Super Strategy Investments Ltd and Another v. Kao, Lee & Yip (A Firm)

HCMP 1752/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1752 OF 2007

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Before: Hon Saunders J in Chambers

Date of Hearing: 23 June 2008

Date of Decision: 23 June 2008

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D E C I S I O N

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1.On 19 June 2008, I made an order that the defendant must deliver to the plaintiff its bill of costs for all services rendered in connection with the sale of Henredon Court within 28 days, that is by 17 July 2008.  As matters stand at the present time the defendant is in breach that order and has failed to deliver the bill of costs.

2.On 11 July 2008, a notice of appeal filed, the very last day for filing the appeal.  On 16 July 2008, the last day before they were due to comply with the order, the defendant filed a summons seeking an order that the order to deliver the bill of costs be stayed pending the determination of the appeal filed against the order. 

3.It is trite law that the filing of an appeal does not operate as a stay: see Order 59 rule 13(1).  It is equally plain that the mere filing of a summons for a stay does not operate as a stay.  An application for a stay should always be sought promptly, and be brought on for hearing as a matter of urgency, prior to the last day upon which the order demands compliance: see Hong Kong Civil Procedure 2008, 59/13/7.  If the application is made late, so that the due date has passed before the application for a stay may be heard, there should be a proper explanation as to the delay.  The decision to grant a stay is discretionary and in the exercise of the discretion the court is entitled to be told why the application has been made late.

4.No explanation is offered to me today as to why a stay was not sought earlier.  No explanation is offered as to why the defendant has failed to comply with the order.  It is of course no answer to say that an appeal had been lodged, as the defendants, being solicitors, must have known that an appeal does not operate as a stay.  Instead, the defendants remain silent on the matter. 

5.The principles upon which a stay is granted are not in dispute.  They are set out in the judgment of Ma J (as he then was) in Star Play Development Management Limited v Bess Fashion Management Limited, (Unreported) HCA4726/01.  The starting point is always that a successful party should not be deprived of the fruits of his success.  Consequently, an applicant for stay must show good reasons why a stay should be granted.  Without detracting from the comprehensive statement of principle in Star Play it may generally be said that there are two factors that will be taken into consideration.  They are first, whether the absence of a stay will render the appeal nugatory, second, the merits of the appeal.

6.As to the merits, in her skeleton argument, Ms Yiu points to the five grounds contained in the notice of appeal.  Each of those five grounds is simply a different way of expressing the same question, namely, what is the proper construction of the expression “non-contentious business” as that expression is used in s 2 Legal Practitioners Ordinance. Ms Yiu does not point to any arguable error of law made in the course of the judgment, in the construction of the expression.  The grounds of appeal merely repeat the arguments used in the course of the hearing, following which the orders were made.

7.In the absence of any suggestion in that there has been an arguable error of law, this appeal is not one which can be classified as having a high likelihood of success.  This is a case where the best that can be said of the appeal is that it is simply arguable.

8.In those circumstances, it is necessary for the defendant to provide additional reasons why a stay should be granted: see Star Play, p 8, para 9(8).  As in most cases, the effect of the defendant’s contention is that to deny stay will render the appeal nugatory.

9.If the stay is refused, the defendant will have to prepare the bill of costs, and that bill of costs will inevitably go to taxation.  The discretion to adjourn taxation proceedings pending an appeal against an order for costs may only be exercised if it is necessary to do so for the expedient and efficient disposal of the taxation.

10.To adjourn merely because an appeal is pending is to give, without authority, to the Taxing Master, a power equivalent to that of granting a stay of an order for costs.  That is a power which is not vested on the Master, but in the Judge at first instance, or the Court of Appeal, by Order 59 rule 13(1): see Plus Luck Limited v Chin Yuk Lun Francis & Others, (Unreported) HCA 4645/98.

11.The only real complaint that can be made about the matter proceeding to taxation is that time and costs will be wasted in the event the defendant succeeds in the appeal.

12.The loss costs or the value of time expended does not render the appeal nugatory.  Any loss can be properly compensated in costs.  There is no suggestion that the plaintiff is impecunious or would not be able to meet in costs order.  In fact in this case the defendant holds $7.1 million for the vendors of Henredon Court, from which estate agents commission and the solicitor’s costs are to be met. 

13.That in itself gives rise to an argument for prejudice, Ms Yiu says.  If the taxation proceeds, then the appropriate amount taxed will be deducted from that sum.  She then said that the balance must be paid to the estate agent.  I did not understand how that argument can be made.  The estate agent is entitled to charge a proper commission, which is to be deducted from the sum held, but there can be no argument that the estate agents are entitled to the balance of the $7.1 million, after deducting the solicitor’s costs.  Even if the balance of the $7.1 million, after the deduction of the solicitor’s costs and the estate agent’s proper commission, were released to the plaintiff, there is no suggestion that either the plaintiff, or the other vendors of Henredon Court, are impecunious or could not pay any sum found to be ultimately due to the defendant.

14.I reject any suggestion that if the defendant ultimately succeeds on the appeal there will be any risk at all either, that any costs orders made against the plaintiff might not be met, or that any judgment ultimately obtained by the defendant might not be met.

15.Ms Yiu suggests that the summons ought to be adjourned to a substantive hearing over two hours, and that there should be an interim stay in the meantime.  There is no reason at all to do that.  There is no new argument to be mounted on the appeal, which was not fully canvassed in the original hearing.  Ms Yiu does not suggest any error of law other than the 5 grounds of appeal in the notice of appeal, all which merely repeat the original grounds.  The defendant has already arguably in contempt on the order, and offers no excuse for that situation.  There is no proper basis upon which a stay might be ordered.

16.The application must be refused. The appropriate costs order is plaintiff’s costs in cause in the appeal.

17.Following the delivery of foregoing oral reasons, Ms Yiu made application for a stay to enable the defendants to have, what she described as “a second bite at the cherry”, that is to make application for a stay to the Court of Appeal.  They are entitled to make application for a stay to the Court of Appeal, but in the absence of any affidavit explaining the delay in filing the application for stay heard by me, I declined to make any further order.

Mr Anson K M Wong, instructed by Messrs Iu, Lai & Li, for the Plaintiffs

Ms Elsie Yiu, instructed by Messrs Ho, Tse & Wai, for the Defendant