HKSAR v. MA PUI TUNG

HCMA1109/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO. 1109 OF 2008

(ON APPEAL FROM ESS 21077 OF 2007)

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J U D G M E N T

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1. The appellant was a practising solicitor in Hong Kong.  On 16 July 2003, after a contested hearing, the Solicitors Disciplinary Tribunal of the Law Society of Hong Kong (“the Disciplinary Tribunal”) determined that he was guilty of several charges it had laid against him.  He was subsequently convicted and penalties were imposed.  He was also ordered to pay a portion of the Disciplinary Tribunal’s costs.  The appellant appealed those decisions and the orders made (CACV221/2003).  On 11 November 2003, his appeal was dismissed by the Court of Appeal (Rogers VP, Le Pichon JA and Stone J) (save for one aspect of the order as to costs).

2. On 26 August 2008, the Court of Appeal (Rogers VP, Le Pichon JA and Stone J) dismissed the appellant’s application for leave to appeal to the Court of Final Appeal (out of time) from their order dismissing his appeal from the decisions of the Disciplinary Tribunal.

3. Prior to the proceedings referred to in paragraph 1 above, the appellant had commenced proceedings against the Disciplinary Tribunal for leave to apply for judicial review (HCAL421/2001).  That application ultimately did not proceed.  The appellant and the solicitors then acting for the Law Society consented to an order being made on 14 November 2001 to the effect that the costs of and arising from those proceedings be paid by the appellant, to be taxed if not agreed.

4. The costs referred to in paragraph 3 above were taxed and the allocatur dated 7 January 2003 certified that the sum of $39,549 was payable by the appellant.  He did not pay that sum.  On 11 November 2003, the Law Society, as creditor, petitioned for an order that the appellant as its debtor be declared bankrupt (HCB19884/2003).  The petition was based on the inability (or refusal) of the appellant to pay the $39,549 taxed costs.

5. On 17 May 2004, Chung J, in a written judgment ordered that pursuant to the creditor’s petition the appellant be declared bankrupt. 

6. On 28 May 2004, Chung J, in a written judgment dismissed an application by the appellant pursuant to s. 98(1), Bankruptcy Ordinance (Cap. 6) (“the Bankruptcy Ordinance”) to rescind the bankruptcy order.

7. On 8 June 2004, the appellant filed notices of appeal against the decisions of Chung J of 17 and 28 May 2004 (CACV168/2004).  

8. On 5 September 2008, the appellant filed an amended notice of appeal and grounds of appeal in CACV168/2004.  There has as yet been no determination of those matters.

9. On 30 November 2004, the Official Receiver was appointed the receiver and trustee in bankruptcy of the estate of the appellant.

10. S. 43A(6) of the Bankruptcy Ordinance requires an undischarged bankrupt to submit to the trustee in bankruptcy on each anniversary of the making of the bankruptcy order against him, a statement of his earnings during the preceding year and details of any property he may have acquired in that period. 

11. Pursuant to s. 43A(7) of the Bankruptcy Ordinance, it is an offence to fail or to refuse to comply with section 43A(6) — punishable by imprisonment for up to 6 months.

12. On 17 May 2007, the 3^rd anniversary of the bankruptcy order made against the appellant, he failed to, or as it transpires refused to, submit to the trustee in bankruptcy the statement required under section 43A(6).  

13. On 25 February 2008, Saunders J refused an application by the appellant for leave to apply for a judicial review of the decisions of the Director of Public Prosecutions (“DPP”) :

(i)  not to prosecute for perjury the principal witness who gave evidence against the appellant in the Disciplinary Tribunal hearings;

(ii)  refusing to stop the Official Receiver taking action pursuant to s. 43A(7) of the Bankruptcy Ordinance; and

(iii) refusing to give reasons for both decisions.

(HCAL15/2008).

14. On 23 September 2008, the Court of Appeal (Rogers VP and Le Pichon JA) dismissed the appellant’s appeal from the decision of Saunders J.  

15. On 14 July 2008, Hartmann J (as he then was) refused an application by the appellant and two other applicants seeking declaratory relief inter alia to the effect that the Bankruptcy Ordinance was unconstitutional (HCAL48/2008).

16. The appellant has filed a notice of appeal against the judgment of Hartmann J.  That appeal has not been determined.

17. On 27 September 2007, the appellant was charged pursuant to s. 43A(7) with failing to comply with s. 43A(6).  On 18 September 2008 after a contested hearing before Magistrate Ms B. Chainrai (“the magistrate”), he was convicted and fined $1,000 (ESS21077/2007).

18. This is his appeal from that conviction.

The appeal

19. The appellant’s complaints against the magistrate’s decision, range far and wide as can be seen from a perusal of the appeal bundle and his perfected grounds of appeal dated 12 February 2009.

20. In the course of the hearing before the magistrate and before me, he has sought to call into question the integrity of the Law Society in applying for an order in bankruptcy to recover the sums due to them.  He has attacked the integrity of Chung J in his conduct of that application.  He has referred me to recent proceedings commenced by him in his capacity as a representative of the “Right to Inherent Dignity Movement” against the HKSAR government (HCMP2332/2008) wherein orders are sought for declarations inter alia that :

(1) “the HKSAR government is in breach of the Joint Declaration, the PRC constitution, the Basic Law and the International Covenant on Civil and Political Rights (‘ICCPR’) because it has not established a Constitutional and Human Rights Court”;

(2) “Hong Kong residents are subject to the rights and entitlements contained in the PRC constitution”;

(3) “the criteria for appeals in civil matters to the Court of Final Appeal is unconstitutional”;

(4) “judges in the High Court are not capable of giving effective remedies in civil causes or matters where human rights issues are raised”; and

(5) “there should be a judicial post of “Lord Chancellor”.

There were other orders and declarations sought but the above are an indication of the nature of those proceedings.

21. In the grounds of appeal proper in this matter, the appellant asserts that the magistrate was in error in not acceding to his application to stay the proceedings against him because the Bankruptcy Ordinance is unconstitutional and that she has not given any or any sufficient reasons for that refusal.

22. The same complaint is made of the determination by the magistrate that there was a case to answer and her decision to convict him of the charge.

23. He complains that the magistrate was in error when she failed to deal with his submission that the Official Receiver was acting unlawfully when it did not oppose the bankruptcy petition against him.  He complains that the magistrate was in error when she failed to deal with his submission that the proceedings taken by the Disciplinary Tribunal against him and determined in July 2003 were unlawful.

24. In the course of the hearing I have endeavoured to explain to the appellant that :

(a)  the propriety of the proceedings initiated by the Disciplinary Tribunal were not matters relevant to this appeal;

(b)    the propriety of the proceedings before Chung J were not matters relevant to this appeal; and

(c) the decision by the Disciplinary Tribunal to proceed to recover the debt due to them in the manner that they did was not relevant to this appeal.

25. I do not believe that I have succeeded in this endeavour.  

26. In the course of discussions the appellant confirmed that the main thrust of his grounds of appeal however caste was that :

“The Bankruptcy Ordinance in its application offends the right to the inherent dignity of a creditor bankrupt and in particular is an infringement of the bankrupt’s inherent dignity and that his right to privacy and free will are also improperly compromised”

27. In the end result his submission is that the Bankruptcy Ordinance is inconsistent with the Bill of Rights and should be struck down for that reason.  He said that :

“… a creditor bankruptcy petition is an affront to the absolute right to human dignity”

28. As a separate collateral issue the appellant submitted that Hong Kong required a constitutional and human rights court to be established and that this should be “separate from the common law”.  As I have said he has sought elsewhere a declaration to that effect.

29. In addition to the above, he submitted that an order in bankruptcy is a criminal conviction and as such must by reason of that be scrutinised with the utmost care and attention. 

30. The above is in part the background.  Leaving aside all of the collateral issues the issue for me to determine is : was the magistrate correct when she said, as she did :

“I found no merit in the Appellant’s submissions that the Bankruptcy Ordinance as a whole or in part was unconstitutional nor do I find that it impinges on the human rights of the individual who is adjudged bankrupt.”

There was no other live issue in the trial.  There was no issue that the applicant was required to comply with section 43A(6) and was liable to be prosecuted pursuant to section 43A(7). 

31. As part of the appellant’s submissions in this appeal, he has referred me to the Amended Notice of Appeal filed by him in CACV168/2004 which is his appeal from the decisions of Chung J.  Adopting the particulars of those grounds of appeal in this appeal, he submits, inter alia, that the reasons why it is said that the Bankruptcy Ordinance is unconstitutional appear in that document.  

32. The orders sought in those proceedings are to the effect that the bankruptcy orders and costs orders be set aside and that costs be to the appellant (on an indemnity basis).

33. To attempt to put the appellant’s submissions into perspective is not an easy task.  His submissions and assertions range far and wide.

34. From the assertions made in the documents to which I am referred and which have been adopted as part of the appellant’s submission before me, it is apparent that the appellant’s submission is that the Bankruptcy Ordinance generally and as applied to him is unconstitutional.  There is to this a substrata and that is that the Law Society’s proceedings against him were unfairly conducted and wrongly decided.

35. It is to be observed at the outset that this is not the first time these matters, or some of them, have been before the courts in Hong Kong. 

36. The extent of the litigation in which the appellant has been engaged and the nature and tenor of the pleadings and submissions I have sighted clearly indicate that the appellant is obsessed with the fact that a bankruptcy order was made against him notwithstanding that the very debt which gave rise to his bankruptcy arose from a consent order made on his behalf.  Chung J in his judgment in HCB19884/2003 paragraph 3 said of the debt owed by the appellant to the Law Society :

“    For present purpose, it is unnecessary to summarise the reasons for doing so, but as a matter of fact, the debtor and the solicitors then acting for the petitioner consented to an order being made… The relevant parts of the consent order dated 14 November 2001 read:-

  ‘… The costs of and arising from the captioned proceedings be paid by the [debtor] to [the petitioner] to be taxed if not agreed’ ”

37. It is noteworthy that amongst the submissions the appellant made to Chung J in opposition to the creditor’s petition were submission to the effect that the appellant had the means to pay the amount due but refused to do so. 

38. Throughout the course of the various actions commenced by the appellant, judges of the Court of First Instance and the Court of Appeal have consistently doubted the fundamental premise of his complaints, namely that the Bankruptcy Ordinance in general and in its application to him in particular is unconstitutional. 

39. As I have earlier mentioned (paragraph 13 above), one of the matters before Saunders J in HCAL15/2008 was the appellant’s application for leave to bring proceedings for judicial review of the decision made by the DPP not to stop the Official Receiver from prosecuting the appellant for not filing his annual return pursuant to section 43A(6).

40. In refusing leave, Saunders J said :

“28.   The decision challenged by Mr Ma is a refusal or deliberate failure, by the Department of Justice: ‘to control and stop the Official Receiver from prosecuting Mr Ma for an offence under the illegal Bankruptcy Order No 19884/2003’.

29. The Official Receiver has requested that Mr Ma should file what was described as ‘an annual return’ in relation to the bankruptcy.  Mr Ma, believing the bankruptcy to be illegal, has not filed that document.  The Official Receiver has commenced a prosecution against Mr Ma in Eastern Magistracy under ESS 21077/2007.  Mr Ma has written to the Department of Justice requesting that this prosecution be stopped on the basis that the bankruptcy is illegal.  He says he has received no formal reply to that request, and he treats the failure of the Department of Justice to reply as a refusal to stop the prosecution.

30. It cannot be argued on any basis whatsoever that the bankruptcy order is illegal.  Mr Ma elected to bring quite separate proceedings against the Disciplinary Tribunal, which proceedings he compromised by a consent order involving the payment of costs.  He did not pay those costs.  He was heard by the court in the application to have him declared bankrupt, and his argument that there should be no bankruptcy order was rejected.

31. That must be the end of the matter.  There is no reasonably arguable basis upon which the DPP ought to involve himself in the conduct of the bankruptcy by the Official Receiver.”

41. The appellant appealed the judgment of Saunders J (CACV64/2008).  On 23 September 2008, the Court of Appeal (Rogers VP and Le Pichon JA) dismissed his appeal.  In so doing they observed that the decision to prosecute the appellant for failing to file a return pursuant to section 43A(6) was entirely proper.  The court said (per Rogers VP) :

“13.   As regards the prosecution brought at the instigation of the Official Receiver based on the failure of the appellant to file an annual return, as the judge indicated, there is simply no basis for considering it is anything other than proper.”

42. It is apparent from the ruling of Hartmann J (HCAL48/2008) on 14 July 2008 that the issue of the constitutionality of the Bankruptcy Ordinance was canvassed extensively before him both in oral and written submissions.  At paragraph 4 of his ruling, he said :

“At the outset let me stress that in addition to hearing oral submissions this morning, I have had the opportunity to read detailed submissions filed several days ago.”

43. Of the appellant’s submissions Hartmann J said :

“5. Speaking in the broadest of terms, it is, as I understand it, the case of the applicants that Hong Kong’s present bankruptcy laws – as, at least, they apply to actions instituted by creditors – are unlawful.  They are unlawful because, in the context of modern human rights law, they undermine and violate the dignity of the individual.”

and shortly after this :

“7. The first remedy sought is a declaration that the Bankruptcy Ordinance itself is unconstitutional as it violates the right to inherent dignity of all Hong Kong residents, that right being guaranteed under the Basic Law and various conventions to which Hong Kong has submitted itself.

8.   In addition, there are a series of six further declarations sought.

9.   Three of those declarations are to the effect that a bankruptcy petition brought by a creditor is not civil but criminal in nature and amounts to a private criminal prosecution.  Arising out of that assertion, a declaration is sought that it is unconstitutional for a public authority to take out a private prosecution under the Bankruptcy Ordinance.  Such a public authority, by way of example, would be the Law Society, one of the respondents.

10. Expressed in the broadest terms, declarations are sought which would prevent the Law Society and other public authorities from bringing any petition for bankruptcy against any person.”

44. Hartmann J when considering the matters relevant to the exercise of the discretion to grant leave for judicial review said that the test he must apply is the “arguability test”.  He said in this regard :

“… A reasonably arguable case is one which enjoys a realistic prospect of success.”

45. Of the appellant’s case and the merits of the appellant’s submissions, he said :

“22.   Certainly, if a person is declared bankrupt, there goes with it, in our society today, an impairment of dignity.  Mr Ma has argued that this is a fault of the legislation itself and it seems to be his submission that this is one of the factors that gives bankruptcy proceedings a criminal nature.  I have difficulties with that submission.  The legislation seeks in a rational way to bring about a determination of matters concerning the financial affairs of an individual bankrupt so that creditors receive as much of their money as the law considers proper in accordance with their rights inter se and the fundamental rights of the debtor are themselves protected.

23. When a person, by means of a bankruptcy petition, has lost the right for a period of time to manage his own financial affairs, that may have regrettable consequences.  Certain professional bodies may be of the opinion that, if one of their members has been declared bankrupt, that person should not continue to practise the profession.  But that is not a term of the Bankruptcy Ordinance itself.  

24. It is, in my view, inevitable, when a person’s financial estate is to be placed in the hands of a trustee, that the trustee must gather together the estate and must draw up a balance sheet of debits and credits so that the rights of the debtor can be protected together with the rights of creditors.  There is simply no other way of proceeding.”

46. Of the application for a declaration that a bankruptcy petition brought by a creditor is not civil but criminal in nature and thus amounted to a private criminal prosecution, Hartmann J said :

“20.   I do not accept that bankruptcy proceedings are criminal in nature.  I will explain further what I mean.

21. The Bankruptcy Ordinance has been a subject of amendments over the years.  The ground for bringing bankruptcy proceedings by a creditor is a single ground, namely, the inability to pay a debt or a number of debts.  A bankruptcy petition brought by a creditor, if successful, brings about an immediate protection of a debtor’s financial estate.  The estate is placed in the hands of a trustee who has certain obligations to protect the fundamental interests of the debtor and also the interests of creditors.”

and :

“… Bankruptcy proceedings are not penal, they do not seek to punish anybody.”

and :

“25.   I accept that a trustee in bankruptcy does have an obligation to examine the possibility of any criminal conduct on the part of a bankrupt.  But, with respect, an auditor doing the audit on a publicly listed company also has a responsibility to check that there is no criminal conduct to be found in the financial management of that company.  But I do not see how it can be suggested that the audit requirement is criminal in nature. 

26. Statutes recognise realities.  The Bankruptcy Ordinance does no more than recognise that persons in financial difficulties may, wittingly or unwittingly, commit offences.  Trustees have an obligation to investigate such matters.  But I do not see how that obligation can render bankruptcy proceedings criminal in nature. 

27. In my judgment, it is misconceived to suggest that they are criminal.  Bankruptcy proceedings are not penal, they do not seek to punish anybody.

28. … The written submissions begin with a citation from the trial of Adolf Eichmann in Jerusalem as to the nature of evil.  In addition, Mr Ma spoke of The Merchant of Venice, a play by William Shakespeare, in which Shylock seeks his pound of flesh.  More fundamentally, perhaps, was the constant reference to ‘the stigma’ attaching to bankruptcy proceedings which has echoes, said Mr Ma, of Victorian practices.

29. It is regrettable, although no doubt a fact of life, that persons who are declared bankrupt suffer a loss of reputation.  That loss of reputation arises out of the fact that they have been found to be unable to pay their debts.  But I fail to see how it can be argued that the Ordinance seeks in some way to bring about that loss of reputation or in some way to ‘punish’ persons who are declared bankrupt.”

47. Hartmann J determined that the application was misconceived.  He was satisfied that the Bankruptcy Ordinance was not arguably unconstitutional.  He was satisfied that the Bankruptcy Ordinance generally pursues legitimate objectives. 

48. Before me Mr Ma accepted that there must be bankruptcy legislation but not the Bankruptcy Ordinance in its present form.

49. Undeterred by the ruling of Hartmann J and notwithstanding that he has appealed same, the appellant has pursued before me many, if not all, of the arguments he advanced before Hartmann J. 

50. Throughout the course of his written and oral submissions, the appellant has referred me to the various articles of the ICCPR and not the corresponding articles in the BOR.  The appellant has emphasized both before me and before Hartmann J (see paragraph 45 above) the preamble to the ICCPR, which reads :

“Considering that, in accordance with the principles proclaimed in the Charter of the United Nations, recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom justice and peace in the world. 

Recognizing that these rights derive from the inherent dignity of the human person,

Recognizing that, in accordance with the Universal Declaration of Human Rights, the ideal of free human beings enjoying civil and political freedom and freedom from fear and want can only be achieved if conditions are created whereby everyone may enjoy his civil and political rights, as well as his economic, social and cultural rights,

Considering the obligation of States under the Charter of the United Nations to promote universal respect for, and observance of, human rights and freedoms,

Realizing that the individual, having duties to other individuals and to the community to which he belongs, is under a responsibility to strive for the promotion and observance of the rights recognized in the present Covenant,

Agree upon the following articles:”

51. In particular, he asserts that the Bankruptcy Ordinance offends the dignity of those who are subject to its operation.  In this regard he appears to equate dignity with “undignified or lacking in dignity” which is to misconstrue the intent of the preamble.  As Hartmann J noted, it may be that being declared bankrupt brings with it degrees of embarrassment or even stigma.  That is not what the preamble to the ICCPR was addressing.

52. The appellant’s attempts to categorise a creditor’s petition under the Bankruptcy Ordinance as the prosecution of a criminal offence (thereby invoking the protections guaranteed by Article 11, BOR) is and was doomed to fail.

53. As Hartmann J observed (see paragraph 45 above), the loss of reputation which may occur upon a declaration of bankruptcy is not a punishment.  A petition seeking a declaration that a person be bankrupted is not a criminal charge.  Being declared bankrupt is not a conviction.

54. The appellant submits that the expression imprisonment in the various articles of the ICCPR should be read to embrace the restrictions and limitations which may be imposed on a bankrupt, for example a bankrupt is limited in the conduct of his own affairs by the operation of the Bankruptcy Ordinance.  It is apparent from a reading of the respective articles in context that such a proposition is untenable.

55. The appellant seeks to argue that the Bankruptcy Ordinance and its application to those adjudged to be bankrupt is in contravention of Article 26 of the ICCPR (Article 22 of the BOR).  Article 22 reads :

“All persons are equal before the law and are entitled without any discrimination to the equal protection of the law.  In this respect, the law shall prohibit any discrimination and guarantee to all persons equal and effective protection against discrimination on any ground such as race, colour, sex, language, religion, political or other opinion, national or social origins, property, birth or other status.”

56. The argument of the appellant is that the treatment of an undischarged bankrupt is discriminatory.  I do not agree.  There is no discrimination in the nature of that which is contemplated by Article 22.  The Bankruptcy Ordinance does no more than provide a structure for the proper regulation of the affairs of a bankrupt and his creditors.

57. The appellant submits that the operation of the Bankruptcy Ordinance infringes Article 11 of the ICCPR (Article 7, BOR).  Both articles read :

“No one shall be imprisoned merely on the ground of inability to fulfil a contractual obligation.”

58. This submission is without merit.  The limitation placed on a bankrupt by the operation of the Bankruptcy Ordinance do not come within that which is contemplated by Article 7.  The analogy between restrictions and limitations on the assets and income of a bankrupt and the parameters of the Article are untenable

59. In similar vein it is suggested that the limitation imposed on a bankrupt by the operation of the Bankruptcy Ordinance offends the following articles of the ICCPR and the BOR :

(1) Article 10, ICCPR (Article 6, BOR) :

  deprivation of liberty;

(2) Article 8, ICCPR (Article 4, BOR) :

  slavery or servitude;

(3) Article 7, ICCPR (Article 3, BOR) :

  torture or inhuman treatment;

(4) Article 16, ICCPR (Article 13, BOR) :

  the right to recognition everywhere as a person before the law.

60. The substance of the appellant’s submission is again to the effect that to deprive a bankrupt of the control of his assets and income offends these articles.  The fallacy in the appellant’s arguments are manifest from a reading of the individual Articles and the accepted intent behind each.  The Articles have no relevance to the circumstances of an individual subject to administration as a bankrupt.  Finally, he submits that the effect of the operation of the Bankruptcy Ordinance upon a bankrupt destroys his “inherent dignity” and that, as a consequence, deprives the bankrupt of his rights guaranteed by those articles.  There is no merit in this submission.

61. The appellant submits that the combined legal and practical effects of the operation of the Bankruptcy Ordinance can be described by the following :

“Be Alert : I am a bankrupt, a suspect of frauds or frauds in the making, and I am under investigation.  Stay away.  Be Alert.  He is a bankrupt, a suspect of frauds or frauds in the making, and he is under investigation.  Stay Away.” 

whilst this may be the appellant’s perception of the operation of the Bankruptcy Ordinance that is not the reality.

62. I do not, in this judgment, intend to traverse each and every allegation and assertion made in the hearing before me and in the material to which I am referred by the appellant.

63. It suffices to say this.  The appellant does not accept that the operation of the Bankruptcy Ordinance and its administration is constitutional.  He has sought on more than one occasion to establish this.  He has hitherto been unsuccessful and the result of this appeal will be no exception.

64. There is, to my mind, no substance in the appellant’s assertions.

65. The appellant’s grounds of appeal, submission, declarations sought and at times intemperate criticisms of the members of the Law Society, those responsible for the administration of the Bankruptcy Ordinance and judges of this court are many and varied.  To summarize them is not an easy task.  Nor would it be profitable. 

66. I have considered the host of material before me, as did the magistrate.  She was satisfied that the criticisms made generally and specifically were without merit.  The magistrate was satisfied that the assertions made that the Bankruptcy Ordinance and in particular what the appellant describes as the Creditor Bankruptcy Petition Scheme were not as the appellant submitted, unconstitutional.  I agree. 

67. The appeal is dismissed.