TELE-ART INC. (In Liquidation) v. TAM KING CHING KENNY and SHUM LAP CHI, THE JOINT AND SEVERAL LIQUIDATORS OF TELE-ART LTD (In Liquidation) AND ANOTHER

CACV 234/2007

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 234 of 2007

(on appeal from HCCW NO. 974 of 2000)

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BETWEEN

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REASONS FOR JUDGMENT

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Hon Rogers VP and Le Pichon JA:

1.  This was an appeal from a judgment of Barma J given on 22 June 2007.  The judge had had a number of applications before him at the hearing.  The matter in respect of which this appeal was brought was an application by the appellant under section 219 of the Companies Ordinance Cap. 32 (“the Ordinance”) seeking leave to inspect the books and papers of Tele-Art Ltd, which had previously been a subsidiary company of the appellant.  The judge dismissed the appellant’s summons with the consequential order as to costs.

2.  After the notice of appeal had been filed in respect of this appeal, the appellant issued a further summons under section 219 and, last November, obtained the order for inspection that it had sought on the application that Barma J.  In view of the fact that the appellant has now succeeded in obtaining the order for inspection, which is what is sought by the notice of appeal, there is now no substantive order which this court could make or, indeed, can be asked to make.  In the circumstances this appeal had become purely academic.  This court, therefore, did not hear argument as to the merits of the original application before Barma J and the appeal therefrom but dismissed this appeal with reasons to be given in writing, which we now give.

Background

3.  A summary of the history of the various matters leading up to these proceedings is derived from the judgment of Barma J, the Privy Council judgment in Hague v Nam Tai Electronics Inc. (reported in [2006] UKPC 52, [2007] 2 BCLC 194) and the papers filed in the appeal.

4.  As a preliminary matter, as matters stood at the substantive hearing below, in the liquidation of Tele-Art Ltd, the Bank of China was a secured creditor and the appellant, through the guarantees and share charges given to the Bank of China, had a contingent claim against Tele-Art Ltd in respect of the value of its Nam Tai shares that had been or would be sold by the Bank of China pursuant to the share charges.  There was however another dimension created by Nam Tai’s funding of the appellant in respect of (inter alia) these proceedings, bringing into focus as part of the relevant background its dealings with the Bank of China over the charged Nam Tai shares.

The context

5.  In 1993, the appellant charged and pledged 700,908 Nam Tai shares to the Bank of China to secure facilities to be granted by the Bank of China to Tele-Art Ltd.  Due to Tele-Art Ltd’s defaults, the Bank of China sought to realise the shares so charged.  While the shares contained certain restrictions, under the applicable US securities law, the Bank of China was nonetheless able to realise a certain amount of shares from time to time and it is common ground that by early June 1996, only 375,727 shares remained charged.  The restriction period expired at about this time and those shares were sent to Nam Tai for removal of the restrictive legends.

6.  At the time the share charges were granted, the appellant would appear to have been in financial difficulties for, on the very same day, an Irish government agency obtained a judgment against the appellant in the BVI High Court for approximately US$800,000.  In May 1996, FORFAS, another Irish agency, acquired the debt and obtained a charging order absolute in respect of that debt which included a “Stop Notice” restricting the transfer of the Nam Tai shares.

7.  In August 1996, the Bank of China again requested Nam Tai to remove the restrictive legends on the shares sent in June 1996 but Nam Tai was unwilling to do so without a further court order dissolving the charging order.  This resulted in proceedings to establish the priority of the Bank of China.  At that stage, in excess of HK$57 million remained owing to the Bank of China.  While those proceedings were pending, in May 1997, Nam Tai acquired the FORFAS’ judgment debt and, on 27 June 1997, Nam Tai petitioned for the winding up of the appellant in the BVI.

8.  The proceedings taken by the Bank of China to establish its priority culminated in an order made in September 1997 by the BVI court, discharging the charging order absolute, staying the winding up of the appellant and ordering that the shares in Nam Tai be sold at a minimum price of US$17 to repay the indebtedness owing to the Bank of China and the balance to Nam Tai as judgment creditor through its acquisition of the FORFAS judgment debt.

9.  However, it only proved possible to sell 67,500 of the 375,727 Nam Tai shares pursuant to the BVI court order.  Unfortunately, in April 1998, the transfer agent mistakenly forwarded to Nam Tai instead of the Bank of China the balance of 308,227 shares remaining unsold.

10.  The appellant was wound up by the BVI court in July 1998 on Nam Tai’s petition and Mr David Hague was appointed liquidator.  The position was therefore that both the Bank of China and Nam Tai were creditors of the appellant, the Bank of China holding security over the appellant’s shares in Nam Tai and Nam Tai itself being unsecured.

11.  Nam Tai then devised a scheme which would result in the Bank of China being deprived of the security of at least a large part of the shares.  It involved altering Nam Tai’s articles of association to create a special power to redeem the shares of judgment debtors and to offset the value of the redeemed shares against the judgment debts.

12.  Mr Hague, the then liquidator of the appellant, commenced proceedings in the BVI to restrain redemption of the Nam Tai shares and challenged the redemption made in January 1999 whereby Nam Tai purportedly redeemed 138,500 of the Nam Tai shares and set off the redemption price against the FORFAS judgment debt it had acquired (“the first redemption”).  The liquidator succeeded at first instance but pending that decision, a second redemption was effected.  In April 2004, the BVI Court of Appeal held that the redemptions were valid but that the Bank of China was a secured creditor and ordered Nam Tai to pay the redemption price and dividends declared to the liquidator of the appellant.  There was then an appeal to the Privy Council.  All told, that litigation took almost 8 years to resolve.  On 20 November 2006, the Privy Council held that the redemptions were nullities and ordered Nam Tai to rectify its register of members to reinstate the purportedly redeemed shares (plus further shares accruing on them) and to reinstate the Bank of China as the registered holder of those shares.  Lord Hoffmann in giving the advice of the Privy Council said that Nam Tai had “devised a scheme to destroy the Bank’s security”.

13.  As at the date of the substantive hearing below, that is to say, at the end of February 2007, Nam Tai had not complied with the order of the Privy Council that had been made some three months earlier.  Nam Tai only complied with the order on 13 April 2007 by issuing the appropriate number of shares in itself to the Bank of China.  However, because there were “restrictive legends” endorsed on the back of the share certificate so issued, that posed difficulties in the way of realisation of the security that had to be resolved and it was not until September 2007 that the Bank of China was able to fully realise its security by selling part of those Nam Tai shares to discharge all outstanding indebtedness.

The section 219 application

14.  It is against that backdrop that the question that eventually arose for determination by the judge has to be viewed.  For reasons that appear below, that question did not surface until July/August 2006.

15.  Tele-Art Ltd went into liquidation on 10 January 2001.  Some 4½ years later, in August 2005, the liquidator of the appellant took out a summons for leave to inspect the books and papers of Tele-Art Ltd on the basis that the appellant was a contributory of Tele-Art Ltd (“the first summons”).  The appellant itself had been in liquidation since July 1998.  When the first summons came before Barma J on 30 August 2005, it was adjourned sine die to enable the appellant’s liquidator to consider his position as the appellant was not on the register of members of Tele-Art Ltd.  That led to HCMP 26 of 2006 commenced in January 2006 for the rectification of the share register of Tele-Art Ltd in order to provide the appellant with standing to pursue its section 219 application.  As recorded by the judge, it is accepted that Nam Tai funded both sets of proceedings.

16.  Almost a year after the first summons was first taken out, in July 2006, the appellant (again funded by Nam Tai) revived the first summons on the basis that it was the contingent creditor of Tele-Art Ltd through its right to seek an indemnity from Tele-Art Ltd under the guarantees and share charges.  It was at this stage that the Bank of China sought to intervene by issuing its summons of 29 August 2006.  Directions were then given so that the appellant’s substantive application under section 219 and the Bank of China’s summons to intervene could be heard together.

17.  As a result of the Privy Council advice, Nam Tai’s scheme to destroy the Bank’s security was thwarted.  Nevertheless, as noted earlier in this judgment there seems to have been some considerable time lag between the delivery of the advice by the Privy Council and the time when the Bank of China was put in a position of being able to sell the Nam Tai shares to which the Privy Council had said it was entitled.  Once that sale had taken place and the debts to the Bank of China had been discharged, the appellant became entitled to step into the shoes of the Bank of China and become a creditor of Tele-Art Ltd.

18.  At the time that the summons to which this appeal relates was heard the appellant was not a creditor but was only a contingent creditor to the extent that it confidently expected that the Bank of China would realise the security, the entitlement to which it had been forced to go to the Privy Council to establish.  Hence, at the stage of the hearing before Barma J the appellant was not able to prove in Tele-Art Ltd’s liquidation although it expected to be able to do so in the future.  Barma J held that because of the appellant’s inability to prove in the liquidation, the appellant could not be regarded as a creditor of Tele-Art Ltd for any purpose of the winding up, including for the purpose of making an application under section 219 of the Ordinance.  He therefore dismissed the application. 

19.  The amended notice of appeal seeks an order that the order of Barma J be set aside and that the appellant and/or its authorised agents be granted leave to inspect the books and papers of Tele-Art Ltd (in liquidation) with costs here and below to the appellant with certificate for two counsel.

Absence of substantive relief

20.  Sir John Swaine SC, who appeared on behalf of the appellant, accepted that he could not seek an order for inspection.  He also accepted that on the footing that Barma J had correctly dismissed the summons, his order as to costs was correct.  In those circumstances, there was no issue between the parties as to the substantive relief to which the appellant was entitled and there was no issue as to the correctness of the order as to costs in the court below.  What was said was that had Barma J held in favour of the appellant the costs order would have been different and not only would the appellant not have been ordered to pay the respondent’s costs, but it would also have been entitled to an order for costs itself.

21.  Such a consideration does not cause the appeal not to be an academic exercise.  As already stated, the appellant cannot ask this court to grant the substantive relief.  It would be quite wrong for any party to come to this court simply to ask for a declaration or statement from this court that a judge in the Court of First Instance had erred in some statement.

22.  This court has made clear in at least two judgments namely Gay v Yip Shut Yuen [2004] 1 HKC 615 and Kuok Hong Neng v Yuen Sic Wah [2004] 1 HKC 618 that where an appeal is academic, this court should not entertain such an appeal and that the argument that an appellant might benefit from an order as to costs did not suffice as a reason to permit the bringing of such an appeal.

23.  It was argued that those decisions had been made in error because in so far as reliance had been placed on the report of the case of Ainsbury v Millington (Note) [1987] 1 WLR 379 this court had overlooked what had been said by Lord Bridge at page 381C-D where he said:

“It has always been a fundamental feature of our judicial system that the courts decide disputes between the parties before them; they do not pronounce on abstract questions of the law when there is no dispute to be resolved.

Different considerations may arise in relation to what are called “friendly actions” and conceivably in relation to proceedings instituted specifically as a test case.  The instant case does not fall within either of those categories.  Again litigation may sometimes be properly continued for the sole purpose of resolving an issue as to costs when all other matters in dispute had been resolved.  Realistically counsel did not suggest that the possibility in this case of either party being ordered to pay the costs of the other, which in practice is so remote as to be negligible, could be regarded as affording a sufficient lis inter partes to keep the appeal alive.”

24.  In these particular circumstances, one thing that can be said with certainty is that this court did not overlook those passages in giving judgment in the 2 cases referred to above.  In so far as there may be an issue as to costs, Lord Bridge was no doubt referring to a situation where there was an appeal as to costs because there was said to be an error in the making of or not making of a costs order.  Such an appeal is a special situation.  It was a situation which arose for example in the case of Ch’ng Poh v Cheng, Teung & Co. [1998] 2 HKLRD 571 see the judgment of Liu J at page 580E.

25.  Lord Bridge, in referring in the last sentence in the passage quoted above to the argument which he said was not put and peremptorily dismissing it without analysis, did not hold that if an appellate court considered that a judge had erred in some statement of statutory construction it should hear an appeal where the appellant could not seek an order that would grant relief that had been sought at first instance or some alternative relief; nor that it should do so in order that the losing party in the court below could secure a reversal of an order of costs by using valuable appellate court resources, not to speak of adding substantially to the parties’ own costs of the litigation.  Still less did he say that an appellate court could or should embark on an appeal where there was no substantive relief sought on the appeal and where to be “successful” would entail the appellate court having to go through the process of exercising its discretion as to whether relief should have been given in circumstances which no longer prevail.  Lord Bridge simply dismissed the matter as unargued and, in our view, unarguable.

26.  Mr Jat SC, who appeared on behalf of the Bank of China who is the respondent, very properly drew this court’s attention to 2 cases.  The first case, Westminster City Council v Croyalgrange Ltd. and another [1986] 1 WLR 674, concerned a prosecution which had failed before the magistrate and the appeal by case stated to the Divisional Court had been dismissed.  The Divisional Court had certified that a point of law of general public importance was involved and hence the appeal to the House of Lords.  Although, it would seem that the prosecuting authority could, if it were to be successful in the House of Lords, have requested that the case be remitted for the defendants to be convicted, as a matter of discretion of the prosecuting authority it was indicated that that request would not be made but that the authority was nevertheless entitled to its costs.  It would appear, therefore, that there was a case where there was a right in respect of which the prosecuting authority could have requested enforcement but that it indicated in advance that it would not do so.  It was not a case where the prosecuting authority accepted that it could not ask for such an order. 

27.  The other case was Regina (Bushell and others) v Newcastle Licensing Justices and another [2006] 1 WLR 496.  That case involved licensing provisions which had been in force when the proceedings had begun but had ceased to be in force when the case reached the House of Lords.  As part of the proceedings the appellant had given an undertaking not to commence trading.  In return for that undertaking there had been a cross-undertaking as to damages.  At paragraph 5 of his speech Lord Hoffman had said:

“In these circumstances Mr Steel says that the appeal has become moot and the House should dismiss it without a hearing.  But the appeal is not moot in the sense that its outcome can have no practical consequences for the parties.  There remained two respects in which it may affect their rights and obligations.  The first is in relation to the costs which Ultimate incurred or was ordered to pay in the hearings before Lightman JA and the Court of Appeal and the costs of the appeal to this House.  The second arises out of a cross-undertaking which one of the objectors, Rindberg Holding Co Ltd, gave in return for, first, an undertaking by Ultimate not to commence trading until an application for leave to apply for judicial review had been heard, and then, an order to stay the continuation of the hearing before the justices.  Ultimate say that the delay caused them loss of profit and have started proceedings to enforce the cross-undertaking.  But those proceedings would be doomed to failure if the House agreed that the justices had no jurisdiction under section 15 and dismissed the appeal.”

28.  Lord Hoffman then went on to deal with the merits of the case.  In the outcome the appeal was allowed, which presumably resulted in the cross-undertaking being enforced.  Three of the other Law Lords stated simply that they had had the advantage of considering Lord Hoffman’s speech and agreed.  Lord Brown, on the other hand, agreed with Lord Hoffman as to the result of the case and added nothing further in respect of that but specifically dealt with the preliminary objection.  He said:

“21     I respectfully agree with Lord Hoffmann that a complete answer to this objection is to be found in the appellants’ outstanding claim for damages (currently put at some £340,000) pursuant to the respondents’ cross-undertaking given as a condition of the appellants’ own undertaking and a subsequent stay order which together operated to delay any chance of opening the Gresham for licensed trading by some eight months.

………………..

22     The other ground on which the appellants sought to resist the respondents’ preliminary objection, however, the question of costs, seems to me altogether more difficult and it is on this issue that I wish to express certain thoughts of my own.

23     True it is that very substantial costs have already now been incurred in litigating this case in the lower courts: the combined costs of both sides in the High Court and the Court of Appeal are put at some £250,000.  But nobody has suggested (nor, to my mind, could possibly suggest) that this House would ever give leave to appeal if the only reason for doing so was to determine what had become a purely academic point just so as to see whether the Court of Appeal had decided it correctly and thus made the right costs order below.  That would simply not be a proper exercise of this House’s jurisdiction as a second-tier appeal tribunal nor an appropriate use of your Lordships’ time, put aside the expenditure of the further costs involved in litigating the issue yet again.

24     I acknowledge the point made by Lord Hoffmann at para 8 of his opinion that, generally speaking, an appellant before the House is permitted to pursue his appeal even though it no longer turns on a question of general public importance but rather has become, as in Sirius International Insurance Co (Publ) v FAI General Insurance Ltd [2004] 1 WLR 3251, “a one-off case” for which “the House would not ordinarily have given leave to appeal”: per Lord Steyn, at p 3253, para 3.  There seems to me a significant difference, however, between a case like Sirius where there remained a live issue between the parties on the outcome of which hung a substantial claim and a case such as I am envisaging where all that is at stake is past (and future) costs.

25     The only other decisions of the House which were referred to your Lordships, Sun Life Assurance Co of Canada v Jervis [1944] AC 111 and Ainsbury v Millington (Note) [1987] 1 WLR 379, involved very different considerations.  In each of those cases, as Lord Hoffmann has explained at para 6 of his opinion, the outcome of the appeal could have had no effect upon the position of the parties-either as to their respective rights or, and this was critical, as to costs-and were therefore in a complete sense moot.  But each of them unquestionably would have involved the House deciding a substantive point so as to clarify the law for future cases: in the Sun Life case, the law concerning a large number of the appellants’ other endowment policies; in Ainsbury v Millington (Note) a question of general importance regarding housing law.  That notwithstanding, the House declined to hear either appeal.

26     The situation I am presently considering is, of course, essentially the obverse of those two cases: here, unlike there, costs is the one matter which can be affected by the appeal; but here, of course, unlike there, no issue arises of any wider importance than who should pay the costs incurred at the earlier stages of the litigation.

27     In this situation I for my part would expect the House to be altogether readier to refuse to hear an appeal notwithstanding that leave had been granted than where, as in Sirius, some genuine question other than costs still divides the parties and remains at issue.

28     In the present case the appellants should surely have sought the expedition of their appeal so that, if successful, the disputed licence would have taken effect at the Gresham before lapsing by operation of law on 24 November 2005 (when the new licensing regime came into effect under the 2003 Act)- preferably indeed, so that it would have been available for conversion to a premises licence under Schedule 8 to the 2003 Act, namely before the cut-off date of 6 August 2005.  Once those dates had passed, however, the respondents (assuming there were no outstanding claim for damages and that the parties’ previously incurred costs had been all that remained at stake between them), should have alerted the House to the essentially academic character of the point of law for which leave to appeal had originally been given and sought its dismissal on that ground.  It is not, of course, necessary to reach a concluded view upon whether such an application would in fact have proved successful.  For my part, however, I think I would have found it fairly compelling.  And certainly the present appeal is not to be regarded as any kind of precedent for this House to decide points of law for no purpose other than to determine who should be liable for past costs.”

29.  It is considered appropriate to include an unusually large citation in view of the consideration that Lord Brown gave to this aspect.  Although appeals to the Court of Appeal are, for the most part, as of right, it is clear that the same considerations apply whether the matter is an appeal as of right or an appeal in respect of which leave to appeal has been given.  Moreover, an appeal relating only to costs which are in the discretion of the court requires leave.

30.  An order for costs is an ancilliary order to the order on the substantive issue in any case.  If there is an issue as to the wrong application of the legal principles in relation to costs, or the failure to consider the question of costs, that is a matter in itself which could give rise to a right to an appeal and might be said not to be a matter of discretion.  But if there is no argument about the correctness or otherwise of the application of the legal principles or discretion in relation to costs following a decision on the substantive application, then, although that might constitute a question respecting some civil right, that would not constitute a matter which the courts consider is, of itself, a judgment from which an appeal lies.  To hold otherwise would have considerable implications, for example in any case where the total costs payable by the losing party, perhaps together with that party’s own costs albeit at that stage, possibly untaxed, would come to $1,000,000, that party would be entitled to leave to appeal as of right to the Court of Final Appeal under section 22(1)(a) of the Hong Kong Court of Final Appeal Ordinance.  Such an argument has never been suggested.

31.  As Sir John Swaine submitted, it is a matter of discretion as to whether an appeal should be permitted where the only relief to which a party could possibly be entitled is an order as to costs.  In normal circumstances we consider that such an appeal should not be permitted to go ahead.  The considerations to which Lord Brown had reference are particularly relevant.  Amongst the aims espoused by the Civil Justice Reforms which are to be implemented shortly are the sound basic principles that the court’s objectives must be to increase the cost effectiveness in the court’s procedures with the expeditious disposal of cases and the distribution of the court’s resources fairly.  It is in essence quite wrong that the court’s resources should be taken up by litigants who have no claim to any substantive relief save a complaint about a past decision.  In this case the matter is compounded by the fact that the appellant failed to obtain the order in the court below primarily because the funding party, namely Nam Tai, had set out to destroy the Bank’s security and had not by the date of the hearing complied with the decision of the Privy Council.

Point of Law of General Importance

32.  As a further reason for this court to exercise its discretion to entertain the present appeal, it was said that the appeal involves a point of law that is of general importance, namely, whether the judge was right in holding that a contingent creditor is not a ‘creditor’ for the purposes of section 219 of the Companies Ordinance and has no locus standi to make an application under that section.  Sir John submitted that this point of law is of some general importance as regards the law of winding up and the rights of parties in liquidations.

33.  But clarification of the law is the preserve of the Court of Final Appeal rather than of this court whose decisions are subject to appeal to that court.  So even if this appeal were to involve a legal point of importance, hearing the appeal would not achieve the stated objective.  Indeed, one of the grounds for granting leave to appeal to the Court of Final Appeal is where the appeal involves a matter of great general or public importance under section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance.

34.  As regards the point of law said to arise, the matter is not as simple as it has been portrayed.  It is not a discrete question of jurisdiction.  The question of a party’s standing to make an application pursuant to a statutory provision involves more than considering whether that person is qualified to make the application i.e. the jurisdictional aspect.  He has to show that he has a legitimate interest in the relief sought.  The standing of an applicant cannot therefore be considered separately and without regard to the nature of the relief for which the application is made.  See per Lord Millett in Deloitte & Touche AG v Johnson [1999] 1 WLR 1605 at 1611F.  Moreover, if we were to reach a conclusion different from that of the judge, whether the discretion conferred by section 219 should then be exercised would have to be considered afresh by this court notwithstanding the fact that the judge did opine that had he been satisfied as to the plaintiff’s standing he would have exercised his discretion in the plaintiff’s favour.  If there be error in his conclusion on the question of standing, then whether the discretion should be exercised would be a matter which would have to be revisited.

35.  As to the question whether the appeal does involve a point of law of general importance, Mr Jat SC submitted that that question cannot be decided in the abstract, without a context. In our view, that approach must be correct.  Mr Jat submitted that the facts of the present case are wholly exceptional and the chances of a similar situation arising in the future are frankly remote.

36.  On any view, the question for determination by the judge arose in highly unusual circumstances.  Quite simply, it took the Bank of China no less than 10 years to realize what was a conventional security for granting banking facilities, taking the conservative view of reckoning the period from the date of the alteration of Nam Tai’s articles in October 1998.  The role of Nam Tai in all of this cannot be disregarded because it is the party funding the appellant in, inter alia, these proceedings and, accordingly, has an interest in the relief sought.  In addition to its role in the protracted litigation over the validity of the redemptions spanning some eight years referred to in §§ 11-12 above, it should be mentioned that while that litigation was still on-going,

(1)     Nam Tai commenced proceedings in March 2003 in California against the Bank of China alleging conspiracy to defraud Nam Tai in falsely asserting the Bank of China’s security interest in the Nam Tai shares and stealing the proceeds of the shares sold pursuant to the BVI order of September 1997;

(2)     later that year Nam Tai issued a subpoena against the Bank of China in proceedings commenced in New York against the broker who had sold the Nam Tai shares pursuant to the BVI order of September 1997 (“the New York proceedings”); and

(3)     after the New York court set aside a subpoena against the Bank of China, Nam Tai applied for a letter of request in the New York proceedings against the Bank of China and in February 2005, in HCMP 166/2005, obtained an ex parte order for examination.  After the Bank of China’s application to set aside that order, the parties by consent agreed to set aside the order without prejudice to Nam Tai’s right to apply for a fresh letter of request.

37.  For present purposes, the section 219 application culminating in the judgment below only commenced upon the revival of the first summons in July 2006 and, having regard to the chronology of events, we are of the view that the substantive hearing could and should have been avoided.

38.  We make the following observations.  First, had Nam Tai not embarked on its scheme to destroy the Bank of China’s security, the issue that came to be determined by Barma J would never have arisen.  Second, by August 2006 when the Bank of China filed its summons to intervene, the appeal to the Privy Council was due to be heard on 9 October 2006.  Third, in February 2007, some three months prior to the substantive hearing below, Nam Tai had been ordered to restore the Bank of China’s security which it had set out to destroy eight years previously.  Had Nam Tai carried out the order of the Privy Council with due dispatch without creating further obstacles through endorsement of the restrictive legends, the Bank of China would undoubtedly have proceeded to realise its security forthwith given that that was what it had been seeking to do since mid-1996 and certainly after the BVI court order of September 1997.  Hence there would have been little likelihood of the section 219 application being necessary, much less the substantive hearing.

39.  If, following the Privy Council decision, the Bank of China had been put into a position to realise its security promptly, the appellant would have been entitled to step into its shoes and obtain the information it seeks.  Regrettably, Nam Tai did not comply with the order made in November 2006 until April 2007 and even then, realisation was delayed for a further five months due to restrictive legends endorsed on the share certificates issued pursuant to the order.  Pausing here, it is not immediately apparent why there was a need for such an endorsement since it would appear to have been part of the BVI court order made in September 1997 that the restrictive legends in respect of the Nam Tai shares be lifted.  Taking all these matters into consideration, it is by no means clear that even if the appellant were to show that the judge had been wrong as a matter of statutory construction that it would be entitled to an order of costs in its favour.

40.  It is however clear that once the Bank of China’s interest in the pledged Nam Tai shares had been satisfied, the appellant would have no difficulty in obtaining the information sought under the section 219 summons.  That is borne out by what, belatedly, the appellant has done.  The second summons was issued shortly after the Bank of China was able to realise its security and the order was obtained unopposed.

41.  We agree that the facts of the present case are wholly exceptional.  For the reasons stated above, we do not see that any question of general importance arises.  The question ought not to have arisen at all.