HWANG JOON SANG AND ANOTHER v. GOLDEN ELECTRONICS INC. AND OTHERS

HCA 1529/2019

[2021] HKCFI 1973

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1529 OF 2019

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D E C I S I O N

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A.   Introduction

1.  The 1^st plaintiff (“Jason”) is the sole director and shareholder of the 2^nd plaintiff (“Future Cell”).  Jason and Future Cell (together, “Plaintiffs”) bring their claim against the 6^th defendant (“Vivien”) and various other defendants, essentially arising out of alleged breaches of fiduciary or other duties owed by Vivien and/or a conspiracy to injure by unlawful means and/or unjust enrichment, because significant funds have been transferred on Vivien’s instructions away from companies which the Plaintiffs allege are their nominees or bare trustees of the funds/assets held by those companies.

2.  The claim has given rise to various interlocutory applications leading to numerous orders for interim injunctive relief, in the form of proprietary injunctions, freezing injunctions and disclosure orders. With the benefit of the orders granted, the Plaintiffs have sought to perform a tracing exercise, which has identified, they say, that Vivien caused the nominee companies to transfer their funds through multi-tier recipients so as to put them out of reach of the Plaintiffs.

3.  The present applications are concerned only the 1^st to 7^th defendants (“D1”, “D2”, “D3”, “D4”, “D5”, “D6” or Vivien and “D7” respectively, and together, for present purposes, “Defendants”).  Vivien is the sole shareholder and director of each of D1 to D5 and D7 and she asserts that they are not nominee or trustee companies belonging to the Plaintiffs, but that they are beneficially owned by herself.

4.  It is chronologically important to identify that the original worldwide Mareva injunction was granted against D1 to D6 as long ago as by order of Anthony Chan J dated 23 August 2019 (“August 2019 Order”), and that the worldwide Mareva and proprietary injunction was granted against D7 as long ago as by my order dated 27 February 2020 (“February 2020 Order”).

5.  It is also important that it is not in dispute that service of the August 2019 Order and the February 2020 Order was effected on the respective defendants, as follows:

(1)  D1: on 27 August 2019;

(2)  D2: on 28 August 2019;

(3)  D3: on 27 August 2019 (Hong Kong) and 21 October 2019 (Anguilla);

(4)  D4: on 27 August 2019 (Hong Kong) and 21 October 2019 (Anguilla);

(5)  D5: on 27 August 2019;

(6)  Vivien: on 9 September 2019 (personal service) and 4 November 2019 (email); and

(7)  D7: on 7 May 2020.

6.  As a result, the deadlines for complying with the various ancillary disclosure orders expired (as regards D1 to D6) on various dates between 30 August 2019 and 13 November 2019, and (as regards D7) on 18 May 2020.

7.  There are now three summonses before the Court:

(1)  the Defendants’ summons dated 26 April 2021 (“Discharge Summons”), which seeks the discharge of the August 2019 Order as continued by various orders, as well as the injunction orders against all other defendants including D7;

(2)  the Defendants’ summons dated 25 May 2021 (“Stay Summons”), which seeks (a) leave to amend the Discharge Summons by deleting paragraph 3 which sought an order for an assessment of damages and (b) a stay of paragraph 2 of the August 2019 Order requiring D1 to D7 to disclose details of all assets;

(3)  the Plaintiffs’ summons dated 23 June 2021 (“Hadkinson Summons”) opposing the Stay Summons and seeking a direction that the Defendants should fully comply with the various disclosure orders before the Court would entertain the Discharge Summons.

8.  The Application to amend is not controversial, and a formal order granting leave to the Defendants to withdraw paragraph 3 of the Discharge Summons can be made now.

9.  As to the Hadkinson Summons, I have previously directed that I would hear argument on it first, at the beginning of the hearing of the three summonses.  That is what happened at the hearing.

10.  However, the parties were of course prepared to argue the Discharge Summons and the Stay Summons, and had filed written argument on those two summonses.  That has given rise to the practical conundrum as to the appropriate way of dealing with the summonses.

11.  On one view, it would make practical sense just to deal with the argument on all three summonses and then to determine them, perhaps logically answering the Hadkinson question first.  But to do so would also potentially have the effect of denuding any Hadkinson order of its real value. As will be seen from my consideration of the principles, one of the purposes of granting a Hadkinson order is because of a concern that there is no other way of securing compliance with the original orders of which the person is in contempt.  Therefore, if after consideration I were to decide in favour of the Plaintiffs on the Hadkinson Summons, yet have already heard the argument on the Discharge Summons (and Stay Summons), a person in determined breach of court orders might simply remain in breach if the challenge to the original orders were to fail.

12.  For that reason, and in the light of the discussion which follows, it seems to me to be the right procedural approach in this case to decide the Hadkinson Summons first, and to announce my decision. What flows from that decision can be discussed with Counsel thereafter.

13.  At the hearing, the Plaintiffs have been represented by Mr Douglas Lam SC, leading Mr Moses Park and Mr Billy Mok of Counsel; the Defendants have been represented by Mr Nelson Miu and Ms Jolie Kung.

14.  This is my Decision.

B.   Necessary Background

B.1  Factual Background

15.  For present purposes, I do not propose to rehearse at any length what are said to be the matters of factual background, as put forward by either side.  The following short summary suffices.

16.  As indicated above, the Plaintiffs assert proprietary claims over the funds in bank accounts held by the Defendants (as well as other defendants not involved in the current summonses).  The particular relief claimed includes declarations as to the various defendants holding the funds on constructive trust, and as to liability to account and orders for payment of sums due on taking of the account.

17.  The Plaintiffs’ proprietary claims are alleged to arise in the following way.  The Plaintiffs say that Jason and Vivien are former lovers, and that Vivien was engaged by Jason as an assistant in the plaintiffs’ business in electronics trading from its commencement around 2008. Jason is a Korean national who does not speak Chinese, and Vivien’s role included liaison with Chinese language counterparties and managing the financial and administrative aspects of the business.

18.  D1-D5 and D7 were set up at the suggestion of Vivien, to whom Jason entrusted such matters.  Vivien does not have beneficial ownership in D1-D5 or D7, nor to any funds which are or were held by those companies.

19.  The Plaintiffs assert that in mid-2019, Vivien absconded whilst retaining control over the companies.  In support of that allegation, when applying for the various injunctions, Jason produced in evidence some WeChat messages which he said evidence his attempts to contact and locate and negotiate with Vivien, but to which she simply refused to respond.

20.  It is further alleged that from at least June 2016, there were unauthorised transfers between D1-D5 and D7-D27.  The plaintiffs have no knowledge of D7-D27, and no business with them.  The transfers were unauthorised, and D7-D27 must have known that those transfers were unauthorised as being outside any normal or proper business purpose, that they were not entitled to the transferred funds, and that it is unconscionable for them to retain the funds.

21.  For her part, Vivien denies that she was employed by Jason or Future Cell, or that she had a romantic relationship with Jason.  Rather, all of the relevant companies belong to her beneficially, and were operated by her in her own business.  At most, Jason was a middleman by which he or Future Cell would earn a commission.  Essentially, commission was earned because Jason introduced customers to her companies, and she was the one involved in trading, and was responsible for the quality of goods which she bought and on-sold to customers.  Part of the commissions would be remitted to Future Cell, while part of the commissions would be paid to him in cash, when he came to Hong Kong.  Therefore, Jason’s allegation that she was an employee is simply a lie.

22.  Further, Vivien says that Jason has been untruthful when he has suggested that she misrepresented to him that because of Hong Kong’s currency controls, transfers of large sums of money to South Korea would be illegal, and so instead of wiring funds to Future Cell, she should pay him in cash only around US$30,000-US$40,000 every two weeks.  She says Jason knew full well that there were never any currency control laws in Hong Kong. The occasion when she refused to transfer US$200,000 was because Jason was suggesting that Future Cell should enter into a fictitious marketing contract with one of her companies and use that contract as an excuse or justification to remit the funds.  But, Vivien says, she refused to go along with his fraudulent scheme.

23.  As to her alleged “abscondment”, Vivien has produced the correct and full version of the relevant WeChat messages, which she says demonstrate that Jason had performed a ‘cut-and-paste job’ when producing his own false exhibit, which she says was aimed at misleading or deceiving the court.  Indeed, Mr Lam does not shy away from the fact that when Jason produced what he described as “a true copy of the WeChat messages [he] sent to Vivien Chung demonstrating [his] attempts to contact Vivien Chung from 25 June 2019 to 11 July 2019”, that was not correct as (a) what was produced was some combination of WeChat and MMS messages, and (b) what was produced was not the totality of the messages, as some had been edited out by being not included in the exhibit.

24.  Vivien particularly relies on two of the messages as follows:

(1)   At 5:40am on 26 June 2019:

Vivien, i still trust you 100%.  Because we have a long partnership.  So, i always think of your life and weiwei’s future.  I don’t want you to destroy your son’s life and his bright future.  I am sure that you will keep your promise to your Buddha.  Otherwise your Buddha will not forgive you.  This is what i think for you and weiwei.  Let’s make a deal like this way.  Let’s share my profit portion 50:50 with you because we are a partner except for sharp boss 50% portion.  If you break our basis rule w sharp boss, i cannot guarantee you and weiwei’s life.  If you break the rule with sharp boss, you and your son may face japanese yakuza or chinese gangster soon.  That means you and your son’s life is in jeopardy.  And Your son’s life and future is totally destroyed.  I don’t want to see this kind of worst case.  Please accept my proposal as above.  I don’t want you and your son to be hurted.  If you accept my proposal, we still enjoy our life, biz and partnership as before.  No need to destroy you and weiwei’s life and his future.  Please make a right decision for your son.  let’s see our meeting schedule at your earliest convenience.  Please inform me of your next schedule.  Wait for your reply.  I still trust you 100%.  I don’t want to blame you this time because we are best partner.  Let’s make a deal!!  It’s cool and fair trade.  Also good for you and your son.  I can sign on this deal.  Also, sharp boss.  Please make a right decision for you and your son.  Thx for your kind understanding.

(2)   At 10:14am on 28 June 2019:

Don’t be regret after deadline.  I will do my best to destroy you and weiwei after deadline.  I bet all of your money 18mil.usd to all of gangsters to punish you.  Because you destroy me and my family completely.  I will be divorced soon and i am broken now.  All of gangsters are haunting you to steal the money from you and kill u and your son.  After you’re dead, I commit suicide at same day.  What’s the meaning of money after you and your son is dead.  We may see each other in the hell soon.  I hope it will not be happen.  Please make right decision and don’t regret to your life.  I already give up my life.  See u in the hell.

25.  Between those two messages were other messages which contained comments which might reasonably be understood to refer to those threats.  For example (although there are perhaps other references):

(1)  at 05:50 on 26 June 2019:

“… I wish you understand their style. They are very brutal to the betrayer. …”

(2)  at 00:10 on 27 June 2019:

“… You cannot hide away. Because Everybody is trying to find you and your son. Please do not destroy your son’s life and his future …”

(3)  At 05:56 on 27 June 2019:

“… Also, don’t forget japanese and chinese style. Do not destroy you and your son’s life …”

(4)  At 18:52 on 27 June 2019:

“If you want to take it all, you may lose everything in the future. We are not stupid. We’re chasing you and your son, fiancei to the end of the world. U cannot run away or hide away. … Don’t forget. Many of chinese japanese, taiwanese team is chasing all of your families. Please don’t be mistake. You may regret in the future if you don’t accept my last proposal. 50:50 equally share. Then, enjoy our life.”

(5)  At 08:21 on 28 June 2019:

“Let’s meet and settle down this issue with 50:50 sharing. We want to be happy and healthy life. Even though you’re rich, but if you and your son live in a fearful life every day, what’s the meaning of your life. I don’t think you want to destroy me and your son life.”

26.  However, not least in the context of Vivien’s allegations of material non-disclosure (see below), it is noteworthy that she has not disclosed a message sent by Jason the very next day, 29 June 2019, which reads as follows (sic):

I highly apologize what i said back things to u and your son before.  I was so upset that i said bad things.  I sincerely apologize that and i will never ever phisically threaten you and your son in the future.  I promise you.  So, please make an easy on your son.  I already send message to him to apologize my bad words.  I really want him to be success and happy life with his wife.  Also, support him as much as i can as i promised to u.  I only compromise this issue legally and follow jury order in the court.  I already finish legal filing to sue you to the court next week.  We may see in china/hk/twn court soon.  But still we have a chance to compromise this issue before we go to the court.  See u in the court.  If you don’t want to go to the court, please inform me in advance.  We can sign the contract with lawer.

27.  Vivien now says in her affirmation that she was genuinely fearful of the threats, and fled to Taiwan.  Nevertheless, there is evidence that she was in Causeway Bay in Hong Kong on 5 July 2019. There is no evidence as to when she arrived in Hong Kong for that trip, namely whether it was before or after the threats and the apology.  But, clearly she did not immediately flee.  There is evidence that Vivien was seen in Taipei on 9 July 2019.  Vivien has not provided details of the dates when she arrived in or left Hong Kong, or arrived in Taipei.

B.2    Procedural Background

28.  I have already identified the dates of making and service of the August 2019 Order and the February 2020 Order.

29.  Therefore, there can be little serious dispute that D1-D6 have been (and continue to be) in breach of the disclosure orders in the August 2019 Order for around 22 months, and D7 has been (and continues to be) in breach of the disclosure order in the February 2020 Order for around 14 months.

30.  No application for any extension of time for compliance has been made by any of the Defendants.  Indeed, it was only after prompting from the Plaintiffs’ solicitors by letter dated 20 May 2021 that the Defendants issued the Stay Summons on 25 May 2021.

31.  In the meantime, it was only on 26 April 2021 that the Defendants issued the Discharge Summons.  The only explanation for the delay is tucked at the end of Vivien’s affirmation in support of the Discharge Summons, at §63, which reads in its entirety:

Lastly, I would like to briefly explain why it is taken me so long to make this application to discharge the injunction orders.  I had been very worried by the threat on my life and that of my son, and had withdrawn to Taiwan where I thought I would be safe.  However, Jason had continued his hunt by drawing in more and more defendants, people who had traded with me in the past, in normal business dealings.  In October 2020 he even commenced criminal proceedings in Taiwan against me (Jason’s allegation here that I had stolen money that belong to him, if true/proven, would have criminal as well as civil consequences in Taiwan).  That is when I realised that I have no option but to fight back.  In addition to defending the criminal proceedings brought against me, I have also commenced legal proceedings against Jason in Taipei complaining of his threat on my life and that of my son.

32.  Even then, and leaving aside what can be said about that explanation (as to which see below), there is still no explanation of the delay between October 2020 and April 2021, a period of around six months.

C.   Shape of Arguments

33.  In light of those facts, the broad shape of the arguments arising on the various summonses is as follows:

(1)  Hadkinson Summons:

(a)   the Plaintiffs say that, because the Defendants have knowingly disobeyed and continued to disobey (at the very least) the disclosure orders contained in the August 2019 Order and the Court should refuse to hear the Discharge Summons until such orders have been duly complied with;

(b)   the Defendants say that the Discharge Summons falls squarely within an exception to the rule in Hadkinson v Hadkinson [1952] P 285 at 288, because it is an application to set aside the earlier orders upon which the Defendants’ alleged contempt is founded.

(2)  Stay Summons:

(a)   the Defendants say that there should be a stay of the disclosure requirements pending the determination of the Discharge Summons;

(b)   the Plaintiff say that there is no basis for the grant of any such stay, not least in the face of the deliberate refusal to provide disclosure in breach of court orders;

(3)  Discharge Summons:

(a)   the Defendants say that the August 2019 Order and the February 2020 Order should be discharged because of material non-disclosure, in two misrepresentations or lies about (i) Vivien’s alleged misrepresentation about currency law, and (ii) the reason for Vivien’s “abscondment”;

(b)   the Defendants also say that no good arguable case sufficient to ground the grant of a Mareva injunction exists;

(c)   the Plaintiffs say that there was no material non-disclosure, that they at least have a good arguable case on their claims, and there is no question of “unclean hands”.

34.  I think it is fair to say that some of these arguments to an extent overlap.  But, notwithstanding that I bear that point in mind, it is convenient to deal with them more or less separately.  As indicated, in any event, logically it falls to address the Hadkinson point first.

D.   Hadkinson Summons

D.1  Applicable Principles

35.  The applicable principles are well-known.  For example, I recently canvassed those principles in China Chanshui Cement Group Ltd v Zhang Caikui & Ors [2020] HKCFI 2560 at §§67-70.

36.  The starting point is the clear obligation of every person against whom an order is made by a court of competent jurisdiction to obey it, unless and until that order is discharged: see Hadkinson v Hadkinson [1952] P 285 at 288.  The other principle set in the case is that a person in contempt of court would not ordinarily be heard by the court whose order he had disobeyed.

37.  However, there are exceptions to the rule.  For example, one exception is that a person can apply to purge his contempt, another is that a person can appeal with a view to setting aside the order upon which his alleged contempt is founded.

38.  In any event, it is settled that the court retains a discretion whether to hear the person in contempt.  In other words, the fact that a party to a cause has disobeyed an order of the court is not of itself an absolute bar to his being heard.  To refuse to hear a party, even a contemnor, is a strong thing only to be justified by grave considerations of public policy.

39.  Previous cases do not provide any hard and fast rules for the exercise of discretion, though the cases give examples which may serve as guidelines.  For the sort of questions that the court might ask, see CWG v MH [2014] 4 HKLRD 141 at §12.  There, the Court of Appeal suggested that the questions to be asked, on the civil standard of proof, might include: (1) is the party against whom the order is sought in contempt? (2) is there an impediment to the course of justice?  (3) is there any other effective means of securing compliance with the court’s orders?  (4) should the court exercise its discretion to impose conditions having regard to that question?  (5) is the contempt will full, that is, is it contumacious and continuing?  (6) If so, what conditions would be proportionate?

40.  As I summarised those questions in the case, the court will take into account when exercising the relevant discretion matters such as the gravity of the effect of the contempt, whether it is wilful, and whether there are other means available for securing compliance with the order.  If the contemnor’s disobedience is such that, so long as it continues, it impedes the course of justice in that case, making it more difficult for the court to ascertain the truth or to enforce the orders which it may make, then the court may in its discretion refuse to hear that person until the impediment is removed or a good reason shown why it should not be removed.  The court considers the proportionality principle in deciding whether or not to bar the contemnor, and what conditions to impose.

41.  Mr Miu relies on what he says is the established exception to the general rule where the purpose of the application is to appeal against, or have set aside, on whatever ground or grounds, the very order disobedience of which has put the person concerned in contempt: see Motorola Credit Corp. v Uzan (No 2) [2004] 1 WLR 113 at §§47-51.  There, it was also held that the proposition that the court will hear a person in contempt when the purpose of his application is to appeal against the order disobedience to which has put him in contempt, has the merit not only of good sense but satisfies considerations of fairness, and that it would be neither logical nor appropriate to shut out argument directed to reversal of the original order.

42.  Nevertheless, as Mr Miu recognises from The Messiniaki Tolmi [1981] 2 Lloyd’s Rep 595 at 602 there are qualifications to that statement including that there may be cases where an appeal by a party in contempt against the very order disobedience of which has put him in contempt, can be shown to be for one reason or another an abuse of the process of the court.  In such a case the exception to the general rule as discussed would not apply.

43.  On the same point, Mr Lam relies on what was recently stated by Mimmie Chan J in La Dolce Vita Fine Dining Group Holdings Ltd v Zhang Lan [2020] HKCFI 622 at §14, where she stated that the court will not refuse to grant a Hadkinson order simply because there is a legitimate argument that the order that was breached is wrong or should be varied.  Further, at §19, she identified that it is not a denial of justice – against the maxim audi alteram partem – if a party has been given an opportunity to be heard upon terms with which he can reasonably comply, so there is not and there should not be any impediment in principle to the imposition by the court of proper conditions which require to be complied with before an appeal from (or, I would add, an application to discharge) the original order is heard.

44.  Essentially, the question boils down to whether, in the circumstances of the individual case, the interests of justice are best served by hearing a party in contempt or by refusing to do so.

D.2   Application to this Case

45.  Mr Miu’s submission is that it cannot be said that the Discharge Summons is an abuse of process, so to hear the Defendants in their application to discharge not only has the merits of good sense but is necessary is to satisfy conditions of fairness.  Mr Miu also points to the threat to engage Japanese yakuza and Chinese gangsters to “steal the money” from Vivien, where any information disclosed could be passed on to them and then what they could do with that information would be beyond the control of the court.  In short, he says that the interests of justice would be best served by hearing the Defendants’ application, rather than refusing to do so.

46.  Mr Lam has addressed his submissions to the questions posed in the CWG case.  First, he submits that there can be no serious dispute that the Defendants have been in breach for very substantial periods of time, and continue to be in breach, of their disclosure obligations.

47.  Secondly, he submits that there is no justifiable excuse.  This is because the only ground raised by the Defendants is that the damage done through disclosure may be irreparable, relying on the WeChat messages where Jason wrote that Vivien and her son “may face Japanese yakuza or Chinese gangster” and “all of gangsters are hunting [them] to steal the money from [them] and kill [them]”.  However, first and foremost, Mr Lam says Jason fully accepts that he should never have said those words and that it was wrong to do so, and has unreservedly apologised for any distress caused, and he points to his apology on the very next day (see above).  Further, when viewed in context, Mr Lam says that the threatening words were uttered when Jason discovered his trusted assistant and confidante (with whom he says he had a romantic relationship) suddenly disappeared with US$18 million belonging to him in his businesses.  But the content of the messages as a whole make clear that Jason was saddened and dismayed by Vivien’s conduct, and implored her to return and restore the funds taken, and that if she did so all would be forgiven.  Not only did he have no real intention to cause any harm, he has never made any attempt to carry out the threatening words (nor is it suggested that he has done so).  This is so, notwithstanding that the Plaintiffs have all along been aware of the addresses of Vivien and other defendants.  Further, there is no basis for thinking the disclosure ordered would somehow be passed on to “gangsters” to enable them to go after Vivien and her son to “steal” the money from them.

48.  Thirdly, the non-compliance and delayed compliance with the ancillary disclosure orders risks defeating the very nature of the Mareva injunction orders, which were made to prevent unjustified dissipation of assets by a defendant to frustrate potential judgment.  That is a clear impediment to the course of justice.  Striking a balance between depriving the Plaintiffs of the “teeth” of the injunctions, and any potential prejudice to the Defendants in making disclosure, Mr Lam says the balance points firmly in favour of requiring disclosure.  At present, the Plaintiffs and the Court remain completely in the dark as to the Defendants’ assets and whether the freezing orders have even been complied with by the Defendants since they were made.

49.  Fourthly, Mr Lam says there is no other means by which the plaintiffs could effectively secure compliance, nor have the Defendants suggested any such other means.  There is also no irremediable prejudice to the Defendants if they are to comply with the disclosure orders, and any such prejudice would be outweighed by the need for compliance.  The Defendants are also protected by the cross-undertaking in damages.

50.  Fifthly, there has been inexcusable delay.  In stark distinction from the Motorola case, there has not been an application to discharge made in due time.  Rather, the Discharge Summons and the Stay Summons were issued extremely late, with no proper justification, and little explanation.  Therefore, Mr Lam says, requiring compliance before hearing the Discharge Summons – rather than granting any stay – is a proportional condition to the hearing of the Discharge Summons.

51.  I agree.  Though I will necessarily revisit the question relating to the WeChat threats on any argument on the Discharge Summons, I do not think that they properly excuse or justify the long-term deliberate non-compliance with court orders:

(1)  First, though the threats were clearly wholly inappropriate and should never have been uttered, there was an immediate retraction from them and an apology for them.  I accept that there were a number of messages over a two or three day period before the retraction and apology came, and it might not have been immediately accepted as genuine.  But Vivien must have known the power of that retraction and apology, because she deliberately failed to disclose it to the Court when complaining about the threats.  She must have known that, had she revealed the apology, it may well paint a very different picture.

(2)  Secondly, read against the totality of the messages now produced by Vivien, a fair reading is that the Plaintiffs were ultimately much more likely going to pursue court proceedings to seek redress by way of lawful means; they were not actually going to pursue any extra-judicial means.

(3)  Thirdly, if there was a genuine belief and fear that the threats might actually have been intended and actioned, the obvious thing for Vivien to have done would have been to make an immediate complaint, to either or both of the criminal/police authorities (in Hong Kong and/or Taiwan) and this court.  Indeed, that this court is an obvious place in which to make a complaint is evidenced by the fact that Vivien has now, albeit extremely belatedly, made that complaint.

(4)  Fourthly, as time has passed (approaching two years by the time of the Discharge Summons), it might be thought that it has become clearer still that the Plaintiffs were and are pursuing judicial remedies as opposed to any other form of redress.  Yet at no point until April 2021 was the Discharge Summons issued, and it was only over a month later that the Stay Summons was issued (and that only after prompting by the Plaintiffs’ solicitors).  Oddly, I was told by Mr Miu that lawyers were first instructed by Vivien in December 2020, but there was still the delay until April 2021.  There was not even a letter to the Plaintiffs’ solicitors informing them that the Defendants had instructed solicitors, and perhaps seeking an extension of time within which to effect compliance with the outstanding orders, or to make some challenge to them.

(5)  Fifthly, I am not persuaded that it was the WeChat threats which caused Vivien, as she claims, “to flee back to Taiwan in a big hurry”.  But, even if she fled to safety in Taiwan, once there she was well placed either to have complied with the disclosure orders, or to have challenged them – and to have made a criminal complaint of the sort she has now much later chosen to make (which, incidentally, is inconsistent with her claim that there was no point in making a criminal complaint).  It would have been possible to contact lawyers, either in Taiwan or in Hong Kong or both, and physical presence in Hong Kong to challenge the original disclosure orders was clearly not necessary.  Even now, on the challenge she has made, she has not disclosed her Taiwan address on the affirmation made available to the Plaintiffs.  She could have adopted this approach much earlier.

(6)  Sixthly, it seems to me that the challenge now made is simply because Vivien faces criminal proceedings in Taiwan, commenced in October 2020.  I do not accept that was the first time when she realised she had no option but to fight back, when the terms of the August 2019 Order and the February 2020 Order specifically identified her right and the other Defendants’ right to apply at any time to vary or discharge the orders (at the same time as warning of the consequences of disobeying the orders).  As Mr Lam submits, on Vivien’s case that she is the true owner of the various defendant companies, and so at least indirectly their assets, and with the knowledge that worldwide freezing orders had been made against her and them, it makes little sense for her to have ignored the orders completely. In so saying, I have taken into account Mr Miu’s point that people react differently to different events, such as the threatening messages.

(7)  Seventh, as the continued delay beyond October 2020 identifies, the stance of the Defendants has plainly been either to ignore or to stonewall these proceedings and the various, incremental, orders by which the Plaintiffs were pursuing their claims and the necessary tracing exercise. I have, in a previous decision in this case, already identified the significant connections between the various defendants (including those not a party to the current summonses).  The flat refusal to engage in these proceedings – and the opposite desire instead to obstruct them – was deliberate and contumelious.

(8)  Eighth, the Defendants have chosen not to inform the court whether they have or have not complied with the other aspects of the August 2019 Order and the February 2020 Order (that is, the proprietary/freezing aspects).  Further, if the Defendants had a genuine intention to obey court orders in future, one might have expected it to be made clear by a straightforward apology for not having done so yet, and by a clear statement that compliance would follow if the challenge to the original orders were to fail.  That evidence is conspicuously missing.  Therefore, there is force in Mr Lam’s point that if the Discharge Summons is allowed to be argued but goes against the Defendants, they will simply “disappear” again.

(9)  Ninth, there might have been other ways to seek to comply with the disclosure orders yet retain protection against the stated concerns.  For example, the Defendants could have offered to make disclosure on a ‘sealed’ basis, to be seen only by the Court and not to be passed to the Plaintiffs without leave.  Neither that nor any other suggestion as a practical means of compliance has ever been canvassed.

(10)  Finally, the overall impression left is that the Defendants would have continued to seek to ignore these proceedings, and to disobey court orders, unless and until they were ultimately to feel (as apparently they were) ‘boxed in’ by the Plaintiffs’ continued and entirely lawful use of civil and criminal complaints.

52.  Further in the context of the proprietary claim put forward by the Plaintiffs, and the need for a tracing exercise, the current failure and refusal to comply with the disclosure orders – which seem to me to be necessary both for tracing and for the purposes of enforcing the freezing orders – is a real impediment to justice.  It is well-known that in the context of a claim such as the present, the greater the delay in any tracing exercise the more difficult that exercise will become.  In this case, the delay has already been very lengthy and significant.

53.  I have taken into consideration in the overall exercise of my discretion a preliminary view (that is one formed on the evidential materials and with the benefit of skeleton submissions, but without the benefit of full oral argument) of the merits in the Discharge Summons, and in particular on the aspects of non-disclosure arising from the WeChat messages I have canvassed earlier.

54.  I would, therefore, in the exercise of my discretion as to what seems to me to be in better service of the interests of justice, grant a Hadkinson order.

55.  Subject to hearing further argument on the point, I propose to grant a short period within which compliance must be given, and to address the form by which compliance should be given.

[Discussion with Counsel]

56.  In the circumstances, I shall give until 2 August 2021 for compliance.  I will allow time for the parties to seek to agree the form of compliance, for example by disclosure to the Court and creating a ‘confidentiality club’ permitting the materials disclosed to be seen not by Jason, but by (some of) his legal representatives.  I also allow time to the parties to consider and seek to agree the relevant date or dates as the relevant disclosure ‘snap-shot’ date(s).  If they cannot agree, I will deal with the mechanics of disclosure on paper submissions.

57.  Pending compliance or not, I adjourn the Discharge Summons and the Stay Summons for argument at 10am on 17 August 2021. All matters of costs are reserved.