HKSAR v. PETER MARKOVITCH AND ANOTHER

HCMP 835/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 835 OF 2002

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J U D G M E N T

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1. On 7 March 2002, upon the ex parte application of the Secretary for Justice, an order was made by Deputy Judge E Toh under section 15 of the Organized and Serious Crimes Ordinance, Cap.445 restraining Mr Peter Markovitch and Ms Sandy Winick from removing property from, or disposing of property in, Hong Kong. That is of course putting it briefly, the full terms of the Restraint Order being lengthy and detailed.

2. The Restraint Order itself provides that it shall remain in force until varied or discharged by further order, and it fixes 26 March 2002 as the return date. But on 12 March 2002 the Secretary for Justice took out a summons for the continuation of the Restraint Order until further order, and 4 April 2002 was appointed for the hearing of this summons. On 21 March 2002 solicitors for Mr Markovitch took out a summons, also to be heard on 4 April 2002, for the discharge of the Restraint Order.

3. Mr Markovitch opposed the continuation of the Restraint Order and seeks its discharge on five grounds. These are described in paragraph 1 of the Written Argument dated 27 March 2002 prepared by Mr Markovitch's counsel, Mr David Boyton, which read as follows:

"The Restraint Order is predominately opposed on the ground that the Applicant had failed to provide full and frank disclosure on material aspects of the case history at ex parte stage and continues to do so at this application. The other grounds of opposition, closely connected to this are as follows:

1) Abuse of due process and unreasonable delay by the Applicant.

2) Abuse of legal process by not making the companies - Transglobal Consultants Limited and Newline Investments - respondents in these proceedings.

3) That the Applicant's previous treatment of the 'assets' in dispute is inconsistent with their present application.

4) No evidence that the assets now sought to be restrained are the proceeds of the alleged indictable offences."

That is followed by detailed arguments in support.

4. The complaint of abuse of process and unreasonable delay is made first on the basis that for about a year the police had managed to block the operation of certain accounts simply by withholding consent under section 25A (2) of the Drug Trafficking (Recovery of Proceeds) Ordinance, Cap.405, and under section 25A (2) of the Organised and Serious Crimes Ordinance, Cap.455 (section 25A of each of those Ordinances being identical save that Cap.405 relates to drug trafficking only while Cap.455 relates to all indictable offences). It is argued that this is a de facto restraint and that resorting to a restraint order under section 15 of Cap.455 after a year of such a de facto restraint is delay and abuse of process making it wrong for the court to accede to a section 15 application. I do not agree. In my judgment, the regime under section 15 is distinct from the regime under section 25A.

5. Secondly, it is said that the failure to make two companies -Transglobal Consultants and Newline Investments - respondents is an abuse of process. Again I do not agree. Whether or not any application against those companies would be appropriate or wise is a distinct question from whether an application against Mr Markovitch is proper.

6. As to the suggestion that the Secretary for Justice's previous treatment of the 'assets' in dispute is inconsistent with their present application, I see no inconsistentency such as to render the present application inappropriate or improper.

7. The next point taken by Mr Markovitch is that no evidence that the assets now sought to be restrained are the proceeds of the alleged indictable offence. The answer to that is quite simply that section 15 is not confined to the proceeds of crime, but extends to all the realisable property of a person who has benefited from crime.

8. Finally, I come to the question of material non-disclosure. As to this, I proceed on the assumption that there has been a failure to disclose certain material matters of history and background. I treat those matters as material in the sense of being relevant to the exercise of discretion which Deputy Judge Toh had to perform even though in my view such matters, if disclosed to her, would not and should not have led her to refrain from making the order which she made.

9. What is clear to me is that even on the assumption that there had been material non-disclosure, there is no basis for imputing bad faith as opposed to an error of judgment to those making the ex parte application to Deputy Judge Toh. That being so, there is jurisdiction to make a fresh order continuing the restraint even though it is unusual to continue an order at the inter-partes stage after material non-disclosure at the ex parte stage: see Dah Yung Leasing Pte Ltd v. Ho Hua Min [1987] 3 HKC 462.

10. In all the circumstances, I regard it proper to make an order continuing the restraint. In the result, I accede to the Secretary for Justice's application for continuation and dismiss the 1st Respondent's application for discharge.