TANG YING LOI v. TANG YING IP alias TANG YING YIP AND OTHERS

HCA 2487/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2487 OF 2009

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DECISION
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1. I have before me an application by the 1^st and 3^rd defendants by summons dated 10 February 2015 seeking a stay of execution of my earlier judgment dated 7 January 2015 (“the Judgment”) and the conduct of the inquiry directed under the Judgment pending the determination of their appeal against the Judgment to the Court of Appeal.

2. The basic facts of this case are set out in my reasoned judgment handed down on 7 January 2015 and I shall not repeat them here.

3. The principles governing an application for a stay of execution of a judgment pending appeal are well established.  The applicant is required to demonstrate a “good reason” for a stay of execution. 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.  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.  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.  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.  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.  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.

4. The 1^st and 3^rd defendants’ grounds of appeal are set out in their notice of appeal dated 4 February 2015.  Mr Mok for the 1^st and 3^rd defendants has developed some of the grounds of appeal in Section E of his skeleton submissions dated 9 April 2015, and supplemented them in his oral submissions this afternoon.  Many of the grounds of appeal were raised at the trial, which the 1^st and 3^rd Defendants are of course entitled to re-run in the Court of Appeal.  Mr Mok has also placed some emphasis on the fact that in the reasoned judgment, I did not consider the issue of whether the account of profits ought to end with the date of the repayment of the Loan on 27 October 2003, when the value of the Property had appreciated by 4% only up to that date.  This issue will no doubt be further explored in the Court of Appeal, having regard to the way in which the 1^st and 3^rd defendants’ case was put at the trial.

5. In any event, Mr Chain accepts that the 1^st and 3^rd defendants’ appeal is arguable (ie not frivolous), but he says that it is not strong.  For the present purpose, I am content to proceed on the basis that the 1^st and 3^rd defendants’ appeal is reasonably arguable.  I am unable to accept, however, that they have a strong appeal or a strong likelihood of success in the appeal.

6. The question is whether there is any “good reason” to order a stay of execution pending appeal.

7. The Judgment does not require the 1^st and 3^rd defendants to pay any money or transfer any property to the plaintiff or to the Estate of Tang Pui King, deceased (“the Estate”), at this stage.  It directs an inquiry to be carried out to ascertain the profits and compensation which the 1^st defendant is liable to account or pay to the Estate.  Before such inquiry can be carried out, some further discovery will have to be made, and expert evidence on valuation of the property known as Nos 129-131 Castle Peak Road, Yuen Long, New Territories, Hong Kong (“the Property”) and evidence regarding the rentals and other income (if any) derived from holding the Property as well as expenses incurred in relation to the Property (including costs of repair and maintenance of the Property) will have to be prepared.  However, there is no question of the 1^st and 3^rd defendants’ appeal being rendered nugatory if a stay is not granted.

8. I am told that the appeal has been fixed to be heard by the Court of Appeal on 15 October 2015, some 6 months from today. The evidence mentioned above has not yet been exchanged.  The parties’ estimate of the length of the hearing of the inquiry is 2 days.  Given the state of the court’s diary, it is unlikely that the hearing of the inquiry will take place before 15 October 2015.  Further, I shall be prepared to direct that the inquiry be heard on a date not before 15 December 2015, ie 2 months after the hearing of the appeal, which would minimise the risk of wasted costs being incurred in relation to the actual hearing of the inquiry.

9. I accept that some costs incurred or to be incurred in preparing for the inquiry may be wasted and be irrecoverable by the 1^st and 3^rd defendants should they succeed in the appeal, but the risk of wasted or irrecoverable costs is inherent in our system of litigation and cannot by itself justify a stay of execution pending appeal: see Strix Ltd v Otter Controls Ltd [1995] RPC 675, at 679 per Laddie J; Magic Score Ltd v HSBC, HCA 11077/1994 (24 February 2006), at paragraph 12 per Lam J (as he then was).

10. This having been said, the complexity and costs of the inquiry are factors which the court can and does put in the scales in the court’s balancing exercise as to whether a stay ought to be granted. The inquiry in the present case is, in my view, relatively straight forward. Thus, I am not prepared to attach much weight on this factor, particularly having regard to the direction mentioned above regarding the fixing of the date for the hearing of the inquiry.

11. Mr Mok also relies on the fact that the plaintiff has put in a respondent’s notice by way of cross appeal which, if successful, would have a substantial impact upon the scope of the inquiry. Again, I am content to proceed on the basis that the plaintiff’s cross appeal is reasonably arguable, but I do not consider that, for the purpose of considering whether there ought to be a stay pending appeal, it has any greater significance than the 1^st and 3^rd defendants’ appeal.

12. I have been reminded by Mr Chain that the plaintiff is now 87 years old, and was only able to pursue the present action as a result of information coming to light after previous protracted litigations commenced by Ying Lam and the plaintiff to compel the 1^st defendant to provide an account concerning the administration of the Estate and the Loan respectively.  Any further delay in the conduct of the inquiry would, in my view, be prejudicial to the plaintiff in view of his advanced age.

13. Overall, I do not consider that a good reason has been shown for a stay of execution.

14. For the above reasons, I dismiss the 1^st and 3^rd defendants’ summons dated 10 February 2015 with costs to the plaintiff.