YUEN FAT WHARF & GODOWN CO. LTD. v. WAY-PROSPERITY CARGO SERVICES CO. LTD. AND OTHERS

HCA3110/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.3110 OF 2001

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J U D G M E N T

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1. This matter arises out of a dispute between certain mid-stream operators running the business of handling containers on behalf of shipping companies, consignors and consignees of containerized cargoes and the operators of tractors which hold those containers. Some publicity was given to the dispute at the time which apparently involved the imposition by operators of a charge of $40 per container on the drivers who were bringing them into the depots.

2. On 13 July 2001, Chu J made an order against the 1st and 2nd defendants enjoining them, inter alia, against obstruction of ingress to and egress from the plaintiff's depot by the parking or slow driving of tractors, and requiring them to give information about the identities of the remaining defendants. The order was duly served on the 1st and 2nd defendants and on their directors that being in the case of the 1st defendant, Mr Yip Chi Keung and in the case of the 2nd defendant, Mr Wong Chi. But unfortunately, the 1st and 2nd defendants did not, in terms of those orders, give the information sought and so the plaintiff applied for sequestration of property and committal to prison of the directors of the 1st and 2nd defendants.

3. Since then, the 1st and 2nd defendants have given the information or at least some of the information which is sought. Messrs Yip and Wong said that although they received the order, they did not understand it because all the documents were in English which they do not speak and they forwarded the documents to the convenor of the China Hong Kong Transport Conference ("the Conference") for advice. They got the advice from the Conference that they were restrained from going back to the plaintiff's depot by court order but according to their affirmations, they were not advised about the requirement of giving the information about the identities of the drivers and operators of the tractors. Only at a later stage when they were able to get some legal advice did they realize the true position.

4. Now, both Mr Yip and Mr Wong say that they are prepared to give further affirmations on behalf of their respective companies which will make clear whether the persons named in their earlier affirmations are the drivers or the operators, i.e. lessees of the tractors, or both.

5. The remaining question is that of costs which is the only order now sought by the plaintiff. The plaintiff's counsel has referred me to a dispute or, shall I say, a difference between the approach of the Hong Kong courts in the 1980s and the English courts more recently, as to the liability of a director for contempt by the company and, in particular, I have been referred to a more recent Hong Kong case where Stone J in Abu Dhabi National Tanker Co. v. Lam Ming Chi [1998] 4 HKC 320 took the view that he should decline to impose a requirement of wilfulness, whatever the English courts may say, and intended to proceed along the lines espoused by Hunter JA in the case of Nicolas Pappadis & Anor v. Chan Shing Sheung Barry & Others [1989] 2 HKLR 511. At least, according to Stone J, that is the line that should be taken pending any change of view by the Hong Kong Court of Appeal when it next has the advantage of considering the English authorities. From my own part, I respectfully agree with this approach. In the words of an extrajudicial comment by the Lord Chancellor of England, Lord Thurlow in the 1700s, "companies have neither bodies to be punished nor souls to be condemned, therefore they do as they please". That is often misquoted by the old saw that "a company has neither a body to be kicked nor a soul to be damned". It seems proper that, as has been pointed out by the learned authors of Arlidge, Eady & Smith on Contempt, 2nd Edn., there should be a policy of making the directors of companies liable for contempt of the company so as to focus their minds on the fulfillment of corporate obligations, but any further consideration of these points of law will be matters for the Court of Appeal in due course.

6. It follows from what I have said that the directors being liable for the breach by their company were certainly in contempt and of course the companies themselves were in contempt. In support of the application for costs on a full indemnity basis, the plaintiff relies on Re Garage Equipment Associations' Agreement [1964] LR 4 RP in which such costs were ordered.

7. Here I think, however, that I can properly take into account the position of the companies and their alter egos, i.e. Messrs Yip and Wong, in finding themselves faced with documents that they could not understand. They did what might be expected of them at least to some extent, they took them to an association of which they were members in the hope of having them clarified. Unfortunately, they did not get proper clarification as no doubt they would have done if they had chosen to seek proper legal advice, but at least they did something. Although I think that technically the companies are in contempt and technically they themselves are liable, to the extent that there is no evidence that they wilfully refused or delayed to give the information I think I can take this into account in making the order for costs.

8. Accordingly, the order will be as follows : Firstly, Mr Yip and Mr Wong do comply with Chu J's order by filing a further affirmation to clarify the exact identity of the persons named in their affirmations or exhibits thereto under the heading of "Driver/Operator" to state clearly whether such persons are, or whether each such person is a driver or an operator, i.e. lessee of tractor, or both. Secondly, the 1st and 2nd defendants do each file an affirmation to confirm the particulars of the drivers and operators disclosed by Mr Yip and Mr Wong in the affirmations already filed by them and to be disclosed in their further affirmations. In effect what that means, I will say for the benefit of Messrs Yip and Wong, is that they have got to make the same affirmations but on behalf of their respective companies. Finally, there will be an order that Chu J's order be amended by substituting for the tractor registered no.HU3251, the no.HU3291, i.e. the change from HU3251 to HU3291 as appearing in paragraph 4(a) of the said order. There will be no order as to costs in respect of that amendment.

9. As to the injunction itself, as I have indicated, taking into account the position of the companies and their directors who are no doubt the alter egos of them, I will make an order for costs on a party-and-party basis.