CHEN YUNG NGAI KENNETH AND ANOTHER v. CHONG HING BANK LTD AND OTHERS

HCB 3819/2011

[2023] HKCFI 826

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO 3819 OF 2011

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Re: HO YUK WAH DAVID (the “Discharged Bankrupt”)

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D E C I S I O N

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A.  BACKGROUND

1.  This is an application by the Trustees of the estate of the Discharged Bankrupt, David Ho, for discovery against 6 banks (“the Banks”) under section 29 of the Bankruptcy Ordinance, Cap 6 (“BO”). The Trustees apply for production of bank account opening documents and transaction records concerning various entities and persons who are suspected to be the nominees of David Ho (“the Production Application”).

2.  David Ho was formerly a partner in a law firm and a businessman involved in substantial projects in the Mainland. He founded Asia-Pac Infrastructure Development Limited (“APIDL”) in 1996.

3.  On 2 August 2011, a bankruptcy order was made on David Ho’s own petition. David Ho had debts of over HK$160 million but declared negligible assets. After investigation, he was found to be operating a complex scheme using offshore companies and nominees to conceal his assets, carry on his business ventures and litigation, and pay his personal and family expenses. Through his nominees, David Ho has diverted significant amount of funds out of reach of his creditors.

4.  Many legal actions were brought by or against his nominees. Among them, 2 are of importance for the present purpose, namely HCA 971/2012 (“the 971 Action”) and HCA 806/2006 (“the 806 Action”).

5.  The judgment in the 971 Action was summarised in Chen Yung Ngai Kenneth v Hugill & Ip (a firm) [2023] HKCFI 151 at §§16-28. In gist:

(1)  The following entities were held to be his nominees and/or beneficially owned by David Ho: Gladius Limited, Ontrade Properties Limited, King Ocean Development Inc, Asia-Pac Group Investment Limited, APIDL, Grand Asia Capital Services Limited, Pacific Shine Limited, and Ferdinan Limited.

(2)  A Mr Yu Yang was found to be the shareholder and director of many of the aforementioned companies.

(3)  A Ms Liu Shu was found to be the director of many of the aforementioned companies, including APIDL.

(4)  Yu Yang and Liu Shu were found to be David Ho’s nominees. Yu Yang is his former brother-in-law, while Liu Shu was an employee of the Asia-Pac Group and an alleged colleague of David Ho. Yu Yang was closely associated with Liu Shu.

(5)  David Ho’s purported sale of APIDL in 2004 was a sham and David Ho has always beneficially owned APIDL.

6.  There was no appeal from the judgment, but the liquidators of APIDL resisted the Trustees’ investigation despite the finding that APIDL was held beneficially by David Ho.

7.  The 806 Action is an ongoing action. In gist, APIDL and 3 other companies in the Asia-Pac Group (controlled by David Ho) sue their former legal advisers for negligence and breach of duty.

8.  On 10 April 2013, APIDL was put into creditors’ voluntary liquidation. Mr Alan Tang and Ms Anita Hou were appointed as liquidators (“the Liquidators”). The Liquidators decided to continue the 806 Action.

9.  On 2 August 2019, David Ho was discharged from bankruptcy.

10.  The Trustees have always suspected that David Ho was involved in funding arrangements for various actions (eg the 806 Action), which may result in funds available for David Ho’s estate if the litigation was successful.

11.  In Re Ho Yuk Wah David (No. 5) [2022] HKCA 110 (“the 83 Judgment”), the Court of Appeal allowed a section 29 BO application in respect of the 806 Action. At §17.2, the Court of Appeal commented that:

“17.2 … First, unlike unrelated funders, [David Ho] would have an intimate knowledge of the affairs of [APIDL], and consequently the merits of the litigation. More importantly, the claim of [APIDL] in the 806 Action was for a substantial amount: US$322,000,000 plus HK$62,000,000. The Liquidators did not adduce any evidence before this court of the total amount of creditors’ claims against [APIDL]. If [APIDL] succeeded in the litigation, any surplus funds would go to the shareholder. As [David Ho] has retained the ownership of the shares in [APIDL], he has even more incentive to fund this litigation so as to benefit from any surplus funds (which, until the finding of the sham sale in the Judgment in the 971 Action, would not have fallen into his estate in bankruptcy). This should be considered in conjunction with his record of litigation funding especially in co-operation with [Mr Alan Tang].”

12.  The Liquidators claim that the 806 Action received funding from alleged third parties upon APIDL’s liquidation, who were not connected to David Ho. They further claim that there was no litigation funding arrangement for the 971 Action. However, since David Ho was found to have beneficially owned APIDL all along, the Trustees suspect that David Ho has been substantively involved in the funding arrangements for the 806 Action. The Trustees also suspect that David Ho has funded other proceedings in which Mr Alan Tang was involved as liquidator or trustee in bankruptcy, including: HCA 4188/2002 (“the CWT Case”); and HCA 345/2001 (“the LSF Case”) which are not relevant for present purposes.

13.  In the 971 Action, Yu Yang produced a witness statement stating that there was an agreement between David Ho and him about the proceeds obtained from the 806 Action. After covering the investment capital, the proceeds were to be distributed in a 60/40 split between Yu Yang/his sister and David Ho’s family members. Yu Yang stated that huge amount of assets were invested into APIDL for litigation. All returns went to David Ho or his family, or “reinvested” into ongoing actions such as the CWT Case and the LSF Case.

14.  As beneficial owner of APIDL, David Ho would be entitled to surplus funds of APIDL. If APIDL succeeds in the 806 Action, any surplus funds would go to the shareholder. David Ho would have even more incentive to fund the 806 Action.

15.  The Production Application before me now is a sequel to the production order made against the Liquidators under the 83 Judgment. The aim is to further investigate and identify the entities or individuals who purportedly funded APIDL in the 806 Action.

16.  Two issues arise:

(1)  Whether the documents sought should in principle be produced to the Trustees (“the production issue”)?

(2)  Whether the court should grant an order without joining or giving notice to the entities or individuals whose accounts are to be inspected (“the notice issue”)?

B.  THE PRODUCTION ISSUE

B1.  Legal Principles

17.  Section 29 BO provides (where material) that:

“(1) The court may, on the application of the … trustee, at any time after a bankruptcy order has been made against a bankrupt summon before it … any person whom the court may deem capable of giving information respecting the bankrupt, his dealings or property, and the court may require any such person to produce any documents in his custody or power relating to the bankrupt, his dealings or property.”

18.  The applicable principles have been set out in Re Ho Yuk Wah David (No. 5) [2020] 2 HKLRD 608, §§22 and 31, Au-Yeung J; confirmed in the 83 Judgment, §12. In gist, the Trustees must satisfy the court that the information or documents “relate to the bankrupt, his dealings or property”; the provision of information or documents is reasonably required for them to carry out the Trustees’ functions; and the respondents are able to provide such information or documents. The standard of proof is reasonable suspicion: the 83 Judgment, §14.

19.  Confidentiality is no bar to an order for disclosure in a section 29 application: The Joint and Several Trustees in Bankruptcy of Nanik Dayaram (also known as Nanik Dayaram Hathiramani) v Lee Pei Yin, HCB 7651/2011, 6 November 2015, §62, Ng J.

20.  The same principles apply even when a bankrupt is discharged, because the property vested in the Official Receiver and Trustees does not re-vest in the bankrupt upon discharge: Re Lee Siu Fung Siegfried [2017] 1 HKLRD 1155, §§25-27, G Lam J (as he then was).

B2.  Application of the legal principles

21.  The bank accounts of the following entities or individuals are in issue:

Respondent Banks	Names of the Entities / Individuals as holders	Accounts
R1	APIDL	Account 1
R2	Guan Qiaoling / Guan Qiao Ling	Account 2
	Zhao Jian Hong	Account 3
	Shinewing Specialist Advisory Services Limited	Account 4
R3	Sun Lihua / Sun Li Hua / Sunlihua	Account 5
	Han Liang	Account 6
R4	Sun Lihua / Sun Li Hua / Sunlihua	Account 7
R5	Ma Yun Ru	Account 8
R6	Bryne & Co.	Account 9

22.  Regarding APIDL (Account 1), the production order sought by the Trustees should plainly be granted in light of the 83 Judgment and the 971 Action. See §11 and 5(a) above.

23.  Regarding the bank accounts of the other entities and individuals, the starting point for analyses is the documents disclosed by the Liquidators as a result of the 83 Judgment. They reveal that, amongst others, two BVI companies had funded the 806 Action by injecting funds into APIDL:

(1)  True Treasure Enterprise Limited (“True Treasure”)[1]; and

(2)  Aim Best Group Limited (“Aim Best”), allegedly owned by one of the Liquidators.

24.  For the following reasons, the Trustees reasonably suspect that True Treasure and Aim Best are merely corporate vehicles for David Ho to fund the 806 Action or to aid him in the transfer and concealment of his assets post-bankruptcy.

B3.  True Treasure (Accounts 2-3, 5-8)

25.  In relation to True Treasure, the Trustees submit, and I accept, the following points:

(1)  True Treasure executed 11 initial funding agreements with APIDL which covered both the 806 Action and 971 Action. However, the payments purportedly made by True Treasure were in fact injected into APIDL through the personal accounts of the following individuals (whose bank accounts are the subject matter of the Production Application):

Date	Bank	Name	Relevant Funding Agreement	Amount (HK$)
28 May 2013	R3	Sun Li Hua	Initial Funding Agreement	50,000
30 September 2013	R4	Sun Li Hua	Supplemental Initial Funding Agreement	45,000
17 January 2014	R2	Guan Qiao Ling	2nd Supplemental Initial Funding Agreement	60,000
28 February 2014	R2	Zhao Jian Hong	3rd Supplemental Initial Funding Agreement	234,000
16 May 2014	R5	Ma Yun Ru	4th Supplemental Initial Funding Agreement	240,000
7 August 2014	R3	Han Liang	5th Supplemental Initial Funding Agreement	70,000
21 August 2014	R3	Sun Li Hua	6th Supplemental Initial Funding Agreement	45,000

(2)  The 3^rd Supplemental Initial Funding Agreement clearly showed that True Treasure had also funded the 971 Action. §5 above describes the nature of the action. There was no reason for True Treasure, as a genuine third party or a creditor of APIDL, to fund the action. The only explanation is that True Treasure was David Ho’s nominee, because David Ho as the ultimate beneficiary of APIDL would be affected by an adverse outcome in the 971 Action.

(3)  Ms Sun Bo has been the sole shareholder and director of True Treasure since its incorporation on 27 June 2012. However, the name “Sun Bo” has never appeared in the documents relating to True Treasure. Instead, all correspondence and injections of funds into APIDL have been handled by other individuals (e.g. Sun Li Hua and Liu Shu) related to David Ho.

(4)  Ms Sun Bo is the shareholder of Luck Creation Limited, which was the shareholder and director of Grassmere Services Limited (“Grassmere”). Grassmere at one point was wholly owned by Yu Yang. Grassmere is yet another alleged nominee of David Ho in HCA 2587/2017.

(5)  Ms Sun Li Hua has represented True Treasure in multiple occasions. In one of such occasions, on 2 February 2015, she sent an email to the Liquidators via the email address “alixxxxxx@163.com”. The same email address has been used by Beijing Guan Yu Tian Hua Property Consulting Co, Ltd. (“GYTH”), which was controlled by Yu Yang and related to David Ho.

(6)  Liu Shu has also represented True Treasure in some email correspondence with APIDL.

26.  In addition, the Trustees’ suspicion that Sun Li Hua, Guan Qiao Ling and Ma Yun Ru were the nominees of David Ho is buttressed by the following evidence:

(1)  Sun Li Hua displayed her familiarity with David Ho’s transactions, background and personal life in HCA 2587/2017. She was the only signatory of the defence in HCA 2587/2017, and was once referred to as David Ho’s “UK Relatives and Friends” therein. Further, Sun Li Hua and Liu Shu were named in Grassmere’s corporate filings and records of annual return payments to the BVI government in 2011. Sun Li Hua was also the sole shareholder of Global Alliance (Beijing) Property Leasing Co Ltd (“Global Alliance”), which shared the same official registered address with Beijing Jue Xian Hang Consulting Co., Ltd (“JXH”). Both Global Alliance and JXH were controlled by Yu Yang, and had the same PRC legal representative.

(2)  Guan Qiao Ling has represented GYTH on various occasions, including as a member of the Committee of Inspection of APIDL. She was named as a creditor of APIDL but no evidence of the debts owed to her could be found after the Trustees’ investigation. She had remitted funds on behalf of True Treasure to APIDL on 17 January 2014.

(3)  In Yu Yang’s witness statement for the 971 Action, Sun Li Hua, Guan Qiao Ling and Ma Yun Ru were named as the employees of Yu Yang. They had acted on the instructions of Yu Yang to transfer funds from Mainland to David Ho’s secretaries in Hong Kong in 2010 relating to bogus “entrusted companies of Yu Yang”. This is supported by remittance records.

27.  There are thus reasonable grounds to suspect that the account holders of Accounts 2-3, 5-8 were nominees of David Ho.

B3.  Aim Best (Accounts 4 & 9)

28.  In relation to Aim Best, the Trustees submit, and I accept the following points:

(1)  Aim Best funded APIDL under an Urgent Interim Funding Agreement dated 22 February 2021 (“the UIFA”). That was just after the former funder, China New Investment Limited (“CNIL”), strangely terminated its funding arrangement with APIDL before the start of the 806 Action after providing HK$14 million. Aim Best was owned and managed by Mr Alan Tang, one of the liquidators of APIDL. Mr Alan Tang appeared to represent Aim Best when signing the UIFA[2], while Ms Anita Hou represented the Liquidators. This put Mr Alan Tang in a position where there was conflict of interests as a creditor and a liquidator.

(2)  It appears that not all the creditors were aware of the UIFA because the resolutions in writing were only agreed by Liu Shu and Guan Qiao Ling (on behalf of GYTH) but not Sun Li Hua (on behalf of True Treasure).

(3)  The Committee of Inspection agreed that the incentive award made to Aim Best was neither excessive nor commercially reasonable. The Committee also agreed that given the nature and size of the 806 Action, it was practically impossible to find any genuine third party funder under the then global depressing economic conditions.

(4)  The payments purportedly made by Aim Best were in fact injected into APIDL through the accounts of the following entities (whose bank accounts are the subject matter of the Production Application):

Date	Bank	Name	Amount (HK$)
22 January 2021	R2	Shinewing Specialist Advisory Services Limited	150,000
9 March 2021	R6	Bryne & Co.	690,000
24 March 2021	R6	Bryne & Co.	250,000

(5)  Shinewing Specialist Advisory Services Limited was the Liquidators’ company for carrying out their insolvency practice, whereas Bryne & Co. was Mr Alan Tang’s partnership with Ms Alison Wong. This is borne out by the affirmations of Tam Cheuk Hin Joey and Lai Kwai Fa both filed on 28 December 2022.

(6)  Clause 5 of the UIFA states that Aim Best ranked higher in priority than all other funders without addressing True Treasure and CNIL’s interests.

29.  There are thus reasonable grounds to suspect that Aim Best, Shinewing Specialist Advisory Services Limited and Bryne & Co. are merely channelling funds from David Ho to fund the 806 Action or that they are nominees David Ho.

30.  Aim Best paid far more than the fixed counsel fees, because the UIFA states that Aim Best should cover all costs of ONC Lawyers without specifying an amount. No reasonable funder would subject itself to such “unlimited liability”.

31.  Lastly, the Trustees’ suspicion is also supported by the following conduct of the Liquidators:

(1)  The disclosure regarding the funding arrangements was highly irregular. The Liquidators did not provide any payment records for the 7^th to 10^th Supplemental Initial Funding Agreements. Further, the full remittance advice in relation to the 2^nd Supplemental Initial Funding Agreement had not been provided until the Trustees’ solicitors raised the issue with the Liquidators. Even when the Liquidators supplied the relevant documents, certain crucial details as to the remittances were missing or redacted and the Trustees had to request for better copies.

(2)  Ms Anita Hou failed to disclose the funding arrangement between APIDL and Aim Best in her affirmation dated 25 February 2022 (after the 83 Judgment was handed down). The arrangement came to light only until 14 June 2022 when it was mentioned by Ms Anita Hou in her letter.

(3)  Mr Alan Tang put himself in a position of conflict with the funding of Aim Best in the 806 Action.

(4)  David Ho has a record of funding litigation in which Mr Alan Tang was involved as liquidator or trustee in bankruptcy: See §11 above. Mr Alan Tang has a history of unreasonably resisting section 29 applications, which was adversely commented on by To J in Ip Pui Lam Arthur v Alan Tang, HCMP 450/2016, 18 October 2016, §88.

32.  In view of §§25-31 above, I am satisfied that the Trustees have demonstrated reasonable grounds for suspecting that the litigation funding originated from David Ho, channelled through the bank accounts of his nominees, and was eventually injected into APIDL. It is entirely appropriate for the Trustees to seek information from the nominees or suspected nominees’ Banks in order for them to consider what actions may be taken for the benefit of the creditors. I give great weight to the views of the Trustees.

C.  THE NOTICE ISSUE

33.  The Trustees submit that it is unnecessary to give notice to or to join the relevant entities or individuals holding the bank accounts for 3 reasons.

(1)  There is no such express statutory requirement.

(2)  Breach of confidentiality is merely one of the various factors that the court should take note of, analogous to section 21 of the Evidence Ordinance, Cap 8 (“EO”).

(3)  On the facts this requirement is both impracticable and impossible to achieve. Amongst the 5 individuals, the Trustees only have the address of Sun Li Hua, who resides in the Mainland.

34.  With respect, I disagree. The analogy between section 21 EO and section 29 BO is inapt. Whilst both sections do not expressly require notice to the account holder, under section 21 EO, the test is one of relevance: See Chan Wai Sun v Law Kai Andrew [2003] 3 HKLRD 954, §10, Chu J (as she then was). Since relevance is established, the applicant deserves a more robust approach of the court as set out in Tiger Resort Asia Ltd v Kazuo Okada & Ors [2018] HKCFI 472, DHCJ K Yeung SC (as he then was). Any insistence that service or notice should be a prerequisite for an application under section 21 EO would impose unjustified fetters upon the court’s discretion that can be exercised (§22). In contrast, under section 29 BO, the test is reasonable suspicion. The two sections are by nature different, with section 29 BO having a far lower standard of proof.

35.  In principle, the court’s power under section 29 BO is to be exercised in the same way as an application under the repealed section 221 of the Companies Ordinance and the now equivalent section 286B of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, Cap 32: Joint and Several Trustees of the Property of So Ching Wan v Assen Ltd (In Liquidation) [2020] HKCA 1081, §8.4. The English corresponding provisions (similar but not identical) are sections 236 and 366 of the Insolvency Act 1986. The issue on notice has been reviewed by the English courts.

36.  In, Marcel v Commissioner of Police of the Metropolis [1992] Ch. 225, the police had seized documents, under Part II of the Police and Criminal Evidence Act 1984, which might be relevant to a criminal investigation. All the members of the Court of Appeal expressed the view that where a subpoena duces tecum was served on the police calling for seized documents the police should inform the owner of the documents about the subpoena, in order to give him the opportunity of raising an objection.

37.  Then came Morris v Director of the Serious Fraud Office [1993] Ch. 372, in which the liquidators of B.C.C.I. sought under section 236 to obtain documents which its auditors had delivered to the Serious Fraud Office (“the SFO”) under section 2(3) of the Criminal Justice Act 1987. Sir Donald Nicholls V.-C. held that the SFO had no express or implied power to make voluntary disclosure of the documents to the liquidators. Sir Donald Nicholls V.-C. then turned to section 236 and held at pp. 382-383:

“…When the documents whose production is sought belong to or relate to the affairs of a third party, in principle it must be right that the court should also take into account any prejudice the third party may suffer if production is ordered. By a ‘third party’ I mean a person other than the person who has possession or control of the documents. Otherwise the position would be that a liquidator would be in a better position by bringing an application under section 236 against an agent of a third party than if he had made the application directly against the third party. That cannot be right, and I can see nothing in the legislative scheme of which section 236 is part which would lead to that conclusion. Under the section the court has an unfettered discretion. There is no reason why the court should have to wear blinkers when exercising this discretion and be unable to have regard to the interests of a third party who would be adversely affected by an order to produce documents…

In a broad sense … there is a public interest in seeing that [liquidators or trustees in bankruptcy] have the assistance of those who were involved in running a company’s business or had dealings with the company… [but] this head of public interest does not necessitate or justify refusing to afford to those whose documents have been seized an opportunity to advance any proper objections they may have to the court making a section 236 order regarding the documents in question.”

38.  Sir Donald Nicholls V.-C. referred to Marcel as a “compelling analogy”, and summed up the position at p. 385:

“…in the ordinary way when an application is made or proposed to be made against the SFO for an order under section 236 regarding documents acquired by the office under compulsory powers, the third party from whom the documents were obtained should be notified of the application or proposed application. He should be told of the SFO's attitude to the production sought, and asked whether he objects to an order being made. If his consent is not forthcoming, steps should be taken to join him as a respondent to the application. This should be the normal course. There will be exceptional cases. For instance, there may be cases where notice to a third party of the [liquidator or trustee’s] application might seriously prejudice the object the [liquidator or trustee] is seeking to achieve in existing or proposed proceedings; or a third party may not be traceable; or the documents may be needed as a matter of dire emergency. This is not intended to be a comprehensive list. There may be cases where for other reasons it is not appropriate or practicable to follow the ordinary route. In such exceptional cases, if it is just to do so the court may make an order under section 236 in the exercise of its discretion even though the third party had not been notified.” (emphasis added)

39.  These principles were applied by Lightman J in In re Murjani [1996] 1 W.L.R. 1498, pp 1510H-1511E. There the trustee in bankruptcy applied for a production order against two solicitors believed to be acting for the bankrupt’s wife and two alleged nominee companies (“the Clients”) under section 366 of the Insolvency Act 1986. The trustee had no other information concerning the Clients. Lightman J held that non-joinder of the Clients as respondents could be justified. The solicitors and Clients had taken all steps to render the clients untraceable, and it was obvious that the Clients would learn of the orders from the solicitors in ample time to challenge them before the solicitors would be compelled to comply with them.

40.  In Soden & Anor v Burns [1996] 1 W.L.R. 1512, A and B were public limited companies but went into administration. Inspectors appointed under section 432 of the Companies Act 1985 to investigate A’s collapse took evidence from 112 witnesses, including directors and witnesses from the merchant bank, the strategy consultants and both auditors. The administrators of B applied for an order under section 236 of the Insolvency Act 1986 for disclosure of the transcripts of evidence of 53 of those witnesses. The Secretary of State refused to disclose that evidence because the witnesses were not given prior notification and an opportunity to object.

41.  Robert Walker J (as he then was) firstly held that there was a qualified (not absolute) duty of confidence attaching to information obtained under compulsory powers, although the transcripts of evidence were owned by the Secretary of State. The duty of confidence was owed to the witness who gave evidence to the inspectors (at p. 1525 D-E).

42.  Secondly, citing Morris, Walker J held that such witness should be given the opportunity to raise objections to disclosure. He explicitly rejected the argument that those individual witnesses had no standing. At pp. 1528H-1529B:

“…these considerations about confidentiality, important though they are, are by no means the only factor that has to come into the balancing exercise. There is also possible oppression to individual witnesses who gave evidence to the inspectors, where those witnesses are involved in the civil litigation, in the administrators obtaining at this stage of the litigation transcripts which might not otherwise come to them until a later stage, or at all … the [Secretary of State] should not and cannot be expected to put before the court the individual concerns and objections of these witnesses, and that they must have a right to be heard themselves …”

43.  In Hong Kong, the same principles apply. In The Joint and Several Liquidators of Kong Wah Holdings Limited and Akai Holdings Limited v Herbert Tsoi & Partners & Anor (unreported, HCCW 49/2000, 19 November 2004), the liquidators sought documents under the repealed section 221 of the Companies Ordinance from a law firm in respect of its professional services rendered for 3 former subsidiaries of the Company. At §36, Kwan J, as she then was, held that the proper way to proceed was to join the subsidiaries as respondents, because no exceptional circumstances had been made out as to why the application should proceed in their absence.

44.  In Ip Pui Lam Authur v Hang Seng Bank Ltd & others, unreported, HCB 3819/2011, 30 June 2015, Lok J similarly held that “under ordinary circumstances it would be better that the person whose account is to be looked at should be served” (§38).

45.  It can be distilled from the above authorities that notice should be given to the bank account holders where an application is made under section 29 BO for disclosure of information of their bank accounts, unless the trustee can make out exceptional circumstances like urgency, serious prejudice to the trustee or that the trustee has made reasonable efforts to trace the account holders but to no avail.

46.  The Trustees make 2 further points:

(1)  That section 123 of BO provides that all notices and other documents for the service of which no special mode is directed may be sent by post to the last known address of the person to be served therewith. Ms Kong, counsel for the Trustees, submits that “last known address” is limited to an address within the jurisdiction of Hong Kong. Ms Kong has not provided any authority in support and I am unable to accept her submission. The confidentiality that governs a banker and customer relationship applies, wherever the customer is. Accordingly, the principle in §45 above should apply, whether or not the bank account holder has a last known address in Hong Kong or not.

(2)  The strict undertakings not to use the information obtained for any purpose other than for proceedings against David Ho may be sufficient safeguard to confidentiality such that the notice requirement can be dispensed with altogether. I am unable to agree. These strict undertakings are necessary to prevent abuse in the use of information obtained, but they do not come into play until the first hurdle (ie notice) is overcome.

47.  Here, the documents sought are of a historical nature. The application is not urgent. §45 should apply, save where otherwise specified in respect of a particular account.

D.  DISPOSITION

48.  The documents sought are those in connection with:

(1)  the opening of the bank account, including records identifying the beneficial owner and/or authorized signatory, and any changes to such information; and/or

(2)  records of all transactions in the account, including bank statements and correspondence in relation thereto.

49.  Those documents are reasonably necessary for the Trustees to carry out their functions in investigating the assets of the bankrupt. Those documents are plainly within the possession of the relevant Bank. The scope of disclosure sought is not unreasonable.

50.  In respect of the 1^st Respondent, Chong Hing Bank, notice of the application to APIDL is not required as it has already been found to be the nominee of David Ho in the 971 Action. The disclosure sought related to only one bank account, 258-1x-1xxx8x-4. The period covered is from opening of the account to the date of this order. The terms of the order are reasonable. Chong Hing Bank can produce within 14 days. I grant the order sought.

51.  In respect of the 2^nd Respondent, HSBC, the Trustees do not have the addresses of 2 account holders, Guan Qiao Ling and Zhao Jian Hong.

52.  To insist on service, (including substituted service) would prejudice the Trustees’ investigation. As the disclosure would cover account opening documents and identity of beneficial owner and authorized signatory, this would assist the Trustees in tracking down Guan and Zhao.

53.  The disclosure sought is in relation to all bank accounts in HSBC:

(1)  held in the name of Guan from the opening date of the account to the present; the opening date is chosen because Guan kept appearing in the bankruptcy period in the 971 Action and was likely to be connected to David Ho and Yu Yang;

(2)  held in the name Zhao for the period between 1 January 2013 and 31 December 2014; this period was chosen because the relevant remittance involving Zhao was on 28 February 2014; the Trustees want information one year before and after this date for the purpose of investigating if there was money from David Ho or his nominees.

54.  The terms of the order are reasonable. HSBC can produce the documents within 28 days. I grant the order sought.

55.  In respect of Shinewing, it is a Hong Kong company. The summons ought to be served on Shinewing before this Court would consider making the order sought.

56.  In respect of the 3^rd Respondent, China Merchants Bank Co Ltd, the Bank has confirmed that it does not have an account holder in the name of Sun Li Hua and no record of the relevant transaction on or around 28 May 2013. No order will thus be made with regard to her.

57.  Han Liang has not been served. The Bank also stated in its letter dated 10 November 2022 that it was not in a position to provide the information sought in the place of the remitting banks. I make no order with regard to the China Merchants Bank Co Ltd.

58.  In respect of the 4^th Respondent, CMB Wing Lung Bank Ltd, the Trustees initially sought a “provisional order” such that “upon the provision of further or other identification information and/or bank account number of Alison Sun Lihua (and/or Sun Li Hua/Sunlihua, Chinese name 孙立花)”, CMB Wing Lung Bank do produce the documents sought.

59.  With respect, this is putting the cart before the horse. An applicant should first satisfy the Court as to the identity of the account holder before the Court would even consider making an order.

60.  Subsequent to the hearing, the Trustees obtained more information pursuant to a discovery order in Ho Yuk Wa David (No. 5) [2020] 2 HKLRD 608, Au-Yeung J; and filed the 2^nd affirmation of Tam Cheuk Hin Joey on 13 March 2023. It shows Sun Li Hua’s Chinese passport number, 2 addresses in Beijing and an email address. That affirmation gives further information, which I accept, showing Sun Li Hua to likely be David Ho’s nominee giving detailed and thorough instructions on behalf of the 971 Defendants in the 971 Action when she was neither a director nor shareholder of any of the 971 Defendants. The draft order provided by the Trustees even provided the Chinese citizenship identification number of Sun Li Hua. Such particulars of Sun Li Hua can be provided to the Bank to search for the account of Sun when an order is made.

61.  Notice of the summons ought to be given to Sun Li Hua before the Court will consider making an order. Given that her address is out of jurisdiction, the application is adjourned with liberty to restore within 2 months for the Trustees to serve her.

62.  In respect of the 5^th Respondent, Bank of China (Hong Kong) Limited, Chungs Lawyers acting on its behalf stated in their letters dated 26 October, 31 October, 9 November and 13 December 2022 that, based on the only information currently available, ie name of the account holder Ma Yun Ru (or Ma Yun Ru, China), Ma does not maintain any bank account with the 5^th Respondent. I therefore make no order with regards to Bank of China.

63.  In respect of the 6^th respondent, Standard Chartered Bank (Hong Kong) Ltd, the account holder, Byrne & Co, is a registered partnership in Hong Kong. The summons ought to be served on Byrne & Co before this Court would consider making the order sought.

64.  The orders granting disclosure strike a balance between the Trustees’ reasonable requirements and the need to avoid making an order which is wholly unreasonable, unnecessary or oppressive to the Banks or the account holders concerned.

65.  For the reasons given,

(1)  There be an order in terms of §§1 and 2 of the draft order submitted on 3 January 2022 in respect of the 1^st Respondent, Chong Hing Bank (account of APIDL); the 2^nd Respondent, HSBC (accounts of Guan Qiao Ling and Zhao Jian Hong)

(2)  There be no order made in respect of the 3^rd and 5^th Respondents;

(3)  The applications in respect of

(a)  the 2^nd Respondent, HSBC (account of Shinewing);

(b)  the 4^th Respondent (account of Sun Li Hua) and

(c)  the 6^th Respondent (account of Byrne & Co),

are adjourned sine die with liberty to restore within 2 months to enable the Trustees to give notice to the account holders.

66.  I thank Ms Kong for her assistance.