Chen Sau Hong t/a Tung Shan Enterprises Co v. Chan Kong Leung

CACV000049/1967

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

CIVIL APPEAL NO. 49 OF 1967

(On Appeal from O.J. Action 1443 of 1967)

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Coram: Hogan, C.J., Rigby, S.P.J. and Blair-Kerr, J.

Date of Judgment: 18 January 1968

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JUDGMENT

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1. This matter seems to have had an unfortunate history.

2. Clearly there was material before the judge in the court below which might well have justified granting an interim injunction but subsequent events give ground for more anxiety.

3. It appears that when he made his initial order he contemplated granting an injunction ex parte to last until the 20th October when the defendant would be summoned to attend before him in Chambers so that the defendant would have an opportunity of being heard on the question whether the injunction should be continued. The formal order drawn up to give effect to that decision appears to have contemplated that an inter partes summons would be taken out for that date. In fact, no such summons was taken out and the respondent to the application for the injunction was served merely with a copy of the interim order and a copy of the original writ of summons which required him to enter an appearance within 8 days. The order, when it used the phrase returnable on the 20th October would almost certainly have conveyed to a lawyer the message that he should appear in court on that day but the meaning conveyed to a layman could be very different indeed and, quite apart from the respondent's assertion that he was told by the solicitor for the other side that what he had to do was to enter an appearance, which he did, we could well understand the respondent forming that view himself, merely as a result of perusing the documents and without any such misleading advice. Nevertheless, when he failed to appear on that day, the judge extended the injunction until the hearing and subsequently refused an application by the respondent to discharge it. The only ground shown for taking this course was the failure if it can be so described - of the respondent to appear on the 20th October, a failure for which we think he was not to blame.

4. Just to add a little more to the confusion the interim order bore the wrong endorsement.

5. Not only has the judge in the court below apparently overlooked the fact that no summons had been taken out for the 20th October but in granting the interim injunction and continuing it up to the date of trial, he does not appear to have taken account of the continuing liabilities to the godown owner that would be incurred in respect of the timber which the judge had forbidden the defendant to remove from the godown. Somebody should be paying these charges and it seems unreasonable to impose the liability on the defendant, who was disabled from taking any steps to move the timber, merely on the strength of an unsupported undertaking by the plaintiff to be answerable for damages if his injunction turned out to be unjustified. It would seem more reasonable as a condition of the injunction that the plaintiff should, in the first instance, pay these costs, without prejudice, of course, to his right (if any) to recover the amount by way of damages if his claim succeeds. He has, indeed, very fairly recognized before us that this would be an acceptable condition.

6. Whilst we think the judge was wrong to continue the injunction merely because of the absence of the defendant on the 20th October, we are still faced with the question whether the plaintiff has good grounds, other than the absence of the defendant, for seeking the continuance of this injunction.

7. Clearly it is in the best interests of both parties that the action should be resolved as speedily as possible.

8. Having considered these matters, the order which we proposed to make and which we put to both parties was that the injunction should continue subject to certain limiting conditions. The conditions which we proposed were that the plaintiff should pay the outstanding godown charges for this timber and from time to time pay any further charges that may accrue due in respect of its storage during the continuation of the injunction and that he should take immediate steps to bring on the action for as early a trial as possible. Failing compliance with these terms the defendant should be at liberty to apply to discharge the injunction.

9. We further proposed that if the parties by mutual agreement wished to sell the timber at any time, they should, by such mutual agreement, be free to do so notwithstanding the injunction. Both parties indicated that they thought these terms were reasonable but the plaintiff said that he would have difficulty in paying the godown charges before the end of the month. The defendant said there was a danger that if the charges which have now been outstanding for some time were not paid promptly the owners of the godown might take steps to recover their money.

10. In the circumstances it seems to us that the plaintiff should be prepared to pay these charges in a shorter period than the 13 days which now remain until the end of the month and we propose to make the continuation of the injunction, subject to the condition that the outstanding charges will be paid on or before the 26th January.

11. We think that the appellant should be entitled to the costs of this appeal, such as they are, and any costs in which he was involved in the application before the judge in the court below to set aside the injunction. The order will of course contain provision that the payment by the plaintiff of the godown charges will be without prejudice to any right which he may have to recover these charges from the defendant if the plaintiff is successful in his action.

12. We strongly recommend the parties to try and get together and get this timber on the market as quickly as they can so that their liabilities are kept as small as possible. We will make an order in this case in the terms already indicated.

18 January, 1968.

Representation:

Parties in person