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HCA9/2009
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
ACTION NO. 9 OF 2009
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BETWEEN
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ALEKSANDER JANEZIC |
1st Plaintiff |
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GORAZD SIPEK |
2nd Plaintiff |
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JERNEJ VREG |
3rd Plaintiff |
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MARKO STAMENKOVIC |
4th Plaintiff |
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MATJAZ PRIBOSIC |
5th Plaintiff |
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JURIJ GARBAJS |
6th Plaintiff |
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and |
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YEO TENG HWEE aka YEO TENG HWEE CHRISTOPHER |
1st Defendant |
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FIRST PRIME GROUP LIMITED |
2nd Defendant |
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PACIFIC WEALTH GLOBAL LIMITED |
3rd Defendant |
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and |
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FUBON BANK (HONG KONG) LIMITED |
Garnishee |
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and |
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SHYAM LAL THAKUR |
Claimant |
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Before : Hon Chu J in chambers
Date of Hearing : 3 April 2009
Date of Decision : 3 April 2009
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REASONS FOR DECISION
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1. On 31 March 2009, the claimant obtained from Cheung J ex parte an order for interim stay of two sets of order made by the Registrar. The first order (“the GOA”) is dated 13 March 2009 made in this action whereby the garnishee order in favour of the plaintiffs involving in respect of the 2nd defendant’s accounts with Fubon Bank, the garnishee, was made absolute. The second order is made on 26 March 2009 in HCMP223/2009, whereby the claimant was ordered to pay into court HK$80,000 as security for costs of his appeal against the Registrar’s decision on 13 March 2009. HCMP223/2009 is an Interpleader action brought by the garnishee in which the plaintiffs, the claimant and the plaintiff in another action, HCA124/2009, made competing claims to the money in the 2nd defendant’s bank accounts maintained with the garnishee.
2. Prior to making the ex parte application, the claimant had applied for a stay of the GOA pending appeal against the order, but the application was dismissed by the Registrar with costs on 26 March 2009. The claimant had by notice of appeal dated 1 April 2009 appealed against the refusal of stay. Both the appeal against the GOA (“the 1st Appeal”) and the appeal against the refusal of stay (“the 2nd Appeal”) are scheduled to be heard on 7 April 2009.
3. This is the hearing of the inter-partes summons for the continuing of the ex parte stay until the hearing of the two appeals on 7 April 2009. At the conclusion of the hearing, I grant a stay of the order of security for costs but dismiss the application for interim stay of the GOA. I now reduce my oral reasons into writing.
Stay of the security for costs order in HCMP223/2009
4. As the order for security for costs was made in HCMP223/2009, application for stay of the order should be made in HCMP223/2009 and not in this action. Hence, as a matter of proper procedure, the summons filed on 31 March 2009 should not include a stay of the order for security for costs, and the claimant should have issued another summons in HCMP223/2009 to seek a stay of the security for costs order.
5. Having regard to the fact that the claimant now acts in person (he was previously represented by solicitors and counsel), and the matter stated below, I am prepared to treat the application for stay of the security for costs order as if it was an application made in HCMP223/2009 and to deal with it accordingly.
6. I should also point out that for similar reasons, the appeal against the security for costs order should be made in HCMP223/2009. Insofar as the claimant had included the appeal against the security for costs order in the notice of appeal dated 1 April 2009 filed in this action, this is irregular. The claimant should take step to rectify this.
7. The security for costs ordered on 26 March 2009 was made under Order 23 rule 1 of Rules of the High Court and on the basis that the claimant is ordinarily resident out of Hong Kong. The costs for which security was ordered are in respect of the appeal against the Registrar’s decision made on 13 March 2009 in connection with the competing claims to the money in the bank accounts with the garnishee. As part of her order, the Registrar provided that in the event the security was not paid into court by 2 April 2009, the claimant’s appeal would be dismissed.
8. Under Order 23 rule 1(1)(a) of Rules of the High Court, the Court may order a plaintiff to an action or proceedings before the Court of First Instance to provide security for costs where the plaintiff is ordinarily resident out of Hong Kong and the Court thinks it just to do so, having regard to all the circumstances of the case.
9. In ordinary cases, the power under Order 23 rule 1 to order security for costs may be exercised by the Registrar or a Master. In the present context, however, it is doubtful whether the power can or should properly be exercised by the Registrar having regard to the fact that the security for costs is in respect of an appeal against the Registrar’s own decision. This is different from ordering payment into court as a condition for giving leave to appeal. There is also doubt whether the Registrar’s power extends to ordering the dismissal of the appeal in the event the security is not provided. Additionally, it is doubtful whether the claimant comes within Order 23 rule 1. He is not a plaintiff in HCMP223/2009 and it does not appear that he has made a counterclaim in it.
10. In the circumstances, I consider that the claimant has an arguable appeal against the order for security for costs in HCMP223/2009. I therefore grant a stay of the order for security for costs pending the determination of the appeal against the order.
Interim stay of the garnishee order absolute (GOA) in this action
11. If the court were to grant an interim stay of the GOA pending the 2nd Appeal (i.e. appeal against the Registrar’s refusal of stay), this would tantamount to allowing the 2nd Appeal. This is because the hearing of the 2nd Appeal is to take place on the same day as the hearing of the 1st Appeal (i.e. appeal against the GOA). That being the case, there has to be cogent and strong reasons before the court should exercise its discretion to order an interim stay of the GOA pending the 2nd Appeal. This is because ordinarily a successful litigant should not be deprived of the fruit of the judgment.
12. In considering the claimant’s application, I have taken into account the following matters.
13. First, it is trite law that an appeal does not operate as a stay of the order. Hence, the fact that the claimant is appealing against the GOA does not by itself provide a good reason for allowing a stay of the GOA.
14. Second, the claimant has not demonstrated that he has good prospect of success in the appeal against the GOA. The plaintiffs in this action are judgment creditors, as they had obtained a judgment against the 2nd and 3rd defendants (who are the judgment debtors). As judgment creditors, they are entitled to enforce the judgment by garnishee orders, against monies standing to the credit of the judgment debtors: see section 21 of High Court Ordinance, cap.4 and Order 49 rule 1 of Rules of High court. The plaintiffs’ right to attach the money in the 2nd defendant’s account with the garnishee is therefore not dependant on their establishing that all the money in the account is held on trust for them.
15. In contrast, although the claimant is claiming against the 2nd defendant in HCA521/2009, he has yet to obtain a judgment. Since he is not a judgment creditor, the claimant has to establish he has a better claim to the money in the bank account if he were to successfully oppose the garnishee order absolute. The claimant says he had deposited US$92,894.85 into the 2nd defendant’s account with the garnishee and this is the basis of his claim. However, this will not be sufficient to defeat the plaintiffs’ claim to the money in the 2nd defendant’s bank account. The claimant has to positively show or identify that part or all of the money in the 2nd defendant’s bank account does not belong to the 2nd defendant, but belongs to him (for example, they are money held on trust for him), so that it is not attachable by a garnishee order. It has to be demonstrated that the claimant’s money deposited into the bank account had not been dissipated or become mixed with other funds belonging to other parties. There are no such materials before the court.
16. The claimant points out that the judgment obtained by the plaintiffs is a consent judgment and made at a time when the 1st defendant was awaiting criminal trial or sentence. He seems to suggest that the judgment obtained by the plaintiffs may not be reliable. As a matter of fact, however, the 1st defendant was sentenced on 14 January 2009, before the judgment in this action was entered on 22 January 2009. In any case, the judgment obtained by the plaintiff is a valid and subsisting judgment. In enforcement proceedings, including garnishee proceedings, the court cannot go behind a judgment.
17. In his affirmation made on 31 March 2009, the claimant also contended that without a stay of the GOA, his appeal against the GOA would be rendered nugatory. This argument however ignores the fact that the claimant is not a judgment creditor. The claimant is not in a position to attach his claim to the money in the 2nd defendant’s account with the garnishee. The claimant says the writ in his action was served yesterday. As such, it would be some way to go before the claimant’s action concludes in his favour. Hence, even if he were to succeed in the appeal against the GOA, it does not mean he can lay hands on the money in the bank account. It is therefore, to say the least, premature to conclude that the claimant is bound to suffer irreparable loss or damage if the GOA is not stayed.
18. For these reasons, I refuse the application for interim stay of the GOA pending the appeal against the Registrar’s refusal of stay.
Costs
19. The claimant asked that costs be reserved. I do not agree this is appropriate. The plaintiffs had successfully opposed the interim stay of the GOA, there is no good reason to deprive them of the costs. As to the claimant’s costs of the application for stay of the order for security of costs, it should be made the claimant’s costs in the pending appeal against the GOA. There will be a 50:50 apportionment of the costs involved.
Order
20. Accordingly, I make the following order on the claimant’s summons in this action dated 1 April 2009:
(1) Paragraph 1 of the summons is dismissed.
(2) 50% of the plaintiffs’ costs of the summons be paid by the claimant.
(3) 50% of the claimant’s costs of the summons be the claimant’s costs in the pending appeal against the garnishee order absolute.
21. I also make an order in HCMP223/2009 for a stay of the order for security of costs made on 26 March 2009.
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(C Chu)
Judge of Court of First Instance
High Court |
Mr John Hui instructed by Messrs Oldham, Li & Nie for the plaintiffs.
The claimant unrepresented, appeared in person.
Messrs Wilkinson & Grist for the garnishee, not appearing.
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