CHEUNG HING v. WONG CHOR CHEUNG AND ANOTHER

CACV 97/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 97 OF 2011

(ON APPEAL FROM HCA NO. 336 OF 2008)

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D E C I S I O N

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1.  On 8 January 2015, the plaintiff Cheung Hing issued a summons for an order that the sum of $670,000 he paid into court on 25 August 2014 be forthwith paid out to him with accrued interest. I gave directions on 12 January 2015 for the summons to be dealt with on paper with leave to Best Century Holdings Limited (“Best Century”), the intended intervener and the appellant in this appeal, to file evidence and/or submission in opposition within 7 days. Pursuant to those directions, Best Century filed an affirmation by one Kwok Paul Yin Po on 15 January. The plaintiff filed an affirmation in reply on 19 January.

2.  The application arose in this way.

3.  On 18 March 2011, Yam J dismissed the application of Best Century to intervene in HCA 336/2008 with costs.  Leave to appeal was granted by a single judge of the Court of Appeal on 26 May 2011.  On 22 November 2011, this appeal of Best Century in CACV 97/2011 was allowed by the Court of Appeal and an order was made giving leave to Best Century to intervene and be joined as the 3^rd defendant to HCA 336/2008.  Costs of the appeal, the application for leave to appeal in HCMP 781/2011 and the costs below were awarded to Best Century against the plaintiff (“the Costs Order”).

4.  On 16 May 2014, the plaintiff filed a notice of intention to proceed in CACV 97/2011.  He then issued a summons on 27 June 2014 under the inherent jurisdiction of the court for an order to stay the execution of the Costs Order pending the determination of CACV 100/2014 or until further order of the court.  At the time of that summons, costs of the appeal in CACV 97/2011 had been taxed and allowed on 4 June 2014 at $389,895 with interest and a taxation hearing was fixed on 1 August 2014 for taxation of the costs in HCA 336/2008 and HCMP 781/2011.  The plaintiff applied for stay of execution of the Costs Order on the basis that Best Century was adjudged to pay him the costs of HCA 925/2010 on indemnity basis and Best Century has appealed that judgment in CACV 100/2014.  He estimated the costs he would be liable to pay under the Costs Order to be $669,520.33 and this would be far less than the indemnity costs in his favour in HCA 925/2010 which he claimed at over $2 million.  He deposed that Best Century does not have the means to satisfy the indemnity costs awarded to him in HCA 925/2010.

5.  Best Century opposed the application to stay the execution of the Costs Order and exhibited the allocatur dated 2 July 2014 (“the Allocatur”) in respect of the costs taxed and allowed of $389,895 in CACV 97/2011.

6.  On 12 August 2014, I made an order by consent on the plaintiff’s summons for stay of execution.  The hearing date of that summons was vacated on these undertakings with liberty to apply: (1) the undertaking of the plaintiff to pay $670,000 into court within 14 days; (2) the undertaking and agreement of Best Century to refrain from taking any action including but not limited to enforcement and bankruptcy proceedings for levying execution of the Costs Order including payment under the Allocatur and the taxed costs and allocatur to be issued for HCA 336/2008 and HCMP 781/2011; (3) the undertaking and agreement of Best Century to waive claiming interest on costs under the Costs Order; (4) the undertaking of Best Century not to apply for release of the said sum of $670,000 with interest accrued unless and until the adjudged costs under the judgment of HCA 925/2010 shall be set aside in CACV 100/2014 and with the consent of the plaintiff provided that such consent shall not be unreasonably withheld; and (5) the agreement of the plaintiff and Best Century that the said sum of $670,000 be paid out to the plaintiff or his solicitors with interest if Best Century shall fail to succeed in CACV 100/2014 or otherwise fail to succeed in setting aside the costs order under the judgment of HCA 925/2010.

7.  The plaintiff made a payment into court of $670,000 on 25 August.

8.  On 4 December 2014, the Court of Appeal (Kwan JA and Poon J) made an order in CACV 100/2014 that Best Century was to pay security for costs of that appeal in the sum of $416,570 by making lodgement of the same in court by cash or banker’s draft within 28 days, i.e. on or before 2 January, and in default of Best Century making such lodgement within the time specified or within such further time as the court may for special reasons allow, the appeal in CACV 100/2014 do stand dismissed out of court without further order.

9.  Best Century did not make a lodgement within time.  On 2 January 2015, I gave a reasoned decision refusing its application to extend time to provide security.  The appeal in CACV 100/2014 was dismissed pursuant to the order made on 4 December.

10.  Pursuant to the agreement in (5) of the order by consent, on the dismissal of the appeal in CACV 100/2014, the plaintiff applied for payment out of the $670,000.

11.  Best Century opposed this application on a number of grounds.

12.  In essence, its contention is that when the condition for stay of execution is spent by ordering a payment out, and the Allocatur or allocaturs in favour of Best Century have not been satisfied, Best Century is entitled to enforce the Allocatur or allocaturs, whether by way of bankruptcy petition or otherwise, without further notice.  It was further contended that the dismissal of the appeal in CACV 100/2014 may be subject to further appeal and that a related appeal in CACV 101/2014 (brought by different appellants against the plaintiff in respect of the judgment in HCA 925/2010) would affect Best Century as the judgment and costs order in HCA 925/2010 might be set aside in CACV 101/2014.

13.  The most material consideration is that the plaintiff has clearly brought himself within the terms of the agreement in (5) of the consent order and is entitled to an order that the amount he paid into court be paid out to him.  It is unnecessary to decide whether, notwithstanding the undertakings and agreements in (2) and (4) of the consent order, Best Century is correct in contending that the condition for stay of execution is spent once the amount is paid out and hence it is at liberty to take enforcement action without leave of the court and without notice. Nor is it necessary to decide whether the plaintiff is correct in contending that he should be permitted to set off his costs liability under the Costs Order against the indemnity costs in his favour in HCA 925/2010.

14.  Whether the dismissal of the appeal in CACV 100/2014 is subject to a further appeal is immaterial.  The outcome of the appeal in CACV 101/2014 is likewise irrelevant, as it is clearly provided in the undertaking and agreement in (4) of the consent order that Best Century may apply for release of the amount paid into court unless and until the costs order in HCA 925/2010 shall be set aside in CACV 100/2014 and not in any other appeal.

15.  It is a matter for the plaintiff whether he wishes to invoke his entitlement and seek payment out notwithstanding the threat of enforcement action or to avoid any possible complication and wait until April 2015 when the appeal in CACV 101/2014 is likely to be heard, if security for costs is paid by the appellants in those proceedings within the extended time in February 2015.  But I see no reason to deny him of his entitlement of payment out if that is his choice.

16.  For the above reasons, I grant the application and order that the sum of $670,000 paid into court by the plaintiff be paid out to him forthwith through his solicitors with accrued interest.

17.  I make an order nisi there be no order as to costs, for two reasons. In its summons, the plaintiff sought an order that no order as to costs be made for this application. Costs would not have been much at that time. Further costs were incurred by the plaintiff in filing an affirmation in reply of ten pages, but this was done without leave of the court, it was for the most part argumentative and the assertions of the plaintiff of what he would or would not have agreed are unhelpful to construing the consent order.