Read the full judgment text of CACV 94/2012, CACV 95/2012, CACV 96/2012 on BabelCite. This Court of Appeal judgment was delivered on 15 January 2013 before Cheung JA.
Civil appeal – stay of execution pending appeal – test for granting stay – constructive trust – beneficial ownership of properties – account of benefits – certificate for two counsel – civil procedure – whether appellant has strong meritorious appeal – whether appeal would be rendered nugatory – The plaintiff obtained summary judgment in three related actions (HCCL 16, 17 and 18/2009) against the 8th/4th defendant (Hu) which was reversed on appeal; at trial Reyes J found that Hu held his beneficial interests in the South Horizons and Shouson Hill Properties and PacMOS shares on constructive trust for the plaintiff, and ordered him to account for all benefits (including loan monies, rents, income, sale proceeds) received by him in connection with the properties within 28 days, with any amounts found due to be paid to the plaintiff, and to bear 70% of the plaintiff's costs of the proceedings against him – The plaintiff alleged that Hu had secretly set up a network in which its funds were used to acquire the properties and that Hu had transferred the properties to himself in February 1999 – Hu alleged that the February 1999 transfer was for value to a third party called Willi under a 'take-over arrangement' – The trial judge found that the plaintiff was aware of the acquisition of the properties but not of the February 1999 transfer, and held that the take-over arrangement was a fabrication, finding that Hu and Willi were not credible witnesses – Hu lodged an appeal against the judgment, to be heard in July 2013, and applied for a stay of execution pending appeal, which the plaintiff opposed – The Court of Appeal (Cheung JA) refused the stay – The applicable principle is that a successful party should not be deprived of the fruit of its judgment, and a stay of execution will only be granted if the appellant can show a strong meritorious appeal such that justice requires the judgment to be stayed, or an arguable appeal combined with the appeal being rendered nugatory – The court held that Hu had shown an arguable appeal but had not demonstrated a strong meritorious appeal, because the trial judge had considered the funding of the take-over arrangement, Hu's dealings with the properties after the alleged take-over, the manner in which the arrangement was carried out, and the knowledge of the other key players to the transfer – The court further held that the appeal would not be rendered nugatory: Hu had been given a 56-day extension to complete the account on 4 June 2012 and had obtained the relevant documents from the corporate defendants; apart from a vague suggestion that the plaintiff might use the information against him, Hu was unable to particularise how disclosure in the account would prejudice him if the appeal succeeded; any prejudice in costs could be met by the plaintiff, which had paid all costs orders so far and had security for costs placed in court – The application was refused with costs to the plaintiff with a certificate for two counsel, and Hu was granted a further 28 days to comply with the order for an account.
Legal issues: Test for stay of execution pending appeal · Whether the appeal would be rendered nugatory
Outcome: Application for stay of execution refused; Hu granted a further 28 days to comply with the order for an account
Cites 4 cases