The Bank of East Asia, Ltd v. Tarjoto Heru Hidajat and Another

CACV 267/2025, [2026] HKCA 22

On Appeal From [2025] HKCFI 1458

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 267 OF 2025

(ON APPEAL FROM HCMP NO. 1190 OF 2024)

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BETWEEN

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DECISION

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Hon Anthony Chan JA (giving the Decision of the Court):

1.This is the renewed application of the Defendants for stay of execution pending appeal against the judgment of Mr Recorder Maurellet, SC (“Recorder”)  dated 25 April 2025 ([2025] HKCFI 1458)  (“Judgment”)  and the order made on the same date. By the Judgment and the order, the Defendants were, inter alia, ordered to pay the sum of HK$8,408,679.44 together with further interest, and to deliver to the Plaintiff vacant possession of Flat A on 3^rd Floor and Car Parking Spaces Nos. 5 & 5A on the Car Port Floor, Hatton House, 15 Kotewall Road, Hong Kong (“Property”)  within 70 days.

2.Having considered the documents and the written submissions, we consider it appropriate to determine this application on the basis of written submissions only without an oral hearing, pursuant to Order 59, rule 14A(1)  of the Rules of the High Court, Cap 4A (“RHC”).

Issue

3.There is in truth one issue in the Defendants’ appeal, namely, whether they had accepted an offer by the Plaintiff to refinance a mortgage. 

Background

4.By a Facility Letter dated 20 June 2017 (“1^st Facility Letter”), the Plaintiff agreed to extend to the Defendants a mortgage loan (“Loan”)  in the sum of HK$21,670,000, to be secured by a mortgage on the Property and to be repaid by 120 monthly instalments.

5.On 18 July 2017, the parties executed a mortgage (“Mortgage”)  on the Property to secure the sums payable under the facilities granted by the Plaintiff to the Defendants.

6.On 22 March 2023, the Defendants applied for refinancing by way of a Mortgage Loan Application Form.  In the “Declaration (Mortgage)” section, para 3 stated that:

“I/We understand and agree that the Bank reserves the sole right to decline this application or approve any amount less than the one I/we have applied for without disclosing any reason”.

7.The parties have a dispute over whether and to what extent approval was given by the Plaintiff on the refinancing.  However, as stated in the Judgment, [6], if the Plaintiff had approved the refinancing and made an offer on it, the offer was clearly not accepted by the Defendants as evidenced by the WhatsApp messages between the 1^st Defendant and the Plaintiff’s Mr Mak dated 21 April 2023.  According to the record of the messages, the 1^st Defendant was unhappy with the property inspector of the Plaintiff and indicated that he had no time for the inspection.  The following exchange followed:

Mr Mak: “Then we cannot go to next step on the mortgage…”.

The 1^st Defendant: “That is fine”.

Mr Mak: “So you means (sic)  you will not take the offer?”

“Cancel the applications?”

The 1^st Defendant: “Yes”.

8.On 15 May 2023, there was another communication between Mr Mak and the 1^st Defendant via WhatsApp.  The 1^st Defendant was informed on the terms of loan (amount, interest rate, rebate and penalties)  with “no inspection”.  According to Mr Mak, it was “our final offer” and the 1^st Defendant was asked: “will you have interest on it?” (“May Offer”).

9.In late May or early June 2023, the Plaintiff provided a facility letter dated 29 May 2023 to the Defendants (see Judgment, [7] and [35]).  The facility letter, which was never signed, stated that:

“… Please confirm your acceptance of the terms and conditions set out above and your agreement to observe and be bound by them by signing and returning the attached copy of this facility letter to the Bank within [30] days from the date of this facility letter, failing which this offer will automatically lapse.”

10.On 13 June 2023, the 1^st Defendant (via WhatsApp)  asked Mr Mak whether the loan amount was “before or after deducting my outstanding loan”.  After having received Mr Mak’s clarification on 15 June 2023, the 1^st Defendant replied to Mr Mak on 26 June 2023 that: “I presume I cannot get 15 years.  Can I still get your final offer of May 15 without the insurance?”  Mr Mak did not respond to the question but on 27 June 2023 he requested the information of the Defendants’ solicitors.

11.Subsequently, there were further communications by way of WhatsApp messages and emails between the parties.  These communications do not show that consensus was reached on the refinancing.  In any event, it is not the Defendants’ case that there was an agreement reached by reason of such communications.

12.By a Facility Letter dated 26 January 2024 (“2^nd Facility Letter”), the parties agreed to vary some of the repayment terms of the Loan.  The 2^nd Facility Letter contained a declaration as follows (“Declaration”):

“Save and except the aforesaid, all the other terms and conditions of the Loan as stipulated in the related facility letter(s)  with terms and conditions therein duly signed by you previously in respect of the Property shall remain unchanged and shall be in full force and effect. Please confirm your acceptance of the above terms and conditions by signing and returning to us the duplicate of this letter to Lending Operations Department …”.

13.On 11 July 2024, the Plaintiff commenced proceedings against the Defendants for delivery of possession of the Property and payment of moneys secured by the Mortgage, pursuant to Order 88 of the RHC.

14.On 25 April 2025, the Recorder handed down the Judgment thereby summarily determining the dispute in the Plaintiff’s favour ([Judgment, [45]).

The Judgment

15.The Recorder’s main findings were as follows:

(1)  The Plaintiff’s evidence on the Defendants’ default on the pre-existing Mortgage loan was “either undisputed or indisputable”.  If and insofar as a demand was necessary, such a demand had been made (Judgment, [16]).

(2)  The Defendants’ complaints regarding (i)  their ownership of the Property and right of privacy; (ii)  fire insurance issue; and (iii)  dealings between them and a firm of solicitors did not give rise to any triable defence to the Plaintiff’s claim (Judgment, [22]-[25]), and the Plaintiff’s assertion of right under the Mortgage did not arise from a direct consequence of the same (Judgment, [26]).

(3)  In respect of the Defendants’ complaint regarding the Plaintiff’s conduct of the refinancing negotiations, the Plaintiff was entitled to elect or decide whether to grant a new or refinancing loan (relying on Citibank NA v Days Properties Ltd [2013] 4 HKLRD 264 for the proposition that it would be difficult to superimpose any duty on the part of the Plaintiff in the first place), and no legal defence to the Plaintiff’s claim could be identified (Judgment, [27]-[29]).

(4)  Whilst the Recorder had reservation about the Plaintiff’s evidence that the offer made in March 2023 was conditional upon legal opinion, given the 1^st Defendant’s unequivocal decline of the offer on 21 April 2023, the matter was not material (Judgment, [32]-[33]).

(5)  Whilst there were a number of points in the Defendants’ favour, there were contrary arguments, including that the 1^st Defendant’s WhatsApp message on 26 June 2023 might be said to be ambiguous.  There was no clear evidence of acceptance by the Defendants of the refinancing, and they had agreed under the 2^nd Facility Letter that the terms and conditions of the 1^st Facility Letter should remain unchanged and in full force and effect (Judgment, [40]-[42]).

16.The Recorder awarded the Plaintiff 80% of the costs of the proceedings on an indemnity basis based on applicable contractual clauses, with summary assessment (Judgment, [para 46]).

Defendants’ appeal

17.By a Notice of Appeal filed on 6 May 2025, the Defendants appeal against the Judgment.  The grounds of appeal may be summarized as follows:

(1)  Under “Exclusion of evidence”: The Plaintiff had already approved and offered a top-up in the amount of HK$17 million, which was not marked as incomplete or pending in the record.  The Plaintiff misrepresented as to the Defendants’ ownership of the Property and refused to give mortgage instructions to the Defendants’ solicitor thereby depriving the Defendants of their right to a top-up, but the evidence of the Plaintiff’s misrepresentation was excluded.  The Recorder wrongly rephrased the Plaintiff’s sole right to decline the Defendants’ application as a conditional offer “subject to the bank’s final approval” (Judgment, [5] and [30]).

(2)  Under “Misinterpretation of the law”: The 2^nd Defendant had provided the name of the Defendants’ solicitor to the Plaintiff as an act of acceptance, but the Recorder failed to read the WhatsApp communication of the Defendants’ solicitor and wrongly regarded the acceptance as ambiguous, contrary to evidence.  The lack of signature on the facility letter was due to the Plaintiff’s refusal to send the mortgage instructions to the Defendants’ solicitor.

18.On 27 May 2025, the Defendants applied for a stay of execution pending appeal.  They set out their complaints in the supporting affirmation, which can be summarized as follows: (i)  the Recorder’s exclusion of evidence of the Plaintiff’s wrongdoings and failure to address the same; (ii)  the Recorder’s misinterpretation of the clause in the Mortgage Application Form and failure to give effect to the bank record and other evidence; and (iii)  the Recorder’s failure to address the Defendants’ loss related to fire insurance, consumer loans and the Defendants’ insurance policy.

19.On 6 June 2025, the Recorder rendered his decision ([2025] HKCFI 2645)  (“Decision”)  dismissing the Defendants’ summons for stay of execution pending appeal on the ground that no arguable ground of appeal could be identified (Decision, [7]-[8]).

Present Application

20.By a Summons dated 2 July 2025, the Defendants renewed their application before this Court for stay of execution pending appeal.  In their supporting affirmation, the Defendants rely on the following grounds (as summarized)  for stay of execution of the Judgment:

(1)  The Defendants’ Mortgage Loan Application was approved on 27 March 2023.  The Plaintiff had no commercial justification to deny the top-up.

(2)  The Judgment addressed arguments not raised by either party, including (i)  the acceptance was ambiguous; (ii)  the 2^nd Defendant did not accept the offer; and (iii)  the application was subject to the Plaintiff’s final approval, which were contrary to evidence.

(3)  The Recorder failed to deal with questions regarding the Defendants’ insurance policy claim, the consumer loans, and the fire insurance.

(4)  The Decision did not address the Defendants’ submissions in their affirmation filed on 27 May 2025.

(5)  The Defendant will face significant hardship if the execution is not stayed.

(6)  A stay would avoid multiplicity of proceedings and inconsistent outcomes arising from the enforcement proceedings pending in the court.

21.In their reply affirmation filed on 25 August 2025, the Defendants contend that the Recorder had erred in law and facts, reiterating the arguments summarized in the preceding sub-paragraphs (2)-(5).

Discussion

22.We have considered the written submissions lodged by the Plaintiff on 22 September 2025 and the composite written submissions in support and in reply lodged by the Defendants on 28 October 2025, as well as (i)  the “Draft Grounds of Appeal”[1] and (ii)  the “Statement Setting Out the Reasons Why Leave Should Be Granted in this Appeal” lodged by the Defendants on 9 September 2025.

23.The principles governing an application for a stay of execution pending appeal are well-established and stated as follows in Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84:

(1)  An appeal does not operate as a stay of execution (Order 59, rule 13(1)  of the RHC).

(2)  The burden is on the appellant to justify its claim for a stay, it has to demonstrate that good reasons exist for a stay pending appeal.  The existence of an arguable appeal, ie, an appeal with reasonable prospects of success is the minimum requirement before a court will even consider granting a stay.  If the appeal is strong, that may itself be enough for a stay to be granted.  However, if the appeal is only arguable, the appellant would need to provide the court with additional reasons to justify a stay, eg, that the appeal would be rendered nugatory if a stay were not granted.

(3)  In assessing the strength of the appeal for the purpose of a stay application, it is impracticable and undesirable to go deeply into the merits.  A broad brush approach is called for.

(4)  Where the relevant order is one for the possession of premises, it can readily be appreciated that without a stay of execution, more often than not, it is likely that an appeal would be rendered nugatory.

24.In this application, given that the possession of the Defendants’ home is at stake, the issue is whether they have demonstrated that their appeal has a reasonable prospect of success. 

25.In respect of the exclusion of evidence ground in the Notice of Appeal, we do not agree with the Defendants that the Recorder excluded relevant evidence from his consideration: see Judgment, [27]-[29].

26.We agree with the Recorder that the Defendants’ complaint toward the Plaintiff’s conduct in handling the refinancing application does not give rise to an identifiable cause of action.  It should be noted that clause 18.13 of the Mortgage precludes any set-off or counterclaim against the Plaintiff’s claims.  We do not think the Defendants have a reasonable answer to the proposition that a bank is normally entitled to elect or decide whether to grant a new or refinancing loan. Hence, whether or not the Plaintiff was commercially justified in declining to grant a top-up mortgage to the Defendants is not relevant.

27.We agree with the Recorder that the Plaintiff is entitled to rely on the terms of the 1^st and 2^nd Facility Letters.  The effect of the Declaration in the 2^nd Facility Letter cannot be denied.

28.We do not accept that a binding agreement was reached between the parties on the refinancing.  The Defendants’ suggestion that the Plaintiff had approved the mortgage application on 27 March 2023 does not assist them.  Even if the mortgage was approved, by the WhatsApp communication of the 1^st Defendant on 21 April 2023 he had declined to take up the loan. 

29.As regards the May Offer, we are unable to see any unqualified acceptance of the same.  On 26 June 2023, the 1^st Defendant enquired if the May Offer was still open without the insurance.  That was not an acceptance of the May Offer.  The allegation in para 5 of the Defendants’ skeleton submissions that the May Offer was accepted on 2 June 2023 sits poorly with the evidence. 

30.Insofar as the Defendants now seek to rely on “numerous phone calls” with Mr Mak after 15 May 2023, a meeting with Mr Mak on 2 June 2023 (Defendants’ skeleton submissions, paras 3-5)  and another telephone call with Mr Mak on 27 June 2023 (Draft Grounds of Appeal, para 2)  to suggest that the May Offer was accepted, it suffices to say that such communications, even if they did take place, are flatly contradicted by the lack of signature on the facility letter dated 29 May 2023 (which had subsequently lapsed)  and the Declaration in the 2^nd Facility Letter.

31.As to the misinterpretation of the law arguments in the Notice of Appeal, we are unable to accept that the Defendants’ provision of the name of their solicitor would constitute unequivocal acceptance of the May Offer by conduct.  Indeed, the Defendants’ enquiry of the 26 June 2023 suggests that the May Offer was not accepted by them.  Instead, they made a counter-offer that the insurance should be omitted.

32.In respect of the Defendants’ complaints regarding the fire insurance, the consumer loans and their insurance claim, we agree with the Recorder that such matters do not prevent the Plaintiff from asserting its rights under the Mortgage.

33.For the above reasons, we do not find that the Defendants’ appeal has any reasonable prospects of success.  We therefore decline to grant a stay of execution pending appeal.

34.Costs should follow the event.  We make an order nisi that the Defendants should pay the Plaintiff’s costs of this application. 

35.We assess the Plaintiff’s costs summarily on a nisi basis.  The Plaintiff has lodged a statement of costs for this purpose dated 22 September 2025 in the total sum of HK$126,672.  We summarily assess the costs to be paid to the Plaintiff at HK$100,000.  Notwithstanding the Plaintiff’s contractual entitlement to costs on an indemnity basis, we consider that the time costs for attendance on counsel, preparation of documents and perusal of documents to be of unreasonable amounts.

36.The costs order as well as the summary assessment shall become absolute 14 days from the date of this Decision in the absence of any variation application. 

Ms Christine Yu, instructed by Liu, Chan and Lam, for the Plaintiff

The 1^st and 2^nd Defendants, acting in person