HO TAK ENG t/a HUNG MAN INTERIOR DESIGN CO v. FAME BRILLIANT LTD

DCCJ 2138/2005

in the high court of the

hong kong special administrative region

court of appeal

DISTRICT COURT CIVIL ACTION no. 2138 of 2005

Date of Handing Down Reasons for Judgment: 20 December 2005

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REASONS FOR JUDGMENT

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Hon Rogers VP:

1.  This was a renewed application for an interim injunction to restrain the defendant from carrying out any decoration works in the defendant’s premises at House 15 of Stage II, Marina Cove, 380 Hiram’s Highway, Hebe Haven, Sai Kung (“the house”) until 15 December 2005 and for a mandatory order allowing inspection of the house.  The application was refused but in view of the importance of certain aspects of the matter we said we would give our reasons in writing.

2.  The action was commenced on 10 May 2005.  By a statement of claim filed on 1 June 2005 the plaintiff claimed in respect of a contract to carry out decoration works at the house.  It is unnecessary to detail the dispute between the parties other than to say that in a defence and counterclaim filed on 29 June 2005 the defendant denied liability and averred that the plaintiff had failed to complete or carry out the works satisfactorily.  It was said that because the plaintiff had failed to complete the works, even by extended deadlines, the defendant had requested the plaintiff to cease all works at the house.  For the purposes of the present application it can be taken that the matters in dispute between the parties will entail an investigation as to how much of the work which the plaintiff undertook to do had in fact been carried out and possibly as to the quality thereof.

3.  On 4 May 2005, that is a week before the action was commenced, the suggestion had been made in a letter from the plaintiff’s solicitors to the defendant that the parties should jointly appoint an independent chartered surveyor to assess the works done by the plaintiff.  On 21 June 2005 solicitors, who by then had been instructed on behalf of the defendant, wrote agreeing to the plaintiff appointing his own surveyor to assess the works.  In that letter the defendant’s solicitors indicated that they understood that photos and a video of the works had been taken by the plaintiff and copies were asked for.  The plaintiff’s solicitors refused to provide that.

4.  It would seem that although the parties were not able to agree on the name of a joint surveyor, the plaintiff’s own quantity surveyor inspected the house with the defendant’s consent on 28 July 2005.  The plaintiff’s solicitors wrote on that day saying that the surveyor did not have the building plans with him and asked for permission to have a second inspection.  That was refused by letter dated 4 August 2005.  On 25 October 2005 the plaintiff’s solicitors requested the defendant’s solicitors to advise their clients to allow a further inspection failing which they would apply to court for a mandatory injunction.  That was refused by letter dated 8 November 2005 and, apart from an intervening letter dated 10 November 2005, there the matter remained until 7 December 2005 when the plaintiff’s solicitors wrote to the defendant’s solicitors saying that work was being carried out at the house and that unless the defendant stopped carrying out work and allowed plaintiff’s quantity surveyor to inspect the premises they would apply for a mandatory injunction without further notice.  I would only add that despite 3 affirmations being filed by the plaintiff, in view of submissions made by the plaintiff’s counsel, it is not entirely clear whether work is being carried out or has been carried out at the house since last summer.

5.  It was in those circumstances that application was made ex parte to the Deputy District Court Judge for a mandatory injunction to permit the plaintiff’s expert to inspect the premises and to prevent the plaintiff carrying out any work at the house until 15 December 2005.  The Judge refused that application.  No note of what was said by the judge has been shown to this court.

6.  Three matters appeared to this court to be relevant to this application.  In the first place, what the plaintiff seeks is an order which is procedural in nature and is not based on any substantive legal right.  It is therefore a matter of case management.  This court does not interfere with case management decisions unless it considers it is clearly necessary to do so.  In this context it can be observed that if a party destroys a matter in dispute between parties it is a well-established legal principle that a court is likely to assume the truth of relevant facts in relation to the matter destroyed alleged by the opposing party.  That principle is encapsulated in the legal maximomnia praesumuntur contra proferentem.

7.  In the second place, the urgency for this application to be made ex parte seems to be absent.  The history recited above demonstrates that the dispute between the parties has been in existence for many months and the parties’ stances have been well known to each other.  In the circumstances the justification for an urgent application does not exist.

8.  In the third place, the application before the Deputy District Court Judge, as well as the application in this court, was made ex parte without any notice to the defendant.  There was no justification for the application to be made without so much as giving even the shortest notice that the plaintiff’s lawyers would be appearing in front of the judge.  Ex parte applications without notice should only be made where either the delay would cause injustice to the Applicant or the Defendant would take action which would nullify the effect of the injunction.  Apart from anything else, such a procedure is against the principles of natural justice.

9.  In view of the importance of this point I would like to quote yet again from the judgments of Hoffmann LJ, as he then was, and Sir Thomas Bingham MR in the case of TRP Limited v Thorley (Court of Appeal, 13 July 1993).  They deserve careful consideration by all who may be involved in an ex parte application.  The judgments are, regrettably, unreported but the Lexis Transcript records Hoffmann LJ as saying:

“In my judgment the judge should not have entertained the application ex parte and I venture to repeat what I said in Re First Express Limited which was reported in [1991] BCC 782 at page 785.

‘It is a basic principle of justice that an order should not be made against a party without giving him an opportunity to be heard.  The only exception is when two conditions are satisfied.  First, that giving him such an opportunity appears likely to cause injustice to the applicant, by reason either of the delay involved or the action which it appears likely that the respondent or others would take before the order can be made.  Secondly, when the court is satisfied that any damage which the respondent may suffer through having to comply with the order is compensatable under the cross-undertaking or at the risk of uncompensatable loss is clearly outweighed by the risk of injustice to the applicant if the order is not made.

There is, I think, a tendency among applicants to think that a calculation of the balance of advantage and disadvantage in accordance with the second condition is sufficient to justify an ex parte order.  In my view, this attitude should be discouraged.  One does not reach any balancing of advantage and disadvantage unless the first condition has been satisfied.  The principle audi alterem partem does not yield to a mere utilitarian calculation.  It can be displaced only by invoking the overriding principle of justice which enabled the court to act at once when it appears likely otherwise injustice will be caused.’

The rules require only two clear days’ notice and leave can, if necessary, be obtained for abridgement.  Even in cases which are too urgent for formal notice of any kind there is no reason why informal notice of an application should not be given by facsimile or telephone.”

10.  Sir Thomas Bingham MR had this to say:

“So far as the substance of this matter is concerned I agree with the judgments which My Lords have delivered and I agree with the order which they propose.  I do, however, wish to endorse and highlight the observations of My Lord, Lord Justice Hoffmann, concerning the procedure which was adopted in this case.  Applications for injunctions are governed by Ord 29 of the Rules of the Supreme Court and in Ord.29 r.1(2) one finds the following:

‘(2) Where the applicant is the plaintiff and the case is one of urgency such application may be made ex parte on affidavit but, except as aforesaid, such application must be made by a motion or summons.’

That rule is the subject of comment in para 29/1/8 on page 514 in volume 1 of the current White Book where one finds among other statements the following:

‘Though this rule authorises ex parte applications by the plaintiff, such an application for an injunction will not be granted unless it is made promptly, and it must be shown that there are strong grounds to justify its being made ex parte.’

Again, ex parte injunctions are for cases of real urgency where there has been a true impossibility of giving notice of motion.

These statements are unsurprising since it is on the face of it plainly contrary to the principles of natural justice that any judicial order adversely affecting a party’s interests should be made against him without his being given a reasonable opportunity of being heard.  That is the simple overriding rule on which our system of justice depends.  The rule is not, however, absolute and unqualified.  Derogations are permitted in certain very limited and exceptional circumstances, the most obvious of these so far as the granting of injunctions is concerned being where the situation is one of such extreme urgency that there is literally no time to warn the defendant of what is proposed or where the purpose of the injunction will or may well be frustrated if the defendant is informed of what is proposed or where the defendant simply cannot be found.  The exceptional nature of the circumstances must, however, be stressed.  They are the exception and not the norm.  Even when time does not permit application on full notice it is highly desirable to inform the other party that the application is to be made ex parte so that he can if he wishes attend and make such representations as he wishes.”

11.  I have quoted extensively from these judgments because, although they contain what is clear and well-established law which has been reiterated in judgments in Hong Kong, it is apparent and confirmed by the submissions made by counsel that these highly important principles are being disregarded.  An ex parte application is not a convenient alternative to an inter partes application.

Hon Le Pichon JA:

12.  I agree.