SECRETARY FOR JUSTICE v. MAN’S (ASIA) DEVELOPMENT LTD AND ANOTHER

HCMP 128/2025

[2026] HKCFI 774

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 128 OF 2025

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D E C I S I O N

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Introduction and Background

1.  On 16 January 2025, DHCJ MK Liu granted leave to the Secretary for Justice (“SJ”) to apply for an order for committal against Man’s (Asia) Development Limited, the 1^st Defendant (“D1”), and Chan Wai Leung Jacky, the 2^nd Defendant (“D2”). The ex parte application was, as required by O.52, r.2 of the Rules of the High Court, Cap. 4A (“RHC”), supported by a Statement of Facts dated 9 January 2025 (“Statement of Facts”) and the 5^th Affirmation of Tsang Hin Yin Billie (“Tsang”) dated 8 January 2025.

2.  By Originating Summons dated 23 January 2025 (“OS”), SJ applies to commit D1 and D2 for contempt for failing to comply with the paragraphs 2 and 4 of the Order of DHCJ Phoebe Man dated 2 November 2023 (“Order”) that:

(1)  D1 do demolish and remove the Structures(s) as shown in the Plan at the Annex enclosed therein on or before 31 July 2024 (“the Deadline”), and no further request for time extension will be entertained thereafter (paragraph 2 of the Order); and

(2)  D1 do deliver vacant possession to SJ of the Government Lands as shown in the Plan at the Annex enclosed therein on or before the Deadline (paragraph 4 of the Order).

3.  SJ seeks an order that D1 be fined and that D2 be committed to prison and/or fined for contempt. At the hearing of the OS (“the Hearing”), it was agreed by Ms Lui, Senior Government Counsel, who appeared for SJ, and Mr Wong, counsel, who appeared for D2, that I should first determine the liability of D1 and D2 (collectively, “Ds”) and, if liability is found by me, parties are to further address me on the appropriate sentence.

4.  It was not disputed that:

(1)  D2 was not a party to the underlying claim between SJ and D1 that led to the making of the Order. However, at the material time, D2 was the sole director of D1, a company that has been wound up since 5 March 2025;

(2)  The Order endorsed with a penal notice was served on D1 at its registered office on 14 November 2023 and personally served on D2 on 23 February 2024 (as required by O.45, rr.7(3) and (4) of RHC); and

(3)  Up to the date of the Hearing, D1 has failed to demolish and remove the Structure(s) and deliver vacant possession of the Government Lands to SJ. Given that D1 has been wound up, Ds will not be able to purge any contempt.

5.  By letter dated 17 November 2025, the Joint and Several Liquidators of D1 wrote to this Court and stated that they intend to take a neutral stance in these proceedings. They sought to be excused from attending the hearing of the OS and were so excused.

Applicable principles

6.  It is trite that the proper approach in committal for civil contempt by reason of breach of a court order is a three-stage test. It is necessary to:

(1)  Construe the order so as to ascertain its meaning and operation;

(2)  Determine whether the alleged contemnor has in fact complied with the order as so construed; and

(3)  Finally, consider whether any failure to comply was accompanied by the state of mind necessary to establish punishable contempt.

See: Kao Lee & Yip v Donald Koo Hoi Yan (2009) 12 HKCFAR 830 at §21.

7.  The standard of proof is “beyond reasonable doubt”: see ibid at §30.

8.  Furthermore, it must be proved beyond reasonable doubt that it was within the power of the alleged contemnor to comply with the order: see ibid, §56 and China Metal Recycling (Holdings) Ltd v Chun Hei Man [2018] 1 HKLRD 455, §§64, 66-68, 71 and 77. However, Mr Wong confirmed at the Hearing that it is not D2’s case that the Order could not be complied with (or it was impossible to do so) but only that it was very difficult to comply with the Order in the circumstances faced by Ds.

9.  As for the relevant mens rea, it is not necessary to prove that the defendant’s conduct was contumacious (i.e. that he deliberately intended to disobey the order), it is sufficient that the breach of a court order is done or made consciously, voluntarily and unaffected by mistake – that is, not casually, or accidentally or unintentionally: see Kao Lee & Yip, §§43-55.

10.  As for the committal for contempt of a director of a company, not a party to the order, it is well established that there are two routes by which a director of a company may be proceeded against for contempt: the first, is under O.45, r.5 of RHC and the second, by aiding and abetting the company to breach the order. Whilst previously it had been thought that there was a difference of approach between the English and Hong Kong Court of Appeals as to whether culpability or wilfulness on the part of the director is necessary (see for example, Abu Dhabi National Tanker Co v Lam Ming Chi & Anor [1998] 4 HKC 320 at 326H-328H and Aqua-Leisure Industries Inc & Another v Aqua Splash Ltd (No.2), §§9-13) in Excel Noble Development Ltd & Ors v Wah Nam Group Ltd & Ors [2001] 4 HKC 148, at 155I-157G, Rogers VP (with whom the other members of the Court of Appeal agreed) comprehensively considered the relevant authorities and concluded that he did not see a difference in approach between Court of Appeal in Nicolas Pappadis v Chan Shing Sheung Barry & Ors [1989] 2 HKLR 511 and the leading English authority of Attorney-General for Tuvalu v Philatelic Distribution Corporation & Ors [1990] 1 WLR 926.

11.  In Solar System International Company Limited v Unision-Watch Manufacturing Limited & Ors (unrep) HCA 1/2001, 9 November 2001, DHCJ Lam (as he then was) considered Excel Nobel Development Ltd and rejected the submissions made that the dicta of Rogers VP as regards the mental element for liability for contempt under O.45, r.5 was only obiter. The learned judge said that in any event even if the dicta was only obiter, he would respectfully follow the same and agreed that there is no inconsistency between the English approach and Hong Kong approach. He therefore held that the approach of Woolf LJ (as he then was) in Attorney-General for Tuvalu is applicable in Hong Kong. See §§23-25.

12.  In Attorney-General for Tuvalu, at 936E-F, Woolf LJ said:

“In our view, where a company is ordered not to do certain acts or gives an undertaking to like effect and a director of that company is aware of the order or undertaking he is under a duty to take reasonable steps to ensure that the order or undertaking is obeyed, and if he wilfully fails to take those steps and the order or undertaking is breached he can be punished for contempt. We use the word ‘wilful’ to distinguish the situation where the director can reasonably believe some other director or officer is taking those steps.”

  Further on at 938A-F, he also said:

“There must however be some culpable conduct on the part of the director before he will be liable to be subject to an order of committal under Ord 45 rule 5; mere inactivity is not sufficient. In this regard we were referred to the decision of Anthony Lincoln J in Director General of Fair Trading v Buckland [1990] 1 WLR 920, decided on 14 July. In that case Anthony Lincoln J having distinguished an earlier case, Biba Ltd v Stratford Investments Ltd [1973] Ch 281, which was cited to him in support of the proposition that a director who is merely passive can be liable for the contempt of a company went on to say, at pp 920, 92:

‘Accordingly I reach the conclusion that Ord. 45, r. 5 does not render an officer of a company liable in contempt by virtue of his office and his mere knowledge that the order sought to be enforced was made. Resort can be had to rule 5 only if he can otherwise be shown to be in contempt under the general law of contempt.’

That remark was however made in a case where there was no finding made against the director of culpable conduct and it should not be taken as meaning that it is only where a director has actively participated in the breach of an order or undertaking that Ord. 45, r.5 can apply. If there has been a failure to supervise or investigate or wilful blindness on the part of a director of a company his conduct can be regarded as being wilful and Ord. 45, r. 5 can apply. In re Galvanized Tank Manufacturers’ Association’s Agreement [1965] 1 WLR 1074 makes clear the importance of this. Megaw J said, at p. 1090:

‘We would, however, emphasis that a company, which has given an undertaking to the court, must be treated as having failed lamentably and inexcusably in its elementary duty if it fails to take adequate and continuing steps to ensure, through its responsible officers, that those officers themselves, and anyone to whom they may delegate the handling of matters which fall within the scope of the undertaking, do not forget or misunderstand or overlook the obligations imposed by such undertaking.’ (Emphasis added.)”

13.  Following the approach of Attorney-General for Tuvalu and in finding that the observations of Megaw J cited above as apposite, in Solar System International Company Limited, it was held at §27 that a company cannot perform its duties pursuant to any court order except through its responsible offices and hence when an order is made against a company, its directors bear the prime responsibility to do the following:

“Firstly, the directors should ensure that they understand the order correctly and fully.

Secondly, they have a personal duty to find out exactly what have to be done by the company to comply with the order.

Thirdly, after identifying what have to be done, they have a personal duty to see that such things are done properly and in accordance with the time limit set out in the court order, whether by delegating the task to other employees of the company or by themselves personally.

Fourthly, if they choose to delegate all or some of the tasks to their staff, it is their personal duty to ensure that such staff clearly understand the requirements of the court order and remember to execute the task properly in the time limit provided for in the court order.

Fifthly, even if they delegate, the directors concerned still have a personal duty to supervise. This means they have to take reasonable steps to check that their staff did carry out their instructions properly, correctly and timely.”

14.  See also Fonfair Company Limited v UDL Management Limited (unrep) HCA 2002/2001, 24 November 2006, per DHCJ Poon (as he then was) at §33.

15.  By the end of the Hearing, as a result of the exchange between myself with Ms Lui and Mr Wong, I do not believe they maintained any dispute on the correctness of the above principles which I shall apply to the present case.

Discussion

Re: D2

16.  The main grounds put forward by Mr Wong for opposing the Application were as follows:

(1)  The Statement of Facts is defective and liable to be struck out;

(2)  SJ had not discharged his duty of full and frank disclosure in the ex parte application; and

(3)  SJ cannot prove beyond reasonable doubt that D2 was in wilful failure to take reasonable steps to ensure compliance with the Order.

(1)  Whether the Statement of Facts is defective

17.  O.52, r.2(2) of RHC provides that the application for leave to apply for committal must be supported “by a statement setting out the name and description of the applicant, the name, description and address of the person sought to be committed and the grounds on which his committal is sought”.

18.  In Cosimo Borrelli (Trustee of SFC Litigation Trust) v Allen Tak Yuen Chan [2018] 2 HKLRD 496, Kwan JA reiterated that the statement filed pursuant to O.52, r.2(2) is treated in a similar manner as an indictment in criminal proceedings having regard to the penal nature of the sanctions for contempt. She held that such statement is of vital importance and has the twofold function of: (1) informing the alleged contemnor of the charge he has to meet; and (2) discharging the applicant’s duty of making full and frank disclosure in the ex parte leave application. Hence, the statement should state all the factual elements (but not the evidence to be relied on) required to be proved to establish the alleged contempt (see §§31 and 33).

19.  As to the extent of particularity required in setting out the grounds on which committal is sought, Kwan JA held at §20:

“The requirement of O.52 r.2(2) is to set out in the statement ‘the grounds on which [the] committal is sought’. It has been said in many cases what is required is that the alleged contemnor ‘shall know, with sufficient particularity to enable him to defend himself, what exactly he is said to have done or omitted to do which constitutes a contempt of court’, and every statement ‘must be looked at against its own background’ to ascertain whether enough information has been given to the alleged contemnor to meet the charge (Chiltern District Council v Keane at 622A-C). The extent of particularity required depends on the nature of the order alleged to have been breached and the background of the case.”

20.  Furthermore, at §24, Kwan JA held that the statement is to be read “fairly and sensibly as [it] would be read by a reasonable person in the position of the alleged contemnor” and the crucial question is whether such a person, “having regard to the background against which the committal application is launched, [would] be in any doubt as to the substance of the breaches alleged”.

21.  See also Kao, Lee & Yip, at §72, where it was held that the grounds referred to in O.52, r.2 do not comprehend the evidence that is to be relied on in proof of contempt by the factual elements, which if proved, are sufficient to establish the contempt. In that case, it was held that the identification of the specific provisions of each order sufficiently allege what had to be done to comply and the non-compliance was charged, and that was a sufficient and appropriate statement.

22.  Turning to the present case, the Statement of Facts:

(1)  At paragraphs 1-3, set out the parties and their addresses;

(2)  At paragraph 4, sets out the relief sought (i.e. that D1 be fined for contempt for breaching paragraphs 2 and 4 of the Order for failing to demolish and remove the Structures(s) and failing to deliver vacant possession to SJ on before the Deadline and that D2 be committed to prison and/or fine for contempt for breach of paragraphs 2 and 4 of the Order by D1 and having been served with the Order failing to take steps to ensure compliance of the same by D1 when he has been in a position to do so).

(3)  At paragraphs 5-10, set out the background to the Order. This includes the underlying civil action commenced by D1 against SJ, the parties’ settlement in 2019 of that action in the terms set out in the Tomlin Schedule of the Amended Consent Order dated 23 October 2019, an order made by DHCJ Le Pichon on 13 January 2022 (subsequently amended on 3 March 2022) and upon SJ’s application to enter judgment for D1’s failure to comply with the Tomlin Schedule, a Consent Summons was filed to dispose of SJ’s application under O.45, r.6 of RHC for a fresh order against D1 which resulted in the Order;

(4)  At paragraph 12, sets out when and how personal service of the Order were effected on D1 and D2;

(5)  At paragraphs 13-17, set out various factual matters including that: (a) by a letter to SJ dated 12 July 2024, Ma Tang & Co Solicitors and Notaries (“MTC”), the then legal representatives of D1, informed SJ that the process pertaining to the demolition and removal of the Structures(s) has been significantly delayed due to a number of unforeseen circumstances; (b) land search revealed that a Chan Wai Ho has become the registered owner of Lot No. 86 in DD 98 in place of D1 by an assignment dated 26 April 2024; (c) after the Deadline, during site inspections on 1 August 2024 and 30 August 2024 it was found that the Structure(s) had still not yet been removed or demolished and D1 had not delivered vacant possession of the Government Lands; and (d) land search revealed that Chan Wai Ho had become the registered owner of Lot No.34 in DD 98 in place of D1 by an assignment dated 31 May 2024 and a Hung Yuk Kuen had become the registered owner of Lot Nos. 87 and 88 in DD 98 in place of D1 by two assignments dated 31 May 2024;

(6)  At paragraphs 18-20, set out the conclusion as follows:

“18. By reason of the aforesaid:-

(a) [D1] failed to demolish and remove the Structure(s) as shown in the Plan at the Appendix enclosed with the Order on or before 31 July 2024, or at all, pursuant to paragraph 2 of the Order;

(b) [D1] failed to deliver vacant possession to SJ of the Government Lands on or before 31 July 2024, or at all, pursuant to paragraph 4 of the Order;

(c) The inactions taken by and/or failure on the part of [D1] constituted blatant breach of the Order;

(d) [D2], being the sole director of [D1] and having been personally served with a sealed copy of the Order with a penal notice endorsed, must be fully aware of the terms of the Order which [D1] must comply and must have knowledge at a time when he can use his position to secure compliance, and he should be aware that, if he does not use his position, steps may be taken against him personally to enforce compliance, but nevertheless has failed to take steps to ensure compliance with the Order by [D1]; and

(e) By reason of (d) above, the failure of [D2] to take steps to ensure compliance of the Order constituted a blatant breach of the Order.

19. The wilful and deliberate inactions of [D1] and [D2] identified in paragraph 18 above amounted to contempt of court. The breach of the Order on the parts of [D1] and [D2] despite their knowledge of the same means that their acts were contumacious and contumelious;

20. In the circumstances, SJ respectfully seeks leave to commence committal proceedings against [D1] and [D2] on the basis of the facts stated above and the supporting affirmation filed herein.”

[my emphasis in bold]

23.  Mr Wong submitted that the Statement of Facts does not state all the factual elements, which if proved, would be sufficient to establish the contempt alleged.

24.  Firstly, he submitted that “failing to take steps” is insufficient and wilfulness on D2’s behalf is required. However, the fact that it is alleged D2’s inaction is wilful (and deliberate) is clearly stated in paragraph 19 of the Statement of Facts. Mr Wong appeared to accept this when this was pointed out to him at the Hearing.

25.  Secondly, he submitted that there is no mention as to what reasonable steps D2 has to be taken to ensure that the Order is obeyed. However, as explained by Kwan JA in Cosimo Borrelli, it is the factual elements alleged to constitute contempt which has to be set out with sufficient particularity to enable the alleged contemnor to defend himself. In my view, what reasonable steps D2 should have taken so as not to constitute contempt is not necessary. It is only necessary to set out what is the charge against D2 with sufficient particularity to enable him to defend himself. Even without knowing preciously what could have enabled him not to be in contempt, he should be able to know what is the charge made against him by SJ.

26.  Thirdly, it was submitted that there are no particulars in relation to how D2 wilfully failed to take steps to ensure compliance of the Order. As held from the authorities above (see also Attorney-General for Tuvalu at 934H-935C), the cases established that an alleged contemnor should be told with sufficient particularity what he has said to have done or omitted to do which constitutes contempt to enable him to defend himself and that the nature or background of the case is important. The example given in Attorney-General for Tuvalu was that if a non-molestation order is said to be breached, the complainant will in all probability, having witnessed the act complained of personally, be able to particularize the act relied upon. However, where the complainant has not personally witnessed the acts complained of and rely on inference to establish non-compliance with a court order, so long as the thrust of the case is clear, it would not be reasonable and would stultify this branch of the law if the same degree of particularity were required.

27.  As submitted by Ms Lui, it would not be reasonable to require SJ at the stage of seeking leave to apply for an order for committal, with no knowledge of the conduct of the daily operations and management of D1 to give particulars as to how D1 and its director or staff had failed to ensure compliance with the Order. In the present case, reading the Statement of Facts fairly and sensibly, as it would be read by a reasonable person in the position of D2, and having regard to the nature and background of the alleged contempt, D2 cannot be in any doubt as to the substance of the breaches alleges against him. I think it is sufficiently clear that SJ’s case against D2 is that his failure to ensure compliance of the Order by D1 was wilful because: (a) D2 knew what the terms of the Order were; (b) he was the sole director of D1; (c) as a director, he could have used his position to secure compliance of the Order by D1 (and given he was the sole director if he does not use his position no one else could); and (d) but nevertheless he failed to take steps to ensure compliance of the Order by D1. I cannot see what further particulars are required to enable D2 to defend the charge against him.

28.  Besides, the fact of the matter is that D2 has been able to contest the substantive application against at the Hearing. D2 has never made any formal application to set aside the ex parte leave or to strike out the Statement of Facts, nor submitted that he has suffered any prejudice, which demonstrates that all the factual elements with sufficient particulars have been set out to enable D2 to defend himself.

29.  In all, I do not consider that the first ground is meritorious.

(2)  Whether SJ has not discharged his duty of full and frank disclosure

30.  In China Metal Recycling (Holdings) Ltd v Chun Hei Man [2018] 1 HKLRD 455, it was held at §§80-81 that a party seeking leave to apply for committal has a duty to give full and frank disclosure. In order to satisfy the duty of full and frank disclosure, an applicant must give to the court the relevant information which is material to the consideration as to whether an application for committal should be filtered out, including information material to suspicion of oppression in proceeding by way of committal.

31.  Mr Wong submitted that SJ failed to disclose the following chain of events:

(1)  On 13 August 2024, a letter was sent to SJ from MTC on behalf of D1 and stated that despite the financial challenges, D1 has secured necessary funds to engage a contractor to carry out the removal works, and that the demolition and removal of the Structure(s) will commence on 15 August 2024;

(2)  On 20 August 2024, an email was sent by Ms Vivian Wong, on behalf of D1, to Keith Ng of District Land Office (“DLO”) and stated that despite the difficulties, D1 remained committed to progressing the demolition work. Photographs documenting the demolition work in progress were included in the said email;

(3)  On the same date, and upon receiving the email of 20 August 2024, Keith Ng made a phone call to D2. D2 informed DLO that, inter alia, some demolition works were being carried out; and

(4)  The squatter house and rooftop structure straddling both the Government Land and the private land of the Lots were in the process of being removed in August 2024.

32.  In the 2^nd Affirmation of Tsang, it was stated that both the Department of Justice and Lands Department have never received MTC’s letter dated 13 August 2024. As for the other matters, it was submitted that these events occurred after the Deadline and does not assist Ds in defending these proceedings when as a matter of fact the Structure(s) had not been removed and vacant possession not been given by the Deadline. Ms Lui submitted that these events are not material to the leave application which is a filtering process to screen out oppressive applications and those applications which obviously have no chance of success: see China Metal Recycling (Holdings) Ltd, §81.

33.  In Secretary for Justice v Choy Bing Wing (unrep) CACV 11/2004, 3 December 2004, Yeung JA giving the judgment of the Court of Appeal held at §48 that “facts are material and should be disclosed if they are relevant to the weighing operation which the court has to make in deciding whether or not to grant the order”.

34.  In China Metal Recycling (Holdings) Ltd, it was held that the efforts and continued efforts by the alleged contemnor in complying with the order even though he has failed to completely fulfil its requirement within the time prescribed is a material consideration in assessing whether it was oppressive to proceed by way of an application for committal against the defendants. In that case, the failure to disclose the letter from the defendants’ solicitors that they were going to seek information from Mr Li, the director of the relevant company for discovery of accounting documents, was a material non-disclosure. However, in that case the court found that the bald statements on behalf of the plaintiffs that the defendants made no attempts to address the deficiencies of the disclosure made as misleading (see §§20, 78-84). I take the view that the facts and circumstances of that case is plainly distinguishable from those of the present case.

35.  The fact that MTC had written to SJ stating that the process of demolition and removal of the Structure(s) had been delayed due to obstruction by Man Shau Man (“Man”) and persons claiming to belong to Man Clan Association (“the Association”), the lack of funds to engage contractor to carry out removal works, and that in order to repay its debts D1 had sold Lot Nos 34, 86, 87 and 88 all in DD 98 in April and May 2024 etc. were all disclosed in paragraphs 13 and 14 of the Statement of Facts. There was no false or misleading statement therein to the effect that SJ was saying that no efforts were made to remove the Structure(s) or to deliver vacant possession of the Government Lands to SJ or that there was complete inaction/inactivity on Ds’ part. Furthermore, in the present case there had been a prior application for an order under O.45, r.6 of RHC as mentioned in paragraph 10 of the Statement of Facts (unlike in China Metal Recycling (Holdings) Ltd see §62). I cannot see how the non-disclosure of the further correspondence and events would be material to the extent that it would have made a difference to the judge’s exercise of discretion in granting leave.

36.  In any event, even if there was a material non-disclosure in breach of the duty to give full and frank disclosure, the court has a real discretion to exercise whether to set aside leave or to exercise the discretion afresh. In Cosimo Borrelli, at §38, Kwan JA did not accept the submissions made that as a matter of principle the court should simply set aside leave and strike out the originating summons once the Statement of Facts is found to be defective. She held that the court has a real discretion to exercise whether to set aside leave. In that case, where the defendants would not have suffered any prejudice notwithstanding the omissions in the Statement of Facts as it would not have made a difference to the judge’s exercise of discretion in granting leave, the discretion was exercised not to set aside leave.  

37.  Given my view that any non-disclosure would not have made a difference to the judge’s exercise of discretion to grant leave, and the correspondence and events have now been disclosed in the affirmations in respect of the OS and are before this court such that there is no prejudice caused to D2, even if the leave should be set aside, it should be granted afresh.   

(3)  Whether SJ has proved beyond reasonable doubt D2 has been in wilful failure to take steps to ensure compliance of the Order by D1

38.  From the affirmations filed by D2, the attempts to comply with the Order and the alleged difficulties faced have been set out. I accept that the letter sent by MTC to SJ on 12 July 2024 is contemporaneous evidence of the asserted difficulties and demonstrates that D1 had attempted to seek consent from SJ to maintain the Structures(s) in its present state and condition until resumption of the Lots in 2025. In particular, it was explained therein that the process of demolition and removal of the Structure(s) were significantly delayed due to the following unforeseen circumstances:

“1. In April 2024, when the removal works were underway, a man identifying himself as Man Shau Man claimed to be a member of the Man Clan Association (‘the Association’) and asserted that the Structure(s) was erected by and belong to the Association and that our client has no right or ownership in relation thereto. He subsequently filed a police report against our client for alleged criminal damage to the Association’s property, thereby preventing our client from carrying out the removal works.

2. In April and May 2024, in order to repay its debts, our client sold all the Lot Nos.34, 86, 87 and 88 in DD98 (‘the Lots’). Therefrom, our client is no longer the owners of the Lots. As part of the Structure(s) is/are erected on the Lots, the removal works required the consent and co-operation of the current owners of the Lots making the removal works more difficult to complete in time.

3. In June 2024, during a site visit by officers from the District Lands Office, together with our client, to verify the removal of goods and belongings, two individuals claiming to be members of the Association prevented the officers and our client from entering the Government Lands. They asserted again that the Association is the owner of the Structure(s) and threatened to take legal action against the Government and our client if any of them dared to demolish or remove the Structure(s) or any part(s) thereof.

4. By an Injunction Order dated 14^th June 2024 under DCCJ 4419/2014, our client is prohibited from removing from Hong Kong, disposing of or dealing with its assets including all bank and securities accounts in Hong Kong. Furthermore, the bank accounts of our client and its director were frozen. As a result, our client is in serious financial difficulty and does not have any funds to continue to engage contractor to carry on the removal works.

5. Given these untoward incidents, it will take significantly more time for our client to complete the removal works. Furthermore, we understand that the Government has published in the Gazette that the Lots will be resumed by the Government in 2025.

6. In light of the above circumstances, we are instructed to request your consent for our client to maintain the Structure(s) in its present state and condition, and for the Structure(s) not to be removed until the resumption of the Lots by the Government. Our client will undertake to keep the Government Lands vacant and will not carry out any activities over the Government Lands before the Lots are resumed by the Government.”

39.  However, Ms Lau submitted that these difficulties were bare assertions and Ds had not satisfied their evidentiary burden to raise such defence.

40.  Firstly, in respect of the alleged obstructions by Man and the Association, it was submitted that in the letter of 13 August 2024, MTC informed SJ that the necessary funds were secured to engage a contractor for the removal works which will be commenced on 15 August 2024 and is expected to be completed by 31 August 2024. Hence it was submitted that Ds no longer maintained those obstructions. In any event, it was submitted that Ds’ evidence did not suggest that they had verified Man/the Association’s ownership claims over the Structure(s) nor sought law enforcement’s assistance. Whilst Ms Lui submitted at the Hearing that the photographs exhibited to D2’s 2^nd Affirmation allegedly showing two men from the Association intervening in the site visit in the summer of 2024, they do not depict any intervention or harassment but only discussion between some persons, in the Reply Affirmation of Tsang, at paragraph 10, Tsang implicitly accepted the existence of Man and his presence at the Lots during one of the site inspection on 23 May 2024 even though he said that Man did not take physical steps to interrupt/obstruct the site inspection. Given what was stated in the affirmation of D2, the photographs and contemporaneous documents adduced which go to some extent support his assertion, including WhatsApp screen captures between D2 and Man and cheques for alleged payments demanded by Man, in the absence of any application to cross examine D2, I am not satisfied that this was a bare assertion that should be dismissed out of hand. Based on the evidence before me, it is not entirely incredible that Man or the Association had created some difficulties in respect of the demolition of the Structure(s).

41.  Secondly, in respect of the transfer of ownership of the Lots and the need for consent and cooperation from the new owners, Ms Lui submitted that this was contradicted by MTC’s letter of 13 August 2024 and D2’s email of 22 October 2024 informing that the removal works can carried out as funding has been secured. Besides any impediment ought reasonably to be foreseen by Ds who could have taken steps to resolve the matters with the new owners in advance whereas the only evidence of having done so was the letter issued to the new owners on 1 April 2025. I can see the force of these points. In any event, it cannot be said such delays to the demolition works were due to “unforeseen circumstances”.

42.  Thirdly, in respect of the alleged financial difficulty due to the injunction dated 21 June 2024 freezing all bank accounts of Ds, Ms Lui submitted that that was 7 months after the Order was granted and in April and May 2024, D1 would have received the proceeds from selling the Lots to the new owners. Mr Wong did not seriously contest this. In any event, even with the alleged financial difficulties and injunction in place, as Mr Wong submitted to this court, D1 was able to pay for the engagement of its authorised person (“AP”) and paid the contractors engaged to do the demolition works (as evident from the invoices and receipt exhibited to the Affirmation of Cheung Chi Fong on behalf of D2).

43.  Ultimately, I think Mr Wong accepted that the real difficulty faced by Ds was not having obtained the necessary Government approval for carrying out the demolition works. It was accepted that notwithstanding that by August 2023, D1 had engaged AP in respect of the demolition works and by letter dated 4 October 2023, AP had submitted a Notice of Appointment of Authorised Person and/or Registered Structural Engineer and/or Registered Geotechnical Engineer (Form BA4), no actual application was made by submission of the demolition plan to the Buildings Department for approval. In the 2^nd Affirmation of D2, he stated that he did not know that in fact no demolition proposal had ever been submitted to the Buildings Department notwithstanding AP had been instructed by D1 to do so in 3 months from 4 October 2023.

44.  The criminal standard and onus of proof in proving contempt means that there is no persuasive burden on the defendant to prove anything.  At most there might be an evidentiary burden. If there is a hypothesis which may reasonably be consistent with the defendant’s innocence then he is entitled to be acquitted: see Concorde Construction Co Ltd v Colgan Co Ltd (No 2) [1984] HKC 253 at 257D-F and The Incorporated Owners of Long Mansion v Good Choice Industrial Limited & Ors (Unrep) HCMP 2138/2013, 26 October 2016, per Au-Yeung J at §11(d).

45.  Whilst I accept that D2 has satisfied his evidentiary burden of the alleged difficulties, in particular, the lack of approval from the relevant Government authorities to carry out the demolition works, the question I have to ask is whether SJ has proved beyond reasonable doubt that D2 has taken all reasonable steps to ensure compliance with the Order by D1 and whether he failed to supervise or investigate or wilfully turned a blind eye to the possible breach of Order by D1: see Solar System International Company Limited, §25.

46.  Whilst the Order was made pursuant to a Consent Summons signed by D1’s legal representatives which means D2 must have been legally advised of the meaning of the Order before agreeing to it, and having engaged AP who prepared the Expert Report, D2 had fulfilled his duty to find out what has to be done by D1 to comply with the Order, I find that he failed to discharge his personal duty to see that what has to be done to comply with the Order was properly done and done within the time limits set out in the Order. See ibid, §27.

47.  As held in Solar System International Company Limited at §26, whilst it is permissible and indeed in some circumstances inevitable that a director must delegate the performance of some tasks in relation to the compliance with a court order, it remains his personal duty to ensure that such delegation is effective and all necessary steps have been taken to ensure compliance.

48.  From the Expert Report prepared by AP dated 31 August 2023, it is clearly set out that it is a statutory requirement for approval and consent for the works to be obtained. Furthermore, in the Time Programme of Overall Process from Design, Approval and Construction of the Demolition Process, it is made clear that after the appointment of AP and a Registered Structural Engineer, the next step is submission of the demolition plan to the Buildings Department for approval. Even giving the benefit of the doubt to D2 that he had instructed AP to prepare and submit the demolition plans within 3 months from 4 October 2023, the fact that he had not known why such submissions were not made and did not discover the same, demonstrates that there was inadequate supervision. He plainly had not taken reasonable steps to check that AP was following the Time Programme which had been compiled to show the court that a reasonable time for D1 to carry out the demolition works was 11 months and was the basis that SJ and D1 executed the Consent Summons leading to the Order for demolishing of the Structure(s) on or before 31 July 2024.

49.  Although Mr Wong demonstrated by reference to various photographs taken that notwithstanding approval for the demolition works was never obtained, between 31 August 2023 and August 2024 certain demolition works were carried out including the removal of the squatter house and rooftop structures straddling both the Government Lands and the private land of the Lots, plainly D2 had not discharged his personal duty to see that there was strict compliance with the Order in that it was done properly (i.e. with the relevant Government approval) and in accordance with the time limit (i.e. on or before the Deadline).

50.  Accordingly, I am satisfied beyond reasonable doubt that it was within the knowledge and power of D2 to ensure compliance by D1 of the Order which he knew if he did not use his position, steps could be taken against him personally to enforce compliance, there was non-compliance with the Order, and there was a wilful failure by D2 to take reasonable steps to ensure compliance with the Order by D1.

Re: D1

51.  I am satisfied beyond reasonable doubt that D1 has failed to comply with the Order and the breach of the Order was accompanied by the necessary mens rea (i.e. it was breached consciously, voluntarily and unaffected by mistake).

Conclusion

52.  For the above reasons, I am satisfied that the contempt of D1 and D2 have been established.

53.  There shall be a hearing for further submissions on the appropriate penalty and consequential orders. The parties should liaise and attend before the Listing Officer to fix a date for a hearing at the earliest available date.