WONG CHI KONG AND OTHERS v. SECRETARY FOR JUSTICE FOR COMMISSIONER OF CUSTOMS & EXCISE

HCAL97/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMINISTRATIVE AND CONSTITUTIONAL LAW

LIST NO. 97 OF 2008

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J U D G M E N T

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1. This is an application for leave to apply for judicial review in respect of the decision of the Commissioner of Customs & Excise deciding that a letter written by a solicitor on 11 June 2008 does not constitute a valid notice under section 27(5) of the Import and Export Ordinance.

Background

2. Certain containers of goods were intercepted by officers from the Customs & Excise Department on 24 May 2008.  The cargo was examined on 25 May 2008 and the officers found that the cargo did not match the description in the manifest, and therefore they were seized.

3. Then on 11 June 2008, a solicitors’ firm wrote to the Commissioner of Customs & Excise.  It said:

“We act for the legal and beneficial owner and/or the representative of the legal and beneficial owner of the goods contained in two containers”

After giving the number of the containers and the name of the vessel, it went on to say:

“We are given to understand that the goods were seized by your officers on or about 25 May 2008, suspecting that they were in connection with the contravention of a provision of the Import and Export Ordinance, i.e. export or attempting to export unmanifested cargo.  We are instructed that the goods were manifested.  No doubt that you are fully aware of the provision under Regulation 2 of Cap. 60E.  We are of the view that there was no ground to support the seizure of the goods, as they are not liable to forfeit.  We are further instructed that unless the goods are returned within the next seven days, legal proceedings will be commenced against you without further notice.  Supporting documents are enclosed for your reference.  This letter is also a claim of the goods pursuant to section 27(5) of the Import and Export Ordinance.”

4. Attached to the letter is a document called “Authorisation for electronic submissions of export or re-export declaration form 2”.  On the form there is no particulars of the owners.  There is a box in the form identifying the exporter and a name, Wong Chi-kong, was stated there, and he was said to be an agent.  Then there is an entry in another box identifying the consignee and the name, Lai Kwun, and an address, “廣東省三水市”, and then some further particulars were given about the address of that consignee.

5. The crux of the dispute is whether this letter of 11 June, reading together with that particular form 2, constitute a valid notice given under section 27(5) of the Ordinance.  The requirement of the Ordinance is that the notice has to be in writing and it has to include the full name and address for service of the claimant.  Subsection (5)(A) of that section also provides that:

“If a claimant does not have a permanent address in Hong Kong, the notice shall nominate a solicitor qualified to practise here who is authorised to accept service on his behalf in relation to any forfeiture proceedings.”

6. Hence, it is quite clear that the requirements in this subsection is to facilitate, in the event of a valid claim being lodged with the Commissioner, proceedings by way of forfeiture proceedings to be instituted if necessary.

7. The Commissioner took the view that the letter did not constitute a valid notice of claim, and they replied on 18 June, pointing out that the name of the claimant has not been set out.  That was 18 June, and at that stage the solicitor for the claimants, whoever they may be, still had time to respond within the 30 days period prescribed by section 27(5).  But the solicitor and the claimant chose not to respond until 15 July 2008.  In a letter written on that day, the solicitor wrote back and said:  “The claimant is “廣州市利泰科技有限公司(譯音)”, but the address of that claimant was not given.  And then further, on 17 July 2008, another letter was written by that firm of solicitors, setting out the name of three claimants, including the one they had previously set out in the letter of 15 July with two other claimants.  Again the addresses were not given.  Then on 22 July the solicitor wrote again, giving the name of a fourth claimant, again without the address of that particular claimant.

8. The Commissioner replied on 28 July, pointing out that these letters written in July 2008 were received by the Commissioner on a date that fell outside the prescribed claim period.  Therefore, by operation of section 27(6) of the Ordinance, the articles had been forfeited to the government on 24 June 2008.

10.  Under section 30 of the Import and Export Ordinance, after a forfeiture, a claimant may, within six weeks thereafter, give notice in writing to the Commissioner of his intention to submit to the Chief Executive a petition in respect of the forfeited articles, and then after that, he has 30 days to lodge a petition to the Chief Executive seeking the return of the articles.  Therefore, upon receipt of the letter of 28 July 2008, the claimant could still consider taking the benefit of that provision.

11.  But they did not do so.  Instead, they lodged an application for judicial review on 27 August 2008.  In fact, at the time when they lodged the application for leave, they filed an affirmation which is rather unsatisfactory.  The relevant documents were not exhibited and the requirements of Practice Direction SL3 and Order 53 Rule 3 with regard to affirmations had not been complied with.

12.  It is only upon this court’s direction they filed a second affirmation setting out some of the documents, which are still not complete.  A further affirmation had to be filed on 4 September.

13.  After reading the papers, this court directed that there should be an inter partes hearing, and at today’s hearing, it appears to me that the crux of the matter is whether the letter of 11 June, reading together with the form 2 attached to it, can reasonably be argued as a notice complying with the requirements of section 27(5) in the statutory requirements that the full name and address for service in Hong Kong of the claimant has to be given.

Discussion

14.  I have read the letter.  It did not specify the identity of the claimant.  But Mr Cheung, appearing for the applicants today, submitted that it does not matter because, according to the decision of the Court of Final Appeal in The Commissioner of Customs & Excise v Chandiramani FACV8/2002, several documents can be read together to constitute a valid notice of claim.

15.  As the Court of Final Appeal decision illustrates, although as a matter of law one can read several documents together to identify a notice of claim, one still has to ask the question whether upon reading the two documents together, one can properly identify it as a notice of claim giving the full name and address of a particular claimant.

16.  Mr Cheung submitted that reading the letter of 11 June together with the form 2, the claimants that should be regarded as lodging a claim on 11 June were Mr Wong Chi-kong and Mr Lai Kwun.

17.  I am afraid I do not accept that submission.  One must put one-self into the position of the Commissioner receiving these two documents and ask, upon a reasonable reading of these two documents, whether one can identify who is said to be a claimant.

18.  The letter of 11 June said that the solicitor was acting for “the legal and beneficial owner and/or the representative of the legal and beneficial owner of the goods”.  If one turns to the form 2, one is at a loss to see who that description is supposed to be referring to.  It could be Wong Chi-kong, it could be Lai Kwun, it could be even the master of the vessel, or it could be somebody else.  If the solicitor were actually making a claim on behalf of Wong Chi-kong or Lai Kwun, it is difficult to see why the solicitor could not expressly say so in the letter of 11 June.

19.  The information contained in form 2 simply cannot assist the Commissioner in identifying who was said to be “the legal and beneficial owner and/or the representative of the legal and beneficial owner”.  As such, the Commissioner would be at a loss if he was to institute forfeiture proceedings in terms of naming the respondents.  This is clearly demonstrated by the Commissioner’s response on 18 June.

20.  I also fail to see the reason why, if the solicitor were actually acting for Wong Chi-kong or Lai Kwun, the firm could not immediately reply after 18 June, informing the Commissioner as regards the identities of their clients.  It is elementary that before a solicitor acts, he must know who his client is.  Their failure to respond to the letter of 18 June is another indication to the Commissioner that the identity of the claimants was something of a mystery.

21.  Therefore, I conclude it is not reasonably arguable that just by reading the letter of 11 June together with the form 2, the claimant has complied with the requirements of section 27(5).  The subsequent correspondence cannot assist the applicants because, as rightly pointed out by the Commissioner, the correspondence in July was only received by the Commissioner after the expiration of the 30 days period.  By then, in accordance with section 27(6), the articles had already been forfeited.

22.  But one can note that in the subsequent correspondence in July, the claimants who the solicitor said to represent were not Wong Chi-kong nor Lai Kwun.

23.  In the circumstances, the application has no reasonable prospect of success.  It is not a reasonably arguable case.  Therefore, leave should not be granted.

(Discussion re costs)

24.  I think there is no dispute that the applicants should pay for the costs of these proceedings.  The only question is the basis on which costs should be awarded and whether I should make a gross sum order in the circumstances.

25.  As I see it, the application is an abuse of process for the following reasons.  It would appear now, based on what I was told by Mr Cheung, on 11 June 2008, when the solicitor lodged the claim to the Commissioner, the intention was to lodge a claim on behalf of the purchasers or owners of the goods, but the position was that at that stage the solicitor was somehow uncertain as to the identities of those ultimate buyers.  Therefore the solicitor was in difficulty in responding to the Commissioner’s letter of 18 June requesting the names and addresses of the claimants.

26.  It would therefore be the irresistible inference in the circumstances that when the letter was written on 11 June by the solicitor, the solicitor was not thinking of lodging a claim on behalf of Mr Lai Kwun as agent for the owner.  Nor were the solicitor thinking of acting for the consignee on account of some kind of interest that the consignee might have in the articles.

27.  In light of that, it would be an abuse for the parties now to come before this court this morning to seek leave on the basis that when the notice was given on 11 June, because of reading it together with the form 2, it was a notice given on behalf of Lai Kwun and/or the consignee.  This is simply not the true state of affairs, and to advance an application to the court based on something which the parties know to be false is a clear abuse of process, if not something more serious.

28.  I also find the overall conduct of the matter on behalf of the claimants up to today to be grossly unsatisfactory.  I do not know whether it is due to the misapprehension of someone who has advised the claimants that unless they were claimants in the notice given to the Commissioner pursuant to section 27(5), they cannot have any standing in the subsequent proceedings for forfeiture.  That is, of course, wrong.  An examination of the relevant sections of the Import and Export Ordinance will show that firstly, with regard to the notice of claim, under section 27(5) it can be made by an agent for the owner of the article and the requirement of giving the name and address for service in Hong Kong can be satisfied by stating the name of the agent in that notice.

29.  In the present context, if the solicitor were really advancing a claim on behalf of Wong Chi Kong or Lai Kwun as agent for the owner, I fail to see why the solicitor could not reply to the letter of 18 June by informing the Commissioner that the claimant was the agent of the owner, and the name of the agent was Wong Chi Kong or Lai Kwun.

30.  What would have happened if the matter had proceeded in that manner is that the Commissioner will have to make an application to a magistrate for forfeiture under section 28 of the Ordinance. Under section 28(3), it is clearly provided that at such hearing of the application for forfeiture, the claimant or some other person who, though not the claimant, was or would have been entitled to make a claim under section 27(5), can appear before the court.  The court shall hear the application.  In other words, a person who falls within the scope of section 27(5) but not being a claimant in a notice of claim can still have the opportunity to appear before the court in the forfeiture proceedings, and the court will have to hear him, and if the court is satisfied that he has a right to claim ownership or legal or equitable interest in the article, the court will entertain his submissions.  This is spelt out in section 28(3A).

31.  For reasons best known to the applicants, the matter has not been proceeded in that manner, and as I said, the only irresistible inference in the circumstances is that as at 11 June, there was no intention on the part of Lai Kwun or Wong Chi-kong to put forward themselves and be named as the claimant.  Therefore, to argue the case now on the basis that they were actually the claimants by reading that letter together with the form 2 is clearly an abuse of process.

32.  Therefore, if I were to award costs and order that the costs be taxed, I am inclined to order taxation on indemnity basis.  But in the light of the submission and that the case is only an application for leave to apply for judicial review, I do not want to escalate costs and waste time on taxation proceedings.

33.  I would make an order under Order 62 Rule 9(4)(b) for a gross sum order.  An estimate on costs has been produced by Mr Kwok, and Mr Cheung indicated that the applicants have no objection to the figures.  I will therefore order that the applicants shall pay the respondent’s costs of these proceedings, and such costs are fixed pursuant to Order 62 Rule 9(4)(b), at $78,000.