LI SIN MAN, SELINE AND OTHERS v. LI SHU CHUNG AND OTHERS

HCA 1831/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1831 OF 2010

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REASONS FOR DECISON

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1.  Mr Lee Sai Nam (“the Father”), who died at the age of 82 in August 2014, was a successful Chinese entrepreneur. He was married to Madam Lee Kau Mui (“the Mother”), and they were the parents of: (i) Mr Li Shu Chung Ken (“Ken”); (ii) Mr Lee Shu Hang Richard (“Richard”); and (iii) Madam Li Sin Man Seline (“Seline”).

2.  There are many sets of outstanding litigation between the Father (together with Richard and Seline) and Ken over a range of matters, including the shareholdings in a number of family companies and the funds of a family business.

3.  In this action, the Father, Richard and Seline complain that Ken, together with his associates, engaged an army of rascals or debt collectors to launch a massive scheme of assault, intimidation and harassment against them from late November to mid-December 2010.

4.  On 15 December 2010, DHCJ L Chan (as he then was) granted an ex parte injunction (“the Injunction”) to restrain Ken and his associates from:

(i) assaulting, threatening or pestering the Plaintiffs and their families;

(ii) communicating with the Plaintiffs directly; and

(iii) coming near to the Plaintiffs within 30 metres without reasonable excuse.

5.  Subject to certain variations, the Injunction was continued in the return date hearing before Mr Recorder A Chow (as he then was) on 24 December 2010.  The learned judge also gave directions for the filing of affidavits for the substantive hearing of the inter parte summons for the continuation of the Injunction.

6.  On 17 May 2011, DHCJ L Chan made a consent order to continue the Injunction until trial of this action or further order of the court.

7.  In this summons dated 16 January 2015, Ken applies to set aside or to vary the terms of the Injunction.  Ken claims that due to the Injunction, he is unable to live in the family residence thereby suffering prejudice.

8.  In the hearing on 17 June 2015, I dismissed Ken’s application and I now give my reasons.

Background

9.  The Father founded and built up the Luen Fat group of companies (“the Group”) which manufactured and traded watchbands.  The history of the Group dated back to the 1950s.

10.  The Lee or Li family is a traditional one and the Father was the patriarch.  Ken, Richard and Seline all worked for the Father in the Group.

11.  The family used to live together in the family residence which is a 3-storey semi-detached house located in a prestigious residential area in Kowloon Tong (“the Family Residence”).

12.  The Family Residence has all along been held by a corporate vehicle named Roteland Development Ltd (“Roteland”).

13.  Under the Father’s arrangement, Richard and Ken, acting through their corporate vehicles, respectively hold 2/3 and 1/3 shareholdings in Roteland.  The current directors of Roteland are Richard, Ken and Allied Evert Holdings Ltd (a corporate vehicle owned by the Father).

14.  With the consent of the Father, Ken was allowed to occupy the 3^rd floor of the Family Residence when he was in Hong Kong.  When Ken’s British wife and children (who lived in and grew up in England) visited Hong Kong, they were also allowed to stay on the 3^rd floor of the Family Residence.

15.  Since around late 2008, there have been serious disputes between Ken and the Father about the ownership of the various companies in the Group and the moneys or funds of the Group.

16.  On 11 June 2009, the Father, with Seline’s assistance, attempted to inspect the accounting records of the Group.  During the inspection, Seline claimed that Ken violently assaulted her.  She was hospitalised and her injury was well-documented in the medical records.

17.  The Father then took out the following legal actions against Ken:

(i) on 5 July 2009, the Father commenced HCCW 497/2009 seeking to wind-up one of the major companies in the Group, namely Luen Tat Watch Band Manufacturer Ltd (“Luen Tat”); and

(ii) on 6 August 2009, the Father commenced HCA 1711/2009 against Ken seeking the return of the shares in Luen Tat and another company in the Group named Hong Kong Pak Tat Trading Co (“Pak Tat”).

18.  The Mother and Richard claim that at around the same time, Ken left the Family Residence on his own volition.

19.  Shortly after he left the Family Residence, in around October 2009, Ken arranged a person named Kwong Ka Lok (“Kwong”), whom he says was his tentant, to stay at the 3^rd floor of the Family Residence which was previously occupied by Ken.  The family members living in the Family Residence complained that, with a view to harass them and to pressure the Father to drop the pending legal proceedings, Kwong had generated excessive noise and vibration and a substantial amount of rubbish in the Family Residence.  They also alleged that Kwong had sneaked into the 2^nd floor of the Family Residence which was occupied by Richard and his family.

20.  The Father and Richard passed the resolutions in order for Roteland to take legal proceedings against Ken and Kwong.  However on 10 March 2010, Ken commenced HCA 351/2010 seeking to challenge such resolutions passed by the Father and Richard.  Shortly thereafter in June 2010, Richard commenced HCA 853/2010 against, inter alia, Ken and Kwong.

21.  On 11 March 2011, Ken discontinued HCA 351/2010 and was ordered to bear the costs of the whole action.

22.  During the period from late November to mid-December 2010, the Plaintiffs herein (the Father, Richard and Seline) complained that Ken, together with his associates, engaged a team of rascals who purported to act as debt collectors to launch a massive scheme to harass, assault and intimidate them with express threats of physical violence.  These rascals gathered at the entrance of the Family Residence to wait for the Father, Richard and Seline and they also threatened that action would be taken against the latter “in the name of God”.

23.  By reason of these complaints, DHCJ L Chan granted the Injunction on 15 December 2010.  Thereafter, Ken commenced HCCW 302/2011 asking the Father and Roteland to buy up his shares in Roteland, or alternatively to wind-up Roteland on just and equitable grounds.

24.  Ken was not successful in various legal proceedings against the Father.  In HCCW 236/2011 and HCMP 1928/2011, Harris J accepted the Father’s case and made an order to wind-up Pak Tat as per the Father’s claim.  In HCCW 497/2009, Ken was eventually forced to abandon his objection to the Father’s application to wind-up Luen Tat and Ken had been ordered to pay for the costs of the petition.  Furthermore, Ken was also the loser in most of the contested interlocutory applications (see: the summary table in §57 of the Richard’s Affirmation filed on 26 March 2015 (“the Summary Table”)).

25.  Despite the Injunction, the Plaintiffs complained that Ken had kept on issuing telephone messages, notes and letters to harass them, the contents of which carried offensive accusations as well as express threats coupled with sarcastic remarks.

26.  In the telephone message dated 29 July 2013, Ken threatened that if the Father repented, he would be allowed to have a way out, but Richard, who was the ultimate culprit, would not be forgiven.

27.  Within a month after the said telephone message, Richard was brutally chopped by a masked man.  He was severely wounded.

28.  The trial of HCA 1711/2009 took place on various dates from March to August 2014 before DHCJ S Leung.  The Mother, Richard and Seline as well as a few relatives working for the Father in the Group testified against Ken’s case.  In the circumstances, there is no question that Ken’s relationships with all the other family members have broken down completely.

29.  At the trial of HCA 1711/2009, the Father was already 82 years old.  Shortly after the Father finished giving evidence, he was diagnosed as suffering from terminal cancer.  He passed away in August 2014 soon after the trial was concluded.  The judgment of the case was still pending at the date of the hearing.

30.  The Mother (who was an elder in her late 70s) was deeply saddened by the death of the Father.  In order to comfort and to take care of the Mother, Seline and her children accompanied the Mother on a daily basis.

31.  A few months after the death of the Father, Ken issued a letter dated 19 November 2014 alleging that he and his family intended to move back to live on the 3^rd floor of the Family Residence.

32.  Upon receiving such letter, Richard sought the view of the Mother.  Obviously, the Mother was worried and frightened by such request.  In the letters dated 28 November and 23 December 2014, Ken had been asked to explain why he was suddenly keen to move back to the Family Residence, and to indicate whether he was willing to provide undertaking agreeing not to cause nuisance, assault and harassment.

33.  In the reply letter dated 16 December 2014, Ken refused to give such explanation or undertaking.  He only alleged that he enjoyed proprietary interest over the 3^rd floor of the Family Residence.

34.  As indicated in the letter dated 11 February 2015, the Mother, Richard and Roteland, with a view to resolve the matter, agreed for Ken’s children to occupy the 3^rd floor of the Family Residence for genuine residential purposes, so long as they were willing to provide an undertaking not to cause nuisance, assault and harassment.  No reply was made to such letter.

Merits of the application

35.  In this application, Ken applies for the Injunction as between Richard and him be discharged, or alternatively, the terms of the Injunction be varied so that Ken and his family can move back to their home on the 3^rd floor of the Family Residence, or at the very least, Ken can let the 3^rd floor to a tenant agreeable to Richard.

36.  In support of the application, Ken seeks to rely on the following grounds:

(i) the Plaintiffs have not taken any step to prosecute this action for the past 4½ years;

(ii) there is no serious issue to be tried between Richard and Ken because according to the evidence, Richard could not have apprehended infliction of immediate unlawful force;

(iii) the balance of convenience lies in favour of the discharge or variation of the Injunction; and

(iv) there was material non-disclosure on the part of the Plaintiffs.

37.  I see no merit in these arguments.

38.  Firstly, I do not accept that there was inordinate delay on the part of the Plaintiffs in prosecuting the claim against Ken so as to justify a discharge or variation of the Injunction.

39.  The pleadings of this action closed in April 2011.  Before that, Ken took out an unsuccessful discovery application which was dismissed by Master Wolley with costs on 11 May 2011.  On 25 May 2011, Ken took out a notice of appeal against Master Wolley’s decision, which was never prosecuted by Ken.

40.  In light of the multiplicity of actions between the parties, a global CMC took place before Harris J on 25 July 2012.  In the said global CMC, Harris J made the order that, inter alia: (i) HCA 853/2010 be tried together with this action; and (ii) the trial of HCCW 302/2011 to take place after the judgments of HCA 1711/2009, HCA 853/2010 and this action are handed down.

41.  One can see from the above that this action is not an isolated dispute.  This action forms part and parcel of the plethora of litigations between Ken and other family members.

42.  As shown in the Summary Table, since late 2010, the Plaintiffs have been fighting 8 sets of litigation in Hong Kong alone involving no less than 10 hotly contested interlocutory applications.  So far, Ken has lost in all the concluded actions.

43.  In fact, the parties have been heavily engaged in the more important litigation, namely HCA 1711/2009, in the past one or two years.  The trial lasted for 20 days from March to August 2014 involving 16 witnesses, 1 Queen’s Counsel, 2 Senior Counsel, 3 Junior Counsel and 3 teams of solicitors.

44.  Apart from the said litigation against Ken, the Plaintiffs have also been fighting 5 sets of litigation started by the liquidators of Luen Tat against Ken and themselves (see: the summary table in §58 of Richard’s Affirmation.

45.  In such circumstances, I agree with Mr Wong, SC, counsel for the Plaintiffs, that all the relevant parties were overwhelmed and overburdened by different litigations in the past few years.  That provides some justification for the Plaintiffs not to pursue the present action against Ken in the usual way.

46.  Of all the litigations, the present claim is of lesser concern to the parties as it does not resolve the disputes relating to the ownership of the various companies in the Group and the funds.  It would also be sensible and economical for the parties to await the outcome of HCA 1711/2009.  In the global CMC, Harris J had ordered that HCA 853/2010 be tried together with this action.  The outcome of HCA 1711/2009 may dispose of Ken’s counterclaim for resulting trust in HCA 853/2010, which is to be tried together with the present action.  In fact, the Father’s pleaded case in HCA 1711/2009 is wholly adopted in the pleadings in HCA 853/2010.  Under such circumstances, instead of fighting all the actions concurrently, the parties were justified in focusing their time and resources on HCA 1711/2009 first and to await its outcome.

47.  This is not a case that nothing has happened between the parties in the past few years.  On the contrary, the parties were always engaged in various litigations and so I do not accept that the Plaintiffs are guilty of inordinate delay.

48.  Secondly, I do not agree that there is no triable issue between Richard and Ken for the reason that Richard could not have apprehended infliction of immediate unlawful force.

49.  As a matter of law, threats which put a reasonable person in fear or apprehension of physical violence can constitute an assault, although the victim did not know when the physical assault may be effected (see: Chang Ming Fan Jacqueline v Zhang Zi Qiang, unreported, HCA 2714/2006, 28 August 2009 at §80, per Recorder A Chan SC (as he then was), citing Wong Wai Hing & Anr v Hui Wai Lee (HCA 2901/1998, 3 September 2000) and Barton v Armstrong [1969] 2 NSWR 451, 455 (Taylor J)).

50.  As pleaded in the Statement of Claim at §11, as a result of the cumulative acts under the alleged unlawful scheme, Richard (as well as the Father and Seline) did suffer intensive fear for their own personal safety and did apprehend imminent unlawful bodily harm.  The factual question as to whether Richard had apprehension of unlawful bodily harm and fear for personal safety is a matter for the trial.

51.  Mr Wou, counsel for Ken, submits that Richard appeared to be calm when the debt collectors gathered at the entrance of the Family Residence on 23 November 2010 (see: Seline’s 1^st Affirmation filed on 15 December 2010).  Further, Seline, in her 1^st Affirmation, did not mention that the abusive and threatening behaviour of the debt collectors was directed against Richard.  Neither did she mention the impact of the alleged behaviour on the health condition of Richard.

52.  Again, I have to reject Mr Wou’s argument. There is evidence in various affirmations showing that assault and threatening behaviour were directed to all the family members including the Father, Richard and Seline (see: §§30 & 32 of Richard’s Affirmation and §7 of the Mother’s Affidavit  filed on 26 March 2015).  Taking into account the alleged abusive and threatening behaviour of the debt collectors, I have reason to believe that Richard did suffer intensive fear for his own personal safety and did apprehend imminent unlawful bodily harm as pleaded in the Statement of Claim.  At least, that should be a matter to be determined at the trial.  Hence, I do not accept that there is no triable issue in respect of the claim between Richard and Ken.

53.  Thirdly, balance of convenience actually favours the continuation of the Injunction.  Taking into account the bitter history of this case and the hatred and hostility within the family, if Ken were to be allowed to occupy part of the Family Residence, even though there may be separate entrances to each floor, there is a real risk that further disputes will occur.  I have reminded myself that there is no evidence to suggest that Ken was responsible for the brutal attack on Richard, nevertheless both Seline and Richard had suffered significant injuries ever since the breaking out of the hostility within the family.  It is also natural for the Mother, Richard and Seline to concern about their own safety if Ken is allowed to move back to the Family Residence, in particular the children of Richard and Seline either live in the Family Residence or would visit the Family Residence regularly. One cannot deny the fact that the relationships and the trust within the family have broken down completely, and so in my judgment, it would be dangerous to lift or vary the Injunction at this stage.  The balance of convenience must lie against disrupting the status quo.

54.  Judging from the circumstances of this case, it seems that the only reason why Ken wants to move back to live in the Family Residence is for financial reason.  According to Ken, he is now retired with no income.   If he is allowed to move back to live on the 3^rd floor of the Family Residence, or to rent it out to a senior staff of Hutchison at $78,000 a month, he can either save the rent for leasing alternative accommodation, or to use the rent he receives from the tenant to support his own living.

55.  According to Richard, Ken owns a luxurious house in England.  He also finds it odd that Ken retired so suddenly.  Without providing further information about his financial condition, I have serious doubt as to why there is a sudden financial need for Ken to raise money for himself.   Furthermore, the Plaintiffs have indicated no objection for Ken’s children to occupy the 3^rd floor of the Family Residence subject to the provision of appropriate undertaking. I understand that Ken’s children have been renting a place to live in Hong Kong.  If they agreed to the Plaintiffs’ proposal, they can save the rent for renting accommodation themselves.  In my judgment, Ken’s refusal to accept the proposal certainly undermines the credibility of his complaint.

56.  In addition, Ken’s complaint on prejudice is only justified if he has the legal interest to occupy the 3^rd floor of the Family Residence.  Before the final determination of the disputes in HCA 1711/2009, HCA 853/2010 and HCCW 302/2011, the Family Residence is still owned by Roteland.  Without any lease or licence granted by Roteland with the consent of its shareholders or the board of directors, Ken has no legal basis to occupy any part of the Family Residence.  Further, if Ken succeeds in establishing proprietary interest in respect of the 3^rd floor of the Family Residence in any of these litigations, he will be fully compensated by way of damages for being deprived of his use or occupation of such premises.

57.  Hence, the balance of convenience certainly favours the maintenance of the status quo.

58.  Fourthly, I disagree that the Plaintiffs were guilty of any non-disclosure which justifies the discharge of the Injunction.

59.  Mr Wou argues that the Plaintiffs had failed to disclosure the following material facts in making the ex parte application for the Injunction:

(i) Ken’s ownership of 1/3 of the Family Residence;

(ii) Ken’s right to occupy, use or otherwise deal with the 3^rd floor of the Family Residence;

(iii) Ken and his family stayed on the 3^rd floor of the Family Residence for almost 20 years between November 1989 and July 2009; and

(iv) Ken had let the 3^rd floor of the Family Residence to Kwong from around October 2009 to March 2010.

60.  Ken’s complaint about non-disclosure was raised for the first time in the skeleton submissions filed shortly before the hearing for this discharge or variation application, which was about 4½ years after the granting of the Injunction by the court.  No explanation has been given by Ken as to why he had not made an application to discharge the Injunction much earlier.  In my judgment, the substantial delay and the absence of explanation for such delay are already sufficient for the court to deny Ken’s application to discharge the Injunction on the ground of material non-disclosure.

61.  In any event, Ken’s complaint has no substance at all.   Taking into account the nature of the Plaintiffs’ claim, it is only logical that, at the time of making of the ex parte application, the main focus of the court was about the personal safety of the Father, Seline, Richard and their families.  Whether Ken had any proprietary interest in the Family Residence was quite irrelevant.  Further, there is no serious dispute that, before the making of the ex parte application, Ken had already left the Family Residence on his own volition.  Ken had indicated no intention to move back to the Family Residence until late November 2013, when the parties were preparing for the trial of HCA 1711/2009 which was due to commence in March 2014.  In my judgment, the alleged material facts, even if established, would not have affected the court in determining whether to grant the Injunction or not.  Hence, I find no merit in the non-disclosure argument.

62.  The determination of the aforesaid issues is already sufficient for the court to dismiss Ken’s application.  I therefore do not consider it necessary to address the Plaintiffs’ argument that Ken does not come to the court with clean hands.  According to the Plaintiffs, Ken had repeatedly breached the terms of the Injunction and so the court should not entertain his discharge or variation application.  In any event, those matters involve serious disputes of fact between the parties, and I do not propose to spend any more time in resolving these factual issues in this interlocutory application.

63.  For the above reasons, I dismissed Ken’s application to discharge or vary the Injunction.

64.  I have indicated to the parties that I would make a costs order nisi in this Reasons for Decision.  This would give the parties a further opportunity to argue on the issue of costs after studying my reasons.

65.  Having considered the facts leading to the present application, I make an order nisi that the costs of this application be the Plaintiffs’ costs in the cause of the action.  The order nisi shall be made absolute 14 days after the date of the handing down of this Reasons for Decision.