NEWLY RISE INTERNATIONAL LTD v. YANG XIAOQIU AND ANOTHER

HCA 1186/2020

[2025] HKCFI 680

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1186 OF 2020

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J U D G M E N T

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A. INTRODUCTION

1.  The dispute herein arises from, according to the Plaintiff (“P”), a partly oral, partly written agreement entered into by P on the one hand and the 1^st and the 2^nd Defendants (“D1” and “D2” respectively, and “Ds” collectively)  on the other hand on or about 3 April 2018 (“the Final Agreement”)  for the purchase of the entire issued shareholding of a listed company, Stream Ideas Group Limited (stock code: 8401.HK)  (“the Listco”).

2.  In these proceedings, P is legally represented at all times, and is represented by Ms Astina Au in this trial.  D1 was legally represented up to 2 days before the pre-trial review hearing held on 13 November 2024.[1] D1 has filed pleadings and a witness statement in this action.  D2 was declared bankrupt on 25 November 2019 and discharged from bankruptcy on 25 November 2023.  D2 filed a Notice to Act in Person in these proceedings on 7 September 2023.  Save that, D2 has not taken any step in these proceedings.

3.  Having considered the evidence concerning service and notice adduced by P, I am satisfied that Ds have been duly notified of this trial and have been served with the trial bundles.  In the circumstances, I am of the view that this trial should proceed notwithstanding the absence of Ds.

B.  THE PARTIES’ RESPECTIVE CASES

4.  P is relying upon 3 causes of action:

(1)  Misrepresentation (against both D1 and D2):

P entered into the Final Agreement in reliance on the representations (made by D2 on behalf of himself and D1)  (“the Representations”)  to Madam Wang Xiao (“Madam Wang”, the sole director and shareholder of P, acting for P at all material times), which were false and negligently made. As such, P seeks rescission of the Final Agreement and damages.

(2)  Contractual Claim for refund (against both D1 and D2):

Alternatively, P is entitled pursuant to the refund provision in the Final Agreement (“the Refund Provision”)  to seek a return of HK$13.75m (“P’s Contribution”)  with contractual interest accrued thereon at the rate of 24% p.a.

(3)  Quistclose Trust (against D1):

P’s Contribution was made, and mutually understood and intended to be made, for the specific purpose that it should be paid to the original shareholders of Listco (“the Vendors”)  for the acquisition of the entire shareholding of the Listco (“the Designated Purpose”). There is no evidence showing that the monies were in fact paid to any of the Vendors.  In the circumstances, the Designated Purpose failed, and D1 should, as trustee, repay the sum of HK$13.75m to P.  D1 should also account to P all the profits derived from the use of that sum to P.

5.  D1’s defence to P’s claim is as follows:

(1)  As to the misrepresentation claim, D1 denies that the Representations were made on her behalf.  She contends that she was not present at or privy to the discussions between D2 and Madam Wang.

(2)  As to the contractual claim, D1 denies that she is bound by the Final Agreement, and contends that the only agreement reached with P is a cooperation memorandum signed by P and D1 on 3 April 2018 (“the Cooperation Memorandum”).  On D1’s case, the acquisition contemplated under the Cooperation Memorandum fell through because of P’s failure to pay its half-share of the intermediary fees (ie HK$1.25m)  by 5 April 2018 in accordance with Clause 1(4)  of the Cooperation Memorandum, which led to the Listco forfeiting the funds contributed by both P and D1 around 6 months after the date of the Cooperation Memorandum.

(3)  As to the trust claim, D1 denies that P’s Contribution was made for the Designated Purpose, and/or that P’s Contribution was impressed with a Quistclose trust.

6.  D1 has also raised a counterclaim against P for damages for breach of contract by failing to pay its half-share of the intermediary fees (ie HK$1.25m)  by 5 April 2018.

7.  D2 has not filed any pleading in these proceedings.

C.  THE FACTS

8.  There are only two witness statements before me in the trial, namely (a)  P’s witness statement; and (b)  D1’s witness statement, both were filed on 11 October 2023.

(1)  Madam Wang has confirmed her witness statement under oath in the trial.  In my view, Madam Wang’s evidence is supported by the documentary evidence and is inherently probable.  I accept and attach weight to Madam Wang’s evidence.

(2)  D1 has failed to attend the trial.  She has not confirmed the contents of her witness statement under oath, and has not been subject to cross-examination in the trial.  In the circumstances, I disregard D1’s witness statement, and the contents of that witness statement are not evidence in the trial.

9.  Based upon Madam Wang’s evidence and the documentary evidence before me, the facts as found by me are set out in the paragraphs below in this section.

10.  D2 is a Mainland Chinese national and a Hong Kong resident.  At all material times, D2 held himself out to have substantial investment experience in the Hong Kong stock markets.  D2 lives with D1, and they have a son.

11.  At all material times, Madam Wang was acting on behalf of P.

12.  In December 2017, D2 approached Madam Wang and sought to persuade her to join him in acquiring and selling “shell interests” (買殼), and D2 shared with Madam Wang some of his successful experience.

13.  Madam Wang was interested in the cooperation proposed by D2.  In the following months, Madam Wang periodically met with D1 and/or D2 to discuss details of the intended cooperation.  D1, D2 and P eventually identified the Listco – a company then in the process of making an application for an initial public offering (“IPO”)  – as the acquisition target.

14.  In the course of the negotiations, D2 (on behalf of himself and D1)  made the Representations as stated below to Madam Wang:

(1)  by way of oral representations, that Ds personally knew and had dealings with the management of the Listco (who were also at the time its major shareholders); and

(2)  by way of oral and written representations, that Ds had the ability to procure the sale of 100% of the shares of the Listco to a person of their choosing at a guaranteed price of at least HK$320m.  The written representation is evidenced by D2’s WeChat message to Madam Wang on 16 March 2018.

15.  Induced by and in reliance on the Representations, Madam Wang agreed to join Ds in the intended acquisition of the shares of Listco.  Although the terms of the agreement had yet to be finalised by that stage, D2 told Madam Wang that they had to first pay an “upfront payment” of HK$5m to secure the deal.  This sum was in fact for placement and underwriter fees (“the Underwriting Fees”).  Once this sum was paid, placement agents and underwriters would locate external investors for subscribing to the IPO shares of the Listco, thus removing the need for P and Ds to personally come up with the necessary funds to pay to the existing shareholders of the Listco.

16.  On D2’s instructions, P duly caused half of the Underwriting Fees (ie HK$2.5m)  to be paid to Ds via D1’s account on 17 March 2018, and documented the payment as a “loan” pending the finalisation of the terms of their intended cooperation.

17.  The Final Agreement was entered into by P and Ds on or about 3 April 2018.  The Final Agreement contained, inter alia, the following material terms, which were agreed to partly orally and partly in writing, as evidenced by the WeChat messages between P and D1, and the Cooperation Memorandum between P and D1 dated 3 April 2018:

(1)  P and Ds agreed to jointly purchase the entire issued shareholding of the Listco at the total cost of HK$265m, payable in three instalments.

(2)  The 1^st instalment was HK$87.5m.  Of this amount, HK$60m was expected to come from the public subscription of 25% of the IPO shares of the Listco, and as such P and Ds need only contribute to the remainder (ie.HK$27.5m), which comprised (a)  HK$20m (“Project Deposit”), (b)  HK$2.5m (“Intermediary Fees”)  and (c)  the Underwriting Fees.

(a)  The Underwriting Fees were payable immediately, save that P’s liability for the same (ie HK$2.5m)  shall be regarded as having been discharged by its payment of HK$2.5m to D1 on 17 March 2018.

(b)  The Project Deposit shall be paid on or about 4 April 2018.

(c)  P’s liability to pay its share of the Intermediary Fees (ie HK$1.25m)  could be deferred beyond the due date as stated in the Cooperation Memorandum (ie 5 April 2018).

(3)  In relation to the 2^nd and 3^rd instalments, Ds were authorised by P to enter into agreement(s)  with downstream investors to re-sell the parties’ pending interest in the Listco (“Pending Interests”)  in order to raise funds for the amounts due.  In this regard:

(a)  If a re-sale agreement was executed before 27 September 2018 (ie the due date of the 2^nd instalment), P would no longer need to pay any sums outstanding under the Final Agreement as payment to the Vendors would be made using funds received under the re-sale agreement.

(b)  The proceeds from the re-sale of the Pending Interests (if any)  would be shared equally between the two camps. 

(4)  In accordance with the Refund Provision, Ds shall be responsible for ensuring due progress and completion of the cooperation between the parties, and in the event completion becomes unviable, Ds shall be responsible for all losses caused thereby and further undertake to repay to P all funds paid by it within a week of completion being known to be unviable, with late payment being subject to interest at a rate of 24% p.a.

18.  P has discharged its liability for the half-share of the Underwriting Fees by paying HK$2.5m to Ds via D1’s account on 17 March 2018.

19.  On 2 April 2018, D2 reminded P to make payment of its half-share of the Project Deposit (ie HK$10m)  via D1’s account on 4 April 2018.  D2 also told P that its half-share of the Intermediary Fees (ie HK$1.25m)  could be paid a few days later.

20.  On 5 April 2018, P paid HK$10m to Ds via D1’s account to discharge its liability for the half-share of the Project Deposit.

21.  On 26 June 2018, D2 informed P that Ds had arranged for the re-sale of the Pending Interests, pursuant to which a deposit of HK$5m had been received from downstream investors.   Pursuant to the Final Agreement, the fact of such re-sale had two implications:

(1)  P and Ds are absolved from the obligation to personally make payment for any further sums that may be due under the 2^nd and 3^rd instalments.

(2)  The sum of HK$5m should be shared equally between P and Ds.

22.  As regards the sharing of HK$5m, D2 suggested that, out of the HK$2.5m payable to P, HK$1.25m shall be applied to offset against P’s deferred liability in respect of its half-share of the Intermediary Fees. P agreed to D2’s suggestion (“the Offset Agreement”).

23.  On 28 June 2018, pursuant to the Offset Agreement, Ds arranged for a sum of HK$1.25m to be paid to P’s designated entity.

24.  P had not been informed as to the details and progress of the re-sale.

25.  On 22 November 2018, Madam Wang met a Mr Tang DeRong (“Mr Tang”)  (Madam Wang realised at a later time that Mr Tang was an associate of the downstream purchaser of the Pending Interests), and Mr Tang told Madam Wang that:

(1)  As early as 19 April 2018 (not June 2018 as represented by D2), D1 had already signed a re-sale agreement with one Mr Yang Fuzhu (“Mr Yang”)  to sell 85% of the entire issued shareholding of the Listco for a consideration of HK$280.5m (“the Re-Sale Agreement”).

(2)  Pursuant to the Re-Sale Agreement, Mr Yang paid a deposit of HK$10m (not HK$5m as represented by D2)  into D1’s account on 18 September 2018.

(3)  On 19 September 2018, D2 executed a Share Transfer Confirmation whereby D2 agreed to transfer the Listcos shares to Mr Tang as directed by Mr Yang. However, the shares were not transferred as promised. 

26.  Thereafter, Madam Wang confronted D2. Eventually, D2 admitted that he in fact received HK$10m, not HK$5m from the downstream purchaser, and accepted that he should have paid HK$5m to P.

27.  Neither the re-sale nor the intended acquisition of the Listco shares materialised in the end.

28.  The total of P’s Contribution in this joint venture with Ds is HK$13.75m, which comprises (a)  cash payment of HK$12.5m transferred by P into D1’s account and (b)  a sum of HK$1.25m applied to offset against P’s liability for its half-share of the Intermediary Fees.

DISCUSSION

D1.   Misrepresentation

29.  P’s misrepresentation claim is based upon negligent misrepresentation.  The principles concerning negligent misrepresentation are as follows[2]:

(1)  First, the representation must be made either by the other party to the contract or by his/her agent;

(2)  Second, a special relationship, thus a duty of care, arises between parties entering into a contract if information is given by the representor holding himself out as having special expertise in connection with the contract, and the duty of care would be breached if the representor makes any misstatement(s); and

(3)  Third, the statement was communicated to a person who would not have entered into the subject contract but for the representation(s).

30.  Based upon the evidence accepted by this Court, the Representations as pleaded in P’s case were made orally and in writing, and were made by both D1 and D2.

(1)  The oral part of the Representations has been clearly set out in Madam Wang’s evidence, which has been accepted by this Court.

(2)  The written part of the Representations is evidenced by D2’s message to Madam Wang on 16 March 2018.

(3)  The Representations were made by D2 on behalf of himself and D1:

(a)  It is D1’s own case that:

(i)  both D1 and D2 are “businesspersons involved in … the business of purchasing and selling companies, and were sought out by Madam Wang to discuss a possible cooperation”[3];

(ii)  D1, D2 and P participated in at least one tri-partite meeting, at which the three “agreed to jointly acquire one Stream Ideas Group Limited [ie the Listco]”[4];

(iii)  “As Madam Wang had all along liaised with [D2], most of the subsequent negotiations were done between [D2] and Madam Wang only.”[5]

(b)  As rightly submitted by Ms Au, D1 does not deny having a stake in, and being a party to, the intended plan to acquire shares of the Listco.  D1 in fact agreed to be the signatory to the Cooperation Memorandum and was the designated payee for P’s payments.

(c)  It is Ds’ decision to name only D1 as the signatory to the Cooperation Memorandum.  This appears to be the modus operandi between D1 and D2.  The Re-Sale Agreement was also signed by D1 alone.

(d)  D1 and D2 are not only business partners, but they are also romantic partners having a 5-year-old son.  In the circumstances, I agree with Ms Au that the natural inference is that D1 and D2 were at all material times acting in concert on matters relating to the Final Agreement. To the extent that D1 had entrusted any part of the negotiations and liaison to be carried out by D2, D2 must have done so with actual or ostensible authority as agent for D1 as well as himself.

31.  The Representations were false and negligently made.

(1)  The Representations were false:

(a)  Ds are not demonstrated to have personal connections or dealings with the management and/or majority shareholders of the Listco.

(b)  Ds are not demonstrated to have the ability to procure the sale of the entire issued shareholding of the Listco.  Such sale is in fact legally impossible as the Listco is subject to the public float requirement as imposed by the Hong Kong Stock Exchange.

(2)  The Representations were also negligently made in that the above matters ought to be known to D2 had he taken reasonable care and diligence in his dealings and communication with P.

(3)  In terms of pre-contractual negotiation, a representor holds himself as having special expertise owes a duty of care to see that representation was correct.[6] As shown in the evidence, D2 clearly held himself as having abundant experience in the business of acquiring and selling “shell interests”.  That being the case, D2 owed a duty of care to P in respect of the correctness of the representations made by him.

32.  I accept that Madam Wang relied upon the Representations when she decided to, on behalf of P, enter into the Final Agreement.  Prior to the Final Agreement, Madam Wang had had no prior experience in investing in “shell interests”.  But for the Representations, Madam Wang would not have had any inkling as to the viability of the intended plan to acquire the shares of the Listco, and would not have entered into the Final Agreement on behalf of P.

33.  I agree that P has made out her case under the misrepresentation claim.

D2.   Contractual Claim for Refund

34.  According to P’s case, the Cooperation Memorandum is part of the Final Agreement between P on the one hand and Ds on the other hand.  Clause 1.5 of the Cooperation Memorandum is the Refund Provision referred to in P’s case, which is as follows:

“甲方應確保在上述合作中的所有事項交割正常，如造成無法交割因此造成的損失全部由甲方負責，並且甲方承諾在無法完成交割後的一週內退回乙方已經投入的資金，如超過時間退回，按照年化百分之二十四支付乙方利息。”

35.  On its face, Party A in the Cooperation Memorandum is D1, and Party B is P.  For the reasons set out in [30] above and in the paragraph below, I accept P’s case that D1 in fact signed the Cooperation Memorandum on behalf of herself and D2, and Party A to the Cooperation Memorandum is in fact both D1 and D2.

36.  As submitted by Ms Au, the Cooperation Memorandum is not the only agreement between P and D1.  Something more have been agreed.  The Cooperation Memorandum and the further terms agreed are matters agreed by P on the one hand and by both D1 and D2 on the other hand.

(1)  The Cooperation Memorandum envisages a simple payment schedule separated into three instalments, respectively due on 27 March 2018, 27 September 2018 and 27 March 2019.  There is not a word in the Cooperation Memorandum touching upon how a re-sale agreement (if reached between Ds and the downstream purchaser(s))  might affect the liability of P and Ds to pay the outstanding instalments.

(2)  It is common ground that neither P nor Ds had paid or were required to pay any sums under the 2^nd and/or 3^rd Instalments, and there is no evidence showing that D1 had ever demanded payments under those instalments. The natural explanation is that P and Ds have additionally agreed to the term as stated in [17(3)] above, which has the effect of absolving P’s and Ds’ liabilities to make further payment in the event of a re-sale.  This additional agreement is evidenced by D2’s WeChat message to Madam Wang on or about 2 April 2018.

37.  In my judgment, the Refund Provision is one of the terms of the Final Agreement between P on the one hand and Ds on the other hand.

38.  I agree with Ms Au that the plain meaning of the Refund Provision is as follows:

(1)  Ds are responsible for ensuring the due progress and completion of all the matters contemplated under the Cooperation Memorandum, namely, acquisition of the shares of Listco.

(2)  If Ds fail to procure the completion of the acquisition, Ds shall be responsible for all losses caused, and shall undertake to return to P all such funds already contributed by P within 1 week of “completion becoming unviable”.

(3)  Any late refund (measured from 1 week of completion becoming unviable)  shall carry interest at the rate of 24% p.a. until payment.

39.  There is no dispute that the intended acquisition has not been completed.  As said in the above, D1’s pleaded case is that the acquisition contemplated in the Cooperation Memorandum fell through because P failed to pay its half-share of the intermediary fees (ie HK$1.25m)  by 5 April 2018 in accordance with Clause 1(4)  of the Cooperation Agreement.  I agree with Ms Au that there is no evidence showing that P’s late payment caused the failure of the acquisition.  In the absence of evidence proving this causal relationship, D1’s defence must fail.

(1)  As shown by the evidence accepted by this Court, Ds never insisted on punctual payment of the sum of HK$1.25m. On the contrary, D2 expressly told Madam Wang that this sum could be delayed for a few days after 5 April 2018.

(2)  There is no evidence showing that after a period of “a few days”, D1 and/or D2 has ever chased P for payment of the HK$1.25m. In fact, D2 was far from concerned about the punctuality of the payment of the sum of HK$1.25m.  As mentioned in [21] and [22] above, on 26 June 2018, D2 suggested to P that that the sum could be offset against P’s entitlement to receive HK$1.25m from the deposit received from the downstream investors.

(3)  There is no evidence showing that P making the payment of HK$1.25m by 5 April 2019 is crucial to the success of the intended acquisition.  There is also no evidence showing that as a result of P not paying the HK$1.25m by 5 April 2019, the intended acquisition failed.

40.  In my judgment, P is entitled to invoke the Refund Provision:

(1)  Ds, who failed to ensure due completion of the acquisition, are liable to refund P’s Contribution to P within 7 days of “completion becoming unviable”.

(2)  As set out in [25] above, on 22 November 2018, Madam Wang was told by Mr Tang that D1 had been unable to perform the Re-Sale Agreement with Mr Yang.  That would mean that Ds had become unable to procure the acquisition of the entire issued shareholding of the Listco at a time before 22 November 2018.

(3)  Ms Au suggested to use 22 November 2018 as the date when the completion of the acquisition became unviable.  In my view, this is a fair suggestion.  Accordingly, in accordance with the Refund Provision, interest on P’s Contribution should start to run on 29 November 2018 at the contractual rate, ie 24% p.a.

D3.   Quistclose Trust

41.  The nature of a Quistclose trust has been succinctly explained by the Court of Final Appeal in China Life Trustees Limited v China Energy Reserve and Chemicals Group Overseas[7], in which:

(1)  Ribeiro PJ said:

“20. … [a quistclose] trust comes into existence where X pays money (or transfers other property)  to Y by way of a loan or otherwise, with the parties objectively intending the money to be applied for a specific purpose (and no other). That clothes the transferred funds with a trust subject to their being applied by the recipient for the designated purposes. If for any reason that purpose fails to be achieved, the funds are simply held on such trust for the payer. Such restriction on the use of the funds is the key consideration: the payer must have intended, with the recipient’s agreement or acquiescence, that the money should be used only for that specific purpose and should not be at the recipient’s free disposal.”

(2)  Gummow NPJ said:

“100. What is a ‘Quistclose’ trust’? In general terms, the expression describes the situation where X pays money (or transfers other personal property)  to Y and as a matter of intention, objectively discerned, the money is to be applied solely for a specific purpose; if that purpose fails Y is subject to an undertaking, express or as a matter of inference, to return the money to X. The essential issue is whether, on the evidence, X and Y intended that the money should be applied by Y only for a specified purpose and, if that fails, returned by Y to X.”

42.  Ms Au has helpfully set out the issues under the claim based upon a quistclose trust:

(1)  Whether D1 and P intended that P’s Contribution should be used only for the Designated Purpose and should not be at D1’s free disposal;

(2)  Whether the Designated Purpose has been fulfilled;

(3)  If the Designated Purpose has not been fulfilled, what relief should be given to P.

43.  I agree that as shown in the evidence, P’s Contribution was intended to be used specifically for the Designated Purpose, and for no other purpose:

(1)  Clause 1(1)  of the Cooperation Memorandum (which is part of the Final Agreement)  states that the parties’ capital contribution are for the purpose of acquiring the “shell interest” of Listco (收購總價：甲乙雙方共同來收購源想集團上市公司期殼資源…… 合計出資港币幣2.65 億元).

(2)  Clause 1(3)  of the Cooperation Memorandum states that payments are to be collected by D1 before transferring to the original shareholders of the Listco (ie the Vendors)  (乙方將上述款項支付給甲方，并由甲方统一付款给上市公司原股東方).

(3)  The Refund Provision provides that in the event that completion becomes unviable, the funds contributed by P shall be returned to P within a week.

As submitted by Ms Au, reading the aforesaid clauses collectively, it is plain that the parties’ mutual intention was that the sums paid by P were to be exclusively used for the Designated Purpose, and not at D1’s free disposal.

44.  In order to fulfil the Designated Purpose, D1 should and could only use P’s Contribution to acquire the shares of the Listco.

(1)  To achieve this goal, the money should be paid to the shareholders of the Listco in exchange for the shares in their hands. However, in D1’s pleaded case, D1 alleged that she had given the money paid by P (ie HK$12.5m)  to the Listco.[8] As rightly pointed out by Ms Au, such payment is indeed contrary to the Designated Purpose.

(2)  Regarding the HK1.25m, which is part of P’s entitlement to the deposit of HK$5m in the re-sale of the Pending Interests, that amount should also be used for the Designated Purpose pursuant to the Offset Agreement.  Based upon what Mr Tang told Madam Wang, the deposit from the downstream investor in fact was paid to D1’s account.  Thus, the HK$1.25m (which is P’s entitlement and part of the deposit paid by the downstream investor)  should be a sum in D1’s account. 

45.  By D1’s own admission in her pleaded case, the Designated Purpose failed.

46.  By reason of the aforesaid, D1 is holding P’s Contribution of HK$13.75m on a quistclose trust for P, and P is entitled to recover the sum.[9]

D4.   D1’s counterclaim

47.  As stated in the above, P’s liability to pay the HK$1.25m has been dealt with by the Offset Agreement.  Accordingly, D1’s counterclaim against P must be dismissed.

D5.   Remedies

48.  Under the misrepresentation claim, P may have an order to rescind the Final Agreement.  Under the contractual claim, P is seeking an order to enforce the Refund Provision in the Final Agreement.  Ms Au has fairly accepted that the remedies under the misrepresentation claim and the remedies under the contractual claim are alternative remedies, and P cannot have both sets of remedies.  After taking instructions, Ms Au confirmed that P elects to have the remedies under the contractual claim.

49.  Under P’s contractual claim, Ms Au only sought to enforce the contractual interest rate for the pre-judgment period. Accordingly, I would order that D1 and D2 do pay to P the sum of HK$13.75m plus interest thereon from 29 November 2018 at the contractual rate of 24% p.a. until the date of this judgment, and thereafter at the judgment rate until payment.

50.  I agree that the remedies under the contractual claim and the remedies under the trust claim are not mutually exclusive. Therefore, under the trust claim, I would make the following order against D1:

(1)  a declaration that D1 holds the sum of HK$13.75m (“the Sum”)  or its traceable proceeds on trust for P;

(2)  a declaration that P is entitled to repayment of the Sum and that P is entitled to trace the Sum and to all necessary accounts and inquiries;

(3)  a declaration that D1 is obliged to account to P for all the assets, income, profits, interest and other benefits whatsoever derived from the use of the amount equivalent to the Sum;

(4)  the account referred to in the above shall be confirmed by an affirmation to be made by D1 together with the supporting documents to be filed and served by D1 within 28 days upon service of the order made herein on D1;

(5)  there be liberty to apply.

51.  I would also make an order dismissing D1’s counterclaim.

DISPOSITION

52.  I make the order as set out in the above.

53.  Costs should follow the event.  There be a costs order nisi that costs of these proceedings (including all costs reserved)  be paid by Ds to P, to be taxed if not agreed.  Unless there is an application by summons for an order varying this costs order nisi within 14 days after the date of service of this order on Ds, the costs order nisi shall become absolute without a further order.

54.  Lastly, it remains for me to thank Ms Au for the able and helpful assistance provided to the Court.