R. v. CH'NG POH

1993, No. 223
(Criminal)

IN THE HIGH COURT OF HONG KONG

CRIMINAL JURISDICTION

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J U D G M E N T

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1. In July 1994, the Defendant, Ch'ng Poh, was convicted of conspiracy to defraud and publishing a false statement with intent to mislead. I presided over his trial. In addition to imposing sentences of imprisonment, I ordered him to pay the taxed costs of the prosecution up to a maximum of $15,000,000.00. The Defendant's appeal against his conviction was dismissed by the Court of Appeal. The costs order made against him was also upheld. His application to the Privy Council for special leave to appeal against his conviction was refused last week on 29th July.

2. The prosecution had not taken any steps to tax its costs while the Defendant's various appeals were pending. On 31st July, two days after the end of the proceedings, the case file was handed to a costs clerk to begin the taxation of the prosecution's costs. On the following day, 1st August, he made enquiries as to whether any recognisance had been deposited with the Treasury of the Supreme Court as a condition of the grant of bail. He discovered two things:

(i) A large sum had been deposited with the Treasury. This has since been ascertained to have been $7,500,000.00. With interest, the sum is now in the region of $8,100,000.00.

(ii) A representative of Katayork Co. Ltd., ("Katayork"), duly authorized by the Defendant, had that very day sought the release of the recognisance. Since the recognisance was held in an interest-bearing account, it could not be released immediately.

It was against that background that I was asked on the following day, 2nd August, to order that the recognisance, and the interest which had accrued on it, be held by the Registrar until after an inter partes summons could be heard. I made the order sought. Section 72(2) of the Criminal Procedure Ordinance (Cap. 221) enables an order for costs made in criminal proceedings to be enforced in the same manner as if it were an order for costs made in civil proceedings. Since an order freezing the assets of a civil debtor liable for costs may be made in appropriate cases in aid of execution of the order for costs, I took the view that it was at the very least arguable that such an order could be made in this case.

3. The Crown's inter partes summons is now before me. I have decided that the Defendant should be restrained from withdrawing the recognisance, or causing it to be withdrawn, until the order for costs has been taxed. It is not as if the Defendant has been anxious to have the recognisance returned to him. He had been entitled to request that it be returned to him ever since 15th January when his bail pending appeal was revoked. The disadvantage which the Defendant would suffer by not having access to the money for the next few months is nothing compared with the disadvantage which the Crown would suffer, if the Defendant was permitted to withdraw the money now, and if the Crown was in consequence unable to enforce the order for costs which it has.

4. The Defendant claims that the $7,500,000.00 lodged with the Treasury came from Katayork, and that the money belongs to it. Even if that is correct, it does not affect the matter, because a company search on Katayork shows that all its issued shares are held either by the Defendant, or by his wife, or by two limited companies, all of whose issued shares are held directly or indirectly by the Defendant and his wife.

5. The Defendant also claims that there is no evidence of any intention on his part to dissipate his assets. It is true that there is no direct evidence of that, but it is obvious that the Defendant is intending to prevent the prosecution from being able to enforce the order for costs directly against the recognisance. Otherwise, the Defendant would have been content to let the recognisance remain on deposit with the Treasury. In any event, there was some evidence of an intention to dissipate his assets some months ago when a substantial creditor of the Defendant successfully applied for a Mareva injunction against the Defendant. Although there is no material before me today relating to that application, I am aware of what it involved, because the original ex parte order was made by me following a hearing which lasted about 2 hours. The reasons which had caused me then to accept the creditor's fear of the dissipation by the Defendant of his assets continue to apply today.

6. Finally, the order which the Crown asks me to make today is not an order which will have the effect of the Crown obtaining priority over the Defendant's other creditors, as the Defendant submitted. The effect of the order is that the $7,500,000.00 continues to be amongst the Defendant's assets available to satisfy the claims of all his creditors.

7. There is one other matter I should mention, and that relates to the nature of these proceedings. The summons which was issued was issued in the criminal proceedings. The justification for that was that the order being sought was an order to enforce an order for costs in the criminal proceedings. In view of the fact that the summons was issued in the criminal proceedings, I gave directions for the hearing of the summons to be in court, rather than in chambers, and I am today wearing my red robes. However, it is arguable that the proceedings in which the summons should have been issued should not have been the criminal proceedings, but new civil proceedings, on the footing that this is a civil claim to enforce a debt, even though that debt was incurred as a result of a criminal trial. The Crown appreciates that the point is not free from doubt, which is why the Crown has prepared a duplicate set of civil proceedings on the assumption that the present proceedings are not properly constituted. I am making the order today which I am, because I am satisfied that the proceedings are properly constituted, but I leave it to the Crown to decide whether it wishes to protect itself by issuing that duplicate set of proceedings, and by obtaining an order in those proceedings similar to the one which I am making today in these proceedings.