CHINA CITIC BANK INTERNATIONAL LTD v. DURRANT SIMON PARTRICK MICHAEL

HCMP 3196/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 3196 OF 2013

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J U D G M E N T

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Introduction

1. In this mortgagee action, Master Leong gave an order and judgment in favour of the plaintiff bank (“P”) on 11 February 2014 (“Order”).

2. The Order granted P (1) payment of the amounts outstanding under the 1^st and 2^nd Instalment Loans by the defendant (“D”)  (2) possession of the Mortgaged Property in default of D’s payment thereof and all other moneys (if any) secured to P by the Mortgage and (3) costs.

3. D issued a notice of appeal on 25 February 2014.  The main ground for his appeal as appeared in his then supporting affirmation was that he was not allowed by Master Leong to file an affirmation in opposition prior to the Order.

4. D’s purported defence at the hearing before Master Leong was mainly that (i) those who came to equity must come with clean hands and (ii) P had provided incorrect information to other institutions to prevent D from obtaining refinancing on the mortgaged property.  Master Leong did not grant leave to D to file an affirmation in opposition because what was put forward by D at that time did not constitute a valid defence, and at most be regarded as a separate claim.

5. After D lodged his appeal, he obtained leave from DHCJ Burrell to file a further affirmation.  D subsequently put forward an additional ground for the appeal, namely to challenge the accuracy of P’s calculations of the outstanding amounts under the 1^st and 2^nd Instalment Loans and interest.

6. The appeal was heard by DHCJ Poon who handed down a judgment on 23 June 2014 (“Judgment”) D’s appeal was dismissed.

7. D lodged a notice of appeal to the Court of Appeal on the same day.

8. Prior to the Judgment, P had obtained leave to issue a writ of possession and fieri facias combined, and Master Ho had granted D an interim stay pending the outcome of his appeal.  The interim stay was uplifted when D’s appeal was dismissed by DHCJ Poon.

9. On 24 June 2014, D issued a summons for stay of execution of the Order and the writ of possession and fieri facias pending the outcome of his appeal to the Court of Appeal.

10. This was heard by Master S Lo on 27 June 2014. Master S Lo dismissed D’s application for stay.  On the same day, he lodged an appeal to this court against Master S Lo’s decision.

Legal Principles

11. Order 59 rule 13 (1)(a) of RHC provides that:-

“Except so far as the court below or the Court of Appeal or a single judge may otherwise direct an appeal shall not operate as a stay of execution or of proceedings under the decision of the court below.”

12. There was no dispute over the legal principles on an application for a stay.  D himself had referred to the principles set out in Star Play Development Ltd and Bess Fashion Management Co Ltd [2002] HKCFI 594; [2007] 5 HKC 84; HCA 4726/2001 ( 28.05.02). The main principles are:-

(i)    An appeal would not operate as a stay of execution of proceedings unless a party could justify its claim[1].

(ii)   The existence of an arguable appeal (ie one with reasonable prospect of success) is the minimum requirement before a Court will even consider granting a stay.  If the Court is not convinced that there exist reasonable grounds of appeal, no stay will be granted[2].

(iii)   Conversely, 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[3].

(iv)   If there is only an arguable appeal and the Court would need to consider whether the absence (or existence) of a stay would render an appeal nugatory (thus bringing into the focus the relative prejudice that may be caused to the appellant and to the respondent by a stay of execution) and the merits of the appeal[4].

(v)   As to whether an appeal would be rendered nugatory, the Court must first have regard to the nature of the order that was the subject matter of the appeal.  If the order appealed against was a money judgment, the Court would require evidence as to why the levying of execution would result in the appeal being rendered nugatory.  It would be sufficient for the appellant to demonstrate that the failure to grant a stay would have a serious deleterious effect and a financial ruin is not necessary.  However, the Court would require good evidence to support the contention.  A bare assertion was not enough[5].

(vi)   The successful party shall not be deprived of its fruit of success and it was always relevant to consider the prejudice that would be caused to the successful party in the event a stay was granted and if necessary, to impose conditions so as to minimise the prejudice caused to him[6].

13. Further, Order 45 rule 11 of RHC 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.”

14. Order 47 rule 1 of RHC provides that:-

“Where a judgment is given or an order made for the payment by any person of money, and the Court is satisfied, on an application made at the time of the judgment or order, or at any time thereafter, by the judgment debtor or other party liable to execution-

(a) that there are special circumstances which render it inexpedient to enforce the judgment or order, or

(b) that the applicant is unable from any cause to pay the money,

  then, notwithstanding anything in rule 3, the Court may be order stay the execution of the judgment or order by writ of fieri facias either absolutely or for such period and subject to such conditions as the Court thinks fit.”

Discussion

Under RHC Order 59 rule 13 (1)(a)

15. D had set out 5 grounds in his Notice of Appeal dated 24 June 2014:

(i) That the Deputy Judge erred in fact and law;

(ii) That the Deputy Judge allowed his personal bias against D to influence his decision and actions during the hearing;

(iii) That the Deputy Judge wrongly exercised his discretion in allowing P’s affirmation dated 23 May, 2014;

(iv) There was no evidence to support the Deputy Judge’s determination of the accuracy of the cash sum claimed by P;

(v) The amount claimed by P was factually inaccurate.

16. D had in his skeleton submissions before this court also stated that DHCJ Poon had completely ignored the “fraudulent,defamatory, criminal, racist, misleading and libelous actions ” taken by P over the last 4 years, and that these amount to a material breach of the Mortgage contract.  I see no such grounds in his above Notice of Appeal, nor any sufficient evidence to support his allegations against P.

17. So far as Ground (ii) is concerned, D had issued a summons on 7 May 2014 for DHCJ Poon to recuse himself from hearing the appeal. This summons had been dismissed on 8 May 2014.  DHCJ Poon had given reasons orally and further in paragraph 7 of his judgment[7].  So far as I am aware, there had been no appeal against this order.  Also, there had been no further submissions put forward by D at the hearing before this court on Ground (ii).

18. As regards the other grounds, D had referred to Order 88 rule 5(6) and submitted that under that rule P must prove that the money claimed was due as P was claiming payment of moneys secured by the mortgage and D’s case was that P had not provided supporting documents. However, on my understanding of rule 5(6), the requirement is that P must prove to the satisfaction of the court , and the requirement is to give particulars referred in rule 5(3) and there are no specific requirements of any documents as required by D.

19. P was granted leave by DHCJ Poon to file the 3^rd affidavit of Tse Kai Yin (“Tse”) on 23 May 2014.  In his submissions before this court, D had challenged the granting of leave by DHCJ Poon, as Tse’s 3^rd affidavit was filed on a Friday afternoon before the hearing was to resume on the following Monday 26 May 2014.  D further pointed out that there had been a previous order to the effect that no further affidavits were to be filed.

20. DHCJ Poon stated in the Judgment that leave was granted  because (i) D had himself put in another affirmation last minute challenging P’s calculations of the amounts due; and (ii) the information disclosed in Tse’s 3^rd affidavit was actually what D demanded under his summons under paragraph 5 (a) of the Judgment[8]. 

21. For reason (i) above, D himself had filed his 3^rd affirmation only on 5 May 2014, which was shortly before the 1^st hearing fixed on 8 May 2014 before DHCJ Poon.

22. As for reason (ii), D submitted that what DHCJ Poon said was not correct.  The summons referred to by DHCJ Poon in paragraph 5 (a) of the Judgment was D’s summons issued on 9 April 2014.  What was sought by D in that summons, among other things, were “supporting documents including bank statement, repayment history and source of interest % with regards to the amounts and interest ” .  That summons was later dismissed by DHCJ Poon.  Tse in his 3^rd affirmation had provided  supporting documents , ie 2 tables,  in relation to the bank’s calculations for the arrears of instalments and various interest rates.  I do not see why DHCJ Poon was wrong in his reason (ii).

23. D had also complained that he was given no opportunity to file an affirmation in reply to Tse’s 3^rd affirmation. 

24. DHCJ Poon had stated that D had failed to show any specific defect of P’s version of the accounts and he was satisfied the P’s evidence reflected accurately the states of the 2 subject Mortgage Loan accounts[9].  Further, he had set out why he was satisfied with the accuracy of the calculations of the outstanding amounts[10].

25. In fact up to the time of the hearing, D had not been able to show any specific defect in P’s accounts, nor had he made any payments, or part thereof, toward the amounts stated in the Order.

26. Whether to grant leave to file the 3^rd affirmation by Tse or to allow D to file any further affidavit was an exercise of discretion.  The Court of Appeal is unlikely to interfere with an exercise of discretion unless such is plainly wrong.  Further, as submitted by Mr Chan, any finding of fact is also unlikely to be disturbed on appeal. DHCJ Poon was clearly satisfied that P had complied with O 88 r5(6) and had proved the money was due and payable.

27. Having considered the above, I am not convinced that there exists an arguable appeal or an appeal with reasonable prospect of success, and thus in my preliminary view, D is not able to meet the minimum requirement stated in Star Play.  As stated therein by Ma J, as he then was, however exceptional the circumstances may be otherwise justifying a stay of execution, if the court is not convinced that there exist arguable grounds of appeal, no stay will be granted[11]. 

28. In the above circumstances, I do not need to deal with D’s submissions on whether the appeal would be rendered nugatory if no stay is granted, or on the prejudice as alleged by him.  Suffice to say, as pointed out by Mr Chan, if D were to succeed in establishing that D’s alleged inaccuracies in P’s version of accounts in relation to the 1^st and 2^nd Instalment Loans, P, as a reputable bank in Hong Kong, would be able to repay the same to D.

Under RHC Order 45 rule 11

29. D had referred to this rule in the margin of his summons for stay before Master S Lo.  

30. No evidence had been put forward by D in relation to any matters under this rule to justify a stay thereunder, nor can this court see any such matters which have occurred since the Order or the Judgment.

Under RHC Order 47 rule 1

31. There had been no sufficient evidence put forward by D as to any special circumstances which would render it inexpedient to enforce the Order, or that D would be unable from any cause to pay the money.

32. In any event, this rule applies only to a writ of fieri facias, and not a writ of possession.  So far, D has not paid any sums towards the amounts stated in paragraphs (1) to (3) of the Order, and there has been no offer from him to do so at the hearing, and thus P is entitled to enforce paragraph (4) of the Order.

Conclusion

33. Having considered the above, I dismiss D’s summons to appeal against Master S Lo’s order of 27 June 2014 refusing a stay, with costs to P.