HON HING ENTERPRISES LTD. v. SKAI IMPORT EXPORT LTD.

IN THE COURT OF APPEAL

1993 No.118
(Civil)

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J U D G M E N T

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Godfrey, J.A.:

1. This is an appeal from the refusal of His Honour Judge Wesley Wong, sitting as a Deputy Judge of the High Court, to grant, in an intended action, an injunction on the application of the plaintiff made to the judge ex parte on 6th July 1993, before the issue of the writ and before the issue of any summons by the plaintiff for interlocutory relief. The writ in the action was issued on 8th July 1993, but the plaintiff has still not instituted any proceedings for interlocutory relief at first instance other than the application made ex parte to the judge on 6th July 1993. We were told from the Bar that other steps in the action have been taken since 6th July 1993, but these do not include an inter partes application by the plaintiff for interlocutory relief. With that introduction I turn to the facts, which I can state in brief.

2. The plaintiff is the manager of a 22-storey building, known as the Nan Fung Centre, in Tsuen Wan. This building is the subject of a Deed of Mutual Covenant dated 6th June 1983. The defendant is the owner of some shares in the land and has the exclusive right to use, occupy and enjoy the unit known as Room 2003A on the 20th floor of the building. The building contains a lift giving onto a lift lobby on each floor. In the case of this defendant (and I may add occupiers of other units), attempts have been made from time to time to create additional apertures so as to give supposedly more convenient access to the lift lobby.

3. The plaintiff says that, unless its consent is first obtained, it is wrong for occupiers of units in the building to act in this way, creating unauthorised apertures in the walls of their units. That is clearly seriously arguable and indeed probably unanswerable; but I would not wish by saying so to pre-empt any defence which the defendant may wish to raise at the trial of the action or on any interlocutory application to which it has been made a party.

4. The chronology is that, at the end of May 1993, the defendant started to make the aperture to which I have referred in the form of a new doorway to its premises. In order to do it, it had to cut through the marble cladding of the lift lobby. Not unnaturally the plaintiff protested, and asked for the reinstatement of the marble cladding. The defendant refused to do this, but gave an undertaking not to continue with the work pending a decision by the plaintiff on an application by the defendant for consent to the work.

5. In due course the plaintiff refused to consent. The defendant was not content with that refusal, but did offer to extend its undertaking for 7 days. However, on 5th July 1993, before those 7 days expired, it resumed work on the doorway. The plaintiff, which had behaved perfectly properly in not taking any proceedings against the defendant before that date, finally got fed up and decided to take steps against the defendant by instituting the appropriate action. It got its legal advisers to prepare a draft of the appropriate writ; the summons for interlocutory relief; and the evidence in support of that summons.

6. The summons for interlocutory relief, which was placed in draft form before the judge, asked for an injunction "until after trial or further order" to restrain the defendant from:-

"(a) doing any or any further work on or in or which otherwise affects the wall dividing unit 2003A and the common area of the 20th Floor of NAN FUNG CENTRE.

(b) doing any or any further work on or otherwise using the door which was constructed since 28 May 1993 in the wall dividing unit 2003A and the common area of the 20th Floor of NAN FUNG CENTRE."

7. When the plaintiff appeared before the judge on 6th July 1993, the day after the resumption of the work by the defendant, the plaintiff attempted to persuade the judge that, pending the hearing of the summons for interlocutory relief which it intended to take out, he should grant relief ex parte in similar terms. But the judge refused that application. These were his reasons:-

"There is no urgency in this matter. I cannot see how this refusal to grant an ex-parte injunction would cause irreparable damage to the Plaintiff.

If it is a breach of the Deed of Mutual Covenant then let the intended Defendant argue it in an interlocutory application for an injunction.

It is a fit case where the matter should be argued in an interlocutory application before the court should decide whether an injunction ought to be granted.

For those reasons, the application is refused."

The judge was manifestly wrong to refuse to grant the ex parte relief sought. The defendant was threatening to continue with the work and so further disturb the status quo before the rights of the parties could be ascertained and determined in the action.

8. The matter plainly was one of urgency and did call for ex parte relief; I am therefore of the opinion that this Court should allow the appeal and make an injunction, in the terms of the summons for interlocutory relief, until after judgment on that summons or until further order in the meantime. It is not, I think, necessary to insert into the order a provision to the effect that the defendant is to be at liberty to apply to vary or discharge the order. It is the right of any defendant on the receiving end of an order made against him ex parte to apply for its variation or discharge. Although the order that is to be made today will of course be made by this Court, any application for variation or discharge which the defendant is minded to make should be made to the court of first instance: see Ocean Software v. Kay [1992] QB 583. We are simply making the order which, in our view, the judge of first instance ought to have made.

9. The plaintiff, by its counsel, has asked us to give some guidance as to the procedure which it ought to follow in cases of this sort. I think we should do so.

10. Let me start by saying that, in the ordinary way, the rights of parties in dispute with each other fall to be decided at the trial of the action, not at any earlier stage. The only thing which has to be decided at an earlier stage is whether the status quo ought to be preserved until after the trial of the action. The way in which the status quo can be preserved, if the parties fail to agree as to how it should be done, is by the plaintiff instituting proceedings inter partes for interlocutory relief. The plaintiff can do that either by summons, or by notice of motion (which in my opinion is the better course). On such an application, both parties have their say, and the judge is able to decide what, if anything, he ought fairly to do to preserve the status quo pending judgment in the action.

11. If, however, the matter is so urgent that it cannot wait until the date when the interlocutory application inter partes is to have its first hearing, then the plaintiff can and should apply for ex parte relief. Of course, the court will require on such an application to be satisfied that the case is sufficiently urgent and sufficiently serious to warrant the grant of an injunction to the plaintiff without the defendant having an opportunity to be heard. In a proper case - but only in a proper case - the court will take this step; since it is a denial of natural justice it is not to be taken lightly.

12. In the present case the defendant was threatening to bring on the work, and this is the sort of case for which ex parte relief is appropriate, especially since the defendant gave an undertaking out of court to the plaintiff which it failed to honour. What has gone wrong with this case is that, after the judge refused the plaintiff the relief ex parte for which it had asked, it forgot altogether to take out the summons for inter partes relief which it should have taken out as soon as the writ was issued. If it was going to take some time before the substantive hearing of the interlocutory application inter partes, and if the plaintiff were to receive no ex parte relief in the meantime, then the work would all be done and completed. The marble would be restored and the judge might well feel anxiety about making an order, which by then would have to be mandatory rather than prohibitory in nature, requiring all this work to be undone. That, I may add, is an additional reason why the judge ought to have granted the plaintiff relief ex parte, as Mr Merry, for the plaintiff, submitted; but, of course, only until after judgment in the interlocutory proceedings inter partes.

13. There is no reason to penalise the plaintiff for the mistake it made in not taking out its inter partes summons immediately. Although it is now months since all this happened, the plaintiff by its counsel is willing to give an undertaking to take out an inter partes summons as soon as practicable (I would suggest before 4:00 p.m. on Monday, to-day being a Friday). On that undertaking, I would be prepared to continue the relief in fact already granted ex parte by this Court pending the hearing of this appeal, until after judgment in the inter partes summons or until further order in the meantime, the defendant having the usual right to apply to the judge, if so advised, for any variation or discharge of the order to which it may consider itself entitled.

14. There remains, I think, only to consider the form of the order, if my brethren are in agreement with me, and I would propose we do that with counsel after they have had an opportunity to express their opinions.

Nazareth, J.A.:

15. I agree that for the reasons given by my Lord the appeal should be allowed and the proposed order made. I would also concur in the procedural guidance he has given.

Bokhary, J.A.:

16. On the material before the Court, the position appears to be this. During a period within which the defendant had undertaken not to proceed with the work in question, it went ahead and proceeded with such work. Discovering that, the plaintiff managers went before the Deputy Judge ex parte seeking prohibitory relief. He turned them away. Why?

17. It appears that he did not do so on the basis that the matter could be heard inter partes before the work was completed. Rather, it appears, he turned them away on the basis that it would be of no consequence if the work were completed before the matter was dealt with by the Court. That was plainly wrong. If the plaintiff had done nothing and suffered the work to be completed before going before the Court, that would have told against them when they sought mandatory relief. And if it be correct to require the managers to apply straightaway, it was likewise correct for the court to deal with the matter straightaway.

18. The ex parte application should have been acceded to; and I, too, would allow this appeal. I agree with an order along the lines proposed by my brother Godfrey, subject to refinement after hearing counsel. I also wish to state that I agree with the observations which my brother Godfrey has made with a view to assisting litigants in future in cases of this kind.