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Bt v Yhk

Judgment Cited authorities 10 Cited in 1 Precedent Map Related
Vincent
Judgment Date08 June 2020
Neutral Citation[2020] HKCA 426
Judgement NumberCACV439/2019
Subject MatterCivil Appeal
CourtCourt of Appeal (Hong Kong)
CACV439/2019 BT v. YHK

CACV 439/2019

[2020] HKCA 426

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 439 OF 2019

(ON APPEAL FROM FCMC NO. 943 OF 2011)

________________________

BETWEEN
BT Petitioner
(Judgment Debtor)
and
CBY Respondent
(formerly known as YHK (Judgment Creditor)
and also known as YCB)
[Committal for Contempt of Court]

________________________

Before : Hon Kwan VP, Cheung and Yuen JJA in Court
Date of Hearing : 12 May 2020
Date of Judgment: 8 June 2020

________________________

J U D G M E N T

________________________

Hon Kwan VP :

1. I agree with the judgment of Cheung JA.

Hon Cheung JA :

I. Background

2.1. The parties are former husband and wife. The wife (Respondent/Judgment Creditor) applied before H H Judge Melloy for an order of committal against the husband (Petitioner/Judgment Debtor) for contempt of court on the ground that the husband was in breach of two court orders. The Judge refused to commit the husband. Pursuant to leave granted by the Judge, the wife now appeals.

2.2. The committal proceedings were instituted by the wife pursuant to Rule 90 of the Matrimonial Causes Rules, Cap 179A (‘MCR’) and Order 52 of the Rules of the High Court, Cap. 4A (‘RHC’).

2.3. As appeared from the Statement lodged in support of the wife’s application for committal (‘the Statement’), the two orders were first, an order by consent dated 9 August 2011 (‘the 2011 Order’) and second, paragraph 1 of the order made by the Judge on 29 May 2015 (‘the 2015 Order’).

2.4. The 2011 Order was made pursuant to an agreement between the parties on the division of their matrimonial assets. Both parties were then legally represented. The husband agreed to pay the wife HK$26 million by way of seven installments beginning from 1 September 2011. The seven installments were either in the sum of HK$3.8 or HK$3.7 million each. All payments were to be effected within 36 months i.e. on or before 1 September 2014. The parties agreed that upon compliance by the husband of the terms of the 2011 Order, a clean break was to come into effect between the parties.

2.5. The husband did not pay the agreed sum despite his undertaking to do so and the clean break did not come into effect. The wife then applied by way of three judgment summonses for, among other things, an order to commit the husband for contempt of court.

2.6. The husband made partial payment on 1 March 2013 following the issuing of the first judgment summons and pending the determination of the judgment summons he was ordered to make interim payments of HK$300,000 per month, payment to commence on 1 March 2014.

2.7. As of 5 May 2015 the interim payment had been used to offset against the accrued interest of the outstanding sum due from the husband.

2.8. As of 5 May 2015 the sum outstanding to be paid by the husband was HK$24,170,410.67.

2.9. By the 2015 Order the Judge found that the husband was in contempt of court for his breach of the 2011 Order. The Judge made the following orders against him :

‘ 1) The [husband] be committed to prison for the period of three months, suspended, provided that the [husband] pays the [wife] the judgment debt in the said sum of HK$24,170,410.67 as at 5 May 2015 plus interest thereafter at a daily rate of HK$5,297.62 and surcharge in the sum of HK$1,208,520 on or before 1 June 2016;

2) Pending payment of the judgment debt, interest and surcharge under paragraph 1 above, the [husband] shall continue to pay the [wife] the sum of HK$300,000 per month;

3) The costs of these enforcement proceedings be to the [wife], to be taxed if not agreed on an indemnity basis;

4) A warrant of arrest shall be issued upon the solicitors for the [wife] filing an affidavit of non‑compliance with the terms of suspension; and

5) Liberty to apply.’

2.10. The application for committal by way of judgment summons was the recognised procedure adopted by the Courts at that time.

2.11. On 30 December 2016 this Court in YBL v. LWC [2017] 1 HKLRD 823 held that the judgment summons procedure was not compatible with the fundamental right of a judgment debtor under Articles 10 (right to fair trial) and 11 (rights of persons charged with or convicted of criminal offence) of the Hong Kong Bill of Rights Ordinance (‘BOR’). In order to render the judgment summons procedure compatible with the BOR, it has to be segregated into two distinct procedures: first, an examination summons and second, a committal summons which, subject to specific provisions to the contrary in Rules 87 and 88, the procedure in Order 52 of the RHC are to be applied. The implementation of YBL is now contained in Practice Direction – SL 10.2 Guidance Notes on Judgment Summons Procedure.

2.12. The husband, however, again failed to pay according to the terms of the 2015 Order. The wife applied to activate the suspended committal order. The Judge in her ruling of 29 September 2017 (‘the 2017 Order’) refused to activate the suspended order in the light of YBL. She held that it is for the wife to decide whether or not to issue a judgment summons which will be in substance an examination summons under the new procedure or to proceed directly to commit the husband for contempt of court.

2.13. On 5 December 2017 the wife issued a summons pursuant to Rule 90 MCR and Order 52 RHC to commit the husband for contempt in respect of his failure :

‘ 1) to pay the [wife] the judgment debt in the sum of HK$24,170,410.67 plus interest thereafter at a daily rate of HK$5,297.62 and surcharge in the sum of HK$1,208,520 and

2) to pay the [wife] the sum of HK$300,000 per month pending payment of the judgment debt, interest and surcharge, in breach of the order made by H H Judge Melloy on 29 May 2015.’

2.14. On 27 April 2018 the wife issued the present summons, seeking leave to withdraw the summons of 5 December 2017 and asking for an order for committal against the husband for his

‘1) breach of his undertaking to the Court and to the [wife] to pay the [wife] seven lump sums in a total sum of HK$26,000,000 under the order made by H H Judge Melloy dated 9 August 2011;

2) failure to pay the [wife] the judgment debt in the sum of HK$24,170,410.67 plus interest thereafter at a daily rate of HK$5,297.62 and surcharge in the sum of HK$1,208,520; and

3) [failure] to pay the [wife] the sum of HK$300,000 per month pending payment of the judgment debt, interest and surcharge, in breach of the order made by H H Judge Melloy on 29 May 2015 upon the grounds and particulars set forth in the copy Statement filed on 23 April 2018 served herewith used on the application for leave to issue this summons.’

2.15. The Judge gave her judgment on 28 June 2019 (‘the 2019 Order’) dismissing the wife’s application.

II. Principle on Contempt

3. It is common ground that in order to establish a contempt of court, it is sufficient to prove that the defendant’s conduct was intentional and that he knew of all the facts which made it a breach of the order. It is only necessary to prove that he appreciated that he did breach the order. It is not necessary to show that the defendant intended to disobey the order i.e. his conduct was contumacious : Kao, Lee & Yip v. Koo Hoi Yan (2009) 12 HKCFAR 830.

III. The Judge’s decision

4.1. The Judge held that the husband had breached the 2015 Order in that the outstanding sum of HK$24,170,410.67 plus interest and surcharge has not been paid. This, prima facie, activated the suspended committal order. Further he has not continued to pay the sum of HK$300,000 per month as agreed.

4.2. The Judge further held that the husband had the requisite state of mind necessary to prove civil contempt. She held that :

‘ 44. .....The husband certainly knew of the order and he knew that if he chose not to pay the wife and on his case, if he chose to put other financial commitments before his obligations under that order, then prima facie he would be in contempt. It is clear that this was not an accidental breach, although it seems to be the husband’s case that he had no alternative but to take the action that he did.’

4.3. The Judge, however, refused to commit the husband because she held that the wife had not been able to show beyond reasonable doubt that the husband was in contempt. The Judge held :

‘ 46. The difficulty is that without the wife going through the examination summons process now prescribed, it is difficult for her to successfully challenge the husband’s current position, which is that although he sold the two Midlevel’s properties he was not able to realize any significant sums from them and certainly he has not been able to use the net proceeds of sale to pay off what he owes. Further it is his case that there is very little chance of him recovering the RMB20 million from the so called China Fund. In addition, he says that he now has no regular income and is focusing instead on different individual projects.’

4.4. The Judge also referred to the husband’s fourth affirmation filed in these proceedings in which he said that if he were to be sent to prison he would not be able to continue with his projects which essentially were his assets and his only chances left in life.

IV. Basis to commit

5.1. Before I deal with the grounds of appeal of the wife, it is necessary to address a preliminary point of whether the wife had, in fact, any basis in law to commit the husband having regard to the terms of the 2011 Order and the 2015 Order. The principle is summarised by Neill LJ of the English Court of Appeal in Kumari v. Jalal [1997] 1 WLR 97 at page 101 as follows :

‘ .... However, both as a matter of principle and on authority, if there is a breach of an...

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1 cases
  • Bt And Cby (Formerly Known As Yhk And Also Known As Ycb
    • Hong Kong
    • Court of Final Appeal (Hong Kong)
    • 12 November 2020
    ...basis of the application. [8] FCMC 943/2011, [2019] HKFC 170, §§43-44. [9] Ibid §47. [10] Kwan VP, Cheung and Yuen JJA, CACV 439/2019, [2020] HKCA 426 (8 June 2020). [11] Ibid §6.15. [12] Ibid §7.10. [13] Ibid §§7.1-§7.9. ...

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