WONG WAH ON v. TSUNG TSIN ASSOCIATION AND OTHERS

HCMP 2056/2018

[2019] HKCFI 1442

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2056 OF 2018

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D E C I S I O N

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1.  This is an application by the 2^nd to 10^th respondents (“R2 – R10”) for leave to appeal against my order of 15 May 2019 dismissing their summons dated 26 April 2019 for an interim stay of execution of the Order made by Harris J on 10 January 2019, whereby the learned Judge made a Declaration that the petitioner (“P”) and other members of the New Executive Committee form the current Executive Committee of the Association and ordered R2 – R10 to within 14 days hand over the corporate records and documents of the Association to P and to the Principal Business Address of the Association (“Order”).

2.  As can be seen from the Decision of Harris J given on 10 January 2019, the learned Judge was satisfied that the EGM of the Association had been duly convened in accordance with the articles of association, the notices of the EGM were duly served and the quorum was present at the EGM, and the resolutions reconstituting the board were duly passed on a show of hands.

3.  The principle governing an application for leave to appeal against an interlocutory order is well established.  It is for the applicant to satisfy the court that the proposed appeal has a reasonable prospect of success or that there is some other reason in the interests of justice why the appeal should be heard (SMSE v KL [2009] 4 HKLRD 125 at §17 per Le Pichon JA).

4.  Where, as here, an applicant is seeking to appeal against an exercise of discretion in refusing to grant an interim interim stay of execution of the Order, it has to be shown that the judge exercised the discretion under a mistake of law or in disregard of principle or under a misapprehension as to the facts or that he took into account irrelevant matters or failed to exercise his discretion or the conclusion which the judge reached in the exercise of his discretion was “outside the generous ambit within which a reasonable disagreement is possible” (Hong Kong Civil Procedure 2019, §59/0/54).

5.  In the draft Notice of Appeal, two grounds of appeal are raised.  

6.  Under the first ground, it is said that this court erred in law in holding that the court has no jurisdiction to stay execution of the Order under Order 45 rule 11 or the inherent jurisdiction of the court.  I do not think this ground has any prospect of success, for the following reasons.

7.  First, the suggestion that it was my holding that the court has no jurisdiction to order a stay under Order 45 rule 11 or inherent jurisdiction of the court is plainly wrong.  As is apparent from the brief reasons I gave during the hearing on 15 May 2019, I had considered R2 – R10’s application for interim interim stay under Order 45 rule 11 as well as inherent jurisdiction of the court.

8.  I had taken into account the fact that R2 – R10 had not applied to set aside the Order within seven days, being the time limit for setting aside a judgment made in the absence of a party under Order 35 rule 2.  It was only until 4 March 2019 that R2 – R10 belatedly issued a summons to set aside the Order and in the same summons, asked for an interim stay of execution of the Order pending determination of the summons.  The summons is returnable on 24 July 2019 before Harris J with 30 minutes reserved.  There was no explanation for the delay in making the setting aside application.

9.  I had taken into account the substantive point raised by R2 – R10 in support of their application for interim interim stay, that is, their former and current solicitors had misunderstood the need to represent them at the first hearing of the petition and, as a result, neither firm appeared at the hearing before Harris J on 10 January 2019.  This was self-evidently not a “new evidence” which had arisen after the Order, as required by an application made under Order 45 rule 11 (Tam Ho Man v Wong Kwok Tai HCA 4736/1985, 20 October 1986, p 2, per Hunter J (as he then was), as applied by the Court of Appeal in Credit Lyonnais v SK Global Hong Kong Ltd [2003] 4 HKC 104 at §§4 – 5).  For this reason, I did not accept R2 – R10’s contention that this was an appropriate case for the court to grant an interim interim stay under Order 45 rule 11.

10.  I had also considered R2 – R10’s alternative submission that even if the court considers the point raised by R2 – R10 does not fall within the purview of Order 45 rule 11, the court still has inherent jurisdiction to grant a stay, relying on Garry Law Man Kai & anor v Austciti Property LtdHCA 14750/1998, 6 November 1998, p 2.  I took the view that it appeared from Credit Lyonnais, in particular the discussion in §§5 – 6, that the court does have inherent jurisdiction (in addition to the jurisdiction under the relevant rules) to grant a stay of execution; and in exercising such jurisdiction, the court should approach the matter having regard to its exceptional nature, given that the court is being asked to deprive a successful party of the fruits of the judgment he has obtained.  I had considered, but was not satisfied, that R2 – R10 had shown any exceptional circumstances to justify the court granting an interim interim stay of the Order.

11.  As to the second ground of appeal, it is said that because R2 – R10 had not entered appearance in the petition nor attended the hearing on 10 January 2019, but have since entered appearance and issueda summons to set aside the Order, the court “shall have jurisdiction” under Order 45 rule 11 and inherent jurisdiction to stay the Order.  This ground is a mere repetition of the first ground and adds nothing.  I am unable to see how this ground has any reasonable prospect of success.

12.  Nor do I consider there is any other reason in the interest of justice as to why the appeal should be heard, given that the question raisedin the first ground of appeal was not the basis of my decision in dismissing the application.

13.  Mr Ernest Koo also submits that without a stay of the Order, the summons to set aside the Order would be rendered nugatory.  This was not a ground advanced in support of R2 – R10’s application for interim interim stay of the Order.  Nor is there any evidence in support of such submission.  Indeed, given that the Order only requires R2 – R10 to hand over the Association’s records and documents to the New Executive Committee and to the Principal Business Address of the Association, all of which are property of the Association, I am unable to see how a refusal to stay execution of the Order would render the summons to set aside the Order nugatory.

14.  For all these reasons, I dismiss R2 – R10’s summons for leave to appeal against the order made on 15 May 2019.  I now hear the parties’ submissions on costs.

(Submissions on costs)

15.  I order R2 – R10 to pay the costs of and occasioned by the summons for leave to appeal on a party to party basis, to be paid forthwith.  I assess the costs of the application for leave to appeal at $45,000.