XCHRX THE CHASE MANHATTAN BANK v. SYBELLA LTD. AND OTHERS

HCMP 2159/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS

ACTION NO. 2159 OF 1999

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Reasons for Decision

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1. This is an application for stay of execution of a Writ of Possession and Fieri Facias combined pending an intended appeal.

2. The Plaintiff is the mortgagee under a legal charge. The 1st Defendant is the mortgagor, the 2nd Defendant is the borrower and the 3rd Defendant is the guarantor of the liability. The Applicant is the tenant of the suit premises.

3. On 17 August 1999, the Plaintiff obtained an order for possession against the 1st Defendant. Money judgment was also entered against the 1st and 2nd Defendants on the same day and against the 3rd Defendant on 26 October 1999.

4. On the strength of the possession order, the Plaintiff issued a Writ of Possession and Fieri Facias combined on 12 November 1999 ("the writ of execution"). A 14 days notice to quit had been issued by the bailiff.

5. On 2 December 1999, the Applicant applied by summons under Order 45 rule 11 of the Rules of High Court to stay further execution of the writ of execution on the ground that it is a tenant and is entitled to reliefs from the court. On 8 December 1999, the application came before master and the master granted a stay of execution until 15 February 2000. The Plaintiff appealed against the order of stay. The Applicant also appealed contending that it is entitled to a stay of 6 months from the date the Plaintiff serves notice of termination under Part V of the Landlord and Tenant (Consolidation) Ordinance, cap. 7.

6. The appeals came before Mr. Justice Yam on 19 January 2000. His Lordship allowed the Plaintiff's appeal and set aside the master's order for stay. The Applicant's appeal was also dismissed.

7. The Applicant intends to appeal against Mr. Justice Yam 's decision, but has not yet filed its Notice of Appeal. Mr. Merry who appeared for the Applicant explained that it was because the order of His Lordship had yet to be sealed, a fact which is not in dispute.

8. By this summons, the Applicant applied for a stay of the further execution of the writ of execution on the basis that the intended appeal would be rendered nugatory if there is no stay. There is no evidence filed by either party in relation to the application. I was told by Mr. Merry that the application was not listed before Mr. Justice Yam as he was not available.

9. 3 matters were canvassed in the course of submissions. The first related to the timing of this application. The Plaintiff took the point that this application should not be issued before the lodging of the Notice of Appeal. The reason advanced for not lodging the Notice of Appeal is, as mentioned above, that the order appealed against has yet to be filed. That being the case, no blame can be attached to the Applicant. The Applicant explained that there is urgency because the bailiff had already issued the 14 days' notice to quit. While I agree with Miss Chan for the Plaintiff that it would take some time before the Plaintiff can obtain an appointment with the bailiff to carry out an eviction order, there is plainly some urgency in the matter given that the 14 days' period under the bailiff's notice to quit had already expired. Miss Chan asked that the Applicant's solicitors be required to give an undertaking to lodge the Notice of Appeal upon receipt of the sealed order. Mr. Merry did not oppose this. In my view, it is quite appropriate to have the undertaking as a condition for an order for stay.

10. The second matter concerns whether the intended appeal would be rendered nugatory without a stay. The argument of Miss Chan is that the Applicant only stands to suffer loss of profits for 6 months if the writ of execution is not stayed and if it were to succeed in its intended appeal. It is therefore merely a matter of damages. Mr. Merry is right to observe that we are here dealing with an order for possession. If the Applicant were successful in its intended appeal, it would be entitled to remain on the premises until its tenancy had been properly terminated by the Plaintiff. It is thus inappropriate to say that what is at stake is only damages for loss of profits. There is more to it. There is also a tenant's right to quiet possession for as long as his tenancy runs until it is terminated under the law.

11. The last matter is on the terms to be imposed for the stay. Miss Chan argued that the Applicant should be asked to pay the mesne profits of $100,000 per month, being the same amount of rent that it should pay to the 1st Defendant, commencing from December 1999. Mr. Merry did not object the payment of mesne profits as a condition of the stay. He, however, submitted that the mesne profits should only run from January 2000 on the basis that the Applicant would be paying double as the Applicant might have already paid the 1st Defendant rent for December. I say the Applicant might have already paid the 1st Defendant rent for December, because there is in fact no evidence to that effect before me. The accounts documents which were before Mr. Justice Yam reveal payments of rent up to November 1999. The Applicants' solicitors was not able to say whether rent for December had or had not been paid. In the circumstances, I can only act on the material before the court and to order payment of mesne profits as from December 1999.

Conclusion

12. The order I make is that :

(1) Upon the undertaking of the solicitors for the Applicant to lodge a Notice of Appeal against the order of Mr. Justice Yam made on 19 January 2000 within 5 days from being served with a sealed copy of the said order, further execution of the writ of execution be stayed pending the hearing and resolution of the intended appeal by the Applicant on the conditions that :

(a) The Applicant within 7 days from today pays to the Plaintiff the sum of $200,000, being mesne profits for the months of December 1999 and January 2000; and

(b) The Applicant pays to the Plaintiff mesne profits in the sum of $100,000 month on or before the first day of each month commencing February 2000 until further order of the court.

(2) The costs of this application be in the cause of the intended appeal.