Li Wai Ying Teresa and Another v. West Global Ltd. and Others

HCA001810/2000

HCA 1810/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1810 OF 2000

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Coram: Deputy High Court Judge S. Kwan in Court

Dates of Hearing: 19 to 21 February 2001

Date of Handing Down Judgment: 28 February 2001

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J U D G M E N T

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1. The 1st plaintiff, Madam Li Wai Ying Teresa, and the 2nd plaintiff, Mr. Lee Sin Tat Timothy, are husband and wife. They bring this action against the three defendants seeking injunctions to restrain them from disturbing the plaintiffs at their places of work and from intimidating, molesting, harassing, interfering or communicating with the plaintiffs. They also claim damages and exemplary damages for trespass, nuisance, assault and intimidation. The plaintiffs' claim arose out of the activities of certain debt-collecting agencies to recover a debt of about HK$3.5 million alleged to have been owed by Lee Shing Yue Construction Co. Ltd. ("LSY") to the 1st defendant, West Global Ltd.

2. The plaintiffs both worked for LSY at all times. They are also related to the managing director of LSY, Mr Lee Chun Cheong Thomas ("Thomas Lee") in that the 1st plaintiff is the elder sister of Thomas Lee. The 1st plaintiff was and is employed as the office manager and her place of work is at Room A2, 5th floor, Jing Hin Industrial Building, 5 Wang Kee Street, Kowloon Bay, Kowloon ("the LSY office"). The 2nd plaintiff was and is employed as the financial consultant and his place of work is at the site office of LSY at 1st floor, APB Centre, 9 Sung Ping Street, Hung Hom, Kowloon ("the site office").

3. LSY operated a construction business and it had a maintenance contract with the Architectural Services Department of the government being contract numbered TCG003/ASD/1998 ("contract TCG 003") to provide maintenance work to various public buildings in the east Kowloon area. The 1st defendant was initially a sub-sub-contractor and became a sub-contractor of LSY in July 1998. This sub-contract was terminated a month later. As a result, LSY brought proceedings against the 1st defendant in the High Court in October 1998 and the 1st defendant also brought proceedings against LSY. The two actions have been consolidated and litigation is still not resolved.

4. At all material times, the 2nd defendant, Mr. Lee Chick Sin, and the 3rd defendant, Mr Ng Kwok Nang, were the only directors and shareholders of the 1st defendant. The 3rd defendant had resigned as a director on 7 March 2000 and on the same date transferred his shares in the 1st defendant to a nominee company that was to hold the shares for the benefit of the 2nd defendant.

5. The plaintiffs have acted in person throughout in these proceedings. The defendants are represented by Mr Justin Ko at this trial.

6. The defendants claim to have no knowledge of any of the matters complained of by the plaintiffs over the period of November 1999 to March 2000 in relation to the activities of certain debt-collecting agencies and the plaintiffs are put to proof that these incidents did happen in the manner as alleged. The defendants' case is that although the 2nd defendant had appointed United Power Consultants Co. ("UPC") in October 1999 as the 1st defendant's agent to collect the debt of HK$3.5 million from LSY, it was an express term of the appointment that UPC should only use proper means in accordance with the laws of Hong Kong to recover the debt. Further, the 2nd defendant had orally terminated UPC's appointment at the end of January 2000 and this was confirmed in writing on 12 February 2000. The defence is that if any of the matters complained of were committed by UPC, such acts were outside the express or implied authority of its authority and that the defendants have not instigated, authorized or ratified any of these acts.

7. I turn to the evidence of the incidents according to the plaintiffs and their witnesses.

The incident on 16 November 1999

8. At about 2 pm that day, Thomas Lee had a telephone call from a Mr. Chan who sought an appointment with him about a construction project and Thomas Lee informed the caller that he would be in the LSY office that afternoon. Two men came at about 3 pm. One identified himself as Mr. Chan. They were shown into a room next to Thomas Lee's room. Before the introductions were made, the other man took a photograph of Thomas Lee who was taken aback and asked for an explanation. Mr. Chan said he was paid to collect a debt and had to show the photograph to his principal to prove that he had come. Thomas Lee asked which company was Mr. Chan's principal and wanted to see his authorization letter. Mr. Chan showed Thomas Lee an appointment letter signed by the 1st defendant dated 28 October 1999 appointing UPC its agent to collect a total debt of about HK$3.5 million from LSY and containing the express term that only lawful and proper means would be used. Thomas Lee immediately asked the 1st plaintiff, who was not in the room, to make a copy of this document.

9. Mr. Chan confirmed to Thomas Lee that he was engaged by the 1st defendant to collect HK$3.5 million. Thomas Lee told him that there was litigation with the 1st defendant, that the matter was handled by the solicitors of LSY, Messrs. Robin Bridge & John Liu ("LSY's solicitors"), and that LSY's solicitor should be approached instead. Thomas Lee also insisted that the photograph taken of him should be returned. After some argument with Mr. Chan during which Mr. Chan said words to the effect that he would do something if the debt were not paid, which caused Thomas Lee to feel uncomfortable, the negative of the film was removed from the camera and given to Thomas Lee. Before the men left, they told Thomas Lee he should know what kind of persons they were and that they would do the job they had to do. Mr Chan left Thomas Lee his mobile telephone number which the latter wrote on the copy of the authorization letter. They were in the LSY office for about half an hour.

10. I have no reason to doubt Thomas Lee and the 1st plaintiff's evidence on this and I find that the incident had taken place in the manner as they had related. It should be noted that the 1st plaintiff was not directly involved in the incident.

The incident on 1 December 1999

11. The 1st plaintiff was having lunch in the LSY office when she noticed something flashing outside the main door and she heard a loud noise. When she and a colleague went out to investigate, they saw a lot of paint had been splashed at the door and detected a strong smell of kerosene. No one was in the corridor. The 1st plaintiff telephoned Thomas Lee who was having lunch outside and he returned immediately. Thomas Lee told the 2nd plaintiff to give instructions to LSY's solicitors for the matter to be brought to the attention of the 1st defendant's solicitors. LSY's solicitors accordingly wrote to the 1st defendant's solicitors on the same day complaining of, inter alia, the incidents on 16 November and 1 December 1999. It was stated that whilst LSY had no evidence showing the 1st defendant's involvement in the incident on 1 December 1999, LSY had made a report to the police and the 1st defendant was asked to give an undertaking to instruct its agent to cease all similar acts forthwith. A draft writ of LSY seeking various injunctions against the 1st and 2nd defendants and UPC was enclosed.

12. Correspondence was exchanged between the solicitors for LSY and the 1st defendant between 3 and 6 December 1999. In the letter of LSY's solicitor on 3 December, it was mentioned that Mr Chan of UPC had attended the LSY office again that day saying that he wanted to "check the accounts" with Thomas Lee. It is not clear if Thomas Lee had seen him. The 1st defendant's solicitors reiterated that UPC was reminded by the 1st defendant to use only lawful and proper means to discharge its duty, in accordance with its express authorization. On 6 December 1999, LSY's solicitors wrote to the 1st defendant's solicitors stating that LSY would not conduct any settlement negotiation with debt collecting agents instructed by the 1st defendant.

13. Again, I find that the paint-splashing incident had happened in the way as described by the 1st plaintiff.

14. It was alleged in the Statement of Claim that by the letter of the defendants' solicitors dated 3 December 1999, the defendants had "supported the act of the debt collection agent as appropriate". I am unable to read the letter of the defendants' solicitors dated 3 December or the letter dated 6 December 1999 relied on by the 2nd plaintiff in his closing address in that light. Whether the defendants should have realized that improper means would probably be used in the subsequent incidents complained of having regard to the earlier complaint made in the correspondence between solicitors in early December 1999 is a matter that I will consider separately.

The incident on 18 February 2000

15. This was the first incident that had affected the 1st plaintiff directly. In the afternoon of that day, a colleague told the 1st plaintiff that two men had come into the LSY office looking for Thomas Lee. The colleague, who looked frightened, was followed immediately by the two men. The 1st plaintiff had not seen the men before. They asked the 1st plaintiff in a fierce manner if Thomas Lee was in the office. The 1st plaintiff asked them if they had an appointment and said Thomas Lee would not see them if none was made. They told her LSY had owed money. She asked them which company they were from and they said they were from Wing Shing Finance Company ("Wing Shing") and that LSY had owed HK$3.5 million. When the 1st plaintiff asked which client they were acting for, they did not reply. The 1st plaintiff was standing in front of the men and tried to block them from going further into the office. The men pushed her away in the arm. She was shocked, frightened and felt uncomfortable in the stomach. She has a tendency of having stomach pain whenever she is frightened or nervous. The incident lasted about ten minutes.

16. Thomas Lee heard the noise and came out of his room. He had not met the two men before. When he asked them what was the matter, one of them said to Thomas Lee that he owed someone HK$3.5 million and he had better repay. When Thomas Lee asked who was this creditor, they did not reply. The 1st plaintiff instructed a colleague to call the police. On hearing that, the men left.

17. The 1st plaintiff mentioned in her affirmation made on 21 February 2000 (which was made in support of her application for an interlocutory injunction and was ordered to stand as evidence in this trial) that half an hour after the men left, she took a telephone call in which a male caller said to her she must pay HK$3.5 million or else she would be liable for all consequences. She failed to mention this when she was asked by the defendants' counsel and later by me if anything else had happened that day other than the incident of the two men in the office. I am however satisfied that the telephone conversation had also taken place and that this had just slipped her memory when she was giving evidence. I find also that the incident on 18 February 2000 had happened in the manner as the 1st plaintiff and Thomas Lee had testified.

18. The 1st plaintiff left the office early that day as she felt unwell after the incident. She went to see a doctor for her stomach pain. She was recommended to have sick leave for one day. She reported the incident to the police on the next day and applied for an interlocutory injunction against the three defendants on 21 February 2000. On 25 February 2000, upon the defendants giving an undertaking substantially in the terms of the injunction sought until trial or further order, Yeung J made no order on the 1st plaintiff's summons.

19. An assault had been committed on the 1st plaintiff. There was a battery in that she was pushed in the arm. The threat on the telephone which would have put a reasonable person in fear or apprehension of physical violence, in view of what had happened in the LSY office a short while ago, also constituted an assault (see Barton v. Armstrong [1969] 2 NSWR 451 at 455, which was applied by Sakhrani J in Wong Wai Hing & Anr. v. Hui Wei Lee HCA No. 2901 of 1998, 29 March 2000, also a case concerning debt collectors).

20. The identity of those who had committed the unlawful acts on 18 February 2000 was unknown. Wing Shing did not have a business registration. Although these men had refused to say whose debt they were demanding payment of, I find as a matter of inference that they were seeking to collect the debt allegedly owed by LSY to the 1st defendant. Whether any of the defendants had authorized or ratified these acts is a question that I will consider subsequently.

The incident on 26 February 2000

21. On that day, a staff of LSY Cheung Shui King took a telephone call in which the caller asked for Thomas Lee. When she replied that Mr. Lee was not in, the caller asked if she was Miss Lee (i.e. the 1st plaintiff). When she said she was not, the caller asked her to tell that person (this was more likely to be a reference to Thomas Lee) to repay the money quickly.

22. The 1st plaintiff wrote to the defendants' solicitors on 28 February 2000 complaining that the incident on 26 February was in breach of the defendants' undertaking to the court. The defendants' solicitors replied on the same day denying that the defendants had anything to do with the incident.

23. I find that the incident had happened in the manner as described by Cheung Shui King. I am not prepared to find that the demand for payment was in respect of the debt allegedly owed to the 1st defendant. Further, I do not think any tort had been committed against the 1st plaintiff as no threat was made by the caller on this occasion that any unlawful act would be committed.

The incident on 28 February 2000

24. Two men went to the site office that day to look for the 2nd plaintiff. When the 2nd plaintiff told them he was the person they were looking for and just as he had turned around, he was assaulted from behind. The 2nd plaintiff was hit on his head causing him to feel dizzy. The two men did not say which company they were from before they attacked him. The 2nd plaintiff went to the Queen Elizabeth Hospital for treatment. According to the medical report, he had the following injuries when he was examined on 28 February 2000 at 2:50 pm: a 6 cm diameter abrasion on the left face and several small abrasions on the face and head about 2cm in diameter. X-ray of the skull showed no fracture. The clinical diagnosis was minor head injury. He was treated and discharged with pain relief medicine. Sick leave was recommended for one day. He stayed in hospital for observation on 3 and 4 March 2000. A report of the assault was made to the police.

25. At 2:28 pm that day, a man telephoned the LSY office and the call was taken by the receptionist, Miss Ma Hau Kwan. The caller identified himself as Mr. Wong and he asked for Thomas Lee. When Miss Ma said Thomas Lee was not in, the caller asked her to relay the message that he (i.e. Thomas Lee) would be the next one.

26. I find that the incidents that day had taken place in the way as related by the 2nd plaintiff and Miss Ma. The 2nd plaintiff gave evidence that his only or only significant involvement in the business of LSY was contract TCG 003, the subject matter of the 1st defendant's dispute with LSY and that was why he was working in the site office not the LSY office. He was on good terms with other sub-contractors who had disputes with LSY over TCG 003. As for the claims of the workers of sub-contractors against LSY in the Labour Tribunal, the claims had been resolved or settled with the workers. He had no personal indebtedness at the time. The incident on 28 February 2000 should also be looked at in connection with the telephone calls on 8 March 2000 mentioned below. I find as a matter of inference that the assault on the 2nd plaintiff was related to the debt allegedly owed to the 1st defendant although no debt was mentioned in the incident. Whether the assault was authorized or ratified by any of the defendants is a matter that I will deal with separately.

Subsequent telephone calls

27. Miss Ma was instructed by the 1st plaintiff to make a note of subsequent calls to the LSY office in which the caller asked for Thomas Lee and the caller did not appear to be from a company that had been dealing with LSY regularly.

28. On 29 February 2000 at 3:10 pm, 3:45 pm and 3:50 pm, there were such calls for Thomas Lee.

29. On 1 March 2000 at 3:10 pm, a caller who identified himself as Mr. Chan asked for Thomas Lee and left a contact number of 94496061 for Thomas Lee to return call. This was not the number provided by UPC to Thomas Lee on 16 November 1999. This Mr. Chan called again at the following times: on 2 March 2000 at 2:32 pm, 3:46 pm, 3:53 pm, 5:41 pm; on 6 March 2000 twice in the afternoon; on 8 March 2000 at 12:14 pm and 12:31 pm.

30. At the last call on 8 March at 12:31 pm, when Miss Ma told Mr. Chan that Thomas Lee was not in the office, Mr. Chan told her to inform the 2nd plaintiff to make a clear calculation of the amount owed by Thomas Lee.

31. On 8 March, Thomas Lee called the number given to Miss Ma earlier. The man who answered did not identify himself. He told Thomas Lee that HK$3.5 million was owed to his client and asked what Thomas Lee had intended to do. Thomas Lee said he had checked and he did not owe the sum as alleged. The man replied that last time Thomas Lee had said he would check and this time he said he did not owe anything. Thomas Lee told him the matter had been passed to his solicitors to handle and he would not be involved with it.

32. After 8 March 2000, there were no calls of this kind to the LSY office and no further disturbance or interference was caused to the plaintiffs.

33. I find that the subsequent calls were made as described by the plaintiffs' witnesses. I find that these calls were related to the debt allegedly owed by LSY to the 1st defendant. No tort was committed against the plaintiffs in respect of the subsequent calls. I reject the 2nd plaintiff's submission that the message given to Miss Ma that he should do a clear calculation of the sum owed by Thomas Lee constituted an assault as I am not satisfied that a reasonable person would be put in fear of physical violence by the message.

34. On 9 March 2000, the 1st plaintiff took out a summons to join the 2nd plaintiff in this action in view of the assault incident on 28 February 2000 and sought directions from the court concerning the breach of undertaking by the defendants given to the court on 25 February 2000 alleging that the incidents on 28 February and the subsequent calls were connected with the defendants. On 13 March 2000, leave was given for the 2nd plaintiff to be joined and the other part of the plaintiffs' application was adjourned for argument with directions for evidence to be filed. On 18 April 2000, the court ordered that there was to be a speedy trial and gave directions for that purpose. No other order was made on the plaintiffs' application.

The torts committed

35. To recapitulate, I find that two acts of assault were committed against the 1st plaintiff on 18 February 2000 and another act of assault was committed against the 2nd plaintiff on 28 February 2000 and that these acts of assault were related to the debt allegedly owed by LSY to the 1st defendant.

36. I turn to consider the evidence given by the 2nd and 3rd defendants.

The 2nd defendant's evidence

37. The 2nd defendant has known the 3rd defendant for ten odd years and they started to do business together using the 1st defendant as a vehicle in about 1996 or 1997. The 2nd defendant was responsible for the project works, the purchase of materials, the engagement of workers and the daily administration of the company including debt collection. The 3rd defendant did not have an active role in the business. He would be consulted by the 2nd defendant on important matters.

38. The 2nd defendant was responsible for getting the deal in which the 1st defendant became the sub-contractor of LSY. He was also responsible for handling the subsequent dispute with LSY. Initially, he engaged solicitors to pursue legal proceedings against LSY. A few months later, he met a painting worker by chance and in the course of their conversation told this worker that he had been doing work for LSY for several months and was unable to get payment. The worker then introduced the 2nd defendant to a debt collection agency. The 2nd defendant does not know the full name of this worker and only knows he is called "little master". He did not even recognize the worker at first as that worker had last worked for the 2nd defendant about five or six years ago and during that time the 2nd defendant had several hundreds of workers under him. The 2nd defendant left the worker his telephone number, but did not ask for the worker's telephone number.

39. Through that worker, the 2nd defendant came to know a Mr Chan of UPC who was a debt collector and they had a discussion in a restaurant. Mr Chan asked for 2% of the debt to be collected as initial payment. This would be HK$70,000.00 in respect of the debt of LSY. When the 2nd defendant appeared unwilling to engage UPC on those terms, Mr. Chan reduced the initial payment to HK$50,000.00. The 2nd defendant agreed to this and to pay UPC 30% of the debt if collected. This would be about HK$1 million for the debt of LSY. It was also agreed that the appointment would be for a period of three months. These terms as discussed and agreed were not recorded in writing. The 2nd defendant signed an appointment letter appointing UPC the 1st defendant's agent to recover the debt of HK$3.5 million from LSY. Under the "remarks" heading which was to contain the terms upon which the appointment was made, it was written that UPC was to use all methods in accordance with the laws of Hong Kong and proper means to recover the said debt. The 2nd defendant said he had specifically raised this with Mr Chan as he was concerned that only lawful and proper means should be used by the debt collector. Mr Chan gave him a verbal assurance and also wrote down the term as stated on the appointment letter at the request of the 2nd defendant. Mr. Chan gave the 2nd defendant his contact telephone number. The appointment letter was the document provided by Mr. Chan to Thomas Lee on 16 November 1999.

40. This was the first time the 2nd defendant had used a debt collector. He said he had decided to engage UPC notwithstanding he had engaged solicitors to act for the 1st defendant because of the time involved in pursuing legal proceedings and the uncertainties of the outcome of litigation. He had also heard that other contractors of LSY had used debt collectors to get payment from LSY.

41. About a week later, the 2nd defendant heard from Mr Chan who informed him that Thomas Lee had agreed to meet Mr. Chan the week after to check accounts. About two days later, the 2nd defendant telephoned Mr Chan to ask for progress as he was afraid that Mr. Chan might have collected the money and failed to account to him. He was told by Mr Chan that Thomas Lee refused to have a meeting.

42. About a week or two later, the 2nd defendant learned from his solicitors that LSY's solicitors had written to complain of the taking of Thomas Lee's photograph without consent by UPC and of the paint-splashing incident. The 2nd defendant questioned Mr Chan about these matters and Mr Chan said in answer that he did not do the acts complained of.

43. At the end of January 2000, as UPC had failed to collect the debt within three months of its appointment and because of the allegations of LSY's solicitors of improper activities by some debt collector, the 2nd defendant decided to terminate the appointment of UPC. He telephoned Mr Chan and told him to stop collecting the debt for the 1st defendant. This verbal termination was followed by a written confirmation signed by Mr Chan on behalf of UPC and by the 2nd defendant on behalf of the 1st defendant dated 12 February 2000, which was prepared by a staff on the 2nd defendant's instructions after the Chinese New Year. Mr Chan told the 2nd defendant that he would not refund the initial payment of HK$50,000.00 and this was accepted by the 2nd defendant.

44. On 25 February 2000, the 2nd defendant gave a statement to the police who were then investigating the report made by the 1st plaintiff. It would appear that Mr Chan could no longer be contacted by the time the police carried out the investigation.

45. The 2nd plaintiff in his closing address made strong criticisms of the 2nd defendant's credibility and alleged that the defendants would do whatever it took to obtain a benefit even though such an act might have been unlawful. It was submitted that the circumstances in which UPC was engaged should have made the 2nd defendant wary that UPC might not act within the law notwithstanding the express term in the appointment letter. The 2nd defendant knew nothing about UPC. He did not have its address. Mr Chan did not give him any name card. All that he had from UPC was the printed form of the appointment letter bearing the name of UPC and a company logo without giving its address or telephone number. He did not do a business registration search. If he had done so, he would have discovered that UPC did not even have a business registration. His only means of contact with UPC was the telephone number which Mr Chan gave him. It was argued that as the 2nd defendant has said that he feared UPC might have collected the debt without accounting to him, he should not have trusted UPC that it would only use lawful means to collect the debt.

46. In assessing the credibility of the 2nd defendant in this aspect, I should look at it in his position and from his perspective, taking into account his personal background. I have noted his occupation and his use of language in the course of his evidence, and my impression was confirmed when he told the court he had only completed primary education. I find the 2nd defendant to be a credible witness. He did not strike me as a sophisticated person who would give careful thought to all possible consequences before he was to act in a certain way. He could not be expected to have regard to the matters submitted by the 2nd plaintiff that might cause one to have doubts if UPC would only use lawful means to carry out its engagement. I find that the 2nd defendant had sought an assurance from Mr Chan that only lawful means would be used in the debt collection and that he had truly believed that UPC would act in accordance with the express term in the appointment letter. I reject the 2nd plaintiff's submission that the express term was inserted to serve as a disclaimer of liability for the defendants. I do not think the 2nd defendant would have thought of that. I should point out that in marked contrast to the 2nd defendant, the 2nd plaintiff has received university education according to his police statement and although I do not know his training and qualifications, the 2nd plaintiff has conducted his cross-examination in Chinese and made submissions on the facts and the law in fluent English with citation of legal authorities very much like a trained advocate.

47. As for the 2nd plaintiff's attack on the credibility of the 2nd defendant that he had not terminated UPC's appointment because the 2nd plaintiff did not mention the date of the verbal termination in his first affirmation or exhibit to it a copy of the termination letter dated 12 February 2000, I accept the 2nd defendant's explanation for these omissions and I find that he had terminated the appointment of UPC in the way he testified. It was also argued that the 2nd defendant could and should have terminated UPC's appointment earlier in view of the complaints of LSY's solicitors in early December 1999. I was asked to note that the verbal termination was only at the end of January 2000 on the 2nd defendant's evidence. Again, I accept the 2nd defendant's explanation as to why he had not acted earlier. I further find that the 2nd defendant had no reason to think that any further debt-collecting activity would be carried out on behalf of the 1st defendant after he had terminated UPC's appointment at the end of January 2000.

48. I reject the 2nd plaintiff's submissions that it would be proper to infer from the defendants' failure to pay the wages of their workers which brought about proceedings in the Labour Tribunal that the defendants were unscrupulous and would violate the law to suit their interests. I accept the 2nd defendant's evidence why he had acted in the way he did and it was not because he has scant regard for the law.

49. Finally, I accept the 2nd defendant's evidence that apart from UPC, he had not engaged any other debt collector and that he had no knowledge of Wing Shing, the firm that had been to the LSY office on 18 February 2000.

The 3rd defendant's evidence

50. The 3rd defendant gave evidence of his limited role in the business operations of the 1st defendant. I accept his evidence that because of his other business interests, he had left the day to day operations to the 2nd defendant. I find that he had no involvement in the appointment of UPC or in any activity to collect the debt allegedly owed by LSY to the 1st defendant, notwithstanding his substantial investment in the 1st defendant. I also accept that he had resigned as a director and transferred his shares to a nominee of the 2nd defendant because of the litigation with LSY, the claims of the workers in the Labour Tribunal, the allegations of the plaintiffs of improper debt-collecting activities and his desire not to be involved in "unnecessary" disputes.

Were the torts authorized or ratified by the defendants

51. A similar question was considered by Sakhrani J in Wong Wai Hing, supra. at pages 30 to 35 of the judgment. Reference was made to the following statements of the law dealing with implied authority and the liability of a principal for torts committed by an agent and I set them out below:

"The implied authority of an agent extends to all subordinate acts which are necessary or ordinarily incidental to the exercise of his express authority. It does not, however, extend to acts which are outside the ordinary course of his business, or which are neither necessary nor incidental to his express authority." (Vol. 1(2) Halsbury's Laws of England, 4th ed., para. 52)

"A principal is liable for loss or injury caused by the tort of his agent, whether or not his servant in the following cases:-

(a) if the wrongful act was specifically instigated authorized or ratified by the principal,...." (Bowstead & Reynolds on Agency, 16th ed., para. 8-174)

52. Sakhrani J found on the facts of the case that the defendant had given instructions to the debt collector that only lawful means should be used and such instructions were reflected in the conditions of the letter of appointment. He held that the defendant was not liable for the wrongful and unlawful acts of the debt collector as such acts were outside the scope of the express authority as well as the implied authority because they were not necessary or incidental to the express authority, nor had the defendant specifically instigated, authorized or ratified the wrongful acts.

53. On the facts as I have found in the present case, I am unable to reach any other conclusion applying the law in the same way as Sakhrani J had done. The 2nd plaintiff has submitted that Wong Wai Hing is distinguishable because the defendants in the present case were aware from the letter of LSY's solicitors in December 1999 that UPC did not use lawful means and yet no immediate action was taken by the defendants so the defendants must be taken to have ratified the torts committed against the 1st and 2nd plaintiffs in February 2000 even if they had not authorized the wrongful acts.

54. The two acts of assault committed against the 1st plaintiff on 18 February 2000 were done by persons allegedly sent by Wing Shing, not UPC. It did not matter whether the men were from Wing Shing or UPC as I have found that the debt they were seeking to collect was the debt allegedly owed to the 1st defendant. UPC was not prohibited by the 1st defendant from engaging other agent or agents to carry out the debt collection, so long as it had acted within the express term to use only lawful means. Likewise, although the identity of the men who assaulted the 2nd plaintiff on 28 February 2000 was unknown, this would have made no difference as I have found that the assault was related to the debt allegedly owed to the 1st defendant. What really matters is whether these torts were within the express or implied authority of UPC or any sub-agent of UPC or whether the defendants had specifically instigated, authorized or ratified the torts, having regard to the express term and the fact that the appointment was already terminated by the end of January 2000.

55. On the facts as I have found, there can be no question that the torts committed were outside the express or implied authority of those who purported to act on behalf of the 1st defendant on 18 and 28 February 2000. I have accepted the 2nd defendant's testimony and further found that the 1st defendant had terminated the appointment of UPC by the end of January 2000 and this was confirmed in writing on 12 February 2000, before the first act of assault was committed against the 1st plaintiff. The defendants had no prior knowledge and no reason to suppose that debt-collecting activities would be carried on purportedly on its behalf notwithstanding that the appointment had been terminated. They would have no control over the persons who had purported to act on the 1st defendant's behalf as the 2nd defendant was unable to contact Mr Chan by then. There was no ratification by any of the defendants of the torts committed against the plaintiffs. I am not prepared to draw any adverse inference, as the 2nd plaintiff has asked me to do, that the defendants were still very much in control just by virtue of the fact that the last incident complained of was on 8 March 2000 and when the plaintiffs took out a summons on 9 March 2000 alleging that the defendants had breached their undertaking to the court, there was no further occurrence of any similar incident.

56. For the above reasons, I find that none of the defendants are liable to the plaintiffs. The 2nd plaintiff has submitted that he would be very disappointed if the law does not give him a remedy in this case, having referred me to the consultation paper on regulation of debt collection practices issued by the Law Reform Commission of Hong Kong in July 2000. I can only apply the law as it now stands to the facts as I have found. I dismiss the plaintiffs' claims against the defendants. There is no reason why costs should not follow the event. I make an order nisi that the plaintiffs are to bear the defendants' costs of this action, to be taxed if not agreed.

Representation:

The 1st plaintiff, Li Wai Ying Teresa, acting in person.

The 2nd plaintiff, Lee Sin Tat Timothy, acting in person.

Mr Justin Ko instructed by Messrs Philip Tsui & To, for the Defendants.