CHEUNG KA WAI v. LEE YU KWAN JEANETTE

HCMP 1459/2025

[2026] HKCFI 5430

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1459 OF 2025

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BETWEEN

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DECISION

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1.  This is P’s application by summons dated 29 April 2026 (“Summons”) for a stay of execution of §§5 and 10 of the Order dated 24 February 2026 (the “February Order”); and (ii) the Order dated 24 April 2026 (“April Order”) pending P’s appeal to the Court of Appeal against my Judgment delivered on 24 February 2026 (the “Judgment”).

2.  Reference should be made to the Judgment for the relevant background and the issues on title and severance that were decided. As the Judgment was a final judgment, P’s appeal lies as of right.

3.  P served her Notice of Appeal (“NOA”) on D on 23 March 2026. D served her Respondent’s notice on 13 April 2026.

4.  Then, on 29 April 2026, P took out the Summons for a stay.

5.  However, P did not apply to fix the appeal hearing until 26 June 2026. The appeal is now listed for 8 July 2027.

6.  Of the 8 grounds of appeal set out in the NOA, by 29 May 2026, ground 7 (corresponding to §5 of the February Order) had become moot[1].

7.  P’s application is now confined to §10 of the February Order and the April Order, both being costs orders.

8.  §10 of the February Order reads:

“10. The costs of these proceedings be to the Defendant with certificate for 2 counsel, such costs to be summarily assessed.”

9.  The April Order implemented §10 of the February Order, informing the parties of the amount of costs summarily assessed to be paid by P.

Applicable principles

10.  The applicable principles are well-established. It is axiomatic that an appeal does not operate as a stay of execution. The applicant has to demonstrate good reason as to why the Court has to do so.

11.  Star Play Development Limited v Bess Fashion Management Co Limited [2007] 5 HKC 84, is an oft cited authority for stay applications to which reference should be made. For present purposes, the following principles are of particular relevance:

(i) unless the applicant for a stay can justify a stay of execution, one will not be ordered. Justification can be demonstrated only if good reasons exist; §7[2]

(ii) the existence of an arguable appeal (that is, one with reasonable prospects of success) is the minimum requirement; §9(6)

(iii) the existence of a strong appeal or a strong likelihood that the appeal would succeed, will usually by itself enable a stay to be granted because this would constitute a good reason for a stay; §9(7)

(iv) where it is demonstrated that an appeal would be rendered a nullity if a stay is not granted, the court may require no more than the existence of an arguable appeal; §9(8)

(v) it is always relevant to consider the prejudice that would be caused to the successful party in the event stay is granted and if necessary, to impose conditions so as to minimise the prejudice caused to him; § 9(9)

(vi) the court embarks on a balancing exercise and uses its common sense, but bearing in mind at all times the starting point that the successful party is not to be deprived of the fruits of his success[3]. §10

P’s case

12.  Of the 7 grounds of appeal raised, 6 relate to issues of title and liability.

13.  P submits that prior to the Decision, there was no authority for the proposition that an equitable charge would be created immediately upon execution of an irrevocable power of attorney, a proposition which P considers ‘novel’[4]. On that basis P considers grounds (1) and (3) to have reasonable prospects of success.

14.  P also submits that as the ruling on severance amounts to a decision conflicting with an earlier CFI decision (Ho Wai Kwan), ground (6) must also have reasonable prospects of success[5].

15.  P further submits that ground (8) of the NOA relating to §10 of the February Order[6] has a strong likelihood of success irrespective of whether P would succeed on any of grounds (1) to (6).

16.  The nub of ground (8) is that the Court made an order of costs absolute with certificate for 2 counsel when P’s skeleton (at §80 (2)) had invited the Court to make a costs order nisi.

17.  As regards ground (8), I note that P does not dispute that costs of the OS should follow the event[7].

18.  The Court’s discretion as to costs is unfettered. There is no rule that requires a costs order to be made on a nisi basis. If the Court considers it appropriate on the particular facts to make a costs order absolute, it has the power to do so.

19.  P’s complaint is that, given the specific request in her skeleton submissions, she should have been given the opportunity to object to the certificate for 2 counsel before the order was made absolute.

20.  On that basis, I am prepared to consider ground (8) as arguable. However, I do not consider that it has a strong likelihood of success.

21.  P submits that a stay is justified for otherwise the appeal would be rendered nugatory if no stay is granted. Her evidence is to the following effect:

(i) P is now retired, living on very limited savings;

(ii) apart from there being outstanding fees owing to her solicitors (“SK”), she has to have some funds for legal fees in the appeal;

(iii) P confirmed receipt of deposits totalling $838,000 (“Deposits”)[8] from SK in July 2025;

(iv) P has not asked for further advances from the Bank that granted the mortgage loan and P has been punctually repaying mortgage instalments throughout the past months;

(v) P’s financial resources are what she has in her various bank accounts totalling a net amount of $784,000 which includes the sum of just over $0.5 million being monies withdrawn from her MPF account to equip herself with financial resources to prosecute the appeal;

(vi) Mr Yip died intestate leaving surviving him P and 3 adult children. Under his intestacy, P is entitled to no less than 50% of his estate and thus “P should have no less than 75% equity in the Property[9]”;

(vii) even if P were to fail on all her grounds of appeal, D would not be at risk of being out of pocket should the stay be granted[10];

(viii) P confirmed that she has used up a substantial part of the Deposits for her legal costs and disbursements in the OS.

22.  In short, P’s case is that payment of $530,000 to D pursuant to the costs order will have the effect of stultifying her appeal as she only has financial resources of $784,000.

23.  Mr Andrew Mak, counsel for D, challenges that assertion in that it is unsupported by cogent evidence. Indeed, it is remarkable that the Court has not even been provided with something as basic as P’s appeal budget. The Court should not be put in a position of having to second-guess the likely appeal costs.

24.  What P has disclosed is that she has used up a ‘substantial’ part of the Deposits of $838,000 for her legal costs and disbursements in the OS but without giving any particulars of what is left, where it has gone, let alone the amount of costs said to be still outstanding. That P was not forthcoming with necessary particulars is an understatement.

25.  According to P, she is entitled to no less than a 75% beneficial interest in the Property. What that corresponds to is not stated and the Court is left to extrapolate from the evidence what that amount is. Taking into account the outstanding mortgage loan, a 75% share or interest in the Property would be in excess of $5 million. Yet, there is no evidence that P made any attempt to obtain funding. Nor is there clear evidence that she has no other assets such as shares, stock or other investments.

26.  P contends that a stay will not give rise to any prejudice to D on the basis that D has a lien on the Property for the return of the Deposits, damages (of $30,000) and interest on those 2 amounts. D would not be at risk of being kept out of pocket should a stay be granted, even in the event of an unsuccessful appeal[11].

27.  Again, no figures are given and the Court is left to calculate the net value of P’s interest in the Property. Assuming that the Property has retained its value of $8.38 million, after repayment of the mortgage loan, P’s interest of 50% would be of the order of $3.4 million. P submits that that would be sufficient to satisfy the February and April Orders as well as D’s costs in the appeal.

28.  On the question of prejudice to D, as stated in the annotation at §59/13/1 of Hong Kong Civil Procedure 2026:

“The court does not “make a practice of depriving a successful litigant of the fruits of his litigation, and locking up the funds to which prima facie he is entitled[12]” pending an appeal (The Annot Lyle (1886) 11 PD114, 116 (CA); Monk v Bartram [1891] 1 QB 346) …”

29.  In my view, non-payment of funds due causes immediate prejudice to the party entitled to be paid such funds. P relies in part on D’s purchaser’s lien in respect of the amounts described in §26 above. But that is no answer, in particular, to the award of costs.

30.  P’s delay in applying to fix the appeal hearing [13] has caused further prejudice by further prolonging the period during which D’s costs remain unpaid.

Disposition

31.  Applying the principles set out in §11 above, the Court has to engage in a balancing exercise having regard to the evidence before it. In all the circumstances, I am prepared to grant a stay conditional on P making an immediate payment of $200,000 to D on account of costs awarded to D within 7 days of this Decision.

32.  I further order that the costs of the Summons be in the cause of the appeal.