Read the full judgment text of CACV 66/2019 on BabelCite. This Court of Appeal judgment was delivered on 19 December 2019 before Hon Lam VP and Chu JA.
Civil procedure – stay of execution pending appeal – principles governing stay applications – Star Play Development Ltd v Bess Fashion Management Co Ltd – consent order varying mechanism for implementing rescission of contract for sale and purchase of property known as Duplex Flat B, 32nd and 33rd Floor, Block 1, Hill Paramount and car-parking spaces – whether consent order precludes stay application – whether arguable appeal with reasonable prospects of success – whether appeal would be rendered nugatory without stay – transaction costs (conveyancing costs and stamp duty) – Stamp Duty Ordinance – Defendant's paid-up capital of only HK$1 – whether Property held by Plaintiff as security renders appeal nugatory – whether Plaintiff's delay in applying for stay and Defendant's change of position (redemption of mortgage and moving into Wiltshire Property) defeat stay – whether overall balance of prejudice favours granting stay – costs of stay application assessed on gross sum basis. Held, dismissing the renewed stay application: (1) the consent order of 31 January 2019 was a mere variation of the mechanism for implementing rescission and did not preclude a stay application; (2) although the grounds of appeal (challenges to the Judge's conclusion on agency and to the grant of rescission notwithstanding alleged affirmation) were reasonably arguable, they did not carry such a high prospect of success as to justify a stay without other considerations; (3) the appeal would not be rendered nugatory without a stay, since the costs of an appeal (including transaction costs and stamp duty) cannot by themselves ground a stay, the Property held by the Plaintiff was sufficient security, and the Plaintiff had not discharged its burden of showing no reasonable prospect of recovering the HK$69.8 million from the Defendant; (4) on the overall balance, the Plaintiff's delay in raising the question of stay (first by letter of 5 March 2019, after the Defendant had redeemed the mortgage on 22 February 2019) and the Defendant's legitimate change of position in reliance on the consent order, including moving into the Wiltshire Property, meant that a stay would occasion greater prejudice to the Defendant than the Plaintiff would suffer without one; (5) the Court took into account the undertaking given by Cheng and the Defendant that the HK$69.8 million would be used to purchase a property in the Defendant's name or, failing that, be retained in the solicitors' account pending the outcome of the appeal. Order: application for stay dismissed; Plaintiff to pay the Defendant's costs of the application, assessed on a gross sum basis at HK$400,000 (despite the Defendant's statement of costs of HK$562,805 and the Plaintiff's costs of HK$730,907), the Court finding the level of costs incurred on an application of this nature to be exorbitant.
Legal issues: Effect of consent order on right to apply for stay · Arguability and prospects of success of the appeal · Whether appeal would be rendered nugatory without stay · Balance of prejudice including delay and change of position · Assessment of costs for the stay application
Outcome: Application for stay of execution dismissed; Plaintiff ordered to pay costs of the application, assessed on a gross sum basis at HK$400,000.
Cited by 20 cases · Cites 5 cases