XCHRX LAM PING WAN AND ANOTHER v. IP LAM ON

HCA 12791/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 12791 OF 1999

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D E C I S I O N

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1. The background facts are set out in my earlier judgments of 29 December 1999 and 31 March 2000. I shall not repeat them here.

2. On the Defendant's application, Pang J. on 20 July 2000 ordered the 1st Plaintiff to pay into court additional fortification in the sum of $15,000,000 within 21 days from the date of the order, in default of which the 26,800,000 shares of 21CN CyberNet Corporation Limited (formerly known as Easy Concepts International Holdings Limited) be sold in the open market and the proceeds thereof be paid into court. He also gave liberty to apply.

3. The 1st Plaintiff's application before me today is, as Mr Kwong has conceded, on the primary complaint being that Pang J. should not have ordered additional fortification. That being so, the 1st Plaintiff's summons is misconceived. The matter must be taken to the Court of Appeal if the 1st Plaintiff wishes to pursue that primary complaint.

4. Unfortunately, the 1st Plaintiff has not yet lodged a notice of appeal against Pang J.'s order and I am told that they are now out of time. Mr Kwong, for the 1st Plaintiff, has, however, undertaken to me to file all necessary documents to proceed with an appeal against Pang J.'s order of 20 July 2000 by 4 p.m. on 17 August 2000, that is, by 4 p.m. tomorrow.

5. The only question now is whether or not time should be extended for the payment of the $15,000,000 ordered by Pang J. until after the Court of Appeal has dealt with the matter. I have to bear in mind that if the appeal should succeed, then the sale of the shares before the Court of Appeal has had a chance to deal with the matter would render any successful appeal nugatory.

6. I have to bear in mind that 1st Plaintiff is claiming the beneficial ownership of the shares and does not wish the shares to be sold. Whether the 1st Plaintiff or the Defendant beneficially owns the shares is a matter that has to be resolved at trial. It cannot be determined at this stage. However, in the interests of justice, I think that the 1st Plaintiff should be given an extension of time to comply with any order for additional fortification made by Pang J. until the result of the appeal and I so order. I notice that from the chart handed up by Mr Kwong to the Court, the shares have more or less stabilised at the current price of $1.28 since June. With the undertaking given by Mr Kwong, there is no reason why the appeal cannot proceed with due despatch.

7. It seems to me the proper course to adopt, as far as the Defendant's summons is concerned, is simply to adjourn it until after the Court of Appeal has dealt with this matter. If the Court of Appeal should uphold Pang J.'s order, there is no need for the Defendant to proceed with the summons as it would already have obtained an order for sale by virtue of the default of the 1st Plaintiff in paying the $15,000,000 into court. I simply adjourn the Defendant's summons sine die with liberty to restore the same after the Court of Appeal has dealt with this matter. I dismiss the 1st Plaintiff's summons.