XCHRX MA HON FONG, JOSEPH v. CITIWEALTH INTERNATIONAL LTD. AND ANOTHER

HCA 3623/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 3623 OF 2000

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REASONS FOR DECISION

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1. This is an appeal against the decision granting to the Defendants a stay of execution of a summary judgment on condition that the Defendants shall pay a sum of $75,000.00 into Court on or before 23 July 2000 and thereafter pay a monthly sum of $80,000.00 until satisfaction of the judgment or until disposal of the appeal.

2. In fact the judgment itself provides for scheduled monthly payments in accordance with a deed of settlement. The Plaintiff claims against the Defendants for a total of $916,000.00 being the balance due to the Plaintiff from the Defendants under the deed of settlement. On 29 June 2000, summary judgment was granted in favour of the Plaintiff against the Defendants. The Defendants then appealed against the order for summary judgment which appeal was originally set down for hearing on 27 September 2000. By consent of the parties, the appeal had been re-scheduled and put off until 2 November 2000.

3. On 6 July, the Defendants applied for and was granted on 20 July 2000 a stay of execution of the judgment which is the subject matter of the present appeal. It is trite law that a judgment creditor should not be deprived of the fruits of the litigation and that an appeal does not operate as a stay. Normally, a stay will only be granted if there are good reasons to believe that the judgment sum if paid to the judgment creditor, would likely be irrecoverable should the appeal be successful.

4. Clearly with that in mind, the Defendants through its chairman, Mr Li Cheung Hing, Albert, filed an affirmation in which he suggests that the Plaintiff is an avid gambler, at least with respect to horses and that he has a history of misappropriating funds. The allegation of the Plaintiff misappropriating fund, so I am told, is in fact the allegation raised by the Defendants in another action. The allegation of horse-racing is vague and certainly not a valid ground itself for saying that the Plaintiff is somehow impecunious. In fact despite the effort of Mr Pedruco on behalf of the Defendants, there is no positive evidence from the Defendants in connection with the financial capability or otherwise of the Plaintiff, other than the bare allegation and the vague suggestion that there is a risk of the Plaintiff being unable to re-pay the judgment sum.

5. It is not disputed that the Plaintiff and his younger sister together hold about 40% shares of the 1st Defendant which in terms owns all the shares of the 2nd Defendant. There is also clear suggestion that the 2nd Defendant is making a goods profit each month.

6. It is not disputed that the Plaintiff's younger sister is in fact the guarantor under the guarantee in question. On the evidence before this Court, there is no valid basis for suggesting at all that the Defendants will be unable to re-pay the judgment sum should the appeal be successful. While matter of this kind does involve an relevant element of discretion. But the discretion must be exercised judicially.

7. On this evidence before the Court, there is no basis for saying that the appeal will be rendered negatory if the stay of execution was not granted in favour of the Defendants.

8. I do not intend to go into the merit of the appeal in question and for the purpose of the present appeal, I am prepared to proceed on the basis that the Defendants do have a strong arguable case. Yet I am persuaded that the discretion to grant the stay in the circumstances had been wrongly exercised. In the circumstances, the appeal must be allowed. The order for the stay of execution of the judgment is set aside.

9. The payment into Court by the Defendants can be paid out to the Plaintiff forthwith as partial satisfaction of the judgment.