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HCMP001826/1986
HEADNOTE
A consideration of the limited extent to which stays of execution can be granted pursuant to Order 47 rule 1 of the R.S.C.
Held that on the facts of the present case it was inappropriate to order that there be a stay of execution as it was obvious that the judgment debt could never be discharged.
1986 MP No. 1826
IN THE SUPREME COURT OF HONG KONG
HIGH COURT
MISCELLANEOUS PROCEEDINGS
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BETWEEN
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THE KWANGTUNG PROVINCIAL BANK |
Plaintiff |
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AND |
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CHEUNG TIN MING and CHAO SING KUNG |
1st Defendant |
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KAN SIK MING also known as KAN SIK MING ERIC |
2nd Defendant |
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CHEUNG KIN HWA |
3rd Defendant |
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LUK HUNG |
4th Defendant |
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HOUSTON ENGINEERING & EQUIPMENT LIMITED |
5th Defendant |
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Coram: The Hon. Mr. Justice Mayo in Chambers
Date of Hearing: 5 March 1992
Date of Delivery of Judgment: 5 March 1992
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J U D G M E N T
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1. This is an appeal from an order made by Master Woolley on the 28th January 1992. By this order the Master effectively stayed all forms of execution against the 1st Defendant. The operative part of the order reads:
IT IS ORDERED THAT:
(1)Execution on the Judgment herein dated 3rd October, 1991 he stayed so long as the 1st named 1st Defendant pays the amount of the judgment debt and costs by instalments at the rate of HK$3,000.00 per month on the lst day of each month, the first instalment to commence on the 1st day of February, 1992; and ....."
2. The amount of the judgment debt including interest is a sum in excess of $20 million. The judgment was based upon the Plaintiff's claim against the 1st Defendant on a guarantee and it would appear from the papers, which were before the Master and myself that the 1st Defendant has throughout this litigation acted in good faith and has already had to sell the property he owned to satisfy in part his engagements under the Guarantee.
3. He was a Director of the principal Debtor and has few assets available to him to satisfy the judgment entered against him. He filed an affidavit of means which indicated that his present income is approximately $11,000 per month, and that he is simply unable to make payments which could discharge his indebtedness. This evidence has not been challenged by the plaintiff.
4. Mr. Chong represented the appellant in this appeal. His first complaint is that the Master appears to have proceeded on the basis that the application was made, pursuant to Order 45 rule 11 rather than Order 47 rule 1, which is the rule which was referred to in the note in the margin in the original application.
5. This was a matter of some importance as Mr. Chong submitted that applications under Order 47 were limited to stays of execution of writs of fi-fa. Order 47 rule 1 is as follows:
"1. __ (1) Where a judgment is given or an order made for the payment by any person of money, and the Court is satisfied, on an application made at the time of the judgment or order, at any time thereafter, by the judgment debtor or other party liable to execution -
(a)that there are special circumstances which render it inexpedient to enforce the judgment or order, or
(b)that the applicant is unable from any cause to pay the money, then, notwithstanding anything in rule 2 or 3, the Court may by order stay the execution of the judgment or order by writ of fieri facias either absolutely or for such period and subject to such conditions as the Court thinks fit. "
6. He argued that if a general stay was being applied for the appropriate rule to apply under would be Order 45 rule 11. In that event the Court would only be able to take into consideration circumstances which arose after the judgment had been entered.
7. Mr. Chong also referred me to the notes in the White Book appended to Order 47 rule 1. It was clear from these Notes that any stay granted would be limited to a writ of fi-fa.
8. Mr. Wilson Chan for the 1st Defendant conceded that his application was being made under Order 47 rule 1, and that he was not placing any reliance upon Order 45 rule 11. He argued however that Order 47 could be extended to stays of execution other than those arising by virtue of a writ of fi-fa. He cited as authority for this proposition 2 cases. The first was Canadian Enterprises Corporation Ltd. v. Macnab Distilleries Ltd. (1981) Comm. Law Reports 167 and the second was Orri v. Moundreas (1981) Comm. Law Reports 168.
9. Both of these cases involved the existence of parallel claims. Applications had been made to stay the execution of judgments which had been obtained in the first phase of the litigation pending the determination of the whole of the litigation. In Canadian enterprises, Cairns LJ specifically referred to Order 47 and made an order staying all execution of the first judgment obtained. Canadian Enterprises was referred to in Orri, and Mustill J. as he then was placing reliance upon the judgment of Cairns LJ made a similar type of order.
10. It is evident from a perusal of the rather abridged reports on both of these cases that no.argument appears to have been addressed to the Court on the limited scope of Order 47. Mr. Chong submitted that I should have regard to the wording of the order rather than placing reliance upon the authority of these cases.
11. I am inclined to think that this is the correct approach to adopt. I do not see how it can be right to fly in the face of the clear limitation of the order to execution by way of writ of fi-fa.
12. I also have considerable sympathy for the submissions made by Mr. Chong to the effect that Order 47 rule 1 can not have any application to the present case. Mr. Chan did not attempt to argue that there were any "special circumstances" as referred to in the Rule. He placed reliance solely upon the ground of the lst Defendant's inability to pay the money.
13. It is clear to me from a perusal of the notes appended to the Rule' that where reference is made to payment of a debt being made by instalments it is contemplated that over a period of time the debt will be discharged.
14. That will not be the position in the present case. The 1st Defendant states that he is only able to make payments of at most $3,000 per month. The amount of interest at the rate payable for judgment debts on a sum in excess of $20 million amounts to more than $5,000 per day. What this means is that payment of the indebtedness is not being deferred. It is being forgiven. As was pointed out by Mr. Chong there are no provisions in either the Supreme Court Ordinance Cap. 4 or the Rules empowering the Court to forgive a debt.
15. I am satisfied that the scope of Order 47 is limited to stays of execution on writs of fi-fa, and that there is nothing in the order to empower the Court to order a stay in relation to other forms of execution. To this extent, the order made by Master Woolley was excessive.
16. I am also satisfied that even if I treat the application on the limited basis of an application under order 47 I would be unable to uphold Master Woolley's order. The order is not for the payment of the indebtedness by instalments but amounts to a partial forgiving of the debt. I do not consider that there is any authority for the Court to make such an order. For these reasons, I would allow the appeal and would decline to grant any stay of the judgment in favour of the 1st Defendant, notwithstanding the fact that I feel a large measure of sympathy towards the dilemma he finds himself in. I would make an order nisi that the costs of this appeal will be to the Appellant.
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(Simon Mayo) |
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Judge of the High Court |
Representation:
Mr. K.M. Chong (Lau & Co.) for Plaintiff/Appellant.
Mr. Wilson Chan (Fairbairn Catley Low & Kong) for 1st named 1st Defendant/Respondent.
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