C & F GARMENT FACTORY LTD v. CARLSWAY INTERNATIONAL LTD

DCCJ719/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 719 OF 2004

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DECISION

1.  I have two summonses to deal with.  In the first summons the Defendant applies for the following order:-

“(1) the ex parte injunction granted by Her Honour Judge H.C. Wong dated the 10^th day of May, 2006 that

(i) the Plaintiff, by its agent or servant or whosoever, be restrained from direct communication with Chan Fun Tao, Chan Chat Bun, Tang Wai Man, Chan Tse Wing, Chan Chun Pun, Chan Yi Kiu, Wong Han Kiu and the employees of the Defendant by way of telephone, fax, letter, e-mail or whatsoever means; and

(ii) the Plaintiff, by its agent or servant or whosoever, be restrained from entering or seeking to enter or otherwise coming within 50 metres of:-

(a) the registered office of the Defendant at 3^rd Floor, Rainbow Industrial Building, 149 Wai Yip Street, Kwun Tong, Kowloon, Hong Kong;

(b) the residential home of Chan Chat Bun, at Flat D, 17^th Floor, Block 6, Esplanada Villa, Tsing Yi, Kowloon, Hong Kong; and

(c) the residential home of Chan Fun Tao at Room 2214, Block 3, Joyful Villas, 11 Hong Lee Road, Kwun Tong, Kowloon, Hong Kong.

be continued until trial or further order of the court;”

2.  In the second summons, the Defendant applies for the following order:-

“(1) the ex parte injunction granted by Her Honour Judge H.C. Wong dated the 12^th day of May, 2006 to restrain the Plaintiff whether by itself, Ms. Sze Pan Pan, its agents or servants or otherwise whosoever from:-

(a) publishing to whosoever that the Defendant and/or the witnesses of the Defendant, namely Chan Fun Tao and Chan Chat Bun (“the Witnesses”) is indebted to the Plaintiff and/or its agents or servants or that the Defendant would be wound up or that the Witnesses would be unable to meet his/their financial obligations;

(b) harassing or abusing whosoever who has business relationship with the Defendant and/or the Witnesses; and

(c) pretending or impersonating as the agents and/or servants of the Defendant and/or the witnesses to communicate with whosoever having business relationship with the Defendant.

be continued until trial or further order of the court;”

3.  In the Statement of Claim, the Plaintiff claims against the Defendant for monetary damages for breach of contract.  By its Defence and Counterclaim, the Defendant claims against the Plaintiff monetary damages for breach of contract.  The trial of this action was scheduled to commence in September 2006.  On 10 and 12 May 2006 respectively, the Defendants obtained the ex parte injunction orders referred to in the above summonses from H.H. Judge H.C. Wong.  Now the Defendant asks this Court to continue these two orders, but the Plaintiff seeks to have them discharged.

The ex parte injunction application made on 10 May 2006

4.  In support of the application for ex parte injunction made on 10 May 2006, the 2 directors of the Defendants, namely Chan Fun Tao and Chan Chat Bun (father and son), made an affirmation respectively.

5.  In his affirmation, Chan Fun Tao stated that at about 10:20 p.m. on 8 May 2006, he received a telephone call on his mobile telephone from a Mr. Cheung (“Cheung”), who said that he acted for the Plaintiff and was collecting US$100,000 from him.  Upon returning to his home (referred to under item (1)(ii)(c) of the first summons) at about 10:30 p.m. his son Chan Chun Pan told him that someone had telephoned his home number; he claimed that he was from a solicitor’s firm and that he needed to double-check his personal information with him because he had made a will, and asked his son Chan Chat Bun if they were living at Room 2214, Block 1.  His son told him that someone called about 10 times fairly continuously, using the foulest language in demanding to know when he would return home.

6.  After he had returned home Cheung rang up, saying that he would come with a whole gang to his home and see how he would die.  At about 11:00 p.m. 4 Chinese males came up to the front door, and demanded him to settle an alleged debt of US$100,000, and shouted abuse in foul language.  He made a report to the police and the police took these men downstairs. 

7.  A security guard of the Defendant’s registered office (referred to under (1)(ii)(a) of the first summons (hereinafter called “the Office”)) told him that on 8 May 2006 a Chinese male posted 20 odd posters at the lift lobby outside the Office.

8.  In the morning on 9 May 2006, Cheung continuously telephoned the Office at 2372 7618.  He swore at the Defendant’s staff and repeatedly said that he would entertain him till the end.

9.  Another man telephoned his mobile telephone, saying that he had arrived.  At that moment, 4 Chinese males entered the reception area of the Office.  He and Chan Chat Bun went up to meet them.  One of them said that they acted for and on behalf of the Plaintiff and asked the Defendant to pay up, produced 23 pages of the Plaintiff’s purchase orders and associated documents, and accused the Defendant of supplying rubbish goods to the Plaintiff.  The police arrived, and these 4 men left with the police.  Then Cheung rang up his mobile phone, and shouted at him in foul language.  About 10 minutes later, Cheung rang up, telling him that Ms. Sze of the Plaintiff would come up with them to the Office.  About 4:20 p.m. Ms. Sze Pan Pan (“Ms. Sze”) and 6 Chinese males came to the Office.  His staff called the police again.  He and Ms. Sze could not reach any agreement, and she left with the 6 men.

10.  After 10 minutes later Cheung rang up, saying that he and his gang would attend at his home and the home of his son.

11.  All these intimidating and threatening visits and telephone calls caused great distress and fear of assaults to his employee, his son and their respective family, and disturbed the operation of the Defendant’s business.

The affirmation of Chan Chat Bun dated 10 May 2006.

12.  In his affirmation dated 10 May 2006, Chan Chat Bun stated that at about 9:30 p.m. on 8 May 2006, a Chinese male who identified himself to be a Mr. Cheung (“Cheung”) telephoned his mobile telephone number of 9194 1517.  He told him that he was acting for and on behalf of the Plaintiff and demanded the Defendant to pay him US$100,000.  If the Defendant should fail to pay, both his family and he would be put in danger.  He knew how to make him answer his calls.  Two minutes later, a Chinese male who identified himself as “Mr. Cheung” telephoned his home telephone number, and told his wife (Tan Wai Man) to be careful while going in and out.  He asked whether their daughter was about 4 years old.  She hanged up and was very frightened.  About 10 minutes later, Cheung rang him up, asking if the Defendant would pay up.  He said he knew the address of his home and had already sent his staff to his home.  He further said, “Your daughter shall be careful when she goes to school.  You do not want to lose your daughter, right?”  He told Cheung not to bother them and hanged up.

13.  Thereafter, Cheung kept on ringing up his home.  All these intimidating and threatening visits and telephone calls are causing great distress and fear of assault to employees and the directors of the Defendant and his family.  They also disturb the operation of the Defendant.

The ex parte injunction application made on 12 May 2006

14.  This application was supported by the 2^nd affirmation of Chan Chat Bun dated 12 May 2006.  In this affirmation Chan Chat Bun said that at about 11:00 p.m. on 10 May 2006, he received a telephone call from Chung, who said that he would snatch his daughter.  He made a report to the police. 

15.  In the morning of 11 May 2006, he started to receive telephone calls from the Defendant’s clients and his friends, who told him that they had just received telephone calls from an unidentified caller who said that he owed them money and/or that the Defendant was having severe cash flow problems and would soon be would up. 

16.  An unknown caller telephoned a transportation company used by the Defendant, namely, Chinalink Logistic Limited, and pretended that he was a staff of the Defendant.  He complained that the Defendant’s goods were lost and demanded immediate investigation to be carried out by the logistic company. 

17.  An unidentified person faxed a defamatory statement to one of the Defendant’s man customer (Esprit Hong Kong Macao Commercial Offshore Limited) to the effect that the Defendant was in financial trouble. 

18.  He was informed by the following companies and/or persons that they received many such defamatory calls from an unidentified person:-

(i) Ben of G Fair Textiles Company Limited;

(ii) Jack of Best Reach Textile Company Limited;

(iii) Ching of Kwan Tat Industry Limited;

(iv) Thomas, Tai and Tonny of 338 Trading Limited;

(v) Yan and Jow (friends of affirmant);

(vi) Chinalink Logistic Limited;

(vii) Ms. Ho and Ms. Tong of Esprit Macao Commercial Offshore Limited;

(viii) Accounting Department of Esprit Macao Commercial Offshore Limited.

19. The unidentified caller continuously shouted foul languages at the person over the telephone and asked each of them what was their relationship with him.

20. All the acts were calculated to cause damage to the reputation of the Defendant and the affirmant as well as to cause fear to the safety of his daughter.  They were causing great distress and fear to the innocent receivers.  The operation of the Defendant was severely disturbed. 

The opposition of the Plaintiff

21. In opposing the Defendant’s application, the Plaintiff relies on the affirmation of Sze Pan Pan.  She is the manageress and the person responsible for the administration and day-to-day operation of the Plaintiff.  She said that she and the Plaintiff had no knowledge of the matters complained of by the Defendant over the period of 8 May to 10 May 2006 in relation to the alleged wrongful conduct of the Plaintiff’s debt-collecting agent Kam Ho Investigation Company (“Kam Ho”) it appointed on 6 May 2006 as its agent to collect the debt due from the Defendant.  It was an express term of the appointment that Kam Ho should only use lawful means to recover the debt.  So far as she was aware the Plaintiff had not conducted themselves in any wrongful manner as alleged by the Plaintiff.  However, in view of the Defendant’s complaint as disclosed in the Defendant’s affirmations about the inappropriate manner of Kam Ho in the course of getting payment, the Plaintiff immediately terminated Kam Ho’s appointment in writing on 19 May 2006, in order to avoid causing the least uneasiness on the part of the Defendant.  If the alleged complaints against Kam Ho were true, such conducts were outside the express or implied authority of its authority and that the Plaintiff has not instigated, authorized or ratified any of these acts, and that such conducts had already been entirely abated. 

22. On 9 May 2006, she was contacted by a Mr. Lee of Kam Ho in the afternoon of 9 May 2006.  Chan Chat Bun refused to talk to him and his 5 colleagues who were present together but would only talk to the Plaintiff’s representative.  He asked her to join them. She arrived at the Defendant’s premises at about 4:20 p.m.  She and Chan Chat Bun and Chan Fun Tao met and had discussion in a room.  No result was achieved in the discussion.  So she left with the 6 men. 

23. The Plaintiff’s Counsel argues that no writ or originating summon has been issued as a basis for the ex parte application for the Injunctive Orders against the Plaintiff.  The Defendant has not made out a (serious) case to be tried by way of a formal pleading.  The complaints against the Plaintiff are independent causes of action from the subject matter in the current action DCCJ 719/2004.  Up to 23 May 2006, no separate writ or originating summons has been issued.  The Injunctive Orders cannot stand in a vacuum.

24.  I accept the Defendant’s submission that there are serious questions to be tried.  Such questions have been disclosed in the Defendant’s affirmations.  According to rule 1 order 29 of the Rules of the District Court, in an application for grant of an injunction, and where the case is one of urgency, such an application any be made ex parte on affidavit before the issue of the writ or originating summons.  Thus at the time the injunction is applied for, no formal pleading is required in case of an urgent situation.  At the ex parte application stage, the Defendant was invited by the learned judge to make an undertaking to the Court that they would amend the counterclaim to include the causes of action in support of the injunctive relief.  At the hearing of these proceedings there was an application for amending the counterclaim for this purpose.  But this application was adjourned for argument at a later stage.  Thus the Defendant did what it had undertaken to the learned judge.

25.  The Plaintiff contends that the persons specifically named in the Injunctive Orders are not parties to the present proceedings giving rise to the following problems:-

(1) locus standi of the alleged victims (Mr. Chan Fun Tao etc.) of the wrongful acts and the subject of the Injunctive Orders (especially Ms. Sze Pan Pan).

(2) Enforceability of the Injunctive Orders by and against non-parties to a suit.

(3) Entitlement to and liability for costs.

26.  The complaints will be the subject matter of causes of action to be included in the counterclaim.  The application of the proposed amendment to the counterclaim will be considered in due course.  The alleged problems do not arise, if the Court grants leave to the Defendant to amend its counterclaim.  If no such leave is given, of course, the Plaintiff is entitled to ask the Court to discharge the ex parte injunction orders.

27.  The Plaintiff avers that there is no evidence that the Plaintiff and/or Sze Pan Pan were responsible for or were the masterminds of the alleged wrongful conducts committed by the debt collection agent.  It is a matter for trial.  This is not a valid ground to discharge the injunction orders.

28.  The Plaintiff argues that there is no urgency of the matter.  After considering the Defendant’s affirmation, I simply do not accept to this contention.  The matters disclosed required urgent treatment.

29.  The Plaintiff also argues that Sze Pan Pan is not a party to the matter.  But in the intended amendment to the counterclaim she is named as a party.  Under the present injunctive order, her name is expressly mentioned.  She is the employee (servant) of the Plaintiff.  The Plaintiff is not a natural person.  Its act can only be done through natural persons.  When an injunction is imposed upon it, the injunction must also be imposed upon its agents or servants who carry out the wrongful conduct.  Since Sze Pan Pan is the Plaintiff’s servant and she is closely connected with the appointment of the debt collecting agent, the injunction orders also apply to her.  Instead of leaving all the Plaintiff’s servants unnamed, it would not be wrong to name her as the Plaintiff’s servant.  It cannot be an infringement of the rules relating to injunction simply because of expressly naming a person whilst if not so named, that person is still likewise subject to the restrictions of the injunction orders. 

30.  At the close of the day, at about 5:00 p.m. on 24 May 2006, the Plaintiff made a proposal that it would undertake not to engage a debt collecting agent to collect the debts from the Defendant.  But this proposal was declined by the Defendant.  Thus no undertaking was in fact given by the Plaintiff.

31.  For the reasons given above, I order that the 2 injunction orders made by H H Judge H.C. Wong are to be continued until trial or further order of the court.

Costs

32.  I make an order nisi, to be made absolute in 14 days’ time, that the Plaintiff do bear the costs of this application, to be taxed if not agreed, with certificate for Counsel.