The Incorporaied Owners of Caineway Mansion v. Caine's Kitchen Ltd and Others

HCA012840/1983

BETWEEN

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Coram: Hon. Liu J.

Dates of Hearing: 17 - 19, 22 - 26 and 29 - 30 October 1984

Date of Delivery of Judgment: 12 November 1984

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JUDGMENT

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1. Two agreed issues were framed for the determination of the court, and for the purposes of these issues the plaintiff was made plaintiff and the defendants be defendants. By consent, the defendants shall make no claim under any of the express or implied undertakings as to damages except in these framed issues and shall not seek to enforce or take advantage of any of these undertakings as to damages except when the plaintiff fails in the first of the framed issues. The two framed issues are as follows:

(1)	Whether or not the plaintiff was justified in law and on facts to apply for and maintain the injunction granted in the discontinued action against the defendants, and
(2)	if the court should find in favour of the defendants on the above framed issue and not otherwise, what damages the defendants have sustained in terms of the plaintiff's undertaking or implied cross-undertaking as to damages.

2. The chronology may be stated quite briefly: On the 20th October 1983, a report was made to the police for the plaintiff on certain works then being carried out to the rear common wall of Shop Space premises at 130 Caine Road, ground floor by a firm of decorators. The 1st defendant company was the tenant of the said premises, known as Shop Space No. 1. From "D12", the Decoration Contract signed between the 1st defendant company and the 2nd defendant company, it can be seen that the 3rd defendant was the Managing Director of the 2nd defendant company. A policeman arrived after 3:00 p.m., and by the time he had made enquiry, it was after 5:00 p.m. well past the normal working hours and work stopped. Whether the work resumed at about 9 in the morning of the 21st October is a matter in dispute, but another report of like nature was made to the Robinson Road Report Centre in the morning of the 21st October. Sometime around 11 in the morning, Station Sergeant Ng was at the scene and spoke to the 3rd defendant, Mr. Lau. Work to the common wall in the rear of the Shop Space premises was suspended. Shortly after noon, an injunction order taken out by the plaintiff was served on the defendants. The injunction granted on the usual undertaking as to damages enjoined each of the defendants to refrain from "knocking down or in any other way damaging the wall" and from "continuing to connect any pipes and/or wires to the cooling tower". A new cooling tower had by then been erected by the decoration firm for the 1st defendant company on top of the covered yard or light-well behind the Shop Space premises. 10 days later, on the 31st October 1983, the parties returned to a judge, but the injunction was allowed to be continued and the summons adjourned to a date to be fixed pending the filing of affidavits by the defendants and further affidavit in reply by the plaintiff. As for the hearing of the plaintiff's summons on the 12th December 1983, although there is some disagreement as to precisely what transpired, I am entitled to refer to the endorsement of the learned judge which reads:

"Upon the defendants' undertaking to replace a new window and to make good all decorations and the brick wall separating the light-well behind Shop Space No. 1 at 130 Caine Road, Caineway Mansion and the meter-room on the ground floor, Caineway Mansion 128-132 Caine Road, the ex-parte injunction be discharged. Costs of ex-parte injunction and costs of today reserved. Leave to plaintiff to file a reply in 7 days. Case fixed for hearing on the 25th and 26th January 1984 at 10:00 a.m."

3. On the 25th January 1984, before a different judge the plaintiff discontinued its action with leave, but directions were given on the Counterclaim. An appeal was lodged against an order for costs made by the learned judge. On the 30th March 1984, the Court of Appeal set aside the order for costs and ordered costs to be reserved. In the main judgment of the Court of Appeal, the action was described as "a procedural mass". These proceedings came before me on the 17th October 1984, and it was not until the 19th October that the parties were persuaded to and did agree to a consent order for the aforesaid two issues to be framed.

4. After the discharge of injunction order on the 12th December 1983, the decoration works including the installation of the cooling tower were completed some ten days later on the 22nd December.

5. Mr. Lau, the 3rd defendant, had for a considerable time been known to the caretaker of Caineway Mansion, one Mr. Poon. The caretaker told the court that the key to Shop Space No. 1 which had been left with him for several months was collected by the owner, Mrs. Ng in October 1983. One evening thereafter, he was surprised to see lights turned on in the Shope Space premises which had not been installed with an electric meter. Upon investigation, he found 5/6 people making sketches and inspecting the premises. Among this group of people, he immediately recognised Mr. Lau and he told the court that although he had not met Miss Leung before, she was present. Thereupon, according to Mr. Poon, the caretaker, he remonstrated with Mr. Lau for having helped himself to the electricity supply and advised him to apply to the Management Committee for permission. A few days later, Mr. Lau came to the management office with a letter signed by the 1st defendant company for "borrowing electricity". That letter is "D11", an undated letter signed by the 1st defendant limited company. The caretaker also told the court that when he observed that it was incorrect for the decoration firm and not the tenant company to negotiate for the use of electricity, in reply Mr. Lau claimed to have a share in the business of the 1st defendant company. Further, Mr. Lau allegedly disclosed that the business was to be a restaurant, and upon hearing that the caretaker gratuitously offered the advice that no restaurant licence would be granted without a side door. In response, so claimed the caretaker, Mr. Lau said that he had means to apply for the opening of such an exit. The caretaker claimed that he reported the unauthorised use of electricity and the conversation with Mr. Lau to the Management Committee, on whose instructions a metal plate was welded onto the plaintiff's side of the window between the kitchen of Shop Space and the meter-room or store-room of Caineway Mansion some two or three weeks before the 20th October 1933. On such metal plate was written Chinese to the effect that there be no wanton digging or chiselling of the wall. The caretaker also told the court that on this occasion of "borrowing electricity" Mr. Lau was referred to the Chairman who rang him up about half an hour later that permission had been granted.

6. The caretaker then described how he discovered on the 20th October a workman chiselling blocks away from the wall between the kitchen of the Shop Space premises and the store-room or meter-room of Caineway Mansion. The workman allegedly said to the caretaker that he "was to make a door" on the instructions of his employer who was understood by the caretaker to be Mr. Lau. Police was summoned, and it was anyway after 500 and work stopped. The next day, according to the caretaker, work resumed. The caretaker enquired of Mr. Lau as to whether permission had been obtained to open a doorway, and Mr. Lau was said to have given no conclusive reply but, when he was asked to stop work, told the caretaker: "You do your way. I do mine." Another report was thereupon made to the Robinson Road Report Centre resulting in the investigation by Station Sergeant Ng.

7. The Station Sergeant told the court that a complaint was made by the caretaker that a tenant was knocking down a wall. From time to time, the Station Sergeant spoke of structural alteration or demolition of a wall without permission, but I would attach little significance to the variations in his description of the caretaker's complaint.

8. The Station Sergeant testified that he was looking for the man in charge and finally spoke to the 3rd defendant, Mr. Lau. According to the Station Sergeant, at one time Mr. Lau claimed to be the proprietor of the business and Mr. Lau told the Station Sergeant that he had applied to Building Ordinance Office for permission; Mr. Lau further intimated: "It was his place; he could do what he liked, and it was none of the police's concern'.

9. As for the cooling tower erected on top of the yard of the Shop Space premises, Mr. Cheng, a committee member in 1979 and today and an officer in charge of the Air Conditioning Department of Hopewell Centre, received a letter of complaint dated 29th May 1979, "D9", from one Mr. Butt Chung Wah, then living in Flat F on the 3rd floor. Mr. Butt was then complaining of the humidity, noise and vibration generated by a similar type of cooling tower erected by the then occupant in 1979, the Berlin Supermarket. Mr. Cheng inspected the then cooling tower in 1979 and also the 1st defendant's new cooling tower in May 1984 upon receiving another complaint of excessive noise. In May 1984, he "felt heat and noise". He did not take any measurements of the noise level or temperature. He in fact deduced emission of hot air partly from the condensed moisture. He agreed that he was "merely guessing the noise in May 1984" as equivalent to that generated by an 8 to 10 B.T.U. air-conditioner. He further told the court that in 1979, on his inspection, the condition of the cooling tower of the Berlin Supermarket was "more or less the same". For these reasons, he concluded, the committee did not want the cooling tower to be in the same position. He conceded, however, that no complaint or objection as regards the cooling tower had ever been communicated to the defendants before the injunction.

10. Of the cooling tower, the caretaker, Mr. Poon seemed to be less informed. He was not very sure of Mr. Butt's 1979 letter of complaint, and he said that in any case he would not know whether the then cooling tower was in fact causing any disturbance by its noise in 1979. Nevertheless, so he disclosed, out of his own initiative, he suggested to Mr. Lau to install the cooling tower elsewhere. He agreed that no one had complained that the defendants were in fact doing anything wrong by erecting the cooling tower. He himself never heard of the plaintiff's demand for the defendants not connecting the cooling tower. In fact, he seemed surprised by the suggestion of such a plaintiff's complaint. Mr. Poon even maintained that injunction was not "against the cooling tower".

11. Although it was conceded by counsel for the plaintiff that the first floor to the seventh floor of Caineway Mansion had been used for residential purposes in breach of the conditions of the Occupation Permit, both the caretaker Mr. Poon and the committee member Mr. Cheng were reluctant to admit such residential user or their knowledge of it.

12. The 3rd defendant Mr. Lau as well as a director of the 1st defendant Miss Leung described to the court how Mr. Lau was approached by Miss Leung for the decoration of the Shop Space premises on the 15th September 1983. The alleged instructions to the decorator were, inter alia, either to replace the old window in the rear with a new window or "to modify the position of the window into a door". Miss Leung was briefed by Mr. Lau as to the necessity for a P.W.D. application for permission to open a door and that the time required would be from 1 to 2 weeks to 1 to 2 months. A decoration contract was signed on the 23rd September 1983, in which there was no specific provision for either the replacement of the old window with a new window or the installation of a door in its place. The explanation was that the defendants knew not precisely what to construct at the time and that in any case the costs incurred would be the same for the construction of either a new window or a new door. A plan was prepared and an application made to the Public Works Department on the 27th September.

13. Both Miss Leung and Mr. Lau denied that they used electricity of the Caineway Mansion without permission on an earlier occasion for inspection and making rough sketches. Upon being asked whether he could look directly into the room behind the wall when the relevant window was opened, Mr. Lau said "I only opened the window once. At that time it was very dark". That was on the 15th September 1983.

14. According to Mr. Lau, one or two days after the submission of the plan and application to P.W.D. for permission to open the door in place of the old window in the rear wall separating the kitchen of the Shop Space premises and the store-room of Caineway Mansion, he had a letter prepared and signed by the 1st defendant limited company for "borrowing electricity" from the Caineway Mansion. He took the letter to Mr. Poon and was directed to Mr. Lai, the Chairman of the plaintiff. Mr. Lai was not very co-operative and suggested that the matter would have to be stood over until the routine meeting of the plaintiff on the 27th October despite his plea that decoration work was scheduled to commence on the 3rd October.

15. Mr. Lau told the court that on the following day, however, the caretaker came to his company with the information that he had permission to use electricity of Caineway Mansion but with a sub-meter. Thereafter, Mr. Lau came with a workman to the Management Office and the caretaker opened the store-room for the necessary hook-up. According to Mr. Poon, the key was kept in the Management Office accessible to all caretakers. If there is any real conflict in how permission for use of electricity was granted or communicated, little capital seems to be capable of being made out of by either of the adversaries.

16. On the 3rd October 1983, work commenced. By the 15th October, Mr. Cheng felt concerned as to the P.W.D.'s application and he made enquiries from the department. He understood that there was to be 4 to 5 days' waiting.

17. Miss Leung testified that in fact after the renting of the premises from Madam Tsang, possibly the same Mrs. Ng, rental at $7,500 per month was to become payable as from the 20th October 1983 under "D16". Miss Leung further claimed that after Mr. Lau was engaged on the 15th September, the company resolved on the 20th September that if approval of P.W.D. for the opening of the door had not been obtained by the 15th October, then the old window was to be merely replaced by a new window and the proposed installation of a door would be abandoned. She spoke to Mr. Lau on the 15th October and ultimately left it to his discretion as to how long he should wait for the P.W.D.'s decision provided his decoration firm would be able to complete the works in time by the 24th October. In substance, so she alleged, Mr. Lau was told: "As time permitted he could wait; if otherwise he should replace the window".

18. According to Mr. Lau, he waited 4/5 days, and by the 20th he decided not to wait any longer for the P.W.D.'s decision and instructed his workman to replace the window and not to open a door. He told the court: "I do not know what my worker understood, but my instructions were to replace the window".

19. The defendants maintained that on the 20th October, the workman of Mr. Lau was merely endeavouring to replace the old window as can be seen from the photographs produced in these proceedings, which depict a space of about 5" to 6" broken through below the window frame when the police intervened. Mr. Lau estimated that approximately 70% of the work was done on the 15th October and by the 21st October, over 90% of the work had been completed.

20. In addition to the defendants' denial of any unauthorised use of electricity on an earlier occasion, Mr. Lau further denied having seen or talked to Mr. Poon, the caretaker, on the 20th October. It was admitted that he had, on the occasion of "borrowing electricity", told the caretaker that the decoration work would involve replacing the window "or possibly opening a doorway". Mr. Lau also denied any resumption of work on the 21st. It was disputed that he told the Station Sergeant that he was a proprietor or that the 1st defendnat had made an application to P.W.D. Mr. Lau explained that he told the Station Sergeant that the digging or chiselling was for the purpose of replacing the old window and that since the Sergeant did not wish to intervene in a civil dispute, he did not proceed to feed him with the information about the P.W.D. application. The defendants, therefore, claimed that the injunction was wholly insupportable for the works on the rear wall as well as the connection for the cooling tower.

21. The P.W.D. refused the 1st defendant's application on the 22nd October. The injunction was discharged in terms of the learned judge's endorsement on the 12th December, and decoration work was completed 10 days later on the 22nd December.

22. The defendants relied heavily on the 1st defendant's resolution to wait for P.W.D.'s approval only until the 15th October, which was criticised as being inconsistent with the subsequent limited discretion given to Mr. Lau to wait for further time provided that his firm could complete the works by the 24th October. The resolution is, even with all its formality, to a degree a self-serving document. It was, inter alia, maintained by the defendants that by the 20th October, Mr. Lau had decided not to install a door but to replace the old window with a new one. It was argued that with the decision of P.W.D. yet to be known, it would have been too reckless and unwise of Mr. Lau as a decorator to proceed with the installation of the door when under the Decoration Contract and on specific instructions he had an uninvolved option to simply replace the window. It was, therefore, strenuously contended that there was no need or temptation for Mr. Lau to embark upon possible unauthorized works. Besides, so it was urged, Mr. Lau had a contract completion date to meet and it would have been imprudent for Mr. Lau to risk forced demolition and delay under the Decoration Contract which imposed a 5% penalty each day on the contract price of $191,904.

23. On the other hand, there was no earthly reason for the Station Sergeant to tell an untruth. He might well be inaccurate in details. He claimed that Mr. Lau told him that he rented the premises and was a proprietor, but at the beginning of his evidence, the Station Sergeant spoke of looking for the man in charge. The Sergeant continued: Mr. Lau told him that he was such a person in charge and Mr. Lau "did not tell me anything more". Then, the Station Sergeant was asked to read from his note-book which contained an entry "The owner of the premises was Lau Ching To, C/M, aged 34" and "the person in charge of decoration was C/M Chan Kai Bun, 38 years of age". He was, later in evidence, much influenced by the fact that another man was understood and recorded by him as being in charge of decoration, and he seemed to be driven to have to accord Mr. Lau with a somewhat different capacity. That conclusion was not well supported by his earlier vague evidence in which he was also asked the following questions: "Can you recall any reaction from Mr. Lau?", and his answer was: "In a general way, his reaction was: It was his place, he could do what he liked and it was none of the police's concern". The Station Sergeant was far from being explicit but describing in a general way the reaction of Mr. Lau. Then, followed the first question in cross-examination: "Did Mr. Lau tell you he was a tenant of the premises?", and his reply was still as uncertain as it was: "It has been a year ago. Generally, Mr. Lau said he was the person in charge of the place." Later, in his evidence, the Station Sergeant seemed to have become more specific, but he admitted that he did not make it a point "to make sure for (himself) whether (Mr. Lau) was a tenant or just a person in charge".

24. The caretaker told the court that when Mr. Lau came with the application to the plaintiff for "Borrowing electricity", Mr. Lau claimed he had a share in the business. The caretaker explained that he reminded Mr. Lau that it would be more proper for the tenant and not the decoration company to come to negotiate for the use of electricity. The letter "D11" was in Chinese and signed by the 1st defendant limited company. According to Mr. Lau, the letter was not put in an envelope and indeed no envelope has been produced. The terms of the Chinese letter seeking permission to use electricity of Caineway Mansion would not have led to the alleged claim of Mr. Lau to a share in the business. Even if the caretaker had had difficulty in reading, Mr. Lau would have said: "Here is an application by the limited company not by the decorator!"

25. In view of the weaknesses on this aspect of Mr. Poon's s and the Sergeant's evidence, I do not find that Mr. Lau claimed to have a share in the business of the 1st defendant company.

26. I have had enough opportunity in observing the demeanour of witnesses. I prefer the evidence of the caretaker that there was an early occasion where electricity of Caineway Mansion was used without permission for the purposes of inspecting the premises and drawing rough sketches by a group of which Mr. Lau and Miss Leung were members. I also accept the caretaker's evidence that upon informing Mr. Lau of the requirement of a second side door or exit for a restaurant licence, Mr. Lau told him that he had means to apply to open a door.

27. Mr. Lau denied having told the Station Sergeant the 1st defendant company's application to P.W.D., but the Station Sergeant contacted one Mr. Chung of the Building Ordinance Office and enquired as to whether an application had been made for structural alteration. It is more probable that the Station Sergeant would not have made such an enquiry had he not been fed this information and put on this line of enquiry by Mr. Lau. I find that Mr. Lau did so inform the Station Sergeant that permission from the Building Ordinance Office had been applied for.

28. Mr. Lau admitted that if the old window was to be replaced by a new window involving no structural alteration, no permission from P.W.D. would be required. At the time of the police visit on the 21st October, if the defendant had intended to replace the old window with a new window and not to install a door, it would have been out of place for Mr. Lau to make reference to the B.O.O. application.

29. Likewise, Mr. Poon, the caretaker, had little real incentive to lie although he was from time to time imprecise and incomplete both in his evidence and in his own affirmation in support of the plaintiff's application for an injunction against the defendants. I find that he was so told by the workman who was chiselling about 5/6 inches below the bottom of the window to the full length of its 3 feet. Mr. Lau claimed that his workman was expressly instructed to open a window although he did not know what his workman understood his instructions to be. That sounded almost like a concession that the workman might have given inaccurate information. The workman in question was not called, an no explanation was given for his absence. Mr. Lau explained that there were stickers along the four sides of the old window, but the opening made by the workman on the 20th October and 21st October would appear to be slightly too extensive even allowing for these anchoring stickers. I also accept the caretaker's evidence that work was resumed and the opening was enlarged on the 21st October. There was no evidence as to precisely how much of the peripheral wall had to be knocked off or chiselled away for replacing the old window or modifying the existing opening for a door. The photographs are therefore unhelpful, and despite my first impression I can hardly derive any assistance from the size of the opening.

30. The defendants were, I find, in the course of putting in a door. It is of interest to note Mr. Lau's answer to a question on Miss Leung's instruction given to him around the 15th September 1983: "or to modify the position of the window into a door? That was, I find, precisely what was being done by the decorator on the 20th and 21st October, modifying the position of the old window for the installation of a door.

31. Except for the alleged proprietary interest of Mr. Lau in the evidence of both Sergeant Ng and the caretaker Mr. Poon, I accept and prefer their evidence to that of Miss Leung and Mr. Lau despite what was said to be the resolution of the 1st defendant company, the penalty in the Decoration Contract and other matters so fully canvassed on behalf of the defendants.

32. As for the cooling tower, so the caretaker told the court, there was really no complaint. The cooling tower was not even in operation at that time, and it was only in May 1984, long after the discharge of the injunction that Mr. Cheng, the committee member found it as noisy as the cooling tower formerly operated by Berlin Supermarket in 1979. Mr. Cheng's inspection was far from being satisfactory. The injunction was discharged to enable the 1st defendant and Mr. Lau as decorator to complete connecting the wiring and piping so as to put the cooling tower into operation. There has been no subsequent application to restrain the 1st defendant company from continuing to use it even after Mr. Cheng's inspection in May 1984.

33. I find and hold that there was justification for seeking and maintaining an injunction against the defendants in respect to the wall in the known circumstances which reflected a fixed intention on the part of the defendants to modify the same position into a door, but the plaintiff was clearly unjustified in obtaining and maintaining the injunction as regards the 1st defendant's cooling tower.

34. The injunction as regards "knocking down or in anyway damaging the wall" separating the shop kitchen from the store-room of the Caineway Mansion seems to be much too sweeping in terms. What the plaintiff had intended to obtain was merely an injunction restraining the defendants or any of them from installing a door and from knocking down or damaging so much of the said wall as to accommodate a new door in place of the old existing window. Apart from possible arguments under the Deed of Mutal Covenants, the plaintiff fairly conceded that they would never have objected to the defendants replacing the old window and executing incidental structural works therefor. The defendants, as I have found, intended to modify the space of the old window for the purpose of installing a new door. Their intention. should or could have been changed after the 22nd October 1983 when P.W.D. finally refused the 1st defendant company's application, but such possible revised or changed intention of the defendants was never communicated to the plaintiff. Some 10 days after the injunction, the parties returned to the learned judge, but none of the defendants then sought a variation of that part of the injunction order so as to limit it to a prohibition against door installation and incidental structural works. There is no evidence that any of the defendants had ever either prior to or after the 31st October 1983 requested the plaintiff so to limit that part of the order. No such application to court had ever been made. The defendants remained inactive up to the discharge of the injunction on the 12th December 1983 by consent. It does not, therefore, lie in the mouth of the defendants now to assert that that part of the injunction order was too wide in terms. In fact, the matter was, for the first time, raised by this court during final submissions. To all intents and purposes, every party to these proceedings proceeded on the understanding that the plaintiff would have no objection to the replacement of the old window by a new one of like size and construction. In my view, although that part of the injunction order as regards chiselling of the wall was too wide in terms, in reality it has caused no damage to the defendants.

35. It was alleged that the cooling tower was a nuisance. In addition to what I have earlier commented, there was one written and some oral complaints by the said Mr. Butt in 1979 against the cooling tower of Berlin Supermarket, but as the caretaker Mr. Poon told the court, he really knew not whether in fact that cooling tower generated noise of an objectionable level. There is no evidence that any proceedings had been taken against Berlin Supermarket by either Mr. Butt or the plaintiff or any other occupiers. The injunction was, by consent, discharged on the 12th December 1983, and the plaintiff was well aware that the defendants were free to put the cooling tower into operation. It was not until May 1984 that there was an inspection by one of the committee members, Mr. Tsang, on receiving a complaint of noise level. He took no scientific measurements and after his inspection, neither the complainant nor the plaintiff took any further steps inviting or compelling the 1st defendant company to improve the conditions or suspend the operation of the cooling tower. The evidence of alleged nuisance is, in my view, insufficient, and the allegation unproved.

36. I turn finally to damages. Mr. Lau told the court that installation for the door would take only 2 to 3 days with costs for a new door or a new window being the same. As the defendants were stopped shortly after noon on the 21st October, some 3 1/2 days prior to the completion date, although workers had to be recalled and tools had to be returned to Shop Space No.1 for the installation of the new window, there is no evidence that the remaining 3 1/2 days' time was not enough for the replacement of the old window. Probably, it would be sufficient, and I so find. That there was no objection to the replacement of the window was mutually understood. Besides, an unfinished rear kitchen wall window would not likely hinder the use of the premises.

37. Mr. Lau testified that at the time when the defendants were stopped by the injunction for connecting the cooling tower, the electric wiring was half done. After a delay for more than 50 days from the 21st October to the 12th December, the "very complicated" electric circuit would have to be rechecked and possibly in part replaced or relaid after the return of the machinery for the connection to the Shop Space. The extra time to complete was 10 days after the discharge of the injunction. It was almost conceded by counsel for the defendants that only negligible delay arose as a result of the police intervention. I have found that the decorator worked the morning of the 21st, therefore, all in all, the decorator had 3 1/2 more days to complete the contract when served with the injunction, ignoring the negligible police intervention. The extra 10 days' work after the suspension of the injunction less the 3 1/2 days left for the decorator to complete before the issuance of the injunction would yield a net balance of 6 1/2 extra working days which Mr. Lau and his company had to put in as a result of the long stoppage after the injunction. I accept that each day Mr. Lau had 3 workmen, each $170 a day, that would make a total of $3,315. I find that all the 6 1/2 days' delay was attributable to the cooling tower. It was submitted on behalf of the plaintiff that since no extra workers had been taken on and there was no lay-off without a 7 days' notice, Mr. Lau's firm was merely using redundant labour, thus causing no real loss to the 2nd defendant limited company in the 6 1/2 extra working days. In my view, the true damage to the decoration firm was the extra work it had to undertake as a result of the injunction and redundant labour force is not the proper test.

38. Under the decoration contract, the decorator was to pay a penalty of 5% of the contract price i.e. $9,595.20 a day. That is plainly an unenforceable penalty provision.

39. The alleged loss of both Mr. Lau and Miss Leung for court or chambers attendance is obviously too remote. Witnesses' attendance is a matter of taxation as are the other expenses for preparation of evidence in litigation including the accountant's remuneration and charges and the architect's consultation fees.

40. There was a delay of completion of a total of 59 days, i.e. 49 days from the 25th October to 12th December 1983 and 10 mere days from the 13th December to completion on the 22nd December 1983. I accept the quantum and calculation of loss in rental, rates and building management fees for this period in which the 1st defendant company was deprived of the use of the premises.

41. It was argued on behalf of the plaintiff that since (1) user of the Shop Space as a restaurant without a second exit was unlawful, (2) net profits expected to be made from such unlawful user would be legally irrecoverable and (3) net profits were gross profits taking into account expenses such as rent, rates and management fees, the 1st defendant company's claim for loss in rental, rates and management fees for 59 days was equally unsustainable.

42. There is no or no sufficient evidence of profits expected to be derived from the use of the Shop Space premises. The 5% yardstick out of the decoration price was clearly unacceptable and, therefore, in my view the 1st defendant company has not established any loss of expected profits. But for these out-of-pocket expenses, I am unable to accept the plaintiff's submissions. First of all, the Shop Space was used as a "fraternity association" from the 24th December 1983 to the end of January 1984, when the business was sold by Miss Leung, and since September 1984, Mr. Lau's company has moved in. Therefore, the "fraternity association" functioned for about a month. The caretaker's understanding was : "There was the main shop of  Mei Sik Kitchen in Caine Road over there. So when there were too many customers for the main shop, people would come over to this shop and had meals." There is no evidence to drive me to the conclusion that the use of the Shop Space premises for providing these facilities in the nature or a "fraternity association" was illegal. Such activities may or may not be illegal, but I simply have no clear evidence one way or the other. Furthermore, in my view, the recoverability of the 1st defendant company's claim is not to be judged by the intended use of the Shop Space but by the possible use of it. Thus, I hold that the loss in rental, rates and building management fees as expenses wasted for the period of 59 days for which the 1st defendant company was deprived of the use of the Shop Space is recoverable.

43. In conclusion, the plaintiff was not justified in applying for the injunction as regards the cooling tower and the 1st defendant company is entitled to damages in the sum of $14,750, $525 and $180 and the 3rd defendant, Mr. Lau and his company, the 2nd defendant company are entitled to damages in the sum of $3,315.

44. On the first agreed framed issue, therefore, I find and hold that the plaintiff was justified on facts and in law to apply for and maintain the injunction as regards the rear wall granted in the now discontinued action against the defendants. I have come to the conclusion that the ambit of that injunction was too sweeping but that in the known circumstances no real damage or prejudice had been caused to the defendants.

45. Also on the first agreed framed issue, I hold and find that the plaintiff was not justified in law and on facts to apply for and maintain the injunction as regards the cooling tower granted in the now discontinued action against the defendants. I also find that the 1st defendant company and the decorator in the person of Mr. Lau and his limited company, the 2nd defendant, have suffered damages in the sums I have indicated.

46. Judgment is therefore given for the respective defendants accordingly. As for costs, subject to what counsel have to say, I propose to make no order as to costs including those reserved for my consideration. The plaintiff succeeded on half of the injunction order sought, granted and maintained. The defendants succeeded on the other moiety of the injunction order so granted and maintained. Much time was taken up on the portion of the injunction order in which the plaintiff has succeeded, but substantial time was also spent on liability and quantum of damages which the defendants have been respectively awarded. There seems to have been a great deal of animosity generated by the plaintiff's action, and most issues were hotly contested. Much time was also wasted on the "procedural mass'' for which both parties were equally responsible. The fair order for costs would appear to be that each party to pay its/his own costs.

Representation:

Mr. B. Chain instructed by W.S. Lo & Co. for the Plaintiff.

Mr. N. Persaud instructed by Wing Sum Lo & Co. for the Defendants.