EUROPET HEIMTIERBEDARF GMBH and Others v. YEH CHUN HUI also known as CHARLES YEH

1994, MP No.1208

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

(MISCELLANEOUS PROCEEDINGS)

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J U D G M E N T

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1. This is an application by Yeh Chun Hui also known as Charles Yeh ("the Respondent") to discharge an order of committal made against him on 9 December 1994.

Background

2. On 17 June 1992, the Plaintiffs issued a writ against Chiu Chong Industrial Co. Ltd ("Chiu Chong") and the Respondent seeking, inter alia, an injunction to restrain infringement of the copyright of the First and Second Plaintiffs in their dog toys designs and damages. An Anton Piller order was executed that day. On 15 February 1994, the Plaintiffs obtained a Mareva injunction freezing the assets of Chiu Chong and the Respondent including, inter alia, premises at Pak Tin Par Street, Tsuen Wan ("the Property") owned by the Respondent. The Order, which was made by Rhind, J. ("the February Order"), also required the Respondent to file an affidavit or affirmation disclosing the full value of his assets within the jurisdiction within 5 days of the service of the Order upon him and to give particulars regarding the terms of the contract of sale of the Property and the whereabouts of the proceeds of sale of the Property and the manner in which such proceeds have been used or expended.

3. The Respondent was not personally served with the Order of 15 February 1994 until 9 March 1994 although he was told about the Mareva injunction when he returned to Hong Kong on 3 March. According to the Respondent, he entered into a sale and purchase agreement for the Property on 1 February, completion of which took place on 28 February in Singapore. The proceeds of sale of $1,350,000 were remitted to Taiwan from Singapore and were apparently applied to repay certain loans on 3 March.

4. On 25 May 1994, the Plaintiffs issued a notice of motion for an order that the Respondent be committed to prison for his contempt of court in:

(1) disposing of the Property on 28 February 1994 or alternatively disposing of the net proceeds of sale thereof on 28 February 1994 in breach of the February Order;

(2) failing to serve an affirmation disclosing his assets within 5 days of service of the February Order;

(3) failing to disclose in the affirmation filed on 18 March 1994 information required by the February Order.

The Plaintiffs say that the notice of motion was personally served on the Respondent in Shenzhen on 3 November 1994. The Respondent disputes this. The motion was heard in the absence of the Respondent on 9 December 1994, when the order of committal was made.

5. The Respondent was arrested by the bailiff in Hong Kong on 10 March 1995 and imprisoned in Lai Chi Kok Prison. The Respondent's motion for discharge of the order of committal came before Barnett, J. on 24 March. The hearing was adjourned to a date to be fixed and the Respondent was released on condition that he surrender all his travel documents and pay $100,000 into court as security for the Plaintiffs' costs. The Respondent was also required to send to the Plaintiffs, inter alia, copies of the bank statements, telephone bills and fax bills of Chiu Chong, the Respondent and Vinyl Concepts Company ("Vinyl") in the possession, custody or control of the Respondent from 1 January 1993 to 24 March 1995.

The Issues

6. The Respondent contends that the committal order must be discharged because :

(A) there is no evidence that he was served with the notice of motion that resulted in the committal order in that

(1) the affirmations relating to service are defective and therefore inadmissible; and

(2) he denies that the notice of motion was ever served on him on 3 November 1994; and

(B) he was not in contempt of the February Order because

(1) the sale and purchase agreement preceded the February Order; and

(2) he did not know of the February Order at the time he disposed of the Property or of its proceeds on 28 February.

I now turn to consider the validity of these two grounds advanced on behalf of the Respondent.

A. Service of the Notice of Motion

7. There are, before me, two affirmations of Chung Siu Lam ("Chung") dated 5 December 1994 and 13 April 1995 respectively. The affirmations were made in Shenzhen, before, what on the face of it appears to be, an officer of the Notarial Office of the City of Shenzhen, Guangdong Province, People's Republic of China. Each of the affirmations is in English but there is a cover page in Chinese describing the document as a "notarised document" and bearing the name of the Office from which it purports to emanate. The signature of the notary public is not at the foot of the affirmation. It is on a separate page and bears an index number. It stated that on 5 December 1994 Chung put his signature to the affirmation before the officer at the Notarial Office. There followed the officer's signature and the date, affixed with the seal of the Notarial Office of the City of Shenzhen. The cover sheet, the affirmation and the separate page described above form a composite document entitled "Notarized Document".

8. Counsel for the Respondent argued that the Chung affirmations do not comply with sections 10 or 12 of the Oaths and Declarations Ordinance Cap.11. However, on the question of admissibility of the affirmations, as Counsel for the Plaintiffs pointed out, the provisions of Order 41, rule 12(2) and (3) are relevant.

9. Order 41, rule 12 provides that:

"(2) Any affidavit sworn in any foreign parts out of Her Majesty's dominions.... before a notary public...may be used in the Court in all cases where affidavits are admissible.

(3) The fact that an affidavit purports to have been sworn in the manner prescribed by paragraph (1) or (2) of these rules shall be prima facie evidence of the seal or signature, as the case may be, of any such...officer or person therein mentioned, appended or subscribed to such affidavit, and of the authority of such...officer or person to administer oaths."

10. Although, initially, Counsel for the Respondent sought to rely on Order 41, rule 12(1), that paragraph is plainly inapplicable since it pertains to affidavits sworn "in any part of the Commonwealth". I accept the submissions of Counsel for the Plaintiffs that Chung's affirmations are admissible in evidence by virtue of O.41 r.12(2) and (3), and I so hold.

11. In his first affirmation, Chung said that on 3 November 1994 he went to Chiu Chong's factory at Shen Pen Chung, Loong Kwong Cheng, Po On Hsien, Shenzhen and at about noon he saw a Chinese gentleman outside the factory. Having ascertained from the security guard at the factory that that person was Yeh Chun Hui, he approached Yeh and after Yeh had confirmed that he was Yeh Chun Hui, Chung handed him, inter alia, the court papers relating to the notice of motion for a committal order. In his later affirmation, Chung exhibited a copy of a photograph of the Respondent taken from the Respondent's Declaration of Identity for Visa Purposes and stated his belief that he was the person on whom the court documents described in his earlier affirmation were served.

12. The Respondent denies that he was ever served with the court documents relating to the motion for committal as alleged by Chung. He gave evidence to the effect that on 3 November 1994, he was at a meeting with 3 partners at the premises of Tai Tat Umbrella Factory in Nam Luen Village, Loong Kwong Town from 9:30 a.m. until 7:00 p.m. except when they broke up for lunch at a small restaurant nearby. When the meeting ended, the Respondent and his partners had a hot pot dinner until about 9:00 p.m.

13. Kong Ming Tung ("Mr Kong"), one of the Respondent's partners, gave evidence. He confirmed that he was at a meeting with the Respondent and two other partners on 3 November 1994 from 9:30 to 7:00 p.m. and that they were together all day even during the lunch break which occurred at about noon. Mr Kong explained that he and his partners, including the Respondent, run a karaoke bar at the Ho Wah Hotel in Loong Kwong Town. Each of the four original partners invested HK$250,000 as capital. They were about to admit a new partner and that was the reason for the meeting. The premises, which are rented, had to be renovated at a cost of RMB2.5 million. Preparation work commenced in May 1994 and the bar opened for business on 9 September 1994.

14. There are minutes of the meeting consisting of 2 pages prepared by Mr Kong. Five items of discussion were recorded relating to the income and expenditure position from 1 May to 31 October, problems of ledger items brought forward, bad debt and management. There is a section headed "Conclusion" followed by paragraphs numbered 1,2,3,4,5,7 and 8. For some reason there was no paragraph numbered 6. Paragraph 7 reads "Sign to indicate consent to the conclusion". Four signatures appear adjacent to this paragraph. There followed paragraph 8 which reads: "Meeting closed; Meeting closed at 7:00 p.m. Kong proposed to have hot pot dinner at Loong Cheung Restaurant."

15. As Mr Kong admitted, the minutes were a condensed summary of the discussions and only the bare essentials were recorded. He agreed, and so did the Respondent, that the entry in paragraph 8 is wholly irrelevant to the business of the partnership. He accepted that there was no particular reason for recording that and said that he just recorded what took place that day.

16. Both Mr Kong and the Respondent denied that paragraph 8 was added later to bolster the Respondent's account that the meeting lasted all day until 7:00 p.m. They maintain that when the minutes were circulated for signature, paragraph 8 formed part of those minutes.

17. I do not believe that Mr Kong and the Respondent were telling the truth for a number of reasons. I do not believe that the meeting lasted from 9:30 a.m. to 7:00 p.m. First, the number of topics for discussion was limited: Mr Kong admitted that he did not have the ledgers with him; that he gave a general report without reference to books and accounts. So it was not a question of the partners having to scrutinize accounting records and entries which could have been time consuming. Second, when one looks at the minutes in the original (i.e. in Chinese) rather than the English translation, paragraph 8 sits very unnaturally in the document. In fact, it is totally out of place in terms of content and has every appearance of having been added as an afterthought. Third and most importantly, Mr Kong's demeanour and obvious discomfiture when he was cross-examined on this point did not escape my attention. Fourth, if the reason for paragraph (8) was to record what happened that day, why was there no reference to the partners having lunch together?

18. I therefore reject the evidence that the meeting lasted until 7:00 p.m. and that the Respondent was nowhere near the factory at about noon. According to Mr Kong and the Respondent, the factory was about a 10 minute car-ride away from the place where they had their meeting. The Respondent could easily have returned to the factory during the lunch break. I therefore accept Chung's account that he served the Respondent with the notice of motion and related court papers outside the factory at about noon on 3 November 1994.

B. Whether the Respondent was in contempt of the February Order

19. The committal order was made based on the Respondent's breaches of the February Order in three respects. So far as the second and third aspects of those breaches, namely failing to file an affirmation of assets within five days of service and failure to disclose the whereabouts of the proceeds of sale are concerned, it would not be appropriate to attach significance to them now in view of the fact that the Respondent has already been incarcerated in Lai Chi Kok prison for 15 days which would, on any view, have purged those breaches. Therefore, for present purposes, I am only concerned with whether the Respondent breached the February Order regarding the disposal of the Property or its proceeds of sale and other assets covered by the Mareva injunction.

(1) Synopsis of key events

20. It is common ground that on the day the February Order was made (15 February 1994), the Respondent left for China. He remained in China until 24 February when he flew to Singapore from Shenzhen. The Respondent admitted to being in Shenzhen on 23 and 24 February. Completion of the sale of the Property took place on 28 February while the Respondent was in Singapore. The purchaser Hung Jui-fu was a friend of the Respondent's from Taiwan. The purchase price in US dollars was received by the Respondent's lawyers in Singapore who, on 28 February, pursuant to the Respondent's instructions, remitted them to Taipei. According to the Respondent, the monies were collected from the Taiwan Co-operative Bank by his wife, his sister-in-law Chan Hui Fang ("Madam Chan") on 3 March and disbursed to Madam Chan and two other creditors that day. The Respondent left Singapore on 2 March for Shenzhen returning to Hong Kong in the evening of 3 March when he was told about the injunction. The February Order was personally served on him on 9 March.

21. In a nutshell, the Respondent's case is that the first he knew of the injunction was upon his return to Hong Kong at about 6 p.m. on 3 March by which time he had already disposed of the Property and its proceeds of sale.

22. The critical question I have to determine is whether the Respondent had notice of the February Order or, at any rate, that part which enjoined the disposal of the Property or its proceeds when he completed the sale of the Property. It is therefore necessary to consider in detail the circumstances of that transaction.

(2) Surrounding circumstances

23. Before embarking on that exercise, it is pertinent to have an understanding of the Respondent's business operations in Hong Kong, both before and immediately after the completion of the sale of the Property. He was the only person in charge of the day-to-day running of Chiu Chong of which he is both shareholder and director. Until 28 February 1994, Chiu Chong occupied the whole of, and conducted its business from, the Property which the Respondent owned. In fact, it is fair to say that the Respondent was the mainstay of Chiu Chong. He was responsible for taking orders from customers although his wife and Madam Chan also assisted in getting orders in Taiwan. Apart from the Respondent, there were only two other persons working there. One was Yip Bik Yung ("Madam B.Y. Yip"), a co-director and shareholder whom the Respondent described as "an odd job worker" and Cheung Sai Lin who was responsible for documentation.

24. The Respondent and Yip Bik Fong (who was not related to Madam B.Y. Yip) owned a factory in Shenzhen ("the factory") which manufactured children's toys, plastic decorations for Christmas and pet toys and with which Chiu Chong used to place its orders. On the first day of the hearing, the Respondent gave evidence to the effect that his brother oversees production in the factory and continues to do so. On the second day he changed his evidence and said that his brother was "responsible for management but not production work." The relevance of this change will become apparent in the next section which deals with notice of the February Order. In any event, it is not disputed that the Respondent's brother was at the factory at all material times. The Respondent said that he sold his half share in the factory to his co-owner Yip Bik Fong in April 1994 in order to repay his creditors. He received approximately $175,000 in cash for his half share and this he gave to his wife in Taiwan.

25. Chiu Chong closed down its business at the end of February 1994, coinciding with completion of the sale of the Property. However, as is apparent from Chiu Chong's telephone bills it appeared to be very active judging from the sheer number of international calls and faxes it had made at the time. Although the Respondent maintained that it only formally closed on 9 March 1994, it is a fact that Chiu Chong's telephone and fax numbers were discontinued and new telephone and fax numbers at the Property under Vinyl's name were installed, effective as of 1 March. Vinyl is apparently owned by Yip Bik Fong. Madam B.Y. Yip became Vinyl's employee. The only other employee is a Ms Kwok.

26. It appears from the Summary of Evidence on Telephone Bills (Exh.P1) submitted by the Plaintiffs that calls made to Chiu Chong's clients prior to 1 March continued to be made thereafter. The Respondent's explanation was that with Vinyl's consent, Vinyl's telephone and fax were being used by him to contact customers of Chiu Chong, and that orders obtained would be passed by him onto Vinyl for a commission. However his name card describes him as President of Vinyl. He continues to take orders from customers as before and continues to deal with the factory and is said to be frequently there. The facts suggest that business continued as before but under the name of Vinyl.

27. The Respondent is also a shareholder in Polytoy, a Taiwan company at which Madam Chan is employed. Chiu Chong purchased raw materials from Polytoy and also received orders which Polytoy obtained on its behalf.

(3) Notice of the February Order

28. I will now summarize the evidence concerning efforts to serve the Respondent, Chiu Chong and its other directors. Also pertinent is the fact of communications emanating out of Chiu Chong's office between the date of the February Order and 28 February.

16.2.94(Wednesday)

( Plaintiffs' solicitors served the February Order and supporting affirmations ("Documents"), with skeleton argument, on the Respondent's solicitors by fax and by hand. ( About 3.55 pm Leung Shiu Cheong ("Leung"), clerk to the Plaintiffs' solicitors, attended the Property to serve Chiu Chong and the Respondent with the February Order. The door was locked. He rang the door bell for 5 minutes. No one answered. He left a letter addressed to the Respondent outside the door enclosing copy of Order and proposed an appointment with the Respondent to effect service at 11 am on 17th. ( He served Chiu Chong by pushing the Documents, together with a covering letter addressed to Chiu Chong, through the iron grille. ( Plaintiffs' solicitors sent the Documents by registered airmail addressed to the Respondent at 22-24 Lane 224, Chung Ying Street, Siu Lin Town, Taipei. This was not his residential address but that of Polytoy. ( Yan Kwong Keung Michael ("Yan"), clerk to the Plaintiffs' solicitors, attended premises at Lei Cheng Uk Estate to serve the Documents on two other directors of Chiu Chong, Madam B.Y.Yip and Li Tsz. The door was locked. No one answered the door bell. He left 2 letters addressed to the two directors respectively making an appointment to serve them at 8 pm on 17.2.94.

17.2.94(Thursday)

( At about 11 am, Leung attended the Property. The door was still locked and the Documents were still lying there. No one answered the bell. Leung left another letter outside the door to make another appointment to serve the Respondent at 4:30 pm on 21st. ( 8 pm. Leung attended Li Cheng Uk Estate premises. The door locked, but the letters left on previous day were no longer there. He saw through a window that there was an adult person in the premises. So he continued to ring door bell for another 10 minutes but there was no answer. He left another letter outside door to make another appointment at 8:15 am on 21st.

20.2.94(Sunday).

( One fax was sent from Chiu Chong to the home of the Respondent's younger brother in Shenzhen. ( One fax was sent from Chiu Chong to the factory.

21.2.94(Monday)

( 8:15 am. Yan attended Li Cheng Uk Estate premises. B.Y.Yip and Li Tsz were not located. Letters left there on Madam 17th were not there. So Yan left the Documents outside the door in two sealed envelopes addressed to Madam B.Y. Yip and Li Tsz. ( 4:30 pm. Yan attended the Property. It was open for business. He was met at the door by an adult female who said that the Respondent was not in. She refused to take the Documents. Yan left the Documents in a sealed envelope addressed to the Respondent.

22.2.94

( At about 4:30 pm, Leung attended the Property to serve on Chiu Chong's responsible officer. He found that the Documents left by the door were no longer there. Chiu Chong was open for business and was operating normally. He rang the door bell and a female answered the door. She refused to identify herself, and claimed to be part-time employee of Chiu Chong. Leung asked for responsible officer as there were some documents to hand to him. A woman appeared identifying herself as Ms Ng, a clerk employed by Chiu Chong. She refused to accept the Documents. So Leung posted the Documents with a covering letter through iron gate. The covering letter requested "Officer-in-Charge" of Chiu Chong to "immediately inform Yeh Chun Hui, Yip Bik Yung and Li Tsz ... the content of this letter and the terms of the [February] Order". ( Plaintiffs' solicitors faxed the Documents addressed to the Respondent at fax no.8862 681 9249 which is Polytoy's number. ( 19 faxes were sent from Chiu Chong, 10 of which went to the factory.

23.2.94

( The Respondent was in Shenzhen. 18 faxes were sent from Chiu Chong, 4 of which went to the factory.

24.2.94

( The Respondent was in Shenzhen. 11 faxes were sent from Chiu Chong, 7 of which went to the factory.

25.3.94

( 1 fax was sent from Chiu Chong to Singapore.

29. The Respondent admitted that he did communicate with the factory when he was in Shenzhen, that his staff at Chiu Chong would deal with incoming mail at least when they were in Chinese in his absence, that they could communicate with the factory and fax messages to him. Although the February Order is in English, the Court seal contains a reference to the Supreme Court of Hong Kong in Chinese. The Respondent agreed that it was an important looking document.

30. When it was put to the Respondent that one or more of his staff drew his attention to the February Order between 15 February and 24 February, he disagreed on the basis that because it was Chinese New Year no one was in the office during that time. That may have been true for the period up to February 19. The telephone bills show that several faxes were sent on Sunday 20 February with a great deal of activity commencing 21 February.

31. Given the extraordinary lengths to which the Plaintiffs went to bring the February Order to the notice of the Respondent, Chiu Chong and its other directors, I do not believe that Chiu Chong and its staff in Hong Kong did not know about the injunction well before completion. The Respondent's solicitors were also attempting to contact Chiu Chong and the Respondent to inform them of the February Order. Given the Respondent's pivotal role in Chiu Chong's operations, I reject the Respondent's evidence in so far as he sought to resile from his admission that messages could reach him via the factory when he was travelling in China. In this connection, he had changed his evidence regarding his brother's role at the factory for the all too obvious purpose of distancing his brother from being the recipient of faxes from Hong Kong. I also do not accept that whenever the Respondent was travelling, unless he chose to communicate with Chiu Chong, his staff would not have known where to reach him.

(4) The Assignment

32. The Assignment dated 25 February 1994 was made between the Respondent as vendor and Hui Jui-fu as purchaser. The purchase price was $1,350,000. According to the purchaser's solicitor, Messrs. T.C. Lau & Co., the purchaser executed the Assignment in Hong Kong on 23 February and the purchase money was paid by way of telegraphic transfer on the same day from the purchaser's bank in Taipei to the Respondent's solicitors in Singapore. The Assignment was then sent by courier to the Respondent's solicitors, Messrs. David Chong & Co. in Singapore. It was executed by the Respondent on 25 February and returned to the purchaser's solicitors on 28 February by courier.

33. That the circumstances of this Assignment were highly unusual is an understatement. Essentially we are dealing with the conveyance of a piece of Hong Kong real estate. But the vendor (i.e. the Respondent) did not have Hong Kong solicitors acting for him. Rather, he retained a firm of Singapore lawyers whose function, as far as one can make out, was none other than to act as a post-box to receive the purchase monies, to interpret the Assignment to the Respondent and to witness his signature. Here there was no question of first approving the Assignment in draft. Indeed, one wonders how requisitions on title could have been handled had they been raised. In fact, one critical aspect of what the Respondent said was his arrangement with the purchaser is not reflected in the documentation and that is the leaseback to him for 2 years of a desk space at $5,000 a month.

34. The Respondent stated that it was he who requested that completion take place in Singapore. He apparently made that request of the purchaser who is a friend of his during the third day of the Lunar New Year (i.e. 12 February) when they were both back in Taiwan. He said that he made that request because the Agreement for Sale and Purchase ("the Agreement") provided for completion within the month of February and as he knew he was going to be in Singapore at the end of February, he requested that completion take place in Singapore.

35. The explanation given is suspect because it does not follow from the fact that the Respondent was to be in Singapore, that completion had to take place there. In fact, one would have expected Hong Kong solicitors to have been instructed in a Hong Kong conveyancing transaction. The Assignment would have been sent to the Respondent in Singapore for execution but his Hong Kong solicitors would have attended to completion here. Its validity therefore falls to be determined in the light of my conclusions concerning the Agreement.

(5) The Agreement

36. The Respondent's evidence is that he had been having discussions with his friend Hui regarding the sale of the Property to Hui since sometime in January. On 1 February 1994, when they were both in Shenzhen, Hui finally agreed to buy the Property. There is a typewritten agreement in Chinese ("the Chinese Agreement") in which the Respondent is named as Party A and Hui as Party B for the sale of the Property for HK$1,350,000 or equivalent US dollars. It provided that each party "shall provide his own lawyer to proceed with the completion of the sale and purchase. The purchase price shall be paid at one lump sum on the date of transfer of title and shall be received by Party A's lawyer on his behalf". It is to be noted that no deposit was paid or required.

37. There is no evidence as to who prepared the Chinese Agreement. In any event, it is the Respondent's evidence that it was part of his arrangement with Hui that the Respondent could retain a desk at the Property for two years for $5,000 a month. It is also the Respondent's evidence that it was his belief that an English version of the Agreement was necessary and that he left it to Hui to arrange for a translation. He also handed over to Hui title deeds and documents relating to the Property which he said he had with him because "most of his important documents are kept in Shenzhen".

38. Turning to the English version of the Agreement ("the English Agreement"), it is anything but a translation of the Chinese Agreement. It differs from the Chinese Agreement in material respects :

(a) it referred to "all those 11 equal underded (sic) 9,100th parts of shares ed (sic) in the remaining portion of Tsuen Wan Town Lot No.300" after giving the address of the Property;

(b) it provided for

(i) vacant possession to be delivered on completion; and

(ii) stamp duty to be borne by the purchaser.

39. Further, although it is dated 1st February, it is clear from the original (Exh.D3) that "1st" was typed in at a later date because the alignment is different.

40. I do not believe that the Agreement whether in Chinese or English came into existence as described by the Respondent. First, apart from material differences between the two versions for which the Respondent has not been able to give a credible explanation, both the Chinese and English versions omitted a vital part of the arrangement which is the leaseback to the Respondent for 2 years at $5,000 a month. Second, as far as the purchaser's solicitors were concerned, it is plain from their letter of 28 March 1994 that "there was no Agreement for Sale and Purchase at all." If the Agreement, whether in Chinese or English had existed, why was it concealed from the Purchaser's solicitors? If the point of having an English version was because the Respondent believed it to be a Hong Kong requirement, having gone to the trouble of "translating" it into English, why was it not provided to the solicitors and why did the Respondent not instruct Hong Kong solicitors? Third, the Respondent's explanation that he was able to hand his title deeds to Hui on 1 February in Shenzhen because he kept his title deeds relating to land in Hong Kong in Shenzhen is hardly credible. He had no address in Shenzhen, so where would they be kept? Moreover, documents of importance such as copies of the promissory notes and cashier orders relating to the loans from Madam Chan and the other Taiwanese creditors, copies of the draft for US$173,911.95 being the proceeds of sale exhibited to his affirmation of 18 March 1994 ("the March Affirmation") were located "amongst the papers of [Chiu Chong]" at the Property where the Respondent had retained a desk and not in Shenzhen. Again receipts relating to the repayment of loans on 3 March (also exhibited to the March Affirmation) which were obviously important documents were not kept in Shenzhen. Rather, they were obtained from Madam Chan, one of the creditors! Fourth, the Chinese Agreement was never exhibited although it obviously came within the ambit of the February Order. The Respondent's explanation that it was not produced because the English version had been exhibited rings hollow where he had admitted in cross-examination that for him and Hui it was the Chinese Agreement that was important. Fifth, there was no reason for the proceeds to have been remitted to Singapore. The Respondent admitted that he knew all along that he wanted the money back in Taiwan. Here, the purchaser was the Respondent's friend from Taiwan. He had to apply for the outward transmission of funds. US dollars were purchased and five days later a smaller amount was remitted from Singapore to Taiwan. This series of events does not make sense except to give completion in Singapore some semblance of substance.

(6) Disbursement of the proceeds of sale

41. On 28 February, the Respondent's solicitors in Singapore drew a banker's draft on Standard Chartered Bank Singapore for US$173,911.95 in the Respondent's favour payable at the Standard Chartered Bank Taipei Branch ("SCB Taipei"). There is a Customer's Confirmation issued by SCB Taipei dated 1 March of an Advice of Inward Remittance in which the Respondent is named as beneficiary. The payment instructions shown in the Confirmation were apparently to credit "your account 088529-608". That appears to be a reference to the beneficiary's account. Unfortunately, there is no explanation or information about this account.

42. At paras.16 and 17 of the March Affirmation, the Respondent stated that the proceeds were remitted to his personal account with his bank in Taiwan. In cross-examination the Respondent resiled from paras.16 and 17 of the March Affirmation. He explained that the reference to his personal account was a mistake, that his instructions to his Singapore lawyers were to remit them to a bank nearest his home. According to the Respondent, the money was transmitted by SCB Taipei to the Taiwan Co-operative Bank ("TCB"). His wife and the 3 creditors (namely Madam Chan, Yeh Tieh Cheng and Choy Chung Hing) went to TCB and collected the money. The Respondent gave evidence to the effect that in Taiwan collection did not have to be by the payee personally, that all that was required was the production of a certificate of personal seal, the seal itself and the payee's identity card.

43. The Respondent has produced a "Foreign Exchange Memo" issued by TCB on 3 March 1994. His name seal and identity number appear on the Memo. It shows that a sum of US$173,866.17 was converted into new Taiwanese dollars.

44. To substantiate this explanation, the Respondent has produced in respect of each of the 3 creditors, a promissory note, a cashier order and a receipt. The promissory notes and receipts are handwritten. The cashier orders are from a common form printed book readily available from stationery shops. The loans were as follows :

45. The documentation raises more questions than it answers. First, SCB Taipei's Confirmation most unusually did not give any contact address or telephone number for the beneficiary and it appeared to have credited the beneficiary's account, no.088529-608. Second, there is no evidence to show how the net proceeds were transferred to TCB where the Respondent maintains he did not have an account. Third, even assuming the monies were transferred to TCB, the Foreign Exchange Memo goes no further than to evidence an exchange of US dollars into new Taiwanese dollars. Fourth, the receipts from the creditors are suspect : if indeed such receipts were issued upon repayment, one would normally expect the receipts to be in the borrower's possession. It appears from para.17 of the March Affirmation that a year after the alleged repayment of the loans the receipts were, incredibly, in the possession of the Respondent's sister-in-law, who was one of the creditors. I find this quite extraordinary particularly as the Respondent had maintained during his cross-examination on the third day of the hearing that he keeps most of his important documents in Shenzhen.

46. In addition, where one is repaying considerable sums of money (NT$2 million, 1.49 million and 1.167 million), it is again wholly extraordinary that repayments should have been made in cash rather than through inter-bank tranfers or cheques. Then there is the fact that the Respondent has resiled from statements made in his March Affirmation. I do not accept the Respondent's explanation that the mistake was due to a "language problem". There were other discrepancies. Under cross-examination, he admitted that on the day of completion he spoke to his wife and not Madam Chan : cf. para.17 of the March Affirmation. He had also given contradictory answers as to whether the seal was in the possession of his wife or Madam Chan. When all these factors are coupled with repayment of debts not yet due, I have to say that one's credibility is stretched to breaking point.

(7) Other matters

47. There are other matters which re-inforce the view that the Respondent is not a truthful witness. For example, in his March Affirmation, (para.13), he stated that Chiu Chong's business in manufacturing dog toys came to a complete halt after the action was commenced in June 1992. In cross-examination he admitted that Chiu Chong had dealings with customers such as Kvik (Denmark), Armitages and Seddon's (U.K.) and Vo-Toys (USA) who deal with dog toys. The telephone records show that Chiu Chong was in contact with them during February 1994. He also gave as the reason for selling the Property in February and his half share in the factory in April, the need to repay his creditors. Yet in May he was embarking on a new business venture, i.e. establishing a new karaoke bar in Shenzhen with various partners. Whether or not there was a pre-existing business, the evidence is clear that the bar which was established in May required considerable expense for renovations.

48. There is the fact that even after he became aware of the February Order, he made no attempt to call his wife to ascertain if the monies had been disbursed. There is a suggestion that his own solicitors were lax in not bringing home to him the true effect of the February Order resulting in the March Affirmation which is patently deficient. But that will not do. The Respondent could waive privilege to make good that insinuation. He did not. I do not believe he was at all sincere when he said that he did what he could to comply with the February Order once he was apprised of it.

(8) Standard of proof

49. The applicable standard is one of beyond reasonable doubt. See Dean v. Dean [1987] F.L.R. 517. Notice alone is sufficient where a negative order is involved, which is the present case. Personal service is not required : see Avory v. Andrews (1882)51 L.J. Ch.414 and the Supreme Court Practice at 45/7/8. As it is a criminal standard, the Respondent is entitled to the benefit of the doubt if I have any reservations at all as to whether he had notice of the February Order when the sale of the Property was completed.

(9) Conclusion

50. What is the explanation for the completion in Singapore of the sale of land situate in Hong Kong? As mentioned above, such an occurrence would be most unusual. As I have found that both the Chinese Agreement and the English Agreement are not genuine documents and were created after the fact, the Respondent's explanation as to when and why he asked for completion in Singapore must also be rejected since it was premised on the existence of the Agreement. Then there is the alleged disbursement of the proceeds to creditors in Taiwan in circumstances that are incredible.

51. Having regard to the totality of the evidence reviewed above, and Hui's apparent willingness to accomodate his friend to get him out of his predicament, the inference is irresistible that the Respondent was aware of the February Order at the time of completion. There can be no other explanation as to why completion should have taken place in Singapore.

52. Accordingly, the Respondent's application to discharge the committal order is dismissed.

Other breaches of the February Order

53. In the course of cross-examination, it was put to the Respondent that subsequent to personal service on him, he had breached the order by taking large sums of cash on a number of occasions into China. The Respondent did not deny taking the money out but said that it was money belonging to friends and that he was simply acting as courier.

54. I have had the benefit of studying the entries in the Respondent's travel documents in which these sums are recorded. It appears that he has been taking cash into China from time to time over the past few years and not just after the date of the February Order. That being the case, I am not satisfied beyond reasonable doubt that the money belonged to him and not, as he maintains, to his friends.

The Order

55. I now turn to consider the order that I should make. Counsel for the Plaintiffs urged that I follow the order made by Kaplan, J. on 9 December 1994. The effect of such an order could result in the Respondent remaining in prison indefinitely although as Counsel for the Plaintiffs submits, he may apply for a discharge if he is indeed impecunious and keeping him in prison would serve no purpose : Re Barrell [1973]1 W.L.R. 19.

56. Bearing in mind that the proceedings between the parties is a civil matter, an order in those terms appear to me to be draconian. In all the circumstances, and having regard to the 15 days he has already spent in prison, I consider it appropriate to commit the Respondent to prison for a period of 6 months with liberty to apply. He may purge his contempt by bringing back the sum of $1,350,000 and applying for this order to be discharged. That is a matter entirely for him.

57. I therefore dismiss this application with costs.