FBC CONSTRUCTION CO LTD v. BIG ISLAND CONSTRUCTION (HK) LTD

HCA1363/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1363 OF 2008

--------------------------

----------------------

----------------------

D E C I S I O N

--------------------

1.  By a decision handed down on 25 March 2009 I granted the defendant leave to defend, following an Order 14 application by the plaintiff, conditional upon a payment into court of the claimed sum of HK$2,698,102.

2.  By this application the defendant seeks a stay of my order imposing the condition pending an appeal against it.  The defendant’s position is that leave to defend should have been granted unconditionally.

3.  After hearing and considering brief but helpful submissions from Mr Malcolm Kemp for the defendant and Mr Lawrence Ng for the plaintiff I have decided to decline the application for a stay for the following reasons:

(1)  No evidence has been adduced to indicate that the appeal against the imposition of a condition will be rendered nugatory if the stay is not granted.  Other than Mr Kemp informing the court that “it would be difficult” for the defendant to comply with the condition there is no other evidence of the defendant’s financial circumstances.  Ma J (as he then was) in Star Play Development Ltd v Bess Fashion Management Co. Ltd [2007] 5 HKC at p.88 observed:

“… whatever the nature of the order or judgment appealed from, the court will still require good evidence as to why an appeal will be rendered nugatory in the event of a stay not being granted. …”

(2)  The payment of the money into court is the price the defendant pays for his day in court in all the circumstances of this case.  Should he appeal successfully against the condition it will be returned pending trial.  Should he appeal unsuccessfully against the condition but is successful wholly or in part at trial, the payment will again, wholly or in part, be returned.  In either event, there is no risk to the defendant whilst the litigation unfolds.

(3)  Mr Kemp submits that his reliance on the Limitation Ordinance is a “complete defence” to the claim and as such the condition should not have been imposed.  Whether or not it is “a complete defence” is a matter for the trial judge.  All that can be said at this stage is that if the limitation argument succeeds it will be a complete answer to the plaintiff’s claim.  If by a “complete defence” Mr Kemp means an “all or nothing” defence, I agree; if he means an “unanswerable” defence, I do not agree.  I have considered the merits of that defence in my original decision and having weighed it in the balance concluded that in all the circumstances of this case, the imposition of a condition was appropriate. 

(4)  Similarly, Mr Kemp’s submissions with regard to the defendant’s counterclaim really amount to a repetition of the arguments advanced at the original hearing.  I do not think it is necessary to repeat my observations on this application. 

(5)  It is further submitted that having conceded in my original judgment that the ultimate amount of the defendant’s indebtedness to the plaintiff could be less than the full amount claimed a condition requiring the full amount should not have been made.  I do not think that there is any merit in this contention because the payment is to be made into court.  As already stated, if the plaintiff is only partly successful at trial the balance will be returned.

(6)  The test in deciding whether a stay should be granted is whether there are strong grounds for the proposed appeal (against the imposition of a condition).  It is a higher hurdle than that imposed when considering the chances of success for the purpose of deciding whether or not to grant leave to appeal.  I am not persuaded that the test has been met.  To elaborate further would involve a repetition of my original decision.

4.  Thus, the application for a stay pending appeal is refused.  The original deadline for the payment in was 15 April 2009.  That has now passed.  I accept from Mr Kemp that the defendant may find it “difficult” to make the payment in.  I am therefore prepared to grant an extension of time.  I will allow a further 21 days from the date of handing down this decision.

5.  The costs of this application shall be to the plaintiff in any event.