Yim Tin Fook and Another v. Yu Chor Lai, Kong Wai Hung and Sou Ka Lun t/a Wang Cheung Industrial Chemicals Co and Another

HCA 2613/2006

[2020] HKCFI 337

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2613 OF 2006

________________

________________

(By Original Action)

________________

(By Counterclaim)

Before: Deputy High Court Judge Alexander Stock SC in Chambers

Date of Last Written Submissions: 23 January 2020

Date of Decision: 5 March 2020

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DECISION

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1.By my Decision herein dated 16 October 2019 (the “Order 14A Decision”), I resolved certain questions in these proceedings under Order 14A. By my Decision on Relief and Costs dated 6 December 2019 (the “Decision on Relief and Costs”), I pronounced orders consequential on the Order 14A Decision.

2.I refer to the background and issues as set out in those decisions, and adopt the terminology used therein.  

3.By summons dated 9 December 2019 (the “Stay Summons”), D2 applied for, inter alia, a stay of the orders referred to at paragraph 24 of the Decision on Relief and Costs, pending determination of D2’s intended appeal to the Court of Appeal from the two said decisions.

4.This is my decision on the Stay Summons.

5.The Stay Summons came before me for a call-over hearing on 17 December 2019, at which I: (i) granted an interim stay of execution of certain of the orders pronounced in the Decision on Relief and Costs, pending determination of the Stay Summons; and (ii) gave directions for the filing of evidence, written submissions and disposal of the Stay Summons on paper.

6.I have now received and considered the evidence filed and written submissions lodged by D2 and Ps. The other parties to the proceedings did not participate in the Stay Summons[1].

Principles

7.There was no dispute as to the principles applicable to an application for a stay of execution pending appeal, which were summarised by Ma J (as he then was) in Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84 at paragraphs 6 to 10.

Arguable appeal

8.The existence of an arguable appeal is a minimum requirement before a court will consider granting a stay: Star Play at paragraph 9(6).

9.D2’s grounds of appeal are set out in his draft Notice of Appeal, all of which relate to Question 3 in the Order 14A Decision. Ps and D2 disagree as to whether these grounds are arguable. D2 asserts that the points raised are difficult and important, and not covered by direct authority in Hong Kong (citing the Order 14A Decision at paragraph 108).

10.I will not debate the merits of D2’s arguments, many of which are detailed, and were canvassed in the Order 14A Decision. However, I accept for present purposes that the appeal raises arguable points.

Stay of orders for demolition and vacant possession

11.D2 sought a stay of (inter alia) the orders for demolition of structures and delivery of vacant possession, pronounced at paragraph 24(2)(a) of the Decision on Relief and Costs.

12.D2 cited Star Play at paragraph 9(1): where the relevant order is for possession of premises, more often than not, it is likely that an appeal will be rendered nugatory without a stay of execution. To satisfy the requirement that an appeal be rendered nugatory, it can be sufficient to demonstrate that the failure grant a stay would have a serious deleterious effect: Star Play at paragraph 9(4).

13.Evidence was filed for D2 to the effect that: (i) the disputed land forms part of a compound known as Westfield Gardens, which has been in the possession of D2 (and following his death, of D2’s son) since around 1974, and which forms a single unit enclosed by a wall and fence; (ii) permitting other parties to gain possession of portions of the compound would compromise its integrity leading to security risks to the residents; (iii) the two structures on Ps’ Land cross over onto other portions of land retained by D2, such that their demolition would be only partial or would affect structures on land retained by D2; and (iv) demolition or alternation to the structures, walls or fences would likely be without recompense to D2, should the appeal succeed.

14.On this issue, Ps disputed the alleged security risks, asserted that the structures were a warehouse and village type house used for storage (rather than for residential use), and argued that the fence could be altered to enclose only other portions of lands belonging to D2.

15.I accept that D2 has filed sufficient evidence of prejudice to the integrity of the compound and possible alterations to fences, walls and structures which, in the absence of a stay of execution, would at least be complex or difficult to reverse, in the event of a successful appeal.

16.I consider that the preferable course of action is to preserve pending D2’s appeal the status quo in respect of the compound, its fences and walls, and the structures on Ps’ Land, particularly given the further points considered below.

Alleged prejudice to the plaintiffs

17.Ps argued that delay to their recovery of vacant possession would cause them prejudice in the form of (further) delay to the exercise of their rights as indigenous male villagers under the Small House Policy. They filed evidence that their applications for licenses to build small houses on Ps’ Land have for many years been delayed by their lack of vacant possession. Further, Ps referred to their age and P1’s medical condition(s), arguing that their small house rights would or may be lost should they pass away before recovering vacant possession. 

18.Though I consider it in the balance, I place limited weight on this factor, given the long period of time taken to progress this action. The assignments to Ps were in 1997, the proceedings were commenced in 2006, yet the Order 14A summonses were not heard until 2019[2]. On any view, Ps cannot be said to have progressed the matter with urgency. 

19.Ps further argued that the structures on Ps’ Land are unauthorised, which may prompt the Government to exercise a right of re-entry, to Ps’ detriment. D2 responded that the structures are long-standing, and tolerated under the Lands Departments’ relevant policy. I consider that Ps’ argument here is rather speculative, and does not take matters significantly further.

20.As a fall-back position, Ps argued that any stay of execution should be limited to only the order for demolition of structures, or to actual possession of Ps’ Land, but without prejudice to Ps’ rights to take or complete all or any procedures to apply for the necessary licenses or permits to erect their small houses on Ps’ Land and to complete all procedures up to but excluding actual possession (compare Star Play at paragraphs 4 and 14). D2 did not object, in principle, to a limitation of this nature, and I am minded to proceed in this way. 

Stay of other orders

21.D2 also sought a stay of execution of the other orders pronounced at paragraph 24 of the Decision on Relief and Costs, notably the assessment of damages by way of mesne profits, and the costs orders.

22.D2 argued that: (i) the assessment(s) would be a waste of time and costs in the event of a successful appeal; and (ii) neither Ps nor any of the defendants to counterclaim are known to be persons of means, such that any amounts paid would or may be unrecoverable following a successful appeal.

23.However, there is no evidence from D2 that any other parties lack financial means, and by reply submissions D2 relied on inference essentially from the fact that Ps are retired and the absence of evidence from Ps as to their means.

24.In my view these features, which would be present in many cases, are insufficient to discharge D2’s burden of establishing a good reason to deprive the other parties of the fruits of their success, pending appeal.

25.Accordingly, I decline to stay the execution of the other orders made.

Disposition

26.I will order that pending the final determination of D2’s appeal or further order, there be a stay of execution of the orders for demolition and of actual possession referred to at paragraph 24(2)(a) of the Decision on Relief and Costs.

27.As to the meaning of actual possession, I refer to paragraph 20 above.

28.I make an order nisi that the costs of the Stay Summons, including the hearing on 17 December 2019, be in the cause of D2’s appeal.

Written submissions by Ms Audrey Eu SC and Mr Wong Cho Lik, instructed by Cheung & Co, for the 1^st and 2^nd plaintiffs (by original action) and the 1^st and 2^nd defendants (by counterclaim)

Written submissions from Lui & Law, for the 2^nd defendant (by original action) and the plaintiff (by counterclaim)