JOE ZHIXIONG ZHOU v. SAIF PARTNERS II L.P. AND ANOTHER

HCCL 16/2016

[2020] HKCFI 2952

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO 16 OF 2016

(TRANSFERRED FROM HIGH COURT ACTION NO 1551 OF 2010)

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HCMP 208/2020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 208 OF 2020

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(Heard Together)

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D E C I S I O N

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1.  There are 2 Summonses before the court by which Zhou[1] seeks leave to appeal against the Decision of this court dated 17 September 2020 (“Decision”), as well as a stay of proceedings pending appeal.

2.  The Decision dealt with 2 applications by Zhou, namely, (a) to set aside an order granting leave to SAIFs to commence committal proceedings against him (“Leave Challenge”); and (b) set aside another order dispensing with personal service and for substituted service of the Originating Summons (“OS”) against him for the contempt proceedings (“Jurisdiction Challenge”).  Both applications were dismissed.

3.  Zhou contends that there are reasonable prospects of success in the grounds of appeal contained in the draft Notices of Appeal: see Wong Kar Gee Mimi v Severn Villa Ltd [2012] 1 HKLRD 887, §§29-30.  Zhou also relies on s.14AA(4)(b) of the High Court Ordinance, Cap 4: “there is some other reason in the interests of justice why the appeal should be heard”.

4.  With respect, I agree with SAIFs that the proposed grounds of appeal are re-gurgitation of the arguments heard and dismissed by the court.  I can find no real analysis in the skeleton arguments of Zhou on why the court had erred in the Decision. 

5.  I was unable to find merit in Zhou’s Challenges at the previous hearing, and I remain of the same view. 

6.  It is contended in ground 3 of the Leave Challenge that the court was confused about the timing where Lin 5^th was filed (Decision, §49).  However, it is clear from the Decision that the timing point was not an important one, and would not have affected the outcome since the court took the view that Lin 5^th was not material for the leave application. 

7.  Notwithstanding my view on the merits of the proposed grounds, I believe that the point of law concerning the necessity to invoke O.11 for service of the OS on Zhou when he had already submitted to the jurisdiction of this court by bringing proceedings against SAIFs (Decision, §§75-79) deserves the consideration of the Court of Appeal.  A decision from the higher court will likely put an end to similar argument by alleged contemnor based on authorities such as Mercedes Benz v Leiduck [1996] 1 AC 284. 

8.  Mr Tang, who appeared for SAIFs, had drawn the attention of this court to Liao Chen Toh v Loyal International Enterprises Co Ltd [2020] HKCFI 2661, where DHCJ Liu gave leave to appeal on precisely the same point of law. 

9.  Accordingly, I would only grant leave to appeal pursuant to proposed grounds (2) and (3) of the Jurisdiction Challenge.  For completeness, although on the same topic, grounds (4) and (6) are mere verbiage. 

10.  As regards the stay, I do not agree with Zhou that the appeal would be rendered nugatory in the absence of a stay due to his submission to jurisdiction by reason of participation in the contempt proceedings: see Rich Village Ltd v Grand Pride Holdings Ltd [2013] 1 HKLRD 389, §9.  Further, Mr Tang had informed the court that a letter will be sent to Zhou confirming that SAIFs will not be taking such point against him. 

11.  I am in agreement with Mr Tang that a stay of proceedings would mean that the contempt proceedings would be kicked into the long grass.  I agree with M Ng J in Chu Kong v Sun Ming [2020] HKCFI 2022, §120, that contempt proceedings should be dealt with “swiftly and decisively”. 

12.  There is already considerable delay in the resolution of the account proceedings.  It is evident from the procedural history that Zhou has no desire to have the account proceedings determined and he is resisting every step of these proceedings.  Having met their payment obligations in favour of Zhou under the Judgment of DHCJ Field, SAIFs have every right to expect the judgment on their counterclaim against Zhou would be resolved without delay.  Equally, SAIFs are entitled to believe that the contempt proceedings may cause Zhou to comply with the disclosure order against him for the purpose of the account proceedings. Thus, a stay would be prejudicial to SAIFs. 

13.  In the premises, I decline the stay application.

14.  Accordingly, the Summons for the Leave Challenge is dismissed.  For the other Summons, leave to appeal is granted on proposed grounds (2) and (3) only. 

15.  As for costs, I make an order nisi that: (i) the costs of the Leave Challenge Summons be paid by Zhou; (ii) ½ of the cost of the Jurisdiction Challenge Summons be paid by Zhou and the remainder be costs in the cause of the appeal. For taxation purpose, taking a global view of the 2 Summonses, I apportion the costs of the hearing equally between the same.

[1] The nomenclature used in the Decision dated 17 September 2020 is herein adopted.