CENTER OPTICAL (HONG KONG) LTD. v. JARDINE TRANSPORT SERVICES (CHINA) LTD.

HCCL146/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO. 146 OF 1999

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J U D G M E N T

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1. On 31 July 2001 this court handed down its judgment in this action, which involved a claim by the plaintiff, a Hong Kong exporter, against the defendant, a freight forwarder based in Shanghai, for the principal sum of slightly in excess of US$300,000, together with interest thereon, representing the value of goods transported to America by the defendant and released subsequent to discharge absent production of original bills of lading.

2. The trial encompassed some nine days, and indeed it appeared that every conceivable point was taken on behalf of the defendant. In the event the judgment of this court was that the plaintiff should succeed in its misdelivery claim and, accordingly, judgment was given in favour of the plaintiff against the defendant in the sum of US$301,102.90, together with an order that interest was to be payable on such sum at the rate of 2% over HIBOR from time to time prevailing from the date of the issue of the writ to the date of judgment, and thereafter at judgment rate until payment.

3. This judgment in turn has spawned two applications. The first is the defendant's application dated 11 August 2001 requesting that there be a stay of execution of the judgment pending the outcome of the defendant's appeal against it. This was followed by the plaintiff's application by summons dated 16 August 2001, which asked that the security for the defendant's costs in the sum of $900,000 (which sum was paid by the plaintiff pursuant to an order of this court of 14 May 2001), together with accrued interest thereon, be released to the plaintiff within five days of the order so made.

4. This latter summons refers to a late application for security for costs which was lodged by the defendant upon becoming aware of certain circumstances surrounding the plaintiff company, which caused concern that if the defendant was successful in the action there would be reason to believe that the plaintiff would be unable to pay the costs. In the event, on the evidence filed pursuant to that application, after some hesitation the court made the order requiring payment in as security for costs, an order which, it should be noted, was satisfied shortly thereafter.

5. There is no need further to consider this application for payment out of this sum currently standing in court because Mr Chong, who appears for the plaintiff at today's hearing, has asked for leave to withdraw that application, an application that was not resisted by Mr Clifford Smith SC, appearing today for the defendant. Neither counsel appeared below. I granted the order in the terms proposed by Mr Chong, so that for present purposes this issue is dead, save to note that I assume that it is the plaintiff's intention that these monies will remain in court pending the outcome of the appeal against the substantive judgment. In any event, given that leave was given to withdraw the application, it is open to the plaintiff at some stage in the future, under possibly changed circumstances, to make further application for the release of these monies. For the moment, however, these monies stay where they are and I hope (and have every expectation) that they are currently being held in some form of interest-bearing account.

6. This leaves outstanding the issue of the stay of execution of the judgment which this court has ordered in favour of the plaintiff at, as I have noted, the conclusion of a nine day trial. I have been greatly assisted by both counsel as to the relevant principles, and it now falls to attempt to apply them in circumstances which, perhaps, are less than usual. I confess that in principle I have a strong predilection against stays of execution. A plaintiff who has come to court and has been vindicated in its claim should have the fruits of that judgment.

7. In mounting his application Mr Smith prays in aid, I think it fair to say, two major points. First, he relies heavily on the evidence that was filed pursuant to the security for costs application, which he says provides a very real degree of concern that if the appeal against the judgment of this court does in fact succeed, and if the judgment sum already has been paid over, such sum will, as a matter of practical politics, be irrecoverable. His second point is that although admittedly there is no Notice of Appeal before the court (in the circumstances of the August vacation, the court perhaps assumes a degree of tolerance that it would not otherwise assume, it being prepared to accept from leading counsel for the defendant that indeed there is a firm decision so to appeal), and whatever else may form the subject of the appeal, the 'Motis point', if I may so term it, is going to form one of the arguments canvassed before the higher court.

8. The judgment itself noted that this is the defendant's most promising point, and certainly the most interesting. The point itself, in the way that it is arisen in this case, appears unencumbered by high authority, and it is perhaps unfortunate that the argument as Mr Kat presented it at trial seems not to have been specifically addressed in Motis itself, albeit it was alluded to in a throw-away line by Mance LJ. Had it not been for the existence of this particular point in the present case, and the recognition of the arguments surrounding it, I would not have viewed this application for a stay of execution with a great deal of sympathy. But it does seem to me, as I have said, that it is a point upon which an appeal may validly be canvassed, and I must therefore take account of that.

9. At the end of the day, therefore, after some reflection given the manner in which this case has been run to date, I am inclined in the exercise of my discretion to accede to the defendant's application for a stay of execution pending appeal. But I do not do this in blank, as it were. I am going to make this a stay on terms, which terms are as follows :

(1) that until further order the judgment sum herein, together with interest accrued to date at the rates specified in the judgment, be paid into an escrow account to be agreed between the parties' respective solicitors within 14 days hereof, alternatively absent such agreement, that such sum be paid into court within the like period to be held in an interest-bearing account;

(2) that the Notice of Appeal in this case be filed and served within 14 days from today, and the appeal be set down within 14 days thereafter;

(3) that the costs of this application be costs in the appeal; and

(4) that there be liberty to both parties to apply.