XCHRX TO KAN CHI AND OTHERS v. PUI MAN YAU AND OTHERS

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

1998, No. 6907
(Miscellaneous Proceedings)

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J U D G M E N T

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Mortimer, V.-P.:

On 19 December 1998 Yam J made an order staying execution by the payment out of money in court to the plaintiffs. They had won. The stay was pending an appeal (which was being considered) with this exception. He refused the stay in the sum of $20m upon the plaintiffs' solicitors undertaking that this sum would only be used for legal costs and repairs to the Tsing Wan Kun Temple. This is an application by the 2nd defendant, the Secretary for Justice, for a stay pending appeal in respect of the $20m as well.

2. It is useful to set out a little of the background. I gratefully take this from Mr Patrick Fung's skeleton - he appears for the Secretary for Justice. There are two temples - the Tsing Wan Kun and the Tsing Shan Monastery. It appears that they have been run as one for a long time. The Tsing Wan Kun Temple is situated within the Tsing Shan Monastery. Each was built on land which is the subject of various Crown leases. Each at one time had managers appointed under s.15 of the New Territories Ordinance (Cap. 97). Since the death of the abbot of the Tsing Shan Monastery in 1964, no new manager has been appointed because there was a dispute. In the meantime, the Government wished to resume certain lands for which compensation would be payable by way of Letters B and each Temple would be entitled to receive them. Because there were no managers, the Attorney General took proceedings in 1992 in order that the matter could be regularised. Indeed on March 1992 Godfrey J (as he then was) appointed the Secretary for the Home Affairs Incorporated as trustee to receive compensation and pay it into court.

3. In 1994, three prominent local people became concerned that the assets of both the Temple and Monastery were not being properly managed. So they applied ex parte for a scheme of trust. The Attorney General joined in those proceedings as parens patriae. Later, the 1st defendant - the abbot of the Tsing Shan Monastery joined as well. To cut a fairly long story short, later the To Ka Yi T'so and the To clan applied to join in. The T'so was composed of the descendants of To Ka Yi who died as long ago as 1454.

4. There are three persons who are managers of that T'so. They are the 1st plaintiffs in these proceedings which were in front of Yam J. There are five persons, the 2nd plaintiffs, who represent the To Clan, which is an un-incorporated body. The T'so and the To clan both claim that they own all of the Tsing Wan Kun.

5. The judge after a lengthy and complicated case gave a detailed judgment, running to some 178 pages. He decided that the plaintiffs were the owners; that the Tsing Wan Kun was not a charitable or religious trust; it was not subject to the Chinese Temples Ordinance (Cap. 153) and that the plaintiffs were entitled to the funds in court in the name of the Tsing Wan Kun. The abbot of the Tsing Shan Monastery failed in his claim. Indeed, there are proceedings still on hand to determine what should happen to the scheme of trust in relation to the Tsing Shan Monastery and, I believe, to determine its status.

6. After the judgment was given on 26 November 1998, the Secretary for Justice, the 2nd defendant, asked for a stay pending consideration of an appeal. The stay was granted until 30 November when it was extended by agreement. But at the hearing on 30 November, the judge raised the question whether some of the moneys ought to be released. The matter came before him again on 19 December when the Secretary for Justice had decided to appeal. The judge made the order which led to this renewed application.

7. I do not find this a very easy matter. It is well to begin by clearing the air a little upon the main part of the stay. The stay of the very large sum, approaching $300m, is not challenged. I have to consider why. It seems to be accepted - not that there is a high chance of success on appeal - but at least that there are arguable points to be presented - and that in any event $300m, if distributed to the managers and the clan, would be unlikely to be recovered.

8. What in these circumstances are the principles that I have to consider? Of course, when a party has won and a money sum is involved, that party is entitled in principle to the fruits of his litigation. That is so, even if the other seeks to appeal and has grounds of appeal which seem reasonably likely to succeed. Of course, if a sum is paid consequent upon a judgment to a party and it would be very difficult to recover that money if the other party succeeds on appeal and, therefore, a successful appeal would be rendered nugatory, usually the court will grant a stay.

9. This point has come before the courts on many occasions. Both parties have referred me to the Bank of India v Murjani and ors [1989]2 HKC 145. Kempster JA (as he then was) at 148D put it like this:

"In exercising his discretion, a judge will normally weigh the well recognised principle that a successful litigant is not usually to be deprived of the fruits of his litigation against the complementary principle that an appellant should not usually be deprived of the fruits of a successful appeal."

Later he cited an unreported case, Kazan Properties & Investment Ltd v Kings Dyeing and Weaving Factory Ltd (in liquidation) (CA 13/88, unreported):

"... as a general rule, the only ground for a stay where damage and costs have been ordered to be paid is affidavit evidence showing that if the money is paid, there will be no reasonable probability of recovering it even if the appeal succeeds."

Those principles are well established. I would only add to them that the evidence, which will be considered by the judge in exercising his discretion, is all the evidence, not just the evidence on affirmation from the defendants.

10. There are, however, other matters that are to be taken into account in this exercise of discretion, not simply those two principles. In recent times, I think there has never been any doubt that the principles I have already described are the main ones upon which a judge must act. But, as was said by Ralph Gibson LJ in Winchester Cigarette Machinery Ltd v Payne and another (No.2) Times, 15 December 1993:

" '... questions of timing: how soon the appeal is going to be heard and how long the matters have remained outstanding and matters of that sort.' "

have also to be taken into account.

11. Turning now to the merits of this application, it is accepted that there will be an arguable appeal although the notice of appeal has not yet been filed.

12. So far as the recoverability of any money paid in consequence of the judgment is concerned, the first question is whether the plaintiffs or any of them are good for the money. Evidence has been put before me of a large number of properties - 73 - which are owned by the T'so, the 1st plaintiffs. There is a valuation which is attacked by Mr Patrick Fung SC who makes mileage out of the reservations in the report. They are considerable. However, as the report reaches the conclusion that the properties in all are worth something in the order of $81m, there is plenty of room for error when only $20m is the sum under consideration.

13. I conclude, therefore, that T'so would be worth the money if it can be recovered. When it comes to the question of the ease of recovery - should it come to it - I am afraid I take the view that that would not be an easy matter. It is well known in these courts that to recover money from or to persuade T'so managers to submit to court orders is never a very straightforward matter. There are often difficulties which arise from the New Territories Ordinance (Cap. 97) and the application of s.15. That is a matter that I have to bear in mind. Had the matter been left there, I would have been inclined not to grant the stay applied for, but there are other matters. First, the history of the proceedings which have been going on for a very long time. The effect of a stay will be to delay the conclusion of them for, say, six months. Having regard to the long history, this is not a great period.

14. Second, I bear in mind that the stay of the main sum accepted to be correct in principle. Third, the intention is to use the money for legal costs and repair to the Temple. So far as legal costs are concerned, those are in the order of $4m. The rest, presumably, is to be spent on repairs to the Temple.

15. Mr Patrick Fung SC takes a further point that even if he fails in challenging the judge's finding that the plaintiffs were owners of the Tsing Wan Kun Temple, the Chinese Temple Ordinance provides that the funds would have to go into the hands of a committee under the Ordinance. I, of course, am not in any position to decide that point. Nor do I. But it would appear from a glance at the provisions of the Ordinance that he has a highly arguable point. So, even if he fails on the ownership, this point remains to be resolved.

16. One must ask also how much can be done which incurs the expenditure of money on repairs as opposed to the preparation for such in the next few months. I doubt very much whether anything useful could be done. So far as the expenditure on the Temple is concerned, I would have thought there is a very strong case for not spending money of that kind until this appeal has been resolved.

17. In those circumstances, and for those reasons which I have attempted to set out, I would grant a stay of the $20m as well as the stay that has already been granted by Yam J.

18. The stay must be conditional upon the filing of a notice of appeal.

19. Costs will be costs in the appeal.