Emperor Finance Ltd v. La Belle Fashions Ltd and Another
Read the full judgment text of FACV 6/2003 on BabelCite. This Court of Final Appeal judgment was delivered on 6 November 2003 before Bokhary PJ, Chan PJ, Ribeiro PJ, Litton NPJ and Millett NPJ.
Civil law – money lending – banking – appeal – primary fact findings – statutory interpretation – Hong Kong Index Futures trading – Whether Court of Appeal justified in overturning trial judge's findings of ratification of mistaken transfer of HK$2,233,522.50 from Hubbard's trading account to La Belle's finance account – Held: No; reversal required appellate court to be satisfied trial judge plainly wrong, which it was not – Trial judge's ratification finding was only conclusion consistent with undisturbed evidence of Madam Ng's insistence on maintaining 21 La Belle bought lots open during market collapse – Whether Finance engaged in unlawful banking business and taking deposits in breach of sections 11(1) and 12(1) of Banking Ordinance (Cap 155) – Held: No; clients opened finance accounts mainly to borrow rather than lend; money transfers primarily reduced indebtedness; ratified Transfer was referable to brokerage services provided by Futures and excluded from definition of 'deposit' – Whether section 18 of Money Lenders Ordinance (Cap 163) requiring memorandum 'signed personally by the borrower' applies to corporate borrowers – Held: Yes; Motel Marine line of authority not followed in Hong Kong – 'Directing mind and will' doctrine enables signature of natural person representing directing mind of corporation to be imputed directly to corporation as its own personal signature – Whether section 18(1) breached by failure to provide memoranda for over-limit advances – Held: Yes; approximately HK$2 million of La Belle claim and HK$194,000 of Hubbard claim involved additional loans in excess of documented HK$1 million facility without section 18 memoranda – Whether floating interest rate of '3% above HSBC best lending rate' satisfies section 18(2)(i) – Held: No; floating rates cannot satisfy requirement that rate be expressed as rate per cent per annum – Whether section 20(1) breached by giving documents to Madam Ng as representing corporate borrowers rather than separately as surety – Held: No; Madam Ng as directing mind received documents satisfying statutory requirement – Whether section 22(1)(c) breached by increase of interest rate to 8% above HSBC best lending rate in October 1997 – Held: No; contractual documentation did not provide for increased default interest and rate increase was market-driven general increase in ordinary rate – Whether section 18(3) discretion to enforce should be exercised – Held: Yes; discretion exercised in Finance's favour so claims against La Belle, Hubbard and Madam Ng under guarantees enforceable in full – Upholding unenforceability would be inequitable given Madam Ng's choice to maintain open positions and her receipt of daily statements keeping her fully informed – Appeal allowed with costs order nisi.
Legal issues: Reversal of trial judge's primary fact findings on ratification of the Transfer · Whether Finance engaged in unlawful banking business and taking of deposits · Application of section 18 of the Money Lenders Ordinance to corporate borrowers · Breach of section 18(1) regarding over-limit advances · Breach of section 18(2)(i) by use of floating interest rate · No breach of section 20(1) in giving documents to corporate surety · No breach of section 22(1)(c) regarding default interest · Exercise of section 18(3) discretion to enforce loans and security
Outcome: Appeal allowed; the Court of Appeal's judgment in respect of Finance set aside and the orders made by Deputy Judge Poon in favour of Finance restored. Finance's claims against La Belle, Hubbard and Madam Ng held enforceable in full under the section 18(3) discretion.
Cited by 8 cases · Cites 1 case
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FACV No. 6 of 2003 IN THE COURT OF FINAL APPEAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION FINAL APPEAL NO. 6 OF 2003 (CIVIL) (ON APPEAL FROM CACV NO. 1476 OF 2001) _______________________ (Originally High Court Action No. 12310 of 1997)
_______________________ (Originally High Court Action No. 12312 of 1997)
_______________________ Court: Mr Justice Bokhary PJ, Mr Justice Chan PJ, Mr Justice Ribeiro PJ, Mr Justice Litton NPJ and Lord Millett NPJ Dates of Hearing: 13 - 14 October 2003 Date of Judgment: 6 November 2003 _______________________ J U D G M E N T _______________________ Mr Justice Bokhary PJ: 1.I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Chan PJ: 2.I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Ribeiro PJ: 3.The two actions leading to this appeal were tried together by Deputy High Court Judge Poon. In each case there were two plaintiffs, namely, Emperor Futures Limited ("Futures") and Emperor Finance Limited ("Finance"), and two defendants. The 1st defendants were, respectively, La Belle Fashions Limited ("La Belle") and Hubbard Company Limited ("Hubbard"). Madam Amy Ng Siu My ("Madam Ng") was the 2nd defendant in both cases. 4.La Belle and Hubbard had engaged in trading the derivative investment product known as Hang Seng Index Futures as clients of Futures, with credit provided to them by Finance. Madam Ng, who owned and controlled La Belle and Hubbard, had personally guaranteed their liabilities to each plaintiff. After the stock market collapse of October 1997, the plaintiffs brought proceedings against the defendants in respect of allegedly unpaid balances on their accounts. 5.The Judge found in the plaintiffs' favour and entered judgment against La Belle and Hubbard in the respective sums of $3,018,952.73 and $1,194,948.55, together with interest. Madam Ng was found liable for those amounts as guarantor but was entitled to set off against such liabilities the sum of $2,463,982.39 held to her personal account, the set-off being apportioned to each action in proportion with the two judgment amounts. 6.The Court of Appeal, whose principal judgment was delivered by Rogers VP (with Le Pichon and Yuen JJA concurring), allowed the defendants' appeal. It did so on the basis that certain findings of fact made by the Judge had to be set aside; that Finance was unlawfully carrying on a banking business and taking deposits in breach of the Banking Ordinance (Cap 155); and that loans made by Finance were unenforceable due to breaches of the Money Lenders Ordinance (Cap 163). The claims of Futures were dismissed on a concession that it had no cause of action against any of the defendants. Finance's claims against Hubbard were also dismissed with certain consequential reimbursements ordered. The La Belle action was ordered to be remitted to the Court of First Instance to determine whether La Belle should be allowed to amend its pleadings so as to permit consideration of a possible exercise of the court's discretion under section 18(3) of the Money Lenders Ordinance to enforce non-compliant loans. 7.Finance brings this appeal by leave of the Court of Appeal pursuant to section 22(1)(a) of this Court's statute. (a) The undisputed facts (i) The opening of the accounts 8.Madam Ng caused accounts to be opened with the plaintiffs for La Belle on 29 May 1997 and for Hubbard on 2 June 1997. In each case, two accounts were opened, one with Futures and one with Finance.
9.A set of the same documents, all dated 2 June 1997, were executed in respect of Hubbard. This resulted in a trading account and a finance account (both numbered 4728) being opened for Hubbard by Futures and Finance respectively. Again, an initial deposit of HK$300,000 was made into the finance account. 10.By the time the La Belle and Hubbard accounts were established, Madam Ng had had considerable experience of margin trading. In March 1996, she had set up accounts in her own name with Finance and with Emperor Securities Limited (a company in the same group as the plaintiffs), used for trading in securities. In November 1996, she had opened similar accounts for her company, Moon Sky Limited ("Moon Sky"). These accounts were actively traded. When the La Belle and Hubbard accounts were established, trading in the Moon Sky account and in her personal account ceased. However, securities of some value continued to be held in Madam Ng's securities account and a credit balance remained in her personal finance account. Mr Wilson Lee Wai Shing ("Mr Lee"), employed as a senior marketing manager, was the individual who dealt with Madam Ng on the plaintiffs' behalf. Ms Vanessa Fan Man Seung ("Ms Fan") was the plaintiffs' managing director. (ii) Hang Seng Index Futures 11.Trading in Hang Seng Index Futures involves taking positions on the movement of the underlying stock market index during a specified month. A trade involves opening a contract with the Hong Kong Futures Exchange ("the Exchange") which might either be a contract to buy or to sell at a stated level of the index referred to as the "contract price". A person acquiring a "buy" position (referred to as a "bought lot") stands to gain if the underlying market rises and to lose if it falls. Conversely, a person acquiring a "sell" position stands to gain if the market falls and to lose if it rises. Until the open position is closed by the acquisition of an opposite matching contract, such gains or losses are unrealised and referred to as floating gains or floating losses. Thus, an open "buy" position is closed by the acquisition of a matching "sell" lot and vice-versa. The profit or loss accruing is represented by the difference in the opening and closing contract prices, accruing at the rate of HK$50 per index point difference between those contract prices. As a pre-requisite to trading and as a condition of maintaining open positions acquired, the person trading is required to provide sums of money to serve as margin to cover potential losses when closing out his positions. The minimum margin requirements are set by the Exchange and monitored by the broker. If the market moves against a client's open position so that his floating losses reach a level where the amount of margin in his account provides an insufficient cushion, the broker makes a margin call requiring further funds to be paid into the trading account if the open positions are to be maintained. If such additional margin is not forthcoming, the broker may close out the contract and crystallize the floating loss. If the market moves favourably, the customer may choose to close out his open position and crystallize the floating profit. 12.To take one example of a completed trading contract in the present case, on 24 July 1997, La Belle acquired 5 bought lots for the August contract month at the contract price of 15760. That position remained open until it was closed by La Belle's acquisition of 5 sold lots on 28 July 1997 at the contract price of 15785. The favourable difference being 25 index points, the gross gain realised (before deduction of commission and levy) was $6,250 (25 x HK$50 x 5 lots). (iii) How the accounts were operated 13.The finance and trading accounts opened by La Belle and Hubbard with Finance and Futures operated in tandem. Where, due to market movements or the acquisition of new positions, additional margin was required, funds would be transferred to the trading account from the finance account. In so far as necessary, such funds would be provided by drawing on the credit provided by Finance. Where surplus trading profits arose in the trading account, these would be transferred at the end of the trading week or on the eve of a public holiday to the finance account, reducing any debit balance or increasing any credit balance standing in that account. Although the credit extended to each of La Belle and Hubbard was stated to be limited to $1 million, Finance tended to permit that limit to be exceeded to meet margin requirements in order to maintain existing open contracts when satisfied that the overall balance, including the balances in Ng's personal accounts, showed an acceptable surplus on a hypothetical liquidation of all positions. (iv) Madam Ng's approach to trading 14.Madam Ng's approach to trading was initially conservative. La Belle would only acquire bought lots and Hubbard only sold lots. So when the market moved adversely to La Belle's bought positions (by falling), the resultant floating losses would be off-set by the floating gains made on the Hubbard sold positions. Similarly, where the market rose, Hubbard's losses would be to a greater or lesser extent off-set by La Belle's gains. This is sometimes called a "straddle" or "hedge" strategy. Where similar numbers of lots were held by La Belle and Hubbard, the range of possible gains and losses overall would be limited. 15.But on 6 October 1997, Madam Ng changed her strategy. She caused all of Hubbard's positions to be closed. La Belle, however, not only continued to hold open positions, but proceeded to increase its holdings from 14 bought lots on 6 October to 21 bought lots on 9 October. Madam Ng was speculating that the market would rise. If that occurred, La Belle's open positions would yield gains which would not be confined by Hubbard's off-setting straddle positions. Of course, removal of the straddle also meant that La Belle became vulnerable to a fall in the market. (v) The Transfer 16.In the early hours of the morning on 10 October 1997 (which was a public holiday), the entire credit balance in the sum of HK$2,233,522.50 in Hubbard's trading account was transferred to the credit of La Belle's finance account ("the Transfer"). The entries shown in the relevant accounts before and after the Transfer are as set out below.
How the Transfer came about was a matter of controversy discussed further below. (vi) Events following the Transfer 17.On 16 October 1997 Madam Ng deposited $300,000.00 in the Hubbard finance account. She deposited a further sum of $550,000.00 in that account on 22 October 1997. Why and in what circumstances this was done was disputed at the trial. 18.In the 13 trading days between 9 October 1997 and 28 October 1997 the prices of Hang Seng Index Futures fell steeply and, at some points, dramatically, resulting in the rapid accumulation of large floating losses in La Belle's trading account, as shown in the following table.
19.Madam Ng sought to sustain her open positions, no doubt in the hope that the market would turn, allowing her to re-coup her losses. On 23 October 1997, she agreed to sell 20,000 HSBC shares held to her personal account so that the proceeds could be used to support the La Belle open positions. The sale realized about $3.8 million and, after setting off the then debit balances on her personal account, a balance of $2,465,394.43 became available for that purpose. However, with the continuing precipitous deterioration of the market, the La Belle positions were closed by Futures on 28 October 1997. As the plaintiffs alleged that there remained unpaid negative balances in the La Belle and Hubbard accounts, the present action ensued. (b) The facts disputed at the trial 20.At the trial, the Judge rejected the defendants' allegations of misrepresentation, undue influence, failure to make a proper demand for payment and breaches of the rules of the Exchange. These allegations were not pursued on appeal and are not live issues in this Court. 21.However, two issues on which the evidence conflicted remain material, namely, as to (i) whether the Transfer had been ratified by Madam Ng; and (ii) whether Madam Ng had instructed Mr Lee to close the La Belle positions on 24 October 1997. (i) The Judge's findings 22.The Judge rejected Madam Ng's version of the events in its entirety. Although he was troubled by certain prior contradictions in the evidence of Mr Lee, he resolved his doubts relying on the evidence as a whole, including the testimony of Mr Eric Lai Hing Wah ("Mr Lai") who had formerly been employed by the plaintiffs as a settlements clerk, and found as follows :-
(ii) The Court of Appeal's intervention on the facts 23.The Court of Appeal overturned findings (2) and (3) above, which bear on whether the Transfer was ratified by Madam Ng. The other three findings were left undisturbed. It is of particular significance to note that the Court of Appeal questioned neither the Judge's rejection of Madam Ng's evidence nor his finding that she had not given any closing-out instructions. 24.The Judge's findings relevant to the Transfer were reversed on the grounds :-
(c) The Court of Appeal's reversal of the Judge's findings was unjustified 25.With respect, for the reasons developed below, it is my view that the Court of Appeal's reversal of the Judge's findings, which were findings of primary fact, was unjustified. Such a reversal required the Court of Appeal to be satisfied, even without the advantages enjoyed by the Judge who received the evidence first hand, that the Judge was plainly wrong and that his decision ought to have been the other way: Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336 at 349-350. In my view, far from being plainly wrong, the Judge was entitled to approach the evidence in the way that he did and entitled to reach his conclusion that the Transfer had been ratified. Indeed, that was the only conclusion consistent with the undisturbed evidence as to Madam Ng's insistence on maintaining La Belle's open positions in the then prevailing market conditions. (i) Mr Lee's contradictory evidence 26.There is no doubt that Mr Lee had contradicted himself, as the Judge recognized and as was accepted by Mr Lee himself. It is, however, important not to overstate the nature or extent of the contradiction. 27.The passage in Deputy Judge Poon's judgment where this matter is dealt with begins with the heading: "The Transfer, failure to reverse and to close out positions." The passage then states as follows :-
The judgment then proceeds to examine the evidence of what had occurred after the making of the Transfer, beginning with an examination and rejection of Madam Ng's version of events touching on ratification. 28.It is clear that the Judge was seeking to deal separately with three issues: (i) the Transfer, (ii) its non-reversal, and (iii) the alleged closing-out instructions. It was in relation to the first and relatively narrow issue as to whether the Transfer had been authorized or erroneous, that the Judge took the view - as he was entitled to - that, while not satisfied with Mr Lee's explanation of his earlier, inaccurate statement, Mr Lai's first-hand evidence, together with contemporaneous records of the making of the Transfer, established that the later, "error" version was correct. Indeed, as Rogers VP commented, this was "a conclusion to which the judge could scarcely have failed to have arrived." 29.However, Rogers VP appears to have regarded the Judge as falling into error by relying on Mr Lai's evidence illegitimately for a much wider purpose, that is, as somehow supporting the conclusion that Madam Ng had ratified the Transfer. He was also of the view that the Judge had failed to give sufficient weight to the contradiction in assessing Mr Lee's general credibility. His Lordship stated :-
He concluded :-
30.If it were in fact the case that Mr Lee had somehow contrived to "remember" only very late in the day that Madam Ng had agreed to leave the transferred funds in the La Belle account without having previously made any such suggestion, this would have been cause for the gravest concern as to his credibility. However, this was not in fact the position. The allegation that Madam Ng had expressly agreed to the Transfer and had then acted consistently with such agreement by making deposits into the newly-depleted Hubbard account had appeared in Mr Lee's first witness statement. It was not a recent invention and Mr Lee's evidence at the trial did not involve a contradiction of what he had said earlier.
31.Having disposed of the first, "Transfer" issue, the Judge returned to Mr Lee's evidence on the question of ratification after having considered and rejected Madam Ng's evidence in that context, stating :-
32.The Judge was therefore looking quite separately at the conflict of evidence between Madam Ng and Mr Lee as to whether she had agreed to the Transfer and had in the forefront of his mind the impact which Mr Lee's inconsistent evidence had on his credibility. The Judge was quite entitled to find that there had been ratification and, as appears from what follows below, he was perfectly correct to state that other evidence - indeed, other objective and undisputed evidence leading to findings which were left undisturbed by the Court of Appeal - was wholly consistent with that finding. (ii) Keeping the La Belle positions open necessitated ratification 33.As mentioned above, Madam Ng had decided on 6 October to adopt the risky strategy of undoing her straddle position and maintaining 21 open bought lots in the La Belle account. There was no dispute between the parties that, at least until 24 October 1997, her stance had been to maintain those open positions in the teeth of the falling market. Although she testified that she had given Mr Lee closing-out instructions on 24 October, the Judge did not believe her and found instead that she had continued to insist on keeping La Belle's positions open until their eventual liquidation by Futures on 28 October. That finding was not disturbed by the Court of Appeal. 34.After the Transfer, Madam Ng was, as usual, in daily receipt of statements showing the position on her accounts with the plaintiffs. She was undoubtedly fully aware of the plummeting market and that very large floating losses were being incurred on the La Belle account, as set out in paragraph 18 above. She was an experienced trader and was undoubtedly aware that the positions could only be kept open if her floating losses were adequately covered by margin. Prior to 23 October, she was not herself making any fresh margin payments but the 21 positions were nevertheless being kept open at her request. It therefore had to follow, and she plainly must have realised, that the necessary margin was being supplied from the funds transferred from the Hubbard account, the Transfer being the only possible source of such funding. 35.At the Court's request, Mr Anthony Neoh SC, appearing with Mr Denis Yu on behalf of Finance, prepared a schedule calculated on the basis of the figures contained in the account documents which were in evidence. The schedule shows the extent to which the La Belle finance account would have gone into debit if the Transfer had immediately been reversed out while keeping the La Belle positions open. The projected debit balances are as follows :-
36.It is inconceivable that Madam Ng could somehow have thought that she could insist on reversal of the transfer while at the same time insisting on keeping the 21 La Belle positions open without furnishing large amounts of fresh margin. Indeed, she was plainly under no such illusion since, on 23 October, she accepted the necessity of selling her HSBC shares to make the proceeds available in support of the open positions. The compelling conclusion is that after discovery of the mistaken Transfer, Madam Ng had agreed to utilise the transferred funds as margin with a view to maintaining La Belle's open positions and that when, by 23 October, those funds had been eaten up by margin calls, she had agreed to make further funds available to support those positions by selling her bank shares. (iii) Deposits into the Hubbard account 37.The deposits of $300,000 and $550,000 respectively made by Madam Ng into the Hubbard account on 16 and 22 October constitute another piece of evidence consistent with Madam Ng having ratified the Transfer. But for the Transfer, Hubbard would have had an overall credit balance and, since all its trading positions had been closed, there were no margin requirements and no point would have been served in depositing a total of $850,000 into its finance account. On the other hand, such payments were wholly consistent with Madam Ng's acknowledgment that Hubbard had been left with a large liability to Finance after the Transfer and that there was accordingly a need to reduce the deficit. 38.The Judge noted Madam Ng's assertion that she had initially intended to deposit the two sums for the credit of La Belle's account but had been prevailed upon by Mr Lee to credit them to Hubbard instead. He also noted her evidence that she had consequently altered the account number written on the pay-in slip for the first payment, changing it from "4718" for La Belle to "4728" for Hubbard. However, the Judge rejected this evidence, stating that he could not accept that Madam Ng would, as late as 22 October, compliantly fall in with Mr Lee's suggestion if he was in fact still refusing to reverse the Transfer at her request. This he was entitled to do. One notes in passing that Hubbard's account number appeared with no sign of alteration on the second pay-in slip dated 22 October. In any event, the Judge's findings on the deposits into the Hubbard account were not disturbed. (iv) No reason initially to refuse reversal of Transfer 39.One might add finally in this context that no one has suggested any reason why Mr Lee or the plaintiffs should have insisted on retaining the funds in the La Belle account against Madam Ng's wishes when the erroneous Transfer was first discovered. If it had been reversed out immediately, then the La Belle and Hubbard accounts would have reverted to their state as at 9 October 1997, shown in paragraph 16 above. If this had happened, Madam Ng would not have been subject to any demands for funds for the Hubbard account but would have faced such demands in relation to La Belle, in the light of her strategy of keeping its positions open. It really made no difference to the plaintiffs whether the transferred funds remained with La Belle or reverted to Hubbard or whether margin calls went out to La Belle or to Hubbard. The overall financial position would have been the same and Madam Ng had in any case guaranteed both accounts. (v) Consequences 40.It is accordingly my view that the Court of Appeal erred in overturning the Judge's findings regarding ratification of the Transfer, in ordering that the Hubbard accounts be reconstituted and in dismissing the claim against Hubbard. Subject to the questions of illegality and unenforceability discussed below, the Judge's findings as to the net balances due from La Belle and Hubbard to Finance must be restored. (d) The Banking Ordinance (i) The approach of the Court of Appeal 41.The Court of Appeal rested its decision to reverse the Transfer on a second and alternative ground. It held that in operating the trading and finance accounts in tandem, and in particular by arranging for amounts surplus to margin requirements in a client's trading account held with Futures to be periodically transferred to the finance account held with Finance, Finance was engaging in the business of banking and of taking deposits in breach of sections 11(1) and 12(1) of the Banking Ordinance. 42.Rogers VP explained his reasoning as follows :-
43.The Court of Appeal then turned to the Transfer and held that it constituted an illegal banking deposit with Finance, presumably made by Hubbard. In consequence, it decided that the Transfer had to be reversed. Rogers VP put this in the following terms :-
44.In reaching this conclusion, the Court of Appeal rejected the argument that even if there had been a contravention, section 129(1) of the Banking Ordinance expressly provided that this should not render the contract unenforceable. 45.With respect, it is my view that the Court of Appeal's conclusions as to illegality and unenforceability under the Banking Ordinance are untenable. (ii) The statutory provisions 46.The sections said to have been contravened materially provide as follows :-
47.The words "banking business" and "deposits" are therefore important. "Banking business" is defined by section 2 as meaning :-
Likewise, "deposit" :-
(iii) "Receiving from the general public" 48.Finance could only be carrying on a banking business in breach of section 11(1) if it was receiving money from the general public. There is simply no basis for treating the relevant monies, whether those received by Finance in the ordinary course of operating the linked trading and finance accounts or those received on the Transfer, as monies received "from the general public." 49.The main purpose of clients like La Belle and Hubbard opening a finance account was to avail themselves of a "revolving margin loan facility" granted by Finance. In other words, they were mainly borrowing from and not lending to Finance. This was made clear in the Loan Agreement and the Facility Letter. 50.If a transfer to a finance account has the effect only of reducing the client's indebtedness to Finance under the credit facility, this obviously cannot be the making of a deposit since it does not involve a "loan of money" but the repayment of a debt. It is true that there may be cases where a client who has traded profitably transfers monies surplus to his margin requirements from his trading account to his finance account, building up a credit balance which may be payable to him on demand. But it is impossible to see how receiving trading surpluses from such a client can qualify as receiving money "from the general public." 51.In my view, Mr Neoh was correct when he submitted that :-
(iv) The Transfer was not a "loan" or not one "referable to the provision of services" 52.It is in any event highly questionable whether the ratified Transfer ever constituted a loan. Even if it did, it was, in my view, referable to the provision of brokerage services to La Belle.
53.One might add that the Court of Appeal's statement that "the plaintiffs' transfer of the Hubbard money should be looked at on the basis that the plaintiffs cannot take the benefit of that deposit into the La Belle finance account" appears to involve a misapprehension. There was never any question of the plaintiffs taking the benefit of the deposit. The beneficiary was La Belle and the sums were in fact used to meet La Belle's margin requirements to keep its open positions alive. As pointed out above, if the Transfer were to be reversed, the impact would be felt, not by Futures or Finance, but by La Belle in that its liabilities to Finance would be increased by the reversed amount. (v) Section 129(1) of the Banking Ordinance 54.Section 129(1) reads as follows :-
55.Finance relied on this provision, contending that any contravention of the Banking Ordinance did not preclude it from enforcing its contracts against the defendants. The Court of Appeal rejected the submission, holding :-
56.I am unable to agree. The power to make transfers from trading accounts to finance accounts was spelt out in the contractual documentation, more precisely in the Authorisation which made Finance the agent of its clients empowered, among other things, in its "absolute discretion" to :-
57.That power would be exercised by Finance in respect of surplus funds in the trading account to reduce a debit balance or to augment a credit balance in the finance account. Accordingly, if operating the accounts in such manner amounted to a contravention of the Ordinance, the relevant acts, ie, the transfers, were agreed to by the parties on the entering into of the relevant contracts, with the result that such contracts are not rendered unenforceable. (e) The Money Lenders Ordinance 58.Having itself raised issues under the Money Lenders Ordinance, the Court of Appeal held, after hearing further submissions, that (i) there had been an incurable breach of section 20(1) so that the guarantees given by Madam Ng to Finance were unenforceable; (ii) that the memorandum required by section 18 was insufficient and in breach of sections 18(2)(d) and 18(2)(i); and (iii) that Finance was in breach of section 22(1)(c) which prohibits the charging of a higher rate of interest on default. As mentioned above, the question of a possible exercise of discretion under section 18(3) was ordered to be remitted for consideration by the judge at first instance. (i) The relevant provisions of the Money Lenders Ordinance 59.Section 18(1) places certain obligations on money lenders in relation to a memorandum of the loan agreement, providing materially as follows :-
60.The content of the required memorandum is prescribed in the following terms :-
61.The relevant obligations of the money lender to a surety are to be found in section 20 :-
62.The court is given a discretion in relation to enforceability by section 18(3) in relation to the principal loan and, where there has been a breach of section 18, in relation to any security taken :-
63.Section 22 makes certain contractual terms illegal, including the charging of increased default interest, giving the court a discretion as to enforceability :-
(ii) Does section 18 apply to bodies corporate? 64.In the Court of Appeal, the argument concerned the sufficiency of the Memorandum for the purposes of section 18. However, in this Court, relying on authorities from Australia and New Zealand, Mr Neoh contended in the first place that section 18 has no application at all where the loan is made to a corporation. This was a possible argument noted by Mr Bob Allcock in a valuable article ("The Money Lenders Ordinance" (1981) 11 HKLJ 293 at 320-321) published shortly after the Ordinance was enacted in Hong Kong. 65.In Re British Games Ltd [1938] Ch 240, Simonds J had assumed that the English equivalent to our section 18, namely, section 6 of the Moneylenders Act 1927, applied to corporate borrowers, holding that a signature by a director and the secretary "for and on behalf of" the company was sufficient to meet this requirement. 66.However, in Motel Marine Pty Ltd v I A C (Finance) Pty Ltd (1964) 110 CLR 9, the High Court of Australia had to construe the Lending of Money Act 1915 (Tasmania), section 13 which, like our section 18, made a money lender's contract unenforceable unless "a note or memorandum in writing of the contract is made and signed personally by the borrower". A strong majority (Dixon CJ and Kitto, Taylor and Owen JJ) concluded that this language excluded signature by an agent and, since companies could only act through agents and not "personally", that the legislature had accordingly not intended the word "borrower" in that section to extend to corporations. Menzies J, dissenting, was of the view that a company could comply by affixing its seal on the document in accordance with its constitution. 67.The majority decision was followed in Latec Investments Ltd v Hotel Terrigal Pty Ltd (1965) 113 CLR 265 at 280 and, in New Zealand, in Re Mountain View Property Ltd [1972] NZLR 1 and in Re Securitibank Ltd [1978] 1 NZLR 97, where section 8 of the Moneylenders Amendment Act 1933 was in similar terms. 68.There is accordingly substantial persuasive authority in support of Mr Neoh's argument. However, putting such authority to one side for the moment, I have to say, with respect, that I find the conclusion that insertion of the word "personally" results in the exclusion of all corporate borrowers from all the section 18 protections surprising. 69.The Ordinance nowhere states that section 18 is inapplicable to corporations, unlike, for instance, section 3 of the Money Lenders (Amendment) Act 1959 (Vict) which provides that the Act does not apply to any loan made to any body corporate (see Ocean Road Motel Pty Ltd v Pacific Acceptance Corp Ltd (1962-1963) 109 CLR 276). On the contrary, it is clear that in Hong Kong the Ordinance does apply to corporations generally. Thus, Schedule 1, Part 2 contains exemptions for :-
It is notable that since the year 2000, there has also been a general exemption for corporations licensed under Part V of the Securities and Futures Ordinance (Cap 571) to carry on a business in securities margin financing: Money Lenders Ordinance, Schd 1, Pt 1, para 10 - an exemption relevant to, but too late to benefit, the plaintiffs in the present proceedings. 70.Secondly, section 18 is at the core of the protection given by the legislation and imposes three obligations on money lenders : (i) to make a memorandum containing the salient terms of the loan; (ii) to obtain the borrower's signature on the memorandum; and (iii) to give the borrower a copy. The effect of the Motel Marine line of cases is to relieve money lenders of all three obligations vis-à-vis corporate borrowers on the sole ground that companies cannot "sign personally". This undifferentiated and sweeping result appears unjustified. Even if a company is considered unable to sign the memorandum "personally", it is hard to see why it should be deprived of the protection of obligations (i) and (iii), both of which represent basic safeguards which are perfectly capable of operating in relation to corporations. 71.Thirdly, this exclusion of corporate borrowers from the section 18 protections is odd since a corporate surety of an individual's loan clearly has a right under section 20 of the Ordinance to be given, inter alia, a copy of the section 18 memorandum, the security being made unenforceable if there is non-compliance. If a corporate surety merits this protection, why not the corporate borrower who assumes primary liability? 72.In Motel Marine, the policy justification for excluding corporations from the section was explained as follows by Dixon CJ :-
73.In my view, the premise that companies' boards of directors can be expected to have no difficulty understanding ordinary or even extraordinary business transactions cannot safely be accepted in Hong Kong. Experience in our courts tends to show that in all sorts of contexts, companies are set up which are wholly-owned and operated by individuals who lack commercial, financial and legal sophistication and are likely to be vulnerable to exploitation by unscrupulous money lenders. Such persons might, for example, be persuaded to accept loans on behalf of their companies for investment or speculative purposes and personally guarantee the corporate debt. It is equally desirable that the safeguards of section 18 should be applicable in such cases. This is reflected in Schd 1 Pt 2. Apart from the specified types of commercial loans (such as those secured by the giving of registrable securities, intra-group loans and trade financing loans), only loans to companies having a paid up capital of at least $1 million are exempt. The protections are therefore generally intended to apply to less substantial or commercially experienced companies. 74.If companies are excluded from section 18, then the section 20 protection intended for sureties (whether corporate or individual) becomes deficient. The money lender is only required by that section to give the surety a copy of the memorandum required by section 18. Since no such requirement would apply to a corporate loan, the elementary safeguard of the surety being given a signed copy of the memorandum setting out the terms of the loan to the principal debtor would be missing. 75.Application of the Motel Marine line of cases in the context of Hong Kong would therefore have unsatisfactory consequences and in my view, those authorities should not be followed in this jurisdiction. 76.The Motel Marine approach rests on three propositions, namely :-
77.The first proposition, namely, that "signed personally" excludes signature by an agent, is well-established and should not be disturbed: see, eg, The Queen v Justices of Kent (1873) LR 8 QB 305, 307; In re Whitley Partners Ltd (1886) 32 Ch D 337; and In re Prince Blücher [1931] 2 Ch 70. 78.However, in the light of more recent developments in the case-law, the second proposition (based on decisions like Ferguson v Wilson (1866) LR 2 Ch App 77 at 89) may now be regarded as excessively narrow. It is of course true that a corporation is an artificial person and cannot physically append a signature to a document. However, the courts have been increasingly willing to construe statutory language which on its face may be thought to require personal acts or states of mind as applicable to corporations notwithstanding their status as artificial persons. 79.This may be illustrated by contrasting the decisions of the English Court of Appeal in Hirst v West Riding Union Banking Company Limited [1901] 2 KB 560, and in UBAF Ltd v European American Banking Corp [1984] 1 QB 713.
80.The UBAF case proceeded on the footing that the act of an agent was sufficient for the purposes of section 6 of Lord Tenterden's Act. However, the courts' increasing willingness to impute the acts and mental states of natural persons to corporations does not rest solely on the law of agency. They have reached the same result applying the "directing mind and will" doctrine. 81.That doctrine, which has been applied in both civil and criminal cases, originated in Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705, where Viscount Haldane LC stated :-
82.As Eveleigh J pointed out in R v Andrews-Weatherfoil Ltd [1972] 1 WLR 118 (CA), the doctrine makes it :-
As appears from the passage cited above, Viscount Haldane LC identified such persons as members of the corporation's constitutional organs or persons on whom those organs conferred sufficient status and authority to qualify as the corporation's directing mind and will. 83.In Tesco Supermarkets v Nattrass [1972] AC 153, Lord Diplock approached that question in the following terms :-
84.El Ajou v Dollar Land Holdings plc [1994] 2 All ER 685, is a recent example where the doctrine's operation was considered in the context of asking whether, for the purposes of imposing a constructive trust, a company could be regarded as having "knowingly received" the proceeds of a fraud.
85.In my view, the "directing mind and will" doctrine enables section 18 to be construed as applying to bodies corporate without doing violence to the words "signed personally". Where, adopting the criteria mentioned above, a natural person qualifies as a corporation's directing mind and will, his act of signing a money lender's memorandum should in law be imputed to the corporation directly and so satisfy the section 18 requirement. Such a person would not be regarded for this purpose as acting merely as the corporation's agent but signing as the corporation itself - which is no different from saying "as the corporation signing personally". 86.The requirement that the memorandum be "signed personally" would continue not to be fulfilled if a mere agent (who does not qualify under the directing mind and will doctrine), say, the company's solicitors or an employee having no special authority, were to purport to sign on the company's behalf. Such a signature could not be regarded as the personal signature of the company. 87.Accordingly, while the courts should approach the requisite status and authority of the person signing pragmatically, it would be prudent for money lenders contemplating a loan to a corporate borrower to obtain the signature of at least one director of the corporation backed by a resolution of the board (which could no doubt be drawn in a standard form) duly authorizing signature of the memorandum by that director in accordance with the company's articles, to ensure that the signature obtained properly qualifies as the company's own signature under section 18(1). 88.In the light of the abovementioned Australian and New Zealand cases, noted academically in Hong Kong, it is likely that money lenders will have made loans to corporate borrowers which may still be current in the belief that section 18 does not apply and so without complying with its requirements. In such cases, during what one might call a reasonable transitional period, in the absence of any independent reason for treating the loan as unenforceable, the court should exercise its discretion under section 18(3) in favour of enforcing those transactions and any security given, notwithstanding failure to comply with section 18. 89.In the present case the memorandum was in each case signed by Madam Ng within the respective chops of La Belle and Hubbard affixed at the foot of the document. She provided Finance with a certified copy of a board resolution which, while authorizing the signing of the various contractual documents, did not authorize signing the relevant memorandum. However, Madam Ng was a director and owner of all but one of each company's issued shares. She undoubtedly beneficially owned and controlled both companies and is to be regarded in law as representing the directing mind and will of each of them. Accordingly, there was no breach of section 18(1) of the Ordinance in respect of the $1 million credit facility as the requirement for a memorandum "signed personally" by the borrowing companies was met. (iii) Is there a breach of section 18(2)(d)? 90.Section 18(2)(d) makes it a requirement that :-
91.The relevant paragraph of the Memorandum states :-
92.The "Facility" clause in the Facility Letter states as follows :-
93.Mr John Griffiths SC, appearing with Mr Kenneth C L Chan for the defendants, submitted that the italicised words rendered uncertain the amount of the loan principal and therefore made the Memorandum insufficient for the purposes of of section 18(2)(d). 94.I do not agree. On the true construction of the Facility Letter, the principal amount of the loan was $1 million, representing the maximum amount that could be drawn thereunder (to be utilised on a revolving basis). That amount was duly shown in words and figures so that the Memorandum was not deficient in this respect. The italicised words do not alter or render uncertain the amount of the loan then established but refer to potential future variations, involving fresh loans increasing or reducing that credit limit. 95.However, Finance faces a serious difficulty, not under section 18(2)(d), but under section 18(1). As we have seen, Finance permitted adequately secured borrowers to exceed the agreed credit limit so as to fund excess margin requirements needed to preserve open positions held with Futures. The granting of such additional credit would constitute the making of additional loans which attracted obligations under section 18. But it was no doubt quite impracticable to execute a fresh section 18 memorandum each time before the credit limit was so exceeded. However, absence of a memorandum made those additional loans prima facie unenforceable. This is no longer a problem where the finance company is able to secure registration under Part V of the Securities and Futures Ordinance so as to qualify for the exemption provided by Schd 1, Pt 1, para 10 of the Money Lenders Ordinance. 96.However, at the time relevant to these proceedings, no such exemption was available. The amounts claimed by Finance, in the sums of $3,018,952.73 and $1,194,948.55, represent claims for loan principal granted to La Belle and Hubbard in excess of the $1 million credit limit agreed in each case. Those additional loans were unsupported by section 18 memoranda and therefore involved breaches of 18(1). Accordingly, subject to discretionary considerations, approximately $2 million of the claim made in La Belle's case and some $194,000 in Hubbard's case represent claims to balances of unenforceable loans. (iv) Is there a breach of section 18(2)(i)? 97.Section 18(2)(i) relevantly provides that :-
98.Interest is dealt with in several of the documents signed with Finance.
99.It was argued by the defendants that there was a breach of section 18(2)(i) because the interest rate, as set out in clause 2(1) of the Loan Agreement, is wholly uncertain and left at large, being such rate as might be specified by Finance from time to time. The amount shown in the Memorandum was therefore inaccurate and the loan falls foul of section 18(2)(i). 100.I do not accept that argument. As a matter of construction, the parties plainly intended the Loan Agreement to be read together with the Facility Letter, the latter document stipulating the rate (at 3% above the HSBC best lending rate) as envisaged by clause 2(1) and agreed to by La Belle and Hubbard (who signed at the foot of the Facility Letter). That rate is reproduced in the Memorandum. I ought to state parenthetically that since no argument was addressed concerning any possible difficulties flowing from the fact that the contract was contained in separate documents, that issue is ignored in this judgment. This should not be taken to suggest that such a practice is necessarily valid for the purposes of the Money Lenders Ordinance. 101.The Court of Appeal held, however, in my view correctly, that section 18(2)(i) was breached in a different manner. Finance expressed the interest rate as 3% above the HSBC best lending rate and therefore failed to "set out the rate of interest charged on the loan expressed as a rate per cent per annum." 102.The wording of section 18(2)(i) does not accommodate use of such floating rates. The policy of section 18 is to ensure that potentially unsophisticated borrowers are left in no doubt as to how much money exactly they are borrowing by way of principal and what interest they will have to pay on that loan, to which end, such information has to be set out and expressed in the prescribed manner in the memorandum to be signed by the borrower. An interest rate of "3% above the HSBC best lending rate" does not comply with this requirement. The rate is not 3% per annum, but 3% over the - unexpressed - interest rate per cent per annum reflecting the HSBC best lending rate over the period in question. Moreover, it is a rate which obviously changes as the HSBC best lending rate changes. It is therefore not capable of being expressed as a definite rate per cent per annum at the time of signing the Memorandum. 103.It is true, but irrelevant, that the HSBC best lending rate is ascertainable with relative ease and is a perfectly reasonable rate of interest upon which to base interest charges, favouring the borrower if that rate falls. In the context of money lender protections, it is not to be assumed that the borrower would have access readily or at all to what such a rate is at any one time. Moreover, a rate which fluctuates may make it difficult for the borrower to compute the interest payable since different rates for different periods would have to be applied. More fundamentally, the borrower could not know when taking the loan exactly what rate of interest he will be charged over the life of the loan. 104.This construction of section 18(2)(i) could cause difficulties to some money lenders by preventing them from charging interest at floating rates which may be thought to be commercially desirable. It must, however, be recognized that the Ordinance's policy of protection necessarily involves placing constraints on the way money lenders do business. They are not licensed banks and are not subject to the same prudential and regulatory requirements and so cannot expect to enjoy all the commercial advantages of banks. 105.In practice, money lenders like Finance may be able to claim exemption after obtaining registration under Part V of the Securities and Futures Ordinance and may therefore be able to operate using reasonable floating interest rates. Others, who do not fall within any generally exempted class but wish to use such rates and can show that this would be commercially justifiable and unobjectionable, may find that applications for specific exemption under section 33B of the Ordinance could avail them. But where such exemptions are unavailable, the policy of the Ordinance is to exclude use of floating rates. (v) Is there a breach of section 20(1)? 106.The Court of Appeal held that Finance was in breach of this section because, although it gave a set of the stipulated documents to Madam Ng who signed the Memorandum acknowledging receipt, she received them for the companies and was not given separate copies in her individual capacity of guarantor. 107.Rogers VP held that this was a breach with particularly serious consequences for the money lender first, because it was not a curable breach; and secondly, because "a court has no discretion to enforce the security if the provisions are contravened." 108.I am unable to agree. The requirement imposed by section 20(1) is to give to the surety copies of the section 18 memorandum, of the security instrument, if any, and of a signed statement from the money lender giving details of the loan. Whether a surety was or was not given these documents is a question of fact. Here, Madam Ng, who was the directing mind of the principal debtor companies, was plainly given a set of the documents. There is nothing in the section that requires the court to disregard that fact simply because she can be regarded as having received them in two capacities, ie, as surety and as corporate borrower. 109.There was accordingly no breach of section 20(1). Although, given this conclusion, the question does not arise, it is my view (subject to what is said about section 18 breaches below) that if there had been a breach, it would not have been incurable. Rogers VP, who took a contrary view, stated :-
110.Section 20(4) states :-
Section 20(4) is therefore expressly dealing with breaches of 20(1) and expressly proceeds on the footing that such defaults do continue, since it provides that the security cannot be enforced "while the default continues". This, in my view, necessarily implies that the default is curable by eventual compliance, whereupon the enforceability of the security revives. Thus, for instance, where the documents required to be given to the surety all exist or can be brought into existence but the money lender has simply omitted to give one or more of them to the surety, the security is unenforceable until such time as the default is cured by the surety being given the required documents. Where a default is so curable, there is no need to invoke the court's discretion. 111.However, where the money lender fails to ensure that the borrower signs a section 18 memorandum before the money is lent or the security given, the money lender will necessarily be in breach of both sections 18 and 20. He will be unable to give to the surety a copy of the memorandum duly made under section 18, this being a default which cannot be cured by subsequently drawing up a compliant memorandum since the section ties unenforceability of the loan to the absence of a signature before lending the money or taking the security. 112.Section 18(3) deals with this situation, giving the court a discretion to permit enforcement in cases where the enforceability of the security is affected by virtue of some breach of section 18. Section 18(3) states :-
113.Since, as indicated above, it is my view that the Memorandum is rendered insufficient by breaches of section 18, the section 18(3) discretion arises in respect of enforcing both the principal debt and Madam Ng's guarantee in the present case. Rogers VP's statement that the court has no discretion to enforce the security in cases of non-compliance with section 20 plainly requires qualification and is incorrect in the present context. (vi) Is there a breach of section 22(1)(c) 114.Although a finding was not explicitly made, that the Court of Appeal apparently considered Finance to have been in breach of section 22(1)(c) which prohibits the charging of a higher rate of interest on default. Rogers VP stated :-
115.There was in fact no evidence of any such breach.
(vii) The court's discretion under section 18(3) 116.By way of summary, it is my view that Finance committed two breaches of the Money Lenders Ordinance, namely :-
117.The question which therefore arises is whether the Court should exercise its discretion under section 18(3) to permit Finance to enforce its claims, wholly or in part, and with or without modification, against La Belle, Hubbard and, under the guarantees, against Madam Ng. This discretion can only be exercised if the court is "satisfied that in all the circumstances it would be inequitable that any such agreement or security which does not comply with this section should be held not to be enforceable." 118.The Court of Appeal took the view that the La Belle action had to be remitted to the judge to determine whether La Belle should be allowed to amend its pleadings so as to permit consideration of a possible exercise of the court's discretion under section 18(3). I do not consider that course necessary. The amendments are, at this stage, matters of formality. Submissions were made at the hearing on the exercise of discretion and this Court, having all the materials necessary to deal with the matter, should do so at once. 119.In exercising its discretion the court should examine the breach or breaches in question, their consequences for the parties to the transactions and any other circumstances which may make it inequitable to hold the agreements unenforceable. In my judgment, it is clear that upholding unenforceability in this case would be inequitable and accordingly that the Court's discretion should be exercised in Finance's favour so that its claims against La Belle, Hubbard and Madam Ng are enforceable in full. 120.In relation to the first breach, involving section 18(1) and the over-topping credits :-
121.Similar considerations apply in respect of the second breach. In particular, while the Memorandum, by using a floating rate, failed to satisfy the requirements of section 18(2)(i), the amount of interest charged was in fact calculated and stated in dollars and cents in the statements Madam Ng received on a daily basis. (f) Conclusion 122.I would accordingly allow this appeal and set aside the judgment of the Court of Appeal in respect of Finance, restoring the orders made by Deputy Judge Poon in favour of Finance. 123.I would also make an order nisi that Finance have the costs of this Appeal and in the Court of Appeal. 124.I would also give the following directions :-
Mr Justice Litton NPJ: 125.I agree with Mr Justice Ribeiro PJ's judgment, and would add only a few words regarding the Court of Appeal's reversal of Deputy Judge Poon's findings of primary fact. 126.Deputy Judge Poon had clearly made a careful evaluation of the evidence, and in particular the change in Mr Lee's stance regarding the mistaken transfer of $2,233,522.50 from Hubbard's trading account to La Belle's finance account. In overturning the trial judge's findings, the Court of Appeal focussed on his remark to this effect : That, in the light of the settlement clerk's evidence, he did not need to deal with the shift in Mr Lee's evidence further. Had the judge actually stopped there, then perhaps there might have been cause for concern on the appeal, for the settlement clerk's evidence did no more than acknowledge that a clerical mistake had been made : It did not deal with the point as to whether the transfer was authorized or ratified. But, as is clear from the pages following this remark, the judge did in fact deal further with that point. This was, as Mr Justice Ribeiro PJ has pointed out in his judgment, in a sense inevitable because Madam Ng's subsequent conduct (after the error was discovered) was highly relevant to the question whether Mr Lee was speaking the truth when he said that Madam Ng was content for the money to stay in La Belle's finance account. 127.The Court of Appeal's analysis of the judge's findings was, with respect, too narrowly focussed. If one stepped back and looked at the wider picture, the story becomes clear. Madam Ng was taking a gamble that the market was going to turn in her favour. In evidence she did say that she had wanted the money to be transferred back to Hubbard to enable Hubbard to enter into "sell" contracts : If this had been accepted it might have given some credence to her assertion. But this piece of evidence was disbelieved by the trial judge, and there was no challenge to this finding in the Court of Appeal. This was, in any case, not the full story : By the end of trading on Friday 17 October 1997, the unrealized loss in La Belle's account was well in excess of the credit limit of $1 million, and if the $2,233,522.50 had been taken out of that account there would have been an immediate margin call on La Belle. So the picture emerges thus : Despite the falling market Madam Ng wanted her "buy" positions kept open in the La Belle account : This could only have been done if the $2,233,522.50 had remained in that account to sustain the margin requirements. 128.In any case, the change in the plaintiffs' case was not as "fundamental" as the Court of Appeal had thought : La Belle and Hubbard were Madam Ng's trading entities, and she was the guarantor on both corporate accounts. It made no practical difference to the parties where precisely the liability was owed. The "transfer" only became significant when the Court of Appeal held that Emperor Finance Ltd was engaging in the business of banking and of taking deposits in breach of ss.11(1) and 12(1) of the Banking Ordinance : A point far removed from the minds of the parties in October 1997, and in any case thoroughly bad, for the reasons explained in Mr Justice Ribeiro PJ's judgment. 129.As I see it, the inherent probabilities, arising from the undisputed evidence and the judge's findings of primary fact, all tended to support the plaintiffs' version of events. There was no warrant for the Court of Appeal's interference with the judge's conclusions. 130.I concur in the orders proposed in Mr Justice Ribeiro PJ's judgment. Lord Millett NPJ: 131.I also agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Bokhary PJ: 132.This Court unanimously allows the appeal, sets aside the judgment of the Court of Appeal in relation to the Appellant and restores the orders made by the Deputy Judge in favour of the Appellant. This Court also unanimously makes the order nisi as to costs and gives the directions set out in paragraphs 123 and 124 of Mr Justice Ribeiro PJ's judgment.
Representation: Mr Anthony Neoh SC and Mr Denis Gordon Yu (instructed by Messrs Fred Kan & Co) for the Appellant Mr John Griffiths SC and Mr Kenneth CL Chan (instructed by Messrs Hau, Lau, Li & Yeung) for the Respondents | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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