Is the Right to be Legally Heard Absolute? | Not for Litigants with Poor Conduct | Application of Hadkinson Order in Hwang Joon Sang & another v Golden Electronics Inc. and Ors

“With respect, I find this behaviour of P shocking. P is not above the law, and P is not entitled to ignore an order of this Court. No person is…

P is hereby reminded that non-compliance with an order of this Court is, or can be, a very serious matter…

Depending on the exact nature of the order and the circumstances of its non-compliance, the party in default can be penalized for contempt, or find itself at the receiving end of a Hadkinson order which takes away its legal rights to be heard…”

– the Learned Master Kenneth Lam, Master of the High Court in Signature Diamond LLC v Phillips Fine Watches Limited [2019] HKCFI 2903

INTRODUCTION

When selecting litigators, tougher is not always better. Litigation as stressed before is, after all, NOT a WWE wrestling match.

In the post CJR era of litigation, litigants who are either (i) intentionally being unreasonable or (ii) unreasonably being difficult (e.g. in this case, the refusal to comply with Court Orders) may find themselves at the receiving end of a Hadkinson order which takes away the defaulting party’s right to be heard.

What is a Hadkinson Order?

A Hadkinson order (with its namesake from the English Authority of Hadkinson v Hadkinson [1952] 2 All ER 567) is an order which can bar a litigant who has ignored a prior Court order (thereby being an act of contempt) from exercising their right to be heard until the breaching party has purged/cured himself of the act of contempt.

An example of a Hadkinson order in action can be found in La Dolce Vita Fine Dining Co Ltd v. Zhang Lan and Others [2020] HKCFI 622, where the Court refused to hear the 1st Respondent unless she complied with an outstanding asset disclosure order. Similarly, in Hwang Joon Sang & another v Golden Electronics Inc. and Ors [2021] HKCFI 1973 (the “Hwang Joon Sang Case”), an Hadkinson Order was imposed for the intentional failure of the 1st to 7th Defendants to comply with a disclosure order. The key factors that the Court will consider in deciding whether to impose a Hadkinson Order include:

  1. Is the party against whom the order is sought in contempt?
  2. Is there an impediment to the course of justice?
  3. Is there any other effective means of securing compliance with the court’s orders?
  4. Should the court exercise its discretion to impose conditions having regard to that question?
  5. Is the contempt wilful (is it contumacious and continuing)?
  6. If so, what conditions would be proportionate?
  7. (see paragraph 39 of the Hwang Joon Sang Decision)

“As I summarised those questions in the case, the court will take into account when exercising the relevant discretion matters such as the gravity of the effect of the contempt, whether it is wilful, and whether there are other means available for securing compliance with the order...

If the contemnor’s disobedience is such that, so long as it continues, it impedes the course of justice in that case, making it more difficult for the court to ascertain the truth or to enforce the orders which it may make, then the court may in its discretion refuse to hear that person until the impediment is removed or a good reason shown why it should not be removed…

The court considers the proportionality principle in deciding whether or not to bar the contemnor, and what conditions to impose”

– the Honourable Mr. Justice R. Coleman, Judge of the Court of First Instance in the Hwang Joon Sang Case

Appeal is No Excuse for Non-Compliance

One of the most common forms of non-compliance which leads to the Court’s resorting to the imposition of Hadkinson orders involves an order for disclosure of assets. Such cases can range from ancillary disclosure obligation from an injunction order to that of an asset disclosure order in matrimonial proceedings.

When confronted with wilful contempt, a defaulting party will usually run deeper into a rabbit hole by challenging the order (as opposed to mitigating the situation by apologizing and purge themselves of the contempt). As observed by the Honourable Court in the Hwang Joon Sang case:

“… as Mr Miu recognises from The Messiniaki Tolmi [1981] 2 Lloyd’s Rep 595 at 602 there are qualifications to that statement including that there may be cases where an appeal by a party in contempt against the very order disobedience of which has put him in contempt, can be shown to be for one reason or another an abuse of the process of the court. In such a case the exception to the general rule as discussed would not apply.”

– the Honourable Mr. Justice R. Coleman, Judge of the Court of First Instance in the Hwang Joon Sang Case

As further illustrated in our case in Hwang Joon Sang, the mere presence of an appeal (or a 20 months belated application for discharge in this case) is not an excuse for non-compliance. It was therefore held by the learned Mr. Justice R. Coleman that:

“the court will not refuse to grant a Hadkinson order simply because there is a legitimate argument that the order that was breached is wrong or should be varied… it is not a denial of justice – against the maxim audi alteram partem – if a party has been given an opportunity to be heard upon terms with which he can reasonably comply”

– the Honourable Mr. Justice R. Coleman, Judge of the Court of First Instance in the Hwang Joon Sang Case

In the Hwang Joon Sang Case, a Hadkinson order was ultimately imposed upon the 1st to 7th Defendants, thus the Defendants effectively lost the right to be heard at their own discharge application. The case serves as an important reminder that non-compliance with a Court Order, no matter the circumstances, is a very serious matter and parties should, regardless of their views as to the same, comply with Court Orders.

Conclusion

For many in-house counsel, the selecting of the right litigator is a big decision (with the fate of the company they are caring for often being in the hands of who they ultimately choose). So when selecting litigators, always remember:

  1. Tough is NOT always better. Be mindful of litigation conducted expected of parties especially in the post-CJR era;
  2. Over reliance of tough/non-cooperative negotiations with focus on ‘inflection points’ can/will backfire. Leveraged negotiations if pursued, needs tact; and
  3. Always comply with Court Orders. Contumacious and continuing disobedience of Court Orders will have adverse consequences.

Solicitor, ONC Lawyers

Joshua Chu is a Litigation Solicitor qualified to practice in Hong Kong. Before becoming a lawyer, Joshua worked in the healthcare industry serving as the IT department head at a private hospital as well as overseeing their procurement operations.

Since embarking upon his legal career, his past legal experience includes representing the successful party in one of Hong Kong’s first cryptocurrency litigation cases as well as appearing before the Review Body on Bid Challenges under the World Trade Organization Government Procurement Agreement concerning a health care industry related tender.

Today, Joshua’s practice is mainly focused in the field of dispute resolution and technology law.

Aside from his legal practice, Joshua is currently also a Senior Consultant with a regulatory consulting firm which had been founded by ex-SFC Regulators as well as being a management consultant for the Korean Blockchain Centre.

Paralegal (Pending Admission), Ravenscroft & Schmierer (Solicitors & Rechtsanwälte)