China Light & Power Company, Limited v. See Kong Silk Limited and Others

HCA005342/1989

1989, No.A5342

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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Coram: Hon. Liu, J. in Court

Date of delivery of judgment: 15 April 1993

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J U D G M E N T

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1. This is a claim for backcharge, calculated in respect to consumed electricity but unrecorded in two meters of the plaintiff. These two meters were installed for the use of the ground floor of Song Ling Industrial Building standing on 40 - 42 Chuen Ping Street, Kwai Chung, New Territories.

2. Prior to November 1976, the registered owner of the ground floor of Song Ling Industrial Building was Asia International Electronic (HK) Pte. Limited. On 19th November 1976, these ground floor premises were assigned to be the defendant. In September 1980, the ground floor premises were agreed to be sold by the defendant to the 1st Third Party, Mr Leung Tak Chung. In a little more than a month later, in October, the 2nd Third Party, Mr Chen Tai Un acquired the property from the 1st Third Party Mr Leung, but the sale was put through with the defendant as vendor and Mr Leung as confirmor by an assignment in December.

3. Between 1980 to 1986, the occupant of the ground floor premises was the 3rd Third Party, Dah Pang Printing Inc. Manufactory Limited. This company was in the control of Mr Chen Tai Un. The ground floor premises were transferred to this company by Mr Chen in 1986. I shall call the plaintiff "CLP", the defendant " See Kong", the 1st Third Party "Mr Leung Tak Chung", the 2nd Third Party "Mr Chen" and the 3rd Third Party "Dah Pang". I shall refer to the ground floor of Song Ling Industrial Building as "the ground floor premises".

4. For the service of these ground floor premises, CLP electricity meters had been installed, one at a time, since 1976. The first CLP meter (No.1004846) was installed on 6th October 1976 in the name of Asia International Electronic (HK) Pte. Limited. This first CLP meter was changed to the name of See Kong on 1st December 1976. On 5th May 1980, the three seals and the terminal box seal of the first CLP meter were found missing. The first CLP meter was thereupon replaced by another meter (No.1008324), the second CLP meter.

5. Shortly after the arrest of Mr Leung Tak Chung and his wife, the same seals of the second CLP meter were found damaged on 8th August 1986. It was replaced by yet another electricity meter (No.1015719), the third CLP meter. After the transfer of the ground floor premises by Mr Chen to Dah Pang in 86, a new electricity meter was installed for Dah Pang as from 1st December 1986.

6. As a matter of course, all these CLP meters were duly calibrated for use and examined on disconnection. It is a proper inference that in this case they were functioning well and within permissible limits at all times.

7. Mr Leung Tak Chung and his wife were eventually charged in the District Court with having conspired with others to defraud CLP by tampering with the first CLP meter and the second CLP meter during the period between 1st January 1981 to 28th July 1986. Mr Leung Tak Chung was alone convicted by the District Judge which found such tampering to have commenced from the middle of 1983. The case involved the use of unauthorised submeters and tampering of the meter dial. On the evidence, it is quite obvious that these unauthorised submeters were not easily noticeable.

8. As far back as 1976, Mr Leung Tak Chung was known to be the manager of Song Ling Industrial Building. On 23rd September 1980, Mr Leung Tak Chung acquired from See Kong the interest in the ground floor premises. He agreed to sell his interest to Mr Chen the following month. In December 1980, See Kong assigned the ground floor premises to Mr Chen with Mr Leung Tak Chung as confirmor.

9. In May 1974, Mr Leung Tak Chung, through his company, Kin Hing Godown Limited, obtained a lease of the 10th floor of Song Ling Industrial Building.

10. In December 1976, Mr Leung's Kin Hing Godown Limited purchased the 8th floor. The 8th floor was let out to a tenant for three years between 1976 to 1979.

11. In April 1978, Mr Leung's Kin Hing Godown Limited took a lease of the 9th floor, 11th floor and the roof of Song Ling Industrial Building.

12. As stated above, on 19th November 1976, See Kong became registered owner of the ground floor by an assignment of even date, and the first CLP meter was changed to the name of See Kong on 1st December 1976. See Kong had earlier applied for the change. Its application was made on 24th November 1976 with effect backdated to 25th October 1976. The first CLP meter had just been installed in the name of the previous owner. That was on 6th October 1976.

13. On 1st April 1974, Mr Leung's company, Kin Hing Godown Limited, had a meter installed in the name of the company for the 10th floor, but the 10th floor was formally let to Kin Hing Godown Limited only on 15th May 1974.

14. In the said conspiracy case in the District Court, particulars of other premises rented to Mr Leung Tak Chung were given as follows :-

(1) The 6th floor in 1972;

(2) The 5th floor in 1977;

(3) The 1st floor, 2nd floor, 3rd floor in 1980.

None of these floors was featured in these proceedings, but they reflect Mr Leung's sustained interest in Song Ling Industrial Building.

15. The commencement of unlawful tapping of electricity was found by the District Judge to run from the middle of 1983. Evidently, the finding was made on the basis of a different time frame in the charge, between 1st January 1981 to 28th July 1986. Evidence adduced in this case covers a more extended period, and there is no suggestion of any estopped by record. In fact, none has been pleaded.

16. There are four broad issues between CLP and See Kong. This Court is also called upon to determine the commencement date of such unlawful tampering of the first and the second CLP meters. The four broad issues are : first, whether the Supply Rules had been incorporated in the contractual relationship between CLP and See Kong; secondly whether, after the coming into force of the 1985 Supply Rules on 1st January 1985, the previous 1972 and 1978 Supply Rules would continue to have any application. Thirdly, with the writ in this case issued on 22nd September 1989, whether CLP's claim in respect of under-recorded electricity consumed prior to 22nd September 1983 is time- barred. And fourthly, what the estimated amount of under-recorded electricity so taken was.

17. Unlawful abstraction of electricity was virtually conceded on all sides. Mr Leung Tak Chung was convicted. As for its commencement, CLP put it as at 23rd December 1986. Mr Leung Tak Chung was deeply involved with Song Ling Industrial Building for many years. He had no proprietary interest in the ground floor premises until 23rd September 1980. Since 1976, he had been known to be managing the building. I could not imagine that access to the CLP's first and second meters inside the premises of the ground floor was ever denied to him in that capacity. In managing Song Ling Industrial Building, Mr Leung Tak Chung's responsibility included the lighting in its common areas. Needless to say that he had demonstrated his audacity and greed. He could hardly be expected to respect private ownership. After matters came to light, at a meeting with Mr Lau Wai Sing of the Bank of Canton in 1986, he confided in Mr Lau that he had been unlawfully tapping electricity supply for more than 10 years since 1976 or 1977. He owned up to theft of electricity in the region of $2,000 per month in the beginning to about $20,000 per month in 1986. It was the allegation of the Crown in the criminal prosecution, so noted the District Judge, that theft of electricity throughout the years amounted to about $5,000,000. Mr Leung Tak Chung had other property interests. The evidence led in this case fell far short of the Crown's alleged quantum. The Crown's allegation and the confession to Mr Lau of the Bank of Canton were not made with reference to exclusively the Song Ling Industrial Building or the first and the second CLP meters.

18. Mr Lee Tai Chi, the electrician engaged by Mr Leung Tak Chung to connect unauthorised submeters in the building confirmed that some other submeters were already in place and that the floors he visited were divided into 8 to 12 factory units. The ground floor premises had had the use of the first CLP meter since 6th October 1976. The first and the second CLP meters were found to have been physically tampered with in 1980 and 1986 respectively. The extent of tampering was more fully exposed during investigation. Tracing the monthly consumption of See Kong from its meter's effective date i.e.

25th October 1976 from which See Kong was prepared to be held responsible, the consumed units recorded on the meter dial were : as at 25th October 1976 - 740 units; as at 25th November 1976 - 220 units; as at 23rd December 1976 - 150 units; and as at 24th January 1977 - 40 units. The very substantial drop of 590 (740 - 150) units from 25th October 1976 to 23rd December 1976 and the lower than average domestic rate consumption until 1980 were, in the light of the then prevailing circumstances, indicative of unauthorised tampering of the first CLP meter from December 1976 to 1980. Then on 5th May 1980, the first CLP meter was found to be left unprotected by security seals. The low consumption between 1980 to 1986 was also consistent with tampering of the second CLP meter which had damaged seals on 8th August 1986. It was open to CLP to draw the conclusion that during 23rd December 1976 to 8th August 1986, these two CLP meters had been unlawfully interfered with. As a matter of fact, the electrical engineer expert for CLP, Dr Chan, would prefer to take the tampering commencement date a little way back to 25th November 1976 where a significant fall from 740 units to 220 units was recorded.

19. See Kong acquired the ground floor premises by an assignment dated 19th November 1976 and until 1980 those premises were left, I find, vacant on account of flooding. There were seven zero consumption readings between 1978 to 1980, but CLP's Dr Chan attributed these zero readings to likely manipulations, the possibility of which Dr Ho, See Kong's expert, would not completely rule out. There was no evidence that the strip-lighting and the ventilation fans on the ground floor premises had been negligently left unswitched off; nor was there any evidence of electricity leakage. Even the low recorded monthly consumptions in these four years, between 1976 to 1980, exceeded the range of electricity consumption needed for the meagre use described by See Kong's then assistant factory manager, Mr Shue Yan Chang. Mr Shue visited the ground floor premises in his usual weekly inspection round for about 10 minutes, switching on half of the strip lights and the two ventilation fans. The excess in consumption above such usage was a sign of some unauthorised tapping of the first and the second CLP meters for the ground floor premises. Judging by the low recorded consumption which was probably itself only a fraction of actual meter readings, the irresistible inference is that unauthorised submeters were hooked up in the flooding period. Mr Leung Tak Chung retained his interest in the ground floor premises for about a month; then he agreed to sell it to Mr Chen in October 1980. After the sale, Mr Leung Tak Chung had Mr Chen talked into accepting a sub-meter connected to what was claimed to be his "big meter" for common use. Mr Leung was guilty of misleading Mr Chen as alleged in the Third Party proceedings. Mr Leung Tak Chung was then helping himself to "free" electricity. As I have said, the 8th floor was sold to Mr Leung's company, Kin Hing Godown Limited, in December 1976 and was thereafter let to a tenant for three years from 1976 to 1979. No evidence was led that a similar arrangement had not been made with that tenant for use of electricity through a sub-meter fed by the "big meter". For Mr Leung's preposterous and deceitful conduct, I would not be prepared to consider excluding the 8th floor during the 3 years' rental period from Mr Leung's potential fraudulent manipulation. After all, Mr Leung felt no qualms about connecting a submeter to property he had outright disposed of. Why should he have any reservation in connecting unauthorised submeters to property he had only temporarily leased out? I would not adjust CLP's estimate merely on this account.

20. The 10th floor was let to Mr Leung Tak Chung's Kin Hing Godown Limited in May 1974. Although Kin Hing Godown Limited had its own CLP meter installed as from April 1974, for his display of audaucity and greed this available direct source alone would not be enough to undermine the assumption that Mr Leung had since December 1976 continued to help himself to "free" electricity for his premises in Song Ling Industrial Building, including its 10th floor. Put logically, I would not allow any adjustment to CLP's estimate merely for the fact that a CLP meter had been installed for the use of the 10th floor since April 1974.

21. The 9th floor, 11th floor and the roof were let to Kin Hing Godown Limited from 1st April 1978. It was submitted on behalf of See Kong that there was no incentive for Mr Leung Tak Chung to connect unauthorised sub-meters for the use of these three floors via the first CLP meter before April 1978. For the criminal prosecution in the District Court, CLP produced calculations for tampering from 1978, but as Mr Chan Chi Ming, CLP's Security Manager, explained that he had not been given earlier data. After all, the period in the charge before the District Court ran only from 1st January 1981 to 28th July 1986. Counsel for CLP did put to Dr Ho for See Kong the possibility of tampering to have started from "at the latest" 1978, but this is nothing to be made capital of.

22. As for these 9th, 11th floors and the roof, I would accept it as unlikely that Mr Leung Tak Chung would connect any unauthorised submeters for their use prior to his procuring a lease of these premises on about 1st April 1978. For the estimated consumption from 23rd December 1976 to 31st March 1978 in CLP's time frame, I would reduce the estimated consumption by, say, half. No matter when Mr Leung was given possession, I have taken 1st April for ease of reference. I shall wind up this aspect later in my judgment.

23. Otherwise, CLP's postulated commencement date and its selected period of unauthorised tapping of electricity were, I find, well supported by its technical and professional staff. Their views on tampering commencement and period were indorsed by CLP's expert, Dr Chan, who suggested even an earlier commencement date as from 25th November 1976. Therefore, except for the 9th floor, 11th floor and the roof of Song Ling Industrial Building between 23rd December 1976 to 31st March 1978, I prefer the views of CLP's staff as confirmed by Dr Chan. For these reasons and the examination I am about to make of the proposed methodologies for assessing the backcharge, I find myself unimpressed by the other alternative estimates proffered by the other parties in this case.

24. CLP has had three successive sets of Supply Rules, 1972, 1978 and 1985. The 1985 Supply Rules came into operation on 1st January 1985. Paragraph 230(2) of the 1985 Supply Rules provides that in the case of an undercharged or under-recorded electricity consumption, "the Company will on the basis of its records, available technical evidence, the consumer's consumption history and other relevant circumstances, make retrospective adjustment to the consumer's account in respect to consumption and demand to such extent and for such period as may be determined by the Company." CLP's claim against See Kong is exclusively founded on contract. There were provisions in the 1972 and 1978 Supply Rules specifying a different date for operation as regards new installations. An alteration in procedure is generally intended to be retrospective but it is trite law that other statutory provisions are not unless the language is express and clear. But construction of a contract is not on a par with statutory interpretation. What has been regarded as "the golden rule" for construing a contract is to "give the words plain, ordinary and popular sense". It was not seriously disputed at the trial that the Supply Rules were part of the contractual agreement between CLP and See Kong, and I so hold on the terms of See Kong's application form. By paragraph 102 of the 1985 Supply Rules, all previously published Supply Rules were superseded. No one should entertain any doubt as to what supersession means. If further assistance is at all necessary, the Shorter Oxford English Dictionary defines "supersede" as "to put a stop to (legal proceedings, etc.); to stop, stay"; "to set aside as useless or obsolete"; "to take the place of (something set aside or abandoned)". In my view, it is beyond argument that the 1985 Supply Rules took the place of and put an end to the 1972 and the 1978 Supply Rules. The case of China Light and Power Co. Ltd. v. Lau Cheok Hong (High Court Action A7695 of 1988) offers little guidance. The parties before the court in that case were content with paragraph 230(3) of the 1985 Supply Rules. The Deputy Judge himself eventually applied also paragraph 230(3) of the 1985 Supply Rules. Earlier Supply Rules were not invoked. The retrospective effect of the 1985 Supply Rules was not canvassed by Mr Fok who also appeared for CLP in that action. The defendant there acted in person and made no contribution. It was quite superfluous for Deputy Judge Neoh, Q.C. to consider the operation of the various Supply Rules for 1972, 1978 and 1985. What was judicially observed as to the correlation between these respective Supply Rules was uncalled for and decidedly obiter. It would also appear to be incorrect to assume, as did the Deputy Judge, that the 1985 Supply Rules were not in any way expressed to be retrospective. Both paragraph 230(2) and (3) enable "retrospective adjustments" to be made in a demand "to such extent and for such period as may be determined by the Company". Retrospective adjustments made for any period as may be determined by CLP must clearly cover any period before 1st January 1985.

25. Coming back to this case, the word "supersede" in paragraph 102 and the words "retrospective adjustments", "for such period as may be determined by the Company" in paragraph 230(2) clearly apply the 1985 Supply Rules, to all intents and purposes, exclusively to all periods prior to 1st January 1985, its operational date.

26. CLP did not seek to rely on s.26 of the Limitation Ordinance in respect to concealed fraud or mistake. CLP relied on a breach of contractual obligation to pay its supplementary bill. The obligation to pay would not arise until a demand was made pursuant to paragraph 230(2) of the 1985 Supply Rules. Thereafter, pursuant to paragraph 203(5) CLP must "advise a consumer of any adjustment to his account ... by way of a ... supplementary bill". Under the same paragraph 203(5), the additional charges in the supplementary bill would not become payable by the consumer unless the bill is sought to be presented for payment. See Kong's obligation to pay did not arise before the presentation of the supplementary bill, i.e. on 26th June 1989. CLP's contractual claim admits of no obscurity and cannot be said, by any stretch of imagination, to have been statuted-barred.

27. I turn finally to the amount of under-recorded consumed electricity for which, particularly in the case of fraud, CLP must necessarily rely on estimation.

28. Taking into account general statistics of electricity consumption in various sectors or at any given time cannot assure a better result. The statistician, Dr Shen Shir Ming, called by the first Third Party, Mr Leung, was critical of CLP's formula for re-assessment. She found it unacceptable as being too simplistic a model in statistics. She was of the firm view that CLP's attempt was not made on a model with proper regard paid to a balanced situation. She raised factors such as consumption statistics, economic trend, seasonal fluctuations (seasonality), a more representative long term cycle of 2 - 3 years as opposed to just one single segment or "observation", data from comparable factory buildings or floors, post-interference consumption history of all unauthorised submeters, individual characteristics and vacancy time. She drew attention to what she preceived as flaws in the underlying assumptions in CLP's methodology. However, she was unable to predict whether CLP's estimation was wrong or correct. Statistics is a science to study uncertainly and variability.

For the lack of "other useful information", she herself had not even attempted to construct a better statistical model. She attacked CLP's approach as simplistic, but for lack of reliable data she seemed to be resigned to the fact that an all out attempt at a compendious reconstruction was not possible.

29. It is difficult to speculate which way the adjustment would go, even with the aid of all the "other information", in any set of unique individual scenario. No improvement could really be promised. Results more favourable to See Kong had been produced on some available statistics of general application, but these could not be dependable in the absence of the individual particulars of the actual consumers. Many formulae had been applied with allowances given to these questionable factors. Dr Shen, the statistician, had not elaborated on the proper application of these variants to the individual circumstances of each actual consumer, which were unknown. The adjustments so propounded would tend to pile more uncertainties on CLP's estimate, itself an uncertainty, with little assurance that the adjusted amount would be more accurate or less imperfect.

30. I have followed with interest the mathematical exercises and rehearsed the same again after the conclusion of the evidence in this case. I am unable to say that any of the suggested alternatives would provide a truly realistic substitute for CLP's approach which is at least based on actual post-interference consumption immediately after the replacement of the tampered meter and in what it regarded as a relatively representative period i.e. from 29th August 1986 to 30th October 1986, though of 62 days. CLP regularly handles backcharge calculations in the region of about 60 cases a month on the basis of Average Daily Consumption (ADC) derived from available data over only 2 - 3 months.

31. It must be recognised that CLP's methodology and the others are all susceptible to many criticisms. I could offer a few more. CLP's backcharge billing had to be calculated in accordance with the 1985 Supply Rules, "on the basis of its records, available technical evidence, the customer's consumption history and other relevant circumstances". It enjoyed the overall approval of its technical and professional staff. It was also supported by an outside electrical engineer expert. The alternatives suggested on behalf of See Kong and Mr Leung Tak Chung lacked the blessing of a practical solution. In the little known scenario of the actual consumers, these alternatives allowed conjectural deductions for assumptions, uncertainties and information of debatable application such as the zero dial readings, the unverified possible inconsistency in the number of unauthorised submeters, the disputed period of vacancy, the public statistics, the seasonal fluctuations, the general trend of electricity consumption in commercial and industrial sectors, and the economic trend. CLP was making a genuine effort, in its regular way, with the available information they regarded as reliable.

32. There is, I accept, no satisfactory or conclusive means of aptly applying all these suggested variants which may have no or little bearing on any given case. Dr Chan was adamant that adjustments could only be properly attempted with "correct figures". It would be all the more difficult to properly gauge the extent of any adjustment without the data perhaps unique to each of the users in each phase of the overall period. Hence Dr Chan, CLP's electrical engineer, disapproved of See Kong's proposed adjustments.

33. Dr Ho, See Kong's electrical engineer expert, gave his views on the so-called string of zero dial reading's before April 1980 as being atypical and reflecting a true change of the consumption pattern in a four year's period of non- occupancy. It was suggested that no tamperers of electricity meters would have naively left behind a string of zero readings for arousing suspicion. He did not completely rule out Dr Chan's suggestion of possible meter interference by manual manipulation in jamming or disengaging although no jamming device or dislodgment was detected at the very time of inspection. There was evidence of recorded consumption for inferring that unauthorised connections must have been made to the 1st and the 2nd CLP meters in the ground floor premises during the period of non-occupancy from 1976 to 1980. Dr Ho's proposed introduction of the Power Companies' and Government's consumption data for adjusting the estimated Average Daily Consumption (ADC) in this case cannot be, for the reasons I have given, helpful. The reference to Annual Digest of Statistics between 1970-1980 and the Power Companies' General Service Tariff and Bulk Tariff records in the commercial and industrial sectors would not likely, in my view, eliminate errors or reduce inaccuracy. Criticism was also levelled at the absence of post-interference consumption history of the submeter users, but such material was not shown to have been sought from or otherwise in the possession of CLP. Mr Cheng, CLP's Revenue Security Engineer, was unaware of any facilities for storing or retrieving any such post consumption history. It would be unproductive to include in this judgment a minute analysis of Dr Ho's postulations.

34. Dr Kumar David, an expert called by Mr Leung Tak Chung, covered some similar grounds, but he recognised the limitations in the available information and did not seek to offer any better figures for the backcharge. He was of the opinion that the man-in-charge of the meter reading section should have been critical of the failure of his meter readers to detect the extensive unauthorised tapping and that CLP should have been more vigilant, but he was not challenging CLP's claim that unauthorised tampering was not in fact discovered until August 1986 shortly after the arrest of Mr Leung Tak Chung for conspiracy to defraud CLP by interferring with its meters. CLP's Revenue Security Section had not even been set up in May 1980. The unauthorised submeters were not conspicuous. Despite Dr David's observation, there was no sufficient evidence to attach CLP with negligence. After all, it was a case of deliberate concealment, fraud.

35. In my judgment, both CLP's Average Daily Consumption (ADC) and estimation are intrinsically sound and have not been fundamentally flawed. Further, as I have said, CLP's reconstruction has the backing of its technical and professional staff. It makes optimum assumptions to avoid more imponderables and may thus be said to be less vulnerable to uncertainties. I am impressed by and prefer Dr Chan's basic approach corroborating CLP's practical reconstruction. The end-result of the adjustments based on questionable information would be, so postulated Dr Chan, "worse than the original estimate". I am persuaded that the in-built uncertainty in CLP's estimation would probably be so compromised by more uncertainties. CLP's calculations are, I find, reasonable, proper and acceptable.

36. Mr Shum, CLP's installation inspector, found both Top On and On Hing submeters attached to the second CLP meter for the ground floor premises on 21st November 1986. The court was told that submeters were thereafter gradually disconnected from the third CLP meter, starting with five being removed on 22nd November. Mr Shum also found the Top On submeter attached to the CLP meter of Kin Hing Godown Limited on 3rd September 1986. The CLP meter of Kin Hing Godown Limited was taken over by the firm Luen Tak which applied to change the name of the meter on 5th September 1986 and paid electricity deposit on 18th September 1986. Mr Chan, the Revenue Security Manager of CLP, gave 18th September 1986 as a probable date for the Top On submeter to be disconnected from the CLP meter of Kin Hing Godown Limited. It was also probable that the disconnection took place between 5th September 1986 to 18th September 1986. However, it would be more advantageous to See Kong, for evaluation purposes, to adopt CLP's assumption that the Top On submeter had been attached to the third CLP meter (No.1015719) for the ground floor premises since 3rd September 1986.

37. CLP's Average Daily Consumption (ADC) of 1,233.71 was obtained by averaging the post-tampering consumption of the third CLP meter, which was installed on 8th August 1986, for 62 days from 29th August 1986 to 30th October 1986. The first few days after the replacement of the second CLP meter on 8th August 1986 were disregarded by both CLP and See Kong. The starting point, 29th August 1986, in CLP's selected time frame was shared by See Kong. See Kong, in one of its alternatives, sought to introduce a longer period of 85 days until 22nd September 1986 when the unauthorized submeters came to be gradually disconnected. I shall return to this extended period.

38. The Average Daily Consumption (ADC) for Top On and On Hing was calculated from their respective recorded consumed units during the 43 days between 28th August 1986 to 10th October 1986. Assuming that both On Hing and Top On were connected to third CLP meter for only 57 days as from 3rd September 1986 until the end of CLP's selected period of 62 days up to 30th October 1986, the estimated ADC for CLP's 62 days may be adjusted to 1,044.63 kwh per day. Of course, it had to be assumed that the submeter recordings of Top On and On Hing for the said 43 days were accurate. CLP found comfort in the fact that such an ADC of 1,044.63 would also accord most closely with the consumption for eight industrial and two commercial consumers for 1986. Therefore, accepting Dr Chan's rationale for excluding the variants together with his explanation that CLP's selected 62 day period would not likely be affected by cold or hot weather consumption, in my judgment CLP should succeed at the rate of 1,044.63 kwh per day for ADC. Needless to say I have regarded as reasonably acceptable the assumption that all the effective submeters, save for the Top On and On Hing later connections, had throughout been attached to the relevant CLP meters.

39. I have noted the control exercised by Mr Leung Tak Chung over his portions of Song Ling Industrial Building. Not entirely without deference, I have decided to make some allowance for the period from 23rd December 1976 to 31st March 1978 as the 9th floor, 11th floor and the roof were included in Mr Leung's portfolio via a letting to his company, Kin Hing Godown Limited, only as from 1st April 1978. These floors could be said to be about one half of the property under consideration. The estimated backcharge at the rate of 1,044.63 kwh/day for that period should be reduced, say, by half. Subject to these observations, I prefer CLP's calculations. Counsel will accordingly produce the correct figure for action.

40. See Kong has produced many probabilities and possibilities. Its best formula, subject to a further adjustment for the true effect of the 1985 Supply Rules, is scenario 2C, which selected ADC 484.16 for a period of 85 days from 29th August 1986 to 22nd November 1986. The longer period was advocated by reason that gradual disconnection of the submeters commenced only from 21st November 1986. Consumption in the period immediately or shortly before disconnection of these submeters could not realistically be expected to be as representative. The noticeable difference in ADC, in the absence of evidence of any circumstantial or other changes, supports such a reality, particularly when the variation set in during the last 23 days. I prefer CLP's selected period of 62 days ending 30th October 1986. It has the advantage of the efforts of CLP's experienced staff as well as its professional and security personnel. They have not been shown to be deliberately or otherwise unfair. CLP's selected 62 days cannot be justifiably displaced merely because of an available longer period.

41. See Kong's scenario 2C took into consideration seasonality and general consumption factors which cannot have, without more, real significance. Scenario 2C is the formula most favoured by See Kong's counsel. For the same parity of reasoning, I do not accept the other proposed calculations of See Kong. Suffice it for me to express my views on scenario 2C alone, but I should add that I have examined individually and rejected these other probabilities and possibilities, on expert opinion on methodology, calculations and the questionable factors.

42. I would, therefore, grant judgment for the plaintiff (CLP) against the defendant (See Kong) in the sum calculated in the manner suggested by CLP but at 1,044.63 ADC for the period commencing 23rd December 1976 to 8th August 1986, with the figure for the period from 23rd December 1976 to 31st March 1978 halved. I would also award costs for the plaintiff against the defendant.

43. I pass on then to the Third Parties proceedings. Either at common law or under the Civil Liability (Contribution) Ordinance, any claim for indemnity or contribution founded on See Kong's liability to CLP as adjudged by this Court must be accompanied by CLP's potential right to claim against these Third Parties.

44. Mr Chen's and his company's liability to indemnify See Kong under common law has not been eroded by the Civil Liability (Contribution) Ordinance. See s.9(3)(a) Cap.377. The right of See Kong to claim contribution from Mr Chen and Dah Pang seems to have been secured because See Kong is liable to CLP as envisaged by s.3(1) Cap.377 and Mr Chen and Dah Pang would also have been, if sued, responsible for CLP's loss under s.2(3) Cap.377.

45. The 1st Third Party, Mr Leung Tak Chung, would have, if sued on an implied contract, to pay the price of the unrecorded consumption. "A person who clandestinely abstracts gas which has not passed through the meter may be sued on an implied contract to pay the price of the gas" para.651, footnote (f) 18 Halsbury's Laws of England, 3rd edn. A similar statement is repeated in footnote (1), para.509, 19 Halsbury's Laws of England, 4th edn. See also the consensus on fraudulent or secret abstraction expressed in Birmingham & Staffordshire Gas Co. v. Ratcliff (1871) LR 6 Ex.224; (1871) 40 C.J. Ex.136. A like implied obligation to pay arises from a fraudulent or wrongful acquisition of goods or services. See paras.635-637, 640, 641 & 691, 9 Halsbury's Laws of England, 4th edn., See Kong's claims against Mr Leung Tak Chung are, on the facts I find, wholly established. There is no question of See Kong's claims against Mr Leung Tak Chung being time-barred. See Kong's right to an indemnity accured from the time when it became liable upon being presented with the CLP supplementary bill on 26th June 1989. See para.669, 28 Halsbury's Laws of England, 4th edn. The Third Party Notice in this case was issued within time on 17th June 1992. See Kong's claim for contribution against Mr Leung Tak Chung is also unaffected by s.6 of the Limitation Ordinance as time is to run from judgement against See Kong. See Kong is to have costs against Mr Leung Tak Chung.

46. The 2nd Third Party, Mr Chen, became registered owner of the ground floor premises by an assignment dated 16th December 1980. These premises had thereafter been occupied by the 3rd Third Party, Dah Pang, which took over as registered owner in 1986. As registered owner and occupier, Mr Chen and Dah Pang obtained electricity from an unauthorised submeter connected to the 2nd CLP meter until 8th August 1986. Mr Chen was given to understand, so he testified, that he was to be provided with electricity throught a submeter from Mr Leung's "big meter". To him, everything was in the open and appeared proper. I accept his version. In any case, knowledge, express or imputed, of the material facts for raising unjust enrichment or an implied contractual obligation to pay for consumed electricity was not pleaded against Mr Chen or his Dah Pang company. These Third Parties had paid for their actual consumption. It is difficult to appreciate how it could be said that they were unjustly enriched. Whilst fraud and all necessary ingredients against Mr Leung Tak Chung were virtually written on the wall, as against Mr Chen and Dah Pang, clandestine or fraudulent or wrongful abstruction of electricity should have been specifically pleaded. I would readily treat whatever pleading deficiency, if any, as having been duly amended as regards Mr Leung Tak Chung, but for Mr Chen and Dah Pang, the case against them must be properly set out. Moreover, there can be no question of fraud or any such wrong on the part of Mr Chen or his company. Further, on the facts no liability arose on the part of Mr Chen or Dah Pang towards See Kong.

47. I was persuaded by the elaborate submissions of Mr Cheung, counsel for Mr Chen and Dah Pang, that See Kong was unable to pursue its claim against the 2nd Third Party and the 3rd Third Party. In her realigned submissions, counsel for See Kong focused on implied contract and/or unjust enrichment which was unsupported by the evidence or in law.

48. The actual consumption of Dah Pang from 16th December 1980 to 8th August 1986 was estimated to be $20,768.24 (Exhibit P11 : $14,671.69 + Exhibit P12 : $6,096.55) at the ADC calculated on CLP Consumption History of Dah Pang between 1986 to 1992. If the lower 85.86 ADC is adopted, calculated from consumption in the 1985-1986 debit notes of Mr Leung Tak Cheung, purportedly derived from the submeter readings, Dah Pang's assessed consumption for the same period would be $18,579.62 (Exhibit 13 : $13,126.13 + Exhibit 14 : $5,453.49). See Kong was not content with a claim against Mr Chen and Dah Pang for only this self-consumed amount. See Kong sought to bring in Mr Chen and Dah Pang as "actual consumers" for the overall consumption under the Supply Rules. It was conceded by Mr Chen that he was aware of CLP's monopoly in Kowloon and the New Territories. Through Mr Chen and by reason of its sources of electricity supply elsewhere, despite the fact that no cross-examination was conducted in this direction, Dah Pang must have also known of CLP's monopoly. Mr Chen was conscious of the usual need to and did ask for the ground floor electricity deposit receipt for refund and change of name. Mr Leung Tak Chung offered what I would regard as a plausible explanation for withholding the deposit receipt and suggested supplying electricity via his own "big meter", then serving also his other tenants through submeters. That was accepted by Mr Chen who struck me as a straight-forward and honest witness. There is evidence in this case that submeters could be sanctioned and installed by CLP. Mr Chen's understanding was that all was in order. There was no sufficient evidence to raise negligence. Acceptance of the Supply Rules for such a unique situation cannot be inferred from knowledge of general application of these rules to ordinary and direct consumers. Whatever awareness in or of these Third Parties of the existence of CLP's Supply Rules, it cannot be said that it was within the contemplation of the parties that some day a claim could be founded on these Supply Rules by See Kong against Mr Chen or Dah Pang. I have held that these Third Parties were not or could not have been liable to See Kong or CLP, there was no room for these Supply Rules to apply. The circumstances as known, even if liability could somehow be attached, would not be sufficient to have these rules incorporated, particularly vis-a-vis See Kong and Mr Chen or Dah Pang. Moreover, implied contractual obligation against Mr Chen and Dah Pang was sought to be founded on "clandestine or fraudulent abstraction" of electricity. Such alleged illicit maneuver must necessarily have been taken with a view to shutting out CLP, and it would be wholly illogical to suggest that it was, at any time, envisaged that these CLP Supply Rules could one day be invoked. I share also the criticism of Mr Cheung, counsel for Mr Chen and Dah Pang, that electricity which had passed through the relevant CLP meter could at all be said to be still capable of being extracted by these Third Parties as CLP's electricity.

49. In the result, See Kong's claims against Mr Chen and Dah Pang wholly fail. I dismiss the same with costs. The corresponding claims of Mr Chen and Dah Pang against Mr Leung Tak Chung therefore lapse, but Mr Chen and Dah Pang would have had a right to seek full indemnity and/or contribution from Mr Leung if See Kong had succeeded.

50. All references to costs in this judgment are to be understood to have been made on the basis of an order nisi. The plaintiff (CLP) do have costs against the defendant (See Kong) in the action. The defendant (See Kong) is to have costs against the 1st Third Party (Mr Leung Tak Chung) (in the Third Party proceedings) on the common fund basis, including costs payable to the 2nd Third Party (Mr Chen) and 3rd Third Party (Dah Pang). The 2nd Third Party (Mr Chen) and 3rd Third Party (Dah Pang) do have costs in the Third Party proceedings against the defendant (See Kong). The 2nd Third Party (Mr Chen) and 3rd Third Party (Dah Pang) do have costs against the 1st Third Party (Mr Leung Tak Chung) in the Third Party proceedings on a common fund basis less, for the removal of doubts (if any), costs taxed and actually paid by the defendant (See Kong).

51. The conduct of the 1st Third Party (Mr Leung Tak Chung) is totally unbecoming. If only Mr Leung Tak Cheung had displayed any common sense and decency, these proceedings could have been avoided. Mr Leung Tak Chung must be, if ever legally possible, held responsible for the actual loss of the parties involved. It is regrettable that there seems to be no ways and means of keeping CLP fully reimbursed.

Representation:

Mr Joseph Fok, inst'd by M/s. Alsop Wilkinson, for the Plaintiff.

Miss Susan Kwan, inst'd by M/s. Iu, Lai & Li, for the Defendant.

Mr S.C. Sui, inst'd by M/s. Ho, Li, Lo & Lam, for the 1st Third Party.

Mr Andrew Cheung, inst'd by M/s. Wilkinson & Grist, for the 2nd and 3rd Third Party.