HO WAI KWONG , executor of the estate of YU KING, deceased v. HO KAM CHUI

HCA 1224/2016

[2024] HKCFI 1844

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1224 OF 2016

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DECISIONS

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1.  This is a family dispute over the ownership of a commercial property situated at Shop B on the Ground Floor of Kam Fook Mansion, Nos 148, 150, 154 and 156, Jaffe Road, Hong Kong (“the Property”).

2.  After a trial of 9 days, I handed down the written judgment on 29 August 2023 (“the Written Judgment”)  in favour of the Plaintiff. After the wordings of the judgment had been finalised, the judgment was sealed on 24 October 2023 (“the Judgment”).

3.  There are now 3 paper applications before me:

(i)  the Defendant’s summons dated 3 November 2023 for stay of execution of the Judgment pending appeal (“the Stay of Execution Application”);

(ii)  the Defendant’s summons dated 12 December 2023 for leave to appeal against the order I made on 28 November 2023, refusing the Defendant’s application for an interim stay of execution of the Judgment pending the determination of the Stay of Execution Application (“the Leave to Appeal Application”); and

(iii)  the Plaintiff’s summons dated 29 February 2024 for directing the Plaintiff’s solicitors to execute the conveyance of the Defendant’s interest in the Property to the Plaintiff under s 25A of the High Court Ordinance, Cap 4 (“the S 25A Application”).

4.  The background of this case and my reasons for deciding the case in favour of the Plaintiff have been fully set out in the Written Judgment and I do not want to repeat the same here.  For the purpose of the present Decisions, I will adopt the same abbreviations that I used in the Written Judgment.

5.  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[1].

6.  I do not propose to address the Defendant’s grounds of appeal in any details here. For the purpose of these Decisions, it suffices for me to say that my judgment in this case mainly turns on the findings of fact.  The main issue is whether the Transfer was a genuine sale or a gift. As pointed out in the Written Judgment, there are ample reasons to support my finding that the Mother and the Defendant had intended the Transfer to be a sale and not a gift.

7.  It can be seen from the Defendant’s Notice of Appeal that her whole appeal is about challenging the factual findings of this court.  She complains that my finding is “contrary to the factual matrix” and I did not give sufficient weight to certain matters relied upon by the Defendant. However, it is trite law that the weight of the evidence is a matter for the trial judge, and the appellate court would not disturb the trial judge’s findings of primary fact and inferences from such findings of primary fact unless there are “plainly wrong”[2]. I agree with Ms Seto, counsel for the Plaintiff, that nothing in the Notice of Appeal or the Defendant’s submissions suggest that my finding that the Transfer was a sale is plainly wrong.

8.  The Defendant also alleges that I had applied the “wrong approach” in assessing the documentary evidence and failed to rely on the “reliable contemporaneous documents”.  Again the weight of the evidence is a matter for the trial judge.  In the Written Judgment, I had fully considered the matters as contended for by the Defendant and nothing in her submissions can suggest that my factual findings are plainly wrong, or there is any palpable error in making those findings.

9.  There is also no merit in the Defendant’s contention that I have misunderstood the nature of her case.  In the Written Judgment, I have considered all the relevant circumstances of the case in determining the intention of the Mother and the Defendant at the time of the Transfer.  Neither is there any merit in the Defendant’s argument that the court was not entitled to take into account the 2014 Will in determining the central issue in the case, when in fact the Defendant herself relied on the 2014 Will in support of her case throughout the trial.

10.  The Defendant also challenges my finding that the Mother had accepted the Defendant’s repudiation of the SPA.  However, this court found that, as a primary fact, that during the 28 April 2015 Meeting, the Defendant stated that she would no longer buy the Property.  It is also common ground that the Defendant then returned the title deeds of the Property to the Mother, who acknowledged receipt by stamping on the relevant document.  Hence, there is ample evidence to support that: (a)  the Mother had accepted the Defendant’s repudiation of the SPA; and (b)  upon the Mother’s election to accept the Defendant’s repudiation, such election is irrevocable and the SPA came to an end.

11.  It is trite that the appellate court will be slow in distributing the factual findings made by the trial judge.  As the Defendant has failed to establish an arguable appeal, it is sufficient for this court to dismiss both the Stay of Execution Application and the Leave to Appeal Application. I therefore so order. It is also not necessary for me to deal with the academic argument as to whether I had considered the relevant factors in refusing the interim stay application.

12.  If the court needs to consider the question as to whether the non-granting of the stay of execution would render the appeal nugatory, I also do not find that the Defendant’s submission in this regard can take her case any further.

13.  The Plaintiff is the executor of the estate of the Mother.  After the execution of the Judgment, the Plaintiff would be under a duty to administer the assets of the Mother’s estate on trust for the beneficiaries.  For the purpose of the present proceedings, the Defendant had paid the rental income associated with the Property into court, and such sum of money in the total sum of $4,280,333.13 (“the Payment-out Sum”)  had been paid out to the Plaintiff after the handing down of the Judgment.  According to the Plaintiff, he had made an agreement with Tim and Leung to open a trustee bank account for the purpose of safekeeping the Payment-out Sum with a mandate that the money therein can only be operated jointly by three of them.

14.  Ms Lin, counsel for the Defendant, submits that the court has to approach such proposal with great caution.  There is no evidence that such  account has been opened.  Furthermore, the Defendant is concerned that Tim and Leung are in the same camp with the Plaintiff, and they may conspire together in disposing the assets before the determination of the appeal.  There is also no undertaking given by the Plaintiff that he would hold such sum pending the determination of the appeal.

15.  According to the evidence at the trial, the Plaintiff is a person with some financial liabilities.  He still owed money to financial company and it was Ling and her husband who funded the present litigation.  Under such circumstances, Ms Lin submits that the non-granting of the stay would render the appeal nugatory.

16.  I disagree.  The Plaintiff himself frankly admitted that he is a person with limited means, yet there is no evidence to show that he would dissipate the assets of the Mother’s estate for his personal use.  Indeed, he is the trustee holding the Property for the beneficiaries and there is no evidence to show any concern on the part of the other siblings of the Plaintiff about any misadministration of the assets or breach of duty as trustee by the Plaintiff.  Furthermore, the assets of the Mother’s estate, which include a residential property and at least half share of the Property, should be more than sufficient to cover any liability which may be ordered by the appellate court if the Defendant’s appeal were to succeed.

17.  So far as the Plaintiff’s himself is concerned, the Defendant has only been able to identify debts owed by the Plaintiff in the total sum of HK$599,878 plus interest thereon in the region of HK$1 million. There is no dispute that the Plaintiff’s own property is valued at more than HK$5 million.  Hence, the evidence shows that the Plaintiff’s assets are more than sufficient to pay off his personal debts without resorting to the assets of the Mother’s estate.  In the unlikely event of any misadministration of the Mother’s estate and that the Defendant’s appeal were to succeed, the Plaintiffs’ assets can be used to cover such liability.

18.  For the Payment-out Sum, the Plaintiff has already exercised its power as trustee in keeping possession of the money.  Since this part of the Judgment has already been executed, the court should not make any direction as to how the Plaintiff should dispose of such sum of money.

19.  As I see it, the main part of the Judgment remains to be executed relates to the conveyance of the Defendant’s interest in the Property to the Plaintiff as the executor of the Mother’s estate.  According to the Plaintiff, after obtaining the conveyance of the Defendant’s interest in the Property, the Plaintiff would rent out the Property to collect rent.  The Plaintiff maintains that he has no intention to sell the Property.  In any event, it would take some time for the Plaintiff to find a purchaser of the Property, and there is no evidential basis to suggest that the Property would be disposed of or dissipated before the determination of the appeal.

20.  For these reasons, I agree with Ms Seto that the Defendant has failed to discharge the burden to show that her appeal will be rendered nugatory if a stay is not granted.

21.  I finally deal with the S 25A Application.  Under the Judgment, the Defendant is required to transfer her half interest in the Property back to the Mother’s estate within 42 days.  As the court does not order a stay of execution and the Defendant refuses to execute the legal document to convey her half interest in the Property to the Mother’s estate, there is no reason for the court to deny the S 25A Application.

22.  In opposing such application, the Defendant relies on the dicta of Au-Yeung J in Pang Man Ming v Pang Wan Li Yan[3] to show that the Plaintiff needs to prove the following in the S 25 Application:

(i)  there was a pre-existing judgment which directed the Defendant to execute any conveyance or other document; and

(ii)  the Defendant neglected to comply with the order or could not be found.

23.  For the first requirement, the Defendant relies on First Pacific Bank v Robert HP Fung[4], Wai Hung Stationery Co v HKSAR[5] and Kung Wong Sau Hin v Sze To Chun Keung[6] to argue that, by reason of the appeal and the pending Stay of Execution Application and the Leave to Appeal Application, the Judgment is not a final order or judgment that finally determines or concludes the matters.  Ms Lin therefore argues that the first requirement is not satisfied in the present case.

24.  Such argument is certainly misconceived.  The issue in First Pacific was whether a decision on preliminary points of law under O 33 r 3 of the RHC was a final or interlocutory judgment, which would affect the question as to whether leave to appeal was required.  In Wai Hung Stationery, the issue was whether the order for striking out the statement of claim was an “interlocutory” order for the purposes of the appeal provisions under  the then O 59 r 4(1)(a)  of the RHC.  In Kung Wong Sau Hin, the issue was whether the principle of issue estoppel was applicable when the judge in the previous proceedings only made an order on a procedural matter which had nothing to do with the merits of the case. Obviously, none of these authorities is relevant here and neither can they assist the Defendant’s opposition in any way.

25.  The Judgment in this case was given after the trial of this action.  Despite the appeal, the Judgment is still a pre-existing judgment which finally disposes of the rights and liabilities of the parties. In the absence of a stay, the Judgment is a final judgment capable of being executed. The Defendant’s first argument has no merit at all.

26.  The Defendant also contends that the Plaintiff’s allegation of her failure to comply with the Judgment is misconceived.  The Property has been left vacant since 1 April 2021, but the Defendant claims that it was not her who was unwilling to rent out the Property to earn rental income.  It was only because of commercial reasons that the previous tenant decided to vacate the Property and there has been no willing tenant ever since.  It seems that the Defendant is suggesting that as she can continue to rent out the Property to potential tenant, the Plaintiff would not be prejudiced if the court does not allow the S 25A Application at this stage.

27.  The Defendant is also taking another issue with procedural efficiency.  Under the Judgment, the Defendant is ordered or directed to comply with 8 orders.  According to Ms Lin, the S 25A Application only focuses on one particular aspect of the Judgment, and the Plaintiff’s “piece-meal” approach in enforcing the Judgment should be discouraged as such attempt runs contrary to the principle of procedural efficiency which is one of the underlying objectives under O 1A, r 1 of the RHC.

28.  Again, these are not good reasons for the Defendant to refuse the execution of the conveyance under the Judgment.  Unless there is a stay of execution, the Judgment remains a valid judgment capable of being executed.  As repeatedly emphasised by the courts in many cases, a successful plaintiff should not be lightly denied of the fruit of the judgment simply because there is a pending appeal.

29.  There may be dispute or even deadlock between the parties as to how to manage the Property which forms part of the Mother’s estate.  No matter what is the reason for the Property to be left vacant for such a long period of time, any delay in conveying the Defendant’s legal interest in the Property may result in loss of rental income.  This is a prejudice which cannot be ignored by the court.

30.  Further, the fact that there are other unfulfilled obligations under the Judgment is not a justification for the Defendant to refuse the execution of the conveyance.  I am not aware of any authorities which tends to suggest that, by reason of procedural efficiency or any other factors, a winning party should not be allowed to enforce certain part as opposed to all the provisions in a court judgment.   If the Defendant’s argument were to be upheld by the court, it would encourage a losing party to sit back and refuse to comply with any provisions in a judgment, thereby making it more difficult for the winning party to enforce the judgment.

31.  However, since the Plaintiff has clearly indicated to the court that the Mother’s estate does not intend to sell the Property, I would only grant the S 25A Application upon an undertaking by him to notify the Defendant of any sale of the Property before the execution of any sales documents (including any provisional sale and purchase agreement).  The Plaintiff is directed to inform the court and the Defendant in writing within 7 days as to whether he is prepared to give such undertaking.  In the meantime, the court will not seal the order pending the reply.

32.  I also make a costs order nisi that the costs of the three subject applications be the Plaintiff’s costs in the cause of the appeal, which shall be made absolute 14 days after the date of the handing down of these Decisions.