Karting Association of Hong Kong, China Ltd v. The Hong Kong, China Automobile Association

HCA 1/2024

[2024] HKCFI 241

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1 OF 2024

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BETWEEN

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D E C I S I O N

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1.I decline to grant any interim-interim injunction. What the plaintiff is seeking is a mandatory injunction, and granting this on an interim-interim basis is even more drastic than granting it at the interlocutory stage.

2.At the interlocutory stage, the court needs to feel a high degree of assurance that at trial, it will be shown that the injunction was rightly granted: see Music Advance Limited v Incorporated Owners of Argyle Centre Phase I [2010] 2 HKLRD 1041 at paragraph 12(a). At the interim-interim stage, the plaintiff is basically asking the court to feel assured in this way even though there is insufficient time to consider the materials. But in such a situation, the risk of being wrong and the risk of resulting injustice can be quite acute, and I refer again to Music Advance Limited at paragraph 12(f).

3.There are particular difficulties in the present case. First of all, it is far from clear that there is a contract to the effect as alleged in the plaintiff’s skeleton, paragraph 15, that the defendant must delegate to the plaintiff, when the wording of the emails referred to the defendant having some scope for discretion. More importantly, it is far from clear that I can at this stage form a view that there is a strong case of bad faith. This is a very serious allegation by the plaintiff, and I do not feel able to form such a view that there is a strong case based on selected parts of the emails and the audio transcript referred to today.

4.The plaintiff says that if the court is not satisfied about the high chance of success, it should consider the justice of granting, and not granting, the interim injunction. It said today that it may not receive subsidies if the delegation is not granted, but there is no evidence at all as to the circumstances in which the subsidy might be suspended, when the subsidy is paid, what factors are looked at in deciding whether or not to pay the subsidy, etc. Mr Hon’s skeleton has said that the organisation faces a cessation of operation within weeks, but again there is no evidence as to the plaintiff’s current financial savings, what expenses are needed, whether interim support from the government is available, and so on. According to the plaintiff’s evidence, the government is the one which required the delegation to the defendant in the first place. So is it the case that the government would just cut off funding? That is not addressed.

5.The defendant also points out that the power being suspended here is only the power to license competitors. The plaintiff can still hold competitions as the defendant’s Facebook post shows. They just need to ask for permission, and the defendant says that this shows that therefore, this does not affect the funding from the government. Mr Hon has said that the plaintiff will not have the power to independently run the competitions, but the point is that the plaintiff can still run the competitions in the interim, and there is also no indication that it would affect the funding in the meantime.

6.I am also not satisfied that urgency has been made out on the other points. Insofar as the licensing aspect is concerned, all karters can get licensed directly from the defendant as announced by the defendant in its Facebook notice. So it is not the case, as suggested by the plaintiff, that the competitors will miss out. After all, the plaintiff is just exercising a delegated power from the defendant so the defendant can, presumably, in the interim act in place of the plaintiff.

7.The plaintiff also submits that there is no injustice to the defendant if the injunction is granted. But the forcing of the defendant to grant a delegation of a power which would otherwise reside in itself in circumstances when it considers that the conditions are not made out – this seems to me to be an injustice. As the defendant says, the power belongs to the FIA, the FIA delegated the power to the defendant and the defendant on-delegated the power to the plaintiff. And so it is prejudicial to the defendant if it is forced to delegate its power to the plaintiff in circumstances which it considers inappropriate. The defendant would no doubt have to answer to the FIA about this.

8.I decline to grant the interim-interim injunction.

Mr Kevin Hon, instructed by ZM LAWYERS, for the Plaintiff

Mr Law Ka Sing, instructed by David Fenn & Co., for the Defendant