TAI YIP DYEING FACTORY LTD v. KONG HOI SANG

HCA 2917/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2917 OF 2004

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J U D G M E N T

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Background

1.  Tai Yip was company owned by Mr Ho Snr, and operated a dyeing factory.  Mr Kong was a clothing manufacturer.  From time to time he employed Tai Yip to dye cloth for his company.  Mr Ho Snr and Mr Kong became personal friends.

2.  As a result of that friendship Mr Kong had, from time to time, loaned money to Mr Ho Snr.  By the end of June 2004, the debt had reached $18,337,281.61.

3.  As a further result of their friendship, Mr Ho Snr and Mr Kong had, together, purchased land in Kowloon Tong on which they had built property.  On the sale of the property in June 2004, Mr Ho Snr had paid to Mr Kong $14 million in reduction of the debt.  There was a balance due of $4,337,281.61.

4.  Mr Ho Snr gave Mr Kong several post dated cheques, drawn on Tai Yip, for a total of $4,500,000 in satisfaction of the balance due.  When presented, the cheques were dishonoured.

5.  In early November 2004, Mr Kong instructed his solicitors, (not his present solicitors), to issue a writ in relation to the dishonoured cheques, (the Writ).

Mr Kong attempts to register a lis pendens:

6.  On 11 November 2004, on Mr Kong’s instructions, his solicitors attempted to register the Writ, as a lis pendens, against property owned by Tai Yip at 6^th and 7^th Floors, Heng Sang Factory Building, 185 and 187 Wai Yip Street, Kowloon, (the Properties).

7.  Prior to 11 November 2004, Tai Yip had given instructions to estate agents to offer the Properties for sale by way of tender.  Mr Ho Snr also owned the 8^th floor of the same building, and that floor was to be offered for sale together with the 6^th and 7^th floors.  One of the advantages of selling the three floors together was that if the three floors were purchased together, there would be a private lift service, exclusive to those three floors.  The sale was advertised by Centaline Property Agency in newspapers on 9 November 2004, seeking bids for the three floors, as one property, with bids to be lodged on or before 8 December 2004.  Mr Ho Snr hoped to get about $20 million for the three floors together.

Tai Yip goes into voluntary liquidation:

8.  On about 15 November 2004, Tai Yip sent to its creditors, including Mr Kong, notice of a proposed creditors meeting to be held on 29 November 2004.  At the meeting a motion for the liquidation of Tai Yip was to be presented.  Mr Kong completed either a notice of proxy, or a proof of debt, (it matters not which), for that meeting.  Mr Kong was plainly aware that Tai Yip was in financial difficulty.

9.  On 29 November 2004, Tai Yip passed a special resolution appointing liquidators of the company.  The liquidators appointed Mr Ho Chi Kin, a chartered accountant, (unrelated to Mr Ho Snr), and Mr Mickey Cheung, a solicitor.

The consequences of the Writ on the intended sale:

10.  On 23 November 2004, the Land Registry Scrutineer had endorsed the following note on the documents lodged for the registration of the Writ as a lis pendens:

“It appears that the subject instrument does not affect land.  Please consider withdrawing the subject instrument from registration.”

That was plainly a correct statement of the law: see Fung Kan Wai v Leung Shui Fat [1999] 4 HKC 71 CA.  The writ related to dishonoured cheques.  It had nothing whatsoever to do with the property.  It did not claim any interest in the property or any right in relation to the property.  It was plainly not a registrable document.  The document was noted against the titles to the Properties, under a heading, “Deeds Pending Registration”, by memorials numbered 9379395 and 9379396 respectively, with the additional endorsement “Registration Withheld”.

11.  The liquidators intended to continue with the proposed sale of the property.  Centaline had received a number of inquiries in respect of the property.  The case for Tai Yip was that when prospective purchasers had undertaken a land search, and seen the Writ pending registration as a lis pendens, they had wanted to reduce the offer price to a level below that sought by Mr Ho Snr, for the liquidators, or they had not been willing to bid.  No bids were received as at 8 December 2004.

The liquidators attempt to remove the writ:

12.  Notwithstanding the endorsement from the Land Registry Scrutineer, the attempt to register the Writ remained endorsed against the title to the Properties.  It appears that upon receipt of the advice from the Land Registry, no steps were taken by Mr Kong’s solicitors to withdraw the documents.

13.  On 9 December 2004, the liquidators’ solicitors wrote to Mr Kong’s solicitors requesting that the attempted registration be withdrawn within three days.  By a second letter, dated 11 December 2004, the deadline was extended to 12 noon on 13 December 2004, notwithstanding the fact that there had been no reply to the letter of 9 December 2004.

14.  By 22 December 2004, with the attempted registration remaining recorded against the titled property, the writ in these proceedings was issued and served on Mr Kong’s solicitors.  In the proceedings, the liquidators asserted that the attempt to register the Writ was wrongful and unlawful and constituted a slander of title.  The vacation of the registration was sought, together with damages to be assessed.

15.  On 23 December 2004, the documents comprising the attempt to register the writ as a lis pendens by Mr Kong were withdrawn from the Land Registry.

A sale is achieved:

16.  With the title now clear, the liquidators could confidently proceed to a sale.  On 21 January 2005, the liquidators secured a sale of the Properties, at a total sale price of $13 million.  Completion of the sale was due on 22 February 2005.

The present proceedings:

17.  In the Court of Appeal, in Fung Kan Wai the court noted that it had not been referred to any authority that it had power to award damages for wrongful registration of a lis pendens. The court noted that in that case no claim in tort or special damages for wrongful registration had been pleaded.  Consequently, as such a cause of action did not exist on the pleadings, and on the particular facts of the case, there was no entitlement to damages for wrongful registration.

18.  Apparently in order to overcome this difficulty, these proceedings have been brought in the tort of slander of title. An appropriate statement as to the elements of the tort are found inGatley on Libel & Slander, 10^th Ed para 20.14:

“At common law an action for malicious falsehood, commonly known as slander of title lies when ever a person maliciously publishes a false statement in disparagement of another person’s title to his property and thereby causes special damage.  … The disparagement may consist in denying, or casting doubts upon, the existence or the validity of the other person’s right, claim, title, or interest to or in the property.”

19.  Section 19 of the Land Registration Ordinance Cap 128, confers on the court jurisdiction to order vacation of a lis pendens and power to direct the party on whose behalf the registration was made to “pay all costs and expenses occasioned by the registration or the vacating thereof”.

20.  In the present case however registration was not effected, but instead the title endorsed under a heading “Deeds Pending Registration”.  In the course of interlocutory proceedings it was apparently agreed that the claim for an order vacating the registration of the Writ as a lis pendens was unsustainable, and the statement of claim was amended seeking a declaration that the attempted registration of the Writ was wrongful.  Tai Yip continued to seek that declaration to trial. 

21.  The primary relief sought however was not the declaration, but damages in the sum of $318,688.49, comprising management fees, rates and Government rent, and bank interest, incurred during the period 8 December 2004 to 21 January 2005.  The liquidators contention is that had the attempted registration been withdrawn prior to 8 December 2004, a sale could have been effected at that date, and those expenses would not have been incurred.  There was no dispute as to the calculation of the sum.  The dispute was confined to the fundamental issue of liability.

The defences raised:

22.  Mr Pao raises a number of defences to the proceedings.  First, he says that there is a fundamental defect in the amended statement of claim, in that the actual words used are not set out.  Second, it is contended that there is insufficient proof that Mr Kong has committed a malicious falsehood.  As part of this argument it is contended that in any event no falsity was established.  Third, it is argued that should the words used constitute a malicious falsehood the evidence does not establish that they were the predominant or effective cause of a potential purchaser not entering into a sale and purchase agreement on 8 December 2004.  Finally, it is asserted that if the words constitute a malicious falsehood, and were the cause of there being no contract on 8 December 2004, there is no proof of any loss.

Failure to set out defamatory words:

23.  The law is quite clear, in respect of both libel and slander, that the actual language used is a material part of the cause of action and must be set out in the statement of claim: see Bullen Leake & Jacob’s Precedents of Pleadings, 15^th Ed, para 28-16, Gatley para 26.11.

24.  In order to determine this issue it is necessary to determine just what constitutes the defamatory statement upon which Tai Yip relies.  The use of words, written or spoken is not the only way in which a defamatory imputation may be conveyed.  The following passage from Gatley 3.1 is relevant:

“Defamatory imputation is usually conveyed in words, written or spoken.  But there are many other activities and objects which may convey an imputation defamatory of some person, either of themselves or in their context.  Statues, waxworks, pictures, photographs (particularly in collocation with words), cartoons, cinema or television pictures, marks on a pavement, burning a person in effigy, hanging a sign outside his house or hissing him, signs and gestures have all been considered capable of conveying a defamatory imputation.”

And further para 3.3:

“Signs or gestures may themselves also convey a defamatory imputation, either because they express words (e.g. deaf and dumb language), or because they have a conventional defamatory meaning known to those who see them, or indicate to the ordinary observer that the claimant has done some discreditable act.”

25.  Tai Yip, in the present proceedings, does not rely upon words as the source of the defamation, but upon the act of Mr Kong in attempting to register the Writ as a lis pendens against the title to the Properties.  The amended statement of claim, contains the following averments:

“8.     Wrongfully and contrary to the matters as pleaded in paragraph 7 above, the Defendant has on or about 11^th November 2004 attempted to cause the Writ to be registered as lis pendens in the Land Registry against the Properties under the section of “Deeds Pending Registration” by Memorial numbered 9379395 and 9379396 respectively (collectively the “Memorial”).

…

9A    So, during the period between 11 November 2004 and 23 December 2004, by the said attempted registration of the Writ against the Properties, the Defendant published words to the effect that the Properties were affected by the Writ and/or that the Defendant had a proprietary claim against the Properties and/or that the Plaintiff did not have and could not pass good title of the Properties to subsequent purchaser so that the Plaintiff’s interest in the Properties were unlawfully and deliberately interfered with by the Defendant.”

26.  I am satisfied that those paragraphs adequately and fairly set out the act upon which Tai Yip relies, namely the act of attempted registration, to assert that an act on the part of Mr Kong conveys a defamatory imputation.  Were it not the act of registration, or attempted registration, that Tai Yip relied upon, but the content of the statement of claim attached to the Writ, it may have been necessary to set out the whole of the Writ.  But that is not the case.

27.  I have had careful regard to the decision in Fung Kan Wai.  The decision is not authority for the proposition that there can be no action for the wrongful registration of a lis pendens.  The court simply found that in that case no proper cause of action had been pleaded, neither on the particular facts did any cause of action arise. 

28.  I am satisfied that the act of registration of a lis pendens against the title to a property, carrying with it, as it does, the implication that the owner of the property may not be able to give good title to the property, is capable of constituting a statement required for the tort of slander of title.

29.  The act, (or statement), having been sufficiently pleaded, the argument that the words were not set out must fail.

30.  I should add here that I would have been unhappy to determine this case on a mere pleading point, taken only at the end of trial.  The appropriate time to have taken the point would have been in the interlocutory  stages of the litigation.  It is clear that in a libel action it is essential to know the very words on which the plaintiff founds his claim: see Denning LJ in Collins v Jones [1955] QB 564 at 571.  In the present case there can be no suggestion that Mr Kong did not know the words contained in the writ and statement of claim.  They were his document.

Is falsity established:

31.  It is plain that the assertion of Mr Kong by the act of attempted registration of the writ as a lis pendens, namely that he had a right in relation to the title to the Properties, was false.  That must follow from the conclusion inFung Kan Wai that what was registrable as a pending land action was an action which claimed some proprietary right in the land.  In the absence of a claim for a proprietary right in the land there was no right to registration.

32.  That was properly recognised by the Land Registry Scrutineer who declined to register the documents.  Instead, the attempt to register the writ was endorsed as “Deeds Pending Registration”.

33.  Mr Pao submits that endorsement on the title by the Land Registry Scrutineer must mean that all that was recorded was an attempt to register the Writ against the Properties which was not successful, since registration had been withheld.  The natural interpretation, Mr Pao says, is that the Writ was not registered as an encumbrance on the Properties, since it had not been entered in that category of instrument. As the entry on the Lands Registry title documents make it explicit that the instrument was not registered, Mr Pao says that it could not carry any imputed meaning that it constituted an existing encumbrance upon the Properties.  On the contrary, he says, a person searching the titles would see that the Writ did not affect the Properties.

34.  The argument is superficially attractive, but I am satisfied flawed.  By attempting to register the Writ against the title Mr Kong was in his effect making a statement to the public at large, and in particular to anyone who chose to search the titles, that he was asserting a right over the Properties.  It is correct that that assertion of a right had not yet been crystallised, but so long as the documents were not withdrawn from registration and remained noted on the title as “pending registration”, that assertion remained.

35.  It is clear that the assertion was false.  Mr Kong had no rights over the Properties at all, yet by persisting with the public assertion of that right, and by not withdrawing the writ from registration, Mr Kong continued to make the assertion.

36.  Rather than knowing from the fact that the writ had been marked as “Deeds Pending Registration”, that Mr Kong had no rights over the property, a person searching the title would see that an assertion was being made by Mr Kong that he had rights over the property, and that the crystallisation of those rights by way of the registration of a lis pendens had not yet been brought to a final conclusion.

37.  It is convenient here to deal with Mr Kong’s assertion that he gave his solicitors instructions to withdraw the registration, but they did not act on those instructions.  That is no answer to the situation.  So long as the documents remained noted on the title to the Properties, Mr Kong is responsible for the situation.  If his solicitors were negligent in not acting upon his instructions, and I make no finding in that respect, he must look to them for any loss he suffers.  Their negligence, if any is not an answer to the claim.

Did Mr Kong act maliciously:

38.  An essential element of the tort of slander of title is that the publication must be malicious.  Slander of title is a specific cause of action under the generic tort of malicious falsehood. 

39.  Mr Pao relied upon Hong Kong Wing On Travel Service Ltd v Hung Thai Citizens Travel Services Ltd [2001] 2 HKLRD 481 to establish the essential elements of malicious falsehood.  There Chu J held that the publication must be malicious in that either, the defendant knew when he published the words that they were false or he was reckless as to whether they were true or not; or he did so for the purpose not of advancing his own interest but of injuring the plaintiff.  Consequently if the publication is undertaken in the bona fide, though wrongful, assertion of a right, no action will lie. 

40.  In further reliance upon Hong Kong Wing On Travel, at p 491G-H, Mr Pao submitted, that a man may act selfishly in the purpose of advancing his own interest, and so long as his purpose is confined to advancing his own interest, and not to injuring the plaintiff, he will not be acting maliciously.  That is an accurate statement of the holding by Chu J.  With respect to the learned judge, I have come to the conclusion that the statement is not entirely correct.

41.  It is right that the pursuit of self-interest will not be malice in the context of malicious falsehood where the statement is believed to be true: see Dunlop v Maison Talbot (1904) 20 TLR 579 at 581 CA.  But if an injurious falsehood is published, which is known to be false, then, provided the statement is intrinsically injurious, even if published with no intentional desire to injure the other person, there will be malice.  The malice consists in the fact that what was published was known to be false: see Witts United Dairies v Thomas Robinson Sons & Co [1957] RPC 220, and Gatley para 20.7.

42.  I am satisfied that registration of a writ as a lis pendens, is intrinsically injurious, in the sense that it will prevent the owner of land from dealing with the land with out satisfying any claim that might be contained in a writ.

43.  It is clear that Mr Kong’s purpose in attempting to register the Writ was to advance his own position, that is to achieve payment to him of a debt that was plainly due to him.  There is nothing in the evidence to indicate that Mr Kong’s purpose was to harm Tai Yip.  All Mr Kong was concerned to do was to achieve repayment of the debt.  Thus, unless it is proved, on the balance of probabilities, that Mr Kong knew that he had no right to attempt to register the Writ against the title to the Properties, there will be no actionable malice.

44.  Mr Kong gave evidence that he had advice from his solicitors that he was entitled to attempt to register the Writ as a lis pendens.  He said, had any effect, that he believed his assertion of rights over the Properties was a lawful act, and not false.  He produced no document in support of that evidence, neither did he call his solicitor to say that that was the advice that was given.

45.  It is clear that an honest belief in the advice of a solicitor is a valid defence to a claim of malice in a slander of title case: see Assured Quality Construction Ltd v Thompson [2006] EWHC 2440.

46.  The law is quite clear.  Unless a writ claims some proprietary right in land there is no entitlement to register the writ as a lis pendens.  In Fung Kan Wai, a case dealing with an attempt to register a writ as a pending land action in circumstances where there was a claim to a lien for the return of a deposit paid in respect of an abortive purchase of property, the court found that the submission of a proprietary right must clearly fail, see p 76F, and that the “facile submission must be rejected on its face”: see 76H.

47.  In the light of the clarity of the law, and the existence of a relatively recent reported decision of the Court of Appeal of Hong Kong directly in point, it is difficult to believe that any Hong Kong solicitor would give advice that in the circumstances Mr Kong was entitled to register the Writ as a lis pendens.  Consequently, in the absence of evidence of that advice, I am quite unable to place any weight on Mr Kong’s assertion that he was so advised. 

48.  Mr Pao submitted that it was unnecessary for Mr Kong to call his solicitor or produce any document to confirm that that advice had been given.  I disagree.  To accept Mr Kong’s evidence at face value, without any substantiation whatsoever, would be to give a licence to anyone facing a claim for slander of title to resist the claim by merely saying that he had legal advice that he was entitled to act as he did. 

49.  Mr Pao said that the evidential weight attached to Mr Kong’s evidence was a matter to be decided with regard to the inherent probabilities and consistency with the contemporaneous documents.

50.  Having regard to the clarity of the law it is inherently improbable that a solicitor would give such advice.  No contemporaneous documents were produced to indicate that such advice had been given.  Mr Pao submitted that the fact that the documents were tendered for registration meant that it was not inherently improbable that the advice had been given as it would have been negligent on the part of the solicitors not to have advised Mr Kong of the possibility of a suit for slander of title.  In my view it is more likely than not that the advice that was given to Mr Kong was that by attempting to register the Writ as a lis pendens against the title to the Properties, Mr Kong would obtain a commercial advantage and Tai Yip would be forced to pay the debt due in order to clear the title for sale.

51.  There was no suggestion at all that the solicitor could not be called as a witness. The law is clear.  When a party elects not to call a particular witness on a point, thereby depriving the court of positive evidence as to important issues in the case, the court is entitled to draw any reasonable inference against that party, absent any explanation on its part: see Herrington v British Railways Board [1972] AC 877 at 930 and Grave v G A Bonus PLC [1992] 2 Lloyd’s Rep 716.

52.  For the foregoing reasons I reject Mr Kong’s assertion that he acted in accordance with legal advice given to him.  I am satisfied that the evidence establishes actionable malice on the part of Mr Kong, notwithstanding the fact that he sought only to advance his own interests by recovering monies plainly due to him.

The attempted registration was wrongful:

53.  It follows from the foregoing that I find that Mr Kong’s attempt to register the Writ against the title to the Properties constituted a malicious falsehood in that it, to Mr Kong’s knowledge, falsely asserted a right over the title to the Properties which Mr Kong did not have, in disparagement of Tip Yip’s title.

54.  The declaration that Mr Kong’s attempted registration in the Land Registry of the Writ against the Properties was wrongful is accordingly granted.

No proof of causation of loss:

55.  Mr Pao next submits that the burden, on Tai Yip, of establishing that the attempt to register the Writ was an effective cause of a potential purchaser not entering into an agreement for sale and purchase on 8 December 2004, has not been discharged.

56.  The evidence that the existence of the attempt to register the Writ caused potential purchasers not to tender for the property prior to 8 December 2004 came from Mr Tang, a sales director with Centaline, the property agency instructed by the liquidator for Tai Yip.  Any evidence given by liquidators, did not advance Mr Tang’s evidence, as it was entirely dependent upon information received from Mr Tang.

57.  Mr Tang produced a letter, written on 14 December 2004, and faxed to Tai Yip’s solicitors.  The letter said:

“We have received numerous enquiries made by the intended purchasers and the bid price offered close to the proposed bid price.  However, due to the registration of the Writ against the captioned properties (Memorial No. 9379396), the intended purchasers either reduce the bid price offered all was hold their tender for bed pending the outcome of the said Hi Court Action.  In this regard, no bid has been received on 8^th December 2004.”

58.  Mr Tang had little recollection of the circumstances, and was unable to specify either the number or the identity of the intended purchasers that he had referred to in the letter.  Mr Tang was obliged to concede that he recalled only a company called Tri-Profit, (the ultimate purchaser of the two floors), showing interest in the property.  He was obliged to concede that there may be other reasons, such as price, rather than the presence of the Memorial on the titles that resulted in no tender being made.

59.  It is necessary to note in this respect also, that the instructions that had been given to Centaline were to sell all three floors, together as one lot, (two belonging to Tai Yip, and one to Mr Ho Snr,) at a total price of $20 million.  At the end of the day the three floors were not sold together.  Tri-Profit purchase the sixth and seventh floors from Tai Yip for $13 million, and the eighth floor was sold to Square Fortune Ltd for $4.18 million, a total consideration of $17.18 million, significantly lower than $20 million.

60.  Mr Pao submits, and there is weight in the submission, that that set of circumstances demonstrates that an equally valid inference to be drawn from the circumstances is that no tender was made on or before 8 December 2004, simply because there were legitimate concerns as to whether the price was excessive.

61.  No witness was called from Tri-Profit to give evidence that the presence of the attempted registration was a causative factor in their decision not to tender for the Properties prior to 8 December 2004.

62.  In the absence of that evidence, and there being equally competing inferences to be drawn from the evidence as to the failure of anybody to tender to purchase the properties prior to 8 December 2004, I am not satisfied that the existence of the attempted registration of the Writ was a causative factor in there being no tenders by that day.

63.  It follows that the claim for damages must fail.

A loss avoided:

64.  In case I am wrong in that conclusion I deal with Mr Pao’s final argument, namely that there should be no damages awarded since a loss was avoided.

65.  The evidence of Mr Tang established that prior to 8 December 2004, the only firm expression of intent for the Properties came from Tri-Profit in the sum of the $11 million, that expression of intent arising prior to Tri-Profit learning of the attempt to register the Writ.  I accept Mr Pao’s submission that the only inference can be drawn from those facts is that the expression of interest at $11 million was an independent expression made by Tri-Profit with out knowledge of, and accordingly influenced by, the Writ.

66.  The sale of the two floors owned by Tai Yip that was ultimately achieved, on 21 January 2005, was for $13 million.  There is no evidence to indicate that had a tender being made on 8 December 2004, at $11 million, that tender would not have been accepted.  Indeed, in the light of Tai Yip’s financial situation is highly likely that that tender would have been accepted.  In fact the delay, caused on Tai Yip’s case by the presence of the Writ on the title, resulted in a purchase price being achieved that was $2 million higher.

67.  Tai Yip, if it was to continue with this action, was obliged to mitigate any loss, and the only way it could do that would be to proceed to sell the Properties.  It is right that it has incurred expenses amounting to $318,668.49 arising from the attempt to register the Writ, but in mitigating its loss by proceeding to sell the properties it has achieved a higher price than the only price the evidence indicates at which the Properties might otherwise have been sold on 8 December 2004.

68.  In simple terms, the loss was avoided.  There is a bar against recovery for avoided loss: see McGregor on Damages 17^th Ed para 7-006:

“… where the claimant does take steps to mitigate the loss to him consequent upon the defendant’s wrong and the steps are successful, the defendant is entitled to the benefit accruing from the claimant’s action and is liable only for the loss as lessened; this is so even though the claimant would not have been debarred under the first rule from recovering the whole loss, which would have accrued in the absence of successful mitigating steps.  Put shortly, the claimant cannot recover an avoided loss.”

69.  I accept Mr Pao’s submission that there is no evidence upon which I can conclude that Tai Yip would have been able to sell the Properties at a price of $12,681,311.51, ($13 million less the expenses), or higher, prior to 8 December 2004.  It is only if Tai Yip would have been able to sell the properties at such a price that it could be proven to have suffered any loss, which was not subsequently avoided.

70.  For this reason also, I conclude that the claim for damages on the sum of $318,688.49 must fail.

Nominal damages:

71.  Notwithstanding the fact that the commission by Mr Kong of the tort of slander of title was not causative of any monetary loss to Tai Yip, Tai Yip are entitled to nominal damages in relation that commission of a tort.  A plaintiff is entitled to nominal damages where his right has been infringed, but he has not in fact sustained any actual damage from the infringement: see McGregor on Damages, 17^th Ed para 10-002, and Halsbury’s Laws of Hong Kong, 2004, Reissue Vol 12(1), para 340.171.

72.  In Hong Kong, HK$100 is usually awarded, see: Wong Ching Chi v Full Yue Bleaching & Dyeing Co Ltd [1994] 3 HKC 606.  I accordingly fix nominal damages to be paid by Mr Kong to Tai Yip in the sum of $100.

Costs:

73.  Tai Yip has succeeded in its claim for declaration that Mr Kong’s conduct was wrongful, and has been awarded nominal damages in the sum of $100.  Nominal damages have been described as a peg on which to hang costs: see Maule J in Beaumont v Greathead (1846) 2 CB 494 at 499.  There will accordingly be an order nisi that Mr Kong must pay Tai Yip’s costs, to be taxed on a party and party basis.