YUEN TOOMBS STEPHANIE DOWNS v. YUEN ELMER

CACV 488/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 488 OF 2001

(ON APPEAL FROM HCMC NO. 2 OF 2000)

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J U D G M E N T

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Introduction

1. The Petitioner and the Respondent ("the wife" and "the husband" respectively) married in 1989. They have two children. Unfortunately, their marriage broke down, and the wife petitioned the court for divorce. A decree nisi was pronounced, and it was made absolute a few months ago.

2. Both the wife and the husband applied for ancillary relief. Those applications were heard by Deputy Judge Woolley. On 21 February, he dismissed the husband's application for ancillary relief, but having found that the husband "is an extremely wealthy man with total assets well in excess of US$100m.", he made various lump sum orders against the husband in favour of the wife and the two children. He also ordered that dispositions by the husband of his shareholding in two companies be set aside. The husband is now appealing to the Court of Appeal against that order and against the order for the payment of the lump sum made in favour of the wife, though not against the order for the payment of the lump sums in favour of the children.

3. In the meantime, the wife commenced enforcement proceedings in New York, New Jersey and San Francisco, though the enforcement proceedings in San Francisco related only to the award in favour of the children. Those proceedings prompted the husband to apply for a stay of execution of that part of the judgment from which he was appealing pending the determination of his appeal. On 23 May, Deputy Judge Woolley dismissed that application, and on the same day the husband filed a summons renewing his application to the Court of Appeal. That is the application before me today.

4. The application before me today has another feature. The husband had been neither present nor represented at the hearing of the application for ancillary relief. That hearing had been postponed for a few days because of the poor state of the husband's health. But when the application came before the court again a few days later, Deputy Judge Woolley refused to adjourn the case again. On 7 July, the husband filed a notice of motion under Ord. 35 r. 2(1) seeking the setting aside of Deputy Judge Woolley's judgment on the ground of his non-appearance at the original hearing. That application is due to be heard on 4 October. Accordingly, the stay of execution is sought not merely pending the determination of the appeal but also pending the determination of that application.

The delay

5. I might have been more sympathetic to the application for a stay of execution if the appeal had been pursued expeditiously and the application to set aside the judgment had been filed in time. After all, if the husband is to be granted the indulgence he seeks, he has to have done his best to ensure that his wife would not be disadvantaged by it. She will be disadvantaged if she is kept out of her money longer than is necessary. As it is, although the husband claims that he was told by the Clerk of Court that he would be informed of when steps could be taken by him to progress his appeal, no application has in fact been made for the date of the hearing of the appeal (as opposed to the date for the hearing of today's application) to be fixed, even though the appeal was set down as long ago as 23 March.

6. Moreover, the application to set aside the judgment was filed over four months after the expiry of the deadline laid down by Ord. 35 r. 2(2). Although Mr Warren Chan SC for the husband has told me today that it was only when he was instructed to advise the husband that the possibility of an application to set aside the judgment under Ord. 35 r. 2(1) was considered, the fact remains that the application can only be considered on its merits if the husband's time for applying for the setting aside of the judgment is extended.

The merits of the application for a stay of execution

7. I have not seen any of the evidence relating to the reason why the husband did not attend the hearing before Deputy Judge Woolley (evidence which will, I assume, have to be filed on the application to set aside the judgment), and I therefore cannot form even a provisional view as to the merits of the application. The same is true of the appeal itself. The husband's financial affairs were complex, and without a detailed examination of the materials on which Deputy Judge Woolley based his conclusion that the husband continues to be a very rich man, I cannot really say how good his chances of success on the appeal are. However, in the light of the fact that Tele-Art Inc. and Tele-Art Ltd. had been wound up by the time of the hearing before Deputy Judge Woolley, and in the light of the evidence before him of the injection by the husband into Tele-Art Ltd. of the HK$100m. which represented the proceeds of the Mission Hills settlement, I am prepared to assume in the husband's favour for the purposes of this application, but without deciding, that his appeal has an arguable chance of success.

8. But that alone cannot justify the stay of execution which he seeks. "The Court does not 'make a practice of depriving a successful litigant of the fruits of his litigation, and locking up funds to which prima facie he is entitled', pending an appeal": Hong Kong Civil Procedure 2001, para. 59/13/1. The court will only grant a stay where special circumstances require one to be granted. I also accept that where the appeal is against the award of a sum of money (be it by way of damages or a debt), a stay will normally be granted only where the appellant satisfies the court that if the money is paid there will be no reasonable prospect of recovering it if the appeal succeeds. Mr Russell Coleman for the wife pointed out in his skeleton argument that there was no evidence of that here.

9. I agree that there is no evidence of that here, but that does not mean that a stay will never be granted in the absence of proof of that by the appellant. The point made by Mr Chan is that the enforcement proceedings which the wife has commenced are costly and time-consuming. The parties will have thrown away their money and wasted their time on those proceedings if either the judgment is set aside or the appeal is allowed.

10. I am not persuaded by that argument. The time and expense of the enforcement proceedings can be brought to an end immediately by the husband paying the US$10m. which he was ordered to pay to his wife and the sums totalling US$486,000.00 which he was ordered to pay for his children. Even if he does not have assets well in excess of US$100m. as the judge thought, he has not said in his affirmation in support of this application what his current assets are and what they are worth. In short, although he may well not be worth anything like as much as the judge thought he was, he has not persuaded me, on the evidence which he has chosen to file, that he simply cannot pay his wife and children the amount which would put the proceedings to enforce the judgment for the payment of the lump sums on hold for the time being.

11. In any event, if a stay of execution was to be granted, I would have to be satisfied that the wife and children would be paid the lump sums due to them without delay if the appeal fails. No attempt has been made by the husband to tell the court how that could be achieved. If it cannot be achieved because he simply does not have the money, that would, of course, be a sufficient explanation for not telling the court how it could be achieved. But since he has not persuaded me that he does not have the money to pay his wife and children the sums awarded, his failure to lay before the court contingency plans for payment in the event of his appeal failing is another ground for refusing the application for a stay.

Conclusion

12. For these reasons, this application for a stay of execution must be dismissed. But if prior to the determination of either the application to set aside the judgment or the appeal the husband pays the lump sums to the wife and for the children, I see no reason why there should not then be a stay of execution of that part of the order setting aside the dispositions of the shares in the two companies pending the appeal and the application. Indeed, Mr Coleman did not suggest otherwise. I therefore order that, in the event of the husband paying the sum of US$10m. to the wife and the sums totalling US$486,000.00 for the children prior to the determination of the application to set aside the judgment or the appeal, there be a stay of execution of the order setting aside the disposition of the shares in the two companies pending the determination of the application and the appeal.