LIU XIAN FENG SAM AND ANOTHER v. LIU BO AND OTHERS

CACV 112/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 112 OF 2006

(ON APPEAL FROM HCA NO. 5474 OF 2001)

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J U D G M E N T

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Hon Tang JA (giving the judgment of the Court):

1.  On 17 January 2006, after trial.  Yam J made, inter alia, the following orders:

"IT IS DECLARED that

1. All credit balances in the following accounts with Hang Send Bank Limited belong to the 1^st and 2^nd Plaintiffs:-

(1) account no. 266-XXXXXX-XXX in the name of Liu Bo (the 1^st Defendant);

(2) account no. 266-XXXXXX-XXX in the name of Liu Bo (the 1^st Defendant);

(3) account no. 266-XXXXXX-XXX in the name of Liu Bo (the 1^st Defendant);

(4) account no. 266-XXXXXX-XXX in the name of Easy Super Limited (the 2^nd Defendant); and

(5) account no 266-XXXXXX-XXX in the name of Easy Super Limited (the 2^nd Defendant).

IT IS ORDERED that

5. All debts due or accruing due from the Standard Chartered Bank (HK) Limited to the 1^st Defendant be attached to answer the judgment referred to paragraph 3 above; and that unless the Standard Chartered Bank (HK) Limited within 14 days from service applies to vary or discharge this Order, the Standard Chartered (HK) Limited do pay to the 1^st and 2^nd Plaintiffs the debt due from the Standard Chartered Bank (HK) Limited to the 1^st Defendant, or so much thereof as may be sufficient to satisfy the said Judgment."

2.  The 1^st defendant has appealed against that judgment (and the case number was CACV 60 of 2006).  On 26 January 2006, Yam J ordered a stay of execution of his order dated 17 January 2006 pending the 1^st defendant's appeal:

"… on condition that the 1^st defendant shall provide security for costs for the aforesaid appeal in such an amount as acceptable to a master of the High Court within 21 days hereof."

3.  No security has been provided so far because it was understood that Yam J's order of 26 January 2006 required the plaintiffs to provide a skeleton bill of costs of the plaintiffs' costs of the appeal and an assessment by a master of the amount of security required.

4.  This is the 1^st defendant's appeal against the order of 26 January 2006.

5.  It is common ground that the 1^st plaintiff is a resident of the United States of America and the 2^nd plaintiff is a foreign company.  Neither of them has any substantial link with Hong Kong.

6.  The 1^st defendant submitted that unless a stay of execution is granted pending appeal, the plaintiffs would be able to obtain payment of sums in bank accounts which have been frozen as a result of a mareva injunction granted in the action.

7.  In that event, his appeal would be rendered nugatory, because he would not be able to obtain repayment from the plaintiffs, should his appeal be successful.  The plaintiffs are not willing to supply any security for repayment in such an event.

8.  It is not known why Yam J imposed the condition when he granted a stay.  If the plaintiffs wished to have security for costs of the appeal, the proper course was for them to apply for security for costs to this court.

9.  Although we are concerned with an exercise of discretion, we believe we can interfere because we do not believe it was right to make the granting of a stay of execution conditional on the provision of security for costs of the appeal.  Since we do not know the basis upon which the judge exercised his discretion, and the condition being a highly unusual one, we agree with Mr Collins, who appeared for the plaintiffs, that the judge allowed the application for stay of execution to be "intertwined" with an application for security for costs of the appeal.  In other words the judge was influenced by an extraneous consideration.

10.  Since it is accepted that the plaintiffs have no connection with Hong Kong, we would allow the appeal and order that the order of 17 January 2006 be stayed pending the disposal of the appeal in CACV 60 of 2006 or further order to the extent that no payment out in favour of the 1^st and 2^nd plaintiffs be made in respect of any of the funds, the subject of the mareva injunction granted by Deputy High Court Judge Fung on 24 October 2005.

11.  To that extent the appeal is allowed.  We also make an order nisi for costs that the costs of this application be costs in the appeal in CACV 60 of 2006.