JUDGMENT
 
DATED: 16 March, 1999

Le Pichon

This is an application pursuant to s 182 of the Companies Ordinance (Cap 32).

The facts

On 10 July 1998, ST Lee (the petitioner), one of the two directors and a shareholder of MW Lee & Sons Enterprises Ltd (the company), presented a petition to wind up the company on the just and equitable ground or alternatively, that his shares be purchased at a fair value pursuant to s 168A of Cap 32. The respondents are respectively Lee Tak Yan (the first respondent), the other of the two directors and a shareholder of the company.

The petitioner is the younger brother of the first respondent. The company is a family company in which both the petitioner and the first respondent are shareholders.

The late Lee Man Wa, the father of the petitioner and the first respondent died in 1979 and by his will (which was not in evidence) he apparently gave his wife Lee Ng Chan Wa (the mother) a life interest in his residuary estate with a special power of appointment in favour of their children. Comprised in the father's estate are shares in HY and HT Lee Brothers & Co Ltd (HY & HT), another family company, viz 860 shares registered in the name of Lee Man Wa and 2,750 shares registered in the name of Lee Cheong Yee said to be an alias of Lee Man Wa. The mother died in 1991 and appointed the first respondent and her daughter Lee Wing Kim (May Lee) executors of her will. Although an application for a grant has been made, a caveat has been entered by the petitioner and there is a probate action pending. The mother exercised her power of appointment under the will of Lee Man Wa in respect of shares in HY & HT. Those registered in the name of Lee Man Wa (ie 860 shares) were bequeathed to the first respondent and those registered in the name of Lee Cheong Yee, (ie 2,750 shares) were bequeathed to the petitioner. The mother's own shareholding comprising 651 shares in HY & HT was bequeathed to her five grandsons, including 130 shares in favour of Christopher Lee, one of the sons of the petitioner. The surviving executors of the father's will are the first respondent and May Lee who, as noted above, are also the executors named in the mother's will.

It is common ground that dividends which accrued on (1) the 2,750 shares in HY & HT registered in the name of Lee Cheong Yee, (2) the 651 shares registered in the mother's name and (3) the 860 shares registered in the father's name (Lee Man Wa) were, at the direction of the first respondent, paid into the savings account maintained by the company with the Hang Seng Bank Ltd on various occasions between 29 March 1995 and 14 February 1997 (the diverted dividends).

Exhibited to the third affidavit of the petitioner is an analysis prepared by Mr Peter Yu of the receipt of sums by the company of dividends totalling $ 12,347,500 in respect of the Lee Cheong Yee shares and dividends totalling $ 583,700 in respect of the shares registered in the name of the mother bequeathed to Christopher Lee (ie 130 out of 651 shares) (collectively 'the specified sums'). These form part of dividends accrued on the three blocks of shares described above which the first respondent caused to be paid by HY & HT directly to the company into the company's savings account. The schedule below summarises the payments of HY & HT dividends to the company and the specified sums are those set out in columns 1 and 3:

The total amount of diverted dividends (the aggregate of columns 1, 2 and 4 above) is $ 15,879,790 of which the specified sums form part.

Between 31 March and 11 May 1995, seven transfers were made out of the company's savings account into fixed deposit accounts. These are deposit accounts nos 20 to 26 inclusive, details of which appear below:

*1 Fixed deposits matured on 15 February 1999.

*2 Fixed deposits matured on 2 March 1999.

In proceedings brought by the petitioner and his son Christopher against the first respondent to recover the specified sums, an injunction was granted restraining the first respondent from continuing to allow the company to hold the specified sums on behalf of the estates of Lee Man Wa and Ng Chan Wa. The first respondent was also ordered, within 14 days of the judgement of Findlay J dated 21 January 1999, as varied by order dated 10 February 1999 and subsequently extended by consent of the parties to noon, 8 March 1999, to 'cause the sum of $ 12,347,500 and $ 583,700 plus all interest accrued, to be paid into a trust account with a licensed bank in Hong Kong in the names of the [1st Respondent] and May Lee as fiduciaries and executors of the estate[s] of Lee Man Wa and Ng Chan Wa.' In his judgement, Findlay J observed that: If the [1st respondent] is able to obtain some order in the winding-up proceedings enabling the Company to pay this money, well and good, but my order is not dependent on this.

The application

The summons issued by the first respondent seeks the following relief: The Company be authorised to disburse out of the Company's fund and to pay to [the 1st Respondent] and May Lee as Executors of the Estates of Lee Man Wa and Ng Chan Wa the sums of HK$ 12,347,500 and HK$ 583,700 plus accrued interest thereon from the respective dates of receipt by the Company of the said sums to date of payment out.

For convenience, I will hereafter refer to the proposed payment of the two principals sums identified in the summons plus accrued interest thereon as 'the proposed disbursement'. Underpinning the application is the submission that the diverted dividends paid into the savings account of the company do not belong to the company but are moneys impressed with a constructive trust which arose because to the knowledge of the company those moneys did not belong to it beneficially and therefore could not be applied for the company's own purposes. Leading counsel for the first respondent submitted that Re French's (Wine Bar) Ltd (1987) BCLC 499 and Re Margart Pty Ltd, Hamilton v. Westpac Banking Corp (1985) BCLC 314 apply so that in the context of s 182 of the Companies Ordinance, the diverted dividends do not constitute 'property of the Company'. In French's (Wine Bar) Ltd (supra), the court had to consider whether completion of an unconditional contract entered into before the presentation of the petition was a disposition of the property of the company under the English counterpart to s 182. Vinelott J concluded that the section concerned only assets to which the company is beneficially entitled and which are capable of being realised for the benefit of its creditors. So where the contract is specifically enforceable and there is no defence to it, completion of the contract according to its terms would fall outside the section but if the contract is conditional or voidable by the company, the waiver or confirmation of the contract may constitute a disposition of the property of the company. Re Margart Pty Ltd (supra), was a case concerning a liquidator's claim to payments made into the plaintiff company's account with the defendant bank which represented moneys from the realisation of assets covered by a floating charge created before the presentation of the petition, it was held (at 318g-h): "... whatever meaning the word 'disposition' may have when used in the phrase 'any disposition of property of the company' ..., it does not include the process by which a person with a beneficial interest in the property obtains that property, or the proceeds of its realisation, from the company at a time when he is entitled to have it. In all reality a person would not normally be described as disposing of his property when he hands it over to another to whom he had previously promised to deliver it on the happening of a certain event when that event occurs. This is only another way of stating in legal terms the proposition that the word 'disposition', when used with reference to property, normally has the meaning of connoting a change in the beneficial ownership of an asset by transfer or other type of dealing".

As observed by Helsham CJ in that case (at 319e): "What lies behind the section is the prevention of the improper alienation and dissipation of the company's property. I do not believe it was intended to reach out to transactions by which a secured creditor receives assets covered by his security at a time when he was entitled to have them".

In short, the first respondent's position is that the present summons has been taken out only as a matter of prudence.

The application was strenuously opposed by the petitioner. First, it was submitted that the court's jurisdiction under s 182 should not be invoked when the proposed disposition is not even claimed to be in the interest of the company. Rhetorically, the petitioner asks:

(a) why should the court sanction the disposition at the instance of the first respondent?

(b) why should the court direct the company to make the payment out now?

Second, he submitted that the first respondent is asking the court to sanction the payment out for its own benefit and in so doing is short-circuiting a claim against the company (which has not been brought) and thus the company's right of set-off.

Is there a constructive trust?

The answer cannot but be in the affirmative. Constructive trusts are imposed by equity in order to satisfy the demands of justice and good conscience. See Snell’s Equity (29th Ed) at 192, cited with approval by Edmund Davis LJ in Carl Zeiss Stiftung v. Herbert Smith & Co (a firm) (No 2) [1969] 2 Ch 276 at 301.

They come into existence when the relevant circumstances arise and are not dependent on the intention of the owner of the property. See Pettit Principles of Equity and the Law of Trust (8th Ed) at p 60. The diverted dividends are inarguably trust assets belonging to the estates of Lee Man Wa and Ng Chan Wa.

The company was not a bona fide purchaser in any sense: it provided no consideration and accepted the transfer with knowledge that it was trust property. At all material times, there were but two directors of the company: the first respondent and the petitioner. On the evidence, the petitioner knew of the nature of the transfers at the latest by 2 August 1996. There is a memo of that date to the petitioner which read as follows: (file: Ng Chan Wa file c.c. file: HY&HT Lee Brothers c.c. file: Secretaries)

Lee Cheong Yee: MEMO

JOB Withhold (sic) dividend of H.Y.&H.T. Lee Date 2/8/96 Brothers

FROM C. Lam

TO STL [the Petitioner]

MESSAGE per T.Y. Lee's instruction, starting from March 1995, all the withhold (sic) dividend of Lee Ng Chan Wa and Lee Cheong Yee have been paid to M.W. Lee & Sons Enterprises Ltd. It was because the withhold (sic) dividend could not generated (sic) interest income for the shareholders.

ACTION NEEDED The amount had been paid for: --

Lee Ng Chan Wa 28/5/91-5/3/96 $ 2,740,710.--

Lee Cheong Yee 28/5/91-5/3/96 $ 11,577,500.--

FILE MEMO

Whilst prior to that date, the petitioner would not have known of the transfers, the first respondent who caused the transfers to be made obviously knew: indeed, he dealt with the substantive day-to-day business of the company. In the circumstances, there is no reason why the knowledge of the first respondent should not be imputed to the company. In my judgement, a constructive trust did arise: the consequence is that neither the diverted dividends which include the specified sums nor the interest accrued thereon form part of the company's own assets. They belong to the estates of Lee Man Wa and Ng Chan Wa.

As I understand it, leading counsel for the petitioner accepts that the company will have no answer to any claim by the estates to the diverted dividends and interest. But it was submitted the present application must not be treated as an action by the estates to recover property subject to any constructive trust. It should not be so treated because the parties to the application are the first respondent and the petitioner only: the company is not a party, nor is May Lee, the other executor of the estates. The application should not therefore be treated as an application by the executors of the estates but by the first respondent in his personal capacity.

The substantive objection in the application is that what is sought to be disbursed is not trust moneys but moneys of the first respondent. As there are outstanding loans of some $ 30m shown in the accounts as being due to the company from the first respondent, if the moneys were disbursed, the company's right of set-off would be lost.

Wallersteiner v. Moir

The nub of the petitioner's case is that vis-á-vis the first respondent, the diverted dividends are not trust moneys. This arises from a fiction which is said to apply in the present case that where a fiduciary misapplies trust moneys, he is deemed to have made the wrongful payment from his own personal funds. In Wallersteiner v. Moir (No 2) [1975] QB 373 Buckley LJ held (at 397C): "It is well established in equity that a trustee who in breach of trust misapplies trust funds will be liable not only to replace the misapplied principal fund but to do so with interest from the date of the misapplication. This is on the notional ground that the money so applied was in fact the trustee's own money and that he has retained the misapplied trust money in his own hands and used it for his own purposes".

And at 398C-E:

"… By acts of commission and omission as a director of those companies he procured the carrying out of the circular cheque transaction. By that transaction moneys of the defendant companies were applied for his benefit in connection with the purchase of the Hartley Baird shares in the manner described in the judgements of this court on May 21, 1974. The fact that the moneys did not actually pass through Dr. Wallersteiner's own hands is immaterial. He so conducted himself as a director that he benefited at the companies' expense. The fact that the extent of his own personal interest in the 'consortium' for whom the shares are alleged to have been bought has not been made clear is also, in my opinion, immaterial. To the extent that any part of these moneys may have been applied for the benefit of anyone other than Dr. Wallersteiner, the court should, in my opinion, treat him as having used his own money for that purpose and as having retained the companies' money in his own hands: compare Knott v. Cottee (1847) 2 Ph. 192".

Applying the fiction to the present case, it was submitted that because the first respondent was found by Findlay J to have been in breach of his fiduciary duties in causing the diverted dividends to be paid to the company, the first respondent must be deemed to have used his own moneys when he misapplied the funds and as having retained the diverted dividends in his own hands although it is an undisputed fact that the diverted dividends went directly from HY & HT to the company by cheque or through the savings account. It was submitted that as in Wallersteiner v. Moir, it is immaterial that the moneys did not actually pass through the fiduciary's own hands. Note 9 to the 1997 financial statements of the company is said to give substance to the fiction inasmuch it is consistent with the fiction in that the amount stated as owing to affiliates which included the sum of $ 12,347,500 was described as 'non-trade advances which are interest free and have no fixed repayment terms'.

In Wallersteiner v. Moir, Dr Wallersteiner was a person in a fiduciary position who had made a profit out of his trust. He was liable to account for that profit. It was held that in equity interest is awarded whenever a wrongdoer deprives a company of money which it needs for use in its business so that the company is compensated for the loss thereby occasioned to it. See per Lord Denning MR at 388E. The passages cited from Wallersteiner v. Moir have to be placed in context: they dealt with the question of whether a trustee or fiduciary liable for damages for breach of trust should be made to pay interest on the amount of damages awarded and the fiction formed part of the rationale for the award of interest.

This is evident from Knott v. Cottee (1852) 16 Beav 77 cited by Buckley LJ. That was a case where the court had to consider whether an executor who had made authorised investments ought to be charged with interest on the balance or, at the option of the plaintiffs, with the stock and accumulations which would have been produced if the investments had been made as authorised by the will. The fiction thus arose in a similar context.

The petitioner also relied on the following passage in Re Hallett's Estate (1880) 13 Ch D 696 at 727:

"… Now, first upon principle, nothing can be better settled, either in our own law, or, I suppose, the law of all civilised countries, than this, that where a man does an act which may be rightfully performed, he cannot say that that act was intentionally and in fact done wrongly ... Wherever it can be done rightfully, he is not allowed to say, against the person entitled to the property or the right, that he has done it wrongfully. That is the universal law. When we come to apply that principle to the case of a trustee who has blended trust moneys with his own, it seems to me perfectly plain that he cannot be heard to say that he took away the trust money when he had a right to take away his own money".

But it does not assist the petitioner given the context in which the fiction was applied, namely to a case where the 'trustee has blended trust moneys with his own'. All these authorities whilst pertinent to personal claims against the first respondent, have no relevance to the present application.

The question before me is not one of the first respondent's personal liability to the petitioner and Christopher, a matter which was before Findlay J. The question before me is one relating to s 182 of the Companies Ordinance. Would the proposed disbursement by the company be void as a disposition of the property of the company? If the diverted dividends which necessarily included the specified sums are subject to a constructive trust for the reasons explained above, and in this connection, the petitioner accepts that if a claim were made by the executors for repayment, the company can have no answer to such a claim then, having regard to the recipient of the proposed disbursement, I do not see how the character of these moneys is altered by the fact that the other of the executors has not joined in this application. The moneys belong to the estates to whom the proposed disbursement is to be made. In my judgement, there is no scope for the application of the fiction so as to alter the character of the moneys received by the company and in respect of which a constructive trust has arisen. Such a fiction may be appropriate in the context of charging a defaulting trustee or fiduciary with the payment of interest on misapplied funds but that is not the question before the court. Here, there is no question of the misapplied trust moneys having been squandered or lost irretrievably: they remain with the company which, on the evidence, is plainly solvent and able to repay even if loans made to the first respondent are irrecoverable for any reason. Unlike the plaintiff in Wallersteiner v. Moir, there is no evidence that the first respondent has personally benefited from the breach of trust through causing the specified sums to be paid directly to the company.

Section 182

This provides that: In a winding up by the court, any disposition of the property of the company, including things in action, and any transfer of shares, or alteration in the status of the members of the company, made after the commencement of the winding up, shall, unless the court otherwise orders, be void.

Objection was taken to the form of the summons. It was submitted that the court does not have power under s 182 to order a disposition. It can only say whether a disposition is valid or not.

I do not agree that what is sought is an order by the court to make the proposed disbursement. The order sought is that 'the Company be authorized' to make the disbursement. That is not the same as seeking an order that the company be directed to make a particular payment, non-payment of which would constitute a contempt of court. Moreover, it is to be observed that whilst it is usual for the company to be a party to such an application, it is not an indispensable party. For example, Re French's (Wine Bar) Ltd (supra), the applicant was the purchaser of the leasehold premises under the contract for sale made prior to the presentation of the petition. The application was supported by the bank and opposed by the lessor, the owner of the reversion immediately expectant on the lease. The company itself was not party to that application. Thus the fact that the company itself is not a party is not objectionable.

I agree with the holding in Re French's (Wine Bar) Ltd (supra) and Re Margart Pty Ltd (supra) that s 182 has no application to assets that are not free assets of the company to which it is beneficially entitled and which can be realised for the benefit of its creditors. For reasons already stated, the proposed disbursement being property subject to a constructive trust would therefore not constitute 'property of the company' for the purposes of s 182.

Leading counsel for the petitioner submitted that the principle can have no Application unless the asset in question has been segregated. But nothing in either of those cases appears to lend support to the qualification suggested. Whilst the former case concerned the completion of a sale of leasehold property, the latter was a floating charge over the assets of the company. In the present case, the obligation of the company is to repay the trust assets to the estates. That obligation is not dependent on the moneys received by the company having been segregated. The company's obligation is not contingent on the moneys remaining traceable. If tracing were a relevant consideration, to the extent that the moneys are no longer traceable, and it is arguable on the facts that at least part of the moneys, in particular those paid after 8 May 1995 are no longer traceable, equity will treat money in a mixed account as charged with the repayment of the claimant's money. Re Diplock's Estate, Diplock v. Wintle [1948] Ch 465 at 520, 539 and Space Investments Ltd v. Canadian Imperial Bank of Commerce Trust Co (Bahamas) Ltd [1986] 1 WLR 1072 at 1074C-H, an equitable charge will arise in favour of the estates.

Objection was also taken to the application on the basis that it is not even suggested by the first respondent that the payment is in the interest of the company.

In Re Burton & Deakin Ltd [1977] 1 WLR 390, Slade J held (at 397G-H):

"... If on an application under section 227 relating to a solvent company, (a) evidence is placed before the court showing that the directors consider that a particular disposition, falling within their powers under the company's constitution, is necessary or expedient in the interests of the company, and (b) the reasons given for this opinion are reasons which the court considers that an intelligent and honest man could reasonably hold, it will in the exercise of its discretion normally sanction the disposition, notwithstanding the opposition of a contributory, unless the contributory adduces compelling evidence proving that the disposition is in fact likely to injure the company.

Given that the company is a constructive trustee of the diverted dividends and accrued interest, it is self-evident that repayment to the estates entitled to the same must be in the interest of the company: in fact, the sooner payment is made the better. The company's liability to restore the moneys to the estates is not dependent on a proprietary claim: that would arise even under a personal claim. The fact that May Lee is not a party to the application is not fatal because the critical factor is the identity of the recipient of the proposed disbursement. It would be a different matter if the moneys were to be paid into the first respondent's personal account or to an account that is not that of the estates.

The present application is not an action by the executors against the company: in substance, the order sought is that the proposed disbursement into a segregated account in the name of the executors of the estates will not be void under s 182. To the extent that the assets do not belong to the company beneficially, s 182 is irrelevant; in so far as the proposed disbursement might constitute a disposition of 'the property of the Company' if, for example, contrary to my view, to come within the principle in Re French's (Wine Bar) Ltd, the assets have to be segregated, the proposed disbursement is still inarguably in the interest of the company.

As to the question why an order has to be made now at the behest of the first respondent, the short answer is why not? There is no good reason for the company not to make the proposed payment which it is to be emphasised does not extend to the diverted dividends other than the specified sums since the application is

limited in terms to the specified sums. In fact, a proposal made by the first respondent relating, inter alia, to the proposed disbursement for payment into a separate account within the company or, alternatively, to be transferred out of the company and placed into a trust account in the names of the executors was rejected by the petitioner in early November 1998. Thereafter, there followed the proceedings heard by Findlay J as a result of which the first respondent was enjoined from allowing the company to retain the specified sums.

Accrued interest

What interest has accrued on the specified sums? The first respondent's case is that the moneys placed in deposit accounts nos 20-26 inclusive constitute trust moneys and that therefore all interest accrued on these accounts are trust moneys subject to one qualification. That pertains to deposit account no 24. Only 50% of that is said to come from trust moneys so that only half of that interest is to be taken into account. According to the first respondent, the amount of interest accrued shown in the summary set out earlier in this judgment in the sum of $ 3,478,855.2 should be adjusted to read $ 3,206,701.3.

The evidence shows that when the $ 7.15m of trust moneys were paid into the company's savings account on 29 March 1995, that account had a credit balance of over $ 1.463m. The fixed deposits, (ie accounts 20-23 inclusive) were not established until two days later on 31 March. On 30 March, there were three payments into the savings account so that immediately before the four deposit accounts were created, there was standing to the credit of the savings account the sum of $ 9,185,544.12. The submission that all the moneys in accounts nos 20-23 totalling $ 7m were trust moneys appears to be based on the fact, first, that this 'approximated' the amount of diverted dividends paid into the savings account and secondly, that the company's internal memo dated 2 August 1996 reproduced earlier in this judgement shows that the purpose of the exercise was to generate interest income for those entitled to the dividends so diverted. The first respondent's case might be on stronger ground had the amounts placed on fixed deposit matched exactly the amounts paid in which is not the case. So far as the internal memo is concerned, it is hardly determinative in that it is equally consistent with simply placing the diverted dividends in the savings account which presumably attracted interest although no evidence was adduced as to the terms and conditions governing the savings account. Nor would it appear to be the case that prior to receiving the diverted dividends, the company had never placed its moneys on fixed deposits. The passbook shows that on the same day as but prior to the payment in of the $ 7.15m, $ 2m was withdrawn and placed on time deposit.

In my judgment, so far as concerns the interest accrued on the fixed deposits, since the trust moneys had intermingled with the company's moneys, only a pro rata share of the first four deposits is attributable to trust moneys, the balance being the company's moneys. It follows that only a pro rata share of the accrued interest constitutes trust moneys. As the application is limited in terms to the specified sums rather than the diverted dividends as a whole, to the extent that dividends caused to be paid to the company belong to the 651 shares registered in Ng Chan Wa's name, it will have to be pro-rated, Christopher's share thereto being 130/651ths. So far as interest accrued on deposit accounts 24 to 26 inclusive is concerned, an account may have to be taken to ascertain the precise amount attributable to the specified sums adopting the same approach. By the same token, part of the interest which accrued on the savings account (if any) would have been attributable to the specified sums. In that connection, I note that other than for time deposits, withdrawals were made from time to time from the savings account. Unlike the wrongly paid charities in Re Diplock (supra) which were paid under a mistake of law, the company knew that the diverted dividends did not belong to it beneficially. Having intermingled the moneys, the rule in Re Hallett's Estate (supra) applies. The trustee is deemed to draw on his own money first even if it was the most recently paid in and to draw on the trust funds only after all his own money has gone. See Snell’s Equity (supra) at 301. Accordingly, withdrawals made to meet the company's expenses should be deemed to have been made out of the company's moneys.

Unless the parties are able to reach agreement, an account may have to be taken to establish the interest which has accrued on the specified sums on fixed deposit accounts other than accounts 20, 21, 22 and 23, and on the savings account and for that purpose, it may be necessary for ancillary orders to be settled in chambers.

Set-off

The petitioner contended that he would be seriously prejudiced by any validation order made by the court. This is because the first respondent is shown in the company's accounts as owing substantial sums (of the order of $ 30m) to the company. The first respondent has filed evidence to explain why a significant part of this amount is not in fact owing to the company. That is an issue that will have to be resolved on some other occasion. So far as any right of set-off that the company may have against the first respondent, it is not affected by any validation order unless the specified sums and accrued interest are not trust moneys but the personal property of the first respondent. That would only be the case if the fiction referred to in Wallersteiner v. Moir were applicable. In view of my holding that those sums are trust moneys, it follows that any validation order has no impact or adverse effect on any rights of set-off to which the company might otherwise be entitled.

The order

As Slade J observed in Re Burton & Deakin (supra) at 398A-B:

"... No limits are placed by the sections on the court's discretion to grant or to refuse an application under section 227, and such a discretion will of course be exercised in every instance having regard to the particular circumstances of the particular case".

In the circumstances of this case, the following order is to be made on the first respondent's summons:

1. The disbursement out of the company's funds to pay Lee Tak Yan and Lee Wing Kim also known as May Lee as executors of the estates of Lee Man Wa and Ng Chan Wa of the amounts specified in paras (a) and (b) below if and so far as they involve any disposition of the property of the company shall not be void under s 182 of the Companies Ordinance (Cap 32) in the event of an order for the winding up of the company being made on the petition:

(a) the sums of $ 12,347,500 and $ 583,700 (the specified sums); and

(b) interest attributable to the specified sums ascertained in accordance with para 2 below.

2. Interest attributable to the specified sums shall include a pro rata share of interest accrued on amounts (of which the specified sums form part) placed on fixed deposits and on the savings account. In computing such pro rata share of interest, withdrawals made to meet the company's expenses shall be deemed to have been made out of the company's income.

This order includes the terms set out in the letter of 5 March 1999 to the parties. The only addition relates to savings account interest (if any) accrued on the specified sums.

There is to be an order nisi for costs in favour of the first respondent.