CHEUNG WING FAI v. COMMISSIONER OF POLICE

HCAL68/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 68 OF 2004

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J U D G M E N T

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1. The applicant was a police constable who was adjudicated bankrupt on his own petition.  As appeared from his petition, he was indebted to 21 creditors, three financial companies and in respect of 18 credit cards, for approximately HK$815,000.  

2. The applicant petitioned for bankruptcy on 5 March 2002 and his Commanding Officer prohibited him from drawing arms on 13 March 2002. 

3. He was subsequently charged under Regulations 3(2)(e) of the Police (Discipline) Regulations, Cap.232 as follows :

“PC 51346 CHEUNG Wing-fai, of Hong Kong Police Force, you are charged that from 14 March 2002 onwards, in Hong Kong you fail to be prudent in your financial affairs by amassing unmanageable debts of about HK$814,167.19 and US$1,503.94, which serious pecuniary embarrassment arising from your financial imprudence has impaired your operational efficiency, contrary to PGO 6-01(8).”

4. PGO 6-01(8) is in the following terms :

“8.   A police officer shall be prudent in his financial affairs.  Serious pecuniary embarrassment stemming from financial imprudence is regarded as a circumstance which impairs the efficiency of an officer and will result in disciplinary action.”

5. The applicant was found guilty by the Appropriate Tribunal on 6 October 2003.  Under the Police (Discipline) Regulations, the Appropriate Tribunal was a Superintendent of Police.

6. The Appropriate Tribunal referred the matter to a senior police officer (SPO), under Regulation 11(6) which provides :

“(6)    Where a defaulter pleads guilty or is found guilty and the Appropriate Tribunal considers that the punishment which it can award is insufficient, it shall not make an award but shall—

(a)    endorse the Defaulter Report to that effect;

(b)    send the Defaulter Report to a senior police officer,

(c)    inform the defaulter of that action,

and, subject to these regulations, the senior police officer may make an award which he shall communicate to the defaulter personally.”

7. On 15 October 2003 SPO made an award of Severe Reprimand and in addition to that punishment he made an award of Compulsory Retirement with deferred benefits, in accordance with section 14(1)(c) of the Police (Discipline) Regulations.  The award, however, was subject to confirmation by the Force Discipline Officer and the applicant was reminded of his right to appeal under Regulation 15.  

8. The award was confirmed and there was a further appeal under Regulation 15 to the Commissioner by petition and the appeal was considered by Deputy Police Commissioner (Management) (DPC (Man)) on 26 January 2004 who confirmed the finding of guilt as well as the award.

9. This is the applicant’s application for judicial review against the decisions of the Appropriate Tribunal, the senior police officer and the DCP (Man). 

10. Mr Nicholas Y.K. Lau appeared on behalf of the applicant.  He relied on five grounds.

11. In order to understand those grounds it is necessary for me to deal with some background material.  The applicant had given a statement on 13 March 2002 in which he said that he incurred the liabilities because he was helping his elder brother Cheung Yuen Fu who had been in financial difficulties since the middle of 1992.  

12. His brother Cheung Yuen Fu gave a statement on 8 April 2002.  In that statement, Cheung Yuen Fu also claimed that the applicant had helped him financially because of his financial difficulties.  In answer to Question 16, he had this to say :

“Q(16):  Do you think the reason of Ah Fai’s bankruptcy is to help you?

A(16):    I think I got Ah Fai into trouble.  But for my business failure, I would not have been chased for repayment.  The large amount of debts Ah Fai owed, credit cards and personal loans, were all used to repay debts for me.  So, the only reason of Ah Fai’s bankruptcy was to help me.”

13. At the hearing before the Appropriate Tribunal, the applicant’s statement dated 13 March 2003, his bankruptcy order dated 28 May 2002 and a copy of the order prohibiting him from drawing arms and ammunition were agreed by the applicant, his defence representative (SIP David Hung) and the prosecuting officer (SIP Yiu Chong Leung) to be admitted as evidence without further proof.  His statement was admitted as PE2 (PE2).

14. In addition, there is a memorandum dated 4 September 2003 signed by the applicant, his defence representative as well as the prosecuting officer in the following terms :

“A disciplinary proceeding is being held at FDAU Hearing Room 2, adjudicated by SP LEE Ying-min on 2003-09-04.  The following evidence is agreed by the Prosecutor, SIP YIU Chong-leung, SDVC PKSDIV, the defaulter PC 51346 and the Defence Representative, SIP David HUNG, UB WF/DIV.

A statement of Mr CHEUNG Yuen-fu dated 2002-04-08 (Defence witness).”

This statement was produced as DE4 (DE4).

15. I am bound to say that when I first read the Form 86A and the applicant’s skeleton submissions I thought the applicant would be submitting that the Appropriate Tribunal was bound to accept the contents of those statements as true.  Mr Lau told me that was not his contention.  He rightly accepted that the Appropriate Tribunal was entitled to accept all or part only of those statements, but he contended the Appropriate Tribunal could only reject all or part of those statements for good and sufficient reasons.  He submitted that the Appropriate Tribunal rejected the explanation given in those statements without any valid reason.  By explanation I referred to the applicant’s claim that he incurred the liabilities in order to help his elder brother who was in financial difficulties. 

16. The explanation is important in two respects according to Mr Lau.  First, he relied on the judgment of the Court of Appeal in Leung Fuk Wah v. Commissioner of Police [2002] 3 HKLRD 653 where at 669, para. 79, Cheung JA said :

“79.    Serious pecuniary embarrassment is treated seriously because it is regarded as a circumstance which impairs efficiency.  Imprudence is necessary in order to exclude financial problems due to unforeseen and compassionate circumstances which the Force Police clearly recognized should be treated sympathetically.”

Mr Lau argued that if the explanation had been accepted by the tribunal, it might have concluded that the applicant’s financial problems were due to “unforeseen and compassionate circumstances”.  Secondly, even if the Appropriate Tribunal were to conclude, as they might well have done, that even if the explanations were true imprudence had been proved, the reason why the applicant was in financial difficulties must be relevant to the award.  As Mr Lau put it, if the applicant’s liabilities were incurred because of gambling or the applicant living beyond his means, that was likely to be treated quite differently for the purpose of the award, then where, although imprudent, he incurred the liabilities because he was trying to help his elder brother out of the elder brother’s financial difficulties.

17. So the central issue in this application is whether or not the Appropriate Tribunal was entitled to reject the explanation given in the two statements.  This is what the Appropriate Tribunal said :

“11.    The defaulter claimed that he borrowed the money to help his elder brother’s garment business.  However, there was no documentary proof to support the defaulter’s claim.  The defaulter’s claim in this respect was not convincing at all.  The defaulter’s critical financial situation was caused by his imprudence in managing his own financial affairs and as a result, he incurred serious pecuniary embarrassment in having an unmanageable debts of HK$814,167.19 and US$1,503.94.”

18. Mr Lau criticized this by saying that the Appropriate Tribunal was wrong to say that there was no documentary proof to support the defaulter’s claim.  Mr Lau said that there were documentary evidence.  He said, indeed, they had been attached to DE4.  He claimed that at the hearing before the Appropriate Tribunal, the applicant was advised that it was unnecessary to produce such documentary evidence and that was why they were detached from the statement which was eventually agreed.  However, this is a point which had not be mentioned in Form 86A or in the applicant’s affirmation.  This is also denied by the respondent.  I do not think I can rely on it.  Moreover, the documents have been produced as Exh. CWF-9 in the affirmation of applicant affirmed on 28 May 2004.  Exh. CWF-9 comprised 40 such documents, but Mr Lau accepted, as is apparent from an examination of these documents, that they did not show any loan by the applicant to his elder brother.  So I think the Appropriate Tribunal was, in any event, right in saying that there was no documentary proof to support the applicant’s claim. 

19. The Appropriate Tribunal also said that the defaulter’s claim in this respect was not convincing at all.  I do not think one could fault them on that.

20. I turn to the 1^st ground of Mr Lau :

“a)    Whether the decision of the AT to find the Applicant guilty of the disciplinary charger is illegally made because his decision was founded upon consideration that cannot be lawfully taken into account, namely that there was no documentary evidence in support of the agreed evidence, or by the disregard of relevant considerations, namely that the admitted evidence had been agreed by both the prosecution and the defence without further proof; …”

21. Despite the language of this ground, Mr Lau explained that he was not submitting that the Appropriate Tribunal was bound to accept the statements because they were agreed to be admitted without further proof.  So his ground is really that insofar as the Appropriate Tribunal rejected the explanation given in those statements, they were rejected for bad or insufficient reasons.  For the reasons that I have already given, I do not think that this is a valid ground.

22. I turn to the 2^nd ground :

“b)    Alternatively, whether the decision of the AT to the Applicant guilty of the disciplinary charge without basing his decision on any positive finding of facts in respect of one of the elements of the charge is unreasonable/irrational; …”

23. Mr Lau’s point is a very simple one.  He said the Appropriate Tribunal, having rejected the explanation given by the applicant, did not go on to make any positive finding, on the reason why the applicant incurred his substantial liabilities.  So the decision is unreasonable or irrational. 

24. With respect to Mr Lau I do not think that this can be right.  I do not see how the Appropriate Tribunal could find, e.g., that the applicant incurred his liabilities because of gambling or lavish living, as Mr Lau suggested, when there was no evidence to that effect before them.  What they were entitled to do and did was to look at the totality of the applicant’s liabilities and conclude it was financially imprudent.

25. The 3^rd ground related to the decision of the SPO and was to the effect that his decision was illegal because his decision was founded upon consideration “there cannot be lawfully taken into account, namely that there was no oral and documentary evidence in support of the agreed evidence, or by the disregard of relevant considerations, namely that the admitted evidence had been agreed by both the prosecution and the defence without further proof”.

26. The relevant paragraphs are paras. 6 and 7 :

“6.    Each of the elements of the offence has been clearly proved.  Accordingly, in accordance with Reg. 14(1)(a)(i) of CAP 232, I confirm the finding of “Guilty” by the Appropriate Tribunal in respect of Charge “A”.

7.    Turning to the matter of the award.  Charge A is an extremely serious disciplinary offence.  I have examined the evidence and it is clear that you accumulated debts in a variety of ways including loans and credit cards.  What is the apparent from the evidence is how you disposed of the money.  You claim that you accumulated the debts attempting to assist your brother when his business deteriorated.  Your brother supports this claim in a statement.  What I find surprising is that you did not submit any documentary evidence to support this contention and, although your brother made a statement that was presented to the adjudicating officer as evidence supporting your claim, he did not give verbal evidence to the tribunal and, thereby, offer himself for cross examination.  The absence of documentary evidence and the failure of your brother to support your claims in person, particularly as you state that it was to assist him that you incurred your debts, raise serious doubts in my mind as to the veracity of your claim.”

27. It is correct that there was no documentary evidence to support the contention, it is also correct that he did not give verbal evidence and made himself available for cross-examination.  At one time I thought it was suggested that the applicant had been misled by the prosecution or by the tribunal into not calling his elder brother as a witness.  Indeed, that he himself was misled into not giving evidence.  Both have been denied by the respondent and are not supported by the transcript.  The relevant part of the transcript has been produced.  It is quite clear that the applicant was advised of his right to give evidence and to call witnesses. 

28. As I have said, it was made clear by Mr Lau that it was not the applicant’s case that because he had not given evidence and because his brother had not given evidence, any of the tribunals was obliged to accept the content of the statement as true.  So I do not think there is anything in this ground of appeal either. 

29. I turn to the 4^th ground, which related to the decision of DPC Man.  It is said that it was based on an error of fact and was therefore unreasonable and irrational.  The complaint of the applicant was directed to para. (c) of the decision :

“(c)    According to the Defaulter’s statement, he and his elder brother Mr. Cheung Yun-fu are very close.  Mr. CHEUNG Yun-fu wanted to declare bankruptcy in 1997 but did not proceed with it because he was told that he could not apply for bankruptcy.  He then solely relied on the Defaulter to repay his debts knowing that the money was coming form overdraft of credit cards and loans from finance companies.  On the other hand, the Defaulter never enquired the total amount of debts amassed by his elder brother but just simply continue to borrow money until bankruptcy.  It is not logical for family members as close as described by the Defaulter not to discuss the total amount of debts involved and to consider options to meet the obligations.  It is therefore hardly convincing that one kept on asking for money and the other kept on paying whilst Mr. CHEUNG Yun-fu displayed very little concern about the ability of the Defaulter in raising the money.  It also appears very strange to me also that despite his heavy debts, Mr. CHEUNG Yun-fu was able to find a “friend” to give him money to open a furniture shop and allow him to register as the owner of the furniture shop claiming that he was only drawing $8,000 salary per month.  I have serious doubts as to the veracity of the Defaulter’s explanation about the true reason in amassing the huge debts.”

30. The applicant made three complaints.  First, in relation the statement that “he then solely relied on the defaulter to repay his debts,” the applicant says that the elder brother did not solely rely on the defaulter to repay his debts.  I was referred to Cheung Yuen Fu’s statement, in particular his answers to Question 15, which says :

“Q(15):    Do you know his financial situation?

A(15):    At the beginning, I asked him if he was able to manage in lending me so much money.  He said my younger brother, i.e., Cheung Kwai Fa would help him in repaying the minimum amount to the credit cards and all his salary, deducting his living expenses, would be repaid to the banks and finance companies.  So he could manage the situation. …”

I do not think that this shows that DPC Man was wrong at all.  On the evidence it was quite clear that it was the applicant who lent him money. 

31. Another complaint was directed to the statement that “on the other hand, the defaulter never inquired the total amount of debts amassed by his elder brother …”.  It is said to be incorrect because the applicant in his statement in answer to Question (4) said :

“… However, I really have no idea about how much my eldest brother actually owed.  I asked him about that, but he was unable to tell me an exact amount because he himself didn’t know how much he was indebted.”

And Cheung Yuen Fu said in answer to Question (8) :

“Q(8):     Every time you borrowed, did you make the initial request or did Ah Fai voluntarily offer to help you.

A(8):       I first made request every time.  I didn’t want him to know the total amount I owed.  So I only tell him how much I would like to borrow when I was demanded by the creditors.”

32. Again, there is nothing in this point.  It is quite clear that the applicant never inquired in the sense that he never insisted on an answer.  If this could be regarded as an error, I am of the view that it is of no significance.  

33. The third complaint was to the statement that Mr Cheung Yuen Fu “was able to find a ‘friend’ to give him money to open a furniture shop …”.  I was referred to Mr Cheung Yuen Fu’s statement, in particular his answer to Question 2.

“Q(2):    You said you are an owner of furniture shop.  Why can you open the furniture shop when you are still in debt?

A(2):    The furniture shop is not mine.  My friend financed the shop and let me run it.  Since the shop is registered under my name, I used the owner of furniture shop as my occupation.”

34. DPC (Man) has not misinterpreted the evidence.  I do not believe the third complaint has been made out.

35. The 5^th ground is as follows :

“e)    Alternatively, whether the decision of the DCP MAN to dismiss the Applicant’s appeal against the finding of guilty without basing his decision on any positive finding of facts in respect of one of the elements of the charge is unreasonable/irrational.”

This is the same as the 2^nd ground, and is unsupportable for the same reasons.

36. To sum-up the applicant’s case is that since PE2 and DE4 were agreed evidence, in the absence of good reasons, they ought to be accepted as true.  But even if that is correct, in my opinion, there were good reasons for not accepting the explanation as true.  Although it is correct to say that there was no evidence regarding the circumstances in which the applicant incurred his debts.  In my opinion the fact that he had incurred liabilities as described earlier in the judgment is ample evidence to justify the finding that he had been financially imprudent.  As for the award, the only reason given challenging the award is that none of the tribunal was able to come to any positive finding as to why the applicant incurred his substantial liabilities.  But that is not a good reason for me to conclude that the award is unreasonable.

37. So for the above reasons, the application is dismissed.

38. I make an order nisi that the respondent is to have the costs of this application, to be taxed if not agreed.