Yuen Minghwa Francois, The Administrator of the Estate of Yuen Kiu Kwan, Deceased v. Lo Mei Kin Stella

HCA 2682/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2682 OF 2008

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BETWEEN

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Before: Hon Saunders J in Court

Dates of Hearing: 2 February, 13 & 29 April, 14 May 2010

Date of Order: 14 May 2010

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D E C I S I O N

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1.On 15 December 2009, this Court made an order which required you to perform a number of particular acts and restrained you from doing certain specified acts.

2.On 8 January 2010 that order was continued by your consent.

3.Notwithstanding your consent, and notwithstanding the very long period of time which you have had take the steps required, you failed to take those steps.  Notwithstanding the plain terms of the order, you did certain acts which you had been specifically restrained from doing.

4.Contempt proceedings were taken against you in January 2010, but it was not until the 13 April 2010, when those proceedings came before this Court that you admitted that you are in breach of the order that were prepared to take steps to rectify the situation. 

5.Even now, not everything that was required to be done has been done.  Substantial additional time and costs have been incurred to place the control of the companies in the hands of the plaintiff.  Those were straightforward steps which could have been done with your assistance, had you complied with the order of the court.

6.However, the matter which of the greatest concern to me is that, in what can only be described as a deliberate and flagrant breach of the order you made payments to yourself from three occasions of sums totalling $60,165.36.  You must have known that was wrong.  Further, you must have known since the committal proceedings were commenced in January this year, that you had not been entitled to make those payments to yourself.

7.It took you until 8 April 2010, before you took steps to refund those sums.  Cheques have now been given to the Plaintiff’s solicitors for those sums. Now that these committal proceedings have come to an end they may bank those cheques confidently without being concerned that that act may have any adverse effect on the Plaintiff’s position in these proceedings.

8.It is one thing to be in contempt for failing to comply with the orders required to put proper control of the companies in the hands of the plaintiff as the executor of the estate.  In all the circumstances, had your contempt been limited to that, it might have been appropriate to deal with this matter, in a way which did not involve imposing any penalty on you in respect of your contempt other than the imposition of a costs order.  But your payment of moneys to yourself, from companies which were under your control, but which you knew you had no right to control, and which you knew you were obliged to give control to the plaintiff, is a matter it cannot be ignored.

9.I accept that you ultimately had admitted your contempt, however it took three months after the committal proceedings were issued for that admission to be made.

10.I accept that you ultimately took steps to repay the moneys that you had wrongfully taken.  But, it took three months after the committal proceedings were issued for that payment to be tendered by you. 

11.Those circumstances greatly detract from the mitigation that would otherwise flow from both the admission of your contempt and the tendering of the payment. 

12.Having had regard to all of the circumstances, you will be fined the sum of $100,000 for your contempt the court.  That sum must be paid within 28 days.  In fixing that sum and in not imposing an immediate custody sentence on you, I have had regard to the extent of the costs which you will be obliged to pay which are likely to be in the order of at least in excess of a million dollars, possibly $2 million.

13.In addition to the fine, you must pay the costs of the Plaintiff on the committal proceedings, to be taxed if not agreed on an indemnity basis.

Mr Clifford Smith, SC & Mr Dennis Kwok, instructed by Messrs Norton Rose Hong Kong, for the Plaintiff (by original action)

Mr William Allan, instructed by Messrs Paul Kwong & Co., for the Defendant (by original action)