WILLWIN DEVELOPMENT (ASIA) CO LTD v. WEI XING AND OTHERS

HCMP 2946/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2946 OF 2014

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D E C I S I O N

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Introduction

1. On 12 October 2015, I handed down a judgment in respect of the present proceedings whereby R1 and R2 were held to have been in breach of paragraph 1 of the Amended Injunction Order and paragraphs 4 and 5 of the Anton Piller Order (“Contempt Judgment”).  R1 and R2 were then found guilty of civil contempt.

2. After hearing further from Counsel on the issues of penalty and costs, on 16 November 2015, I handed down a further decision   (“Penalty Judgment”). 

3. In the present decision, I shall adopt the definitions in my two previous judgments, unless otherwise indicated.

4. Under the Penalty Judgment, in respect of R1, he was sentenced to imprisonment for 28 days, but the sentence was suspended on condition that he was to file an affirmation within 28 days to purge his contempt (the “Condition”).

5. R1 filed his 3^rd affirmation on 14 December 2015 purportedly in compliance with the Condition[1] (“WX3-2946”).  It was A’s case that notwithstanding what was said in WX3-2946, R1 had still failed to fulfill the Condition and / or to purge his contempt.

6. On 22 December 2015, A’s solicitors wrote to this court, seeking to activate the custody sentence imposed on R1.

7. A hearing for oral submissions was fixed on 8 March 2016 and at the end of submissions, this court reserved its decision.  The hearing did not concern R2 because it had, on 10 December 2015 and in accordance with the Penalty Judgment, paid the fine of HK$300,000 into Court.  The hearing also did not concern R3 as no finding of contempt was made against her in the Contempt Judgment.

The Legal Principles

8. It was not disputed that an order for committal can be suspended unconditionally or, as in the present case, conditionally.

9. The standard of proof whether a condition imposed for the suspension of a committal order has been breached is the civil standard of balance of probabilities and not the criminal standard of beyond reasonable doubt.  The burden lies on A to establish such breach[2].

10. A’s Counsel,  Mr Poon Siu Bunn,  submitted the following in respect of  what it means by purging a contempt:

(i)  A contemnor would generally be regarded as having “purged” his contempt when he had complied with the relevant order of the court, when he was thought to have been sufficiently punished or when he had expressed contrition[3].

(ii)  The usual way in which a contempt is purged is the tendering of an appropriate and comprehensive apology to the Court[4].

(iii)  Emphasis should also be placed on whether or not the contemnor has subsequently complied with the relevant order of the Court which has been breached.  It is plainly wrong to suggest that a contemnor has purged his contempt solely by serving the penalty / punishment imposed[5].

11. It is further clear from Re W(B) (An Infant) [1969] 2 Ch 50   that if it is subsequently found that a contemnor has not complied with a condition of suspension of his committal order, the court is not limited to declaring that the committal order has become immediately operative.  Lord Denning MR said: “The court has a discretion to do what is just in all the circumstances.  It can reduce the length of the sentence or can impose a fine instead.  It may indeed not punish at all.  It all depends on how serious is the breach, how long has the man behaved himself, and so forth[6].” Russell LJ further said: “… I agree that when a judge is faced with a case of a suspended committal order, suspended upon a condition that has been broken, that judge is not confined in jurisdiction to finding the condition broken and then necessarily declaring the committal order to be now operative. I think he has and indeed should have a discretion in the matter, looking not only to the past but to the current situation[7].”

12. R1’s Counsel, Mr Raymond Fong, also relied on what was said by DHCJ Saunders in Sino Wood Investment Limited and Wong Kam Yin (also known as Wong Kam Ling and Mandy Wong) HCA 307 of 2002, unreported, 20 January 2006:

“10 ... Having been found in contempt, it is fundamental to any question of penalty whether or not the contemnor has purged the contempt. Traditionally, a person found to be in contempt would not be heard by the court, other than in an application to purge the contempt: see Arlidge Eady & Smith on Contempt 3^rd Ed Paras12-66. The usual way in which this is done is the tendering of an appropriate and comprehensive apology to the court. By apologising for the contemptuous conduct the contempt is purged,

11. ... For a person to properly purge their contempt by an apology, the apology ought to be personally made, in order that its precise terms, flowing from the contemnor, may be seen and accepted as being genuine. Whether it is made by affidavit or by viva voce evidence will be a matter for the contemnor and his advisors.

12. … This is an apology which comes at the last possible opportunity and with little sign of genuine remorse. I am obliged to accept the apology, but in doing so I note its lateness and its brief and formulaic structure. Whether it is sincere remains to be determined. …

13.  … Mr Chain is right when he says that Ms Wong’s attempt to breach the prohibition order was not a contempt that related to the administration of justice, in the sense that it was not the disregard of an order that was designed to be to the immediate benefit of the plaintiff in the proceedings, such as an order in the nature of discovery or the like.  While that is right, in sentencing for contempt there is a signal importance in demonstrating to litigants that orders of the Court are to be obeyed.  An order of the court, when made, is to be obeyed, whether it is to the immediate benefit of another party in the proceedings or not. There can be no exceptions[8].”

The main issues

13. There are essentially 2  issues for this court to decide in the present case :-

(i)  Whether or not R1 has failed to purge his contempt by way of WX3-2946 and has therefore breached the Condition;

(ii)  In the event where the Court finds that R1 has breached the Condition, whether it is just for the suspended sentence of 28 days’ imprisonment to be activated.

14. The alleged breach of the Condition complained of by A is only in relation to paragraphs 4 and 5 of the Anton Piller Order.

Generally

15. As pointed out by Mr Poon, this court  made the following findings in the Contempt Judgment in respect of R1’s breaches of the Anton Piller Order : -

(i)  R2 is in de facto and was at all material times R1’s company and / or was and is otherwise under the control and management of R1.

(ii)  The company records of R2 (Listed Item 1) were in R1’s possession, custody or power, or control;

(iii)  The books, accounts, ledgers, bank statements etc of R2 (Listed Item 2) were in R1’s possession, custody or power, or control;

(iv)  R1 was the one who prepared price quotations to Apple Inc together with purchase orders, and these documents (Listed Item 3) should also be within R1’s possession, custody or power, or control.

(v)  R1 had the sole control and management of the domain name of “caevolution.com”.  He was also in control and management of the email system under that domain name.  Business correspondence emails (Listed Item 4) must therefore also have been in R1’s possession or custody, or R1 had the power and control to retrieve information being stored in the server;

(vi)  R1 should also have in his possession and custody, or power and control documents related to the domain name of “caevolution.com” (Listed Item 5).

(vii)  In summary, all of the 5 classes of the Listed Items under the Anton Piller Order must have been in the possession and custody of R1, or within R1’s power and control to obtain and disclose.  R1 had the ability to comply with the Anton Piller Order but failed to do so in respect of paragraphs 4(1) and (2) and paragraphs 5(1) and (2).

16. Under paragraph 4 of the Anton Piller Order, R1 must immediately to deliver / hand over the Listed Items which were in his possession or under his control save for any computer or hard disk integral to any computer.  If any of the Listed Items existed only in computer readable form, R1 must, among other things, immediately give A’s solicitors effective access to the computers, and a printout of the items must be given to A’s solicitors.

17. Under paragraph 5 of the Anton Piller Order, R1 must immediately inform A’s solicitors where all the Listed Items were and so far as was not apparent on the items, so far as he was aware, the name, address of everyone who supplied or offered to supply to him with the Listed Items, and the name of everyone to whom he had supplied, or offered to supply, the Listed Items, and full details of the dates and quantities of every such supply and offer.

18. Although it is not stated clearly, it would appear that paragraph 5 should only apply to those Listed Items not handed over by R1 under paragraph 4.

19. The Committal Proceedings were issued against Rs after A had obtained 2 batches of documents from Apple under the Discovery Order, and A essentially relied on the Apple Documents to prove its case in the Committal Proceedings against Rs.  The main thrust of A’s case against R1 was that R1 had breached the Amended Injunction Order by, among other things, performing contracts for Testing Business with Apple, and soliciting and entering into various contracts for Testing Business with Apple.  Further, R1 had failed to comply with paragraphs 4 and 5 of the Anton Piller Order.

20. During the Committal Proceedings, R1’s main defence in relation to the breach of the Anton Piller Order was that the Listed Items in Schedule 2 were not in his possession or control as R1’s case was that R3 was the sole director and shareholder of R2.  Eventually, my finding in the Contempt Judgment was that the Listed Items were in R1’s possession / custody / power / control to produce and this was based on my finding that R2 was / is de facto and was at all material times R1’s company and / or otherwise under the control or management of R1.

21. However, in the Contempt Judgment, I did not make any specific finding as to whether any of the documents in Listed Items actually existed or were available at the time of the Anton Piller Order. Later, in the Penalty Judgment, I have accepted that the audited accounts of R2 might not have been available, and further that most of the Annexure B documents would not have been available at the time of the Anton Piller Order[9].  Thus, the finding in the Contempt Judgment that the documents were in R1’s possession / custody / power / control must be on the basis that these documents were actually in existence and / or available at the time of the Anton Piller Order.  This was accepted by Mr Poon.

22. R2 was incorporated on 15 September 2011 and as seen on the business registration certificate, it commenced business on its date of incorporation.  However, the company did not change its name to Evolution Solution Limited / ESL until 13 October 2011[10], and as seen from the bank statements produced by R3, the HSBC Account was opened only on 21 October 2011[11].  Thus at the time of the Anton Piller Order, R2 appeared to have been in operation for only about 7 months, instead of 9 months as was previously referred to by R3 and / or in the Penalty Judgment.  It can further be seen from R1’s email of 9 November 2011 to Apple that he was only setting up R2 as a new “Vendor” on Apple’s list of vendors around that time, namely 9 November 2011[12], which was also the date of the earliest purchase request made by Apple to ESL seen in the Spreadsheet.  Further, the 1^st USD deposit into the HSBC Account was on 29 November 2011.

23. R1 had said in WX3-2946 that at the time of incorporation, R2 was only a shelf company and that R2 is still a shelf company in Hong Kong without any office premises or staff[13]. Whether R2 is a shelf company or not, it was not really disputed that R2 did not / does not have any office premises or staff in Hong Kong, and its registered address was its Company Secretary’s office at the Bright Way Tower Address.

24. The burden lies on A to establish R1’s breach of the Condition.  The Condition imposed by this court was that R1 had to file an affirmation within 28 days to purge his contempt.   Mr Fong, however, submitted that this court did not specify how and what R1 had to do to purge his contempt.  

25. As this court’s finding was that R1 was guilty of contempt in that he had failed to comply with the paragraph 1 of the Amended Injunction Order and paragraphs 4 and 5 of the Anton Piller Order, in my view, R1 cannot be said to have purged his contempt by merely tendering an apology and whether he has actually now complied with those orders must be taken into account.

Whether there is still non-compliance

26. So far as the Amended Injunction Order is concerned, the transactions as shown by the invoice dates, purchase requests / orders in the Spreadsheet sent by Apple commenced in November / December 2011 and the majority of the purchases took place in 2012, The number of purchases seemed to have dwindled to only 3 in March 2013, and apart from one purchase request made in September 2014, none since then.  Thus by the time A obtained leave to issue the Committal Proceedings, the number of purchases from R2 had already greatly reduced.  In any event, there was no sufficient evidence to show that R1 had continued to breach the Amended Injunction Order since September / October 2014. This was accepted by Mr Poon.  This was almost 18 months ago.

27. A’s case was, however, that since R1 still failed to provide all the documents in the Listed Items in the Anton Piller Order, he had not complied with paragraphs 4 and / or 5 of that order, and as such he had breached the Condition.

Listed Items 1 and 2

28. So far as the company documents in Listed Item 1 and the financial statements of R2 in Listed Item 2 are concerned, R3 had filed her affirmation HY3-2946 shortly after the Contempt Judgment to say that many of the documents in the Listed Items could not be located or found because the family had to move frequently in the past years because of their financial constraints, and that she had unwisely misplaced many of R2’s company records and bank statements and that it was only recently that she discovered such records and bank statements, and she then produced those records and bank statements discovered by her. 

29. In WX3-2946 R1 maintained that it was R3 who was responsible for controlling the operation of R2 and in possession of all the relevant documents.

30. First of all, what R1 said showed that he had completely missed the point.  As this court’s finding was that R2 was in fact his company and that R2 was under R1’s control and management, whether R3 was controlling the operation and in possession of the relevant documents or misplaced the documents was irrelevant.  This court’s finding meant that it should be within R1’s power / control to obtain those documents if they were in existence / available at the time of the Anton Piller Order.

31. Having said this, I accept that certain company records under Listed Item 1 had already produced by R3 in HY3-2946, namely (i) the memorandum of articles; (ii) articles of association; (iii) business registration certificate.  R3 did not produce any minutes or resolutions of shareholders’ meetings and / or board meetings of R2.  Nor did she make it clear as to whether there had been any shareholders’ meetings and / or board meetings held between R2’s incorporation and the date of the Anton Piller Order (“Relevant Period”).  Neither did R1 make this clear.

32. Further, although R3 had produced R2’s HSBC bank statements between 21 October 2011 and 23 April 2012 under Listed Item 4 in HY3-2946, again, she did not state clearly as to whether the other financial documents in Listed Item 4 were in existence during the Relevant Period, nor did she make it clear whether R2 had any other bank accounts during the Relevant Period.  All R3 had said was that as R2 was only 9 months (sic) old at the time, “many  of the documents as described in Schedule 2 of the AP Order were not created or not in existence[14]”, without specifying exactly what documents she was referring to.

33. I have already pointed out in the Penalty Judgment that HY3-2946 was vague.  However, R1 did not seem to offer any further explanation or clarification in WX3-2946.  All R1  said in WX3-2946 was that he did not have possession, power and / or control of the company records under Item 1 or the financial documents under Item 2 save and except those which were disclosed by R2 and / or R3 [15].  

34. The evidence before this court indicates there had been at least one special resolution by R2 for change of name to ESL[16], a copy of which had not been disclosed so far.

35. Having said this, and save for the  special resolution, I would accept that there might not have been any proper shareholder’s or board meetings, or any minutes / resolutions during the Relevant Period bearing in mind R3 was the sole shareholder and director.  In any event, I am prepared to accept that there might not have been any other minutes and / or resolutions in existence under Listed Item 1 at the time of the Anton Piller Order.

36. I am not satisfied that there may be non-compliance in respect of Listed Item 1.

37. Listed Item 2 consists of 5 categories of financial documents, namely (i) books, (ii) accounts, (iii) ledgers, (iv) audited accounts, (v) bank account records and statements (including but not limited to the HSBC Account).

38. I have accepted in the Penalty Judgment that the annual audited accounts in (iv) might not have been available or prepared at the time of the Anton Piller Order as at that time, R2 had not been in existence for one year.

39. R1 did not state or clarify in WX3-2946 as to whether, apart from the audited accounts, the other financial documents under Listed Item 2 were in existence during the Relevant Period at the time of the Ex Parte Orders.  All he said was that he did not have those financial documents in his possession / power / control. 

40. In my view R1 should have at least clarified in WX3-2946 or stated as to whether the other items of financial statements had been prepared or were in existence during the Relevant Period.  Further, R1 should clarify and / or state whether R2 held any other bank accounts at the time of the Ex Parte Orders, apart from the HSBC Account, as Listed Item 2 was specifically stated to be not limited to the HSBC Account.  If R2 had held other bank accounts, then it should have been within R2’s power / control, and hence also R1’s power / control, to obtain statements thereof for the Relevant Period from the bank/s since the bank/s keep records for at least 7 years.

41. Thus, as with HY3-2946, in my view, what R1 said in WX3-2946 in relation to this item was equally vague.

42. Having considered the above, I am of the view that R1 still has not complied in full with his obligations under paragraphs 4 and / or 5 of the Anton Piller Order in respect of Listed Item 2.

Listed Items 3 and 4

43. Listed Item 3 of Schedule 2 of the Anton Piller Order consists of 5 categories of documents, namely (i) price quotations, (ii) purchase orders, (iii) invoices, (iv) receipts and (v) agreements incident to R2’s business or that of its associated person, partners and/or companies.

44. Listed Item 4 consisted of 3 categories of documents, namely (i) business correspondence, (ii) records of business correspondence; and (iii) communications of R1 and R2, whether arising out of the use of the email accounts under the domain name of “caevolution.com” or otherwise.

45. The Spreadsheet produced by Apple listed “invoice dates”, “posting dates”, “payment dates”, “PR (purchase request) submitted dates”, and “PO (purchase orders) issued dates”, and A’s case was that  those 5 catergories under Listed Item 3 must have existed during the Relevant Period. Further there were numerous emails among the Apple Documents, and thus again the 3 categories of documents under Listed Item 4 must have existed.

46. In HY3-2946, R3 maintained that R2 never had or have possession / power / custody / control over the Apple Documents as those documents were transmitted electronically by Apple and that R2 never received any hard copies of those documents and also R2 never had ownership, power or control over the domain name of “caevolution.com” or its email server, if any.  

47. I have commented in the Penalty Judgment that although R3 had in HY3-2946 said that R2 did not have in its possession, power, and / or control the documents in Listed Items 3 & 4, she had referred only to the Apple Documents and she did not state whether those documents under Listed Items 3 & 4 had existed during the Relevant Period in respect of the other companies in the Clients List. 

48. Anyway what R1 said in  WX3-2946 was that:

(i)  The email system and server were in control of the SZESL;

(ii)  He had perused the Apple Documents and as far as he could remember, those documents contained all the business communications that he had with Apple;

(iii)  He had asked his friend Mr Chow orally in about late September 2015 about the Listed Items, and Mr Chow replied that the SZESL was only in possession of the emails in 2015;

(iv)  As far as he could remember, he was not aware of any documents under Listed Item 3 except those already disclosed by R2 and / or R3,  and that if there were any, these documents might be in the possession of SZESL (Shenzhen ESL)  and / or its clients;

(v)  So far as other business communications were concerned, he had confirmed with R2 that R2 did not have any business with the other companies in the Clients List at the relevant time, except those disclosed by R2 and R3 in the Main Action;

(vi)  He did not in any capacity have any business with other companies in the Clients List at the relevant time.

49. By reason of the above, R1 then said he did not and does not have possession / power / control of Listed Items, 3, 4 & 5.

50. I understand that it was R1’s case in the Main Action that SZESL was set up by his friend Mr Chow in late 2011 but this evidence was not put before this court or not admitted at the time of the trial. My finding in the Contempt Judgement was that Rs were closely connected with SZESL, but there was no actual finding by this court that SZESL was an associated company of R2[17]. 

51. I accept that the Apple Documents were mostly sent electronically, and that the evidence indicated that Listed Items 3 & 4, so far as they related to Apple, there may not now be hard copies.  Apple had made quite comprehensive disclosure and also prepared the Spreadsheet, even if actual copies of invoices and / or purchase requests / orders in the Spreadsheet had not been provided by Apple, the essential information on these documents had been disclosed.

52. Further, R3 had in HY3-2946 said that R2 could provide A’s solicitors access to the computers, to enable them to be searched, and to cause any Listed Items to be printed out or copied[18].  It was not quite clear whose computers she was referring to and where these computers were.

53. This offer had not to my knowledge been taken up by A.  Of course, by now it is almost 4 years down the road, whether the information under Listed Items 3 and 4 still exist in the computers is another matter.  In any event, A did not seem to be interested in pursuing this.

54. However, R1’s obligations in paragraphs 4 and 5 of the Anton Piller Order were not confined to only those documents relating to Apple.

55. In particular, in the Main Action R1 had filed WX2-797 in his application to discharge the Ex Parte Orders, and he had produced under exhibit WX-23 in that affirmation copies of “few purchase orders, emails or communications” which he said R2 was unable to take on, continue or complete, and he had said that those purchase orders, emails or communications were not “meant to be exhaustive”.  What R1 had said would indicate the existence of documents in Listed Items 3 & 4 in relation to either Apple or other companies in the Clients List.  However, WX-23 was not placed before this court, and in the end, Mr Poon decided not to pursue this issue.

56. Although R1 said in WX3-2946 that neither R2 nor he had had any business with other companies in the Clients List, apart from Apple, this court had said in the Penalty Judgment that in R2’s bank statements there were various USD deposits every month, and appeared to be not completely identifiable / traceable to transactions in the Spreadsheet[19].

57. The reason I made the above comment was that there was a total of about 18 USD deposits into the HSBC Account during the Relevant Period after the opening of the account.  Initially, for December 2011 and January 2012, there were only about 2 deposits each month, and then from February 2012 onwards, the deposits had increased to about 4 or 5 each month.  The 1^st payment from Apple seen in the Spreadsheet was on 22 February 2012. Further, it appeared from the Spreadsheet that all the invoice amounts to Apple were in round figures of USD, whereas those USD deposits in the HSBC Account were mostly of odd numbers, which could be due to bank charges / exchange rates.  In any event, there was no explanation or clarification by R3 in HY3-2946.  The deposits in the HSBC Account during the Relevant Period also did not really match the invoice amounts in the Spreadsheet.

58. In my view, those various USD deposits would indicate that there had been other transactions which might or might not be connected with Apple.  Yet, notwithstanding this court’s comment in the Penalty Judgment, again, there was no clarification / explanation from R1 in WX3-2946 in relation to those transactions, whether they were payments from or in connection with the other companies in the Clients List, or otherwise; and in particular, whether there were any price quotations, purchase orders, invoices, receipts and / or agreements, and / or business correspondence / communications in connection with those transactions / USD deposits.  The transaction records should have been kept by the bank, and R1 and / or R2 has the power to obtain them from the bank to assist them.  I thus find that in this respect, R1 was evasive in WX3-2946 and that he had not fully complied with his obligations under paragraphs 4 and / or 5 of the Anton Piller Order in respect of Listed Items 3 & 4.

Listed Item 5

59. For Listed Item 5, R1 maintained that the email system and server were in the control of SZESL, or Mr Chow and that he did not / does not have in his possession, power, and / or control (i) the domain name registration, (ii) service agreements and (iii) records between him and the relevant internet service provider in relation to the domain name of “caevolution.com”, save those already been disclosed, and it was / is not within his power and / or control to obtain them.

60. R1 had also said that the registration information of domain name “caevolution.com” could be searched by the public on the Internet.  As pointed out by Mr Poon, this was not a valid excuse for R1’s continued failure to produce those documents under Listed Item 5.  Furthermore, there had been no attempt to disclose nor any explanation for failing to disclose service agreement(s) and records between R1 and the relevant internet service provider.

61. R1 had further said in WX3-2946 that so far as he could remember, he did not return to the office of SZESL to access to the email accounts of “caevolution.com” after the Chinese New Year of 2012 and that he did not use the email accounts of “caevolution.com” at the time when the Ex Parte Orders were made.  Having said this, R1 then went on to say that he assisted R2 to prepare related documents for it to be included in the supplier / vendor list of Apple and he had used his email addresses at caevolution.com to communicate with Apple.

62. It can be seen from R1’s email to Apple in November 2011 that R1 was trying to register R2 as a vendor on Apple’s list, and he had provided his email address of “wilson@caevolution.com”[20]. 

63. What R1 seemed to be saying was that save for the email in November 2011, he had not used his email accounts at caevolution.com after Chinese New Year in 2012 prior to the date of the Ex Parte Orders.  I do not find this credible since his email addresses were given for urgent contact by Vivian in her email of 18 January 2012 to Apple [21].

64. This court’s finding in the Contempt Judgment was that R1 had the control and management of the domain name of “caevolution.com” and also in control and management of the email system under that domain name[22].  In fact the domain name of “caevolution.com” was registered on 6 October 2011, prior to SZESL was even set up.  R1 should have the power / control to obtain the documents if they were in existence during the Relevant Period.

65. Having said this, A had conducted a search and the domain name registration had already been produced by A in the Committal Proceedings. 

66. Mr Fong accepted that R1 did not deal with each document item by item under Listed Item 5.  Mr Fong said his instructions from R1 at the hearing was that there were no service agreements or any other records under Listed Item 5 for the Relevant Period, save for the domain name registration.

67. Although R1 in not making this clear in WX3-2946 had not fully complied with paragraph 5 of the Listed Items, as there was no sufficient evidence that at the time of the Ex-parte Orders, there were service agreements or any other records available, I am prepared to accept these were not available or in existence at the time.

Whether Breach of the Condition

68. Having considered all the evidence and in light of what I have said above, I have come to the conclusion that R1 still has not complied in full with paragraphs 4 and 5 of the Anton Piller Order, in respect of Listed Items 2, 3 and 4 and in my view, he is still in breach of the Condition.

Insincere Apology

69. It was further Mr Poon’s submission that the apology rendered by R1 in WX3-2946 was insincere, incomprehensive and / or made on R1’s own proffered and devised basis of non-compliance with the Amended Injunction Order and the Anton Piller Order, rather than in response to the actual findings made by the court in the Contempt Judgment.

70. In A’s solicitors’ letter to this court dated 22 December 2015[23], they have set out the unsatisfactory nature and aspects of the contents of WX3-2946.  These can be  summarized as follows:

(i)  Under paragraphs 13-15 of WX3-2946, R1 had continued to assert that the email system of “caevolution.com” was and is for his friend “Mr. Chow’s use” and controlled by SZESL but not him.  This was contrary to the court’s finding that “all Rs had the use of the email system…since registration”.

(ii)  R1 further claimed in WX3-2946 that he had not accessed the email accounts of “caevolution.com” after Chinese New Year of 2012 and had not used the same at the time (or in effect, also after) the  Ex Parte Orders were made.  This was effectively a denial of his contempt and inconsistent with the court’s finding that R1’s breach of the Amended Injunction Order had continued up to September 2014.

(iii)  Under paragraphs 19 and 20 of WX3-2946, R1 only admitted, on his own proffered basis, that there was an arrangement between R2 and SZESL that R2 would, for a “transaction fee”, receive purchase orders and payments from Apple on behalf of SZESL.  In effect, this was a denial of the court’s finding that R2 had, at the material time and as vendor, been engaging in Testing Business with Apple.

(iv)  R1 continued to deny having breached the Amended Injunction Order in any capacity save as to his own proffered basis.  His apology and / or “remorse” was only directed towards having failed to stop R2 to perform such arrangement on behalf of SZESL but not towards the findings of the court.  He in essence was maintaining that R2 did not have actual business with Apple.

(v)  Further, in WX3-2946, R1 had asserted that (i) he failed to take proper steps to apply to the court for setting aside / discharging the Amended Injunction Order and the Anton Piller Order promptly when in fact he together with R2 did apply and did vigorously seek to discharge the Ex Parte Orders in the Main Action; and (ii) that, contrary to this court’s findings, it was R3 who was responsible for controlling R2 and in possession of all the relevant documents.

71. As pointed out above, the alleged arrangement with SZESL / Mr Chow was contrary to my findings in the Contempt Judgment.  Mr Fong had submitted that what R1 had said in WX3-2946  in relation to  this arrangement was his oral evidence during the trial of the Main Action, and R1 could not in WX3-2946 have said he accepted this court’s finding as this would be contrary to what he had said during the Main Trial.

72. If this was the case, then R1 should have simply said nothing about the alleged arrangement with SZESL / Mr Chow in WX3-2946 and remained silent and simply apologized unreservedly instead.

73. I have earlier already found that what R1 said about not accessing the email accounts of “caevolution.com” after Chinese New Year 2012 to be incredible.  The alleged arrangement of R2’s receipts of payments from Apple on behalf of SZESL in consideration of a “transaction fee” by SZESL to R2 was in direct conflict with this court’s finding that R2, as vendor, was engaging in Testing Business with Apple.

74. Having considered what R1 had said in WX3-2946, I find that R1’s apology was not really sincere nor genuine in that it is clear that he was not accepting this court’s findings in the Contempt Judgment and as earlier pointed out, he was evasive in WX3-2946.

Exercise of Discretion

75. So far as the Amended Injunction Order, as I have said earlier, Mr Poon accepted that there was no sufficient evidence that R1 had continued to breach the Amended Injunction Order after September / October 2014.  Thus, notwithstanding that I do not find R1’s apology sincere, I accept that he has purged his contempt of the Amended Injunction Order.

76. As for the Anton Piller Order, as stated above, I find that R1 has not complied with his obligations in full under paragraphs 4 and / or 5 in relation to Listed Items 2, 3 and 4 and is thus still in breach of the Condition.

77. As seen from those passages cited earlier from Re W(B) (An Infant), this court has a discretion in whether to activate the committal order even if a contemnor has not complied with a condition of suspension of the order, and the court can look not only to the past but to the current situation.

78. Mr Fong had submitted that R1 be given one last chance to file a further affirmation.  Mr Poon on the other hand submitted that as this court had clearly identified in the Penalty Judgment the inadequacies in R3’s affirmation filed on behalf of R2, namely HY3-2946, R1 should not have any misapprehension as to what was meant by compliance and that he does not deserve a second chance.  In particular, A’s solicitors had in the letter dated 22 December 2015 to the court pointed out the unsatisfactory aspects of WX3-2946 and R1 was aware of A’s complaints. 

79. I accept Mr Poon’s submissions.  R1 has been legally represented during the trial and was present when the Penalty Judgment was read out.  In the Penalty Judgment, I had already said I was giving R1 a further chance to purge his contempt.  R1 had his chance.  I see no reason for giving him another chance.

80. In light of all the above, I will activate the sentence, and order that R1 be imprisoned for 28 days.

Costs

81. I further order costs against R1 of this application on indemnity basis.

[1] E:211-221

[2] Hong Kong Civil Procedure 2016, Vol 1, p1019 §52/7/1; Phillips v Symes [2003] EWCA Civ 1769 at pp16-17 §51(iii), per Lord Justice Waller; Alfa Laval Tumba AB v Separator Spares International Ltd [2010] EWHC 674 (Ch) at pp.7-9 §30-32, per Peter Smith J

[3] Arlidge, Eady & Smith on Contempt (2011) 4^th Ed  p 1143 §14-6

[4] Sino Wood Investment Limited v Wong Kam Yin, unreported, HCA 307/2002, 20 January 2006, at p4 §10 per DHCJ Saunders

[5] THY v CHFR, unreported, HCMP 1755/2015, Date of Judgment: 23 September 2015, at p5 §11 per Lam VP

[6] At F-G, pg 56

[7] At C, D, pt 57

[8] At pgs 4 & 5

[9] At para 32, E:186

[10] E:155

[11] E:160

[12] At para 248, Contempt Judgment, E:85

[13] See para 12, E:214

[14] Para 15, E:130

[15] At paras 34,35, E:219

[16] E:155

[17] Para 30, E:186

[18] See para 8, E:128

[19] At para 66, E:196

[20] See para 215, Contempt Judgment, E:74

[21] See para 221, Contempt Judgment, E:76

[22] See para 265, Contempt Judgment, E:91

[23] E:222-225