MAZEL LTD v. HAO LIN INVESTMENT (HONG KONG) LTD

HCMP 853/2020

[2024] HKCFI 1786

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 853 OF 2020

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DECISION

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The Applications

1.  This Court handed down its Reasons for Decision on 29 January 2024.

2.  By a summons dated 2 January 2024, the Defendant applies for the determination of the following issues:

(1)  Whether leave is required to appeal against this Court’s decision dated 27 December 2023 (the “Order”) dismissing the Defendant’s appeal against the decision by the Master to allow the Plaintiff to enforce the Tomlin Order.

(2)  If leave is required, whether leave should be granted to the Defendant to appeal to the Court of Appeal against the Order; and

(3)  Whether the execution of the Order should be stayed pending the appeal.

3.  As this Court made its order on 27 December 2023, but handed down its Reasons for Decision on 29 January 2024, the Defendant has taken out another application by way of a summons dated 19 February 2024 seeking leave to amend its draft Notice of Appeal.

4.  The Plaintiff sensibly has no objection to the same. Accordingly, I will grant an order in terms of the summons dated 19 February 2024.

The Leave Requirement

5.  Mr Cheng for the Plaintiff very fairly accepts that despite the relief sought in the Originating Summons dated 16 June 2020 includes an order for delivery of vacant possession of the Property whilst the Order does not, the underlying action has nevertheless been completed (save and except for enforcement, and perhaps possible appeals).

6.  This Court’s decision is the enforcement of the Settlement Agreement which was voluntarily entered into by both parties with full legal advice. Mr Cheng accepts that once the Settlement Agreement is enforced in full, it must be the ultimate determination of the parties’ substantive rights under RHC, O.59, r.21(1)(a).

7.  I agree that this Court’s decision finally and summarily enforces the Tomlin Order against the Defendant, accordingly, no leave is required.

8.  As such, there is no need for this Court to deal with the leave application itself.

Stay of Execution Pending Appeal

9.  The applicable legal principles are well established. (See: Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84 at §§6-10, per Ma J. (as he then was.)

10.  I am of the view that no stay of execution should be granted because, first, the Defendant has not put forward any arguable grounds of appeal. Mr Ng’s submissions that there are reasonable grounds of appeal are a re-run of his submissions before this Court. At the end of the day, this Court is simply not convinced that the parties could never compromise claims involving an element of potential illegality. I should not repeat this Court’s analysis in the Reasons for Decision.

11.  Given that this Court is not convinced that there exist arguable grounds of appeal, no stay will be granted.

12.  In any event, the Order is a money judgment and thus the burden is on the Defendant to prove that there is an appreciable risk that the Plaintiff would not be able to repay the sums recovered under the Order, especially when the Plaintiff is willing to pay all the sums recovered into Court pending the outcome of the intended appeal.

13.  The Defendant has not offered any evidence concerning its financial capability. It is fair to say that it is up to the Defendant to satisfy the Order by paying the agreed sum. In such a scenario, there will not be any concerns about enforcement against the Property.

14.  Mr Cheng also helpfully referred this Court to the case of Citibank N.A. v Days Properties Ltd CACV 192/2013 (29 November 2013), where the Court of Appeal refused to grant a stay of execution pending appeal against a money judgment (which was supported by a possession order in default of payment) and held at §22 that:

“…we are of the view that one cannot say that the appeal would be rendered nugatory if a stay is not granted. The execution of the judgment would give possession of the Properties to the Plaintiff. But there is no order for sale in place. Whilst there might be inconvenience to the occupants, in our judgment that sort of inconvenience is not the same as the irreversibility of a sale of the properties. Moreover, as submitted by Ms Sit, such inconvenience is self-inflicted because it was always within the power of the Defendant to pay up the money judgment (whether by re-financing or otherwise) and the Defendant only chose not to do so.”

15.  I agree with Mr Cheng’s submission that there is no order for sale or an order for possession, concerning the Property, there is also a fair chance that the intended appeal would have already been disposed of before the Order is fully executed.

Disposition

16.  For all the reasons stated above, I will make the following orders:

(1)  no leave is required for the intended appeal;

(2)  The application for stay of execution pending appeal is dismissed.

17.  As far as costs of this application is concerned, I am of the view that as no leave is required for the intended appeal and the Defendant’s application for stay of execution pending appeal is dismissed, a proper costs order is costs to follow the event, namely, the Defendant to pay the costs of and occasioned by the Defendant’s summons dated 2 January 2024 to the Plaintiff forthwith, to be taxed on a party to party basis, if no agreement can be reached. This is a costs order nisi. Unless an application is taken out to vary the same within 14 days from the date herein, the costs order nisi will be made absolute after the expiry of the 14-days period.

18.  Finally, it remains for this Court to thank Mr Cheng for the Plaintiff and Mr Ng for the Defendant for their assistance to this Court.