CPIT Investments Limite d v Qilin World Capital Limited and another

[1] This judgment deals with the principles to be applied to an application to stay execution of a judgment in the Singapore International Commercial Court (“SICC”) pending an appeal.

[2] Summons No 21 of 2017 (“the Summons”) is an application by the Second Defendant (“Qilin”) to seek a stay of execution of my judgment handed down in Suit No 5 of 2016 on 17 July 2017 (“the Stay Application”): see CPIT Investments Limited v Qilin World Capital Limited and another [2017] SGHC(I) 5 (“the Judgment”). The stay is sought until Qilin’s appeal from the Judgment in Civil Appeal No 126 of 2017 (“the Appeal”) is determined.

[5] In those circumstances, Qilin now seeks a stay of the enforcement of the Judgment, in particular in relation to the solicitors’ undertaking and the sums which are held there, pending the Appeal.

[6] The grounds on which Qilin seeks to stay the enforcement of the Judgment are set out in the affidavit of Wilbur VI Morgan James (“Mr Wilbur”) dated 21 July 2017. Mr Wilbur is a US citizen who gave evidence before me during the course of the trial. In addition, I have seen written submissions which were submitted shortly before this hearing which outlined the legal position on a stay of execution in Singapore and also set out what Qilin says are the merits of the appeal.

[7] I therefore take those matters into account when I consider whether it is appropriate in this case to grant a stay of execution.

[8] The position in Singapore, similar to other common law jurisdiction, is set out succinctly by Yong Pung How CJ in Lee Sian Hee (trading as Lee Sian Hee Pork Trader) v Oh Kheng Soon (trading as Ban Hon Trading Enterprise) [1991] 2 SLR(R) 869 (“Lee Sian Hee”) at [5], which has been cited in Lian Soon Construction Pte Ltd v Guan Qian Realty Pte Ltd [1999] 1 SLR(R) 1053 at [14] and also in Denis Matthew Harte v Tan Hun Hoe and another [2001] SGHC 19 (“Denis Matthew Harte”) at [61]. Yong CJ said in Lee Sian Hee (at [5]) that:

[9] Those are the principles which have been applied in the subsequent cases, and they are clearly the principles which are to apply in this case in the SICC.

[11] Therefore, I concentrate, for the purpose of this application, on the question of whether if the sum of HK$27,532,000 were paid, there is “no reasonable probability of getting them back, if the appeal succeeds”, to use the words of Yong CJ in Lian See Hee ([8] supra).

[12] In this case, the evidence I have before me is limited to the affidavit of Mr Wilbur. It is clearly the burden of the party who seeks to stay proceedings to put forward some convincing grounds in the affidavit. If those convincing grounds are put forward, then the opposing party to a stay has an obligation to put in an affidavit in response, setting out why what is said is incorrect.

[13] In the present case, the matters relied upon are summarised in para 15 onwards of Mr Wilbur’s affidavit. There, he deposes to the fact that in April 2017, CPIT sold 993,000,000 shares in Millennium at a low value. And he says that, to the best of his knowledge, those shares were the only assets belonging to CPIT. Mr Wilbur then says that it is clear from the above that CPIT is not in a healthy financial condition and there is a serious risk, if a stay of execution is not granted pending the appeal, that Qilin will not see the return of the money if the appeal succeeds. He says that as CPIT has already liquidated the sole asset, it is essentially a shell company and there are grave concerns that if a stay of execution is not granted pending the appeal, the appeal would be rendered nugatory.

[14] The main evidence I have before me, as Ms Wendy Tan (“Ms Tan”) acting on behalf of CPIT has shown, is at p 130 of the affidavit of Mr Wilbur. At the bottom of that page, it explains the circumstances in which the sale of the shares took place. It says pursuant to that agreement, “CPIT Investments has agreed to sell and the Offeror has agreed to purchase 993,000,000 Sale Shares, representing approximately 18.99% of the entire issued share capital of the Company as at the Last Trading Day at the consideration of HK$66,531,000 in cash, representing HK$0.067 per Sale Share”. And it continues to say that that sum is the consideration for this transaction.

[15] It therefore follows, although Mr Wilbur does not say so in his affidavit, that CPIT has received a sum of HK$66m. Added to that, as Mr Renganathan Nandakumar (“Mr Nandakumar”) acting on behalf of Qilin has pointed out, there is also a sum of some HK$3.9m in the value of the remaining Millennium shares. That means that there is altogether, on the evidence which has been put before me by Mr Wilbur, a sum of about HK$70m, which is shown on the evidence to have been the asset of CPIT as at the end of April 2017.

[17] It is said that CPIT, being a BVI company and not publishing accounts, should have put forward some evidence of their financial status. However, as I have indicated, I consider that a party only needs to do so if they wish to challenge the matters set out in the affidavit. The particular matters, which are set out in Mr Wilbur’s affidavit, do not seem to me to justify a response if CPIT merely wishes to rely on what is said there.

[18] I should add that in the SICC, there are necessarily parties from foreign jurisdictions. In the present case, Qilin and CPIT are both BVI registered companies. That, as the authorities show (see Denis Matthew Harte ([8] supra) at [64]), is not in itself a sufficient ground for there to be a stay of execution of a judgment pending an appeal.

[19] The fact that both parties in this case have decided that they should be registered companies in jurisdictions where the full financial status of the company is not made evident is not something which I consider the court, taking all the circumstances into consideration, should give weight to. Whilst in other jurisdictions it is possible to obtain financial information as to the financial status of a company, I do not consider that this means that, where that information is not available, the court should draw an inference that the company does not have assets because of the absence of the information. Whilst a party might wish to put evidence before the court to answer otherwise compelling evidence as to the absence of assets, I do not consider that, as in Mr Wilbur’s affidavit in this case, a party can make mere assertions, unsupported by evidence, as to the absence of assets and expect the other party to provide financial information which is otherwise protected by registration in a foreign jurisdiction. Equally, the difficulty of enforcing a judgment against CPIT, a BVI company, or against any assets in Hong Kong, is not a sufficient ground for a stay, as recognised in Denis Matthew Harte ([8] supra) at [65] and [66].

[20] In those circumstances, for the reasons I have given, I do not grant a stay in this case.

[22] Ms Tan opposes Qilin’s oral application. She argues that it is inconceivable that a partial stay should be granted in every situation where a renewed application has to be made to the Court of Appeal for a stay, and that the court’s decision in Naseer Ahmad Akhtar ought to be restricted to the confines of its specific facts. She also asserts CPIT’s prima facie entitlement to the sums demanded under the solicitors’ undertaking dated 15 February 2016 – Qilin could have specifically provided for payment to be made only after any appeal has been disposed of, but it did not; Qilin cannot now attempt to rewrite the terms of the undertaking by seeking this partial stay.

[23] In my judgment, when an application is made for a stay in proceedings, and where the law on the application for a stay is clear, and where the evidence before the court is clear, then it is not generally for a first instance judge to decide not to give effect to the decision that has been made, so as to allow yet a further application to be made to deal with a stay of proceedings. I have come to the clear conclusion that based upon settled law and the facts of this case, there should not be a stay. And I do not consider that this is a case where I should grant a partial stay pending any application to the Court of Appeal.