PROFIT STEP DEVELOPMENT LTD AND ANOTHER v. SUN RISING DEVELOPMENT (AGRICULTURE) LTD AND ANOTHER

CACV 279/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 279 OF 2010

(ON APPEAL FROM HCA NO. 1649 OF 2008)

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Hon Le Pichon JA:

1.  This was an application by the first and second defendants for a stay of execution of the judgment of Fok J (as he then was) of 30 November 2010 whereby the first and second defendants were jointly and severally ordered to pay (with interest) the sum of $2.35 million to the first plaintiff and the sum of $1.25 million to the second plaintiff. At the adjourned hearing on 7 March 2011, I refused the application for a stay. My reasons appear below.

Background

2.  The application came before me in the following circumstances.  On 20 January 2011the first and second plaintiffs took out a summons for security for costs to be heard on 24 February 2011 with an estimated time of 30 minutes.  Belatedly, by summons dated 15 February 2011 but which was not filed until 17 February 2011, the first and second defendants sought a stay of execution.  The stay summons (with an estimated time of 30 minutes) was made returnable on the same date and time that had been allotted for the hearing of the security for costs application.

3.  At the hearing on 24 February 2011, Mr Kwok (who appeared for the defendants) submitted that as the outcome of the stay application would affect the security application, the court should hear the stay application first.  In my view, that submission was conceived: the security for costs application and the stay application address different matters and are not interdependent.  Neither one is contingent on the outcome of the other.  Further, it was clear that the defendants effectively were seeking to ‘hijack’ the plaintiffs’ appointment.  Parties should take note that the court deprecates and will not countenance such conduct.

4.  Having heard and disposed of the plaintiffs’ application, the court then proceeded to hear the defendants’ stay application.  The relevant chronology was as follows.  The judgment was handed down on 30 November 2010.  The plaintiffs immediately caused letters to be sent to the defendants demanding payment of the judgment debt.  The defendants did nothing for weeks, even after receiving the plaintiffs’ summons for security dated 20 January 2011.

5.  On 16 February an affidavit was filed opposing the security for costs application which was the first occasion that reference was made to an intended stay application and that it would be made to this court.  It would appear that the defendants were proceeding on the (erroneous) basis that the stay application was somehow relevant to the security for costs application.  That application went part heard and had to be adjourned to 7 March 2011.

Exceptional circumstances not shown

6.  The first matter to be addressed is whether there were exceptional circumstances to justify the making of the application directly to this court rather than to the court below as required by the Rules of Court.  In my view, it is clear that there were no such circumstances.  The stay application ought to have been made to the judge below in December 2010.  The defendants’ delay is inexcusable: it could not have been attributable to their misconception that the security for costs application could not be decided without first deciding the stay application since the summons for security for costs was only issued on 20 January 2011.

7.  In the ordinary case where no exceptional circumstances have been shown, the stay application would normally have been dismissed with the consequence that the application would have to be renewed before the judge.  In the circumstances of this case, the preferable and more efficient course in terms of economy of time and costs was that I should determine the application sitting as a single judge of the Court of Appeal.

Merits

8.  As regards the relevant background and dispute between the parties, reference should be made to the judgment below.  Although Mr Kwok sought to make four points in favour of the defendants’ application, they amounted to no more than different guises of a single point, that the proper parties to the dispute are Golden Harvest (Macau Commercial Offshore) Ltd and Cheong Lee International Trading Company Ltd who were the parties to the agreement dated 28 March 2008 which the judge found (at §101) to be binding rather than the parties to these proceedings.  But it is to be noted that the judge found that on 2 April 2008 the parties agreed to replace that agreement with other contractual arrangements.

9.  In fact, the defendants together with Cheong Lee had applied on 4 October 2010 to the judge for joinder of Cheong Lee and four other parties as defendants.  The judge refused the application on 8 October 2010 on the basis that it was made far too late and would upset a milestone date for the trial.  On 19 October 2010 he refused leave to appeal.

10.  Undeterred, the defendants and Cheong Lee made an urgent application to the Court of Appeal on 28 October 2010 for leave to appeal.  The application was heard by Tang Ag CJHC and Stone J as a matter of urgency the same afternoon.  As Stone J observed, in essence, the defendants were seeking to reconstitute the action.  Leave to appeal was refused for the reasons are set out in the judgments of Tang Ag CJHC and Stone J dated 28 October 2010 which I do not propose to rehearse here.  Suffice it to say that the joinder issue has been raised, considered and dismissed on two previous occasions.  Mr Kwok’s argument, far from showing that he has strong grounds of appeal, amounts to nothing more than that he should be given a third bite at the cherry.  Accordingly, leave was refused, no strong grounds of appeal having been shown.