Kwong Gut Ching v. Tai on Machinery Works Ltd

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISIDICTION

ACTION NO. 2762 OF 1972

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28th November, 1972

Coram: Li J. in Chambers 

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JUDGMENT

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1.  This is an application for the continuation of an interim injunction obtained by the Plaintiff ex parte to restrain the Defendant whether by itself or by its servants or agents or otherwise from (i) resuming or taking possession of the premises known as No. 4 Hung To Road, 2nd floor (Portion), Kwun Tong, Kowloon and (ii) taking possession of, disposing, sell or otherwise dealing with the said Company’s goods or partnership goods or chattels stored in the said premises.

2.  The facts as disclosed in the affidavits are as follows:

3.  On or about September 1969 the Plaintiff entered into a partnership agreement orally with one LAU Kwong who is at all material times the principal shareholder and Managing Director of the Defendant Company. By virtue of this agreement LAU Kwong on behalf of the Defendant Company further agreed with the Plaintiff that the partnership business may occupy a portion of No.4 Hung To Road, 2nd floor, Kwun Tong (hereinafter referred to as “the premises” or “partnership premises”). The partnership entered into possession by virtue of this licence into the premises. In March 1971 there was a dispute between the two partners, namely, LAU Kwong and the Plaintiff. As a result both parties gave notice of their respective intention to dissolve the partnership in July 1971. However, the two failed to reach an agreement as to the disposal of partnership assets. At one stage LAU Kwong or the Defendant Company offered to purchase the chattels and goods of the partnership business at the price of $45,000 which offer was rejected by the Plaintiff, whereupon the Defendant Company gave notice in April, 1972 which is nearly a year after the notice to determine the licence granted to the partnership Company. Perhaps at this stage I should refer to the terms of the licence.

4.  The terms are that the Partnership Company were licensed to stay in the premises. The Defendant will supply the Partnership Company with water and electricity and in consideration of such supply the Partnership Company pays the Defendant Company a sum of $500 per month. According to the Plaintiff, the licence is to be terminated only at the will of the Plaintiff. According to LAU Kwong, the licence was only to assist the Partnership Company on its feet at the beginning and may be revoked at any time by the Defendant Company. Upon receipt of the Notice of Termination of the licence the Plaintiff refused to move. In July 1972 the Defendant Company threatened to re-enter and to dispose of the goods of the Partnership Company. The Plaintiff then issued a Writ on the 30th of November, 1972 asking for a declaration and for such injunction. An ex parte injunction was obtained by the Plaintiff on the 31st of October which has been adjourned from time to time until hearing today.

5.  It will be observed that while in the Affidavit the Plaintiff alleges that there was an offer on the part of the Defendant Company to purchase the Plaintiff’s goods for $45,000 the Plaintiff has not disclosed in his Affidavit as to what sort of goods and chattels now in the possession of the partnership business stored in the premises. On the other hand, the Defendant Company made a full disclosure of the goods and chattels now stored in the premises which is attached in an exhibit attached to the Affidavit of LAU Kwong. Such disclosure shows there is nothing much that is stored there but a few work benches, a desk, an oven and some pieces of wood. It does not require a person with great imagination to find out that the goods as such can hardly be worth $45,000. What the Plaintiff’s contention is that because the licence to occupy the premises is at the will of the Plaintiff, therefore the partnership business has an interest in land which is of some value. Again, it does not require a person with great imagination that the Defendant Company was offering a very high price for something which is of little value in order to regain the possession of the premises. There is evidence that the Defendant Company has sold the whole floor of which the premises is a portion. It will be appreciated that the Endorsement of the Claim by the Plaintiff asks for a declaration that the Company meaning the Partnership Company is entitled to remain in possession of the premises. Thus whatever entitlement there be it is only an entitlement of the partnership business. It is also appreciated that as long ago as July 1971 there was an intention on the part of both partners to dissolve the partnership. No disclosure as to what step was taken in preparation for the dissolution on the part of the Plaintiff who is at all times the managing partner.

6.  In my opinion, once the partners agree to dissolve the partnership the partnership will no longer be in existence. Indeed, pending a final settlement, the partnership, to put the Plaintiff’s case at its highest, is still entitled to an interest in land. But that interest in land, if it is significant at all, is only for a monetary value. There is no question of the partnership continuing. There is no question of the partnership goodwill. Consequently there is no question of any irreparable damage that the partnership cannot be compensated in monetary terms. It is a cardinal principle in matters of an injunction that the Plaintiff must make out a prima facie case, that unless the injunction is continued irreparable damage will be done to the Plaintiff.

7.  On the facts as disclosed by the Affidavits before me, I am of the opinion that the Plaintiff has not made out such a case of such irreparable damage. Accordingly, the application of the Plaintiff is dismissed, the ex parte Injunction obtained is discharged and there shall be costs to the Defendant Company with a certificate for counsel.

Robert Tang (H.H. Lau & W.S. Lo) for Plaintiff

Samuel Leung (Edmund Cheung & Co.) for Defendant

Oral judgment reduced into writing.