Rich Trend Ltd v. 張文房 and Others
Read the full judgment text of HCA 906/2022 on BabelCite. This High Court CFI judgment was delivered on 1 August 2023.
1. This is the Plaintiff’s application by summons filed on 25 July 2022 (the “ P’s Summons ”) for :
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HCA 906/2022 [2023] HKCFI 2007 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 906 OF 2022 ________________________ BETWEEN
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________________________ REASONS FOR DECISION ________________________ A. INTRODUCTION 1.This is the Plaintiff’s application by summons filed on 25 July 2022 (the “P’s Summons”) for:
2.By Order of B. Chu J dated 29 July 2022, the Ex Parte Injunction Order was continued as against the 2nd Defendant until final determination of P’s Summons or further order of the Court. 3.The Plaintiff (through its counsel, Mr. Andrew Mak[1]) confirmed to the Court that for the purpose of P’s Summons, the Plaintiff now only seeks interim relief as against the 2nd Defendant. 4.Having considered the evidence filed and the arguments put forward by counsel of both parties, I made the orders set out in Section E below at the hearing on 1 August 2023, with reasons to follow, which are now set out below. B. BACKGROUND 5.As a matter of brief background:
6.The events which occurred on 17 July 2022 which led to the Plaintiff’s application for the Ex Parte Injunction Order do not appear to be denied by the 1st, 2nd and 4th Defendants:
7.Under the Ex Parte Injunction Order, the Defendants were restrained from (inter alia) entering or remaining in the Subject Property, and the Plaintiff also gave undertakings not to carry out renovation works at the Subject Property and would hand over the keys to the locks of the Ground Floor and 1st Floor of the Subject Property to the Plaintiff’s solicitors who would keep the keys as stakeholder. C. LEGAL PRINCIPLES 8.It is trite that an applicant for interlocutory injunction is required to show (i) serious issues to be tried on the merits, and (ii) that the balance of convenience lies in favour of granting the injunction: American Cyanamid Co v. Ethicon Ltd [1975] AC 396. 9.In the context of land disputes, the right to obtain interlocutory injunction is not limited to the registered owner of the land in question. Instead, it extends to a person in possession of the land: see Billion Star Development Ltd v Wong Tak Chuen [2012] 2 HKLRD 85 at §38(1) per Au J (as he then was). 10.For an injunction concerning trespass to land:
See: Billion Star, supra at §38(4). 11.Where the plaintiff seeks a mandatory injunction, the applicable principles are set out Music Advance Limited v The Incorporated Owners of Argyle Centre Phase I [2010] 2 HKLRD 1041 at §12, in particular:
12.The above are not in dispute between the parties. D. SERIOUS ISSUE TO BE TRIED 13.Having carefully considered the parties’ evidence, I am of the view that the Plaintiff has satisfied the threshold of showing a serious issue to be tried on its claim for trespass. D1. The Plaintiff’s claim to possessory title of Lot 776 and the Subject Property 14.The Plaintiff’s claim for possessory title (by way of adverse possession and/or proprietary estoppel) of Lot 776 on which the Subject Property is situated is currently being litigated in the Pending HCA and is yet to be determined. 15.As was held by Mr. Recorder William Wong SC in his decision dated 2 February 2023[2] in relation to the Plaintiff’s application against the 1st and 2nd Defendants for default judgment on the basis that they had failed to file any defence:
16.I agree with the learned Recorder’s view (at paragraph 17 of his decision) that the factual disputes between the parties herein (including, amongst others, when the Plaintiff first went into possession of Lot 776) cannot resolved in a summary manner and will have to be resolved at trial. 17.For the purpose of supporting its application for interlocutory injunction, the Plaintiff has provided affirmation evidence on the chain of title of Lot 776, with supporting contemporaneous documents, and how the Plaintiff came to acquire the development rights in respect thereof and entered into possession. It is plain to me that the Plaintiff has raised at the very least a serious issue to be tried, which is not a high threshold to cross. 18.In any event, insofar as the 1st, 2nd and 4th Defendants are disputing the Plaintiff’s claim to possessory title, contending that the Plaintiff did not enter into possession of Lot 776 in 1996, and that Magic Bright remains the rightful owner thereof, no one with direct knowledge of the chain of title and historical events relating to possession of Lot 776 and the Subject Property has given evidence on the Defendants’ behalf in this action. The 2nd Defendant, who filed affirmation evidence in opposition to P’s Summons on behalf of himself and the 1st and 4th Defendants, does not have direct knowledge of these matters. D2. The 2nd Defendant’s alleged authorization from Magic Bright 19.The acts of the Defendants relied on by the Plaintiff as constituting trespass during the period between 17 and 23 July 2022 have not been denied by the 1st, 2nd or 4th Defendants. These include:
20.The only justification provided is that the 2nd Defendant was allegedly authorised by Magic Bright to enter into the Subject Property to carry out decoration works. But the purported reliance by the 1st, 2nd and 4th Defendants on such alleged authorisation is not without problems. 21.First, insofar as the 2nd Defendant relies on the March 2018 LOA from Magic Bright to him, Magic Bright has been struck off the register on 16 July 2018 and was dissolved on 4 July 2023. Although there is no expert evidence adduced by the parties as to the effect of dissolution of a BVI company, but applying common law principles, upon dissolution of a company, the authority of its directors cease, and as a result, agents of the company (the 2nd Defendant in this case) who derive authority from such directors also cease: see Bowstead and Reynolds on Agency, 2nd Ed, §10-018. It therefore follows that any authority which Magic Bright may have given to the 2nd Defendant to enter into the Subject Property would already have ceased since 4 July 2023. 22.I should also add that the 2nd Defendant produced no evidence to show that steps are being taken for the restoration of Magic Bright. The email correspondence produced by the 2nd Defendant with Hunte & Co plainly do not show that such steps are being taken. In fact, the emails do not refer to Magic Bright at all. Up to now, there is no evidence to show that anyone has been engaged to carry out works for the restoration of Magic Bright to the register in the BVI. 23.By reason of the aforesaid, the current state of the evidence is such that the 2nd Defendant (whether by himself or his agents) simply has no valid authority from Magic Bright to enter into or use the Subject Property. 24.Mr. Mak further submits that upon Magic Bright’s dissolution, the prima facie position is that its assets would vested in the Hong Kong Government unless the company is restored to the register. Given my views on the cessation of any authority that may have been given to the 2nd Defendant upon Magic Bright’s dissolution, it is unnecessary for me to rule on this further proposition for present purposes. 25.Second, Mr. Mak argues that the March 2018 LOA from Magic Bright to the 2nd Defendant is a “recent fabrication” by reason that:
26.The 2nd Defendant has not provided any explanation as to why he purported to rely on a different authorisation letter on the return date hearing and later in his 2nd affirmation to justify the Defendant’s entry into the Subject Property. 27.I agree with Mr. Mak that these circumstances put in doubt the genuineness of the March 2018 LOA, and further supports my conclusion that the Plaintiff has clearly shown a serious issue to be tried on its claims for trespass in this action. 28.Ms. Virginia Leung (Counsel for the 2nd Defendant) argues that Ex Parte Injunction Order should be discharged on the ground of delay, in that Magic Bright purchased the Subject Property in October 2008, and P’s Summons for injunctive relief was only taken out in July 2022, 14 years later. Such submission on delay is, with respect misplaced, as it is not in dispute that the alleged trespass warranting an application for injunction only occurred on 17 July 2022, and the application for interlocutory relief was made by the Plaintiff a few days later on 23 July 2022. There is thus no delay at all. 29.I also cannot agree with Ms. Leung’s submission that the Plaintiff is not entitled to an interlocutory injunction in the present case unless its possessory title is finally established and determined in the Pending HCA. According to the trite legal principles governing applications for interlocutory injunctions as set out in American Cyanamid (see §8 above), the Plaintiff only needs to show a serious issue to be tried. D. BALANCE OF CONVENIENCE 30.As regards balance of convenience, I am of the clear view that such balance lies in favour of continuing the Ex Parte Injunction Order, which effect is only to preserve the status quo in place prior to 17 July 2022 when the Defendants’ alleged acts of trespass occurred. 31.There is no dispute by the 2nd Defendant that the Plaintiff has been carrying our renovation at the Subject Property since 2020. There is also evidence to show that the Plaintiff is renting out the 2nd Floor and Roof of the Subject Property to the Tenant, and intends to rent out the other parts the Subject Property after renovation or put the Subject Property up for sale after such renovation. 32.The presence of the Defendants at the Subject Property would mean that the renovation works cannot continue, the quiet enjoyment and use of the Subject Property by the Tenant may be interfered with, and the Plaintiff may suffer financial and reputational harm that will either be difficult to quantify or otherwise irreparable. The value of the Subject Property in the market may also be adversely affected by reason of concerns of quiet enjoyment, such adverse effect on value would also be difficult to quantify. 33.On the other hand, it is difficult to see what prejudice the 2nd Defendant would suffer from the continuation of the Ex Parte Injunction. The 2nd Defendant does not purport to have any beneficial interest in the Subject Property. The 2nd Defendant also has not provided any evidence as to its relationship with Magic Bright, and how it can be said that preventing the 2nd Defendant (and his agents) from entering into or using the Subject Property would affect the 2nd Defendant’s own interest (as opposed to Magic Bright’s interests). 34.In any case, Magic Bright has been struck off and now dissolved, and there is no evidence provided to the Court that any steps are being taken to restore it to the register. 35.In any event, any loss which the 2nd Defendant may suffer as a result of the interlocutory injunctions is protected by the undertaking as to damages provided by the Plaintiff. 36.I am also of the view that the balance of convenience lies clearly in favour of a mandatory injunction to require any items which the Defendants had installed at the Subject Property during the period 17 to 23 July 2022 without consent of the Plaintiff to be removed. As confirmed by Mr. Mak at the hearing, the only item installed at the Subject Property by the Defendants is a CCTV camera on the external wall of the Ground Floor of the Subject Property. 37.I agree with Mr. Mak’s submission that such installation of the CCTV camera serves no purpose and would obstruct the use and enjoyment of the Subject Property by the Plaintiff and/or its Tenants. No loss would be caused to the 2nd Defendant by their removal. E. DISPOSITION 38.For the reasons above, the Court makes the following orders:
Mr. Andrew Mak, leading Mr. Xizhen Wang, instructed by Adrian Yeung & Cheng, for the plaintiff Ms. Virginia Leung, instructed by M.K. Lam & Co, for the 2nd Defendant |
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