FU TAT CREDIT LTD v. LAU YUNG TAI by his guardian ad litem LAU VACO AND ANOTHER

HCA 1757/2012, HCA 1759/2012 & HCA 1905/2013
(Heard together)

[2025] HKCFI 1847

HCA 1757/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1757 OF 2012

_________________

BETWEEN

_________________

HCA 1759/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1759 OF 2012

_________________

_________________

HCA 1905/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1905 OF 2013

_________________

_________________

_________________

DECISION

_________________

A.  THE APPLICATION

1.  The 3 money lender actions herein had been tried together with 2 other actions by this Court. By a Judgment handed down on 18 February 2025 (“the Judgment”)[1], this Court made the following orders in the 1757 Action, the 1759 Action and the 1905 Action (collectively, “the 3 Actions”) against Father:

(1)  An order for possession of Lot 338A, Lot 257D and Lot 262A (the 1757 Action);

(2)  An order for payment of the sum of $7,200,000 together with interest (the 1757 Action);

(3)  An order for possession of Lot 539 and Lot 510A (the 1759 Action);

(4)  An order for payment of the sum of $6,840,000 together with interest (the 1759 Action);

(5)  An order for possession of Lot 671 (the 1905 Action);

(6)  An order for payment of the sum of $3,047,521.60 together with interest (the 1905 Action); and

(7)  Costs of the actions.

(Lot 338A, Lot 257D, Lot 262A, Lot 539, Lot 510A and Lot 671 are collectively referred in this Decision as “the Lots”)

2.  On 17 March 2025, Father took out a summons in each of the 3 Actions (“the Summonses”) and applied for stay of execution of the aforesaid orders pursuant to Order 45 rule 11 of the Rules of the High Court (“RHC”).

B.  THE LEGAL PRINCIPLES

3.  The only statutory basis relied on by Father in the present applications is Order 45 rule 11 of the RHC, which provides that:

“Without prejudice to Order 47, rule 1, a party against whom a judgment has been given or an order made may apply to the Court for a stay of execution of the judgment or order or other relief on the ground of matters which have occurred since the date of the judgment or order, and the Court may by order grant such relief, and on such terms, as it thinks just.”

4.  In Tam Ho Man v Wong Kwok Tai (HCA 4736/1985, unreported, 20 October 1986), it was held by Hunter J that the matters referred to under the said rule are those:

“which go to the validity of the judgment, and which if established before the court, might justify the court in saying that, this is not a judgment which on the material now placed before it, it will allow to be executed upon.”[2]

5.  As Father is not relying herein on any matter which has occurred since the date of the Judgment, it is apparent that Order 45 rule 11 of the RHC is not the apposite rule in the present situation, and Father should have relied on Order 59 rule 13 of the RHC instead.

6.  In this regard, the starting point is Order 59 rule 13(1)(a) of the RHC, which stipulates that a pending appeal does not operate as a stay. The grant of a stay of execution pending appeal is a matter of the court’s discretion.

7.  The relevant principles are trite. In Star Play Development Limited v Bess Fashion Management Co. Ltd. [2007] 5 HKC 84, it was held by Ma J (as his Lordship then was) that the existence of an arguable appeal (that is, one with reasonable prospect of success) is the minimum requirement before a court would even consider granting a stay. However exceptional the circumstances may be otherwise justifying a stay of execution, if there exist no arguable grounds of appeal, no stay will be granted.

8.  In the event the court is satisfied that there is a strong likelihood that the appeal would succeed, that in itself would enable a stay to be granted because this would constitute a good reason for a stay.

9.  If there is just an arguable appeal instead of a strong one, the appellant has to provide additional reasons as to why a stay is justified. The demonstration of an appeal being rendered nugatory in the absence of a stay is a common example.

C.  DISCUSSION

C1.  Order 45 rule 11

10.  As pointed out above, this rule simply has no application because the Father is not relying on any matter which has occurred since the date of the Judgment.

C2.  Order 59 rule 13

11.  The first matter which this Court should consider is whether the Father has a strong (or at least an arguable) appeal.

12.  He has raised 3 grounds of appeal, namely:

(1)  This Court has erred in law by failing to accommodate Father’s dementia diagnosis, made one day before the trial in 2024, rendering him unable to testify and participate, resulting in procedural unfairness after a 12-year trial delay;

(2)  This Court misapplied the law on presumed undue influence by not recognising a Class 2(B) presumption arising from the trust-based Father-Son relationship and the disadvantageous transactions, failing to shift the burden to the plaintiffs to prove Father’s free consent;

(3)  This Court erred in not finding the plaintiffs were on inquiry of undue influence and failed to take reasonable steps (e.g. getting independent legal advice), thus invalidating the transactions as against Father.

13.  With respect, these grounds of appeal are not arguable at all.

14.  Firstly, the ground of “procedural unfairness” is not understood in the light of what happened at the trial:

(1)  When the trial resumed after lunch hours on Day 1, Father’s counsel suddenly produced a letter to the Court and alleged that Father was suffering from dementia and was mentally incapacitated. Counsel emphasised that he had no intention to apply for the adjournment of the whole trial. He only invited the Court to adjourn the matter to the following day so that his instructing solicitors could prepare for papers so as to make an application to appoint a guardian ad litem for Father;

(2)  The Court acceded to the request accordingly;

(3)  Upon the resumption of the trial on Day 2, Father’s counsel made an application to appoint Mr Lau Vaco as the guardian ad litem of Father;

(4)  The order for appointment was duly made and the trial continued.

15.  Hence, it is incomprehensible as to the basis of Father’s complaint. It is simply not open to him to allege on appeal that the Court should have taken any other course at the trial.

16.  Secondly, the arguments on undue influence are in effect challenges made against this Court’s findings of facts that:

(1)  The various loan arrangements were for Father’s own benefit;

(2)  Father’s consent to enter into the loan agreements was freely given with his full knowledge of the consequences;

(3)  Father all along knew what he was doing;

(4)  Father was not mistaken (as he alleged) that the Son was only renewing his own personal loans.

17.  It is trite that overturning a finding of primary facts on appeal is difficult, and an appeal on facts would only be entertained on narrow and well-defined circumstances. As the Court of Final Appeal has held in Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336, in considering an appeal against a primary finding of fact, the question for the Court of Appeal is whether, even though it did not have the advantages enjoyed by the trial judge who received the evidence at first hand, it is nevertheless satisfied that his conclusion on the facts was “plainly wrong”. The Court of Appeal would intervene only if so satisfied. If not so satisfied, the Court of Appeal would defer to the trial judge’s conclusion even if in some doubt as to the correctness of the trial judge’s decision on the facts.

18.  The kinds of mistake which could engage an appellate court’s power of intervention have been explained by Lord Neuberger in In re B (A Child) [2013] 1 WLR 1911, at [53] (as approved by the Court of Appeal in China Gold Finance Limited v CIL Holdings Limited (CACV 11/2015, unreported, 27 November 2015) at [19]):

“[…] where a trial judge has reached a conclusion on the primary facts, it is only in a rare case, such as where that conclusion was one (i) which there was no evidence to support, (ii) which was based on a misunderstanding of the evidence, or (iii) which no reasonable judge could have reached, that an appellate tribunal will interfere with it.”

19.  In the Notices of Appeal filed in the 3 Actions, Father has simply failed to explain why it was said that this Court has erred to come to the conclusion that it did.

20.  That being the case, there is no justification for this Court even to consider whether the discretion to stay the execution of the Judgment should be exercised.

D.  ORDER

21.  For reasons of the aforesaid, the Summonses are dismissed.

E.  COSTS

22.  Costs should follow the event. Father shall bear the respective plaintiff’s costs of the Summonses, to be taxed on indemnity basis[3]if not agreed.