RORY MACDIARMID AND ANOTHER v. PARAYEAR INVESTMENT LTD AND OTHERS

1989, No. A4053

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. On 21st July, I granted an injunction ex parte in favour of the plaintiffs restraining the defendants from committing a nuisance as a result of noise caused by building work carried out to premises adjacent to the plaintiffs' flat in Stanley Village Road. The matter has been resolved with regard to the 1st and 3rd defendants, but at the hearing of the inter-partes summons on 1st of August, the 2nd defendant resisted the plaintiffs' application for costs the plaintiffs having agreed to an order that the injunction be discharged.

2. The 2nd defendant was sued as the landlord of the plaintiffs' premises but since the grant of the lease to the 2nd plaintiff by whom the 1st plaintiff is employed, and for whose benefit the lease was entered into, the 2nd defendant's interest had been transferred to the 1st defendant. However the plaintiffs alleged that they had never been served by the 2nd defendant with notice of any assignment.

3. In fact it now appears, from the evidence that the 2nd defendant was at all material times holding the property in trust for an associate company Hathras Industries Limited (Hathras) and by a vesting assignment in December 1987 assigned all its interest to that company. It was Hathras who sold the property to the 1st defendant in March 1988. However, the plaintiffs were not aware of any declaration of trust by the 2nd defendant in favour of Hathras. Rent was paid by the plaintiffs to Knight Frank Kan & Baillieu (Services) Ltd. who at all times described themselves as either the agents of the landlord, or as acting for the owner apart from two occasions when rent was paid to Chinachem according to two receipts produced by the 2nd defendant.

4. The plaintiffs' solicitors wrote a letter of complaint to the 2nd defendant on 1st March this year about the alleged nuisance, but the letter could not be served as the 2nd defendant had left the address stated in the lease. However, as the 2nd defendant was believed to be a member of one the Chinachem Group it was then sent to the group's address at Mody Road, but it was returned as it was denied that the company was of the Chinachem companies. However the letter was later accepted by Mr Gary Wong who is the Manager of the 2nd defendant and also Hathras, but no reply was received from the 2nd defendant.

5. The plaintiffs' solicitors wrote three letters to Knight Frank Ran & Baillieu (Services) Ltd. on 7th June, 24th June and 10th July in which further complaints were made bout the noise coupled with an allegation of breach of contract. This correspondence resulted in a letter dated 18th July from solicitors instructed by the 1st defendant who claimed to be the landlord of the premises which was the first intimation that the plaintiffs had that the 2nd defendant was no longer the landlord.

6. When I heard the ex parte application on 21st July I was informed by Mr Scott, counsel for the plaintiffs, that as they had not received any notice of an assignment of the lease it was deemed prudent to join both the 1st and 2nd defendants as parties to the proceedings. Service of the writ together with the 1st plaintiff's affidavit and the inter-panes summons were effected upon the 2nd defendant on the 28th July, but nothing was heard until the 31st of July when a fax was received from solicitors for the 2nd defendant in which it was stated that an application would be made at the hearing of the inter-partes summons on 1st August to discharge the order and to apply for costs against the plaintiffs. No evidence was filed by the 2nd defendant nor was any explanation given for the application.

7. I adjourned the hearing at the request of counsel for the 2nd defendant until to day and granted leave to the 2nd defendant to file evidence. Evidence has since been filed by the 2nd defendant together with further evidence by the plaintiffs. It is abundantly clear, upon the evidence filed, that the plaintiffs were not aware that the 2nd defendant was no longer the landlord. The 2nd defendant has attempted to put the blame upon the plaintiffs for not making proper enquiries to ascertain the true position whereas the 2nd defendant was entirely responsible for the confusion that has occurred. Not only did Mr Gary Wong fail to respond to the letter of 4th April, but the 2nd defendants solicitors acted in a very dilatory manner after service of the proceedings by their failure to provide an explanation. The legal representatives for the 2nd defendant have exacerbated the situation by putting forward a wholly unmeritorious argument whilst in addition certain of the evidence that was filed was misleading with regard to without prejudice negotiations said to have taken place between the plaintiffs' solicitors and the 2nd defendant's solicitors that was referred to by Mr Tam, a director of the 2nd defendant in his affirmation of the 31st July.

8. In my judgment the plaintiffs acted quite properly in making the 2nd defendant a party and were entitled to continue those proceedings having regard to the unreasonable attitude that was adopted. It was not until service of Mr Gary Wong's affirmation of the 4th August that the plaintiffs became aware of the true position. If Mr Gary Wong had replied to the letter of 4th April or prompt action had been taken by the 2nd defendant's solicitors in providing an explanation, the present application would have been unnecessary. As a result the plaintiffs are entitled to an order for costs as sought whilst the injunction against the 2nd defendant will be discharged.