ZQA AND OTHERS v. SCC AND ANOTHER

FCMP 129/2018

[2020] HKFC 155

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 129 OF 2018

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BETWEEN

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D E C I S I O N
(Committal : Sentence)

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Introduction

1.  On 11 June 2019, this Court handed down its Judgment after trial (“2019 Judgment”) whereby the 1^st and 2^nd Respondents were found guilty of contempt for having failed to comply with the order of this Court in FCMP 63/2017 (“2017 Order”).  Details of the 2017 Order and the related background are set out in the 2019 Judgment which I do not intend to repeat here.

2.  As directed under the 2019 Judgment, the 1^st and 2^nd Respondents filed their submissions on mitigation and the Applicants filed their submissions in reply.

3.  Solicitors for the 1^st and 2^nd Respondents referred me to the cases of Crystal Mews Ltd v. Metterick & Others [2006] EWHC 3087; Willwin Development (Asia) Co Ltd v. Wei Xing, unreported, HCMP 2946/2014; CMA CGM v. Ng Chip Choi Maurice, unreported, HCMP 2988/2014; and Re Mileage Conference Group [1966] 1 WLR 1137.

4.  Counsel for the Applicants in reply referred me to the cases of Law Lai Lan v. Tamang Prem Chandr [2018] HKCFI 536 and La Dolce Vita Fine Dining Co Ltd v. Zhong Lan [2019] 2 HKLRD 341.

5.  For the present purpose, I will consider the sentence in light of the established legal principles, submissions on mitigation and in reply, and all the relevant circumstances of the case.

The legal principles

6.  The applicable legal principles on sentencing for contempt of court have been set out by Au Yeung J in the case of Bruno Arboit v. Koo Siu Ying (No.2)[1] which was summarised by Deputy High Court Judge To (as he then was) in the subsequent case of Law Lai Lan v. Tamang Prem Chandr [2018] HKCFI 536 (date of judgment : 5 March 2018) where it was said :-

“Principles on sentencing

40. The starting point for consideration of sentencing this type of offence is that the court’s orders are made to be obeyed. Civil contempt of court order is a serious matter. The principles applicable to sentencing this type of offences have been usefully summarized by Au-Yeung J in Bruno Arboit as Sole Liquidator of Highfit Development Company Limited and Koo Siu Ying and Another[2] as follows:

(1) A prime consideration of the court in sentencing contempt is to signal the importance of demonstrating to the litigants that the orders of the court are to be obeyed.

(2) The object of the sentence is both to punish the conduct in defiance of the court’s order and to serve a coercive function by holding out the threat of future punishment as a means of securing the protection which the order was primarily there to do: Crystal Mews Ltd v Metterick[3] and Re Barrell Enterprises[4]. The court has to strike a balance between the two objectives.

(3) Imprisonment should be regarded as a sanction of the last resort. Any custodial term should be as short as possible and consistent with the circumstances of the case: Willwin Development (Asia) Co Ltd v Wei Xing[5]; CMA CGM v Ng Chip Choi Maurice[6].

(4) The court has an absolute discretion to suspend a sentence of imprisonment for such period and on such terms as it deems fit: CMA CGM v Ng Chip Choi Maurice[7].

(5) The court will have to consider all the circumstances of the contempt, including the nature of the order and extent of the breach; whether the contempt was contumacious or unintentional; the reasons, motives and state of mind of the contemnor; and whether the contemnor appreciates the seriousness of the deliberate breach.

(6) The court will have to consider aggravating and mitigating factors, including whether any prejudice is suffered by the plaintiff; whether the prejudice is capable of being remedied; whether the contemnor has cooperated and purged the contempt; and the personal circumstances of the contemnor.

41.  Of all the factors listed above, the two most important ones are whether the contemnor has purged the contempt and whether the plaintiff has suffered any prejudice which is irremediable.  If the contempt has been purged, the coercive function of the sentence has been spent.  What remains to be addressed is punishment for the disobedience. Purging the contempt may even affect the sentencing option. While each sentence depends on its facts and circumstances, references may still be drawn from sentences passed by the court in similar cases.  If the contempt has not been purged and was the result of wilful and contumelious conduct, the starting point is term of immediate imprisonment.  The term depends on the prejudice suffered by the applicant as a direct result of the breach of the order and whether such prejudice is irremediable.  In theory, the court has jurisdiction to impose an unspecified term of imprisonment until the contemnor purges the contempt.  Such a sentence is a very draconian one and would only be imposed for the most recalcitrant contemnor and in the worst type of cases where unless the order is complied with the applicant would suffer or continue to suffer more irremediable and serious injury or damage.”

7.  In the recent case of 張月清 v. Tsui Yiu Hei (徐耀熙), [2020] HKCFI 103[8], Deputy High Court Judge Leung referred to the principles set out in the Bruno Arboit case to be applicable in sentencing contempt of court cases.

8.  In the latest case of BT v. CBY (formerly known as YHK and also known as YCB), [2020] HKCA 426[9], the sentencing principles set out in Bruno Arboit v. Koo Siu Ying (No.2) were accepted by the parties in the Court of Appeal to be the applicable principles in sentencing contempt of court cases.

The 1^st and 2^nd Respondents’ submissions on mitigation

9.  In the written submissions on mitigation filed by the lawyers for the 1^st and 2^nd Respondents, the factors set forth are as follows[10] :-

- The 1^st and 2^nd Respondents all along were co-operative;

- They have consented to the request for Interrogatories which formed the 2017 Order;

- The 1^st Respondent had signed his 2^nd Affirmation in September 2018 whereby the contents therein were organised to answer the questions listed in the Applicants’ Interrogatories;

- Solicitors for the 2^nd Respondent had accepted service of these proceedings for committal without taking any issue as to service of court documents;

- They have consented to amendments of the Originating Summons in these proceedings whereupon leave to issue committal proceedings was granted.

10.  In addition, the 1^st and 2^nd Respondents had all along relied upon the legal advice of their then lawyers, Messrs. C.W. Chan & Co., which turned out to be erroneous[11].

11.  Finally, it was submitted by the 1^st and 2^nd Respondents that reliance upon wrong legal advice is something very important as mitigation[12].

The Applicants’ submissions in reply

12.  In reply, Counsel Miss Christine Yu submitted that the 1^st and 2^nd Respondents’ contempt is of the most egregious type which called for immediate custodial sentence and the only issue being as to the length of the sentence.  There is no mitigating factor.  

13.  Apart from setting out the factual background leading up to the need for the present proceedings, reference was also made to the 1^st and 2^nd Respondents’ conduct post 2019 Judgment for failing to file any affirmation to comply with the 2017 Order within the agreed time frame notwithstanding that further time was given under a separate consent order granted in FCMP 63/2017 for them to do so on or before 13 August 2019.

14.  The 1^st Respondent eventually filed his 2^nd Affirmation on 29 August 2019 (that is, about 16 days late) without seeking from this Court any extension of time to do so or further consent of the Applicants.

Discussion

15.  In the 2019 Judgment, both the 1^st and 2^nd Respondents’ conduct, insofar as to failure to comply with the 2017 Order was concerned,  was found to be wilful, deliberate and contumacious[13] after trial in that each of them was in contempt of court.

16.  On the mitigation factors, I fail to see how the 1^st and 2^nd Respondents could be said to be all along “co-operative” when they were contesting the Applicants’ Interrogatories application to the fullest extent. Their consensus to the Interrogatories raised could hardly be a mitigating factor when they failed or refused to provide the answers.  It was indeed an aggravating factor.  The fact that there was only a 2^nd Affirmation signed by the 1^st Respondent but not been filed[14] (emphasis added) and the Court’s views on such “unfiled” affirmation[15] had already been stated in the 2019 Judgment.  Finally, the acceptance of service of proceedings and consent to amendments could hardly be taken as mitigating factors for contempt of court cases.    

17.  The remaining mitigating factor of reliance upon former legal advice of Messrs. C.W. Chan & Co., which turned out to be erroneous, in my decision, is a non-starter.  According to the records, it was Mr. T. C. Wong of Messrs. C.W. Chan & Co., who appeared for the 1^st and 2^nd Respondents throughout in the proceedings under FCMP 63/2017.  It appeared that the same Mr. Wong commenced his own practice under the firm name Messrs. T.C. Wong & Co., and took over conduct of proceedings for the 1^st and 2^nd Respondents from Messrs. C.W. Chan & Co.  As a matter of fact, such “change” was once confirmed with Mr. Wong by this Court at one of the hearings.  Having said, there is no issue of erroneous legal advice being provided by former lawyers unless Mr. Wong himself is prepared to concede that he had advised his clients erroneously whilst he was practising at Messrs. C.W. Chan & Co.  

18.  The 1^st and 2^nd Respondents successfully procured the consent of the Applicants for them to file the Affirmation to answer the Amended Interrogatories at the late stage post 2019 Judgment might only be a mitigating factor if there was full compliance in respect of the answers provided thereunder and within the agreed extended time frame, given the fact that there had already been a delay of around 20 months.  The 2017 Order provides for the answers to be provided by 12 December 2017.     

19.  It turned out that the 1^st Respondent filed his 2^nd Affirmation only on 29 August 2019, which is 16 days after the agreed time frame of 13 August 2019.  There was no application for further extension of time by the 1^st Respondent.  There was no explanation for the 16-day delay.  There was no reference as to whether the answers provided are also given on behalf of the 2^nd Respondent despite the fact that the terms of the consent summons dated 7 August 2019 referred to both (emphasis added) the 1^st and 2^nd Respondents to have to file their answers.  Thus it is unclear as to whether there are answers forthcoming from the 2^nd Respondent later the day.  It appeared to me that the 1^st and 2^nd Respondents, notwithstanding they have the benefit of legal advice, simply take the law in their own hands and do whatever they want and whenever they wish.  As Mr. T.C. Wong all along had been representing the 1^st and 2^nd Respondents, this is far from satisfactory which the Court should not condone.

20.  Although the 1^st Respondent had filed his 2^nd Affirmation in FCMP 63/2017 on 29 August 2019 (which is 16 days after the agreed time frame on or before 13 August 2019 had expired), it remains dubious as to whether full and complete answers had been provided as he said the following in the concluding paragraph :

“15. I would submit to the Court that I shall file and serve further supplemental answer if I obtained further information regarding the estate of my father in the future.”

21.  In my decision, there was inordinate and excessive delay on the part of the 1^st and 2^nd Respondents to comply with the 2017 Order.  Given the fact that there was a lapse of some 20 months (since December 2017 when the answers should have been provided), coupled with the fact that both the 1^st and 2^nd Respondents were legally represented throughout, this is a case where justice calls for appropriate sanctions be imposed upon the contemnor who persists in their continuing breaches of court orders.

22.  The 2017 Order was granted in the FCMP 63/2017 proceedings whereby the three Applicants therein, also the same Applicants in these proceedings, who are the mother and 2 minor children at the age of 9 and 6, seeking financial reliefs under the Inheritance (Provision for Family and Dependants) Ordinance, Cap.481, out of the estate of the late SYC.  I am minded to say the inordinate and excessive delay on the part of the 1^st and 2^nd Respondents posed serious prejudice to the three Applicants in their proceedings in FCMP 63/2017.

23.  Whether the contemnor has purged the contempt and whether the aggrieved party had suffered any prejudice which is irremediable are two most important factors when deciding the option for sentencing contempt of court.  In theory, the court has jurisdiction to impose an unspecified term of imprisonment until the contemnor purges the contempt[16].

24.  Given careful consideration to the applicable principles, the submissions on mitigation and submissions in reply, the overall circumstances, the period of inordinate and excessive delay and prejudice created thereby, I am minded to say the 2017 Order had been wilfully or intentionally flouted by the 1^st and 2^nd Respondents. Immediate custodial sentence for punishment is warranted, suitable and appropriate and is the only option available to this Court.

25.  I have considered but unable to find any justification for exercising discretion to suspend any period of custodial sentence to be passed upon the 1^st and 2^nd Respondents.  Their lawyers in their written submissions on mitigation also failed to convince this Court that any custodial sentence should be suspended on any justifiable grounds.  I have reminded myself that custodial sentence is a very draconian one and would only be imposed as a last resort and for the most recalcitrant contemnor and in the worst type of cases.  It is unfortunate that the recalcitrant conduct of the 1^st and 2^nd Respondents throughout the past 20 months have brought each of them within such category.

26.  Both the Law Lai Lan and La Dolce Vita Fine Dining Co Ltd cases (supra) involved breaches of orders for disclosure of assets within the commercial context.  In the present case, it involves breaches of orders for disclosure of assets in the family context whereby non-compliance would hinder the progress of proceedings for financial reliefs with significant impact on two minor children.  This is, in my view, another aggravating factor in determining the appropriate sentence. 

27.  In the case of Suzanne Ruth Henderson v. Scott Hendersen[17] (HCMP No.2016/2014), it was emphasized that contempt of civil court orders is a serious matter.  A prime consideration of the court in sentencing contempt is to signal the importance of demonstrating to litigants that orders of the court are to be obeyed.  The jurisdiction of the court in contempt proceedings arises out of its inherent jurisdiction to enforce its own orders.  The purpose of the law of contempt is not to protect the dignity of the judges but to prevent interference with the due administration of justice.

Sentencing

28.  In passing, I wish to add that the 1^st Respondent is a professional.  He is a chartered civil engineer by occupation who would have known, even if not fully advised, the serious consequences of breaching court orders.  The 2^nd Respondent had never filed any affirmation since the 2017 Order was granted. 

29.  Taking into account all the above, I decided that an immediate custodial sentence of 3 months be imposed on each of the 1^st Respondent and 2^nd Respondent is justified, reasonable and appropriate.