The Regulation of Debt Collection Practices

8/14/2019 The Regulation of Debt Collection Practices

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THELAWREFORMCOMMISSIONOFHONGKONG

REPORT

THEREGULATIONOFDEBTCOLLECTIONPRACTICES

This report can be found on the Internet at:

July 2002


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The Law Reform Commission was established by the Executive Councilin January 1!"# The Commission considers such reforms of the laws

of $on% &on% as may be referred to it by the 'ecretary for Justice or theChief Justice#

The members of the Commission at present are:

The Hon Ms Elsie Leung Oi Sie, !M, "#,Se$ret%r& for "usti$e '(h%irm%n)

The Hon Mr "usti$e *n+rew Li, (hief "usti$eMr Ton& en, S!S, "#, L%w -r%ftsm%n

-r "ohn !%$onShoneHon Mr "usti$e !okh%r&, #"Mr *nthon& (howMr i$tor (hu L%plik#rofessor 0 1%n, "#Ms !ett& HoMr *l%n Hoo, S(Mr 0wong (hi 0in-r L%wren$e L%i, "#Hon Mrs Sophie Leung, S!S, "#

Mr -%vi+ Smith

The 'ecretary of the Commission is Mr Stuart M I Sto!rand its officesare at:

23/1 H%r$ourt House45 lou$ester 6o%+7%n$h%iHong 0ong

Telephone: 2829 3;21%: 29=8 2532 Em%il: hklr$hkreform.g$n.gov.hk7e?site: http://www.info.gov.hk/hkreform


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THELAWREFORMCOMMISSIONOFHONGKONG

R!"ort

T#! r!$ulat%o& o' (!)t *oll!*t%o& "ra*t%*!+

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CONTENTS

Pa$!

Pr!'a*! 1

Terms of reference 1The 'ub(committee 1

-. D!)t *oll!*t%o& %& Ho&$ Ko&$ )

Introduction )Statistics on personal credit delinquency )Statistics compiled by the Police *Statistics compiled by the Hong Kong Monetary Authority +Statistics compiled by the Privacy Commissioner for Personal Data !

Industry overview

2. So/! '!atur!+ o' !tra1u(%*%al (!)t *oll!*t%o& 1,

'ta%es of debt collection 1,-ifferent types of debt collection activities 1,.on(/udicial debt collection 10hat causes abusive debt collection2 1*

The nature of the debt collection process 1*The lac of professionalism among some debt collectors 13!oose"lending 1+#conomic do$nturn 1+The %udicial process in debt recovery 1+&ther factors 1!

3. E%+t%&$ *r%/%&al +a&*t%o&+ a$a%&+t a)u+%4! 1(!)t *oll!*t%o&

Criminal law sanctions 1'ntimidation 1Criminal damage to property ,1

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5ersonal -ata 65rivacy7 8rdinance 6Cap )!37 and the 3, Code of 5ractice on Consumer Credit -ata ; ,"",

8. Co/"arat%4! La9 3)

Introduction 3)


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'outh 9frica +

;. Co&+u/!r *r!(%t (ata 1""

Introduction 1""

5ersonal -ata 65rivacy7 8rdinance 1""Code of Practice on Consumer Credit Data 1""

'harin% of positive credit data in other /urisdictions 1"1;S (air Credit .eporting Act 1",;S #qual Credit &pportunity Act 1")Australian Common$ealth Privacy Act 1");nited Kingdom Data Protection Act 5--+ 1"*Situation in Hong Kong 1"3

-0. Pro"o+al+ 'or r!'or/ 1"!

The criminal offence of unlawful harassment of debtors and others 1"!.esponses 1" 1,*Should companies $ithin the same group be e=empted> 1,*&ther e=empted categories suggested 1,31amed organisations 1,3

Collecting debts as a business or other$ise 1,!Criteria for licensin% 1,!

.esponses 1,.esidence status requirement 1,&ther requirements 10"Appeal mechanism 10"

'tatutory powers and duties 10,

.esponses 10,

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Code of practice 10).esponses 10)


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Pr!'a*!

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T!r/+ o' r!'!r!&*!

1# 8n 0" July 1!> the Chief Justice and the 'ecretary for Justicereferred the followin% matter to the Law Reform Commission:

@To consider the adequacy of the e=isting la$ governing the $ayin $hich creditors/ debt collection agencies and debt collectorscollect debts in Hong Kong $ithout recourse to the courtsystem/ and to recommend such changes in the la$ as may be

thought appropriateB

,# The Law Reform Commission has been %reatly assisted by thefindin%s of the 'ub(committee and wish to record here our appreciation of thehard wor? devoted to this reference by members of the 'ub(committee#

T#! Su)1*o//%tt!!

0# The 'ub(committee on Re%ulation of -ebt Collection 5racticeswas appointed in .ovember 1! to consider and advise on the present state

of the law and to ma?e proposals for reform# The sub(committee membersare:

T#! Ho& Mr Ju+t%*! Sa#ra&% )Chairman since September *777,

Jud%e of the $i%h Court

Mr Ro)!rt G Kot!9all> SBS>SC

)ice"Chairman,

'enior Counsel

Mr C#arl!+ D Boot# 9ssociate 5rofessor-epartment of 5rofessional Le%al Education


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Mr Ju&%u+ K ? Ho Council =emberThe Law 'ociety of $on% &on%

M+ R%ta S C Ho 9ssistant 5rincipal 'olicitor

Companies Re%istry

Mr Ro)%& M*L!%+# Barrister> Temple Chambersformerly -eputy 5rivacy Commissioner for

5ersonal -ata

Mr+ R%ta L ? To&$ =ana%er> Customer 9ssistance'tandard Chartered Ban?

Mr T+a&$ Wa%1#u&$ )member since &ctober *775,

Chief 'uperintendent 68r%anied Crime @Triad Bureau7

$on% &on% 5olice Aorce

M%++ El%@a K C ?au )member since August 5---,

5rincipal 9ssistant 'ecretary'ecurity Bureau

M+ Cat#y Wa& )Secretary,

'enior overnment CounselLaw Reform Commission

)# Aormer members who contributed to the wor? of the 'ub(committee are:

Ho& Mr Ju+t%*! L%tto&> GBM )Chairman until September *777,

.on(permanent Jud%e of theCourt of Ainal 9ppeal

Mr P#%l%" K ? C#a& )member until August 5---,

6then7 5rincipal 9ssistant 'ecretary'ecurity Bureau

Mr T#o/a+ C#a& Wa%1% )member until &ctober *775,

Chief 'uperintendent$on% &on% 5olice Aorce

M%++ Mar$ar!t Mary ? F L!o&$

)member from March *777 until &ctober *775,

'enior =ana%er

$on% &on% =onetary 9uthority

*# The reference has been considered by the 'ub(committee andthe Law Reform Commission over the course of 1! formal meetin%s# 4iewshave also been exchan%ed by circulation of correspondence and informalmeetin%s#

3# 8n ,! July ,"""> in order to see? views and comments from thecommunity> the 'ub(committee issued a Consultation 5aper settin% out itsinitial proposals on the reference# 8ver 3" written responses were received>many of these were substantive with practical comments on the issuesaddressed in the Consultation 5aper# hile some reservations were

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expressed about certain of the initial proposals for reform> the proposals were%enerally welcomed# The consultation exercise elicited responses from awide ran%e of individuals and or%anisations> the list of which is at 9nnex 1#

+# e wish to express our than?s to all those who responded to

the Consultation 5aper# e would li?e to than? the and the the -ata5rotection Commissioner7 for providin% assistance and informationD and the9ustralian Competition and Consumer Commission for their assistance and?ind permission to annex part of their %uidelines to this Report# e than?Credit Information 'ervices Ltd> the $on% &on% =onetary 9uthority> the $on%&on% 5olice Aorce> and the 5rivacy Commissioner for 5ersonal -ata forprovidin% statistical data contained in this Report#

0


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C#a"t!r -

D!)t *oll!*t%o& %& Ho&$ Ko&$

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I&tro(u*t%o&

1#1 It is a fundamental precept in our society that individuals shouldhonour their debt obli%ations# et> it is eFually important that debtors andmembers of the public %enerally should be protected by law from debtcollection methods that overstep the bounds of acceptable pressure#

St%tisti$s on person%l $re+it +elin@uen$&

1#, 9ccordin% to data published by Credit Information 'ervices Ltd6GCI'H7>1the total number of records of personal credit delinFuency reported toit rose from a total of *!>+, durin% the second half of ,""" to 3>,"! durin%the first half of ,""1> representin% an increase of nearly 1+#+# The fi%urefurther rose to 1"*>!1* durin% the second half of ,""1> representin% anincrease of *0# -etails are %iven in the followin% chart:

29,73426,946

45,494

132,947

73,597

58,145 58,792

69,208

105,815

0

20000

40000

60000

80000

100000

120000

140000

2nd half 1997 1st half 1998 2nd half 1998 1st half 1999 2nd half 1999 1st half 2000 2nd half 2000 1st half 2001 2nd half 2001

No. of

delinquent

records

Year

1#0 'tatistics compiled by CI' also showed that the total number ofusers of consumer credit reported as failin% to meet their debt repaymentobli%ations rose from 10>"11 durin% the second half of ,""" to 1+>1) durin%

1 Credit Information 'ervices Ltd is $on% &on%s main consumer credit bureau and its

business is to maintain credit information database and to provide consolidated credit reportson individuals to its members for credit evaluation# Its members are mainly comprised of ban?sand ma/or financial institutions#

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the first half of ,""1> representin% a %rowth rate of nearly 01#!# The fi%urefor the second half of ,""1 rose further to 0>11*> representin% an increase of1,!# The table below shows the details:

.o# of loanscarried bysin%leconsumer @bein%reporteddelinFuent

.o# of Consumers Bein% Reported -elinFuent

,$ 1+ 1$ 1! ,$ 1! 1$ 1 ,$ 1 1$ ,""" ,$ ,""" 1$ ,""1 ,$ ,""1

Individual Individual Individual Individual Individual Individual Individual Individual Individual

1 1*>*", 1">)*1 1)>1!" 1!>)"" +>) )>*+ )>*! +>" 1)>*11

, )>!++ ,>)11 )>*,1 +>*) 0>"*, ,>1++ 1>*+ ,>310 *>!,

0 !*3 1>,," ,>0"3 )>3 1>3)+ 1>)"* 1>)," 1>*)+ 0>!"

) ,*+ 3*) 1>1++ 0>"0 1>01+ 1>"1" !+) 1>1") ,>33

* 011 +,1 ,>"! +* +3* 3! !!1 1>!"

3 )3 1+* )"+ 1>)+" 3+" 31) *, 33) 1>3"

+ 11 1,* ,*" 1>"+1 3", *1+ )!3 )3 1>0!3

! 11 +" ,"" +)0 )+1 0+" 0!* )+3 1>111

or above ) 1*3 )+1 0>""! ,>000 1>!+" ,>"1" ,>,3 *>*"

Total no# ofconsumersbein%reporteddelinFuentdurin% theperiod

,1>330 1*>*+0 ,)>,00 ),>)+0 1!>*33 10>3!* 10>"11 1+>1) 0>11*

Total no# ofdelinFuentrecords bein%reporteddurin% theperiod

,>+0) ,3>)3 )*>)) 10,>)+ +0>*+ *!>1)* *!>+, 3>,"! 1"*>!1*

9vera%e no#of delinFuentrecords perconsumer

1#0+ 1#+0 1#!! 0#10 0#3 )#,* )#*, )#") ,#+1

St%tisti$s $ompile+ ?& the #oli$e

1#) 'tatistics compiled by the $on% &on% 5olice on reports itreceives from the public relatin% to debt collectin% activities show an increasein non(criminal reports and a decrease in criminal reports# 9s can be seenfrom the chart below>,the number of crime reports has continued to decline

since 1> from 0>)," cases in 1 to ,>)! in ,"""> and to 1>* cases in,""1# 8n the other hand> non(crime reports have been on the increase>0

su%%estin% that the problem of harassment type collection tactics isworsenin%#

, Compiled by the 8r%anied Crime @ Triad Bureau of the $on% &on% 5olice in 8ctober

,""1#0 -ebt collectin% related reports> includin% non(crime reports> have shown a substantial

increase as a result of Knew data capture procedures implemented since -ecember 1!#

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1#* In ,""1> criminal dama%e accounted for a ma/ority 61>)+reports> +3#)7 of the 1>* crime reports received# These crimes wereusually in the form of splashin% paint and /ammin% of door loc?s with %lue atthe victims addresses# Criminal intimidation blac?mail 6,31 reports> 10#07came second and were usually committed by way of verbal abuses throu%hthe use of telephones# The remainin% ,"1 reports 61"#07 involved assault>arson> false imprisonment> robbery theft or other crimes# 9 brea?down of the

crimes committed is shown in the table below:

Cr%/!+ Co//%tt!( 200- No. o' R!"ort+ P!r*!&ta$!

Cr%/%&al Da/a$! 1>)+ +3#)Cr%/%&al I&t%/%(at%o& Bla*/a%l ,31 10#0A++ault O**a+%o&%&$ A*tual Bo(%lyHar/ Wou&(%&$

" )#3

Ar+o& )1 ,#1Ot#!r+ 0* 1#!Fal+! I/"r%+o&/!&t ,0 1#,

Ro))!ry T#!'t 1, "#3Total 1>* 1""#"

1#3 9mon% the 10>0*0 non(crime reports recorded in ,""1> 0,#3 ofthe cases involved un?nown creditors: either because the debtor could not belocated or was uncooperative> or because several loans were owed todifferent creditors# The remainin% non(crime reports were mostly lin?ed toloans made by finance companies> individuals> commercial companies> creditcard companies> ban?s and =acau loanshar?s# -etails can be found in thetable below:

3

4471,672

0 0

9,535

11,251

15,312

3,4202,498 1,959

8,753

6,115

13,353

1,672447

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

No.ofRepo

rt

Crime Reports 447 1,672 3,420 2,498 1,959

Non-Crime Reports 0 0 6,115 8,753 13,353

otal 447 1,672 9,535 11,251 15,312

1997 1998 1999 2000 2001


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No&1*r%/! R!"ort+ 200-

Cr!(%tor+ No. o' R!"ort+ P!r*!&ta$!

U&&o9& Cr!(%tor+ )>0*) 0,#3

F%&a&*! Co/"a&%!+ ,>31, 1#3

I&(%4%(ual+ 1>00 1"#)Co//!r*%al Co/"a&%!+ 1>0!" 1"#0

Cr!(%t Car( Co/"a&%!+ 1>0"" #+

Ba&+ 01 +#"

Ma*au Loa&+#ar+ 1 +#)

T!l!*o//u&%*at%o& Co/"a&%!+ ,3) ,#"

HK Loa&+#ar+ +* "#3

Cro++ Bor(!r Tra(! *0 "#)

Total 10>0*0 1""#"

1#+ The harassment tactics commonly employed a%ainst debtors>and innocent third parties such as friends> loan referees> family members orbusiness partners are shown in the table below:

Hara++/!&t Ta*t%*+ 200- No. o' R!"ort+ P!r*!&ta$!

T!l!"#o&! Nu%+a&*! /a%&$ &u/!rou+(u&&%&$ t!l!"#o&! *all+> +o/!t%/!+

(ur%&$ t#! !arly #our+ %& t#! /or&%&$

)>+0 0*#

%+%t /a%&$ r!"!at!( 4%+%t+ to t#!(!)tor=+ 4%*t%/=+ #o/! or o''%*!

)>1!! 01#)

Ot#!r+ +!&(%&$ &u/!rou+ (u&&%&$l!tt!r+> "o+t%&$ o' (!)t *oll!*t%o&&ot%*!+ out+%(! t#! (!)tor=+ a((r!++ to*au+! !/)arra++/!&t

)>0,3 0,#)

M%&or A++ault )3 "#0

Total 10>0*0 1""#"

St%tisti$s $ompile+ ?& the Hong 0ong Monet%r& *uthorit&

1#! The $on% &on% =onetary 9uthority has compiled statistics onabuses in connection with debt collection reported to its debt(collectionhotline> which was set up in 9pril 13 to provide advice to complainants# Thechart below shows the total number of complaints received in each year> andthe number in respect of the different types of complaints# Except for the year1 durin% which there was a mar?ed decrease in the number of complaints>the number of complaints each year rose from over ,"" in 13 and 1+ toover )"" in ,""1# The number of nuisance and intimidation complaints haverisen while that of violence complaints have remained %enerally stable#

+


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Nu%+a&*!5 I&t%/%(at%o&6 %ol!&*!7 Po+t%&$ Not%*!8 Total

13! ,"" +" 1" , 2:2

1+ 1+ 01 ! " 2-:

1! ,)* )3 1" " 30-

1 1,+ 0* ! " -80,""" ,*, 33 ,1 " 33;

,""1 ,3 1,3 " 53-

1>, 0+) 33 , ->85-

1# 9 brea?down of the complaints accordin% to the status of thecomplainants is shown in the chart below# In 13> the ma/ority of complaintswere made by third(parties> includin% family members> friends and un(relatedparties# In ,""1> however> the ma/ority of complaints were made by debtors#This is due to an almost three times increase in debtors complaints since

13# The number of complaints made by referees have decreased#

D!)tor+Fa/%ly /!/)!r+ or'r%!&(+ o' (!)tor+

No&1r!lat!("art%!+ R!'!r!!+ Total

131" * 1)+ 1! ,, 2:2

1+ 1") ! 1, ) 2-:

1! 1+0 1"* 1 ) 30-

1 1"! *+ ) 1 -80

,""" ,01 !0 ,0 , 33;

,""1 ,+, 11 0+ 0 53-!0 3" 110 03 ->85-

St%tisti$s $ompile+ ?& the #riv%$& (ommissioner for #erson%l-%t%

1#1" The 5rivacy Commissioner for 5ersonal -ata 6Gthe 5rivacyCommissionerH7 also receives complaints concernin% debt collection activities#In the period from ," -ecember 13 to 01 -ecember ,""1> the 5rivacy

Commissioner received a total of ,>+!0 complaints of suspected breaches ofthe 5ersonal -ata 65rivacy7 8rdinance 6Cap )!37# 8f these> 0,* complaints

) .uisance ; such as phone calls usin% foul lan%ua%e> persistent phone calls>anonymous phone calls> phone calls at unreasonable hours> freFuent visits> pesterin% thedebtors referees> family members> friends> employer> or collea%ues for information about thedebtors whereabouts> puttin% up posterswritin% on the walls 6i#e# spray paint7 in the vicinity ofthe debtors residence#

* Intimidation ; such as ma?in% abusive or threatenin% remar?s to the debtorthecomplainant 6e#%# threat to set fire> threaten the complainants personal safety> etc7#

3 4iolence ; such as /ammin% the door loc?> ?ic?in% the door or %ate with %reat force#+ 5ostin% notice to publicise the debtors indebtedness in the vicinity of the debtors

residence or wor?place#!

Coverin% 9pril ; -ecember only since the hotline was established in 9pril 3# .on(related parties include ex(tenant> ex(resident> debtors employer or collea%ue#1" 'ee foot(note ! above

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involved practices of debt collection activities# The followin% table %ives ayearly brea?down of the fi%ures#

D!)t *oll!*t%o&

Co/"la%&t+

Total

Co/"la%&t+ P!r*!&ta$! 13(1+ ," ,0+ !

1! )) 0, 11

1 *, *)1 1"

,""" 1"0 3, 1*

,""1 1"3 ,1 1,

Total 326 2>8:3

1#11 =alpractices alle%ed by complainants included the followin%:

'endin% of unsealed correspondence concernin% debts# 5ostin% up of demand letters in public places# 5ostin% up of copies of the debtors identity card in public

places# =ailin% or faxin% of demand notices to the debtors employer or

nei%hbours# -emandin% repayment of a debt from person who is neither the

debtor nor a %uarantor# 9busive and threatenin% messa%es#

1#1, The 5rivacy Commissioner observed that complaints about debtcollection activities en%a%ed by mobile service operators have increased> andthe ma/ority of these complaints concerns the transfer of disputed overduepayments to appointed debt collectors#

1#10 It is worth mentionin%> however> that of the 0,* complaints> only*! cases were found to have sufficient evidence to establish a breach underthe 8rdinance# 'o far> the 5rivacy Commissioner for 5ersonal -ata haveissued ,) warnin% letters and one enforcement notice in relation to cases thatwere found in contravention of the 8rdinance#

I&(u+try o4!r4%!9

1#1) The debt collection industry in $on% &on% comprises a widespectrum of mar?et operators> includin% international and local a%encies#There are also poorly mana%ed and unscrupulous a%encies some of whichemploy people who have> or claim to have> triad bac?%rounds#11 There are noofficial statistics on the number of debt collection a%encies operatin% in $on%&on%# 9ccordin% to one collection a%ency> there are now approximately 1""to 1*" collection a%encies> with five to ten ma/or players# 9nother sourcebelieved that there are about 0" active collection a%encies of which not more

11 9ccordin% to 5olice fi%ures )1 Kimproper debt collection a%encies were identified in,""1#


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than six are %enerally considered well(mana%ed and sieable with over *"members of staff#

1#1* The top end of the debt collection industry is run in aprofessional and ethical manner# These a%encies usually have many years of

experience and have %oodwill to protect# 'trict policies are developed inmatters of recruitment> trainin%> supervision> and the handlin% of complaints#'trin%ent and detailed codes of practice for collection are also laid down forthe collection staff> coverin% different aspects of debt collection includin% themanner in which telephone calls and personal visits should be conducted> thecontents and si%nin% authority of demand letters> the way in which paymentsmade by debtors should be handled> and the obtainin% and security ofpersonal data#

1#13 The success rate of these well(mana%ed debt collectiona%encies is %enerally not very hi%h# 8ne established debt collection a%ency

stated that its successful collection rate is about ," and 1" fortelecommunications assi%nments and ban?finance assi%nments respectively#

1#1+ The debt collection business has under%one rapid %rowth andchan%es in recent years# This is lin?ed to the fact that in $on% &on%> as inother advanced economies> the extension and use of consumer credit haveincreased substantially# 9s at the end of 13> consumer debt1,extended bythe ban?in% sector10 stood at $&M1,3>!0 million# The fi%ure %rew to$&M1*1>",1 million as at end of 'eptember ,""1# 8n credit card debt alone>the fi%ure increased to $&M*0>""+ million as at end of 'eptember ,""1#

1#1! 9ccordin% to unofficial estimates1)

the number of credit cards incirculation in $on% &on% in 'eptember ,""" amounted to #+ million> out ofwhich 3#+ million were issued by authoried institutions#1* By end of ,""1> thenumber of credit cards issued by authoried institutions had increased to #,million# The default rate of repayments has increased since the economicdownturn in late 1+# Ai%ures collated by the $on% &on% =onetary 9uthorityfor the Fuarter endin% -ecember ,""1 revealed a rise in the annualisedchar%e(off ratio13to !#,+ from *#00 in the previous Fuarter#1+ 9ccordin% tothe $on% &on% =onetary 9uthority> the worsenin% of the fi%ures reflects adeterioration in the Fuality of credit card portfolios> relatin% in particular to the

1, Consumer debt here refers to loans incurred by private individuals and professionalsin relation to credit card and for other purposes> but excludin% those in relation to theacFuisition of residential properties#

10 i#e# 9uthoried institutions as defined in the Ban?in% 8rdinance 6Cap 1**7#1) 3aning 8orld> 'ept ,""" issue> $on% &on% Institute of Ban?ers#1* 9s defined in the Ban?in% 8rdinance 6Cap 1**7#13 Char%e(off ratio refers to the total amount of credit card receivables written off durin%

a period as a percenta%e of the total credit card receivables at the end of that period# Thechar%e(off policy may vary amon% authoried institutions# .ormally> an account will be writtenoff when the receivable has been overdue for more than 1!" days or when the ultimaterepayment of the receivable is unli?ely 6e#%# the cardholder is ban?rupt or cannot be located7#To facilitate comparison amon% authoried institutions 6especially for those which may provide

char%e(offs at different intervals durin% the year7> the char%e(off ratio is annualised#1+ Aor the Fuarter endin% -ecember ,"""> =arch ,""1 and June ,""1> the fi%ures are

0#+1> 0#3! and )#3#

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sharp rise in personal ban?ruptcies#1! .evertheless> due to intensecompetition> ban?s are still actively promotin% their credit card business bymeans of %ifts and other incentives> and new credit cards are issued by ban?slar%ely without ?nowled%e of the number of other credit cards already held bytheir customers as complete information on this is currently not available to

them#

1#1 9nother reason su%%ested for the rapid %rowth of the debtcollection industry is that since June 11> debtors could no lon%er beimprisoned for non(payment of debts followin% the enactment of the Bill ofRi%hts 8rdinance 6Cap 0!07#1 9ccordin%ly> whereas creditors relied mainlyon the court system to recover debts in the past> they had relied more onextra(/udicial means of debt recovery after the enactment of the $on% &on%Bill of Ri%hts 8rdinance 6Cap 0!07#

1#," 9 consumers failure to repay a debt may arise from a variety of

circumstances# In some cases a consumer may deliberately try to avoidrepayment# In others> default arises from over(commitment or chan%es infinancial circumstances resultin% from unemployment> business failure> healthproblems or divorce# -efault may also arise because of dispute as to thevalidity or amount of the debt# 9 study," found that the causes of defaultincluded initial mis/ud%ement of the ability to repay> the incurrin% of additionalobli%ations> extrava%ance by the debtor and> in some cases> plain dishonesty#

1! $owever> the fi%ures have also been affected si%nificantly by chan%es in the char%e(off policy of a number of institutions which are now char%in% off bad debts earlier than before>in particular when a ban?ruptcy petition is presented rather than when a ban?ruptcy order ismade# ithout the chan%e> the char%e(off ratio would have been sli%htly under + for the-ecember ,""1 Fuarter#

1 By the enactment of the $on% &on% Bill of Ri%hts 6Cap 0!07 on ! June 11> certainprovisions of the International Covenant on Civil and 5olitical Ri%hts were incorporated into the

law of $on% &on%# By virtue of 9rticle +> no one shall be imprisoned merely on the %round ofinability to fulfil a contractual obli%ation#

," 9ustralian Law Reform Commission> Report .o# 03#

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C#a"t!r 2

So/! '!atur!+ o' !tra1u(%*%al(!)t *oll!*t%o&

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

Sta$!+ o' (!)t *oll!*t%o&

,#1 The debt collection process can %enerally be divided into threesta%es:1

617 the creditor or an a%ent actin% on his behalf ma?es non(/udicialattempts at collectionD

6,7 the creditor brin%s a court action for recovery of the debtD and

607 the court ma?es an order for payment> which is followed byattempts at enforcement#

,#, The whole process of debt recovery may be> and sometimes is>protracted# This protracted process> however> has a useful Gfilter effectH# 9teach sta%e> there should be and are fewer cases than at the previous sta%e>either because of settlement of the debt or the creditors decision to abandonpursuit#, iven its terms of reference> this Report examines only the firststa%e of debt collection# It is> however> useful to bear in mind that the sta%esof debt collection are inter(related# The effectiveness of the later sta%es ofdebt collection have a bearin% on an earlier sta%e# Conversely> if thepreliminary sta%e is ineffective or stifled> more cases would have to continueon to the later sta%es#

D%''!r!&t ty"!+ o' (!)t *oll!*t%o& a*t%4%t%!+

,#0 -ebt collection involves the exertion of pressure on the debtor#There is sometimes only a fine line between acceptable and unacceptabledebt collection activities# -ebt collection activities can be broadly cate%orisedinto three types: those which are le%itimate> those which include some form ofharassment> and> lastly> those which involve activities which are clearlycriminal in nature#

,#) Collection tactics encountered in $on% &on% that amount tocriminal offences include:

1

'cottish Law Commission> .eport on Diligence and Debtor Protection61!*7 at pa%e#

, 'cottish Law Commission> cited above> at pa%e 11#

1,


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ma?in% threatenin% telephone callsD sendin% obscene or offensive fax messa%esD /ammin% %lue into door loc?s of the debtors homeD splashin% paint outside the debtors homeD chainin% up the door or %ate of the debtors homeD

obtainin% by bribery the debtors particulars from public utilitycompaniesD intimidationD false imprisonmentD assaultD and arson#

,#* $arassment or nuisance type tactics are often employed tocollect debts# 9lthou%h less dan%erous in nature than the clearly ille%al debtcollection tactics> the use of harassment is widespread and a cause forserious concern in $on% &on%# Examples are:

pesterin% the debtor with persistent phone callsD embarrassin% the debtor by publicisin% his particulars and

information on the outstandin% debtD sendin% open faxes to the debtors office or wor?placeD and pesterin% the debtors referees> family members and friends

either for repayment or information about the debtorswhereabouts#

,#3 8ther improper practices in debt collection include:

usin% false names to communicate with the debtorD ma?in% anonymous calls and sendin% unidentifiable notes to the

debtor to avoid bein% traced by policeD switchin% off a tape(recorder used by a debt(collectin% a%ency to

monitor its staff before ma?in% abusive or threatenin% remar?s tothe debtorD and

sub(contractin% debt collection wor? to a third party ?nown touse improper methods#

No&1u(%*%al (!)t *oll!*t%o&

,#+ The non(/udicial debt recovery process is sometimes referred toas the pre(action sta%e or the informal collection sta%e# In one study0> thefollowin% observations were made on extra(/udicial debt recovery:

@The vast ma%ority of outstanding debts are collected by theefforts of the creditor himself or his agent $ithout thecommencement of an action against the debtor The principalreason is economic debt collection by one2s o$n collectiondepartment or by a collection agency is liely to be muchcheaper than debt collection by a la$yer The creditor may

0 Institute of Law Research and Reform of Edmonton> 9lberta> Debt CollectionPractices6Report .o ), June 1!)7#

10


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steer a$ay from legal action for other reasons/ including adesire to eep the debtor as a potential customer/ but the costfactor is probably the most important reason for using someform of e=tra"%udicial collection method in preference to ane=pensive la$suitB)

,#! The Creditors 'urvey*compiled by the Central Research at para%raph ,#1#* Report .o# !> Central Research


22/184


23/184

,#13 hilst operators at the top(end of the debt collection industrymay be reasonably well Fualified and experienced> surveys indicate there isoften a lac? of professionalism amon% debt collection a%encies# In 9lberta>for instance> where debt collectors are reFuired to be licensed> there is no

educational reFuirement to become a debt collector#1,

The Institute of LawResearch and Reform of Edmonton> 9lberta> found that collectors in %eneralhave no more than a %rade 1, education>10 and complaints have beenreceived about the absence of trainin% for would(be collectors#

,#1+ e are not aware of any formal survey conducted in $on% &on%on the educational level of debt collectors> but a newspaper article 1) foundthat debt collectors come from all wal?s of life# The bac?%round of three debtcollectors was considered:

Case .o# 1

This debt collector %raduated from a Canadian


24/184

of ei%ht thousand dollars and a commission of six to ei%ht per cent ofthe recovered debt# $is avera%e monthly earnin%s amounted toaround twenty thousand dollars# $e had many ways of obtainin% thecontact details of debtors> such as bribin% the staff of some telephonecompanies> pa%er companies and even some %overnment

departments# 8ther sources of information include the =arria%eRe%istry> Companies Re%istry and car(dealers# This collector usuallypaid personal visits to the debtors and claimed a success rate ofbetween 1" per cent to ," per cent# $e admitted he had used ille%altactics> and he claimed that debtors were usually reluctant to reportthem to the police#

Looselen+ing

,#1! There is a view that part of the reason for defaults in repayment

lies in the availability of easy credit#1*

Certain financial institutions are willin%to accept hi%h ris?s in return for the hi%h profit mar%in of credit cards and thepersonal loan business# 'ome creditors do not exercise sufficient care toascertain the financial standin% of applicants before %rantin% loans or othercredit# 9n a%%ressive provider of credit is a dan%er> not only to the debtor> butalso to the debtors other creditors whose loans or other credit may havebeen responsibly %ranted#

E$onomi$ +ownturn

,#1 9 ma/or cause of the increase in repayment defaults is theeconomic downturn> which has resulted in users of consumer credit who werecredit(worthy at the time the credit was %ranted becomin% unemployed orsufferin% pay(cuts# Aor example> the 9ustralian Law Reform Commission inits Report on -ebt Recovery and Insolvency13found that the most importantcause of non(business debt default was an unexpected chan%e in economiccircumstances#

The Au+i$i%l pro$ess in +e?t re$over&

,#," 9t the be%innin% of this chapter> we mentioned that the sta%es ofdebt collection are inter(related in that the effectiveness of the later sta%es ofdebt collection have a bearin% on that of the preliminary sta%eD and> similarly>if the preliminary sta%e is ineffective> more cases will proceed to the latersta%es# 9lthou%h the efficiency of the /udicial process for recoverin% debts isoutside this Reports terms of reference> it is briefly discussed in Chapter 1"of this Report#

1*

In fact> it has been commented that the most effective debt recovery is themaintenance of %ood credit control# J Richardson> Debt .ecovery in #urope> at pa%e 1*"#

13 9ustralian Law Reform Commission> Report .o# 03> at para%raph ,1#

1+


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Other f%$tors

,#,1 e have set out above some factors that contribute towards theoccurrence of defaults and may lead to abusive debt collection# 8therfactors> such as whether or not there are sufficient le%al deterrents a%ainst

abusive debt collection> are examined in Chapters 0 ; 3 in this Report#

1!


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C#a"t!r 3

E%+t%&$ *r%/%&al +a&*t%o&+ a$a%&+ta)u+%4! (!)t *oll!*t%o&

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

Cr%/%&al la9 +a&*t%o&+

0#1 In this chapter> we examine various criminal offences that maybe applicable to debt collection activities#

Bntimi+%tion

0#, The offence of intimidation is provided for in section ,) of theCrimes 8rdinance 6Cap ,""7:

@Any person $ho threatens any other person "

)a, $ith any in%ury to the person/ reputation orproperty of such other person or

)b, $ith any in%ury to the person/ reputation orproperty of any third person/ or to the reputation orestate of any deceased person or

)c, $ith any illegal act/

$ith intent in any such case "

)i, to alarm the person so threatened or any otherperson or

)ii, to cause the person so threatened or any otherperson to do any act $hich he is not legally boundto do or

)iii, to cause the person so threatened or any otherperson to omit to do any act $hich he is legallyentitled to do/

shall be guilty of an offenceB

0#0 In . v !o Tong Kai1 a defendant was convicted of criminal

1 1++ $&LR 10#

1


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intimidation and sentenced to three months imprisonment# The convictionwas set aside on appeal because of doubts concernin% the extent to whichthe surroundin% circumstances were ta?en into consideration# =c=ullin Jmade some observations on the reFuirements of section ,):

@To my mind therefore it $as of the greatest importance that thecourt should have considered $hether the $ords used $ereE$ild and $hirling $ords2 uttered in e=asperation by a mandriven beyond the point of endurance by opposition offered tohim in his legitimate rights as o$ner of premises/ and signifyingnothing more than an instinctive outburst of spleen/ or $hetherthey $ere uttered $ith a genuine intention of causing fear or$ere/ in the circumstances of their utterance/ liely to producethat effectB,

0#) The case of . v Chan Kai Hing0shows how section ,) applies

to debt collection activities# The appellant was a debt collector who> to%etherwith another collea%ue> went to the home of a debtor who owed a ban? a sumof money# 9n ar%ument ensued at the door> and the debtor alle%ed that thedebt collector had uttered a threat that if the debtor did not repay> then thedebt collector would set fire to the flat# The debt collector maintained thatthere was some dispute but no utterance as alle%ed> and that the visit was alawful debt collection exercise# The debt collector was convicted by thema%istrate of one count of criminal intimidation# The ma%istrate> however>made some inconsistent remar?s concernin% the mens rea of the debtcollector# 9t one point> the ma%istrate said that the debt collectors commentswere said Gin the heat of the moment 6and7 that there was no premeditationH#

Later> on sentencin%> the ma%istrate said that at the time the debt collectormade the threats> he made them with the intent of alarmin% the debtor# iventhe inconsistent remar?s> the $i%h Court> on appeal> held that there wassome doubt as to whether the ma%istrate had considered the issues raised inthe case of . v !o Tong Kai>) and the court decided to set aside theconviction due to a lur?in% doubt as to whether the conviction was safe orsatisfactory#

0#* hile section ,) of the Crimes 8rdinance 6Cap ,""7 deals withthreats> 'ection ,* deals with assaults and reads:

C*ss%ults with intent to $%use $ert%in %$ts to ?e +one or omitte+

Any person $ho beats or uses any violence or force to anyperson $ith intent in any such case to cause such person orany other person to do any act $hich he is not legally bound todo/ or to omit to do any act $hich he is legally entitled to do/shall be guilty of an offenceB

0#3 9ny person who is %uilty of section ,) or ,* is liable onsummary conviction to a fine of M,>""" and to two years imprisonment and is

,

9s above> at pa%e 13#0 N1+O 0 $&C *+*#) N1++O $&LR 10#

,"


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liable on conviction upon indictment to five years imprisonment#*

(rimin%l +%m%ge to propert&

0#+ If a debt collector dama%es or destroys property belon%in% toanother> or threatens to do so> such acts are covered by sections 3" and 31of the Crimes 8rdinance 6Cap ,""7:

@=3. -estro&ing or +%m%ging propert&

)5, A person $ho $ithout la$ful e=cuse destroys ordamages any property belonging to another intending to destroyor damage any such property or being recless as to $hetherany such property $ould be destroyed or damaged shall beguilty of an offence

)*, A person $ho $ithout la$ful e=cuse destroys ordamages any property/ $hether belonging to himself or another"

)a, intending to destroy or damage anyproperty or being recless as to $hetherany property $ould be destroyed ordamaged and

)b, intending by the destruction or damage to

endanger the life of another or beingrecless as to $hether the life of another$ould be thereby endangered/

shall be guilty of an offence

)F, An offence committed under this section bydestroying or damaging property by fire shall be charged asarson

=D. Thre%ts to +estro& or +%m%ge propert&

A person $ho $ithout la$ful e=cuse maes to another athreat/ intending that other $ould fear it $ould be carried out/ "

)a, to destroy or damage any property belonging tothat other or a third person or

)b, to destroy or damage his o$n property in a $ay$hich he no$s is liely to endanger the life of thatother or a third person/

shall be guilty of an offenceB

* 'ection ,+#

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0#! Contravention of these sections carries heavy penalties# 9person %uilty of arson under section 3" or of an offence under section 3" 6,76whether arson or not7 is liable on conviction upon indictment to imprisonmentfor life> whereas a person %uilty under other sections in the same 5art is liable

on conviction upon indictment to imprisonment for ten years#3

0# In . v Shum Hon Kai 9 Another>+arson char%es were brou%htfor debt collection activities# The facts concerned a =iss Lau who was the%irlfriend of the second appellant# -urin% the course of their relationship> thesecond appellant lent M+>""" to =iss Laus cousin> who did not repay theloan# 9fter the second appellants relationship with =iss Lau had ended> heheld her responsible for the loan# The second appellant discussed the matterwith his friend> the first appellant> and they a%reed to set fire to the entranceof =iss Laus flat in a multi(storey buildin%# They did so at about 1 am# Thefirst appellant lit the fire while the second appellant acted as loo?out# The first

appellant burned himself accidentally and suffered serious burns# Bothpleaded %uilty to the char%e of arson but appealed a%ainst the sentence ofei%ht years imprisonment# The Court of 9ppeal expressed the view that asthe de%ree of seriousness in arson cases mi%ht vary considerably> it would beunwise to lay down any sentencin% %uidelines# The court did not doubt theseriousness of the offence committed> but said that miti%atin% circumstancesshould have been ta?en into consideration# These included the a%e of thefirst appellant> that he surrendered himself and that he pleaded %uilty# Thefirst appellants sentence was reduced to six years# 9s for the secondappellant> he was already ,0 years of a%e and did not have a clear record#9lthou%h he merely acted as the loo?out> no distinction was made between

him and the first appellant> and he also received a reduced term of six years#

Thre%ts to kill or mur+er

0#1" 'ection 1* of the 8ffences 9%ainst the 5erson 8rdinance6Cap ,1,7 stipulates that any person who maliciously sends any letter orwritin% threatenin% to ?ill or murder another shall be %uilty of an offence triableupon indictment and shall be liable to imprisonment for ten years#

Theft %n+ ?l%$km%il

0#11 The offence of blac?mail is said to be usually associated withtriad activity>!but it is also applicable to debt collection cases# 'ince %oodsobtained by blac?mail are to be re%arded as stolen %oods> debt collectorswho recover debts by blac?mail may also be convicted of theft#1"

3 'ection 30#+ N1!!O $&C ,+#! = Aindlay> C $owarth and I -obinson> Criminal !a$ in Hong Kong/ Cases and

Commentary6,nd edition7 at pa%e )!0# 6G= AindlayH7 'ection ,3 6)7 of the Theft 8rdinance 6Cap ,1"7#1" . v !am Chiu aN13O 1 $&C 0",#

,,


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0#1, The offence of blac?mail is provided for in section ,0 of theTheft 8rdinance 6Cap ,1"7:

@)5, A person commits blacmail if/ $ith a vie$ to gainfor himself or another or $ith intent to cause loss to another/ he

maes any un$arranted demand $ith menaces and for thispurpose a demand $ith menaces is un$arranted unless theperson maing it does so in the belief "

)a, that he has reasonable grounds for maing thedemand and

)b, that the use of the menaces is a proper means ofreinforcing the demandB

0#10 The elements of the offence are that there must> first> be ademand> which can be expressed or implied#11 The demand need not be

communicated to the victim> and it is not a reFuirement that the victim isthreatened or intimidated#1, In . v Tsang :ip (ong>10for instance> the demandand menaces were communicated to an undercover police officer instead ofthe intended victim# 9part from a demand> there must be menaces or threatswhich are such that an ordinary person would be influenced or madeapprehensive and therefore willin% to accede to the demand#1) In . v !eeKeng"$ong>1*for instance> claimin% to be a member of a triad society washeld to be an implied menace for the purposes of blac?mail#

0#1) The case of . v !am Chiu a13illustrates the application of theoffence of blac?mail to debt collection activities# The defendant invested

M,"">""" in a company in 1,# By 10> the defendant wanted to withdrawfrom the company and sou%ht the return of his investment in full# 8thermembers of the company claimed that because of tradin% losses> he couldonly have M3">""" bac?# $owever> company accounts were not producedand no money was returned to the defendant# In 9pril 1)> the defendantwent to the companys premises to%ether with five men to demandrepayment# The defendant remained for most of the time at the door of theoffice whilst the men entered and made demands for the return of M,"">""">usin% threats and minor assaults# 9s a result> two of the partners of thecompany drew several cheFues in favour of the defendant# 8ne cheFue wasfor M1">"""> representin% the a%%re%ate balance in the company account#

Aour other cheFues> each for M*">"""> were drawn# The men directed thetwo partners to obtain loans from friends and relatives> which the partners didto the extent of M1"">"""# The defendant cashed three cheFues from theban?# Before leavin% the company premises> the men obtained I8 and warned that the summust be repaid within a month or they would be physically assaulted# Thedefendant was convicted of blac?mail pursuant to section ,0 of the Theft

11 = Aindlay> cited above> at pa%e )!0#1, 9s above#10 N10O 1 $&C 0"!#1)

= Aindlay> cited above> at pa%e )!0#1* Criminal 9ppeal .o# 1!, of 1,#13 N13O 1 $&C 0",#

,0


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8rdinance 6Cap ,1"7# The defendant was also convicted of theft pursuant tosection ,36)7 of the Theft 8rdinance which provides that %oods obtained byblac?mail shall be re%arded as stolen# The defendant was sentenced forei%ht months# The defendant relied on . v Sivington1+and appealed on the%round that he honestly believed that he had a /ust claim to the money> and

could not be convicted of theft simply because the means of obtainin% themoney were improper# The appeal was dismissed because> first> . vSivingtonhas been superseded by section ,36)7 of the Theft 8rdinance6Cap ,1"7D and second> a defence of claim of ri%ht> which allows a defendantto seie or reclaim property over which he honestly believes he has ri%hts> didnot avail the defendant#

*ss%ult

0#1* 4arious offences relatin% to assaults are provided for in the

8ffences 9%ainst the 5erson 8rdinance 6Cap ,1,7# 9ssault is an act bywhich the defendant intentionally or rec?lessly causes a person to apprehendimmediate and unlawful physical violenceD and if physical violence doesoccur> it amounts also to the offence of battery#1! Even words may constitutean assault#1 Relevant sections of the 8ffences 9%ainst the 5erson 8rdinance6Cap ,1,7 are set out:

CD;. ... woun+ing ... with intent to +o grievous ?o+il&h%rm.

Any person $ho 4

)a, unla$fully and maliciously/ by any means$hatsoever/ $ounds or causes any grievousbodily harm to any person

)b, )c,

$ith intent in any of such cases to maim/ disfigure/ or disableany person/ or to do some other grievous bodily harm to anyperson/ or $ith intent to resist or prevent the la$fulapprehension or detain of any person/ shall be guilty of anoffence triable upon indictment/ and shall be liable toimprisonment for life

D5. 7oun+ing or infli$ting grievous ?o+il& h%rm

Any person $ho unla$fully and maliciously $ounds orinflicts any grievous bodily harm upon any other person/ either$ith or $ithout any $eapon or instrument/ shall be guilty of anoffence triable upon indictment/ and shall be liable toimprisonment for F years

1+ 613+7 *1 Cr 9pp R 13+#1!

= Aindlay> cited above> at pa%e 0+!#1 'ee the $ouse of Lords decision in . v 'reland 9 3ursto$N1!O 9C 1)+> per Lord

'teyn at 13,#

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45. *ss%ult o$$%sioning %$tu%l ?o+il& h%rm

Any person $ho is convicted of an assault occasioningactual bodily harm shall be guilty of an offence triable upon

indictment and shall be liable to imprisonment for F years

3. (ommon *ss%ult

Any person $ho is convicted of a common assault shallbe guilty of an offence triable either summarily or uponinducement/ and shall be liable to imprisonment for 5 yearB

Mens re% for %ss%ult

0#13 9s for the reFuired intention to cause %rievous bodily harmunder section 1+> re%ard must be had to the weapon> if any> used and themanner in which it was used# 'tri?in% with the fists per seis not sufficientevidence of an intent to cause %rievous bodily harm> even thou%h this may infact result#," 9n intention to fri%hten is insufficient> and so is rec?lessness asto whether %rievous bodily harm will result#,1 here several defendantsparticipate in a %an% attac?> as in The Attorney the crime would beless li?ely to be perpetrated#

0#1+ ith re%ard to the mens reareFuired under sections 1 and 0of the 8ffences 9%ainst the 5erson 8rdinance 6Cap ,1,7> it was held in the$ouse of Lords in . v Savage and . v Parmenter,0 that for unlawful andmalicious woundin% or inflictin% %rievous bodily harm> ,)the prosecution mustprove that the defendant either intended or actually foresaw that his act wouldcause harm# It is not sufficient to show merely that he ou%ht to have foreseenthat his act would cause harm# It is unnecessary for the prosecution to showthat the accused intended or foresaw that his unlawful act mi%ht causephysical harm of the %ravity described in the section> that is> either woundin%or %rievous bodily harm# 9s for assault occasionin% actual bodily harm>,*theprosecution has to prove that the defendant committed an assault and thatactual bodily harm was occasioned by the assault# There is no need to prove

that the defendant intended to cause some bodily harm or was rec?less as towhether such harm would be caused# The $ouse of Lords also held that averdict of assault occasionin% actual bodily harm under section )+ is apermissible alternative verdict on a count alle%in% unlawful woundin% undersection ," of the 8ffences 9%ainst the 5erson 9ct 1!31#

," Halsbury2s Statutes4ol 1, at pa%e !#,1 9s above#,, N1!!O $&C )01#,0 N11O ) 9ll ER 3!#,) 'ection ," of the 8ffences 9%ainst the 5erson 9ct 1!31# Its wordin% is similar to

section 1 of the 8ffences 9%ainst the 5erson 8rdinance 6Cap ,1,7#,* 'ection )+ of the 8ffences 9%ainst the 5erson 9ct 1!31# Its wordin% is similar to

section 0 of the 8ffences 9%ainst the 5erson 8rdinance 6Cap ,1,7#

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0#1! 9ssaults in connection with debt collection activities havereceived /udicial consideration# In . v Chan :au Hang and Another>,3 inwhich the victim was beaten and burnt with ci%arettes> the Court of 9ppealpointed out that:

@8e agreed $ith the vie$ of the trial %udge that there is a public

interest in deterring those $ho might see to collect debts bythese appalling methodsB,+

0#1 9nother example is . v Choi 8ai K$ong,! The defendant wasthe victims sub(contractor who was owed M01">""" under the sub(contract#9mon%st other attempts at recoverin% the debt> the defendant and three othermen went to the victims office to ma?e demands for repayment# hen thevictim refused to pay> the men be%an to assault him# It was alle%ed by thevictim that he was hit with a hammer# =edical reports showed only relativelyminor in/uries# The defendant was convicted by the ma%istrate of assaultoccasionin% actual bodily harm# 8n appeal by the defendant> the appeal wasallowed in part> and a conviction of common assault was entered insubstitution for assault occasionin% actual bodily harm# hether the bodily

harm inflicted amounted to Kactual bodily harm was a Fuestion of de%ree> andactual bodily harm meant a harm that was more than triflin%# Transitory painwas not enou%h# 9 cut> or an area of burnin%> was actual bodily harm unless itwas very minor#

1%lse imprisonment

0#," 9part from bein% a tort> false imprisonment is also a commonlaw offence that is sometimes relevant to debt collection activities# Aalseimprisonment is committed where a defendant unlawfully and intentionally or

,3 N1!0O 1 $&C 1"+# The victim incurred a heavy %amblin% debt in=acau which> to%ether with interest> amounted to M13*>"""# hen the victimfailed to effect repayment as scheduled> he was seied by a number of menin &owloon and beaten> as a result of which he sustained a blac?(eye# Thevictim was then ta?en to a room where he was burnt with a ci%arette> leavin%five burn mar?s on his body> one of which penetrated all layers of the s?in>althou%h the others only penetrated the first layer of the epidermis# Thedefendants were convicted in the -istrict Court on two char%es of assaultoccasionin% actual bodily harm> and one char%e of falseimprisonmentforcible detention under section ), of the 8ffences 9%ainst the

5erson 8rdinance 6Cap ,1,7# The defendants were acFuitted of the latterchar%e on appeal because the -istrict Court did not have /urisdiction to tryany offence punishable with life imprisonment> sub/ect to a few specificexceptions# In relation to the first assault char%e in respect of which theyreceived a term of imprisonment of 1! months> the Court of 9ppeal dismissedthe appeal and said : G$ad the first assault been an isolated matter> withoutany bac?%round> such as there was to this case> a term of imprisonment of1! months would have been a very severe one for two men who> for practicalpurposes> were without previous convictions# $owever> it is necessary> whendeterminin% the correct sentence> to ta?e into account the fact that this waspart of a course of conduct which was desi%ned to terrify a debtor and toforce him under threat of assault> and under actual assault and ill(treatment>

to repay the loan which had been made to him#,+ 5er Roberts CJ> at pa%e 11"#,! N1!O , $&LR 01#

,3


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rec?lessly restrains anothers freedom of movement from a particular place#,

There is little authority on the nature of the mens rea reFuired> but it isbelieved that Cunninghamrec?lessness0"is reFuired#01

0#,1 To establish false imprisonment> the case of . v Cheung 8an 'ngdecided that:

@8here there has been no physical restraint placed upon aperson2s movements/ a court must/ at the very least/ needcogent evidence of some real danger threatened by the culpritand feared by the victim in e=ercising freedom of movementbefore finding the offence of false imprisonment has beenestablishedB0,

0#,, This reFuirement was overruled in . v Chan 8ing Kuen andAnother00by the Court of 9ppeal# The case concerned a victim who incurreda %amblin% debt in =acau and was accompanied bac? to $on% &on% by thefirst defendant in order to collect the debt# 9t the $on% &on% =acau Terminal>they were met by the second defendant and two other men# The victim wastold to board a taxi and was ta?en to Chai an where> after he had madesome unsuccessful calls to raise money> he was ta?en to a ?arao?e bar and?ept there until ) am the followin% mornin%> while more unsuccessful callswere made# The four men then rented two rooms at a hotel in Chai anwhich they and the victim occupied for several hours# The first defendant wasarrested when he was accompanyin% the victim to meet a friend of the victimto collect some money# The second defendant was arrested some time later#The defendants were convicted of false imprisonment and appealed on the%round that> if the victim had remained with the defendants because he felt hehad a moral obli%ation to repay the debt> it was impossible to say that he hadbeen falsely imprisoned# The appeal was dismissed# The Court of 9ppealheld:

@(or the offence to be committed it is not necessary that therebe evidence that the defendant or defendants uttered a threat tothe victim that he $as in Esome real danger2 or indeed that anythreat $as utteredB0)

9ccordin%ly> . v Cheung 8an 'ngwas overruled as bein% contrary to therulin% on false imprisonment in . v .ahman>0*which was cited with approvalin . v Hutchins03

1or$i?le +etention

0#,0 The common law offence of false imprisonment has some

, . v .ahman61!*7 !1 Cr 9pp Rep 0)> at 0*0#0" 'mith @ $o%an> Criminal !a$6!th edition7 at pa%e )*)#01 @3roadly/ the distinction is that Cunningham reclessness requires proof that the

defendant $as a$are of the e=istence of the unreasonable ris $hereas Cald$ell0!a$rencereclessness is satisfied if either )i, he $as a$are of its e=istence/ or )ii, in the case of anobvious ris he failed to give any thought to the possibility of its e=istence Some offencesrequire proof of Cunningham reclessness &thers are satisfied by proof of Cald$ell0!a$rencereclessnessB'mith @ $o%an> cited above> at pa%e 3)#

0, . v Cheung 8an 'ng N1"O 1 $&LR 3**#00 N1*O 1 $&C )+"#0)

9s above> at pa%e )++#0* 61!*7 !1 Cr 9pp Rep 0)#03 N1!!O Crim LR 0+#

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overlap with section ), of the 8ffences 9%ainst The 5erson 8rdinance6Cap ,1,7 on forcible detention> which reads:

@Any person $ho/ by force or fraud/ taes a$ay or detainsagainst his or her $ill any man/ boy/ $oman or female child/ $ith

intent to sell him or her/ or to procure a ransom or benefit for hisor her liberation/ shall be guilty of an offence triable uponindictment/ and shall be liable to imprisonment for lifeB

0#,) 'ection ), of the 8ffences 9%ainst the 5erson 8rdinance6Cap ,1,7 is similar to section *3 of the but the falseimprisonment char%e was drafted in such a way that elements of both falseimprisonment and section ), forcible detention were included in the char%e#The defendants appealed a%ainst conviction on the %rounds that> first> theparticulars of the char%e did not satisfy either the common law or statutoryoffenceD and> second> the -istrict Court did not have /urisdiction to try theoffence under section ),# The appeal a%ainst the false imprisonment

conviction was allowed# The char%e as drafted was:

@(alse imprisonment/ contrary to common la$ and section G* ofthe &ffences Against The Person &rdinance )Cap *5*,

Particulars of offence

Chan :au"hang/ Ho !ai"man and Hoi Su"un/ on or bet$een5+ &ctober 5-+* and *7 &ctober 5-+*/ in this colony/ together$ith other persons unno$n/ by force/ detained Tong King"yiuagainst his $illB

The char%e was mis(described as false imprisonment because thedefendants were actually char%ed with two offences# 9lso> althou%h it is usualin char%in% the common law offence of false imprisonment to assert that thevictim was unlawfully and in/uriously imprisoned and detained a%ainst his will>on closer examination it is apparent that such particulars were inappropriateto either offence# Aurthermore> the Court of 9ppeal found that the -istrictCourt did not have /urisdiction to try any offence which was punishable withlife imprisonment> with the exception of a number of specific offences whichdid not include section ),#0

0+ . v AustinN1!1O 1 9ll ER 0+)#0! N1!0O 1 $&C 1"+#

0 This latter point was further explained in . v 8ong K$o !un N1!)O $&C *"# TheCourt of 9ppeal mentioned that because of a lacuna in the law> there was no /urisdiction in the-istrict Court to try this offence# This came about when> in 1!,> the previous maximum term

,!


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Tri%+ offen$es

0#,3 'ome debt(collectors claim that they are triad members durin%

the debt collection process# 9s a result> they may also be %uilty of offencesunder the 'ocieties 8rdinance 6Cap 1*17# a hierarchy of authority and control existswhereby senior office(bearers direct the activities of lesser members> and theheavier penalties under section 1 reflects the increased culpability of thosewho are in control#

0#, hether a defendant has /oined a triad society is a Fuestion offact> and a Gbald admissionH)1 may in some unusual circumstances bere%arded as sufficient evidence that an offence under section ,"6,7 has beencommitted> thou%h in most cases Gproof of other facts to indicate membership>

of 1) years imprisonment was altered by the le%islature to one of life imprisonment# 5ursuantto section !! of the =a%istrates 8rdinance 6Cap ,,+7> and 5t III of the 'econd 'chedule> the'ecretary for Justice may apply to transfer to the -istrict Court for trial of offences listed thereinwhich carry a sentence of life imprisonment# The schedule has not been amended to permitsection ), offence to be so transferred and tried#

)" 'ocieties 8rdinance 6Cap 1*17 section ,#

)1 @3y a Ebald admission2 $e tae to be meant a statement such as E' am a member ofsuch and such a society2 and no more/ $hich $e assume that the magistrate $ould re%ect asbeing a matter of mere hearsay or beliefB Per Cons "PinA< v Chi 8ai"lunN1!+O $&LR )1#

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whether by way of admission by the defendant or otherwiseH>), would bereFuired#

Summ%r& Offen$es Or+in%n$e '(%p 229)

0#0" Criminal offences which may be applicable to some abusivedebt collection activities can also be found in the 'ummary 8ffences8rdinance 6Cap ,,!7#

0#01 'ection )6,,7 of the 'ummary 8ffences 8rdinance providesthat:

@1uisances and miscellaneous offences

G Any person $ho $ithout la$ful authority or e=cuse 4

)**, disturbs any inhabitant by pulling or ringing anydoor bell/ or by nocing or striing at any door$ithout la$ful e=cuse

shall be liable to a fine of IJ77 or to imprisonment for FmonthsB

0#0, 'ection ! of the 'ummary 8ffences 8rdinance provides that:

@&ther offences against good order

Any person $ho 4)a, )b, $ithout the consent of the o$ner or occupier $rites

upon/ soils/ defaces or mars any building/ $all/fence or paling $ith chal or paint or in any other$ay $hatsoever or $ilfully breas/ destroys ordamages any part of any building/ $all/ fence orpaling/ or any fi=ture or appendage thereof

)c,

shall be liable to a fine of IJ77 or to imprisonment for FmonthsB

0#00 9lso> section ," of the 'ummary 8ffences 8rdinance stipulatesthat:

@Any person $ho "

)a, sends any message by telegraph/ telephone/ $irelesstelegraphy or $ireless telephony $hich is grosslyoffensive or of an indecent/ obscene or menacing

), A< v Chi 8ai"lun N1!+O $&LR )1 per Cons 45#

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character or)b, sends by any such means any message/ $hich he no$s

to be false/ for the purpose of causing annoyance/inconvenience or needless an=iety to any other personor

)c, persistently maes telephone calls $ithout reasonablecause and for any such purpose as aforesaid/

shall be liable to a fine of I5/777 and to imprisonment for* monthsB

0#0) It should be noted that the above offences are not specificallydesi%ned to tac?le abusive debt collection> and will not be able to cover thewhole ran%e of the relatively Kminor improper collection tactics which arepresently employed or are li?ely to be developed#

#ost Offi$e Or+in%n$e '(%p 59)

0#0* By virtue of section 0,6176f7 of the 8rdinance> a person whosends by post Gany obscene> immoral> indecent> offensive or libellous writin%>picture or other thin%H is %uilty of an offence punishable by a fine of M,">"""and imprisonment for 3 months#

Cr%/%&al +a&*t%o&+ 'or "art%*%"at%o&

The prin$ip%l

0#03 9busive debt collection activities are often carried out by morethan one person# here there are several participants in a crime> theprincipal is the one whose act is the most immediate cause of the actusreus#)0 It is possible to have two or more principals in the first de%ree to thesame crime# $ence> if two debt collectors both a%ree to attac? and do attac?a victim to pressure the victim into repayin% a loan> then both are %uilty ofassault as /oint principals#

Se$on+%r& p%rti$ip%tion

0#0+ In other cases> where there is participatory conduct by oneperson> another may have to bear or share criminal responsibility undersection ! of the Criminal 5rocedure 8rdinance 6Cap ,,17# This states thatany person who Gaids> abets> counsels or procures the commission byanother person of any offence shall be %uilty of the li?e offenceH# The mentalstate reFuired for aidin% and abettin% involves actual ?nowled%e of> or wilfulblindness towards> the circumstances which constitute the offence> which isnot the same as the mens reareFuired of the principal party#)) &nowled%e ofthe offence is sufficient if the offence committed is of the type contemplated

)0 = Aindlay> cited above> at pa%e 0#)) 9s above> at pa%e )"# 'ee also 'mith @ $o%an> !th edition> at pa%es 1)" and 1)1#

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by the secondary party> and ?nowled%e does not have to be complete indetail#)* There is a lar%e body of case law on this area of law and applicationof the principles is not free from difficulty# 9pplied to debt collection cases> acreditor or other party may be liable in various situations#

0#0! Intention to aid ; 9s lon% as it is proved that a person intendedto do the acts which he ?new to be capable of assistin% or encoura%in% thecommission of the crime> it is not necessary to prove his intention that thecrime be committed#)3 Therefore> a creditor or other person who ?new thatthe debt collectors would employ ille%al means to collect debts> and eitherdrove the debt collectors to commit the crime or provide weapons and tools tothe debt collectors> that person may be liable as a secondary party#

0#0 Common purpose ; 9 secondary party will be liable for the actsof the principal party if the principal party has in the course of endeavourin% tocarry out the common purpose committed another crime#)+ $ence> if the

creditor and the debt collector have the common purpose to cause %rievousbodily harm to the debtor> and the debt collector> endeavourin% to do so> ?illsthe debtor> both the creditor and debt collector are %uilty of murder#

0#)" Transferred malice ; If a secondary party has a commonpurpose with the principal party to in/ure 9> and the principal party>endeavourin% to in/ure 9> wounds B accidentally> then both the secondaryparty and the principal party are liable for woundin% under the doctrine oftransferred malice#)!

0#)1 5articipation by inactivity ; here one person has the ri%ht to

control the actions of another and he deliberately refrains from exercisin% it>his inactivity may be a positive encoura%ement to the other to perform anille%al act> and> therefore> an aidin% and abettin%# ) $ence> if a creditor hiressome debt collectors to collect debt> and the creditor /ust stands by andwatches while the debtor is bein% beaten up> the creditor may be liable forassault as a secondary party#

%*ar%ou+ l%a)%l%ty

0#), In some limited circumstances> the law holds a defendant

criminally responsible even where there is no direct actus reuscommitted ormens reapossessed by him#*" 4icarious criminal liability is imposed in twoways# Airst> a person under certain statutory duties may be held liable for the

)* . v 3ainbridgeN13"O 1 PB 1,# 'ee also 'mith @ $o%an> !th edition at pa%e 1),#)3 'mith @ $o%an> !th edition> at pa%e 10+# 'ee !ynch v DPP for 1orthern 'reland

N1+*O 9C 3*0> where -, drove -1 to the place where he ?new that -1 intended to murder apoliceman# -, was convicted of aidin% and abettin%#

)+ 'mith @ $o%an> cited above> at pa%e 1),#)! 9s above# 'ee> however> the old and famous case of Saunders v Archer 61*+07 ,

5lowd )+0> where there was a deliberate> and not an accidental> departure from the a%reed

plan#) 'mith @ $o%an> cited above> at pa%e 103#*" = Aindlay> cited above> at pa%e +3#

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acts of another*1if he has dele%ated to that other person the performance ofthe statutory duty# 'econd> an employer may be held vicariously liablebecause acts done physically by his employee may> in law> be treated as theemployers act# an employer is not %enerally liable forthe acts of the employee performed in the course of employment under the

criminal law# 9n employer may> however> be held vicariously liable for thecriminal acts of an employee under the Gdele%ationH principle# In Allen v8hitehead>*,the act of the employee and his mens reawere both imputed tohis employer> not simply because he was an employee> but because themana%ement of the business had been dele%ated to him# *0 The rationaleseems to be that the employer is responsible for appointin% the employee andensurin% that no criminal offences are committed by the employee within thecourse of employment# If this were not the case> employers could easilyavoid prosecution by deliberately avoidin% personal ?nowled%e of ille%alactivities#*)

0#)0 There is thus a real possibility that a debt(collectors employermay be held vicariously liable for the ille%al acts of the debt(collector if thedebt(collector is %iven full conduct of the debt collection wor? and decisionsare dele%ated to the employee#

Cor"orat! l%a)%l%ty

0#)) Corporate liability stems from the le%al principle that acorporation is a le%al person# 9 corporation acts throu%h its controllin%officers whose acts and states of mind are imputed to the corporation

whenever they are actin% in their capacity as controllin% officers#**

Therefore>corporations may be liable for an offence which reFuires mens rea# There arecertain limitations on corporate liability> the ma/or one bein% that a corporationcan only be convicted of offences which are punishable with a fine# It hasbeen held that a corporation may not be indicted for manslau%hter or anoffence involvin% personal violence#*3 This was doubted in 'C. Haulage !td>*+

where 'table J thou%ht that Gif the matter came before the court today> theresult mi%ht well be differentH# The point has now been clarified in P 9 uropean (erries !td>*!which held that an indictment for manslau%hter wouldlie a%ainst a company#

*1 The other person may or may not be the employee# In !innett v Metroplitan PoliceCommissioner N1)3O &B ,"> one of two co(licensees was held liable for the acts of the otherin ?nowin%ly permittin% disorderly conduct in licensed premises#

*, N10"O 1 &B ,11#*0 'mith @ $o%an> cited above/at pa%e 1++#*) = Aindlay> cited above> at pa%e ++#** 9s above> at pa%e !!# 'ee also Meridian N1*O , 9C *"" 5C#*3

Cory 3ros !tdN1,+O 1 &B !1"#*+ N1))O &B **1#*! 61"7 0 Cr 9pp Rep +,# 9lso N11O Crim LR 3*#

00


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C#a"t!r 5

E%+t%&$ *%4%l r!/!(%!+ 'or a)u+%4!

(!)t *oll!*t%o&,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

C%4%l r!/!(%!+ 'or a)u+%4! (!)t *oll!*t%o&

)#1 If any person is wron%ed by abusive debt collection activities>that person may brin% civil proceedin%s see?in% civil remedies> which areli?ely to include dama%es and in/unctive relief# If a person suffers any

personal in/ury 6includin% physical or psycholo%ical in/ury7> pecuniary loss> ordama%e to property> that person has the ri%ht to claim compensation whichwould put him in the same position as he would have been in> if he had notbeen wron%ed# The in/ured person may also apply to court for an in/unctionrestrainin% the commission or continuance of the wron%ful act# 9n in/unction>however> cannot be demanded as of ri%ht> and one will not> in %eneral> be%ranted where dama%es would be a sufficient remedy# Civil claims may bebrou%ht under numerous heads> and those often applicable to debt collectionactivities are described below#

Tresp%ss to the person

)#, The tort of trespass to the person includes assault> battery andfalse imprisonment# This tort has its counterpart in the criminal law# In manysituations involvin% this tort> the claimant has the choice of see?in% redress intort> or under the criminal law or both#

)#0 The direct and intentional application of unwanted physicalcontact on another person may constitute the tort of battery#1 There is noreFuirement to prove that the physical contact caused or threatened anyphysical in/ury or harm# Examples of battery from some old cases include

touchin% another in a rude and offensive manner>,

spittin% in anothers face>0

throwin% water upon somebody>) or pullin% a chair from under anotherwhereby that person falls to the %round#*

)#) 9s for assault> it is an overt act indicatin% an immediate intentionto commit a battery> coupled with the capacity of carryin% that intention intoeffect#3 In other words> an assault is an act causin% reasonable apprehension

1 Cler? @ Lindsell> Torts/1+th edition at 1,("*#, Cole v Turner61+")7 3 =od 1)#0 . v Cotes$orth61+")7 3 =od 1+,#)

Pursell v Horn61!0!7 ! 9 @ E 3",#* Hopper v .eeve 61!1+7 + Taunt 3!#3 Cler? @ Lindsell> cited above> at 1,(1,#

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of a battery# Blac?stone defined assault as @an attempt or offer to beatanother/ $ithout touching as if one lifts up his cane/ or his fist/ in athreatening manner at another or stries at him but misses himB + 'almondand $euston too? the view that words alone probably did not constitute anassault because the intent to do violence must be expressed in threatenin%acts#! $owever> lanville illiams believed that @a verbal threat of immediateforce has all the essential elements of an assault/ particularly $here it isuttered $ith the intention of imposing a present restraint upon the conduct ofthe victim There is nothing in the #nglish decisions contrary to this vie$B

This view now has the support of the $ouse of Lords# 1" Threats may amountto assault not only when the plaintiff and the defendant are face to face> butalso over the telephone#11 In 8ong K$ai (un v !i (ung>1,a debt collectioncase> the defendant uttered threats of physical violence and death on variousoccasions includin% in the presence of the plaintiff and his family> on thetelephone and the intercom system# The defendant had struc? the plaintiffand members of his family on previous occasions# The court held that thethreats constituted actionable wron%s and amounted to assault# It is believedthat the emphasis on acts rather than words reflects the conditions of earlier

times when means of communication were more restrictive#10

1%lse imprisonment

)#* G9 false imprisonment is complete deprivation of liberty for anytime> however short> without lawful causeH#1) It appears that neither the use offorce nor any direct physical contact is necessary to constitute falseimprisonment> and neither is the plaintiffs present ?nowled%e of theconfinement# ell ?nown dictasupport this view:

@'t appears to me that a person could be imprisoned $ithout his

no$ing it ' thin a person can be imprisoned $hile he isasleep/ $hile he is in a state of drunenness/ $hile he isunconscious/ and $hile he is a lunatic &f course/ thedamages might be diminished and $ould be affected by thequestion $hether he $as conscious of it or notB1*

)#3 These dicta were approved obiter by the $ouse of Lords inMurray v Ministry of Defence13 and by the $i%h Court of $on% &on% inAttorney 1,"#! 'almond @ $euston> !a$ of Torts> 6,"th edition7 at pa%e 1,+# lanville illiams>Assault and 8ords> 61*+7 Criminal L Rev ,1> ,,)#1" . v 'reland 9 3ursto$> N1!O 9C 1)+> per Lord 'teyn at 13,#11 3arton v ArmstrongN13O , .'R )*1#1, N1)O 1 $&C *)#10 - & 'rivastava @ 9 - Tenne?one> The !a$ of Tort in Hong Kong> 1* at pa%e *3#1) Cler? @ Lindsell> cited above> at 1,(1+#1* Meering v


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8rdinance 6Cap 0!07#1

6eme+ies for %ss%ult, ?%tter& %n+ f%lse imprisonment

)#! Aor assault and battery> if no actual in/ury has been caused> onlynominal dama%es can be awarded# If some actual physical in/ury has beencaused> dama%es will be assessed in accordance with law# If a plaintiff hassuffered humiliation and ridicule caused by the defendants intentional act orconduct> a%%ravated dama%es may be awarded in addition to dama%es for theactual in/ury#," 9ssessin% dama%es may be problematic since Fuantum is notas easily determinable as for personal in/ury and dama%e to property# In8illiam Alan Terence Cra$ley v the Attorney ,1 for example> thou%hthe plaintiff did not suffer any physical in/ury> the manner of his arrest washumiliatin%> and he was awarded $&M)>*"" as dama%es> after ta?in% intoaccount in/ury to his reputation and humiliation#

)# ith re%ard to false imprisonment> dama%es are %iven tovindicate the plaintiffs ri%hts even thou%h no pecuniary dama%e has beensuffered#,, In exceptional cases> the courts will issue an in/unction to restrainfuture assaults#

Bntention%l ph&si$%l h%rm other th%n tresp%ss to the person /Bntention%l infli$tion of emotion%l +istress

)#1" The tort of intentional infliction of physical harm other than trespass

to the person is illustrated in the case of 8ilinson v Do$nton#,0

The tort coversany act or statement of the defendant which is intended to cause physical harm tothe plaintiff and which in fact causes illness or in/ury# ri%ht J said:

@the defendant has $ilfully done an act calculated to causephysical harm to the plaintiff 4 that is to say/ to infringe her legalright to safety/ and has in fact thereby caused physical harm toher That proposition $ithout more appears to state a goodcause of action/ there being no %ustification alleged for the actB*G

)#11 8ilinson v Do$nton was applied by the Court of 9ppeal in

1 9rticle *617 : @#veryone has the right to liberty and security of person 1o one shall besub%ected to arbitrary arrest or detention 1o one shall be deprived of his liberty e=cept on suchgrounds and in accordance $ith such procedure as are established by la$B 9rticle *6*7:@Anyone $ho has been the victim of unla$ful arrest or detention shall have an enforceable rightto compensationB

," .ooes v 3arnardN13)O 9C 11,#,1 N1!+O $&LR 0+#,, Cler? @ Lindsell> cited above> at 1,(!"#,0 N1!+O , PB *+# The case involved a practical /o?e in which the defendant falsely

informed a woman that her husband was badly in/ured in a traffic accident# The womansuffered serious nervous shoc? which affected her for wee?s# It was held that the defendantwas liable on the %round that where a person ma?es a false statement which is intended to be

acted on> he must ma?e %ood dama%e naturally resultin% from its bein% acted on# 9n ob/ectivetest is applied to determine the defendants intention#

,) 9t *!(*#

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?anvier v S$eeney#,* This case involved private detectives see?in% letters fromthe plaintiff falsely accusin% her of bein% in correspondence with a erman spy#The plaintiff suffered severe nervous illness> and the defendants were heldliable even thou%h they could not have foreseen the illness and had no motiveto cause that illness# The decision was based on the fact that the defendants

had intentionally conducted themselves in such manner as to terrify andfri%hten the plaintiff and they would be presumed to have intended the naturalconseFuences of their conduct#

)#1, In 3urnett v ,3the plaintiff was relentlessly harassed by aformer boyfriend# It was held that an in/unction to restrain harassment bytelephone calls should only be %ranted if there was evidence that the health ofthe plaintiff was bein% impaired by molestation or interference calculated tocause such impairment# In the more recent case of Khorasandi%an v 3ush>,+

the Court of 9ppeal held that harassment not amountin% to a threat butcausin% or li?ely to cause physical or psychiatric illness to the victim could be

restrained quia timetby in/unction#

)#10 =ere shoc?> fear or mental sufferin% is not enou%hD someoutward and physical result of that emotion> for example> illness resultin% fromnervous shoc? is reFuired#,! In the 9ustralian case of 3radley v 8ingnut(irms !td>,the plaintiffs sou%ht an in/unction to restrain the publication of afilm> which was described as a Gcomedy horrorH and which showed thetombstone mar?in% the plaintiffs family burial plot# The plaintiffs alle%ed thatthey were Gshoc?ed and upsetH by the tombstones association with the film>especially %iven the films extreme and sometimes offensive nature# Thecourt held that a cause of action for intentional infliction of emotional distress

reFuired a plaintiff to establish somethin% more than a transient reaction ofemotional distress> however initially severe# That reaction must translate intosomethin% physical> and the plaintiff had to show that the defendant hadwilfully done an act calculated to cause physical harm to the plaintiff and toshow that the shoc? and illness were natural conseFuences of the wron%fulact or default#

)#1) In Alcoc v Chief Constable of South :orshire Police>0"whichconcerned a claim for ne%li%ence> the $ouse of Lords stated that in order toestablish a claim in respect of psychiatric illness resultin% from shoc?>somethin% more than purely mental distress is reFuired#

)#1* In the $on% &on% case of 8ong K$ai (un v !i (ung>01the plaintiff

,* N11O , &B 013#,3 N1,O 1 A#L#R# *,*#,+ N10O PB +,+# In this case> the plaintiff> whose friendship with the defendant had

bro?en down> claimed in/unctive relief in respect of her complaints that the defendant hadassaulted her> made threats of violence a%ainst her> and pestered her with unwanted phonecalls# To the extent that this case developed the tort of private nuisance to protect someonewithout an interest in the land affected> it was overruled by the $ouse of Lords in Hunter vCanary 8harf !tdN1+O , LR 3!)#

,! Cler? @ Lindsell> cited above> at 1,(1*#,

N10O 1 .QLR )1*#0" N1,O 1 9C 01"#01 N1)O 1 $&C *)#

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brou%ht an action for possession of the defendants residential premises on thebasis of an alle%ed sale and purchase a%reement# The defendant resisted theclaim on the %round that the property was put up as security for anunenforceable money lendin% transaction in which the rate of interest amountedto )"" per annum# 8ne of the issues was whether dama%es or exemplary

dama%es should be awarded in view of the lenders repeated threats of violenceto him and his family which caused the defendant to attempt to commit suicide#The defendant felt a stron% sense of %uilt towards his family whom he believedwould be ?illed# 9fter writin% a note to the plaintiff reFuestin% him to spare hischildren> the defendant attempted suicide by swallowin% a whole bottle of about1"" sleepin% pills mixed with deter%ent and coca cola# 9lthou%h the defendantslife was saved> he made another attempt at suicide and had to under%opsychiatric treatment from 1!+ to 11# The court applied 8ilinson v Do$ntonand ?anvier S$eeney> and held that dama%es were payable since thereFuirements of the tort were met : the threats of violence by the plaintiff and hisa%ents or servants were calculated to be believed by the defendant who had a

reasonable basis to believe that the threats would be carried out> and thedefendant did suffer fear and depression as a result# ith re%ard to the Fuestionof whether exemplary dama%es should be awarded> the court found that theplaintiff> with a cynical disre%ard for the defendants ri%hts> had calculated that theexcessive interest to be made out of his wron%doin% would probably exceed thedama%es at ris?> which interest the plaintiff ?new to be unenforceable and ille%al#The court also found that> alternatively> the plaintiff sou%ht to %ain at the expenseof the defendant his residential property> which the plaintiff coveted> and which hecould not obtain or could not obtain except at a price %reater than he wasprepared to pay# The court applied .ooes v 3arnard>0,and held that it was anapt case for exemplary dama%es to be awarded so that the plaintiff and people

li?e him would be apprised of the policy and attitude of the court in dealin% withsuch torts#

Tresp%ss to $h%ttels

)#13 If a debt collector dispossesses the plaintiff of his chattel ordama%es it> he may be liable for trespass to chattels# The act of thedefendant must be intentional> and there is no liability for accidental acts#00

8n the other hand> the defendant may still be liable even he does notappreciate that his interference is wron%ful# If a defendant uses a chattel>

erroneously believin% that it is his> his act would still constitute trespass tochattels#0)

)#1+ If a plaintiffs %oods are destroyed or disposed of by thedefendant> the plaintiff is entitled to recover the full value of the %oods# 0* Aullvalue is mar?et price or the cost of replacement#03 If a plaintiffs %oods aremerely dama%ed but not destroyed> the normal measure of dama%es is the

Documents

The Regulation of Debt Collection Practices