XCHRX CHINA LIGHT & POWER COMPANY LIMITED AND OTHERS v. WONG TO SAU HEUNG AND OTHERS

IN THE COURT OF APPEAL

1993, No. 161

(Civil)

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J U D G M E N T

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Litton, J.A.:

1. This is an ex parte interlocutory appeal against Mr. Justice Keith's refusal to grant an ex parte application in the plaintiffs' favour. By the very nature of these proceedings any views we express at this stage can only be provisional. The sole relief sought in the present ex parte proceedings is for an interim injunction, until the matter can be heard inter partes. The plaintiffs, together with other companies related to the plaintiffs, are defendants in proceedings in the District Court of Jim Wells County, Texas, U.S.A. It is the plaintiffs' contention that those proceedings have been brought vexatiously and oppressively against them, in relation to matters arising from an industrial accident in Hong Kong which have nothing whatever to do with Texas.

2. In essence, what the plaintiffs say in the present proceedings is this: they have a right which the Hong Kong courts should protect, namely the right not to be further vexed with legal proceedings in Texas: see Societe Aerospatiale v. Lee Kui Jak [1987] 1 AC 871 at 892A-C. This appears to have been accepted by the judge in the court below.

3. What the plaintiffs seek by the ex parte application is an order in personas, to restrain the defendants from taking further proceedings in the Texas court to further embroil the plaintiffs in legal proceedings. This does not impeach the jurisdiction of the Texas court. There is, on the material before us, a strong possibility that if not restrained the defendants will seek injunctive relief against the plaintiffs in the Texas court, once it is appreciated that the plaintiffs have appointed lawyers to represent them in the Texas proceedings: the moment those lawyers go on the record as representing these plaintiffs, they can be served with orders made at the instance of the defendants in what are called "anti-anti-suit injunction" applications.

4. The courts in Hong Kong, understandably, recoil from making orders which might be thought, indirectly, to infringe the jurisdiction of foreign courts: it was this point which principally caused the judge to refuse to grant the application which the plaintiffs sought. However, I am satisfied that, upon the limited basis on which the plaintiffs seek relief, the jurisdiction of the Texas court is in no way impeached. In granting the injunction sought, the court would simply be exercising its jurisdiction over persons resident in Hong Kong: the injunction is directed not to the foreign court but to the party within the jurisdiction of the Hong Kong court. In this regard, the judgment of the British Columbia Court of Appeal in Amchem Products v. Workers' Compensation Board (1990) 75 DLR (4th) 1 at 23 is helpful.

5. The judge, in my view, erred in finding that there was a strong arguable case but nevertheless refusing to grant the injunction ex parte. It follows therefore that the appeal should be allowed and an order be made in terms of the draft at page 15 of the bundle, the inter partes summons to be returnable for hearing on Monday 11th October 1993 at 9.30 a.m. before a High Court judge.

6. Since the hearing ex parte on 4 October our attention has been drawn to the decision of the Supreme Court of Canada, reversing the judgment of the British Columbia Court of Appeal in Amchem Products v. Workers' Compensation Board (supra). The Supreme Court of Canada's judgment is reported in [1993] 102 DLR (4th) 96. My decision on this interlocutory appeal would not have been any different if I had been aware, at the ex parte hearing, of this matter. In the Canadian case the central issue was: which was the more natural forum, British Columbia or Texas. The trial judge had found that Texas was not a "wholly inappropriate forum" and that the United States, though not necessarily the state of Texas, was a more natural forum, though he had not specified which state in the U.S.A. Moreover, all the asbestos companies had connections with Texas, and some had substantial connections: see Amchem Products v. Workers' Compensation Board [1993] 102 DLR (4th) 96 at 121. The conclusion of the Supreme Court of Canada was reached after further evidence was admitted on the issue of the asbestos companies' connection with Texas.

7. What the Supreme Court of Canada's decision re-affirmed is that there is a common law right not to be vexed by proceedings in a foreign jurisdiction which are highly oppressive and in this regard the Canadian courts would follow the lead given by the English courts in Castanho v. Brown & Root (UK) Ltd [1981] AC and Societe Aerospatiale v. Lee Kui Jak (supra) and further, that a judge in Canada has jurisdiction to restrain such vexatious and oppressive conduct on the part of a litigant by an injunction in the Canadian courts, operating in personam in Canada. It is then a matter of degree whether an injunction should issue or not: always remembering of course that such relief would only be given in extreme cases, and that normally the matter should be decided by proceedings in the foreign court.

8. In contrast to the situation in Amchem Products, it seems to me on the superficial view we have of the case before us that it is an extreme case. It is difficult to see how a claim for damages arising from an industrial accident occurring in a power station in the New Territories can be conveniently tried in Jim Wells County, Texas. On the face of the material before us the defendants are acting oppressively and vexatiously and are likely to continue to do so unless restrained.

9. I appreciate that there are important issues at stake: for instance, how clearly established is the "common law right" not to be vexed by "oppressive" legal proceedings overseas? Should the Hong Kong courts, as a matter of comity, not leave the issue to be decided in the foreign courts: here by, presumably, anti-anti-suit injunction proceedings in Texas? These are all matters which can be ventilated at the inter partes hearing, when both parties will have the opportunity to be heard. The judgment of the Supreme Court of Canada in Amchem Products will be very useful in that regard. It does not, in my judgment, suggest that as an interim measure the defendants, should not be restrained from further "vexing" the plaintiffs by anti-anti-suit injunction proceedings in Texas, until the inter partes summons can be heard. If the provisional view I have formed is wrong, all that the defendants would have lost is a small amount of time.

Nazareth, J.A.:

10. I agree.

11. Keith J. declined to grant the anti-suit injunction sought for two reasons. First, that it would deprive the Texas court of its jurisdiction. However, the injunction sought would operate in personam to restrain only the defendants, all of whom are resident in Hong Kong. The jurisdiction, as such, of the Texas court would not be challenged; see the reasons of the British Columbia Court of Appeal in Amchem Products v Workers' Compensation Board [1990] 75 DLR (4th) 1 at 22; 23, which in the present context remain unaffected by the judgment of the Supreme Court of Canada on appeal, [1993] 102 DLR (4th) 96.

12. That the jurisdiction of the Texas court would not be affected is also clear from the following passage in the Privy Council judgment in Societe Aerospatiale v Lui Kui Jak [1987] 1 AC 871, 892 C-D:

"... where the court decides to grant an injunction restraining proceedings in a foreign court, its order is directed not against the foreign court but against the parties so proceeding or threatening to proceed. As Sir John Leach V.-C. said in Bushby v Munday. 5 Madd. 297, 307:

'If a defendant who is ordered by this court to discontinue a proceeding which he has commenced against the plaintiff, in some other Court of Justice, either in this country or abroad, thinks fit to disobey that order, and to prosecute such proceeding, this court does not pretend to any interference with the other court; it acts upon the defendant by punishment for his contempt in his disobedience to the order of the court; ...'

There are, of course, many other statements in the cases to the same effect."

The judgment continued at 892E:

"... it has been emphasised on many occasions that, since such an order indirectly affects the foreign court, the jurisdiction is one which must be exercised with caution ..."

Their Lordships then went on to provide guidance as to how the jurisdiction should be exercised.

13. The judge's second reason was that the appellants would, as it were, be stealing a march in obtaining an advantage by getting in their application for an anti-suit injunction first. However, it seems to me that the proper view of the matter is that the injunction is necessary to protect the appellants' right and to avoid the injustice to the plaintiffs that would result from their becoming embroiled in Texas proceedings when the natural and appropriate forum appears to be Hong Kong.

14. It is plain therefore that the judge misdirected himself and in consequence failed to exercise his jurisdiction. It accordingly falls to this court to do so in relation to the short period during which the plaintiff's right not to be vexed by foreign proceedings has to be protected pending an inter partes hearing.

15. It seems to me on the material before me that the plaintiff has a "strong arguable case" as the judge put it, and sufficiently meets the criteria and considerations applicable to the grant of the interlocutory ex parte injunction sought; those are indicated in Societe Aerospatiale as to its anti-suit nature, and as to its ex parte nature, at p.502 of the 4th Edition of Spry's Principles of Equitable Remedies.

16. I would therefore allow the appeal and make the order contemplated by my Lord.