POON LOI TAK, the Administrator of the late POON NUEN, deceased v. POON LOI CHEUNG DESMOND

HCA 3348/2016

[2023] HKCFI 2516

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 3348 OF 2016

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DECISION

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1.  By summons dated 3 April 2023 (“the Stay Summons”), the Defendant applies for (a) a stay of execution of paragraphs 1 and 3 of the Judgment, by which I ordered that the Defendant shall repay a sum of HK$14,248,000 withdrawn by him from the Premier Account and that there be an account of the Sale Proceeds received by the Defendant, pending determination of the appeal (“the Stay Application”); and (b) an interim stay pending the final determination of the Stay Application.

2.  The Defendant filed his 5^th, 6^th and 7^th Affirmations in support of the Stay Application.  The Plaintiff filed his 17^th Affirmation in opposition.  By summons dated 9 May 2023, the Defendant also seeks leave to file his 8^th Affirmation to clarify a factual inaccuracy in his 5^th Affirmation.  Noting that the application is neither controversial nor opposed, I grant leave for the Defendant to so file.

Principles governing grant or refusal of stay of execution pending appeal

3.  The principles governing stay of execution are trite and summarised in Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84. In essence:

(1)  In order to justify a stay of execution, an applicant has to demonstrate that good reasons exist.

(2)  The existence of merely an arguable appeal (that is, one with reasonable prospects of success) cannot by itself amount to a sufficient reason for a stay.  It is the minimum requirement before a court would even begin to consider the application.

(3)  In other words, 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 contrary, 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 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.

4.  For the purpose of forming a preliminary view on the merits of the appeal, I note that the Defendant’s appeal against the Judgment concerns essentially issues of fact.  In this regard, I remind myself of the relevant principles on the Court of Appeal’s reluctance to disturb the findings of fact made by the court below.  As stated by the Court of Appeal in Yu Man Fung Alice v Chiau Sing Chi Stephen [2021] HKCA 1456 at §§33-34:

“33. … Palpable errors, whether of law or of fact, must be identified, and they must be sufficiently material to undermine the conclusions of the trial judge. In the absence of material errors, an appeal court will interfere with the findings of fact made by a trial judge only if it is satisfied that his decision cannot reasonably be explained or justified. What matters is whether the decision is one that no reasonable judge could have reached. That the judges in the appeal court may have reached a different conclusion is not a ground for intervention.

34.  The principles for appellate intervention apply also to inferences of fact drawn from primary facts (unless the finding is based purely on inferences or otherwise has nothing to do with the witnesses’ demeanour or the trial judge’s having received the evidence at first hand), and findings of mixed fact and law, or an issue on which the judge had to come to a judgmental conclusion after taking a number of factors into account.  The correct approach in reviewing such a conclusion is to treat the judge’s decision with utmost respect, and refrain from interference unless satisfied that it proceeded upon some erroneous principle or was plainly wrong.  It is similar to an appeal against an exercise of discretion.”

The appeal is not arguable with reasonable prospects of success

5.  As stated in Judgment §§32-33 and 43, the overriding issue in this action centres upon Father’s intention.  If a gift is claimed, the onus is on the alleged donee (i.e. the Defendant in this case) to prove such gift.  Given that the alleged gift was made by a person who is now deceased, the Court “must approach the claim with some caution and a true sense of enquiry”.  The Defendant does not appear to dispute this approach.

6.  The Defendant, in the written submissions made on his behalf, has highlighted three key grounds of appeal for the purposes of his present application for stay of execution.  However, in my view, none of the grounds is arguable with reasonable prospects of success.

7.  First, the Defendant contends that the Court erred in rejecting his evidence as being “irrelevant”. This is a mischaracterisation of this part of the Judgment and is incorrect.  Rather than simply rejecting his evidence as being “irrelevant”, the Court has provided an analysis as to why his evidence is not credible and thus should not be accepted (Judgment §§50-55).  Specifically:

(1)  The two alleged conversations with Father have never been included in any of the Defendant’s three witness statements but emerged for the first time at trial during cross-examination.  No proper explanation has been given by the Defendant in this regard.  Whilst the Defendant now seeks to heavily rely on them as “Father’s express indication of his donative intent”, there remains no explanation as to why he did not include them in any of his witness statements in the first place.  The Court is plainly entitled to take into account such glaring failure in assessing the credibility of his evidence.

(2)  In any event, the alleged “dinner-time conversation” with Father at most only referred to “some monies” without any details as to e.g. the amount, the alleged manner of gifting and whether it was related to the credit balance in any of Father’s bank accounts.  It does not take the Defendant’s case any further when it “does not provide any concrete information which can help establish Father’s intention to gift [him] the credit balance of the Savings Account”: Judgment §§50-52. In any event, this was not the sole reason for not accepting his evidence.

(3)  The Court also explained in Judgment §54 as to why it found his another (also belatedly) alleged conversation with Father when they stepped outside the Bank to be most artificial and self-serving.    The Defendant’s ex post facto justification that his alleged question to Father (on what would happen to him if he took Father’s monies) “stemmed from [his] subjective concern of whether Father would have sufficient funds for his personal use after making the gift” is a bare assertion and has not been borne out by evidence.

(4)  As the Defendant’s evidence fails to demonstrate any clear intention on Father’s part to gift the credit balance to the Defendant, nor did Father ever indicate that he would no longer use any of the monies in the account, it is rather disingenuous for the Defendant to speak of any “respect” for Father by “allowing” him to continue to operate the account: see Judgment §55.

(5)  As further pointed out in Judgment §82, whilst the authorities cited by the Defendant establish that a gift of a standing credit balance in a bank account controlled and managed by the donor is, a matter of law, capable of being the subject of a gift, they do not go so far as to establish that the donor’s entitlement to withdraw monies from the account is irrelevant on the question of donative intent.  In other words, depending on the circumstances of the case, weight may be attached to the fact that the donor was able to make withdrawals from the account as and when he saw fit.  Ultimately, the question boils down to Father’s intention.

8.  Secondly, the Defendant contends that the Court failed to take into account evidence which supports Father’s alleged intention to gift the credit balance of the Premier Account to the Defendant.  Such contentions likewise have no merits:

(1)  The Defendant’s alleged “express statements made by Father that [the Defendant] was free to use the monies in the Account in July/August 2014, in December 2014, and in around May and September 2015” are not credible for the reasons provided in Judgment §§87-91 and 98(3).

(2)  As pointed out in Judgment §§77-78, 82 and 85-86, the Court also took into account the events which occurred after the two joint accounts were created, before coming to the conclusion that none of such events would alter its views on Father’s intention.  As a matter of fact, such events further reinforce the Court’s views.

(3)  Insofar as the Defendant relies on the withdrawals made during Father’s lifetime, the Court also addressed in Judgment §98 as to why they do not help establish the Defendant’s case.

(4)  There are no real answers to the various fundamental problems identified by the Court in Judgment §59 regarding the Defendant’s evidence on Father’s alleged intention or wish to gift the credit balance of the Premier Account to him.

9.  Thirdly, the Defendant contends that the Court failed to consider properly or at all Father’s distinct courses of conduct in holding bank accounts with authorised signatories on the one hand and joint account holders on the other.  This is again bereft of merit:

(1)  The argument has already been analysed and addressed in Judgment §76.  Insofar as the Defendant maintains that Father “had full knowledge of the difference between an additional signatory and a joint account holder”, it is nothing but his bare assertion.

(2)  The fact that it was the Defendant (rather than Father) who put forward the suggestion of opening a joint account (Judgment §59(5)) also militates against, rather than supports, the assertion that Father was consciously aware of the distinct courses of conduct and intended to make a gift to the Defendant by opening a joint account.

(3)  Further, it is unhelpful for the Defendant to only refer to Judgment §46 on the Court’s observation of what Father would appear to prefer, without appreciating the findings in Judgment §99 that after Mother’s death, Father might have needed some sense of security or peace of mind such that his bank accounts would not be left unattended in case his health condition did not allow him to operate them anymore.

10.  For the foregoing reasons, I am of the view that the Defendant’s appeal is not arguable with reasonable prospects of success.  On this basis alone, the Stay Application shall be dismissed.

No good reasons justifying a stay

11.  If I was wrong in the above analysis, I would wish to add that in any event, I am not satisfied that there are good reasons justifying a stay, or that the appeal would be rendered nugatory in the absence of a stay.

12.  The Plaintiff, being a successful party, is entitled to the fruits of his litigation and to enforce the Judgment.  Further, the long-established practice is where an appeal is against a monetary judgment, a stay will only be granted if the appellant can satisfy the court that if the judgment sum is paid, there is no reasonable prospect of recovering it in the event of the appeal succeeding: China Citic Bank International Ltd v Durrant Simon Partrick Michael (CACV 127/2014, 21 July 2014) at §27 per Chu JA (as Chu VP then was).  The Defendant has failed to show that this is the case.

13.  The Defendant contends that the levying of execution would result in financial ruin for himself, as he does not have sufficient liquid assets and would be forced to sell his landed properties and liquidate his shareholding.  Good evidence is required to support such allegation: Star Play (supra) at §9(3).  I am of the view that no good or concrete evidence was adduced by the Defendant to support the contention.  The mere fact that he might be required to sell some of his properties in order to satisfy the judgment debt is by no means a sufficient reason for a stay.  The Defendant has failed to provide any evidence on whether he could or has taken any steps to raise funds elsewhere.  Neither is there any evidence as to why the Defendant could not live with any other members of his family or why he could not continue his business (which on the one hand was alleged to be his main source of income but on the other hand was, according to his own evidence, running at a loss over the past few years) by renting another workshop or office if he had to sell any of his residential or commercial properties.

14.  Having taken all the circumstances into account, I am not satisfied that an absence of a stay would render the appeal nugatory or would otherwise have a serious deleterious effect on the Defendant even on the assumption (albeit my ruling above) that his intended appeal has a reasonable prospect of success.

Disposition

15.  In view of the reasons stated above, I order that the Defendant’s Stay Summons be dismissed with costs.

16.  The Plaintiff has lodged a statement of costs.  The amount claimed is reasonable and I am of the view that the full sum shall be allowed.  Hence, the Plaintiff’s costs are summarily assessed at HK$65,636 to be paid by the Defendant within 14 days.

17.  I make no order as to costs in respect of the Defendant’s summons dated 9 May 2023 for leave to file his 8^th Affirmation.