GURDAS S CHOITHRAMANI v. THE HONGKONG AND SHANGHAI BANKING CORPORATION LTD

HCMP 2607/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 2607 OF 2014

(ON APPEAL FROM HCA 2073 OF 2011 AND HCSD 23 OF 2014)

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JUDGMENT

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Hon Yuen JA (giving the Judgment of the Court):

1. This is Mr Gurdas S. Choithramani’s application by summons filed on 21 October 2014 for leave to appeal out of time two orders made by Deputy Judge Wilson Chan on 18 September 2014 in HCA2073/2011 and HCSD23/2014 (heard together).

2. The salient facts are as follows.  In 2011 Mr Choithramani, a bankrupt, commenced HCA2073/2011 (“the 2011 Action”) against HSBC (“the bank”) in respect of matters that had occurred prior to his bankruptcy. 

The bank’s application to strike-out the 2011 Action

3. On 17 July 2012 the bank issued a summons to strike out the 2011 Action (“the strike-out application”) on a number of grounds.  One of the grounds was that Mr Choithramani had no locus standi to pursue the claims, because the claims were a chose in action which is property that had vested in his trustee in bankruptcy, the Official Receiver (“OR”).

Mr Choithramani’s applications to adjourn the strike-out hearing

4. On 14 April 2014 Mr Choithramani applied to Au-Yeung J to adjourn the hearing of the strike-out application so that he could negotiate with the OR for the chose in action to be assigned to him.  On 16 April 2014, the judge dismissed his application.  There was no appeal from this decision.

5.1.    On 20 April 2014 Mr Choithramani applied again to adjourn the hearing of the strike-out application.  This adjournment application was listed for hearing before Deputy Judge Whitehead, who was assigned to hear the strike-out application, on 28 April 2014.

5.2.    On 28 April 2014 Deputy Judge Whitehead refused the adjournment application.  This decision was made in the exercise of his discretion.  The reasons for the decision are clear from the transcript which we have read.  In a nutshell, the judge held that the adjournment application had come far too late and there was no satisfactory explanation for the delay.  Mr Choithramani had been alerted to his problem with locus standi in 2009/2010, and at the very latest by mid-2012 when the bank issued its strike-out application.  However he did not apply to adjourn the strike-out application until April 2014, a fortnight before the hearing.

Strike-out order

6. Deputy Judge Whitehead proceeded to hear the strike-out application.  On the ground that Mr Choithramani had no locus standi, the judge gave an order striking-out the 2011 Action with costs, assessed at $1.55m.

Mr Choithramani’s appeal from the strike-out order

7. On 26 May 2014 Mr Choithramani filed an appeal from the strike-out order.  We have read the grounds of appeal.  Basically the grounds revolve around the argument that Deputy Judge Whitehead should have adjourned the strike-out application for Mr Choithramani to negotiate with the OR for the assignment of the chose in action to him.

Mr Choithramani’s application for stay

8. Meanwhile, Mr Choithramani failed to pay the costs ordered by Deputy Judge Whitehead.

9. On 30 May 2014 Mr Choithramani applied for a stay of the judge’s order pending his appeal in CACV117/2014.

The bank’s service of a Statutory Demand 

10.1.    On 11 July 2014 the bank served a statutory demand on Mr Choithramani for the costs ordered by Deputy Judge Whitehead.

10.2.    On 29 July 2014 Mr Choithramani applied to set aside the statutory demand.

Deputy Judge Chan’s order 

11. Both Mr Choithramani’s application for a stay of Deputy Judge Whitehead’s order pending appeal and his application to set aside the statutory demand were heard by Deputy Judge Chan on 18 September 2014.  Mr Choithramani was represented by counsel. 

12. At the conclusion of the hearing, the judge delivered an oral decision refusing both applications.  The decision has since been typed up. 

12.1.    First, in respect of the application for stay of execution pending appeal, the judge recited the well-established principle governing these applications.  He noted that Deputy Judge Whitehead’s decision refusing to adjourn the strike-out was a case management decision, and that an appellate court would be unlikely to interfere with such a decision on appeal.  Accordingly as Mr Choithramani did not have an arguable appeal with reasonable prospects of success, the judge refused his application for stay of execution pending appeal. 

12.2.    As for the application to set aside the statutory demand, Mr Choithramani’s only ground was that he had filed an appeal from Deputy Judge Whitehead’s order.  As Deputy Judge Chan had refused the application for stay of execution pending appeal, the application to set aside the statutory demand was also refused.

HCMP 2607/2014

13. On 21 October 2014 Mr Choithramani issued a summons in HCMP2607/2014 for leave to extend time to appeal Deputy Judge Chan’s orders refusing stay of execution pending appeal and refusing to set aside the statutory demand.

Discussion

14. First, it should be noted that where an application for stay has been refused by a judge, the applicant does not need to appeal that refusal but can make a fresh application to the Court of Appeal within a reasonable time (Hong Kong Civil Procedure 2015, vol. 1 p.1107, para. 59/13/7).  We have therefore treated the application for leave to appeal Deputy Judge Chan’s order in HCA2073/2011 as a fresh application for stay.

15.1.    As for Deputy Judge Chan’s order in HCSD23/2014, the time limit for appealing an order made in a bankruptcy matter is 28 days from the date on which the order was made.  As the judge’s order was made on 18 September 2014, the deadline for filing an appeal fell on 16 October 2014, so Mr Choithramani was out of time by 5 days.

15.2.    Mr Choithramani has sought to explain the delay by saying that he only received the typed up copy of the judge’s decision on 9 October 2014 and he had only been able to prepare his application properly after receiving that document.

15.3.    We do not consider that to be a satisfactory explanation.  Mr Choithramani was represented by counsel and the judge’s decision was brief and clear.  Be that as it may, it is more important to consider the merits of the proposed appeal, which is pegged to the application for stay pending appeal.

16. It is well-established that the mere fact that an appeal is pending does not warrant a stay.  The principles governing the court’s exercise of discretion have been set out in Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84 and Toeca Natinal Resources BV v Baron Capital Ltd [2013] 5 HKLRD 178.  They have been set out in Deputy Judge Chan’s decision at para. 3 and it is not necessary to repeat them.

17. We are not persuaded at this stage that the proposed appeal from Deputy Judge Whitehead’s order striking-out the 2011 Action has any reasonable prospect of success. 

17.1.    Mr Choithramani simply had no locus standi to pursue the claims, as the chose in action had been vested in his trustee in bankruptcy.  It is a matter of title, or rather, Mr Choithramani’s lack of it.  This was so as a matter of law, whether or not the point had been conceded by his counsel. 

17.2.    The only way in which Mr Choithramani could acquire locus standi was to persuade the OR to assign the right of action to him, but he had failed in the 2-5 years that have passed to acquire that right.  We do not see any grounds enabling Mr Choithramani to challenge the exercise of Deputy Judge Whitehead’s discretion to refuse the adjournment application.

Order

18. For the reasons set out above, we refuse the fresh application for stay pending appeal in HCA2073/2011 and we dismiss the application to extend time to appeal the refusal to set aside the statutory demand in HCSD23/2014.  As no action appears to have been taken by the bank, we make no order as to costs.