XCHRX ABUNDANCE ASSETS LTD. v. SUN ASIA PACIFIC HOTELS LTD. and Another

1994 No. CL 19

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. On 21 November 1994, I handed down a judgment in which I refused an application by the defendants to stay the proceedings in this action on the grounds of forum non conveniens and lis alibi pendens. The defendants are appealing against this decision. They filed the notice of appeal on 23 January 1995. I am told that the appeal, together with another appeal by the plaintiff against the grant of a stay in related proceedings that I ordered at the same time, is set down for hearing before the Court of Appeal for four days commencing on 23 May 1995. On 24 January 1995, the defendants took out a summons for a application that all further proceedings in this action be stayed pending this appeal. This is the summons now before me.

2. The summons refers to Order 45, rule 11, but this rule has no application to the type of stay requested here. Order 59, rule 13 says -

"(1) Except so far as the court below or the Court of Appeal or a single judge may otherwise direct -

(a) an appeal shall not operate as a stay of execution or of proceedings under the decision of the court below; . . ."

3. This rule is also not directly applicable to the summons before me because the defendants are not asking for a stay on the proceedings under my decision but a stay of the proceedings in the action generally. However, it is common ground that I have inherent jurisdiction to order a stay.

4. The application for the stay is made on the grounds that prejudice arises or is likely to arise if a stay is not granted because -

a) if the appeal is successful, unnecessary costs will be incurred in proceeding with the action in the meantime; for example, in relation to filing a defence and in relation to discovery;

b) there may be further attempts to stay or dismiss parallel proceedings in Hawaii;

c) the parties will be obliged to litigate the proceedings both in Hong Kong and Hawaii; and

d) there will be confusion arising from the simultaneous proceedings in both Hong Kong and Hawaii.

5. The grounds mentioned in paragraphs c) and d) can be dealt with shortly. These grounds are no different than those advanced, amongst others, to persuade me to grant a stay that I refused on 21 November 1994. I rejected those grounds then, and I do not see that the fact that there is an appeal against my decision should induce me to accept them now.

6. I do not accept that there is any merit in ground b) either. The Hawaiian court will be aware that my decision is being appealed against; I am perfectly certain that the Hawaiian court will not be swayed from the direction in which it may wish to go by the fact that I have refused a stay of proceedings pending the appeal.

7. That leaves the matter of costs being wasted if the proceedings are not stayed and the appeal is successful. I do not accept that these costs will be very great, as has been suggested by the defendants. I was made aware of the large amount of work already done in these proceedings during the course of the proceedings for the permanent stay. I consider that the benefit of this work will enable the defendants to proceed with the action without great additional expense.

8. In In re J.B. Palmer's Application (1883) 22 Ch. D. 88, Cotton L.J. said, at page 90 -

. . . [an appeal] is no reason for depriving the applicants of what is their right. They wish to go on with the proceedings, and this Court has decided that they have a right to do so; and the mere fact of extra costs being incurred, which may be useless if the House of Lords decide in favour of the appeal, is no sufficient reason for restraining them.

9. This and others authorities, although not on all fours with the application before me, are consistent in saying that special reasons must be advanced to justify restraining a party from proceeding with its right to litigate. Wasted costs is not a good enough reason.

10. It is true that the courts, these days, are perhaps more conscious of avoiding the waste of costs than they were in the days of lower legal costs when the authorities I have mentioned were decided, but, on the other hand, modern judges are also more anxious to ensure that litigation is conducted expeditiously.

11. Mr Kwok told me that the plaintiff wishes to proceed with the litigation; it has been delayed long enough, he says; the plaintiff's points of claim were served in March last year. The plaintiff is prepared, he says, to take the risk of costs being wasted. If the appeal is successful, the Court of Appeal will be deciding that the Hawaiian court is the preferred venue and will stay the present proceedings permanently. The question will then arise as to the costs of these proceedings. In deciding the matter of costs, the Court of Appeal will, I have no doubt, make such order as is just and appropriate. In doing so, the Court of Appeal will, I venture to suggest, be entitled to take into account that the plaintiff has insisted on its right to proceed, and, in doing so, has accepted that certain costs might be wasted.

12. I conclude that the defendants have not shown reasons strong enough to justify me depriving the plaintiff of its right to insist that the litigation should proceed with due expedition. Accordingly, I refuse a stay pending appeal.

13. On the face of it, the plaintiff is entitled to its costs of this application in any event, and I make an order nisi accordingly.