CHUNG WAH MACHINE WELL ENGINEERING CO. LTD. v. IP FU WA BENTHONY

IN THE COURT OF APPEAL

1997, No. 38

(Civil)

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J U D G M E N T

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Bokhary JA:

1. On January 16 this year, upon the plaintiff company's application, made ex parte on notice and after hearing both parties, Mr Justice Cheung made an order essentially to the effect that, until the determination of an inter partes summons or further order in the meantime, the defendant be restrained from holding himself out as a director of the plaintiff and from entering its premises or coming within 50 feet of them.

2. An inter partes summons was then taken out; and on 24th it was adjourned for the filing of further evidence.

3. The matter was back before the judge on the 31st. After hearing the parties he continued the ex parte in junction until further order and also ordered the delivery up within 14 days by the defendant to the plaintiff of such property of its as he may have acquired while a director of its. There was some problem over the drawing up of the order embodying all of that. But it was cleared up under the slip rule.

4. We now have before us an interlocutory appeal by the defendant against what the judge ordered on that day, January 31.

5. The plaintiff supports the judge's order for the reasons which he gave and also on additional grounds set out in a respondent's notice.

6. Essentially, one point is taken on behalf of the defendant, now represented by Mr Huggins who did not appear below. The point is that neither the writ nor anything else before the judge at the time of the order appealed against showed or supported any cause of action.

7. The writ is indorsed thus:

"The plaintiff seeks relief against the Defendant in respect of the Defendant's actions and falsely holding himself out as being a Director of the Plaintiff company from 9th January, 1997 after he was aware that he was no longer a director of the Plaintiff company and in particular the Plaintiff seeks the following relief:-

a. Damages;

b. A declaration of indemnity for any liabilities of the company arising from the Plaintiff's action;

c. Further or other relief in costs"

8. When the statement of claim was eventually filed on March 3 this year, it pleaded: (i) liability as a de facto director or as a director de son tort; and (ii) wrongful interference with the plaintiff's business by unlawful means.

9. Two paragraphs in Mr Huggins's skeleton accepted by Mr Barlow for the plaintiff are paragraphs 37 and 43.

10. Paragraph 37 reads:

"The notion of director de son tort means that a de facto director is liable for any act of commission or omission on his part to the same extent and in the same manner as if he had been a de jure director, provided it can be shown that he has done something which resulted in loss to the company for which, if he had been (or still been) a de jure director, the company would have been entitled to a remedy against him."

11. And paragraph 43 says that unlawful interference with business "consists in one person using unlawful means with the object and effect of causing damage to another".

12. Neither of those causes of action, Mr Huggins submits, is covered by the indorsement on the writ. And there was no evidence before the judge, Mr Huggins submits, to show that the defendant had done or was threatening to do anything to attract liability either (i) as a de facto director or as a director de son tort or (ii) for wrongful interference with the plaintiff's business by unlawful means.

13. This being an interlocutory appeal, we propose studiously to avoid saying anything which might prejudice the future trial of the action.

14. Accordingly, we limit ourselves to saying this. The indorsement on the writ is sparse but set out the relief claimed and is not defective as a vehicle for putting forward the causes of action relied upon by the plaintiff and in due course fully pleaded in the statement of claim. As for the evidence before the judge, we are of the view that the same, taken as a whole, did disclose serious questions to be tried in regard to the facts put forward in support of those causes of action. There is, we note, no argument by the defendant on the balance of convenience. As for the mandatory order for delivery up, it was not opposed before the judge. And we would not disturb it ourselves. Nothing was in fact delivered up under it, the defendant saying that there was nothing to deliver up. And there has been no attempt to commit him. The order for delivery up may have no practical consequence in the result. But we are not prepared to reverse the judge's decision to grant it in the absence of any opposition to it before him.

15. We should mention that after the judge had given judgment on the 31st, the defendant by his then counsel offered an undertaking in terms of the prohibitory relief granted by the judge. And Mr Huggins has indicated before us that, in the event of the appeal being allowed, his client would be prepared to give an undertaking in terms of such grant of prohibitory relief. That does not arise for the reason that we dismiss this appeal.