Civil contempt – breach of court orders for disclosure of documents – appropriate sentence – whether mitigating factors warranting non-custodial sentence
D1 and her daughter, D2, were suspected of misappropriation of the assets of a company (“C”) before it was wound up. C’s liquidator (“L”) obtained two court orders requiring Ds to disclose 25 classes of documents relating to C. Ds eventually produced some of these documents late (the “Post-Deadline Documents”). The Judge found Ds guilty of contumacious and intentional contempt of court for breach of the orders. Ds had since apologised unreservedly to the Court and D2 had conducted a thorough search for other documents (the “Post-Judgment Search”). The present hearing was to sentence Ds. D1 was almost 80 years old and in frail health.
Held, imposing a fine on Ds, that:
- Before L applied for leave to commit for contempt, Ds had been steadfastly uncooperative since the first order was made. They led L to believe there were more documents than they ultimately disclosed. These were aggravating factors which, at first blush, would have justified an immediate custodial sentence of three months for each of Ds.
- In the context of civil contempt, the fact a contemnor was a first offender, as here, did not carry much weight. Further, if a custodial sentence was justified, medical conditions counted for little.
- Notwithstanding, Ds’ apologies had been reinforced by genuine efforts to purge the contempt. The Post-Judgment Search demonstrated that what was apparently a “woefully inadequate” production of documents was in fact all that Ds could have disclosed, save for bank statements which L was able to obtain from the banks.
- The Court would not permit wealthy persons to buy their way out of prison, but this was not such a case. While these contempt proceedings created a sensational picture of two wealthy ladies in a well-known family wriggling their way out of an extensive breach of court orders, in fact L’s “success” was less than 30 percent. While Ds brought suspicion on themselves, the actual impact of their breaches on L was not substantial.
- Ds were each fined HK$200,000. The coercive function of any sentence was spent since there was no basis to expect any further documents to be produced. Purging of the contempt at an exceptional speed even before sentence was a strong mitigating factor. The loss of reputation from the finding of guilt was already a huge punishment. There was no suggestion that Ds would repeat the contempt and no point in sending two truly remorseful persons to prison.