CENTALINE PROPERTY AGENCY LTD v. LAI YIN YEE KAREN

DCCJ5854/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 5854 OF 2005

DCCJ5855/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 5855 OF 2005

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D E C I S I O N

1.  This is an application by the plaintiff for injunction to restrain two ex-employees from breaching a restrictive covenant in their employment contracts from being employed by a competitor.  Full particulars of the relevant clauses appear in the statement of claim and in the employment contracts exhibited to the affirmation of Hui Kwai. 

2.  At first, the injunction sought is one to restrain the defendants until 16 March 2006 from directly or indirectly being engaged as director, partner, principal, agent, servant or consultant to accept employment or otherwise carry on or be concerned or interested in any business concern of real estate agency within Tuen Mun, which is much wider than the injunction claimed in paragraph 1 of the prayer of reliefs in the statement of claim. 

3.  Miss Leung, counsel for the plaintiff, at the hearing agreed to limit the interlocutory injunctive relief to paragraph 1(a) of the prayer of reliefs in the statement of claim and to restrict the application of the interlocutory injunction sought to residential properties in Tuen Mun and not to all properties in that area.  Miss Leung has provided written submissions and authorities to me this morning and brought me through them.  She accepts that due to the limited period of application of the restrictive covenant, i.e. six months from the cessation of employment, I should have regard to the principles in Lansing Linde Limited v Kerr [1991] 1 All ER 48 apart from the general American Cyanamid principles. 

4.  I accept that the restrictive covenant in question, i.e. clause 14(a) for Miss Lai and clause 17(a) for Mr Chow, which sets out geographical and time limits, is reasonable.  In the present case, this translates to the application of the restrictive covenant to the Tuen Mun area and up to 16 March 2006.  The plaintiff is now prepared to further limit the interlocutory injunction sought to residential properties. 

5.  I have considered the evidence filed and the submissions and authorities by Miss Leung which I need not repeat here.  I am satisfied that the plaintiff has a legitimate interest to protect.  I should not come to a definitive view on the merits, but I find that there is a serious question to be tried and the plaintiff has demonstrated a reasonably good prospect of succeeding at the trial.  The balance of convenience also lies with the plaintiff.  I note that there is no restriction against Miss Lai and Mr Chow from seeking their livelihood by being employed as estate agents in areas other than Tuen Mun and in respect of dealing with non-residential properties in the Tuen Mun area itself.

6.  I have considered the relevant evidence and do not consider there is a need to fortify the undertaking as to damages.  In the circumstances, the interlocutory injunction ought to be granted. 

7.  The formal wording of the injunction in each case will be as follows: an injunction be granted to restrain each defendant until the trial of these proceedings or 16 March 2006, whichever is earlier, or until further order from being employed by any person (including a limited company) for the purpose of negotiating or otherwise acting as an estate agent in business transaction in respect of the sale and purchase or leasing of residential properties in the Tuen Mun zone.  There will be liberty to apply.

(Discussion re costs)

8.  Costs of the application be costs in the cause.

Ms Shannon Leung, instructed by Messrs Cheung & Choy, for the Plaintiff in both cases

Defendants in both cases, in person, absent