XCHRX WAN PAK FAI AND ANOTHER v. INFORMLINK CONSULTANCY LTD. AND ANOTHER

HCA 17989/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 17989 OF 1999

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D E C I S I O N

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1. Of the three summonses originally before me I now only have one, that is an application by the plaintiffs to continue an injunction made ex parte by Madam Justice Beeson on 22 November 1999 restraining the 1st and 2nd defendants from entering three properties, being the workplaces and residence of the 1st plaintiff. The 2nd defendant did not appear and has expressed no objection to the application by letter, so this hearing only concerned the 1st defendant and the 3rd defendant, added by consent. When the matter came before me on 14 January 2000, for reasons I will deal with shortly it was apparent that the injunction was probably no longer needed by the plaintiffs, and in any event the 1st and 3rd defendants were prepared to give an undertaking to the Court in the same terms. However, it was made clear by Mr Lee, for the 1st and 3rd defendants, that that the undertaking was given voluntarily and not as a condition of discharging the injunction, which he maintained should not have been granted in view of the unsatisfactory nature of the plaintiffs' evidence and material non-disclosure, as a result of which he seeks the costs of the application. This is now the sole matter for my determination, but requires an examination of the history of these proceedings and the events which led to them.

2. The 1st defendant is a debt collection agency and the 3rd defendant is their employee. The 2nd defendant is a real estate agency which on 27 October 1997, acting on behalf of a company called World Empire Investment (CI) Ltd, entered into a tenancy agreement with a company called Excel Sino Ltd for a shop in Fanling for a period of two years and 17 days from 15 July 1997 to be used as a property agency by the 2nd plaintiff. The agreement was signed by the 1st plaintiff on behalf of Excel Sino Ltd, although in what capacity was not specified. Some months later the property was vacated by the tenant which, it is alleged, now owes a sum in excess of $1 million to the landlord. The 1st defendant was employed by the 2nd defendant to seek to recover the debt.

3. Excel Sino Ltd, although having a registered office at a flat in Tin Shui Wai, is a two share company, each of the $1.00 shares being owned by two other companies in the British Virgin Islands. These two companies are in turn also the directors. As far as I can tell, there is no record of any assets in Hong Kong. The 2nd plaintiff, who was the intended occupant of the property in question, is now also owned by two BVI companies who are also the directors. However, the 1st plaintiff was a director from 3 August 1998 to 30 April 1999. The 2nd plaintiff still carries on business in two shops in Kingswood Richly Plaza, Tin Shui Wai and the 1st plaintiff is the manager. However, he is also the person who signs the 2nd plaintiff's annual returns.

4. To complete the picture, one should also mention three other companies, Yenton Ltd, Yencon Ltd and Yenmax Ltd. Until 1 December 1997, Yenton Ltd and Yencon Ltd were the shareholders and directors of the 2nd plaintiff, when they transferred their shares to the BVI companies. In the case of each of these three companies, the other two are the shareholders and directors, and the registered office of each is the business address of the 2nd plaintiff.

5. It is apparent from all this that, apart from the 1st plaintiff, there is no person other than corporate entities connected with any company involved with the 2nd plaintiff or Excel Sino Ltd, and it was the 1st plaintiff who seems to have signed many of the company documents for them. The 1st defendant then, instructed to seek recovery of the unpaid rental, not unnaturally went in search of the 1st plaintiff to ask for repayment, and it is in respect of their alleged behaviour in so doing that these proceedings arise.

6. In his affidavit in support of the ex parte application before Madam Justice Beeson, the 1st plaintiff, before dealing with the defendants' behaviour, apart from saying that he was the manager of the 2nd plaintiff, claimed no connection with either that company or Excel Sino Ltd, saying in particular:

"5.	I was not and am not a shareholder or director of Excel Sino or 2nd Plaintiff.
	I was not and am not related or employed by Excel Sino. I signed "WPF-1" because the premises was let for the use of the 2nd Plaintiff who was and still is my employer."

7. Mr Lee says that the 1st plaintiff, is being less than honest here, and is clearly trying to give the impression that he has, and has had, no dealings with these companies apart from being an employee of the 2nd plaintiff. I agree. This is a clear and blatant attempt to distance himself from these companies and any liability they may have and to try to persuade the Court that the 1st defendant had no reason to seek to contact him. I find his explanation in his second affidavit, that his statement above was made on the basis that he was not a director at the time of signing the tenancy agreement on behalf of Excel Sino Ltd, to fall very short of that standard of frankness expected when asking the Court make such an order in the absence of the party against whom it is to be made.

8. Turning to the allegations themselves, these consist of telephone calls, a memo posted to the 1st plaintiff, two visits to his office and one to his residence. The 1st plaintiff claims there were numerous telephone calls starting from September 1999 looking for him. One is bound to wonder why, if he knew nothing about the debt and was an innocent party to what had gone before, he never returned any of them, or made himself available to discuss it. The 3rd defendant denies making more than one telephone call, but for the purposes of this application I will accept what the 1st plaintiff says, that there was more than one. There is no suggestion that these calls were offensive or abusive, but were merely requests to contact the 1st plaintiff. The memo sent by post, although not translated, I am told makes no particular threat; again a request to contact. It is difficult to see what at that stage amounted to a nuisance.

9. The 1st plaintiff then claims that there was a visit to his office on 4 October 1999 by two men who "demanded" to see him, and on being informed he was not there, left another letter urging immediate payment of the amount claimed. Again, it cannot be described as threatening nor abusive, the strongest part of it being:

"We will not be responsible for any embarrass (sic) situation occurs in collection if we do not receive your payment within 7 days of this notice."

10. A threat of possible embarassment is hardly putting someone in fear of risk to life or limb. This visit is again denied by the 3rd defendant, but for the purpose of the matter before me I will assume that it happened.

11. The next day the 1st plaintiff's solicitors sent a letter to the 1st defendant, under the name in which these proceedings were originally brought, complaining of "disturbance, annoyance and nuisance" to their client and referring to telephone calls and the memos. It is noted that, in spite of the nature of the injunction applied for, no complaint was made of the defendants' visits to the premises. Another letter was sent to the 1st defendant on 8 October, again complaining of telephone calls and enclosing an undertaking for them to sign. The defendants did not respond. However, nothing more appears to have happened until over a month later, on 17 November1999.

12. On that day, the 3rd defendant again visited the plaintiffs' office looking for him. The plaintiff claims that they looked for him "in a very rude and menacing manner", shouted to his secretary to telephone him, and spoke to her in a threatening manner. No further details of the alleged behaviour were provided by Miss Yau, the secretary, apart from saying that she was told by her colleague that they were "unfriendly", and they clearly did not stay more than a few minutes after being told the 1st plaintiff was not there.

13. The last incident was later that day when the 3rd defendant and a colleague visited the 1st plaintiff's residence. His wife and children were in the garden. The men did not go in but asked through the gate if he was there, and, on being told he was not, left.

14. It is on this evidence that the plaintiffs sought an injunction restraining the defendants from entering the office, shop and residential premises of the 1st plaintiff, and I say immediately that I find it difficult to see on what basis such an injunction can be justified. Until these proceedings started there had been no complaint of the defendants entering on any property uninvited. Their visits cannot by any stretch of the imagination be trespass. A visitor to any business premises open to the public must have an implied licence to enter on lawful business. The profession of debt collector may not be a pretty one, and their visits may well be unwelcome, but it is not illegal providing they use lawful approaches. It may be that a forceful manner is sometimes displayed by those seeking to collect debts, but there is no suggestion here of any behaviour overstepping permissible bounds. As to the residential premises, they did not even enter, and the highest the 1st plaintiff can put it is that "they looked fierce". I note that there is no evidence from his wife to confirm this or to say what effect the visit had on her.

15. In his affidavit the 1st plaintiff says that he is advised by his solicitors that the defendants wrongfully trespassed the three premises. As I have pointed out above, their visits to the business premises cannot be trespass until they are asked to leave, or not to enter. This never happened before the proceedings commenced. They did not enter the residence at all.

16. The evidence on which this injunction was sought in my view falls well below the standard expected by the courts on ex parte applications, and subsequent evidence has shown that the 1st plaintiff did not make the full and frank disclosure which is a strict requirement for such applications. He did not admit his connection with the 2nd plaintiff and Excel Sino Ltd in what seems to me to be an attempt to give the impression that he was totally unconnected with any of their dealings. This is clearly a material matter which the Court had a right to know. In describing what he claimed was the behaviour of the defendants, he used generalizations and emotive language, little of which was supported by those who actually witnessed the events, unlike himself, who was never present.

17. The principles of such evidence is well summarized by Bingham J in Siporex Trade S.A. v Comdel Commodities Ltd [1986] Lloyds LR 428, where. At p. 437 he says:

"Such an applicant must show the utmost good faith and disclose his case fully and fairly. He must, for the protection and information of the defendant, summarize his case and the evidence in support of it by an affidavit or affidavits sworn before or immediately after the application. He must identify the crucial points for and against the application, and not rely on general statements and the mere exhibiting of numerous documents. He must investigate the nature of the cause of action asserted and the facts relied upon before applying and identify any likely defences. He must disclose all facts which reasonably could or would be taken into account by the judge in deciding whether to grant the application. It is no excuse for an applicant to say that he was not aware of the importance of matters he omitted to state."

18. I am satisfied that, had the full facts as now disclosed been made to Madam Justice Beeson, this injunction would not have been granted, and on that basis alone I would have ordered its discharge. That is no longer necessary, as the 2nd defendant has now withdrawn its instructions to the 1st defendant to pursue this matter and there is no evidence that they will renew them. Even if they had not, I am satisfied that the evidence now before me would not justify an injunction in the terms sought.

19. It follows that the 1st and 3rd defendants must have the costs of this application. I also order that these be taxed and paid forthwith. In the light of the evidence I have seen, I consider that there is at least a possibility that these proceedings will not continue to trial. Consequently an order for costs "in any event" may in the end result in the 1st defendant having to bear their own costs. That, in my view, would defeat the object of my order. I will not go as far as I have been requested by counsel and order taxation on the indemnity basis. While I wish to express my disapproval at the means employed to obtain this injunction, and the lack of merit in the application to continue it, I believe an order on the usual party and party basis will meet the justice of the situation.