Lee Ing Chee v. Choo Kim San

HCA002459/1976

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

ACTION NO. 2459 OF 1976

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Coram: Zimmern J. in Chambers

Date of Judgment: 9th August 1977

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DECISION

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1. I have before me five injunctions granted by order of Li J. exparte on 15th July 1977 returnable on 27th July 1977 or until further order. On return date the matter was by agreement adjourned and the following respondents appeared before me namely Messrs. David Ng Pak Shing, Melville Edward Ives and Ho Chapman, Fermay Company Ltd. and I.P.C. Nominees Ltd. I shall refer to the five injunctions by their numbers in little Roman figures as they appear on the face of the order. The respondents Triumphant Nominees Limited and Asiatic Nominees Limited did not appear and I continue the injunctions (iv) and (v) till the hearing of the matter or further order. Costs in the Cause.

2. Mr. Swaine leading counsel for all the respondents agreed with the continuation of injunctions (i), (ii) and (iii) till after the hearing date fixed for sometime in October 1977 subject to adequate sums of money being paid into court to fortify the undertakings as to damages. Mr. Ching leading counsel for the plaintiff argues that on the merits I should continue the injunctions until after the hearing of the matter or further order without ordering fortification of the undertakings as to damages. This leaves three courses open to me. Discharge the injunctions or any of them. Continue the injunctions with or without fortifications.

3. I turn to the first injunction (i). Here Ng, Ives and Ho are restrained from dealing in ascertained shares of and in San Imperial Corporation on the plaintiff's own case registered in the register of the said corporation in the names of four companies all incorporated in Hong Kong and respondents herein. So long as the injunctions herein against the companies restraining them from dealing with their shares in San Imperial Corporation Limited continue, these three respondents by their presence in this court would know that the term "So and So Company Limited whether by itself, its servants or agents or howsoever" bind them irrespective of whether they are directors or officers of the companies or not. Any breach by them of any of the injunctions would be just as much contempt of court as aiders and abettors as if named in the injunction themselves. This injunction is quite unnecessary and I shall not order its discontinuation which effectively discharges it. Costs are reserved for the trial judge and I also leave it to him to decide on matter of the undertaking as to damages.

4. As to injunctions (ii) and (iii) the companies restrained are Fermay Company Limited in respect of 15,000,000 shares and I.P.C. Nominees Limited in respect 7,631,000 all in San Imperial Corporation making a total of 22,631,000 shares. The market price today is about 50 cents per share so the market value of the shares tied up since 15th July 1977 is about $11,000,000. This matter would not be resolved till about October/November or perhaps even later this year. All these shares have been charged by the plaintiff for which there is an order nisi and the injunctions are merely in aid of the charging orders. Mr. Swaine taunted Mr. Ching by asking if you have only a judgment for roughly half that sum of money why do you attach all 22,631,000 shares. The motive is not a bit difficult to fathom but as it is extraneous to the matter before me I shall not expound further. Mr. Ching however says he charged the whole 22,631,000 shares because of the wide fluctuations in the price of this share. This is a very bold statement to advance when I am dealing with undertakings as to damages. There is no evidence that the plaintiff is a man of means and in fact the inference can be drawn even from his own evidence that he is not. The point has been made by Mr. Swaine that he is a nominee plaintiff for a foreign corporation named Malaysia Borneo Finance Corporation (M) Berhad whose balance sheet as on 30th September 1976 has been exhibited. The history of how and the reasons for those two companies acquiring these San Imperial shares are different. For the purpose of this matter I can treat these two companies alike for I have come to the conclusion that on equitable principles the undertakings as to damages ought to be fortified or else discharged. The plaintiff as I said has already a charge on the shares for a monetary claim of half its market value. He is not satisfied. He also wants injunctions to restrain the respondents from dealing in the shares in every conceivable way. There is a real danger that the respondents might suffer substantial damage should the issues be found in their favour at the hearing. I order that the injunctions to be continue conditional upon payment by or on behalf of the plaintiff in respect of each of the two injunctions a sum the equivalent of five cents per share on or before noon 22nd August 1977. With liberty to apply to extend the time allowed otherwise the injunctions stand discharged. Costs on the arguments on fortification to be the respondents represented by Mr. Swaine in any event. Certificate for two counsel.

5. Mutatis mutandis what I have said applies equally to the matter in Miscellaneous Proceedings No. 155 of 1977.

6. After reading the above both Mr. Swaine and Mr. Ching said I had misunderstood their agreement which was that irrespective of fortification Mr. Swaine had agreed to the continuation of all three injunctions. No formal agreement for a consent order was placed before me. I was supposed to have inferred their agreement from the submissions of counsel. I noted Mr. Swaine as having said on one occasion "The injunctions only continue if undertaking as to damages be suitably fortified" and on another "I shall be agreeing to continuing the injunctions subject to fortification" Mr. Swaine now agrees to continuation of injunction (i). Be that as it may but then he asks for fortification. This I refuse because in my view this injunction is unnecessary for reasons I have given above. The parties then come back with a consent order for the continuation of injunction (i) subject to the payments into court ordered in injunctions (ii) and (iii) otherwise ipso facto discharged.

7. So be it.

Representation:

Charles Ching, Q.C. & Winston Poon (Deacons) for plaintiff.

John Swaine, Q.C. & Robert Tang (Peter Mo & Co. & Philip K.H. Wong & Co.) for Fermay Co. Ltd., I.P.C. Nominees Ltd., Messrs. Melville Edward Ives, David Ng Pak Shing and Ho Chapman.