The Joint and Several Trustees of the Property of Chau Cham Wong Patrick, A Bankrupt v. Highmax Overseas Ltd and Others

HCB 549/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

IN BANKRUPTCY PROCEEDINGS

NO. 549 OF 2012

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RE: CHAU CHAM WONG PATRICK, a bankrupt

BETWEEN

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D E C I S I O N

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1.On 16 May 2012, Patrick Chau, whom I shall call “the bankrupt”, was adjudged bankrupt. Prior to his bankruptcy he used to be the chairman and executive director of a listed company called Peace Mark (Holdings) Limited (which I shall call “Peace Mark”). Trading in shares in Peace Mark was suspended on 18 August 2008. Provisional liquidators were appointed on 10 September 2008.

2.Provisional liquidators were appointed over A-One Investment (which I shall call “A‑One”), a controlling shareholder of Peace Mark (Holdings), on 23 September 2008.  On 29 September 2008, A-One Business, a subsidiary of A‑One, obtained a worldwide Mareva injunction against the bankrupt in High Court Action 1868/2008 (later HCCL 32/2009), based on misappropriation of assets.  Eventually judgment was entered by consent against the bankrupt for the sum of $132 million on 3 January 2012.

3.The long and short of the matter is that in or around August and September 2008 things were not looking too well for the bankrupt financially; things were not looking too well for the bankrupt and Peace Mark (Holdings).  It is against this background that the following events are to be assessed.

4.On 28 August 2008 three properties on Robinson Road were assigned by the bankrupt in favour of three companies, namely, the 1st to 3rd respondents respectively.

5.On 4 September 2008 it is said that the bankrupt, as settlor, set up a discretionary trust called the Level and Square Trust (which I shall call “the Trust”) with TMF as trustee.  The 1st to 3rd respondents (the assignees of the Robinson Road properties) and the 4th respondent (the assignee of a property in Aberdeen, which I shall deal with below) are said to be companies indirectly wholly-owned and controlled by the Trust.

6.On 19 September 2008, the bankrupt assigned a property in Aberdeen to the 4th respondent.  The total consideration stated on the face of the assignments added up to about $60 million but the trustee in bankruptcy of the bankrupt says that no evidence of payment could be located.  Neither the trustee nor the respondents had produced any evidence to the contrary.  Also, there is no evidence that the transfers were preceded by any sale and purchase agreement.

7.All four assignments were signed by the bankrupt’s children as directors of the relevant respondents.  However, according to the third affirmation of Zelinda Ng at paragraph 5, the children ceased to be directors of the respondents on the very day when the various assignments were signed.

8.The only way in which this can happen on the basis of the present evidence is that immediately after signing the assignments the children ceased to be directors.  This, prima facie, gives rise to the impression that this was a planned state of affairs where cessation to be directors is linked to signing of the assignments, but no explanation has been placed before me as to why this is so.

9.Coming back to the narrative, after judgment was entered against the bankrupt on 3 January 2012, the Mareva injunction was extended by Reyes J to prevent the 1st to 3rd respondents from disposing of the Robinson Road properties.  The injunction, as sought at that time, did not catch the 4th respondent or the Aberdeen property because, according to the liquidators, they were not yet aware of the existence of the Aberdeen property until 31 August 2012.  There was no provision for using any corporate fund or trust fund for legal expenses or maintenance of properties in that extended Mareva.  The Mareva injunction, so extended, was continued until judgment or further order on 9 February 2012.

10.Before the trustee in bankruptcy had discovered the Aberdeen property and before any injunction could be sought, the 4th respondent sold the Aberdeen property on 8 May 2012 for a sum of $9.8 million.  Following the sale, the bankrupt was made bankrupt on 16 May 2012.

11.On 22 October, an application was made by the trustee in bankruptcy to seek declarations that the respondents were holding various properties on trust for the bankrupt; and further, or in the alternative, to avoid various transfers under the relevant legislation (which I shall call the “avoidance application”).

12.On 22 November 2012, a Beddoe application was made by the trustee and the respondents joining the children of the bankrupt as parties.  The originating summons for the Beddoe application had been exhibited by Zelinda Ng as NKYZ-5 to her first affirmation.  The avoidance application went before Barma JA, on 30 November 2012 and his Lordship adjourned the application until after the determination of the Beddoe application, but with liberty to apply (to cater for the eventuality that there was some undue delay in the prosecution of the Beddoe application.  See the transcript at bundle C, page 648, letters C to U.)

13.The initial hearing of the Beddoe order was fixed for 15 minutes on 5 February, some two and half months after its issuance.  After Mimmie Chan J’s callover for the injunction application on 22 February, the respondents proceeded to obtain an early date for hearing the Beddoe application.  In due course, the hearing date was fixed for 10 April 2013 and a decision on the Beddoe application was handed down on 6 May 2013.

14.Although the decision and of course the argument in the Beddoe application is not open to the public, Mr Smith, within what is permitted, has informed me that, in gist, the Beddoe judge directed that the companies should remain neutral and confine their stance to the filing of affidavit evidence or defence, stating material facts within their knowledge and submitting to the court’s direction as well as making discovery in the bankruptcy and related proceedings; and the children should apply to be joined in the avoidance application, failing which the trustee should be at liberty to apply for those persons to be joined as defendants in the bankruptcy proceedings.  Also, the 4th respondent and the trustee were authorised to utilise the sale proceeds of the Aberdeen property or any balance thereof, towards payment of all trustee’s reasonable fees and properly incurred general administration costs, expenses and all reasonable costs and expenses properly incurred in maintaining the Robinson Road properties.

15.The stance of the respondents in this application is that they would undertake not to dispose of assets save that reasonable amounts may be spent on legal advice and representation including the Beddoe application, maintaining the properties and discharging duties as trustee.  This was offered in a letter dated 13 December 2012 and at one time the trustee in bankruptcy had accepted it although they have since changed their mind.  The argument before me turned largely on whether or not the respondent should be allowed to use the sale proceeds of the Aberdeen property towards legal costs, maintaining the properties and discharging duties as trustee.

16.By way of figures, I have been given the following:

(i) The sale proceeds of the Aberdeen property amounted to $9.8 million.

(ii) The sale took place in May 2012.

(iii) As of 13 December 2012 the net proceeds left were $8,236,723.68 (meaning a depletion of about $1.5 million).

(iv) The same was the case as of 20 February 2013, the date when Zelinda made her first affirmation (see paragraph 23(a) thereof).

(v) At the hearing before me the balance of the sale proceeds was said to be about $7.5 million.  If one were to take into account accrued and unpaid liabilities, this was said to be further reduced to about $7 million.  This morning Mr Smith kindly updated me and informed me that the figure should be revised to $6,423,157.64, which amounted to a depletion of more than $3 million since its sale about a year ago.

(vi) At the hearing before me a sum of about $15,000 was said to be needed per month in relation to the maintenance and upkeep of the three properties (such as management fees, Government rent and rates, etc).  I note that the properties were all “clean” in the sense that they were not subject to any mortgage.  This morning the sum has been revised to $33,000 per month.

17.Ms Linda Chan, SC, submitted before me as follows:

(i) The Beddoe order is a red herring because the trustee in bankruptcy is not a party and is not bound.  It would be wrong to characterise the trustee in bankruptcy’s case as one which impugned any trust of which TMF was the trustee.

(ii) The transfers were made in favour of the respondents and the trustee in bankruptcy’s case is that in the absence of any consideration paid by the transferee, the transfers would give rise to a trust under general trust law principles.  It does not matter who the beneficial owners of the shares of the respondent companies were.  It would therefore be wrong to characterise the case as involving a fight between one camp of beneficiaries (namely, the trustee in bankruptcy) and another camp of beneficiaries (namely, the beneficiaries under the discretionary trust), with the trustee being entitled to sit in the middle and recoup its costs from the trust fund.

(iii) The correct analysis is that the trustee in bankruptcy is suing the respondents for what the trustee in bankruptcy says to be its property in equity which was held by the respondents on trust for the trustee in bankruptcy. 

18.Relying on what Millett J had said in the decision of Ostrich Farming Corporation Ltd v Ketchell and another [1997] EWCA 2953 and what Au J said in the decision in Wharf Ltd v Lau Yuen How [2010] 1 HKLR 783 at paragraph 13, Ms Chan submitted that:

(i) the respondents were not entitled to use what was not their funds to finance their legal costs; and

(ii) that the respondents had, in any event, not made full and frank disclosure that there were no alternative funds or assets available.

(iii) For the sake of completeness, I set out below the passage relied upon by Ms Chan from the Ostrich case in paragraph 24 of her skeleton argument:

“If he cannot show an arguable claim in his part to the funds, he has no right to use the money. A trustee has no right to have recourse to trust money to defend himself against a claim for breach of trust unless he has an arguable case for saying that he has a beneficial interest in the funds in question. No man has a right to use somebody else’s money, for the purpose of defending himself against legal proceedings. Just as the court’s jurisdiction to grant the injunction in the first place depended on the plaintiff’s establishing an arguable case that the money belongs to it, so its willingness to permit the defendant to have recourse to the money depends upon his establishing an arguable claim to the money.”

I further set out, again for the sake of completeness, the passage relied upon by Ms Chan from the Wharf case, as per paragraph 25 of her skeleton argument:

“The principles applicable to the release of funds to pay legal costs from an injunction involving proprietary claims are well settled. It is an exercise of discretion which involves a two-stage process:

(a) First, the defendant applying for the release of funds has to demonstrate with full and frank evidence that there are no alternative funds or assets available to him which can be used to pay his legal expenses other than the assets in respect of which the plaintiff brings the proprietary claim. If the defendant fails in the first hurdle, the court need not consider the second stage and the application should be dismissed.

(b)  Secondly, once the first hurdle is cleared, the Court in the exercise of its discretion will engage in a balancing exercise to weigh the potential injustice to the plaintiff if releasing the funds against the possible injustice to the defendant of depriving him of the opportunity to have legal assistance in advancing what may eventually turn out to be a successful defence.  This process is a ‘careful and anxious judgment’, and the court is entitled to look at all relevant circumstances, and in particular, to weigh the relative strengths of the plaintiff’s proprietary claim in the funds and the defendant’s defence to that claim.  In relation to this, it is not sufficient for a defendant to merely establish that he has no other funds, for even so, he must also show that there is an arguable case for his having recourse to the funds in question, failing which, he has no right to use the money.  As Millet LJ (as he then was) said in Ostrich, infra, ‘[n]o man has a right to use somebody else’s money, for the purpose of defending himself against legal proceedings’.”

(iv) In any event, she submitted that the respondents’ conduct demonstrated that there is a risk of dissipation.

19.Mr Smith, SC, submitted that Ms Chan’s analysis as to why the trustee in bankruptcy’s claim is not one including a trust was raised only for the first time at the hearing.  He accepted that the Beddoe order did not bind the trustee in bankruptcy but he submitted that this really is a case where, realistically, there were two competing sets of beneficiaries and the trustee should be able to look to the trust fund to defray trust expenses and legal expenses.  In any event, Mr Smith submitted that the respondents’ hands were tied because prior to the Beddoe order the respondents did not feel able to put forward fuller evidence to explain the position and it was not clear what stance the respondents should take. 

20.He lastly submitted that, apart from the undertaking, the case for risk of dissipation was weak because if the money was to be gone, the money would have been gone long ago given the time gap between the sale and the application and also the hearing.

21.In my view, there is great force in Ms Chan’s analysis of the situation.  As the evidence now stands (and I emphasise “as the evidence now stands”) the arguments about the Trust are a red herring. The trustee is not even a party to these proceedings.  The existence of the Trust may go to who owned the shares, which are legally vested in the name of the legal owners.  (I remind myself that Zelinda Ng actually says that the respondents were “indirectly” owned and controlled by TMF and therefore it may be that TMF was not even the registered legal owner of the shares of the respondents.)

22.But that has nothing to do with a proprietary fight over the properties which are legally vested in the companies’ names.  It may be that if cash is available with the companies and if they were paid up the corporate chain by way of dividends, the cash may one day find its way into the hands of the trustee in which case the money may well be characterised as trust money.  But until that happens, the funds vested in the name of one or more of the companies could not be the subject of any “trust property” held by the trustee.

23.In common parlance, or layman’s language, trustees or trust officers may well wish to refer to assets owned by companies within the corporate chain in a trust structure as being “trust property” but lawyers will know that is not correct legally.  That being so, this is not even a trust dispute within the meaning of Alsop Wilkinson v Neary [1995] 1 All ER 431 where Lightman J at page 434 D to F said this:

“Trustees may be involved in three kinds of dispute. The first, which I shall call a trust dispute, is a dispute as to the trusts on which they hold the subject matter of the settlement. This may be friendly litigation involving, for example, the true construction of the trust instrument or some other question arising in the course of the administration of the trust, or hostile litigation, for example, a challenge in whole or in part to the validity of a settlement by the settlor on grounds of undue influence or by a trustee in bankruptcy or a defrauded creditor of the settlor in which case the claim is that the trustees hold the trust funds as trustees for the settlor, the trustee in bankruptcy or creditor in place of or in addition to the beneficiary specified in the settlement. The line between friendly and hostile litigation which is relevant to the incidence of costs is not always easy to follow. (See Buckton [1907] 2 Ch 406.”

24.The Beddoe order is irrelevant because the trustee in bankruptcy was not a party to the Beddoe application and also the Beddoe order proceeded on the basis of this being a trust dispute which, as I have analysed above, would not be a correct analysis of what was actually happening. 

25.Mr Smith complained that the trustee in bankruptcy could have intervened in the Beddoe application but I see no reason why they should because, according to the view taken by the trustee in bankruptcy, the Beddoe order simply did not concern them.  They were perfectly entitled to take the view that if the trustees wanted to go ahead to argue a Beddoe order on the basis of an inaccurate footing, then they were perfectly entitled to go ahead and do something which was futile.

26.This also brings me to the reason why it is said the trustee in bankruptcy has not been joined.  I have already held that this is not a case of a trust dispute within the meaning of Alsop Wilkinson where the dispute is between rival beneficiaries.  But let us assume for the sake of argument that I am wrong and Mr Smith is right and this is really a case of competing beneficiaries and therefore a trust dispute according to what Lightman J has said in Alsop Wilkinson.  Then, further, in accordance with what Lightman J had said in the same case at 436 F to G:

“The justification for the protection afforded to trustees by a Beddoe order is that the beneficiaries are given the opportunity to make representations to the court before the order is made. (I emphasise that in the case where there are unresolved disputes as to the identity of the beneficiaries, for example, because of a trust dispute, then all possible claimants should be joined.)”

27.Mr Smith explained that the trustee in bankruptcy was not joined because they were amenable to the trustee in bankruptcy remaining neutral anyway.  But the trustee in bankruptcy was not amenable to the proposed treatment as to costs coming out of the proceeds of sale.  That was extremely contentious.  That being the case, they ought to have been joined if this was really to be analysed as a trust dispute.  I stress that this is on the alternative basis if I were wrong in my analysis that this is not a trust dispute.

28.I am also not satisfied that the trustees and/or the respondents have made full and frank disclosure as to the means and resources apart from the proceeds.  In Zelinda Ng’s first affidavit, at paragraph 23 the deponent said:

“As at the date of this affidavit, the trust fund consists of the following:

(a) the balance of the sale proceeds of the Aberdeen property in the sum of HK$8,236,723.68;

(b) a cash balance of HK$3,595.20; and

(c) the Robinson properties.”

and at paragraph 24 of her first affidavit she said:

“As the 1st to 4th respondents are asset holding vehicles, the only funds available to them and the trustee to meet the costs of maintaining the trust assets, legal advice and representation are effectively the sale proceeds of the Aberdeen property. This was made clear to the solicitors of the applicants in a letter from our solicitors to them dated 30 January 2013.”

29.First of all, paragraph 23 of the affidavit reviewed a misapprehension as to the significance and relevance of the Trust in the sense that the deponent mixed up the concept of a trust fund and referred to the Robinson properties and the sale proceeds as being trust money.  But, more importantly, without impugning the deponent’s credibility in any way, there are many questions that have remained unanswered.  For example, in connection with the sale of the Aberdeen property, Zelinda Ng had said in paragraph 17(c) of the first affidavit that:

“The Mareva injunction did not extend to the 4th respondent or the Aberdeen property and there was a legitimate need for the trustee to raise cash for the maintenance of the trust assets and to pay legal costs.”

30.The impression created was that the Trust or the respondent had no cash and this was why the property had to be sold.  The question then immediately arose as to how the legal fees and maintenance of the property had been funded prior to such sale.  Either there had been some cash within the respondents or within the Trust which had somehow all been used up, or someone else outside the Trust had been paying for such expenses all along. I am entitled to know this because it goes to the exercise of my discretion in accordance with the principles laid down by Ostrich and Wharf.  I have received no such information.

31.Another area causing me concern is the fact that the properties have not been tenanted.  The situation, I am told, is this:

(1)  Of the three Robinson Road properties one is now vacant and two are occupied.

(2)  The vacant one used to be tenanted but because of the Mareva injunction it was left vacant since the expiry of the tenancy because of a fear that it might be regarded as an encumbrance if it were to be let out.  But as Ms Chan has shown by reference to correspondence and also the transcript of the hearing before Chan J, the trustee in bankruptcy consistently asked for properties to be rented and called for a dialogue with the respondents to explore ways in which it could be done. Even if, purely as a matter of language, renting the property out might be feared to be called an encumbrance on the Robinson  Road properties, practically speaking the trustee in bankruptcy wanted them to be rented out.  I am sure that “if there was a will, there must be a way”, but no steps had been taken at all, at least on the basis of the papers that I have seen, which casts doubt (I put it at the mildest) on whether there was any “will” on the part of the respondent or the trustee in the first place.  It was not an answer to say that rental income would fall within the trust assets and therefore be captured by the injunction because, I stress, it was the trustee in bankruptcy’s position that means should be explored to rent it out and rental proceeds be used to finance whatever financing needs were faced by respondents and the trustee.

(3) As to the other two properties, they are now occupied by the bankrupt’s wife and one of the bankrupt’s children on a rent‑free basis.  I am told that this had been going on even before any Mareva injunction and therefore the non‑charging of rent could not have been due to any fear or concern over possibly encumbering the asset in breach of the injunction.  I have had no explanation whatsoever as to why these people have been allowed to stay there rent‑free.

32.These concerns are relevant to, first of all, whether the respondents have fulfilled the burden in Wharf as well as to concerns as to risk of dissipation.  In the absence of any explanation or evidence I find that the respondents have not surmounted the burden imposed by the authorities especially in Wharf and I also find that there is a legitimate fear of a risk of dissipation of the proceeds not in the sense of an outright disappearance but by way of a gradual frittering away of the proceeds through payments of legal fees here and there and maintenance costs here and there.

33.I am fortified in my finding of a risk of dissipation by the coincidence of timing.  Every time there was an event concerning the properties, something happened to the bankrupt or his children.  I have already referred to the timing of the various transfers above.  Shortly after the sale of the Aberdeen property, the bankrupt himself went bankrupt and on the same day as the assignment was signed the children who signed the assignment ceased to be directors.  One is left with a distinct impression that the various transfers and manoeuvres were instigated or motivated by the bankrupt or those associated with him in one way or another.

34.I take on board the point that the absence of evidence from the respondents was said to be because, pending the Beddoe order, the trustee would not know and the respondents would not know what stance to adopt.  To use the language of Zelinda Ng in paragraph 21 of her affidavit the respondents were “heavily constrained” in their ability to defend these proceedings and can only take very limited steps until directions are made by the court in the Beddoe application.

35.Also, in the same affidavit at paragraph 7 Zelinda Ng alluded to issues as to “client confidentiality”.  I note what was said, but I also note that these matters have not precluded the respondents from asserting matters concerning the Trust (and thereby adducing evidence on incurring costs) which were perceived to be of use to the respondents’ position such as, for example, (i) the bankrupt was a settlor of the Trust, (ii) the Trust was discretionary, (iii) it was established in the Caymans, (iv) that the respondents were companies under the Trust structure, and also (v) who were not beneficiaries.  I therefore have slight reservations as to how “constrained” the respondents really were.

36.As things now stand, I think there is a very strong case that an interlocutory injunction should be granted with no allowance whatsoever for legal costs and expenses, and that is irrespective of the undertaking that had been offered by the respondents.  In other words, even without the undertaking, I think there is a very strong case that an interlocutory injunction would have been granted anyway without allowance.  However, in view of the respondents’ express position about the constraints they faced, and notwithstanding my reservations about it, I am prepared, in the exercise of my discretion to give the respondents, put bluntly, one more chance for them to place evidence before the court and then seek to persuade it in an unconstrained manner that there should be a liberty to resort to the proceeds of the Aberdeen property to defray legal and other expenses. 

37.Put in other words, usually a litigant has one bite at the cherry and if it does not put forward whatever evidence that it perceived to be in his favour, and suffers a court order, that is it.  But in the present case I am, in the exercise of my discretion, prepared to give the respondents a second bite at the cherry and that is it.

38.Mr Smith had informed me that the respondents estimated that a sum of around $300,000 would be needed for the respondents to prepare and finalise evidence for the purpose of the avoidance application. Given this estimate and given the figures that I have been given during the hearing and this morning which I have set out above, and in the exercise of my discretion, I am going to grant an interlocutory injunction in terms set out in the trustee in bankruptcy summons, subject to a liberty to spend up to $360,000 for reasonable costs of legal advice and representation, as well as costs in the maintenance of the Robinson Road properties.

39.I also give liberty to apply for the respondents to address the court upon filing of evidence by the respondents as to whether the provision for expenses should be extended and, if so, on what terms. 

40.There is no scientific position as to the sum I have fixed above, although I have taken into account the various estimates given to me by Mr Smith; for example, the $300,000 estimate and also the $33,000 per month estimate.  I know that the estimate for costs has not taken into account matters such as the need for reply evidence and also any brief fee required when the parties come back and it may well be that if one takes a strictly arithmetical approach, if one adds monthly maintenance of $33,000 per month to the $300,000 costs estimate, the $360,000 may appear to be a very tight budget which may either entail a risk that work may have to be toned down or the trustee may have to dip into its own pocket, but it is all a matter of a broad brush discretion.  There is no legal entitlement that the trustee must have what it says to be its estimate or even the “buffer”.

41.I have taken the predicament that the trustee might have to face in the exercise of my discretion into account.  But I also take into account the fact that the $300,000 is an estimate.  It could be an over‑estimate or it could be an under‑estimate.  I have to balance the interests of the respondents against the interests of the trustee in bankruptcy. If it shall eventually turn out that the respondents were, after all, unable to persuade the court of the criterion laid down in the cases, in a case like this, then any allowance given now could be counted, bluntly, as a prejudice to the trustee in bankruptcy.  On the other hand, if eventually the trustees were able to persuade the court, then they will surely be able to recoup any shortfall from the proceeds and there is not much prejudice to them.

42.In fixing the figure, I have not factored in any allowance for the trustees own administration costs of “the Trust” because, as I said, I have yet to be persuaded of the Trust’s and the trustee’s benefits in this case and, as I have said, the trustee is not even a party.  I so order.

43.I now move on to the directions that I shall give for the avoidance application.

44.The trustee in bankruptcy’s application for directions was taken out by summons dated 16 April 2013 at a time when the Beddoe judgment had not yet been handed down.  But it has now been handed down and therefore the adjournment by Barma J has expired by its own terms and so the trustee in bankruptcy need not carry the burden of persuading me in a way, to uplift the adjournment because of some undue delay in the Beddoe application.

45.As a result of the discussion that took place before me during the hearing, there is a good deal of consensus between the parties and I shall make the following order:

(1) Any application for joinder of the children should be taken out within 14 days. 

(2) The respondents do inform the children forthwith in writing of the terms of my order and the respondents do copy such notification to the trustee in bankruptcy.

46.By way of explaining this order, I am not forcing anyone to apply but the last date for any application for joinder would be within 14 days.  The children can apply.  The respondents can apply.  But the notification provision that I have included is because the children were not before me and the last thing that one wants is that if, and I say if, an order is eventually made in the avoidance application in the absence of the children, I do not want there to be any complaint by the children that somehow they had not been informed as to what had happened and they had had no chance to be heard.  So I will perhaps impose the burden on the respondents to notify the children so that at least they would know that they have a chance to apply in these proceedings.  They should know by way of their participation in the Beddoe application anyway, but there is no harm in being safe. 

47.My next order is that the respondents do file affidavit evidence within 28 days stating the material facts within their knowledge and disclosing all documents within their possession, custody or power relating to the establishment and administration of the Trust and of the respondents including but not limited to:

(i) the transfer of assets into the respondents;

(ii) any transfer of assets into the Trust;

(iii) any transfer of assets out of the respondents;

(iv) any transfer of assets out of the Trust;

(v) payments made on behalf of the respondents and the Trust (including but not limited to payments in respect of legal fees and maintenance expenses in respect of the Robinson Road and Aberdeen properties);

(vi) change of directorship of any of the respondents and the reasons therefore.

48.I have framed the order widely and also with some specificity with reference to such matters that, as things now stand, I can already see to be potentially the areas of scrutiny.  I am well aware of the sentiment about disclosing “trust information” without a court order, and to allay any such concerns, the order is mandatory and so there is no misunderstanding that there is a duty.

49.No suggestion or submission has been made to me that there are any complications arising from the fact that the Trust is a Cayman trust or that the respondents may not be in possession, etc, of any documents concerning the trust.

50.I also make an order in terms of the trustee in bankruptcy’s summons date 16 April, from paragraphs 3 up to 6 but I am not minded to make any directions about CMC or a trial as yet because obviously the matter may well develop and it is safer simply to leave the matter by way of giving liberty to apply.

(Discussion re costs)

51.In the exercise of my discretion on costs I would go for what some may call the “soft option”.  I will reserve the costs for the interlocutory injunction summons and I will also reserve the costs for the avoidance application directions summons.  I hope people know what I mean by the avoidance application directions summons.  It is the 16 April summons.

Ms Linda Chan, SC, instructed by King & Wood Mallesons, for the applicants

Mr Clifford Smith, SC, instructed by K & L Gates, for the 4^th respondent