Hwang Joon Sang and Another v. Golden Electronics Inc. and Others

HCA 1529/2019

[2021] HKCFI 3296

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1529 OF 2019

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D E C I S I O N

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A. Introduction

1.Although ex parte applications for leave to apply for an order of committal for contempt are usually dealt with on the papers, I fixed a short hearing of the plaintiffs’ application in this case, not least because of the effect of the combination of RHC Order 41A rule 9 and Order 52 rule 2 which are the two rules under which the application is made.

2.At the end of the hearing, at which the plaintiffs were represented by Mr Moses Park of Counsel, I reserved my Decision to be handed down in writing the following morning.  Mr Park had of course filed prior written submissions for use at the hearing.  However, in the afternoon following the hearing, Mr Park also filed supplemental written submissions to address what he understood to be areas of concern raised by me at the hearing.  I have taken those further submissions into account.

3.This is my Decision.

B.      The Application

4.The plaintiffs seek leave to apply for an order of committal for contempt against the 6^th defendant (“Vivien”), because of the false statements made by her, on behalf of herself and the 1^st to 7^th defendants, in her 1^st and 2^nd affirmations made in support of the application to discharge the injunctions against them (“Discharge Summons”).

5.The context for, and the decision on, the Discharge Summons can be found in my Judgment dated 19 August 2021, [2021] HKCFI 2425.  For present purposes, focus can be on that part of the Judgment beginning at §47, which dealt with Vivien’s case that the plaintiffs had made a material non-disclosure in the “misrepresentation” as to why Vivien went back to Taiwan.  More specifically, at §§54-61, I stated:

54.       But most importantly, (1) the chronology is against Vivien’s submissions, and (2) Vivien’s case has shifted to the extent that there is at least a strong argument that she deliberately lied in her earlier affirmations, and that her complaint of non-disclosure is based on that lie.

55.       As to the first point, on the evidence originally put forward, it seems that the threatening words were communicated only after Vivien absconded and became uncontactable.  Hence, I agree with Mr Lam that it is illogical to suggest that she absconded because of the use of those words.  Indeed, if Vivien had not apparently disappeared with the Plaintiffs’ money, Jason would not have reason to have sent the messages (inappropriate though they were), and it might be thought that he would not have become increasingly desperate as the messages reveal.

56.       Further, on the original evidence as filed, it did not seem to me that Vivien likely felt “threatened”.  She was apparently in Hong Kong on 4 July 2019, and had a meal at a restaurant in Causeway Bay using the credit card of one of Jason’s clients.  On that basis, either she did not “flee back” to Taiwan as she claimed, or if she had travelled to Taiwan she nevertheless felt able to return to Hong Kong.

57.       As to the second point, the evolution of Vivien’s case is stark.  In her 1^st affirmation she had a section headed ‘Reasons for my “Abscondment”’.  In it, having set out the content of certain messages, she expressly said, “That was why I had to flee back to Taiwan in a big hurry”.  There can be no doubt that Vivien was intending to leave the impression that it was the threatening emails which caused her to leave Hong Kong and to go to Taiwan, and to do so in a big hurry.  Indeed, later in the same affirmation she referred back to her explanation of “the true reason for my hurried departure from Hong Kong” and how she had “withdrawn to Taiwan where I thought I would be safe”.

58.       In her 2^nd affirmation, Vivien wrote about what she called Jason’s criminal intimidation in “sending the gangsters to kill me in Hong Kong”.  As she put it, “Rushing back to Taiwan where I am surrounded by my own folks is the safest course that I could have taken in the circumstances”.  Again, there can be no doubt that Vivien was intending to leave the impression that she had left Hong Kong in a rush, to go back to Taiwan to find the safety not available to her in Hong Kong.

59.       But since the last hearing and my Hadkinson decision, which raised questions about the chronology and the veracity or logic of her allegations, Vivien has filed further evidence in her 4^th affirmation.  In it, she has made a complete volte face.  Now she says that she was not in fact in Hong Kong on 4 July 2019, and in fact had been in Taiwan throughout the period from 6 June to 10 July 2019.  That evidence in effect gives the lie to her own previous evidence by showing that she did not “flee” or “rush back” from Hong Kong to Taiwan – because, on the new evidence, she was already in Taiwan and had been for some time.  It was simply not the threats which caused her to leave Hong Kong and rush to safety Taiwan, as she originally claimed.  Indeed, there is also a further significant change in the evidence, because she claims not to have received the messages as soon as they were sent, as she had left her mobile phone behind and only picked them up later.  Having read them, despite being in preparation to fly to Hong Kong, she now says she immediately cancelled the flight.

60.       There is no attempt to explain away the complete inconsistencies in her evidence, and her change of stance.  Further, the explanation as to why she had been non-communicative at the relevant time, resting on the assertion that her mother encountered a traffic accident on 17 May 2019, which required Vivien to attend to her whilst in hospital and afterwards, is also somewhat contradicted by the continuing business messages from Vivien to Jason in May and June 2019 (including when she was continuing to report to him the various bank balances – false reports though they now, at least at first blush, appear to be).

61.       Hence, the suggested material non-disclosure in failing to explain the “true” reasons for Vivien’s abscondment from Hong Kong does not seem to me to get off the ground.

6.It is of no surprise that the plaintiffs now place significant reliance on what I have already said.

C.      Applicable Legal Principles

7.Order 52, rule 2(1) provides that no application for an order of committal against any person may be made unless leave to make such an application has been granted in accordance with the rule.

8.But the plaintiffs’ present application also invokes Order 41A rule 9, which provides that:

(1)  Proceedings for contempt of court may be brought against the person if he makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth.

(2)  Proceedings under this rule may be brought only –

(a)  by the Secretary for Justice or a person aggrieved by the full statement; and

(b)  with the leave of the Court.

(3)  The Court shall not grant the leave under paragraph (2) unless it is satisfied that the punishment for contempt of court is proportionate and appropriate in relation to the full statement.

(4)  Proceedings under this rule are subject to the law relating to contempt of court and this rule is without prejudice to such law.

9.Hence, a person who makes a statement in a document verified by a statement of truth is only guilty of contempt if the statement is false and the person knew it to be untrue or was reckless as to whether or not it was true when he/she made it.  This is against the starting point that statements of truth are, and must be regarded as, important. Persons who sign to verify the contents of documents which are in fact untrue must appreciate that they may face contempt proceedings and, possibly, independent criminal proceedings.

10.How to approach applications under Order 41A rule 9 was considered by the Court of Appeal in Numeric City Ltd v Lau Chi Wing [2016] 4 HKLRD 812.  At §13, the Court of Appeal endorsed part of the content of what is now found in Hong Kong Civil Procedure 2022 Note 41A/9/1. At §§17-18, the Court of Appeal further emphasized the importance of Order 41A rule 9, including by reference to the explanation in KJM Superbikes Ltd v Hinton [2009] 1 WLR 2406 at §§16-17:

11.Drawing the various strings together, I would offer my own summary of the approach as follows:

(1)  The Court will always approach with extreme caution any application for leave to cite a person for contempt for giving a false statement verified by statement of truth without an honest belief in its truth.

(2)  Hence, it is of paramount importance for the applicant to make explicit reference to the fact that he is seeking leave under Order 41A rule 9, so that the Court’s vigilance is aroused.

(3)  On the application, the Court should remind itself that contempt proceedings are public in nature, and that ultimately the only question is whether it is in the public interest for such proceedings to be brought.

(4)  The wider public interest would not be served if Courts were to exercise the discretion too freely in favour of allowing such proceedings to be pursued by private persons.

(5)  As examples:

(a)  the Court should be astute to guard against the risk of allowing vindictive litigants to use such proceedings to harass persons against whom they have a grievance, whether justified or not; and

(b)  a significant period of delay in bringing proceedings for contempt may make it oppressive to grant leave.

(6)  When answering the ultimate question as to whether it is in the public interest for the proceedings to be brought, there are many factors that the Court will need to consider.  Cases are bound to differ widely both as to their nature and as to the circumstances of the alleged contempt and so each case will have to be considered according to its own facts.

(7)  Some of the factors may indicate whether or not the alleged contempt, if proved, is of sufficient gravity for there to be a public interest in taking proceedings in relation to it.

(8)  Those factors include:

(a)  the strength of the evidence tending to show the falsity of the statement in question and that it was known at the time to be false;

(b)  the significance of the statement in the proceedings in which it was made; and

(c)  such evidence as there is as to the state of mind of the person who made the statement, including his understanding of its likely effect and the use to which it was actually put in the proceedings.

(9)  But, even if those factors tend to point to the public interest in the grant of leave, those are not the only factors to be taken into account.

(10)  Other important factors to be weighed in the balance will include the Court’s view as to:

(a)  the extent to which the applicant was or might be directly affected by the false statement;

(b)  whether the alleged contemnor was warned at the earliest opportunity that he/she may have committed a contempt;

(c)  whether the alleged contemnor has recanted from the relevant statement, and the timing of any recanting from the relevant statement;

(d)  the deterrent effect of the proposed contempt proceedings (i) on the alleged contemnor and (ii) on other litigants in general; and

(e)  whether the proposed contempt proceedings would be likely to justify the resources that would have to be devoted to them.

(11)  But only limited weight should be attached to the likely penalty.

(12)  Foreign individuals may be subject to contempt proceedings, or otherwise the integrity of the system as a whole would be undermined if it were thought that foreign parties or witnesses were not subject to the same discipline as parties or witnesses in Hong Kong.

12.It might also be pointed out that, in general, the proper time for determining truth or falsity of statements which may give rise to contempt is at trial, when all the relevant issues of fact are before the court and the statements can be considered against the totality of evidence.  To give leave during the interlocutory stages will unlikely be appropriate if it would serve to distort the trial process.  In essence, the Court should be wary of entertaining applications for committal if this would risk impacting adversely upon the fairness of future proceedings, and in particular upon the ability of the alleged contemnor to give oral evidence at a future point in time.  However, this was not an immutable rule and a Court would have to weigh carefully all the relevant surrounding circumstances.  After trial, the Court may be better able to make an informed assessment as to whether or not the pursuit of contempt proceedings is in the public interest in the particular case, as well as to consider such alternatives as referring the papers to the Director of Public Prosecutions (as to which, see further below).

13.If the Court grants leave, it should give reasons for doing so.  But care must be taken to avoid prejudicing the outcome of the substantive proceedings.

D.      Is Order 41A rule 9 Applicable to an Affidavit/Affirmation?

14.However, the question arises as to whether Order 41A rule 9 has any application to a complaint about a false statement made in an affidavit or affirmation.

15.Order 41A in general, and rule 9 in particular, refer to documents verified by a statement of truth.  Under Order 41A rule 2, the documents which must be so verified in accordance with Order 41A are stated to be: (a) a pleading; (b) a witness statement; (c) an expert report; and (d) any other document verification of which in accordance with Order 41A is required by any other provision of the RHC or by a Practice Direction.

16.On the face of it, an affidavit or affirmation does not fall within the description of those documents required to be verified under Order 41A.  Within the RHC, it is Order 41 which comprises the rules relating to affidavits.  One further difference is that pleadings or witness statements or expert reports, though required to be verified by a statement of truth, are not in themselves evidence (at least not until actually adopted or deployed as evidence), whereas an affidavit or affirmation is sworn or affirmed evidence from the time it is sworn or affirmed.

17.On one view, making a false affidavit or affirmation, in other words giving false evidence, might be thought to be more serious than merely verifying as true a document which has yet to become (and may never become) actual evidence.  But I wonder whether that seems anachronistic.  As pointed out by Green J in International Sports Stores Ltd v Thomas Shorey [2015] EWHC 2040 (QB) at §41, it assumes that the law attributes less weight and significance to a formal statement of truth than to a formal affidavit, and I share his view that this is not a reflection of modern litigation practice.

18.Of course, there is a specific criminal offence created by section 40 of the Crimes Ordinance Cap 200, which is headed ‘Using false affidavits’, and states:

Any person who wilfully uses for any purpose any affidavit which he knows to be false or does not believe to be true, wherever such affidavit may have been sworn, shall be guilty of an offence and shall be liable on conviction upon indictment to imprisonment for 7 years and to a fine.

19.Reference can also be made to ‘Arlidge, Eady and Smith on Contempt’ 5^th Ed at §11-61, and the cases there footnoted, which identify that the equivalent English procedural rule has no application to an allegation of contempt by knowingly swearing a false affidavit.  The point is also made that nowadays it is unusual for false evidence to be the subject of contempt proceedings rather than a prosecution for perjury, but in principle the sanctions for contempt remain available in an appropriate case.

20.On the other hand, especially in modern litigation practice, it seems to me that the requirement for affidavits or affirmations to be sworn or affirmed as to their truth is closely similar to the requirement for other documents to be verified by a statement of truth. The mischief aimed at must be the prevention, or at least strong deterrence against, giving false evidence.  The direct analogy was drawn in Kinform Ltd v Tsui Loi [2011] 5 HKLRD 80 at §8, when it was put thus:

Like the commission of the offence of perjury, the giving of a false statement verified by a statement of truth would undermine the whole process of our system of justice and the Court will not tolerate such an act. A clear message has been sent to all litigants that they must not lie when they put forward their case in the form of pleadings or witness statements.

21.Mr Park has also drawn my attention to La Dolce Vita Fine Dining Group Holdings Ltd v Zhang Lan [2018] HKCFI 548 at §98, where it was pointed out – referencing the Numeric case – that a deponent who knowingly swears a false affidavit or affirmation commits a contempt of court, since the affidavit includes a jurat and is therefore the equivalent of testimony on oath.

22.Therefore, even if Order 41A rule 9 is not directly applicable to an application for leave to apply for committal against the person on the basis that the person has made a false affidavit or affirmation – and I think it is not – the general approach to be taken to such an application will be similar.  If Order 41A is not directly applicable, the applicant for leave to apply for committal will still need to satisfy the requirements of Order 52.

23.At bottom, as the ultimate question identifies (see above), it is the Court to whom the oath or affirmation or verification statement is given, and it is the Court in its maintenance of the proper administration of justice that decides whether it is in the public interest in the overall circumstances of any individual case to permit committal proceedings in that case, and if so at what point in time.

E.      Is it in the Public Interest for Leave to be Granted?

24.On the basis that Order 41A rule 9 is applicable, or on the basis that the relevant approach will by analogy be considered in the context of the assertion that a false statement has been made on affidavit or affirmation, the question arises as to whether it is in the public interest for leave to be granted to commence committal proceedings.

25.As shown above, including by reference to my Judgment dismissing the Discharge Summons:

(1)  I have already found that there was at least a strong argument that Vivien deliberately lied in her earlier affirmations and that her complaint of non-disclosure was based on that lie.

(2)  Indeed, as I went on to hold, the falsity in the statements made by Vivien in her 1^st and 2^nd affirmations was revealed by the complete volte face made in her 4^th affirmation, which in effect gave the lie to her own previous evidence.

(3)  Therefore, I accept that the case against Vivien is strong.

(4)  In fact, though my finding was on the civil standard, because of the nature of the finding I needed to be satisfied that there was compelling evidence supporting that finding.  I was, because there was.

(5)  I also accept that the false statements were material to the Discharge Summons, essentially underpinning the complaint of material non-disclosure as one of the reasons to discharge.

(6)  The materiality must have been understood, not least in circumstances where Vivien has all along been legally represented and the Discharge Summons and supporting affirmations were prepared with the benefit of that representation.

(7)  There were other aspects of Vivien’s conduct strongly suggestive of wilful indifference to, or simply ignoring of, Court orders made against her: see my Hadkinson Order Decision [2020] HKCFI 1973.

26.Those factors tend to point to the public interest in the grant of leave to apply for committal.  It might also be thought that, because the particular false statements were made in the context of an application which has now been dealt with, now would be an appropriate time for the grant of leave (rather than awaiting any trial).

27.I also accept that sending a clear message to all litigants not to lie when putting forward their case is important in upholding the proper administration of justice and itself points to the public interest in the grant of leave.  This is in part because statements can, and are sometimes designed to, interfere with the course of justice.

28.Of course, Vivien has by what she said in her 4^th affirmation recanted from the falsity in the statements originally made, though I have also noted a complete failure in that affirmation to explain away the inconsistencies in her evidence and her change of stance.

29.I note that having been informed of the possibility of this application, Vivien has filed her 6^th affirmation dated 24 September 2021, in which she seeks to explain why (as she puts it) she “made the mistake in [her] 1^st and 2^nd Affirmations about [her] rushing back to Hong Kong in early July 2019”.  Her offered explanation is that the mistake was caused by a misrepresentation by Jason (the 1^st plaintiff), and that it was only after the exact date of her return to Taiwan became an issue in the hearing on 16 July 2021 that she then checked the official records to find out when she had left and arrived in Taiwan.  Without descending into unnecessary detail, I can say that I do not think much of that explanation, and that Vivien risks looking like someone already in a deep hole who would be better advised to stop digging.

30.Nevertheless, the following factors must also be brought into the balance:

(1)  The immediate effect of the falsity in Vivien’s statements (as found by me to the appropriate standard in the relevant context) has already been felt in the dismissal of the Discharge Summons, in the maintenance of the injunctions, and in the costs orders made against her (though I accept she may not have honoured them).

(2)  As Mr Park fairly acknowledges, the false statements may not affect the outcome of the trial, not least where Vivien has already recanted.

(3)  Indeed, the Discharge Summons was itself an interlocutory element of the litigation, more or less separate from the main questions to be resolved at any trial.

(4)  Vivien also knows from my previous Judgment, as well as from this Decision, that the Court will bring some healthy scepticism to play and will carefully scrutinise any statement she chooses to make, when assessing its truthfulness in the context of the evidence overall.

(5)  Though the absence from Hong Kong of a party or witness should not be regarded as giving licence to that party or witness to lie without fear of consequence, there are other forms of consequence which can be brought to bear than merely those flowing from committal proceedings.

(6)  Any contempt proceedings would of course require the devotion of Court resources.

(7)  Because Vivien is in Taiwan not Hong Kong, the possibility obviously arises as to the means by which any contempt proceedings would be conducted, including any potential ‘remote hearing’ element, which points may themselves give rise to additional argument and further necessary use of Court resources.

31.In his supplemental submissions, Mr Park has suggested that granting leave in this case would be in the interests of justice as the opportunity would arise for the Court to obtain undertaking(s) from Vivien including but not limited to her undertaking to attend the HCA Action failing which her Defence may be struck out.  But, first, I doubt that extracting (or seeking to extract) an undertaking of that nature is a form of penalty which might be exercised upon an order of committal. Further, secondly and in any event, in the consideration as to whether or not to grant leave to apply for committal, only limited weight should be attached to the likely penalty.

32.On balance, and in the overall exercise of my discretion, it seems to me that the answer to the ultimate question is that it is not in the public interest for committal proceedings to be brought. Overall, again on balance, I do not think such proceedings leading to potential punishment for contempt would be proportionate or appropriate in this instance.

33.Because this application is being decided on its own particular facts and circumstances, nothing in it should be taken to reduce the deterrence intended to other parties or witnesses.

F.      Result

34.The ex parte application for leave to apply for an order of committal for contempt is refused.

35.Because notice had been given of the intention to make the application, and solicitors for Vivien asked for her 6^th affirmation and their correspondence to be brought to the attention of the Court, I also direct that this Decision be served on those solicitors.

36.I make no order as to costs.

Mr Moses Park, instructed by ONC Lawyers, for the plaintiffs