Axa China Region Insurance Co. Ltd. and Another v. Li Yu Ping, Ellen
Read the full judgment text of CACV 217/2002 on BabelCite. This Court of Appeal judgment was delivered on 12 June 2002 before Stock JA, Seagroatt J, Sakhrani J.
Civil contempt of court – committal for breach of mandatory injunction – delivery up of confidential client documents – insurance agent wrongfully removed client lists, proposals, white cards and application forms from former employer – ex parte injunction by Yeung J on 14 November 2000 requiring delivery up by 5pm on 16 November 2000 – defendant delivered documents only partially and after deadline – Judge Muttrie by consent on 17 November 2000 extended time to 27 November 2000 – variation order not personally served and not endorsed with penal notice – defendant failed to deliver remaining documents and made false affirmations of compliance – first issue whether variation order had to be personally served on defendant and endorsed with penal notice for subsequent committal order to be valid – held personal service of variation order required under RHC Ord 45 r7(5) but no separate penal notice required on variation where first order was properly endorsed and served personally – following Treherne v Dale and In re Seal – committal properly based on first order as varied – second issue whether Court of Appeal has power retrospectively to dispense with personal service of variation order and with penal notice requirement – held court has unfettered discretion under RHC Ord 45 r7(7) to dispense with service retrospectively, and such power extends to dispensing with penal notice – following Davy International Ltd v Tazzyman, Hill Samuel & Co Ltd v Littaur, Turner v Turner, Excel Noble Development Ltd v Wah Nam Group and Jolly v Hull – Court of Appeal has further power under s.50(3) High Court Ordinance and Ord 59 r10 to make any order that ought to have been made, including retrospectively dispensing with service – following M v P and Nicholls v Nicholls – third issue whether sentence of two months' imprisonment for civil contempt was manifestly excessive – held not excessive and if anything light given wilful proactive contempt with no remorse – defendant had lied to court, attacked credibility of witnesses, and called witnesses known to her to be false – defendant had not purged contempt and continued to use documents to solicit AXA clients months after order made – appeal against committal and against sentence dismissed – defendant to surrender to custody by noon 22 June 2002 – committal order of two months' imprisonment on each of four proven grounds, all to run concurrently, upheld – plaintiffs' costs of appeal on party and party basis, to be paid forthwith – order for costs in court below to stand
Legal issues: Whether the variation order of 17 November 2000 had to be personally served and endorsed with a penal notice for the subsequent committal order to be valid · Power of the Court of Appeal to dispense retrospectively with personal service and penal notice · Whether the sentence of two months' imprisonment for civil contempt was manifestly excessive
Outcome: Appeal against the committal order and against the sentence of two months' imprisonment dismissed; the Court of Appeal retrospectively dispensed with personal service of the variation order of 17 November 2000 and with the requirement of a penal notice, and upheld the committal order
Cites 3 cases
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CACV000217/2002 CACV 217/2002 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO. 217 OF 2002 (ON APPEAL FROM HCA 9975 OF 2000) ____________________________________
_______________________________ Coram: Hon Stock JA, Seagroatt J and Sakhrani J in Court Date of Hearing: 12 June 2002 Date of Judgment: 12 June 2002 Date of delivery of reasons: 19 June 2002 ___________________________________ REASONS FOR JUDGMENT ___________________________________ Hon Stock JA (delivering the reasons of the Court): Background 1This is an appeal against the decision of Deputy High Court Judge Longley on 17 April 2002 that the defendant was in contempt of court, and against the order which he then made that she be committed to prison for that contempt for a period of two months. 2The defendant challenges the validity of the committal order, failing success on which point, she challenges the severity of the penalty imposed. On 12 June 2002, we dismissed the appeal, and said that we would provide reasons. This we now do. 3The plaintiffs (to whom we shall also refer as 'AXA') carry on business in Hong Kong as insurers, and from 1986 engaged the defendant as an insurance agent who sold policies, mainly life insurance policies, from which she earned commission, being part of the premiums paid by clients whom she had secured. On 17 September 1999, she tendered her resignation, but her employers, believing that she had induced fellow agents to leave the company, terminated her contract, purportedly for cause, on 7 October 1999. On 2 November 1999, the defendant was engaged as an agent by another insurance company called Winterthur Swiss (Asia) Ltd ('Winterthur'). These proceedings have their root primarily in what happened after the defendant joined Winterthur, because it was AXA's case that the defendant was targeting AXA policy holders with the use of AXA documents which she had wrongfully taken when she left AXA, and was trying to induce those policy holders to surrender AXA policies and take out new ones with Winterthur. The plaintiffs had concrete evidence to that effect, in particular from a lady who was, or had been, the appellant's secretary at Winterthur. 4Accordingly, on 14 November 2000, the plaintiffs issued a writ against the defendant by which they claimed damages, or an account of profits, in respect of the defendant's wrongful taking away of, and refusal to return to the plaintiffs, client lists, proposals, white cards and application forms which, they said, belonged to them; and they claimed delivery up of all such documents in her possession, custody or control. The contract of employment with the defendant had stipulated that upon termination of her employment contract, she was required to return to the plaintiffs all papers in her possession or control which belonged to them. The orders 5On 14 November 2000, upon an ex parte application by the plaintiffs, Yeung J, as he then was, issued an injunction in the following terms:
The defendant was by the same order given liberty to apply, upon twenty four hours notice, to discharge the injunction. No such application was made. 6The order was endorsed with a penal notice as follows:
That order, thus endorsed, was personally served upon the defendant that day, that is, 14 November 2000. 7On the evening of 16 November, the defendant caused to be delivered documents to the plaintiffs' solicitors, supposedly in compliance with the order of 14 November. The fact that the delivery was a little later than 5 pm is not a point taken. However, the plaintiffs' case is that the defendant did not deliver up all the documents in her possession; a contention which was denied by the defendant, so that Judge Longley, on the plaintiffs' motion to commit, heard evidence to determine that issue. The judge found that the plaintiffs' case was made out in relation to several identified lists or groups of documents. In so far as this appeal at one stage challenged that finding, that challenge is no longer pursued. There is no doubt, therefore, that by the evening of 16 November 2000, the defendant was in breach of the order made by Yeung J. No further delivery of documents was ever made. 8What next happened, procedurally, is important to this appeal, for on 17 November 2000 a further order was made; on this occasion by Deputy High Court Judge Muttrie. 17 November was the return day provided by the order of 14 November. On that day, both the plaintiffs and the defendant appeared by counsel before Judge Muttrie; and, by consent, an order was made in the following terms:
9We are not told in terms at whose initiative that variation of time for delivery up, by which 16 November was replaced by 27 November, was proposed, but the suggestion made at this hearing, not gainsaid, was that the defendant, although asserting that she had delivered all documents in her possession, was asking for more time to make sure that there was nothing further. Whatever the precise reasoning, one can safely assume that the variation was sought by her, and for her benefit. 10Judge Muttrie's order was not served personally upon the defendant, but upon her solicitors by hand on 22 November, and the copy thus served did not have endorsed upon it a penal notice, in other words, a notice described by Ord. 45 r7(4) of the Rules of the High Court. It is upon this point that this appeal, the issue of penalty aside, turns, for it is argued that the failure to serve this second order, the order of 17 November, personally upon the defendant, and the failure to endorse it with a penal notice, rendered the court below powerless to make a valid order of committal, for which reason this Court is bound, it is said, to set that order aside. To the merits of the point we shall shortly return. The application for leave 11No further documents were delivered up by the defendant between 16 and 27 November. That the defendant knew full well of the order of 17 November is not doubted. Indeed, she filed an affirmation dated 27 November which she expressed, in its first paragraph, to be made "in compliance with paragraph 4 of the order of Judge Muttrie dated 17 November 2000". In that affirmation she said: "I confirm that I have complied with the order for delivery up by paragraph 2 of the ex parte order of Mr Justice Yeung dated 14 November 2000." 12The defendant had not complied with the order, even by 27 November. She continued in breach, as she does still to this very day, and in September 2001 a Statement was filed pursuant to Ord. 52 r2(2) of the Rules of the High Court, by which the plaintiffs sought the court's leave to apply for an order of committal of the defendant. There had been a delay since November 2000, but the plaintiffs explain that delay on the basis that in the interim they came into possession of further and cogent evidence which put to rest such reservations they had previously entertained whether they could meet the requisite standard of proof in contempt proceedings. There had, in any event, been proceedings in the meantime with the details of which we need not be concerned, save to record that on 27 December 2000, at the substantive hearing of the 14 November summons, a further order was made for delivery up, and several affirmations followed from the defendant. By September 2001, the plaintiffs had clearly had enough. 13The grounds specified in that Statement were:
14There was filed an affirmation in support of the application for leave by a Mr Hok Man Choy of the first plaintiff company, in which he drew to the attention of the court the two orders and their history, and specifically informed the court that the order of 17 November 2000 had not been served personally upon the defendant, and added that:
15The second affirmation there referred to is dated 8 December 2000, the relevant contents of which we shall later recite. 16The judge seized of the application for leave did not make an order which dispensed with personal service of the order of 17 November. It is not now disputed that he had the power to do so. We think that it must have been an oversight, which is not surprising given that the application to dispense with service was not the subject of a summons but was hidden, as it were, in the affirmation in support of leave. Leave to apply for an order of committal was granted by Yeung J by order dated 12 September 2001. The Notice of Motion 17Leave was followed by a Notice of Motion dated 20 September 2001. The contempt there alleged was the breach of, and the failure to comply with:
The hearing 18This Motion was followed by a contested hearing which lasted thirteen days before Judge Longley, spread between 4 February 2002 and 21 March 2002. 19The judge, on 17 April 2002, made his findings, which were that the defendant was in contempt of court in breaching the order by her failure to deliver those white cards and certain proposals to which our summary of the evidence, at [52] and [53] in this judgment, refers. He was aware of the order of Judge Muttrie of 17 November, and makes specific reference to the fact that the order of 14 November had been attached with a penal notice. The judge had heard evidence from a number of witnesses as well as from the defendant herself. He rejected her evidence as dishonest, made findings that she had engaged in gravely contumelious conduct after receipt of the first order, and held her to be in contempt of court by her failure to deliver up certain specified documents. The committal order 20The order for committal, dated 17 April 2002 runs in its relevant part as follows:
Challenge to the validity of the order 21There are four grounds of appeal in the Notice of Appeal. The first relates to the question whether the documents referred to in the Notice of Motion were documents which belonged to the plaintiffs. The second suggests that there was no sufficient evidence to show that the documents related to life insurance policies. Both these grounds have been abandoned. 22The third ground with which we are concerned is put as follows:
23The issue now raised before this Court was not touched upon at the hearing before Judge Longley. The judge, as we see from the very first page of his judgment, stated that the application was one for committal based upon the failure to comply with the order of Yeung J on 14 November 2000, whereby the defendant was ordered to deliver up certain documents. In the second paragraph of the judgment, he refers to the fact that "the order with penal notice attached was served on the defendant on 14 November 2000 at approximately 2.05 p.m.". No one suggested that the failure to serve the order of 17 November personally on the defendant, or to endorse it with a penal notice, was of any significance whatsoever. The fact that the point is new does not, of itself, preclude the defendant from taking it on appeal (see Eugene Mah Yau-chim v C King Lee and another [1969] HKLR 411), although whether in this case the irregularity, if it be an irregularity, has been waived by conduct - which is a different point - is a question we have been invited to consider. The Rules 24It is necessary first to rehearse those Rules of the High Court which are central to this appeal. Ord. 45 r5(1) provides that:
25Ord. 45 r7, in so far as is relevant to this appeal, states:
26Given the central importance attached to observing procedural rules along the road to seeking or securing a party's committal to prison for contempt of court, it is we think convenient to address the validity of the order made in this case, in the face of an acknowledged failure to serve personally upon the appellant the second order, and the absence of a penal notice on the copy served on the solicitors, by examining the route by which the plaintiffs say that the order for committal can properly be maintained despite that failure, and despite the absence of an order dispensing with service, pursuant to Ord. 45 r7(7). Was the second order irrelevant? 27The plaintiffs say, first, that the order breached was that of 14 November, so that the order of 17 November was, and remains, irrelevant. The argument runs that, by 5 pm on 16 November, the defendant had failed to comply with the first order. It so happens, as we have said, that documents were delivered that day after 5 pm but the plaintiffs have been content to assume, for the purposes of the proceedings, that the documents were delivered by 5 p.m. The point taken, however, is that the delivery effected on 16th, was, as the judge found, partial delivery, and the failure to deliver all the documents in the defendant's possession constituted contempt. No documents were subsequently delivered, whether in purported compliance of the first order, or of the first order as its terms had been varied by the second. In other words, the argument runs, the plaintiffs could have sought leave from a court on the morning of 17 November 2000, or at any time thereafter, to move for the defendant's committal for contempt of the order of 14 November, with no regard to the extension effected by the order of 17 November. 28We are not attracted by this argument:
29So, the question still remains: Should the variation order have been served on the defendant personally, and endorsed with a penal notice? We were satisfied that, to comply with the rules, it was necessary for the second order to be served personally. As for the penal notice, there is authority to the effect that had the second order been served personally, a penal notice would not have been required on the copy served; though it must be noted that in that case, Treherne v Dale (1884) 27 Ch D 66, both copies were personally served at the same time. Treherne is authority for the proposition that where two orders are served, the second merely extending the time limit provided by an earlier order for the doing of an act, it is unnecessary for the second order to be endorsed with a penal notice, where the first order, when served, was thus endorsed, for :
Treherne is, however, not authority for the proposition that the second order need not be served personally upon the party required to do the act. See also In re Seal [1903] 1 Ch D 87. That personal service of the second order is required follows, in our judgment, from the terms of Ord. 45 r7(5), as well as from an application of the principle which underlies the requirement of personal service of the original order, namely, that the party against whom an order has been made must, before he may be subject to penal sanction for breach of the order, be shown to know what he is required to do, or to abstain from doing, and that is assured by personal service. And it matters not whether the new obligation imposed upon a party is less or more onerous by reason of the variation; personal service of the variation is required in both instances, for since it could hardly be suggested that committal proceedings could hold good absent proof that the alleged contemnor had notice of the more onerous provision, there is no logical basis for contending that service on that party is not similarly required where a material change to the order effects a lighter obligation. Ord. 45 r7(5) requires that with a mandatory injunction there must be served a copy of an order made under Ord. 3 r5, extending the time for the doing of an act; and, it would appear, with an order made under rule 6 of Order 45, extending time, there must be served a copy of the original order. The effect of rule 7(5) was, as we have remarked, not the subject of any argument or address in this appeal, and the point, that with the second order there was not served a copy of the first, was not a point taken. Given our decision, to which we shall shortly come, to dispense with service of the second order, that failure is of no practical consequence in this case. That said, we refer to rule 7(5) because its terms, in the context of rule 7 as a whole, carry a very clear implication that the second order varying the first, must be personally served. 30In summary, therefore, we do not agree with the defendant's proposition that the order with which she was obliged to comply was that of Judge Muttrie of 17 November. The correct approach is that the order with which the defendant had to comply was that of Yeung J, as varied. But we are satisfied that Ord. 45 r7(2) required personal service of the variation order. The power to dispense with service 31It is emphasized by Mr McCoy SC for the defendant that by reason of Ord. 45 r7(2) an order is not to be enforced unless there has been a copy personally served, and has been served before the expiry of the time within which the party served is required to do the act. That is correct, as far as it goes, but that provision is expressly made subject to paragraphs (6) and (7) of the rule. 32Ord. 45 r7(6) does not apply to this case, for that rule, by which a court may, in given circumstances, commit a contemnor despite the fact that service has not been effected in accordance with the rule, is restricted to an order requiring a party to abstain from doing an act. Where those given circumstances do not exist, and where there has been a failure to serve an order which requires a person to do an act, the court may exercise its power under Ord. 45 r7(7) to dispense with service, and may do so retrospectively. So much is conceded by Mr McCoy, and the basis of his concession, properly made in our view, is the fact of, and the reasoning within, the judgment of the English Court of Appeal in Davy International Ltd v Tazzyman [1997] 1 WLR 1256. That was a decision of the Court of Appeal in England, upon a construction of Ord. 45 r7(7) of the Rules of the Supreme Court, and which was in the same terms as Ord. 45 r7(7), of the [Hong Kong] Rules of the High Court. The determination was that that paragraph of the Rule conferred upon the court a power to dispense with service of a copy of a mandatory order, not only prospectively, that is, before the time for compliance with the order had expired, but also retrospectively. In that case, there had been non-compliance with the requirements of service in that there was no penal notice, and failure to serve a copy of the order on any of the directors of the body corporate. The court rehearsed a divergence between two lines of conflicting authority, and whilst accepting that paragraphs (6) and (7) of the Rule did not sit very happily one with the other, nonetheless commented at page 1261 that:
33Mr McCoy has utilized the sentence last cited to argue that the power to dispense with service is one limited to circumstances in which it is shown that the party against whom an order has been made is evading service. That, in our judgment, is to read an analytical example as a limitation. Indeed, it is instructive to note that in one of the earlier cases under review, Hill Samuel & Co Ltd v Littaur, The Times, 13 April 1985, the argument, which was rejected, included a suggestion along similar lines. We find in Davy, at p 1264, these references to Hill Samuel:
34That the power under Order 45 r7(7) applies to mandatory as well as to prohibitory orders, and that it confers an unfettered discretion, is a proposition to be found also in Excel Noble Development Ltd v Wah Nam Group Ltd [2001] 4 HKC 148, 158. 35It is not argued in this case that this Court should disassociate itself from the reasoning in Davy. We see no basis upon which to do so, and we respectfully adopt its reasoning, and apply that decision. Dispensing with the penal notice 36The requirement to endorse a copy of the order with a penal notice is a separate requirement, imposed by rule 7(4), and is not itself, by the terms of Ord. 45 r7(2), rendered subject to the provisions of paragraphs (6) and (7). It must, however, follow that if the power to dispense with service of an order is properly exercised, the requirement under paragraph (4) falls away. In Jolly v Hull [2000] 2 FLR 69, the Court of Appeal in England, faced with a failure to endorse a possession order with a penal notice, examined the provision of Ord. 29 r1(7) of the County Courts Rules, that:
As in the case of our High Court Rules, there was within the County Court Rules no express power to dispense with a penal notice. Nonetheless:
37Accordingly, it is plain that Judge Longley was empowered to dispense retrospectively with personal service of the order of Judge Muttrie, and that such power of dispensation extended, in so far as might be necessary, to the penal notice requirement, or rendered the requirement of a penal notice otiose. This Court's powers 38The next question is whether this Court has the power to make the order which Judge Longley was not asked to, and did not make. Of that there can, we are satisfied, be no doubt. It is conferred by the terms of section 50(3) of the High Court Ordinance, Cap 4 and by Ord 59 r10. 39Section 50(3) provides that
Ord 59 r10, in so far as is relevant, provides
40The circumstances in which these powers are properly exercisable in contempt cases have been the subject of two particular reports to which we have been taken. 41M v P & Others and Butler v Butler [1993] Fam 167 concerned failures to serve committal orders in compliance with prescribed procedure. Emphasis was placed in argument:
42That judgment, as well as the second to which we shall shortly turn, evidences a sea change from an earlier assumption which had developed, that procedural flaws in contempt cases such as, though not restricted to, failure to observe rules for service of the committal order, were fatal to the validity of such orders. The key to the court's attitude to its powers in contempt cases under sections 13(1) and (3) of the Administration of Justice Act 1960, which sections 50(1) and (3) of the High Court Ordinance replicate, lies in the very terms of the section:
And then:
43We agree with the sentiment in Jolly that the power to dispense with service is one that "should not be exercised too readily, lest what should be a dispensing power for use in exceptional cases may gradually undermine the express requirements of [Ord. 45 r7(2) and (4)]", but there is no inconsistency between that approach, on the one hand, and the principles, on the other, which, according to the Master of the Rolls in M v P, are applicable to the exercise of our powers under section 50 of the High Court Ordinance. 44The point was revisited in Nicholls v Nicholls [1997] 1 WLR 314 where, again, there was a flaw in a committal order. There, too, the test for the proper application of the court's power under section 13 of the Administration of Justice Act 1960 centred upon the interests of justice, taking into account the question of any prejudice to the contemnor. Lord Woolf, then Master of the Rolls, said, at page 316, that:
He concluded, at page 325, that:
Our conclusion on the issue of service 45After hearing argument, we entertained no doubt but that the requirements of justice in the present case were best reflected by an order under Ord. 45 r7(7) dispensing with personal service upon the defendant of the order of Judge Muttrie of 17 November 2000 and, in so far as may be necessary, with the requirement to endorse on the order of 17 November a penal notice in the terms specified by Ord. 45 r7(4) and, accordingly, we make such an order. There is no conceivable prejudice or injustice to the defendant in so doing. Indeed none has been suggested. Instead, reliance has been placed upon the importance of observing the rules in cases in which the liberty of the subject is at issue, and upon the suggested limitation, to which we have earlier referred, of the circumstances in which the power under rule 7(7) is to be exercised. We do not, by our decision in this case, gainsay the importance of Ord. 45 r7(2) and 7(4) nor, for one moment, encourage laxity in observance of those requirements. That said, to allow the failure to effect personal service of the second order to render invalid the committal proceedings and the committal order would, in this case, permit the triumph of pure form and technicality over the clear interests of justice, devoid of any prejudice to the defendant. 46The defendant was served with the order of 14 November which had attached to it a penal notice, and she was fully aware of the import of that notice. The order of 17 November, in that part relevant to this appeal, was one which was, no doubt, made at the initiative of those acting for her, and with her knowledge, and with her consent. It was a variation in her favour. That she knew of it, and of the consequences of disobeying the order of 14 November, as varied, is beyond any doubt. So much is clear from her affirmation of 27 November:
One notes that it is under the umbrella of the order of 17 November that she refers there to the order of 14 November: in other words, she is aware of the impact of the order of 17 November upon the original order, and that it is the original order as varied with which she is required to comply. Then we see, from paragraph 29 of her affirmation of 8 December 2000, that:
47We note, further, that the defendant's advisers have at all material times been fully alerted to the failure to serve personally the order of 17 November, and to the fact that it was not endorsed with a penal notice. The matter was drawn to the court's attention in the leave application in an affirmation of which they had a copy. In Mr Choy's affirmation of 11 September 2001 he asserts, it will be remembered, that "there is no doubt the Defendant was fully aware of the consequences of any non-compliance"; this a clear reference to the order as varied. There was not then, nor is now, any contrary suggestion. No point was then taken, nor was it taken before Judge Longley. The case before Judge Longley was contested on its merits, the defendant asserting that she had on 16 November - that is, before the variation - delivered all relevant documents in her possession. 48We were satisfied, in coming to our conclusion, that this was an obvious case in which to dispense with personal service under rule 7(7). Waiver 49It is said by Mr Westbrook that the irregularity constituted by the failure to serve the variation order personally upon the defendant - if we find it to be an irregularity - has nonetheless been waived by the defendant. The waiver is said to be constituted by conduct, in that the defendant has at all material times known of the failure and its potential significance. It was a point specifically drawn to the attention of the judge whose leave to commence the proceedings was sought; and the instrument by which it was drawn to his attention, namely, the affirmation of Mr Choy - a copy of which was served on those acting for the defendant - specifically canvassed the question whether it was really necessary to effect such service, and even went so far as to seek dispensation from that requirement. The defendant appeared in the court below, aware of the point available to her, and yet engaged upon a lengthy contest of liability on the merits, without ever taking this point. We note, in passing, that as to service of the Notice of Motion, there was a consent order by which the court dispensed with personal service of that notice. There is no such order in relation to the order of Judge Muttrie. We do not think that the quasi-criminal nature of contempt proceedings precludes a finding of waiver by conduct of a procedural requirement (see, for example, Fabrique Ebel Societe Anonyme v MBO Far East (HK) Ltd [1985] 1 HKC 166), even one as material as the failure to serve. If the point can expressly be waived, there is nothing in logic to prevent its waiver by conduct, although, given that committal proceedings for civil contempt are quasi-criminal in nature and affect the individual's liberty, it must take a very clear case to establish waiver. There is a strong argument in this case to support the contention of waiver but, given our view on the discretion available under Ord. 45 r7(7) and the fact that the conduct suggested to constitute waiver is one of the factors which we have weighed in determining how the discretion should be exercised, and given most particularly our decision to dispense with service, it is unnecessary now to determine the issue of waiver. Penalty 50It is contended by the remaining ground that the term of two months' imprisonment imposed by Judge Longley was in all the circumstances too severe, and out of line with what is suggested to be the normal range of imprisonment for cases of contempt of court, and, further, that in the light of the psychiatric report which we have agreed to receive upon this appeal, it is now overly onerous to confirm the order; and we are invited to vary it. (1) The evidence 51The evidence that the defendant had not delivered all the papers which she was required to deliver came from two sources: Ms Pinky Cheng, who was the defendant's secretary at Winterthur, and had worked previously with AXA, and whose report to the plaintiffs in October 2000 about the defendant's conduct led the plaintiffs to institute these proceedings; and Antoine Ho who had also worked for AXA and was, between November 1999 and July 2001, a District Manager with Winterthur, reporting directly to the defendant. 52Pinky Cheng said, in her testimony, that the defendant had kept in a drawer in her office at Winterthur a set of white cards, one card printed or copied to a page. White cards were cards each of which had details of the policy holder, and a summary of the policy pertaining to that client. Copies of these cards, when made, were copied three to a page, but the one-white-card-per-page copies had been made by cutting A4 size sheets into three. The point is that no one-card-per-page copies were delivered to the plaintiffs after the order of 14 November. The defendant's case was that such copies did not exist. The judge believed Ms Cheng, and held the defendant to be in breach of the order by not delivering these documents. 53Ms Cheng also gave evidence about proposals kept by the defendant. Proposals, in the context of this case, were illustrations prepared by AXA for the benefit of clients, which provided to a client details of the benefits which he or she might expect upon payment of a certain premium. She said that there had been two very full box files of proposals in the defendant's office. The defendant's case was that all proposals had been delivered to the plaintiffs' solicitors on 16 November. Again, the judge accepted the evidence of Ms Cheng and found that one of two existing box files of proposals in the hands of the defendant had not been delivered. 54The evidence of Antoine Ho was significant, and puts the nature of the contempt in this case in special focus. He said that after service of the order of 14 November, the defendant arranged to meet him the next day, that is, 15 November, and did so; and there she expressed concern about handing over everything lest it revealed quite how extensive had been her removal of documents from AXA. Later that day, she gave to him about twenty photocopied pages of AXA pink cards (which were to the same purpose as white cards), but on which there appeared three cards per page. She asked him to photocopy them for her, which he did. These copies were not given to the plaintiffs' solicitors on 16 November or, indeed, at all. The defendant's case was that the evidence of Mr Ho was untrue. She said that no such copies were ever sought by her. The judge accepted the evidence of Mr Ho. 55The final group of documents in respect of which the judge found breach of the order for delivery up was a set of three proposals. Ho's evidence was that in February 2001, that is months after the November orders, the defendant had given him three AXA proposals as an aid for him to persuade AXA clients to switch to Winterthur. The defendant's case was that she did not give Ho such documents. The evidence of Mr Ho in this regard was accepted by the judge. 56In his judgment, the judge expressed his conclusion that the evidence of the defendant had been "thoroughly evasive and untrustworthy". He also found that the defendant had obtained AXA proposals after she had left AXA, in order to make unfavourable comparisons with Winterthur policies. 57The judge heard testimony from others, including witnesses called on the defendant's behalf, with whom the judge was less than impressed, and he found that they had been prevailed upon by the defendant to give less than frank evidence. (2) Analysis 58In so far as there was a suggestion that there is a normal range of sentence of between two weeks to one month for contempt of court, there is no warrant for that contention. Cases of contempt will vary enormously in their type and facts, and there is little mileage to be gained from the citation of other cases, and certainly not from the case from which the suggested tariff or range was drawn. 59The judge took a serious view of the contempt. He noted that the defendant had, from an early date, shown concern to frustrate the plaintiffs' purpose in seeking to recover documents that were theirs, by which no doubt he had in mind not only the defendant's conduct since the making of the court order but attempts by the plaintiffs after the defendant left the company to secure documents which she had removed. He noted that the defendant had retained the documents most useful to her, so that there was little weight to be attached to the suggestion that she had complied in large part with the order. He noted most particularly that she had displayed no remorse at all for her breach of the order. She had lied to the court, attacked the credibility and character of the two main witnesses, and called witnesses whose evidence she knew to be false. 60This was indeed a very serious contempt. This was a case of wilful and proactive contempt, aggravated by the fact that within a day of the order of 14 November the contemnor was working out how best she could go about breaching the court order and, as the judge found, asked one of her work colleagues, indeed a subordinate, to make copies of documents for her retention, documents which she had been ordered to deliver up. As late as February 2001, after she had made affirmations that she had complied with the order as amended, she was handing out proposals to Mr Ho persuading him to use them to attract clients from the plaintiffs. This defendant, in her breaches of the court order, was behaving with calculated dishonesty of the most serious kind. 61Demonstrably inherent in this conduct is a total lack of remorse. It is clear to us that she feels none, and feels that she is entitled to thwart orders of this court. We note also that she has to this day not purged her contempt. There has still been no attempt to deliver up the documents which the judge found she had not delivered up, nor any attempt to state what has become of them. She fought this case, called lying witnesses in her support, and she herself provided palpably false testimony. 62The skeleton argument we have before us dated 3 June 2002 states that the defendant "absolutely and unreservedly apologizes for her conduct". This is a false apology. It is a device deployed by the defendant, intended to avoid imprisonment in the event that all else fails. That is self-evident from the history of the case; but if one needed confirmation of it, it comes from a report, which she has asked us to see, from a psychiatrist who speaks of her distress and depression, which he classifies as a major depressive disorder. She first went to see this psychiatrist on 22 May 2002, three weeks after she was granted bail pending this appeal; at a time when the date of this hearing had been fixed; and more than eighteen months after she was knowingly first in contempt. This is what the report reveals on the question of her remorse or, rather, lack of it:
That description of her recent attitude accords with her attitude throughout these prolonged proceedings. 63We are unimpressed with the psychiatric report in its hoped-for impact on this appeal. If indeed the defendant is depressed then, whilst of course that is not a matter for any satisfaction, it is a matter which she has brought upon herself and which she chose to have attended less than a month ago. She is on medication, and there is mention in the report of 'transient suicidal ideation'. We have made clear our wish that this report be drawn to the attention of the prison authorities, so that they can take whatever steps are considered fit for her medication, for her depression, and for her protection. An undertaking has been given to us by those acting for the defendant to deliver to those authorities a copy of that report. 64Against the picture which we have painted of the extent and nature of her contempt we are of the view that the penalty imposed was, if anything, light. The defendant should consider herself fortunate that her behaviour and her conduct of the proceedings have not, thus far, resulted in proceedings of a more severe kind. 65There is no merit whatsoever in the complaint against the penalty imposed by Judge Longley. Conclusion 66It follows that the appeal against the order of Judge Longley committing the defendant to prison for contempt of court for two months is dismissed. On 12 June 2002 we ordered the defendant to surrender to custody, no later than noon 22 June 2002, to the Court of First Instance in order to serve that term of imprisonment. 67We have already heard certain submissions as to costs, but will hear counsel further should they wish to address us in the light of these reasons. [Further submissions as to costs] 68It is contended by the plaintiffs that costs of the appeal be awarded to the plaintiffs on an indemnity basis. Our attention has been invited to the fact that the judge in the court below ordered the defendant to pay 85% of the plaintiffs costs, the percentage to reflect a degree of success in resisting some of the charges of contempt, and to pay those costs on an indemnity basis. 69For the defendant, it is said that there should be no order as to costs since the plaintiffs have, it is argued, been forced to come to this Court to seek an indulgence, by which is meant the dispensation from compliance with the requirement as to personal service of the second order. With this latter contention we do not agree. This is an appeal which has been demonstrated to be without merit. The main point which has been argued is a point which had been drawn to the court's attention at the leave stage, and which the defendant could at any stage thereafter have pursued, but she chose below to fight the case on the merits, has left the service issue to this last stage, and has not succeeded. Costs should, in the circumstances, follow the event. 70We have concluded that the appropriate order is that the plaintiffs' costs of, and occasioned by, this appeal be paid by the defendant, to be taxed on a party and party basis, and to be paid forthwith. This is the decision of the Court, and is the order we will make. The order for costs in the court below will stand.
Representation: Mr Simon Westbrook, SC leading Mr Stewart K M Wong instructed by Messrs Herbert Smith for the Plaintiffs/Respondents Mr Gerard McCoy, SC leading Ms Kennis Tai instructed by Messrs Michael Cheuk, Wong & Kee for the Defendant/Appellant ( 12 June 2002) Mr Gary Plowman, SC leading Ms Kennis Tai instructed by Messrs Michael Cheuk, Wong & Kee for the Defendant/Appellant ( 19 June 2002) |
Cases cited in this judgment
Further hearings and rulings under CACV 217/2002