Sherman Ngai Wing Lee v. Lee Hoi Wing Michael and Others

HCA 2905/2017

[2024] HKCFI 2552

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2905 OF 2017

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(By Original Action)

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(By Counterclaim)

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D E C I S I O N

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1.Introduction[1]

1.1This is Sherman’s application by his summons dated 15 March 2024 (“Summons”) for stay of execution of the judgment (“Judgment”) and order (“Order”) of DHCJ Roxanne Ismail SC (“Trial Judge”) dated 1 December 2023[2] pending his appeal to the Court of Appeal. On 1 December 2023, the Trial Judge handed down her Reasons for Judgment (“Reasons”).

1.2In these proceedings, Sherman seeks a declaration that the Settlement Agreement (dated 28 December 2012) between him and Father, the late Mr Lee Koon Wan, is binding on the estate of the Father. Father passed away in May 2015.

1.3Father has 6 sons, namely Sherman, Michael, Gordon, Stephen, Norman and David. Sherman is the Plaintiff (by original action). Michael and Gordon are the executors of Father’s estate and are, in that capacity, the 1^st Defendant (by original action). The other siblings are respectively the 2^nd to 4^th Defendants (by original action). Michael and Gordon are, in their personal capacities the Plaintiff (by counterclaim) and Sherman is the Defendant (by counterclaim). Michael, Gordon, Stephen, Norman and David are hereinafter collectively referred to as “Brothers”.

1.4As summarized by the Trial Judge (Reasons §§4-17), the disputes between the parties relate to the true ownership of the 2 Properties, namely the Lai Shing Flat[3] and the Bridge of Don House[4]. In gist:

(1)  The 2 Properties were at all material times registered in the name of Sherman;

(2)  In 2009, Father commenced the 2009 Action against Sherman claiming beneficial ownership of the 2 Properties;

(3)  On 24 July 2012, DHCJ Seagroatt handed down the Seagroatt Judgment, by which he found in favour of Father. In particular, by the Seagroatt Judgment:

(a)  It was declared that Sherman held the 2 Properties on trust for Father during his lifetime and thereafter for Sherman and the Brothers in equal shares;

(b)  Sherman was required to transfer the 2 Properties to Father;

(c)  Sherman was required to account to Father for rents and profits thereon;

(d)  Sherman was required to pay Father’s costs.

(4)  On 12 August 2012, following a hearing to address the final relief to be ordered, DHCJ Seagroatt delivered the Addendum to the Seagroatt Judgment. Essentially the orders made in respect of the 2 Properties were for delivery of the title deeds (or any necessary written authority to effect the transfer of deeds) to the Registrar of the High Court until further order; Father was to receive rent directly from the tenant and be responsible for all expenses; Sherman was to provide an account of rent, profits and/or monies received by him for the 2 Properties; Sherman was to return to Father all rent, profits and/or monies received by him for the 2 Properties, subject to deductions of proven expenses; in respect of the 2 Properties, some other proper person, namely the Official Solicitor if willing, be appointed trustee jointly with Sherman, but no other member of the family was to be appointed trustee without the court’s approval;

(5)  Sherman lodged an appeal on 12 September 2012. Father issued a Respondent’s Notice on 3 October 2012;

(6)  On 28 December 2012, Sherman and Father signed the Settlement Agreement setting out terms of agreement as to the entitlements in respect of the 2 Properties and the costs of the 2009 Action;

(7)  On 31 January 2013, Sherman and Father executed the Deed of Settlement prepared by Sherman’s solicitors setting out different terms of agreement as to entitlements in respect of the 2 Properties and the costs of the 2009 Action.

1.5At the trial of the current proceedings:

(1)  Sherman sought a declaration that the Settlement Agreement was enforceable, notwithstanding the Seagroatt Judgment, and not withstanding the subsequent Deed of Settlement;

(2)  The Brothers opposed the declaratory relief sought by Sherman on the following bases:

(a)  The Seagroatt Judgment was a judgment in rem binding on all the world as to the status of the 2 Properties;

(b)  Even if the Seagroatt Judgment was in personam, the Brothers were privy thereto and are bound by and entitled to rely on it;

(c)  The Brothers put Sherman to proof as to the Settlement Agreement;

(d)  The Settlement Agreement was unenforceable on the basis that Father could not have understood and agreed its terms, relying insofar as necessary on non est factum;

(e)  The Brothers put Sherman to proof as to the Deed of Settlement.

(3)  The Brothers counterclaimed against Sherman for an order compelling Sherman to assign and transfer a 1/6 interest in each of the 2 Properties to each of them and to account to them for rent and/or mesne profits in respect of the 2 Properties from the date of Father’s death.

1.6On 1 December 2023, the Trial Judge found against the Plaintiff, in that:

(1)  She found that neither the Settlement Agreement nor the Deed of Settlement was valid or enforceable (Reasons §50);

(2)  She (a) made an order compelling Sherman to assign and transfer 1/6 interest and title in the 2 Properties in favour of each of the Brothers[5], (b) ordered an inquiry as to the rights and liabilities between Sherman as trustee and Brothers as beneficiaries in respect of the 2 Properties[6] and (c) gave the parties liberty to apply for consequential directions (Reasons §130).

1.7Pursuant to Reasons §130 and the Order, on 30 January 2024, the Trial Judge gave consequential directions in the following terms (“Consequential Directions”):

(1)  Sherman to execute and deliver to Stephen within one month hereof a conveyance/transfer to the legal title of the Lai Shing Property with the title deeds, through his solicitors;

(2)  Sherman to execute and deliver to Stephen within one month hereof a conveyance/transfer to the legal title of the Bridge of Don Property together with the title deeds, and any written authority or instruction or other documents in order to effect the transfer of the said deeds, through his solicitors;

(3)  Sherman is to provide within 1 month an account of the rent, profits and/or monies received by him from the 2 Properties subject to deductions upon documentary proof in respect of all necessary payments made by him by way of management fees, utilities, and government rates and rents;

(4)  On that date Sherman is to pay (1) to Father’s estate the amounts relating to the period prior to 6 May 2015, plus interest at the judgment rate and (b) to the Brothers the amounts in respect of the period since 6 May 2015, plus interest at the judgment rate;

(5)  All parties are to agree the final account within 1 month thereafter.

1.8In the present application, Sherman is represented by Mr KM Chong, Michael and Gordon by Ms Prisca Cheung[7] (with Ms Sakinah Sat), Stephen, Norman and David act in person. Pursuant to the joint application by the parties, directions were given for the Summons to be disposed on the papers.

2.The Reasons

2.1The Trial Judge identified the issues for her determination at Reasons §§18 to 19 as follows.

2.2For Sherman to obtain a declaration that the Settlement Agreement is enforceable against the estate, he must establish that (1) the Seagroatt Judgment is not binding on the Defendants and (2) the Settlement Agreement is not superseded by the Deed of Settlement (termed as P’s necessary issues).

2.3For the Brothers to succeed, they must establish that (1) the Seagroatt Judgment is binding on the Brothers and (2) Father and Sherman could not validly enter the Settlement Agreement or the Deed of Settlement (termed as D’s necessary issues).

2.4In the Reasons:

(1)  The Trial Judge found that the Seagroatt Judgment with the Addendum is not a judgment in rem (Reasons §§22 to 33);

(2)  She, however, found that the Brothers are privy to the parties in the 2009 Action (Reasons §§34 to 43);

(3)  She noted that it was not disputed by Mr Chong on behalf of Sherman that, if Sherman and the Brothers are bound by the Seagroatt Judgment, whether as parties or privies, then it is not open to Father and Sherman to enter into an agreement to vary the effect of the Seagroatt Judgment (Reasons §47);

(4)  She found that, in any event, by virtue of the Seagroatt Judgment, Sherman and the Brothers had at all material times an indefeasible vested interest in the 2 Properties. It is therefore not possible for Father and Sherman alone to dispose of or destroy such interest without the consent of the Brothers (Reasons §§48 and 49);

(5)  Accordingly, she came to the view that neither the Settlement Agreement nor the Deed of Settlement is valid or enforceable (Reasons §50).

2.5It is pertinent to note that the matters stated in the preceding paragraph formed the Trial Judge’s “principal decision” (“Principal Decision”) (Reasons §§51 to 52). In the remainder of the Reasons, the Trial Judge then considered, if contrary to her primary findings that the Seagoratt Judgment was not binding on Sherman and the Brothers, the second of P’s necessary issues, namely whether the Settlement Agreement was binding upon the Deceased, in particular whether the Deed of Settlement has superseded the Settlement Agreement (“Secondary Decision”).

2.6In respect of the Secondary Decision, the issues advanced were: (1) by the Brothers, whether the Settlement Agreement or the Deed of Settlement was vitiated by non est factum and (2) by Sherman, whether Father intended to be bound by the Settlement Agreement or the Deed of Settlement (Reasons §54). As noted by Trial Judge, the issues were fact-sensitive (Reasons §55). At Reasons §§108 to 110 and 126, the Trial Judge decided against the Brother’s case on non est factum but found as a fact that in so far as it was open to Sherman and Father to make an agreement as to the beneficial ownership of the 2 Properties, the Deed of Settlement had superseded the Settlement Agreement.

3.The Notice of Appeal

3.1In the Notice of Appeal dated 20 December 2023, 9 grounds are advanced on the issue of liability[8]. The 9 grounds are grouped under two headings. Grounds 1 to 5 seek to challenge the Trial Judge’s finding that the Brothers are privy to the parties in the 2009 Action. Grounds 6 to 9 are directed against the Trial Judge’s findings that the Settlement Agreement is not binding upon Father.

4.The rival contentions and the applicable principles

4.1Mr Chong submits that Sherman has (1) strong appeal grounds and (2) even if the grounds of appeal are merely arguable, Sherman’s appeal will be rendered nugatory absent a stay because of the serious deleterious effect that enforcement of the Judgment would have on him. In relation to the latter, two matters are specifically relied on by Mr Chong:

(1)  It is said that costs will have to be incurred for the transfer to the 2 Properties. In particular, as regards the Bridge of Don House, the transfer of the title/interest entails the engagement of foreign lawyers and may take considerable time and may not be completed before the determination of the appeal;

(2)  The Brothers except for Stephen are residents abroad.

4.2The Brothers oppose the present application on the following broad grounds:

(1)  There is no arguable appeal;

(2)  The transfer of title and interest in the 2 Properties would not render a successful appeal nugatory;

(3)  The accounting and payment of money by Sherman to Father’s estate and Brothers can be carried out regardless, as the money can be repaid to Sherman if he succeeds in the appeal;

(4)  Michael and Gordon have offered an undertaking that they would not dispose of the interest and title in the 2 Properties and there is no basis for Sherman to allege the Brothers would dissipate the interest and title in the 2 Properties;

(5)  The disputes concerning the 2 Properties have lasted for years, and the Brothers have not been able to participate or received any rental income;

(6)  The Brothers have no knowledge as to Sherman’s management of the 2 Properties, or the whereabouts or use of the rental income of the 2 Properties collected by Sherman in the last 14 years;

(7)  The Brothers invite the court to consider Sherman’s application for stay not only in terms of the present proceedings but also on his conduct after the Seagroatt Judgment.

4.3The applicable principles are not in dispute: Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84 §§6 to 10. In summary:

(1)  Whether or not to grant a stay is within the discretion of the court. Unless the applicant can justify a stay of execution, one will not be ordered. The practice of the court is that justification can be demonstrated only if good reasons exist;

(2)  A good reason can exist in a variety of forms. It will be wrong to set out any exhaustive definition of what would constitute a good reason, but, commonly, reference is made to factors such as whether the absence (or existence) of a stay would render an appeal nugatory (thus bringing into 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;

(3)  In determining the question whether or not an appeal would be rendered nugatory, the court must first have regard to the nature of the order that is the subject matter of the appeal. If the order appealed against is a money judgment, the court will require evidence as to why the levying of execution will result in the appeal being rendered nugatory, such as, for example, an appreciable risk that the respondent to the appeal would not be able to repay in the event of a successful appeal. Sometimes, the nature of the order will by itself almost be determinative of the question. Where the relevant order is, for example, an injunction (and particularly so if it is a mandatory injunction), it may well be that, without a stay, an appeal would be rendered nugatory in the event of a successful appeal;

(4)  That said, whatever the nature of the order or judgment appealed from, the court will still require evidence as to why an appeal will be rendered nugatory in the event of a stay not being granted. The requisite quality of the evidence will, of course, depend on the nature of the order or judgment appealed against;

(5)  Where it is said that the levying of execution would result in financial ruin or serious financial consequences for the appellant, the court will require good evidence to support this contention, such as the production of accounts or other documents to justify the assertion. A bare assertion is unlikely to meet with much sympathy where more substantial evidence is available;

(6)  An appeal being rendered nugatory does not mean in all cases that without a stay, the appellant faces financial ruin or the loss of all his property. Demonstrating that the failure to grant a stay would have a serious deleterious effect is enough;

(7)  While it is impractical and even undesirable for the court in dealing with an application for a stay of execution to go deeply into the merits and strengths of an appeal, it must however form a preliminary view of these aspects;

(8)  The existence of merely an arguable appeal cannot by itself amount to sufficient reason to justify a stay. The existence of an arguable appeal (that is, one with reasonable prospects of success) is the minimum requirement before a court would even consider granting a stay. In other words, 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;

(9)  Conversely, however, 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;

(10)  Often, the court will be faced with simply the existence of an arguable appeal. Here, it becomes necessary for the appellant to provide additional reasons as to why a stay is justified. The demonstration of an appeal being rendered nugatory is one example, albeit a common one. Where it is demonstrated that an appeal would be rendered nugatory if a stay was not granted, the court may require no more than the existence of an arguable appeal. Correspondingly, where it cannot be shown that an appeal would be rendered nugatory if a stay were not granted, the court will require, in the absence of any other factors, the appellant to demonstrate strong grounds of appeal or a strong likelihood of success;

(11)  It is important to stress that the court must not at any stage forget the position of the successful party. It is always relevant to consider the prejudice that would be caused to the successful party (the respondent in the appeal) in the event a stay is granted and if necessary, to impose conditions so as to minimize the prejudice caused to him. A fortiori, the court must consider any contention that the appeal would be rendered nugatory to him (in the event the appeal is dismissed) should a stay of execution be imposed;

(12)  Ultimately, 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.

5.Analysis

5.1I proceed to analyze the present application by reference to (1) merits of Sherman’s appeal and (2) whether the appeal would be rendered nugatory absent a stay.

(i)  Merits of Sherman’s appeal

5.2In my view, the focus should be on Grounds 1 to 5, namely those directed at the learned Deputy Judge’s Principal Decision. Unless Sherman can demonstrate that Grounds 1 to 5 are viable, no assistance may be derived from the other grounds which are directed at the Secondary Decision.

5.3As regards Grounds 1 to 5, in Mr Chong’s written materials, the only submission made is that an interest in the Seagroatt Judgment per se does not confer privity, relying on Zhang Rui Kang & Ors v Tunghsu Group Co Ltd [2023] HKCFI 1866 §§57 to 59.

5.4As set out at Zhang Rui Kang §59(1):

“In determining whether there is a sufficient degree of identification between Party A (a party to previous proceedings) and [Party] B (a new party), it would be necessary to examine:

(a) the extent to which Party B had an interest in the subject matter of the previous action;

(b) the extent to which Party B can be said to be, in reality, the party to the original proceedings by reason of his relationship with that party; and

(c) against this background to ask whether it is just that the new party should be bound by the outcome of the previous litigation.”

5.5As pointed out by Ms Cheung, Mr Chong has not made any attempt to engage with the Trial Judge’s detailed reasons. At Reasons §§37 to 42, she said as follows:

“[37] A person will be bound by a judgment in personam notwithstanding he was not a party to the action if he was in privity with the parties…

[38] In Gleeson v. J Wippell & Co Ltd [1977] 1 WLR 510 at p.515H, Megarry VC stated:

(1) “[H]aving due regard to the subject matter of the dispute, there must be a sufficient degree of identification between the two [persons said to be privies] to make it just to hold that the decision to which one was party should be binding in proceedings to which the other is party”.

(2) In relation to trust property, he thought there will normally be a sufficient privity between the trustees and their beneficiaries to make a decision that is binding on the trustees also binding on the beneficiaries, and vice versa.

[39] Stock JA reviewed the authorities on privies in China North, at paras.77-81. He noted that the question of privity of interest is difficult territory, and stated (at para. 81):-

“The required commonality is a direct interest in the subject matter of the litigation, a parallel or corresponding interest in that subject matter and not simply a financial interest in the result of the action: Genesee Enterprises Ltd v Abou-Rached [84 BCLR (3^rd) 277], so that:

‘Privies include any person who succeeds to the rights or liabilities of the party upon death or insolvency, or who is otherwise identified in estate or interest. It is essential the party to be estopped by privity must have some kind of interest, legal or beneficial, in the previous litigation or its subject matter. Privity was described by the US Supreme Court as a mutual or successive relationship to the same right of property, although this cannot be exhaustive.’”

[40] In The Secretary of State for Business, Innovation & Skills v. Nadham Singh Pottiwal [2012] EWHC 3723 (Ch), para.20, Briggs J stated:-

“…the question is whether the degree of identification of interest makes it just for the one to be bound by the outcome of proceedings about that issue involving the other, and bound regardless which way that outcome goes. The effect of identification of two parties as privies is automatic, and gives rise to an estoppel which prevents the dispute or the issue being revisited, regardless of the circumstances of the first trial, and of the outcome. It is precisely because those consequences are automatic and potentially far-reaching that the law should in my view be slow to recognise privity of interest between different persons. ”

[41] The Seagroatt Judgment declared the 2 Properties were held by Sherman on trust for the Father during his lifetime, and, upon the Father’s death, for all sons in equal shares. Consequently, whilst the Father was alive:

(1) both the Father and the 6 sons had a vested interest in the 2 Properties although the Father had an immediate right of enjoyment;

(2) the sons’ beneficial interests were a present right to future enjoyment, and not a contingent interest.

See Lewin on Trusts (20^th ed.) para 1-048.

[42] I agree with Mr Kwong that the 5 sons other than Sherman are privy to the parties in the 2009 Action. That is, in my opinion, because:

(1) They are clearly identified as beneficiaries of the trust held by Sherman, a party, and his interest as trustee is the corollary of their interest as beneficiaries. Where one cannot exist without the other, it is just to hold that a decision binding on Sherman must be binding on the beneficiaries;

(2) The Seagroatt Judgment found that they have a direct interest in the 2 Properties, which are the subject-matter of the 2009 Action; and/or

(3) All 6 sons will automatically acquire an immediate right of possession of the 2 Properties interest upon the Father’s death pursuant to the terms of the trust as confirmed by the Seagroatt Judgment.” (emphasis added)

5.6Although the Trial Judge did not refer or was not referred to Zhang Rui Kang, she was clearly aware of the principles set out at Zhang Rui Kang §59(1), as is plain from Reasons §§38-40. As pointed out by Ms Cheung, unlike the present case, Zhang Rui Kang is not a trustee case. No attempt has been made by Mr Chong to address the Trial Judge’s reasoning that privity arose by virtue of Sherman being trustee for all 6 sons upon the demise of the Deceased.

5.7On the basis of submissions advanced by Mr Chong, my preliminary view is that Grounds 1 to 5 do not amount to an arguable appeal. Therefore, the present application should be dismissed on this ground alone.

5.8For completeness, I deal briefly with the grounds directed at the Secondary Decision. It is plain that Grounds 6, 7 and 9 are appeals against the Trial Judge’s factual findings. My preliminary view is that they do not amount to strong grounds.

5.9Ground 8 is directed at the Trial Judge’s finding that the Deed of Settlement had superseded the Settlement Agreement. Ground 8 contends that the Trial Judge had erred in allowing the Brothers to run such a case, on the basis that their pleaded case was that the Deed of Settlement was a sham and there was no alternative defence that it was a valid document.

5.10The Trial Judge had rejected Sherman’s pleading objection. At Reasons §127, it is stated:

“Mr Chong sought to argue that it was not open to D1 to cross-examine Sherman on the basis that, or otherwise submit that, if any agreement was operative between Sherman and the Father, it was the Deed of Settlement, because that positive case had not been pleaded. As indicated during the trial when allowing the questioning, all of the Defendants pleaded that they put Sherman to proof as to the alleged Settlement Agreement and Deed of Settlement as they had no direct knowledge. It seems to me entirely proper that they should test Sherman’s evidence as to the validity of the Settlement Agreement, and make submissions thereafter on the basis of the evidence.”

5.11For the reasons set out at Reasons §§111 to 126, the Trial Judge had rejected Sherman’s pleaded case and evidence that the Deed of Settlement was not intended to create legal relations on the bases of her dim views on Sherman’s credibility, the contemporaneous documents and inherent probabilities (Reasons §114). My preliminary view is that Ground 8 is not an arguable appeal ground.

(ii)   Whether appeal rendered nugatory

5.12Were I wrong in my preliminary view that no arguable appeal exists in relation to (1) the Primary Decision and (2) the Trial Judge’s factual finding that the Deed of Settlement had superseded the Settlement Agreement (and therefore the present application falls to be dismissed on the foregoing bases), I proceed to deal with Mr Chong’s arguments that the appeal would be rendered nugatory absent a stay.

5.13The Judgment comprises of 2 separate parts, namely (1) the assignment and transfer of the 5/6 interest and title in the 2 Properties to the Brothers and (2) an account and payment of sums due on the accounting exercise.

5.14In relation to (1) above, the primary point taken by Mr Chong is the issue of wasted time, costs and effort incurred in the engagement of a firm of solicitors in Scotland to advise and handle the conveyance of the Bridge of Don House and, in the event that Sherman succeeds in his appeal, the reconveyance.

5.15As pointed out by Ms Cheung, there is no absolute rule or principle that where the relevant order concerns the possession or transfer of property, the appeal would necessarily be rendered nugatory absent a stay. The burden remains on the applicant to establish and put forward evidence that the appeal would be rendered nugatory. As I understand the position, the 2 Properties are used to generate rental income. There is therefore no suggestion of by Sherman of any hardship other than financial ones, namely the costs associated with the conveyance and the potential reconveyance should Sherman succeed in his appeal.

5.16I do not regard the factors relied on by Mr Chong amount to good reasons. As pointed out at Indian Overseas Bank v Seabulk Systems Inc [2023] 4 HKLRD 125 §29, compliance with a judgment is a matter of legal obligation, not a matter of choice or preference.

5.17In relation to (2) set out at §5.13 above, the primary point taken by Mr Chong is that the Brothers (except Stephen) are residents abroad. It is said that, given the distrust between the parties, it may be difficult for Sherman to recover payment made to them should Sherman be successful on appeal, relying on, for example, Shanghai Ornate Candle Art Co Ltd v Transbest Holdings Limited t/a ACME Company, HCA 1605 of 1999, 5 May 1999.

5.18The matters stated in the preceding paragraph can only have a bearing on Consequential Directions §4 and does not affect Sherman’s obligation to provide an account.

5.19Even in respect of Sherman’s payment obligation, it is stated in John Joseph Mcgee v Nold (HK) Ltd & Ors [2023] HKCFI 409:

“[13] Second, whilst it may be said that there is, in any matter involving a foreign plaintiff, a general risk that the appeal might be rendered nugatory owing to the fact that the Plaintiff is resident outside the jurisdiction, considering matters in the round, I do not consider that this Plaintiff in this particular case should be deprived of the fruits of the judgment. It is suggested that it would be unfair for the Summonsed Defendants to have to go to the United States (where the Plaintiff is resident) to seek a return of the judgment sum paid if they are successful in their appeal. This submission, however, presumes that the appeal will be successful, which necessitates the Court’s considering the merits thereof. It also assumes that the Plaintiff will not abide by the procedures of the Hong Kong Court when there is no specific evidence to suggest that he is prone to such conduct.

[14] Every given case must be considered on its own circumstances. Given that I consider the merits of the appeal to be weak, and taking all of the above factors into consideration, I do not consider this to be an appropriate case in which to grant a stay. I would further mention that I do not agree with the general proposition that once there is a foreign plaintiff involved, this would necessarily mean that a stay ought generally to be ordered…” (emphasis added)

5.20In my view, the evidence put forward by Sherman falls far short of showing that the Brothers who are resident abroad will not abide by the procedures of the Hong Kong court.

5.21I am therefore not persuaded that the appeal would be rendered nugatory absent a stay.

5.22Given my above conclusions, it is not necessary for me to deal with the further reasons advanced by the Brothers set out at §§4.2(5) to (7) above to oppose the present application.

6.Conclusion

6.1For the above reasons, in the exercise of my discretion, I dismiss the Summons. I also make a costs order nisi that Sherman is to pay to the Defendants (by original action) and the Plaintiff (by counterclaim) the costs of the Summons. Such costs are to be summarily assessed on the papers. The Brothers are to lodge and serve their statements of costs within 21 days hereof (a lengthier period is given to accommodate the unrepresented Brothers who reside abroad). Sherman is to provide his comments on the Statements of Costs within 7 days thereafter.

Mr K.M. Chong, instructed by Au-Yeung, Chan & Ho, Solicitors, for the Plaintiff (by original action) and the Defendant (by counterclaim)

Ms Prisca Cheung and Ms Sakinah Sat, instructed by L & L Lawyers, for the 1^st Defendant (by original action) and the Plaintiff (by counterclaim)

Lee Hoi Yin Stephen, acting in person, the 2^nd Defendant (by original action)

Lee Hoi Wan Norman, acting in person, the 3^rd Defendant (by original action)

Lee Hoi Yeung David, acting in person, the 4^th Defendant (by original action)