HABANERA LTD. AND ANOTHER v. FINECOM LTD. AND OTHERS

HCA7946/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.7946 OF 1998

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D E C I S I O N

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Stay of execution

1. First of all, I will refuse the 1st defendant's application to stay the execution of the judgment pending the appeal. I am not satisfied that the 1st defendant has an arguable appeal and execution of the judgment would ruin him. The 1st defendant has not adduced any evidence that this would be the case. As the 1st defendant already owns 95% of the shares, there would be no further complication if it is now required to specifically perform the agreement relating to the remaining 5% shares.

Costs of indemnity basis

2. Secondly, on the plaintiffs' application for costs to be taxed on indemnity basis against the 2nd and 3rd defendants, procedurally I will grant leave to the plaintiffs to argue this matter out of time. The plaintiffs' case is based on the provision of the guarantee itself.

3. Ms To refers to Clause 13 of the guarantee which is a waiver and severability clause. She submits that she requires instruction from her client to see if the provision on indemnity for costs had been rendered unenforceable. Hence, she did not advance any argument on the relevant clause.

4. The 2nd and 3rd defendants' liability to indemnify the plaintiffs on costs of recovery is clearly pleaded in the Amended Statement of Claim which also specifically seeks costs on indemnity basis against them. If the 2nd and 3rd defendants wish to say that the particular provision of the guarantee has been rendered unenforceable, then they should adduce evidence on it. They had not done so. In my view, the plaintiffs are entitled to costs to be taxed on indemnity basis pursuant to the terms of the guarantee against the 2nd and 3rd defendants.

Enforcement of judgment

5. Thirdly, the plaintiffs ask for leave to enforce the judgment against all the defendants. In so far as the 2nd and 3rd defendants are concerned, it is not necessary to do so. Although the plaintiffs seek specific performance of the guarantee against them, in truth, they are pursuing a monetary claim against them. The draft amended order submitted by Mr Ng now reflects the true intention of my judgment. I will amend the court order accordingly.

6. As for the 1st defendant, Atkin's Court Forms, 2nd ed., Vol.37 at p.36 stated that :

"When a purchaser defendant does not pay, the vendor plaintiff can enforce as if enforcing a money judgment."

7. In so far as necessary, I will grant leave to the plaintiffs to enforce the judgment against the 1st defendant for the payment of the purchase price. The draft amended order also reflects the matters that should be properly included in the minutes of order for specific performance which unfortunately were not be dealt with when the draft order was submitted for approval.