HU HUNG CHIU v. PACIFIC ELECTRIC WIRE & CABLE CO LTD AND OTHERS

HCMP 1944/2017

[2018] HKCFI 2547

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1944 OF 2017

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J U D G M E N T

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Introduction

1.  By Notice of Originating Motion dated 14 September 2017 issued in the present action, the Applicant (“Hu”) seeks an Order

(1) that the dissolution of Central Pacific Enterprises Limited (“CPE”) be declared void (“Declaration”);

(2) for the removal of the 2^nd and 3^rd Respondents (“Previous Liquidators”);

(3) for the appointment of new liquidators (“New Liquidators”) to conduct an investigation into CPE’s intra‑group transactions and report to the Court; and

(4) that CPE’s books and papers be made available to the New Liquidators.

2.  There is before this court a Summons dated 18 October 2017 (“Summons”) by the 1^st Respondent (“PEWC”) against Hu for:

(1) An order to stay these proceedings against PEWC pending the payment to it the sum of HK$108,414,298.06[1], being the taxed costs ordered against Hu in HCCL Nos 16, 17 and 18 of 2009 and CACV Nos 94, 95 and 96 of 2012 (“Taxed Costs”), within 3 months from the date of the Order to be made (“Stay Application”).

(2) An order against Hu to pay into court the sum of HK$4,406,650 as security for PEWC’s costs in these proceedings, on the ground that Hu is ordinarily resident out of the jurisdiction ie Taiwan, within 28 days from the date of the Order to be made (“Security for Costs Application”).

Background

3.  PEWC is a Taiwanese company formerly listed on the Taiwan Stock Exchange.  Hu is its former director and executive vice‑president — he retired from those positions in September 1999.  Hu is also a former director of CPE, a wholly‑owned subsidiary of PEWC, which acted as a treasurer within the PEWC Group.

4.  In November 1999, CPE went into members’ voluntary liquidation.  It was dissolved in November 2001.  On 4 November 2003, CPE was revived by Order of Kwan J (as she then was) on PEWC’s application to enable it to carry out an investigation into CPE’s intra‑group transactions.  Joanne Oswin and Rainier Hok Chung Lam of PricewaterhouseCoopers were first appointed as joint and several liquidators of CPE.  They were later replaced by the Previous Liquidators.  On 2 November 2016, the Previous Liquidators held the final meeting of members of CPE, approved its final statement of account and ceased to act as its liquidators.

5.  Meanwhile, in 2004, PEWC instituted 3 High Court Actions, subsequently transferred to the Commercial List as HCCL Nos 16, 17 and 18 of 2009 (“HCCL Actions”), against inter alia Hu to recover three groups of assets in Hong Kong: (1) shares in a Hong Kong listed company viz PacMOS Technologies Holdings Ltd, (2) four residential houses in Shouson Hill, and (3) shops and carparking spaces at the South Horizons Commercial Centre (“Properties”).

6.  PEWC claimed that Hu and two of its former senior officers set up a secret network of companies to acquire the Properties with PEWC’s funds in the 1990s but failed to account for or hand over the same to PEWC.

7.  Hu’s defence in the HCCL Actions was that he, with the authorization of PEWC, transferred the Properties to a Swiss banker viz Robin Willi (“Willi”). This was done in 1999 by transferring the two companies at the pinnacle of the corporate network viz Blinco and Patagonia to a BVI company owned and controlled by Willi viz Top Selection, in return for loans injected into one of PEWC’s companies in Hong Kong viz PCHL in order to save it from its financial difficulties.  Hu alleged that the transfer was effected pursuant to a “Takeover Arrangement” negotiated between himself and Willi and authorized by PEWC.  It was thus Hu’s case that, as a result of the “Takeover Arrangement”, PEWC no longer had any rights over the companies within the corporate structure or the underlying assets which PEWC sought to recover.  

8.  After an 18‑day trial in February and March 2012, Reyes J handed down his judgment on 12 April 2012.  In the Judgment, the learned Judge found the “Takeover Arrangement” was belatedly fabricated by Hu to cover up his ownership and control, through Top Selection, of the Properties.  The learned Judge also found Willi was not a bona fide purchaser for value without notice and did not provide valuable consideration in the manner alleged.  Instead, Willi and Top Selection inter alia were nominees of Hu.  The learned Judge imposed a constructive trust over the Properties and ordered their return to PEWC.  The learned Judge also ordered the re‑transfer of the shares of the whole network of companies held by Top Selection back to PEWC, and that accounts and inquiry be made.

9.  Hu’s appeals to the Court of Appeal ie CACV Nos 94, 95 and 96 of 2012 were dismissed in September 2013.  In January and October 2014 respectively, Hu’s applications to the Court of Appeal and then to the Appeal Committee for leave to appeal were also dismissed.

10.  Hu has been ordered but has failed to pay the Taxed Costs at the levels of the Court of First Instance and Court of Appeal to PEWC.

11.  Hu has also been convicted after trial by the Taiwanese courts of a series of criminal offences involving dishonesty.  On 31 August 2017, his appeal to the Supreme Court, the final Court in Taiwan, was also dismissed and all channels of appeal by Hu in Taiwan were exhausted.  Since 29 September 2017, Hu has started to serve his custodial sentence of 14.5 years in Taiwan.

12.  As noted earlier, Hu commenced the present action by Notice of Originating Motion on 14 September 2017.  It is Hu’s belief that the Previous Liquidators had not discharged their duties properly.  It is also Hu’s evidence that his lawyers in Taiwan have advised him that he may apply for a re‑trial based on newly discovered evidence.  Hence, Hu commenced the present action in order to appoint New Liquidators of CPE so that proper investigations may be carried out to uncover evidence to establish his innocence.

Stay Application

13.  Mr Fung SC submits the relevant principles on stay of proceedings pending payment of costs are:

(1) The Court may stay the whole or part of any proceedings either generally or until a specified date or event: RHC Order 1B, rule 1(2)(e). 

(2) The Court’s inherent jurisdiction to stay proceedings is discretionary, and its exercise depends upon a consideration of all the circumstances.  The Court may order a stay where it thinks fit to do so, and it may impose terms: Halsbury’s Laws of Hong Kong 2^nd EdVol 10: Civil Procedure: High Court [90.0956].

(3) The Court may exercise its discretion to stay a second action where (a) the losing party has been ordered in the first action to pay the successful party’s costs and (b) it would be unjust and/or an abuse of the court’s process to allow the losing party to put the successful party to the further expense of a second action until the costs in the first action have been paid.

(4) The grounds for granting a stay are not that the losing party may be unable to pay the costs which might be awarded against him in the second action but that it is unfair to put the successful party to the expense of fresh proceedings while his costs incurred in the first action remain unpaid.

14.  In general terms, the legal propositions at paragraphs 13(1) and (2) above should be uncontroversial.  But as Mr Dawes SC points out in his skeleton submissions, which this court agrees, RHC Order 1B rule 1 is merely designed for the Court to manage the proceedings before it.  It is not intended to provide an additional tool for enforcement by judgment creditors: Citibank NA v Ercole Limited & Ors unrep, 1 March 2001, QBD, Deputy High Court Judge Sir Christopher Bellamy QC.  

15.  In support of the legal propositions at paragraphs 13(3) & (4) above, Mr Fung SC relies on 2 authorities.

16.  First, Investment Invoice Financing Ltd v Limehouse Board Mills Ltd [2006] 1 WLR 985.

17.  In that case, P Ltd presented a winding up petition against the defendant in relation to a number of unpaid invoices.  Those debts were disputed by the defendant, the petition was dismissed and P Ltd was ordered to pay the defendant’s costs.  P Ltd subsequently commenced a county court claim to recover the same debts.  Most of the debts were assigned to the claimant who applied to be joined as a party.  The joinder application was heard together with inter alia the defendant’s application for an order for P Ltd to provide security for the costs awarded in the winding up petition.  The Judge ordered the claimant be joined in relation to most of the debts, with P Ltd remaining as a claimant for just two and that P Ltd’s claims be struck out unless it gave security for the defendant’s costs of the winding up petition.  P Ltd failed to comply and its two remaining claims were struck out.  The defendant then sought an order that the other claims be struck out unless the claimant paid or provided security for the costs orders made against P Ltd.  The Judge held he had jurisdiction to stay the proceedings pending the satisfaction of the earlier costs orders and in the circumstances it would be right to do so.  The claimant’s appeal to the Court of Appeal was dismissed.

18.  At [39], [40] and [47], Moore‑Bick LJ explained the court’s approach in these terms:

“ 39. …it is necessary to have regard to the considerations which underlie the court’s approach to the commencement by the same person of a second set of proceedings while the costs of the first remain unpaid, as reflected in the authorities to which I have referred. In all the cases the court was moved to act by a sense that it would be unjust to allow a claimant whose action had failed for one reason or another in circumstances in which he had been ordered to pay the defendant’s costs to put the defendant to the further expense of a second action until those costs had been paid. To pursue a second action in those circumstances can properly be regarded as an abuse of the court’s process. In my view what matters is not the precise nature of the former proceedings but whether, having regard to the nature of those proceedings, their outcome and the claimant’s failure to satisfy an order for costs against him, the second proceedings can be regarded as abusive.

40. In the present case the whole purpose of presenting a winding up petition was to obtain payment of the debt represented by the 42 invoices, either by obtaining a dividend in the winding up or, more likely, by the exertion of commercial pressure. Those proceedings were dismissed because they were themselves an abuse of the process and resulted in an order for costs which has remained unpaid. In my view to start fresh proceedings to recover the same debt without paying the costs of the winding up petition was abusive and the court had power to stay the proceedings until those costs were paid.

…

47. …The grounds for making the order are not that the claimant may be unable to pay costs that might be awarded against him but that it is unfair to put the defendant to the expense of fresh proceedings while his costs of the previous proceedings remain unpaid.” (emphasis added)

19.  Second, Global Bridge Assets Ltd v Sun Hung Kai Financial Ltd [2015] 5 HKLRD 453.

20.  In that case, in the first action against the defendant commenced in 2008 (“Earlier Action”), the plaintiffs claimed against the defendant for damages for breach of, inter alia, an oral guarantee for the transfer of the defendant’s 40% shareholding in a joint venture company in the PRC.  The plaintiffs claimed that the defendant had entered into a contract with the 2^nd plaintiff as the 1^st plaintiff’s nominee (“Contract”).  The plaintiffs’ claims were struck out by the Court of Appeal in 2010 on the merits but leave was granted to the plaintiffs to apply to file an amended statement of claim.  In the amended statement of claim, the plaintiffs sought to set aside the Contract and to claim damages on the basis of fraud and, alternatively, damages for breach of the Contract.  Subsequently, the Court of Appeal struck out the plaintiffs’ claims on limitation grounds but noted that the plaintiffs might issue a fresh writ for the claim in fraud. Orders were made for the plaintiffs to pay the defendant’s costs of the Earlier Action which they failed to do.  In 2014, the plaintiffs commenced the second proceedings against the defendant, repeating the allegations made in the Earlier Action and sought an order for rescission of the Contract and damages.  The defendant applied to strike out the plaintiffs’ claims on the basis that it was an abuse of process to start the second proceedings to seek essentially the same relief as in the Earlier Action without paying the costs of the Earlier Action.

21.  At [26]‑[28] and [30], the learned Judge observed as follows:

“ JURISDICTION TO STRIKE OUT FOR ABUSE OF PROCESS

26. That the jurisdiction exists cannot be gainsaid. The judgment of Moore‑Bick LJ in Investment Invoice Financing Ltd v Limehouse Board Mills Ltd (CA) [2006] 1 WLR 985 at [25]‑[33] traces its history starting with Martin v Earl Beauchamp (1883) 25 Ch D 12 where the principle that where a plaintiff having failed in one action commences a second action for the same matter, the second action must be stayed until the costs of the first action had been paid was applied. There followed a line of authority showing its development.

27. At [39] Moore‑Bick LJ explained the considerations underlying the court’s approach as follows.

28. In Investment Financing, the Judge stayed an action commenced by the plaintiff unless two costs orders made against the plaintiff were satisfied by a specified date failing which the claim should be struck out without further order. The order was upheld on appeal. Although Moore‑Bick LJ remarked (at [44]) such an order to be highly unusual, he observed (at [34]) that it ‘is concerned with preventing an abuse of the court’s process’ and ‘the purpose of making such an order is to do substantial justice between the parties’.

…

30. It is clear from the decided cases that the court does have jurisdiction not only to stay proceedings until liability for earlier costs orders have been discharged but also, for example, to direct that the claims be struck out if the costs were not paid by a certain date. It is also clear that in exercising that discretion, the court formulates the appropriate order taking into account all the circumstances of the case and the previous history of the litigation between the parties (Investment Financing,at [48]).” (emphasis added)

22.  It is Mr Fung SC’s submission that abuse of the process of the court can take various forms and should not be limited to relitigating the same subject matter in a second action without paying the costs of the first action. In his skeleton argument at [24] to [ 26], Mr Fung SC argues that:

(1) It is clear Hu’s ultimate aim in bringing the present proceedings is to search for favourable evidence to enable him to revisit and overturn (1) the conclusions made by Reyes J in the HCCL Actions in relation to the “Takeover Arrangement” and (2) the learned Judge’s views on his credibility.  

(2) Accordingly, one of the main purposes of Hu is to challenge the conclusions and findings made in the HCCL Actions concerning the “Takeover Arrangement”.  As confirmed by his Taiwanese legal representative, Hu needs new evidence to be obtained by the New Liquidators to support the “Takeover Arrangement” in order to establish his innocence.  The HCCL Actions and the present proceedings are therefore in respect of the same, or substantially the same, subject matter, namely the “Takeover Arrangement”.

(3) It would be highly abusive for Hu to pursue the present proceedings in circumstances where (1) one of the clear purposes of seeking the new evidence is to impugn the concurrent findings made in the HCCL Actions and such an act would therefore amount to a “scandal to the administration of justice” and (2) Hu has deliberately failed to pay to PEWC any part of the Taxed Costs.

23.  In Parakou Shipping Pte Ltd v Jinhui Shipping and Transportation Ltd [2011] 2 HKLRD 1 at [87]‑[88], Reyes J explained the law on collateral attack as an abuse of process in this way:

“ 87. It may be an abuse of process for a plaintiff, P, to initiate proceedings in Court for the purposes of mounting a collateral attack upon an adverse final decision against P made by another Court or tribunal of competent jurisdiction in previous proceedings. This is especially so where P has had a full opportunity of contesting the decision in the Court by which it was made. Abuse arises because it would be “a scandal to the administration of justice if, the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same case again”. See Hunter v Chief Constable of the West Midlands Police [1982] AC 529 (Lord Diplock at 541B and at 542C (citing from Lord Halsbury LC in Reichel v Magrath (1889) LR 14 App Cas 665, 668)).

88. Where there is an abuse, the Court may refuse to allow the subsequent proceedings to continue in whole or part.” (emphasis added)

24.  In response, Mr Dawes SC submits that while there is a principle that where a party, who has been unsuccessful in one action and has sustained an adverse costs order, commences further proceedings in respect of the same subject matter, the Court may exercise its inherent jurisdiction to stay the second action until the costs of the first action are paid, this principle should not be elevated into a wide discretion to enforce unsatisfied cost orders in separate proceedings. 

25.  In support of his submission, Mr Dawes SC refers this court to Society of Lloyd’s v Jaffray & Ors [1999] 1 All ER (Comm) 354, a decision of Colman J.  At 362j‑363b, the learned Judge explained the legal position in these terms:

“ …The underlying purpose of such stay orders is to reflect the fact that there has been a needless duplication of proceedings directed to the determination of the same or substantially the same issues. There has thus been a misuse of the court’s procedure. In many cases this may fall short of an abuse of process or vexatiousness, such as would justify striking out the second set of proceedings. Moreover, the circumstances may not be such as to give rise to an issue estoppel which could be the basis for an application to strike out the second set of proceedings. Nevertheless, the conceptual justification for these orders is clearly to discourage unnecessary procedural duplication. They reflect a much wider and well‑established approach manifested in germaine principles, such as the nemo debit bis vexare rule, issue estoppel and Henderson v Henderson (1843) 3 Hare 100.” (emphasis added)

26.  This court agrees with Mr Dawes SC.  Indeed, Mr Dawes SC’s submission is amply supported by the authorities cited with approval in Moore‑Bick LJ’s judgment in Investment Invoice Financing Ltd v Limehouse Board Mills Ltd [2006] 1 WLR 985 at [24]‑[25] and [27]‑[28]:

“ 24. … Mr McLaren drew our attention to another line of cases which he submitted establish the principle that where a claimant starts proceedings for a second time against the same defendant in respect of the same subject matter, the earlier proceedings having been terminated in circumstances that led to an order for costs against him, the court has a discretion to stay the second proceedings until the costs of the first proceedings have been paid and will normally do so.

25. The earliest of the cases cited to us was Martin v Earl Beauchamp (1883) 25 Ch D 12. It concerned the estate of one William Jennens. The claimant, Martin, was the personal representative of Elizabeth Bunch. Martin filed a bill against the personal representatives of the deceased administrators of William Jennens’s estate for an account alleging that they had got in the greater part of the estate and had divided it between them, although Elizabeth Bunch was the sole next of kin. It appears that the action was dismissed with costs on the ground that Martin had failed to prove the title of Elizabeth Bunch as next of kin. Two years later Martin obtained a grant of letters of administration in respect of part of the estate of Jennens that remained unadministered and he then brought an action in that capacity for an account of the estate against the personal representatives of the former administrators. The judge stayed the proceedings until the costs of the first suit had been paid. Cotton LJ explained the position as follows, at p 15:

‘ The rule is established that where a plaintiff having failed in one action commences a second action for the same matter, the second action must be stayed until the costs of the first action have been paid. Here the defendant is only one of the defendants in the old suit, but he is sued in the same character as before. The plaintiff in the former suit sued as personal representative of Elizabeth Bunch, he now sues as administrator de bonis non of William Jennens. But though he is not suing in the same character as that in which he formerly sued, he is suing substantially by virtue of the same alleged title. If he recovers any part of this estate from the defendant he will recover it as a trustee for the estate of Elizabeth Bunch, and I am of opinion that he is to be treated as bringing a second suit for the same matter as the former.’

…

27. This principle was approved and applied in M’Cabe v Bank of Ireland (1889) 14 App Cas 413 in which an action was brought by the appellant in the Exchequer Division in Ireland to recover certain stock from the Bank of Ireland. The action was tried and judgment given for the defendant with costs. A second action was later begun in the Chancery Division on the basis that the original action had been brought in the wrong Division. An order was made that the action should be stayed until the appellant had paid the costs of the first action which was held to be a proper order made in accordance with the general practice. Lord Herschell said, at pp 415–416:

‘ The only question remaining is whether the order was right in so far as it stayed the proceedings in the second action until the costs in the first action had been paid. Now, my Lords, I find that it was laid down in a recent case in the Court of Appeal, Martin v Earl Beauchamp 25 Ch D 12, that ‘the rule is established that where a plaintiff having failed in one action commences a second action for the same matter the second action must be stayed until the costs of the first action have been paid’; and even although the actions were not between precisely the same parties or persons suing in the same capacity, the case was held to be within the rule inasmuch as the plaintiff there was ‘suing substantially by virtue of the same alleged title’. It cannot be denied that in the present case the parties are the same, and that the plaintiff is ‘suing substantially by virtue of the same alleged title’; and therefore I think that the present case has been properly disposed of in accordance with that rule, which I apprehend is not in any respect confined to the courts in England but applies as well to the courts in Ireland, arising as it does out of the inherent power which resides in the court to prevent a second suit being brought upon the same cause of action until the costs incurred in the first action have been paid. It is impossible for us to interfere with that which the Court of Appeal have done, which was entirely within their jurisdiction, and which I can see no reason to doubt has been right.’

28. More recently the same principle was applied by this court in Hines v Birkbeck College (No 2) [1992] Ch 33.”

27.  It is of course highly unsatisfactory for Hu to have been ordered to pay the Taxed Costs but utterly failed to do so.  But it is difficult to see why it is an abuse of the Court’s process on his part by instituting the present proceedings to “revive” CPE, appoint New Liquidators with a view to discovering fresh evidence which may be relevant to inter alia his intended application for a re‑trial of his criminal charges in Taiwan.  The present action is not and cannot be treated as concerning the “same subject matter” as the HCCL Actions. As such, this court agrees with Mr Dawes SC that the present action should not be classified as “needless procedural duplication”.

28.  At the end of the day, Hu may or may not succeed in invoking this court’s jurisdiction under section 290 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32).  That will have to be argued on another occasion.  Even if Hu succeeds in obtaining the Declaration and the Order for the appointment of New Liquidators, the New Liquidators may or may not be able to obtain any information or documents useful to Hu for the purpose of overturning his criminal conviction in Taiwan or, as suggested by Mr Fung SC, challenging the concurrent findings in the HCCL Actions.

29.  If and when Hu does institute fresh proceedings to challenge the concurrent findings in the HCCL Actions without first paying the Taxed Costs, then the authorities relied upon by Mr Fung SC and indeed by Mr Dawes SC will become highly relevant.  In that event, Hu would be truly relitigating the same subject matter in a second action and that it would be an abuse of the Court’s process for him to do so without complying with the costs orders made in the HCCL Actions.  At this point of time, the Stay Application is simply premature.

30.  This court has considerable sympathy for PEWC but it is not entirely without remedy.  As accepted by Mr Dawes SC at paragraph 28 of his skeleton submissions, PEWC may take enforcement action against Hu in Taiwan.

31.  For all the above reasons, this court must refuse the Stay Application.

Security for Costs Application

32.  This application can be dealt with very briefly.

33.  First, it is beyond dispute that Hu is ordinarily resident out of the jurisdiction in Taiwan.  As a matter of discretion, “it is the usual ordinary or general rule of practice of the Court to require a foreign plaintiff to give security for costs, because it is ordinarily just to do so”: Hong Kong Civil Procedure 2019 Vol 1 para 23/3/4.

34.  Second, Hu also acknowledges the aforesaid principle and he only takes issue with the quantum of security sought by PEWC ie HK$4,406,650 for the entire proceedings.  He suggests the appropriate sum should be no more than HK$1 million.

35.  Third, it is common ground that the Court does not embark on a mini‑taxation but acts on a broad brush basis in assessing the appropriate quantum.

36.  Fourth, it is not seriously in dispute that sufficient security or security that in all the circumstances of the case is just does not mean complete security.

37.  Fifth, this court accepts Mr Fung SC’s submission at paragraphs 31 and 32 of his skeleton argument that PEWC is entitled to adopt an active stance in opposing Hu’s application and that in so doing, it is necessary for PEWC to review the evidence in the HCCL Actions so as to present the Court with a full picture.  Indeed, having named PEWC as the 1^st Respondent, it really lies ill in Hu’s mouth to contend that PEWC should simply adopt a neutral position.

38.  PEWC has helpfully provided this court with a detailed bill of costs divided into Part A (Costs and Disbursements in relation to Hu’s application) and Part B (Costs and Disbursements in relation to PEWC’s present application).  Part A of the bill suggests that a team of four solicitors[2], admitted between 1978 and 2009, have spent and will have to spend almost 300 hours even with the assistance of experienced and reputable Senior and Junior Counsel for the purpose of preparing PEWC’s opposition to Hu’s application.  Part B of the bill also suggests that the same team of solicitors[3] have spent a total of 278.5 hours for PEWC’s present application, again with the assistance of experienced and reputable Senior and Junior Counsel.

39.  Taking a broad brush approach, as far as Part A is concerned, this court is minded to order security in the sum of HK$2 million.

40.  As far as Part B is concerned, it is of course true that security for costs may be ordered in relation to costs already incurred: Hong Kong Civil Procedure 2019 Vol 1 para 23/3/32. But this court cannot ignore the fact that (i) PEWC has failed in its Stay Application, (ii) the Stay Application is much more complicated than the Security for Costs Application, and (iii) the Stay Application occupied the bulk of the time spent at the hearing on 10 August 2018.

41.  This court has yet to hear the parties on costs and will direct them in due course to make oral submissions, in the event that no agreement can be reached.  If, at the end of the day, PEWC does not obtain a favourable Order for costs, it seems to this court wrong in principle to order Hu to furnish security for PEWC’s costs.  On the other hand, if PEWC does obtain a favourable Order for costs, it can always come back to court to increase the amount of security: Hong Kong Civil Procedure 2019 Vol 1 para 23/3/32. For these reasons, this court is not minded to order security for PEWC’s Part B costs.

Disposition

42.  There shall be an Order in terms of paragraph 1 of the Summons save that the sum of HK$4,406,650 be replaced by the sum of HK$2 million.

43.  Paragraph 2 of the Summons is hereby dismissed.

44.  Pending the Applicant giving security in the sum of HK$2 million in accordance with paragraph 1 of the Summons, all further proceedings against the 1^st Respondent be stayed.

45.  There shall be an Order in terms of paragraph 4 of the Summons.

46.  In the absence of agreement on costs within 21 days, the parties are directed to obtain a hearing date for submissions on costs before this court.

47.  Liberty to apply.

48.  Lastly, this court thanks the legal representatives of both sides for their helpful assistance.