A v. R

HCSD 24/2022

[2023] HKCFI 398

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

APPLICATION TO SET ASIDE A STATUTORY DEMAND

NO 24 OF 2022

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REASONS FOR DECISION

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1.  On 11 November 2022, I handed down a decision (“the Decision”)  to dismiss the applicant’s application to set aside the respondent’s statutory demand dated 23 June 2022 and authorised the respondent to present a bankruptcy petition against the applicant forthwith. By a summons dated 9 December 2022, the applicant applied for a stay of the Decision pending the outcome of her intended application to the Court of Final Appeal (“CFA”)  for leave to appeal against the Court of Appeal’s decision dated 17 November 2022 in CACV ___/____. After considering the submissions of the parties at the hearing, I dismissed the applicant’s summons dated 9 December 2022 with costs and indicated that my reasons would be handed down in due course. These are the reasons for my decision.

2.  On 22 December 2022, the respondent presented a bankruptcy petition against the applicant and the bankruptcy hearing has been fixed to take place on 21 February 2023.

3.  The applicant’s application for a stay of the Decision has not been made on the basis that there is a pending appeal to the Court of Appeal against the Decision.  The application is made on the basis that there is a pending application by her against a decision of the Court of Appeal in relation to the proceedings between her and the respondent mentioned in paragraphs 2, 12 and 13 of the Decision.

4.  In her written submissions, the applicant relied on the following 5 grounds (“5 Grounds”)  to support of her stay application, which I quote in verbatim: (1)  “Inexpedient for the court to enforce a Bankruptcy Petition”, (2)  “Leave to appeal to the Court of Final Appeal under CACV ___/____ to be given within 2 months”, (3)  “Unstable mental/physical illnesses of the [respondent]”, (4)  “[Respondent] did not serve his affirmation on or before 20^th January 2023 …” and (5)  “Ability of the [applicant] to pay the legal cost of $796,963.79”.

5.  At the hearing, the applicant confirmed that the Court of Appeal handed down a judgment on 3 February 2023 to dismiss the applicant’s notice of motion seeking leave to appeal to the CFA against the Court of Appeal’s judgment dated 17 November 2022 in CACV ___/____. However, she indicated to the court that she will make an application for leave to appeal to the CFA in the next few days.  Despite the fact that her application asked for a stay of my decision (to dismiss her previous application to set aside a statutory demand and to authorise respondent to present a bankruptcy petition), the applicant acknowledged at the hearing that she wanted a stay of the bankruptcy petition so that the bankruptcy hearing will not proceed on 21 February 2023.

6.  I took into account the following principles in considering the present stay application.  Under section 16(3)  of the High Court Ordinance (Cap 4), the court has the power “to stay any proceedings before it, where it thinks fit to do so, either of its own motion or on the application of any person”.  Similarly, under RHC Order 1B, rule 1(2)(e), the court may “stay the whole or part of any proceedings or judgment either generally or until a specified date or event”. The court’s approach in an application for a temporary stay of proceedings is to consider the balance of convenience and fairness as between the parties.  Its discretion should be exercised in such a manner to ensure that its procedures are used in a logical, fair and cost-efficient manner.  Whether or not a temporary stay of proceedings should be granted is a question of case management.  See Re Chime Corporation Ltd (unreported, HCMP 4146/2001, 11 March 2005)  §14 (Kwan J).

7.  Having considered the 5 Grounds and the oral submissions made by the applicant, I did not consider that my discretion should be exercised to stay the Decision or to put a temporary halt to the bankruptcy petition.  As pointed out by the Court of Appeal in its judgment dated 3 February 2023, the applicant’s application for leave to appeal to the CFA was misconceived. There was nothing before me to indicate that the applicant’s proposed application to the Appeal Committee for leave to appeal will be any different. Further, the applicant failed to identify any good reasons as to why I should, as a matter of balance of convenience and fairness between the parties, stay the Decision on the basis of the other grounds relied upon her.  In any event, I did not think that there was anything in the Decision that is capable of a stay.  My decision simply involved dismissing the applicant’s application to set aside a statutory demand and giving authorisation to the respondent to present a bankruptcy petition.  It was not proper for the applicant to effectively seek a stay of the bankruptcy petition in the guise of an application of a stay of the Decision.

8.  As to costs, the applicant did not object to the principle that a losing party should bear the costs of a successful party.  I therefore ordered that the costs of the stay application be paid by the applicant to the respondent to be taxed if not agreed.  The respondent’s own costs were also ordered be taxed in accordance with Legal Aid Regulations.