MATHIAS ORTMANN (A National of Germany) v. THE SECRETARY FOR JUSTICE

HCMP 1912/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 1912OF 2014

(ON AN INTENDED APPEAL FROM HCMP NO. 116 of 2012)

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

1. This is an application for leave to appeal against the decision of V Bokhary J of 30 June 2014 in varying a Restraint Order (originally granted on 18 January 2012) made under the Mutual Legal Assistance in Criminal Matters Ordinance Cap 525 [“the Ordinance”]. By the variation, the learned judge reversed her earlier decision to grant a variation to permit the 7^th Defendant to use the property subject to the Restraint Order to pay his German tax liabilities.

2. The 7^th Defendant now seeks leave to appeal against the decision of 30 June 2014.  He had not applied for leave from the court below.  His summons seeking leave from this court was issued on 4 August.  Originally, based on advice given to him, he had lodged an appeal on 25 July 2014 without seeking leave in CACV 158 of 2014.

3. We are of the view that, like an appeal against an order for the variation of the terms of an injunction in ordinary civil proceedings, the appeal is interlocutory in nature.  Though we were referred to several authorities on the question whether a decision is interlocutory or final (and we have read them), there is no dispute that the relevant test is the application approach: a matter is “interlocutory” unless determination of the application will finally dispose of the action or finally determine a substantial issue in the action, whichever party succeeds on the application.  In the present context, the application for variation will not determine a substantial issue in the action which concerns with the enforcement of an external confiscation order, see section 27 of the Ordinance.  The making of a Restraint Order is only an interlocutory step.  The complete process will involve the realisation of assets and distribution of the proceeds, see sections 9 and 10 of the Second Schedule to the Ordinance.  As the judge said in her judgment, there is inherent power on the part of the court to grant and re-visit variations.  Thus, if the 7^th Defendant failed to get the variation to allow him to use the property to pay tax in the first place, he could apply for a similar variation later if there was change of circumstances.  More pertinent in the present context, the reverse must also be true.  It is not a final determination of the terms of the variation.

4. As such, leave is required and an appeal brought without leave is incompetent.  Further, in accordance with Order 59 Rule 2B, the leave application should, in the first instance, be made to the court below.  We reiterate what had been said in Singh Arjun v Secretary for Justice [2014] 2 HKLRD 678 on the importance of observing such practice.

5. In any event, the 7^th Defendant is out of time in seeking leave.  He asked us for an extension of time.  His solicitor said she had acted on mistaken advice from counsel that leave was not required.  By the time she became aware of the objection from the Department of Justice on 28 July concerning the leave requirement, it was already out of time.  Thus, application was made directly to this court. 

6. This court takes the observation of time limit prescribed for seeking leave seriously, see Kiddie China Ltd v Etech Fire Limited HCMP 1673 of 2014, 16 September 2014.  In the absence of good explanation for the delay, this court will not allow an application made out of time to sidestep the requirement of seeking leave from the court below.

7. In the present case, there is only a one line statement in the Affirmation of the solicitor for the 7^th Defendant that they acted on counsel’s advice that the decision of the judge was not interlocutory.

8. Even assuming that to be so, we would not grant extension of time unless we are persuaded that there is merit in the leave application.  On the facts of this case, we do not think the 7^th Defendant has reasonable prospect of success in the intended appeal.  He seeks to challenge the exercise of discretion by the judge.  In our judgment, the judge was correct in holding that the quantum of his German tax liability was a relevant consideration and that he should have been more forthcoming in his earlier application for variation on the quantum.

9. Since it is an application by the 7^th Defendant instead of the German tax authority, in accordance with the well established principle he should give full disclosure of all his means before a variation is granted, see Secretary for Justice v Zhenly Ye Gon [2012] 2 HKC 523.  Question of priority does not come into the picture.  It is clear from the judgment that the judge was not satisfied with his disclosure. 

10. In light of the matters the judge referred to, she was plainly correct in making the order she did on 30 June.  We do not accept the contention that the judge failed to give adequate reasons for her decision. 

11. We dismiss the application for leave.

12. In the light of the above decision, with the consent of the parties, we also strike out the appeal in CACV 158 of 2014 as being incompetent, the requisite leave not having been obtained.