High Fashion New Media Corporation Ltd v. Leong Ma Li
Read the full judgment text of HCMP 932/2020 on BabelCite. This High Court CFI judgment was delivered on 30 May 2024.
1. By a Judgment handed down on 26 July 2022 ( “the Judgment” ), the defendant was found guilty of having committed contempt of court in failing to comply with the Injunction Order.
Cited by 2 cases · Cites 17 cases
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HCMP 932/2020 [2024] HKCFI 1490 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO. 932 OF 2020 ____________________
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________________ DECISION ________________ A. INTRODUCTION[1] 1.By a Judgment handed down on 26 July 2022 (“the Judgment”), the defendant was found guilty of having committed contempt of court in failing to comply with the Injunction Order. 2.In [118] of the Judgment, the parties were directed to use their best endeavours to agree on the directions to be sought for the purpose of the sentencing of the defendant. They were further ordered that, in the event they could not agree on the directions, they shall lodge and serve their respective proposed directions by letter with reasons in support. 3.By letter dated 16 August 2022, the plaintiff’s solicitors reported to the Court that the parties could not agree on directions. The main difference between the parties was whether the hearing on sanction should be adjourned pending the defendant’s intended appeal against the Judgment. 4.By letter dated 26 August 2022, the defendant’s former solicitors (Messrs. Norman M.K. Yeung & Co) proposed to this Court (with reasons in support) that the following order should be made:
5.By a joint letter dated 7 September 2022, the parties reported to this Court that they still could not agree on the question as to whether the hearing on sanction should be adjourned pending the determination of the appeal against the Judgment. Parties therefore put forward their respective proposed directions for the Court’s consideration. 6.By directions dated 15 September 2022, this Court directed that the question of sanction shall be dealt with at a further hearing to be fixed to be heard (not earlier than 28 February 2023). In effect, this Court has refused the defendant’s proposal to wait until the result of the appeal is known before dealing with the matter of sanction. The defendant was also specifically directed to file and serve affirmation(s) by 27 October 2022 if she wished to rely on additional evidence on the question of sanction. It should be noted that the deadline was so fixed because it was the proposal made by the defendant’s own solicitors in the joint letter that she be given 42 days to file such affirmation(s) in the event the Court saw fit to proceed with the hearing on sanction instead of adjourning it pending the determination of the appeal. 7.The hearing on the question of sanction was subsequently fixed to be heard on 9 October 2023 (“the Original Hearing”). 8.Hong Kong was hit by typhoon on 9 October 2023. As a result, the Original Hearing had to be adjourned to the following day. However, the matter could not be heard on 10 October 2023 either because of judicial commitment on the part of senior counsel representing the plaintiff. By consent, the matter was re-fixed. The hearing was then adjourned to be heard on 2 May 2024. B. THE DEFENDANT’S SUMMONSES 9.Before I consider the matter of sanction, I will have to put on record the orders made in respect of the defendant’s summonses filed on 4 October 2023 (5 days before the Original Hearing) and 23 April 2024 (9 days before the hearing on 2 May 2024) respectively, and the reasons therefor. Such orders and reasons have been given verbally at the hearing on 2 May 2024. 10.By summons filed on 4 October 2023 (“the 1st Summons”), the defendant applied for the following orders:
11.On the same day (4 October 2023), the defendant filed her 3rd Affirmation (without leave). 12.By summons filed on 23 April 2024 (“the 2nd Summons”), the defendant further applied for leave to file and serve her 4th Affirmation for the purpose of the hearing on sanction. The 4th Affirmation was filed and served (without leave) on the same day (23 April 2024). 13.The plaintiff’s stance on these applications was as follows:
14.I will deal with the above matters in turn below. B1. Leave to file and serve the defendant’s 3rd Affirmation 15.As the plaintiff raised no objection, retrospective leave was granted for the defendant to file and serve her 3rd Affirmation out of time on 4 October 2023. B2. Stay of the order dated 26 July 2022 16.Upon taking further instruction, Mr Ng informed this Court at the hearing on 2 May 2024 that the defendant had decided not to proceed with the application for stay. 17.I therefore say no more on this application. B3. Leave to file and serve the defendant’s 4th Affirmation 18.The defendant’s 4th Affirmation comprised of the following content:
19.The plaintiff did not object the admission of sections A – E and H of the defendant’s 4th Affirmation. However, the reliance of sections F and G thereof on the part of the defendant was strenuously opposed, on the ground that the matters which were covered therein (particularly the usage of funds transferred from the Capital Account) should have been made clear long time ago rather than being contained in this very late affirmation. 20.Having considered submissions from both sides, I agreed with the plaintiff that, as a matter of principle[2], the defendant should not be granted leave to rely on Sections F and G of her 4th Affirmation, for the reasons which I will explain below. 21.It was undisputed between the parties at the substantive hearing for contempt of court held in mid-2022 that the respective destinations and purposes of the various transfers of monies away from the Capital Account are relevant to the seriousness of the breaches of the Injunction Order on the part of the defendant. 22.It may be recalled that, by directions dated 15 September 2022, this Court directed the defendant to file and serve affirmation(s) by 27 October 2022 if she wished to rely on additional evidence on the question of sanction. The 42-day time period was given at the request of the defendant herself. 23.However, the defendant did not file any affirmation at all by the said deadline. 24.It was only on 4 October 2023 (almost a year later and 5 days before the Original Hearing which was scheduled to be held on 9 October 2023) that she took out a time summons (the 1st Summons) and filed her 3rd Affirmation (without leave). In this affirmation, the defendant blamed her former solicitors for misleading her in believing that there was nothing that she nor her legal team could do pending the resolution of the plaintiff’s security for costs application (which had in fact been disposed of already on 11 September 2023 when the Court of Appeal handed down its decision). She also said she was assured by her former solicitors that the paperwork regarding mitigation had already been settled. 25.I had great reservation on these explanations offered by the defendant. It must be borne in mind that this was the second time when she was found guilty of contempt of court. She must have known that she was required to make an affirmation in support of her mitigation. Even if she had forgotten about her experience back in August 2017 when she tried to justify (by way of an affirmation) some of the transactions which were the subject matters of another contempt proceedings for the purpose of sentencing by Chow J (as he then was), she had no excuse to say that she had no idea of what should be done in the light of this Court’s directions dated 15 September 2022 (in respect of which she did not allege that she had no knowledge). The fact that she had never been asked to execute any affirmation in September and October 2022 should have alarmed her. Yet, there was total inaction on her part. 26.Since the plaintiff fairly accepted that leave should be granted for the defendant to file and serve her 3rd Affirmation (despite the fact that it was late for almost a year), the filing of that 3rd Affirmation was not controversial. However, it should be borne in mind that by the time this 3rd Affirmation was prepared, the defendant has already engaged a new solicitors’ firm to represent her. In this 3rd Affirmation, the defendant did, for the purpose of mitigation, assert that there was no finding in the Judgment nor evidence that she had misappropriated or pocketed Longford’s funds. She also alleged, among other things, that the transactions marked under the description of “備用金” were used to pay off Longford’s legitimate business expenses and that Longford had not suffered any loss or damage as a result of the transactions under complaint. These show that she knew perfectly well that the destinations and the purposes of the usage of the subject funds are relevant as far as her sentencing is concerned. Yet, she did not say that she needed more time to gather more materials in support of her mitigation. 27.As aforesaid, the Original Hearing had to be adjourned and re-fixed to 2 May 2024 because of tropical typhoon signal and unavailability of the plaintiff’s senior counsel. One would expect that if the defendant was really minded to take advantage of this adjournment period to further make good her case on mitigation, she would act fast. Yet, the defendant only sought to adduce her 4th Affirmation 9 calendar days (6 working days) before the adjourned hearing. 28.She explained such lateness by stating in her 4th Affirmation that:
29.As far as the first explanation is concerned, given the defendant’s and her legal team’s clear knowledge and acknowledgement (as the case may be) all along that the purposes of the transferred funds are relevant to the Court’s consideration of sanction, they (particularly the defendant herself whose liberty is at stake) are reasonably expected to start preparing for an affirmation setting out such purposes and explanations on the use of the funds transferred out of the Capital Account once the Judgment has been handed down (if not earlier). One must bear in mind that the Judgment was handed down on 26 July 2022 (i.e. more than 1 year 9 months before the substantive hearing on sanction on 2 May 2024). Therefore, it is simply inexcusable for the defendant not to make this 4th Affirmation earlier (not to mention that she should have included the content on usage of funds in her 3rd Affirmation). 30.At the hearing, when Mr Ng for the defendant tried to persuade this Court that the plaintiff would not be prejudiced by the admission of such evidence and that the plaintiff had had enough time to respond, he emphasised that all the materials relied on by the defendant in fact came from the trial bundle for the substantive hearing for contempt of court. This assertion in fact reinforced my view that the defendant should have prepared this 4th Affirmation long time ago because all that she was required to look at was the evidence which she had already gathered for the purpose of the substantive contempt of court hearing. 31.In relation to the second explanation, while this Court has great sympathy for the defendant’s son, it should be noted that her son encountered the car accident only on 1 March 2024. In other words, the unfortunate incident could at most only explain the delay of the last two months (March and April 2024). In my view, that is not sufficient. 32.The admission of such very late evidence would amount to, as the plaintiff’s senior counsel put it, an extremely belated ambush upon the plaintiff. I agreed with the plaintiff that it would be patently unfair and should not be condoned. 33.As mentioned above, it was the submission of the defendant that the plaintiff would not be prejudiced by the admission of the 4th Affirmation, because all the materials relied on by the defendant, it was said, could be found in the trial bundle used in mid-2022. It was further highlighted that the plaintiff had been able to make written submissions on the 4th Affirmation in its 2nd Reply Submissions dated 30 April 2024. With respect, I do not agree with such arguments:
34.The defendant argued that she would suffer irreversible and serious prejudice if this Court were to refuse leave to admit her 4th Affirmation into evidence, since it is possible that she would face immediate custodial sentence and deprivation of liberty is a serious matter. However, it is clear that she only has herself to blame in the light of the circumstances which have been set out above. 35.As a fallback position, Mr Ng for the defendant asked the Court to allow the admission of paragraph 29 and the first part of paragraph 30 of the defendant’s 4th Affirmation in any event because:
36.I accepted that the defendant should be allowed to rely on LML-13. However, I did not accept that the said paragraph 29 should be allowed to be adduced, as there was no reason why that summary could not be produced earlier. 37.I therefore granted retrospective leave for the defendant to file and serve her 4th Affirmation on 23 April 2024 with the limited purpose of relying on paragraphs 1 – 27 and 75 thereof together with the exhibit marked “LML-13” only. 38.The defendant was seeking indulgence from the Court. Given the nature of contempt proceedings, the defendant should bear indemnity costs. I therefore ordered that the plaintiff’s costs of the 1st Summons and of the 2nd Summons shall be borne by the defendant, with certificate for two counsel, to be taxed on indemnity basis if not agreed. C. RELEVANT LEGAL PRINCIPLES ON SENTENCING 39.The relevant principles in relation to sentencing for contempt of court are well established. 40.In Arboit v Koo Siu Ying [2016] 3 HKLRD 154, Au-Yeung J held that:
41.In La Dolce Vita Fine Dining Co Ltd v Zhang Lan [2019] 2 HKLRD 341, [2019] HKCFI 618, Mimmie Chan J also had the following to say at [8]:
Her Ladyship continued at [14] and [15]:
D. SENTENCING – AGGRAVATING AND MITIGATING FACTORS 42.Both parties have put forward quite a number of factors which are said to be relevant to the question which this Court has to resolve herein, namely, the sentencing of the defendant. I will discuss those factors in turn below. D1. Repeated offence 43.It is undisputed that this is the second time that the defendant breached the Injunction Order. She is therefore a repeated offender. The plaintiff submitted that this must be an aggravating factor which the Court must take into account. 44.I agree with this submission. 45.On the other hand, Mr Ng and Mr Wong for the defendant emphasised that each case should be decided on its own facts. While I accept that the Court should of course sentence the defendant on the basis of the ways that she had breached the Injunction Order on this occasion, I do not think that means that the Court should ignore the fact that she has been convicted once already in the past in respect of the very same Injunction Order. D2. Seriousness of the breach 46.I agree with the plaintiff’s submissions that the defendant’s breaches of the Injunction Order are of a serious nature. 47.First, there were quite a number of transactions involved. In other words, the breach was not one-off. 48.Second, I do not agree with the defendant’s counsel that the transactions grouped under Category B only constituted technical breaches. With greatest respect, I do not understand why counsel thought fit to rely on such an argument even though it had been expressly rejected in the Judgment (see [19] – [23] thereof). Particular attention should be drawn to the Court’s finding that the defendant has been in blatant disregard of the Injunction Order[3]. 49.Third, the defendant’s attempt to rely on the 23 October 2017 Email in her submission that the breach was not serious is futile. It is only required to make reference to [46] to [54] and [59] of the Judgment to illustrate why:
50.Fourth, it is apparent that at least part of the sums transferred away from the Capital Account had been used for the defendant’s own purposes rather than for the benefit of Longford. I will discuss this matter further below under section D7. D3. The defendant’s rejected evidence 51.This is not a factor raised by the plaintiff. 52.In my view, the Court should also take into consideration, as an aggravating factor, the fact that the defendant has made up evidence while defending the contempt proceedings:
D4. Not deliberate/intentional/reckless breach 53.One of the main mitigating factors relied on by the defendant’s counsel was that there was no finding in the Judgment that the defendant had breached the Injunction Order intentionally or recklessly. Heavy emphasis had been placed on the Court’s finding that she had failed to take reasonable steps to prevent Tong from committing acts which were not compliant with the Injunction Order. It was stated that this is equivalent to a finding of negligence only. 54.With greatest respect, such a line of argument was made in total disregard of the findings made in the Judgment:
55.The very bold suggestion made by the defendant’s counsel that the defendant had an honest and bona fide intention to comply with the Injunction Order is also totally contradicted by the findings made in the Judgment. For example, the defendant had been found to be in blatant disregard of the Injunction Order as far as the Category B transactions are concerned[8]. It was also found that she had never informed Tong the terms of the Injunction Order[9]. Moreover, it was found that the Injunction Order would be breached even if Tong had acted in full compliance with the defendant’s instructions given by virtue of the 23 October 2017 Email[10]. D5. Vicarious liability 56.Another emphasis made by the defendant was that the defendant was not found to be liable as a primary actor but only indirectly via Tong as her agent. It was said that since the defendant is only vicariously liable for her agent, this is a strong mitigating factor. 57.I am of the view that it is quite unhelpful to rely on a label such as “vicarious liability” when assessing the seriousness of the breach and hence the appropriate sentence. Put it in another way, it is quite wrong to say that since the breach was committed via an agent, the breach must be treated with leniency. It all depends on the particular circumstances of the case. 58.The present case serves as a good illustration that even in the case where the contemnor is held to be vicariously liable, the breach can still be regarded as serious. One only has to refer to [33] – [36] and [46] – [59] of the Judgment to appreciate such seriousness. There is no room in this case for the defendant to blame her agent at all. D6. No personal benefit 59.The defendant’s counsel submitted that:
60.With greatest respect, it is quite unfair for Mr Ng and Mr Wong to make such a point. This is because even though they were newly instructed to act for the defendant and did not represent her at the substantive contempt of court hearing in mid-2022, they must be aware (by reading the Judgment[12]) that it was the defendant’s then team of counsel who submitted to the Court (which was accepted) that the ultimate destinations and purposes of the monies which had been transferred away from the Capital Account were irrelevant as far as liability for contempt was concerned. Indeed, the defendant’s then senior counsel went on to submit that “in determining liability, the Court plainly [did] not need to investigate and make findings on how the funds were applied in the Current Account”[13]. It was for this reason that the Court did not make any findings in this regard in the Judgment. It is thus regrettable that the defendant’s current team of counsel thought fit to take advantage of such a situation. 61.As to whether the defendant is indeed entitled to rely on the mitigating factor that she did not derive any personal benefit from the transactions complained of, I will deal with the same in the following section. D7. Legitimate business expenses 62.The defendant alleged that all the transactions which are said to constitute her contempt were for Longford’s legitimate business expenses and that this would amount to a mitigating factor. 63.When assessing this argument, it must be borne in mind that while the relevant transactions took place between 29 April 2016 and 23 July 2020[14], the defendant admitted that Longford had no substantive business since 2016, and that all stores previously operated by Longford (for Will Lam’s other companies) had been gradually closed down from 2014 to 2015[15]. 64.However:
65.These figures immediately lead to the question as to why, even if it was necessary to keep Longford “alive” from 2016 onwards, such large sums of expenses had to be incurred. 66.A closer look at the actual expenses which had been incurred would reinforce the plaintiff’s case that this alleged mitigating factor should be rejected. To cite a few examples:
67.I therefore do not accept the defendant’s allegation that she had obtained no personal benefit from the subject transactions at all[23]. Quite the contrary. D8. No risk of further breach 68.The defendant submitted that there is no risk that she will breach the Injunction Order in the future. 69.This is undisputed, because, among other things, the defendant is no longer the CEO of Longford, and she has surrendered Longford’s legal representative chop. 70.However, insofar as it is the defendant’s submission that the plaintiff has no legitimate interest in such circumstances in the enforcement of the Injunction Order, and that a custodial sentence will not serve any practical purpose other than to aggravate the defendant’s present suffering[24], I totally disagree, for it is trite that the object of the sentence is both to punish conduct in defiance of the court’s order and to serve a coercive function by holding out the threat of future punishment as a means of securing the protection which the order was primarily there to do[25]. The inapplicability of the second object does not necessarily mean that it is meaningless to punish the defendant at all. D9. Impracticable to obtain Yau’s signature 71.In the defendant’s skeleton submissions dated 4 October 2023, the defendant’s counsel argued that the Court should take into account the fact that it was impossible for Yau’s signature to be obtained for the purposes of the Injunction Order. 72.At the hearing, the defendant’s counsel informed the Court that the defendant would no longer rely on such an argument. 73.With respect, such a concession must have been correctly made, because this Court has clearly rejected the defendant’s case in this regard in the Judgment[26]. D10. Anxiety and pressure arising from delay 74.The defendant stated that the underlying civil proceedings were commenced back in 2014. Further, she said that on top of such civil claim in which she was a defendant, two committal proceedings had been commenced against her. She asked the Court to consider that these matters have brought her great pressure and anxiety, and that she has been forced to spend substantial sums in legal fees on those matters. 75.These arguments are totally unmeritorious. 76.First, as explained in [105] – [106] of the Judgment, pursuant to an order made by consent by Master M Wong on 23 January 2015, the defendant was supposed to take the next step in the Underlying Proceedings (by filing and serving her Defence) but she had never done so. It therefore lies ill in her mouth to complain that the plaintiff had delayed the matter. 77.Second, it is ridiculous for the defendant to complain that the plaintiff had initiated two committal proceedings against her when it is now clear that these committal proceedings are totally justified. If she did not breach the Injunction Order in the first place, she would not have to face these committal proceedings. She should blame herself rather than anyone else. She has no sympathy from this Court despite the anxiety and pressure which she had allegedly suffered. D11. Impact on the defendant’s reputation 78.The defendant’s counsel urged this Court to consider that the defendant has had a distinguished career in business and she has received awards in the Mainland which publicly recognised her contributions. She has also had a distinguished career in public service in the PRC. It was therefore said that the findings of contempt in the Judgment and in the Previous Contempt Judgment have had an enormous deleterious impact on her reputation. 79.In the circumstances of the present case, where the defendant has been found guilty of contempt of Court once already by virtue of the Previous Contempt Judgment, I do not think the Court should place weight on the so-called “enormous deleterious impact on her reputation” at all. In my view, the defendant should have known such impact, if any, after she had been found guilty on the last occasion. Yet, she proceeded to breach the very same Injunction Order for the second time (and for a long period of time). Again, she only has herself to blame if her reputation is adversely affected. D12. Critical health condition of the defendant’s son 80.By way of her 4th Affirmation, the defendant informed the Court that her elder son has sustained severe injuries in a car accident in Dongguan on 1 March 2024, and that he is now hospitalised in the Critical Care Unit of Gleneagles Hospital. It was said that she would need to be on his side to make medical decisions and accompany him during his final days. 81.This Court must emphasise that it has every sympathy for the defendant’s son. 82.However, since any custodial sentence would only be served after the determination of the appeal which will not be heard until 1 November 2024 (see section F below), the practical impact of this factor on sentencing is minimal, if any. I will therefore not treat this as a mitigating factor. Indeed, Mr Ng for the defendant also accepted at the hearing on 2 May 2024 that, strictly speaking, this is not a mitigating factor. D13. Personal and family circumstances 83.The defendant has drawn this Court’s attention to the fact that:
and submitted that if an order for committal is made, she would be robbed of her ability to take care of her husband and/or her mother during her sentence. It was also said that they would be heartbroken if she were sent to prison. 84.I do not accept that these matters would assist the defendant at all. As mentioned, this is the second time that she breached the Injunction Order. At the material time, she should have appreciated the serious consequences that such a second breach would bring. D14. Purging of contempt 85.In the defendant’s 4th Affirmation which was filed only 6 working days before the adjourned hearing on 2 May 2024, she, for the very first time, suggested that she would pay into Court a sum of RMB 7,575,198.04 (or an equivalent sum in Hong Kong Dollars) as an act of purging the contempt, pending further directions of the Court (“the Original Purging Proposal”). 86.However, in the same Affirmation, the defendant also had the following to say:
87.The Original Purging Proposal together with the above caveat had indeed caused this Court some concerns:
88.Against such background, this Court raised the query at the hearing on 2 May 2024 as to under what circumstances would the Court give a direction on payment out (other than by consent of the parties) without a ruling on the purposes of the usage of the subject funds. 89.Mr Ng for the defendant could not give any satisfactory answer at all apart from saying that:
90.This Court was not satisfied with the above answers because:
91.The plaintiff also raised the question as to why the payment into court should be limited to the sum as proposed by the defendant, rather than the full amount of RMB8,606,600.43 which had been transferred from the Current Account to third parties (including the defendant). 92.In addition, the plaintiff’s senior counsel stated that the plaintiff should not bear the burden of placing the issue of “legitimate business expenses” before the Court. It should be the defendant who should bear such a burden. For example, if the defendant pays the full sum back into Longford’s account, she may, if she desires, bring an action for reimbursement of any “legitimate business expenses” which she had paid for Longford. 93.The defendant’s counsel, having heard the Court’s concerns and the exchange between the Bench and the plaintiff’s senior counsel, asked for time to take further instructions from the defendant, and eventually came up with another proposal for the consideration of the Court. It was suggested that the defendant shall put the sum of RMB8,606,600.43 into an escrow account opened in the name of the plaintiff in an independent law firm (to be nominated by both parties) pending further directions of the Court or mutual consent of the parties (“the Revised Purging Proposal”). It was said that this proposal was different from the original one because the monies would be placed under the name of the plaintiff. 94.In substance, apart from the fact that the monies under the new proposal would be placed under the name of the plaintiff, the Revised Purging Proposal could not deal with the concerns raised by this Court:
95.Hence, the Revised Purging Proposal would only partly purge the contempt. 96.The plaintiff submitted that the purging proposals came in so late that it is doubtful as to whether the defendant was truly remorseful. I agree. However, it does not mean that the Court should disregard those proposals altogether. In my view, the Court should still take into account any purging of the contempt even if the contemnor is not remorseful at all. 97.On the other hand, this Court has not forgotten about the defendant’s alleged rationale of the Revised Purging Proposal – she was worried that if she returned the monies to the plaintiff/Longford, such monies would be under the control of the Lams, and there was no mechanism for the protection of such monies. 98.With respect, such explanation is simply unacceptable, for there is no evidence that the Lams will misappropriate the monies to be paid back by the defendant. The defendant’s explanation only demonstrated that she placed her own interest over the purging of her contempt. E. SENTENCING OPTIONS 99.On the basis of the various aggravating factors herein, the plaintiff suggested that the appropriate sentence in the present case should be custodial in nature, in the range of 1 to 3 months. 100.On the other hand, the defendant submitted that a fine should be imposed in the circumstances of the present case. 101.With greatest respect, in my view, it must be wrong to impose a fine only in the present case. 102.In the present circumstances where:
an immediate custodial sentence must be fully justified. It is so even if there is no risk of further breach on the part of the defendant (in other words, the sanction would only serve the purposes of punishing the defendant for breaching a court order and demonstrating to other litigants that the orders of the Court are to be obeyed). 103.Furthermore, while the defendant has proposed to partly purge the contempt, I hold the view that this would not have the effect of making an immediate custodial sentence inappropriate. At most, this factor would reduce the length of custodial sentence (see further below). 104.The conclusion of immediate custodial sentence may be tested against the sentencing decision reached by Chow J when the defendant breached the Injunction Order on the previous occasion. 105.In the Previous Contempt Proceedings, Chow J took the view that it was a borderline case on whether an order of imprisonment should be made. At the end, a fine in the total sum of $550,000 was imposed to mark the seriousness of the breaches of the Injunction Order and the defendant’s own undertaking respectively when:
106.It can be seen that the circumstances herein are much more serious. If the breach considered by Chow J was a borderline case on whether an order of imprisonment should be made, then the serious circumstances herein must have brought this case to the other side of the line. 107.As a matter of completeness, I should add that I have considered the Court of Appeal’s Judgment in Solar System International Company Limited v Unison-Watch Manufacturing Limited & Another (CACV 3523/2001, unreported, 7 February 2002), in which it had been held at [24] that:
108.It was urged upon this Court by the defendant’s counsel that, applying the above principle, an immediate custodial sentence would be inappropriate. 109.I disagree with this submission, as there is no doubt that the defendant’s breach of the Injunction Order was contemptuous. 110.Having considered all the circumstances of the case including the aforesaid aggravating factors, I am of the view that the appropriate starting point should be 6 weeks’ imprisonment. 111.The defendant has partly purged her contempt, in respect of which I would give a discount of 2 weeks. I would therefore sentence the defendant to 4 weeks’ imprisonment. 112.The defendant’s counsel argued that even if an order for committal is granted, the Court should suspend the sentence. 113.I should say right away that it is inappropriate to make any order of suspended sentence in the present case, because, as advocated by the defendant’s counsel, there is no risk that the defendant may breach the Injunction Order again, since (1) the Lams had caused a very large part of the balance in the Capital Account to be transferred to another account of Longford, and (2) the defendant has left her position as Longford’s CEO and has surrendered the legal representative chop. 114.In other words, there is no need to make sure that the defendant would comply with the Injunction Order in future. 115.Further, since it is certain that the defendant cannot breach the Injunction Order again, it is certain that the suspended sentence, if imposed, would not be activated. That means if the defendant is only visited with a suspended sentence, in effect she would be unpunished (apart from having to pay indemnity costs of these proceedings). It would therefore be meaningless for suspended sentence to be imposed herein. 116.Indeed, in Arboit v Koo Siu Ying (supra), it has been stated that:
117.Mr Ng for the defendant disagreed that a suspended sentence would have no utility in such circumstances at all. He highlighted the stigma which by virtue of a suspended sentence would attach to a successful businesswoman like the defendant. He also said that such stigma would be carried by the defendant for the rest of her life. Such submission is rejected. In my view, such stigma was brought by her conviction of contempt of court rather than by the suspended sentence. I should also emphasize that the sanction which this Court shall impose must be serious enough to give a clear signal to the society that court orders are meant to be obeyed. 118.Mr Ng further suggested that, if necessary, the Court may consider imposing a fine together with suspended sentence. I do not accept that it is appropriate to consider suspended sentence at all on the ground that it is meaningless as explained above, whether it is imposed together with a fine or not. Given the seriousness of the breaches concerned, I am of the firm view that immediate custodial sentence is the only appropriate option. F. SUSPENSION OF EXECUTION OF THE COMMITTAL ORDER 119.As aforesaid, the defendant has lodged an appeal against the Judgment, which will be heard by the Court of Appeal on 1 November 2024. 120.Hence, the defendant would have fully served her 4 weeks’ imprisonment by the time of the appeal. 121.For this reason alone, justice requires that the defendant should only be ordered to serve her sentence upon dismissal of her appeal. The plaintiff also fairly accepted that this approach should be taken. 122.The only remaining question is in what form the order should take – whether this Court should make an order to stay the execution of the court order, or to grant her bail pending appeal or any other form of order. 123.The legal principles governing stay of execution are trite. In Star Play Development Limited v Bess Fashion Management Co. Ltd. [2007] 5 HKC 84, it was held by Ma J (as his Lordship then was) that the existence of an arguable appeal (that is, one with reasonable prospect of success) is the minimum requirement before a court would even consider granting a stay. However exceptional the circumstances may be otherwise justifying a stay of execution, if there exist no arguable grounds of appeal, no stay will be granted. 124.However, as aforesaid, in my view, the short custodial sentence alone should be enough to justify a court order permitting the defendant to serve her sentence only upon dismissal of her pending appeal, irrespective of the merits of such an appeal. 125.Considered in this light, it is arguable that the above view does not sit well with the legal principles set out in Star Play Development Limited. 126.The better route therefore seems to be “bail pending appeal”. 127.However, this alternative route is not without its own difficulties. 128.As pointed out by the plaintiff’s senior counsel, Order 59 rule 20 of the Rules of the High Court (Cap.4A, Laws of Hong Kong) (“RHC”) provides that:
129.The above provisions stipulate the procedure for an appellant to apply to the Court of Appeal for bail pending appeal. However, those rules do not provide for any procedure by which the appellant may apply to the first instance Judge for a similar relief. It may therefore be argued that the first instance Judge does not have power to grant such bail. 130.However, I consider that Order 52 rule 7(1) of the RHC should be applicable. This rule provides that:
131.I have not lost sight of the fact that this rule is normally relied on by the court to make an order of “suspended sentence” in the sense that the custodial sentence would only be activated upon the contemnor breaching an earlier order of the court again or failing to comply with such an earlier order, as the case may be. Be that as it may, the wordings of the said rule, in my view, should be wide enough to provide power to the first instance Judge to grant bail pending appeal or an order to that effect. 132.Even if I were wrong in my interpretation of Order 52 rule 7(1) of the RHC, this Court must have inherent jurisdiction to make such an order. 133.The view that this Court has power to grant bail pending appeal is also supported by section 50 of the High Court Ordinance (Cap.4, Laws of Hong Kong) which provides that:
134.In my view, the emphasized part shows that the first instance judge must have power to grant bail. 135.My attention has been drawn to the case of Secretary for Justice v Yuen Oi Yee Lisa (HCMP 2390/2008, unreported, 27 October 2010) in which it had been held that the first instance Judge does not have power to postpone or stay the execution of an order of committal. However, the learned Judge in that case did not have assistance from the contemnor therein as she was unrepresented. In any event, I am not bound by that decision. 136.I hold that this is an appropriate case in which the execution of the Committal Order should be suspended pending the determination of the defendant’s appeal against the Judgment, on the condition that the defendant pays $500,000 into court. G. ORDER 137.To conclude, it is ordered that:
H. COSTS 138.I order that the defendant shall pay the plaintiff’s costs of these proceedings (including the hearing originally scheduled for 9 October 2023), to be taxed on indemnity basis if not agreed, with certificate for two counsel.
Ms Rachel Lam, SC leading Ms Eva Leung, instructed by Hugill & Ip, for the plaintiff Mr Lawrence KF Ng (2 May 2024 only) and Mr Howard YH Wong, instructed by P.C. Woo & Co, for the defendant [1] Unless otherwise stated, nomenclatures and abbreviations used in the Judgment handed down on 26 July 2022 shall be adopted in this Decision [2] Subject to the defendant’s fallback position which I will deal with at the end of this section [3] See [22] of the Judgment [4] [35] of the Judgment [5] [36] of the Judgment [6] [48] of the Judgment [7] See [53] and [54] of the Judgment [8] See [22] of the Judgment [9] See [36] of the Judgment [10] See [54] of the Judgment [11] The defendant’s skeleton submissions dated 4 October 2023 [12] [16] – [17] of the Judgment read: “It was submitted on Leong’s behalf that the respective ultimate destinations and purposes of these transfers are only relevant to the seriousness of the alleged breaches, but they have no bearing on the issue of liability for contempt, and hence irrelevant for present purposes. Ms Lam [for the plaintiff] accepted that this assertion is basically correct […]. In the light of the above, I will not go into the details of the usages of the funds transferred from the Capital Account at this stage.” [13] The defendant’s reply closing submissions dated 17 June 2022, at paragraph 62 [14] Judgment, [7] [15] See paragraph 96(2) of the plaintiff’s closing submissions dated 6 June 2022, which was undisputed in the defendant’s reply closing submissions [16] Judgment, [7(1)] [17] Judgment, [7(3)] [18] Judgment, [7(4)] [19] Trial Bundle [B2/871] and [B4/1196] [20] See [B2/871] [21] See [B3/1057] [22] See [B4/1337 – 1338, 1343 – 1346, 1348 – 1352 and 1355 – 1359] [23] Mr Ng for the defendant expressly acknowledged at the hearing that he was not asking this Court to make findings on the precise usages of the funds transferred away from the Capital Account [24] Paragraphs 70 and 77 of the defendant’s skeleton submission dated 4 October 2023 [25] Arboit v Koo Siu Ying (supra), at [3] [26] Judgment, at [77] – [85] [27] At paragraph 25(3) [28] Sentencing Judgment dated 25 September 2017, at [10(3)] [29] This Court notes regrettably that the defendant’s counsel saw fit to omit the latter part of the paragraph when they referred to this authority in paragraph 50 of their skeleton submissions dated 4 October 2023. Such latter part of paragraph 6 is apparently relevant in the circumstances of the present case. | ||||||||||||||||||||||||||||||||||||||||||||||||||
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