XCHRX RABOBANK ASIA LTD. v. NGAN PING WOON

1995 No. A9974

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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REASONS FOR RULING

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1. On 18th October, I heard a summons issued by the Defendant relating to an order made by Leong J. on 30th September. I made various orders on the summons, but since it was important for Leong J. to understand the reasons for those orders, and since the time allotted for the hearing of the summons had already been spent, I said that I would put my reasons into writing. This I now do.

2. On 27th August, Master Jones gave judgment against the Defendant under Ord. 14 for a large sum in excess of $80m. A notice of appeal was lodged. On 30th September, Leong J. ordered a stay of execution pending the appeal on terms. Para. 1 of the order as drawn read:

"The stay of execution continue on condition that the Defendant provides security to the Plaintiff within 14 days the terms of such security to be agreed between the parties and be approved by the Court."

In other words, the security had to be provided within 14 days. That was in accordance with the amendments made by Leong J. himself or his clerk to the draft order submitted by the Plaintiff's solicitors.

3. The trouble is that the order as drawn does not reflect the order actually made according to Leong J.'s own note, which reads:

"Stay to continue on condition that Def. provides security. Terms of security to be worked out by the parties and approved by the court within 14 days."

Thus, according to Leong J.'s own note, the 14 day period related not to the provision of the security, but to the agreement as to its terms and the approval of that agreement by the Court. Since Leong J.'s own note is by far the best record of what he ordered, I directed that para. 1 of the order as drawn be amended under Ord. 20 r. 11 by changing the position of the words "within 14 days" to after the words "between the parties".

4. However, no terms for security have been agreed between the parties. That is not surprising. If there is to be a stay, the security which the Plaintiff says the stay should be conditional on is security relating to the whole of the judgment debt. The Defendant asserts that he is wholly unable to give that security because he has no assets of any substance. Since the parties cannot agree on the amount of the security, it is for the Court to determine the amount. However, there was no argument before me as to what the amount of security should be. Acknowledging that there had been full argument before Leong J. as to what the amount of security should be, the parties limited their submissions to me to what Leong J. must have had in mind when he made his order.

5. Before Leong J., the Plaintiff was pressing for security for the whole of the judgment debt. The Defendant was asking for the stay to be unconditional, i.e. that the provision of security should not be a condition of the stay at all. Mr. Steven Miller for the Plaintiff argued that, by ordering that the stay of execution should be conditional on security being provided, Leong J. must have had in mind security for the whole of the judgment debt. The terms which he left to the parties to work out did not therefore relate to the amount, but only to the manner in which the security was to be provided. For his part, Mr. Lee Tung Ming for the Defendant argued that if Leong J. had had in mind security for the whole of the judgment debt, he would have said so. By not identifying the amount of the security, he was leaving it to the parties to decide the amount of the security: it could have been that Leong J. thought that the security which the Defendant should provide was not to be assessed by reference to the amount of the judgment debt but only by reference to the Plaintiff's costs of the appeal.

6. I was not able to determine what Leong J. had in mind. Since the summons before me proceeded on the basis that I should order the amount of security which Leong J. was likely to have had in mind, the effect of my being unable to determine what Leong J. had in mind means that I should refer the issue back to him. That can be done soon because I was told that he returns from leave on 22nd October. Accordingly, I adjourned para. 2 of the Defendant's summons for hearing by Leong J. on a date to be fixed. In order not to frustrate the effect of the stay of execution pending the determination of the terms on which the stay should be granted, I directed that there be a stay of execution on the judgment pending the restored hearing of the summons before Leong J., on condition that the Defendant pays into court the sum of $75,000.00 within 14 days of today. That sum reflected the offer of security given to me by Mr. Lee, being an estimate of the Plaintiff's costs of the appeal.