Yu Yining v. Hmvod Ltd

HCA 1347/2021

[2025] HKCFI 2437

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1347 OF 2021

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BETWEEN

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J U D G M E N T

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Introduction

1.On 28 January 2025, I handed down a judgment (“Judgment”)[1] in which I allowed P’s claim against D and granted a declaration, a mandatory injunction and damages against D.[2]  I also awarded indemnity costs to P.[3]  By a notice of appeal filed and served on 25 February 2025 (“the Notice of Appeal”), D lodged an appeal against the Judgment.  By a summons filed on 5 March 2025 (“the Stay Summons”), D seeks a stay of execution pending the determination of the appeal.[4]  In the event that the stay application is refused by this Court, D also seeks an interim stay for 28 days pending its renewed application for a stay to the Court of Appeal (“the Interim Stay Application”).

2.I have directed that the matter be determined on paper without an oral hearing.  This is my decision on the matter.  For ease of reference, the abbreviations used in the Judgment are adopted herein.

Discussion

3.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.  If there is no arguable appeal, no stay would be granted, however exceptional the circumstances may be otherwise justifying a stay of execution.[5]

4.D has put forward 5 grounds of appeal in the Notice of Appeal.  For the purpose of the Stay Summons, D is only relying upon Grounds 1, 2, 4 and 5.  These grounds as summarized in D’s Sub are as follows:[6]

(1)  Ground 1 – This Court erred in making fundamental errors about the involvement of BAL in both parties’ pleaded case, and the role of BAL based on the D’s pleaded case.

(2)  Ground 2 – This Court erred in making inferences without any factual basis or foundation that D had used the incident of BAL’s report of loss of the Share Certificate as an excuse to prevent P from exercising her right under the Deed.

(3)  Ground 4 – This Court erred in assessing the damages.

(4)  Ground 5 – This Court erred in awarding indemnity costs against D.

With respect, I am of the view that there is no merit in these grounds.

5.Ground 1

(1)  D submits that this Court failed to take into account the fact that P took no action against BAL.  D argues that since BAL is a Hong Kong company, P or her solicitors could have easily conducted a company search to obtain BAL’s information.

(2)  I am of the view that there is nothing in this ground.  In §§10 and 11 of the Judgment, I have summarized D’s pleaded case.  There is no criticism that I have wrongly summarized D’s case as pleaded.  It is clear that there is no assertion in the Amended Defence that since P has not taken any action against BAL, D would not or should not be liable to P.

(3)  Bearing in mind that issues are defined by the pleadings[7], there is simply no basis in support of D’s arguments under this ground.

6.Ground 2

(1)  D submits that this Court erred in making inferences without any factual basis or foundation that D had used the incident of BAL’s report of loss of the Share Certificate as an excuse to prevent P from exercising her right under the Deed.  D further submits that P has wrongly stated in her oral evidence that BAL was an “overseas company” and that she could not contact BAL, and this Court erred in regarding P as a “straightforward and forthcoming witness” notwithstanding these problems in her evidence.

(2)  The relevant part of P’s evidence under cross-examination as shown in the transcript is as follows:

“問：即係9月2號嗰陣時，妳係咪第一次知道呢間公司BAL掛失咗妳嘅股票？

答：我不記得具體日期，因為這是--這個公司，我完全不認識，而且不懂為甚麼會出現這樣的一個事情。

問：咁你有冇嘗試同嗰個BAL公司去聯絡呀？

答：我不認識他，我怎麼會跟他聯絡，而且我沒有收到任何證券公司和我直接聯繫的一個--這個程序，我都--我怎麼聯繫他呢？

問：去一...

答：他沒有聯繫我，他聯--他沒有給我發信、沒有給我打電話，他就掛失了我自己個人的東西，我應該做的是，當時是想報警，然後委託律師去查這間公司不在香港，對吧？

問：公司就係香港公司嚟嘅，地址都係喺香港嘅，我睇睇。” (underline added)

(3)  During cross-examination, D’s counsel directed P’s mind to 2 September 2021. On that date, BNS provided a copy of BAL’s Letter to D to P’s solicitors, ie C&C.[8] P said that at that time (ie 2 September 2021), she wanted to report the matter to the police, and then asked her solicitors to check whether that company, ie BAL, was in Hong Kong. Understanding P’s evidence properly and in context, P did not say that BAL was an “overseas company”.

(4)  It would not be fair to say that this Court made adverse inferences against D without any factual basis or foundation. The adverse inference made against D, as well as the foundation of the inference, have been set out in §30 of the Judgment. D has not submitted in what way this Court erred in the analysis as set out in §30 of the Judgment.

7.Ground 4

(1)  D submits that this Court erred in adopting an over simplistic and unrealistic measurement of damages (based on the diminution of value of the Subject Shares from 23 July 2021 to 22 January 2025), which failed to take into account the market reality (that P would not have been able to fetch such share price had she tried to sell all of them at one go on 23 July 2021).  Further, the assessment is unsupported by any evidence, including expert evidence.  The burden of proving damages is on P and she has failed to come up to proof.

(2)  As submitted by P, there is nothing in this ground.  As stated in §34 of the Judgment, all the trial counsel have agreed that the diminution of the value of the Subject Shares from 23 July 2021 to 22 January 2025 would be HK$11,456,336.  There is nothing in this ground.

8.Ground 5

(1)  D submits that this Court erred in awarding indemnity costs against D, for this case is merely a case in which the court prefers one party’s evidence over the other.  If D was running a defence doomed to fail, P should have taken O.14 application to obtain summary judgment at the very beginning.  Further, should P have taken actions against BAL to obtain a declaration that she was at all times the owner of the Subject Shares, the matter should have ended long time ago. The fact that P failed to take out O.14 application or to take legal action against BAL were not the fault of D and this Court should not impose costs order against D on indemnity basis.

(2)  As said in §11 of the Judgment, D in fact did not put forward a positive case to contradict P’s case.  D was merely requiring P to prove her case.  The inference against D as set out in §30 of the Judgment is an irresistible inference, based upon indisputable facts and common sense.  In the circumstances, I have taken the view that D’s case in these proceedings is a case which is doomed to fail, and Defendant knows or ought to know this. Accordingly, indemnity costs are justified. 

(3)  Whether there is any merit in a defendant’s case depends upon the nature of the case and the evidence in support of the case, not whether the plaintiff has made an application for summary judgment under O.14.  In this case, by reasons as stated in the above, I am of the view that D has indeed run a case which is doomed to fail in the trial.

(4)  As to the arguments concerning BAL, I have dealt with the same in §5 above.

(5)  There is no merit in this ground.

9.In my judgment, none of the grounds put forward by D in support of the Stay Summons is arguable.  As said in the above, the existence of an arguable appeal is the minimum requirement before a court would even consider granting a stay.  Since D has failed to satisfy this minimum requirement, the Stay Summons must be dismissed.  The Interim Stay Application is also dismissed.

Disposition

10.I dismiss the Stay Summons and the Interim Stay Application.

11.Costs should follow the event.  I order that costs of the Stay Summons and the Interim Stay Application be paid by D to P forthwith, and those costs be summarily assessed.  Having considered P’s bill of costs and D’s list of objections, I am in agreement with the objections raised by D.  Costs are summarily assessed at HK$25,084.

12.I thank the parties’ respective legal representatives for the assistance provided to the Court.

Ms Winky Wong, instructed by Yick & Chan, for the Plaintiff  

David Fenn & Co., for the Defendant