BRINK’S HONG KONG LTD v. LAU SUK MEI also known as GLORY LAU

HCMP 175/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 175 OF 2017

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J U D G M E N T

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Introduction

1.  This is an application of Brink’s Hong Kong Limited (“the Company”), by the originating summons dated 23 January 2017 (“the OS”), for an order for the committal of the defendant, Madam Lau, for her failure to comply with a mandatory injunction granted by this court dated 28 October 2016 and varied on 3 November 2016 (“the Injunction”) in a High Court action under HCA 2775/2016 (“the 1^st Action”).

2.  The Injunction (as varied) is in the following terms,

“The defendant (Madam Lau) do as soon as practicable in any event no more than 48 hours from the service of the Order deliver (the Diamond) to the plaintiff at their business premises … for preservation until the final determination of these proceedings or until further order of the Court.”

3.  It is not in dispute that Madam Lau has never delivered the Diamond to the Company.

Essential background facts

4.  The Company commented the 1^st Action on 25 October 2016 to recover a diamond (“the Diamond”) from Madam Lau by reason of its immediate right of possession of the same as its lawful bailee. It is common ground that Madam Lau and one Mr Zhou entered into a storage agreement dated 2 August 2013 with the Company whereby the two individuals entrusted to the Company the Diamond with an estimated value of US$5 million for storage.

5.  The core complaint of the Company is that on or about 29 January 2014, Madam Lau, without due authorization and knowledge on the part of Mr Zhou, changed the mandate for the purpose of the release of the Diamond by the Company from Mr Zhou alone upon his sole written request to Madam Lau alone upon her request. On the strength of the changed mandate, Madam Lau obtained the release of the Diamond from the Company on or about 12 January 2015.

6.  The Company discovered the problem with the changed mandate when Mr Zhou tried to obtain the Diamond on or about 3 July 2015 without success.

7.  The Company took out a summons on the same day for the Injunction when it issued the writ herein. Madam Lau did not attend the hearing on the return day of 28 October 2016 and this court made an order containing the Injunction (“the 1^st Order”) in the absence of Madam Lau having satisfied that she had been given sufficient notice of the hearing.

8.  On or about 3^rd November 2016, the Company applied to this court for leave to vary the 1^st Order to make it clear that the time for delivery of the Diamond started to run from the date of the service of 1^st Order. This court granted the application and make the second order (“the 2^nd Order”).

9.  On 7 November 2016, Mr Zhou commenced an action (“the 2^nd Action”) under HCA2900/2016 against the Company for, among other things, the return of the Diamond. The Company on or about 31 March 2017 issued third party proceedings against Madam Lau.

9.  On or about 17 November 2016, a private investigator employed by the Company (“the Investigator”) personally served the 1^st and 2^nd Orders with a penal notice on Madam Lau in the street after she alighted from a private car (“the purported personal service”). The entire service process was video-taped.

10.  On 14 December 2015, Madam Lau filed her defence in the 1^st Action acting in person. There, she insists that she at the material time was the lawful owner of the Diamond and she was entitled to change the mandate. She said nothing about the sale of the Diamond.

11.  On 11 January 2017, this Court granted leave to the Company to commence committal proceedings against Madam Lau in light of her failure to comply with the Injunction. Pursuant to the leave, the Company issued the OS on 23 January 2017.

12.  The OS and all the supporting documents including the Statement for Committal were served by substituted service on Madam Lau. On the first hearing day of the OS, i.e., 23 May 2017, Madam Lau was represented by counsel. Her counsel indicated to the court for the first time that Madam Lau had sold the Diamond well before the grant of the Injunction and that she intended to make an application to discharge the Injunction. This court then adjourned the hearing of the OS to 14 September 2017 for a full day trial.

13.  On 13 June 2017, Madam Lau through her solicitors took out a summons (“Madam Lau’s Summons”) to discharge the Injunction and she filed her affirmation on 14 June 2017 (“the Affirmation”) for the purpose of both her application and her opposition to the committal proceedings.

14.  On 14 September 2017, Madam Lau appeared in person and she asked for an adjournment so that she could look for legal representation. This court acceded to her request and warned her of the possible legal consequences of the committal proceedings. A new date for the adjourned hearing of the OS was fixed by this court in front of the parties and this court made it clear to the parties that both Madam Lau’s Summons and the OS would be dealt with in sequence on 9 November 2017.

15.  On or about 2 September 2017, the 1^st Action and the 2^nd were consolidated pursuant to the order of Register Ho.

16.  Immediately before the hearing this morning, a firm of solicitors (“the Firm”) applied for cessation to act for Madam Lau in the consolidated actions. The Firm had been engaged by Madam Lau to handle her application to discharge the Injunction and counsel was instructed for her. However, they failed to contact her when the hearing was approaching. As a result, the Firm failed to obtain any instruction from her. I granted the application accordingly.

17.  On account of her absence, this court dismissed Madam Lau’s Summons.

18.  Now I turn to the OS. There is no issue concerning the service of the OS and the notice of the hearing of the same. I am satisfied that Madam Lau was well aware of the hearing this morning given the history of this matter including the hearing of 14 September 2017.  Despite the absence of Madam Lau, I still have to examine the evidence filed by the parties and be satisfied beyond reasonable doubt that Madam Lau knowingly breached the Injunction.                   

Liability

Propriety of the purported personal service

19.  In the Affirmation, Madam Lau made the following allegation about the purported personal service effected by the Investigator:

“On 17 November 2016, a male stranger now known as a private investigator, Wong Ying Cheung handed over an envelope to me by the roadside of Shell Street. I did not hear anything said by the male, I subsequently threw the same into the rubbish bin as I thought they were junk advertisements. I have not thrown the envelope onto the front hood of CC422. Put it simply, I was unaware and did not know of the contents of the envelope being (the 1^st and 2^nd Orders).”

20.  I have read the affirmations of the Investigator. The unchallenged evidence is that he passed an envelope to Madam Lau containing the 1^st and 2^nd Orders with a penal notice. His allegation is that before handing over the envelope to Madam Lau, he told her in punti, “Ms Lau Suk Mei, court documents for you.” (劉淑媚小姐，法庭文件，俾你嘅) He further alleged that he saw her placing the envelope onto the front hood of the private car.

21.  I have also seen the video-recording. It clearly shows that the Investigator did tell Madam Lau that he was about to pass some court documents to her. Madam Lau’s account is not reliable and she could not possibly have thought erroneously that the envelope contained junk promotional materials only. Her evidence in this regard must be rejected.

22.  In fact, regardless of how Madam Lau subsequently disposed of the envelope after she had received from the Investigator, proper personal service of the 1^st and 2^nd Orders has been effected and amply borne out by the evidence of the Investigator.

Breach of the Injunction

23.  Next, I have to be satisfied that Madam Lau breached the Injunction.   As explained above, Madam Lau accepts that she has never complied with the Injunction but her contention is that the Diamond had long been sold and so she could not possibly fulfil the obligation under the Injunction.

24.  Her evidence of the alleged sale of the Diamond is tenuous in the extreme. In the Affirmation, she merely alleges that she sold the Diamond to an unidentified buyer from the Philippines in or about June 2015. She fails to give any particulars of the alleged sale. She further avers that she might produce documents to the alleged sale and she needs time to locate such documents in support. She lastly craves leave to produce such documents when they become available.

25.  Despite the unequivocal warning given by this court on 14 September 2017, Madam Lau has failed to substantiate the allegation at all. It is inconceivable that the alleged sale generated no documents. As rightly pointed out by Mr Wong, counsel for the Company, whilst Madam Lau was able to produce the invoice dated 15 July 2013 evidencing her purchase of the Diamond in Israel at the price of US$6.5 million, there is no reason why she could not produce any documentary proof of the alleged sale.

26.  Given the possible dire consequences of these proceedings brought home to her by this court at the hearing on 14 September 2017, there is no reason why Madam Lau did not make serious efforts to substantiate her allegation of the sale of the Diamond. She should do her utmost to procure the alleged buyer of the Diamond to give supportive evidence for her. At the very least, she should be able to produce some documentary proof of the payment and receipt of the sale proceeds. There is no credible evidence of the alleged sale other than a bare assertion in the Affirmation.

27.  In the premises, I am driven to the inescapable conclusion that the alleged sale is a fiction. There being no other evidence about the current whereabouts of the Diamond, I have no reason to believe that Madam Lau had already ceased to have the possession and custody of the Diamond before the grant of the Injunction. She has merely opted not to comply with the Injunction blatantly.

28.  In the circumstances, I am satisfied beyond reasonable doubt that Madam Lau knowingly and willfully failed to comply with the Injunction. The contempt is thus proved to the requisite standard of proof by the Company.

Sanction

29.  In this connection, I have referred to a recent judgment of Mr Justice Chow in Kokkia Inc v Microgear Technology Ltd., unreported, HCMP41/2017, 4.9.2017. There, the judge reviewed some authorities relating to the sentence for contempt of court. One of them was Winsome Paintis Company Limited v Wong Yin Sun, unreported, HCMP3185/2002, 14.11.2002 where DHCJ A Cheung (as the Chief Judge then was) passed a sentence of 21 days’ imprisonment on a contemnor for his failure to deliver certain infringing items in our trademark infringement case. Chow J then likewise sentenced the defendant who was absent to 21 days’ imprisonment for his failure to comply with an injunction.

30.  The breach of the Injunction in the present case is both cynical and flagrant. Madam Lau has all along been less than frank in her evidence and her conduct is very suspicious.  

31.  To maintain the proper administration of justice in Hong Kong, a clear message must be sent to the public that court orders must be strictly complied with. Absent any mitigating factors, this court should mark the disapproval at Madam Lau’s knowing and serious breach of the Injunction by an immediate custodial sentence.

32.  Having looked at the matter in the round, I commit Madam Lau to prison for 28 days. I further make a costs order nisi that she is to pay the costs of the OS to the Company on an indemnity basis.