MANDECLY LTD AND ANOTHER v. HAO WEI AND OTHERS

HCA1216/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1216 OF 2002

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JUDGMENT ON
CONTEMPT PROCEEDINGS

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1. On 29 January 2008, I have granted leave to the plaintiffs to apply for an order of committal against the 1^st defendant, Mr Hao for contempt of court. 

2. On 22 February 2008, I was satisfied beyond reasonable doubt that Mr Hao had been in contempt of court as at the date of the aforesaid application and has to a certain extent, continued to do so.  The following is my reasons therefor.

3. I refer to my judgment which was delivered on 17 August 2006 for the background of this case.  The appeal to the Court of Appeal was dismissed on 13 November 2007.  There was no order for stay of execution of my Order pending appeal to the Court of Final Appeal. 

4. On 30 November 2007, the plaintiffs’ solicitors wrote to Mr Hao’s solicitors demanding Mr Hao to comply with the orders for :

5. On 5 December 2007, the plaintiffs’ solicitors further wrote to Mr Hao’s solicitors pointing out that the intended appeal to the Court of Final Appeal would not operate as a stay, and reiterated their demand for compliance with the Orders.  Otherwise again committal proceedings will be commenced for the aforesaid non-compliance.

6. On 17 December 2007, the plaintiffs further accommodated Mr Hao by applying to court to extend the time for Mr Hao to comply with the Original Orders. 

7. On 19 December 2007, Mr Hao’s solicitors wrote to the plaintiffs’ solicitors and indicated that he was able to transfer at least 17 units together with their corresponding car parking spaces to the plaintiffs which were part and partial of the Schedule 1 Properties. 

8. On 20 December 2007, this court extended the time fixed in paragraph 2 of my Original Order, i.e.

9. Accordingly :

10. It was only after about 17 days thereafter that the defendants applied for a stay of my orders, which will be heard some time in June 2008.  There was no application for interim stay until the hearing of the application for stay, and therefore there has not been any order at all for a stay of execution of my orders.

11. The plaintiffs obtained leave from me on 29 January 2008 as aforesaid, papers for committal proceedings was served on Mr Hao.  It was only one day before the hearing of the committal proceedings on 22 February 2008, the defendants’ solicitors filed and served on the plaintiffs’ solicitors after 5 p.m. on 21 February 2008, the 8^th affirmation of Tse Lap Chung, Edward, a solicitor in the conduct of this action on behalf of the defendants raising two points :

12. Just a day before the hearing, Mr Hao also delivered certain documents to the plaintiffs in Beijing and according to Tse’s affirmation, they were purportedly documents in respect of transfer of the said 17 units.  The plaintiffs’ solicitors are still in the course of taking instructions from the plaintiffs as to whether they have received the documents and if so whether the documents received are sufficient for the aforesaid purpose. 

13. Be that as it may, they only form part of the 27 units and corresponding car parking spaces which Mr Hao is now saying that he is trying to have “de-registration” of the sale and purchase agreements effected by way of commencing legal actions in the Mainland.  However, the plaintiffs contended that those flats and car parking spaces covered by Section 2 of the Annexure to the said Statement, fall within the following groups :

14. The plaintiffs contended that there is no need for Mr Hao to take the convoluted and time-consuming route of commencing proceedings to effect the de-registration.  Although under the name of Fu Li Company and Yi De Company, Mr Hao said he has no information on the contact persons of the companies to perform the procedure for de-registration.  The plaintiffs do not accept such allegation of Mr Hao since he has never written to the plaintiffs to ask for arrangement with the contact persons of the companies.           Nonetheless, the plaintiffs’ solicitors are prepared to make arrangement for the responsible person of Fu Li Company and Yi De Company to effect the procedure for de-registration with immediate transfer thereupon.

15. For the remaining 4 units, 2 are under the name of Mr Chan and 2 are under the name of Chan Ka.  Even on Mr Hao’s case, he had already got the sale and purchase agreements and also the cancellation agreements for these 4 units.  Further, Mr Hao cannot say that he has no information of Mr Chan Ka who actually is a director of the 1^st plaintiff.  There was no explanation as to why these 4 units could not be transferred earlier to the two Mr Chan.  

16. Furthermore, for those flats under Section 2 of the Annexure to the said Statement, they are all covered by the 4-Party Agreement.  To recapitulate, the original defence of Mr Hao was that those properties were covered by the 4-Party Agreement as security for the land premium for Phase 1.  That contention was decided by this court and the Court of Appeal against Mr Hao.  Thus he has no right to hold on to those properties at all now. 

17. On the other hand the plaintiffs submitted that Mr Hao has not said a word of explanation in respect of the reason why he has refused to deliver up the share certificates of the 3^rd defendant as security for his performance of the other orders made against him.  Nothing was said by Mr Tse in his 8^th affirmation.  However, Mrs Dora Chan in her written submission, which was submitted to me only at the beginning of this hearing, (i.e. when counsel for the plaintiffs, Mr Lee Tung Ming had submitted his written submissions at the same time with Mrs Chan), pointed out that her clients was worried that the share certificates of Mandas Real Estate, if delivered to the plaintiffs, would render the defendants losing their shares by way of sale or by way of receivership.  However, this is not a satisfactory explanation as to why the share certificates could not be delivered when the plaintiffs were just exercising a lien on those shares for the due performance of the other monetary payment and property transfer orders.

18. In the end, I find that Mr Hao has not actively tried to obey the court orders since the same was made on 17 August 2006.  He only took actions and each time at the eleventh hour.  Even the application for the variation of my orders to extend time for Mr Hao to observe the orders was made by the plaintiffs.  He was represented by counsel at the said hearing and the extension of time was granted with a warning that he had to observe the orders within time.  Up to today he has not fulfilled his responsibilities. 

19. In the end I find that Mr Hao’s non-compliance with the orders is clearly contumelious.  

20. Before I pass sentence on Mr Hao on 5 March 2008, there are two things I would like the defence side should do : they are, namely :

21. Accordingly, I would not say anything more until the day of sentencing and reserve all costs herein.