The Bank of East Asia, Ltd v. Labour Buildings Ltd and Others
|
CACV 33/2008 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO. 33 OF 2008 (ON APPEAL FROM HCMP NO. 769 of 2002) ----------------------
----------------------
---------------------- Before: Hon Rogers VP in Chambers Date of Hearing: 2 June 2008 Date of Decision: 2 June 2008 ---------------------- D E C I S I O N ---------------------- 1.This is a last-minute application by the defendant, again for a stay of execution pending the hearing of the actual stay on the 18th of this month. The way things have gone, however, the application for a stay has been heard piecemeal over the last few weeks. 2.It first came before me on 5 May, when as I indicated in the decision which I gave last week on 26 May, I was informed by counsel, and I quote again:
Later, counsel said very much the same thing, that financing should be forthcoming within a couple of weeks from 5 May. 3.Come 26 May last week, again, matters had not progressed very much further and I was still being told that the financing should come within a fortnight. I was told that the banks were going to be met the next day, and so forth. It was indicated in an affirmation that was sworn the day before the application by Miss Debbie Lin Pai Ching that “Enquiries had been made in the market and Centaline Property Agency had said a buyer has been found to purchase the two hotels for $160 million as a going concern. This reinforces my optimism the banks will be prepared to make a refinancing offer. An orderly sale of the property at full market value would also provide an alternative method of repaying the judgment debt which the defendants would seriously consider.” 4.That affirmation was made on 25 May, but a lot had happened on 22 May. First of all, there had been a Board resolution of the company that the property could be sold and then there was a preliminary sale and purchase agreement, which was entered with a company called Year Harvest Investments Limited. Year Harvest Investments Limited, it has been found out, is a company which was only formed on 23 April 2008. It has no track record. The directors and shareholders would appear to be nominees, and I say no more. The preliminary sale and purchase agreement which was signed on 22 May provided for an immediate payment of $5 million, followed by a further payment of $11 million on 6 June and a final payment of $144 million which would be paid by 30 September. 5.As the matter was presented before this court on the two previous hearings, there was going to be a re-financing. Now, suddenly, one is told, “Oh, no, the property has been sold. It was sold before we came back to you last time and it was sold to the knowledge of the person who swore the affidavit three days before the previous affirmation was sworn.” 6.One hesitates to express judicial displeasure at the way that that was presented, but in my view simply, if a person comes to court for a stay of execution, it behoves them to tell the court precisely what the position is and not to play fast and loose with the court and suddenly, when the court turns around and says, “No more extensions on the basis because I am not satisfied that you are really trying to get finance or that the possibility of finance is really there,” to then turn around and say, “Oh, well, actually we have sold the property,” because it begins to look as though that sale of the property is either a sham in itself and was never intended to go through, or was just a piece of paper which the company itself was intending to wave before the bankers. 7.As it transpires, in any event, the meeting with the bank that was promised for the following day last week appears to have been aborted because the bank had found difficulties by reason of the fact that there are other people involved in this. And certainly, the re-financing is not in a position when that could go ahead and there are doubts, as Mr Whitehead has pointed out, about anything that might come from one of the other banks because that is conditional on conditions which cannot be met now, certainly without the plaintiff’s consent. 8.The sum total of it is that I am by no means satisfied about this preliminary sale and purchase agreement. In view of the way that the defendant’s witnesses have been prepared to make affirmations, I do not have confidence in anything that is said in them to the extent that that sale will go ahead. There are supposed to be substantial persons behind this, but there is nothing really to link them other than the fact that a cheque has been signed by a particular person. Whether or not that person himself is in a position to finance this purchase, on what I have been shown, I very much doubt it. 9.I regret, therefore, that I do not consider it right to exercise my discretion to extend this matter any further and I decline this application.
Mr Robert Whitehead SC and Mr Steven Kwan, instructed by Messrs Wilkinson & Grist, for the Plaintiff/Respondent Mr Simon Westbrook SC and Mr Jonathan Wong, instructed by Messrs Robertsons, for the 1st Defendant/1st Appellant Messrs David W T Chan & Co., for the 2nd Defendant/2nd Appellant (Absent) |
Further hearings and rulings under CACV 33/2008