Mimi Kar Kee Wong Hung v. Severn Villa Ltd and Others

HCMP 243/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 243 OF 2011

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HCMP 522/2011

Before: Deputy High Court Judge Carlson in Chambers

Date of Hearing: 8 June 2012

Date of Delivery of Ruling: 8 June 2012

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R U L I N G

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1.This will stand as a composite ruling in all these matters and will be marked on this occasion in chambers (open to the public). I need to rule on whether Madam Wong can remain at Severn Road until 17 June, as she asks, after which she will be able to occupy a flat at Estoril Court of which she has taken a two-year lease; and secondly, whether the antique furniture which is with her at Severn Road is to move to Estoril Court when she goes there, or whether, as the husband asks, it should be moved to a secure facility operated by Michelle International Transport Limited to await the court’s judgment on the ancillary relief application.

2.I will resolve Madam Wong’s situation first, and deal with the furniture after that.  The matter comes before me on a summons issued on Madam Wong’s behalf to stay execution of an order dated 4 May by which Madam Wong was required to give vacant possession of Severn Road by 4 pm on 3 June.  Last Friday I gave an interim stay until tomorrow so that, amongst other reasons, this summons could be heard together with the partly‑adjourned directions summons in the ancillary relief application.

3.Today Mr Grossman, SC, (Mr Robert Pang, SC, with him), has asked for the interim stay to be extended to 17 June, by which time he submits that his client will have arranged her move and that of the antiques, properly insured, to Estoril Court.  In the overall scheme of things, submits Mr Grossman, this is not a big indulgence to extend to her.

4.He has referred to her most recent affirmation, which catalogues what she has done in terms of trying to get the antiques appropriately insured, and the removal arrangements that she has put in place for her move to Estoril Court by 17 June.  At first blush, this would seem to be a perfectly reasonable request which should be granted by the court; reasonable, that is, until one has regard to Mr Bleach, SC’s submissions in opposition.

5.The primary submission is that I simply have no jurisdiction to grant a stay of execution, as I had no jurisdiction to grant the interim order last Friday; as I had no jurisdiction on 4 May, when I correctly, says Mr Bleach, refused Mr Grossman his stay application immediately after Madam Wong had submitted to judgment which required her to vacate by 3 June.  There is no question of my embracing any sort of narrow residual or even ad misericordiam discretion to do as Mr Grossman invites me, because I have no such discretion.

6.That is a very important submission by Mr Bleach, as no court would wish to fall into the error of making an order which it has no power to make.  That sort of error drives at the core of the due administration of justice.  I will examine this submission with care in a moment, but curiously, I should observe that if I uphold Mr Bleach and dismiss Mr Grossman’s summons for a stay, then the companies who have been entitled to possession since 3 June under the 4 May judgment would be entitled to take such course as they may be advised to adopt to obtain possession by coercive means such as by a writ of fi fa.  That procedure does give the court a limited discretion to stay execution of the writ of possession, although I very much doubt, absent something remarkable, whether it would exercise it, and certainly not beyond 17 June.  But that is all by the by, because I must now examine the court’s powers as they are today.

7.Mr Bleach has strongly relied on the Court of Appeal’s decision in Credit Lyonnais v SK Global (Hong Kong) Limited [2003] 4 HKC 104, which related to a money judgment and not to an action for possession of land.  In that case, the Court of Appeal recognised that the court retained an inherent jurisdiction in suitable cases to make orders staying execution quite apart from those situations expressly permitted under the Rules of Court.  The Court of Appeal held that the exercise of its inherent jurisdiction should be sparingly exercised in situations which would have the effect of avoiding injustice, preventing abuse, preserving the dignity of the court, or to facilitate the administration of justice.

8.As a starting point, a judgment creditor, that case being a money judgment - and this, in my view, would apply with equal force to a party entitled to possession of land, as in this case - should be able to take all legitimate measures to enforce the judgment.  The Court of Appeal held that only in exceptional circumstances should the judgment creditor be deprived of the fruits of its judgment by being prevented from levying execution.  Rogers J.A., Vice‑President, held, the Chief Judge agreeing, that in broad terms, the court had jurisdiction to stay enforcement of regularly-obtained judgments in respect of which there was no challenge as to their validity or appeal pending, and this is the situation here.  But, as the Vice‑President held, justice must require it, and there must be very special circumstances.  The court should not otherwise prevent a judgment creditor from enjoying the fruits of the judgment short of there being abuse or manifest injustice (page 113 B to C).

9.What I get from that is that I do have an inherent jurisdiction, but it is one to be exercised, as the Court of Appeal has said, only where there are very special circumstances.  I am therefore relieved to say that when I acted as I did on 1 June, I had purported to exercise a jurisdiction that I possessed.

10.Reference has also been made to a passage from the judgment of Cheung JA at page 116H, citing a passage from Halsbury 4th Edition Reissue 2002 Volume 17-1, paragraph 115, to the effect:

“That the court has no inherent jurisdiction or other power to stay or suspend the execution of a judgment or order for possession of land against a trespasser.”

But I apprehend that this does not encompass Madam Wong’s situation, who falls into the category of, ab initio, a licensee whose licence has been validly determined, rather than somebody who entered into possession as a trespasser and who never had a lawful right to be there.

11.It is also helpful to consider the other case relied on by Mr Bleach, which is Alabama Investment Company Limited v Chaintext Company Limited [1993] 2 HKC 295, in which a licensee had a possession order made against him.  The Court of Appeal held that the judicial discretion to stay execution of a possession order should only be for such period as the person against whom the possession order had been made would require to vacate the premises.

12.Given that I do have a discretion under the court’s inherent jurisdiction to give Madam Wong a stay of execution, how, in the circumstances of this case, should I exercise it?  It seems to me that I should have regard to the whole history of this matter.

13.By submitting to judgment, Madam Wong is taken to accept that her right to remain at Severn Road was validly determined in 2010 when her executive directorship was terminated.  She has held up the companies’ right to possession since then by bringing the proceedings that she did.  Secondly, she consented to judgment, and she also consented to a departure date of 3 June.  On 4 May she failed to get a stay of execution.  Very close to the period before possession was due, she asked for this stay based on her, up till then, unsuccessful efforts to find other accommodation, and that all she was asking for, in all of the circumstances, was just a few more days.

14.I was persuaded to give an interim stay to tomorrow. Mr Bleach says that if she leaves, the furniture can remain whilst it is being packed up for removal.  She can attend the premises to supervise the packing.  Until the furniture goes, there will be no viewing of the premises by estate agents or their clients.  But the companies need her out of there.  Every time I make an order allowing her to remain, there has to be an announcement to the shareholders and to the investing public.  This to-ing and fro-ing has caused the share price to go up and down.  This property represents 47 per cent of the companies’ net asset value.  They have their possession order, and they should be able to take advantage of it.  Madam Wong has had enough consideration over the course of the litigation during which she had no case to remain there.  She agreed to a 28-day possession order.  Now she wants even more.  Enough is enough.

15.Mr Grossman says that all she needs is just nine more days.  It is vindictive of the companies to act like this. She should be allowed to depart with her dignity intact.

16.Of course, such a submission excites considerable personal sympathy for this lady, and there is the question of the furniture.  As to the furniture, I am satisfied that even if she is not there after the possession order takes effect, proper security can be maintained by the short‑term employment of a 24-hour security guard.  The most persuasive factor is that she is only asking for a total of 14 days, nine from today, which is not a long time.  Against that, she can simply enough remove herself to a comfortable hotel until 15 June, after which she can move into Estoril Court.

17.Whilst this is a finely-balanced matter, by which I do not refer to the balance of convenience, which has no part to play in this (see Credit Lyonnais), I have decided that I cannot do more for Mrs Wong beyond 4 pm on Monday, 11 June.  This serves to give her the weekend to pack up her suitcase so as to go to alternative accommodation, be it to a friend’s or relative’s home or to a hotel as she would prefer.  The rest of her personal possessions and items of clothing can remain to be packed up for removal to Estoril Court by 15 June.

18.By making this order, I will have given Madam Wong a stay of eight days in all.  In the overall chronology of this sad matter, and having regard to the clearly narrowly circumscribed way in which my discretion can be exercised, this, I believe, is all the consideration that she should be allowed.

19.In the meantime, immediate steps will need to be taken for the removal of the furniture by 4 pm on 17 June.  As to how and where, I will now turn to Mr Yu’s summons in the divorce proceedings.

20.Mr Grossman has read out to me what efforts Madam Wong has made to have the furniture insured.  She has made efforts through Charter Gilman, the current insurers, and AXA as a long stop if Charter Gilman are not able to provide further assistance.  As things stand, neither of these insurers have taken up insurance.  Insurance of such a valuable collection requires a long and careful process to be gone through. The insurer will require to inspect both the items and the place where they are to be kept.

21.But there are complicating features here.  27 items, worth approximately $78 million, are missing.  Madam Wong does not say what has become of them, and I will give directions about this shortly.  The loss has now been reported to the police.  This, in my view, makes perfect sense, especially if there is to be an insurance claim for their loss.  That is a minimum requirement under the insurance policy.  The loss will also need to be declared to the new insurer.  Certainly the AXA proposal form mandates such a declaration.  This will affect the premium, or at least it may do.  Mr Yu submits that the only sensible solution is to move everything to Michelle Transport for safekeeping.  Given this history, and Madam Wong’s unwillingness to say what has happened to the 27 articles, she cannot be trusted.  She has also auctioned for $5.1 million a diamond necklace and not told the husband about it, although she had previously affirmed that she had pledged it for $1.2 million with Christie’s, who had the right to auction it.  This also calls her bona fides into question.  Michelle Transport will insure on a month to month basis, pack up and remove the furniture to Estoril Court and insure it whilst it is there.

22.I have always viewed insurance as of paramount importance.  What is at Severn Road has now been documented by the parties’ solicitors.

23.I am satisfied that I can trust Madam Wong with this multi‑million dollar collection at her home at Estoril Court to await judgment in the ancillary relief application.  It is not necessary to take it off her hands, as Mr Yu submits.  She has lived with it for 25 years, 10 of which for her exclusive use and enjoyment.

24.I will therefore make an order that it is to remain in her possession firstly at Severn Road, and that it is to be removed no later than 17 June to her home at Estoril Court.  The packing up and removal will be undertaken by Michelle Transport, who will also provide appropriate insurance whilst at Severn Road, then for removal to Estoril Court, and finally, at Estoril Court.  The cost of packing and removal should be borne by Madam Wong, as well as the cost of insurance for its removal if that is to be separately charged.  Otherwise, all the insurance costs by Michelle Transport will be borne by the husband on a month-to-month basis until further order, such insurance costs by him to be taken into account on the final hearing.

25.As to the missing items, Madam Wong’s solicitors are to provide by 15 June a letter setting out, on her instructions, a full account of what has happened to these items one by one and in the fullest detail.  Such account will then need to be repeated in her narrative affirmation which is to be filed on 18 June.

26.As to the auctioning of the diamond necklace by Christie’s, she is also to set out in her narrative affirmation the circumstances in which this has come about and why she did not inform Mr Hung of the intended auction beforehand.

27.As to costs of the summons for a stay, I take the view that overall, the companies have been successful, although she has had partial relief.  I direct that she pay 75 per cent of the companies’ costs on a party and party basis, to include the costs reserved on the last occasion.  This can be an order nisi.

28.On the matrimonial directions summons, where I regard the husband to have been fully justified to have come back to court for further directions, I will say that these costs should be the husband’s costs in the cause of the ancillary relief application, and this also can be an order nisi.

29.All parties will have liberty to apply as to the terms and implementation of these orders.

30.Lastly, now that the orders are known and will need to be complied with together with last week’s directions, I very much hope that good sense can prevail and the parties are able to achieve an overall settlement which is at least a tolerable one for both of them.  After all of this, I cannot imagine that the outcome is going to be a happier one than just that, tolerable; but it will be infinitely better than fighting this to judgment, with all the worry and uncertainty that this course will entail.

Clive Grossman, SC, and Robert Pang, SC, and Anny Chak, instructed by Messrs Ho & Ip, for the plaintiff

John Bleach, SC, and Abraham Chan, instructed by Messrs Baker & McKenzie, for the 1st, 2nd and 4th defendants

Benjamin Yu, SC, and Connie Cheng, instructed by Messrs Stevenson, Wong & Co, for the 3rd defendant