BabelCite

Advance Finance Limited(in Liquidation) v. Pang Sze Mui, Loretta and Others

Read the full judgment text of on BabelCite..

1. On 10 May 1985 Macdougall, J. granted Mareva injunctions, ex parte, in favour of Advance Finance Limited ("the Company" or "A.F.L.") against six individuals and three companies. In compliance with one of the undertakings, on the following day, the Company issued a generally endorsed with which was later served on the nine Defendants. After a four-day hearing, inter partes, Jones, J. continued the injunctions in respect of three of the Defendants, delivering a reserved judgment on 9 July 1985.

Case No.
Court
Date—
Judge—
Case Document
100%Judiciary

CACV000112A/1985

IN THE COURT OF APPEAL

1985, No. 112

(Civil)

BETWEEN

ADVANCE FINANCE LIMITED (In Liquidation)

 Plaintiff (Respondent)
 

and
PANG SZE MUI, LORETTA and others 1st Defendant (Appellant)

_______

1985, No. 115

(Civil)

BETWEEN

ADVANCE FINANCE LIMITED (In Liquidation)

 Plaintiff (Respondent)
 

and
WONG KIE CHUNG, STEPHEN and others 5th Defendant (Appellant)

_________

Coram: Sir Alan Huggins, V.-P., Cons and Fuad, JJ.A.

Dates of Hearing: 12th, 13th, 14th and 15th November, 1985

Date of Judgment: 13th December, 1985

___________

JUDGMENT

___________

Fuad, J.A. :

1. On 10 May 1985 Macdougall, J. granted Mareva injunctions, ex parte, in favour of Advance Finance Limited ("the Company" or "A.F.L.") against six individuals and three companies. In compliance with one of the undertakings, on the following day, the Company issued a generally endorsed with which was later served on the nine Defendants. After a four-day hearing, inter partes, Jones, J. continued the injunctions in respect of three of the Defendants, delivering a reserved judgment on 9 July 1985. They were restrained from removing from the jurisdiction or otherwise disposing of or dealing with any of their assets within the jurisdiction of the Court so as to reduce the value thereof below $233,232,000. It is accepted that this figure should have been $225,752,000. Exemptions were included in the order to allow the Defendants to meet their legal and living expenses. Discovery Orders in aid of the injunctions were also made.

2. Two of the Defendants were dissatisfied with the learned Judge's decision and now appeal to this Court. They ace Madam Pang Sze Mui (the 1st Defendant) and Mr. Wong Kie Chung (the 5th Defendant). They successfully applied for a stay, pending appeal, of those parts of the order which directed discovery and that a Defence be filed within 21 days.   Later there was an order, by consent, that the two appeals be heard together.

3. By her Notice of Appeal, Madam Pang also appeals against the Judge's refusal to grant her application to strike out the Points of Claim, or in the alternative, certain paragraphs thereof.

4. I will try and summarise the Points of Claim, as briefly as their complexity allows, as it affects the two Appellants. This is what is averred. The Company was registered as a deposit-taking company under the Deposit taking Companies Ordinance ("Cap, 328") in June 1976, soon after Cap. 328 came into force. It had been incorporated in December 1972. The Company was would up by the Court on 20 February 1984, on a Petition presented on 18 January 1984.  Two chartered accountants, Mr. Yung and Mr. Powell were appointed joint liquidators.

5. Since 16 July 1981, the Company has been a subsidiary of Goodyear Investors Ltd. ("G.I.L.") also now in liquidation. The Company's entire share capital had been acquired by G.I.L.'s other subsidiaries. There is a chart scheduled which shows the equity structure by means of which A.F.L. was in effect controlled by G.I.L. through Goodyear Estates Ltd. (G.E.L.). These are all Hong Kong companies.

6. Madam Pang became a director of the Company on 1 April 1983. She was a Director, and Chairman and Vice-Chairman, respectively, of the Boards of G.I.L. and G.E.L.; and a Director of the other companies shown in the chart: K.H.S. Investments Ltd., Fontana Estates Ltd., Advance Founders Ltd. and Advance Promoters Ltd..

7. Mr. Wong was one of the Directors of the Company from 1974 until the beginning of April 1981.  He was Managing Director of G.I.L. and a Director of the other Companies I have just listed in relation to Madam Pang's directorships.

8. The Points of Claim then summarise the content of ss. 14, 17, 20, 22, 23 and 31 of Cap. 328, and of ss. 121(1), 122, 123(1) & (2) and 162(1) of the Companies Ordinance.

9. The companies shown in the chart are then dealt with separately:

(a) Advance Finance Limited ("the Company")

As we have seen, Madam Pang was on the Board from 1 April 1983. Mr. Wong who had been a Director from 1974, resigned from his director-ship in April 1981 when he obtained a seat on the Stock Exchange. It is said that despite this, he continued to influence the Board who normally acted 3n accordance with his (and another Defendant's) instructions. He had remained a Director of G.I.L..

(b) Goodyear Investors Limited ("G.I.L.")

When this company went into liquidation, Mr. Wong held 15% of the shareholding; he was the Managing Director, and Madam Pang is one of the daughters of the late Mr. Pang Kwok Chan, who had been Chairman of the Company, G.I.L. and G.E.L., and the founder of the Goodyear Group of companies.  Advance Nominees Ltd., a nominee shareholding company, holds the beneficial interest in its shares in two other companies for members of the family of the late Mr. Pang Kwok Chan, who thereby, on the date of Liquidation of G.I.L. held 85% of its shares.

Before G.I.L. went into liquidation, it controlled directly or indirectly, through subsidiaries or nominees, over 60 subsidiary companies.  G.E.L., a public company, whose shares were listed, was its largest subsidiary and before its liquidation (in January 1984) it was the beneficial owner of approximately 60% of G.E.L.'s shares.

Mr. Wong, as Managing Director, and Madam Pang were two of the four Defendants who "primarily" undertook the management of G.I.L.
(c) Goodyear Estates Limited ("G.E.L.")

This was a public company incorporated in 1960, whose shares were quoted on the Stock Exchange.  Before its liquidation in January 1984, the company had a wide range of investments, conducted through over 60 subsidiary companies involved in a wide range of business activities in China, Macau, Malaysia, Singapore, Thailand, as well as in Hong Kong.  Mr. Wong was Chairman and Managing Director from 18 April 1972 and Madam Pang, Vice-Chairman from 1st July 1972.

(d) The Goodyear Group of Companies

A Schedule shows the composition and structure of this enormous Group. The Group was beneficially owned or controlled by G.I.L.. It is said that Madam Pang and Mr. Wong and four other Defendants knew and should have known that all these companies were in the Group and were subsidiaries or nominees of G.I.L..

10. The Points of Claim continue by setting out the fiduciary duties of the Directors of the Company. It is averred that they had a duty -

(i) to act in the best interests of the Company;

(ii) not to misapply its funds;

(iii) not knowingly to involve the Company in criminal offences;

(iv) to report all dealings with third parties from which they might derive a     financial benefit.

11. It is also averred that since the Company was a deposit taking company, the Directors had a special duty not to allow the Company to operate in breach of Cap. 328 (particularly ss. 22 and 23), breaches which might result in: criminal prosecution, followed by penalties; suspension or cancellation of registration under Cap. 328; and the credit facilities extended by the Company becoming prima facie irrecoverable for breaches of those sections of Cap. 328.

12. Nine specific breaches of fiduciary duty by the directors of the Company are listed.   In preparing my judgment, I have tried, unsuccessfully, fairly to summarise the breaches of fiduciary duty by the directors of A.F.L. that were pleaded. With some regret, therefore, I feel it necessary to burden this judgment by setting out paragraphs 27 - 35 of the Point's of Claim in full:

"

 27. Between the 30th March, 1981 and the 18th January, 1984, the Directors of A.F.L., together with the 5th and 6th Defendants (when they were not Directors of A.F.L.) knowingly granted and thereafter permitted to be outstanding advances, loans or credit facilities (here-after referred to as "loans") to G.L.L. and or the Goodyear group of companies and/or subsidiary companies or nominee companies under the control or influence of G.I.L. in amounts which were known or should have been known by the Directors and the 5th and 6th Defendants (when they were not Directors) to be in excess of 25% of A.F.L.'s paid-up capital and reserves and also which were known or should have been known to have been granted to companies in which one of the directors of A.F.L., namely the 2nd Defendant, was a manager or agent.   On the 18th January, 1984 these loans constituted 85% of A.F.L.'s paid up capital and reserves. The actions of the Directors, who were at all material times assisted by the 5th and 6th Defendants, constituted Directors misfeasance and breach of trust in relation to A.F.L.

28. Between the 30th March, 1981 and 31st March, 1982 the 1st to 6th Defendants granted and thereafter permitted to be outstanding loans from A.F.L. of $94 million to G.I.L. and /or the Goodyear group of Companies which constituted about 62% of A.F.L.'s paid-up capital and reserves. These loans were lent to subsidiary or nominee companies which were under the control or influence of G.I.L. and then either on-lent by those companies to G.I.L. or applied under the direction of G.I.L. and /or its Directors. Particulars of the amounts of these loans are provided in the 3rd Schedule hereto.  Particulars of the nature of the loans are provided in the 4th Schedule hereto. On 31st March, 1982 the paid-up capital and reserves of A.F.L. were Hk$153.7 million (of which 25% is $38.4 million and 10% is $15.3 million).

29. Between 1st April, 1982 and 31st March, 1983 the 1st to 6th Defendants granted and there-after permitted to be outstanding further loans from A.F.L. of $39 million, in addition to the previously granted (and still outstanding) loans of $94 million, to G.I.L. and /or the Goodyear group of companies. The loans like the earlier loans of $94 million, were initially lent by A.F.L. to subsidiary or nominee companies which were under the control or influence of G.I.L. and then either on-lent by those companies to G.I.L. or applied under the direction of G.I.L. and /or its Directors. The purpose of lending to G.I.L. through such companies was to disguise the identity of the true borrower from, inter alia, the Commissioner. Particulars of the amounts of these loans are provided in the 3rd Schedule hereto. Particulars of the nature of the loans are provided in the 4th Schedule. On 31st March, 1983 the paid-up capital and reserves of A.F.L. were HK$160.58 million (of which 25% is $40.1 million and 10% is $16 million). On 31st March 1983 the total outstanding loans to G.I.L. were $133 million which constituted about 62% of A.F.L.'s paid-up capital and reserves.

30. Between, 1st April, 1983 and the date of A.F.L.'S liquidation (18th January, 1984) the 1st to 6th Defendants granted and there-after permitted to be outstanding further loans from A.F.L. to G.I.L. of $49.8 million in addition to the previously granted (and still outstanding) loans of $133 million. Of these loans of $49.8 million the sum of $14.4 million was lent direct to G.I.L. and during the period G.I.L. repaid $.1.5 million to A.F.L. which reduced the amount of the direct loans over the period to $12.8 million.  The balance of the loans of $49.8 million were initially lent by A.F.L. to subsidiary or nominee companies which were under the control or influence of G.I.L. and their either on-lent by those companies to G.I.L. or applied under the direction of G.I.L. and/or its Directors. Particulars of the amounts of these loans of $49.8 million are provided in the 3rd Schedule hereto. Particulars of the nature of these loans are provided in the 4th Schedule.  On the 18th January, 1984 the paid-up capital and reserves of A.F.L. were no more than $178.5 million (of which 25% is $44.6 million; and 10% is $17.8 million). On 18th January, 1984 the total amount of outstanding loans which had been granted and permitted to remain outstanding to G.I.L. and /or the Goodyear group of Companies was $181.2 million ($133 million plus $48.2 million). On the 18th January, 1984 these loans constituted 85% of A.F.L.'S paid-up capital and reserves.

31. In addition to the aforementioned loans the 1st to 6th Defendants granted and permitted to be outstanding between January 1981 and 18th January, 1984, loans from A.F.L. to other companies within the Goodyear group of companies, or controlled or influenced by G.I.L., namely, the Hong Kong Macau Development Company Limited, Apical Enterprises Limited and G.E.L.. At all material times G.I.L. owned, through other companies, 46.5% of the shares of Hong Kong Macau Development Company Limited and the entire shareholding in Apical Enterprises Limited. On the 31st March, 1982 the amount of loans outstanding to these companies was $12.39 million; on the 31st March, 1983 the amount of loans outstanding to these companies was $12.7 million; and on the 18th January, 1984 the amount of loans outstanding to these companies was $14.5 million. Particulars of these loans are provided in the 5th Schedule hereto.

32. The loans to G.I.L. and to the Goodyear group of companies which were granted by the 1st to 6th Defendants were known by them or should have been known by them to have been made in breach of Section 22 and Section 23 of the Ordinance with the consequences set out in paragraph 25 above. In granting those loans and in permitting them to remain outstanding between 1981 and 18th January, 1984 the 1st to 4th Defendants (and the 5th to 6th Defendants while Directors of A.F.L.) dishonestly misapplied the funds of A.F.L. in breach of their fiduciary duty as Directors of A.F.L. which actions have resulted in loss to A.F.L. in the amount and in the manner pleaded in Part K below.

33. Most of the abovenamed loans to G.I.L. and to the Goodyear group of companies which were granted by the 1st to 6th Defendants were made without security; others upon inadequate security; and others, whilst originally secured when granted, later became inadequately secured or unsecured to the actual or constructive knowledge of the 1st to 6th Defendants. The 1st to 6th Defendants knew or should have known of the unsecured and inadequately secured loans to G.I.L. and the Goodyear group of companies. By allowing these loans to be granted, and/or to remain outstanding, to a single borrower, without adequate security the 1st to 4th Defendants (and the 5th and 6th Defendants whilst Directors of A.F.L.) dishonestly misapplied the funds of A.F.L. in breach of their fiduciary duty as Directors of A.F.L. which actions have resulted in loss to A.F.L. in the amount and in the manner pleaded in Part K below. Particulars of the unsecured and inadequately secured loans are provided in the 4th and 5th Schedules hereto.

34. From at least 1st January, 1983 onwards the 1st to 6th Defendants knew or ought to have known that much of the interest on the loans described in the 4th and 5th Schedules was not being paid; that, with the exception of G.E.L., G.I.L., Hong Kong Macau Development Limited and Apical Enterprises Limited, those borrowers were not able to repay those loans from their own resources; and that it was doubtful whether G.I.L. and /or the Goodyear group of companies would be able to repay those loans. After 1st January, 1983 the granting of new loans and/or the failure to call up existing loans to G.I.L and/or to the Goodyear group of companies, in the absence of full and proper security being given to A.F.L., constituted a risk to the assets of A.F.L. which the 1st to 6th Defendants were not entitled to take and which risk was not undertaken in the honest belief that such actions were in the best interests of A.F.L.. By virtue of the foregoing the 1st to 4th Defendants (and the 5th and 6th Defendants whilst Directors of A.F.L.) dishonestly misapplied the funds of A.F.L. in breach of their fiduciary duty as Directors of A.F.L. which actions have resulted in loss to A.F.L. in the amount and in the manner pleaded in Part K below.

35. Between 1981 and the 18th January, 1984 A.F.L.'S returns to the Commissioner and financial statements (and in particular, the Profit and Loss accounts and Balance Sheets and Directors Reports on the Balance Sheets) did not disclose the true lending picture. These returns and financial statements were prepared by or authorised by the 1st to 6th Defendants who knew them to be false or misleading when issued. In the same period no disclosure was made by the 1st to 6th Defendants of their financial interest in contracts of A.F.L.".

13. The Company's loss is then set out. The Company's funds advanced to G.I.L and/or the Goodyear Group had become irrecoverable due to the liquidation of G.I.L. and G.E.L. and the insolvency of most of the companies in the Goodyear Group. The amount of the loans wrongfully granted and permitted to remain outstanding as at 18 January 1984 was $231,231,000. They are set out in detail in a Schedule. Such security as was taken for the loans (and which could be realised) had been realised, reducing the Company's loss to $225,752,000.

14. There is also a claim based on the averment that Madam Pang and Mr. Wong and others were constructive trustees. This is pleaded in the following way -

"

 38. By reason of the matters pleaded in Part J above and/or Part M below, the 1st to 6th Defendants are accountants to A.F.L. for its losses caused by their dishonest misapplication of A.F.L.'s funds. The 1st to 4th Defendants are, inter alia, accountants to A.F.L. as constructive trustees for its losses in respect of their breaches of fiduciary duty as Directors. The 5th and 6th Defendant are, inter alia, accountable to A.F.L. as constructive trustees for its losses in respect of their breach of fiduciary duty as Directors. The 5th and 6th Defendants are also accountable as constructive trustees, inter alia, for A.F.L.'s losses in respect of the dishonest misapplication of A.F.L.'s funds by the 1st to 4th Defendants, as Directors, due to the knowing participation or complicity of in the dishonest scheme of the 1st to 4th Defendants in the manner pleaded in Part J above.

39. Additionally, the 1st to 6th Defendants are accountable to A.F.L. as constructive trustees for all monies of A.F.L. which they, or any of them, have received as a result of the aforementioned breaches of fiduciary duty and for any profits made from those monies by the 1st to 6th Defendants or any of them.".

15. The following "further or additional causes of action" are pleaded:

(i) tortious conspiracy on account of the pattern or scheme of unlawful lending. The conspiracy is described and it is said that their actions (as pleaded) constituted a combination designed to effect unlawful purposes - in contravention of ss. 22, 23, 17 and 20 of Cap. 328, and of ss. 123 and 162 of the Companies Ordinance;

(ii) a loan of $1.95 million made to Significant Investments Ltd. which, for the reasons stated, became wholly lost and irrecoverable to the Company. Mr. Wong is involved in the detailed allegations which plead this cause of action, but Madam Pang is not;

(iii) on the facts pleaded, that this constituted a fraudulent preference of Significant Investments Ltd. for the purposes of s. 266 of the Companies Ordinance, and the transactions were therefore void. The Company states that it will seek to trace funds of $1.45 million into the hands of Mr. Wong and three other Defendants;

(iv) that the Significant Investments Ltd. transaction constituted a combination of the Defendants named to effect the unlawful purpose of defrauding the Company of $1.95 million.

16. The following relief is claimed -

A. As against Madam Pang and Mr. Wong and four other Defendants:

"

 (1) Damages in the sum of HK$225,752,000;

(2) Further or alternatively, an account of all profits received by the Defendants from the breaches of constructive trust and/or conspiracy;

(3) Further or alternatively, an account of all funds of the Company held by the Defendants;

(4) All necessary and consequential accounts and enquiries;

(5) Interest on damages from the 18th January, 1984 at such rate as this Honourable Court may deem just and, if awarded in the Court's equitable jurisdiction, compunded;

………………………………".

B.      As against Mr. Wong and three other Defendants:

"

 (1) Damages in the sum of HK$1,950,000;

(2) Further or alternatively an account of all monies belonging in equity to the company and all profits obtained from the use of those monies;

(3) Interest on damages from the 13th January, 1985 at such rate as this Honourable Court may deem just and, if awarded in the Court's equitable jurisdiction, compunded;

…………………..".

17. Jones, J. had before him a long affidavit sworn by Mr. Roderick Chalmers, a member of Coopers and Lybrand, the firm of Chartered Accountants who provided the Company's two liquidators. He begins by stating that he had been working with them since the winding-up. He supports, as a result of his "extensive inquiries", the facts regarding the complex inter-relationship between the companies with which we are concerned, as pleaded in the Points of Claim; he also deals with the directorships of Madam Pang, Mr. Wong and the other Defendants.

18. Mr. Chalmers then refers to the loans made to G.I.L. or its subsidiaries or related companies, as pleaded, which his investigations revealed, and speaks of specific transactions made to disguise the true identity of the borrower; loans made with no, or inadequate security; the false lending picture recorded in quarterly returns to the commissioner of Deposit-taking Companies, and attempts to disguise the true position in the relevant account's.

19. It had become clear to him that the Executive Directors of G.I.L. (including Madam Pang and Mr. Wong) had operated the Goodyear Group as if it were one single entity. The investigation had revealed that substantial financing for the Group had come from the Company on a scale far in excess of the s. 22(of Cap. 328) limit of 25% of the Company's paid-up capital and reserves.

20. Mr. Chalmers also concluded that many of the loans had been made in 1982 or earlier as "call" and short-term loans, and when these were not repaid, the principal sums (and in some cases the interest) were "rolled over", that is to say, treated as a new loan with the principal (and, where appropriate, interest) comprising the new principal "advanced". In this way many "call" loans and short-term loans were outstanding for many months or even years.

21. He goes into considerable detail about the Significant Investments, and related transactions, which resulted in three million shares in G.E.L. being sold, just before the liquidation of G.E.L., for $1,,950,,000 which was advanced by the Company. This amount was then re-routed back to the Company and to G.I.L.. So that from the Company's point of view the consequences of the transactions were that Significant (which had no assets) became a debtor in place of two companies, one of which was Swong and Sons Limited, controlled by Mr. Wong.

22. Mr. Chalmers stated his belief that if the Company succeeded in the Action, the judgments against the Defendants would more than exhaust their financial resources, and that the individual Defendants would be bankrupted, and the three company Defendants wound up. He gave detailed reasons why he believed that there was a strong possibility the Defendants would try to transfer their assets so as to put them beyond the reach of the Liquidators of the Company.

23. Mr. Chalmers then states what he has been able to find out about the financial resources, directorships etc. of Madam Pang and Mr. Wong, pointing out that the Liquidators did not know their net worth (or that of the other Defendants with which we are not at present concerned).

24. He had concluded that the day-to-day operations of G.I.L. and the group companies were under the supervision of Madam Pang, Mr. Wong and two other Defendants. Mr. Wong acted as the Chief Executive and Madam Pang was mainly responsible for the personnel and administrative aspects of Goodyear Investors Limited and some of the group companies.

25. Mr. Chalmers went on to say that the shareholding of the members of the Pang family in G.I.L. was complex and was held through nominee companies which in turn were companies whose shares were held by other nominee companies and by Madam Pang. On the 18 January, 1984 the Pang family held 85% of the shares of G.I.L. and the balance was held by Mr. Wong.

26. He ended his affidavit by explaining what might happen if a Mareva injunction were not granted, adding:

"The Defendants to this Action are highly sophisticated business people and are well familiar with the use of nominee companies, nominee companies in series, trusts and other property-ownership vehicles which can be used to conceal or disguise the true ownership of assets.".

27. It will be recalled that Madam Pang (but not Mr. Wong) applied unsuccessfully for the Points of Claim, or part of them, to be struck out. On this issue the Judge summarised the Points of Claim and noted that they included allegations of breaches of fiduciary duty and tortious conspiracy which had resulted in the dishonest misapplication of the Company's funds.  He referred to the reliance placed upon s. 22 of Cap. 328 (which prohibits deposit-taking companies from lending more than 25% of the Company's paid-up capital and reserves to any person or company or any group of persons or companies controlled by that person or company) and upon s. 23 of the same Ordinance (which contains a prohibition against such companies granting loans, etc., which are unsecured, to one or more private companies in which the Directors of the deposit-taking company have an interest when the aggregate of such loans etc. exceeds 10% of the paid-up capital and reserves of the Company).

28. The judge then reviewed the factual allegations that led up to the averment that as at 18 January 1985 loans made by the Company exceeded 85% of its paid-up capital and reserves.

29. Jones, J. explained how, although Madam Pang had only been a Director of the Company from 1 April 1983 to the date of the winding up, it was pleaded that she had been responsible (as a director) for the position that was allowed to continue after she joined the Board. He said that although it had been asserted on Madam Pang's behalf that she could not have been a conspirator before she became a director, it was quite clear that she could have joined the conspiracy at a subsequent time and with full knowledge of the unlawful agreement. If a conspiracy had already been formed, and she had joined later, she would be equally liable. Conspiracy was merely an agreement between two or more to commit an unlawful act. It was rare that a direct agreement between conspirators could be proved and this was usually established by inference. The Company sought to prove conspiracy by virtue of Madam Pang's position as a director of the company and the other companies in the Group, and her shareholdings in two other companies involved.

30. The learned Judge relied on a passage from the judgment of Buckley, L.J. in Belmont Finance Corporation v. Williams Furniture Ltd. and Others (No. 2) (1) p. 405, where he dealt with the constructive trust issue. I will not set it out. The passage begins - "I now come to the constructive trust point" and ends "and  a person taking it from them with notice that it is being applied for other purposes cannot in this Court say that he is not a constructive trustee.".

31. Jones, J. then said:

"There is uncontradicted evidence that loans in breach of the Ordinance were made with the result that the 1st Defendant would be a constructive trustee for any funds misapplied. Tracing will be one of the forms of relief available if the Plaintiff should succeed it establishing breach of trust. The Plaintiff will then be entitled to an Order for account and enquiries to ascertain what happened to the funds that have been misapplied.".

32. The Judge then dealt with the objection that sufficient particulars had not been given of the facts which were relied upon to bring Madam Pang into the case: that no reference had been made to the acts allegedly committed by her; what role she took as a Director; how many loans were made and when; and the pleading failed to identify the signatories of the returns and other documents which were said to be false or misleading.

33. The Judge went on to make comments on the position of a director and his responsibility. He placed reliance on another passage from Buckley, L.J.'s judgment in the Belmont Case(1) this time at p.404. The passage begins: "The unlawful purpose in this case", and ends "That Mr. Grosscurth was a party to the common intention is, in my opinion, indisputable. ".

34. Jones, J. said that a director was required to act for a proper purpose . Upon the evidence, if it were accepted, the loans made and allowed to remain outstanding were in breach of the provisions of the Deposit-taking Companies Ordinance so that the directors might be liable under s. 31 of the Ordinance. By analogy with the Belmont Case (1) the Company had shown a perfectly good cause of action, because Madam Pang (as a director) was prima facie responsible for the illegal scheme of lending that had been pleaded. He did not consider that the exact role taken by her needed to be set out, for the allegations spoke for themselves. In his view the Points of Claim had been sufficiently pleaded to enable Madam Pang to understand the nature of the Company's case which she had to meet.

35. Before examining this issue, I think it is essential firmly to bear in mind that a director is not liable for a breach of duty, or for the acts of the other directors and officers of his company merely because he was a director at the material time. Negligence apart (and no negligence is pleaded here) he is not liable for breaches of trust by other directors of which he was unaware.  He will, of course, be liable if he has participated to any degree in, or has sanctioned, conduct by others which amounts to a breach of duty. These considerations are relevant to the striking out application and to the Mareva injunction.

36. As has been seen, the learned Judge referred to what Buckley, L. J. had to say in Belmont Finance Corporation v. Williams Furniture Ltd. and others (No. 2) (1), at p.404 of the report and said that by analogy with that case, the Plaintiff Company had shown a perfectly good cause of action against Madam Pang "for the 1st Defendant as a director is prima facie responsible for the illegal scheme of lending that has been pleaded". In my judgment, the fact that the knowledge of the directors and secretary of a company can in certain circumstances be imputed to the Company itself, does not make the reverse position applicable.

37. With the utmost respect to the learned Judge, this misconception coloured his whole approach to the issues that were before him in relation to Madam Pang. It is only if his premise were right that it could be said that "the allegations speak for themselves" so that the exact role she played did not need to be set out in the pleadings.

38. Be that as it may, Mr. Ronny Wong's main attack on the pleadings is based on propositions which he formulated in this way -

"If a director himself did not mis-apply the company's assets but the same was misapplied by other directors, then the 'innocent' director who did not himself misapply can only be a constructive trustee in two situations:

(i) If he received the assets so misapplied with knowledge (actual or constructive) of the breach, then he became a constructive trustee for the company of the misapplied assets. What is required to be pleaded (re striking out) or to be supported by evidence (re Mareva) is 'knowledge (actual or constructive)' and 'receipt'.

(ii) If he did not receive the trust assets misapplied then it is not enough for the purpose of establishing liability on the basis of constructive trustee to plead that the Defendant was aware or ought to have been aware of the facts showing a dishonest breach of trust. It is necessary clearly and unequivocally to plead or to adduce clear evidence of knowledge on the part of the Defendant in question of the dishonesty in relation to that breach of trust.".

39. Mr. Wong draws attention to the use of the words "knows or should have known" in paragraphs 27, 32 and 33 of the Points of Claim, and "knew or ought to have known" in paragraph 34. In so far as he relies on Belmont Finance Corporation Ltd. v. Williams Furniture Ltd. and others 2) (2) I am inclined to the view that the case does not go quite so far. I think that the second paragraph of the head-note of the report, under "Held", correctly summarises Buckley, L.J.'s observations on the pleading point that had been raised -

"     (2) That before the defendants could be held to be liable as constructive trustees, they had to assist with knowledge a dishonest and fraudulent design on the part of the company's directors; that 'dishonest' and 'fraudulent' in that context had the same meaning and, although neither word needed to be specifically pleaded, the pleadings had to disclose with particularity the allegation that the defendants had knowledge of dishonesty; that the only knowledge pleaded was that they were aware ought to have been aware of the facts that constituted a breach of section 54 of the Companies Act 1948, and, in the absence of an unequivocal plea that the defendants had been dishonest, the plaintiff company could hot rely on a breach of a constructive trust without being granted leave to amend the pleadings (post; pp. 265E, 267D-E, 268B - 269A, H - 270A, C-D.).".

40. I will cite a very short passage from Buckley, L.J.'s judgment which indicates his conclusion very plainly: at the foot of p.268 and the top of p.269, he says:

"The pleading does not demonstrate that the plaintiff relies on dishonesty as an essential element of its cause of action. So in my opinion this Statement of Claim does not unequivocally and clearly indicate that the plaintiff is proposing to assert that the transaction was a dishonest one.".

41. Here, the position is different. There is an averment, in relation to all the loans granted and permitted to remain outstanding, of dishonest misapplication, in paragraph 32 of the Points of Claim and further allegations of dishonest misapplication in paragraphs 33 and 34; and in paragraph 38 (which pleads the constructive trusteeship)there is a similar allegation of dishonest misapplication with a further allegation of knowing participation or complicity in a dishonest scheme.

42. In my opinion, therefore, the pleading does not suffer from the defect which made the pleading in Belmont Finance (2) unacceptable as a basis for averments that the defendants were constructive trustees.

43. I feel bound to state, however, my opinion that the breaches of fiduciary duty as pleaded in paragraphs 27 - 35 will be extremely difficult to plead to, and I confess that for my part I would scarcely know how to start. However, not without very considerable hesitation, I feel they should not be struck out. No doubt when particulars are asked for (and this will surely happen) and supplied, the Defendant's task will be a little easier, but I do not envy the pleader.

44. As regards the tortious conspiracy allegations, the overt acts alleged against Madam Pang and the other Defendants were stated as follows -

"

 41. In furtherance of the common agreement or understanding the 1st to 6th Defendants, as Directors of A.F.L. or otherwise:

(a) granted the loans described in the 3rd Schedule hereto and permitted them to remain outstanding without any or any adequate security and in disregard of the ability or inability of the borrower to repay or service those loans;

(b) used the companies listed as named borrowers numbers (1) to (6) in the 3rd Schedule hereto as initial borrowers of the funds of A.F.L. in order to disguise the identity of the true borrower from, inter alia, the Commissioner;

(c) appointed or instructed employees of G.E.L. to be directors and/or share-holders of the said six companies in order to disguise the connection between those companies and G.I.L. and/or the Goodyear Group of Companies;

(d) from 1981 until 1984, lodged false and/or misleading returns with the Commissioner to disguise the identity of the ultimate borrower under the loans described in the 3rd Schedule hereto;

(e) in 1982 and 1983 compiled financial statements under the Companies Ordinance which they knew to be untrue and/or misleading in respect of related party lending and interest earned or received from customers;

(f) in late 1983 and early 1984 engaged A.F.L. in transactions which lacked any business purposes but tended to disguise the true lending picture of A.F.L.".

I will return to this part of the pleading when I deal with the other issues raised by these appeals. Here I will only say, that while I have some sympathy for the complaints made about it on behalf of Madam Pang (for I think the overt acts could have been pleaded with greater particularity to spell out exactly what part each Defendant played in the commission of those acts), I am not prepared to hold that Part M (Pages 40 - 42) of the Points of Claim should be struck out.

45. As we have seen, Mr. Wong did not seek to have any part of the Points of Claim struck out. He rested his case on what I might call the Mareva considerations. The Judge had before him Mr. Wong's affirmation of 14 June 1985. In it, Mr. Wong explains that he was the senior person responsible for dealing with the Goodyear Group's interests in China, and in Macau, Thailand, Singapore and Malaysia, and that for much of the relevant period, he was either out of Hong Kong, or busy with business colleagues from China visiting Hong Kong. In addition he represented many of the interests of the late Mr. Pang Kwok Chan outside the Group. His responsibilities were with the external representation of the Goodyear Group.,

46. He was thus not responsible for the day-to-day operation of G.I.L. or of the Group. He chaired two meetings a week, but financing was not discussed at these meetings; and he was not the Director responsible for arranging finance for the projects or for the Group. "After I secured the deals, I was not involved in the setting up of nominee companies or for allocating deals to such companies. I did not know the ultimate beneficial interests behind these nominee companies.".

47. He continued by drawing attention to the fact that the Goodyear Group comprised over 100 associated or subsidiaries. The Directors of G.I.L. or G.E.L. were made directors of the other companies, with "signatory rights". On average he might have to sign 30 such documents a day. "The pile increased after each trip. Sometimes I initialled board minutes ex post facto."  He signed cheques trusting those who had prepared the supporting vouchers. He had never influenced the directors in granting or extending any loans.

48. In connection with the Significant Investments transaction, he was not a member of the Board of that Company or in control of Goodinvest Limited allegedly involved in the matter.  He had signed a copy of the relevant Board meeting minutes "in the usual way".

49. His 15% shareholding in G.I.L. was subject to a trust, by virtue of which the shares would only become unconditionally his after 13 years' service with the Group (from 1978). If a "divesting event" occurred, like his resignation or dismissal, they would revert to the Pang family.

50. Mr. Wong denied all the allegations against him and said he had helped provide what information he could after the liquidators had moved in.

51. As regards Mr. Wong, the learned Judge said that he was satisfied that where the allegations against him, Madam Pang and the 6th Defendant had been jointly made, a good arguable case had been made out against Mr. Wong. But he also refers to the additional evidence against Mr. Wong and the 6th Defendant about the loan of $1.95 million advanced to Significant Investments Ltd., five days before the presentation of the winding-up petition, and its purpose. After reviewing the evidence, he stated his opinion that a good arguable case had been established against Mr. Wong on this aspect of the case.

52. I now turn to consider whether the Judge was right to hold that the Plaintiff Company had surmounted the first hurdle in establishing its right to a Mareva injunction.

53. Before I do so, I should mention that in relation to Madam Pang the Judge said.

"Although the 1st Defendant has denied the Plaintiff's allegations, I am satisfied for the reasons that I have given on the summons to strike out that there is a good arguable case against the 1st Defend-ant.".

I accept that it must be inferred that the learned Judge considered that Mr. Chalmers', affidavit sufficiently supported the allegations in the Points of Claim against Madam Pang; despite her denial.

54. The Judge in effect correctly asked himself the question "Has the Company shown that they have a good arguable case?". I think that it is now generally accepted that this is the first test that a Plaintiff has to satisfy before he can invoke the Mareva jurisdiction: see the remarks of Kerr, L.J. in Ninemia etc. v. Trave etc. (3), at page 1417 of the report.  If I may say so, this case is helpful because it reminds us of two important considerations -

(a) that the ultimate basis for the Mareva jurisdiction is to be found (I am referring now to Hong Kong provisions) in s. 19 of the Supreme Court Ordinance, Cap. 4, which gives the High Court power to grant injunctions in all cases in which it appears to the Court to be just and convenient so to do; and

(b) the importance (recently emphasised by the House of Lords) of Appellate Courts resisting the temptation to interfere with the exercise of judicial discretion except in severely limited circumstances.

55. I think that Miss Eu was right to point to the detailed investigation, by experts, carried out into the affairs of the companies concerned, over a very considerable period of time, with access to the books and documents, and to draw, attention to the lack of particularisation in the allegations. It must be acknowledged, at once, that there is more than ample evidence of the position of Mr. Wong (and Madam Pang) in the companies concerned, and their interests, and of the apparently clear breaches of provisions of Cap. 328 by the Company. However, in my view, it is the evidence of participation of the persons charged with misconduct, on the material as a whole before the Judge, that has to be examined to decide if a good arguable case has been made out against either of them. Here I use the word "participation", in shorthand form, as embracing active participation to any degree, sanction or acquiesence, and any other act or omission which would render an individual director liable for breach of duty, and a non-director liable as a constructive trustee. And I employ the word "participation" in the same sense in the remainder of my judgment.

56. I interpolate here to remark that I consider it to be wholly misconceived to pray in aid in favour of the Company, as appears to have been done, the provisions of s. 31 of Cap. 328, in assisting to fix liability on anyone in this action. The section only has relevance where there is a prosecution for an offence under the Ordinance, and even then does not attract liability to the directors or officers of the company unless the offence is proved to have been committed with their "consent or connivance".

57. In relation to the case sought to be made out against Mr. Wong under the heading "Breaches of Fiduciary Duty by the Directors of A.F.L.", we know that Mr. Wong was not a director of A.F.L. throughout the material period. As we have seen, by paragraph 27 of the Points of Claim it is sought to bring him in by averring that at all material time he "assisted" the impugned actions of the directors.  In speaking of the returns, financial statements etc., it is said, in paragraph 35, that they were prepared, or authorised by the 1st and 6th Defendants who knew them to be false. Paragraph 14 has it that despite Mr. Wong's resignation from the Board of A.F.L., he "continued to influence the Board ...... who normally acted in accordance with their directions".

58. Whatever might be said about these averments as matters of pleading, there is very little to substantiate them in Mr. Chalmers' affidavit. He says, in paragraph 6, that it appeared from the liquidators' enquiries that Mr. Wong did influence the Board of A.F.L.. Nothing is said to support this assertion, or to suggest how he influenced the Board. Nor is it explained how he "assisted" the Board. Mr. Chalmers adds, in paragraph 8, that it had been clear to him that Madam Pang, Mr. Wong and others had operated the Goodyear Group as if it were a single entity. He may be right, but he does not say what facts led him to this conclusion.

59. As to the allegations of breaches of fiduciary duty alleged in the Points of Claim in respect of Madam Pang, it will be recalled that Madam Pang only became a director of A.F.L. on 1 April 1983. And so, during the whole period covered by the allegations (30 March 1981 to 18 January 1984) she was a director of A.F.L. only for the last 10 months or so. She has firmly denied any wrong-doing.

60. It is clear from Mr. Chalmers' affidavit that the Company has chosen to sue each individual (who is still alive) who was a director of A.F.L. from 1 April 1976 to 18 January 1984. The evidence led at the trial may prove the case  against all or some of them, but in my judgment it would be quite wrong to hold, at this stage, in the absence of some evidence of individual "participation" by either Appellant in the acts alleged against them, that the Mareva jurisidction was legitimately invoked. I am not persuaded that the mere fact of their directorships, shareholdings, interests, etc., and the fact that it was a small company (and a deposit-taking company at that), however suspicious the whole conduct of the affairs of A.F.L. might seem, entitled the Company to maintain that they had crossed the "threshold" for the exercise of this jurisdiction. Surely, something more is required.

61. I say all this in relation to the averments contained in Parts J, L and M of the Points of Claim. To the extent that the conspiracy allegations raise issues different from those which are relevant to the alleged breaches of fiduciary duty, when they come to be tried the Court will have to determine, on the evidence adduced, whether, and if so how, either of them had become a party to the alleged conspiracy. This can only be decided by establishing what part, if any, each had played in connection with the overt acts pleaded, and then finding whether what they did (or omitted to do) led to the inference that either of them was a party to the conspiracy. In my judgment, a preliminary appraisal of the evidence I have reviewed indicates that the Company faced greater difficulties in their efforts successfully to maintain that a good arguable case has been made out against either Madam Pang or Mr. Wong.

62. As regards Part N of the Points of Claim (the Significant Investments Limited transaction) with which Mr. Wong is involved with Defendants other than Madam Pang, it may perhaps be said that the Company came rather closer to passing the necessary "threshold". The transaction itself may reek of fraud, but again, I do not see how one can escape the fact that no evidence of Mr. Wong's "participation" is before us. The fact that this element will have to be proved is recognised in paragraph 47 of the Points of Claim, where it is pleaded that Mr. Wong is accountable to A.F.L. (although not a director) because of "[his] knowing participation or complicity in the dishonest scheme".

63. I cannot part with these appeals without expressing my surprise (with the utmost respect to those who made the decision) that this action was included, and to date remains, on the Commercial List.

64. I would allow both appeals and discharge the Mareva injunctions (and the orders made in their aid).

Sir Alan Huggins, V.-P.:

65. I agree with Fuad, J.A. that this was not an appropriate case to be entered in the Commercial List. If it had been, it is impossible to understand how anyone could believe that the Points of Claim were "as brief as possible": 0.72 r.7(1). Even treated as a statement of claim they broke nearly every rule of pleading there is, but the allegation that they were vexatious and likely to prejudice, embarrass or delay the fair trial of the action has not been urged before us. A pleading should contain "and contain only" a statement "in summary form" of "the material facts" on which the "party pleading relies, but "not the evidence by which those facts are to be proved", and the statement must be as brief as the nature of the case admits": 0.18 r.7. The material facts in this case can be pleaded in a dozen paragraphs which, when typed, would not occupy more than two or at the most three A4 I.S.O. sheets. The Points of Claim extend to no less than 50 paragraphs and eight schedules covering altogether 53 pages. Many of the paragraphs are devoted to arguments in law, and the pleader has even set out, almost verbatim, extracts from 11 sections of relevant legislation. The greater part of the document is taken up with evidence by which the Plaintiff seeks to prove misfeasance by the Defendants. From this welter of verbiage the Defendants are expected to search out the causes of action alleged against them and then to plead in their defence. It is difficult to imagine a statement of claim to which it would be more difficult to plead in reply.

66. There has, also, been much loose use of the phrase "constructive trustee" in this case. Sometimes it was used of company directors in relation to their fiduciary duties. They are more accurately described as "quasi-trustees'' of the property of the company. Properly the phrase constructive trustee" should here be restricted to those who, although not at the material time directors, are alleged knowingly to have assisted the directors to breach their fiduciary duty as quasi-trustees. Thus the Appellants are sued both as quasi-trustees and as constructive trustees.

67. Whatever the shortcomings of the Points of Claim Miss Eu on behalf of the 5th Defendant is not party to the application to strike out. The main point taken by Mr. Wong for the 1st Defendant is that, when the substance of the document is unearthed, it is obscure as to the claims which it is sought to make. The judge said that "in essence ... the application is based upon lack of particularity". By that he did not mean that there was a lack of particulars of material facts which had been pleaded but that there was a lack of particularity in the pleading of the material facts themselves. In so far as complaint is made against the 1st Defendant as a director, no difficulty arises. However, complaint also seems to be made against her that, when not a director, she was accessory to the misfeasance of those who were directors. She could not be liable for such misfeasance unless she had knowledge, actual or imputed, of the impropriety. The pleader has confused this simple issue by alleging that the 1st Defendant "knew or ought to have known" of the impropriety. Mr. Wong argues that this is just not good enough, since knowledge is not to be imputed where's person ought to have known of something but did not know because he was merely negligent: the circumstances must be such that his lack of knowledge can only have been due to wilfulness or recklessness. He relies on a passage in the judgment of Gibson, J. in Baden, Delvaux and Lecuit and others v Societe General purl Favoriser le Development du Commerce et de I' Industrie en France, S.A.  [1983] B.C.L.C. 325; 407h:

"What types of knowledge are relevant for the purpose of constructive trusteeship? Counsel for the plaintiff (Mr. Price) submits that knowledge can comprise any one of five different mental states which he described as follows: (i) actual knowledge; (ii) wilfully shutting one's eyes to the obvious; (iii) wilfully and recklessly failing to make such inquiries as an honest and reasonable man would make; (iv) knowledge of circumstances which would indicate the facts to an honest and reasonable man; (v) knowledge of circumstances which would put an honest and reasonable man on inquiry.  More accurately, apart from actual knowledge they are formulations of the circumstances which may lead the court to impute knowledge of the facts to the alleged constructive trustee even though he lacked actual knowledge of those facts. Thus the court will treat a person as having constructive knowledge of the facts if he wilfully shuts his eyes to the relevant facts which would be obvious if he opened his eyes, such constructive knowledge being usually termed (though by a metaphor of historical inaccuracy) 'Nelsonian knowledge'. Similarly the court may treat a person as having constructive knowledge of the facts ('type (iv) knowledge') if he has actual knowledge of circumstances which would indicate the facts to an honest and reasonable man."

Mr. Wong says, therefore, that it is not clear in this case whether the allegation is one of negligence or one of dishonesty. There would be substance in that contention but for the fact that the pleading includes a clear charge of conspiracy and, so long as that charge remains, that seems to me to leave no doubt that dishonesty is alleged.

68. I turn, then, to the plea of conspiracy. The submission is that this should be struck out for lack of particulars of the overt acts relied upon. Bullen and Leake (12th Fdition) 341 say that a plea of conspiracy

"must then proceed to set forth, with clarity and precision, the overt acts which are alleged to have been done by each of the alleged conspirators in pursuance and in furtherance of the conspiracy;".

Fuad, J.A. has quoted in full para. 41 of the Points of Claim (which purports to set out the overt acts) and it is contended that, particularly having regard to the words "or otherwise", sub-paras. (a) to (f) do not sufficiently indicate what the 1st Defendant is alleged to have done. In so far as the 1st Defendant was not a director, her alleged part in the conspiracy could only be inferred if one were to read the words "the Plaintiff repeats the foregoing", which appear in para. 40 into para. 41. "The foregoing", of course, consists of 39 paragraphs, the majority of which could have no relevance as particulars of overt acts. I think para. 41 does contain sufficient information as to the part alleged to have been played by the 1st Defendant as a director and there is no ground for striking out the whole paragraph. For my part I incline to think the words "or otherwise" are embarrassing, but as neither of the other members of the Court is of that view I am content to allow them to remain.

69. When dealing with the question whether there was a good arguable case for the grant of a Mareva injunction the judge said:

"Although the 1st defendant has denied the plaintiff's allegations, I am satisfied for the reasons that I have given on the summons to strike out that there is a good arguable case against the 1st defendant."

At first sight it might seem that the judge was wrong in law, because the issue as to a good arguable case involves a consideration of the evidence adduced, whereas the application to strike out involves no such consideration. However, I think it is clear from what followed that he was not making so fundamental a mistake and that he did in fact consider the evidence before deciding that there was a good arguable case.

70. The question for us is, therefore, whether there was sufficient evidence to justify that decision, for we must not lightly interfere with the conclusion of the judge. As regards the conspiracy no attempt has been made to justify by evidence the very general overt acts pleaded, and as regards the breaches of fiduciary duty there was no attempt to adduce evidence of what the Defendants did. It would have been a simple matter, if such were the facts, to produce evidence of these two Defendants' being party to material resolutions and of their being present at meetings when reports on the financial dealings of the company were submitted.  The alleged breaches of the statutory prohibitions were so gross and, therefore, so obvious that very little evidence was required to show that the Defendants had agreed to commit them and were party to them, but I am not persuaded that it was enough merely to prove that the Defendants held such positions in the company and in the group of companies that, if they were active in those positions, they must have been party to the breaches: they may not have been active and there is no evidence that they were. No doubt there was ground for grave suspicion, but I have come to the conclusion that there was insufficient evidence to constitute a good arguable case.

71. If I be wrong as to that, I agree with the judge that there was no delay in applying for interim relief such as would of itself bar the Plaintiff from obtaining an injunction, but the fact that so much time had elapsed was a material consideration in deciding whether there was a real risk that these Defendants would dispose of their assets in order to defeat a judgment against them. Nevertheless, if it is assumed that there was on the evidence a good arguable case that the Defendants were guilty of the conspiracy and other misconduct alleged, I think it inescapable that there would be a real risk of their disposing of assets now that proceedings have been instituted against them.

72. If a Mareva injunction had been justified, I would have upheld the order for discovery in aid of it - save for limiting it to property within the jurisdiction. The latter part of the order for discovery which was in fact made was not in aid of the Mareva injunction but a tracing exercise to ascertain whether any moneys which had been misapplied had gone to the Defendants and, if so, what had become of them thereafter. It was argued that no specific fund was in question, that. this was a fishing expedition to ascertain whether the Defendants had benefited generally from the misconduct alleged and that it was not necessary to have such discovery at the present stage. I think there is merit in those contentions.

73. In the event I would allow the appeal and set aside the relief granted.

Cons, J.A.:

74. I have the misfortune to differ from the conclusions of my Brothers in relation to a good arguable case. In my view, having regard to the restricted nature of the business of A.F.L., the intimate association of the companies involved and the position and powers of the 1st and 5th Defendants therein, the undisputed transactions are such that the judge was justified in finding a good arguable case that those defendants were aware of or party to them. Once that is established it almost inevitably follows, from the nature of that case, that there is a real risk that their assets will be dissipated and that discovery ought to be granted in aid of the Mareva injunction. On the other hand I would not have considered that at the moment sufficient has been shown to warrant discovery in aid of tracing.

75. As to the Points of Claim, I would not strike it out or any part of it. The allegations of overt acts in support of conspiracy are short on particularity, but I am confident that many particulars will be requested and supplied before this action actually comes to trial. At the same time I wholeheartedly indorse the comments that have been made as to its quality. It is though, perhaps only an extreme illustration of a common tendency to lengthen and complicate pleadings by the inclusion of a whole range of matter that has no place in them. I find myself frequently led to the feeling that a great deal of the litigation which passes through these courts could be disposed of more easily and more economically if only those responsible for drawing the necessary pleadings would go back from time to time to their books and remind themselves of the basic principles.

Sir Alan Huggins, V.-P.;

76. We are agreed that there should be an order nisi that costs follow the event.

(1)    [1980] 1 All E.R. 393

(2)    [1979] 1 Ch. 25

(3)    [1983] 1 W.L.R. 1412

Representation: