Joe Zhixiong Zhou v. Saif Partners Ii L.P. and Another

CAMP 231/2020 & CACV 625/2020

[2021] HKCA 574

CAMP 231/2020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 231 OF 2020

(ON AN INTENDED APPEAL FROM HCCL NO. 16 OF 2016)

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CACV 625/2020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 625 OF 2020

(ON APPEAL FROM HCMP NO. 208 OF 2020)

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Before : Hon Cheung and Chu JJA in Court

Date of Decision : 23 April 2021

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D E C I S I O N

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Hon Cheung JA (giving the Decision of the Court) :

I. Application for leave to appeal and stay

CAMP 231/2020

1.1On 5 February 2020 Deputy High Court Judge Field (‘Judge Field’) in HCMP 208/2020 granted leave to the defendants to commence contempt proceedings against the plaintiff for non‑compliance of an order for disclosure dated   26  June 2018 (sealed on 28 March 2019) (‘Disclosure Order’) under which the plaintiff is required to provide an account ordered by Judge Field on 14 February 2018 (‘Account Order’). Judge Field on 5 February 2020 also ordered personal service of the Disclosure Order on the plaintiff who lives in the USA be dispensed with (‘the Dispensing Order’).  Contempt proceedings have since been commenced against the plaintiff on 10 March 2020.

1.2On 17 September 2020 Anthony Chan J refused the plaintiff’s application to set aside Judge Field’s orders of 5 February 2020.  Anthony Chan J on 20 November 2020 also refused to grant leave to the plaintiff to appeal and stay the proceedings pending appeal.  The plaintiff now renews his applications for leave to appeal and stay before us which we will deal with on paper.

CACV 625/2020

1.3The plaintiff also applies before us for a stay of the contempt proceedings pending the appeal (CACV 625/2020) against another order of Anthony Chan J dated 17 September 2020 by which he refused to set aside his order dated 4 June 2020 where he granted substituted service of the originating summons in HCMP 208/2020 on the plaintiff’s Hong Kong solicitors.   The appeal is pursuant to leave granted by Anthony Chan J on 20 November 2020.

II.  Leave to appeal

Grounds of appeal

2.1Seven grounds of appeal are relied upon by the plaintiff and they are summarised as follows :

2.2Anthony Chan J erred in law, misdirected himself and acted in disregard of principles when he erroneously concluded that the defendants’ ex parte case for committal was not deficient and unsustainable for lack of asserted grounds for committal and a prima facie case. (Ground 1)

2.3Anthony Chan J erred in law, misdirected himself and acted in disregard of principles by disregarding the evidence before him which showed that there was no proper basis for a committal order in that the plaintiff had prima facie complied with the Account Order and Disclosure Order.  The statement filed in support of the application for leave to commence contempt proceedings did not identify any alleged undisclosed income and undisclosed document. (Grounds 2(1) and (2))

2.4The defendants had already invoked alternative powers of the Court and the committal proceedings are unnecessary. (Ground 2(3))

2.5The Disclosure Order was ambiguous and there was no evidence that the plaintiff’s understanding of the order was incorrect or had deliberately or contumeliously breached the order. (Ground 2(4))

2.6Anthony Chan J erred in law in concluding that the evidence before him showed beyond reasonable doubt that the plaintiff knew the terms of the Disclosure Order and the consequences for disobedience. (Ground 3)

2.7Material non‑disclosure. (Grounds 4, 5 and 6)

2.8Anthony Chan J erred in rejecting the plaintiff’s submission that there was no proper basis to make the Dispensing Order. (Ground 7)

2.9Anthony Chan J erred in holding that there was no material non‑disclosure in obtaining the Dispensing Order. (Ground 8)

Our view

Ground 1

2.10The plaintiff had not elaborated why the defendants’ application for leave to commence committal proceedings is deficient and unsustainable.  This ground is not reasonably arguable.

Ground 2

Grounds 2(1) and (2)

2.11Judge Field was the trial judge who heard the action and made the Account Order and later the Disclosure Order.  He was most familiar with the extent of disclosure required by his orders and was of the view that the plaintiff had not complied with the Disclosure Order.  He held that ‘it is distinctly arguable that [the plaintiff] is in breach of the Disclosure Order (Decision dated 11 March 2020 at [11])’. Anthony Chan J’s refusal to disturb Judge Field’s view cannot be faulted.

Ground 2(3)

2.12Anthony Chan J had fully addressed the arguments before concluding that the account proceedings are not an alternative remedy to the contempt proceedings.  This ground is not reasonably arguable.

Ground 2(4)

2.13The plaintiff did not elaborate why the Disclosure Order was ambiguous.  The plaintiff had not asserted ambiguity in the hearing before Anthony Chan J.  On the contrary he asserted that he had complied with it which could only mean that he had fully understood its terms and effects.  Further it is not necessary to show that the plaintiff’s understanding is ‘consciously incorrect’ or that he had ‘deliberately or contumaciously breached’ the order for the purpose of contempt. This ground is not reasonably arguable.

Ground 3

2.14This ground deals with the Dispensing Order.  In our view Anthony Chan J had fully addressed the issue and this ground is not reasonably arguable.

Grounds 4, 5 and 6

2.15Anthony Chan J had addressed the issue of material non‑disclosure and arrived at the correct conclusion.  These grounds are not reasonably arguable.

Grounds 7 and 8

2.16It is not reasonably arguable that the discretion to dispense with personal service of the Disclosure Order or Anthony Chan J’s refusal to disturb it was plainly wrong.

III.  Stay of proceedings

3.1The plaintiff argues that without a stay his appeal in CACV 625/2020 will be rendered nugatory.  The issue is whether his participation in the contempt proceedings will be considered a submission to jurisdiction.  The plaintiff argues that if leave to appeal is granted in HCMP 208/2020 the same consideration will apply to that appeal.

3.2Anthony Chan J had addressed the issue whether participation in the contempt proceedings will constitute submission to jurisdiction.  We agree with the reasoning.

IV.    Conclusion

4.1The applications for leave to appeal and stay are refused with costs to the defendants.  There will be certificate for two counsel.  This Court will assess costs summarily.  The defendants are to file and serve their statement of costs within ten days and the plaintiff is to file and serve his objections within ten days thereafter.

4.2As the plaintiff’s application is totally without merit, we will pursuant to Order 59, rule 2A(8) make an order that no party may request our determination to be reconsidered at an oral hearing inter partes.

Mr Barrie Barlow SC and Mr Chan Pat Lun, instructed by MinterEllison LLP, for the Plaintiff in CAMP 231/2020 and the Defendant in CACV 625/2020

Mr Charles Manzoni SC and Mr Alexander Tang, instructed by Fangda Partners, for the 1^st and 2^nd Defendants in CAMP 231/2020 and the 1^st to 2^nd Plaintiffs in CACV 625/2020