Grant Thornton International Ltd v. Jbpb & Co (A Partnership)

HCCT 13/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO 13 OF 2012

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J U D G M E N T

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A. INTRODUCTION

1.There are two summonses before me: 

(1)  The summons[1] (“the setting aside summons”) taken out by the minority partners (“the Minority Partners”) of the respondents seeking to set aside the ex parte order dated 30 April 2012 (“the Ex Parte Order”) granting leave to the claimant to enforce an arbitral award dated 26 March 2012 (“the Award”).

(2)  The claimant’s summons[2](“the striking out summons”) seeking to strike out certain parts of the affirmation of a Mr Alan Tang filed in support of the setting aside summons.

2.The relevant background leading to these applications can be briefly stated as follows.

B.  THE BACKGROUND

3.The respondents used to be one of the member accounting firms of a world-wide accounting group operating under the name of “Grant Thornton”.  The claimant is the non-practising international umbrella of the group entity of Grant Thornton. 

4.All members of the group were signatories of a Member Firm Agreement (“MFA”), which governs their inter-relationship.  The MFA contains an arbitration clause. 

5.On the other hand, the relationship between the partners of the respondents themselves was governed by a partnership deed (“the Partnership Deed”) dated 1 October 2001.

6.The respondents were expulsed from the Grant Thornton Group in late 2010.

7.On 22 November 2010, the partners of the respondents entered into a deed of termination (“the Deed of Termination”), whereby they set out, among other things, the modalities for approaching the litigation against the claimant in relation to the expulsion.

8.On the other hand, after the expulsion of the respondents from the Grant Thornton Group, the claimant submitted a Request for Arbitration in April 2011, claiming against the respondents by way of the arbitration in London for (a) HK$9 million odd as the sum due under the MFA, (b) damages for breach of the MFA, (c) interest, and (d) costs.

9.In the arbitration, the Minority Partners were represented separately from the other partners (“the Majority Partners”) of the respondents.  The Minority Partners and the Majority Partners had respectively filed their statement of defence and counterclaim in the arbitration.

10.On 27 September 2011, the Majority Partners entered into a settlement deed (“the Settlement Deed”) purportedly on behalf of the respondents with the claimant to settle the arbitration. 

11.However, the Minority Partners disagreed in entering into the settlement on those terms.  Therefore, on 6 October 2011, they commenced in Hong Kong an action against the Majority Partners under HCA 1691/2011 with a generally endorsed writ, seeking to restrain the Majority Partners from effectively executing the Settlement Deed.  The Minority Partners contended that the Majority Partners had no authority (as a matter of contract or law) to enter into the Settlement Agreement on behalf of them or the respondents.

12.Although successfully obtaining an ex parte injunction initially, the Minority Partners decided to withdraw the application to continue the injunction at the inter partes stage, apparently in light of certain observations raised by the judge hearing the inter partes application on 27 October 2011 as to the necessity of such an injunction[3]. 

13.After the Minority Partners’ above withdrawal of the application to continue the injunction, the Settlement Deed was purportedly then further ratified by the Majority Partners. 

14.Thereafter, on 9 November 2011, the claimant and the Majority Partners requested the tribunal to terminate the arbitration.

15.However, the Minority Partners opposed the application.  By their solicitors’ letter dated 16 November 2011 submitted to the tribunal, they contended that the issue of whether the Settlement Deed bound them and the respondents should only be properly resolved by the Hong Kong courts under HCA 1691/2011.  It is noted that the Minority Partners have since amended the generally endorsed writ to seek, inter alia, a declaration that the Majority Partners have no authority to enter into the Settlement Deed on behalf of the respondents (as a firm) or for the Minority Partners. 

16.The tribunal gave directions for a hearing. 

17.For the purpose of that hearing, it is the Minority Partners’ position and case that:

(1)  The issue as to whether they are bound by the Settlement Deed is not one that the arbitral tribunal can or ought to determine[4].

(2)  This is so as that issue turns on the partnership relationship between the Minority Partners and the Majority Partners, which in turn is dependent upon the construction and application of the Settlement Deed, the Deed of Termination and the Partnership Deed, all of which do not contain an arbitration clause.  That issue is therefore outside the jurisdiction of the tribunal, but is the subject matter of HCA 1691/2011 and should properly be resolved thereunder[5].

(3)  Moreover, the question of whether the Settlement Deed is binding on them in any event does not arise out of or in connection with the MFA, which defines the scope of the tribunal’s substantive jurisdiction[6].

18.In the Award, the tribunal rejects the Minority Partners’ arguments.  In doing so, it apparently also rules on the following questions:

(1)  Under Hong Kong law and the Partnership Deed, the Majority Partners had the actual authority to settle the dispute on behalf of the respondents with the claimant (at paragraph 5.7).

(2)  Although clause 7.1 of the Deed of Termination provided a means by which the Minority Partners could proceed with the counterclaims against the claimant, it was never engaged by them as the basis to mount the counterclaim (at paragraphs 5.9 to 5.10).

(3)  The Majority Partners were within their rights to refuse to accept a bare indemnification from the Minority Partners, so that there was in any event no breach of clause 7.1 of the Deed of Determination of by the Majority Partners (at paragraph 5.15).

19.The tribunal therefore concludes that the Minority Partners’ counterclaim be rejected and the arbitration terminated.  It further orders in the Award that the Minority Partners are to bear part of the claimant’s various costs in the respective amount of (a) GBP31,867.70, (b) GBP52,179.43 and (c) HK$1,024,513.59.

20.On 10 April, the claimant applied ex parte to this court for leave to enforce the Award against the Minority Partners under the Arbitration Ordinance (Cap 609) (“AO”).

21.On the other hand, on around 23 April 2012, the Minority Partners applied to the Chancery Courts in England to set aside the Award.

22.On 30 April 2012, this court granted the Ex Parte Order to give leave to enforce the Award.

23.As mentioned above, the Minority Partners then applied to set aside the Ex Parte Order by the setting aside summons, while the claimant took out the striking out summons.

24.The court initially adjourned by consent these two summonses, pending the result of the Minority Partners’ application to set aside the Award in England.

25.The Minority Partners’ application to set aside the Award was later dismissed by the English court in November 2012.

26.This is now the hearing of these two summonses.

C.  THE SETTING ASIDE SUMMONS

27.Although three grounds were raised originally, at the hearing, Mr Anson Wong for the Minority Partners pursued the setting aside application on two grounds only.  In summary, they are:

(1)  The Ex Parte Order should be set aside on the ground of material non-disclosure.

(2)  The enforcement of the Award should in any event be refused under s 89(2)(d) of the AO as the tribunal in making the Award acted in excess of the terms of submission to arbitration. 

28.For reasons that would become more apparent later, I propose to deal with the second ground first.

C1.  Tribunal acting in excess of terms of submission

29.Section 89(2)(d) of the AO provides that, the court may refuse to enforce an award if it is shown that the award:

(1)  deals with a difference not contemplated by or not falling within the terms of the submission to arbitration (s 89(2)(d)(i)); or

(2)  contains decisions on matters beyond the scope of the submission to arbitration (s 89(2)(d)(ii)).

30.Under this ground, it is the Minority Partners’ contention that, in rejecting the Minority Partners’ counterclaim and concluding that the arbitration was terminated by reason of the Settlement Deed, the tribunal had dealt with a difference or decided on matters that went beyond the scope of submission to arbitration. 

31.Mr Wong’s arguments in support of this ground are in gist as follows:

(1)  The Request for Arbitration, from which the tribunal derived its competence and jurisdiction, only relates to claims by the claimant against the respondents for amounts due and damages under the MFA.

(2)  Thus, under the said submission to arbitration, the tribunal has never been asked to adjudicate on the issues as to whether the Settlement Deed binds the Minority Partners so as to extinguish their counterclaims against the claimant.

(3)  However, the tribunal explicitly stated at paragraph 3.1 of the Award that it would deal with the issue of whether the Settlement Deed precluded the Minority Partners from continuing their claims against the claimant.  It then proceeded to rule on the effects of the Settlement Deed, the Partnership Deed, and the Deed of Termination.  These documents do not contain arbitration clause, and are essentially disputes between the partners of the respondents inter se.  These are matters that went beyond the scope of the submission to arbitration.

(4)  In the premises, the tribunal had acted in excess of and beyond the scope of the submission to arbitration as summarised above.

32.With respect to Mr Wong, I disagree.  I will explain why.

33.In my view, the scope of the relevant arbitration is to be informed and defined by the respective case put to the arbitration by all the parties as a whole but not only by the Request for Arbitration as submitted by Mr Wong. 

34.Thus, in order to define the scope of the submission to arbitration in the present case, one has to look at the Request for Arbitration (submitted by the claimant) as well as the statements of defence and counterclaims.  They must be looked at as a whole.

35.In the present case, on 7 September 2011:

(1)  The Majority Partners filed a statement of defence and counterclaim in the arbitration.

(2)  The Minority Partners also filed their own statement of defence and counterclaim in the arbitration.

36.In the premises, the scope of the disputes that has been submitted to the tribunal for arbitration (as informed and defined by the Request for Arbitration, the Majority Partners’ defence and counterclaim, and the Minority Partners’ defence and counterclaim) is generally:

(1)  The adjudication of the claimant’s claim for damages and amount due under the MFA.

(2)  The adjudication of the Majority Partners’ counterclaim.

(3)  The adjudication of Minority Partners’ counterclaim.

37.Given that the claimant and the Majority Partners both agreed that the arbitration should be terminated in light of the Settlement Deed, the relevant question in the arbitration that remained for the tribunal to decide was thus whether the Minority Partners’ counterclaim should be allowed to continue.  The tribunal has identified this issue at paragraph 3.1 (2) of the Award as “if this Tribunal has jurisdiction, does the Settlement Deed preclude the Minority Partners from continuing their claims against [the claimant]”[7].

38.In my view, the continued validity of the Minority Partners’ counterclaim relates to the adjudication of the Minority Partners’ counterclaim, and must therefore be a “difference” or dispute falling squarely within the terms and scope of the submission to arbitration as highlighted above. 

39.In this regard, it is pertinent to note that it is the Minority Partners’ own case that the subject matter of their counterclaim in the arbitration are choses in action that belong to the respondents as a firm[8]. In other words, the Minority Partners’ own case is that the counterclaim is premised on the respondents validly having and continued to be so having the relevant choses of action.  I of course note that it is also their case that a partner of a partnership has a right to prosecute claims belonging to the firm, subject to such partner indemnifying any partner or partners not consenting to make the claim[9], but this does not change the need for the respondents to have a valid and existing claim for the Minority Partners to also have a valid and existing counterclaim.

40.In the premises, in determining whether the Minority Partners’ counterclaim is still on foot and valid, it must be relevant and pertinent for the tribunal to decide whether the respondents continued to have the relevant valid choses of action.  This in turn would depend on whether the respondents’ said choses action under the MFA had been settled by reason of the Settlement Deed.  In other words, if the respondents’ own claim has been already been extinguished, so would the Minority Partners’ counterclaim. 

41.As far as I can see, the tribunal proceeds to deal with the question of whether the Minority Partners shall continue to have a valid counterclaim precisely in this way.  In dealing with the issue as to whether the Minority Partners could continue their counterclaim, the tribunal states at paragraph 5.4 of the Award:

“5.4. The claims of [the respondents] against [the claimant] were assets of the partnership. A majority of [the respondents’] partners [i.e., the Majority Partners] in a meeting on 7 October 2011 voted to ratify the Settlement Deed on behalf of [the respondents]. They had objective authority under the Partnership Deed and Hong Kong law to compromise or release [the respondents’] claims.”

42.The tribunal then goes on in the Award to explain why it is of the view that the Settlement Deed has validly settled the respondents’ claim and why the Minority Partners do not have a separate independent right to continue the counterclaim as follows:

“5.5 The authorities all point to this conclusion. See Blackett‑Ord & Haren on Partnership Law (4 Ed, 2011) at 21.9, where the authors write that a partner-

‘… may not usually refer a firm dispute to arbitration on his own authority, and he may not sue in the firm name against the express wishes of the majority (or the other controlling body) of the firm; if he does, they can put an end to the proceedings on their own, unless they are proceedings (such as a personal tax appeal) which are in substance his rather than theirs.’

5.6 See also the joint English and Scottish law Commission Report on Partnership law (Law Com No 283) at 7.5:

‘In the absence of any provision to the contrary in a partnership agreement, a partner has implied authority to commence proceedings in the name of the partnership, subject to providing any non-consenting partners with an indemnity for costs. In the absence of a provision in the partnership agreement, a majority of partners can resolve any difference in relation to the legal proceedings. But if the majority act in bad faith in preventing an action by the partnership against a third party, the wronged partners may apply to the court to have the partnership dissolved.’

5.7 Thus Hong Kong law, the Partnership Deed and the authorities all agree that [the claimant] and [the respondents] validly agreed to settle this dispute, the majority of the partners having had actual authority to do so on behalf of [the respondents].

5.8 The Minority Partners rely, however, on Section 7.1 of the DOT [Deed of Termination], which states:

‘The Partners shall (to the extent possible prior to the Cessation Date) agree upon a joint strategic approach to potential litigation relating to issues with GTIL and its other member firms including without limitation the GRA related litigation, the ex-MR partners litigation, potential claims against GTIL and/or GTUS and/or Jingdu relating to GTI, GTUS, Jingdu, the former GT China platform (“together [sic] the Potential Actions”) based on legal advice to be obtained by the Partnership. To the extent that some (albeit a minority), but not all, Partners wish to pursue or continue proceedings relating to the Potential Actions in the name of GTHK or the Partnership, the Partners agree to take all steps reasonably necessary to allow such Partners to do so including to permit the resignation or retirement of non-consenting Partners notwithstanding Clause 6.2 (a) of this Deed, but subject always to such Partners being solely responsible for all costs and liabilities relating to any such litigation (and sharing the rewards if any of the litigation), and such partners indemnifying and holding harmless the other Partners on terms reasonably acceptable to the indemnified Partners (acting at all times reasonably, with a view to permitting such litigation to occur, and so that such indemnity shall not extend beyond indemnification for the consequences of such litigation or remained Partners of GTHK) prior to any such litigation being pursued or continue.’

5.9 The DOT provided a means by which the Minority Partners could proceed with the claims against [the respondents] on behalf of the [respondents] under certain stated conditions. It is pursuant to this right that the Minority Partners claim the ability to assert the counterclaim.

5.10 The record includes a draft indemnity Agreement that the Minority Partners offered to Majority Partners on 17 August 2011. The Majority Partners rejected the indemnity, seeking security in support of the indemnity offered. Since Clause 7.1 of the DOT requires that the indemnity be reasonably acceptable to the Majority Partners, and since they did not, in fact, find the indemnity acceptable, Clause 7.1 of the DOT was never engaged.

5.11 Whether or not and when [the claimant] knew about the terms of the DOT is irrelevant. The Majority Partners had the lawful right to settle the dispute and they did so.

5.12 If the Minority Partners have any claim as a result of an alleged breach of Section 7.1, their claim must be against the Majority Partners for damages from that breach. It has no effect upon the validity of the settlement between [the claimant] and [the respondents].

5.13 Any such claim must be by the Minority Partners against the Majority Partners under the DOT.

5.14 English law governs the DOT. It has no arbitration clause. We have no right to adjudicate on any such claim and must leave it to the courts.

5.15 Nevertheless, it seems clear to the Tribunal that the Majority Partners were within their rights in refusing to accept a bare indemnification from the Minority Partners in a very expensive series of legal disputes which could involve liabilities for all of the partners of many millions of US dollars. Indeed, in our view the rejection of the indemnity was entirely understandable and wholly justified by the complete absence of any proferred security therefor.

5.16 In short, while the contentions of the Minority Partners in this respect were cleverly and skilfully argued, their cause is legally hopeless. This arbitration must be terminated and the counterclaims of [respondents] against [the claimant] wholly extinguished.” [emphasis added]

43.The decisions on these matters are all properly and reasonably related to and required for the determination of the principal question as to the validity of the Minority Partners’ Counterclaim, which as I have said above is within the scope of the submission to arbitration.

44.In my view, the words “decisions on matters beyond the scope of the submission to arbitration” under s 89(2)(d)(ii) should be construed narrowly to only include those decisions which are clearly unrelated to or not reasonably required for the determination of the subject disputes, matters or issues that have been submitted to arbitration.  Arbitrations are intended and supposed to be an expedient, procedurally less complicated and costs effective private dispute resolution process.  The courts and the AO are there to facilitate the effective and fair operation of arbitrations through interlocutory court orders and enforcement of the awards[10].  To construe s 89(2)(d)(ii) otherwise widely is likely to (a) impede arbitration proceedings and increase costs, as it would encourage parties (or one of the parties) to engage in an exercise in trying to segregate satellite or ancillary issues and questions from an arbitration for separate court determinations, and (b) encourage unwarranted microscopic and truncated challenges to an arbitral award by the losing party.  This cannot be the intention of the legislature and the objective of the provision.

45.In the premises, the tribunal’s decisions on these matters also do not go beyond the scope of the submission to arbitration.

46.For these reasons, the Minority Partners have failed to prove under s 89(2)(d) that the tribunal had acted beyond the scope of submission to arbitration in its decision to reject the Minority Partners’ counterclaim and terminate the arbitration. 

47.I therefore would not refuse the enforcement of the Award under this basis.

C2.  Material non-disclosure

48.The Minority Partners complain that there is material non‑disclosure by the claimant in applying for and obtaining the Ex Parte Order. 

49.The material non-disclosure is the failure on the part of the claimant to disclose to the court the Minority Partners’ application in England to set aside the Award.

50.The pertinent facts relating to the complaint are as follows (which are in substance undisputed):

(1)  The claimant made the ex parte application to this court for leave to enforce the Award on 10 April 2012.  This was supported by the affirmation of a Ms Wu, a solicitor of the firm acting for the claimant.  At that time, the claimant and their solicitors were not aware of the Minority Partners’ intention to apply to set aside the Award in England.

(2)  On 18 April 2012, the Minority Partners’ solicitors informed the claimant’s solicitors their intention to set aside the Award. 

(3)  On 23 April 2012, the Minority Partners’ solicitors served the papers relating to that setting aside application in England on the claimant’s solicitors. 

(4)  This court granted the Ex Parte Order on 30 April 2012.  But up to then, the claimant’s solicitors had not informed the court the fact that the Minority Partners had applied to the English court to set aside the Award.

51.It is common ground that the claimant as an applicant owes a duty of full and frank disclosure to the court when making an ex parte leave application.  This duty must include making disclosure of all facts and materials relevant to the determination of that application which are within the knowledge or reasonable contemplation of the claimant. 

52.I have no doubt that the fact that the Minority Partners had in fact made an application to set aside the Award was relevant to the court’s consideration of the ex parte leave application, and should have been disclosed by the claimant.

53.Mr Brock for the claimant however submits that the duty to make full and frank disclosure in an ex parte application for leave to enforce an arbitral award should cease after the application has been submitted and is not a continuing one up to the making of an order.  He says this is so because in such an application, there is a standard proviso in the order (if made) to effectively stay the ex parte order for 14 days to enable a respondent to apply to set it aside[11].  The respondent is (Mr Brock further says) thus “protected” from the ill-effect or mischief, if any, of an ex parte order obtained by such a failure to make the disclosure, because the order is not taking any effect even after the respondent has been served with it. 

54.I do not agree:

(1)  The duty to make full and frank disclosure is imposed because of the nature of the ex parte application itself, ie, that the court is dealing with an application in an unusual situation in hearing (or reading) only one side’s case and submissions, and that the court is asked to grant a relief without the person against whom the relief is sought having the opportunity to be heard.  The duty is thus imposed to ensure that the application is made with the highest good faith[12].

(2)  The duty of full and frank disclosure has repeatedly been said to continue while the proceedings remain on an ex parte basis, and that includes the duty to inform the court of any material change of circumstance which comes to the knowledge of the applicant[13].

(3)  Unless expressly qualified by statute, as a matter of principle, I cannot see how and why the scope of such a duty, which is premised good faith and the inherent nature of an ex parte application, should be reduced or watered-down in an application for leave such as the present one. 

(4)  In any event, if Mr Brock were right in his “proviso” submissions, as a matter of logic, the duty of full and frank disclosure should not even bite in the first place at the time of the ex parte application of the present nature.  This simply cannot be right. 

55.I therefore reject Mr Brock’s submissions and hold that the duty of full and frank disclosure imposed on an ex parte application for leave to enforce an arbitral award is a continuing one, as long as the application remains an ex parte one.

56.I therefore further agree with Mr Wong for the Minority Partners that there is material non-disclosure in the application for the Ex Parte Order.  The Ex ParteOrder should thus be set aside.

57.However, that is not the end of the matter.  It is trite that in such a situation, the court has a discretion to re-grant the order on an inter parte basis. 

58.In the present case, I would exercise my discretion to re-grant leave for the enforcement of the Award, as (subject to the issue of costs, which I would deal with later) any refusal to re-grant leave to enforce the Award would be disproportionate in light of the following:

(1)  There are no recognised bases under the AO to refuse the enforcement of the Award.  See my conclusion above under section C1.

(2)  I accept that this is not a case where the claimant had deliberately misled the court in failing to make the material non-disclosure.

C3.  The claimant’s striking out summons

59.The striking out summons is based on the contention that the relevant parts of Mr Alan Tang’s Affirmation made in support of the allegations of material non-disclosure of Ms Wu are scandalous and frivolous, as they allege a solicitor failing to make full and frank disclosure. 

60.Given that I have concluded above that there is material non‑disclosure by the claimant in obtaining the Ex Parte Order, the “allegations” that Ms Wu has failed to make full and frank disclosure (even though not made deliberately) cannot be said to be scandalous or frivolous.  It follows that the striking out summons must therefore be dismissed.

D.  CONCLUSION

61.I would dismiss the setting aside summons and re-grant leave (on an inter-partes basis) to the claimant to enforce the Award.  The claimant’s solicitors shall draw up the relevant enforcement order.

62.Insofar as costs is concerned, given that I have set aside the Ex Parte Order on the basis of material non-disclosure, although I have exercised my discretion to re-grant leave to enforce the Award, I think it is only just and fair in all the circumstances to make an order nisi that:

(1)  Two-thirds of the costs of the setting aside summons be to the claimant, to be taxed on an indemnity basis[14] if not agreed.

(2)  There be no order as to costs of the application for the Ex Parte Order.

63.I would also dismiss the claimant’s striking out summons and make an order nisi that costs of that summons be to the Minority Partners to be taxed if not agreed.

64.Unless any of the parties applies to vary the same by summons, the order nisi shall be made absolute 14 days from today.

Mr Denis Brock of King & Wood Mallesons, for the claimant

Mr Anson Wong, instructed by ONC Lawyers, for the minority partners of   the respondents

[1] Dated 17 May 2012.

[2] Dated 25 May 2012.

[3]   The reasons why the Minority Partners withdrew the application for injunction inter-partes have been set out in Deputy High Court Judge Lok’s reasons for decision on costs dated 3 November 2011, at paragraphs 15-17.

[4]   See the Minority Partners filed statement of case in relation to settlement issue dated 9 January 2012, paragraph 2.

[5]   The Minority Partners filed statement of case, paragraph 29.

[6]   Minority Partners’ skeleton before the tribunal, paragraph 37.

[7]  The tribunal has also identified (a) the jurisdiction issue raised by the Minority  Partners that the tribunal did not have jurisdiction to deal with the arbitration at all, because certain conditions provided in the relevant arbitration clauses of the MFA had not been complied with, and (b) the remaining issue of costs.  The tribunal concluded at para 4.18 that it had jurisdiction, and went on to deal with the issue of the Minority Partners’ counterclaim.  The ruling on jurisdiction does not concern the present setting aside application before this court.

[8]   See Minority Partners’ Statement of Case dated 9 January 2012, paragraphs 32, 33.

[9]   Ditto.

[10]   See for example the observations in Xiamen Xinjingdi Group Ltd v Eton Properties Ltd [2008] 4 HKLRD 972 at paragraphs 46-47 per Reyes J.

[11]   See: O 73 r 10(6) of the Rules of High Court (Cap 4A).  The proviso is worded generally as “Within 14 days after service of this Order, the [respondent] may apply to set aside the Order, and the [subject award] shall not be enforced until after the expiration of that period or, if the [respondent] apply within that period to set aside the order, until after the application is finally disposed of”.

[12] Hong Kong White Book 2013, paragraph 29/1/51 (p 650).

[13]   Ditto, p 651.

[14]   See A v R [2009] 3 HKLRD 389, paragraphs 68-72, re-affirmed by Court of Appeal in Pacific China Holdings Ltd (in Liquidation) v Grand Pacific Holdings Ltd (CACV 136/2011, 23 July 2012, Tang VP, Kwan and Fok JJA) at paragraphs 4-19.