In Aggressive Construction Company Ltd v. Director of Buildings (in his capacity as the Building Authority) and Another [2025] HKCFI 2658, the Court of First Instance granted an interim-interim stay of execution pending the hearing of the Appellant’s Originating Motion and Summons for a stay of execution. DLA Piper represented the Appellant, succeeding in obtaining an interim-interim stay, pending a full hearing and determination of summons. The summons pertains to the Building Authority’s refusal to renew the Appellant’s application as a registered general building contractor and the removal of their name from the register of general building contractors. The DLA Piper team was led by May Ng (Partner) and Joshua Lee (Associate).
BACKGROUND
The Appellant, Aggressive Construction Company Limited, sought an interim stay of execution regarding a decision made by the Building Authority on 22 May 2025 to deny the Appellant’s application for the renewal of its registration as a general building contractor (“Building Authority’s Decision”). Furthermore, the Building Authority refused to process the Appellant’s application for the addition of an authorised signatory and technical director. The Appellant asserted that the Building Authority’s Decision was unwarranted and if the stay was not granted, it would incur significant financial harm, including the cessation of ongoing projects and possible insolvency.
At a court hearing held on 18 June 2025, the Appellant submitted an application for an interim-interim stay pending the determination of its appeal. The Court’s primary considerations were whether the appeal demonstrated sufficient merit to justify the granting of a stay and the potential consequences that might arise should a stay be refused.
THE DECISION
The Court granted the interim-interim stay, thereby allowing the Appellant to continue its operations while the appeal under the Originating Motions was pending. The Honourable Madam Justice Cheng highlighted several key points:
Merits of the Appeal
The Court determined that the Appellant had presented strong grounds for an appeal, primarily arising from the Building Authority’s failure to provide adequate reasons for its decision. Cheng J noted that the Building Authority’s rationale appeared to be based on misunderstandings and irrelevant considerations. Moreover, the Building Authority on the face had failed to consider a pertinent factor, namely the ability and competence of one of the Appellant’s proposed technical director, which warranted further examination of the Building Authority’s Decision.
Risk of Irreparable Harm and Potential Rendering of the Appellant’s Appeal Ineffectual
The Court concluded that without the granting of the stay, the Appellant’s appeal could potentially be rendered nugatory. The termination of the Appellant’s registration as a general building contractor would result in immediate financial distress, including the loss of income, breach of contractual obligations, and reputational damage. The Court emphasized that these consequences would significantly and adversely affect the Appellant’s ability to function as a viable business entity.
Public Safety Concerns
The Respondents raised concerns regarding public safety and the implications of allowing the Appellant to continue its operations. However, Cheng J determined that the relatively brief duration of the stay would not pose a significant risk. The Court further noted that the incidents cited by the Respondents occurred prior to the contested decision and did not demonstrate an ongoing risk that would outweigh the Appellant’s need for a stay.
Prejudice to the Respondents
The Respondents argued that granting the stay would prejudice them, as the Buildings Department will be required to allocate additional resources to monitor the Appellant’s projects in the interest of public safety. Even so, when considering the balance of justice, the Court determined that the most appropriate course of action was to grant the stay. By doing so, the potential irreparable harm to the Appellant would be avoided and this outweighed the public safety concerns raised by the Respondents.
KEY TAKEAWAYS
The Court’s decision reinforces the principle that the potential for irreparable harm to a party may warrant the granting of an interim stay pending an appeal. It underscores the importance of due process, particularly in the context of administrative decisions, where adequate reasoning must be provided to ensure fairness. The ruling serves as a reminder to regulatory authorities of the necessity for clarity and transparency in their decisions, as inadequacies in reasoning can result in significant legal repercussions and adversely impact the operational viability of the affected entities.
For the full judgement please see: Aggressive Construction Company Ltd v. Director of Buildings (in his capacity as the Building Authority) and Another [2025] HKCFI 2658.