TONG HOK TAK, DAFFY & OTHERS v. BEVERLY CONSULTANTS LTD & OTHERS

HCA 2617/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2617 OF 2003

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J U D G M E N T

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1. This is an application by the 3rd Plaintiff, which arose out of an injunction order that the Plaintiffs successfully obtained from Chu J on 1 August 2003. Due to the shortage of time, I will not go into the details.

2. Before I deal with the application, I should make certain preliminary observations. First, the order, which is under appeal (and the appeal, I was told, will be heard on Friday week), is still binding on both parties. Secondly, there was and is no application for a stay of the order; each and every paragraph in the order is still operative and the parties must strictly comply with the order. Thirdly, this is not a hearing of any contempt proceedings against anybody; I am not directly concerned with whether any party has failed to comply with any part of the order. Fourthly, like any other order, if there is anything in the original order which requires clarification or working out in order that the parties may comply with it, the court certainly has the jurisdiction to make the necessary clarification or give further directions. Fifthly, needless to say, I am not sitting on appeal from Chu J's order nor am I concerned with the suggested merits of the appeal in question. What Mr Barlow (appearing for the 1st and 2nd Defendants) has submitted to me in relation to the merits of his clients' appeal would only be taken into account insofar as the 3rd Plaintiff is asking for a further and substantive injunction against Mr Barlow's clients in the present application.

3. Bearing all these preliminary observations in mind, I am of the view that so far as the sum of $1.7 million odd is concerned, the sum falls within the ambit of paragraph 2 of the injunction order. Therefore according to paragraph 2, the sum should be paid by the 2nd Defendant or caused to be paid by the 2nd Defendant into "a separate bank account which shall only be operated or dealt with by specific resolutions properly passed at duly constituted meetings of the directors comprising both the 3rd Plaintiff and the 1st Defendant, or otherwise on the joint authorisation in writing of the 1st Defendant on the one hand and the 3rd Plaintiff (or the 1st and/or 2nd Plaintiffs on behalf thereof) on the other".

4. The money in question has gone into the 3rd Defendant's bank account. I understand that it can only be operated by the 2nd Defendant, now that the other signatory, Mr Leslie Cheung has sadly passed away. In my judgment, that company account is not an account which falls within the description of a "separate bank account" given in paragraph 2 of the injunction order.

5. Mr Barlow argued that paragraph 2 does not mandate the parties to open such a separate bank account. I agree that on the existing wording of paragraph 2, that may well be correct; but as I say, the court does retain its jurisdiction regarding clarification and working out of its own order. In my judgment, paragraph 2 proceeds on the basis that there is such a separate bank account into which money can be so paid. In the absence of such a separate bank account, paragraph 2 is simply unworkable. Therefore in my judgment, in the proper working out of paragraph 2, the parties must be directed to open such a separate bank account in order for paragraph 2 to operate. This is simply a clarification or the working out of paragraph 2. So to that limited extent, I am with the 3rd Plaintiff regarding his present application.

6. In other words, in order for paragraph 2 to work, the separate bank account has to be opened and paragraph 1 of the original injunction order has to be amended (to allow the transfer of the sum in question from the 3rd Defendant's bank account to the separate bank account), and for that purpose only, I make an order in terms of paragraph 1 of the amended summons save that I would add at the end of that paragraph after "the said separate bank account" the words "to be opened forthwith by the 3rd Plaintiff and the 1st Defendant in accordance with the description of the separate bank account in paragraph 2 of the original injunction order". I will leave it to the parties to work out the exact wording.

7. I am not minded to grant an order in terms of paragraph 2 of the amended summons. In my judgment, paragraph 2 seeks a further and substantive injunction. On the material before me, based on the arguments that I have heard, bearing in mind the preliminary observations I made, and pending the hearing of the appeal next week, I am not minded to grant any relief along the lines of paragraph 2.

8. Lastly I should add that in giving the clarification and amending paragraph 1 of the order, in so far as I have extended the original injunction order of Chu J, in my view, that is justified because (1) that is only a minor extension built on the original injunction order which as I say must be taken to be valid and binding as between the parties; (2) the extension, i.e. the opening of the account and the deposit of the money into it will not cause any real prejudice to the parties and Mr Barlow has not suggested any.

9. I note that the original injunction order did not expressly recite any undertaking as to damages from the Plaintiffs. My above order is really built on the premise of the previous injunction order and, I am afraid, would stand or fall together with that order. But in so far as I am slightly extending the previous order, Mr Mok (appearing for the 3rd Plaintiff) told me that his client is prepared to give an undertaking as to damages (in respect of the extension). He further said that his offer of an undertaking as to damages covers the original order as well. In so far as his undertaking as to damages covers any extension of the previous order by my order, I accept the undertaking as to damages. My above order should be regarded as having been made upon that undertaking as to damages. But in so far as Mr Mok's offer of undertaking relates to the previous order, I am not sure whether I am in a position to accept any such offer. The previous order has been made; it is now under appeal and one of the grounds of appeal is that no undertaking as to damages has been offered. In those circumstances, I would simply note what Mr Mok has said in relation to his offer of undertaking regarding the original order.

[Submissions on costs]

10. So far as costs is concerned, having heard the parties, on the one hand, in my judgment, today is simply for the working out of the original order, and under the original order the 3rd Plaintiff's costs are to be in the cause. On the other hand, the 3rd Plaintiff did ask for a more general and substantive relief by way of injunction in paragraph 2 of the amended summons which has been successfully opposed by Mr Barlow. So in fairness, in my judgment, costs should be in the cause. So I order that the parties' costs be in the cause.

Remarks: