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1997, No. 228
(Civil)
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
| BETWEEN |
Godfrey Christopher Rooke &
Melody Ann Rooke |
Appellants/
Judgment Creditors |
| AND |
| HV Construction Services Limited |
Respondent/
Judgment Debtor |
| and |
| Messrs. M.K. Lam & Co. (a firm) |
Garnishee |
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Coram : Hon. Mortimer, V.-P., Godfrey and Rogers, JJ.A. in court
Date of hearing : 3 March 1998
Date of judgment : 3 March 1998
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J U D G M E N T
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Rogers, J.A. :
1. This is an appeal from a judgment of Stock, J. handed down on 6th November 1997.
2. The situation briefly is that the Defendant company took investments from investors in Hong Kong for the purpose of investing in houses to be built in the United Kingdom. As has often happened before with construction companies, it appears that its finances are not entirely in order and the company is probably insolvent. There were a large number of investors in Hong Kong, approximately 60 or so, two of these were the Plaintiffs. The Plaintiffs had placed deposits totalling some £120,000 with the company and for some time they had been seeking a return of that money. Part of it had been repaid but the bulk had not. They reached the stage where their solicitors had written letters and proceedings had been commenced against the company. Then a series of meetings took place. These are all set out very fully in the judgment of the Judge below. The Plaintiffs having commenced their action proceeded to judgment and obtained a garnishee order which the Master made absolute. That was the subject of the appeal before the Judge below.
3. The situation was outlined by Stock, J. at p. 14 of his judgment where he said :-
"There is, in this case, in existence no winding-up petition, nor any resolution for the presentation of the petition, nor any resolution for the voluntary winding-up of the company, nor is there in existence an approved company voluntary arrangement. ..... Then there is an affidavit from a solicitor, Mr. Brown, who is one of the company's creditors who annexes to the affidavit a copy of a scheme of arrangement which he says the company is prepared to propose to the creditors (if so required by the court). That is a proposal, the implementation of which, let alone its acceptance by the creditors, cannot be assured."
4. There was dispute about what had been agreed at one of the meetings of the creditors of the company which was held on 28th April. The Judge held that at any rate the Plaintiffs had agreed not to present a winding-up petition against the company but it seems accepted that the Plaintiffs had not given an undertaking not to pursue their claim against the company.
5. There was a further meeting on 14th May 1997 which was not attended by the Plaintiffs but was attended by a large number of other creditors. At that meeting, Mr. Hayworth, who was the Managing Director of the company revealed that one of his former co-directors had tried to remove money from the company's accounts. As a result, he had placed the balances which the company had in the care of their solicitors for safe keeping. This information was conveyed to the Plaintiffs and the Plaintiffs used that information by launching the garnishee proceedings against the funds in the hands of the solicitors.
6. The Judge first reached the conclusion that there was nothing in law which prevented the garnishee proceedings from being made absolute. Against that finding, there is no appeal.
7. The Judge then dealt with the question of whether the information as to the existence of the funds in the solicitors' hands was confidential information. The Judge came to the conclusion as a matter of fact that this was not confidential information and there was no breach of any confidentiality by the Plaintiffs in making use of the information which had come to their knowledge.
8. The Judge then turned finally to a matter which he dealt with under the heading which he termed "The Equitable Approach". He said :
"But that is not, so it seems to me, the end of the case. The heart of the issue which I must tackle is whether it would be inequitable for...
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