Alfa Exchange v. Miracle Royale Ltd and Another

HCA1243/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1243 OF 2011

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BETWEEN

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Before : Mr Recorder Shieh, SC in Chambers

Date of Hearing : 10 November 2011

Date of Judgment : 10 November 2011

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J U D G M E N T

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1.The plaintiff is a company incorporated in the UAE carrying on foreign exchange business. On 20 July 2011 the plaintiff obtained an ex parte Mareva injunction before Deputy Judge Seagroatt against the 1^st and 2^nd defendants. After a number of interlocutory hearings, the matter has come before me today in an application by the 1^st and 2^nd defendants to discharge the injunction. Because all Mareva injunction cases deserve expeditious treatment, I have decided to give a near ex tempore judgment.

2.The plaintiff says that it had operated through a Standard Chartered Bank account in New York City in the name of its partner, Wall Street Exchange Centre LLC.  I shall refer to this as “the Wall Street account”.  The plaintiff says that it operated the account through a secured online system to which special configurations of computers are necessary for access besides designated user names and passwords.  The procedure to ensure that the money would not be transferred without authorisation is described in paragraph 6 of the first affirmation of Ilmudeen Maricar Abul Cassim Maricar, and I shall not repeat the same here.

3.The plaintiff’s case is that unauthorised payments have been made from the Wall Street account in the sums of US$426,000 and US$386,000 to accounts in Standard Chartered Bank in Hong Kong held by the 1st and 2nd defendants respectively.  The plaintiff’s case is that the payments were made from the Wall Street account as a result of someone having hacked the secured online system and stolen the plaintiff’s money from the Wall Street account without the plaintiff’s consent or authorisation.

4.The plaintiff instructed Wall Street Exchange to stop payment, and Wall Street Exchange in turn attempted to ask Standard Chartered Bank in Hong Kong to stop payment.  However, the payments had been completed already and could not be reversed.

5.The plaintiff made a report to the Hong Kong Police and a Mareva injunction was obtained on 20 July 2011.

6.The defendants’ case is that they were not fraudsters, and if there had been any fraud at all, they themselves have been the victim of a fraud.  The 1^st and 2^nd defendants say that they specialise in energy health and anti-ageing products.  They took payment through TT or COD.  They were owned and controlled by a Malaysian couple, Leong Kok Kheng and Boh Sau Cheng.

7.According to Madam Boh, who made the affidavit for the defendants, they conducted their major business through a company called Double S Global Traders Sdn Bhd and that the 1^st and 2^nd defendants were established to facilitate their energy health products and for tax planning purposes.

8.The defendants say that they came to know of a person named Emam.  Emam claimed to be the representative of two companies, namely Interforex General Trading LLC and Bypass General Trading LLC.  I shall refer to them as “Interforex” and “Bypass”.  In 2010, Emam began to place orders with the defendants on behalf of Interforex and Bypass.

9.On 9 October 2010 the 2^nd defendant received a sum of US$212,000, purportedly in payment of a purchase by Interforex.  Emam collected the goods in person.  As it turned out, the payment was made by the plaintiff.  The significance of this payment will become apparent soon.

10.For the transactions which form the subject matter of this injunction, the defendants’ case is that the sums of money were indeed received by them, and they were received by them as payments by or on behalf of Bypass in respect of purchase orders placed by Emam on behalf of Bypass.  Emam had collected the goods on 14 July this year after the defendants had checked and confirmed on Standard Chartered Bank internet banking that payment had been made by TT by Wall Street Exchange.

11.The defendants therefore say that they had received the payments as sellers of goods, and even if the payments were in any way vitiated, they can pray in aid the defences of change of position and bona fide purchase of or value without notice.

12.The plaintiff admits that both Interforex (there is a small twist here.  The true name of the company appears to be “Interforex”, with an “r”, but it was described as “Interfolex”, with an “l”, by the defendants, probably because of pronunciation problems as the name was repeated down the line) and Bypass are its customers, but the plaintiff was able to produce apparently independent evidence from deponents coming from these two entities to the effect that the defendants were not their customers, that they had not authorised any remittance of funds to the 1^st and 2^nd defendants, that they did not know Emam, and that they had nothing to do with a company known as Pricetrow General Trading LLC, whose name appeared on the UAE Resident’s Permit on Emam’s passport exhibited by Madam Boh.

13.The plaintiff says that it has some prior history with the 2^nd defendant.  The plaintiff described an incident whereby in October 2010 it received a request by Interforex to stop a remittance of money to the 2^nd defendant.  The reason given to the plaintiff by Interforex was that Interforex had instructed the remittance on fraudulent misrepresentation by the 2^nd defendant through emails. The plaintiff tried to ask its bank to stop the remittance, but in the end the remittance had not been cancelled.  This was the payment of the US$212,000 I referred to earlier.

14.The defendants applied to discharge the injunction on the ground of material non-disclosure and no good arguable case.

15.I deal with material non-disclosure first.  The law on material non-disclosure is well known.  I need do no more than to quote from the well-known judgment of Lord Justice Ralph Gibson in Brink’s Mat Ltd v Elcombe [1988] 1 WLR 1350 at 1356F,

“ In considering whether there has been relevant non-disclosure and what consequence the court should attached to any failure to comply with the duty to make full and frank disclosure, the principles relevant to the issues in these appeals appear to me to include the following. (1) The duty of the applicant is to make ‘a full and fair disclosure of all the material facts:’ see Rex v. Kensington Income Tax Commissioners, Ex parte Princess Edmond de Polignac [1917] 1 K.B. 486, 514, per Scrutton L.J.

(2) The material facts are those which its is material for the judge to know in dealing with the application as made: materiality is to be decided by the court and not by the assesmsment of the applicant or his legal advisers: see Rex v .Kensington Income Tax Commissioners, per Lord Cozens-Hardy M.R., at p.504, citing Dalglish v. Jarvie (1850) 2 Mac. & G. 231, 238, and Browne-Wilkinson J. in Thermax Ltd. v. Schott Industrial Glass Ltd. [1981] F.S.R. 289, 295.

(3) The applicant must make proper inquiries before making the application: see Bank Mellat v. Nikpour [1985] F.S.R. 87. The duty of disclosure therefore applies not only to material facts known to the applicant but also to any additional facts which he would have known if he had made such inquries.

(4) The extent of the inquiries which will be held to be proper, and therefore necessary, must depend on all the circumstances of the case including (a) the nature of the case which the applicant is making when he makes the application; and (b) the order for which application is made and the probable effect of the order on the defendant: see, for example, the examination by Scott J. of the possible effect of an Anton Piller order in Columbia Picture Industries Inc. v. Robinson [1987] Ch. The making of inquiries: see per Slade L.J. in Bank Mellat v. Nikpour [1985] F.S.R. 87, 92-93.

(5) If material non-disclosure is established the court will be ‘astute to ensure that a plaintiff who obtains [an ex parte injunction [without full disclosure … is deprived of any advantage he may have derived by that breach of duty:’ see per Donaldson L.J. in Bank Mellat v. Nikpour, at p. 91, citing Warrington L.J. in the Kensington Income Tax Commissioners’ case [1917] 1 K.B. 486, 509.

(6) Whether the fact no disclosed is of sufficient materiality to justify or require immediate discharge of the order without examination of the merits depends on the importance of the facto the issues which were to be decided by the judge on the application. The answer to the question whether the non-disclosure was innocent, in the sense that the fact was not known to the applicant or that its relevance was not perceived, is an important consideration but not decisive by reason of the duty on the applicant to make all proper inquiries and to give careful consideration to the case being presented.

(7) Finally, it ‘is not for every omission that the injunction will be automatically discharged. A locus poenitentiae may sometimes be afforded:’ per Lord Denning M.R. in Bank Mellat v. Nikpour [1985] F.S.R. 87, 90. The court has a discretion, notwithstanding proof of material non-disclosure which justifies or requires the immediate discharge of the ex parte order, nevertheless to continue the order, or to make a new order on terms.

‘when the whole of the facts, including that of the original non-disclosure, are before [the court, it] may well grant … a second injunction if the original non-disclosure was innocent and if an injunction could properly be granted even had the facts been disclosed:’ per  Glidewell L.J. in Lloyds Bowmaker Ltd. v. Britannia Arrow Holdings Plc.”

Mr Recorder Geoffrey Ma SC (as he then was) also had the following to say in the case of Yau Chiu Wah v Gold Chief Investment Ltd, HCA807/2001, 15 May 2001, at paragraphs 43 to 46. 

43. Material non-disclosure is rightly regarded as a serious matter and in certain cases would not only justify the setting aside of an existing order but may also constitute the determining factor in the refusal of a fresh grant.  However, it is important for a court, when considering whether or not to set aside an existing order or to grant a new injunction, to consider all the circumstances of the case to arrive at what is the justice of the situation.  There is of course no doubt that the court does have the residual discretion not to set aside or to grant a fresh order even in circumstances where material non-disclosure has been shown. 

44. Of the relevant factors that a court would consider in the exercise of its discretion, they would include the following :-

1. Whether the non-disclosure was innocent or deliberate.

2. The excuse or reason for such material non-disclosure.

3. Whether the non-disclosure would in fact have resulted in the original order not having been made in the first place or whether, conversely, even if the material fact or facts have been disclosed, this would have made no difference.  Here, the court is required to look at the merits and justice of the grant of a Mareva injunction.

4. Whether the party guilty of the non-disclosure is deserving of a locus poenitentiae. 

45. Of the cases I have considered in this regard are Bank Mellat v. Nikpour [1985] FSR 87, Lloyd’s Bowmakers Ltd v. Britannia Arrow Holdings Plc. [1988] 1 WLR 1337, Brink’s Mat Ltd v. Elcombe [1989] 1 WLR 1350, Ali and Fahd Shobokshi v. Moneim [1989] 1 WLR 710, Shenzhen Universal Enterprises Industry and Trade Company Supplies and Another v. Wei Bun Trading Co. Ltd and Others [1989] 1 HKLR 470, AMD Pack Rack Ltd and Others v. The Barrons Group Ltd and Others [1992] 2 HKLR 50, Arab Business Consortium International v. Banque Franco‑Tunisienne [1996] 1 Lloyd’s Rep 485. 

46. Normally, a court would expect affidavit evidence in relation to these factors.  It is in my view important, given the stringency by which the court regards ex parte applications, that at all stages, the court is given the full picture.  The cautionary warnings given by the courts over the years are not simply mantras to be recited.  They are to be taken seriously.  No one needs reminding that ex parte applications are very much against the normal way in which courts operate.  The vigilance that needs to be displayed both by the court and the applicant seeking ex parte relief is multiplied many times over precisely because the party against whom an order is to be made is not present.”

16.Upon considering all the submissions made to me this morning, and having reviewed in detail the evidence put before me, I have come to the view that the injunction should be discharged on the grounds of both material non-disclosure and no good arguable case.  My brief reasons are as follows (in no particular order of importance). 

17.The plaintiff’s case is mounted on the basis that it had no knowledge of and had not authorised the payments at all, and it was unable to debit the account of any of its customers and therefore had to shoulder the loss itself.  This is very different from the scenario where the plaintiff had truly given instructions for payment upon the strength of instructions coming from its own customer, and then the customer, for whatever reason, wanted to recall the payment.  In the latter case, because the customer had indeed given instructions to the plaintiff to effect payment, the plaintiff would be able to debit its own customer’s account.  This distinction is recognised by paragraph 59 of the plaintiff’s skeleton argument.

18.The ex parte judge was not shown an email (which the plaintiff adduced at a later stage subsequent to the ex parte order) from one Bina Johnson, of the plaintiff, to Wall Street Exchange dated 13 July 2011.  The email says:

“Dear Mr Prabhakar, most urgent, please. Our remitter has requested us to kindly RECALL below funds ASAP.”

And then the email went on to give details of four remittances which were requested to be recalled.  Two of those were to the 1^st and 2^nd defendants, being the subject matter of this injunction, and the other two were to certain Indonesian entities.

19.In my view, this email is material and ought to have been disclosed.  On the face of it, the email suggested that the request for refund came from the remitter (which is not the same as the plaintiff itself).  If it is the case where the remitter (in ordinary parlance, one would understand this to mean the customer of the plaintiff who ordered the remittance) for whatever reason wished to recall a payment that it had ordered its bank to make, then the bank would still be able to debit the remitter.  The person who would suffer loss would be the remitter and not the bank.  In this case, the plaintiff is in the position of a bank.

20.An attempt was made to give me an explanation from the Bar table as to what the email actually was intended to mean, but that was not by way of any admissible evidence, and hence I have not paid any regard to it.  This is not to say that the explanation, even if properly admitted, would have been conclusive.

21.This point goes to title to sue, so to speak. The email is also material in the sense that it could well possibly negate any suggestion that the 1^st and 2^nd defendants were complicit in the unauthorised transfer in the sense of having taken part in any hacking. The email shows that the two payments were not isolated instances, but there were indeed two others which were requested to be recalled on the same occasion.  The email and the fact that there were four remittances which were requested to be recalled could well give credence to the suggestion that instead of the 1^st and 2^nd defendants being fraudsters who had engineered an unauthorised transfer, the 1^st defendant, 2^nd defendant and the two Indonesian recipients could well be all innocent recipients of funds procured to be paid out of Wall Street by a fraudulent third party.  Whether or not this sort of argument would find favour with the ex parte judge is not for me to judge.  I cannot say that it would have been irrelevant.  This would be relevant to the allegation that the 2^nd and 1^st defendants are complicit in the hacking.

22.Further, the plaintiff had not disclosed to the ex parte judge the basis of the allegation made in the affirmation in support of the Mareva injunction that in 2010, Interforex had instructed the payment upon the “fraudulent misrepresentation of the 2^nd defendant”.

23.It has since transpired through further evidence that the theory for the misrepresentation was really that “someone” had hacked into the computer system of Interforex and pretended, as an employee of Interforex, to ask another employee of Interforex to instruct Wall Street to send a remittance to the account of the 2^nd defendant, rather than the beneficiary account which Interforex had genuinely intended to remit money to.

24.No basis of information was cited for the theory of hacking.  The assertion of hacking was made in a matter-of-fact manner.  I reject the submission that this gap and lack of basis of information can be fed by the information coming from Interforex.  That affirmation coming from Interforex by Bello Ibrahim Danyelo went to a different point.

25.In any event, there is nothing to link the 2^nd defendant to any suggested hacking.  It may be said that the 2^nd defendant was the payee and hence it was natural to think that the 2^nd defendant would have been the fraudster who was instrumental in causing the hacking.  However, arguments like this are a matter for the ex parte judge and for him to weigh up.  I cannot say that if the full picture had been put before him, he would necessarily come to the view that there is a good arguable case that the 2^nd defendant was complicit in the hacking and therefore could be said to have made fraudulent misrepresentation.

26.Instead, the ex parte judge was simply told in a cold, matter-of-fact manner, that the 2^nd defendant had been guilty of fraudulent misrepresentation.  To suggest that a defendant had been guilty of fraudulent practices in the past is likely to have had an impact in the mind of the ex parte judge.  A true picture (in the sense of the email chain described in paragraph 13 of the third affirmation of Mr Maricar) ought to have been presented to the ex parte judge and the apparent weaknesses in the theory addressed properly.

27.A consultancy report commissioned by the plaintiff (which had not yet been finalised on 20 July, when the injunction was obtained, but was finalised the day after) ought also to have been drawn to the attention of the court immediately after its conclusions are known, at any rate when the matter was still at an ex parte stage.  The report was done by a firm which described itself as “Chartered accountants experts with the court’s financial and administrative consultants, business consultants, trademark, registration consultants.”  It is not clear whether it had any computer expertise, but the conclusion of the report used rather tentative language.  It said:

“On 11 July and 12 July the amount of US$1147000 equal to the amount DHS4220960 by using the system of Wall Street Exchange pertaining to Alfa Exchange EST by fraud form unknown person or perhaps through what is called the computer hackers, which is a matter requires a special checking from competent authorities that we recommend to discover the doer.”

28.It can even be said that the fact that such a report has been commissioned and is being awaited should also be disclosed to the ex parte judge.  The conclusion of this report would be material to any allegation of hacking in that the contents show that the expert commissioned by the plaintiff still asked for further inquiries and he had used tentative language of “perhaps through what is called the computer hackers”.

29.Lastly, in paragraph 9 of the affidavit in support of the Mareva injunction, the deponent said -

“Immediately, the Plaintiff made enquiries with all the employees (especially those who were authorized to access the Secured Online System). However, no one came forth. In fact, upon further investigation, we found that the Plaintiff would never carry out ht two said transactions since the Plaintiff maintained (and still maintains) bank accounts in Hong Kong. There are now produced and shown to me marked ‘ACM-5’ a copy of the extract of bank statement the Plaintiff’s bank account in Hong Kong. Thus, the Plaintiff simply needed not to transfer money to Hong Kong through Wall Street Exchange. The Plaintiff’s employees, if really intending to misappropriate the money, would at least choose a place where the Plaintiff did not maintain any bank account, so as to avoid any suspicion.”

The reference to the fact that the plaintiff would never carry out the transactions because the plaintiff maintained bank accounts in Hong Kong was intended to bolster the credibility of the assertion that the payments were indeed unauthorised.  The statement in that paragraph also went towards showing the unlikelihood of the plaintiff’s employees having been complicit in the misappropriation because the plaintiff’s employees would be wiser to choose to send the money to a place where the plaintiff did not maintain any bank accounts so as not to raise eyebrows.

30.However, as a matter of fact, the assertion that the plaintiff would never carry out the two transactions because the plaintiff maintained bank accounts in Hong Kong turned out to be factually incorrect. This was pointed out in the affirmation of Mr Cheng Chi-hung which I gave leave to file earlier today.  The plaintiff had filed an affirmation by Mr Maricar to explain the matter.

31.I accept the explanation that this was perhaps innocent.  Be that as it may, I would regard it as perhaps careless.  I would emphasise the care required in preparing an ex parte application. However, non-disclosure or mistake on this point is perhaps a relatively small point in the overall scheme of things.

32.Looking at the matter in the round and on the basis of the totality of the evidence, I have come to the view that there has been material non-disclosure.  The disclosure is not trivial in any way.  Apart from the point about remittance to Hong Kong, I have had no affidavit evidence explaining the reason for non-disclosure.

33.Therefore, on the totality of the evidence and in the exercise of my discretion, I set aside the injunction on the ground of material non-disclosure.

34.As to good arguable case, I have come to the view that the evidence is entirely consistent with a scenario whereby the plaintiff and defendants were all victims of a fraud practised perhaps by Emam and possibly by others.

35.The plaintiff certainly had not produced sufficient evidence to link the 1^st and 2^nd defendants to any hacking.  Whatever may be the situation at the ex parte stage (which may perhaps be said to be slightly unclear), by the time the matter comes before me inter partes it is reasonably clear that the 1^st and 2^nd defendants have, on affidavit, a prima facie credible explanation.

36.It has not been seriously suggested that in such a factual scenario, the 1^st and 2^nd defendants would not be able to invoke the restitutionary defences of change of position and bona fide purchase recognised by the House of Lords in Lipkin Gorman v Karpnale.

37.The plaintiff criticised the defendants for not producing any evidence that they were in any way actively in business. However, the 1st defendant has produced his financial statements from 9 March 2009 to 31 March 2010.  The financial statement does show that the company had turnover of around $1 million in that year and it had material related party transactions with Double S, which is the company I referred to earlier.  It may not be a sizeable turnover, but it is the financial statements that are not suggestive of a company which was a bare shell or which was incorporated or used for no other purpose other than being a repository of proceeds of fraud.

38.I understand that the 2^nd defendant had not produced any financial statements in evidence, but then I have also borne in mind the fact that it is a BVI company and there is no requirement to prepare any audit.

39.I have considered the criticism made by the plaintiff that no updated financial documents such as management accounts have been produced, but that is not sufficiently weighty to outweigh the fact that it did produce financial statements for the year before, and also to displace the weight of the evidence produced by the defendants as to the nature of their activities and the reason for their incorporation.

40.Further, if the 2^nd defendant were truly a vehicle for fraud as suggested, it would be extremely odd for it to remain in existence almost a year after the 2010 receipt of funds and being redeployed by its owner for a fraudulent purpose again.

41.There are also two potential problems with title to sue.  First, and this ties in with the point about material non-disclosure, that if the true position is that the remitter, namely the customer, wants to recall the payment (and on the face of the existing documentary evidence, this is what the plaintiff’s own email appears to suggest) and it failed to recall, then the plaintiff would be entitled to debit the customer’s account and the plaintiff would have suffered no loss.

42.Secondly, the plaintiff claims that there had been hacking of its secured online system and it was therefore unable to debit its customers’ accounts, but it depends on the precise manner in which the hacking had taken place.  If the hacking had taken a form whereby it can be regarded as not having emanated from the plaintiff at all, then the plaintiff may be able to say to Wall Street, “That is not my instruction,” and Wall Street may well not be able to debit the plaintiff’s account with it.  The consequence is that the plaintiff would have suffered no loss because Wall Street would be unable to debit its account, and the proper plaintiff would be Wall Street.

43.I know this is a different “title to sue” point from the earlier point about remitter, but the context of the arguments are different.  The remitter point is to the effect that the plaintiff may, after all, be able to debit its own customer, and therefore the plaintiff has suffered no loss.  The customer had.  The current point is that even if the plaintiff is unable to debit its customer, then, depending on the nature of the hacking, Wall Street may not be able to debit the plaintiff after all. 

44.The problem is that “hacking” has been used as though everyone knows what it meant and what it involved.  However, there are forms and forms of “hacking”, and I do not pretend to be a computer expert to know what exactly happens when the system is being hacked, and without some detailed explanation as to what exactly takes place, it is difficult to come to a view as to whether or not there is a good arguable case that it is the plaintiff who has suffered the loss or whether or not the plaintiff could be able to say to Wall Street, “Do not debit me”.

45.Mr Lin, in submission, drew an analogy to a case where an instruction to a bank, while ostensibly bearing the signature of the customer, turned out to be forged in fact.  Whether or not an analogy can be drawn between this scenario and a sort of hacking depends, as I said, on precisely what type of hacking had taken place.

46.The plaintiff may feel aggrieved how it could be expected to know how the hacking had taken place.  The answer is “if you do not know, do not go ex parte”.

47.Even the consultancy report suggested further work to be done to investigate the doer of the hacking.  That perhaps goes to a different point as to the identity of the wrongdoer, but it does emphasise that the nature or the form of the hacking is in doubt.

48.For the above reasons, and in the exercise of my discretion, I discharge the injunction on the ground of material non-disclosure and no good arguable case.

49.I have considered whether if I were to discharge the injunction for material non-disclosure I should immediately regrant a fresh injunction.  Because of my view that the injunction is to be discharged on the ground of good arguable case anyway, this is perhaps academic, but as a matter of completeness, I express my comments as below.

50.I have set out the law on regrant of Mareva injunctions above.  Although there is no summons for a regrant, I do not regard that as fatal if circumstances do warrant a regrant, and there are circumstances where the circumstances cry out for a regrant despite material non-disclosure.

51.On the facts of this case, there has been no affidavit evidence explaining the reason for the non-disclosure except for the point about the Hong Kong remittance.  I am not saying that this necessarily means that the material non-disclosure is deliberate or made with sinister intent, but the fact is that there is no material on which for me to judge the innocence or otherwise of the omission.

52.The non-disclosure went to matters that are relatively significant in the overall scheme of things (save perhaps for the “Hong Kong remittance” point).  It is by no means clear as to what the ex parte judge’s view would be if the disclosure had been made and if further inquiries had been made or further questions asked.  It cannot be said that disclosure would have made no difference.

53.Therefore, in the exercise of my discretion, if the matter had called for determination, I would have exercised my discretion against ordering a regrant.

54.There may be aspects of the parties’ arguments that I have not explicitly dealt with in this judgment.  However, when preparing this judgment (based on the arguments which had only been completed before me two and a half hours ago) I have reviewed the parties’ arguments, both oral and written.  If I have not explicitly referred to any argument or minor nuances or variations of any argument, it is because I do not regard them to detract from or add to the reasons that I have already given.

55.Mr Leong and Madam Boh are both present in court.  They have not asked to be joined as parties.  However, Mr Lin, acting for the defendants, has handed to me a written undertaking signed by them in the following terms -

“In the event of the 1^st Defendant being finally adjudged to be liable to pay the Plaintiff the sum of US$426,000 or any part thereof claimed against the 1^st Defendant herein, Boh Sau Cheng undertake to procure the 1^st Defendant or otherwise to satisfy the said Judgment against the 1^st Defendant herein to the extent of US$426,000.

In the event of the 2^nd Defendant being finally adjudged to be liable to pay the Plaintiff the sum of US$386,000 or any part thereof claimed against the 2^nd Defendant herein, Boh Sau Cheng and Leong Kok Kheng undertake to procure the 2^nd Defendant or otherwise to satisfy the said Judgment against the 2^nd Defendant herein to the extent of US$386,000.”

56.Given the fact that I have decided to discharge the injunction in any event based on material non-disclosure and good arguable case, it may well be thought that any undertaking given by them is academic. But for what it is worth, I accept the undertaking given by Mr Leong and Madam Boh, and I would direct that not only shall the undertaking be filed in court, it should also be incorporated as part of the order in the recital.  In other words, it will be recorded that my order is made after hearing arguments and also upon giving of this undertaking.

57.Of course, my reasons would have made it clear that my reason for discharge is independent of the offering of the undertaking.

(Question on costs)

58.The costs of and arising from the discharge of the injunction be to the defendants.

(Submissions on costs and certificate for two counsel)

59.Refused.

(Submission re time for filing and service of defence)

60.I formally make an order that the time for the filing and service of the defence be extended to 18 November.

Mr Kam Chin Ching, Gary, instructed by Messrs Y.C. Lee, Pang, Kwok & Ip, for the Plaintiff

Mr Kenny Lin and Mr Lincoln Cheung, instructed by Messrs Cheng, Chan & Co., for the 1^st and 2^nd Defendants