XCHRX CENTURY EQUIPMENT CO. LTD. v. EXCELLENT ELECTRICAL CO. LTD.

HCA 2542/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2542 OF 1998

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REASONS FOR DECISION

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1. This is an ex-parte application by the Plaintiff for leave to issue contempt proceeding against the Directors of the Defendant company.

2. On 14th April 1999, during a checklist hearing and on the application by the Plaintiff, the court ordered the Defendant to produce certain documents and the Directors of the Defendant to answer interlocutories raised by the Plaintiff.

3. In fact, in the original application, the Plaintiff applied for an unless order to the effect about should the Defendant and/or its Directors fail to comply with the orders, the defence was to be struck out and judgment be entered in favour of the Plaintiff as claimed. But on that occasion, the court refused to make the unless order as claimed. The orders for discovery and answering interlocutories were not complied with.

4. Indeed, the Defendant chose not to assist the court in the hearing of the summons directions. The defence, hence, of the Defendant was struck out and judgment was then entered in favour of the Plaintiff as claimed. The Defendant and its Directors did not complied with the earlier orders for discovery and answering interlocutories, and hence, the present application for leave to issue an order for committal against the Directors of the Defendant company.

5. Under Ord. 52 of the Rules of the High Court, the court has a discretion to grant leave for an order for committal for disobedience to an order of the court and if the order is against a body corporate, the Director or other officers, of course, may be committed for contempt.

6. The wording of Ord. 52 is clearly such that the court has a discretion in deciding whether an order for committal should be granted. As with any discretion of the court, it must be exercised judiciary. The orders for discovery and for answering interlocutories were made in the course of the interlocutory procedures. The ultimate purpose of such orders from the Plaintiff's point of view was to facilitate the litigation proceeding and eventually obtain judgment against the Defendant as claimed. There could be no other purpose for such orders to serve.

7. As I indicated earlier, the Defendant had abandoned its defence and the Plaintiff had obtained judgment as claimed. The procedural orders made earlier no longer have any purpose to serve at all. Not every non-compliance with the order of the court will lead to contempt proceeding. In the present case, as the orders in question no longer serve any purpose in so far as the litigation is concerned, there is, in my view, no point in enforcing the order by committal at this stage.

8. Of course, if at the future time, for one reason or another judgment was to be set aside and the litigation needs to be proceeded with, and the Plaintiff considers it necessary to revive the orders made by this court earlier on in order to compel the Defendant to disclose the documents and or to answer the interlocutories in order to facilitate the litigation in question, then, the Plaintiff, of course, is entitled to take such step as may be necessary again to achieve the purpose.

9. But in far as the case has reached the stage whereby default judgment had already been granted against the Defendant in favour of the Plaintiff, it is not, in my view, a proper exercise of my discretion to grant leave for an order of committal against the Directors of the Defendant company. In the circumstances, the application has to be refused and I make no order as to costs on this application.