XCHRX GOBIND MOHAN v. ROBERTSON DOUBLE formerly known as ROBERTSON DOUBLE & BOASE (a firm)

1995, No. A7754

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. In another action, one by the defendant in the present action (Robertsons) against the plaintiff in the present action (Mohan), and others, (1985 MP 35), Robertsons hold a certificate of costs dated 16 July 1985 in the sum of $155,348.40. This, it is accepted, is equivalent to a judgment for this sum. In seeking to recover under this certificate, Robertsons obtained an order for the examination of Mohan, which is to take place on 31 August 1995. On 8 June 1995, Mohan sought an order from Master Jones under Order 42 "that all further proceedings in this action by (sic) stayed on the grounds that terms of settlement have been agreed between the parties". Master Jones found the summons misconceived because, as I understand him, he could not order a stay of proceedings that were no longer in existence, they having ended with the certificate of costs. The Master suggested that Mohan could seek a declaration that the judgment debt had been discharged, and, once Mohan had issued a writ for that purpose, he could apply for an interim stay of execution.

2. Mohan accepted this suggestion, commenced proceedings seeking such a declaration on 2 August 1995, and, on 10 August 1995, issued a summons seeking a stay of the order for the examination of Mohan until trial or further order.

3. The power to stay is contained in Order 45, rule 11, which says -

". . . a party against whom a judgment has been given or an order made may apply to the Court for a stay of execution of the judgment or order or other relief on the ground of matters which have occurred since the date of the judgment or order, and the Court may by order grant such relief, and on such terms, as it thinks just."

4. It appears from Mohan's statement of claim that it is alleged that the settlement between the parties was agreed "in or about June 1986"; that is, after the certificate of costs was granted.

5. Two cases have been cited to me on the operation of Order 45, rule 11. One, a decision by the late Hunter J., in Tam Ho Man v Wong Kwok Tai (1985, No. A 4736; unreported), deals with a situation in which, after judgment had been entered, the plaintiff issued a bankruptcy notice against the defendant, and the defendant sought a stay of execution upon the basis that the defendant would pay the judgment debt by instalments. Hunter J. said, at page 2 -

"All the examples given are matters which go to the question of the validity of that judgment as against that defendant. They are very far removed from matters which go to the enforcement of that judgment e.g. the giving of a notice of bankruptcy. Those passages in Bouvier certainly have served to confirm my initial impression on reading the rule. 'On the ground of matters which have occurred since the date' refers to matters which go to the validity of the judgment, and which if established before the court, might justify the court in saying that, this is not a judgment which on the material now placed before it, it will allow to be executed upon."

6. The other case is London Permanent Benefit Building Society v de Baer 1968 1 Ch 321. In that case, Plowman J. held that the fact that defendant had 'now put his affairs in order and made arrangements to pay off the arrears and to comply with his obligations . . . duly and promptly' did not give a ground for a stay of execution because it was implicit in the rule that 'the matters referred to are matters which would or might have prevented the order being made, or would or might have led to a stay of execution if they had already occurred at the date of the order.'.

7. Those two cases say, as I understand them, that the ground to justify a stay or other relief must be such that, if it had arisen before the judgment or order was granted, would have persuaded the court not to grant the judgment or order, or, if it did grant the judgment or order, to grant a stay or other appropriate relief. That was not the case on the facts before Hunter J. or Plowman J.. There the defendants were pleading for a mitigation of the consequences of the judgments, not because of anything that might have persuaded the courts not to grant the judgments, but because of personal factors that might have raised the sympathy of the judges, but no more; they could not have said to the plaintiffs - 'I will not give you judgment because this will have a disastrous effect on the defendant' or 'I will not give you judgment because the defendant has now assured me that he will comply with his obligations in future.'

8. The situation before me is different. Here, Mohan says, in effect, that, after the judgment had been entered against him, he 'paid' the judgment debt; he waived claims against Robertsons and they waived claims against him. If this alleged negotiated settlement had arisen before the judgment, it would have been a ground on which to refuse judgment. A court would not enter judgment ordering a party to pay a sum of money that had already been paid, or was no longer due.

9. Accordingly, I find that, under Order 45, rule 11, I have jurisdiction to grant the relief claimed.

10. But, says Mr Scott, the question of whether or not there should be a stay has already between litigated between the parties before Master Jones. What was claimed before Master Jones, and what he refused to grant, was a stay of the proceedings in the matter culminating in the certificate of costs, because he could not stay proceedings which had already come to an end. What he did not decide, and expressly did not decide, was whether or not there should be a stay of execution or other relief under Order 45, rule 11. It may that this issue could have been litigated and decided by Master Jones if the summons had been amended, but this was not done. It cannot be said therefore, in my view, that the issue before me has already been litigated and decided.

11. Having decided that I have jurisdiction to grant a stay, and that the earlier matter before Master Jones does not prevent this, the question remaining is whether or not I should exercise my discretion in this way.

12. There appears to be no authority on the way in which the courts should exercise their discretion in respect of applications under Order 45, rule 11. It appears to me that it is appropriate to apply the same principles here as are applicable to cases of applications for stay pending appeal. The situation is broadly the same; the plaintiff has a judgment, the defendant is saying that the judgment is not 'right', but has yet to establish this. Accordingly, I proceed on the basis that I should not order a stay unless there are good reasons for doing so. The courts should not 'make a practice of depriving a successful litigant of the fruits of litigation', and this applies to proceedings ancillary to execution, such as, in this case, examination of the judgment debtor. Generally, the courts will grant a stay where otherwise the appeal, or, in this case, the proceedings to establish that the judgment debt has been 'paid', would be rendered nugatory. In the case before me, there is no evidence at all of what prejudice Mohan will suffer, if any, if the examination proceeds. I cannot see that his proceedings to establish his case would be rendered nugatory, and no other good reasons have been established. The only point made is a suggestion from Mr Francis that Mohan will be obliged to disclose information he would not otherwise be obliged to disclose, and once disclosed, this information cannot be withdrawn if he is successful in showing that the judgment against him was 'wrong'. He says that it may be that Mohan is involved in commercial transactions that he would prefer to keep to himself, and which may be affected if details of them are generally known. But, as I say, there is no evidence of this. If it is so that Mohan is anxious to avoid examination for the reasons advanced on his behalf, rather than a desire that Robertsons should not know where his assets are, the remedy lies in his own hands. The purpose of the examination is to establish the whereabouts of assets sufficient to satisfy the judgment debt and costs. If the whereabouts of those assets are known, and secure, there is no need for the examination. Mohan can achieve this situation by paying the appropriate sum into court. This would not prevent Robertsons from proceeding to execute against this money in the absence of a stay of execution. To avoid that, Mohan would have to show that there are good reasons why that execution should not proceed, but that matter would involve different considerations and is not before me.

13. I do not think Mohan has established any solid factual basis for persuading me that I should exercise my discretion to grant a stay. The only aspect of this case that leans in that direction is the long delay by Robertsons in seeking to recover under the certificate of costs; from July 1985, when the certificate was given, to June 1992, when Robertsons decided to proceed - some 7 years. In a balancing exercise, this may be some basis for granting the stay, but only on terms, including payment into court and directions to put Mohan's action on a 'fast-track'. I will hear further argument on this, unless the indications I have given enable the parties to reach agreement.