CHAN MEI YIU, PADDY AND OTHERS v. SECRETARY FOR JUSTICE

HCMP 1175/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1175 OF 2007

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D E C I S I O N

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Background:

1.  In a reserved decision delivered by me on 23 July 2007, upheld by the Court of Appeal on 26 February 2008, I held that there was jurisdiction in the Court of First Instance to issue a letter of request in judicial review proceedings.  The full background to the matter is adequately set out in my Judgment, and I do not now repeat it, but adopt it for the purpose of these proceedings.  The question now arises as to whether I should exercise my discretion in favour of the issue of the letter of request. 

2.  Mr Grossman, for the Secretary for Justice, accepts that were this a straightforward civil action, in which evidence were sought to be obtained overseas from civilian witnesses by way of a letter of request, there would be no basis upon which he could oppose the exercise of discretion in favour of the issue of the letter of request.

3.  But, he says that in the particular circumstances of this litigation, the discretion should be exercised against the issue of the letter of request.  Mr Grossman relies upon four grounds to support his position.  They may be summarised as follows:

(a) there is cogent evidence that the letter of request will not be acted upon by the Italian authorities, but instead rejected or refused, and consequently it should not issue;

(b)    the fact-finding nature of the letter of request, which seeks to explore allegations of misrepresentation and misconduct by Italian officials, is detrimental to the comity of nations and would be embarrassing and offensive to a friendly foreign state;

(c) it is a matter for the Secretary for Justice to decide how best to present its evidence in the proceedings, assuming all risks, and accordingly the substantive matter should be judged on the basis of the affidavits filed to date;

(d)    the Plaintiffs seek to call witnesses who would give evidence adverse to their own case, and the application is accordingly perverse, and the procedure proposed an abuse of the procedure of the court.

The letter of request will be refused by the Italian authorities:

4.  Before considering this argument it is necessary to note that there are four witnesses whose evidence is sought to be taken by way of the letter of request.  The four witnesses fall into two categories.  Two, Dr Fabio de Pasquale and Mr Sergio Spadoro are Italian prosecutors who are involved in the prosecution in Italy in which the documents seized in Hong Kong are considered relevant.  The other two, Ms Gabriella Chersicla and Mr Stefano Martinazzo, are forensic accountants. I understand that they are from the international accounting firm, KPMG, and have been engaged in their professional capacity by the Italian prosecuting authorities to assist in, and advise the prosecutors, in the Italian prosecution.

5.  Mr Grossman says that as a matter of Italian law the witnesses sought to be examined are prohibited from giving evidence in the proceedings.  In terms of our law we would say that they were neither competent nor compellable witnesses.

6.  To support his argument, Mr Grossman relies upon three documents exhibited to an affidavit from Government Counsel.  They are two legal opinions from Italian legal academics, and a memorandum completed by Mr Antonio Laudati, the Italian Director General of Criminal Justice, which refers to a note dated 30 October 2007, apparently relating to the proposed issue of the letter of request.  The note itself is not exhibited.

7.  In the course of the memorandum the Director General refers to Article 197 of the Italian Code of Criminal Procedure which provides:

“1. The following persons cannot be heard as witnesses:

(d)   those who, in the same proceeding, act or have acted in the position of judge, public prosecutor or their assistants as well as the defence lawyer who conducted investigation for the defence, and those who have put together the documentation relating to statements and information obtained under article 391 ter.” (sic)

The Director General then asserts:

“The public prosecutor and his/her assistants cannot be heard as witnesses in respect of facts into which they are investigating (or into which they have in whatever way investigated), as long as it involves understandably the same case.

In the case at issue from the appealing document, it seems to show that the claims regard the conduct effected by the Italian public prosecutors.  Such conduct is the subject matter of the enquiry to be made before a foreign authority so as to render the seizure orders null and void.  In these circumstances, there is no doubt that the public prosecutor and their assistants cannot be heard as witnesses as the proceeding is evidently the same in which they acted as prosecuting authorities, and evidence, if any, taken against the law, would then make the act null and void.”

8.  On the basis of this memorandum, the submission is made that, as a matter of Italian law, none of the four witnesses are competent or compellable to give evidence in the Hong Kong judicial review proceedings.  That being the case the submission is made that it is inevitable that the Italian authorities will reject the letter of request. 

9.  The statement by the Director General, with the exception of the first paragraph cited above, is not a reasoned document, but merely a statement of the Director General’s view of the law.  In particular, the Director General does not analyse, in a reasoned way, his conclusion that: “the proceeding is evidently the same in which they acted as prosecuting authorities”.

10.  Mr Grossman also relies upon an opinion from Professoressa Francesca Ruggieri, a full professor of Criminal Procedure Law at the School of Law of the University of Insubria in Como, Italy, to support the view of the Director General.  That opinion, a reasoned document, examines first the jurisprudential basis upon which Article 197 is founded.  The opinion then turns to consider whether the Judicial Review phase, in the realm of international letters of request proceedings, should be considered the “same proceeding” in terms of Article 197.  Professoressa Ruggieri concludes that for that purpose, the judicial review proceedings are the “same proceeding” as the proceeding under way in Italy and that consequently the public prosecutors would be in violation of Article 197 if they gave evidence in these proceedings.

11.  Professoressa Ruggieri is however, uncertain whether the same prohibition should apply to the public prosecutors consultants, that is the forensic accountants, with regard to their activities. 

12.  Finally, she points out that the prohibition in Article 197 does not prevent either the public prosecutor, or the consultants, from giving information in the writing in relation to activities aimed at taking evidence abroad.  I understand this to be an opinion that all four witnesses are not barred by Article 197 from filing affidavits in the present proceedings.  The effect of her opinion is however that the public prosecutors, at the least, if making affidavits, would not be exposed to cross-examination on any assertion that they may make in those affidavits.

13.  Also put before the court was an opinion from Professore Mario Pisani, formerly professor of Criminal Procedure at the State University of Milan.  I am satisfied that Mr Grossman was right not to rely upon Professore Pisani’s opinion.  In the course of the opinion Professore Pisani sets out three questions which in his view are the appropriate questions.  Plainly however, by directing those questions to the admission of the testimony of a public prosecutor in Italy, Professore Pisani has unfortunately considered the wrong questions.  There is no suggestion that the evidence to be obtained by way of the letter of request might be admitted in proceedings in Italy.  The evidence is sought for proceedings only in Hong Kong.

14.  Mr McCoy, for his part, relied upon an affidavit from Professore Avvocato Alfredo Gaito, an Italian lawyer admitted before the Court of Cassation, and a “first category university professor” at the School of Law of the University of Perugia.

15.  The affidavit examines the following questions:

(a) whether or not the Italian Public Prosecutor can testify in the proceeding for judicial review pending in Hong Kong;

(b)    since the Italian Public Prosecutor Dr Fabio de Pasquale produced a “non-sworn” Declaration in the United States of America (Declaration dated December 21, 2006), for what reasons, to date, the same Public Prosecutor could validly sustain his inability to give testimony in proceedings before the Judicial Authority of Hong Kong;

(c) since the Italian Public Prosecutor Dr Fabio de Pasquale knew about the appeal filed successfully in the USA, for what reason the same Public Prosecutor started, in Hong Kong, an “investigative activity” similar to that carried out in the USA, while it seemed likely that a similar appeal would have been filed in Hong Kong.

It will be immediately apparent that these questions, particularly, (a) and (b), unlike the questions posed by Professore Pisani, are directly relevant to the key issues raised.

16.  Professore Avvocato Gaito concludes, in a reasoned document with appropriate reference to precedent and authority:

(a) the two sets of proceedings, in Italy and in Hong Kong, are totally distinct and different both from an objective and from a subjective point of view;

(b) it follows that the connection between the two sets of proceedings does not prevent Dr Fabio de Pasquale from being examined, both abroad and, as an alternative, in Italy, by activating an international letter rogatory from abroad;

(c) that the testimony of the prosecutor’s assistants is not prohibited.

17.  From the evidence before me it appears that the procedure in Italy, should a letter of request be issued, is that the matter will first be considered by the Italian equivalent of the Department of Justice who will then advise the appropriate State authority whether or not the letter of request should be acted upon.  If the decision is to act upon the letter of request, the matter will then go to the Court of Cassation for the appropriate orders.

18.  As a matter of general principle, in Hong Kong, foreign law is a question of fact, to be proved as a fact by skilled witnesses and decided by the judge: Phipson on Evidence 16^th Ed para 33-57. 

19.  Having considered the evidence put before me, were it necessary for me to decide, for the purposes of exercising my discretion, whether or not, as a matter of Italian law any of the four proposed witnesses are prohibited by Italian law from giving evidence, I would prefer the view of Professore Avvocato Gaito.

20.  However I have reached the conclusion that in order to enable me to properly exercise my discretion, it is not necessary to find, as a fact, what constitutes the Italian law.  Indeed, Mr Grossman counselled me that I should not presume to tell the Italian authorities what their law means.  I have reached this conclusion because I am satisfied that the competence and compellability, as a matter of Italian law, of the witnesses to give evidence in the Hong Kong proceedings, is a matter that will be properly taken into account in the course of the steps necessary to give effect to the letter of request should it issue.

21.  The issue of the competence and compellability of the witnesses is a matter that will be considered at two levels, first at the administrative or political level, and second in the Court of Cassation.

22.  Had the evidence that the witnesses were neither competent nor compellable been overwhelming, then I would have been inclined to refuse the letter of request.  But I am faced with, on the one hand,  the statement of the Director General, unreasoned, and unsupported by authority that the witnesses are neither competent nor compellable, the opinion of Professoressa Ruggieri, which is, in part, in conflict with that of the Director General, and on the other hand, the opinion of Professore Avvocato Gaito, reasoned in all respects and supported by authority, to the effect that the witnesses are competent to give evidence.  In these circumstances I cannot reach any secure conclusion that the letter of request, if issued, would be refused by the Italian authorities on the grounds of incompetence or non-compellability of the witnesses.

23.  In the exercise of my discretion I am satisfied that that question is one which can be safely left to the Italian authorities and courts.  The issue does not provide a proper basis to refuse the letter of request.

24.  As part of this argument Mr Grossman submits that the court should not expose itself or the Government of the Hong Kong SAR to what he describes as “potential humiliation” by sending a request to a country where it has every likelihood of being denied.  His sole support for this proposition comes from a decision of Deputy High Court Judge To, in re Kwan Kai Ming [2002] 2 HKC 69 at 79.  With respect to the judge, his proposition that the discretion to order the issuance of a letter of request should only be exercised if there is an obligation on the part of the recipient judicial authority to execute the letter of request, is quite unsupported by authority.

25.  This proposition was dealt with, and essentially rejected, in an appeal from his decision, under the title Kwan Chui Kwok Ying & Ors v Tao Wai Chun & Ors (unreported, CACV 194/2002), where the Court of Appeal said,

“This is a reasonable way to exercise of discretion and a safe course to take but if, obliged or not, the recipient court has an established practice of executing letters of request from foreign countries, that in our view will be sufficient, though this course is not as sound and safe as where there is an obligation on the part of the recipient court.”

Mr Grossman does not dispute the proposition that there is an established practice of the Italian courts executing letters of request from Hong Kong.

26.  If it ultimately be the case that the Italian authorities should determine that as a matter of Italian law the proposed witnesses are neither competent nor compellable to give evidence in the Hong Kong proceedings, and for that reason decline to execute the letter of request, no question of humiliation arises.  It would merely have come to pass that an exigency, anticipated as a potential exigency by the Hong Kong court in the issuance of the letter of request, has occurred.

27.  Again, this is not a basis upon which I should refuse the letter of request.

The comity of nations argument:

28.  Mr McCoy does not dispute the proposition that a letter of request, issued under judicial authority is a solemn and weighty request.  It is a communication of a quasi-diplomatic nature.  The submission made by Mr Grossman is that the court should not exercise its discretion to invite the judicial authorities of a friendly foreign state to use its powers to assist in the obtaining of evidence from witnesses resident in that state, directed towards seeking to establish what the motives were behind acts of foreign officials of that state, the bona fides of whom are under question in the requesting jurisdiction.

29.  Mr Grossman submits that any letter of request issued in these circumstances would amount to inviting the foreign court to assist the local court to investigate such allegations and that such a request would be seen as offensive by the foreign court.  In support of the proposition Mr Grossman relies upon the judgement of the English Court of Appeal in Settebello Ltd v Banco Totta & Acores [1985] 2 All ER 1025. 

30.  In that case the plaintiffs, Liberian shipowners, were in litigation in relation to a contract with a Portuguese state-owned shipbuilding company, whose obligations were guaranteed by a Portuguese state-owned bank.  Upon it becoming apparent that the bank would be obliged to honour the guarantee, the Portuguese government published a decree law under which the shipbuilders were entitled to, and did, suspend the plaintiffs rights under the contract, the exercise of which rights would have brought the guarantee into play.  The result was that the bank was not obliged to honour the guarantee, and the plaintiffs were out of pocket.

31.  The plaintiffs wished to argue that the decree law had been promulgated simply to serve the commercial interest of both the state-owned shipbuilders and the defendant bank rather than the public interest of Portugal.  In order to pursue this argument they sought letters of request from the Portuguese and West German courts to obtain evidence from two Portuguese Ministers of State and those who instigated and were responsible for drafting the decree law, including the draughtsman, who was then residing in West Germany.

32.  The judge refused to issue the letters of request, a decision affirmed on appeal, the Court of Appeal holding that the court would in its discretion refuse to authorise the issue of letters of request directed to a friendly foreign state where the party seeking the letters of request wished to obtain evidence from witnesses resident in that state or another friendly foreign state to show that the motives of the government of the foreign state in promulgating a law of that state was such that the law was unenforceable in the United Kingdom as being contrary to public policy.

33.  In the leading judgment, by Sir John Donaldson MR, at p 1030b-d, the following passage, relied upon by Mr Grossman, appears:

“Whatever the precise nature of the test to be applied in deciding whether the English courts should give effect to the Decree Law 119/82, it is apparent in the light of the classification approved by this court in Williams & Humbert Ltd v W & H Trademarks (Jersey) Ltd [1985] 2 All ER 213 & 619 that effect should be given to it unless there has been some degree of failure to comply with the standards accepted among civilised nations or unless the law can be characterised as abhorrent in its nature or there has been some degree of ‘iniquity’ on the part of the government or ministers of the Portuguese State.  Any letters of request issued in these circumstances involve inviting Portuguese courts to assist the English courts to investigate such an allegation.

Such a request would, in my judgment, be deeply embarrassing and indeed offensive to the Portuguese courts and would be likely to be embarrassing to the courts of West Germany.  Counsel for the plaintiffs replies that he is only asking for request to be made of these courts and that it will be open to them to refuse.  This is literally true, but judicial comity or good neighbourliness between the judges of different friendly foreign states requires that they refrain from making such requests of each other.  It would be quite otherwise if the issue to which the evidence was directed had been whether some constitutional formality had been observed and whether, as a consequence, the law was invalid or ineffective as a matter of Portuguese law.”

34.  Settebello was concerned with the acts of Ministers of State, and the motives of a government in passing legislation that had a direct impact upon litigation in England.  What was proposed was an inquiry directed to establish that Ministers of State in Portugal had acted “with iniquity”.

35.  The present case concerns the conduct of persons apparently occupying the dual of role of Government counsel and police officer and their assistants in conducting an investigation in Hong Kong.  It only needs to set out those two comparative circumstances to demonstrate the massive gulf that exists between the two cases. 

36.  The actions of an Italian prosecutor or police officer in conducting a search premises in Hong Kong does not even begin to approach the very high level of government action and motive involved in Settebello.  Further, in Settebello the motives and actions of Ministers of State in Portugal were under question.  Here, the actions of the Italian witnesses in Hong Kong are under question.

37.  It is probably inevitable that, in the course of a foreign government’s police officers availing themselves of the provisions of the Mutual Legal Assistance Ordinance, questions as to the manner in which steps taken might arise.  It is in my view unthinkable that a foreign state would expect that its prosecutors or police officers and their assistants might seek the aid of the Hong Kong Government under the Ordinance, but that they should not be exposed to any examination of their actions in Hong Kong, in that respect. 

38.  I accept Mr McCoy’s submission that the circumstances of this case fall so far below that of Settebello, that the proposition in that case, undoubtedly correct, is simply not applicable in the present circumstances, and accordingly not a basis to refuse the letter of request.

The defendant may decide how to present its case:

39.  In the normal course of civil proceedings a party is entitled to present its case as it wishes.  It is entitled, if it so wishes, not to call witnesses available to it, even if those witnesses may be able to contribute to the body of evidence upon which the court might reach its factual findings.  Mr Grossman recognised that a party who elected not to call an available witness did so at his own risk.  That risk is clearly set out by Lord Diplock in Herrington v British Railways Board [1972] AC 877 at 930: 

“The appellants, who are a public corporation, elected to call no witnesses, thus depriving the court of any positive evidence as to whether the condition of the fence and the adjacent terrain had been noticed by any particular servant of theirs or as to what he or any other of their servants either thought or did about it.  This is a legitimate tactical move under our adversarial system of litigation.  If a defendant to adopts it he cannot complain if the court draws from the facts which have been disclosed all reasonable inferences as to what are the facts which the defendant has chosen to withhold.”

40.  Mr Grossman accepts entirely that the Secretary for Justice, in electing not to put evidence before the court on the four Italian witnesses, is exposed to the risk there described.

41.  But these proceedings are not ordinary civil litigation. Herrington was an occupiers liability case involving the death of a child who had strayed from a meadow where children lawfully played, onto an electrified railway line. 

42.  The present proceedings are judicial review proceedings in which entirely different principles apply.  Where the actions of a public authority are called into question in judicial review proceedings there is a positive duty on the authority to put all relevant facts before the court: see Sir John Donaldson MR in R v Lancashire CC ex p Huddleston [1986] 2 All ER 941 at 945g:

“[Judicial Review] is a process which falls to be conducted with all the cards face upwards on the table and the vast majority of the cards will start in the authority’s hands.”

43.  The position is put it this way in Mr Fordham’s Judicial Review Handbook, 4^th Ed para 10-4:

“A public authority under challenge by judicial review has an important responsibility to provide full and fair disclosure of relevant evidence and material.  That includes making relevant disclosure such as will assist the claimant’s case, or give rise to some additional (and otherwise unknown) arguable grounds of challenge.  The general absence of orders for disclosure in judicial review is largely sustained by the fact that Courts feel able to trust public authorities to approach judicial review in a spirit of candour.”

44.  It would be quite wrong in my view, for the Secretary for Justice to discharge his duty to put all relevant facts, including those which might assist the claimant’s case, before the court, by selectively filing affidavits from persons, who, while present at the scene, were not the persons whose conduct is being called into question.  Such a course does not meet the spirit of candour expected by the Courts of a public authority.  It is simply no answer for the Secretary for Justice to say that there is a sufficient pool of evidence available from which the court may make the necessary findings of fact, when it is the Secretary for Justice who has established the depth of the pool.

45.  Mr Grossman draws my attention to O 53 r 6(4), and says that it is clear that there is no obligation on a respondent to file an affidavit if he does not wish to.  That is undoubtedly right, and Mr McCoy accepts that proposition.  But it is also the case that in most cases for judicial review there is no dispute as to the facts as judicial review is primarily concerned with procedure and not substance.

46.  Where the resolution of judicial review proceedings turns, as it does here, on hotly disputed issues of fact, then it is entirely appropriate that evidence should be filed by all relevant witnesses, and those witnesses be available for cross-examination.  The importance of examination of witnesses in judicial review proceedings, where facts are in dispute was emphasised by Mumby J in R (G) v London Borough of Ealing [2002] EWHC 250 (Admin).  The right to cross-examine deponents in judicial review proceedings has been recognised as long ago as 1983: see O’Reilly v Mackman [1983] 2 AC 237.  The Secretary for Justice, having elected not to file affidavits from the Italian officers cannot now complain if some of the plaintiffs wish to call them to give evidence. 

47.  In the context of judicial review proceedings, the contention made is not such that I can base a refusal to exercise my discretion in favour of the issue of the letter of request upon it.

The abuse of procedure argument:

48.  This argument involves two propositions.  The first is that the evidence would be adverse to the plaintiffs case. 

49.  This cannot be a ground to oppose the calling of the witnesses.  In the first place there is no evidence before me that the evidence to be called would be adverse to the plaintiffs case.  The plantiffs’ case is, as I understand it, that the search was undertaken by the Italian prosecutors and the forensic accountants, and that the Hong Kong police officers, having assisted in gaining entry to the premises, merely stood by, and at the end of the search took possession of the documents.

50.  While there is evidence from the Hong Kong police officers that that was not the procedure followed, there is no evidence to that effect from the Italian prosecutors or the forensic accountants.  Mr McCoy says that a truthful witness would speak to the contrary.

51.  In any event, just as a party runs a risk in not calling evidence, so does a party run a risk in calling evidence, for he must accept the evidence that is given by that witness.  The inherent risk to both sides in calling any witness is not a basis to refuse to issue the letter of request.

52.  The second proposition is that the true purpose of the application is to enable the witnesses to be cross-examined by counsel for the plaintiffs in HCAL 16 & 19/2007.  Mr Grossman says that this is perverse, and that the court should not be a party to a “devious approach which is tantamount to an abuse of process”.

53.  The evidence is sought to be made available in four sets of proceedings, HCAL 16, 17, 18 and 19/2007, which, by agreement, and with the approval of the court, are being heard together.  The evidence filed or called in any one of the four cases is available evidence in the other three cases.

54.  In those proceedings there are a total of 6 plaintiffs, the precise identity of the plaintiffs differing amongst the proceedings.  Although the four sets of proceedings are being heard together, a decision has been made by the four applicants in HCAL 19/2007 that, instead of making application to issue the letter of request within those proceedings, a separate Originating Summons should be brought for the purpose of obtaining the appropriate order.  While that procedure is not wrong, I would have thought that it would have been more usual, and more appropriate, to make the application by way of summons within one or other of the existing sets of proceedings, probably HCAL 19/2007, in which the four plaintiffs in the application for the letter of request are the applicants. 

55.  Two plaintiffs, that in HCAL 17/2007, Wiltshire Trading Ltd, and one from HCAL 18/2007, HSU May Chun, Katherine, are not applicants for the letter of request.

56.  When Mr McCoy first intimated that, as the Secretary for Justice did not intend to file affidavits from the four Italian witnesses, then he would be seeking to call them, I reminded him that if he did so, he would be entitled only to examine, and not to cross-examine them.  Mr McCoy then pointed out to me that the application for the issue of letter of request was an application made by the two applicants in HCAL 16/2007, and all four applicants in HCAL 19/2007, and not the applicant in HCAL 17/2007 or one of the two applicants in HCAL 18/207. 

57.  Mr McCoy said that in the event that the evidence was taken he, for the four parties who made the application, would call and examine the witnesses.  The two remaining applicants, not parties to the application for letter of request, would, upon the examination of the witnesses, be represented by Mr Alexander King SC.  Mr McCoy said that Mr King, representing parties who had not called the witnesses, would be entitled to cross-examine them.

58.  The use of this procedure does not constitute a devious approach to the litigation which is tantamount to an abuse of process.  It must always be the case that the procedure will follow this situation, where there are several plaintiffs, or several defendants, (this latter being a more common occurrence), and where some of those parties are separately represented.  If one of several separately represented plaintiffs or defendants calls a witness it is never suggested that that witness may not be cross-examined by counsel for the other plaintiffs or defendants. 

59.  All parties may cross-examine witnesses not called by them, and irrespective of whether the witness has given evidence adverse to the cross-examining party: see Phipson on Evidence 16^th Ed para 12-11.  If that be the right in a party who is not calling a witness, and it plainly is, then the exercise of that right can hardly be called either an artifice, a device, devious, or an abuse of process.

60.  The fact that certain of the plaintiffs are separately represented means that the witnesses proposed to be examined under the proposed letter of request may be both examined and cross-examined by plaintiffs to the proceedings is not a basis upon which it should exercise my discretion to refuse the issue of the letter of request.

Conclusion:

61.  For the foregoing reasons I am satisfied that there is no proper basis upon which I may refuse to exercise my discretion in the plaintiffs favour, and made an order in terms of the originating summons for the issuance of the letter of request. 

62.  There will accordingly be an order in terms of the summons dated 20 June 2007, including an order that the costs be in the cause.