CHAN WING MING WINNIE v. TSE WAH YUEN JOSEPH AND OTHERS

DCCJ 5053/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 5053 OF 2013

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REASONS FOR RULING

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Introduction

1.  On 2 January 2014, I dismissed the plaintiff’s application for an order for interlocutory injunctions and said that the reasons would be handed down in due course.  This I now do.

2.  The plaintiff is a barrister in private practice.  Before she and some of the defendants (“the founding members”) moved to their present leased premises at Room 4701, Far East Finance Centre, 16 Harcourt Road, Hong Kong (“the office premises”), they practised from CNAC Building in Central and the supporting staff were then employed by D4 personally.  Subsequently, CNAC Building was required for re-development and the founding members set up a new set of new chambers (“the Chambers) at the office premises.  On Lucky is a service company incorporated in October 2010 for the purpose of taking up the lease from the landlord and subsequently also to employ the supporting staff instead of D4.  The plaintiff and the first five defendants are its equal shareholders and directors.  D5 and D6 are the door tenants of the Chambers.

3.  On Lucky obtained a 3-year lease of the office premises commencing on 3 January 2011 with an option to renew for another 3 years.  The option was exercised on 11 July 2013 and therefore there is now a new lease (without an option to renew) commencing on 3 January 2014.

4.  From reasons which I do not need to go into detail, the relationship between the plaintiff and all the other members of the Chambers has changed for the worse since they moved into the office premises.  The relationship deteriorated to a point that on 2 July 2013, the plaintiff was given a notice to quit by the unanimous decision of all of her seven chamber mates. 

5.  By this application, she sought, among other things, an interlocutory order against all of her chamber mates, the defendants, for the following:-

(i) an injunction to prevent them or On Lucky from (i) enforcing against her on 2 January 2014 a notice to quit dated 2 July 2013; (ii) withdrawing secretarial, messenger and administrative and other service or support On Lucky used to provide her and (iii) committing any other acts that would interfere with or otherwise injure her enjoyment of or her exercise of her right under the licence;

(ii) a mandatory injunction ordering D1 to inform the Bar Association in writing to the effect that he would not object to the plaintiff to continue with her practice as a barrister from the same chambers address as the defendants as from 2 January 2014 until further notice; and

(iii) D1 to D5 do direct On Lucky to issue invoice for payment of monthly rent and chambers expenses to the plaintiff so that she could meet her payment obligations under the licence. 

The Contention of the Plaintiff

6.  The plaintiff contends that the notice to quit, which was issued in the personal name of the defendants rather than in the name of On Lucky, is defective, invalid and ineffective.  She further contends that she had contributed to the setting up of the Chambers in the expectation, allegedly induced by the founding members of the Chambers, that she would be allowed to stay and therefore she had irrevocable licence in equity basing on the case of Inwards v Baker.[1] She also contends that she is not bound by the Chambers Rules, which was circulated among members of the Chambers in May 2011 and which provide for the expulsion of a member by the unanimous consent of all the other members in writing, as she has never accepted them by word or by conduct.

The Procedural History

7.  Although the plaintiff was given the notice to quit on 2 July 2013, she did not apply for any injunctions until 20 December 2013. On the latter date, the duty judge ordered that the plaintiff commence proceedings forthwith by issuing writ of summons, that the papers be served on the defendants and that the application be heard ex parte with notice to the defendants before a judge. 

8.  On 23 December 2013, the plaintiff issued the writ of summons and filed the statement of claim.  Mr Yeung, who represented the defendants, confirmed that the defendants had received the papers.  As the application had not been made inter parte, the defendants did not file any affirmations in reply to the plaintiff’s affirmation.

9.  Since the hearing before the duty judge on 20 December 2013, there has been some development in this case.  The plaintiff has now obtained a new practicing certificate by using a new practice address.  The plaintiff says, however, that her new chambers cannot offer the same room space and the kind of support that she used to enjoy in the Chambers.  She said that if she was successful in the present application, she would inform the Bar Association to change her practice address back to the office premises.

Relevant Facts

10.  Although the plaintiff and the defendants have been chamber mates for a number of years and they must have met each other almost on a daily basis, it seems that the plaintiff and the defendants have not been on speaking terms for some time, so much so that the communication between the plaintiff and D1 (the head of the Chambers) was done through emails and letters.  From the evidence before me which is contained in the two affirmations of the plaintiff, both the plaintiff and the defendants had made allegations against the other.  Since this is only an interlocutory application and the defendants have yet to file any evidence, it is not my role and I am not in a position to decide who is in the right and who is in the wrong. 

11.  Noting the incomplete picture regarding the evidence and the limited role I have in this application,[2] the objective facts, insofar as relevant to the present application, seem to be as follow: -

(a) The first document evidencing the falling out between the plaintiff and the other members of the Chambers was an email dated 3 November 2011 from D1 to her complaining a number of things and suggesting that they could have somebody paying the rent.  On the same day, there was a second email from D1 telling the plaintiff that he would invoke the Chambers Rules to formally consider whether to give her notice to quit;

(b) Almost eight months later, there was another email from D1 to the plaintiff dated 29 May 2013.  It is apparent from that email that the plaintiff had turned down an invitation from D1 to meet and discuss buying out her share;

(c) In the Chambers Meeting on 10 June 2013, it was resolved that she be given a 6 month notice to quit.  Despite the fact that the plaintiff had been given notice of the meeting several days before, she did not attend that meeting.  The plaintiff exhibited a medical certificate showing that she had a medical appointment during lunch time on the day.  On the other hand, she said in court that before the meeting she was in fact “ambivalent” as to whether to attend; 

(d) The notice to quit, which was issued in the name of all the defendants and signed by D1, was put in the plaintiff’s pigeon hole in the Chambers on 2 July 2013.  By such notice, the plaintiff was required to vacate latest by 2 January 2014.  Noting that the notice had been remained in the plaintiff’s pigeon hole unopened even though she was in office, on 3 July 2013, D1 sent an email to the plaintiff drawing her attention to it.  It is noteworthy that neither the notice to quit nor the email mentioned anything about buying out; 

(e) As aforesaid, On Lucky exercised the option of renewal on 11 July 2013 and on 27 September 2013 the new lease was made commencing on 3 January 2014 for 3 years;

(f) On 1 November 2013, D1 sent an email to the plaintiff reminding her of the notice to quit and informing her that a barrister would be joining the Chambers upon her vacating the room.  Again, there was no mention of buying the plaintiff out;

(g) On 3 November 2013, the plaintiff replied by email saying, among other things, that her interest extended to the option of renewal which she believed had been exercised, that her intention was to stay and that she was not keen to sell her interest.  D1 replied by email on the same day saying that since the plaintiff would not sell, they would not make her any more offer.  D1 also said that the notice to quit would take effect on 3 January 2014 and that all secretarial and chambers support and services for the plaintiff would cease as from that day onwards;

(h) On 11 November 2013, the plaintiff complained to the Bar Association.  The Bar Association replied on 22 November 2013 saying that they were not in a position to investigate the plaintiff’s complaint and she was asked to seek independent advice;

(i) On 8 December 2013, the plaintiff by email asked D1 whether he was insisting on the notice to quit and D1 replied on the same date by asking her what she wanted;

(j) On 12 December 2013, the plaintiff wrote to the Bar Association saying that she had been told by a staff member of the latter that D1 had written to the Bar Association saying that she would not be using the office premises as her practice address as from 2 January 2014 and as a result she had been asked by the Bar Association to provide a new address for registration.  The plaintiff informed the Bar Association that her right to stay on in the Chambers was still a matter hotly contested and court proceedings were imminent.  She asked the Bar Association to indicate its position regarding her future practising certificate;

(k) On 14 December 2013, the plaintiff issued a pre-action letter to D1 and for the first time raised the issue about the validity of the notice to quit.  The plaintiff said that her licence to remain was one of equity which could not be revoked and that her right was not in any manner adversely affected by the Chambers Rules.  The plaintiff demanded D1 to procure the withdrawal of the notice to quit  and to stop interfering with her enjoyment of the licence and her professional practice from the office premises.  On the following day, D1 replied by email, basically refusing the plaintiff’s demand;

(l) On 17 December 2013, the Bar Association replied to the plaintiff  acknowledging that the dispute between the plaintiff and D1, but insisting that in the light of the material presently available, in particular the notice to quit and the contents of the Chambers Meeting dated 10 June 2013, they would not be able to register the plaintiff under the office address for her practising certificate;

(m) On 20 December 2013, the plaintiff applied ex parte for injunctions.  The duty judge, however, ordered that proceedings be issued by writ, that the defendant be given notice of the application and served with the papers and that the matter be adjourned to 2 January 2014 before a judge;

(n) On 24 December 2013, the plaintiff informed the Bar Association about the proceedings, indicating that she would continue to practise from the office premises if she was successful in the application on 2 January 2014.  She also provided a new practice address in case her application was not successful.  The Bar Association replied on the same day urging the plaintiff to provide a valid address for registration;  and

(o) On 27 December 2013, the plaintiff wrote to the Bar Association providing the new address for registration.  On the following day, the Bar Association issued a practising certificate to the plaintiff using the new address.

The Applicable Law

12.  The legal principles governing the granting of interlocutory injunctions are well-established and a summary of them can be found at

Hong Kong Civil Procedure 2014, at §29/1/8-17.  In brief, the case authorities emphasize that the grant of an interlocutory injunction is a remedy that is both temporary and discretionary; that it is no part of the court’s function at this stage to try and resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend or to decide difficult questions of law which call for detailed argument and mater considerations; that the facts of individual cases are important; and that the court is required to consider the following:-

(i) whether there is a serious question to be tried;

(ii) whether damages awarded at the trial or payable under an undertaking would be adequate as a remedy; and

(iii) whether the balance of convenient lies in favour of the granting of the interlocutory injunction.

13.  Where the court is satisfied that the defendant has no arguable defence to the plaintiff’s claim, it is unnecessary for the court to consider the “balance of convenience” before exercising its discretion to grant an injunction: Hong Kong Civil Procedure 2014, at §29/1/30.

14.  Furthermore, where the plaintiff seeks a mandatory injunction, he or she would be required to show “a strong prima facie case” and that the court must feel a “high degree of assurance” that at trial it will appear the injunction as rightly granted: Hong Kong Civil Procedure 2014, at §29/1/29. 

CONSIDERATION

As to (i): whether a serious question to be tried

15.  Having considered the affirmation evidence before me and the plaintiff’s submissions, I am satisfied that there is a serious question to be tried. 

As to (ii): whether damages adequate as a remedy

16.  However, I have some reservation whether the case is such that the defendants do not have an arguable defence to the plaintiff’s claim as I have doubt whether the plaintiff is, as she said, not bound by the Chambers Rules after she had been staying working in the Chambers for so long, even though she has not given any express acceptance of them.  The scope of the Chambers Rules is extensive and apart from expulsion they also cover matters like office administration, contribution and expenses, members’ conduct, visitors, use of conference room and chamber staff.  Without the benefit of the evidence from the defendants, I am slow to infer that there has not acceptance by conduct on the part of the plaintiff.  This is a matter ultimately for the trial judge to decide.

17.  The argument that the notice to quit was issued not by the correct entity seems to me to be a purely technical one, given the fact that the issuers of the notice include all the other shareholders of On Lucky.  The merits of the argument about the validity and the legal effect of the notice to quit, in my view, calls for detailed argument and mater considerations before a ruling can be made.  I appreciate that the plaintiff does not have a duty to forewarn the defendants about the questionable validity of the notice to quit. Yet, the fact that the issue was raised and the application for injunctions was made only when the notice received was soon to expire tends to suggest that the plaintiff would not suffer irreparable harm if the injunctions sought were not granted: See Hong Kong Civil Procedure 2014, at §29/1/31.

18.  Besides, its seems to me that the plaintiff is seeking to extend the principles in Inwards v Baker so as to allow her not only to stay, but also to continue to receive secretarial support and other services provided by On Lucky.  This is, in my view, a difficult question of law.  The legal issues apart, it is not entirely clear from the evidence as to when the supporting staff, which was previously employed personally by D4, became the employees of On Lucky.  In rule 48 of the Chambers Rules, it is said that “As soon as practicable, all staff shall be changed to be hired by On Lucky (HK) Ltd.”  The Chambers Rules only came into effect on 1 June 2011.  It seems therefore that there were staff members working in the Chambers who were yet to be employed by On Lucky then.  That raised the further issue as to whether the plaintiff’s “irrevocable licence”, if any, also gave her entitlement to secretarial support and services or whether it was a separate entitlement arising independently from her acceptance, if any, of the Chambers Rules.  Again, all these are questions which cannot be resolved without further evidence, in-depth legal research and mature consideration and there are not apt for interlocutory proceedings like the present one. 

19.  In any event, I am not satisfied that in case the plaintiff were successful in her action against the defendants, damages would not be an adequate remedy.  There are also no reasons for me to doubt the ability of the defendants to pay for damages, if awarded.  In my view, in case the plaintiff was successful, damages would be adequate compensation.  My reasons are as follows:-

(a) Although the plaintiff’s new office may not be as spacious, its conditions may not be as good and its support may not be as satisfying as she would like, she can always look for other office premises which may suit her requirement.  I accept that it will take time and expenses for her to identify and move to a set of chambers which would meet all of her needs.  However, any time and expenses which she may be required to spend can be adequately compensated in financial terms; 

(b) Moreover, in a place like Hong Kong, it is a fact of life that barristers would be required to change their practice addresses or switch chambers from time to time.  I do not see how the mere fact that she has to change her practice address would affect her professional standing and reputation;    

(c) Furthermore, what On Lucky has got is only a renewed lease for another three years.  Unlike the old lease, the new lease does not contain any option for renewal.  Therefore, it is uncertain what would happen three years later.  Even assuming that the plaintiff is right that she has an “irrevocable licence” to remain, it is not the case that she can stay here indefinitely; and

(d) Objectively speaking, given the difficult relationship between the plaintiff and all the other members of the Chambers, if the plaintiff remains a shareholder of On Lucky it is foreseeable that the other members may not wish to use it as a corporate vehicle for any future purposes.  It is also more likely that not that the relationship between the plaintiff and the other members as chamber mates will eventually come to an end. 

 As to (iii): balance of convenience

20.  Given the ruling on (ii) above, there are case authorities that the Court is not enjoined to look at (iii).[3] However, for the sake of completeness, however, I will also deal with it as follows. 

21.  Having considered the available evidence before me and the submissions of the plaintiff, I come to the view that the balance of convenience does not lie in favour of the granting of the interlocutory injunctions sought.  My reasons are as follows:- 

(a) Now that the plaintiff has found a new set of chambers, she can continue her practice from the new address.  I can see no necessity for her to remain in the office premises in order to practice; and

(b) That the plaintiff is now in bad terms with all the other members of the Chambers can be gleaned from the fact that the latter voted unanimously to evict her.  Besides, the enthusiasm of the plaintiff to take part in running the Chambers has admittedly faded, even before her taking out of the present action.  In the circumstances, even if her continued presence in the Chambers may be, as the plaintiff contends, “non-intrusive”, it would not, in my view, be conducive to the proper running and healthy development of the Chambers and a harmonious work atmosphere there. 

Orders

22.  Based on the above, I dismiss the plaintiff’s application.  I note here that this case should be resolved as expeditiously, and if possible, amicably as well, so that the parties can put this matter behind them and get on with their respective professional practice. 

23.  Having heard both sides, I make no order as to costs.