CHUNG FAI HOLDINGS LTD. v. D.H. INTERNATIONAL LTD.

HCA3351/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.3351 OF 1998

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J U D G M E N T

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The background to the claim

1. This is the Plaintiff's application for judgment under Order 14 of the Rules of the High Court. The claim is for the amount of HK$15 million payable under an agreement made in early October 1997. This was an oral agreement which was later reduced into and evidenced in writing in a document dated 9th October 1997 and in an escrow letter of the same date.

2. The claim arises out of the Plaintiff, through a Mr Yim, introducing the Defendant, acting by a Mr Tai, to a company, Nicekind Holdings Limited ("Nicekind").

3. Nicekind was to acquire 5 million shares in China Telecom (Hong Kong) Limited ("China Telecom") which the Defendant would pay for. The Defendant would then have to pay the Plaintiff a "referral fee" in accordance with the agreement of 9th October 1997 ("the Written Agreement").

4. In addition to raising a number of defences to which I will return, the Defence' affirmation refers to a number of other, more or less related, transactions and law suits. I have borne those other matters in mind, although they did not feature very prominently in the arguments before me.

5. In the course of his able submissions, Mr Ng, for the Defendant, has, time and again, urged me to have regard to the commercial realities. This I have endeavoured to do. So that while it is necessary for me to concentrate on the Written Agreement sued upon, I have not neglected the flavour of the activities prior to and leading up to the Written Agreement, culled primarily from the affirmation of Mr Tai, filed on behalf of the Defence.

The Written Agreement

6. The material terms of the Written Agreement are contained in Clauses 1-6. The translation before me is not exactly elegant. For ease of reference, I will set out the relevant provisions :-

"This is the agreement made between the Plaintiff and the Defendant of 9th October 1997 whereas Chung Fai Holdings Ltd. ("CF") and D.H. International Limited ("DH") have negotiated the matters in relation to the arrangement as mentioned in the agreement between DH and HK Nicekind Holdings Limited ("Nicekind") dated 8th October 1997 ("Nicekind Agreement") to which Nicekind shall purchase and hold the shares in China Telecom through private placing from Goldman Sachs (Asia) L.L.C. ("Goldman Sachs"). As to the clause of payment of the referral fee for CF, the parties reach the following agreements :

1. CF guarantees to DH that Nicekind shall be able to be allotted no less than 5 million shares in China Telecom through private placing from Goldman Sachs.

2. DH shall on or before 5:00 p.m. on 15th October 1997 deliver to Messrs Baker & McKenzie for custody a banker's draft in the sum of HK$15 million drawn in favour of CF. If DH fails to hand the banker's draft to Messrs Baker & Mackenzie within the above time, DH shall compensate HK$1 million to CF as liquidated damage.

3. CF shall on or before 5:00 p.m. on 15th October 1997 deliver to Messrs Baker & McKenzie for custody a cheque accepted by DH in the sum of HK$1.5 million drawn in favour of DH.

4. If Nicekind manages to be allotted shares in China Telecom in accordance with the Nicekind Agreement, DH shall, in accordance with the way stated in Clause 5 of this agreement, pay CF a fee of HK$3.00 multiplied by the money incurred in subscribing the number of shares (that number of shares shall base on the written evidence supplied by Nicekind in accordance with the Nicekind Agreement and confirmed by DH).

5. If Messrs Baker & McKenzie does not receive any written objection from DH by 5:00 p.m. on the day when the shares of China Telecom commence to be listed for dealing in The Stock Exchange of Hong Kong Limited ("Hong Kong Stock Exchange"), Messrs Baker & McKenzie shall release the banker's draft in its custody to CF in accordance with Clause 2 of this Agreement. If the number of shares allotted to Nicekind is less than 5 million, CF shall, at the time the said banker's draft is released by Messrs Baker & McKenzie, deliver to DH a cheque drawn in DH's favour in a sum being the difference between HK$15 million and the amount of fee payable calculated in accordance with Clause 4 of this Agreement. If the number of shares allotted to Nicekind is more than 5 million, DH shall, at the time the said banker's draft is released to CF by Messrs Baker & McKenzie, deliver to CF a cheque drawn in CF's favour in a sum being HK$3.00 multiplied by the number of shares more than 5 million.

6. Before 5:00 p.m. on the day when the shares of China Telecom commence to be listed for trading in the Hong Kong Stock Exchange, should Messrs Baker & McKenzie receive DH's written objection and an original written confirmation from Goldman Sachs that Nicekind has not been allotted any shares in China Telecom, Messrs Baker & McKenzie shall deliver the banker's draft under Clause 2 of this Agreement and the cheque under Clause 3 of this Agreement to DH."

The rest of the Agreement contains the usual provisions in this type of Agreement.

The First Nicekind Agreement

7. This is dated 8th October 1997 and made between Nicekind and the Defendant. The recital and the first three clauses read :-

"Whereas:

Nicekind has negotiated with DH in respect of the matters in relation to the subscription and ownership of shares in 'China Telecom' through private placing from Goldman Sachs (Asia) L.L.C. ('Goldman Sachs') by Nicekind, both parties reach the following agreements :

1. Nicekind shall subscribe not less than 5,000,000 shares in China Telecom from Goldman Sachs. DH shall be responsible to pay for subscription fee for shares actually allotted to Nicekind not more than HK$10.00 per share multiplied by the number of shares allotted Nicekind. In case the subscription price exceeds HK$10.00 per share, Nicekind shall be responsible for the balance carried forward by multiplying the remainder of the subscription from which HK$10.00 has been deducted per share. After Nicekind has received the letter of allotment from Goldman Sachs, with the number of shares allotted, Nicekind shall forthwith send a duplicate copy of the same to DH. The parties of this agreement shall follow the requirements under the letter of allotment to deposit the subscription fee to the bank account designated by Goldman Sachs. Nicekind hereby agrees and undertakes that when signing this agreement, Nicekind shall sign the 'Declaration of Trust and the Instrument of Shares Transfer (the forms of which are listed on the annex to the Agreement).' The said documents shall be delivered to and kept by Messrs Baker & McKenzie.

2. After signing this agreement, Nicekind shall open a share account with Goldman Sachs ('Share Account') and perform the joint-signing procedure. Also, the relevant documents for opening the Share Account shall state that persons entitled to operate the Share Account (including the sale and purchase of shares) shall be a director of Nicekind and an authorized representative designated by DH. Nicekind shall operate the Share Account in accordance with DH's directions upon DH's payment of money to Nicekind under clause 3 of this agreement.

3. Nicekind shall submit written evidence of a successful subscription for the shares to DH on or before the day the shares in 'China Telecom' are firstly listed and traded in The Stock Exchange of Hong Kong Limited. Upon confirmation of such evidence by DH, DH shall make the following payments to Nicekind as soon as possible and not later than 3:30 p.m. on the next business day after the shares have been publicly listed for trading...."

The rest of Clause 3 deals with how much the Defendant has to pay Nicekind, depending on the subscription price of the China Telecom shares.

The rest of the First Nicekind Agreement is not material for our purposes.

The Plaintiff's Claim in Brief

8. The Plaintiff says that the Defendant had to provide the cashier order in the sum of HK$15 million to Messrs Baker & McKenzie by 15th October 1997. It failed to do so. It was therefore in breach of agreement and the Plaintiff is entitled to summary judgment in respect of that sum.

The Defences in Brief

9. A number of defences are raised. I have broken them down under five heads. They can be summarised as follows :-

1. There was no oral agreement before the Written Agreement of 9th October 1997.

2. There was no binding agreement as the agreement sued upon was not supported by consideration.

3. The sum of HK$15 million was not payable by the Defendant to the Plaintiff under the Written Agreement because Nicekind was in breach of the First Nicekind Agreement in failing to open a jointly operated account with Goldman Sachs. This is pleaded as a condition precedent in paragraph 8A of the draft Amended Defence.

4. Because the Plaintiff acted as agent for both the Defendant and Nicekind, it was disentitled to commission or the referral fees from the Defendant.

5. The Plaintiff and Mr Yim were not registered dealers of securities under the Securities Ordinance and what they did amounted to dealing in securities in Hong Kong, therefore, the money is not recoverable because of illegality.

The Principles applicable

10. The principles governing Order 14 applications are well known and are not in dispute. Order 14 applications are reserved for clear cases. Matters of credibility and disputed factual evidence cannot be and should not be resolved on affidavit and I have made no attempt to do so. The test, if it becomes material, is whether the Defence evidence is believable and unless the Defence case is practically a moonshine or obviously unsustainable, summary judgment is unsuitable. By and large, I have proceeded on the Defendant's version of the facts and Mr Chan for the Plaintiff did not urge me to do otherwise.

The Defences in more detail

The 1st Head of Defence

11. Mr Ng's first line of defence is a sophisticated one. He reminded me that the Plaintiff's case must stand or fall by how it is pleaded. Mr Ng says that the Plaintiff's case is an oral agreement and that the Written Agreement merely, on the Plaintiff's pleaded case, evidenced that prior oral agreement, whereupon, so says Mr Ng, it cannot be relied upon on its terms on this application since the Defence denies the prior oral agreement.

12. Mr Ng acknowledged that there were dealings between the parties prior to 9th October 1997 and does not challenge the contractual nature and validity of the Written Agreement, which, however, he says, merely dealt with the mechanics for the payment of the referral fee and that really came at the tail end of the transaction. It would be wrong, says Mr Ng, and contrary to commercial reality to look only at the Written Agreement, and I was urged to confine the Plaintiff's case in the way Mr Ng suggests.

13. Despite the ingenuity of the argument, I did not feel able to accede to it. The Written Agreement is freestanding on its face. The defence asserts that it is the only agreement between the parties. It contains contractual terms, duties and obligations, none of which are said to be unenforceable qua contractual terms.

14. In my judgment, I would be going against commercial reality if I were to disregard such an agreement. It would also be an unacceptable and excessively literal and formalistic approach to the Plaintiff's pleadings to read it in such a way so as to consign the Written Agreement to the wayside. This defence, therefore, fails.

The 2nd Head of Defence

15. As for the 2nd defence, that based on the lack of consideration, it seems to me that the Written Agreement sued on is supported by sufficient consideration. Clause 1 itself, which I have already set out, is sufficient consideration. By this clause the Plaintiff guaranteed that Nicekind would be able to be allotted 5 million shares. Further, pursuant to Clause 3, the Plaintiff paid a cheque of HK$1.5 million to Messrs Baker & McKenzie. This was all part of the same contract. In my judgment, on these short grounds, this defence also fails.

The 3rd Head of Defence

16. This is based on Nicekind's breach in failing to open a joint account with Goldman Sachs. Mr Chan's clear and concise argument is that, under Clause 4 of the agreement between the Plaintiff and the Defendant, the Defendant's payment obligation is not conditional upon the full performance by Nicekind of all its obligations under the First Nicekind Agreement. There is no express term to that effect and the conditions in law for implying such a term are not present.

17. Mr Chan argues that a term cannot be implied simply because it might be reasonable to do so. In any event, it is not reasonable to imply such a term. Under the agreement, the Plaintiff by Clause 1 guaranteed that Nicekind would be able to obtain 5 million shares. The Plaintiff does not guarantee that Nicekind would fully perform its agreement with the Defendant. To make the Plaintiff's right and entitlement to the HK$15 million conditional upon Nicekind's full performance of its agreement with the Defendant is to impose on the Plaintiff the obligation of guaranteeing the full performance of the agreement by Nicekind, an obligation which the Plaintiff had not undertaken. Mr Ng maintains an impressive argument to the contrary. His submissions are capably summarised in paragraphs 24-28 of his skeleton argument, for which I am grateful. Suffice it to say, as a matter of construction of the Written Agreement, I am of the view that Mr Chan's submissions are correct and this defence likewise fails.

The 4th Head of Defence

18. This defence is based on what Mr Ng has referred to as the 'double agency point'.

19. Mr Ng relies on Mr Tai's evidence to the effect that Mr Yim, or the Plaintiff, or both of them, was the agent of Nicekind. He accepts that Mr Tai was aware of this, but claims that the Plaintiff is nonetheless disentitled to claim the referral fee from the Defendant since the Plaintiff did not disclose Nicekind's profit sharing agreement with the Plaintiff at that time. In fact, I note that the profit sharing agreement is between Nicekind and Wan Yu Industries (Groups) Ltd. ("Wan Yu"), a company with which Mr Yim appears to have had some connection, and not with Mr Yim. Mr Ng referred to a number of cases dealing with estate agents and their entitlement to claim commission from the vendor and purchaser and submitted that this disentitlement to commission occurs whenever there is a conflict of interest. He relies on the Plaintiff's pleaded case that the Defendant agreed to engage the Plaintiff who agreed to introduce Nicekind to the Defendant and then went on to submit that the Plaintiff was therefore also the Defendant's agent.

20. Once again, the matter was attractively put, but even if the Plaintiff was in some respects Nicekind's agent, any profit sharing arrangement is between Nicekind and Wan Yu, and there is simply insufficient material before me to link Wan Yu to the Plaintiff so that they can somehow be identified. I have also not been able to see how the Plaintiff was also the Defendant's agent and what fiduciary duties, mentioned in passing by Mr Ng in oral argument, it owed to the Defendant and where lay the conflict.

21. The Plaintiff's role, taking the Defendant's evidence, was to introduce the Defendant to Nicekind. This it did. If the Plaintiff was Nicekind's agent, the Defendant certainly knew about it and appeared to have entered into a whole series of agreements without demur. It can hardly complain now, particularly since I have the greatest difficulty in seeing how it can be said that the Plaintiff owed any fiduciary duties to the Defendant and what they were and how it may have been in breach of them or where the conflict lay. This double-agency defence therefore fails as well.

The 5th Head of Defence

22. This is based on an allegation of a breach of the Securities Ordinance, Cap.333 of the Laws of Hong Kong. Mr Ng says that neither Mr Yim nor the Plaintiff was a registered dealer under the Securities Ordinance and both of them were prohibited from carrying on business in Hong Kong of dealing in securities. He refers to a number of definitions in the Securities Ordinance. I can take them from Mr Ng's skeleton as follows :-

"a. 'Business', in relation to a dealer, means the business of dealing in securities: s.2 SO.

b. 'Dealing in securities' in relation to any person (whether acting as principal or agent) subject to section 3(1), means making or offering to make an agreement with any other person, or inducing or attempting to induce any other person to enter into or offer to enter into any agreement.

(a) for or with a view to acquiring, disposing of, subscribing for or underwriting securities;

(b) the purpose or pretended purpose of which is to secure a profit to any of the parties from the yield of securities or by reference to fluctuations in the value of securities : s 2 SO."

Mr Ng also referred to s.48 of the Ordinance which reads :-

"c. A person (whether an individual or a body corporate) shall not carry on a business in Hong Kong of dealing in securities or hold himself out as carrying on such a business, unless he is registered as a dealer. Any person who knowingly acts in contravention of the section is guilty of an offence and liable to a fine."

23. Here, Mr Ng submits that the Plaintiff has dealt in securities either by making an agreement with the Defendant with a view to acquiring securities for the purpose of profit, or, alternatively, by inducing or attempting to induce the Defendant to enter into such an agreement. Mr Ng says that the question is whether the Plaintiff did so in the course of carrying on the business of dealing in securities.

24. He referred me to a number of authorities on the meaning of the words "carrying on business". They occur in many different contexts and I agree with him that there is no single definition of the words which would suit all purposes. Ultimately, as Lord Wright MR said in Re a Debtor, No.490 of 1935, [1936] 1 Ch 237 at 240, it is a question in each case of fact and degree. Mr Ng also read to me passages from Re Abenheim ex p. Abenheim [1913] 109 LT 219 at 220, a bankruptcy case; Cornelius v Philips [1918] AC 199 at 215, 217, a case dealing with the money lending legislation; and American Leaf Co v Director General [1979] AC 676 at 684, a tax case; and Morgan Grenfell & Company v Welwyn Hatfield DC [1995] 1 All ER 1 at 13, a case dealing with interest swaps.

25. It is fair to say that all these cases turn on their own facts and issues and statutory provision. They involve, as I said, income tax, partnership, bankruptcy and gaming legislation.

26. In the present case, Mr Ng says that in considering this issue of "carrying on business", the Plaintiff's role in the entire transaction regarding the acquisition of 5 million shares in China Telecom, of which the Agreement formed part, should be examined. He further submits that the following factors would support the inference that what the Plaintiff did was in the course of carrying on a business.

27. First, he says, this is a serious commercial transaction involving large sums of money and the services of professionals, legal and financial. The amount of funding that the Defendant had to put up was some $59 million. The referral fee that the Plaintiff claims to be entitled to from the Defendant was $15 million. In addition, Mr Yim has entered into a separate agreement with Nicekind and would stand to share in Nicekind's profits from the acquisition of the shares on a 40/60 basis. I have already mentioned that that agreement was in fact entered into between Nicekind and Wan Yu although Mr Yim appears to have had some connection with Wan Yu. Mr Ng goes on to say, from the point of view that every party to the transaction, including the Plaintiff and Mr Yim, the transaction is a business transaction which could bring in significant revenue.

28. Secondly, Mr Ng says the Plaintiff and the Defendant did not know each other prior to the present transaction. They were introduced by a Mr Wong of Sunriver Technology Company Limited for the purpose of bringing about this transaction. The Plaintiff and Mr Yim in turn brought the Defendant and Nicekind together and participated in the negotiations of the terms of the First Nicekind Agreement relating to the mechanics of the acquisition. This was not a one-off social or casual arrangement with friends. It was a commercial venture to every party who was involved in it.

29. Thirdly, Mr Ng says that unless the Plaintiff was a registered non-profit making company, it must have been incorporated for the purpose of making profit. He referred to observations by Lord Diplock in American Leaf Co v Director General [1979] AC 676 at 684 to the effect that :-

"where a company had been incorporated for the purpose of making profits, any gainful use to which it put its assets prima facie amounted to the carrying on of a business."

30. These observations were made in the context of a tax appeal from Malaysia where the Judicial Committee was considering whether activities in connection with the letting of premises by a company amounted to a business. Mr Ng says further that having regard to the commercial reality of the transaction, it is at least highly arguable that the Plaintiff was carrying on the business of dealing in securities when it entered into the Agreement.

31. The effect of s.48 of the Securities Ordinance on this argument is that the Plaintiff and Mr Yim, as unregistered dealers, were prohibited from "dealing in securities". The entering into the Agreement by the Plaintiff is an act of "dealing in securities" as defined in s.2 of the Ordinance and is therefore an illegal act. The Agreement is, for that reason, unenforceable. Mr Ng referred to Johnson Stokes & Master v Boucher [1989] 1 HKLR 219 which concerned a firm of solicitors not registered under the Societies Ordinance as it was then required to do, and Victoria Daylesford Syndicate Ltd v Dott [1905] 2 Ch 624 at 629-630, which concerned an unregistered moneylender.

32. Mr Chan's succinct retort can be summarised as follows :-

33. He says that under the agreement all that the Plaintiff did was (a) to guarantee to the Defendant that Nicekind would be able to be allotted the 5 million shares; (b) to introduce Nicekind to the Defendant; and (c) to pay a cheque to Messrs Baker & McKenzie.

34. Mr Chan said that the guarantee does not constitute a dealing in securities. Neither does the introduction of a company, or a person, who was able to obtain securities for the Defendant. These do not amount to acts of dealing in securities. And the same applies to the delivery of a cheque to Messrs Baker & McKenzie. That could not constitute a dealing in securities either. Hence the Plaintiff does not deal with securities in entering into this agreement with the Defendant.

35. Mr Chan urged me to concentrate on the Written Agreement and, if necessary, the First Nicekind Agreement. His submission was that nothing in the Written Agreement amounts to securities dealing and that it was not, on its terms, conditional on the Defendant entering into the First Nicekind Agreement.

36. He made the further point that on either limb of Mr Ng's submissions, summarised in paragraph 19 of Mr Ng's skeleton and referred to earlier in this judgment, there is simply nothing, even in the First Nicekind Agreement, that says the Defendant acquires or should acquire securities from Nicekind which was the only entity acquiring the securities and the Defendant was simply to pay for them. Mr Chan made the valid point that if the parties wanted to draft and structure their agreement in a certain way, it is not for a Court to re-word it.

37. In any event, said Mr Chan, even if by entering into the agreement with the Defendant, the Plaintiff was dealing in securities and the Plaintiff was not a registered dealer of securities, it does not mean that the contract between the Plaintiff and the Defendant was unenforceable. There is no provision in the Securities Ordinance that such contracts entered into between non-registered dealers of securities and others for the dealing in securities would be unenforceable. So that even if, said Mr Chan, there is illegality involved, the Defendant would still be liable and he referred to Richardson Greenshields of Canada (Pacific) Ltd. v Chow Paul [1989] 1 HKC 261.

38. I should note an earlier point made by Mr Chan that the only evidence on this issue is Mr Tai's bare assertion in paragraph 28 of his affirmation that neither the Plaintiff nor Mr Yim was a registered dealer and Mr Chan says that there is simply no admissible evidence that they were not. I note the force of Mr Chan's criticisms, but I would not rule against the Defendant on this point of evidence. Inadequately, perhaps, but the point has been raised and I must deal with it.

39. I was initially somewhat troubled by this 5th Head of Defence. Having given the wide-ranging submissions some more consideration, it seems to me that, despite his efforts, Mr Ng was not able to persuade me that what the Plaintiff did fell within the statutory definition of "dealing in securities". I agree with Mr Chan's submissions and the reasons he gave that it did not.

40. On the point of "carrying on a business in Hong Kong of dealing in securities", I note Mr Ng's submission, which I accept, that he could not seek and was not seeking to draw any factual analogy with the facts in the authorities to which he referred. They are all clearly distinguishable on the facts and the legislation under consideration. In my judgment, the Defendant fails on this point as well since on the evidence, the most which can be said against the Plaintiff is that it was involved, perhaps indirectly, in one transaction which has none of the flavour usually associated with a business or with "carrying on a business", to use the words of s.48 of the Securities Ordinance.

41. The authorities support the view that, in general, a degree of continuity, is to be expected before an entity can be said to be carrying on a business. Words and phrases found in the authorities such as frequency, systematic operations, series of transactions would support his requirement, even if, depending on the facts and, perhaps, legislation under consideration, a one-off transaction may amount to the carrying on of a business. The evidence in this case comes nowhere near enough to satisfy the tests or guidelines laid down in the authorities referred to by Mr Ng.

42. I also agree with Mr Chan that even if the Plaintiff had dealt in securities and it was not a securities dealer, it does not mean that the agreement between the Plaintiff and the Defendant is unenforceable.

43. The cases referred to by Mr Ng I have considered. They are distinguishable and policy considerations behind different statutes do not necessary lead to the same or similar result of unenforceability on any failure to obtain a necessary licence. The authority which I found helpful and apposite is the judgment of Bokhary J. (as he then was) in Richardson Greenshields of Canada (Pacific) Ltd. v Chow Paul (supra). That case dealt not with an unregistered dealer, but with an unregistered representative of a dealer and it was the representative who transacted business with the client who raised the defence of illegality and unenforceability. Bokhary J. would have none of that. His observations at pp.268-270 are particularly cogent. I quote, selectively, from those passages :-

"The object of the contract in the present case, which is dealing in securities, is not illegal. What happened was that in the carrying out of that object, including the signing of a standard form agreement to govern the rights and obligations of broker and customer - unregistered persons functioned in capacities in which it is laid down by statute that unregistered persons should not function - and in which it is, by statute, made punishable for such persons to function. In my judgment, the question in such a case is whether or not the statute, on its true construction, renders rights acquired and obligations incurred pursuant to the contract unenforceable." (p 268E)

His Lordship should then referred to the decision of the High Court of Australia in Yango Pastoral Co v First Chicago Australia Ltd [1978] 139 CLR 410. His Lordship continued at p 267C :-

"It is not lightly to be inferred that the legislature intended sanctions beyond the penalties it laid down. Within the range of punishment laid down, a sentencing court can tailor its sentence to the circumstances of each case. But a construction which renders contracts unenforceable amounts to a very blunt instrument. On occasions it could have consequence of unwarranted seriousness."

After quoting a passage from Murphy J. in Yango Pastoral, Bokhary J. went on :-

"... When the legislature sets out to regulate an industry, enacting rules and penalties by which to enforce them, the courts must be very careful not to adopt an overzealous construction of the enactment, for that may have highly counter-productive consequences, possibly including insolvency within the industry and all the ills that follow in its wake.

There is another factor which tends to point away from unenforceability in the present case. As pointed out in para 1145 of Chitty on Contracts (supra) : 'Statutes often provide expressly for the civil consequences of breach of their provisions and this is by far the preferable solution.' This course is not alien to the Securities Ordinance (Cap 333)."

Bokhary J. then referred to a number of those sections and their effect. On page 270, his Lordship continued :-

"The fact that a statute expressly provides for civil consequences in regard to some breaches tends to suggest that the legislature did not intend civil consequences in regard to breaches for which no such consequences are expressly provided. This is the view taken by the Court of Appeal in Cheng Ah Hung Bernard v Chintung Commodities Ltd [1985] 1 HKC 318, which deals with the Commodities Exchange (Prohibition) Ordinance (Cap 82) and the Commodities Trading Ordinance (Cap 250). It is also the view taken by Duffy J in James Capel (Far East) Ltd v So (A3171/87, 31 May 1988, unreported), which deals with the Securities Ordinance (Cap 333). Lord Justice Sachs took the same view in Shaw v Groom (supra) at p 525E, where he uses the illuminating formula, 'any intended result on civil liabilities'."

44. In all the circumstances, therefore, despite the general excellence of Mr Ng's argument for the Defendant, I find that there are no triable issues raised on any of the defences. I therefore accede to the Plaintiff's application for summary judgment and make an order nisi for costs in its favour, with certificate for two counsel.

45. I must mention that I have been greatly assisted by all Counsel involved in this case. They have made my task immeasurably less difficult.