ZQA AND OTHERS v. SCC AND ANOTHER

CACV 363/2020 & CAMP 171/2020

[2021] HKCA 194

CACV 363/2020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 363 OF 2020

(ON APPEAL FROM FCMP NO. 129 OF 2018)

________________________

________________________

AND

CAMP 171/2020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 171 OF 2020

(ON AN INTENDED APPEAL FROM FCMP NO. 129 OF 2018)

________________________

________________________

(Heard together)

________________________

REASONS FOR JUDGMENT

________________________

Hon Cheung JA (giving the Reasons for Judgment of the Court):

I. Background

1.1  The 1^st applicant claimed to be a mistress of Mr So Yiu Cheung, deceased (‘the deceased’).  The 2^nd and 3^rd applicants are the children born of this relationship.

1.2  The 1^st respondent is a son of the deceased.  The 2^nd respondent is the youngest brother of the deceased.  They are the executors of the will of the deceased.  The 1^st respondent is also a beneficiary under the will of the deceased.

1.3  In FCMP 63/2017, the applicants sought financial relief under the Inheritance (Provision for Family and Dependants) Ordinance (‘I(PFFAD)O’) (Cap. 481) against the 1^st and 2^nd respondents and other respondents (‘the financial relief application’).  For the purpose of this appeal it is sufficient to state that the other respondents included the deceased’s wife i.e. the 1^st respondent’s mother (3^rd respondent), another mistress of the deceased (‘the 1^st mistress’) (4^th respondent) and the children born out of that relationship (5^th and 6^th respondents).  They are also beneficiaries under the deceased’s will.  On 25 July 2017, the 1^st respondent attended the call‑over hearing.  Leave was granted, by consent, to all respondents to file and serve affirmations in opposition to the financial relief application within 28 days.

1.4  HH Judge G. Own by a consent order dated 16 November 2017 (‘2017 Order’) in FCMP 63/2017 ordered the 1^st and 2^nd respondents to file and serve an affirmation to answer three questions contained in the applicants’ interrogatories.  The time stipulated in the 2017 Order was 28 days which expired on 14 December 2017.  The three questions are:

1)  What is the size and nature of the ‘net estate’ of the deceased within the meaning of section 2 of I(PFFAD)O?

2)  What is the total amount of contribution in money or money’s worth made by the deceased towards the needs of the 4^th, 5^th and 6^th respondents in the 12 months before the death of the deceased on 29 March 2016?

3)  What is the total amount of provision (whether the same consists of money, securities or other properties) that the deceased had left by will to the 5^th and 7^th respondents according to the most recent valuation?

1.5  The 1^st and 2^nd respondents did not file any affirmation before the deadline.  The 1^st respondent affirmed an affirmation on 2 May 2018 and filed on 15 May 2018 (‘the 1^st respondent’s 1^st affirmation’) in FCMP 63/2017.  It was stated to be filed in opposition to the financial relief application by the applicants.  The applicants obtained leave on 19 June 2018 to commence contempt proceedings against them on the basis they had not complied with the 2017 Order (‘FCMP 129/2018’).  On 30 July 2018, the Judge ordered by consent that Question 3 of the interrogatories to be amended so that the named respondents should be the 4^th, 5^th and 6^th respondents (‘30 July 2018 Order’).  The originating summons and Statement of Facts filed in support of the contempt proceedings were amended to rely on breach of the 30 July 2018 Order as well.

1.6  The contempt hearing took place on 13 March 2019.  The 1^st and 2^nd respondents were found to be in contempt of court by the Judge on 11 June 2019 (‘the 2019 Judgment’). They were sentenced to three months’ imprisonment on 31 July 2020 (‘the 2020 Judgment’).

1.7  On 12 August 2020, the 1^st and 2^nd respondents issued a summons in the District Court (‘the leave summons’) in FCMP 129/2018 seeking:

1)  an extension of time to apply for leave to appeal against the 2019 Judgment; and

2)  leave to appeal to the Court of Appeal against the 2019 Judgment.

1.8  On the same day the 1^st and 2^nd respondents also filed in CACV 363/2020:

1)  a notice of appeal against the 2020 Judgment; and

2)  a notice of motion for their release pending the sentence appeal.

1.9  The leave summons dated 12 August 2020 was dismissed by the Judge on 8 September 2020.

1.10  The notice of motion was heard by this Court on 10 September 2020 and the 1^st and 2^nd respondents were released from custody subject to conditions.  Their earliest date of discharge was 30 September 2020.  By then they had served two-thirds of their sentence.

1.11  On 21 September 2020, the 1^st and 2^nd respondents by summons (‘the renewed leave summons’) filed in this Court in CAMP 171/2020 renewed their application for leave to appeal out of time against the 2019 Judgment.  On 22 September 2020, this Court ordered that a ‘rolled up hearing’ is to be held for the renewed leave summons in that if leave to appeal out of time is granted the appeal proper will be heard at the same time.  Further the rolled up hearing will be heard with the appeal against sentence in CACV 363/2020.

1.12  The renewed leave summons and appeal were heard by this Court on 10 February 2021 and we made the following decision:

1)   In respect of the renewed leave summons we were of the view that neither leave to appeal nor extension of time was required to appeal against the 2019 Judgment.  Accordingly we made no order on the renewed leave summons save that we granted leave to the 1^st and 2^nd respondents to amend the notice of appeal in CACV 363/2020 by incorporating the grounds of appeal against the 2019 Judgment (as contained in the draft notice of appeal attached to the renewed leave summons) into the notice of appeal in CACV 363/2020. 

2)  We allowed the 1^st and 2^nd respondents to adduce new evidence. 

3)  We allowed the appeal against the 2019 Judgment and the 2020 Judgment.  We set aside the orders in these two judgments. 

4)  In terms of costs, we ordered costs of the notice of motion be in the cause of the appeal, costs of the appeal be to the 1^st and 2^nd respondents and no order as to the costs below.  We also ordered payment out of the money paid into court by the 1^st and 2^nd respondents as security for their release. 

1.13  I now give reasons for our judgment.

II.  2019 Judgment

1)  Evidence before the Judge

(1)  The first affirmation of the 1^st respondent

2.1  The Judge had before him the 1^st respondent’s 1^st affirmation.

2.2  In this affirmation, the 1^st respondent dealt with his family background.  He was born on 8 September 1983.  He is a chartered civil engineer.  The family was initially a middle class family and did not have much wealth but as the business of his parents expanded, the family became better off.

2.3  In 2005, when the 1^st respondent was about 22 years old, he learned that the deceased had a relationship with the 4^th respondent and the 5^th and 6^th respondents were born of that relationship.  The deceased later left the family home he shared with the 3^rd respondent.

2.4  In 2014, the deceased was diagnosed with cancer and died on 29 March 2016.

2.5  In April 2018, the 2^nd respondent informed the 1^st respondent that the deceased had kept another mistress, namely the 1^st applicant.  The 1^st respondent and his mother only came to know the relationship of the 1^st applicant and the deceased when they received the court documents prepared by the 1^st applicant.

2.6  After the death of the deceased the 2^nd respondent took the 1^st respondent to the office of a solicitor, Ms Ada Chan who had prepared a will of the deceased dated 18 February 2014.  The applicants are not beneficiaries under the will.

2.7  The 1^st respondent said as the deceased did not live with him and his mother since 2007, they did not know about the financial conditions of the deceased and they also did not know of the will.  Ms Chan was instructed to apply for probate and she assisted the 1^st and 2^nd respondents to handle the deceased’s estate including bank accounts outside Hong Kong.

2.8  The 1^st respondent exhibited an ‘Executor’s account’ prepared by Ms Chan.  With reference to this account he explained 1) What are the assets which fall under the deceased’s residuary estate, 2) What are the assets which fall under the specific legacy, 3) The expenses to be paid, 4) The withdrawals from the DBS account, 5) Land properties in the deceased’s name, 6) The deceased’s distribution of his own assets since January 2014 and 7) The net assets of the deceased.

(2)  The 1^st respondent’s unfiled 2^nd affirmation

2.9  The 1^st respondent’s affirmation affirmed on 10 September 2018 but not filed in Court (‘the 1^st respondent’s unfiled 2^nd affirmation’) was referred to at the hearing on 13 March 2019.  In this affirmation, the 1^st respondent explained the money or property received by others as donatio mortis causa made by the deceased.  He stated that he had no communication with the 4^th respondent and he was never told by the deceased of his financial provision to the 4^th respondent. Therefore, he did not have knowledge about the deceased’s provision to the 4^th to 6^th respondents in the 12 months before the death of the deceased.  He further stated that according to the deceased’s will, the 4^th respondent is entitled to the deposit of an integrated account with Hang Seng Bank. Further, the 4^th, 5^th and 6^th respondents in total are entitled to third‑fourths of the residual estate of the deceased (after deducting the specific legacy stated in his will).  According to the latest executors’ account as of 5 July 2018, the total provision left by the deceased is $8,130,146.76.  The 1^st respondent then gave a breakdown which, however, showed a sum of $7,323,581.41 and not $8,130,146.76.

2)  The Judge’s decision

2.10  The 1^st and 2^nd respondents were represented by counsel at the hearing before the Judge.  As apparent from the 2019 Judgment, the stance taken by them was, amongst other things, that by reason of the 1^st respondent’s 1^st affirmation there was compliance, although late compliance, of the 2017 Order.  Further the Executors’ account and Schedule of Assets and Liabilities exhibited in that affirmation had provided answers to the interrogatories. 

2.11  The Judge, however, held that since the 1^st respondent’s 1^st affirmation was said to be filed in opposition to the financial relief application it was not filed in compliance with the 2017 Order.  Furthermore, the 1^st respondent had not stated in this affirmation that it was filed also on behalf of the 2^nd respondent who was also ordered to file an affirmation under the 2017 Order.  He held that:

“27. Given my finding against the Respondents’ contention of compliance by the filing of the 1^st Affirmation on 15/5/2018, it follows that the other submissions that the contents of the said Affirmation and the exhibits produced thereunder had provided answers to the Interrogatories becomes a non-starter.”

2.12  The Judge also rejected the 1^st respondent’s unfiled 2^nd affirmation as evidence of compliance of the 2017 Order because it was not filed with the Court and was not properly served on the applicants.

2.13  The Judge found that the 1^st and 2^nd respondents were in contempt.  He held:

“ 38. In the present case, the 2017 Order simply requires the Respondents to file an affirmation to answer the interrogatories raised. The meaning and operation of the terms of the 2017 Order are plain and clear, namely, to file an affirmation. This had not been done. As to the state of mind factor, I find against the Respondents. They had all along been legally represented who must have the benefit of legal advice as to the need to comply with court orders and also the consequences of flouting court orders. Nonetheless, they had failed to comply with the 2017 Order without any justifiable reasons being shown. I unreservedly find the Respondents’ failure to comply the 2017 Order was wilful, contumacious and accompanied by a state of mind sufficient to establish punishable contempt.”

2.14  The Judge also rejected other submissions by the 1^st and 2^nd respondents.  These submissions were that, even if there was further or outstanding information required, the applicants could well have applied for leave to file further interrogatories. The Statement of Facts for leave to issue contempt proceedings, though having been amended, was wholly deficient in that it failed to state with any degree of particularity how or in what manner the 2017 Order in question had been breached so as to enable the respondents to properly meet the charge and defend themselves.  There was nothing in the Statement of Facts (as amended) on what information the respondents had failed to provide, such that it was unclear as to what additional matters the respondents need to be dealt with, in order to comply with the order or to purge the contempt.  No penal notice had been filed or served.  No explanation had been given or exceptional circumstances shown as to why a penal notice ought to be dispensed with.

III.     2020 Judgment

1)  Evidence before the Judge

(1)  The 1^st respondent’s filed second affirmation

3.1  The 1^st respondent filed another affirmation on 29 August 2019 ‘to answer the amended interrogatories’ filed by the applicants on 31 July 2018.  In this affirmation, he repeated what are the assets that should fall under the deceased’s residuary estate.  He then gave a breakdown of the residuary estate which should fall within the deceased’s net estate.  He then repeated the item entitled ‘money or property received by such persons as donatio mortis causa as he had set out in his unfiled 2^nd affirmation.  He repeated the contents of the remaining two items in the unfiled affirmation, namely, contributions by the deceased to the 4^th to 6^th respondents 12 months before his death and provisions by him to these respondents under his will.  This affirmation is said to be filed on behalf of the 1^st and 2^nd respondents. 

2)  The Judge’s decision

3.2  The Judge imposed the sentence of three months’ imprisonment on the 1^st and 2^nd respondents.  He held:

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

3.3  He was critical that the 1^st respondent had not provided a full and complete answer.

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

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

3.4  He also held that the 2^nd respondent had never filed any affirmation since the 2017 Order was granted.

3.5  In respect of reliance on legal advice, the Judge held that:

“17. ... Having said, there is no issue of erroneous legal advice being provided by former lawyers unless Mr. Wong himself is prepared to concede that he had advised his clients erroneously whilst he was practising at Messrs. C.W. Chan & Co.”

IV.  The 1^st respondent’s explanation for the delay

4.1  The 1^st respondent filed a third affirmation dated 12 August 2020 (‘the 1^st respondent’s 3^rd Affirmation’) in support of his renewed leave summons and appeal.  He laid the blame for not complying with the 2017 Order on his solicitor Mr Peter Wong Ting Chun (‘Mr Wong’).  Mr Wong was first with the firm of Messrs. C. W. Chan & Co and later set up his own firm T. C. Wong & Co.

1)      Mr Wong’s conduct

4.2  The 1^st respondent said that Mr Wong had delayed with the case at every stage of the proceedings.  He referred to the WhatsApp messages exchanged between him and Mr Wong in his narration of events.

Stage 1: April to October 2017, from initial engagement to meeting of counsel  

4.3  He explained that in April 2017 in respect of the applicant’s application for financial relief in FCMP 63/2017, he together with the 2^nd respondent and his mother retained Mr Wong to be their solicitor.  He was the contact person with Mr Wong.  At the suggestion of Mr Wong, he and the 2^nd respondent agreed to instruct counsel, Mr Herman L H Poon (‘Mr Poon’), to act on their behalf, however, they did not meet him until a conference on 10 October 2017.

4.4  On 25 July 2017, he and Mr Wong attended a call‑over hearing for FCMP 63/2017.  Mr Wong addressed the Court and directions were made by the Court at the hearing.  One of the directions was for all respondents to file and serve affirmations in opposition to the originating summons within 28 days, i.e. before 22 August 2017.

4.5  After the call-over hearing, for a period of two and a half months between 25 July 2017 and 10 October 2017 he had repeatedly requested Mr Wong for a meeting with Mr Poon to obtain general advice on the proceedings in FCMP 63/2017 and for the drafting of the affirmation in opposition as directed by the Court. 

4.6  Meanwhile on 6 October 2017, the applicants had applied by summons for leave to file and serve interrogatories in FCMP 63/2017 (‘interrogatories summons’). The interrogatories summons was fixed for a hearing on 16 November 2017.

Stage 2: 10 October 2017 to 25 April 2018, the supply of draft 1^st affirmation

4.7  On 10 October 2017, in the presence of Mr Wong, Mr Poon met the 1^st respondent and the 2^nd respondent separately.  The 1^st respondent was asked and he gave instructions orally to Mr Poon on the originating summons and the interrogatories summons.  Mr Poon advised them that they had no grounds to oppose the interrogatories summons since they were the named as executors of the estate of the deceased.

4.8  Ten days later on 20 October 2017, Mr Wong informed them that Mr Poon was in the process of drafting an affirmation.  On 15 November 2017, Mr Wong further told them that their attendance for the hearing for the interrogatories summons on the next day would not be required.  He told the 1^st respondent before the hearing on 16 November 2017 that the applicants had agreed to a further 28 days for the filing of the affirmation.

4.9  Between 14 December 2017 and 25 April 2018, the 1^st respondent repeatedly asked Mr Wong for updates on the required affirmation.  He became very concerned with the time spent on the drafting of the affirmation and by the end of December 2017 he specifically asked Mr Wong whether they would face any penalty for the delay.  Mr Wong answered in the negative.  At the end, and despite the repeated demands, Mr Wong was only able to send the draft 1^st affirmation of him on 25 April 2018.

4.10  The 1^st respondent said that during 20 October 2017 to 25 April 2018, he and the 2^nd respondent entrusted Mr Wong to take such steps as necessary, including any follow up with Mr Poon on drafting of the required affirmation.  From time to time Mr Wong asked them for further instructions.  They promptly responded and attended a meeting with him about the outstanding issues.  They had also promptly provided all documents in their possession or control to Mr Wong upon request.

4.11  They did not know the reason why more than six months were used before the draft of his 1^st affirmation was ready on 25 April 2018.  They had completed their part by providing documents and instructions as requested.  They had persistently requested for updates during that time and they could only assume from the fact that Mr Wong allowed the draft to be completed that late would not lead to drastic consequence.

Stage 3: 25 April to 15 May 2018, filing and service of 1^st affirmation

4.12  After receiving the draft 1^st affirmation the 1^st respondent replied to Mr Wong within two hours by way of email expressing his observations and comments.  The 1^st affirmation was finalised by Mr Wong who asked him to affirm the same in the following week on 2 May 2018. 

4.13  The 1^st respondent asked Mr Wong to a) enquire whether the applicants gave any response to the 1^st affirmation and b) advise on how they were to continue with the conduct of the proceedings in FCMP 63/2017.

4.14  Mr Wong advised that the 1^st affirmation would be used to oppose the originating summons and to answer the interrogatories summons.  He did not advise them that a separate or specific affirmation was required for compliance of the 2017 Order.  He also did not say that he was going to prepare one.

4.15  They did not know at the time that the 1^st affirmation, although being affirmed on 2 May 2018, was only filed on 15 May 2018.  Mr Wong did not consult them about this beforehand.

4.16  They had no intention to delay the proceedings in FCMP 63/2017.  Since they together with the 3^rd respondent are beneficiaries to the estate of the deceased, it served no benefit to them to drag on the disputes with the applicants.  On the contrary, the earlier the disputes could be resolved, the earlier they could resume their duties as executors to distribute the estate.

Stage 4: 18 May to 9 September 2018, the unfiled 2^nd affirmation  

4.17  For the month after 18 May 2018, they did not hear from Mr Wong.  He did not ask them for further instructions or documents.  They could only assume from this that the 1^st affirmation was sufficient for the purposes for which it was made.  They had no reason to believe at that point in time that any drastic consequence would follow.

4.18  The contempt proceedings filed and served by the applicants on 3 July 2018 (FCMP 129/2018) came to them as a complete surprise.  The 1^st respondent immediately sought advice from Mr Wong.

4.19  On 6 July 2018, Mr Wong informed the 1^st respondent that the applicants were accusing them of contempt of court by failing to file an affirmation in answer to their interrogatories.  The 1^st respondent asked Mr Wong why was this application issued and whether there was any merit to the applicants’ claim.  Mr Wong advised him that the applicants had failed to serve a penal notice and so there would be a procedural problem for them.  He also explained that since the contempt alleged at the time had already been purged by the 1^st affirmation, no grave consequences such as imprisonment would follow.

4.20  Mr Wong assured the 1^st respondent that there was nothing to worry about and suggested that they leave it to him to speak with the applicants’ solicitors.  He advised them to oppose their application for committal.  He also asked them to consider a change of counsel because Mr Poon had been busy with his other engagements and might not be able to continue to represent them.  Relying on Mr Wong’s advice, they continued to retain Mr Wong.

4.21  By mid-July 2018, the 1^st respondent requested Mr Wong to update the progress, to provide an overall advice on the current proceedings, and an update on change of counsel.

4.22  In the following two weeks up to early August 2018, the 1^st respondent continued to chase Mr Wong.  Mr Wong talked about an application by the applicants to amend the interrogatories.  He said that the application was only to correct some clerical mistakes and advised them to agree to the amendment. Hence, on 30 July 2018 by consent the applicants were allowed to file and serve the amended interrogatories.

4.23  Up to that time, Mr Wong made no mention about the 1^st affirmation being deficient or about a need to file a further affirmation to answer the interrogatories.  He did not ask for further instructions or documents arising from the amendment of the interrogatories.

4.24  On the evening of 9 September 2018, Mr Wong suddenly sent the 1^st respondent a draft answer, in the form of an affirmation, and requested the 1^st respondent to urgently affirm it on the following day.  He said that the new affirmation was based on the contents of the 1^st affirmation.  When the 1^st respondent met Mr Wong the next day, he explained that the new affirmation was to deal with the complaint of the applicants.  Although prior to affirming the new affirmation, the 1^st respondent did notice from paragraph 1 that it was made to answer the amended interrogatories, he did not ask Mr Wong any particular questions because the new affirmation appeared to contain more or less the same materials as his 1^st affirmation, and he also assumed that the new affirmation was the result of some negotiation that Mr Wong had promised that he would have with the applicants’ solicitors.

4.25  This new affirmation turned out to be the unfiled 2^nd affirmation referred to in paragraph 25 of the 2019 Judgment.

4.26  The 1^st and 2^nd respondents only came to know at the hearing on 13 March 2019 that the unfiled 2^nd affirmation had not been filed and that the unfiled 2^nd affirmation was only given to the applicants’ solicitors one day before the hearing.

Stage 5: 10 September 2018 to 13 March 2019, hearing before the Judge  

4.27  As there was no news from Mr Wong after 10 September 2018, the 1^st respondent called him on 6 October 2018.  Mr Wong only briefly mentioned about the progress of the proceedings in FCMP 63/2017, the issue of payment out in those proceedings and the proceedings in FCMP 129/2018.  Mr Wong also recommended that they retain a different counsel when Mr Poon became unavailable.

4.28  Over the course of the following three months between 12 October 2018 and 31 January 2019, the 1^st respondent continued to chase Mr Wong repeatedly about the progress of the two proceedings and about whether a change of counsel was needed.  Mr Wong did not give any or any meaningful reply except on 10 January 2019, Mr Wong suddenly informed him about a hearing fixed in late February 2019.  Despite having repeatedly asked him for updates up to February, Mr Wong did not tell them about the hearing.  He did not ask them to attend the hearing or tell them what happened at the hearing afterwards.  Mr Wong remained very much unresponsive up to 4 March 2019.  Then on 5 March 2019, Mr Wong telephoned to request them to attend the committal hearing on 13 March 2019.  They were placed on very short notice about the hearing and when asked why, Mr Wong said only that he was unable to reach a settlement with the applicants for the committal proceedings.  They decided to continue to retain Mr Wong as he was familiar with the case.  Upon his advice counsel was changed and they met new counsel on 11 March 2019.  They were advised that there was a reasonable prospect that the committal application be dismissed and that it was unnecessary for them to give evidence.  After the hearing on 13 March 2019, the 1^st and 2^nd respondents continued to consult Mr Wong about the ongoing conduct of the proceedings in FCMP 63/2017 and other matters concerning the administration of the estate of the deceased.

4.29  The 1^st respondent stated that they entrusted the handling of the case to Mr Wong. They were aware there was a delay in the filing of the 1^st affirmation but they believed Mr Wong would take steps to address the delay.

Stage 6: Engagement of Mr Wong after 13 March 2019

4.30  Between early June 2019 and mid-July 2019, the 1^st respondent asked Mr Wong from time to time whether the Judge had given decision on the committal proceedings. Although the 2019 Judgment was handed down on 11 June 2019, Mr Wong only sent him a copy on 22 July 2019.  Mr Wong then advised them to ‘properly’ file and serve an affirmation to answer the amended interrogatories in FCMP 63/2017.  He also advised that they had good grounds of mitigation.  Mr Wong said that with the proper filing of the new affirmation soon and with proper written mitigation, the finding of contempt would have little practical concern for them.  He did say that imprisonment was one of the sentencing options, but he also told them this was very unlikely.  Mr Wong did not advise them for an appeal and he did not tell them the time limit for making an appeal against the 2019 Judgment.  Between 25 July 2019 and 29 August 2019, Mr Wong worked on finalising the affirmation and the submissions for mitigation.  

2)  Change of solicitor

4.31  They were shocked by the 2019 Judgment and the 2020 Judgment which sentenced them to three months’ imprisonment.  They had not expected a prison sentence would be imposed.  On 5 August 2020, they decided to change solicitors.

3)  Notice served on Mr Wong

4.32  In view of the serious allegations against Mr Wong, the Court directed the renewed leave summons in CAMP 171/2020 and the 1^st respondent’s affirmations be served on Mr Wong with leave given to Mr Wong to file an affirmation in response within 28 days thereafter.

4.33  The documents were served on Mr Wong on 23 September 2020.  He did not respond within the time stipulated despite reminders sent to him.  It was only on 9 November 2020 that Mr Wong replied:

“We write to confirm that there was a delay on our part in handling the affirmation and Answer for Mr. So Chi Chung and Mr. So Ka Keung (1^st and 2^nd Respondents in FCMP No.63 of 2017) during the period from October 2017 to April 2018.

I confirm that I am not prepared to file any affirmation in response under the captioned proceedings.”

V.  Our view

1)   Appeal from the District Court

5.1  The starting point is that an appeal from the District Court to the Court of Appeal in respect of a civil matter requires leave from either of these courts: section 63(1) of the District Court Ordinance (Cap. 336) (‘DCO’).

5.2  However, section 63(1) is expressly stated to be subject to subsection (3) which provides that an appeal from, inter alia, an order made pursuant to section 48B does not require leave.

“ (3) A person against whom an order is made pursuant to section ... 48B ... is entitled to appeal to the Court of Appeal without leave.”

5.3  Section 48B of the DCO deals with the District Court’s jurisdiction for contempt of court. The relevant part of section 48B reads:

“A judge has the powers of a judge of the Court of First Instance to-

(a) punish for disobedience of a judgment or order of the Court; or

(b)  punish for breach of undertaking; or”

5.4  The jurisdiction of the Court of Appeal to deal with appeal from a contempt decision is found in section 50 of the High Court Ordinance (Cap. 4).  The relevant part reads as follows:

“ (1) Subject to this section, an appeal shall lie from any order or decision of a court, other than the Court of Appeal, in the exercise of jurisdiction to punish for contempt of court, including criminal contempt; and in relation to any such order or decision this section shall have effect in substitution for any other law relating to appeals in civil or criminal proceedings.

(2) An appeal under this section shall lie to the Court of Appeal in any case at the instance of the person against whom the proceedings for contempt of court were brought or the order was made and, in the case of an application for committal or attachment, at the instance of the applicant.

(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.”

5.5  In our opinion, in view of the provisions under the DCO it is not necessary for the 1^st and 2^nd respondents to apply for leave to appeal against the 2019 Judgment.

5.6  In their summons filed on 21 September 2020 the 1^st and 2^nd respondents sought extension of time to appeal against the 2019 Judgment.  It is also our view that it is not necessary for them to apply for extension of time to appeal.

5.7  In our view the 2019 Judgment must be read together with the 2020 Judgment.  As a matter of practice, after a Court has found a person to be in contempt of court, it will usually adjourn the proceedings in order to hear mitigation before the sentence is imposed.  In this case it was only for this reason that the Judge adjourned the proceedings resulting in his judgment being divided into two parts.  The 2019 Judgment when it was delivered on 11 June 2019 was not yet an order punishing the 1^st and 2^nd respondents for disobeying a court order in terms of section 48B of the DCO.  It found them to be in breach of the 2017 Order and in contempt of court but the punishment was only imposed by the 2020 Judgment.  In effect there is only one judgment: the 2019 Judgment together with the 2020 Judgment is the order punishing the 1^st and 2^nd respondents for their disobedience of the 2017 Order under section 48B of the DCO.  It is the composite judgment which came into existence when the Judge delivered the 2020 Judgment that the 1^st and 2^nd respondents were entitled to appeal as of right within the 28 -day appeal period under Order 58, rule 2(9) of the Rules of the District Court (Cap. 336H).

5.8  The notice of appeal in CACV 363/2020 which dealt only with the sentence of three months’ imprisonment was served within time and the 1^st and 2^nd respondents’ current lawyers were wrong to issue a separate application for leave to appeal out of time in respect of the 2019 Judgment.  This is unnecessary.  The appeal against the 2019 Judgment as identified in the draft notice of appeal in the renewed leave application can be incorporated in the notice of appeal in CACV 363/2020 and we so ordered. 

2)  Leave to adduce new evidence

5.9  The 1^st and 2^nd respondents sought leave to adduce new evidence in respect of the following three affirmations.  First, the 1^st respondent’s 3^rd affirmation dated 12 August 2020 in FCMP 129/2018.  This affirmation was before the Judge when he considered the leave application on 8 September 2020.  Second, the 2^nd affirmation filed in FCMP 129/2018 on 28 August 2019.  This affirmation was before the Judge when he considered the sentence.  Third, the 2^nd affirmation of the 1^st respondent filed on 26 August 2020 in CACV 363/2020 in response to the 1^st affirmation of the 1^st applicant filed on 24 August 2020.

5.10  The relevance of these three affirmations is that they support the 1^st and 2^nd respondents’ appeal, in that, 1) they provided an explanation that the 2017 Order was not complied with on time because of the conduct of their former solicitor Mr Wong and 2) the 2017 Order has by now been complied with.  Accordingly, they should not be found to be in contempt of court order.

5.11  The Court of Final Appeal reviewed the law and practice on contempt of court in Kao, Lee & Yip v Koo Hoi Yan (2009) 12 HKCFAR 830.  The threshold to admit fresh evidence in contempt cases is met if it is necessary or expedient in the interest of justice.  The threshold is met in the present case.  The 1^st and 2^nd respondents had been represented by Mr Wong throughout the contempt proceedings until they changed to their present solicitors Krishnan & Tsang when they commenced the present appeal together with the leave application.  During the time when Mr Wong represented them, he chose not to explain why the 2017 Order was not complied with on time.  As indicated earlier, whilst admitting that there were delays on his part, Mr Wong was not prepared to respond to the complaints by an affirmation.  With this attitude, it is most unlikely that the 1^st and 2^nd respondents would be advised by him during the time when he was representing them that they should file an affirmation regarding the way he handled the case.  In our view justice requires this Court to be fully apprised of the background why the 1^st and 2^nd respondents had not responded to the 2017 Order and the way the contempt proceedings was being handled by Mr Wong on their behalf.  They are relevant to the issue of the intention of the 1^st and 2^nd respondents towards the compliance of the 2017 Order.  In any event we are of the view that the new evidence also satisfies the Ladd v Marshall threshold.  Accordingly we admitted the new evidence.

3)       Merits of the appeal

5.12  The proper approach in committal for civil contempt by reason of breach of a court order is essentially a three‑stage test, namely:

1)  the relevant court order must be construed to ascertain its meaning and operation;

2)  it must be determined whether the person 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 [22] and Effiscient Ltd v Edward Eugene Lehman [2013] 3 HKC 300.

5.13  There is no dispute on the first two stages of the approach.  The 2017 Order was clear.  It required the 1^st and 2^nd respondents to file an answer before 14 December 2017 and this was not complied with.  The real issue in this appeal is whether they had the requisite intention.  In Kao, Lee & Yip the contemnor appellant argued that the relevant mens rea to be proved in cases of civil contempt is an intention ‘to interfere with or impede the due administration of justice’.  This was rejected by the Court of Final Appeal as being contrary to the objective of proceedings for civil contempt as well as criminal contempt, the objective being the maintenance of the Court’s authority.  The Court of Final Appeal reviewed the authorities on this issue which began with the classic formulation by Warrington J in Stancomb v Trowbridge Urban District Council [1910] 2 Ch 190, 194:

“ ... if a person or a corporation is restrained by injunction from doing a particular act, that person or corporation commits a breach of the injunction, and is liable for process for contempt, if he or it in fact does the act, and it is no answer to say that the act was not contumacious in the sense that, in doing it, there was no direct intention to disobey the order.”

5.14  This was approved by the House of Lords in Heatons Transport (St Helens) Ltd v Transport and General Workers’ Union [1973] AC 15.  The following extract by Millett J in Spectravest Inc v Aperknit Ltd [1988] FSR 161, 173‑174 best encapsulates the relevant principle:

“To establish a contempt of court, it is sufficient to prove that the defendant’s conduct was intentional and that he knew of all the facts which made it a breach of the order. It is not necessary to prove that he appreciated that it did breach the order … Authority for this conclusion may be found in Heatons Transport (St Helen’s) Ltd v Transport & General Workers’ Union ([1972] 3 All ER 101 at 116‑117, [1973] AC 15 at 108-110), and Mileage Conference Group of the Tyre Manufacturers’ Conference Ltd’s Agreement ([1966] WLR 1137). In the first of those cases, Lord Wilberforce described as contempt conduct which was ‘neither casual nor accidental and unintentional.’”

5.15  The Court of Final Appeal held that a person’s reliance on legal advice which turned out to be wrong is not sufficient to escape liability although this may serve as mitigation for the breach which constituted the contempt.  Sir Gerard Brennan NPJ stated:

“ 53. There is no reason, either of policy or authority, for adopting a criterion of liability for civil contempt that is stricter than that defined by the Stancomb principle. The exception for breaches that are not ‘casual or accidental or unintentional’ ensure that no injustice is done when the breach of the court order is occasioned by such a cause. But when an act or omission in breach of a court order is done or made consciously, voluntarily and unaffected by any mistake – that is, not casually, or accidentally or unintentionally – it is immaterial that the breach was committed in reliance on a third party’s advice, even legal advice. Re Mileage Conference Group of the Tyre Manufacturers’ Conference Ltd’s Agreement [1966] 1 WLR 1137 is the authority chiefly cited for the proposition that reliance on legal advice is no defence if a breach is established. Megaw J, reading the judgment of the Restrictive Practices Court, said (at p.1162):

We conclude, therefore, that the breaches of undertaking here were contempts of court, even though it were to be shown that they were things done, reasonably and despite all due care and attention, in the belief, based on legal advice, that they were not breaches.

Distinguishing penalty from liability, his Lordship later said:

Questions as to the bona fides of the persons who are in contempt, and their reasons, motives and understandings in doing the acts which constitute the contempt of court, may be highly relevant in mitigation of the contempt.  Bona fide reliance on legal advice, even though the advice turns out to have been wrong, may be relevant, and sometimes very important, as mitigation.  The extent of such mitigation must, however, depend upon the circumstances of the particular case, and the evidence adduced.”

5.16  In Mileage Conference Group, a group of tyre manufacturers entered into a scheme which they were advised by leading and junior counsel that the scheme was permissible under the relevant legislation and would not involve a breach of a proposed undertaking by which they agreed to give to the Restrictive Practices Court that, inter alia, they would not make agreements which had the effect of restrictive practice.  As it turned out the scheme was found to be not permissible and the authority applied for writs of sequestration of the assets of the members as a punishment for their contempt of court in failing to comply with the undertaking.  Megaw J delivered the judgment of the Restrictive Practices Court the relevant part was quoted in Kao, Lee & Yip as stated above.

5.17  The Court of Final Appeal referred to what the appellant had done in the case and held that they did not provide an excuse for the contempt.

“ 54. In the present case, the mens rea that must be proved to show Mr Koo’s liability for breach of the first Order is his conscious and voluntary decision not to maintain an account of the work actually undertaken by KP for former clients of KLY but to keep the files and ledgers and the records kept in the Konto and PPOS programs in the hope that that would suffice if he were ever ordered to produce an account as ordered by Mayo J. The hope was misconceived. The conclusion which Mr Koo and his then solicitors reached in January 1994 that ‘the proper and diligent preparation of the books and the financial records of [KP] would be proper performance of the [First] order’ was erroneous since the books and financial records were not designed to ‘maintain an account of all work … in relation to any former client of [KLY] until trial’.

55.    Indeed, Mr Koo’s inability to exhibit and verify an account made pursuant to the first Order when required to do so within 28 days by para.1(2)(b) of the second Order demonstrates his failure to obey the first Order.  The plea that he ‘did his best’ or that the ordinary practice of his office was considered by him and his solicitor as adequate does not show that the failure was ‘casual or unintentional or accidental’.  Mr Koo was guilty of contempt of the first Order.”

5.18  This principle is well established but it is important to bear in mind what the Court of Final Appeal had said in relation to the issue of intention and the case of Adam Phones Ltd v Goldschmidt [1999] 4 All ER 486 which it did not disapprove.

“41. ... mens rea is negative if an act or omission is involuntary, or if there is a mistake about the circumstances which make the act or omission a crime or if an element of the crime is a result of the act or omission and the result is accidental.”

5.19  At [48] it referred to the judgment of Jacob J in Adam Phones Ltd at 494:

“ ... Free from authority I would have sided with Irtelli’s case [i.e. Irtelli v Squatriti and others [1993] QB 83]. The purpose of the remedy for contempt of court is to ensure obedience to the court’s order. If a man honestly tries to obey the order but makes a mistake (always assuming the court believes him), then I can see no point in saying he is guilty and that his honest mistake goes merely to mitigation. Indeed it is an abuse of language to say that a man honestly trying to obey the order of the court is showing ‘contempt’.”

5.20  It held that:

“It may be that the breach in Adam Phones fell within the ‘unintentional’ exemption in the Stancomb principle.”

5.21  In the present case the 1^st and 2^nd respondents are not simply saying that they relied on Mr Wong’s advice that it was not a problem to file the 1^st respondent’s 1^st affirmation beyond the deadline of 14 December 2017 and therefore they did not have the intention to breach the 2017 Order.  On the contrary they knew of the deadline and their intention from the beginning was to comply with the 2017 Order and to furnish answers to the interrogatories. It was Mr Wong’s dereliction of duty and dilatory conduct that resulted in the respondents not complying with the 2017 Order.  They entrusted the task of preparing the answer to the interrogatories to Mr Wong who is a legally qualified person and was supposed to know that a court order is meant to be obeyed.  As Mr Jason Wong for the 1^st and 2^nd respondents had submitted, they had placed legitimate reliance on a person to meet the 2017 Order with expected professionalism.  The 1^st and 2^nd respondents did not just fold up their hands and did nothing after instructing Mr Wong.  On the contrary, they conscientiously inquired with Mr Wong and chased after him about the progress of the preparation and provided instructions to him.  Mr Wong had failed them by not being able to provide the answers to the 2017 Order within the stipulated time.  More than that, he had failed them, when faced with the contempt proceedings, by not explaining in the 1^st respondent’s 1^st affirmation why the 2017 Order was not complied with within the stipulated time.  Mr Wong had also failed them in the way he had prepared the 1^st and 2^nd respondents’ response to the interrogatories.  The answer was a legal document and Mr Wong was responsible to provide a proper affirmation containing the answers in a legible form responding to each of the three questions in the interrogatories.  But the 1^st respondent’s 1^st affirmation was only stated to be filed in opposition to the applicant’s financial relief application.  If it was also intended to be an answer to the interrogatories, it had not stated to be so.  It had also not clearly identified expressly the three questions and provided the answers specifically to the three answers.  The first question is concerned with the ‘net estate’ of the deceased within the meaning of section 2 of I(PFFAD)O.  This clearly involves a question of law and could only be answered by a lawyer and not the 1^st respondent who despite being highly educated and a civil engineer, is not someone conversant with the law.  The 1^st respondent’s unfiled 2^nd affirmation, despite being affirmed on 10 September 2018, was not filed for the hearing on 13 March 2019.  It was only served on the applicants one day before the hearing.  This is most unsatisfactory as this affirmation contained an express statement that it was intended to answer the interrogatories.  Again no explanation was offered by Mr Wong why this happened. After all, the filing and service of court documents were the task he undertook as a solicitor on behalf of the 1^st and 2^nd respondents. There appeared to be arithmetic errors in the affirmation as well.  As the 1^st and 2^nd respondents were ordered to provide the answers, the 1^st respondent’s affirmations should state that they were affirmed on behalf of the 2^nd respondent as well.  This was not done. Despite given the opportunity, Mr Wong chose not to explain why he would only advise the 1^st and 2^nd respondents to file on 29 August 2019 another affirmation of the 1^st respondent after the Judge had found them to be in contempt in June 2019.   

5.22  The context of the case is exceptional.  The truth of the 1^st respondent’s narration of Mr Wong’s conduct was not challenged by him.  On the contrary he admitted that he had delayed in ‘handling’ the 1^st respondent’s 1^st affirmation (affirmed on 2 May 2018) from October 2017 to April 2018.  In the light of the fresh evidence admitted in the appeal, we are of the view that one would not be able to hold beyond reasonable doubt that the 1^st and 2^nd respondents had the requisite intent to breach the 2017 Order and had committed a contempt of court.  In our view the present case comes within the recognized ‘unintentional’ exemption. 

5.23  The 1^st and 2^nd respondents also relied on the ground that the Judge had failed to consider or sufficiently consider the contents of the 1^st affirmation and erred in finding that the 1^st and 2^nd respondents had not answered or effectively answered the amended interrogatories resulting in his finding that the non‑compliance was wilful, deliberate and contumacious and they had not purged their contempt and committed the breach without remorse or regret.

5.24  We wish to say that whilst the Judge’s approach is understandable because of the way the 1^st and 2^nd respondents’ case was presented before him, in view of the serious penal consequence of a contempt proceeding, the Judge should be more circumspect in rejecting the contents of the two affirmations.  After all, the 1^st affirmation did refer to matters concerning the deceased’s estate which the three questions sought to discover.  The 2017 Order, in fact, contained separate provisions that the affirmation in response to the interrogatories and the affirmation in response to the applicant’s financial relief application were to be provided within 28 days.  The unfiled affirmation did indicate that it purported to answer the three questions.  By the time when the Judge considered the sentence, the 1^st and 2^nd respondents had filed the 2^nd affirmation.  The Judge ought to consider the substance of its contents instead of rejecting it merely because it was filed late.  The applicants submitted that there were omissions and errors in the 2^nd affirmation but the basis of the contempt application was that the 1^st and 2^nd respondents had not responded to 2017 Order at all and not that the contents of the answers provided by them were incomplete.

VI.  Conclusion

6.  Accordingly we allowed the appeal as indicated above.

VII.     Wasted costs order

7.1  We indicated at the conclusion of the appeal that we will consider applications by the parties for wasted costs order against Mr Wong which will include the following:

1)  to disallow the costs as between Mr Wong and the 1^st and 2^nd respondents in FCMP 63/2017 and FCMP 129/2018 occasioned by any delay or failure on his part to comply with the 2017 Order;

2)  to direct Mr Wong to indemnify the applicants against costs in FCMP 63/2017 and FCMP 129/2018 occasioned by any delay or failure on his part to comply with the 2017 Order.

7.2  When these applications are issued, we will give directions under Order 62, rule 8(5) for their disposal.

VIII.    Trial of the I(PFFAD)O

8.  We had directed and the parties agreed that the trial of the I(PFFAD)O application be handled by another judge.