PRIME COMPUTER (HONG KONG) LTD v. FRANK SHAM TAK LEUNG AND OTHERS

------------------

HEADNOTE

------------------

The decision of the Court of Appeal in England in Jefferson Ltd v. Bhetcha [1979] 1 WLR 898 and that of the Court of Appeal here in Petroliam Nasional Berhad v. Tan Soon-gin [1990] 1 HKLR 4 (which were decided before the Bill of Rights came into force, and which lay down that where someone faces both civil and criminal proceedings in respect of the same subject-matter, and seeks a stay of the civil proceedings pending the resolution of the criminal proceedings, the burden is on him to show that it is just and convenient that the plaintiff's ordinary right of having his claim processed, heard and determined should be interfered with by way of such a stay) are consistant with the Bill of Rights since, rather than make any inroad into anyone's fundamental rights, those decisions recognize the rights on both sides, and provide guidance as to how such rival rights are to be balanced so as to achieve a just result.

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

-----------------

-----------------

JUDGMENT

-----------------

1. From January 16, 1984, to July 13, 1991, the 1st defendant was in the employ of the plaintiff company, occupying a position of importance and trust. On March 18, 1988, he became a signatory to the plaintiff's bank account with the Citibank and was authorized, together with any one other signatory, there being several of them, to sign cheques drawn on that account. There are here 44 cheques, all signed by the 1st defendant and another signatory by the name of Vincent Lam. They bear dates as early as June 20, 1988, and as late as November 20, 1990; and they total $11,082,956.08. It is the plaintiff's case that the 1st defendant and Vincent Lam misappropriated those funds by drawing those cheques.

2. The 2nd defendant is the 1st defendant's wife. The 3rd defendant is his mother. It is the plaintiff's case that, of the $11,082,956.08, the 1st defendant's wife is holding $713,462.50 for him, while his mother is holding $2,126,126.80 for him.

3. The 1st defendant faces criminal proceedings in this Court in its criminal jurisdiction in respect of the same subject-matter as that of these civil proceedings. As far as these civil proceedings are concerned, Mareva protection is in place. As far as the criminal proceedings are concerned, the 1st defendant is enjoying his liberty albeit under bail conditions. It is common ground between the parties that the criminal trial will probably commence in early 1993.

4. The 1st defendant seeks a stay of this action pending the resolution of the criminal proceedings against him.

5. Now the principle as laid down by the Court of Appeal in England in Jefferson Ltd v. Bhetcha [1979] 1 WLR 898 and by the Court of Appeal here in Petroliam Nasional Berhad v. Tan Soon-gin [1990] 1 HKLR 4 is this. Where someone faces both civil and criminal proceedings in respect of the same subject-matter, and seeks a stay of the civil proceedings pending the resolution of the criminal proceedings, the burden is on him to show that it is just and convenient that the plaintiff's ordinary right of having his claim processed, heard and decided should be interfered with by way of such a stay. It is quite impossible to produce an exhaustive list of all the factors to be taken into account in deciding whether, in any given case of this or any sort, there ought to be a stay. The circumstances in which such situations can arise are, after all, infinitely various. It may be noted in passing that the facts of Jefferson Ltd v. Bhetcha (Supra) - in which a stay was refused - are far closer to the facts of the present case than those of Petroliam Nasional Berhad v. Tan Soon-gin (supra) - in which a limited stay was granted. I note that no more than in passing because I am concerned with the principle; and one cannot argue, or decide, a case from the facts of another one.

6. In the judgment of the Acting Chief Justice in Petroliam Nasional Berhad v. Tan Soon-gin (supra) one finds - as one would expect to find in any judgment of his - a very careful analysis of the matters included among those properly to be taken into account in situations such as these. Certainly, it is clear that a strong factor in favour of a stay would arise if it were to appear that the civil proceedings, if not stayed, were likely to generate publicity which might sensibly be expected to reach potential jurors in the criminal proceedings and influence them. Also, it would be a strong factor in favour of a stay if the refusal of a stay would lead to a disclosure of the defence leading to a real risk that prosecution witnesses would, on the strength of such disclosure, fabricate evidence or trim their testimony. Similarly, if interference with witnesses was something sensibly to be feared as a result of the disclosure of the defence in the course of the civil proceedings if not stayed, then that would be a strong factor in favour of a stay.

7. None of these special factors have been made out in the course of this application by the 1st defendant for a stay of this action pending the resolution of the criminal proceedings against him. But the matter does not end there because the right to reserve his defence up to the last minute - subject of course to any requirement in regard to things such as notice of alibi and putting things to the prosecution witnesses - is a right of an accused person which cannot be lightly dismissed, the right being fundamental. So even in the absence of special factors, it is a matter of anxious consideration in all cases whether or not a stay of civil proceedings pending the resolution of criminal proceedings ought to be granted.

8. Pausing here, I should mention that it is urged on behalf of the plaintiff that the right to reserve his defence has been waived by the 1st defendant who has in these proceedings already indicated at least this much of his defence. There was, he says, some arrangement under which he and Vincent Lam did consultancy work for their employer, the plaintiff, in return for remuneration over and above their salaries and perquisites. And, he says, there were also various sums due to them over the years in respect of, among other things, sums laid out by them on behalf of, or for the benefit of, the plaintiff. He seems to be saying that some or, all of the money represented by the 44 cheques are or may be, attributable to legitimate payments of that sort, and possibly of certain other kinds, due to Vincent Lam and himself from the plaintiff.

9. I do not think that it would be right in all the circumstances to proceed on the basis that the 1st defendant has waived anything. I propose to proceed on the basis that he has waived nothing and that his position is not in any way adversely affected by anything that he has chosen to say about his defence or possible defence.

10. On behalf of the 1st defendant, his counsel has placed reliance on the Bill of Rights. He has done so in connection with the presumption of innocence in favour of the 1st defendant and his right of silence. In my judgment, it is quite unnecessary for the 1st defendant to rely on the Bill of Rights. The presumption of his innocence is there rooted in the Common Law; and so is his right of silence. There is no statutory or other inroad attempted against either of those rights, which are fundamental rights of his, just as the plaintiff's right of access to the courts is a fundamental right of its. So there is no need for him to rely on the Bill of Rights or anything else in their defence. If any such inroad were attempted, no doubt the Bill of Rights would have to be looked at to see what protection it affords against the same. The decision of the Court of Appeal in England in Jefferson Ltd v. Bhetcha (supra) and that of our Court of Appeal in Petroliam Nasional Berhad v. Tan Soon-gin (supra) make no inroad into anyone's fundamental rights. They recognize the rights on both sides; and they provide guidance as to how such rival rights are to be balanced so as to achieve a just result. They are consistent with the Bill of Rights.

11. Now the facts being what I have summarised and the principles of law being as I have stated, what ought, all things considered, to be the result in the present case? These balancing exercises are never easy; nor should they ever be approached by anyone under the illusion that they are easy. But some decision is necessary; and it seems to me that, all things considered, the 1st defendant has not shown that it would be just or convenient to interfere with the plaintiff's right in the way in which the stay which he seeks would interfere with that right. That being so, I dismiss the 1st defendant's application for a stay. Whether the advocates wish to address me on the costs of this application at this stage or whether they wish to address me on costs after I have dealt with certain other matters - the plaintiff's application for summary judgment against the 1st defendant being outstanding - I leave to them.

[Submissions on costs]

12. The plaintiff asks for costs; and the 1st defendant does not feel able to oppose them. The costs of and incidental to the application for a stay will therefore be paid by the 1st defendant to the plaintiff. I also leave the Plaintiff free to proceed to taxation straightaway if it so wishes, that being a course which the 1st defendant does not seek to oppose.