Triland Co Ltd v. Prat Development Ltd and Others

HCA006310/1982

Company Law - Directors Powers - Whether provision can be implied in Articles that directors should not deal with the company's assets pending the completion of an "internal auction" amongst the shareholders for the whole of the shareholding - Derivative action alleging fraud on the minority - Interim Injunction - Balance of convenience.

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

_____________

BETWEEN

________________

BETWEEN

________________

Coram: Hon. Rhind, J.

Date: 24 September 1982

___________

JUDGMENT

___________

1. Triland Company Limited ("Triland") owns one third of the shares in a private company called Prat Development Limited ("Prat"). Another one third of the shares in Prat is owned by International Maritime Carriers Limited ("International Maritime"), whilst the remaining third is owned by Red Lake Investments Company Limited ("Red Lake”).

2. Prat's sole asset of any significance is a vacant building site of some two thousand two hundred square feet situated at No. 20, Prat Avenue, Tsim She Tsui, Kowloon.

3. Adjoining Prat's building site at No. 20 on one side is another vacant building site comprising Nos. 12 to l8 Prat Avenue. That site at Nos. 12 to 18 belongs to Peterson Investments Limited ("Peterson").

4. On the other side of No. 20 is another building site comprising No. 22, which currently is occupied by part of a building in the course of active demolition, and adjoining that is No. 24 which is another vacant lot. No. 22 is owned by a private individual, an old lady. No. 24 is owned by Fook Ping Enterprises Co. Ltd. ("Fook Ping"').

5. In so far as it is relevant, I will in due course have more to say about the ownership of some of the companies I have so far referred to. Further, I will have to make reference to the ownership of two more companies, namely Tat Yeung Investment Limited ("Tat Yeung") and Lee Cheong Estate Ltd. ("Lee Cheong").

6. Tat Yeung owns the building site at Nos. 17 and 19 Prat Avenue. At Nos l7 and 19, Prat Avenue, Which is directly opposite No. 20 Prat Avenue, Tat Yeung is actually in the course of erecting a building. Immediately adjoining Tat Yeung's active building site at Nos. 17 and 19 stands a building site owned by Lee Cheong at Nos. 21 and 21A. Lee Cheong's building site stands vacant, except for building paraphenalia being used by Tat Yeung in its construction work on Nos. 17 and 19.

7. Triland, the minority shareholder in Prat, contends that it does not make good business sense for Prat to join in a venture with its neighbour, Peterson, to develop Prat's site at No. 20 in conjunction with Peterson's site at Nos. 12 to 18. Nor does Triland like the idea of Prat joining in with its neighbours on the other side, ie. No. 22 or 24. Triland's stance is that Prat should embark upon a "solo" development confined to its own site at No. 20.

8. However, International Maritime and Red Lake, who between them account for a majority shareholding, are anxious to combine with Peterson for a joint development of at least Peterson's Nos. 12 to 18 with Prat's No. 20. Whether International Maritime and Red Lake might be interested in an even more ambitious development involving also the neighbours on the other side at Nos. 22 and 24 is a feature of the case which International Maritime's and Red Lake's legal advisers have, quite rightly in my opinion, not dealt with in the proceedings before me.

9. Whether it is a good or a bad thing for Prat to develop its site at No. 20 as part of a joint venture rather than as a solo effort is eminently a question of business judgment. Any question of what com-mercial course is in the best interests of a company is anathema to the courts. Judges assiduously avoid usurping the functions of directors and shareholders whose role it is to make business decisions.

10. Like most private companies these days, Prat's Articles provide that the Board of Directors is responsible for managing the company. If there is disagreement among the Board, the view of the majority will prevail.

11. Although management decisions in Prat are delegated by the company to the Board, there is nothing to prevent the views of the shareholders being sought on any item through the holding of a general meeting. Needless to say, at general meetings, the views of the majority of the shareholding prevail.

12. As at 24th June 1982, the directors of Prat were Mr. Samuel Tak Lee ("Mr. Lee") who controls Triland, Mr. Chou Wen Hsien ("Mr. W H. Chou") who controls Red Lake, and Mr. Tsao Wen King ("Mr. Tsao") who controls Inter-national Maritime.

13. On 24th June 1982 Mr. W.H. Chou and Mr. Tsao caused a Board Meeting of Prat to be called for the 26th June 1982 to consider, inter alia,:

14. Mr. Lee was able to prevent the Board of Prat considering those two items at their meeting on the 26th June by the device of obtaining an ex parte interim: injunction on the 25th June in H.C.A. 5486 of 1982 where he and Triland were plaintiffs while Prat, Mr. W.H. Chou and Mr. Tsao were defendants. The basis of Mr. Lee's application in that case was that Mr. W.H. Chou and Mr. Tsao were doing Prat a wrong by keeping their co-director, Mr. Lee, in the dark about the proposed joint venture. A further step taken by Mr. Lee on 25th June was to cause Triland to requisition an extraordinary general meeting of Prat to consider whether Prat should enter into a joint venture.

15. By the measures which he took in H.C.A. 5486 of 1982, Mr. Lee was at most able to gain time while he sought to persuade his fellow directors and Triland's fellow shareholders in Prat that it was not in Prat's interests to go ahead with the joint venture Mr. W.H. Chou and Mr. Tsao were contemplating. Although in those proceedings Mr. Lee alleged breach of fiduciary duty against his co-directors, he did not venture to plead that their conduct amounted to what is commonly known as "fraud on the minority".

16. Unless the directors in charge of a company are acting ultra vires, or their behaviour constitutes a fraud on the minority, there is really nothing the minority shareholders can do to prevent, the majority of the directors from implementing whatever policy it is they have decided upon, so long as they have the backing of the majority of the shareholders. That is a consequence of the rule in Foss v. Harbottle ^(l) which is, of course, one of the cornerstones of company law. Even if the directors have acted in bad faith, so long as their conduct is not fraudulent, as understood in this branch of the law, their acts can be ratified by the company in general meeting and minority shareholders cannot effectively bring proceedings in the name of the company to complain of wrongs done to it. Modern illustrations of this are Bamford v. Bamford, ⁽²⁾ and Pavlides v. Jensen.⁽³⁾ See also Halsbury, (4th Ed.), Vol. 7,713.

17. In the absence of any allegation of fraud there was no way that Triland and Mr. Lee could by the proceedings in H.C.A. 5486 of 1982 ultimately stop International Maritime, Red Lake, Mr. W.H. Chou and Mr. Tsao from causing Prat to enter into whatever joint venture they deemed appropriate.

18. The extraordinary general meeting of Prat, which had been requisitioned by Triland, was finally fixed to be held on the afternoon of 20th July.

19. Although the wording of the agenda for the extraordinary general meeting of 20th July was wide enough to cover discussion of any joint venture, the parties to the present dispute focussed their attention on one particular joint venture, namely one which, contemplated Prat going in with its neighbour Peterson for the joint development of Prat's site at No. 20 with Peterson's site at No. 12 to 18. The terms of that proposed joint venture were contained in a draft agreement (Exh. "S.T.L. 2" exhibited to Mr. Lee's affidavit of 7th July 1982).

20. Once Mr. Lee was apprised of the content of that draft agreement, he communicated his criticism of the proposed joint venture to his fellow directors in Prat. I see no point in detailing his criticism. The main thrust of his criticism was that the draft agreement was so "open-ended" that Prat was very much at the mercy of the co-adventurer, Peterson, and the whole enterprise was very much in the nature of a pig in a poke from Prat's point of view because it had not sufficiently examined what it was letting itself in for, nor what it stood to gain.

21. Against Mr. Lee's criticism stood the opinion of his co-directors in Prat that in effect they regarded Peterson as reputable developers, and that in t14 peculiar circumstances in which Prat found itself they felt that the joint venture offered the best prospects for Prat. Those circumstances included the facts that Prat's site at No. 20 had stood undeveloped since 1975, Prat was loaded down with debt, and was being sued by its neighbour Peterson to the right and the old lady at No. 22 to the left.

22. Those, very roughly, were the main arguments being advanced on each side. No court would consider getting drawn into which side's arguments made better business sense. The issue was one for decision by the company through its usual organs, with the view of the majority prevailing in the event of any disagreement.

23. There was no way Mr. Lee or Triland were entitled to force their views upon the majority.

24. Having gained Mr. Lee and Triland time till the 20th July, there was nothing more action 5486/82 could do for them if the resolution a the extraordinary general meeting went against them, as it almost certainly would have done as a matter of reality. The interim injunction in that action would lapse with the holding of the extraordinary general meeting.

25. On the 20th July 1982, the very day of the holding of the extra-ordinary general meeting, Triland introduced-an entirely new element into the situation. That day, in purported exercise of its rights under Article 108 of Prat's Articles of Association, Triland sent notices to Red Lake and to International Maritime calling on them to participate in what Mr. Litton has aptly described as "an internal auction", in which the shareholder making the highest bid acquired the whole of the equity in the company.

26. Article 108 is as follows:

"Any member of the Company may without assigning any reason therefor, by two weeks' notice in writing sent to all other members either personally or by registered post at their registered addresses or to the Company and whereupon the Company shall forward copies of such notice to all members entitled to vote in general meeting of the Company in aforesaid manner, calling upon them to offer to sell all the shares standing in their names to the highest bid for the same, by way of sealed tender, offered by one of the members and to bid, by way of sealed tenders, sent to the Company, for all the issued shares of the Company. All sealed tenders must be sent, personally or by registered posts, to the Company at its registered office within three weeks from the date of such notice and all the sealed tenders shall be opened in a meeting of the Directors to be held within four weeks from the date of such notice. All other members shall then transfer all the shares standing in their names to the successful member offering the highest bid, at the Price stated in the successful sealed tender and to executor sign the Instruments of Transfer and such other documents and papers necessary and incidental for the aforesaid purposes to complete the titles of the successful member to those shares, within one week from the date of opening the sealed tenders by the Directors. All stamp duties and costs for the transfers of shares as aforementioned shall be borne by the successful member."

27. Having served this notice under Article 108 on its fellow share-holders on the 20th July 1982, Triland, on the same day, in its capacity as a shareholder of Prat commenced H.C.A. 6310 of 1982 claiming, inter alia, a declaration that once a notice has been served under Article 108, Prat is not entitled to deal with its property and assets, and in particular No. 20 Prat Avenue, otherwise than in the course of its day-to-day business. The defendants to those proceedings were Prat, International Maritime, Red Lake, Mr. W.H. Chou, Mr. Tsao and Chow Chung Kai ("Mr. Chow"). Mr. Chow, who is Mr. Chou's brother, became a director of Prat on 26th June 1982.

28. Further relief sought by H.C.A. 6310 was an injunction to restrain Prat and its directors from entering into any joint venture agreement with Peterson or any other party in respect of No. 20 Prat Avenue until after the transfer of the shares had been registered pursuant to the provisions of Article 108. The very day of the issue of the writ, Triland went ex parte before a judge and got an interim injunction in those terms.

29. One of the issues before me is whether the purported activation of Article 108 justifies the continuation of that interim injunction.

30. For the sake of argument, I will assume that Article 108 is valid and that Triland's notice was valid.

31. Neither in Article 108, nor anywhere else in the Articles is there anything explicit to the effect that Prat shall only deal with its property on a day-to-day basis pending the completion of the process envisaged by Article 108.

32. In principle I am not adverse to implying a provision in Articles in an appropriate case where this is necessary to give them business efficacy. Cases like Hillas & Co. Ltd. v. Arcos Limited; ⁽⁴⁾ Rayfield v. Hands; ⁽⁵⁾ Liverpool City Council v. Irwin ⁽⁶⁾ and Photo Production Ltd. v. Securicor Transport Ltd. ⁽⁷⁾ to which Mr. Litton drew my attention, do no more than confirm the well-established principle that where the courts deem it appropriate to do so, they can fill in the gaps, despite the agreement between the parties being silent on a particular point.

33. Triland contends that when the Articles of Prat were drawn up, it must be presumed that the incorporators intended that if ever Article 108 were activated the directors would only be allowed to keep the company ticking over on a day-to-day basis without being entitled to dispose of the company's assets pending the outcome of the internal auction. Without such an imp lied provision, so Mr. Litton argues, the directors would be able "to pull the rug out" from under a shareholder by disposing of the company's assets after the internal auction process had been set in train.

34. My opinion is that the arguments advanced on behalf of Triland on this point on the effect of Article 108 are so lacking in prospects of success that no serious question arises to be tried, with the result that, in accordance with the principles of American Cyanamid Co. v. Ethicon, ⁽⁸⁾ as explained in Fellowes & Son v. Fisher ⁽⁹⁾ and Mothercare v. Robson Books Limited ⁽¹⁰⁾ the continuance of the interim injunction of 20th July 1982 cannot be justified on the basis on which it was originally granted.

35. Prat was incorporated in Hong Kong as a property development company in December 1973. I regard it as simply inconceivable that the incorporators would ever have been prepared to countenance an arrangement whereby the directors would be deprived of their usual full management powers for a four week-period, which is the time required for the Article 108 procedure. The well-known remark of a British politician, "A week is a long time in politics" can be paraphrased with even greater force to the effect that "Four weeks is a long time in the Hong Kong property market".

36. Hong Kong property companies need to be very nimble on their feet if they are to flourish. Opportunities have to be seized as and when they arise in-what can be a very swift-moving market. This state of affairs would have been very much in the minds of those who set up this company in 1973, a year which saw the culmination of a period of great activity on the property market. If the incorporators of Prat had in mind subjecting prat to this extraordinary state of suspended animation once Article 108 was activated they would surely have said so. Depriving the Board of Directors of their usual management powers so that the company becomes like a rudderless ship for a month does not commend itself to me as a means of giving business efficacy to Article 108.

37. As for the argument to the effect that the directors must not be allowed to "pull the rug" from under any shareholder pending the outcome of he internal auction, it is fallacious. Each and every shareholder is entitled to bid at the auction. No one knows which shareholder will be the successful bidder till all the bids are opened at the end of the four week period. There is no discernible reason to suppose any one share holder will be subjected to dirty tricks by the Board while the internal auction is under way, and no discernible reason to afford any special protection to the shareholders against their own Board of Directors during this time.

38. In fact, it is as much in every shareholder's interests that the Board should hold plenary powers during the internal auction period as at any other time because that offers the best prospects of the successful bidder taking over a healthily run company.

39. Article 108 has nothing whatsoever to do with winding up, other than in the negative sense that it makes it unnecessary for any disgruntled shareholder to have resort to a winding up. Article 107 deals with winding up. Above Article 107 appear the words "Winding Up" which in the ordinary way would signify that the Articles under that chapter or section heading had something to do with winding up. No new chapter heading such as, for example, "Shareholders Buy-Out Provision" appears above Article 108, so it too appears to come under the "Winding Up" rubric.

40. I see nothing significant in this. Article 108 is the last of all the Articles, and the impression I get is that, being a slightly unusual provision, it has just got tagged on at the end without giving too much thought to which grouping of Articles it most naturally belongs.

41. However, stemming from Article 108's appearance in the section headed with the words "Winding Up", an argument was mounted on behalf of Triland that the procedure contemplated by Article 108 by analogy shares some of the characteristics of a winding up. That argument was tenuous in the extreme, and rested on a vague association of ideas.

42. The argument went something like this. Prat has some of the charao-teristics of a partnership in that it has three equal shareholders embarked on a common venture of developing its sole asset, No. 20 Prat Avenue. Now there is division among the shareholders of Prat: Triland is unrepresented on the Board since Mr. Lee was removed as a director on 20th July 1982. If it were an ordinary unincorporated partnership, then in the event of the partners wanting to split up because they could no longer get along together, the partnership could be wound up on the basis that it was just and equitable to do so, and during such winding up the court would not permit any embarking on new ventures with the partnership assets. When the shareholders in a company with partnership characteristics like Prat cannot get along together the court can order that the company be wound up on the just and equitable ground: Ebrahimi v. Westbourne Galleries Ltd. ⁽¹¹⁾ When there is such a winding up, the court will not allow the company to embark on new ventures. Because Prat could be wound up on the just and equitable ground on account of the shareholders not being able to get along together, it is arguable, by analogy, that it should not be allowed to embark on any new venture, bearing in mind that Article 108 is under the rubric "Winding Up".

43. The short answer to that argument is that Prat is not being wound up, and the whole point of an Article like 103 is to avoid winding up. Winding up kills a company, so it is obviously inappropriate for it to embark on new ventures. Article 108 is designed to keep the company alive and well, a necessary requirement for which is that it goes about its business in the ordinary way, free to seize opportunities as they arise.

44. Triland has now come up with yet another contention why Prat should not be allowed to enter into the proposed joint venture with Peterson.

45. When the writ was issued in H.C.A. 6310/82, Triland sued in its own right to protect its position as a shareholder acting in purported exercise of its rights under Article 108. Now, by an amendment dated 9th August 1982, Triland, as a minority shareholder in Prat brings a derivative action against Mr. W.H. Chou, Mr.C.K. Chow and Mr. Tsao as directors of Prat, alleging that their actions and breaches of fiduciary duty in dealing with Prat's property at No. 20 Prat Avenue are not in the interests of Prat, but to advance the personal interests of Mr. W.H. Chou and Mr. C.K. Chow in Tat Yeung. (Strangely, nothing is alleged about how the interests of Mr. Tsao are supposed to be advanced).

46. New remedies by way of injunction are also sought by the amendment.

47. The derivative action introduced by the amendment of 9th August 1932 amounts to an accusation against Mr. W.H. Chou, Mr. C.K. Chow and Mr. Tsao that they have perpetrated a fraud on the minority. To allege fraudulent conduct in court proceedings is no light matter, and the courts require those who make those sorts of accusations to have goods grounds to substantiate them.

48. It cannot be overlooked that in H.C.A. 5486 of 1982, Mr. Lee and Triland refrained from alleging anything fraudulent against Mr. W.H. Chou or Mr. Tsao. (Mr. C.K. Chow was not a party to those proceedings).

49. What has changed to justify the accusations that Mr. Lee has now seen fit to make?

50. The reasons which Mr. Lee advances for the accusation He now makes are to be found in paragraphs 18 and 19 of his affidavit of 9th August 1982.

51. I set out those two paragraphs in full:

52. The Mr. M F. Chung referred to there is Mr. Melbourne Chung who owns half the shares in Peterson, the other half being owned by Mr. Cheng Yu Tung ("Mr. Cheng") of New World. Needless to say, "the Chows" referred to in paragraphs 18 and 19 are the brothers, Mr. W.H. Chou and Mr. C.K Chow.

53. It can be seen from the above paragraphs from Mr. Lee's affidavit that his discovery of alleged fraud against the directors of prar rests primarily on the inferences he chooses to draw from Lee Cheong allowing Tat Yeung to leave its building equipment on Lee Cheong's site and what he claims to know from unspecified brokers about the two sites being offered as a package.

54. I totally disregard what Mr. Lee attributes to the brokers whom he does not choose to identify, because courts do not accept affidavit evidence on information and belief from unspecified sources, particularly when those unnamed sources are being, prayed in aid to support an allegation of Fraud.

55. As to the allegation that construction on the site at No. 17 to 19 virtually ceased when the basement was half completed, I do not see how I can attach any significance to such an assertion as it does not say for how long it ceased, nor in what circumstances. A vague allegation like that contributes nothing to establishing a hypothesis of fraud. Certainly, building operations were being energetically conducted on the site at No. 17 to 19 when I accompanied the pasties' lawyers on a visit to the locus in quo on 8th September 1982.

56. To suggest that X and Y are contemplating a joint venture because X allows Y to leave its building equipment on X's site is absurd.

57. On the material before me, there is simply not a serious question of fraud to be tried against any of Mr. W.H. Chou, Mr. C.K. Chow or Mr. Tsao.

58. Fraud must always be pleaded with the utmost particularity. If Mr. Lee cannot come up with something better than what has been placed before me so far, he will find that in due course this fraud plea will simply be struck out.

59. Neither in its action in its own right, nor in its derivative action has Triland raised a serious, question to be tried so that the ex parte injunction it obtained in 6310 of 1982 must be discharged.

60. Even if I am wrong in holding that Triland has not raised any serious questions to be tried, I would still discharge the injunctions on a balance of convenience.

61. Damages, in my opinion, would not provide an adequate remedy to Triland if the injunction is discharged, nor to the various defendants if the injunction is continued to the trial. Putting a value on Triland's or Prat's loss (if any) if the joint venture goes ahead against Triland's wishes would be a very difficult exercise in assessment. Likewise, assessing any loss to the various defendants if Prat is wrongfully pro-hibited from entering into joint ventures is so full of imponderable, as to make any assessment almost certainly unsatisactory. Trying to put values on lost opportunities is a most imprecise exercise.

62. As I have grave doubts about the adequacy of a remedy in damages to either side, I consider the balance of convenience has to be determine the course the court should follow.

63. The case of Woodford v. Smith, ⁽¹²⁾ concerning as it did a non-commercial situation, was of no assistance to the court in disposing of the present case. The position of a member wrongfully denied a vote by a London rate-payers' association afforded me no guidance on how the balance of convenience should be decided in a case involving the complex commercial affairs of a Hong Kong property company.

64. In considering the balance of convenience, an important factor which cannot be ignored is the interim injunction which International Maritime and Red Lake obtained against Triland and Mr. Lee in H.C.A. 6886 of 1982 on 5th August 1982 to prevent Triland and Mr. Lee from making any bid for the entire shareholding of Prat under their Notice of the 20th July 1982 pursuant to Article 108 until the final taking of accounts between Triland and Mr. Lee on the one hand and Prat on the other hand. Very briefly the background to that action is that International Maritime and Red Lake contend they want to know how Prat's indebtedness increased from just under $2 million for the financial year 1979/80 to over $10 million in the financial year 1980/81. It is common ground that Mr. Lee was in charge of Prat's affairs at the material times. Mr. Lee contends that International Maritime and Red Lake know full well that the money was all properly spent for authorised purposes. While disputing that there was any merit in this claim for an account, Mr. Litton, nonetheless, conceded that there was nothing he could say in opposition to the continuation of the interim injunction. I consider that Mr. Litton was right to make that concession and I am of the view the interim injunction in H.C.A. 6886 should continue in terms as prayed by the Inter Partes summons. I order accordingly.

65. That interim injunction can be expected to continue for many months until the trial of the action, and if accounts are then ordered to be taken, for yet more months thereafter until accounts are finally taken.

66. Mr. Litton says-that any delay occasioned to the internal auction for the shares in Prat by virtue of the bringing of the proceedings in H.C.A.6886/82 should not be allowed to prejudice Triland or Mr. Lee in any, way. Mr. Litton suggests I should approach the matter as if the buy-out period under Triland's Article 108 notice were still the usual four week's period contemplated by Article 108 itself, rather than the period of months, if not years, which are going to drag by while the issue of taking accounts is sorted out.

67. Courts have to look at the position as it in fact exists. I cannot ignore the fact that the process initiated by Triland for the internal auction of Prat's shares is not likely to be resolved for a very long time. I do not really see how Mr. Litton can say that there is nothing he can advance in opposition to the continuation of the interim injunction, yet at the same time ask me to ignore the practical result of allowing that interim injunction to continue.

68. Rendering a Hong Kong property company virtually impotent for even four weeks by taking away the powers of the directors to take whatever steps they think best for the company did not commend itself to me as good sense. Even less do I relish such a prospect for a period which is likely to run to many months, or maybe even years.

69. There could be no less opportune time for Prat to be left without an effective Board. The Board of Prat needs to be free to woo, or be wooed by, its neighbours at this crucial time when there is going to be a vacant piece of land stretching from No. 12 to No. 24.

70. Without an effective Board, Prat is in danger of having its options reduced to one, namely solo development, if its neighbours decide against waiting. I do not wish to be thought to be saying anything against solo development as such; I simply do not want to see Prat left in a position where the various options open to it get forcelosed on account of the absence of an effective Board.

71. It was urged upon me by Mr. Litton that Prat need-not miss out on any advantageous business ventures pending the operation of the injunction he sought in H.C.A. 6310 of 1982 because there could always be an application to the court for its blessing in relation to any desirable venture. That is the last thing any court wants: having to decide what business decisions suit a company best. It is the function of Boards of Directors to make decisions like that, not courts.

72. A further reason why Prat should not be left without an effective Board is that it is a highly vulnerable company at present. It is loaded down with debt - some $10 million according to Triland. Much of this according to Mr. Lee, is owed to Triland and other companies with which Mr. Lee is associated. Triland is threatening to sue Prat for these debts. In such circumstances, Prat needs to b&-free to search out powerful allies. All that Prat can offer to take into any alliance is No. 20, and the prospect o￡ some form of joint venture. If Prat is left in a state of stasis, with its Board not free to use its only asset of consequence, Prat becomes a sitting duck for its creditors, who, if they get judgment and then proceed to execution, are likely to finish up with Prat's land. How that could be to Prat's advantage I do not see. The threat from Prat's creditors weighs very heavily in the balance of convenience, in my opinion.

73. In my view the balance of convenience tilts overwhelmingly towards discharging the injunction in H.C.A. 6310 of 1982.

74. Having found against Triland on both whether there were serious questions to be tried and on the balance of convenience, I regard it as otiose to embark on the exercise of determining whether the allegations against Triland of coming to court with unclean hands affords yet another ground for refusing Triland the discretionary relief by way of injunction it sought.

(1)    (1843) 2 Hare 461

(2)    (1970) Ch. 212

(3)    (1956) Ch. 565

(4)    (1932) The Laos Times, Vol.147 503

(5)    (1960) 1 Ch. 1

(6)    (1977) A.C. 239

(7)    (1980) 2 W.L.R. 283

(8)    (1975) A.C. 396

(9)    (1975) 3 W.L.R. 184

(10)  (1979) F.S.R. 466

(11)  (1972) 2 W.L.R. 1289

(12)  (1970) 1 W.L.R. 806

Representation:

Mr. H. Litton, Q.C. & Mr. J. Bleach (Peter Mark & Co.) for plaintiff in A6310/82 and let and 2nd defendants in A6886/82

Mr. C. Ching, Q.C. & Mr. A. Sakhrani, Q.C. & Mr. R. Wong (Robert Wang & Co.) for all defendants in A6310/82 and plaintiffs in A6886/82