XCHRX BEST LORD LTD. v. SUN NGAI AND ANOTHER

HCA993/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.993 OF 2000

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J U D G M E N T

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1. This is the second application by the plaintiff for an interlocutory injunction against the defendants. The plaintiff's first application was heard by me on 17 March 2000 when the plaintiff was represented by Desmond Keane S.C., leading Mr Hylas Chung. Insofar as the first application was concerned, I had dismissed the plaintiff's application for an interlocutory injunction against the defendants. The plaintiff, now represented by Mr Benjamin Chain, makes a second application for the same relief against the defendants.

2. By reason of the fact that the plaintiff is asking for a second bite of the cherry, the defendants take a preliminary point that the plaintiff is not entitled to do so. I shall deal firstly with this preliminary point.

Preliminary point

3. I do not propose to go into all the facts of this case which have already been dealt with by me in my earlier judgment given on 11 April 2000. This judgment, therefore, ought to be read in conjunction with my earlier judgment. For present purposes, it suffice to say that the plaintiff's first application was argued on the basis of an implied easement of necessity. I had ruled that, on that basis, the plaintiff has failed to make out a good arguable case and, accordingly, dismissed the plaintiff's application for an interlocutory injunction.

4. There can be no doubt that in applications of this nature, on the basis of changed circumstances, a plaintiff is always entitled to bring a second application for an interlocutory injunction despite the fact that the plaintiff does not succeed on the first occasion. However, the basis for this second application by the plaintiff is not on the footing of changed circumstances but that Mr Chain seeks to argue the plaintiff's case on a different legal basis than that argued by Mr Keane at the first application. The basis upon which Mr Chain seeks to argue the plaintiff's case is that the defendants are in breach of the Deed of Mutual Covenant. Although some further evidence has been put in by the plaintiff for the second application, that evidence was available and could have been put in at the plaintiff's first application but was not. Moreover, the footing on which the plaintiff now argues its case in the second application could have been argued by the plaintiff at its first application but was not. Not surprisingly, therefore, the defendants have taken this preliminary point to say that it is an abuse of court's process for the plaintiff to be allowed to have this second bite of the cherry when all these matters could have been canvassed at the first application but was not. The defendants concede that this is not a matter of res judicata since these are interlocutory applications and not final orders or final determination of the matter. The defendants also accept that this is not a case of issue estoppel since the present argument put forward by the plaintiff has not been previously argued. The defendants, however, say that this is an abuse of court's process by the plaintiff and that the proper course that the plaintiff should have adopted was to appeal my earlier order dismissing the plaintiff's first application for interlocutory injunction. The plaintiff's answer to that submission of the defendants is that there is nothing to appeal from since the plaintiff accepts the correctness of my earlier order, on the basis that it was argued by Mr Keane, S.C.

5. I am of the view that in the present case, it is not an abuse of court's process for the plaintiff to bring a second application. Whether or not it is an abuse of court's process is to be gaged by the substantive arguments put forward at the second application and not by the fact of a second application. If the court decides that the arguments put forward at the second application could and should have been put forward in the first application, then that is a matter that could be reflected in the costs order at the end of the day. Accordingly, I shall go on to consider the merits of the plaintiff's argument as put forward by Mr Chain.

Substantive arguments

6. Once again, for the substantive arguments, I do not propose to repeat the facts of this case which have already been fully set out in my earlier judgment of 11 April 2000. As in the first application, the plaintiff does not dispute that the defendants are the registered owner and therefore have the right to exclusive occupation of Shop No.7 in Tone King Building, including the disputed staircase in it. The argument put forward by Mr Chain, if I understand him correctly, is as follows. The conveyancing practice in Hong Kong as regards multi-storey buildings is such that an equal undivided specified number of parts or shares in the land is allotted to each owner and the building as a whole is jointly owned by all the owners thereof. That practice is the same for Tone King Building. When the defendants became the registered owner of Shop No.7 including the disputed staircase, although they have the exclusive right to the use, enjoyment and occupation of that unit, the defendants are not entitled to make alterations contrary to the provisions of the Deed of Mutual Covenant, and since that disputed staircase has always been used as a fire exit for the first floor restaurant, the defendants are bound by the terms of the Deed of Mutual Covenant as contained in the Third Schedule thereto, in particular, paragraphs 1, 22, 27 and 33 of that Third Schedule, which prohibit owners from making structural alterations, or interfering with, or blocking fire exits in respect of the building.

7. What effectively Mr Chain is submitting is that although the defendants have the exclusive right to the use, enjoyment and occupation of Shop No.7 including the disputed staircase, the defendants must, nevertheless, keep the top part of the staircase which opens onto the first floor and the bottom part of the staircase which opens onto the street free of any obstruction at all times but must allow a free passage of that staircase. If this submission of Mr Chain be correct, it follows that the defendants cannot even lock the door at the top or at the bottom of this staircase at all times despite their having the exclusive right to the use, enjoyment and occupation of this staircase.

8. In putting forward this argument, Mr Chain concedes that this argument is not based on the disputed staircase being a part of the common area of the building which, clearly, it is not. This anomaly, it seems to me, is that while conceding that the defendants have the exclusive right to the use, enjoyment and occupation of the disputed staircase which is part of Shop No.7 and is therefore not a common area of the building itself, in the same breath, the plaintiff says that the defendants' right to use this staircase is subject to it being used as a fire exit for the first floor restaurant. Obviously, such an anomaly needs to be resolved at trial. However, for present purposes, I am not convinced that the plaintiff, on the argument put forward by Mr Chain, has a strong case or even a good arguable case. In my view, the argument put forward is only just barely arguable.

Approach to mandatory interlocutory injunction

9. There is no dispute that the interlocutory injunction sought by the plaintiff is in effect mandatory in nature. It has for long been generally accepted that the guidelines set down in the American Cyanamid case are not relevant to the granting of mandatory interlocutory injunctions. It is also normally accepted that the case has to be unusually strong and clear before a mandatory interlocutory injunction will be granted. This is reflected in the words of Megarry J in the case of Shepherd Homes Ltd v. Sandham [1971] 1 Ch.340, at 351, where he said :-

"...on motion, as contrasted with the trial, the court is far more reluctant to grant a mandatory injunction than it would be to grant a comparable prohibitory injunction. In a normal case the court must, inter alia, feel a high degree of assurance that at the trial it will appear that the injunction was rightly granted; and this is a higher standard than is required for a prohibitory injunction. ..."

10. It was submitted by the plaintiff that the current state of the law is no longer for the plaintiff to have to show a strong case before a mandatory interlocutory injunction is granted. It was submitted that once an arguable case has been made out by a plaintiff, the court should take whichever course appears to carry the lower risks of injustice. Reliance was sought for this submission on the case of Zockoll Group Ltd v. Mercury Communications Ltd [1998] FSR 354. Insofar as Zockoll's case is concerned, I note that the Court of Appeal did not grant the mandatory interlocutory injunction but, instead, dismissed the plaintiff's appeal, albeit on the basis that the plaintiff was not likely to suffer substantial real damage pending trial.

11. I am not persuaded that the decision in Zockoll's case lays down any new law or practice. If it does, I prefer the old established practice whereby the plaintiff has to show that its case is strong and clear before a mandatory injunction will be granted at the interlocutory stage. This has not been shown in the present case and, for that reason, I would dismiss the plaintiff's application.

Postscript

12. I should add for present purposes that had the evidence before me shown that the disputed staircase was needed as a fire exit for the whole building, my decision in the matter may well have been different. However, the evidence before me only shows that the disputed staircase, if it was needed as a fire exit, was only so needed for the purpose of a restaurant being operated on the first floor. Not only that, but the evidence also shows that without the disputed staircase being used as a fire exit, a restaurant could not be operated on the first floor. In the circumstances, my refusal to grant the plaintiff's application for an injunction in this case can only have the effect of the plaintiff being unable to operate a restaurant on the first floor of Tone King Building at least up till the time this matter is decided at the trial. Therefore, the refusal to grant the plaintiff's application for an injunction pending trial does not and cannot run any risk that injury or loss of life would result from any fire which may occur between now and the trial of this matter.

13. It further seems to me that the parties are by and large ready for trial in this matter and that this is a fit case to order an expedited trial. I would therefore so order.

Costs

14. There will also be a costs order nisi that the plaintiff do pay the defendants costs of this application in any event.