Han’s Real Estate (Hong Kong) Ltd and Others v. Apex Construction Holdings Co Ltd and Others
Read the full judgment text of HCA 1886/2018 on BabelCite. This High Court CFI judgment was delivered on 26 July 2021.
1. By summons dated 5 October 2020, the 1 st and 2 nd defendants apply for an order that they be released from the undertakings which they gave to the court on 14 September 2018 (“the Undertakings”). That was the return day for an ex parte injunction granted to the 1 st plaintiff on 7 September 2018 (“the Injunction”). (The Injunction and the present application do not concern the 3 rd defendant. I shall refer to the 1 st and 2 nd defendants below generally as “the defendants”.)
Cites 3 cases
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HCA 1886/2018 [2021] HKCFI 2002 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 1886 OF 2018 _________________
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_______________ DECISION _______________ Introduction 1.By summons dated 5 October 2020, the 1st and 2nd defendants apply for an order that they be released from the undertakings which they gave to the court on 14 September 2018 (“the Undertakings”). That was the return day for an ex parte injunction granted to the 1st plaintiff on 7 September 2018 (“the Injunction”). (The Injunction and the present application do not concern the 3rd defendant. I shall refer to the 1st and 2nd defendants below generally as “the defendants”.) 2.In gist, the basis of the defendants’ application is that the affirmations filed by the 1st plaintiff in support of the Injunction contained false and/or inaccurate evidence. To date, the 1st plaintiff has failed to provide any explanation for such falsity and/or inaccuracies. The defendants contend that since the Injunction and the Undertakings were obtained by the 1st plaintiff based on incorrect or false information, the Undertakings must be discharged. 3.The defendants seek to demonstrate that the supporting affirmations contained false or inaccurate evidence by relying on the oral evidence given by the deponents of four of those affirmations in a criminal trial in WKCC 5119/2018. The trial took place in January 2019 at the West Kowloon Magistrates’ Court (“the Criminal Trial”). In that trial, the 2nd defendant was charged with two counts of criminal intimidation. He was acquitted after trial. 4.The defendants say that in the Criminal Trial, the four deponents admitted under oath that their respective affirmations contained inaccuracies and/or allegations which in fact did not happen. The action 5.The background to the action is a memorandum of understanding signed by the 1st plaintiff and a company called Apex Global Investment Holdings Company Limited, which is the parent company of the 1st defendant. The plaintiffs’ case is as follows. 6.The MoU was signed with a view to exploring co-operation in future land development projects. It expressly provided that it was not legally binding and that for each project, the parties must separately sign an agreement for it. 7.Subsequently, the 1st plaintiff had concerns and reservations about Apex Global’s business methods and dealings. The 1st plaintiff did not pursue the co-operation further. 8.To the 1st plaintiff’s surprise, the 1st defendant issued an invoice to it in June 2018 for $3,000,000 allegedly for works done in “Design and Build Services”. The 1st plaintiff then terminated the MoU and told the 1st defendant that it was only prepared to pay for actual work as assessed by independent assessors. (According to the 1st plaintiff’s assessors, the alleged work was worth about $60,000 to $90,000.) 9.The 1st defendant then issued another invoice to the 1st plaintiff claiming $10,000,000 for alleged loss of profit on the MoU. The 1st plaintiff did not pay the invoice. 10.What followed, the 1st plaintiff says, was a campaign of intimidation, harassment and unlawful interference against the 1st plaintiff, its directors and staff and its contractors in order to bring the 1st plaintiff to its knees and to comply with the 1st defendant’s demands. The 1st plaintiff says that the 2nd defendant was the prime-mover of the campaign, acting as the agent of the 1st defendant. It was this campaign which led the plaintiffs to commence the action against the defendants on 13 August 2018. 11.The plaintiffs seek, among other things, injunctive relief against the defendants to restrain them from entering into the 1st plaintiff’s office premises in Wanchai, interfering with the 1st plaintiff’s interest in the building site at 201, 201A, 203 and 203A Yee Kuk Street, Shamshuipo, Kowloon, of which the 1st plaintiff is the owner and occupier in possession (“the Building Site”) and intimidating and/or harassing the 1st plaintiff. The Injunction 12.What prompted the 1st plaintiff to apply for the Injunction was an incident which took place at the Building Site on 31 August 2018. 13.It is the 1st plaintiff’s case that on that day, the defendants brought their muscle men to intimidate workers at the Building Site, made threats to them, demanded them to leave immediately and close down the site. The ground investigation works which were then ongoing were brought to a halt. 14.In support of its application for the Injunction, the 1st plaintiff filed six affirmations. Relevant to the present application are four of those affirmations made by the staff of Hanki Contracters (HK) & Associate Limited (“Hanki”). At that time, Hanki was engaged as the contractor to carry out surveying work at the Building Site. 15.The four deponents were:
16.The case presented by the 1st plaintiff to the ex parte judge on 7 September 2018 was based primarily on the evidence of the above four deponents. Its case was that intimidation and threats were made by the 2nd defendant and his cronies against Hanki’s staff. More specifically:
17.The Injunction was granted on an ex parte basis on 7 September 2018 in the following terms:
18.The return day was fixed for 14 September 2018. 19.Before the return day, the 1st plaintiff took out a summons to continue the Injunction until after judgment or further order. The defendants took out a summons asking for the Injunction to be discharged or, alternatively, be varied such that the distance set out in sub-paragraph (b) be changed from 50 metres to 3 metres. 20.On the return day, the defendants gave the Undertakings, which were effectively in the same terms as the Injunction save that the distance in sub-paragraph(b) was changed to 15 metres. The Undertakings were to be effective until after judgment or further order or the completion of the work at the Building Site, whichever is earlier. I was told at the hearing that the work has not yet been completed. 21.On the basis of the Undertakings, at the inter partes hearing, the judge made no order on the two summonses. 22.No substantive evidence was filed by the defendants to dispute the alleged incident. (The 2nd defendant only complained about the notice given and the scope of the Injunction in a short affirmation.) The Criminal Trial 23.The 2nd defendant was subsequently charged with two counts of criminal intimidation against Kelvin Ng in respect of the incident on 31 August 2018. Among the prosecution witnesses were Kelvin Ng, Leung, Ko and Tse. As mentioned above, each of them made an affirmation which the 1st plaintiff relied on to apply for the Injunction. Kelvin Ng was a major prosecution witness in the Criminal Trial. 24.The 2nd defendant was acquitted of both charges. 25.In the present application, however, Mr Chase Pun, counsel for the defendants, did not rely on the fact of the acquittal as a ground for seeking the release order. Instead, he pointed to some of the oral evidence of Kelvin Ng, Leung, Ko and Tse given in the Criminal Trial, and submitted that in the oral evidence identified by him, they admitted that their respective affirmations contained inaccuracies and/or allegations which in fact did not happen and/or contrary to the statements they had made with the police. I shall refer to this ground as “the falsity ground”. 26.Mr Pun submitted that had the ex parte judge known about the truth, the Injunction would hardly have been granted. Further, if on the return day the court had known that incorrect or false information had been given to the court at the ex parte hearing, the Injunction would have been discharged without consideration of the merits and the defendants would not have been required to give the Undertakings. In the circumstances, the defendants contend that they should now be released from the Undertakings. The oral evidence in the Criminal Trial 27.In order to determine whether the defendants have made out the falsity ground, it is necessary to reproduce the relevant parts of the supporting affirmation of each of the four deponents and look at them side by side with the related oral evidence given by that deponent in the Criminal Trial. 28.First, Kelvin Ng’s evidence. He would appear to be the main deponent in the application for the Injunction and the main prosecution witness. 29.In his affirmation, he stated:
30.Mr Pun submitted that in the Criminal Trial, Kelvin Ng admitted that his affirmation contained inaccuracies and/or allegations which in fact did not happen. He admitted that he was aware that his affirmation was crucial in the ex parte application. Yet, he was unable to explain the inaccuracies. Mr Pun relied on the following evidence:
31.Second, I turn to the affirmation of Leung. He wrote:
32.Mr Pun submitted that in the Criminal Trial, Leung admitted that in fact he did not hear any intimidatory remarks. 33.Mr Pun relied on the following evidence:
34.The next (and third) relevant deponent is Ko. He stated the following in his affirmation:
35.Mr Pun submitted that in the Criminal Trial, Ko admitted that Leung’s affirmation in fact had not been explained to him and he did not know what was written there. Mr Pun relied on the following evidence:
36.Fourth, the next and last relevant deponent is Tse. In his affirmation, he said:
37.Mr Pun submitted that in the Criminal Trial, Tse admitted that he in fact did not hear any intimidatory remarks made by the 2nd defendant or the man in baseball cap. Mr Pun relied on the following evidence:
Legal principles 38.A party who seeks an injunction ex parte is under a duty to make full and frank disclosure of all the material facts. If there has been a breach of that duty, the general rule is that the court should discharge the order obtained in breach and refuse to renew the order until trial. Notwithstanding the general rule, the court has jurisdiction to continue or re-grant the order. That jurisdiction should be exercised sparingly and should take account of the need to protect the administration of justice and uphold the public interest in requiring full and frank disclosure. The court should assess the degree and extent of the culpability with regard to non-disclosure. The court should also assess the importance and significance to the outcome of the application for an injunction of the matters which were not disclosed to the court. In making this assessment, the fact that the judge might have made the order anyway is of little if any importance. The court can weigh the merits of the plaintiff’s claim. It is however not a simple balancing exercise in which the strength of the plaintiff’s case is allowed to undermine the policy objective of the principle. 39.It is always important to bear in mind the rationale underlying the above approach. The general rule has a two-fold purpose. It deprives the wrongdoer of an advantage improperly obtained. It also serves as a deterrent to ensure that parties who make ex parte applications realise that they have the duty of disclosure and of the consequences if they fail in that duty. On the other hand, the rule cannot be allowed itself to become an instrument of injustice. That is why the court must have a discretion to continue the injunction or to grant a fresh injunction in its place, notwithstanding that there was non-disclosure when the ex parte application was made. When considering what consequence should follow or attach to the breach of the duty, the court should have regard to the proportionality between the wrongdoing (ie the non-disclosure) and the consequence. The overriding question is what is in the interests of justice in the particular circumstances of the case. 40.For authorities in support of the above well-established principles, see, eg, Brink’s Mat Ltd v Elcombe [1988] 1 WLR 1350 at 1356F-1358E; Excel Courage Holdings Ltd v Wong Sin Lai [2014] 3 HKLRD 642 at paras 56 to 58. 41.An undertaking given by a defendant in lieu of an injunction can be released on grounds of material non-disclosure by the plaintiff: Hong Kong Civil Procedure 2021 at 29/1/36. 42.Here, the defendants submit that what the 1st plaintiff had committed when applying for the Injunction was not material non-disclosure, it was something worse. It was the use of false and/or inaccurate statements. That said, I understand that Mr Pun accepted that the principles governing material non-disclosure applies generally to the present case. Discussion 43.In the present application, I consider that my task is, first, to determine whether the defendants have successfully made out the falsity ground. I should scrutinise the oral evidence given by the four deponents in the Criminal Trial and decide whether when viewed against such evidence, the deponents’ affirmations contained the false or inaccurate statements as alleged by the defendants. 44.Secondly, if the answer is yes, I should consider the extent of the false or inaccurate statements and how material they are in the context of the Injunction. 45.Thirdly, in light of the materiality as determined, I should consider what the court should do about the situation and what consequence should follow. Should the court release the defendants from the Undertakings by reason of those false or inaccurate statements? Or should the court exercise its discretion to allow the Undertakings to remain in effect, notwithstanding the false or inaccurate statements? 46.I should at the outset deal with two primary arguments advanced by Ms Priscilla Wong, counsel for the plaintiffs, in her written submissions on the falsity ground. 47.First, Ms Wong invited the court to look at the ruling of the magistrate in the Criminal Trial. It is, she submitted, pertinent to note that the magistrate ruled that there was a case to answer on the two charges of criminal intimidation but the 2nd defendant was acquitted because the crime was not proved beyond all reasonable doubt. 48.The magistrate noted that there were differences between the oral evidence of the prosecution witnesses and the content of their affirmations. However, he could not confirm which evidence was correct. The benefit of such doubt must be given to the 2nd defendant. 49.Ms Wong emphasised that it was not the case that the magistrate ruled that the oral evidence was true and the affirmation evidence was false or inaccurate. On the contrary, he expressly noted that he could not confirm which was correct and which was not. Hence, Ms Wong submitted that the defendants cannot now rely on the Criminal Trial to show that the affirmations contained false or inaccurate statements. 50.In my view, the submission does not assist the plaintiffs’ case. This is because the basis of the defendants’ application is not the ruling or the outcome of the Criminal Trial. 51.It is not the defendants’ contention that the affirmation evidence was false or inaccurate because the 2nd defendant was found not guilty of criminal intimidation. The basis of the defendants’ application is a much simpler and narrower one. The defendants say that each of the deponents in fact admitted under oath in the Criminal Trial that what they had earlier said in their respective affirmations was false or inaccurate. Put in another way, the defendants say that the deponents retracted or altered what they had said in their affirmations. 52.Given the basis of the application, in determining whether the falsity ground is made out, my task is to look at the oral evidence given in the Criminal Trial, rather than looking at the magistrate’s ruling. The latter is simply not relied on by the defendants. 53.I should also add that for present purposes, my task is not to determine the credibility of the statements made in the affirmation evidence. That is something to be determined at trial, after the deponents (if called) give oral evidence. 54.Secondly, Ms Wong placed considerable reliance on the approach in Dormeuil Freres SA v Nicolian International (Textiles) Ltd [1988] 1 WLR 1362, and the Hong Kong authorities which adopt this approach: Pandora v Glamulet International Ltd HCA 2941/2015, 26 July 2016 at paras 15 to 24; and Top Gains Minerals Macao Commercial Offshore Ltd v TL Resources Pte Ltd HCMP 1622/2015, 18 November 2015 at paras 59 to 61. She submitted that it is not appropriate for me to determine whether the affirmation contained false or inaccurate statements at this interlocutory stage. The issue cannot be resolved now in the absence of cross-examination and ought to be adjourned to trial. I do not agree. 55.I would say that in this case, the determination of the falsity ground is capable of being determined on the basis of the affirmation evidence and the transcript of the Criminal Trial. There is therefore no need to adjourn the application to the trial for a proper disposal. False or inaccurate statements in the affirmations? 56.I now turn to the affirmation evidence of the four deponents. 57.I accept Mr Pun’s submission in relation to the evidence of Leung, Ko and Tse – see paras 32, 35 and 37 above. (I would have more to say about Ko’s evidence shortly.) By looking at the relevant parts of the transcript of the Criminal Trial alongside with the corresponding paragraphs in the affirmation evidence, it is fair to say that both Leung and Tse had retracted some of their affirmation evidence – identified by the underlined passages in the above extracts – as they expressly confirmed that those parts were not correct. 58.As mentioned above, I am not here concerned with the credibility of the allegations made in the affirmations. Instead, for this part of the analysis, I am undertaking a rather “mechanical” exercise of determining whether the deponents had themselves admitted in the Criminal Trial that what they had previously said was false or inaccurate. 59.There may well be reasons why the deponents would make the admissions or retractions in the Criminal Trial. But to date the plaintiffs have not adduced any evidence at all to explain why those admissions or retractions should not simply be taken at face value. In opposing the present application, the plaintiffs have filed two short affirmations made by their handling solicitor. The plaintiffs have not filed any affirmation made by any of the four deponents. On the falsity ground, what we have is only the following passage from the handling solicitor:
60.What we have is an indirect, negative and bare confirmation from the four deponents that the contents of their affirmations were not false or misleading without any explanation as to the apparent differences between the affirmation evidence and the oral evidence. 61.In the circumstances, in respect of Leung, Ko and Tse, their oral evidence is to be taken at face value and I find that their affirmations contained false or inaccurate statements as submitted by the defendants. 62.As regards Kelvin Ng, the position is not as straightforward or clear-cut as Mr Pun sought to portray in his submissions. 63.If one looks at the extracts of the transcript relied on by the defendants closely, one can readily see that the falsity or inaccuracy only goes to the following two points:
64.Hence, strictly speaking, even looking solely at the defendants’ extracts of the transcript, Kelvin Ng did not retract the rest of what he said about the incident in the affirmation. 65.It is important to bear in mind the key allegations made by Kelvin Ng in his affirmation. I have reproduced them in para 29 above. That forms the crux of his complaint against the 2nd defendant. 66.Having gone through the whole transcript of the Criminal Trial, it is quite plain and clear that save for the two matters concerning drills and poles and photograph, in the Criminal Trial, Kelvin Ng stood by the main crux of his complaint against the 2nd defendant as set out in his affirmation. 67.I would quote below examples of such evidence given by Kelvin Ng in his examination-in-chief, cross-examination and re-examination. 68.In examination-in-chief:
69.In cross-examination:
70.In re-examination:
71.To sum up, Kelvin Ng’s affirmation contained false or inaccurate statements only to the extent identified by the defendants, ie in relation to the wrong references to (a) drills and poles, and (b) photograph. In the Criminal Trial, he basically stood by his evidence deposed to in the affirmation. 72.Lastly, as observed above, Ko’s affirmation evidence was inaccurate. On the one hand, he confirmed that the content of Leung’s affirmation was correct and true. On the other hand, in his subsequent oral evidence, he said that he did not know the content at all. Notwithstanding that, in other parts of his evidence, Ko gave evidence which corroborated Kelvin Ng’s affirmation evidence. See, eg:
73.In summary, I find that in light of the oral evidence given at the Criminal Trial, the affirmations of the four deponents contained false or inaccurate statements to the extent identified by Mr Pun. At the same time, however, I note that Kelvin Ng in the Criminal Trial maintained the crux of his complaint against the 2nd defendant as set out in his affirmation. Furthermore, part of Ko’s evidence in the Criminal Trial supported Kelvin Ng’s affirmation evidence as identified above. Are the false or inaccurate statements material? 74.Mr Pun emphasised that the present case is, strictly speaking, not a case of material non-disclosure. It is a worse situation. It is a case where a party presented false or inaccurate evidence to the court in the course of obtaining an ex parte injunction. 75.I think there is force in that submission. 76.In the present case, the court should consider whether the false or inaccurate statements relate to material information in the context of the obtaining of the Injunction. 77.In my view, the answer is yes. 78.The factual case portrayed by the 1st plaintiff before the ex parte judge was built on the strength of the affirmations of six deponents, including the four affirmations which now turn out to contain false or inaccurate statements to varying extent. The 1st plaintiff was putting forward a case of intimidation at the ex parte hearing. The fact that the 1st plaintiff was able to present evidence from six individuals in support of the intimidation incident must have had a bearing on the judge’s evaluation of the merits of the application. 79.In the case of Leung and Tse, they recounted in their affirmations the intimidatory remarks (in Tse’s case, indirectly by reference to Leung’s affirmation). But they retracted the evidence in the Criminal Trial. So they were deposing to matters which, according to their knowledge, did not in fact happen. The false or inaccurate statements are material not only because such evidence would affect how the judge would rule on the injunction application, but also because the presentation to the court of such falsity or inaccuracy is fundamentally wrong in nature. 80.On the other hand, I consider that the evidence of Kelvin Ng excluding the inaccuracy relating to the drills and poles and the photograph, together with the evidence of Ko excluding the reference to Leung’s affirmation, would make out a serious case of intimidation which should be tried. Hence the Injunction could still be properly granted if the false or inaccurate statements now identified were omitted. 81.Nevertheless, that does not detract from the fact that the false or inaccurate statements are material in the context of the Injunction. What consequence should follow? 82.I should then consider whether I should immediately proceed to release the defendants from the Undertakings, or whether I should exercise my discretion to allow the Undertakings to remain in place. The overriding consideration is which course of action better serves the interests of justice in the particular circumstances of the present case. 83.In my view, the proper course to take here is to continue the Undertakings notwithstanding the false or inaccurate statements contained in the 1st plaintiff’s ex parte affirmation evidence. The following matters are what I believe to be the relevant and material considerations in the exercise of my discretion. 84.First, I have found that the false or inaccurate statements are material in the context of the Injunction. The court takes a very serious view of the use of such statements, particularly in the context of an ex parte application when the other party is not present to defend itself before an order adverse to its interest is made against it. The starting position is that the defendants ought to be immediately released from the Undertakings. This would serve as a stark reminder to the plaintiffs that consequences would follow from such wrongful act and their substantive rights (in the nature of interim relief) would be taken away. 85.Secondly, up to now, there is no or no concrete explanation given by the plaintiffs why the false or inaccurate statements were made and included in the evidence and relied upon in the ex parte application. 86.In the present application, the plaintiffs have filed two affirmations in opposition, both made by their solicitor. None of Kelvin Ng, Leung, Ko or Tse have made any affirmation personally explaining the apparent difference between their previous affirmation evidence and their oral evidence given in the Criminal Trial. The plaintiffs’ solicitor stated on affirmation that the four deponents confirmed with the plaintiffs that their affirmations “were not false or misleading”. 87.The fact that no attempt has to date been made to properly explain the discrepancy would weigh against the continuation of the Undertakings. 88.Thirdly, on the other hand, my view is that based on the affirmation evidence used in the ex parte application, with the false or inaccurate statements removed, the Injunction could still have been properly granted. The crux of the complaint of intimidation was contained in Kelvin Ng’s affirmation. The mistaken references to “drills” and “poles” and the taking of photograph are minor inaccuracies. They do not diminish or affect the core substance of the intimidation incident as recounted by Kelvin Ng. The complaint has been set out clearly and succinctly in his affirmation – see para 29 above. 89.Objectively speaking, on the strength of the “correct” affirmation evidence, the application for the Injunction has substantive merits. In this regard, it would be recalled that after the Injunction was granted, the defendants did not seek to file any substantive opposing affirmation disputing the alleged incident but instead consented to give the Undertakings. Furthermore, in the same vein, as highlighted by Ms Wong, at the Criminal Trial, the magistrate ruled that there was a case to answer on the basis of the evidence before him. 90.The Injunction and the Undertakings are negative in nature. They prohibit the defendants from doing things which have the effect of intimidating, harassing or interfering with the 1st plaintiff. 91.On the whole, this is a case which warrants the grant of the Injunction. As an interim measure pending trial, it is just and fair that the defendants should be subject to the restraints imposed by the Undertakings. 92.Hence, there is much to be said for the continuation of the protection afforded by the Undertakings pending trial. 93.The balancing exercise therefore boils down to this. 94.On the one hand, if the court allows the Undertakings to remain in place, it may be seen to be condoning the use of false or inaccurate evidence by the plaintiffs with the result that they can get away with it with no consequence. On the other hand, if the court releases the Undertakings, the 1st plaintiff would be deprived of the interim protection given by the Undertakings, which is plainly warranted on the evidence before me. 95.I am of the view that to release the defendants from the Undertakings and to deprive the 1st plaintiff of their benefit would amount to a larger injustice in the overall circumstances of the case than if the other course is taken. It would be a disproportionate response to the plaintiffs’ wrongdoing. 96.The balance comes down in favour of maintaining the Undertakings pending trial. Order 97.For the above reasons, notwithstanding the false or inaccurate statements contained in the affirmation evidence filed in support of the Injunction, I would exercise my discretion such that the Undertakings should remain in place in their original terms. 98.I therefore dismiss the 1st and 2nd defendants’ summons. 99.I make a costs order nisi that the costs of the summons be in the cause of the action. The plaintiffs have successfully resisted the summons. But the defendants have succeeded in making out the falsify ground. In the end, the court exercises its discretion in favour of the plaintiffs. It is not a case in which they should have their costs straightaway.
Ms Priscilla Wong, instructed by Tung, Ng, Tse & Lam, for the 1st to 4th plaintiffs Mr Chase Pun, instructed by Yuen & Partners, for the 1st and 2nd defendants | |||||||||||||||||||||||||||||||||||||||||
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