CHAN SHEK v. MILKWAY IMAGE (HONG KONG) LTD

HCPI 295/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 295 OF 2006

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D E C I S I O N

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1. By Summons dated 30 December 2009, the defendant applied for a stay of execution of the judgment given in favour of the plaintiff pending the defendant’s appeal against that judgment.

2. Judgment was given on 6 October 2009 in this matter in favour of the plaintiff in the amount of $789,696.00 with costs against the defendant.

3. By a Notice of Appeal dated 3 November 2009, the defendant appealed against the judgment given in favour of the plaintiff herein.  The appeal by the defendant is in relation both to the issue of liability, alternatively to the issue of contributory negligence.  The stance taken by the defendant on the appeal is that they should not have been found liable to the plaintiff, alternatively, failing the issue of liability, the plaintiff ought to be no less than 50% liable for contributory negligence.

4. This application for stay of execution pending appeal by the defendant is based on the following grounds :

(a)      the appeal is at the very least arguable, and

(b)     there is significant risk that the levying of execution will render the appeal nugatory.

The application is opposed by the plaintiff on both grounds.

Applicable principles

5. The applicable principles relevant to the present case is distilled from the decision of Ma J (as he then was) in the case of Star Play Development Ltd v Bess Fashion Management Co. Ltd (HCA4726/2001) and can be summarized as follows :

(a)      The starting point is RSC Order 59 which provides that an appeal shall not operate as a stay of execution.

(b)     It is therefore for the defendant to justify a stay of execution and unless the defendant can do so, one will not be ordered.  The usual practice is for the defendant to show that good reasons exist for there to be a stay of execution.

(c)     In the case of a money judgment, which is the case here, the court will require evidence to show why the levying of execution will result in the appeal being rendered nugatory, such as, for instance, an appreciable risk that the respondent to the appeal would not be able to repay in the event of a successful appeal.

(d)     As for the merits and strength of the appeal, whilst it is impractical and even undesirable for the court to go deeply into the merits of an appeal, it will usually have a preliminary view of it.  This is an inevitable consequence of the application for stay with its starting point being Order 59.

(e)      In this respect, the existence of an arguable appeal (that is, one with reasonable prospect of success) is the minimum requirement before a court would even consider granting a stay.  No stay will be granted if the court is not convinced that there exist arguable grounds of appeal.

(f)      On the other hand, the existence of a strong appeal or a strong likelihood of the appeal succeeding will usually by itself enables a stay to be granted because that will constitute a good reason for a stay.

(g)     Where it can be shown that an appeal would be rendered nugatory if a stay was not granted, the court may require no more than the existence of an arguable appeal.

(h)     But where it cannot be shown that an appeal would be rendered nugatory if a stay were not granted, the court will require, in the absence of any other factors, the appellant to demonstrate strong grounds of appeal or a strong likelihood of success.

(i)      The court must also take into consideration the position of the successful party (being the respondent in the appeal) and the prejudice that may be caused to him in the event that a stay is granted, and, if necessary to impose conditions so as to minimize such prejudice to him.

(j)      Ultimately it is a balancing exercise which the court must carry out bearing in mind that the starting point that the successful party is not to be denied the fruits of his success.

Decision

6. Coming back to the present case, dealing first as to the merits of the appeal, I agree with Mr Clough who appeared for the plaintiff on this application that in so far as the defendant’s appeal on the issue of liability goes, the basis for that appeal seeks to overturn primary findings of fact.

7. As such I take a very dim view as to the likelihood of success by the defendant as to the issue of liability.

8. However, in relation to contributory negligence, it was found as a fact that the safety mattress was taken away at the behest of the plaintiff.

9. On that factual basis, it is at least arguable whether or not the plaintiff, given all the attendant circumstances prevailing at the time, should be found to be liable for contributory negligence.

10. Even if found to be contributorily negligent, I cannot see that the plaintiff could be more than 20% to blame, certainly not the 50% suggested by the defendant, due to all the prevalent circumstances in the case.

11. Turning now to deal with the basis of this application for stay by the defendant being that the appeal would be rendered nugatory if the appeal succeeded, it is only on a very narrow basis that the defendant says that the appeal would be rendered nugatory, which is that the evidence from the plaintiff himself at trial showed the plaintiff to be in some financial difficulties such that there will be no reasonable prospect of recovering the damages from the plaintiff if the appeal were to succeed.

12. The defendant relies on the plaintiff’s evidence at trial that as of January 2009 he had not paid his solicitors and that he had to borrow substantial amounts of money from his family members during the pre-trial period.

13. In this respect the defendant submits that it is likely that the plaintiff’s own liability to his solicitors in costs will far exceed any amount payable by the defendant in costs but there is no undertaking from the plaintiff’s solicitors to repay costs of the trial in the event that the defendant’s appeal is allowed.

14. It should be noted that the above summarise the extent to which the defendant says that the appeal would be rendered nugatory if the appeal is allowed.  It is not part of the defendant’s case that it will be put to hardship or ruin if it had to pay the judgment sum awarded.

15. In so submitting, the defendant has totally overlooked the fact that it was found at the trial that the plaintiff has returned to his pre-accident earnings level by 2007 and did not suffer any loss of earnings since that time.

16. In the absence of any evidence to suggest otherwise, I can only assume that the plaintiff has continued working and earning up to the present.

17. That coupled with the fact that the arguable appeal by the defendant is only in respect to contributory negligence, I am unable to accede to the submission of the defendant that if no stay of execution is granted, the appeal would be rendered nugatory if successful.

18. For the above reasons, and since the starting point is that the successful plaintiff ought not to be deprived of the fruits of his success, this application for stay of execution pending appeal must be refused.

19. Accordingly, this application is dismissed with costs, the costs order being an order nisi.