THE JOINT & SEVERAL LIQUIDATORS OF UNITED PACIFIC TRADING LTD (IN LIQUIDATION) v. LIAO ZHE

HCCW 424/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 424 OF 2006

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D E C I S I O N

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1.  This is an application by the respondent that the execution of an order I made on 21 May 2009 be stayed pending determination of his appeal.The order made on 21 May 2009 was pursuant to section 221 of the Companies Ordinance, Cap. 32 and it requires the respondent to attend court and be orally examined by the liquidators and to produce documents as specified within 42 days thereof.

2.  On 17 June 2009, the respondent filed the Notice of Appeal.This summons to stay execution of the order pending appeal was issued on 18 June.

3.  I need to consider first whether the order being the subject of the appeal is interlocutory or final.

4.  If the order is interlocutory, leave to appeal is required, pursuant to section 14AA(1) of the High Court Ordinance, Cap. 4.Under Order 59 rule 2B, leave must first be sought within 14 days from the judgment of the Court of First Instance whose order is being appealed.If leave is refused, the party has a further 14 days in which to seek leave from the Court of Appeal as provided by Order 59 rule 2A.No leave to appeal has been sought by the respondent.

5.  Under Order 59 rule 21(3), a direction may be sought from the judge who made the order whether the order is one that is referred to in Order 59 rule 21(1)(a), namely, that it is an order determining in a summary way the substantive rights of a party to an action.The respondent has not sought any direction from the court before he filed the Notice of Appeal on 17 June 2009.

6.  If leave to appeal is required, and leave has not been sought, the appeal instituted by the Notice of Appeal is not competent.It would not be appropriate in this situation to grant a stay pending appeal.

7.  Mr Maurellet for the liquidators referred the court to Re Kong Wah Holdings Limited & Another [2005] 1 HKLRD 847.The orders on appeal in that case were an order for oral examination under section 221 and an order refusing to stay or dismiss the application for oral examination until the delivery of verdict in criminal proceedings.Rogers VP stated in paragraph 19 as follows:

“For completeness, it should be mentioned that in correspondence prior to the hearing of this appeal, the question was raised as to whether this matter involved an interlocutory or final decision.It is quite clear that these were interlocutory orders in the winding-up proceedings.This is made clear for the avoidance of doubt.”

8.  To my understanding, appeals from orders for examination or production of documents under section 221 have been heard by a 2-member court of the Court of Appeal, on the basis that the orders are interlocutory rather than final orders.

9.  For these reasons, I must dismiss the respondent’s application to stay execution of the order pending appeal.It is not necessary to go into the merits or otherwise of the grounds of appeal.

10.  As the time limit for appealing has expired before an application for leave to appeal is made, if the respondent is minded to pursue an appeal against the order for examination and production of documents, it seems what he should do is to make a composite application to the Court of Appeal for leave to appeal and for extension of time for appealing, and for a stay pending appeal if leave is granted.

11.  Costs of the application should follow the event.I make an order for gross sum assessment.I have considered the statement of costs provided by the liquidators’ solicitors and the objections raised by Mr Chong on the respondent’s behalf.

12.  In my view, I do not find work done under items C and D to be unreasonable or unnecessary.However, I will reduce the amounts claimed under those items.The figure I arrive at on gross sum assessment is HK$43,050 and this amount is to be paid by the respondent to the liquidators as their costs for this application.