CHINA EVERBRIGHT HOLDINGS CO. LTD. v. HUNG FUNG HOLDINGS LTD. (IN LIQUIDATION) AND OTHERS

HCA 10150/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 10150 OF 2000

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D E C I S I O N

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1. This is an application for a stay of execution of an order by which I refused an extension of time to the 2nd to 6th Defendants for the filing of an appeal from a Master's order granting summary judgment against them.

2. It has been submitted today by Mr Wong, on behalf of the 2nd to 6th Defendants, that first of all, the Defendants have no means to pay the judgment granted by the Master which was in the sum of $45 million odd. However, as has been pointed out by Mr Ng, there has been no affidavit put before the court at any stage of the means of any of the 2nd to 6th Defendants. In this regard, I refer to Fung Wai Kwong William v. Insider Dealing Tribunal [2001] 1 HKC 44 at page 49 in which the Court of Appeal said that in the absence of an affidavit of means the Court of Appeal in that case saw no basis for delaying execution. In the present case, one cannot assume that the Defendants would be unable to pay when the Defendants have chosen not to put forward any evidence as to their means.

3. The second submission made by Mr Wong was that the Defendants say that they have good grounds for appealing. All I can say at this stage is that the Defendants have not filed a Notice of Appeal so that I could not, today, see what grounds of appeal they say they have. From what Mr Wong submits, he says that they have been advised by counsel that the Defendants have raised a triable issue, in that there should not have been reliance on the documentary evidence, but that there should be cross-examination of persons who were present at a meeting.

4. In my view, although I understand that in the absence of properly formulated grounds of appeal, there is a limit as to how much Mr Wong could submit today, that does not appear to me to be strong grounds for appealing.

5. The third submission made by Mr Wong was that the Defendants would suffer loss which could not be compensated by damages because a statutory demand has already been served against the 2nd Defendant and steps have been taken to serve statutory demands on the 3rd to 6th Defendants. Mr Wong submits that absent an order for stay of execution, the 2nd Defendant would commit an act of bankruptcy when the period of paying the statutory demand lapses and then he may well be in line to receive a petition for bankruptcy which would cause him substantial loss of reputation.

6. However, if the Defendants truly are without means to pay, it seems to me that the appropriate course would be for them to apply to the Bankruptcy Judge to stay the petition in order to stave off this loss of reputation and it would then be in the discretion of the Bankruptcy Judge whether to grant the stay of the petition pending the appeal from my order.

7. In the circumstances, I see no or no sufficient grounds to grant a stay of execution of my order. It has been well established that the court does not make a practice of depriving a successful litigant of the fruits of his litigation and locking up funds to which prime facie he is entitled.

8. In my view, therefore, in the exercise of my discretion, I see no special circumstances in this case which would lead to the grant of a stay of execution and accordingly, I would dismiss paragraph 1 of the summons issued 2 May 2002.