ESQUIRE (ELECTRONICS) LTD v. THE HONGKONG AND SHANGHAI BANIING CORPORATION LTD AND ANOTHER

HCA11077/1994

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.11077 OF 1994

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J U D G M E N T

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1. On 19 July 2005, after a long and difficult trial on liability, I handed down my judgment on liability where I found against the Bank on liability on three bases, namely, breach of fiduciary duty, economic duress and undue influence.  I indicated in my judgment that the parties should come back before me for directions as to the second part of the trial, namely, on Remedies and Reliefs. 

2. Today the parties come before me and they address me on the principle issue that now divides the parties, namely whether the Remedies and Reliefs Hearing should proceed or whether it should be deferred until the Court of Appeal has disposed of the appeal.  The Bank, has indicated to the court that the Bank has decided to appeal against the judgment of the court on liability.

3. The trial on Remedies and Reliefs, undoubtedly, would not be easy or simple.  This is not an easy or simple case.  Various possibilities had been banded about as to how long that trial would take, ranging in estimate from Mr Lee of two weeks and estimate from Mr Fok of four weeks.  I am of course very much aware that at the moment I still do not have the Statement of the plaintiff on Reliefs and Remedies.  I do not underestimate that there may be interim disputes between the parties as to the proper way to go forward.  But I cannot conceive, having lived with this case for many many months that the trial on Reliefs and Remedies would take as long as the trial on liabilities, nor can I conceive that the court should allow more than four or five months for the parties to prepare and take necessary steps leading to the trial on Remedies and Reliefs.  A date has been identified by the listing clerk starting from 22 May 2006 for three weeks to enable the trial on Remedies and Reliefs to take place. 

4. Now, should I order that everything do move ahead or should I stop everything.  That is the question posed by Mr Fok.  Mr Fok suggested that I should order the trial on Reliefs and Remedies to be stopped so that the Bank can pursue the appeal.  The date given that the Court of Appeal is likely to be able to hear the appeal on liabilities is sometime after the summer vacation of 2006, which I take it to be some time in September or October 2006.

5. It has been suggested by Mr Fok I should take into account a number of factors in ordering that there should be a stop.  I will of course do so.  But I start, however, with the first proposition, which is well-recognized, that an appeal does not in anyway operate as a stay of the proceedings, whether of execution or otherwise.  The fact that there is an appeal does not, and should not, in anyway deprive a successful plaintiff who has obtained a judgment on liability from proceeding with Part 2 and, therefore — I think Mr Fok does not dispute this — there is a burden on a proposed appellant to seek from the court an order to reverse what is the norm.  Mr Fok does not say that there is a high burden.  I certainly take the view that there is a very high burden.

6. The fact that costs might have been saved, that is, costs in relation to Part 2, for me, really is not a sufficient ground to order a stay of Part 2.  It is certainly a relevant ground.  For me, even the possibility, or a strong possibility, that the wasted costs of Part 2 might not be recoverable because of impecuniosity of the plaintiff is although also a relevant factor, not a sufficiently strong ground.

7. The judgment on liability has been found on three bases.  The Bank would have to succeed on all three bases, whether in the Court of Appeal or eventually in the Court of Final Appeal, in order that there would be a situation where the costs of the trial on Remedies and Reliefs would be wholly wasted.

8. Of course I cannot say what are prospects of the Bank on this.  It is not minimal.  What can I be at the moment speaking, as the judge who gave a long reserved judgment, is that it is not necessarily that strong.  I do not think therefore this is a case where the court can say that there is a strong prospect of success.  An exceptional aspect of the prospect of success on appeal in this case is the necessity to show a prospect of success on all three grounds.  I am not confident that there is a good prospect of success on all three grounds. 

9. Essentially, my decision on whether I should order a stay of the trial on Remedies and Reliefs is a case management decision.  There is, in my view, a good possibility with the giving of appropriate directions and case management that the trial on Remedies and Reliefs can take place by mid-year 2006.  There is also a good prospect, in my view, that a judgment on Remedies and Reliefs can be given by this Court before the Court of Appeal actually starts to hear the appeal on liabilities.  It is my sincere hope that the appropriate direction would be given by the Court of Appeal so that this does take place, namely that the Court of Appeal would have before them an appeal both on liabilities as well as on Remedies and Reliefs.  But that of course is a matter for the parties to put before the Court of Appeal.

10. As far as I am concerned, by weighing all the factors into the balance, it seems to me that it is far more desirable that the trial on Remedies and Reliefs should proceed.  There should not be a stoppage where nothing happens for many many months, and that the plaintiff some 2.5 years later when it is eventually successful in the Court of Final Appeal, having to come back to this Court to seek Remedies and Reliefs, with further possibilities of that also going all the way to the Court of Final Appeal.  It seems to me it is far more desirable that Remedies and Reliefs be decided as expeditiously as possible. 

11. In all the circumstances, in the proper exercise of my discretion, I am satisfied that I should refuse to order the stay proposed by Mr Fok of trial on Remedies and Reliefs.  I propose therefore to proceed to hear the parties on the appropriate directions to be given.