LI XIAO YI v. TANG CHUNG WAH (also known as ALAN CHUNG WAH TANG)

HCMP 406/2025

[2026] HKCFI 5045

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 406 OF 2025

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REASONS FOR JUDGMENT

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Introduction

1.  On 29 July 2026, I found that Alan Tang Chung Wah had been in contempt of court in respect of five grounds (“Grounds”) relied on by the Plaintiff, Dr Li Xiao Yi.  I adjourned the hearing on penalty until 31 August 2026.  There is no need to repeat the background to Dr Li’s complaint or the Grounds themselves, which are comprehensively explained in my judgment dated 29 July 2026 (“July 2026 Judgment”)[1]. I adopt the abbreviations used in my earlier judgments.

2.  On 31 August 2026 I heard the Parties’ submissions in respect of the penalty to be imposed.  I ordered that Mr Tang be sentenced to four months in custody.  I granted a temporary stay pending an application for a stay pending appeal, which I fixed to be heard on 8 September 2026.  These are my reasons for imposing an immediate custodial sentence of four months.  I have divided this judgment into sections addressing:

(1)  Relevant legal principles;

(2)  Penalty;

(3)  Aggravating Factors;

(4)  Mitigating Factors; and

(5)  Disposition.

Legal Principles

3.  In sentencing for contempt, the Court has a wide discretion as to the sanction to be imposed.  The sanction for contempt ranges from a fine to a term of imprisonment[2]. When deciding which sanction to impose, the Court will first have regard to the facts of the case.  Relevant considerations include the acts of contempt, its nature and significance, the circumstances in which the contempt is committed as well as the gravity of the interference with the due administration of justice[3]. The Court will also consider any aggravating and/or mitigating factors.

4.  This is a case of criminal contempt[4]. As the Court of Appeal held in Secretary for Justice v Wong Chi Fung[5] at [3]:

“(1) Criminal contempt threatens the due administration of justice as a whole.  It presents a direct challenge to the rule of law, the very fabric and foundation of Hong Kong.

(2) Because of the immense public interests involved in protecting the due administration of justice as an integral component of the rule of law, the sanction imposed on a contemnor is punitive in nature.  The court will ordinarily impose a deterrent sentence on the contemnor, with the dual aim of deterring him from reoffending and others from committing criminal contempt.  Put in another way, deterrence is ordinarily the primary consideration in sentencing a contemnor of criminal contempt.  Accordingly, a term of imprisonment is generally called for, although the court retains a wide discretion to impose other forms of sentence as it deems most appropriate in the overall circumstances of the case.  A term of imprisonment is particularly warranted where the interference of administration of justice is grave, contumelious and contumacious …” (emphasis added)

5.  In his skeleton submissions, Mr Bernard Man SC (leading Mr Justin Ho) submitted that an analogy may be drawn between contempt by way of false evidence and contempt by way of a false statement verified by a statement of truth.  I agree.  As I have noted in [15] of the July 2026 Judgment, “an obligation to give truthful evidence is a matter of paramount importance to the administration of justice”[6]. Whether it is contempt by way of false evidence or false statement, the mischief aimed at must be the prevention, or at least strong deterrence against, giving untruthful evidence.  In sentencing the Defendant for contempt of court by way of false evidence, the observations made by the English Court of Appeal in Liverpool Victoria Insurance Co Ltd v Khan[7] in the context of a contempt of court involving a false statement verified by a statement of truth are relevant guidance:

“58. In the context of a contempt of court involving a false statement verified by a statement of truth, the contemnor may have acted dishonestly, or recklessly in the sense of not caring whether the statement was true or false.  In either case, it is always serious, because it undermines the administration of justice.  In considering just how serious it is in all the circumstances of an individual case, and in deciding the appropriate punishment for contempt of court, we think that the approach adopted by the criminal courts provides a useful comparison, though not a precise analogy.  In particular, the Sentencing Council’s definitive guidelines on the imposition of community and custodial sentences (see para 30 above) and on reduction in sentence for a guilty plea are relevant in cases of this nature.  It is therefore appropriate for a court dealing with this form of contempt of court to consider (as a criminal court would do) the culpability of the contemnor and the harm caused, intended or likely to be caused by the contempt of court.  Having in that way determined the seriousness of the case, the court must consider whether a fine would be a sufficient penalty.  If it would, committal to prison cannot be justified, even if the contemnor’s means are so limited that the amount of the fine must be modest.

59. We say at once, however, that the deliberate or reckless making of a false statement in a document verified by a statement of truth will usually be so inherently serious that nothing other than an order for committal to prison will be sufficient.  That is so whether the contemnor is a claimant seeking to support a spurious or exaggerated claim, a lay witness seeking to provide evidence in support of such a claim, or an expert witness putting forward an opinion without an honest belief in its truth.  In the case of an expert witness, the fact that he or she is acting corruptly and makes the relevant false statement for reward, will make the case even more serious; but it will be a serious contempt of court even if the expert witness acts from an indirect financial motive (such as a desire to obtain more work from a particular solicitor or claims manager), or without any financial motivation at all, and even if the expert witness stands to gain little financial reward by it.  This is so because of the reliance placed on expert witnesses by the court, and because of the corresponding importance of the overriding duty which experts owe to the court (see paras 33-34 above).

60. Because this form of contempt of court undermines the administration of justice, it is always serious, even if the falsity of the relevant statement is identified at an early stage and does not in the end affect the outcome of the litigation …” (emphasis added)

6.  Similarly, I agree with Mr Man that contempt by way of false evidence or a false statement verified by a statement of truth can be analogised with the offence of perjury.  As observed by DDJ Au-Yeung (as he then was) in Kinform Ltd v Tsui Loi (No. 2)[8] at [8], “[l]ike the commission of the offence of perjury, the giving of a false statement verified by a statement of truth would undermine the whole process of our system of justice and the Court will not tolerate such an act”.  In my view, the same can be said about the giving of false evidence.  The sentencing principles applicable to the offence of perjury are, therefore, equally applicable to contempt by way of false evidence.  First, save in exceptional circumstances, an immediate custodial sentence should be imposed on the contemnor.  Second, in determining the length of sentence, account should be taken of any indemnity costs order that might be made against the contemnor as an order for indemnity costs is, in itself, a penalty[9].  Third, any custodial sentence imposed should be the shortest possible sentence which is commensurate with the seriousness of the contempt committed[10].  Fourth, where a contemnor is being sentenced on more than one count of contempt, as in the present case, the Court must have regard to the principle of totality such that the overall sentence passed should reflect the totality of the contemnor’s criminality[11].

7.  I have regard to these principles in determining the penalty to be imposed on Mr Tang.

Penalty

8.  Mr Tang has been found guilty of five counts of contempt of court by dishonestly giving false evidence.  As I explained in [15] of my July 2026 Judgment the obligation to tell the truth is a matter of the greatest importance to the administration of justice.  In particular, it is of paramount importance to the trial process.  Unlike some civil jurisdictions, witness testimony and cross-examination are a central feature of a common law trial.  The obligation to tell the truth is fundamental to maintaining the integrity of the judicial system and preventing the common law trial process descending more than is perhaps unfortunately inevitable, into a game with judges having to choose between competing lies.  Plainly, giving false evidence in an affidavit and giving false evidence at trial are both very serious contempts of court and, as explained in the previous section other than in exceptional circumstances, where proven a custodial sentence will be required.

9.  I note that one of the grounds of mitigation is that Mr Tang is a Church Minister.  It seems to me that it is no mitigation at all.  Mr Tang had more reason than most witnesses to ensure he told the truth.  He has shown scant respect for his oath or the more general moral and legal imperative to give honest evidence.

10.  The false evidence was given in Mr Tang’s capacity as an officer of the court.  The first Ground concerning the loss of the Accounts is particularly serious as necessarily it was a considered and dishonest attempt by an officer of the court to mislead the court.  As I explained in [15] of the judgment in the Action, officers of the court are expected to carry out their duties fairly and with integrity.  Mr Tang is an experienced liquidator and should have been cognisant of this.  I note Mr Jason Wong (appearing with Mr Esmond Wong) told me that in his intended appeal of the July 2026 Judgment in which I found him in contempt, Mr Tang does not dispute any of the findings of fact.  It seems to me that an immediate custodial sentence of four months is required by Count 1 alone.  Count 3 in my view is also sufficiently serious that it independently requires a custodial sentence of three months.  It is also relevant that Mr Tang has previously been found in contempt of court by To J for breaching a document production order and ordered to pay a fine of HK$300,000 and costs on an indemnity basis[12]. Plainly this should not only have brought home the extent to which as an officer of the court he was expected to conduct litigation with integrity, but also the importance of the discovery process.  It would appear that it did not.

11.  Taking into account the additional three counts, the aggravating factors I have referred to and having regard to the principle of totality of sentence, in my view the starting point for all five counts is six months, which is consistent with the approach explained by the Court of Appeal in Liverpool Victoria Insurance v Khan[13].

Mitigating Factors

12.  Mr Tang has filed a further affirmation (“Tang 5^th”) containing matters relevant to sentencing and instructed counsel, who filed written submissions, which were supplemented at the hearing before me.  It is not easy to identify from Mr Tang’s evidence or the submissions a coherent and persuasive explanation for Mr Tang’s false evidence.  This is perhaps understandable as in my view they were clearly an inexcusable series of lies.  I note that neither the affirmation nor the written submissions addressed the two significant aggravating factors to which I referred in the previous section, namely, the fact that Mr Tang gave evidence as an officer of the court and a previous finding that he had been in contempt of court.  The mitigating factors, other than Mr Tang’s involvement with his Church, which were advanced on Mr Tang’s behalf were as follows.

(1)  The false evidence did not advance the claim and is attributable to poor legal advice

13.  The first submission made by way of mitigation was that none of the Grounds involved the fabrication of evidence produced to advance the claim.  This is correct as far as it goes.  However, the suggestion that in respect of the first, and in my view the most serious ground, namely Ground 1, which was that [8] of Tang 6^th in the Action was false, the evidence had no causative effect on the outcome of the Action is misconceived.  It is correct that I dismissed the Company’s claim without any need to rely on adverse inferences drawn from the failure of the Company to make discovery of approximately 350 boxes of the Company’s documents to see if there were any accounts that recorded the alleged loan or otherwise.  However, Tang 6^th was filed to address Dr Li’s request that the Accounts should be disclosed to see if there were any relevant ledgers.  If there was no record of a loan being advanced, this would be consistent with Dr Li’s case that the loan (which it was uncontroversial had been discussed) had not been concluded and made.  In other words, it was filed to explain why no accounts documents had been disclosed, which would undoubtedly be relevant to the determination of the case.  Mr Tang is an experienced liquidator and could have been under no illusion that his statement that “Despite repeated efforts in searching again the same recently, the [Company] cannot locate them now.  I appreciate the valiant efforts spent by my insolvency team over the years” was dishonest and the evidence was framed in such a way as to give the false impression that a thorough search had been undertaken.  This was not evidence relating to matters long passed.  It was evidence about a search falsely said to have been undertaken in the months immediately before the affirmation was made.  The complaint was not, as Mr Wong’s submissions seemed to suggest, that documents had not been disclosed.  It was that [8] was plainly false.  This falsity could not be justified, as was submitted, by Mr Tang receiving from counsel, Mr George Chu (“Mr Chu”), poor legal advice in respect of the substance of the claim.  It is certainly no excuse, as Mr Tang ridiculously suggests in [24] of Tang 5^th, that “With hindsight, I accept that Tang 6^th should not have been sworn or adduced, and I had not been advised of the very serious consequences arising from it”.  Mr Tang is an experienced and highly educated certified public accountant[14], who has considerable experience of litigation.  He did not need hindsight or legal advice to know that he was lying, on that lying in an affidavit is wrong and has serious consequences.

14.  Mr Wong submitted that Mr Tang was lying to cover up a dereliction of duty rather than to strengthen the Company’s case.  There is, however, no evidence from Mr Tang that this is why he lied in Tang 6^th.  On the contrary, at no time during his evidence either at the trial of the Action or these proceedings did he give evidence to this effect or consistent with it.  Indeed, during the trial of the Action the import of much of his evidence was that he had not understood the Company’s discovery obligations extended to documents that might be helpful to Dr Li.  This is the subject of Ground 3.  In any event the submission is a non sequitur.  If Mr Tang did not at the time appreciate that the Company was obliged to disclose the Accounts, necessarily [8] of Tang 6^th cannot be explained as an attempt to hide the fact that he had not complied with his discovery obligations.  What this submission, which was made apparently on instructions, illustrates is a consistent pattern of Mr Tang saying whatever he thinks advances his case without regard to truth or accuracy.

15.  It seems to me that the fact that [8] of Tang 6^th and his evidence of his understanding of the Company’s discovery obligations were not ultimately a component of the court’s reasons for dismissing the claim has little mitigating weight as the evidence which forms the subject of Grounds 1 and 3 were clearly given to advance the Company’s case and with the conscious intention of interfering with the judicial process as was the evidence that forms the subject of Grounds 2, 4 and 5.

16.  I asked Mr Wong if the Company intended to continue with its appeal of the judgment in the Action.  I was told it is.  This it is entitled to do, but it heavily undermines Mr Wong’s main argument that Mr Tang had been poorly advised as to the strength of the Company’s claim and the conduct of the Action with the unfortunate result that he found himself having to explain problems, of which he had not been forewarned by his former legal team.  If Mr Tang now accepts as Mr Wong submitted that the claim was misconceived, I would expect the Company to abandon the appeal.  Conversely, if Mr Tang still thinks that the Company has a viable claim, it follows that the existence or otherwise of the Accounts is relevant.  As mentioned, if the Accounts do not contain any reference to a loan, this is consistent with the loan never having been made, and vice versa.

(2)  Mr Tang has apologised

17.  The court may impose a less severe penalty if considers that a contemnor is genuinely remorseful: Kinform Ltd v Tsui Loi (No 2), [24][15].

18.  It is correct that Mr Chu at the end of the trial of the Action offered an apology on Mr Tang’s behalf in the following terms: “… we just want to apologise if he said anything wrong ….. he’s 67 years old, close to retirement and so on.  So he’s not intend to telling lies…”.  However, he has subsequently challenged every decision of this court.  This is he entitled to do, but the substance and tenor of his various notices of appeal, further affirmations and written submissions do not indicate genuine remorse.

(3)  Mr Tang did not benefit financially from giving the false evidence

19.  Mr Tang says in [30] of Tang 5^th that he has not personally benefited from the false evidence and the Action was brought for the benefit of creditors.  It is Mr Tang’s case that he has earned no fees from the conduct of the Action.  He has not explained in Tang 5^th why he commenced an Action if he was not being paid.  His evidence during the trial of the Action was that it was funded by a litigation funder.  The obvious inference is that the Action was brought with the expectation that the liquidators would be paid out of the proceeds of any judgment the Company obtained.  Mr Tang would know that an experienced bankruptcy judge would know this.  If this is the case, it follows that Mr Tang had a clear motive to give evidence that would advance the Company’s case.  If Mr Tang wished to rely on the absence of a financial incentive to give false evidence, he should have adduced evidence explaining how he was being financed and would eventually receive any fees for acting as liquidator.  I am not satisfied that this submission is a ground of mitigation.

(4)  Mr Tang is of good character

20.  Loss of good character can be regarded as a punishment in itself, especially for a man of mature years who may no longer hold up his head in the community: Pacific Bulk Supermax Co Ltd v Wong Man Cam Patrick[16],[4.5(3)].

21.  As I have already noted Mr Tang has been found in contempt of court on a previous occasion and has been the subject of previous, albeit ultimately unsuccessful, disqualification proceedings.  I take into account loss of reputation and good character, but to a limited extent.

(5)  Mr Tang’s contribution to the profession of insolvency practitioners

22.  A contemnor’s contribution to society generally and contributions in areas directly relevant to the subject matter of the proceedings are properly taken into account in considering whether a sentence should be mitigated: Lee Shu Hang v Kan Lap Kee[17], [19].

23.  I have regard to the fact that Mr Tang has contributed to the profession and the development of insolvency law and practice.  I also have regard to his work with his Church and education.

(6)  Impact of imprisonment on ongoing obligations and third parties

24.  Mr Man very fairly drew my attention to [18] of Lee Shu Hang v Kan Lap Kee in which it is explained that, in determining the severity of the sentence, regard may be given to any continuing commitments that might be adversely affected by a custodial sentence and the potential collateral impact on third parties.  However, Mr Tang has given no evidence concerning this, and I note that the Official Receiver has already commenced disqualification proceedings against him so precisely what the impact of improvement will be is unclear.  I accept, however, that the finding of contempt and a custodial sentence will probably bring Mr Tang’s career to an end.

(7)  Age and ill-health

25.  Mr Tang is 68 years old, and he has produced evidence from his doctor that he has medical conditions commonly associated with aging, such as elevated cholesterol and hypertension.  Age is a matter properly taken into account when considering the severity of sentence in contempt cases: Pacific Bulk Supermax Co Ltd v Wong Man Kam Patrick[18], [4.5(4)]; Wright v Rogers[19], [28].  Medical conditions generally carry little weight, because comprehensive medical services are available while in custody: Pacific Bulk Supermax Co Ltd v Wong Man Kam Patrick[20], [4.5(1)].

(8)  Indemnity Costs

26.  Dr Li accepts that the prospect of Mr Tang having to pay indemnity costs, which will be considerable in the present case, are to be properly taken into account.

Disposition

27.  Having regard to the mitigating factors (4), (5), (7) and (8), I am satisfied that the sentence should be reduced to four months.

Costs

28.  In contempt cases, there is no general rule that indemnity costs should be awarded against the contemnor.  The appropriateness of such an order depends on all the circumstances of the case.  But it is the usual order made when contempt is found: e.g. Navig8 Chemical Pools Inc v Inder Sharma[21].  This is because, as Rogers VP observed in Lau Yee Ching v Wong Tak Kwong[22] (albeit in the context of civil contempt proceedings for breach of a court order), the complainant in committal proceedings stands to gain very little.  They stand to gain no damages.  The bringing of contempt proceedings is an expensive exercise brought for the benefit of the court and more generally serves the public interest of promoting the integrity of the legal process and respect for it: Santa Monica Equity Inc v Nzololo[23].

29.  It seems to me that in the present case it is plainly appropriate to order that Mr Tang pays Dr Li’s costs on an indemnity basis with a certificate for two counsel, which I so order.  The costs are to be taxed if not agreed.