Hoong Chiu Kai v. Wai Yip Dispensary Ltd

HCMP002054/2003

HCMP 2054/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 2054 OF 2003

(ON AN INTENDED APPEAL FROM HCA NO. 3225 OF 2002)

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Coram: Hon Rogers VP and Le Pichon JA in Court

Date of Hearing: 21 May 2003

Date of Judgment: 21 May 2003

Date of Handing Down Reasons for Judgment: 30 May 2003

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REASONS FOR JUDGMENT

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Hon Rogers VP:

1.This was an application for leave to set down an appeal out of time. At the conclusion of the hearing the application was dismissed and this court indicated that it would give its reasons in writing. This we now do.

2.The applicant in this case is a pharmacist who had been employed by the defendant. The business of the defendant has failed but the defendant has not been wound up nor has a winding-up petition been presented. The plaintiff was the defendant's landlord. It brought an action against the defendant in August 2002 for non-payment of rent. The claim in the action was for vacant possession of the premises and $166,788 arrears of rent and mesne profits. On 26 October 2002 judgment was entered by consent for the sum of $166,788 and mesne profits at the rate of $36,000 per month from 1 September 2002. Although the praecipe for a writ of possession and fieri facias was issued on 18 December 2000, a summons was taken out for relief against forfeiture on 23 December. That application appears to have been dismissed on 31 December 2002.

3.It would seem that meanwhile the applicant, Mr Chua, had applied to the Labour Tribunal and established a claim against the defendant in the sum of $178,200 with a total amount due of $184,232.60.

4.The Bailiff executed the writ of possession and fieri facias on 3 January 2003. The only items which were seized which were of any value were apparently the stock of the pharmacy. There were the non-prescription drugs and the prescription drugs. The prescription drugs were delivered into the possession of the Department of Health because they could not be sold on the open market. The non-prescription drugs were sold by auction on 24 January 2003. A total of $130,100 was realised.

5.On 6 February 2003 the applicant applied ex parte before Deputy Judge Cheung and obtained an order to restrain the Bailiff "from releasing the net proceeds of the auction in the total sum of HK $130,100 of the 'non-poison stocks' seized from the premises of the Defendant by way of execution, or any part thereof, to any persons including in particular the plaintiff", until after the hearing of an inter partes summons on 14 February 2003.

6.The basis of the applicant's claim was that the defendant's stock was trust property which should be held in trust for all the creditors of the defendant including not only the plaintiff landlord but also all the trade creditors and the employees. When the matter came before Deputy Judge To on 14 February 2003, he had no hesitation in setting aside the ex parte injunction. In my view he cannot be faulted. As he pointed out, the stock of the defendant belonged to the defendant. They were the assets of the defendant. Although the defendant owed wages as well as rent, these were separate matters. The employees had never paid for the drugs, or other property, in respect of which the applicant claimed there was a trust. As the deputy judge said, when the Bailiff walked into the shop on 3 January 2003, the stocks of drugs belonged to the defendant, both in law and in equity.

7.The history of these proceedings following Deputy Judge To's discharge of the injunction has been chequered. The applicant has applied for legal aid on no less than three occasions. Nevertheless it is clear that the time limit set out in Order 59 rule 4 for setting down the appeal has expired and, therefore, the appeal cannot be set down without leave. If there had been the remotest chance that an appeal might succeed, the circumstances might have led me to extend time for the applicant to set down the appeal. In my view however, the applicant's case is doomed to failure. To allow the applicant the indulgence of setting down the appeal out of time would only lead to further waste of costs in this matter. Thus, much as it is regretted that the applicant has not received his due wages, to allow this matter to proceed would be to waste further costs and cause the applicant further and futile loss.

8.As indicated at the hearing, it may be in the applicant's interest that a winding-up petition be presented against the defendant. On a winding-up, whatever assets the defendant now has would then be distributed between the creditors. Furthermore, although it would seem that in this case the Commissioner could exercise his discretion to make an ex gratia payment under the provisions of section 18(1) of the Protection of Wages on Insolvency Ordinance, Cap. 380, as a practical matter, the applicant might only be able to obtain such a payment after a winding-up petition has been presented. Whether or not the Commissioner is now prepared to use the powers conferred under section 18 and not require the representation of a petition as a condition precedent to his making a payment is not known. Although section 20 of the ordinance prevents any challenge in court to the refusal by the Commissioner to exercise his discretion, as has been pointed out before, that section does not prevent a reference being made to the Ombudsman if the Commissioner refuses to act when the conditions of section 18 are satisfied.

Hon Le Pichon JA:

9.I agree.

Representation:

Mr Chan Chung, instructed by Messrs Arthur K H Chan & Co., for the Plaintiff

Chua Chi Hing Anthony, the Applicant acting in person (present)