WEAR ME APPAREL LLC v. LAM NA also known as LIN NA

HCA 149/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 149 OF 2009

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D E C I S I O N

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The application

1. The plaintiff sued the defendant for recovery of a loan of US$800,000.  Judgment for the plaintiff was given by Sakhrani J.  In compliance with a condition for stay of execution pending appeal and by consent, the defendant paid into court the judgment sum of US$800,000.  The Court of Appeal dismissed the appeal.  The plaintiff now applies for payment out of court the sum paid in by the defendant. This is resisted by the defendant who wants an adjournment.

Application for adjournment

2. The Court of Appeal dismissed the defendant’s appeal on 9 April 2013 immediately after the hearing.  The written reasons for decision were handed down on 17 April. 

3. As the judgment concerned a debt that exceeded the benchmark of HK$1,000,000, for the purpose of this application, there is no dispute that the defendant can appeal “as of right” to the Court of Final Appeal pursuant to section 22(1)(a) and 23(2) of the Hong Kong Court of Final Appeal Ordinance, Cap 484 (“HKCFAO”).

4. On 19 April (Friday), the defendant gave notice of intention to appeal against the Court of Appeal’s decision.  On 22 April (Monday), the defendant filed and served an affirmation seeking an adjournment of the plaintiff’s application sine die and stay of execution of the judgment pending conclusion of the defendant’s forthcoming application for leave to appeal to the Court of Final Appeal.

5. No application for leave to appeal has yet been taken out at the time of hearing.

Analyses

6. The net position is that the plaintiff has won in 2 levels of court. There is no order for stay of execution.  There is prima facie no reason for declining a payment out order.  The adjournment is effectively to seek a stay of execution of the judgment.

7. The power to grant a stay vests in the Court of Appeal or the Court of Final Appeal under section 26(1) of HKCFAO.  There is no power to grant an interim stay of execution without there being an application for leave to appeal or pending appeal: DLA Piper Hong Kong v China Property Development (Holdings) Ltd [2010] 2 HKLRD 704,Mr Justice Chan PJ; Joint and Several Liquidators of Kong Wah Holdings Ltd v Grande Holdings Ltd (2006) 9 HKCFAR 79,Mr Justice Ribeiro PJ.  I question the jurisdiction of the Court of First Instance to consider a stay.

8. Mr Chan, counsel for the defendant, submits that the situation of the defendant is “unique”.  Mr Chan submits, and I accept, that the defendant has acted promptly.  I also accept that no counsel would have advised his client to launch an appeal immediately on pronouncement of judgment without waiting to see the reasons for decision.  Mr Chan invites this court to invoke its power under Order 22A, rule 1 of the Rules of the High Court to defer the granting of the payment out.  He submits that the court can consider the trite principles on stay of execution pending appeal under Order 59, rule 13.

9. Order 22A, rule 1 provides as follows:

“1. Money remaining in court

(1)  Subject to Order 22, rule 17, any money paid into court in an action (whether or not in accordance with Order 22) may not be paid out except in pursuance of an order of the Court which may be made at any time before, at or after the trial or hearing of the action.”

It gives wide powers to the court not to order a payment out, but such powers must be exercised judiciously.  The court cannot take into account matters which it cannot consider legitimately.

10. Section 26 of the HKCFAO provides the only source of power for the grant of a stay pending appeal to the Court of Final Appeal.  It cannot be the case that somehow the Court of First Instance can confer power on itself to consider the merits of a stay application by a sidewind when that section is not properly invoked. 

11. Further, the fact that an applicant can appeal under the “as of right” limb does not take away the discretion of the Court of Appeal or Court of Final Appeal when deciding whether or not to grant a stay.  The court is at liberty to consider the merits of the intended appeal and any exceptional circumstances that exist: T v Shiu Wai Tuen CACV No 255/2010, 4.11.2011.

12. In T v Shiu Wai Tuen, the plaintiff also failed in 2 levels of court and could appeal to the Court of Final Appeal as of right.  Despite that, the Court of Appeal took the view that with the concurrent findings of fact, the plaintiff would have very considerable difficulties in asking the Court of Final Appeal to disturb those findings.  For lack of prospects of success on appeal and the absence of exceptional circumstances, the Court of Appeal refused to grant a stay.

13. In the present case, the defendant faces a similar situation.  She has been found by Sakhrani J to be “an evasive, dishonest, untruthful and unreliable witness” (para 13 of the Judgment).  With concurrent findings of fact, the defendant can hardly ask the Court of Final Appeal to disturb those findings.  The defendant has not even begun to show merits in the intended appeal.  The fact that the plaintiff is an overseas company which would make restitution of the judgment sum paid difficult does not assist the defendant. Even if I have the power to do so, the defendant has failed to show any good reason for granting a stay.

14. Mr Chan has also relied on other authorities.  Without disrespect, I do not consider them to be applicable.  In Hammond Suddard Solicitors v Agrichem International Holdings Limited [2001] WECA Civ 2065, the English Court of Appeal was considering a stay of execution on appeal to the Court of Appeal, not to the House of Lords (as was the position then).  Likewise, in First Laser Ltd v Fujian Enterprises (Holdings) Co Ltd & anr, HCA 4414/2001, 28.4.2008, Deputy Judge To (as he then was) was considering a stay in the context of an appeal to the Court of Appeal.  The authority that is directly on point remains T v Shiu Wai Tuen.

Conclusion

15. Taking all circumstances into account, there is nothing before this court that it can legitimately take into account under Order 22A to defer the making of an order for payment out.  This court simply has no jurisdiction to consider a stay of execution.  I therefore decline giving an adjournment and order that there be payment out of the sum in court together with accrued interest to the plaintiff through its solicitors.

16. I also make an order nisi, that the defendant should bear the costs of this application to be summarily assessed on 10 May 2013 at 3 pm on the papers without an attendance.  The defendant shall file and serve her statement of costs by 3 May 2013.  The plaintiff shall file and serve its grounds in opposition by 9 May 2013.

17. I thank counsel for their assistance.