XCHRX RE IP LAI FAN

HCSD 10/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

APPLICATION TO SET ASIDE A STATUTORY DEMAND NO. 10 OF 2000

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DECISION
(ON APPLICATION FOR LIFT OF STAY)

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1. This was to have been the hearing of an application on the part of certain persons who are judgement debtors to set aside Statutory Demands served on them.

2. The Statutory Demands had been served on 10 April 2000. On 28 April, the Applicants issued the present applications to set the Statutory Demands aside.

3. On 3 May 2000, the Court informed the Applicants' then solicitors that their applications had been placed before me and that I had ordered that a date be fixed for the hearing of the applications.

4. On 1 June, nearly one month later, the Applicants' then solicitors arranged to attend court on 5 June for the fixing of the date for the hearing of the application. The state of the court's diary, unfortunately, is that the hearing was fixed for 3 November, some five months later.

5. On 26 October 2000, nearly five months after the fixing of the date, the Applicants filed a Notice to Act in person and on the same day they applied to the Legal Aid Department for legal aid.

6. Under Section 15 of the Legal Aid Ordinance and the Regulations, there is a stay of 42 days of proceedings following upon an application for legal aid. This application for legal aid was not served on the Respondent to the application until 31 October.

7. On 2 November, the Respondent issued a summons asking that the stay be lifted. Mr Ng, for the Respondent, has drawn my attention very fairly to a decision of the Court of Appeal in Lee Shiu Ming v. Yeo Hiap Seng (Hong Kong) Limited Civ App No.39 of 1993 in which the Court of Appeal articulated the principles that ought to guide a court when considering whether to lift a stay of proceedings.

8. The guiding principle should be to do justice between the parties. In Nazareth JA's judgment, he indicated that a court should be slow to lift a stay before an application for legal aid is determined, especially if a point of law had to be dealt with by a layman. However, if the court were satisfied that the application for legal aid was an abuse of process, then the court should exercise its discretion to lift the stay.

9. The Applicants have indicated that, at first, they instructed private lawyers and that during the period of some five months between the fixing of the date and 26 October, he had been trying to borrow money from people but had failed to do so. Mr Ip says he was forced by circumstances to apply for legal aid which was his last resort. He had hoped to be represented by private lawyer as he had been before. He says that he is prepared to go on affirmation to depose to his attempts to raise money. Miss Ip, who is his sister, has taken a passive role in this matter and had nothing to add.

10. I am aware of the very substantial lapse of time before the application for legal aid was filed. However, I have to consider what prejudice would be suffered by either party if the stay were lifted in the exercise of my discretion.

11. As far as the Applicants are concerned, they, as laymen, would have to deal with legal submissions as to the true interpretation of certain parts of the Bankruptcy Ordinance. This is because one of the issues that may be arising in this application to set aside the Statutory Demand is whether security held by the creditor which has been offered by another debtor should be taken into account for the purposes of a Statutory Demand on a guarantor, which is the position of the Applicants in the present case.

12. As far as the prejudice to the Respondent bank is concerned, naturally, the fact of the application for legal aid is that there is an automatic stay, which would postpone the hearing of the application to set aside the Statutory Demand, and which would of course, affect the timing of a petition if the Statutory Demands are not set aside. However, that is not a prejudice which is irremediable and I have not been taken to any evidence to show what real prejudice would be suffered by the Respondent bank.

13. Accordingly, weighing the prejudices that may be suffered by either party to these proceedings, in the exercise of my discretion, I feel compelled not to lift the stay and accordingly, the Respondent's summons for lifting the stay is dismissed.