Read the full judgment text of HCCL 000135/1998 on BabelCite. This HCCL judgment was delivered on 21 September 1998 before The Hon Mr Justice Stone.
Commercial law – committal of company directors for civil contempt – failure to comply with mandatory interlocutory order – Rules of the High Court Order 45 rule 5(1) – routes to committal of director (Order 45 and aiding/abetting) – whether wilfulness required – personal service of order on director – impossibility as defence – time window for contempt. Charter-party of vessel 'AL DHABBIYAH' for gasoil from Onsan to Chinese ports – cargo released against Letter of Indemnity – arrest of sister-ship 'DIYYINAH' at Inchon by Ssangyong (Hong Kong) Co. Ltd. – non-compliance with Order of Yam, J. of 16 June 1998 requiring counter-security of US$5,000,000 or bail by 4:00 p.m. on 23 June 1998 and US$50,000 on account of legal fees. Whether Order 45 rule 5 requires wilfulness of director for committal – court followed Hong Kong Court of Appeal in Cartier and Pappadis and held that no such requirement of wilfulness is imposed; personal service suffices and evidential burden then shifts to director to explain non-compliance. Whether impossibility is a defence – not made out; audited accounts showed unencumbered vessels and substantial director balances; later mortgaging to Credit Lyonnais occurred after the compliance deadline; unaudited management accounts contained very substantial errors. Whether contempt is confined to period between service and deadline – rejected; the court may look at totality of conduct up to the date of the Notice of Motion. Admitted contempt in respect of US$50,000 (with payment in fact made by 19 September 1998); contempt in respect of US$5,000,000 counter-security established. Outcome: each director fined HK$100,000 payable within 14 days; indemnity costs to the Plaintiff; liberty to apply.
Legal issues: Whether Order 45 rule 5 RHC requires wilfulness to commit a director for the company's contempt · Whether impossibility is a defence to civil contempt for non-compliance with the order · Whether contempt is confined to the period between service and the deadline stated in the order
Outcome: Contempt established against both Respondent directors; each fined HK$100,000, payable within 14 days, with costs to the Plaintiff on an indemnity basis. Admitted contempt in respect of the US$50,000 sum and established contempt in respect of the US$5,000,000 counter-security.
Cited by 2 cases