Macau First Universal International Ltd v. Ding Xiao Hong and Others

HCA 992/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 992 OF 2010

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D E C I S I O N

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1.The central dispute concerns the reasonableness of the date of expiry in the bank guarantee.

2.Having heard the arguments, I am of the view that the date of 31 December 2014 is wholly unrealistic.  Even taking judgment to be handed down at the end of 2013 and Ding Gang (“DG”) wins, the enforcement of the undertaking as to damages may take time and may be in the form of another trial.  To allow a mere one year for DG to do so is unrealistic and could be oppressive.  

3.In my view, a more realistic estimation will be 6 years after the date of judgment, assuming that to be the end of 2013.  This will cater for the need for trial on the issue of damages under the Receivership Order and possible taxation proceedings arising thereafter.  I do not think having heard Mr Tong, SC, that the period of an appeal to the Court of Appeal or Court of Final Appeal should be taken into account, because if Ding Yu (“DY”) is the appellant, and he wants to keep the Receivership Order pending appeal, certainly he has to make the necessary application, renew his undertaking as to damages and provide an even greater amount in fortification.  But if DG is the appellant and it is he who wants to have an interim Receivership Order, he may be the person giving the undertaking as to damages pending the appeal.  I regard it as wrong in principle for DY as the winning party to provide security under a Receivership Order that will be discharged by then pending DG’s appeal.

4.I have considered the further question of whether or not to order DY to pay cash into court or extend the validity of his bank guarantee.  In so doing, I have taken into account the fact that I have initially given DY an option in my Fortification Order. There appears to be no problem about the terms of guarantee save as to the expiry date.

5.On the other hand, in my view, DY has not properly exercised his option in the sense that he had not discussed with DG before exercising the option thereby generating the present hearing.

6.The parties are already plagued with interlocutory applications thus far.  To avoid unnecessary arguments, I therefore order DY to pay the 2 tranches of security by cash into court, the first tranch to be paid within 14 days.  Pending the payment, the current bank guarantee shall not be revoked.  For the avoidance of doubt, the Receivership Order shall subsist.  There shall be liberty to apply.

(Discussion on costs)

7.There will be a short hearing on 27 April 2012 on summary assessment.  Costs of the application be to DG, with certificate for two counsel.  Costs of the Receivers also to be borne by DY.  All the receiving parties are to give their costs statement to DY within today.  And the grounds of objection are to be lodged by tomorrow.

Mr Ronny Tong, SC leading Mr Anson Wong and Mr Lawrence Cheung, instructed by LCP, for the plaintiff (by original action) and defendants (by counterclaim)

Mr Rimsky Yuen, SC leading Mr M C Law, instructed by Orrick, Herrington & Sutcliffe, for the defendants (by original action) and plaintiff (by counterclaim)

Mr Calvin Chow of P C Woo & Co, for the Receivers