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

HCMP 2946/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2946 OF 2014

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J U D G M E N T

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Introduction

1.  These are committal proceedings which arose out of an action HCA 797/2012 instituted by the applicant as 1^st plaintiff, against the respondents as defendants (“Main Action”).  The respondents are alleged to have been in breach of an injunction order and an Anton Piller order made in the Main Action.

2.  The applicant herein (“A”) is the 1^st plaintiff in the Main Action and is a company incorporated under the laws of Hong Kong.  A’s director and 70% shareholder is one Wei Wen (“WW”).  WW is the elder brother of the 1^st respondent (“R1”), who holds the remaining 30% in A.  R1 is married to the 3^rd respondent (“R3”).  R1 and R3 were both former directors of A.

3.  The 2^nd respondent (“R2”) is a company incorporated under the laws of Hong Kong, and R3 is and was at all material times its sole director and shareholder.

4.  It is A’s case in the Main Action that, among other things, R1 and R3 had breached their fiduciary duties and duties of confidence in diverting business away from A to R2.

5.  The business diverted included business A alleged that it had been conducting with its customer Apple Inc (“Apple”).

6.  A had applied , ex parte ,  and obtained in the Main Action on 14 May 2012 an injunction order (“Injunction Order”) and an Anton Piller order (“Anton Piller Order”) (they will be collectively referred to as  (“Ex Parte Orders”).  The Ex Parte Orders were continued by DHCJ Mimmie Chan, as she then was, on the return date of 18 May 2012.  The attempts of Rs to set aside the Ex Parte Orders were dismissed on 12 July 2012 by DHCJ Saunders who made modifications/variations to the Injunction Order on the same day (“Amended Injunction Order”).  The Amended Injunction Order and the Anton Piller Order will be collectively referred to as “Orders”.  

7.  The Injunction Order was against R1 and R2, and expressly prohibited R1 and R2 from, among other things, soliciting, entering into, performing, or continuing to perform any contract with clients of A set out and named in a list attached to the Injunction Order (“Clients List”) for the sale and/or provision of auto test systems, test fixtures etc, and top of the Clients List was Apple[1]. 

8.  The Anton Piller Order was also against R1 and R2, and, among other things, expressly required R1 and R2 to disclose various documents listed in Schedule 2 attached to the order (“Listed Items”), which included all company records, financial documents, price quotations, purchase orders, invoices, receipts and agreements incidental to R2’s business, and also business correspondence of R1 and R2 and that of their associated persons and/or companies arising out of the use of the email accounts under the domain name “caevolution.com”[2].

9.  About 6 months prior to the commencement of the trial in the Main Action (“Main Trial”), Mimmie Chan J (“Trial Judge”) made an order on 23 May 2014 in the Main Action against Apple for disclosure of various documents (“Discovery Order”).  Pursuant to the Discovery Order, Apple produced voluminous documents (“Apple Documents”).

10.  A alleged that it discovered from the Apple Documents that serious breaches of the Amended Injunction Order had been committed by R1 and R2, and that R1 and R2 had also breached the Anton Pillar Order in failing to disclose documents in the Listed Items. 

11.  It was further alleged by A that R3, being the wife of R1 and the sole director and shareholder of R2 and in such position had among other things, had failed to ensure R2’s compliance with the Orders and/or had aided and abetted the aforesaid breaches. 

12.  The Main Trial commenced on 3 November 2014 and took place for 10 days before the Trial Judge.

13.  During the course of the Main Trial, and while WW was still giving oral evidence, A made an ex parte application on 11 November 2014 for leave to issue committal proceedings against Rs. Leave was granted by the Trial Judge on 12 November 2014[3] (“Ex Parte Leave”), and A issued the originating summons herein on 13 November 2014 pursuant to the Ex Parte Leave.  

14.  The Main Trial was subsequently adjourned part heard on 14 November 2014 and fixed for another 16 days, from 2-3 June 2015 for experts’ evidence, 24 August-8 September 2015 for Rs’ evidence, and 3-4 November 2015 for closing submissions.

15.  R2 and R3 had later attempted to apply for the trial of the present committal proceedings to be adjourned and stayed generally pending the determination and disposal of the Main Action or until further order.  By a judgment handed down on 10 February 2015, this court declined to grant a stay.  The subsequent application by R2 and R3 for leave to appeal to the Court of Appeal was also dismissed by this court.

16.  About 3 weeks prior to the commencement of the trial before this court, R2 and R3 suddenly issued a summons to set aside the Ex Parte Leave, and this was followed by R1 issuing a similar summons a day later (“collectively called “Setting Aside Applications”) .

17.  Counsel Mr Poon Siu Bunn appeared for A at the trial of these committal proceedings, Counsel Mr Raymond Fong appeared for R1, and Counsel Mr Tim Yu appeared for R2 and R3.

18.  At the commencement of this trial, I had queried whether the Setting Aside Applications should have been taken out in the Main Action instead of in the present proceedings.  Thereafter, upon taking further instructions, Mr Fong and Mr Yu indicated that Rs would withdraw their Setting Aside Applications, and this court granted them leave to do so.

Evidence

19.  WW had altogether filed 3 affirmations in relation to the present proceedings:

(i) His 16^th affirmation in the Main Action in support of the application for Ex Parte Leave[4] (“WW16-797”).

(ii) His 1^st affirmation in these proceedings on 27 November 2013 (“WW1-2946”).

(iii) His 2^nd affirmation in these proceedings in reply to R1’s affirmation (“WW2-2946”).

20.  WW had attended trial and was cross examined.

21.  R1 filed an affirmation on 27 November 2013 to oppose WW16-797 and A’s committal proceedings (“WX1-2946”).  He had also filed an affirmation, ie his 3^rd Affirmation of 16 June 2015 in support of the Setting Aside Applications[5].  R3 had also filed an affirmation on 16 June 2015 in support of the Setting Aside Applications[6].

22.  On the 3^rd day of the trial, a bundle of documents filed in the Main Action was prepared by A in relation to the issue of service and produced to the court, namely Bundle D.  In this bundle, R1’s 1^st, 2^nd, 3^rd and 4^th affirmations filed in the Main Action had been included (without exhibits).  R3’s affirmation dated 5 September 2012 and filed on 10 September 2012 was also included.

23.  During closing submissions, Mr Poon had made references to those affirmations of R1 and R3 in Bundle D.  Mr Fong submitted that it was unfair for A to rely on those affirmations because they were incomplete and were filed in reply to WW’s affirmations which were not produced, and that Bundle D was only produced as a result of WW’s evidence in relation to a hearing in the Main Action where fortification of A’s undertaking as to damages was raised.  Mr Fong had further submitted that R1’s affirmations were at variance to A’s own pleaded case or in any event did not advance A’s case.

24.  When Bundle D was produced, Mr Fong and Mr Yu only reserved their position and did not raise any objection, nor did they ask A to include WW’s affirmations or any other documents filed in the Main Action. They also had had plenty of time to peruse the documents in Bundle D and to take instructions, since after the 3^rd day of the trial, the trial had to be adjourned part-heard, and there was a gap of about 4 weeks before the trial resumed.  The parties were also given a week to prepare their closing submissions.  I am of the view that there was no unfairness to Rs for Mr Poon to refer to R1’s and R3’s affirmations.

25.  Upon the close of A’s case, R1 and R3 elected not to tender themselves for cross-examination on their respective affirmation evidence.  Mr Poon submitted that pursuant to general legal principles and also in line with the directions of this court of 10 February 2015[7], R1’s and R3’s affirmation evidence filed in the present proceedings, insofar as they contradicted and/or denied A’s case, ought not to be admitted. 

26.  However, as submitted by Mr Poon, the expunging of the Rs’ respective affirmation evidence should be subject to the general principle that when an affidavit / affirmation has once been filed by any party, the opposite party is entitled to use statements therein as admissions by the deponent[8]. I accept Mr Poon’s submissions in this respect.  I did not make any order to expunge R1’s and R3’s affirmation, but will give no weight to their evidence, insofar as they contradicted and/or denied A’s case, unless otherwise stated in this judgment.

27.  A essentially relied on the Apple Documents to prove its case.  Rs had also raised an issue on the admissibility of the Apple Documents, which I will deal with separately later.

28.  Pursuant to the Disclosure Order, Apple first disclosed documents on 16 June 2014 comprising of mainly emails, and later on 24 October 2014, Apple made further disclosure of documents comprising primarily of purchase orders issued to R2.  Subsequently, on 6 January 2015, Apple sent to A a 2-page spreadsheet, which was a summary prepared by Apple of all past Testing Business[9] dealings between Apple and R2.  The Apple Documents thus  consisted of :

(i) A bundle of emails (“Emails”);

(ii) A bundle of purchase orders issued to R2 (“Purchase Orders”), which included “Blanket” Purchase Orders and “Standard” Purchase Orders;

(iii) A 2-page spreadsheet prepared and issued to A by Apple showing details including numbers / dates / amounts of invoices / purchase orders, vendor names, dates of payments etc between Apple and R2 (“Spreadsheet”)[10].

Preliminary Issues

29.  It was submitted on behalf of Rs that the court should determine two preliminary issues first :

(i) Whether personal service of  the Orders on R1 and R3 should be dispensed with (retrospectively or otherwise) under RHC O45 r 7(6) and /or O45 r 7(7) ;

(ii) Whether the Apple Documents were admissible.

Whether personal service of the Orders on R1 and R3 should be dispensed with

30.  A had obtained the following orders on 3 December 2014 from the Trial Judge:

(i) Personal service of the originating summons herein and the relevant court documents on R3 be dispensed with;

(ii) Leave to amend its originating summons and the Order 52 statement to include, among other things, an order that personal service of the Orders on Rs be dispensed with;

(iii) Service of the amended originating summons (“Amended OS”) and the amended Order 52 statement (“Amended Statement”) on Rs be dispensed with.

31.  There was no dispute in relation to the service of the Orders on R2, which was duly effected at the address of R2’s registered office in Hong Kong.  Rs’ challenge to service were two folds:

(i) The Orders did not contain any penal notices as required under RHC Order 45 r 7 (4) or the penal notices were plainly defective;

(ii) The Orders were not served personally on R1 and R3.

32.  It was not disputed that there was no personal service of the Orders on R1 and R3.

33.  A’s position was that this court has the power to dispense with personal service of the Orders under O 45 r 7(6) and (7) of Rules of the High Court (RHC) if it thinks just to do so, and that such power can be exercised retrospectively.

General Legal Principles on the requirements under O 45 r 7

34.  Paragraph 45/7/1 of the Hong Kong Civil Procedure 2015 Volume 1 (“HKCP”) has  set out the effect of O 45 r 7 :-

“The rule makes explicit the conditions precedent to the enforcement of a judgment or order by writ of sequestration or by order of committal under the rule by specifying (1) the requisite documents(s) to be served; (2) the time within which such documents(s) must be served; (3) the person on whom such document(s) must be served; and (4) the terms of the penal notice to be indorsed. The rule also recognises the present practice under which the court may dispense with service of the requisite document(s).”

35.  Paragraph 45/7/1 then sets out that  under O 45 r 7(6) of RHC :-

“The court has the power to proceed to the enforcement of a negative order by writ of sequestration or by order of committal even though the original order has not yet been served in accordance with the requirements of this rule, provided however that the court is satisfied that the person or party in question has had notice of it either by being present when the order was made or by being notified of its terms by telephone, telegram, fax, email or in such other manner as the court may deem sufficient. A negative order is often made ex parte in circumstances of great urgency to preserve the status quo, and it would be highly inconvenient if it could not be enforced until it was first served as required by this rule. Paragraph (6) is designed to enable the court, if necessary before service, to prevent disobedience or further disobedience or to compel obedience to a negative order. All of the requirements set out at r 7 must be strictly observed (Winner Food Products Ltd v Chung Yat Ming[1989] 1 HKLR 371)”

36.  Paragraph 45/7/7 of HKCP further sets out  in relation to O 45 r 7(7) that :

“Dispensing with service of documents – Paragraph (7) embodies the former practice under which the court has power to dispense with the service of the requisite documents in order to found an order for sequestration or committal.

The power to dispense with service is exercisable in relation to both mandatory and prohibitory orders. (Excel Noble Development Ltd v Wah Nam Group Ltd, unrep, CACV No 910/2000, [2001] HKEC 612)

…”

37.  It was not disputed that the court’s power to dispense with personal service of the Orders could be exercised retrospectively under O 45 r 7(6) and/or (7).  It was also not disputed that the absence of a formal summons and supporting affidavit was no bar to the making of an order dispensing with service when the party affected had adequate notice of the application and the court was appraised of the relevant facts. 

Endorsement of Penal Notice

38.  O 45 r 7(4)  sets out  that :-

“(4) There must be indorsed on the copy of an order served under this rule a notice informing the person on whom the copy is served:-

(a) in the case of service under paragraph (2) that if he neglects to obey the order within the time specified therein, or, if the order to abstain from doing an act, that if he disobeys the order, he is liable to process of execution to compel him to obey it, and

(b) in the case of service under paragraph (3) that if the body corporate neglects to obey the order within the time so specified or, if the order is to abstain from doing an act, that if the body corporate disobeys the order, he is liable to process of execution to compel the body to obey it.”

39.  It was Rs’ case that the requirement under O 45 r 7(4) had not been complied with by A.

40.  A’s position was, however, that the Orders all contained appropriate penal notices prominently within the opening paragraphs of the those orders.

41.  The purpose of a penal notice is to inform the respondent the consequence of not obeying the court order.  Mr Fong had referred to Funny Electronics Co Ltd v World Asia Plastics Die-Casting Mould Factory [1985] 2 HKC 572 and paragraph 45/7/6 of HKCP.

42.  In Funny Electronics, the plaintiff had obtained an ex parte order which required the 2^nd defendant, by a director, to forthwith deliver up certain moulds, and notice was served on the respondent a director of the 2^nd defendant, of the requisite documents.  Subsequently, leave was obtained by the plaintiff for committal proceedings against the respondent. One of the points taken by the respondent was that the penal notice upon which the motion was founded was bad in law.  The penal notice was framed in the following terms: “If you, (name), director of the within named the second defendant (name) disobeyed this order, you will be liable to process of execution to compel to obey it.”

43.  It was held by Nazareth J, among other things, and having regard to the form of the requisite endorsement set out in the 1985 edition of the  Supreme Court Practice para 45/7/6, and O 45 r 7(3) and (4), that (i) the penal notice in that case was clearly defective, and (ii) penal notices should be strictly construed, and that the deficiency of the penal notice was not in his view a mere irregularity, and  that the notice must fail altogether.

44.  The  form of the requisite endorsement referred to by Nazareth J above is essentially the one presently set out in paragraph 45/7/6 of HKCP, which states as follows:

“45/7/6

Indorsement of penal notice or order-It is a necessary condition for the enforcement of a judgment or order under r5 by way of sequestration or committal, that the copy of the judgment or order served under this rule should have the requisite penal notice prominently indorsed thereon.

This must be indorsed on the copy for service of all orders which are required to be served, whether personally or not, eg an order for discovery (of which service on the solicitor is sufficient) (Hampden v Wallis (1884) 26 ChD 746) and this rule applies, even where the “defendant” is a limited liability company (Benabo v William Jay & Partners Ltd [1941] Ch 52; [1940] WN 330, Morton J). A similar memorandum has to be indorsed on orders in divorce proceedings requiring a person to do an act under O45, r7(4).

The indorsement on the front of the order should be in the following words or in words to the following effect:-

In the case of a judgment or order requiring a person to do an act within a specified time or to abstain from doing an act:

‘If you, the within named AB neglect to obey this judgment (or order) by the time stated (or in the case of an order to abstain from doing an act, ‘If you, the within named AB disobey this judgment (or order)’), you may be held to be in contempt of Court and liable to process of execution to compel you to obey it.’

In the case of a judgment (or order) requiring a body corporate to do within a specified time or to abstain from doing an act:

‘If you, the within named AB Ltd neglect to obey this judgment (or order) by the time stated (or in the case of an order to abstain from doing an act, ‘If you, the within named AB Ltd disobey this judgment (or order)’), you may be held to be in contempt of Court and liable to process of execution to compel you toobey it.’

In the case of a judgment (or order) requiring a body corporate to do or to abstain from doing an act, but it is sought to take enforcement proceedings against a director or other officer of that body:-

‘If ABLtd neglect to obey this judgment (or order) by the time stated (or in the case of an order to abstain from doing an act, ‘If AB Ltd disobey this judgment (or order)’), you, XY (a director or officer of the said ABLtd) may be held to be in contempt of Court and liable to process of execution to compel you to obey it.’

45.  Turning back to the Amended Injunction Order in the present proceedings, the 1^st page thereof set out as follows:

“Important

Notice To The Defendants

1. …

2. If you, WEI Xing (R1) and Evolution Resolution Limited (R2), the Defendants disobey this Order you may be found guilty of contempt of court and any of your directors may be sent to prison or fined and you may be fined or your assets seized.

3. If any person with knowledge of this Order procures, encourages or assists in its breach, that person will also be guilty of contempt of court ”[11]

46.  In the Anton Piller Order, there were the following paragraphs :

“Important

Notice to the Defendants

…

10. If you, WEI Xing and Evolution Solution Limited, the Defendants disobey this Order you may be found guilty of contempt of court and any of your directors may be sent to prison or find and you may be fined or your assets seized.

11. If any person with knowledge of this order procures, encourages or assists in its breach, that person will also be guilty of contempt of court.”[12]

47.  Mr Poon had submitted that the above paragraphs 2 and 3 in the Amended Injunction Order, and paragraphs 10 and 11 in the Anton Piller Order contained appropriate penal notices prominently endorsed thereon (“A’s Notices”). 

48.  Although the Amended Injunction Order was not a Mareva injunction, it had incorporated some of the wordings in the standard form for a Mareva Injunction set out in the PD 11.2.  In particular, the standard form bore the following words on the 1^st page:

“IMPORTANT

NOTICE TO THE DEFENDANT

1. This Order prohibits you from dealing with your assets up to the amount stated. The Order is subject to the exceptions which are set out in the Order. You should read the whole of this document carefully. You are advised to consult a solicitor as soon as possible. You have the right to ask the court to vary or discharge this Order.

2. If you disobey this Order you may be found guilty of contempt of court and you [any of your directors] may be [sent to prison or]¹ fined or your assets may be seized.”

49.  There is, however, a footnote no 1 in paragraph 2 of the standard form in PD 11.2 which in fact reads:

“¹ Delete “sent to prison” with a corporate defendant. This notice is not a substitute for the indorsement of a penal notice.”(emphasis added)

50.  The Anton Piller Order was in the standard form set out in PD 11.2, and the relevant paragraphs of the standard form are:

“10. If youthe defendant disobey this Order you may be found guilty of contempt of court and [any of your directors] may be sent to prison or fined [and you may be fined] or your assets seized.¹⁴　

11. If any person with knowledge of this Order procures, encourages or assists in its breach, that person will also be guilty of contempt of court.”

51.  Again, there is a footnote no 14 to paragraph 10 which states:

“The words in square brackets are to be included in the case of a corporate defendant. This notice is not a substitute for the endorsement of a penal notice.”(emphasis added)

52.  The parties’ respective Counsel did not make any references to those footnotes in the relevant forms in PD 11.2 (“Footnotes”).

53.  Mr Poon did not produce any authority to support his submission that the incorporation of A’s Notices in the Orders could be regarded as a substitute for the endorsement of a penal notice.

54.  As held in Funny Electronics, penal notices should be strictly construed.  In my view,  the incorporation of A’s Notices in  the Orders could not be regarded to be substitutes for the endorsement of penal notices, for two reasons:

(i) The Footnotes clearly indicated that they should not be so regarded; and/or

(ii) The wordings in A’s Notices did not incorporate the exact wordings in O45 r 7(4) (a) or (b), and they were not in accordance with the forms set out in paragraph 45/7/6 of HKCP.

55.  I have thus come to the view that there was no endorsement of a penal notice on either of the Orders.

56.  In so far as R1 was concerned, even if A’s Notices were to be regarded as penal notices, such penal notices were in my view   incomplete, as I have mentioned above, they did not follow the wordings in Order 45 7(4) (a) or (b), and was not in accordance with the form set out in paragraph 45/7/6, in particular the words “and liable to process of execution to compel you to obey it” were missing. 

57.  In so far as R3 was concerned, as stated in paragraph 45/7/6 of HKCP and set out earlier, the penal notice should state the name of the director or officer of the body corporate if enforcement proceedings are being sought against that director or officer.  Even if A’s Notices in the Orders were regarded to be penal notices, in my view such penal notices were clearly defective, in that R3 was not  even mentioned or named in A’s Notices, which instead  referred to “any”of the directors of R2.  Even though R3 was the sole director of R2, I am of the view that there is a difference between not being named and actually being named in the Orders, the latter would draw one’s specific attention to the penal notice and would make it clear that the notice was directed to the named person, in particular when R3 was not named as a defendant on the Orders.  In addition, again the words “and liable to process of execution to compel you to obey it” were missing.

58.  In light of the above, I  have come to the view that there had been no penal notices endorsed on the Orders as stipulated in O 45 r 7(4); and in any event, in the case of R1, A’s Notices in the Orders were incomplete, and in the case of R2, A’s Notices were defective.  It is my view that the provisions of O 45 r 7(4) of RHC had not been complied with.

Dispensation of service under Order 45 r 7(6)

59.  O 45 r 7(6) provides for, subject to the conditions therein,   the enforcement of an order requiring a person to abstain from doing an act (negative order) notwithstanding that service has not been effected in accordance with O 45 r 7. 

60.  Chung J in Chou Yi  Feng v Chou Yi Chen and others [2002] HKCFI 1014, HCA 4391/2001, unrep 23.11.02, had distilled from  various authorities in England including the English Court of Appeal case of Davy International Ltd and Others v Tazzyman and Others [1997] 1WLR 1256, and the Hong Kong Court of Appeal authority Excel Noble Development Ltd and Others v Wah Nam Group Ltd and Others, unrep, CACV 910 of 2000 (29.05.01), and summarise the following propositions in respect of O 45 r 7(6) and 7(7)[13]:

(i) O 45 r 7(6) applies to prohibitory orders and the discretion thereunder is only available when the conditions prescribed by it are met;

(ii) O 45 r 7(7) however confers an unfettered discretionary power and can be exercised whenever it is just to do so;

(iii) the old authorities before the changes to the Rules of the Supreme Court in England (made in the mid-1960’s) can no longer be relied upon to fetter the court’s discretion under O45 r 7(7).

61.  Further, Chung J had pointed out that in Davy International Ltd, the English Court of Appeal had described the discretion for dispensing with personal service of an order under O 45 r 7(6) as a “very limited power of dispensation” and can only be exercised according to the “condition prescribed for its exercise”[14].

62.  Mr Fong had also referred to what was said by Ma J, as he then was, in Citybase Property Management Ltd v Kam Kyun Tak (No 1) [2003] 2 HKC 98, namely that it would be an extremely rare exercise of discretion under O 45 r 7(6) for the court to dispense with the requirement of a penal notice and in principle it could not be conceived any circumstances in which it would be right to dispense with such requirement[15].

63.  In Citybase, the court had exercised its discretion to permit the application for contempt to proceed against the 2^nd defendant therein notwithstanding that the order was not personally served on her, because she was present on the occasion when the order was made, and further both the effect and the terms of the order were explained to her and she was given a warning as to the consequences of a failure to comply with the order by the court.

64.  In so far as the Amended Injunction Order was concerned, the orders therein were primarily prohibitory orders against R1 and/or R2.  However, the main orders in the Anton Piller Order against R1 and R2 were for entry and search, delivery up of items and disclosure of information, which were not prohibitory orders.  I am thus of the view that O 45 r 7(6) should not really be applicable in relation to Anton Piller Order.

65.  In any event,  in so far as A’s reliance on O 45 r 7(6), A has to satisfy the court one of  following conditions thereunder:

(i) R1 and R3  had notice of the Orders by being present when the Orders were made; or

(ii) R1 and R3 had notice of the Orders by being notified of the terms of the Orders, whether by telephone, telegram or otherwise.

66.  The Ex Parte Orders were first obtained on 14 May 2012 and it was not disputed that R1, R2, and R3 were not present at that ex parte hearing.  It was further not disputed that they were not present at the inter partes hearing on 18 May 2012, when the Ex Parte Orders were continued on 18 May 2012[16].

67.  R1 and R2 lodged their acknowledgment of service of the writ in the Main Action (“Writ”) on 28 May 2012 through their then solicitors Messrs Johnny KK Leung & Co (“JKKL”).  This was followed by R1 and R2 taking out their first summons for the Ex Parte Orders to be discharged on 7 June 2012 which was later withdrawn but they issued another summons on 15 June 2012 to discharge the Ex Parte Orders and also the continuation order on 18 May 2012 (“Discharge Summons”)[17]. 

68.  It was only on 22 June 2012 that R3 was formally added as the 2^nd defendant in the Main Action.  The Discharge Summons was fixed for hearing on 12 July 2012 for substantive argument.  It was dismissed by DHCJ Saunders and as mentioned earlier, it was at this hearing that the Injunction Order was modified by DHCJ Saunders, resulting in the Amended Injunction Order.

69.  Although R1 and R2 were represented by solicitors and Counsel at the hearing on 12 July 2012, it was Rs’ case that none of them personally attended the hearing.  When this was put to WW, he admitted that he was not clear about this as he himself was not present at that hearing.

70.  Anyway, there was no sufficient evidence produced by A in these proceedings to satisfy this court that R1 and R3 were personally present at the hearing on 12 July 2012.  A was clearly not able to satisfy the condition in O 45 r 7(6) (a).

71.  A’s former solicitor Ms Cho of Messrs Leung & Associates had prepared 3 reports in relation to the carrying out / execution of the Anton Piller Order on R1 and/or  R2  on 15 and 16 May 2012.  Ms Cho had also filed an affirmation of service of documents including the Ex Parte Orders on R1 by leaving the documents at R1’s two addresses, respectively the Harbour Place Address and  the Hong Tak Garden Address on 16 May 2012.  In so far as the 3 reports were concerned, those which concerned R2 were executed (or attempted to be executed)  at the registered address of R2, which was its company secretary’s office (“Bright Way Tower Address”), and the one concerning R1 was executed (or attempted to be executed) at the Harbour Place Address and also the Hong Tak Garden Address.  According to Ms Cho, there was a person who claimed to be living at the Hong Tak Garden Address for about a year, and not knowing who R1 was.

72.  There was a further affirmation by a clerk of Messrs Leung & Associate stating that documents including the 3 Reports had been served on R1 by courier and registered post at the Harbour Place Address and by leaving at the Hong Tak Garden Address on 17 May 2012.

73.  Apart from the above, there seemed to be no further report or affirmation of service filed by Ms Cho or any one in relation to service of the Ex Parte Orders or the Orders on R1.

74.  WW was cross examined at length about service. He himself had said that he had relied on his legal team in relation to the matter of service.  Ms Cho was not called as a witness to give evidence on service on R1 and/or R3.  WW admitted that he himself did not telephone or send a telegram/fax/email to R1 or notified R1 of the terms of the Ex Parte Orders or the Orders. 

75.  As for R3, although WW disagreed with Mr Yu during cross examination that there was never any attempt to serve R3 personally with the Ex Parte Orders or the Orders, there seemed to be no evidence, nor any affirmation of service filed in relation to service on R3, or any attempt of personal service.  There was also no evidence that WW himself had notified R3 of the terms of the Ex Parte Orders or the Orders whether by telephone/telegram/fax/email.

76.  WW had also said he did not know and was not certain whether his then solicitors had notified R1 or R3 of the terms of the Orders by telephone/ telegram/fax/email.

77.  Mr Poon had relied on the “otherwise” limb in O 45 r 7 (6)(b), namely as stated in paragraph 45/7/1 of HKCP, the notification may be by telephone, telegram, fax, email or in such other manner as the court may deem sufficient. (emphasis added).

78.  WW had said he was of firm belief that R1 and R3 were fully aware of and/or notified of the terms, effect and consequences of breach of the Ex Parte Orders/the Orders by the hearing on 12 July 2012 at the latest, if not earlier, and he had given detailed evidence of what his belief was based on.

79.  However, unlike Citybase where Chung J had himself explained both the effect and the terms of the order to the 2^nd defendant therein at a hearing, and had further warned the 2^nd defendant as to the consequences of a failure to comply with the order (in other words, a penal notice)[18],  there was no direct evidence that R1 and R3 had been notified of the terms of the Ex Parte Orders / the Orders and the consequences of failure to comply, whether by telephone, telegram, fax, email or in any other manner.

80.  WW’s belief that R1 and R3 had been notified was based primarily on the history of proceedings in the Main Action, the numerous steps undertaken by the Rs themselves and R1’s / R3’s own affirmation/s in the Main Action.  In my view, this would not be sufficient to satisfy the condition laid down by O 45 r 7(6) (b).

81.  Having considered the above, I am not satisfied that either of the conditions in O 45 r 7(6) had been satisfied, and I decline to exercise my discretion under O 45 r 7(6) for dispensation of personal service of the Orders on R1 and R3.

Dispensation of service under O 45 r 7(7)

82.  Mr Fong relied on Chou Yi Feng and submitted that when applying to dispense with the service of the orders as required under the RHC under O 45 r 7(7), P1 had the burden to prove beyond reasonable doubt that R1 (and R3) were aware of[19]:

(i) The Orders were made;

(ii) the terms of the Orders;

(iii) the nature of the Orders, namely, they were orders of the court which should be obeyed;

(iv) the consequence of not obeying the Orders.

83.  Mr Poon referred the court to Lucky Sun Development Ltd & Anor v Gainsmate International Ltd & Ors [2007] 4 HKC 301.

84.  In Lucky Sun, the plaintiffs had obtained an injunction against the 3 defendants, the 1^st and 2^nd being shareholders and directors of the 3^rd defendant, requiring the defendants to secure release of the shares in a company which the 3^rd defendant had tendered as security in a PRC legal action.  The plaintiffs tried to effect personal service on the defendants but failed.  Finally, one day, when the plaintiffs’ solicitors and process server went again to the office of the defendants, they met the respondent who was the 3^rd defendant’s company secretary, and she confirmed receipt of the previous letters addressed to her and the 3^rd defendant enclosing the sealed copy of the injunction order with penal notice and that she had passed the documents to lawyers to handle.

85.  As the defendants took no step to release the shares, ex parte leave was granted to the plaintiffs to issue a writ of sequestration of defendants’ and respondent’s properties, and further to apply for an order of committal against the respondent.  Personal service of the order and the notice of motion was dispensed with, and the respondent had applied to set aside the orders.

86.  DHCJ Louis Chan, as he then was, held that the order dispensing with service with penal notice under O 45 r 7(7) was “an extraordinary order”, and the learned Judge then went on to state, referring to what was said by Madam Justice Kwan, as she then was, in Lau Yee Ching v Wong Tak Kwong & Ors [2005] HKCU 1398 (HCCW 807/2004) that:

“It should only be made if the plaintiff can satisfy the court three requirements and that the standard of proof is beyond reasonable doubt. The three requirements are that the respondent (i) knew of the terms of the order; (ii) was well aware of the consequences of disobedience; and (iii) was aware of the grounds relied on as a breach with sufficient particularity to be able to answer the charge.”[20]

87.  It was not disputed between the parties that given the power of the court to dispense with service the order on which the penal notice was to be endorsed, it would follow that as a matter of discretion the court was similarly empowered to dispense with the requirement of a penal notice, or, more precisely, to proceed to consider a proper notice of application to commit notwithstanding the absence of a penal notice on the order/judgment itself, as said by Judge LJ in Jolly v Hull [2000] 2 FLR 69. 

88.  As pointed out by Mr Fong, Judge LJ had, however, expressed that in principle the jurisdiction should not be exercised too readily, lest what should be a dispensing power for use in exceptional cases may gradually undermine the express requirements of O 29 r 1(3) of the English County Court Rules which provided that an order enforceable by committal should be endorsed with or incorporate a penal notice.

89.  The above sentiments were agreed by the Hong Kong Court of Appeal in AXA China Region Insurance Co Ltd v Li Yu Ping, Ellen [2002] 3 HKC 339.

90.  Although the court has an unfettered discretionary power under O 45 r 7(7) and can be exercised whenever it is just to do so, I accept that such power should not be exercised readily, and  following the approach in Lau Yee Ching and Lucky Sun, A has to satisfy this court beyond reasonable doubt of the following requirements:

(i) R1 and R3 knew of the terms of the Orders;

(ii) R1 and R3 were well aware of the consequences of disobedience;

(iii) R1 and R3 were aware of the grounds relied on as a breach with sufficient particularity to be able to answer the charge[21].

91.  As I have mentioned earlier, WW’s belief that R1 and R3 knew of the terms and consequences of breach of the Orders and that R1 and R3 had been notified of the same was based primarily on the history of proceedings in the Main Action, in particular, the numerous steps undertaken by the Rs themselves in the Main Action.

Whether Personal Service on R1 should be dispensed with

(a)  Whether R1 knew of the terms of the Orders

92.  As mentioned earlier, A’s former solicitors said they served the Ex Parte Orders on R1 at 2 addresses on 16 and 17 May 2012.  A’s own evidence indicated that R1 was not living at Hong Tak Garden Address at the time of service.  As for the Harbour Place Address, the documents including the Ex Parte Orders were said to have been served there by A’s former solicitors by leaving them on 16 May 2012 outside the main door.  Then, on 17 May 2012, the 3 Reports and covering letter were sent to R1 at the Harbour Place Address by courier and registered post but it was on the same day that the service clerk of Messrs Leung & Associate filed an affirmation of service to say that they had not been returned up to the moment of making the affirmation.  It was not clear whether those documents had been returned or not, after 17 May 2012.

93.  There was no evidence from A as to why documents were being served on R1 at the Harbour Place Address or the Hong Tak Garden Address.  As seen from the affirmations filed by R1, he gave a different residential address therein.

94.  However, on 21 May 2012, R3 had issued a letter on behalf of R2 to HSBC enquiring about the “frozen status” of R2’s bank account(s) (the “HSBC Letter”)[22].  Mr Poon had relied on the HSBC Letter and the freezing of R2’s HSBC account to show that R1 and R3 had notice of the Ex Parte Orders by then.

95.  The HSBC Letter was produced by WW to show that R3 had throughout all material times been in charge of the business and affairs of R2 being its sole director[23].  R1 himself had said in his 2^nd affirmation filed in the Main Action (“WX2-797”)[24] that A’s solicitors had served copies of the Ex Parte Orders on HSBC where R2 held a bank account even though the Ex Parte Orders were not “freezing” orders, and that this had led to R2’s bank account at HSBC being “frozen” for about 2 weeks, but WX2-797 was filed much later, on 7 July 2012.

96.  Although the HSBC Letter would indicate that Rs could have been alerted that something had happened to affect the operation of R2’s bank account, I do not think there was sufficient evidence in the HSBC Letter to indicate that R1, R2 or R3 had possession of copies of the Ex Parte Orders, or were aware of the terms of the Ex Parte Orders, at the time when the HSBC Letter was sent out.

97.  R1 and R2 then filed their acknowledgment of service of the Writ through JKKL on 28 May 2012[25].

98.  Mr Poon pointed out that the Writ was issued on the same day of the Ex Parte Orders and that the bundle of documents served on R1 and R2 on 15 and 16 May 2012 consisted of 7 documents among which was the Writ and the Ex Parte Orders, and the inter-partes summons, 2 affirmations of WW, of 14 and 15 May 2012, and A’s skeleton submissions for the Ex Parte Orders together with the list of authorities (“7 Documents”).   Mr Poon argued that this meant that upon receiving the Writ, R1 and R2 should also have received all the others of the 7 Documents, including Ex Parte Orders.

99.  Further, Mr Poon submitted that prior to the filing of the acknowledgment of service through their solicitors, R1 and R3 (as the sole shareholder and director of R2) must have entered into retainers to formally engage the professional services of their solicitors and must also have furnished their solicitors with the case papers, including the Ex Parte Orders and received advice on the same before instructing solicitors to represent them in the Main Action.

100.  As mentioned earlier, R1 and R2 had issued an earlier summons prior to the Discharge Summons, and this was supported by R1’s 1^st affirmation filed in the Main Action of 7 June 2012 (“WX1-797”)[26]. 

101.  In WX1-797, R1 said he was authorized by R2 to make the affirmation on its behalf.  R1 had complained in this affirmation that he and R2 were not served with any of the papers concerning the Ex Parte Orders, and further he and R2’s directors were outside jurisdiction at the material times.  However, R1 had referred to the Ex Parte Orders in WX1-797 and I accept that even if he had not been properly served, he should be in possession of the Ex Parte Orders at this juncture to be able to refer to them in WX1-797[27].

102.  WX1-797 contained 25 pages in substance.  R1 said he had read WW’s affirmation filed in support of the Ex Parte Order (which was in English), and there was no mention of any one interpreting the contents of WW’s affirmation to him.   

103.  Whether there was any one who had interpreted the contents of WW’s affirmation to him or not, in WX1-797, R1 had set out therein detailed responses to almost each and every paragraph of WW’s affirmation filed in support of the Ex Parte Orders.   In particular, under the heading of “No Risk of Destruction of Important Evidence”, R1 pointed that as A’s application for injunction was only mounted on 18 May 2012 (sic), and there was no explanation as to A’s total inactivity for close to 6 months, and that had he been guilty of A’s allegations, any reasonable man would have considered taking legal action long ago[28].  Further under the heading “Injunctions Necessary to Safeguard the Plaintiff’s Interest”, R1 had said that A had no business and there was simply no interest to be safeguarded.

104.  I accept that R1 must have given detailed instructions to JKKL for the preparation of WX1-797, and he should be in possession of WW’s affirmation of 14 May 2012 in order to give such instructions.

105.  A directions hearing for the Discharge Summons took place on 15 June 2012[29].  It was at this hearing that a fortification order was made of the undertakings as to damages, and it was made at the request of Counsel then appearing for R1 and R2.  Mr Poon argued that R1’s and R2’s Counsel could not have done so without express instructions from R1 and R3.  As pointed out by Mr Poon, A’s and WW’s undertakings as to damages were contained in the Ex Parte Orders.  Mr Poon therefore submitted that R1 and R3 must have knowledge of the terms therein prior to instructing counsel to seek a fortification order.

106.  R3 was joined as the 3^rd defendant on 22 June 2012 in the Main Action[30].

107.  R1 filed WX2-797 in support of the Discharge Summons[31].  R1 confirmed in WX2-797 that the facts and matters deposed therein were partly “derived from the documents available to” him[32].  He did not, however, specify what those documents were.  As mentioned earlier, it was in this affirmation that R1 had complained about A’s solicitors serving the Injunction Order on HSBC[33].  R1 had also referred to WW being included in paragraph 1 of the Anton Piller Order as one of the persons allowed to enter and search[34].  It would thus appear from this affirmation that R1 had perused and scrutinized each and every aspect of the Anton Piller Order, or some one had taken him through it meticulously.

108.  R1 had made reference in WX2-797 to the Clients List[35].  In fact, he went through the Clients List in some detail in (i) identifying 14 companies therein as PRC companies as opposed to “overseas clients” and (ii) spotting 2 companies as suppliers rather than clients[36]. 

109.  In WX2-797, R1 had further specifically complained, among other things, that:

(i) A obtained the “Injunction” with ulterior motives;

(ii) A had failed to make full and frank disclosure;

(iii) A had failed to demonstrate that the list of clients annexed to the “Injunction” was in fact its clients;

(iv) A had failed to demonstrate why the “Injunction” was necessary and why damages alone would not be an adequate remedy;

110.  As pointed out by Mr Poon, R1 had expressly admitted in WX2-797 to being served with the “Injunction” a number of times[37].  Mr Fong complained that A had only produced R1’s affirmations in the Main Action, but not those affirmations of WW to which R1 was replying to, and that when R1 referred to being served with the  “Injunction”, he was only referring to WW’s affirmation he was replying to, and not the Ex Parte Orders. However, R1 had clearly referred to the Clients List attached to the Injunction Order, and I am satisfied beyond reasonable doubt that when R1 was referring to “Injunction”, he had meant the Injunction Order, and not merely WW’s supporting affirmation thereof.

111.  R1 had also alleged in WX2-797 that both he and R2 had been “gravely injured by the continuation of the Injunction”, citing substantial trading losses and even future losses[38]. 

112.  As mentioned earlier, on 12 July 2012, upon the dismissal of the Discharge Summons, DHCJ Saunders had ordered for the Injunction Order to be varied – culminating in the Amended Injunction Order[39].

113.  The modifications/variations to Injunction Order were made pursuant to submissions from Counsel acting for R1 and R2.  They were in connection with paragraphs 1-2 of the Injunction Order, in that these paragraphs were varied for R1 and R2 to continue to obtain raw materials from 2 suppliers named in the Client Lists as A’s clients, and R1 had deposed to this in WX2-797[40].  

114.  Thereafter, R1 filed a further affirmation in the Main Action on 19 July 2012 on behalf of both himself and R2 in compliance with the order of the court (“WX3-797”)[41], in which he referred to the Orders and asserted that he and the R2 had complied with paragraph 5 of the Amended Injunction Order. 

115.  Then, on 26 July 2012, the R1 and R2 sought leave to appeal against the dismissal of the Discharge Summons[42].  The next day, 27 July 2012, R1 filed a Notice to Act in Person[43].  On 31 August 2012, JKKL (the same solicitors’ firm which acted for R1 and R2) filed a Notice to Act for R3 in the Main Action[44].  R3 eventually filed an acknowledgment of service through JKKL on 1 September 2012[45].

116.  This was followed by R2 and R3 issuing an application to strike out the Main Action on lack of authority to sue on the part of A.  On 12 September 2012, while acting in person, R1 took out an identical application to that of R2 and R3, to strike out the Main Action and also for the discharge of the Orders[46].  He then filed his 4^th affirmation in the Main Action in Chinese to support his application (“WX4-797”)[47].  In this 4^th affirmation, he had confirmed that the contents of HY1-797 were all true and accurate[48].  As pointed out by Mr Poon, this would mean he agreed that with R3’s above assertion of what R1 had told her, and that he had received “the Injunction papers”. 

117.  Having considered the above various steps R1 took as outlined above, I am satisfied beyond reasonable doubt that latest by 27 July 2012 when R1 filed the notice to act in person, namely the day after R1 (and R2) sought leave to appeal against the order of DHCJ Saunders on 12 July 2012, R1 was in possession of the Orders, and that he clearly knew that the Orders were made and he knew of the terms of the Orders.

(b) Whether R1 was well aware of the consequences of disobedience

118.  A had also relied on the above various procedural steps to say that R1 was well aware of the consequences of disobedience, and that R1 was  legally represented until he filed a notice to act in person on 27 July 2012.

119.  Mr Fong referred the court to what Chung J had said in Chou Yi Feng, that although one could reasonably expect legal practitioners in Hong Kong to have informed their clients of the terms and nature of an injunction order and the consequences of disobedience, Chung J was of the view that a reasonable expectation would not meet the criminal standard of proof, which was that the disputed matter had been proved beyond reasonable doubt[49].

120.  I agree that A could not simply rely on the fact that R1 had been legally represented and that one could reasonably expect his solicitors had informed R1 of the nature of the Orders and the consequence of disobedience.

121.  WW had, however, given evidence during the trial as to R1’s command of English.  According to WW, R1 attended 華南理工大學 (South China University of Technology), a top ranked university in the PRC.  WW had said due to R1’s outstanding academic performance (including the subject of English) he was exempted from taking the Annual National College Entrance Examination (高考).  WW said both he and R1 started studying English at primary school but R1 had made extensive preparations for to enhance his English ability in order to sit for TOEFL and GRE examinations as R1 had expressed a wish to study overseas.  Further, R1 had also applied for postgraduate studies, prepared for and took the relevant entrance examinations which covered the subject of English language, although he did not get accepted.

122.  WW’s evidence was that R1 was principally in charge of liaising with clients at work (including Apple) and had used English as a medium in emailing clients.  Further, whenever Apple had representatives (who were / are predominantly English-speaking westerners) visiting, R1 would be the one to play host and to receive them.

123.  Mr Fong had put it to WW that R1 had never expressed any wish to study overseas, nor did R1 ever take any course to enhance his English ability.  WW had disagreed.

124.  R1 chose not to give evidence.  Although WW seemed to play down his own English ability in raising R1’s, I see no reason to disbelieve WWs’ evidence.  In fact, whether R1 had taken any courses to enhance his English ability or whether R1 had expressed any wish to study abroad or not, the most telling evidence would be those communications in the Emails between R1 and various personnel at Apple.

125.  Although A’s Notices in the Orders were in my view incomplete as penal notices, such notices had contained plain English words such as “guilty of contempt”, “sent to prison” or “fined”, and “assets seized”. 

126.  Having considered the contents of some of the Emails between R1 and various personnel at Apple, I am satisfied beyond reasonable doubt that R1 should able to comprehend the nature and the terms of the Orders and A’s Notices, and the consequences of disobeying the Orders, with or without interpretation.  That R1 had filed very detailed and lengthy affirmations dealing with WW’s allegations in support of his applications to discharge the Orders and further to seek leave to appeal against DHCJ Saunder’s order further supported my conclusion.

127.  Further, that R1 knew of the consequences of disobeying the Orders could also been supported by R1’s WX1-2946.  In this affirmation, he had asked the court to only penalize him, and not R3, if the court were to come to the view that Rs were in breach of the Orders and a custodial sentence would be imposed, as R3 had to take care of their child and her 80 year old grandfather in Shenzhen[50].  Although WX1-2946 was only filed after the Ex Parte Leave was granted, R1 had never said therein that he was not aware of the consequences of disobeying the Orders.

128.  Having considered all the above, I am satisfied beyond reasonable doubt that R1 was well aware of the consequence of disobedience of the Orders.

(c)  Was R1 aware of the grounds relied on as a breach with sufficient particularity to be able to answer the charge

129.  The grounds A relied on to allege breach of the Orders had been set out in detail and the particulars of occurrences showing breaches by R1 and R2 had been set out in detail in both the Amended OS and the Amended Statement.

130.  Although R1 was acting in person when the originating summons was issued, he had filed WX1-2946 in person and further instructed solicitors and Counsel after the stay application was dismissed.  I am satisfied beyond reasonable doubt that R1 was fully aware of the grounds relied on as a breach and was able to answer the charge.

Exercise of discretion

131.  As I have mentioned earlier, the Hong Kong Court of Appeal in the AXA case has endorsed the sentiments of Judge LJ in Jolly v Hull and has cautioned that the power to dispense with service is one that should not be exercised too readily, lest what should be a dispensing power for use in exceptional cases may gradually undermine the express requirements of O 45 r 7(2) and (4).

132.  Mr Poon had submitted that there was a divergence of approach in Chou Yi Feng and the case of Lucky Sun. Mr Fong said there was no divergence and that the circumstances in the two cases were different, namely in the latter, DHCJ L Chan had found that, among other things, the company secretary was evading service[51], but there was no such evidence in Chou Yi Feng.   In fact, the learned Judge in Lucky Sun had distinguished Chou Yi Feng in that there was no direct evidence of service of the order on the defendants or no direct evidence of the defendants’ knowledge of the order in the latter case[52].  I do not think there was any real divergence and accept that the circumstances in the two cases were different. 

133.  In the present case, not only had R1 applied for the Orders to be discharged and the Main Action to be struck out for lack of authority and further applied for leave to appeal, R1 had himself made no less than 4 affirmations in the Main Action, and he had admitted to having been served with the Orders in WX 2-797.  I have also found that his English ability is such that he could comprehend the terms and nature of Orders, and the consequence of disobedience of the Orders.  As indicated earlier, I am satisfied beyond reasonable doubt that the 3 conditions in Lucky Sun for dispensation of personal service on R1 under O 45 r 7(7) have been proved.  Having considered all the circumstances, including various procedural steps taken by R1, his meticulous affirmations, I am satisfied beyond reasonable doubt that there are exceptional circumstances in so far as R1 was concerned, and I am prepared to grant retrospective leave to A under O 45 r 7(7) to dispense with personal service of the Orders (with no endorsement of penal notices) on R1. 

Whether Personal Service on R3 should be dispensed with

(a)  Whether R3 knew of the terms of the Orders

134.  As mentioned earlier, there was no dispute that R2 was served at its registered office in Hong Kong, and R3 was its sole director and shareholder at all material times.

135.  It was WW’s evidence that his former solicitors had told him that they attempted personal service on R3 but not successful. However, there seemed to be no affirmation of service filed in the Main Action in relation to service on R3, whether attempts or otherwise.

136.  It was not disputed that R3 signed the HSBC Letter on behalf of R2.  As I have said earlier, there was nothing in that letter to indicate that R3 had possession of copies of the Ex Parte Orders at the time of sending the HSBC Letter or was aware of the terms of the Ex Parte Orders.

137.  A’s belief that R3 had personal knowledge of the Orders was based on mainly:

(i) R3’s intimate relationship with R1, being his wife;

(ii) The various legal steps R2 and R3 had taken in the Main Action, and also R3 was legally represented throughout;

(iii) R1 had mentioned in his affirmation that if some one had to be penalized in these proceedings, it should be just him, and R3 should not be penalized[53].

138.  Mr Poon submitted that R2’s solicitors could not have lodged the acknowledgment of service of the Writ on behalf of R2 on 28 May 2012 without having obtained instructions from its sole director R3, or put it another way, could not have lodged the acknowledgment of service without R3’s knowledge.  Further, R2 could not have instructed solicitors to take out the Discharge Summons or the earlier summons without instructions from R3 who was the only person who could have given instructions to solicitors to take out the Discharge Summons or the earlier summons on behalf of R2.

139.  The affirmation in support of the Discharge Summons was, however, filed by R1, namely WX1-797, and as said earlier, was a detailed and meticulous affirmation.  His affirmation in reply to WW’s affirmation WX2-797 was similarly detailed and meticulous.  R1 had said in WX1-797 and WX2-797, that he had been duly authorized by R2 to make those affirmations on behalf of R2.  As for WX3-797, R1 had said he made that affirmation also on behalf of R2 (if relevant). 

140.  Mr Poon submitted that as R3 was R2’s only director and shareholder, she was the only person who could authorize R1 to make those detailed affirmations on behalf of R2.  In my view, this could, however, be a broad authorization, and I am not satisfied that simply by authorizing or relying on her husband R1 to make an affirmation on behalf of R2 would necessarily mean that R3 had herself read or understood all the terms of the Orders, or the affirmations.

141.  R3’s own acknowledgement of service was eventually filed on 1 September 2012 through JKKL.  Since then R3 herself had all along been legally represented. Mr Yu had, however, also relied on what Chung J had said in Chou Yi Feng, and submitted that although one could reasonably expect R3’s solicitors to have informed R3 of the terms and nature of an injunction order and the consequences of disobedience, a reasonable expectation would not be sufficient to meet the criminal standard of proof[54].

142.  Compared to R1, R3 had filed relatively fewer affirmations in the Main Action and in the present proceedings, in so far as I could see. 

143.  I have mentioned earlier that R2 and R3 took out an application on 10 September 2012, to strike out the Main Action for want of authority to sue and R2 applied again for the discharge of the Orders[55].  R3 filed an affirmation evidence in support of this summons (“HY1-797”)[56], and it appeared to be the 1^st affirmation she made in the Main Action, or as seen in the Bundle D.

144.  In HY1-797, she had referred to having been advised by[57], informed by[58], and / or otherwise communicated[59] with R1 in respect of various matters relating to the Main Action.

145.  R1 had taken out an identical summons as R2 and R3 to strike out the Main Action, and Mr Poon had submitted that the fact that a summons of identical effect was also taken out by the R1 would serve to reinforce the A’s contention that R1 and R3 (not least as a married couple) must have all along been in close communications regarding the Main Action, including the Orders.

146.  In HY1-797, the Orders were mentioned and she also asserted that the contents therein were partly “derived by me from documents relevant to this action” [60].  She had asserted that the R1 informed her that R1 first learnt of those proceedings after he had received the “Injunction papers”[61].

147.  Having considered the procedural steps taken by R3, after she acknowledged service of the Writ, I am satisfied beyond reasonable doubt that latest by 5 September 2012, the date she made HY1-797, R3 should have at least knowledge of the terms of the Orders.

(b) Whether R3 was well aware of the consequences of disobedience

148.  Having said the above, this in my view did not necessarily mean she knew of the consequences of disobedience of the Orders.

149.  Mr Poon had urged the court to follow Lucky Sun, when the then DHCJ L Chan had found that the company secretary was aware of the consequences of disobeying the injunction order, namely that she would be exposed to committal for contempt of court, in her “swift action” after being served a sealed copy of the injunction order with a penal notice requiring her and the 3^rd defendant to perform the acts stated in the order, including passing the documents to her lawyers to handle[62].

150.  The circumstances of the present case were different from Lucky Sun.  There was no sufficient evidence that R3 was evading service and R3 was never personally served with the Orders.  

151.  WW had said that in PRC in general, students would start learning English in lower levels of secondary school education.  He said that he had heard that R3 had received post secondary / tertiary education. When Mr Yu put it to him that R3 was illiterate in English, WW’s answer was he could not confirm this since from what he had observed in court, R3 was able to read some English documents quickly and came up with responses to questions. WW had also said that R3 had participated in playing host to Apple’s representatives, and had commented that R3 ought to have “basic English abilities”.

152.  Compared to his evidence about R1’s level of English, I find WW’s evidence about R3’s level of English was a lot more vague and uncertain.  There were no emails or other communications in English with staff at Apple involving R3 at all.  I am unable to say that R3’s English ability is of such a level that she could read and understand all the terms in the Orders or A’s Notices, on her own.

153.  I have found earlier that there were no penal notices endorsed on the Orders, or alternatively, A’s Notices were defective in so far as R3 was concerned, as R3 was not mentioned or named in any of A’s Notices, even though A’s Notices had referred to “any of the directors” of R2 might be sent to prison or fined or assets seized.   Even though one might reasonably expect R3’s lawyers to have informed her of the nature of the Orders and the consequences of disobedience, as I have said, a reasonable expectation would not meet the criminal standard of proof.

154.  R1 had said in WX1-2946 that if some one had to be penalized in these proceedings, it should be just him and not R3.  I have found R1 was aware of the consequences of disobedience, and one might reasonably expect R1 to have informed his wife of consequences of disobedience.  Again, I am of the view that a reasonable expectation would not meet the criminal standard of proof.

155.  Having considered the above, I am unable to say that I am satisfied beyond reasonable doubt that R3 was fully aware of the nature of the Orders and consequences of disobedience of the Orders prior to the institution of these proceedings.

(c)  Was R3 aware of the grounds relied on as a breach with sufficient particularity to be able to answer the charge

156.  As mentioned earlier, On 3 December 2014, A was granted leave by M Chan J in these proceedings to amend the Order 52 Statement and also to amend the OS, and further service of the Amended Statement and Amended OS on Rs were dispensed with by the learned Judge.  R3 was represented by Counsel at this hearing.  I am satisfied beyond reasonable doubt that latest by this hearing, R3 was aware of the grounds relied on as a breach with sufficient particularity to be able to answer the charge.

Exercise of Discretion

157.  To summarise, in light of what I have said earlier, I am not satisfied beyond reasonable doubt that R3 was aware of the nature of the Orders and consequences of disobeying the Orders, and there being no endorsement of penal notices in the Orders, and/or A’s Notices being defective, I do not find that there were exceptional circumstances in relation to R3 such that I should exercise my discretion under O 45 r 7(7).   I am thus not prepared to grant leave to A to dispense with personal service of the Orders (with no endorsement of penal notice) on R3.

158.  As a consequence of my decision not to grant leave to A to dispense with personal service of the Orders on R3, the committal proceedings against R3 will fail.  I will nevertheless consider the other issues raised by Mr Yu on behalf of R2 and R3.

Admissibility of the Apple Documents

159.  Rs contended that the Apple Documents ought not be admissible in these proceedings for the following reasons:

(i) The Apple Documents were subject to an implied undertaking to the court at all times, and there was no application was made by A to discharge, modify or release it from those implied undertakings prior to the commencement of contempt proceedings;

(ii) The Apple Documents were also subject to an express undertaking to Apple and the court at all material times, and there was no application was made by A to discharge, modify or release it from those express undertakings prior to the commencement of contempt proceedings;

(iii) It was unfair to Rs in admitting the Apple Documents for the purpose of the contempt proceedings as Rs were not able to cross-examine the makers or authors of the Apple Documents.

Whether A was in breach of the implied undertaking and/or express undertaking

160.  Mr Fong had referred the court to the case of Alterskye v Scott [1948] 1 All ER 469 and also  Harman v Secretary of State for the Home Department [1983] AC 280 HL in relation to the common law implied undertaking.

161.  The court was also referred to Crest Homes Plc v Marks [1987] 1 AC 829.  Mr Fong and Mr Yu both submitted that if a party wanted to use documents obtained on discovery for any other use, he must obtain leave from the court for the implied undertaking to be released or modified by the court, and that Crest Homes was adopted by our Court of Final Appeal in Secretary of Justice v Florence Tsang Chiu Wing and Others [2014] HKCFA 94; (2014) 17 HKCFAR 739; [2014] 6 HKC 285; FACV 6/2014 (6 November 2014)[63].

162.  Mr Justice Ribeiro PJ had said in Florence Tsang of the disputed documents therein:

“22. However, that did not mean that W was free to use those documents as she wished. It has long been established that a party who obtains documents on discovery gives an implied undertaking to the Court ‘that he will make use of them only for the purposes of that action, and no other purpose.’[19] In Crest Homes PLC v Marks,[20] Lord Oliver of Aylmerton, speaking in the context of materials obtained by solicitors in Anton Piller raids, explained the scope of the rule in the following terms:

‘It is clearly established and has recently been affirmed in this House that a solicitor who, in the course of discovery in an action, obtains possession of copies of documents belonging to his client's adversary gives an implied undertaking to the court not to use that material nor to allow it to be used for any purpose other than the proper conduct of that action on behalf of his client: see Home Office v Harman[1983] 1 AC 280. It must not be used for any ‘collateral or ulterior’ purpose, to use the words of Jenkins J in Alterskye v Scott[1948] 1 All ER 469, approved and adopted by Lord Diplock in Harman's case, at p 302. Thus, for instance, to use a document obtained on discovery in one action as the foundation for a claim in a different and wholly unrelated proceeding would be a clear breach of the implied undertaking: see Riddick v Thames Board Mills Ltd[1977] QB 881. It has recently been held by Scott J in Sybron Corporation v Barclays Bank Plc[1985] Ch 299 - and this must, in my judgment, clearly be right - that the implied undertaking applies not merely to the documents discovered themselves but also to information derived from those documents whether it be embodied in a copy or stored in the mind. But the implied undertaking is one which is given to the court ordering discovery and it is clear and is not disputed by the appellants that it can, in appropriate circumstances, be released or modified by the court.’

23. Where release from the undertaking is sought, it is for the person who obtained the documents ‘to demonstrate cogent and persuasive reasons why it should be released.’[21] Each case turns on its own facts and no general principle can be formulated beyond stating: ‘…… that the court will not release or modify the implied undertaking given on discovery save in special circumstances and where the release or modification will not occasion injustice to the person giving discovery.’[22]” (emphasis added )

163.  Mr Poon did not dispute the general legal principles governing the implied undertaking as affirmed above by CFA.  He had however, relied on comments made by Lord Oliver of Aylmerton in Crest Homes in submitting that there it was not necessary for A to seek leave to use the Apple Documents in the Main Action prior to the issue of these committal proceedings.

164.  There were 2 actions involved in Crest Homes, one in 1984 and one in 1985, issued by the plaintiff s against the defendants over breach of copyright and the plaintiff had obtained an Anton Piller order in each of the actions.  On execution of the 1985 order, a number of allegedly infringing drawings were discovered which should have disclosed pursuant to the 1984 order.  The plaintiff applied to the court for leave to use the documents obtained in the execution of the 1985 order for the purpose of considering taking proceedings for contempt of court in respect of the 1984 order.  The judge refused the application.  The plaintiff appealed.

165.  On appeal, Nourse LJ had considered the then s 72 of the then Supreme Court Act 1981 in relation to “Withdrawal of privilege against incrimination of self or spouse in certain proceedings” and he came to the view that based on the construction of s 72,  that the 1984 and 1985 actions were no doubt civil proceedings which fell within s72(2) (a), and that he went on to say, that both on principle and on the true construction of subsections in s 72, it seemed clear that proceedings for contempt were to be treated as separate proceedings[64].  As pointed out by Mr Poon, it was thus in that context that Nourse LJ said that proceedings for contempt mere to be treated as separate proceedings.

166.  The Court of Appeal allowed the plaintiff’s appeal and allowed the plaintiff to use the documents obtained on the execution of the 1985 order for the purpose of considering and if so advised taking proceedings for contempt of court in respect of the 1984 order. The defendants’ appeal to the House of Lords was later dismissed.

167.  Mr Poon had, however, relied on  the following statement made  by Lord Oliver  in the course of his judgment and submitted that it was not necessary for A to obtain prior leave to use the Apple Documents in these contempt proceedings : -

“It has been submitted that proceedings for contempt of court are always to be regarded, for the purpose of the implied undertaking on discovery, as “collateral” to the action in which they are launched, so that even if the 1985 order had been made in the 1984 action it would still have been necessary to seek the leave for the court to use the material thus discovered for the purposes of the motion for contempt in that action. My Lords, I find myself quite unable to accept that submission. The proper policing and enforcement or observance of orders made and undertakings given to the court in an action are, in my judgment, as much an integral part of the action as any other step taken by a plaintiff in the proper prosecution of his claim. The normal procedure where the contempt complained of is that of a party to the action is to apply for committal by motion in that action as an incidental step in the action. There is, in my judgment, nothing “collateral” or “alien” about enforcement of the court’s order in the action in which discovery is obtained and I do not entertain any doubt at all that documents disclosed on discovery in the action can perfectly properly be used for the purpose of taking such a step without in any way infringing the implied undertaking and without the necessity of obtaining the prior leave of the court[65].” (emphasis added)

168.  In reply, Mr Fong had, however, referred to the English Court of Appeal case Bourns Inc v Raychem Corporation (No 2 [2000] Fleet Street Reports 841. 

169.  The facts of the case of Bourns were rather convoluted. There were various proceedings launched by the parties in both American Courts and the English Courts.  In England, proceedings first commenced in May 1996 when the claimant Bourns petitioned the High Court to revoke Raychem’s patents which was successful and in the course of taxation of costs in favour of Bourns, certain documents were disclosed by Bourns, and a dispute arose as to whether the taxation documents could be used by Raychem for collateral purposes.  Laddie J granted Bourns the injunctive relief sought, restraining use of the taxation documents outside the taxation proceedings (November 1998 Order).

170.  Then after November 1998, Raychem in US proceedings filed a “motion to compel” (Motion to Compel), to compel Bourns to give further discovery, and it later appeared that there was some use by the Raychem and its American attorneys, the 2^nd respondent, of the taxation documents in breach of the November 1998 Order.  This was later followed by a notice of motion issued by Bourns in England (Anti-Suit Motion), seeking an injunction to restrain Raychem from prosecuting the Motion to Compel.

171.  Before the hearing of the Anti-Suit Motion, a preliminary dispute arose between the parties concerning an exhibit which the respondents wished to use to resist Bourn’s Anti-Suit Motion.  The exhibit contained the Motion to Compel and the documents filed therewith in the American proceedings.

172.  Pumfrey J indicated at a directions hearing that Raychem had the choice of either proceeding without the exhibit in which case adverse inferences could be drawn, or it could disclose the exhibit to Bourn’s legal representative but subject to an undertaking given by them not to use the exhibit outside the Anti-Suit Motion without the Raychem’s consent or leave of court.  The respondents opted for the second alternative.  Counsel then appearing for Bourns gave the undertaking at the hearing which was later confirmed in correspondence between solicitors[66].

173.  The Anti-Suit Motion was subsequently heard by Pumfrey J and, among the issues considered, was whether Raychem had breached the November 1988 Order, and Pumfrey J declared that the respondents had made use of information in breach of the November 1998 Order in advancing the Raychem’s Motion to Compel, but held for reasons stated that it was not appropriate to grant the injunctions.

174.  Subsequent thereto, Bourns brought an application before Laddie J for permission to use the exhibit disclosed in possible contempt proceedings against the respondents. Bourns had argued before Laddie J that the contempt proceedings were essentially part and parcel of the proceedings which resulted in the November 1998 Order.  Laddie J  dismissed Bourn’s application and held that because Bourns  had initially accepted that the exhibit could not be used for any purpose other than for the Anti-Suit Motion, the onus was on Bourns to justify its release from the undertaking, and that it was important that a party wishing to bring contempt proceedings should do so with reasonable speed, in that the contempt proceedings could have brought at the same time as the earlier application, and Pumfrey J who heard that application was under the impression that Bourns had elected not to bring contempt proceedings, and Bourns did not dispel that impression[67].

175.  The parties had proceeded before Laddie J that leave would be required for Bourns to use the exhibit in contempt proceedings. On appeal, Bourns’ Counsel then advanced a new argument that, relying on Lord Oliver’s passage in Crest Homes quoted earlier, no leave was required for Bourns to use the exhibit in contempt proceedings.

176.  Gibson LJ, who gave the leading judgment in the Court of Appeal, found this argument unsustainable in the light of the fact that, from the outset of the directions hearing before Pumfrey J, Bourns’ then Counsel volunteered to give an undertaking not to use the material other than for the purposes of the Anti-Suit Motion[68].  Gibson J had also said that counsel appearing for the respondents at the directions hearing before Pumfrey J had expressed the respondents’ concern that Bourns would in due course seek to use the material for contempt proceedings, and Pumfrey J had said that the best the respondents could hope for was an undertaking from Bourns that the material was not to be used without leave except in the context of the Anti-Suit Motion, and that he could not shut Bourns out from making an application to use the material in support of an application to commit if that was appropriate. 

177.  Gibson J had further said that because Bournes volunteered the undertaking that the material would be used only for the Anti-Suit Motion, so that a further application would be needed if the material was to be used for contempt proceedings, Lord Oliver’s “statement of principle” in the Crest case could not be taken to govern the Bourns case, and that in Crest, Lord Oliver was not considering circumstances in any way similar to the very peculiar circumstances in Bourns[69].

178.  Mr Fong and Mr Yu had submitted that as there was an express undertaking given to Apple in the present case, and relying on what was said by Gibson LJ, leave must be required for A to use the Apple Documents. 

179.  It was not disputed that A had signed a document headed “Confidentiality Undertaking” to Apple (“Confidentiality Undertaking”)[70], a draft of which was sent to Rs which Rs were in turn  asked by A to sign when Rs sought inspection of the Apple Documents.  From the draft, one could see that A acknowledged that the Apple Documents contained confidential information in paragraph 1, and then paragraph 2 went on to state:

“2. I undertake to Apple and to the High Court of the Hong Kong Special Administrative Region (“Court”) that, subject to the terms of this Undertaking and any order of the Court:

2.1. I will only use the Documents and the Confidential Information for the conduct of the proceedings in the Court (HCA 797/2012) and any appeal from those proceedings (the “Proceedings”);

2.2. I will not disclose the Documents or the Confidential Information to anyone, or discuss the Documents or the Confidential Information with anyone, unless:

2.2.1. that party has also given Apple a Confidentiality Undertaking in this or a similar form;

2.2.2. I have Apple’s written consent to do so; or

2.2.3. I am compelled to do so by law.”

180.  Paragraph 3 of the Confidentiality Undertaking was in relation to the return or destruction/removal of paper documents and removal of access to prevent recovery or retrieval of electronic documents within a reasonable time after the conclusion of the Proceedings. Paragraph 4 then stated:

“I acknowledge that any breach of this Undertaking or obligation by me will entitle Apple to seek appropriate relief (including, but not limited to, injunctions and/or damages) from the Court or from any other appropriate court(s).”

181.  It was common ground the same principles for implied undertakings also applied to express undertakings, and had referred to the Australian case of Royal Guardian Mortgage Managers v Australian Mortgage Securities [2011] NSWSC 967[71]. 

182.  Rs’ allegation of A’s breach in respect of the Confidentiality Undertaking was based mainly on 2.1 thereof, which would be in effect the same as the common law implied undertaking. 

183.  Unlike the express undertaking given by Bourns’ Counsel before Pomfrey J in those particular circumstances of the Bourns case, there was no evidence that the Confidentiality Undertaking was ever filed in court in the Main Action.  There was no reference to the Confidentiality Undertaking in the Disclosure Order, which was an order made by consent of Apple.

184.  There was no evidence to indicate one way or another as to whether the Confidentiality Undertaking was signed before Apple consented to the Disclosure Order, as the evidence only indicated that A had signed the Confidentiality Undertaking prior to obtaining the Apple Documents[72].

185.  In any event, I am of the view that paragraph 2.1 of the Confidentiality Undertaking was no more than stating the common law implied undertaking. 

186.  The facts of each case are different.  The facts of the present case are much more straightforward than those in Bourns.  There were no peculiar circumstances in the present case as those in Bourns where the express undertaking was given by Bourns’ counsel in court, and the undertaking given was very specific and confined in scope[73].  Further, Bourns’ counsel had at the time made an election not to proceed by way of motion to commit[74].

187.  In the present case, the Orders were made in the Main Action in which the Apple Documents were disclosed by Apple pursuant to the Disclosure Order, as a result of which, alleged breaches by Rs of the Orders, which were in fact interlocutory orders, were said to be discovered by A and A then obtained leave from the Trial Judge in the Main Action to issue committal proceedings against Rs.  As submitted by Mr Poon, these committal proceedings are interlocutory.

188.  In my view, the Apple Documents are being used in the enforcement of the Orders under which Rs were/are under a legal obligation to comply, and the use of the Apple Documents for the purpose of “proper policing and enforcement or observance” of the Orders would be as much an integral part of the Main Action as any other step taken by A in the proper prosecution of his claim, using Lord Oliver’s words.  I am of the view that, the use of the Apple Documents for these proceedings cannot be said to be for a collateral or ulterior purpose.  I accept what was submitted by Mr Poon, that these proceedings are really ancillary/incidental to the conduct of the Main Action.

189.  I am thus of the view that the Apple Documents can be used by A for these proceedings without infringing either the implied undertaking or paragraph 2.1 of the Confidentiality Undertaking, without the necessity of obtaining the prior leave of the court.

190.  Further,  whether  implied undertaking or the  Confidentiality Undertaking, in the present case, the person which gave disclosure was  Apple, and not any of the Rs, I am not satisfied that Rs could rely on any breach of the undertaking/s even if there was any breach thereof.

191.  Apple had in fact  become aware of these proceedings earlier this year, and had instructed its solicitors King & Wood Mallesons  (“KWM”) to write to A’s solicitors on 2 February 2015 and copied to R2’s and R3’s solicitors JKKL[75].  In this letter, KWM had reminded A of the implied undertaking concerning the Apple Documents and also the Confidentiality Undertaking.  KWM had complained that they were informed that WW had exhibited the Spreadsheet in the present proceedings and that in doing so, WW had breached both the implied undertaking and the Confidentiality Undertaking.

192.  Thereafter, JKKL on behalf of R2 and R3 had replied, and among other things, informed KWM that the documents disclosed by WW in these proceedings had also included emails and documents disclosed by Apple under the Disclosure Order.  This resulted in KWM sending a further letter to A’s solicitors on 18 March 2015 and later a reminder letter[76]. 

193.  A’s solicitors appeared to have replied on 17 April 2015 to KWM, to indicate that they had taken steps to ensure that A ceased using the Apple Documents for collateral or ulterior purposes[77], but that letter had not been produced by A.  Mr Fong had criticized A for not being candid.

194.  A only produced a copy of its solicitors’ letter dated 23 April 2015[78], in which they pointed out that it was clear that KWM’s information was obtained from Rs and further as Rs had disclosed to them about matters relating to the present proceedings, this had in fact constituted a breach of implied undertaking on the part of Rs and alleging that Apple was “aiding and abetting” such breach.  A’s solicitors then demanded KWM to deliver up all information/documents disclosed to them by Rs.  

195.  Even though A had not produced a copy of its solicitors’ letter of 17 April 2015, in their letter dated 23 April 2015, A’s solicitors had pointed out to KWM that A had obtained leave in the Main Action to issue the present proceedings and that any suggestion that A or WW had used the Apple Documents for a “collateral or ulterior purpose” or otherwise in breach of the undertakings was wholly misconceived.

196.  Thereafter, there was are a relatively brief reply from KWM on 6 May 2015,  among other things, denying that Apple was “aiding and abetting” any alleged breach by Rs, and again reminded A of its obligations with respect to the use of the Apple Documents, reserving Apple’s position with respect of the Apple Documents.  Since then, there had been no further correspondence from KWM.

197.  As mentioned earlier, the Ex Parte Leave was granted by the Trial Judge in the Main Action for A to issue these proceedings.  R1 had filed WX1-2946 in response thereto.  Although in this affirmation, R1 did not refer to the implied undertaking, he had referred to the Confidentiality Undertaking given by A to Apple and had complained about A being in breach of the Confidentiality Undertaking in using the Apple Documents in these proceedings[79], and he had further sought a discharge of the Orders.

198.  What was clear was that at the hearing of 3 December 2014, upon reading R1’s above affirmation and upon hearing R1, and also Counsel appearing for R2 and R3, and notwithstanding the same, the Trial Judge granted leave to A to amend the O52 Statement and to amend the OS, and ordered that service of the Amended Statement and the Amended OS on Rs be dispensed with and further gave directions for the filing of evidence in these proceedings[80].  

199.  There should not have been any doubt in the mind of the Trial Judge as to the source of the Apple Documents as she was the judge who granted the Disclosure Order against Apple.  The Trial Judge was fully aware of A’s intended use of the Apple Documents in committal proceedings when she granted the Ex Parte Leave.  She was also fully aware of the Confidentiality Undertaking which was disclosed in R1’s affirmation when she granted leave for A to amend the OS and the O52 Statement.  The Trial Judge was further well familiar with the disputed issues in the Main Action at the time of the granting of the Ex Parte Leave having already heard a large part of WW’s evidence.  I am therefore of the view that even if prior leave were required, such leave was deemed to have been given by the Trial Judge for A to use the Apple Documents for these proceedings, even though there was no separate and formal summons taken out by A for such prior leave.

200.  So far as Apple is concerned, it is clear from KWM’s letters that Apple was fully aware that the Apple Documents had been disclosed in the present committal proceedings.  There was, however, nothing in KWM’s letters to indicate that such disclosure had caused injustice or prejudice to Apple. 

201.  Paragraph 4 of the Confidentiality Undertaking had stipulated that any breach of the undertaking or obligation by A would entitle Apple to seek appropriate relief (including, but not limited to, injunctions and/or damages) from the court or from any other appropriate courts[81].  Other than reserving its position, there had been no steps taken by Apple to intervene in the present proceedings, or otherwise, to restrain or prohibit A from using the Apple Documents in the present proceedings, or to seek any other relief against A.

202.  Even if there had indeed a breach of either the implied undertaking or the Confidentiality Undertaking on the part of A, as can be seen in Harman, the consequence would be the person in breach would be found guilty of contempt.  As I have said earlier,  the Disclosure Order was made against Apple, and the Apple Documents were not produced by Rs, and in light of this, I am not satisfied that Rs would  have the locus standi to bring committal proceedings against A.  Even if Rs were to have locus, Apple and/or Rs would have to seek leave in the Main Action to issue committal proceedings against A.  The present proceedings would not be the proper arena to deal with such allegations. As pointed out by Mr Poon, no Hadkinson application had been taken out by Rs.  In any event, I am not satisfied that even if there had been a breach, this would have any bearing on the question of “admissibility” of the Apple Documents at this stage.

Whether it was unfair for the Apple Documents to be admitted for the purpose of the contempt proceedings

203.  Finally, it was submitted on behalf of R1 and R3 that the Apple Documents should not be admitted as A had not called the makers or authors of those documents.  This was said to be unfair to Rs as they were not able to cross-examine the makers or authors of the Apple Documents.

204.  Mr Yu had referred to Articles 10 and 11 of Hong Kong Bill of Rights and submitted that any decision to admit the Apple Documents would constitute a breach of R3’s right to a fair hearing under Articles 10 and 11.  Further, under Article 11 (2) (e), R3 had the right to examine or have examined witnesses against him.

205.  Mr Yu had also relied on Al-Khawaja v United Kingdom (2012) 54 EHRR 23 and the so called “sole or decisive rule”, the rationale of which is that, if the conviction of a defendant is solely or mainly based on evidence provided by witnesses whom the accused is unable to question at any stage of the proceedings, his defence rights are unduly restricted.

206.  It was also submitted on behalf of Rs that it would be unfair to admit the Apple Documents, for the following reasons :-

(i) All the Apple Documents constituted “statement” as defined in s 46, Evidence Ordinance, Cap 8, as “any representation of fact or opinion, however made”;

(ii) The Apple Documents (which were all hearsay) constituted the only evidence supporting most, if not all, of the allegations made against Rs and/or the decisive evidence relied by the A, given their content, significance or importance, and how they would be interpreted would likely to be determinative of the outcome of the case;

(iii) A could identify the makers or authors of the Apple Documents as demonstrated in the Discovery Order[82], but A did not attempt to and did not invite any of them to give evidence;

(iv) A did not give any good and cogent reasons for the non-attendance of the makers/authors. 

(v) A was making use of documents produced by a non-party and put forward serious allegations against Rs which, if proved, could result in the loss of liberty;

(vi) The Apple Documents and the evidence of the makers or authors of these documents would be highly relevant and they would have probative value in determining most of the contempt allegations;

(vii) The makers or authors of Apple Documents, if they attended trial for cross-examination, would likely to be considered as impartial and independent witness by the court, as they would have no interest in these proceedings or in any parties in these proceedings.  Their evidence could also directly address the key issue of  the present contempt proceedings, namely whether Rs had solicited, entered into, performed or continued to perform contracts with Apple in respect of the Testing Business after 15 May 2012; and

(viii) Without their oral evidence, it would not possible to explore with the makers or authors of the Apple Documents their purpose, the content, meaning, interactions and the parties involved in the Apple Documents.

207.  As seen in Citybase, affidavit evidence is both admissible and normal in contempt proceedings. Ma J, as he then was, had said of contempt proceedings as follows[83]:

“17. Having said that the standard of proof is the criminal one (ie beyond reasonable doubt), I should however point out what may possibly regarded as anomalies in this type of proceedings:

(1) Affidavit evidence is invariably used in committal proceedings unless otherwise directed by the court : see Order 38, rule 2(3); Hong Kong Civil Procedure 2002 at paragraph 52/6/3. Furthermore, hearsay evidence is permissible : see Hong Kong Civil Procedure 2002 at paragraph 52/6/3; Savings & Investment Bank Ltd v Gasco Investments (Netherlands) BV No2 [1988] Ch 422. The court obviously has a discretion whether or not to disregard such evidence and is certainly duty bound to consider carefully the quality of such evidence. I would, however, make this observation : where contempt proceedings are involved, although affidavit evidence is both admissible and normal, it is important that as much first hand evidence of the actual contempt is adduced or if not, an explanation given as to why such evidence is unavailable. This is not to fetter a court’s consideration of hearsay evidence where appropriate, but no court would wish to make a finding of contempt unless the evidence to support such a finding was good. It is to be borne in mind that in contempt proceedings, there is no burden on the respondent to prove his innocence : see Concorde Construction Co Ltd v Colgan Co Ltd (No2) [1984] HKC 253, at 257.

(2) Unlike in criminal proceedings, where mens rea has to be demonstrated, there is no requirement in civil contempt proceedings to show that the alleged contemnor intended to disobey the order (ie his conduct was contumacious).  It is sufficient to proof (a) that he knew the facts which are said to make his act or omission a contempt and (b) that such act or omission was not accidental : see the cases referred to in Hong Kong Civil Procedure 2002 at paragraph 52/1/6.  Of course, the alleged contemnor should be aware of the order and the consequences of breaching it : see paragraphs 14(1) and (2) above.”

208.  In the present case, how A obtained the Apple Documents was not in dispute.  It was, never put to A that the Apple Documents were fabricated, not authentic, or inaccurate.  It was never Rs’ case that the Emails or the Purchase Orders relied on by A were not sent by Apple or not received by Apple.  In fact, as pointed by Mr Poon, the maker of many of the Emails was R1 himself, and the Purchase Orders were addressed to R2, and thus Rs themselves should have first hand knowledge of those documents.  If R1 and R2 (or R3), having first hand knowledge of those Emails and Purchase Orders, challenged the authenticity or accuracy of contents thereof, they could have stated this on affidavit or given evidence themselves.

209.  There was no procedural unfairness to Rs, as they could also have apply to subpoena the Apple staff.

210.  Having considered the above, I am not satisfied that the admission of the Apple Documents would constitute a breach of Rs’ rights under the Hong Kong Bill of Rights or that it would be unfair to Rs.  It is my ruling that the Apple Documents were admissible.

211.  As to whether the Apple Documents were reliable and what weight should be given to them, as I have said, the fact was that many of the Emails were between R1 and Apple and the Purchase Orders were issued to R2.  The Apple Documents were obtained from an independent non-party to the action, and Rs had first hand knowledge of many of the Emails and the Purchase Orders, and the contents of the Spreadsheet. I do not see why considerable weight should not be given to the Apple Documents.

General Issues

212.  There were a number of other issues raised by Rs generally.  Mr Fong and Mr Yu adopted each other’s submissions, in so far as they related to their respective clients.

213.  The first issue I shall consider whether in the Emails and/or Purchase Orders, the person “Wilson” or “Wilson Wei”, “SW”, or “SW Wei”, “esl” all referred to the same person, namely R1. 

214.  First of all, so far as “Wilson” or “Wilson Wei” was concerned.  R1 had in WX1-2946 said that A should not assume that those Emails sent from “wilson@caevolution.com” were sent by him.  He did not, however, actually deny that his English name was/is Wilson or Wilson Wei or that “wilson@caevolution.com” was his email address.  Further, during the trial, it was never put to WW that R1’s English name was not Wilson or Wilson Wei.  I am satisfied beyond reasonable doubt that “Wilson” or “Wilson Wei” is and was at all material times the English name of R1.

215.  As seen from an email sent on 9 November 2011 08:53:59, “Wilson Wei” was the name provided to Apple as the “Sales Contact Name” for the “Vendor” Evolution Solutions Limited, namely R2, and he had also provided the “Sales email” being “wilson@caevolution.com”, with Sales Phone numbers and Fax number being set out and R2’s official company address in Bright Way Tower being given[84].  In the same email, R1 had referred to R2 as “my company”, and further attached the basic information of R2, again setting out the email address of “wilson@caevolution.com”, and giving the bank account details of R2.  The bank account was the same account of R2’s referred to in the HSBC Letter, and which was frozen for 2 weeks as a result of HSBC being sent a copy of the Injunction Order. 

216.  There was also an email from Apple on 24 September 2012 8:01pm which indicated that according to Apple’s record for Vendors, the listing showed R2 as Vendor, with R2’s Vendor Number 80150064, with contact name Wilson Wei and email address wilson@caevolution.com, and giving R1’ mobile number[85].  

217.  Further, as seen later in this judgment, the registration records for the domain name “caevolution.com” showed “Wei Xing”, namely R1 was the registrant, the administrator, the technical person, and the billing person for that domain name.  Having considered all the evidence, I am satisfied beyond reasonable doubt that “wilson@caevolution.com” is and was at all material times the email address of R1, and that those of the Emails sent from this address were sent by R1, or authorised by R1 to be sent on his behalf and that R1 was fully aware of the contents of these emails.

218.  As for “SW”/ “sw”/ “SW Wei”, Mr Fong had put to WW that when R1 was with A, R1 had never signed off emails using “SW” or “SW Wei” in emails from “willwin.hk”.  WW had responded that he could only recall seeing “SW” as R1’s displayed name in emails, and that he thought R1 did use “SW Wei”.  Whether R1 signed off as “SW” when using his email address at “willwin.hk” or not, there were some of the Emails, eg an email sent from R1’s email address wilson@caevolution.com on 30 August 2012, at 14:41:11 in response to Apple’s email which was signed off as “sw”.

219.  R1 had in WX1-2946 disputed that “SW” referred to him[86].  As I have said above, I am satisfied that “wilson@caevolution.com” was at all material times the email address of R1, any emails signed off with “SW”, “sw”, of “SW Wei” from this email address must have been sent by R1, or authorized by R1 to be sent on his behalf, and that R1 was fully aware of the contents of those emails.  There was no evidence that any one had hacked into that email address or that it was used without authorization of R1.  In any event, R1 failed to attend trial for cross examination, and I give no weight to this part of his evidence.

220.  There were also some of the emails which were signed off with “esl” with the email address esl@caevolution.com.

221.  Among the emails, there was an email sent on 18 January 2012 from a Vivian Zhong (otherwise known as Vivi Zhong) (“Vivian”) to various personnel at Apple, saying that she was Vivian from ESL, namely R2.  In the same email, she had informed Apple of the Spring Festival holiday and, among other things, gave R1’s email address “wilson@caevolution.com” or esl@evolution.com for urgent contact[87].

222.  I am thus satisfied beyond reasonable doubt emails sent from email address esl@evolution.com were sent by R1, including those signed off as “esl” were either sent off by R1, whether on behalf of R2 or not, or in any event, authorized by R1 to be sent on his behalf and/or on behalf of R2, and that R1 was fully aware of the contents of those emails.

223.  The other general issues raised by Rs were:

(i) What was the meaning of Testing Business?

(ii) Whether there were contracts between R2 and Apple?

(iii) What was the relationship between R1, Vivian Zhong and R2?

(iv) Who had/has the use, control and management of the domain name “caevolution.com”, and the email system bearing the domain name?

What was the meaning of Testing Business

224.  The testing business was defined by A in the  Amended OS[88] and the Amended Statement[89] and was that set out in the Amended Injunction Order, namely :

(1) The sale and/or provision of :

(i) auto test system

(ii) test fixture

(iii) test equipment

(iv) test instruments

for electronic and computer hardware products ; and

(2) The supply of related technical services

(“Testing Business”)

225.  The meaning of Testing Business set out above was thus in relation of the sale and/or provision of the above mentioned items in (1)(i)-(iv)  for electronic and computer hardware products (“Test Items”) and supply of related technical service.

226.  In these proceedings, R1 was alleged to have breached paragraph 1, and R2 was alleged to have breached paragraph 2 of the Amended Injunction Order.  Paragraphs 1 and 2  essentially restrained -

(1) R1, whether by himself/employees/servants/agents or otherwise, from:

(i) Soliciting

(ii) entering into

(iii) performing or continuing to perform

any contract with Apple for Testing Business

(2) R2, whether by itself / its directors / officers / employees / servants / agents otherwise, from:

(i) Soliciting

(ii) entering into

(iii) performing or continuing to perform

any contract with Apple for Testing Business

227.  Paragraphs 1 and 2 of the Amended Injunction Order were only in relation to Testing Business.

228.  Mr Fong submitted that Rs were not prohibited thereunder in relation to other businesses with Apple.  Mr Fong had submitted that no one from Apple had been called to give evidence to explain the contents or meanings contained in the Emails and/or the Spreadsheet provided by Apple, and no one had explained the types of business that the persons were having discussions on in the Emails, if any, or whether such business was in relation to electronic and computer hardware products, or whether there were any contracts reached with Apple.

229.  Mr Yu adopted Mr Fong’s submissions and Mr Yu had also submitted that Testing Business was a highly technical in nature, and that there was no evidence from A to illustrate and to explain the meaning and operation of Testing Business.

230.  The issue was to whether the contracts Rs alleged to have solicited from Apple or entered into, performed or continued to perform with Apple were for Testing Business was never raised by Rs in their opening submissions.

231.  Nor had this issue been ever raised by R1 himself when he was acting in person.  In fact, R1 himself clearly had detailed knowledge of the “Industry”.  As he had explained in detail in WX1-797[90], the electronic manufacturing industry was massive and complicated and divided into 3 main categories, consisting of (a) design and intellectual property rights owners such as Apple; (b) factories and product manufacturers such as Foxconn; (c) test fixture vendors such as the 2^nd plaintiff (“SWT”) in the Main Action.  At that time, the main issue raised by R1 was whether the clients/customers in the Clients List were A’s clients or SWT’s clients, it being Rs’ case all along that all businesses and clients were those of SWT, and not A’s. 

232.  Further, in WX1-2946 which was filed by R1 in reply to A’s application for Ex Parte Leave and A’s application had included a draft of WW16-797.  R1’s affirmation was filed in Chinese and he had referred to WW’s evidence in the Main Trial in relation to 檢測行業的生意 or Testing Business (as defined in those documents) of  A and SWT, and R1 was maintaining his argument that the clients/customers in the Clients List were not A’s but SWT’s.

233.  By that time, R1was fully aware of the consequence of any breach of the Orders.  Even on R1’s own evidence, both he and A / WW should be fully knowledgeable as to what Testing Business was.  Yet, he had never once said that the business disclosed in the Emails and/or Purchase Orders was not Testing Business.  Furthermore, there R1 had never once said that the Test Items mentioned in the Emails of Purchase Orders were not in connection with electronic or computer hardware products.  Anyway, one chain of the Emails which started on 17 May 2012 05:11:04 indicated that Alex of Apple was asking Wilson/R1 for a particular latest design of an IPad test fixture with manual control[91], which was clearly in connection with an electronic product.

234.  A’s case had been very specifically set out in the Amended OS and further specifically pleaded in the Amended Statement.   WW had confirmed in WW16-797 the facts pleaded in the Amended OS and the Amended Statement were true and accurate to the best of his knowledge, information and belief[92].  WW had attended trial and confirmed the contents of all his affirmations and adopted the contents therein as his evidence to support his case in these proceedings.

235.  WW was never cross examined during the trial that the Emails and/or Purchase Orders and/or the Spreadsheet were not in relation to Testing Business, nor that contracts R1 and R2 were alleged to have solicited, entered into, performed and/or continued to perform with Apple was not for Testing Business, nor was this ever put to him.

236.  Having considered the evidence, I am satisfied beyond reasonable doubt that the kind of business that R1 and R2 were alleged to have solicited, entered into, performed and/or continued to perform with Apple was Testing Business, or the kind of business prohibited under the Amended Injunction Order.

Whether there were contracts between R2 and Apple

237.  Another issue raised by Rs was that there were no “contracts”, or no written contracts, amongst the Apple Documents.

238.  Although no copies of actually signed written contracts had been disclosed by Apple, the Emails, the Purchase Orders and the Spreadsheet did in my view reveal contracts between R2 and Apple.

239.  As I have mentioned earlier, one chain of the Emails started on 17 May 2012 05:11:04[93] with an email from Alex of Apple to Wilson/R1 in relation to the updated design of an IPad fixture with manual control.  Vivian had sent an email from vivi.zhong@caevolution.com in reply to Alex on 18 May 2012, giving the ftp address at www.caevolution.com, account : Apple, with password for Apple for review of the design.  Then, on 25 July 2012 11:55, Vivian again sent an email to Alex, saying that she was “Vivian from ESL” and referred to the updated mechanism design of the fixture and suggesting signing a non disclosure agreement (“NDA”) with Apple for the new project for the updated mechanism design[94]. 

240.  Thereafter, there was a further chain of emails which began with Alex sending an internal email to a colleague at Apple copied to Vivian on 8 August 2012, in relation to the signing of a NDA for the purchase of the Test Items referred therein and asking his colleague to help ESL, namely R2 to sign the NDA[95].  The signing of the NDA by ESL/R2, in my view, indicated the entering into a contract for purchase and/or supply of the Test Items. Indeed the contract for purchase was concluded and the Test Items shipped and this could be seen in the email Alex sent to R1 and Vivian on 9 November 2012, informing them he had just unpacked the Test Items Apple ordered from R2 and that he had found significant damage had occurred.

241.  Although copies of NDAs were not disclosed by Apple as they were not covered under the Discovery Order, Apple had, however, prepared and disclosed the Spreadsheet to show all past Testing Business dealings between R2 and Apple.

242.  The 1^st page of the Spreadsheet set out  details  including  the numbers, dates and amounts of Invoices, with name of Vendor ESL, namely R2, against dates of payment.  On the 2^nd page of the Spreadsheet,  all the Purchase Requests (PR) made by Apple to R2 from 9 November 2011 until 22 September 2014 were set out, against which details of the Purchase Orders (Standard/Blanket) were also set out.  The column for “Contract #” was left blank.

243.  On most, if not all the Purchase Orders disclosed by Apple,  there was a paragraph “Important Instructions” setting out thereunder that[96] :

“Unless this purchase is covered by a written agreement executed by Apple and Seller, the terms and conditions contained herein are the sole and exclusive terms and conditions governing this purchase …… This PO is subject to the Terms & Conditions referenced at the following link: http://www.apple.com/legal/procurement/docs/US_TERMS_COND-0058.pdf”

244.  It is quite clear from the above that the purchase by Apple may not necessarily be covered by a written agreement.  The lack of a written agreement/contract did not necessarily mean there was no contract.  In my view, the issue of a Purchase Order upon a Purchase Request by Apple, followed by the supply of Test Items and issue of invoices by the Vendor/Seller/Supplier would indicate a contract being concluded and performed, and the evidence in the Spreadsheet showed the payments by Apple.

245.  Having considered all the evidence including the above, I am satisfied beyond reasonable doubt that the Emails, the Purchase Orders and the Spreadsheet indicated that there had been contracts entered into between the Vendor R2 and Apple for Testing Business.

What was the relationship between R1, Vivian Zhong and R2?

246.  First of all, in so far as the relationship between R1 and R2 was concerned, I have mentioned earlier that R1 was the one who was authorized to make all the affirmations on behalf of R2 in the Main Action, and that the affirmations made by R1 was detailed and meticulous, showing his full knowledge of the R2’s business, and of Testing Business. 

247.  In particular, in WX2-797 filed in support of their application to discharge the Ex Parte Orders,  R1 had referred to A serving the Ex Parte Orders on HSBC, which resulted in the freezing of R2’s bank account for 2 weeks, and he had produced letters between HSBC and “his” legal advisor[97].  Further, he had produced true copies of a few purchase orders, emails or communication which he said R2 was unable to take on, continue and/or complete, due to the continuation of the Ex Parte Orders, and had claimed that R2 had already suffered a loss of at least HK$4.7m, and that if the Ex Parte Orders were continued, R2 would suffer a further loss of at least HK$5.6m, and would be out of business soon[98].

248.  In R1’s email of 9 November 2011 08:53:59 when trying to set up a “new” Vendor for R2 in Apple’s system, which I have mentioned earlier, R1 had also referred to R2 being “his” company, and he had given Apple his name and his email address as Sales contact and for the record of Apple’s list of registered Vendors, and also details of R2’s HSBC bank account with SWIFT number.  In fact, as seen in the email of 24 September 2012 8:01 pm from Apple, R1 had remained the contact name for R2 on its record.  As also seen in the Chinese New Year email sent by Vivian on 18 January 2012, R1 was one of the urgent contact persons for R2.

249.  R3’s evidence in her witness statement in the Main Trial was that she had personally acquired, set up and founded R2, and/or that the “rather successful business” of R2 was established by her.  Notwithstanding R3’s said statements, there was no sufficient evidence before this court as to the role of R3 in the running of the company, or the building up or carrying out of its business, or in actual control and management of R2, apart from being in name a director or shareholder.  In particular, she was not even named as an urgent contact for R2 during Chinese New Year holidays, or indeed generally as a contact person for R2 on the Clients List for Apple, which would clearly be one of the major clients of R2.  There was no evidence of R3’s involvement in any sale of the Test Items to Apple and/or other clients, or any other businesses of R2. 

250.  Having regard to all the evidence, including the above Emails disclosed by Apple, I am of the view that R2 is in defacto and was at all material times R1’s company, as he had himself said, and/or otherwise under the control and management of R1, whether through R3 or otherwise.

251.  As for R1’s relationship with “深圳市研測科技有限公司”, it was WW’s evidence that the Shenzhen company “深圳市研測科技有限公司” was in fact closely connected with R2 and that this company was also under the control and management of R1 and R3[99].

252.  First of all, I have mentioned earlier the email sent by Apple on 24 September 2012 8:01pm.  This email was in fact sent in response to an earlier email from Apple asking Vivian to clarify, as Apple could not find the name Shenzhen Evolution Solution Limited listed as an Apple vendor/supplier.  Vivian then sent an email on 24 September 2012 which indicated that she had requested Apple to confirm change of information on Apple’s record, and it appeared that she had requested Apple earlier to add an address in Shenzhen and to add herself as a contact person, under Apple’s record for R2[100].  The address Vivian was trying to add to Apple’s record for R2 was the address of Shenzhen Evolution Solution Limited at 116, Guanlan Avenue, Xin Cheng Community, Bao An District[101], which was also where the registered address of “深圳市研測科技有限公司” was located[102].

253.  Although there was no evidence that “Shenzhen Evolution Solution Limited” was/is in fact the actual registered or official English name of “深圳市研測科技有限公司”, that “Shenzhen Evolution Solution Limited” was indeed the English name adopted for the Shenzhen company was, however, supported by the contents of some of the Emails  issued by Vivian to Apple, including the one she sent on 24 September 2012, which was mentioned above, when she was informing Apple of the changes in the information on Apple’s record, when she signed off with both the Chinese name 深圳市研測科技有限公司 and the English name of  Shenzhen Evolution Solution Limited [103]. 

254.  I find that the evidence showed that 深圳市研測科技有限公司/Shenzhen Evolution Solution Limited referred to the same company and I understand that this company had been referred to as SZESL by A in the Main Action, which abbreviation was then followed by Rs.  

255.  深圳市研測科技有限公司or SZESL is a corporate entity incorporated/registered on 1 December 2011 in Shenzhen and R1 had produced a copy of the registration record of this company[104], to show that the legal representative was one Chen Lu, and the shareholders were other persons and another company, which was not R1 not R2.

256.  It was WW’s evidence that when he went to the office of SZESL in about February 2012, he saw R1 and R3 there, and that R1 was the general manager of the company. 

257.  R1 had himself produced in WX1-2946 a list of the contact details for personnel of SZESL[105](“Personnel List”), which he had claimed WW’s staff had stolen from the front desk of the office of SZESL when WW and his staff went there in February 2012.  The name of “Shenzhen Evolution Solution Limited” had appeared under 深圳市研測科技有限公司 on the Personnel List.

258.  The Personnel List indicated that R1, R3 and Vivian were all connected to Shenzhen ESL, namely R1 was top in the Personnel List and was in 總經理室 and R3, the 2^nd in the Personnel List, was in 總經辦, Vivian was in 業務部.  There were three other staff, one in信息/Information, one in人事/Personnel, and one in 財務室/Finance.  R1’s English name given as Wilson, and his email given as wilson@caevolution.com, and mobile number 13902902678, and  R3’s English name given as Elaine, and her email given as elaine@caevolution.com.

259.  That Vivian was working for SZESL did not seem to be disputed, as many of her emails to Apple were signed off with SZESL.  

260.  However, in the 18 January 2012 Chinese New Year email sent by Vivian to Apple referred to earlier, apart from R1, Vivian also gave her own name and contact details for an urgent contact for R2 during the holidays.  In the email which Vivian sent on 25 July 2012 11:55, which I had referred earlier, she had referred to herself as Vivian from ESL, namely R2. Further, it was clear from the chain of emails culminating in the one sent by Apple on 24 September 2012 8:01 pm, that even though Vivian had signed off her emails with SZESL, she had confirmed to Apple that after providing the quote to Apple, that Apple’s purchase order should be made out to R2, the only vendor with vendor number listed in the system of Apple.  Indeed, as I have mentioned earlier, in that chain of emails, Vivian had requested for change of information on Apple’s record to add herself as contact name for R2.  Vivian was thus also clearly working for R2, at the same time when she was signing off her emails to Apple with SZESL.

261.  Having considered all the evidence including the above, I am satisfied beyond reasonable doubt that Rs was closely connected with SZESL, and that Vivian was working for both SZESL and R2.

Who had/has the use, control and management of the domain name “caevolution.com”, and the email system bearing the domain name?

262.  One of the issues raised by Mr Fong concerning the Emails was whether R2 had the exclusive control and management of the domain name “caevolution.com”

263.  Although WW’s evidence was that he was not certain whether R2 had the exclusive use of the domain name “caevolution.com”, his evidence clearly indicated that it was his belief that the Emails using this domain name were in relation to R2’s business and that R2 had the use control and management of this domain.

264.  R1 had himself produced in WX1-2946 registration records in respect of the domain name of “caevolution.com”[106].  The records showed R1 was registered under the “registrant name”, “registrant organization”, “administrative name”, “administrative organization”, “billing name”, “billing organization”,  “technical name” and “technical organization”, and the email of the registrant, administrative, billing, and technical were all given as “wilson@willwin.hk”[107], which was R1’s former email address when working for A.

265.  On the registration records “深圳市研測科技有限公司” appeared under “標題”/“Title”, under the Part “網站相關信息”/ “Related Website Information”, “深圳市研測科技有限公司”, or SZESL was only set up/incorporated on 1 December 2011[108], and was thus not yet in existence at the date of the registration of the domain name on 6 October 2011.

266.  Having considered the above and having regard to the fact that R1 was named as the registrant, the administrator, the technical person, and the billing person in relation to the domain name “caevolution.com”, I am satisfied beyond reasonable doubt that R1 at all material times had and has the sole control and management of the domain name since registration, and that all the Rs had the use of the email system bearing the domain name since registration.

Merits of A’s case against R1

267.  A’s case of R1’s alleged  breach of paragraph 1 of the Amended Injunction Order  was based on:

(i) R1 had through the use of the email accounts of wilson@caevolution.com and / or esl@caevolution.com and/or otherwise, performed and/or continued to perform various contracts for the Testing Business to Apple;

(ii) R1 had through the use of the email accounts of wilson@caevolution.com and / or esl@caevolution.com and/or otherwise, solicited and/or entered into various contracts and/or caused R2 to enter into various contracts for Testing Business with Apple;

(iii) R1, being the named person for some of the Purchase Orders had solicited, entered into, performed and/or continued to perform and/or caused R2 to enter into, perform and/or continue to perform various contracts for Testing Business with Apple.

Particulars of Occurrences of R1’s Breaches of paragraph 1 of the Amended Injunction Order

Emails in relation to performing contracts etc

268.  A had relied on some 13 items of numbers 1-3, 5, 11-14 and 19- 23 of Emails set out in Part A under paragraph 14 of the Amended Statement[109], for its case that R1 had, through the use of wilson@caevolution.com and/or esl@caevolution.com and/or otherwise, performed and/or continued to perform various contracts for Testing Business to Apple.

269.  Mr Fong had, however, submitted the emails[110] were sent from companies/entities with different names, and not from R2.  Apart from SZESL, there were emails sent from an address @eslcorp.com[111], and some other of the emails were signed off with either Shenzhen Evolution Technology Company Limited[112], or Shenzhen CAEvolution Solution Limited[113].

270.  WW had been questioned by Mr Fong on the various companies/ entities / names in the emails.  WW had stated that he did not know anything about the above companies/entities.  WW had also questioned whether ESLcorp was a company or corporation on its own, as it only appeared in an email address.  It was also WW’s evidence that in PRC, only Chinese names of companies would be registered with the relevant authorities but not English names. 

271.  Mr Poon had pointed out that there was no evidence that Shenzhen Evolution Technology Co Limited was a different company from SZESL, and that it could be a direct English transliteration of 深圳市研測科技有限公司 and could thus refer to the same company, namely SZESL.  Anyway, the name Shenzhen Evolution Technology Co Limited had appeared in the signature portions of only those very few of the emails as identified by Rs. 

272.  As for Shenzhen Caevolution Solution Limited, the contents of the email on 29 January 2013, at 5:57 pm, showed that Vivian was trying to change the “vendor name” or “account name” on Apple’s record to Shenzhen Caevolution Solution Limited, and as R1 was copied in, he must be aware of this.  Mr Poon accepted that Shenzhen Caevolution Solutions Limited could be a separate company / entity given that it was also a vendor of Apple, with vendor number 80153116[114].  However, as pointed out by Mr Poon, apart from this email, none of the other Apple Documents (including the Purchase Orders) had referred to the company Shenzhen Caevolution Solution Limited and/or the vendor number of 80153116.

273.  In light of the above, save for SZESL and Shenzhen Caevolution Solution Limited, I find there was no sufficient evidence that the other names referred to different and separate companies/entities.

274.  I now turn to consider some of the 13 items of the Emails relied on by A.  I shall follow the item number of the Emails used by Mr Poon in Annexure B of A’s Supplemental Chronology of Events (“Annexure B”), which was also adopted by Mr Fong, rather than the item numbers in the Amended OS and the Amended Statement.  The corresponding item number in the Particulars of Occurrences set out in Part A under paragraph 14 in the Amended Statement (“Part A”) will be shown in brackets (I. number).

275.  Items 7 & 8 (I.1 & I.2) consisted of a chain of emails between Apple personnel and R1 on 29-31 August 2012[115].  In these emails, one could see there had been problems in relation to certain test fixtures at FXLH, and Apple had complained to R1 who replied from wilson@caevolution.com that his engineer was on the way to FXLH.  Further, R1 had sent an email from esl@caevolution.com on 30 August 2012, at 17:06:20[116], which indicated that it was at Apple’s request, that 2 fixtures would be shipped to FXLH.  Then on 21 August 2012, 00:42:41, R1 had sent an email from wilson@caevolution.com[117], to report that all fixtures were ready and R1 asked Apple not to worry about the delivery of fixtures to FXCD  for its production line.   In my view, Items 7 & 8 showed that R1 was clearly performing contracts with Apple, and not Foxconn for provision of Test Items, including supply of related technical services to Apple and at Apple’s request.  Also Item 9 (I.3), an email dated 3 September 2012, 16:35:17 sent by R1 to Alex of Apple, indicating the R1’s engineer had done all the tests and that the fixtures at FXCD worked fine on manual status, but not on auto, and that this problem was dealt with by Alex at FXLH, and although R1 was asking Alex to help again, the email showed results for the tests/supply of related technical services by R1’s engineer (part of Testing Business) in relation to those fixtures[118].  Again this email showed R1 performing contact with Apple.  

276.  Item 10 (I.5) consisted of emails from 4-6 September 2012 which was a continuation of Item 9 (I.3) in relation to the problems of those fixtures at FXCD.  One of the emails from Apple had referred to talking to Vivian, and referring to the ESL onsite engineer looking at the issues[119].  One of the emails from Apple on 6 September 2012 11:12:05 to Vivian clearly referred to what ESL had to do on that day, when setting out the plan for dealing with the problems of the fixtures at FXCD[120].  This was then followed by R1’s email of 6 September 2012 15:21:59 sent from esl@caevolution.com to Apple indicating the fixtures passed the test and also informing Apple they had shipped the rest of  the fixtures to Chengdu, and signed off with “Wilson 2012-09-06 esl” (emphasis added).  What R1 was doing was clearly also performing contract with Apple, and not Foxconn.

277.  There was also an email dated 18 January 2012 (I. 11) listed in Part A.  This was prior to the Ex Parte Order and I will not consider this.  It was not listed in A’s Annexure B.

278.  The next series of Emails from 24 January 2013-5 February 2013[121], Item 18 (I.12), were in relation to, among other things, a visit by Nikhil of Apple and relied on by R1 to say that Apple was clearly aware of SZESL and its location in Shenzhen.  Nikhil of Apple had sent an email on his plan to review certain Test Items referred to therein.  Although Vivian signed off emails with SZESL, another staff Nancy had however referred to ESL in her email of 24 January 2013, 12:38am, when asking Nikhil whether it was convenient for him to come that day.  Nikhil’s reply clearly referred to visiting ESL’s factory.  In my view, although Nikhil knew the location he was planning to visit was in Shenzhen, so far as he was concerned, he was going to visit R2’s factory there, and not a separate unrelated company.  Further on 2 February 2013, 03:40:00, Nikhil had sent an email to R1 to bring to R1’s attention in relation to issues on receiving packages from ESL[122], and R1 had responded from wilson@caevolution.com, this time signing off as “sw”, to say he guaranteed the issues Nikhil mentioned would not happen again, and further reported on the shipping of certain Test Items to US.   I am of the view that that so far as Nikhil was concerned, he was dealing with R2, and in any event, R1 was the one that Nikhil contacted when there was a problem in relation to the delivery from R2.  I am further satisfied that R1 were performing contract with Apple.

279.  Then in Item 20 (I.13), emails from 12-14 February 2013[123], R1 had sent an email to Nikhil on 12 February 2013, 9:07 pm, from wilson@caevolution.com signing off as “sw” and asking Nikhil whether he had received the Test Items, and saying that although it was still Chinese New Year, R1 was still working at “ESL” and telling Nikhil that he had located some one in Santa Clara and this would make it more convenient for Apple to communicate with.  In my view, R1 himself should be the person who would be very clear as to whether he meant ESL or SZESL, and he clearly referred to ESL, namely R2 and not SZESL.  There was no evidence that “ESL” meant SZESL instead of R2, as Mr Fong had argued. As contract for Testing Business included the supply of related technical services, and as what R1 was doing was informing Apple of a contact person in relation to supply of technical services, R1 was thus performing contract with Apple.

280.  The next series of emails between 20-26 June 2013 formed part of Item 21 (I.14)[124], and started off with R1 sending Nikhil an email seeking the latter’s help with certain fixtures  indicating the fixture passed the test before being shipped, but one flex vendor ZDT reported that the same fixture failed the test of the vendor.  This series of emails ended with Nikhil to R1 on 26 June 2013, 05:09:03, summarizing the problem, namely that ZDT claimed they received certain number of fixtures that failed but that “ESL” had said that the same testers passed their OQC, and Nikhil had asked R1, and also ZDT to provide a list of the testers.  The series of emails, however, indicated that Nikhil had given instructions to R1 to go to ZDT to help, and they clearly showed that R1 was performing contract with Apple, and not with ZDT as suggested by Mr Fong.

281.  Then came Item 26 (I.19), emails from 25 January 2014-7 February 2014[125].  There was a Kevin who had sent 2 emails from kevin@ caevolution.com to Richard of Apple, signing off with Shenzhen Evolution Technology Co Ltd. Then, there was one email from one Alexander Liu from alexliu@eslcorp.com to Richard.  However, the email from Alexander Liu referred to ESL current action item, which was to provide more spare unit for certain Test Items for Apple’s flex supplier.  Alexander Liu had asked Apple to take a look to see if the quantity was sufficient for its plan.  From my reading of this email, again, the spare units for the Test Items were provided to Apple’s flex suppliers, at the request of Apple, and the contract for supply was with Apple, and not the flex suppliers as suggested by Mr Fong.  There was also one email sent by R1 from wilson@caevolution.com, signing of with “sw” in relation to the shipping of 8 sets of fixtures[126], and R1’s own email clearly indicated he was performing contract in relation to Testing Business.

282.  Item 28 (I.22) , contained emails between Richard of Apple and R1 on 27 February 2014[127], with Richard sending to R1 an example of what was needed, and in reply from wilson@caevolution.com on 27 February  2014, 10:07 am[128], R1 had asked whether he could quote for the tester referred to therein.  Mr Fong submitted that there was no evidence that R1 had sent a quote, or there had been a contract.  I would accept this submission, although in my view, R1’s email would show he was soliciting for Testing Business, and this email was part of the chain of emails in Item 29 (I.20), which was relied on by A in relation to soliciting.   

283.  Item 29 (I.20) contained emails from 3-4 March 2014 of subject matter “The quotation and software”[129].  R1 in an email sent from esl@caevolution.com, signing off with “esl” to Johan of Apple on 3 March 2014, 6:43 am, sending a quotation for the tester referred to therein and the updated software[130], and Johan had responded by saying he was in the process of getting a purchase order (PO).  Although there was no evidence that a purchase order had been sent or there was a contract for supply, R1’s said email of 3 March 2014 read together with R1’s email of 27 February 2014 in Item 28(I.22) above in my view clearly showed R1 was soliciting for Testing Business.

284.  Item 30 (I.21) was a continuation of the chain of emails on “The quotation and software”[131], with Johan sending to R1 the software design with all features needed.  R1 replied on 7 March 2014, 5:31am[132], from esl@caevolution.com, signing off as “esl” indicating they had rewritten the software to meet Apple’s updated request, and also raising a query with the model used by Apple, referring to there being two models.  The chain of Emails resulted in Richard of Apple sending an email on 8 March 2014 10:31[133], stating that Apple did not buy the model themselves but that it was provided by and sold by ESL to Apple, and that ESL needed to buy a model and make the system work, and then addressing ESL and saying “Hi ESL, who is the program manager in the project?”.  This was replied to by R1 from esl@caevolution.com, signing off as “esl” explaining the difference between the two models and apologizing for the confusion[134].  I am satisfied that R1 was performing a contract and he was supplying related technical services in relation to Testing Business with Apple.

285.  Item 31 (I.23) consisted of emails on 13 March 2014[135] on Test Items referred to therein with Richard of Apple to “esl” by saying  “Hi ESL, We need you to make x more … test boards urgently”[136].  R1 responded from esl@caevolution.com with two quotation files, one for a tester, and one for test boards[137].  Richard then replied, again saying “Hi ESL”, and asking ESL not to ship the tester and boards, and that the boards would need to go into separate testers and that ESL had to implement a strict discipline to ensure all the boards were properly tested.  Although there was no evidence that there was any follow up, or any contract for supply of these testers and boards had been concluded, there was no doubt that in Richard’s mind, or from Apple’s point of view, they were dealing with ESL, namely R2.  I accept these emails did not show any follow up contact.

286.  As Mr Poon had submitted, the fact that other companies/entities had been mentioned in some of the emails did not alter the fact that there were other emails, in particular those from Apple which referred to R2, namely ESL, and that R1 himself had been involved in many of the emails with Apple in respect of the Testing Business.

287.  Having considered the above emails, I am satisfied that A had proved beyond reasonable doubt that R1 had performed and/or continued to perform various contracts for Testing Business with Apple, as evidenced and particularised by Items 7 & 8 (I.1 &I.2), 9 (I.3), 10 (I.5), 18(I.12), 20 (i.13), 21(I.14), 26 (I.19), 30(I.21).

Emails – in relation to soliciting etc

288.  Apart from those of the emails contained in the 13 Items of Part A relied on by A for its case that R1 had performed and/or continued to perform various contracts for Testing Business with Apple,  there were also emails contained in 8 Items, namely Items 25, 20, 22-24, 27, 29, and 31 ( I.10, 13, 15-17, 18, 20 and 23), which were relied on by A to demonstrate R1 had, through the use of email accounts of  wilson@caevolution.com and/or esl@caevolution.com and/or otherwise, solicited and/or entered into various contracts and/or caused R2 to enter into various contracts for Testing Business with Apple.

289.  Item 25 (I.10) was an email sent by R1 from wilson@caevolution.com and signing off as “sw”, on 25 December 2013,  to a number of personnel at Apple sending them seasonal greetings.  Item 20 (I.13) was the email referred to earlier when R1 said although it was still Chinese New Year, he was still working at ESL, and introducing some one at Santa Clara for convenience of communication by Apple.  I accept these emails would not on its own show any evidence of solicitation.

290.  Item 22(I.15) was an email from Nikhil of Apple to R1 and Nancy introducing a new member of team at Apple, and Item 23 (I.16) was the response sent by R1 from wilson@caevolution.com to Nikhil showed R1, among other things, congratulating the team acquiring a new member, and adding “Any new projects just remember me: I am the always friend of you”[138].  Item 24 (I.17) was an email sent by R1 to Nikhil on 27 August 2013 congratulating Nikhil changing to another group and adding “Pls remember our old friends and try to find whether we can cooperate directly on more projects? Call me or Andrew if any need”[139].  I am satisfied that Items 23 and 24 constituted solicitation by R1 for Testing Business for R2.

291.  Item 27(I.18) consisted of emails 26-27 February 2014[140], with email from Patricia of Apple to “esl”, seeking a quotation for certain boards.  This was responded by R1 from wilson@caevolution.com, signing off as “SW”, attaching 3 board quotations, with ESL stated on the quotations[141].  It was submitted by Mr Fong that there was no soliciting of business by R1, as the request for the quote came from Apple.  I would accept this.

292.  In relation to item 29 (I.20), I had already said earlier, that although there was no evidence that a purchase order had been sent by Apple, or that there was any contract for supply concluded, I was of the view that R1’s email of 3 March 2014, 6:43am, read together with R1’s email of 27 February 2014, 10:07 am, clearly showed R1 was soliciting for Testing Business for R2.  Item 31 (I.23) was also a continuation from R1’s email in relation to quote for the  tester, as mentioned earlier, started off with an email from Richard of Apple saying “Hi ESL”, and responded to by R1 from esl@caevolution.com sending two quotations for the testers and test boards mentioned therein.

293.  To summarise, I am satisfied that A had proved beyond reasonable doubt that Items 23 (I.16), 24 (I.17), and 29 (I.20) and 31 (I. 23) did demonstrate that R1, had through the use of the email accounts of wilson@caevolution.com and/or esl@caevolution.com and/or otherwise, solicited and/or entered into various contracts and/or caused R2 to enter into various contracts for Testing Business with Apple. 

Purchase Orders

294.  A had further relied on 7  items of the Purchase Orders for its case that R1 had solicited, entered into, performed or continuing to perform contracts for Testing Business with Apple.  On these Purchase Orders, the seller was clearly stated to be R2, and the Purchase Order was marked to the attention of R1.

295.  Mr Fong submitted generally that the 7 Purchase Orders were electronic printouts, that there was no evidence that R1 and/or R2 had discussed with Apple and/or requested Apple for the Purchase Orders.  There was no email showing R1 and/or R2 had acknowledged receipt of the Purchase Orders and/or accepted the same.  Further, there had been no confirmation produced by Apple, although under paragraph 3 of Part II of Schedule 1 of the Disclosure Order, Apple was to produce all receipts, invoices and confirmations issued by R2 to Apple.

296.  It was WW’s evidence in re-examination that R1 had control and management of the domain name “caevolution.com” and had established the email system of R2, and that R2 then used caevolution.com email system to develop its business.  I have earlier stated that I am satisfied that R1 had/has the sole control and management of the domain name “caevolution.com”.  Further, according to WW, R1 representing R2 or on R2’s behalf applied to become a seller/supplier to Apple, and having established this, had upon request of Apple signed a NDA to develop business with Apple, and that R1 had sent out quotations in R2’s name to Apple and requested for purchase orders to be issued to R2, and R1 was named on many of the Purchase Orders as the contact person.

297.  The authenticity of the Purchase Orders was never put to WW, nor was it put to WW that the Purchase Orders had not been issued by Apple, or that they had not been received by R1 and R2.   R1 himself did not challenge the authenticity of the electronic copies in WX1-2946, nor was it his evidence in WX1-2946 that he was not aware of the Purchase Orders.  In fact, as seen later in this judgment, at least 3 of the Purchase Orders (Items 16, 32 & 33) produced by Apple had shown details of those Purchase Orders being sent to R1 by email at wilson@caevolution.com. Further, according to the Spreadsheet prepared by Apple, the invoices issued under the Purchase Orders had been paid on the dates stated therein.  The Vendor’s name of Evolution Solution Limited, namely R2 and Vendor’s number 0080150064 for each invoice was also clearly stated on the Spreadsheet.  There were no other entities stated therein.  

298.  Having considered all the evidence, for the Purchase Orders issued by Apple to R2 at its registered address in Hong Kong, and marked to the attention of R1, although there was no actual email showing that R1 and/or R2 had acknowledged receipt and/or accepted each of the Purchase Orders or that they had sent any confirmation, I am satisfied beyond reasonable doubt that the 7 Purchase Orders were duly sent by Apple, and duly received by R1 and R2 or otherwise brought to their attention, and further that R2 had performed the contract/s with Apple for the purchases and had sent invoices to Apple for payment.  Otherwise, R2 would not have been paid by Apple on the respective payment dates stated on the Spreadsheet.

299.  The 7 Purchase Orders were respectively Items 4, 12, 14, 16, 17, 32, and 33 as listed in Annexure B.

300.  5 of the Purchase Orders, namely Items 4,12,14,16, and 17 were Blanket Purchase Orders (“BPO”) issued to R2 and marked for the attention of R1.  Items 32 and 33 were Standard Purchase Orders (“SPO”).

301.  Item 4 was a BPO no 6000014305 dated 25 July 2012 and the period (“BPO Period”) was from 15 August 2012-30 November 2013[142].  Although under “Please Deliver To:” it stated “see item detail”, no details had been set out.  There was no description or quantity of the item/s to be purchased.  The BPO contained provisions including that the BPO should not obligate Apple to make any purchase whatsoever, but merely established the terms and conditions controlling such purchases in the event they occurred, and that invoices submitted to Apple beyond the expiration date of the BPO would be returned to the Supplier, and further listed the names of the Apple “Authorised Users” who could request for services and/or products against the BPO (“BPO Provisions”).  Item 12 was a BPO no 6000020917 dated 25 September 2012 and the BPO Period was from 20 December 2012-20 December 2013[143].  Item 12 was similar to Item 4. 

302.  Item 14 was a BPO no 6000025581 dated 7 November 2012[144], with BPO Period 20 December 2012 to 20 December 2013, but there was a description of the Material with delivery date 20 December 2012 and then under “Shipping Instructions”, it stated “To follow PO”.  Item 16 was a BPO no 6000026437 dated 27 November 2012 and the BPO Period was from 20 December 2012-20 December 2013[145].  Similarly, there was description of Material with delivery date 20 December 2012.  This BPO was in fact sent to R1 at wilson@caevolution.com by email.  Item 17 was a BPO no 6000026339 dated 14 December 2012, with BPO Period from 2 January 2013-2 January 2014[146].  Again, there was a description of Material with delivery date 1 January February 2013, but also bore the word “Contingency” above the delivery date.   

303.  Item 32 was not a BPO, but a SPO of No 6000100102, and dated 14 April 2014[147] and a full description of the “Material” with “Quantity”, “Unit Price”, and “Net Value” stated.  There was reference to the Quote dated 10 April 2014, and details of “Shipping Address”, and “Delivery Date”.  Item 32 was also sent to R1 at wilson@caevolution.com on 14 March 2014 by Apple.   Item 33 was also a SPO of No 6000127718, dated 24 September 2014[148], with the description of the Material, Quantity, Unit Price and Net Value all stated, and there was reference to the Quote dated 18 September 2014.  Delivery Address and Delivery Date of 5 October 2014 were also stated.  Item 33 was also sent to R1 at wilson@caevolution.com on 24 September 2014 by Apple.

304.  Mr Fong had submitted that as seen in the Spreadsheet, for Item 5, some of the invoices thereunder were issued at different dates, for Items 12, 14, 16, 17, no request in writing made by the “Authorised Users/Requestors” had been disclosed, and for Items 32, and 33, the Quotes referred to therein had not been disclosed.

305.  Whether some of the invoices set out in the Spreadsheet had same numbers but issued on different dates did not affect them having been paid by Apple.  So far as the BPOs were concerned, the BPO Provisions had made it clear that the BPOs only established the terms and conditions controlling such purchases in the event they occurred during the effective BPO Period.  The 5 BPOs were sent to R2 marked to the attention R1.  As mentioned earlier in this judgment, R1 was the contact person for “Sales” for R2 on the registered Supplier/Vendor/Seller for Apple in its system.  The Spreadsheet showed that various invoices had been issued by R2 under each of the BPOs and they were paid by Apple.  I accept that there was no evidence that the invoices under the 2 SPOs had been issued or paid. 

306.  However, having considered the 7 Purchase Orders, although they may not constitute solicitation on the face of it, I am satisfied beyond reasonable doubt that R1 had caused R2 to enter into, perform and/or continued to perform various contracts for Testing Business with Apple.

Particulars of Occurrences of R2’s Breaches of paragraph 2 of the Amended Injunction Order

307.  A had relied on 14 items of the Emails in support of its case that R2 had, through R1 and/or Vivian and/or other individuals and via a series of email accounts bearing the domain name of “caevolution.com” which had at all material times under the its use, control and management, performed and/or continued to perform various contracts for Testing Business with Apple. 

308.  The 14 items of the Emails had included those 13 items concerning A’s case against R1 which had been set out earlier.  The additional item relied on by A in its case against R2 was Item 2 (I.8), which consisted of emails from 17-19 May 2012[149].  As Item 2 (I.8) took place at about or shortly after service of the Ex Parte Orders on R2’s registered office in Hong Kong, I am prepared to disregard this item.

309.  So far as the other 13 items were concerned, in light of my finding against R1, I am satisfied that they also supported A’s case against R2, in that R2, had through R1 and/or Vivian and/or other individuals and through those emails performed and/or continued to perform various contracts for Testing Business with Apple. 

310.  A had also relied on 14  items of the Emails for its case that R2, had through R1 and/or Vivian and/or other individuals and via a series of email accounts bearing the domain name of “caevolution.com” solicited and/or entered into various contracts for Testing Business with Apple.

311.  Item 5 (I.7)  consisted of  the email sent by Vivian on 25 July 2012 11:55 to Apple, as seen earlier, in which she had said she was from R2, although signing off as SZESL. In her email, Vivian had asked Alex whether there was “new chance” about the fixtures mentioned therein and suggested signing NDA with Apple.  Vivian then sent another follow up email the next day asking how to cooperate with Apple.  Item 5 (I.7) had led to Item 6 (I.9), also seen earlier, indicated this led to R2 signing the NDA with Apple between 8-9 August 2012 and the fixtures being shipped. 

312.  Item 11(I.4) consisted of emails between 12-25 September 2012[150], and started off with Vivian sending an email on 12 September 2012, 10:50 am to Apple and reporting that 137 sets of fixtures had been shipped to FXCD, and that she showed appreciation for Alex’s help in the project and indicated they would be pleased to work with Apple on other projects.  Mr Yu had argued that putting A’s case to the highest, this only showed soliciting by Vivian on behalf of SZESL, as she had signed off with SZESL.  However, as I have said earlier, Vivian was working for both R2 and SZESL, and also as seen earlier, this was the chain of emails showing Vivian did send a quote, which later led to the preparation of a purchase order by Apple which was made out to R2.

313.  A had also relied on Item 20 (I.13), again seen earlier, in which R1 said he was working at ESL during Chinese New Year, and had located some one in Santa Clara to make it more convenient for communication with Apple.  I have already found that this email did not in itself constitute solicitation.

314.  As for Items 22, 23 and 24 (I.15, 16 & 17), I have already found there was solicitation by R1 in those emails for a contract for Testing Business on behalf of R2.

315.  Item 27 (I.18) was the Email in which R1 had asked Nikhil to remember him as the “always friend”.  I have already said I am satisfied that Item 29 (I.20) showed solicitation by R1.  I am satisfied that Items 27 and 29 showed solicitation by R1 on behalf of R2.  So far as Item 31 (I.23), this had been considered earlier, and there was no evidence that there was any follow up to Item 31.

316.  I have disregarded Item 2(I.8) and the email of 18 January 2012 (I.11) as they were prior to the date of the Ex Parte Orders.

317.  Having considered the 14 items of the Emails relied on by A,  I am satisfied beyond reasonable doubt that R2 had through R1 and/or Vivian and/or other individuals and via a series of email accounts bearing the domain name of “caevolution.com”, namely Items 5 (I.7), 6 (I.9), 22(I.15), 23 (I.16), 24 (I.17), 27 (I.18) and 29 (I.20), solicited and/or entered into various contracts for Testing Business with Apple.

318.  A also relied on the all the 10 Purchase Orders under Part B of Paragraph 14 of the Amended Statement for its case that R2 had solicited, entered into, performed and/or continued to perform various contracts for Testing Business with Apple.  2 of the Purchase Orders were prior to 26 July 2012, the date latest by which I have found R1 had knowledge of consequence of the Orders.  The invoices thereunder were also issued prior to 26 July 2012.  I am thus prepared to disregard the Purchase Orders 6000004815 dated 14 May 2012 and 6000002094 dated 24 May 2012. 

319.  Out of the remaining 8 Purchase Orders, although the BPO No 6000014305 dated 25 July 2012 was dated one day before 26 July 2012, the BPO Period was from 15 August 2012-30 November 2013 and invoices were issued by R2 to Apple in September and October 2012.  As seen earlier, 7 of out of the remaining 8 Purchase Orders were sent to ESL to the attention of R1, and only one was sent to ESL to the attention of Vivian.  I have already found that Vivian was working for both SZESL and ESL.

320.  The points raised by Mr Yu were similar to those raised by Mr Fong.  Mr Yu had also argued that no actual copies of the invoices had been produced by Apple.  However, Apple had instead prepared a Spreadsheet based on its own record and set out the details of the various invoices.  Under the Disclosure Order, Apple by its authorized officer had to make an affirmation to comply with the terms of the Disclosure Order, and this had been done.

321.  I am satisfied beyond reasonable doubt that R2 had entered into, performed and/or continued to perform various contracts for Testing Business with Apple by way of the 8 Purchase Orders after 26 July 2012.

Whether R1 was in breach of the Anton Piller Order

322.  It was A’s case that R1 and R2 had been in breach of the following paragraphs of the Anton Piller Order:

(i) Paragraphs 4(1) and 4(2) ;

(ii) Further, paragraph 5(1);

(iii) Further, paragraph 5(2);

(iv) Further or alternatively, also paragraph 6(2)

323.  There were 5 Schedules in the Anton Piller Order, and Schedule 2 consisted of  a list of items  (“Listed Items”), which briefly were:

(1) All company records of R2;

(2) All books, accounts, ledgers, audited accounts and bank account records and statements of R2 or its associated persons, partners and/or companies;

(3) All price quotations, purchase orders, invoices, receipts and agreements incidental to R2’s business (or that of its associated persons, partners and/or companies);

(4) All business correspondence and/or records of business correspondence and communications of R1 and R2 and that of their associated persons, partners and/or companies, whether arising out of the use of email accounts under the domain name of “caevolution.com”;

(5) All domain name registration, service agreement(s) and records between R1 and the relevant internet service provider in relation to the domain name of “caevolution.com”

324.  Paragraph 4 (1) of the Anton Piller Order provided that Rs must immediately hand over to A’s solicitors any of the Listed Items which were in their  possession or under their control save for any computer or hard disk integral to any computer. Paragraph 4(2) provided, among other things, if any of the Listed Items existed only in computer readable form, Rs must immediately give A’s solicitors effective access to the computers to enable them to be searched, or cause the Listed Items to be printed out, and all reasonable steps should be taken by A to ensure that no damage would be done to any computer or data.

325.  Paragraph 5 was in relation to disclosure of information.  Rs must immediately inform A’s solicitors (a) where all the Listed Items were; and (b) the name, address of everyone who had supplied Rs, or to whom Rs had supplied, with the Listed Items, and full details of the dates and quantities of every such supply and offer.  Under paragraph 5 (2), Rs also had to swear an affidavit confirming the disclosure.

326.  Under Paragraph 6(2), among other things, Rs were not to destroy, tamper with, cancel or part with possession, power, custody or control of the Listed Items.

327.  There was no stipulation in the Anton Piller Order to which period the Listed Items related.  A’s solicitors had written 20 August 2013 to R1’s then solicitors referring to the R1’s List of Documents pointing out that R1 had not made disclosure of certain documents in the List of Documents, which included correspondence between Rs and A’s clients, between June 2011 and the then date of the letter, purchase orders, invoices, receipts etc to make for the period October 2011 to the then date of the letter.  In this letter, A’s solicitors had further reminded R1 of his obligation under paragraphs 4 and 5 of the Anton Piller Orders to make disclosure.  R1’s then solicitors had replied on 9 September 2013to say that there was no basis upon which A was entitled to seek discovery of the requested documents, and further those documents were not in R1’s possession, custody or power[151].

328.  A similar letter was also sent by A’s solicitors to solicitors for R2 and R3 on 20 August 2013, and they had replied on 27 August 2013 to say they had done their part and disclosure under the Rules of the High Court, and in relation to the Anton Piller Order, R2’s and R3’s solicitors had further said that at the hearing on 15 June 2012 before DHCJ Lok, as he then was, A’s Counsel had undertaken that A would not enforce the Anton Piller Order[152].  A had denied that there was such an undertaking from his Counsel.  Anyway, no such undertaking was set out in the order made on 15 June 2012, and I find no sufficient evidence that A’s Counsel had given the undertaking as alleged by Rs.

329.  Mr Fong had submitted that the crucial question in so far as R1 was concerned, was whether the Listed Items were in the possession or control of R1, since it was A’s case that R3 was the sole director and shareholder of R2. 

330.  As I have earlier found that R2 is and was at all material times R1’s company, and/or R1 had the control and management of R1 through R3 or otherwise,  I am satisfied beyond reasonable doubt that the company records and books, accounts, ledgers, bank statements etc of R2 were in R1’s possession, custody or power, or control.

331.  As for price quotations, the emails indicated that R1 had sent price quotations to Apple, and in particular, his email of 27 February 2014, 17:58:15, to Patricia of Apple, indicated that he was the one who prepared the quotations.  At least 7 of the Purchase Orders were sent to R2 and marked to the attention of R1.  As I have found earlier, he must have received the same and these documents should be within his possession, custody, power, or control.

332.  Further, as seen earlier, there were many emails sent by R1 from wilson@caevolution.com or esl@caevolution.com, and they were in my view all business correspondence/communications.  Mr Fong had submitted that this did not necessarily mean that R1 was the one in control of the emailing server.  I have already found earlier that R1 was the one who had the sole control and management of the domain name.  I am satisfied that he was also in control and management of the email system under that domain name.  I am satisfied that the emails were either in R1’s possession or custody, or he had the power and control to retrieve information being stored in the server.

333.  R1 should also have in his possession and custody, or power and control the domain name registration, service agreement(s) and records, being the registrant, the administration person, the billing person, and technical person.

334.  To summarise, I am satisfied that A had proved beyond reasonable doubt that the Listed Items were in the possession and custody of R1, or within R1’s power and control to obtain and disclose.  In short, I am satisfied beyond reasonable doubt that R1 had the ability to comply with the Anton Piller Order and that he had failed to comply with paragraph 4(1) and (2), and paragraph 5(1) and (2).  I do not find there was sufficient evidence that R1 had destroyed, tampered with, cancelled or parted with possession, power, custody, or control of the Listed Items, save that the originals, if any, of price quotations, invoices, receipts and business correspondence  could have been sent to the addressees. In any event, I am not satisfied that R1 was in breach of paragraph 6(2) of the Anton Piller Order.

335.  As for R2, the main argument put forward by Mr Yu was that there had been inordinate, unreasonable and deliberate delay, and that A had been accumulating contempt grounds from May 2012 until 11 November 214 with an ulterior purpose which could amount to an abuse of court process.

336.  Mr Yu had referred to the following legal principles:

(i) Contempt proceedings should be initiated within a reasonable time of a party obtaining knowledge of a breach of a court order. There must be good reasons to show why there was a failure to act at a much earlier stage: Taylor v Ribby Hall Leisure Ltd [1988] WLR 400, 410A-C and Fraser v Morrison 2009 MBQB 185, [8];

(ii) An applicant should bring contempt proceedings in a timely fashion and in general, the Court would not allow a party to accumulate contempt grounds: The Point on the Bow Development Ltd v William Kelly & Sons Plumbing Contractors Ltd 2006 ABQB 775, [35], [115(4)]; and

337.  There was no real dispute on the above general principles.  However, as seen in Aqua-Leisure Industries Inc & Anor v Aqua Splash Ltd (No 2) HCA 18928/1998, 14 December 2001, it was held by DHCJ To (as he then was) that committal proceedings should not be dismissed as an abuse of process even though the breach occurred a long time ago, as the purpose of such proceedings was to prevent an interference in the due administration of justice and an order of the court must be treated with seriousness[153].

338.  The entry and search part of the Anton Piller Order was executed (unsuccessfully) on 16 May 2012[154].  Mr Yu argued that it was clearly known to A and its then solicitors that Rs had to act immediately in compliance with the terms of the Anton Piller Order, but A and its then solicitors slept on its rights for an initial two months until the A’s then solicitors wrote to Rs on 13 July 2012 reminding them to comply with paragraphs 4 and 5 of the Anton Piller Order[155] and imposed a deadline, failing which A threatened to initiate contempt proceedings without further notice.

339.  Thereafter, no further action was taken until the letters in August 2013, when A’s present solicitors wrote to Rs again.

340.  The question of delay had already been raised by Mr Yu on behalf of R2 and R3 at the time when they made the application to stay the present of proceedings.  As seen in paragraph 79 of this court’s judgment of  10 February 2015 in these proceedings, Mr Yu had at that time submitted that there had been inordinate delay as A took no action to enforce the two orders until after the commencement of the Main Trial.  Thus, it was not merely the Amended Injunction Order that he was making submissions on at that time, as he had argued during this trial. 

341.  Anyway, as stated in paragraph 88 of my earlier judgment, having considered the volume of the 1^st batch of the Apple Documents, and the time involved in going through those documents at the same time as preparing for the Main Trial, and also further documents being only disclosed on 24 October 2014, I was of the view that there had not been any inordinate delay on the part of A in issuing these proceedings.   The Apple Documents were evidence for A’s case in relation to R2’s breach of the Anton Piller Order, at least in so far as items (2) and (4) of the Listed Items were concerned, and they were not available until after the Discovery Order.   I maintain the same view now as that in the earlier judgment, and find that there was no inordinate delay on the part of A in issuing these proceedings, whether in respect of the breach of the Amended Injunction Order or the Anton Piller Order.  

342.  As Mr Yu had himself submitted, R2 did disclose copies of the incorporation form, certificate of incorporation, certificate of change of name and its annual return filed on 29 September 2012, I have no doubt that item (1)  of the Listed Items, namely company records were in the possession, custody, power and control of R2 to produce/to obtain. Further, I am also in no doubt that item (2), namely the financial statements of R2 were also in the possession, custody, power and control of R2 to produce/to obtain.  As for item (3), quotations sent on behalf of R2 to Apple, purchase orders sent to R2 by Apple, copies of invoices and/or receipts sent by R2 to Apple, agreements incidental to R2 must also be within the possession, custody, power and control of R2 to obtain and to produce.  In particular, the Purchase Orders were made out to R2’s name, and invoices had been sent by R2 to Apple.

343.  As for item (4), namely business correspondence etc, I have already found earlier, that R2 had the use of the domain name of “caevolution.com”, and it is my finding that R1, Vivian and other staff were authorized by R2 to send their emails on behalf of R2 and again these documents were within the possession, custody, power of R2 to produce.

344.  So far as item (5) is concerned, namely the domain records etc, my finding is that they were in R1’s possession, custody, power and control to produce/obtain, and I would accept that such may not be in possession or custody of R2, or within its power and control to obtain.

345.  To summarise,  I am satisfied beyond reasonable doubt that , in relation to Items (1) to (4) of the Listed Items, R2 was in breach of paragraphs 4(1) and (2) and 5(1) of the Anton Piller Order.  Again, I find there was no sufficient evidence that R2 was in breach of paragraph 6(2). R1 and R2 had not complied with the Anton Piller Order.

Merits of A’s case against R3

346.  As for A’s case against R3, as I have earlier in this judgment come to the view that I am not prepared to exercise my discretion to dispense with personal service of the Orders on R3.  A’s case against R3 thus fails on this ground.  I will nevertheless deal briefly with the merits of A’s case against R3.

347.  A’s case against R3 was based on mainly:

(i) She was and is the sole shareholder and director of R2;

(ii) Her own evidence in her witness statement filed in the Main Action, as pleaded in the Amended OS and set out in the Amended Statement;

(iii) She had been exercising her position as sole director of R2 through managing R2’s bank accounts as shown in the HSBC Letter.

348.  R3’s witness statement in the Main Action was not produced to this court. As I have mentioned earlier, what was pleaded by A was that R3 had stated in her witness statement that R2 was set up by her, and that R2’s business was established by her. Apart from HY1-797 in Bundle D, R3 had only filed on affirmation in these proceedings for the Setting Aside Applications.  None of the Emails was sent by R3, nor did they implicate R3.  Although R3 was/is the registered shareholder and director of R2, I have found, as R1 himself had said, that R2 was R1’s company, or that R2 was under R1’s management and control through R3 or otherwise.

349.  I am of the view that simply being in name the sole director and sole shareholder of R2, and having signed the HSBC Letter would not necessarily mean that R3 was able to prevent those failures as pleaded by A, or that there was sufficient evidence that she had aided and abetted R2 in defying the Orders.  

350.  Having considered the evidence, I am not able to say I am satisfied beyond reasonable doubt that R3 was guilty of contempt of the Orders.

Conclusion

351.  In light of the above, I am only satisfied that A has proved beyond reasonable doubt that R1 and R2 were respectively in breach of the Amended Injunction Order and the Anton Piller Order.  I thus find R1 and R2 guilty of having committed a civil contempt of the Orders.

352.  A had sought a committal order against R1, and also an order that A be at liberty to issue Writ of Sequestration directed to the commissioners therein named to sequester all the real and personal property of R1 and R2, or alternatively an order of fine or any other appropriate relief as this court deems fit.

353.  I will hear further submissions from parties before I arrive at a decision in relation to penalty and appropriate orders, including costs.  Accordingly, I direct the parties to fix a further date before this court within the next month, estimated length of hearing of one day.  I further direct that R1 and R2 shall attend personally at this hearing.

[1] A:73-84

[2] Paras 3 and 4, A:96

[3] A:101-102

[4] A draft copy of WW16-797 was exhibited to in A’s solicitor’s affirmation in support for the application for Ex Parte Leave and the original, B: 1-13, filed later on 24 November 2014.

[5] N1:20-30; Exhibits at  N2:44-52

[6] N1:9-19; Exhibits therein can be found in N2/33-43

[7] A:115 para 3

[8] Hong Kong Civil Procedure 2015, Vol 1, p 776 §38/2/5

[9] For meaning of Testing Business, see subsequent paragraphs in this judgment on this issue

[10] C2:435-436

[11] A:73-74

[12] A:86-87

[13] At para 28, p 14

[14] See para 25, Chou Yi Feng, and  p 1261H, Davy International

[15] At 102, F-G

[16] D:10

[17] See D:41-49

[18] At para 20, p 104

[19] At paras 32-37

[20] See para 28

[21] See para 28

[22] C:387

[23] See para 7, B:16

[24] At para 5(1), D:52

[25] D:13-14

[26] D:15-40

[27] D:15 para 1

[28] Paras 72,73, D:137

[29] D:48-50

[30] D50a-50c

[31] D:51-67

[32] D:52 para 3

[33] D:52 para 5(1)

[34] ibid

[35] D:53 para 5(3)

[36] D:58 para 24

[37] D:54, para 11, D:57 paras 20-21

[38] D:65 paras 53-54

[39] C:87-90

[40] D:65, paras 53-54

[41] D:68-71

[42] D:72-78

[43] D:79

[44] D:80-81

[45] D:82

[46] D:87

[47] D:86a-86c

[48] D:86a para1

[49] At para 35, pg 16-17

[50] At para 17, B:27

[51] At paras 31 and 39

[52] At para 40 p 313

[53] As mentioned earlier, at para 17, B:27

[54] At para 35, pg 16-17

[55] D:83-86

[56] D82a-82g

[57] D:82d para6(D)

[58] D:82d para7

[59] D:82d para 8

[60] D:82b para1

[61] D:82d para7

[62] At para 8, p 307, and para 23, p 308

[63] See para 22

[64] A-C, p 840

[65] F-H, p 860

[66] See last para, p 852

[67] Last para, p 842

[68] 3^rd para, p855

[69] Last para, p 855

[70] N2:67-68

[71] At paras 28-34

[72] See last para, N2:59

[73] At 1^st para, p853

[74] At 3^rd para, p853

[75] N2:36-37

[76] N2:42-43

[77] N2:109

[78] N2:107-108

[79] In para 4, B:21; para 17, B:27

[80] A:104-106

[81] N2:45

[82] [C1/94]

[83] At p103

[84] See C1:208

[85] C1:110

[86] See 3^rd, 4^th bullet point of para 8, B:24

[87] C1:204

[88] See para 14A (a), A:14

[89] See para 14A (a), A:52

[90] Paras 13-23, D:18-21

[91] C1:132

[92] Para 8, B:17

[93] C1:126-132, the earliest one on C1:132

[94] C1:127

[95] C1:134

[96] C:2-335

[97] See para 5 (1), D:52

[98] See para 54, D:65

[99] Para 14(a), B:35

[100] C1:110-114

[101] C1:111

[102] C2:138

[103] C1:111, 113 and 114

[104] C2:389-391

[105] C2:433

[106] C2:397-399

[107] C2:398

[108] C2:389

[109] See para 14A(a), A:52

[110] Annexure A, R1’s Closing

[111] see C1:186

[112] see C1:185, 188, 205

[113] See C1:201

[114] C1/201

[115] C1:99-107

[116] C1:101

[117] C1:103

[118] C1:108

[119] C1:119

[120] C1-118

[121] C1:141-155

[122] C1:142

[123] C1:156-157

[124] C1:158-174

[125] C1:185-188

[126] C1:187

[127] C:197-198

[128] C1:197

[129] C1:189-190

[130] C1:190

[131] C1:191-196

[132] C1:195

[133] C1:192

[134] C1: 191-196

[135] C1:199-200

[136] C1:199-200

[137] C1:199

[138] C1:176

[139] C1:177

[140] C1:178-184

[141] C1:178, C180-184

[142] C2:329-332

[143] C2:336-339

[144] C2:341-345

[145] C2:363-367

[146] C2:346-350

[147] C2:351-354

[148] C2:355-356

[149] C:128-132

[150] C1:110-114

[151] C2:377

[152] C2:384-385

[153] See Headnote (4)

[154] C1:46

[155] [N1/31]