Kot See for v. Tang Kwok Pang

HCMP 832/2019

[2019] HKCFI 3001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 832 OF 2019

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DECISION

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1.This is the substantive hearing of the applicant (“Kot”)’s application by the originating summons dated 6 June 2019 (“the OS”) for, inter alia, an order of committal against the Respondent (“Tang”), who is the 2^nd defendant in HCA 743/2019 (“the Action”). According to Kot, Tang is in contempt of court in acting in breach of §§2 - 4 of the order made by this court in the Action on 3 May 2019 (“the 3 May Order”).

2.In late November 2019, Tang made an application by a summons dated 25 November 2019 (“the Adjournment Summons”) for adjourning the substantive hearing of the OS until the determination of Tang’s appeal in CACV 536/2019 (“the Appeal”).

3.On 28 November 2019, after hearing submissions from the parties, I directed to hear the substantive arguments concerning both the Adjournment Summons and the OS today.  Accordingly, in this hearing, I would first determine whether I should allow Tang’s application for an adjournment. If the adjournment is refused, I would then determine the OS.

The Facts

4.I would first set out the background facts.

5.On 3 May 2019, at the hearing of Kot’s summons for preservation and disclosure orders in relation to certain antiques (“the Subject Antiques”), I made the 3 May Order.  §§2 - 4 of that order require Tang to do the following:

(1)  By noon on 10 May 2019, disclose to Kot by affirmation or affidavit the information concerning the Subject Antiques, including the location at which the Subject Antiques are being kept and the Subject Antiques are in whose possession;

(2)  By noon on 10 May 2019, deliver the Subject Antiques to the storage company named by Kot; and

(3)  By noon on 8 May 2019, notify Kot in writing the date and the time of the delivery.

6.§§2 - 4 of the 3 May Order have not been complied with by Tang.  It is not disputed that at all material times since 3 May 2019, Tang has had notice of the 3 May Order and its meaning and the consequences of breach as stated in the penal notice in the 3 May Order.

7.On 14 May 2019 (ie after the stipulated deadlines for compliance in the 3 May Order), Tang took out a summons for an order to discharge the 3 May Order (“the Discharge Application”).  Tang filed evidence claiming that the 3 May Order had infringed his privilege against self-incrimination (“PSI”).  Without consulting Kot, Tang fixed the hearing of the Discharge Application in November 2019.

8.On 9 July 2019, Tang took out an ex parte (on notice) application for an interim stay of §§2 - 4 of the 3 May Order pending the determination of the Discharge Application.  I dismissed that ex parte application on the ground that the application was an abuse of the process of the court.  I also told Tang that any application for an interim stay must be made inter partes.  After that hearing, Tang requested for an early hearing date for his interim stay application.  On 15 July 2019, I directed to bring forward the Discharge Application and to hear that application on 24 July 2019.

9.On 24 July 2019, after hearing submissions from the parties, I dismissed the Discharge Application.  I continued the 3 May Order until the conclusion of the trial or a further order made by the court in the Action, upon a further undertaking provided by Kot, ie that Kot (including his nominees, agents or servants or any of them) would not divulge any information disclosed by Tang in compliance with the 3 May Order to the police or the Department of Justice or any law enforcement authority.

10.Subsequently, Tang sought leave to appeal from my decision made on 24 July 2019.  On 27 September 2019, I refused to give leave to Tang.  On 10 October 2019, Tang sought leave to appeal from the Court of Appeal.  On 21 November 2019, the Court of Appeal granted leave to Tang and stayed §§2 - 4 of the 3 May Order. Thereafter, Tang lodged the Appeal pursuant to the leave given by the Court of Appeal.

Discussion

11.Mr Victor Dawes SC (leading Ms Sara Tong and Ms Esther Mak) for Kot submits that the outcome of the Appeal may only affect the penalty issue and costs but would not have any impact on the liability issue in the contempt proceedings.  Throughout the period from 3 May 2019 to 21 November 2019, the 3 May Order remained valid and operative.  No step was taken by Tang to comply with §§2 - 4 of the 3 May Order during this period.  It is trite that an order once made must be obeyed unless and until it is set aside.  The Appeal itself would not afford Tang any defence in relation to liability in these contempt proceedings.  In these circumstances, there is no reason to grant the application made by Tang in the Adjournment Summons.

12.Mr Ambrose Ho SC (leading Mr Jeff Chan) for Tang submits that as a matter of case management, it would be desirable to adjourn the substantive hearing of the OS until the outcome of the Appeal is known.  In Mr Ho SC’s submissions, the PSI claimed by Tang is a valid defence in the contempt proceedings.  This court should hear and determine the OS after the outcome of the Appeal is known.  By then, I would have the benefit of determining the OS in the light of the Court of Appeal’s judgment given in the Appeal.  Mr Ho SC also submits that this course would not prejudice Kot, for §§2 - 4 of the 3 May Order have already been stayed by the Court of Appeal, and in any event Kot cannot enforce these terms against Tang before the determination of the Appeal.

13.As a starting point, it must be right that an order must be strictly observed until and unless it is set aside.  This has been made clear by the Court of Final Appeal in Kao, Lee & Yip v Koo Hoi Yan[1]:

“26. ...... As Romer LJ said in Hadkinson v. Hadkinson [1952] P. 285, 288 in a passage approved by the Privy Council in Isaacs v. Robertson [1985] AC 97, 101-102:

‘It is the plain and unqualified obligation of every person against, or in respect of whom, an order is made by a court of competent jurisdiction, to obey it unless and until that order is discharged.’

His Lordship described this as an obligation of “uncompromising nature”. In Howitt Transport v. Transport and General Workers’ Union [1973] ICR 1, 10, Sir John Donaldson expressed the view that:

‘... orders of any court must be complied with strictly in accordance with their terms. It is not sufficient, by way of answer to an allegation that a court order has not been complied with, for the person concerned to say that he “did his best.” The only exception to that proposition is where the court order itself only orders the person concerned to “do his best.” But if a court order requires a certain state of affairs to be achieved, the only way in which the order can be complied with is by achieving that state of affairs.’”

14.Mr Ho SC does not dispute this general principle.  However, relying upon Pheby v Paier[2], Mr Ho SC argues that PSI is a valid defence to contempt.  In Pheby, Sakhrani J said:

“12. There can be no doubt, of course, that orders of the court must be obeyed. It is the first defendant’s contention, however, that he has a privilege against self-incrimination which he has asserted. He has raised the point in his affidavit. Although he has not sought to vary or discharge or suspend the order, I see no reason why he cannot raise the point in his defence to the contempt proceedings. He is entitled to raise any defence he sees fit.

............

27. It seems to me that the claim to privilege against self-incrimination is well founded. The plaintiff has failed to satisfy me that the first defendant is guilty of contempt of court as alleged in the notice of motion and the application is dismissed.”

15.Mr Dawes SC submits that Pheby should not be followed for it is contrary to the well-established principle endorsed by the Court of Final Appeal in Kao, Lee and Yip.  Alternatively, Pheby is inapposite to the present case, for the order in Pheby is an ex parte order, while the 3 May Order is an order made by this court in an inter partes hearing.

16.In my view, the crux is whether the law as stated in Pheby, ie PSI is a valid defence in contempt proceedings, is good law.  With respect to Mr Dawes SC, I do not think there is any merit in his alternative argument. If Pheby is good law, I do not see any rational basis upon which one can say that PSI is a valid defence in contempt proceedings in which the subject order is an ex parte order, but cannot be a defence in contempt proceedings in which the subject order is an inter partes order.

17.Having considered the submissions made by counsel, I am of the view that the PSI issue is not a simple matter.  The proposition advanced by Mr Ho SC, ie PSI is a valid defence in contempt proceedings, is an arguable proposition.  Mr Ho SC submits that PSI is a fundamental right guaranteed by the constitution[3].  It would be absurd to find a person in contempt when he is validly exercising his constitutional right protected by law.  Further, to establish a case on contempt, the applicant has to show not only non-compliance with an order, but also that it was within the power of the alleged contemnor to comply with it.[4]  A valid exercise of the PSI right, which provides that a deponent would be entitled to refuse to answer a question or to produce any document, would mean that it is not within his power to comply with a disclosure order.  I am of the view that there is force in these submissions.

18.In these circumstances, I agree with Mr Ho SC that it would be desirable for me to wait for the outcome of the Appeal. The Court of Appeal’s decision on the PSI issue may have an impact on the liability issue in these contempt proceedings.  Granting the adjournment application would not prejudice Kot.  As submitted by Mr Ho SC, §§2 - 4 of the 3 May Order have been stayed by the Court of Appeal.  Kot cannot force Tang to make any disclosure pursuant to those terms before the determination of the Appeal.  Further, even if I proceed to hear the OS, I can only determine the liability issue but not the penalty issue and costs in the contempt proceedings, for the Appeal is now in place and has not yet been determined.  From the case management perspective, in the absence of any special reason, all issues should be determined in one go and there should be no split hearing.

19.I would adjourn the substantive hearing of the OS pending the determination of the Appeal.  I would determine the matters in these contempt proceedings, including costs, after the outcome of the Appeal is known.

Disposition

20.I make the following order:

(1)  The substantive hearing of the OS be adjourned sine dine pending the determination of the Appeal.

(2)  Within 28 days after the determination of the Appeal,

(a)  the parties shall jointly provide the agreed proposed directions for the disposal of the OS to the court;

(b)  in the absence of any agreement between the parties, each party shall submit his proposed directions to the court.

(3)  There be a certificate for 2 counsel for this hearing.

(4)  Costs reserved.

21.I thank counsel for the helpful assistance rendered to the court.

Mr Victor Dawes SC leading Ms Sara Tong & Ms Esther Mak, instructed by Mayer Brown, for the Applicant

Mr Amborse Ho SC leading Mr Jeff Chan, instructed by Li & Lai, for the Respondent