EXCEL NOBLE DEVELOPMENT LTD. AND OTHERS v. WAH NAM GROUP LTD. AND OTHERS

CACV 910/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. CACV 910 OF 2000

(ON APPEAL FROM HCA 12439 OF 1999)
(CONSOLIDATED WITH HCA 6210/99 AND HCA 6211/99)

____________________

J U D G M E N T

____________________

Hon Rogers VP:

1. This is an appeal from a judgment of Beeson J given on 20 November 2000. The application before the judge below was a motion by the 2nd and 3rd plaintiffs to commit the 2nd contemnor, Matthew Chan Kwok Choi, for his contempt in relation to an order which had been made in respect of the 1st defendant, the 1st contemnor, Wah Nam Group Limited, on 17 December 1999. Originally, the motion had also been in respect of the 1st contemnor. That application against the company was not pursued at the hearing of the motion because by then the company had been put into liquidation.

2. The judge found that the 1st contemnor had been guilty of contempt in failing to serve an affidavit informing the plaintiffs of the value of any of its assets, as opposed to assets owned by the 1st contemnor's subsidiaries, and in failing to file such an affidavit in time. The judge ordered that Matthew Chan, the 2nd contemnor, should be committed to prison for 21 days for the contempt of the 1st contemnor. It is against that order that this appeal is brought. As part of the order, the judge below suspended its operation pending appeal.

3. The first point in this appeal concerns the exercise of the judge's discretion under Ord. 45 r. 7(7) to dispense with service, upon the 2nd contemnor, of the order that had been made against the company, which was alleged to have been breached. It is necessary to set out some of the history of the proceedings before examining the issues.

History of the proceedings

4. The writ in this action was issued in August 1999. It claimed relief in respect of claims arising under four convertible redeemable Notes. Initially the action was brought against the 1st contemnor only. The remaining three defendants became parties subsequently. In October 1999 the plaintiffs issued a summons seeking a mareva injunction. The form of the draft order, the subject of the summons, included an order restricting the disposal of assets up to a value of HK$93,830,026 together with prohibitions on the disposal of various specified assets. Those assets included assets which were said to belong to the 1st contemnor's subsidiaries. The order sought by the summons also included a provision requiring the 1st contemnor to inform the plaintiff immediately in writing of all assets of an individual value of HK$10,000 or more, whether inside Hong Kong or outside, and a provision that the information had to be confirmed in an affidavit to be provided within a period which remained to be specified.

5. When the first hearing of the summons took place on summons day the court gave directions and accepted undertakings on behalf of the 1st contemnor.

6. The matter then came before Beeson J on 13 December and there was an extended hearing which took place over a period of four days. The court's decision was given on 17 December. The court ordered an interim payment under the plaintiffs' claim of HK$6 million and ordered a further HK$24 million to be paid into court. The judge then ruled that the mareva injunction should be granted. She expressed the view that she was satisfied that there had been shown to be a real risk that the 1st contemnor's assets had been dealt with in the past in such a way as to lead to the conclusion that they were likely to be dissipated. The judge said that the company appeared to be at the mercy of the 3rd defendant, Mr William Chan, who was the controlling shareholder. On the 1st contemnor giving various undertakings, the mareva injunction was stayed pending appeal and the terms of the injunction were not finalized. There is no dispute between the parties that Mr Matthew Chan was present in court on 17 December but there is no indication as to what role he played as regards the proceedings.

7. On 8 January 2000 the 1st contemnor issued a summons seeking leave to use the proceeds of a loan which it was contemplating securing on the strength of security. The use of those assets as security was thought to impinge upon the undertakings which had been given and hence the application. That application was dismissed on 13 January and the judge lifted the stay of the mareva injunction. The terms of the mareva injunction differed from those of the application to the extent that the amount of the mareva injunction was limited to HK$61 million in view of the order for interim payment and payment into court. The terms of the disclosure order were varied from that in the draft to limit the value of the individual assets, which needed to be disclosed, to those of an individual value of HK$200,000 or more; the affidavit was required to be filed within 28 days of the service of the order on the 1st contemnor.

8. No indication is given in the papers as to whether there was any disclosure of assets in writing as required in para. 2.1 of the order. A copy of the order was served on the 1st contemnor's solicitors on 22 January 2000. There was service of a copy of the order on the 1st contemnor on 24 January 2000. There is no dispute between the parties about the validity of that service or about the fact that it was endorsed with a penal notice. In view of the stipulation that time for provision of the affidavit would expire 28 days after service, the affidavit should, at the latest, have been provided by Monday 21 February 2000.

9. It might be observed that, on 23 February 2000, a winding up petition was presented against the 1st contemnor by parties other than the present plaintiffs but in respect of amounts due arising out of related matters. Eventually, the 1st contemnor was wound up by order dated 26 July 2000.

10. An attempt was also made to serve the mareva injunction order on the 2nd contemnor. On 28 January 2000 a copy of that order was put through the letter box of the 2nd contemnor's residence. There is no dispute that there was a penal notice directed to the 2nd contemnor endorsed upon the copy of the order, albeit the penal notice was in a form appropriate for an order requiring a defendant to abstain from doing an act rather than one which was appropriate for a mandatory injunction.

11. The 2nd contemnor had been appointed a director of the 1st contemnor in March 1999. The evidence shows that on 1 July of that year he became an executive director. At that stage Mr William Chan was also an executive director. Mr William Chan ceased to be a director on 31 December 1999. Thereafter, during the period relevant for these proceedings the 2nd contemnor remained the only executive director of the 1st contemnor apart from a Mr Yong, although there were two other directors. Mr Yong was a long-standing director of the 1st contemnor. In January 2000 he became chairman of the 1st contemnor. It appears that Mr Yong had significant business interests in Malaysia.

12. No affidavit giving details of the 1st contemnor's assets was filed by 21 February 2000. On 11 March 2000 the 2nd contemnor made an affirmation detailing assets which belonged to subsidiaries of the 1st contemnor. There was no indication of any assets of the 1st contemnor itself. It is right to say that it is the plaintiffs' case that the only known assets of the 1st contemnor would appear to be its shareholding in its subsidiaries. No attempt was made to put a valuation upon any such shareholding.

13. Leave to issue committal proceedings was given on 19 June 2000. The notice of motion was served personally upon the 2nd contemnor on 10 July. That notice of motion was vague as to the matters which it was alleged constituted contempt. It alleged contempt had been committed by both contemnors. It was imprecise as to the basis upon which it was said that the 2nd contemnor was said to be in contempt and liable to be committed.

14. The complaints in respect of the notice of motion were eventually aired in this court on 18 October 2000. This court upheld the complaints in respect of the notice of motion and held that it could not be allowed to stand in its then form. Since it had formed part of the argument, this court also drew attention to the distinction between a charge of aiding and abetting a breach of an injunction and an application to commit a director for a company's breach of an injunction under the provisions of Ord. 45 of the Rules of the High Court.

15. The application in respect of the 1st contemnor was not pursued in view of the fact that there had been an order to wind up the 1st contemnor. The application in respect of the 2nd contemnor was heard between 6 and 8 November 2000. At that hearing the 2nd contemnor gave no evidence. Counsel for the plaintiffs made it very plain that the application was made in accordance with Ord. 45 r. 5 of the Rules of the High Court upon the basis of a liability arising because the 2nd contemnor was a director and not on the basis that the 2nd contemnor had aided and abetted the 1st contemnor in breaching the injunction.

16. At the hearing, it was recognised, in view of the points which were to be taken on behalf of the 2nd contemnor, that the provisions as to service under Ord. 45 had not been complied with. Hence the application could not be pursued unless an order dispensing with service was made under Ord. 45 r. 7(7). A substantial part of the proceedings was taken up by argument as to whether there should be such an order. The judge below exercised her discretion to make such an order. In doing so she said:-

"I am satisfied that the 2nd intended contemnor was fully aware of the terms of the injunction which include the disclosure order and I am satisfied that events showed that he must have known or that it would have come to his attention that the stay on the Mareva had been lifted on 13 January and that the disclosure order had been perfected. And in particular, the fact that the public announcement was made on the 14th indicates that that was known.

At the very latest, the terms of the disclosure order would have been known to him by the time he made his affirmation. So, I exercise my discretion and dispense with the personal service in respect of this matter."

17. The decision on the application was reserved. The judge gave her decision in writing on 20 November. In that decision she said:-

"... I am satisfied beyond reasonable doubt that contempt has been established by the Plaintiff against C2, Mr Matthew Chan Kwok Choi, in terms of non-compliance with the order of disclosure made on 13 January 2000."

18. The reasons given indicate that the judge held that contempt was committed because the affirmation was not filed on time and because the assets which were referred to in the affirmation of 11 March 2000 were assets of the 1st contemnor's subsidiaries and not assets of the 1st contemnor.

19. On this appeal a number of points were taken on behalf of the 2nd contemnor, but it is fair to say that by far the major point taken was that no order should have been made under Ord. 45 r. 7(7), dispensing with service of the injunction order. Objection was also taken on the ground that the judge had permitted amendment of the notice of motion to delete the complaints in respect of the alleged over valuation of the assets and to permit allegations in respect of the identification of assets of subsidiaries rather than directly held assets. The 2nd contemnor also appeals the sentence of imprisonment.

Dispensation of service under Ord. 45 r. 7(7)

20. In order to consider the exercise of the discretion to dispense with service under Ord. 45 r. 7(7) it is necessary to consider briefly the basis of liability of directors and other officers in respect of injunctions made against their companies.

21. Ord. 45 r. 5(1) permits, subject to the provisions of the rules, the enforcement of judgments or orders made against a body corporate by a writ of sequestration against the property of a director or other officer or an order of committal against any director or other officer of the body.

22. The history of Ord. 45 r. 5 was considered by Anthony Lincoln J in Director General of Fair Trading v Buckland [1990] 1 WLR 920. He traced back the genesis of the provision to section 33 of the Common Law Procedure Act 1860. In respect of that provision and, indeed, the provisions in the rules of court after the repeal of that Act, he said that they were procedural in the sense that they provided methods for enforcing the law against the bodies and persons who otherwise were liable for contempt of court under the general law. The decision in that case is, itself, of marginal interest since it turns upon its own facts.

23. Ord. 45 r. 7 lays down the pre-requisites to enforcement of orders under Ord. 45 r. 5. Ord. 45 r. 7(3) provides that:-

"Subject as aforesaid, an order requiring a body corporate to do or abstain from doing an act shall not be enforced as mentioned in rule 5(1)(ii) or (iii) unless -

(a) a copy of the order has also been served personally on the officer against whose property leave is sought to issue a writ of sequestration or against whom an order of committal is sought, and

(b) in the case of an order requiring the body corporate to do an act, the copy has been so served before the expiration of the time within which the body was required to do the act."

24. Then Ord. 45 r. 7(4) provides for the endorsement of what is referred to as the penal notice upon the copy of the order. The effect of the penal notice is to warn the person so served that:-

"... if the body corporate disobeys the order, he is liable to process of execution to compel the body to obey it."

25. The basis of liability of a director in respect of injunction orders made against his company was referred to by Hunter JA in the case of Nicolas Pappadis and Another v Chan Shing-sheung, Barry and Others [1989] 2 HKLR 511. At page 519 Hunter JA said:-

"The second basis upon which a director can be committed for contempt is under this overall description of aiding and abetting as this Court held in the case of Cartier International B.V. and Others v. Kaybee International Ltd. [1985] HKLR 127. There is a very big difference between these two approaches. Under Order 45 no moral blame or necessarily knowledge, need be shown in the director. It is sufficient to show that the order was made against the company and served upon him. Then it is the director's personal obligation to ensure that that order is complied with. When you are dealing with aiding and abetting the situation is quite different. What has to be shown is personal misconduct on the part of the director."

26. Whilst Hunter JA did say that it was not necessary to demonstrate moral blame or knowledge, he did so in the course of explaining that what was under consideration in respect of Ord. 45 liability was the director's personal obligation to ensure that the particular order was complied with.

27. I see no difference in approach in what Hunter JA said, with the approach of Woolf LJ in Attorney-General for Tuvalu and Another v Philatelic Distribution Corporation Limited [1990] 1 WLR 926. At page 938 he referred to the judgment of Anthony Lincoln J in the Buckland decision and, in particular, to a passage which might lead to the conclusion that liability of a director under Ord. 45 r. 5 could only exist if the director were otherwise liable under the general law of contempt. At 938C, Woolf LJ pointed out that the facts of the Buckland case were somewhat peculiar. He said:-

"That remark was however made in a case where there was no finding made against the director of culpable conduct and it should not be taken as meaning that it is only where a director has actively participated in the breach of an order or undertaking that Ord. 45, r. 5 can apply. If there has been a failure to supervise or investigate or wilful blindness on the part of a director of a company his conduct can be regarded as being wilful and Ord. 45, r. 5 can apply."

28. Woolf LJ then went on to refer to a judgment of Megaw J, who, in Re Galvanized Tank Manufacturers' Association's Agreement [1965] 1 WLR 1074, spoke in terms of the obligations of responsible officers and those to whom they delegate the handling of matters, in respect of a company's duty to observe orders of the court.

29. These judgments have been referred to in some Hong Kong decisions in particular Interlego AG v Lego New Enterprises Ltd [1995] 3 HKC 186 and Abu Dhabi National Tanker Co. v Lam Ming Chi [1998] 4 HKC 320. In the latter decision it was suggested that there might be a difference in approach between that adopted by the Courts of Appeal in England and in Hong Kong. I do not, for myself, see such a difference in approach.

30. As Anthony Lincoln J pointed out, the provisions of Ord. 45 r. 5 are procedural. A director or other officer of a company who is served with a copy of an injunction does not thereby become a party to the action. The injunction, whether it be prohibitory or mandatory, is still an injunction against the company and not one against the officer. If the injunction is breached it is breached by the company.

31. The officer's obligation is to use his position as an officer to secure compliance with the injunction. But there is no absolute liability placed upon an officer, who has been served with a copy of an order, in the event that the company may be in contempt. It must be remembered that an officer could for example include the auditor. The process of service under Ord. 45 r. 7 is a pre-requisite to enforcement against the officer under Ord. 45 r. 5; it is a process of making clear to the officer the terms of the order and the fact that the officer must use his position as an officer of the company to effect compliance.

32. The argument that a director was absolutely liable in cases where the company itself had been in contempt was rejected by Sir Alan Huggins VP in the Cartier case at page 132C-F. I refer, in particular, to the sentence:-

"It is one thing to punish a director for the company's failure to do something where it lies within the power of the director to ascertain whether the order has been obeyed and to ensure compliance if it has not: it is another to punish him if he had no reasonable opportunity to ensure compliance."

33. Leaving aside the question of aiding and abetting a breach of an injunction by a company, the liability of an officer for a company's breach of an injunction is thus dependent upon that officer carrying out his own responsibilities as an officer of the company. In that context, it can be seen that the procedural requirements in relation to mandatory injunctions, in particular, reflect the following: first that the officer must be fully aware of the terms of the order with which the company must comply, second that the officer must have that knowledge at a time when he can use his position as an officer to secure compliance and third that the officer should be aware that, if he does not so use his position, steps may be taken against him personally to enforce compliance.

34. Those principles are reflected in the Rules of the High Court: a copy of a mandatory order must be served personally upon the director, prior to the time when the company must take whatever steps are necessary to comply with that order and the copy served must have a notice which draws that officer's attention to his responsibility as an officer to secure compliance.

35. Before turning to the general provision of Ord. 45 r. 7(7) it can be observed that in relation to prohibitory injunctions Ord. 45 r. 7(6) gives the court power to enforce an injunction notwithstanding absence of service of a copy of the order provided the person served has notice of that order, either because he was present when the order was made or because he was otherwise notified of the terms of the order.

36. The power to dispense with service of a copy of an order under Ord. 45 r. 7(7) is a general power which may be exercised in relation to both prohibitory and mandatory injunctions. It gives the court an "unfettered" discretion. It reads:-

"Without prejudice to its powers under Order 65, rule 4, the Court may dispense with service of a copy of an order under this rule if it thinks it just to do so."

37. In my view although the discretion of the court is unfettered the principles which found a director's or other officer's responsibility in respect of an injunction against the company have to be borne in mind when consideration is given to the court's power to dispense with service of a copy of the order.

38. Turning to the facts of this case the 2nd contemnor was present in court on 17 December when the judge considered the application for a mareva injunction. It is by no means clear what role he played other than being present in court. It is clear, however, that there was no mention of the disclosure part of the order in the judgment delivered on that date. What was under consideration in the judgment was the restriction upon the disposal of assets. It might also be mentioned that, unlike Mr William Chan, Mr Matthew Chan was not himself a party to the action.

39. As already observed the form of disclosure order made on 13 January 2001 differed from the draft order. It is not alleged that the 2nd contemnor was present in court. Rather, it is said that the company's general manager was in court.

40. In her reasons for dispensing with service, the judge referred, in particular, first of all to the public announcement which was made on behalf of the 1st contemnor on 14 January 2000. There is no dispute that Mr Matthew Chan gave his approval for the making of that announcement. The announcement was one of a series announcements which referred to the order restricting the disposal of assets. These announcements were made, no doubt, to comply with the listing rules of the stock exchange. Neither the announcement of 14 January nor any of the other announcements referred to the disclosure order. Simply from the fact of the announcement, therefore, it cannot be said unequivocally that Mr Matthew Chan had read the terms of the disclosure order. Albeit Mr Matthew Chan bore responsibility for the announcement, if probabilities are to be taken into account the announcement was likely to have been drafted by professional advisers and perhaps the company secretary.

41. Importantly however the judge took into account the fact that the terms of the disclosure order were known to Mr Chan at the time he made his affirmation. That however was well after the time for compliance with the order. Given the nature of the responsibility of a director to secure compliance with the order insofar as he can exercise his power as an officer of the company, the fact that the director was aware of the terms of the order at a time when compliance was no longer possible must be irrelevant.

42. In those circumstances, in my view the exercise of the discretion by the judge below must fall to be reviewed by this court. I consider however that the court could and should in the circumstances of this case have exercised its discretion under Ord. 45 r. 7(7). In the first place there is the 2nd contemnor's own position within the 1st contemnor. It would appear that he was the director responsible for the day to day administration of the 1st contemnor from the beginning of January, thus before 13 January, until at least the time when his affirmation was filed. As such he could be expected to have knowledge of major litigation of the 1st contemnor, particularly that which related to restrictions on disposal of assets involving a mareva injunction. That, in itself, might not however be sufficient particularly in the circumstances of this case where it seems that at the same time the 1st contemnor was under considerable pressure from other creditors and, indeed, a winding up petition was about to be presented by other parties.

43. Crucial, in my view, to this question was the delivery of a copy of the order, with a form of penal notice. It was put through the letterbox of the 2nd contemnor's residence. This factor played no part in the judge's reasoning and indeed appears to have been largely overlooked in the argument below. That form of delivery would be sufficient to constitute service in respect of a writ. Although insufficient for compliance with Ord. 45 r. 7, it would, in my view, be sufficient in the circumstances of this case to permit the court to exercise its discretion to make an order dispensing with service. This would be all the more so in the absence of any evidence from the 2nd contemnor that he was unaware of this copy of the order. The position might have been different had the 2nd contemnor given evidence that he never received the order which had been left for him at his own home. In these present circumstances, in the absence of evidence to the contrary the court could conclude that the 2nd contemnor knew of the terms of the order before the time expired when it had to be complied with and that he knew that the plaintiffs required him to exercise his powers as a director to ensure the 1st contemnor complied with the order. I would therefore not disturb the order dispensing with service of a copy of the injunction order.

The contempt

44. In my view the injunction order was breached by the failure of the 1st contemnor to file an affirmation. The breach of the order was complete when the time for service of the affirmation expired. If an affirmation had been filed thereafter it would not have avoided the order being breached. It would, no doubt, be a factor which could have been taken into account in mitigating the seriousness of the breach.

45. In the circumstances of this case, therefore, it appears to me that the 1st contemnor was in contempt of court in failing to file an affidavit as required by para. 2 of the mareva injunction order. In my view, the 2nd contemnor is liable to be committed on the basis that he did not use his position as an officer of the 1st contemnor to secure the 1st contemnor's compliance with the order. He was, as has been indicated, the person with the ultimate effective day to day control of the 1st contemnor. He knew of the order. He knew that he had to use his position as an officer of the 1st contemnor to secure compliance. He made an affirmation which purported to constitute belated compliance on the part of the 1st contemnor. There is no apparent reason why he could not have seen to it that the 1st contemnor would file an affidavit within the time allotted. Since the 2nd contemnor has filed no evidence to explain what steps he took to secure the 1st contemnor's compliance or as to what other party was responsible within the 1st contemnor for ensuring the compliance, I consider that on this basis he is liable to be committed under Ord. 45 r. 5.

46. The question then arises as to whether the form of the affirmation which was eventually filed gives rise to a separate ground of contempt and a separate ground upon which the 2nd contemnor can be held responsible for the 1st contemnor's non-observance of the order.

47. In this context the nature of the complaint in respect of the affirmation has to be considered against not only the background of the case but in terms of the mareva injunction order itself. The judge refused to allow the plaintiff to proceed with the complaint based upon the fact that the assets referred to had been pledged. The complaint which was allowed to be pursued was that the affirmation referred to assets of subsidiary companies of the 1st contemnor and not to directly held assets. The ownership of the assets which were identified was plain on the face of the affirmation. There was no attempt to disguise this in the affirmation. Moreover, the terms of the injunction order restricting disposal of assets specifically covered not only the assets of the 1st contemnor but assets of its subsidiaries. Indeed, some of these specific assets owned by a subsidiary of the 1st contemnor are the subject of para. 1(1)(ii) of the order. The correctness of making such an order, at least in the form it took, was not a matter that was before this court and therefore I say no more about it.

48. There was therefore, in my view, no overt attempt to confuse or deceive the court, or indeed the plaintiffs, that the assets referred to were directly held assets. There was simply, the filing of an affirmation which did not provide the information which was required by the order. Whereas the late filing of an otherwise adequate affirmation might be a mitigating factor, those circumstances did not prevail in this case. There could however be no additional breach of the order simply because an inadequate affirmation was filed out of time. Neither do I consider that, in this case, it is a particularly exacerbating factor over and above the non-compliance with the order.

49. As I have mentioned, this case does not concern a situation where a misleading or deceptive affidavit has been filed. That might constitute a separate form of contempt as being an event seeking to mislead or deceive the court.

50. The judge said in her reasons that she held the 2nd contemnor to be guilty of contempt. In doing so she reflected the phraseology of the notice of motion. There was no analysis of the 2nd contemnor's conduct which would give rise to a conclusion that he was in contempt or to a liability on his part for a contempt committed by the company. The order which was eventually approved refers to the 1st contemnor's contempt and orders that the 2nd contemnor be committed to prison. Despite the fact that the 2nd contemnor is technically not the party which committed the contempt, the order for his committal as an officer of a company should have recited the basis upon which his committal as an officer was ordered as well as the contempt of the contemnor company. The purport of form 85 of the Rules of High Court is that the person who is committed should be informed in the order precisely what he, personally, has done or failed to do.

51. In my view, despite the absence in either the judge's reasons, or in the order, of identification of the basis of the 2nd contemnor's liability, the order holding that the 2nd contemnor was liable to be committed for the breach of the order by the 1st contemnor should not be disturbed. In view of the conclusions to which I have come in respect of the nature of the contempt it is unnecessary to deal with the subsidiary point raised on behalf of the 2nd contemnor that the motion should not have been allowed to proceed in respect of the allegation that the affirmation referred to assets of subsidiaries and not the holding company. It remains to be stated that even if the point had been relevant I do not consider that to have allowed the plaintiffs to have proceeded upon such a complaint would have been wrong.

52. Before concluding this part of the judgment it is appropriate to observe that when this appeal was argued there was in the bundle a draft order of the court below. The plaintiffs had not previously drawn up an order and one had not been approved or entered. The 2nd contemnor's solicitors had submitted the order in the bundle as a draft order. On the day following the conclusion of the hearing of the appeal the judge in the court below approved a form of order which, unbeknown to this Court, had been belatedly submitted on behalf of the plaintiffs. This situation is highly unsatisfactory.

Sentence

53. The 2nd contemnor appeals the sentence of 21 days imprisonment on the basis that it is too severe. Given the circumstances of the case where there has been a failure to comply with an order of the court and where there is no evidence to suggest that compliance was in any way difficult or impossible, it seems to me that a sentence of imprisonment would not be inappropriate. This would be particularly so in a case where the sentence was designed to enforce compliance. On this appeal, however, Mr Sussex SC, appearing on behalf of the plaintiff, indicated that matters had changed from the time of the hearing of the motion. The 1st contemnor was now in liquidation and there was now no question of that matter being reversed on appeal. In those circumstances, far more information would now be available than could have been obtained under the order which was sought to be enforced. Whilst supporting the decision below, Mr Sussex said that the plaintiff's position was that it derived no satisfaction or benefit from seeing the 2nd contemnor sent to prison for whatever period.

54. In my view, although the sentence imposed by the judge cannot be criticised, it is now no longer necessary for the 2nd contemnor to serve a sentence of imprisonment. To do so would serve no useful purpose other than possibly emphasising for the benefit of others the importance of the observance of court orders. That in my view can be done equally as well by an indication that a sentence of imprisonment for a wilful failure to observe a court order can often be appropriate. Given the change in circumstances however it would be appropriate in this case to set aside the order for imprisonment. The judge below ordered that the costs of the motion to commit should be on a full indemnity basis and in my view that was appropriate.

55. The appeal should therefore be allowed to the extent of setting aside the order for imprisonment. In my view there should be an order nisi that the costs of this appeal should be to the 2nd and 3rd plaintiffs on a party and party basis.

Hon Keith JA:

56. I agree.

Hon Le Pichon JA:

57. I agree.