TOPSCA LIGHTING LTD v. LO KAI BUN

HCA1491/2002 & HCA1492/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.1491 OF 2002

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J U D G M E N T

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1. The defendant, an authorised signatory of the bank accounts of the two plaintiffs, withdrew money from those accounts in February 2002. The plaintiffs' case is that, although he used to be a director and shareholder of the limited company Topsca Lighting Ltd and a partner in Gaylite Enterprises Company (a firm), he had ceased to be such in late 1999 and was in February 2002 a salaried employee of both of them. They say that he is a constructive trustee of the funds withdrawn, and has misappropriated them. They claim inter alia for repayment.

2. The defendant's case is that he was still a director and shareholder of the limited company and a partner in the firm. His signatures on the various documents which the plaintiffs rely in support of their contention that he was no longer such were obtained from him by trickery. He withdrew the funds in order to make payments to some of the two plaintiffs' suppliers.

3. The plaintiffs applied for summary judgment. The summonses were heard together by Master Raymond Ho, who gave the defendant unconditional leave to defend. The plaintiffs appeal against that decision.

4. The two companies, if I may collectively call them that, were set up by the defendant and his wife, Madam Pong Man Yi. The marriage has broken down. Madam Pong commenced divorce proceedings against the defendant in case No. FCMC 3861 of 2002 on 15 April 2002, a few days before the Writs were issued in these two cases. The defendant argues that the applications for summary judgment are an attempt to resolve matrimonial financial disputes by a short cut. The plaintiffs argue that those disputes are in fact irrelevant to the issues in these proceedings and have been brought in to persuade the court that there is some kind of triable issue.

5. The family history and that of the family companies is not in dispute, up to 1999. The defendant and Madam Pong were married in 1975. They have one son, Lo Tin Wai, who was born in 1976. The defendant set up Gaylite Trading Company in partnership with another to sell plastic products. Madam Pong kept the books for it. In 1981, the other partner left, and Gaylite Enterprises Company (hereinafter "Gaylite") was set up as a partnership between the two spouses. The defendant did the marketing, business negotiation and so on and his wife kept the books and ran the office.

6. The partnership did well. In 1989, the couple acquired a company named Topsca Limited and they used it to hold property. It is currently the registered owner of six properties, of which five were purchased between 1991 and 1995 and one in September 2000. The total purchase price of these properties was $26,836,200.00 excluding legal costs and stamp duty.

7. The couple also acquired Topsca Lighting Ltd (hereinafter "Topsca") in September 1995 and Topsca Industries Limited, which later changed its name to Feeble Industries Ltd ("Feeble") in January 1996. The latter company was used to operate a factory on the Mainland and the former to open bills of exchange for overseas business.

8. Prior to September 1999, the defendant and Madam Pong were the two directors of Topsca, and each held 1,000,000 of the 2,000,000 issued shares of $1.00 each. Each of them had a 50% interest in Gaylite. They were directors and equal shareholders in Topsca Ltd and Feeble.

9. It is not in dispute that the defendant drew two cash cheques on Topsca's account and thereby withdrew $1,000,000.00 on 15 February and $400,000.00 on 18 February 2000. He similarly withdrew $1,000,000.00 from Gaylite's account on 15 February. The cheques were all counter cheques and they were signed by the defendant and chopped with chops which resembled those of Topsca and Gaylite but were not identical with the chops registered with the bank. After the defendant had done this he wrote a note to Ms Jenny Lo who was in charge of the companies' accounts department, instructing her to record the three withdrawals of money from the two accounts as directors' drawings, with the words "Same situation as another director's Mrs Lo Pong Man Yi frequent drawing account". However Madam Pong countermanded the instruction and the withdrawals were not put into the accounts.

10. In her first affirmation Madam Pong says that the defendant resigned as a director of Topsca and sold his shares in it to her. He withdrew from the partnership in Gaylite. In support she exhibits a copy of a Companies Registry form D4 for Notification of Resignation of Director purporting to show that the defendant resigned his directorship in Topsca with effect from 15 September 2000, an Instrument of Transfer dated 26 September 2000 and with Bought and Sold Notes purporting to show that his shares were transferred to her at a price of $1,040,000.00. All were signed by the defendant. In respect of Gaylite she exhibits a Change of Partners form also signed by the defendant which purports to show that he retired from the partnership on 15 September 2002.

11. She says that thereafter the defendant was employed by both Topsca and Gaylite as a salaried employee with the title of marketing director. All along she was responsible for the daily operation and management of both companies and the defendant concentrated on marketing. Both of them were signatories of the companies' current accounts with the Bank of East Asia. However since the defendant resigned his directorship in Topsca and withdrew from the partnership in Gaylite, he had no authority to withdraw, and in fact did not withdraw money from the accounts for purposes unconnected with the businesses. In January 2002, she knew that the defendant was in debt and feared that he might withdraw money from them. The companies' cheque books and chops were held by an employee, Ms Jenny Lo. Madam Pong was afraid that the defendant would use them, so took them into her custody. When she found out about the withdrawals she countermanded the defendant's instruction to record them as director's drawings and cancelled his signing rights. She herself did not make such drawings.

12. The defendant in his first affirmation said that over time Madam Pong had gradually taken over supervision of all the paperwork of the family companies, while he had devoted his time to design, business negotiations and building up a good working relationship with banks. He had signed most if not all of the business documents of the companies. She used to put a lot of documents in front of him for signature every day. She never explained them or gave him a chance to read them. If he asked what they were, she would tell them they were routine documents for record purposes and of no particular importance. When he wanted to read them, she would stop him and ask if he did not believe her. Under those circumstances, he signed all the documents she put before him. He placed full confidence and trust in her. She was a woman used to manipulate and control everything.

13. The marriage was not a happy one. Madam Pong used to accuse the defendant of having affairs. She left the matrimonial home in April 2001; later he found out that she was residing in a flat in Laguna Verde Estate which had been purchased in the name of Topsca Ltd without his knowledge. After that there were more and more quarrels. In mid-2001, Madam Pong had told the office staff to stop paying his credit card accounts, which he used for business entertainment and which were met by Topsca and Gaylite.

14. The defendant said that he had received a lot of complaints from the companies' suppliers about unpaid bills. He had approached his wife about this and asked her to pay them, but she had refused, saying that she would paralyse his companies.

15. He had sought legal advice in late 2001. His solicitors had searched the companies registry for him and to his surprise, he had found out that, on paper, he was out of them. In particular he found that it had been recorded that he had withdrawn from Gaylite with effect from 15 September 2000, and his son had become a partner along with this wife. He had apparently transferred his 5,000 shares in the holding company Topsca Ltd to one Golden Miles Overseas Ltd, on 19 January 1999 and his wife had transferred her shares to one Twighlight International Holdings Corporation, both BVI companies. He had apparently withdrawn from Topsca and sold his shares to his wife. He had apparently also transferred his shares in Feeble Industries Ltd to his wife and son, also on 15 September 2000. But he had never in fact done or agreed to do any of these things.

16. After this the defendant investigated the books of the companies and found, according to him, that his wife had herself withdrawn considerable sums. Her own bank statement showed that she had cash, bonds and shares worth over US$1.75 million as at 31 May 2000. These funds could only have come from the companies as Madam Pong had no other source of income.

17. In the premises, he had decided to take action to protect the family business and preserve the family assets. So he had made the withdrawals which are the subject of these actions. He was an authorised signatory; and since his wife was keeping the company chops, he had fresh ones made, which he though that, as he was a shareholder, director and partner, he had the right to do. He intended to use this money to pay off suppliers and had in fact paid $200,000.00 to one Value Pool Manufacturing Company Ltd. He had also told Ms Lo to put his withdrawals through the books as director's drawings.

18. Thereafter his wife had tried to lock him out of the former matrimonial home in Repulse Bay, and also out of the office. With the assistance of his solicitor, the former matter was settled and he was able to obtain entry. He then had a full company search done and saw the various documents which showed his resignations, sales of shares and the like. He says that in each case, he believes that he signed the document in the circumstances set out above, i.e. at the request of his wife, and without reading them. He said that he would never have done any of these things. Furthermore, he had never received the $1,040,000.00 purportedly payable for his shares in Topsca, nor payment for his shares in Feeble. He asked his son about entries which related to him; the son said that he had not attended directors' meetings, signed forms, or agreed to act as a director or partner of Topsca or Feeble; neither had be bought the shares in Feeble which purported to have been transferred to him.

19. This triggered a further affirmation by Madam Pong. In it she said that though the defendant says that he found out about his apparent resignations in late 2001, he never raised the question of them with her, until after he had withdrawn the money. She admitted having herself withdrawn money from the company accounts but said that this was done so as to earn interest for the companies which would not be taxed. She referred to matters pleaded by her in the divorce proceedings, in particular that following an argument over the defendant's association with another woman, the defendant pleaded with her not to interfere with his private life. She said that if he continued in this fashion, sooner or later all the savings for which she had worked so hard would be drained away. The defendant agreed to transfer all his shares in Topsca Ltd to her. However Madam Pong suggested that their shares in Topsca Ltd should be transferred to two offshore companies, and a trust set up for the benefit of their son. This trust was set up by a Deed of Settlement dated 18 January 1999, signed by the defendant. Then there had been a further agreement in August or September 2000 that the respondent would transfer all his shares in the companies and firms to Madam Pong and their son, on condition that she would waive all his indebtedness to the companies and to herself. It was also agreed that he would carry on working for the companies as a salaried employee for $50,000.00 per month.

20. She also said that the various outstanding debts of Topsca and Gaylite, for the payment of which, according to the defendant, he withdrew the money from the bank, had in fact been settled except for about $600,000.00 which was a matter of dispute with Value Pool Manufacturing Company Ltd. As to her withdrawals from the two companies' accounts she further said that this was a matter of money flow within the companies.

21. The defendant then filed a further affirmation disputing matters raised by Madam Pong and raising other matters. In particular he said that they had had a meeting on 11 March 2002 at which in the presence of their son they had agreed that in consideration of the defendant's abandoning his interests in the companies, he would keep the money he withdrawn, and receive a further $2,000,000.00; she would give up all existing business of the companies, but be responsible for all outstanding debts; and he would be released from his personal guarantees to the companies' banks. A memorandum of this agreement was written out, signed by the parties and kept by the son.

22. This agreement was denied by Madam Pong in a further affirmation in which she also took issue with other matters which the defendant had raised.

23. There are two affirmations by the son, Lo Tin Wai. His evidence is that he knew of the directorship changes, had himself consented to become a director and had authorised his mother to sign the forms on his behalf. He said that the defendant had all along consented to the cessation of his directorships and shareholderships and had discussed the trust with him. He said that the defendant had told him that so long as the assets remained in the family he did not mind that they should not be held in his name. As to the meeting on 11 March 2002, the son said that no agreement had been reached. The defendant had written out a memorandum which Madam Pong had then and later refused to sign.

24. In order to obtain leave to defend, a defendant must show a "real or bona fide defence". If he asserts that there is a triable issue the Court will test the credibility of his assertion against his conduct and contemporary documents. See Murjani v. Bank of India [1990] 1 HKLR 586.

25. In Ng Shou Chun v. Hung Chun San [1994] 1 HKC 155, Godfrey JA said :

"...I would sound a note of caution about Murjani which has come to be cited in almost every case under O 14 or O 86 to justify the plaintiff in asking the court to embark on a mini trial of the action on affidavit evidence. That is not a proper course for the court to take. It will in future be sufficient for the court to ask itself the simple question: 'Is what the defendant says credible?'. If so, he must have leave to defend, if not, the plaintiff is entitled to summary judgment. The issue is not whether the defendant's assertions are to be believed, it is whether those assertions are believable."

26. As Bokhary JA (as he then was) further explained in Re Safe Rich Industries Limited, Civil Appeal No.81 of 1994, unreported, 3 November 1994 :

"The test at the summary stage is indeed as simple as whether the defendant's assertions are believable. But it must be recognised - because failure to recognise it would create a debt-dodgers' charter - that whether the defendant's assertions are believable is a question to be answered not by taking those assertions in isolation but rather by taking them in the context of so much of the background as either undisputed or beyond reasonable dispute."

27. Further, Order 14 is for crisp and simple issues of fact. As Rogers JA said in Ng Lung Sang Anita v. Lam Yuk Lan [1999] 4 HKC 106 at 111 :

"The old adage that if you have to sit down, it is not a case for Order 14 is equally applicable today as it was when it was first coined."

28. Counsel for the plaintiff argues that the defendant has thrown up all kinds of factual disputes which are really irrelevant to the central issues here, in an attempt to give an illusion of complexity where none exists. The matter is simple. If the factual issues were to go to trial, and be resolved in his favour, it would not avail the defendant. Even if the defendant was still a director, he could not legitimately make a faked chop in order to withdraw the company's money. His assertion that he took the money to pay debts of the company and the partnership is a sham, because he did not pay them. His assertion of signing documents without reading them and knowing what their contents were is likewise unbelievable.

29. Counsel for the defendant says that these applications are an attempt to resolve matrimonial financial disputes which should really be resolved by an application for ancillary relief in the divorce proceedings. There is a triable issue on whether the defendant voluntarily and knowingly signed away all his interests in all his businesses, and agreed to carry on as an employee in them, in the circumstances of the marriage breakdown. There is also a triable issue as to the purposes for which he withdrew the money. So far as Gaylite is concerned, a partnership cannot sue its own partner; the wife should be suing, and she could only sue for an account. So far as Topsca is concerned there is a doubt as to whether the action is brought with the authority of its board of directors.

30. It is also argued for the defendant that there are doubts and suspicions as to the plaintiff's conduct which bear the appearance of falsity, disreputable dealings and questionable conduct. In such circumstances unconditional leave to defend should be given; see Billion Silver Development Ltd v. All Wide Investments Ltd [2000] 2 HKC 262.

31. There are two key factual issues here. The first is whether the defendant was or might have been still a director of Topsca and a partner in Gaylite. Obviously, if his assertions on this are unbelievable, he has no defence. If his assertions on this are believable it is then necessary to consider whether he, acting as a director and partner, took the money in order the pay off the plaintiff's business debts. If that is believable, he should have leave to defend. If however it unbelievable, it follows that he must have taken it for himself. The third key issue then arises, which is the legal issue of whether defendant, acting as a director and partner, and taking the money for himself, had the right to do so. If not, then he holds it as a constructive trustee and must return it; he has no defence and summary judgment must be given against him. I leave aside for the moment the technical points raised by the defence.

32. The first factual issue is whether the defendant's assertion that he, trusting Madam Pong, signed the various documents without reading them, or knowing what their effect was, is believable. In this connection I do not think that the background of the matrimonial disputes can be disregarded. It is against that background that the defendant's assertions must be considered.

33. The documents which are immediately relevant to these applications are the Form D4, Notice of Resignation of Secretary or Director; the Instrument of Transfer; the Bought and Sold Notes and the Change of Partners form. There is also a set of minutes of a directors' meeting of Topsca on 15 September 2000, apparently signed by the defendant. Less close, but still connected, are identical documents in respect of Feeble Industries Ltd; the Settlement Deed; the Instrument of Transfer and the Bought and Sold Notes for the transfer of the defendant's shares in Topsca Ltd in 1999.

34. It is obviously extremely difficult for a person who signs a Form D4 not to know that he is resigning as a director or secretary of a company, because even if the form is blank, or partly covered, it bears the words "Resigning Director/Secretary" in English and Chinese immediately below the line above which the signature is to be placed. The difficulty is the same in the case of the Inland Revenue Change of Partners Form which bears the words "Outgoing Partner" immediately above the signature box. The signer must know that he is leaving some partnership, even if the form does not, at the time of signing, bear its name. The Sold Note and the Instrument of Transfer also bear the word "Transferor" below the line and the signer must know that he is transferring something.

35. I accept that there may be less difficulty in saying that the defendant must have known what he was signing when he put his signature to the Settlement Deed. The last page has nothing on it but the signatures. While that page bears the signatures and seals of the defendant and Madam Pong they are not witnessed, even though those lower down the page where Madam Pong signed on behalf of the two companies to whom the shares in Topsca Ltd had been transferred were witnessed by a solicitor. The correction of a typographical error on the first page was initialled by Madam Pong, but not by the defendant. It is not impossible that the last page only was put before the defendant for signature.

36. That the defendant should have trusted Madam Pong and signed all the documents that she put before him without reading them would be believable enough, if applied to business documents such as cheques, bank applications, letters of credit and so on. It is rather more difficult to accept that he would have done this in respect of documents which clearly purport to sign away his rights. This is particularly so in the context of the matrimonial problems which had been going on for years.

37. At first glance, the defendant's assertions regarding the documents and his signatures on them seem unbelievable. However when one looks at the whole of the background, it also seems unlikely that the defendant would knowingly have signed away his rights to all the real property held in the name of Topsca Ltd. It is not unknown for a man to sign over his share in joint property to his wife, so as to be able to get out of a bad marriage, or stay in it but effectively live separately; but there is always a question of what that is worth. Topsca Ltd was then holding five properties, which, even after the slump in property values in recent years would still be worth quite a lot of money, and to sign it all away would have left the defendant with nothing. It would have been a bad bargain, and not one that most guilty husbands would accept. It also seems unlikely that, having bought his freedom in this way, the defendant would have agreed to buy it again, by divesting himself of his interests in Topsca and Gaylite, particularly when he remained a guarantor of their debts to their banks, and that he should have put himself in the vulnerable position of working for a salary in businesses controlled by his estranged wife.

38. There are also some inconsistencies in the evidence of Madam Pong. While she says that the defendant signed away his rights in Topsca Ltd in order to gain freedom to live as he pleased, she nevertheless, as appears from her Reply, continued to have a private investigator follow him to obtain evidence of acts of unreasonable behaviour and adultery, in which he had engaged for many years. She does not seem to have given him any freedom that he was not taking for himself, and again it is difficult to see why in the circumstances he would have signed away his rights. The same applies to what she says about his further agreement to give up his rights in Topsca and Gaylite.

39. A further point was taken that if the agreement included the waiver by Topsca and Gaylite of the defendant's debts to them, there is no evidence of what those debts were. There do not seem to be any accounts showing director's drawings by the defendant. At the same time, Madam Pong was drawing out considerable sums. She explains this as a manoeuvre to save tax but in fact a simple arithmetical calculation shows that she has taken out more than she has put back. Another thing which is not explained is where the money came from to buy the property in Laguna Verde in 2000, at a time when, on Madam Pong's case, the defendant was still a director of Topsca and Feeble and a partner in Gaylite.

40. The defendant also points to the fact that while he is said to have transferred his shares in both Topsca and Feeble for agreed monetary consideration, there is no evidence that he was ever paid.

41. It seems to me that, although the defendant's assertions seem unlikely to be true, in the context of the matrimonial troubles trickery by the wife to deprive the husband of his interests in the matrimonial property cannot be ruled out. His assertions cannot be dismissed as unbelievable on the affirmations.

42. I turn to the second key issue, whether the defendant's story of taking the money to pay creditors is believable.

43. The defendant said that he took the money to pay off the companies' debts which amounted to more than $2,400,000.00. He paid $200,000.00 to Value Pool Manufacturing Company Ltd. He did not make any further payment, "because of the matters set out below" in his first affirmation. Those matters are, it seems, the incident on 20 February 2002 when Madam Pong tried to exclude him from the former matrimonial home, and the information which he got from her solicitor as to the circumstances under which he was said to have signed away his interests in the various companies. It has to be noted however that he already knew, by the time he received his solicitor's letter of 28 January 2002, that he had been ousted as a director, shareholder and partner in all the family businesses, whether legitimately or illegitimately.

44. In his first affirmation the defendant also said that he believed that he was entitled to keep the money. He has not in fact paid any of the business debts except for the $200,000.00 mentioned, and that, from the terms of the receipt, seems to have been paid as a kind of loan or security; it was to be repaid once Gaylite had cleared the debt. So it is doubtful that his true intention was to pay the business debts. It seems more likely that he, knowing that he had been ousted, and having seen that his wife had withdrawn money, decided to take direct action and get some money out for himself. His own note to Ms Jenny Lo seems to indicate that he intended "tit for tat".

45. The difficulty is the same as that with the assertion that the defendant's signatures were obtained by trickery. The assertion that the defendant took the money, intending to use it to pay the plaintiff's debts, also does not sound likely. Realistically it will probably not stand up, if the matter goes to trial. But against the background of the matrimonial dispute I do not think that it can be dismissed on the affirmations as simply unbelievable.

46. Assuming then that the plaintiff still was a director, shareholder and partner, and did take the money to pay the plaintiff's debts but then changed his mind and kept it, does that mean that he must now account for all of it save the $200,000.00 he has paid?

47. The Articles of Association of Topsca provide at Article 26 :

"The net profits of the Company in each year shall be applied in or towards the formation of such reserve fund or funds and in or towards the payment of such dividends and bonuses as the Directors subject to the approval of the Company in General Meeting may direct."

48. In fact there is no evidence that any Annual General Meeting of the company has been held since 1995, and no evidence of any declaration of bonuses or dividends. There is no evidence of any agreement that the defendant could draw money against such bonuses or dividends. Indeed it appears from his evidence that his remuneration was by way of a salary, paid into a joint account, which Madam Pong closed in January 2002, as well as the settlement of credit card bills by the companies. It is certainly arguable that he could not legitimately keep the money for himself, or that he would not owe a fiduciary duty to account to the company for any money that he did keep. The same would apply to partnership money. However, I do not think this is so simple or so certain, if the defendant's story of having been ousted by trickery is found to be true. Nor can Madam Pong's drawing out more than she has put back, or her purchase of the Laguna Verde property, be disregarded. If the defendant had no right to make drawings, neither did Madam Pong.

49. The defendant raises the following technical points in relation to Topsca. In the first place there is no evidence of any Annual General Meeting since 1995. The Articles provide that the directors retire at every AGM. If no AGM is held the directors are taken to have retired at the end of the period during which it should have been held; Re Zinotty Properties Ltd [1984] 1 WLR 1249. Therefore, it appears that Topsca has no directors.

50. Section 111 of the Companies Ordinance provides that the period between two AGMs should not be more than 15 months. Table A applies by virtue of Article 1 of the company's Articles. Article 135 of Table A required notice to be given of all members of any general meeting.

51. The defendant's shares were allegedly transferred on 15 September 2000. The action was raised more than 15 months later. There is no notice of any AGM in this period. In any event the quorum of a general meeting is two members holding at least 51% of the share capital. If the defendant had not transferred his shares, if there was an AGM in this period and he was not notified of it, it would be invalid. No appointment of any director in this period could be valid. Since there was no valid AGM in the period, all directors had automatically retired at the latest on the expiry of 15 months from the alleged transfer, i.e. 15 December 2001. The company did not have any board of directors to authorise the bringing of the action. Nor was there any authorisation by members, for if the defendant was still a 50% shareholder he would not authorise a lawsuit against himself.

52. If the defendant can succeed in his claim for restoration of his shares he can attend any AGM and prevent the board of directors being packed with people who are against him. He will be able to stop these actions. If the wife and son band together against him he will be able to petition for winding up or for a buy-out of his interests. It will be open to him to apply to the court under section 168A of the Companies Ordinance, Cap.32, on the ground that the affairs of Topsca were conducted in a manner unfairly prejudicial to him, in that Madam Pong withdrew substantial sums while refusing to allow him similar withdrawals. Alternatively it will be open to him to apply for winding up by the Court under section 177 on the ground that it is just and equitable to do so.

53. Counsel for the plaintiffs argues that this too does not avail the defendant. It is entirely premised on the defendant's story and it has no legal foundation, given that he was only one out of three directors, the other two of whom take issue with him over his taking of Topsca's money. The lawfulness of a decision taken by a meeting of members of a company or its board could not be questioned if the only fact alleged to make it unlawful was a mere informality or irregularity but where the intention of the meeting was clear; see Yip Peter v. Asian Electronics Ltd [1998] 2 HKC 96.

54. For my own part I do not think it is so simple. If the defendant is believed it will mean that he remains, not just a director but a 50% shareholder. As such he will no doubt have company law remedies available to him. Also, so far as Gaylite is concerned the defendant argues that the partnership cannot sue a partner, and in any event what should be sued for is an account. See Meyer & Co. v. Faber (No. 2) [1923] 2 Ch 421. It is argued for Gaylite that the money was partnership property and that if the defendant was a partner, the taking of it was a breach of his duty of good faith to the partnership. There is nothing to stop a firm suing a partner for a wrong committed against it. See Lindley and Banks on Partnership, 18th Edn, para. 16-01. While it is a well recognised rule that an action for an account is normally required where money is sought to be recovered from a partner, this is not so where, exceptionally, taking an account would serve no useful purpose; see Lindley at para. 23-75. No useful purpose would be served here by taking an account.

55. I think it is an oversimplification to say that taking an account would serve no useful purpose. There is still a dispute with Value Pool over the amount owed. That would have to be resolved and the result taken into account, if the defendant is still a partner. In any event, if he is still a partner some sort of account will have to be taken in any event for the purposes of the ancillary proceedings in the divorce case.

56. Order 14 is for crisp, simple issues. There are none here, unless one simply disregards the whole of the matrimonial and commercial history of Madam Pong and the defendant. I do not see how summary judgment could be granted here. It seems to me that the Master was right to give unconditional leave especially given the questionable conduct of Madam Pong with regard to her own withdrawals.

57. The Master also ordered that the summonses be dismissed with costs to the defendant forthwith, to be taxed if not agreed. Both orders should not be made together. If Order 14, rule 7 applies for instance where the plaintiff knew that the defendant relied on a contention that would entitle him to unconditional leave to defend, dismissal with costs payable forthwith is appropriate. Otherwise if leave to defend is to be given the normal order is for costs in the cause. The Master does not seem to have proceeded under Order 14, rule 7. Accordingly the appeal will be allowed to the extent that an there will be an order in each case granting unconditional leave to defend, with costs in the cause. Otherwise the appeal is dismissed with costs (nisi) to the defendant in any event.