YIXING MING XING COAL CO., LTD AND ANOTHER v. HUMPHREY & SONS LTD

HCMP 2400/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 2400 OF 2011

(ON AN INTENDED APPEAL FROM HCMP NO. 2108 OF 2011)

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BETWEEN

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JUDGMENT

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1.  The background to these proceedings is complicated. It arose out of a contract made between the 1^st and 2^nd Plaintiffs on one part, and the Defendant on the other part over the sale by the Defendant to the Plaintiffs of a quantity of coal.

2.  As I understand it, under the contract of sale, the Plaintiffs have paid the Defendant 40% by way of deposit, the other 60% was to be paid by letter of credit.  A dispute has arisen between the parties.  According to the Plaintiffs, they have already paid the Defendant in full because apart from the 40% deposit, they have paid certain amount by way of deposit on a further quantity of coal over which they have an option to purchase.  When the two sums are added together, the Plaintiffs have overpaid the Defendant. 

3.  The Defendant's defence is not entirely clear.  It seems to be the defence that they have not been paid the 60% and they are entitled to be paid. However, their case over the deposit in relation to the further quantity of coal is equivocal. 

4.  In the meantime, the Plaintiffs have applied for an interim mandatory injunction which was granted by Yam J on 4 November 2011.  On 22 November 2011, Yam J refused leave to appeal. 

5.  By summons issued on 22 November 2011, the Defendant has asked for leave to appeal and a stay of Yam J's order in the meantime. 

6.  This afternoon, I have heard the counsel for the parties in relation to the question of stay pending the application for leave to appeal. 

7.  Without going into the merits of the matter, it seems to me that this is a case for a stay pending application for leave to appeal.  Essentially, on the basis that on the evidence before me, it seems that damages would be an adequate remedy to the Plaintiffs.  That being the case, the court should be very slow to grant an injunction, particularly a mandatory injunction.  So on that basis, I am prepared to grant a stay pending application for leave to appeal. 

8.  Ms Yang, who appears for the Plaintiffs, submitted that a stay should, in any event, not be granted because the Defendant, not having complied with Yam J's order, is unlikely to do so pending the application for leave to appeal. And that even if the Plaintiffs were in the meantime to apply to commit the Plaintiff for contempt that would either be adjourned or not dealt with pending the application for leave to appeal.  But that is not a correct basis for refusing a stay, because for as long as the order remains subsisting, the Defendant should comply with it.  An application for leave to appeal does not operate as a stay.  I think litigants should be aware that orders of the court must be obeyed.  That is so, even if they intend to appeal or have actually applied for leave to appeal.  The proper thing for them to do is to apply for a stay which is what the Defendant has done. 

9.  As I have said, on this limited basis, I will grant a stay.  In the circumstances of this case, it is obviously desirable that the application for leave should be disposed of as quickly as possible, and I will suggest to the clerk in charge of fixing a date for the hearing, if possible an early date should be found for the hearing. 

10.  As far as cost is concerned, I think it should be costs in the cause of application for leave to appeal.