The Joint and Several Trustees of the Property of So Ching Wan v. Assen Ltd (in Liquidation) and Others

HCB 4475/2002

[2019] HKCFI 1491

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 4475 OF 2002

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DECISION

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1.The Joint and Several Trustees of the Property of the Bankrupt, Mr So Ching Wan (the “Trustees”) applied, by Amended Summons filed on 22 November 2018, for the following orders:

“ 1. Each of the Respondents comply with the Order of Mr. Justice Chung made on 7 June 2016 (‘Chung Order’) by answersing on oath all of the questions (the thereto Annex A as attached to the Order of Mr Justice Chung dated 7^thJune 2016 (the ‘Chung Order’)) and producing all of the documents (the Annex B thereto to the Chung Order), and with reference to a Summary shown as Exhibit ACWT-18 in the supporting affirmation of Mr. Alan CW Tang filed herein (‘Summary’), stated in the Chung Order within 14 days of the Order to be made herein;

2.  If any of the Respondents cannot provide answers to any of the questions in Annex A to the Chung Order, and with reference to the Summary, each of these relevant Respondents file an affidavit/affirmation to state the reasons for not being in such a position to comply within 14 days of the Order to be made herein.

3.  If any of the Respondents cannot provide any of the documents in Annex B to the Chung Order, and with reference to the Summary, each of these relevant Respondents file an affidavit/affirmation to state whether any of these documents had ever been in his/her possession, custody or control (including power to procure the same from third parties); and if these had been in his/her possession, custody or control (including power to procure same from third parties) but no longer now, since when they are no longer available and under what circumstances that they became unavailable within 14 days of the Order to be made herein;

4.  Each of the 2^nd, 3^rd and 4^th Respondents attend the court to be examined on oath at such time and place as the court shall direct and that the Trustees be at liberty to examine these Respondents under Section 29 of the Bankruptcy Ordinance (Cap.6) concerning the Bankrupt’s investment in the Company, its assets, liabilities, affairs, books and records and any other relevant matters including the matters and transactions set out in Annex A and Annex B of the Chung Order and with reference to the Summary in paragraph 1 herein.

5.  Either one of the two Trustees or their legal representatives be appointed examiner for the purpose of conducting the said examination.

6.  Penal notice be endorsed to the Order to be made herein.

7.  Such other relief/directions as may be granted by the Court; and

8.  Costs of this application (including the professional time costs of the Trustees on the ‘Panel A’ rates) be paid by the directors of Assen Limited, namely Mr. Cheung Ying Ho, Ms. Cheung Cho Yi Natalie and Ms. Lam Yuk Chun personally on a joint and several basis.”

2.The Trustees have also taken out a summons to seek leave to continue these proceedings against the 1^st respondent on a retrospective basis as the 1^st respondent has been wound up.  (“Leave Summons”)

3.Mr So Ching Wan (the “Discharged Bankrupt”) was adjudicated bankrupt on 19 August 2002.  He has since been discharged from bankruptcy as from 19 August 2010.

4.The Discharged Bankrupt used to be a director and is still a shareholder of Assen Limited, the 1^strespondent.  The 2^nd to 4^th respondents were directors and are still shareholders of the 1^st respondent.

5.On 27 July 2015, the Trustees took out a summons under section 29(1) of the Bankruptcy Ordinance, Cap 6 to direct the 1^st respondentand/or each of the 2^nd and 4^threspondents, being directors of the 1^st respondent, to answer a list of questions and to provide a list of documents primarily to help the Trustees to ascertain the real worth of the Discharged Bankrupt’s shareholding in the 1^st respondent.

6.On 7 June 2016, Chung J made an order that:

“ The 1^st Respondent and/or each of the 2^nd and 4^th Respondents, being directors of the 1^st Respondent, do provide to the Applicant the answer(s) and/or document(s) as set out in the schedules attached to this Order marked as ‘Annex A’ and ‘Annex B’ withina reasonable period (in any event, not more than 21 days from the date of this Order.” (‘Chung J’s Order’)

7.The Trustees take the view that Chung J’s Order has not been complied with by the respondents.  Accordingly, the Trustees took out the present summons on 12 October 2018 which was amended on 22 November2018.  The Trustees were represented by Mr Alan Tang, one of the Trustees in these proceedings.  Mr Tang complained that despite the clear terms of Chung J’s Order, each of the 1^st to the 4^th respondents, after nearly three years, have not yet fully complied with the same.  Mr Tang in paragraph 2 of his Supplemental Skeleton Submissions stated that:

“ Although drafted by the Applicant, paragraph 1 of the Amended Summons was carefully and repeatedly reviewed and amended by Mr. Justice A. Chung. This is clearly an ‘Enforcement Order’. As stated in paragraph 30 of Applicant’s Skeleton filed on 21 May 2019 (‘Tang Skeleton’), the Amended Summons is to seek to enforce compliance by the Respondents with the S29 Order in order to enable the Applicant to perform the 5 specific areas of investigation as set out in the Decision. It is not a ‘new [S29] application’ as stated in paragraph 11 of the Cheung Skeleton.”

8.Mr Wong SC, for the 2^nd to the 4^th respondents submitted that this is a new section 29 application and not an enforcement action.  In any event, the position of the 2^nd to the 4^th respondents is that they have fully complied with Chung J’s Order.

9.I am of the view that it is important to determine the nature of the application first.

NATURE OF APPLICATION

10.Mr Tang relied on Order 45, rule 6(1) of the Rules of High Court, Cap 4A, albeit that the margin note of the Amended Summons cited Order 45, rule 7.  I accept that it is a mere typographical error.  Order 45, rule 6(1) provides:

“ Notwithstanding that a judgment or order requiring a person to do an act specifies a time within which the act is to be done, the Court shall, without prejudice to Order 3, rule 5, have power to make an order requiring the act to be done within another time,being such time after service of that order, or such other time, as may be specified therein.”

11.Mr Tang referred this court to the case of Wah Sun Hong Ltd v Wong Lee Yuk Ping Agnes HCA 874/2015, unreported, 12 August 2016.  DHCJ Wilson Chan (as he then was) at paragraph 17 said:

“ The operation of Order 45, rule 6 has been explained in Re Ho Yuk Wah David (bankrupt) [2015] 2 HKLRD 603, at paragraph 19:-

(1) Order 45, rule 6 enables the court to give the respondent one last chance to comply with its order before the applicant may invoke the penal sanctions available in the court’s armoury.

(2) The burden is on the applicant to prove that an order had been made requiring the respondent to perform an act within a specified time and the respondent failed to do so.

(3) Once that is proved, the burden is then shifted to the respondent to show why he should not be required to comply with the order why he should not be required to comply with the order to perform the act, upon being given a second chance.

(4) The obligation to perform the act required had been determined and made an order of the court. Thus, in considering whether to exercise the discretion under this rule,there is no need for the court to revisit the appropriateness or otherwise of its previous order.

(5)   The question is simply whether in all the circumstances the respondent should be excused from performing the act under its previous order.  As the court’s orders are made to be complied with, such circumstances must be made to be very rare indeed.  A possible example would be impossibility of performance as a result of change of circumstances.”

12.Mr Wong SC submitted that this is clearly not an enforcement application of Chung J’s Order under Order 45, rule 6(1) because the words “comply with the Order of Mr. Justice Chung made on 7 June 2016 (‘Chung Order’)” were specifically deleted by way of amendment.  This, Mr Wong SC submitted, could only mean that the Amended Summons is not about compliance with Chung J’s Order but an entirely new application.  Mr Tang submitted that those words were struck through because Mr JusticeChung considered the same to be unnecessary and the Trustees could simply proceed with what they like to apply.

13.I am of the view that the deletion of the words is not critical in determining whether this is a new application or an enforcement action as contended by Mr Tang.  If the exact same orders were applied so that the respondents herein could be given more time to comply with Chung J’s Order, then it does not matter whether the words were deleted or not.  The application would have been an application under Order 45, rule 6(1).

14.However, Mr Wong SC is right that the Trustees are not applying the exact same orders as Chung J’s Order.  In the present application, the Trustees are seeking to order the respondents to answer on oath all of the questions and produce all of the documents as set out in Chung J’s Order.  Paragraph 2 of the Amended Summons provides that:

“ If any of the Respondents cannot provide answers to any of the questions in Annex A to the Chung Order, and with reference to the Summary, each of these relevant Respondents file an affidavit/affirmation to state the reasons for not being in such a position to comply within 14 days of the Order to be made herein.”

15.In Chung J’s Order there is no requirement that the respondents answer any question on oath.

16.Further, paragraph 4 of the Amended Summons seeks for oral examination of the 2^nd to 4^th respondents under section 29 of the Bankruptcy Ordinance, Cap.6 which again does not form part of Chung J’s Order.

17.I agree with Mr Wong SC that these reliefs go beyond the ambit of Chung J’s Order.  In Wan Sun Hong Ltd v Wong Lee Yuk Ping Agnes (supra), DHCJ Wilson Chan (as he then was) at paragraph 18 said:

“ It is important to note that by this application, the plaintiff simply asks this court to fix another time within which the defendant must comply fully with the FBP Order.”

18.In the circumstances, I am of the view that it is difficult for Mr Tang to maintain that this is simply an application for enforcement of Chung J’s Order.  I agree with Mr Wong SC that this is a new application under section 29 of the Bankruptcy Ordinance, Cap 6.  This court needs to be satisfied that a new section 29 application is justified in view of the new developments since Chung J’s Order and all the evidence before this court at the present stage.

APPLICATION UNDER SECTION 29 OF THE BANKRUPTCY ORDINANCE 

Chung J’s Order and new developments

19.Mr Tang understandably relied heavily on Chung J’s Decision dated 7 June 2016.  However, it is important to note that at paragraph 17 of Chung J’s Decision, it is stated that:

“ Such investigation would help the trustees’ determination of (among other things) whether the suit properties still belong to Assen.”

20.There are two significant developments since Chung J’s Order. First, the 1^st respondent has since been wound up by an order of the court on 2 November 2016 and liquidators were appointed to take over and investigate the affairs of the 1^st respondent.  The 1^st respondent is indeed represented by its liquidators in the present proceedings.

21.Secondly, on 25 August 2016, Kingston Capital Investment Limited (“Kingston”), as mortgagee in possession, sold the suit properties, by auction, to one Ample Sparkle Development Limited, being the highest bidder, at HK$9.2 million.

22.It is of great importance that liquidators were appointed into the 1^st respondent for a considerable period of time.  The liquidators of the 1^strespondent informed this Court that there is no asset identified or realizedin the liquidation of the 1^strespondent.  The liquidators of the 1^st respondentsubmitted that any information or documents to be discovered in the present application would not beneficial to the administration of the estate of the Discharged Bankrupt.

Applicable legal principles

23.The legal principles on disclosure under section 29 of the Bankruptcy Ordinance, Cap 6 are well established and have recently been summarised by Recorder Eugene Fung SC in Re Ho Yuk Wah David (bankrupt) (No 3) [2019] 1 HKLRD 961 (HCB 3819/2011, 18 January 2019). The learned Recorder at paragraph 14 said:

“ The relevant legal principles on the provision of information or documents under s.29 are as follows:

(1) The Court’s power under s.29 of the Bankruptcy Ordinance to order production of information or documents is to be exercised in the same way as an application under the now repealed s.221 of the Companies Ordinance (Cap.32): Re LaiKwok Ying (a bankrupt) (HCB 8750/2007, [2009] HKEC 1300, 7 August 2009) at [5] (Kwan J (as she then was)).

Whether provision of information or documents is reasonably required

(2) The applicant must satisfy the court the essential condition that the provision of information or documents is reasonably required for him to carry out his functions: Hau Po Man Stanley (in bankruptcy) v Joint and Several Trustees [2008] 1 HKC 256 at [21(a)] (Chung J sitting in the Court of Appeal); Joint & Several Liquidators of Kong Wah Holdings Ltd v Grande Holdings Ltd (2006) 9 HKCFAR 766 at [27] (Lord Millett NPJ).

(3) In considering this question, great weight should be given to the views of the applicant, for he is an officer of the court and alone has the necessary knowledge of the problems facing him in understanding the affairs of the estate and his reasons for seeking production of documents in the terms proposed: Kong Wah Holdings Ltd (above) at [27].

Whether respondent is able to provide information or documents

(4) The applicant must also establish a prima facie case that the respondent is able to provide such information or documents:Hau Po Man Stanley (above) at [21(b)].

Balancing exercise

(5) If the above criteria are met, the court must carefully strike a balance between the applicant’s reasonable requirements and the need to avoid making an order which is wholly unreasonable, unnecessary or oppressive to the person concerned. The burden is on the applicant to satisfy the court, after balancing all the relevant factors, there is a proper case for such an order to be made. See Hau Po Man Stanley (above) at [21(c)].

(6)   The applicant may not embark on a ‘fishing expedition’ that ignores costs and proportionality: Re Lee Priscilla Hwang (bankrupt) [2012] 4 HKLRD 581 at §23 (Recorder A Chow SC(as he then was)); Re Lee Siu Fung Siegfried [2017] 1 HKLRD 1155 at [34] (G Lam J).”

24.Applications for oral examination are more oppressive than those for disclosure of documents, and the court should be more cautious when considering such applications.  (Cloverbay Ltd v BCCI Ltd [1991] Ch 90, per Sir Nicolas Browne-Wilkinson VC at 103C–E.)

Analysis

25.Having carefully considered the parties’ submissions, I am of the view that the Amended Summons and the Leave Summons should both be dismissed.

26.First, the 1^st respondent has been wound up.  Liquidators were appointed into the 1^st respondent. The 2^nd to 4^th respondents have ceased to be directors of the 1^strespondent.  The affairs of the 1^st respondent are under the supervision of the liquidators of the 1^st respondent.

27.Upon the winding up of the 1^st respondent, as far as the investigations of its affairs are concerned, the liquidators bear the primary responsibility.  The Discharged Bankrupt is a shareholder.  The Trustees of the Discharged Bankrupt can only exercise the rights of a shareholder of the 1^st respondent.  The duties and powers of a liquidator of a company are not affected by the bankruptcy of any shareholder of the company.

28.I am of the firm view that if the liquidators of the 1^st respondent consider it necessary to make any application for disclosure of documents against the 2^nd to 4^th respondents, they, as officers of the court, will duly take out such an application.  In the present case, the liquidators of the 1^st respondent positively affirm that they do not consider it in the interest of the liquidation to make such an application as the 1^st respondent has duly recovered all its assets and distributed to its creditors.  The liquidators have confirmed on oath that “[t]here is no assets identified or realized in the winding up case of [the Company]…and the amount of assets to be realized in the winding up case of [the Company] up to present is HK$0.”

29.Mr Tang submitted that the 1^st respondent was wound up in suspicious circumstances. I do not think I need to go into whether there are merits in Mr Tang’s submission on this point.  The important point is that there was no objection to the winding up petition.  The Trustees have full knowledge of such petition and did not resist the same.  The winding up order is valid and binding on this Court.  There is nothing for this Court to second guess the findings and professional judgments of the liquidators of the 1^st respondent.

30.Mr Tang further submitted that the liquidators of the 1^strespondent would never carry out any further investigation into the affairsof the 1^strespondent.  Mr Lau of the liquidators of the 1^st respondent rejectedsuch submission.  Mr Lau submitted that the matters raised by Mr Tang had been investigated by the liquidators and they do not find any falsification of accounts and have duly reported the same to the Official Receivers.  I also note that Mr Tang has taken no steps to question the conduct of the liquidators of the 1^st respondent.

31.I am of the view that if any interested parties in the liquidation are dissatisfied with the decisions of the liquidators in relation to investigations,recoveries and/or distributions, the proper procedure is for such interested parties to take out proper application before the Companies Court.  It is not conducive to the orderly administration of liquidation for concurrent investigations to take place.  The underlying theme of Mr Tang’s submissionis that in addition to the liquidators of the 1^strespondent, the Trustees should also be given the right to investigate into the affairs of the 1^st respondent which is now in compulsory liquidation.  I am of the view that such approach is incorrect.  Indeed, if there were four or five bankrupt shareholders in a company, and if Mr Tang’s submission is right, multiple sets of investigationsat huge and overlapping costs would be inevitable.  That, in my view, cannot be right.  This is against the notion of an orderly winding-up process.

32.Hence, on this ground alone, I will dismiss the new application under section 29 of the Bankruptcy Ordinance.

33.Secondly and fundamentally, I accept the liquidators of the 1^st respondent’s evidence and submission that in contrast to the circumstances existed at the time when Mr Justice Chung made his orders,presently, based on the evidence before this Court, there are no assets to be recouped which can enhance the value of the Discharged Bankrupt’s shareholding in the 1^st respondent.

34.The essence of Mr Tang’s submission is that the auction sale resulted in a sale of the assets of the 1^st respondent at gross undervalue.  However, Mr Tang adduced no expert evidence to support his submission that the subject property should be worth about HK$140 million instead of HK$9.2 million.  I accept Mr Wong SC’s submission that Mr Tang’s affirmation evidence is opinion evidence and as such is not admissible as evidence for the purpose of this hearing.

35.Mr Lau of the liquidators of the 1^st respondent submitted that the open auction was supported by a surveyor’s report.  It is also fair to pointout that Mr Tang has been requested to produce expert report to support hisallegation that the auction sale was a sale at undervalue but he failed to do so. Mr Tang explained that he has no financial resources to prepare a valuation to support his allegation which I accept to be true and correct.  However, the position remains that there is no evidence to substantiate the claim of an undervalue sale.

36.In the circumstances, given that there is no evidence to contradict the factual position that the 1^st respondent has no assets and there are no further assets to be recovered, I do not think it is right to invoke section 29 of the Bankruptcy Ordinance to order the respondents to carry out a futile exercise.

37.Thirdly, Mr Wong SC, for the 2^nd to 4^th respondents submitted that the entire order sought by the Trustees is by reference to the 22-page Summary and the Summary is convoluted, incomprehensible, lacking in focus and are more in the nature of Mr Tang’s personal comments.  It would be wrong as a matter of principle and oppressive to make an order under the Amended Summons which requires the respondents to comply by reference to the Summary.

38.It is trite law that any order made by the court must be clear, since grave consequences may follow from any non-compliance with it.  (Spry on Equitable Remedies (9^th ed) at pp 386 – 389.)

39.While I appreciate that Mr Tang tried to assemble his comments and further follow up questions in one document, I am sympathetic with Mr Wong SC’s submission that one does need to go through the Summary very carefully in order to identify what questions to be answered and what further documents to be produced.  The Summary also contains questions and demands that have been answered in earlier correspondence.

40.I agree that the Summary in its current form is susceptible to further disputes and as such it is not appropriate to order the respondents to make disclosure by reference to the Summary. 

41.Fourthly, section 29(1A) of the Bankruptcy Ordinance, Cap 6 provides:

“ The court may require a person referred to in subsection (1), other than the bankrupt, to submit an affidavit to the court containing an account of his dealings with the bankrupt or to produce any documents in his possession or under his control relating to the bankrupt or the bankrupt’s dealings, affairs or property.”

( emphasis added)

42.None of the documents sought under Annex B of Chung J’s Order are concerned with dealings with the Discharged Bankrupt.  They all relate to the internal affairs of the 1^st respondent.  The same applies to the questions as set out in Annex A of Chung J’s Order, save and except question 8 which the 2^nd to 4^th respondents submitted that it has been fully answered.  In the circumstances, I am of the view that paragraphs 2 and 3 of the Amended Summons cannot be granted.

43.To be fair, Mr Tang has made clear that he would seek leave from this court to withdraw the Trustees’ application as set out in paragraph 3 of the Amended Summons.  I duly grant the Trustees the leave to withdraw such application.

44.Fifthly, in the course of oral submissions, Mr Wong SC submitted that the Trustees’ present application is also oppressive in the sense that given the Trustees’ expressed intention to bring contempt proceedings against the 2^nd to 4^th respondents, it is wrong as a matter of principle to require a person suspected of wrongdoing to prove the case against himself on oath prior to proceedings being brought.

45.In Joint & Several Liquidators of Kong Wah Holdings Ltd v Grande Holdings Ltd (2006) 9 HKCFAR 766, Lord Millett NPJ at §30 said:

“ Over the years the courts have laid down general principles governing the balancing exercise which the court is called upon to undertake. They are conveniently set out in the Cloverbay Ltd (Joint Administrators) v Bank of Credit and Commerce International SA [1991] Ch 90 at pp.102–103 per Sir Nicolas Browne-Wilkinson V-C and British & Commonwealth Holdings Plc v Spicer & Oppenheim [1992] Ch 342 at p.372 per Ralph Gibson LJ and at p.392 per Woolf LJ. They can be summarised as follows:

(1) The liquidator must show that the documents are reasonably required to enable him to carry out his functions, not that they are necessary to enable him to do so;

(2) the case for making an order under the section in respect of aformer officer is usually stronger than in respect of a stranger who owes no fiduciary duties to the company and who is not under a statutory duty to assist the liquidator;

(3) there is an element of oppression in requiring a party to provide information which exposes him to potential liability;

(4) an order for oral examination is likely to be more oppressive than an order to produce documents;

(5) it is oppressive to require a person suspected of wrongdoing to prove the case against himself on oath prior to proceedings being brought;

(6) an order is not necessarily oppressive because it is inconvenient for the party subject to it or causes him a lot of work or may make him vulnerable to future claims;

(7) in the light of the summary nature of the procedure and the need for expedition, the court cannot be expected to indulge in fine judgments as to the precise width of the order which should be made; and

(8)   the court must take care not to cut down the width of the ordersought by the liquidator in a way which would risk making it ineffective.”

46.In Cloverbay Ltd (Joint Administrators) v Bank of Credit and Commerce International SA (supra) at p 103G, Sir Nicolas Browne-Wilkinson VC said:

“ But for myself I am unable to accept, in the absence of specific statutory authority, that it is not oppressive to require someone suspected of wrongdoing to prove the case against himself on oathbefore any proceedings are brought. In the exercise of its discretion,the court may consider that the legitimate requirements of the liquidator outweigh such oppression: but it remains oppressive.”

47.As a matter of law, it must be right that it is oppressive to require a person suspected of wrongdoing to prove the case against himself on oath prior to proceedings being brought.  This is particularly the case when the information and documents are not reasonably required for the stated purposes. 

48.Mr Tang submitted that it is normal for the court to make disclosure orders and it is for an affected party to assert the right against self-incrimination if he or she deems it proper to do so.  Whilst that is correct, I am of the view, on the facts of the present case, it is oppressive to require the 2^nd to 4^th respondents to provide information and documents and to commit themselves on oath when the Trustees positively allege that the 2^nd to 4^th respondents have committed the crime of perjury and are in contempt of court.

49.In the absence of tangible and/or potential benefits to the Trustees by engaging in this discovery exercise, I am of the views that, on balance, judicial discretion should be exercised against exposing the 2^nd to 4^th respondents to the risk of having to prove the case against themselves on oath prior to proceedings being brought.

50.The above reasons apply, a fortiori, to the application for oral examination against the 2^nd to 4^th respondents under paragraph 4 of the Amended Summons.

EXERCISE OF DISCRETION

51.In the exercise of my discretion, I also take into account two specific matters.  First, Mr Tang’s main submission is that Chung J’s Order has not been complied with and he relied on a number of specific examples which the liquidators ofthe 1^strespondent take a different view.  The 2^nd to 4^th respondents’ position is that they have fully complied with Chung J’s Order. Given my ruling that this is a new application under section 29 of the Bankruptcy Ordinance,Cap 6, it is not for this Court to determine whether there are breaches of Chung J’s Order in this hearing.  There is no question that Chung J’s Order is valid and binding on the respondents and has to be complied with.

52.If the Trustees consider that the respondents have breached Chung J’s Order, they are liberty to bring contempt proceedings against the relevant respondents.  At that stage, the issue of compliance can be ventilated fully and with precision.

53.Secondly, if the Trustees have any complaints about how the liquidation of the 1^st respondent is being conducted including whether there is any undervalue sale of assets, again if the claims are meritorious, the Trustees are at liberty to take out applications in the winding up proceedings after taking proper legal advice. 

DISPOSITION

54.For the reasons stated above, I decline to accede to the Trustees’ application under section 29 of the Bankruptcy Ordinance, Cap 6.  The Amended Summons is accordingly dismissed. 

55.I also formally dismiss the Trustees’ Leave Summons dated 6 November 2018.

56.As for the costs of the Amended Summons including the costs of this hearing, I make a costs order nisi, that:

(1) the Trustees do pay the costs of the 2^nd to 4^th respondents, on a party to party basis, with certificate for two counsel, to be taxed if not agreed.

(2) the Trustees do pay the costs of the 1^st respondent, on an indemnity basis, to be taxed if not agreed.   

57.As for costs of the Leave Summons, I also make an order nisi that the Trustees do pay the costs of the 1^strespondent, on an indemnity basis, to be taxed if not agreed.

58.I accept Mr Lau’s submission that the Trustees were well aware of the facts that the liquidators of the 1^st respondent do not have answers to any of the questions as set out in Annex A of Chung J’s Order and they have also delivered whatever documents they have to the Trustees prior to the taking out of the Amended Summons.

59.Mr Tang submitted that what the Trustees asked for is for the liquidators to file an affirmation to confirm that they have provided all the documents that they have and they are not in a position to answer any of thequestions as set out in Annex A of Chung J’s Order.  First, no such requests were made prior to the taking out of the Amended Summons.  Secondly, the Trustees have not advanced any basis as to why the liquidators should be subject to the orders as set out in the Amended Summons.

60.Mr Tang submitted that “[w]hilst they may not have first hand personal knowledge of the affairs of Assen, it is possible that the Liquidatorswould be able to comply (to some extent) with the S29 Order which remains of effect against Assen (even now in liquidation).”  This Court cannot make an order on the speculative basis that it is possible that the Liquidators would be able to comply.  This is wrong.

61.I am of the view that it is unreasonable and unnecessary to join the liquidators of the 1^st respondent to the present application.  There is also no basis for the Leave Summons.  Accordingly, it is proper that costs should be awarded to the 1^st respondent on an indemnity basis.

62.The above costs order nisi will be made absolute within 14 days from the date hereof unless the parties take out an application to vary the same within the 14-day period.

63.Finally, it remains for me to thank Mr Tang for the Trustees, Mr Lau for the liquidators of the 1^st respondent, Mr Wong SC, Mr Kwong and Ms Sat for the 2^nd to the 4^th respondents for their helpful assistance rendered to this court.

Mr Alan C W Tang, one of the joint and several trustees of the property of the bankrupt, from ShineWing Specialist Advisory Services Ltd, for the applicant

Mr Lau Siu Hung, one of the joint and several liquidators of Assen Ltd (in liquidation), from Sammy Lau CPA Ltd, for the 1^st respondent

Mr Anson Wong SC, leading Mr Alan K B Kwong and Ms Sakinah Sat, instructed by Hom & Associates, for the 2^nd to 4^th respondents

Attendance of the Official Receiver was excused