Boeing Arts & Crafts Co Ltd v. Ying Ming Printing Paper Box Factory (A Firm)

HCA005344/1980

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

ACTION NO. 5344 OF 1980

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Coram: Mr. Commissioner Gittins, Q.C. in Chambers

Date of Judgment: 27th October, 1980

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DECISION

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1. On 19th September 1980 an injunction was ordered against the defendant in the usual form restraining it "from building or causing to be built a partition wall" within specified premises.

2. At the hearing on the return date it was agreed by the parties that there were issues of fact which could only be determined at the trial, so that the sole question for decision was whether the injunction should be continued or be discharged pending the trial of the action.

3. The defendant is a tenant of the plaintiff under a tenancy agreement for 5 years commencing on 16th May 1979 and carried on a paper box factory in the premises let. The plaintiff occupied the rest of the flat for his non-industrial business until May 1980 when he let part of his remaining portion to Shun Lee Printing Co. which also operated a factory. Both the defendant and Shun Lee were informed by the Labour Department in August 1980 that being factories they were required to be registered under S.9(1) of the Factories and Industrial Undertakings Ordinance, Cap. 59 and that a prerequisite for registration was for each factory to be completely segregated from the adjacent factory by fire resistant walls and to have a fire exit.

4. On 8th September 1980 the defendant gave notice to the plaintiff of its intention to exercise its purported right to erect a brick wall and commenced to do so. This brick wall had the effect of restricting the sole fire exit in the flat to the defendant's portion and thereby Shun Lee would not be able to comply with the requirements for registration.

5. The plaintiff's affidavit filed on 11th October 1980 disclosed for the first time that it had agreed to buy a half share in Shun Lee. Apart from depriving Shun Lee of registration, the discharge of the injunction would put the personnel of Shun Lee and of the plaintiff at risk in the event of fire through being denied access to the fire exit.

6. For the plaintiff reliance was placed on Clause 2(1) of the tenancy agreement wherein the defendant covenanted that it would not make any alterations or additions to the leased premises without the previous consent in writing of the plaintiff. Paragraph 29/1/11C of the 1979 Supreme Court Practice was referred to -

"But where there is a plain and uncontested breach of a clear covenant, the defendant should be compelled by interlocutory injunction to perform his obligation without regard to the balance of convenience."

7. Here there is a clear covenant but its breach is contested, the defendant alleging that the plaintiff had orally agreed to it erecting a brick wall.

8. The substantive argument for the discharge of the injunction is that the plaintiff in applying ex parte was guilty of non disclosure. 29/1/19 of the Supreme Court Practice states -

"All the facts must be laid before the Court and nothing suppressed, otherwise the order may be set aside without regard to the merits."

9. The ex parte injunction was ordered on the strength of the affirmation dated 19/9/80 of LIU Chung-yung. In paragraph 14 he stated that only 1 factory licence may be granted to 1 flat so that if the defendant obtains a licence he would not be able to get a factory licence in respect of his premises.

10. It is incorrect in law to say that only one licence may be granted to one flat, but the practical result is correct in that the defendant can only get its licence by enclosing the fire exit within his premises and no other factory in the flat would qualify for a licence.

11. It was also submitted by the defendant that the real reason for the plaintiff's objection was that Shun Lee would be deprived of qualifying for a factory licence, and that the Commissioner was misled by this non disclosure.

12. I am of the opinion that the non disclosures or misstatements complained of are not material, that the facts now disclosed do not present a picture which is different from that before the learned Commissioner from a practical point of view.

13. On the other hand I do not give weight to the point made on behalf of the plaintiff that the defendant is in breach of covenant since waiver may be established at the trial.

14. On the facts before me it is clear that if the defendant is permitted to complete the segregation of his premises the other occupants of the flat will be denied access to the fire exit in the event of fire or other emergency. I am of the opinion that this should not be permitted until the rights of the parties are determined at the trial.

15. I order that the ex parte injunction ordered on 19th September 1980 do continue until the determination of the action or until further order.

16. Costs in the cause.

17. Certificate for counsel.

Representation:

Sammy Lee (Yung, Yu, Yuen & Co.) for Plaintiff

Bunting (H.M. So & Co.) for Defendant