TONG HOK TAK, DAFFY AND OTHERS v. BEVERLY CONSULTANTS LTD AND OTHERS

HCA2617/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.2617 OF 2003

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D E C I S I O N

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1. This is the 1st and 2nd defendants' application for an interim stay under Order 45 rule 11, Rules of the High Court in respect of the interlocutory injunction and related orders granted on 1 August 2003, as extended or varied by Cheung J on 13 October 2003 (collectively referred to as "the Order"). Although the summons does not spell this out clearly, Mr Leung has indicated in his submissions today that the application is directed solely against paragraph 2 of the Order of 1 August 2003, as extended or varied by Cheung J on 13 October.

2. Under Order 45 rule11 of RHC, the court may grant a stay of execution of a judgment or order or other relief on the ground that matters have occurred since the date of that judgment or order, and the court may grant such relief and on such terms as it thinks fit.

3. The test for invoking Order 45 rule 11 is that there has to be matter which has occurred since the date of the order. This has been considered in the case of Tam Ho Man v. Wong Kwok Tai, (unreported) HCA No.4736 of 1985, referred to Hong Kong Civil Procedure 2002 vol.1 para. 45/11/2 at p.661. Hunter J held that "matters which have occurred since the date" refers to "matters which went to the validity of the judgment and which, if established before the court, might justify the court in saying that this was a judgment which, on the material now before it, would not allow to be executed".

4. Accordingly, not only has there to be an event that occurs after the making of the order or the judgment sought to be stayed, but that the event must have an importance on the outcome of that judgment or order.

5. In the present case, the matter that is said to have occurred since the making of the Order on 1 August 2003, is the two pieces of legal advice on the BVI law, which were dated 22 August and 2 September 2003. Insofar as the dates on which they were available, they were clearly after 1 August, but before the hearing before Cheung J on 13 October 2003.

6. Mr Bullett on behalf of the plaintiffs takes the point that the defendants could have obtained or sought the legal advice well before 1 August 2003. That, in my view, is a point more relevant to whether leave should be granted for the legal opinions to be adduced at the appeal by way of fresh evidence. Factually, these opinions only came into existence after 1 August 2003, though before 13 October 2003.

7. In my view, the more fundamental issue is whether these legal opinions properly come within the ambit of Order 45 rule 11, as explained by Hunter J in Tam Ho Man. Both the materials before the court and the submissions advanced do not demonstrate how this piece of fresh evidence or new matter would have gone to the validity of the Order made on 1 August 2003.

8. Whether the 1st and 2nd plaintiffs as executors have been properly constituted the shareholders of Rhodes does not alter the fact that Rhodes is the sole shareholder of the Golden Valley Agents Limited, in whose favour the Order of 1 August 2003 was granted. As to the submission that the legal opinions are relevant to the authority of Golden Valley Agents Limited to sue or bring these proceedings, the decision to bring proceedings or to instruct legal advisers for the purpose is not an act which the company has no power to do, and is capable of ratification, even assuming that the 1st plaintiff has no authority to act on its behalf, as the 1st and 2nd defendants contend. As Mr Bullet points out, it is not altogether clear what interests do the 1st and 2nd defendants have, as third parties to Golden Valley Agents Limited, or why should they be concerned, to go behind the public records filed in the Company Registry.

9. Mr Bullett also makes the point that the lack of authority of Golden Valley Agents Limited does not form part of the grounds in the Notice of Appeal. Assuming that it is an issue at the appeal, the fact remains that at the interlocutory stage, the court is only concerned with whether there is a serious issue to be tried with regard to the authority of Golden Valley Agents Limited to bring these proceedings. It would appear that the contents of the legal opinions only go to show that there is a serious issue to be tried on the issue of the authority of Golden Valley Agents Limited. The legal opinions do not come within the meaning of matters occurring since the date of the order as explained by Hunter J.

10. In addition, there are a number of other matters which, in my view, are relevant to the exercise of the court's discretion. Firstly, the appeal will be heard within a matter of three days. Secondly, although the legal opinions were certainly available by the time the parties went before Cheung J, no explanations have been advanced as to why they were not brought to Cheung J's attention. Thirdly, it appears from counsel's submissions that the real difficulty is with regard to the implementation of the Order, namely, whether the 1st and 2nd plaintiffs' names should be included in the board resolution for the purpose of effecting the Order. The 1st and 2nd defendants' objection is not directed against the substance of the Order. In these circumstances, the court's discretion ought not to be exercised in favour of a stay of execution of the Order.

11. For these reasons, the 1st and 2nd defendants' summons dated 16 October 2003 is dismissed with costs to the plaintiffs against the 1st and 2nd defendants, to be taxed if not agreed.