PETER MAN HO LAYE v. TAM MA LAI AND ANOTHER

CACV 260/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 260 OF 2010

(ON APPEAL FROM HCA NO. 1780 OF 2009)

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DECISION

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1.  There is before me a summons issued by the two defendants in HCA 1780/2009 on 28 December 2010. Madam Tam Ma Lai is the 1^st defendant, she is also the 2^nd defendant in the capacity of the administratrix of the estate of her late husband, Laye Hong Kin (“the deceased”). Madam Tam was acting in person when she issued the summons, she has now obtained legal aid for her appeal and is represented by her solicitor, Mr Yau Chap Yin, for the hearing today.

2.  In the summons, the defendants seek the following:

(1) to set aside order of Deputy Judge Au-Yeung on 15 December 2010;

(2) to stay the execution of the judgment and order of the Deputy Judge on 22 November 2010 pending their appeal; and

(3) to give leave to the defendants to adduce further documents in the appeal.

3.  I will deal with the last matter first.  I have considered submissions on both sides and as I have indicated to the parties, I think it is appropriate that the application to adduce new evidence should be considered by the Court of Appeal at the hearing of the appeal.  So save for those documents which I regard as plainly irrelevant or have already been adduced at the trial below, the rest of the documents being the subject of the application will be referred to the Court of Appeal for its decision at the hearing of the appeal.  The relevant documents are marked as follows and are exhibited to the 2^nd affirmation of Madam Tam filed on 24 December 2010:

Annex 2-17, 2-18, 2-19, 2-21, 2-22 and 2-23.

4.  They are the salaries tax documents showing the income position of the deceased from 1 April 1984 to 31 March 1988.

5.  The application to adduce new evidence in respect of the other documents is dismissed.  I should mention that in Madam Tam’s 5^th affirmation filed on 25 January 2011, she sought to adduce further documents on appeal not covered by the summons issued on 28 December 2010.  These are the invoices and price stickers of books purchased by the deceased.  The production of these documents plainly does not satisfy the test in Ladd v. Marshall [1954] 1 WLR 1489.  So notwithstanding they are not the subject of any proper application, I refuse leave to adduce these documents on appeal.

6.  I turn to consider the application to set aside the order of Deputy Judge Au-Yeung on 15 December 2010. 

7.  That order was made at the hearing of defendants’ summons issued on 13 December 2010 to stay execution of the judgment and order of the Deputy Judge on 22 November 2010 pending their appeal.  Madam Tam was acting in person at that hearing, so the proceedings were conducted in Chinese with a Putonghua interpreter for her and the order was drawn up in Chinese. 

8.  The order, as amended on 3 January 2011, was stated to be made by consent.  It recited an undertaking given by counsel for Peter Man Ho Laye, the plaintiff in the action, that the plaintiff undertakes not to recover vacant possession of the suit premises before 14 February 2011, on condition that the defendants are to comply with these terms: the defendants are to pay mesne profits to the plaintiff for Madam Tam’s continued occupation of the premises at $3,000 per month commencing from 21 December 2010; that Madam Tam is to pay the plaintiff’s solicitors the first payment of $3,000 on or before 21 December 2010; and that Madam Tam is to return the title deeds of the premises to the plaintiff’s solicitors on or before 21 December 2010.  Having recited the undertaking and terms, the order went on to state that by consent, the defendants’ summons on 13 December 2010 for stay of execution pending appeal is dismissed, and the defendants are to pay costs of the application to the plaintiff of $30,000 within 60 days thereof, i.e. on or before 13 February 2011.

9.  Madam Tam did not comply with any of the terms for the plaintiff’s undertaking, whether on 21 December 2010 or thereafter.  She did not give any explanation at all why she chose not to pay the mesne profits as she had promised the court to do, or why she had not returned the title deeds to the plaintiff.  The only action she took was to issue the summons on 28 December 2010 to set aside the 15 December order.

10.  In her 4^th affirmation filed on 6 January 2011, she set out her ground for the application to set aside. She exhibited a letter she sent to the clerk of the Deputy Judge on 4 January 2011 and copied to the plaintiff’s solicitors, stating that she would object to the words「經雙方同意」 (“by consent”) in the order as amended, as she had never said in court that she would “consent” (本人從沒有在法庭說過「同意」兩字), so she could not be taken as having consented to the defendants’ application. 

11.  I note that Madam Tam issued her summons to set aside the order of 15 December on 28 December.  At that time, the order had not been amended to add the words 「經雙方同意」 (“by consent”). The ground mentioned in her 4^th affirmation is clearly a pretext, I can only express surprise that Mr Yau, who has come on board when the legal aid certificate was issued yesterday, saw fit to adopt this as his submission that it is appropriate to set aside the order on this pretext.

12.  The transcript of the hearing before the Deputy Judge is before me.  Anyone reading the transcript would not have the slightest doubt that Madam Tam understood the alternatives which the Judge had explained to her patiently more than once, and that she had agreed to all the terms of the order that was eventually made as a result of the compromise she reached with the plaintiff, so that she would be able to stay on in the premises for a further two months upon terms, see transcript pages 8 line G, 9 line N, 10 line G, 11 lines G to I and M to O, 14 lines A to D and M to N, 14 line U to 15 line E.

13.  The application to set aside the order, which was indeed made by consent, has no merit whatsoever and must be dismissed.

14.  This leaves the application to stay the judgment and order of 22 November 2010 pending appeal.

15.  This court has concurrent jurisdiction with the court below to determine whether a stay of execution should be granted pending appeal.

16.  I have read the 63-page judgment and the 20 grounds of appeal in the Notice of Appeal.  The dispute in the action is whether the plaintiff, who is the registered owner, or the deceased, was the real beneficial owner of the premises.  Each side claimed to have paid the full purchase price.  The Deputy Judge found in favour of the plaintiff, and held it was the plaintiff, not the deceased, who had paid the down payment and mortgage instalments, so the defendants’ counterclaim of resulting trust (on the basis the deceased had provided the price) failed.  The Judge held the deceased had a licence to occupy the premises for life and Madam Tam’s occupation was with the licence of the deceased.  Her claim for adverse possession was rejected.

17.  In considering if a stay should be granted, I should carry out a balancing exercise, bearing in mind the starting point that the successful party is not to be deprived of the fruits of his success.  Where there is a strong likelihood the appeal would succeed, this by itself will usually enable a stay to be granted.  Where the appeal is just arguable with reasonable prospects of success, the appellant would need to provide additional reasons why a stay should be granted, such as that the appeal would be rendered nugatory if there is no stay.

18.  The person who came up with 20 grounds in the Notice of Appeal must have been aware of the difficulty of challenging the findings of fact made by the Judge, and has sought to get around this by contending that the Judge has erred in the burden of proof, that she has erred in the interpretation of certain family letters, and that she has failed to draw inferences, or has drawn wrong inferences, from various matters.

19.  Mr Yau submitted this morning that the grounds of appeal are strong.  He contended that the Judge was in error in accepting the bare assertion of the plaintiff, which is not supported by the pile of 145 family letters produced by Madam Tam.  The Judge has subjected the evidence of the plaintiff and his witnesses to a close analysis, as well as the family letters placed before the court.  Having regard to the totality of the evidence, the Judge came to the conclusion that the plaintiff’s case is credible.

20.  My preliminary view is that this appeal does not have strong grounds.  At best, it is just arguable, even taking into account the additional documents which the defendants seek to produce on appeal.

21.  I do not think Madam Tam has begun to make out any basis that the appeal would be rendered nugatory if a stay is refused. That must have been the Deputy Judge’s concern, and that explains why she suggested to the parties they might wish to consider a compromise by allowing Madam Tam a further period of occupation.  I reject the submission made on behalf of Madam Tam that she would suffer irreparable damage if she has to move out of the premises.

22.  It would appear from the transcript of the hearing before the Deputy Judge that Madam Tam has found alternative accommodation in North Point at a rental of $3,000 per month, and she asked for time to move out.  According to her 2^nd affirmation filed on 24 December 2010, she has taken steps to clear out of the premises and it was when some friends moved away the large quantities of LP records of the deceased that she allegedly found the new documents she wishes to produce on appeal.  It was on this basis that the two-month period of further occupation was agreed.

23.  Madam Tam asserted in her 1^st affirmation of 1 December 2010 that as the plaintiff is residing in the United States, if title deeds are returned to him, this would render the court order unenforceable if the defendants should succeed on appeal.  There is no basis for this assertion.

24.  The plaintiff has indicated in his 3^rd affirmation that he will give an undertaking to the court not to sell, assign or mortgage the premises pending the appeal or further order.  His only intention is to let the premises, as he has received no rental income from Madam Tam for three years.  He further undertakes to indemnify her for any damages suffered by her as a result of his having obtained possession of the premises, if the defendants should succeed in the appeal.  The plaintiff is a medical doctor with a stable job and income.

25.  I accept the undertakings given by the plaintiff in his affirmation. On the basis of his undertakings aforesaid, I dismiss the defendants’ application to stay the judgment and order of 22 November 2010 pending appeal.

26.  Regarding the costs of the summons and the hearing today, I will take a broad brush approach and apportion one-third of the costs incurred to that part of the application on the production of new documents that I have adjourned to the hearing of the appeal.  The order I make on costs is only in respect of two-thirds of the costs incurred.

27.  Ms Yiu submitted for the plaintiff that such costs should be paid by the defendants forthwith, as the applications to set aside and to stay pending appeal are without merit and Madam Tam has turned round on what she had promised to do on 15 December without explanation.

28.  Mr Yau submitted that the defendants should pay the plaintiff’s costs in any event.

29.  I have a discretion to exercise here.  I am going to take an unusual course and not order the defendants to pay costs forthwith, so as not to add to Madam Tam’s financial woes.  She might have been misguided when she issued the summons to invoke the concurrent jurisdiction of this court in granting a stay, and as the legal aid certificate was issued only yesterday, her solicitors might not be able to take timely action in view of the steps already taken by her acting in person. 

30.  So for these reasons I will order the defendants to pay two-thirds of the costs incurred in any event.

31.  I further order the defendants’ costs to be taxed in accordance with the Legal Aid Regulations.