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.

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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