THE INCORPORATED OWNERS OF GOLDEN PLAZA v. HA HAU KWAN FONG MARY

HCCT 24/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS
NO. 24 OF 2002

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J U D G M E N T

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1. This is the motion to commit the respondent for contempt of court.

2. The applicant is the incorporated owners of Golden Plaza, a multi-storey building in Nathan Road, Mongkok, Kowloon, Hong Kong ("the Building"). Prior to 23 January 2002, the respondent was the registered and beneficial owner of Flats E, F, G and H on the 6th Floor of the Building (collectively "the above units").

3. On 4 January 2002, an arbitration award was made against the respondent ("the Award"). The relevant part of the Award reads:

"IT IS ORDERED AND DIRECTED that the Respondent whether by herself, her servants, or agents or howsoever otherwise, be restrained, and an injunction is hereby granted restraining her, from using or operating or permitting or allowing to be used or operated as a brothel or brothels or a vice establishment or vice establishments, the premises known as Flat E, Flat F, Flat G and Flat H, the 6th Floor, Golden Plaza, 745-747 Nathan Road, Mongkok, Kowloon, Hong Kong or any one or more of those Flats, and from using or permitting or allowing to be used, any one or more of those Flats for the purpose of prostitution or the arrangement of prostitution."

4. On 11 April 2002, the respondent through her counsel gave an undertaking to the court to abide by the Award. It is unnecessary to go into the details of the subsequent legal proceedings save that the respondent has at various times applied respectively for leave to appeal against the Award, to set aside the leave to apply for her committal and for leave to appeal to the Court of Appeal. All these applications were dismissed.

5. From 23 January 2002 to 18 February 2002 (that is, before the undertaking was given by the respondent), Flats E, F, G and H on the 6th Floor were said to have been sold by the respondent to third parties. It is part of the applicant's case that these purported sales were sham transactions and the respondent remains the beneficial owner of the above units. It is further the applicant's case that the respondent continued to operate the above units as a brothel or vice establishment even after the undertaking has been given. The respondent now admits that she has acted in breach of the undertaking given on 11 April 2002. It is therefore again unnecessary to go into the details of the evidence adduced by the applicant to establish the respondent's breach of the undertaking, but the relevant evidence includes:-

(a) circumstantial evidence set out in the affirmations respectively made by the watchmen of the building, private investigators engaged by the applicant and a member of the applicant's management committee; and

(b) evidence that a defendant (not the respondent) was convicted on 5 August 2002 of an offence of managing a vice establishment at the above units on 15 June 2002 (a date subsequent to the period during which the undertaking was effective).

6. In relation to whether the earlier sale of the above units by the respondent was genuine, I understand from counsel for the respondent that this is a matter in dispute and pending the determination by the court in another action. It is strictly irrelevant for present purposes whether those sales were genuine. What is relevant is whether the respondent has at the material time been in charge of the prostitution activities in the above units. The respondent claims that she only worked as a prostitute in Flat G2 on the 6th Floor and has nothing to do with the activities in any other of the above units.

7. Having considered the whole of the evidence before me, I am satisfied that she has been in charge of the prostitution activities in the above units despite her denial of having done so. I therefore reject the respondent's explanation that she only operated a brothel on a limited basis. Once that conclusion has been made, the respondent's explanation that she was merely acting under a misconception as to the ambit of her undertaking has to be rejected as well. Operating a full-scale brothel or vice establishment clearly falls foul of the undertaking and this ought to be obvious to the respondent.

8. In these circumstances, I am satisfied that the respondent has been in breach of the undertaking she gave to the court during the whole period when the undertaking was effective (from 11 April 2002 to 16 May 2002).

9. The respondent is now 32 years old. She was born and brought up in the Mainland and came to Hong Kong in 1991. She was married but was divorced in the Mainland in 1992. The respondent now lives alone. The custody of her 14 year-old son was handed over to her former husband some time earlier. Her elderly parents live in the Mainland and are looked after by her elder brother.

10. The respondent claimed in her 3rd affirmation dated 22 October 2002 that she breached the undertaking because she mistakenly believed that the way she operated the brothel or vice establishment at the above units fell outside the ambit of the undertaking. I reject the reasons put forth by the respondent for the breach. First, the scale of her operation has been set out earlier in this judgment. Secondly, the terms of both the Award and the undertaking she gave are clear, simple and should be readily understandable. Thirdly, her former legal adviser has stated in effect that the nature and effect of the undertaking has been explained to the respondent in full.

11. The respondent has (through her 3rd affirmation dated 22 October 2002) indicated:

(1) she would use her best endeavour to abide by the undertaking and cease the operation of the brothel or vice establishment in the above units;

(2) she would instruct her legal advisers to pay the applicant's costs of this application and the costs relating to the Award (to be taxed if not agreed);

(3) within 3 days, she would pay HK$1,000,000.00 to her legal advisers as stakeholder to meet her liability for the applicant's costs; and

(4) she would abide by the Award on a permanent basis.

12. Counsel for the respondent informs me that point (2) above has actually been overtaken by events, namely, a sum of about HK$800,000.00 has in fact been paid to the applicant to satisfy the amount of the taxed costs. I queried counsel for the respondent as to whether a mere indication by the respondent is adequate. Further, point (1) above is too vague. As a result, having taken instructions, counsel has on the respondent's behalf offered the following revised undertaking (in addition to points (3) and (4) above) namely, the respondent is prepared to undertake to the court not to enter the Building.

13. The most severe form of sentence for a contemnor is imprisonment but there can be other lesser forms of sentence. Counsel for the respondent has referred me to a number of cases relating to sentencing for contempt of court. These cases are nothing more than guidance since each case has to be decided on its own facts. The underlying principle is that a delicate balance has to be maintained between the strong public interest in ensuring that court orders are not flouted and the need to consider the individual circumstances relating to the contemnor. It is also undisputed by counsel for the respondent that a sentence of imprisonment is often appropriate for a wilful failure to observe a court order.

14. This is a case which involves a serious contempt because:

(1) the respondent's act of contempt also involved the commission of a criminal offence;

(2) her act of contempt continued over a period of time;

(3) I am satisfied that the respondent has acted willfully;

(4) the act of contempt must have caused nuisance to the other occupants of the Building.

15. The only mitigating factor of any real weight is the respondent's admission of her contempt. But even this admission is half-hearted because the respondent still disputes some of the matters such as the extent of her act of contempt. I have found against her on these disputed points. The evidence adduced by the applicant to establish her act of contempt is also overwhelming.

16. Taking everything into account, I find that imprisonment is the only appropriate way of dealing with the respondent. Had the respondent contested this application, the appropriate term of the imprisonment would have been 3 months' imprisonment. A reduction in sentence should be given to the respondent for her admission. The term of imprisonment I will impose, having taken that into consideration, is 2 months' imprisonment. That will be the sentence for the respondent.