XCHRX UNISON KNITWEAR LTD. v. RICH EASY LTD.

HCMP 1438/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 1438 OF 2001

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J U D G M E N T

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Introduction

1. On 2 February 2001, Deputy Judge Kwan gave judgment in the Court of First Instance to the Plaintiff against the Defendant for the sum of US$78,660.00 or its Hong Kong dollar equivalent plus interest and costs. The order giving effect to that judgment was sealed on 12 February. The Defendant wished to appeal. The 28-day time limit for serving its Notice of Appeal on the Plaintiff's solicitors expired on 12 March. The Defendant did not serve its Notice of Appeal by then, and on 15 March its solicitors issued a summons under Ord. 3 r. 5 of the Rules of the High Court for an extension of time to do so.

The reason for the non-compliance with the time limit

2. Prior to 5 May 2000, the time for serving a notice of appeal to the Court of Appeal from a final order was six weeks. However, with effect from that date, Ord. 59 r. 4(1)(c) was amended to reduce the time to 28 days. It is fair to say, I think, that most litigators would have been aware by the beginning of this year of the change in the time limit. But the partner in the Defendant's solicitors who had been handling the Defendant's case was unaware of the change, and he was proceeding in the mistaken belief that the Defendant had until 26 March to serve the Notice of Appeal. He does not assert that he made any inquiries or conducted any research into what the time limit was, and I therefore proceed on the assumption that he simply assumed that the time limit was as it had been for many years. If a time limit has been in place for many years, I do not suppose that it would occur to many practitioners (unless they were particularly alerted to it) to take the precaution of checking that the time limit had not been recently reduced.

3. In this case, counsel had been instructed to draft the Notice of Appeal. He had sent the draft to the Defendant's solicitors on 12 March. The Defendant's solicitors served the Notice of Appeal on the Plaintiff's solicitors on 13 March, but when on the same day they tried to lodge the Notice of Appeal with the Registrar as required by Ord. 59 r. 5(1), they were not permitted to do so as the Notice of Appeal had not been served on the Plaintiff's solicitors in time.

The extension of time

4. I regard four factors as important as to whether the Defendant's time for serving the Notice of Appeal should be extended. First, the error of the Defendant's solicitors, though not capable of being condoned, was nevertheless understandable. Secondly, there has been no fault on the part of the Defendant. Thirdly, the delay could not have been shorter, and the summons was issued within two days of the discovery of the error. Fourthly, the Plaintiff does not suggest that it has suffered any relevant prejudice. By that, I mean prejudice caused by the fact that the Notice of Appeal is now to be lodged a few weeks later than it should have been. I appreciate that if a stay of execution of the judgment is granted, the Plaintiff will have to wait longer for its money, but that would be as a result of the stay of execution rather than because of the delay in serving the Notice of Appeal.

5. In all the circumstances of the case, I have concluded that the overall interests of justice require the grant of the extension of time which the Defendant seeks unless its appeal has no real prospect of success. But to what extent should the merits be addressed? That was a question which I considered in a case very much like the present where the would-be appellant's solicitors had been unaware of the reduction in the time limit: Tridant Engineering Co. Ltd. v. Mansion Holdings Ltd. (CACV 311/2000). After reviewing the authorities, I concluded that if an informed assessment of the prospects of success of an appeal can only be made at a hearing equivalent to the hearing of the appeal itself, the overall interests of justice require the would-be appellant's time to be extended without any further consideration of the merits. Having read the judgment, the Notice of Appeal and the Plaintiff's outline submissions for the purpose of today's hearing, I do not think that I could make an informed assessment of the merits without a further hearing which would be likely to escalate into a mini-hearing of the appeal itself. Accordingly, I grant the extension of time for serving the Notice of Appeal until today, I direct that re-service of the Notice of Appeal be dispensed with, I direct that service of the Notice of Appeal on 13 March be treated as service today, and thus the Defendant's solicitors have until 6 April to lodge the Notice of Appeal with the Registrar.

Stay of execution

6. The Defendant applies for a stay of execution of the judgment, including the order for interest but not the order for costs, on the ground that the Plaintiff is incorporated in Bangladesh, and if the judgment debt plus interest is paid now, but the Defendant succeeds in the appeal, it may be difficult to get the money back. Although the court does not "make a practice of depriving a successful litigant of the fruits of his litigation, and locking up funds to which he is prima facie entitled" pending an appeal, a stay of execution is frequently granted when the judgment is in favour of a person resident out of the jurisdiction or of a company incorporated overseas: see Hong Kong Civil Procedure 2001, para. 59/13/1. As it is, the Plaintiff has not asserted that it has any assets in Hong Kong, and in my opinion this is an appropriate case for there to be a stay of execution, provided that the Plaintiff can be protected against the Defendant becoming impecunious in the meantime.

7. That can be achieved by making the stay of execution conditional upon the Defendant paying into court the sum of US$105,000.00 within 14 days of today. The sum of US$105,000.00 represents the judgment debt plus interest up to when the appeal is likely to be heard later this year. Accordingly, I direct that execution of the judgment be stayed until the hearing of the appeal, but I also direct that, in the event of the Defendant not paying the sum of US$105,000.00 or its Hong Kong dollar equivalent into court by 17 April (being the first working day after 14 days from today), the stay of execution be lifted, and the Plaintiff will be at liberty to enforce the judgment notwithstanding that an appeal against the judgment is pending.