MR CHU KONG v. SUN MIN AND OTHERS

HCMP 3605/2016

[2020] HKCFI 2022

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 3605 OF 2016

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DECISION

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I.  INTRODUCTION

1.  In HCA2562/2014 (“Underlying Action”), Lau Wing Yan (“Lau”), Sun Min (“Sun”), Chang Dafa (“Chang”) and Pacific Bulk Shipping (Cayman) Limited (“PB Cayman”) as the 1^st to 4^th plaintiffs sued Chu Kong (“Chu”), Lu Zhong Zhi, Hu Mu Zhong, Joint Silver Limited (“Joint Silver”) and a BVI company Central Shipping Company Limited (“Central Shipping”) as the 1^st to 5^th defendants. On 17 December 2014 the plaintiffs in the Underlying Action obtained from Wilson Chan J an ex parte injunction against Chu and Joint Silver (“ExP Injunction”), and on 24 December 2014 such injunction was varied (or partially discharged) and continued by Chow J (collectively, “Injunction”).

2.  On 11 February 2015, Chu applied by summons to discharge the Injunction (“Discharge Summons”). Thereafter, the parties respectively filed affirmations to support and to oppose such summons. On 16 February 2016, Chu applied by summons to cross-examine Sun and Yan Donghai (“Yan”) on their affirmations with a view to establish material non-disclosure to support the Discharge Summons (“XXN Summons”).

3.  On 25 February 2016, the Discharge and XXN Summonses came before DHCJ Kent Yee for hearing. On 30 May 2016, DHCJ Kent Yee handed down written decision (“Yee Decision”) whereby he adjourned the Discharge Summons to be dealt with substantively at the trial of the Underlying Action, dismissed the XXN Summons, and ordered that (unless otherwise directed by the trial judge) Yan’s and Sun’s affirmations dated 29 January 2016 (“Yan 1” and “Sun 3”) be excluded from consideration if they would not testify at trial.[1]

4.  On 18 August 2016, Chu as the plaintiff in HCMP2120/2016 (“Leave Proceedings”) applied ex parte for leave to commence contempt proceedings against the then putative 1^st defendant Sun, 2^nd defendant Yan, 3^rd defendant Chang and 4^th defendant PB Cayman. On the same day, Chu filed his statement (“Statement”) pursuant to Order 52 rule 2(2) of the Rules of the High Court (“RHC”), and his affirmation that verified the contents of the Statement. On 20 December 2016, DHCJ Kent Yee (a) granted leave for Chu to amend the Statement, (b) directed Chu to file the amended Statement (“Amended Statement”), and (c) granted leave for Chu to apply for committal against Sun, Yan, Chang and PB Cayman (“Yee ExP Leave”). On 22 December 2016, Chu filed the Amended Statement and his verifying affirmation.

5.  On 30 December 2016, Chu issued the originating summons (“OS”) in the present HCMP3605/2016 (“Committal Proceedings”) for committal against Sun, Yan, Chang and PB Cayman as the 1^st, 2^nd, 3^rd and 4^th defendants for contempt. On 18 January 2017, an acknowledgment of service was filed by the solicitors on behalf of Sun, Chang and PB Cayman (collectively, “Defts”) that gave notice of intention to defend, and Yan (who was self-represented) also gave notice of intention to defend.

6.  On 1 February 2017, in the Committal Proceedings, Chu filed his 1^st affirmation to support the OS. On 10 March 2017, Chu filed a summons for leave to file his Notice of Appointment to Hear OS out of time (“Time Summons”), and the 1^st affidavit of his solicitor to support such application. On 13 March 2017, the Defts filed (a) a summons in the Leave Proceedings to set aside the Yee ExP Leave for commencing committal proceedings (“Set Aside Summons”), (b) a summons in the Committal Proceedings to stay such proceedings pending determination of the Set Aside Summons and (subject to the outcome thereof) to dismiss such proceedings (“Dismissal Summons”), and (c) Lau’s affirmation in support of such applications.

7.  On 21 March 2017, DHCJ Lee (as he then was) adjourned the Time, Set Aside and Dismissal Summonses for argument and granted case management directions for the filing of affidavits and skeleton submissions. On 3 April 2017, Chu filed his 2^nd affirmation to oppose the Set Aside / Dismissal Summonses. On 15 June 2007, the Time, Set Aside and Dismissal Summonses were heard by DHCJ Saunders. On 15 June 2017 DHCJ Saunders granted leave for Chu to file Notice of Appointment to Hear OS out of time, and on 20 June 2017 Chu filed such Notice.

8.  On 5 July 2017, DHCJ Saunders handed down his written decision on inter alia the Set Aside / Dismissal Summonses (“Saunders Decision”). By the Saunders Decision, DHCJ Saunders (a) set aside the Yee ExP Leave and dismissed the Committal Proceedings (“Setting Aside / Dismissal Orders”), and (b) granted costs orders nisi concerning the Time, Set Aside and Dismissal Summonses (“Costs Orders Nisi”). On 27 July 2017, Chu filed Notices of Appeal in CACV173/2017 and CACV174/2017 (collectively, “Appeal Proceedings”) against the Setting Aside / Dismissal Orders and corresponding Costs Orders Nisi. On 14 August 2017, the Defts filed their Respondents’ Notices.

9.  In the meantime, on 18, 25 and 26 July 2017, Chu and Defts made written submissions to DHCJ Saunders on the Costs Orders Nisi. On 31 July 2017, DHCJ Saunders handed down written decision on costs (“Costs Decision”) that varied the Costs Orders Nisi (“Costs Order”). On 14 August 2017, Defts applied by summons in the Leave/Committal Proceedings for leave to cross-appeal against the Costs Order. Such summons came before me for hearing on 18 October 2017. On 17 November 2017, I handed down my written decision, and granted leave for the Defts to appeal against the Cost Order and to rely on such additional ground of appeal in the Appeal Proceedings. On 15 December 2017, the Defts filed Amended Respondents’ Notices pursuant to such leave.

10.  The Appeal Proceedings were heard by the Court of Appeal (“CA”) on 25 July 2018 (“Appeal Hearing”). At the Appeal Hearing, the CA (a) allowed Chu’s appeal against the Setting Aside / Dismissal Orders and set aside such orders, (b) set aside the Costs Order which shall be substituted with a costs order to be provided for in the CA’s written reasons for decision (“Written Reasons”) in due course, and (c) would provide for costs of and occasioned by the Appeal Proceedings in the Written Reasons (“CA Order”).

II.  SUMMONS

11.  On 2 August 2018, Chu restored the Committal Proceedings by filing a Notice of Appointment to Hear OS (“Notice to Hear OS”) to seek the reliefs set out in the OS. On 30 October 2018, Defts filed a summons in the Committal Proceedings for the following reliefs (“Summons”), and Lau’s 1^st affirmation in support of the Summons (“Lau 1^st Aff”):

(a)	the Committal Proceedings against the Defts / Yan be stayed until the final determination of the intended leave to appeal application in relation to the CA Order, and if leave to appeal were granted, until the substantive appeal to the Court of Final Appeal (“CFA”), but if no leave to appeal application were made, until the expiry of the period within which the Defts were to seek leave to appeal against the CA Order;
(b)	further or alternative to (a) above, the Committal Proceedings be either adjourned to the trial of the Underlying Action or adjourned sine die with liberty to restore before the trial judge / judge in charge of the Underlying Action for further case management directions;
(c)	there be liberty to apply;
(d)	such other directions as the court might seem fit;
(e)	costs of and occasioned by the Defts’ application and by the Committal Proceedings be paid by Chu to the Defts on indemnity basis.

12.  At the hearing of the Summons on 5 November 2018, I (a) granted case management directions for the filing of affidavits to support/ oppose the Summons, and (b) directed the Committal Proceedings be stayed until the final determination of the Summons, which was adjourned for argument, and I further made provision for costs. On 16 November 2018 and 14 January 2019, Ds filed Lau’s 2^nd and 3^rd affirmations to support the Summons (“Lau 2^nd and 3^rd Affs”). On 17 December 2018, Chu filed his 3^rd affirmation to oppose the Summons (“Chu 3^rd Aff”).

13.  On 20 February 2019, the CA informed the parties it estimated that the Written Reasons would be ready for handing down within March 2019. But on 25 March 2019, the CA informed the parties the handing down of the Written Reasons would be postponed to the end of April 2019.

14.  In the meantime, the Defts/Lau as plaintiffs and Chu and other defendants filed their Listing Questionnaires in the Underlying Action on 1 and 4 March 2019 that indicated the action was ready for trial. The parties sought directions for leave to set the Underlying Action down for trial. At the case management conference on 13 March 2019, Master KH Hui indicated he would grant leave to set down for a 11 days’ trial subject to the Defts’ / Lau’s confirmation that they would not pursue their claims against Joint Silver and Central Shipping (both of which were in liquidation). The solicitors for the Defts / Lau gave such confirmation on 25 March 2019, so it was then expected that Master KH Hui would soon grant leave to set the Underlying Action down for trial.

15.  The Summons came before me for argument on 2 April 2019 (“Hearing”). On 29 March 2019, the court received a fax from Yan stating he agreed with the Defts’ stay application, and asked to be excused from attending the Hearing. In the end, Yan attended the Hearing, but did not address the court.

16.  Subsequent to the Hearing, the Underlying Action was set down for pre-trial review on 6 January 2021 and for a 11-day trial (“Trial”) scheduled to be commence on 14 April 2021. To date, CA had not handed down the Written Reasons.

III.  DEFTs’ AND CHU’s STANCE

17.  It is useful to start with the parties’ respective stance on the Summons, which Mr Wong SC (and Mr Tang with him), counsel for Defts, and Mr Whitehead SC (and Mr Hon with him), counsel for Chu, agreed was a case management summons.

18.  Mr Wong SC submitted that by the Summons the Defts sought the following case management orders:

(a)	there be a case management stay of the Committal Proceedings pending final determination of the Defts’ proposed appeal (pending leave) to CFA against the CA Order (ie the validity of the Yee ExP Leave to initiate contempt proceedings);
(b)	further/alternatively, the Committal Proceedings be adjourned until after completion of the Trial;
(c)	further/alternatively, the Committal Proceedings be adjourned sine die with liberty to restore before the trial judge / judge in charge of the Underlying Action for further case management directions.

19.  Mr Whitehead SC urged the court to grant the following reliefs:

(a)	adjourn or dismiss the Summons;
(b)	direct the Defts (if they wished) to file/serve their evidence in response to the evidence already filed by Chu for his application for committal within 21 days, and direct Chu to file/serve reply evidence (if any) within 21 days thereafter;
(c)	fix a directions hearing upon compliance with (b) above (i) to deal with usual matters of trial bundles, time estimates for trial, service of written submissions and list of authorities etc, and (ii) to consider whether it is then appropriate to grant leave to set the application for committal down for trial.

20.  Mr Whitehead SC submitted that the Committal Proceedings ought not to be adjourned to the Trial or somehow to be resolved during the Underlying Action. He referred to the observations of Ma JA (as he then was) in C v C & anor as follows:[2]

“…… As a matter of principle, it must be a wholly exceptional case (and I cannot for the time being think of any such case) for an application for contempt to be heard at the same time as an application for ancillary relief as I have earlier defined it in para.25(1). Indeed, save for one exception with which I will deal later, it must be wholly exceptional for a committal application to be heard at the same time as any other substantive application. ……”

21.  But at the Hearing, Mr Wong SC confirmed it was not the Defts’ intention to have the Committal Proceedings substantively heard at the same time as the Trial. Rather, the Defts proposed as an alternative relief under the Summons that the Committal Proceedings be adjourned sine die with liberty to restore before the trial judge / judge in charge of the Underlying Action only for the purpose of granting further case management directions (see paragraph 18(c) above). That being the case, it is unnecessary to address Mr Whitehead SC’s concern in the above paragraph.

IV. UNDERLYING ACTION

22.  Since (a) the Summons was a case management summons that did not call for substantive decision on the merits in respect of the Committal Proceedings, and (b) the Defts/Yan had not yet filed evidence in such proceedings, I need not deal with the background facts in any significant detail, and will focus on the scope/nature of Chu’s committal application.

23.  The key facts/matters underlining the Committal Proceedings were summarised in the Yee Decision, Amended Statement and Chu’s verifying affirmation. Chu claimed he and Lau directly/ indirectly held about 100 companies that included the Pacific Bulk group of companies (“PB Group”)[3] being a series of companies operating under the name Pacific Bulk but not of holding company and subsidiaries structure. The Underlying Action was 1 of many legal actions following the fall out between Chu and Lau, who were owners of the PB Group  until January 2014.[4]

24.  Joint Silver was wholly owned by Central Shipping, which in turn was jointly owned by 2 companies. All individual parties to the Underlying Action were shareholders of either of these 2 companies, so they had ultimate interests in Joint Silver and in the vessel “MV Grain Pearl” (“Vessel”) that it owned. PB Cayman (established in 2008 and beneficially owned by Chu and Lau in equal shares) was engaged in shipping voyage and time charter business involving the Vessel.[5]

25.  Chu claimed he had put in place the arrangement that PB Cayman would find (and enter into a charterparty / fixture note with) a third party charterer for the Vessel, and then execute a back-to-back charterparty / fixture note with Joint Silver at the same freight rate but with extra commission (ie increase of 1.25% over the address commission payable to the third party charterer).

26.  The disputes between Lau’s camp and Chu’s camp concerned inter alia:

(a)

whether (i) PB Cayman acted as commercial manager of the Vessel having the right to control inter alia the income of the Vessel including retaining funds owned by Joint Silver, and Joint Silver had no right to terminate PB Cayman’s role until all indebtedness by Joint Silver under the bank facility arrangement secured over the Vessel had been fully repaid and PB Cayman had been fully discharged from all liabilities thereunder (as Lau’s camp contended), or (ii) PB Cayman had a more limited role as a commercial agency / in-house broker such that it had to account to Joint Silver as the Vessel’s owner for revenue earned by the Vessel (as Chu’s camp contended);

(b)

whether or not PB Cayman was a commercial manager and entitled to a management fee at the rate of 1.25% of the freight received for the Vessel.

27.  Chu claimed that when the arrangement in paragraph 25 above (which showed PB Cayman acted as in-house broker and not manager of any sort) was put in place, (a) he was sole director of Joint Silver as well as a director and 50% shareholder of PB Cayman, so the arrangement was not an arms’ length commercial transaction but a PB Group internal matter, and (b) PB Cayman had no right to “manage” the Vessel, which right was retained by Joint Silver. Chu further claimed that in June 2014 he was wrongfully removed as director of PB Cayman, and he was denied access to financial information regarding its operations, so he had no idea what became of its paid-up share capital and retained earnings.

28.  Chu claimed the only documents created to evidence the relationship between Joint Silver and PB Cayman were their charterparties / fixture notes, but there was no written/oral management agreement as it was never agreed that PB Cayman should act as the Vessel’s manager. Chu explained Joint Silver had detailed agreement with the Vessel’s technical manager Anshun Marine Services Co Limited that set out its duties[6] and the payments for its management services, but no such agreement existed between Joint Silver and PB Cayman as the latter was not the Vessel’s manager.

29.  In/about November 2014, the Vessel was carrying cargo placed by Orient Sunshine Shipping (Hong Kong) Co, Ltd on a voyage pursuant to a charterparty made with PB Cayman, which in turn made a back-to-back arrangement with Joint Silver. On 5 December 2014, Joint Silver issued a lien notice (“Lien”) against such cargo for unpaid freight by PB Cayman. Dispute arose over whether or not Joint Silver was entitled to issue the Lien notice with Lau’s camp saying (and Chu’s camp disagreeing) Joint Silver was so entitled. PB Cayman offered to pay the disputed freight into an escrow account or into court pending resolution of the disputes on condition Joint Silver withdrew its Lien, but Lau’s camp did not respond. Lau and the other plaintiffs in the Underlying Action applied for and obtained the ExP Injunction that required Chu and Joint Silver to withdraw the Lien (to enable delivery of the Vessel’s cargo) upon PB Cayman’s undertaking to pay the full amount of freight into court (see paragraph 1 above). The ExP Injunction was varied (or partially discharged) and continued (see paragraph 1 above). As a result, the Vessel’s cargo was duly discharged to the consignee in late December 2014 and early January 2015. Joint Silver and Central Shipping subsequently went into liquidation, and the Vessel was also sold. Thus, the Injunction was spent and had no further practical value.

30.  But Chu claimed the ExP Injunction was obtained by false evidence and material non-disclosure, ie Yan[7] doctored 3 purported emails issued on 14 January 2014, 3 July 2013 and 17 October 2013 in relation to the terms of the charterparties made between PB Cayman and Joint Silver for charter of the Vessel (“Emails”) that were exhibited to Sun’s affirmation filed on 17 December 2014 on behalf of the Defts / Lau in the Underlying Action in support of the application for the ExP Injunction against Chu and Joint Silver (“Sun 1”), which deceptively lent support to the case of Lau’s camp before the ex parte judge. So on 11 February 2015, Chu filed the Discharge Summons to discharge the Injunction (see paragraph 2 above). I will explain further about the Emails in Part V below.

31.  In the Yee Decision, DHCJ Kent Yee gave the following views:

“39. …… whether the Dubious Emails are fabricated and false evidence and whether the plaintiffs had any knowledge of such fabrication are a fact-finding exercise involving not just the evidence of [Sun] and [Yan]. [Chu’s] evidence is of key importance too. [Yan] alleges that Ms Susan Ye had throughout been instructed by Mr Chu not to make any references to management fee for internal accounting purposes in spite of the actual payment of such management fees to [PB Cayman]. Thus when [Sun] asked him for a copy of the fixtures between [PB Cayman] and [Joint Silver] for litigation purposes, [Yan] prepared the Dubious Emails by alteration of the three emails and including management fees to reflect the genuine position without telling [Sun]. Whether or not [Chu] caused deliberate omissions of references to management fees paid to [PB Cayman] in the three emails sent by Ms Susan Ye is obviously one of the relevant issues.

40. [Sun] and [Chu] are parties to this action and they are expected to testify at the trial. A separate hearing with only the cross-examination of [Sun] and [Yan] does not really assist in the fact-finding exercise.

41. Hence, I am not convinced that the issues in the Discharge Summons can be conveniently dealt with at an interlocutory hearing despite Mr McCoy’s reassurance that a short hearing will suffice.

42. I agree with Mr Wong that the issue of the identity of [PB Cayman] at the material time, being the core issue of this action, will be fully canvassed at the trial. All documents relating to this issue including the Dubious Emails will be scrutinized closely. So will the circumstances under which the Dubious Emails were created. Duplicity of proceedings to deal with the same issue should best be avoided. It not only will incur unnecessary costs and cause delay but also may possibly bring about inconsistent judgments: Skillsoft Asia Pacific Pty Ltd v Ambow Education Holding Ltd (unreported, HCCL19/2013, 12.1.2016) per Anthony Chan J at §9.”

32.  Bearing in mind the Injunction was spent, the freight was paid into court, the Vessel was sold, and Joint Silver was in liquidation, DHCJ Kent Yee considered there was no urgency, and there was no evidence of loss suffered by Chu personally. So the learned judge concluded as follows:

“45. Mr McCoy’s best argument is that the interests of justice demand that an ex parte order procured by false evidence should be discharged without further ado. To my mind, this is not such an open and shut case that the court should discharge the Injunction without hesitation. Full investigation of all the circumstances is required and this should be undertaken at the trial. There has already been a delay of over a year after the issue of the Discharge Summons and the parties should proceed with the main action as soon as possible so that the differences between them including the propriety of the Injunction can be resolved as soon as possible.”

V.  COMMITTAL PROCEEDINGS

33.  In his Amended Statement verified by his supporting affirmation, Chu set out the grounds relied on for his application to commit the Defts/Yan for contempt. Since the Defts/Yan had not yet filed evidence in opposition (if at all), I summarise Chu’s case below.

34.  Chu claimed that since PB Cayman’s role was never agreed in writing, any documents that identified its role (particularly ones that specified it would receive a management fee that a commercial manager would have expected to receive) would be highly relevant to the case of Lau’s camp in the Underlying Action.

35.  On 17 December 2014, Sun 1 was filed on behalf of the Defts/Lau in the Underlying Action as the sole supporting affirmation for their application for the ExP Injunction. Sun 1 exhibited inter alia the Emails that indicated a term for each charterparty that PB Cayman was entitled to charge Joint Silver management fee of 1.25% of the charter fee (“Management Fee”), which was material to the dispute in paragraph 26(a) above between the parties in the Underlying Action. The ExP Injunction was varied (or partially discharged) and continued at the inter partes hearing (see paragraph 1 above).

36.  Chu claimed that upon further examination of Sun 1, he became aware that the Emails exhibited thereto were fabricated to include a reference to PB Cayman being paid the Management Fee to the original version. Chu claimed Sun committed initial contempt by (a) confirming the facts/matters deposed in Sun 1 were “either within [her] own knowledge, in which case they are known to be true, or derived from such sources as are identified by [her], in which case they are true to the best of [her] knowledge, information and belief”, and (b) stating the exhibited Emails showed PB Cayman “then would enter into a charterparty with [Joint Silver] with a rate higher than the market rate so that [PB Cayman] could apparently make a profit of the charter rates as Management Fees”, which assertion was according to Sun 1 to be within her own knowledge and true but was in fact false, and Sun made such statement without an honest belief in its truth.[8] Chu further claimed Sun 1 did not indicate Yan was the source of the Emails (see Yan 1), and Sun did not take any step to verify the authenticity of the Emails or whether they had been altered to add the reference to the Management Fee.

37.  On 11 February 2015, Chu and Joint Silver filed the Discharge Summons to discharge the Injunction essentially on the basis that Lau’s camp relied on the Emails for obtaining the Injunction (see paragraph 2 above). Chu claimed the fact the Emails were fabricated was brought to the Defts’ attention on 4 occasions following Sun 1: (a) Chu’s 1^st, 3^rd and 4^th affirmations dated 11 February, 4 June and 12 November 2015 (“Chu 1, 3 and 4”), and (b) a letter dated 18 May 2015 by Chu’s solicitors to the solicitors for the plaintiffs in the Underlying Action (“Letter”).

38.  Chu claimed Sun then filed her further affirmation on 13 May 2015 (“Sun 2”) that exhibited copies of the original and fabricated versions of the Emails, but still maintained PB Cayman was the commercial manager of the Vessel for the reasons set out in Sun 1, which meant Sun continued to rely on the Emails. Chu claimed that at that point in time (a) Sun must have been aware of or was reckless to the fact the Emails were fabricated and she could not have an honest belief in the truth of Sun 2, and (b) instead she should have forthwith informed the court / Chu the Emails were fabricated. Chu claimed Sun 2 purported to address the discrepancies in the Emails, but did not deal with and deliberately avoided dealing with the allegation that the Emails were altered, ie how the Management Fee came to appear in the Emails exhibited to Sun 1, so Chu’s solicitors sent the Letter to the solicitors for the plaintiffs in the Underlying Action to note such failure and to invite further affirmation to address the issue (which invitation was declined). Chu 3 further addressed the discrepancies in the Emails, but there was no response. The plaintiffs in the Underlying Action only responded after Chu filed Chu 4 that again set out the allegation that the Emails were altered.

39.  On 29 January 2016, Sun filed Sun 3 that stated the explanation in Sun 2 was drafted by her solicitors based on information provided by Yan, which, according to Chu, showed that the statement in Sun 2 (ie the contents therein were from Sun’s own knowledge) was false, and Sun made such statement without an honest belief in its truth. Sun’s explanation given in Sun 3 was that when she received the Emails from Yan to exhibit to Sun 1, she was unaware they were fabricated due to miscommunication with Yan and the fact she was under time pressure to finalise Sun 1.

40.  Sun 3 also stated Sun did not recognise the nature of the allegation being made in Chu 1 and so did not address such issue in Sun 2, but Chu claimed this was false and Sun made such statement without an honest belief in its truth because Chu 1 made the nature of the allegation very clear and Sun was all along legally represented and had the benefit of legal advice. Chu claimed it was inherently unbelievable that the nature of the allegation made in Chu 1 was not understood, and instead Sun was well aware at least by the time of reading Chu 1, if not before, that the Emails were fabricated, but she simply did not want to address the issue as she would then have to admit to the fabrication. Chu went on to say as follows in respect of Sun 3:

(a)	Chu claimed the Letter and Chu 3 made clear the allegation that the Emails were fabricated, but Sun 3 failed to recognise and address the issue. Sun 3 stated Sun “did not give much thought to these allegations after a quick review of [Chu 3]”, which Chu claimed was false and Sun made the statement without an honest belief in its truth. Sun had received Chu 1 and the Letter when Chu 3 was filed, and the statement that Sun did not properly read an affirmation in the Underlying Action and would not give much thought to serious allegation that she provided false evidence in such action was inherently unbelievable. Rather, it was said Sun read Chu 3 as well as Chu 1 and the Letter, and was well aware of the contents thereof, the nature of the allegation and the evidence in support, and she would have also received advice and/or comments on Chu 3 (as well as on Chu 1 and the Letter) from her legal advisors. Chu claimed that in order to explain why she did not deal with such allegation, Sun falsely stated she did not properly read Chu 3 and so was not properly aware of the allegations.
(b)	Sun 3 stated it was only when Chu 4 was filed that Sun appreciated the gravity of the accusation relating to authenticity of the Emails, which Chu claimed was false and Sun made such statement without an honest belief in its truth. It was said Sun was well aware of the accusations before Chu 4 was filed.
(c)	Sun 3 claimed Sun was unaware the Emails were fabricated until January 2016, which Chu claimed was false and Sun made the statement without an honest belief in its truth. It was said that Sun knew the Emails were fabricated latest by April 2015 when she and Yan discussed why the Emails were different from the originals, and it was inherently unbelievable that during a discussion specifically to investigate an allegation that the Emails were fabricated Yan did not inform Sun the difference between the Emails and the originals arose as a result of his fabrication of the Emails.

41.  Chu claimed that notwithstanding clear evidence provided to Sun that Sun 1 contained fabricated documents, Sun on her own evidence did not make any proper enquiries as to authenticity of the Emails until January 2016, and made no effort to inform the court the Emails relied upon in obtaining the Injunction were fabricated despite being informed by Yan in early January 2016 that he fabricated the Emails (see paragraph 42-43 below).

42.  Chu claimed that on 29 January 2016 Yan filed his affirmation (“Yan 1”) admitting to have fabricated the Emails to add the reference to the Management Fee, which must be contempt as Yan 1 clearly showed Yan was aware the Emails were going to be used in the Underlying Action. Chu claimed Yan 1 attempted to explain why he fabricated the Emails notwithstanding he knew the Emails were going to be produced in the Underlying Action: (a) the original of the Emails failed to record the Management Fee even though a management fee was payable, (b) Chu directed Yan to leave out any reference to the Management Fee for “accounting reasons”, and (c) since the Emails did not reflect the true position as a result of Chu’s direction, Yan fabricated the Emails to prevent PB Cayman from being accused of “producing improper or untrue documents”. Chu claimed these statements were false and Yan made them without an honest belief in their truth.

43.  Chu claimed that at no stage did he direct Yan to leave out reference to the Management Fee, and to do so for “accounting reasons” made no sense. Chu by his 5^th affirmation filed on 16 February 2016 in the Underlying Action rejected Yan’s attempt to so justify fabricating the Emails, and asserted the originals of the Emails were correct. Chu believed Yan fabricated the Emails to lend support to the application for the Injunction, and then having been caught doing so attempted to place the blame on Chu. In short, Chu claimed Yan tried to justify his original fabrication of the Emails by providing false evidence as to the reason for doing so, but even if Yan’s explanation were true (which Chu denied), it could not excuse knowingly fabricating the Emails. Rather, it was said Yan should have exhibited the Emails in their original/fabricated versions, and explained on affidavit that reference to the Management Fee was left out on Chu’s instructions. Chu claimed Yan’s explanation that he fabricated the Emails to prevent the court being provided with untrue documents was self-evidently contradictory/untrue, and no rational person could have believed it was a proper/appropriate way to present evidence to the court. Chu claimed this compounded the original contempt by Yan of fabricating the Emails and the contempt by Sun in relying on them in obtaining the Injunction without checking their veracity despite stating in Sun 1 that these Emails and her comments on them were true to her own personal knowledge.

44.  Chu went on to say as follows in respect of Yan 1:

(a)	Yan 1 stated that in electing to fabricate the Emails Yan acted alone and did not consult any of the plaintiffs in the Underlying Action or inform any of them he had done so, which Chu said was untrue and Yan made it without an honest belief in its truth. Chu claimed the Emails were to be used in legal proceedings and put before the court, so it was inherently unbelievable that Yan as an employee would of his own volition and without consultation with or notice to the parties to the litigation fabricate evidence to be filed in those legal proceedings rather than bringing the issue to the attention of other witnesses for the relevant parties (ie the plaintiffs in the Underlying Action).
(b)	Yan 1 stated when Sun approached Yan in/about April 2015 and asked why there was a 2nd set of the Emails that did not contain reference to the Management Fee, he did not explain this was because he had added reference to the Management Fee in the Emails that was not in the originals. Chu claimed this statement was false and Yan made it without an honest belief in its truth as it was inherently unbelievable that when specifically asked about the discrepancy in the Emails Yan did not explain it arose because he fabricated the Emails.
(c)	Yan 1 stated it was only on a further conversation with Sun in early January 2016 that he finally understood the authenticity of the Emails was in question and he admitted to have fabricated the Emails. Chu claimed such statement was false and Yan made it without an honest belief in its truth since Yan must have been aware no later than April 2015 that the authenticity of the Emails was in question, and it was due to the fact he fabricated the Emails.
(d)	Yan 1 further stated that in providing the Emails to Sun, Yan had no intention to mislead the court or to gain any improper or unfair advantage to the plaintiffs in the Underlying Action. Chu claimed such statement was false and Yan made it without an honest belief in its truth. It was said Yan would have been well aware the Emails as fabricated would assist the case of the plaintiffs in the Underlying Action and would/did mislead the court into believing the Emails (in their original version) included the reference to the Management Fee.

45.  Chu claimed that as a result of his concerns as to the veracity of the explanations given by Yan and Sun, on 16 February 2016 he filed the XXN Summons for cross-examination of Yan/Sun on the contents of the affirmations they filed for the Discharge Summons (see paragraph 2 above). On 25 February 2016, DHCJ Kent Yee heard the Discharge and XXN Summonses, and adjourned the Discharge Summons to the trial of the Underlying Action and dismissed the XXN Summons as there would be cross-examination at trial (see paragraph 3 above).

46.  Chu claimed Sun’s/Yan’s explanations should be understood in their proper context. Sun was the director of Pacific Bulk Chartering Limited (“PB Chartering”) being a member of the PB Group. Although Sun was not a formally qualified lawyer, she had legal training in maritime law and was responsible for handling all shipping-related legal claims/matters for the PB Group. Sun’s husband was a paralegal with the solicitors for the plaintiffs in the Underlying Action and for the PB Group in other legal proceedings between Lau and Chu in Hong Kong. Chu further claimed Lau also mentioned to him several times in the past few years that Sun acted as his “General Counsel”, so Sun would have been in charge of the day-to-day management of the claim in the Underlying Action, and it was not surprising she was chosen to be the deponent of affirmation evidence for the plaintiffs in the Underlying Action. Also, it was said Sun would have been primarily responsible for liaising with the lawyers for the plaintiffs in the Underlying Action in her capacity as a plaintiff and on behalf of the other plaintiffs, and she would have the benefit of any advice given by the lawyers for the plaintiffs in the Underlying Action.  In light of Sun’s role/responsibilities, Chu found the allegations in Sun 3 that, say, Sun did not properly read Chu’s affirmations and/or she was unable to understand Chu’s allegations in his affirmations were unbelievable.

47.  As for Yan, Chu claimed he was for 7 years the manager of PB Chartering’s Operations Department and he was a Master Mariner who sailed at seas as a ship captain. Chu claimed Yan’s evidence (ie he fabricated the Emails but did not discuss the same with any plaintiff of the Underlying Action, did not appreciate fabricating documents could “cause confusion”, and did it as a result of “lack of awareness of the court process in Hong Kong”) must be read in the context of his position/ training, and it was inconceivable he would deliberately alter documents without discussing this with the plaintiffs in the Underlying Action (particularly Sun) and/or for the specific purpose of ensuring false documents were not put before the Court.

48.  Chu claimed to have known Sun and Yan for several years as a result of his co-ownership of the PB Group, and they were sophisticated, intelligent and experienced people in senior management positions for many years, so Chu found their claims of ignorance in the circumstances unbelievable. Chu’s belief was that the plaintiffs in the Underlying Action did not appreciate he had access to a backup server and did not realise he would be able to find the originals of the Emails, so when they became aware Chu had the originals, Sun tried to avoid dealing with the allegation that the Emails were fabricated, but when the issue could no longer be avoided, Yan admitted to fabricating the Emails and then sought to justify that by blaming Chu.

49.  Chu further claimed that under Order 41A rule 9 of the RHC, it was clear Sun and Yan each made a number of statements that were false or made without having an honest belief in their truth, and it was in the public interest for contempt proceedings to be brought against them in that:

(a)	the case against them was strong;
(b)	the false statements made and use of the Emails in evidence went to a key issue in the Underlying Action, ie the role played by PB Cayman, which in turn would be determinative of whether PB Cayman had the rights that the plaintiffs in the Underlying Action sought to enforce in those proceedings;
(c)	Sun/Yan must have been well aware the false statements and the use of the Emails would support the argument of the plaintiffs in the Underlying Action that PB Cayman was the commercial manager rather than in-house agent for the Vessel, and the subsequent false statements would shield them from responsibility for the same and thereby reduce the likelihood of the Injunction being set aside;
(d)	it was essential that parties to litigation be deterred from making false statements and relying on false documents, and from making further false statements to cover up their initial contempt.

50.  Chu explained that the List of Documents of the plaintiffs in the Underlying Action contained an invoice dated 17 November 2014 issued by PB Cayman to Joint Silver (“Invoice”) which was authorised/ “chopped” by Chang on behalf of PB Cayman, and which included description of the amount charged to Joint Silver as “Management Fee: 1.25% on full freight”. Chu claimed it was clear from inspection of the Invoice that the words “Management Fee” were added as they appeared in a different-sized font to the remainder of the document. Further, if Yan’s evidence was true and Chu had instructed him to leave out any reference to a management fee payable to PB Cayman, Chu claimed then the original of the Invoice would not have included the words “Management Fee”, and if the Invoice was altered it would be consistent with the alterations made to the Emails.

51.  Chu claimed that on 29 February 2016 his solicitors wrote to the solicitors for the plaintiffs in the Underlying Action asking them to confirm whether the Invoice was fabricated in the same manner as the Emails, but there was no response. Chu’s solicitors sent a follow up letter on 17 March 2016 but there was still no response, which was consistent with the approach taken in response to allegations about the Emails, ie refuse to comment until forced to and only then to come clean with the fact the documents were altered.

52.  Chu claimed that Chang having “chopped” the Invoice must have been aware it was altered when it was placed in the List of Documents of the plaintiffs in the Underlying Action, and as one of the plaintiffs in the Underlying Action he provided false document as part of the plaintiffs’ evidence. Chu claimed that while Yan accepted responsibility for the fabricated Emails, he did not state whether he fabricated other documents, but assuming the Invoice was fabricated in the same manner as the Emails, either Yan failed to come clean with the court as to the extent of the fabrication by the plaintiffs in the Underlying Action, or someone else within such plaintiffs had also been fabricating documents.

53.  As for PB Cayman, the Emails/Invoice came from its records, so Chu claimed it must have been aware the Emails/Invoice were fabricated, but it still allowed Sun 1 to be filed on its behalf and the Invoice to be produced in discovery when it could have easily checked whether the Emails/Invoice had been fabricated by referring to its own records, so it failed to take any reasonable step to check their authenticity before they were filed in evidence or produced, to take any step to investigate their authenticity when provided with compelling evidence they were fabricated, and to take any step to file corrective affirmation or to withdraw the Invoice from discovery.

VI.  SAUNDERS DECISION

54.  By the Saunders Decision, DHCJ Saunders found inter alia that:

(a)	It was necessary for the ex parte judge to understand whether or not the falsity of the evidence was of sufficient gravity for there to be a public interest in taking contempt proceedings in relation to it (§68), but Chu’s statements in relation the materiality of the Emails were misleading (§58) because in reality, “[when] read in the whole context of the way in which the claim is pleaded and the response in the defence”, nothing turned on the distinction between commercial manager and commercial agent in respect of PB Cayman’s role vis-à-vis the Vessel, and the critical issue was whether PB Cayman was entitled to collect all sums arising from the commercial operations of the Vessel and utilise the same to repay the loan obtained by Joint Silver to purchase the Vessel (§§58 and 71). It was said the Emails exhibited to Sun 1 must be considered in context, ie the Emails were just “examples” to demonstrate the arrangement between Joint Silver and PB Cayman in respect of the Vessel (§64), and such affirmation was made not for the purpose of the central dispute between the parties but for seeking the ExP Injunction (and counsel’s submissions did not refer to the Emails or any reference to the label of “management”) (§65). Further, the “original fixture email” (being the actual arrangement in issue) was exhibited to Sun 1, but “[there] was no reference to the document in the leave papers” (§70). DHCJ Saunders agreed that by failing to put before the ex parte judge fairly the context in which the Emails were used, and by failing to refer him to the “original fixture email”, there had been material non-disclosure on a crucial issue, ie the gravity of the alleged contempt (§§73-74).
(b)	The Defts complained Chu failed to inform the ex parte judge of a number of other avenues of complaints that were followed by Chu and his advisers in respect of the Emails, eg the Discharge Summons “that had been granted, apparently in reliance, in part upon the [Emails]”, the XXN Summons to cross-examine Sun/Yan prior to trial, and a criminal complaint with the police (§75).
(c)	(i)	The XXN Summons and the Yee Decision in relation thereto were not referred to in the Statement and Chu’s verifying affirmation (§78). But Chu said the judge who granted leave (ie DHCJ Kent Yee) was the same judge who refused the XXN Summons, so he must have known of his own decision (§58). DHCJ Saunders was of the view that the XXN Summons if disclosed would have weighed in the balancing exercise, and so should have been disclosed. In dismissing the XXN Summons, DHCJ Kent Yee said whether the Emails were fabricated false evidence and whether Chu and other defendants in the Underlying Action had any knowledge of such fabrication were “…… a fact-finding exercise …… [which] will be fully canvassed at the trial” (§84). DHCJ Saunders was of the view this passage should have been drawn to the ex parte judge’s attention, particularly as there was no certainty the ex parte judge would have been the judge who delivered the Yee Decision that dealt with the XXN Summons (§§85-86).
	(ii)	The fact that in August 2016 (ie 20 months after the event) Chu lodged a criminal complaint with the local police concerning the Emails was not disclosed in the Statement or Chu’s supporting affirmation (§87). DHCJ Saunders considered there was material non-disclosure since the availability of a prosecution for perjury must be a material factor to be taken into account by the court (§§89-90).
	(iii)	Chu had begun 12 separate actions against Lau or those associated with him, and DHCJ Saunders agreed the fact there was other extensive litigation between the parties was a material consideration (§91) as to whether contempt proceedings were proportional and in the public interest (§92). In light of Chu’s delay for 20 months after the event to complain to the police, and 23 months after the event to commence civil contempt proceedings (§93), DHCJ Saunders found that “in the context of these proceedings, and the whole of the litigation between the parties, this satellite litigation bears all the hallmarks of a party who is trying to divert attention of the other side from the real issues at stake” (§94), and the public interest would not be served to pursue the matter now (§§95-96).

VII.  APPEAL PROCEEDINGS

55.  Chu’s grounds of appeal challenged the deliberations/ conclusions in the Saunders Decision. In particular,

(a)

It was said DHCJ Saunders erred in finding nothing turned on whether PB Cayman was a commercial manager or commercial agent / in-house broker. After the Defts obtained the Injunction against Chu, one of the paragraphs discharged at the inter partes hearing was that Chu (and Joint Silver as the registered owner of the Vessel) must not “[prohibit], obstruct, interfere with or otherwise disrupt [PB Cayman] from giving instructions or directions to the Master of the vessel or making all necessary or incidental arrangements to carry, discharge, deliver and/or release the cargo on board the vessel at that time”, but for the Defts to obtain this paragraph of the ExP Injunction, it was imperative for them to establish they were entitled to manage the Vessel.

(b)

It was also said DHCJ Saunders erred in finding the essence of the defence to certain allegations in the Amended Statement of Claim in the Underlying Action related to PB Cayman’s entitlement to retain funds earned by the Vessel and consequently nothing turned on whether PB Cayman was the commercial manager or commercial agent / in-house broker for the Vessel. Chu claimed that since the Amended Defence denied PB Cayman had any entitlement to manage and control the Vessel, whether or not PB Cayman was the commercial manager rather than commercial agent / in-house broker would be an essential part of Defts’ pleaded case.

56.  The Defts by their Respondents’ Notices suggested DHCJ Saunders erred in (a) holding it was not necessary for Chu to first obtain the consent/approval of the Secretary for Justice before commencing the Committal Proceedings and thus going on to hold there was no material non-disclosure in respect of Chu’s locus to apply for committal without such consent, (b) in finding Chu had established an arguable case for criminal contempt, and (c) in holding that once a good arguable cause of contempt was established leave might be granted.

57.  Relevant extracts of the transcript of the Appeal Hearing before the CA on 25 July 2018 (“Transcript”) are set out in the annexure to this Decision (“Annexure”), and the particular extracts as numbered in the Annexure are identified as “A/x”. What was evident from the Transcript was that despite reinstating leave for Chu to commence contempt proceedings against the Defts, the CA left the conduct of the Committal Proceedings to the case management discretion of the judge in the Court of First Instance (“CFI”).

VIII.  DEFTs’ EVIDENCE FOR THE SUMMONS

58.  Lau claimed he was the director of PB Cayman and was duly authorised by the Defts to make the Lau 1^st Aff in support of the Summons, and Lau understood from Yan who was not a party to the Summons that he was supportive of the Summons for the reasons detailed in the Lau 1^st Aff.

59.  The Lau 1^st Aff noted Chu’s contention that the evidence put forward to support the ExP Injunction, which included the doctored Emails, had already been ventilated, and the Yee Decision had determined the matter should be dealt with at the trial of the Underlying Action:

(a)	after the ExP Injunction was granted, Chu sought its discharge;
(b)	at least 1 of the grounds Chu relied for discharge of the ExP Injunction was the doctored Emails, and by the XXN Summons Chu sought to cross-examine Yan/Sun in relation to the doctored Emails;
(c)	the Yee Decision held inter alia that as a matter of proper case management, the Discharge Summons should be dealt with at the same time as the trial and not immediately.

60.  Lau contended notwithstanding the Yee Decision (which was a case management decision) held that the issue of the Emails should be dealt with at the trial of the Underlying Action, Chu “sought to raise the issue of the “Dubious Emails” in yet another forum, ie, by commencing the present Committal Proceedings”. By referring to the Setting Aside / Dismissal Summonses and the Saunders Decision, Lau noted that consistent with the reasoning in the Yee Decision, DHCJ Saunders opined inter alia that:

(a)	it was not in the public interest for Chu to pursue the Committal Proceedings (being satellite litigation of the Underlying Action that bore all the hallmarks of a party who was trying to divert the attention of the other side from the real issues at stake) now;
(b)	it would be out of proportion and inappropriate to apply the resources of the court to resolve an issue that would probably be resolved in the course of the trial of the Underlying Action in any event.

61.  Lau noted Chu appealed against the Setting Aside / Dismissal Orders and Costs Order, which appeals were heard by CA on 25 July 2018 (see paragraph 8-10 above). The CA granted the CA Order at the Appeal Hearing, but had yet to provide its Written Reasons (see paragraphs 10 and 16 above), so the Defts obtained a copy of the Transcript that showed the discourse between bar and bench at the Appeal Hearing that Lau claimed was of relevance.

62.  Lau stated that in light of the oral CA Order made at the Appeal Hearing that the Setting Aside / Dismissal Orders be overturned and that the Committal Proceedings be reinstated, Mr Wong SC for the Defts immediately indicated the Defts’ intention to seek leave to appeal against the CA Order to the CFA, so the CA granted time extension of 28 days after receipt of its Written Reasons for the Defts to do so. Lau claimed that since the CA Order there were correspondence between the Defts’ solicitors and Chu’s solicitors showing that the former wrote to the latter to propose case management directions for the Committal Proceedings and to vacate the hearing on 5 November 2018, but Chu’s solicitors insisted to have the Committal Proceedings heard on such day with suggestion for tight timetable for the filing of evidence. On 12 October 2018, the Defts’ solicitors also wrote to the CA seeking expedition of the Written Reasons for proper submissions to be made on further case management of the Committal Proceedings, but there was no response at the time of the Lau 1^st Aff.

63.  Lau claimed that even though the Defts could not formulate their intended appeal against the CA Order or make formal application for leave to appeal to the CFA without the CA’s Written Reasons, the Defts considered there were potential questions of great general public importance in their intended appeal as outlined in the letter dated 18 September 2018 by the Defts’ solicitors to Chu’s solicitors. Further, given the potentially very serious consequences of the Committal Proceedings, Defts believed it would be most unfair/unjust to allow Chu to proceed with the Committal Proceedings when the CA had not yet delivered its Written Reasons and when the Defts would likely pursue an appeal against the CA Order, which if successful would mean the Committal Proceedings should never have begun in the first place. Lau could not see prejudice to Chu if the Committal Proceedings were stayed pending the outcome of the Defts’ intended appeal as there was simply no urgency for Chu to proceed with the Committal Proceedings apart from trying to seek a litigation advantage by putting undue pressure on Lau and other plaintiffs in the Underlying Action.

64.  Lau explained that the Defts sought (at the very least) for the Committal Proceedings to be put on hold until after the issue of leave to commence such proceedings were finally determined, and went further to say as follows:

“…… as a matter of proper case management (especially given the intimations of Cheung JA as quoted above), the Committal Proceedings should in any event be adjourned to be dealt with only after Trial. In this regard, [the Defts] would humbly request the Court to consider either adjourning the Committal Proceedings to the Trial for [the Underlying Action], or alternatively, to adjourn the same to be case managed by the trial judge of [the Underlying Action], who would be best placed to make any case management decision given his familiarity with the facts and the impact of the Committal Proceedings upon the Trial.”

65.  The Lau 2^nd Aff gave an update of the Underlying Action, but such update had been overtaken by events as the Underlying Action had been set down for Trial in April 2021.

IX.  CHU’s EVIDENCE FOR SUMMONS

66.  In the Chu 3^rd Aff, Chu could not understand why Yan was left to represent himself and not by the same solicitors as the Defts when Yan was still an employee within Lau’s group of companies, and why Lau (who filed an affirmation for the Setting Aside / Dismissal Summons and who was not a party to the Committal Proceedings) and not Sun/Yan against whom the contempt allegations were primarily made gave affirmations in support of the Summons. Chu suggested these went to show Lau was the mastermind who could practically dictate what others would need to say or dare to say in their affirmations.[9]

67.  Chu claimed Joint Silver was the Vessel owner whereas PB Cayman was the commercial agent / in-house chartering broker. Chu explained the chartering chain was Joint Silver as head owner, PB Cayman as charterer and outside party as head charterer. The business transactions between PB Cayman and charterers were normally time charter[10] or voyage charter.[11] PB Cayman would charge 1.25% commission from Vessel rental received from the head charterer and the balance would go to Joint Silver. Chu claimed that the purpose in setting up PB Cayman to act as outright charterparty operator was to shield Joint Silver as the owner of the Vessel from any business risk, or to put it in another way, PB Cayman only acted as vehicle for a contractual relationship with third party traders/charterers so as to take up liability to those entities should there be any major mishap in the charter business.

68.  Chu claimed he was the sole director of PB Cayman since January 2008, and Chang was added as a director in or about October 2011, but after Lau became the sole director of PB Cayman’s immediate holding company Smartplace Limited, Lau removed Chu as director of PB Cayman in/about June 2014. Chu also came to know around that time he was removed as an authorised signatory of PB Cayman, so in November 2014 Chu via his wholly owned company Trenus Oceanway Limited petitioned for equitable winding up of Smartplace Limited in HCCW352/2014, which proceedings were still ongoing. Chu considered the Underlying Action commenced shortly after the presentation of such winding up petition as retaliation and/or response thereto. PB Cayman later stopped paying charter fees to Joint Silver which led to a shortage of liquid cash.  Chu claimed that PB Cayman still failed/refused to do so despite demands, so Joint Silver issued a termination notice on PB Cayman in/about November 2014.

69.  Chu claimed Joint Silver then exercised a Lien on the cargo on board the Vessel to protect its interest and to obtain the freight due to it. The plaintiffs in the Underlying Action applied for and obtained the ExP Injunction (see paragraph 1 above), but upon PB Cayman’s undertaking to pay the entire freight into court, Chu and Joint Silver no longer exercised their Lien over the cargo on the Vessel which were then unloaded (see paragraphs 1 and 29 above).

70.  At the time, the Vessel was pledged to Credit Suisse AG by Joint Silver with PB Cayman as guarantor (“Vessel Finance Arrangement”).  Chu claimed that following commencement of the Underlying Action (being an event of default under the Vessel Finance Arrangement) and shortage of funds brought about by PB Cayman’s default, the Vessel was eventually forced sold by Credit Suisse AG, and Joint Silver was wound up by Lau’s controlled companies as explained below (see paragraph 29 above).

71.  Chu claimed Joint Silver was wholly held by Central Shipping which was indirectly owned by Chu and Lau as equal 40% shareholder and one Fortune Bright Limited (“Fortune Bright”),[12] but Lau had the control of the boards of Joint Silver and Fortune Bright through Sun and Chang.  Soon after revelation of the fabricated Emails, Lau, Sun and Chang procured Fortune Bright to wind up Central Shipping by appointment of a provisional liquidator in/about late April 2015. Such provisional liquidator succeeded in voluntary winding up of Joint Silver in/about early May 2015. Chu believed such liquidations / winding ups were clear attempts to take control of Joint Silver to deter Chu’s investigation into the fabricated Emails. Chu noted Sun did not even deal with the issue of the fabricated Emails in Sun 2 dated 13 May 2015, so on 18 May 2015 Chu’s solicitors sent the Letter to the solicitors for the plaintiffs in the Underlying Action to remind that Sun should deal specifically with the point raised. On 26 May 2015, the solicitors for the plaintiffs in the Underlying Action replied to say their clients had dealt with the point to which Chu’s solicitors replied on the same day to disagree.

72.  Chu claimed that with the benefit of hindsight the Underlying Action together with the application for the Injunction were part and parcel of Lau’s scheme to purportedly create a false impression that Chu and Lau had completely split up their business ventures to bolster Lau’s stance that there was in fact a “restructuring agreement” that had been finalised between him and Chu, which stance Lau later used to purportedly justify his acts of changing directors of various companies, removing Chu as authorised signatory of bank accounts, and misappropriating funds from bank accounts leading to closure of such accounts. But Lau was never really interested in nor serious about furthering negotiations and reaching agreement on the details, scope and timeline of the restructuring exercise, and there was never any agreement in respect of the purported restructuring.[13] In order to further such scheme, Lau and his camp went so far as to falsify the original Email dated 20 October 2014 from Chang to Yan that contained the terms of the charterparty between Joint Silver and PB Cayman by adding a new item, ie “management fee”.[14] Chu claimed that the words “-5.00PCT ADDCOM” at the bottom of the original Email meant deduction of 5% of the address commission being a fee paid by the vessel owner to shipbrokers or charterers.[15] Instead of the words “-5.00PCT ADDCOM”, “-3.75PCT ADDCOM + 1.25PCT MANAGEMENT FEE” appeared near the bottom of the fabricated Email. Chu explained such alteration purportedly supported the case of the plaintiffs in the Underlying Action that there was alleged provision of “Management Fee” under the alleged oral “Second Agreement” as pleaded in the Amended Statement of Claim in the Underlying Action, which in turn could purportedly support their pleaded case that:

(a)	PB Cayman was the Vessel’s commercial manager;
(b)	PB Cayman was entitled to the Management Fee at 1.25% of the freights or hires received on the Vessel;
(c)	PB Cayman would be entitled to manage/control the Vessel, to seek/negotiate employment for the Vessel, to conclude charterparties or other contracts relating to the employment of the Vessel, to arrange for commercial operation of the Vessel, and to collect all or any sums relating to the commercial operation of the Vessel;
(d)	PB Cayman would be entitled to retain/utilise all the sums so collected to (i) defray all outgoings/expenses incidental to the commercial operations of the Vessel including crew, management and insurance costs, (ii) settle the Management Fee, (iii) make full repayment of principal and interests owing to Credit Suisse AG under the Vessel Finance Arrangement, and (iv) hold the balance for Joint Silver on account of further expenses/liabilities in relation to the Vessel.

73.  Chu claimed that a main area of contention was whether PB Cayman was entitled to manage/control the Vessel as if it were the owner thereof. Joint Silver’s case was that PB Cayman was only a commercial agent / in-house broker, which Chu claimed was the very reason why the Committal Proceedings (being one of many legal actions between Chu and Lau following breakdown of their business relationship in 2014) came into being, ie Lau’s camp wanted to control the operation of the Vessel and stop Joint Silver as owner from doing so.[16]

74.  Chu noted the Lau 1^st Aff did not put forward a contrary stance to his contention that the evidence in support of the application for the ExP Injunction included the Emails, and in fact it admitted the fabricated Emails were placed before the court for such purpose. Chu raised a number of criticisms of the Lau 1^st Aff:

(a)	Chu questioned why the Lau 1st Aff referred to Chu’s allegation that “[“we”] have committed contempt of Court”, which suggested Lau did play a part in those acts.[17]
(b)	Chu said it was incorrect/misleading for Lau to say Chu had already “ventilated” his concerns and the court had determined that the “matter” should be dealt with at the Trial of the Underlying Action because the issue he put before the court and which was determined by the Yee Decision was the timing of cross-examination of Sun/ Yan, and not the contempt to which the Committal Proceedings related.[18]
(c)	Although the Lau 1st Aff claimed Chu sought to raise in a different forum the issue of the Emails, such Emails were in fact admitted to have been fabricated, and the contempt by Defts/Yan was a separate issue to that raised in the Underlying Action and must be dealt with in separate proceedings.[19] Chu claimed that references in the Lau 1st Aff to the overturned Saunders Decision had no relevance to the Defts’ application.
(d)	Chu claimed Lau’s references to the Transcript showed the Defts’ propensity for selective quoting out of context. In fact, references to the exchanges between the bar and the bench during the Appeal Hearing maintained the timing of the hearing of the Committal Proceedings was a matter of case management for the judge concerned, hence references to the Transcript were neither here nor there since the Committal Proceedings were completely separate to the issues raised in the Underlying Action and could/should be heard independently irrespective of the Trial in the Underlying Action.[20]
(e)	Chu found the Defts’ desire to appeal against the CA Order even before they had a chance of examining the Written Reasons and hence the merits of an appeal was to delay the hearing of the Committal Proceedings for as much time as possible.[21] Chu was unclear why the Defts did not want to have their day in court to clear their names by giving oral evidence on the issue and to have their evidence tested under cross-examination when they had already gone on oath to state they had no involvement, and when Yan 1 had admitted Yan “prepared a further set of fixture emails” between PB Cayman and Joint Silver correcting references to include both address commission (in favour of the third party charterer) and the Management Fee (chargeable by PB Cayman) for all fixtures of the Vessel.[22]

75.  Both the Lau 2^nd Aff and Chu 3^rd Aff canvassed the issue of delay in the Underlying Action, but by now such complaints by both parties were less significant since the Underlying Action had been set down for trial.

76.  Chu did not think that the interests of justice would be served by having the Committal Proceedings heard after the Trial of the Underlying Action. Although the Underlying Action had been set down for 11 days’ trial to commence in April 2021, Chu stated there was no guarantee that Sun, Yan and Chang would give evidence at such trial, which possibility was alluded to in the Yee Decision (see footnote 1 above). So the possibility of Sun/Yan giving evidence in the Underlying Action could not be justification for delaying the hearing of the Committal Proceedings.[23] Further, Chu did not see any reason why the distinct issue of contempt could not be dealt with before the Trial of the Underlying Action.

77.  Chu claimed the issues in the Underlying Action were quite simple, and the crux was the assertion by the Defts/Lau that PB Cayman was appointed as the manager of the Vessel and, importantly, as guarantor of the Vessel Finance Arrangement, and hence it was entitled to remain as manager until the facility was fully repaid in 10 years, so damages (to be assessed by reference to expert evidence) would be payable to PB Cayman. But Chu reminded there was no dispute under the arrangement between Joint Silver and PB Cayman that PB Cayman was entitled to 1.25% of the gross hire or freight earned by Joint Silver, so whether PB Cayman was called a manager or agent was not in issue. Rather, it was Joint Silver’s right to terminate that arrangement which was in question, and such issue would be determined according to who was to be believed at the Trial in relation to the oral agreement to which Chu was alleged to have been a party (but Chu denied) pursuant to which PB Cayman was appointed either as manager or, as Chu maintained, as commercial agent / in-house chartering broker.

78.  Chu claimed the fabricated Emails had great significance in the context of the Injunction,[24] which was why they were fabricated. The Defts / Lau attempted to obtain control of the Vessel and at that time maintained they as managers were entitled to that control, but Chu persuaded the court otherwise and the offending part of the Injunction was set aside.

79.  Accordingly, Chu considered there was no overlap whatsoever between the triable issues in the Underlying Action and the Committal Proceedings,[25] and there was no reason why the hearing of the Committal Proceedings should not proceed independently of the Underlying Action, and the interests of justice would be served by the Committal Proceedings being heard in a timely fashion.[26]

80.  Further, the fabricated Emails were exhibited in Sun 1 which was filed on 17 December 2014 and which was said to have been prepared by the Defts’ solicitors. At this stage, it was still not clear to Chu as to what part, if any, the Defts’ solicitors might have played in respect of the fabricated Emails which might come out through cross-examination of the witnesses/Defts. Chu’s legal team had not ruled out the possibility of subpoenaing the relevant person(s) from the Defts’ solicitors in the Committal Proceedings and/or in the Underlying Action.[27] So, it could be anticipated that the interested parties, including witnesses, to the Committal Proceedings would be different from those in the Underlying Action.[28] Chu claimed there was no merit/logic in the argument that the Committal Proceedings should be heard after the conclusion of the Underlying Action.

X.  LEGAL PRINCIPLES

81.  As regards the legal principles applicable for a case management stay, Mr Wong SC referred me 廈門新景地集團有限公司 v Eton Properties Ltd & ors,[29] which concerned an intended appeal to the CFA. The application for leave to appeal in that case had been heard by the CA, and whilst judgment was still pending, the plaintiff wished to proceed with the assessment of damages and to fix a case management conference. The defendants applied for the proceedings to be stayed until the final determination of their application for leave to appeal to the CFA from the CA’s judgment, and if leave to appeal were granted, until after the determination of the intended appeal to the CFA.

82.  Mimmie Chan J referred to the court’s wide power to stay proceedings under section 16(3) of the High Court Ordinance Cap 4 (“HCO”) and Order 1B rule 1(2)(e) of the RHC, or under the court’s inherent jurisdiction to control and regulate the conduct of proceedings before it (paragraphs 17-18 and 23), and approved the principles discussed in Poon Ka Man Jason (suing on behalf of himself and all other shareholders in Smart Wave Limited except the 1^st defendant) v Cheng Wai Tao & ors[30] and The Al Dhabiyyah[31] (paragraphs 24-27). In the end, whether or not to grant a stay of proceedings “is essentially a matter of sensible case management, to be decided with the objectives in mind of what is fair and just, as well as the other matters set out in Order 1A RHC as being the underlying objectives of the RHC (including the powers of management under Order 1B)” (paragraph 27), “taking into account what would serve the ends of justice between the parties and the administration of justice generally, whether a stay will cause injustice to the plaintiff, whether continuing the proceedings would be unjust, and that a plaintiff commencing proceedings as of right should not be deprived of the right to continue those proceedings in the absence of very good reasons” (paragraph 28).

83.  On the facts of that case, the learned judge noted the plaintiff was partly to blame for the delay (paragraph 31), and the CA’s judgment should be handed down in the near future, so any further application to the CFA for leave to appeal should leave be declined by the CA would not cause undue or prejudicial delay (paragraph 33). Bearing in mind the complexity of the further proceedings for the assessment of damages in that case, the substantial costs/time likely to be incurred before any hearing for assessment (which was unlikely to be within the next 10-12 months), the underlying objectives of increasing cost effectiveness of proceedings, promoting procedural economy and ensuring the resources of the court would be fairly distributed, and the possibility that substantial costs and the court’s valuable time in relation to the ongoing proceedings before the CFI would be wasted in case the CFA overturned the CA’s judgment (if such judgment was against the defendants and if leave was granted for appeal to the CFA) (paragraphs 37 and 41), an interim stay was granted for 6 months pending the determination of the application for leave to appeal to the CFA.

84.  But 廈門新景地集團有限公司 is not concerned with contempt proceedings, and the CA’s judgment in that case was not concerned with an appeal against setting aside leave to progress contempt proceedings. Rather, the CA had heard the appeal against the substantive first instance decision inter alia that the plaintiff was entitled to damages for loss of bargain to be assessed, and the CA had rendered reasoned decision. Also, that case had gone further in that the CA had already heard the defendants’ application for leave to appeal to the CFA even though it had yet to render its decision.

85.  Mr Whitehead SC submitted that committal applications should be dealt with swiftly and decisively. The English Court of Appeal in Barnet London Borough Council v Hurst considered the concurrent jurisdictions of civil contempt proceedings and substantive criminal proceedings as follows:[32]

“33. …… From these authorities the following principles can be derived. (1) The jurisdiction of the court when exercising its jurisdiction in contempt proceedings is quite separate from any criminal proceedings which may be brought in the criminal courts, notwithstanding that it may rise out of the same set of factual circumstances. (2) It is founded on an inherent power which derives from the jurisdiction of the court to enforce its orders. (3) It is important that contempt proceedings should be dealt with swiftly and decisively. (4) On the other hand a court has a discretion to adjourn contempt proceedings pending the outcome of other proceedings, but only where it is satisfied that there would otherwise be a real risk of prejudice which might lead to injustice.”

Mr Whitehead SC argued the above principle (3) reflected the object of committal proceedings, which is the protection of the administration of justice.[33]

86.  But Mr Wong SC sought to distinguish the above authorities by saying they are all related to cases involving breach of court/injunction orders. Mr Wong SC acknowledged there is an understandable need to progress contempt proceedings in those cases swiftly to serve the purpose of, say, assisting the injunction holder to protect his private interests.

87.  Whilst I agree Barnet London Borough Council concerned breach of undertaking to the court not to commit anti-social behaviour (page 723) and M v M (Contempt: Committal)[34] cited by Brooke LJ (pages 728-729) emphasised “breaches of orders should ordinarily be dealt with ‘swiftly and effectively’ ……”, I find the legal principles summarised by Lord Bingham LCJ in M v M[35] do not appear to be as rigid as Mr Wong SC would have this court accept:

“The first is that there is no absolute rule that civil proceedings (including contempt proceedings) should not proceed when criminal proceedings are pending. The second is that there is a general rule that contempt proceedings should be dealt with ‘swiftly and decisively’ (per Stephen Brown LJ (as he then was) in Szczepanski at 469). The third principle is that the test as to whether or not contempt proceedings should proceed in advance of criminal proceedings is whether there is a real risk of serious prejudice leading to injustice if the contempt proceedings go ahead. That is a summary of what was said by Neill LJ in H v C [[1993] 1 FLR] at 789. If the answer is that there is no real risk of serious prejudice leading to injustice if the contempt proceedings go ahead, then in the ordinary way the contempt proceedings should go ahead. If, on the other hand, there is judged to be a real risk of serious prejudice leading to injustice if the contempt proceedings go ahead, the court may properly stay the contempt proceedings and would ordinarily do so.” (my emphasis)

From the above, a key consideration for departing from the general rule that contempt proceedings should be dealt with “swiftly and decisively” appears to be whether or not there is a real risk that serious prejudice will be caused by proceeding with the contempt proceedings, but I accept there are also other case management considerations as highlighted by Mimmie Chan J in 廈門新景地集團有限公司 (see paragraphs 82-83 above).

88.  Mr Wong SC referred to JSC BTA Bank v Ereshchenko[36] where allegations of contempt of court on which the committal application was based centred on allegedly false evidence, ie allegedly untrue things said by Mr Ereshchenko in witness statements and affidavits made pursuant to disclosure orders (paragraphs 2-3). The bank contended Mr Ereshchenko’s statements to the effect that he knew nothing about certain transactions could not have been made honestly (paragraphs 9-10), and considered he knew more about what happened to a large sum of money out of the proceeds of such transactions which was unaccounted for and which the bank had not been able to trace, so the bank pursued the contempt application in the hope that, if faced with an order for committal to prison, he would at last disclose what he did know about what happened to that money (paragraph 5). The bank was also concerned Mr Ereshchenko had little means and might be judgment-proof in the substantive proceedings (paragraph 73). By the time of the hearing it was no longer alleged that Mr Ereshchenko was still in continuing breach of the disclosure orders (paragraph 5). The first instance judge dismissed the contempt proceedings as the evidence before him failed to prove beyond reasonable doubt Mr Ereshchenko lied (paragraph 33). The English Court of Appeal then dismissed the bank’s appeal.

89.  It must be noted that the parties in that case agreed for the committal application to be dealt with in advance of the trial in the substantive proceedings,[37] so Elias LJ’s observations at paragraph 68 were obiter. The learned judge considered that for reasons given by Beatson LJ,

“…… where the party initiating contempt proceedings has also brought substantive proceedings against the same defendant, it should only be in exceptional cases that the court should allow the contempt action to be heard ahead of the trial. This is particularly so where, as here, the resolution of the contempt charge depends upon a consideration of evidence which can be more appropriately assessed in the light of full disclosure at trial.”

Beatson LJ then observed also on obiter basis as follows:

“71. Where proceedings for criminal contempt are instituted by the person who has also brought substantive proceedings against the defendant, it is important for the applicant and for the court to keep in mind (see Malgar Ltd v RE Leach (Engineering) Ltd [1999] EWHC 843 (Ch), [2000] FSR 393) that the allegation is of a public wrong, and its primary purpose should not be to vindicate a private right. The circumstances of this case show how, despite this, the private interests of the applicant can assume or at least appear to assume primary importance.”

It was said that case highlighted the risk of using valuable/scarce court time on satellite litigation. The hearing of the contempt proceedings occupied 10 days with additional time required for preparation of the judgment, but the issue before the judge was not fully resolved given the then state of the evidence (paragraph 72).

90.  Nonetheless, Beatson LJ accepted that when permission was granted for the bank to pursue the contempt proceedings “it was legitimate at that stage for a judge to regard the Bank’s private aim of tracking down the missing millions as mirroring the public interest in maintaining the court’s authority that is necessary for criminal contempt proceedings”[38] (paragraph 74), and the public interest presented through the prism of the bank’s private interests[39] was ventilated at the hearing of the contempt proceedings before the first instance judge. But on the basis of the judge’s conclusion that Mr Ereshchenko was not guilty of criminal contempt, Beatson LJ said it was incumbent on the bank to re-assess at that stage whether its legitimate private aim still mirrored the public interest in continuing with the committal proceedings or whether by then its primary purpose was merely to vindicate its private right. Beatson LJ concluded that by that stage it could no longer be said the 2 interests mirrored each other, and it was ill-judged for the bank to pursue an appeal (paragraph 76).

91.  Mr Wong SC suggested the Ereshchenko case supported the proposition that the court will allow contempt proceedings (especially ones based on false evidence rather than on breach of court/injunction order) to be heard in advance of trial only in exceptional cases. But this was an obiter observation as the parties agreed to have the contempt application heard before the trial in the substantive dispute. In any event, such contempt application failed due to insufficiency of evidence, and it was in such context that Elias LJ considered the contempt application should be heard after the trial in the substantive dispute, particularly “where, as here, the resolution of the contempt charge” (my emphasis) depended on full disclosure to be obtained at such trial. Still further, I note Beatson LJ at the very least recognised that the contempt proceedings were justified because the public and private interests mirrored each other at the first instance stage. It was at the appeal stage that had re-assessment been made in respect of the failed contempt application, it would have been apparent to the bank it was no longer legitimate to pursue the contempt application by way of appeal because by then the primary purpose was to serve private right rather than public interest.

92.  In any event, Hamblen J in JSC Bank of Moscow v Kekhman & ors summarised as follows:[40]

“[20] It is submitted on behalf of Mr Kekhman that the Ereshchenko case represents a development from the principles stated in the Ablyazov case and that it is now only in exceptional cases that the court will allow a contempt action to be heard ahead of the trial. Although Elias LJ does refer to exceptional cases, there was no suggestion in the Ereshchenko case that the approach of the Court of Appeal in the Ablyazov case, in which it was stated that it all depends on the facts of the particular case, was in any way wrong. However, it is right to recognise the need for caution and the reasons for that need for caution, which are explained at some length in Beatson’s LJ judgment, with which Elias LJ agreed. I therefore accept that the court has to be careful if it is to take the course of having a committal application in advance of a trial.” (my emphasis)

I take note of the admonition by Hamblen J to be cautious, but in my view, the decision whether to have contempt proceedings determined before or after the main trial must be a case management decision that turns on the facts of the particular case, and a key (albeit not only) consideration is whether there is real risk of serious prejudice leading to injustice if the contempt proceedings are not deferred until after the trial in the substantive action.

93.  The Kekhman case concerned committal proceedings by the bank against Mr Kekhman for breaches of a worldwide freezing order. About 2 weeks before the substantive hearing, Mr Kekhman applied to adjourn the committal hearing until trial, if there be a trial, of proceedings in the Commercial Court which the bank indicated it wished to bring against him and other defendants for fraud and conspiracy on the basis that (a) there was significant overlap between the issues in the committal proceedings and the issues in any Commercial Court proceedings, (b) there was an incomplete documentary record and it would not be fair to allow the committal application to go ahead in those circumstances, (c) Mr Kekhman wished to have more witnesses, and (d) there was no real prejudice to the claimants. On the other hand, the claimants submitted the application was made far too late, there was no good reason for the delay, and there was no good basis for the application.

94.  As alluded above, Hamblen J discussed the Ereshchenko case and also relied on JSC BTA Bank v Ablyazov (No 7),[41] which concerned breach of freezing orders. In the latter case, the Commercial Court ordered a committal hearing to proceed in advance of the trial, which decision was upheld by the English Court of Appeal. Hamblen J noted that in the Ablyazov case, Gross LJ (who gave the judgment of the English Court of Appeal) “recognised the fact of overlap between the issues which may arise on a committal contempt application and a subsequent trial is an important consideration, but it was not a matter which, in itself, necessitates the postponement of the contempt application. It all depends on the facts of the individual case” (my emphasis) (paragraph 15 of the Kekhman case). On this, Gross LJ said as follows:

“39. Our attention was drawn in argument to the following passage, taken from the judgment of Moore-Bick LJ in KJM Superbikes Ltd v Hinton [2009] 1 WLR 2406, para 18:

‘Paragraph 28.3 of the Practice Direction supplementing Part 32 directs that the applicant to consider whether proceedings for contempt would further the overriding objective and that is a matter which the court itself should plainly have in mind. It is important not to allow satellite litigation of this kind to disrupt the progress of the substantive proceedings and it may not be possible to assess the strength of the complaint until those proceedings have concluded. This danger was well described by David Richards J in Daltel Europe Ltd v Makki [2005] EWHC 749 (Ch) at [80] as follows: ‘Allegations that statements of case and witness statements contain deliberately false statements are by no means uncommon and, in a fair number of cases, the allegations are well founded. If parties thought that they could gain an advantage by singling out these statements and making them the subject of a committal application, the usual process of litigation would be seriously disrupted. In general the proper time for determining the truth or falsity of these statements is at trial, when all the relevant issues of fact are before the court and the statements can be considered against the totality of the evidence. Further, the court will then decide all the issues according the civil standard of proof and will not be applying the criminal standard to isolated issues, as must happen on an application under CPR r 32.14.’’

40. KJM Superbikes Ltd v Hinton was a case concerned with proceedings against a witness for contempt subsequent to a trial and arising out of evidence he had given in it. It was thus somewhat removed from the context of dealing with contempt arising from the alleged breach of a freezing order. None the less and with respect, these observations from Moore-Bick LJ (and David Richard J) helpfully highlight the dangers of satellite litigation and of carving out issues ahead of the trial of the action: see further, per David Richard J in Daltal Europe Ltd v Makki [2005] EWHC 749 (Ch) at [78]. Such concerns plainly require careful consideration generally; the present context is no exception.

41 Subject, however, to keeping this caution well in mind, whether allegations of contempt should be determined before, during or after the main trial must be very much a case management decision for the judge, on the facts of the individual case. Moreover, where the alleged contempt is said to relate to the breach of a freezing order, the public interest in ensuring the efficacy of such orders is likely to weigh heavily in the balance ……

42. Accordingly, as it seems to me, overlap, of itself and without more, does not necessitate postponing the determination of a contempt application until after the trial. It is, instead, a factor to be taken into account, the weight to be given to it – and the pointer, if any, it gives to the decision to be taken – must depend on the facts of the individual case.

……

47. What remains is the need to weigh the advantages and disadvantages of proceeding with these allegations in advance of the respective trials. This was pre-eminently a question for Teare J. For the reasons already set out, there is certainly no rule of law as to the timetable to be adopted; the matter is one for the judge’s case management discretion. The judge here plainly had well in mind the risk of overlap and of satellite litigation. He was not, however, deterred. In the Judgment, he decided in principle that the potential overlap of issues between the contempt application and the trial did not require postponing the contempt application until after the trial. In the ruling, he declined to interfere with the bank’s selection of the specific allegations for the contempt application – despite the arguments as to overlap developed in relation to those very allegations. He was not, it would see, much impressed by the argument as to other evidence which might be available at trial. If I may say so, it can be readily be understood why he was not; some of the witnesses to whom Mr Mathews referred face warrants of arrest if they come within the jurisdiction; a number of others, it would seem, could readily have assisted the defendant, if they indeed had assistance to offer. In all this, the judge had the benefit of his detailed grasp of this litigation. Ultimately, the decisive factor for the judge, as repeatedly emphasised on both the judgment (at paras 5 and 10) and the ruling was the importance of making the freezing order effective.

48. For my part, I think Teare J was right. It was of paramount importance here for the court to do and to be seen to be doing, all it could to ensure the efficacy of the freezing order. But it suffices that the judge was amply entitled to reach the conclusion he did. Accordingly, in my judgment, ground 2 fails and the appeal should be dismissed.” (my emphasis)

95.  In the Kekhman case, on the matter of the overlap of issues, there was no certainty there would indeed be proceedings in the United Kingdom. On the argument there was an incomplete documentary record, (a) it had not been shown on the evidence “the Cyprus documents” demonstrated a significant gap in the documentary record or in documents that were plainly inconsistent with the case of the bank on the committal application, (b) whether there was a secret file contained in a disk was in dispute, and (c) there was nothing to suggest disclosure of certain emails would reveal anything of real significance. The fact Mr Kekhman wanted to have more witnesses was not a reason itself for adjourning the application, and there would be significant prejudice to the bank if the 7-day hearing (when all other respects were “ready to go”) was derailed indefinitely because of Mr Kekhman’s late application in respect of which there was no good reason for the delay. The bank was not shown to have some improper or collateral motive in bringing and pursuing the committal application. Thus, it was not in the interests of justice for the committal application to be adjourned indefinitely.

96.  In my view, whilst it was a relevant consideration as canvassed in the Kekhman case that the contempt proceedings should go ahead to effectively enforce the freezing order, it was plain that the ultimate decision whether to allow the contempt proceedings to proceed before, during or after the main trial is a case management decision based on the facts of the individual case, and the overlap of issues (if any) and the risk of satellite litigation are factors to be taken into account, but their bearing on the ultimate case management decision will turn on the particular facts.

97.  Mr Whitehead SC noted the Ereshchenko, Ablyazov and Kekhman cases were subject to detailed analysis by B Chu J in Willwin Development (Asia) Company Limited v Wei Xing & ors.[42] In that case the 1^st plaintiff obtained an injunction order and an Anton Piller order, and the injunction order was subsequently amended. Attempts by the defendant to set aside such orders failed (paragraph 7). In the course of the trial in the underlying action, the 1^st plaintiff commenced contempt proceedings for breach of the injunction, and court declined to stay such proceedings pending completion of the trial (paragraphs 13-14, 21 and 101).

98.  B Chu J reiterated that contempt proceedings should be dealt with swiftly and decisively (paragraphs 28-33),[43] which principle she held is also applicable for considering whether contempt proceedings should proceed when civil rather than criminal proceedings are pending (paragraph 36). After discussing the Ereshchenko, Ablyazov and Kekhman cases, B Chu J noted the alleged contempt in the case before her was said “to relate to the continuing breach of the Injunction Order / Amended Injunction Order / Anton Piller Order, notwithstanding Ds’ efforts to discharge the orders had failed.  I am of the view that, similar to freezing orders, there is a public interest in ensuring the efficacy of such injunction orders and I propose to follow the approach of the English Court of Appeal in the Ablyazov case, as Hamblen J in the Kehkman case” (paragraphs 50-51).

99.  Mr Wong SC submitted (and I agree) there is no general rule that committal proceedings for contempt should be allowed to proceed in advance of the main trial in any underlying action. But likewise there is also no general rule that the committal proceedings for contempt have to be heard after the main trial. It is a case management decision that turns on the particular facts of the individual case.

100.  Whilst Mr Wong SC was also correct in saying the above authorities in relation to breach of injunction/court orders referred to the need to effectively police/enforce such orders as an important consideration in the exercise of case management discretion on whether or not to go ahead with the contempt proceedings, I do not accept proceeding with committal proceedings for contempt in advance of the main trial of the underlying action is necessarily limited to such circumstances, and/or that committal proceedings premised on false evidence/statements are necessarily non-urgent and so can/should be deferred until after the main trial of the underlying action.

101.  It must be remembered that similar to breach of injunction/ court orders, actions done by an individual which interfere or attempt to interfere with the course of justice are capable of constituting contempt of court, and contempt proceedings are public law proceedings based on allegation of public wrong and not private law proceedings based on private wrong. Permission to bring committal proceedings is granted when the court considers the public interest (rather than the furtherance of the private interest) requires such proceedings to brought. In cases of false statements/evidence, contempt proceedings serve the purpose of promoting the integrity of the legal process and respect for it in future, and drawing the attention of the legal profession and through it that of potential witnesses/deponents of the dangers of making false statements/affidavits and/or submitting forged or fabricated documents. The committal proceedings bring home the importance of honesty in making statements/affidavits and in adducing documents. This brings into play the need to protect the sanctity of the administration of justice,[44] which explains why contempt proceedings should generally be dealt with “swiftly and decisively”. But how speedily such proceedings should progress in each case is, according to Gross LJ in the Ablyazov case, “very much a case management decision for the judge, on the facts of the individual case”.

102.  Finally, on the general legal principles, I note Mr Whitehead SC referred to Hammerton v Hammerton, a family case in which the judge heard the father’s application for contact at the same time as a committal application against him for breach of undertaking not to threaten violence against or to intimidate, harass or pester the mother, or to encourage anyone else to do so, which was one of the procedural errors which the English Court of Appeal noted for setting aside the committal order. Further, the father was unrepresented, and the English Court of Appeal stated that had the judge asked for the reasons for the father’s lack of representation, the judge would have discovered that the withdrawal of the father’s legal aid was to be reviewed by the Legal Services Review panel in 2 weeks’ time, and once that information was available, there was no reason why the committal hearing should not have been adjourned until the legal representation issue had been resolved. It was in such context that Moses LJ said as follows:

“[17] The judge gave no reason why it was essential to hear both applications at the same time. He never explained why the committal proceedings were so urgent that they had to be heard at the same time. Yet a sense of urgency often impedes the fair conduct of committal proceedings. The courts have frequently, in such cases, explained the importance of time for reflection. This is no less true in family cases, inflamed, as they often are, with a high degree of tense emotion …… But the need to ‘take stock’ is a feature in all contempt cases, particularly in the criminal courts …… the need for immediate action may be, of course particularly important where the contempt consists of behaviour in front of the judge. Even in such cases a judge must consider whether it is necessary to deal with the allegations of contempt as a matter of urgency, or whether fairness demands an adjournment, in particular where the defendant is unrepresented.

……

[19] In so concluding, I appreciate that there will be cases, of which this case is an example, where the allegations of breaches of either an undertaking or a court order, are relevant to the contact proceedings. But it does not follow that it is necessary to hear the proceedings for committal at the same time. The important rights enshrined in Art 6 of the Convention [such as legal assistance when defending criminal charges] must not be sacrificed in the interests of time and costs. It may well be that, after adverse findings in contact proceedings, committal proceedings turn out to be unnecessary or, at the very least, a severe sanction might be avoided once the smoke of battle has drifted away. ……”

103.  In my view, the circumstances of Hammerton were quite distinguishable. Chu had no intention for the Committal Proceedings to be substantively heard at the same time as the Trial in the Underlying Action, and the Defts were all legally represented. The present situation was not one in which Chu rushed the Committal Proceedings into the Trial in the Underlying Action when the Defts were unrepresented. I am not persuaded this case would bring the matter beyond the principles discussed above.

XI.  DISCUSSION

104.  The Defts raised the following main grounds for seeking a stay of the Committal Proceedings:

(a)	The intended application for leave to appeal to the CFA against the CA Order that reinstated the Yee ExP Leave and the Committal Proceedings, if successful, would eliminate the basis for the Committal Proceedings. The stay of proceedings pending final determination of the Defts’ proposed appeal to the CFA (pending leave) against the CA Order (if granted) would, in any event, be short since leave applications would be decided quickly. But if no stay of proceedings was granted, and the Yee ExP leave was eventually set aside by the CFA, much time/costs would be wasted to the detriment of the parties, and wastage of the court’s resources must also be against public interest (especially when there was no urgency in relation to the Committal Proceedings – see (b) below – and particularly if the CFA would overturn the continued Committal Proceedings).
(b)	Chu could not identify any urgency for the Committal Proceedings to be determined in the short-term, especially when there had been delay by Chu in bringing on the Leave Proceedings.
(c)	The court should not allow the Committal Proceedings to be pursued when (i) there was overlap of issues between such satellite proceedings and the Underlying Action and (ii) when such proceedings would encroach on the Defts’ right to silence, so alternatively the Committal Proceedings should be stayed pending the Trial of the Underlying Action or for further case management by the trial judge in the Underlying Action to avoid multiplicity of proceedings.

(a)  Ground (a) – intended appeal to the CFA against the CA Order

105.  Mr Wong SC submitted the fact that the CA had not handed down the Written Reasons merely meant the time limit to apply for leave to appeal to the CFA had not expired, but such fact would not form a practical impediment towards this court acceding to the Summons. Mr Wong SC suggested there was no need for this court to be overly concerned with the merits when considering whether or not to grant a case management stay pending the intended appeal to the CFA as there would be a filtering process (ie leave to appeal) for this exercise, so (a) if the intended appeal was not meritorious, it would be dismissed in a relatively short period by way of such filtering process, but (b) if leave were granted for the intended appeal, this would be indication there was likely to be prima facie merit justifying a stay. On such basis, it was said to be unnecessary and/or inappropriate for this court to form any view on the merits. But even if the merits of the intended appeal were to be considered, Mr Wong SC argued it was quite clear there would be points of general and public importance in the present case (ie whether this contempt is civil or criminal contempt, whether consent of the Secretary for Justice had to be obtained, what should be the court’s approach in scrutinising the merits of the contempt at the stage of granting leave) that would require and await determination by the CA and/or the CFA, so there was no reason to start compiling evidence and/or fixing date to take the Committal Proceedings further.

106.  On the other hand, Mr Whitehead SC submitted that in the absence of the Written Reasons there were no material for this court to conclude the Defts had a viable basis to seek leave to appeal to the CFA, but this court should not lose sight of the fact that (a) the CA overturned the Saunders Decision and the Defts failed in the Appeal Proceedings that resulted in the reinstatement of the Yee ExP Leave and the Committal Proceedings, and (b) intimation of an intention to see leave to appeal to the CFA did not operate as stay of the CA Order (see Order 59 rule 13(1)(a) of the RHC). I agree that the matters in (a)-(b) above formed part of the relevant matrix for the exercise of discretion whether or not to grant the case management stay.

107.  But I disagree with Mr Whitehead SC’s suggestion that even if the Written Reasons were available and the Defts formulated draft grounds, it would have been impracticable for this court to hear the Summons for stay as it was for the CA and not this court to decide whether the draft grounds would meet the threshold for granting leave to appeal to the CFA, ie it was for the CA and not this court to order any stay of proceedings, but only if the CA would be satisfied the grounds had a reasonable prospect of success, otherwise it might lead to inconsistent decisions. In my view, and indeed it was common ground, that once the Yee ExP Leave and the Committal Proceedings were reinstated, then (as Mr McCoy SC submitted on behalf of Chu at the Appeal Hearing) the matter of when and how the Committal Proceedings should proceed would be a case management matter for the CFI. As explained in paragraph 82 above, section 16(3) of the HCO and Order 1B rule 1(2)(e) of the RHC give the CFI wide powers to stay proceedings. As Mimmie Chan J said in paragraph 16 of 廈門新景地集團有限公司, “I do not agree with the Plaintiff, that it is inappropriate for this Court to stay these proceedings by invoking s 16 (3) of the [HCO] or Order 1B rule 1 (2) (e) RHC, and that the Defendants can only apply to the [CA] or the CFA to stay execution of the CA Judgment and/or the 2017 Order” (see paragraph 81 above).

108.  But in the exercise of the wide discretion on whether or not to grant case management stay of the Committal Proceedings pending determination of the application for leave to appeal against the CA Order to the CFA or determination of the appeal (if leave were granted) to the CFA, I am not persuaded I should ignore the merits of such intended application altogether notwithstanding the absence of the Written Reasons. It was suggested that merits had a lesser role because the filtering process (ie leave to appeal) would be a quick exercise. But in my view, such contention in the present context (in contra-distinction to the situation in 廈門新景地集團有限公司 in which the intended appeal had proceeded much further – see paragraphs 81 and 84 above) is not true now, if it was ever true. The CA had yet to hand down its Written Reasons, and if application were made for leave to appeal to the CFA, the CA would have to hear and determine such application, and if the outcome were unfavourable to the Defts, the CFA would have to consider and determine the renewed application.

109.  Given that the primary basis of the Defts’ request for case management stay turned on the viability of the intended leave to appeal against the CA Order (that reinstated the Yee ExP Leave) to the CFA, it must be remembered that a decision to grant leave (or on appeal to reinstate leave) to commence committal proceedings is discretionary in nature, and it is trite that unless the judge(s) granting (or reinstating) leave are clearly wrong, or misapprehended the law and/or the facts, there is unlikely to be cogent basis to disturb the grant or reinstatement of such leave. Even though the Written Reasons were still not available, the sentiment of the CA that led to the CA Order was quite transparent from the Transcript, and indeed Mr Wong SC submitted that “[for] present purposes, the best guide to CA’s views may perhaps be the …… banter between Ds’ Counsel and the Bench” as shown in the Transcript:

(a)	At the Appeal Hearing, Cheung JA expressed concern that “the way the documents was doctored really is quite surprising. I mean, it’s not just simply some handwriting words but actual incorporation into the documents itself some parts which apparently were not there in the original document …… I mean, that – I think this is an extremely sensitive point. The court can only address the real issues between the parties in – with two documents.” (Transcript p 36O-S) As to Mr Wong SC’s submissions at the Appeal Hearing that this would go to the issue of Sun’s state of mind, Cheung JA pointed out the court was concerned with the leave application rather than whether the judgment would find or not find any contempt at the end of the day, which was a different matter. (Transcript p 37A-H)
(b)	Mr Wong SC argued insofar as the Defts were concerned, their position was that they were not aware of the so-called alteration or fabrication, but again Cheung JA pointed out at the Appeal Hearing that CA was concerned with “…… the threshold for leave of – so that the matter can be – can be fully examined” (Transcript 37S-28E). This point was highlighted in the following dialogue between the bar and the bench (Transcript p 38F-Q): “Cheung JA: “But, Mr Wong, I mean, at the end of the day, you may be right or you may be wrong, but, as for the leave stage, these are the prima facie evidence and, if you are talking about public interest, the prima facie public interest is that there has been interference with the administration of justice.” Mr Wong SC: “Now, my Lord, that’s the point I’m trying to make to your Lordship. That is, if you look at the ex parte application properly, those email doesn’t really take the case any further. It doesn’t really ......” Cheung JA: “It doesn’t really matter if you are talking about the threshold for granting leave ……” …… Cheung JA: “At the end of the day there may be explanations, all right but – for the purpose of whether committal should be made or not, but at this stage ……” Mr Wong SC: “Yes.” Cheung JA: “…… purely on a threshold basis, why should this matter not go to – not go forward?””
(c)	Again, in the following exchange between the bar and the bench, Cheung JA tried to have Mr Wong SC focus on the larger picture (Transcript pp 38D-44O): “Cheung JA: “You are still going into the nitty-gritties, Mr Wong. I’ve been trying to tell you there’s a larger picture involved in – with this ……” Mr Wong SC: “Yes.” Cheung JA: “…… with this sort of matter. Contemporaneous, un-doctored documents is the only means for the court to deal with the inherent probability of a case.” Mr Wong SC: “Yes. Well, I can’t quarrel with that proposition, but, of course, there would be an array of situation where the significance of that document would be different, and the point that I’m trying to make is that, as far as the significance of the documents in question in this particular case ……” Cheung JA: “Yes. Say what you can. I think there are far too many – far too many forged documents in court proceedings these days. There used to be false oral argument, false oral evidence, but it is all – now turn into false documentations.” Mr Wong SC: “Well, I can see your Lordship’s concern and I – again, I cannot quarrel with it, but the point I’m trying to make is that at the end of the day one has to look at the context.” Barma JA: “[……] but the fact is that documents were acquired. [……] we know that they appear to have been forged or tampered with by [Yan], but you say you – [the Defts] weren’t involved. That may not be something that can be decided but, prima facie at least, they put forward documents which they admit now to be false documents. And I think the question that my Lord Cheung JA is suggest – putting is that that’s just not on. How can the court possibly do its job, how can the system, work if people feel free to put forward false documents? May not have been thought to be critical, but it might have helped, it might have made a difference. Should we stand back and say, well, let’s examine in some detail what difference it might actually have made, or should we have a more robust view and say that this sort of behaviour is not to be condoned?” Mr Wong SC: “Well, my – I see where your Lordship is coming from. Now, my Lord, I think in this particular case the – there has already been an order adjourning the discharge summons which concerns the authenticity of these e-mails and the people’s involvement in it to the trial. My point is very simple. Let’s see what happen at the trial and then if ……” Barma JA: “But that – but that could be – that could be done by giving leave to commence contempt proceedings and for the contempt proceedings to go forward. You can then turn up at some point for a directions hearing about how this is to be progressed, and you will say, well, it should be dealt with until after the trial, and the judge will have to come to a view. Whoever is dealing with the contempt proceedings will have to come to a view as to what, as a matter of case management, the appropriate course to take is.” Mr Wong SC: “Well, but certainly a view has already been taken that – at least by DHCJ Kent Yee, [……] that matter should be dealt with at the trial with full discovery. So my suggestion is very simple: let’s see what happen.” …… Mr Wong SC: “But, as far as the other defendant is concerned, the judge may take the view that, okay, it’s – there are some dispute as to whether or not this defendant knew of the – those questionable e-mails, but, given that the finding that there was this commercial management agreement between the parties, there is really no point to incur additional judicial resources to pursue the contempt proceedings against these three other defendants.” Barma JA: “Well, that may be so, but then surely the answer is not to dismiss the contempt proceedings here now and to set aside the – and dismiss the proceedings, but to possibly adjourn – simply adjourn for further consideration of what should be done about the matter at a later stage.” …… Cheung JA: “I think in the normal course of events one would not like to interrupt the natural flow of a trial and in the normal course of events one would like to leave this sort of matters afterwards, to be dealt with afterwards.” Mr Wong SC: “Yes.” Cheung JA: “But I – we – I’m only speaking personally for myself and ultimately it’s a matter of decision for the judge who deals with the notice of appointment.””
(d)	There was similar exchange between the bar and the bench later on at the Appeal Hearing (Transcript p 57G-P): “Mr Wong SC: “[……] Just pausing here, I think, as rightly observed by either Barma JA or Cheung JA, normally this sort of contempt would happen after trial. Of course, I can imagine that if there are certain allegation which would not be dealt with at trial, then perhaps there is a reason for the court to give leave for that to be canvassed before trial. But that’s not the case here, because we have the discharge summons, which has been fixed to be heard at the same time as the trial and that discharge summons concerns the falsity of the e-mails in question and all those issues concerning the alteration of the e-mails would be looked into in that discharge summons, which would happen at the same time ……” Cheung JA: “It doesn’t mean that leave should be set aside at this stage. I mean, the beauty of the leave system is that we are only concerned with the prima facie case, with an arguable case. I mean, all your arguments on the fact that the [Defts] had no knowledge really goes to the – goes to the point when the actual contempt hearings are heard. There – I can see there are circumstances in which there – oral evidence may give – may be given in a contempt proceedings. M’m? So at this stage you are asking the court to in fact do a filtering process and say, “Based on – based on what Ms Sun said, she had no knowledge.” I mean, this cannot be right.””

110.  In short, the CA considered there was evidence before the court that the Emails/Invoice appeared to have been altered, and that arguably it flied against the public interest in upholding the sanctity of the administration of justice to have such altered documents put forward in litigation. In Barma JA’s succinct words, “that’s just not on”. Thus, there appeared to be sufficient prima facie evidence to meet the threshold for granting leave to proceed with the Committal Proceedings, and whether the Defts had any requisite knowledge or other viable explanation would be a matter for the Committal Proceedings proper and not a reason to stifle such proceedings by refusing leave.

111.  Given the contents of Sun 1-3 and Yan 1, it is difficult to disagree with the views taken by the CA in paragraphs 109-110 above, and Mr Wong SC had not put forward any convincing countervailing argument. Although Mr Wong SC suggested the issues referred to paragraph 105 above would be points of general and public importance, such points viewed at the abstract level paled in the relevant context as explained in paragraphs 109-110 above. Of course I could not speak for the CA, but I am not persuaded these points as presented to this court by the Defts appeared to distinctly points that would lead to leave being granted for appeal to the CFA.

112.  Given the CA unanimously allowed the appeal against the Saunders Decision and reinstated the Yee ExP Leave thereby restoring the Committal Proceedings, and in light of the above analysis and the absence of the Written Reasons, I find the Defts had not been able to suggest that any views expressed by the CA at the Appeal Hearing was so clearly wrong or showed that it had so misapprehended the facts or the law that there ought obviously to be a stay of the Committal Proceedings pending the outcome of any potential application for leave to appeal to the CFA. Mr Wong SC alluded to wastage of parties’ efforts and judicial resources in progressing the Committal Proceedings pending the Defts’ intended application for leave to appeal to the CFA against the CA Order, but such argument would not bring the matter further in light of my views over the Defts’ intended application.

(b)  Ground (b) – urgency

113.  Mr Wong SC submitted there was no urgency for the Committal Proceedings to proceed further, particularly in light of the intended appeal to the CFA. The Defts complained that Chu dragged his feet in commencing the Leave Proceedings in August 2016 (ie 20 months after the Emails were first exhibited) (see paragraph 8 of the Saunders Decision). But Yan 1 and Sun 3 (which Deft relied for the Leave Proceedings) were only filed on 29 January 2016 (see paragraphs 39 and 42 above). Chu filed the XXN Summons and his 5^th affirmation on 16 February 2016 (see paragraph 45 above). The XXN and Discharge Summonses were heard on 25 February 2016, and DHCJ Kent Yee handed down the Yee Decision on 30 May 2016. Taking into account the above developments and given the detailed scope of the Statement and supporting affirmation, I cannot say there was any inexplicable delay in commencing the Leave Proceedings in August 2016. In any event, notwithstanding any allegation of delay, leave to commence the Committal Proceedings was granted by DHCJ Kent Yee and reinstated by the CA Order.

114.  On the other hand, the Defts also had not been quick on their feet as well. On 15 July 2018 the CA orally granted the CA Order that reinstated the Committal Proceedings, and in a fortnight (ie on 2 August 2018) Chu promptly filed his Notice to Hear OS. Notwithstanding such immediate notice of Chu’s intention to proceed with the Committal Proceedings, the Defts did not take any step to stay the Committal proceedings until about 3 months later when they filed the Summons on 30 October 2018.[45] No explanation was given by the Defts for such delay, and it appeared from the letters dated 17 and 31 August 2018 by the Defts’ solicitors to Chu’s solicitors[46] that the Defts seemingly assumed there was or they were entitled to a stay due to their stated intention to seek leave to appeal to the CFA without having applied for a stay at that point.

115.  Although each case would turn on its own facts, the Kekhman case explained whether the stay application was made late and whether there was any good reason for such late application would be relevant considerations (page 95). It was also said in the Kekhman case that where, amongst other considerations, an application to stay proceedings is brought very late and without good reason for the delay, such stay should not be granted.

116.  Mr Wong SC tried to cast a sinister light on why Chu was keen to proceed with the Committal Proceedings, and asked the court to be circumspect/careful as to whether or not the contempt proceedings were being used as ill-motivated satellite proceedings to gain a litigation advantage by putting pressure on Lau and the other plaintiffs in the Underlying Action and/or to advance a questionable agenda. It was said such caution must be flagged in the present situation which was close to the Ereshchenko case. Mr Wong SC further submitted that whatever need there was to vindicate the public interest of ensuring the proper administration of justice, there was simply no element of urgency that would point to a private interest (like the need to render a court order/injunction effective) for tipping the balance in Chu’s favour to progress the Committal Proceedings. In this respect, Mr Wong SC also referred to the “banter” between himself and the bench at the Appeal Hearing (see A/1, 2 and 4) which made clear that, despite reinstating the Yee ExP Leave, the CA had not sought to overturn the observations by DHCJ Yee and DHCJ Saunders concerning case management and the inappropriateness for the Committal Proceedings to proceed prior to the Trial in the Underlying Action, and that Cheung JA endorsed such views.

117.  Taking the last point first, I am not persuaded the observations in the Yee and Saunders Decisions took the matter any further for the Defts. First, the Yee Decision concerned the dismissal of the XXN Summons and the adjournment of the Discharge Summons to the Trial of the Underlying Action. It was not concerned with the Committal Proceedings (which both Chu and the Defts were of the view should not be tried at the same time as the Trial) and/or whether to stay/progress such contempt proceedings. Indeed, when DHCJ Kent Yee handed down the Yee Decision, the Leave Proceedings were not even afoot (see paragraphs 3-4 above). Secondly, the observations in the Saunders Decision were necessarily obiter as the appeal from such decision was allowed under the CA Order. More importantly, as Mr Whitehead SC submitted, what shone through the “banter” between the bar and the bench referred to in the above paragraph was that the CA clearly understood that after the Yee ExP Leave was reinstated, whether to proceed with the Committal Proceedings would be strictly a case management matter to be determined by the CFI judge dealing with the Committal Proceedings (see Transcript page 31J-R and 44F-O, and paragraph 109(c) above).

118.  Further, I am unable to infer any sinister intent on the part of Chu in wishing to proceed with the Committal Proceedings. First, his decision to commence the Committal Proceedings against the Defts/Yan was vindicated by the CA Order that reinstated the Yee ExP Leave. Secondly, there was no dispute (and as evident from Yan 1) that the Emails had been altered, and the altered Emails were exhibited to Sun 1 as filed in the Underlying Action in support of the application for the ExP Injunction (although the Defts denied any awareness that the Emails had been altered). It was in the course of the Underlying Action that Chu learned the Emails appeared to be have been altered, and pressed the Defts/Yan for clarification, which eventually elicited the explanation in inter alia Yan 1 (whereby Yan admitted to alteration of the Emails) and Sun 3 (whereby Defts denied awareness of such alteration). In such circumstances, Chu who was served with Sun 1 that exhibited the Emails was on the back foot of such admittedly altered documents that were placed before the court in the course of the Underlying Action, and in such context I cannot see how Chu’s attempt to vindicate the perceived public wrong could be said to be an ill-motivated and questionable agenda.

119.  Mr Whitehead SC objected to the Defts’ attempt to trivialise the alleged contempts (see paragraph 109(c)-(d) above), which he submitted were far different from the situation, say, of a witness telling fibs in the course of giving evidence in the witness box. Here, Yan by Yan 1 confessed to having altered the Emails, which was reflected by the CA’s dismay in saying inter alia “that’s just not on” when reinstating the Yee ExP Leave.

120.  Although the present Committal Proceedings were not for policing or making effective injunction/court order, it was clear from the discussion in Part X above that the categories of contempt cases that should or could proceed before conclusion of the underlying proceedings are not closed, and much would turn on the particular facts. In the particular context of the Committal Proceedings, I am satisfied that the nature of the alleged contempt, the admitted alteration of the Emails and the actual submission of the altered Emails as evidence in civil proceedings provide strong prima facie basis of significant public wrong as to interference with the administration of justice, which should generally be dealt with swiftly and decisively. In my view, given that the Emails were altered in 2014, ie almost 6 year ago, it could not be said there was no prejudice to Chu if the Committal Proceedings was further stood over until after the application for leave to appeal against the CA Order to the CFA, or until determination of such appeal (if leave were granted), or pending the Trial in the Underlying Action in April 2021, ie 7 years after commencement of the Underlying Action.

(c)  Ground (c) – overlap of issues and right to silence

121.  Mr Wong SC raised the concern that (a) the overlap of issues between the Committal Proceedings on the one hand and the Trial and the hearing of the Discharge Summons in the Underlying Action on the other hand raised the danger of carving out issues ahead of the Trial even though the Committal Proceedings might not be determinative, and (b) the Defts being required to put forward their defence prematurely by way of affidavits which would be an encroachment on their right to silence when the consequences of the Committal Proceedings would be serious and the Defts’ liberty would be at stake.[47] On such basis it was said the Committal Proceedings should be stayed until the matter of the Defts’ intended appeal to the CFA was finally determined (either because it was not granted, or if leave was granted, after completion of such appeal), or alternatively until the Trial judge in the Underlying Action gave case management directions.

122.  Mr Wong SC submitted that the overlapping issues between the Committal Proceedings and the Trial / Discharge Summons in the Underlying Action were significant because:

(a)

DHCJ Kent Yee adjourned the Discharge Summons to the Trial of the Underlying Action, which summons was all about the Emails (including, but not limited to, (i) how they came about, (ii) whether their contents reflected the true instructions given by P, and (iii) whether the deponent exhibiting the Emails had knowledge of the alleged falsity) (see paragraph 39 of the Yee Decision and paragraph 31 above). Indeed, Chu had intimated that witnesses for the plaintiffs in the Underlying Action (including the Defts) would be thoroughly cross-examined at the Trial on these issues, which were plainly also issues to be dealt with in the Committal Proceedings.

(b)

As far as the Underlying Action was concerned, the Emails also formed part of the contemporaneous documents evidencing the parties’ agreement as to the role to be played by PB Cayman in the management/operation of the Vessel. The allegations that the Emails were forgery and that the Defts were aware of such forgery were highly relevant to this factual issue as well as the general credibility of the witnesses, which the trial judge had to determine at the Trial.

123.  Mr Wong SC reminded that DHCJ Kent Yee by the Yee Decision made clear that when the matters surrounding the Emails should be looked at was at the Trial and not by any separate hearing of the Discharge Summons, and that DHCJ Saunders (see paragraph 54(c)(iii) above) and Cheung JA (see A/1, 2 and 4 in the Annexure) expressed similar comments that the Trial, which would raise similar issues, should not be disrupted by satellite contempt proceedings. Mr Wong SC submitted that these sentiments were supported by the legal principles discussed in Part X above which, he argued, suggested that satellite proceedings should be avoided especially in situations where the alleged contempt concerns making false statements in the underlying proceedings as opposed to breaches of injunction/court orders (such that an argument can be made that there is urgency to resolve the issue of contempt so as to serve the purpose of enforcing the injunction/court orders). Mr Wong SC further submitted that since the Trial and the hearing of the Discharge Summons (both scheduled to be heard together in April 2021) were imminent, this removed any uncertainty as to how long the stay of proceedings would last, and reinforced the argument that the parties should not be distracted by the Committal Proceedings ahead of the Trial.

124.  On the other hand, Mr Whitehead SC submitted that the fact there are overlapping issues between the contempt proceedings and the underlying proceedings does not of itself and without more necessitate postponing the determination of the contempt application until after the trial, and when to have the contempt proceedings heard is a matter of individual case management in each case in which any overlapping issues and the nature of the alleged contempt (ie one of false statements/evidence or one of breach of injunction/court orders) are factors to be taken into consideration. He referred to Willwin Development (Asia) Company Limited in which DHCJ B Chu (as she then was) in refusing to stay the contempt proceedings remarked that she was not satisfied “there will be any overlap of major issues ……” (my emphasis). Mr Whitehead SC submitted the question in the Committal Proceedings was not whether the Emails were forged (which he said Yan had confessed), but whether the Defts were complicit in such forgery (an important issue in the Committal Proceedings), which must be a minor issue (or at least could not be characterised as a major issue) in the Underlying Action.

125.  In my view, the observations by DHCJ Kent Yee and DHCJ Saunders must be viewed in context as explained in paragraph 117 above. Further, the observations by DHCJ Kent Yee and the CA (at the Appeal Hearing) should be viewed as preliminary rather than determinative, especially when the CA repeatedly emphasised that their remarks as to the timing of contempt proceedings were of a general nature, and that it was for the CFI judge dealing with the Notice to Hear OS to decide in all the circumstances when the Committal Proceedings should be heard.

126.  In my view, cases of contempt proceedings based on alleged false statements/evidence normally occur after trial because the falsity/ alteration of the statements/evidence is usually revealed at trial (eg admission under vigorous cross-examination or finding by the trial court). Even if the falsity/alteration of the statements/evidence were suspected and/or alleged before Trial, such falsity/alteration (ie the actus reas) is usually not admitted or is even denied, and thus has yet to be proved. It is in such circumstances that contempt proceedings are usually raised or tried after the trial in the underlying action to avoid multiplicity of proceedings.

127.  Here, Yan admitted to alteration of the Emails and giving the altered Emails to Sun, and Sun exhibited the altered Emails to Sun 1 which was admittedly filed in support of the application for the ExP Injunctions. But Yan was not a defendant in the Underlying Action or an applicant for the ExP Injunction. On the available materials before this court, it was the complicity (if any) of the Defts in respect of such admittedly altered Emails (ie the mens rea) that would be the key issue in the Committal Proceedings rather than to what use the altered Emails was put in the Underlying Action.

128.  It was said that the Emails were highly relevant to the Trial in the Underlying Action, and that Chu tried to play down their significance. Mr Wong SC submitted that even on the face of paragraphs 3-11 of the OS and paragraphs 24-27 of the Chu 3^rd Aff (see paragraph 72 above) in the Committal Proceedings, Chu accepted the Emails were relevant to the Underlying Action. Mr Wong SC submitted that Chu obtained the Yee ExP Leave (now reinstated by the CA Order) on such basis, and could not blow hot and cold by trying to play down the significance of the Emails.

129.  Of course, any accusation of false document/evidence that underlies contempt proceedings must have some pertinence to the underlying action, and one hardly expects contempt proceedings to be issued on the basis of immaterial evidence in the underlying action. The key question is not whether the alleged false document/evidence features in the underlying action, but whether there were overlapping issues in dispute sufficient to tip the exercise of discretion to grant a case management stay of the contempt proceedings. In my view, paragraphs 3-11 of the OS in the Committal Proceedings and paragraphs 24-27 of the Chu 3^rd Aff (see paragraph 72 above) merely explained that the altered aspects of the Emails went to the questions over the Management Fee and the commercial agreement that were subject matters of dispute between Chu and the plaintiffs in the Underlying Action. This was confirmed by paragraph 17 of the Amended Statement of Claim by Lau’s camp and paragraph 16 of Chu’s Amended Defence in the Underlying Action that put the Management Fee and address commission in issue. Whilst this might explain the gravity of the alteration to the Emails, ie the Emails pertained to subjects of dispute in the Underlying Action, the key issues in dispute being the Management Fee, the address commission and the commercial agreement would not be subject matters in the Committal Proceedings. Likewise, given the exposure in Yan 1 of the alteration of the Emails by adding reference to the Management Fee, the evidential weight of the Emails (if any) in the Underlying Action will be considered in light of such admission, and subjective motive would have much less place in the inter partes commercial dispute between the parties.

130.  In any event, I note with interest that the Defts also had not been consistent in the justification for their stance.  At paragraphs 3-5 of their written submissions to the CA dated 11 July 2018 for the Appeal Hearing, the Defts claimed that the Emails were insignificant to the issues in the Underlying Action and the Discharge Summons, ie the Emails were mere examples to demonstrate the modus operendi between PB Cayman and Joint Silver in relation to the operation of the Vessel (and not evidence to “disambiguate [PB Cayman’s] role as a commercial manager / agent”), and that the skeleton submissions for the ExP Injunction made no mention of the Emails which demonstrated the “peripheral-ness of the Emails”. This was also borne out by Mr Wong SC’s oral submissions at the Appeal Hearing (see Transcript pages 34G-36F), and even though he later on suggested the Trial would canvass the same issue (see Transcript page 58M), he was at that point seeking to persuade the CA to defer consideration of ex parte leave to commence committal proceedings if and until the trial court in the Underlying Action found “there is no commercial agreement and these emails were forged”, which argument did not prevail as evident from the CA Order. Anyway, the Emails could not be both peripheral and (as the Defts now contend) highly relevant to the Underlying Action.

131.  Thus, whilst I accept the Emails featured in both the Underlying Action and the Committal Proceedings, the focus of the disputed issues appeared to be different, especially in light of the admitted alterations to the Emails. This observation also applies to the Discharge Summons in which the materiality of the admittedly altered Emails to obtaining the ExP Injunction would be a key issue, but the Committal Proceedings were more concerned about how the altered Email came to be adduced in Sun 1 and the mens rea in relation to adducing the altered Emails. Even if there was some overlap, this factor of itself and without more would not necessitate postponing the Committal Proceedings of which leave had been restored 2 years ago. I have not forgotten about the Invoice which was also the subject matter of the Committal Proceedings, but even though there was no admission that the Invoice was altered, I am not persuaded the involvement of the Invoice would change the above analysis which was also pertinent to the alleged contempt in relation to this document. The assertions as to the alleged alteration of the Invoice was in the same vein as the Emails, and I also note the Invoice was not featured much in the written/oral submissions of Mr Whitehead SC and Mr Wong SC, which reflected the parties’ main concern was with the Emails, which I have considered and discussed above.

132.  In my view, the fact that the Trial and the hearing of the Discharge Summons were scheduled to be heard in April 2021 was insufficient to justify not moving the Committal Proceedings forward. Although the Committal Proceedings did not concern breach of injunction/court orders, the use of altered documents (the alteration of which was admitted) before the court would be an affront to the administration of justice if Chu was able to prove complicity on the part of the Defts, and there must be a public interest in ensuring integrity of the legal process and honesty in the use of evidence before the court. All of the above considerations suggested the Committal Proceedings should not be further deferred.

133.  But Mr Wong SC laid emphasis on the Defts’ right to silence, ie if the Defts were successful on their intended appeal to the CFA, they would not need to detail their defence in the Committal Proceedings. On the other hand, Mr Whitehead SC submitted there would be no infringement of the Defts’ right to silence as they were not obliged to file evidence, and in any event they had already shown their hand by going on affirmation (eg Yan 1, Sun 2 and Sun 3) to offer explanation for the altered Emails. At the Appeal Hearing, Mr Wong SC in his oral submissions also disclosed that “…… [my] learned friend keep on saying this is a case of admitted forgery. Now, I can’t really say anything on behalf of [Yan], but, as far as the [Defts] are concerned, their position is that they were not aware of the so-called alteration or fabrication.” (see Transcript page 37T-V), and he then referred the CA to Yan 1 and Sun 3 to highlight such defence (see Transcript pages 45D-46C and pages 55R-56P). Mr Whitehead SC submitted this also showed there would be little prejudice in costs as the Defts had provided relevant instructions to their lawyers as reflected in the evidence filed.

134.  But Mr Wong SC argued that notwithstanding evidence filed on behalf of the Defts in the Discharge and Setting Aside Summonses, they need not reveal their further defence, and the court should not assume the filed evidence was the only evidence the Defts would adduce in the Committal Proceedings. It was said the Defts had not yet addressed various statements in the filed affirmations and the Invoice. It was further said that if the Defts were required to file evidence in the Committal Proceedings now, it would be an encroachment on their right to silence. It was feared that if the Defts filed/served evidence on the Committal Proceedings, confidentiality would be lost, and Chu would have the unwarranted benefit of reading the Defts’ evidence in defence when there was uncertainty whether the Committal Proceedings would go ahead.

135.  I do not doubt the Defts had a right to silence in the Committal Proceedings, but what this means is that the Defts had the right not to go into the witness box at all and the right not to incriminate themselves.[48]

136.  But does that mean the court has no jurisdiction to require or the court should not require the Defts to swear affidavits or produce affidavits of witnesses which they intend to rely in advance of the hearing of the OS, or to afford Chu an opportunity of preparing evidence in rely? The governing principles as to the court’s case management powers regarding the right to silence in proceedings for committal for contempt as well as the court’s case management discretion on preparation of evidence are set out in Comet Products UK Ltd v Hawkex Plastics Ltd[49] and Re B (Contempt: Evidence)[50] which have been summarised by Au J (as he then was) in Secretary of Justice v Li Pang Kay & anor:[51]

“12. …… The governing principles in the exercise of that discretion have been set out in Comet Products UK Ltd v Hawkex Plastics Ltd [1971] 2 QB 67 and Re B (Contempt: Evidence) [1996] 1 WLR 627. They can be summarised (as helpfully set out in the plaintiff’s skeleton) as follows:

(1) A respondent to an application for committal is a competent but not compellable witness. Comet at 74E-F, 77D; Re B at 638A, 639C. Hence Order 52, rule 6(4) provides that: ‘If on the hearing of the application the person sought to be committed expresses a wish to give oral evidence on his own behalf, he shall be entitled to do so.’

(2) The court, in exercising the power to regulate its own procedure, is entitled to require a respondent to swear affidavits or produce statements of witnesses of fact on which they may wish to rely and to file and serve the same in convenient time before the hearing to permit proper preparation of evidence in reply. Re B at 629D-E, 637H-638D, 638G, 639C.

(3) The applicant cannot make use of the respondent’s evidence until the same is deployed by the respondent (by reading or relying upon the same). A respondent who complies with the court’s direction to file evidence is not in peril of cross-examination until such time as he deploys the evidence in his own case. Re B at 629E-F, 635B-H, 638D-G.

(4) Nevertheless, a respondent who has sworn and filed an affidavit cannot withdraw it. One consequence of this is that the applicant is entitled to make such use of the statements in it as admissions helping his case against the respondent. Comet at 74F-G, 77D.

(5) Where a respondent to an application for committal chooses to file and rely upon affidavit evidence, he can be cross-examined in the normal way. It would only be in a very exceptional case that a judge ought to refuse an application to cross-examine a deponent on his affidavit. Comet at 75G, 76G, 77F; Re B at 638B-C.” (my emphasis)

137.  This was discussed recently by the CA in BT v CBY (formerly known as YHK also known as YCB) [Committal for Contempt of Court].[52] Cheung JA said as follows:

“7.1 The clear principle regarding the use of a respondent’s affidavit in committal proceedings is that the applicant cannot make use of the respondent’s affidavit until the respondent has deployed it by reading or relying upon it. This is stated by Wall J in In re B. (Contempt of Court : Affidavit Evidence) [1996] 1 WLR 627 at [629]. For ease of reading I have separated the four paragraphs of the judgment.

‘(1) the court is entitled to require respondents to motions to commit to swear affidavits or produce statements of witnesses of fact on which they may wish to rely and to file and serve the same in convenient time before the hearing to permit proper preparation of evidence in reply; however

(2) the applicant must prove his case on the evidence filed in support of the application (supplemented by any admissions made by the alleged contemnor upon which the applicant is entitled to rely); thus the applicant can make no use of the respondent’s evidence until the same is deployed by the respondent (by reading or relying upon the same);

(3) a submission of no case to answer should be and is available to a respondent to an application to commit without the respondent at the same time being put to an election as to whether he would call evidence; and

(4) a respondent who complies with a direction as envisaged under (1) above is not in peril of cross-examination until such time as he deploys the evidence in his own case.’ (emphasis added)

7.2. Wall J at [638] further stated:

‘The applicant can make no use of the respondent’s evidence until it is deployed by the respondent, either by reading it or relying upon it. It equally follows that a respondent who obeys a direction to swear, file and serve affidavit evidence prior to the hearing does not by so doing put himself in peril of cross-examination, until such time as he deploys the evidence in support of his own case.’

……

7.5 …… counsel for the husband …… referred to the husband’s affirmation notwithstanding his clear stand that the husband would not subject himself to cross-examination.

7.6. The approach below is wrong. The starting point is that the respondent to a contempt proceedings is not compellable to give evidence. However, it does not mean that the Court cannot give directions for him to file evidence as he retains the right to elect whether to use it or not. The preparation of evidence in advance is to prevent the applicant being taken by surprise by the evidence which may cause the hearing to be adjourned in order for her to file rebuttal evidence. What is not permissible is for the applicant to say (like what happened below) that since the evidence has already been filed she can refer to it. This is because the right to elect to use it or not is only given to the respondent. The wife’s counsel misunderstood the law. The Judge should make it clear that the husband’s right to use the evidence is subject to him being cross-examined.” (my emphasis)

138.  In light of the above, the court in ordering affidavits to be filed by the respondent in contempt proceedings is exercising its inherent power to regulate its own procedure, and this cannot be viewed as any encroachment, infringement or violation of such respondent’s right to silence. Here, the Defts could rest on their defence already disclosed in the affirmation evidence, and they would not be obliged to file any evidence or any further defence. It would be up to the Defts to decide whether they wish to file/serve and rely upon any affidavit evidence in defence. Even if they did file/serve evidence in defence, they still retain the right to elect whether or not to use it at the hearing of the OS. There would not be infringement of the Defts’ right to silence.

139.  What in essence was the Defts’ true complaint was that proceeding with the Committal Proceedings would lead to “premature” disclosure of their defence (or more accurately, further defence contentions beyond the defence already disclosed) ahead of (a) their intended application for leave to appeal to the CFA against the CA Order and/or (b) the Trial in the Underlying Action. I have dealt with (a)-(b) above in the analysis above, and for the reasons discussed above, I consider that as a matter of case management discretion the Committal Proceedings should not be stayed notwithstanding (a)-(b) above. The alleged “prejudice” of premature disclosure is one which arises in all contempt proceedings in which the underlying actions are still ongoing, and the fact there is such ongoing underlying action is not necessarily a reason for not proceeding with contempt proceedings in appropriate cases. On such basis, I do not see the risk of prejudice or injustice when the Defts still retained the right to decide what evidence (if at all) to file/serve to oppose the Committal Proceedings, and the right to decide whether to rely on such evidence at the substantive hearing. These fundamental rights would not be compromised by any directions for the Defts to file/serve further evidence, which would be the next step in moving the Committal Proceedings forward.

XII.  CONCLUSION

140.  For all of the above reasons, a stay of the Committal Proceedings is not justified, and it is appropriate for this court to give directions for the filing of evidence. I therefore grant the following order:

(a)  the Summons is dismissed;

(b)  the Defts and Yan (if so desired) shall within 49 days from the date of this order file and serve affidavits to oppose the OS;

(c)  Chu shall within 49 days thereafter file and serve affidavits in reply;

(d)  the Notice to Hear OS be further adjourned for further hearing on a date to be fixed before any judge for further directions (with 1 hour reserved), but such hearing shall not be heard before 126 days from the date hereof.

141.  For the avoidance of doubt, notwithstanding any compliance with the order in paragraph 140(b) above, any affidavit evidence filed by the Defts shall not be used by Chu until it is deployed by the Defts by reading or relying upon the same, or until further order of the court.

142.  I should note here that Mr Whitehead SC, quite fairly, did not shut the door against the court re-considering in due course whether the Committal Proceedings should be set down for trial (eg, on the basis that the Defts demonstrated cogent basis for such deferral, say, on evidence they chose to file pursuant to paragraph 140(b) above). After all, any decision on whether or not to set the OS down for trial or substantive hearing would be a case management decision to be made in the relevant future context.

143.  As for costs, there is no reason why costs should not follow event in relation to the Summons. I therefore grant the following cost order nisi:

(a)  the Defts shall pay Chu’s costs of and occasioned by the Summons (including all costs reserved) with certificate for two counsel to be taxed if not agreed;

(b)  the costs of the Notice to Hear OS at the hearings on 5 November 2018 and 2 April 2019 be costs in the cause;

(c)  the hearing time apportioned for the Notice to Hear OS at the hearing on 5 November 2018 was 5 minutes;

(d)  the hearing time apportioned for the Notice to Hear OS at the Hearing on 2 April 2019 was 15 minutes;

(e)  the balance of the hearing time at the Hearing on 2 April 2019 be apportioned for the Summons.

Annexure