Lam Siu Sun Dennis and Another v. Tam Man Chun and Another
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HCMP 1092/2024 [2025] HKCFI 6197 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO 1092 OF 2024 ____________
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_______________ JUDGMENT _______________ A. INTRODUCTION 1.Contempt of court is a serious matter. It is important to the due administration of justice that judgments and orders of the court are to be obeyed, and that the court must have necessary powers to compel compliance with its judgments and orders. Such powers include committing the party in breach to prison, imposing a fine, and other sanctions. 2.At the same time, because a finding of contempt carries serious consequences to the subject, safeguards both as a matter of law and procedure have been developed and are rigorously applied. 3.In “civil contempt” proceedings, that is, failure to comply with interlocutory or procedural orders made in the course of civil proceedings, it is well-established that a “three-stage test” applies: it is necessary to (1) construe the relevant court order to ascertain its meaning and operation; (2) determine whether the defendant is has in fact complied with the order as so construed, and (3) consider whether any failure to comply was accompanied by a state of mind necessary to establish punishable contempt: Kao, Lee & Yip v Koo Hoi Yan (2009) HKCFAR 830 at 846B-C, Sir Gerard Brennan NPJ. The burden of proof is on the applicant, and the criminal standard of proof applies. 4.Rules of the High Court, Order 45 and Order 52, set out the relevant procedures applicable to contempt proceedings. It is equally well-established that these rules are strictly applied: see, for example, Citybase Property Management Limited v Kam Kyun Tak (No. 1) [2003] 2 HKC 98 at [14], Ma J (as he then was); Trends Trade Hong Kong Ltd v Arthur Shevchenko [2019] HKCFI 2936 at [39]-[48], Coleman J; Hong Kong Civil Procedure 2026 §52/0/13. 5.In the present case, the Plaintiffs issued an Originating Summons pursuant to O. 52 r. 3 on 26 June 2024 seeking to commit the Defendants to prison for their alleged failure to comply with an order for specific discovery made by Master Alexander Tang on 8 March 2024 (“SD Order”) in the underlying action between the parties, HCA 844 of 2019, and for allegedly making false statements in their affirmations filed on 5 April 2024 in purported compliance with the SD Order. 6.This court heard the Originating Summons over four full hearing days. Four witnesses gave oral evidence with three of them subject to extensive cross-examination. Almost 4,000 pages of documents in 14 lever arch files, together with several files of written submissions and over 30 authorities, were produced before the court. A reasonable member of the public might think that the case involved some highly important and complex questions of law or extremely serious misconduct. However, it is nothing of the kind. Once the case is striped of immaterial details, it is in fact a relatively simple case. 7.In my judgment, the Originating Summons must be dismissed for two reasons. 8.First, the ex parte leave obtained by the Plaintiffs to commence committal proceedings could only have been given in respect of non-compliance with the SD Order, but that order did not contain the requisite penal notice. There is no reason to dispense with the penal notice requirement in this case. The Originating Summons falls to be dismissed for such procedural defect. 9.Secondly, and independently, the alleged non-compliance was trivial and do not justify proceedings for committal. The application is oppressive and must be dismissed on that ground as well. 10.Section B of this judgment sets out the material facts, followed by detailed discussions of the two grounds in Sections C and D. B. THE FACTS 11.For the purposes of this judgment, it suffices to set out the undisputed facts in [12] to [39] below which are substantially adopted from the List of Agreed Facts provided by the parties for the trial. 12.The 1st Plaintiff (“Dennis”), the 2nd Plaintiff, (“Moses”), the 1st Defendant (“Raymond”), and the 2nd Defendant (“Wilfred”) are the 1st Plaintiff, 2nd Plaintiff, 1st Defendant, and the 2nd Defendant in HCA 844 of 2019 (“2019 Action”) respectively. Yu Pui Man (“Carroll”), Raymond’s long time secretary, Wise Quest Limited (“Wise Quest”) and Gao Ronglin, wife of Raymond, are the 3rd Defendant, 5th Defendant and 7th Defendant therein respectively. 13.In another action, HCA No. 2413 of 2018 (“2018 Action”), Dennis, Moses, Raymond and Wilfred are the 1st Plaintiff, 2nd Plaintiff, 6th Defendant and 2nd Defendant respectively. 14.At all material times, Dennis and Moses were partners of Messrs. Li, Wong, Lam & Co, which later became Messrs. Li, Wong Lam & W. I. Cheung (“Firm”). Raymond joined the Firm in around 2001 and Wilfred as associate solicitor in 2010. In 2016, Wilfred became partner. 15.On 15 February 2019, the Firm was dissolved. The 2018 and 2019 Actions both concerned disputes among the parties in the affairs of the Firm. 16.On or around 13 May 2010, Raymond and Wilfred signed the account opening document of bank account no. 607-131067-888 (“Joint Account”) at The Hongkong and Shanghai Banking Corporation Limited (“HSBC”). According to the letter from HSBC to Messrs. Tang, Leung, Li & Tsang (“TLLT”) acting for Raymond and Wilfred dated 14 October 2024, the Joint Account has been registered for eStatement service and no more paper statements will be posted after the eStatement service registration. 17.On 8 March 2024, Master Alexander Tang made the SD Order in the 2019 Action, ordering Raymond and Wilfred to provide specific discovery as follows:
18.The SD Order, when first made, was not endorsed with a penal notice.[1] 19.By two letters dated 19 March 2024, TLLT requested HSBC to provide documents in relation to the Joint Account, and Wise Quest’s bank account no. 033-741588-838 (“Wise Quest Account”). 20.By letter from HSBC dated 21 March 2024 with a receipt chop of TLLT dated 25 March 2024, HSBC advised that it could not comply with TLLT’s request in relation to the Joint Account because of the reason “Customer’s authorization is required”. 21.By letter from HSBC dated 25 March 2024 with a receipt chop of TLLT dated 5 April 2024, HSBC advised that it was unable to process the request in relation to the Wise Quest Account due to “Signature and debit account number are missing on the instruction.” 22.On 5 April 2024, Raymond filed and served the 3rd Affirmation of Tam Man Chun (“Tam 3rd”). It was stated in paragraphs 3 to 5 of Tam 3rd that:
23.On 5 April 2024, Wilfred filed his affirmation (“Chiu 1st”) and states at paragraph 2 that:
24.By letter dated 16 May 2024, TLLT sent monthly statements of the Joint Account from 12 November 2012 to 12 March 2019 to Dennis and Moses’ solicitors Messrs. Lee Wong & Lam (“LWL”). 25.By letter dated 23 May 2024, TLLT wrote to HSBC reciting the terms of the SD Order and enquired “whether, in addition to the monthly bank statements of the Account for the period June 2010 to March 2019 received, the other requested documents are available, and if so when can we expect to receive them”. On the same day, TLLT wrote to LWL and stated that “we note that the ‘account documents’ may not be in complete fulfilment of the Court Order, we have therefore written to HSBC today to clarify and check the availability of any other documents.” 26.On 27 May 2024, leave was granted by consent to insert a penal notice in the SD Order. 27.On 4 June 2024, the SD Order, endorsed with a penal notice (“Amended Order”), was served on TLLT. 28.On 13 June 2024, Dennis and Moses made an ex parte application for leave to apply for committal order against Raymond and Wilfred. The application was supported by a Statement dated 13 June 2024 pursuant to O. 52 r. 2(2), verified by Moses’ 9th affidavit dated 13 June 2024. Leave to commence committal proceedings was granted on paper on 21 June 2024. 29.On 26 June 2024, Dennis and Moses commenced the present proceedings by Originating Summons against Raymond and Wilfred. 30.On 9 July 2024, Dennis and Moses filed a Summons in the 2019 Action to request discovery of the Requested Documents (1) and (2) from HSBC (“HSBC Summons”). 31.By a letter dated 16 July 2024, HSBC wrote to inform LWL that it would provide the requested documents within 28 days from the date of service of the order; as to requests for any documents relating to a particular transaction, they should be underlined on the bank statements provided and would be provided (if available) in batched with the first batch be provided within 28 days of the request. 32.On 22 July 2024, TLLT received a letter from HSBC in relation to the Joint Account stating that the “processing time need at least 3 months and will mail out the doc separately”. 33.On 23 July 2024, TLLT wrote to HSBC to ascertain what further documents it would provide for the Joint Account. 34.On 2 August 2024, Registrar Kwang made an order pursuant to the HSBC Summons (“HSBC Order”). 35.By letters dated 13 August 2024, 16 August 2024, 20 August 2024, 28 August 2024, 2 September 2024, 9 September 2024, 16 September 2024, 23 September 2024, 27 September 2024, 2 October 2024, 8 October 2024, and 15 October 2024, TLLT provided transaction records of the Joint Account to LWL. 36.By letter dated 26 August 2024, HSBC provided documents of the Joint Account and the Wise Quest Account to LWL pursuant to the HSBC Order. 37.By letter dated 28 August 2024, LWL requested HSBC to provide LWL with the cheque copies, transaction details, records and/or documents in connection with certain items of the Wise Quest Account. 38.By letter dated 16 September 2024, HSBC provided LWL with account transaction documents of the Wise Quest Account. 39.It is not disputed that by the time of the hearing, the Defendants have not provided to the Plaintiffs: (i) the account opening form of the Joint Account, and (ii) the bank documents in respect of the Wise Quest Account, both of which the Plaintiffs have obtained directly from HSBC. The Plaintiffs also complain that the Defendants have failed to produce documents in relation to 4 cheque deposits and withdrawals, and 1 ATM withdrawal. It is not suggested that any of these 5 transactions gave rise to any issues of importance in the 2019 Action. C. ORIGINATING SUMMONS DEFECTIVE 40.By the Originating Summons, the Plaintiffs sought against the Defendants orders for committal on the following grounds:-
41.The false statements are said to be Tam 3rd paragraph 5 ([22] above) and Chiu 1st paragraph 2 ([23] above). 42.Counsel for both sides agree that O. 45 r. 5 applies in this case. That rule materially provides as follows:
43.In respect of an order requiring a person to do an act, O. 45 r.7 imposes the following requirements:
44.It has been held that the Court may dispense with the requirement of service of the order under O.45 r.7(7), which would include the penal notice, but only in rare or very exceptional circumstances: Hong Kong Civil Procedure 2026 §52/2/9; AXA China Region Insurance Co Ltd v Li Yu Ping Ellen [2002] 3 HKC 339 CA at [36]-[37]; Citybase at [14(2)]; Cheung Hing v Wong Chor Cheung, HCMP 1828/2011, 7 Feb 2013, Anthony Chan J (as he then was) at [49]. 45.Moreover, O. 52 r.2 requires the party seeking to commence committal proceedings to obtain leave of the Court:
46.Once leave to make an application for committal has been obtained, the application must be made by originating summons to a judge: O. 52 r. 3(1). O. 52 r. 3(1A) requires that:
47.O. 52 r. 6(3) is also relevant:
48.It would be useful to recap the material dates. The SD Order was made on 8 March 2024, giving the Defendants 28 days to comply. That deadline fell on 5 April 2024 (“1st Deadline”). It will be recalled that it was on that date that Raymond and Wilfred made their affirmations in purported compliance with the SD Order, and which are said to contain the false statements. 49.On 27 May 2024, the Court granted leave to amend the SD Order to insert a penal notice, but otherwise the terms of the SD Order remained the same. The penal notice was in the following (standard) terms:[2]
50.The Amended Order was served on TLLT on 4 June 2024. Counsel for the parties accepted (in my view correctly) that the penal notice, read together with paragraphs 1 and 3 of the SD Order, effectively extended the deadline for compliance to 28 days after service of the Amended Order, ie. 2 July 2024 (“2nd Deadline”).[3] 51.On 13 June 2024, the Plaintiff applied ex parte for leave to commence committal proceedings. The application was supported by a Statement, verified by affidavit, as required under O. 52 r. 2. Leave was granted on paper on 21 June 2024. That was before the 2nd Deadline had expired. 52.The Plaintiffs issued the present Originating Summons on 26 June 2024. That was also prior to the expiry of the 2nd Deadline. 53.In the Originating Summons, the Plaintiffs sought the Defendants’ committal for contempt due to non-compliance with the SD Order by 5 April 2024:
54.Counsel for the Plaintiffs accepted (rightly in my view) that the ex parte leave to commence committal proceedings could only have been granted in respect of breach of the SD Order that had already occurred as of the date of the Statement, ie. 13 June 2024. That must be the case because it was on the basis of the Statement that leave to commence committal proceedings had been granted. 55.However, the SD Order was not endorsed with a penal notice. O.45 r.7(4) was not complied with. Counsel for the Plaintiffs did not advance any reason as to why the penal notice requirement could be dispense with in this case; nor do I see any reason to do so. No leave has been sought by the Plaintiffs at the hearing to rely on breach of the Amended Order. 56.Moses in his oral evidence accepted that the Plaintiffs had “jumped the gun” in commencing the committal proceedings, because they thought the Defendants would not comply with the Amended Order by the 2nd Deadline. I have not been referred to any authority which suggests that one could apply for leave to commence committal proceedings in anticipation of a prospective breach of an order for doing an act. In any event, the Statement and Originating Summons did not rely on any breach of the Amended Order. 57.It is not overlooked that the Statement referred to leave being granted to insert the penal notice on the SD Order on 27 May 2024, and that the Amended Order was served on 4 June 2024. However, the judge was not alerted to the extended time for compliance under the Amended Order to 2 July 2024. It is highly doubtful that leave to commence committal proceedings would have been granted had that point been made clear in the Statement. 58.In my judgment, the Originating Summons is defective for failure to comply with the penal notice requirement, and is thus misconceived. It falls to be dismissed for that reason alone. D. COMMITTAL INAPPROPRIATE AND OPPRESSIVE 59.Secondly, in my judgment this is obviously not a suitable case for committal proceedings. 60.It is unnecessary to go into fine analysis as to whether the Defendants had fully complied with the SD Order. The Plaintiffs accept that this case is primarily concerned with whether the Defendants had power over the Requested Documents, it being accepted that whether they had had those documents in their possession or custody is disputed. The evidence is that the Defendants did through TLLT apply to HSBC for the bank documents on 19 March 2024 and thereafter did correspond with HSBC about the remaining document request. 61.It may be said that the Defendants knew that they had not obtained all the documents requested from HSBC by 5 April 2024, and in that sense failed to comply with the SD Order to the letter. It may also be said that they ought to have been more anxious in chasing the bank for the outstanding documents, or ought to have applied for an extension of time to comply with the SD Order. But even if it is to be assumed that the Defendants could have been more proactive in their efforts to obtain the documents, and that the documents could have been obtained more speedily as a result, such lack of diligence would not have warranted compulsion or punishment by committal proceedings. The Plaintiffs do not suggest that the alleged non-compliance has caused any serious prejudice to the resolution of any issue in the 2019 Action. 62.As to the alleged false statements, I reject the Plaintiffs’ contention that the statements were false in the sense that the Defendants knew or were reckless as to whether the statements were false. 63.In my judgment, Tam 3rd paragraph 5 is no more than a careless mistake on the part of Raymond. In respect of the statement in Chiu 1st paragraph 2, I am far from being satisfied that Wilfred’s statement that he had never had possession or custody of the Joint Account statements was false. 64.Given the circumstances of this case, the Plaintiffs might have applied for an order to compel the Defendants to comply fully and more timeously with their disclosure obligations pursuant to the SD Order, although I am skeptical whether the Plaintiffs would have even obtained an unless order. 65.In any case, there are alternative methods of seeking compliance, and there is plainly no need to resort to committal proceedings. 66.Moses in his oral evidence claimed that the Plaintiffs had considered applying to court for an unless order or some other (unspecified) options to compel compliance, but decided against doing so because they thought that anything short of committal would not be effective to compel the Defendants to comply with their discovery obligations. I do not accept that evidence. It seems to me obvious that any reasonable lawyer with experience in litigation would have concluded that pursuing committal proceedings in the circumstances of this case would be wholly excessive and oppressive. 67.In this connection, it is noteworthy that the Plaintiffs’ written closing submissions belatedly recognised the trivial nature of the application. In relation to the issue of penalties, the Plaintiffs submitted that:
68.It is difficult to see how the Plaintiffs could reasonably justify bringing this committal application and prosecuting it to the bitter end, when ultimately the primary relief sought is costs even if all the alleged contempt were established. 69.I will dismiss the Originating Summons for this second, independent, reason. E. COSTS AND DISPOSAL 70.Counsel agreed that costs should follow the event. 71.As to scale of costs, both counsel submitted that in the event that their side prevailed, costs should be taxed on the indemnity basis. Neither counsel suggested that costs should be taxed on any other basis in the event that they failed. 72.In my view, costs should be taxed on the indemnity basis for the reason that the Originating Summons was defective and misconceived, and also because bringing committal proceedings in the circumstances of this case was plainly excessive and oppressive. 73.The Defendants have issued a summons on 28 October 2025 to set aside the ex parte leave granted to bring committal proceedings. The summons could have been issued much earlier; it is for all practical purposes redundant. It is unnecessary to make a separate order in relation to the Defendants’ summons, and I make no order. 74.Accordingly, the Originating Summons is dismissed with costs to the Defendants, to be taxed on the indemnity basis.
Mr. Leon HO, instructed by Lee, Wong & Lam, for the 1st and 2nd Plaintiffs Ms. LAN, Gekko S.Y. and Ms. TANG, Clare Yee Yan, instructed by H. Y. Leung & Co. LLP, for the 1st and 2nd Defendants [1] No issue arises in relation to the service of the SD Order. [2] See Hong Kong Civil Procedure 2026 para. 45/7/6. The usual practice is to print the Penal Notice in red on the first page of the order. [3] Endorsement of a penal notice on an order does not have any retrospective effect: Trends, at [48]. The Plaintiffs did not take heed of the advice of Coleman J at [75] that “… in the circumstances of a mandatory order, if a penal notice is to be endorsed after the time for original compliance set by that order, it would seem to me to be at least good practice for a further extended deadline to be set by the order with the penal notice endorsed on it.” [4] Which counsel submitted should be “around HK$10,000”. |
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