CHEUNG WING KUEN, SAMUEL v. IP CHUI SUM

HCMP 1981/2020

[2021] HKCFI 3162

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1981 OF 2020

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D E C I S I O N

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1.  This decision is to be read with the judgment in this case dated 30 August 2021 (“the Judgment”), and the abbreviations therein are adopted here. By the Judgment, this Court made an Order under the Partition Ordinance (“PO”) for the sale of a property in the joint names of the parties and to have the net proceeds divided equally between them. Related thereto, Madam Ip has been ordered to deliver up vacant possession of the property to Mr Cheung by 30 November 2021 and that she shall permit prospective purchasers to inspect the Property on reasonable notice given by Mr Cheung or an estate agent.

2.  Madam Ip has lodged an appeal to the Court of Appeal on 27 September 2021.

3.  Before me are 2 applications:

(1)  Mr Cheung’s application taken out on 23 September 2021 for a penal order to be attached to the Order; and

(2)  Madam Ip’s application taken out on 30 September 2021 for stay of execution pending appeal.

4.  Madam Ip does not contest the first application and so I make an order accordingly.  Although she has initially contested the application, given her concession at this hearing and she has not wasted time and costs on filing affirmations, I make no order as to costs.

5.  As for the second application, before oral submission started, the parties have had without prejudice discussion on the terms of a stay by consent. This Court has further withheld the handing down of this decision until after 12 October so that the parties could negotiate the terms further.  In the end, no agreement could be reached, hence this decision.

Application for stay pending appeal

6.  The legal principles are not in dispute and have been set out in the case of Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84:

(1)  An appeal does not in itself operate as a stay of execution of the order appealed against (at §6).

(2)  The existence of an arguable appeal (ie one with reasonable prospect of success) is a minimum requirement before the Court would even consider granting a stay.  The existence of a strong appeal or a strong likelihood that the appeal would succeed, would usually by itself enable a stay to be granted.  Where there exists only an arguable appeal, the applicant would need to provide the Court with additional reasons why a stay is justified (§9(6)-(8)).

(3)  The applicant must demonstrate that good reasons exist.  Relevant factors include whether the absence of a stay would render an appeal nugatory (at §8).

Strong grounds of appeal

7.  The sole ground of appeal is that this Court had erred in holding that an order for sale would not prejudice or cause hardship to Madam Ip but that the Plaintiff would be prejudiced in the absence of an order for sale.  In support of that ground, it is said that:

(1)  Mr Cheung’s application under the PO was to gain a head start before ancillary relief proceedings between the parties are dealt with and ousted the jurisdiction of a family court.  The Judgment deprived Madam Ip of a chance to own and live in the Property if a property transfer order were to be made in her favour.

(2)  Mr Cheung’s remarriage is not a prejudice to him.  He is sitting on assets of substantially higher net value than those of Madam Ip.  He should not be allowed to benefit from his own wrong, including inaction to pursue ancillary relief and concealment of his remarriage.

(3)  The Court erred in failing to take into account all other relevant circumstances, eg that Mr Cheung has been occupying a property in Australia to the exclusion of Madam Ip.

(4)  The Court erred in placing too much weight on the hearing date of the OS being a milestone date but failed to observe the whole picture.

8.  An appeal will not be entertained from an order which it was within the discretion of the judge to make, unless it is shown that the judge exercised the discretion under a mistake of law, or in disregard of principle, or took into account irrelevant matters, or failed to exercise his discretion or the conclusion which the judge reached in the exercise of discretion was outside the generous ambit within which a reasonable disagreement is possible: Hong Kong Civil Procedure 2021, Vol 1, §59/0/54.

9.  Firstly, Madam Ip has not shown that this Court erred in law or principle.  The facts mentioned in paragraph 7 have been considered by the Court in the Judgment.  What the grounds of appeal challenge is really this Court’s exercise of discretion in ordering a sale after weighing the relevant factors.  It has not been shown that this Court has gone beyond the generous ambit within which a reasonable disagreement is possible.

10.  Secondly, the footnote to the Notice of Appeal states that Madam Ip will be introducing new evidence that, on 15 September 2021, she has lodged application to deal with the financial arrangements in the Australian Family Court.  She will be introducing Australian legal opinion that the Australia Family Court has the jurisdiction to make a property settlement order over an overseas property in due course.

11.  The footnote raises matters that arose only after the Judgment.  It is also contrary to the position at the hearing of the OS that Madam Ip would lodge an application in the Hong Kong Family Court (§6 of the Judgment).  It was subsequent to this hearing that Madam Ip’s solicitors informed the Court by letter (not by affirmation) that the papers for the Australian proceedings had been served on Mr Cheung.  All these matters can hardly show that this Court had erred in law or in principle.

12.  Thirdly, lodging an application for ancillary relief should not be regarded as a new development because there had been 10 months between service of the OS and the hearing which led to the Judgment during which Madam Ip could have lodged that application (§28(6) of the Judgment).  In any case, it cannot show that this Court has acted contrary to the principles in paragraph 8 above.

13.  Fourthly, the supporting affirmation of Madam Ip exhibits a lot of evidence that could and should have been adduced before the OS was determined – value of the Australian properties and medical evidence of her mental illness that might show prejudice to her which cannot be compensated by money.  Such evidence again cannot form the basis for challenging the Judgment.  An appeal is not an opportunity for Madam Ip to have another go at her case.

14.  There are no arguable, let alone strong, grounds of appeal.

Appeal being rendered nugatory

15.  It was her own delay in seeking ancillary relief that Madam Ip might not keep the Property.  If she should succeed in the appeal but the Property is sold, Madam Ip can seek redress from Mr Cheung who will have half of the net proceeds of sale and a property in Australia.  If she has any concerns as to enforcement, she can make the appropriate application to preserve assets before the appeal is heard.

16.  Madam Ip has failed to show that the appeal will be rendered nugatory.

Terms of stay

17.  The parties could not reach agreement on the terms of stay.  Madam Ip expressed surprise at the way Mr Cheung departed from his “open position” and asserts that she has already agreed to all his terms.

18.  However, it has been made clear that the discussion on terms of stay was without prejudice.  Since the parties could not reach agreement, the Court considers the stay execution in accordance with principles.  There being not even arguable grounds of appeal, there is no reason to grant a stay, regardless of the terms offered by any party.

Conclusion on the stay application

19.  The stay application is dismissed.  Madam Ip shall pay costs to Mr Cheung, summarily assessed at $35,000.