MKKWH (also known as MKGWH) v. RKSH

CACV 197/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 197 OF 2012

(ON APPEAL FROM HCMC NO. 9 OF 2010)

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JUDGMENT

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Hon Lam JA (giving the judgment of the Court):

1. In this appeal, the Petitioner wife is appealing against the judgment of Deputy High Court Judge Carlson of 10 August 2012 on ancillary relief. The substantive appeal will be heard on 20-21 June 2013 before another division. In the meantime, she applied for stay of execution of the judgment of Judge Carlson. Stay was granted by Cheung JA on 30 January 2013. The Respondent husband appealed against the stay. This is our judgment on the appeal against the decision of Cheung JA.

2. Whether a stay is to be granted is a matter of judicial discretion.  Though a party dissatisfied with the decision of a single judge can appeal to the full court, it does not mean that the full court will entertain the appeal as if it were dealing with the application at first instance.  The full court would only interfere with the exercise of discretion when it is satisfied that the single judge had erred in principle or had given wholly erroneous weight to some matters or failed to take into account some other matters or that the decision was plainly wrong, see Mok Pak Keung v Wong Ip Ming CACV 78 of 2000, 8 Sept 2000.

3. Further, in a stay application it would generally be wrong to embark on what in substance is a test run of the substantive appeal on the pretext of arguing that the appeal is or is not reasonably arguable.  Whilst the party seeking a stay must show that the appeal is arguable (see Star Play Development v Bess Fashion [2007] 5 HKC 84), it does not mean that parties could deploy full arguments on law and facts quoting in extenso all the relevant evidence and transcript as if an application for stay is a rehearsal of the appeal proper.  Short of any exceptional circumstances calling for a more minute examination of the merits of an appeal, with the benefit of written skeleton submissions, the court is able to assess whether an appeal is reasonably arguable without lengthy oral submissions from counsel.

4. A party appealing against an assessment of a single judge on arguability carries a heavy onus.  Arguability is a matter which judges can reasonably differ.  As such, it would have to be a very clear case before the full court can say that the single judge is wrong.

5. The court must also be mindful that it should not usurp the role of the court hearing the appeal proper.  Thus, in a decision on stay, it would normally be sufficient for brief reasons to be given as to why the court is of the view that it is appropriate to grant or to refuse stay.

6. In the present case, Cheung JA granted the stay on the basis that the appeal is arguable on at least three grounds identified at paras 3 to 5 of his judgment of 30 January 2013.  His Lordship did not say these grounds were so strong that a stay is justified without any other reason. Instead, he only said these were arguable grounds and to justify a stay the wife had to show that without it the appeal would be rendered nugatory.

7. Cheung JA was satisfied that the appeal would be rendered nugatory on the ground that adjustment of monetary payments could not fully compensate the wife for the sale of the antiques if she succeeds in the appeal.  His Lordship also balanced that against the claim of the husband that delay in execution would prejudice his financial position and may even jeopardize the effort of the company in raising fund.

8. Mr Yu SC (appearing with Mr Dawes for the husband) submitted that Cheung JA erred in holding that the appeal is arguable.  He also contended that the appeal would not be rendered nugatory if no stay is granted.  He also submitted that Cheung JA reached the wrong conclusion as regards the prejudice to the husband and the company if a stay is granted.

9. With respect, Mr Yu’s submissions do not persuade us that Cheung JA was wrong in his conclusions as to the arguability of the appeal. It would not be profitable nor desirable for us to recite at length the contentions on the merits of the appeal.  In short, we agree with Cheung JA that the grounds identified in his judgment are reasonably arguable, though not necessarily strong enough per se to justify a stay.  The merits of the appeal have to be canvassed at the appeal proper.

10. As regards the conclusion of Cheung JA on the appeal being rendered nugatory if stay is not granted, Mr Yu’s challenge did not pinpoint any errors of the kind referred to in Mok Pak Keung v Wong Ip Ming, supra.  Counsel could not dispute the proposition that once the antiques are sold they could not be recovered and monetary adjustment could not provide adequate compensation.  In essence, Mr Yu’s point boils down to this: splitting up the collection and sale of some items are inevitable even if the wife were successful in the appeal.  He also rejected the suggestion of the wife to exchange her shares for the antiques to be unworkable due to disagreement on valuations.

11. We do not see how these contentions can warrant our intervention with Cheung JA’s decision to grant some form of stay of execution. Whilst the splitting up and sale of some items might be inevitable, how the collection is to be split up and which items must be sold depend on the mechanism for achieving the fair distribution of the items between the wife and the husband.  By the appeal, the wife is trying to persuade the Court of Appeal to overturn Judge Carlson’s decision on the mechanism.  Thus, the conclusion of Cheung JA on the appeal without a stay being rendered nugatory cannot be faulted.

12. As regards the prejudice of a stay on the husband, we have examined the relevant evidence identified by counsel.  We do not find such evidence to be particularly convincing with regard to the alleged predicament of the company.  There is nothing to suggest that the company is likely to cease business or be delisted with the stay granted by Cheung JA.  On such evidence, we cannot see how it could be suggested that His Lordship made any error which would call for intervention by the full court on the ground of not properly balancing the interest of the husband against that of the wife.

13. As a fallback position, Mr Yu invited this court to consider a proposal of the husband in correspondence; leaving aside the items chosen by him and select from the remaining items up to a value of $140 million for distribution of $70 million worth of items to each of them. The proposal was only made after the hearing before Cheung JA, though before His Lordship handed down his judgment. There was no mention of this proposal in His Lordship’s judgment.

14. We see no valid reason why there should not be a partial stay pending the appeal. The Wife has to accept that the Husband would get some items of the antique furniture irrespective of the outcome of the appeal. The proposal in our view is a fairer way of striking a balance between the interests of the parties.

15. For these reasons, the appeal against the decision of Cheung JA on stay is allowed to the extent indicated. We will hear the parties on the mechanism of choosing items from the remaining furniture to the value of $140 million, specifically whether there should be any time frame for doing so.