LAM MO CHU SUSIE v. LAM SIK YING VICTOR, ADMINISTRATOR OF THE ESTATE OF LAM TIM ALIAS STAN LAM TIM, DECEASED

HCA 1974/2015
[2018] HKCFI 97

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1974 OF 2015

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D E C I S I O N

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1.  This is the 1^st Defendant’s application for a stay of execution of the judgment herein dated 4 September 2017 (“the Judgment”) until the disposal of his appeal therefrom under his Notice of Appeal dated 9 October 2017.

2.  The 1^st Defendant was the administrator of the Estate of Lam Tim (林添) alias Stan Lam Tim, deceased (“the Deceased”). By the Judgment, the court terminated the appointment of the 1^st Defendant as administrator of the Estate, appointed Mr Ng Kin Yuen as new administrator of the Estate, and ordered the 1^st Defendant to account to the new administrator his dealings with the Estate and any assets therein.

3.  The background facts of this case were set out in a written judgment given after trial in HCA 1605/2004 and HCA 894/2011 (“the Actions”) dated 3 October 2016, and will not be repeated here.

4.  The reasons for removing the 1^st Defendant as administrator of the Estate were set out in a written decision (“the Decisions”) herein handed down on 4 September 2017. In particular, the court was of the view that:-

(1) The 1^st Defendant committed a very serious breach of fiduciary duty in his undervalue sale of No 6 Sharp Street East, Hong Kong (“the Property”), the principal asset of the Estate, to Advance Property Holding Limited (“APHL”), a company apparently owned or controlled by the 2^nd Defendant (see paragraph 15 of the Decision).

(2) The administration of the Estate of the Deceased, including –

(a) sale of the Property and distribution of the proceeds of sale thereof to the beneficiaries;

(b) enforcement of the account against APHL for recovery of the rents and other income (if any) received by APHL from the Property as from 8 February 2007, less certain deductions, pursuant to the consent judgment dated 15 May 2015 made in the Actions; and

(c) vetting of the 1^st Defendant’s claim for reimbursement of expenses allegedly incurred by him on behalf of the Estate,

ought to be carried out and completed as soon as practicable having regard to the fact that the Deceased passed away more than 34 years ago and administration was first granted to the 1^st Defendant and his mother more than 18 years ago.  However, if the 1^st Defendant should continue as administrator of the Estate, the likelihood was that the disputes amongst the beneficiaries would continue and there would be no end in sight (see paragraphs 16 and 17 of the Decision).

5.  The principles governing an application for a stay of execution of a judgment pending appeal are well established.

(1) The applicant is required to demonstrate a “good reason” for a stay of execution.

(2) Generally speaking, the existence of merely an arguable appeal cannot by itself amount to a sufficient reason to justify a stay.  It is the minimum requirement before a court would even begin to consider granting a stay.

(3) If the court is not convinced that there exist arguable grounds of appeal, no stay will be granted however exceptional the circumstances may otherwise be justifying a stay of execution.

(4) On the other hand, the existence of a strong appeal or a strong likelihood of success will usually by itself enable a stay to be granted because this would constitute a good reason for a stay.

(5) In most cases, where the court is faced with simply the existence of an arguable appeal, it becomes necessary for the applicant to provide additional reasons as to why a stay is justified.

(6) Commonly, this is done by demonstrating that without a stay the appeal would be rendered nugatory, for example, because of an appreciable risk that the respondent to the appeal would not be able to repay in the event of a successful appeal against a money judgment, or because the failure to grant a stay would have a serious deleterious effect on the applicant.   

(7) In considering an application for a stay pending appeal, it would be impractical and even undesirable for the court to go deeply into the merits or strengths of the appeal, although the court must still form a preliminary view of these aspects.

For the above principles, see the judgment of Ma J (as he then was) in Stay Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84.

6.  In the 1^st Defendant’s Notice of Appeal, three grounds of appeal are raised.

7.  The first ground contends that the court erred in entering final judgment against the 1^st Defendant and/or concluding that there was no triable issue in the case.  No further reason or detail is given in support of this ground.

8.  The second ground contends that the court erred in law in failing to find that it was procedurally wrong for the Plaintiff to apply for summary judgment, or apply to remove the 1^st Defendant as administrator of the Estate. Again, no further reason or detail is given in support of this ground.

9.  It is plain that neither the first, nor the second, ground of appeal is arguable or has any reasonable prospect of success.

10.  The third ground contends that the court ought to have found that there are triable issues in the case:-

(1) Sub-paragraph (a) states that “[o]n the ground that the Administrator having sold the Property at undervalue, there are findings made in HCA 1605 of 2004 and HCA 894 of 2011 already.”  This paragraph is unintelligible and cannot possibly give rise to any arguable ground of appeal.

(2) Sub-paragraph (b) contends that the 1^st Defendant’s delay in rendering an account was caused by the 3^rd Defendant, that the 1^st Defendant has, allegedly “already accounted for the receipts and outgoings”, that “he had already accounted for the Estate’s income as from 1983 to 2003”, and that “the accounts had been filed [with] the court and served [on] the parties in 2012”. It should be noted, however, that the Court’s decision to remove the 1^st Defendant as administrator of the Estate was not based on his failure to render a proper account.  The question of whether the 1^st Defendant has rendered a proper account is, I understand, in dispute, and is a matter which may well have to be decided by the court in future.

(3) Sub-paragraph (c) contends that the 1^st Defendant has “paid all estate expenses” and “advanced money to pay off the Estate debts”.  As mentioned in the Decision, I consider that the expenses allegedly incurred by the 1^st Defendant on behalf of the Estate ought to be properly vetted, and the vetting ought to be carried out by an independent administrator (see paragraph 17(2) of the Decision).

(4) Lastly, sub-paragraph (d) relates to the Plaintiff’s complaint of conflict of interest, and the 1^st Defendant contends that he “is entitled to assert that his own mother was a wife of the Deceased as a matter of fact”.  Again, it should be noted that the decision to remove the 1^st Defendant as administrator of the Estate was not based on any perceived conflict of interest on his part arising from the status of his mother.

11.  In all, I am not satisfied that the 1^st Defendant has shown any arguable ground of appeal.

12.  At the hearing on 18 January 2018, the 1^st Defendant also relied upon various matters in support of his application for a stay pending appeal, including the following:-

(1) the tenant of the Property moved out at the end of October 2017 upon the expiry of the tenancy with a few months of rent being in arrears, and the 1^st Defendant said that it would be difficult for the new administrator to recover the outstanding rent because he was not a party to the tenancy agreement;

(2) due to the old age of the Property, it would be difficult for the new administrator to renew the fire and liability insurance policies for the Property which expired in November 2017, or purchase new policies for the Property; and

(3) the 1^st Defendant had received various enquiries from estate agents for leasing or purchasing the Property and he should be permitted to handle the lease or sale of the Property.

13.  The above matters seem to me to fall within the ordinary scope of duties of an administrator.  I see no reason why Mr Ng would not be able to deal with them appropriately after obtaining a grant from the court.

14.  The 1^st Defendant also said that the appointment of Mr Ng was only “prospective”, and had not taken effect pending the outcome of his appeal against the Judgment.  I should point out that generally speaking a judgment is effective as soon as it is given.  The existence of an appeal does not operate as an automatic stay of the judgment.

15.  I do not consider that the 1^st Defendant’s appeal will be rendered nugatory if the Judgment is not stayed pending his appeal.  Neither am I able to see any other good reason to stay the Judgment pending the 1^st Defendant’s appeal.

16.  For the foregoing reasons, the 1^st Defendant’s Summons dated 3 November 2017 is dismissed with costs to the Plaintiff, to be taxed if not agreed.