Secretary for Justice v. Man’s (Asia) Development Ltd and Another

HCMP 128/2025

[2026] HKCFI 4877

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 128 OF 2025

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SENTENCE FOR CONTEMPT

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Introduction

1.This decision should be read together with my decision handed down on 13 February 2026 (“the Decision”) (see [2026] HKCFI 774), by which I found the 1^st Defendant and 2^nd Defendant to be in contempt of court for failing to comply with the Order of DHCJ Phoebe Man dated 2 November 2023. For ease of reference and consistency, I shall adopt the same definitions and abbreviations used in the Decision.

2.Today is the adjourned hearing fixed to hear the parties’ submissions on penalty and consequential orders to be made in respect of Ds’ contempt.

3.By Consent Summons dated 23 July 2026, parties agreed for leave be granted to D2 to file the Third Affirmation of Chan Wai Leung Jacky (“Chan 3^rd”) for the purposes of the appropriate penalty and consequential orders following the Decision. An order in terms of the Consent Summons was made on 27 July 2026. Chan 3^rd was filed on 4 August 2026.

4.Ms Lui, Senior Government Counsel, appears on behalf of SJ and Mr Wong, counsel, appears on behalf of D2.

Applicable Principles

5.The applicable sentencing principles in relation to civil contempt of court are not disputed and were set out in Arboit v Koo Siu Ying (No 2) [2016] 3 HKLRD 154 by Queeny Au-Yeung J at §§2-10 as follows:

(1)  The starting-point is to acknowledge that contempt of civil court orders is a serious matter and that court orders are made to be obeyed. A prime consideration of the court in sentencing contempt is to signal importance of demonstrating to litigants that the orders of these courts are to be obeyed. By “litigants”, it is clearly referring to litigants in general and not just the contemnor himself;

(2)  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. The court has to balance the 2 objects;

(3)  The sentence for contempt may range from a fine to a term of imprisonment;

(4)  Imprisonment should be regarded as a sanction of the last resort. Any custodial sentence should be as short as possible consistent with the circumstances of the case;

(5)  The court may suspend a term of imprisonment for such period or on such terms as the court deems fit. This is an “absolute discretion” but it would be difficult to think of circumstances where a suspended order should be made when nothing further remains to be done to comply with the order;

(6)  The court will consider if there are: (a) aggravating factors; (b) mitigating factors; and (c) acts to purge the contempt;

(7)  Relevant factors (which are not exhaustive) include:

(a)  The nature of the order and breach in question, and the extent of the breach;

(b)  Whether the contempt was contumacious or unintentional, the reasons, motives and state of mind;

(c)  Whether the claimant has been prejudiced by virtue of the contempt and whether the prejudice is capable of remedy;

(d)  Whether the contemnor appreciates the seriousness of the deliberate breach;

(e)  Whether the contemnor has cooperated; and

(8)  As circumstances of contempt vary greatly, there is little mileage to be gained from the citation of other cases on sentence.

6.Whilst a company cannot be sentenced to imprisonment for contempt, if the facts warrant it, a fine may be imposed: see R v Lo Sau King & Ors (1956) 40 HKLR 26 at 30 per Hogan CJ.

Extent of breach, the context in which the contempt has arisen and whether the contempt was intentional

7.In the present case, the contempt involves a breach of court order requiring D1 to demolish and remove the Structures(s) and to deliver vacant possession of the Government Lands to SJ on or before the Deadline (31 July 2024).

8.As found by me in the Decision, it was within the knowledge and power of D2 to ensure compliance with the Order by D1 and yet there was a wilful failure by D2 to take reasonable steps to ensure compliance with the Order by D1. D1 failed to comply with the Order which was accompanied by the necessary mens rea. It has not been disputed that up to the date of the Hearing, there has been no compliance with the Order. There is no evidence before me to suggest that there has been any material change of circumstances between the Hearing and today.

9.In the Decision, I had noted the various asserted difficulties faced by D1 in the process of demolition and removal of the Structures(s), but I found ultimately, the main difficulty was whilst having engaged AP, no application was made for approval of the demolition works to the Building Department. In particular, I found that D2 failed to take reasonable steps to supervise AP to ensure that he was following the Time Programme to apply for approval of the demolition works, which would have led to compliance with the Order in a lawful and timely manner. If I can put it more colloquially, as a director of D1, he failed to “see to it” that D1 would comply with the Order. As already mentioned, I held that there was a wilful failure by D2 to take reasonable steps to ensure strict compliance with the Order by D1. See the Decision, §§43, 45-50. Thus, it is not open to Mr Wong to submit that the contempt was unintentional by relying on the various difficulties faced by D1 in the demolition of the Structures(s). With no undue disrespect to Mr Wong, there is wholly no basis to downplay the failures of D2 as found by me as just a “case of mere inactivity” and that “D2 just failed to obtain the relevant Government approval and ensure the compliance within the time limit.”

10.However, I would accept Mr Wong’s submissions on the state of mind of D2 and willingness to comply with the Order as demonstrated by the attempts to comply with the Order up to and after the Deadline in view of the alleged difficulties faced by D1 and take that into consideration. I also take notice that D2 has not evaded all responsibility such as by not attending these proceedings. I do not find D2 has displayed contumelious or recalcitrant conduct.

Acts to purge the contempt

11.As mentioned, up to date of the Hearing, there has not been compliance with the Order. I accept that given D2 is no longer a director of D1 (which was wound up by a court order dated 5 March 2025), he is no longer able to purge the contempt despite his assertion in Chan 3^rd that he is more than willing to do so. Mr Wong urged me to take into consideration the efforts of D2, to remove the squatter house and rooftop structures in August 2024 at his own expense, whilst leaving the columns and beams since approval from the government departments had not been obtained and would have imposed risks to workers and road users nearby, and the correspondence with DLO as demonstrating D2 having attempted to and partially purged the contempt.

12.However, the fact that D2 is no longer able to and had not completely purged the contempt when he was still in a position to do so in all the months leading up to the winding-up of D1, coupled with the fact that D1 is in liquidation and there is no realistic prospect of purging the contempt, substantial and irremediable prejudice has been caused to SJ due to Ds’ contempt. The Government and the public purse will now have to shoulder the expense of demolishing the Structures(s) and there can be no realistic recovery from D1 of the loss of use and/or income as a result of the failure to give vacant possession of the Government Lands. Mr Wong had submitted that there is no evidence of the financial position of D1 and what steps SJ took to seek vacant possession from the liquidators of D1, but it seems to be wholly unrealistic to assume D1 can purge the contempt. There is some basis for Ms Lui’s submissions that D2 should not be allowed to shift the blame to SJ for the consequences flowing from Ds’ contempt.

13.The past failure and the now inability to purge the contempt should be an aggravating factor, or at the very least, not a mitigating factor.

D2 say that he is remorseful

14.In Chan 3^rd, D2 says that he understands that court orders are serious matters and are made to be obeyed. He further says that he is remorseful for his actions. Mr Wong from the Bar table stated that D2 is willing to openly apologize in court.

15.Mr Wong relied on the case of Sino Wood Investment Limited v Wong Kam Yin (unrep) HCA 307/2002, 20 January 2006 per DHCJ Saunders at §10 that by apologizing for the contemptuous conduct the contempt is purged. I think that the learned judge’s dicta has to be read in the context of whether a person found to be in contempt would be heard by the court other than in an application to purge the complaint, but cannot be read so broadly that a mere apology, without compliance or remedying any breach, can purge the contempt. Nonetheless, I will take into account D2’s remorse.

Personal circumstances of D2

16.In Chan 3^rd, it is stated that since 2016, D2 was diagnosed with mix anxiety and depressive disorder. He has consulted a psychiatrist regularly. He further states that the involvement in multiple civil proceedings since becoming a director of D1 had contributed to the anxiety and depressive disorder. I do not believe D2’s conditions were entirely caused by these proceedings. Besides, as accepted by Mr Wong, the personal circumstances of D2 weigh little in mitigation in the present case.

Appropriate Sentence and Consequential Orders

17.In Ms Lui’s first set of submissions on the appropriate sentence, she referred to the case of The Incorporated Owners of Long Mansion v Good Choice Industrial Limited & Ors (unrep) HCMP 2138/2013, 26 October 2016 and 16 December 2016. In that case, by a Partial Award, which the court gave leave to enforce, a company which owned the subject property (the 1^st respondent) was required to remove and demolish certain structures and reinstate the external walls and sewage pipes to the satisfaction of the Building Authority and in compliance with the regulations under the Building Ordinance. The order was not complied with within the time stipulated and the respondents (the 1^st respondent, the directors of the company as the 2^nd respondent and 3^rd respondent and the property manager as the 4^th respondent) were committed for contempt. The court found the first 3 respondents guilty of contempt as they had failed to comply with the orders within time but the 4^th respondent was held not to be personally liable for contempt because he did not have sufficient control to secure compliance. In sentencing, bearing in mind the unreserved apology to the court, there being no possibility of committing the same breach, the conscious efforts to try to comply with the court order and purging of the contempt albeit 2 years and 10 months out of time, the court took the view that a custodial sentence would serve no useful purpose and instead each respondent was fined a total of HK$80,000. Parties agreed that they would bear the costs of the applicant in the total sum of HK$600,000.  Mr Wong submitted that this case bears similarity with the present case where D2 had made conscious efforts to try to comply with the Order but accepted that contempt has not been purged in the present case.

18.Upon my request for further assistance on sentencing for contempt of court by non-compliance with court orders for removal of structures and/or giving of vacant possession, my attention has been drawn to a number of other previous decisions in the Further Submissions for SJ on Appropriate Penalty. The Hong Kong authorities cited include: Wong Chi Hung v Tao Kin Lun, the Manager of Nam Ti Tai [2023] HKDC 1571; 荃灣富麗花園業主立案法團 v張世德所經營香港仔一品魚蛋王 & Ors [2019] HKLdT 26; Cheung Kam Biu & Ors v 何華蘭 [2021] HKDC 1013; and The Incorporated Owners of Jing Hui Garden v Ng Kei Sang [2018] 2 HKC 457. I am grateful to the industry of Ms Lui who had also provided a helpful summary of all the cases cited. However, it is evident that the circumstances of contempt (in terms of culpability of the defendant, the explanations/excuses proffered for the breach of order, whether there were previous breaches, the length of time of non-compliance, whether the contempt was subsequently purged and speed at which it was purged etc.) vary greatly from case to case such that ultimately, I did not find those cases and the sentence imposed to be immensely helpful.

19.Not overlooking the first principle that court orders are made to be obeyed and that they are not guidelines to be ignored or paid lip service to at the behest of the parties and it is fundamental to the rule of law that orders of the court are obeyed (see e.g. Secretary for Justice v Chan Oi Yau Riyo [2020] 3 HKLRD 494 at §§57-58 per Coleman J), but also that imprisonment is regarded as a sanction of the last resort and the preference to avoid a sentence of imprisonment if other means of sanction appear to be sufficient and proportionate (see ibid at §60), it seems to me that in the circumstances of this case, a substantial penalty and costs order on an indemnity basis would be a sufficient and proportionate sentence to punish Ds’ conduct in defiance of the court’s order.

20.Whilst a term of imprisonment would not have been inappropriate in the present case and was seriously considered by me, given that D1 is in liquidation and D2 is no longer in control of D1, the coercive function of sentence as a means to secure the protection which the order was primarily there to do is spent: see Arboit, §45. I see no real useful purpose being served by a term of imprisonment for D2 other than possibly emphasizing for the benefit of others the importance of observance of court orders. However, that can equally be done by stating firmly in this decision that given the wilful failure to comply with the court’s order together with the aggravating factors identified by me, a sentence of imprisonment would not have been inappropriate: see Excel Nobel Development Ltd & Ors v Wah Nam Group Ltd & Ors [2001] 4 HKC 148 at 162B-F per Rogers VP.

21.Furthermore, although D1 is in liquidation and any fine imposed on D1 may well be nugatory, I note that this has not prevented the court from ordering a fine considered appropriate in the circumstances: see e.g. Aqua-Leisure Industries Inc & Anor v Aqua Splash Limited (unrep) HCA 18928/1998, 14 December 2001 at §6 where DHCJ To (as he then was) imposed a fine of HK$300,000 against the defendant which had been formally wound up.

22.Having regard to all the circumstances of the present case, the aggravating factors and the punitive function to be served by the sentence, I consider that a fine of HK$500,000 against each D1 and D2 is appropriate.

23.As for costs, it is not disputed that the usual order on successful committal procedures is for costs to follow the event, usually ordered to be paid on an indemnity basis: see Secretary for Justice v Yuen Oi Yee Lisa [2011] 1 HKC 346 at §36 referring to the observations of Rogers VP in Lau Yee Ching v Wong Tak Kwong (unrep) CACV 385/2005, 3 March 2006 at §§5-6.

24.I agree with Mr Wong’s submissions that although D1 had maintained a neutral position in these proceedings as indicated shortly before the Hearing, there is no reason why D1 should not be liable for costs.

25.I will order Ds to pay SJ’s costs of these proceedings, jointly and severally, to be summarily assessed by me.

26.Adopting a broadbrush approach and taking into consideration Mr Wong’s objections, I have summarily assessed SJ’s costs at HK$180,000 payable forthwith.

27.I will now hear the parties on consequential orders.

Ms Shirley Lui, Senior Government Counsel of Department of Justice, for the Plaintiff

Mr Kelvin Wong instructed by Messrs. Ho Kan Lawyers, for the 2^nd Defendant

The 1^st Defendant was not represented and did not appear