AU TZE PUI v. CHOW WING MAN

HCMP 68/2025

[2025] HKCFI 2995

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 68 OF 2025

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J U D G M E N T

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1.  By the Judgment handed down on 11 June 2025, this Court found that Mr Chow has breached the Undertaking and hence acted in contempt of Court. This hearing is for the purpose of mitigation and sentencing. He was given leave to file and serve an affirmation in mitigation but has not done so. He had not paid back any part of the $1.1 million into Court.

2.  Breach of an undertaking is like a breach of a court order.  Where there is no evidence to suggest that compliance was in any way difficult or impossible, a sentence of imprisonment would not be inappropriate.  This would be particularly so in a case where the sentence was designed to enforce compliance.  See Excel Noble Development Ltd v Wah Nam Group Ltd [2001] HKC 148, at 162A-B.

3.  The legal principles in sentencing civil contempt as follows:

“2. The starting-point is to acknowledge that contempt of civil court orders is a serious matter and that court orders are made to be obeyed. A prime consideration of the court in sentencing contempt is to “signal importance of demonstrating to litigants that the orders of these courts are to be obeyed”. By “litigants”, it is clearly referring to litigants in general and not just the contemnor himself.

3. The object of the sentence is both to punish conduct in defiance of the court’s order and to serve a coercive function by holding out the threat of future punishment as a means of securing the protection which the order was primarily there to do. The court has to balance the 2 objects.

4. The sentence for contempt may range from a fine to a term of imprisonment.

5. Imprisonment should be regarded as a sanction of the last resort. Any custodial sentence should be as short as possible consistent with the circumstances of the case.

6. The court may suspend a term of imprisonment for such period or on such terms as the court deems fit. This is an “absolute discretion” but it would be difficult to think of circumstances where a suspended order should be made when nothing further remains to be done to comply with the order.

7. The court will consider if there are:

(a)  Aggravating factors;

(b)  Mitigating factors; and

(c)  Acts to purge the contempt.

8. Relevant factors (which are not exhaustive)  include:

(a)  The nature of the order and breach in question, and the extent of the breach;

(b)  Whether the contempt was contumacious or unintentional, the reasons, motives and state of mind;

(c)  Whether the claimant has been prejudiced by virtue of the contempt and whether the prejudice is capable of remedy;

(d)  Whether the contemnor appreciates the seriousness of the deliberate breach;

(e)  Whether the contemnor has cooperated.”

See Arboit v Koo Siu Ying (No.2) [2016] 3 HKLRD 154, Au-Yeung J.

4.  For contempt that had not been purged and which was a result of wilful conduct, imprisonment is the starting point: Law Lai Lan v Tamang Prem Chandr 2018] HKCFI 536 at §41, DHCJ To.

5.  The Undertaking was in simple terms and was voluntarily offered by Mr Chow.  There was no difficulty in compliance.  He only needed to refrain from using the money.  And yet there was a deliberate breach of the Undertaking for Mr Chow’s own purpose.  At this hearing, he still submits that he was entitled to use that money as a major shareholder of the company.  He simply fails to appreciate the seriousness of his breach.  His breach has caused MBG Ltd to lose HK$1.1 million, which may indirectly prejudice the Plaintiff’s interest (if the Plaintiff is declared to be a shareholder)  in the underlying action.

6.  Mr Chow has been given 3 opportunities to purge his contempt by payment into Court - once before DHCJ Yee; another before this Court at the substantive hearing of the OS on 11 June 2025 and in the period between handing down of the Judgment and this hearing (§§28, 30 and 36 of the Judgment)  but he has failed to do so.  

7.  In mitigation he claimed to have funds outside Hong Kong but due to unspecified acts of Mr Au, Mr Chow was unable to use those funds.  In the absence of an affidavit showing the existence of such funds.  I cannot rely on the bare words of Mr Chow.  His offer to pay back the $1.1 million is also hollow in the absence of proof of his means.

8.  Imprisonment is the appropriate remedy of this serious breach.

9.  Mr Chow submits that he has to take care of his age old mother who has chronic illnesses.  That may be the case but Mr Chow has family members who can assist.  This need to take care of the mother weighs little in the light of the serious breach and I impose a term of 6 weeks imprisonment.  It should not be suspended as there is no other act to follow up after today.  If Mr Chow is able to restore the money in full, the unserved term of the imprisonment may be lifted upon his application.

10.  On costs, the costs order nisi has not been varied and so the costs order becomes absolute. 

11.  Despite the costs being on indemnity basis, I fail to see the justification for charging over $400,000 under the OS.  The solicitor has now undertaken not to charge Mr Au for the costs of the LCD ($17,300)  for preparing the costs statement. 

12.  On an indemnity basis, I summarily assess the costs at $350,000, to be borne by Mr Chow.