Yu Quan Li and Another v. Suen Kin Wing

HCMP 633/2019

[2024] HKCFI 109

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 633 OF 2019

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D E C I S I O N

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Introduction

1.On 31 August 2023, I found the defendant guilty of contempt on two counts:

(1)  Count 1 — he was in breach of the worldwide freezing injunction granted on an ex parte basis on 18 July 2018 and continued and varied on 27 July 2018 in HCA 1671/2018 by assigning his interests in 27 apartments at 8 Casson Square in London to a company called Southern Capital Limited on 27 July 2018.

(2)  Court 2 — he was in breach of the ancillary disclosure order contained in the injunction by wilfully and repeatedly failing to disclose any of his assets of $50,000 or above to the plaintiffs.

2.See my judgment at [2023] HKCFI 2149.

3.I adjourned the matter for sentencing and directed that the defendant be at liberty to file affirmation evidence and lodge written submissions for mitigation in advance of the sentencing hearing: see para 118. This is the sentencing hearing.

4.The defendant did not take up the opportunity to file evidence or lodge submissions in advance of today’s hearing in mitigation. He appears before me today acting in person.

5.The plaintiffs are represented by Ms Tiffany Chan, counsel. She has lodged skeleton submissions before the hearing. The defendant confirms to the court today that he has had a chance to read the judgment and also the plaintiffs’ skeleton submissions. References to paragraphs in this decision are to the paragraphs in my judgment mentioned above and defined terms used there are adopted below.

Legal principles

6.Contempt of civil court orders is a serious matter. A prime consideration of the court in sentencing contempt is to signal the importance to litigants that orders of the court are to be obeyed. “Litigants” refer to litigants in general and not just the contemnor himself.

7.The nature of the order and the breach in question as well as the extent of the breach are highly relevant considerations. The sentence may range from a fine to a term of imprisonment.

8.In respect of a freezing injunction, subject to any mitigating factors, deliberate and serious breaches of the restraint or the disclosure provisions would be met with an immediate term of imprisonment, which is measured in months rather than weeks.

9.Whether the contemnor has purged the contempt and whether the plaintiff has suffered any irremediable prejudice are particularly weighty considerations in sentencing.

10.The above principles are extracted from recent decisions on contempt: see, eg, Suzanne Ruth Henderson v Scott Henderson HCMP 2016/2014, 14 April 2016; and Kot See For v Chan Leong Hang [2021] HKCFI 1305.

Discussion

11.I deal first with Count 1.

12.In my judgment, I found that the defendant breached the Injunction by assigning his interests in the Casson Square properties to a company 100% owned by him. I further found that he breached the Injunction “with a view to concealing and shielding those properties from the knowledge of the plaintiffs”. I found that it was a deliberate decision not to obey the Injunction. See paras 88, 98 and 99.

13.Applying the legal principles discussed above, this would warrant an immediate custodial sentence subject to any mitigating factors.

14.The assignment cannot now be reversed because the agreements for sale for the Casson Square properties had been rescinded by the developers in London and the deposits forfeited: see para 46. The contempt cannot be purged now.

15.At today’s hearing, the defendant makes a number of points in mitigation.

(1)  He tenders his apology to the court and the plaintiffs for taking up the court’s time and resources in this case.

(2)  He reiterates his stance that he had no intention to dispose of his assets. The BVI company who was assigned the interest in the Casson Square properties was 100% owned by him.

(3)  Having been found guilty of contempt by the court, his future prospects, including his job, his professional qualification, his income and his emigration prospect would be greatly affected.

16.He asks for a fine or a suspended imprisonment sentence.

17.I have already found that the breach of the Injunction under Count 1 was deliberate. Therefore, the defendant’s point on this is not a valid mitigating factor. Further, his submissions regarding his future prospects do not count as a valid mitigating ground either in view of the seriousness of the breach under Count 1.

18.Taking in all the relevant circumstances, I impose an immediate sentence of 6 months’ imprisonment for Count 1.

19.I now deal with Count 2.

20.I found in my judgment that the defendant breached the Disclosure Order by wilfully and repeatedly failing to disclose any of his assets of $50,000 or more to the plaintiffs. I further found that his breach of the Disclosure Order was deliberate, intentional and wilful.

21.The breach of the Disclosure Order is continuing and has not been purged. There has been up to now no admission by the defendant of his breach of the Disclosure Order. Nor did he make any offer to remedy the breach or purge the contempt by making full and proper disclosure of his assets.

22.The prejudice to the plaintiffs arising out of such breach is real. In the absence of any information on the defendant’s assets, the purpose of the restraining order is effectively defeated. This is because the plaintiffs have no information whatsoever based on which to take steps to freeze the assets of the defendant, which may be used to satisfy any future judgment obtained against him.

23.In mitigation, the defendant says today that he firmly believed and still believes the legal advice that he received that he could invoke the privilege against self-incrimination. And that is the reason why he did not disclose his assets. He says he never intended to disobey the Disclosure Order.

24.The latter submission is contrary to my factual finding. I do not accept that as a mitigating factor.

25.For Count 2, I impose a sentence of 6 months’ imprisonment. I do not consider that it is an appropriate case to suspend the imprisonment and to give the defendant a last chance to purge the contempt.

26.Up to now, the defendant has not made any offer to purge the contempt by disclosing his assets despite the plaintiffs’ suggestions made both in writing and in today’s oral submissions.

27.In any event, the reality is that the defendant would be imprisoned immediately for Count 1. Therefore, it is doubtful whether any suspension of the punishment for Count 2 would be any incentive at all for him to purge the contempt.

28.There has been a wholesale disregard of the Disclosure Order from the beginning up to now. It is therefore not an appropriate case to order a suspension of the imprisonment terms.

29.Lastly, I order that the sentences for Count 1 and Count 2 to run concurrently.

Costs

30.I grant costs incurred by the plaintiffs since the handing down of my judgment and in respect of the sentencing, which should be paid by the defendant on an indemnity basis to be taxed if not agreed.

Ms Tiffany Chan, instructed by Baker & McKenzie, for the 1^st and 2^nd plaintiffs

The defendant appeared in person