Akai Holdings Ltd (in Liquidation) v. Thanakharn Kasikorn Thai Chamkat (Mahachon) also known as Kasikornbank Public Co Ltd

cacv 177/2008

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 177 of 2008

(on appeal from HCCL NO. 59 of 2004)

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BETWEEN

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Before: Hon Le Pichon JA in Chambers

Date of Hearing: 21 August 2009

Date of Handing Down Decision: 24 August 2009

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D E C I S I O N

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1.This is Akai’s application for the payment out of the security for the Bank’s costs for the appeal and the trial.  Akai’s appeal was allowed on 10 August 2009.  

2.The summons for payment out, filed on 14 August 2009, was opposed.  An affidavit was filed on the Bank’s behalf on 19 August 2009 to the effect that the Bank would be making applications for (1) leave to appeal to the Court of Final Appeal; (2) a stay of execution of the judgment pending appeal; and (3) a stay of the payment out of the security for costs pending appeal.  The Bank offered an undertaking to file all three applications on or before 2 September 2009.  On that basis, it sought an adjournment of Akai’s summons.

3.It only became apparent when Akai submitted its written submissions minutes before the hearing itself that Akai objected to the proposed adjournment.

4.Akai proceeded with its application notwithstanding this court’s intimation that it was prepared to assist in obtaining an early date for the hearing of the applications.

5.Akai submitted that this court has no jurisdiction to stay the payment out and that therefore it would be seriously prejudiced if this court were to adjourn the application.

6.Mr Dobby who appeared for Akai professed to be surprised that the application was opposed and submitted that on the authority of Wincheer Investments Ltd & Others and Lobley Co Ltd and Lucas Sasmito & Another [1997] HKLRD 1351, payment out was simply ‘administrative’, there being no possible basis for the continued retention of the monies paid into court as security for costs.  He went further and submitted that Wincheer supports the proposition that there is no jurisdiction to stay the payment out although the basis for so stating was not apparent.

7.In Wincheer, the facts of which are somewhat involved, the defendants had been ordered by Godfrey JA to pay $1.1 million into court as security for the costs of their appeal.  The defendants’ appeal was dismissed with an order nisi that there be no order as to costs which became absolute.  Nazareth VP considered (at 1356B-C) that, in the particular circumstances, that was in effect an order by the court for payment out and that in ordering payment out upon a letter written by the defendant’s solicitors, the master was simply

“by administrative action giving effect to the order of the Court of Appeal. ”

8.Wincheer was decided before Stabilad where Scott LJ (as he then was) had to consider the issue of the judge’s power to order that sums lodged in court as security for costs to remain in court pending an appeal.  After an exhaustive review of the basis of the ‘practice’ based on The Bernisse and The Elve [1920] P1 line of authorities, he concluded that there was power to do so.

9.As I understand it, Mr Dobby sought to distinguish Stabilad on the basis that that case concerned an appeal to the court of appeal whereas the present case would involve an appeal to the Court of Final Appeal.  But as a matter of principle, I do not see that it should make any difference.

10.Having reflected further on the jurisdictional issue, I am unable to accept the proposition that there is no power to stay the payment out.  Wincheer offers little assistance as in that case, the court was not concerned with the issue of jurisdiction as such and no pertinent authority was considered.  On the other hand, the reasoning in Stabilad is persuasive and, for my part, I respectfully agree with it.

11.Whether or not the power should be exercised (which is a matter of discretion) is another matter and as I indicated at the hearing, that would depend on the evidence that is yet to be filed.  I would therefore adjourn Akai’s application for the payment out to be heard together with the Bank’s applications for leave to appeal and stays.  Costs are reserved.

12.Both parties requested that if I were to grant the adjournment sought by the Bank, they would wish to have an early date for the hearing of the applications without the need for the date to be fixed in consultation with counsel’s diaries, the estimated length of the hearing the applications being half a day.  It is likely that Akai may wish to file evidence in response to the Bank’s application and the Bank may wish to reply to it.

13.I therefore give directions that the parties are to attend before the clerk of court on 3 September 2009 to fix a date for the hearing and that an early date (for a half-day hearing not to be fixed in consultation with counsel’s diaries) be given.

Mr Christopher Dobby of Messrs Lovells, for the Plaintiff/Applicant

Mr Eugene Fung, instructed by Messrs Baker & McKenzie, for the Defendant/Respondent