China Citic Bank International Ltd v. Durrant Simon Partrick Michael

CACV127/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 127 OF 2014

(ON APPEAL FROM HCMP NO. 3196 OF 2013)

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DECISION

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1.By summons filed on 10 July 2014, the defendant applied to stay the Order of Master Leong dated 11 February 2014 (“the Order 88 Judgment”) and the execution of the writ of fieri facias respectively pending his appeal against the decision of Deputy High Court Judge Poon dated 23 June 2014 dismissing his appeal against the Order 88 Judgment.

HCMP 3196/2013

2.On 26 November 2013, the plaintiff commenced HCMP 3196/2013 against the defendant pursuant to Order 88 of The Rules of the High Court, Cap. 4A (“RHC”) to enforce a mortgage dated 19 December 2000 created by the defendant in favour of the plaintiff over a residential property in Southorn Garden, Wanchai.  The mortgage was to secure the repayment of two instalment loans in the respective amounts of HK$1,000,000 and HK$3,080,000 (collectively “the Loans”) granted by the plaintiff to the defendant under two facility letters dated 18 June 2008 and 11 September 2007 as amended on 3 December 2008.  It is the plaintiff’s case that the defendant had since March 2011 defaulted in the repayments of the Loans.  In the originating summons, the plaintiff seeks the usual money judgment, possession order and costs. 

3.The first hearing of the originating summons took place on 14 January 2014 before Master Chow, which was adjourned to 11 February 2014 before Master Leong.  The adjournment was granted so that the plaintiff would re-serve the complete set of court documents on the defendant, who intimated that the package of documents initially served on him was damaged.

4.The defendant indicated in the Acknowledgment of Service that he filed in December 2013 that he intended to contest the proceedings, but he did not file any evidence in opposition.  At both hearings before the Master, the defendant stated that the plaintiff had provided incorrect information to other financing institutions as a result of which he was unable to re-mortgage the property.  

5.At the hearing on 11 February 2014, Master Leong refused the defendant’s request for time to file affidavit in opposition as he was of the view that the above proposed defence did not amount to an arguable defence to the plaintiff’s claim.  Master Leong proceeded to make the Order 88 Judgment, which is in the usual form for a judgment made under Order 88 RHC, comprising orders for payment of sums due under the Loans together with interest, delivery up of vacant possession of the mortgaged property within 56 days, redelivery of possession and release (subject to the power of sale) upon full payment of the all sums due and costs.   

6.The defendant appealed against the Order 88 Judgment and filed a supporting affirmation on 25 February 2014.  An affirmation in reply was filed by the plaintiff on 11 March 2014.  At the first hearing of the appeal on 13 March 2014, Deputy High Court Judge Burrell adjourned the appeal to enable another round of evidence to be filed. 

7.One day before he was due to file his further evidence, the defendant issued a summons seeking an order that the plaintiff provided documents supporting the amounts and interest stated in the plaintiff’s first supporting affidavit filed in December 2013.  On 17 April 2014, Deputy High Court Judge Poon dismissed the summons and made an unless order against the defendant for the filing of further evidence in support of his appeal against the Order 88 Judgment.  On 24 April 2014, the defendant filed his further affirmation.  The plaintiff filed its affidavit in reply on 2 May 2014.

8.On 5 May 2014, three days before the adjourned appeal hearing, the defendant issued a summons to dismiss the originating summons on the ground that the plaintiff was in contempt of court by filing inaccurate affidavit.  Then on 7 May 2014, the defendant issued another summons applying for an order that Deputy High Court Judge Poon recused himself from hearing the appeal against the Order 88 Judgment.   At the appeal hearing on 8 May 2014, Deputy High Court Judge Poon dismissed the recusal summons.  The appeal and the 5 May 2014 summons were adjourned part-heard to 26 May 2014.  

9.On 23 May 2014, the plaintiff filed a third affidavit (“the plaintiff’s third affidavit”) in further reply to the defendant’s affirmations, to which two tables setting out the monthly arrears of instalments and the principals and interest due under the Loans were exhibited.  In the same afternoon, the defendant issued a second summons to dismiss the plaintiff’s claim on the ground of misrepresentation and knowing deceit by the plaintiff.             

10.On 23 June 2014, Deputy High Court Judge Poon handed down his decision whereby the defendant’s appeal against the Order 88 Judgment and the two summonses to dismiss the plaintiff’s claim were dismissed with costs.

11.On 24 June 2014, the defendant commenced the appeal herein to appeal against the dismissal of his appeal against the Order 88 Judgment. 

Applications for stay of execution

12.In the meantime, the plaintiff applied and obtained on 2 May 2014 a writ of possession and fieri facias combined to enforce the Order 88 Judgment.  Upon the defendant’s application by summons issued on 14 May 2014, Master A Ho granted an interim stay of execution pending the determination of the appeal against the Order 88 Judgment.  The interim stay expired upon the dismissal of the appeal by the Decision of 23 June 2014.

13.On 24 June 2014, the defendant issued another summons in HCMP3196/2013 to stay the Order 88 Judgment and the writ of possession pursuant to Order 45 rule 11 and Order 47 rule 1 of RHC.  On 27 June 2014, Master S Lo heard the summons and dismissed it with costs against the defendant.  Immediately on the same day, the defendant issued a notice of appeal against Master S Lo’s decision.  On 2 July 2014, Deputy High Court Judge Chu heard the appeal.  By her judgment handed down on 8 July 2014, the appeal was dismissed with costs to the plaintiff. 

14.On 10 July 2014, the defendant issued the present summons.  At the hearing before me, he clarified that the application is for a stay of the Order 88 Judgment and the writ of fieri facias and possession combined until after the hearing and determination of his appeal against the decision of 23 June 2014.  He further indicated that the application is also made under Order 45 rule 11 and Order 47 rule 1 of RHC.

Applicable legal principles

15.The starting point in considering the defendant’s application for stay pending appeal is Order 59 rule 13(1)(a) of RHC which provides that a pending appeal does not operate as a stay.  The grant of a stay of execution pending appeal is a matter of the court’s discretion. 

16.The relevant legal principles are well settled: Star Play Development Ltd v. Bess Fashion Management Co Ltd [2007] 5 HKC 84, at paras.6 - 10.  A stay will only be granted if there are good reasons to justify it.  A strong appeal will usually constitute a good reason for a stay.  By “strong appeal”, it means that something has grievously gone wrong with the process of law in the court below: per Litton JA (as he then was) in World Trade Centre Group Limited v. Resourceful River Limited, unreported, Civ App No 70 of 1993, 12 May 1993; and Wenden Engineering Service Company Limited v. Lee Shing Yue Construction Co Ltd, unreported, HCCT No 90 of 1999, 17 July 2002 at paras.6-8. Conversely, a mere arguable appeal is by itself insufficient.  The appellant will have to provide additional reasons to justify the stay.  If the appeal will be rendered nugatory without the stay, that would provide an additional good reason justifying a stay of execution.

17.With these principles in mind, I turn to look at the reasons put forward by the defendant in support of his application.

The defendants’ reasons for stay of execution

18.For the purpose of the present application, the defendant had filed an affirmation in the afternoon of 14 July 2014, the day before the hearing.[1]  The defendant made two broad grounds in the affirmation, namely, (1) Deputy High Court Judge Poon was, for the reasons stated in the affirmation, wrong to have dismissed his appeal against the O.88 Judgment; and (2) a stay of execution would not prejudice the plaintiff whereas a refusal to stay would cause severe prejudice to the defendant. I shall deal with these points in turn.

Reasons for decision

19.The first ground relates to the merits of the defendant’s appeal against Deputy High Court Judge’s decision.  In a nutshell, the defendant said he ought to be allowed to contest the plaintiff’s claim by (i) challenging the amount of indebtedness; and (ii) asserting a breach of contract on the plaintiff’s part.

20.It is said that the plaintiff had failed to present a true and accurate state of account with regard to the sums due under the Loans and to provide supporting evidence to prove the accuracy of its claim.  The defendant also complained that the plaintiff was permitted to file the plaintiff’s third affidavit and to rely on the two tables exhibited to it, and that he had no opportunity to file affirmation in reply to it.  It is also said that, prior to the hearing before Master Leong, he had not been given an opportunity to contest the plaintiff’s claim or to file anything.   

21.The defendant further complains that Deputy High Court Judge ignored his complaints that the plaintiff was in breach of the mortgage by carrying out “fraudulent, defamatory, criminal, racist, misleading and libellous actions” by preventing him from obtaining refinancing and in the course of dealing with him.

22.As this is not the hearing of the appeal, I need not go into a detailed analysis of the reasons of appeal.  I only have to form a preliminary view on the strength of the appeal.  With regard to (i), I note that the defendant has not disputed that he had defaulted in making repayments to the Loans.  Hence, even if the defendant were correct to say that the plaintiff had not provided the full supporting documentation and/or its calculations of the indebtedness were inaccurate, this would not be a defence to the order for possession, which was based upon the event of default in repaying the loan. 

23.That aside, I had considered the reasons given by Deputy High Court Poon and the evidence filed in HCMP3196/2013.  I do not consider the Judge had erred in his decision to allow the plaintiff to file the plaintiff’s third affidavit.  In addition to the reasons given by the Judge, it is also relevant to bear in mind that the Order 88 proceedings were brought by the plaintiff and it was entitled to have the last word on the evidence.  The two tables in the plaintiff’s third affidavit were in reply to the issue on the accuracy of the account and indebtedness contained in the plaintiff’s first affidavit that the defendant raised in his opposing affirmations.  Further, the defendant had also not shown what additional evidence he could introduce by way of affirmation to contradict the tables exhibited to the plaintiff’s third affidavit. 

24.I also do not consider that the Judge erred in his conclusion (paragraph 18 of the Decision) that putting the annual statements that the plaintiff had previously sent to the defendant together with the two tables exhibited to the plaintiff’s third affidavit, they provide support to the account and indebtedness set out in the plaintiff’s first affidavit.  

25.As for (ii), the Judge had stated in paragraph 3 of the Decision that the allegation that the defendant was unable to obtain refinancing as a result of the plaintiff’s conduct, even if substantiated, would at the most entitle the defendant to bring a separate claim against the plaintiff for damages, but would not afford him a defence to the plaintiff’s claim under the mortgage.  In my view, the Judge has stated the legal position correctly.      

26.In short, the prospect of the defendant’s appeal is dim. 

27.Under the second ground, the defendant suggests that the plaintiff would suffer no prejudice if a stay were to be granted since the plaintiff would be charging interest on the outstanding indebtedness.  This however is an irrelevant consideration.  The plaintiff, being a successful party, is entitled to the fruits of its litigation and to enforce the judgment.  Further, the long established practice is where an appeal is against a monetary judgment, a stay will only be granted if the appellant can satisfy the court that if the judgment sum is paid, there is no reasonable prospect of recovering it in the event of the appeal succeeding.  This clearly is not the case here. 

28.The defendant also contends that he would suffer grave prejudice if the stay was refused because the property is his residence and he works from home.  It is said that he would be forced to live on the street and would be denied access to his computer and work archives.  It is further said that he has recently twice been admitted to the hospital for pain attack caused by a tumour that presses on the pain centres of in his body and his spine.  While the court may have regard to the fact that the enforcement of the judgment under appeal will cause an appellant to leave his home, the court must still be satisfied that the appeal has sufficient merit.  As indicated above, I am not persuaded that the defendant has a meritorious appeal.  It should also be pointed out that even if there is merit in the appeal, the stay should only granted on terms which ensure that the plaintiff is paid without delay if the appeal fails: Hong Kong Civil Procedure 2014 Volume 1 para.59/13/1 at p.1086.

29.The defendant also bases the application on Order 45 rule 11 and Order 47 rule 1 of RHC.  A stay of execution may be granted under Order 45 rule 11 “on the ground of matters which have occurred since the date of the judgment or order”, which refers to matters that go to the validity of the judgment, and which if established before the court, might justify the court in saying that, this is not a judgment which on the material now placed before it, it will allow to be executed upon: Tam Ho Man v. Wong Kwok Tai (unreported) HCA4736/1985, 20 October 1986.

30.The defendant argues that Order 45 rule 11 is engaged because of the evidence filed by both sides in the appeal against the Order 88 Judgment.  However, the affidavit evidence filed subsequently does not amount to new evidence that that emerged after the Order 88 Judgment showing that it was not valid.

31.As to Order 47 rule 1, the court may stay the execution of judgment or order by writ of fieri facias where there are special circumstances which render it inexpedient to enforce the judgment or order, or that the applicant is unable from any cause to pay the money.  The jurisdiction is an exceptional one and an applicant has to satisfy the court that there are special circumstances rendering it inexpedient to enforce the judgment or order.  The defendant has not come anywhere near to showing this.  Further, the scope of Order 47 rule 1 is limited to a writ of fieri facias and cannot operate to stay a writ of possession.  It will not prevent the plaintiff from enforcing the possession order.        

32.For the reasons set out above, none of the grounds advanced by the defendants provides proper basis for staying the Order 88 Judgment.  Accordingly, the defendant’s summons is dismissed.

33.The defendant, having failed in the application, should pay the costs of the plaintiff.  There is therefore an order that the defendant pays the plaintiff the costs of the application, to be taxed if not agreed.

Mr Chan Ning Chun of V. Hau & Chau for the plaintiff

The defendant, unrepresented, appeared in person