied with, this Court ruled on 15 November 2018 that all the expert reports produced by the parties were inadmissible as evidence, and the costs of their preparation and filing were disallowed.

Does the Applicant have locus?

8.The 4^th and 9^th Respondents in this case (“Respondents”) claim that as these proceedings were instituted in the name of the Foshan Nanhai Branch (“Branch”) of the ICBC Bank Limited (“Bank”), this is fatal on the authority of the Court of Appeal decision in Bank of Credit and Commerce International (Overseas) Limited (In Liquidation) v Bank of Credit and Commerce International (Overseas) Limited - Macau Branch (In Liquidation) [1997] 1 HKLRD 304 (“BCCI Decision”), which is binding on this Court.  This action is not properly constituted and the Applicant has no standing to commence and carry on these proceedings. 

9.It is pertinent that the Respondents do not dispute that Mainland branches of banks can sue and be sued in Mainland courts.  The Respondents claim that the PRC counsel of both the Applicant and the Respondents are in fact in agreement on this (paragraph 3.4 (1) of Counsel’s skeleton submissions for the Respondents).  They claim that irrespective of the position of PRC law, however, the Court of Appeal in Hong Kong made it clear in the BCCI Decision that the branch of a bank is not a legal person who can sue or be sued in Hong Kong, and that this rule should be applied to this case for the Court to rule that as the Branch has no capacity to commence these proceedings, the registration of the Mainland Judgments should be set aside under section 18 (1) (j) of the Ordinance, on the ground that it would be contrary to public policy to enforce a judgment registered by a party which has no standing to sue in the first place.

10.Section 18 of the Ordinance sets out the grounds on which a party may apply for registration of a Mainland judgment to be set aside.  So far as is relevant to this case, registration of the judgment “shall be set aside” if the Court is satisfied that the judgment: is not a Mainland judgment which satisfies the requirements set out in section 5 (2) (a) to (e) of the Ordinance; or the judgment has been wholly satisfied; or the enforcement of the judgment is contrary to public policy.

11.On the part of the Applicant, it maintains that in determining whether the Branch had capacity to sue in Hong Kong at the time of commencement of these proceedings, the relevant law to be considered should be the law of the PRC, where the Bank and the Branch were constituted/created, and that under PRC law, the Branch has the capacity to sue.  This is the approach consistently adopted by the courts in Hong Kong (citing by way of example 佛山市宏達發展公司清算組 v East Legend Investment Limited HCA 581/2012, 7 June 2007, 惠陽市新墟合興制衣廠 v Elbex Video (Hong Kong) Limited HCA 1950/2012, 23 June 2015 (CFI) and HCMP 2432/2015, 5 November 2015 (CA), Lazard Brothers & Co v Midland Bank Limited [1933] AC 239, Arab Monetary Fund V Hashim & Ors [1991] 2 AC 114, and relying on para 7-017 of Dicey, Morris & Collins, The Conflicts of Law, 15^th edition, Vol 1).

12.The Applicant emphasized that the mere fact of the Mainland Court accepting the case and pronouncing the Mainland Judgments in favour of the Branch is evidence of the Mainland Court’s acceptance of the status and capacity of the Applicant to sue under PRC law.

13.The only authority relied upon by the Respondents is the BCCI Decision. However, that decision and the statements made by the Court in the BCCI Decision must be read in their proper context, and in the light of the particular and unusual circumstances of that case.

14.In essence, the BCCI Decision relates to an interpleader action, when competing claims were made by the liquidators of the Bank of Credit and Commerce International (Overseas) Limited (“BCCI”) on the one hand, and the liquidators of the Macau branch of BCCI on the other hand, to funds placed on deposit by the Macau branch with the Bank of New York in Hong Kong.  At first instance before Sears J, it was made clear in the judgment of 30 October 1996 (“Sears Judgment”) that the issue for determination by the court was “to whom does the Bank of New York pay the money which it has been holding”, ie whether ownership of the money vested in BCCI, or the Macau branch of BCCI.  It was in deciding that issue that the Court considered the claims which were made by the Macau branch.  It was also in this context that the judge (and thereafter the Court of Appeal) made the statements of general principle that “branches” are part and parcel of the bank (paragraph 5 of the Sears Judgment), and considered whether such branches of a bank can be treated as “separate entities” (paragraphs 6 to 8 of the Sears Judgment), to enable the Macau branch to assert claims of ownership to the money placed on deposit. 

15.In accordance with the general principle that branches are part and parcel of the bank, and that the head office and branches constitute for general purposes only one legal entity, the judge found that as at the date when the deposits were placed by the Macau branch of BCCI with the Bank of New York, the money belonged to BCCI, the obligation to repay was owed to BCCI, ownership of the funds and the debt was always with BCCI, and that the Macau branch of BCCI was not entitled to the money.

16.In deciding the proper law to apply, which the judge found to be Hong Kong law, he was deciding the law to apply to the transaction in question between the Bank of New York (the Hong Kong branch of which received the deposit) and the Macau branch of BCCI.  In this context, the judge considered (in paragraph 9 of the Sears Judgment) the arguments made on behalf of the Macau branch, that it was entitled to the money because under the laws of Macau where it was established, it was entitled to recover assets from outside Macau. At paragraph 10, the judge stated:

“… First of all, the forum in which this dispute is taking place is Hong Kong, therefore the law which I must apply in trying the case is Hong Kong law. The issue that has to be decided is to whom does the Bank of New York pay the money. The Bank of New York, albeit an American bank, is a branch in Hong Kong and the deposit was made on the express provision that Hong Kong law applies. That sort of provision is found when payments are made into local branches of foreign banks. Therefore there can be no doubt at all that the law which is to be applied in so far as the problem I have to resolve is Hong Kong law. What the Macau legislature do is a matter for themselves. Their law does not extend to this court. The issue, on its face appears to be between the plaintiff and the defendant, but the real issue is to whom does the Bank of New York have a legal obligation to repay the money.”

17.It is also clear from paragraph 12 of the Sears Judgment that when the court stated that Macanese law had no part to play, it was confined to the issues which the judge had to deal with on the facts in dispute, namely, “to decide the liability of the Bank of New York”.

18.The statements made by Godfrey JA in the BCCI Decision should also be understood in the context of the issues in dispute between the parties in the case, and the findings made in the Sears Judgment against which the appeal was brought.

19.The Court of Appeal referred to the issues, at page 308A-B of the reported judgment: “(1) Are these proceedings properly constituted? (2) Has the Macau liquidator a claim to the funds in court taking priority over the claim of the Cayman liquidators?”

20.On the first issue, Godfrey JA affirmed the general principle that “whatever the position may be in other jurisdictions, in Hong Kong only a legal person can sue or be sued in our courts”.  That cannot be wrong as a matter of general principle.  Dealing with the question of whether the proceedings were properly constituted, Godfrey JA considered that the Macau branch of BCCI was not a legal person, however autonomous it may be.  He accepted that the Macau branch of BCCI can sue and be sued in Macau as if it were a legal entity, but considered that none of this was enough to justify the Court treating the Macau branch of the bank as a separate legal entity capable of suing and being sued in the courts of Hong Kong - as a branch of a bank is nothing more or less than a local arm of the bank, a part of the bank’s business or undertaking.  The conclusion reached was then stated as follows (at p 308G):

“Such ‘branches’ are merely emanations of the company which establishes them; and this will be so however high the degree of autonomy with which the management of the ‘branch’ is entrusted by the company and no matter how the accounts of the ‘branch’ are maintained. So, as it seems to me, any action brought by or against such a company in relation to the activities of a ‘branch’ of that company must be proceedings brought by or against the company itself. But since, obviously, a company cannot sue itself, it follows inexorably that the ‘branch’ cannot find itself on the opposite side of the record in legal proceedings in Hong Kong from the company of which it is a ‘branch’.

For these reasons, I am of the opinion that these proceedings are not, at present, properly constituted.” (emphases added)

21.Read in the proper context, therefore, the BCCI Decision does not set out any general proposition of law, as the Respondents contend, that irrespective of the law governing the constitution or incorporation of the bank or the branch of a bank, the branch is not a legal person under the law of Hong Kong and as such can never sue or be sued in Hong Kong.  On the facts of the particular case, the Court of Appeal simply found that the proceedings in question by the liquidators of BCCI against the liquidators of the Macau branch of BCCI were not properly constituted, as BCCI cannot sue itself.  In the BCCI Decision, Godfrey JA in fact went on to propose that the right course to take was to substitute the Macau liquidator as the named defendant, he being sued as representing the creditors of the Macau branch of BCCI, such that there would be a separate legal person on the opposite side of the record from BCCI itself.

22.In the present case before me, there does not appear to be dispute that the Branch can sue and be sued under PRC law.  The Respondents only claim that this Court is bound by the BCCI Decision to rule that, irrespective of the position under PRC law, the Branch is not a legal person which can sue in Hong Kong, and that on that basis, these proceedings are not properly constituted and/or it would be contrary to public policy to permit the Mainland Judgment to be registered.

23.In my judgment, and as analyzed above, the BCCI Decision does not bind this Court to make the finding contended.  I reject the Respondents’ submissions in that regard, when they accept that under PRC law, the Branch has capacity to sue.  PRC law being the relevant law to consider in deciding whether the Branch had capacity to sue at the commencement of these proceedings (Lazard Brothers & Co v Midland Bank Ltd (1933) AC 289), the Branch as Applicant had such capacity.

Registration of Mainland Judgment under the Ordinance

24.To be registrable under section 5 of the Ordinance, the judgment creditor must prove to the satisfaction of the Court that the requirements set out in section 5 (2) (a) to (e) are satisfied.  Section 5 (2) (c) requires the judgment to be “final and conclusive” as between the parties to the judgment (“Final and Conclusive Requirement”), and section 5 (2) (e) requires the judgment to order “the payment of a sum of money (not being a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty)” (“Sum of Money Requirement”).

25.The orders made by the Mainland court in the Mainland Judgment are as follows:

(一）  佛山市瑞豐石化燃料有限公司應於該民事判決書發生法律效力之日起十日內向中國工商銀行股份有限公司佛山南海支行支付尚欠融資款本金人民幣35,445,153.82元及利息（利息從2011年9月21日至 2011年 12月20日期間以尚欠本金按年利率   8.4%計算；從 2011年12月 21日以尚欠本金按年利  率12.6% 計算至清償欠款本息日止）(“Order 1)”

(二)  中國工商銀行股份有限公司佛山南海支行對佛山市瑞豐石化燃料有限公司、佛山市倍力燃料倉儲有限公司提供的抵押物（即0757三水20111222114 《動產抵押登記書》及0757 南海720111223082 《動產抵押登記書》所載抵押物，詳見該民事判決書的附表2）在上述判決第一項確定的債權範圍內享有優先受償權(“Order 2”);

(三)  佛山市穗豐石化能源有限公司、佛山市倍力燃料倉儲有限公司、華大國際有限公司、瑞豐石化控股有限公司、 歐愛華、李永軍、余允抗、余維強對上述第二項判決所載抵押物不能清償本案欠款本息之外的債務承擔連帶保證責任(“Order 3”)

(四)  駁回中國工商銀行股份有限公司佛山南海支行的其他訴訟請求(“Order 4”);

(五)  各判定債務人如果未按本判決指定的期間履行給付金錢義務，應當依照《中華人民共和國民事訴訟法》第二百二十九條之規定，加倍支付遲延履行期間的債務利息(“Order 5”)；及

(六)   本案案件受理費人民幣219,967.67元,財產保金費5,000元，合共224,967.67元，由佛山市瑞豐石化燃料有限公司承擔。佛山市穂豐石化能源有限公司、佛山市倍力燃料倉儲有限公司、華大國際有限公司、瑞豐石化控股有限公司、歐愛華、李永軍、余允抗、余維強對上述訴訟費用承擔連帶清償責任(“Order 6”).

26.Order 1 is directed at the 1^st Respondent, whereby it was to pay the Branch an outstanding sum of RMB35,445,153.82 and interest.

27.Order 2 states that the Branch has priority in payment as against the security furnished by the 1^st Respondent and the 3^rd Respondent to the Branch (which security was identified in the appendix to the judgment (“Security”)).

28.Order 3 states that in relation to any debt which remains outstanding after realization of the Security, the 2^nd to 9^th Respondents are to bear joint and several liability.

29.Order 4 dismisses other claims made by the Branch.

30.Order 5 states that the 1^st to 9^th Respondents are to pay interest for the period of any delay in enforcement, in the event that they fail to discharge their liability for payment within the period specified in the judgment.

31.Order 6 states that the 1^st to 9^th Respondents are to be jointly and severally liable for the payment of the specified costs and expenses of the proceedings.

32.The Respondents claim that registration of the Mainland Judgment should be set aside under section 18 (1) (a) of the Ordinance, since the part of the Mainland Judgment which affects them does not satisfy the Final and Conclusive Requirement under section 5 (2) (c), nor the Sum of Money Requirement under section 5 (2) (e).

Whether Mainland Judgment orders payment of a sum of money

33.The Respondents claim that apart from Order 1 against the 1^st Respondent, none of the other orders satisfy the requirement of section 5 (2) (e).  They say that Order 2 is merely a declaration stating the Branch’s priority to payment in respect of the Security.  Order 3 simply declares that the Respondents are to be jointly and severally liable with the other respondents for payment of any sum, as yet unquantified, which may remain outstanding after the Security has been realized. 

34.In gist, the Respondents claim that enforcement and recovery proceedings have been ongoing against the 1^st and other Respondents on the Mainland.  Steps have been taken to execute against the assets of the 1^st Respondent which has been liquidated, and such assets include the Security as well as other pledged assets.  Some of the assets have been auctioned, proceeds of sale have been received, and distributed.  In addition, assets of the 6^th and 7^th Respondents have also been sealed and received by the Mainland court, pending auction and realization.  The Respondents claim that they have not been notified of the outstanding amount remaining due, after realization of all the assets seized and sold.  The Respondents further pointed out that as guarantors, there are different applicable limits to the amounts they guaranteed.  Order 3 does not state any certain, definite or even ascertainable sum to be paid by them, whether on the date of registration of the Mainland Judgment, or on any other date. 

35.On behalf of the Branch, reference to and reliance was sought to be made on other extraneous documents, such as a purported “Distribution Proposal” issued by the Mainland court after the date of the Mainland Judgment (in 2013), as to how the assets of the 1^st and 3^rd Respondents should be distributed, and subsequent (unregistered) decisions or reports made by the Mainland court as to enforcement proceedings taken and the proceeds of enforcement received, for the purpose of ascertaining the sum said to be due and payable under the Mainland Judgment. 

36.If it is claimed that these documents are final and conclusive judgments made by a designated court, and which orders the payment of a sum of money, then these documents should be registered to have the effect provided for under the Ordinance.  It is for the creditor to decide what document or order constitutes a judgment to be registrable as an order for the payment of a sum of money under section 5 of the Ordinance.  However, if the Court is not satisfied that the particular document which is sought to be registered is one made by a designated court, is final and conclusive, and which orders the payment of a sum of money, to satisfy the requirements of section 5 of the Ordinance, then the judgment is not registrable, and if wrongly registered, then the registration should be set aside under section 18. 

37.Upon registration, section 14 of the Ordinance provides that the registered judgment shall, for the purpose of execution, be of the same force and effect as if it had been a judgment originally given in the Court of First Instance and entered on the day of registration.  Proceedings may be taken on the judgment upon registration, and the sum for which the judgment is registered shall carry interest.

38.In order to be enforceable as contemplated under the Ordinance, therefore, the judgment sought to be registered should be clear as to a fixed, certain, quantified or at least readily quantifiable sum of money due to be paid by the judgment debtor, for which sum interest is payable from the date of registration, and against which assets of the judgment debtor may be enforced. The judgment debtor should not be uncertain as to its liability under the registered judgment.

39.The purpose of the Ordinance must be to facilitate the recognition and enforcement of Mainland Judgments by a simple and quick process of registration on the basis of a judgment already made by a competent and recognized court.  Registration should be in terms of what is readily apparent on the face of the Mainland judgment, without the necessity of the Hong Kong Court scrutinizing the evidence or documents in the Mainland proceedings, or conducting a mini trial of the evidence as to the correct sum allowed and ordered to be payable by the judgment debtor.  Nor should submissions be necessary as to the amount due.  Registration of a judgment should be on the basis that there can be no more dispute that can be raised as to the amounts due from the judgment debtor, apart from arithmetic calculations under a specified formula.

40.On the admissible evidence before me, and on a plain reading of Orders 1 to 3 of the Mainland Judgment as a whole, I am not satisfied that Order 2 and Order 3 are orders against the Respondents for the payment of a sum of money by the Respondents, to be registrable under section 5 of the Ordinance. 

41.As for Order 4, that is a dismissal of the Branch’s claims, and does not constitute an order for payment of a sum of money against any party. 

42.Order 5 is for payment of “double” interest for delay, and expressly states that such interest is to be paid “in accordance with Article 229 of the PRC Civil Litigation Law” (“Article 229”). 

43.If the Mainland Judgment, as registered, states a certain and ascertained sum of money to be payable, a separate provision or order in the judgment which provides for interest to be paid at a rate specified, or at a rate which can be readily ascertained, may be registered.  Irrespective of whether the interest is punitive in this case, as the Respondents allege, there is no sum of money specified in the Mainland Judgment to be payable by the Respondents, on which any interest can be calculated, for Order 5 to be registrable. 

44.As to whether the double interest payable under Article 229 is penal, there is no admissible evidence before me as to the actual rate payable, and how it is calculated, to show that it can be said to be punitive, or exorbitantly and disproportionately higher than the loss likely to be suffered by the judgment creditor as a result of the default and delay in payment, to be properly regarded as compensatory.  Counsel for the Respondents reply on Hung Fung Enterprises Holdings Ltd v Agricultural Bank of China [2012] 3 HKLRD 679, where the Court of Appeal considered the effect of Article 229, and found that double interest imposed by the Mainland courts under Article 229 is a penalty, the purpose of such charge being to punish or sanction those who have breached a court order.  In that case, the Court of Appeal upheld the decision of the Court at first instance not to enforce the double interest award.

45.In view of my finding that Order 3 is not an order for payment of a sum of money to be registrable, and in view of the Court of Appeal’s decision on the penal nature of Article 229, Order 5 does not satisfy the requirements of section 5(2)(e).

46.For Order 6, this can be construed as an order for the 1^st to 9^th Respondents to jointly and severally pay the specified costs of the proceedings (of RMB 224,967.67).  As it is an order for payment of a sum of money, which has not been shown to be in respect of a fine or other penalty, I fail to see how it is not registrable under section 5 of the Ordinance. 

Whether the Mainland Judgment is final and conclusive

47.To be registrable under section 5 of the Ordinance, a Mainland judgment has to be proved, to the satisfaction of the Court, to be “final and conclusive as between the parties to the judgment” (section 5 (2) (c)). 

48.Section 6 of the Ordinance sets out provisions as to when a Mainland judgment is final and conclusive as between the parties.  The Respondents raise no dispute under section 6 (1), but relies on section 6 (2) which states as follows:

“For the purposes of section 5 (2) (d), a Mainland judgment is deemed, until the contrary is proved, to be enforceable in the Mainland if a certificate is issued by the original court certifying that the judgment is final and enforceable in the Mainland.”

49.Counsel for the Respondents argued that since there is no certificate from any relevant Mainland court as to the enforceability of the Mainland Judgment in this case, the Mainland Judgment is not final and conclusive for registration under section 5.

50.I reject such argument of the Respondents.  The Mainland Judgment is issued by an Intermediate People’s Court (as provided for in section 6(1)(b)). It is not alleged that an appeal had been lodged before expiry of the time for appeal, or that there is an appeal allowed.  Whilst a certificate issued by the original court would deem (until the contrary is proved) such Mainland Judgment to be “enforceable” for the purposes of section 5 (2) (d), which requires a Mainland judgment to be enforceable (in addition to being final and conclusive as between the parties), the absence of such a certificate cannot be evidence that the Mainland Judgment is not final and conclusive, or not enforceable.  The Respondents only rely on the fact that there is no certificate issued by the Mainland court, for its assertion that the Mainland Judgment is not final and conclusive.  Such an argument was already rejected by Lisa Wong J in the case of The Export-Import Bank of China v Taifeng Textile Group Co Ltd HCMP 3012/2015, 3 August 2018.  I agree with the analysis set out by the learned judge at paragraphs 85 to 86 of her judgment, and have nothing further to add.

Whether the Mainland Judgment has been wholly satisfied

51.Despite the assertions made by the Respondents that the enforcement and recovery proceedings on the Mainland are continuing, and that they have no knowledge as to the amount so far recovered from the sale of the assets seized from the 1^st Respondent, there is no assertion that the Mainland Judgment has been wholly satisfied, to warrant the setting aside of the registration in Hong Kong, on that ground specified in section 18 (1) (d). 

Conclusion on whether registration of the Mainland Judgment should be set aside

52.I am not satisfied that by reason of the Branch having no locus to commence proceedings in Hong Kong, registration of the Mainland Judgment should be set aside on the ground that it is contrary to public policy to enforce the Mainland Judgment (pursuant to section 18 (1) (j)). 

53.However, I am satisfied that Order 2, Order 3, Order 4 and Order 5 are not for payment of a sum of money as against the Respondents.  Registration of those Orders as against the Respondents should be set aside. 

54.Under section 12 of the Ordinance, a sum of money payable under a Mainland judgment, when registered, shall be registered for any interest which, by the law of the Mainland, shall become due under the judgment up to the time of registration.  The Order of the Master refers to a principal sum, and interest stated to be calculated up to the date of registration, of HK$15,402,829.47.  Since registration of Order 3 is set aside, the remaining part of the Master’s Order has no meaning or effect against the Respondents. 

55.I make an order nisi that the costs of the application to set aside the registration of the Mainland Judgment should follow the event, and be paid by the Branch as Applicant to the Respondents, with certificate for counsel.

Mr Alfred Liang, instructed by Cheng, Yeung & Co, for the applicant

Mr Wayne Hariman, instructed by Henry Fok & Company, for the 4^th & 9^th respondents