FAN YUXI v. LINBIAO TANG AND OTHERS

HCA 2032/2020

[2021] HKCFI 3598

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2032 OF 2020

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DECISION

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1.  In support of the application for stay of execution, the 4^th defendant relies on the affirmation of Ho Ching-hung Antonio from those acting for him.  It must be pointed out that in paragraph 4, it was deposed that the plaintiff’s application for making the garnishee order nisi absolute was last adjourned for the 4^th defendant to seek legal advice on possible grounds of appeal of the decision of this court handed down on 7 September 2021, the very day of the last hearing of the plaintiff’s application.  It is not entirely accurate to say that.

2.  Of course, the court was put on notice as to the intention of the 4^th defendant to appeal on that day, but what the court did was merely to adjourn the matter on the basis that both parties should be afforded with reasonable opportunity to consider fully the decision of this court and to consider what to do.  But to say that this court adjourned the matter to enable the 4^th defendant to seek legal advice on possible grounds of appeal was too specific to be accurate.  This court never said that.  This court never indicated that.  That has to be clarified for the record.

3.  Regarding the application for stay of execution, to begin with, there was this letter from the solicitors for the 4^th defendant dated 27 October 2021.  By that letter, what the 4^th defendant’s solicitors suggested was that a notice of appeal has been filed and served on 5 October 2021, and because the appeal is pending, they have advised the 4^th defendant to apply.  According to that letter, it was stay of proceedings, but I would have thought that they must be referring to stay of execution of the judgment. The paragraph following that was their proposal to adjourn the hearing today pending the conclusion of the appeal.

4.  It is not easy to understand precisely what that letter intended to do, save and except that it proposed to adjourn today’s hearing pending the conclusion of the appeal.  But the reality is that given the decision of the court handed down on 7 September, the plaintiff has become prima facie entitled to a garnishee order absolute.  It is also trite that an appeal does not amount to stay of execution of the judgment being challenged.  Order 59 rule 13 of the Rules of the High Court makes it clear.  Notwithstanding that letter just referred to, no application has been taken out for stay of execution of the judgment until after the plaintiff has lodged and served their skeleton submissions for today’s hearing.

5.  Insofar as the application for stay of execution is concerned, it is also trite that strong grounds of appeal would be the prerequisite and this is significant in the circumstances of the case.  In order to set aside the original judgment, which was the subject matter of this court’s decision, the 4^th defendant bore the burden of showing that their defence has real prospect of success; in other words, not just arguable.  The 4^th defendant failed that; hence, this court’s decision.

6.  In applying for stay of execution and regarding the merits of the appeal, the hurdle is even higher than that of chance of success for considering whether leave to appeal should be granted.  The norm is that the court does not deprive a successful party of the fruit of litigation because there is a pending appeal.  Stay of execution will not be ordered unless there is good reason.  All these could be found set out in summary under paragraph 59/13/1 of the White Book.

7.  In the circumstances of this case, where the plaintiff lodged a monetary and proprietary claim, it may be argued that there could be good reason why a stay of execution should be granted by reference to the possible concern about prospect of recovery if the intended appeal succeeds.

8.  In the present case, the plaintiff is very much a foreign party.  In order to address that, the plaintiff has offered undertaking in terms as set out in the plaintiff’s counsel’s skeleton submission, effectively, that the amount of the judgment together with interest and fixed costs shall be paid by the garnishee upon the order being made absolute but will be kept at the client account of the plaintiff’s solicitors maintained with the specifically named bank pending the determination of the appeal.  Such undertaking, in my view, is fair, reasonable and adequate.  The plaintiff stands by such undertaking insofar as this court considers that to be necessary.

9.  Looking at the matter from another angle, if any stay of execution is to be granted, the 4^th defendant in the circumstances of this case would have expected nothing less than stay of execution upon the condition of payment of the judgment sum into court.  What the 4^th defendant fails to note is that upon the execution of the judgment by making the garnishee order absolute, there would be no need to continue the existing injunction against the 4^th defendant. It is not something immaterial because the defendant has also complained about that injunction during the last hearing, albeit as already explained in this court’s decision, arising out of the defendant’s banker’s own administration decision.

10.  All matters considered, this court considers that insofar as the application for stay of execution is concerned, this court is not satisfied that the 4^th defendant manages to demonstrate sufficient grounds for the stay.  The court would accept the plaintiff’s undertaking which the court considers to be a fair, reasonable and adequate assurance which will serve both parties’ purpose. 

11.  I now order that:

(1)  the garnishee order nisi to be made absolute;

(2)  upon the plaintiff’s undertaking as set out in paragraph 5 of the skeleton submission of the plaintiff’s counsel (mentioned above), the injunction granted ex parte on 3 December 2020 and continued on 11 December 2020, 8 January 2021, 29 January 2021 and 7 September 2021 be varied to enable the enforcement of the garnishee order absolute;

(3)  the 4^th defendant’s summons filed on 29 October 2021 be dismissed with costs to the plaintiff.

(Discussion re costs)

12.  Plaintiff do lodge and serve statement of costs for summary assessment on paper.  The 4^th defendant may lodge and serve his comment within 7 days thereafter.