XCHRX CHAN GUAN LI XIA v. FUNG WAI HING AND ANOTHER

HCMP2891/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO.2891 OF 1998

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REASONS FOR DECISION

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1. The starting point for this kind of application is that an appeal should not operate as a stay of execution, see Order 59 rule 31A. The court does not make a practice of depriving a successful litigant from the fruits of his litigation and locking up funds to which prima facie he is entitled pending an appeal (see The Annot Lyle (1886) 11 PD 114, C.A.).

2. In Fung Wai Kwong William v. The Insider Dealing Tribunal [2001] 1 HKC 44 the Court of Appeal followed an earlier judgment by Litton JA (as he then was) in World Trade Centre Group Limited v. Resourceful River Limited, Civil Appeal 70 of 1993, unreported.

3. Litton JA said :

" Plainly the intention is that a party should not be deprived from the fruits of judgment in his favor except on good grounds being shown. Obviously if an applicant were able to demonstrate that he has very strong grounds of appeal, that something has grievously gone wrong with the process of law in the court below, then this court would be inclined to make such order as to ensure that the appeal would not be rendered nugatory in the meanwhile. In those circumstances perhaps the court may not examine very closely the financial situation of the appellant. On the other hand if the grounds of appeal appear weak, then the court would look more closely into the alleged impecuniosity and prospective financial ruin."

4. There are, therefore, two matters to consider here, the first being the strength of the grounds of appeal and the second being the effect that enforcement of the judgment is going to have on the appellant if no stay is granted.

5. It has not been suggested to me that the grounds of appeal are particularly strong. In effect, they repeat the arguments which were canvassed before me at the trial. Whether the appeal succeeds or not will obviously be a matter for the Court of Appeal but at the same time it does not appear to be argued that there is anything obviously wrong with the judgment. Obviously, having written it, I would not think there was anything wrong with it, but it is still open to counsel to tell me where I have gone wrong and if I accept that they have a good argument, then obviously I must take that into account in making a decision of this nature. That has not happened here.

6. I turn to the question of the effect on the appellant. Now it appears that the appellant has enough means, though not cash, to pay the damages if she fails in the appeal. She has a property which is worth $2.2 million and an outstanding mortgage loan of about $947,000. It may be that if she has to sell her property which I believe is a dwelling house, she will be put to serious inconvenience, but it does not appear on the face of the evidence before me that she is necessarily going to be ruined. Looking at the affirmation of the respondent, that is, the first named defendant in the original proceedings, it appears that she too owns her dwelling house which she says now has a current market price of about $3.6 million and an outstanding mortgage loan of $2.8 million. She is therefore, it appears, in much the same position, on the evidence before me, as the plaintiff. Somebody in these proceedings is going to have to sell their house. Either the plaintiff is going to have to do it now or, if she loses the appeal after a stay is granted, she is going to have to do it later. If a stay is not allowed, the plaintiff will have to sell her house now, but she will still be able to recover her loss because if the defendants loose the appeal, then they will have to sell their house. If they do so, there will be enough to satisfy an order for repayment of the sum ordered by me.

7. I cannot say that it is obvious that the grounds of appeal are particularly strong; I cannot say that it is obvious that the plaintiff, if no stay is allowed, will be ruined; I cannot say that the defendants, if the plaintiff succeeds on her appeal, will not be in a position to make good what the plaintiff has lost in the meantime. I can therefore see no good reason for granting a stay of execution in this case. In making this decision, I am mindful of the fact that the appeal is not to be heard for another seven months and obviously this is relevant to the question of locking up funds to which prima facie the defendants are entitled pending appeal.

8. Accordingly, the application of the plaintiff by summons dated 8 September 2001 is dismissed.

9. I order that the costs of the application be paid by the applicant to be taxed if not agreed.