XCHRX PERFECT TREASURE CO. LTD. v. WELL HONOUR LTD.

HCA 14742/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 14742 OF 1999

_____________________

J U D G M E N T

_____________________

1. There are a number of matters before me today. The background to these applications is that the Plaintiff brought proceedings against the Defendant on 11 September 1999 by issuing his writ claiming for payment for the balance of price of goods sold and delivered in the sum of HK$20,110,096.52. The Plaintiff proceeded to obtain summary judgment under Order 14 and on 20 January 2000 Master M. Yuen granted conditional leave to the Defendant to defend. She ordered that the Defendant should pay into court on or before 25 January 2000 a sum of HK$750,000.00 as a condition for leave to defend. The Defendant took out a notice of appeal from that decision and that will be heard on 10 May 2000. The Defendant in effect wishes to seek unconditional leave to defend.

2. On 24 January 2000, the Defendant also issued a summons for stay of execution of the order of Master M. Yuen. That was heard by Master B. Kwan on 1 February 2000. The Defendant's summons was dismissed with costs. And the Defendant appealed against Master B. Kwan's order by notice of appeal dated 3 February 2000. That is before me today.

3. The Plaintiff has also filed a notice of appeal on 26 January 2000 against Master M. Yuen's order. That is fixed before me today as well. However, as will become apparent, it is no longer necessary for the Plaintiff to pursue this appeal. On 11 February 2000, the Plaintiff entered judgment for the amount claimed as the Defendant failed to comply with the condition ordered by Master M. Yuen. That being so, it is no longer necessary for the Plaintiff to pursue its notice of appeal against Master M. Yuen's order and by the summons which is also before me today, seeks leave to withdraw its notice of appeal.

4. The Defendant has also issued another summons on 10 March 2000 seeking to set aside the judgment which has been entered alternatively, a stay of execution pending the hearing of its appeal on 10 May 2000. The Defendant has, as it is entitled to, appealed against the order of Master M. Yuen and that hearing will take place only on 10 May 2000.

5. An appeal does not, of course, operate as an automatic stay and it is trite law that a stay should only be granted where the applicant can satisfy the Court that there are good grounds or good reasons for departing from the starting principle that the successful party should not be deprived of the fruits of the judgment in his favour. To succeed in obtaining a stay of execution pending appeal a defendant not only has to show that the appeal has some prospect of success but that without a stay of execution he will be ruined (Linotype-Hell Finance Ltd. v. Baker [1993] 1 WLR 321).

6. There is no evidence placed before me to show that if no stay is granted the Defendant will be financially ruined. There was also no evidence of that sort placed before Master B. Kwan when she, in my view correctly, dismissed the application for a stay of execution taken out by the Defendant. In the circumstances, the Defendant has failed to satisfy me as to why the starting principle that the successful party should be not deprived of the fruits of a judgment in his favour should be departed from. I am not satisfied that the Defendant should be granted an interim stay pending the hearing of its appeal.

7. The notice of appeal dated 3 February 2000 from the order of Master B. Kwan made on 1 February 2000 is dismissed. Paragraph 1 of the summons dated 9 March 2000 taken out by the Defendant is adjourned to be heard at the hearing of the appeal on 10 May 2000. There shall be no interim stay pending the hearing of the appeal.

8. As far as the Plaintiff's summons dated 9 March 2000 is concerned, I give leave to the Plaintiff to withdraw its notice of appeal. Costs should be reserved and to be decided at the hearing of the Defendant's appeal on 10 May 2000. As far as the costs in respect of the notice of appeal dated 3 February 2000, these costs should be borne by the Defendant and to be paid to the Plaintiff and to be taxed if not agreed. As for the summons dated 9 March 2000 taken out by the Defendant, I have adjourned paragraph 1 to be dealt with on 10 May 2000 so the costs should be reserved as well.