XCHRX CHUNG FU HONG LTD. v. YICK FAT ENTERPRISE HONG KONG LTD.

HCA7328/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.7328 OF 1998

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D E C I S I O N

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1. The Defendant applies for a stay of execution of the judgment granted by the Master pending the appeal which is fixed to be heard on 13th September 1999. The judgment is based on four cheques drawn by the Defendant in the sum of slightly over $14 million.

2. The affidavit in support of the application states that the Defendant would be in financial ruin if execution is not stayed in that the Defendant is unable to meet the judgment sum without depriving itself of all its working capital and selling its stocks at an undervalue.

3. Different approaches had been expressed on how the Court should deal with applications of this type. The starting point must be that the judgment had been obtained against the Defendant and a litigant should not be deprived of the fruit of the judgment. On the other hand the appeal should not be rendered nugatory if successful. Financial ruin to an appellant, if the judgment is required to be paid before the appeal is heard, is clearly a factor to be considered.

4. The Defendant said that it was not legally represented due to some misunderstanding with its legal adviser and certain evidence was not adduced at the hearing before the Master. Up to date, no fresh affidavit has been filed by the Defendant on the merits of the case. I have to bear in mind that the judgment was based on dishonour cheques. Moreover, apart from making the statement that it would be in financial ruin, no disclosure is made by the Defendant of its assets and liabilities. If it wishes to ask the Court to exercise the discretion in its favour, it must provide the Court with materials so that the matter can be properly dealt with.

5. Having considered all these factors, I would decline to exercise my discretion in favour of the Defendant and the application is refused.