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HCMP 2402/2017
[2018] HKCFI 536
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
MISCELLANEOUS PROCEEDINGS NO 2402 OF 2017
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IN THE MATTER of an application on behalf of LAW LAI LAN against TAMANG PREM CHANDR for an Order of Committal |
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and |
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IN THE MATTER of a Mareva Injunction Order dated 5 September 2017 granted in High Court Action No 2310 of 2016 |
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and |
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IN THE MATTER of Order 52, rule 3 of the Rules of the High Court |
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| BETWEEN |
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LAW LAI LAN |
Applicant |
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and |
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TAMANG PREM CHANDR |
Respondent |
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| Before: |
Deputy High Court Judge To in Court |
| Dates of Hearing: |
23, 30 November, 8, 12, 15 December 2017, |
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5 January, 13 February and 5 March 2018 |
| Date of Judgment: |
5 March 2018 |
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J U D G M E N T
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INTRODUCTION
Introduction
1. By an Originating Summons dated 27 October 2017, the applicant (the “Applicant”) sought an order for committal against the respondent (the “Respondent”). The Applicant is the plaintiff in High Court Action No 2310 of 2016 (“HCA 2310/2016”). The Respondent, a Nepalese, was at the material time the sole director and shareholder of the defendant Himali Engineering Construction Limited (“Himali”).
2. On 5 September 2017, upon the ex parte application of the Applicant, I granted an injunction order against Himali restraining dissipation of assets to the amount of $2 million (the “Order”). On 15 September 2017, the Order was continued with the amount of the injunction increased to $3.5 million.
3. The Order required Himali, inter alia, to disclose to the Applicant at once all its assets of an individual value of $10,000 or more in Hong Kong, whether in its own name or not and whether solely or jointly owned, stating the value, location and details of all such assets. The Order also required the information to be confirmed in an affidavit by its director which must be served on the Applicant’s solicitors by 4 pm on the fifth working day after it was served on Himali. The Order was served on Himali’s then solicitors on 6 September 2017 and the deadline for compliance expired on 13 September 2017. The Order was not complied with.
4. On 24 October 2017, I granted leave to the Applicant to commence committal proceedings against the Respondent. The application was set down for hearing on 23 November 2017.
5. At the hearing on 23 November 2017, the Respondent did not appear. Upon the Applicant’s proof of service and upon reading the affirmations filed by the Applicant, I was satisfied that the Respondent was guilty of contempt of court. I made an Order for Committal against him and issued a warrant for his arrest with bail fixed in the sum of $300,000.
The hearing and order made on 30 November 2017
6. The Respondent was arrested and brought before me on 30 November 2017. He was explained the nature of these proceedings and the breaches of the Order alleged of him. He admitted he had not complied with the Order and accused the Applicant’s solicitors, Mr How, of harassing him. I gave him further time to give disclosure so as to purge the contempt. He said he could comply with the Order. Then I stood down the hearing for him to discuss with Mr How about the disclosure in greater details required of him.
7. During the discussion, the Respondent and Mr How reached agreement to make disclosure by filing an affirmation by 4 pm on 4 December 2017 and to pay the Applicant’s costs in the sum of $200,000 on 4 December 2017 and a further sum of $100,000 on the following day.
8. When the hearing resumed, Mr How reported the agreement. The Respondent confirmed that he understood what he had agreed and would be able to comply; but asked for more time to pay the second instalment of $100,000. At the court’s suggestion, the parties agreed to defer that payment to 7 December 2017. The Respondent undertook to perform the agreement. Hence, I adjourned the hearing to 8 December 2017 for sentence. The undertaking was made the terms of an order of this court. I committed the Respondent to prison but allowed him bail pending sentence in the sum of $20,000. On 4 December 2017, the Respondent applied by summons for leave to appeal that order (see paragraph 29).
9. The Respondent did not honour his obligation to give disclosure on 4 December 2017 or to pay the first instalment of costs. He applied for legal aid. On 5 December 2017, I gave a direction that notwithstanding his application for legal aid, the proceedings shall not be stayed.
The hearing on 8 December 2017
10. At the hearing on 8 December 2017, the Respondent gave no disclosure but a letter relating to his legal aid application. He admitted that he had not complied with his undertaking. He put the blameon the court interpreter for not giving him a list of what he was required todisclose and taking that list away when she left. That “list” as I understand was the interpreter’s own notes to assist her when providing interpreting service. The Respondent said he had tried his best but he had no money. He then talked about irrelevant matters such as the problems with his employees and financial crisis. I then gave him a further chance to purge his contempt. I requested Mr How to explain to the Respondent after the court session with the assistance of the court interpreter what he had to disclosure and then to disclose whatever information he had and his reasons for his failure to disclose earlier. I remanded him in prison until he gives the disclosure. I advised him of his right to apply for legal aid and instructed the bailiff to provide him with such assistance as necessary. I also advised him of his right to appeal but reminded him that my order stands until set aside by the Court of Appeal.
11. In the meantime, there were some attempts by the Respondent’s secretary, Ms Lau, to give disclosure to Mr How. She produced her draft affirmation, copies of invoices, cheques from Himali’s main contractors and some bank statements. But none of the documents show the assets of Himali, either currently or as at 6 September 2017 when the Order was made. The documents suggested that there were payments and cheques made by Himali’s contractors, namely LGJV, Alstom and Intrafor, but such payments were not reflected in the bank statements produced. Obviously, disclosure was partial and incomplete.
The hearing on 12 December 2017
12. The Respondent was brought up for hearing on 12 December 2017. He produced an affirmation. Still he did not disclose the invoices Himali issued to its contractors and other book debts which were assets of Himali and bank statements showing payments received. He only disclosed that he has a lot of expenses in the region of $180,000 per month. He stated, among other things, that Himali paid him and another director $50,000 and $30,000 respectively; and rent of $20,000 per month. The information is obviously incorrect as the Respondent is the sole director on record of Himali and Himali’s registered office is at the address of its secretarial service provider and Himali has vacated this office in early September 2017 without disclosing its current business address. He sought validation order in the sum of $100,000 for his household expenses and $500,000 for funding litigation. It is plain that he has assets but refused to disclose. If he does not have assets it would be pointless to ask for such validation order. It is worth noting that the Respondent has good working knowledge of company law.
13. It was obvious that disclosure was incomplete. In particular, the Respondent was trying to conceal what happened in relation to a cheque in the sum of $1,871,474.71 issued by LGJV to Himali which was not shown in any of the disclosed document. In answer to the court’s question, he admitted it had been deposited into the account of Nanyang Commercial Bank. He was asked to disclose the bank statements, specifically those of Nangyang Commercial Bank, and other supporting documents.
14. The Respondent said that he could not obtain the bank statements while in custody. Mr How agreed to assist him with the documentation so that he could authorise someone to approach the banks for the statements. I adjourned the hearing to 15 December 2017 to enablehim to obtain the statements. He was remanded in custody and reminded of his right to apply for legal aid and to appeal.
Changes in Himali’s directors while the Respondent was in custody
15. In the meantime, the Applicant discovered the following changes in directorship of Himali:
(1) On 13 September 2017, Himali filed a Form ND2A with the Companies Registry notifying the appointment of Gurung Min Bahadur as director effective from 13 September 2017. The form was signed by Gurung Min Bahadur.
(2) On 25 September 2017, Himali filed a Form ND2A notifying the cessation of the directorship of Gurung Min Bahadur with effect from 22 September 2017. The form was signed by the Respondent and dated 22 September 2017.
(3) On 29 September 2017, Himali filed a Form ND2A notifying the cessation of the directorship of the Respondent with effect from 16 September 2017 and the appointment of Rai Bhima Hang as director on the same day. The form was signed by the Respondent and dated 16 September 2017.
The hearing on 15 December 2017
16. At the hearing on 15 December 2017, the Respondent’s secretary, Ms Lau, and his family member, including his nephew Mr Topraj Tamang also attended. Ms Lau and Mr Tamang made submissions. They explained the difficulties of the Respondent in providing disclosure while in custody and complained about the conduct of Mr How. Ms Lau said that the Respondent’s affairs were in a mess and it would be...
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