FRED LEE and CHOW WAI LAN, CHRISTINE v. WONG HING WAH MICHAEL HCB 26018/2002

S’s words:-

A case that the trustees won.

However, please read CACV 30, 31 & 32 / 2007 as well.

In my own view, with more experience in making objections, I believe we will have more cases that are ruled against the bankrupts in the future.

The various case authorities, whether against or in favour of the trustees, are good examples/guidelines for the trustees to make objections in the future. Thus, planning can be made before objections are submitted.

--- quote from judgment ---

Date of Judgment : 12 October 2007

The grounds on which an order suspending an automatic discharge may be made are specified in section 30A(4) of the Ordinance.

The grounds on which the automatic discharge of Mr Wong from his bankruptcy are objected to were set out in an affirmation made by Mr Lee made in support of the application. Two matters were relied upon. Both were said to demonstrate unsatisfactory conduct on the part of Mr Wong in respect of the period before his bankruptcy.

The approach to the exercise of the discretion under section 30A(3)

As has been observed in a number of decisions, the introduction of the present section 30A of the Ordinance marked a significant change in the approach of the law towards bankrupts. Previously, there was no provision for automatic discharge. A bankrupt had to apply for his discharge, and it was generally difficult for him to obtain it. The effect of the change has been to place the emphasis on rehabilitation of the bankrupt so as to enable him to resume a normal life (see e.g. Re Hui Hing Kwok [1999] 3 HKC 683, per Le Pichon J at 687B).

So far as the power under section 30A(3) to suspend the automatic discharge of a bankrupt is concerned, it is, I think, clear that one of its main purposes is to provide the bankrupt with an incentive to cooperate with his trustee, and to comply with his obligations under the Ordinance. However, this cannot be its only purpose. If it were, there would be no point in including among the grounds for objection any reference to the pre-bankruptcy behaviour of the bankrupt. Other purposes that are served by the power to suspend automatic discharge would appear to me to include the protection of the public, where there is reason to think that the reintroduction of the bankrupt into ordinary commercial life might pose risks or dangers against which lenders and others who might have dealings with him should be protected, and, in appropriate cases, as a mark of disapproval of the way in which the bankrupt has conducted his affairs whether before or after his bankruptcy.

The court has recently considered the approach which should be adopted to objections to discharge in cases involving allegedly unsatisfactory pre-bankruptcy conduct in Lee Fred v Leung Chin Yeung [2007] 1 HKC 164 (Kwan J), Re Tong Yuk Kin (unreported, HCB 22870/2002, Deputy Judge A To, 20 June 2007) and Re Liu Man Hoo (unreported, HCB 11719/2002, Lam J, 14 September 2007). I should point out that the last of these decisions was given after the hearing in this matter concluded, and was not the subject of submissions by either party. However, the approach adopted in it is, I think, broadly in line with that taken in the other two decisions.

These authorities make it clear that there are two stages involved when the court is considering the exercise of its powers under section 30A(3). It is first necessary to determine whether one or more of the grounds mentioned in section 30A(4) has been established. If this is done, the court then moves on to consider whether or not, in the exercise of its discretion, a suspension of the automatic discharge that would otherwise have been available to the bankrupt should be ordered. It will not be in every case where a ground for suspension is made out that a suspension will be called for or imposed. In determining whether or not a suspension should be ordered, the court will have regard to all the circumstances of the case, including the nature of the acts complained of and the post-bankruptcy conduct of the bankrupt.

That said, bearing in mind the policy of rehabilitation, I would accept that save in very serious cases, a suspension of automatic discharge in respect of unsatisfactory pre-bankruptcy conduct is likely to be for a shorter period than might be ordered in a case in which a bankrupt had been guilty of other, post-bankruptcy ground for suspension, where a longer period of suspension may well be called for so as to ensure that the bankrupt properly complies with his obligations.

Taking account of the fact that there are no complaints as to Mr Wong’s post-bankruptcy conduct, and that he appears to have provided information to the Trustees as and when required, I have come to the view that a suspension of Mr Wong’s automatic discharge for a period of four months would be sufficient in this case. Accordingly, I shall order that the relevant period under section 30A(1) of the Ordinance shall cease to run, in the case of Mr Wong, for a period of four months. The effect will be that he is to be treated as having been discharged from his bankruptcy on 24 June 2007.

JERRY CHEN v. WHIRLPOOL (HONG KONG) LIMITED FACV 23/2006

S’s words:-

The Final Court of Appeal was asked to decide an appeal of the Applicant that in my personal view was without merit at all. The Applicant was surprisingly supported with legal aid in this appeal to Court of Final Appeal. Why I make such a comment? Let us look at the decision of Court of Appeal refusing leave be given to the Appellant for leave to appeal:-

“1) We are not satisfied that this case involves matters of great general or public importance. First our decision is based on the unique facts of the case. The relevant legal principles are well established. Second while we accept many Hong Kong employers are asking their employees to work in the Mainland, we are not satisfied that the specific arrangement in this case is also a widespread practice which called for a determination by the Court of Final Appeal.

2) We are also not satisfied that this case comes within the ‘or otherwise limb’. It has not been shown that the situation is exceptional.”

I feel doubt whether we do require any law that extends the duty of an employer to such.

Why legal aid was granted? Would it be the situation that the Applicant had used all/most of the compensation he did receive in his Employees’ Compensation Claim in the litigations in High Court and Court of Appeal?

Anyway, the public fund is now required to pay for the costs of the Respondent. What a pity!

--- quote from judgment ---

Date of Judgment : 26 October 2007

The appellant was seriously injured in a traffic accident in Beijing on 13 October 1998. It happened when the car in which he was travelling as a passenger was negligently driven onto its incorrect side of the road and collided with an oncoming motor vehicle. He was in the employ of the respondent, designated as commercial director. The respondent is a Hong Kong company in the Whirlpool group. This group is centred in the United States, but is also present and active in many other parts of the world. As the appellant’s contract of employment with the respondent expressly provided, he was “based in Shanghai … with responsibilities to” a Mainland company headquartered in Shanghai. This company is named Whirlpool Narcissus (Shanghai) Co. Ltd (“WNS”). It served as the corporate vehicle for a joint venture in the Mainland between the Whirlpool group and a Mainland company named Shanghai Narcissus Electric Appliances Co. Ltd.

Employers’ duty of care/contractual liability

Whatever else employers’ common law duty of care and contractual liability despite delegation of performance involves in a case like the present, the appellant cannot succeed under either of these two bases of liability or both of them combined unless he can persuade us to reverse the concurrent findings of the courts below that Mr Zheng was a reasonably competent driver. After giving the matter anxious consideration, I have come to the conclusion that there are no circumstances that would justify us in the exceptional course of disturbing those concurrent findings. It is true that there is no evidence as to when Mr Zheng joined WNS, how long he had driven executives on his behalf or how often he did so. But the main thrust of the appellant’s case in the courts below in regard to the sort of driver required was that a professional one was required. That was the focus below, most significantly at the trial. Otherwise there might have been more evidence about Mr Zheng’s activities as a driver.

Vicarious liability

The two problems which the appellant faces on the foregoing argument as to vicarious liability are these. First of all, it cannot be said that there is no reasonable possibility that the state of the evidence relevant to the point would have been materially more favourable to the other side if the point had been taken at the trial. Secondly, entertaining that point would certainly involve entertaining a point which was not taken in the courts below but which, if accepted, would constitute a major development in the law.

For those reasons, I do not think that the appellant can in the circumstances succeed on vicarious liability. I say nothing on how the law of vicarious liability may develop in future.

The appellant has recovered employees’ compensation. Hopefully he will find some solace in that. I can find no basis on which to enable him to recover more. In the result, I would dismiss the appeal with costs and make an order for legal aid taxation of the appellant’s own costs. It is common ground that costs should be dealt with that way if, as it has turned out, the appeal is dismissed.

LEUNG TSANG HUNG AND LEE WAI YU v. THE INCORPORATED OWNERS OF KWOK WING HOUSE FACV 4/2007

S’s words:-

Kwok Wing House is a building in Mongkok with a famous bookshop in its Ground Floor. There was a loss of life in the accident. Not only the owner/occupier and tenant of the illegal structure, the Incorporated Owners of the Building was held liable. Once the Incorporated Owners was liable, it thus meant that every owner of the Building was liable. The Policy Consideration was rejected by the Final Court of Appeal. That should be the end of the appeal and the Incorporated Owners should have no way to avoid being responsible to pay for damages.

Personally, I partly agree with the view of Stock JA in Court of Appeal. It would be too harsh for the Incorporated Owners to be liable for the accident. The decision of the Final Court of Appeal was too harsh to the owners, but when we spend just a few minutes to consider the principle mentioned by Mr. Justice Bokhary, the decision was correct.

There is not yet any strict requirement for a building to have third party insurance to cover such kind of accident. We will have such statutory requirement soon. However, in the past, it was really difficult for a building to obtain any such insurance coverage. Now, every building whether old or not should obtain its own insurance.

But, if there was not yet any Incorporated Owners for the Building, it would be difficult for the Plaintiff to sue all owners. There are still lots of buildings in Hong Kong that are without any incorporated owners. The decision of the Final Court of Appeal may again discourage old buildings to have their Incorporated Owners.

That was definitely not in line with the existing policy of the Government to encourage owners to have their own incorporated owners.

---

Date of Judgment: 26 October 2007

Mr Justice Bokhary PJ:

Without attempting an exhaustive statement of the legal position, I think that at least this much can be said. Where any part of, or anything annexed to, the common parts of a building falls off as a result of its hazardous state and causes death, injury or damage in the street below, the incorporated owners are liable in nuisance for the consequences if they knew or ought to have known of the hazard in time to remove it but had unreasonably failed to do so. I regard such a rule as consistent with principle. And, as Lord Reid famously said in Dorset Yacht Co. Ltd v. Home Office [1970] AC 1004 at pp 1026H - 1027A, “when a new point emerges, one should ask not whether it is covered by authority but whether recognised principles apply to it”. That was said in regard to negligence. It holds good in regard to nuisance. On the basis of what these incorporated owners ought to have known in the circumstances of the present case as disclosed by the evidence, I am of the view that the estate of this deceased woman is entitled to succeed against them. For the foregoing reasons and those more fully stated in Mr Justice Ribeiro PJ’s judgment with which I agree, I would allow this appeal in the terms which he proposes.

Mr Justice Ribeiro PJ:

On 10 August 1999 at about 3.00 pm, Madam Liu Ngan Fong Sukey was plying her trade as a hawker at a fixed pitch in Tung Choi Street when she was struck by a piece of concrete which had fallen from the adjacent building. She died in consequence.

The building is known as Kwok Wing House (“the building”) and the object which had caused Madam Liu’s death was a triangular-shaped piece of concrete weighing some 15 lbs which had fallen from the 11th floor. It had formed the corner of a concrete canopy projecting out from over the enclosed balcony of Flat A on that floor (“the flat”), before it had become detached and fallen down into the street.

The plaintiffs are the administrators of the estate of Madam Liu. They sued Tse Yiu Pui and Ho Lai Bing who jointly owned the flat (“the owners”) as the 1st defendants. Chan Kwok Chi was their tenant (“the tenant”) and he was made the 2nd defendant. The 3rd defendants are the incorporated owners of the building, being a corporation which had come into existence on 12 April 1999 upon the owners being registered under the Building Management Ordinance[4] (“the BMO”).

The owners consented to judgment so that at the trial, the Judge was concerned only with the liability of the tenant and the corporation. They were each sued in negligence and public nuisance. His Lordship found the tenant liable along with the owners but dismissed the action against the incorporated owners with costs, holding that they did not owe any actionable duty to the deceased. Damages were assessed in the sum of $1,554,742.00 and judgment in that amount, together with various sums of interest and costs, was entered against the owners and the tenant. The plaintiffs’ appeal to the Court of Appeal in relation to the liability of the incorporated owners was dismissed,[5] again on the basis that the corporation owed the deceased no operative duty. An appeal on quantum is pending in the Court of Appeal. Leave to appeal to this Court was granted by the Court of Appeal[6] under section 22(1)(b) of the Court’s statute.

D.4 Control over the common parts

Given such attributes, can it be said that the incorporated owners in the present case exercised sufficient control over the building’s common parts to justify placing them in a category of actionability in respect of omissions?

In my view, the answer is affirmative. The Ordinance places the incorporated owners under a duty to “maintain the common parts and the property of the corporation in a state of good and serviceable repair ...; and to do all things reasonably necessary for the enforcement of the obligations contained in the deed of mutual covenant ... for the control, management and administration of the building.”[100] The common parts include the external walls.[101] Obligations deemed by the BMO to form part of the DMC which the corporation is duty-bound to enforce include a prohibition against any person converting any common part to his own use without the approval of the owners’ committee.[102]

The DMC in the present case requires each owner to share in the cost of keeping the external parts of the building in good and tenantable repair and condition.[103] It also provides that the parties should not “make any structural alteration to the said building”.[104] Each owner covenants “not to place anything in or to occupy ... any part of the ... said building intended for common use.”[105] The parties also covenant to employ an agent to “generally take care of the said building for the common benefit of the parties hereto and to repair ... the structure and exterior of the said building or any part or parts thereof which are used by the parties hereto in common ...”[106]

To give these powers and duties teeth, the BMO authorizes entry on behalf of the incorporated owners into any flat for the purpose of inspecting, repairing, maintaining or renewing any common parts or other property in the flat causing concern; or for the purpose of “abating any hazard or nuisance which does or may adversely affect the common parts or other owners”.[107] If entry is refused, the BMO empowers a magistrate to issue a warrant authorizing a person to break into the flat in the presence of a police officer.[108] Members of the management committee exercising such powers in good faith and in a reasonable manner are given personal immunity.[109] Costs incurred in the exercise of these powers are recoverable from the owner in question,[110] as are the costs of remedial works which the corporation may undertake itself where the owner fails to do what is necessary, such costs being a charge upon the defaulting party’s share of the property.[111]

D.5 Incorporated owners’ actionable omissions

In the light of the foregoing, it is my view that the legal attributes, duties and powers of the incorporated owners place them in a category closely analogous with that occupied by the owners and occupiers discussed above.[112] They exercise a sufficient degree of control over the common parts of the building to justify making them subject to a duty which is actionable on the basis of omission in respect of nuisance hazards arising on or emanating from those common parts, subject to proof of the other necessary elements of liability.

D.8 Conclusion as to liability

It follows, in my view, that all the elements of liability on the incorporated owners’ part have properly been made out. They are accordingly liable for damages for public nuisance along with the flat’s owners and tenant.

F. Policy considerations

In reaching his decision, Stock JA referred to policy considerations which led him to the view that fixing incorporated owners with liability in a case like the present might have “harsh and unreasonable pragmatic consequences”.

This passage suggests that Stock JA was proceeding on the basis that liability is strict, so that the incorporated owners would be liable even where there is no reasonable basis for considering the structure a hazard. However, if, as has been held above, it is recognized that the law has evolved to the point where liability is premised on the defendant knowing or properly being taken to know of the existence of the hazard, this policy objection falls away. There is nothing harsh or unreasonable about making the body responsible, on behalf of the owners collectively, for keeping the common parts in good repair liable for failing to do so where they know or ought to know of the existence of a nuisance hazard endangering members of the public. The powers of enforcement given to the corporation by the BMO have been mentioned above.[143] The available measures are not confined to action in the courts.

There are moreover, in my view, sound reasons for making the incorporated owners, and not merely the individual owners implicated, responsible. Where the hazard involves the external common parts of a high-rise building, effective inspection and maintenance works can really only be carried out if those parts (and any illegal accretions thereto) are dealt with as a whole, with the erection of scaffolding and the like and with all the owners’ contributing to the cost, subject to possible adjustment regarding the individual owners implicated. And where the nuisance hazard consists of some unauthorized structure encroaching upon or being attached to the common parts, the individual owners who may have erected or adopted the structure and benefit from its existence, may well be unwilling to take any steps to remove it. Compulsion from, or direct action by, the incorporated owners may well be required if the hazard is to be nullified.

HKSAR v. CHOW TIN SHING (周天勝) CACC 85/2007

S’s words:-

We should have heard many cases that defendants were charged of dangerous driving causing death and finally sent to prisons.

For the appeal against conviction for Charge 1 (that suggested that the Applicant endangered the life of his own crew), the conviction was quashed without surprise. In fact, the breach of the International Regulations for Preventing Collisions at Sea did not automatically suggested that the Applicant was endangering the life of his own crew. The Court of Appeal used the words:-

We are not not sure why the judge referred to the prosecution having “proved beyond reasonable doubt the defendant’s conduct in not keeping a proper lookout”.

Then leaving the sentencing for Charge 2.

The Court refused to rely motor vehicles offences to consider the sentencing. In no doubt, we do not have much case authorities as reference for the sentencing of such charges pursuant to Section 72 of the Shipping and Port Control Ordinance. My personal view is that, motor vehicles offences are relevant, but that was not accepted by the Court of Appeal.

Fortunately, the Court of Appeal also agreed that those cases involving high speed chases were distinguished. The Applicant performed no deliberately dangerous maneouvres but a life was lost. That was the reason why the sentence of the Applicant was reduced to 17 months but not any further.

If there was no loss of life but injuries only, would the Applicant be sent to prison for only 12 months or even shorter period? I feel some doubt on whether immediate custodial sentence would be imposed if that was the situation.

--- quote from judgment ---

Date of Judgment : 22 October 2007

On 13 March 2007, the applicant was convicted after trial before Her Honour Judge Chua in the District Court of two offences of endangering the safety of others at sea, contrary to section 72 of the Shipping and Port Control Ordinance, Cap. 313 (“the Ordinance”), being Charges 1 and 2 respectively. In respect of the offence the subject of Charge 1, the applicant was sentenced to six months’ imprisonment and in respect of the offence the subject of Charge 2, to two years’ imprisonment. The sentences were ordered to be served concurrently, resulting in a totality of sentence of two years’ imprisonment.

The applicant has been granted leave to appeal out of time his conviction in respect of the 1st charged offence. He seeks leave also to appeal the sentences imposed for both offences.

Appeal against conviction for Charge 1

In all those circumstances, independently of any breach of the Regulations by the applicant, it is difficult to see how the prosecution on the evidence before the court had proven to the requisite standard that the applicant’s actions in failing to alter course so as to leave the tug to port had created a real risk of danger.

Accordingly, we grant leave to appeal against conviction so far as the 1st charged offence is concerned, treat the hearing of the application as the hearing of the appeal and allow the appeal. The applicant’s conviction of the 1st charged offence is quashed and his sentence in respect of that conviction is set aside.

Appeal against sentence

Mr Ross has provided us with a number of authorities related to sentences imposed in respect of motor vehicle offences, but we do not think those of direct application to a sentence imposed pursuant to section 72 of the Ordinance. As a matter of general principle, any sentence imposed pursuant to a section 72 offence will primarily depend upon the degree of danger created by the acts of the offender in the circumstances as they existed at the time of the offence. Those circumstances will vary enormously. The weather, degree of visibility, sea state, speed of vessels, manouvres performed and other factors pertaining to those circumstances will often be relevant.

In cases involving high speed chases by police launches of sampans carrying illegal immigrants in Hong Kong waters, sentences of 2½ years and three years’ imprisonment after trial have been approved by this court : see A.G. v. Chan Siu Yun (1995) 2 HKCLR 223 and R. v. Sze Yui, unreported, CACC 348 of 1995. In the latter case, a subsequent similar offence by the same applicant led to a starting point at the maximum of four years’ imprisonment being endorsed : see HKSAR v. Sze Yu,unreported, CACC 143 of 2003. It should be noted in these cases, however, that the acts of endangerment were deliberately reckless and of great risk to the safety of the passengers in the sampans and to a lesser extent to the crew of the pursuing police launches.

We do not think the same considerations apply in the circumstances of the present case. The applicant performed no deliberately dangerous maneouvres. He proceeded at the barge’s maximum speed, but at a speed well within the limit for the fairway. It is true he had elected to proceed on the wrong side of the fairway and in the vicinity of possible inshore traffic in circumstances where he knew his forward vision was reduced and that the applicant’s act brought about a person’s death. But it was not a situation where the applicant in a calculated way risked the lives and safety of others such as was so in the above cited cases. Indeed, immediately after the collision the applicant stopped and contacted the authorities in a successful attempt to bring assistance to the scene. Marine police came and rescued the injured son of the deceased. This is to be distinguished from the callous indifference to life displayed by the defendants in the cited cases. The fact that in those cases there was no loss of life is a matter of pure chance.

Given the maximum term for the sentence of four years’ imprisonment, the contrast between the applicant’s conduct and the conduct of those involved in intentionally risking the lives of others, should have been given greater recognition in the sentence imposed in this case.

For these reasons, we consider the sentence imposed to have been manifestly excessive. In our view in the circumstances of this offence a sentence of 18 months’ imprisonment after trial was called for. There was some mitigation available for the applicant given his clear record and his immediate calling of assistance to the scene, and that sentence should be discounted to 17 months’ imprisonment. We do not regard the applicant’s relative inexperience as a master of such vessels to be a mitigating factor in the circumstances of this case.

Francis Burkett passed away on 5th October 2007

Francis Burkett passed away on 5^th October 2007

Quoted from an email from School of Law of City University of Hong Kong:-

“Dear All, some of you will no doubt remember Francis Burkett who was with the School of Law some 10 years ago. Others may have met him in Practice. Francis died on 5th October and I attach details of the funeral arrangements for your information. Regards, Tony Upham”

His funeral arrangements will take place on 19^th & 20^th October 2007.

Francis was a Barrister in Hong Kong from 1997 (but in UK from 1969). Although I do not believe he was once my lecturer, I remember that I did have met him in my practice. Unfortunately, I have to admit that I do not have a clear recollection of his appearance, age or otherwise. But, in any event, our legal professional again lost a senior member.

2007-10-15

CHAU MING LUNG v. FASTCUT SERVICES LTD AND OTHERS HCPI545/2001

S’s words:-

What had happened ...
The plaintiff was 48 years when he was injured and now he is 57 years old.
The plaintiff spent 3 years for commencing legal proceedings and spent another 6 years to obtain his judgment.

Further, a simple calculation ... 48 + 9 + 6 = ??

Again, with due respect, ... nothing to say further ...

--- quote from judgment ---

Date of Handing Down Judgment : 17 September 2007

On 3 July 1998, the plaintiff Mr Chau was injured whilst working on a platform and fell from a height of about 3 metres. The platform on which he was standing collapsed and he fell to the ground. He was then 48 years of age.

Here Mr Chau has a continuing pain in his hip and both knees. He is now 57 years of age.

(a) Pre-trial loss of earnings
$15,383 x 12 x 9 years 2 months (9.17 years) $1,692,745.00
Less : Wages received - $409,986.00
$1,282,759.00

CHAN KAM PUI v. WONG SIU HUNG AND ANOTHER DCPI1920/2006

S’s words:-
With due respect, ... nothing to say ...

--- quote from judgment ---

Date of Handing down Judgment : 28 September 2007

In these circumstances, I find the Plaintiff was 30% contributory negligent.

In view of the 30% contributory negligence on the part of the Plaintiff, there will be a Costs Order nisi that D1 pays 2/3 of the costs of the action to the Plaintiff, to be taxed if not agreed, with certificate for Counsel. Such Costs Order nisi is to be made absolute 14 days after the handing down of the Judgment.

FRED LEE, trustee of the property of WONG CHI WAI SUNMY, a bankrupt v. WONG CHI WAI SUNMY HCB12941/2002

S’s words:-
Will the Court give more and more judgment in favour of the bankrupts in relation to the application for suspension of automatic discharge on the part of the Trustees, in particular, the Trustee who regarded by the Court as having routinely done the same.

Lam J’s judgment in Liu Man Hoo HCB 11719 of 2002 in no doubt will be the guidelines in future of which the Master in Wong Chi Wai Sunmy’s case also adopts the same.

The pre-bankruptcy conducts of the Bankrupt were doubtful. But when the total contribution to the Official Receiver in thie case was considered, “which is more than half of proven debts”, “the excessive borrowing conduct may be brushed aside.” It thus explains why no creditor would take initiative to object the automatic discharge.

Finally, a pure academic issue, that is, the decision of Master Au Yeung (now Registrar Au Yeung) was again adopted of which the suspension was lifted with retorspective effect as per the decision of Official Receiver v Chan Kwok Keung, HCB 20772 of 2002.

--- quote from judgment ---

Date of Handing Down Reasons for Decision : 28 September 2007

Envisaging that the Application would not be disposed of immediately should Mr. Wong object to the Application, the Trustee, who seems to have routinely done so, also on the same date of the Application issued a summons for an interim order to prevent Mr. Wong from being automatically discharged from bankruptcy. This resulted in the granting of an interim order by a Master on 1 September 2006 which order was further extended on 6 March 2007. The interim orders had been de facto preventing Mr. Wong from the automatic discharge until the Application was determined on 24 September 2007.

Before I handed down the judgment, Lam J on 14 September 2007 handed down a decision of Fred Lee, trustee of the property of Liu Man Hoo, a bankrupt v Liu Man Hoo, HCB 11719 of 2002, 14 September 2007 (unreported), which decision provides useful guidance (the relevant part of which will be discussed below) on how a trustee in bankruptcy should approach an objection to automatic discharge. That case involves not just the same trustee but also contains similar unsatisfactory pre-bankruptcy conducts as the present case. I consider that I should also have regard to the principles discussed in Re Liu Man Hoo.

In not less than 3 months before the date of Mr. Wong’s automatic discharge from bankruptcy, the Trustee on 3 June 2006 sent the section 30A(5)(a) notices to the proving creditors and informed them that he intended to object to the discharge on the ground of pre-bankruptcy unsatisfactory conduct under section 30A(4)(d).

No objection was raised by any proving creditors to Mr. Wong’s automatic discharge. The Trustee, as had indicated in his notices to the proving creditors, issued the Application, relying on the pre-bankruptcy unsatisfactory conduct ground under section 30A(4)(d).

At the hearing, Miss Ng has largely relied on the recent decision of Deputy High Court Judge To in Fred Lee and Chow Wai Lan, Christine (trustee of the property of Tong Yuk Kin) v Tong Yuk Kin, HCB No. 22870 of 2002, 20 June 2007 (unreported), a decision based on pre-bankruptcy conducts of excessive borrowing as well as misrepresentation as a ground of objection to discharge by the same trustee. In this case, the learned Judge referred to an earlier decision by Kwan J in Fred Lee and Chow Wai Lan, Christine (trustee of the property of Leung Chi Yeung) v Leung Chin Yeung, HCB No. 8779 of 2002 (and two other cases), 9 January 2006 (unreported) and expounded in detail the meaning of unsatisfactory pre-bankruptcy conduct under A30A(4)(d) in the context of the legislative objectives of section 30A.

Miss Ng also alluded to an earlier decision of Re Hui Hing Kwok [1993] 3 HKC 683, a decision expounding on the legislative objective behind section 30A, which lies in rehabilitation in allowing a bankrupt to resume a normal life in society.

To conclude, given the lack of detailed and timely investigations by the Trustee and the unchallenged evidence of Mr. Wong, I am unable to accept that the Trustee has satisfied me that the excessive borrowing and loss of money in speculation being unsatisfactory conduct. I however find that the conducts of gambling and misrepresentation have been - when viewed objectively - unsatisfactory.

Having concluded that some aspects Mr. Wong’s conducts have not been satisfactory, I should carefully consider whether I ought to exercise my discretion to suspend Mr. Wong from discharge of bankruptcy, and should I so find, to decide the appropriate period of suspension.

In considering how my discretion should be exercised, I shall bear in mind the principles elucidated in the cases referred to above, in particularly the very powerful observations of Lam J in Re Liu Man Hoo (op. cit.) at paragraph 66 that the court should take an overall view of the matter in the exercise of discretion and that suspension of automatic discharge should only be applied to conducts of exceptional gravity (See paras. 65 to 68 in Re Liu Man Hoo).

Mr. Wong’s said pre-bankruptcy unsatisfactory conducts should be balanced against the post-bankruptcy conducts as well as other factors such as the manner the Trustee conducts the investigations and all the circumstances of the case. The unsatisfactory conducts that I have found proved, in my view, are not grave. Further, no objections were raised by any proving creditors against Mr. Wong’s discharge from bankruptcy. Mr. Wong has cooperated with the Trustee in the administration of the estate. Further, from the amounts of contributions he had made to the bankruptcy estate, I am satisfied that Mr. Wong had done his best to contribute to the bankrupt estate without abusing the bankruptcy regime as a debt-clearing house. Last but not the least, by virtue of the interim orders, Mr. Wong prior to the disposal of this case, had effectively been prevented from discharge for about 12 months, which must have caused him much distress.

After having considered all the evidence and balanced the interests of Mr. Wong, that of the commercial world as well as the moral values behind section 30A, I consider that it is not fair to exercise my discretion to suspend any period of automatic discharge.

Upon dismissal of the Application, I also lifted the suspension imposed by the two interim orders granted by Masters and ordered that it should take retrospective effect, adopting the reasoning (with which I agree) in Official Receiver v Chan Kwok Keung, HCB 20772 of 2002, Master Au Yeung (as she then was) 5 July 2007 (unreported).

WONG MAN TAT v. CHAN YUEN MAN AND OTHERS DCCJ2853/2005

S’s words:-
It is rare that we can find case authorities that leave to appeal was granted by District Court.

The following case is one of them of which the Judge agreed that part of his findings came from inference and the Court of Appeal is entitled to draw a different inference.

However, it does not imply that every losing party could suggest the Judge form his conclusion by way of inference; otherwise, the Judge would be a rubber stamp in leave to appeal applications..

I believe this case will be an interesting case in the Court of Appeal in the future. In other daily life, we have received too much enquires in relation to water seepage allegations.

--- quote from judgment ---

Date of Handing Down Decision : 27th September 2007

DCCJ 2853/2005 was a claim by the owner of Flat 1802 (“1802”) of Block C, Westlands Gardens, No. 4 Westlands Road, Quarry Bay, Hong Kong (“the Building”) and against the ownersof Flat 1801 (“1801”) of the Building, due to water seepage from the Defendant’s master bathroom into the Plaintiff’s master bathroom.

The Plaintiff applied to this Court for an injunction restraining the Defendants from repeating or continuing the nuisance of water seepage from the shower stall and floor drain of the master bathroom in 1801 to 1802; an order that the Defendants to rectify the same; and damages for: (1) diminution in value of the premises to be assessed; (2) discomfort and inconvenience and disturbance; (3) surveyor fee of HK$20,000.00 and; (4) plumber charges of HK$15,000.00.

The Defendants counterclaimed against the Plaintiff for: (1) discomfort and inconvenience and disturbance to be assessed; (2) surveyor fee of HK$10,000.00; and (3) plumber charges of HK$8,500.00.

After trial, I granted the Plaintiff’s application for injunction, ordered the Defendants to rectify the water seepage, ordered the Defendants to pay the Plaintiff plumber charges of HK$15,000.00 and ordered the Plaintiff’s claim for diminution in value of the premises to be assessed on a day to be fixed. The counterclaim was dismissed with costs of both the claim and counterclaim to the Plaintiff, to be taxed if not agreed.’

The Defendants now seek leave to appeal my decision and a stay of execution pending appeal.

The applicable test is set out in Smith v Cosworth Casting Processes Limited [1997] 1 WLR 1538. Lord Woolf, MR stated the relevant principles as follows:

“ i) The court will only refuse leave if satisfied that applicant has no realistic prospect of succeeding on the appeal. The test is not meant to be any different from that which is sometimes used, which is that the applicant has no arguable case. Why however this court has decided to adopt the former phase is because the use of the word “realistic” makes it clear that a fanciful prospect or an unrealistic argument is not sufficient.
ii) The court can grant the application even if it is not satisfied. There can be many reasons for granting leave even if the court is not satisfied that the appeal has any prospect of success. For example, the issue may be one which the court considers should in the public interest be examined by this court or, to be more specific, this court may take the view that the case raises an issue where the law requires clarifying.”

Part of the grounds of appeal deals with my finding of fact that water seeping from the tiles in the 1801 shower area was the source of water seeping into 1802. This finding was made by a process of inference, drawn when I found the 1801 shower area wall-tiles seeped water under the floor tiles, that it was more likely than not the shower area also seeped water under the wall-tiles onto the partition wall. When there was no evidence of any other source of water seepage, the water seepage under the shower area wall-tiles was more likely than not, the source of water seepage in the 1801 side of the partition wall.

The proper approach, when an appeal is against a Court’s finding of primary facts is set out in Ting Kwok Keung v Tam Dick Yuen & Ors [2002] 3 HKLRD at para. 32 to 46. Bokhary PJ’s judgment in Ting Kwok Keung can be summarized as follows :

(1) Appeals against findings of primary facts are approached very differently from appeals against findings of fact made by a process of inference;
(2) Where findings of facts are made by a process of inference, no question of credibility arises;
(3) An appellate court is universally reluctant to reject a finding of specific fact, particularly where the finding could be found on the credibility or bearing of a witness;
(4) On the other hand, an appellate court is customarily willing to form an independent opinion about the proper inference of fact, subject only to the weight which should be given to the opinion of the court below;
(5) Where the judgment turns on an issue of facts, the Court of Appeal must have regard to the nature of that issue of fact and to the advantage enjoyed by a trial judge who received evidence on such issue first-hand;
(6) The question for the Court of Appeal is whether, even though it does not enjoy the advantages enjoyed by the trial judge who received evidence first-hand, it is nevertheless satisfied that the trial judge’s conclusion on the facts is plainly wrong.

My finding of fact was based on a process of inference and the Court of Appeal is entitled to form its own opinion about the proper inference. Leave should therefore be granted.

RE EDMUND JAMES LAWSON QC HCMP1722/2007

S’s words:-
Overseas Counsels to be approved to act for defendants in criminal cases are rare. The following case is an example. However, it tells us the truth that Hong Kong do not have much specialist criminal leading counsel who are family with the Takeovers Code or company takeovers in general.

--- quote from judgment ---

Date of Judgment : 24 September 2007

The Applicant seeks admission to appear for a defendant (whom I shall refer to simply as “L”) in a trial in the District Court commencing on 7 January 2008. The trial is fixed for 40 days although the Applicant’s solicitors (also the solicitors for L) are of the view that this may well prove to be conservative.

Although I have not been provided with much by way of material, it is reasonably clear that the issues likely to arise in the trial are factually, and perhaps legally also, difficult and complex. Regulatory issues will arise (the Stock Exchange of Hong Kong and the Securities and Futures Commission were said to have been defrauded) in the context, as far as L is concerned, of professional legal advisors. The amount of documentation is said to be voluminous. I am prepared to assume in the Applicant’s favour that the case is one of unusual difficulty and complexity, despite the submissions of Mr Robert Pang (for the Hong Kong Bar Association) that the only issue is really whether L was dishonest. Mr Ronny Tong SC (for the Applicant) points out that there are more legal issues than just dishonesty, such as that of non-economic loss.

The trial will take place in the District Court but this is neither here nor there.

However, one matter regarding the application initially caused me some concern. No evidence was provided over the aspect of the availability or non-availability of local leading counsel. Serious and genuine efforts to instruct local counsel have to be demonstrated or where it is said there are none, an explanation must be provided to the court justifying this : - see Re Flesch QC & Another [1999] 1 HKLRD 506 and Re Kosmin QC & Another [1999] 1 HKLRD 641. All this is to provide a complete picture to assist the court to make an informed decision, giving it some idea as to the size of available and suitable counsel, and the calibre of this pool : see Re McGregor QC [2003] 3 HKLRD 585, at pages 590-591, paragraphs 11(2)-11(3); Re Pannick QC, unreported, HCMP 1414/2006, 21 July 2006 at paragraph 9. The relevance of this is to enable the court to determine whether the counsel who seeks admission would be able to add a significant dimension to the case.

This morning, Mr Tong has informed me that there was a certain embarrassment for the Applicant’s solicitors to state on affidavit why certain Hong Kong leading counsel were unsuitable or unavailable. These reasons include the important fact that there are a very few specialist criminal leading counsel in Hong Kong who have a working and familiar knowledge of the Takeovers Code or company takeovers in general.

I am of the view that the available pool of local counsel for a case such as the present is necessarily small. There have been to date very few, if any, criminal cases in Hong Kong involving legal advisors in Hong Kong in the context of company takeovers. This is a rare type of case even in a jurisdiction such as the United Kingdom. It is not apparent that there are many Hong Kong leading counsel who would have extensive experience of this area of the law, although a few no doubt would be more than competent. The Applicant is an experienced practitioner in this field and he will no doubt add a significant dimension to the case.

In these circumstances, in my judgment, the Applicant should be approved, admitted and enrolled to practise as a barrister of the High Court of Hong Kong for the purpose of conducting DCCC 980/2006 in the District Court for and on behalf of L rendering advices in conferences in Hong Kong and appearing at the trial of L.

TANG KA HUNG ROBERT & TANG MEI SZE v. TANG TIM CHUE alias TANG TIM CHU HCAP 7/2006

S’s words:-
The following case only concerns about the issue of costs for an aided person, whether he should be personally responsible to pay for such costs with legal aid certificate be granted in his favour.

It is the existing practice that unless the Court otherwise directs, a plaintiff cannot recover his costs from either the Director of Legal Aid or a defendant the costs so long as the defendant is legally aided.

The governing provisions are Sections 16(C) and 17(3) of the Legal Aid Ordinance and those two sections have been referred to in the judgment.

If the Defendant in this case insisted to defend the application of the Plaintiffs for striking out despite legal advice of his legal representatives, it may be an appropriate case for the Court to make an order as requested.

Such applications should not be used as oppressions to the aided persons.

However, a defendant should be properly advised of the risk whether he would be personally responsible to pay for the costs, whether his own costs of the costs of the other side.

--- quote from judgment ---

Date of written Reasons for Decision: 27 September 2007

The plaintiffs are the executors named in the last will dated 27 September 1991 made by their late father, Mr Tang Sum On. Mr Tang died on 7 November 2005 in Hong Kong.

The defendant is the son of Mr Tang and the half brother of the plaintiffs. On 18 November 2005 and 26 January 2006, the defendant entered a Caveat and an Appearance to Warning in HCCA002730/2005 to oppose to the will to be admitted to probate.

In March 2006, the plaintiffs commenced this probate action to have the Caveat withdrawn and for probate to be granted to them.

The defendant was privately represented until legal aid was granted to him. The Legal Aid Certificate was issued on 29 August 2006 and counsel was later assigned by the Director of Legal Aid.

By summons filed on 28 February 2007, the plaintiffs apply to strike out the Defence and Counterclaim on the basis that none of the matters raised in it affects the validity of the will or the plaintiffs’ entitlement to probate and also on the basis that they are devoid of merits.

Shortly before the hearing, the defendant’s solicitors indicated to the plaintiffs’ solicitors and the court that the striking out application would not be opposed. The arguments at the hearing were directed at the question of costs. Apart from asking that the costs of the caveat proceedings and this probate action be paid by the defendant, the plaintiffs further applied for an order under section 17(3) of the Legal Aid Ordinance, cap.91 (“LAO”) that the costs incurred by the plaintiffs after the grant of Legal Aid Certificate be paid by the defendant personally. The application was opposed by the defendant. After hearing arguments, I refused to make an order under section 17(3) of LAO and gave oral reasons for the decision.

On the question of entitlement to costs, there is no reason to depart from the normal rule of costs follow event so that the costs of the caveat proceedings and this probate action should be to the plaintiff against the defendant to be taxed if not agreed.

The plaintiff’s application for an order under section 17(3) of the LAO will impact on the defendant's personal liability for costs incurred after the Legal Aid Certificate was issued. This is because in the normal course, the plaintiffs' ability to recover costs or to enforce the costs order that I had made will be subject to section 16C of the LAO.

The effects of section 16(C) insofar as they are relevant to this action are that: (1) The defendant will be personally liable for the plaintiff’s costs in the Caveat proceedings and this probate action incurred prior to the grant of the Legal Aid Certificate: section 16C(2); and (2) The Director of Legal Aid will be responsible for the plaintiff’s costs occasioned by the Counterclaim: section 16C(1)(b)(ia). It follows that under section 16C, the plaintiffs cannot recover from either the Director or the defendant the costs of their claim in this probate action incurred after the issue of the Legal Aid Certificate.

Section 17(3) provides:
“Where it appears to a court or judge that an aided person has acted improperly in bringing or defending any legal proceedings or in the conduct of them, the court or judge may order the aided person to pay the costs of the Director and of the counsel or solicitor who acted for him or the costs of the other party, or the costs of the Director and such counsel and solicitor and such party.”

Section 17(3) of LAO is an exception to the general position governing an aided person's personal liability to costs, which is provided under section 16C. I do not believe that the spirit of section 17(3) is to expose an aided person to costs liability as a result of inapt advice given by his legal representatives. In this regard, I note in particular that section 17(3) not only deals with liability for costs of the aided person’s opponent, but also extends to liability for costs of the Director as well as costs of the aided person's own counsel and solicitors.

In the circumstances of this case, given what Mr Tang has informed the court, I do not feel that the discretion of the court should be exercised in making an order under section 17(3). Accordingly, I will not order the defendant to pay the plaintiff’s costs of the claim incurred after the issue of the Legal Aid Certificate.