KOT SEE FOR v. CHAN LEONG HANG

HCMP 2323/2020

[2021] HKCFI 2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2323 OF 2020

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REASONS FOR DECISION

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1.  On 7 July 2021, I ordered the sum of $100,000 paid into court by the defendant as bail money (“Bail Money”) to be paid out to the plaintiff to partially satisfy the costs awarded to him in these proceedings and further awarded the costs of and occasioned by the application, summarily assessed at $20,000, to the plaintiff. I now give reasons.

2.  By way of background:

(1)    On 24 February 2021, notwithstanding the defendant’s absence at the hearing, I found him guilty of contempt of court in not complying with the disclosure order (“Disclosure Order”) ancillary to a proprietary/Mareva injunction granted on 26 November 2019 in HCA 2208/2019 regarding 3 sums of money (adding up to $15 million) said to have been defrauded from the plaintiff and paid into the defendant’s bank account.

(2)  A warrant for the defendant’s committal was issued, which led to his apprehension and being brought before this court on 2 March 2021.  Pending sentence, he was released on bail on conditions, one of which was the payment into court of the Bail Money.

(3)  On 6 May 2021, I committed the defendant for a term of imprisonment of 6 months, suspended for 14 days for a last opportunity to the defendant to comply with the Disclosure Order.

(4)  The 14-day suspension expired on 20 May 2021, with the Disclosure Order remained unperformed.

(5)  The defendant did not file an affirmation purportedly to comply with the Disclosure Order until 21 May 2021, without leave of the court.

(6)  In view of his failure to purge his contempt within the stipulated time, this court ordered on 24 May 2021 that the defendant be immediately committed to prison for 6 months from the date of his apprehension.  A second warrant was issued for his arrest.

(7)  The defendant has remained at large.

(8)  By the orders dated 24 February 2021 and 6 May 2021, the defendant is to pay the plaintiff the costs of and occasioned by the originating summons herein up to 24 February 2021 and since 24 February 2021, summarily assessed at $120,000 and $110,000 respectively, within 14 days from 6 May 2021.

(9)  The costs so ordered and assessed against the defendant remains due and unpaid.

3.  The defendant did not appear at the hearing yesterday.  I was, however, satisfied upon reading the second affirmation of Hon Kin Fai dated 23 June 2021 that true copies of the Summons and the supporting second affirmation of Chen Hoi Kei dated 17 June 2021 had been duly served on the defendant on 18 June 2021 by ordinary prepaid post to the address last reported by him as his address in the notice to act in person in HCA 2208/2019[1].

4.  The Summons was issued pursuant to Order 49, rule 9(1) of the Rules of the High Court (Cap 4A), which provides as follows:

“Where money is standing to the credit of the judgment debtor in court, the judgment creditor … may apply to the Court by summons for an order that the money or so much thereof as is sufficient to satisfy the judgment or order sought to be enforced and the costs of the application be paid to the judgment creditor.”

5.  The Bail Money is money standing to the credit of the defendant.  The plaintiff is a judgment creditor for the amounts of the above-mentioned assessed and outstanding costs.  The plaintiff is thus entitled to apply for an order under Order 49, rule 9(1) for the release of the Bail Money to him for the partial settlement of such costs.And the defendant did not file any evidence or, as stated in [3] above, appear at the hearing yesterday to give any reason(s) or raise any argument(s) (and I cannot see any) as to why the Bail Money should not be paid over to the plaintiff who has incurred substantial costs to take proceedings necessitated by the defendant’s contempt of court, which costs he is otherwise unlikely to recover to any or any meaningful extent.  This should be the end of the matter.

6.  For the sake of completeness, in a different context, in Registrar District Court v Li Kai [2006] 2 HKLRD 499, a case concerning the exercise of the court’s power under s 73 of the Criminal Procedure Ordinance (Cap 221)[2] (“CPO”) to make a compensation order out of the bail money paid into court where the accused had purported to assign the bail money to his solicitors for their costs, Ma CJHC (as the former Chief Justice then was) analysed and identified, inter alia, these principles at [27]:

(1)  Any payment made into court for the purpose of bail is, as far as the court is concerned, a payment made by the accused, regardless of who is actually providing him with the money and under what conditions.

(2)  The court does not hold the money paid into court as cash bail on trust for the accused or anyone else.  All that the accused possesses is the right to claim back the money, provided that it is not otherwise legitimately disposed of by the court.

(3)  As far as the court is concerned, the cash bail does not cease to be a payment into court by the accused when he purports to divest himself of his interest in the cash bail. Nothing in the CPO permits a change of ownership or interest in cash bail paid into court.  Any purported divestment of interest must be subject to s 73, which enables the court to retain all the money paid into court by an accused until such time as it becomes clear that such money will not be used to pay compensation to a victim under s 73(3).

(4)  Section 73 does not provide exhaustively of the circumstances in which the court may have the power to retain bail money in court.

7.  Li Kai was applied in YBL v LWC (No 2) [2017] 2 HKLRD 783, in which the petitioner wife sought, under Order 49, rule 9(1), the release of the bail money paid into court by the respondent husband to partially satisfy the arrears in maintenance while the husband contended that the money was held by his father (who provided the money) on a Quistclose trust. 

8.  The Court of Appeal cannot see any reason why the analysis in Li Kai as to the nature of bail money and the court’s obligation in relation to such money should vary when dealing with an application under Order 49, rule 9(1).  The court’s power in disposing of bail money is unfettered by any constraints purportedly imposed by whatever arrangement between the person putting forward the cash bail and his financier.  The court does not hold the money in court on trust for anyone and the person on bail only has a chose in action to seek the return of the bail money after the court has legitimately exercised its power over the money as his money.  Therefore, even assuming that there could be some kind of Quistclose trust in respect of the bail money put up by the husband, it could only be a trust subordinated to the court’s powers to dispose of such money, including the power under Order 49, rule 9(1).  As far as the court was concerned, the bail money was money standing to the credit of the husband and the wife, as judgment creditor, could properly seek an order under Order 49, rule 9(1) in respect of such money.  See, in particular, [23]-[29], per Lam VP.

HCMP 2323/2020

[2021] HKCFI 1305

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2323 OF 2020

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REASONS FOR SENTENCE

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1.  The first hearing of the originating summons herein took place on 24 February 2021 in the absence of the defendant. On the grounds set out in the Reasons for Judgment handed down on 26 February 2021 (“Judgment”), I found the defendant guilty of contempt of court and awarded the plaintiff the costs of these proceedings on an indemnity basis. The contempt was constituted by the defendant’s refusal or failure to perform the disclosure order (“Disclosure Order”) ancillary to a proprietary/Mareva injunction granted against the defendant on 26 November 2019 in HCA 2208/2019 (“Injunction Order”) regarding 3 sums of money (adding up to $15 million) (“Sums”) said to have been defrauded from the plaintiff and paid into the defendant’s bank account. A warrant for the defendant’s committal was issued, which led to his apprehension on 2 March 2021. The defendant was duly brought before this court for mention on the same day. He was subsequently released on bail pending sentence on conditions, inter alia, that he paid $100,000 into court.

2.  At the sentencing hearing yesterday, I committed the defendant for a term of imprisonment of 6 months, suspended for 14 days for a last opportunity to the defendant to comply with the Disclosure Order.  If the defendant persists in his non-compliance with the Disclosure Order, the plaintiff shall apply to this court for an order that the defendant be taken into custody immediately.  I also ordered the defendant to pay the plaintiff’s costs of these proceedings since the hearing on 24 February 2021 on an indemnity basis.

3.  I now give reasons and summarily assess costs.

Relevant sentencing principles

4.  The principles on sentencing for contempt of civil court orders are established:

(1) Court orders are made to be obeyed.

(2) Contempt of civil court orders is a serious matter.

(3) In sentencing, the court seeks to signal to litigants in general, not just the contemnor, that the orders of these courts are to be followed.

(4) The court has to balance between punishing the conduct in defiance of the court’s order and holding out the threat of future punishment as a means of securing the protection for which the order was in the first place made.

(5) As circumstances may vary greatly, the sentence for contempt may range from a fine to a term of imprisonment. Imprisonment should be regarded as a sanction of the last resort. Any custodial sentence should be as short as possible and consistent with the circumstances of the case.

(6) The court will consider if there are aggravating/mitigating factors and acts purging the contempt, if any. The following is an inexhaustive list of relevant factors:

(a) the nature of the order;

(b) the breach in question and the extent thereof;

(c) whether the contempt was contumacious or unintentional - the reasons, motives and state of mind of the contemnor;

(d) whether the contemnor appreciates the seriousness of the breach;

(e) whether the contempt has caused the plaintiff any irredeemable prejudice;

(f) whether the contemnor has been cooperative.

See Arboit v Koo Siu Ying (No 2) [2016] 3 HKLRD 154, [2]-[10] per Queeny Au-Yeung J; China Shanshui Cement Group Ltd v Zhang Caikui[2018] HKCFI 1192, [4] per Queeny Au-Yeung J; JSC BTA Bank v Solodchenko (No 2) [2012] 1 WLR 350, [45] per Jackson LJ.

5.  Whether the contemnor has purged the contempt and whether the plaintiff has suffered any irremediable prejudice are particularly weighty considerations.  If the contempt was wilful and contumelious and has not been purged, the starting point is a term of immediate imprisonment: Law Lai Lan v Tamang Prem Chandr[2018] HKCFI 536, [41] per Deputy High Court Judge To.

6.  In the case of a breach of an injunction order, subject to the presence of mitigating factors, the starting and primary penalty is imprisonment (normally measured in months).  Information concerning assets is uniquely within the defendant’s knowledge and is pertinent to police a Mareva injunction.  A fine is inappropriate when the defendant has not purged or offered to purge his contempt: La Dolce Vita Fine Dining Co Ltd v Zhang Lan [2019] 2 HKLRD 341, [15], [18] and [20], per Mimmie Chan J.

7.  As explained by Jackson LJ in JSC BTA Bank v Solodchenko (No 2) [2012] 1 WLR 350, any deliberate and substantial breach of the restraint or disclosure provisions of a freezing order is a serious matter, which normally attracts an immediate custodial sentence measured in months.  Where there is a continuing failure to disclose relevant information, the court should consider imposing a long sentence to encourage future co-operation by the contemnor.  See [51], [55]-[56].

Discussion

8.  In the defendant’s case, the contempt was no doubt wilful and contumelious.  

(1) The Injunction Order warned in paragraph 13 thereof that it is a contempt of court knowingly to assist in or permit a breach of the order. It was also endorsed with a penal notice in both Chinese and English that the defendant may be held to be in contempt of court and may be imprisoned if he neglected to obey or comply with the order.

(2) As noted in the Judgment, evening assuming that the attempts at service before 15 May 2019 at the defendant’s address then last known to the plaintiff were all ineffective in bringing the Injunction Order to the notice of the defendant, the defendant was represented by solicitors from at least 11 May to 28 July 2020. The Injunction Order was, at such solicitors’ request (presumably on the defendant’s instruction), served on them on 15 May 2020. One would have further expected the solicitors to provide the defendant with the document and to advise the defendant as to its content, including the terms of the Disclosure Order, and the consequences of non-compliance. Consequently, the defendant should, at the latest, have notice of the Disclosure Order in round about mid May 2020.

(3) By the plaintiff’s solicitors’ letter dated 6 July 2020 to the defendant’s solicitors, the defendant was requested to comply with the Disclosure Order within 7 days from 6 July 2020, failing which the plaintiff would take further actions against the defendant without further notice. Again, one would have expected the defendant’s solicitors to relay to the defendant such request and advise him of the possible further actions that the plaintiff may take in the event of non-compliance including committal proceedings.

(4) The Injunction Order had subsequently been twice inserted through the letter box for the address provided by the defendant himself in his notice to act in person dated 29 July 2020 in HCA 2208/2019. There is no reason to think that the documents so served would not reach the defendant.

(5) The defendant has had ample time and abundant opportunity to comply with the Disclosure Order since mid May 2020, should he be minded to do so.

(6) Instead of complying with the Disclosure Order, the defendant evaded/ignored the plaintiff’s solicitors’ attempts to make appointments to effect personal service on him on 6 August 2020 at his solicitors’ office and on 13 August 2020 at the address provided by the defendant as aforesaid.

(7) Lastly, at the hearing on 2 March 2021, this court had explained to the defendant, directly in Cantonese, the reason for which he was arrested and brought before the court, i.e. the commencement of HCA 2208/2019 and the allegations made therein by the plaintiff against him, the making of the Injunction Order against him, the Disclosure Order under the Injunction Order, the finding of contempt of court that this court has made against him due to his failure to comply with the Disclosure Order, the serious nature of such a finding and the possible penalties therefor, including a term of imprisonment. The defendant was further cautioned that with a view to mitigating the penalty, he should consider purging the contempt by complying with the Disclosure Order.

9.  The contempt is continuing.  The defendant has not purged the contempt.  I do not accept his apology/expression of remorse (which I find insincere and half-hearted) or explanation (which I consider incredible) at the hearing yesterday that he had tried to retain solicitors to advise and represent him after 2 March 2021 but he could not afford the “enormous” legal costs.  It is not suggested that the information to be provided under the Disclosure Order is complicated or voluminous.

10.  The plaintiff has suffered, and will continue to suffer, irreparable prejudice so long as the Disclosure Order is breached.  An ancillary disclosure order is often made by court at the same time as or after granting a proprietary/Mareva injunction for certain necessary purposes, which will of course be compromised or defeated in the event of breach.  The Disclosure Order in this case obligates the defendant to disclose, and verify on oath, (1) his dealings with the Sums and the current whereabouts of their traceable proceeds and (2) all his assets of an individual value of HK$50,000 or more in Hong Kong.  The former information is required by the plaintiff in tracing and locating the Sums while the latter information will allow him to police compliance with the Mareva aspect of the Injunction Order.  By withholding such information from the plaintiff, the defendant is (1) frustrating or delaying the plaintiff’s efforts in the recovery of the Sums and (2) making it difficult for the plaintiff to enforce the Mareva aspect of the Injunction Order.

11.  Not only has the defendant persisted in the contempt of court, he has not adduced any evidence on mitigation either notwithstanding the opportunity to do so given by the court.  In this connection, directions were given at the 2 March 2021 hearing for the filing and service of evidence relevant to sentencing.

12.  In these circumstances, I believe I am here dealing with a very recalcitrant defendant.  An immediate custodial sentence of 6 months is called for.

13.  However, for the sake of the plaintiff and with reluctance, I am prepared to suspend the sentence for 14 days to give the defendant a final chance to purge the contempt by complying with the Disclosure Order, albeit belatedly.

Assessment of costs

14.  Turning to costs, I summarily assess the costs awarded to the plaintiff under my orders dated 24 February 2021 and 6 March 2021 at $110,000 and $120,000 respectively.  The defendant shall pay such costs within 14 days from today.

15.  Lastly, I thank Mr Victor Lui, counsel for the plaintiff, for his able assistance.

HCMP 2323/2020

[2021] HKCFI 498

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2323 OF 2020

______________________

______________________

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REASONS  FOR  JUDGMENT

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1.  On 24 February 2021, at the first hearing of the originating summons dated 21 December 2020 (“OS”) seeking an order that the defendant be committed to prison for his contempt of court, after hearing the plaintiff, I was persuaded to the requisite standard of proof that the defendant has been guilty of contempt of court. Notwithstanding the defendant’s absence at the hearing, I ordered the issuance of a warrant for committal against him and awarded costs of these proceedings against him on indemnity basis.

2.  I now give reasons.

HCA 2208/2019

3.  It is the plaintiff’s case that he was induced by various conspirators into making substantial payments to certain nominee recipients in respect of a non-existent investment scheme.

4.  The defendant was one such alleged nominee recipient, who received a total of HK$15 million by way of 3 cheques dated 21 September 2018 defrauded from the plaintiff.  These sums were paid into the defendant’s account numbered 961-xxxxxx-942 (“defendant’s account”) at the Industrial and Commercial Bank of China Limited.

5.  On 29 November 2019, the plaintiff commenced HCA 2208/2019 against, inter alia, the defendant herein as the 9^th defendant.  It is claimed that the plaintiff is entitled to, among other relief, a declaration of trust over the sums received by the defendant, alternatively restitution of the same.

6.  Prior to the commencement of HCA 2208/2019, on 26 November 2019, upon the plaintiff’s ex parte application, this court granted against the defendant a proprietary/Mareva injunction over the sums received in the defendant’s account (“Injunction Order”).

7.  Insofar as it is material to the OS, paragraphs 4 and 5 of the Injunction Order imposes upon the defendant the following disclosure obligation (“disclosure order”):

“4. The 9^th Defendant must inform the Plaintiff through his solicitors in writing within 72 hours of being served with this Order of (i) his dealings with the sums received by him as set out in Annex III and the current whereabouts of their traceable proceeds; and (ii) all his assets of an individual value of HK$50,000 or more in Hong Kong, whether in his own name or not and whether solely or jointly owned, giving the value, location and details of all such assets. The 9th Defendant may be entitled to refuse to provide some or all of this information on the grounds that it may incriminate him.

5. This information must be confirmed in an affidavit which must be served on the Plaintiff’s solicitors within 7 days after this Order has been served on the 9^th Defendant.”

8.  The Injunction Order warned in paragraph 13 that it is a contempt of court knowingly to assist in or permit a breach of the order.

9.  The Injunction Order was also endorsed with a penal notice in both Chinese and English as follows:

“若你疏於遵守或遵從本命令,你可能被裁定藐視法庭而你(或你的董事)可被判入獄或罰款或你的資產可能會被扣押。

If you neglect to obey or comply with this Order, you may be held to be in contempt of court and you and/or any of your director(s) may be imprisoned, fined or your assets may be seized.

若任何知悉本命令的人士促使或協助違反本命令,該人士亦可能會被裁定藐視法庭。”

Any other person who knows of this Order and does anything which helps or permits the Defendant (or any of them) to breach the terms of this Order may also be held to be in contempt of court and may be imprisoned, fined or have their assets seized.”

Service of the Injunction Order on the defendant and non-compliance with the disclosure order

10.  On 29 November 2019, the plaintiff’s solicitors served, inter alia, a sealed copy of the Injunction Order on the defendant by leaving the documents at the defendant’s then last known address at 2/F, 42 Tong Sheung Tsuen, Lam Tsuen, Tai Po, New Territories, Hong Kong (“defendant’s first address”).

11.  At the hearing of the plaintiff’s inter partes summons on 6 December 2019, the defendant did not appear and the Injunction Order was continued against the defendant by Deputy High Court Judge Leung until trial or the further order of the court (“Continuation Order”).

12.  On 12 December 2019, the plaintiff’s solicitors served on the defendant a sealed copy of the Continuation Order, indorsed with the same penal notice, by inserting the same through the letter box for, and by sending the same by ordinary post to, the defendant’s first address.

13.  Despite the said attempts to serve the defendant, the plaintiff heard nothing from the defendant until 11 May 2020 when his solicitors, Mayer Brown (“MB”) received a letter from Ho & Associates (“HA”), saying that they had instructions to act for the defendant who had not been served with any court documents.  HA requested all documents that may concern the defendant to be served on them.

14.  By a letter dated 12 May 2020, MB clarified that the court documents relevant to the defendant had been served on him at the defendant’s first address.  HA was asked to file and serve on MB a notice to act as soon as possible so that MB could serve documents on the defendant via HA. 

15.  HA served their notice to act for the defendant on MB on 14 May 2020, with a request that all relevant documents be served on them.  This was done by MB on 15 May 2020.  In particular, the documents served on HA included a sealed copy of the Injunction Order indorsed with a penal notice and a sealed copy of the Continuation Order indorsed with a penal notice (“Orders” collectively).

16.  By a letter dated 6 July 2020 to HA, MB noted that as of that date, they had yet to receive any information or affidavit from the defendant pursuant to the disclosure order under the Injunction Order and put on the record that the defendant had failed to comply with the disclosure order in beach of the Injunction Order and that such breach was continuing.  MB requested the defendant to comply with the disclosure order within 7 days from 6 July 2020, failing which the plaintiff would take further actions against the defendant without further notice.

17.  On 3 August 2020, MB asked to serve the Orders on the defendant personally at HA’s office on 6 August 2020.

18.  HA responded to such request by letter of the following date to the effect that they no longer had instruction to act for the defendant in HCA 2208/2019 and enclosed a copy of the defendant’s notice to act in person filed on 29 July 2020 and giving 2/F, 322 Kau Liu Ha, Lam Tsuen, Tai Po, New Territories, Hong Kong (“defendant’s new address”) as the defendant’s address.

19.  Despite the provision of the defendant’s new address, attempts by MB’s process server to effect personal service of the Orders (both indorsed with the said penal notice) on the defendant at the defendant’s new address on 4 and 13 August 2020 did not succeed.  Nobody answered the door.  In the end, the documents had to be inserted through the letter box for the defendant’s new address. 

20.  The defendant had been given advance notice of the second visit by MB’s process server by MB’s covering letter dated 4 August 2020 and was specifically requested to contact MB to make alternative arrangement if the date and/or time proposed by MB was inconvenient to him.

21.  I note that MB’s covering letter dated 13 August 2020 required the defendant to comply with paragraph 4 of the Injunction Order within 72 hours of being served with the Injunction Order and paragraph 5 within 7 days from 13 August 2020.  Such request has been ignored so far.

Committal proceedings

22.  Against the aforesaid background, upon the plaintiff’s ex parte application filed in in HCA 2208/2019 on 10 September 2020, on 10 December 2020, I

(1)  granted leave to the plaintiff to commence committal proceedings against the defendant for failure to perform the disclosure order in breach of the Injunction Order;

(2)  dispensed with personal service of the Orders on the defendant; and

(3)  gave leave to the plaintiff to serve the relevant documents on the defendant by way of substituted service by ordinary post to the defendant’s new address.

23.  I considered it appropriate to (1) dispense with personal service of the Orders and (2) allow substituted service of relevant documents on the defendant by ordinary post to the defendant’s new address for these reasons:

(1)  Evening assuming that the attempts at service at the defendant’s first address were all ineffective in bringing the Orders to the notice of the defendant[1], the defendant was represented by solicitors, i.e. HA, from at least 11 May to 28 July 2020.  The Orders were, at HA’s request (presumably on instruction), served on them on 15 May 2019.  One would have further expected the solicitors to provide the defendant with the documents and to advise the defendant as to their contents, in particular, the terms of Orders and the consequences of non-compliance with such orders.

(2)  MB’s letter dated 6 July 2020 to HA requested the defendant to comply with the disclosure order within 7 days from 6 July 2020, failing which the plaintiff would taken further actions against the defendant without further notice.  Again, one would have expected the solicitors to relay to the defendant such request and advise him of the possible further actions that the plaintiff may take in the event of non-compliance including committal proceedings.

(3)  The Orders had been twice inserted through the letter box for the defendant’s new address which was provided by the defendant himself in his notice to act in person in HCA 2208/2019.  There was no reason to think that the documents so served would not reach the defendant.

(4)  MB’s attempts to make appointments to effect personal service on the defendant on 6 August 2020 at HA’s office and on 13 August 2020 at the defendant’s new address were both evaded/ignored.

24.  Pursuant to my order dated 10 December 2020, the plaintiff issued the OS to seek the committal of the defendant for his contempt of court.  On 23 December 2020, all material documents including the OS, the 1^st affirmation of Chen Hoi Kei dated 21 December 2020 filed in support of the OS and the notice of appointment to hear OS also dated 21 December 2020 were served by ordinary post to the defendant’s new address.  To date, the plaintiff and his solicitors had not received from the defendant any acknowledgement of service of the OS; or any information given pursuant to the disclosure order.

25.  I was satisfied that the plaintiff has complied with all procedural requirements for the commencement of the present committal proceedings.

Relevant legal principles on contempt

26.  Sir Gerard Brennan NPJ authoritatively laid down these principles in Kao, Lee & Yip v Donald Koo Hoi Yan (2009) 12 HKCFAR 830 at [6], [21], [24], [30]:

(1)  The objective of civil contempt proceedings is the maintenance of the court’s authority.  The administration of justice would be undermined if any court order could be disregarded with impunity.

(2)  An allegation of civil contempt must be proved strictly.  The contemnor’s guilt is to be proved beyond reasonable doubt.

(3)  Where the alleged contempt is based on a failure to comply with a court order, it is necessary to (a) construe the relevant order to ascertain its meaning and operation; (b) determine if the defendant in fact complied with the order so construed; and (c) consider whether any failure to comply was accompanied by the state of mind necessary to establish punishable contempt.

27.  As to the relevant state of mind in civil contempt:

(1)  It is sufficient to demonstrate (a) that the contemnor’s conduct was intentional in the sense of consciously, voluntarily and unaffected by any mistake, as opposed to casually, accidentally or unintentionally; and (b) that he knew the facts which rendered it a breach of the order.

(2)  It is not necessary to show that the defendant realised that his conduct would constitute a breach.

(3)  Reasons, motives and understandings of the contemnor may be highly relevant to penalty but not to liability.

SeeArlidge, Eady & Smith on Contempt (5^th ed, 2017), §§12-94 – 12-95; Kao, Lee & Yip, [45], [46] & [53] per Sir Gerard Brennan NPJ.

Dealing with an absentcontemnor

28.  Where the contemnor is absent at the hearing, provided service is properly effected or dispensed with, the court may proceed with the hearing, although the plaintiff would come under a duty to bring all relevant matters to the court’s attention: Navig8 Chemical Pools Inc v Inder Sharma, HCMP 2885/2016, unreported, 14.2.2017, [14]-[23] per Anthony Chan J.  Where contempt is found, the court should issue a warrant for committal to have the defendant arrested, and brought before the court as soon as possible so that he may make submissions on the appropriate penalty: Navig8 Chemical Pools, [43]-[44].

29.  I was satisfied that the defendant had been properly served with these proceedings and notice of the hearing on 24 February 2012 but chose not to attend the hearing.  The address to which, inter alia, the OS, the supporting affirmation, the notice of appointment to hear OS by which the date and time of the 24 February 2021 hearing was given etc were posted on 23 December 2020 was given by the defendant in his notice to act in person.  There is no reason to think that documents sent by ordinary post to such address would not reach or come to the attention of the defendant.

Defendant plainly guilty of contempt of court for breach of Injunction Order

30.  Applying the three-stage approach in Kao, Lee & Yip:

(1)  Paragraphs 4 and 5 of the Injunction Order are standard and unambiguous.  Paragraph 4 requires the defendant to inform the plaintiff’s solicitors, within 72 hours of being served with the order, (a) his dealings with the sums received in the defendant’s account from the plaintiff and the current whereabouts of their traceable proceeds; and (b) all his assets of an individual value of HK$50,000 or more in Hong Kong.  Paragraph 5 requires the confirmation of the aforesaid information in an affidavit, to be served on the plaintiff’s solicitors within 7 days after being served with the order.

(2)  There is no question that the defendant was aware, but acted in breach, of the disclosure order.  In this connection, I repeat [23] above.  Leaving aside the earlier attempts to serve the defendant at his first address, the defendant had since 15 May 2020 been repeatedly served with the Orders through his solicitors and at the address provided by him for the purpose of service in HCA 2208/2019.  His attention had also been specifically drawn to the disclosure order in MB’s numerous covering letters.  To date, the defendant still has not provided any information of (a) how he had dealt with the HK$15 million he received from the plaintiff or their current whereabouts; or (b) whether he has any valuable assets in Hong Kong and if so, what those assets may be, let alone serving any affidavit/affirmation to confirm such information.

(3)  The irresistible inference is that the defendant’s non-compliance with the disclosure order was intentional in the relevant sense and that he knew the facts that rendered such non-compliance a breach of the Injunction Order.

31.  I was persuaded beyond reasonable doubt that the defendant is guilty of contempt of court for failing to comply with the disclosure order under the Injunction Order.  In his absence, the appropriate course was for the court to issue a warrant for committal to have him arrested and brought before it as soon as possible so that he may make submissions on the penalty: Navig8 Chemical Pools, supra, [43]-[44].  I therefore ordered that a warrant for committal be issued against the defendant.

Costs

32.  Indemnity costs is the usual order where contempt had been found: see, e.g. Navig8 Chemical Pools, supra, [45].  I ordered that the costs of and occasioned by these proceedings be paid by the defendant on indemnity basis, to be taxed if not agreed.

Mr Victor Lui, instructed by Mayer Brown, for the plaintiff

The defendant was not represented and did not appear