To Kan Chi and Another v. To Kin Wah and Others

HCMP 509/2002

[2025] HKCFI 4132

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 509 OF 2002

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BETWEEN

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DECISION

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A. Introduction

1.On 29 May 2025, I allowed the Plaintiffs’ application pursuant to the summons filed on 29 April 2024 seeking payment out in respect of the expenses in relation to the operation of T’ong Tsing Wan Kun (the “Tong”).

2.The procedural history is set out in paragraphs 2 to 9 of my decision (hereinafter the “Decision”: see [2025] HKCFI 4054) and will not be repeated.

3.For present purposes, it suffices to say that as acknowledged by the Defendants (see paragraphs 14 and 15 of Affirmation of To Siu Lam[1] dated 4 November 2024), the arrangement for release of funds should be treated as an interim measure to “hold the ring” before the disputes amongst the parties are resolved and thus only expenses/payments that are strictly necessary should be approved.

4.On 26 June 2025, the Defendants took out a notice of appeal under CACV 463/2025.

5.On 10 July 2025, the Defendants further took out a summons seeking a stay of execution of my order dated 29 May 2025 pending the appeal under CACV 463/2025.

B. Legal Principles

6.The legal principles governing an application for a stay of execution pending appeal were set out in Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84 at paras 6 to 10 (per Ma J, as Ma CJ then was) and summarized by Cheung JA in Fung Shing Chung v Choi King Hung [2024] HKCA 1021 at para 20 as follows:-

“(1) The applicant is required to demonstrate a ‘good reason’ for a stay of execution.

(2) Generally speaking, the existence of merely an arguable appeal cannot by itself amount to a sufficient reason to justify a stay. It is the minimum requirement before a court would even begin to consider granting a stay.

(3) In other words, if the Court is not convinced that there exist arguable grounds of appeal, no stay will be granted however exceptional the circumstances may otherwise be justifying a stay of execution.

(4) On the other hand, the existence of a strong appeal or a strong likelihood of success will usually by itself enable a stay to be granted because this would constitute a good reason for a stay.

(5) In most cases, where the Court is faced with simply the existence of an arguable appeal, it becomes necessary for the applicant to provide additional reasons as to why a stay is justified.

(6) Commonly, this is done by demonstrating that without a stay the appeal would be rendered nugatory, for example, because of an appreciable risk that the respondent to the appeal would not be able to repay in the event of a successful appeal against a money judgment, or because the failure to grant a stay would have a serious deleterious effect on the applicant.

(7) In considering an application for a stay pending appeal, it would be impractical and even undesirable for the Court to go deeply into the merits or strengths of the appeal, although the Court must still form a preliminary view of these aspects, see: Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84 per Ma J (as he then was) at [9]-[10].

(8) While the existence of a strong appeal would tend to lead the Court to exercise its discretion in favour of granting a stay, the threshold is a high one. The Court has held that for there to be a ‘strong appeal’ such as would justify the grant of a stay without more, the situation must be one which would lead the Court to conclude that something has grievously gone wrong with the process of law in the Court below, or that the appellant is ‘almost bound to succeed’. Absent such a case, something more needs to be demonstrated: John Joseph Mc Gee v. Nold (HK) Ltd [2024] HKCA 354 per Barma JA at [30]”

C. No Arguable Appeal

C1. Undisputed Facts

7.The Tong used to have 3 managers, namely To Kan Chi and To Kam Chau (who are the Plaintiffs) as well as To Fuk Tim.

8.To Fuk Tim passed away in October 2009.

9.To Kan Chi passed away in January 2025.

10.Thus, as of the time when the Plaintiffs’ application was heard by this court, the only surviving manager of the Tong was To Kam Chau.

C2. The Defendants’ Contention

11.Relying on Mak Lai Chuen suing as sole manager of Mak Tsok Sui Tso v Lau Kar Yau (DCCJ 2609/2006 and DCCJ 2610/2006, 29August 2008) at paras 20 to 24, the Defendants contended that the powers of the Tong’s managers had to be exercised jointly. Thus, To Kam Chau, as the sole surviving manager, was incapable of prosecuting the application for payment under the summons dated 29 April 2024.

12.For the reasons set out in paragraphs 11 to 23 of my Decision, I did not accept the Defendants’ contention.

C3. Analysis

13.In my view, the Defendants’ appeal is wholly unmeritorious and unarguable.

14.There is a line of authorities suggesting that the question of whether a surviving manager has authority to represent the Tong/Tso/Wai/Heung is a matter of internal management, and the answer to the question depends on the applicable Chinese law and custom. In Man Tai Sang the managers of Man Un (or Yun) Uk Wai v Man Luk Sing Anor [2023] 3 HKLRD 869 at para 71, Recorder Stewart Wong SC, referring to Hip Hing Timber Co Ltd v Tang Man Kit (2004) 7 HKCFAR 212 at para 20 (per Lord Millet NPJ) and Mak Lai Chuen (supra), stated:-

“It is interesting that Professor Palmer considers the question of the authority of a surviving manager of a Wai to be not a matter of Chinese law and custom. I would have thought that it is myself, and so did, for example, HHJ Mimmie Chan (as she then was) in Mak Lai Chuen v Lau Kar Yau. As stated by Lord Millett NPJ in Hip Hing Timber Co Ltd v Tang Man Kit, the authority of a person to represent a heung (and it must be the same for a wai) is a matter of internal management, and presumably that ought to be a matter of Chinese law and custom.”

15.As Recorder Stewart Wong SC pointed out in Man Tai Sang (supra) at paras 72 to 75, the issue of authority is a question of fact. The learned Recorder then went on to distinguish Mak Lai Chuen on the basis that in that case, there was expert evidence showing that all the managers were initially appointed jointly and thus the surviving manager could not act alone. On the facts and evidence, the learned Recorder rejected the suggestion that the surviving manager, whose authority was not challenged on previous occasions, could not act alone.

16.In the premises, it is clear to me that Mak Lai Chuen is confined to its own facts and that it does not support a general proposition that a sole surviving manager is always incapable of acting alone. The answer to the question simply depends on the applicable Chinese law and custom. As Her Honour Judge Mimmie Chan (as she then was) pointed out in Mak Lai Chuen (supra) at para 21:-

“Section 15 of the Ordinance does not make express provision for the matter in issue in this case, and in view of section 13 of the Ordinance, the court has power to and should recognize and enforce any Chinese custom or customary right affecting land in the New Territories.”

17.In the present case, the Defendants have not adduced a shred of expert evidence on the Chinese law and custom that are applicable to the Tong. There is not a shred of evidence showing that the internal rules and/or custom are such that the decisions of the Tong must be made by all the managers jointly and collectively and that no decision could be made once one of the managers passes away. There is also no evidence showing that the 3 managers were appointed jointly, such that if one of them passes away, the remaining managers are not capable of making any decision.

18.In fact, the contention pursued by the Defendants is flatly contradicted by their own stance all along. As pointed out in paragraph 6 of my Decision, on 29 January 2012, 16 July 2014, 20 July 2016, 10 October 2018, and 23 July 2020, To J allowed the Plaintiffs’ applications for defraying the general and specific expenses in relation to the operation of the Tong. It is important to note that at the time when these applications were made and disposed of, To Fuk Tim had already passed away and the surviving managers of the Tong at the times were To Kan Chi and To Kam Chau. At the hearing on 2 September 2025, Mr John McDonnell KC (for the Defendants) fairly accepted that on all these previous occasions, the Defendants did not take issue as to whether To Kan Chi and To Kam Chau, being the surviving managers of the Tong, had authority to act for the Tong[2].

19.Had there been a custom and/or internal rule that the powers of the Tong might only be exercised by all 3 managers jointly and collectively and that the surviving manager(s) was/were incapable of exercising the Tong’s powers, the Defendants would have voiced out on the previous occasions from 2012 to 2020. For reasons best known to themselves, the Defendants did not do so.

20.Regrettably, I have come to the view the contention that the Defendants pursue now is an afterthought, and the same is conjured up for obstructing the Tong from continuing its operation and defraying its legitimate expenses.

21.Based on the objective circumstances and in the absence of any expert evidence on the applicable custom and/or internal rules, there is simply no room for the Defendants to contend that To Kam Chau had no authority to act.

22.For the above reasons, I am of the view that the Defendants’ appeal is unarguable. On this basis alone, the Defendants’ application for a stay of execution pending appeal should be dismissed[3].

D. Balance of Justice

23.Even if the Defendants’ appeal were arguable (which is not the case), I am still not minded to stay the execution of my order dated 29 May 2025. There is no question that the Tong’s operation will have to continue. As elaborated in paragraphs 30 to 89 of my Decision, the Tong’s operational expenses have been substantial, and some of these expenses (which concerned services and works rendered to the Tong) have been overdue for a long period of time. If a stay of execution were granted, the financial hardship faced by the Tong would be further exacerbated. In my view, there is a pressing need to settle the overdue payments as soon as possible, and the operation of the Tong should not be obstructed.

E. Conclusion

24.For all the above reasons, I dismiss the Defendants’ application for a stay of execution pending appeal under the summons dated 10 July 2025.

25.Costs should follow the event.

26.I order the Defendants to pay the Plaintiffs’ costs in respect of the summons dated 10 July 2025 to be taxed if not agreed (with certificate for 1 counsel).

27.I thank Mr John McDonnell KC, Mr Kenneth CL Chan and Ms Margaret KM Chan for their helpful assistance.

Mr. Kenneth C.L. Chan, and Ms. Margaret K.M. Chan, inst’d by M/s. W K TO & CO SOLICITORS for the Plaintiff

Mr. John McDonnell KC, inst’d by M/s. Lui & Law for the 1^st to 5^th Defendants