INTERCONTINENTAL HOUSING DEVELOPMENT LTD v. QUEK TECK HUAT AND OTHERS

Practice - Mareva relief - discretion

While the Court has a discretion to grant new Mareva relief on a fresh application after a Mareva order made ex parte has been discharged on the ground of material non-disclosure, it is not a proper exercise of that discretion to make such an order in aid of a cause of action not identified and pleaded, or where the judge has indicated that he would not have granted the new relief had the chairman and major shareholder of the Plaintiff company (whose affirmations alone supported the application) himself been the Plaintiff.

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JUDGMENT

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Fuad, J. A.:

Previous history

1. On 7 January 1986, Mortimer J. granted Mareva injunctions, ex parte, in favour of the Plaintiff company against the 2nd and 3rd Defendants. A generally endorsed writ was issued on the same day. He varied his Orders on 13 and 16 January. On 6 May, after an inter partes hearing, Rhind J. discharged the ex parte Orders but granted new Mareva injunctions against the same two Defendants, inter alia restraining them from removing from the jurisdiction or otherwise disposing of, or dealing with, any of their assets within the jurisdiction of the Court so as to reduce their value below $127,617,747. There were also ancillary discovery orders. They now appeal.

2. The Plaintiff, Intercontinental Housing Development Limited, ("Intercontinental") is a public company incorporated in Hong Kong. They have an authorised share capital of $500m. divided into $500m. shares of $1 each. 128,406,000 of their shares have been issued and are fully paid or credited as fully paid.

3. The 1st Defendant, Mr. Quek Tech Huat, was a director of Intercontinental until August 1985.

4. The 2nd Defendant, Mr. Chew Kam Meng, was a director of Intercontinental until 19 September 1985. He is a Malaysian whose business interests are based in Penang. He visits Hong Kong on business regularly for a few days at a time, and keeps a flat here for his use.

5. The 3rd Defendant, Madam Yong Poh Choo, was, until 23 September 1985, a director of the 7th Defendant, Dixon Limited ("Dixon"). She was also a director of two other companies in the Intercontinental group. She, too, is a Malaysian, but she lives and works in Hong Kong.

6. The 4th Defendant, Mr. Low Chang Hian, is a director and one of the executive Vice-Presidents of the 5th Defendant, the Ka Wah Bank Limited. This is the bank where Intercontinental and Dixon maintained their accounts.

7. The 6th Defendant, Wanfong Nominees Limited ("Wanfong") also has an account with the Ka Wah Bank.

8. The 7th Defendant, Dixon, is a subsidiary company of Intercontinental.

9. By the time the matter came before Rhind J., the Points of Claim, and the joint Defence of Mr. Chew and Madam Yong, had been filed. The material facts Contained in these pleadings are supported by voluminous evidence contained in the affirmations that were before the judge. There were four affirmations from Mr. Ch'ng Poh, who was the Chief Executive and Deputy Chairman of Intercontinental when he made his first affirmation; since 11 January 1986 he has been the Chairman of the company. Mr. Chew and Madam Yong filed two each.

Summary of evidence

10. I will seek to summarize the substance of the evidence. Up to 17 August 1985, Intercontinental was controlled by Territorial Investments Limited ("Territorial") who held 87m. of their shares. As their principal shareholder, Mr. Quek in turn controlled Territorial.

11. Apart from his role in Intercontinental, Mr. Ch'ng was also a director of Join Park Limited ("Join Park") and their associated companies. On 18 July 1985 an agreement was executed under which Join Park agreed to buy 77m. of Intercontinental's shares from Territorial for $232,540,000; the sale was to be completed within 30 days. Mr. Quek was the warrantor.

12. The agreement provided for the payment by Join Park of a deposit of $123,540,000 upon signature and that the balance of $109m. would be paid at the time of completion.

13. At the time the agreement was entered into, Seareef Investments Limited, one of Intercontinental's associated companies, owed $89,158,071 to Intercontinental. Intercontinental were also owed $10,130,272 by a Malaysian firm of stockbrokers who managed certain quoted securities they owned.

14. Arrangements were made, in terms of the agreement, for the loans to be paid off, and the securities realised, in time for completion. All this happened, and so it came about that on the completion date Intercontinental was to receive $127,617,747 from Territorial. This is the sum of money which is the subject of the controversy between the parties.

15. The completion date for the agreement was 17 August 1985 and on that day Intercontinental duly received three cashier orders issued by the Ka Wah Bank totalling that sum, and they were paid into Intercontinental's account with the same bank.

16. But this is not all that happened on 17 August, for on that day:

17. The Ka Wah Bank had, it seems, lent $127,617,747 to Wanfong on behalf of Mr. Quek so that the three cashier orders could be issued on 17 August. Mr. Quek applied the money to repay the loan he had received.

18. Much of this is common ground.

Matters in dispute

19. In their affirmations, and by their Defence, Mr. Chew and Madam Yong, while admitting their part in the cheque dealings, say that they were told by Mr. Quek, before the agreement of 18 July 1985 was signed, that Mr. Ch'ng had said that he needed help if he were to raise the money needed to pay the full purchase price for the shares under its terms. They were given to understand that while Mr. Ch'ng hoped shortly to be able to inject significant new investments into Intercontinental, he was not then in a position to raise more than half the purchase price agreed.

20. They aver that they were also told by Mr. Quek that matters were so arranged that this problem could be met at Mr. Ch'ug's specific request, and that Mr. Ch'ng's had agreed that the money Intercontinental was to receive on completion of the agreement was to be transferred by Dixon to Mr. Ch'ng on account of the investments he proposed to inject into Intercontinental so that he could pay Territorial the balance of the purchase price.

21. They say that they also understood that when Wanfong received the money they had applied it in repayment of the loan earlier advanced by the Ka Wah Bank.

22. Mr. Ch'ng denies all this.

23. I interpolate here to say that Clause 7 of the July 1985 agreement contains the usual warranties about the assets value of Territorial, and provides that if the audited accounts (which were to be delivered by the date of completion when the balance of $109m. was due) should show a net assets value below a certain figure, the consideration payable by Join park would be reduced proportionately by the formula stipulated.

24. Perhaps the most important plank in Mr. Ch'ng's case is that despite Clause 7, and quite outside the written agreement, before it was signed, the parties had orally agreed that Join Park was entitled to hold back from the purchase price the sun of $123,540,000, in his words "without prejudice to the other remedies in the event that contrary to the warranties given there was any depletion in the value of the assets of [Territorial]".

25. Mr. Chew says that this is not what he understood. His understanding was that the whole amount due for the purchase of the Intercontinental shares had in fact been paid, partly on 26 July and partly on 17 August 1985. He was able to produce two receipts. The first acknowledges the receipt by Territorial from Camden Limited and Earlstone Limited, of $123,539,400 "being payment for 77m. Intercontinental .... shares purchased for account of Join Park Limited". The second receipt indicates that Territorial received $109m. from Join Park "being balance payment for sale of 77m. Intercontinental ....shares."

26. Mr. Chew was able to exhibit a handwritten note which Mr. Quek said had been given to him by Mr. Ch'ng when he had instructed him to prepare the first receipt in the form that it is. The note reads:

27. On behalf of JP".

It seems that Mr. Ch'ng is in the habit of omitting the last two noughts when he writes in millions.

28. Mr. Ch'ng denies that he had anything to do with the way in which the first receipt was made out. He said the receipt had been sent to Intercontinental after one of his written enquiries. He had not understood why it was in that form, adding "I never took it seriously and put it aside."

29. As to the handwritten note, Mr. Ch'ng says that in discussing the retention money, Mr. Low (D4) of the Ka wah Bank had asked him where the sum of $123,540,000 would come from, and had wanted some indication that Join Park would be in a position to pay it. He had written the note to show who would provide the funds. He explained that Camden was a company acquired by a Mr. Ngai Shiu Kit who had given him the figure appearing against that company's name in his note. He, himself, had acquired Earlstone and so he had written the larger figure against his company's name.

30. Mr. Chew disclosed other material to the Court. Once Join Park had acquired such a significant interest in Intercontinental, they were required to make a general offer to Intercontinental's other shareholders. In the Introduction to the offer document, after referring to the agreement for the purchase of 77m. shares, appears the following sentence: "The Agreement has now been completed with the result that the offer price is fixed at $3.02 per shares" [$3.02 x 77m. = $232,540,000].

31. Also shown to the Court was Intercontinental's Annual Report for 1985. The Chairman's Statement contains the following passage:

"Your Board while making positive acquisition of new business, is keeping the group's financial position under review. Since the year end, your Board has taken positive steps to reduce the indebtedness by disposing of the overseas quoted investment of HK$26,300,000 at book value; furthermore, the advance of HK$89,781,000 to an associated company was recalled and paid in full."

Points of Claim

32. I will now attempt to summarize Intercontinental's Points of Claim. They begin by setting out the personalities involved and the cheque dealing which we know is common ground. It is said that Mr. Quek and Mr. Chew did not have Intercontinental's authority to draw cheques on their account, and that they were not acting bona fide and in the best interests of Intercontinental, and further that their wrongful acts had deprived Intercontinental of the use and enjoyment of the amounts represented by the cheques - $127,617,747.

33. It is then averred that Mr. Quek, Mr. Chew, Madam Yong and Mr. Low had fraudulently combined and conspired to deprive Intercontinental of the missing money, and particulars are given. The same allegations are made about lack of authority or bona fides against Madam Yong in relation to the cheques she drew on Dixon's account. Among the other particulars, there is an averment that when Mr. Ch'ng had made enquiries about the missing money, Mr. Quek and Madam Yong "were both very uncooperative and evasive" and that they were unable to explain why they had drawn the cheques, or what had happened to the missing money.

34. Numerous particulars are given to support the plea that Mr. Low was a party to the conspiracy. The only particulars which need to be mentioned in the context of this appeal are those contained in a paragraph which states that Mr. Low "was very close" to Mr. Quek, Mr. Chew and Madam Yong. It is alleged that the wrongful acts of these four Defendants had deprived Intercontinental of the use and enjoyment of the missing money.

35. The Points of Claim continue by alleging that the Ka Wah Bank had paid Intercontinental's cheques in breach of their mandate, and that they were negligent in doing so, and particulars are given.

36. The following relief is claimed:

Judgment of Rhind J.

37. In a reserved judgment, given after a hearing which lasted six days, the judge outlined the facts and gave an indication of his preliminary appraisal of the conflicting versions put forward, on the one hand by Mr. Ch'ng, and on the other by Mr. Chew and Madam Yong.

38. As regards the explanation given by these two Defendants for their actions (that they had thought Mr. Ch'ng was going to inject fresh assets into Intercontinental) the judge commented that just how this supposed injection of fresh assets was to work had not been made clear to him.

39. However, in relation to Mr. Ch'ng's contention that Join Park was allowed to hold back $123,540,000 from the purchase price on the takeover, he noted that such documentation as there was was inconsistent with that contention "and instead points in the direction of Join Park having in fact paid that sum to Territorial".

40. I now turn to what the judge had to say on the effect of s.48 of the Companies Ordinance (Cap.32) upon the material before him. It is necessary to quote extensively from the judgment because, so it seems to me, it was central to his decision and is one of the crucial issues in this appeal.

41. Section 48 of the Ordinance (which prohibits the provision of financial assistance by a company for the purchase of its own, or its holding company's shares, with the sanction of a $2,000 fine) is first mentioned early in the judgment when the judge remarks that the part played by Mr. Chew and Madam Yong, on their own admissions, amounted to conduct which contravened the section.

42. Later, after referring to their alleged belief that Mr. Ch'ng would be injecting assets into Intercontinental, the judge said:

"         The alleged belief on the part of the 2nd and 3rd defendants that Mr. Ch'ng Poh and/or Join Park would fulfil the 2nd and 3rd defendants' hopes of injecting assets into Intercontinental was, presumably, meant to dispose me to the view that the 2nd and 3rd defendants somehow thought that their actions were in the best interests of Intercontinental and bona fide. I fail to see how it could ever be bona fide conduct in the best interests of a company to cause it to finance the purchase of its own shares, contrary to section 48 of the Companies Ordinance.

 

        While the 2nd defendant was a director of Intercontinental at the material time, the 3rd defendant never was. However, if, as she admits, the 3rd defendant was a party to a scheme to cause Intercontinental to purchase its own shares, contrary to section 48 of the Companies Ordinance, I would be surprised if the law cannot provide a remedy against her, just as much as against the 2nd defendant, for the company to recover its losses by way of damages.

 

         Thus, while strenuously denying any involvement in the heinous offence of theft, the 2nd and 3rd defendants have disclosed their participation in this far less serious offence of contravention of section 48 of the Companies Ordinance. Whether it will be of much consolation to Intercontinental to know that its money has gone as the result of a section 48 offence, rather than from common theft, must be a matter of speculation. To a victim, what normally matters is the fact that his money has gone."

43. The judge mentions s.48 of the Ordinance again in another part of his judgment, where he considers whether Intercontinental had shown a good arguable case. This is what he says:

"Whether the truth about the missing HK$127,617,747 turns out to be the version advanced by Mr. Ch'ng Poh or the version advanced by the 2nd and 3rd defendants, Intercontinental will have a good arguable case for getting its money back from the 2nd and 3rd defendants. I do not regard it as appropriate at this stage to go into the minutiae of whether Intercontinental's case is one of conversion, breach of fiduciary duty, or whether the type of action falls under some even more esoteric rubric. At this stage, I feel I should adopt a broad approach. Suffice it to say that, on the material before me in the affidavits, Intercontinental would appear to have a good arguable case. Perhaps, in due course, the pleadings might have to be amended to put Intercontinental's case in the alternative, so as to include a claim for damages arising from a breach of section 48 of the Companies Ordinance."

44. There is yet another reference to a scheme for a company to finance the purchase of its own shares, as we shall see.

45. As regards the exercise of his discretion to give Intercontinental the relief they sought, the judge said that were the dispute solely between (a) Mr. Chew and Madam Yong and the other Defendants and (b) Mr. Ch'ng he "would certainly incline to the view that equity should not lend its assistance to Mr. Ch'ng Poh by tying up the assets of the 2nd and 3rd Defendants through Mareva injunctions."

46. He then referred to the statement in the general offer document and said that Mr. Ch'ng shared responsibility for making "grossly misleading statements to the public". He added that Mr. Ch'ng had done nothing to correct the false impression given in the Chairman's Statement in the 1985 Annual Report and had been "prepared to allow the public to live in a fool's paradise". He went on to emphasise, however, that the dispute was not between the Defendants and Mr. Ch'ng, but between them and Intercontinental.

47. The judge held that Mr. Ch'ng had not been guilty of inordinate delay in not commencing proceedings before 7 January 1986 although he had discovered that the money was missing on 21 September 1985. He felt that Mr. Ch'ng had made appropriate enquiries, and such delay as there was had been reasonable.

48. The judge found that there had been material non-disclosure in the affirmations filed on behalf of Intercontinental for the ex parte hearing - Mr. Ch'ng had given the false impression that the Ka Wah Bank had paid Intercontinental's and Dixon's cheques in breach of the respective mandates and had misled the Court about the timing of the departure of intercontinental's staff after the take-over (matters upon which the affirmations filed later contain a number of allegations by Mr. Ch'ng, and counter-allegations by Mr. Chew and Madam Yong).

49. The judge was satisfied, however, that Mr. Ch'ng had not deliberately misled the Court, and that there was no material non-disclosure affecting the inter partes application. And so, while constrained to discharge the ex parte orders, relying on Yardley & Co. Ltd. v. Higson⁽¹⁾ he would grant fresh Mareva injunctions in their place.

50. About the risk that Mr. Chew and Madam Yong might dissipate their assets, basing himself on their own version of events, the judge said that they did not inspire him with confidence that they were not the sort of people who might cause their own assets to disappear from the Court's jurisdiction. If their story were true, they had played along with the scheme for a company to finance the purchase of its own shares, and this conduct did not disclose a well-developed sense of commercial morality. Intercontinental's assets had vanished with their acknowledged assistance and it was therefore not too unreasonable for the Court to fear that the same might happen to their own assets, with the result that any judgment later obtained would be frustrated.

Grounds of Appeal

51. Mr. Chew and Madam Yong appealed on a number of grounds. For reasons which will appear, I will not refer to them all.

52. Mr. Bleach, on their behalf, yesterday submitted that once the judge had decided that he should discharge the injunctions granted ex parte on the ground that there had been material non-disclosure, he had erred in law in granting fresh Mareva orders because it was wrong in principle to grant new Mareva injunctions where ex parte orders had been discharged for that reason.

53. He relied heavily on Bank Mellat v. Nikpour⁽²⁾, a case decided by the Court of Appeal in April 1982. Despite Mr. Bleach's later concession, I think that it is necessary to go into the case in some detail for reasons which will appear.

54. In that case, when the writ was issued it disclosed no cause of action and so it was amended. At the inter partes hearing the writ was once again amended. The Court of Appeal upheld the judge's decision to discharge the Mareva injunction which had been granted at the ex parte hearing, and his refusal to grant new Mareva relief.

55. Lord Denning M.R. said, at p.89:

"When a ex parte application is made for a Mareva injunction, it is of the first importance that the plaintiff should make full and frank disclosure of all material facts. He ought to state the nature of his case and his cause of action."

56. Donaldson J. (as he then was) at pp.90-91, cited a passage from the judgment of Warrington L.J. in R. v. Kensington Income Tax Commissioners etc. ex parte princess Polignac ⁽³⁾ where he had said:

"if [the applicant] does not make the fullest disclosure, then he cannot obtain any advantage from the proceedings, and he will be deprived of any advantage he may have obtained by means of the order which has thus wrongly been obtained by him ....."

Then, at p.92, Donaldson J. had this to say:

"        The rule requiring full disclosure seems to me to be one of the most fundamental importance, particularly in the context of the draconian remedy of the Mareva injunction, It is in effect, together with the Anton Piller order, one of the law's two 'nuclear' weapons. If access to such a weapon is obtained without the fullest and frankest disclosure. I have no doubt at all that it should be revoked. In this particular case a cause of action was never put forward initially; then a wrong cause of action was put forward. Finally, a third cause of action was put forward which might perhaps have supported the grant of an injunction if put forward initially.

 

        The defence was known to the plaintiffs at the time when they originally applied, but they never told the court what it was.

 

        I think that the learned judge was abundantly right, and the furthest he could conceivably have gone would have been to consider granting a Mareva injunction upon the basis of the latest version of the plaintiffs' claim, but to suspend its operation for a period so that the advantage of the previous, wrongly obtained, Mareva injunction would become spent before the new injunction came into effect. I do not know as a practical matter that that would have been the right way of granting relief to the plaintiffs, and we certainly have not been asked to make such an order."

57. Mr. Kenneth Kwok, who represented Intercontinental, submitted, as Mr. Bleach now concedes, that Mr. Bleach had put the matter too high, and that the true rule was that stated in Yardley & Co. Ltd. v. Higson⁽¹⁾ which, as I have noted, was cited by the judge. There, the plaintiff had obtained an ex parte injunction in a copyright infringement and passing off action. The submission was made by the defendants, relying upon R. v. Kensington Income Tax Commissioners etc, ex parte Princess Polignac ⁽³⁾ and Thermax v. Schott International Glass Co. Ltd.⁽⁴⁾, that once it was established that material facts had not been disclosed, the Court should refuse equitable relief as a matter of law.

58. The Court of Appeal held that even if there had been a non-disclosure before the first judge, this did not prevent the grant of further relief on a subsequent application before the Court. The Lords Justices indicated their view that on the facts the balance of convenience was in favour of the injunction continuing.

59. I pause here to note that the Thermax case ⁽⁴⁾ involved an Anton Piller order and that Browne-Wilkinson J. had held that if material matter was omitted from the governing affidavits, even though by error of judgment, the order granted must be discharged without investigating its merits.

60. Mr. Kwok also drew our attention to a Mareva case nearer home, Peter Scales v. William Wong⁽⁵⁾, where Sir Alan Huggins v.-P. said, at p.114:

"Nevertheless I am not satisfied that the non-disclosure was deliberate and with intent to deceive. It is therefore within the discretion of the court whether the order should be discharged."

61. In my judgment, the Bank Mellat case ⁽²⁾ was not intended to, and did not, lay down a rule of law, and the Court, as explained in the later case, Yardley & Co. Ltd. v. Higson⁽¹⁾, does have a discretion to grant new relief on a subsequent application in appropriate cases. However, what has consistently been said in the authorities about the draconian nature of the Mareva remedy and the need for full and frank disclosure must, in my view, firmly be borne in mind so that if the non-disclosure was both material and deliberate I find it difficult to envisage circumstances in which it could ever be proper to exercise the Court's discretion in the applicant's favour by granting fresh relief.

62. Even where the non-disclosure is not deliberate, a Court will be slow to assist the applicant because he has gained an advantage to which he was not entitled, and of which he should normally be deprived. I would add here that in a Mareva application, the factor which to some degree influenced their Lordships in the Yardley case⁽¹⁾ (that the balance of convenience lay in favour of the plaintiff) will not be present for consideration. I will have to return to Bank Mellat⁽²⁾ presently.

63. Mr. Bleach also argued that the judge had erred in relying on the Appellants' admission of facts which, if true, amounted to a contravention of s.48 of the Companies Ordinance, because no cause of action based on such a contravention had been pleaded.

64. When the judge remarked that he would be surprised if the law did not provide a remedy against Mr. Chew and Madam Yong following a breach of s.48, he must have had in mind that in such circumstances an action would lie (a) against Mr. Chew at the suit of the company for breach of his fiduciary duties as a director (Mr. Kwok also suggests such an action might lie against Madam Yong since she was an officer in the company's group), and (b) against Madam Yong as a constructive trustee; and (c), perhaps, against them both for conspiracy to effect an unlawful purpose, that is to say the provision of financial assistance, contrary to s.48 of the Ordinance. (See paragraph 38-13 of PALMER'S COMPANY LAW, 23rd Edition).

65. Mr. Kwok took us through the Points of Claim and submitted that the evidence which established the breach of s.48 was relevant to the viable cause of action already pleaded. During argument, he said that if the Court felt that it was necessary to amend the pleadings, he would apply to do so. We suggested that this was not a proper approach and this observation prompted Mr. Kwok to apply to amend his pleading.

66. He asked for leave to add a new paragraph 12A which would follow the terms of the existing paragraph 12, but substitute for the reference to "the plaintiff's" in line 1, a reference to "Dixon's"; and for "the 1st and 2nd'! in line 2, there would be substituted "3rd" - so that the new paragraph would read:

67. He also sought to add the 3rd Defendant to the next paragraph (13) so that it would read:

"In consequence of the wrongful acts of the 1st, 2nd and 3rd Defendants, the Plaintiff had suffered loss and damage ....."

68. Mr. Kwok's final amendment would be to the prayer for relief, claiming damages for breach of fiduciary duties against the 3rd Defendant as well as the 1st and 2nd Defendants.

69. We declined to grant the leave sought because if it were indeed necessary to amend the pleadings in any way to save the Mareva injunction, we felt it would be quite wrong to accede to such an application. It would have meant that Mr. Chew and Madam Yong had had their assets tied up from 7 January until yesterday (a period of nearly 6 months) on necessary averments that had never previously been made. This does not mean, of course, that Intercontinental is precluded from making an application in the High Court proceedings to amend their pleading.

70. I entertain no doubt that Mr. Bleach's submissions on what I will call "the s.48 point" must succeed. In Bank Mellat⁽²⁾, as we have seen, Lord Denning M.R. emphasized that the plaintiff must "state the nature of his case and his cause of action", and the judgment of Donaldson J. stressed the fact that no cause of action had originally been disclosed and that later a wrong cause of action had been put forward.

71. It seems to me quite essential that a viable cause of action is identified and therefore pleaded. The Mareva relief cannot stand on its own. Technical defects in pleadings will be overlooked, but here there is not the smallest hint that the cause of action (even in the alternative) is founded on a breach of the statute. A plaintiff cannot be heard to say that he has pleaded one cause of action but since the defendants have admitted certain facts, they have laid the foundation for a quite different cause of action, unless appropriate amendments are made.

72. Conspiracy, of  the kind pleaded, to defraud the company is something very far removed from conspiracy to effect the unlawful purpose of providing financial assistance for the purchase of the company's own shares. Nor do I think that Intercontinental's difficulties are overcome by the contention that whatever Mr. Chew had done he was in breach of his fiduciary duties to the company. The nature of the conduct impugned is an essential averment to found a cause of action for the breach of such duties.

73. I would say here that it was my view (which I believe was shared by my Lord, the Chief Justice) that Mr. Kwok's proposed amendments would not have founded a cause of action based on the prohibition contained in s.48 of the Ordinance, if, indeed, that was the purpose of the application.

74. This issue is important because on a fair reading of the careful judgment which is before us, despite Mr. Kwok's helpful arguments, it is quite plain to me that the exercise of the judge's undoubted discretion was very largely influenced by his reliance upon "the s.48 point". Mr. Kwok suggests that the only way to read the judgment is to appreciate that the judge felt that the Plaintiff had shown a good arguable case on the pleadings as they stood, supported by the evidence, and that the Defendants, far from undermining that case, had put themselves into greater trouble by admitting facts that showed that s.48 had been contravened.

75. I am unable to accept that submission. It seems to me that without "the s.48 point", there must be very grave doubts whether the judge would have reached the same conclusion. This can be demonstrated by notionally excising all references to s.48 from the judgment. With very great respect, in my view, the judgment cannot stand on this ground alone.

76. Although this would dispose of the appeal, I feel I should address another ground relied upon by Mr. Bleach. I have mentioned what the judge said, quite emphatically - that he would not have been minded to grant the relief sought if the dispute had been, not between Intercontinental and the Appellants, but between them and Mr. Ch'ng.

77. The judge was obviously prompted by a laudable desire to protect Intercontinental's other shareholders, but in my respectful view his approach was erroneous. Mr. Ch'ng was, at the ex parte stage, the Chief Executive and Deputy Chairman of the company. Later he was the Chairman. He effectively controlled Intercontinental through his shareholdings. The grounding affirmations were all made by him. Whatever may be the position if the action comes to be heard, at the time when the application for the Mareva relief was made, and renewed, Mr. Ch'ng was the only person the company put forward to state their case. He was their lone voice. His evidence on affirmation did not impress the judge. In the context of this case, he cannot be divorced from the company. Despite Mr. Kwok's forceful submissions, in these circumstances, it cannot be said that the learned judge's discretion was properly exercised.

78. For either of these reasons, therefore, I would allow the appeal and set aside the Mareva injunctions and the ancillary orders granted on 6 May this year.

(1)    [1984] F.S.R. 304
(2)    [1985] F.S.R. 87
(3)    [1917] 1 K.B. 486
(4)    [1981] F.S.R. 289
(5)    [1983] H.K.L.R. 110

Roberts, C.J.:

79. I agree. I have nothing I wish to add.