WING HANG BANK LTD v. KIT CHOY DEVELOPMENT LTD AND ANTOHER

HCMP 5172/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 5172 OF 2002

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BETWEEN

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J U D G M E N T

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1.  This was an appeal against a decision of Master Roy Yu given on 10 March 2009 by which he gave directions for the taxation of the bills of costs presented by the Plaintiff, the Wing Hang Bank Limited, against the 1^st and 2^nd Defendants, Kit Choy Development Limited and Mr Choy Bing Wing. The hearing before Master Yu on 10 March 2009 was the call over hearing of the Appointment to Tax, which had been taken out by the Plaintiff on 8 January 2009.

2.  The Defendants contend that the directions (to the effect that the Defendants should file their list of objections to the bills) should not have been given. As I understood Mr Choy, who appeared in person, he submits that Master Yu had no jurisdiction to embark upon the taxation. The basis for this contention is that:-

(1) The order containing the costs order which underlies the taxation is under appeal, and until such appeal is disposed of, the Defendants cannot settle any list of objections; and

(2) The order in question is currently the subject of a stay.

3.  The Appointment to Tax related to the costs of these proceedings, in which judgment was given against the Defendants for amounts owing to the Plaintiff under banking facilities granted by the Plaintiff to the 1^st Defendant, guaranteed by the 2^nd Defendant, pursuant to which the Plaintiff had issued Letters of Guarantee in favour of third parties at the request of the Defendants. The facilities were secured by a mortgage over property owned by the 1^st Defendant, which was rented out to the operator of a home for the elderly.

4.  The judgment against the Defendants included orders for the payment of the sums outstanding under the facilities, interest, and costs against both Defendants. It also included an order for possession of the property against the 1^st Defendant.

5.  The Defendants, being dissatisfied with the judgment, have appealed against it. The appeal has not made much progress. The Defendants had applied for transcripts and recordings of the hearing which resulted in the judgment against them. As I considered that they might need a record of the proceedings for the purposes of their appeal, I authorised the release of a transcript of the proceedings to the Defendants, on payment of the usual charges. The transcript has been prepared, but it has not been collected by the Defendants.

6.  This seems to be because the Defendants insist on having the audio recording of the proceedings as well. I have not acceded to this request, as it seems to me that it is unnecessary for them to have both a transcript and an audio recording. The transcript has been prepared on the basis of the audio recording, and unless there is reason to suppose that the transcript is inaccurate or incomplete (a suggestion which cannot reasonably be made by the Defendants who have not yet examined it), I can see no justification for the provision of the audio recording as well.

7.  This point has no sound basis. The appeal, if it eventually takes place, will be based on arguments as to the merits of the proceedings. It will involve an examination of the facts of this case and the relevant legal principles to be applied. It has nothing to do with the taxation of the Plaintiff’s costs of the proceedings. There is no reason why the Defendants cannot raise such objections as they may have to the Plaintiff’s bills of costs independently of whatever happens in relation to the appeal, and whatever points are taken in it.

8.  Further, and in any event, the delay in progressing with the appeal appears to lie wholly at the Defendants’ door. Given the availability of the transcript, there is, in my view, no good reason for them not to make progress with their appeal. Thus, even if the failure to resolve the appeal could conceivably impact on the Defendants’ ability to settle a list of objections (which I do not consider to be the case), this would be due to their own conduct, and is not something that they can take advantage of so as to delay the taxation.

9.  The other point raised by the Defendants is a suggestion that the order containing the costs order is the subject of a stay of execution.

10.  It is correct that the Defendants did apply for a stay of execution. However, that application has not been resolved. It first came on for hearing on 20 December 2006, nearly two and a half years ago. On that occasion, the application was adjourned to a date to be fixed, and an interim stay, limited to the order for possession, granted.

11.  No explanation has been provided by either party for the failure to restore the application for a stay of execution for hearing. However, what is clear is that the only part of the judgment that was stayed on an interim basis was the order for possession against the 1^st Defendant. That being the case, the rest of the order was not the subject of any stay of execution, since neither the existence of the appeal, nor the making of the stay execution, would of themselves give rise to a stay of execution.

12.  In these circumstances, I think that Mr Tang, who appears for the Plaintiff, is right to say that given that no stay has in fact been ordered in respect of the rest of the judgment, it is open to the Plaintiff to proceed under the rest of the judgment, including the costs order in its favour.

13.  It therefore seems to me that Master Yu not only had jurisdiction to deal with the taxation, but was right to do so. The Defendants appeal is without merit, and I therefore dismiss it with a costs order nisi that the Defendants are to pay the Plaintiff’s costs of this appeal, such costs to be taxed on the party and party basis if not agreed.