Tamco Electrical & Electronics (Hong Kong) Ltd. v. Ng Chun Fai Stephen and Others
Read the full judgment text of CACV 174/1992 on BabelCite. This Court of Appeal judgment was delivered on 30 April 1993.
1. This is an appeal by the 1st defendant in this action ("the appellant") against the refusal of Saied J. on 20th October 1992 to suspend the operation of a number of mandatory orders made by Ryan J. on 9th October 1992 against the appellant on the ex parte application of the plaintiff ("the respondent"); the position on 20th October 1992 was that the appellant had not complied with these mandatory orders , although he did do so on 21st October 1992 after Saied J. had refused to suspend their o
Cited by 3 cases
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CACV000174/1992 Headnote Ex parte mandatory Anton Piller type orders requiring defendants to perform acts forthwith - requirement for clarity, to enable defendants to understand, without legal advice, what is required to be done - duty of solicitors and counsel for the plaintiff as regards form of order put before Judge hearing ex parte application - courts should not allow pendulum to swing too far in favour of plaintiffs in granting Anton Piller orders - comments on nature of "consent" given by defendants required to give access to plaintiff's representatives to "enter and search" defendant's premises under Anton Piller order - guidance on procedure for applying to suspend vary or discharge ex parte mandatory orders. Held (by Court of Appeal): the ex parte mandatory orders made by the Judge were oppressive unreasonable and unjustified; they went much further than the justice of the case required. Appeal allowed. Mandatory orders and order for costs against defendants set aside. IN THE COURT OF APPEAL 1992, No.174 ________________
________________ Coram: Hon. Macdougall and Litton JJ.A., Godfrey, J. Dates of hearing: 10 February and 23 March 1993 Date of handing down of judgment: 30 April 1993 ______________________________________ J U D G M E N T O F T H E C O U R T ______________________________________ Godfrey, J.: 1. This is an appeal by the 1st defendant in this action ("the appellant") against the refusal of Saied J. on 20th October 1992 to suspend the operation of a number of mandatory orders made by Ryan J. on 9th October 1992 against the appellant on the ex parte application of the plaintiff ("the respondent"); the position on 20th October 1992 was that the appellant had not complied with these mandatory orders, although he did do so on 21st October 1992 after Saied J. had refused to suspend their operation. 2. It became apparent, at an early stage of the hearing of this appeal, that the proceedings below had taken an unsatisfactory course and that the justice of the matter required this court carefully to investigate, from the beginning, what had happened and what went wrong. By the time the hearing before us was concluded, it had further become apparent that the orders made below could not be allowed to stand, and that the present case might afford this court an opportunity of giving some guidance to those seeking in the future to apply for (and subsequently to resist) the making of ex parte mandatory orders. Accordingly, we said at the conclusion of the hearing that we would take time to consider our judgment. This is that judgment. 3. The respondent is a distributor of commercial and industrial electrical products in Hong Kong. The appellant was employed by the respondent as a branch manager from 1st April 1986. He became a director of the respondent with effect from 3rd July 1989. He was dismissed on 27th August 1992, the respondent alleging that he had been guilty of serious misconduct and breaches of duty. On 4th September 1992, the appellant, by his solicitors, denied any misconduct and alleged that he had been wrongfully dismissed. The respondent did not accept this; moreover, on further investigation, the respondent came to the conclusion that the appellant had operated, in conjunction with the other defendants in the action, a scheme to defraud the respondent. In these circumstances, the respondent determined to institute proceedings against the appellant. The respondent concluded that there was a real risk that if the defendants, including the appellant, were to be given notice of the respondent's intentions, they would take steps to conceal or dispose of any records they might have concerning their dealings with the respondent. The respondent concluded also that there was a real risk that any judgment it obtained in the intended proceedings would remain unsatisfied unless it were able to obtain protection against that possibility. 4. Accordingly, on 9th October 1992, the respondent made application to a judge in Chambers, Ryan J., for ex parte relief. 5. The application was successful. Ryan J. made an order ("the Ryan order") in the following terms:-
6. On the same day, 9th October 1992, the writ in the action was issued. It was endorsed with a general endorsement from which it appeared that the following claims were made against the defendants:-
7. Later on the same day, 9th October 1992, the respondent's solicitors tried, unsuccessfully, to serve the appellant with the Ryan order. 8. On 12th October 1992, the appellant's solicitors told the respondent's solicitors that they were prepared to accept service of process on the appellant's behalf and asked for the writ of summons as soon as possible. 9. On the same day, 12th October 1992, the respondent's solicitors advised the appellant's solicitors of the making of the Ryan order and sent them a copy. They said they had been unable to effect personal service upon the appellant and would be obliged by the appellant's solicitors bringing the Ryan order to his notice immediately. They also enclosed by way of service the endorsed writ and stated that they looked forward to receiving the appellant's solicitors' endorsement confirming acceptance of service on behalf of the appellant. 10. On 15th October 1992, the respondent's solicitors served on the appellant's solicitors a summons for continuance of the relief granted by the Ryan order and inquired if the appellant was prepared to permit entry to the premises mentioned in paragraph 4 of the Ryan order. 11. On 16th October 1992, the appellant's solicitors telephoned the respondent's solicitors indicating that counsel had been retained to appear on behalf of the appellant on the summons, issued, in accordance with paragraph 11 of the Ryan order, to be returnable before Mortimer J. on 19th October 1992. 12. The appellant's solicitors indicated that counsel would be applying for the summons to be adjourned for argument and for certain parts of the Ryan order to be suspended in the meantime. The appellant's solicitors did not then identify which parts of the Ryan order were in dispute but did indicate that the appellant did not intend to file any evidence in this regard. The appellant's solicitors said that they needed to speak to counsel before confirming the basis of the appellant's application for a discharge of parts of the Ryan order. 13. Later on 16th October 1992, the appellant's solicitors telephoned the respondent's solicitors and indicated that the appellant would be prepared to give access to the premises in question at 3 p.m. on Monday afternoon, 19th October 1992. The respondent's solicitors said that this was not acceptable and asked for access on Saturday morning, 17th October 1992. 14. Still later, the appellant's solicitors telephoned the respondent's solicitors to indicate that a representative would be available to give access to the premises at 11 a.m. on Saturday, 17th October 1992, but that the appellant would not personally be present. According to the respondent's solicitors, they drew to the attention of the appellant's solicitors the terms of paragraph 6 of the Ryan order and asked for confirmation from the appellant whether there were any other premises in which any of the documents or classes of documents, goods or articles specified in the order were or had been stored; the appellant's solicitors said that they had no instructions on this point; and the respondent's solicitors asked them to take instructions so that the respondent could then decide whether or not to accept the offer made. (This version of what was said is not accepted by the appellant's solicitors; but, in any event, the negotiations for access were aborted.) 15. On 19th October 1992, in the circumstances mentioned above, the inter partes summons came on for hearing before Mortimer J. This was the first return date of this inter partes summons. It was listed, according to the local practice, for not more than 30 minutes. After some debate, the judge decided to adjourn the hearing until the next day, 20th October 1992, when more court time would be available. 16. So, on 20th October 1992, the inter partes summons came on for hearing again. But not before Mortimer J. It came on for hearing before Saied J. It took the best part of a day. 17. What took place on 20th October 1992 before Saied J. has been, unfortunately, the subject of differences of recollection on the part of those present. But this much appears to be clear; that the appellant asked the judge to suspend the operation of a number of paragraphs of the Ryan order (although the appellant had made no formal application for that relief); the judge refused to accede to this request; the appellant did not apply for an adjournment of the hearing of the inter partes summons; the judge acceded to the respondent's request for "continuation" of the Ryan order; and the judge made an order (including, as will be seen, an order for the costs of the hearing before him to be paid by the appellant to the respondent, such costs to be taxed and paid forthwith), in the respondent's favour. 18. The order made by Saied J. ("the Saied order") was in the following terms:-
19. On 21st October 1992, the appellant made an affirmation in order to comply with the relevant paragraphs of the Ryan order. In so far as this affirmation was made more than 7 days after the date of service of the Ryan order, it was out of time; at any rate, that is so if the date of service is taken to be any date earlier than 14th October 1992. In so far as the appellant failed to comply in time with the Ryan order, he was arguably in contempt of that order. 20. The appellant's object in this appeal, as we understand it, is to obtain an order from this Court which will safeguard him against the risk of any proceedings for contempt based on his alleged non-compliance with the mandatory provisions contained in the Ryan order; and to have set aside the order for costs made against him in the Saied order. Although the relevant provisions of the Ryan order are now spent (because the appellant has complied with them) we are of the opinion that these points are sufficient (just) to justify this Court in entertaining this appeal, particularly since, in our judgment, so many things went wrong in the course of the proceedings below as to leave the appellant with a justifiable sense of grievance. 21. In order to explain this we must now retrace the history of these proceedings set out above. 22. We start with the application which the plaintiff made ex parte to Ryan J. on 9th October 1992. 23. This application was made by counsel, instructed by the respondent's solicitors to make it. Both counsel, and counsel's instructing solicitors, bear a very heavy responsibility in such circumstances. It is of the utmost importance to the administration of justice that such responsibilities be discharged properly. 24. In Thomas A. Edison Ltd v Bullock (1913) 15 CLR 679, a distinguished Australian judge, Isaacs J. (later to become Governor-General) put the matter in this way at p.681:-
In our jurisdiction, this "most serious responsibility" is borne by the party's legal advisers; they owe, of course, a duty to their client, but they owe an overriding duty to the court. The court itself bears a heavy responsibility, which it must discharge in unusual circumstances, without the benefit of adversary argument, and for just this reason the applicant's solicitors and counsel come under a duty to assist the judge so as to ensure, so far as possible, that the court does not make an order which perpetrates an injustice against the absent party. 25. But twenty years or so ago, practitioners in England became aware of two potential evils which the English court had hitherto not found a way to redress and devised ways to redress them. 26. One of these evils became apparent because of the growth of commercial piracy in the intellectual property field. The owner of a copyright, patent, or trademark would find himself undercut, or his reputation damaged, by the operations of some dishonest person blatantly infringing the owner's rights. It was imperative, if those rights were to be properly protected, for the infringers' misconduct to be stopped as soon as possible. But an inter partes application for an interlocutory injunction, in this sort of case, ran a real risk of being frustrated; because an infringer of this sort would be likely to destroy, or attempt to destroy, evidence which would be needed at the trial of the action. To meet this difficulty the court was persuaded to make orders in what is now familiarly called the "Anton Piller" form. An application for such an order has to be made ex parte, not (or not only) because of urgency, but because of the necessity to do what had hitherto been thought to be the unthinkable, that is to say, to take the respondent by surprise. If the element of surprise is lost, the remedy is useless. 27. The other evil noticed at about the same time was this. In the ordinary way, a plaintiff who succeeded in his action could expect to reap the fruits of the judgment in his favour. Of course, he had always to accept the risk of the defendant's insolvency. But there was another risk. What if the defendant, though solvent, was minded to dissipate his assets in order to prevent the plaintiff from reaping the fruits of his judgment? It had for a long time been thought to be the law in England that the court was powerless to intervene to protect the plaintiff against this risk, but eventually the court was persuaded to make orders in what is now familiarly called the "Mareva" form. Again, an application for such an order had to be make ex parte, not (or not only) because of urgency, but in order to take the respondent by surprise. Without the element of surprise, such an attempt to protect the plaintiff against the risk of dissipation by the defendant of his assets would be much more likely to provoke than to prevent such a thing happening. 28. And so these wholly exceptional orders were devised for use in rare and extreme cases. They were certainly not devised to be joined together (piling Piller on Mareva) and used as a daily and commonplace incident of ordinary commercial litigation. However, in all common law jurisdictions, applications for the grant of relief in the Anton Piller form, or for the grant (or continuation or discharge) of relief in the Mareva form, seem to occupy a substantial proportion of the time of judges dealing with commercial cases. They are powerful and valuable weapons against fraud or dishonesty. But the more powerful the weapon, the more important it is that the user should take care about its handling. And these remedies are extremely powerful. But in practice the plaintiff tells the judge (who is given only the briefest time to consider the matter) that the defendant is a foreigner, or that he is stealing or has stolen the plaintiff's intellectual property; and before he can blink, the defendant finds his bank accounts frozen, or his premises invaded and ransacked by the plaintiff's solicitors, or both. After the order is executed (particularly in the case of an order in the Anton Piller form) almost all the damage is done. Plainly no such order should ever be made unless necessary in the interests of justice; nor in terms wider than necessary to achieve the legitimate object of the order; nor unless there is real reason to believe that without such an order the respondent would disobey an injunction for the preservation of the evidence the destruction of which would defeat the ends of justice. 29. There are a number of recent authorities (not cited to us), to which the attention of the profession needs to be drawn, which demonstrate a proper judicial concern for the protection of defendants on the receiving end of orders such as those sought and made in the present case. The authorities are Columbia Picture Industries Inc. v Robinson [1987] Ch. 38; Lock International Inc. v Beswick [1989] 1 WLR 1268; Tate Access Floors Inc. v Boswell [1991] 2 WLR 304; Bhinji v Chatwani [1991] 1 WLR 989, and Universal Thermosensors Ltd v Hibben [1992] 1 WLR 840. 30. In Columbia Picture Industries Inc. v Robinson [1987] Ch. 38, Scott J. said that the purpose of an Anton Piller order was to preserve evidence that a defendant, apprised of impending litigation, would be likely to conceal or destroy so that it would not be available as evidence supporting the plaintiff's cause of action; that it was an order obtained in secrecy requiring the defendant to permit his business premises (and often his home as well) to be entered and searched and, since it was frequently accompanied by a Mareva injunction, it could have the effect that the defendant's business would be destroyed without the defendant being in a position to apply to the court for the order to be set aside before it was executed; that, therefore, applicants for an order of such severity were under a strict duty to make to the court a full and frank disclosure of all matters that could be relevant and, having obtained the order, neither to act oppressively nor abuse their power in executing the order. The judge held that a decision whether or not an Anton Piller order should be granted required a balance to be struck between the plaintiff's need that the remedies allowed by the law for the breach of his rights should be attainable and the requirement of justice that the defendant should not be deprived of his property without being heard. He said that the practice of the court had allowed the balance to swing "much too far" in favour of plaintiffs and that Anton Piller orders had been too readily granted and with insufficient safeguards for respondents. The draconian and essentially unfair nature of Anton Piller orders from the point of view of a defendant against whom they are made required, in the judge's view, that they be so drawn as to extend no further than the minimum extent necessary to achieve the purpose for which they are granted, namely the preservation of documents or articles which might otherwise be destroyed or concealed. He said that anything beyond that was, in his judgment, impossible to justify. 31. In Lock International Plc. v Beswick [1989] 1 WLR 1268, Hoffmann J. held that there must be proportionality between the perceived threat to the plaintiff's rights and the remedy granted. The fact that there was overwhelming evidence that the defendant had behaved wrongfully in his commercial relationships did not necessarily justify an Anton Piller order. The making of an intrusive order ex parte even against a guilty defendant is contrary to the normal principles of justice and can only be done whether there is a paramount need to prevent the denial of justice to the plaintiff. The judge reminded himself of what Scott J. had said in the Columbia Picture Industries case, and said that the growth in the Anton Piller jurisdiction, from the original invention of such orders in 1974 as the ultimate weapon against fraudulent copyright pirates, to their widespread use at the present day, had been described by the judge in that case; it was pointed out that such orders potentially involved serious inroads on principles which bulk large in the rhetoric of English liberty, such as the presumption of innocence, the right not to be condemned unheard, protection against arbitrary searches and seizures and the sanctity of the home. The judge said that his common experience of the evident surprise of counsel whose applications he had refused led him to endorse Scott J.'s observation that the practice of the court had allowed the balance to swing "much too far" in favour of plaintiffs and that Anton Piller orders had been too readily granted and with insufficient safeguards for respondents. He reminded himself of the decision in the Anton Piller case itself, reported at [1976] Ch. 55, in which it had been held that in most exceptional circumstances (emphasis added) where plaintiffs had a very strong prima facie case; actual potential damage to them was very serious; and there was clear evidence that defendants possessed vital material which they might destroy or dispose of so as to defeat the ends of justice before any application inter partes could be made, the court had inherent jurisdiction to order defendants to permit plaintiffs' representatives to enter defendants' premises to inspect and remove such material; and that in such very exceptional circumstances (emphasis added) the court was justified in making such an order ex parte. He refused to accept that these stringent requirements had been relaxed. He referred to a specific class of case in which Anton Piller orders were frequently sought. These (like the present case before this court) were actions against former employees who had joined competitors or started competing businesses of their own. He said that he had learned to approach such applications with a certain initial scepticism. There was, he said, a strong incentive for employers to launch a pre-emptive bid to crush the unhatched competition in the egg by causing severe strains on the financial and management resources of the defendants or even withdrawal of their financial support. Whether the plaintiffs had a good case or not, the execution of the Anton Piller order might leave the defendants without the will or the money to pursue the action to trial in order to enforce the cross-undertaking in damages. He pointed out that some employers seemed to regard competition from former employees as presumptive evidence of dishonesty. He said that even in cases in which the plaintiff had strong evidence that the employee had taken what was undoubtedly confidential information, such as a list of customers, the court must employ a graduated response. The fact that there was overwhelming evidence that the defendant had behaved wrongfully in his commercial relationships did not necessarily justify an Anton Piller order. In many cases, he said, it would be sufficient to make an order for delivery up of a plaintiff's documents to his solicitors, or, in cases in which the documents belonged to the defendant but might provide evidence against him, an order that he preserve the documents pending further order or allow the plaintiff's solicitors to make copies. The more intrusive orders allowing searches of premises or vehicles required a careful balancing of, on the one hand, the plaintiff's rights to recover his property or to preserve important evidence against, on the other hand, violation of the privacy of a defendant who has had no opportunity to put his side of the case. It was not merely that the defendant might be innocent. The making of an intrusive order ex parte even against a guilty defendant was contrary to normal principles of justice and could only be done when there was a paramount need to prevent the denial of justice to the plaintiff. The absolute extremity of the court's power was to permit a search of the defendant's dwelling house, with the humiliation and family distress that that frequently involved. 32. In Tate Access Floors Inc. v Boswell [1991] 2 WLR 304, Sir Nicolas Browne-Wilkinson V-C held that it would normally only be proper for the court to make an ex parte order in the Anton Piller form for the recovery of property belonging to the plaintiffs without any related discovery as to documents (previously, many such orders had been made, but without regard to the privilege against self-incrimination). The judge felt himself bound to hold that where the defendant's privilege against self-incrimination might arise, the making of an ex parte order for the seizure of documents from that defendant's premises was improper. That accorded with the judge's own sense of justice; if a man was entitled to refuse to produce documents, it would be strange if the law permitted an order to be made which forced him to admit others to his house for the purpose of seizing those documents. He said that Anton Piller orders were only to be made when there was a strong prima facie case of dishonest conduct by the defendants which indicated that they would be likely to destroy the evidence of their fraud. In such circumstances it was almost inevitable that the judge asked to make the order would consider that there was a real risk of prosecution for a criminal offence. And if, as was likely all too often to be the case, there was a real risk of a conspiracy charge, the judge would not be able to make an Anton Piller order and in consequence vital evidence would be destroyed. He said that, to a large extent, the Anton Piller jurisdiction would become incapable of being exercised. He invited early consideration of the problem by the legislature. (The judge's view is now supported by AT & T Istel Ltd v Tully [1992] 3 WLR 344; see especially per Lord Templeman at p.352D.) 33. In Bhinji v Chatwani [1991] 1 WLR 989, Scott J. again called attention to the nature of an Anton Piller order. He said it was fundamental to the theory of such orders that a civil court in civil proceedings had no power to give one citizen the right to enter a house or premises of another citizen. The orders were in personam orders directed to the defendants. The defendants were ordered to allow entry and to allow search. The plaintiffs' right and their solicitors' right to enter and search is derived on this theory of the law from the defendants' permission given to them to do so. It is not derived from the power of the court to confer the right; the court did not have that power. He noted that the subtlety of the distinction did little credit to the law and that a consent to enter given under threat of committal for contempt was not true consent at all. He said that Anton Piller orders stood at the extremity of the court's jurisdiction. They involved the court in the hypocrisy of pretending that the entry and search are carried out because the owners of the premises have consented to it. They imposed on plaintiffs' solicitors the almost impossible task of describing fairly to non-lawyers the true effect and nature of the order. They present respondents with orders of great complexity and jurisprudential sophistication and give little time for decisions to be taken as to the response to be made to them. They vested the plaintiff, one side in what is usually highly contentious litigation, with the trappings of apparent administrative authority to carry out the search. All these features, he concluded, made Anton Piller orders special. 34. In Universal Thermosensors Limited v. Hibben [1992] 1 WLR 840, Sir Donald Nicholls V-C commented that the Anton Piller procedure lent itself all too readily to abuse, as had been highlighted more than once; and he referred to the judgments of Scott J. in Columbia Picture Industries Inc. v. Robinson (above) and of Hoffmann J. in Lock International Plc. v. Beswick (above). He expressed himself dissatisfied with the forms of order in use at that time and said that when making Anton Piller orders judges should give serious consideration to the desirability of providing, by suitable undertakings and otherwise (a) that the order should be served and its execution should be supervised by a solicitor other than the member of the firm of solicitors acting for the plaintiff in the action; (b) that he or she should be an experienced solicitor having some familiarity with the workings of Anton Piller orders and with judicial observations on the subject; (c) that the solicitor should prepare an original report on what occurred when the order was executed; (d) that a copy of the report should be served on the defendants; (e) that in any event and within the next few days the plaintiff must return to the court and present that report at an inter partes hearing, preferably to the judge who made the order. The judge accepted that this procedure would add considerably to the costs of executing an Anton Piller order. The plaintiff would have to be responsible for paying the fees of the solicitors in question, without prejudice to a decision by the court on whether ultimately those costs should be borne in whole or in part by the defendant but, he said, it must be appreciated, and it certainly was his view, that in suitable and strictly limited cases (emphasis original) Anton Piller orders furnish courts with a valuable aid in their efforts to do justice between two parties. Especially was this so in blatant cases of fraud. It was important, therefore, that those orders should not be allowed to fall into disrepute. If further steps were necessary to prevent that happening, they should be taken. If plaintiffs wish to take advantage of this truly draconian type of order, they must be prepared to pay for the safeguards experience had shown were necessary if the interests of defendants were fairly to be protected. 35. With these powerful judicial observations in mind, we turn to the course which matters took in the case presently before this Court, in which, it will be remembered, charges of fraud and conspiracy are made against the defendants. 36. We are of the opinion that the form of order which Ryan J. was asked to make on 9th October 1992, and which he did make, was in many respects profoundly unsatisfactory. 37. We draw attention to a number of defects and deficiencies in the Ryan order.
38. In our judgment, the mandatory parts of the Ryan order were oppressive, unreasonable, and unjustified. The order went much further, in the respects we have indicated, than the justice of the case required; and it gave the defendants no clear idea of precisely and distinctly what it was they had to do in order to comply with it. We regret to say that, in our judgment, the plaintiff's solicitors and counsel should not have put a form of order such as this before the judge. And, with all respect to him, we fear that the judge failed to read with sufficiently critical an eye the form of the order he was being asked to make. 39. However, so far as the mandatory provisions of the Ryan order were concerned, the appellant was given an opportunity to apply for their variation or discharge upon giving 24 hours' notice to the plaintiff's solicitors of his intention so to do. 40. Unfortunately, as we have seen, the appellant did not take advantage of this. He simply failed to comply with the mandatory parts of the order. In so doing, it is certainly arguable that the 1st defendant was in contempt of the Court. A defendant against whom an Anton Piller order is made ex parte can make an urgent application to have the order set aside. He fails to comply with the order at his peril. If his application to set it aside fails, he may be liable to be penalised for his contempt in failing immediately to comply with the order. But this is a risk he must take. He must apply on notice to the defendant for an order to discharge or vary (or, if appropriate, suspend the operation) of the order. Such an application should usually be supported by sworn evidence and should not (though it can) be made ex parte: see Hallmark Cards Inc. v. Image Arts Limited [1977] FSR 150. But the appellant here chose to disobey the order after he became aware of it; and he took no steps to have its operation suspended until the plaintiff's inter partes application came before Mortimer J. on 19th October 1992. Even then, the appellant did not support with evidence his application, informal as it was, for suspension of the operation of the mandatory parts of the Ryan order; though, since his main point was that the order was so vague, and so oppressive, that it should never have been made, this is understandable. 41. Unsurprisingly, matters continued to go wrong. 42. On 20th October 1992, at the hearing before Saied J, the appellant submitted, in our judgment rightly, that the Ryan order was too wide and too ambiguous. The judge, equally rightly, indicated that this point could have been taken earlier on an application to discharge the order. The judge was not happy about the matter. He protested against the appellant's attitude, in coming out of the blue with the other side not knowing what the appellant was going to say. He asked why there was no evidence from the appellant. He was told that the appellant's contention was that as a matter of law the order was not rightly made. 43. As we have seen, Saied J., in the end, ordered that the Ryan order "be continued until trial or further order". He preserved the right of the appellant to apply to discharge or vary the order but only on giving 48 hours' notice instead of 24 hours' notice to the plaintiff's solicitors of his intention so to do. And, no doubt incensed by the pigheaded attitude of the appellant, he ordered the costs of the day to be paid by the appellant to the respondent and to be taxed and paid forthwith. 44. This order, in our judgment, was if anything even more profoundly unsatisfactory than the Ryan order. So far as the mandatory parts of the Ryan order was concerned, there is no question of "continuing" that order. An order granting an injunction in negative terms may of course be continued if, but for an order continuing the injunction, it would otherwise cease to have effect. But a mandatory order requiring an act to be done on or before a certain time cannot be "continued". Either it is complied with; or it is not. If it is, that is the end of the matter. If it is not, then the party who has failed to comply with it might well be held to be in contempt of the court. But the order requiring the appellant to pay the respondent's costs, to be taxed and paid forthwith, was in our judgment quite unjustified. We have to say, again with all respect to the judge, that in our judgment Saied J. too should have looked at the Ryan order with a far more critical eye, and, instead of embarking upon the substantive hearing of the matter, as he did, he should have ascertained whether the defendants wished to have more time to lodge evidence in opposition to the respondent's inter partes summons and to have adjourned the inter partes summons to a date to be fixed with directions for the filing of evidence by the defendants in answer and by the respondent in reply, if that was appropriate; and to have recorded the fact that the defendants did not intend to adduce evidence in opposition, if that was indeed the position. As regards the appellant's (1st defendant's) application for a suspension of the operation, or discharge or variation, of the mandatory parts of the Ryan order, Saied J. might have dealt with it on the oral application of the 1st defendant's counsel if but only if he was satisfied that, without a summons, the scope of the application was sufficiently clear to both the court and the plaintiff and that so proceeding would cause no injustice to the plaintiff. (A suspension of the operation of a mandatory order is a very different thing from its variation or a discharge. Suspension is what counsel Mr. Chain referred to before us as "first aid": to stop time running, so that the 1st defendant could adduce evidence in support of the application to vary or discharge.) Alternatively, the judge could have refused to deal with the 1st defendant's application without a formal summons and directed that the summons to be issued for suspension/variation/discharge of the mandatory orders be returnable on the same day as the date fixed for the adjourned hearing of the inter partes summons. (It will be appreciated that by 20th October 1992 the element of surprise which this sort of order is meant to achieve had long since been lost, so that it would have been improper for Saied J. to impose fresh mandatory orders on the applicant, as in theory he could have done.) 45. But all this is being wise after the event. We have some sympathy for the appellant; for the respondent; for their respective legal advisers; and for Ryan J. and Saied J; all of whom appear to have been less than completely familiar with the principles to which we have adverted in this judgment and with the appropriate procedure to be adopted so as to ensure their proper application. 46. In our judgment, justice will be done if we set aside the mandatory parts of the Ryan order and the Saied order. Ryan J. and Saied J. had of course a discretion whether or not to make the orders they were asked to make. But in making these mandatory orders in the form in which they were made in this case we are satisfied they were plainly wrong. We will leave counsel to agree on the form of order which may be necessary to give effect to this judgment; in case of difficulty, the case will have to be restored to this Court's list for mention so that the difficulty may be resolved. 47. The order as to costs made by Saied J. will also be set aside. This Court does not think fit to make any order as to the costs of the proceedings below or as to the costs of this appeal.
Representation: Mr Benjamin Chain (M/s Chui & Lau) for Appellant/1st Defendant. Mr Nigel Kat (M/s Baker & McKenzie) for Respondent/Plaintiff. |
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