HKSAR v. NGOMA JUMA SHABANI

CACC 214/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 214 OF 2014

(ON APPEAL FROM HCCC NO. 480 OF 2013)

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JUDGMENT
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Hon Lunn VP:

1.  I agree that the appeal against the order of forfeiture made by Patrick Li J on 15 January 2014, following the conviction and sentencing of the appellant, in respect of US$4,500 found in his possession should be dismissed. The appellant had been convicted on his own plea of unlawfully trafficking in 380 grammes of heroin hydrochloride narcotic on 6 June 2013 at Hong Kong International Airport as he attempted to enter Hong Kong, which drugs he had ingested and which he subsequently discharged.

2.  It is clear that at the hearing the prosecution sought the order of forfeiture pursuant to section 56(1) of the Dangerous Drugs Ordinance (“the Ordinance”).[1]  That provides:

“(1) A court may (whether or not any person has been convicted of such offence) order to be forfeited to the Government -

(a) any money or thing (other than premises, a ship exceeding 250 gross tons, an aircraft or a train) which has been used in the commission of or in connection with;

(b) any money or other property received or possessed by any person as the result or product of,

an offence under this Ordinance or a drug trafficking offence within the meaning of the Drug Trafficking (Recovery of Proceeds) Ordinance (Cap 405).”

3.  The first issue that arises is whether or not there was a prima facie connection between the money and the commission of an offence under the Ordinance or the Drug Trafficking (Recovery of Proceeds) Ordinance.  The Court is agreed on this issue.  For my part, I am satisfied that that was established by the Summary of Facts and the antecedent statement in respect of the appellant.  In the former, the appellant accepted that at the time of his interception in Hong Kong International Airport, he was in possession of “cash of US$4,500”[2], and that he was planning to go to Guangzhou to effect a rendezvous, at which he would hand over the dangerous drugs and receive “US$5,000 as a reward”.  He also asserted that the US$4,500 found on him was “related to his mobile telephone business.”[3]  The latter assertion was to be viewed in the context of the acceptance in his antecedent statement, which was provided to the court before sentencing, that he was “a businessman earning US$100 per month.”

4.  At the hearing, the matter in issue was the circumstances in which the appellant was possessed of the money.  The judge rejected the appellant’s testimony that the “US$4,500 was for his business.”[4]  Then, without more, the judge made the forfeiture order.

5.  I agree with Macrae JA that the evidence before the court was “… more than sufficient to ground an inference that the sizeable quantity of US$4,500 on his person was, at the very least, used in connection with an offence under the Ordinance.”[5]  McWalters JA reached a similar conclusion.[6]

6.  The second issue that arises is the basis on which the judge made the forfeiture order, given that he did not specifically address this matter at all.

7.  As noted earlier, the appellant was detained trying to enter Hong Kong.  He was unlawfully trafficking in dangerous drugs.  There was no dispute that he was not a resident.  In those circumstances, clearly he needed to be in a position, if called upon to do so, to establish to the satisfaction of the immigration authorities that he had the means to sustain himself whilst in Hong Kong.

8.  The necessity of being in a position to establish possession of, or access to, sufficient means to sustain oneself as a visitor was addressed, in the context of confiscation proceedings in a drug trafficking case, in the judgment of the Court of Appeal of England and Wales in R v Osei.[7]  In that case, the appellant was found in possession of dangerous drugs and £2,550 in cash on her arrival at Heathrow airport from Ghana.  Of the possession of money, Glidewell LJ said, at 291:

“…if a person wishes to enter this country as a visitor, broadly speaking, he or she has to satisfy the immigration officers that he or she has either in his or her possession or available to him or her somewhere in this country from somebody else, sufficient funds to enable him or her to stay here without charge to the United Kingdom during the period for which he or she wishes to remain here.”

Those requirements apply in most countries, and certainly apply in Hong Kong.  The appellant’s possession of the US$4,500 enabled him to address that need.

9.  Having rejected the appellant’s testimony as to the circumstances in which he was possessed of the money, it is clear the judge was satisfied that section 56(1) of the Ordinance applied to the US$4,500 found in his possession.  However, he did not state which of either of subsections (a) or (b) to section 56(1) applied; or, indeed, whether they both applied.

10.  Such a situation arises not uncommonly.  Having rejected such explanations as to the circumstances of possession of money at the time of unlawfully trafficking in dangerous drugs as have been advanced by the defendant, the court is often not in a position to determine or pinpoint the exact circumstances; and is unable therefore to determine whether section 56(1)(a) or (b) applied.  For example, to determine whether or not the money had been given to the defendant to facilitate his travels in the course of his drug trafficking, or lent to the defendant to enable him to fool immigration officers as to his means.  Or, to determine whether or not the money was his reward as a result of his drug trafficking.  The first set of circumstances permit the inference to be drawn by the court that the money “has been used … in connection with” an offence under the Ordinance.  Alternatively, notwithstanding the defendant’s denial that the monies were related to his drug trafficking, if the denial is rejected by the court and having regard to all the evidence, the second set of circumstances permit the inference that in fact the money was possessed by the defendant “as the result or product of” an offence under the Ordinance, namely as a reward for acting as a courier of dangerous drugs.

11.  However, in my judgment the court would be entitled to determine in such circumstances that section 56(1) applied, if satisfied that the defendant was possessed of the money in circumstances proscribed by either section 56(1)(a) or (b), albeit that the judge was unable to stipulate the specific circumstances in which the appellant possessed the money.  In that regard, with respect, I agree with the observations of V Bokhary J, to which Macrae JA makes fuller reference in his judgment, in her decision at first instance in HKSAR v Chan Chi Wai Jimmy[8], where, having set out the multiple alternatives arising from section 56(1), she said:

“If the inference is that at least one of these alternatives represents the truth, forfeiture can be ordered even though no particular alternative can be pinpointed.”

Having had the advantage of reading the draft judgment of McWalters JA on this point, I regret to say that I respectfully disagree with him.

12.  In the instant case, even if the money was the appellant’s reward for acting as a drug courier, so that section 56(1)(b) of the Ordinance applied, the money could have been “used … in connection with” the offence, so that section 56(1)(a) also would have applied, if the appellant was in possession of the money to facilitate his travels in the course of his drug trafficking, or so that he could demonstrate his means to an immigration office.

13.  In my judgment, the judge was entitled to determine that section 56(1) applied, if satisfied that the appellant was possessed of the money in circumstances proscribed by either section 56(1)(a) or (b), but the judge was unable to specify under which of the circumstances proscribed by the two subsections the appellant possessed the money.  Obviously, the judge would have been entitled to make the same determination if he had been satisfied that both section 56(1)(a) and (b) applied.

Hon Macrae JA:

14.  The appellant appeals, pursuant to leave granted by McWalters JA on 26 November 2014, against an order of forfeiture made at the time of his conviction and sentence in respect of US$4,500 cash, which had been seized from him at the time of his arrest.

15.  The appellant had pleaded guilty to a single charge of trafficking in a dangerous drug, contrary to section 4(1)(a) and (3) of the Dangerous Drugs Ordinance, Cap 134 (“the Ordinance”) before Eastern Magistracy on 8 November 2013, as a result of which he was formally committed to the High Court for sentence.  On 15 January 2014, the appellant confirmed his plea and the facts which established the offence before Patrick Li J and was sentenced to 10 years and 4 months’ imprisonment.  Upon an application for forfeiture then being made by the prosecution, the judge ordered that the entire amount of US$4,500 be forfeited, less HK$1,000 which was directed to be paid to the Director of Legal Aid.

The relevant facts

16.  The facts admitted by the appellant upon his plea were that on 6 June 2013, he was intercepted at the customs arrival hall at Hong Kong International Airport on a flight from Tanzania via Ethiopia and sent to Queen Elizabeth Hospital for medical examination on suspicion that he had secreted dangerous drugs in his body.  When it was subsequently confirmed that the appellant had concealed the dangerous drugs, the subject-matter of the charge, inside his body, he was arrested.  Having stated under caution that he had swallowed heroin, he was placed in the custodial ward of the hospital pending excretion of the drugs.

17.  At the time of his interception at the airport, the appellant had, among his other belongings, US$4,500 in cash as well as a mobile telephone and three SIM cards.

18.  When, after excreting the dangerous drugs over a period of some four days, the appellant was subsequently interviewed by Customs Officers, he said that he had come to Hong Kong on business and was planning to go to Guangzhou after his arrival.  He admitted that he had been asked to swallow 57 pellets of heroin in Tanzania and told the officers that someone would call him upon his arrival in Guangzhou to collect the drugs.  When the heroin had been collected, he would receive a reward of US$5,000.  He claimed that the US$4,500 in cash found on his person when intercepted was money related to his mobile telephone business.

19.  The quantity of dangerous drugs in which the appellant was trafficking was 680 grammes of a mixture containing 380 grammes of heroin hydrochloride, with an estimated street value of HK$565,760.

The forfeiture application

20.  Immediately following the appellant’s sentence, prosecuting counsel made a formal application for the forfeiture of the US$4,500 cash as well as other items and exhibits relating to the case.  Although the specific provision under which he was seeking forfeiture was not specified on the formal written ‘Application for Order for Disposal of Exhibits’, it was spelt out during the ensuing submissions of prosecuting counsel, and all parties were plainly proceeding on the basis that the application was being mounted under section 56(1) of the Ordinance.

21.  Having indicated that the application for an order of forfeiture was opposed, defence counsel called the appellant to give evidence on the issue.  At the end of his evidence, and upon hearing the respective submissions of the prosecution and the defence, the judge made the order which is the subject of this appeal.

The grounds of appeal

22.  The appellant through Mr Ross on his behalf submits, firstly, that the judge failed to identify which aspect or permutation of section 56(1) of the Ordinance had been satisfied in respect of forfeiture; secondly, that there was no sufficient evidence that the money fell within the terms of section 56(1).  Specifically in relation to this latter ground, it was argued that it could not be shown that the money in question “has been used in the commission of or in connection with” a drug trafficking offence under section 56(1)(a) of the Ordinance, or that it was “received or possessed by any person as the result or product of” a drug trafficking offence under section 56(1)(b).

Consideration

Ground 1

23.  The short answer to the first ground is that it is not normally necessary for a judge to identify which aspect or permutation of section 56(1) of the Ordinance is engaged when deciding whether to make an order of forfeiture.  It will usually be obvious from the evidence in a contested trial, or from the agreed facts and other information presented to the court upon the hearing of a plea of guilty, as to what the basis of the application is.  Indeed, one could readily envisage circumstances where both subsections (a) and (b) of section 56(1) were simultaneously engaged.  As the Court in R v Lai Chin Hung [1980] HKC 283 said of section 56(1) of the Ordinance, at 287I:

“Although, therefore, the Ordinance gives the prosecution no assistance by way of presumption on this matter, the intention of the forfeiture provisions seems plain enough. Whenever the court has evidence before it to justify an inference that money or other property, seized in connection with the charge it is asked to try, is connected with an offence, whether or not it finds that the offence charged has been proved, it may nevertheless make the order. If there is prima facie evidence of such a criminal connection then if no innocent explanation is offered the court may – though it would not necessarily do so – find that the connection with an offence has been established.”

24.  In Wong Hon Sun v HKSAR (2009) 12 HKCFAR 877, Sir Anthony Mason NPJ, giving the principal judgment of the Court of Final Appeal, said of the somewhat different statutory regime governing forfeiture in section 28(7) of the Import and Export Ordinance, Cap 60, at 901C:

“On a hearing under s. 28(7) the Commissioner bears the onus of establishing that the seized article is liable to forfeiture, namely that it is the subject of a contravention of the (Import and Export Ordinance) or the regulations. Once this is established the Commissioner makes out a prima facie case for the order for forfeiture of the article and, in the absence of evidence to support an exercise of that discretion to order delivery of the seized article to the claimant, the court will make an order for forfeiture. That is the true position under the (Import and Export Ordinance) follows from the fact that, in the circumstances supposed, the article is liable to forfeiture as an article which was the subject of the contravention of the (Import and Export Ordinance) or the regulations.

It is therefore for the claimant, in order to avoid this outcome, to make out a case for an exercise of the discretion to order delivery of the article to him. He may do this by proving facts to the satisfaction of the court, according to the balance of probabilities, that show that he did not in any way participate in or facilitate, either by design or negligence, the contravention which has resulted in the article becoming liable to forfeiture. To say this is to say no more than that the party who seeks to have a judicial discretion exercised in his favour bears the burden of establishing his case. It is not for his opponent to negative the existence of such a case.”

25.  As the Court in Lai Chin Hung also observed, section 56(1) does not require any specific connection between the money to be forfeited and the conviction of the defendant or, for that matter, of anybody else.  Various alternatives are set out in section 56(1) so as to cast the net as widely as possible.  It has been held by V Bokhary J at first instance in HKSAR v Chan Chi Wai Jimmy [2011] 4 HKLRD 302 at 304, that:

“If the inference is that at least one of these alternatives represents the truth, forfeiture can be ordered even though no particular alternative can be pinpointed.”

Later, at 305, she went on:

“No greater precision than that is required. Requiring greater precision would run counter to the language of the statute and to its obvious purpose, which is to ensure as far as possible that crime does not pay, especially not when the crime involves dangerous drugs. It is to be borne in mind that the drug trade does not involve ledgers and accounts of the kind one can expect to find where legitimate trade is concerned.”

26.  I would agree with those observations to this extent.  In the vast majority of cases, a prima facie connection between the money or other property, the subject of the application for forfeiture, and the commission of an offence under the Ordinance or with a drug trafficking offence within the meaning of the Drug Trafficking (Recovery of Proceeds) Ordinance, Cap 405, will be obvious from the evidence, admissions and other information properly adduced at the trial or hearing (including, for example, the Summary of Facts, antecedent statements, mitigation, etc) and will, in the language of Lai Chin Hung, “justify an inference that money or other property, seized in connection with the charge it is asked to try, is connected with an offence”.  In those circumstances, it would not be necessary for a judge to state the obvious, any more than it would be necessary for him to hear evidence all over again on the issue of forfeiture.  The onus will in those circumstances shift to the one claiming his money or other property back to satisfy the court on the balance of probabilities that he is entitled to have it.

27.  However, there may be cases, for example, where a defendant is acquitted, or where the connection between the money or other property and the commission of an offence under the Ordinance or with a drug trafficking offence under the Drug Trafficking (Recovery of Proceeds) Ordinance is, on the evidence or other information before the court, obviously tenuous so that a judge should identify the basis on which he is relying to forfeit the money under section 56(1), and explain why.

28.  In this particular case, however, a Tanzanian national, earning, according to the information disclosed to the court in his antecedent statement, US$100 per month (which figure was not disputed by his counsel in mitigation), had flown from Dar es Salaam via Addis Ababa to Hong Kong International Airport and was intending to go on to Guangzhou in the mainland, after a short detour to Tsim Sha Tsui, with more than HK$560,000 worth of heroin secreted inside his body.

29.  That evidence and information before the court was more than sufficient to ground an inference that the sizeable amount of US$4,500 on his person was, at the very least, used in connection with an offence under the Ordinance.  The fact that he had made an assertion to Customs Officers when interviewed that the money was related to his mobile telephone business did not prevent such an inference being drawn, any more than it obliged the court to accept the truth of the assertion.  The assertion might have supported his evidence to that effect in as much as it was given when first interviewed, just as a defendant charged with trafficking might persuade a judge or jury that his initial reaction or response upon arrest that he had the drugs for his own consumption lent strength and support to his defence that he was not trafficking.  However, a judge or jury is not obliged to accept such an assertion, nor does it prevent the prosecution from making out a prima facie case for forfeiture on the basis of the evidence and other information properly before the court.

30.  In the present case, the judge, having heard the appellant’s evidence, did not accept that the money related to a mobile telephone business.  He gave reasons why he disbelieved his evidence in relation to the money, describing the appellant as “shifty and not credible”.  In particular, he gave the following examples of the appellant’s shifting evidence:

“He said in his antecedent statement he earned US$100 per month. In the witness box, he said that amount was when he was employed by another person. He actually earned US$250 just before committing this offence.

He first said he earned US$250 per month, but when confronted that he had insufficient money to spend, he then said there were side activities to enable him to earn more. He also said the US$4,500 were his savings and for his business, but subsequently he said part of it was for his travelling expenses and hotel expenses in order to go to Guangzhou.

He committed the offence, he said, because of financial difficulties, mainly in paying school fees. On further questioning, the school fees were only US$500 per year for both children, and yet he had US$4,500 in savings.

I do not find the defendant's evidence credible. I reject his claim that the US$4,500 was for his business and I order that the whole sum be forfeited except HK$1,000, which should be paid to the Director of Legal Aid as requested by defence counsel.”

31.  In cross-examination, the appellant had admitted that part of the US$4,500 would be used to fund his journey to Shenzhen and then on to Guangzhou, and also to pay for his hotel in Guangzhou pending collection of the drugs.  Plainly, on that admission alone, his objective of trafficking the dangerous drugs across the world from Tanzania to Guangzhou could not have been realised without this money.  The appellant had arrived in Hong Kong from another continent and was on his way to the mainland (apparently, according to his evidence, by way of Chung King Mansions in Tsim Sha Tsui) to deliver a very valuable consignment of dangerous drugs, which were secreted in his person.  It would defy logic and common sense if he were to carry out his purpose without being accompanied by the means to achieve it.  He would hardly have arrived in Hong Kong destitute: indeed, any would-be trafficker or organisation controlling such a trafficker would know that he would need to be in possession of sufficient means upon arrival at Immigration in any foreign country.  This was not in fact the appellant’s first visit to Hong Kong.  He had been to Hong Kong two months previously.

32.  In any event, the judge heard the appellant and did not accept his evidence that the money was unconnected with dangerous drugs.  I see no reason to impugn that finding.  I might add that in his home-made grounds of appeal dated 17 November 2014, the appellant claimed for the first time that some of the US$4,500 represented deposits from customers for mobile telephones he was intending to purchase and that these customers were now causing problems for his family.  No such claim was made in his evidence on the forfeiture application.

Ground 2

33.  In relation to the second ground advanced by Mr Ross, I have substantially answered the point in addressing the first ground of appeal.  No international drug trafficker, especially a foreigner from another continent, could conceivably expect to carry out his purpose of trafficking a valuable consignment of dangerous drugs into and through Hong Kong without the means to achieve it and support himself in the process.  Even if none of the money was to be spent until the appellant had left Hong Kong, it was still money “which has been used in the commission of or in connection with” a drug trafficking offence if given to, or possessed by, him for that purpose.  It would be absurd to suggest that only when the money was actually used, in the sense of paid out for some specific purpose connected with drug trafficking within this jurisdiction, could it be forfeited.  If that were the law, there would invariably be no money to forfeit (unless perhaps paid over to a law enforcement agent in Hong Kong) and, far from casting the net as widely as possible, section 56(1)(a) would be rendered almost useless.  The only way money found in a trafficker’s possession could then be forfeited would be when it could be shown, in accordance with section 56(1)(b), that it was “received or possessed by any person as the result or product of” an offence under the Ordinance or a drug trafficking offence within the meaning of the Drug Trafficking (Recovery of Proceeds) Ordinance.

34.  Such an interpretation of section 56(1) would significantly undermine the purpose and efficacy of the forfeiture provisions in circumstances where one might not be able to “pinpoint” specifically whether the money had been given to a defendant as a reward for trafficking, or to support or sustain him while trafficking, or to enhance the impression that he was a bona fide foreign traveller on legitimate business when in fact he was trafficking, or for any other reason connected with a drug trafficking offence.

35.  Accordingly, I would reject such a restricted interpretation of section 56(1)(a) of the Ordinance.

Conclusion

36.  I am satisfied that the judge, having disbelieved the appellant, was correct to make the order of forfeiture on the facts and information presented to him.  Accordingly, this appeal should be dismissed.

Hon McWalters JA:

37.  I agree this appeal must be dismissed but wish to add my own reasons for why I have reached this conclusion.

38.  The legal principles upon which an application for forfeiture is made are now clear.  The application is that of the person seeking forfeiture, here the prosecution.  An applicant seeking forfeiture should indicate the source of the court’s power pursuant to which he asks the court to make an order in his favour.  The applicant should then inform the court of the evidence on which he relies in support of his application.  By this means, from the very outset, the parties, including the court, know what order is being sought, pursuant to what legal power the court is being asked to act and in reliance on what evidence to prove what issues the party seeking forfeiture is basing its application.

39.  In the present case, the power of forfeiture on which the prosecution relied is that contained in section 56(1) of the Dangerous Drugs Ordinance, Cap 134 (“the Ordinance”).  The only evidence adduced by the prosecution was that which was contained in the Summary of Facts, which was used by the prosecution for the purpose of sentencing. In criminal cases this would usually be, at the very least, the evidence before the court.  There is no reason why it cannot be supplemented by any other evidence that the prosecution considers relevant to its application but in the present application the prosecution elected not to adduce before the court any evidence other than the Summary of Facts.

40.  Should the court decide that on the basis of that evidence the property, the subject of the order that is sought, is prima facie liable to forfeiture, then the burden passes to the respondent to the application to persuade the court why an order should not be made against him.  In the present case the respondent testified on the application but called no other evidence.

41.  Once the parties have called all their evidence the judge hears submissions from them and rules on the application.  At this stage the court has to decide whether a forfeiture order should be made and if so whether it should be made in respect of the whole of the property.  This engages the discretion of the judicial officer, for the mere fact that property is liable for forfeiture does not mean a forfeiture order has to be made or has to be made in respect of the whole of the property.  Although the discretion under section 56(1) is unfettered, it must be exercised judicially, and in a way which furthers the objects of the Ordinance.

42.  Finally, the judicial officer must provide reasons for his decision that are adequate to the application that has been made.

43.  In the present appeal, issues arise of whether the Summary of Facts provided a sufficient evidential basis for the judge to make a finding that prima facie the property was liable to forfeiture.  In respect of this issue, Mr Ross mounted an argument on the construction of section 56(1) and how the presence of the words “has been used” in the statutory provision imported past tense into the provision and required, therefore, that the use of the property had already occurred and that the commission of the offence had been completed.  His argument was mounted in response to a submission advanced by the prosecutor on the hearing of the forfeiture application that the ambit of the section 56(1) power extended to an intended future use by the drug trafficker of the monies after he had entered Hong Kong; here, to pay for his transportation expenses in reaching his final destination, which was Guangzhou.  Finally, there is an issue of whether a fair hearing and the requirement that the judicial officer provide adequate reasons necessitates that the judicial officer clearly identify the particular power pursuant to which he is making his order for forfeiture.  This involves a consideration of the judgment of V Bokhary J in HKSAR v Chan Chi Wai Jimmy [2011] 4 HKLRD 302.

44.  I shall address each of these issues as I discuss the different stages of the forfeiture process.

Was the property prima facie liable to forfeiture?

45.  The first question is whether the contents of the Summary of Facts was sufficient to enable the judge to conclude that the appellant’s property was prima facie liable to forfeiture.  For this purpose I adopt the summary of the evidence by Macrae JA in his judgment.

46.  From the evidence, it is apparent that the appellant claimed that he was planning to go to Guangzhou after his arrival.  However, he was not in transit and in order to travel to Guangzhou he had to enter Hong Kong.  When interviewed by Customs officers he said that he had come to Hong Kong on business, and so was presenting himself as a legitimate businessman.  His business, he said, was the dealing in mobile telephones.

47.  In my view, the appellant’s possession of an amount of currency assisted him in portraying himself as a legitimate businessman who had the ability to support himself, and who possessed the monies needed for his onward travel.  Being able to portray himself in this light, and to demonstrate substance to this portrayal, would clearly be important to any drug trafficker in gaining entry into any jurisdiction.  The purpose of such a guise would be to ease his passage past immigration authorities, and also to lessen the risk of too close a scrutiny of him by Customs officials.  In these circumstances, a judge is entitled to infer that the drug trafficker needs to have a quantity of currency on his person in order to be able to convincingly present himself as a legitimate businessman who had the financial means to support himself and pay for any future expenses, including those associated with his onward travel.

48.  However, for drug traffickers in the position of this appellant, gaining entry to Hong Kong is not just an important stage of their journey, it is, in law, the commission of the offence.  For the moment a drug trafficker enters Hong Kong, he imports the drugs into Hong Kong and his act of importation constitutes trafficking for the purpose of the commission of the offence.

49.  I have no doubt that in circumstances such as these, any monies which are possessed by a drug trafficker that enable him to convincingly pass himself off to immigration officers as a legitimate businessman seeking to enter Hong Kong who possesses the financial resources to support himself and to pay for his onward travel, is money that is used in the commission of or in connection with an offence[9]. On this basis, in my view, the property that was the subject of the application for forfeiture was, on the evidence adduced by the prosecution, indeed liable to forfeiture.

50.  Having reached this conclusion, it is not necessary for me to address the argument of Mr Ross.  However, in deference to counsel’s submissions on this issue, I shall express the views that I have reached.  I have no doubt that the words “has been” in section 56(1) do import the past tense.  The issue is what is the consequence of this.  For the reasons that Macrae JA has expressed in his judgment, I would also give a wide meaning to the word “used”, and would construe it as encompassing conduct of simply being in possession of the money for the purpose I have already described.  Possessing it as a necessary part of a disguise by a drug trafficker to divert attention from himself is as much a use of it as it would be to use a false beard or hairpiece to disguise one’s appearance.

51.  However, because the words “has been” do import a past tense to the word “use”, it does mean that the prosecution cannot rely on the intended future use of the monies to pay for the onward travel cost to Guangzhou, for in respect of those expenses the monies have not yet been used. Although I agree that the use of the monies must have been completed, I do not agree that the offence itself must be completed.  Even if the words “in the commission of” may, arguably, suggest a completed offence, a matter on which I express no view, the words “in connection with” certainly do not.

Should a forfeiture order have been made?

52.  Having found that the monies were liable to forfeiture, the burden passed to the appellant to persuade the judge why a forfeiture order should not be made against him in respect of the US$4,500 found his possession.

53.  The appellant thereupon gave evidence and so the judge had evidence from both the prosecution and the appellant to consider in deciding whether a forfeiture order should be made, and what the terms of that order should be.  In the present case the judge decided after hearing from the appellant that his explanation in respect of the monies was not credible, and he rejected his testimony.  That was a decision he was perfectly entitled to make, based as it was upon his assessment of the credibility of the appellant, and of his explanation, after hearing him testify.

54.  However, even if the judge had accepted the appellant’s explanation it would not necessarily have meant, for the reasons I have already explained, that the property was not liable to forfeiture.  However, it would certainly engage the discretion of the judge as to whether he should order the forfeiture of the whole of the monies.  This is a matter which is very much a fact sensitive one, involving the discretion of the individual judge in respect of the particular case before him.  In my view, there is nothing in the materials before us to suggest that the judge’s exercise of his discretion in this case has miscarried.

The adequacy of the reasons for forfeiture

55.  Finally, the issue arises of once the judge has made his decision, whether he has a duty to give reasons for that decision and, if so, the extent of the reasons he should give.

56.  In Oriental Daily Publisher Ltd v Commissioner for Television and Entertainment Licensing Authority (1997-98) 1 HKCFAR 279 the Court of Final Appeal did not express a view as to the juristic basis of the duty to give reasons but said that one justification for the duty was the common law’s requirement of fairness.

57.  In English v Emery Reimbold & Strick Ltd [2002] 1 WLR 2409 the English Court of Appeal discussed the obligation on a judge to give reasons for his decision, and the extent to which Strasbourg jurisprudence may have expanded this duty.  In the course of delivering the judgment of the court, Lord Phillips of Worth Matravers MR (as he then was) summarised the Strasbourg jurisprudence at pages 2415D-2416H:

“It is clearly established by the Strasbourg jurisprudence that the right to a fair trial guaranteed by Article 6 of the Convention, which includes the requirement that judgment shall be pronounced publicly, normally carries with it an obligation that the judgment should be a reasoned judgment …

The Strasbourg court will hold that article 6(I) has been violated if a judgment leaves it unclear whether the court in question has addressed a contention advanced by a party that is fundamental to the resolution of the litigation …

The Strasbourg court … is concerned to see that the procedure has been fair. It requires that a judgment contains reasons that are sufficient to demonstrate that the essential issues that have been raised by the parties have been addressed by the domestic court and how those issues have been resolved …

Where a judicial decision affects the substantive rights of the parties we consider that the Strasbourg jurisprudence requires that the decision should be reasoned.”

58.  Lord Phillips concluded, at page 2416G, that:

“We do not believe that the extent of the reasoning that the Strasbourg court requires goes any further than that which is required under our domestic law, which we are about to consider.”

59.  After considering the common law requirement to give reasons Lord Phillips summarised it, at page 2417G-H, paragraph 16, in the following way:

“We would put the matter at its simplest by saying that justice will not be done if it is not apparent to the parties why one has won and the other has lost.”

60.  In the present case the application, being an application for the forfeiture by the state of the defendant’s property, is one that involves the substantive rights of the parties.  The defendant asserts a right over property which right the state seeks to extinguish.  Furthermore, the decision of the court adjudicating upon the application is one that is amenable to appeal.  Consequently, the judge adjudicating upon such an application is, in my view, undoubtedly under an obligation to give reasons for his decision.

61.  The next issue, and always the difficult issue, is the extent to which he must provide reasons for his decision in order for the hearing to be fair; that is, the adequacy of his reasons.  The adequacy of a particular set of reasons is always case specific but their adequacy is often tested by reference to how satisfactorily they meet the objectives of the duty to give reasons.  It seems to me that the three key objectives of any set of reasons must be:

(i) to inform the losing party why he has lost;

(ii) to demonstrate how the judge has resolved the essential issues raised by the parties; and

(iii) to provide sufficient information under (i) and (ii) above to enable the losing party to exercise his rights of appeal and should he appeal to enable the appellate court to properly adjudicate upon it.

62.  It is the need to accommodate the interests of the appellate process that Lord Phillips thought was crucial to assessing the adequacy of a judicial officer’s reasons.  He said, at page 2418D-H:

“It follows that, if the appellate process is to work satisfactorily, the judgment must enable the appellate court to understand why the judge reached his decision.  This does not mean that every factor which weighed with the judge in his appraisal of the evidence has to be identified and explained.  But the issues the resolution of which were vital to the judge’s conclusion should be identified and the manner in which he resolved them explained.  It is not possible to provide a template for this process.  It need not involve a lengthy judgment.  It does require the judge to identify and record those matters which were critical to his decision…

The essential requirement is that the terms of the judgment should enable the parties and any appellate tribunal readily to analyse the reasoning that was essential to the judge’s decision.”

63.  Stock VP in HKSAR v Okafor [2012] 1 HKLRD 1041 made the same point in respect of an application for leave to appeal conviction.  At page 1054 he spoke of the need of the appellate tribunal to have “sufficient information with which conscientiously to determine the points raised on appeal”.  He then continued:

“If those acting for a convicted defendant or the appellate court are deprived of that information, the appellate machinery is, for the purpose of the point raised, rendered ineffective. It does not, in my judgment, need the provisions of the International Covenant on Civil and Political Rights as applied to Hong Kong, to which effect is given by art. 39 of the Basic Law, with its protection of the right of such a person to have his conviction reviewed by a higher tribunal, to tell us that the right of appeal is not a true right if it is rendered meaningless or ineffective.”

64.  With these principles in mind, the adequacy of the present set of reasons falls to be determined.

65.  In the present case, the judge’s reasons explain why he disbelieved the defendant but say nothing more.  Specifically, they neither identify under which limb of section 56(1) he was exercising his power of forfeiture, nor his reasons for finding that limb satisfied.  This may be because he was referred to the decision of V Bokhary J in HKSAR v Chan Chi Wai Jimmy [2011] 4 HKLRD 302, and invited to act in accordance with what that judge said at page 304, paragraph 4:

“Section 56(1) does not require any specific connection between the money, thing or property to be forfeited and the accused’s offence or offences. Nor does it even require a conviction. It involves alternatives, namely: use in the commission of an offence under the Dangerous Drugs Ordinance or a drug trafficking offence within the meaning of the Drugs Trafficking (Recovery of Proceeds) Ordinance (Cap. 405); use in connection with any such offence; receipt as the result of any such offence; receipt as the product of any such offence; possession as the result of any such offence; or possession as the product of any such offence. If the inference is that at least one of these alternatives represents the truth, forfeiture can be ordered even though no particular alternative can be pinpointed. After all, even when it comes to convicting a person of an offence, juries are commonly and correctly directed to the effect that they do not have to be able to say to themselves that they know everything about the case. As they are commonly and correctly directed, they can convict provided that they are sure of guilt even though they cannot say to themselves that they know everything about the case.” [Emphasis added]

66.  Before us, the respondent continued to rely on this judgment to argue that it is not incumbent upon a judge to articulate in his reasons for decision the particular limb of section 56(1) pursuant to which he orders forfeiture, or his reasons for reaching his conclusion that the requirements of that limb are satisfied.

67.  I do not agree with both the proposition advanced in this paragraph or the reasoning on which it is based.  In my view, reasons will never be adequate unless they identify, for the benefit of the person against whom the forfeiture order is made and for the benefit of any appellate court called upon to adjudicate upon that order, the power under which the court is acting in making the forfeiture order.  In respect of an application under section 56(1) of the Ordinance, informing the party against whom a forfeiture order is made of the legal basis for the order requires that this person be informed not just that the order is made under section 56(1) but of the particular limb or limbs of that statutory provision which the judge has found proven.

68.  But, this does not mean that the judge can simply say, for example:

“On the evidence adduced before me I am satisfied that the monies have been used in the commission of an offence.”

Such a statement would not explain to the defendant or an appellate court how it is that the judge has reached this conclusion.

69.  That the monies have been used in the commission of an offence, or in connection with an offence, or are received or possessed by the defendant as the result or product of an offence, is the final conclusion the judge must reach before he can make an order for forfeiture of the property.  But, it is reached by a consideration of the evidence, as a result of which the judge expresses himself satisfied as to certain matters.

70.  I do not understand the logic of V Bokhary J in the Chan Chi Wai Jimmy case that a judge can be satisfied that one of the alternatives contained in section 56(1) represents the truth but not be able to pinpoint which one.  For a judge will not reach this stage of his deliberations until he has made findings on the evidence, and it will be his findings that lead him to conclude which of the limbs of section 56(1) is or are proven.  If the judge cannot say what alternative is engaged, then that can only be because the evidence is insufficient to enable him to find proven on the balance of probabilities, whether by direct evidence or inferentially, facts which satisfy one or more of the section 56(1) limbs.

71.  But, that is not to say that adequate reasons for a section 56(1) decision will normally require lengthy analysis.  Quite the contrary.  Taking the present case as an example, it seems to me that the judge, after having explained why he rejected the defendant’s evidence, need not have said any more than:

“For the reasons given I reject the evidence of the defendant. On the basis of the evidence placed before me by the prosecutor I find that / I infer that, on the balance of probabilities, (state finding / inference eg the monies were to be part of the defendant’s reward for trafficking or were to be used to assist in his travel to Guangzhou or were used to assist him present himself as a legitimate businessman). As a consequence of this finding the monies are liable to forfeiture as monies (used in the commission of an offence / used in connection with an offence / were received or possessed by the defendant as the result or product of an offence, under the ordinance).

Given my findings I am satisfied that I should make an order forfeiting the monies.  I have considered whether I should forfeit the whole of the monies and I …”

72.  Such a set of reasons explains the fact finding route by which the judge reaches his conclusion that one of the section 56(1) limbs is proven, and identifies which one.  This explains to a defendant why he has lost and the basis of the forfeiture order.  Such an explanation is all that the appellate court needs to adjudicate upon in any appeal flowing from the making of the order.

Conclusion

73.  It is clear that the judge disbelieved the appellant, and equally clear that he found one of the limbs of section 56(1) satisfied but, in reliance on the decision of V Bokhary J in the Chan Chi Wai Jimmy case, declined to indicate which limb or by which route he concluded that one of these limbs was satisfied.  Nevertheless, for the reasons which I have given, I conclude that the judge would, at the very least, have been entitled to conclude, even on the appellant’s own evidence, that the monies were used in connection with an offence, and so I would also dismiss the appeal.

[1] Appeal Bundle, page 23A-B.

[2] Appeal Bundle, page 5, paragraph 3.

[3] Appeal Bundle, page 6, paragraph 4.

[4] Appeal Bundle, page 25 C.

[5] Judgment, paragraph 29.

[6] Judgment, paragraph 73.

[7] R v Osei (1988) 10 Cr App R (S) 289

[8] HKSAR v Chan Chi Wai Jimmy [2011] 4 HKLRD 302 at 304, paragraph 4.

[9] I note that this line of reasoning was employed by V Bokhary J in HKSAR v Kwambaza [2014] 4 HKLRD 432 to conclude at page 434, paragraph 5 of the judgment that the most probable s.56(1) alternative was that the monies “had been used in connection with the commission of an offence under the Dangerous Drugs Ordinance.”