LI KIN KEUNG v. YAT FAT LTD AND ANOTHER

HCA 341/2013 & HCA 873/2013

(Heard together)

[2019] HKCFI 2977

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 341 OF 2013

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(By Original Action)

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(By Counterclaim)

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 873 OF 2013

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REASONS FOR DECISONS

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1.  There are a few applications before me:

(i)    the applications (“the 1^st Stay Applications”) by Pu’s camp to stay the execution of my judgments dated 15 May 2019 in these 2 actions (“the Judgments”) pending appeal;

(ii)   the applications by Li’s camp to enforce the Judgments (“the Enforcement Applications”); and

(iii)  the applications by Pu’s camp to stay the present proceedings including the appeal pending the determination of the related ancillary relief proceedings (“the 2^nd Stay Applications”).

2.  In the hearing on 1 November 2019, I dismissed all the Stay Applications but allowed the Enforcement Applications.  I now give my reasons.

3.  In line with the principles laid down by the Court of Appeal in Tsang Wing Kwai v Tsang Wing Fai[1], I intend to give only brief reasons for my decisions.

4.  The background of these cases had been set out in my written judgment handed down on 15 May 2019 (“the Written Judgment”), and I do not want to repeat the same here.

5.  For easy reference, I will just refer the parties in Li’s camp as “Li” himself and the parties in Pu’ camp as “Pu” herself.  I will also adopt the same abbreviations that I used in the Written Judgment.

6.  After the handing down of the Written Judgment, Pu commenced divorce and ancillary relief proceedings under FCMC 9083/2019 (“the Ancillary Relief Proceedings”) against Li on 30 July 2019.

The 1^st Stay Applications

7.  The applicable principles for granting stay of execution pending appeal are well-established and have been summarised by Ma J (as he then was) in Star Play Development Ltd v Bess Fashion Management Co Ltd[2].

8.  Applying these principles, I am not satisfied that Pu has managed to establish an arguable appeal.  This case turns very much on the facts.  It can be seen from Pu’s grounds of appeal that her whole appeal is about challenging the factual findings of this court.  It is trite that the appellate court will be slow in distributing the factual findings made by the trial judge.

9.  Pu intends to adduce new evidence in the appeal by making a Ladd v Marshall application before the Court of Appeal. Though the matter is now still under consideration, I accept the submission of Mr Lam, counsel for Li, that such application cannot assist Pu’s case for the following brief reasons:

(i)     Pu has overstated the effect of the new evidence, as the new alleged documents only show that moneys had been paid into T&L but do not show who made the payment.

(ii)    In contending that she paid for the construction costs or the mortgage repayments, Pu is seeking to raise a new factual point not run at the trial, which is something not permissible in the appeal.

(iii)   The payment of construction costs or financial contribution towards the Lot 868 Project was only one of the many points considered by me in reaching the finding that Li was the beneficial owner of General-Lite.  The case in favour of Li was in fact overwhelming.

(iv)   Pu could have produced the new evidence at trial if she had used reasonable diligence.

10.  Further, the appeal would not be rendered nugatory if no stay is granted.  Pu’s allegations about Li’s financial ability to pay damages and “gambling problems” are nothing more than bare assertions. As laid down in Star Play, where it is alleged that the appellant will suffer serious financial consequences if a stay is not granted, the court will require good evidence to support such a contention.[3]  Pu is far from discharging such burden.  Further, Li has agreed to provide an undertaking not to deal with the General-Lite shares and 30% Yat Fat shares pending the determination of the appeal.  This removes any basis for suggesting that the appeal would be rendered nugatory.

11.  For the above reasons, subject to Li’s undertaking as mentioned in the preceding paragraph, I dismissed the 1^st Stay Applications.

The 2^nd Stay Applications

12.  Likewise I find no merit in the 2^nd Stay Applications.

13.  At the commencement of the trial, I had already expressed my query as to whether it was wise for the parties to pursue the present actions.  The relationship of Pu and Li had broken down since 2007.  As there might be divorce proceedings in the future, the distribution of assets between Pu and Li would have to be determined in the Family Court in any event. Hence, no matter what would be the result of the present case, the financial positions of the parties would not be finalized.  Despite such advice, the parties still decided to resolve their disputes through the present 2 actions and so the trial could not be avoided.[4]

14.  The parties had therefore made a conscious decision requesting the court to determine the issue of ownership of the disputed shares as a matter of property law.  The court proceeded with the trial and made a determination on such matters.  If it was her genuine intention that the question of ownership of the shares should have been considered together the possible ancillary relief proceedings, I wonder why Pu had not made such request earlier.  In particular, I had expressed my query about the purpose of the trial at the outset.  In such case, it would simply be too late and indeed unjust for either party now to say that we can ignore the Judgments given in these 2 actions. 

15.  Pu mentioned the possibility of dissipation of assets.  However, in case that there is any such evidence, Pu can always make an appropriate application in the Ancillary Relief Proceedings to freeze Li’s assets.  Furthermore, there is insufficient material before the court to support any allegation of such sort.

16.  In a way, the Court of Appeal also agreed that these 2 actions should proceed as normal without waiting for the Ancillary Relief Proceedings.  As mentioned above, Pu made a Ladd v Marshall application to adduce new evidence in the appeal.  By a letter from Pu’s solicitors dated 13 September 2019, Pu asked the Court of Appeal to withhold the decision for such application pending the Ancillary Relief Proceedings.  The Court of Appeal rejected such request and decided that it would deal with the application in the usual course.

17.  Mr Todd, QC, counsel for Pu in the present applications but not at the trial, referred me to a number of authorities including Tee v Tee[5]. However, I do not accept that they can assist Pu’s case.

18.  At most, the rationale of these authorities is that once the ancillary relief jurisdiction is engaged, there is no need for a determination in separate proceedings on the issue of ownership of the matrimonial properties, and the whole matter should be considered as a whole in the context of the ancillary relief proceedings.

19.  This has no application to the present case. The parties, who were fully aware of the possibility of ancillary relief proceedings, nevertheless requested the court to determine the ownership of the disputed shares.  It will make a mockery of the trial if either party now say, despite the express ruling of the court on the ownership of the shares, the parties can ignore the Judgments because of the pending Ancillary Relief Proceedings.

20.  Further, by making the 2^nd Stay Proceedings, Pu is also asking the court to stay the appeal proceedings pending the Ancillary Relief Proceedings.  It is clear that this court has no jurisdiction to order a stay of the appeal which is now before the Court of Appeal.  The application has to be made directly to the appellate court.

The Enforcement Applications

21.  The Enforcement Applications seek orders under O 45 rr 6 and 8 to fix a time for compliance of the Judgments, and that in default Li’s solicitors be authorized to execute the share transfer documents.

22.  The supporting evidence shows that: (i) Li had tendered the remaining purchase price for the Yat Fat Shares; and (ii) Pu had failed or refused to comply with the Judgments despite repeated requests.  As I refused both Stay Applications taken out by Pu, it follows that Li’s should be allowed to enforce the Judgments.  I therefore allowed the Enforcement Applications.

23.  Costs should follow the event, and so I made the costs orders accordingly.