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Willwin Development (Asia) Company Ltd v Wei Xing And Others

Judgment Cited authorities 10 Cited in Precedent Map Related
Judgment Date10 February 2015
Year2015
Judgement NumberHCMP2946/2014
CourtHigh Court (Hong Kong)
HCMP2946/2014 WILLWIN DEVELOPMENT (ASIA) COMPANY LTD v. WEI XING AND OTHERS

HCMP 2946/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2946 OF 2014

______________________

IN THE MATTER of an application by WILLWIN DEVELOPMENT (ASIA) COMPANY LIMITED for leave to apply for an Order of Committal against WEI XING, EVOLUTION SOLUTION LIMITED and HU YING

and

IN THE MATTER of an application by WILLWIN DEVELOPMENT (ASIA) COMPANY LIMITED for leave to issue Writ of Sequestration against WEI XING, EVOLUTION SOLUTION LIMITED and HU YING

______________________

BETWEEN

WILLWIN DEVELOPMENT (ASIA) COMPANY LIMITED Applicant
(1st Plaintiff)
and
WEI XING 1st Respondent
(1st Defendant)
EVOLUTION SOLUTION LIMITED 2nd Respondent
(2nd Defendant)
HU YING 3rd Respondent
(3rd Defendant)

______________________

Before: Deputy High Court Judge B Chu in Court
Dates of Hearing: 28 January 2015
Date of Judgment: 10 February 2015

_______________

J U D G M E N T
_______________

Introduction

1. What was originally a 30 minute for directions for the applicant’s committal proceedings against the respondents for contempt eventually turned out to be a full day argument as to whether the committal proceedings should be adjourned/stayed pending the determination of the main civil action between the parties.

2. The applicant herein is the 1st plaintiff (“P1”) in the main civil action HCA 797/2012 (“Main Action”). Its director and 70% shareholder is one Wei Wen (“Wei Wen”). The 1st respondent (“Wei Xing”), the 2nd respondent (“ESL”) and the 3rd respondent (“Hu Ying”) are respectively the 1st, 2nd and 3rd defendants in the Main Action (collectively referred to as “Ds”).

3. Counsel Ms Sara Tong appeared for P1 and Counsel Mr Tim Chi Hang Yu appeared for ESL and Hu Ying at the hearing before this court. Wei Xing was not legally represented and appeared in person.

Background

4. Wei Wen and Wei Xing are two brothers, and Wei Xing holds and held at all material times the remaining 30% in P1. Hu Ying is the wife of Wei Xing. Wei Xing and Hu Ying were previously directors of P1.

5. It is P1’s case in the Main Action that, among other things, Wei Xing and Hu Ying had breached their fiduciary duties and duties of confidence in diverting business away from P1 to ESL, a company Hu Ying is and was at all material times the sole shareholder and director.

6. The business diverted included in particular business P1 had been conducting with Apple Inc, said to be P1’s client.

7. P1 applied for and obtained on 14 May 2012 an injunction order (“Injunction Order”) and an Anton Piller order (“Anton Piller Order”). The Injunction Order was subsequently amended on 13 July 2012 (“Amended Injunction Order”). The attempts of Ds to set aside such orders on 12 July 2012 were dismissed by the court.

8. The Injunction Order expressly prohibited Wei Xing and ESL from soliciting, entering into, performing, or continuing to perform any contract with clients of P1 for the sale/provision of auto test systems, test fixtures etc, and such clients of P1 included, inter alia, Apple Inc[1]. The Anton Piller Order expressly required Wei Xing and ESL to disclose various documents, including, inter alia, all price quotations, purchase orders, invoices, receipts and agreements incidental to ESL’s business and business correspondence and/or records of Wei Xing and ESL[2].

9. It was P1’s case that it subsequently discovered from documents disclosed by Apple Inc pursuant to an order for disclosure made by M Chan J on 23 May 2014 (“Apple Documents”) that serious breaches of the Injunction Order/Amended Injunction Order had been committed by Wei Xing and ESL, in that they had continued to conduct business with Apple Inc after the Injunction Order.

10. Further, it was P1’s case that from the documents disclosed by Apple Inc, Wei Xing and ESL had also breached the Anton Pillar Order in failing to disclose business correspondence, purchase orders, quotations and receipts concerning their business dealings with Apple Inc.

11. According to P1, Hu Ying (being at all material times the wife of Wei Xing and the sole director and shareholder of ESL) had aided and abetted the aforesaid breaches.

12. The trial of the Main Action commenced on 3.11.2014 and took place for 10 days (“Main Trial”). The trial judge was M Chan J (“Trial Judge”). The Main Trial was adjourned part heard on 14 November 2014 and fixed for another 16 days, from 2 – 3 June 2015 for experts’ evidence, 24 August – 8 September 2015 for Ds’ evidence, and 3 – 4 November 2015 for closing submissions.

13. P1 made an ex parte application on 11 November 2014 for leave to issue committal proceedings against Ds, while Wei Wen was still giving oral evidence during the Main Trial. The application was supported by the 9th affirmation of P1’s solicitor Mr Kong and later by Wei Wen’s 16th affirmation. Leave was subsequently granted by the Trial Judge on 12 November 2014[3].

14. Pursuant to the leave granted, P1 issued the originating summons herein on 13 November 2014 (“Committal Proceedings”).

15. Prior to the first hearing of the originating summons, on 27 November 2014, P1 applied for leave to amend the originating summons and the statement as to contempt and such application was fixed before the Trial Judge together with the first hearing of the originating summons on 3 December 2014 (“1st Hearing”).

16. Wei Xing had filed 2 affirmations, his 1st on 27 November 2014 and his 2nd on 28 November 2014. His 2nd affirmation was filed in support of his application filed on same date to discharge the Amended Injunction Order. This application was also heard at the 1st Hearing, which was dismissed by the Trial Judge then and there, as such application should have been made in the Main Action[4].

17. At the 1st Hearing, the Trial Judge gave leave to P1 to amend its originating summons and other directions including service and filing of further affirmations, and a direction that the amended originating summons be fixed before another judge for a further directions hearing with 30 minutes reserved (“03.12.14 Order”)[5].

18. The amended originating summons (“Amended OS”) and the amended statement as to contempt (“Amended O52 Statement”) were subsequently filed on 29 December 2014, and the 2nd directions hearing was fixed before this court on 28 January 2015 (“2nd Hearing”).

19. Under the 03.12.14 Order, Ds were given leave to file and serve affirmation evidence in opposition to the Amended OS and the Amended O52 Statement within 28 days thereof. Wei Xing did not file any further affirmation evidence after his 1st affirmation, and his 2nd affirmation. No affirmation was filed by ESL or Hu Ying. P1’s solicitor Mr Kong filed a 2nd affirmation, exhibiting a copy of Wei Wen’s draft 2nd affirmation in reply to Wei Xing’s 1st affirmation.

20. Hence, so far as the Committal Proceedings were concerned, all affirmations had been filed, save for the proper filing of Wei Wen’s 2nd affirmation.

21. Two days before the 2nd Hearing, ESL and Hu Ying issued a summons and applied for the hearing of the Amended OS to be adjourned and the present proceedings be stayed generally pending the determination and disposal of HCA 797/2012 or until further order (“Stay Summons”). The Stay Summons was supported by an affirmation of Hu Ying.

22. Mr Kong had filed his 3rd affirmation exhibiting Wei Wen’s 3rd affirmation in opposition to Hu Ying’s affirmation.

23. At the 2nd Hearing, Mr Yu had initially sought an adjournment of the Stay Summons on the ground that ESL and/or Hu Ying wanted to file affirmation evidence in reply to Mr Kong’s 3rd affirmation/Wei Wen’s 3rd affirmation. This was opposed by Ms Tong. Upon Ms Tong indicating that she was prepared to make submissions on the Stay Summons without relying on Mr Kong’s 3rd affirmation/Wei Wen’s 3rd affirmation, Mr Yu decided not to insist on an adjournment of the Stay Summons.

24. In fact, Mr Yu had orally applied for a stay of the Committal Proceedings at the 1st Hearing. Ms Tong informed the court that the Trial Judge made it clear that she did not think that there was any justifiable reason to stay/adjourn the present proceedings and that in any event, such an application had to be properly made. Ms Tong complained that notwithstanding what was said by the Trial Judge, ESL and Hu Ying only took out the Stay Summons very late, almost 7 ½ weeks after the 1st Hearing, an shortly before the 2nd Hearing.

25. Mr Yu did not agree that the Trial Judge had expressed any views on his oral stay application.

26. Neither side had applied for a transcript of the 1st Hearing. I note, however, that on the Trial Judge’s brief notes of the 1st Hearing, there were the words “Don’t think it’s necessary to wait until the main action (HCA 797/2012) finished, but fail to see why these proceedings have to be heard before me”.

27. Anyway, neither Counsel saw any need for the Stay Summons to be referred back to the Trial Judge and was content for this court to deal with the application.

Legal Principles

28. As submitted by Ms Tong, the court has inherent powers and jurisdiction to enforce its own orders, which jurisdiction is separate from any criminal or civil proceedings. It has been said bythe English Court of Appeal in Szczepanski v Szczepanski [1985] FLR 468 that contempt proceedings must be dealt with swiftly and decisively where an application made to adjourn contempt proceedings pending conclusion of criminal proceedings arising from the same facts was dismissed[6] (emphasis added).

29. Ms Tong also referred to H v C (Contempt and Criminal Proceedings) [1993] 1 FCR 1, where the English Court of Appeal held that...

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