YEUNG LIN MUI v. CHU KWOK WAI

HCMP 1307/2018

[2020] HKCFI 2655

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1307 OF 2018

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J U D G M E N T

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Introduction

1.  There is before this court by way of Originating Summons dated 22 August 2018 (“OS”) an application by the Plaintiff for an order for committal against the Defendant.  The ground of the application as summarized in the OS is that:

“CHU KWOK WAI, the Defendant herein be committed to Prison for his contempt of court in continuously refusing to allow the Plaintiff and/or the Plaintiff’s representative to record and deposit all revenues and income received by KWOK CHI CONSTRUCTION MATERIALS LIMITED … with the bank accounts of the said KWOK CHI CONSTRUCTION MATERIALS LIMITED as required by the Order of the Honourable Mr. Justice Ng dated 8^th May 2018, and the Order of the Honourable Mr. Justice Ng dated 11^th June 2018, and as more particularly set out in the 6^th Affidavit of the Plaintiff YEUNG LIN MUI and the 1^st and 2^nd Affidavits of TSUI MEI YUK JANICE together with the exhibits referred thereto and the Statement filed herein pursuant to Order 52. r2 of the Rules of the High Court.”

Background     

2.  The Plaintiff is a director and a 49% shareholder of Kwok Chi Construction Materials Limited (國熾建築材料有限公司) (“Company”).  The Defendant is the other director and a 51% shareholder of the Company.

3.  At all material times, the Company was in the business of selling construction materials and its sales were mostly cash-based. It is the Plaintiff’s case, as borne out by the evidence, that the cash receipts had always been managed by the Defendant. 

4.  The Company had two types of cash sales ie (i) when customers went directly to the Company’s G/F shop at Yau Tong, Kowloon (“Shop”)[1] to buy construction materials and paid by cash there and then, and (ii) when the Company delivered pre-ordered construction materials to customers who paid cash to the delivery drivers. 

5.  The practice of the Company, prior to these proceedings were as follows.  With regard to (i), a Company employee viz Coco was mainly responsible for keeping the cash until around 3pm and then handed it over to the Defendant for checking.  With regard to (ii), another Company employee was responsible for receiving orders by phone and preparing sale invoices and delivery notes.  With those documents, the Company drivers would deliver the construction materials to the customers and collect cash on the spot.  When they returned to the Shop, usually after normal banking hours, they would hand over the cash to the Defendant for reconciliation.  Since the bank was already closed, all the cash would be kept overnight and deposited with the bank the next day. 

6.  By a Petition presented on 13 November 2017 (“Petition”) filed by the Plaintiff in HCMP 2536 of 2017 (“Main Action”), the Plaintiff claims that the Company’s affairs are being or have been conducted in a manner unfairly prejudicial to her interests for inter alia (i) excluding her from the management of the Company, and (ii) misappropriating the Company’s revenue and causing the Company’s revenue to be understated.  In the Petition, the Plaintiff seeks a buy-out Order against the Defendant. 

7.  By a Summons filed on 18 December 2017 (“Summons”) in the Main Action, the Plaintiff applied for inter alia an order that KLC Corporate Advisory and Recovery Limited (“KLC”) be appointed as interim receiver and manager of the Company to take possession of its assets and to carry on its business pending the final determination of the Petition.

8.  The Summons was heard on 8 May 2018 before this court.  Both the Plaintiff and the Defendant were present in court and were represented by Counsel.

9.  In the course of the hearing, an alternative to the appointment of KLC as interim receiver and manager of the Company was canvassed by the parties.  After taking instructions, counsel for the Plaintiff and the Defendant submitted a signed draft Consent Order for this court’s approval.  The draft Consent Order was approved and became the Order dated 8 May 2018 (“Order”) referred to in the OS.

10.  Paragraph 1 of the Order provides that KLC

“be appointed as the Petitioner’s representative(s) pending the final determination of the Petition to record and deposit all revenues and income received by the Company (whether in cash or otherwise) into the Company’s bank account(s).” (emphasis added)

11.  Paragraph 2 of the Order provides for a representative from KLC be added as a joint bank signatory of the Company’s bank account(s) with the Defendant within 7 days and that all payments out of the Company’s bank account(s) require the consent of both KLC and the Defendant.

12.  Subsequently, the Plaintiff found another professional accounting firm viz Vision AS Limited (“Vision”) to replace KLC as her representative for the purpose of the Order.  To effect the change from KLC to Vision, the Plaintiff and the Defendant filed a Consent Summons for this court’s approval. On 11 June 2018, this Court granted an Order in terms of the Consent Summons. This is the Order dated 11 June 2018 (“Variation Order”) referred to in the OS.

13.  Paragraphs 1 and 2 of the Variation Order provide:

“1. Notwithstanding the Consent Order granted by the Honourable Mr. Justice Ng dated 8^th May 2018 (‘Original Order’), leave be granted to the Petitioner to appoint Vision A.S. Limited (‘Vision’) in lieu of KLC Corporate Advisory and Recovery Limited as the Petitioner’s representative(s) and all the references in the Original Order made to KLC Corporate Advisory and Recovery Limited or to KLC be amended to be referred to Vision.

2. There be extension of time under paragraph 2 of the Original Order for a representative of Vision to be added as a joint bank signatory of the Company’s bank accounts within 7 days from the date hereof”.

The gist of the Plaintiff’s case as set out in the Statement under RHC O 52 r 2 (“Statement”)

14.  From 19 June 2018 to the date of the Statement ie 20 July 2018, the Defendant had refused to allow Vision’s employees to access the cash received by the Company’s drivers in that he repeatedly and without justification refused to allow Vision’s employees to count the cash so received.  Particulars of a number of such incidents in June, as well as July, 2018 (“Incidents”) were given.  The Defendant’s refusal and obstruction rendered Vision unable to record all revenues and income received by the Company thereby in breach of the Order as amended by the Variation Order.  

15.  In light of the repeated refusal by the Defendant, the Plaintiff’s solicitors endorsed on the 2 Orders with penal notices and effected personal service of them on the Defendant on 4 July 2018 at the Company’s place of business in Yau Tong.

16.  On 4 July 2018, despite having been served with the Orders with penal notices, the Defendant still refused to allow representatives of Vision to handle the cash-counting, to record the cash received by the Company’s delivery drivers and/or to deposit the cash so received into the Company’s bank account(s).

17.  On 18 July 2018, Ms Janice Tsui of Vision again made a request to take part in the cash-counting process, which was again flatly refused by the Defendant.  This time, the Defendant said that as the Orders did not expressly state he had to allow Vision’s representatives to take part in the cash-counting procedure, he would not allow them to do so.

18.  From 19 June to 20 July 2018, despite the letters from the Plaintiff’s solicitors to the Defendant’s solicitors dated 20, 25 and 28 June 2018 as well as 17 July 2018, the Defendant had obstructed and prevented Vision from recording all revenues and income received by the Company as the Defendant had repeatedly refused Vision’s employees to count the cash received by the Company’s delivery drivers.

Deliberation

The Law

19.  To start with, this court shall remind itself of the legal principles governing committal for civil contempt.

20.  First, the proper approach in committal for civil contempt for failure to comply with a court order made against a defendant to the action  is essentially a three-stage test viz: (1) the relevant Court order must be construed to ascertain its meaning and operation; (2) it must be determined whether the defendant has in fact complied with the order as so construed; and (3) it must be determined whether any failure to comply was accompanied by the state of mind necessary to establish punishable contempt: Kao, Lee & Yip v Koo Hoi Yan (2009) 12 HKCFAR 830 at [21].

21.  Second, the prime concern of the Court is to ensure that orders of the Court are obeyed.  Given the seriousness of a finding of contempt, the Court must be satisfied beyond reasonable doubt before making a finding of contempt.  There is no burden on the defendant to prove his innocence: Citybase Property Management Ltd v Kam Kyun Tak & Ors (No 1) [2003] 2 HKC 98 Ma J (as he then was)at[13] & [16]; Kao, Lee & Yip at [30].

22.  Third, hearsay evidence is admissible.  While the Court has a discretion whether or not to disregard such evidence and is duty bound to consider carefully the quality of such evidence, it is important that as much first hand evidence of the actual contempt is adduced or if not, an explanation given as to why such evidence is unavailable.  No court would wish to make a finding of contempt unless the evidence to support such a finding was good: Citybase Property Management Ltd at[17(1)]; Halsbury’s Laws of Hong Kong 2nd Ed Vol 16 [110.90].

23.  Fourth, unlike in criminal proceedings, there is no requirement in civil contempt proceedings to show that the alleged contemnor intended to disobey the order ie his conduct was contumacious.  It is sufficient to prove (i) that he knew the facts which are said to make his act or omission a contempt, and (ii) that such act or omission was not accidental.  Mistaken belief as to the legitimacy of the action to comply with a court order is no excuse for non-compliance: Hong Kong Civil Procedure 2020 at para 52/1/17; Citybase Property Management Ltd at [17(2)]; Kao, Lee & Yip at [45] - [46] & [63].

24.  Fifth, as a pre-requisite to enforcement, the relevant order must contain a penal notice and must have been served personally, although where there has been a failure in this regard, the court nevertheless has the power, in the exercise of its discretion, to enforce it: Citybase Property Management Ltd at [14(1) & (2)]; RHC Order 45, rule 7(6)[2]; Hong Kong Civil Procedure 2020 at paras 45/7/6 and 45/7/7.  In AXA China Region Insurance Co Ltd v Li Yu Ping Ellen [2002] 3 HKC 339 at [32], [34] and [36] -[37], the Court of Appeal held that the Court had an unfettered discretion to dispense with personal service of a prohibitory or mandatory order under RHC O 45 r 7(7), as well as the requirement of a penal notice even though there is no express provision in the Rules of the High Court to that effect.  Where the relevant order is not endorsed with a penal notice, it is essential that the alleged contemnor shall have been told, whether by being present in court or by being notified by telephone or otherwise, that the consequences of breaching any order made is to be held in contempt of court.  Whether the penal notice is made in writing or given orally, the alleged contemnor must be made aware of the consequences of a breach of the relevant order: Citybase Property Management Ltd at [14(2)]. 

25.  Sixth, even though a Court Order does not expressly require a person to do or abstain from doing an act, his conduct may amount to contempt of court if such conduct has the effect of interfering with the administration of justice by causing the Order of the Court to be thwarted.  In Z Ltd v A-Z and AA-LL [1982] QB 558 at 578G - 579C, Eveleigh LJ explained a bank’s liability for contempt in the context of a mareva injunction as follows:

“… [A third party] is liable for contempt of court committed by himself. It is true that his conduct may very often be seen as possessing a dual character of contempt of court by himself and aiding and abetting the contempt by another, but the conduct will always amount to contempt of court by himself. It will be conduct which knowingly interferes with the administration of justice by causing the order of the court to be thwarted.

In Seaward v. Paterson [1897] 1 Ch. 545, 555, Lindley L.J. said:

‘A motion to commit a man for breach of an injunction, which is technically wrong unless he is bound by the injunction, is one thing; and a motion to commit a man for contempt of court, not because he is bound by the injunction by being a party to the cause, but because he is conducting himself so as to obstruct the course of justice, is another and a totally different thing. The difference is very marked. In the one case the party who is bound by the injunction is proceeded against for the purpose of enforcing the order of the court for the benefit of the person who got it. In the other case the court will not allow its process to be set at naught and treated with contempt …’”. (emphasis added)

26.  The fifth legal proposition has particular significance in the present case since the Plaintiff herself acknowledged that, at the beginning, the Orders were not served on the Defendant personally—they were only served on the Defendant’s solicitors.  It was only on 4 July 2018 that the Orders, endorsed with a penal notice, were personally served on him.

27.  The sixth legal proposition has particular significance in the present case.  Unlike Kao, Lee & Yip v Koo Hoi Yan supra which was concerned with failure to comply with a Court Order made against a defendant to the action, paragraph 1 of the Orders did not expressly require the Defendant to do or refrain from doing anything as such.  Hence, in his Closing Submissions, Mr Cheng submits that the Defendant is not directly bound by the Orders.  He further submits that, while the Defendant accepts he has knowledge of the Orders in question, the evidence put forward by the Plaintiff does not amount to an interference with the administration of justice. 

The evidence

28.  At the hearing, the Plaintiff called 4 witnesses viz:

(1)  Tsui Mei Yuk Janice (“Tsui”)—a director of Vision in charge of its daily operations and, specifically, the carrying into effect of paragraph 1 of the Orders; according to the Statement, she was personally involved in 2 of the Incidents which took place on 25 June and 18 July 2018;

(2)  Poon Ka Hang (“Poon”)—an audit clerk of Vision who was one of the staff assigned by Tsui to attend the Shop in Yau Tong to ask for the Defendant’s permission to count the daily cash receipts of the Company; according to the Statement, he was personally involved in 1 of the Incidents which took place on 29 June 2018;

(3)  Chui Wang Keung Andrew (“Chui”)—manager of Vision who was one of the staff assigned by Tsui to attend the Shop in Yau Tong to ask for the Defendant’s permission to count the daily cash receipts of the Company;

(4)  The Plaintiff.

29.  The Defendant, on the other hand, called 2 witnesses viz

(1)  Tam Suk Fan Fanny (“Tam”)—a clerk working in the Company’s office in Kwun Tong responsible for inter alia receiving orders from customers and bookkeeping.

(2)  The Defendant.

30.  The gist of Tsui’s testimony, in addition to confirming the truth of the Plaintiff’s affirmation dated 20 July 2018 (“P1”) in so far as it concerns Vision or Vision’s staff and herself including, in particular,the Incidents which took place on 25 June and 18 July 2018, is that since 19 June 2018, the day when Vision started to perform its duties as the Plaintiff’s representative, its staff and occasionally herself had asked the Defendant to allow them to count the cash receipts from drivers on the day they were received.  Invariably, up to around 20 July 2018 ie the date of her 1st affirmation (“Tsui 1”), the Defendant had refused and Vision’s staff had been obstructed and prevented by him from doing so. 

31.  Further, during that period, Vision’s staff were prevented by the Defendant from depositing all cash receipts into the Company’s bank account(s), as mandated by paragraph 1 of the Order—all the cash receipts were deposited by the Defendant himself.  It was only from around 24 July 2018 that the Defendant, for the first time, had allowed Vision’s staff to count the cash proceeds from drivers and that after reconciliation with the sales invoices, to deposit them with the bank’s ATM machines for large denomination bank notes ie $100, $500 and $1,000 on the same day.

32.  The relevance of Poon’s evidence for the present purpose lies in his confirmation of the truth of P1, in so far as it concerns Vision or Vision’s staff.  In court, he testified that he had personal knowledge of what was stated in paragraphs 23, 24, 35 and 36 of P1.  For ease of reference, they are set out below.

“23. On 15 June 2018, Vision assigned 5 employees to visit the Company in order to carry out the tasks contained in the Order (as amended by the Variation Order). Vision’s representatives arrived at around 9:30am that day and were met by two persons namely Ms Fanny Tam (an employee of the Company) and Ms Angel Chu (daughter of the 1st Respondent).

24. Vision’s representatives informed Ms Angel Chu that a representative from Vision would be assigned to station at the Company’s premises, starting on 19 June 2018. The representative from Vision would only leave the Company’s premises when he had confirmed that all proceeds from any sales made by the Company were properly accounted for and recorded, including the sales by cash made by the Company.

…

35. On 29 June 2018, the 1st Respondent even deployed foul languages against Vision’s representative Mr Poon Ka Hang (‘David’), when he requested to count the cash received by the Company’s delivery drivers that day. The 1st Respondent said that he could allow David to count the cash held in the hands of Coco (see paragraph 20 herein above), but that he or the other representatives from Vision would have to personally be responsible for depositing the same into the Company’s bank account(s). But the 1st Respondent was adamant that, in respect of the cash received by the Company’s delivery drivers, he would not allow David or other representatives from Vision to count the cash.

36.  Vision objected to such piecemeal counting of cash and requested the 1st Respondent to allow them to count both the cash in the hands of Coco and those received by the Company’s delivery drivers.  Such request was flatly refused by the 1st Respondent.”

33.  Chui also confirmed the truth of P1 in so far as it concerned Vision or Vision’s staff.  In the witness box, he first told this court that his confirmation was based on what his colleagues told him, rather than from his personal knowledge.  Later, Chui mentioned 1 occasion in the 2nd week of July 2018 in which he was in the Shop.  He tried to count the cash proceeds collected by the drivers but that was refused by the Defendant.  However, since this incident was not mentioned in the Statement, this court shall ignore Mr Chui’s testimony on it. 

34.  As for the Plaintiff, her evidence is substantially the same as stated in the Statement which she confirmed to be true and correct.  It is also apparent from her testimony in court that her knowledge was mostly if not completely based on what Tsui and other Vision’s staff had reported to her. 

35.  Tam confirmed in court that at all material times since 2018, she had been working in the Company’s office in Kwun Tong and had never worked in the Shop.  She only learned of what happened at the Shop when and in so far as the Plaintiff or Vision’s staff called her and told her what happened. 

36.  In her affirmation, Tam did not dispute what the Plaintiff alleged had happened in the Shop as such—instead, she offered her opinion that every disagreement between the Defendant and Vision arose from Vision’s “inflexibility and unprofessionalism” and that the Defendant had never attempted to obstruct Vision from carrying out what was required of it under the Orders.  Specifically, with regard to the Incident on 25 June 2018, Ms Tam asserted that what the Defendant did was not disobedience to the Orders.

37.  Unsurprisingly, the Defendant denied any disobedience to the Orders as he interpreted them.  The gist of the Defendant’s testimony is that (i) there was disagreement between him and Vision as to the most practical and effective way to carry out what was required by the Orders with minimal interruption to the Company’s business and (ii) Vision’s preferred method of counting, recording and depositing the cash receipts on the same day as they were received was impractical, impossible and not mandated by the Orders. 

38.  The Defendant also denied the Plaintiff’s version of the Incidents as particularized in the Statement but stopped short of suggesting he had acceded to Vision’s requests to count, record and deposit the cash received by the Company’s drivers on the same day.  Indeed, it is implicit in his affirmation in opposition (“D1”) that he had not, by reason of his disagreement with Vision’s way of proceeding with paragraph 1 of the Orders.

39.  This court has carefully considered the testimony, as well as the demeanour, of all witnesses and assessed it against the documentary evidence and the known and undisputed circumstances of this case.  This court has in particular considered the inherent probabilities or otherwise of the witnesses’ testimony and assessed their credibility accordingly. 

40.  In this court’s view, although part of the testimony of the Plaintiff’s witnesses is hearsay, it is inherently credible and supported by the contemporaneous correspondence from the Plaintiff’s solicitors to the Defendant’s solicitors dated 20, 25, 28 June and 17 July 2018.  There was no effective response from the Defendant’s solicitors to such correspondence. 

41.  There was also no effective response from the Defendant to the testimony of the Plaintiff’s witnesses on the Incidents, other than a bare denial.  As this court observed earlier, it is implicit in D1 that the Defendant had not acceded to Vision’s requests to count, record and deposit the cash received by the Company’s drivers. 

42.  As for Tam’s testimony, this court finds it to have little probative value since she was basically giving her opinion on how the Orders should be interpreted and whether the Defendant’s conduct amounted to disobedience.

43.  To conclude, this court finds the Plaintiff’s witnesses truthful and is prepared to accept their testimony as to what in fact happened between 19 June and 20 July 2018 ie the Defendant has obstructed Vision’s staff from carrying out the tasks mandated by paragraph 1 of the Orders by refusing to allow them to count and hence record the cash receipts collected by the Company’s drivers.

Dispensation with personal service of the Orders

44.  Given that some of the Incidents complained of had taken place before the Defendant was personally served with the Orders on 4 July 2018, it is necessary to consider whether personal service of the Orders endorsed with a proper penal notice should be dispensed with. 

45.  In AXA China Region Insurance Co Ltd v Li Yu Ping Ellen supra, it was held that the Court had an unfettered discretion to dispense with personal service of a prohibitory or mandatory order under RHC O 45 r 7(7), as well as the requirement of a penal notice.  The criteria adopted by the Court of Appeal in deciding whether to exercise that discretion were (i) the requirements of justice, and (ii) prejudice or injustice to the defendant.

46.  In the present case, it is clear and in fact accepted by the Defendant’s counsel that the Defendant had knowledge of the terms of the Orders.  Given that he was legally represented when the Orders, by consent, were made and, in addition, he had been warned by the letter dated 20 June 2018 from the Plaintiff’s solicitors to his solicitors that contempt proceedings would ensue should he persist in flouting paragraph 1 of the Orders, this court is satisfied beyond reasonable doubt that he was well aware of the legal consequences of his conduct. 

47.  In these circumstances, this court is in no doubt that the requirements of justice are best served by dispensing with personal service of the Orders and the endorsement of a penal notice on them, in so far as the Incidents prior to 4 July 2018 are concerned.  This court is also in no doubt that there is no prejudice or injustice to the Defendant by such dispensation and shall so order.

Whether the Defendant’s conduct amounts to contempt of Court

48.  The first step is to construe paragraph 1 of the Orders. 

49.  Paragraph 1 of the Orders mandated Vision to “record and deposit” all revenues and income received by the Company (whether in cash or otherwise) into the Company’s bank account(s).  Since the Orders were made by consent, they should, in line with well-established canons of construction, be construed so as to give them their natural and ordinary meaning, save to the extent that modification is necessary in order to avoid absurdity, inconsistency or repugnancy.  In this court’s view, the natural and ordinary meaning of paragraph 1 of the Orders is simply what it expressly provided which was clear, certain and in unambiguous language.

50.  Mr Cheng submits that a literal interpretation of the Orders would lead to an absurd and costly outcome in that Vision would effectively be replacing the hitherto daily accounting operation of the Company.  He further submits that the Orders merely required the Defendant and the Company to work with Vision to develop a systematic audit trail to identify and prevent the Defendant’s potential misappropriation of the Company’s cash.

51.  This court cannot agree. 

52.  Paragraph 1 did not require the Defendant and the Company to work with Vision to develop the suggested systematic audit trail.  It only required Visionto record and deposit all cash revenues and income received by the Company and left it at that, without restricting the ways in which it should go about its task.  The Defendant was agreeable to and had consented to its terms without seeking to qualify paragraph 1 in any way, either at the time when the Orders were made or subsequently by means of an application to vary it.

53.  There is no absurdity with this interpretation of paragraph 1 at all. The whole point of paragraph 1 was to effect changes to the previous daily accounting operation of the Company, which had been managed by the Defendant alone, by installing Vision as the Plaintiff’s representative to perform part of the daily accounting operation of the Company.  If the Defendant genuinely think this interpretation of paragraph 1 would lead to absurdity or was impractical and costly, his lawyers could have applied to this court for clarification or variation of the Orders.  But they had not.

54.  The second step is to consider whether the Defendant’s conduct amounted to conduct in contempt of court.

55.  As stated earlier, in his Closing Submissions, Mr Cheng submits that the Defendant is not directly bound by the Orders.  Further, Mr Cheng submits that the evidence put forward by the Plaintiff does not amount to an interference with the administration of justice.  This is because, so he submits, the recording and the deposit of the Company’s cash revenue by Vision does not concern the unfair prejudice allegedly suffered by the Plaintiff, as pleaded in the Main Action.  Hence, even if the Defendant had hindered Vision’s recording and depositing the cash revenue of the Company, it would not have rendered the Main Action nugatory. 

56.  This court has no hesitation in rejecting this argument.

57.  First, the ultimate aim of the Orders, as far as the Plaintiff is concerned, is of course to prevent any understatement or misappropriation of the Company’s cash revenue by the Defendant, as pleaded in the Main Action.  No doubt, there is more than 1 way to achieve this aim but the parties had consented to the way stipulated in paragraph 1.  It is therefore wrong for Mr Cheng to suggest the recording and the deposit of the cash revenue of the Company by Vision is not concerned with the unfair prejudice pleaded in the Main Action.  Further, whether the Main Action would not have been rendered nugatory is beside the point.  The present proceedings are about whether paragraph 1 has been set at naught and treated with contempt by the Defendant, not whether the Defendant’s conduct had the further consequence of rendering the Main Action nugatory.

58.  Second, the Defendant is a party to the Orders and is of course bound by them.  What Mr Cheng tries to say, but not quite, is that paragraph 1 of the Orders is not expressly directed at the Defendant since it did not expressly require him to do or refrain from doing anything, the failure to comply by the Defendant would amount to a breach of the Orders.  But as the authorities on the sixth legal proposition show, even though a Court Order is not directed at a person as such, his conduct may still amount to contempt of court if such conduct has the effect of interfering with the administration of justice by causing the Order of the Court to be thwarted. 

59.  What Mr Cheng seems to have overlooked is the distinction, drawn by Lindley LJ in Seaward v Paterson [1897] 1 Ch 545 at 555 and adopted by Eveleigh LJ in Z Ltd v A-Z and AA-LL supra, between a motion to commit a man for breach of a Court Order and a motion to commit him for contempt of court.  The aforesaid authorities are concerned with the potential liability of third parties with notice of the terms of a Court Order.  In Seaward v Paterson,the Court of Appeal held that the Court had undoubted jurisdiction to commit for contempt a person not included in an injunction or not being a party to the action.  In this court’s view, they should apply, a fortiori, to parties to the action and the Court Order in question.  The legal basis for holding them in contempt of court is that they had knowingly interfered with the administration of justice by causing the order of the court to be thwarted. 

60.  As this court sees it, paragraph 1 mandated Vision to carry out certain tasks and this court has found on the evidence that the Defendant has obstructed Vision’s staff from carrying out those tasks.  The effect of such conduct is clearly to set the court’s process at naught and to treat the court’s orders with contempt.  That is conduct in contempt of court.

61.  The third step is to ascertain whether the Defendant had the requisite state of mind. 

62.  The short answer must be yes. 

63.  On the evidence, this court finds that the Defendant knew the facts which are said to make his acts punishable by contempt and that such acts were not accidental.  Indeed, far from being accidental, the Defendant’s acts in obstructing Vision from performing the tasks under paragraph 1 were deliberate. Even if this court were to accept the Defendant’s allegation that there was disagreement between him and Vision as to the most practical and effective way to carry out what was required by the Orders and that Vision’s preferred method was, in his view, not mandated by the Orders, that is no excuse for his conduct.

64.  In these circumstances, this court has no doubt that the Defendant had the requisite state of mind to establish punishable contempt. 

65.  To conclude, this court is satisfied beyond reasonable doubt that the Defendant is guilty of contempt of court.

Disposition

66.  This court hereby finds the Defendant guilty of having committed a civil contempt.

67.  Unless Mr Cheng confirms to this court that he is in a position to make oral submissions on sanction and costs, they shall be dealt with at a further hearing to a date to be fixed in consultation with counsel’s diary.