Gurdas S Choithramani v. The Hong Kong and Shanghai Banking Corporation Ltd

HCA 2073/2011 & HCSD 23/2014
(Heard Together)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2073 OF 2011

AND

APPLICATION TO SET ASIDE A STATUTORY DEMAND NO 23 OF 2014

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Before: Deputy High Court Judge Wilson Chan in Chambers

Date of Hearing: 18 September 2014

Date of Decision: 18 September 2014

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D E C I S I O N

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1.The plaintiff’s claim against the defendant in this action was struck out and dismissed with costs on 28 April 2014 by Deputy High Court Judge Whitehead SC. The plaintiff’s appeal from that judgment is CACV 117/2014. By summons dated 30 May 2014 the plaintiff applied for a stay of execution in respect of the costs order pending the determination of CACV 117/2014.

2.In short, the plaintiff’s main point on appeal is as follows:

(1) The learned Judge ought not to have struck out the Statement of Claim by way of final remedy but ought, if minded to proceed on the prima facie basis that the plaintiff lacked locus, to have adjourned the matter so that the question of consent of/assignment by the Official Receiver (“OR”) could be further pursued and resolved.

(2) That was the stance which the plaintiff set out at the plaintiff’s Skeleton for the hearing at paragraph 5.2.

(3) The learned Judge at paragraph 4 of the Ruling dated 28 April 2014 stated erroneously in effect that the plaintiff’s own unqualified position was that he lacked locus when that was not the case.

(4) The learned Judge himself within the Ruling recognised (at paragraph 9) that the OR might assign the proceedings or consent to the plaintiff pursuing them, which is an express recognition that these very proceedings might yet proceed, and (at paragraph 10) that the OR might itself take the matter up.

(5) A fresh action by the plaintiff, which would be necessary if this one is struck out, might be subject to further limitation problems to which this action is not.

(6) In those circumstances, the refusal of an adjournment and the striking out of this action by way of final remedy was inconsistent with the learned Judge’s own correct view of the matter (set out in sub-paragraph (4) above) and was inappropriate and/or disproportionate and a misuse of the strike out power.

3.The relevant principles for a stay pending appeal are addressed in the decision of Ma J (as he then was) in Star Play Development Limited v Bess Fashion Management Company Limited [2007] 5 HKC 84 and the Court of Appeal in Toeca National Resources BV v Baron Capital Limited [2013] 5 HKLRD 178. In short, the existence of an arguable appeal (ie an appeal with reasonable prospect of success) is the minimum requirement before the court would even consider granting a stay.  Conversely, the existence of a strong appeal or a strong likelihood that the appeal would succeed would usually, by itself, enable a stay to be granted because this would constitute a good reason for a stay.  Where there existed only an arguable appeal, the appellant would need to provide the court with additional reasons as to why a stay was justified; for example, that an appeal would be rendered nugatory. Correspondingly, if it could not be shown that an appeal would be rendered nugatory if a stay were not granted, the court would require the appellant to demonstrate strong grounds of appeal or a strong likelihood of success.

4.The defendant, in its Skeleton Submissions, has put before this court transcript of the oral ruling of Deputy High Court Judge Whitehead SC refusing the plaintiff’s application for an adjournment.  In short, having considered the plaintiff’s submissions, the Deputy Judge made a finding of fact at the hearing that the plaintiff was made aware of the locus standi issue by 2009-2010 or by 2012 at the very latest. The plaintiff had ample time before the hearing within which to rectify the issue had he wanted to, and the Deputy Judge was not satisfied the plaintiff had provided sufficient explanation as to why there was such a long delay in the plaintiff’s approach to the OR and why his application for an adjournment of the hearing was made so late.  It was too late for the plaintiff to approach the OR at the last minute, just before the hearing.  Accordingly, the Deputy Judge made a case management decision and exercised his discretion to refuse the adjournment application.

5.The plaintiff has provided no good reason why the Deputy Judge’s exercise of his discretion should be disturbed.  It is trite that an appellate court will not lightly interfere with a first instant judge’s exercise of his discretion, particularly in case management decisions.  In the circumstances, I am not satisfied that the plaintiff has an arguable appeal with reasonable prospect of success.

6.Moreover, even if I am wrong, an appeal which is meritorious would not be stifled by a threatened bankruptcy of the plaintiff, as the trustee in bankruptcy could continue and adopt the appeal [see: Tsui Po Hing v SK Kaken Company Limited, CACV 167/2009 (Judgment dated 26/03/2010)]. 

7.In the circumstances, the plaintiff’s application for a stay of execution pending appeal is dismissed.

8.As to the plaintiff’s application to set aside the statutory demand, on 11 July 2014, the defendant was able to serve a statutory demand on the plaintiff personally demanding payment of the sum payable under the costs order.  On 29 July 2014, the plaintiff issued the set‑aside application.  From the affirmation filed by the plaintiff in support of his application, the only ground upon which the plaintiff relies in support of his application is that the statutory demand should be set aside pending the outcome of the appeal.  However, as I have already dismissed the plaintiff’s stay application, it follows that the set‑aside application must also be dismissed.

(Discussion between court and counsel/solicitor re costs)

9.Costs of the plaintiff’s application be to the defendant in HCA 2073/2011 and the respondent in HCSD 23/2014 to be paid forthwith; such costs to be taxed on a party and party basis if not agreed.

Mr Edward Alder, instructed by Jal N Karbhari & Co, for the plaintiff

Mr N Hunsworth of Mayer Brown JSM, for the defendant

Please refer to HCMP2607/2014 for the relevant appeal(s) to the Court of Appeal.