CHINA HARBOUR ENGINEERING LTD v. SUEN WAH LING TRADING AS KONG LUEN CONSTRUCTION ENGINEERING CO

HCCT 27/2005  

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO. 27 OF 2005

_________________________

BETWEEN

_________________________

_______________________

REASONS FOR DECISION

_______________________

1.   Following an examination conducted under O.49B, China Harbour Engineering Company Limited (“China Harbour”) applied for an order to imprison Suen Wah Ling (“Mr Suen”) for a period not exceeding 3 months. The application was opposed.

2.   On 17 August 2009, I dismissed the application after hearing submissions. What follows are my reasons.

Background

3.   Mr Suen trading as Kong Luen Construction Engineering Company (“KL Company”) had a dispute with China Harbour back in 1999. The dispute was referred to arbitration which resulted in 2 awards:

(a) An award on liability and quantum against Mr Suen was published on 17 January 2005. Leave was granted pursuant to s.2GG of the Arbitration Ordinance to enforce the award in the same manner as a judgment to the same effect, and judgment was entered on 19 May 2005 for $2,348,630.51 plus interest.

(b) A further award on interest and costs against Mr Suen was published on 19 April 2006. China Harbour then obtained leave to enforce the award, and judgment was entered on 6 July 2007 for $1,777,746.09 and $2,348,630.51 plus further interest and costs.

4.   In between the two judgments, China Harbour obtained an order from Master de Souza on 28 July 2005 to examine Mr Suen as a judgment debtor under O.49B.

5.   For the purposes of the examination, the learned Master directed Mr Suen on 7 November 2005 to make disclosure on his assets, liabilities, income and expenditure and of his disposal of any assets or income in the following terms (“the Disclosure Order”):

“2. the said Mr. Suen Wah Ling shall as far as possible, supply copies of or make available originals for copying the following documents not later than 21 days before the adjourned hearing and shall also produce the following documents at that hearing:

(a) Passbooks and copies of bank statements for the last 3 years of all bank accounts in Hong Kong and elsewhere in his sole name or jointly with any other person, or of any firm or business of which he is sole proprietor or a partner;

(b) Accounts for the last 3 years of any business in which he is sole proprietor or a partner or a shareholder in the case of a private company;

(c) Tax returns and assessment of his for the last 3 years;

(d) All shares and stock certificates in his name;

(e) The deeds or Land Registry entries in respect of all property in his name or owned beneficially by him;

(f) Registration details of all vehicles owned by or in his name;

(g) All documents showing outgoings and liabilities, including copies of any other judgments of a court entered against his name;

(h) Wages or salary slips from his employer for the last 3 years.”

6.   The examination commenced on 31 March 2008 before Master Yuen and went part-heard. Parties have no objection for the examination to be continued before me as Master Yuen has since resumed her duties in the District Court and there is a full transcript of the evidence taken before Master Yuen. The examination concluded on 29 August 2008 and submissions were made on 15 May and 17 August 2009.

7.   Although Mr Suen was not legally represented during the course of his examination, he has instructed lawyers to make submission on his behalf. His counsel (Mr Wu) applied on 15 May 2009 to produce some additional documents[1] for the purpose of the examination. Mr Choi (counsel for China Harbour) raised no objection and I granted the application. Neither Mr Choi nor Mr Wu has applied to re-open the examination to put further questions to Mr Suen based on these additional documents.

The relevant law

8.   O.49B, r.1A(2) provides that:

“The judgment debtor shall, at his examination, make a full disclosure of all his assets, liabilities, income and expenditure and of the disposal of any assets or income and shall, subject to the directions of the Court, answer all questions put to him.”

9.   Rule 1B(1) then provides that:

“Where the Court is satisfied, following the examination conducted under rule 1A…, that the judgment debtor:-

(a) is able to satisfy the judgment, wholly or partly; or

(b) has disposed of assets with a view to avoiding satisfaction of the judgment or the liability which is the subject of the judgment, wholly or partly; or

(c) has wilfully failed to make a full disclosure as required under rule 1A(2) … or to answer any question as provided under that rule or Order,

it may, in its discretion, order the imprisonment of the judgment debtor for a period not exceeding 3 months.”

10.   The following legal principles are not disputed:

(a) The jurisdiction of the court to imprison a judgment debtor should be exercised with care and circumspection. The court must be satisfied beyond reasonable doubt that one or more of the grounds set out in Order 49B, rule 1B(1) is established before making an imprisonment order, as the jurisdiction is analogous to proceedings for contempt which have long been recognized as criminal in nature and must be proved to the criminal standard of proof. [2]

(b) In order to invoke rule 1B(1)(b), the judgment creditor has to show that the judgment debtor has disposed of assets. Although the rule does not specify whose assets it was that were being disposed of, it should refer to the assets of the judgment debtor but not others. Furthermore, it must be proved that the disposal was made with a view to avoiding satisfaction of the judgment debt. [3]

(c) For an application under rule 1B(1)(c), non-disclosure must be judged as a whole following the examination rather than on disobedience of any specific order. Furthermore, the failure to make a full disclosure must be deliberate and intentional, as opposed to accidental or negligent. [4]

Discussion

11.   China Harbour is relying on rules 1B(1)(b) and (c) for its application. It contends that:

(a) Mr Suen has wilfully failed to make a full disclosure in:

(i) failing to comply with paragraphs 2(b), (c), (d), (e), (f) and (h) of the Disclosure Order at all; and

(ii) failing to fully comply with paragraphs 2(a) and (g) of the Disclosure Order.

(b) Mr Suen has disposed of assets with a view to avoiding satisfaction of the judgments.

12.   I shall now examine each of these contentions in turn.

(a) Has Mr Suen failed to comply with paragraphs 2(b), (c), (d), (e), (f) and (h) of the Disclosure Order?

13.   Mr Suen has produced over 600 pages of documents in the examination. I think it is fair to say that the documents produced are as much an attempt to comply with the Disclosure Order as a testament of Mr Suen’s obsession in challenging the judgments and the underlying awards.

14.   Mr Choi complains that Mr Suen has failed to disclose any account, tax return and assessment, share and stock certificate, deed or Land Registry record, vehicle registration document, and wage or salary slip in breach of paragraphs 2(b), (c), (d), (e), (f) and (h) of the Disclosure Order. Is that so?

(a1) Accounts

15.   Mr Suen has been ordered to produce “accounts for the last 3 years of any business in which he is sole proprietor or a partner or a shareholder in the case of a private company”. That order was made on 7 November 2005 and so “last 3-years” mentioned in the order should crudely cover the period between 2002 and 2005.

16.   It is common ground that:

(a) Mr Suen was and still is the sole proprietor of KL Company; and

(b) he was a shareholder of Kong Luen Construction Engineering Limited (“KL Limited”) up to 2006, as well as its director and secretary until 2007.

However, Mr Suen has not produced any account from KL Company or KL Limited.

17.   When he was asked why he had not produced KL Company’s accounts, his answer was equivocal and not quite to the point.[5] Regrettably, it was not followed up.

18.   On the other hand, it is Mr Suen’s evidence that KL Company has ceased business for a long time “after the start of the legal proceedings” [6] (or “自從打官司之後”[7]). There have been several legal proceedings between the parties, but he was not invited to clarify which one he was referring to. He could be referring to the very first legal proceedings between the parties in 1999 which culminated in the 2 arbitration awards[8] or the present proceedings for enforcement of the awards which was only commenced in 2005.

19.   Mr Wu argues that if Mr Suen was indeed referring to the 1999 proceedings and KL Company has ceased business since then, then there will be no account between 2002 and 2005 for Mr Suen to produce.

20.   In response, Mr Choi submits that Mr Suen must be referring to the present proceedings because Mr Suen also claimed that “自從打官司之後，根本都冇做嗰啲工程架喇，迫到我都走投無路喇”[9] and only the present proceedings (which is for enforcement) can produce such a result.

21.   I do not accept Mr Choi’s interpretation. My reading of Mr Suen’s testimony is that he was driven to desperation by the fact that he had done no business since the legal proceedings began. So, he could be referring to any of the legal proceedings between the parties.

22.   Bearing in mind the high standard of proof required, I cannot be sure that KL Company was in business between 2002 and 2005 so much so that there were accounts for Mr Suen to produce.

23.   As to why he has not produced the accounts of KL Limited, Mr Suen explained that: “As far as this case is concerned, it involved [KL Company]”.[10] No follow up question was asked.

24.   Mr Wu submits that Mr Suen should have been corrected in the examination and asked to produce the relevant accounts. If Mr Choi was then content with Mr Suen’s answer and elected not to pursue further, it would be unfair for him now to complain about non-disclosure. I agree.

25.   Mr Suen was not legally represented at his examination. Rightly or wrongly, he considered that this case did not involve KL Limited. I say rightly or wrongly because Mr Suen could be right if he was referring to the fact that KL Limited is never a party to this case and he could be wrong as the scope of the Disclosure Order clearly covers the accounts of KL Limited. If he had misunderstood the scope of the order and failed to produce some of the required documents, such failure cannot be said to be deliberate or intentional.

(a2) Tax returns and assessments

26.   The examination concerning Mr Suen’s tax returns and assessments fell into two parts.

27.   The first part focused on KL Company. After noting that KL Company had employed no employee in 2004/05, Mr Choi asked for the tax returns for 2002/03 and 2003/04. Mr Suen replied that KL Company had not carried on business for a long time and there had been several years when no tax return had been sent. He claimed not to recall when the company had last received any income and when he had last filed a profits tax return for it.[11]

28.   In his submission, Mr Choi says KL Company was established in 1987 and had undertaken quite some construction businesses in the past. He observes that KL Limited has received about $24 million out of the business it did with China Harbour[12] and there were several cheques deposited into its bank account between 2002 and 2005[13]. He submits that it should have kept its tax returns and assessments as part of its business records by reason of s.51C of the Inland Revenue Ordinance (Cap.112). This is all the more so as, according to Mr Choi, KL Company had engaged professional accountants to handle its tax matters.

29.   To start with, I think Mr Choi has misread the evidence. Mr Suen said he was helped by professional accountants in filing tax returns when he was talking about his work as the then company secretary of KL Limited.[14] Secondly, Mr Suen was never asked when KL Company received the $24 million from China Harbour and KL Company could have received the money outside the period covered by the Disclosure Order. Mr Suen was also not examined on all the deposits in KL Company’s bank account and little is known about these transactions. For the deposits of $200,000 and $30,000 in August 2006, Mr Suen explained that those were loans obtained for litigation purposes. [15] So, it has not been established that KL Company had any business income between 2002 and 2005. In any event, it is not clear from Mr Suen’s testimony whether KL Company filed any tax return or received any assessment between 2002 and 2005 and there was no clarification. Thirdly, s.51C(1) requires businesses to keep “sufficient records … of … income and expenditure to enable the assessable profits … to be readily ascertained”. The elaboration in sub-sections (3) and (4) on what “records” needs to be kept and retained does not include tax returns and assessments. When confronted with the wording, Mr Choi concedes that the section probably does not cover tax returns and assessments.

30.   The second part of the examination concerned Mr Suen’s personal income and whether he had filed any individual tax return. Although Mr Suen was specifically asked whether he had filed any tax return, he did not give a direct answer but talked about something else. He claimed he was not able to calculate how much he had earned from the casual jobs he had done. He said he did not know if his employers had filed any employer’s return for him and claimed that he had to borrow from “partners and friends” in order to continue to litigate with China Harbour. Regrettably, the original line of questioning was not pursued. [16]

31.   In the end, it is not clear if there wasany tax return or assessment between 2002 and 2005 to be produced.

(a3) Share and stock certificates

32.   It is common ground that Mr Suen was one of the shareholders of KL Limited until sometime in 2006. When he was asked why he had omitted to produce the relevant share certificates, Mr Suen replied that he had not noticed the omission as he was busy handling court proceedings.[17] Mr Suen’s reply suggests that he might be ignorant about the fact of non-disclosure. No follow-up question was asked to establish that the omission was deliberate and intentional.

(a4) Property and vehicle

33.   Mr Suen was not examined on whether he owns any property or vehicle.

34.   In his submission, Mr Choi seeks to rely on a document dated 1 October 1997 entitled “claim preliminaries” for the contract “PAA Contract 410 – Seawater Pump House 5”[18] which contains references to the proposed charges of $154,000 for a car to prove that Mr Suen did own a car.

35.   However, this document was not put to Mr Suen during examination and it is not known if the car mentioned therein belonged to Mr Suen. In any event, the document is almost 12 years ago. Even if it did refer to a vehicle then owned by Mr Suen, I am not sure if Mr Suen is still keeping it.

36.   In my view, there is no basis for China Harbour to submit that Mr Suen has any property or vehicle and has failed to disclose them.

(a5) Wage or salary slips

37.   Mr Suen claimed to have worked on a casual basis since 17 January 2005.[19] Questions regarding how he was paid and how much he had earned were put to him, but his answers were equivocal.[20] Regrettably, there was no follow-up. In the end, it is not clear whether there was ever any wage or salary slips to be produced.

38.   It is also Mr Suen’s evidence that he had “helped” his son in relation to the business of KL Limited.[21] However, he was not asked whether he had received any wages or salary in return. So, again, it is not known if there was any wage or salary slip from KL Limited to be produced.

(b) Whether the judgment debtor has failed to fully comply with paragraphs 2(a) and (g) of the Disclosure Order?

(b1) Passbooks and bank statements

39.   Paragraph 2(a) of the Disclosure Order directed Mr Suen to produce “Passbooks and copies of bank statements for the last 3 years of all bank accounts in Hong Kong and elsewhere in his sole name or jointly with any other person, or of any firm or business of which he is sole proprietor or a partner.” As I have said above, the relevant period is between 2002 to 2005.

40.   The following bank accounts are disclosed from the documents produced by Mr Suen:

(a) The current account with Sheung Shui branch of DBS Bank, held in the name of the judgment debtor (“DBS Account”).

(b) The account with Mong Kok (President Centre) branch of Bank of China (Hong Kong), held in the name of KL Company (“BOC (KL Company) Account”).

(c) The account with Landmark North branch of Bank of China (Hong Kong), held in the name of the judgment debtor (“BOC (Landmark North) Account”).

(d) The integrated account with Flora Plaza branch of Hang Seng Bank, held in the name of the judgment debtor (“HSB (Flora Plaza) Account”).

(e) Hong Kong dollars savings account of Hang Seng Bank (“HSB Savings Account”). [22]

(f) Hong Kong dollars savings account of Bank of China (Hong Kong) (“BOC Savings Account”). [23]

41.   In his written submission, Mr Choi complains that the following bank statements have been omitted by Mr Suen:

Bank account	Bank statements claimed to have been omitted
DBS Account[24]	November to December 2002 January to December 2003 January to December 2004 January to March 2005 February 2006
BOC (KL Company) Account[25]	November to December 2002 January to December 2003 October 2004 January to July 2005 November to December 2005
BOC (Landmark North) Account[26]	November to December 2002 January to December 2003 January to December 2004 January to July 2005 November to December 2005 January to July 2006 January 2007
HSB (Flora Plaza) Account[27]	November to December 2002 January to December 2003 January to December 2004 January to February 2005 May 2005

42.   It is common ground that any allegation of non-disclosure should be judged as a whole following the examination. Regrettably, Mr Choi only seeks to rely on the state of disclosure at the beginning of the examination and has not taken into account those documents produced by Mr Suen in the course of examination as well as the additional documents produced through his counsel. Some of the documents Mr Choi complains to have been omitted can be located in the bundles.

Bank account	Bank statements claimed to have been omitted	Where they can be found
DBS Account	November to December 2002 January to December 2003 January to December 2004 January to March 2005 February 2006	F30 F27-30 The statement at F27 covers the period up to 7.1.04 F25-26 F24 & E20
BOC (KL Company) Account	November to December 2002 January to December 2003 October 2004 January to July 2005 November to December 2005	Not produced The statement at E76 covers the period from 2.12.03 E69 E48-49 E46-47 & F22-23
BOC (Landmark North) Account	November to December 2002 January to December 2003 January to December 2004 January to July 2005 November to December 2005 January to July 2006 January 2007	Not produced F14-20 Not produced E7 & F7-11 E31 & F12-13 E31 E28
HSB (Flora Plaza) Account	November to December 2002 January to December 2003 January to December 2004 January to February 2005 May 2005	Not produced

43.   Based on the evidence before me, I can only accept that Mr Suen has omitted to produce the following bank statements which are covered by the Disclosure Order.

Bank account	Bank statements which have been omitted
DBS Account	7 January to December 2004
BOC (KL Company) Account	November to December 2002 January to 2 December 2003
BOC (Landmark North) Account	November to December 2002 January to December 2004
HSB (Flora Plaza) Account	November to December 2002 January to December 2003 January to December 2004 January to February 2005 May 2005

44.   Mr Choi submits that Mr Suen’s failure to produce all the bank statements covered by the Disclosure Order is deliberate and intentional because:

(a) The omitted statements contain information which may be useful to China Harbour.

(b) It can be inferred from the handwritten annotations on the statements at E73-76 that Mr Suen has the practice of asking his son to mark the particulars of the deposit or withdrawal on the statement, and he is trying to withhold such information from China Harbour.

(c) In 2005, Mr Suen, upon the request of the Director of Legal Aid, provided full particulars of the transactions recorded in his DBS Account statement dated 8 February 2005. However, Mr Suen has failed to produce that bank statement and the information he supplied to the Director.

(d) Mr Suen has failed to explain the deposits at E33, 39, 40, 43, 44, 45, 47-48 of his BOC (KL Company) Account.

45.   I do not think these submissions are valid.

(a) As I have noted above, Mr Suen has since produced some of the omitted statements. Mr Choi has failed to identify any useful information from these statements.

(b) Mr Suen was only asked to confirm that it was his son who had marked the annotations on E76.[28] In my view, that is not sufficient to establish any general practice on the part of Mr Suen to annotate all his statements. In any event, only E70 and E73-76 amongst the many pages of passbooks and bank statements produced contain annotations. This goes against Mr Choi’s submission that Mr Suen intentionally withheld the statements in order to keep the annotations from China Harbour.

(c) Mr Suen has now produced the information he previously supplied to the Director of Legal Aid[29] and his DBS Account statement [30]. There is nothing unusual about these documents and Mr Choi has not seen fit even to examine Mr Suen on them.

(d) Mr Choi has failed to identify which item(s) of deposit at E33, 39, 40, 43, 44, 45, 47 and 48 he is referring to. Insofar as he is alleging that all the 10 deposits in these statements remain unexplained, Mr Suen was only examined on 3 out of them. In relation to the deposit of $100,000 at E47, Mr Suen said he could not recall what that was for due to long lapse of time and he needed to refer to the relevant documents.[31] In relation to the deposits of $200,000 and $30,000 at E40, Mr Suen said those were loans obtained for litigation.[32] Mr Choi did not pursue these deposits further. There is nothing to contradict Mr Suen’s explanation. There is simply no basis for Mr Choi to suggest that the deposits on E33, 39, 40, 43, 44, 45, 47-48 are unexplained.

46.   On the other hand, Mr Wu submits that China Harbour should have specifically requested for the omitted statements. Given Mr Suen’s forgetfulness, so he submits, Mr Suen might have unintentionally omitted to produce those statements.

47.   In my view, Mr Wu’s submission is supported by the following evidence regarding BOC (KL Company) Account[33]:

Q	Have a look at page 76 of tab E.  This is the first statement you have produced for the Kuen Long [sic] account opened in the name of your unincorporated company with BOC, Bank of China.
A	Yes.
Q	We don’t have any bank statements before that date.  What was the opening date of this account?
A	It’s so long ago I don’t remember.

and DBS Account[34]:

問	星展嘅户口亦都開咗好耐喇，你個人嘅户口，同意嘛？同意嘛？
答	開咗好耐喇，呢本。我唔知，要睇番嗰個開咗幾耐。
問	點解你畀嘅銀行嘅資料，凈係由05年4月9號開始呢？之前你都有單—之前你都有收到銀行嘅資料架，點解冇畀法庭呢？
答	嗰陣時我仲係搞緊官司，呢壇嘢，仲係上訴緊，咁就好多資料，即係我根本都唔得閒去—我都唔知嗰啲嘢點樣去揾、點樣去睇。你知喇，你啲所廹—搞到我根本係冇辦法可以自己都跟得到自已嗰啲嘢，所以你呢啲好得閒坐低呢度，就專門可以諗呢啲計，專門可以搞呢啲嘢咋嘛。
問	就呢個DBS嗰個，你個人名義嘅支票户口呢，開咗應該都有十年喇，係咪呀？
答	唔知喎，幾多年。
問	2000年都有喇，同意嘛？
答	我要睇番先知，我都唔知，而家都咁耐。

48.   In the end, even if Mr Suen has omitted to produce some of the bank statements ordered to be produced, I cannot be satisfied that the omission is deliberate and intentional.

(b2) Documents showing outgoings and liabilities

49.   Mr Suen has been ordered to produce “All documents showing outgoings and liabilities, including copies of any other judgments of a court entered against his name.”

50.   Mr Choi complains that Mr Suen has failed to produce:

(a) documents in relation to the arbitration, such as bills issued by Chow and Choy (“C&C”) who were the solicitors representing Mr Suen in the arbitration;

(b) bills issued by Herbert Smith (“HS”) who represented Mr Suen between January and May 2005 in proceedings such as HCCT 2/2006 and CACV 336/2006, and documents relating to any payment to HS;

(c) bills issued by Wilkinson & Grist (“W&G”) in relation to the hearing before Saunders J on 18 July;

(d) fee note from Queeny Ng, counsel, in relation to the hearing on 20 April 2007;

(e) documents concerning payments made to Eric Chiu who was Mr Suen’s consultant; and

(f) his credit card statements.

51. In addition, Mr Choi questions why there is no document evidencing the loans allegedly obtained by Mr Suen for the litigation.

52. Mr Suen has confirmed that the payment of $4,000 on 4 December 2004 at E76 was made to C&C for the arbitration.[35] He has also produced the photocopy of a cheque dated 12 January 2005 for $33,000 drawn to C&C and the corresponding pay-in slip.[36] Mr Suen was not asked if he had made other payments to C&C. Mr Suen has also produced the photocopy of a cheque dated 12 July 2007 drawn to Hong Kong Arbitration Centre.[37] Mr Choi has not identified what other documentsin relation to the arbitration Mr Suen should have produced.

53. According to Mr Suen’s statement to the Director of Legal Aid, he had paid $200,000 to HS for legal services rendered.[38] Mr Suen had apparently not paid the further costs on account demanded by HS in the sum of $250,000[39] and he was not asked if he had made any further payment to HS. Mr Suen has produced evidence of payment of $150,000.[40] Mr Suen was not given an opportunity during examination to explain why he had not produced the evidence for the payment of the remaining $50,000 to HS.

54. Mr Suen has produced four bills issued by W&G covering the period between 1 February 2006 and 9 July 2007.[41] Mr Choi complains that Mr Suen has still failed to produce W&G’s bill for the hearing before Saunders J on 18 July. Mr Suen did not specifically acknowledge or deny such a hearing during examination. That is understandable as there were so many hearings. Mr Suen however maintained that he had produced all the bills issued by W&G.[42] During submissions, Mr Choi was asked about this hearing before Saunders J on 18 July. He said that there was nothing in the bundles pertaining to that hearing but he had attended it himself. He invited me to locate the judgment in the Judiciary’s website. I can only locate the written judgment dated 18 July 2007 of the Court of Appeal in CACV 336/2006 involving the parties but Saunders J was not the presiding judge. More importantly, Mr Suen was recorded to be acting in person at that hearing. If Mr Suen was not legally represented, there could not have been any bill from W&G.

55. In relation to the missing counsel fee note for the hearing of 20 April 2007, Mr Suen has explained that he does not read English and he has already done his best to produce all the documents he could identify.[43] Mr Choi apparently accepted the explanation and did not pursue it further.

56. In relation to the professional charges of Eric Chiu, Mr Suen readily admitted he had paid him $10,000 to $30,000 although he could not recall the exact amount.[44] He was not asked why he had omitted to produce the relevant documentary evidence.

57. It is Mr Suen’s evidence that he had 3 credit cards.[45] Again, he was not asked why he had failed to produce his credit card statements.

58. Mr Suen said that he had obtained loans totaling about $1-2 million to finance the litigation. He said that the $200,000 and $30,000 deposited into his BOC (KL Company) Account in August 2006 were part of the loans. [46] Mr Choi did not pursue these bank entries further or ask about similar entries in the statements. It is true that Mr Suen has not produced any loan agreement. But it has never been established that there was any written loan agreement to be produced.

59. All in all, although there is some evidence to support the contention that Mr Suen may have failed to fully comply with paragraph 2(g) of the Disclosure Order, there is nothing to suggest that such non-disclosure was deliberate and intentional.

(c) Has Mr Suen wilfully failed to comply or fully comply with the Disclosure Order?

60. Mr Choi submits that “不作披露的文件之多，種類之廣，足以證明他是故意不作全面披露的，並不是無心之失，或一時疏忽”. He suggests that “文件披露的不足，並不是一鱗半爪，而是全面性的，有系统的” and the non-disclosure is intended to hide relevant information from China Harbour.

61. I have already dealt with Mr Choi’s complaint of non-disclosure item by item in the foregoing paragraphs. Suffice it for me to say here that I do not accept that the scope and extent of non-disclosure is wide.

62. It is for the judgment creditor to show beyond reasonable doubt that the failure on the part of the judgment debtor in making a full disclosure is deliberate and intentional before the court’s jurisdiction under O.49B, r.1B(1)(c) is engaged. One common feature that runs through the examination in this case regarding non-disclosure is that Mr Suen was not asked or not properly asked why he had failed to produce the relevant documents. If the underlying reason for non-disclosure is never probed during examination, it will be difficult for China Harbour in the end to convince me that such failure was not accidental or even negligent.

63. All in all, I am not satisfied that China Harbour has proved to the required standard that Mr Suen has wilfully failed to make a full disclosure.

(d) Has Mr Suen disposed of assets with a view to avoiding satisfaction of the judgments?

64. Mr Choi is not suggesting that Mr Suen has disposed of any specific asset with a view to avoid satisfying the judgments. Rather, his argument goes like this:

(a) In the past, Mr Suen conducted business under his trade name KL Company.

(b) Mr Suen set up KL Limited and was its founding shareholder and director. The authorized share capital of KL Limited was later increased in order to do more business. KL Company and KL Limited share a common trade name “Kong Luen”.

(c) Mr Suen asked his contractors to sign contracts with KL Limited because of this litigation. But for his participation, no one would have done business with his son who was young and inexperienced.

(d) Mr Suen then transferred his shareholdings in KL Limited to his son and his brother for no consideration. Although he has disposed of his shareholdings in KL Limited in 2006 and resigned from its management in 2007, it is apparent from E586-592 that he was still in charge of KL Limited as late as in March and April 2008.

(e) Although he claims not to have any money and is relying on loans to finance the litigation, he is unable to produce any loan agreement. Quite to the contrary, he instructed solicitors, counsel and senior counsel to represent him in past proceedings and travels overseas every year.

(f) The examination was conducted some 3 years after the first judgment. Mr Suen has used the intervening period to dispose of his assets to KL Limited.

65. I am afraid I cannot accept such argument, as it is not supported by evidence.

66. To start with, Mr Choi has not been able to identify any specific asset of Mr Suen or KL Company that has been transferred to KL Limited. Mr Suen’s transfer of his shareholdings in KL Limited to his brother and his son at nil consideration certainly looks suspicious. But he was not asked to explain the transfer in the examination. In the end, there is nothing to show that the disposal of his shares in KL Limited was with a view to avoid the judgments.

67. The documents at E586-592 show that Mr Suen might be one of the representatives of KL Limited in March and April 2008. But that does not necessarily mean that he has disposed of any asset to KL Limited. Mr Suen’s evidence is that he had asked his contractors to sign contracts with KL Limited[47] may be viewed as his effort in promoting KL Limited, as he has also denied that KL Limited’s business came from him and insisted that his son got the business himself. [48] Mr Suen has repeatedly explained that he was merely helping his son as a father to establish his own business.[49] There is really nothing to contradict him on this.

68. In those circumstances, China Harbour has also failed to satisfy me to the required standard that I should exercise my discretion under O.49B, r.1(b).

Conclusion

69. The court’s jurisdiction under O.49B, r.1B to imprison a judgment debtor should be exercised with care and circumspection.

70. Mr Suen’s examination has not been smooth. There were times when he did not answer Mr Choi’s questions directly. There were also occasions when he appeared to be trying to derail the examination. Be that as it may, it is still for China Harbour as the applicant to satisfy me beyond reasonable doubt that one or more of the limbs in r.1B(1) is established. This, China Harbour has failed to do.

71. For the above reasons, I have dismissed China Harbour’s application to imprison Mr Suen.