TANG WAI YEE, SYLVIA v. HE SHIMENG AND ANOTHER

HCSD 24/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

APPLICATION TO SET ASIDE A STATUTORY DEMAND
NO. 24 OF 2002

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D E C I S I O N

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Background

1. The Respondents are judgment creditors who obtained judgment by default against the Applicant and her employer in HCA No. 1261 of 2002. The Applicant's and her employer's application to set aside that judgment was refused by Master de Souza on 20 September 2002. Their appeal was also dismissed by Deputy High Court Judge Fung on 29 January 2003 who also refused their application for stay of execution. On 5 March 2003, they appealed to the Court of Appeal under CACV No. 53 of 2003.

2. In the meantime, the Respondents served a Statutory Demand on the Applicant on 25 June 2002 in respect of the judgment debt. The Applicant applied to set aside the Statutory Demand. On 27 March 2003, I dismissed her application and granted leave to the Respondents to present bankruptcy petition forthwith and costs against the Applicant. The Applicant now applies for a stay of execution of that order.

Applicant's grounds for stay

3. The Applicant's grounds are essentially the same as those advanced before me at the time of hearing her application to set aside the Statutory Demand, namely that the judgment was obtained by default and she does not admit the debt. She said that she had to look after her aged parent and had no funds to engage the services of a solicitor. She accused her former solicitors of failing to handle her case properly for lack of funds, but she said that funds would soon be available and she would have a good chance of success on appeal. She submitted that if she should succeed in her appeal, the Statutory Demand issued against her would be of no effect, but her life and business would be ruined if the Respondents were allowed to proceed with the bankruptcy petition. She referred me to the notice of appeal filed in CACV No. 53 of 2003. However, she was unable to refer me to any evidence or facts in support of the chance of her success in the pending appeal. As a matter of fact, those grounds have been considered by me when I refused her application to set aside the Statutory Demand. She had no new grounds to offer.

4. In dismissing her application to adjourn the hearing of her application to set aside the Statutory Demand on 27 March 2003, I referred to the history of her delay in the proceedings. I held that her application for adjournment would operate as a stay of execution of HCA No. 1261 of 2002 and that if she wished to have a stay of execution of that action, she should apply for stay to the Court of Appeal. I said in paragraph 3 of my decision:

"... Order 59, rule 13(1) of the Rules of the High Court provides that except as otherwise directed by the court below or the Court of Appeal or a single judge of the Court of Appeal, an appeal shall not operate as a stay of execution. Her application for stay of execution having been dismissed by Deputy High Court Judge Fung, should she wish to have a stay of execution pending appeal, she should apply to the Court of Appeal or to a single judge of that Court. While she appealed against the decision of Deputy High Court Judge Fung, she took no steps to apply to the Court of Appeal for stay of execution. It would be an abuse of proceedings by seeking an adjournment of these proceedings thereby in effect obtaining a stay in the other proceedings when her application for stay of the proceedings had been dismissed. This offends the principle that a successful litigant should not be deprived of the fruits of his litigation: Winchester Cigarette Machinery v Payne (No.2), (unreported, 15 December 1993, English Court of Appeal)."

5. Her present application to stay my order of 27 March 2003 is to the same effect. She is seeking a stay of my order which would operate as a stay of execution of HCA No. 1261 of 2002. Despite my clear advice that she should apply to the Court of Appeal for that purpose, she deliberately shied away from the Court of Appeal and attempted yet a second time to obtain a stay of that action via the bankruptcy proceedings. This is an abuse of the process of the court. Such conduct should not be encouraged.

6. Order 59, rule 13(1) provides that an appeal shall not operate as a stay of execution. Unless good grounds are shown, no stay will be ordered. The minimum requirement an applicant has to show, among many other things, before a stay will be considered is that he has a reasonable prospect of success on appeal: see Star Play Development Ltd v. Bess Fashion Management Co Ltd, HCA No.4726/2001. At the hearing of her application to set aside the Statutory Demand, I found that she had no bona fide dispute to the judgment debt, i.e. no triable issue raised. In effect, that means on the basis of the same evidence, she would be unable to meet the higher standard of showing a reasonable prospect of success on appeal.

Conclusion

7. In my view, this application is an abuse of the process of court. The Applicant has failed to show any reasonable prospect of success of her appeal in CACV No. 53 of 2003 and hence failed to show good grounds for granting a stay of execution whether of my order or of the judgment in HCA No. 1261 of 2002. Accordingly, I dismiss her application for stay of my order of 27 March 2003 with costs to the Respondents. Such costs are to be taxed if not agreed.