TRADEPOWER (HOLDINGS) LTD (IN LIQUIDATION) v. TRADEPOWER (HONG KONG) LTD AND OTHERS

CACV 101/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 101 OF 2008

(ON APPEAL FROM HCA NO. 1796 OF 2005)

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REASONS FOR DECISION

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1.  This was an application for a stay of execution of the judgment of this court dated 29 October 2008 pending determination of the 1^st to 5^th defendants’ application for leave to appeal to the Court of Final Appeal and, if leave is granted, the 1^st to 5^th defendants’ appeal to that Court.  At the conclusion of the hearing the application was refused with reasons to be given in writing.

2.  The background to this matter can be gleaned from the judgment of this court.  The application for the stay was made on the basis that were it not granted any appeal to the Court of Final Appeal would be rendered nugatory.  The primary point raised by the defendants is that unless a stay were granted the relevant properties might well be sold and the proceeds of that sale declared as a dividend and be irrecoverable.

3.  It was also said that were there to be no stay of this court’s judgment the first defendant might not pursue any further appeal.  There were other subsidiary points made such that the liquidator may come into possession of confidential information belonging to the first defendant and there may be taxation of costs which would not be properly ventilated.

4.  In my view the application has to be approached on the usual basis that is that there should be no stay unless valid reasons are shown.  As regards the first point, it seems to me that following the judgment of this court it should be the liquidators who are in control of the first defendant.  The suggestion was made that there should be a stay and that if it were intended to sell the properties of the first defendant, notice would be given and an opportunity allowed for the plaintiff to seek an injunction.  That, in my view is to put the matter the wrong way round.  The liquidators have offered an undertaking that:

“(1)  If the Peninsula Properties are to be sold, they will give 14 days notice to the defendants before proceeding with any sale and (2) they will not procure any dividends to be distributed to shareholders pending the outcome of leave to appeal.”

5.  I consider that, as discussed at the hearing, that undertaking is appropriate and should be written into the order with any necessary stylistic corrections.

6.  The other matters raised do not seem to me to be grounds upon which a stay should be granted.  The remaining defendants are perfectly capable of pursuing an appeal if they so choose.  Although it was suggested, particularly in the skeleton argument that there may be confidential information which would be obtained, that point was not been made good.  The point of the taxation of the costs of the action would appear to be more theoretical than real since the other defendants would be equally responsible for the costs and, again, could protect the common interest.