Chan Hin Cheung v. Kwan Yat Hung

HCMP 106/2024

[2025] HKCFI 703

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 106 OF 2024

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BETWEEN

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D E C I S I O N

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1.This is the sentencing hearing after the substantive hearing of the Originating Summons dated 19 January 2024 (“the OS”) issued by the plaintiff held on 28 August 2024. At the conclusion of the said hearing, I found that contempt was proved due to the breach of the order made by Lisa Wong J made in HCMP 1861/2022 dated 27 October 2023 (“the Order”) and I issued a warrant for the committal of the defendant: see the decision dated 28 August 2024 (“the Decision”).

2.In this decision, I shall adopt the abbreviations used in the Decision.

3.The defendant was absent at the hearing of the OS. Despite the warrant of arrest issued, his attendance at this sentencing hearing could not be secured. Having been satisfied that notice of this hearing has been duly served on him and he should be aware of this hearing, this court decided to proceed with the hearing in his absence.

4.It would be helpful to remind myself of the relevant sentencing principles relating to civil contempt at the outset. Lisa Wong J provided the following useful summary in Kot See For v Chan Leong Hang (unreported, HCMP 2323/2020, 7.5.2021) at §4:

(1) Court orders are made to be obeyed.

(2) Contempt of civil court orders is a serious matter.

(3) In sentencing, the court seeks to signal to litigants in general, not just the contemnor, that the orders of these courts are to be followed.

(4) The court has to balance between punishing the conduct in defiance of the court’s order and holding out the threat of future punishment as a means of securing the protection for which the order was in the first place made.

(5) As circumstances may vary greatly, the sentence for contempt may range from a fine to a term of imprisonment. Imprisonment should be regarded as a sanction of the last resort. Any custodial sentence should be as short as possible and consistent with the circumstances of the case.

(6) The court will consider if there are aggravating/mitigating factors and acts purging the contempt, if any. The following is an inexhaustive list of relevant factors:

(a) the nature of the order;

(b) the breach in question and the extent thereof;

(c) whether the contempt was contumacious or unintentional - the reasons, motives and state of mind of the contemnor;

(d) whether the contemnor appreciates the seriousness of the breach;

(e) whether the contempt has caused the plaintiff any irredeemable prejudice;

(f) whether the contemnor has been cooperative.

See Arboit v Koo Siu Ying (No 2) [2016] 3 HKLRD 154, [2]-[10] per Queeny Au-Yeung J; China Shanshui Cement Group Ltd v Zhang Caikui [2018] HKCFI 1192, [4] per Queeny Au-Yeung J; JSC BTA Bank v Solodchenko (No 2) [2012] 1 WLR 350, [45] per Jackson LJ.

5.Nothing has been heard from the defendant and no mitigating factor can be discerned. On the contrary, there are aggravating factors on the undisputed or indisputable facts.

6.I have read the Judgment of Lisa Wong J in [2023] HKCFI 2788 in which the Order was made. By way of background, the plaintiff and the defendant were appointed executors as well as beneficiaries in equal shares in the will of the Deceased.

7.Prior to her death, the Deceased ran a funeral service business at the Hung Hom Property. After her passing, the defendant took over the business and occupied the Hum Hom Property as if the business was his own enterprise excluding the plaintiff. The plaintiff was also denied access to the books and accounts of the business.

8.Further, Lisa Wong J found that the defendant was in egregious breach of his duty to keep a proper account of the administration of the Estate and be ready to produce the account when called upon to do so. The judge accepted that there was a wholesale disregard of repeated demands.

9.The judge also strongly disapproved of the defendant’s dilatory response to the proceedings brought against him in his capacity as an executor.

10.Lastly, the judge found that there was a breakdown of trust caused largely by the defendant’s breaches of duty in the administration of the Estate.

11.For these reasons, the judge acceded to the application of plaintiff and ordered, among other things, the removal of the defendant as an executor of the Estate.

12.Against this background, the defendant’s non-compliance with the Order appears to be lamentable. The plaintiff’s complaints that the defendant’s occupation of the Hung Hom Property and his failure to provide a proper account of the administration of the Estate were made long time ago and the judge found those complaints to be valid.

13.The defendant was represented by two counsel at the hearing. The defendant should have been explained those complaints against him and their legal basis. He should have come to his sense in the wake of the Order. He has no excuse not to comply with the Order.

14.The defendant’s total disregard of the Order is willful, cynical and inexcusable. Even up till the sentencing hearing, the defendant had not purged the contempt or even indicated his willingness or intention to do so.

15.Mr Hu, for the plaintiff, submits that the failure of the defendant to deliver vacant possession of the Hung Hom Property necessitated a further enforcement action. As a result, further delay was caused and additional legal costs were incurred and expended by the plaintiff.

16.Moreover, the failure to furnish an inventory and account of the Estate means that the assets of the Estate remain unaccounted for and still retained by the defendant unlawfully after the removal of him as one of the executors of the Estate. Mr Hu submits that the assets of the Estate have been dissipated. This is prejudicial to the beneficiaries of the Estate.

17.Mr Hu further stresses that the defendant has been uncooperative throughout and has refused to respond to the present proceedings. The defendant has never attempted to purge the contempt and, quite on the contrary, he continues to breach the Order blatantly.

18.Mr Hu draws the attention of this court to Willwin Development (Asia) Co Ltd v Wei Xing & Ors (unreported, HCMP 2946/2014, 16.11.2015) in which Madam Justice Bebe Chu said this at §4(h),

“In respect of a failure to comply with a mandatory order, the court has the power to commit a person indefinitely - “in cases where the contemnor obstructs the administration of justice by refusing to do something which he is required to do, that is to say something which he must do to enable the administration of justice to proceed, but it is not known how long he will remain in his obstructive and defiant frame of mind, it may well be that an indeterminate sentence is preferable. It enables the contemnor to apply for his release if he has had a change of heart; and it enables the court to review its own decision at any time.”

19.Mr Hu urges this court to pass an indefinite period of imprisonment on the defendant.

20.I agree with Mr Hu that those are indeed aggravating factors that this court should take into account in passing the sentence save that I am not convinced that the defendant’s failure to furnish an account can be equated with his dissipation of the assets of the Estate. I am not prepared to sentence the defendant on the basis that he has dissipated the assets of the Estate.

21.Yet, this breach has undoubtedly caused delay to the administration of the Estate and the interest of the beneficiaries must be prejudiced.

22.The defendant is plainly uncooperative and unrepentant. Nothing less than a custodial sentence can reflect sufficiently the gravity of this matter. It should be both punitive and coercive. That said, I do not agree that the defendant is obstructing the administration of justice and that I should impose an indeterminate imprisonment sentence on him.

23.Having considered all the circumstances, I conclude that the appropriate sentence would be 3 months’ imprisonment. The defendant should also be ordered to pay the plaintiff’s costs of and occasioned by these contempt proceedings on an indemnity basis, to be taxed if not agreed.

24.It remains for me to thank Mr Hu for his assistance.

Mr Derek Hu, instructed by SSW & Associates, for the plaintiff

The defendant was not represented and did not appear