LO PO WAI, HARRY v. WONG YEE CHUK

HCMP 1444/2022

[2024] HKCFI 1434

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1444 OF 2022

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BETWEEN

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JUDGMENT

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A. Introduction

1.  I refer to my Judgment of 12 March 2024 ([2024] HKCFI 724) (the “Judgment”). I adopt the same terms used therein.

2.  For the reasons set out the Judgment, and in respect of D’s non-production for inspection of the documents set out in §100 therein, I have found that P had proved beyond reasonable doubt that D had been in contempt for non-compliance of the Subject Orders.

3.  In that same Judgment, I handed down directions on the filing of evidence and submissions for the purpose of mitigation and sentencing. D has since filed his 2^nd affirmation (“D/Aff2”). Written submissions have also been filed.

4.  This is the hearing for this Court to receive mitigation and to hand down sentence.

5.  Parties’ representation has remained the same.

B. The applicable general principles

6.  In Arboit v Koo Siu Ying (No. 2) [2016] 3 HKLRD 154 at §§2-8. Au-Yeung J set out the general principles applicable to sentencing for contempt of court. Those same principles were cited and applied by Cheng J in Alan Chung Wah Tang v Lee Siu Fong [2023] HKCFI 366. Parties agree that they apply equally to the present case.

7.  I agree. I apply the same. I do not otherwise repeat them.

C. Submissions

8.  With reference to D/Aff2 and various other matters before the court during the committal hearing, Mr Yau has urged upon this Court a number of mitigating factors. They include principally the following:

(a) The steps taken by D to purge the contempt by producing further documents to P. The production was made under cover of a letter dated 24 April 2024 from D’s legal advisers;

(b) D did not set out to defy the Subject Orders. The “great majority of the documents specified” have been produced, in excess of 15,000 pages;

(c) The “huge quantity of records and documents of HIL” were produced within the deadline set out in the Extension Order;

(d) Contempt has only been established in relation to 4 of the 11 categories (treating Section I Item 3 and Section II Item 6 as covering the same category of documents);

(e) The undisclosed documents were “isolated items in the form of attachments to emails sent to [D’s] wife”;

(f) The contempt took the form of “lack of care”;

(g) Absence of prejudice on P’s part despite the contempt; and

(h) D’s general co-operation.

9.  On the facts, and with reference to Alan Chung and Arboit, Mr Yau submits that a 5-digit fine would be appropriate. In the course of oral submissions, Mr Yau suggested a fine between HK$80,000 to HK$100,000.

10.  Mr Lam has highlighted for this Court’s consideration a number of matters. They include principally the following:

(a) D’s purported purging should be given little weight. Those documents produced under cover of the 24 April 2024 letter were already in the trial bundles, such that the denial of P’s access to those documents were rectified by P’s own effort instead of by D. They were also only produced late. The purported purging was hence only technical;

(b) The lack of care on D’s part was serious;

(c) D’s general uncooperativeness towards the compliance of the Subject Orders, and in particular Section II Item 1;

(d) The delay in D’s compliance; and

(e) Prejudice caused by D’s failure to disclose DY-2018 Report and the DY-2019 Report, resulting in the inability on P’s part as a director of HIL to understand HIL’s true financial performance in Dongguan.

11.  On the facts, and with reference to Arboit and Koo Ming Kown v Chan Chi Mong, Hopkins [2020] HKCFI 3128, Mr Lam submits that:

(a) If this Court finds it appropriate to impose a sentence of imprisonment, the term should be as short as possible, for example in terms of weeks;

(b) If this Court otherwise finds that a fine is appropriate, the sum should be at least HK$200,000.

D. Discussion

12.  I reiterate that contempt of civil court orders is a serious matter. Court orders are made to be obeyed. Proper administration of justice depends on that. Any sentence for contempt is not just to punish, but to deter, and to signal to the public at large the singular importance of obeying court orders.

13.  Whilst the seriousness of the matter ought not to be lost sight of, in passing sentence, I have to take into account all relevant facts and considerations. I have considered in particular the following matters:

(a) On the question of purging, whilst D has made some efforts towards that, I accept Mr Lam’s submission that any purging by D is late, and has not result in the disclosure to P anything material which P had not had access to. The purging is at best formalistic and technical;

(b) But on the other hand, a number of the factors put forward by Mr Yau on D’s behalf are valid ones;

(c) First, there is no evidence that D set off to defy the Subject Orders. There is no evidence of any contumacious intent. Whilst the existence of such an intent is not required to establish contempt, the existence of one will be an aggravating factor. There is no evidence that such an aggravation had existed;

(d) Next, whilst contempt has been proved, D had otherwise effected substantial disclosure, and a lot of them within the extended deadline;

(e) In respect of the proven acts of contempt, they relate to limited items, both in terms of the actual number and the categories involved. I accept Mr Yau’s oral submission that D’s culpability may have to be considered also in such context;

(f) Further, the prejudice which Mr Lam says P has suffered is general in nature. There is no evidence of any specific prejudice arising from his inability as a director of HIL to understand HIL’s affairs as a result of the non-disclosure of DY-2018 and DY-2019 reports, whether in terms of monetary loss or otherwise.

14.  On the facts of the present case, I am not satisfied that this is one which calls for imprisonment, imprisonment being the sanction of the last resort.

15.  However:

(a) I do not believe so, but if Mr Yau, by submitting that the contempt in the present case took the form of “lack of care”, means to say that the acts of contempt in the present case are not serious, I have no hesitation in rejecting that;

(b) At §71(j) of the Judgment, when discussing D’s state of mind, I found and observed that “D’s conduct is clearly not ‘not intentional or reckless, but merely casual and accidental and committed under circumstances which negative any suggestion of contumacy’.” In my view, D’s conduct was reckless. As I further found and observed in that same paragraph, “Unless all emails had been properly and diligently checked, documents within the ambit of the Subject Orders would be missed. That was simply to be expected. As it turned out, the DY-2018 and DY-2019 Reports were missed. D failed to carefully and diligently check the emails and the attachments. In the circumstances known to him, such failure was entirely unreasonable”;

(c) Such unreasonable conduct, such recklessness, though short of contumacious intent, is a highly culpable state of mind, is one that had to be viewed seriously particularly in the context of contempt for non-compliance of orders to disclose, would render such orders nugatory if tolerated, and hence is one that has to be met with the proportionate sentence.

16.  On the facts of the present case, bearing in mind the above, and having made reference of the authorities, I am of the view that a fine of HK$150,000 is an appropriate one.

E. Conclusion on sentence

17.  For the above reasons, I order that D is to be fined the sum of HK$150,000. Having heard Mr Yau, I order that that sum is to be paid within 28 days.

F. Costs

18.  On costs, I refer to §102 of the Judgment where I reserved costs in the sense as explained therein. I now deal with all costs of and occasioned by the OS.

19.  I accept Mr Yau’s submissions that D has been partially successful in respect of certain aspects of P’s application. I refer to my Judgment in this regard. However, the bottom line is that D has been found guilty of contempt. I also repeat my observations made above in respect of the seriousness of the matter, and D’s reckless and entirely unreasonable conduct as highlighted above. In my view, having considered all facts, I order that D shall bear 75% of all costs of and occasioned by the OS on an indemnity bass, to avoid any unnecessary agreement with certificate for counsel when one was engaged, to be taxed if not agreed.