Zs Capital Fund Spc and Others v. Astor Asset Management 3 Ltd and Another

HCA 1157/2020

[2024] HKCFI 1535

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1157 OF 2020

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DECISION

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Introduction

1.By summons dated 7 June 2023 (“the Summons”), Ps apply for interim payment against D1 in a sum of HK$115,339,068 and for an order that the 4 sums previously paid into court[1] be released to Ps in whole or partial satisfaction of the interim payment applied for.

2.Shortly before the hearing, both parties took out their respective summonses for leave to file further evidence in the form of the 4^th Affirmation of Leung Wai Sin (Ps) and the 2^nd Affirmation of Guo Cheng (D1). At the hearing, Mr Pun and Mr Lam, for D1, raised no objection to Ps’ application and Mr Wong SC, leading Mr Yip and Ms Liao, for Ps, similarly did not oppose D1’s application. Therefore, this court granted leave for the parties to file their additional affirmations.

Background Facts

3.There is little factual disputes between the parties and the great majority of the background facts are well-documented. Mr Wong helpfully gives a narrative of the essential facts in his written submissions to which Mr Pun agrees. I reproduce the same with slight modifications below:

3.1  Ps were shareholders of Zhejiang Cangnan Instrument Group Company Limited (stock code 1743) (“Cangnan”), a company formerly listed on the Hong Kong Stock Exchange until its privatization in June 2021.

3.2  Pursuant to the Stock Loan Agreements dated 13 May 2020 (“SLAs”) in identical terms signed between D1 and each of Ps, it was agreed that loans would be advanced by D1 to Ps to be secured by the pledging of Cangnan shares held by Ps.

3.3  Each of the SLAs contains the following provisions:-

(1)  Section I, Clause 30: ““Pledged Collateral” shall mean the total actual shares pledged to [D1] as a consideration for the Loan … The completed pledged securities are not a gift or a purchase, instead being pledged to [D1] for Loan purposes…”.

(2)  Section I, Clause 23: “ “Lien” shall mean the [D1’s] right to keep possession of property belonging to the [Ps] until a debt owed by [Ps] is fully discharged per this Agreement.”.

(3)  Section II, Clause 1(a): “Principal Amount: (a) [Ps] hereby grants to [D1] Lien rights over the Pledged Collateral and in exchange, the Lender agrees to advance to Borrower a Loan … The Loan Principal will be funded within three (3) Business Days of the receipt by [D1] of a confirmation that the Pledged Collateral has been deposited with the designated Depository Broker …”.

(4)  Section V, Clause 3: “Sale of Securities: [D1] will not short-sell, sell or grant any option to sell or hedge, including without limitation to a pledge, hypothecation, rehypothecation and or loan of all or a portion of the Pledged Collateral at any time, unless there is an Event of Default which is not cured or remedied by [D1] in a timely manner and in accordance with this Agreement. Notwithstanding anything within this paragraph, [D1] will Lien the Pledged Collateral with Depository Broker and a security interest is provided by [Ps] to [D1]…”.

3.4  For this purpose, Collateral Management Agreements dated 1 June 2020 (“CMAs”) in identical terms were signed between Zundiao Securities Limited, D2 herein, and each of Ps whereby Ps agreed to deposit such Cangnan shares to be pledged under the SLAs into accounts held in Ps’ names with D2 (“Ps’ Security Accounts”).

3.5  Pursuant to the SLAs and the CMAs (collectively, “the Financing Documents”), a total of 6,270,400 Cangnan shares were deposited by Ps into Ps’ Security Accounts with D2 (“the Deposited Shares”) as security for the loans to be advanced under the SLAs.

3.6  On 9 June 2020 and 17 June 2020, D1 only advanced a total sum of US$2,750,000 (“Loan Proceeds”). Such Loan Proceeds were around 8% of the maximum loan amounts (around US$34 million)[2] that could be advanced under the SLAs. They were secured by corresponding portions of the Deposited Shares (“Collateralised Shares”) applying the loan-to-value (“LTV”) ratio of 65%.

3.7  D1 then withheld further tranches of loans purportedly on legitimate grounds.

3.8  Ps later discovered that some of the Deposited Shares were transferred out of Ps’ Security Accounts without Ps’ knowledge or approval.

3.9  On 11 July 2020, Ps commenced this action and obtained an injunction restraining D1 and D2 from disposing of the Deposited Shares (“the Injunction”).

3.10  On 13 July 2020, D1 issued notices of default to Ps.

3.11  Pursuant to the arbitration clause in SLAs, D1 commenced arbitration in St Kitts and Nevis against Ps (“the St Kitts Arbitration”) seeking the forfeiture of all the Deposited Shares on the alleged basis that Ps defaulted under the SLAs.

3.12  In the St Kitts Arbitration, Ps counterclaimed against D1 alleging, among other things, that:-

(a)  The SLAs are unenforceable under s.23 of the Money Lenders Ordinance (Cap. 163) (“MLO”) as D1 is an unlicensed money lender, subject only to the Court’s discretion to grant relief under section 23; and

(b)  Even assuming the loan transactions are not in contravention of MLO s.23, Ps still retain the equity of redemption and are entitled to redeem the Deposited Shares and/or their traceable proceeds.

3.13  This action was stayed on 4 November 2020 as against D1 in favour of the St Kitts Arbitration.

3.14  By the awards dated 15 November 2021 (“1^st St Kitts Award”) and 21 February 2022 (“2^nd St Kitts Award”) (collectively, “St Kitts Awards”), the Arbitrator in the St Kitts Arbitration concluded that:-

(a)  D1 at the material time was an unlicensed money lender subject to the MLO and the SLAs contravene the MLO. The Arbitrator has no jurisdiction to grant relief under the proviso of MLO s.23, which must be resolved by an application to the Hong Kong Court.

(b)  Ps’ alternative equity of redemption claim should also be dealt with by the Hong Kong Court.

3.15  As against D2, Ps commenced arbitration in Hong Kong against D2 pursuant to the arbitration clause contained in the CMAs (“the HK Arbitration”). This action was stayed on 15 December 2020 as against D2 in favour of the Hong Kong Arbitration.

3.16  By a Partial Award dated 3 June 2022 and a Final Award dated 31 August 2022 (collectively, “the HK Awards”), the Arbitrator in the HK Arbitration held, inter alia, that:-

(a)  It has no jurisdiction to hear and determine claims arising from the Financing Documents as between Ps and D1.

(b)  D2 holds the Deposited Shares and their traceable proceeds on trust for Ps, pursuant and subject to the terms of CMAs and D2’s Terms and Conditions.

3.17  During the course of the St Kitts Arbitration, as part of its privatization and delisting exercise, Cangnan offered to buy back the shares from its public shareholders, which offer in respect of the Deposited Shares was accepted with the consent of the parties.

3.18  Following the privatization of Cangnan in June 2021, D2’s account is that it received a total sum of HK$141,338,612 (“the Total Proceeds”) as sale proceeds and dividends deriving from the Deposited Shares, of which a total sum of HK$136,851,624 (“the Proceeds in Court”) was paid into Court by D2 after deducting costs awarded against Ps to D2 in the HK Arbitration and interest accrued on such costs.

3.19  By an Order dated 13 April 2023, the stay of this action was lifted such that the parties could proceed to resolve the remaining part of the disputes in the Hong Kong Court pursuant to the St Kitts Awards and the Hong Kong Awards.

3.20  Based on D2’s confirmation that it has no claims over the Proceeds in Court, by a consent order dated 20 June 2023, the claims against D2 in this action is dismissed with no order as to costs.

3.21  On 18 March 2022, D1 issued proceedings in the Jamaican Court, being the supervisory court of the St Kitts Arbitration, to set aside the St Kitts Awards.

3.22  D1’s set aside application was dismissed by the Jamaican Court on 9 May 2024. A draft judgment of Brown Beckford J (“the Draft Judgment”) was circulated on 15 May 2024 to the parties for their comments on any grammatical and typographical errors.

3.23  As shown in the Draft Judgment, Brown Beckford J found, inter alia, the Arbitrator was entitled to and did find D1 was an unlicensed money lender and the SLAs were in breach of the MLO, and that her conclusion that only the Hong Kong Court can grant relief under the MLO could not be impeached in the Jamaican Court.

3.24  On 24 May 2024, D1 lodged an application for leave to appeal against the Draft Judgement.

Parties’ case

4.Ps basically rely on the St Kitts Awards and contend that D1 is prevented from enforcing the loan, interest and security arrangement under the Financing Documents due to the contravention of the MLO and hence Ps remain to be the beneficial owners of the Deposited Shares and also the Total Proceeds including the Proceeds in Court (“the MLO Issue”).

5.Ps have an alternative claim based on their right of redemption to obtain the Total Proceeds including the Proceeds in Court (“the Right of Redemption Issue”), which represent the traceable proceeds of the Deposited Shares even in the event that D1 succeeds in obtaining relief under the proviso of section 23 of the MLO (“the Proviso”).

6.The defence case is that there were events of default (“Events of Default”) under Clause VI.2 of the SLAs taking place between 3 June 2020 and 11 July 2020. They included:

(a)  Ps’ failure to inform D1 that there were various lawsuits associated with the Deposited Shares;

(b)  Ps’ involvement in and knowledge of a possible “pump and dump scheme” (“the Scheme”) associated with the Deposited Shares whereby misleading information was being circulated to boost the price of the Cangnan shares and enable sale of such shares at a high price, which would likely be followed by a rapid fall in the Cangnan share price thereby undermining D1’s secured interest in the Deposited Shares;

(c)  Ps’ failure to comply with requests of D1 for enhanced due diligence in light of the unusual share price movements; and

(d)  Ps’ application for the Injunction.

7.Mr Pun emphasizes that the 1^st St Kitts Award was expressly stated to be without prejudice to the right of D1 to make its claim in this jurisdiction.

Applicable legal principles

8.Before examining the merits of the claims of Ps based on the MLO Issue and the Right of Redemption Issue, it is pertinent to review the applicable legal principles, which are not in dispute.

9.Counsel on both sides refer this court to the following passages in Rich Profit Creation Ltd v Ko Chung Lun and Ors. [2020] HKCFI 1459 (§§15-16):

“15. It is trite that the Court must be satisfied that if the claim were to go to trial, then, on the material before the judge at the time of the application for interim payment, the plaintiff would succeed in his claim, and would obtain a substantial amount of damages; the court must be satisfied on the balance of probabilities, and need not be satisfied beyond reasonable doubt. However, it is insufficient that the plaintiff is likely to succeed. The court must be satisfied that the defendant has no arguable defence or that there are sufficient doubts regarding the genuineness of the defence, so that the court would not grant the defendant unconditional leave to defend in a summary judgment application. The test is essentially the same as that for granting conditional leave to defend, namely, whether the defence can be said to be shadowy…

16. In addition, the Court should read Order 29, rules 11 and 12 together and ask the single question whether the application fulfils the requirements of those rules as a whole rather than considering separately and exclusively the applicant’s entitlement under each rule …”

10.Thus, Ps’ application for interim payment can only be granted when the court is satisfied that D1 has no arguable defence or that there are sufficient doubts regarding the genuineness of the defence.

11.Mr Wong further draws my attention to the following words of DHCJ Paul Lam SC in Rich Profit Creation Ltd (§26):

“26. The next question concerns the legal consequences in case the plaintiff would succeed at trial … The plaintiff has a clear case to claim for the return of the [sums] in restitution on the ground of unjust enrichment … It follows that the plaintiff should, at least, be entitled to the return of the [sums] leaving aside interests on those sums and other remedies that it may have in equity. It is unnecessary for me to consider whether the plaintiff’s claim may succeed on any other legal basis.”

Analysis

Right of Redemption Issue

12.I should first deal with the Right of Redemption Issue. Mr Wong submits that Ps’ right of redemption is exercisable after default and any contractual provision seeking to fetter such right is void as a clog on redemption. There can be no foreclosure until and unless the court makes such an order.

13.Mr Wong relies on the following authorities to support his submission.

14.In Common Luck Investment Ltd v Cheung Kam Chuen (1999) 2 HKCFAR 229, Litton PJ explained the nature of mortgage by the citation of the following definition given by Lord Lindley in Santley v Wilde [1899] 2 Ch 474 and adopted by Lord Halsbury in Noakes & Co. Ltd. v Rice [1902] AC 24 at 235A-C:

“A mortgage is a conveyance of land or an assignment of chattels as a security for the payment of a debt, or the discharge of some other obligation for which it is given. This is the idea of a mortgage; and the security is redeemable on the payment or discharge of such debt or obligation any provision to the contrary notwithstanding…. Any provision inserted to prevent redemption on payment on performance of the debt or obligation for which the security was given is what is meant by a clog or fetter on the equity of redemption, and is therefore void.”

15.Litton PJ went on to say this authoritatively about the nature of right of redemption at 235E-F,

“A right to redeem is an inseparable incident of a mortgage. It cannot be taken away by an express agreement of the parties. Although originally at common law the mortgagor forfeited his estate when he defaulted, and it became the absolute property of the mortgagee, from earliest times the courts of equity have intervened and held that until foreclosure by order of the court, or sale by the mortgagee in realizing his security, the mortgagor has an equitable right to redeem: By offering to pay the principal, interest and costs he can have his property re-assigned to him. The mortgagor’s equitable right to redeem is, in the eyes of the law, an equitable estate.”

16.In Hengshi International Investments Limited v Bayspring International Ltd and Anor. (HCMP 1916/2015, unreported, 18.12.2015), the plaintiff’s shares in a company were pledged to Ds as securities of 2 loans. Ds disposed of such shares even before any event of default. The plaintiff’s application for interlocutory injunction was heard by Au-Yeung J. The judge referred to, among other matters, Common Luck and said this at §§25-27,

“25. The mortgagor’s right to redeem is an equitable estate which is an inseparable incident of a mortgage: Common Luck Investment Ltd v Cheung Kam Chuen (1999) 2 HKCFAR 229, at 235E-F. It exists from the outset of a mortgage, and such proprietary interest “pre-dates the contractual redemption date”: see Fisher and Lightwood’s Law of Mortgage (14^th ed), §47.2.

26. This right remains exercisable even after default and after the mortgagee has possession of the mortgaged assets: Bridge, M, et al, The Law of Personal Property, §§7-054–7-056.

27. The right cannot be taken away even by express agreement of the parties: Common Luck, at 235C & E.”

17.In Ding Huirong v China Times Securities Limited and Anor. [2021] HKCA 419, Lam VP (as he then was) said this at §50,

“…Equity looked to the substance of a transaction and regarded the rights and obligations of the parties as being governed by the maxim “once a mortgage always a mortgage”. The concepts of equity of redemption and clog on the equity of redemption were developed to ameliorate the strict adherence to the terms of the contract which precluded a mortgagor from exercising his equitable right as mortgagor. The underlying philosophy is that a mortgagee’s security interest in the mortgaged property should be confined to the repayment of the loan and interest. If a mortgagor is ready, willing and able to repay in full to redeem his property, he should be allowed to do so.”

18.In the present case, it is clear that the security interest of D1 over the Deposited Shares (and its traceable proceeds) is subject to the right of redemption of Ps.

19.The Events of Default, even if they had occurred as alleged, cannot entitle D1 to prevent Ps from exercising their right of redemption. In the absence of a foreclosure order made by the court, their right of redemption should remain intact and exercisable.

20.By a letter dated 15 July 2020 (“the Letter”), the solicitors of Ps stated in unequivocal terms that Ps were willing and ready to repay the outstanding loan principal plus interest at the rate of 3.5% per year up to the date of the Letter and Ps thereby exercised their equitable right of redemption and demanded the return of the Deposited Shares. They demanded a reply on or before 20 July 2020.

21.Such a demand was ignored. D1 simply refused to acknowledge Ps’ right of redemption.

22.On this issue, Mr Pun raises questions about the actual scope of the security interest of D1. He points out that there are two conflicting cases advanced by Ps. He submits that it is arguable that the Loan Proceeds were only secured against the Collateralised Shares and not all the Deposited Shares, in which case Ps may not obtain a substantial amount of damages by redemption of security.

23.His arguments are developed in the following manner. First, he underscores §9(1) and (2) of the Amended Statement of Claim (“ASOC”) where Ps plead that the Loan Proceeds were secured by the Collateralised Shares and the number of the Collateralised Shares is 931,441.

24.Mr Pun also refers to §11 of the Indorsement of Claim and submits that the security interest was over the Collateralised Shares and/or their traceable proceeds.

25.Mr Pun says that this is the first scope of security interest (“the 1^st Scope”), i.e. it covers the 931,441 Collateralised Shares only.

26.Mr Pun points out that at §10 of the ASOC, Ps plead that they remain the beneficial owner(s) of the Deposited Shares and retain the equity of redemption in the Deposited Shares. The Deposited Shares include both the Collateralised Shares and the uncollateralised shares.

27.Mr Pun says that this is the second scope of security interest (“the 2^nd Scope”).

28.Mr Pun submits that if the 1^st Scope is correct, the court cannot be satisfied that Ps would obtain judgment for a substantial amount of damages. The proceeds of the Collateralised Shares to be redeemed would be offset by the Loan Proceeds Ps have to repay.

29.Mr Pun submits that it is at least arguable that D1 is entitled to forfeit the uncollateralised shares by reason of the occurrence of the Events of Default, on which Mr Wong has made no submissions.

30.Mr Pun further submits that the scope of security interest being a matter of construction of a contract cannot be resolved summarily without a trial.

31.I believe the full answer to the challenge mounted by Mr Pun can be found in the pleadings. On a fair reading of the ASOC, Ps do not plead a case of the 1^st Scope and that only the Collateralised Shares are pledged collaterals within the meaning of the SLAs. The argument based on the 1^st and 2^nd Scopes is nothing more than a red herring.

32.In §5(1) of the ASOC, the definition of “Pledged Collateral” is set out and it includes the total actual shares pledged to D1. Hence, Pledged Collateral should include the total actual shares, regardless of whether such shares are collateralised or uncollateralised.

33.In §7(3) of the ASOC, it is pleaded that each of Ps would open a securities account with D2, namely, Ps’ Security Accounts, to hold the Cangnan shares to be pledged by each of them. In §7(7), it is further pleaded that Ps deposited a total of 6,270,400 Cangnan shares on 25 May 2020 as deposited securities which constitute the Pledged Collateral and D1 shall not have any right to make any claim against them for any deficiency remaining after applying the Pledged Collateral.

34.It is abundantly clear that the case of Ps is that the security interest of D1 covers the Deposited Shares, which Ps have an equitable right of redemption. The Collateralised Shares relates to the Loan Proceeds only and not the maximum amount of the Loan permissible under the SLAs.

35.This is plain to D1 too. In §26(3) of its Defence and Counterclaim, D1 alleges the Scheme undermined D1’s secured interests in the Deposited Shares, which was its sole recourse under the SLAs.

36.Moreover, in §78 of its Defence and Counterclaim, it is pleaded that as a result of the occurrence of the Events of Default, singularly and/or cumulatively, D1 was entitled to exercise its rights under the SLAs as the sole and absolute owner of the Deposited Shares. In §79(1)(a), it further seeks a declaration that an event of default occurred under each of the SLAs resulting in the Deposited Shares being forfeited to D1. D1 itself makes no distinction between the Collateralised Shares and the uncollateralised shares. All of the Deposited Shares are Pledged Collateral within the meaning of the SLAs.

37.Mr Pun seeks to rely on an original plea of Ps in §10 which was deleted completely in the ASOC to show the correctness of the 1^st Scope. This course is simply not open to him.

38.The case of the 1^st Scope simply does not exist on the present pleadings and I agree with Mr Wong that it is a non-issue.

39.For completeness, as pointed out by Mr Wong, the Court of Appeal’s decision in Ding Huirong could not assist D1. There, it was found that there was factually a loan and security arrangement. Lam VP (as he then was) said that but for such a finding, there would have been no equity of redemption and the 2^nd defendant could retain all the sale proceeds of the shares. In the present case, it is common ground that the SLAs are loan and security agreements. The words of Lam VP (as he then was) should not be taken out of context.

40.In summary, on the authorities, the Ps’ right of redemption must be upheld. Ps are entitled to exercise such rights even if there were Events of Default. D1 should not refuse to accept Ps’ offer in the Letter to redeem the Deposited Shares by payment of the outstanding loan principal plus interest.

41.Nothing raised by D1 for the purpose of this application constitutes a valid defence to Ps’ claim on their right of redemption. I am satisfied that Ps would very likely succeed in this claim after trial.

The MLO Issue

42.Simply put, the case of Ps on the MLO Issue is that the parties are bound by the St Kitts Awards by virtue of the doctrine of res judicata or issue estoppel. D1 cannot now dispute that it was not an unlicensed money lender and is not entitled to enforce the SLAs unless the Hong Kong invokes the proviso of section 23 of the MLO (“the Proviso”) in its favour.

43.Section 23 of the MLO, together with the Proviso, reads,

“No money lender shall be entitled to recover in any court any money lent by him or any interest in respect thereof or to enforce any agreement made or security taken in respect of any loan made by him unless he satisfies the court by the production of his licence or otherwise that at the date of the loan or the making of the agreement or the taking of the security (as the case may be) he was licensed:

Provided that if the court is satisfied that in all the circumstances it would be inequitable if a money lender who did not satisfy it that he was licensed at the relevant time was thereby not entitled to so recover such money or interest or to enforce such agreement or security, the court may order that the money lender is entitled to recover such money or interest or to enforce such agreement or security to such extent, and subject to such modifications or exceptions, as the court considers equitable.”

44.Mr Wong stresses that this court should be slow to relieve money lenders who fail to comply with the MLO regulating their activities: Cheung Chow v Cheung Ng Sheong Steven (CACV 119/1993, unreported, 24.11.1993) per Bokhary JA (as he then was) at p.7. I bear in mind that D1 was not a licensed money lender at all.

45.Mr Pun also refers to Cheung Chow for the guidance given in regard to the exercise of the discretion under the Proviso. In short, the court is required to consider all the circumstances of the present case including the nature of the breach or breaches of the MLO, the consequences for the parties to the transaction and any other circumstances which may make it inequitable to hold the agreements unenforceable: Emperor Finance Ltd v La Belle Fashion Ltd and Ors. (2003) 6 HKCFAR 402 at §119 per Ribeiro PJ.

46.Mr Pun highlights that Ps are professional accredited investors and members of a listed company. They were throughout legally represented and were given ample opportunities to conduct due diligence before entering into the SLAs. Factually, Ps suffered no prejudice by reason of D1’s breach of the MLO. Mr Pun further asks this court to examine the parties’ conduct after the execution of the SLAs.

47.Mr Wong does not say much in this regard and the focus of the submissions made on behalf of Ps seems not to be on the MLO Issue. In any event, I am persuaded by Mr Pun that, without determining any factual disputes, D1 has at least an arguable case on the application of the Proviso in its favour relieving it from the breach of the MLO.

Quantum of interim payment payable

48.On the basis of my conclusion that, on balance of probabilities, it is likely that Ps’ claim will succeed based on their right of redemption of the Deposited Shares, I now proceed to assess the quantum of interim payment payable by D1.

49.Pursuant to the consent summons dated 24 May 2023, Ps agreed that D2 could deduct its costs of HK$4,257,517.60 from the Total Proceeds and then pay the balance into court. Ps also agreed that D2 could have another sum of HK$229,471.45 as interest thereon. The former payment, but not the latter, is pleaded.

50.The amount of HK$229,471.45 was demanded by the solicitors of D2, Tanner De Witt by their letter dated 31 May 2023.

51.D1 does not challenge the figures but argues that Ps are not entitled to include these two payments in their claim against D1.

52.I need not deal with this dispute. In this application, Ps do not seek to recover the D2’s costs from D1 by way of interim payment.

53.D1 claims damages for Ps’ breach of the SLAs in its Counterclaim without any particulars in addition to the Loan Proceeds plus interest thereon. I can only ignore its claim and make no deduction from the Total Proceeds.

54.In my computation of the amount payable by D1 to Ps as interim payment, I should further deduct the Loan Proceeds together with interest at the rate of 3.5% per annum. Interest should be allowed to accrue up to the date of the deadline set in the Letter, i.e. 20 July 2020 when the offer of Ps to redeem the Deposited Shares should have been accepted. This deduction is made on the assumption that D1 would eventually be allowed to rely on the Proviso and Ps have to make repayments of the Loan Proceeds with interest thereon.

55.In summary, I would allow the following sums as interim payment:

1.	Total Proceeds deriving from the Deposited Shares	HK$141,338,612
2.	LESS: Loan Proceeds	US$2,750,000 (HK$21,450,000 at the exchange rate of 7.8)
3.	LESS: Interest at 3.5% per annum up to 20.7.2020	Approximately US$10,000 (or HK$78,000 at the exchange rate of 7.8)
4.	LESS: D2’s Costs	HK$(4,257,517.60 + 229,471.45)
		HK$115,323,623 rounded off to HK$115,300,000.

Conclusions and Orders

56.For the reasons given, I accede to Ps’ application for interim payment in the amount of HK$115,300,000. To facilitate payment, I make an order that the Proceeds in Court be released and paid to Ps in satisfaction of D1’s payment of HK$115,300,000 as interim payment.

57.There is no reason why costs should not follow the event. I make an order nisi that Ps’ costs of and occasioned by the Summons including all costs reserved be paid by D1 with certificate for two counsel (Mr Wong and Mr Yip), to be taxed if not agreed.

58.It remains for me to thank Mr Wong, Mr Yip, Ms Liao, Mr Pun and Mr Lam for their valuable assistance rendered to this court in this matter.

Mr Anson Wong SC leading Mr Richard Yip and Ms Tara Liao, instructed by Patrick Chu, Conti Wong Lawyers LLP, for the 1^st to 4^th plaintiffs

Mr Chase Pun and Mr Bernard Lam, instructed by Yan Lawyers, for the 1^st defendant