ZEE MARGARET v. WONG TSENG HON

HCA 2190/2016

[2021] HKCFI 59

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2190 OF 2016

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J U D G M E N T

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I.   OVERVIEW

1.  The dispute in this action arose from a co-operation agreement made between the Plaintiff and the Defendant whereby the Plaintiff agreed to inject funds in the total sum of RMB 210 million for the purpose of investing in a property development project in Shenzhen by acquiring 50% of the shareholding in a PRC company which was controlled by the Defendant.

2.  At the time when the co-operation agreement was signed, the parties contemplated that the project would be completed soon and that the shares in the PRC company would be sold within 6 months so that the parties could then realise their anticipated profit.  The co-operation agreement also contained provisions in respect of the Plaintiff’s rights/entitlements in the event that the shares were not sold within 6 months.  According to those provisions, the Plaintiff could issue a written notice requesting the Defendant to repurchase her 50% shareholding for the price of RMB 210 million (i.e. the sum invested) and also pay her a fixed sum of RMB 65 million (less tax) as a guaranteed return.  Alternatively, the Plaintiff could choose to wait until the Defendant managed to sell the shares before exercising her right to ask him to procure the repurchase of her shares at the price of RMB 210 million and receive either the 50% profit or the guaranteed return in the sum of RMB 65 million (whichever might be higher).  If the Plaintiff opted for the latter, there would be some risks and uncertainties she had to face (which will be discussed below).

3.  There is no dispute that (1) the shares were not sold within 6 months from the date when the co-operation agreement was signed and (2) the Plaintiff did not issue any written notice as stipulated under the co-operation agreement.

4.  Subsequently, by way of a supplemental agreement, the Defendant undertook that he would “continue to endeavour to sell” the shares at “the best price available” and “share 50% of the proceeds, after deduction of expenses (including tax) with [the Plaintiff]”.  Furthermore, under the supplemental agreement, the Defendant agreed to return RMB 50 million to the Plaintiff before the end of October 2008 but this would “not alter [the Plaintiff’s] entitlement to share in 50% of the proceed[s]”. 

5.  In addition, according to the supplemental agreement, the Defendant guaranteed that on or before 15 July 2009, the Plaintiff would have the entire capital contribution (i.e. RMB 210 million) returned to her “together with interest thereon from the date of payment to the date of repayment” but interest on the RMB 50 million (which shall be paid before the end of October 2008) would cease to accrue upon the Defendant’s payment of the same.  The parties also agreed that the interest “would only be payable by July 2009 when [the Defendant] is unable to dispose of the said 100% shares for a profit more than interest at 5.25% p.a. on the capital contribution”.  In other words, if the Defendant was unable to sell the shares by July 2009 or if the shares were sold at a price which could not cover the agreed interest (at 5.25% p.a.), the Plaintiff would be entitled to the agreed interest. It should be noted that the supplemental agreement no longer mentioned the guaranteed return in the sum of RMB 65 million (as originally stipulated in the co-operation agreement).  One of the fundamental questions is whether the agreed interest and the guaranteed return (or the Plaintiff’s share of the profit, whichever is higher) would co-exist if the shares could not be sold by July 2009.

6.  Notwithstanding the terms of the supplemental agreement, the Defendant failed to return RMB 50 million to the Plaintiff before the end of October 2008.  Moreover, by 15 July 2009, the shares were not yet sold and only part of the capital contribution had been returned to the Plaintiff.  In fact, by 28 December 2009, the Defendant had paid the Plaintiff a total sum of RMB 127,234,451, of which RMB 110 million was for the return of the capital contribution.  Thereafter, the parties entered into various loan agreements in respect of, amongst others, the repayment of the remaining outstanding sum of the capital contribution.

7.  The Plaintiff alleges that in or about March 2012, she became aware that the shares had been sold, albeit without knowing the details of the transaction.  She then met the Defendant on a few occasions where she made demands for payment of the guaranteed return or the proceeds of the sale (whichever would be higher) on the basis of the terms of the co-operation agreement.  In November 2015, the Plaintiff, through her then solicitors, issued a demand letter against the Defendant.

8.  In this action (which was commenced by a Writ of Summons dated 24 August 2016), although the Statement of Claim refers to the co-operation agreement, the supplemental agreement and the subsequent loan agreements made between the parties, the Plaintiff’s claim is premised upon the terms of the co-operation agreement only.  It appears from her pleaded case that the Plaintiff has acknowledged receipt of the capital contribution.  In essence, the Plaintiff seeks payment of the guaranteed return in the sum of RMB 65 million or 50% of the profit (which is higher) and an order for all necessary accounts and inquiries for the purpose of determining the amount of the profit.

9.  One of the key issues in this case is whether the Plaintiff is still entitled to seek performance of the co-operation agreement, in view of the contents of the supplemental agreement and the subsequent loan agreements.  This boils down to the interpretation of the relevant documents.

II.   FACTUAL BACKGROUND

10.  Dingfeng Mansion (鼎豐大厦) (“the Building”) is located in Shenzhen. The Building was under construction in early 2008 when its beneficial owner, Shenzhen Yusheng Investment Development Company Limited (深圳豫盛投資發展有限公司) (“Yusheng”), ran into financial difficulties. Due to lack of funds, Yusheng was unable to bring the construction work to completion.

11.  The Defendant is a businessman with investments in Hong Kong and Mainland China. In early 2008, the Defendant decided to purchase the Building with an intention to complete the project and resell the Building for a profit. Whilst he had around RMB 200 million in cash on hand, the Building’s asking price was more than twice that amount.  Accordingly, he needed someone who was prepared to join him as a co-investor to make up for the shortfall. By his own admission, it was difficult to find a suitable investor.

12.  It is not entirely clear how the Plaintiff came to know the Defendant.  The Plaintiff’s late husband, an investor in the real estate market in Mainland China, was apparently acquainted with the Defendant. However, it appears that the Plaintiff and the Defendant jointly explored various business plans from 2007 to 2015 and had also travelled to Mainland China together to inspect various properties, including the Building.  Sometime between March and April 2008, the Defendant informed the Plaintiff of his intention to acquire the Building and invited her to contribute to the investment.  The Plaintiff accepted the offer. It is common ground that the Plaintiff was a mere financier to the acquisition and did not partake in any active steps towards the purchase, completion, or resale of the Building.

The Co-operation Agreement

13.  On 17 April 2008, the Plaintiff and the Defendant signed the co-operation agreement (“the Co-operation Agreement”). In essence, the Plaintiff and the Defendant agreed to indirectly acquire the Building by purchasing the entire shareholding of Yusheng through Shenzhen Jindingfeng Investment Company Limited (深圳市金鼎峰投資有限公司) (“JDF”), a corporate entity controlled by the Defendant.  The Plaintiff would contribute a total sum of RMB 210 million as capital contribution (“the Capital Contribution”) to JDF. In return, the Plaintiff would become a 50% beneficial owner of JDF.  The Capital Contribution would then be applied by JDF towards the acquisition of Yusheng.

14.  Now, I turn to the terms of the Co-operation Agreement.

15.  First, it is expressly stated in the preamble of the Co-operation Agreement that the parties intended to dispose of Yusheng’s shares within a short period of time, which, according to the terms of the Co-operation Agreement set out below, was 6 months.  The preamble also provides that the Co-operation Agreement was based on the principle of equality and mutual benefit (“平等互利的原則”).

16.  Under Clause 1, the Defendant shall procure 深圳貴明創業投資有限公司 (an entity under his control) (“Shenzhen Gui Ming”) and 陳建創 (“Chen”) to transfer the beneficial interest of 50% of the shares of JDF to the Plaintiff’s nominee, Lou Ru Yu (樓汝于) (“Lou”). The transfer would take place by way of nominee shareholding declarations made by Shenzhen Gui Ming, Shenzhen Gui Ming’s nominee (周小峰) (“Zhou”), and Chen to Lou, who would declare that Lou held beneficial ownership of the said 50% of JDF’s shares.

17.  Clause 2 provides that in order for JDF to acquire 100% of Yusheng, the Plaintiff shall remit RMB 210 million under the name of JDF into a transaction deposit account specified by the Zhengzhou Property Rights Exchange Market.  It further records that this sum would strictly be treated as transaction deposit (“交易保証金”).

18.  According to Clause 3, other than the abovementioned RMB 210 million, all other amounts required for the purchase of Yusheng would be paid by the Defendant.

19.  Clause 4 deals with how Yusheng should be sold. It provides that JDF shall use its best endeavours to sell Yusheng at the highest price.  If JDF is able to sell Yusheng within six months of the date of the Co-operation Agreement (i.e. the 6-Month Period), the Defendant shall re-purchase the Plaintiff’s beneficial interest in 50% shares in JDF at the re-purchase price of RMB 210 million plus 50% of the profit arising from the sale of Yusheng (“the 50% Profit”).  As mentioned above, it is expressly stated that even if Yusheng was sold at a price less than what it had taken JDF to purchase Yusheng and complete the Building, this would not affect the Plaintiff’s right to recover the Capital Contribution of RMB 210 million in full.  Clause 4 in its original version in Chinese is as follows:-

“甲方[i.e. the Defendant] 承诺及保证在本合同签署后六 (6) 个月内，深圳金鼎峰 [i.e. JDF] 将尽一切努力与有意全部收购深圳豫盛[i.e. Yusheng] 的买方商讨，谋求以最高价格出售深圳豫盛100%股权。在成功出售深圳豫盛股权后，甲方将促使回购乙方 [i.e. the Plaintiff] 在深圳金鼎峰50%股权尽快完成，回购价及其支付方式为甲方 向乙方 返还人民币2亿1千万元 … 及支付因出售深圳豫盛 100%股权所获取的百分之五十 (50%) 的利润 (如有)。甲方承诺乙方所收取的百分之五十（50%）的利润将是出售深圳豫盛100%股权在中国境内外的所得经扣除甲方需要支付完成鼎丰大厦 [i.e. the Building] 的费用及因出售股权所发生及必须支付的税项 (如有) 后的利润的一半，无论有关利润 (如有) 是否反映在深圳金鼎峰的账目上。因回购乙方的深圳金鼎峰50%股权而发生的税费，由甲方承担，一概与乙方无关。

为避免误解，即使出售深圳豫盛的价款低于其购入价，绝不影响乙方收回不少于人民币2亿1千万元 … 的权利。”

20.  In accordance with Clause 4, the 6-Month Period began to run from 17 April 2008.  Hence, the Defendant had until 17 October 2008 to dispose of all the shares of Yusheng.

21.  Clauses 5 and 6 are perhaps two provisions of the Co-operation Agreement which warrant particular attention.  Clauses 5 and 6 deal with the situation whereby Yusheng could not be sold within the 6-Month Period and provide as follows:-

“5. 甲方[i.e. the Defendant] 进一步承诺及保证, 倘若在上述的六(6)个月期限内深圳金鼎峰[i.e. JDF] 未能出售深圳豫盛[i.e. Yusheng] 100%股权（非因 甲方或深圳金鼎峰可归责造成的原因）, 乙方[i.e. the Plaintiff] 有权向甲方 发出书面通知, 要求甲方在通知送达后的三（3）个工作日内, 通过深圳贵明、甲方操控的其他国内公司或代持人向乙方或其指定的代持人收购其持有深圳金鼎峰50%股权, 并向乙方支付收购价。收购价为 乙方的购入成本价（不含任何税款）, 即2亿1千万元 … , 及人民币6千5百万元 … 或等值港元的固定回报。基于上述第4段共同分担税项的原则, 甲方可从固定回报中扣除百分之八(8%)，作为日后支付税款的准备金。

6. 在不影响乙方[i.e. the Plaintiff] 任何在本合同项下的权利, 在上述第5段所述的六(6)个月期限内深圳金鼎峰[i.e. JDF] 未能出售深圳豫盛[i.e. Yusheng], 乙方可选择继续持有深圳金鼎峰50%股权，直至深圳金鼎峰 成功出售深圳豫盛全部股权, 并在当时要求甲方[i.e. the Defendant] 立即促使回购乙方 在深圳金鼎峰50%股权。除人民币2亿1千万… 的部分回购价外, 乙方 有权收取上述第5段所述的税后固定回报, 或按上述第4段所述的因出售深圳豫盛100%股权所得扣除所述的税费后的百分之五十 (50%)的利润 (取较高者)。”

22.  Clause 5 provides that the Plaintiff may issue a written notice to the Defendant requesting him to re-purchase her beneficial interest in 50% shares in JDF within 3 working days at the re-purchase price of RMB 210 million plus the Guaranteed Return in the sum of RMB 65 million (minus tax).  Alternatively, Clause 6 (also on the basis that Yusheng could not be resold in 6 months) provides that the Plaintiff may choose to continue to hold her beneficial interest in 50% in JDF until all shares in Yusheng were sold, at which time the Plaintiff may request the Defendant to procure the re-purchase of her beneficial interest in 50% shares in JDF at the price of RMB 210 million plus the Guaranteed Return or the 50% Profit, whichever is higher. 

23.  In other words, upon the expiry of the 6-Month Period (i.e. in October 2008), the Plaintiff had a choice between issuing a written notice prior to the realisation of Yusheng under Clause 5 or exercising her right to hold on to the 50% shares of JDF until the completion of sale of Yusheng pursuant to Clause 6.  In the case of the former (i.e. under Clause 5), the Defendant, upon receiving the written notice, must then acquire her shareholding in JDF by paying her the Capital Contribution, plus the Guaranteed Return.  In the case of the latter (i.e. under Clause 6), the Plaintiff may request the Defendant to procure (促使) the re-purchase of her shares in JDF at the price equal to the amount of the Capital Contribution and obtain either (a) the 50% Profit, or (b) the Guaranteed Return, whichever is higher.  In the event that the Plaintiff decides to opt for Clause 6 by holding on to her 50% shares in JDF until the sale of Yusheng was completed, the Co-operation Agreement nonetheless does not contain any provision which deals with how long the Plaintiff should wait and what remedies she would be entitled to seek if Yusheng continued to remain unsold.

24.  It must be pointed out that the Plaintiff’s claim is only predicated upon the alleged breach of Clause 6 of the Co-operation Agreement.

25.  Clause 10 provides that the Defendant understood that the Plaintiff’s participation in the acquisition of Yusheng was completely based on her trust and reliance on the Defendant’s experience and judgment.

26.  Further, according to Clause 11, if any of the terms in the Co-operation Agreement are incomplete or that any other documents under the terms of this agreement lack sufficient formalities or procedures, the Defendant shall accept and regard any such deficiencies as perfected or rectified and allow the Plaintiff to obtain the maximum benefit “最大利益” under this agreement and other relevant documents.

27.  Finally, Clause 14 provides that in relation to matters not covered by this agreement, the Defendant and the Plaintiff may, after reaching a consensus by way of negotiation, sign a supplemental agreement bearing the same legal effect “具有同等法律效力” as the Co-operation Agreement.

Events following the Co-operation Agreement

28.  The following matters took place pursuant to the Co-operation Agreement:

(1)  On 17 April 2008, the Plaintiff transferred by way of 3 separate remittances a total sum equivalent to RMB 210 million in the name of JDF into a transaction deposit account designated by the Zhengzhou Property Rights Exchange Market.  It would appear that the Plaintiff was unable to properly deposit the final tranche (equal to RMB 75 million) until 4 June 2008, but no complaint was raised by the Defendant on this issue at the material time.

(2)  On 18 April 2008, the Defendant procured the transfer of the beneficial interest in 50% of the total shares in JDF to Lou (the Plaintiff’s nominee) by instructing Zhou and Chen to issue declarations proclaiming that each of them held 25% of the shares of JDF on behalf of Lou.

(3)  On 4 July 2008, JDF purchased the entirety of Yusheng’s shares.

29.  Further, the Plaintiff and Lou entered into a separate nominee shareholding agreement, whereby Lou confirmed that she was not the true investor of JDF and did not enjoy any rights of a shareholder as such. All bonuses and dividends, as well as any other shareholding benefit obtained by Lou through Zhou and Chen, would be handed over to the Plaintiff.

The Supplemental Agreement

30.  In or about early October 2008, the Defendant informed the Plaintiff that the shares in Yusheng could not be sold before 17 October 2008 (i.e. the expiry of the 6-Month Period) and requested for additional time to look for a willing buyer. 

31.  The Plaintiff did not exercise her entitlement under Clause 5 of the Co-operation Agreement to issue a written notice demanding the Defendant to re-purchase her shares in JDF.  While she was allowed to rely on Clause 6, she was not entitled to either the Guaranteed Return or the 50% Profit until completion of the sale of Yusheng.  On 8 October 2008, the Plaintiff and the Defendant entered into the Supplemental Agreement. This agreement, which was written mainly in English, contains the following provisions: -

“Party A 黃振漢 [i.e. the Defendant] and Party B Margaret Zee [i.e. the Plaintiff] agree to supplement their [Co-operation Agreement] dated 17 April 2008 as follows:

1. Party A [i.e. the Defendant] is not to sell the ownership of the 100% 深圳豫盛股權 [i.e. Yusheng] before 17 October 2008 as anticipated in the [Co-operation Agreement].

2. Party A [i.e. the Defendant] guarantees that by 15 July 2009, [he] will continue to endeavour to sell the said 100% shares for the best price available and share 50% of the proceeds after deduction of expenses (including tax) with Party B [i.e. the Plaintiff].

3. Party A [i.e. the Defendant] will return RMB 50 million before the end of October 2008 to Party B [i.e. the Plaintiff] but this will not alter Party B’s [i.e. the Plaintiff’s] entitlement to share in 50% of the proceed (sic) as abovementioned.

4. Party A [i.e. the Defendant] also guarantees that on or before 15 July 2009, [he] will ensure that Party B [i.e. the Plaintiff] will be able to have the entire capital contribution she has made repaid to her together with interest thereon from the date of the payment [i.e. 17 April 2008] to the date of repayment (for the avoidance of doubt, interest ceases to accrue on the RMB 50 million upon repayment to Party B [i.e. the Plaintiff] by end of October 2008).

5. Interest being guaranteed would only be payable by July 2009 when Party A [i.e. the Defendant] is unable to dispose of the said 100% share for a profit more than interest at 5.25% p.a. on the capital contribution as abovementioned.

6. This is a friendly agreement. Party A [i.e. the Defendant] and Party B [i.e. the Plaintiff] agree to enter into discussions to resolve any issues not expressly covered in the [Co-operation Agreement] as supplemented.” (Emphasis added)

32.  The Plaintiff denies that she ever proposed any of the terms of the Supplemental Agreement.  According to the Plaintiff’s case, it was the Defendant who suggested the Supplemental Agreement and the subsequent loan agreements (details of which will be set out below).  The Defendant’s case is that the Plaintiff initiated the idea of having the Supplemental Agreement. There is, however, no dispute that the Supplemental Agreement was drafted by a lawyer in the office of her law firm within a short period of time.

33.  According to the Plaintiff’s evidence, prior to the making of the Supplemental Agreement, the Defendant wanted to stop the Plaintiff from exercising her right under Clause 5 of the Co-operation Agreement.  Hence, the Plaintiff did not issue any written notice as required under Clause 5.  She chose to wait and one of the purposes of the Supplemental Agreement, in particular, Clauses 2 and 4 therein, was to allow the parties to have an extension of time (from October 2008 to July 2009) to sell Yusheng.

34.  Apparently, Clause 3 of the Supplemental Agreement allowed the Plaintiff to have the right to early repayment of part of the Capital Contribution (i.e. RMB 50 million) which did not exist in the Co-operation Agreement.  Further, Clauses 4 and 5 of the Supplemental Agreement were intended to provide the Plaintiff with the right to the return of the entire Capital Contribution with guaranteed interest (from the date of payment to the date of repayment) which would become payable “by July 2009”) if, at that time, the Defendant was still unable to dispose of Yusheng for a profit more than 5.25% p.a.  It should be noted that the concept of interest never appeared in the Co-operation Agreement.

35.  In view of the above, one of the core issues in this case is whether the Plaintiff’s entitlement under Clause 6 of the Co-operation Agreement has remained intact notwithstanding the terms of the Supplemental Agreement.  The Plaintiff contends that her entitlement under Clause 6 of the Co-operation Agreement (i.e. her right to the return of the Capital Contribution in full and the Guaranteed Return or the 50% Profit, whichever is higher) is not affected by the provisions under the Supplemental Agreement. This is denied by the Defendant.  As mentioned above, whether the position of the Plaintiff or the Defendant should stand boils down to a question of interpretation of the relevant agreements.

Events following the Supplemental Agreement

36.  Despite Clause 3 of the Supplemental Agreement, the Defendant failed to return any of the RMB 50 million to the Plaintiff before the end of October 2008.  By 15 July 2009, JDF continued to hold all of its shares in Yusheng and only part of the Capital Contribution had been returned to the Plaintiff. Whilst the Plaintiff asserts that the Defendant has contravened Clause 4 of the Supplemental Agreement, her case, as explained above, is entirely premised upon the alleged breach of Clause 6 of the Co-operation Agreement.

37.  It should be noted that the following events took place after the Supplemental Agreement was signed by the parties:

(1)  On 27 February 2009, the Defendant paid to Join Pacific Worldwide Limited (“Join Pacific”), the Plaintiff’s Hong Kong company, a sum of HKD 9 million (equivalent to RMB 7,936,380).

(2)  On or around 20 May 2009, the Plaintiff issued a demand letter entitled “有關：RMB210,000,000 貸款” (“Re: RMB 210 million Loan”) for the sum of RMB 30 million to be transferred by the Defendant to one of the Plaintiff’s accounts by 27 May 2009. 

(3)  On 26 May 2009, the Defendant, through Shenzhen Gui Ming, remitted to the Plaintiff’s PRC company 廣州國金企業管理諮詢有限公司 (“Guangzhou Guo Jin”) a sum of RMB 10,000,00.

(4)  On 27 May 2009, the Defendant arranged a sum of RMB 6,000,000 to be remitted to the Plaintiff’s personal account in PRC in a sum of RMB 6,000,000.

(5)  On 2 June 2009 and 3 June 2009, the Defendant, through Shenzhen Gui Ming, transferred to Guangzhou Guo Jin a sum of RMB 10 million and another sum of RMB 4 million.

(6)  On 2 December 2009, the Defendant, through his Hong Kong company Nan Ya (H.W.) Company Limited (南亞漢威有限公司) (“Nan Ya”) transferred to Join Pacific a sum of HKD 5 million (equivalent to RMB 4,437,500.00).

(7)  On 16 December 2009, the Defendant remitted a sum of HKD 90 million (equivalent to RMB 79,875,000) to Tang Kwok Cheung (“Tang”), an accountant employed by the Plaintiff, in the following manner: -

(a)  A remittance in the sum of HKD 2,200,000 through the Defendant’s Hong Kong company, King Joy Holdings Limited (“King Joy”);

(b)  A cheque of HSBC in the sum of HKD 58,550,000 in favour of Tang; and

(c)  A cheque of Bank of East Asia in the sum of HKD 29,250,000 in favour of Tang.

(8)  On 24 December 2009, another letter was sent from the Plaintiff to the Defendant requesting the sum of RMB 4,985,570.91.

(9)  On 28 December 2009, the Defendant, through his PRC company Shenzhen Gui Ming, remitted to the Plaintiff’s PRC company 廣州市嘉豐置業有限公司 (“Guangzhou Jia Feng”) a sum of RMB 4,985,570.51 (rounded off to RMB 4,985,571.00).

38.  By 28 December 2009, the Defendant had paid the Plaintiff a total of RMB 127,234,451.00.  Of this amount, the parties agree that RMB 110 million was for the return of the Capital Contribution, whilst the remaining RMB 17,234,451 constituted interest.

The 1^st Loan Agreement

39.  On 29 December 2009, the parties signed a Memorandum of Loan Agreement (“the 1^st Loan Agreement”) in respect of the remaining balance of the Capital Contribution in the sum of RMB 100 million.  According to the 1^st Loan Agreement, the Defendant agreed to repay the Plaintiff the said balance on or before 28 December 2010, together with interest at HKD 500,000 per month, payable monthly (the “1^st Loan Agreement”).

40.  Pursuant to the 1^st Loan Agreement, the Defendant made a total of 12 interest repayments totalling HKD 6 million. On 8 December 2010, the Defendant made a repayment for the amount of HKD 19,852,685 (equivalent to RMB 17 million). No other payments regarding the principal sum were made in relation to the 1^st Loan Agreement.

The 2^nd Loan Agreement

41.  On 24 December 2010, the parties entered into another Memorandum of Loan Agreement (“the 2^nd Loan Agreement”) in respect of the remaining balance of RMB 83,000,000.00.  From 4 March 2011 to 7 July 2011, this sum, together with interest at HKD 305,000 per month, was repaid by the Defendant to the Plaintiff by way of the following transfers: -

(1)  On 4 March 2011, the Defendant remitted to the Plaintiff a sum of HKD 38,823,360 (equivalent to RMB 33,000,000);

(2)  On 26 April 2011, the Defendant paid to Join Pacific a total of HKD 14 million (equivalent to RMB 11,851,000) by way of (a) a remittance of HKD 10 million through the Bank of East Asia, and (b) a cheque of HKD 4 million.

(3)  On 27 April 2011, the Defendant remitted to the Plaintiff HKD 10 million (equivalent to RMB 8,465,000).

(4)  On 6 and 7 July 2011, the Defendant paid the Plaintiff a sum of HKD 35,010,386 (equivalent to RMB 29,684,000), comprising of (a) a remittance of HKD 14,200,000 from Nan Ya to the Plaintiff via Deutsche Bank on 6 July 2011, and (b) a remittance from the Defendant to the Plaintiff of HKD 20,810,386 via Deutsche Bank on 7 July 2011.

42.  It is accepted by both parties that a total of HKD 1,839,822.00 of interest was repaid by the Defendant in relation to the 2^nd Loan Agreement.

The Ledger Confirmations

43.  On 12 August 2011, the Plaintiff signed a Ledger Confirmation (確認函) (the “2011 Ledger Confirmation”) confirming her receipt of the repayments by the Defendant in the sum of RMB 227,234,451, being the Plaintiff’s Capital Contribution of RMB 210 million plus RMB 17,234,451 in interest accruing from 17 April 2008 to 28 December 2009.

44.  On 5 March 2012, the Plaintiff and the Defendant signed another Ledger Confirmation (the “2012Ledger Confirmation”) together with a Confirmation Letter (the “Confirmation Letter”) confirming the Plaintiff’s receipt of the Defendant’s repayment of RMB 227,234,451. The 2012 Ledger Confirmation is almost identical in every respect to the 2011 Ledger Confirmation save and except for the addition of the following sentence:

“双方确认双方以及受任何一方委托的单位或公司之间在签订此确认函之日或以后不存在任何债权债务或任何义务。”(Translation: “The parties confirm that the parties and all units or companies entrusted by either party shall not be liable to any debts or any obligations upon the date on which this letter of confirmation is signed or thereafter.”)

45.  A similar provision appears in paragraph 1 of the Confirmation Letter:

“截至2012年3月5日，甲方[i.e. the Defendant] 各参方与 乙方[i.e. the Plaintiff] 各参与方之间的债权债务已结清，双方互不负有任何权利义务。”  (Translation: “As of 5 March 2012, the claims and debts between the Participating Parties of Party A [i.e. the Defendant] and the Participating Parties of Party B [i.e. the Plaintiff] have been settled, and both parties owe neither rights nor obligations to each other.”)

46.  The abovementioned figure of RMB 227,234,451 does not include interest payments made pursuant to the 1^st and 2^nd Loan Agreements.  In light of Tang’s evidence, both parties accept that RMB 23,814,178.41 of interest was paid by the Defendant to the Plaintiff.

47.  According to the Defendant, an agreement was eventually reached in or around December 2009 for the sale of Yusheng by JDF.  The actual completion of the sale took place on or about 25 August 2010. 

48.  The Plaintiff’s case is that she first became aware that JDF had disposed of all the shares of Yusheng in or around March 2012. Between March 2012 and September 2015, she allegedly met the Defendant on a regular basis and enquired about the status of the re-sale of the Building.  The Defendant asked her to await further news.

49.  Nearly 4 years later, on or about 14 September 2015, the Plaintiff confronted the Defendant about the matter and sought to exercise her rights pursuant to Clause 6 of the Co-operation Agreement. On 23 September 2015, the Defendant handed over to the Plaintiff a statement of account (the accuracy of which is not admitted by the Plaintiff) setting out the revenue and expenses of the sale of all the shares of Yusheng by JDF.  The Defendant nevertheless refused to pay up the higher of the Guaranteed Return (less tax) or the 50% Profit.

III.   PARTIES’ POSITIONS

Parties’ pleaded cases

50.  As mentioned above, the Plaintiff’s Statement of Claim refers to the terms of the Co-operation Agreement and also the Supplemental Agreement.  It also sets out the repayment arrangements made under the 1^st Loan Agreement and the 2^nd Loan Agreement.  There is no mention in the Plaintiff’s pleaded case as to why the parties were required to enter into the Supplemental Agreement.  Neither is there any averment on the relationship between the Co-operation Agreement and the Supplemental Agreement. 

51.  As mentioned above, the Plaintiff’s case is based only on her alleged right under Clause 6 of the Co-operation Agreement.  While the Plaintiff has pleaded the alleged breach of the Supplemental Agreement on the part of the Defendant, her case has nothing to do with such breach.  The Plaintiff complains that after she knew about (and also discussed with the Defendant) the sale of Yusheng, the Defendant failed to pay her the Guaranteed Return or the 50% Profit (which is higher) in accordance with Clause 6 of the Co-operation Agreement.  Hence, the Plaintiff’s case is that her entitlement under Clause 6 of the Co-operation Agreement remains intact despite the Supplemental Agreement and the subsequent loan agreements.

52.  The Defendant’s pleaded case (i.e. the Defence) has also referred to, amongst others, the Supplemental Agreement, the loan agreements (and the repayments made by the Defendant thereunder).  In particular, the Defendant avers that:-

(1)  “[S]ince the signing of the Supplemental Agreement, the Plaintiff had from time to time regarded the sum of RMB 210,000,000 as a loan to the Defendant rather than as her capital contribution and subsequently demanded repayment from the Defendant.”

(2)  “It is noteworthy that as a result of all these repayments leaving only a balance of RMB 100,000,000, it would not be right for the Plaintiff to keep her alleged rights as to the 50% Profit and/or the Guaranteed Return.  Both the Co-operation Agreement and the Supplemental Agreement made no specific provisions covering this situation as the nature of the sum of RMB 210,000,000 had been converted into a loan repayable by the Defendant with interest at 5.25% p.a.”

(3)  “[O]n the day the 1^st Loan Agreement, i.e. 29^th December 2009, the Defendant orally informed the Plaintiff that he had in December 2009 successfully entered into an agreement to sell the shares in Yusheng.  Upon being so informed, the Plaintiff did not raise any issue about the Guaranteed Return or the 50% Profit, well knowing that her capital contribution of RMB 210,000,000.00 had been converted into a loan repayable by Defendant with interest at 5.25% p.a.”

53.  In his original Opening Submissions (filed before the trial initially scheduled to be heard by another judge who subsequently decided to recuse himself for reasons which do not concern the present discussion), the Defendant’s case was premised upon a defence of “release” in that the Defendant’s obligations under the Co-operation Agreement and the Supplemental Agreement have been “released upon full repayment of the RMB 210,000,000 with interest”.  However, in the second round of the Opening Submissions (filed for this trial), the Defendant alleges that his responsibility under Clause 6 of the Co-operation Agreement has been “varied by parties’ agreement to treat the original contribution as a loan of RMB 210,000,000 from [the Plaintiff] to [the Defendant]”. 

Pleading point

54.  The Plaintiff has taken a pleading point and complained that since neither “release” nor “variation” has been pleaded in the Defence, the Defendant should not be permitted to run any of these arguments. 

55.  I agree that the Defendant’s position(s) could have been pleaded more clearly in the Defence.  However, as discussed above, both parties have pleaded the essential facts in relation to the Co-operation Agreement, the Supplemental Agreement, the 2 Loan Agreements and also the repayments made.  Plainly, both parties have proceeded on the basis that the crux of the matter boils down to the proper construction of the relevant documents, in particular, the Co-operation Agreement and the Supplemental Agreement.

56.  In fact, leading counsel for the Plaintiff, in his closing submissions, acknowledged that the Plaintiff’s case “turns largely on the proper interpretation of the [Co-operation Agreement] and the [Supplemental Agreement]”.  It follows that the ultimate question is whether Clause 6 of the Co-operation Agreement can still be enforced by the Plaintiff or has been varied by subsequent documents.  In the Reply, the Plaintiff has repeatedly stated that her entitlement to the Guaranteed Return (less tax) or the 50% Profit (whichever is higher) under the Co-operation Agreement has not been affected by the parties’ subsequent loan agreements in respect of the repayment of the Capital Contribution.  Hence, the Plaintiff’s own case has addressed the question as to whether the underlying basis of her present claim (i.e. Clause 6 of the Co-operation Agreement) has been varied.

57.  In the present case, the relevant question of interpretation can be determined primarily on the basis of the contents of the relevant documents.  The Plaintiff has never alleged that in dealing with this issue, she has been in any way been prejudiced as a result of the above issue on pleading.

58.  By reason of the matters analysed above, I am of the view that the Plaintiff’s pleading point has no substance, and I will now proceed to discuss the issue of interpretation.

IV.   ANALYSIS

Legal principles

59.  The general approach towards interpretation of contracts has been clearly set out by Lord Hoffmann in Jumbo King Ltd v Faithful Properties Ltd & Ors (1999) 2 HKCFAR 279, 296D-I:

“The construction of a document is not a game with words. It is an attempt to discover what a reasonable person would have understood the parties to mean. And this involves having regard, not merely to the individual words they have used, but to the agreement as a whole, the factual and legal background against which it was concluded and the practical objects which it was intended to achieve. Quite often this exercise will lead to the conclusion that although there is no reasonable doubt about what the parties meant, they have not expressed themselves very well. Their language may sometimes be careless and they may have said things which, if taken literally, mean something different from what they obviously intended. In ordinary life people often express themselves infelicitously without leaving any doubt about what they meant. Of course in serious utterances such as legal documents, in which people may be supposed to have chosen their words with care, one does not readily accept that they have used the wrong words. If the ordinary meaning of the words makes sense in relation to the rest of the document and the factual background, then the court will give effect to that language, even though the consequences may appear hard for one side or the other. The court is not privy to the negotiation of the agreement – evidence of such negotiations is inadmissible – and has no way of knowing whether a clause which appears to have an onerous effect was a quid pro quo for some other concession. Or one of the parties may simply have made a bad bargain. The only escape from the language is an action for rectification, in which the previous negotiations can be examined. But the overriding objective in construction is to give effect to what a reasonable person rather than a pedantic lawyer would have understood the parties to mean. Therefore, if in spite of linguistic problems the meaning is clear, it is that meaning which must prevail.”

60.  Insofar as context is concerned, the general principles are reiterated in Fully Profit (Asia) Ltd v Secretary for Justice (2013) 16 HKCFAR 351, where Ma CJ stated at §15: –

“We have been referred to the very well-known statement of principle regarding the construction of contracts contained in the speech of Lord Hoffmann in Investors Compensation Scheme Ltd v West Bromwich Building Society, to which can be added the judgment also of Lord Hoffmann NPJ in Jumbo King Ltd v Faithful Properties Ltd. What emerges from these cases—and other authorities on contractual interpretation—is the overall importance of context when construing contractual terms. The statements of principle in Investors Compensation Scheme and in Jumbo King refer time and again to the relevant background against which the relevant contract and contractual terms must be viewed. It is in my view not particularly helpful in most cases to refer to the “ordinary and natural meaning” of words because, as very often experience tells us, there can be much debate over exactly what is the ordinary or natural meaning of words. The surer guide to interpretation is context.”

Interpretation of the relevant agreements

61.  It appears from the Co-operation Agreement that the parties were obviously quite optimistic about the prospect of the intended sale of Yusheng within 6 months (as stipulated in Clauses 4 and 5), i.e., that a sale would be reached by 17 October 2008.  In fact, the parties must have also been confident about the profit which would be acquired by such intended sale.  Otherwise, it would have been unlikely for the parties to agree on the Guaranteed Return in the sum of RMB 65,000,000 (as stipulated in Clauses 5 and 6).

62.  If the Plaintiff opted for Clause 5 and issued a notice within 6 months, the Defendant would have no choice but had to buy back the Plaintiff’s 50% shares in JDF by paying RMB 210,000,000 (as the return of the Capital Contribution) and the Guaranteed Return in the sum of RMB 65,000,000. According to Clause 5, this buy-back process had to be completed within 3 working days from the date of the notice issued by the Plaintiff.  It goes without saying that the Plaintiff would only exercise her right under Clause 5 if she was content to accept that her profit was limited to the sum of the Guaranteed Return (i.e. RMB 65,000,000) only.

63.  Alternatively, if the Plaintiff was still hopeful about the intended sale of JDF (even though it did not materialise by 17 October 2008) and aimed to gain profit which might exceed the Guaranteed Return, she could invoke Clause 6 which might give her either the Guaranteed Return or the 50% Profit (whichever is higher).  However, although it is possible that the Plaintiff’s exercise of the right under Clause 6 might provide her with a higher return on the investment, it contains some inherent risks and uncertainties:-

(1)  If the Plaintiff decided to hold on to her shares pursuant to Clause 6 in order to aim at a higher return, she had to wait until the actual sale of JDF before she could get back any return.

(2)  Under Clause 6, there is no cut-off date as to how long she might have to wait.  Neither is there anything in Clause 6 which caters for the situation where JDF could not be sold within a particular period of time.

(3)  Further, under Clause 6, at the time when JDF was sold, the Plaintiff was only entitled to ask the Defendant to procure (促使) to buy back her 50% shareholding of JDF.  Unlike the time limit of 3 days as stipulated in Clause 5, there is no mechanism in Clause 6 which provides for any time within which the Defendant would be compelled to buy back the Plaintiff’s shares.

64.  The risks and uncertainties arising from Clause 6 might explain why the parties agreed in Clause 14 of the Co-operation Agreement that a further or supplemental agreement might be required.  According to Clause 14, the Co-operation Agreement and the subsequent supplemental agreement(s) shall each have the same legal effect.  This, however, does not mean that the terms of the Co-operation Agreement could not be varied by way of the subsequent agreements and the question of variation is, at the end of the day, one of construction.

65.  According to the Plaintiff’s own evidence, one of the reasons why the parties considered the need to have the Supplemental Agreement was that the Defendant did not want the Plaintiff to exercise her right under Clause 5 of the Co-operation Agreement.  Under cross-examination, the Defendant said that he was not worried about the Plaintiff exercising her right at that time.

66.  At the time when the Supplemental Agreement was drafted and signed (i.e. on 8 October 2008), it was still unclear when Yusheng would be sold.  At that time (i.e. just more than one week before the expiry of the 6-month period as stipulated in the Co-operation Agreement), it is most likely (and it is the Plaintiff’s own evidence) that the parties did consider whether the Plaintiff should continue to exercise her rights under the Co-operation Agreement (including her right under Clause 5 of the Co-operation Agreement).  Otherwise, the Plaintiff could have simply insisted on her entitlements under Clause 5 and it would have been unnecessary for the parties to enter into the Supplemental Agreement.  As a matter of fact, the Plaintiff had never exercised her right under Clause 5 of the Co-operation Agreement.  Her present claim, as discussed above, is based only on Clause 6 of the Co-operation Agreement.

67.  The Plaintiff contends that the “main purpose of the [Supplemental Agreement] was to extend the 6-Month Period under Clause 4 of the Co-operation Agreement so as to give [the Defendant] nine more months (until 15 July 2009) to sell”.  Further, it is submitted on behalf of the Plaintiff that she would still be entitled to issue a written notice under Clause 5 of the Co-operation Agreement after entering into the Supplemental Agreement.

68.  I believe that the Plaintiff’s argument has failed to take into account the actual purpose, meaning and effect of the Supplemental Agreement.

69.  No doubt, the parties at the time of the Supplemental Agreement realised it would take longer (than originally contemplated under the Co-operation Agreement) to complete the sale of Yusheng. Whilst a date (i.e. 15 July 2009) was specifically mentioned in the Supplemental Agreement, it is clear from the contents of the document that the parties were still uncertain about the prospect of the intended sale and when it would finally materialise.  Hence, the Defendant only agreed he would “by 15 July 2009 … continue to endeavour to sell the said 100% shares [of JDF] for the best price available and share 50% of the proceeds after deduction of expenses”.

70.  While the Defendant was given more time to sell Yusheng, one of the advantages to the Plaintiff was that RMB 50 million would be returned to her “before end of October 2008” according to Clause 3 of the Supplemental Agreement.  Had the parties agreed, subsequent to the Supplemental Agreement, that the Plaintiff would still be entitled to rely on Clause 5 of the Co-operation Agreement (in that she could ask for the return of Capital Contribution in the sum of RMB 210,000,000 and the Guaranteed Return in the sum of RMB 65,000,000) by issuing a notice on or before 15 July 2009, this could have been easily specified in the Supplemental Agreement.  However, the Supplemental Agreement did not contain anything to that effect. 

71.  Clause 3 (which required the Defendant to pay a sum of RMB 50 million “before end of October 2008” to the Plaintiff) and Clause 4 of the Supplemental Agreement (which were obviously intended to ensure the return of the Capital Contribution to the Plaintiff “on or before 15 July 2009”, i.e. the expiry of the extended period for the sale of JDF) did not mention the Guaranteed Return at all.  In fact, in the Supplemental Agreement, there is no mention whatsoever of either Clause 5 or Clause 6 of the Co-operation Agreement or the Guaranteed Return.

72.  Rather, apart from seeking to guarantee the return of the entire Capital Contribution on or before 15 July 2009, Clause 4 of the Supplemental Agreement also provides that interest would accrue on the Capital Contribution from the date of payment i.e. 17 April 2008 to the date of repayment although interest would “cease to accrue on the RMB 50 million upon repayment to Party B [i.e. the Plaintiff] by end of October 2008”.

73.  Clause 5 of the Supplemental Agreement states that “[i]nterest being guaranteed would only be payable by July 2009 when Party A [i.e. the Defendant] is unable to dispose of the said 100% share for a profit more than interest at 5.25% p.a. on the capital contribution as abovementioned.”  I must say that this clause is not well-drafted because the words “payable by July 2009” look a bit odd in view of the overall sentence structure and no specific date in July 2009 was specified.  However, it is quite obvious that by Clause 5 of the Supplemental Agreement, the parties decided to take July 2009 as a cut-off date (which, according to the extended period as stipulated under Clause 2, should presumably be 15 July 2009).  What Clause 5 means is that if Yusheng could not be sold by 15 July 2009 at a profit which would exceed the interest on the Capital Contribution which would accrue in accordance with Clause 4 of the Supplemental Agreement, interest would then be payable.  Alternatively, if the intended sale could be completed by 15 July 2009 at a profit which would exceed the relevant interest, interest would not be payable as the parties would naturally be sharing the profit arising from the sale (as mentioned in Clause 2 of the Supplemental Agreement).  In their closing submissions, the Plaintiff’s counsel sought to rely on Clauses 2 and 3 to say that the Plaintiff’s right to receive the 50% Profit would remain unaffected.  But this argument has obviously ignored the meaning and effect of Clauses 4 and 5 of the Supplemental Agreement.

74.  In view of the above, it is clear from Clause 5 of the Supplemental Agreement that subject to what would happen by 15 July 2009, either interest or profit would be payable but the two would not co-exist.  During his closing submissions, the Plaintiff’s leading counsel was asked to explain the basis on which the Plaintiff could be entitled to both Guaranteed Return (or the 50% Profit whichever is high) and interest (which has already been paid). However, no satisfactory answer was provided in this regard.  In any event, any allegation that the Plaintiff should be entitled to both Guaranteed Return (or the 50% Profit, whichever is high) and interest does not make any commercial sense in the circumstances of this case.

75.  As discussed above, Clause 6 of the Co-operation Agreement failed to address what the parties should do if the Defendant continued to be unable to have Yusheng sold and also how long the Plaintiff should wait.  By agreeing on the cut-off date and also the element of interest in the Supplemental Agreement, the parties managed to address the risks and uncertainties that Clause 6 of the Co-operation Agreement failed to deal with.  In these circumstances, it is clear that the Supplemental Agreement had the effect of varying the Co-operation Agreement, at least in respect of Clauses 5 and 6 of the Co-operation Agreement.

76.  One of the arguments that the Plaintiff’s leading counsel kept repeating in his closing submissions is that if the Plaintiff was not entitled to the Guaranteed Return or her share of the profits under Clause 6 of the Co-operation Agreement as a result of the Supplemental Agreement, it would be inconsistent with the Defendant’s evidence that the Supplemental Agreement was intended to provide the Plaintiff with “a better return” (更好嘅回報).  However, this argument demonstrates a rather superficial view on the meaning of “a better return” and it is also inconsistent with the terms of the Supplemental Agreement.

77.  As discussed above, by way of the Supplemental Agreement, the Plaintiff was entitled to an early part-repayment of the Capital Contribution in the sum of RMB 50 million by the end of October 2008 and also interest which would be payable if Yusheng was not sold at a certain price by 15 July 2009.   Obviously, these benefits, which the Plaintiff was not entitled to under Clause 6 of the Co-operation Agreement, provided her with the incentives to enter into the Supplemental Agreement.  Further, as mentioned above, the Supplemental Agreement addressed the risks and uncertainties which were inherent in Clause 6 of the Co-operation Agreement.  In the absence of the Supplemental Agreement, the Plaintiff would be put in a deadlock if she simply insisted upon exercising her rights under Clause 6 (when Yusheng remained unsold) without trying to find alternative solutions. The meaning of “a better return” should therefore be assessed with reference to the commercial realities regarding the parties’ positions under both the Co-operation Agreement and the Supplemental Agreement.

78.  Finally, it should be pointed out that the Plaintiff does not dispute that the Supplemental Agreement was supported by consideration.

79.  In view of the above, given that Yusheng eventually could not be sold by 15 July 2009 and the parties subsequently entered into further agreements on interest, I have come to the conclusion that as a result of (and also by operation of) the Supplemental Agreement, the Plaintiff is not entitled to claim either the Guaranteed Return or her share of the profit under Clause 6 of the Co-operation Agreement because it has been varied and superseded by the Supplemental Agreement.

Credibility of witnesses

80.  The issue of credibility does not play any significant role in the resolution of the present dispute which turns on the interpretation of the relevant agreements.  However, given the detailed submissions provided by both the Plaintiff’s and the Defendant’s counsel in their closing submissions, I wish to say a few words on this topic.

81.  The Plaintiff’s counsel has discussed rather extensively why the Defendant is not a credible witness.  A few examples were raised in the Plaintiff’s closing submissions and they included that (1) the Defendant gave inconsistent evidence on when he first met the Plaintiff; (2) the Plaintiff complained that the Defendant, under cross-examination, tried to “shirk his responsibilities” by saying that the Plaintiff was more involved in the preparation of the Co-operation Agreement and also in the suggestion of the wording of the terms thereof; (3) the Plaintiff complained that the Defendant was coy about whether he requested the Plaintiff to enter into the Supplemental Agreement and (4) the Defendant’s evidence on whether he was capable of repaying RMB 50 million by the end of October 2008 as stipulated under the Supplemental Agreement is not believable.

82.  I do not find this part of the Plaintiff’s analysis very helpful to her claim.  Obviously, the question of when the Defendant first met the Plaintiff is irrelevant to the issue in this case.  I agree with the Defendant that it is not necessary to ascertain who suggested the wording of the Co-operation Agreement or gave instructions for the drafting of the same since there is no dispute that the parties agreed to such terms.  The same should also apply to the preparation and drafting of the Supplemental Agreement.  Further, notwithstanding the dispute as to who initiated the idea of having the Supplemental Agreement, it seems clear (as discussed above) that it was at the material time in the interests of both parties to enter into that agreement, in view of the risks and uncertainties then faced by the parties.  It is also noted that neither parties relied on the principle of contra proferentem in trying to construe any of the agreements.  Finally, the Defendant’s financial ability to repay RMB 50 million should not affect the issue of interpretation of the agreements.  In any event, the fact that he had defaulted in repaying the same has nothing to do with the Plaintiff’s claim which is not predicated upon any breach of the Supplemental Agreement.

83.  While I believe that both the Plaintiff and the Defendant have tried their best to tell the truth, they appeared at times over-cautious (and sometimes not forthcoming) in giving their answers during cross-examination when they were asked about what they might have regarded as sensitive issues such as their financial positions, their role and involvement in the preparation of the Co-operation Agreement and the Supplemental Agreement.  There are, however, two matters arising from the Plaintiff’s evidence that I should highlight here:-

(1)  Given that the Plaintiff, on her own evidence, knew that the completion of the sale of Yusheng in about March 2012, she was unable to fully and properly explain why she chose to wait until about November 2015 to cause a formal demand letter to be issued, particularly in view of the fact that it should not be difficult for her to find out the details of the sale through her own sources of information.

(2)  The Plaintiff was unable to offer any explanation as to why she signed the Ledger Confirmation dated 5 March 2012 and the Confirmation Letter which provided that any claims between the parties had been settled and there were no outstanding rights and obligations owed to each other.  I understand that subsequent conduct should not be relied on for the purpose of construing the relevant agreements in the present case; but the Court is entitled to view such conduct to assess if it is consistent with the intention having been reached at the time of the Supplemental Agreement.

V.   CONCLUSION

84.  By reason of the above analysis, I order that the Plaintiff’s action herein be dismissed.  I also make an order nisi that costs of this action be paid by the Plaintiff to the Defendant with a certificate for two counsel, to be taxed if not agreed.