Fan Hao Ling Sandra v. Wong Man Fai Frankie

HCA 614/2024

[2026] HKCFI 5641

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 614 OF 2024

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BETWEEN

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DECISION

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Introduction and Background

1.By an Order dated 15 December 2025 (“the Order”), I dismissed the Defendant’s appeal against the Order of the Master Michael Lok dated 15 July 2025 entering summary judgment against the Defendant: (a) in the sum of HK$17,450,000 with compound interest at the rate of 3% per annum for: (i) HK$10,800,000 from 24 April 2017 until the date of the order and thereafter at judgment rate until payment and (ii) HK$6,650,000 from 19 September 2018 until date of order and thereafter at judgment rate; and (b) costs of the action including the application for summary judgment.  My reasons were given in a Decision dated 15 December 2025 (“the Decision”): see [2025] HKCFI 6324.  For ease of reference and consistency, save as otherwise herein indicated, I shall adopt the same abbreviations and definitions as in the Decision.  This decision should be read together with the Decision. 

2.By Summons dated 7 September 2026 (“D’s Summons”), D seeks a stay of execution of the Order until the final determination of D’s appeal to the Court of Appeal made on 9 January 2026 against the Order in CACV 20/2026.  In support of D’s Summons, D filed 3 affirmations dated 7 September 2026 (“D’s 1^st Aff”), 11 September 2026 (“D’s 2^nd Aff”) and 17 September 2026 (“D’s 3^rd Aff”) respectively. 

3.D’s Notice of Appeal dated 9 January 2026, his Response dated 9 March 2026 and his Affirmation dated 14 August 2026 filed in CACV 20/2026 (“D’s Aug 2026 Aff”) were also placed before me. 

4.Today is the hearing of D’s Summons.  Mr Jonathan Ng, counsel, appeared on behalf of P.  D, appeared in person, not legally represented. 

Applicable Principles

5.The starting position is that an appeal shall not operate as a stay of execution or of proceedings under the decision of the court below: see O.59, r.13(1) of Rules of the High Court, Cap. 4A.  This is because it is not the policy of the court to deprive a successful party of the fruits of his success in litigation.  Unless the defendant can justify a stay of execution, one will not be ordered.  The practice of the court is that justification can be demonstrated if good reasons exist.  Commonly, when considering whether good reasons exist, reference is made to factors such as whether the absence or existence of a stay would render an appeal nugatory and the merits of the appeal.  As for merits, merely an arguable appeal cannot by itself be sufficient reason to justify a stay.  It is the minimum requirement before a court would even consider granting a stay.  But if the court is not convinced that there exist arguable grounds of appeal, no stay will be granted.  See Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84 per Ma J (as he then was) at §§6-10 and Hong Kong Civil Procedure 2026, Vol.1, §59/13/1. 

6.Furthermore, the approach of the Court of Appeal where the grounds of appeal essentially seek to overturn the evaluation of evidence and findings of fact made by a lower court’s judge, even though the findings were based on affidavit evidence and contemporaneous documents rather than oral evidence, is that the appeal court should be reluctant to interfere with the lower court’s finding of fact unless it is demonstrated that the judge had fallen into palpable errors in the findings of fact.  The appellate process is not designed to give a litigant a platform to repeat submissions made in the court below on the evidence and factual aspects in the hope of persuading the appeal court to come to a different view from the primary judge: see Re Cheung Kwan, Debtor [2021] HKCA 282 at §§31-33 per Kwan VP.

Discussion and Disposition

7.According to D, there are ten material errors in the Decision as identified in D’s Aug 2026 Aff.  These are, as I understand them, in gist as follows:

(1)  Contrary to the principles in O.14 application as set out in §9(4) of the Decision, namely not to isolate each factual issue but to consider D’s story on that issue as credible by looking at the whole situation, I had failed to do so and overlooked the most basic or obvious purpose of the loan agreements;

(2)  The 3 loans granted by Hemmon or P were granted to enable the development of the Land and it was the common understanding of parties that the funds advanced by those loans were to be used for the Development.  After Hemmon passed away, if P did not believe the Development had prospects of success, she would not have agreed to lend the subsequent loans;

(3)  In respect of the Decision, §23 and my query why D would have signed the 1^st Loan Agreement regarding terms that were not the agreed terms, he has given a reasonable explanation given the purpose of the loans.  He also gave the explanation (but that was not given in his affirmation filed in opposition to the summary judgment application) that to save time and incurring of legal expenses, and given the Deed which was very comprehensive and had been drafted by lawyers, he only requested a simple Chinese agreement for the record.  At that time, he had anticipated the Development would be completed in around 3 years (this was the only explanation given in D’s affirmation filed in opposition to the summary judgment application);

(4)  From the exchange between parties and their subsequent conduct, it clearly reflected that the time of repayment of the loan agreements was not yet due.  P and Freya often flew to Kuala Lumpur to understand the latest situation of the Development, D had updated them and were aware because of the Covid pandemic, which was unforeseen, the contractors could not progress according to the schedule and this led to the project not completing in 2020.  P also knew that repayments could only be made after completion of the Development and did not take any recovery action of the 1^st and 2^nd Loan Agreements.  He also relied on the fact that P and Freya continued to lend through their Hong Kong company some $70M odd for the Development after the 2^nd Loan Agreement (this again was also not mentioned in D’s evidence filed in opposition to the summary judgment application);

(5)  There was an unfair reading of the contemporaneous meeting records and messages in December 2023 in the Decision, §25, which was considered in isolation and not looking at the whole situation.  I should have considered the large size of the loans which were not secured or without any collaterals, and that P believed that the profits from the Development could be used for repayment.  When D said he did not have cash at this moment, actually it was what he foresaw was his situation when the loan became due.  In the context of what was being discussed, this was a very reasonable explanation;

(6)  When I referred to the fact that D did not allege that the two loans were not yet repayable in his letter dated 30 January 2024, I had taken the letter out of context because as at the time of that letter, the Development had not been completed and the loans were not due to be repaid.  D was only writing to ask for copies of relevant documents in support of P’s case that the loans were due;

(7)  In respect of the Decision, §29, D repeated that because the Deed was drafted by lawyers, to save time and costs, and also because of the working relationship between the parties, the 1^st Loan Agreement was only a brief written agreement.  However, he repeats that the common understanding was that the loans were only due 12 months after completion of the Development;

(8)  In respect of the Decision, §22, on my finding that D merely asserted an oral agreement that the loans were not to be repaid until 12 months after the date of issuance of the Certificate of Fitness, this is inconsistent with my accepting the 2^nd Loan Agreement was agreed orally in the Decision, §§18 and 30;

(9)  For the case of Xue Xiaoyun cited in the Decision, §30, he disagreed that it was decided on the facts of that case.  Similarly, in the present case, he had raised that the agreements were contrary to commercial sense which were points against the plaintiff and give rise to triable issues; and

(10)  Given P’s ulterior motive in requesting for early repayment of the loans in 2024 and Freya also attempted to cheat him of 10% of the shares of Prestige to take control of Prestige, there are matters which should go to trial where P’s and Freya’s lies and improper motives can be revealed in cross-examination. 

8.In D’s 1^st Aff, essentially, it was stated that the intended appeal is meritorious.  It was also stated that there would be unfairness to D if the Court of Appeal finds the loans were not yet due and this materially affects the amount of principal and interest payable which is a large amount in dispute.  It further mentioned that after obtaining of the Judgment, P immediately instructed solicitors in Malaysia to commence legal proceedings to enter judgment there with a view of enforcing it in Malaysia and also relied on the Judgment to petition for D’s bankruptcy.  If made bankrupt, he would lose his position as a company director in Malaysia.  On the other hand, there is no material difference to P if P enforces the Judgment at a later stage and has no adverse impact on P.  According to D, P is the only creditor and there is no risk of competition from other creditors. 

9.In D’s 2^nd Aff, supplemental information in support of the stay of execution was set out.  Apart from repeating the background of this action, it refers to a new agreement made in 2021 when P and D met in Hong Kong during the pandemic and that alleged agreement is said to explain why when the first and second loans had already fallen due for several years, no immediate repayment was required and no recovery action taken.  This is a new matter which was never mentioned in D’s affirmation in opposition to the summary judgment application.  As noted in the Decision, §6, I had refused the application to amend the Defence based on an alleged oral agreement on or around 15 December 2023 to vary the terms of the 1^st and 2^nd Loan Agreement.  The belated change to D’s defence was also a reason for casting great doubt on the credibility of D’s defence: see ibid, §17.  D’s 2^nd Aff also mentioned as important matters, firstly, P having instructed solicitors in Malaysia to enter judgment of the order made by this court in 2025 and secondly, P has filed a bankruptcy petition in the Hong Kong court which is listed for hearing on 2 November 2026. 

10.In D’s 3^rd Aff, D informed this court that there are two obvious errors and factual inaccuracies in P’s bankruptcy petition and asserted that they were relevant to the present case.  These are, essentially, that it was alleged by P in the bankruptcy petition that D had resided in Hong Kong throughout the preceding 3 years and P did not jointly own any assets with D.  D asks for a stay so as to avoid D’s ability to pursue other relevant and viable avenues and to ensure his rights and interests are protected. 

11.D made a number of oral submissions today which, in a nutshell, can be summarized as follows:

(1)  In response to Mr Ng’s submissions that he could first repay the judgment debt and no stay is necessary, the funds from the loans were used in the Development so how can he repay when the Development was not completed and sold?  The agreement was for repayment within 12 months from the date of issuance of a Certificate of Fitness for the Development;

(2)  The 2^nd Loan Agreement was not in writing and whilst the funds advanced were to be used in the Development like the 1^st Loan Agreement, he did not agree with the Decision that the terms were the same as the 1^st Loan Agreement;

(3)  He pointed out that if the 1^st and 2^nd Loan Agreements were due in 2020/2021 then why did P not chase him for repayment but only in 2024?  He continued to work on the Development from 2020 without remuneration and until the relationship turned sour in 2024 because of the cheating of his 10% shares.  This was because there was an oral agreement in 2021 during Covid when he came to Hong Kong.  He disagreed with P’s explanation that the reason why no action was taken until 2024 was because lack of progress in repayment proposals and the concern about the limitation period; and

(4)  He explained there was new evidence or new matters raised because at the material time he was in Malaysia, had not properly arranged all his matters and he thought that he did not have to give the complete evidence since it was only an application for summary judgment and he would have the opportunity to have all evidence considered at trial. 

12.Having considered D’s intended grounds of appeal and other matters raised by D, I do not consider that it has been demonstrated that I have made any palpable errors in my findings of fact and/or evaluation of the evidence that were placed before me.  I have already mentioned above certain evidence or explanations which are new and were never raised before me at the hearing of the appeal against Master.  Besides, it appears to me that the intended appeal merely regurgitates D’s version of events and asserted the terms of the 1^st and 2^nd Loan Agreements which I had rejected as not raising any real or bona fide defence to P’s claim.  See the Decision, §§§20-33. 

13.I disagree, if that is suggested, that I erred in overlooking or not applying the trite legal principles as set out in the Decision, §9.  I was fully aware of the background to or purpose of the loan agreements which were set out in my summary of the parties’ respective case in the Decision, §§2 and 3.  Furthermore, in making my findings I had regard to the whole of the evidence placed before me.  I strongly object to any suggestion I had applied the applicable principles inconsistently or unfairly in favour of P but against D. 

14.In all, I do not take the view that there are arguable merits in the intended appeal. 

15.Even if I am wrong and the Court of Appeal may take a different view on the merits, I am also not satisfied that the absence of a stay would render the appeal nugatory.  As held in Star Play Development Ltd, 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 is against a money judgment, as in this case, the court will require evidence as to why the levying of execution will result in the appeal being rendered nugatory, for example, an appreciable risk that the respondent to the appeal would not be able to repay in the event of a successful appeal (see §9(1)).  Apart from asserting irreparable harm if there is no stay, there is simply no evidence and not even suggestion in any of the affirmations filed by D that in the event D’s appeal is successful, the judgment debt could not be returned by P to D.  Furthermore, if D discharges the judgment debt, no bankruptcy order would be made against him and it would not affect his ability to act as a director in Malaysia. 

16.For all the above reasons, I would dismiss D’s Summons. 

17.I see no reason why costs should not follow the event.  D should pay to P forthwith the costs of D’s Summons which have been summarily assessed by me, adopting a broadbrush approach, at HK$75,000. 

Mr Jonathan Ng instructed by Messrs Edward Ko & Company, for the Plaintiff

The Defendant appeared in person