Hong Kong: Sanctions For False Statements Of Truth

A court in Hong Kong has recently handed down significant custodial sentences (imprisonment) on two defendants who deliberately made or caused to be made false statements in court documents required to be verified by Statements of Truth. The recent case of re Kinform Limited DCMP 947 of 2011 (Kinform) appears to be the first example of such sentences since the civil justice reforms took effect in Hong Kong in April 2009. The case confirms that deliberately false Statements of Truth amount to contempt of court and can be visited with tough court sanctions.

Key points

• A Statement of Truth should always be taken seriously and be made honestly.
• Persons who make deliberately false Statements of Truth in court documents (such as witness statements, expert reports or pleadings) can expect to receive custodial sentences and not only a fine and/or an order of extra legal costs against them.
• The same is true of those who cause others to make a deliberately false Statement of Truth on their behalf or who deliberately mislead their solicitors into making a false Statement of Truth.
• Deliberately making a false Statement of Truth in a court document will be treated under the court's powers of committal for contempt of court.
• It is not necessarily a defence to proceedings for contempt of court in connection with an allegedly deliberate false Statement of Truth that the court document concerned is not actually used at trial; a finding of contempt can still be made if the document verified by a false Statement of Truth is used in court proceedings and is likely to have interfered with the administration of justice (the court proceedings).
• Proceedings for contempt of court in this context can be dealt with by a single judge in a civil court and not necessarily in a criminal court. That said, given the seriousness of a finding of contempt of court, such a finding should only be made pursuant to a criminal standard of proof; namely, beyond a reasonable doubt.
• Where the maker of a Statement of Truth is mistaken but not dishonest, then that does not amount to contempt (although such a mistake in a court document could adversely affect the outcome of the court proceedings for the party on whose behalf the document is used).
• Where a solicitor makes a Statement of Truth on behalf of a client not realising that it is based on deliberately false instructions, the solicitor could be called as a witness in any contempt proceedings against the client. In these circumstances, the protection normally afforded to solicitor-client communications by legal professional privilege may not apply.

Background

Statements of Truth were introduced into civil litigation proceedings in Hong Kong pursuant to the civil justice reforms in April 2009. Court documents such as pleadings (formal statements of case), witness statements and expert reports are required to be verified by a Statement of Truth (RHC O.41A r.2). The wording of a Statement of Truth is prescribed in the court rules (RHC O.41A r.5). One such example is:

Affidavits (or affirmations) are similar to witness statements but are generally used to give evidence at court hearings before a trial and do not require a Statement of Truth; however, affidavits (or affirmations) are also sworn (or affirmed), and if done so dishonestly can also result in contempt of court proceedings.

Facts

In Kinform the plaintiff sued several defendants for the price of goods sold and delivered. The defendants in their defence claimed that the goods were not of satisfactory quality. As part of the defence, the defendants relied on an alleged letter of complaint (the letter of complaint) which they claimed confirmed that the defendants had complained to the plaintiff about the goods before the court proceedings. In particular, the first defendant caused the defendant's solicitor to sign a Statement of Truth as to particulars of the defence that relied on the letter of complaint.

The plaintiff applied for early judgment (without trial) but that application failed in large measure because of the false defence particulars relating to the letter of complaint. The proceedings continued and subsequently the first and third defendants each gave a witness statement (containing a Statement of Truth) that also relied on the letter of complaint.

Following the exchange of documents between the parties, the plaintiff's solicitors became suspicious as to authenticity of the letter of complaint and whether it had been back-dated. The plaintiff's solicitors commenced proceedings for contempt of court against the first and third defendants based on, among other things, the Statements of Truth in the particulars of the defence and the two witness statements. At the beginning of the trial of the plaintiff's claim the defendants effectively abandoned their defence.

Issue

The main issue in the contempt of court proceedings was whether the plaintiff had proved beyond reasonable doubt that the letter of complaint was not authentic and, if so, whether the first and third defendants had deliberately caused to be made or had made false Statements of Truth.

Decision

The court found that the letter of complaint was not authentic and decided that three acts of contempt had been committed; two by the first defendant and one by the third defendant. The first defendant had committed contempt of court by causing the defendants' solicitors to make the Statement of Truth that they had in the particulars of the defence and in making a false Statement of Truth in his witness statement. The third defendant had also committed contempt of court with respect to the Statement of Truth in his witness statement.

The court held, among other things, that it was enough for a finding of contempt to be made that a false document had or was likely to have interfered with the course of justice. Whilst perjury was generally understood to relate to making a deliberately false court oath (for example, at trial), in terms of punishments, the court was content to refer to sentences for perjury (the maximum sentence for which in Hong Kong is seven years).

With this in mind the following passage of the court's judgment on sentencing makes for salutary reading:

The court sentenced the first and third defendants to periods of imprisonment of five and six months respectively. The third defendant came off slightly worse, having been an ex-employee of the plaintiff and, apparently, having shown less remorse than the first defendant.

Comment

As noted, this appears to be the first time that custodial sentences have been handed down in Hong Kong in connection with contempt of court proceedings arising out of deliberately false Statements of Truth. In doing so, the court has sent out a strong message.

Generally speaking, the perceived wisdom is that lower courts may be harsher in these sorts of situations than higher courts. However, irrespective of any appeal by the first and third defendants against the sentences, the court's underlying policy in handing down custodial sentences (as expressed in the above quoted passage) is likely to be favourably reviewed by a higher court.

In many other cases of contempt of court (involving, for example, willful breach of a court order) it not uncommon for a court to hand down a fine or, in more serious cases, a custodial sentence of weeks rather than months. In that light, the two sentences handed down in Kinform are noteworthy.

If that was not bad enough the case has presumably been an expensive exercise for the defendants. In addition to the custodial sentences, the court has also ordered that the defendants pay the plaintiff's legal costs on a higher basis and the overall outcome will presumably have a significant adverse effect on the defendants' livelihoods.