La v. Twk
Read the full judgment text of FCMC 15040/2012 on BabelCite. This Family Court judgment was delivered on 9 June 2014 before Deputy District Judge S.G. Chan.
Matrimonial causes – Committal proceedings – Penal notice – Service of order – Solicitors – Contempt – Whether penal notice can be added post-sealing – Whether personal service required for discovery orders – Application to set aside leave dismissed – Costs in cause – The Court considered whether a penal notice could be added to an order after sealing and whether service on solicitors was sufficient for discovery orders. The Court held that the Petitioner was entitled to add the penal notice as there was no evidence of prejudice and the issue was already considered when Leave was granted. The Court further held that service on the Respondent's solicitors was sufficient notice under Order 24 rule 16(3) and Order 26 rule 6(3) of RDC as the solicitors had explained the Order and penal notice to the Respondent. The Respondent's application to set aside the leave to issue committal proceedings was dismissed. Costs were ordered to be in the cause of the committal proceedings proper, with certificate for Counsel.
Legal issues: Penal Notice Addition · Service on Solicitors
Outcome: Respondent’s application to set aside the leave granted to the Petitioner on 29 October 2013 to issue committal proceedings against the Respondent by way of summons taken out on 31 December 2013 is dismissed.
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FCMC 15040 / 2012 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NUMBER 15040 OF 2012 ----------------------------
----------------------------------------- RULING (Application to Set Aside Leave to ----------------------------------------- Introduction 1.This is an application by the Respondent to set aside the leave to issue committal proceedings against him, which was granted to the Petitioner on 29 October 2013 (“the Leave”); and to dismiss the Petitioner’s summons filed on 1 November 2013 to commit the Respondent to prison for contempt of Court (“the Petitioner’s Summons”). 2.Pursuant to the order made by Deputy District Judge Grace Chan on 30 April 2013 (“the Order”), it was ordered inter-alia, that the Respondent do file and serve his 2nd Supplemental Answer to the Petitioner’s Questionnaire and Request for Particulars and Documents filed on 4 February 2013 (“2nd Supplemental Answer”) in accordance with the Schedule attached to the Order on or before 28 May 2013. 3.The Respondent filed and served his 2nd Supplemental Answer on 27 June 2013 and denied that he was in breach of the Order since he did provide the information as requested by the Petitioner save and except those to which the Respondent believes that the Petitioner is not entitled to. 4.The Order dated 30 April 2013 initially sealed on 9 May 2013 did not contain any penal notice. However, a penal notice was subsequently endorsed on the back sheet of the Order and resealed on 15 August 2013. 5.In gist, the Petitioner obtained the Leave by way of an ex-parte application to issue committal proceedings against the Respondent for the Respondent’s alleged failure and/or refusal to comply with the Order. Thereafter, the Petitioner issued an inter-partes summons to commit the Respondent to prison for contempt of Court. 6.The Respondent challenges the propriety of the Leave granted to the Petitioner based on two grounds only, namely i) a penal notice cannot be added to a copy of the Order served under Order 45 rule 7(4) of the Rules of District Court; and ii) the sealed copy of the Order with penal notice subsequently added, was served on the Respondent’s solicitors only and not served on the Respondent personally. 7.Consequently, the Respondent took out an Inter-Partes Summons on 31 December 2013 to set aside the Leave and to dismiss the Petitioner’s Summons with costs returnable on 10 January 2014. On 10 January 2014, the Respondent’s Summons was adjourned for argument before me on 4 April 2014 with 2 hours reserved. The main issues
8.Counsel for the Respondent confirmed at the hearing that the Respondent will not raise any argument that the Petitioner did not make full and frank disclosure when applying for the Leave on an ex-parte basis and will only rely on the two grounds set out in paragraph 6 above in his application to set aside the Leave. 9.It is common ground that in the event that the Leave is set aside, it follows that the Petitioner’s Summons should also be dismissed. On the other hand, if the Respondent’s application to set aside the Leave fails, the Respondent is still entitled to challenge the merits of the Petitioner’s Summons at the committal hearing proper. Background and Chronology of Events 10.The parties married in Hong Kong on 20 June 1967. The Petitioner is now aged 77 and the Respondent is now aged 71. 11.On 11 October 2012, the Petitioner filed her Petition for divorce on the ground of 2 years’ separation with the separation date being sometime around December 2008. Subsequently, on 26 September 2013, the Petitioner filed another Petition based on the ground of 1 year separation and the Respondent’s consent, with the separation date being 16 September 2012 under FCMC 13762 of 2013. 12.No Decree Nisi has yet been granted. The Petitioner seeks ancillary relief from the Respondent and the parties have filed and exchanged their respective Financial Statements and have also served Questionnaire and Request for Particulars and documents on each other. 13.On 26 April 2013, the Respondent took out an Inter-Partes Summons for discovery returnable on 30 April 2013 and on 29 April 2013 the Petitioner took out an Inter-Partes Summons for discovery. 14.Pursuant to the Order dated 30 April 2013, the Respondent was required to file and serve his 2nd Supplemental Answer to the Petitioner’s Questionnaire and Request for Particulars and Documents filed on 4 February 2013 in accordance with the schedule attached therein within 28 days. 15.On 27 June 2013, the Respondent filed and served his 2nd Supplemental Answer which can be found at page 47 of the Respondent’s Bundle. However, the Petitioner argued the said answer filed by the Respondent was in breach of the Order since the Respondent’s “so called” answer was in effect a blanket expression that “the Respondent is not obliged to provide particulars of transaction which was prior to 3 years before the date of the Petition”. [RB: 47] 16.There are correspondences between the respective parties’ solicitors between 4 July and 25 July 2013 regarding whether or not the Respondent has been in breach of the Order. 17.On 4 July 2013, the Petitioner’s solicitors wrote to the Respondent’s solicitors complaining that the Respondent’s answer does not comply with the format set out in the Schedule to the Order and that the Respondent is obliged to disclose particulars of all transactions set out in the Schedule as agreed. 18.The Petitioner’s solicitors warned that the Respondent’s failure or refusal to comply with the said Order constitutes contempt of Court and reserved the right to commence committal proceedings under Order 52 if the Respondent continued to refuse to furnish the particulars required under the Order. [RB:193] 19.On 13 July 2013, the Respondent’s solicitors wrote back and said that the Respondent only agreed to provide his supplemental answer to the Petitioner’s questionnaire and there is no requirement in the Order that the Respondent has to comply with the format set out in the Schedule to the Order. 20.The Respondent’s solicitors also complained that the Petitioner’s summons for discovery was not served until the very last moment before the hearing on 30th April 2013 whereby the Respondent and his legal representatives were ‘caught by surprise’ and deprived of ample time to go through the details and it was for the sole purpose of cost saving that they agreed to provide the answers to the requests. [RB:194] 21.On 23 July 2013, the Petitioner’s solicitors wrote to the Respondent’s solicitors stating that they take great exception to the Respondent’s contention that there is no requirement or provision in the Order requiring the Respondent to file an answer in accordance with the Schedule as attached. [RB:3 & 196] 22.On 25 July 2013, the Respondent’s solicitors wrote back to the Petitioner’s solicitors to say that their allegation is misconceived. The Respondent argued that the Order only required the Respondent to provide answers (not particulars) in accordance with Schedule. [RB:197] 23.On 17 August 2013, a sealed order (with penal notice endorsed on the backsheet of the Order) was served on the Respondent’s solicitors. 24.On 21 August 2013, the Petitioner filed her 3rd Affirmation in support of her application for leave to issue committal proceedings against the Respondent together with the Statement pursuant to Order 52 rule 2(2) of Rules of District Court (“O.52 Statement”). 25.On 7 October 2013, Deputy District Judge Grace Chan noted that the Court had not endorsed a penal notice in the original order made on 30 April 2013 but the penal notice was subsequently added onto the back sheet and resealed on 15 August 2013. 26.On 22 October 2013, the Petitioner wrote to the Court and submitted that under Order 52 rule 2 paragraph 8 of the Hong Kong Civil Procedure (“HKCP”) 2013, a penal notice may be added after the order alleged to have been breached was sealed: Anglo-Eastern Trust & Another v Kermanshahchi [The Times, November 8, 2002, para.52/2/8 HKCP 2014]. 27.On 29 October 2013, the Court noted the contents of the said letter of 22 October 2013 from the Petitioner’s solicitors and granted leave to the Petitioner to issue committal proceedings against the Respondent on an ex-parte basis (“the Leave”). 28.On 1 November 2013, the Petitioner took out an Inter-Partes Summons for Committal against the Respondent for contempt in failing and/or refusing to obey and abide the Order, returnable on 17 December 2013 (“the Petitioner’s Summons”). 29.On 15 November 2013, the said Summons for Committal together with the Petitioner’s 3rd Affirmation and Order 52 Statement was personally served on the Respondent. 30.On 17 December 2013, the Petitioner’s summons for Committal was heard and adjourned to 10 January 2014. 31.On 31 December 2013, the Respondent took out a summons returnable on 10 January 2014 to set aside the leave to issue committal proceedings against the Respondent and dismiss the Petitioner’s Summons for committal with costs. 32.On 10 January 2014, the Respondent’s summons was adjourned to 4 April 2014 for argument. 33.On 3 April 2014, the Respondent’s solicitors wrote to the Petitioner’s solicitors reiterating their stance that the Petitioner is not entitled to particulars and documents outside 3 years from the date of her first Petition, but even if she succeeds in proving that she is so entitled, the Petitioner has failed to strictly comply with the requirement for contempt proceedings prescribed in Order 45 rule 7 of Rules of District Court (“RDC”) by failing to obtain leave for dispensing with personal service. 34.Purely to save costs and time, the Respondent’s solicitors proposed to the Petitioner that a) the Respondent shall provide answers to the request items which were outside the 3 years from the date of the first Petition within 21 days from the consent order to be made herein; and b) the Petitioner’s committal proceedings should be withdrawn forthwith with no order as to costs. 35.The Court was informed at the beginning of the hearing that no agreement has been reached between the parties and therefore proceeded with the hearing the respective submissions in respect of the Respondent’s summons. The Law 36.It is not disputed that the procedures for committal proceedings are set out under Order 52 Rules of the District Court, Cap. 336H (“RDC”) and the procedures for enforcement of Judgments and orders are set out under Order 45 of RDC. 37.Order 45 rule 5 provides that an order requiring a person to do an act within a time specified in the order may be enforced by an order of a committal against that person. 38.Order 45 rule 7 (2) and (4) (a) provides that:-
39.Order 24 rule 16(1), (2), (3) and (4) of RDC provides that:-
40.Order 26 rule 6 (1), (2), (3) and (4) of RDC provides that:-
Discussion and analysis 41.It is well established that the purpose of the law of contempt is to prevent interference with the due administration of justice. The purpose is not to protect the dignity of judges and in civil contempts and the prime consideration is to demonstrate to litigants that orders of the court are to be obeyed and complied with. 42.Bearing in mind that this is the Respondent’s application to set aside the Leave granted to the Petitioner to issue committal proceedings against the Respondent based on two grounds only, namely:-
I will now deal with the 1st issue of whether or not a penal notice can be added to a copy of the order. 43.Counsel for the Respondent argued that there is nothing in Order 45 rule 7(4) of the RDC expressly suggesting that a penal notice can be added to a copy of the order served under the rule. He further submitted that he has doubts on whether the court should rely on the case of Anglo-Eastern Trust Ltd & Anor v Kermanshahchi since in that judgement, Mr. Justice Park offered no explanation or analysis as to why he held the view that the words in Order 45 rule 7(4) of the Rules of the Supreme Court, “seemed” to suggest that the penal notice was not a part of the order itself, but might be added to a copy of the order served under the rule. 44.Counsel for the Petitioner on the other hand argued that it is not appropriate for the Respondent’s Counsel to simply doubt the reliability of Anglo-Eastern Trust Ltd & Anor v Kermanshahchi, at this stage in the absence of alternative case law to the contrary. 45.It is noted that in granting the Leave to the Petitioner to issue committal proceedings on 29 October 2013, Deputy District Judge Grace Chan had noted the Petitioner’s solicitor’s submission on the relevance of the case of Anglo-Eastern Trust Ltd & Anor v Kermanshahchi, and must have been satisfied that a penal notice can be added to a copy of the Order subsequently without endorsement of the Court. 46.Having regard to all the circumstances, I am of the view that the Petitioner was entitled to add the penal notice to the Order after it was sealed because there is no evidence that the Respondent has suffered any prejudice or injustice as a result thereof and this matter was already considered and dealt with by the Judge in granting the Leave. 47.I now turn to the 2nd issue of whether personal service of the Order (with penal notice added on) is necessary or whether service on the solicitors for the Respondent is sufficient. 48.Counsel for the Respondent argued that there was no personal service of the Order (with the penal notice added on), and the Court did not make any express order to dispense with personal service of the same on the Respondent. 49.Although the Court has discretion to dispense with the requirement of personal service, the power should be exercised sparingly. [Order para.52/2/9 HKCP 2014] 50.Counsel for the Respondent referred to the case Citybase Property Management Ltd. v Kam Kyun Tak (No.1) [2003] 2 HKC 98 at 102, wherein Ma J emphasized that it is essential for the alleged contemnor to be told of the consequences of breaching any order even where Order 45 rule 7(6) otherwise applies to excuse the service of the order endorsed with a penal notice. 51.Counsel for the Respondent further submitted that committal is a matter of “very last resort” in family proceedings and referred to Thomson v Thomson [1985] FLR 214 CA, Bush J made the following general observation:-
52.At the hearing, Counsel for the Respondent confirmed that the Respondent and/or his legal representatives were present when the Order was made on 30 April 2013 and the Order with penal notice added on was served on the Respondent’s solicitors. The Respondent’s solicitors have explained the contents of the Order including the Penal Notice and the consequences of breach to the Respondent. 53.The Respondent’s main contention is that there has been no breach of the Order, since he has already filed his 2nd Supplemental Answer on 27 June 2013 albeit not to the satisfaction of the Petitioner, there is no question that the Respondent did not know the contents of the Order or the facts which are said to make his act a contempt of the Court, or that he required further time to comply with the Order. 54.Counsel for the Respondent referred to the judgment of LPK v HSH [FCMP 237/2011] paragraphs 37-40 whereby Deputy District Judge Own ruled that “the absence of reference to personal service or any valid reasons why such reference is not required constituted a fundamental flaw in the Plaintiff’s Statement which renders it defective” and argued that in the present case, since the Order 52 Statement also contained no reference to personal service of the order or any reason why it was not so served, it is fundamentally defective and leave to issue committal proceedings should be set aside. 55.Counsel for the Petitioner on the other hand, argued that in cases where there is an alleged failure to comply with an order for discovery or to answer interrogatories, personal service of the order is not necessary. Order 24 rule16 and Order 26 rule 6 of RDC provides that service on the solicitors of the party cited is sufficient service to found an application for committal, unless the party shows that he had no notice or knowledge of the Order. [para.52/2/8(e) HKCP 2014] 56.In response to Respondent’s argument that the Leave should be set aside since the Order 52 Statement filed by the Petitioner was fundamentally defective because there was no reference to personal service of the order or any reason why it was not so served, Counsel for the Petitioner argued that this present case should be distinguished from the case of LPK v HSH since the alleged breach in that case was a restraint order, as opposed to the present case where the alleged breach is in respect of a failure to comply with an order for discovery, in which personal service of the order is not necessary pursuant to Order 24 rule 16(3) of RDC. 57.In any event, it is the Petitioner’s case is that (a) the Respondent knew that facts which are said to make his act or commission a contempt; and (b) that such act or omission was not accidental. Further, the Respondent was not in any way prejudiced by the Order being served on his solicitors and not on him personally, particularly when Counsel for the Respondent confirmed that the solicitors for the Respondent had informed him of the contents of the Order including the penal notice. 58.Having regard to the relevant legislation and all the circumstances, I agree with the submission made by Counsel for the Petitioner and conclude that personal service of the Order (with penal notice added) on the Respondent’s solicitors is sufficient notice, since it falls within the exception of Order 45 of RDC. 59.Although I accept that incomplete answers do not necessarily equate to contempt, I am mindful that the threshold for granting leave to the Petitioner to issue the contempt proceedings Respondents is much lower than proving beyond reasonable doubt that the Respondent is indeed in contempt. However, this is a matter to be determined at the committal hearing proper. The Respondent is fully entitled to raise arguments on the merits at the contempt proceedings proper, if the matter is not settled before the substantive hearing. Other matters 60.I note that the penal notice subsequently added to the Order was placed on the backsheet of the Order, which may be a practise adopted by some firms of solicitors in Hong Kong. Although this is not an issue brought up by the parties at the hearing, it has come to my attention that according to the Family Court Practice issued by the Law Society of Hong Kong (Law Society Circular No.12-906 revised November 2012), Part XI: Indorsement of Penal Notices on Court Orders, the indorsement must be placed on the FRONT of the order and not on the back sheet. 61.Hence for future reference, it is good practice for solicitors’ firms in Hong Kong to follow the Family Court Practice to place the penal notice on the front of the order and not on the backsheet. 62.There is no legal requirement under the RDC that the penal notice must appear “on the front of the order”. The general proposition that the penal notice must appear “on the front of the order” rather than at the back appears in the commentary section at para.45/7/6 of HKCP 2014 which reads:-
63.Thus, the fact that the penal notice was endorsed on the back sheet of the Order is not fatal and was not challenged by the Respondent in his application. 64.However, even if the Respondent had challenged that the Leave ought to be set aside for this reason, I am of the view that the challenge would most likely fail, since the purpose of placing a penal notice prominently on the order is to ensure that the party on whom the order is served had notice or clear knowledge of the terms of the penal notice and in this case, the Respondent’s solicitors have clearly explained the terms of the Order and the penal notice and the consequences and therefore the Respondent would not have sustained any prejudice as a result of the penal notice not being located on the front page of the Order. 65.Lastly, Counsel for the Respondent also invited the Court to look at the merits in the Petitioner’s application and argued that it is for the Petitioner to show that disclosure beyond 3 years from the date of the Petition would be necessary and relevant. 66.Counsel for the Respondent further submitted that he has in fact complied with the Order and filed and served his 2nd Supplemental Answer to the Petitioner’s Questionnaire and Request for Particulars and Documents (albeit not to the satisfaction of the Petitioner) and therefore committal proceedings should not have been issued in the first place since there are other means like issuance of Questionnaires for Further and Better Particulars to the said 2nd Supplemental Answer, order for specific discovery etc. if the Petitioner was not satisfied with the Respondent’s answer. 67.The Petitioner does not dispute that in family proceedings, committal is a matter of “very last resort”. Counsel for the Petitioner submitted more than once at the hearing, that it is not the Petitioner’s wish that the Respondent be sent to jail for contempt. She is merely requesting the Respondent to comply with the Order. 68.Counsel for the Petitioner further submitted that the Respondent’s 2nd Supplemental Answer to most if not all of the request, to provide particulars of the payer/source and reason for the deposit/credits/transfers-in in respect of bank account transactions dated back to 2008, ie. “the Respondent is not obliged to provide particulars of transaction which was prior to 3 years before the date of the Petition” is in effect a blanket expression in contempt of court for breach of the Order. 69.Counsel for the Petitioner also referred the Court to some of the 2008 bank statements produced by the Respondent in his answer, which is in respect of a totally different bank account as requested. For example, the Petitioner requested for copies of bank passbook/statements in respect of Nanyang Commercial Bank Account no. 295-2-912-489 (as stated in paragraph 2.3 of the Respondent’s Form E at p.7) and the Respondent’s answer referred to an exhibit TWK-7 which contained copies of bank passbooks/statements in respect of account no.043-474-1-039415-3. 70.Having regard to all the circumstances and bearing in mind that this is the Respondent’s application to set aside the Leave to issue committal proceedings, I am of the view that the merits should be determined at the committal hearing proper at which stage the parties will be fully entitled to raise arguments on merits, if the matter is not settled before then. Conclusion 71.To conclude, it is not disputed that i) the Order dated 30 April 2013 initially did not contain any penal notice and a penal notice was subsequently added on; and ii) the said Order (with penal notice added) was resealed on 15 August 2013 and served on the Respondent’s solicitors. 72.I have considered the arguments from both Counsels regarding whether Anglo-Eastern Trust Ltd & Anor v Kermanshahchi should be relied on and for reasons stated above, I am of the view that the Petitioner was entitled to add the penal notice to the Order after it was sealed. Since the issue was already considered and properly dealt with when the Leave was granted, the reliability of the said case is no longer a live issue. 73.The requirement of personal service under Order 45 rule 5 is subject to Order 24 rule 16(3) and Order 26 rule 6(3). The alleged breach in this case is in respect of an order for the Respondent to file and serve his 2nd supplemental Answer to the Petitioner’s Questionnaire and Request for Particulars and Documents which is in effect a combination of an order for discovery, answer to interrogatories and to produce documents. 74.Hence, Order 24 rule 16(3) and Order 26 rule 6(3) of RDC is applicable herein and clearly states that service on a party’s solicitor of an order for discovery or production of documents made against that party shall be sufficient service to found an application for committal of the party disobeying the order but the party may show in answer to the application that he had no notice or knowledge of the order. 75.There is no evidence that the Respondent had alleged that he had no notice or knowledge of the Order in this case, nor is there evidence that the Respondent had not been told of the consequences of breaching the Order. The Respondent’s case is that the Court should look into the merits of the case, since there was no breach of the Order. 76.Order 24 rule 16 (4) of RDC provides that a solicitor on whom such an order made against his client is served and who fails without reasonable excuse to give notice thereof to his client shall be liable to committal. The Respondent’s Counsel confirmed at the hearing that the Respondent’s solicitors have duly explained the Order to the Respondent including the penal notice and the consequences of the same. 77.Having considered the relevant provisions under Order 45 of the RDC and for reasons stated above, I have come to the conclusion that service of the Order (with penal notice added) on the Respondent’s solicitors is sufficient service to found an application for committal, since it falls within the exception to Order 45 of the RDC. 78.I agree with Counsel for the Petitioner that this case can be distinguished from the case of LKP v HSH which related inter-alia, to a restraint order made against a party where personal service is necessary unless it is properly dispensed with; as opposed to this case where the alleged breach is in effect a combination of an order for discovery, answer to interrogatories and to produce documents to which Order 24 rule 16(3) and Order 26 rule 6(3) of RDC is applicable. Furthermore, the case of LPK v HSH was a trial proper of the committal proceedings whereas this present application is to set aside the Leave granted to issue committal proceedings. 79.However, it must be emphasized that the well established principle in the law of contempt is to prevent interference with the due administration of justice and the prime consideration is to demonstrate to litigants that orders of the court are to be obeyed and complied with, irrespective of whether a penal notice has been endorsed. The general legal requirement under Order 45 rule 7 of the RDC is that personal service of an Order with penal notice attached is a pre-requisite before contempt proceedings can be issued, and Order 24 rule 16(3) and Order 16 rule 6(3) are exceptions to the rule. 80.My order is thus:-
Costs 81.The general principle is that costs should follow the event. However, I am of the view that this is an appropriate case to depart from the general principle. 82.It is not disputed that committal proceedings in family court should be the very last resort. Counsel for the Petitioner submitted at the hearing that it is not the Petitioner’s intention to commit the Respondent to prison and she merely wants him to comply with an order for discovery or to answer interrogatories. However, this appears inconsistent with her decision to take out committal proceedings at this early stage when there are other avenues open to her to seek compliance from the Respondent on the alleged breach. The hearing for ancillary relief has not yet been set down for the Financial Dispute Resolution hearing or Pre-trial review and matters could have been dealt with differently. 83.Having considered all the circumstances in this case, I consider it appropriate to exercise my discretion and make an order that costs be in the cause of the committal proceedings proper, with certificate for Counsel. This is a costs order nisi which will be made absolute within 14 days unless there is an application to vary the same.
Petitioner : Mr. Lawrence Hui, Counsel instructed by Messrs. Lo & Lo Respondent : Mr. Enzo Chow, Counsel instructed by Messrs. Tang Tso & Lau | ||||||||||||||||||||||