TSAI ENG MENG v. CHA MOU SING, PAYSON AND OTHERS

HCA 773/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 773 OF 2010

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REASONS FOR DECISION

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1. On 26 May 2010, I granted ex parte injunctions to the Plaintiff in these proceedings, Mr Tsai Eng Meng (“Mr Tsai”), to prevent the 1^st and 2^nd Defendants, Messrs Payson and Johnson Cha (“the Chas”) from completing the sale of their shareholding in Pelaka Investments Limited (“Pelaka”) to the 3^rd Defendant, Mr Wong Ching (“Mr Wong”), pursuant to an agreement entered into by the Chas and Mr Wong on 2 March 2010, under which the Chas agreed to sell that shareholding to Mr Wong (“the Wong Agreement”). The injunctions also prohibited the Chas from selling, transferring or otherwise disposing of their shareholding in Pelaka, or causing or permitting Pelaka to sell, transfer or otherwise dispose of its shareholding in Antenna Investments Limited (“Antenna”), which itself was a shareholder in Asia Television Limited (“ATV”) which operates one of Hong Kong’s two free television broadcasting services. So far as Mr Wong was concerned, the injunctions granted prevented him from completing the purchase of the Pelaka shares that were the subject of the Wong Agreement.

2. The inter partes hearing of Mr Tsai’s application to continue the injunctions so granted took place on 28 and 29 July 2010.  At the end of the hearing, I substantially continued the injunctions against the Chas, but discharged the injunctions against Mr Wong.  When doing so, I indicated that I was satisfied that there was a serious question to be tried in relation to Mr Tsai’s claims against the Chas, that damages would not be an adequate remedy for Mr Tsai, and that the balance of convenience lay in favour of continuing the injunctions on an interlocutory basis against the Chas.  However, so far as Mr Wong’s position was concerned, I was persuaded that although I was satisfied that there was a serious question to be tried in relation to the claims advanced against him by Mr Tsai, it would not be right to continue the injunction against him, as his alleged liability to Mr Tsai was secondary to that of the Chas, and there was no reason to suppose that he would attempt to cause the Chas to breach the terms of the injunction against them by procuring completion of the Wong Agreement notwithstanding that they had been enjoined from doing so.  As far as costs were concerned, I ordered that as between Mr Tsai and the Chas, these should be the Plaintiff’s costs in the cause, while as between Mr Tsai and Mr Wong, these should be costs in the cause.

3. I also indicated that I would hand down fuller reasons for my decision subsequently.  These are those reasons.

4. These proceedings, and in particular these applications, are essentially a further battle in an overall struggle for control of ATV.  The background is described in my judgment of 30 April 2010 in HCA 317/2010, which concerned an application by San Want Media Holdings Limited (“San Want”), a company effectively controlled by Mr Tsai, in derivative proceedings brought by it on behalf of Antenna, to prevent ATV from issuing convertible bonds, in alleged breach of a shareholders’ agreement relating to ATV.  In that judgment, I set out in some detail the arrangements that had been made to enable Mr Tsai to invest in ATV, and the structure that was put in place for him to do so.  I do not propose to repeat that exposition here, but for present purposes, the most relevant parts of that background are set out in paragraphs 17 to 21 which deal with the Term Sheet dated 23 January 2009 (“the Term Sheet”) setting out the principal terms on which the Chas and Mr Tsai were to invest in ATV, paragraphs 22 to 24 which deal with the introduction of Antenna into the investment structure, paragraphs 36 to 45 which deal with the Letter of Intent dated 7 April 2009 (“the Letter of Intent”) and the effect of its implementation, and paragraphs 56 to 63 which deal with the emergence of Mr Wong as a possible additional or alternative investor in ATV and the Wong Agreement

5. In these proceedings, Mr Tsai essentially complains that by agreeing to sell their interest in Pelaka to Mr Wong, the Chas are in breach of an implied term of the Letter of Intent, in that they will (if the Wong Agreement is completed) have put it out of their power to honour their obligations to Mr Tsai under the Letter of Intent.  Mr Tsai’s claim against Mr Wong is that by entering into the Wong Agreement with the Chas, he has induced or procured them to breach their obligations to Mr Tsai.

6. As I explained in my judgment of 30 April 2010, because of ATV’s urgent need for a new investor to provide funds for its continued operation, Mr Tsai’s investment in ATV, which he made through San Want, was structured to conform with requirements under the Broadcasting Ordinance regarding control of television broadcasters.  In consequence, Mr Tsai was to acquire 49% of the A shares (which carried voting rights, but no economic interest) and 100% of the B shares (which carried economic interests but no voting rights) of Antenna (which itself acquired 47.58% of ATV’s shares from an existing investor), while the Chas were to hold 51% of the A shares of Antenna.  In this way, Mr Tsai held the complete economic interest in Antenna (and the 47.58% of ATV’s shareholding held by it), but without voting control, thus retaining a shareholding structure which had been accepted by the Broadcasting Authority.  However, under the Term Sheet, it was envisaged that at a later stage, subject to obtaining the necessary consents from the Broadcasting Authority, Mr Tsai or someone nominated by him could acquire a further 2% of Antenna’s A shares and a further 2.75% shareholding in ATV from Panfair Holdings Limited (“Panfair”) (a company owned by the Chas, which separately held 10.75% of the shares in ATV).  If these further transactions happened, Mr Tsai, whether by himself or jointly with persons nominated by him, would have voting control over Antenna, and would (through Antenna and whoever held the further 2.75% shareholding in ATV to be acquired from Panfair) also hold a majority shareholding in ATV.

7. These further steps were (broadly speaking) reflected in the Letter of Intent of 7 April 2009, which was entered into between Mr Tsai, the Chas, Panfair, San Want and Pelaka, and contained the following relevant terms:-

“2. CONSENT

2.1 [Mr Tsai] shall be entitled at any time during the five years after the Completion Date (“five-year period”) in his sole discretion to request all parties hereto to use all reasonable efforts to obtain CONSENT [of the Broadcasting Authority] for the transactions set out in clause 3.1 and the parties agree that as and when requested by [Mr Tsai] they will each use all reasonable efforts to do so.

2.2 After the five-year period with respect to the transactions the subject of clause 3.2 all the parties agree to use all reasonable efforts to obtain CONSENT where applicable.

3. TRANSACTIONS

3.1 Subject to and forthwith upon CONSENT where applicable being obtained for the following:-

(a) [Panfair] shall sell and [Mr Tsai] shall purchase free from Encumbrances 36,196,905 ATV shares (being the equivalent of 2.75 percent of the total issued share capital of ATV) for the sum of HK$27,500,000 payable on completion of the transaction … Subject to CONSENT the said ATV shares may on completion be transferred to a nominee of [Mr Tsai].

(b) [The Chas] shall transfer to [Mr Tsai] or subject to Encumbrances 100 Class A voting shares of [Antenna] (“A shares”) in consideration of:-

(i) [Mr Tsai guaranteeing repayment in favour of Panfair, within 6 months of the completion of the sales of such shares, of a HK$200 million convertible bond issued by ATV and held by Panfair] and

(ii) [Mr Tsai, in certain defined circumstances, to acquire from Panfair, or procure a third party to acquire from Panfair, Panfair’s remaining 8% shareholding in ATV for HK$110 million.]”

8.  Clause 3.2 provided for certain transactions to take place, subject to consent being obtained from the Broadcasting Authority, after the expiry of the five year period.  In effect, this clause provided that if either Mr Tsai or Panfair or Pelaka wished to sell their interests in ATV to a third party, they could only do so if the other parties were invited to join in (or tag along) to the proposed sale, at the same price per share, if they wished to do so.  However, this clause went on to provide that where the party wishing to sell to a third party was Panfair and/or Pelaka (in effect, the Chas), and Mr Tsai did not wish to sell his shares to the third party, Panfair would only be entitled to sell 8% of the shareholding in ATV (retaining 2.75%) and Pelaka would only be entitled to sell 49% of the interest in Antenna (retaining 2%).

9.  Clause 4 of the Letter of Intent provided that:-

“Save and until the CONSENTS where applicable to the transactions in [clauses 3.1 and 3.2] have been obtained, clause 3.1 and/or clause 3.2, as the case may be, is/are not and shall not be legally binding on the parties hereof.”

10.  It is to be noted that while clause 3.1(b) of the Letter of Intent refers to the Chas selling 2% of the Antenna A shares to Mr Tsai or his nominee (subject to the necessary consent being obtained), the Chas did not in fact themselves own any shares in Antenna.  The 51% holding of A shares in Antenna was owned by Pelaka, which was in turn owned by the Chas.  It is clear that all the parties knew that this was the case.  This is somewhat curious, when one notes also that Clause 3.2 appears to proceed on the (correct) footing that it was Pelaka, rather than the Chas, that owned A shares in Antenna, as reference is made in Clause 3.2 to Pelaka being entitled to sell only 49% of its interest in Antenna in the event that Mr Tsai chose not to tag along on any proposed sale by it of its interest in Antenna. Mr Manzoni SC, appearing for Mr Tsai, acknowledged that the claim as formulated by Mr Tsai did not seek rectification of Clause 3.1(b), but suggested that this made no real difference to the outcome here.

11.  Under the Wong Agreement, the Chas agreed to sell to Mr Wong their shares in Panfair and Pelaka.  Clause 2.9.1 of the Wong Agreement is of particular relevance for present purposes.  It provided as follows:-

(1)  By clause 2.9.1(a), Mr Wong acknowledged that Panfair and the Chas had obligations with respect to the transfer of shares in ATV and Antenna to Mr Tsai or his nominees, pursuant to the Letter of Intent.

(2)  Clause 2.9.1(c) stated that both before and after completion of the Wong Agreement, Mr Wong had the right to determine and decide, in his absolute discretion, what action (or inaction) should (or should not) be taken by Panfair, Pelaka and the Chas with respect to their obligations under the Letter of Intent.

(3)  By clause 2.9.1(d), the Chas undertook to do (or not do) whatever was required to comply with Mr Wong’s decision made pursuant to his right to do so under clause 2.9.1(c), and not to take any action with respect to the obligations under the Letter of Intent without Mr Wong’s prior written consent.

(4)  By clause 2.9.1(e), Mr Wong indemnified the Chas against any liability that might arise as a result of their complying with his decision in relation to their (and Pelaka’s and Panfair’s) obligations under the Letter of Intent.

12.  On the face of it, the Wong Agreement acknowledged the existence of obligations on the part of (among others) the Chas under the Letter of Intent, but apparently arrogated to Mr Wong the right to decide whether or not those obligations should be honoured.  Given this, and as the Chas did not themselves own any shares in Antenna, but held their shareholding through Pelaka, which was to be sold to Mr Wong, it would seem that the Chas, by entering into the Wong Agreement on the terms that it contained, had put themselves in a position whereby they would no longer be able to ensure that Pelaka transferred 2% of the A shares in Antenna held by it if called on to do so by Mr Tsai if and when the relevant consents had been obtained.

13.  For Mr Tsai, Mr Mazoni contended that by putting it out of their power to perform their obligations under the Letter of Intent (by entering into the Wong Agreement under which Mr Wong was entitled to determine whether or not they should comply with their Letter of Intent obligations), the Chas were in breach of the letter of intent, and in particular of an implied term that they would not put themselves in a position in which they could not comply with their obligations (see e.g. Southern Foundries (1926) Ltd v Shirlaw [1940] AC 801, per Lord Atkin at 717, Lord Porter at 741).  Mr Manzoni submitted that the consequences of this breach could only be avoided if either the Chas had retained for themselves sufficient Antenna A shares to enable them to effect the transfer of 2% of such shares if Mr Tsai obtained the relevant consents, or if Mr Wong were to effect the transfer in their place, having obtained control of Pelaka.  However, despite requests for assurances as to this by Mr Tsai’s legal advisers, neither the Chas nor Mr Wong were prepared to give any such assurances, or to put in place arrangements to ensure that the transfers under the Letter of Intent would take place if and when necessary. Mr Manzoni submitted that in these circumstances, it was well arguable (and there was at least a serious question to be tried) that the Chas were in breach of their obligations under the Letter of Intent.  He submitted further that, in the light of the terms of the Wong Agreement, it was just as well arguable that Mr Wong had been guilty of inducing or procuring a breach by the Chas of such obligations.  It therefore followed that, as damages would not sufficiently compensate Mr Tsai for such a breach, the injunctions against the Chas and Mr Wong were rightly granted, and should be continued.

14.  Mr Bell SC, appearing for the Chas, contended that the injunctions against his clients should be discharged because:-

(1)  Mr Tsai did not have a good arguable case that the Chas were in breach of their Letter of Intent obligations, for the following reasons:-

(a)  There was no obligation imposed on them to refrain from selling their interests in Pelaka prior to the obtaining by Mr Tsai of the relevant consents.  This, he said, was clear from Clause 4 of the Letter of Intent.  As no consent for transfers to Mr Tsai or his nominee had been obtained (and no request for assistance in obtaining such consent had even been made before the Wong Agreement had been entered into), clause 3.1 was not binding on the Chas.  This was said to be a sensible commercial construction, because there was no reason why the Chas should have committed themselves to selling at a fixed price unless Mr Tsai was in a position to buy the shares.  It was also suggested that Mr Tsai essentially had obtained an option to purchase the 2% of Antenna for no consideration.

(b)  Further, there could be no implied term as contended for by Mr Tsai as:-

(i)  It would be inconsistent with the express terms of the contract which permitted the Chas to dispose of their shareholdings prior to Mr Tsai obtaining the necessary consents.

(ii)  The Letter of Intent was drafted with the heavy involvement of lawyers, and was clearly a carefully drafted document.

(iii)  It could not be said that both parties would have agreed to such a term being implied, or that it could be said to go without saying.

(c)  Moreover, the application which Mr Tsai had now made for consent (which was made late and in a dilatory fashion), was not in accordance with what was envisaged under the Letter of Intent, as it sought the transfer of A shares in Antenna to someone who was said by Mr Tsai to be independent of him (although put forward by him) and thus not his “nominee” as provided for in the Letter of Intent.

(2)  In any event, damages would be an adequate remedy for Mr Tsai.

15.  Mr Jat SC, who appeared for Mr Wong, submitted that the injunction against Mr Wong should not be continued either.  In support of this submission, he contended:-

(1)  That in order for Mr Wong to be liable for inducing or procuring a breach of contract, there had to be a breach of contract by the Chas in the first place.  However, in this case, for the reasons advanced by Mr Bell, there was no such breach on the part of the Chas. Further, in the absence of an express restraint in the Letter of Intent against the Chas alienating their shareholdings prior to the relevant consents being obtained, there was no reason to imply a term to that effect, as the natural inference was that no such restraint was intended by the parties (see AG of Belize v Belize Telecom [2009] UKPC 11, per Lord Hoffman at paragraph 17).

(2)  Even if that were wrong, there was no good arguable case against Mr Wong, as it was necessary for Mr Wong to be subjectively aware and intend that the Chas should breach their obligations before he could be held liable for inducing or procuring a breach of contract. This, said Mr Jat, could not be shown here, particularly in the light of Mr Wong’s evidence (which there was no reason to doubt) to the effect that he was not informed of or aware of any relevant implied term of which the Chas might be in breach, and he never considered that performance of the Wong Agreement would necessarily involve any breach by the Chas of their obligations under the Letter of Intent.

(3)  Damages would be an adequate remedy for Mr Tsai, if there were in fact any breach by the Chas of their obligations to him under the Letter of Intent.

(4)  In any event, there was no need for an injunction against Mr Wong if an injunction was in place against the Chas, there being no reason to suppose that Mr Wong would seek to cause the Chas to breach any injunction to which they might be subject.  In those circumstances, to enjoin Mr Wong as well would not be appropriate, particularly as his liability (if any) could only be secondary, or accessory, in nature.

16.  Dealing first with the argument that there is no good arguable case that the Chas would be in breach of their obligations under the Letter of Intent as a result of having entered into the Wong Agreement, I am unable to agree with Mr Bell and Mr Jat that this is so.  In my view, there is at least (to put it no higher) a serious question to be tried in respect of this issue.

17.  Mr Bell’s submission to the effect that on its proper construction, the Letter of Intent permitted the Chas to dispose of their (indirect) interests in ATV at any time prior to the relevant consents being obtained, is not particularly convincing.  As Mr Manzoni pointed out, this would mean that notwithstanding that Mr Tsai might have asked all parties to the Letter of Intent to assist in making an application to obtain the necessary consents, the Chas would remain free to sell their interests in ATV so long as such consents had not yet been forthcoming.  Thus, Mr Tsai could ask for assistance on day one, assistance could be provided and an application for consent submitted to the Broadcasting Authority on day two, the Chas could sell their interests in ATV on day three, notwithstanding that consent might be forthcoming on day four.  This seems to me, to put it mildly, to be a surprising possibility.  It would seem to render somewhat meaningless the apparent right granted to Mr Tsai to obtain a transfer of the stated shareholdings within a period of five years, provided that consent was obtained.

18.  While the reading of clause 4 of the Letter of Intent suggested by Mr Bell may be a possible one, it seems to me that it is at least equally possible to read that clause as meaning no more than that absent the necessary consents, the Chas could not be compelled to effect the transfers envisaged by clause 3.1(a) (or, for that matter, clause 3.1(b)) unless and until the relevant consents were obtained.

19.  Further, it seems to me that when the terms of the Letter of Intent are considered in their context, it might well be thought that the objective of clause 3.1(a) of the Letter of Intent was to provide an opportunity for Mr Tsai to obtain (whether himself or in combination with others) a majority interest (both voting and economic) in ATV, and that for the Chas to be permitted freely to dispose of their interests in ATV (and thus effectively prevent Mr Tsai from achieving this aim), during the period of five years during which Mr Tsai could seek assistance in obtaining the consents, could not have been intended.

20.  Further, it would seem from the terms of clause 3.1(a) that in the event of the transfer taking place, Mr Tsai would have to undertake substantial obligations that would seem to be for the benefit of the Chas, by guaranteeing repayment of HK$200 million worth of convertible bonds, and purchasing the Panfair’s remaining shareholding in ATV for HK$110 million.  It therefore does not seem to me that the “option” to acquire the further 2% of Antenna’s A shares, as Mr Bell termed it, was unsupported by consideration.

21.  As for Mr Bell’s point that the involvement of lawyers in the drafting of the Letter of Intent suggests that the omission of any obligation on the Chas part not to dispose of their interests in Pelaka was no accident, while there is some force in the point, I do not think that it can be regarded as conclusive against Mr Tsai’s contentions.

22.  As for Mr Jat’s submission that the absence of any express term to that effect suggested that the most natural inference was that no such restraint was intended, it is worth setting out what Lord Hoffman had to say in the Belize case at paragraphs 17 to 21:-

“17. The question of implication arises when the instrument does not expressly provide for what is to happen when some event occurs. The most usual inference in such a case is that nothing is to happen. If the parties had intended something to happen, the instrument would have said so. Otherwise, the express provisions of the instrument are to continue to operate undisturbed. If the event has caused loss to one or other of the parties, the loss lies where it falls.

18. In some cases, however, the reasonable addressee would understand the instrument to mean something else. He would consider that the only meaning consistent with the other provisions of the instrument, read against the relevant background, is that something is to happen. The event in question is to affect the rights of the parties. The instrument may not have expressly said so, but this is what it must mean. In such a case, it is said that the court implies a term as to what will happen if the event in question occurs. But the implication of the term is not an addition to the instrument. It only spells out what the instrument means.

…

21. It follows that in every case in which it is said that some provision ought to be implied in an instrument, the question for the court is whether such a provision would spell out in express words what the instrument, read against the relevant background, would reasonably be understood to mean. It will be noticed … that this question can be reformulated in various ways which a court may find helpful in providing an answer – the implied term must “go without saying”, it must be “necessary to give business efficacy to the contract” and so on – but there are not … to be treated as different or additional tests. There is only one question: is that what the instrument, read as a whole against the relevant background, would reasonably be understood to mean?”

23. Thus, the question that must be asked is: what does the Letter of Intent mean? Does it, understood against the relevant background, and having regard to its other terms, mean that the Chas cannot dispose of the whole of their indirect interests in ATV prior to the expiry of the five year period referred to in clause 3.1(a)?

24. In my view, it is clearly seriously arguable that it does mean this. Quite apart from the background to which I have referred in paragraph 19 above, it is also to be remembered that Clause 3.2, which dealt with the position after the five year period had come to an end, provided that even if the Chas were to wish to dispose of their indirect interests in ATV and could find a buyer, if Mr Tsai chose not to tag along, Panfair had to retain a 2.75% interest in ATV, and Pelaka a 2% interest in Antenna’s A shares. The existence of such obligations seems to me to cast doubt (at least) on the suggestion that the Chas were free to dispose of the whole of their indirect interest in ATV prior to consent being obtained, even within the initial five year period.

25. Finally on this aspect of the matter, I do not think that Mr Bell’s point to the effect that the consent which Mr Tsai has now sought was necessarily either dilatory, or not in accordance with what was envisaged in the letter of intent. Given that Mr Tsai was entitled to ask for assistance in obtaining the consents at any time in the five year period, it would seem to be a matter for him to decide when in that period he should do so (if at all). As it happens, he asked for such assistance early in the second year of the five year period, leaving what would seem to be ample time for the necessary consents to be obtained, if possible.

26. As for the suggestion that the person put forward by Mr Tsai is not his nominee, as she is said by him to be an independent third party, this requires “nominee” to be narrowly understood as someone who will act purely at the direction of another. It could, I think, equally well be understood as being someone who is nominated, or whose name is put forward, without necessarily connoting any sense of acting in accordance with the nominator’s directions.

27. For all of these reasons, I am satisfied that there is at least a good arguable case, and a serious question to be tried, on the issue of whether or not the Chas were in breach of their obligations under the Letter of Intent by having entered into the Wong Agreement.

28. I turn next to consider whether or not there is a good arguable case that Mr Wong has induced or procured a breach of the Letter of Intent by the Chas. As to this, in the light of the conclusion that I have just reached, Mr Jat’s first point (that there is no arguable case that the Chas were in breach of their obligations to Mr Tsai) must be rejected.

29. As for Mr Jat’s second point, this is based on the decision of the House of Lords in OBG Ltd v Allan [2008] 1 AC 1. It is sufficient for present purposes to refer to the second holding in the headnote, at p 3, which is in the following terms:-

“That inducing a breach of contract was a tort of accessory liability, and an intention to cause a breach of contract was a necessary and sufficient requirement for liability; that in order to be liable a person had to know that he was inducing a breach of contract and to intend to do so with knowledge of the consequences; that a conscious decision not to inquire into the existence of a fact could be treated as knowledge for the purposes of the tort; that a person who knowingly induced a breach of contract as a means to an end had the necessary intent even if he was not motivated by malice but had acted with the motive of securing an economic advantage for himself; that, however, a breach of contract which was neither an end in itself nor a means to an end but was merely a foreseeable consequence of a person’s acts did not give rise to liability; and that there could be no secondary liability without primary liability, and therefore a person could not be liable for inducing a breach of contract unless there had in fact been a breach by the contracting party.”

30. Mr Jat submitted that in the light of Mr Wong’s evidence to the effect that he was not informed of or aware of any relevant implied term of which the Chas might be in breach, and he never considered that performance of the Wong Agreement would necessarily involve any breach by the Chas of their obligations under the Letter of Intent, there was no reasonably arguable case that he knew and intended that there should be any such breach. With respect, however, the terms of clause 2.9.1 of the Wong Agreement do appear to me to give rise to at least a seriously arguable contention that Mr Wong was aware that there were obligations on the Chas under the Letter of Intent, and that in consequence of acting in accordance with his directions, the Chas might be exposed to liabilities. In the circumstances of this case, it would seem to me to be well arguable that such liabilities were (and were understood by Mr Wong to be) in respect of breaches of the Chas contractual obligations to Mr Tsai under the Letter of Intent. In the light of the terms of clause 2.9.1 of the Wong Agreement, I do not think that Mr Wong’s evidence in this respect can be accepted as conclusive in his favour. At the least, there is a serious question to be tried, which can only properly be resolved after hearing evidence from Mr Wong which has been tested under cross-examination.

31. I am therefore satisfied that there is a good arguable case that Mr Wong has been guilty of inducing or procuring a breach by the Chas of their obligations under the Letter of Intent.

32. Turning to the question of the adequacy of damages, I am not persuaded by Mr Bell and Mr Jat that damages would be an adequate remedy for Mr Tsai. Although they suggested that the position in this case was different from that in the earlier proceedings by San Want, I do not think that this is so. In this case, just as much as in the other, damages would be extremely difficult to assess. First, as there is no ready market for ATV’s shares, it would be hard to assess the value of the shares which Mr Tsai would be prevented from obtaining if no injunction is granted. Second, and more importantly, it seems to me that given that the objective of the transfers to be made under clause 3.1(a) of the Letter of Intent would seem to have been to enable Mr Tsai (if necessary in combination with others) to acquire effective control over ATV, any award of damages would have to place a value on that element of control, an exercise which would be extraordinarily difficult to perform. In these circumstances, I consider that damages would not be an adequate remedy for Mr Tsai.

33. Similarly, I am of the view that the balance of convenience falls in favour of preventing the Wong Agreement from being completed, as this would prevent what is (at least seriously arguably) a breach of the earlier arrangements contained in the Letter of Intent.

34. It therefore follows that the injunction against the Chas, who are primarily liable under the Letter of Intent, should be continued pending trial.

35. However, so far as Mr Wong is concerned, I accept Mr Jat’s submission that having continued the injunction against the Chas, there is no need for a separate injunction against Mr Wong, whose liability is accessory only. There is nothing to suggest that Mr Wong would not respect the injunction granted against the Chas and force through completion of the Wong Agreement. If he were to do so, knowing as he must of the terms of the injunction against the Chas, which prevents completion of the sale of Pelaka to him, he would expose himself to the risk of being pursued for contempt by reason of his having induced or procured a breach of that injunction, and it seems to me to be most unlikely that he would do this. That being the case, I did not continue the injunction against him, and it was accordingly discharged.

36. So far as costs are concerned, Mr Bell accepted that the appropriate order as between Mr Tsai and the Chas was that the costs should be the plaintiff’s costs in the cause, which is the normal order where a plaintiff succeeds in obtaining an interlocutory injunction following a contested inter partes hearing. As for the position as between Mr Tsai and Mr Wong, it seems to me that both parties had achieved a measure of success – Mr Tsai had succeeded in establishing the existence of a good arguable case for liability, although Mr Wong was successful in suggesting that notwithstanding this, no injunction should be granted against him, and in the circumstances, I considered that costs in the cause would be a fair resolution of the question of costs as between them.