SUCCESS LANE DEVELOPMENT LTD v. FERGURSON HONG KONG LTD t/a NEW WORLD MILLENNIUM HONG KONG HOTEL

DCCJ 2191/2023

[2024] HKDC 336

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2191 OF 2023

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BETWEEN

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DECISION

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APPLICATION

1.  By two Summonses (collectively, “Two Summonses”) respectively dated 12 October 2023 (“Leave Summons”) and 19 December 2023 (“Evidence Summons”), the Plaintiff (“P”) applies for leave to appeal and to adduce new evidence.

2.  By the Decision handed down on 25 September 2023 (“Injunction Decision”), this Court dismissed P’s application (“Injunction Application”) to continue the Ex-parte Injunction Order granted by HH Judge E. Yip on 12 July 2023 (“Ex-parte Injunction Order”) with a costs order nisi in favour of the Defendant (“D”) (“Costs Order Nisi”).

3.  On 9 October 2023, D took out a Summons for variation of the Costs Order Nisi (“the Costs Summons”).

4.  On 12 October 2023, P took out the Leave Summons for leave to appeal out of time against the Injunction Decision. It is supported by the 7^th Affirmation of Yung Mei Chun Jessie (“Ms Yung”) (“Yung’s 7^th Affirmation”), which contains the “initial grounds of appeal”. No separate draft Notice of Appeal was submitted.

5.  For effective disposal of the Leave Summons and the Costs Summons (“Two Applications”), this Court has directed the Two Applications to be determined by way of paper disposal. Subsequently, P made application for time extension to lodge the written skeleton submissions as well as for obtaining the transcripts of all the hearings before this Court. All such applications were allowed. The Submissions in Reply were eventually lodged into court on 29 November 2023.

6.  On 19 December 2023, P took out the Evidence Summons seeking leave to adduce new evidence for the purpose of the Leave Summons, which also has an impact on the Costs Summons. The hearing was listed to be heard on 6 February 2024. Prior to the scheduled hearing, P applied to extend the time for lodging the written skeleton submissions and to vacate the hearing. In order not to further delay the determination of the Two Applications and the Evidence Summons, this Court directed the Evidence Summons to be dealt with on paper.

7.  In this Decision, this Court will deal with the Two Summonses. The Costs Summons will be dealt with separately in another decision. This Decision should be read together with the Injunction Decision. For ease of reference, the abbreviations used in the Injunction Decision are adopted herein.

8.  In the Injunction Decision, I have summarized the background of this case at §§2-31 which I should not repeat here. I dismissed the Injunction Application on the independently sufficient grounds that (A) there was material non-disclosure in the Second Ex-parte Application (§§33-41); (B) P abused the ex-parte procedure (§§42-48); (C) P failed to satisfy the requisite merits threshold (§§49-71); (D) damages would be adequate remedy to P (§§74-82); and (E) the balance of convenience fell in favour of discharging the Ex-parte Injunction Order (§§72-73, 83-95) (collectively, “Dismissal Grounds”).

PROCEDURAL BACKGROUND

9.  The procedural history of this action has been briefly set out in the Injunction Decision, which I should not repeat here. To understand the analysis of the present application, it may be convenient to add that in light of P’s practice of writing and making applications to the Court unilaterally (without notifying D) in an improper way [1], this Court has been alive to the guidance as elaborated in AXA China Region Insurance Co Ltd v Leong Fong Cheng, CACV 113 of 2016, unreported, 28 Oct 2016 §§43-55.

10.  At the return hearing of the Injunction Application on 21 July 2023, this Court reminded both parties in court that the civil procedures must be complied with. All applications should be made by way of formal applications. Documents or messages sent to court without following the proper civil procedures would not be entertained. The Court must be impartial and the other party should not be deprived of a right to be heard. The parties should not, by way of informally sending messages, letters or documents to the Court, expect the Court to, and the Court indeed could not, accept or deal with such documents, give legal advice or conduct the case for the sender (collectively, the “Reminders”). The gist of the Reminders was subsequently repeated in writing upon P’s lodging of several unilateral letters into the court shortly after the hearing.

LEGAL PRINCIPLES

11.  It is trite that leave to appeal shall not be granted unless the court is satisfied that the appeal has a reasonable prospect of success or there is some other reasons in the interest of justice that the appeal should be heard: section 63A of the District Court Ordinance, Cap 336.

12.  Reasonable prospect of success connotes the prospect of success must be reasonable and more than fanciful, without having to be probable: SMSE v KL [2009] 4 HKLRD 125.

13.  The grant or continuation of an interlocutory injunction is an exercise of discretion of the Court. The appeal court is not to exercise an independent discretion of its own and may set aside a judge’s exercise of discretion if it can be shown that the judge was plainly wrong: Agritrade Resources Ltd v Ashok Kumar Sahoo [2022] HKCA 280 §20.

14.  A mere repetition of arguments made at first instance without demonstrating how and why the judge went wrong does not begin to make out a case that the judge’s conclusion is plainly wrong: Harbour Front Ltd v Money Facts Ltd & Ors [2019] HKCA 916 §9.

15.  In respect of admission of new evidence in an appeal, the rule of Ladd v Marshall^[2] applies. Further evidence is admissible on an appeal only where such new evidence:

(1) could not have been obtained with reasonable diligence for the use at the trial or at the hearing;

(2) is such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; and

(3) is such as presumably to be believed.

16.  With these principles in mind, I now turn to consider the Two Summonses. I should first deal with the Evidence Summons.

EVIDENCE SUMMONS

17.  The scope of the Evidence Summons is confined to the new evidence as described in §1 thereof and adduced in the affirmation of Madam Yung Mei Chun, Jessie dated 19 December 2023, namely an email message dated 18 December 2023 purportedly containing a brief message issued by the Lands Department (“18/12/2023Email”).

18.  In reliance on the 18/12/2023Email, P says that the Lands Department had issued a warning letter to D, requesting rectification of D’s breach of use of D’s underground carpark (“Carpark”). P contends that it shows D’s breach of the condition of the government lease due to D’s non-conforming use of the Carpark for storing P’s Belongings.

19.  Undoubtedly, the 18/12/2023Email came into existence long after the Injunction Decision. For the following reasons, I am not persuaded that it should be adduced as evidence in the intended appeal.

20.  First, there has not been any explanation as to why the evidence as to the non-conforming use of the Carpark could not be obtained by P with reasonable diligence prior to the hearing of the Injunction Application. In particular, it has been P’s case that D had altered the use of the Carpark for storing the Belongings since May 2023. P offered no justification to satisfy the test of due diligence. No explanation as to why the 18/12/2023Email could only be obtained after the Injunction Decision, even after the close of the Skeleton Submissions of the Leave Summonses and when this Court was about to hand down the decision.

21.  Second, P chose to disclose only one very brief message instead of the whole set of the communications exchanged with the relevant authority. The circumstances leading to the issuance of such message were unaccounted for. Solely from the two-sentence message, it is not clear what exactly the subject matter of the complaint was or what the non-conforming uses were. P fails to prove the relevancy of such scanty information to the Injunction Decision and how it would have a material impact on the outcome of the intended appeal.

22.  Third, even on the assumption that the message supports P’s allegation that D has been in breach of the lease condition by converting the use of the Carpark for storing the Belongings, it does not assist P’s intended appeal. P’s Injunction Application was dismissed on the independently sufficient Dismissal Grounds that, inter alia, P’s Injunction Application was tainted with material non-disclosure (Injunction Decision §§33-41) and abuse of the ex parte procedure (Injunction Decision §§42-48). The 18/12/2023Email is plainly irrelevant to these procedural matters, hence, lends no support to the intended appeal.

23.  Fourth, the Injunction Application was premised on the Belongings being damaged (Injunction Decision §27). The matter concerned in the 18/12/2023Email would not cause deterioration to the storage environment of the Belongings or damage to the Belongings, and thus, no influence on the outcome of the Injunction Application.

24.  Fifth, even if the Belongings had been or might be damaged in the Storage Area, the fact remains that damages would be an adequate remedy (Injunction Decision §§74-82) and that the balance of convenience fell in favour of discharging the Ex-parte Injunction Order (Injunction Decision §§72-73, 83-95). The 18/12/2023Email is irrelevant to the Injunction Decision. It will not take P’s intended appeal any further.

25.  Sixth, P fails to explain how its allegation of D’s breach of the government lease could assist P’s defence to D’s claims for unpaid rental fees and lien against P. P’s argument also ignores §88 of the Injunction Decision. In that, this Court has considered that there has been no basis to assume D would not take appropriate actions to cope with any new circumstances giving risk to damage of the Belongings and to relocate the Belongings to somewhere else as the situation warrants. There is simply no suggestion that that is not the case at present.

26.  Thus analyzed, I accept D’s submission that P has failed to satisfy the Ladd and Marshall conditions. P could not prove that the 18/12/2023Email is relevant or material to the merits of its intended appeal. Nor could P show that the 18/12/2023Email could not have been obtained before the hearing of the Injunction Application even with reasonable diligence. The Evidence Summons is unmeritorious and should be dismissed.

27.  I do not lose sight of the fact that P has, through the lodging of the skeleton submissions, slipped in additional new piecemeal evidence without leave (“Documents”), including, inter alia, an email purportedly from the Home Affairs Department dated 7 February 2024 in reply to a complaint dated 24 January 2024. P seeks to refer it for proof of D’s breach of the condition of a licence with the Government due to converting part of the Carpark for storage use.

28.  Such tactic is another deliberate neglect of this Court’s repeated Reminders and should not be encouraged. New evidence cannot be adduced by way of skeleton submissions. P has been aware that new evidence has to be adduced by formal application with the new evidence to be produced by way of affirmation. D should not be deprived of a fair chance and proper procedure to investigate, respond and/ or challenge such piecemeal documents, which contain just scanty messages. Absent any formal application for leave to adduce the Documents, such new evidence cannot be accepted.

29.  In any event, for the same concerns and reasons regarding the 18/12/2023Email aforesaid, I do not take the view that the Documents will advance P’s intended appeal any further. It will be unfair to D to allow P keep adding new evidence after the hand down of the decision.

30.  In all, I come to the conclusion that P is not entitled to introduce the new evidence aforesaid in the intended appeal. The Evidence Summons should be dismissed.

LEAVE SUMMONS

OUT OF TIME

31.  The Leave Summons was filed 17 days after the handing down of the Injunction Decision. P’s explanation for the delay was due to typhoon. Given the delay of 3 days is relatively short and the fact that typhoon signal no.8 and above were hoisted on 8 and 9 October 2023, I grant leave to P to make the present application out of time.

GROUNDS OF THE INTENDED APPEAL

32.  In P’s skeleton submissions lodged into Court on 8 November 2023 (“P’s SA”), P did not strictly pursue the “Initial grounds of appeal” as set out in Yung’s 7^th Affirmation. Instead, P advanced another set of intended grounds of appeal. Unless P can demonstrate that it has a reasonable prospect of success in overturning all (A) to (E) of the Dismissal Grounds, leave to appeal must be refused.

(A) MATERIAL NON-DISCLOSURE

33.  In the Injunction Decision, this Court held that there was material non-disclosure on the part of P in the Second Ex-parte Application by (i) failing to disclose the dismissal of the First Ex-parte Application (§36); (ii) unjustifiably giving a false impression that the Second Ex-parte Application was an ex-parte “on notice” application (§§37-38); and (iii) failing to disclose D’s possible defence which was within P’s knowledge (§39).

34.  Ground 1 [P’s SA §1] seeks to challenge point (i). P complains this Court to have erred in concluding that P’s non-disclosure of the dismissal of the First Ex-parte Application in the Second Ex-parte Application was a breach of the duty of full and frank disclosure. P’s reasons are that the two applications were not based on similar facts, and, the First Ex-parte Application was not dismissed on substantive grounds.

35.  Ground 1 is unarguable. This Court’s analysis on P’s material non-disclosure was premised on the background, the procedural history, the P’s case, the natures and the reliefs sought by P in the two ex-parte applications which have been set out in §§2-6, 23-29 of the Injunction Decision.

36.  Given the two applications were made under the same legal action, basing on the same pleaded facts and cause of action in the Statement of Claim, against the same background facts, essentially seeking almost identical reliefs, with an interval of just around one month between the two ex-parte applications and both without giving notice to D, P was strictly duty bound to give full and frank disclose of the dismissal of the First Ex-parte Application and the reasons of it in the Second Ex-parte Application. It however kept complete silence on the First Ex-parte Application in the Second Ex-parte Application, undoubtedly in breach of its disclosure duty.

37.  In the present application, P fails to justify how the two applications were not based on the similar set of facts as alleged. Nor can it precisely set out the full reasons for the dismissal of the First Ex-parte Application. Obviously its contentions that the First Ex-parte Application was dismissed not for its substance but “indicating procedural rather than factual inadequacies” and that the relevant order was sealed “without giving any reason for decision” are evasive and equivocal, which do not support its argument.

38.  As indicated in D’s arguments, P could easily justify its allegation by producing the transcript of the hearing of the First Ex-parte Application as P’s usual practice if what P said is true. P nevertheless chose not to do this time. Despite the many elaborated skeleton submissions and affirmations, P did not produce any affirmation to fully account for how it discharged its duty in addressing the Court on its departure from the usual procedure of seeking injunction order through inter-parte Summons or on notice as required in law as well as the ruling on it in the First Ex-parte Application.

39.  P has not even directly and precisely affirmed that the ex-parte application without giving notice procedure was approved by the Court in the First Ex-parte Application. P simply kept unjustified silence on the whole issue without discharging its duty of disclosure. Viewed in this light, the fact that P had failed to discharge its duty of full and frank disclosure due to non-disclosure of the First Ex-parte Application in the Second Ex-parte application is unarguable.

40.  Ground 2 [P’s SA §2] seeks to challenge point (ii). P complains this Court to have wrongly “assumed” its inclusion of the words “on notice” in the Draft Order in the Second Ex-parte Application was deliberate. This complaint is unsubstantiated. My rulings in this aspect are summarized in §§37-38 of the Injunction Decision, in gist, (i) while P blamed the use of a template for the mistake, it failed to account for the source of the alleged template and the circumstances leading to the mistake; (ii) whether notice had been given was a factual matter within Ms Yung’s knowledge who personally handled both ex-parte applications.

41.  The reference to the submission of the Defence Counsel regarding Ms Yung’s ability in conducting the proceedings should not be overemphasized. The whole line of the reasoning at §§37-38 of the Injunction Decision is confined to the analysis of merely giving notice to D which does not require any “legal expertise” and “legal proficiency” as P now alleges. Ms Yung’s knowledge and experience in prosecuting the present proceedings including the series of applications are sufficient to form the basis of my analysis. Ground 2 is unpersuasive.

42.  Ground 3 [P’s SA §3] is baseless. It seeks to challenge point (iii). In reliance on §§2-14 of its skeleton submissions in the First Ex-parte Application, P complains this Court to have erred in finding that P had failed to disclose D’s defence. Such reliance is misplaced. Those paragraphs plainly advanced P’s factual narrative of its own case and were silent on any possible defence of D. P’s another complaint of this Court’s premature assessment of the merits of the action will be dealt with further below.

(B) ABUSE OF EX-PARTE PROCEDURE

43.  Ground 4 and 5 (§§4-5 of P’s SA) can be dealt with together. They seek to dispute this Court’s conclusion that P’s recourse to the ex-parte procedure was unjustified as the Second Ex-parte Application was neither of extreme urgency leaving no time to warn D nor the purpose of the injunction would be defeated if D is informed (§44 of the Injunction Decision).

44.  However, none of the points raised by P discloses any arguable ground of appeal in this respect. On the contrary, they tend to undermine P’s arguments for they actually show that P had more than sufficient time not only just to take out an ex-parte application on notice but also an inter-parte Summons for the second application for injunction order.

45.  First, P’s reliance on the fact that the First Ex-parte Application was made on 2 June 2023, shortly after the Belongings were moved to the Storage Area, is misplaced. It does not assist P but rather, discloses the fact that P had more than one month for taking out the Second Ex-parte Application (made on 12 July 2023), in effect had more than sufficient time to take out an inter-parte Summons, not even just give proper notice to D.

46.  Likewise, P’s reiterations of its repeated warnings to D about the risks arising from the Storage Area before the Second Ex-parte Application do not advance its case. Instead, those warnings serve to show that P could have given D advance notice of the Second Ex-parte Application or issuance of an inter-parte Summons.

47.  Much reliance has been placed by P on an alleged post-hearing flooding incident caused by the extreme weather on 7-8 September 2023 (“Alleged Post-hearing Incident”). Such incident is said to have taken place after the substantive hearing of the Injunction Application. In my view, such alleged incident cannot lend any support to P [P’s SA §§4-5, 11 & 14] for the following reasons.

48.  First, notwithstanding the repeated warnings of the Reminders by this Court and P’s solid experience in making a series of applications to the Court, P, again, knowingly chose not to make formal application to adduce evidence relating to the Alleged Post-hearing Incident. Instead, it sent a unilateral letter to the Court on or around 15 September 2023 giving some unilateral general bare assertions on piecemeal information.

49.  Unarguably, P has been fully aware that the Court must be impartial and could not take into account of such general and piecemeal bare assertions in a unilateral letter. P had been reminded that the Court could not act as P’s advocate to conduct its case for P against D or attach any weight to untested bare assertions in a unilateral letter. A deliberate tactics of not making formal application in effect avoiding giving evidence by way of affirmation under oath and depriving D of a fair chance to test and challenge P’s allegations should not, and indeed could not, be endorsed: AXA China Region Insurance Co Ltd v Leong Fong Cheng CACV 113 of 2016, unreported, 28 Oct 2016 §§43-55.

50.  It now transpires from the parties’ skeleton arguments that P had rather, elected to make another ex-parte application for another injunction order basing on the Alleged Post-hearing Incident before another judge on the last working day (on 22 September 2023, Friday) immediately before the handing-down of the Injunction Decision (on 25 September 2023, Monday). That application was subsequently dismissed by the learned Judge with costs to D.

51.  Hence, the assertions relating to the Alleged Post-hearing Incident should be disregarded as it was not in the evidence considered by this Court and P has chosen not to make any application to adduce such evidence.

52.  Second, the Alleged Post-hearing Incident took place after the hearing of the Injunction Application. It is illogical and unfair to refer to a subsequent event to interpret the circumstances of the parties at the hearing, in particular, D was deprived of a chance to test and challenge P’s one-sided allegations. What actually happened in that incident remained unknown.

53.  Third, an incident happened 2 months after the Second Ex-parte Application could not sensibly explain why the Second Ex-parte Application was so urgent that, at the time, no advance notice could have been given to D. Nor could it render all those independently Dismissal Grounds plainly wrong.

54.  In the Injunction Decision, this Court carefully examined all the evidence aiming at finding out, inter alias, what actually the Belongings were (§§75-81;85), how the Belongings were kept at the Storage Area (§§86-89), what was the legal duty of a hotel proprietor in retaining guest’s goods under lien (§84-85) and the adequacy of damages as remedy (§§86-89).

55.  Further, this Court also reviewed all the circumstances and formed the view that there was no basis for this Court to assume that D would not have taken appropriate action to cope with any change of circumstances of the Storage Area so as to discharge its duties (§§87-88). As confessed by P, D had actually taken immediate actions to cope with the alleged incident. In the circumstances, P fails to justify how my judgment in this aspect is wrong. In particular, D’s duty in retaining the Belongings is not bound to be more careful than it would be of its own goods (“D’s Qualified Duty”) (§84).

56.  By reason of matters set out above, the Alleged Post-hearing Incident has not been adduced as evidence in the present application. It, in any event, does not give rise to a valid ground of appeal.

(C) ARGUMENTS ON MERITS

57.  Ground 6 [P’s SA §6] seeks to challenge this Court’s conclusion that P has failed to satisfy the applicable merits threshold for obtaining an injunction order. This Court’s assessment on the requisite merits threshold is set out at §§49-71 of the Injunction Decision. None of the arguments advanced by P disclose any arguable ground of appeal in this respect.

58.  First, P complains that this Court erred in requiring a high degree of assurance for the issuance of an interlocutory mandatory injunction, a standard that overlooks the primary consideration of which action would result in the lower risk of injustice when deciding on an injunction. It seeks support from the case of HKCOLO.NET Limited v Hong Kong Telecommunications (HKT) Limited [2023] HKCFI 138.

59.  The argument is misconceived. The legal principles governing the determination of an application for interlocutory mandatory injunctions as endorsed by the leading authority and Hong Kong Civil Procedure 2023 Vol 1 §29/1/29 are set out in §§49-50 of the Injunction Decision. Whilst the “high degree of assurance” test is not regard as an “inflexible rule”, it is however recognized as the general approach that the Court should not lightly ignore as the risk of injustice arising from a wrongly granted mandatory injunction can be acute.

60.  In the present case, P fails to point to any justified reason why the general approach should not be adopted. At any rate, the assessment of which action would result in the least injustice was in fact conducted in §50 of the Injunction Decision and further reviewed in §§72-95. It was after a full examination of all the relevant factors that this Court found the balance of justice was in favour of discharging the Ex-parte Injunction Order. P’s complaint is groundless.

61.  Second, P’s complaint of pre-mature assessment of the merits of the parties’ respective case [P’s SA §6] is unfounded. The assessment of merit is required to ascertain whether the applicant’s case discloses “serious issues to be tried” and to evaluate the degree of assurance that the applicant would prevail at trial: §50.

62.  Further, the relative strength of the parties’ cases is pertinent to the balance of convenience inquiry, especially where the grant or refusal to grant of the injunction order would have the effect of putting an end to a party’s claim in the action. In the present case, the grant of the injunction order sought would extinguish the D’s claim to a lien and a statutory power of sale over the Belongings: §§64, 68 and 72 Decision.

63.  In the Injunction Decision, this Court cautiously did not make a final adjudication of the factual disputes between the parties. The assessment of the merits of the parties’ respective cases was expressly confined to the limited evidence before me without oral testimony at that interlocutory stage and solely for the purpose of determination of the application for continuation of interlocutory injunction as set out in §§52, 60-63, 68-71. Neither final fact-findings nor conclusive ruling on the parties’ rights and liabilities was made. The assessment was expressly restricted to the limited extent of evaluating if prima facie case, good arguable case, serious issues to be tried had been shown for the purpose of an injunction order application.

64.  Under Ground 7 [P’s SA §§7], P complains this Court to have failed to adequately weigh the minor monetary dispute between the parties and overlooked the disproportionality of D holding P’s belongings worth HK$2,000,000 versus the HK$15,480 claimed by D. Such argument is a repetition of its unsuccessful argument in the Injunction Application, which I have seriously considered and rejected in the Injunction Decision that I should not repeat here.

65.  Suffice it to say that P’s argument of disproportionality is misleading. Not only that P failed to substantiate its allegation of the Belongings worth HK$2,000,000, it also ignores D’s claim for interests as well as the incidental costs and expenses of sale as provided by section 5 of the Hotel Proprietors Ordinance, Cap 158 (“HPO”), still less of the claim for the storage fees.

66.  P’s allegation of the Belongings worth HK$2,000,000 is merely bare allegation as examined in §§69, 75-81, 85-86 of the Injunction Decision. Its assertion of the Belongings being private properties and accordingly protected by privacy does not discharge P from its burden of proof.

67.  P’s another new allegation that D should have known the nature and character of the Belongings during the process of moving them from the Room to the Storage Area is unconvincing for most of the Belongings were packed with non-transparent materials or in boxes. Lacking solid evidence for proof of the value of the Belongings at this stage, P’s argument, for the purpose of appeal, of the Belongings worth HK$2,000,000 and the loss of them cannot be compensated by damages falls away.

68.  On the other hand, D has a strong arguable case for its claim for long outstanding unpaid rental fees at the daily rate of HK$660 at least for the period between 14 August 2022 and 4 September 2022 in the total sum of HK$15,840 (§69) plus interest (§21).

69.  It is noteworthy that in assessing the merits for the purpose of an interlocutory injunction application, this Court was in mind the different nature between the claim for the unpaid rental fees up to 4 September 2022 and that for the storage charges thereafter as elaborated in §§69-71 of the Injunction Decision. I also gave reasons as to why P’s argument on the invalid charge of the storage fees after 4 September 2022, even if taking it to the highest, would not render D’s claim for right of lien and statutory right of sale invalid (§70 of the Injunction Decision).

70.  On such basis, D’s claim for unpaid rental fees gives rise to a strong arguable case to assert a right of lien as well as the statutory right of sale over all the Belongings under HPO. The law of lien empowers the hotel proprietor to have a general lien for a guest’s unpaid bill over all goods brought by the guest until the bill is paid. (§64-66). Section 5 of HPO confers absolute right to sell the guest’s properties to pay himself the amount of any debt together with the costs and expenses of such sale, and to pay, on demand, to the guest the surplus, if any (§67).

71.  The fact that the lien and the statutory right of sale will be extinguished by the Ex-parte Injunction Order is one of the material factors pointing to the discharge of the Injunction Decision (§64, 68). Thus considered, the P’s argument of disproportionality is unjustified. Ground 7 is unmeritorious.

(D) DAMAGES AS ADEQUATE REMEDY

72.  Ground 8 [P’s SA §8] is bound to fail. This Court has examined all the evidence before me to ascertain what the Belongings are, the nature and the value of them. Gathered from the Statement of Claim, the affirmations, the photos, the skeleton submissions of both parties, P only gave a very brief general description of the Belongings, not to mention solid evidence for proof. Most of the Belongings were packed up. The contents and the nature of them remained unknown (§§75-82; 85-86). With the limited evidence at this stage, P was not able to prove a prima facie case that the Belongings worth HK$2,000,000 and the damage of them could not be compensated by damages.

73.  Ground 9 [P’s SA §9] attacks §§79-81 of the Injunction Decision. It challenges this Court should not have questioned why P had not “earlier raise the potential irreparable damage”. P asserts that it had no reason to foresee harm while the Belongings were safely stored in the Room. Such argument is misleading. The fact is P had not mentioned about irreparable damage even after the Belongings were moved to the Storage Area, neither in any of the pre-action correspondences nor the Statement of Claim (before amendment) as noted at §79 of the Injunction Decision.

(E) BALANCE OF CONVENIENCE

74.  P’s contention that this Court applied the wrong principles is misconceived. Whether the status quo should be maintained is irrelevant to an assessment of adequacy of damages. At any rate, P’s demand in the Injunction Application to immediately transfer the Belongings to the Room and further, return them to P forthwith without payment of room rentals or the unpaid rental fees cannot be considered as maintaining the status quo.

75.  Instead, it virtually compels D to provide guest room service for storage of the belongings of its alleged debtor free of charge and to completely waive its strongly arguable entitlement to the unpaid rental fees, and further, surrender its right of lien and statutory right of sale as explained in §93 of the Injunction Decision. I am slow to accept that justice can be best served in this way as contended by P.

76.  P’s another argument that this Court was wrong to accept damages are adequate remedy to P’s loss is unconvincing. I should not burden this Decision with a repetition of the legal principle that if damages would be adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiff’s claim appeared to be at that stage. The assessment of D’s ability to pay is unarguably necessary: American Cyanamid Co v Ethicon Ltd [1975] AC 396 at 408C-E.

77.  Under Grounds 10 and 11 [P’s SA §§10-11], P criticizes this Court to have prejudged the suitability of the Storage Area. It also argues that the Alleged Post-hearing Incident has discredited the Injunction Decision as well as disclosed D’s deceitful management of the Storage Areas and manipulation of evidence.

78.  Such argument premises on a misinterpretation of the Injunction Decision. In that, this Court expressly declined P’s invitation to make any final ruling on the suitability of the Storage Area ahead of trial. I only pointed out the limited evidence adduced by P so far, which could not support its complaints about the unsuitability of the Storage Area and D’s deceitful manipulation of evidence at that stage: §§84-90.

79.  Due consideration was also given to D’s Qualified Duty. The affirmations and photographs showed that the Belongings were fenced off with lock, equipped with security check and temperature check (§85-86), damages would be adequate remedy for P’s loss (§§83, 92), and all the relevant matters (§§93-95). P is unable to argue how such balancing exercise is plainly wrong or against the legal principles.

80.  Looking at all the relevant matters in the round, there was simply no basis for this Court to embark on speculation exercise on what might happen in future (§87 of the Injunction Decision). This Court has also considered that even if there might be change of circumstances of the Storage Area or the risk of damage actually surface, there was no basis for this Court to assume that D would not appropriately or properly cope with those new changes (§88). The Alleged Post-hearing Incident (and even the alleged breach of condition of government lease or licence) falls squarely in this situation. In view of D’s Qualified Duty to keep the Belongings is not unlimited, P is unable to show how my exercise of the discretion is wrong.

81.  In any event, the Alleged Post-hearing Incident cannot advance P’s position any further for damages remains an adequate remedy for P’s loss. The incident must also be tested against other factors as set out in the Injunction Decision. A flooding incident during extreme weather does not discredit the Injunction Decision. P cannot deny that D had taken immediate actions to cope with the incident as contemplated in §88 of the Injunction Decision.

82.  P’s allegations about D’s forged evidence and stealing of its belongings are a regurgitation of its submissions which have been considered and dealt with in §89-91. Actually such allegations are untested bare assertions. They, at any rate, cannot disprove my observation that damages would be adequate remedy for P’s loss of property.

83.  Ground 12 [P’s SA §§12] is unarguable. In the absence of any appeal against my Order granting the interim stay of the Ex-parte Injunction Order dated 18 July 2023 (“Stay Order”), the Stay Order is irrelevant to the present application.

84.  Likewise, P’s dispute on its liability to pay the costs of the stay application is hopeless. Given my finding that the Ex-parte Injunction Order should be discharged on any of the Dismissal Grounds and absent any appeal against the Stay Order, P has to pay D’s costs of the application for stay.

85.  As to Ground 13 [P’s SA §§13], P’s assertion that the Storage Area was an illegal use of the Carpark does not take P’s position any further for the reasons set out above.

86.  Notwithstanding the numerous grounds put forward by P, P has failed to disprove the Dismissal Grounds. Each of the Dismissal Grounds alone would be sufficient for dismissing the Injunction Application. While any of those reasons stands, P would not have a reasonable prospect of success in the appeal.

DISPOSITION

87.  Having considered all the Parties’ arguments, I conclude that none of the grounds advanced by P has any merit and I do not take the view that its intended appeal enjoys any reasonable prospect of success. There is no other reason why leave to appeal should be granted in the interest of justice. I refuse to grant leave to appeal.

88.  I order that both the Evidence Summons and the Leave Summons be hereby dismissed.

COSTS

89.  Having considered all the relevant circumstances and D’s Statement of Costs for the Evidence Summons, I make the following costs order nisi.

(1) The costs of the Evidence Summons shall be paid by P to D, including all costs reserved, with Certificate for Counsel, summarily assessed at HK$18,000 (inclusive of Counsel fees in the sum of HK$10,000), payable forthwith.

(2) The costs of the Leave Summons shall be paid by P to D, including all costs reserved, with Certificate for Counsel, to be assessed summarily on party and party basis.

(3) For the summary assessment of the costs of the Leave Summons, D shall lodge and serve its statements of costs of the Leave Summons within 7 days from the date hereof. P shall lodge and serve its succinct statements of objection within 7 days thereafter. The summary assessment of costs shall be conducted on papers thereafter no matter whether P has lodged any statement of objection. The assessed costs shall be paid by P forthwith after the summary assessment.

(4) The above two costs order nisi shall become absolute in the absence of application to vary by Summons within 14 days from the date hereof.