KING DOH RESTAURANT LIMITED v. STEREO LIMITED

1988, No. A6404

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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DECISION

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1. The proceedings in this case have taken an unusual course; so seem to be also the submissions advanced by Counsel before me today. The facts are involved but by no means complicated.

2. The plaintiff and the defendant are both limited companies and occupiers of a building in Causeway Bay. The plaintiff is also the owner of the premises it occupies. The defendant holds under a Tenancy Agreement. The plaintiff's premises are on the 1st Floor of the Causeway Bay Building, Nos. 8-14 Yee Wo Street. The plaintiff operates a restaurant in its premises. The defendant is a tenant/occupier of Shop 'F' on the Ground Floor of the same building.

3. For the use of the defendant's premises, there were erected two signboards as they may each be collectively described. A small one still exists today, which can be seen in photograph 'HYM-6' exhibited to the affirmation of the Managing Director of the defendant, Mr Ho, filed herein on the 26th October. Sometime in October 11 years ago in 1977, a signboard was erected in the location where the defendant presently proposes to erect an advertisement sign. There is no evidence that the erection of this previous signboard was at any time complained of or disturbed. This previous signboard, I am told, is shown in exhibit 'HYM-7' referred to in said affirmation of Mr Ho. This previous signboard had been taken down. Scaffoldings were caused to be erected by the defendant at or about the same location in July, early this year. The defendant's apparent intention was to put up some advertisement sign. Not much further activity followed, but the plaintiff took exception to the erection and existence of the scaffoldings as well as the proposed erection of another advertisement sign. The plaintiff instituted this action against the defendant in ejectment. That would appear to be the exclusive cause of action, an action in trespass.

4. The plaintiff claims against the defendant for a declaration that the defendant is not entitled to erect the scaffoldings or the proposed advertisement sign. An injunction to restrain the defendant from so doing is also sought, coupled with a prayer for a mandatory injunction for the removal of the scaffoldings already in place. Damages and costs are also asked for.

5. The action was commenced on the 21st September. Two days later on the 23rd, an inter partes summons was issued against the defendant for an order that the defendant be restrained from erecting any advertisement sign upon or about the Causeway Bay Building and a further order that the defendant be further enjoined to dismantle and remove the then existing scaffoldings.

6. When the parties came before Mayo, J. in Chambers on the 29th September 1988, Counsel for the defendant, not Mr Ismail appearing before me today, sought an adjournment. The adjournment was ultimately granted and an order was made. According to the notes of the judicial clerk serving the learned judge, inserted into the court file by way of record, Mayo, J. delivered himself of the following reasoning :

"Court : There is no evidence to support defendant have (sic) a legal right to erect the scaffolding which is attached to the plaintiff's premises - that being the case and in the absence of any agreement between the parties, I propose at this initial stage to grant an injunction requiring the defendant to remove the scaffolding. As other issues remain outstanding, I propose granting the adjournment which is sought by the defendant. The application is adjourned sine die. Leave is granted to both parties, to file affidavits and costs of the adjournment will be to the plaintiff. 7 days to remove the scaffoldings.”

7. Mr Ismail now appearing for the defendant, read to me what was recorded by those instructing him, then attending upon Counsel before Mayo, J. On the application of Counsel then appearing for the defendant for an adjournment and after various submissions advanced to Mayo, J., the judge was recorded as having said the following :

 

"An undertaking to file a notice to act by solicitors. After hearing arguments, order that : as Miss Chih concedes no evidence at this stage of any legal right to erect scaffoldings - absence of agreement between parties, interim order to demolish scaffoldings forthwith within 7 days. Application to adjourn other issues sine die. Costs to the plaintiff in any event."

8. The plaintiff's solicitors evidently had the carriage of the order. An order was formerly filed and after filing, was endorsed with the usual penal notice by solicitors for the plaintiff. In essence, the order granted a mandatory injunction on the usual undertaking as to damages to dismantle and remove the scaffoldings then existing within 7 days. The summons was otherwise adjourned sine die with costs of and incidental to the adjournment given to the plaintiff in any event.

9. It is the defendant who caused to be restored the summons before me today.

10. There were 3 substantive issues canvassed : first as to merits; second, an application was made for an adjournment by the plaintiff and lastly, the plaintiff applied to amend. I intimated at the conclusion of submissions at each stage that I would soon give reasons for my determinations.

11. I believe it would be best to deal with the application to adjourn first. On behalf of the plaintiff it was suggested that the Managing Director, Mr Ho's affirmation filed on the 26th October, served on the 27th, raised a point, unexpected or new to the plaintiff, on the written consent given by the landlord or landlady of the defendant on the 3rd October.

12. The plaintiff claimed that it was necessary to reply to the matters raised in Mr Ho's affirmation, in particular, this landlady's consent. Counsel for the plaintiff strongly urged the court to grant an indulgence to his client so as to allow the Amended Statement of claim to be suitably reamended on proper enquiries made. I refused the adjournment.

13. The plaintiff's case, as is now stands, is founded solely in ejectment. Counsel for the plaintiff is not in a position to brief the court as to precisely what material the plaintiff shall be relying upon to counter-act what has been described as the late disclosure of the landlady's consent given on the 3rd October and the shifting of front by the defendant.

14. The affirmation of Mr Ho, the Managing Director of the defendant, was served on the 27th October, a period inclusive of 7 days, minimum 5, has elapsed. No explanation was given to the court as to what steps, if any, the plaintiff had taken in the interim or what difficulties or obstacles, if any, the plaintiff had faced or experienced.

15. The provisions in the Deed of Mutual Covenants need briefly be mentioned, and this is as convenient a time as any to do so. Clauses 3(a)(i) & (ii) have given the defendant's landlady a free licence to erect advertisement signs, provided, of course, the same would constitute no trespass on the plaintiff's property. Paragraph 5 in Part II, on page 27 of the Deed of Mutual Covenants provides that the respective owner in any proposed erection of advertisement signs is to be responsible for observing of all governmental regulations and bye-laws.

16. The Tenancy Agreement between the said landlady and the defendant, by Clause 2(p), stipulates that the defendant should not erect such advertisement sign without prior consultation with the landlady and without obtaining her consent. Consent was given on the 3rd October 1988, a date subsequent to the institution of the action on the 21st, the issuance of the inter partes summons on the 23rd and the appearance before the learned judge in Chamber's on the 29th, all in September.

17. I parted company with Counsel for the plaintiff when he submitted that it would be encumbent upon the defendant to satisfy the court and presumably the world at large, that any action it took was within the law. It is plain, in my view, that the one who asserts unlawfulness or illegality has the initial burden of proof.

18. The plaintiff has yet to satisfy me that its complaint against the defendant has any substance. If, indeed, later in time the plaintiff should unearth any unlawful or illegal actions on the part of the defendant to its prejudice, obviously steps could then be taken to have matters readjusted and a further application made. The adjournment of the summons applied for on the grounds disclosed by the plaintiff could, in my view, serve little purpose. Interlocutory application for injunction is a matter which needs to be dealt with and disposed of with reasonable expedition. Moreover, my refusal to allow an adjournment could, in the circumstances, hardly be prejudicial to the plaintiff. For these reasons, I refused the application to adjourn.

19. Next, I should deal with the application to re-amend. Counsel for the plaintiff had very kindly, working no doubt in his free time during the luncheon adjournment, managed to prepare proposed amendments in writing, one for the amended Statement of Claim and the other for the plaintiff's summons. For the Amended Statement of Claim, the proposed re-amendments were not resisted save for the question of costs and further time to file a Defence. The proposed re-amendments, said to have been caused by the late disclosure of the landlady's consent given on the 3rd October, were, nevertheless, re-amendments for the benefit of the plaintiff. A completely new case was sought to be set up against the defendant. I had taken note of what was described as predicaments of the plaintiff in the circumstances but those matters were insufficient for me to depart from the usual order for costs in allowing further amendments to an Amended Statement of Claim. The proposed re-amendments to the Amended Statement of Claim were, therefore, allowed on terms as suggested by Mr Ismail, that is to say, with costs to the defendant in any event and leave to file a Defence within 14 days.

20. As for the proposed amendments to the summons, Counsel for the defendant took the latter portion first. It was submitted by Mr Ismail for the defendant that the injunction sought to be obtained to restrain the defendant from infringing the relevant clauses in the Deed of Mutual Covenants is premature and wholly unsubstantiated. Counsel maintained that the plaintiff had so far been unable to adduce evidence of any threatened breach or breaches of those relevant provisions in the Deed of Mutual Covenants exhibited as 'HYM-4' to the affirmation of Mr Ho, Managing Director of the defendant. No court, in my view, would entertain and grant an amendment in vain.

21. Turning to the proposed amendment to the first part of the plaintiff's summon, which sought to introduce an amendment for restraining the defendant from erecting an advertisement sign as shown in the plan marked 'HYM-8' and exhibited to the said affirmation of Mr Ho. It was vaguely suggested that the proposed advertisement sign with dimensions of some 10" deep, 20" wide, stretching into and over the street, must be justified.

22. The plaintiff has conceded through Counsel that subject to the landlady's consent given on the 3rd October, the defendant is entitled under the Tenancy Agreement and the provisions of the Conveyancing and Property Ordinance, Cap. 219, to erect advertisement signs to or about the premises it occupies. On that concession, counsel agreed that the prayer in that direction in the first part of the plaintiff's summons, as it now stands, was insupportable. The proposed amendment to the first part of the summons aimed at reducing its scope. But in my view, the proposed amendment would leave that portion of the plaintiff's summons equally futile and not maintainable in the absence of any concrete complaints against the defendant. There is simply no evidence that the landlady's consent is inadequate for the proposed sign or that the sign contravenes regulations.

23. Without material supporting or tending to support these proposed amendments to the plaintiff's summons, it cannot be salvaged. For these reasons, I refused the application to amend the summons. Thereupon, as expected, Counsel for the plaintiff conceded defeat and proceeded to submit on costs. The court was asked to make an order in favour of an unsuccessful litigant in the unusual features and exceptional circumstances of this case.

24. In order to be complete, despite Counsel's concession after he had unsuccessfully applied to amend the plaintiff's summons, I find it necessary to make an observation or two. Clearly the cumulative effect of Clauses 3(a)(i) & (ii) of and paragraph 5 of Part II to the Deed of Mutual Covenants in conjunction with Clause 2(p) of the Tenancy Agreement and the landlady's consent given on the 3rd October would put matter, at least at this stage, beyond argument that the plaintiff has no grievance to air or any injuried right to protect. In view of the provisions and document to which I have referred, the defendant is prima facie entitled to have the proposed advertisement sign and scaffoldings erected. Insofar as the plaintiff's present summons seeks to disrupt, stop or prevent the defendant from pursuing this course of conduct, without more it is ill-founded, misconceived and cannot be granted.

25. One slight complication intervened. I have endeavoured to emphasize the sequence of events: the date of the writ, 21st, the date of the summons, 23rd and appearance before Mayo, J., on the 29th, all in September 1988, and the granting of the written consent by the landlady on the 3rd of October. Bearing in mind what was conceded by Counsel for the defendant before Mayo, J.: "as Miss Chih concedes no evidence at this stage of any legal right to erect scaffoldings" - no query was raised when the learned judge made that observation although at one time there seemed to be some disagreement as to what precisely transpired-the judge was clearly influenced by the admitted lack of any legal right in making what would appear to be "a matter of cause" order providing sensibly protection in the interim. Some faint criticisms were levelled at the instantaneous granting of that mandatory injunction order without any submissions or full submissions from the Bar. But that was not broached before the judge at the time; nor was it followed up at any time thereafter. Indeed, the matter was not raised in any of the affidavit until enquiry was made by this court as to the circumstances in which the particular order was granted. At one time, it was doubted by the plaintiff, without any denial from the defendant, whether any adjudication was made, whether any order was granted, or whether in fact it was not merely a term imposed by Mayo, J. on Counsel's request for an adjournment. Memory after a lapse of time cannot be accurate. From the recorded notes of the judicial clerk and those instructing Mr Ismail, there is no shadow of a doubt that before Mayo, J., not even a pretense of a right to erect the scaffoldings in question was suggested. It seemed to be a foregone conclusion to all, a matter of course, a just and sensible measure to be taken. The decision was not appealed from, and in fact the Order was dutifully complied with.

26. Even if my analysis is not wholly correct, it is at least debatable as to whether or not that particular injunction was rightly granted. Counsel for the defendant is not taking any point today that the mandatory injunction was granted without submissions or full submissions although remarks were made and some criticisms aired. In short, up to this moment, Counsel has not sought to challenge that part of the order made by Mayo, J. on any or any formulated ground. In conclusion, matters are therefore very much at large, contentious, arguable as to whether that injunction was rightly granted and as to whether the plaintiff was then legally entitled, in view of the concession of the defendant made by its former Counsel, to have the scaffoldings, a nuisance no doubt since July 1988, to be instantly removed. Those matters would have to be stood over for proper consideration at the trial.

27. I have not been invited to disturb that particular part of the order, presumably, to be fair, because the substratum of dispute between the plaintiff and the defendant has disappeared by reason of the dismantling and removal of the then scaffoldings. Be that as it may, I do not feel sufficiently confident to disturb that mandatory order, especially without an invitation to do so.

28. Subject to that mandatory injunction and without prejudice to the force of it at the moment, the plaintiff's summons against the defendant is dismissed. I find no unusual features or exceptional circumstances to justify a departure from the usual order that costs is to follow the event. I dismiss the plaintiff's summons against the defendant, subject to that rider, with costs to the defendant.