LIBERTARIAN INVESTMENTS LTD v. THOMAS ALEXEJ HALL

CACV 54/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 54 OF 2011

(ON APPEAL FROM HIGH COURT ACTION NO. 2533 OF 2006)

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REASONS FOR JUDGMENT

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1.  This is an application by the Defendant for a stay of execution pending appeal.  At the conclusion of the hearing on 8 April 2011, I ordered a stay on terms and indicated that I would give brief written reasons shortly.   

2.  On 25 February 2011 Stone J gave judgment in favour of the Plaintiff, ordered the Defendant to pay the Plaintiff a sum of £5,474,247.35 with interest within 21 days, and gave directions for the Defendant to render an account and other ancillary matters.

3.  The Defendant first sought a stay from Stone J but after a hearing on 28 March 2011 the judge dismissed the application giving reasons the following day.  It would appear that the judge was persuaded by the Plaintiff not to grant a stay on the grounds that a statutory demand had been served on the Defendant.  The judge took the view that the matter was from then onwards within the jurisdiction of the Bankruptcy Court and that it would not be appropriate for him to grant a stay of execution. 

4.  For my part I have considerable reservations about that view, but it is not necessary or desirable for me to decide it as the parties have not addressed me on the issue, it being now common ground that the Defendant should have a stay of execution conditional upon payment to the Plaintiff’s solicitors of a sum of £6,357,762 by 28 April 2011, such sum to be retained in their client account pending disposal of the appeal. 

5.  The parties did not however agree to a Consent Summons as they were unable to agree on the following clause:

“(2) The Defendant shall disclose to the Plaintiff the source of the payment and, if payment is to be made by a third party, the terms upon which the payment is to be made”.

There was disagreement on the date by which such disclosure should be made and the impact it would have on the stay.

6.  Whilst the Plaintiff explained that the clause was inserted due to the worldwide Mareva injunction they had obtained against the Defendant, I took the view that its inclusion in a Stay of Execution order would actually create more problems.  Disclosure of what may be considered to be a suspect source or uncertain terms of payment might well present the Plaintiff’s solicitors with a dilemma whether they should accept that payment at all.  That would lead to uncertainty and dispute between the parties whether the stay of execution order has taken effect.  It is well-established that court orders should be clear and an order should not leave the parties in any difficulties with whether it has been complied with or not.  Accordingly in the exercise of my discretion, I struck out that clause, so that the Order for Stay of Execution is as follows:

“ 1. There be a stay of execution of paragraph 1 of the Amended Judgment of the Honourable Mr Justice Stone dated 25^th February 2011 on the following terms:-

(1) The Defendant shall on or before 28^th April 2011 pay to the Plaintiff’s Solicitors, Messrs Haldanes, the sum of GBP6,357,762.00 on Messrs Haldanes’ undertaking that such sum shall be retained in their client account pending disposal of the Defendant’s appeal to the Court of Appeal;

(2) In the event that the sum of GBP6,357,762.00 is not paid in full to Messrs Haldanes by close of business on 28^th April 2011, the stay will be lifted immediately;

(3) If and so far as further sums are ascertained to be payable by the Defendant to the Plaintiff under the terms of the Amended Judgment of the Honourable Mr Justice Stone dated 25^th February 2011 before the determination of the Defendant’s appeal to the Court of Appeal (whether by reason of the taking of the account ordered in paragraph 3 of the Amended Judgment or by reason of the taxation of the Plaintiff’s costs of the action) the Defendant shall pay such sums to the Plaintiff’s Solicitors, Messrs Haldanes, on Messrs Haldanes’ undertaking that such sum shall be retained in their client account pending disposal of the Defendant’s appeal to the Court of Appeal.

2. The costs of this application be to the Plaintiff, the taxation of such costs to be on the party and party basis if not agreed, and payment thereafter forthwith.

3. There be liberty to apply.”

7.  This being a simple application, I declined to order a certificate for two counsel.