WINGAMES INVESTMENTS LTD AND OTHERS v. MASCOT LAND LTD AND OTHERS

HCMP 2039/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 2039 OF 2011

(ON AN INTENDED APPEAL FROM HCA NO. 907 OF 2011)

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BETWEEN

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J U D G M E N T

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

1.  This is the 2^nd to 6^th defendants’ application for leave to appeal against a direction given at an interlocutory hearing before Reyes J on 3 October 2011, the application having been directed by Tang VP to be dealt with at an oral hearing. Leave had previously been sought from Reyes J and refused.

2.  The direction made by the Judge which the 2^nd to 6^th defendants seek to appeal is a direction:

“… that the Second Defendant return the HK$44,000,000 deposit advanced by the China HealthCare Holdings Limited to China Zhongfu Industry Co., Ltd., to the Second Plaintiff, and that the Second Plaintiff return the RMB37,928,000 deposit advanced by China Zhongfu Industry Co., Ltd., to the Second Defendant.”

3.  The factual background, how the respective deposits came to be paid in the first place and the procedural history of the action is summarised in paragraphs 8 to 24 of the Reasons for Decision of Yuen JA in this proceeding (HCMP 2039/2011) dated 7 December 2011 and we do not propose to repeat those matters in this Decision.

4.  Those Reasons for Decision were the reasons for Yuen JA’s decision made earlier, on 25 November 2011, to order security for costs of the application for leave to appeal.  The sum ordered by way of security for costs was duly paid into court on 7 December 2011.

5.  The main issue in the proposed appeal is whether the Judge had jurisdiction to order the mutual repayment of the cross deposits.  The 2^nd to 6^th defendants contend that the deposit sums are respectively the subject matter of the plaintiffs’ substantive claim and the 2^nd to 6^th defendants’ substantive counterclaim, and that the effect of the Judge’s order is to have granted final relief in the absence of an application for a mandatory injunction or summary determination of the substantive claims.

6.  We consider that the proposed appeal is one which has a reasonable prospect of success and we are therefore satisfied that leave to appeal, in terms of the draft notice of appeal at Tab 2 of Bundle A1, should be granted.

7.  The 2^nd to 6^th defendants also seek, in the event leave to appeal is granted, a stay of execution of the Judge’s order for repayment of the deposits.  The plaintiffs adopted the sensible course of not opposing a stay, if leave were to be granted.  We therefore grant the stay of execution of the order for repayment of the deposits pending the determination of the appeal itself.

8.  It also seems to us that the security which the 2^nd to 6^th defendants were ordered to pay into court as security for the costs of the application for leave to appeal should remain in court as security for the costs of the appeal itself and we so order.

9.  We also note that the plaintiffs have applied, by summons dated 30 December 2011 in HCMP 2691/2011, for leave to appeal a subsequent order of Reyes J in this action dated 20 December 2011.  The application for leave to appeal in HCMP 2691/2011 has yet to be heard and we do not express any view on it but, since the subject matter of that proposed appeal also relates to the cross deposits, it seems to us that, in the event leave to appeal were to be granted in HCMP 2691/2011, it would be sensible for that appeal to be heard at the same time as this appeal for which we are now granting leave.

10.  The costs of the application before us will be costs in the appeal.