QUID PRO QUO LTD v. MICHAEL STALEY

HCA171/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.171 OF 2002

--------------

--------------

-----------------------

J U D G M E N T

-----------------------

1. I have an urgent application before me which was inter parte made by the plaintiff pursuant to leave which I granted on Tuesday last week where Mr Johnson, as the substantial director and controlling financial shareholder of the plaintiff company, was given leave to act and represent the company.

2. The claim was brought urgently by the plaintiff against the defendant, Mr Michael Staley, who was employed by the company pursuant to a Contract of Employment entered into by the plaintiff and the defendant dated 4 September 2001. There are various provisions in the Employment Contract but two of the key provisions are, of course, the usual covenant : to be faithful to the company and not to disclose information of the company during the employment or for a reasonable period after cessation.

3. The circumstances of the dispute between the plaintiff and the defendant are somewhat controversial but for the present purposes, I think there is no dispute that the plaintiff, Mr Johnson while he was on holiday in Australia and left the company in the care of the defendant, and Mr Staley left a Letter of Termination of Employment on the desk of Mr Johnson on 24 December and, also more or less at the same time all the other staff of the plaintiff company left. Mr Johnson came back from the holiday, according to him, to find that much of the appliances and documents and equipments of the company which was necessary to carry on the work of the plaintiff company had gone including in particular a desktop computer which was used by the defendant - this is the subject of the summons paragraph 1(i), and various other documents relating to the business.

4. What had caused particular concern to the plaintiff and the necessity for the urgency of the application was the production of what is said to be the fourth edition of the magazine called Planet Build which was supposed to have come out in December while Mr Johnson was away. The urgent application was brought on the basis that the plaintiff would suffer irreparable harm unless some of the reliefs are granted.

5. At the hearing today, Mr Staley who appear in person unrepresented, informed the court that he had applied for legal aid and that this was under consideration. The court had in fact received Notice of Application of Legal Aid. Because of the urgency of the matter, I exercised my discretion and ordered the lifting of what would otherwise be the normal stay, and I heard the sworn evidence of Mr Staley. It goes without saying that some part of Mr Staley's evidence was contested but for the limited purpose of deciding on what urgent orders should be made, it seems to me that at the end of the day, much of the dispute had gone out of the window in the light of the evidence of Mr Staley and the concessions which he was willing to make. I will go through the summons and indicate the order that I am prepared to make in the circumstances.

6. So far as item paragraph 1(i) is concerned, there is no contest that that computer was taken away and Mr Staley was agreeable to its return. So far as item paragraph 1(ii) is concerned, the evidence of Mr Staley is that he has not taken the items there, i.e. internet router, printer server, a 16 port switching network hub and a 5 port network hub, and that in fact, his new business does not operate on a network system. There is, on the other hand, no suggestion by Mr Johnson that the return of these, even if they could be proved to be in the possession of Mr Johnson, would be of vital necessity for him and therefore I declined to make an order in terms of paragraph 1(ii).

7. So far as paragraph 1(iii) is concerned, the position was initially Mr Staley in evidence said he did take away all of those items except the corporate plans. Subsequently, he changed his evidence. I am not satisfied that he did not take away or had no longer in his possession any of the items in paragraph 1(iii). So I think an order should be made and that it would be up to Mr Staley if he says that he does not have them any more to explain in the necessary affidavit what has happened to the items under paragraph 1(iii).

8. So far as paragraphs 1(iv), (v), (vi) and (vii) are concerned, I am not prepared to make an order in relation to those, except in relation to item (v), i.e. advertising films created for Samsung Electronics which Mr Staley has admitted that he has taken and which he is willing to give back. With the exception of that item, I am not prepared to make any order in relation to paragraphs 1(iv), (v), (vi) and (vii).

9. The order, therefore, in relation to paragraphs 1, 2 and 3 would be as follows : the following items be delivered by the defendant to Mr Edward Elwyn Johnson of the plaintiff at the office of Messrs Mallesons Stephen Jaques at Suite 801, Asia Pacific Finance Tower, Citibank Plaza, 3 Garden Road, Central, Hong Kong at 9:30 a.m. on 18 January 2002 : paragraphs 1(i) and (iii) as set out in the summons with Samsung Electronics films as indicated above. I order also paragraph 2 and paragraph 3 and order that within 24 hours after the delivery of items in paragraphs (i), (iii) and Samsung Electronics films above of paragraph 1, the defendant do serve on the plaintiff an affidavit confirming his full compliance with the terms of paragraph 1 above, and that he no longer has in his possession, custody or power any of the documents or items referred to in paragraph 1(i), (iii) and Samsung Electronics films above or any copies or any of them or any parts thereof, whether in paper form or machine readable form and explain and clarify what has happened to the items or documents referred to above if he was not able to deliver these items to the plaintiff. So far as paragraph 4 is concerned, Mr Staley has indicated that he has no objection to that. I decline to make an order in terms of paragraph 5 on the basis it is too broad and too wide. So far as paragraph 6 is concerned, Mr Staley has indicated some reservation but it seems to me that the scope of that order is plain and it is plainly something that the defendant ought not to do if he was to comply with the terms of his Employment Contract. I also make an order under paragraph 6. So far as costs is concerned, the costs should be reserved.