HKSAR v. LEE MING TEE AND ANOTHER

HCCC 191/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO. HCCC 191 OF 1999

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J U D G M E N T

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1. The original trial of these defendants was terminated on 22 March 2002 in circumstances that are well-known and therefore do not need repetition. Suffice it to say that the prosecution expert witness, an accountant, had not disclosed to the prosecution or to the defence matters which he ought to have disclosed well in advance of his giving evidence, and which may well have affected his status as an independent expert, quite apart from other germane matters.

2. The retrial was not then fixed but later, in early June, the date was fixed as 4 November 2002. That date was later than I would have preferred but it took into account what was stated to be the availability and commitments of leading counsel who had represented both defendants at the original trial which had commenced on 5 November 2001.

3. I was informed on 9 October 2002 that none of the leading counsel would be instructed for the trial. In that event, an earlier date for trial could have been given, certainly two months earlier. I do not know whether the decision to withdraw instructions from these leading counsel was a decision born out of necessity or a tactical decision, or even when it was made. Nonetheless, the court was not informed of this fact earlier. It ought to have been informed as soon as the decision was made. The indications are that it was made some time ago. The inference I have drawn is the decision not to inform the court was a deliberate one. If those indications and my inference are correct, they constitute a breach of the solicitors' duty to the court.

4. The first intimation to the court by the solicitors for the 1st defendant that an application would be made to stay the trial conditionally upon payment of the defence costs was made by letter dated 5 August, received on 6 August this year. An estimate of the length of such hearing was given as two to three days. A date was requested for an early hearing "in accordance with counsel's diaries." Quite apart from the fact that the estimate given of the length of the hearing seemed unrealistic, no dates were given of counsel's availability, nor was the identity of any counsel given. It is to be noted that this letter of application was despatched over four months after the termination of the original trial. No satisfactory explanation has been given for this, though some mention was made of correspondence on the topic with the Department of Justice. That remains one of the unsatisfactory aspects of the timescale adopted by the solicitors for the 1st defendant.

5. At that stage, the court timetable did not permit an early hearing of such predicted length. This was communicated to Messrs Haldanes, together with an inquiry as to the basis of such an application. By letter of 8 August, received on 9 August, it was contended by Messrs Haldanes that reliance was placed upon the Basic Law and a decision of Saied J in R v Au Shui Yuen, Alec, [1991] HKPLR 71, a copy of which was helpfully supplied. The estimate was repeated as two to three days. A date "in accordance with counsel's diary, around the middle of September" was sought.

6. I was away from Hong Kong from 9 August until 28 August, but more pertinently, I was due to be in England from 6 September until possibly 27 September, to hear evidence and speeches in a civil case proceeding in Hong Kong. The parties were accordingly informed that no date could be given until my return on 28 August. It was relevant to know if the planned hearing in England was to proceed.

7. On 16 August, whilst I was on leave, Messrs Haldanes had sent a further summons seeking a hearing date, this time applying to set aside the Letters of Request which had themselves been ordered on 24 June. Inevitably a hearing date for this was subject to the circumstances set out earlier. Neither of the two applications to be made could be heard by any other judge. The new application was estimated to last one day.

8. Upon my return from leave, 28 August, my clerk immediately informed Messrs Haldanes that the only certain available date for a one day hearing of an application to set aside the order in respect of the Letters of Request would be 30 September in view of my duty commitment in England, but that there was a prospect of that commitment finishing earlier, that is by 20 September. The indication of the earliest date was corrected to 4 October by letter of 30 August, and later to 2 October.

9. A telephone conversation between my clerk and a member of Messrs Haldanes' staff resulted in the latter indicating that it was desired that the application to set aside the order should be dealt with first and then the matter of the conditional stay would be pursued. At that stage, no one had informed the court that there was a planned hearing pursuant to the Letters of Request in Arizona in the United States of America on 8 October. Messrs Haldanes were told to stand by for a hearing date between 23 and 27 September.

10. The correspondence from Messrs Haldanes clearly indicated that the application to set aside my order was regarded and to be treated as having priority over the application to stay the trial conditionally, the latter having ceased to feature in the correspondence. On 5 September, Messrs Haldanes wrote that their counsel was available between 25 and 27 September.

11. I returned to Hong Kong with effect from 20 September. On that date, Messrs Haldanes were informed by letter that the hearing would be on 25 September to meet counsel's availability. By letter dated 23 September, received by the court on 24 September, Messrs Haldanes gave notice that on 25 September, at the commencement of the court hearing, I would be asked to recuse myself from all further proceedings in relation to these two defendants.

12. The hearing in respect of the application to set aside my order for the Letters of Request took place in chambers on 25 September. I gave my decision then and delivered a full judgment two days later on 27 September. The application for recusal had to be heard in open court, and I adjourned it until 27 September, after delivering that judgment. I gave a short judgment in respect of that recusal application a few minutes after that short hearing, in which I did not call upon Mr Cooney for the prosecution. Both judgments are to be handed down in due course.

13. At the conclusion of those proceedings on 27 September, a date was fixed for the hearing of the conditional stay application to suit counsel's convenience on 9 October. One day was allowed by agreement of all counsel.

14. Having set out all the relevant chronology and background, albeit in condensed form, I will now deal with the principal aspects of this application.

The merits of the claim for costs

15. The trial was terminated after 76 days. The jury were but a few minutes away from retiring to consider their verdicts. The expense associated with that length of trial is considerable on any view. I do not consider it helpful to speak in terms of thousands or millions of dollars. The actual expense is irrelevant. The fact is that the two defendants had incurred over that period costs out of their own pockets. They are not legally aided. No blame for the termination of these proceedings can be attributed to them.

16. There is no suggestion that any fault can be attributed to the Department of Justice or any lawyers employed within it or instructed by it. The prosecution is conducted on behalf of the Special Administrative Region, not as is often erroneously stated, on behalf of the government. It is conducted in accordance with the law and in the interests of the public. A defendant is presumed to be innocent until the contrary is proven. It is not just to inflict upon defendants financial burdens for procedures which prove to be inconsequential and indeterminate where they are not responsible for their premature, abortive end.

17. Applying proper principles, I have no difficulty in concluding that the defendants should, in principle, receive reimbursement in respect of their reasonable and proper costs incurred over that period of 70-odd days, their having to face and fund another trial due to commence on 4 November 2002.

The court's power or jurisdiction to make a costs order simpliciter

18. In the course of his submissions, Mr McCoy for the 1st defendant conceded that I had no power to make any such order simpliciter, either by statute, in the court's inherent jurisdiction, or under the broad principles encompassed by the Bill of Rights Ordinance. He has argued instead that I only have the power, however based, to make an order for costs if coupled with a stay of further proceedings until such costs are paid.

19. At first sight, and on continuing consideration, there seems to me to be an inherent lack of logic in such a situation. There are circumstances, which I need not identify but which will be well-known to all practitioners experienced in the criminal jurisdiction, in which subsequent events may have the effect of nullifying wholly or in part any antecedent costs order in favour of a defendant if such order were put into effect immediately. I bear in mind that Mr McCoy has indicated that the financial resources of the defendants are not such as to prevent proper representation being afforded regardless of the position with regard to the costs of the aborted trial.

20. I will in due course deal with the matter of the conditional stay, but at this stage, one can see the obvious attraction for the defendants in Mr McCoy's argument. The process of taxation to assess what are reasonable costs, which includes arguments for and against in the cases of both defendants, will be time consuming and may involve appellate consideration and could endure for a substantial period of time, perhaps several months. There may be an interest in delaying the trial process. We are already a decade beyond the events which are the subject of the indictment.

21. Mr John Reading for the Department of Justice also contends that I have no power or jurisdiction to make a costs order simpliciter.

22. There are two ordinances relating to costs which we have had to consider.

23. The Criminal Procedure Ordinance, Cap. 221, makes provision for costs to be awarded against a convicted person - section 72(1) - to the prosecution. A further section, section 73A, added in 1978, gives a court power to award costs to a defendant in the event of an acquittal, payable out of public revenue. The basis of this costs provision is "such sums as appear reasonably sufficient to compensate that person for any expenses properly incurred by him in or about the defence."

24. The Costs in Criminal Cases Ordinance, Cap. 492, has no provision relevant to the application under consideration, the thrust of the ordinance being in respect of wasted costs. It does, however, by section 4 provide for an order for costs in a defendant's favour where he is not tried for an offence for which he has been indicted or committed for trial. Neither ordinance therefore makes express provision for the payment of defence costs in the circumstances under consideration.

25. However, section 73A of the Criminal Procedure Ordinance and section 4 of the Costs in Criminal Cases Ordinance provides justly for a state of affairs where there is finality as far as proceedings against a defendant are concerned.

26. A number of decisions was reviewed by both counsel and relied upon in support of the contention. In Attorney General v A Deputy District Judge, [1991] HKLR 507, Jones J granted an application to quash an order for costs granted to a defendant arising out of an adjournment obtained by the prosecution in the District Court. Unfortunately, the judge heard argument only by Crown counsel for the prosecution. He was persuaded that the District Court had no jurisdiction to make the order. He considered section 9(3) of the Criminal Procedure Ordinance, which I shall consider later.

27. The Court of Appeal in Attorney General v Lam Sau Kee, [1993] 2 HKC 330, Yang CJ presiding, considered whether it had power by statute or in its inherent jurisdiction to grant costs and decided in an extremely brief judgment that it had not. No reference was made to section 9(3) of the Criminal Procedure Ordinance. The decision, however, is confined to the Court of Appeal. It is not authority for saying that the trial court has no such jurisdiction.

28. Again, the Court of Appeal's approach was identified in R v Ma Kwok Ming, Cr. App. Cases 451 of 1994. A District Court judge had refused to award costs to an acquitted defendant. The Court of Appeal held that it had no jurisdiction to review the District judge's decision, which was in any event an exercise of a discretion. The authority does not go beyond that narrow ambit.

29. In R v Man Wai Kuen, Cr. App. Cases No. 403 of 1990, the Court of Appeal held that section 88XX(3)(a) was inconsistent with the Bill of Rights Ordinance and therefore unconstitutional. The appellant, who had paid for his own defence costs, had his conviction set aside and a retrial was ordered. He applied for the costs of the original trial. The effect of the decision was that he was entitled to make such application. To exclude him from so doing was effectively to deny him access to the court's discretion.

30. The Court of Appeal regarded itself as empowered to declare that a person whose conviction had been set aside through some defect and who was ordered to be retried could apply for the costs of that defective trial. I see no difference as a matter of logic between that situation and one in which a trial is aborted or indeterminate and a retrial is ordered.

31. Bokhary JA, as he then was, encapsulated the situation presented to that court as follows:

"What subsection (3)(a) does is it divides such persons into those who are ordered to be retried and those who are not. While leaving the latter free to seek costs out of public funds, it precludes the former from doing so."

32. He went on to say:

"All appellants whose appeals against conviction have been allowed, including those who have been ordered to be retried, are entitled to ask this court to exercise its discretion to order that their costs be paid out of public funds."

33. This approach is entirely consistent, if I may respectfully say so, with my interpretation of section 9(3) of the Criminal Procedure Ordinance which had not been fully argued before Jones J in Attorney General v A Deputy District Judge. This section had received earlier consideration by Mr Commissioner O'Connor in R v Chu Kwan Kong, [1977] HKLR 371. Defendants who had been acquitted applied for costs. Their application was refused on the basis that there was no statutory power to award costs against the prosecution.

34. That statutory power now exists, but regardless of the absence of the statutory power, I have respectfully to disagree with the learned commissioner. It was conceded at that hearing that in England there was statutory power to award costs to an acquitted defendant. The commissioner first considered section 4(1) of the Application of English Law Ordinance, Cap. 88. Because the English statute giving jurisdiction to award costs to an acquitted defendant was not included in the schedule to the section, he concluded that the Hong Kong courts had no such jurisdiction. The Application of the English Law Ordinance was not incorporated into Hong Kong Law after the Hand Over so I do not need to consider that as a starting point.

35. Section 12(3) of the Supreme Court Ordinance, Cap. 4, does subsist and is relevant:

"The criminal jurisdiction of the High Court shall consist of, (a) original jurisdiction of a like nature and extent as that held and exercised in criminal matters by the High Court of Justice and the Crown Court in England respectively............."

36. To that declaration of jurisdiction, which has survived the Hand Over, must be added section 9(3) of the Criminal Procedure Ordinance:

"Subject to the provisions of this ordinance and to such rules and orders and any other enactment applicable thereto, the practice and procedure in all criminal cases and matters shall be as nearly as possible the same as the practice and procedure from time to time for the time being in force for similar cases in England."

37. And for the purposes of this judgment, I have underlined the words "practice and procedure" and "shall be as nearly as possible the same as the practice and procedure from time to time for the time being in force."

38. The English practice and procedure in relation to costs is derived from the 1986 Costs in Criminal Cases Regulations and Part II of the parent statute, Prosecution of Offences Act 1985. In May 1991, the then Lord Chief Justice, Lord Lane, introduced the Practice Direction Costs in Criminal Proceedings which was to have, and had effect in the criminal courts in England and Wales, "Where the court, in the exercise of its discretion, considers an award of costs in criminal proceedings or deals with criminal legal aid costs and contributions."

39. The English courts have for some time now and before that Practice Direction, made awards of costs to defendants in varying circumstances in the exercise of its discretion. The Practice Direction established clearer guidelines as to how the discretion should be exercised and the extent of it in order to achieve a degree of consistency.

40. Paragraph 1.5, for example, states:

"Where a court orders that the costs of a defendant, appellant, or private prosecutor should be paid from central funds, the order will be for such amount as the court considers reasonably sufficient to compensate the party for expenses incurred by him in the proceedings. This will include the costs of proceedings in the lower courts unless for good reason the court directs that such costs are not included in the order, but it cannot include expenses incurred which do not directly relate to the proceedings themselves, such as loss of earnings."

41. The commissioner, Mr Commissioner O'Connor, in my view overlooked a number of matters but particularly the significance of the wording of section 9(3) which I have underlined. I had no doubt that the significance of the two sections identified and the practice and procedure in the English courts in relation to costs is that, subject to any contrary provision in the ordinance or any other ordinance or rules, the English practice and procedure as to costs is to be followed on a continuing basis. The general sense of the phrase "for the time being" is of time indefinite.

42. In the light of what I regarded as a crystallisation of my view and which was contrary to what both Mr McCoy and Mr Reading were putting to me, I adjourned for a short period to allow them time for further consideration. At the end of that, there seemed to be a consensus that the court did after all have the power, and two further decisions were put before me, one emanating from the late and much lamented Ross Penlington J, who was second to none in his assertion and articulation of the principles of the common law. He held that the Hong Kong court should award costs as laid down in the then 1981 English Practice Direction, applying section 9(3) of the Criminal Procedure Ordinance, and he added, "In accordance with order 62 rules 2 and 3 of the Rules of the Supreme Court", [see R v Ng Yui Kin & Others, [1983] HKLR 356].

43. It is my view that the provisions of order 62 also apply in support of the jurisdictional point in respect of costs, but because the note at order 62 rule 21 in the Hong Kong White Book 2002 is not in my view a happy one, I have deferred further consideration of this aspect to a more appropriate time and setting.

44. The other case, a decision of the Court of Appeal, which also included Penlington JA, was referred to, in R v Man Wai Kuen. It is R v Kwok Mun Yau & Lok Man Chiu, [1989] HKLR 396. Mr McCoy incidentally appeared for one of the appellants in that case. Silke J, V-P, presided and expressed the collegiate view of the court. He reviewed the successive English Practice Directions. This decision of course predated the 1991 English Practice Direction. The court was also concerned to emphasise the words in section 9(3), "as nearly as possible", to allow for general Hong Kong circumstances in applying English practice and procedure. But the principle so clearly enunciated by Penlington JA six years earlier was honoured. The unfettered discretion of the court falls to be exercised in the light of the circumstances of each particular case.

45. I am satisfied I have that unfettered discretion, and that if I am satisfied that it is just and proper that these defendants should have their costs of the aborted trial paid out of public revenue, I have the power to make the appropriate order.

The application for a conditional stay

46. Having decided that I have power to make an order simpliciter, it is not necessary for me to consider whether I have the power to make the order coupled with a conditional stay of the proceedings, i.e. stay of the pending trial. The question is should I couple it with an order for such a stay conditional upon the payment of any such costs ordered?

47. The authorities to which Mr McCoy has referred as the basis of his arguments as to jurisdiction are essentially concerned either with civil proceedings where a range of circumstances have applied, or criminal proceedings in which the prosecution has been dilatory, negligent or worse and the defendant has been put to expense in terms of costs, extra work, or quite simply the resolution of a case against him has been delayed while the prosecution puts its house in order.

48. Nor is this a case of impecunious defendants who, though impecunious, fall outside the protective umbrella of the legal aid fund and can only fund their defence on the strength of a reimbursement of past costs lost. No one has suggested that the defence cannot proceed to trial under present circumstances. On the contrary, I have been assured that there is no such problem.

49. There is no abuse factor here in the sense that the prosecution authority reprehensibly pursued a course which brought the present position about. This has already been made clear and accepted. On the other hand, the application on behalf of the defendant was in my view unreasonably late. It should have been pursued expeditiously after 22 March 2002.

50. I do not consider that whatever the form and/or content of the exchanges with the Department of Justice that it was sensible or acceptable to delay this application for over four months. It may well have been that the mistaken belief that the court did not have jurisdiction to make a costs order simpliciter led to some tactical concern as to when was the best time to make the application. It was certainly deliberately relegated in the order of priority to applications to revoke my order in relation to the Letters of Request and to recuse myself as the judge seized of the retrial and any ancillary proceedings.

51. There is nothing to suggest that the defendant or his co-defendant will be prejudiced in his defence at the retrial by my not making an order for a conditional stay. In my judgment, there is no sound argument for my making any such order.

When should the order for costs be formulated and effective?

52. Since there is no financial urgency, the proper time for this to be dealt with is after the conclusion of the trial. There are circumstances or events which I do not need to detail which may well affect how I should approach this ultimate stage. I can conceive of certain situations in which an injustice could result if an order were made which effectively transferred to the defendant a lump sum of money when some future event might call upon him to pay a like or other substantial sum. In practical terms, there may be the need for an accounting exercise of some kind at the end of the day. A premature order for payment to the defendant of the sum of money which will in any event require a good deal of work to identify may mean considerable wasted effort and could risk the dissipation of a substantial sum of money.

53. I am satisfied that it will not disadvantage either defendant in the conduct of his defence if I postpone the assessment and any consequential payment until after the trial, when all relevant factors can be taken into account in identifying the appropriate form of the order.

54. As far as the costs of this application are concerned, I propose to postpone consideration of those until the end of the trial. There may be matters as yet unknown which would have some bearing on that order too.