LAU SIU HUNG AND ANOTHER v. KRZYSZTOF MARSZALEK AND ANOTHER

HCCW484/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO 484 OF 2009

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D E C I S I O N

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1.  There are two applications before the court. The first one is for a direction that the judgment and order (“Judgment”) of this court dated 17 June 2013 is one that is referred to in para 1(1)(a) of O.59, r.21(1)(a).  It is agreed by the parties.  I make an order accordingly and the costs of the Summons be in the cause of the appeal.

2.  There remains an application for a stay of execution pending an appeal by the Respondents against the Judgment.

3.  The grounds of the application are (a) the strength of the appeal and (b) the nugatory effect of execution.

4.  The law has been clearly set out in Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84.  The court does go deeply into the merits of the appeal for the purpose of determining the stay application.  However, it forms a preliminary view of the same.  It has to so to see if there is an arguable appeal (one with reasonable prospects of success) because without meeting this threshold the court would not even consider granting a stay.

5.  In my view, this appeal is barely arguable.  Save for one aspect, there is no merits in the proposed grounds of appeal.  I accept that there is scope for argument in respect of the estoppel by record issue. On the other hand, it has not been demonstrated why the reasoning in the Judgment is flawed.

6.  As regards the nugatory argument.  First of all, it is said that the Respondents do not have the money to repay what they had taken from Starline (adopting the nomenclature employed in the Judgment).  This suggestion simply flies in the face of the court when the Respondents have steadfastly refused, without any good reason, to inform the court the whereabout of the money taken from Starline or what has become of it.  It would be wrong for the court to grant a stay in such circumstances.

7.  Further, it has been suggested that without a stay the business which the Respondents have been operating since March 2010 (“Business”) will be deprived of cash flow and likely have to cease operation. The suggestion is difficult to understand in light of the Respondents’ evidence that they have no significant assets.  If true, they are not in a position to fund the operation of the Business, and one cannot see why the enforcement of the Judgment has any bearing on the Business at all. 

8.  This court should not overlook the interest of the creditors of Starline.  Over HK$22 million of cash was taken from Starline by the Respondents during a period of about 1 year.  The Respondents have demonstrated by their actions that the money will not be voluntarily repaid. The longer that the money is out of reach of the Liquidators, the more remote the prospects of its recovery.  There is no good reason to delay the recovery of the money.  Prejudice to the successful party is a relevant consideration in a stay application: see Star Play Development Ltd, p 89H‑I.

9.  In the premises, the stay application is rejected with costs to the Applicants.