THE SECRETARY FOR JUSTICE v. HUI YAT FAI (aka XU CHAO FAN) & OTHERS

CACV 187/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 187 OF 2004

(ON APPEAL FROM  HCMP 5714 OF 2001)

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J U D G M E N T

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Hon Yeung JA :

1.  I agree with the judgment of A Cheung J and would make the order as set out in paragraphs 55 and 57 hereof.

Hon A Cheung J:

Background

2.  On 27 October 2001, Gall J made a restraint order against 33 Respondents, pursuant to section 15 of the Organised and Serious Crimes Ordinance (Cap. 455) (the “Ordinance”).  On 26 November 2001, the judge made, in substance, an amended restraint order.  Respondent 22 (Yau Hip Trading Company Limited) was a respondent under both orders.  It had bank accounts maintained with Bank of China (HK) Limited (the “Bank”), the appellant in this appeal. Both restraint orders restrained Yau Hip from removing from Hong Kong the monies in the bank accounts maintained with the Bank, or in any way disposing of, dealing with or diminishing the value of those monies.  According to the second restraint order, the known total of the monies kept in these accounts specified in the order amounted to more than HK$120 million.  On 20 December 2001, the judge appointed Mr John Lees and Mr Desmond Chung Seng Chiong as joint and several receivers of the “realisable property” belonging to or held by the Respondents under the restraint order, pursuant to s.15(7) of the Ordinance.  On 21^st December 2001, the order was slightly amended (the “receivers’ order”).  Mr Desmond Chung Seng Chiong has since retired as receiver, leaving Mr John Lees the sole receiver appointed under the restraint order (as amended) (hereinafter referred to simply as the “restraint order”).

3.  After their appointment, the receivers entered into correspondence with the Bank with a view to obtaining information on the accounts covered by the restraint order.  It transpired from the correspondence that the Bank had, since the making of the restraint order and the service of the same on the Bank, exercised or purported to exercise its rights of set-off and/or combination of the account balances, thus resulting in a net debit position as regards the accounts. 

4.  The receivers were not satisfied with the sufficiency of the information disclosed by the Bank, nor were they satisfied with the assertion that no money was thus left in the accounts (after the alleged setting-off and/or amalgamation of accounts).

Amended summons

5.  Eventually the receivers took out a summons dated 12 September 2002 against the Bank for an account of the monies in the accounts as well as payment of the monies in the accounts to the receivers.  The summons was amended on 8 October 2002 (the “amended summons”).

6.  Paragraphs 1 and 2 of the relief sought by the receivers under the amended summons read as follows:

“	1.	Bank of China (Hong Kong) Limited do account to the Joint and Several Receivers (“the Receivers”) for all monies contained in, withdrawn, transferred or set-off from the account balances of the accounts of the 22nd Respondent, Yau Hip Trading Company Limited, with Bank of China (Hong Kong) Limited, as set out in the Restraint Orders of the Honourable Mr Justice Gall dated 27 October 2001 (para 1, pages 20-21) and 26 November 2001)(para 1, pages 18-19) as scheduled hereto, to the date of the Order herein.
	2.	Bank of China (Hong Kong) Limited do pay to the Receivers all monies contained in, withdrawn, transferred or set-off from the said account balances of the 22nd Respondent”

7.  The application was heard by the judge.  A “preliminary issue” was perceived to have arisen, namely whether the Bank can exercise its rights of set-off and aggregation without reference to the court, or whether it can only exercise those rights by application to the court for variation of the restraint order.

8.  It was the position of the Bank before the judge (and before this Court) that no variation need be applied for; the Bank could simply exercise its rights of set-off and combination of accounts without reference to the court.  The receiver took the opposite stance.

Ruling

9.  By a ruling dated 28 May 2004, the judge answered the question in favour of the receiver, i.e. the rights of set-off and combination of accounts can only be exercised by application to the court for variation of the restraint order.  In paragraph 25 of the written ruling, the learned judge concluded thus :

“	25.	I have come to conclusion that :
		(1)	the legislative scheme of restraint of realisable property leading to possible confiscation of that property preserves the interests of the respondent in that property but removes from him any right to deal with, arrange or preserve that realisable property;
		(2)	those in a position to deal with the restrained property have a high responsibility to preserve and maintain that property either for confiscation or for return to the respondent if no confiscation order is made;
		(3)	the Court of First Instance having made the restraint order and having the power to appoint a receiver to take possession of any realisable property and, in accordance with the directions of the Court of First Instance, to manage or otherwise deal with that property in respect of which he is appointed (section 15(7)) has a high duty to ensure that the realisable property is dealt with in a proper manner and that any payment out or re-arrangement of the realisable property should only be effected after satisfactory proof of the dealings with the realisable property has been produced;
		(4)	the common law and contractual rights of third parties having an interest in the realisable property are not extinguished by the restraint order; and
		(5)	those rights should not be exercised unsupervised given the high degree of duty in the Court of First Instance and the legislative removal of the rights of the respondent to deal with his own realisable property.  I therefore find that the rights of the third party, in this case the Bank, in respect of set-off and aggregation of accounts should be exercised by application to the court for variation of the restraint order.”

10.  Pausing here, it should be pointed out that section 15(6) of the Ordinance specifically provides that an application for the discharge or variation of a restraint order may be made by “any person affected” by it, and there was no dispute whether below or in this Court that the Bank is a person affected by the restraint order, thus having the locus at all times to apply for a variation.  (Order 117, rule 6 of the Rules of the High Court, Cap. 4, sets out the procedure for making such an application.)

Amended order 

11.  I should also note, at this juncture, what the judge said in the last paragraph of his written ruling, after reaching the conclusion on the preliminary issue in the paragraph extracted above.  His Lordship said :

“26.  I do not propose to deal with the orders sought under paragraphs 1 and 2 of the summons [i.e. the amended summons] at this point as it will be necessary for the parties to consider this ruling.  Either party shall be at liberty to set the summons down for further argument in respect of those paragraphs.”

12.  However, the order contemplated in paragraph 26 of the ruling was never formally made as such.  Rather what happened was that somehow an order dated 11 June 2004, which was amended on 9 August 2004, was made and sealed.  The order as amended (the “amended order”) reads:

“	It is ordered that :
	1.	Pursuant to the Ruling of the Honourable Mr Justice Gall made on 28 May 2004, the Bank of China (Hong Kong) Limited shall obtain an order for the variation of the Restraint Order made on 27 October 2001 in respect of the accounts set out therein before such account balances can be aggregated or set-off.
	2.	Paragraph 2 of the Summons filed herein on 12 September 2002 and amended on 8 October 2002 [i.e. the amended summons] be adjourned to a date to be fixed and the parties be at liberty to restore after the variation order referred to in paragraph 1 above has been dealt with.
	3.	The Summonses filed on 4 May 2004 and 9 June 2004 herein be adjourned to a date to be fixed and the parties be at liberty to restore when the variation order referred to in paragraph 1 above is dealt with.
	4.	Costs be reserved and adjourned to be dealt with on restoration or by agreement.”

13.  By way of explanation, the two summonses referred to in paragraph 3 of the amended order related to an application by the receiver for an order that the Bank deliver up title documents relating to a certain property caught by the restraint order, and a further application by the receiver to amend the relevant summons by adding certain relief relating to the discharge of a mortgage over the same property.  For our present purposes, paragraphs 1 and 2 of the amended order are the more material parts of the amended order.

Appeal 

14.  By notice of appeal dated 28 June 2004, the Bank appealed from the amended order.  The notice of appeal has since been amended twice.  According to the re-amended notice of appeal, the Bank asked for an order that the amended order of the judge be set aside, and that it be declared that :

“notwithstanding the Restraint Order made on 27 October 2001, the Bank can still exercise its contractual and common law rights of set-off and aggregation in respect of balances in the accounts of the 22nd Respondent without first having to apply for and obtain from the Court an order to vary the Restraint Order.” (paragraph 2 of the relief sought)

15.  The grounds of appeal set out in the re-amended notice of appeal centred on the judge’s decision that the balances in the accounts in question were caught by the restraint order, and the Bank could not exercise its rights of set-off and combination without first having sought and obtained a variation of the restraint order to allow it to do so.  The Bank maintained that it could exercise its rights of set-off and combination of accounts without seeking or obtaining any variation.

16.  The appeal was opposed by the receiver, who understandably maintained the contrary position.  In his written as well as oral submissions, Mr Michael Bunting SC (appearing together with Mr Jeremy Bartlett) for the receiver also argued that what the judge had ordered in the amended order was a matter of  “case management”, which was in the “discretion” of the judge, and therefore should not be lightly disturbed by this Court save in exceptional circumstances (which leading counsel said were missing in the present appeal).

17.  For reasons that will immediately become apparent, I do not wish to express any view on the question of law raised in the ruling and by counsel on both sides in this appeal, namely whether the account balances in the bank accounts maintained by the 22^nd Respondent with the Bank were caught by the restraint order, and whether the Bank could exercise its common law and/or contractual rights of set-off and/or combination of accounts without first having applied for and obtained a variation of the restraint order.

Paragraph 1 of the amended order

18.  My reasons are as follows.  What is under appeal, according to the re-amended notice of appeal, is the amended order of the judge, but not the ruling as such.  I have already extracted above the relevant parts of the amended order.  In my judgment, on a proper construction and reading of the amended order, paragraph 1 of the amended order mandatorily requires the Bank to obtain an order for variation of the restraint order in respect of the accounts before the Bank can exercise its rights of set-off and combination (“shall”).  Paragraph 2 says that the hearing of paragraph 2 of the amended summons taken out by the receiver (i.e. payment of the monies in the accounts or originally kept therein by the Bank to the receiver) be adjourned to a date to be fixed and gives the parties liberty to restore the hearing “after the variation order referred to in paragraph 1 [of the amended order] has been dealt with”. 

19.  Likewise, paragraph 3 of the amended order adjourns the hearing of the two other summonses (concerning a certain property covered by the restraint order) to a date to be fixed and gives the parties liberty to restore the same “when the variation order referred to in paragraph 1 … is dealt with”.

20.  Thus read, the question that arises immediately is whether the court has any jurisdiction or power, whether under the Ordinance or under any other sources of law, to order or mandatorily require the Bank to apply for (let alone to successfully obtain) a variation of the restraint order in relation to its (intended) exercise of the rights of set-off and/or combination of the bank balances covered by the restraint order.

21.  After this question was raised with leading counsel at the hearing of the appeal, Mr Bunting SC very fairly conceded that if what I have said above should represent the correct reading of paragraph 1 of the amended order, that paragraph could not be supported because quite obviously, there is nothing in the Ordinance or anywhere else that empowers a court to order somebody like the Bank in the present case to make the type of applications for variation in question, against his or its will.

22.  Mr Bunting, however, argued that what I have set out above did not represent a correct reading of paragraph 1 of the amended order.  He suggested at one stage of his submission that paragraph 1 was only meant to encapsulate what the judge had decided in his written ruling in the form of an order (so that an appeal could be brought from it if the Bank should wish to do so), and the paragraph should be read accordingly.  But after taking further instructions (Mr Bunting did not come into the picture until the stage of the appeal) and on further reflection, his final position relating to paragraph 1 of the amended order, as I understand him, was that it should be read as a “direction” by the court to the receiver not to recognize the purported set-off or combination of accounts by the Bank in the absence of a variation of the restraint order by the court.

23.  I reject the submission.  The language used in the amended order is too clear to accommodate such a construction.  It is plain beyond reasonable argument to the contrary that paragraph 1 is directed to the Bank to take out an application for variation (and obtain the same); it is not a direction to the receiver.

24.  Furthermore, paragraph 1, when read together with the rest of the amended order, cannot be construed as simply stating or declaring a certain legal position or result, i.e. that the Bank cannot exercise its rights of set-off and combination of accounts without first having obtained a variation of the restraint order.  As noted above, that was not counsel’s understanding or submission.  In any event, the matter is governed by the actual wording of the amended order, rather than any subjective intention of the court or the parties, and there has never been any application to amend the wording of the amended order under the slip rule.  As presently worded, the amended order actually orders or mandatorily requires the Bank to apply for (and obtain) the variation.  This is clear from paragraphs 2 and 3 of the amended order which, in so many words, adjourn the hearing of paragraph 2 of the amended summons (for payment by the Bank to the receiver of the account balances or what used to be the account balances prior to the purported set-offs and/or combination) and the hearing of the other two summonses (relating to a certain property), until after the application for the variation order has been dealt with (paragraph 2), and, when the application for the variation order is dealt with (paragraph 3), respectively.

25.  Mr Bunting did not submit to the Court that paragraph 1 of the amended order should be read in a permissive manner so that in effect, it simply represented an invitation to the Bank to apply for a variation if it should wish to exercise its rights of set-off and combination of accounts.  In any event, even if such a submission had been made, I would have rejected it, for the simple reason that quite plainly the wording of paragraph 1 (and the rest of the amended order) does not permit such a reading.  This is so particularly bearing in mind the adjournment of the hearing of the remainder of the amended summons in paragraph 2 and the hearing of the other two summonses in paragraph 3 pending the hearing/disposal of the variation application. 

26.  If paragraph 1 were meant to be an invitation to make the variation application only, I would expect to find in the amended order a time set for the making of the application to vary, particularly in light of the adjournment of the hearing of the summonses referred to in paragraphs 2 and 3 of the amended order, together with provisions governing the hearing of the outstanding summonses in the event no variation application was made within the time set.

27.  The upshot of the above discussion is that paragraph 1 of the amended order, on its correct reading, mandatorily requires the Bank to make (and obtain) a variation of the restraint order, when there is no power or jurisdiction on the part of the court to so order.  It is therefore wrong, and to that extent and for that reason alone, paragraph 1 of the amended order must be set aside.  (For the sake of completeness, I should point out that by way of contrast, if an order had been made along the lines indicated in paragraph 26 of the written ruling, i.e. liberty to the parties to restore the hearing of the amended summons for further argument, no problem of the present sort would have arisen.  But that was not to be.)

Paragraphs 2 and 3 of the amended order

28.  As regards the rest of the relief sought in the re-amended notice of appeal, it should be remembered that the Bank asks for the setting aside of the whole amended order.  Paragraphs 2 and 3 of the amended order link the adjournment of the hearing of the summonses in question to the hearing/disposal of the variation application ordered under paragraph 1 of the amended order.  Given my view on the legality of paragraph 1, paragraphs 2 and 3, as presently worded, cannot be allowed to stand. 

29.  In my view, given the judge’s ruling, the right order that should be made is simply to give the parties liberty to restore the hearing of the outstanding summonses, and (for the avoidance of doubt) give the receiver general liberty to seek any further or other directions from the court pursuant to Order 30 rule 8 of the Rules of the High Court and/or paragraph 4(k) of the amended receivers’ order dated 27 December 2001.  (Paragraph 4 of the amended order deals with costs.)

Declaration refused

30.  Once paragraph 1 of the amended order goes, as I explained above, the rest of the order cannot be allowed to stand.  Once the order is gone, all that is left is the second paragraph in the relief sought by the Bank in its re-amended notice of appeal, namely a declaration that notwithstanding the restraint order, the Bank can still exercise its contractual and common law rights of set-off and aggregation without first having to apply for and obtain from the court an order to vary the restraint order.

31.  Quite plainly, the declaration sought is fact-sensitive and is not something that this Court can make without a determination on the substantive merits of the Bank’s claim of entitlement to set-off or combine the account balances.  In other words, without a determination by the judge as to whether the Bank was indeed entitled, on the facts (as opposed to law), to any set-off, or whether a combination of the accounts would really result in a net credit balance in the Bank’s favour (as is now claimed), there is no question of this Court making the declaration sought, even if one were to assume that the law point raised in the ruling ought to have been decided in the Bank’s favour.

32.  Mr Fung SC, appearing for the Bank (together with Mr Wong and Mr Ma), very fairly did not press the declaration at the hearing of the appeal, although understandably he did not formally abandon it either.

33.  In my view, no declaration should be made by this Court.  The appeal should be allowed along the lines indicated in paragraph 27 above.

Question of law raised in the ruling not dealt with

34.  Lest it should be thought that in so disposing of this appeal, I have chosen to adopt an unduly technical and narrow approach to the matter under appeal, and that the Court has lost an opportunity to decide, for the benefit of the parties and for the sake of clarifying the law in general, the substantive legal question dealt with and decided in the written ruling of the judge, I should add the following.

Subject matter of appeal

35.  Firstly, the hands of this Court are tied by the subject matter of appeal set out in the re-amended notice of appeal.  The order under appeal is the amended order. If the amended order has been made without any jurisdiction or power on the part of the court, it cannot be upheld.  Once it is gone, there is simply no peg left on which this Court may hang whatever views that it might otherwise have wished to express on the substantive question of law.

“Preliminary issue”

36.  The second reason why I am reluctant and indeed not prepared to deal with the substantive question of law raised in the written ruling is that although termed a  “preliminary issue”, I am not at all sure that this question requires a determination by the judge in order to decide the amended summons in the first place.  Put another way, I am not sure that the determination of the issue in a particular way would result in the determination of the amended summons.

37.  Here it must not be forgotten that the ruling was made in the context of the receiver’s amended summons.  Paragraph 1 of that amended summons asks for an account or disclosure of information by the Bank (here I am not at all convinced, despite Mr Bunting’s written submission lodged with the Court after completion of the oral hearing, that there is any jurisdiction or power on the part of the court, whether in the Ordinance or by analogy with Mareva injunctions, to order a third party like the Bank in the present case to give an account or disclose information – but that is quite beside the point and I wish to express no definite view on it).  Paragraph 2 of the amended summons in substance asks for payment of the account balances by the Bank to the receiver.  In relation to the payment of monies, the receiver is on sure footing.  Section 15(7) specifically empowers the Court of First Instance to require any person having possession of property in respect of which a receiver is appointed to give possession of it to the receiver.

38.  In my judgment, the substantive question of law dealt with in the ruling does not necessarily arise in relation to the applications under the amended summons, in particular the application for payment under paragraph 2 of the amended summons (which has now been adjourned pursuant to paragraph 2 of the amended order). 

39.  The matter can be tested by firstly assuming the Bank is right and there is no need to apply for a variation as a matter of law (i.e. the judge was wrong in his ruling).  That will not by itself dispose of paragraph 2 of the amended summons for payment.  This is because whether the purported set-offs or the claimed result of the combination of accounts is sustainable or not on a factual and evidential level would still have to be determined by the court according to the applicable burden and standard of proof first, before it can dispose of paragraph 2 of the amended summons. 

40.  For instance, if the court should find, as a matter of fact and evidence, that the Bank is not entitled to any set-off, or that after the combination of accounts, there is a credit balance in the 22^nd Respondent’s favour, an order may be made in favour of payment by the Bank to the receiver pursuant to the application in paragraph 2 of the amended summons.  This would be quite irrespective of whether as a matter of law, the Bank can exercise its rights of set-off and combination of accounts without a variation of the restraint order.  That illustrates the potentially academic nature of the ruling.

41.  The matter may be further tested by assuming this time the opposite legal conclusion, i.e. that the Bank cannot as a matter of law exercise the right of set-off or combination without a variation; in other words, the judge was correct in his ruling.  Furthermore, one also assumes that the Bank does not make the variation application (which is indeed the stance of the Bank).  In my judgment, it would not follow from these two assumptions that the court would necessarily make an order for payment of the account balances by the Bank to the receiver pursuant to the application of the receiver in paragraph 2 of the amended summons.

42.  To be sure, the two assumptions would mean that the Bank has, in so far as it has sought to exercise its rights of set-off and combination, committed a contempt of court in disobeying the restraint order.  Furthermore, the Bank may well have committed an offence in dealing in property covered by the restraint order: section 15(15) & (16) of the Ordinance.  But they are not questions raised by the application of the receiver in paragraph 2 of the amended summons that the court will have to deal with.

43.  What paragraph 2 of the amended summons raises is whether the court should order the Bank which, ex hypothesi, has committed a contempt (and probably a criminal offence), to make payment of the account balances to the receiver.  In this regard, firstly, it must be noted that section 15(7) which governs the application in paragraph 2 of the amended summons is couched in discretionary terms (“the Court of First Instance … may require …”).  The court has a discretion to exercise. 

44.  Secondly, in relation to a restraint order, the court is ultimately concerned with the preservation of assets that may subsequently be realized to satisfy a confiscation order (if eventually made).  At the substantive hearing of the application under paragraph 2 of the amended summons, if the court should find on the facts and evidence before it (based on the applicable burden and standard of proof) that the Bank is indeed entitled to the claimed set-offs or that upon a combination of the accounts, there is in favour of the Bank a net credit balance, there would be (– so it would seem to me) much to be said on behalf of the Bank that notwithstanding the contempt (and possible commission of an offence) the court should not exercise its discretion to order the Bank to pay over to the receiver something that the former is, as a matter of substantive law and fact, entitled to.  No useful purpose would be served by exercising the discretion in ordering payment of the monies in favour of the receiver.  The monies (ex hypothesi) would not be available for satisfaction of any confiscation order at the end of the day (so it would seem to me – as presently advised).  Nor is interim preservation of the monies an issue when one is concerned with a bank like the appellant in the present case.

45.  The above illustrates again that even if the judge was right in his ruling as a matter of law, that would not necessarily dispose of the application for payment under paragraph 2 of the amended summons in favour of the receiver.

46.  This being the case, I see little justification for this Court rendering a decision on the question of law involved in the ruling, when the question may well turn out to be academic at the end of the day.  In any event, put at the lowest, it would seem to me that at this stage, without knowing whether the question of law would or would not eventually decide or otherwise affect the outcome of the application under paragraph 2 of the amended order, and before that outcome is known, it would be unnecessary and inappropriate for this Court to make any determination on the question of law involved.

Case management and discretion

47.  Finally, the third reason for my unwillingness to deal with this question of law is that even Mr Bunting, in his own submission, referred to what the judge did in the amended order under appeal as an “exercise of case management in his discretion”.  If I have not misunderstood leading counsel’s submission, he was thereby submitting that irrespective of the correctness of the judge’s ruling, what the judge had ordered or directed, i.e. the taking out of an application to vary, was merely a “procedural mechanism” directed by the judge with a view to determining eventually the receiver’s application for payment of monies under paragraph 2 of the amended summons.  This Court was thus asked not to disturb the exercise of discretion or the direction given by way of case management.  See in particular paragraphs 19 and 20 of leading counsel’s written submission.

48.  In those circumstances, firstly, the receiver cannot be heard to complain that the way that I am proposing to dispose of this appeal is not something that was raised by the parties themselves in this appeal. For under this alternative submission of leading counsel, this Court was precisely invited to ignore the right or wrong of the ruling, and approach the amended order as a matter of case management and discretion.  That was what I have done in the earlier part of this judgment (i.e. ignoring the right or wrong of the ruling). 

49.  Secondly, hidden in leading counsel’s submission based on case management and discretion is a fatal answer to his own case. When a purported exercise in case management or a purported exercise of discretion lacks jurisprudential underpinning, it must be disturbed by this Court.  As explained above, the order made by the judge in paragraph 1 of the amended order lacks jurisdictional underpinning.  The purported exercise in case management must therefore be interfered with by this Court.

The receiver’s concern on insufficient disclosure of information

50.  Mr Bunting on behalf of the receiver was at pains to stress to the Court that the receiver is particularly concerned by the (allegedly) insufficient disclosure of information by the Bank in order to enable the receiver to decide whether the Bank has on the facts a case for setting-off or combination of accounts, at least in relation to certain transactions.  Without an application to vary the restraint order by the Bank, which the receiver hopes the Bank would take out in the light of paragraph 1 of the amended order of the judge, the receiver cannot be sure that the Bank has provided all the necessary information in question.  Put another way, paragraph 1 of the amended order will have the effect of forcing the Bank to put all the available information on the table.

51.  The receiver may have a legitimate concern regarding some of the transactions in question.  However, firstly, that cannot be a reason for upholding paragraph 1 of the amended order. 

52.  Secondly, that cannot be a reason for this Court to decide the question raised in the ruling. 

53.  Thirdly, implicit in leading counsel’s submission (and the evidence filed by the receiver) is the recognition that there have been some set-off transactions in relation to which the receiver does not object.  If I have not misunderstood leading counsel’s and the receiver’s position, this is so irrespective of whether the Bank, strictly speaking, has committed a contempt by breaching the restraint order in carrying out the set-offs in the absence of a variation at all.  That reinforces my point above that the question of law raised in the ruling might well be, at the end of the day, found to be academic. 

54.  And finally, either there is a power on the part of the court or the receiver to require the Bank to give an account or make disclosure of information, or there is not.  If there is such a power, it should be properly resorted to by the receiver.  If there is no such power, it would be an abuse to seek to get round the absence of such a power by forcing the Bank, against its will, to make an application to vary the restraint order, via paragraph 1 of the amended order.

Outcome

55.   For all these reasons, I would allow the appeal, set aside the amended order and replace it with an order giving liberty to the parties to restore the hearing of the outstanding summonses, and, for the avoidance of doubt, general liberty to the receiver to apply for further or other directions pursuant to Order 30 rule 8 and/or paragraph 4(k) of the amended receivers’ order dated 27 December 2001, with costs reserved.  I would allow the appeal to that extent only, and would not grant the declaration sought in paragraph 2 of the relief set out in the re-amended notice of appeal.

56.  Given the conclusion that I have reached, I have exercised as much restraint as possible on what I should say in relation to the substantive question of law raised and decided in the ruling of the learned judge, and I have been extremely brief in my discussion of the relevant provisions in the Ordinance, the general law and counsel’s submissions.

57.  As regards costs, as substantial efforts have been put in by both sides in relation to the substantive question of law raised in the ruling – which I am not prepared to deal with in this appeal, I think a fair order to make in relation to the costs of the appeal is that one-third of the costs be borne by the receiver, with the remaining two-thirds be borne by the parties themselves.  I would make a costs order nisi in those terms.