AXA CHINA REGION INSURANCE CO. LTD. AND ANOTHER v. LI YU PING, ELLEN

CACV 217/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 217 OF 2002

(ON APPEAL FROM HCA 9975 OF 2000)

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REASONS FOR JUDGMENT

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Hon Stock JA (delivering the reasons of the Court):

Background

1 This is an appeal against the decision of Deputy High Court Judge Longley on 17 April 2002 that the defendant was in contempt of court, and against the order which he then made that she be committed to prison for that contempt for a period of two months.

2 The defendant challenges the validity of the committal order, failing success on which point, she challenges the severity of the penalty imposed. On 12 June 2002, we dismissed the appeal, and said that we would provide reasons. This we now do.

3 The plaintiffs (to whom we shall also refer as 'AXA') carry on business in Hong Kong as insurers, and from 1986 engaged the defendant as an insurance agent who sold policies, mainly life insurance policies, from which she earned commission, being part of the premiums paid by clients whom she had secured. On 17 September 1999, she tendered her resignation, but her employers, believing that she had induced fellow agents to leave the company, terminated her contract, purportedly for cause, on 7 October 1999. On 2 November 1999, the defendant was engaged as an agent by another insurance company called Winterthur Swiss (Asia) Ltd ('Winterthur'). These proceedings have their root primarily in what happened after the defendant joined Winterthur, because it was AXA's case that the defendant was targeting AXA policy holders with the use of AXA documents which she had wrongfully taken when she left AXA, and was trying to induce those policy holders to surrender AXA policies and take out new ones with Winterthur. The plaintiffs had concrete evidence to that effect, in particular from a lady who was, or had been, the appellant's secretary at Winterthur.

4 Accordingly, on 14 November 2000, the plaintiffs issued a writ against the defendant by which they claimed damages, or an account of profits, in respect of the defendant's wrongful taking away of, and refusal to return to the plaintiffs, client lists, proposals, white cards and application forms which, they said, belonged to them; and they claimed delivery up of all such documents in her possession, custody or control. The contract of employment with the defendant had stipulated that upon termination of her employment contract, she was required to return to the plaintiffs all papers in her possession or control which belonged to them.

The orders

5 On 14 November 2000, upon an ex parte application by the plaintiffs, Yeung J, as he then was, issued an injunction in the following terms:

"IT IS HEREBY ORDERED that:-

1. The Defendant (whether by herself, her employees or agents or otherwise) be restrained until after the hearing of the Summons returnable on 17th November 2000 at 10 am or further Order in the meantime from disclosing, divulging or making any use of:

(a) any of the following documents belonging to the Plaintiffs, namely, Client Lists, Proposals, White Cards, Application Forms and all other documents belonging to the Plaintiffs (or either of them) containing information relating to holders or former holders of life insurance policies and/or insured persons thereunder issued by either or the Plaintiffs; or

(b) any of the information contained in such documents.

2. The Defendant shall deliver up to the Plaintiffs' solicitors not later than 5 pm on Thursday 16 November 2000 all such documents as aforesaid and all copies thereof in her possession, custody or control.

...." (Emphasis added).

The defendant was by the same order given liberty to apply, upon twenty four hours notice, to discharge the injunction. No such application was made.

6 The order was endorsed with a penal notice as follows:

"If you, the within named LI YU PING, Ellen, neglect to obey this order by the time stated and to abstain from doing the acts specified, you may be held to be in contempt of Court and liable to imprisonment."

That order, thus endorsed, was personally served upon the defendant that day, that is, 14 November 2000.

7 On the evening of 16 November, the defendant caused to be delivered documents to the plaintiffs' solicitors, supposedly in compliance with the order of 14 November. The fact that the delivery was a little later than 5 pm is not a point taken. However, the plaintiffs' case is that the defendant did not deliver up all the documents in her possession; a contention which was denied by the defendant, so that Judge Longley, on the plaintiffs' motion to commit, heard evidence to determine that issue. The judge found that the plaintiffs' case was made out in relation to several identified lists or groups of documents. In so far as this appeal at one stage challenged that finding, that challenge is no longer pursued. There is no doubt, therefore, that by the evening of 16 November 2000, the defendant was in breach of the order made by Yeung J. No further delivery of documents was ever made.

8 What next happened, procedurally, is important to this appeal, for on 17 November 2000 a further order was made; on this occasion by Deputy High Court Judge Muttrie. 17 November was the return day provided by the order of 14 November. On that day, both the plaintiffs and the defendant appeared by counsel before Judge Muttrie; and, by consent, an order was made in the following terms:

"1. The hearing of the Plaintiffs' Summons dated the 14th day of November 2000 be adjourned to a date to be fixed;

2. A timetable for submission of evidence be as follows:

....

3. The Order for delivery up in paragraph 2 of the Order dated 14th November 2000 be varied in that the words 'not later than 5.00 p.m. on Thursday, 16th November 2000' be replaced by 'not later than 5.00 p.m. on Monday, 27th November 2000';

4. The Defendant shall not later than 5.00 p.m. Monday, 27th November 2000 make and file an Affirmation verifying compliance with the said Order for delivery up as extended by this Order.

5. The injunction granted by paragraph 1 of the Order dated 14th November 2000 be continued until after the adjourned hearing of the Summons dated 14th November 2000 or further Order in the meantime;

6. The Defendant is to be at liberty to apply to the Court to discharge the said Order for delivery up as extended by this Order on 48 hours' prior notice to the Plaintiffs' solicitors;

...." (Emphasis added).

9 We are not told in terms at whose initiative that variation of time for delivery up, by which 16 November was replaced by 27 November, was proposed, but the suggestion made at this hearing, not gainsaid, was that the defendant, although asserting that she had delivered all documents in her possession, was asking for more time to make sure that there was nothing further. Whatever the precise reasoning, one can safely assume that the variation was sought by her, and for her benefit.

10 Judge Muttrie's order was not served personally upon the defendant, but upon her solicitors by hand on 22 November, and the copy thus served did not have endorsed upon it a penal notice, in other words, a notice described by Ord. 45 r7(4) of the Rules of the High Court. It is upon this point that this appeal, the issue of penalty aside, turns, for it is argued that the failure to serve this second order, the order of 17 November, personally upon the defendant, and the failure to endorse it with a penal notice, rendered the court below powerless to make a valid order of committal, for which reason this Court is bound, it is said, to set that order aside. To the merits of the point we shall shortly return.

The application for leave

11 No further documents were delivered up by the defendant between 16 and 27 November. That the defendant knew full well of the order of 17 November is not doubted. Indeed, she filed an affirmation dated 27 November which she expressed, in its first paragraph, to be made "in compliance with paragraph 4 of the order of Judge Muttrie dated 17 November 2000". In that affirmation she said: "I confirm that I have complied with the order for delivery up by paragraph 2 of the ex parte order of Mr Justice Yeung dated 14 November 2000."

12 The defendant had not complied with the order, even by 27 November. She continued in breach, as she does still to this very day, and in September 2001 a Statement was filed pursuant to Ord. 52 r2(2) of the Rules of the High Court, by which the plaintiffs sought the court's leave to apply for an order of committal of the defendant. There had been a delay since November 2000, but the plaintiffs explain that delay on the basis that in the interim they came into possession of further and cogent evidence which put to rest such reservations they had previously entertained whether they could meet the requisite standard of proof in contempt proceedings. There had, in any event, been proceedings in the meantime with the details of which we need not be concerned, save to record that on 27 December 2000, at the substantive hearing of the 14 November summons, a further order was made for delivery up, and several affirmations followed from the defendant. By September 2001, the plaintiffs had clearly had enough.

13 The grounds specified in that Statement were:

"The grounds on which the reliefs are sought are that the Defendant was and is in contempt of this Honourable Court in that the Defendant did breach and further or alternatively did fail to comply with the Order of the Honourable Mr. Justice Yeung made on 14th November 2000 (the 'Order') (a copy of which was served on her personally on 14th November 2000), where by paragraph 2 thereof she was ordered to deliver up to the Plaintiffs' solicitors any of the following documents belonging to the Plaintiffs, namely, ... [the documents are described] ... by 5.00 p.m. on 16th November 2000 (which was extended to 5.00 p.m. on 27th November 2000 by the order of Deputy Judge Muttrie dated 17th November 2000,) in that the Defendant has failed to deliver up, whether within the time specified in the Order and as extended as aforesaid or at all, all of the documents (and copies thereof) ordered to be delivered up which were in her possession, custody or control."

14 There was filed an affirmation in support of the application for leave by a Mr Hok Man Choy of the first plaintiff company, in which he drew to the attention of the court the two orders and their history, and specifically informed the court that the order of 17 November 2000 had not been served personally upon the defendant, and added that:

"I have been advised and verily believe that such personal service is prima facie required under the Rules of the High Court (Cap. 4), Order 45, rule 7(5). If, and in so far as is necessary, AXA apply for an order dispensing with such service under Order 45, rule 7(7). The order of Deputy Judge Muttrie is only, relevantly, to extend time. The substantive order for delivery up remains the Order, which was served personally on the Defendant with a penal notice endorsed [TAB 3]. Further, there is no doubt that the Defendant was aware of the terms of the order of Deputy Judge Muttrie dated 17th November 2000, because she did make an Affirmation (her 1st, dated 27th November 2000 [TAB 5]), complying with the requirement of the 17th November 2000 order that she make an affirmation verifying compliance with the delivery up order by 27th November 2000. Further, there is no doubt that the Defendant was fully aware of the consequences of any non-compliance. She was personally served with the Order with a penal notice endorsed, and she affirmed that she was aware of the consequence: see paragraph 29 of her 2nd Affirmation [TAB 6]."

15 The second affirmation there referred to is dated 8 December 2000, the relevant contents of which we shall later recite.

16 The judge seized of the application for leave did not make an order which dispensed with personal service of the order of 17 November. It is not now disputed that he had the power to do so. We think that it must have been an oversight, which is not surprising given that the application to dispense with service was not the subject of a summons but was hidden, as it were, in the affirmation in support of leave. Leave to apply for an order of committal was granted by Yeung J by order dated 12 September 2001.

The Notice of Motion

17 Leave was followed by a Notice of Motion dated 20 September 2001. The contempt there alleged was the breach of, and the failure to comply with:

"... the Order of the Honourable Mr. Justice Yeung made on 14th November 2000 (the 'Order') (a copy of which was served on her personally on 14th November 2000), where by paragraph 2 thereof she was ordered to deliver up to the Plaintiffs' solicitors any of the following documents belonging to the Plaintiffs, namely, (... [documents are listed] ...) by 5.00 p.m. on 16th November 2000 (which was extended to 5.00 p.m. on 27th November 2000 by the order of Deputy Judge Muttrie dated 17th November 2000,) in that the Defendant has failed to deliver up, whether within the time specified in the Order and as extended as aforesaid or at all, all of the documents (and copies thereof) ordered to be delivered up which were in her possession, custody or control ...."

The hearing

18 This Motion was followed by a contested hearing which lasted thirteen days before Judge Longley, spread between 4 February 2002 and 21 March 2002.

19 The judge, on 17 April 2002, made his findings, which were that the defendant was in contempt of court in breaching the order by her failure to deliver those white cards and certain proposals to which our summary of the evidence, at [52] and [53] in this judgment, refers. He was aware of the order of Judge Muttrie of 17 November, and makes specific reference to the fact that the order of 14 November had been attached with a penal notice. The judge had heard evidence from a number of witnesses as well as from the defendant herself. He rejected her evidence as dishonest, made findings that she had engaged in gravely contumelious conduct after receipt of the first order, and held her to be in contempt of court by her failure to deliver up certain specified documents.

The committal order

20 The order for committal, dated 17 April 2002 runs in its relevant part as follows:

"IT APPEARING to the satisfaction of the Court that the Defendant, Li Yu Ping, Ellen, has been guilty of contempt of Court in failing to comply with the Order of the Honourable Mr. Justice Yeung dated 14th November 2000, which required that she deliver up to the Plaintiffs' solicitors any of the following documents belonging to the Plaintiffs, namely, Client Lists, Proposals, White Cards, Application Forms and all other documents belonging to the Plaintiffs (or either of them) containing information relating to holders or former holders of life insurance policies and/or insured persons issued by either of the Plaintiffs, and all copies thereof, in her possession, custody or control, by 5 p.m. on 16th November 2000 (which was extended to 5:00 p.m. on 27th November 2000 by the Order of Deputy High Court Judge Muttrie dated 17th November 2000), in that the Defendant has failed to deliver up, whether within the time specified in the Order and as extended as aforesaid or at all, all of the documents (and copies thereof) ordered to be delivered up which were in her possession, custody or control, specifically the following ....

IT IS HEREBY ORDERED THAT for her said contempt:

1. The Defendant do stand committed to prison for the period of 2 months for each of the four proven Grounds of the Notice of Motion, all to run concurrently with each other.

...." (Emphasis added)

Challenge to the validity of the order

21 There are four grounds of appeal in the Notice of Appeal. The first relates to the question whether the documents referred to in the Notice of Motion were documents which belonged to the plaintiffs. The second suggests that there was no sufficient evidence to show that the documents related to life insurance policies. Both these grounds have been abandoned.

22 The third ground with which we are concerned is put as follows:

"The said order of the Honourable Mr Justice Yeung was superseded and varied by paragraph 3 of the order of Deputy High Court Judge Muttrie dated 17th November 2000, whereby time for the Defendant to deliver up the documents was extended from 16th November 2000 to 27th November 2000. Accordingly from 17th November 2000 the order with which the Defendant was obliged to comply was the order of 17th November. However that order, unlike the order of the Honourable Mr Justice Yeung.

(i) was not indorsed with a penal notice, and

(ii) was not personally served on the Defendant as required by RHC Order 45 rule 7(5)."

23 The issue now raised before this Court was not touched upon at the hearing before Judge Longley. The judge, as we see from the very first page of his judgment, stated that the application was one for committal based upon the failure to comply with the order of Yeung J on 14 November 2000, whereby the defendant was ordered to deliver up certain documents. In the second paragraph of the judgment, he refers to the fact that "the order with penal notice attached was served on the defendant on 14 November 2000 at approximately 2.05 p.m.". No one suggested that the failure to serve the order of 17 November personally on the defendant, or to endorse it with a penal notice, was of any significance whatsoever. The fact that the point is new does not, of itself, preclude the defendant from taking it on appeal (see Eugene Mah Yau-chim v C King Lee and another [1969] HKLR 411), although whether in this case the irregularity, if it be an irregularity, has been waived by conduct - which is a different point - is a question we have been invited to consider.

The Rules

24 It is necessary first to rehearse those Rules of the High Court which are central to this appeal.

Ord. 45 r5(1) provides that:

"(1) Where-

(a) a person required by a judgment or order to do an act within a time specified in the judgment or order refuses or neglects to do it within that time or, as the case may be, within that time as extended or abridged under Order 3, rule 5, or

(b) a person disobeys a judgment or order requiring him to abstain from doing an act, then, subject to the provisions of these rules, the judgment or order may be enforced by one or more of the following means, that is to say-

(i) with the leave of the Court, a writ of sequestration against the property of that person;

(ii) where that person is a body corporate, with the leave of the Court, a writ of sequestration against the property of any director or other officer of the body;

(iii) an order of committal against that person or, where that person is a body corporate, against any such officer."

25 Ord. 45 r7, in so far as is relevant to this appeal, states:

"(1) ....

(2) Subject to Order 24, rule 16(3), Order 26, rule 6(3) and paragraphs (6) and (7) of this rule, an order shall not be enforced under rule 5 unless-

(a) a copy of the order has been served personally on the person required to do or abstain from doing the act in question, and

(b) in the case of an order requiring a person to do an act, the copy has been so served before the expiration of the time within which he was required to do the act.

(3) ....

(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 is 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) ....

(5) With the copy of an order required to be served under this rule, being an order requiring a person to do an act, there must also be served a copy of any order made under Order 3, rule 5, extending or abridging the time for doing the act and, where the first-mentioned order was made under rule 5(3) or 6 of this Order, a copy of the previous order requiring the act to be done.

(6) An order requiring a person to abstain from doing an act may be enforced under rule 5 notwithstanding that service of a copy of the order has not been effected in accordance with this rule if the Court is satisfied that, pending such service, the person against whom or against whose property it is sought to enforce the order has had notice thereof either-

(a) by being present when the order was made, or

(b) by being notified of the terms of the order, whether by telephone, telegram or otherwise.

(7) Without prejudice to its powers under Order 65, rule 4, the Court may dispense with service of a copy of an order under this rule if it thinks it just to do so."

26 Given the central importance attached to observing procedural rules along the road to seeking or securing a party's committal to prison for contempt of court, it is we think convenient to address the validity of the order made in this case, in the face of an acknowledged failure to serve personally upon the appellant the second order, and the absence of a penal notice on the copy served on the solicitors, by examining the route by which the plaintiffs say that the order for committal can properly be maintained despite that failure, and despite the absence of an order dispensing with service, pursuant to Ord. 45 r7(7).

Was the second order irrelevant?

27 The plaintiffs say, first, that the order breached was that of 14 November, so that the order of 17 November was, and remains, irrelevant. The argument runs that, by 5 pm on 16 November, the defendant had failed to comply with the first order. It so happens, as we have said, that documents were delivered that day after 5 pm but the plaintiffs have been content to assume, for the purposes of the proceedings, that the documents were delivered by 5 p.m. The point taken, however, is that the delivery effected on 16th, was, as the judge found, partial delivery, and the failure to deliver all the documents in the defendant's possession constituted contempt. No documents were subsequently delivered, whether in purported compliance of the first order, or of the first order as its terms had been varied by the second. In other words, the argument runs, the plaintiffs could have sought leave from a court on the morning of 17 November 2000, or at any time thereafter, to move for the defendant's committal for contempt of the order of 14 November, with no regard to the extension effected by the order of 17 November.

28 We are not attracted by this argument:

(1) Its effect is to ask this Court to approach the case as if the plaintiffs had on 17 November, before the variation, sought leave to commit for contempt on the basis of an unvaried order or had, even after variation, sought leave on the basis of the unvaried order. Mr Westbrook SC, for the plaintiffs, accepts that in view of what transpired on 17 November before Judge Muttrie, there would, in the circumstances, have been no question of the plaintiffs seeking leave on 17th, or say 18th. We think that this would be an artificial basis upon which now to proceed, even though we recognize that the order of 14 November was never obeyed, either in its original form or as varied.

(2) This is not the basis upon which the application for leave or the subsequent notice of motion properly read were advanced. The contempt was said to be failure to comply with the order of 14 November "whether within the time specified in the order and as extended or at all". In so far as Mr Westbrook seeks to suggest that there is some material difference between "in the order and as extended" on the one hand, and "in the order as extended" on the other, this is too nice a distinction to make. It seems obvious enough to us that the plaintiffs were seeking a committal order in respect of the defendant's failure to obey the order of Yeung J as varied.

(3) We were not in the course of argument taken to, or addressed upon the effect of, Ord. 45 r6, or Ord. 3 r5; both of which empower the court to extend the time within which an act is to be done. Under which of those two rules the extension was effected on 17 November is not stated in the order, nor, we imagine, was it specifically addressed. We note that Ord. 3 r5 is referred to in Ord. 45 r7(5), and that under Ord. 3 r5(2) an order extending a period within which an act is required to be done may be made after the expiry of the period prescribed in the first order, the effect of which is a retrospective extension (see Lawson v Midland Travellers Ltd [1993] 1 WLR 735). We would have thought that that was the effect of the order of 17 November. It is plain that between 17 November and 27 November, both dates inclusive, the plaintiffs could not successfully have applied for leave to issue committal proceedings.

29 So, the question still remains: Should the variation order have been served on the defendant personally, and endorsed with a penal notice? We were satisfied that, to comply with the rules, it was necessary for the second order to be served personally. As for the penal notice, there is authority to the effect that had the second order been served personally, a penal notice would not have been required on the copy served; though it must be noted that in that case, Treherne v Dale (1884) 27 Ch D 66, both copies were personally served at the same time. Treherne is authority for the proposition that where two orders are served, the second merely extending the time limit provided by an earlier order for the doing of an act, it is unnecessary for the second order to be endorsed with a penal notice, where the first order, when served, was thus endorsed, for :

"... the second order ... does not require the Defendant to do any act, but only extends the time for doing it which was limited by the former order." (per Baggallay LJ, page 68).

Treherne is, however, not authority for the proposition that the second order need not be served personally upon the party required to do the act. See also In re Seal [1903] 1 Ch D 87. That personal service of the second order is required follows, in our judgment, from the terms of Ord. 45 r7(5), as well as from an application of the principle which underlies the requirement of personal service of the original order, namely, that the party against whom an order has been made must, before he may be subject to penal sanction for breach of the order, be shown to know what he is required to do, or to abstain from doing, and that is assured by personal service. And it matters not whether the new obligation imposed upon a party is less or more onerous by reason of the variation; personal service of the variation is required in both instances, for since it could hardly be suggested that committal proceedings could hold good absent proof that the alleged contemnor had notice of the more onerous provision, there is no logical basis for contending that service on that party is not similarly required where a material change to the order effects a lighter obligation. Ord. 45 r7(5) requires that with a mandatory injunction there must be served a copy of an order made under Ord. 3 r5, extending the time for the doing of an act; and, it would appear, with an order made under rule 6 of Order 45, extending time, there must be served a copy of the original order. The effect of rule 7(5) was, as we have remarked, not the subject of any argument or address in this appeal, and the point, that with the second order there was not served a copy of the first, was not a point taken. Given our decision, to which we shall shortly come, to dispense with service of the second order, that failure is of no practical consequence in this case. That said, we refer to rule 7(5) because its terms, in the context of rule 7 as a whole, carry a very clear implication that the second order varying the first, must be personally served.

30 In summary, therefore, we do not agree with the defendant's proposition that the order with which she was obliged to comply was that of Judge Muttrie of 17 November. The correct approach is that the order with which the defendant had to comply was that of Yeung J, as varied. But we are satisfied that Ord. 45 r7(2) required personal service of the variation order.

The power to dispense with service

31 It is emphasized by Mr McCoy SC for the defendant that by reason of Ord. 45 r7(2) an order is not to be enforced unless there has been a copy personally served, and has been served before the expiry of the time within which the party served is required to do the act. That is correct, as far as it goes, but that provision is expressly made subject to paragraphs (6) and (7) of the rule.

32 Ord. 45 r7(6) does not apply to this case, for that rule, by which a court may, in given circumstances, commit a contemnor despite the fact that service has not been effected in accordance with the rule, is restricted to an order requiring a party to abstain from doing an act. Where those given circumstances do not exist, and where there has been a failure to serve an order which requires a person to do an act, the court may exercise its power under Ord. 45 r7(7) to dispense with service, and may do so retrospectively. So much is conceded by Mr McCoy, and the basis of his concession, properly made in our view, is the fact of, and the reasoning within, the judgment of the English Court of Appeal in Davy International Ltd v Tazzyman [1997] 1 WLR 1256. That was a decision of the Court of Appeal in England, upon a construction of Ord. 45 r7(7) of the Rules of the Supreme Court, and which was in the same terms as Ord. 45 r7(7), of the [Hong Kong] Rules of the High Court. The determination was that that paragraph of the Rule conferred upon the court a power to dispense with service of a copy of a mandatory order, not only prospectively, that is, before the time for compliance with the order had expired, but also retrospectively. In that case, there had been non-compliance with the requirements of service in that there was no penal notice, and failure to serve a copy of the order on any of the directors of the body corporate. The court rehearsed a divergence between two lines of conflicting authority, and whilst accepting that paragraphs (6) and (7) of the Rule did not sit very happily one with the other, nonetheless commented at page 1261 that:

"The wording of rule 7(7) is wholly general and is included in an order dealing with the enforcement of judgments and a rule prescribing the prerequisites for such enforcement."

And that:

"...the wording of the paragraph and its context would not warrant the conclusion that the court had no power in the enforcement of a mandatory order to dispense with its service. Its generality, following not only the specific requirements of paragraphs (2), (3) and (4) but the very limited power of dispensation provided for by paragraph (6), and the condition prescribed for its exercise, 'if [the court] thinks it just to do so' point strongly to a power not confined in its operation to any particular time. If the paragraph is not so construed, it seems that the court would be powerless to deal with cases where a party, who is not served with the order during the period for compliance, deliberately refused to comply with a mandatory order made in his presence."

33 Mr McCoy has utilized the sentence last cited to argue that the power to dispense with service is one limited to circumstances in which it is shown that the party against whom an order has been made is evading service. That, in our judgment, is to read an analytical example as a limitation. Indeed, it is instructive to note that in one of the earlier cases under review, Hill Samuel & Co Ltd v Littaur, The Times, 13 April 1985, the argument, which was rejected, included a suggestion along similar lines. We find in Davy, at p 1264, these references to Hill Samuel:

"In that case the court was concerned with a prohibitory order but because the conditions prescribed by rule 7(6) had not been complied with, it could not be enforced unless the power conferred by rule 7(7) was both available and exercised. The judge had held that he could and should exercise that power and proceeded to enforce the order. The Court of Appeal concluded that he was right. The argument, as summarized by Parker L.J., was:

'(a) In the case of mandatory orders there was no power to dispense with personal service, save in the case of both knowledge and evasion of service, or possibly in the case of minor technical defects; (b) although there was previously a more extensive power in the case of prohibitive orders, when in 1967 Ord. 45, r.7 replaced Ord. 41, r.5, which had applied only to mandatory orders, and dealt with mandatory and prohibitive orders alike, it had, in the case of prohibitive orders, altered the pre-existing position. Since personal service and the endorsement of a penal notice was not obligatory in the case of such orders, the dispensing power, it was argued, must be the same as for mandatory orders.'

These arguments were rejected. Parker L.J. said:

'In the light of the history of the matter, the terms of the rule and the judgment of this court in Turner v. Turner, the argument advanced by Mr. Blom-Cooper that there was no power under r.7(7) to dispense with service in my judgment fails. Here the defendant knew precisely the terms of Robert Goff J.'s order. He knew also, and admitted as much, that he knew that that order had been continued. He knew, and the judge so found, that he was acting in breach of the order and he resorted to substitutes in order to flout the order of the court. As to the exercise of the discretion, the only point made was that the plaintiffs had failed to serve, but that can avail nothing, for paragraph (7) is to deal with cases where there has been a failure to serve. I would say, as Lord Denning M.R. said in Turner v. Turner, 122 S.J. 696, that, if ever there was a case where exercise of the discretion was justified, this case is it.'

Sir David Cairns said:

'Despite the interesting excursion into the history of the penal notice which Mr. Blom-Cooper developed before us. I am quite satisfied that R.S.C., Ord. 45, r.7(7) means what it says, that the discretion thereby conferred on the court is not restricted in the way contended for on behalf of the defendant and that the sub-rule enables the court to dispense with the service of a copy order endorsed with a penal notice. It was very properly conceded that, if there was no such restriction as contended for, the judge's exercise of his discretion was not open to criticism.'

Kerr L.J., the third member of the court, added:

'in my view Mr. Blom-Cooper's approach to the construction of what is now R.S.C., Ord. 45, r.7 was misconceived in principle when he sought to rely on the old authorities before the changes to the Rules were made in the mid-1960s.'

He continued in that vein, and concluded:

'On the other hand, it introduced ... an unfettered judicial discretion in paragraph (7) to dispense with these requirements. The present case is one which very clearly calls for the exercise of this discretion against the defendant, and I agree that his appeal must be dismissed.'

Once again it is submitted on behalf of V.A.I. and Mr. Durnig that the members of the Court of Appeal merely assumed that rule 7(7) was exercisable retrospectively and were not concerned with the enforceability of a mandatory order anyway. I do not agree. It is clear that the ratio decidendi of that case was that rule 7(7) was exercisable retrospectively; it is nothing to the point that the order in that case was prohibitory. In my judgment, both Turner v. Turner, 122 S.J. 696 and Hill Samuel & Co. Ltd. v. Littaur, The Times, 13 April 1985 were decisions binding on this court as establishing that rule 7(7) is not restricted in its operation to a prospective operation." (Emphasis added).

34 That the power under Order 45 r7(7) applies to mandatory as well as to prohibitory orders, and that it confers an unfettered discretion, is a proposition to be found also in Excel Noble Development Ltd v Wah Nam Group Ltd [2001] 4 HKC 148, 158.

35 It is not argued in this case that this Court should disassociate itself from the reasoning in Davy. We see no basis upon which to do so, and we respectfully adopt its reasoning, and apply that decision.

Dispensing with the penal notice

36 The requirement to endorse a copy of the order with a penal notice is a separate requirement, imposed by rule 7(4), and is not itself, by the terms of Ord. 45 r7(2), rendered subject to the provisions of paragraphs (6) and (7). It must, however, follow that if the power to dispense with service of an order is properly exercised, the requirement under paragraph (4) falls away. In Jolly v Hull [2000] 2 FLR 69, the Court of Appeal in England, faced with a failure to endorse a possession order with a penal notice, examined the provision of Ord. 29 r1(7) of the County Courts Rules, that:

"The court may dispense with service of a copy of the judgment or order under paragraph (2) or a notice under paragraph (4), if the court thinks it just to do so."

As in the case of our High Court Rules, there was within the County Court Rules no express power to dispense with a penal notice. Nonetheless:

"...given the power to dispense with service of the judgment or order on which the penal notice was to be endorsed, it follows 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 judgment itself. This conclusion is consistent with the decision of this court in Davy International Ltd v Tazzyman; Same v Durnig [1997] 1 WLR 1256 relating to the corresponding powers of the High Court. 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 Ord. 29, r.1(3)." per Judge LJ, at page 75.

37 Accordingly, it is plain that Judge Longley was empowered to dispense retrospectively with personal service of the order of Judge Muttrie, and that such power of dispensation extended, in so far as might be necessary, to the penal notice requirement, or rendered the requirement of a penal notice otiose.

This Court's powers

38 The next question is whether this Court has the power to make the order which Judge Longley was not asked to, and did not make. Of that there can, we are satisfied, be no doubt. It is conferred by the terms of section 50(3) of the High Court Ordinance, Cap 4 and by Ord 59 r10.

39 Section 50(3) provides that

"The Court of Appeal may on appeal reverse or vary the order or decision of a court, and make such other order as may be just; and without prejudice to the powers of any court to grant bail, provision may be made by rules of court for authorizing the release on bail of an appellant under this section."

Ord 59 r10, in so far as is relevant, provides

"(1) In relation to an appeal the Court of Appeal shall have all the powers and duties as to amendment and otherwise of the Court of First Instance.

(2) ....

(3) The Court of Appeal shall have power to draw inferences of fact and to give any judgment and make any order which ought to have been given or made, and to make such further or other order as the case may require ...."

40 The circumstances in which these powers are properly exercisable in contempt cases have been the subject of two particular reports to which we have been taken.

41 M v P & Others and Butler v Butler [1993] Fam 167 concerned failures to serve committal orders in compliance with prescribed procedure. Emphasis was placed in argument:

"... upon a series of cases in which it has been affirmed that where the liberty of the subject is in issue, the proper procedures must be strictly observed. These include procedures designed to ensure that : (1) no alleged contemnor shall be in any doubt as to the charges which are made against him; (2) he shall be given a proper opportunity of showing cause why he should not be held in contempt of court; (3) if an order of committal is made, the accused (a) knows precisely in what respects he has been found to have offended and (b) is given a written record of those findings and of the sentence passed upon him." (see p 174)

42 That judgment, as well as the second to which we shall shortly turn, evidences a sea change from an earlier assumption which had developed, that procedural flaws in contempt cases such as, though not restricted to, failure to observe rules for service of the committal order, were fatal to the validity of such orders. The key to the court's attitude to its powers in contempt cases under sections 13(1) and (3) of the Administration of Justice Act 1960, which sections 50(1) and (3) of the High Court Ordinance replicate, lies in the very terms of the section:

"One has only to read these two subsections to appreciate that in appeals in respect of contempt, the court has a complete discretion fettered only by the need to do justice. In Linnett v. Coles [1987] Q.B. 555, 560, Lawton L.J. said:

'I accept, of course, that judges must be vigilant concerning the liberty of the subject; but, if Parliament gives them discretionary powers, as section 13 of the Act of 1960 seems to do, it is not competent for them to refuse to exercise those powers. It would be a misuse of powers for a judge to say: "I know Parliament has given me a discretion to vary orders in contempt appeals and make just ones, but I'm never going to use them. Such is my concern for the liberty of the subject that I am prepared to allow a contemnor who ought to be punished for contempt to go unpunished; and that is so, notwithstanding that Parliament envisages that I could consider imposing a just punishment." None of the cases in this court to which Mr. Munby has invited our attention are binding on us because seemingly the court never considered what powers it had to make a suitable order under section 13 of the Act of 1960.'" (p 178)

And then:

"In all contempt cases, justice requires the court to take account of interests of at least three categories of person, namely, (a) the contemnor, (b) the 'victim' of the contempt and (c) other users of the court for whom the maintenance of the authority of the court is of supreme importance. The interests of the alleged contemnor require that he should have the right to be informed of the charges which he has to meet, to be advised and represented if he so wishes (subject to his being eligible for legal aid or otherwise able to finance his defence), to be given a full and fair opportunity of meeting those charges and, if found guilty of contempt of court, to be informed in sufficiently clear terms of what has been found against him.

In all these cases the court has been concerned to ensure that these fundamental requirements are met in the way in which, particularly in the case of the county courts, they are intended to be and should be met. However, we have tended to overlook the fact that they may in some circumstances be met in other ways. Whilst this court should always be quick to identify and condemn any departure from the proper procedures, the interests of the victim and of maintaining the authority of the courts require that in deciding what use to make of its powers under section 13(3) of the Act of 1960, this court should ask itself whether, notwithstanding such a departure, the contemnor has suffered any injustice. It does not follow that he has. Nor does it follow that the proper course is to quash the order. If he has not suffered any injustice, the committal order should stand, subject, if necessary, to variation of the order to take account of any technical or procedural defects. In other cases it may be possible to do justice between the parties by exercising the court's power under section 13(3) by making 'such other order as may be just.' If the circumstances are such that justice requires the committal order to be quashed amongst the options available is that of ordering a retrial: see Duo v. Osborne (formerly Duo) [1992] 1 W.L.R. 611." (pp 178-179)

43 We agree with the sentiment in Jolly 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 [Ord. 45 r7(2) and (4)]", but there is no inconsistency between that approach, on the one hand, and the principles, on the other, which, according to the Master of the Rolls in M v P, are applicable to the exercise of our powers under section 50 of the High Court Ordinance.

44 The point was revisited in Nicholls v Nicholls [1997] 1 WLR 314 where, again, there was a flaw in a committal order. There, too, the test for the proper application of the court's power under section 13 of the Administration of Justice Act 1960 centred upon the interests of justice, taking into account the question of any prejudice to the contemnor. Lord Woolf, then Master of the Rolls, said, at page 316, that:

"On this appeal it is necessary to consider the effect of procedural irregularities on the validity of committal orders. It is an area where there has been a change of emphasis in the approach of this court in recent years."

He concluded, at page 325, that:

"I have cited extensively from the previous authorities to indicate that they show no common pattern of approach. The later cases do however make it clear that it is now recognized that R.S.C., Ord. 59, r.10(3) and section 13(3) of the Act of 1960 do give a court the power to rectify procedural defects both in the procedure leading up to the making of the committal order and after a committal order has been made. Like any other discretion, the discretion provided by the statutory provisions, must be exercised in a way which in all the circumstances best reflects the requirements of justice. In determining this the court must not only take into account the interests of the contemnor but also the interests of the other parties and the interests of upholding the reputation of civil justice in general." (pp 325-326)

Our conclusion on the issue of service

45 After hearing argument, we entertained no doubt but that the requirements of justice in the present case were best reflected by an order under Ord. 45 r7(7) dispensing with personal service upon the defendant of the order of Judge Muttrie of 17 November 2000 and, in so far as may be necessary, with the requirement to endorse on the order of 17 November a penal notice in the terms specified by Ord. 45 r7(4) and, accordingly, we make such an order. There is no conceivable prejudice or injustice to the defendant in so doing. Indeed none has been suggested. Instead, reliance has been placed upon the importance of observing the rules in cases in which the liberty of the subject is at issue, and upon the suggested limitation, to which we have earlier referred, of the circumstances in which the power under rule 7(7) is to be exercised. We do not, by our decision in this case, gainsay the importance of Ord. 45 r7(2) and 7(4) nor, for one moment, encourage laxity in observance of those requirements. That said, to allow the failure to effect personal service of the second order to render invalid the committal proceedings and the committal order would, in this case, permit the triumph of pure form and technicality over the clear interests of justice, devoid of any prejudice to the defendant.

46 The defendant was served with the order of 14 November which had attached to it a penal notice, and she was fully aware of the import of that notice. The order of 17 November, in that part relevant to this appeal, was one which was, no doubt, made at the initiative of those acting for her, and with her knowledge, and with her consent. It was a variation in her favour. That she knew of it, and of the consequences of disobeying the order of 14 November, as varied, is beyond any doubt. So much is clear from her affirmation of 27 November:

"I make this Affirmation in compliance with paragraph 4 of the Order of Deputy High Court Judge Muttrie dated 17th November 2000. I confirm that I have complied with the Order for delivery up by paragraph 2 of the ex-parte Order of Mr. Justice Yeung dated 14th November 2000."

One notes that it is under the umbrella of the order of 17 November that she refers there to the order of 14 November: in other words, she is aware of the impact of the order of 17 November upon the original order, and that it is the original order as varied with which she is required to comply. Then we see, from paragraph 29 of her affirmation of 8 December 2000, that:

"I was explained by my legal advisers as to the serious consequences of not complying with the Court Order, and I did not wish to incur substantial costs in seeking to discharge the Order. Given the limited time, I decided to comply with the Order for delivery up with appropriate reservation of rights."

47 We note, further, that the defendant's advisers have at all material times been fully alerted to the failure to serve personally the order of 17 November, and to the fact that it was not endorsed with a penal notice. The matter was drawn to the court's attention in the leave application in an affirmation of which they had a copy. In Mr Choy's affirmation of 11 September 2001 he asserts, it will be remembered, that "there is no doubt the Defendant was fully aware of the consequences of any non-compliance"; this a clear reference to the order as varied. There was not then, nor is now, any contrary suggestion. No point was then taken, nor was it taken before Judge Longley. The case before Judge Longley was contested on its merits, the defendant asserting that she had on 16 November - that is, before the variation - delivered all relevant documents in her possession.

48 We were satisfied, in coming to our conclusion, that this was an obvious case in which to dispense with personal service under rule 7(7).

Waiver

49 It is said by Mr Westbrook that the irregularity constituted by the failure to serve the variation order personally upon the defendant - if we find it to be an irregularity - has nonetheless been waived by the defendant. The waiver is said to be constituted by conduct, in that the defendant has at all material times known of the failure and its potential significance. It was a point specifically drawn to the attention of the judge whose leave to commence the proceedings was sought; and the instrument by which it was drawn to his attention, namely, the affirmation of Mr Choy - a copy of which was served on those acting for the defendant - specifically canvassed the question whether it was really necessary to effect such service, and even went so far as to seek dispensation from that requirement. The defendant appeared in the court below, aware of the point available to her, and yet engaged upon a lengthy contest of liability on the merits, without ever taking this point. We note, in passing, that as to service of the Notice of Motion, there was a consent order by which the court dispensed with personal service of that notice. There is no such order in relation to the order of Judge Muttrie. We do not think that the quasi-criminal nature of contempt proceedings precludes a finding of waiver by conduct of a procedural requirement (see, for example, Fabrique Ebel Societe Anonyme v MBO Far East (HK) Ltd [1985] 1 HKC 166), even one as material as the failure to serve. If the point can expressly be waived, there is nothing in logic to prevent its waiver by conduct, although, given that committal proceedings for civil contempt are quasi-criminal in nature and affect the individual's liberty, it must take a very clear case to establish waiver. There is a strong argument in this case to support the contention of waiver but, given our view on the discretion available under Ord. 45 r7(7) and the fact that the conduct suggested to constitute waiver is one of the factors which we have weighed in determining how the discretion should be exercised, and given most particularly our decision to dispense with service, it is unnecessary now to determine the issue of waiver.

Penalty

50 It is contended by the remaining ground that the term of two months' imprisonment imposed by Judge Longley was in all the circumstances too severe, and out of line with what is suggested to be the normal range of imprisonment for cases of contempt of court, and, further, that in the light of the psychiatric report which we have agreed to receive upon this appeal, it is now overly onerous to confirm the order; and we are invited to vary it.

(1) The evidence

51 The evidence that the defendant had not delivered all the papers which she was required to deliver came from two sources: Ms Pinky Cheng, who was the defendant's secretary at Winterthur, and had worked previously with AXA, and whose report to the plaintiffs in October 2000 about the defendant's conduct led the plaintiffs to institute these proceedings; and Antoine Ho who had also worked for AXA and was, between November 1999 and July 2001, a District Manager with Winterthur, reporting directly to the defendant.

52 Pinky Cheng said, in her testimony, that the defendant had kept in a drawer in her office at Winterthur a set of white cards, one card printed or copied to a page. White cards were cards each of which had details of the policy holder, and a summary of the policy pertaining to that client. Copies of these cards, when made, were copied three to a page, but the one-white-card-per-page copies had been made by cutting A4 size sheets into three. The point is that no one-card-per-page copies were delivered to the plaintiffs after the order of 14 November. The defendant's case was that such copies did not exist. The judge believed Ms Cheng, and held the defendant to be in breach of the order by not delivering these documents.

53 Ms Cheng also gave evidence about proposals kept by the defendant. Proposals, in the context of this case, were illustrations prepared by AXA for the benefit of clients, which provided to a client details of the benefits which he or she might expect upon payment of a certain premium. She said that there had been two very full box files of proposals in the defendant's office. The defendant's case was that all proposals had been delivered to the plaintiffs' solicitors on 16 November. Again, the judge accepted the evidence of Ms Cheng and found that one of two existing box files of proposals in the hands of the defendant had not been delivered.

54 The evidence of Antoine Ho was significant, and puts the nature of the contempt in this case in special focus. He said that after service of the order of 14 November, the defendant arranged to meet him the next day, that is, 15 November, and did so; and there she expressed concern about handing over everything lest it revealed quite how extensive had been her removal of documents from AXA. Later that day, she gave to him about twenty photocopied pages of AXA pink cards (which were to the same purpose as white cards), but on which there appeared three cards per page. She asked him to photocopy them for her, which he did. These copies were not given to the plaintiffs' solicitors on 16 November or, indeed, at all. The defendant's case was that the evidence of Mr Ho was untrue. She said that no such copies were ever sought by her. The judge accepted the evidence of Mr Ho.

55 The final group of documents in respect of which the judge found breach of the order for delivery up was a set of three proposals. Ho's evidence was that in February 2001, that is months after the November orders, the defendant had given him three AXA proposals as an aid for him to persuade AXA clients to switch to Winterthur. The defendant's case was that she did not give Ho such documents. The evidence of Mr Ho in this regard was accepted by the judge.

56 In his judgment, the judge expressed his conclusion that the evidence of the defendant had been "thoroughly evasive and untrustworthy". He also found that the defendant had obtained AXA proposals after she had left AXA, in order to make unfavourable comparisons with Winterthur policies.

57 The judge heard testimony from others, including witnesses called on the defendant's behalf, with whom the judge was less than impressed, and he found that they had been prevailed upon by the defendant to give less than frank evidence.

(2) Analysis

58 In so far as there was a suggestion that there is a normal range of sentence of between two weeks to one month for contempt of court, there is no warrant for that contention. Cases of contempt will vary enormously in their type and facts, and there is little mileage to be gained from the citation of other cases, and certainly not from the case from which the suggested tariff or range was drawn.

59 The judge took a serious view of the contempt. He noted that the defendant had, from an early date, shown concern to frustrate the plaintiffs' purpose in seeking to recover documents that were theirs, by which no doubt he had in mind not only the defendant's conduct since the making of the court order but attempts by the plaintiffs after the defendant left the company to secure documents which she had removed. He noted that the defendant had retained the documents most useful to her, so that there was little weight to be attached to the suggestion that she had complied in large part with the order. He noted most particularly that she had displayed no remorse at all for her breach of the order. She had lied to the court, attacked the credibility and character of the two main witnesses, and called witnesses whose evidence she knew to be false.

60 This was indeed a very serious contempt. This was a case of wilful and proactive contempt, aggravated by the fact that within a day of the order of 14 November the contemnor was working out how best she could go about breaching the court order and, as the judge found, asked one of her work colleagues, indeed a subordinate, to make copies of documents for her retention, documents which she had been ordered to deliver up. As late as February 2001, after she had made affirmations that she had complied with the order as amended, she was handing out proposals to Mr Ho persuading him to use them to attract clients from the plaintiffs. This defendant, in her breaches of the court order, was behaving with calculated dishonesty of the most serious kind.

61 Demonstrably inherent in this conduct is a total lack of remorse. It is clear to us that she feels none, and feels that she is entitled to thwart orders of this court. We note also that she has to this day not purged her contempt. There has still been no attempt to deliver up the documents which the judge found she had not delivered up, nor any attempt to state what has become of them. She fought this case, called lying witnesses in her support, and she herself provided palpably false testimony.

62 The skeleton argument we have before us dated 3 June 2002 states that the defendant "absolutely and unreservedly apologizes for her conduct". This is a false apology. It is a device deployed by the defendant, intended to avoid imprisonment in the event that all else fails. That is self-evident from the history of the case; but if one needed confirmation of it, it comes from a report, which she has asked us to see, from a psychiatrist who speaks of her distress and depression, which he classifies as a major depressive disorder. She first went to see this psychiatrist on 22 May 2002, three weeks after she was granted bail pending this appeal; at a time when the date of this hearing had been fixed; and more than eighteen months after she was knowingly first in contempt. This is what the report reveals on the question of her remorse or, rather, lack of it:

"She was angry and upset that despite her long service with her ex-employer, generating substantial amount of business transaction, yet she was subjected to such unfair treatment after her departure. She produced piles of documents of court order and summon, complaining that her ex-employer instigated sequence of painstaking legal proceedings in order to jeopardize her career. She became agitated on mentioning how she was reportedly still possessing documents that should have surrendered to the ex-employer, which resulted in the recent charge of contempt of Court, and pleaded her innocence."

That description of her recent attitude accords with her attitude throughout these prolonged proceedings.

63 We are unimpressed with the psychiatric report in its hoped-for impact on this appeal. If indeed the defendant is depressed then, whilst of course that is not a matter for any satisfaction, it is a matter which she has brought upon herself and which she chose to have attended less than a month ago. She is on medication, and there is mention in the report of 'transient suicidal ideation'. We have made clear our wish that this report be drawn to the attention of the prison authorities, so that they can take whatever steps are considered fit for her medication, for her depression, and for her protection. An undertaking has been given to us by those acting for the defendant to deliver to those authorities a copy of that report.

64 Against the picture which we have painted of the extent and nature of her contempt we are of the view that the penalty imposed was, if anything, light. The defendant should consider herself fortunate that her behaviour and her conduct of the proceedings have not, thus far, resulted in proceedings of a more severe kind.

65 There is no merit whatsoever in the complaint against the penalty imposed by Judge Longley.

Conclusion

66 It follows that the appeal against the order of Judge Longley committing the defendant to prison for contempt of court for two months is dismissed. On 12 June 2002 we ordered the defendant to surrender to custody, no later than noon 22 June 2002, to the Court of First Instance in order to serve that term of imprisonment.

67 We have already heard certain submissions as to costs, but will hear counsel further should they wish to address us in the light of these reasons.

[Further submissions as to costs]

68 It is contended by the plaintiffs that costs of the appeal be awarded to the plaintiffs on an indemnity basis. Our attention has been invited to the fact that the judge in the court below ordered the defendant to pay 85% of the plaintiffs costs, the percentage to reflect a degree of success in resisting some of the charges of contempt, and to pay those costs on an indemnity basis.

69 For the defendant, it is said that there should be no order as to costs since the plaintiffs have, it is argued, been forced to come to this Court to seek an indulgence, by which is meant the dispensation from compliance with the requirement as to personal service of the second order. With this latter contention we do not agree. This is an appeal which has been demonstrated to be without merit. The main point which has been argued is a point which had been drawn to the court's attention at the leave stage, and which the defendant could at any stage thereafter have pursued, but she chose below to fight the case on the merits, has left the service issue to this last stage, and has not succeeded. Costs should, in the circumstances, follow the event.

70 We have concluded that the appropriate order is that the plaintiffs' costs of, and occasioned by, this appeal be paid by the defendant, to be taxed on a party and party basis, and to be paid forthwith. This is the decision of the Court, and is the order we will make. The order for costs in the court below will stand.