張月清 v. TSUI YIU HEI

HCMP 875/2018,
HCMP 602/2019 and
HCMP 845/2019
(Heard Together)
[2020] HKCFI 103

HCMP 875/2018

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 875 OF 2018

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 602 OF 2019

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 845 OF 2019

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(Heard Together)

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REASONS FOR JUDGMENT

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1.  On 13 December 2019, this court handed down the judgment (“the Judgment”) whereby the defendant was found guilty of the charges of contempt in HCMP 875/2018 and HCMP 845/2019 whereas the charge of contempt in HCMP 602/2019 was not proved beyond reasonable doubt. These are my reasons for the sentence I imposed on the defendant at the end of the hearing on 30 December 2019. The Judgment should be read in order to understand these reasons for sentencing. For the present purpose, I adopt the same defined and abbreviated terms in the Judgment.

The principles

2.  The applicable principles were set out in Bruno Arboit v Koo Siu Ying (No.2) [2016] 3 HKLRD 154 at §§2-11.  They were summarised by DHCJ To in HCMP 2402/2017 (5 March 2018), which was cited by this court in the judgment in Law Lai Lan v Tamang Heshna; Ghising Chhegu Maya, HCMP 2260/2018 & HCMP 2261/2018 (19 September 2019) as follows:

“40. …Civil contempt of court order is a serious matter. The principles applicable to sentencing this type of offences have been usefully summarized by Au-Yeung J in Bruno Arboit as Sole Liquidator of Highfit Development Company Limited and Koo Siu Ying and Another as follows:

(1) A prime consideration of the court in sentencing contempt is to signal the importance of demonstrating to the litigants that the orders of the court are to be obeyed.

(2) The object of the sentence is both to punish the conduct in defiance of the court’s order and to serve a coercive function by holding out the threat of future punishment as a means of securing the protection which the order was primarily there to do: Crystal Mews Ltd v Metterick and Re Barrell Enterprises. The court has to strike a balance between the two objectives.

(3) Imprisonment should be regarded as a sanction of the last resort. Any custodial term should be as short as possible and consistent with the circumstances of the case: Willwin Development (Asia) Co Ltd v Wei Xing; CMA CGM v Ng Chip Choi Maurice.

(4) The court has an absolute discretion to suspend a sentence of imprisonment for such period and on such terms as it deems fit: CMA CGM v Ng Chip Choi Maurice.

(5) The court will have to consider all the circumstances of the contempt, including the nature of the order and extent of the breach; whether the contempt was contumacious or unintentional; the reasons, motives and state of mind of the contemnor; and whether the contemnor appreciates the seriousness of the deliberate breach.

(6) The court will have to consider aggravating and mitigating factors, including whether any prejudice is suffered by the plaintiff; whether the prejudice is capable of being remedied; whether the contemnor has cooperated and purged the contempt; and the personal circumstances of the contemnor.

Of all the factors listed above, the two most important ones are whether the contemnor has purged the contempt and whether the plaintiff has suffered any prejudice which is irremediable.  If the contempt has been purged, the coercive function of the sentence has been spent.  What remains to be addressed is punishment for the disobedience.  Purging the contempt may even affect the sentencing option. While each sentence depends on its facts and circumstances, references may still be drawn from sentences passed the court in similar cases.  If the contempt has not been purged and was the result of wilful and contumelious conduct, the starting point is term of immediate imprisonment. The term depends on the prejudice suffered by the applicant as a direct result of the breach of the order and whether such prejudice is irremediable.  In theory, the court has jurisdiction to impose an unspecified term of imprisonment until the contemnor purges the contempt.  Such a sentence is a very draconian one and would only be imposed for the most recalcitrant contemnor and in the worst type of cases where unless the order is complied with the applicant would suffer or continue to suffer more irremediable and serious injury or damage.”

Consideration

3.  In view of the nature of these proceedings, and therefore the burden of the plaintiff to prove the defendant’s breach beyond reasonable doubt, the defendant’s denial in the course of putting the plaintiff to proof per se is not an aggravating factor in considering sentencing.  Insofar as sentencing is concerned, that the charges were denied but proved means that the defendant now does not have the benefit of mitigation that he would have had, had he admitted the breach.

4.  Whilst the defendant is technically a first offender, he had the prior experience of being cited for contempt of the Interlocutory Injunction, which contained the prohibition similar to that in the Final Injunction in question[1].  The defendant was acquitted in those committal proceedings.  However, the significance of that episode, as explained in the Judgment, was that the defendant was aware of what he was restrained from doing prior to what he did that gave rise to the breach of the Final Injunction in these proceedings.  I can well understand why the plaintiff complained that the defendant’s breach, now found as fact in these proceedings, was contumelious.

5.  Mr Yam referred to the defendant’s apology.  Such apology came by way of his affirmation filed for the purpose of sentencing pursuant to the direction of this court after the Judgment.  In view of the background of these proceedings and the aforesaid matters, an apology now carries limited weight in demonstrating the true remorse of the defendant.  The parts of the Judgment that explained the dim view that this court took of the defendant’s denial of the documentary evidence of his conduct[2] reflect badly on the defendant for the present purpose.

6.  As pointed out by Mr Yam, the defendant apparently had taken legal advice from his Mainland lawyers, before the steps were taken to the Mainland law enforcement authority and in the Mainland law court that gave rise to the breach of the Final Injunction.  The documents lodged with the Mainland law court stated the stance of the defendant that the Mainland law court should not recognize the judgment of the Hong Kong court in HCMP 40/2013, and that the Mainland law court has jurisdiction over the application of the defendant so filed.

7.  I do not have to express comment on the advice of the defendant’s Mainland lawyers behind his steps taken and their statement of the defendant’s stance to the law enforcement authority and the law court in the Mainland.  Whether or not the defendant’s conduct constituted breach was a matter of construction and enforcement of the Final Injunction by the Hong Kong court according to Hong Kong law.  As far as that is concerned, I would add nothing to the Judgment. Suffice to say that the defendant may not attribute his conduct entirely to the Mainland legal advice.

8.  The history of these proceedings shows that the defendant has been in denial of the result of HCMP 40/2013, notwithstanding failure in his attempt to appeal against the judgment of this court in the first instance[3].  The defendant has been stubborn about that and eventually decided to take the steps taken in the Mainland, albeit not without consulting his Mainland lawyers.

9.  Considering the applicable principles, I see justification for custodial sentence.  The submission of Mr Yam for the defendant reflected an acknowledgment of the possibility of such sentence.  Whilst he also pleaded for the suspension of any custodial sentence, if that was what the court was minded to impose on the defendant, Mr Yam said nothing about the terms on which the custodial sentence might be suspended.  Whilst all sentencing options were open, Mr Yam said nothing about the option of imposing a fine in the present case.  Upon pointing these out, Mr Yam requested to stand down the matter for him to take further instruction from the defendant.  I acceded to the request.  The hearing later resumed with further submission by Mr Yam.

10.  As to the terms on which any custodial sentence might be suspended, Mr Yam offered his client’s undertaking to cause the withdrawal or termination of the legal proceedings initiated by him in the Mainland within 3 months.  That, I understand, was to eradicate or cleanse the past breach of the Final Injunction arising out of the steps taken by the defendant in the Mainland.    However, it was not at all clear whether and, if yes, how the defendant would be in a position to honour such undertaking to withdraw or to terminate such legal proceedings in the Mainland jurisdiction.  Further, part of the defendant’s conduct that gave rise to the breach was his causing a report to be made for the Alleged Conversion against, amongst other persons, the plaintiff.  That has since become a matter for the Mainland law enforcement authority.  Incorporating an undertaking by the defendant in terms as proposed as the condition for suspending custodial sentence, when there was no material before this court suggesting that that was indeed within the defendant’s control to comply with, would subject the defendant to a less than properly calculated risk of default and thus activation of a suspended sentence.

11.  The materials before this court suggested that the parties have been unable to wrap up their dispute after the judgment in HCMP 40/2013 back in 2015.  The reality of the situation is that there are outstanding and pending matters, including on-going legal proceedings in the Mainland involving the PRC Subsidiary and the defendant.  It remains the concern of the plaintiff that the defendant would not conduct himself further that would contravene the Final Injunction.  In the circumstances, apart from serving to punish the defendant for his past breach, a custodial sentence suspended for a definite period would also serve as coercion or deterrence in respect of how the defendant may conduct himself in relation to those outstanding matters.

12.  As to the option of fine, Mr Yam informed this court that the defendant would be able to pay a fine of HK$30,000, if he was allowed one month to come up with such sum.

13.  Mr Yam also confirmed to this court that there is no principle against combining sentencing options, if the circumstances of the case warrant.

14.  I have also considered the mitigation with reference to the defendant’s personal circumstances, including his apparently reputable background, his age (70 years old) and poor health, to the extent that they should be taken into account for leniency.

15.  Considering the authorities submitted by both sides and the materials before me, I took the view that a combination of a fine and a suspended custodial sentence would be appropriate in the circumstances of the present case.  I therefore sentenced the defendant to 3 months’ imprisonment, which would be suspended for a period of 24 months, plus a fine of HK$30,000 payable within one month[4].

16.  For the record, I spent some time in court to explain to the defendant, with the assistance of the court interpreter, the meaning of the suspended custodial sentence and the consequence of any proved further breach during the suspended term.   It would be in the defendant’s interest to seek legal advice in the Mainland, if he is minded to act as offered above.  It would also be in his interest to seek legal advice in Hong Kong and to liaise with the plaintiff to ensure that no step in so acting as offered would be construed as contravention against the Final Injunction.

Costs

17.  The question of costs was not controversial.  I made an order that the defendant shall pay the plaintiff’s costs of HCMP 875/2018 and HCMP 845/2019, including the substantive hearing on 29 November 2019 and this sentencing hearing, to be taxed on an indemnity basis if not agreed.  Failing to prove the alleged contempt in HCMP 602/2019, the plaintiff shall pay the defendant’s costs of those proceedings, to be taxed on a party and party basis if not agreed.