LU SHANG CHANG v. KINGROUP LTD.

IN THE COURT OF APPEAL

1995, No. 106
(Civil)

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J U D G M E N T

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Litton, V.-P.:

1. This is an interlocutory matter. We are asked to discharge or vary an order of a single judge of this court made on 25 May 1995, pending the hearing of an appeal at the end of September this year.

2. The applicant before us is the respondent to the appeal and is the landlord of premises on the 1/F of Longlife Industrial Building at No. 15 Ko Fai Road. These are premises in which items of machinery were located. These items of machinery now belong to the appellant. He had bought them at an auction on 18 January this year; an auction organized by the bailiff upon the respondent levying distraint as landlord upon those goods.

3. The question on the appeal will be whether the goods were liable to be distrained a second time. Apparently what happened was this. Within about three weeks of the goods having been purchased by the appellant those goods were seized again. They had been left upon the premises, it is said, by the appellant by arrangement with the tenant. The appellant says that the second distraint is unlawful. The respondent disagrees.

4. On 18 April 1995 the notice of appeal was lodged, pursuant to leave having been given by the District Court. Apparently, the reason why the District Judge dismissed the appellant's claim to the goods was because the District Judge found that he had abandoned his ownership of the goods. If the appellant be right in his contention that the machinery was not liable to be distrained a second time, it follows that the second distraint was unlawful and the appellant's claim should succeed. None of these matters however are for our determination on the present application.

5. The only matter before us is whether Mortimer JA was right to order, as he did on 25 May, to this effect: that the bailiff should not proceed with the second sale of these goods, acting upon the second warrant of distress, upon conditions Mortimer JA imposed as follows:

(i) payment for the sum of HK$200,000.00 into the Court in an interest bearing account as security, to be made by the Appellant on or before 30 May 1995;

(ii) the machinery in question to be removed by the Appellant with due diligence within 6 weeks from 25 May and kept by the Appellant in a place within the territory;

(iii) there be liberty to apply; and

(iv) costs of the application to be costs in the cause of the appeal.

6. The sum of $200,000 represented in effect the value of the goods purchased by the appellant at the auction as the highest bidder in January and this sum we are told has now been paid into court.

7. Mr Chain for the applicant asks that the order of Mortimer JA be discharged altogether or be substituted upon such terms that, as from 19 May 1995, the expenses incurred by reason of the bailiff not selling the goods to be the appellant's responsibility.

8. This is a variant on the first conditions which Mr Chain formulated in opening this application: they were in very different terms.

9. When Mr Chain was invited to formulate the precise terms of the order which he seeks from this court should we refuse to discharge Mortimer JA's order altogether, he produced a draft minute of judgment to the following effect:

"Upon the appellant's undertaking to be responsible for all expenses incurred by reason of the bailiffs not selling the goods the subject matter of the Distress Warrant herein since 19 May 1995,

It is ordered that: -

(1) There be a stay of execution of the warrant of distress herein until the determination of Civil Appeal No. 106 of 1995.

(2) The appellant do fortify his undertaking by paying HK$200,000 into court in any interest bearing account and for this purpose the payment in of $200,000 by the appellant on 30 May 1995 do remain in court in satisfaction of such fortification.

(3) The appellant do make arrangement with the bailiff for removing the machinery in question from 1/F, Longlife Industrial Building, No. 15 Ko Fai Road, Kowloon within two weeks and to provide the bailiff with alternative storage for the said machinery.

(4) The appellant do pay the respondent for the use of 1/F Longlife Industrial Building, No. 15 Ko Fai Road, Kowloon from 19 May 1995 to the date the said machinery was removed at a rate to be assessed by the court.

(5) The bailiff be directed to insure the said machinery against theft and damages for the sum of $400,000."

10. As can be seen, this formal order leaves a number of points yet to be determined. For instance, the amount to be paid for the use and occupation of the premises; and by this order we would be asked to make an order directing the bailiff to do something, though he (the bailiff) is in fact not a party before this court. In my judgment Mr Chain's proposed order leaves far too many loose ends to be tied up and I am by no means satisfied that, at the end of the day, it necessarily produces a result which would be fairer to the parties than the one actually made by Mortimer JA.

11. This is an interim matter. What the court tries to do is practical justice, not perfect justice. Mortimer JA had, before him, the parties represented by counsel. The matter was fully argued and he made the best order he could in the circumstances as he saw them. I see no reason to differ from the view he took and in my judgment we should not accede to the application. I would dismiss the respondent's application made pursuant to s35(3) of the Supreme Court Ordinance.

Bokhary, J.A.:

12. I concur in the judgment which has just been delivered.

Liu, J.A.:

13. For the reasons given by my Lord the Vice-President I, too, would dismiss the application.