THE JOINT & SEVERAL PROVIISONAL LIQUIDATORS OF CHINA MEDICAL TECHNOLOGIES, INC. v. SAMSON TSANG TAK YUNG

HCCW 435/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO 435 OF 2012

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D E C I S I O N
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Introduction

1. On 15 September 2014, I made orders under section 221 for the examination of, and production of documents by, Mr Samson Tsang Tak Yung (“Mr Tsang”).  The oral examination of Mr Tsang has since been set down for a total of five days, from 11 to 13 February and 13 to 14 April 2015 before Master Au-Yeung.  The relevant paragraphs of the order for production of documents are in Appendix 1 to this decision.  I adjourned paragraphs 2.4 and 3 of the Summons dated 27 February 2013, pursuant to which the order of 15 September 2014 was made, for argument, which took place before me on 6 January 2015.  Paragraphs 2.4 and 3 seek disclosure of:

“2.4  all documents in relation to the purported divorce between the Respondent and Ms Chui Sai Kuen (“Ms Chui”) including all documents filed with this Honourable Court in connection therewith, any relevant Orders issued by this Honourable Court including any decree nisi and/or decree absolute, and any settlement agreement entered into between the Respondent and Ms Chui.

3. The Respondent deliver up and produce to the Applicants within fourteen (14) days from the date of the Order made herein all of the documents in the Respondent’s possession, custody or control as set out below, whether in printed or documentary form or any other form including computer generated records and information inscribed on, stored in or otherwise fixed in a tangible medium or that are retrievable in a perceivable form, including those stored, in particular, on computer hard drive, floppy disk, compact disk, USB flash drive, memory card and/or zip storage device:

3.1 all bank statements for the past eight (8) years for all bank accounts wherever located which are held or were formerly held in the name of the Respondent whether individually or jointly with any other person or which are held or were formerly held in the name of any companies or other entities controlled or formerly controlled by the Respondent including, without limitation, Bright Field (China) Limited (“Bright Field”), Eastwood International Investment Limited (“Eastwood”) and Sino Merit Corporation Limited (“Sino Merit”); and

3.2 all documents relating to Bright Field, Eastwood and Sino Merit in the Respondent’s possession, custody or control, including all books, records, correspondence and/or papers.”

2. The Provisional Liquidators have produced a draft order which expands on the terms of the order sought in the summons, which is in Appendix 2 to this decision.

3. Mr Tsang was a director and chief financial officer of the Company.  His involvement in the matters, which led to me making a winding up order are explained in my decisions of 9 April and 28 August 2014.  In short, Mr. Tsang played a central role in the Company’s affairs including in its two principal “acquisitions” pursuant to which US$355.5 million was transferred to bank account of the purported vendor, Supreme Well, of which Mr Tsang was sole bank account signatory.  Mr Tsang’s role in these transactions on behalf of Supreme Well was not disclosed to the Company or its shareholders.

4. In my Decision of 28 August 2014 I found that:

[13] “… What is clear is that there is good reason to be very suspicious about the genuineness of the sale of FISH and SPR and that the way in which the proceeds of sale were dealt with subsequently require investigation.”

[14] “There is now reason to think that a very large part of the Company’s assets has been misappropriated through a scheme operated in Hong Kong involving various persons who themselves are normally resident here (Mr Tsang, Mr Kwan and Mr Chong Wing Hip) and using bank accounts in Hong Kong which were operated personally by Mr Tsang in Hong Kong. …”

….

[16] “there are strong prima facie grounds for suspecting that a very significant part of the Company’s assets have been misappropriated in Hong Kong using a number of Hong Kong bank accounts operated by persons in Hong Kong. … the events that took place in Hong Kong are central to the liquidation both in the sense that they need to be investigated in order that the liquidators can determine whether claims are available against third parties and also in order to determine whether offences have occurred.”

5. In addition to assisting them to determine whether claims are available against Mr Tsang and others and whether offences have occurred, the Provisional Liquidators seek to examine Mr Tsang and have him produce documents as to:

(1) the value and recoverability of any such claims; and

(2) the assets of the Company under the control of Mr Tsang, his wife or persons or entities associated with them, including the subsequent use of those assets.

6. The Provisional Liquidator’s case in support of their contention that they are entitled to production of the aforesaid documents can be summarised as follows:

(1) An examination by the court and production of documents as to the recoverability of claims which may be available to the Company is within the ambit of section 221.

(2) Information about the worth of any judgment for damages which may be obtained by the Company is information about the Company’s property and is within the permissible scope of an examination under section 221.

(3) As to the exercise of the Court’s discretion, Mr Tsang is a former officer of the Company who has engaged in prima facie self-dealing with the majority of the Company’s assets, which appear to have been misappropriated.  The present application is a paradigm case in which it is appropriate for the Court to make an order of broad scope for production of the documents sought by the Provisional Liquidators and to affirm that questioning of Mr Tsang at the examination in respect of the additional topics identified in paragraph 5 above is appropriate.

7. This argument requires careful consideration because it invites me to make an order that in my view is inconsistent with the decision of Kwan J (as she then was) in Re Weihong Petroleum Co Ltd (No 2) [1] (“Weihong”) and it is helpful to start with a consideration of that case. 

The Decision in Weihong

8. Section 221(1) and (3) of the Companies (Winding-up and Miscellaneous Provisions) Ordinance, cap. 32 (“Ordinance”), provides:

“(1) The court may, at any time after the appointment of a provisional liquidator or the making of a winding-up order, summon before it any officer of the company or person known or suspected to have in his possession any property of the company or supposed to be indebted to the company, or any person whom the court deems capable of giving information concerning the promotion, formation, trade, dealings, affairs, or property of the company.

(2) The court may examine him on oath concerning the matters aforesaid, either by word of mouth or on written interrogatories, and may reduce his answers to writing and require him to sign them.

(3) The court may require him to produce any books and papers in his custody or power relating to the company, but, where he claims any lien on books or papers produced by him, the production shall be without prejudice to that lien, and the court shall have jurisdiction in the winding up to determine all questions relating to that lien.”

9. The liquidators in Weihong sought an order that the respondents, who had been directors of Weihong, produce pursuant to section 221(3) of the Ordinance, a broad range of documents including banks accounts, management accounts and audited accounts of the respondents or any firm, business or company in which they held an interest of 25% or more, the wage receipts, share certificates and documents showing their real and personal property and tax liabilities.  Production of the documents was sought on 3 grounds.  First that they were relevant to the liquidators concern that Weihong’s business interests had been transferred at nil consideration.  The documents were sought from the respondents in order to ascertain whether they had made a secret profit out of the transactions.  Secondly, they were relevant to certain bank transfers to some of the respondents.  Thirdly, in order to assess whether or not the 3^rd and 4^th Respondents had sufficient assets to make it worthwhile proceeding against them.  Kwan J dismissed the application.  In summary her reasons were as follows.  The wording of section 221(3) is materially narrower than the wording of section 221(1) and (2) which allows oral examination “concerning the promotion, formation, trade, dealings, affairs, or property of the company”.  Section 221(3) refers to production of documents “relating to the company”.  Even on a liberal interpretation of this language it did not extend to documents of the type sought.  The equivalent statutory provisions in England and Australia used materially different language.  This is particularly the case in Australia which means that Australian authorities are of limited assistance in determining the scope of section 221(3). 

10. The Provisional Liquidators say this analysis is wrong.  Their argument boils down to this: the expression “relating to the Company” in section 221(3) should be given the same meaning as “concerning the promotion, formation, trade, dealings, affairs, or property of the company.” in section 221(1).  As is apparent from my summary of Wei Hong, Kwan J took the view that “relating to the Company” should be given its natural meaning. 

The meaning of “property” in Section 221(1)

11. The Provisional Liquidators’ contention that the construction of section 211(3) adopted in Weihong is incorrect starts with a consideration of the language of section 221(1) and the breadth of the matters that can be examined pursuant to that sub‑section.  Of particular importance to their argument is the meaning of “property” in sub‑section (1).  The word “property” is defined in Section 3 of the Interpretation and General Clauses Ordinance, Cap 1,as including:

“(1) money, goods, choses in action and land; and

(2) obligations, easements and every description of estate, interest and profit, present or future, vested or contingent, arising out of or incident to property as defined in paragraph (a) of this definition;”

12. This is a broad definition and is consistent with the wide definition at common law: see for example Jones v Skinner [2] where Lord Langdone referred to “property” (at 90) as the “most comprehensive of all the terms which can be used, inasmuch as it is indicative and descriptive of every possible interest which the party can have.”

13. Section 199(2)(a) of the Ordinanceconfers upon a liquidator the power, subject to the control of the court:

“to sell the real and personal property and things in action of the company by public auction or private contract, with power to transfer the whole thereof to any person or company, or to sell the same in parcels;”

14. That a cause of action is a thing in action constituting property of the Company is recognised in Hong Kong: see my decision in Re Cyberworks Audio Video Technology Ltd [3]. Thus, argue the Provisional Liquidators, an order for examination and production of documents as to the value and recoverability of legal claims which may be available to the Company is plainly within the ambit of section 221(1) as a cause of action of the Company is a thing in action belonging to the Company; in other words the property of the Company.  It follows that information concerning the property of the Company, including a contingent cause of action and its value, is within the ambit of section 221(1).  Similarly, say the Provisional Liquidators, documents concerning the property of the Company, including a contingent cause of action and its value, relate to the Company and are within the ambit of section 221(3). 

Kong Wah Holdings

15. The Provisional Liquidators say that this conclusion is consistent with the Court of Final Appeal’s decision in The Joint & Several Liquidators of Kong Wah Holdings Ltd v Grande Holdings Ltd [4] (“Kong Wah”).  In Kong Wah the Court of Final Appeal addressed in detail the scope and purpose of section 221.  In the concurring judgments of Bokhary PJ and Chan PJ, with whom Li CJ and Ribeiro PJ agreed, it is explained in paragraph 2 that:

“… The broad purpose of provisions like s.221 of the Companies Ordinance (Cap.32), is plain. Quite simply, it is to help liquidators to carry out their duties as effectively, quickly and economically as possible. To that end, liquidators need to identify, at an early stage, what promising paths they can pursue and, let it never be forgotten, what blind alleys they had best avoid so as not to throw good money after bad. It can be seen – perhaps even more clearly nowadays than in the past – that the section’s language and its purpose combine to call for a wide interpretation of the court’s powers thereunder. …”

16. The leading judgment in Kong Wah was delivered by Lord Millett NPJ, with whom Li CJ, Bokhary PJ, Chan PJ and Ribeiro PJ agreed.  At paragraphs 21 to 28, Lord Millett addressed in detail the scope and purpose of section 221:

“Legislation corresponding to section 221 may be found in Australia, Singapore, Canada and New Zealand. All these enactments derive their origins from the English Companies Act 1862 and form an integral part of the insolvency regime in each of those countries.” at [21];

“the overriding requirement is to construe the words of section 221 in the light of its own legislative purpose” at [22];

“Section 221 and corresponding provisions overseas are designed to enable a liquidator to carry out his functions.” at [23];

“These are twofold: (i) to collect the assets of the company, settle its liabilities and distribute its surplus funds amongst its creditors; and (ii) to investigate the causes of the company’s failure and the conduct of those concerned in its dealings and affairs…” at [23];

“Section 221 has often been described as a section which confers extraordinary powers on the court…” at [24];

“The section is a vital part of the statutory insolvency regime. It is designed to meet the difficulties faced by liquidators in finding out what has happened to the company’s assets and what has caused the failure of the company. It has often been observed that a liquidator is usually a stranger to the affairs of the company. He relies on orders for examination and production to reconstitute the knowledge of the company, in circumstances where the records are often inadequate, in order to be able to perform his duties in recovering the company’s assets and generally to enable him to carry out his functions effectively and with as little expense and as expediently as possible.” at [25];

“The section’s purpose, however, is not limited to reconstituting the state of the company’s knowledge, even though that may be one of the purposes most clearly justifying the making of an order: … It may be used to discover facts and documents relating to potential claims by the liquidator against third parties or to enable him to report to the authorities with a view to taking action against those responsible for the company’s failure:… There is an important public interest ensuring that the liquidator should obtain the information needed to understand the company’s affairs and the reasons for its failure; …” at [26];

“It has been repeatedly stated, and the legislative purpose demands, that the powers conferred on the court by the section or its overseas equivalents are wide, general and unlimited.” At [27];

“The liquidator must satisfy the court that the information or documents sought are reasonably required to enable him to carry out his functions. In considering this question, the authorities establish that great weight should be given to the views of the liquidator, for he is an officer of the court and alone has the necessary knowledge of the problems facing him in understanding the affairs of the company and his reasons for seeking production of documents in the terms proposed; moreover, there are often great difficulties in seeing how the terms of the order can be cut down and remain effective: …” at [27]; and

“The jurisdiction conferred on the court by the section is necessarily wide, and being of an inquisitorial nature it is capable of working with great severity against third parties: … The width and potentially oppressive nature of the jurisdiction, however, is tempered by the fact that it does not follow that the court is bound to make an order merely because it has jurisdiction to do so. It has a discretion to make or refuse the order sought or to modify or limit its terms.” at [28].

17. It is evident from the above passages in Kong Wah that examination of matters relating to possible claims comes within section 221, although I do not accept the Provisional Liquidators’ argument that it is clear from the judgment that section 221(3) extends to production of documents in respect of the value and recoverability of claims.

18. Bokhary PJ and Chan PJ at paragraph 2 of their joint judgment draw attention to section 221’s function in helping “liquidators to carry out their duties as effectively, quickly and economically as possible … to identify, at an early stage, what promising paths they can pursue and … what blind alleys they had best avoid so as not to throw good money after bad ”. A purpose which Lord Millett similarly emphasises in paragraph 25 of his own judgment.  The Provisional Liquidators says that this emphasises the practical issues that section 221 is designed to address including the desirability of liquidators completing their task quickly and cost effectively.  This must include, they say, enabling a liquidator to assess the value and recoverability of a legal claim.

The English Statute and Case Law

19. The Provisional Liquidators say that their construction of section 221(3) is also consistent with 19^th century English cases which address the ambit of the English legislation from which Section 221 is ultimately derived, namely, the Companies Ordinance 1865, which was modelled on the English Companies Act 1862. Its terms have changed little in almost 143 years.[5]  The equivalent provision in the Companies Act 1862 was section 115, which was in almost identical terms to section 221.  Section 115 provided:

“The court may, after it has made an order for winding up the company, summon before it any officer of the company or person known or suspected to have in his possession any of the estate or effects of the company, or supposed to be indebted to the company, or any person whom the court may deem capable of giving information concerning the trade, dealings, estate, or effects of the company; and the court may require any such officer or person to produce any books, papers, deeds, writings, or other documents in his custody or power relating to the company; and if any person so summoned, after being tendered a reasonable sum for his expenses, refuses to come before the court at the time appointed, having no lawful impediment (made known to the court at the time of its sitting, and allowed by it), the court may cause such person to be apprehended, and brought before the court for examination; nevertheless, in cases where any person claims any lien on papers, deeds, or writings or documents produced by him, such production shall be without prejudice to such lien, and the court shall have jurisdiction in the winding up to determine all questions relating to such lien. ”

20. There is long standing authority in England, consisting of a line of cases decided under section 115 between 1867 and 1872, establishing that the court may order an examination to ascertain the worth of a contributory as a matter incidental to making a decision to pursue the contributory for the amount due to the company by way of contribution, with a view to realising the property of the company and increasing the assets available in the winding up.  A number of these cases concern examination, not only of the contributory, but of a third party such as a banker or debtor of the contributory, expected to have information regarding the financial affairs of the contributory.  In Re Financial Insurance Co Ltd (Bloxam’s Case) [6] at 688-689 Sir John Stuart VC ordered examination of the managing clerk of a bank who was also the contributory’s brother.  The Vice Chancellor stated:  “It is difficult to conceive what species of information could be of greater importance to the creditors and others interested in the winding up of a company, than the means at the disposal of the members who compose the company”.  In Re Bank of Hindustan, China & Japan (Swan’s Case) [7] at 677 the Vice Chancellor in ordering the sister and nephew of contributories to be examined as to the contributories’ financial affairs, similarly explained that “any person who possesses any means of information which may enable the liquidator to recover the company’s money may be examined”.  In Re Bank of Hindustan, China & Japan (Fricker’s Case) [8] an order was made for the examination of the son-in-law of a contributory as to the contributory’s financial affairs, so that his means could be ascertained.  In Re Contract Corporation (Druitt’s Case) [9] (at 7) Lord Romilly MR made an order for the examination of and production of bank account documents by a bank manager, so that the liquidators could determine the means of the contributory explaining that “This is just one of those cases for which the 115^th section of the Act was intended to provide.  An order must be made for the attendance of the manager, and for the production of the books and papers required so far as they relate to Forbes’s account; but he is not bound to disclose anything that may affect the other account.  I will make no order as to costs, except that the official liquidators may have his costs out of the estate.”.  Similarly, in Re Land Credit Company of Ireland (Trower and Lawson’s Case [10]) the Master of the Rolls ordered a former partner of the contributory, who had left the firm and was residing abroad, to attend for examination and produce the ledger, cash book and cheque book of the firm, as the firm was indebted to the contributory explaining that: “Any person who is indebted to a contributory is liable to be summoned under sect. 115 of the Companies Act, 1862, and to give information respecting the means of such contributory.  The witnesses must, therefore, attend and produce the documents.  I will make no order against them as to the costs of this case; but as the rule is now established I shall in future give costs against recalcitrant witnesses”.

21. I accept that these cases demonstrate that the courts have concluded that provisions very similar to section 221 can properly be used to facilitate the investigation, by way of examination and production of documents of the financial position of a contributory who has not paid for his shares in an insolvent company.

22. Thesecases do not appear to have been applied recently by English courts in any reported decisions, but the rule that they establish is treated by the authors of Buckley on the Companies Acts (14^th ed) as remaining good law:

“A debt due to the company upon shares forms part of the effects of the company, and the circumstances under which shares have been entered on the register form part of the dealings of the company [11]; and, therefore, any persons who possess any means of information on these subjects may be examined. Information which relates to the property of a contributory is information concerning the estate or effects of the company [12].

…

Any person indebted to a contributory is liable to be summoned to give information respecting the means of such contributory. Thus former partners of a contributory were compelled to attend to give evidence and to produce the ledger, cash-book, and cheque-book of the firm [13].”

23. The current equivalent provision in England is section 236 of the Insolvency Act 1986, which is more comprehensive than section 115.  I am told by Mr. Karas, who appeared for the Provisional Liquidators, that there are no reported cases in England on the subject of examination and production of documents to aid recovery from contributories or creditors.  I think it reasonable to assume in the case of the former that this is explained by the existence of the very clear 19^th century authorities to which I have referred.  In the case of the latter Mr. Karas suggested that it was explained by a general acceptance by practitioners in England that the same principle applied to the recovery of sums owed to insolvent companies by its debtors. 

The Australian position

24. In Australia various authorities do address the issue in the context of claims against creditors. The principles that they establish are explained in McPherson’s Law of Company Liquidation, 3^rd ed, 2013 at [15-048]:

“It has been held in Australia that the affairs of a company covers the company’s choses in action. [fn Grosvenor Hill (Qld) Pty Ltd v Barber (1994) 120 ALR 262] Hence, information about whether a judgment resulting from a liquidator’s action has any worth, that is whether damages awarded under the judgment will be met, can be sought; such information is about the company’s property and can be the subject of examination. [fn Re Interchase Corp Ltd (1996) 21 ACSR 375] Certainly the concern of a liquidator as to whether a judgment could be satisfied is a practical and realistic one given the fact that the liquidator would have to expend substantial costs to obtain judgment. [fn Re Interchase Corp Ltd (1994) 12 ACSR 405; (1994) 12 ACLC 97] This is well illustrated by the decision of the Full Court of the Supreme Court of South Australia in Gerah Imports Pty Ltd v The Duke Group Ltd (in liq). …”

25. In order to understand how the Australian courts have reached these conclusions it is necessary to consider the Australian legislation.  The Australian equivalent of section 221 is section 596B of the Australian Corporations Act 2001.  The Australian statutory scheme is more comprehensive than section 221:

“(1) The Court may summon a person for examination about a corporation’s examinable affairs if:

(a) an eligible applicant applies for the summons; and

(b) the Court is satisfied that the person:

(i) has taken part or been concerned in examinable affairs of the corporation and has been, or may have been, guilty of misconduct in relation to the corporation; or

(ii)  may be able to give information about examinable affairs of the corporation.”

26. Section 596D provides for examination on oath about the corporation’s examinable affairs (section 596D(1)) and production at the examination of specified books (section 596D(2)) that:

“(1) are in the person's possession; and

  (2)  relate to the corporation or to any of its examinable affairs.”

27. Section 597(9) states:

“The Court may direct a person to produce, at an examination of that or any other person, books that are in the first‑mentioned person's possession and are relevant to matters to which the examination relates or will relate.”

28. The term “examinable affairs” is defined in section 9 of the Corporations Act, as follows:

“examinable affairs, in relation to a corporation means:

(a) the promotion, formation, management, administration or winding up of the corporation; or

(b) any other affairs of the corporation (including anything that is included in the corporation’s affairs because of section 53); or

(c)  the business affairs of a connected entity of the corporation, in so far as they are, or appear to be, relevant to the corporation or to anything that is included in the corporation’s examinable affairs because of paragraph (a) or (b).”

29. The “corporation’s affairs” are defined in section 53, which provides:

“For the purposes of the definition of examinable affairs in section 9 … the affairs of a body corporate include:

(a)  the promotion, formation, membership, control, business, trading, transactions and dealings (whether alone or jointly with any other person or persons and including transactions and dealings as agent, bailee or trustee), property (whether held alone or jointly with any other person or persons and including property held as agent, bailee or trustee), liabilities (including liabilities owed jointly with any other person or persons and liabilities as trustee), profits and other income, receipts, losses, outgoings and expenditure of the body.”

30. The word “property” in section 53 is further defined in section 9 to mean:

“any legal or equitable estate or interest (whether present or future and whether vested or contingent) in real or personal property of any description and includes a thing in action”.

31. It can readily be seen, says Mr. Karas, that, although more elaborate, the ambit of the Australian legislation is very similar to section 221.  In particular:

(1) a person may be examined and required to produce documents about the affairs of the company;

(2) the affairs of the company include its property; and

(3) the property of the company includes a thing in action, such as a cause of action and its value, whether present or future, vested or contingent.

I accept that in broad terms this is correct. 

32. The position in Australia in respect of the examination and production of documents as to the value and recoverability of a company’s property in the form of a chose in action has been considered in a number of cases. 

33. In Gerah Imports Pty Ltd v Duke Group Ltd (in liq) [14] Olsson J (with whom King CJ and Millhouse J agreed) permitted examination of the financial affairs of defendant accountants, specifically as to their professional indemnity insurance, because it was necessary for the liquidator to determine whether any judgment obtained against the firm could be satisfied.

“This being so it seems to me to be beyond question that the chose in action comprising a potential liability of the relevant defendants to Kia Ora and the ancillary aspect of facilitating the available means of getting in that property by first obtaining a declaration of liability against an insurer of the defendants are clearly matters falling within the phrase ‘examinable affairs’ of Kia Ora. So also those aspects are relevant to the liquidator's administration in the winding up, because they bear upon the assessment which he needs to make as to what steps are, in commercial terms, proper and desirable to take in discharging his duties. The commercial reality of pursuing long and expensive legal proceedings for a very large sum of money against individuals of finite resources is clearly a matter as to which he needs to make a judgment, based upon the likelihood, or otherwise, of potential ultimate recovery from a relevant insurer. (As to this, what fell from Mason CJ in Hamilton v Oades at 497 is pertinent.)”[15]

34. In Re The Duke Group Ltd (in liq)[16] the matter came back before the High Court of Australia, on an application by the examinees for a stay of the examination orders, pending an application for special leave to appeal.  The application was determined by Dawson J who declined the stay on the basis that he had not been satisfied that the leave application enjoyed a substantial prospect of success.  He stated:

“The section of the Corporations Law which is critical is s 596B. That confers power upon the court to summon a person for examination about a corporation's examinable affairs. With regard is had to the definitions of “examinable affairs”, “affairs” and “property” contained in ss 9 and 53, “examinable affairs” include any legal or equitable estate or interest (whether present or future and whether vested or contingent) in real or personal property of any description and include a thing in action.

Clearly the rights of action, if any, of the corporation against the applicants are examinable affairs within the meaning of the legislation. The Full Court concluded that an examination of those rights under the relevant provisions was not confined to their existence but extended to their extent and value. Plainly the latter are matters of considerable moment to the liquidator of a corporation in pursuing the assets of the corporation in an economical and efficient manner. And as was pointed out in Hamilton v Oades (1989) 166 CLR 486 at 496; 85 ALR 1, a liquidator performs a public function in which one of his duties is to protect the interests of the creditors.

It is not contended before me by the applicants that the examination ordered by the master is oppressive. What is said is that it extends beyond the affairs of the corporation to the affairs of other persons and is merely for the purpose of ascertaining their potential liability and their capacity to satisfy any judgment against them. However, as I have said, these are matters of importance to a liquidator, going in a practical way as they do to the value of the property of the corporation.”

…The power conferred by s 596B is wide and I am not persuaded that the conclusion reached by the Full Court involves any error either in construction of the provision or otherwise.”

35. The issue was next considered in Grosvenor Hill (Qld) Pty Ltd v Barber [17], four days after the decision in Re The Duke Group Ltd, but without reference to it, where the Full Federal Court dismissed an appeal against an order for examination and production of insurance policies and related documents of potential defendants.

36. The decision in Grosvenor Hillis the most comprehensive of the three judgments.  The Federal Court’s relevant findings were as follows:

(1) The Court rejected submissions that the insurance cover, whilst of commercial interest, had no legal relevance to the potential causes of action[18].

(2) The Court concluded that the order made was within the scope of the relevant provisions and the insurance policy was “relevant” to matters to which the examination related, and treated “relevant” as meaning “bearing upon or connected with the matter in hand; to the purpose; pertinent.”[19].

(3) The definition of “examinable affairs” includes the property of Interchase (the company in liquidation), such that “A cause of action which vests in Interchase by reason of breach of a professional duty owed to it by a valuer would, if established, be a chose in action possessed by Interchase and, in that sense, would be property of Interchase.”[20]

(4) It is well settled that “information with respect to the probability or otherwise of success in litigation contemplated by the corporation would be information with respect to the “examinable affairs” of the corporation in question.  This information would be “relevant”, that is to say, it would bear upon or be connected with, the question whether the corporation possessed a cause of action, that is, a chose in action, as its property.  It is not, and could not be, seriously disputed that an inquiry as to the existence, and value, of any property that the corporation may possess would be a “relevant” inquiry for the purpose of s597(9).”[21]

(5) The seeking of information to make decisions as to whether or not litigation ought to be embarked upon or continued in itself is no more than “an exercise of his duties and the fulfilment of his responsibilities as liquidator”[22]

(6) The central question was whether the Court had power to order an examination, “the purpose of which is to ascertain the likelihood of any judgment being satisfied; that is, whether it is a permitted purpose to inquire as to the worth of a potential defendant so as to be able to make a practical assessment as to the likelihood of a return to the company of the fruits of any favourable judgment and the necessary legal costs expended in obtaining it.”[23]

(7) In other words, “Is the Court empowered under the section to order an examination or the production of documents to test the likelihood of the creditors in the winding up receiving a tangible benefit from the satisfaction of any judgment obtained and to enable the liquidator to determine whether it is prudent to commence or maintain litigation with knowledge as to the real likelihood of obtaining any tangible benefit beyond a mere judgment, including a judgment for costs, at the conclusion of the litigation?”[24]

(8) The Court concluded that it has such a broad power and that it is “a power of long standing”, citing the early English cases to which I have referred earlier in this decision[25].

37. It is, however, at 311D‑G that the court explains with precision how the Corporations Act provides the power to make an order for a potential defendant to provide details of his assets:

“In our view, the ambit of the power is sufficiently wide to enable information to be sought from a defendant or potential defendant as to the ability of that person to satisfy any reasonable judgment which may be obtained in litigation instituted by the liquidator. In that context it is within power to order production of relevant documents, including insurance policies, to ascertain whether or not the person has an enforceable right to indemnity from an insurer or other person. The obtaining of such information by the liquidator in the course of the winding up is to facilitate the realisation of the chose in action to the best advantage of the company and its creditors. Realisation of the chose in action is an “examinable affair” within the meaning of ss 596B(1)(6)(ii) and 9 of the Law. Any policy of professional indemnity insurance containing the terms of the indemnity, including any exclusions and excesses and the amount of cover is, we think, a document “relevant to matters to which the examination relates or will relate” (s 597(9) of the Law).”

38. It is clear from this passage that the court took the view that the term “examinable affairs” in section 596D, which is defined in section 9 to include “corporations affairs” as defined in section 53, was sufficiently broad to include realisation of a chose in action and, this being so, the prospects of recovering anything of value by asserting the chose in action is thus relevant to “examinable affairs” and comes within section 597(9), which I have quoted above, and provides that the court may direct a person to produce documents that are relevant to the matter on which a person is to be examined, in other words the “examinable affairs”.  The language of section 221(3) is not amenable to a similar analysis and I agree with Kwan J that the Australian authorities are thus of little assistance in interpreting it. They are, I accept, of assistance in interpreting the much more generally worded sub‑section (1) and, in particular, the meaning of “property”.

The Criticism of Weihong

39. I now turn to consider the Provisional Liquidators’ critique of Kwan J’s judgment in Weihong.  First it is said to be inconsistent with the decision of the Court of Final Appeal in Kong Wah, in that the CFA affirmed unequivocally that the language and purpose of section 221 “call for a wide interpretation of the court’s power thereunder” (at [2]) and “that the powers conferred on the court by the section or its overseas equivalents are wide, general and unlimited”[26].  It is said that Kwan J in paragraphs 29 and 30 of her judgment took a “narrow construction” of “affairs or property of the company”.  I disagree.  Kwan J identified, in my view correctly, the different language used in subsections (1) and (2) on the one hand and subsection (3) on the other and took the view that even on a liberal interpretation of the meaning of “relating to the Company” the documents sought did not relate to the Company.

40. Secondly, the Provisional Liquidators say that Kwan J’s judgment means that the permissible scope of an oral examination is broader in Hong Kong than the permissible scope of a document production order and that this would be out of line with similar jurisdictions and would not allow liquidators in Hong Kong the same powers found to exist and be desirable in Australia.  This is a non‑sequitur.  The legislation is very different in the two jurisdictions, which is largely the result of the fact that Hong Kong’s insolvency legislation has not been revised.  This may be inconvenient, but it provides no basis for imposing on the language that we do have a meaning which it cannot fairly be said to bear.

41. Thirdly, the Provisional Liquidators pointto paragraphs 33 and 34 of Lord Millett’s judgment in Kong Wah in which he contrasts production of documents under section 221(3) with discovery and concludes that the scope of production under section 221(3) is much broader than under the rules of practice and procedure for discovery, noting that the liquidator is “necessarily engaged” in a “fishing” or “speculative expedition” and emphasising the “extraordinary and sui generis nature of the power conferred by section 221.”.  However, what is apparent from these paragraphs is that the point Lord Millett is making is that a party seeking discovery is not entitled to disclosure of documents that may help him discover if he has claims not covered by his pleadings, whereas as a liquidator can seek production under section 221(3) of documents to advance his knowledge of the affairs of a company, and this may involve a “speculative expedition”. This does not, however, tell us what “relates to the Company” encompasses.  What it tells us is that a liquidator is entitled to documents that relate to a company without having to demonstrate that he has a claim which they may support.

42. Fourthly, the Provisional Liquidators suggest that paragraph 37 of Lord Millett’s judgment which explains that the test of whether “a document relates to the company” is “essentially a commercial one, which a layman will normally be able to understand”, confirms that section 221(3) is not to be construed narrowly, technically or literally.  It is instructive to quote the whole of paragraph 37.

“37. The cases on discovery, properly considered, do not help the appellants. As under s.221, the potentially burdensome task of going through the documents and identifying those which must be disclosed falls on the party who is in possession of the documents, not on the party who seeks their production. In the case of discovery the task may not be an easy one, since it calls for an analysis of the issues in the action and consideration of the relevance of documents to the issues. Both require a legal judgment to be formed and may well require the assistance of a lawyer. The identification of the documents to be produced pursuant to an order under s.221, on the other hand, though often burdensome because of the sheer quantity of the documentation to be considered, rarely calls for the exercise of a legal judgment. There are no issues to be analysed and no questions of relevance arise. If a document relates to the company in liquidation and is within any narrower definition in the order it must be produced. The test is essentially a commercial one, which a layman will normally be able to understand.”

It seems to me highly doubtful, for example, that a layman would think that Mr. Tsang’s divorce papers or bank accounts statements relate to the Company.  He would only be likely to reach the conclusion that they do if he knew their alleged relevance and had the benefit of the exposition of the law advanced by Mr. Karas. 

43. Fifthly, it is argued that Kwan J’s narrow construction of section 221(3) also failed to take into consideration section 19 of the Interpretation and General Clauses Ordinance, Cap 1, which requires statutory provisions to be given a fair, large and liberal construction to best ensure the attainment of their objects according to their true intent, meaning and spirit.  I disagree.  Although Kwan J did not address this argument directly, it not appearing to have been advanced, it is clear from the judgment that Kwan J took the view that even adopting a liberal interpretation what was sought could not be brought within the language of the section.

44. Sixthly, the Provisional Liquidators saythat Kwan J’s view that section 221 was materially narrower than the Australian equivalent, is for the reasons I have considered above, incorrect.  Again I disagree.  It seems to me to be quite clear that in relation to production of documents the Australian legislation is much wider.

45. Seventhly, the Provisional Liquidators saythat Kwan J’s conclusion as to the narrower scope of section 221(3) is also inconsistent with the approach of the Court of Appeal in Re Nardu Co Ltd [27].  In that case, disclosure was permitted of documents concerning the activities of a subsidiary.  Mr. Karas argues that it is apparent from paragraph 16 of Tang VP’s (as he then was) judgment that section 221(3) extends to documents that concern a company’s “dealings” and “affairs”, which is wider than the narrower interpretation that Kwan J gave to the expression “relating to the Company”.  It is necessary to consider precisely what was said by Tang VP in his judgment:

“12. The liquidators issued their application under s.221of the Companies Ordinance (Cap.32), on 27 September 2006 against seven individual respondents, and sought, as against each of them, orders for (1) the production of certain categories of documents that are said to relate to the company; (2) the making of affirmations to explain what has become of such documents where they were previously, but are no longer, in their possession, custody or control; and (3) their oral examination in relation to the affairs of the company.

13. Mr Jonathan Chang, counsel for the first to the third respondents, submitted that s.221 was inapplicable, since, essentially, the application related to documents and information concerning the settlement agreement and hence PLR, and not the company.

14. He submitted Joint & Several Liquidators of Kong Wah Holdings Ltd v Grande Holdings Ltd (2006) 9 HKCFAR 766 is authority that it cannot be assumed that documents relating to subsidiaries would ipso facto relate to the company in liquidation, and this must be established by evidence of the facts of the particular case or else it falls outside s.221 of the Companies Ordinance.

15. But as the learned Judge said in para.37 of the judgment:

“37.  I also note that in the Joint & Several Liquidators of Kong Wah Holdings Ltd v Grande Holdings Ltd case itself, the application related not only to the companies in liquidation, but also to documents and information concerning subsidiaries of those companies (see para.16 of the judgment). As was held in para.62 of the judgment, while it could not be assumed that documents relating to a subsidiary would ipso facto relate to the parent company in liquidation, the judge was entitled, in that case, to take the view that the documents sought (which were limited, as is the case here, to documents relating to particular matters) related to the companies in liquidation, whether or not they also related to other entities.”

16. With respect, we agree with the learned Judge’s conclusion that under s.221 the information that can be ordered to be provided includes any information concerning the “dealings” or “affairs” of the company and that these words are wide enough to cover, in an appropriate case, information concerning the activities of a subsidiary of the company concerned.

17. Here, we believe it is legitimate for the liquidators to try to find out whether and if so why its principal asset, namely the shares of PLR, are now valueless. It is the affairs of the company to learn whether and if so why its investment has gone so terribly wrong.”

46. It can be seen that Tang VP is not addressing section 221(3).  In paragraph 16 Tang VP refers to “information” being ordered not the production of documents.  I think on a fair reading of these passages what is being said is that the liquidators were entitled to examine the respondent on one of its subsidiaries’ transactions as, on the facts of the case, it constituted part of its affairs.  It does not shed any light on the issue before me, namely, whether sub-section (3) is narrower in scope than sub‑section (1).

47. Finally, the Provisional Liquidators argue that assessing the value of a cause of action has been found to be a proper reason to order production of documents in the analogous context of section 29 of the Bankruptcy Ordinance,Cap 6, by Recorder Anderson Chow SC (as he then was) in Re Lee Priscilla Hwang (bankrupt) [28]. That is correct, but section 29 is worded very differently to section 221(3). Section 29 provides:

“(1) The court may, on the application of the official Receiver or trustee, at any time after a bankruptcy order has been made against a bankrupt summon before it the bankrupt or his spouse, or any person known or suspected to have in his possession any of the estate or effects belonging to the bankrupt or supposed to be indebted to the bankrupt, or 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.”

It can be seen that this section is very broad and allows the court to order that any person provide documents “relating to the bankrupt, his dealing or property”.  It is unsurprising that Recorder Chow concluded that this was wide enough to cover documents recording a bankrupt’s source of income and debts owed to him, but the decision is of little assistance in construing section 221(3).

Conclusion

48. It seems to me that in determining whether sub-section (3) extends to the categories of documents sought in the present case regard must be given to the fact that in Hong Kong the legislature chose to use different language in sub-sections (1), (2) and (3).  I do not think this fact can be treated as an unfortunate inconvenience which is to be glossed over as the Provisional Liquidators’ approach would have me do.  For reasons that I have already explained in my view the Australian authorities, which are decided on very differently worded legislation, provide limited assistance in determining what sub-section (3) means.

49. The principle authority in Hong Kong on section 221, Kong Wah, provides rather less assistance to the Provisional Liquidators than they suggest.  I agree that sub-section (1), as explained in Kong Wah, can properly be given a broad enough meaning to permit questioning on the subjects in respect of which production of documents is sought.  However, the judgment does not explain the meaning of sub-section (3) in the same way as it explains the meaning of sub-section (1).  Lord Millet in paragraph 37 of his judgment suggests a common sense approach to the assessment of whether a document is one “relating to a company”.  The Provisional Liquidators are advocating an approach which is wider.  They contend that any document that relates to the “promotion, formation, trade, dealings, affairs or property of the company” comes within sub-section (3).  This is not supported by the language of the section or, in my view, the decision of the Court of Final Appeal in Kong Wah.

50. The Provisional Liquidators are able to point to 2 decisions of Lord Romilly MR, Re Contract Corporation (Druitt’s case) [29] and Re Land Creditor Company of Ireland (Trower and Lawson’s case) [30], to which I have referred earlier, in which the court ordered production of documents pursuant to section 115 of the Companies Act 1862, concerning the assets of contributories who had not paid for their shares.  Both judgments were extremely short and I have quoted them in full in paragraph 20.  The other cases to which I refer in paragraph 20 dealt only with the scope of examination.  Lord Romilly MR appears to have decided the cases before him on the basis that the ability of a contributory to pay sums due in respect of unpaid shares was a matter on which anybody with knowledge of it could be examined and, his Lordship seems to have assumed, it followed it was a matter in respect of which he could be required to produce documents.  The oral examination of person with relevant information about a company and the production of documents are dealt with in one section in the 1862 Act.  The language used in respect of each is clearly different but that difference and its significance is not as immediately obvious as it is in section 221, which perhaps explains why there is no discussion in these cases of the distinction that the drafter seems to have drawn between examination and production.  Despite these authorities it remains my view that the Provisional Liquidators’interpretation of section 221(3) goes beyond that which the language bears and does not permit an order for the extensive production of personal papers that the Provisional Liquidators seek in paragraphs 2 to 4 of the draft order in Appendix 2 to this decision.

51. It is also important to note that the Provisional Liquidators have already obtained a very widely drawn order for the production of documents as can be seen from Appendix 1.  Paragraphs 3.2, 4.4, 5.1 and 5.2 of that order require Mr. Tsang to produce all documents recording the transfer and use of the proceeds of the two acquisitions by the Company referred to in paragraphs 3 and 4 of this Decision.  This includes transfers into or out of accounts owned or controlled by Mr. Tsang.  The order that the Provisional Liquidators now seek would seem to be directed exclusively, or almost so, at assets that are not derived from the proceeds of the two acquisitions which it is suspected involved impropriety on the part of those in control of the Company including Mr. Tsang.  It does not seem to me that Mr. Tsang’s assets which are derived from a source other than the Company can fairly be said to relate to the Company.

52. I appreciate that it might be thought odd that the Provisional Liquidators can examine Mr. Tsang on this subject, but not obtain documents relating to it.  However, it seems to me that an order for production of private papers is more intrusive than an examination at which Mr. Tsang can be asked questions about his financial circumstances.  It is also, in my view, simply a consequence of the way in which section 221 is framed.  If it is thought appropriate that the scope of production should be extended this is a matter that can be raised with the Standing Committee on Company Law Reform which is currently revising Hong Kong’s insolvency legislation. 

53. The Provisional Liquidators also seek a direction to the Master that the scope of the oral examination extends to (1) the value and recoverability of any actual or contingent causes of action and (2) the assets of the Company under the control of Mr. Tsang, his former Wife and person or entities associated with them including the subsequent use of those assets.  This is far narrower in scope than the information sought in the production application as can be seen from the draft order.  Mr. Karas says that even if section 221(3) does not extend to production of documents relating to those matters for these reasons already considered earlier in this decision they are matters that concern the property of the Company.  In my view section 221(1) does allow the court to order examination on matters concerning what has happened to the Company’s assets and the value and recoverability of actual or contingent causes of action.  It does seem to me that given Mr. Tsang’s extensive involvement in the FISH and SPR transactions and the use of the proceeds of those transactions more fully described in my Reasons of 28 August 2014 and the unsatisfactory evidence that he filed in opposition to the winding-up petition, it isnecessary for him to explain the way in which the proceeds of the transactions were dealt with.  It will also be of assistance to the Provisional Liquidators if they are able to assess the prospects of their recovery.  It does not seem to me that given he was an officer of the Company this would be unduly oppressive.

54. I will make the following order:

(1) Samson Tsang Tak Yung may be examined at the examination fixed to commence on 11 February 2015 on:

(i) the value and recoverability of any actual or contingent causes of actions that may be available to China Medical Technologies, Inc.;

(ii) the assets of China Medical Technologies Inc. under the control of Mr. Tsang, his Wife or other persons or entities.

(2) The costs of the Provisional Liquidators’ application heard on 6 January 2015 be paid by the Provisional Liquidators to Samson Tsang Tak Yung on a party and party basis such costs to be taxed if not agreed.

 

 

Appendix 1

3.   The Respondent deliver up and produce to the Applicants within fourteen (14) days hereof the following documents, whether in printed or documentary form or any other form including computer generated records and information inscribed on, stored in or otherwise fixed in a tangible medium or that are retrievable in a perceivable form, including those stored, in particular, on computer hard drive, floppy disk, compact disk, USB flash drive, memory card and/or zip storage device, in the Respondent's possession, custody or control:

3.1 all books, records, correspondence, emails and other documents of or relating to the Company and/or its subsidiaries and former subsidiaries, including all documents of or relating to the Company's negotiations with Supreme Well Investments Limited ("Supreme Well'') concerning the Company's purported acquisition of fluorescent in situ hybridization ("FISH'') and surface plasma resonance ("SPR") technology from Supreme Well;

3.2 all books, records, correspondence, emails and other documents, including all correspondence between the Company, Bank of China (Hong Kong) Limited ("BOCHK") and/or The Bank of East Asia Limited ("BEAHK"), in respect of the payments or transfers by the Company to Supreme Well and all other entities and individuals of cash or other assets belonging or once belonging to the Company;

3.3 all documents relating to all past or present offices held by or employment of the Respondent with the Company or its subsidiaries and former subsidiaries, including all service and/or employment contracts, payroll receipts and all correspondence including email between the Respondent and the Company or its subsidiaries and former subsidiaries relating to all such offices and/or employment; and

3.4 all documents relating to the Respondent's resignation from all offices held by or employment with the Company or its subsidiaries and former subsidiaries, including all resignation letter(s), documents regarding his payment(s) in lieu of notice and annual leave pay together with supporting documentation.

4.   The Respondent deliver up and produce to the Applicants within seven (7) days from the date of this Order the following documents, whether in printed or documentary form or any other form including computer generated records and information inscribed on, stored in or otherwise fixed in a tangible medium or that are retrievable in a perceivable form, including those stored, in particular, on computer hard drive, floppy disk, compact disk, USB flash drive, memory card and/or zip storage device, in the Respondent's possession, custody or control:

4.1 all documents showing the relationship between the Company and Supreme well and the Respondent and Supreme Well;

4.2 all documents showing the legal and/or beneficial ownership of Supreme well and its direct and indirect shareholders;

4.3 all books, corporate records, correspondence, emails and other documents of or relating to Supreme Well, including all documents of or relating to Supreme Well's negotiations with the Company concerning Supreme Well's purported sale of FISH and SPR technology to the Company and the payments made by the Company to Supreme Well as purported consideration for the FISH and SPR technology; and

4.4 all books, records, correspondence, emails and other documents showing payments or transfers by Supreme Well to all entities and individuals of cash or other assets belonging or once belonging to the Company, including all correspondence between Supreme Well, BOCHK and/or BEAHK.

5.   The Respondent deliver up and produce to the Applicants within seven (7) days from the date of this Order the following documents, whether in printed or documentary form or any other form including computer generated records and information inscribed on, stored in or otherwise fixed in a tangible medium or that are retrievable in a perceivable form, including those stored, in particular, on computer hard drive, floppy disk, compact disk, USB flash drive, memory card and/or zip storage device, in the Respondent's possession, custody or control:

5.1 all books, records, correspondence, emails and other documents of or relating to all entities and individuals which received payments or transfers from Supreme Well, whether directly or indirectly, of cash or other assets belonging or once belonging to the Company (collectively, "Supreme Well Payees"), including the following entitles and individuals:

5.1.1   Cheer Link International Limited ("Cheer Link");

5.1.2   Chong Wing Hip;

5.1.3   Chen Zheng;

5.1.4   East Hope International Limited ("East Hope'');

5.1.5   Zhu Feng;

5.1.6   Kam Hing Trading Co;

5.1.7   Dynamic Sense Limited;

5.1.8   Innovative Technology Investment Limited ("Innovative");

5.1.9   Time Region Holdings Limited; and

5.1.10  Allan Xiaoqing Hao; and

5.2 all books, records, correspondence, emails and other documents showing payments or transfers by the Supreme Well Payees (including the entities and individuals listed in 5.1 above) of cash or other assets belonging or once belonging to the Company, including all correspondence between the Supreme Well Payees and all banks.

6.   To the extent that the documents described in paragraphs 3 to 5 are not within the Respondent's custody:

6.1 within seven (7) days hereof, the Respondent shall write to the branches of all banks in respect of accounts in which he has or has had a beneficial interest or is or was a signatory and any other entities or individuals (wherever located) holding any such documents to request copies of the documents, such letter to be copied to the Applicants' solicitors.  Such banks and other entities or individuals shall include without limitation BOCHK, BEAHK, Standard Chartered Bank (Hong Kong) Limited and Fubon Bank (Hong Kong) Limited; and

6.2 the Respondent shall disclose to the Applicants' solicitors all replies to the letters referred to in paragraph 6.1 within 24 hours of receiving the same.

 

Appendix 2

1.  The permissible scope of the oral examination of Mr Tsang ordered on 15 September 2014 includes:

1.1 the value and recoverability of any actual or contingent causes of action available to China Medical Technologies, Inc. ("Company"); and

1.2 the assets of the Company under the control Mr Tsang, his wife or former wife, Ms Chui Sai Kuen ("Ms Chui"), or other persons or entities associated with them, including the subsequent use of those assets.

2.   Mr Tsang produce to the Provisional Liquidators of the Company ("PLs") within twenty one (21) days from the date of this Order every document in his possession or control evidencing or referring to:

2.1 any ownership interest, legal or equitable, direct or indirect, in any real or personal property including money and choses in action;

2.2 any trust arrangement pursuant to which Mr Tsang may exercise any power of disposition or distribution;

2.3 any trust arrangement pursuant to which Mr Tsang or any member of his family (including Ms Chui) will or may obtain a benefit;

2.4 any disposal of property by Mr Tsang or any member of his family since 3 November 2006 otherwise than in the ordinary course of business or in the ordinary course of management of Mr Tsang's family or domestic affairs; and

2.5 any agreement by which Mr Tsang may be indemnified against liability to the Company wither directly or indirectly.

3.   Without limitation to paragraph 2 above, Mr Tsang produce to the PLs within twenty one (21) days from the date of this Order every document in his possession or control evidencing or referring to:

3.1 the purported divorce between Mr Tsang and Ms Chui including all documents filed with this Honourable Court in connection therewith, any relevant Orders issued by this Honourable Court including any decree nisi and / or decree absolute, and any settlement agreement entered into between Mr Tsang and Ms Chui;

3.2 all bank statements for the past eight (8) years for all bank accounts wherever located which are held or were formerly held in the name of Mr Tsang whether individually or jointly with any other person or which are held or were formally held in the name of any companies or other entities controlled or formerly controlled by Mr Tsang including, without limitation, Bright Field (China) Limited ("Bright Field"), Eastwood International Investment Limited ("Eastwood"), Sino Merit Corporation Limited ("Sino Merit"); and

3.3 all documents relating to Bright Field, Eastwood and Sino Merit including all books, records, correspondence and / or papers.

4.  Without limitation to paragraph 2 or 3 above, Mr Tsang produce to the PLs within twenty one (21) days from the date of this Order every document in his possession or control evidencing or referring to:

4.1 companies or other entities which are controlled or were formerly controlled by Mr Tsang or whose bank account(s) were controlled or formerly controlled by Mr Tsang (whether individually or jointly with any other person) and which received, whether directly or indirectly, cash or other assets belonging or once belonging to the Company or its  subsidiaries and former subsidiaries including, without limitation, Bright Field, Eastwood, Sino Merit, Supreme Well Investments Limited ("Supreme Well"), East Hope International Limited ("East Hope"), Cheer Link International Limited ("Cheer Link") and Innovative Technology Investment Limited ("Innovative");

4.2 payments or transfers of cash belonging or once belonging to the Company or its subsidiaries or former subsidiaries into or out of bank accounts (wherever located):

4.2.1  held or formerly held in the name of Mr Tsang and / or Ms Chui, whether individually or jointly with any other person; or

4.2.2  under the control of or formerly controlled by Mr Tsang and / or Ms Chui, whether individually or jointly with any other person, including, without limitation, bank accounts in the name of Bright Field, Eastwood, Sino Merit, Supreme Well, East Hope, Cheer Link and Innovative;

4.3   Mr Tsang's appointment as an authorized signatory to bank accounts which received, whether directly or indirectly, cash or other assets belonging or once belonging to the Company or its subsidiaries, including, without limitation, the bank accounts of Supreme Well, East Hope, Cheer Link and Innovative;

4.4   payments or transfers, whether directly or indirectly, by Mr Tsang and / or Ms Chui of any cash or other assets belonging or once belonging to the Company or its subsidiaries and former subsidiaries, including all documents relating to the purported divorce between Mr Tsang and Ms Chui showing this information such as any divorce settlement agreement entered into between Mr Tsang and Ms Chui; and

4.5   the acquisition by Mr Tsang and / or Ms Chui, whether directly or indirectly, of any assets with cash or other assets belonging or once belonging to the Company or its subsidiaries and former subsidiaries, including the properties located at the following addresses to the extent that the properties were purchased with cash or other assets belonging or once belonging to the Company or its subsidiaries and former subsidiaries:

4.5.1  Flat G, 10/F, One Island Place, Island Place, No. 51 Tanner Road, Hong Kong;

4.5.2  Unit C, 51/F, Tower 1, Les Saisons, No. 28 Tai On Street, Hong Kong;

4.5.3  Flat G, Block 6, Kenswood Court Kingswood Villas, No. 2 Tin Lung Road, Tin Shui Wai, New Territories;

4.5.4   Flat A, 10/F, One Island Place, Island Place, No. 51 Tanner Road, Hong Kong;

4.5.5   Flat E, 19/F, Tower M7, Yoho Midtown, No. 9 Yuen Long Street, Yuen Long, New Territories;

4.5.6   Flat D, 5/F, Block 6, Kenwood Court, Kingswood Villas, No. 2 Tin Lung Road, Tin Shui Wai, New Territories;

4.5.7   Flat H, 5/F, Block 6, Kenswood Court Kingswood Villas, No. 2 Tin Lung Road, Tin Shui Wai, New Territories;

4.5.8   Flat B, 10/F, One Island Place, Island Place, No. 51 Tanner Road, Hong Kong; and

4.5.9   Car Park No. 320 at Basement, Kenswood Court of Kingswood Villas, No. 2 Tin Lung Road, Tin Shui Wai, Yuen Long, New Territories.

5.  Costs of this application be paid by Mr Tsang to the PLs, such costs to be taxed if not agreed.