Chinacast Education Corporation and Others v. Chan Tze Ngon and Others

HCA 1062/2012

[2020] HKCFI 3121

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1062 OF 2012

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BETWEEN

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Before:  Deputy High Court Judge Burns SC in Chambers

Date of Hearing:  13 November 2020

Date of Judgment:  28 December 2020

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J U D G M E N T

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A. INTRODUCTION

1.On 2 January 2014, a sum of HK$3,000,000 was paid into court ("the Fund") as fortification of an undertaking as to damages given by the Plaintiffs ("the Ps") in respect of a Mareva Injunction ("the Injunction") obtained against, inter alia, the 3^rd Defendant ("D3").

2.The Ps' claims in the action were ultimately dismissed and the Injunction was discharged.

3.D3's claim for damages consequent on the imposition of the Injunction has also been dismissed.

4.The Ps are indebted to D3 for a sum of approximately HK$2.2 million, exclusive of interest ("the Indebtedness"), comprising the amount of a judgment obtained by D3 against the Ps, interest and taxed costs, less an amount paid into court by the Ps as security for D3's costs which has already been paid out to D3 in partial satisfaction of the taxed costs.

5.Before the court are:

5.1  D3's appeal against the order of Master H Au Yeung dated 24 October 2019 dismissing D3's application for payment out of court of so much of the Fund as will satisfy the Indebtedness, and5.2 The Ps' application by summons for payment out of the Fund to Ps.

6.At the time of the dismissal by the Master of D3's application, D3's appeal against the dismissal of his claim for damages consequent on the imposition of the Injunction was still pending. However it has now been abandoned.  

7.At the heart of the dispute as to whether or not D3 is entitled to have recourse to the Fund for the satisfaction of the Indebtedness is the question as to whether or not the Fund is the subject of a Quistclose trust such that it can only be used for the purpose of complying with and satisfying the court order, pursuant to which it was paid into court as fortification of the P's undertaking as to damages, or whether it can and should be used for the purposes of satisfying the Indebtedness. 

8.The monies constituting the Fund were provided by third party funders tothe 1st Plaintiff, namely Chinacast Education Corporation ("CEC").  In order to determine whether or not the Fund is the subject of a Quistclose trust it is necessary to examine the terms on which the monies were advanced and paid into court. 

B.  THE FUNDING OF THE MONIES PAID INTO COURT

9.In the 13^th Affidavit of Douglas Nelson Woodrum ("Mr Woodrum"), sworn on behalf of the Ps on 16 March 2015, in opposition to D3's application for security for costs, Mr Woodrum explained the funding arrangements as follows:

“30. The Plaintiffs were therefore only left with the option of raising funds through their shareholders and other third party funders. The Plaintiffs have had three rounds of shareholders’ financing in April, May and August 2012 respectively which have raised about US$4.4 million in total. Fir Tree Partners, a substantial shareholder of CEC, provided about one-third of the funding whilst five other shareholders (namely, Columbia Pacific, Lake Union, Ashford Capital, Special Situations, MRMP Management) contributed the remainder in about equal proportions.

31. Of the US$4.4 million raised, around US$2 million was spent as the Group’s operating expenses in China and to fund the Group’s investigation efforts given the wholesale removal and destruction of documents and records belonging to the Group by the Defendants.  Around US$0.5 million was spent on legal fees and other expenses in relation to the preparation of regulatory filings in the US and in dealing with varous regulatory inquiries.  Around US$1.5 million was spent on pursuing the present proceedings in Hong Kong which include the payment into court of HK$3 million to fortify the Plaintiffs’ undertaking as to damages in respect of the Mareva injunction against Mr. Ma and a payment into of court of HK$1 million as security for the 2^nd Defendant’s costs.”

10.In Mr Woodrum's 21^st Affidavit, sworn on 11 January 2019, in support of an earlier application by the Ps for payment out of the Fund to the Ps, Mr Woodrum stated as follows:

“7. On 19 June 2012, the Plaintiffs obtained an ex parte Mareva injunction against the 1^st to 5^th Defendants (the “Injunction Order”) with the usual undertaking as to damages being provided by the Plaintiffs (the “Plaintiffs’ Undertaking”).

8. By the Order of the Honourable Mr Justice Anthony Chan dated 11 November 2013 (“11 November 2013 Order”), the Injunction Order was continued against the 3^rd Defendant and the Plaintiffs were ordered to fortify the Plaintiffs’ Undertaking with a payment into court or a bank guarantee of HK$3 million.

9. The Plaintiffs were impecunious and had to raise funds through the shareholders of CEC and their related parties to fund the proceedings and fortify the Plaintiffs’ Undertaking.

10. Mr Ned Sherwood (“Mr Sherwood”), Fir Tree Value Master Fund, L.P., Fir Tree Capital Opportunity Master Fund, L.P., and I are and were shareholders of CEC at the materials times.

11. As recorded in an acknowledgement of receipt issued on behalf of CEC on 24 December 2013 (the “Acknowledgement”) (at page 1 of DNW-34):-

(i) Fir Tree Value Master Fund, L.P., Fir Tree Capital Opportunity Master Fund, L.P., Mr Sherwood and I (collectively the “Funders”) agreed to and did advance US$390,000 (the “Funds”) in total to CEC exclusively to fund the fortification which CEC was ordered to provide under the 11 November 2013 Order; and

(ii) CEC agreed and is bound to return the Funds to the Funders upon the Funds being released from the court.

12. On 26 December 2013, I arranged for CEC to wire the Funds to the Plaintiffs’ then solicitors, Messrs Fried Frank Harris Shriver & Jacobson (“Fried Frank”).

13. Fried Frank then made a payment of HK$3 million into court on 2 January 2014 pursuant to the 11 November 2013 Order.

14. The HK$3 million was therefore provided by the Funders for the sole purpose of providing fortification to meet the court’s condition for continuing the Injunction Order and the Funders never transferred property in the HK$3 million to CEC.

15. On 9 November 2016, CEC made the Chapter 11 Filing by way of a voluntary petition in the United States.  Under the earmarking doctrine, a principle in the bankruptcy laws of the United States, the HK$3 million never became party of CEC’s assets.  In this regard, I crave leave to refer to the Affidavit of Mr Michael L. Cook for his opinion on the relevant bankruptcy law of the United States.”

11.The "acknowledgment of receipt", dated 24 December 2013, to which reference is made in paragraph 11 of Mr Woodrum's 21^st Affidavit ("the Acknowledgment of Receipt") is in the following terms:

“December 24, 2013

Chinacast Education Corporation (the “Company”) hereby acknowledges receipt of US$390,000 from the entities and individuals listed below. The Company agrees to use these funds exclusively to fund a litigation deposit of HK$3,000,000 as ordered by the Hong Kong Court related to the Company’s Hong Kong Action No. 1062 of 2012 against Jim Ma.

In return for providing these funds, the Company hereby agrees with the entities and individuals as follows:

a) to return US$390,000 to the entities and individuals upon the Court Deposit being released to the Company by the Hong Kong Court and

b) to issue US$1 dollar of the Company’s Promissory Notes and 1 warrant for each US$1 provided to the Company for the Hong Kong Court Deposit

Funds provided by:

Fir Tree Value Master Fund, L.P.	US$109,200
Fir Tree Capital Opportunity Master Fund, L.P.	US$20,800
Ned Sherwood	US$130,000
Doug Woodrum	US$130,000

CHINA EDUCATION CORPORATION By (signed) Name: Doug Woodrum Title: Chief Financial Officer”

12.CEC is now in Chapter 11 bankruptcy in the United States.  In filings made therein, Mr Woodrum, Fir Tree Value Maser Fund, LP and Mr Sherwood are shown as creditors ofCEC, each for USD 130,000, described as "Loan to company for payment of surety for Hong Kong Litigation".

13.In Mr Woodrum's 22^nd Affidavit, sworn on 1 April 2019, to "clarify" an issue raised in the skeleton submissions of D3 for the earlier application by Ps for payment out of the Fund to Ps, Mr Woodrum stated as follows:

“4.  The HK$3 million which was paid into court on 2 January 2014 to fortify the Plaintiff’s Undertaking did not actually come from the US$4.4 million which was raised in April, May and August 2012 as referred to in paragraph 30 of my 13^th affidavit dated 16 March 2015.

5.  For the sole purpose of fortifying the Plaintiffs’ Undertaking, CEC raised US$390,000, which was in addition to the US$4.4 million, in December 2013 through its shareholders including myself as explained in my 21^st affidavit.

6.  As shown by the relevant bank statements of CEC, I made a deposit of US$130,000 to CEC on 15 January 2014 whilst the other Funders made two deposits of US$130,000 each to CEC on 24 December 2013. There is now produced and shown to me marked “DNW-35” copy of the relevant bank statements of CEC, I could only make the deposit on 15 January 2014 as I was away on vacation during the Christmas period.

7.  My statement as paragraph 31 of my 13^th affidavit that the US$4.4 million included the payment into court of HK$3 million to fortify the Plaintiffs’ Undertaking as to damages in respect of the Injunction Order against the 3^rd Defendant is therefore incorrect and I apologise for the misstatement.

8.  The basis on which the US$390,000 was advanced by the shareholders to CEC was that the same remains funds belonging to the shareholders and are to be returned to the shareholders upon the same being paid out of court.”

C.  THE RELEVANT PRINCIPLES

14.In Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567, R (a financier) made a loan to a company on terms that it was to be paid into a special account opened by the company which was to be used solely for the purposes of paying a dividend.  The company went into liquidation without having paid the dividend.  R brought an action against the company claiming the money in the special account on the basis that the loan had been advanced for a specific purpose; it was held by the company in trust for that purpose and, that purpose having failed, the money was subject to a resulting trust in favour of R.  These submissions were upheld by the House of Lords, Lord Wilberforce observing that:

"The mutual intention......and the essence of the bargain was that the sum advanced should not become part of the assets of [the company] but should be used exclusively for payment of a particular class of its creditors, namely those entitled to the dividend.  A necessary consequence from this, by process simply of interpretation, must be that, if for any reason, the dividend could not be paid, the money was to be returned to [R], the word "only" or "exclusively" can have no other meaning or effect."

15.The decision of the House of Lords in Quistclose was applied by the English Court of Appeal in Common Professional Examination Board ex parte Mealing-McCleod [2000] All ER (D) 588, which concerned a loan by a bank to the appellant to enable the appellant to comply with an order requiring her to provide security for the respondent's costs of the appeal.  The loan was advanced expressly on terms that the cash advanced (a) should be used exclusively for the purposes of complying with this order and (b) until used for this purpose, it should be held on trust for the bank.  The appeal was subsequently withdrawn, albeit on terms requiring the respondent to pay the appellant's costs.  Nevertheless the High Court ordered that the sum paid into court by the appellant by way of security be paid out to the respondent in satisfaction of previous orders for costs made in the respondent's favour.  That order was set aside by the Court of Appeal on the basis of a finding that, as between the appellant and the bank which advanced the loan, a Quistclose trust had arisen.  In giving judgment, Sir Christopher Slade said as follows:

“The decision in Quistclose Investments v Rolls Razor Limited [1970] AC 567 confirmed that it is open to a lender and a borrower, if they so agree, to enter into an arrangement under which money is to be lent to the borrower on terms that the borrower is to become a trustee of the money lent, the terms of the trust being that the money (a) is never to become part of the general assets of the borrower, but (b) is to be used exclusively by the borrower for a specified purpose and (c) except to the extent that it is required for that specified purpose, is to be held on a resulting trust for the lender. That was the nature of the trust found to exist in the Quistclose case. The specified purpose was the payment of a dividend. Since in the events that happened there was a failure of the specified purpose because the relevant dividend could not be paid, the money reverted to the lender.

In the present case, one point concerning the effect of the Agreement is common ground. The moneys lent were to be held by the applicant in trust for the Bank at very least until the payment into court was made. The Judge, however, accepted the respondent’s argument that because clause 2(c) of the Agreement expressly provided that the applicant was to hold the money lent on trust for the bank “until you have used it for this [the stated] purpose” this necessarily meant that the trusteeship ceased altogether and for all purposes immediately the £6,000 was paid into court. As he put it:

“… the only trust which arose was that provided for by clause 2(c) of the Loan Agreement which expressly came to an end when the money was paid into court”.

I respectfully disagree with the Judge’s conclusion on this short point of construction, which in my judgment overlooked the significance of the first sentence of clause 2(c) and, as a result, drew a wrong inference from the second sentence. When the first and second sentences are read together, in my judgement they make it clear that the mutual intention of the lender and borrow was that the load was to be used solely for the “business” purpose of making the payment into court (required to enable the applicant to pursue a career at the Bar) and for no other purpose; they make it clear that the money lent was not to form part of the applicant’s general assets. A necessary consequence of this, by a process simply of construction of the Agreement , was that if for any reason the money was not required, or was no longer required, for the purpose of the payment mito court, it was to be returned to the lender, the sole permissible use by the applicant of the money having been exhausted: (see and compare the observations of Lord Wiberforce in the Quistclose case at p. 580A-B; see also Carreras Rothmans Ltd v Freeman Mathews Treasure Ltd [1985] 1 All ER 155 at p. 165 f-g per Peter Gibson J)

If my conclusions thus far are correct the applicant was not only entitled but bound, in her capacity as trustee, to seek to maintain this trust in favour of the Bank as against her other creditors such as the respondent. The court has given no consideration for the receipt of the moneys; it was effectively in the position of a stakeholder. Now that it was notice of the trust in favour of the Bank, it is in my judgment of Danckwerts J in London County Council v Monks [1959] 1 Ch 239 has no relevance to the facts of the present case since the moneys in court do not form part of the debtor’s general assets.

16.In Dynasty Line Limited (Provisional Liquidators Appointed) v Sukamto Sia and another, unreported, FAMV 38 of 2009, 26 November 2009, the question which Ribeiro PJ (sitting as a single judge of the Court of Final Appeal) was asked to decide was whether money paid into court to fortify an undertaking in damages on the grant of a Mareva Injunction should be retained in court and made available to satisfy outstanding costs orders made in favour of the defendants after the relevant action had been stayed and the injunction discharged or whether the money should be paid out to the plaintiff.  In deciding that the money should be paid out to the plaintiff, Ribeiro PJ said, at §§12 & 13, as follows:

"12........the key question is whether the [sum paid into court] ever became part of the plaintiff's assets.  That is a question of fact.  What happened in the present case was that when Bokhary PJ granted the stay conditional on fortification being supplied, the provisional liquidators approached the known creditors, showing them the draft order and asking whether anyone was willing to contribute to the fortification.  Mr Johnny Tsao volunteered to do so, his personal assistant’s e-mail to the provisional liquidators stating: “I have instructions from my boss, Mr Johnny Tsao to reply that he is prepared to provide the HK$5 million for the Court of Final Appeal.”  The money was then transferred to the provisional liquidators’ client account and used to acquire a cashier order which was then deposited with the Court.

13. In my view, no basis exists for contending that Mr Johnny Tsao transferred property in the HK$5 million sum to the plaintiff.  There is no basis for suggesting that he intended to make a gift or a loan to the company.  On the contrary, the evidence makes it clear that the money was provided for the sole purpose of providing fortification to meet the Court’s condition for continuing the Mareva injunction.  That involved setting up a fund in court to be applied for the specific contingent purpose of compensating the 2^nd defendant in case he should later be shown to have suffered damage as a result of the continuation of the injunction.  There is no necessity in principle for such a fund to derive from the assets of the plaintiff giving the undertaking.  Insolvent companies are often enabled to take action to preserve or recover assets by creditors who are willing to finance such action by accepting personal liability, such as by providing indemnities or bank guarantees, for the costs and expenses involved and without transferring any property to the company in question.  That is what happened in the present case.”

17.It is perhaps noteworthy that in Dynasty Line, Ribeiro PJ did not analyse the arrangement between the plaintiff and the funder in terms of giving rise to a Quistclose trust, apparently because of his finding that property in the funds in question was never transferred to P, whether by gift or loan (the money being paid into the provisional liquidators' client account and then used to acquire a cashier order which was paid into court) and therefore, presumably, no trust arose.  Notwithstanding this distinction, the outcome in Dynasty Line was substantially the same as it was in the Common Professional Examination Board case - in both cases, the intention of litigant and funder and the essence of the arrangement between them was that the funds in question should not be regarded as part of the assets of the litigant but were to be used exclusively for the payment into court.

18.The approach of the English Court of Appeal in the Common Professional Examination Board case has not been followed by the Hong Kong Court of Appeal, at least insofar as cases involving applications for the payment out of court of bail money have been concerned.  In YBL v LWC (No 2) [2017] 2 HKLRD 783, Lam V-P (giving the judgment of the Court) stated as follows (at §§24-29):

“24. When considering Article 11, it is necessary to read it together with Article 10 instead of addressing it as an isolated provision.  The overall question is whether the procedures adopted infringed the right to fair trial.  Thus, the European Court of Human Rights reiterated in its judgments that the guarantees in the equivalent of our Article 11 are specific aspects of the right to a fair hearing in Article 10 which have to be taken into account in the assessment of the overall fairness of proceedings.  The court has to look at the proceedings as a whole having regard not only to the rights of the defence but also the interests of the public and the victims that crime is properly prosecuted: Al-Khawaja v UK (2012) 54 EHRR 23 at [118]; Horncastle v UK (2015) 60 EHRR 31 at [131]; see also R v Sellick [2005] 1 WLR 3257 at [50].

25. Some of the rights pertaining to a judgment debtor in a judgment summons and Order 49B application as a person subject to a criminal charge in the context of Articles 10 and 11 have previously been considered in Hong Kong (though without explicit reference to Articles 10 and 11 of HKBoR): the right to be tried in open court, see L v L; C v C, supra, [46(2)]; C v H [2012] 3 HKLRD 351; that the burden of proof is on the judgment creditor to prove beyond reasonable doubt the judgment debtor’s ability to pay, see Bank of India v Murjani CACV 12 of 1991, 1 May 1991; Hua Chiao Commercial Bank v Alpha Plus International Development [2001] 2 HKC 54; C v C, supra, [45]; CYM v YML, supra, [51].  It is not necessary for us to expand on what had already been canvassed in these judgments except to highlight that the fundamental rights under Articles 10 and 11 are involved in these respects.

26. There are also Hong Kong authorities stressing that committal should be a procedure of last resort: see G v S supra, [21]; CYM v YML, supra, [51] and that the sentence must not be excessive: see G v S supra [21]; C v C, supra [51(3)].

27. Further, as a matter of procedural consideration, it has been held that application for committal should not be heard together with other applications and in general an application for variation should be heard before the judgment summons: L v L, supra; C v C, supra; C v H, supra.  In this respect, though Ma JA suggested in C v C, supra [47] and [48] that there could be exception for an application for variation of a maintenance pending suit order to be heard at the same time of the judgment summons, we note apparently no argument on the implications of Article 11(2)(c) and (f) had been advanced in that case.  Having now taken those provisions into account, we respectfully come to the clear conclusion that a variation application should not be heard together with the judgment summons.  Instead, a variation application should be heard first.  Thereafter, if it is necessary to proceed with the judgment summons, the court should direct a statement to be served and filed by the judgment creditor setting out the charge and the case the judgment debtor has to meet before restoring a judgment summons for hearing in open court.  We shall elaborate on the requirement of Article 11(2)(c) below.

28. We shall examine later whether in the present case the court below has exercised its jurisdiction in accordance with these principles.  However, before doing so, we need to discuss at greater length the other aspects of the rights under Articles 10 and 11 in the context of judgment summons.  We would also need to consider whether Rule 87 can be Articles 10 and 11 compliant and if not, whether the procedure can be salvaged by remedial interpretation.

C.  English developments

29. Mubarak v Mubarak, supra, was decided shortly after the enactment of the Human Rights Act in the United Kingdom[3].  In that case, the English Court of Appeal accepted submissions from counsel for the husband that the minimum rights in terms of presumption of innocence, right to precise articulation of the charge[4], right to adequate time to prepare defence, right to examine evidence were infringed."

19.It is noteworthy that the decision of Ribeiro PJ in Dynasty Line was not cited in either the judgment of Ma CJHC (as he then was) in Registrar District Court v Li Kai or by Lam V-P in YBL v LWC (No 2).

20.Mr Jonathan Wong, counsel for Ps, contended that the cases of Registrar District Court v Li Kai and YBL v LWC (No 2) are distinguishable from such cases as Common Professional Examination Board and Dynasty Line, as well as from the present case by reason of the fact that the former concerned bail money and compensation orders under s 73(3) of the Criminal Procedure Ordinance (Cap 221) and, as such, required special consideration. I do not agree. It seems to me that, for the purposes of considering the appropriate disposal of monies paid into court, there is no material difference in principal between monies paid into court as bail money and moneys paid into court for other purposes (such as, in this case, monies paid into court as fortification of an undertaking as to damages).

21.Mr Wong then argued that, whilst the court may have power pursuant to Order 49 t 9 (1) to order whatever sum standing to the credit of a judgment debtor in court to be utilised for the satisfaction of any judgment sum against him (as held to be the case by the Court of Appeal in YBL v LWC, it had no such power in circumstances where money has been paid into court for the credit of an action rather than to the credit of one party or another. It seems to me that this argument is besides the point. The fact is that, once the purpose of the payment in has been spent (in the case of bail money, by making an attendance at court for which the bail money had stood as security or in the case of a payment into court by way of fortification of an undertaking, by the dismissal of a claim for damages for which the undertaking was given), the money in court does prima facie stand to the credit of the party making the payment.

22.In all the circumstances, I consider that the principles set out the decisions of the Court of Appeal in Registrar District Court v Li Kai and YBL v LWC (No 2) are of general application in relation to the disposal of monies in court.  This is notwithstanding that the central premise in the judgment of Ma CJHC (as he then was) in Registrar District Court v Li Kai (which was adopted by Lam V-P in YBL v LWC (No 2), to the effect that the court does not recognize anyone other than the party himself as having paid the money into court, seems to run counter to the observations of Ribeiro PJ in Dynasty Line. However, in my view, the Common Professional Examination Board case and Dynasty Line are distinguishable and are best treated as being cases decided on their own special facts:

22.1   in the Common Professional Examination Board case, by virtue of the fact that there, there was an express trust of the money, and

22.2   in Dynasty Line, by virtue of the fact that there, the monies were paid direct into court from the client account of the provisional liquidators and hence never formed part of the company's assets.

D.  THE FACTS IN THE PRESENT CASE - IS THERE A QUISTCLOSE TRUST?

23.The first point to make in respect of the Acknowledgment of Receipt is that it is signed on behalf of theCEC, not on behalf of the third party funders. There is no evidence as to how it came into being or as to whether or not its execution by CEC was a term or condition of the funding arrangements. On the contrary, the 13^th Affidavit of Mr Woodrum, in which the question of funding was raised for the first time, did not even mention the Acknowledgment of Receipt; it was inconsistent with Mr Woodrum's 21^st Affidavit and had to be corrected by Mr Woodrum's 22^nd Affidavit.

24.Secondly, whilst there is a provision in the Acknowledgment of Receipt restricting the use of the funds, unlike the facts of the Common Professional Examination Board case, there is no term to the effect that the funds in question were to be held on trust.

25.Thirdly, whilst the Acknowledgment of Receipt records a purported agreement on the part of the Company "to return US$390,000 to the entities and individuals upon the Court Deposit being released to the Company by the Hong Kong Court", that assumes payment out of the Fund to CEC and addresses the question as to CEC's obligation thereafter.  It does not address the question as to how the funds should be dealt with whilst still in court, after the purpose of the payment into court has been spent.

26.Fourthly, the Acknowledgment of Receipt records an agreement on the part of CEC to issue promissory notes in respect of the third party funding. There is no evidence that these were ever issued.

27.All these factors point to the funds advanced by the third party funders as loans to the Company. The funds were mixed with other funds in the Company's bank account. It cannot therefore be said that the Company held the funds on trust for the funders or that the funds remained the property of the funders. Whilst the Acknowledgment of Receipt specified that the funds should be exclusively used for the purposes of the payment into court and required the return of the total sum of US$390,000 to the funders after payment out of court of the Fund, this in my judgment is not sufficient to give rise to a Quistclose trust.

28.Even if I had found that a Quistclose trust had arisen in this case I would have followed the reasoning of Lam V-P in YBL v LWC (No 2) and determined that the Fund is money standing to the credit of the 3^rd Defendant and should be paid out to the 3^rd Defendant to the extent of the Indebtedness. 

CONCLUSION

29.I will therefore allow D3's appeal from the Master's Order to the extent of ordering that there be payment out of court to D3 of so much of the Fund as will extinguish the Indebtedness (any balance being paid out to the Ps).  As for the P's summons, I will order that any balance left in court after payment out to D3 of the Indebtedness be paid to the Ps.

30.I will make costs orders nisi as follows:

30.1  the costs order made by Master H. Au Yeung dated 24 October 2019 be undisturbed but the costs of D3's appeal be D3's in any event;

30.2  the costs of Ps' summons be D3's in any event.

31.I will leave the parties to prepare draft orders reflecting these orders for the court's approval.

Mr Jonathan Wong, instructed by Norton Rose Fulbright Hong Kong, for the 1^st, 2^nd, 3^rd, 4^th and 5^th Plaintiffs

Mr Nicholas OH, instructed by Lee & Chow, for the 3^rd Defendant