Tsun Fat Finance Co. Ltd. v. Commissioner of Police

HCA007017/2000

HCA7017/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.7017 OF 2000

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Coram: Deputy High Court Judge Fung in Court

Dates of Hearing: 6-7, 10-12 June 2002

Date of Judgment: 15 July 2002

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J U D G M E N T

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1.The plaintiff issued the writ on 13 July 2000 against the defendant for the possession of and damages for conversion in respect of 50 packets of diamonds seized by the defendant from the plaintiff under a search warrant on 13 March 1998. The plaintiff alleged that the defendant should have returned the diamonds to it within reasonable time upon demand after the Department of Justice ("DOJ") advised on 1 February 1999 that no criminal prosecution was to be instituted, and that the defendant had wrongfully detained the diamonds in order to ascertain whether there were other claimants making adverse claims.

2.On 10 August 2000, the defendant issued an interpleader summons naming 12 claimants. On 31 October 2000, the 1st claimant withdrew its claim. On 8 March 2001, the interpleader summons was heard before Yeung J (as he then was). The 2nd to 12th claimants also withdrew their claims. The defendant undertook to return the diamonds to the plaintiff within three days. The summons was dismissed with no order as to costs against the 12 claimants. Costs between the plaintiff and the defendant on the interpleader summons was made costs in the cause of the action herein. The plaintiff perused the claim on damages for conversion.

I. LIABILITY

The facts

3.The following facts are not in dispute. The plaintiff is a licenced money lender. It is in the business of, inter alia, lending money to diamond traders on the pledge of diamonds.

4.Between January and May 1997, 18 diamond merchants including the 12 claimants had sold diamonds worth over $15 million to Chan Cheung Chun ("Chan") representing Walco Development Co. Ltd ("Walco"). Chan further sold the diamonds to one Mrs Lin.

5.On 16 February and March 1997, Mrs Lin's husband Lin Han Hung ("Lin") entered into four loan agreements with the plaintiff to borrow $1 million, $1 million, $1.1 million and $1.25 million respectively totalling $4.35 million and pledged four lots of diamonds with declared values of $1 million, $1 million, $1.1 million and $1.25 million respectively as security. The four loan agreements were identical in terms. The repayment date under the first two loan agreements was 16 August 1997, and the repayment date under the last two loan agreements was 11 September 1997. The diamonds were in 50 packets with over 25,000 pieces weighing 938.7 carats.

6.Clause 5 of the loan agreements provides that :

"In the event of default of repayment by the Customer, whether in whole or in part of the said loan, the Company (without prejudice to its other rights under common law or any legislation then in force) is and will be entitled to sell or otherwise dispose of the said Diamonds or any part or parts thereof in such way or ways as the Company may see fit and without any court order or any prior notice (whether oral or written) to the Customer and to reimburse itself (i.e. the Company) the said loan and interest thereon together with all the costs and expenses incurred in such a sale or disposition. Any surplus arising from such sale or disposition (after deducting all the costs and expenses to incurred) will be refunded to the Customer within 30 working days (Saturday and Sunday excluded) after the completion of such sale or disposition without interest."

7.Between 6 and 11 June 1997, the 18 diamond merchants reported to the police that Chan had failed to pay them for the diamonds. The claimants stated the purpose for making the report as follows :

(1) The 2nd, 8th, 9th, and 10th claimants stated that they would like to either get the money or the diamonds back.

(2) The 3rd, 4th, 5th, 6th, 11th and 12th claimants stated that they would like to get the money back.

(3) The 1st claimant said the payment of the price was not yet due and did not state any purpose.

(4) The 7th claimant did not state any purpose.

8.On 15 August 1997, 16 diamond merchants including the 2nd to 12th claimants commenced proceedings in HCA 8575/1997 against Walco for the price of the diamonds. On 10 September 1997, default judgment against Walco was obtained.

9.On 16 August and 11 September 1997, payment under the four loan agreements fell due and remained unpaid.

10.On 23 February 1998, officers of the defendant executed a search warrant on the plaintiff's office and seized the four loan agreements.

11.On 12 March 1998, the plaintiff wrote to Lin giving notice that unless $4.35 million were repaid within three days, it would sell the mortgaged diamonds for the recovery of the arrears under the loans.

12.In the Affirmation of Sgt Chan Kin Ki dated 10 August 2000 on behalf of the defendant in support of the interpleader summons, it was stated that as Lin could not repay the money to the plaintiff in August and September 1997, the plaintiff had forfeited the diamonds.

13.On 13 March 1998, officers of the defendant executed another search warrant and seized the diamonds pledged by Lin under the four loan agreements.

14.Between 5 and 12 May 1998, officers of the defendant invited the diamonds merchants to inspect the seized diamonds and the following claimants had made positive identification :

(1) The 2nd claimant stated that to the best of its understanding, part of the diamonds in seven packets were of the same quality, size and colour as sold by it and it still had to collect payment from Chan.

(2) The 3rd claimant stated that to its understanding, part of the diamonds in one packet were similar in size, colour and quality to those sold by him and stated that up to then, it had not received payment from Walco or Chan and it wanted the money back.

(3) The 4th claimant stated part of the diamonds in three packets were probably the goods sold by it and stated it still had to collect payment from Chan.

(4) The 1st claimant stated that one whole packet of diamonds matched the quality, colour and size of goods sold by it and it still had to collect payment of the above goods from Chan.

15.Both the 2nd and 4th claimants identified three packets in common. In the case of 2nd, 3rd and 4th claimants, the identified and unidentified portions of the diamonds were not separated but remained mixed in the same packet.

16.On 1 February 1999, the Prosecutions Division of the DOJ advised that no criminal proceedings should be taken against Chan, and advice should be sought from the Civil Division as to disposal of the diamonds.

17.On 17 February 1999, the officer in charge of the case sought advice from the Civil Division, DOJ.

18.On 12 March 1999, the Civil Division advised as follows :

"2. You seek our advice on the proper disposal of property, namely packets of diamonds, seized by police during investigation of a suspected case of obtaining property by deception.

3. I have referred the file to our Civil Litigation Unit with instructions to institute interpleader proceedings to determine the proper disposal of the seized property among the parties concerned."

19.On 24 April 1999, the plaintiff wrote to the defendant stating that as it learnt that criminal investigation had concluded, it had contacted the officer in charge many times but the officer delayed in returning the exhibit and it was suffering huge loss of interest. The plaintiff had referred the matter to their solicitors and it would hold the defendant liable for its loss.

20.On 20 May 1999, the defendant wrote back to the plaintiff informing it that no prosecution would be undertaken and added that :

" With regard to ownership of diamonds connected with case, further advice is being sought from Civil Litigation Unit of the Department of Justice relating to disposal of the diamonds. At present, the case is still under review by this department. Upon receipt of their recommendations all parties claiming ownership of the diamonds will be contacted with a view to settling the matter."

21.On 25 May 1999, the plaintiff wrote to the defendant :

" We regret that the diamonds taken away from our company cannot be returned to us even there is no prosecution action to be undertaken. We hold a different view that the matter of ownership has no concern with the Civil Litigation Unit of the Department of Justice. The subject article was taken away from our company and it should be returned to us. Any dispute in the ownership of the said articles should be decided by the Court of Justice but not from the said Department. We demand for the return of the said article forthwith."

22.On 22 June 1999, the defendant sent a sample letter to the diamond merchants ("1st sample letter") :

" We have during the investigation of the captioned case taken possession of certain diamonds from a company to whom the diamonds were said to be pledged.

We have finished our investigation of the captioned case and no prosecution action is taken.

As it is expected that there are a number of potential claimants to the diamonds and our investigation has revealed you might be a potential claimant of the diamonds, we are considering instituting interpleader proceedings to seek the court's order as to how the diamonds are to be disposed of.

Before we proceed to institute interpleader proceedings, please confirm in writing within 14 days from the date of this letter whether you wish to claim the diamonds. If in the affirmative and more than 1 claimant claims the diamonds, you will be named as one of the Claimants in the interpleader proceedings and you will be asked to appear (or represented by your legal representatives) in court at the hearing of the interpleader proceedings to pursue your claim. You may wish to note that in the interpleader proceedings the unsuccessful Claimant(s) may be liable to pay our costs and the costs of the successful Claimant(s) of the proceedings. If we do not receive your confirmation by such time, we will assume that you do not claim the diamonds."

23.The letter was also sent to the plaintiff. On 20 July 1999, the plaintiff wrote to the defendant stating that it did not see that interpleader proceedings were required and demanded the return of the diamonds.

24.Between 21 July and 3 September 1999, all the 12 claimants replied to the defendant. Their indications were as follows :

(1) The 1st, 3rd, 4th, 5th, 6th claimants confirmed that they would make claims on the diamonds;

(2) Other claimants sent an identical letter as follows :

" Contents have been noted, however we feel it is very unfortunate that we have been put in a position were (sic.) we are expected to pay for the court proceedings, in case we are unsuccessful.

As far as we are concerned, we would like to see that the property seized is sold, and the proceeds thereof split between the claimants. This is the only way that we feel it would be fair to all parties.

We took a writ out against Walco Development Co Ltd in 1997, copies of which are with the Police Department. There were in total 16 plaintiffs, as such we feel that any property that belonged to Charles Chan (directly or indirectly) should fairly be distributed.

The company that the goods were seized from, should have no legal claim against the goods, as the goods were part of ill-gotten gains."

25.On 6 November 1999, the defendant sent another sample letter to those claimants suggesting the splitting of the proceeds of sale on the diamonds ("2nd Sample letter") :

" As there are a number of claimants who have indicated that they will claim the diamonds, we will take out interpleader proceedings for the court to decide the appropriate way of disposing of the diamonds. Please clarify and confirm in writing within 14 days from the date of this letter whether you wish to claim the diamonds... If we do not receive your confirmation by such time, the aforesaid letter of you will be taken as that you wish to claim the diamonds and you will be named as a Claimant in the interpleader proceedings."

26.In the meantime, the defendant wrote to various claimants verifying their capacity and/or appropriate addresses for service in preparation of the interpleader summons.

27.On the other hand, the plaintiff's solicitors wrote to the defendant demanding the return of the diamonds, and complaining, without prejudice that interpleader proceedings were inappropriate, the delay in issuing such summons.

28.On 20 May 2000, the plaintiff applied for leave for judicial review of the defendant's decision in refusing to return the diamonds. Leave was refused.

29.On 13 July 2000, the writ herein was issued and served. On 10 August 2000, the defendant took out the interpleader summons.

The plaintiff's case

30.The plaintiff accepted that the initial seizure of the diamonds under the search warrant was lawful. However, upon the decision of no prosecution on 1 February 1999, and allowing for reasonable time to take proper legal advice, the diamonds should then be returned to the plaintiff. Failure to do so upon demand amounted to conversion and/or trespass to goods.

31.Mr Law, counsel for the plaintiff, submitted that at all material times, the defendant could not expect to be sued for or in respect of the diamonds by anyone except the plaintiff, and taking out the interpleader summons did not provide a defence to conversion.

32.Mr Law submitted that as at 12 March 1999 when legal advice was given, there was no basis for any interpleader proceedings :

(1) Only the 1st, 2nd, 3rd and 4th claimants had made positive identification of the diamonds but they said they still had to collect payment of the diamonds;

(2) The 8th, 9th and 10th claimants said they either wanted payment or the diamonds but they had not identified any diamonds.

33.It is common ground that at all material times, the defendant has never received any threats or intimation of legal action by any claimant. Mr Law submitted that as there was no claim on the diamonds by those who had made identification, and those making claims could not point to any specific goods, the defendant could not expect to be sued for or in respect of the diamonds by anyone except the plaintiff at that stage. The advice on 12 March 1999 to take out interpleader summons was misconceived.

34.Mr Law further submitted that while as at 22 June 1999 there was no or no valid claimants on the diamonds, the act of sending out the 1st sample letter was to invite claims on the diamonds. Mr Law also submitted that the wording of the letter was misleading :

(1) "Our investigation has revealed you might be a potential claimant of the diamonds" might have given the claimants a hope that they had a proprietary claim over the diamonds notwithstanding that they had already obtained default judgment on the price of the goods;

(2) "If we do not receive your confirmation by such time, we will assume that you do not claim the diamonds" might also have encouraged them to make a claim.

Mr Law submitted the 1st, 3rd, 4th, 5th and 6th claimants were invited by the defendant to claim for the diamonds.

35.The 2nd sample letter went even further in deeming the remaining claimants as making a claim on the diamonds. By then, the claimants had provided copies of the writ in HCA 8575/1997 to the defendant. If the defendant had been careful in their investigations, it ought to have known that the claimants had sued for the price of the goods, and judgment had been obtained, and the claimants had no proprietary claim on the diamonds. Any fear of being sued by the claimants was without real foundation. The interpleader summons was misconceived.

36.Mr Law submitted that a party, whom by his own act, is placed in a situation to be sued, cannot call on the Court to substitute another defendant under the interpleader act (Belcher & ors, Assignees of Maberly, a Bankrupt v. John Smith (1832) 9 Bing. 81).

37.Mr Law submitted that if the interpleader summons were misconceived, there would be no other justification or defence to conversion as it was not the duty of the police to investigate into civil claims between private citizens.

38.Alternatively, Mr Law submitted that even if the defendant were justified in taking out the interpleader summons at the later stage :

(1) They should have detained, at the most the nine packets wholly or partly identified by the claimants and returned the remaining 41 unidentified packets;

(2) They should not have delayed for 17 months from March 1999 to August 2002 in taking out the interpleader summons.

39.Mr Law complained that the plaintiff did not know that only nine out of 50 packets had been identified by four claimants until Sgt Chan Kin Ki filed an affirmation on 10 August 2000 in support of the interpleader summons, and further, it did not know that all the 11 remaining claimants had obtained judgment against Walco for the price of the goods until the affirmations of the claimants were filed in December 2000. Had the matter come to a head earlier, the inevitability of the claimants withdrawing the claims could have taken place before the long gestation period.

40.It was submitted that the delay in itself was inconsistent with the plaintiff's ownership of the diamonds and amounted to conversion for the period between 12 March 1999 and 10 August 2000.

The defence case

41.Mr Kwok for the defence did not argue that the claimants could have any proprietary interest in the diamonds because they had obtained judgment for the price in September 1997.

42.Mr Kwok submitted that there was no conversion because :

(1) The police did expect to be sued by the claimants and was therefore entitled to interpleader relief;

(2) Even if the interpleader proceedings were misconceived, the refusal to return the diamonds to the plaintiff was otherwise conditional, qualified and justifiable.

43.The defendant did expect to be sued by the claimants because :

(1) According to the cautioned statement of Chan, he had sold the diamonds to Mrs Lin;

(2) Chan said Lin told him he had either sold or mortgaged the diamonds in Taiwan or Hong Kong and, inter alia, mortgaging some diamonds to the plaintiff;

(3) The claimants were unpaid by Chan;

(4) The claimants were making rival claims on the diamonds.

44.Alternatively, it was submitted that the defendant was entitled to take out the interpleader summons because it had bona fide doubt as to the ownership of the diamonds.

45.It was submitted that all 50 packets of diamonds were detained because there was prima facie evidence that the diamonds could be traced to Chan and in turn the 18 merchants.

46.Mr Kwok submitted that even if the interpleader summons were misconceived, it would only go to the consideration on costs thereof, and would not affect the defence to conversion. The refusal to return the diamonds was otherwise conditional, qualified and justifiable :

(1) From the result of the investigation, the defendant did have a bona fide doubt as to the title to the diamonds and expected there were potential claimants;

(2) The police has a duty to return the goods to the rightful owner;

(3) The defendant should be allowed reasonable time to clear up the doubt and ascertain the true ownership to the diamonds;

(4) Reasonable time has not elapsed until the determination of the interpleader summons by the court;

(5) The defendant never asserted the right of any third party save that it wanted to ascertain all the rightful claimants;

(6) The defendant never intend to wilfully convert or wrongfully deal with the goods save that they wanted the protection of a court order as to the disposal of it;

(7) The defendant also intended to protect the plaintiff's interests by resorting to the court for an order;

(8) Even if the advice of DOJ to issue interpleader proceedings were wrong, it was duty bound and reasonable for the defendant to have sought it and to have acted upon it.

47.Mr Kwok submitted that there was no intentional delay in issuing the interpleader proceedings. It was reasonable for the defendant to identify all potential claimants and to clarify whether they really wanted to claim on the goods or only the proceeds. The 8th claimant was resident in Israel and the defendant also had to seek directions from the Director of Administration as to service outside jurisdiction.

48.It was submitted that no weight should be placed on to the replies of the 7th to 12th claimants to the 1st sample letter to infer that the defendant had knowledge of the writ in HCA 8575/1997 because on the documents before the court, there was no evidence that the defendant had actually considered the writ.

49.Even if the defendant were aware of the writ and/or the judgment, given the amount of the diamonds involved, it was reasonable for the defendant to make further enquires as to ownership after the conclusion of the criminal investigation.

Conversion

50.The law on conversion and detinue is to be found in the common law in Hong Kong. For the purpose of the present proceedings, no distinction is sought to be drawn between the two torts.

51.According to Clerk & Lindsell on Torts (18th Edition, 2000) at para.14-09 :

"Forms of conversion

... conversion is an act of deliberate dealing with a chattel in a manner inconsistent with another's right whereby that other is deprived of the use and possession of it (Kuwait Airways v. Iraqi Airways [1999] CLC 31, per Mance J). To be liable the defendant need not intend to question or deny the claimant's right; it is enough that his conduct is inconsistent with those rights."

At para.14-10, the learned authors cited the wrongful retention of goods as a mode of conversion, and "wrongfully" for those purposes means without the actual permission of the owner.

And at para.14-27 :

"Refusal only evidence of a conversion

Refusal to deliver up on demand is not as such a conversion, but only evidence of it. It is necessary to consider whether the refusal is unconditional or not, and to decide whether in either case the refusal is justifiable. Upon unconditional refusal it is normal, however, to infer denial of the claimant's title."

And further at para.14-29 :

"Refusal must be unconditional

The refusal must also be unconditional. A person on whom a demand for goods is made may not have them immediately available even though they are under this control; he may be the agent of another, or he may be under the belief that he has himself some right or title to the property. In all these cases he cannot be required to act at a moment's notice, or refuse at his peril. He is entitled to a reasonable time to get the goods into his own hands, and where necessary to consult his principal. So a warehouseman's employee is not liable in conversion if he refuses to give up goods while he checks with higher authority; again, a person in possession of another's goods has the right to a reasonable opportunity to check whether the person asking for them really is entitled to them. On the other hand, a refusal does not cease to be unconditional if the defendant, while admittedly in possession of goods and while not disputing the claimant's right, claims time to do something to the goods other than taking steps towards their return. Thus in Secretary of State for Defence v. Guardian Newspapers Ltd (The Times, December 16, 1983 (Scott J)), the defendants were held liable for conversion when they refused to hand over secret documents that had come into their possession before they had obliterated all marks that might identify their source."

And also at para.14-76 :

"Defendant's ignorance of claimant's title generally irrelevant

The general rule is clear: a defendant is liable in conversion whether or not he knew, or had reason to know, that what he was doing infringed the claimant's rights. A claimant who proves (a) a dealing with the goods in a manner inconsistent with his rights, and (b) an intention in the defendant to deny his right or to assert a dominion which is in fact inconsistent with such right, has made out the ingredients of the tort, whatever the state of knowledge of the defendant. Although occasionally this principle has been lost sight of, the law remains as expressed by Diplock LJ in Marfani & Co. Ltd v. Midland Bank Ltd [1968] 1 WLR 956, 970-971 :

'At common law one's duty to one's neighbour who is the owner, or entitled to possession, of any goods is to refrain from doing any voluntary act in relation to his goods which is a usurpation of his proprietary or possessory rights in them. Subject to some exceptions ù it matters not that the doer of the act of usurpation did not know, and could not by the exercise of any reasonable care have known of his neighbour's interest in the goods. This duty is absolute; he acts at his peril.'

Put another way, the rule in such cases is that 'persons deal with property in chattels or exercise dominion over them at their peril'."

52.The following passages in Halsbury's Laws of Hong Kong (Vol.25, 2000 Edition) have also been cited in submissions :

"[380.409] Detinue - failure to deliver after demand.

The gist of the cause of action in detinue is wrongful detention, and in order to establish detinue it is usual to prove demand and refusal after reasonable time to comply with the demand. The mere keeping of another's goods does not amount to detinue and it is not conversion by detention merely to be in possession of a chattel without title, as where a finder reduces goods into his possession or a bailee holds over after the period of the bailment has expired. Where, however, a person has possession of the goods of another and a valid demand is made for them by the owner, an unqualified and unjustified refusal to deliver them up entitles the owner to sue in detinue and is evidence of conversion."

"[380.410] What amounts to a demand.

The demand for the return of goods must be specific. An oral demand is sufficient..."

"[380.411] What amounts to a refusal.

A qualified or justifiable refusal to deliver up the article demanded is not evidence of conversion. Thus, there is no evidence of conversion where the person in possession of the goods refuses to deliver them up on the ground that he does not know to whom they belong and keeps them until he can ascertain the owner. Similarly, where the goods are in the possession of an employee who refuses to deliver them up without an order from his employer, the employee's refusal is not evidence of conversion against the employer or the employee. Where, on the other hand, the person in possession of the goods refuses to deliver them up on the ground of a claim of right by a third person which is not substantiated, or where he refuses to deliver them up unless the owner complies with some condition which the person in possession has no right to impose, or where he fails, without lawful excuse, to deliver them up, this is evidence of conversion. Thus, if a person who has possession of the goods of another is requested by the owner to send them to a particular place and not only refuses to send them to that place but says generally that he will not deliver them up unless payment of a debt due to him from the owner is guaranteed, the general refusal is evidence of a conversion, even though he might not be bound to send the goods to any particular place. A person may be guilty of detinue when he refuses to deliver up goods until the cessation of an industrial dispute on the grounds that he genuinely and reasonably fears retaliatory action by his employees; and liability for detinue may follow even though the defendant unequivocally acknowledges the plaintiff's ownership of the goods if the defendant seeks to detain the goods for an indefinite period."

53.There is no dispute that the passages cited above are correct statements of the law.

54.There is no dispute that the plaintiff has demanded the return of the diamonds. The earliest date on record is the letter of the plaintiff dated 24 April 1999.

55.Mr Law accepted that in the event the defendant were justified in taking out the interpleader summons, there would be no conversion from the date of the summons onwards. Hence, I shall consider the propriety of the interpleader summons first.

Interpleader summons

56.Order 17 of the Rules of the High Court, Cap.4A provides :

"Entitlement to relief by way of interpleader (O. 17, r. 1)

(1) Where-

(a) a person is under a liability in respect of a debt or in respect of any money, goods or chattels and he is, or expects to be, sued for or in respect of that debt or money or those goods or chattels by two or more persons making adverse claims thereto, or

(b) ... [Provision relating to bailiffs]

the person under liability as mentioned in sub-paragraph (a), or (subject to rule 2) the bailiff, may apply to the Court for relief by way of interpleader."

57.An account of the true nature of interpleader proceedings was given by Greene LJ in de La Rue v. Henru, Peron & Stockwell Ltd [1936] 2 KB 164, 170 and cited by Liu, JA in Unionix Developement Ltd v. Roe Investment Ltd & anor [1999] 1 HKC 593, 597 :

"The learned author (of Daniell's Chancery Practice, 4th Edition, vol.ii, p.1418) says this: 'Where two or more persons claim the same thing, by different or separate interests, and another person, not knowing to which of the claimants he ought of right to render a debt or duty, or to deliver property in his custody, fears he may be ...... by some of them, he may exhibit a Bill of Interpleader against them.' Then he says on p.1419: 'the sole ground on which the jurisdiction of the Court, in this case, is supported, is the danger of injury to the plaintiff' - that is the person who exhibits the bill - "from the doubtful title of the defendants... The plaintiff was the person against whom the claim was made; he came to the court of equity to obtain relief, and to meet the two claimants themselves; and the matter was then decided, either summarily by the Court, or by the usual machinery of directing enquiries, with a consequential order on further consideration, or by remitting the matter to the Courts of law... What, in substance, all along, both under the old equitable procedure and under the modern procedure, is being decided, is claims by two claimants against the person interpleading. What really happens is, that whereas there are two claimants harassing a person desirous of interpleading that person is by the interpleader proceedings calling upon the claimants to come out into the open and formulate their claims against him.

In substance, when an interpleader issue is tried, two actions against the person interpleading are being dealt with. Interpleader proceedings are the method of compelling the parties - either one, or both, or neither of whom may have actually issued a writ - to prosecute their claims. As it is the essence of interpleader proceedings that the person who has interpleaded has no title himself he naturally drops out of the suit. But in effect the entire matter is tried out in the presence of all the parties concerned, and the real claimants are compelled to put forward their claims and have them adjudicated upon."

58.In Unionix Development, Nazareth VP said at p.603I :

"... a misconceived and thus unfounded fear or expectation that one might be sued cannot meet the relevant criterion in O. 17 r. (1)(a) so as to give rise to an entitlement in that respect to apply under that rule for interpleader relief."

59.In NYK (Hong Kong) Ltd v. Wilfond Ltd & Anor [1997] 3 HKC 127, the following cases are cited by Nazareth VP at p.136 :

"In Watson v. Park Royal (Caterers) Ltd [1961]2 All ER 346 at 352A, [1961]1 WLR 727 at 734 Edmund Davies J held that :

'There is ample authority for the proposition that the discretionary relief of interpleader will not be granted unless there appears to be some real foundation for the expectation of a rival claim ...'"

"In Diplock v. Hammond (1854) 23 LJ Ch 550, Sir John Stuart VC held that :

'The principle of interpleader is, that the holder of a fund in which he has no interest, but which is claimed by two parties, shall not be harassed by claims made upon him by the adverse parties, who threaten to sue him alone, instead of proceeding to litigate their rights between themselves.'"

60.In Belcher & ors v. Smith (op. cit.), ￡15,000 were invested in consols in the name of the defendant and other trustees in trust to pay Maberly the dividends during his life, remainder over to his wife and issue of the marriage. In 1829, Maberly assigned his interest in the dividends to his son in law, George Robert Smith, nephew of the defendant. In 1832, Maberly became bankrupt, and the defendant, at the request of his nephew, went to the Bank of England, himself received the dividend. Instead of entering the money into the account of Maberly or George Robert Smith kept at the defendant's banking firm, the defendant entered it in an account of the firm for sums which they had no specific appropriation. Maberly's assignees, impeaching the validity of the assignment to George Robert Smith, sued the defendant for the amount of the dividend. A rule nisi was obtained under the Interpleader Act, 1 & 2 W.4 c.58, calling on the plaintiffs to exonerate the defendant, who had no interest in the affair, and to try the question with George Robert Smith. The words of the statute are :

"That upon application made by or on the behalf of any defendant sued in any of his Majesty's courts of law, in any action of assumpsit, debt, detinue, or trover, such application being made after declaration and before plea, by affidavit or otherwise, shewing that such defendant does not claim any interest in the subject-matter of the suit, but that the right thereto is claimed or supposed to belong to some third party, who has sued or is expected to sue for the same, and that such defendant does not in any manner collude with such third party, but is ready to bring into Court, or to pay or dispose of, the subject-matter of the action in such manner as the Court (or any Judge thereof) may order or direct, it shall be lawful for the Court, or any Judge thereof, to make rules and orders calling upon such third party to appear, and to state the nature and particulars of his claim, and maintain or relinquish his claim; and upon such rule or order to hear the allegations, as well of such third party as of the plaintiff; and in the mean time to stay the proceedings in such action; and, finally, to order such third party to make himself defendant in the same or some other action, or to proceed to trial on one or more feigned issue or issues; and also to direct which of the parties shall be plaintiff or defendant on such trial, or with the consent of the plaintiff and such third party, their counsel or attornies, to dispose of the merits of their claims and determine the same in a summary manner; and to make such other rules and orders therein as to costs, and all other matters, as may appear to be just and reasonable."

61.Upon showing cause, the plaintiff contended that the defendant had unnecessary interposed by receiving the dividends at the request of his nephew, and to serve his nephew's interests, that therefore was not entitled to a relief which it was in the discretion of the Court to concede or withhold. The defendant urged that as a trustee for Maberly, he was responsible for the dividend, and therefore justified in receiving it. He had acted for his own protection, and being a trustee, could not be deemed a volunteer. Tindal CJ discharged the rule nisi and held that :

"The act of parliament is not compulsory, but authorises the interposition of the Court at its discretion upon proper occasions; and our duty is to, see that the party applying for the exercise of our discretion, has not voluntarily put himself into the situation from which he calls on the Court to extricate him."

62.It has not been challenged that the plaintiff was entitled to possessory as well as proprietary interest over the diamonds. There is no evidence before the court that the plaintiff was suspected of any fraud, collusion or even notice of non-payment of the price by Chan at any time. There is not even evidence why the defendant had bona fide doubt as to the plaintiff's interest save the claimants has made a report to the police. I find that the plaintiff was entitled to a right of immediate possession of the diamonds at the close of the criminal investigation.

63.It is agreed that at all material times, none of the claimants had threatened or intimated that they would sue the defendant if the diamonds were not returned to them.

64.Mr Kwok argued that the defendant was entitled to take out an interpleader summons because it expected at least to be sued by the plaintiff if it had returned the diamonds to the claimants. With respect, the words of Order 17 are "is, or expects to be, sued for or in respect of that debt or money or those goods or chattels by two or more persons making adverse claims thereto". If it were otherwise, the rule would have read "is, or expects to be, sued by ... any of two or more persons making adverse claims thereto." This argument cannot succeed.

65.At the close of the criminal investigation, some of the claimants had indicated that the purpose of making the reports to the police was they wanted to have either the payment or the diamonds back, and others simply wanted payment. I find that it was merely their wish that the police might assist them to get payment or the diamonds back from Chan. For those who have made some kind of identification of the diamonds, their stance was that they still had to collect payment. Those claimants who said they wanted the goods back as an alternative had never made any identification. Mr Kwok agreed that expectation of some potential claimants is not equivalent to expectation to be sued. Even assuming that the defendant was unaware of the writ or the default judgment at that stage, it could have no real foundation to expect to be sued by any of the claimants before it sent out the 1st sample letter.

66.Upon legal advice, the defendant sent out the 1st sample letter. Para.14 of the Affirmation of Sgt Chan stated as follows :

"To dispose of the diamonds, letters were sent by the defendant to the potential claimants including the 18 merchants, Walco, Mr. Chan, Ms. Lam (i.e. Mrs. Lin), Mr. Lin, Po Kwong Company and the plaintiff in or about June 1999 asking them whether they want to claim the diamonds."

67.I find that the defendant had embarked upon the course of searching for potential claimants while there were no actual valid claimants. The 1st sample letter stated that it was expected that there were a number of potential claimants to the diamonds and police investigation had revealed the addressee might be a potential claimant. I find that more probable than not, it had induced the claimants to have false hope of a proprietary claim on the diamonds notwithstanding default judgment had been obtained by them against Walco for the price.

68.After the 1st sample letter, the 1st, 3rd 4th, 5th and 6th confirmed that they wished to claim on the diamonds. Looking at all the statements and correspondence, the only conclusion was that they wished to claim against Chan, which they had effectively done so by issuing the writ against Walco. I can see no indication that they would sue the defendant if it did not return the diamond to them.

69.As to the 2nd sample letter, all those claimants deemed to be making a claim by default had made no identification.

70.If the defendant were actually sued or threatened to be sued by the claimants for the return of the diamonds, then regardless of the merits of the claimants' claims, it ought to be entitled to interpleader relief. However, there was no such threats or intimations. Hence, in assessing whether there is any expectation to be sued, the defendant must ensure that any such fear is not unfounded or misconceived.

71.I find that the defendant did have knowledge of the writ in HCA 8575/1997 at the latest by 31 July 1999 as evidenced by the reference in the replies of the claimants who wanted to split the proceeds. The defendant ought to have realised that none of the claimants had shown any proprietary interest on the diamonds. The defendant could have no real foundation to expect to be sued by the claimants. The defendant was, by his own act, placed in a situation to be sued by the plaintiff, and could not call on the Court for relief under the interpleader proceedings.

72.Hence, I find that the plaintiff's application for interpleader proceedings was misconceived.

Conditional, qualified or justifiable refusal

73.Mr Kwok submitted that even if the interpleader summons were misconceived, the defendant's refusal to return the diamonds to the plaintiff at once was conditional, qualified or justifiable, pending its enquiry as to true ownership. There was a public duty or expectation for the police to act in an obviously responsible manner in returning the diamonds to the rightful owner, and it was reasonable for the defendant to clear up any doubt on the ownership of the diamonds before parting with them, and the period of time, up to and until the determination of the interpleader summons was reasonable. He relied on Vaughan v. Watt (1840) 6 M & W 492. The facts are as follows :

"The goods in question were pledged with the defendant, a pawnbroker, by a female of the name of Hubbard, in the name (as the defendant understood it) of Mary Warne, and the duplicate was so made out. On the next day he was sent to by that person, (whom he did not then know, but who afterwards proved to be the plaintiff's wife), to say that she had lost the duplicate, and she demanded and obtained from him a copy thereof, and also a form of a declaration of the loss of it, pursuant to the stat. 39 & 40 Geo. 3, c.99, s. 16(a) and 5 & 6 Will. 4, c.63, s. 12.(b) Some days afterwards, upon an allegation that this document also was lost, she obtained from the defendant another similar form. On the 6th of August, the plaintiff Vaughan produced the duplicate to the defendant, and demanded the goods, tendering the amount of the pledge and the interest. The defendant refused to give them up, on the ground of the declaration having been obtained from him. On the 7th, the plaintiff made an application to the police magistrate at Hatton Garden, for the purpose of compelling the restoration of the goods, and a summons was granted for the defendant's appearance on the following day, when he attended accordingly, but was compelled to go away before the case was called on. On the 9th, however, the parties again attended before the magistrate; and the plaintiff then stated that it was his wife by whom the goods had been pledged. The magistrate, however, after hearing the circumstances, declined to interfere. The plaintiff then brought this action, the writ being sued out on the 21st August. It was contended for the defendant, that there was no evidence of such an absolute refusal by him to deliver up the goods to the plaintiff, as constituted a conversion; and that he was justified in refusing to do so, by the circumstance of the declarations having been obtained by another party claming to be the owner. The learned Judge thought that the mere fact of these documents having been obtained was no defence as against the real owner of the goods, who might, in that case, never have it in his power to recover possession of them : and under his Lordship's direction, a verdict was found for the plaintiff, damages ￡10, leave being reserved to the defendant to move to enter a nonsuit. The jury were discharged as to the second issue."

74.Upon the defendant showing cause for a new trial, Parke B ruled that :

"The learned Judge was incorrect in telling the jury, that the mere refusal to deliver the goods to the real owner was a conversion. It was a question for the jury, whether the defendant meant to apply them to his own use, or assert the title of a third party to them, or whether he only meant to keep them in order to ascertain the title to them, and clear up the doubts he then entertained on the subject, and whether a reasonable time for doing so had not elapsed, without which it would not be a conversion."

75.Mr Kwok also relied on Pillott v. Wilkinson (1864) 3 H & C 345, per Williams J at 347 :

"Then looking at all the circumstances, was there any evidence for the jury of a conversion? We think the law is correctly laid down in Vaughan v. Watt (6 M & W 492, 497) by Parke B, who said : 'It ought therefore to have been left to the jury, whether the defendant had a bona fide doubt as to the title to the goods, and if so, whether a reasonable time for clearing up that doubt had elapsed.' Here, assuming the defendant entertained a bona fide doubt as to whether the goods belonged to the plaintiff, the question remains whether a reasonable time for clearing up that doubt had elapsed."

76.Mr Law did not dispute that Vaughan v. Watt is good law, but submitted that reasonable time had elapsed upon the rendering of the legal advice on 12 March 1999. In the event the legal advice were wrong, the defendant acted at its own peril.

77.According to section 10 of the Police Force Ordinance, Cap.232, the duties of the Police Force are :

"The duties of the police force shall be to take lawful measures for-

(a) preserving the public peace;

(b) preventing and detecting crimes and offences;

(c) preventing injury to life and property;

(d) apprehending all persons whom it is lawful to apprehend and for whose apprehension sufficient grounds exists;

(e) regulating processions and assemblies in public places or places of public resort;

(f) controlling traffic upon public thoroughfares and removing obstructions therefrom;

(g) preserving order in public places and places of public resort, at public meetings and in assemblies for public amusements, for which purpose any police officer on duty shall have free admission to all such places and meetings and assemblies while open to any of the public;

(ga) assisting coroners to discharge their duties and exercise their powers under the Coroners Ordinance (Cap 504);

(h) assisting in carrying out any revenue, excise, sanitary, conservancy, quarantine, immigration and alien registration laws;

(i) assisting in preserving order in the waters of Hong Kong and in enforcing port and maritime regulation therein;

(j) executing summonses, subpoenas, warrants, commitments and other process issued by the courts;

(k) exhibiting informations and conducting prosecutions;

(l) protecting unclaimed and lost property and finding the owners thereof;

(m) taking charge of and impounding stray animals;

(n) assisting in the protection of life and property at fires;

(o) protecting public property from loss or injury;

(p) attending the criminal courts and, if specially ordered, the civil courts and keeping order therein;

(q) escorting and guarding prisoners;

(r) executing such other duties as may by law be imposed on a police officer.

78.None of the statutory duties relate to investigating into civil disputes between private citizens. Mr Kwok could not point to any other duty under section 10(r). The only duty which Mr Kwok could point to seems to stem from the fear to be sued by the rightful owner if the goods were not returned to him. I find that the argument on conditional, qualified and justifiable refusal was in essence the same point as the entitlement to interpleader relief.

Findings

79.By reason of the aforesaid, I find that the plaintiff was entitled to immediate possession of the seized diamonds at the close of the criminal investigation. The defendant was entitled to reasonable time to seek legal advice on the disposal of the diamonds. At all material times, there was no threats nor intimation by any claimants that they would sue the defendant if the diamonds were not returned to them. There was no real foundation for the defendant to fear or expect to be sued by any of the claimants. The decision to take out interpleader proceedings was misconceived. Reasonable time for enquiry elapsed when the Civil Division of the DOJ gave the advice on 12 March 1999. The defendant should have returned the diamonds to the plaintiff when the plaintiff tendered its written demand on 24 April 1999. There was no justification for the defendant to hold any further enquiry to ascertain whether there were adverse claimants against the plaintiff. The retention of the diamonds ceased to be conditional or qualified upon the expiry of reasonable time for enquiry and any further detention was inconsistent with the right of the plaintiff. The defendant must act at its own peril against the owner of the diamonds if it chose to act on misconceived legal advice given.

80.I find that the defendant is guilty of conversion against the plaintiff.

Trespass to goods

81.According to Bullen & Leake & Jacob's Precedents of Pleadings (13th Edition, 1990) at p.955 :

"Nature of trespass to goods

Trespass to goods is a tort of far greater importance to legal historian than to present day practitioners. Unlike conversion, trespass to goods is primary a tort against the possession of the goods. With certain technical exception (see 'The right to sue', infra) an immediate right to possession without actual possession is insufficient to found an action."

82.As at the close of the criminal investigation, the plaintiff was not in actual possession of the diamonds but only entitled to an immediate right to possession, there was no cause of action on trespass to goods.

II. QUANTUM

83.According to Clerk & Lindsell (op. cit.) at para.14-99 :

"Damages for deprivation of goods

At common law the measure of damages to which a claimant is entitled for the deprivation for his goods is normally their market value, together with any special loss which flows naturally and directly from the wrong."

84.The plaintiff claims damages for conversion, from the expiry of reasonable time for the defendant to seek legal advice until the return of the diamonds. The plaintiff particularized the loss as interest on the declared value of the diamonds of $4.35 million. The plaintiff claimed that the diamonds would have been sold in the ordinary course of business to provide circulating capital for making further loans.

85.There was no dispute that the diamonds were real. There was also no dispute that the diamonds were forfeited by the plaintiff.

86.Mr Wong Fung Yuen, a director of the plaintiff stated that he planned to sell the diamonds by auction for paying off the loans of Lin. Mr Wong Fung Hing, a director of the plaintiff explained that the diamonds were not yet sold because there was an economic downturn, and as the plaintiff was a diamonds trader, there was no hurry to sell the diamonds. I am satisfied that the plaintiff intended to sell the diamonds when it became entitled to regain possession of them.

87.Mr Kwok submitted that the plaintiff had failed to prove the value of the diamonds, or indeed the plaintiff had suffered any loss of interest. There was no evidence of the market value of the diamond at the time of the conversion. Nor was there any evidence of the subsequent dealing of the diamonds. It is not known whether the diamonds were kept or sold, and if sold, at what price. It was submitted that under clause 5 of the loan agreements, the plaintiff was entitled to charge both principal and interest on the sale proceeds of the diamonds. There was no evidence that the plaintiff had suffered a loss of interest over and above the proceeds of sale of the diamonds.

88.Mr Law invited the Court to infer the market value form the declared value of the diamonds at the time of the loans.

89.Clause 4 of the loan agreements provides that :

"For the purposes of this Agreement and for any other purposes incidental thereof or related thereto, the value of the said Diamonds is the value as stated in the Declaration of Value set out in Schedule B hereof ('the said Declaration of Value') which forms part and partial of this Agreement. The value stated in the said Declaration of Value shall, for all purposes and intents, be final conclusive and binding between the Company and the Customer."

90.Mr Law submitted that the plaintiff was an established diamonds trader. As a matter of business sense, the plaintiff would have ensured that the diamonds were worth at least the declared value at the time of the making of the loans.

91.There was no evidence as to how the declared value was determined. Clause 4 only made the declared value binding on the parties and no more. I am not satisfied that declared value can be taken as the market value of the diamonds at the time of the conversion.

92.Alternatively, Mr Law submitted that as at 9 October 1998, Mr Lam Chik Che, the guarantor of Lin under the four loan agreements, was willing to pay $2 million to redeem the diamonds. Hence, the diamonds should be worth at least $2 million.

93.I do not accept a valuation on this basis. Mr Lam was the guarantor and his liability was, prima facie up to $4.35 million. His offer on the diamonds cannot be regarded as an arm's length transaction.

94.Mr Law also submitted that based on the invoices of the diamonds identified by the 1st to 4th claimants, it could be estimated that the packets containing the identified diamonds were worth at least $1.25 million.

95.I do not accept this piecemeal and crude method of valuation, not to mention that the 2nd and 4th claimants have made conflicting identification on the same diamonds, and that the plaintiff only suggested this method late in closing submissions.

96.Lastly, Mr Law submitted that even if the plaintiff failed to prove any substantial damages, it would be entitled to nominal damages. He relied on Hiort & anor v. The London & North Western Railway Company (1879) 2 Bing NC 310. There, the plaintiffs sought to recover ￡230 and interest for the value of the corn which the defendants have predelivered, and for which the plaintiffs have not been paid. Thesiger LJ stated the facts at p.197 :

"I have entertained some doubt whether this action can be maintained even for nominal damages. But upon consideration I think it can for this reason. Stripping the case of all accidental circumstances the facts are, that the defendants, being in possession of certain goods of the plaintiffs, as bailees, were bound to keep them until they obtained the authority of the plaintiffs, the bailors, to deliver them; notwithstanding that duty they delivered to certain persons, without any order from the plaintiffs: it is true that a delivery order would be received from the plaintiffs, and in point of fact it was received a few days afterwards. I am of opinion, however, that the previous unauthorised act, whether it is called a misdelivery or a predelivery, whether it constitutes technically speaking a conversion, or only a breach of the contract of bailment, of the duties which flow from the bailment, was a wrongful act in respect of which a right of action vested at once in the plaintiffs, and that right of action once vested was not divested by the plaintiffs afterwards giving the delivery order under which the defendants might have delivered the goods, and which, in truth, had been then already delivered. I think that the unauthorised act, whether it be a conversion, or whether it be a breach of contract, or a breach of duty did vest the right of action, and that there was sufficient damage in the eyes of the law to enable the plaintiffs to sue, for this reason, that they were for some days deprived of the control of their goods, to which they were entitled by their contract with the defendants, and the law presumes a damage in respect of that unlawful act."

His Lordship further held at p.200 :

"It appears to me, therefore, to follow from the ordinary rules which are applicable to actions of trover that the plaintiffs are entitled to recover damages for the deprivation of their control over the goods from the time of the unauthorised delivery; but inasmuch as it is admitted that during that period the plaintiff sustained no damage they can only recover nominal damages."

Bramwell LJ, who formed the majority with Thesiger LJ, held at p.195 that :

"I think, therefore, that the plaintiffs are entitled to nominal damages, because a conversion cannot be purged, and if a defendant is guilty of conversion he must pay some damages. A return of the goods undoubtedly might be shewn to reduce the damages in the case of a conversion, not only where the owner voluntarily received back the goods, but where he took them back against his will. In an action of trover or conversion the practice was for a defendant to apply to the Court for a stay of proceedings on the delivery up of the goods, and on payment of nominal damages and costs; but if the plaintiff refused to accept delivery, and insisted on proceeding with his action for substantial damages, he did so at his peril, and if he failed to get substantial damages he was made to pay the costs of action. It is clear, therefore, that on the return of the goods the plaintiff would recover, not their value, but the damages he had sustained by the wrongful act, which was called the conversion."

97.Mr Kwok did not argue with the principle in Hiort, but submitted that justice requires that it should not be followed. He referred to McGregor on Damages (16th Edition, 1997) para.421 :

"The best statement as to the meaning and incidence of nominal damages is given by Lord Halsbury LC in The Mediana [1900] AC 113, 116 where he said :

'"Nominal damages" is a technical phrase which means that you have negatived anything like real damage, but that you are affirming by your nominal damages that there is an infraction of a legal right which, though it gives you no right to any real damages at all, yet gives you a right to the verdict or judgment because your legal right has been infringed.'

Thus nominal damages may be awarded in all cases of breach of contract and in torts actionable per se. Furthermore, at least nominal damages should be awarded in such cases, but not all decisions appear to adhere strictly to this (Pagnan & Fratelli v. Corbisa Industrial Agropacuaria [1970] 1 WLR 1036 C.A.)."

98.In Pagnan & Fratelli, by a c.i.f. contract dated 20 May 1965, the buyers contracted to buy from the sellers a quantity of Brazilian maize. The sellers ran into difficulties and could not pay the freight and insurance premiums, money for which was advanced by the buyers. Shipment was seriously delayed. The sellers were unable to tender bills of lading within the period allowed notwithstanding extensions of time, the last expiring on 22 August 1965. The buyers did not treat the contract as at an end, but orally agreed with the seller on 21 September to accept and pay the contract price (as varied) for the cargo if they were satisfied with its conditional on arrival at the designated port. If not satisfied they were entitled to reject it. The ship arrived on 19 October, part of the cargo was damaged and the buyers rejected the whole. Meanwhile, the buyers obtained a decree of sequestration from an Italian court relating to part of the cargo as security for the sums advanced for freight and insurance premiums and in respect of their claim against the sellers for breach of contract. The sequestration order was lifted on the sellers repaying the freight and insurance premiums, but it remained in force on certain cargo to cover the claim for damages. On 13 November 1965, the buyers bought the whole cargo at a reduced price. Their claim for damages went to arbitration, and the sellers admitted the breach of contract. The appellate tribunal found the November purchase was part of a continuous course of dealing between the parties, and by such purchase the buyer had "diminished and mitigated" their loss and notwithstanding the sellers' breach they were not entitled to damages. Roskill J upheld that decision. On appeal by the buyers, the only question for the court was whether, on the facts found and the true construction of the contract, the tribunal, in assessing damages, was entitled to take into account the November purchase. Salmon LJ said at p.1316D :

"Damages for breach of contract are awarded for loss suffered. Here, the buyers suffered no loss. It is only by looking in isolation at the sellers' failure to deliver sound goods that the buyer's claim is even arguable. This failure cannot in my view properly be looked at in isolation because together with the purchase of November 13 which arose out of the situation in which the buyers found themselves, it formed one continuous dealing between the same parties in respect of the same goods. As a result of this dealing, looked at as a whole, the buyers, notwithstanding the sellers' breach, made a profit and no loss. To allow the buyers' claim would in my view be contrary alike to justice, common sense and authority."

99.Mr Kwok submitted that the plaintiff had adduced no evidence on whether a loss or profit was realized on the diamonds. To allow the plaintiff nominal damages would be contrary to justice and common sense.

100.I find that the dicta in Hiort is direct and clear : a conversion cannot be purged, and if a defendant is guilty of conversion he must pay some damages. A plaintiff is entitled to recover damages for deprivation of its control over the goods from the time of the wrongful detention until its return, but inasmuch that during that period the plaintiff suffers no damage, it can only recover nominal damages.

101.On the other hand, Pagnan & Fratelli was a case on breach of contract, and was decided on the facts that the parties' dealings did not terminate upon the failure to deliver the goods at the extended shipment date, but continued up to the subsequent purchase at reduced price by the buyers whereby there was no loss. I do not find that the reasoning in Pagnan & Fratelli is applicable to Hiort or indeed the present case. There is no injustice in the plaintiff not proving substantial damages and resorting to nominal damages only.

Conclusion

102.The plaintiff is entitled to nominal damages for conversion of $1 against the defendant.

Costs

103.At the request of counsel for the defendant, I shall hear parties as to costs.

Representation:

Mr Dennis Law, instructed by Messrs Tony Kan & Co., for the Plaintiff

Mr Tim Kwok of the Department of Justice, for the Defendant