LEUNG WING YIU v. SIU KING YUEN AND OTHERS

HCA5382/1996

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.5382 OF 1996

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J U D G M E N T

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The two firms

1. This case began with two partnership business, namely Jeb Shun Photographic Company ("Photographic Company") and Jeb Shun Output Service Company ("Output Service") ("the firms").

2. The plaintiff, the 1st defendant Mr Siu King Yuen ("Mr Siu") and the 3rd defendant Mr Yeung Koon Wing ("Mr Yeung") were the partners of these two firms. Photographic Company was established first, its business was the production of films for printing purpose. Initially the production was done manually, then after Output Service was set up, the partnership used computers to carry out the production.

3. Mr Yeung joined the partnership in September 1995. The firms was then in financial difficulties and the plaintiff had borrowed money from Mr Yeung to be used for the firms. Later on, Mr Yeung was invited to join as a partner and his loans were treated as his capital contribution to the partnership. Although Mr Yeung joined in September 1995, the plaintiff and Mr Siu agreed that he should be treated as having joined the firms on 1 May 1995. The plaintiff was responsible for obtaining orders while Mr Siu was responsible for production. Mr Yeung had no active role to play in the firms. He acted as a consultant.

4. According to the plaintiff, the reason for the financial difficulties of the firms was because of cash flow problems. Although Photographic Company was operating at a profit, there was insufficient work for Output Service. The plaintiff said that Mr Siu was in charge of Output Service. There were also delays by customers of Output Service in paying the invoices. As a result, there were cash flow problems.

Mr Kung's involvement

5. The financial condition of the firms did not improve after Mr Yeung had joined them. Then in August or September 1995, Mr Siu informed the plaintiff that someone, namely Mr Kung Wing Hong ("Mr Kung") was interested to become a partner. He briefly stated that it was better to set up a limited company and Mr Kung wished to inject $860,000 into the firms and that they should prepare an account for Mr Kung. There was no discussion on the details of the investment by Mr Kung.

6. Eventually, in October 1995, Mr Siu arranged the plaintiff and Mr Yeung to meet Mr Kung in a Korean restaurant. At this meeting, Mr Kung did not talk much. Mr Siu introduced Mr Kung by saying that he, i.e. Mr Kung did not know anything about the business. Then Mr Siu talked about the work and their respective positions in the firms afterwards, namely, he would continue to be the production manager, the plaintiff would be the sales manager and Mr Yeung would be the consultant. There was no discussion on the nature of job for Mr Kung or Mr Kung's investment. Mr Siu had said that after Mr Kung's injection of the fund, the business would be in the form of a limited company. He also said that Mr Kung wanted 51% of the shares and the remaining 49% would be divided between the plaintiff, Mr Siu and Mr Yeung. The plaintiff's thinking was that since capital was required for the firms, therefore, he considered that they should carry on with the business first and discuss the details later. The plaintiff said that he had agreed to Mr Kung injecting fund and he also agreed that the firms would be changed to a limited company. He hoped that after Mr Kung had injected the capital, the liability of the firms would be transferred to the limited company. However, this was not discussed by them.

7. On 31 October 1995, Mr Kung began to work at the firms. Although he had not paid up the capital at that stage, nevertheless, the plaintiff accepted Mr Kung's presence in the firms.

The subsequent events

8. In November 1995, the plaintiff saw a Memorandum and

Articles of Association of the 2nd defendant, namely Jeb Shun Computer Output Limited ("the new company"). He realized then that the new company had been established on 31 October 1995. He discovered that he was allotted 16,333 shares in the new company and that the directors of the new company were Mr Siu and Mr Kung only. He was not consulted as to who should be the directors.

9. On 14 November 1995, the plaintiff attended the Bank of Communication together with Mr Siu and Mr Kung to open new accounts for the new company. The three of them were the authorized signatories, however, Mr Kung's signature was mandatory for the signatures to be effective.

10. At the bank, Mr Siu gave the plaintiff a draft shareholder agreement ("the shareholder agreement"), the content of which is as follows :

"A. 甲方有意與乙方合作共同投資經營電腦分色及影版業務。

B. 乙方目前以捷迅影版公司(Jeb Shun Photographic Co. 商業登記 )及捷迅電腦分色公司(Jeb Shun Output Co.商業登記 ) 名義（以下簡稱 '合夥生意'）合夥於香港軒尼詩道344-348號昌業大廈閣樓前座(以下簡稱 '營業地址') 經營電腦分色及菲林製版業務。並以蕭景元為代表人。

C. 甲、乙雙方已在1995年10月31日根據香港公司法例成立捷迅分色有限公司(Jeb Shun Computer Output Ltd) (以後簡稱'公司'), 註冊資本為港幣拾萬元($100,000.00)分為拾萬股，每股壹元。雙方有意利用此有限公司合作經營業務。

現甲、乙兩方協議如下：

1. 甲方以現金港幣捌拾陸萬元(HK$860,000)注入'公司'，佔股本51%，即是以面值壹元認購'公司'股份51,000股。其餘$809,000作為免息股東貸款。

2. 乙方以'合夥生意'在'營業地址'內所有機器、傢俬、生財、存貨以及按金於扣除未供分期後作價港幣捌拾陸萬元(HK$860,000)注入'公司'，佔股本49%。即是以面值壹元認購'公司'股份49,000股，其餘$811,000作為免息股東貸款。所有未供分期由'公司'承擔。

3. 乙方各人在'公司'中應承擔的分工與原'合夥生意'相同，但董事會日後可根據實際情況修正。

4. '公司'將以與'合夥生意'相同的僱用條件續聘全體員工。各員工入職年資，'公司'繼續承認。

5. 股東貸款，即甲方$809,000，乙方$811,000未經全體股東一致同意，不得取回。

6. 除得全體股東同意，股東存/取貸款，以各股東股權攤分。

7. '公司'董事會名額兩名，由甲方：龔永康及乙方：蕭景元擔任，並由甲方出任董事會主席。

8. 乙方所佔'公司'股份49,000股，分配如下：

a. 蕭景元 16,334股

b. 楊觀榮 16,333股

c. 梁榮耀 16,333股

9. 本協議由1995年11月1日起生效。"

According to another document, 甲方 was Mr Kung while 乙方 were Mr Yeung, Mr Siu and the plaintiff.

11. The plaintiff said that the contents of the shareholder agreement had not been discussed before and he asked Mr Siu to redraft it or he would redraft it himself. He said that he wanted to be a director of the new company, the time for the payment of Mr Kung's investment should be specified and the matter should be handled by a solicitor.

12. Also in November, he discovered a notice with the heading "Company Name Change Notice". The English version of this document stated that from 1 December 1995 (this is a wrong date and no issue arises out of this), the names of Photographic Company and Output Service would be changed to that of the new company. The Chinese version of the notice stated that the change of name would be from 1 November 1995.

13. In November and December, there were two meetings between the plaintiff, Mr Yeung, Mr Siu and Mr Kung (in the 2nd meeting, one Mr Poon was also present) to discuss matters concerning the firms and the new company. The plaintiff had also instructed lawyers to assist him in the dispute. He was informed by his lawyers that a notice of transfer of business was published in a local newspaper and the Gazette on 29 December 1995. The notice stated that Mr Siu, Mr Yeung and the plaintiff as transferors had transferred Photographic Company and Output Service to the new company as of 1 November 1995. The plaintiff had not given his consent to the giving of the notice of transfer.

14. The plaintiff who used to receive a salary of $12,000 from the firms was not paid his salaries from November 1995 onwards. He left the firms on 16 January 1996.

15. On 19 January 1996, one of the plaintiff's former customers sent the plaintiff a letter, issued by the new company, stating that the firms (the letter actually referred to one of the firms as a company called Jeb Shun Computer Service Company, which probably was a mistake) had transferred their business to the new company from 1 November 1995 and any invoice issued on or after that day, even in the names of the firms, are "properties" of the new company.

The plaintiff's complaint

16. The plaintiff complained, among other things, that Mr Siu and Mr Yeung had in breach of their duties as partners of the firms allowed the new company to take over the business of the firms. The new company had passed off as the firms.

The agreed issues

17. The parties agree that there are two issues for the court to determine :

(a) Whether there was a final and binding agreement among the parties to the effect that the assets and business of Photographic Company and Output Service would be transferred to the new company with effect from 1 November 1995; and

(b) If the court finds issue (a) in the defendants' favour, whether the agreement was repudiated by the defendants thereby entitling the plaintiff to terminate the agreement by a letter from his solicitors dated 18 January 1996, and whether the agreement was in fact validly terminated.

The defendants' case

18. According to Mr Kung's evidence, Mr Siu approached Mr Kung and asked him whether he was interested in investing in the firms. After discussions with Mr Siu, it was agreed that he would invest $860,000. He informed Mr Siu that he would acquire the assets and the staff of the firms but not their liabilities. The new company would be set up and the firms would have to be closed. The partners of the firms would be treated as investing the same amount in the new company. Mr Kung did not know the plaintiff or Mr Yeung. Mr Siu informed him that he had discussed the matter with his partners. After Mr Kung had agreed on the amount of the investment, he did not discuss with Mr Siu the percentage of his shareholding. This was a matter that needed to be discussed but since the two parties would each invest $860,000, then the amount of shareholding would be 50/50 each.

19. Mr Siu said that in August or September 1995, he had a discussion with the plaintiff and Mr Yeung in a Korean restaurant in Wanchai. He informed them that Mr Kung would join their business and would inject $860,000. A new company was to be set up and Mr Kung would have 51% shares in this new company while the three of them would have 49% of the shares. The new company would not be responsible for the debts of the firms. The plaintiff and Mr Yeung said that there would be no problem. Mr Siu then discussed the matter with Mr Kung.

20. Mr Siu then arranged Mr Kung to meet the plaintiff and Mr Yeung for dinner in a Korean restaurant. At this dinner, Mr Siu repeated what he had said earlier in September, namely that the new company would not be responsible for the debts of the firms. The new company would continue payment of the hire purchase instalments of the machine bought by the firms. Mr Kung would put up $860,000 which was treated as buying up the old machines of the firms. Mr Kung would have 51% shareholding while the three of them would have 49%. Mr Siu then asked if the plaintiff and Mr Yeung had any comments, and they replied "No".

21. After this meeting, Mr Siu arranged for the new company to be set up, which eventually was incorporated on 31 October 1995. Mr Kung also went to the office of the firms to learn how the business was conducted.

22. The new company entered into contracts of employment with the staff of the firms. Five of the staff, however, commenced proceedings in the Labour Tribunal against the firms, seeking severance payment and a proportion of their double-pay. The matter was not contested and the staff received their claim.

23. Mr Kung did not invest the $860,000 all at once. He had made payments for the purchase of equipment and furniture for the new company. He also had made payment for the decoration work which had been carried out in the premises of the firms. He had paid for the salaries and he had made three deposits to the account of the new company in the sums of $100,000, $123,649 and $100,000 respectively. After the new company was set up, Mr Siu instructed Mr Poon to draft the shareholder agreement.

Conflict of evidence

24. There is a conflict of evidence between the plaintiff and the defendants on a number of matters, such as first, whether prior to the meeting with Mr Kung in the Korean restaurant, there was another meeting in the Korean restaurant where the three partners discussed about Mr Kung joining the firms. Second, whether the plaintiff was told that Mr Kung would not take over the liabilities of the firms.

Prior meeting

25. As the events had taken place so many years ago, it is unlikely that the parties would have a clear recollection as whether they had a prior discussion in a Korean restaurant. In so far as Mr Yeung's evidence is concerned, he obviously is not a reliable witness and he did not have any recollection of the events that took place in 1995. What is apparent is that he had agreed to become a partner of the firms because of his previous loans to the firms and also the firms had owed him money in trading transactions. So long as he was not required to make further investments, he would be happy to leave the matter either to the plaintiff or Mr Siu. I accept the plaintiff's evidence that there was no prior meeting in the Korean restaurant discussing Mr Kung's investment. I accept the plaintiff's evidence that Mr Siu had in August or September 1995 informed him of Mr Kung's intention to invest $860,000 in the firms. However, I do not find that Mr Siu had informed him that Mr Kung would not be responsible for the liabilities of the firms.

No discussion on the liabilities of the firms

26. Regarding the discussions between Mr Siu and Mr Kung personally, Mr Kung accepted that what he had agreed with Mr Siu was subject to the approval by the other partners to the firms. Mr Kung stated that he had insisted on the setting up of a limited company because he had previous experience with a partnership business and he found the accounts of a partnership were not as well prepared as that of a limited company. I find that his insistence on a limited company was what he had told Mr Siu at that time, but there was no discussion on the new company not being responsible for the liabilities of the firms.

27. Mr Siu, when he related to the plaintiff of his discussion with Mr Kung, also did not mention to him about Mr Kung not being responsible for the liabilities of the firms. The picture that emerges from the evidence is that the firms were in financial difficulties. They could not even pay the salaries of the staff or rent on time. It was at the forefront of everyone's mind that a new investor would be injecting $860,000 to the firms to help them tide over the difficulties. While no doubt there were also plans to expand the firms by acquiring new equipments, clearly, the partners' concern then was that the money was needed to save the firms from going down. Earlier when Mr Yeung was invited to join as a partner, there was no discussion that he would not be responsible for the liabilities of the firms. If Mr Siu had informed the plaintiff that Mr Kung would not be responsible for the liabilities, I would expect him to react differently.

28. As to the meeting of the four of them in the Korean restaurant, I further find that there was no discussion that Mr Kung would not be responsible for the liabilities of the firms. I find that it was Mr Siu who did the talking at this meeting and Mr Kung did not say much. I find that he had not raised the issue of Mr Kung not wanting the liabilities of the firms. Further, if the parties had actually discussed this issue, then I would expect the shareholder agreement which Mr Siu instructed Mr Poon to prepare would reflect this agreement as well. While it provided for the investment of $860,000 by Mr Kung and that the respective shareholdings would be 51% for Mr Kung and 49% for the partners, it was silent on Mr Kung not being responsible for the liabilities of the firms. I find this to be a glaring omission which showed that the parties had not discussed this point before.

No concluded agreement

29. The defendants' case is that based on the two discussions in the Korean restaurant, there was a concluded agreement in which the new company would take over the assets and business of the firms as from 1 November 1995. I do not find this to be the case. Even if, for the purpose of argument, Mr Siu had informed the plaintiff that Mr Kung would not be responsible for the liabilities of the firms, I still do not find that a concluded agreement had been reached between the parties. I find that there was a general agreement between the four of them that Mr Kung would invest $860,000 into the firms and a new company would be set up which would take over the two firms. However, the details concerning the operation of this new company and how it would take over the firms remained to be discussed. The idea then was that this matter would be discussed as they carried on with the business with the new funds from Mr Kung. There were obviously important and major issues to be agreed between the parties concerning their co-operation.

The major issues

30. Among the major issues that had not been agreed include the following :

1) The composition of the board of directors of the new company. The plaintiff was one of the three partners of the firms, he obviously had taken an active role in the operation of the firms. In fact, he was the one who set up the firms and later on had invited Mr Siu and Mr Yeung to join. If by 1 November 1995, the new company had in fact taken over the assets and business of the firms, then obviously he should be a director of the new company. However, only Mr Kung and Mr Siu were directors. Mr Siu stated that he had informed Mr Yeung that the two of them would be directors but he had forgotten to tell the plaintiff that this was the case. In my view, this is a feeble excuse. Mr Siu had not forgotten to tell the plaintiff but, rather, he had deliberately chosen not to reveal this to the plaintiff for fear that he might object to this arrangement.

31. As it turned out when the plaintiff found out that he was not a member of the board, he took strong objections to this. Mr Kung said that he was quite prepared to let the plaintiff becoming a director in the new company. In my view, the matter is not simply a decision by Mr Kung and Mr Siu to allow the plaintiff to become a director. Rather, this is a matter that must be agreed between all of them beforehand in order for a full and complete agreement to be reached. The attitude of the plaintiff, as reflected in the discussion between the parties in the two meetings in November and December 1995 respectively and also in his letter dated 4 December 1995, are consistent on this issue, that is, his exclusion from the board of directors was not the result of discussion between the parties. The plaintiff's statement in the letter that the purpose of setting up the new company was to take over the business of the firms is not an indication that as from 1 November 1995, after the new company was set up, it had taken over all the business of the firms. The intention of the letter is clearly to complain that he had always been a member of the management of the firms and he was now excluded from it.

32. Also the reference by the plaintiff in his letter to a general consensus or agreement must be viewed in the context in which these words were used. They were not an indication that a final and concluded agreement had been reached between the parties. The plaintiff's entitlement to be a director was the issue that he had focused in this letter. It does not mean that all the other terms had firmly been resolved prior to 1 November 1995.

2) If 1 November 1995 was intended to be a cut-off date, then obviously the parties would need a firm agreement as to when and how Mr Kung's $860,000 would be injected into the firms. There was no discussion on this topic and Mr Kung's contribution of $860,000 by various payments and in various forms supported the plaintiff's case that the only agreement that had been reached was that the matter would be discussed as they carried on with the business. The shareholder agreement divided the $860,000 into two parts : $51,000 being the price of the shares and $809,000 being directors' loans. Obviously, this needed to be discussed between the parties beforehand. This was not done.

3) There was no discussion on the receivables by the firms. While Mr Siu accepted that there was no discussion, Mr Kung stated that there was such a discussion. I do not find this to be the case. As in many of the major issues, the parties simply had not applied their mind to this matter.

4) Matter regarding the transfer of the staff to the new company. It is again a matter that was not discussed, otherwise, the episode of the employees suing for severance payments and pro rata double-pay would have been avoided.

5) Matters relating to the payment of the salaries of the partners and dividends were not discussed. It turned out that the plaintiff was not paid his salaries from November 1995 to the time when he left.

Parties in continuing negotiation

33. As pointed out by Donaldson MR in Pagnan S.P.A. v. Granaria B.V. and others [1986] 2 Lloyd's Rep. 547, in cases where there is a dispute on whether an agreement has been reached or not, there are usually three possible analyses to the situation :

".... First, the parties have indeed concluded an agreement, but thereafter one or both have sought to resile from that agreement or to amend what has been agreed. Alternatively, the true view may be that the parties were in agreement on all the terms but had not yet agreed to contract on those terms. That is more familiar in land law where there is a 'subject to contract' situation, but it can arise in commercial contracts. The third possibility is that the parties were not really agreed on all the terms, even if they appeared to be or thought that they were, due to some misunderstanding or muddle, the true analysis being that there had been a pause in the negotiations but the negotiations viewed as a whole were a continuing process and the point at which it could be said that a contract had been concluded had never been reached."

34. In my view, this is clearly a case where the parties were still in a state of negotiation on and after 1 November 1995 that there was not a point at which a concluded agreement had been reached between the parties.

35. This is not the situation as discussed in Chitty on Contracts, 28th Edn, Vol.1, at paragraph 2-118 where the court would give effect to an agreement which provides for further terms to be agreed. The matters I have referred to are not minor matters to be resolved after the parties have reached a concluded agreement. At that stage, there was some urgency in the matter because according to the defendants, they wished to take advantage of the price discounts offered by the seller of computer equipments in an exhibition. As Mr Kung's investment was required to acquire these equipments, the matter was proceeded with haste. However, that does not mean that a concluded agreement had been arrived at.

Conduct of the plaintiff

36. The defendants argued that the conduct of the plaintiff clearly showed that an agreement had been reached between the parties on the new company taking over the assets and business of the firms on 1 November 1995. It is suggested that the plaintiff had attended the exhibition of the equipments together with the defendants. The plaintiff denied that he had attended this exhibition. I accept his evidence on this.

37. It is suggested that on 9 November 1995, he had signed the agreement with the seller of the equipments. The contract was entered into between the new company and the seller. The plaintiff's evidence was that he was called back to the office to sign the agreement and he left afterwards. The evidence of the defendants was that the plaintiff was present when the sales representatives of the seller took the contract to their office, the plaintiff then took the agreement, read it and signed it himself. I find that the plaintiff obviously knew that the contract was entered into by the new company. It makes no sense that this new equipment was acquired by the firms. However, in my view, this does not mean that a concluded agreement as suggested by the defendant had been reached earlier. The new company obviously needed to carry out its business. Details on how the firms would be taken over by the new company was a matter that needed to be resolved.

38. The plaintiff was also one of the authorized signatories of the bank account of the new company. Again, this is not an indication that a concluded agreement had been reached for reasons I had stated.

39. The plaintiff had also paid a proportion of the claims lodged by the employees of the firms in the Labour Tribunal. I do not think the plaintiff had a real choice in this matter in the light of the order made by the Labour Tribunal.

40. It is said that the plaintiff had issued invoices with the letterhead of the new company to customers. The evidence on the invoices were a little bit confusing. The plaintiff said that he had put a handwritten prefix "A" to the number of the invoice to distinguish products produced with the equipment purchased by Mr Kung. It is not necessary for me to go into the evidence. The mere fact that the plaintiff had issued invoices with the letterhead of the new company is not conclusive evidence on the alleged concluded agreement. The plaintiff had likewise, during the same period of time, continued to use the cheques of the firms to pay for expenses, these expenses are not referable only to the firms. The administrative acts of issuing invoices cannot be seized upon as evidence in support of the defendants' case.

41. The defendants also relied on the fact that on 18 December 1995, the plaintiff offered to sell his shares in the new company to Mr Yeung. The plaintiff had said that he had not accepted the shareholdings of the new company. It is submitted that the offer by the plaintiff to sell his shareholdings is inconsistent with his claim that no agreement had been reached. In my view, the real issue in this case is not whether the plaintiff had, by accepting the shares, also accepted a binding agreement. Even if the plaintiff had accepted the shares, there were still major outstanding issues to be resolved. In any event, at that stage, the plaintiff was obviously frustrated by the actions of the defendants. His confidence with Mr Siu and Mr Kung had clearly been lost and the plaintiff wished to sell the shares in order to get out from the situation.

Credibility

42. The plaintiff was further attacked on his credibility by reference to his complaints to police against the defendants. In one of the statements to the police, he alleged that Mr Siu, Mr Yeung and Mr Kung might have forged his signature. The evidence revealed that his signature was not even on the relevant document. The plaintiff accepted that he was wrong in writing in such a way. Looking at the case as a whole, I find the plaintiff to be a truthful and honest witness and this particular episode does not affect my assessment of his credibility. The recording of the two meetings in November and December were taken by the plaintiff without the knowledge of the others. In these recordings, the plaintiff sounded aggressive and agitated. In my view, one would expect him to react in such a manner when he found out that he was actually excluded as a director in the new company. This is not a reflection that he deliberately wished to resile from any agreement that had been reached between the parties.

Conclusion

43. To conclude, I find for the plaintiff on the first issue that the parties invited me to decide. This being the case, it is not necessary for me to deal with the second issue.

44. The parties had also invited me to make a declaration dissolving the firms. As pointed out by Lindley and Banks on Partnership, 17th Edn, paragraph 24-01, in the case of a partnership, dissolution invariably refers to the moment of time when the ongoing nature of the partnership relation terminates, even though the partners may continue to be associated together in a new partnership or merely for the purposes of winding-up the firms' affairs. In this case, the firms were not terminated on 1 November 1995 when the new company carried its business at the same address of the old firms. However, the firms clearly were dissolved on 16 January 1996 when the plaintiff left and did not return to work from that time onwards. This is not a matter that was in dispute between the parties.

The orders

45. The parties had agreed on the relief that they would invite the court to make in the light of the determination by the court. Accordingly, I shall make the following orders :

(1) An account be taken by the Master of all profits made by the new company during the period from 1 November 1995 to the date of this order;

(2) An account be taken by the Master of all profits made by Mr Siu and Mr Yeung from all business activities of the new company during the period from 1 November 1995 to the date of this order;

(3) Payment to the plaintiff of all sums found due after the taking of the accounts. The plaintiff is to receive the sums on behalf of the firms;

(4) Payment to the plaintiff of interest on the sums found at half of the judgment rate from 1 November 1995 to the date of this order;

(5) Delivery up of the furniture, machinery and equipment listed under paragraph 11(c)(i) of the Answer to the Interrogatories for Mr Siu affirmed on 17 July 2000 within 14 days of the date of this order failing which damages for conversion of the furniture, machinery and equipment are to be assessed;

(6) The question of interest on the damages for conversion be reserved to the Master assessing the amount of damages;

(7) A declaration that the firms were dissolved on 16 January 1996;

(8) An account be taken by the Master of the firms' assets, receivables, debts and liabilities as at 16 January 1996;

(9) An inquiry be taken by the Master on whether any of the firms' debts and liabilities have been paid and by whom;

(10) Liberty to apply; and

(11) Costs of the action be to the plaintiff.

46. The parties further ask the court to make the following orders, which I shall now do :

(1) An account be taken by the Master of all debts collected by Mr Siu and/or Mr Yeung and/or the plaintiff from the firms' customers and debtors from 1 November 1995 to the date of this order;

(2) Payment to the plaintiff of all sums found due after the taking of the account in (1) above. The plaintiff is to receive the sums found on behalf of the firms;

(3) An account be taken by the Master of all monies collected by the plaintiff and/or Mr Siu and/or Mr Yeung from the new company's customers and debtors from 1 November 1995 to the date of this order;

(4) Payment to the new company of all sums found due after the taking of account in (3) above; and

(5) The new company's counterclaim be dismissed and that the costs of the counterclaim be to the plaintiff.

47. The plaintiff further undertakes that in the event that judgment is entered in his favour, he will within 30 days of the judgment execute the necessary documents prepared by the defendants to effect the transfer of the 16,333 shares of the new company registered in his name to a person or persons to be nominated by the defendants at a nominal sum of HK$1. The transfer is to be at the defendants' expense.