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張月清 v Tsui Yiu Hei

Judgment Cited authorities 1 Cited in Precedent Map Related
Vincent
Judgment Date13 December 2019
Neutral Citation[2019] HKCFI 2970
Judgement NumberHCMP602/2019
CourtHigh Court (Hong Kong)
Subject MatterMiscellaneous Proceedings
HCMP875/2018 張月清 v. TSUI YIU HEI

HCMP 875/2018,
HCMP 602/2019 and
HCMP 845/2019
(Heard Together)

[2019] HKCFI 2970

HCMP 875/2018

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 875 OF 2018

____________

IN THE MATTER OF an Application on behalf of 張月清 against TSUI YIU HEI (徐耀熙) for an Order of Committal

____________

BETWEEN
張月清 Plaintiff
and
TSUI YIU HEI (徐耀熙) Defendant

____________

AND HCMP 602/20 19

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 602 OF 2019

____________

IN THE MATTER OF an Application on behalf of 張月清 against TSUI YIU HEI (徐耀熙) for an Order of Committal

____________

BETWEEN
張月清 Plaintiff
and
TSUI YIU HEI (徐耀熙) Defendant

____________

AND HCMP 845/20 19

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 845 OF 2019

____________

IN THE MATTER OF an Application on behalf of 張月清 against TSUI YIU HEI (徐耀熙) for an Order of Committal

____________

BETWEEN
張月清 Plaintiff
and
TSUI YIU HEI (徐耀熙) Defendant

____________

(Heard Together)

Before: Deputy High Court Judge Leung in Court
Date of Hearing: 29 November 2019
Date of Judgment: 13 December 2019

____________________

JUDGMENT

____________________

1. The plaintiff commenced these contempt proceedings, pursuant to O 52 of the Rules of the High Court, Cap 4A (“RHC”) against the defendant for alleged breach of the orders of this court made back in 2013 and 2015 in HCMP 40/2013.

The underlying dispute and the injunctions

2. The underlying dispute between the parties was set out in detail in the judgment of this court in HCMP 40/2013 dated 10 February 2015. Briefly, the defendant, together with his relatives, approached the plaintiff in 2012 for loan. This led to two loan agreements in 2012 whereby the plaintiff was the lender. The first one was for a sum of RMB 28 million and the second one was for a sum of RMB 31 million. One of the borrowers was Chan Kam Chuen (“Chan”).

3. The defendant executed an irrevocable guarantee in favour of the plaintiff to secure the repayment of the above loans by pledging his shares in Wise Line Company (“the Company”) in favour of the plaintiff. The defendant was then the sole shareholder and director of the Company. A share mortgage deed (“the Share Mortgage”) was entered into, and undated corporate documents in enforcement were pre-signed by the defendant and delivered to the plaintiff.

4. The Company is an asset holding company having no business operation. The only known asset of the Company was its wholly owned PRC subsidiary (“the PRC Subsidiary”), which owns lands and buildings in Qingyuan in the Mainland.

5. The borrowers defaulted in repayment of the loans. Hence the plaintiff’s exercise of her right to enforce the Share Mortgage. Making use of the pre-signed corporate documents mentioned above, the plaintiff caused the appointment of her nominee director, Cheung (“Cheung”), and replacement of the company secretary of the Company. The plaintiff therefore also caused the replacement of the legal representative of the PRC Subsidiary by her nominee, Tam (“Tam”). However, the registration of the change did not go through because of the resistance of the defendant in the Mainland. Hence the commencement of HCMP 40/2013.

6. Upon discovering the following conduct of the defendant behind the plaintiff’s back after the commencement of HCMP 40/2013 and between April and June 2013, the plaintiff took out an application for interlocutory injunction against the defendant:

(1) The defendant purportedly passed a resolution of the Company to remove Cheung as the director.

(2) The defendant purportedly passed resolutions to appoint himself as the legal representative of the PRC Subsidiary.

(3) The defendant and Chan executed a share transfer agreement whereby they purported to sell the shares and assets of the PRC Subsidiary to a third party.

(4) The defendant purportedly passed a resolution to increase the share capital of the Company with a view to diluting and turning the plaintiff’s shareholdings from 100% to 1%. Corporate documents were also filed with the Companies Registry for the above purpose.

7. On 7 June 2013, this court granted an interlocutory injunction against the defendant in, amongst others, the following terms (“the Interlocutory Injunction”) in §1:

“The defendant (whether in their own capacity or via their agents, servants, representatives or otherwise) be restrained from howsoever (whether in his own account or on behalf of or in conjunction with any person, firm or company):

(1) holding himself out as or making any representation to the effect that he is a shareholder or director of Wise Line Limited (慧豐有限公司) (the “Company”), including but not limited to reference to or reliance on the record of the Companies Registry;

(2) exercising or purporting to exercise any power as a shareholder or director of the Company, including but not limited to making any reference to or reliance on the notification of increase of capital (ref...); return of allotment of shares (ref...); and special resolution (ref...) filed with the Companies Registry;

(3) managing, controlling, participating or being involved in the affairs of the Company and dealing with the Company’s assets including but not limited to:-

(a) exercising or purporting to exercising any powers on behalf of the Company to cause any change of the legal representative of the Company’s PRC subsidiary (祥豐 (清遠) 實業有限公司) (the “PRC Subsidiary”);

(b) managing, controlling, participating in or dealing with the affairs of the PRC Subsidiary whether through the legal representative of the PRC Subsidiary or otherwise...”

8. On 19 June 2013, the Interlocutory Injunction with penal notice was served on the defendant through his solicitors.

9. At the substantive hearing of HCMP 40/2013, the defendant was still represented by solicitors and counsel[1]. On 10 February 2015, this court handed down judgment finding in favour of the plaintiff. Amongst other reliefs, this court granted the following declarations:

(1) The plaintiff was entitled to sell the defendant’s shares in the Company and to apply the proceeds of sale to discharge his debt owed to the plaintiff.

(2) Pursuant to the Share Mortgage and the corporate documents in enforcement pre-signed by the defendant, the plaintiff was entitled to and did become a shareholder of the Company and Cheung was duly appointed as the director of the Company.

10. By the same order, this court granted a final injunction against the defendant in the following terms (“the Final Injunction”):

“5. The defendant (whether in their own capacity or via their agents, servants, representatives or otherwise) be restrained from howsoever (whether in his own account or on behalf of or in conjunction with any person, firm or company):

a. exercising his powers as a purported director of the Company;

b. managing, controlling, participating or being involved in the affairs of the Company and dealing with the Company’s assets including but not limited to:-

i. exercising or purporting to exercising any powers on behalf of the Company to cause any change of the legal representative of the Company’s PRC subsidiary (祥豐 (清遠) 實業有限公司) (the “PRC Subsidiary”);

ii. managing, controlling, participating in or dealing with the affairs of the PRC Subsidiary whether through the legal representatives of the PRC Subsidiary or otherwise...

c. making any further filings with the Companies registry vis-à-vis the Company without the leave of this Court; and

d. holding himself as, and/or making any representation to the effect that he is a shareholder and/or director of the Company;

6. The defendant do forthwith produce or make available to the plaintiff the following:-

a. all the seals and chops of the Company;

b. all the Company’s books of accounts, documents, management accounts, ledgers, audit working papers, statements and all other correspondence or documents relating to all bank accounts solely or jointly held by the Company, cheques stubs, banking facility documents, loan documents, security documents, hire-purchase documents, contracts, leases, tenancy agreements, sale and purchase agreements of tangible or intangible assets, valuation report of tangible or intangible assets, instruments of transfer, invoices, receipts, vouchers, tax returns, tax computation documents, employees’ payrolls, directors’ emoluments and entertainment records, lists of inventories and minutes of board meetings (whether in printed forms or in any other forms)”

11. The defendant, then acting in person[2], lodged an appeal against the above judgment and order, but out of time (HCMP 683/2015). By a written judgment handed down on 19 June 2015, the Court of Appeal refused to give the defendant leave to appeal out of time and struck out his notice of appeal.

These proceedings

HCMP 875/2018

12. In late 2017, the plaintiff applied for leave to commence committal proceedings against the defendant for alleged breach of the Interlocutory Injunction and the Final Injunction (HCMP 875/2018). The basis of the application was that Tam received a 傳喚証 (or summons) (“the Summons”) and attended the 清遠市公安局清城區分局 (“Qingyuan Police Bureau”) on 30 August 2017 for suspected crime of 職務侵占罪 (or conversion of the corporate assets by abuse of position) (“the Alleged Conversion”). According to the police, it was the defendant who reported or caused the report to be made on behalf of the Company and the PRC Subsidiary.

13. Leave was granted...

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