NGO KEE CONSTRUCTION CO LTD v. PROSPEROUS CONSTRUCTION LTD

HCA266/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.266 OF 2004

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REASONS FOR RULING

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1. On 12 March 2003 I extended until trial or further order, with modification, the injunction granted ex parte by Deputy Judge To on 12 February 2004 and extended by Deputy Judge Poon at a hearing inter partes on 20 February 2004. I now give reasons.

2. The plaintiff is the contractor, and the defendant the subcontractor of drainage works on two sites in the New Territories. One, at the Mo Fan Heung Stream, has been referred to as Site A, and the other at Wing Hing Wai as Site B. The defendant started its works on 24 September 2003 though the written contract between the parties was not and in fact, I believe, has never been signed. Disputes arose because of complaints by the Drainage Services Department concerning the defendant's works. The plaintiff decided to take over the sites and put in its own workers to finish the jobs.

3. The plaintiff claims that on the date when it was due to take over, namely 30 January 2004, the defendant used plant and machinery to block its access to Site A. After a letter from the plaintiff's solicitors threatening injunction proceedings, the defendant agreed to hand over both sites on 31 January 2004.

4. Some correspondence followed about items which were left at the sites for completion of the works. Then on 11 February 2004 the plaintiff's workers went to start clearing the way in to Site B. Trouble erupted; the defendant blocked their way in with a backhoe. So they went to court on 12 February, and obtained the injunction ex parte.

5. The work at Site B is the extension of an existing drainage culvert some 3 metres wide and, I estimate from the photographs, about 2 metres deep. It runs under a public road, Sui Wan Road, from where it extends (judging from the scale plan, Exhibit LKF 14) eastwards for about 40 or 50 metres and ends in a concrete block. As I understand it the defendant had to extend the culvert eastwards from that point and no doubt at some stage remove the concrete block.

6. The actual site area according to the plan covers the area of the extended culvert itself and a narrow strip on either side. One can get to it over some bare ground south of the existing culvert and east of Sui Wan Road. This is Lot 1516. The plaintiff leased that Lot with effect from 6 February 2004. Next to it on the east side is Lot 1523 and next again is Lot 1524 which was leased by the defendant for access and storage. The northern boundaries of Lots 1523 and 1524 do not extend right up to the edge of the culvert, or its concrete borders; there is a narrow, irregular strip of Government land between them and it; this strip varies between about 2 metres and about 5 metres wide.

7. According to the plaintiff's site agent, Mr Leung Kam Fai, John, when the plaintiff's men went to Site B on the morning of 11 February 2004 to clear "the only vehicular access" the defendant's men prevented them from removing a container and a shed. After getting some instructions by telephone, however, the defendant's men let the plaintiff's men remove the container and shed. But then they parked the defendant's backhoe outside the entrance of the vehicular access in the surrounding Government land and thereby blocked the vehicular access entirely.

8. It was on the strength of this complaint that the plaintiff obtained the ex parte injunction. In fact it appears that the backhoe was parked with its body and tracks on Lot 1524 but its arm extended outwards towards the culvert so that the bucket rested on the Government land. After service of the injunction and a letter threatening that, if it was not removed by 8 a.m. on 16 February, the plaintiff would remove it, the defendant moved its backhoe entirely on to Lot 1524 some time in the afternoon of 13 February.

9. The defendant attacks the ex parte injunction on the basis that it was obtained by material non-disclosure and exaggeration. The judge was not told that the access way did not belong to the plaintiff but was largely on Government land; it was a rough track, partly newly-created by the plaintiff; there was alternative access either along the culvert itself or (presumably with the defendant's consent) over Lot 1524; the obstruction was only the bucket and part of the arm of the backhoe; the plaintiff could have waited and there was no urgency to justify an ex parte injunction; and there was no evidence from the Government contract about how access to the site was to be gained.

10. I could not see that there was any material non-disclosure. It is true that the affirmation of Mr Leung did not say that the backhoe was parked on the defendant's land with its arm across the Government land, What he said was that it was parked "outside the entrance of the vehicular access in the surrounding Government land" and his exhibited plan showed the obstruction in the right place.

11. In effect, of course, the plaintiff was seeking an injunction to stop the defendant blocking its way over Government land. Much was made of this before me; it was argued that if I allowed the injunction to continue I would be saying it was all right for the plaintiff to trespass on Government land. I do not accept this; what is being restrained is the plaintiff getting into the site where it has every right to be and if the Government wants to take exception to its trespass that is a matter for the Government. But I doubt that the Director of Lands or the Secretary for Justice would have the manpower or funds to chase trespassers off every little patch of Government land in the New Territories, which is only Government land because the surveyors in 1905 did not find anyone actually in possession of it.

12. In any event, I cannot see that it would have made any difference to the outcome of the ex parte application if the judge had been told, in terms, that only the arm of the backhoe was the obstruction and it was on Government land. Nor was it something which, in my view, should have been available for the judge to weigh in the balance. It really does not matter.

13. The next point is the access. It is argued that the plaintiff could have gone in by way of the culvert. There is a ramp going down from a gate at Sui Wan Road. Now obviously - and the defendant accepts this - one cannot take a backhoe, which is, according to the surveyor whose report was later obtained, 2.8 metres wide, down a 3-metre culvert without damaging the culvert. The same will almost certainly go for any decent sized lorry. When one gets to the end of the culvert there is a concrete block. It is obvious that as even if the block could have been demolished, as long as it was there anything going in or out would have to be lifted over it, and small enough to transport in whatever small vehicle could run along the culvert. Counsel suggested that the plaintiff should have simply demolished the block. I do not know whether the practice in extending a culvert would be to leave the removal till the extension had been built, it is obvious getting the kind of towed compressor which one normally sees being used to power pneumatic drills along the culvert would be extremely difficult. In all, the idea of using the culvert for access is so impractical as not to be worth considering.

14. In fact, in a later affirmation Mr Leung said that the access which the defendant blocked was the "only feasible access". This is repeated in the Statement of Claim. It must be right. I do not think the question of whether it was the "only access" or "only feasible access" was something which the judge needed to weigh in the balance. There was no material non-disclosure on this.

15. The same, I think, goes for the other points noted above which are more or less ancillary to these two. The simple fact was, the defendant was blocking the plaintiff's way to the site. There was no other practical way in. That the plaintiff had no right to use the Government land for access was immaterial. The defendant equally had no right to put the backhoe arm across it. It could have, and later did, park the backhoe entirely on its own leased land.

16. As to whether the plaintiff should have waited and brought the injunction inter partes on the Friday which is the normal summons return day rather than ex parte on the Wednesday, the answer is quite simply that delay costs money; a contractor is penalised in liquidated damages, payable for each day of delay.

17. I could not therefore see that the plaintiff had obtained the ex parte injunction improperly or that for that reason it should be set aside.

18. I turn to the considerations of whether there is a serious question to be tried, whether the plaintiff can be adequately compensated in damages if the injunction is not granted, and where the balance of convenience lies. See American Cyanamid Co. v. Ethicon Ltd [1975] AC 396. The last consideration is nowadays rather seen as the balance of risk of injustice.

19. The plaintiff's claim is for unlawful interference with contract and, I am told apparently also for trespass. It appears that the defendant did in fact block the plaintiff's way in to both sites, if only for a short period. These actions would cause delay. Delay would cost the plaintiff in liquidated damages. There is a serious question to be tried.

20. Can the plaintiff be compensated in damages? The defendant has shown a completely cavalier attitude in blocking the plaintiff's way in, on two sites; the motivation is unclear, because the parties agreed, since the incident at Site A but before that at Site B, that the plaintiff should take them over; one can only think that it was some kind of "wild cat" action motivated by pique. If the defendant did it once it can do it again; it is still on adjacent land. There is no way to know what delay might be caused to the plaintiff by such possible future actions, or what the plaintiff stands to lose, or whether the defendant is likely to be able to pay any damages caused. So this is not an option.

21. As to the balance of convenience, or the balance of risk of injustice, I do not see that there can be any injustice to the defendant if the injunction is extended. It has no right to block the plaintiff's way in, and will lose no benefit by being ordered not to do so. Conversely for the reasons given above there may be injustice to the plaintiff if the order is not made and the defendant repeats its actions.

22. For these reasons I extended the injunction. I accepted that the order as originally granted needed to be tightened up and made more specific as to the delineation of the site, and what access the defendant must not block. Further the injunction against "besetting" is not needed. The defendant might have done that at Site A, but never did it at Site B. I have ordered the amendment of the original order accordingly.