Re Wing Fai Construction Co Ltd

CACV 244/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 244 OF 2004

(ON APPEAL FROM HCCW 735 OF 2002 )

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Before: Hon. Tang V-P, Yeung and Yuen JJA in Court

Date of hearing: 15 May 2008

Date of Judgment: 6 June 2008

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JUDGMENT

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Hon. Tang V-P:

1.I agree with the judgment of Yuen J.A. and have nothing to add.

Hon Yeung JA:

2.I agree with the judgment of Yuen JA and have nothing to add.

Hon Yuen JA:

3.This is an application by the Liquidator for leave to appeal to the Court of Final Appeal from the judgment of this court given on 18 August 2006 and varied on 12 October 2007.  The effect of our order was that Kwan J’s order that the Liquidator had no case to answer on the Directors’ motion to commit him for contempt of Court was set aside and the matter was remitted to her for resumption of the hearing.  

4.The primary issue is whether this application for leave to appeal should be considered as a civil cause or matter (and thus governed by Part II of the Hong Kong Court of Final Appeal Ordinance Cap. 484) or a criminal cause or matter (and thus governed by Part III HKCFAO).  If it were to be regarded as a “criminal cause or matter”, then this court would have no jurisdiction to grant leave to appeal as only the Court of Final Appeal can grant leave to appeal in criminal matters: s.32(1) HKCFAO.

5.The second issue is this: if this is a criminal cause or matter, was our decision a final one?  Under s.31(2) HKCFAO, an appeal only lies from a final decision even if this court were to consider that a point of law of great general or public importance is involved in our decision.  

Criminal cause or matter?

6.Leading counsel for the Liquidator accepts that the contempt that the Directors are seeking to establish falls within the category traditionally classified as “criminal contempt” rather than the alternative category of “civil contempt”.  However he argues that the label of “criminal contempt” does not make this necessarily a “criminal cause or matter” within the meaning of the HKCFAO.  He submits that contempt is sui generis as far as the Court of Appeal is concerned, as it is governed by s.50 High Court Ordinance Cap. 4, thus taking it out of s.13(2) which sets out this court’s civil jurisdiction and s.13(3) which sets out its criminal jurisdiction.  And since it is sui generis, and therefore not a “criminal cause or matter”, it is included as a “civil cause or matter” for the purposes of the HKCFAO as the definition of a “civil cause or matter” in that Ordinance provides that it means “a cause or matter other than a criminal cause or matter”.

7.In my view the fact that the HCO contains a general provision for appeals in the Court of Appeal in cases of contempt of Court is not conclusive as to whether a specific case of contempt is a civil or criminal cause or matter in the context of an appeal to the CFA.

8.The court has to ascertain the nature of the cause or matter, adopting a flexible approach with some degree of common sense , and looking at the object and purpose of the relevant cause or matter (So Wing Keung v Sing Tao Ltd [2005] 2 HKLRD 11, para. 31(11)). 

9.Turning then to the object and purpose of the relevant cause or matter, it is to punish misconduct which is an interference with the administration of justice.  That the motion for committal for contempt of Court was brought in the context of a winding-up does not detract from my view that the motion is a criminal cause or matter (in contradistinction to the winding-up).  The court should look at the substance of the matter before it and not the form.  In this regard, of particular significance is the nature and severity of the potential sanction (Koon Wing Yee v Insider Dealing Tribunal and another FACV19/2007).  In the case of committal for contempt of Court, the penalty is not compensatory in nature but is punitive and deterrent.          

10.I derive some support for my view from Ambard v Attorney General for Trinidad and Tobago [1936] AC 322, where the Privy Council considered whether it was competent to it to give leave to appeal and to hear an appeal against an order for a penalty imposed for a contempt of Court.  After examining a number of cases, Lord Atkin delivering the judgment of the court held that “interferences with the administration of justice, whether they be interferences in particular civil or criminal cases, ... when they amount to contempt of Court, are quasi-criminal acts, and orders punishing them should, generally speaking, be treated as orders in criminal cases, and leave to appeal against them should only be granted on the well-known principles on which leave to appeal in criminal cases is given” (p.329). 

11.As for the decision of this court (Stuart-Moore V-P, Yeung JA and Burrell J) in Secretary for Justice v Choy Bing Wing CACV11/2004 (unrep.) 1 March 2005, it would appear that Ambard was not referred to it, the applicant for leave was not legally represented and in any event no point of law of great general or public importance was involved.

12.Accordingly I take the view that this is a criminal cause or matter for the purposes of the HKCFAO and that this court has no power to grant leave to appeal.

Final decision?

13.I do not consider that our decision was a “final” decision within the meaning of s.31(a) HKCFAO.  We ordered that the judge’s order that the Liquidator had no case to answer be set aside and that the hearing of the motion be resumed.  In fact there are still some other  arguments on the no case submission which will have to be decided by the judge.  No authority has been placed before us to show our order should be regarded as a final decision.  In contrast, in Loade and others v Director of Public Prosecution [1990] 1 QB 1052, Neill LJ held that the submission of no case to answer by way of a preliminary point was an interlocutory matter and that therefore there was no right of appeal.    

14.If however I am wrong and this was a “final” decision, then I would be prepared to accept that the question whether a liquidator can disclose transcripts of private examinations ordered under s.221 Companies Ordinance Cap. 32 without first obtaining leave of the Court is a point of law of great general and public importance.  Treating the application as one for certification under s.32(2) HKCFAO, I would certify question (b) in the Notice of Motion.  Question (c) is incidental to question (b) and the same applies. 

15.Question (a) is in my view drafted too broadly - the issue is not whether the investigation and reporting of suspected criminal conduct to the authorities is within the function and duties of a liquidator; the issue is how he should do so - in particular, if it involves the disclosure of transcripts of private examinations ordered under s.221 Companies Ordinance, whether he should first obtain leave of the court.  Likewise question (d) is drafted too broadly.    

16.Question (e) was not an issue which was resolved by Kwan J and accordingly it was not dealt with in the appeal.  Nor was it the subject of a Respondent’s Notice.  This court ordered only that the motion be remitted to the Court of First Instance for resumption of the hearing before Kwan J (see para. 27(3) Judgment of 12 October 2007).  We did not make a positive order that there was a case to answer (cf the order sought in the Notice of Appeal).  Accordingly question (e) is premature.   

17.The result is that the application for leave to appeal to the Court of Final Appeal fails.  I would dismiss the application and make an order nisi that the Respondent pay the costs of the Appellants and the Official Receiver. 

Mr John Jarvis QC, Mr Clifford Smith SC and Mr Eugene Yim instructed by Barlow Lyde & Gilbert for the Appellants (Applicants)

Mr Benjamin Yu SC instructed by Clifford Chance for the Respondent (Respondent)

Ms Phyllis McKenna of the Official Receiver’s Office.