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

DCCJ 2191/2023

[2023] HKDC 1325

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2191 OF 2023

————————

————————

————————

DECISION

————————

INTRODUCTION

1.  This is the application of the plaintiff (“P”) for continuation of the Ex-parte Injunction Order granted by HH Judge E Yip (“Learned Judge Yip”) on 12 July 2023 (“Ex-parte Injunction Order”) until the trial of this action or further order of the court (“Present Summons”).

BACKGROUND

2.  The present action concerns the right of the defendant (“D”), the proprietor of a hotel (“Hotel”), to detain, and thus has a lien, upon, the belongings (“Belongings”) brought by P through its directors into the Hotel in respect of the unpaid room rentals and/or the storage fees.

3.  Both parties are registered companies in Hong Kong. Ms. Yung Mei Chun Jessie (“Ms. Yung”) filed an affirmation for the purpose of conducting the present proceedings for P as its director under Order 5A of the Rules of the District Court, Cap 336H (“RDC”). Her husband, Mr. Cheung Moon Hoi (“Mr. Cheung”) is the other director of P (collectively, “Couple”).

4.  On 13 March 2022, Cheung arranged to rent a room of the Hotel[1] and the Couple checked in to guest room No 442 (“Room”). From 13 March 2022 to 12 April 2022 (“First Period”), the room rentals were paid at an average daily rate of HK$550 per night[2] (inclusive of 10% service charge) (“First Contract”).

5.  The Couple then caused to have the Belongings (P alleged to be approximately 200 packs) moved into the Room.

6.  On or around 13 April 2022, Mr. Cheung signed for and on behalf of P a written agreement described as “Long Stay Room Contract” dated 12 April 2022 (“Second Contract”) whereby P rented the Room from 12 April 2022 to 11 July 2022 (“Second Period”) at an average daily rate of HK$400.

7.  For the present purpose, it would be more convenient to first briefly set out D’s case as follows.

D’S CASE

8.  It is the D’s case that prior to entering into the Second Contract, D had made known to P and the Couple that, in the absence of any special contract between the parties, D would charge P for the use and occupation of the Room basing on the prevailing daily rate as determined by D from time to time.

9.  Under the Second Contract, the daily rate of HK$400 was only offered for the Second Period as a long stay discounted rate for a guarantee of ninety consecutive nights stay commitment and for the Second Period only. The Second Contract contains a written term that the room rates “are subject to change after the [Second Period] and based on the Hotel’s availability upon receiving the request.”.

10.  By entering into the Second Contract with knowledge of the matters aforesaid (“Alleged Knowledge”), P and/or the Couple agreed to pay the prevailing daily rates for the use of the Room in circumstances where there was no special contract between the parties.

11.  Upon and after the expiry of the Second Period, P and/or the Couple did not check out or settle the room rentals despite D’s proactive daily phone calls and emails to P and/or the Couple seeking P’s check-out arrangement as well as settlement of the outstanding room rentals (including the prevailing daily rate of HK$660 after the expiry of the Second Period).

12.  Subsequently, in order to encourage P and/or the Couple to settle all the outstanding room rentals and vacate the Room (and/or in exchange of their doing so), D retrospectively offered to let P occupy the Room from 11 July 2022 until 14 August 2022 (“Third Period”) at a special daily rate of HK$400. The special arrangement was offered on the condition that P would settle all the outstanding charges and vacate the Room on 14 August 2022.

13.  By the acceptance of the retrospective offer with the Alleged Knowledge on 26 July 2022, P and/or the Couple agreed to pay the prevailing room rates where there was no special contract between the parties. An agreement to this effect was accordingly formed on 26 July 2022 (“Third Contract”).

14.  Later, D received payment of the room rentals up to 14 August 2022. Since then, no further payment has ever been made by P.

15.  D had from time to time repeatedly reminded P and/or the Couple of the scheduled delivery of vacant possession of the Room on 14 August 2022 and failing which, the prevailing room rate of HK$660 would apply thereafter.

16.  On 13 August 2022, P notified D that it would check out on 4 September 2022. Immediately after such notification, D again reminded P and/or the Couple that the then prevailing daily rate of HK$660 would apply from 14 August 2022 onwards and advised them to check out on 14 August 2022 as scheduled if the prevailing daily rate of HK$660 was not agreeable.

17.  In reply, P and/or the Couple simply expressed their disagreement with the prevailing daily rate of HK$660 (without justification) but again made no attempts to check out or vacate the Room by 14 August 2022 as scheduled. Instead, they continued to occupy the Room without payment despite repeated requests.

18.  On or around 4 September 2022, P and/or the Couple asked to retrieve the Belongings. They nevertheless sought to settle the room rentals after 14 August 2022 at the daily rate of HK$400 and refused to pay the prevailing daily rate of HK$660. Hence, P’s requests for retrieval of the Belongings were denied by D due to the long outstanding unpaid room rentals.

19.  Subsequently, D duly notified P of the change of the prevailing daily rate to HK$1,320 from 1 March 2023 with prior notice. On 11 May 2023, D informed P that the Belongings would be moved from the Room and placed at a storage area (“Storage Area”) with a daily storage fee of HK$500 per day. Since 18 May 2023 (“Removal Date”), the Belongings have been stored at the Storage Area.

20.  Premised on P’s failure to settle the unpaid bill of:

(i)  the prevailing daily rate for the Room at HK$660 from 14 August 2022 to 28 February 2023;

(ii)  the prevailing daily rate for the Room at HK$1,320 from 1 March 2023 to 17 May 2023; and

(iii)  thereafter, the Storage fee at a daily rate of HK$500

(collectively, “Unpaid Fees”).

21.  D filed its Defence and Counterclaim on 14 July 2023 (“DCC”) to counterclaims P, other than interests and costs, for:

(i)  payment of the Unpaid Fees;

(ii)  alternatively, mesne profit for occupation of the Room and the Storage Area.

22.  In its Amended Defence and Counterclaim dated 11 August 2023 (“ADCC”), D also seeks:

(iii)  a declaration that D is entitled to a lien over the Belongings and a power of sale of them pursuant to section 5 of the Hotel Proprietors Ordinance, Cap 158 (“HPO”).

P’S CASE

23.  In the present application, P’s case can be concisely summarized as follows.

24.  P admits that it has not made any payments for the use of the Room after 14 August 2022. It contends that its liability should only be limited to the daily rate of HK$400 for the period between 15 August and 4 September 2022, plus a sum of HK$1,980 (being the unpaid balance of the room rental for the Second Period. It was left unpaid because the sum was refunded to P by the credit card bank due to an unauthorized transaction):

HK$400 × 21 days (15.8.2022 – 4.9.2022) + HK$1,980

= HK$10,380 (“P’s Alleged Sum”)

25.  P says that it is not liable to pay more than the P’s Alleged Sum because the rate of the Room had been agreed at HK$400 and that on 13 August 2022, it had notified D that it would check out on 4 September 2022. It accordingly argues that D had no right to detain the Belongings, in particular, P’s attempts to settle the P’s Alleged Sum were rejected by D on 4 September 2022.

26.  P also argues that the amount in dispute between the parties is limited to a small sum of HK$5,460, being HK$660 - 400 × 21 days, which does not justify D’s detention of the Belongings worth HK$2,000,000.

27.  P further complains that the Storage Area was a temporary cordoned-off area located inside the underground car park of D, which was hot, humid, dirty, poorly ventilated and egregiously deficient security measures, exposing the Belongings to high risks of damage by insects, rodents, mold, and bacteria, potentially depreciating their values.

28.  That said, it is noteworthy that in the Statement of Claim dated 2 June 2023 (“SOC”), P solely asked for, other than interest and costs, damages caused by D’s wrongful detention of the Belongings in the sum of HK$2,000,000. After the hearing on the Return Day of the Ex-parte Injunction Order on 21 July 2023 (“Return Hearing”), P amended the SOC on 28 July 2023 by adding a new claim for the return of the Belongings and a list of the items being moved out of the Room on the Removal Date (“ASOC”).

PROCEDURAL HISTORY

29.  In order to understand the arguments of the parties, it is necessary to outline the procedural history which is relevant to the present application as follows: -

2.6.2023	P commenced the present action by filing the Writ of Summons endorsed with the SOC.
	On the same day, P made an urgent ex-parte application by way of an ex-parte summons for an injunction order (“First Ex-parte Application”). The application was supported by Ms. Yung’s affirmation.
	P did not give notice of the First Ex-parte Application and of the hearing to D.
	At the ex-parte hearing (“First Ex-parte Hearing”), the First Ex-parte Application made on an ex-parte basis and without giving notice to D was dismissed by HH Judge Harold Leong (“Learned Judge Leong”).
15.6.2023	D filed an Acknowledgement of Service of Writ of Summons giving intention to defend through its solicitors.
12.7.2023	P again made an urgent ex-parte application for an injunction order in almost identical terms of the First Ex-parte Application by taking out another ex-parte summons (“Second Ex-parte Application”). The application was supported with another affirmation of Ms. Yung.
	Again, P did not give notice of the Second Ex-parte Application and of the hearing to D.
	At the ex-parte hearing (“Second Ex-parte Hearing”), the Learned Judge Yip ordered in terms of the draft order (“Draft Order”) annexed to the ex-parte summons, being the Ex-parte Injunction Order, and, scheduled the Return Hearing.
13.7.2023	The Ex-parte Injunction Order was filed into court by P.
14.7.2023	D filed DCC.
16.7.2023	P left the Ex-parte Injunction Order at the front desk of the Hotel[3].
18.7.2023	Upon D’s urgent ex-parte application with prior notice to P (“D’s Stay Application”), this court stayed the Ex-parte Injunction Order with costs of the application be reserved. P was notified of the application but did not attend the hearing.
19.7.2023	P filed the Present Summons.
21.7.2023	At the Return Hearing, both parties sought to file supplemental affirmations for substantive argument of the Present Summons. The stay of the Ex-parte Injunction Order continued pending determination of the Present Summons, without prejudice to D’s rights to dispute the issues relating to the grant of the Ex-parte Injunction Order.
28.7.2023	P filed ASOC.
11.8.2023	D filed ADCC.

EX-PARTE INJUNCTION ORDER

30.  The Ex-parte Injunction Order remained in force up to and including the Return Day. The terms which are relevant to the present purpose are that:

(1)  D be restrained from locking the Belongings at the Storage Areas;

(2)  D be restrained from damaging, opening, or disposing of the Belongings without P’s presence and written consent;

(3)  D be compelled immediately to transfer the Belongings from the Storage Area to a hotel guest room (“Guest Room”) that is of the same standard and condition as the Room;

(4)  D be restrained from moving the Belongings from the Guest Room without P’s permission;

(5)  D be compelled to allow P and its loss adjuster access to the Guest Room for inspection and assessing damage of the Belongings for a period of 7 days, within 7 days from the issuance of the order;

(6)  D be restrained from prohibiting P from removing the Belongings from the Guest Room after the inspection;

(7)  D be restrained from not cooperating with P to facilitate the move out of the Belongings.

31.  Plainly the injunction order P now seeks to continue is not only prohibitive but also mandatory, in effect, D is compelled to (without trial):

(a)  immediately transfer the Belongings to a hotel guest room of the same standard and condition of the Room;

(b)  allow P and its loss adjuster to access and inspect the Belongings in the Guest Room for a period of 7 days immediately thereafter;

(c)  return the Belongings to P and to facilitate P for retrieving them from D immediately after the inspection.

DISCUSSION

32.  Having considered the Parties’ submissions and the relevant documents before me, I form the view that the Ex-parte Injunction Order should be discharged for the following grounds and any one of such grounds alone is sufficient to justify the discharge.

MATERIAL NON-DISCLOSURE

33.  I accept D’s submission that the Ex-parte Injunction Order should be discharged on the mere ground of there being material non-disclosure on the part of P in the Second Ex-parte Application. As such contention will have much bearing on the argument on costs, I shall deal with the serious matters in turn.

34.  It is trite that an applicant making an ex-parte application has the duty to make full and frank disclosure on all material matters. This is particularly in circumstances when the court only has the evidence presented by the applicant, and the other party who is not notified of the hearing is not offered a fair chance to present its arguments and evidence in opposition.

35.  For the following reasons, it is clear to me that P has failed to discharge its duty to make full and frank disclosure of all matters known to P and which are material to the court’s determination of whether to exercise its discretion to grant the interim relief sought.

36.  First, P failed to disclose the fact that the First Ex-parte Application, which was also made by way of ex-parte summons without giving notice to D, was dismissed by the Learned Judge Leong. The dismissal clearly marked the disapproval of the court of P’s application for a mandatory and prohibitory injunction by way of ex-parte application without giving notice to D. Given the two ex-parte applications were close in time, seeking almost identical terms, basing on mostly the same set of facts and grounds of application, the dismissal of the First Ex-parte Application and the reasons of it are material to the court’s consideration of the Second Ex-parte Application and P had not discharged its duties in full and frank disclosure of such important facts.

37.  Second, I accept D’s submission that Ms. Yung had unjustifiably annexed to the Second Ex-parte Application the Draft Order, which was misleadingly worded as ex-parte “(on notice)” injunction order, giving a false impression that prior notice of the application had already been given to D. Eventually, the Ex-parte Injunction Order was granted in terms of it.

38.  Ms. Yung’s explanation that the mistake was caused by her adoption of a template is unpersuasive. The circumstances leading to the mistake and the source of the alleged template were not accounted for. It could hardly be an innocent mistake since whether notice had been given is a factual matter within the knowledge of Ms. Yung, who personally handled the two ex-parte applications. Mr. Yeung, Counsel for D, reiterated that from Ms. Yung’s conduct of the present proceedings and her many elaborate submissions, making reference to a number of legal authorities, statutory provisions and Practice Direction, she has demonstrated that she is familiar with civil proceedings and is well-versed in law.

39.  Third, I am also convinced that P failed to disclose D’s possible defence which was within P’s knowledge in the Second Ex-parte Application. P kept silent on D’s declared reasons of charging the prevailing rates, upon which the right of detention of the Belongings was asserted. P also failed to disclose the relevant emails served by D at the material times. For reasons which I would elaborate further below, D clearly has a potential defence which could reasonably be raised to challenge P’s claim, which is within P’s knowledge. See: Hong Kong Civil Procedure 2023 Vol.1 §29/1/51.

40.  The matters aforesaid are undoubtedly material and would have weighed in the scales in the exercise of the court’s discretion. They tend to be against the grant of an injunction order. Such information should have been placed before the Learned Judge Yip for consideration in the Second Ex-parte Application. In view of P’s serious and material non-disclosure, the Ex-parte Injunction Order was apparently obtained improperly and accordingly should be discharged forthwith on this basis alone.

41.  Viewed in this light, P’s argument that this court is bound by the decision of the Learned Judge Yip and should come to the same conclusion is unmeritorious. In any event, the Ex-parte Injunction Order, being an interim interim relief, was meant to be an urgent stop-gap measure. The decision made by the learned Judge was provisional, which is open for further arguments and revisits in the adjourned inter-parte hearing, especially D was not offered a right to be heard at the Second Ex-parte Hearing. This court should not be bound in any way by such interim interim measure.

ABUSE OF EX-PARTE PROCEDURE

42.  Further, P’s recourse to the ex-parte procedure was unjustified, still less of an ex-parte application without giving prior notice to D.

43.  It is well-settled law that urgent ex-parte application without notice is only permitted in very limited and exceptional circumstances, where the situation is 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 be frustrated if the defendant is informed: Chen Pei Xiong v Convoy Global Holdings Ltd [2021] HKCFI 836 at §113.

44.  It is apparent that the Second Ex-parte Application was not an application of extreme urgency that there was no time to warn D or where the purpose of the injunction would be defeated if D is informed. It was made several weeks after the Belongings were placed at the Storage Area and after the commencement of the present action.

45.  Further, Ms. Yung had actual knowledge of the Court’s disapproval of her ex-parte application without notice tactics in the 1^st Ex-parte Application. She was also aware that D had a potential defence as demonstrated in a number of contemporaneous emails records which could reasonably be raised for arguments. Hence, she had no valid reasons to re-employ the urgent ex-parte without notice application in the Second Ex-parte Application again.

46.  At the Return Hearing, Ms. Yung admitted that D had not been notified of the Second Ex-parte Application before the Second Ex-parte Hearing. She nevertheless tried to seek support from her previous letters to D to argue that D had been notified of P’s intention to make application for an injunction order in the past. Such argument is hopeless for the simple reason that those letters were issued in the past which could not serve as a notice of an application which had yet been made or the hearing which had not been scheduled.

47.  Thus analyzed, P should not have made the Second Ex-parte Application on an ex-parte basis, especially without giving any notice to D. This is another valid ground to discharge the Ex-parte Injunction Order. I am convinced that the decision not to give any notice to D prior to the Second Ex-parte Hearing and the serious non-disclosure was not innocent but deliberate.

48.  By reason of matters set out above, I come to the conclusion that the Ex-parte Injunction Order should be discharged and not to be continued even on the single ground of material non-disclosure or the abuse of the ex-parte procedure. For completeness sake and for consideration of whether there should be a re-grant of the order, I should further consider the other arguments of the parties.

QUESTIONS TO BE TRIED ON MERITS

49.  It is trite that an applicant for interlocutory injunction is required to show (i) serious questions to be tried; (ii) damages are not adequate remedy; and (iii) the balance of convenience lies in favour of granting the injunction: American Cyanamid Co v Ethicon Ltd [1975] AC 396.

50.  For an interlocutory mandatory injunction to be granted, the court will have to feel a “high degree of assurance” that in the trial, it will appear that the injunction has been rightly granted. The ultimate question is what is the course to adopt that involves the least injustice in case of the grant or refusal of interlocutory relief as the case may be: Hong Kong Civil Procedure 2023 Vol 1 at §29/1/29.

51.  The bone of the disputes between the parties focuses on whether the daily room rate payable after 14 August 2022 was HK$400 or the prevailing daily rate, i.e. HK$660.

52.  No doubt these are matters to be determined at trial. For the present application for an interlocutory mandatory injunction, P is required to show a strong prima facie case for the court to feel “a high degree of assurance” that at trial it will appear that the injunction was rightly granted. It however has failed to do so.

53.  Gathered from the pleadings, the affirmations and the submissions of P, the P’s case that the daily rate of HK$400 for its use of the Room after 14 August 2022 had been agreed between the parties is vague, lacking particulars or solid evidence in support.

54.  It is pleaded in paragraph 2 of the SOC (subsequently the ASOC) that:

“After discussion and with the mutual consent of both parties, the Plaintiff’s rental period of the Room was extended to cover from 11 July 2022 to 14 August 2022 on the same terms [referring to the Second Contract], and further extended to 4 September 2022 on the same terms (based on an oral agreement without a written contract).”

That said, no particulars of the said alleged “oral agreement” were pleaded.

55.  Despite the many affirmations (together with a number of exhibits) and the skeleton submissions prepared by Ms. Yung, no solid details have been provided for proof of the said alleged “oral agreement”, other than a brief general allegation that the sales team of D had orally agreed with P. No direct documentary proof was produced.

56.  On the other hand, D gave a detailed account of the events at the material times and produced several series of emails of the parties between 11 April 2022 and 22 September 2022 to contradict P’s case and to support its case that P had known well that D would charge the prevailing rate of D in the absence of any special contract between the parties as early as April 2022, and in the absence of a special contract for the use of the Room after 13 August 2022, the prevailing room rate has applied thereafter. The following emails are of particular relevance:

(a)  An email from D dated 25 July 2022:

“Dear Mrs. Cheung,

As no feedback receive from you and we contacted to your mobile but remained with no response and voice message left. Kindly note that the room charge on 25 Jul will be accumulated to your account under special daily rate at HK$660N x 12 nights after 16:00 hrs today.

Kindly be informed that as per management approval, a special daily rate of HK$400N from 11 July 2022 onward as you previously requested was offered if you are able to vacant the room and settle all the outstanding balances before 28 July 2022.

We sincerely hope that we could conclude the case with a settlement within the coming seven days or otherwise, if no confirmation is received from you before 28 July 2022, we reserve the right to take other action to vacant the room by ourselves.

We are looking forward to your reply and your proactive action will be highly appreciated.”

(b)  The preceding message was followed by a message from P dated 26 July 2022:

“Will check out on 14 August 2022.”

(c)  The preceding message was followed by an email from D dated 26 July 2022:

“Dear Mrs. Cheung,

Thank you for your constructive schedule. Kindly be informed that if you are able to vacant the room of 442 on or before 14 Aug 2022, we would like to offer you a special rate at HK$400N from 11 July - 14 Aug 2022 as per management approval. Please advise the payment method of the outstanding amount occurred in your room.

We sincerely hope that we could conclude the case and looking forward to hearing from you soon.”

(d)  An email from D dated 1 August 2022:

“Dear Mrs. Cheung,

Thank you for making the room 442 payment for 11 Jul - 14 Aug. The payment was well received. Your check-out date will be on 14 Aug. In the meantime, please be in touch if there are any changes to your itinerary. Thank you.”

(e)  An email from D dated 13 August 2022 11:18 am:

“Dear Mrs. Cheung,

Good Morning! Kindly reminded the check-out date will be on 14 August. Please advise the expect arrival time and the arrangement tomorrow. If you would like to appoint a transportation company to pick up your belongings, please let us know the company name and the car plate number in advance. We believed that the traffic at hotel driveway will be very busy on Sunday.

Thank you for your kind attention and looking forward to your reply.”

(f)  Such message was followed by an email from P dated 13 August 2022 5:25 pm:

“will check out on 4 September 2022”

(g)  An email from D dated 13 August 2022 6:06 pm:

“Dear Mrs. Cheung,

Thank you for your reply.

As per the email sent out on 26 July, kindly be informed that the special daily rate at HK$400N was only valid until the night of 13 Aug 2022. We can offer the new daily room rate at HK$660N for your extension should you not able to empty the room on 14 Aug 2022 as promised. The total room charge at amount of HK$13,860N (HK$660N x 21 days from 14 Aug - 4 Sep 2022). We understand that you may not approach to Front Desk for the payment. You can settle the room charge by bank in or FPS as previous hotel HSBC bank account information.

If you are disagreeing of the new room rate, you may stick with your original plan of checking out the hotel room 442 on 14 Aug 2022.

[Bank account information was provided]

Thank you for your understanding and looking forward to hearing from you soonest.”

(h)  Such message was followed by an email from P dated 13 August 2022 10:59 pm:

“disagree of the new room rate”

(i)  An email from D dated 14 August 2022 9:30 am:

“Dear Mrs. Cheung,

Good Morning! Thank you for your reply. Please be understood that the special daily rate HK$400N has been expired and new room rate HK$600 would be applied on 14 Aug 2022 until the room 442 return to hotel, and we have been well communicated the special rate validity in our email on 26 July 2022 and no commitment about extending it afterward.

As mentioned in our email communication at 18:06 hrs on 13 Aug, if you disagreed the new daily room rate at HK$660N, you may keep the original plan to check out the room 442 today.

Thank you for understanding and looking forward to your reply soonest.”

57.  No reply from P was received. D sent further emails to P (also addressed to “Mrs. Cheung”) informing that as no feedback was received from her and its efforts in contacting her through her registered mobile number as well as leaving voice messages met with no answer, the daily rate of HK$660 per night would apply on 14 August 2022. Such message was repeated on 15 and 17 August 2022.

58.  Thereafter, D sent a number of emails to P to repeat its stance and demand payment settlement as well as arrangement of vacating the Room. Those messages generally met with no reply or a very brief reply.

59.  It is noteworthy that during the period, P did not complain that D had breached any agreement of an agreed daily rate of HK$400.

60.  On the pleadings and the affirmations before me, I am not convinced that P has shown a strong prima facie case that a daily rate of HK$400 applied from 14 August 2022 onwards. On the contrary, D has demonstrated a strong arguable case that P had all along been aware that the daily rate of HK$400 was offered on condition that P would settle all the outstanding charges and vacate the Room by 14 August 2022, and, prior to 14 August 2022, P had clearly been informed that the special rate of HK$400 would only valid until 13 August 2022 and thereafter, the prevailing room rate would apply.

61.  Even though P tries to refer to two offers put forward by D via emails respectively on 30 June 2022 and on 4 May 2023 for proof of its alleged agreed rate of HK$400, the wordings of those email messages could hardly support such contention but tend to indicate they were indeed conditional offers. Lacking any evidence to indicate that those offers had been accepted or the conditions had been satisfied, those offers apparently would have lapsed.

62.  It is also difficult to be persuaded by P at this stage that a phrase of “well noted you mentioned disagree the rate of HK$660N” which is extracted from an email subsequently sent by D on 25 August 2022 could be interpreted as a proof of the existence of a prior oral agreement of an agreed rate of HK$400 from 14 August 2022 onwards.

63.  In the premises, D has a strong arguable case that there have been unpaid bills which give rise to a right of lien over the Belongings and a statutory right to sell them under HPO.

64.  In law, a hotel proprietor as an innkeeper has a lien for a guest’s unpaid bill over all goods brought by the guest until the bill is paid[4]. The lien exists only so long as the hotel proprietor retains possession or control of the goods: Halsbury’s Laws of Hong Kong Vol 25 at §155.143 and footnote 4.

65.  It is a general lien in relation to all property brought into its premises by its guest: The Law of Security and Title-Based Financing (3^rd Ed) at §5.69; Halsbury’s Law of Hong Kong Vol 25 at §155.143.

66.  There are no separate liens in respect of separate chattels, but rather a single lien on all goods which the guest brings with him as his own, whether they are his own or another’s: Mulliner v Florence [1878] 3 QBD 484 and Threfall v Borwick [1875] LR 10 QB 210.

67.  D also seeks to rely on section 5 of the HPO to contend that D, in addition to his ordinary lien, has the statutory right absolutely to sell the Belongings. The statutory provision empowers a hotel proprietor to sell by public auction any property which may have been deposited with him or left in his hotel or in premises appurtenant or belonging thereto, where the guest depositing or leaving such property shall be or become indebted to him for any board or lodging. Such proprietor is entitled to pay himself the amount of any such debt together with the costs and expenses of such sale, and, shall on demand pay to the guest depositing or leaving such property the surplus, if any, remaining after such sale.

68.  Thus analyzed, D has a good arguable case on a right of lien and a statutory power of sale over the Belongings, which would be lost if P is allowed to remove the Belongings from the Hotel. The Ex-parte Injunction Order will strictly extinguish D’s legal rights and deprive D of its substantive claims for such rights ahead of trial if they are found to be existed at the end of the trial.

69.  In view of P’s failure in showing a strong prima facie case, not even a serious issue to be tried, that the room rentals payable is limited to the P’s Alleged Sum (which indeed remains unpaid at present) and D’s strong arguable case for its claim at the prevailing rate at least up to 4 September 2022 is HK$15,840 (HK$1,980 + HK$660 × 21 days, from 14 August 2022 to 4 September 2022), P’s arguments that there are no unpaid bills but just disputed rental fees and that the disputed amount is so small that does not justify the detention of the Belongings are unconvincing. In particular, the actual value of the Belongings remains unknown (which will be elaborated further below).

70.  The foregoing is sufficient to dispose of P’s argument on this issue. I should add that even if I take P’s argument on disputing the room rentals and/or storage fees after 4 September 2022 to the highest, it may only constitute a defence to part of D’s counterclaim which is confined to the charges after 4 September 2022. It however will not advance its position any further for the present application so long as D has a strong arguable case on its right of lien over the Belongings even just basing on the outstanding room rentals from 14 August 2022 to 4 September 2022.

71.  Suffice it to say that it remains to be an issue for trial as to whether D can prove the existence of its alleged agreement by conduct which empowers it to charge P for the room rentals and/or storage fees after 4 September 2022 which is recognized in law as an exception to the general rule that the cost of storing goods retained under a hotel proprietor’s lien cannot be charged by the hotel proprietor.

BALANCE OF CONVENIENCE

72.  Given my assessment on the merits of P’s case as elaborated above, it is far more likely that it will be shown at the trial of this action that it would not be right for the Ex-parte Injunction Order to be continued. The order sought will completely extinguish a right to a lien over the Belongings, which is strongly arguably to have existed, if P were to be allowed to remove the Belongings from the Hotel. This would apparently be real and substantial prejudice to D.

73.  In any event, even if I am wrong on my assessment on the merits of P’s case, and on the assumption that P has a strong prima facie case against D, which I am not convinced this is the case at this stage, I still take the view that it is not just or convenient to continue the Ex-parte Injunction Order for the following reasons.

DAMAGES AS ADEQUATE REMEDY

74.  It is trite that no interlocutory injunction should normally be granted where damages would be an adequate remedy for any loss suffered by the applicant as a result of the refusal of interim relief; and the respondent would be in a financial position to pay them: American Cyanamid Co (supra).

75.  Much has been said by P that a refusal of an injunction order would lead to irreparable damage to the Belongings. It nevertheless fails to justify its allegation. Despite the many submissions and affirmations filed by P, what exactly the Belongings are and the value of them remain unknown. No particulars were provided. Nor there any concrete evidence of the nature, character or value of the Belongings other than a bare assertion of the Belongings worth HK$2,000,000.

76.  Although P declared that it had complied a detailed inventory of the items in the Room and their respective values[5], together with photos and videos, no such inventory was provided.

77.  Ms. Yung’s assertions that the Belongings included items of profound sentimental significance as family photos, personal artworks and irreplaceable mementos and thus cannot be compensated in monetary terms are bare assertions without details, and, somehow, it is difficult to see how P, being a corporate entity, could attach sentimental value to the Belongings.

78.  Other general assertions that the Belongings comprised of business documents, confidential documents, valuable items, personal belongings of P’s directors, etc. which are of a sensitive and private nature do not support P’s case that the damage of them, if any, could not be compensated by damages.

79.  D further points out that the assertion of irreparable damage could not be compensated by damages had never been raised by P in any of its correspondences prior to the commencement of these proceedings. Nor had it been pleaded in the SOC. Instead, the only relief sought by P in the SOC, other than interest and costs, was limited to damages.

80.  D complains that it was only after D’s Stay Application, which was partly premised on damages being adequate remedy to P’s loss, if any, P then changed to make a bare assertion that its loss could not be compensated by damages and then amended its SOC to add a prayer for the return of the Belongings on such basis after the Return Hearing.

81.  P gave no convincing explanations to answer such challenges. In further consideration of the absence of any solid particulars or concrete proof of what the Belongings actually are and of their value, P’s arguments that its loss cannot be compensated by damages and that it is unjust for D to detain the Belongings for a dispute involving a small sum are unpersuasive. Further, there is plainly no evidence to indicate that D, being a proprietor of a 5-star hotel, is unable to pay.

82.  In the premises, the Present Summons should be dismissed and the Ex-parte Injunction Order should be discharged solely on the ground that damages are an adequate remedy.

STORAGE OF THE BELONGINGS

83.  Given damages can be an adequate remedy, P’s complaints about the unsuitability of the Storage Area do not assist P in the present application. For completeness sake, I will deal with such complaints as follows.

84.  The general legal principle is that a hotel proprietor retains a guest’s goods under his lien is not bound to be more careful in keeping them than he would be of his own goods of the same kind[6].

85.  At this interlocutory stage, I should decline P’s invitation to make a final finding on this issue ahead of trial. Suffice it for the present purpose to say that the lacking of evidence of what actually the Belongings are, of a close examination of those items (in particular, most of the Belongings are packed up with non-transparent materials) and of an inspection of the parties’ respective relevant records prevents this Court from accepting the contentions of P at this stage.

86.  On the affirmation evidence before me, most of the Belongings were put in boxes, wrapped or packed with non-transparent materials. They were stored in an indoor underground carpark of D and fenced off by high wooden partitions with a padlock. There were surveillance cameras with motion detection functions. D also produced evidence to show that there had been security checks and temperature checks conducted on an hourly or daily basis since 29 May 2023.

87.  In the circumstances, this Court should be slow to embark on a speculation exercise to speculate on what would happen to the Belongings at the Storage Area without sufficient evidence before me.

88.  Further, I also could not assume that in the event that there is a change of circumstances of the Storage Area giving rise to a real risk of damage to the Belongings, D would not take appropriate and proper actions to cope with the new situations and to locate the Belongings to somewhere else as the situation warrants.

89.  An assessment of damage (or risk of damage) or a finding of forgery cannot be made in the absence of material facts. Nor could they be made basing on P’s non-expert interpretations of some piecemeal technical data or of some extracts of some alleged general theories. Further, a towel being depicted in one photo but not another does not give rise to a compelling inference that it was thrown away or stolen, other than just being placed somewhere else. On the affirmation evidence before me, there is no sufficient evidence to justify P’s complaints at this stage.

90.  Plainly on P’s own case, it requires an expert to inspect the Belongings. I have no doubt that P’s right to appoint an expert to inspect the Belongings will not be prejudiced by the discharge of the Ex-parte Injunction Order. Such right is expressly protected by the RDC, the Practice Direction and the relevant legal principles.

91.  Both parties are at liberty to seek proper case management directions from the court in accordance with the civil procedures as stipulated in RDC and the Practice Directions so as to expedite the present proceedings for final determination of the real issues in dispute effectively and efficiently.

92.  After all, as explained above, damages are adequate remedy to any loss caused by D’s detention of the Belongings if P’s claim can be proved at the end of trial.

93.  I also cannot ignore the fact that P’s request is for immediate transfer of the Belongings from the Storage Area to a guest room in the same condition and standard of the Room. Such request essentially compels a hotel to provide a guest room free of charge to P, against which it has a strong arguable claim for unpaid fees, which will understandably disrupt D’s business to a certain extent.

94.  Looking at all the matters in the round, I form the view that the Ex-Parte Injunction Order carries a higher risk of injustice if granted at the interlocutory stage. Not only that it completely destroys and deprives D of its legal right of lien if it turns out to have been wrongly granted, it also has an effect of drastically changing the status quo, giving P almost the whole substance of the relief sought in the present action without a full trial.

95.  It is oppressive to compel D to provide a guest room to store the Belongings free of charge and to return them ahead of trial while damages could be an adequate remedy. In the premises, I do not consider it is just or convenient to continue the Ex-parte Injunction Order or to re-grant the injunction.

DISPOSITION

96.  Having considered all the relevant documents and the submissions of both parties, I come to the conclusion that the Ex-parte Injunction Order ought to be discharged on either of the grounds aforesaid. It should not be continued by reason that it is improperly obtained by P both as a matter of substance and procedure. P is not entitled to a re-grant of an injunction order in this application. The Present Summons is dismissed.

COSTS

97.  Taking into account all the relevant matters, including the outcome of the present application, P’s invoking the ex-parte process without any proper justifications, P’s serious non-disclosure of material facts, I make a costs order nisi that P do pay D costs of the Present Summons, the D’s Stay Application, including the costs of the hearing on 18 July 2023, the Return Hearing and the present hearing, in any event, on an indemnity basis, to be taxed if not agreed, with certificate for counsel.

98.  This costs order nisi shall become absolute in the absence of application to vary by summons within 14 days.