GLORY SKY FINANCE LTD v. CHEN JIANHUA AND ANOTHER

HCMP 2482/2014

[2018] HKCFI 1357

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2482 OF 2014

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DECISION

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The summonses

1.  By my judgment dated 15 March 2018 (the “Judgment”), I ordered the plaintiff to within 14 days from the date of the judgment pay into court the sum of HK$1,500,000 pursuant to Order 2, rule 3 of the Rules of the High Court.

2.  By summons dated 28 March 2018, the plaintiff seeks leave to appeal against the Judgment, and a stay of execution of the Judgment pending final determination of the application for leave, and if leave be granted, of the appeal.  The plaintiff estimated the length of the hearing to be 3 hours.  The application was set down to be heard before me on 21 June 2018.  No payment-in was made in compliance of the Judgment in the meantime, and no order for any stay was obtained before the deadline for compliance.

3.  By summons dated 4 April 2018 returnable before a Master, the defendants seek an unless order that unless by 4 pm on 18 April 2018 (which date will have to be adjusted if I am to grant it) the plaintiff do make the payment-in, the plaintiff’s claim be dismissed with costs.

4.  By another summons dated 11 April 2018 returnable before another Master, the plaintiff seeks an order that the time for compliance of the Judgment be extended until the determination of the plaintiff’s application for leave to appeal against the Judgment, or should leave be granted, the appeal.

5.  The two summonses have been adjourned to be heard togetherbefore me.

The law

6.  The applicable legal principles are not controversial.  As can be gleaned from paragraph 59/13/1 of Hong Kong Civil Procedure 2018 and the authorities referred to therein:

(a)   whether or not to grant a stay is entirely in the discretion of the court.  Some of the relevant considerations when deciding how that discretion should be exercised are as follows;

(b)   the most important consideration in respect of whether a stay of execution should be granted is whether there are strong grounds of the proposed appeal.  That hurdle is higher than that of chances of success for considering whether leave to appeal should be granted.  Neither the court below nor the Court of Appeal will grant a stay unless satisfied that there are good reasons for doing so.  Unless a stay can be justified by good reasons, one will not be ordered;

(c)   the court is likely to grant a stay where the appeal would otherwise be rendered nugatory.  Hence, a stay may be granted when, in the case of a judgment for payment of damages, there will be no reasonable prospect of the defendant recovering the damages if no stay is ordered and in the event of the appeal succeeding; or the enforcement of the judgment under appeal would result in the appellant’s house being sold or his business being closed down;

(d)   a stay should only be granted where there are good reasons for departing from the starting principle that the successful party should not be deprived of the fruits of the judgment in his favour.  

The submissions, and my consideration

7.  Ms Bianca Yu appearing for the defendants submits that the filing of an application for leave to appeal does not operate as an automatic stay.  No evidence has been filed by the plaintiff in support of its application for stay or extension. The application should be rejected.  She submits further that in the light of the plaintiff’s history of flouting court procedures and orders (as I have set out in the Judgment), the application for an unless order should be granted. She refers me to paragraph 23/3/18 of Hong Kong Civil Procedure 2018 which explains the bases of the Court’s powers to so order.

8.  Mr Ching appears for the plaintiff.  No evidence has been filed in support of its application.  For reasons unknown to me, Mr Ching decided not to file any written submissions in the usual way but chose to issue a letter on his firm’s letterhead addressed to my clerk and asked the same to be placed before me.  I have considered the contents of the letter nonetheless. 

9.  Mr Ching submits that the application for stay of execution ought to be heard together with the application for leave to appeal set down to be heard on 21 June 2018, for the stay application will depend heavily on the merits of the leave application.

10.  I handed down the Judgment on 15 March 2018.  The 14‑day period started to run from that date.  No payment-in as ordered was effected.  No order for stay was obtained during that period.  It was incumbent upon the plaintiff to do that.  The mere taking out of the summons for leave to appeal did not operate as a stay.  The fact that the hearing for leave and stay will only take place on 21 June 2018 cannot stop the defendants from seeking to enforce the Judgment in the meantime, as they are entitled to.

11.  Mr Ching is correct in submitting that the merits of the appealis an important consideration.  No attempt has however been made during this hearing to demonstrate that there are strong grounds for the appeal.  Indeed, Mr Ching makes no submission in that regard save to assert that there has been no appellant authority on how the power to order payment-in under the relevant rules should be exercised.  This is hardly sufficient.

12.  Then Mr Ching submits that “The Plaintiff is obtaining transcripts of the hearing that took place on 27^th April 2017, and more importantly, confirmation and clarification of the scope and nature of the falsity of the title deeds as reported by the police, in writing” and “The information and documents that the Plaintiff is seeking may have significant bearing on the grounds of the leave application, as well as, the merits of the appeal.”  By implication, Mr Ching is indicating that the plaintiff may be seeking to adduce new evidence for the appeal.  No attempt has however been made to try to show that the criteria for the adducing of new evidence for appeal can be satisfied.  This is particularly so in respect of the transcript of the hearing on 27 April 2017.

13.  Then Mr Ching submits that the payment-in will stay in court, and the defendants will not be prejudiced by any stay.  That by itself is no good reason to order a stay.  If anything, it shows that any refusal of stay will not render any successful appeal nugatory, as the payment-in can simply be paid out back to the plaintiff if the need arises.

14.  Mr Ching further submits that “the evidence before the court is that, the Plaintiff is carrying on the business of a licensed Money Lender,the payment-in will have the effect of reducing the liquidity of the Plaintiff by a substantial amount, thereby reducing the actual or at least potential ‘profitability’ of the Plaintiff.”  As I have observed above, the plaintiff has filed no evidence in support of its application for a stay or extension.  Mr Ching cannot give evidence for it.  This is not a case, and has not been shown to be a case of, for example, the judgment debtor not being able to recover the damages paid over in the event of the appeal succeeding, or him being forced to sell his house or close his business.  I am not saying that these are the only cases where a stay will be ordered.  What I am saying is that there is no evidence from the plaintiff showing what the effect of any refusal of a stay or extension may have on it.

15.  Mr Ching then submits that “the sanction as sought in the Unless Order is not one provided by the Rules of the High Court.  If the action is dismissed, then the Plaintiff will not be able to proceed with the stay application and the leave application.”  The simple answer is that the plaintiff should comply with the Judgment.

16.  Mr Ching further submits, the matters raised in his letter having said, that “the Plaintiff is prepared to agree that these proceedings be stayed pending the determination of the stay application and leave application, with costs reserved.”  That may be what the plaintiff wants, but that is contrary to what the underlying objectives of the Rules of the High Court seek to achieve, namely “to ensure that a case is dealt with as expeditiously as is reasonably practicable”. 

Disposal

17.  Having considered parties’ submissions, and having balanced all relevant considerations, I dismiss the plaintiff’s summons for an extension. Having considered the history of the matter and the plaintiff’s conduct as I have set out in my Judgment, I allow the application for an unless order. I will proceed to hear submissions on its exact terms and the issue of costs.