Tuenbo Co Ltd v. Cheung Sung Lam and Others
Read the full judgment text of HCA 566/2019 on BabelCite. This High Court CFI judgment was delivered on 11 June 2021.
1. There were two matters before me for substantive determination:
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HCA 566/2019 [2021] HKCFI 1620 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 566 OF 2019 ________________________ BETWEEN
________________________ Before: Deputy High Court Judge Alexander Stock, SC in Chambers Date of Hearing: 24 May 2021 Date of Decision: 11 June 2021 ________________________ DECISION ________________________ 1.There were two matters before me for substantive determination:
2.TCL was represented by Mr Victor Joffe (leading Mr Kenny Lin and Ms Natalie So)[1]. Ds were represented by Mr Bernard Man SC (leading Mr Danny Tang and Mr Brian Lee). 3.At the conclusion of the hearing I reserved my decision on the two matters referred to above, which I now give. A. BACKGROUND 4.In these proceedings, TCL seeks an order for the return and delivery of its books and records said to be in Ds’ possession, custody and control, and/or damages. The claim is brought on the basis that D1-D3 are former directors of TCL, and D4 is its former company secretary. 5.The background to the proceedings is related, however, to HCA 2095 of 2016 (the “2016 Action”), commenced by Steadfast International Limited (“SF”). SF is not party to the present proceedings. 6.The underlying dispute has been described in terms of two “camps”, namely: (i) the “Tuenbo parties” (including the Ds herein); and (b) the “New World parties” (including SF)[2]. 7.The brief history can be summarised as follows:
8.The pleadings in the 2016 Action are lengthy and complex. The Tuenbo parties say, inter alia:
9.By summons dated 1 March 2021 in the 2016 Action, the Tuenbo parties sought leave to re-amend their Defence and Counterclaim, summary judgment, and discharge of the Injunction. The basis for these applications, which are due to be heard later this year, include that: (i) by 2019/2020 GLRN had sold all of the units in the development; (ii) whatever the position previously, the sale proceeds, if properly applied, must now be sufficient to discharge SF’s loans[4]; and (iii) accordingly, the charged shares now fall to be redeemed, such that control of TCL must revert to the Tuenbo parties. B. Ds’ APPEAL: STRIKE OUT 10.In the present proceedings, Ds have not filed a defence. Instead, Ds took out a summons dated 13 August 2019 seeking to strike out the action, on the basis that it was commenced without TCL’s authority. That summons was dismissed by Master Kenneth Lee, an appeal from which dismissal came before me by way of re-hearing. 11.It is Ds’ position that for the same reasons as given in the 2016 Action, the EGM and the resolutions passed were not valid, such that the New Directors were not validly appointed, and the present action was not commenced with the proper authority of TCL. 12.For the proper approach to taking points of this nature, Ds cited Kammy Town Limited v. Super Glory Corporation Limited HCA 3524/2003, Hon A Cheung J (as he then was), 14 January 2005 at §§11-19[5]. In summary, as set out in Kammy Town:
13.On their strike-out application Ds’ position was that there was one summarily determinable point, which demonstrated that the New Directors were not validly appointed, and that accordingly the action failed for want of authority: see below. 14.However, even if that one point were not accepted, said Ds, there were a multitude of other reasons why the action failed for want of authority, which were not summarily determinable, and hence would still need to be determined even if the strike-out application failed[6]. Such points overlapped with those taken in the 2016 Action. 15.In this regard, there were also returnable before me: (i) Ds’ summons dated 17 May 2021 seeking (without prejudice to Ds’ appeal on strike-out), a stay of these proceedings pending the resolution of the 2016 Action, or alternatively, directions for the trial of a preliminary issue on authority in these proceedings, to be tried together with the 2016 Action; and (ii) a similar summons taken out by the Tuenbo parties in the 2016 Action. At the outset of the hearing I made orders, by consent, that the said summonses be stayed pending the determination of Ds’ Appeal. Ds’ summarily determinable strike out point 16.The “one point” which Ds alleged to be summarily determinable for the purposes of striking-out, relates to a requisition dated 14 June 2016 (the “Requisition”) for the EGM. 17.As to the facts:
18.Ds’ arguments proceeded on the assumption - said to be adopted only for the purposes of striking-out - that at the time of the Requisition there had been an event of default for the purposes of the 2nd Share Charge. Even on that assumption, Ds argued that the EGM and resolutions were invalid, for the following reasons:
19.TCL’s main points of response were, in summary, as follows:
Authorities 20.As noted above, Ds asserted a fundamental tenet of agency law that the agent must purport to act as agent on the principal’s behalf. The heart of the argument was that, even if there is actual authority, if the agent does not purport to act as agent, then he does not and cannot act as agent. 21.In support of this principle Mr Man, for Ds, cited Bowstead and Reynolds on Agency (22nd Ed) at §8-002. This deals with the rule that a disclosed principal, whether identified or unidentified, may sue or be sued on any contract made on the principal’s behalf by an agent acting within the scope of the agent’s actual authority or whose acts are validity ratified. The authors state that the rule:
22.Mr Man also relied on the decision of the Court of Appeal in Au Wai Ming v. Kam Tze Ming Alfred [2010] 1 HKLRD 198. 23.The Court was there concerned with the validity of execution of a deed of release from mortgage, in the context of a conveyancing dispute. 24.AIG had been appointed as attorney of the mortgagee (M). AIG had executed the deed of release twice: once expressly in its capacity as M’s attorney, and once as servicer. It was common ground that M could only execute the deed by way of a composite signature comprising its common seal and its officers’ signatures. The potential defect raised by requisition on title, was that the common seal of AIG had only been affixed to the servicer execution, and not to the attorney execution. 25.At first instance, Deputy High Court Judge Gill held that the deed of release was nevertheless validly executed, relying on section 6 of the PAO, which materially provides:
26.The learned Deputy Judge concluded that section 6 enabled an attorney to sign an instrument with or without reference to this having been performed as attorney of the donor. Accordingly, the servicer execution was a valid execution of the deed of discharge on M’s behalf, despite the absence of any express reference to AIG’s capacity as attorney. 27.In the Court of Appeal, Yuen JA disagreed with this analysis at §§24-26, citing Clauss v. Pir 1988 Ch 267 per Mr Francis Ferris QC at 272F-273A. Her Ladyship held that the common law position was that where an attorney (A) was to execute a deed on behalf of the donor (P), A was required to execute the deed signing “P”. The effect of section 6 of the PAO was simply to provide an alternative method of execution, so that A could execute the deed by signing “A”. However, that did not mean that A could execute an instrument without reference to his capacity as attorney. Section 6 did not have the effect of enabling an attorney to execute an instrument qua attorney, but without referring to that capacity. 28.In light of this, and on the facts of the case, the decision at first instance was overturned by a majority in the Court of Appeal[8]. 29.Mr Man cited Au Wai Ming to support Ds’ argument that an attorney - in this case SF - must purport to act as such in order for the principles of agency to bite. 30.In response, Mr Joffe for TCL argued that there is nothing in Au Wai Ming which requires an express reference to acting as attorney; and in fairness to Mr Man, I do not think that he so contended. Mr Joffe further relied on Yuen JA’s statement at §26 of Au Wai Ming that “Execution is a matter of intention”, to argue that the decision in that case was ultimately fact-sensitive, and that the exercise of ascertaining such intention should include a consideration of the whole document, background facts and context. 31.Mr Joffe also argued that Au Wai Ming concerned questions of title in a conveyancing context; which was a point of distinction from the present case, in terms of the strictness of the approach applied to the scrutiny of execution. 32.I think there is some force in this point, though it may not detract per se from the applicability of the reasoning in §§25 and 26 of Au Wai Ming. When it comes to the stringency of scrutiny of the execution requirements themselves (and application of the principles to the facts), it is notable that the Court in Au Wai Ming was concerned with the execution of a deed, with its consequent requirements for formal execution including by signature and seal[9]. By contrast, the present case concerns a request from members to directors for a general meeting pursuant to section 566 of the CO, the formal requirements for which are less onerous. 33.Mr Joffe placed particular reliance the decision of the Court of Appeal of Queensland, in Nielsen v. Capital Finance Australia Ltd [2014] QCA 139. As Mr Man pointed out, the facts of that case are not directly comparable to the present case. The Court there considered whether an attorney’s execution of a deed bound the donor, where the mode of execution was “signed, sealed and delivered by [the donor]”, with the attorney’s signature there affixed, as well as in other places in the deed in different capacities[10]. The Court was concerned with the validity of execution at common law[11], and under section 69 of the Powers of Attorney Act 1998 applicable in Queensland[12]. 34.Notwithstanding these points of distinction, Mr Joffe cited dicta in Nielsen that in considering compliance with the requirements for execution by attorneys, there was not necessarily any express form of words required. Rather, the court should or could consider the whole of the document, the circumstances of the case and the mode of execution, to ascertain whether the position was otherwise made clear from these aspects: see §§24 and 25 per Margaret McMurdo P[13]. Analysis 35.Given the authorities referred to above, I consider that the strike out issue can be resolved by a consideration whether there is sufficient indication in the Requisition, including by reference to the entire document, and its relevant known context and background, that SF was in sending it acting (and purporting to act) on the Chargors’ behalves. 36.I did not understand an approach along these lines to be in serious dispute between the parties[14]. 37.On the application of this approach to the facts, I am ultimately persuaded to accept Mr Joffe’s arguments, for the following key reasons.
38.In response to this line of reasoning, Mr Man made a number of compelling arguments, though I do not, ultimately, accept them. 39.First, it was argued that the starting point must be the natural and ordinary meaning of the express words of the Requisition, and that TCL’s position amounted to a construction which that wording was incapable of bearing (ie tantamount to holding that black means white). Given that the Requisition would have been drafted by experienced professionals, it was said that added weight should be given to the express wording. 40.However, whilst I accept that there are certain portions of the express wording of the Requisition[16] which support Ds’ argument, there are also features of the express wording which support a contrary construction or understanding of the document: see §§37(5), (6) and (7) above. 41.Second, it was argued that TCL’s approach falls into an error of striving to construe in favour of validity, which flawed approach would lead to different results in cases such as Au Wai Ming. Instead, said Mr Man, the correct approach is to construe the Requisition and the intention behind it objectively; and bearing in mind that what was actually so intended - in this case, a requisition by SF - may lead to invalidity[17]. 42.However, I do not think that the above approach falls into such an error. Rather, I consider that the matters at §37(8) above can and should in this case be considered as one part of the background factual matrix relevant to ascertaining the objective meaning of the Requisition and how it would have been understood. 43.Finally here, both sides placed some reliance on events after the Requisition, in particular: (i) correspondence following the Requisition (referred to at §17(4) above); and (ii) the wording of the Notice, with its express reference to SF’s capacity as attorney (see §17(5) above). 44.However, I do not think that these matters assist one way or another, including because the meaning of the Requisition, the capacity in which it was sent and its validity, should be ascertained at the time of the Requisition rather than by reference to subsequent events. Ratification and estoppel 45.Given the conclusions above, it is unnecessary to deal with TCL’s fallback submissions on ratification and/or estoppel. 46.However, I will briefly indicate that had I acceded to Ds’ arguments on the issue canvassed above, I would not have accepted that the position could be cured or saved on the basis of ratification or estoppel. 47.TCL’s ratification argument relied on the final sentence of clause 9 of the 2nd Share Charge: “Each of the Chargors hereby ratifies and confirms and agrees to ratify and confirm any document, instrument, assurance, act or thing which any such attorney may lawfully execute and do”. 48.Mr Joffe argued that pursuant to this provision the Chargors: (i) ratified the Requisition; and/or (ii) were contractually obliged to do so. 49.However, I accept Mr Man’s submission that ratification is retrospective, so there can be no ratification in advance[18]. 50.More fundamentally, I accept Mr Man’s submission to the effect that the ratification argument can add nothing; since if SF was all along acting and purporting to act in its own capacity, then there is nothing for the Chargors to ratify. It cannot be that by clause 9, the Chargors ratified or agreed to ratify any act of SF’s whatsoever. 51.In this regard, similar clauses are discussed in Aldridge: Powers of Attorney 11th Ed. at page 44, which casts doubt on their scope and effectiveness, stating inter alia: “The attorney must also have done the act ratified on behalf of the donor, and not on his own account”[19]. 52.Further, I consider that TCL’s arguments based on estoppel - which in essence rely on an undertaking or representation as to ratification in clause 9 - run into the same difficulty. Conclusion on strike out 53.For the above reasons, I do not accept Ds’ arguments on the single point raised in support of their strike-out summons. I will accordingly dismiss Ds’ Appeal. C. TCL’s SUMMONS: DELIVERY OF BOOKS AND RECORDS 54.By TCL’s Summons, TCL seeks an order that Ds deliver up to TCL various specified documents that are said to be within Ds’ possession, custody, power or control, to be retained by TCL pending trial. 55.There is an alternative form of relief, namely, that Ds retain and preserve such documents pending trial, and produce them for inspection and copying by TCL. 56.The documents sought are said to comprise that portion of TCL’s books and records required for the preparation of TCL’s accounts from 1 April 2014 to 31 March 2016, which in turn are said to be required to enable TCL to complete its profit tax returns (“PTRs”) for 2014/15 and 2015/16 (respectively, “2015 PTR” and “2016 PTR”). 57.It is common ground that the assessable periods for the 2015 and 2016 PTRs cover (at least predominantly) the period before the EGM, ie a time when on both sides’ cases, the Tuenbo parties were in control of TCL[20]. 58.I will not here canvass all of the detail in the parties’ evidence. In summary, TCL says:
59.In summary, Ds say:
Merits threshold 60.The parties differed as to the appropriate approach to and relevance of the “merits”, for the purposes of TCL’s Summons. 61.As noted above, Ds argued that: (i) since the summons seeks mandatory relief pending trial, the court generally requires a high degree of assurance that the plaintiff will succeed at trial; and (ii) since interlocutory relief is sought that will effectively dispose finally of the claim, the court generally requires the plaintiff to show that it is “at least likely to succeed at trial”. Ds cited Brave Venture Ltd v. Xinhua New Media Holdings Ltd [2017] 5 HKLRD 153 per Mimmie Chan J at §20. 62.Ds further argued that, even if their single summarily determinable strike-out point failed (see above), it was still open to Ds to seek the determination in these proceedings of other points which went to TCL’s authority but which were not summarily determinable: see §§8, 9, 14 and 15 above. Accordingly, the merits of the present proceedings included myriad complex issues going to the question of authority, which overlapped with issues to be determined in the 2016 Action[25]. 63.Given the said extant (and complex) issues of authority, submitted Ds, TCL could not possibly meet the high merits threshold set out above, such that TCL’s Summons must fail on this basis alone. 64.In contrast, TCL argued that the dismissal of Ds’ Appeal on strike-out should result in the grant of the injunctive relief sought, without any need to consider the balance of convenience. 65.That was because, said TCL, the correct procedure for Ds to ventilate their complaint of lack of authority was at the outset of proceedings and by way of strike-out summons: see Kammy Town Limited v. Super Glory Corporation Limited (supra). It was not open to Ds to issue such a strike-out summons, but reserve for later determination by preliminary issue a raft of other matters going to authority, should that summons fail. Further, Ds’ attempt to do so was an abuse of process since it entailed inconsistent positions, and vexing TCL twice on the same matter in these proceedings. 66.Accordingly, said TCL, if Ds’ strike-out summons was dismissed, that entailed the conclusive determination of Ds’ complaint of lack of authority for the purposes of these proceedings; with the further result that TCL should plainly be entitled to its books and records. 67.The debate on this issue has a bearing on the summonses dated 17 May 2021, which are presently stayed: see §15 above. 68.However, for present purposes - and without of course deciding those summonses - I am not attracted to TCL’s said position. 69.Given the approach and rationale in Kammy Town Limited, there would not seem to be anything objectionable in a defendant taking out a summons to strike-out for want of authority, on the basis that some of the points run are summarily determinable, but others would require directions for oral evidence. Once that is accepted, the complaint appears to lie only with Ds’ intended formula – which Ds flagged at the outset - of using the Order 33 procedure (trial of a preliminary issue) rather than an adjourned strike-out summons with directions, for the resolution of any such points which are not summarily determinable. 70.But as Mr Man submitted, that appears to be a difference of form only; particularly given the special character of strike-out proceedings contemplated in Kammy Town within which oral evidence may be received and factual disputes determined[26]. 71.Accordingly, I proceed for present purposes on the basis that, notwithstanding the dismissal of Ds’ Appeal, the entirety of Ds’ authority objection in these proceedings has not, necessarily, been resolved against Ds. 72.As to the merits threshold itself, I do not accept that it is as inflexibly high as Ds contend. As discussed in Hong Kong Civil Procedure 2021 at §29/1/29, the more stringent threshold sometimes propounded for mandatory injunctions depends on the more onerous effect of a mandatory injunction rather than its mere classification as mandatory; and the ultimate question is what is the course to adopt that involves the least risk of injustice. A strong prima facie case on the merits is not a necessary pre-requisite for the grant of mandatory relief in all cases. See also: Unimax Property Consultancy Ltd v Ng Lai Ching [2019] HKCFI 45 per Deputy High Court Judge William Wong SC at §§8 and 9 (in the context of interlocutory relief which is finally dispositive of the dispute); Re Wako Giken (HK) Co Ltd [2010] 4 HKLRD 121 per Harris J at §22. 73.On the facts of this case, I do not think that the relief sought by TCL is particularly onerous to Ds. On the contrary: see below. 74.Accordingly, I do not think it appropriate to apply inflexibly a very high merits threshold as a re-requisite to relief; though the merits, and the mandatory nature of relief, must be taken into account in the discretionary exercise. 75.As to the merits themselves, I proceed on the assumption that it is still potentially open to Ds to rely in these proceedings on the remainder of their objections based on authority (ie the various points in issue in the 2016 Action); and further that there is no basis for me to make any serious assessment of the competing merits of those objections, beyond observing that there would appear to be serious and complex issues to be resolved. Balance of Convenience 76.I take into account the position on the merits (above), and the parties’ evidence and arguments on the balance of convenience. 77.I consider that the balance of convenience and the competing risks of injustice, favour granting some of the relief sought. In other words, such relief is just and convenient in all the circumstances. 78.My key reasons are, in brief, as follows. 79.First, the court must surely proceed on the basis that it is desirable for TCL to comply with its statutory obligations in respect of the PTRs, and with the requests and requirements of the IRD in this regard. 80.As to Ds’ submissions and evidence that the risk of criminal penalty is low: (i) even a low risk of such consequences should be avoided, particularly where there is little or no countervailing prejudice (see below); (ii) more importantly, even if correct, this does not answer the point in the preceding paragraph[27]. 81.In other words, there are good reasons for granting relief pending trial, which cannot be fully answered by compensation in damages. 82.Second, and importantly, there is either nothing, or very little indeed, to balance against the first factor. 83.I do not think that Ds have raised any serious argument for prejudice resulting from the relief sought, as an interim measure pending the final resolution of these proceedings. 84.The only real argument is the suggestion that TCL is seeking discovery for the 2016 Action through the back door, and should not be permitted to gain an unjustified litigation advantage. 85.I do not accept this argument. The documents sought are either relevant, or irrelevant, to the 2016 Action. If relevant, they are or will be discoverable under general discovery obligations in that action; hence there is no prejudice. If irrelevant, there is also no prejudice. I do not think that Ds were able to answer this point. 86.Accordingly, I do not think that there is any good reason not to grant relief; and I find this factor highly persuasive in this case[28]. 87.Third, I accept TCL’s submissions that there are various (at least potential) difficulties with the Tuenbo Parties’ Proposal, and that the formula is convoluted and unattractive, when compared to the relief sought by TCL. 88.Amongst other things, the proposal requires an agreement to vary the Injunction which was granted in other proceedings with different parties. Further, it assumes continued co-operation between the present parties and others on point, which I do not think can be safely assumed. It is unnecessary to adopt this more complicated and uncertain approach, particularly where no serious prejudice to Ds arises from TCL’s simpler proposal: see above. 89.Fourth, I have considered Ds’ arguments on delay, but am not persuaded that they should alter the conclusion that I would otherwise reach. TCL has in its evidence offered at least some reasonable explanation for the timing of the application, by reference to correspondence with the IRD and with Ds in relation to the PTRs. I do not consider that there has been delay of a nature that would render it unjust or unnecessary to grant the relief sought, in light of the other circumstances. 90.Fifth, and as a collateral matter, the relief sought is in my view consistent with the status quo, given the Injunction granted in the 2016 Action. 91.Ds argued to the effect that the Injunction was irrelevant, but I do not agree. By the Injunction, D1-D3 have been restrained from (inter alia) acting or purporting to act as directors of TCL, such that the position arrived at in the 2016 Action is, as at this juncture, that the New Directors are left in control of TCL for the time being. 92.It is consistent with this approach, which represents the current status quo, that the task of submitting TCL’s PTRs should lie with TCL under the control of the New Directors, again as a ring-holding measure. 93.In any event, even if I had not considered this fifth factor, I would have reached the same conclusion. Form of relief 94.As to the precise form of relief, I prefer to grant TCL’s alternative form, namely, an order for preservation of the documents and production for inspection and copying by TCL. This has a more neutral flavour than the primary formulation of delivery up, and Mr Joffe essentially accepted that it would suffice for TCL’s purposes. 95.There was some argument by Ds that an order for inspection is unavailable where the target is the content of documents rather than their form (citing Hong Kong Civil Procedure 2021 at §29/8/8). However, the documents are sought not because their content is said to be relevant to the issues in these proceedings per se, but because they are part of the subject-matter of the proceedings themselves, and there is good reason why TCL should have access this juncture. I do not accept that the court lacks power to make an interim order of this nature in such circumstances, and I will make such an order. 96.Since Ds have filed affirmation evidence to the effect that there are not in existence documents in categories 4 to 7 of the Schedule to TCL’s Summons[29], these categories should be removed from that Schedule. 97.Further, I will lengthen the period for compliance to 14 days from the order, and grant liberty to apply. D. DISPOSITION 98.For the above reasons, I:
99.As to the costs of TCL’s Summons, I make an order nisi that those costs be in the cause, which seems to be the fairest order in all of the circumstances[30]. 100.Finally, I thank all counsel for their helpful submissions.
Mr Victor Joffe, Mr Kenny Lin and Ms Natalie So instructed by Messrs Jones Day for the Plaintiff Mr Bernard Man SC, Mr Danny Tang and Mr Brian Lee instructed by Messrs Edmund Cheung & Co for the 1st, 2nd, 3rd and 4th Defendants [1] Though there is, strictly speaking, an issue as to the authority of the said legal team and their instructing solicitors to represent TCL, I will use this form of reference for convenience. [2] The New World parties form part of the “New World Group”, headed by New World Development Company Limited. [3] The alleged wrongful acts include: (i) departing from the contractual framework for the loans set out in the shareholders agreements; (ii) incurring unreasonable construction costs in the Golden Lake project; (iii) delaying the sales of the properties once constructed, and renting them out rather than selling them; (iv) upon sale of some of the properties in 2011, failing to apply the sale proceeds in reduction/extinction of the loans made by SF, as required; and (v) diverting sales proceeds away from GLRN for the benefit of companies within the New World Group. [4] The complaint includes that SF has refused to provide a proper account. [5] Followed in Mok Mei Ling Rekei v. Lau Muk Fat [2021] HKCA 706 at §37. [6] This position was flagged in Ds’ affirmation evidence supporting their strike out summons. [7] The cited text was also relied upon by TCL, to assert that any “purporting” need not be express, but can be made clear from the contractual context. [8] Stone J agreed with Yuen JA, whilst expressing some hesitation at the result. Hartmann JA gave a dissenting judgment. Neither of the other Justices of Appeal appeared to disagree with the propositions at §§25 and 26 of Yuen JA’s judgment. [9] See for example §25, where the cited passed from Aldridge: Powers of Attorney was concerned with the “normal form of execution of a deed by an attorney”. [10] See §§25, 29-31, and 70. [11] Including in light of common law authorities to the effect that an attorney must execute a deed in the principal’s name. [12] There are material differences between the wording of this provision, and section 6 of the PAO. [13] Also §70 per Muir JA. [14] Mr Man referred to the issue as one of “construction” of the Requisition, and relied on well-known principles of contractual construction to illustrate an appropriate approach, for which see: Eminent Investments (Asia Pacific) Limited v. Dio Corporation (2020) 23 HKCFAR 487 at §§42-45; Wood v. Capita Insurance Services Ltd [2017] AC 1173 at §§10-15. Whilst the Requisition is not, of course, a contract, I accept that some assistance can be derived from such principles in ascertaining its meaning for present purposes. [15] Compare Nielsen v. Capital Finance Australia Ltd (supra) at §25. [16] And the covering letter. [17] In other words, on correct construction of the Requisition, SF may simply have made a mistake by purporting to itself requisition under section 566, when it could not validly do so. [18] Bowstead and Reynolds (supra) at §2-049; Midland Bank Ltd v. Reckitt [1933] AC 1 at p.19. Mr Joffe sought to answer this by reference to the second part of clause 9, ie contractual agreement to ratify. [19] Citing Imperial Bank of Canada v Begley [1936] 2 All ER 367 at [374]. See also Bowstead and Reynolds at §2-004. [20] Ds were keen to emphasise that accordingly, the relevant documents would not yet have been seen by the New World parties. Ds argued that this “status quo”should be preserved. [21] In addition to PTRs for the years ending 2017 and 2018. [22] On the same day, TCL submitted qualified PTRs for the years ending 2017 and 2018. [23] The evidence included that since TCL’s entire business comprised investment in the Mainland namely the Golden Lake project, TCL should not have Hong Kong sourced profits such that the assessable profits should be “nil”. [24] He further considered that whatever approach is taken, the PTRs are likely to require some qualification to reflect uncertainties arising as a result of the underlying dispute in the 2016 Action. Ds emphasised that in these respects and others, Mr Chung’s opinion evidence was “unchallenged”. [25] Ds relied on the various issues summarised at §§8 and 9 above. [26] Furthermore: (i) Ds’ primary position in their 17 May 2021 summons is not for the trial of a preliminary issue on authority, but rather for a stay of these proceedings pending the resolution in the 2016 Action of the points going to authority; (ii) the approach of the Court of Appeal in Mok Mei Ling Rekei v. Lau Muk Fat (supra) sits uneasily with a contention that points of this nature may only ever be pursued, procedurally, by a strike-out summons. As to the complaint of abuse of process, TCL is in substance no more “twice vexed” than in the scenario at §69 above. [27] The same point applies to Ds’ offers to bear the costs of any criminal sanction. [28] I accept that the absence of prejudice is not of itselfa reason for granting injunctive relief; but it is of course relevant to the balance of convenience once good reasons for granting relief are demonstrated. [29] 4th Affirmation of Wong Sung King Dorothy at §§8 to 11. [30] Balancing the various factors set out in eg Hengshi International Investments Limited v Bayspring International Limited, HCMP 1916/2015, Au-Yeung J, 10 March 2016, §§38-43. |
Cases cited in this judgment
Further hearings and rulings under HCA 566/2019