Willwin Development (Asia) Co Ltd v. Wei Xing and Others
Read the full judgment text of HCMP 2946/2014 on BabelCite. This High Court CFI judgment was delivered on 16 November 2015.
1. On 12 October 2015, I handed down a Judgment (“ Judgment ”) whereby R1 and R2 were held to have been in breach of the Amended Injunction Order and the Anton Piller Order, as defined therein, and I found R1 and R2 guilty of civil contempt.
Cited by 2 cases · Cites 14 cases
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HCMP 2946/2014 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO 2946 OF 2014 ______________________
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_______________ D E C I S I O N _______________ Introduction 1.On 12 October 2015, I handed down a Judgment (“Judgment”) whereby R1 and R2 were held to have been in breach of the Amended Injunction Order and the Anton Piller Order, as defined therein, and I found R1 and R2 guilty of civil contempt. 2.For ease of reference, in the present decision, I shall adopt the same nomenclature in the Judgment. 3.At the end of the Judgment, I indicated that I would hear further submissions from the parties before deciding in relation to penalties and appropriate orders, including costs. The hearing was on 5 November 2015, and this is my decision.
4.There is no real dispute between the parties on the general principles on civil contempt, which have been set out in paragraph 52/9/1 of the Hong Kong Civil Procedure 2016, Volume 1 (HKCP). Counsel have also referred the court to various authorities. To summarise their submissions:
Penalty for R1 5.A is seeking that R1 be committed to prison for his contempt and relies on a number of aggravating factors as set out by A’s Counsel Mr Poon in his submissions in justifying a custodial sentence against R1. 6.It has been set out in the Judgment that R1 had sought to discharge the Orders, failed, and did not proceed with his application to appeal, and yet, he had chosen not to comply with the Orders, all along arguing that the clients in the Clients List were clients of SWT’s, and not of A’s. 7.Mr Fong, R1’s Counsel, submitted that it was R1’s firm belief that A was not entitled to claim for any damages in the Main Trial, nor entitled to apply for the Orders, and that his state of mind would be a relevant factor in determining the proper sentence. In this respect, Mr Fong referred to the case of In re Mileage Conference Group [1966] 1 WLR 1137. 8.In In re Mileage, Megaw J had said that questions as to the bona fides of the persons who are in contempt, and their reasons, motives and understandings in doing the acts which constitute the contempt of court, may be highly relevant in mitigation of the contempt, and that bona fide reliance on legal advice, even though the advice turns out to have been wrong, may be relevant, and sometimes very important, as mitigation[10]. Megaw J then went on to say that reliance on legal advice certainly cannot be relied upon as a matter of course, as complete mitigation[11]. It was eventually held in that case that the breach of undertaking was not contumacious but was committed reasonably on the basis of legal advice that the acts were lawful, nevertheless such a breach constituted a contempt of court and a fine was imposed on each of the companies concerned. 9.I am of the view that In re Mileage does not really assist R1. There was no evidence that R1’s firm belief that A was not entitled to apply for the Orders and that R1 could ignore the Orders based on such belief was on the basis of any professional or legal advice he had received. He was and continues to be under a legal obligation to comply with the Orders, and his defiance is subsisting. In my view, whether contemptuous or not, his non-compliance was deliberate and contumacious, and this is the main aggravating factor. 10.R1’s contempt has yet to be purged. As stated in paragraph 52/9/1 of HKCP, any apology by a contemnor should be done personally, either by affidavit or viva voce, in order that its precise terms, flowing from the contemnor, may be seen and accepted as being genuine[12]. R1 has not offered any apology to the court whether by affidavit or viva voce. 11.Having considered R1’s attitude and continuing defiance, I am of the view that this is not a case where a fine would be appropriate. 12.Mr Fong accepted that it would not be wrong in principle to impose a custodial sentence, as a “starting point”. However, he urged the court to consider the mitigating factors and impose a suspended sentence on R1 instead of immediate imprisonment. Personal Particulars of R1 13.R1 is 45 years of age, a university graduate, married (with R3) and he has a daughter now aged 14. R1’s parents are both 78 years of age and are now retired. They were doctors before their retirement. The only sibling in his family is his elder brother WW. 14.R1 and his family members usually reside in Shenzhen. His daughter needs to come to Hong Kong everyday for her secondary education and medical treatment as required for her chronic sleeping disorder. Either R1 or R3 will have to bring their daughter to and from Hong Kong. 15.The Mitigation Bundle submitted on behalf of R1 contained, among other things, mitigation letters from his parents, R3, their daughter, and also evidence from R1’s father-in-law. R1 is regarded as a filial son by his parents and a responsible and loving father by his daughter. 16.R1’s daughter’s chronic sleeping disorder results in her having the risk of suffocation during her sleep at night. She already had an operation in 2012, but her condition deteriorated and she was hospitalized on 2nd July 2015. Arrangement is now being made for her to have another operation in Hong Kong. The treating doctor in Kwong Wah Hospital indicated that the operation would be scheduled to take place at the end of this year. Various medical reports for R1’s daughter were included in the Mitigation Bundle. 17.It was submitted by Mr Fong on behalf of R1 that the current medical conditions of his daughter would require full care and attention from R1 and R3. 18.In respect of R1’s occupation, R1 began involved in the industry of electronic manufacturing in the Mainland China in or about 2000. Soon after, he together with his brother and other shareholders set up their company to engage in such business. According to R1, in or about 2011, WW suddenly asked to leave the business and demanded huge payout from all the remaining shareholders. Since then disputes arose between R1 and WW and between WW and other shareholders. 19.This court was told that since 2011, WW has instigated 20 to 30 litigations in the Mainland China against R1; and 6 to 7 litigations against the other shareholders in the Mainland China. Some are still ongoing in the Mainland China. 20.Also, in Hong Kong, WW has instigated no less than 3 litigations against R1. 21.Mr Fong submitted that these litigations have caused huge psychological and financial impact on R1 and his family. In order to pay for the huge legal costs, R1and R3 had to sell their two residential properties, one in Hong Kong and one in Shenzhen. So far, this court was told that over HK$4 million had already been spent by R1 on litigations and there were still some outstanding fees not yet paid to R1’s former solicitors in Hong Kong, and because R1 had used up all his assets to defend himself in the litigations instigated by WW in Hong Kong and Mainland China, he had to act in person in the Main Trial. 22.Currently, R1 and his family reside in R3’s younger brother’s flat in Shenzhen. The court was told that financially R1 and his family were/are living on borrowings from their friends and relatives and every now and then R1’s parents had subsidized their living expenses. 23.The medical reports and medical expenses details including photographs of R1’s daughter lying on the hospital bed in the Mitigating Bundle supported the medical condition of R1’s daughter. The mitigation letters from R1’s parents indicated that they are both on R1’s side in his dispute with WW, and indeed, the elderly parents had come all the way from Shenzhen to attend the mitigation hearing before this court on 5 November 2015, to give support to R1. 24.Although the various instances of non-compliance of the Amended Injunction Order covered a period of about 2 years from mid 2012 to about September 2014, most of the invoices and Purchase Orders in the Spreadsheet relied on by A were in late 2011 and 2012, with only about 3 invoices in 2013 and about 1 Purchase Order in 2014. There was no evidence of any Purchase Orders issued by Apple to R2 after September 2014. These proceedings were issued in November 2014, and there was no evidence that R1’s breach of the Amended Injunction Order had continued after September 2014. 25.The Ex Parte Orders were obtained in May 2012. R3 had filed a 3rd affirmation on behalf of R2 on 4 November 2015 (“HY3-2946”), the day before the mitigation hearing before this court, purportedly to purge R2’s contempt. 26.In this affirmation, R3 had produced certain documents under Items 1 and 2 of the Listed Items, namely R2’s company records and R2’s HSBC Bank account statements up until and including April 2012. She had explained that as R2 was only about 9 months old, many of the Listed Items were not created or in existence at the time of the Anton Piller Order. 27.Mr Fong submitted that the purpose of the Anton Piller Order was to preserve the items in the Listed Items and for production of the Listed Items pending and for the purpose of the Main Trial. The Main Trial has by now been completed, and the parties are awaiting the determination of the Trial Judge, and Mr Fong submitted that A had not suffered any substantial prejudice from the non-compliance of the Anton Piller Order. 28.On the other hand, Mr Poon submitted on behalf of A that the wilful failure on R1’s part to comply with the disclosure obligations in the Anton Piller Order had made it extremely difficult for A to ascertain (i) the true nature and extent of diversion of business by Rs and (ii) the quantum of loss and damage suffered by A under the Main Action, and that A had no options but to embark on time-consuming and costly non-party discovery proceedings against Apple. Further, even though the Main Trial has concluded A is seeking an account of profits or any inquiry as to damages by Rs for diverting business opportunities to R2 and/or SZESL. 29.I have mentioned in the Judgment that it was not stipulated in the Anton Piller Order for what period the Listed Items were to cover[13]. On my reading of the Anton Piller Order, paragraph 4 and paragraph 5 would relate to only those Listed Items available at the date of the Anton Piller Order. R2 was incorporated on 15 September 2011, and business commenced on that day. A took the view that R1 and R2 should produce also the Listed Items of SZESL. 30.It is not quite clear what “associated person/partner/company” meant or entailed in the Anton Piller Order. SZESL was only incorporated on 1 December 2011. My finding in the Judgment was that Rs were closely connected with SZESL[14] but there was no actual finding that SZESL was an associated company person/partner of R2. 31.In HY3-2946, R3 had produced R2’s HSBC bank statements between November 2011 and April 2012, and there were deposits which were comparable or corresponded with payments made by Apple between February and April 2012, as gleaned from the Spreadsheet. 32.I accept that at the time of the Anton Piller Order, R2’s audited accounts may not have been available. Further, most of the Annexure B documents would not have been available at the time of the Anton Piller Order. 33.Apple did not contest the Discovery Order, and any time and costs incurred by A in the application for the non-party dislosure would have to be seen in light of the background of the proliferation of interlocutory applications and the various litigations between the parties. 34.I have mentioned in the Judgment that Apple was the top of the Clients List in the Injunction Order[15], and it was also the only entity/client against which A had obtained a non-party disclosure order. So far as Apple was concerned, A had already obtained a lot more information from the Apple Documents to support its case, than it would have under the Anton Piller Order from Rs had Rs complied with it in May 2012. I, however, accept that there were other entities named in the Clients List. 35.Accounting of profits or inquiry as to damage is premature, A has not yet obtained any judgment on liability against R1 in the Main Action and any accounting of profits or inquiry as to damages may be subject to any orders or directions of the Trial Judge, if the R1 is to be found to be liable. I accept that any prejudice caused to A as a result of R1’s non-competence of the Anton Piller Order may not be that substantial. 36.Having said this, there is a public interest to ensure that court orders are obeyed, and I have said earlier, R1’s defiance of the Orders was/is continuing, deliberate and contumacious. 37.Mr Fong had referred the court to CMA CGM v Ng Chip Choi Maurice (unreported) HCMP 2988/2014 12 March 2015 where Au-Yeung J had considered the following principles in Crystalmews Limited v Metterick [2006] EWHC 3087 (Ch) in sentencing the contemnor:
38.In that case, Au-Yeung J found that the contemnor had already been given several chances to comply with the order, but he only tried to do so selectively and this was already 11 months after the first order, and that up until the date of the judgment the contemnor still had not yet completely purged his contempt. She then sentenced the contemnor to 14 days imprisonment. 39.Although it has been said that the normal penalty for breaches of injunction orders is imprisonment measured in months, each case will depend on its own circumstances. The dispute in the present proceedings is essentially between two brothers. There is already great hostility between the two of them which has affected their elderly parents. Having considered the mitigating factors, including any prejudice to A, the condition of R1’s daughter, the history of the litigations and the amount of costs incurred, I am prepared to give R1 a further chance to purge his contempt. In my view, the appropriate sentence for R1 in this case is 28 days, to be suspended on the condition that R1 files an affirmation within 28 days hereof to purge his contempt. Indemnity Costs 40.R1 did not oppose to pay A’s costs of these proceedings on indemnity basis, jointly and severally with R2. I will make such an order accordingly. There will be a certificate for counsel. As the trial of these proceeding lasted 6 days plus another day for mitigation and submission on costs, such costs will not be insubstantial. Writ of Sequestration 41.The writ of sequestration is regarded as a drastic means of execution and if should only be used in serious cases. 42.At the hearing before this court on 5 November 2015, I had raised the issue as to whether by seeking leave to issue a writ of sequestration against R1 and R2 as well as seeking orders for imprisonment/fine would amount to seeking “double penalties”. 43.Mr Poon had not been able to produce any authorities in which leave to issue a writ of sequestration was granted as well as imposing an imprisonment and/or a fine. 44.In Lau Yee Ching v Wong Tak Kwong (unreported), CACV 385/2005, 3 March 2006, on an appeal in relation to indemnity costs ordered against the contemnors, which was said to be disproportionate to the fine imposed, the Court of Appeal had commented that the bringing of contempt proceedings was, in itself, an expensive exercise but it was for the benefit of the court because the court’s orders were being enforced and adhered to, and that an order for indemnity costs was, in itself, a penalty, and that the court would adjust the other penalties which would be imposed to take that into account. In dismissing the appeal, the Court of Appeal was of the view that although the indemnity costs might appear disproportionate, one had to bear in mind that it was a global penalty, the indemnity costs being part of the penalty which was imposed[16]. 45.Mr Poon had also referred this court to Cedar Base Electronic Ltd v Wong Chak Kung trading as Hung Fung Electronics & Toys MFY Co and Anor, HCA 757 of 1999, unreported, 16 July 1999 in which Madam Justice Yuen, as she then was, gave leave to the plaintiff to restore the motion to issue a writ of sequestration only after the contemnors failed to pay the fine imposed. 46.If such leave were to be granted, all of R1’s assets would be sequestered. I have imposed on R1 a suspended sentence of imprisonment. I have also ordered R1 to pay A’s costs on indemnity basis, jointly and severally with R2. In my view, this is not an appropriate case to impose a writ of sequestration or to adjourn A’s leave application sine die with liberty to restore. I will dismiss A’s leave application to issue a writ of sequestration against R1. Penalties against R2 47.As R2 is a body corporate, A is asking the court to impose a fine against it for its contempt. 48.Mr Poon had referred the court to Liaoyang Shunfeng Iron And Steel Company Limited & Anor v Sunny Growth Enterprises Group Limited, unreported, HCMP 667/2013, 15 May 2013 where Au J made the following observations[17]:
49.A also relied on the same aggravating factors for R2, as in the case of R1. Mitigating Factors 50.Mr Yu submitted that R2 or R3 was rarely involved in communication with Apple after May 2012, and that R2 played a minor role, if not minimal, and that it was the staff members of SZESL who played a more substantial role in communicating with Apple, as compared to R2. 51.R2 had been running on paper and at a loss since its establishment, and that it had stopped business, and the only reason why R2 is still an active company is for litigation purpose. 52.Mr Yu submitted R3 had offered her apology on behalf of R2 in HY3-2946. HY3-2946 53.I have found that R2 had been in breach of paragraph 2 of the Amended Injunction Order for the reasons set out in the Judgment. In this affirmation, R3 apologized on behalf of R2 for the late disclosure of information under the Anton Piller Order only. She also produced certain company documents for Items (1) and (2) of the Listed Items pursuant to the Anton Piller Order, some of which had already been disclosed previously. 54.Mr Poon pointed out that the contents of HY3-2946 were dubious and problematic. 55.So far as R2 is concerned, I have said I accept the audited accounts of R2 may not be available in May 2012 and that R2/R3 has now produced HSBC bank statement which should be available in May 2012. I have already dealt with A’s case that R2/R3 should have produced Listed Items relating to SZESL. 56.This court’s finding was that the documents in the Listed Items (1) – (4) were within R2’s possession, custody, power and control to obtain and/or to produce. 57.It was also this court’s finding that although R1 had at all material times and has the sole control and management of the domain name of “caevolution.com” since registration, all the Rs had the use of the email system bearing the domain name since registration[19]. 58.There was no production of any other documents under in particular Items (3)-(4) in HY3-2946. R3, notwithstanding the findings of this court, maintained in her affirmation that R2 did not have Items (3)-(4) in its possession, power, custody and/or control[20], nor did R2 have possession, power, custody and/or control of the Apple Documents. 59.R3 gave 5 reasons for failing to comply with the Anton Piller Order:
60.Even if there had some inaction on A’s part, and that R2 and its solicitors had overlooked the disclosure requirements in the Anton Piller Order initially, latest by 20 August 2013, R2 and its solicitors had been reminded of such requirements when A’s solicitors wrote to R2’s solicitors on that day[21]. Apart from copies of the incorporation form, certificate of incorporation, certificate of change of name and its annual return filed on 29 September 2012[22], there had been no other disclosure by R2 and no attempts to do so even after the present contempt proceedings had been instituted, until the filing of HY3-2946 at the eleventh hour. 61.As for the alleged loss of company records and bank statements, it was within R2’s power to obtain from other sources at least some of the company records and bank statements had it intended to do so, eg, the Companies Registry, R2’s Company Secretary/auditors, or the bank/s. 62.Even if R2 was 9 months old at the time of the Anton Piller Order, it should have disclosed whatever documents in the Listed Items that were available at the time. Up until now, R3 did not clearly state which documents under Items 1 and 2 R2 did not have and her latest affirmation was vague. The original purpose for seeking the Anton Piller Order had been lost in the passage of time was not an explanation as to why R2 failed to comply with the order in the first place. 63.In any event, the Listed Items in the Anton Piller Order was not confined to documents relating to Apple. There was no explanation at all offered by R3 in HY3-2946 in relation to the non-disclosure of Items (3)-(4) of other clients of R2’s. 64.During the hearing, I had given R2 a chance to file a further affirmation from R3. R2/R3 had declined to do so. 65.R3’s apology came very late, only the day before the hearing. In my view, it was vague and not really sincere since R2 had still failed to comply in full with paragraphs 4(1), 4(2) and 5(1) of the Anton Piller Order, in particular in respect of Items (3)-(4) of the Listed Items and in relation to other clients of R2, and R2 declined to do so even when the court was willing to give it a further opportunity. In my view, R2’s non-compliance was/is deliberate and contumacious. Such continuing non-compliance is an aggravating factor. 66.It can be seen that as from December 2011 onwards until April 2012, the HSBC Account of R2 had been active, with various USD deposits every month, and appeared to be not completely identifiable/traceable to transactions in the Spreadsheet. Thus, documents under Items (3) and (4) may shed light on the source of those deposits, and/or business R2 may have conducted with other clients on the Clients List, if any. 67.In Aqua-leisure Industries Inc & Aqua Splash Ltd (No 2) [2002] 1 HKLRD 241, HCA 18928 of 1998, the fact that the defendant company in that case had already been formally wound up did not deter Deputy Judge To, as he then was, from ordering a fine which he considered appropriate in the circumstances. He imposed a fine of HK$300,000 on the defendant company. 68.Similarly, whether R2 is running at a loss or has stopped business should not deter this court from ordering a fine which is appropriate in the circumstances. 69.R2 does not oppose an award of indemnity costs in favour of A, jointly and severally with R1. As I have said earlier, such costs will not be insubstantial. 70.Having considered all the circumstances and bearing in mind, that the indemnity costs will be part of the global penalty, I will impose a fine of HK$300,000 on R2, to be paid into court within 28 days. 71.A has also applied for leave to issue a writ of sequestration against R2. In my view, R2 being a limited company is in a different position as R1. Having considered the circumstances of this case, I will follow the approach of Yuen J, as she then was, in Cedar Base Electronic, and will adjourn this application sine die with liberty to restore in the event that R2 fails to pay the fine. Costs of R3 72.A sought either of the following costs orders in respect of R3:
73.R3, on the other hand, sought an order that costs should follow the event in respect of the A’s case against her. Further she sought such costs be on an indemnity basison the following grounds as set out in Mr Yu’s submission:
74.Mr Yu had relied on Chou Yi Feng v Chou Yi Chen (unreported) HCA 4393/2001, 23 November 2002 and submitted that there is no apparent reason to depart from the usual rule that costs should follow the event. 75.However, in Chou Yi Feng, there were 4 applications, namely (i) the plaintiff’s application for service of the injunction orders to be dispensed with; (ii) the defendants’ application for setting aside leave to apply for committal for contempt of court; (iii) the defendants’ application for the discharge of part of the injunction order; and (iv) the plaintiff’s motion for committal for contempt of court. The plaintiff was unsuccessful on almost all 4 applications. 76.Mr Poon submitted that in the present case, A reiterated that it was justified in bringing these proceedings against R3. 77.Mr Poon referred the court to Knight & Anor v Clifton & Ors [1971] Ch 700 where it was held that in relation to contempt proceedings, the court had complete discretion over costs, both with regard to whom and to what extent it should be paid. Under exceptional circumstances, it could be appropriate for the court to award costs against a successful party[23]. Such cases could include occasional rare cases in which the conduct of the defendant had brought about the proceedings or in which his conduct caused its continuance or in which he escaped the normal consequences of his blameworthy conduct by reason of some unexpected matter which he knew but which the plaintiff could not know[24]. 78.The foregoing legal proposition was summarized and adopted in the judgment of Interlego AG v Lego New Enterprises Ltd [1995] 3 HKC 186[25]. In this case, there was no finding of contempt made against the defendants but the special circumstances of the case in that the defendants having made a concession to the plaintiff in changing its infringing company name and also having proved to the satisfaction of the plaintiff that it had complied with the injunction order[26]was considered to have warranted a “no order as to costs” between the directors of the corporate defendant and the plaintiff[27]. 79.Mr Yu, however, sought to distinguish the Interlego case in that the subject contempt application was not proceeded with and there was no finding by the court of contempt against any of the defendants, and that neither the applicant nor respondents could be said to be wholly successful or wholly unsuccessful. 80.In Funny Electronics Company Limited v World Asia Plastics Die-Casting Mould Factory (a firm) & Ors, unreported, HCA 790/1985, 25 November 1985, although Nazareth J had dismissed committal proceedings instituted by the plaintiff therein, he made no order as to costs after having regard to the singularly unsatisfactory conduct of the respondent in that matter, conduct by which the respondent had brought upon himself those proceedings[28]. The dismissal of the committal proceedings in that case was due to a defective penal notice. 81.Mr Poon also referred the court to Roger Paul Germain Yves Fromentin v Kim’s Yacht Company Limited & Anor, unreported, HCA 1226/2004, 7 June 2005, upon dismissing the plaintiff’s application to commit the 2nd defendant therein, the court nevertheless ordered that each party should bear his own costs because it was of the view that the 2nd defendant had just fallen short of committing contempt beyond reasonable doubt[29]. 82.In the present case, it was my finding in the Judgment that latest by 5 September 2012, R3 should have knowledge of the terms of the Orders. I was, however not able to say, beyond reasonable doubt, that she was fully aware of the nature of the Orders and consequences of disobedience of the Orders, to justify a dispensation of service order. On the merits, I was not satisfied beyond reasonable doubt that by simply being in name the sole director and sole shareholder of R2, and having signed the HSBC Letter, R3 was able to prevent the various non-compliances of R2 or had aided and abetted such non-compliance. 83.Mr Poon had referred to R3’s oral evidence in the Main Trial which was after the contempt trial before this court. Such evidence appeared to show that R3 had admitted having received and known about the terms of the Orders and that she had not carried out any of the prohibited acts in the Amended Injunction Order, and she admitted that she did not procure R2 to disclose the bank statements or company records pursuant to the disclosure obligations in the Anton Piller Order. 84.I do not intend to consider the above oral evidence, as such evidence was after trial before this court. It was this court’s finding that R1 was in fact in control of R2, and I accept but for this finding, R3 being the sole registered director and shareholder of R2 could be considered as an alter ego of R2, and A was not unjustified in bringing these proceedings against R3. I also accept that there was no evidence to suggest that R3 had taken active steps or at least tried, in her capacity as sole director and shareholder, to ensure that R2 would comply with the Orders until the filing of HY3-2946, and this was notwithstanding the institution of these proceedings in December 2014. 85.Throughout these proceedings, R3, together with the other Rs, had disputed the entirety of A’s case. R3 had joined forces with R1 and R2 to raise all conceivable procedural challenges and issues in these proceedings. 86.Apart from the issue of dispensation of service, there was also the issue on the admissibility of the Apple Documents. Some 52 paragraphs in the Judgment were spent on dealing with this issue, which I found against all the Rs. There were also 5 general issues raised by Rs in relation to “merits”, and Mr Fong and Mr Yu adopted each other’s submissions, in so far as they related to their respective clients, most of which I found against Rs. R2 and R3 also sought to reopen the issue of delay in A prosecuting these proceedings, a matter which had already been dealt with earlier during the Stay Application. 87.The authorities on costs relied on by the parties were prior to the Civil Justice Reform. After CJR, Order 62 r 5 now sets out special matters which the court should take into account, as may be appropriate in the circumstances in considering costs. One of the special matters is the conduct of all the parties. 88.I accept that A, although legally represented throughout, had failed to comply with procedural rules in endorsing the Penal Notices on the Orders, and also failed to effect personal service on R3. However, as pointed out by Mr Poon, R3 had made no attempts to ensure or cause R2 to comply with the Orders after her knowledge of the same, not even after the letter sent by A’s solicitors on 20 August 2013 and that by doing nothing at all, she had brought these proceedings upon herself. She ought to have come to the knowledge of the consequence of non-compliance of the Orders after the institution of these proceedings in December 2014, and yet again, had done nothing until the filing of HY3-2946. Further, in her affirmation, notwithstanding this court’s findings in the Judgment, she was maintaining that R2 did not /does not have in its possession, power, custody and/or control of Items 3-4 of the Listed Items, or the Apple Documents. 89.Having considered all the circumstances of the case, and the conduct of the parties, notwithstanding R3 is the successful party, I will exercise my discretion and depart from the usual rule that costs follow the event. I am of the view that a fair order in the present case would be that there be no order as to costs of these proceedings as between R1 and R3. Conclusion 90.Accordingly, I sentence R1 to 28 days imprisonment, suspended on condition he files within 28 days from today an affirmation to purge his contempt. I order R1 to pay A’s costs of and incidental to these proceedings, jointly and severally with R2, to be taxed if not agreed on indemnity basis, with certificate for Counsel. I dismiss A’s application for leave to issue a writ of sequestration against R1. 91.I impose a fine of HK$300,000 on R2, to be paid into court within 28 days. I order R2 to pay A’s costs of and incidental to these proceedings, jointly and severally with R1, to be taxed if not agreed on indemnity basis, with certificate for counsel. A’s application for leave to issue a writ of sequestration against R2 shall be adjourned sine die with liberty to restore upon R2’s failure to pay the fine within 28 days. 92.As for costs of these proceedings between A and R3, there be no order as to costs, including all costs reserved and costs of today.
Mr Poon Siu Bunn, instructed by Benny Kong & Tsai, for the applicant Mr Raymond Fong, instructed by C W Chan & Co, for the 1st respondent Mr Tim C H Yu, instructed by Johnny K K Leung & Co, for the 2nd and 3rd respondents [1] Hong Kong Civil Procedure 2015, Vol 1, pgs 995-996 §52/9/1 [2] Abu Dhabi National Tanker Co v Lam Ming Chi [1998] 4 HKC 320 at 336E [3] GE Transportation (Shenyang) Co. Ltd. v Lu Jinxiang, unreported, HCMP 1792/2013, 22 January 2014; at p 23 para 53 [4] A O Smith Holdings (Barbados) SRL v Zhang Dacheng, unreported, HCMP 1132/2011, 1 June 2012; at p 18 para 61 [5] Excel Noble Development Ltd & Ors v Wah Nam Group Ltd & Ors [2001] 4 HKC 148; per Rogers VP at pg 162B-E [6] At pg 125 [7] Arlidge Eady & Smith on Contempt (2011) 4th Ed, para 14-5 [8] Solar System International Co Ltd v Unison Watch Manufacturing Ltd (unreported) CACV 3523/2001, unreported 7 February 2002, at para 24, pg 7 [9] Hong Kong Civil Procedure 2015, Vol 1, at p 974 §52/1/6; see also Re So Sau Chung [1966] HKLR 523 at 545-546 [10] At pg 1162H-1163A [11] At pg 1164, B-C [12] At pg 1091 [13] See para 327, pg 116 of the Judgment [14] See para 261 [15] Para 7 [16] See para 6 [17] At pg 7E-J [18] Citing the decision of Aqua-Leisure Industries Inc & Anor v Aqua Splash Ltd (No 2) [2002] 1 HKLRD 241 at p.264A-C [19] See para 266 of the Judgment [20] See para 7 of HY3-2946 [21] See para 327 of the Judgment [22] See para 342 Judgment [23] See pp 713D-714B (per Russell LJ); pp 714C, 716F-H and 718 C-F (per Sachs LJ) [24] At 718C-D [25] At pg 190 H-I [26] At pg 189H-190D [27] At pg 192E-F [28] At the last paragraph of pg 4 [29] At pg 6 §14 |
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Further hearings and rulings under HCMP 2946/2014