Akai Holdings Ltd (in Compulsory Liquidation) and Others v. Ho Wing on, Christopher
Read the full judgment text of HCCL 37/2005 on BabelCite. This HCCL judgment was delivered on 1 September 2009.
1. This is an application by the plaintiff liquidators, pursuant to a summons dated 28 July 2007, for the appointment of a Receiver over the assets of the 1 st defendant herein, Mr Christopher Ho.
Cited by 28 cases · Cites 4 cases
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HCCL 37/2005 and IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE COMMERCIAL ACTION NOS. 37 AND 40 OF 2005 ----------------------
---------------------- Before: Hon Stone J in Chambers (Open to Public) Dates of Hearing: 26, 27, 28, 31 August 2009 Date of Delivery of Judgment: 1 September 2009 (and consequential argument) ---------------------- J U D G M E N T ---------------------- The application 1.This is an application by the plaintiff liquidators, pursuant to a summons dated 28 July 2007, for the appointment of a Receiver over the assets of the 1st defendant herein, Mr Christopher Ho. 2.This matter first was called on on 30 July 2009, but was adjourned by this court to a hearing on 26th and 27th August. In the event, argument has taken not 2 but 4 full days, and I have reserved my decision overnight on this issue. 3.I now give my decision, accompanied by necessarily brief reasons only. Diary difficulties, and the inevitability of urgent applications to the Court of Appeal within the next few days, mean that there is no opportunity to write a lengthy judgment; in the prevailing circumstances the court simply does not have the luxury of time. 4.Hence this document represents the product of overnight reflection, which at the least will provide their Lordships upon any urgent appeal with an idea of what has been taking place, and the basis of the decision to which I now have come. The parties 5.The parties to this application are the plaintiff liquidator, represented by Mr Kosmin QC, Mr Manzoni QC and Ms Linda Chan, and Mr Colin Wright for the 1st defendant, Mr Ho; initially Mr Wright was led by Mr McCoy SC, but circumstances precluded Mr McCoy’s detailed involvement, and thus it was that Mr Wright has shouldered the not inconsiderable burden of the argument on behalf of his client. 6.Since the issuance of the receivership summons, there has been an additional party before the Court. 7.Miss Audrey Eu SC, leading Ms Catrina Lam, has appeared on behalf of the Intervener, Accolade Inc., the trustee of the Ho Family Trust, and has sought leave to be joined as a party to this action. 8.This application on behalf of the Intervener was by summons dated 25 August 2009. 9.This summons was in three parts: first, it sought liberty on the part of Accolade to intervene, second, the adjournment of the plaintiff’s receivership summons “pending final determination” of the applicant’s application for varying earlier Orders of this court, and third, it sought variation of the February 2009 Mareva Order to permit funds to be released to Accolade for the provision of legal fees. 10.In the event, notwithstanding Mr Kosmin’s strenuous opposition, this court granted the intervention of Accolade to be joined as a party to these proceedings, and further authorized release of funds, from a specified bank account to be verified on affidavit, in order to fund the Intervener’s legal fees. 11.However, paragraph 2 of the summons, namely that the receivership summons be adjourned pending the determination of the Intervener’s application to vary the Mareva Order of 17 February 2009, and the subsequent Order of 1 June 2009, to the effect that these Orders should cease to have any effect on the assets of the Ho Family Trust, was refused. 12.Notwithstanding the personal difficulties of Ms Eu, who had just been instructed in this case, and who indicated to the court at the outset that she had been retained solely to apply to join her client in this case and thereafter to adjourn this receivership application, this court declined to permit that which Mr Kosmin characterized, in my view correctly, as an obvious attempted ‘filibuster’ on the part of the 1st defendant, Mr Ho. 13.Hence the hearing of the receivership summons was ordered to proceed, and hence the extended argument thereon which is the subject of this judgment. The background 14.At the outset it may be convenient to record that this application by the plaintiff for the appointment of a receiver is the latest instalment of a long-running procedural saga, which had as has its origin that part of the February 2009 Mareva Order which stipulated that there should be disclosure of assets on the part of Mr Ho. 15.This Order of 17 February 2009 speaks for itself; in the current context the operative paragraphs are paras 1, 2, 3 and the assets listed in the Schedules thereto, in particular Schedule 3. 16.The court’s principal judgment of 9 February 2009 was followed in relatively short order by no less than 3 further judgments, all primarily stimulated by this vexed disclosure issue, which this court earlier has described as “a running sore” in this litigation; these judgments, which speak for themselves, are dated 16 April 2009 (giving reasons for decision dated 19 March), 1 June 2009, and 23 July 2009. 17.Some idea of the flavour of these judgments can be gleaned from paras 66-75 of this latest judgment of 23 July 2009, wherein the court referred to the “calculated course of conduct” (para 67) adopted by Mr Ho to avoid asset disclosure as per the original disclosure order, and to “the sustained level of resistance…towards asset disclosure” (para 75). 18.The court also stated (at para 66) the following:
19.This, therefore, represents the 5th judgment which has been written over the past 6 months, with the ‘disclosure dispute’ forming the central issue over and above the initial Mareva order as was granted in the sum of US$200 million. The nature of the disclosure Order 20.Notwithstanding Mr Wright’s firm and persistent attempts to construe the Mareva Order – and the disclosure provisions therein – otherwise, I remain of the view that the Order is clear and unambiguous, and that on its face it expressly includes “trust assets”. 21.This is not a matter which, perhaps, is capable of elaboration. Either this court’s view of the meaning and import of the disclosure provision is correct, or it is not. 22.In fact, Mr Wright’s argument that “trust assets” are not ‘assets’ of Mr Ho in reality is no more than a rehash of the failed argument that Mr Snowden QC earlier mounted before this court when there was an attempt to ‘clarify’ the Mareva Order dated 17 February 2009: the judgment of 16 April 2009 refers. 23.Of course, if Mr Wright is correct in his insistence as to the true construction of the Order this matter ends there; the problem, however, is that I do not think that he is. Breaches of the Mareva Order 24.I also take the view that on the evidence currently before this court that, as Mr Kosmin has put it during argument, there is “overwhelming evidence” that Mr Ho has, and continues, to breach the protective regime as established by the grant of the Mareva Order in early February 2009. 25.There have been incidents, involving, for example, the sale of the Grande Headquarters building in Singapore – in my view a particularly egregious event, since it appears to have taken place the very night before an eleventh hour application by leading counsel on behalf of Mr Ho to extend time to make the requisite ‘disclosure’, an application made absent any reference to the alienation of the Grande building – the post-Mareva ‘migration’ of companies from the BVI to Malta (Kimbergold Capital Ltd) and Luxembourg (The Grande International Holdings Ltd), and most recently, the evidence contained in an affidavit dated 20 August 2009 of Mrs Crosthwaite, a long-time employee of Mr Ho. This affidavit was placed before the court in the Beddoe application mounted but days ago before Reyes J, evidence which (minus the privileged legal advice therein) was ordered by this court to be produced both to the court and to the plaintiffs – a ruling which immediately was appealed, this appeal being rejected by Rogers VP and Le Pichon JA in their written decision dated 27 August 2009. 26.In particular, this new evidence which has come to light by what effectively was a side-wind neatly demonstrated just how much money was being siphoned away via the so-called ‘Sino Bright transfers’; the bank statements of Sino Bright Enterprises Co Ltd, apparently an “administrative arm of the family trust”, indicated that there had been paid into, and removed from, this account during the period January to July 2009 the sum of HK$300 million, a matter characterized by Mr Kosmin as a “flagrant breach” of the Mareva Order. 27.A full and detailed analysis of the post-Mareva events in so far as they affect the Ho Family Trust, company migrations and the transfers of very large tranches of money are outlined in detail in the Reply document handed to the court by Mr Kosmin upon the last day of argument. Time constraints preclude condescension to greater detail in this judgment. 28.Accordingly, I have little doubt, and so find, that there have been breaches of the Mareva Order at the behest of Mr Ho, who once again, I have no doubt, has deftly been pulling the strings of his corporate empire with the aim of safeguarding assets which otherwise would be available to satisfy any judgment against him. 29.Much has been made in this case, both by Mr Wright and by Ms Eu, of the discretionary nature of the Ho Family Trust, and of the fact that there is a pre-existing trust deed dated 1993, but in this regard I accept the submission of Mr Kosmin that the present case is, as he puts it, “a paradigm case” of good reason to believe that Mr Ho controls the assets in that trust, and the dispersion of those assets. 30.In my judgment, on the available evidence, this is the “substantive reality”: see, for example, the trenchant comments of Robert Walker LJ in International Credit and Investment Co (Overseas) Ltd 7 anor v Adham & ors [1998] BCC 134, at 136:
whilst in Dadourian Group v Azuri Ltd [2005] EWHC 1768, Edward Bartley Jones QC referred to the problem of shadowy offshore trusts, and noted:
31.At this stage I should also make reference to the fact that, apart from the clear exercise of control by Mr Ho over the assets of the Ho Family Trust and of the underlying corporate entities, Mr Ho is the settlor of this trust and that pursuant to his “Letter of Wishes” the entire income and capital is to be held for him absolutely. 32.Much has been said in argument about the interests of a beneficiary under a trust having no more than a mere ‘spes’ or legitimate expectation of preferment, but this principle, which in general I accept, is relevant only in a situation in which there is a genuine arms’-length trust and wherein it can be shown that the trustees truly are independent of the beneficiaries. 33.I do not consider that this has been demonstrated to be the situation in this case; to the contrary the overwhelming probability is quite the reverse. 34.In Asic v Carey (2006) 153 FCR 509, French J (as he then was) recognized that in this regard control is the touchstone; he said, at para 36:
35.During argument Mr Wright took the view that this case actually supported his argument, although I then was, and indeed remain, at a loss to understand why; suffice it to say that I do not read it that way. 36.It seems to me that in the case of Accolade, whose directors are said to be Mr Ho’s sister, Dr Sabrina Ho, his long-time employee, Ms Eleanor Crosthwaite, and his brother-in-law, Mr Alistair Asprey, manifestly there is no cogent evidence of independence, and that any suggestion of true independence, or of Accolade constituting an independent arm’s length trustee, in my judgment is risible. 37.Thus, the reliance by Mr Ho/Accolade, within the argument of Mr Wright and Ms Eu, on strict trust law analysis in opposition to the appointment of receivers cannot in my view be sustained on the particular facts of this case. 38.I also note that whilst Ms Eu persuasively argued for an SCF v Masri [1985] 1 WLR 876 type of preliminary issue into ‘ownership’ of assets now regarded by this court to belong to Mr Ho – as my earlier judgments indicate, I have little doubt but that this is the case – but in this particular factual matrix I do not think that the ordering of such an issue would achieve anything save for massive further delay and yet more disputes as the adequacy of disclosure. 39.Simply put, this court has determined that there is good reason to justify the view – however much Mr Ho and/or his lawyers and/or Accolade may continue to protest to the contrary – that assets held in the name of third parties are the assets of the 1st defendant, and, rightly or wrongly, I decline to accept the proposition that the scope of the present Mareva Order, and the disclosure provisions therein, must depend on a ‘Masri type’ inquiry. 40.Having thus come to the view that there have been clear breaches of the Mareva Order of February 2009, and having been unable to agree with the constant refrain that the Order in the terms in which it is drawn fails to ‘catch’ assets owned and controlled by Mr Ho, albeit nominally held qua ‘trust assets’, I now turn to the issue of whether the appointment of Receivers as now sought is “just and convenient” and ancillary to the Mareva Order, and whether it is a proportionate remedy in the current impasse created by Mr Ho’s persistent non-disclosure. “Just and convenient”: section 21L, Cap 4 41.I accept the proposition that there is long and well-established authority that where a Mareva Order is breached, or there is a real risk of such breach, the appropriate remedy is the appointment of a receiver over assets which are subject to the Mareva order: see Derby v Weldon (No’s 3 & 4) [1990] Ch 65 and Derby v Weldon (No 6) [1990] 1 WLR 1139. 42.As Gee on Commercial Injunctions (5th ed) expresses the position, at paragraph 16.08:
43.I respectfully agree with this view. See also in this context the observation by Robert Walker LJ in ICIC v Adham, op cit, that where worldwide Mareva injunctions had been granted over property, it was right for the court to pierce the corporate veil and to appoint a receiver over property in circumstances where there appeared to the court to be a real risk that the Mareva orders might be breached; and further, the observations of Austin J in the Australian case of ASIC v Bourke [2000] NSWSC 694. 44.It is also appropriate to record that Mr Wright has argued strongly that there is a fundamental difference between the principles applicable to the grant of Mareva relief and an application for the appointment of a receiver in a case such as this: “the American Cyanamid approach should not be taken”, and that there must be considerable emphasis upon an “umbrella principle” of justice and convenience, particularly in instances in which the court has not yet had the opportunity finally to determine factual matters. 45.With respect, I disagree, at least in terms of disavowing a primary American Cyanamid approach. In this regard I respectfully agree with the views of Kwan J in Re Chime Corporation, HCMP 4146 of 2001, judgment dated 25 June 2003, wherein the learned judge was considering the power to appoint receivers upon interlocutory application; she observed as follows:
46.It is of course necessary at this stage additionally to consider whether any ‘lesser’ or less intrusive remedy is suitable in the particular circumstances: in this regard, for example, Ms Eu has mentioned pre-action disclosure orders against her client, Accolade, and the possibility of contempt proceedings against Mr Ho, and Mr Wright has talked of Norwich Pharmacal relief and ‘unless’ orders. 47.I do not consider that these so-called ‘alternative remedies’ are appropriate, nor that they should justify deviation from the principle, established over 20 years ago in Derby v Weldon, op cit., that the appropriate remedy is the appointment of receivers. 48.I fail to see, for instance, how contempt proceedings – with the increased burden of proof commensurate therewith, and perhaps ultimately necessitating the appointment of sequestrators – can be appropriate when there is a need to prevent such continuing dissipation of assets as appears to be occurring in this case in breach of the initial Mareva Order. To take such proceedings now, it seems to me, would serve only to produce further lengthy and costly delay, and certainly would not ensure Mr Ho’s compliance with his existing disclosure obligations under that Mareva relief. 49.As to the possibility of ordering disclosure by Accolade, it is difficult not to agree with the view of the plaintiffs’ leading counsel that this ‘remedy’ is little more than an alternative tactic on the part of Mr Ho and Accolade to delay the appointment of receivers. 50.In this connection, Mr Kosmin has pointed out that three directors of Accolade personally were served on 22 July 2009 with the Mareva Order itself, and that it also was served through its solicitors, M/s Chui & Lau, and that, far from offering to co-operate, the solicitors for Accolade returned the court order to the plaintiffs’ solicitors by letter dated 23 July 2009, refusing to accept such service. 51.So there is little comfort there. 52.Accordingly, in the particular circumstances of this case the court has little option but to accept Mr Kosmin’s submission that Mr Ho’s breaches of the existing Order are “continuing and flagrant”, and now appear to involve actual dissipation in addition to his continuing refusal to make proper disclosure. 53.Mr Kosmin repeatedly has stressed that since the February Order, Mr Ho has appointed new directors to most of the companies he controls, and earlier I have referred to the nearly HK$300 million which has passed through Sino Bright bank accounts – of which at least 70 million appears to have been stripped out of Grande, in addition to the sale of the Grande Singapore headquarters building – and the re-domicile of two holding companies of the Sutton Place Hotels Group from BVI to Malta and Luxembourg respectively. 54.In short, it is difficult to avoid the conclusion, notwithstanding his vigorous protest to the effect that he has not failed to make appropriate disclosure under the Mareva Order – a submission which I have made clear that I reject – that in his activities to-date Mr Ho simply is ‘cocking a snook’ at the court, and indeed mocking its Order, the sole purpose of which was, and remains, to preserve assets pending trial of the main action. Proportionate? 55.If the grant of a receivership order otherwise may be considered to be, in the language of section 21L, “just and convenient”, would the grant of such an order be proportionate? 56.Mr Ho conspicuously has declined to make any attempt to make other than nominal disclosure – on each occasion his tactic, which continues even now, has been to reaffirm his rejected view of the effect of the Order as drawn – but I confess that nevertheless I have been concerned as to the ‘proportionality’ of the relief as represented by the draft receivership Order which has been proffered to the court. 57.Whilst I have made it clear that I do not consider that a so-called ‘lesser’ remedy would be suitable, I should have been attracted to the concept of a ‘partial receivership’, so that instead of a receivership order over the entirety of the trust estate, such an order could lie over, for example, the Canadian hotel group, so that in such restricted form fairness and protection can be achieved from the plaintiff’s viewpoint, but at the same time the possibility (it is in my view but a possibility) of widespread disruption to Mr Ho’s corporate empire would be negated. 58.Mr Kosmin’s ready answer to this was that the receivership must extend to all of Mr Ho’s assets because, as matters currently stand, and in light of the wholly obstructive stance to-date adopted by Mr Ho, the court and the plaintiffs have no evidence either of the quantum or of identity of his total assets. 59.As Mr Kosmin expressed the position, if Mr Ho were to “see sense” and set aside US$200 million of his clearly vast corporate assets, then the receivership order could be discharged promptly. This, suggested Mr Kosmin, would be the usual (and logical) response of someone in Mr Ho’s position, and thus that Mr Ho was the “master of his own destiny” in this respect. 60.Similarly, if the court had had reliable evidence from Mr Ho of relative values – if, for example, it could be sure that the hotel group in question was worth in excess of the Mareva figure of US$200 million, then such a ‘partial receivership’ would be tenable – but once again such information was not forthcoming; in any event, said Mr Kosmin, if Mr Ho were allowed to choose which US$200 million of his assets should be subject to any such partial receivership order, he would no doubt elect for the most inaccessible or questionable assets: in this connection see the observations of Potter LJ in Motorola Credit Corp v Uzan (No 2) [2004] 1 WLR 113, at 145-147. 61.I think there is force in this argument. 62.Accordingly, whilst I would have welcomed the opportunity to order a specific ‘partial receivership’, in effect Mr Ho’s attitude toward the disclosure orders of this court has rendered this impossible fairly to effect. It is still, of course, open to Mr Ho to act in this manner, and thus to avoid the consequence of the appointment of receivers, but either he has not received such advice or he has declined to listen. 63.But in any event, and whichever way one cuts it, in my judgment the authority of the Hong Kong High Court has been, and continues to be, flouted by Mr Ho, and ultimately it is this fact which in my view justifies and underpins the plaintiffs’ present application. 64.Finally, I mention the issue of time. Ms Eu rightly has said that the chronology of this litigation demonstrates that it is going at a snail’s pace, and she is very concerned that any receivership order will simply last indefinitely and will do untold damage to her client, Accolade. 65.It seems to me that, once again, the remedy is in Mr Ho’s hands. Since the order is framed ‘until trial or further order’, he can put a stop to this immediately, either by coming clean in terms of detailed discovery, or to elect for the availability of an asset or assets which, if put in place, will more than cover the US$200 million of the Mareva order – in which case, as Mr Kosmin says, the parties can forget this time-wasting (and hugely costly) satellite litigation and start making progress on the actual issues which have been pleaded out in this case. 66.It follows, therefore, that whilst considerations of ‘proportionality’ and time concerns inevitably are placed into the discretionary ‘mix’, for the reasons given they do not hold decisive sway. Urgency? 67.In light of the additional information which now has come to light, there seems to me to be little room for argument but that the appointment of receivers is urgent; the plaintiffs have no idea of the true extent of asset dissipation and the ambit of the restructuring of asset-holding entities. 68.I accept that to ensure that there are no further breaches of the court’s order, and to attempt to ensure there is no further asset-dissipation, the receivers, as officers of the Court, need to secure and investigate the affairs of Mr Ho and Accolade. 69.I also accept that if the Receivers find evidence that companies specified in the receivership order are not assets of Mr Ho, then variation immediately can be sought. Personal security/fortification of undertaking/remuneration 70.A good deal has been said about the issue of security to be put up by the receivers personally, the terms of the fortification of the undertaking, and as to the issue of the remuneration of the receivers. 71.As to the latter, I accept the submission that all costs are subject to taxation, and must be justified to the satisfaction of the taxing master; it they are not, such costs will be borne by the receivers. See, for example: Mirror Group Newspapers v Maxwell [1998] 1 BCLC 638, at 655; Re Peregrine Investments [1998] 3 HKC 1, per Le Pichon JA, whose trenchant observations served to clarify the law in this jurisdiction. 72.With regard to the cross-undertaking, Mr Kosmin points out that the undertaking is in Schedule 4 to the Mareva Order and is fortified by HK$50 million already paid into court. He says, and on balance I am minded to agree, that a receivership as ordered is ancillary to the Mareva order, and achieves the same result as full compliance by the defendant with the Order. Moreover, he points out that the receivers will not be managers, and that they will not interfere with the Boards of various companies except by order of the court. I also agree with the submission that given the “flagrant” non-compliance with the disclosure order, there is no basis for further fortification in this circumstance. 73.In terms of personal security, Mr Kosmin submits that this is a matter for a Master, and that the receivers should attend in order to satisfy the Master as to their professional indemnity insurance. I see no reason to differ from this view. Detailed terms of the Order 74.In all the circumstances, and in the exercise of my discretion, I have decided to grant a receivership order substantially in terms of the draft last handed to the court at 2.30 pm yesterday afternoon. 75.Mr Kosmin has suggested that this order, which has been vigorously criticized by Ms Eu on a clause by clause basis, is in basically standard form, and is similar to the Orders made for the appointment of receivers in Hong Kong (albeit generally in the Companies Court) and in foreign courts, including the BVI. 76.However, I make the following detailed amendments to the draft in its present form:
Funding 77.This is an issue which cannot be side-stepped. 78.I also require, and will hear counsel upon, protection to be written into the terms of the existing draft to cater for the fact that the plaintiffs are funded by professional funders. 79.I have already said something about this subject in earlier judgments, and whilst I will not here repeat those sentiments I cannot pretend that I am happy about the fact that such ‘funders’ are involved, and the implications which follow in terms of the conduct of this litigation. 80.In this connection Ms Eu has made the sage point – the only point in the entire debate, in fact, to which Mr Kosmin did not respond specifically – that the receivership order as proposed gave the receivers carte blanche to investigate the assets of Mr Ho/the Ho Family Trust, but did not provide for the fact that unknown third parties with unknown interests were funding this action – in return, doubtless, for a sizeable share of any recovery. 81.I consider this a fair point, and one to which, as I have said, no answer was proffered. 82.Accordingly, I wish amendment to be made to the draft Order, in a form suggested by leading counsel, to take account of this fact, and to ensure protection from such third party funders of the information uncovered by the two receivers to be appointed. 83.I appreciate, of course, that the Receivers are not the plaintiffs’ agents, that they will be independent officers of the court, who will report to the court and be subject to the court’s directions. 84.Nevertheless I require to be inserted in the Order to be made some form of preclusion to ensure that there is, in effect, a ‘Chinese wall’ erected between the receivers and the plaintiffs’ paymaster. Summary 85.It follows from the foregoing therefore, that I am minded to accede to the receivership summons, in terms of an order as suitably amended. 86.I can see no reason why costs of the application should not follow the event. 87.I will, however, hear the parties on costs, and upon any subsequent applications that the 1st defendant and the intervener now may wish to make in light of this judgment Costs 88.Mr Kosmin asks for his costs of this application. He says that in the circumstances, wherein Mr Ho effectively has created the environment wherein this receivership application has had to be mounted, that such costs should be on a higher than normal basis, that is, on a common fund or indemnity basis. 89.Mr Wright demurs. He says that since this is an interlocutory application, the appropriate course is to reserve the costs of this application to the trial judge; alternatively, to make an order such as ‘plaintiff’s costs in the cause’; and in any event any costs’ order should be on no higher basis than on the normal ‘party and party’ level. 90.Miss Eu observes that in the circumstances it would be unfair to visit on her client, the trustee, Accolade, the alleged breaches of the Mareva order which have been laid at the door of Mr Ho – and in any event, since she just has joined this action (and has had to fight tooth and nail to do that) any breaches of the Mareva order cannot in any sense be attributed to her client, hitherto not a party, and which thus should not be responsible for costs incurred. 91.Whilst I have declined to attribute independence of action to the trustee of the Ho Family Trust, which clearly is the repository of Mr Ho’s massive wealth, nevertheless I see some technical force in Ms Eu’s comments. 92.As a matter of practical politics it probably does not make a great deal of difference, given my firm conviction that nothing whatever is done within this extensive corporate empire absent Mr Ho’s say-so, but in all the circumstances I consider that the fairest costs’ order upon this receivership application is that the costs of and occasioned by the application are to be paid forthwith by the 1st defendant, Mr Ho, to the plaintiffs, such costs, if not agreed, to be taxed on a common fund basis; as to the Intervener, I make no order as to costs. 93.I so order, and anticipate that the Receivership Order as engrossed will reflect this decision. 94.For the sake of completeness, I regret that I must, and now do, reject Miss Linda Chan’s application for a certificate for 3 counsel upon this receivership application. Leave to appeal 95.Both Ms Eu and Mr Wright make application for leave to appeal, pursuant to the provisions within section 14AA of the new civil procedure rules, with which I confess I currently am less than familiar. 96.In any event, both say that they fall within the rubric that any appeal against the decision of this court on this receivership application falls within the term “reasonable prospect of success”, and Mr Wright even invokes, somewhat ambitiously in my view, the alternative rubric of “some other reason in the interests of justice why the appeal should be heard”. 97.It seems to me, with respect both to Ms Eu and to Mr Wright, that any issue of leave to appeal must fall to be considered in tandem with their further application, namely that there be a stay of the Order of this court pending appeal – to which application I now turn. Interim stay of the receivership order 98.Mr Wright has made it clear that his preferred option is that this court grant a stay of its Order pending the substantive appeal his client wishes to prosecute against the appointment of receivers. 99.As the court made clear in argument, such a stay is out of the question, and the most that can be considered is to provide some form of short ‘window’ to enable the 1st defendant and the Intervener to arrange an urgent appearance before the Court of Appeal, thereby precluding an undignified dash to that court. 100.I also take the view that the issue of a stay of this court’s order on any basis other than a very short interim stay is irrevocably linked to the issue of leave to appeal. 101.Accordingly, on the twin issues of leave to appeal and of a stay of this court’s order on this application, I order as follows:
102.I appreciate that this does not assist Ms Eu, who has laboured valiantly in this application absent full papers/instructions, but the court has to hold the ring between the interests of the plaintiffs, who now are uncomfortably aware of Mr Ho’s proclivities in terms of rearranging his corporate empire, and the interests of both Mr Ho and Accolade, who will have a window 3 days in which to arrange an appellate hearing, and whom, if necessary, can mount an application for an extended stay. As far as this court is concerned, however, the end of this week is the furthest that it is prepared to extend the interim stay envelope. Other matters 103.Consequent upon delivery of this judgment in the form appearing above several matters of detail consequentially were canvassed. I take them in order. (1) The ‘funding proviso’ 104.Pursuant to my observations at paragraphs 77-84 above, there was discussion between counsel as to the appropriate form of wording to be inserted within the Schedule 4 Undertakings appended to the Order. 105.Mr Kosmin suggested, to no significant dissent, that a like form of wording could be inserted to that which appeared within paragraph 4 of the Order dated 23 July 2009 (curiously now the subject of a pending Notice of Appeal) which then had been agreed between Mr Kosmin and Mr McCoy. Clearly modifications were necessary to take account of the presence of the Intervener, but as I understood the position Mr Kosmin and Mr Wright were ad idem in terms of this wording. 106.Accordingly, I confidently anticipate that this ‘funding proviso’, if I may so term it for shorthand purposes, will be included within the Order to be engrossed. (2) Clauses 8(b) and 13 of the draft Order 107.I am grateful to Miss Eu for bringing the court’s attention to the date of September 3 2009 appearing in these clauses: I confess that I had intended to pick up this point and to include it within the matters of detail as dealt with at paragraph 76 in the body of this Judgment. 108.Ms Eu says that the date of 3 September obviously is out of the question given the length of time it has taken to argue this case, and the likelihood of immediate appellate action. She asks that this date be replaced by a date 21 days thereafter. 109.For his part Mr Wright echoes this view. 110.Mr Kosmin is indignant, particularly in terms of Mr Wright’s request on behalf of a client who is “months late” in making disclosure. 111.I confess that at this stage I find it hard to become excited over a few extra days; far too much water has flowed under this particular procedural bridge. 112.I grant both the 1st defendant and the Intervener a further 21 days from 3 September, that is, until 24 September 2009 at 4pm, which will be the cut-off date, save that in terms of the information solely relating to bank statements (vide paragraph 2, Schedule 2) I grant a further 14 days only, that is, until 4pm on 17 September 2009, to supply this information. Costs of the Intervener’s application to be joined as a party 113.Strictly this is nothing to do with the receivership application, but I heard argument on this element this morning, and it is convenient to give my ruling upon this aspect of the case in this judgment. 114.Mr Kosmin accepts, I think, that he lost this application as mounted by Miss Eu, and that he should pay the costs of the argument. However, he points out that whilst he lost the argument on Wednesday 26 September 2009 – which took up the greater part of the first day of this hearing – nevertheless he succeeded, against very strong resistance, including an appeal, in obtaining the evidence used in the Beddoe application before Reyes J, which evidence acted as a “searchlight” illuminating just what had been going on in terms of asset dissipation. He also points out that he succeeded in preventing an adjournment of this hearing consequent upon Accolade being admitted as a party, and that he succeeded on Miss Eu’s application for leave to appeal against this court’s ruling that he, and the court, should have sight of the evidence used on the Beddoe application. 115.It seems to me that the answer to this is as follows. 116.I estimate that the hearing day on Wednesday 26 September 2009 took some 6 hours; in fact, Miss Eu has reminded the court that we reconvened at 6pm on that day to hear further argument. 117.In my view the fairest attribution of costs thus is as follows:
Finally 118.As counsel are aware, this court is shortly to embark upon a 6 month trial in another Akai matter. Save for any clarification which may be required as to the content of the Receivership Order as now made, with appropriate modifications/amendments, this court is unable further to deal with this case, the management of which therefore should be transferred to another judge. 119.I am grateful to all counsel for the assistance they have rendered on this application, which on occasion involved vigorous exchanges of view.
Mr Leslie Kosmin QC and Mr Charles Manzoni QC and Ms Linda Chan, instructed by Messrs Lovells, for the plaintiffs Mr Gerard McCoy SC and Mr Colin Wright, instructed by Messrs Huen Wong & Co, for the 1st defendant Miss Audrey Eu SC and Miss Catrina Lam, instructed by Messrs Chui & Lau, for the Intervener, Accolade, Inc |
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