HIGH FASHION NEW MEDIA CORPORATION LTD v. LEONG MA LI

HCMP 932/2020

[2024] HKCFI 1490

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 932 OF 2020

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DECISION

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A.  INTRODUCTION[1]

1.  By a Judgment handed down on 26 July 2022 (“the Judgment”), the defendant was found guilty of having committed contempt of court in failing to comply with the Injunction Order. 

2.  In [118] of the Judgment, the parties were directed to use their best endeavours to agree on the directions to be sought for the purpose of the sentencing of the defendant.  They were further ordered that, in the event they could not agree on the directions, they shall lodge and serve their respective proposed directions by letter with reasons in support.

3.  By letter dated 16 August 2022, the plaintiff’s solicitors reported to the Court that the parties could not agree on directions.  The main difference between the parties was whether the hearing on sanction should be adjourned pending the defendant’s intended appeal against the Judgment.

4.  By letter dated 26 August 2022, the defendant’s former solicitors (Messrs. Norman M.K. Yeung & Co) proposed to this Court (with reasons in support) that the following order should be made:

“The question of sanction shall be adjourned pending the determination of the Defendant’s appeal against the findings of contempt made in the Judgment.”

5.  By a joint letter dated 7 September 2022, the parties reported to this Court that they still could not agree on the question as to whether the hearing on sanction should be adjourned pending the determination of the appeal against the Judgment.  Parties therefore put forward their respective proposed directions for the Court’s consideration.

6.  By directions dated 15 September 2022, this Court directed that the question of sanction shall be dealt with at a further hearing to be fixed to be heard (not earlier than 28 February 2023).  In effect, this Court has refused the defendant’s proposal to wait until the result of the appeal is known before dealing with the matter of sanction.  The defendant was also specifically directed to file and serve affirmation(s) by 27 October 2022 if she wished to rely on additional evidence on the question of sanction.   It should be noted that the deadline was so fixed because it was the proposal made by the defendant’s own solicitors in the joint letter that she be given 42 days to file such affirmation(s) in the event the Court saw fit to proceed with the hearing on sanction instead of adjourning it pending the determination of the appeal.

7.  The hearing on the question of sanction was subsequently fixed to be heard on 9 October 2023 (“the Original Hearing”).

8.  Hong Kong was hit by typhoon on 9 October 2023. As a result, the Original Hearing had to be adjourned to the following day.  However, the matter could not be heard on 10 October 2023 either because of judicial commitment on the part of senior counsel representing the plaintiff.  By consent, the matter was re-fixed.  The hearing was then adjourned to be heard on 2 May 2024.

B.  THE DEFENDANT’S SUMMONSES

9.  Before I consider the matter of sanction, I will have to put on record the orders made in respect of the defendant’s summonses filed on 4 October 2023 (5 days before the Original Hearing) and 23 April 2024 (9 days before the hearing on 2 May 2024) respectively, and the reasons therefor.  Such orders and reasons have been given verbally at the hearing on 2 May 2024.

10.  By summons filed on 4 October 2023 (“the 1^st Summons”), the defendant applied for the following orders:

“1. The Order granted by Deputy High Court Judge H. Au-Yeung on 26 July 2022 (‘the Contempt Order’) be stayed pending the resolution of the Defendant’s appeal against the Contempt Order by way of the Notice of Appeal dated 23 August 2022 in CACV 341/2022;

2. Notwithstanding paragraph 3 of the Order granted by Deputy High Court Judge H. Au-Yeung on 15 September 2022, time be extended and leave be granted to the Defendant to file and serve additional affirmation evidence on the question of sanction;

3. Costs be provided for.”

11.  On the same day (4 October 2023), the defendant filed her 3^rd Affirmation (without leave).

12.  By summons filed on 23 April 2024 (“the 2^nd Summons”), the defendant further applied for leave to file and serve her 4^th Affirmation for the purpose of the hearing on sanction.  The 4^th Affirmation was filed and served (without leave) on the same day (23 April 2024).

13.  The plaintiff’s stance on these applications was as follows:

(1)  The plaintiff did not object the filing of the defendant’s 3^rd Affirmation out of time;

(2)  The plaintiff took the view that it was premature for the defendant to apply for stay of the contempt order. However, the plaintiff accepted that if the defendant were committed to prison, such a committal order should be stayed pending the determination of the defendant’s appeal which shall be heard by the Court of Appeal on 1 November 2024;

(3)  The reliance of part of the defendant’s 4^th Affirmation was strenuously opposed.

14.  I will deal with the above matters in turn below.

B1.  Leave to file and serve the defendant’s 3^rd Affirmation

15.  As the plaintiff raised no objection, retrospective leave was granted for the defendant to file and serve her 3^rd Affirmation out of time on 4 October 2023.

B2.  Stay of the order dated 26 July 2022

16.  Upon taking further instruction, Mr Ng informed this Court at the hearing on 2 May 2024 that the defendant had decided not to proceed with the application for stay. 

17.  I therefore say no more on this application.

B3.  Leave to file and serve the defendant’s 4^th Affirmation

18.  The defendant’s 4^th Affirmation comprised of the following content:

A.	§§1 – 5	Introduction
B.	§§6 – 13	Application for leave to file and serve affirmation
C.	§§14 – 16	No urgency to proceed to sentencing
D.	§§17 – 23	The tragic car accident encountered by the defendant’s son
E.	§§24 – 27	Purging the contempt/payment into court
F.	§§28 – 33	Additional factors for mitigation
G.	§§34 – 74	Longford’s legitimate expenses
H.	§75	Conclusion

19.  The plaintiff did not object the admission of sections A – E and H of the defendant’s 4^th Affirmation.  However, the reliance of sections F and G thereof on the part of the defendant was strenuously opposed, on the ground that the matters which were covered therein (particularly the usage of funds transferred from the Capital Account) should have been made clear long time ago rather than being contained in this very late affirmation.

20.  Having considered submissions from both sides, I agreed with the plaintiff that, as a matter of principle[2], the defendant should not be granted leave to rely on Sections F and G of her 4^th Affirmation, for the reasons which I will explain below.

21.  It was undisputed between the parties at the substantive hearing for contempt of court held in mid-2022 that the respective destinations and purposes of the various transfers of monies away from the Capital Account are relevant to the seriousness of the breaches of the Injunction Order on the part of the defendant. 

22.  It may be recalled that, by directions dated 15 September 2022, this Court directed the defendant to file and serve affirmation(s) by 27 October 2022 if she wished to rely on additional evidence on the question of sanction.   The 42-day time period was given at the request of the defendant herself. 

23.  However, the defendant did not file any affirmation at all by the said deadline. 

24.  It was only on 4 October 2023 (almost a year later and 5 days before the Original Hearing which was scheduled to be held on 9 October 2023) that she took out a time summons (the 1^st Summons) and filed her 3^rd Affirmation (without leave).  In this affirmation, the defendant blamed her former solicitors for misleading her in believing that there was nothing that she nor her legal team could do pending the resolution of the plaintiff’s security for costs application (which had in fact been disposed of already on 11 September 2023 when the Court of Appeal handed down its decision).  She also said she was assured by her former solicitors that the paperwork regarding mitigation had already been settled. 

25.  I had great reservation on these explanations offered by the defendant.  It must be borne in mind that this was the second time when she was found guilty of contempt of court.  She must have known that she was required to make an affirmation in support of her mitigation.  Even if she had forgotten about her experience back in August 2017 when she tried to justify (by way of an affirmation) some of the transactions which were the subject matters of another contempt proceedings for the purpose of sentencing by Chow J (as he then was), she had no excuse to say that she had no idea of what should be done in the light of this Court’s directions dated 15 September 2022 (in respect of which she did not allege that she had no knowledge). The fact that she had never been asked to execute any affirmation in September and October 2022 should have alarmed her.  Yet, there was total inaction on her part.

26.  Since the plaintiff fairly accepted that leave should be granted for the defendant to file and serve her 3^rd Affirmation (despite the fact that it was late for almost a year), the filing of that 3^rd Affirmation was not controversial.  However, it should be borne in mind that by the time this 3^rd Affirmation was prepared, the defendant has already engaged a new solicitors’ firm to represent her.  In this 3^rd Affirmation, the defendant did, for the purpose of mitigation, assert that there was no finding in the Judgment nor evidence that she had misappropriated or pocketed Longford’s funds.  She also alleged, among other things, that the transactions marked under the description of “備用金” were used to pay off Longford’s legitimate business expenses and that Longford had not suffered any loss or damage as a result of the transactions under complaint.  These show that she knew perfectly well that the destinations and the purposes of the usage of the subject funds are relevant as far as her sentencing is concerned.   Yet, she did not say that she needed more time to gather more materials in support of her mitigation. 

27.  As aforesaid, the Original Hearing had to be adjourned and re-fixed to 2 May 2024 because of tropical typhoon signal and unavailability of the plaintiff’s senior counsel.  One would expect that if the defendant was really minded to take advantage of this adjournment period to further make good her case on mitigation, she would act fast.  Yet, the defendant only sought to adduce her 4^th Affirmation 9 calendar days (6 working days) before the adjourned hearing.

28.  She explained such lateness by stating in her 4^th Affirmation that:

(1)  The transactions complained of happened many years ago and the underlying documents are voluminous.  The preparation of the affirmation therefore took a lot of time;

(2)  More importantly, such preparation was delayed by her attendance of her elder son’s urgent and critical medical condition which was caused by a tragic car accident.

29.  As far as the first explanation is concerned, given the defendant’s and her legal team’s clear knowledge and acknowledgement (as the case may be) all along that the purposes of the transferred funds are relevant to the Court’s consideration of sanction, they (particularly the defendant herself whose liberty is at stake) are reasonably expected to start preparing for an affirmation setting out such purposes and explanations on the use of the funds transferred out of the Capital Account once the Judgment has been handed down (if not earlier).  One must bear in mind that the Judgment was handed down on 26 July 2022 (i.e. more than 1 year 9 months before the substantive hearing on sanction on 2 May 2024).  Therefore, it is simply inexcusable for the defendant not to make this 4^th Affirmation earlier (not to mention that she should have included the content on usage of funds in her 3^rd Affirmation).

30.  At the hearing, when Mr Ng for the defendant tried to persuade this Court that the plaintiff would not be prejudiced by the admission of such evidence and that the plaintiff had had enough time to respond, he emphasised that all the materials relied on by the defendant in fact came from the trial bundle for the substantive hearing for contempt of court. This assertion in fact reinforced my view that the defendant should have prepared this 4^th Affirmation long time ago because all that she was required to look at was the evidence which she had already gathered for the purpose of the substantive contempt of court hearing.

31.  In relation to the second explanation, while this Court has great sympathy for the defendant’s son, it should be noted that her son encountered the car accident only on 1 March 2024.  In other words, the unfortunate incident could at most only explain the delay of the last two months (March and April 2024).  In my view, that is not sufficient.

32.  The admission of such very late evidence would amount to, as the plaintiff’s senior counsel put it, an extremely belated ambush upon the plaintiff.  I agreed with the plaintiff that it would be patently unfair and should not be condoned.

33.  As mentioned above, it was the submission of the defendant that the plaintiff would not be prejudiced by the admission of the 4^th Affirmation, because all the materials relied on by the defendant, it was said, could be found in the trial bundle used in mid-2022.  It was further highlighted that the plaintiff had been able to make written submissions on the 4^th Affirmation in its 2^nd Reply Submissions dated 30 April 2024.  With respect, I do not agree with such arguments:

(1)  As Ms Rachel Lam SC explained, within the very limited time, while the plaintiff had been able to pick up a few forensic points, the plaintiff’s legal team could not undergo any thorough exercise to look through the evidence;

(2)  The plaintiff had also been deprived of adequate time to consider whether any application to cross-examine the defendant further should be made;

(3)  Pursuant to the directions given by this Court on 15 September 2022, the plaintiff was supposed to have 4 weeks to file and serve its affirmation upon perusal of the defendant’s affirmation.  The plaintiff had been deprived of this right by reason of the late filing of the 4^th Affirmation;

(4)  It is also unreasonable for the defendant to submit that the plaintiff had had adequate time to consider her 4^th Affirmation on the alleged basis that all that the plaintiff was required to do was to go through the trial bundle.  This submission was made on the basis of an erroneous limitation (and assumption) that the plaintiff could only rely on evidence already placed before the court. 

34.  The defendant argued that she would suffer irreversible and serious prejudice if this Court were to refuse leave to admit her 4^th Affirmation into evidence, since it is possible that she would face immediate custodial sentence and deprivation of liberty is a serious matter.  However, it is clear that she only has herself to blame in the light of the circumstances which have been set out above.

35.  As a fallback position, Mr Ng for the defendant asked the Court to allow the admission of paragraph 29 and the first part of paragraph 30 of the defendant’s 4^th Affirmation in any event because:

(1)  Paragraph 29 only sought to expand what had already been mentioned in the defendant’s 3^rd Affirmation by exhibiting a summary of Transpac Capital Group’s investments and asset management portfolio;

(2)  The first part of paragraph 30 only sought to place a new exhibit (LML-13) before the Court for the purpose of replacing another exhibit (LML-5) attached to the defendant’s 3^rd Affirmation which was incomplete. 

36.  I accepted that the defendant should be allowed to rely on LML-13.  However, I did not accept that the said paragraph 29 should be allowed to be adduced, as there was no reason why that summary could not be produced earlier. 

37.  I therefore granted retrospective leave for the defendant to file and serve her 4^th Affirmation on 23 April 2024 with the limited purpose of relying on paragraphs 1 – 27 and 75 thereof together with the exhibit marked “LML-13” only.

38.  The defendant was seeking indulgence from the Court.  Given the nature of contempt proceedings, the defendant should bear indemnity costs.  I therefore ordered that the plaintiff’s costs of the 1^st Summons and of the 2^nd Summons shall be borne by the defendant, with certificate for two counsel, to be taxed on indemnity basis if not agreed.

C.  RELEVANT LEGAL PRINCIPLES ON SENTENCING

39.  The relevant principles in relation to sentencing for contempt of court are well established. 

40.  In Arboit v Koo Siu Ying [2016] 3 HKLRD 154, Au-Yeung J held that:

“2. The starting-point is to acknowledge that contempt of civil court orders is a serious matter and that court orders are made to be obeyed. A prime consideration of the court in sentencing contempt is to ‘signal importance of demonstrating to litigants that the orders of these courts are to be obeyed’. By ‘litigants’, it is clearly referring to litigants in general and not just the contemnor himself. See Questnet Limited v Wilfred Royce Lane, HCA 1475/2006, Chu J (as she then was), 23 June 2008 (on sentence).

3. The object of the sentence is both to punish 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 & ors [2006] EWHC 3087, §8, Collins J; re Barrell Enterprises [1973] 1 WLR 19, at 27C-D, English CA. The court has to balance the 2 objects.

4. The sentence for contempt may range from a fine to a term of imprisonment. The UK Contempt of Court Act 1981 imposes a maximum term of 2 years’ imprisonment but Hong Kong does not have that statutory limit.

5. Imprisonment should be regarded as a sanction of the last resort. Any custodial sentence should be as short as possible consistent with the circumstances of the case. Willwin Development (Asia) Co Ltd v Wei Xing, HCMP 2946/2014 (unreported, 16 November 2015), B Chu J, §4(f); CMA CGM v Ng Chip Choi Maurice, HCMP 2988/2014, 12 March 2015, Au-Yeung J,§24(1).

6. The court may suspend a term of imprisonment for such period or on such terms as the court deems fit: CMA CGM v Ng Chip Choi Maurice, §24(2); Order 52, rule 7. This is an ‘absolute discretion’ but it would be difficult to think of circumstances where a suspended order should be made when nothing further remains to be done to comply with the order: Hong Kong Civil Procedure 2016, Vol 1, §52/7/2.

7. The court will consider if there are:

(a) Aggravating factors: Hao Xiaoying v Wong Yiu Lam William & Ors, HCMP 1968/2014, 2 March 2015, Anthony Chan J;

(b) Mitigating factors: Ge Transportation (Shenyang) Co Ltd v Lu Jinxiang, HCMP 1792/2013 (unreported, 22 January 2014) (DHCJ Marlene Ng); and

(c) Acts to purge the contempt, ie acts to atone for a contempt, eradicate it or cleanse it of its previous ill-effect which, in the case of a mandatory order, may be fulfilled if the contemnor thereupon does the act or causes it to be done: CJ v Flintshire BC [2010] EWCA Civ 393, at §6.

8. Relevant factors (which are not exhaustive) include:

(a) The nature of the order and breach in question, and the extent of the breach: Questnet Limited v Wilfred Royce Lane.

(b) Whether the contempt was contumacious or unintentional, the reasons, motives and state of mind: Hong Kong Civil Procedure 2016, Vol 1, §52/9/2.

(c) Whether the claimant has been prejudiced by virtue of the contempt and whether the prejudice is capable of remedy: Crystal Mews Ltd v Metterick, §13.

(d) Whether the contemnor appreciates the seriousness of the deliberate breach: Crystal Mews Ltd v Metterick, §13.

(e) Whether the contemnor has cooperated: Crystal Mews Ltd v Metterick, §13.

9.  […]

10. As circumstances of contempt vary greatly, there is little mileage to be gained from the citation of other cases: AXA China Region Insurance Co Ltd & anor v Li Yu Ping Ellen [2002] 3 HKC 339, 362 H-I, Stock JA.”

41.  In La Dolce Vita Fine Dining Co Ltd v Zhang Lan [2019] 2 HKLRD 341, [2019] HKCFI 618, Mimmie Chan J also had the following to say at [8]:

“The legal principles applicable to sentencing for contempt of court have been summarized in Suzanne Ruth Henderson v Scott Henderson HCMP 2016/2014, 14 April 2016 and Wilwin Development (Asia) Co Ltd v Wei Xing, HCMP 2946/2014, 16 November 2015. In Suzanne Ruth Henderson, the court 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 judges but to prevent interference with the due administration of justice. As succinctly pointed out in RACP Pharmaceutical Holdings Ltd v Li Xiaobo HCA 490/2007:

‘The first principle is that court orders are made to be obeyed. They are not guidelines, to be ignored or paid lip service to at the behest of the parties affected. They are the building blocks by which the administration of justice is made workable. Litigants who willfully breach orders at the expense of their opponents to their advantage do so at the risk of losing their liberty for being in contempt of court.’ ”

Her Ladyship continued at [14] and [15]:

“14. There is a strong public interest to ensure that orders of the court should not be flouted, although the individual circumstances of each case must always be evaluated. Imprisonment should be regarded as a sanction of last resort.

15. Subject to mitigating factors, if any, the starting and primary penalty for contempt of court in breaching an order in the nature of an injunction is imprisonment.  The normal penalty for breaches of injunction orders is imprisonment measured in months (Asia Islamic Trade Finance Fund v Drum Risk Management Ltd [2015] EWHC 3748 (Comm), Bunge SA v Huaya Maritime Corporation of the Marshall Islands [2017] EWHC 90 (Comm), Law Lai Lan v Tamang Prem Candr [2018] HKCFI 536).” 

D.  SENTENCING – AGGRAVATING AND MITIGATING FACTORS

42.  Both parties have put forward quite a number of factors which are said to be relevant to the question which this Court has to resolve herein, namely, the sentencing of the defendant.  I will discuss those factors in turn below.

D1.  Repeated offence

43.  It is undisputed that this is the second time that the defendant breached the Injunction Order.  She is therefore a repeated offender. The plaintiff submitted that this must be an aggravating factor which the Court must take into account.

44.  I agree with this submission.

45.  On the other hand, Mr Ng and Mr Wong for the defendant emphasised that each case should be decided on its own facts.  While I accept that the Court should of course sentence the defendant on the basis of the ways that she had breached the Injunction Order on this occasion, I do not think that means that the Court should ignore the fact that she has been convicted once already in the past in respect of the very same Injunction Order.

D2.  Seriousness of the breach

46.  I agree with the plaintiff’s submissions that the defendant’s breaches of the Injunction Order are of a serious nature. 

47.  First, there were quite a number of transactions involved.  In other words, the breach was not one-off.

48.  Second, I do not agree with the defendant’s counsel that the transactions grouped under Category B only constituted technical breaches.  With greatest respect, I do not understand why counsel thought fit to rely on such an argument even though it had been expressly rejected in the Judgment (see [19] – [23] thereof). Particular attention should be drawn to the Court’s finding that the defendant has been in blatant disregard of the Injunction Order[3].

49.  Third, the defendant’s attempt to rely on the 23 October 2017 Email in her submission that the breach was not serious is futile.  It is only required to make reference to [46] to [54] and [59] of the Judgment to illustrate why:

“46. Leong alleged that, to avoid breaching the Injunction Order again, she had notified Tong by virtue of the 23 October 2017 Email that she would cease to participate in the daily operations of Longford, and thereby also instructed Tong to seek the approval of both shareholders for all of Longford’s expenses. […]

47. On the basis of my finding that Leong had not informed Tong about the terms of the Injunction Order by telephone conversation as alleged, there was no evidence that Tong had any knowledge about the requirements imposed by the Injunction Order at all.

48. I also reject Leong’s evidence which was given during her cross-examination that she had persistently reminded Tong to ask for Yau’s approval. I hold that she had just made this evidence up during the trial, for she had never mentioned about this in her Affirmations.

49. In such circumstances, there is no doubt that Leong could reasonably have foreseen the possibility of Tong failing to comply with the Injunction Order, and Leong had plainly failed to take all reasonable steps to prevent such acts on the part of Tong. How could Tong be expected to comply with the terms of the Injunction Order when she did not even know what they were?

50. Furthermore, in relation to Category A transactions, it is important to bear in mind the modus operandi adopted by Leong and Tong at the material time. As reflected by Longford’s bank statements, whenever the balance in the Current Account was running low, funds would be transferred from the Capital Account to the Current Account, usually in the sum of RMB300,000 under the description of ‘備用金’. The funds would then be used to pay for the alleged expenses of Longford. In other words, under this modus operandi, the transfers from the Capital Account were to be used to pay off expenses yet to be claimed. According to Leong, she was well aware of this modus operandi at the material time.

51. However, in the 23 October 2017 Email, what Leong instructed Tong to do was: ‘關於梁富公司營運日常支出，請按時與雙方股東申請’. It is evident and undisputed that a large number of those daily operating expenses were paid by the “備用金” in the Current Account. In other words, before Tong sought approval from Yau as instructed by Leong, Tong had already transferred funds from the Capital Account to the Current Account in anticipation of future expenses.

52. Leong did not instruct Tong specifically in the 23 October 2017 Email not to transfer monies away from the Capital Account to the Current Account as ‘備用金’ unless Yau or Will Lam (as the case may be) had signed.

53. Given Leong’s admission of her knowledge about this mode of operation at the material time, she must be taken to have authorised Tong to deal with the Capital Account in the absence of Yau’s or Will Lam’s signature (as the case may be). Leong must also have foreseen that ‘備用金’ would be transferred from the Capital Account in the absence of the required signature of Yau/Will Lam.

54. In other words, the Injunction Order would be breached even if Tong had acted in full compliance with Leong’s instructions given by virtue of the 23 October 2017 Email.

[…]

59. Hence, since:

(1) Leong was well aware that it was all along the practice that ‘備用金’ (usually in the sum of RMB300,000) would be transferred from the Capital Account before any approval was sought from Yau/Will Lam in respect of any specific items of expenses;

(2) Leong must have been fully aware of the terms of the Injunction Order;

(3) Leong admitted that she had knowledge and understood the Previous Contempt Judgment;

(4) Leong only instructed Tong to seek approval from Yau in respect of expenses which incurred subsequently,

Leong must be taken to know that it would be a contempt even if Tong had followed her instructions closely.”

50.  Fourth, it is apparent that at least part of the sums transferred away from the Capital Account had been used for the defendant’s own purposes rather than for the benefit of Longford.  I will discuss this matter further below under section D7.

D3.  The defendant’s rejected evidence

51.  This is not a factor raised by the plaintiff.

52.  In my view, the Court should also take into consideration, as an aggravating factor, the fact that the defendant has made up evidence while defending the contempt proceedings:

(1)  During cross-examination, the defendant alleged that she had explained the terms of the Injunction Order to Tong in a telephone conversation, and therefore Tong had been given clear instructions that she was to seek the approval of Yau for transactions below RMB1 million and Will Lam for transactions of RMB1 million or above.[4] However, it was found that the alleged telephone conversation did not take place, and that she had just conveniently made it up when she was cross-examined on the matter[5];

(2)  The defendant also stated during cross-examination that she had persistently reminded Tong to ask for Yau’s approval.  However, again, it was found that she had just made this evidence up.[6]

D4.  Not deliberate/intentional/reckless breach

53.  One of the main mitigating factors relied on by the defendant’s counsel was that there was no finding in the Judgment that the defendant had breached the Injunction Order intentionally or recklessly.  Heavy emphasis had been placed on the Court’s finding that she had failed to take reasonable steps to prevent Tong from committing acts which were not compliant with the Injunction Order.  It was stated that this is equivalent to a finding of negligence only.

54.  With greatest respect, such a line of argument was made in total disregard of the findings made in the Judgment:

(1)  Since the defendant’s case was that she had entrusted Tong to comply with the Injunction Order, the test is whether the defendant had taken all reasonable steps to see that her orders to Tong had been obeyed.  The relevant legal principles had been cited at [26] of the Judgment, and this Court had considered the defendant’s case by following such guidance.  That is the reason why this Court had used the “reasonable steps” test as the yardstick in the Judgment.  However, it would be taking the findings made by this Court totally out of context to say that this Court only found that the defendant  had been negligent;

(2)  Indeed, it has been held in the Judgment that the defendant must be taken to have authorised Tong to deal with the Capital Account in the absence of Yau’s or Will Lam’s signature (as the case may be), and that the defendant must also have foreseen that “備用金” would be transferred from the Capital Account in the absence of the required signature of Yau/Will Lam.[7]

55.  The very bold suggestion made by the defendant’s counsel that the defendant had an honest and bona fide intention to comply with the Injunction Order is also totally contradicted by the findings made in the Judgment.  For example, the defendant had been found to be in blatant disregard of the Injunction Order as far as the Category B transactions are concerned[8]. It was also found that she had never informed Tong the terms of the Injunction Order[9]. Moreover, it was found that the Injunction Order would be breached even if Tong had acted in full compliance with the defendant’s instructions given by virtue of the 23 October 2017 Email[10].

D5.  Vicarious liability

56.  Another emphasis made by the defendant was that the defendant was not found to be liable as a primary actor but only indirectly via Tong as her agent. It was said that since the defendant is only vicariously liable for her agent, this is a strong mitigating factor.

57.  I am of the view that it is quite unhelpful to rely on a label such as “vicarious liability” when assessing the seriousness of the breach and hence the appropriate sentence.  Put it in another way, it is quite wrong to say that since the breach was committed via an agent, the breach must be treated with leniency.  It all depends on the particular circumstances of the case.

58.  The present case serves as a good illustration that even in the case where the contemnor is held to be vicariously liable, the breach can still be regarded as serious.   One only has to refer to [33] – [36] and [46] – [59] of the Judgment to appreciate such seriousness.  There is no room in this case for the defendant to blame her agent at all.

D6.  No personal benefit

59.  The defendant’s counsel submitted that:

“62. In the Judgment, this Court divided the transactions into 4 categories. None of these transactions were for Leong’s own benefit or self-interest, and there was no finding to such effect. This was also a factor which Chow J took into account in §10(1) of the Previous Sentencing Decision.

63. There is no finding or evidence that Leong misappropriated or pocketed Longford’s funds. Again, this was a factor which the Court took into account in the Previous Sentencing Decision (at §10(2)).”[11]

60.  With greatest respect, it is quite unfair for Mr Ng and Mr Wong to make such a point.  This is because even though they were newly instructed to act for the defendant and did not represent her at the substantive contempt of court hearing in mid-2022, they must be aware (by reading the Judgment[12]) that it was the defendant’s then team of counsel who submitted to the Court (which was accepted) that the ultimate destinations and purposes of the monies which had been transferred away from the Capital Account were irrelevant as far as liability for contempt was concerned.  Indeed, the defendant’s then senior counsel went on to submit that “in determining liability, the Court plainly [did] not need to investigate and make findings on how the funds were applied in the Current Account”[13]. It was for this reason that the Court did not make any findings in this regard in the Judgment.  It is thus regrettable that the defendant’s current team of counsel thought fit to take advantage of such a situation.

61.  As to whether the defendant is indeed entitled to rely on the mitigating factor that she did not derive any personal benefit from the transactions complained of, I will deal with the same in the following section.

D7.  Legitimate business expenses

62.  The defendant alleged that all the transactions which are said to constitute her contempt were for Longford’s legitimate business expenses and that this would amount to a mitigating factor.

63.  When assessing this argument, it must be borne in mind that while the relevant transactions took place between 29 April 2016 and 23 July 2020[14], the defendant admitted that Longford had no substantive business since 2016, and that all stores previously operated by Longford (for Will Lam’s other companies) had been gradually closed down from 2014 to 2015[15]. 

64.  However:

(1)  Category A comprised 30 transactions in the total sum of RMB7,492,916[16];

(2)  Category C covered 7 transactions in the total sum of RMB484,007[17];

(3)  Category D comprised 7 transactions in the total sum of RMB731,972.34 [18].

65.  These figures immediately lead to the question as to why, even if it was necessary to keep Longford “alive” from 2016 onwards, such large sums of expenses had to be incurred.

66.  A closer look at the actual expenses which had been incurred would reinforce the plaintiff’s case that this alleged mitigating factor should be rejected.  To cite a few examples:

(1)  It has been shown in Longford’s Table of Wages for January 2018 and the corresponding bank statement[19] that Longford had paid wages to 5 employees, namely, 唐魯華, 許鈴, 段春寶, 倪永梅 and 馬兆龍 in the said month. It is difficult to understand (and there is no admissible evidence explaining) why keeping a company “alive” necessitated the employment of so many staff members;

(2)  It is even more difficult to understand why Longford would have to pay year-end bonus to 4 out of those 5 staff members in 2018[20] if all that they were asked to do was to keep Longford “alive”;

(3)  Even if it was necessary to keep Longford “alive”, no justification had been provided as to why it was necessary to employ a driver (段春寶);

(4)  Some of the funds had been used to pay off maintenance fees of a car.  There is no evidence on why Longford needed to keep a car for use when it had no business at all. In fact, the defendant’s current counsel accepted that the car belonged to the defendant.  This shows that the defendant had used Longford’s funds for her own benefit;

(5)  Some of the expenses were paid for Mr Feng Jun’s personal expenses such as purchasing medicine and coffee[21].  It is evident that Mr Feng was a director of Besthope International Limited which was a company owned by the defendant’s family;

(6)  A sum of RMB40,000 had been paid towards legal fee incurred by the defendant when she was sued in her own capacity to return Longford’s chops to the then legal representative of Longford.  This legal fee apparently is not legitimate business expenses of Longford;

(7)  A total sum of RMB975,703.68 had been transferred to the defendant’s personal account;

(8)  There were also a lot of expenses incurred for flight tickets and hotel accommodation fees for the defendant’s other businesses, such as the Changsha Project[22]. There is simply no justification provided by the defendant at all.

67.  I therefore do not accept the defendant’s allegation that she had obtained no personal benefit from the subject transactions at all[23]. Quite the contrary.

D8.    No risk of further breach

68.  The defendant submitted that there is no risk that she will breach the Injunction Order in the future.

69.  This is undisputed, because, among other things, the defendant is no longer the CEO of Longford, and she has surrendered Longford’s legal representative chop.

70.  However, insofar as it is the defendant’s submission that the plaintiff has no legitimate interest in such circumstances in the enforcement of the Injunction Order, and that a custodial sentence will not serve any practical purpose other than to aggravate the defendant’s present suffering[24], I totally disagree, for it is trite that the object of the sentence is both to punish 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[25].  The inapplicability of the second object does not necessarily mean that it is meaningless to punish the defendant at all.

D9.  Impracticable to obtain Yau’s signature

71.  In the defendant’s skeleton submissions dated 4 October 2023, the defendant’s counsel argued that the Court should take into account the fact that it was impossible for Yau’s signature to be obtained for the purposes of the Injunction Order.

72.  At the hearing, the defendant’s counsel informed the Court that the defendant would no longer rely on such an argument.

73.  With respect, such a concession must have been correctly made, because this Court has clearly rejected the defendant’s case in this regard in the Judgment[26].

D10.  Anxiety and pressure arising from delay

74.  The defendant stated that the underlying civil proceedings were commenced back in 2014.  Further, she said that on top of such civil claim in which she was a defendant, two committal proceedings had been commenced against her.  She asked the Court to consider that these matters have brought her great pressure and anxiety, and that she has been forced to spend substantial sums in legal fees on those matters.

75.  These arguments are totally unmeritorious.

76.  First, as explained in [105] – [106] of the Judgment, pursuant to an order made by consent by Master M Wong on 23 January 2015, the defendant was supposed to take the next step in the Underlying Proceedings (by filing and serving her Defence) but she had never done so.  It therefore lies ill in her mouth to complain that the plaintiff had delayed the matter.

77.  Second, it is ridiculous for the defendant to complain that the plaintiff had initiated two committal proceedings against her when it is now clear that these committal proceedings are totally justified.  If she did not breach the Injunction Order in the first place, she would not have to face these committal proceedings. She should blame herself rather than anyone else.  She has no sympathy from this Court despite the anxiety and pressure which she had allegedly suffered.

D11.  Impact on the defendant’s reputation

78.  The defendant’s counsel urged this Court to consider that the defendant has had a distinguished career in business and she has received awards in the Mainland which publicly recognised her contributions.  She has also had a distinguished career in public service in the PRC.  It was therefore said that the findings of contempt in the Judgment and in the Previous Contempt Judgment have had an enormous deleterious impact on her reputation.

79.  In the circumstances of the present case, where the defendant has been found guilty of contempt of Court once already by virtue of the Previous Contempt Judgment, I do not think the Court should place weight on the so-called “enormous deleterious impact on her reputation” at all.  In my view, the defendant should have known such impact, if any, after she had been found guilty on the last occasion.  Yet, she proceeded to breach the very same Injunction Order for the second time (and for a long period of time).  Again, she only has herself to blame if her reputation is adversely affected.

D12.    Critical health condition of the defendant’s son

80.  By way of her 4^th Affirmation, the defendant informed the Court that her elder son has sustained severe injuries in a car accident in Dongguan on 1 March 2024, and that he is now hospitalised in the Critical Care Unit of Gleneagles Hospital.  It was said that she would need to be on his side to make medical decisions and accompany him during his final days.

81.  This Court must emphasise that it has every sympathy for the defendant’s son.

82.  However, since any custodial sentence would only be served after the determination of the appeal which will not be heard until 1 November 2024 (see section F below), the practical impact of this factor on sentencing is minimal, if any.  I will therefore not treat this as a mitigating factor.  Indeed, Mr Ng for the defendant also accepted at the hearing on 2 May 2024 that, strictly speaking, this is not a mitigating factor.

D13.  Personal and family circumstances

83.  The defendant has drawn this Court’s attention to the fact that:

(1)  her younger son has autism, which has always been a source of concern for her and her husband;

(2)  her mother is now 93 years old;

(3)  her husband is now 80 years old,

and submitted that if an order for committal is made, she would be robbed of her ability to take care of her husband and/or her mother during her sentence.  It was also said that they would be heartbroken if she were sent to prison.

84.  I do not accept that these matters would assist the defendant at all.  As mentioned, this is the second time that she breached the Injunction Order.  At the material time, she should have appreciated the serious consequences that such a second breach would bring.

D14.  Purging of contempt

85.  In the defendant’s 4^th Affirmation which was filed only 6 working days before the adjourned hearing on 2 May 2024, she, for the very first time, suggested that she would pay into Court a sum of RMB 7,575,198.04 (or an equivalent sum in Hong Kong Dollars) as an act of purging the contempt, pending further directions of the Court (“the Original Purging Proposal”).

86.  However, in the same Affirmation, the defendant also had the following to say:

“I reserve my right to demonstrate at the appropriate juncture that the vast majority, or most, of the funds transferred from the Current Account were indeed for Longford’s legitimate expenses.”[27]

87.  The Original Purging Proposal together with the above caveat had indeed caused this Court some concerns:

(1)  The defendant did not propose that the sum be paid back to where it came from (i.e. Longford’s account) but into Court.  In other words, Longford would not be repaid right away any part of the money which had been transferred from its account;

(2)  Worse still, it was suggested that the sum should remain in Court unless otherwise directed by the Court.  However, by “pending further directions of the Court”, what “directions” is the defendant referring to?  It should be noted, as aforesaid, that the defendant’s counsel had expressly stated that it was not necessary for the Court to make findings on the usage of the subject funds herein;

(3)  As confirmed by the parties, the plaintiff has not sought any monetary relief in the Underlying Action.  The issue of “legitimate business expenses” is therefore currently not before the Court in any court action. 

88.  Against such background, this Court raised the query at the hearing on 2 May 2024 as to under what circumstances would the Court give a direction on payment out (other than by consent of the parties) without a ruling on the purposes of the usage of the subject funds.

89.  Mr Ng for the defendant could not give any satisfactory answer at all apart from saying that:

(1)  Chow J had accepted the defendant’s “payment into court” as a means of purging the contempt on the previous occasion;

(2)  He would be very surprised if the plaintiff would not amend its Statement of Claim in the Underlying Action.

90.  This Court was not satisfied with the above answers because:

(1)  Without any further directions of the Court, the monies to be paid into Court by the defendant will stay in the Court forever, and the plaintiff could not get its hand on the same;

(2)  Taking the defendant’s case to the highest, Chow J only stated that the payment into court went “partly towards purging those breaches”[28];

(3)  It appears that no one had ever raised the same query (that the payment in court may stay in the court forever) before Chow J and as a result this aspect was not considered by his Lordship at all;

(4)  In any event, as accepted by the defendant’s counsel, this Court is not bound by Chow J’s decision;

(5)  It is difficult to understand why the plaintiff should be forced to amend its claim in the Underlying Action.

91.  The plaintiff also raised the question as to why the payment into court should be limited to the sum as proposed by the defendant, rather than the full amount of RMB8,606,600.43 which had been transferred from the Current Account to third parties (including the defendant).

92.  In addition, the plaintiff’s senior counsel stated that the plaintiff should not bear the burden of placing the issue of “legitimate business expenses” before the Court.  It should be the defendant who should bear such a burden.  For example, if the defendant pays the full sum back into Longford’s account, she may, if she desires, bring an action for reimbursement of any “legitimate business expenses” which she had paid for Longford.

93.  The defendant’s counsel, having heard the Court’s concerns and the exchange between the Bench and the plaintiff’s senior counsel, asked for time to take further instructions from the defendant, and eventually came up with another proposal for the consideration of the Court. It was suggested that the defendant shall put the sum of RMB8,606,600.43 into an escrow account opened in the name of the plaintiff in an independent law firm (to be nominated by both parties) pending further directions of the Court or mutual consent of the parties (“the Revised Purging Proposal”).  It was said that this proposal was different from the original one because the monies would be placed under the name of the plaintiff. 

94.  In substance, apart from the fact that the monies under the new proposal would be placed under the name of the plaintiff, the Revised Purging Proposal could not deal with the concerns raised by this Court:

(1)  While the monies are placed legally under the name of the plaintiff, the plaintiff or Longford can still not get their hands on the monies;

(2)  In order to get back the monies, the burden would be placed on the shoulder of the plaintiff/Longford to commence a new action or to amend the claim made under the Underlying Action.

95.  Hence, the Revised Purging Proposal would only partly purge the contempt.

96.  The plaintiff submitted that the purging proposals came in so late that it is doubtful as to whether the defendant was truly remorseful.  I agree.  However, it does not mean that the Court should disregard those proposals altogether.  In my view, the Court should still take into account any purging of the contempt even if the contemnor is not remorseful at all.

97.  On the other hand, this Court has not forgotten about the defendant’s alleged rationale of the Revised Purging Proposal – she was worried that if she returned the monies to the plaintiff/Longford, such monies would be under the control of the Lams, and there was no mechanism for the protection of such monies. 

98.  With respect, such explanation is simply unacceptable, for there is no evidence that the Lams will misappropriate the monies to be paid back by the defendant.  The defendant’s explanation only demonstrated that she placed her own interest over the purging of her contempt.

E.  SENTENCING OPTIONS

99.  On the basis of the various aggravating factors herein, the plaintiff suggested that the appropriate sentence in the present case should be custodial in nature, in the range of 1 to 3 months.

100.  On the other hand, the defendant submitted that a fine should be imposed in the circumstances of the present case. 

101.  With greatest respect, in my view, it must be wrong to impose a fine only in the present case.

102.  In the present circumstances where:

(1)  This is the defendant’s second breach of the very same Injunction Order;

(2)  The breaches were serious;

(3)  The defendant had breached the Injunction Order at least partly for her own benefit;

(4)  The defendant had pocketed at least part of Longford’s funds;

(5)  The defendant had only partly purged her breaches; and

(6)  The defendant was not remorseful at all and she even made up evidence at the trial in her attempt to defend the claim,

an immediate custodial sentence must be fully justified.  It is so even if there is no risk of further breach on the part of the defendant (in other words, the sanction would only serve the purposes of punishing the defendant for breaching a court order and demonstrating to other litigants that the orders of the Court are to be obeyed).

103.  Furthermore, while the defendant has proposed to partly purge the contempt, I hold the view that this would not have the effect of making an immediate custodial sentence inappropriate.  At most, this factor would reduce the length of custodial sentence (see further below).

104.  The conclusion of immediate custodial sentence may be tested against the sentencing decision reached by Chow J when the defendant breached the Injunction Order on the previous occasion.

105.  In the Previous Contempt Proceedings, Chow J took the view that it was a borderline case on whether an order of imprisonment should be made.  At the end, a fine in the total sum of $550,000 was imposed to mark the seriousness of the breaches of the Injunction Order and the defendant’s own undertaking respectively when:

(1)  Chow J accepted that the defendant did not breach the Injunction Order for her own benefit;

(2)  There was no suggestion that the defendant breached the Injunction Order so as to pocket Longford’s funds;

(3)  The defendant had partly purged her breaches of the Injunction Order, and the breach of her own undertaking had been fully purged;

(4)  The defendant had put in place certain safeguards to prevent further breaches of the Injunction Order; and

(5)  The defendant had tendered a genuine and sincere apology.

106.  It can be seen that the circumstances herein are much more serious.  If the breach considered by Chow J was a borderline case on whether an order of imprisonment should be made, then the serious circumstances herein must have brought this case to the other side of the line. 

107.  As a matter of completeness, I should add that I have considered the Court of Appeal’s Judgment in Solar System International Company Limited v Unison-Watch Manufacturing Limited & Another (CACV 3523/2001, unreported, 7 February 2002), in which it had been held at [24] that:

“[…] Once the court has reached the conclusion that a contempt was not deliberate or not contemptuous, it would be in very rare circumstances that a sentence of imprisonment would be appropriate.” (emphasis added)

108.  It was urged upon this Court by the defendant’s counsel that, applying the above principle, an immediate custodial sentence would be inappropriate. 

109.  I disagree with this submission, as there is no doubt that the defendant’s breach of the Injunction Order was contemptuous.

110.  Having considered all the circumstances of the case including the aforesaid aggravating factors, I am of the view that the appropriate starting point should be 6 weeks’ imprisonment. 

111.  The defendant has partly purged her contempt, in respect of which I would give a discount of 2 weeks.  I would therefore sentence the defendant to 4 weeks’ imprisonment.

112.  The defendant’s counsel argued that even if an order for committal is granted, the Court should suspend the sentence. 

113.  I should say right away that it is inappropriate to make any order of suspended sentence in the present case, because, as advocated by the defendant’s counsel, there is no risk that the defendant may breach the Injunction Order again, since (1) the Lams had caused a very large part of the balance in the Capital Account to be transferred to another account of Longford, and (2) the defendant has left her position as Longford’s CEO and has surrendered the legal representative chop. 

114.  In other words, there is no need to make sure that the defendant would comply with the Injunction Order in future. 

115.  Further, since it is certain that the defendant cannot breach the Injunction Order again, it is certain that the suspended sentence, if imposed, would not be activated.  That means if the defendant is only visited with a suspended sentence, in effect she would be unpunished (apart from having to pay indemnity costs of these proceedings).  It would therefore be meaningless for suspended sentence to be imposed herein.

116.  Indeed, in Arboit v Koo Siu Ying (supra), it has been stated that:

“6. The court may suspend a term of imprisonment for such period or on such terms as the court deems fit: CMA CGM v Ng Chip Choi Maurice, §24(2); Order 52, rule 7. This is an ‘absolute discretion’ but it would be difficult to think of circumstances where a suspended order should be made when nothing further remains to be done to comply with the order: Hong Kong Civil Procedure 2016, Vol 1, §52/7/2.”[29] (emphasis added)

117.  Mr Ng for the defendant disagreed that a suspended sentence would have no utility in such circumstances at all.  He highlighted the stigma which by virtue of a suspended sentence would attach to a successful businesswoman like the defendant.  He also said that such stigma would be carried by the defendant for the rest of her life.  Such submission is rejected.  In my view, such stigma was brought by her conviction of contempt of court rather than by the suspended sentence.  I should also emphasize that the sanction which this Court shall impose must be serious enough to give a clear signal to the society that court orders are meant to be obeyed.

118.  Mr Ng further suggested that, if necessary, the Court may consider imposing a fine together with suspended sentence.  I do not accept that it is appropriate to consider suspended sentence at all on the ground that it is meaningless as explained above, whether it is imposed together with a fine or not.  Given the seriousness of the breaches concerned, I am of the firm view that immediate custodial sentence is the only appropriate option.

F.  SUSPENSION OF EXECUTION OF THE COMMITTAL ORDER

119.  As aforesaid, the defendant has lodged an appeal against the Judgment, which will be heard by the Court of Appeal on 1 November 2024. 

120.  Hence, the defendant would have fully served her 4 weeks’ imprisonment by the time of the appeal.

121.  For this reason alone, justice requires that the defendant should only be ordered to serve her sentence upon dismissal of her appeal.  The plaintiff also fairly accepted that this approach should be taken.

122.  The only remaining question is in what form the order should take – whether this Court should make an order to stay the execution of the court order, or to grant her bail pending appeal or any other form of order.

123.  The legal principles governing stay of execution are trite.  In Star Play Development Limited v Bess Fashion Management Co. Ltd. [2007] 5 HKC 84, it was held by Ma J (as his Lordship then was) that the existence of an arguable appeal (that is, one with reasonable prospect of success) is the minimum requirement before a court would even consider granting a stay. However exceptional the circumstances may be otherwise justifying a stay of execution, if there exist no arguable grounds of appeal, no stay will be granted.

124.  However, as aforesaid, in my view, the short custodial sentence alone should be enough to justify a court order permitting the defendant to serve her sentence only upon dismissal of her pending appeal, irrespective of the merits of such an appeal.

125.  Considered in this light, it is arguable that the above view does not sit well with the legal principles set out in Star Play Development Limited.

126.  The better route therefore seems to be “bail pending appeal”. 

127.  However, this alternative route is not without its own difficulties. 

128.  As pointed out by the plaintiff’s senior counsel, Order 59 rule 20 of the Rules of the High Court (Cap.4A, Laws of Hong Kong) (“RHC”) provides that:

“(1) In the case of an appeal to the Court of Appeal against an order of committal or other punishment for contempt of Court made by a judge of the Court of First Instance, the notice of appeal must be served on the Registrar as well as on the party or parties required to be served under rule 3. (See App. A, Form 99)

This paragraph shall not apply in relation to an appeal to which rule 19 applies.

(2) Where, in the case of such an appeal as is mentioned in paragraph (1), the appellant is in custody, the Court of Appeal may order his release on his giving security (whether by recognizance, with or without sureties, or otherwise and for such reasonable sum as that Court may fix) for his appearance within 10 days after the judgment of the Court of Appeal on the appeal shall have been given, before the court from whose order or decision the appeal is brought unless the order or decision is reversed by that judgment.

(3)  An application for the release of a person under paragraph (2) pending an appeal to the Court of Appeal must be made by motion, and the notice of the motion must, at least 24 hours before the day named therein for the hearing, be served on the Registrar and on all parties to the proceedings who are directly affected by the appeal.”

129.  The above provisions stipulate the procedure for an appellant to apply to the Court of Appeal for bail pending appeal.  However, those rules do not provide for any procedure by which the appellant may apply to the first instance Judge for a similar relief.  It may therefore be argued that the first instance Judge does not have power to grant such bail.

130.  However, I consider that Order 52 rule 7(1) of the RHC should be applicable. This rule provides that:

“The Court by whom an order of committal is made may by order direct that the execution of the order of committal shall be suspended for such period or on such terms or conditions as it may specify.”

131.  I have not lost sight of the fact that this rule is normally relied on by the court to make an order of “suspended sentence” in the sense that the custodial sentence would only be activated upon the contemnor breaching an earlier order of the court again or failing to comply with such an earlier order, as the case may be.  Be that as it may, the wordings of the said rule, in my view, should be wide enough to provide power to the first instance Judge to grant bail pending appeal or an order to that effect.

132.  Even if I were wrong in my interpretation of Order 52 rule 7(1) of the RHC, this Court must have inherent jurisdiction to make such an order.

133.  The view that this Court has power to grant bail pending appeal is also supported by section 50 of the High Court Ordinance (Cap.4, Laws of Hong Kong) which provides that:

“[…]

(3) The Court of Appeal may on appeal reverse or vary the order or decision of a court, and make such other order as may be just; and without prejudice to the powers of any court to grant bail, provision may be made by rules of court for authorizing the release on bail of an appellant under this section.

(4) In this section—

(a) court (法庭) includes any tribunal or person having power to punish for contempt; […]”

(emphasis added)

134.  In my view, the emphasized part shows that the first instance judge must have power to grant bail.

135.  My attention has been drawn to the case of Secretary for Justice v Yuen Oi Yee Lisa (HCMP 2390/2008, unreported, 27 October 2010) in which it had been held that the first instance Judge does not have power to postpone or stay the execution of an order of committal.  However, the learned Judge in that case did not have assistance from the contemnor therein as she was unrepresented.  In any event, I am not bound by that decision. 

136.  I hold that this is an appropriate case in which the execution of the Committal Order should be suspended pending the determination of the defendant’s appeal against the Judgment, on the condition that the defendant pays $500,000 into court.

G.   ORDER

137.  To conclude, it is ordered that:

(1)  The defendant be committed to prison for a period of 4 weeks (“the Committal Order”);

(2)  The execution of the Committal Order be suspended pending the determination of the defendant’s appeal against the Judgment, on the condition that the defendant pays $500,000 into Court by 4pm on 31 May 2024;

(3)  The defendant shall, within 28 days hereof, put the sum of RMB8,606,600.43 (or an equivalent sum in Hong Kong Dollars) into an escrow account opened in the name of the plaintiff in an independent law firm (to be nominated by both parties) pending further directions of the Court or mutual consent of the parties.  In the event that the defendant fails to make such payment within the stipulated deadline, she shall be brought back to the Court for sentencing again.

H.    COSTS

138.  I order that the defendant shall pay the plaintiff’s costs of these proceedings (including the hearing originally scheduled for 9 October 2023), to be taxed on indemnity basis if not agreed, with certificate for two counsel.