Date of delivery of judgment: 15 April 1993
J U D G M E N T
1. This is a claim for backcharge, calculated in respect to consumed electricity but unrecorded in two meters of the plaintiff. These two meters were installed for the use of the ground floor of Song Ling Industrial Building standing on 40 - 42 Chuen Ping Street, Kwai Chung, New Territories.
2. Prior to November 1976, the registered owner of the ground floor of Song Ling Industrial Building was Asia International Electronic (HK) Pte. Limited. On 19th November 1976, these ground floor premises were assigned to be the defendant. In September 1980, the ground floor premises were agreed to be sold by the defendant to the 1st Third Party, Mr Leung Tak Chung. In a little more than a month later, in October, the 2nd Third Party, Mr Chen Tai Un acquired the property from the 1st Third Party Mr Leung, but the sale was put through with the defendant as vendor and Mr Leung as confirmor by an assignment in December.
3. Between 1980 to 1986, the occupant of the ground floor premises was the 3rd Third Party, Dah Pang Printing Inc. Manufactory Limited. This company was in the control of Mr Chen Tai Un. The ground floor premises were transferred to this company by Mr Chen in 1986. I shall call the plaintiff "CLP", the defendant " See Kong", the 1st Third Party "Mr Leung Tak Chung", the 2nd Third Party "Mr Chen" and the 3rd Third Party "Dah Pang". I shall refer to the ground floor of Song Ling Industrial Building as "the ground floor premises".
4. For the service of these ground floor premises, CLP electricity meters had been installed, one at a time, since 1976. The first CLP meter (No.1004846) was installed on 6th October 1976 in the name of Asia International Electronic (HK) Pte. Limited. This first CLP meter was changed to the name of See Kong on 1st December 1976. On 5th May 1980, the three seals and the terminal box seal of the first CLP meter were found missing. The first CLP meter was thereupon replaced by another meter (No.1008324), the second CLP meter.
5. Shortly after the arrest of Mr Leung Tak Chung and his wife, the same seals of the second CLP meter were found damaged on 8th August 1986. It was replaced by yet another electricity meter (No.1015719), the third CLP meter. After the transfer of the ground floor premises by Mr Chen to Dah Pang in 86, a new electricity meter was installed for Dah Pang as from 1st December 1986.
6. As a matter of course, all these CLP meters were duly calibrated for use and examined on disconnection. It is a proper inference that in this case they were functioning well and within permissible limits at all times.
7. Mr Leung Tak Chung and his wife were eventually charged in the District Court with having conspired with others to defraud CLP by tampering with the first CLP meter and the second CLP meter during the period between 1st January 1981 to 28th July 1986. Mr Leung Tak Chung was alone convicted by the District Judge which found such tampering to have commenced from the middle of 1983. The case involved the use of unauthorised submeters and tampering of the meter dial. On the evidence, it is quite obvious that these unauthorised submeters were not easily noticeable.
8. As far back as 1976, Mr Leung Tak Chung was known to be the manager of Song Ling Industrial Building. On 23rd September 1980, Mr Leung Tak Chung acquired from See Kong the interest in the ground floor premises. He agreed to sell his interest to Mr Chen the following month. In December 1980, See Kong assigned the ground floor premises to Mr Chen with Mr Leung Tak Chung as confirmor.
9. In May 1974, Mr Leung Tak Chung, through his company, Kin Hing Godown Limited, obtained a lease of the 10th floor of Song Ling Industrial Building.
10. In December 1976, Mr Leung's Kin Hing Godown Limited purchased the 8th floor. The 8th floor was let out to a tenant for three years between 1976 to 1979.
11. In April 1978, Mr Leung's Kin Hing Godown Limited took a lease of the 9th floor, 11th floor and the roof of Song Ling Industrial Building.
12. As stated above, on 19th November 1976, See Kong became registered owner of the ground floor by an assignment of even date, and the first CLP meter was changed to the name of See Kong on 1st December 1976. See Kong had earlier applied for the change. Its application was made on 24th November 1976 with effect backdated to 25th October 1976. The first CLP meter had just been installed in the name of the previous owner. That was on 6th October 1976.
13. On 1st April 1974, Mr Leung's company, Kin Hing Godown Limited, had a meter installed in the name of the company for the 10th floor, but the 10th floor was formally let to Kin Hing Godown Limited only on 15th May 1974.
14. In the said conspiracy case in the District Court, particulars of other premises rented to Mr Leung Tak Chung were given as follows :-
(1) The 6th floor in 1972;
(2) The 5th floor in 1977;
(3) The 1st floor, 2nd floor, 3rd floor in 1980.
None of these floors was featured in these proceedings, but they reflect Mr Leung's sustained interest in Song Ling Industrial Building.
15. The commencement of unlawful tapping of electricity was found by the District Judge to run from the middle of 1983. Evidently, the finding was made on the basis of a different time frame in the charge, between 1st January 1981 to 28th July 1986. Evidence adduced in this case covers a more extended period, and there is no suggestion of any estopped by record. In fact, none has been pleaded.
16. There are four broad issues between CLP and See Kong. This Court is also called upon to determine the commencement date of such unlawful tampering of the first and the second CLP meters. The four broad issues are : first, whether the Supply Rules had been incorporated in the contractual relationship between CLP and See Kong; secondly whether, after the coming into force of the 1985 Supply Rules on 1st January 1985, the previous 1972 and 1978 Supply Rules would continue to have any application. Thirdly, with the writ in this case issued on 22nd September 1989, whether CLP's claim in respect of under-recorded electricity consumed prior to 22nd September 1983 is time- barred. And fourthly, what the estimated amount of under-recorded electricity so taken was.
17. Unlawful abstraction of electricity was virtually conceded on all sides. Mr Leung Tak Chung was convicted. As for its commencement, CLP put it as at 23rd December 1986. Mr Leung Tak Chung was deeply involved with Song Ling Industrial Building for many years. He had no proprietary interest in the ground floor premises until 23rd September 1980. Since 1976, he had been known to be managing the building. I could not imagine that access to the CLP's first and second meters inside the premises of the ground floor was ever denied to him in that capacity. In managing Song Ling Industrial Building, Mr Leung Tak Chung's responsibility included the lighting in its common areas. Needless to say that he had demonstrated his audacity and greed. He could hardly be expected to respect private ownership. After matters came to light, at a meeting with Mr Lau Wai Sing of the Bank of Canton in 1986, he confided in Mr Lau that he had been unlawfully tapping electricity supply for more than 10 years since 1976 or 1977. He owned up to theft of electricity in the region of $2,000 per month in the beginning to about $20,000 per month in 1986. It was the allegation of the Crown in the criminal prosecution, so noted the District Judge, that theft of electricity throughout the years amounted to about $5,000,000. Mr Leung Tak Chung had other property interests. The evidence led in this case fell far short of the Crown's alleged quantum. The Crown's allegation and the confession to Mr Lau of the Bank of Canton were not made with reference to exclusively the Song Ling Industrial Building or the first and the second CLP meters.
18. Mr Lee Tai Chi, the electrician engaged by Mr Leung Tak Chung to connect unauthorised submeters in the building confirmed that some other submeters were already in place and that the floors he visited were divided into 8 to 12 factory units. The ground floor premises had had the use of the first CLP meter since 6th October 1976. The first and the second CLP meters were found to have been physically tampered with in 1980 and 1986 respectively. The extent of tampering was more fully exposed during investigation. Tracing the monthly consumption of See Kong from its meter's effective date i.e.
25th October 1976 from which See Kong was prepared to be held responsible, the consumed units recorded on the meter dial were : as at 25th October 1976 - 740 units; as at 25th November 1976 - 220 units; as at 23rd December 1976 - 150 units; and as at 24th January 1977 - 40 units. The very substantial drop of 590 (740 - 150) units from 25th October 1976 to 23rd December 1976 and the lower than average domestic rate consumption until 1980 were, in the light of the then prevailing circumstances...