Ccmd Overseas Ltd v. Sinom Investments Ltd and Another
Read the full judgment text of HCA 903/2021 on BabelCite. This High Court CFI judgment was delivered on 6 June 2024.
1. This is the defendants’ appeal from an order made by Master Alan Kwong on 7 August 2023 in which he:
Cited by 2 cases · Cites 4 cases
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HCA 903/2021 [2024] HKCFI 1525 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 903 OF 2021 ____________ BETWEEN
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______________ J U D G M E N T _______________ Introduction and Procedural History 1.This is the defendants’ appeal from an order made by Master Alan Kwong on 7 August 2023 in which he:
2.1.On 14 August 2023, the defendants filed a notice of appeal from the master. The appeal was listed for hearing on 6 November 2023. 2.2.Shortly before the hearing, the defendant changed their legal team and on 31 October 2023 issued a summons for leave to re-amend their Amended Defence and Counterclaim and to adduce new evidence in support of the appeal. The proposed re-amendment advanced a new defence[1] not raised before the master. 3.1.On 6 November 2023, the matter came before Recorder Eugene Fung SC. The defendants’ leading counsel Mr Anson Wong SC[2] indicated that they were no longer pursuing any of the defences previously advanced, and acknowledged that the appeal would fall to be dismissed if their sole new defence were unsuccessful. 3.2.On 15 November 2023, the learned recorder gave a Decision[3] in which he
3.3.The plaintiff’s submission that it should be allowed to file further evidence in reply to the defendants’ new defence was not opposed by the defendants[7]. Consequently, it filed:
4.The upshot is that on this appeal, the question is whether the defendants’ new defence raised a triable issue. Background facts 5.In light of some of the defendants’ arguments, it is necessary to set out some undisputed background. 6.1.Asia Iron Holdings Ltd (“AIHL”) is a Hong Kong company which holds a group of Australian companies with mining operations in Australia. It was controlled by the 2nd defendant Zhang Chi (“Mr Zhang”) through the 1st defendant company Sinom Investments Ltd (“Sinom”). 6.2.On 11 May 2010, a Share Subscription Agreement was made between Sinom, Mr Zhang, AIHL and Chongqing Chonggang Minerals Development Investment Ltd (“CCMD”)[8], the plaintiff’s parent company, as a result of which Sinom was left with 40% and CCMD[9] acquired 60% of AIHL. 6.3.On 17 September 2010, the following documents were executed.
6.4.On the same day, the full amount of the facility was drawn down. 2010-2014 Events 7.1.In the following years Sinom did not pay any interest, which was duly capitalized. 7.2.There was no progress on the Project which, under the Shareholder Agreement, required financing by the two shareholders in proportion to their shareholdings. Sinom only advanced USD30 million by way of shareholder’s loans and was in default of cash calls[12]. 8.Before the repayment date under the Loan Agreement (15 June 2015), Mr Zhang wrote to the authorities in Chongqing about problems with the project (“Mr Zhang’s letter”). The Status Report (April 2015) 9.1.In response to Mr Zhang’s letter, CCMD submitted to the Chongqing Municipal State-owned Assets Supervision and Administration Commission of the State Council a document entitled “Australian Mining Project Status Report” dated 1 April 2015 (“the Status Report”). As Mr Wong has focused on certain parts of this Report, it may be helpful to set out the context. 9.2.The Status Report recited two purposes:
Failure to repay on due date (15 June 2015) 10.As mentioned above, on 15 June 2015, the defendants failed to repay any part of the loan. Demand letters (17 July 2015) 11.On 17 July 2015, the plaintiff’s solicitors sent demand letters to the defendants, saying:
12.As emphasized above, first and foremost the plaintiff was seeking repayment of the debt. The relevance of this will be discussed later in this Judgment. 13.It is common ground that the defendants failed to tender repayment at any stage (and indeed, to date). Instrument of Transfer of Charged Shares (September 2015) 14.Two months after the demand for repayment went unheeded, on 23 September 2015 an Instrument of Transfer dated 21 September 2015 of the Charged Shares was presented for stamping. Under this instrument, Sinom’s AIHL shares were transferred to the plaintiff. It is notable that the consideration was stated as:
Arbitration and HCCT43/2015 (October 2015 - August 2016) 15.1.Shortly afterwards, on 13 October 2015 Sinom issued an originating summons in HCCT43/2015 against the plaintiff and AIHL for an injunction in aid of arbitration proceedings commenced in Hong Kong, alleging a dispute over the Shareholder Agreement. 15.2.On 6 April 2016, the matter came before Lok J. The issue before the learned judge was whether equity should intervene to prevent the plaintiff from enforcing the Share Charge in view of unfair prejudice complaints by Sinom relating to the running of AIHL[14]. 15.3.On 22 August 2016, the judge gave a judgment in which he refused to intervene. In a nutshell, the reasons for the judge’s dismissal of the defendants’ case were that there were no restrictions on Sinom’s use of the loan (which it in fact used to discharge its other debts), the parties did not intend to link the repayment of the loan with the operation of the business, and the plaintiff’s position was no different from other financial institutions providing an independent loan to Sinom. The originating summons was accordingly dismissed. 15.4.As for the arbitration, it was stayed by agreement on 2 December 2016, and eventually terminated by consent on 30 January 2019. Registration of Charged Shares in plaintiff’s name (29 November 2016) 16.Meanwhile, shortly after Lok J’s Judgment, on 26 October 2016, the plaintiff informed AIHL that by reason of Sinom’s failure to repay the loan, it was entitled to enforce its security over Sinom’s AIHL shares, which were registered in the plaintiff’s name on 29 November 2016. Appointment of Receivers (1 June 2017) 17.On 1 June 2017, the plaintiff appointed Cosimo Borelli and Song Kuan as joint and several receivers of the Charged Shares. Receivers’ sale processes (April 2018- September 2020) 18.1.According to the affirmation of Mr Song, the Receivers made two attempts to market and sell the Charged Shares (in 2018 and 2020 respectively). 18.2.In summary, the 2018 process involved[15]:
18.3.However as no offer was received, the Receivers concluded the sale process in October 2018. 19.1.The Receivers did not carry out any further attempts to sell the Charged Shares for about 1½ years until May 2020. This was because, according to Mr Song[16], in the Receivers’ experience, there would not be a significant change in the pool of potential buyers, nor a significant change in their interests or appetites, within a short period. The Receivers decided to wait until new potential buyers could be identified, and to allow time for the buyers already on the 1st potential buyer list to reconsider. 19.2.In summary, the 2020 sale process involved[17]:
19.3.However as again no offer was received, the Receivers concluded the sale process in September 2020. 19.4.The Receivers did not carry out any further attempts to sell the Charged Shares thereafter. This was because, according to Mr Song[18],
This action (June 2021) 20.About 9 months after the conclusion of the 2020 sale process, in June 2021 the plaintiff issued this action against Sinom and Mr Zhang for the outstanding amount of USD285,512,378.84 being the sum advanced and accrued interest, and further or alternatively, for damages to be assessed. 21.Pausing here, it is clear as a matter of law that the plaintiff was entitled to sue the defendants for repayment even though the Receivers had earlier tried to sell the Charged Shares. As was succinctly stated by Lord Templeman in China and South Sea Bank v Tan Soon Gin[19], quoted in Chan Shu Chun v Right Margin Ltd[20]:
22.The plaintiff’s claim was followed by a Defence and Counterclaim, and a Reply and Defence to Counterclaim. 23.In April 2023, the plaintiff issued an application for summary judgment. This resulted in Master Kwong’s order. However, as mentioned earlier, the defendants’ new legal team has abandoned the original defences and has advanced only one defence which was not before the master, pleaded as follows in the RADCC:
Discussion 24.I shall first discuss the submissions on law. 25.Mr Wong’s primary submission, as pleaded in §16A, was that a chargee’s exercise of his powers is only valid if his sole purpose was to obtain repayment of the loan; so that if there was an additional motive, such as to gain control of a company from the chargor, the exercise would be in bad faith. His secondary submission, which was not pleaded, was that at least the chargee’s predominant purpose must be to secure repayment, otherwise the exercise would be invalid. 26.I have been referred to the following cases among others (listed in chronological order):
I have also been referred to passages in the standard texts on mortgages[27]. 27.1.In Downsview, an appeal to the Privy Council from New Zealand, a company had issued 2 debentures. The holder of the 2nd debenture appointed receivers who removed the manager of the company Pedersen. 27.2.Pedersen consulted Russell. Russell then caused his company (“RC”) to acquire the 1st debenture, followed by RC appointing him as receiver. The judge found as a fact that Russell did this, not to obtain repayment of the debt under the 1st debenture, but to disrupt the receivership appointed by the 2nd debenture holder and to reinstate Pedersen. 27.3.Under Russell’s receivership, the company sustained substantial losses. The 2nd debenture holder offered to repay the company’s debt to RC under the 1st debenture, but RC refused to accept repayment. 27.4.The 2nd debenture holder eventually sued RC and Russell for damages in negligence (Russell having ceased to act as receiver). 28.1.On the above facts, the Privy Council held that even though the mortgagee (RC) and the receiver (Russell) owed no general duty in negligence, equity imposed on them the duty to exercise their powers in good faith for the purpose of obtaining repayment. Since:
they were liable to the 2nd debenture holder. 28.2.In considering Russell’s arguments that as receiver deemed to act as agent for the mortgagor, he was under no duty to a subsequent encumbrancer (ie the 2nd debenture holder), Lord Templeman held (at p312):
28.3.As for RC’s duties as mortgagee, Lord Templeman held (at p317):
29. In the present case, Mr Wong emphasized the word “sole” in the passage above. 30.1.However, cases decided before Downsview (Nash v Eads[28] and Belton v Bass, Ratcliffe and Gretton Ltd[29]) establishing that a mortgagee did not need to have repayment of the debt as its sole or “pure” purpose when exercising its powers, were not cited to or discussed by the Privy Council. 30.2.Of course, it is clear that in Downsview the Privy Council did not need to decide on “purity” of purpose because, as noted by Lewison J in Meretz Investment NV v ACP Ltd[30] (at [306]) , the finding of fact by the New Zealand court was that “no part of the first debenture holder’s [RC’s] purpose was the recovery of the debt secured by the first debenture” (emphasis added). 30.3.Indeed, even in Fatupaito (which Mr Wong relied on for his secondary submission), it was acknowledged by the New Zealand Court of Appeal (“NZCA”) (at [49]) that “the Privy Council’s statement that the mortgagee owed a duty to use its powers for the ‘sole purpose’ of obtaining repayment was obiter” (emphasis added). 31.After the obiter statement in Downsview, it was held in a number of cases that there was no requirement of “purity of purpose”. First, in Meretz, Lewison J analyzed the law in detail, in the following passage quoted in Hong Da (§132):
32.1.Subsequently, the Privy Council in Cukurova affirmed the principle that “mixed motives” did not invalidate the exercise of a chargee’s powers. 32.2.The facts in Cukurova, put simply, were as follows. TC was a cell phone provider company. Its shareholders were CH and SO. 32.3.In 2005, CH entered into negotiations to borrow funds from AG, which was interested in acquiring cell phone networks. 32.4.In June 2005, SO commenced arbitration proceedings against CH, claiming there was a pre-emption agreement entitling it to acquire CH’s shares in TC. 32.5.To defeat SO’s claim, CH transferred its TC shares to a BVI company ultimately controlled by it. Then in September 2005, AG entered into a facility agreement to lend funds to that BVI company, with the TC shares charged as security. 32.6.In 2007, AG declared that an event of default had occurred, demanded immediate repayment, and made a formal request to be registered as owner of the charged shares. Within a month, CH tendered repayment, but AG rejected the tender for being late. 32.7.CH asserted that AG had acted in bad faith and for the improper purpose of obtaining the charged shares so that it could control TC. 33.1.The BVI judge at first instance ruled that no event of default had occurred. On appeal, the BVI Court of Appeal held that there were three events of default, but it did not rule on the bad faith and improper purpose arguments. 33.2.On further appeal, the Privy Council ruled that one event of default had occurred. In respect of the “purity of purpose” versus “mixed motives” arguments, it held first:
The, after considering legislation which is not relevant to our case, Lord Neuberger held the following as a general principle:
33.3.On the facts of that case, the Privy Council held that once AG declared that an event of default had occurred, the appropriation of those shares was a necessary incident of a permitted mode of satisfying the debt, and was at the time the only available way of doing so (as no tender of the debt had been made in time). In conclusion, CH failed in its argument that the appropriation of the shares was done in bad faith or had been undertaken for an improper purpose. 34.It is clear from the above that even “significant additional purposes” would not vitiate the enforcement of the security, as long as the satisfaction of the debt was one of the chargee’s purposes. 35.Cukurova was followed and applied in the English Court of Appeal in Morley Estates where it was argued that the mortgagee was in breach of duty because it failed to act as a lender, but instead was acting as a potential buyer of the mortgagor’s property portfolio. After rejecting that argument on the facts, the court held (§69):
36.1.In the face of the above authorities against his pleaded “sole purpose” argument, Mr Wong relied on Fatupaito, a judgment of the NZCA, to add the nuance that although the recovery of the debt need not be the chargee’s“sole” purpose, it must be the “predominant” purpose of the enforcement. 36.2.In a nutshell, the facts of that case were as follows. Olliver, who had a personal dispute with his wife Sparks, controlled a company called CIT, to whom Sparks owed money. 36.3.Olliver also controlled a company called Bankhouse. He caused Bankhouse to lend funds to CIT under a General Security Deed (“GSD”) which loan was secured by various properties owned by CIT. 36.4.When CIT failed to pay outstanding tax, liquidators were appointed. Olliver (through his other companies) made offers to the liquidators to buy CIT’s properties on certain terms, but when the liquidators refused to accept those offers, he caused Bankhouse to appoint receivers of CIT under the GSD. 36.5.The receivers then caused CIT to enter into a sale and purchase agreement with another company associated with Olliver, the agreement including certain conditions relating to the accounts receivable from Sparks. 36.6.The liquidators considered that the agreement was uncommercial, and commenced proceedings to set aside the GSD, to declare the receivers’ appointment invalid, and to set aside the sale and purchase agreement. 37.1.As mentioned above, the NZCA accepted that the statement in Downsview that the mortgagee owed a duty to use its powers for the “sole purpose” of obtaining repayment was obiter ([49]). However the Privy Council judgment in Cukurova holding that additional significant purposes did not vitiate the exercise of the mortgagee’s powers was not referred to at all. 37.2.Instead, the NZCA followed a judgment of another division of the NZCA in Coltart v Lepionka & Co Investments Ltd[31]. In that case, Lewison J’s judgment in Meretz was discussed as follows (quoted in Fatupaito [51]): “[63]. However, it is important to emphasise that Lewison J’s analysis is confined to the interests of the mortgagee as a mortgagee. In our judgment, a mortgagee may lawfully have other purposes coinciding with its core interest in discharging the debt and obtaining the best price reasonably obtainable and thereby properly anticipate the enjoyment of benefits collateral to exercising its power of sale. But an exogenous purpose - that is, a purpose flowing from interests outside the function of a mortgagee - cannot be allowed to prevail.” (Emphasis original) “[65]. The leading authorities confirm that a mortgagee will come under the scrutiny of equity when the effect of its actions invites the inference that it was acting in breach of its duties. The ultimate question is whether a mortgagee has acted primarily for the purpose of recovering its debt. That question is to be answered objectively, not by examining a mortgagee’s subjective motives, but by examining whether its actions are taken in good faith, bearing in mind its entitlement to prefer its own interests wherever they conflict with other interested parties”. (Emphasis added) 38.Although in Lepionka [65], the NZCA referred to “the leading authorities”, a review of the report shows that Cukurova was not mentioned. Lepionka was decided between 25 February and 7 April 2016. Cukurova was heard in 2013 but was reported only in 2016. 39.Be that as it may, by the time Fatupaito was heard, Cukurova had been reported but again it was not referred to. Thus, the NZCA did not have the benefit of considering the Privy Council’s discussion of the reason why additional purposes are not relevant. Apart from the issue of relevance, the NZCA itself accepted that “it will be a rare case in which there is evidence to meet this very high standard” to show that the mortgagee has acted for a predominant purpose which was “exogenous to” its interests as mortgagee in preserving its security and obtaining repayment of a secured debt ([53] - [54]). 40.With respect to the NZCA, it is difficult to see why and how a court would calibrate different purposes when a chargee exercises the power to enforce its security (of course, as long as one purpose is for repayment of the debt). Before advancing a loan, a lender would obviously consider the attractiveness of the security with an eye to the borrower’s possible default. If the borrower does default and the lender enforces the security, it is reasonable that the lender would then examine all the surrounding circumstances to choose the most beneficial option. To use the language of Lord Neuberger in Cukurova, there is no reason for equity to impede the exercise of the right to enforce the charge for its proper purpose, simply because there are other aspects of the chargee’s state of mind. 41.In any event, I have considered the matters in this case applying both the holdings set out in Cukurova and Fatupaito. Pleaded particulars of Improper Purpose and bad faith 42.The 1st particular of Improper Purpose and bad faith in §16C of the RADCC pleaded the Status Report. 43.1.Whilst it showed CCMD’s dissatisfaction with Mr Zhang[32] for his failure to progress the Project as intended under the Shareholder Agreement, it is important to note that CCMD attributed Mr Zhang’s obstructive attitude to his financial situation. There was no indication that there was any other reason for the strain in their relationship. 43.2.Unfortunately Mr Zhang’s financial situation was not going to improve. As recorded in the Status Report, Mr Zhang admitted that he had no ability to repay the loan[33], and when the time came for repayment (15 June 2015), he would only be able to repay the plaintiff’s loan with the Charged Shares. In other words, they would need to have recourse to the Charged Shares[34]. Whether those shares would end up with a third party buyer, or with the plaintiff, clearly they would no longer be Mr Zhang’s. 43.3.It was in the above context that in the Status Report, CCMD concluded that upon default in repayment of the loan, the debt recovery process would result in Mr Zhang’s withdrawal as a shareholder, in other words, the shareholder relationship between Sinom and the plaintiff would “dissolve”. That was stating the inevitable legal consequence of Mr Zhang being unable to repay the loan. His withdrawal as a shareholder would lead to an end to the obstacles placed in the way of the Project. 44.1.It is notable that the Status Report did not say that the plaintiff would not accept repayment from Mr Zhang if tendered, or would contest a third party’s acquisition of the Charged Shares irrespective of its identity or financial resources. Nor did it say that the plaintiff’s target was to become the 100% holder of the AIHL shares, or tentatively seek the Provincial Government’s approval to do so. 44.2.In short, the loan was due soon, the borrower admitted he was unable to repay, and the Charged Shares would, after legal processes were gone through, eventually leave his hands. Hence, the recommendation to wait until June and the result of the “legal means” which would follow upon default. In my view, CCMD’s statement of the inevitable legal consequence of Mr Zhang being unable to repay the loan, and its report on the effect on the Project, does not constitute evidence of Improper Purpose or bad faith, and does not give rise to a triable issue. 45.The 2nd particular pleaded in §16C referred to the registration of shares in the plaintiff’s name in November 2016, and holding out that it was the sole shareholder. 46.1.However:
46.2.Accordingly, I do not see any triable issue that the registration of shares in the plaintiff’s name would be evidence of Improper Purpose or bad faith. 47.The 3rd particular pleaded in §16C referred to the appointment and conduct of the Receivers in that they (a) had only advertised the sale of the Charged Shares on two newspapers on 20 April 2018 and 23 June 2020 and (b) had achieved no recovery. 48.1.There is nothing in this allegation. First, the law is succinctly stated in Eder J’s judgment in Saltri III Ltd v MD Mezzanine SA Sicar (AS Mezzanine Facility Agent) and others[35],
48.2.In any event, it is clear from Mr Song’s affirmation that the Receivers had done much more than merely advertising the sale of the Charged Shares in two newspapers on two days. As revealed in the affirmation, they had written to 287 potential buyers in the 2018 sale process, and 230 potential buyers (including 32 additional entities) in the 2020 sale process, drawing their attention to the offer for sale. These were specialist entities, so there is nothing in Mr Wong’s criticism that the sale had not been advertised in specialist trade press or platforms. 48.3.As for Mr Wong’s query why expert advice was not sought on how to sell the shares, and his reference to the lack of detail or inadequate updating of the information memoranda, these criticisms show perhaps that the Receivers could have done a better marketing job, but there is no triable issue that they constitute evidence of Improper Purpose and bad faith. 48.4.As for lack of recovery from the sale processes, Mr Song provided reasonable explanations[36] for why there were no takers. 48.5.In summary, there is no triable issue that the evidence supports the defendants’ allegation that the Receivers’ conduct fell “way below” what was expected, and that the plaintiff’s non-revocation of their appointment was evidence of Improper Purpose and bad faith. 49.Finally, there is no authority to support Mr Wong’s submission that the plaintiff had an obligation to provide information to the defendants regarding the Receivers’ sale processes, and there is no evidence even now from the defendants that there were third parties interested in purchasing the Charged Shares. 50.As for Mr Wong’s argument that Improper Purpose may be “inferred” from the fact that the plaintiff had not disclosed documents reflecting internal discussions with the Receivers revealing their intentions, it is for a person alleging bad faith to prove it[37]. At this Order 14 stage, the court must ask itself whether the defendants’ evidence raises a sufficiently credible foundation on which the inference may (not must) be drawn at trial[38]. There is no such evidence. 51.The 4th and last particular pleaded in §16C referred to delay in the commencement and prosecution of this action to recover the outstanding sums under the Loan Agreement. 52.1.As can be seen from the events narrated in chronological order above, arbitration proceedings commenced in October 2015 and terminated in January 2019. The Receivers’ second sale process concluded in September 2020. This action commenced in June 2021. Although there was a hiatus of 9 months between the last two events, it cannot be said, in the absence of anything else, that this raises a triable issue of Improper Purpose and bad faith. 52.2.As for post-writ events, there was no delay on the plaintiff’s part in filing its pleadings. The Order 14 summons was taken out on 6 April 2023 after the Amended Reply and Defence to Counterclaim was filed on 24 November 2022. No triable issue of Improper Purpose and bad faith arises. Unpleaded particular of Improper Purpose and bad faith 53.Apart from the pleaded particulars of Improper Purpose and bad faith discussed above, Mr Wong also queried why the Receivers excluded the plaintiff and its associated companies from the sale processes. He argued that as it would be difficult to market the Charged Shares to third parties as they represented a minority of the shares in AIHL, the Receivers should have considered selling them to the plaintiff. 54.1.As noted in Saltri, the court resists attempts to prescribe procedures for marketing the sale of charged assets. Further, although the plaintiff did explore the possibility of acquiring them and obtained the approval of the Australian authorities for that purpose (on the contingent basis that the plaintiff “may” become the holder of 100%” of AIHL, or “it is possible” that it would acquire all or any of the Charged Shares)[39], in fact this “alternative option”[40] did not obtain approval from the Chongqing Provincial authorities, its ultimate owner[41]. 54.2.As discussed earlier, the fact that the plaintiff was open to exploring alternative options does not mean that the enforcement of the security was for an Improper Purpose or was in bad faith. The hard fact was that Sinom had failed to repay any part of the loan on due date, and no funds were forthcoming from Mr Zhang or third parties. Mr Zhang himself realistically expected that the security would be enforced. 55.For the reasons set out above, whether the test to be applied is that in Cukurova or even that set out in Fatupaito, no triable issue of Improper Purpose or bad faith has been shown. Nor are there any genuine doubts in the plaintiff’s case which would justify the court granting unconditional leave to defend. 56.The discussion above applies also to Mr Zhang’s liability as guarantor. Order 57.1.I would dismiss the appeal from Master Kwong’s order, but out of an abundance of caution to address Mr Wong’s concerns, Mr Ma drafted the following paragraph to be added to the order (Mr Wong had no comments on the draft):
57.2.I would also make an order nisi that costs of this appeal be paid by the defendants to the plaintiff, to be taxed if not agreed, with certificate for two counsel.
Mr Ma Johnny KC, SC leading Ms Lee Rosa KY, instructed by Reed Smith Richards Butler LLP, for the Plaintiff Mr Wong, Anson MK, SC leading Mr Lai Chun Ho, instructed by Pinsent Masons, for the 1st and 2nd Defendants [1] Pleaded at §§16A-16E, see §23 below. [2] Leading Mr Lai Chun Ho. [4] The Re-Amended Defence and Counterclaim (“RADCC”) was subsequently filed on 21 November 2023. [5] Recorder Fung’s Decision §22. [6] Recorder Fung’s Decision §§28-34. [7] Recorder Fung’s Decision §18. [8] Owned ultimately by the Chongqing Provincial Government. [9] Subsequently on 30 June 2011, CCMD transferred its shares in AIHL to the plaintiff: RAD&CC §4.2(h). [10] USD240 million from Sinom and USD360 million from CCMD: Lok J’s Judgment, HCCT43/2015, 22 August 2016, §7(iv). [11] Pursuant to an Amendment Agreement made on 9 February 2012. [12] Lok J’s Judgment, §§12-13. [13] Both counsel agreed that this was the more accurate translation, instead of “mortgage his Asia Iron shares to us” in the uncertified translation. [14] Lok J’s Judgment, §20. [15] Affirmation of Song Kuan, §§14-24. [16] Affirmation of Song Kuan, §25. [17] Affirmation of Song Kuan §§26 - 33. [18] Affirmation of Song Kuan, §34. [19] [1990] 1 AC 536. [20] [2015] 3 HKLRD 409, §45. [21] Particulars not reproduced here as it was stated in the defendants’ skeleton argument (§56) that the court need not be concerned with the quantum of loss. [22] [1993] AC 295. [23] HCA1377/2011, DHCJ G Lam SC (as he then was), 19 December 2011. [24] [2016] AC 923, decided in 2013. [25] [2019] NZAR 192. [26] [2021] EWCA Civ 338. [27] Cousins on the Law of Mortgages 4th ed. and Fisher and Lightwood’s Law of Mortgage 15th ed. [28] (1880) 25 Sol Jo 95. [29] [1922] 2 Ch 449. [30] [2007] Ch 197. [31] [2016] NZCA 102, [2016] 3 NZLR 36. [32] Mr Zhang was referred to personally as controller of Sinom. [33] Obviously he had been unable to obtain funds from third parties. [34] There is no evidence that only part of the Charged Shares would be sufficient for repayment of the loan. [35] [2012] EWHC 3025 (Comm), §137. [36] See §19 above. [37] Fisher and Lightwood’s Law of Mortgage, §30-23, citing Devon Commercial Property Ltd v Barrett [2019] EWHC 70 (Ch). [38] Johnson Electric International Ltd v Bel Global Resources Holdings Ltd [2014] 5 HKC 504, §24. [39] See letter to Foreign Investment Review Board, 24 October 2016, §§4.1, 4.2 and 8. [40] 3rd affirmation of Zhan Guang Mo, §12. [41] 3rd affirmation of Zhan Guang Mo, §12. | ||||||||||||||||||||||
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