Jadespring Ltd (As Trustee and/or Agent for and on behalf of Dah Sing Bank) v. Rise Top Asset Management Ltd and Another

HCA 2039/2023
HCA 2040/2023
[2025] HKCFI 4498

(Heard together)

HCA 2039/2023

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2039 OF 2023

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AND

HCA 2040/2023

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2040 OF 2023

_______________________

_______________________

(Heard together)

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D E C I S I O N

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Introduction

1.In a Decision dated 30 May 2025 (“the Decision”), this Court affirmed the summary judgment entered by a Master against the Defendants (“Ds”) in relation to part of the claims by the Plaintiff (“P”) in these Actions, and allowed P’s appeals to set aside an order imposed by the Master for stay of execution of the summary judgment. On 20 June 2025, Ds filed two Notices of Appeal in CACV Nos 425 & 426 of 2025 to appeal against the Decision (“the Appeals”). Pending the Appeals, on 15 August 2025, Ds filed applications with this Court to apply for stay of execution of the Decision, supported by affirmation evidence. P opposed the applications and they were heard by this Court on 17 September 2025 with its decision reserved to be handed down. This is the decision on the issue of stay of execution pending the Appeals.

Grounds of Appeal

2.Ds have raised two grounds in their Appeals and in gist, they boil down to the following propositions:

(1)  This Court erred in holding that pursuant to the Rental Assignment, P had the authority to institute proceedings to sue Ds for the rent arrears without the prior written consent of the Bank (“Ground 1”);

(2)  As leave was granted to P to amend the Statement of Claim to plead its agency capacity, this Court erred in:

(1)  not requiring P to comply with the requirements under Order 14 rule 2(1) and (3) of the Rules of the High Court (“Ground 2(1)”); and/or

(2)  not granting an adjournment of the appeal hearing for Ds to prepare their evidence in opposition; and wrongfully assuming that any consequential amendments by Ds of their Defence could not “affect in any way the decision” of the Court (“Ground 2(2)”).

Applicable legal principles governing the grant of stay of execution

3.There is no dispute between the parties on the applicable legal principles governing the grant of stay of execution pending appeal as they are well set out by the Court of Appeal in Fung Shing Chung v Choi King Hung [2024] HKCA 1021 at §20:

“20. The principles governing an application for a stay of execution of a judgment pending appeal are well established and are not disputed by the parties :

(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…

(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…” (Emphasis added)

4.In light of the above legal principles, it is incumbent upon Ds to show that their appeal grounds are so strong that there is a high likelihood of success; in the alternative, that their appeal grounds are at least arguable with additional reasons to justify a stay.

Discussion

5.I will not delve into the merits of Ds’ two appeal grounds but will express my preliminary view that they are unmeritorious and not reasonably arguable. I give my brief reasons as follows.

Ground 1

6.Ds’ submissions on Ground 1 appear to this Court to be a regurgitation of their previous arguments which were found to be “untenable” and thus dismissed by this Court in the Decision (at §26). I will not repeat all the matters that led to my dismissal of Ds’ submissions but will quote only part of my reasons (at §24) as follows:

“Even though P had entered into the Rental Assignment with the Bank, there is a covenant in the Rental Assignment, namely clause 5.1(b)(3), which expressly provides that P ‘shall promptly and diligently … institute and maintain all such proceedings as may be necessary or expedient to preserve and protect the interests of the Assignor [i.e. P] and the Bank in the Lease [i.e. the TAs]’. I observe that this covenant is drafted in wide terms and in my view, it clearly envisages and indeed authorizes P to institute proceedings to sue for rent arrears to protect not only the interests of the Bank but also that of the ‘Assignor’ (i.e. P) in the ‘Lease’. What else would be the most obvious interests of the Bank or P to protect in a ‘Lease’ if not the rent arrears?”

7.It is also significant that Clause 5.1(b)(3) does not speak of any requirement of prior written consent of the Bank. When another provision (namely Clause 5.2(ii)) expressly provides for the requirement of prior written consent, that supports the construction that no such consent is required for P to institute proceedings under Clause 5.1(b)(3).

Ground 2(1)

8.Ds’ complaint is that P failed to comply with the requirements under Order 14 rule 2(1) and (3) of the Rules of the High Court because no fresh affidavit/affirmation was filed to verify the Amended Statement of Claim. In this regard, I agree with the submission by P’s counsel, Ms Astina Au, that there is no requirement that a fresh affidavit/affirmation must be filed to satisfy Order 14 rule 2(1) and (3) and Ds’ complaint is refuted by the following passage from Hong Kong Civil Procedure 2025 at §14/1/6:

“If on close analysis the original affidavit is found to depose to all facts and matters necessary to prove the case pleaded, it may be allowed to stand; thus in Roberts v Plant [1895] 1 QB 597, failure to swear to service of notice of dishonour, an allegation introduced by amendment, was held unnecessary as in the supporting affidavit it had been stated that not only had indebtedness on the relevant cheque been admitted by the defendant but that he had offered to pay by instalments.” (Emphasis added)

9.The amendment made by P was limited to pleading the agent or trustee capacity in which the Actions were brought and the relevant “fact” or “matter” necessary to prove P’s representative capacity was already deposed to or included in P’s original affirmation evidence: see Poon 1st at §36 (HCA 2039); Poon 1st at §41 (HCA 2040) and Exhibit “PKYEK-10”. In particular, that affirmation evidence verified the “facts on which the claim, or the part of a claim, to which the application relates is based” and contained a statement of the “deponent’s belief that there is no defence to the claim or that part”.

10.As Ms Au rightly submitted, concurrent applications for summary judgment and amendment of the Statement of Claim (including an amendment brought only at the level of an appeal before a Judge in Chambers) are commonplace and can be dealt with together: see e.g. TTI Global Resources Hong Kong Ltd. v Hongkong Myphone Technology Co., Ltd. & Ors. [2021] HKCFI 306 at §7.

Ground 2(2)

11.This ground first complains that the Court failed to grant an adjournment of the appeal hearing for Ds to prepare their evidence in opposition. This complaint is entirely unmeritorious. At no stage did Ds apply for any adjournment. To the contrary, within 7 days after the appeal hearing, the Court was informed categorically that Ds chose not to file any evidence. In “Ds’ Updated Skeleton Submissions” dated 5 December 2024 (at §96), counsel for Ds, Mr. Raphael Leung, wrote: “Ds confirm they do not seek to file any affidavit evidence in respect of the Amendment Summonses”.

12.Indeed, at the hearing on 17 September 2025, I asked Mr. Ernest Ng (then leading Mr. Leung and acting for Ds) whether Ds intended to file any evidence in opposition and Mr. Ng replied that having taken instructions, there was no positive case to be put forward by Ds in opposition and that Ds were simply to put P to strict proof of its claims.

13.This appeal ground goes further to accuse this Court of wrongfully assuming that any consequential amendments by Ds of their Defence could not “affect in any way the decision” of the Court. This accusation is quite remarkable, to say the least, in light of what had transpired at the appeal hearing on 28 November 2024.

14.As can be seen from the Decision, the “locus” issue was only raised for the first time by Ds three days before the appeal hearing, much to the surprise of P. For that reason, at the hearing, Mr. Leung for Ds did not oppose to leave being granted to P to amend its Statement of Claim if that became necessary, depending on the ruling by this Court. Ms Au even produced a Summons to amend and an Amended Statement of Claim on a de bene esse basis at the hearing so that Ds would know precisely the limited extent of the amendment that would be made by P relating to the capacity issue, if and when necessary. There were discussions between the Court and the parties the end result of which was that Mr. Leung would write to inform the Court within seven days what consequential amendments Ds would propose to make to their Defence and whether Ds would file additional evidence in opposition.[1] That was such that P and the Court would not be “ambushed” again, that the Court could proceed to decide the appeal with “all the cards on the table”[2], and that the case could be disposed of “by way of paper disposal” without requiring the parties to come back for another hearing.[3]

15.Regrettably, when Ds filed “Ds’ Updated Skeleton Submissions” seven days later on 5 December 2024, the Court was not informed as to what consequential amendments they proposed to make. There was only, hidden in the last footnote (footnote 12) at the very end of those submissions, a suggestion that “consequential amendments are necessary even if the Court is minded to grant summary judgment against Ds since P’s locus standi to sue for damages, amongst others, remain alive”.

16.Therefore, despite the Court’s earlier direction, Ds unilaterally chose not to inform the Court whether there would be consequential amendments to deal with P’s amendment as to its capacity to sue; and they clearly anticipated that without that information, the Court could nonetheless proceed to enter summary judgment against Ds for rent arrears; but they still insisted that leave should be granted to Ds for consequential amendments to deal with the other parts of P’s claims such as damages.

17.Seen in context, it does not lie in the mouth of Ds, who had chosen not to inform the Court of the terms of any proposed consequential amendments as per the Court’s direction, to turn around and complain that the Court had wrongly assumed that any such amendments would not have affected its Decision.

18.Indeed, at the hearing for stay of execution on 17 September 2025, I asked Mr. Ng whether instructions had in fact been taken from Ds and whether they proposed to make any consequential amendments to their Defence afterall. Mr. Ng frankly informed the Court that instructions had been taken from Ds with the result being that no consequential amendments to the Defence were intended or would be sought.

19.Therefore, counsel for Ds should have known well that the suggestion that this Court had wrongly assumed the immaterial nature of any consequential amendments by Ds is a complete red-herring when all along Ds’ instructions were that no amendments would be sought.

20.I should put it on record that after the Court had gone through some of the transcript of the appeal proceedings of 28 November 2024 with Mr. Ng to deal with this appeal ground, Mr. Ng quite appropriately undertook to consider withdrawing this ground (or at least part thereof) in the Appeals in due course.

Additional reasons to stay

21.Having considered all the points submitted by Ds in these applications, this Court takes the preliminary view that none of the appeal grounds is arguable. But for the sake of completeness, I should point out that the purported additional reasons put up by Ds to justify stay of execution also appear to be without substance.

22.In gist, Ds filed evidence to show that P has commenced winding-up proceedings against D1 (the Company) to recover the judgment debt in these Actions. It is alleged that such proceedings could bring serious financial ruins on D1 and D2 (D1’s former director and shareholder) when D1 has been involved in substantial negotiations with a third party in relation to a business deal with a potential commission of HK$30,000,000 to be shared between D1 and D2. The argument raised by Ds is that if D1 is to be wound up, Ds would lose the huge potential commission despite all the hard work done in the past.

23.However, that argument clearly breaks down when there is simply no evidence filed by Ds to show that they could not afford to pay the judgment debt in the interim pending the Appeal. D1 and D2 had rented or occupied two houses in the Peak for years and they had the financial capacity to be able to afford that. As long as D1 or D2 proceeds to satisfy the judgment debt, the winding-up proceedings against D1 could be withdrawn immediately and it would be business as usual for Ds to earn their potential commission from their business deal. On the face of the evidence filed with the Court, these purported “additional reasons” simply cannot be made out.

Conclusion

24.I therefore find against Ds in these applications and refuse to order stay of execution pending the Appeals. I also order that the costs of and occasioned by these applications be to P on an indemnity basis[4] to be taxed if not agreed.

Ms Astina Au, instructed by DLA Piper Hong Kong, for the Plaintiff

Mr. Ernest Ng and Mr. Raphael Leung, instructed by CLKW Lawyers LLP, for the 1^st and 2^nd Defendants