HKSAR v. SIN KAM WAH AND OTHERS

HCMA348/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO. 348 OF 2008

(ON APPEAL FROM ESCC 1026 OF 2003)

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J U D G M E N T

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1. The appellants were each convicted after trial before a magistrate at Kowloon City Magistracy of an offence of failing to comply with a notice issued under section 14(1) of the Prevention of Bribery Ordinance (“the Ordinance”), Cap. 201, contrary to section 14(4) of the Ordinance.  These sub-sections are in the following terms :

“(1)    Where on an application under subsection (1A) the Court of First Instance is satisfied that there are reasonable grounds for suspecting that an offence under this Ordinance has been committed it may make an order authorizing the Commissioner by a notice in writing to require- (Replaced 48 of 1996 s. 6. Amended 25 of 1998 s. 2)

(a)   such person to furnish to the investigating officer specified in such notice a statutory declaration or, as the Commissioner sees fit, a statement in writing, enumerating-

(i)    the property, being property in such categories or classes of property, movable or immovable, as may be specified in such notice, belonging to or possessed by, or which at any time during the 3 years immediately preceding the date of such notice or during such shorter period as may be specified in such notice belonged to or was possessed by, such person, his agents or trustees, specifying in respect of each property enumerated whether it is or was possessed jointly (and, if so, with whom) or severally; and specifying the date upon which, and the person from whom, each such property was acquired and whether by purchase, gift, bequest, inheritance or otherwise, and, where it was acquired by purchase, specifying the consideration paid therefor; and in respect of any property enumerated which has been disposed of, whether by sale, gift or otherwise, at any time during the 3 years immediately preceding the date of the notice or such shorter period as aforesaid, specifying how and to whom the same was disposed of and, where it was disposed of by sale, specifying the consideration given therefor; (Amended 50 of 1987 s. 6)

(ii)   all expenditure incurred by such person in respect of himself, his spouse, parents or children with regard to living expenses and other private expenditure during any period specified in such notice (not, however, being a period commencing earlier than 3 years from the date of the notice);

(iii)   all liabilities incurred by such person, his agents or trustees, at such time or during such period as may be specified in such notice (not, however, being a time or a period commencing earlier than 3 years from the date of the notice), and specifying in respect of each such liability whether it was incurred jointly (and, if so, with whom) or severally; (Amended 28 of 1980 s. 7)

…

(4)     Every person on whom a notice under subsection (1) is served shall, notwithstanding the provisions of other Ordinance or rule of law to the contrary save only the provisions of section 4 of the Inland Revenue Ordinance (Cap 112), comply with the terms of that notice within such time as may be specified therein or within such further time as the Commissioner may, in his discretion, authorize, and any person on whom such a notice has been served, who, without reasonable excuse, neglects or fails so to comply shall be guilty of an offence and shall be liable on conviction to a fine of $20000 and to imprisonment for 1 year.” [Emphasis added]

2. The appellants were three of five defendants convicted at trial on the same facts.  The other two defendants appealed their convictions in February 2007 before me, see HKSAR v. Ng Po On (2007) 2 HKLRD 245, and were successful on the basis that section 14(4) created an offence comprising two elements namely :

(a) the failure to comply with the section 14(1) notice; and

(b) an absence of reasonable excuse for that failure;

and that the magistrate had wrongly required the defendants to establish on a balance of probabilities that they had a reasonable excuse for non-compliance. 

3. It was further held that a remedial interpretation should be adopted in respect of the element of “without reasonable excuse” in section 14(4) so as to raise an evidential burden on a defendant only.  The prosecution appealed that decision in the Court of Final Appeal (see FACC6/2007) although the particular ground of appeal advanced was rendered superfluous by the subsequent decision of the Court of Final Appeal in P. v. the Commissioner of ICAC (2008) 1 HKLRD 214, in which it was held that an order made under section 14(1) which failed to define the scope of the authorisation granted to the commissioner to issue a notice under that sub-section thereby gave the commissioner carte blanche to decide the width of the notice to be issued and was invalid.  It was common ground that the notices issued in the present case were in breach of that principle and for that reason alone the defendants’ conviction could not stand. 

4. Nevertheless the court went on to determine the question as to whether, as had been held in the magistracy appeal, section 14(4) wrongly placed a persuasive burden upon a defendant and whether it should be remedially interpreted so as to comply with Article 11(1) of the Bill of Rights and Article 87(2) of the Basic Law as imposing a merely evidential burden upon a defendant.  

5. The court concluded (at paragraph 78 of the judgment), in dismissing the appeal, that :

“(i)     section 24 read together with section 14(4) of the Ordinance placed a persuasive burden on the defence;

   (ii)      that was inconsistent with the presumption of innocence protected by Article 87(2) of the Basis Law and Article 11(1) of the Bill of Rights; and

   (iii)     the two sections, read in conjunction, do place a persuasive burden on the prosecution and an evidential burden on the defence after a remedial interpretation has been applied, giving them such effect.”

6. It is common ground between the appellants and the respondent in the present appeals, and it must be so, that the appellants must succeed on both the basis of the invalidity of the notice issued under section 14(1) as being in breach of the principle enunciated in P. v. Commissioner of the ICAC, and as a result of the magistrate’s imposition of a persuasive burden upon the appellants to establish a reasonable excuse for their non-compliance with that notice pursuant to section 14(4).  

7. Accordingly the appeals of all three appellants are allowed out of time and their convictions are quashed. 

8. No retrial is sought and none is ordered. 

9. Costs of the appellants are to be paid by the respondent both in this court and the court below.