TSANG YUK KIU v. HIS HONOUR JUDGE SWEENEY and Another

HCMP No. 1896 of 1995

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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J U D G M E N T

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1. This is an application for judicial review of the decision made by the 1st Respondent, His Honour Judge Sweeney refusing to order a permanent stay of the criminal proceeding against the applicant. The applicant was charged with one count of obtaining property by deception and was due to be tried in the District Court in mid December this year. He applied to the District Judge to stay the proceeding on the ground that it would be an abuse of the process of the court because of the undue delay in bringing the charge against him resulting in serious prejudice to him such that it was unlikely that he could have a fair trial. His application was refused by the District Judge. He now seeks an order of certiorari to quash that decision.

Jurisdiction

2. The first issue raised before me was whether the High Court has jurisdiction to entertain an application for judicial review seeking an order of certiorari. Counsel for the Attorney General quite fairly and properly indicated that the point was raised in the light of a few decisions of this court and the Court of Appeal to which he had drawn my attention. He said, correctly, that he was duty bound to raise it although he would not seek to present very strong arguments on it.

3. Counsel for the Attorney General went through the 1987 amendments to the Supreme Court Ordinance, Cap. 4, namely, ss. 21I, 21K and 25. He submitted that prior to these amendments, the High Court had jurisdiction to issue orders of prohibition, mandamus and certiorari to the inferior courts including the District Court. He pointed out that although ss.21I(1) and 21K(1) were general provisions covering these three types of relief, s.21I(3) referred to the power of the High Court to order only mandamus to the inferior courts and that although s.25(1) dealt with certiorari, it was only limited to matters relating to sentence. He relied on the remarks made by Silke, V-P in George Tan v. Judge Cameron [1992] 1 HKLR 149, which, he said, gave rise to a doubt as to whether the High Court had jurisdiction by way of judicial review to quash a decision made by a District Judge in criminal matters. Counsel drew my attention to the cases of Tung Chi Hung v. Judge Lugar-Mawson, HCMP No.662 of 1992, Lau Wing Wo, HCMP No.3051 of 1992 and R. v. Choi Sze Fai, HCMP No.2679 of 1993 in which the court had made comments which might arguably indicate that the High Court did not have jurisdiction to make an order for certiorari upon a judicial review in relation to criminal matters. I was also referred to the case of Re Ashton [1994] 1 AC 9 dealing with the jurisdiction of the English High Court on judicial review of a decision of the Crown Court.

4. Leading counsel for the applicant submitted that s.21I(1) of the Supreme Court Ordinance preserved the powers of the High Court to deal with prerogative orders which it had before 1987. The Court before the amendments clearly had such jurisdiction. Examples of the exercise of such jurisdiction were R. v. District Judge [1955] 39 HKLR 8 and Tse Pak Sum v. Fung Kit Ching [1960] HKLR 108. Counsel argued that in the George Tan case, the High Court did not doubt that it had the jurisdiction to deal with an application for judicial review seeking an order of certiorari and the Court of Appeal only decided that it did not have jurisdiction to hear an appeal from a High Court decision on a judicial review if the matter was criminal in origin. However, none of the other two judges in the Court of Appeal seemed to share the comments made by Silke, V-P. Finally, the Privy Council while upholding the decision of the Court of Appeal did not say that the High Court had no jurisdiction on the matter. Counsel submitted that the Privy Council dealt with the appeal on the basis that the High Court Judge had the necessary jurisdiction because if it were otherwise, the Privy Council would have made its views known. Counsel argued that in fact the Privy Council recognised that the hearing before the High Court Judge was a judicial review which was to be performed within narrow limits and that implied that he must have jurisdiction to do so.

5. The relevant provisions in the Supreme Court Ordinance, Cap. 4 are as follows:

"Section 21I Order of Mandamus, Prohibition and Certiorari.

(1) The High Court shall have jurisdiction to make orders of Mandamus, Prohibition and Certiorari in those classes of cases in which it had power to do so immediately before the commencement of the Supreme Court (Amendment) Ordinance 1987 (52 of 1987).

(2) Every such order shall be final, subject to any right of appeal therefrom.

(3) The power of the High Court under any enactment to require justices of the peace, magistrates or a judge or officer of a District Court to do any act relating to the duties of their respective officers, or to require a magistrate to stay a case for the opinion of the High Court, in any case where the High Court formally had by virtue of any enactment jurisdiction to make a rule absolute, or an order, for any of those purposes, shall be exercisable by order of mandamus.

...

"Section 21K Application for Judicial Review.

(1) An application to the High Court for one or more of the following forms of relief -

(a) an Order of Mandamus, Prohibition or Certiorari;

(b) an injunction under s.21J restraining a person not entitled to do so from acting in an office to which that section applies,

shall be made in accordance with rules of court by a procedure to be known as an application for judicial review.

(2) An application for a declaration or an injunction (not being an injunction mentioned in sub-section (1)) may be made in accordance with rules of court by way of an application for judicial review, and on such an application the High Court may grant the declaration or injunction claimed if it considers that, having regard to -

(a) the nature of the matters in respect of which relief may be granted by Order of Mandamus, Prohibition or Certiorari;

(b) the nature of the persons and the bodies against whom relief may be granted by such orders; and

(c) all the circumstances of the case,

it would be just and convenient for the declaration to be made or the injunction to be granted, as the case may be.

...

(5) If, on an application for judicial review seeking an order of certiorari, the High Court quashes the decision to which the application relates, the High Court may remit the matter to the court, tribunal or authority concerned, with the direction to re-consider it and reach a decision in accordance with the findings of the High Court.

(6) Where the High Court considers that there has been undue delay in making an application for judicial review, the court may refuse to grant -

(a) leave for the making of the application;

(b) any relief sought on the application,

if it considers that the granting of the relief sought would be likely to cause substantial hardship to, or substantially prejudice the rights of, any person or would be detrimental to good administration.

(7) Sub-section (6) is without prejudice to any enactment or rule of court which has the effect of limiting the time without which an application for judicial review may be made.

25. Power of High Court to vary sentence on certiorari.

(1) Where a person who has been sentenced for an offence by a magistrate or District Court applies to the High Court for an order of certiorari to remove the proceedings before the magistrate or the District Court into the High Court, and the High Court determines that the magistrate or the District Court had no power to pass the sentence, the High Court may, instead of quashing the conviction, amend by substituting for the sentence passed any sentences which the magistrate or the District Court had power to impose .....".

6. In my view, s.21I(1) preserves the position which had existed before the 1987 amendments and retains the jurisdiction of the High Court to make orders of Mandamus, Prohibition and Certiorari in cases where it previously had the power to do so. It is not disputed that before 1987, the High Court did have jurisdiction to make these three types of order with regard to decisions of inferior courts including the District Court. It had done so in relation to both civil and criminal matters. It follows that the High Court now continues to have such jurisdiction. Furthermore, s. 21K(1) provides that any application to the High Court for such orders shall follow the procedure which is to be known as an application for judicial review. The presence of this provision, by necessary implication, acknowledges and confirms that the High Court has such jurisdiction to deal with these three types of order. Section 21K(5) which makes provisions for what the High Court may do after it has quashed a decision of an inferior court by an order of certiorari, necessarily implies that the court has jurisdiction to deal with applications for such reliefs.

7. In the George Tan case, Silke, V-P said at page 171:

"So while specific provision is made for the issue of mandamus to a District Court Judge, no such provision is made for the issue of prohibition and certiorari .... No specific provisions are made for the issue of either prohibition or certiorari before conviction has been recorded."

8. Section 21I(3) which was obviously in the mind of the learned Vice President serves a particular purpose and is aimed at clarifying the types of situation in which the jurisdiction of the High Court to order mandamus can be exercised. I do not think it can be relied on to infer that since that subsection only makes provision for mandamus, therefore it is doubtful whether the High Court has the jurisdiction to grant orders of prohibition and certiorari. This argument cannot be sustained.

9. The learned Vice President further said at page 177 line 35:

"But we are not here considering the propriety of the use of the judicial review procedure in a case such as this - though for myself I consider that matters of abuse of process should remain part of the appellate procedure as they did in R. v. Harris [1991] 1 HKLR 389 and, in England, in R. v. Buzalek and Schiffer (unreported): transcript 89/5147/S) ..... While I am doubtful of the propriety of the use of judicial review in this type of case - which as I have indicated is not the point - I had no doubt at all that this court were, when the root is criminal, cannot have conferred upon it, by that root growing in some transmuted fashion in a civil tree, an appellate jurisdiction which, in my judgment, the terms of the legislation does not permit."

10. As leading counsel for the applicant submitted, the Harris case and the Buzalek and Schiffer case referred to by the learned Vice President are not similar to the present case: neither Harris nor Buzalek and Schiffer was an application for judicial review and Harris was an appeal in which one of the grounds of appeal was that the trial judge should have stayed the criminal proceedings. I think counsel is right in saying that if the High Court had no jurisdiction to deal with an application for judicial review seeking an order for certiorari, both the Court of Appeal in Hong Kong and the Privy Council in the George Tan case would have clearly said so. Furthermore, I think the learned Vice President in the passage just referred to was doing no more than confirming the principle that where an appeal procedure is available, it would not normally be appropriate to make use of the judicial review machinery. That is a view which has been well established. In R. v. Epping and Harlow General Commissioners, ex parte Goldstraw [1983] 3 All ER 257, the English Court of Appeal said at p. 262I:

"That only leaves the residual jurisdiction of the Divisional Court, which of course is that which are being asked to allow to be exercised. But it is a cardinal principle that, saved in the most exceptional circumstances, that jurisdiction will not be exercised where other remedies were available and have not been used."

11. It is, in my view, implicit in the above passage that such a jurisdiction does exist albeit that it must be exercised only in exceptional circumstances where alternative remedies are available but not used. The issue as to whether the High Court has the jurisdiction to deal with this sort of cases is separate and distinct from the issue as to whether it is appropriate for the High Court to entertain such cases or to exercise such jurisdiction. The first issue involves the question of whether the High Court has the power to make an order of certiorari in such cases. If it does not, however meritorious a case is and however appropriate it is to grant such an order, the court simply cannot make such order. The second issue involves the question of whether the High Court, having jurisdiction to make the order sought, would conclude that it is appropriate to do so, bearing in mind there are other alternative remedies open to the applicant.

12. I now come to the various cases referred to me by counsel for the Attorney General. In the case of Tung Chi Hung, the learned judge started off at page 7 of his judgment by saying :

"The first question I have to consider, before going into the merits of this submission is the appropriateness of the present judicial review."

13. He then referred to the submissions of counsel for the Attorney General who argued that the High Court had no jurisdiction to make an order of prohibition to a District Judge. Counsel in that case referred to the relevant provisions of the Supreme Court Ordinance and the comments made by Silke, V-P in the George Tan case, to which I have already made reference. Having referred to all the submissions made by counsel in that case, the learned judge simply said:

"With the greatest respect, I find myself in entire agreement with (counsel's) view of the matter."

It would seem at first sight that the learned judge might have agreed with counsel that there was no jurisdiction. However, he then went on to refer to the case of Keung Siu Wah in which "the whole question of the appropriateness of judicial review" as a remedy when the relief was being sought during the currency of on-going criminal proceedings was considered. He cited certain comments made by Fuad, J.A. in that case. The learned judge at the end was satisfied that the application for judicial review was misconceived.

14. It is therefore not entirely clear whether the learned judge in the Tung Chi Hung case was saying that the High Court had no jurisdiction or that it was not appropriate to have a judicial review in the circumstances of that case. It is also important to note that in the Tung Chi Hung case, the issue raised before the District Judge was that the criminal proceedings ought to be stayed permanently because of autrefois acquit. This of course would be a complete defence which can be relied on at the trial and on appeal. Furthermore, the Tung Chi Hung case was decided before the Privy Council in the George Tan case gave its decision.

15. Then there is the case of Lau Wing Wo. That was an application for judicial review of the decision of another District Judge who refused to stay criminal proceedings against the defendant in that case. The main complaints were that the defendant there had been entrapped by an undercover agent of the I.C.A.C. In that case, the Crown submitted that the application was not appropriate, not that the court had no jurisdiction. Reliance was then placed on the Privy Council decision in the George Tan case which had by then been delivered. Counsel for the defendant in that case submitted that there were cases where it had been accepted that judicial review was an appropriate procedure to deal with the situation where there had been an abuse of the process of the court. The learned judge commented at page 7 of that judgment:

"I have no doubt that this is correct. However, it is only in wholly exceptional cases that judicial review will be appropriate."

16. That case was a case in which a defence, that of entrapment if it was a possible defence, could be put before the court during the trial and on appeal. It would seem therefore that after the decision of the Privy Council in the George Tan case, the reference appears to be made to appropriateness rather than jurisdiction.

17. In the case of Choi Sze Fai, the applicant was charged before the District Court and applied to the High Court for judicial review seeking an order for discovery and disclosure and for a permanent stay of the proceedings unless the I.C.A.C. complied with such requests. That clearly was an entirely different case. There was in fact no application for discovery and disclosure to the District Court. The High Court quite rightly refused to make any order.

18. I do not think that the cases referred to me have established that the High Court has no jurisdiction to hear an application for judicial review in which the applicant seeks an order of certiorari in relation to a criminal prosecution. For the reasons which I have given, I have no doubt that it has. Whether it is appropriate to exercise such jurisdiction is clearly a separate and distinct issue.

Appropriateness

19. Counsel for the Attorney General submitted that the application for an order of certiorari quashing the decision of the District Judge was an inappropriate procedure and that the applicant should challenge that decision as a ground of appeal against conviction if he was to be convicted after trial. Counsel very helpfully and comprehensively referred me to the leading authorities on this issue. It was argued that where there were other remedies available to the applicant but not used, the jurisdiction of judicial review would not be exercised save in the most exceptional circumstances.

20. Counsel accepted that there was no statutory provision giving a right of appeal to the applicant to overturn at this stage the decision of the District Judge. However, he argued that there was little difference between the situation where a right of appeal already existed and one where a right of appeal would exist if the applicant was ultimately convicted. He referred to the example of a submission of no case to answer. If the trial judge had wrongly ruled that there was a case to answer, an aggrieved defendant should wait until he was convicted, could then lodge an appeal against the conviction and rely on the judge's error in holding that there was a case to answer as a ground of appeal. In counsel's submission, there should be no difference where the court refused to stop the trial before the trial and where the court refused to do so at the end of the prosecution case. In both cases, an appeal would lie against conviction. Counsel referred to the comments of Silke, V-P in the George Tan case in the Hong Kong Court of Appeal and the remarks made in Attorney General's Reference No.1 of 1990 in England which, he submitted, were endorsed by the Privy Council in the George Tan case.

21. Counsel also argued that there were good reasons for proceeding with the trial rather than having a judicial review before it took place. This was because any unnecessary and further delay of the proceedings could be avoided. Moreover, any analysis of facts could only be properly reviewed at the trial. If there had been any true prejudice against the applicant, the trial judge would certainly give allowance for that. As a trial judge, he would be seized of the matter and would be in a much better position to assess any prejudice, control the appropriate evidence to be adduced and give sufficient weight to any prejudice which might have been caused to a defendant. Finally, counsel submitted that if the judge had made a wrong assessment of the evidence, the law provided that it was the Court of Appeal consisting of three experienced judges, rather than a single High Court Judge, who should review that decision.

22. As to what constituted exceptional circumstances in which the court's jurisdiction of judicial review may be exercised, counsel submitted that malice or bias on the part of the judicial making tribunal might be regarded as exceptional circumstances. He further argued that the mere fact that the decision was Wednesbury unreasonable was not sufficient because this was the first hurdle which had to be overcome in order to overturn the decision on a judicial review. It was necessary, he said, for an applicant to show more in order to fall within the category of exceptional circumstances. He argued that the applicant in the present case had failed to satisfy that this was such a case.

23. Leading counsel for the applicant pointed out that the Privy Council in the George Tan case had remarked that the observations made by the Hong Kong Court of Appeal on the merits of the case were extra-judicial since they upheld the Court of Appeal's decision that there was no jurisdiction to hear the appeal. However, the Privy Council made no similar remark about the High Court judge's assessment and observations on the merits of the case. Counsel submitted that this indicated that in the view of the Privy Council, the application for judicial review before the High Court Judge was not wholly inappropriate.

24. Counsel further submitted that the applicant in the present case did not really have an alternative remedy. There was no existing provision allowing him to immediately appeal against the District Judge's decision. Furthermore, the relief the applicant was now seeking was that he should not be required to face trial at all. The right of an appeal after he had gone through the trial and been convicted was, in counsel's submission, a different kind of relief. If it could be shown that the District Judge's decision was utterly unreasonable and manifestly wrong, it would be ridiculous to expect the applicant to go through the trial for several weeks. It would be unfair to him to have the case hanging over his head and to go through an "expensive, stressful, time consuming, energy-sapping and unfair" trial. Counsel submitted that this was not the case where the applicant had alternative remedies at the same time, and therefore, the authorities relied on by the Attorney General could be distinguished.

25. Counsel further argued that there was a big difference between a pre-trial decision refusing a stay of the proceedings and a decision that there was a case to answer during the course of the trial. In the latter case, it was correct that the court should not entertain any application for judicial review because this would delay the proceedings. He said that this was not the case here. Counsel pointed out that the present application was not aimed at causing delay and could not have caused any delay to the trial. This was because the applicant did not lose time in having a trial day fixed after the District Judge had ruled against him.

26. Counsel argued that the reason why judicial review to obtain a stay of proceedings could only be obtained in exceptional circumstances was because the court's discretionary jurisdiction to stay criminal proceedings could only be exercised very sparingly. Another reason was that on an application for judicial review, the applicant must show that the judge's decision making process was flawed by misdirection or misapplication of the correct principle of law, or failing to take account of relevant factors, or taking account of irrelevant factors, or was a decision that no reasonable tribunal could have arrived at. This, counsel argued, was different from an appeal. Counsel submitted that there was no authority for saying that exception circumstances meant only malice or bias or "really bizarre" situations. He said that an extreme example of misdirection, irrationality and taking irrelevant considerations into account was also an exceptional circumstance.

27. Counsel also sought to distinguish cases in the U.K. which dealt with the provisions of the Supreme Court Act 1981 with regard to cases in the Crown Court. It was also submitted that in each case the appropriateness of the relief sought by way of judicial review must be considered in relation to the particular facts and circumstances of the case and not by reference to some perceived general unavailability of judicial review. Counsel referred me to two recent cases in the U.K. in which the High Court continued to entertain applications for judicial review in relation to decisions of inferior courts on the issue of stay of proceedings for undue delay. It was pointed out that if the High Court could deal with the decisions of the magistrates court, there was no reason why such jurisdiction could not be exercised in relation to a decision from District Court.

28. In my view, the authorities are quite clear. Where there are alternative remedies available but not used, the court should not, save in exceptional circumstances, exercise its jurisdiction on a judicial review to make an order of certiorari (see R. v. Epping & Harlow General Commissioners, ex parte Goldstraw; R. v. Chief Constable of the Merseyside Police, ex parte Calveley [1986] 1 AII ER 257; R. v. I.R.C., ex parte Preston[1985] AC 835; R. v. Secretary of State for the Housing Department, ex parte Swati [1986] 1 AII ER 717; R. v. Birmingham City Council, ex parte Ferrero [1993] 1 AII ER 537).

29. The reasons for this principle are equally clear. If the legislature has provided a specific procedure, in particular, an appellate machinery, to challenge a decision, it is only right that such procedure or machinery should be followed. To invoke the court's jurisdiction for judicial review without availing oneself of such procedure or machinery is, to say the least, to frustrate the legislative intention and to misuse the court's process. As Lord Templeman said in the Preston case at 862F :

"Judicial review process should not be allowed to supplant the normal statutory appeal procedure."

Hence, where an applicant can readily appeal against the decision in question, judicial review should not be invoked unless there are exceptional circumstances. The court must be satisfied that there are very good reasons to challenge an appealable decision by way of judicial review instead of going on appeal and that the taking of such a course is not aimed at delaying the normal machinery of justice or an abuse of the process of the court.

30. Another important reason for this general rule is that the court's jurisdiction in judicial review is supervisory and not appellate. It is a procedure which is invoked to challenge the decision making process. This jurisdiction is to be exercised within narrow limits and not in accordance with the normal principles applicable in the case of an appeal.

31. One of the first questions to be asked is therefore : is there any alternative remedy readily available to the applicant ?

32. It is not disputed that the applicant has no right of appeal at this stage against the decision of the District Judge refusing a permanent stay of the criminal proceedings. There is no statutory provision in any Ordinance. Apart from applying for a judicial review of that decision, the applicant has to go through the trial and if he is convicted, he can appeal against the conviction relying on the District Judge's refusal as a ground of appeal. In other words, he has no immediate right of appeal, only a contingent one. I think that leading counsel for the applicant is right in saying that there is a difference between the two. The relief the applicant was seeking before the District Judge and is seeking now before this court is that he should not be tried because he is unlikely to have a fair trial and not that he should be acquitted. He is aggrieved because the District Judge was wrong to say that he must go through a trial notwithstanding the delay and prejudice and not because the judge had wrongly convicted him. In my view, I am more inclined to agree with the argument that the applicant does not have an alternative remedy available which has not been used. Even if it can be said that he has, this important difference is certainly a circumstance which has to be taken into consideration in deciding whether it is appropriate to exercise the court's jurisdiction by way of a judicial review. Furthermore, it cannot be said that the present application is made to delay or is likely to delay the criminal proceedings. There are still many weeks before the actual trial date in December.

33. In my view, the example of a ruling by a trial judge on a submission of no case to answer is not appropriate. This is because in that case all the prosecution evidence has already been placed before the judge with all its strength and weaknesses. The trial has already started and is still going on. An immediate appeal or judicial review against the ruling that there is a case to answer will have the inevitable consequence of breaking up and delaying the trial so that if the judge is held to have come to the correct decision, the case will have to be remitted back to him to continue with the case. This may not take place until after quite a while. This would be most undesirable in a trial before a single judge without a jury and disastrous in the case of a trial with a jury. The same applies to an application for discharge on the first day of the trial or before a jury is empanelled (if it is a jury trial). After the judge's ruling, the trial is to start immediately. A judicial review or an appeal against such a ruling would delay the trial.

34. Counsel for the Attorney General said that the applicant must show not only that the decision of the District Judge was Wednesbury unreasonable, but also that there were exceptional circumstances. What then are the exceptional circumstances under which the court should exercise such a discretion? He mentioned that cases where there was malice, bias or bizarre conduct on the part of the judge or tribunal could be regarded as exceptional circumstances. This may be so and I would agree with that. But are there other cases falling within this category ? Where do we draw the line ? Do we simply look at the conduct or behaviour of the judge or tribunal? A whole lot of similar questions can be asked. As Sir John Donaldson M.R. said in the Swati case, "exceptional circumstances" defy definition. This illustrates the difficulty in deciding what "exceptional circumstances" means.

35. In my view, what amounts to exceptional circumstances so that it is appropriate to grant relief by way of judicial review must be considered in relation to the particular facts and circumstances of the case. It is not confined to cases of malice, bias or bizarre conduct. There are judicial comments which throw light on the matters to be taken into consideration in deciding whether the court will intervene by way of judicial review in cases such as the present. Some of the factors may be summarised as follows :

(1) whether an applicant can "distinguish his case from the type of case for which the appeal procedure was provided" (see Sir John Donaldson, M.R., in the Swati case at p.724);

(2) whether it can be shown that it is an arguable case of malice (see Lord Taylor in the Ferrero case at p.539);

(3) whether it can be illustrated that the alternative statutory remedy available in the case in question is "nowhere near so convenient, beneficial and effectual" (see Lord Denning, M.R. in R. v. Paddington Valuation Officer, ex parte Peachey Property Corp. Ltd. [1965]2 All ER 836 at 840) or that "there is no other equally effective and convenient remedy." (see Widgery, C.J. in R. v. Hillingdon London Borough, ex parte Royco Holmes Ltd. [1974]2 All ER 643 at 648);

(4) whether it is "a proper case" being a case "where the decision in question is liable to be upset as a matter of law because on its face it is clearly made without jurisdiction or made in consequence of an error of law" (see Lord Widgery, C.J., in R. v. Hillingdon London Borough, ex parte Royco Holmes Ltd. at 649);

(5) "Whether the alternative statutory remedy will resolve the question on this issue fully and directly, whether the statutory procedure would be quicker, or slower, than procedure by way of judicial review, whether the matter depends on some particular or technical knowledge which is more readily available to the alternative appellate body" (see Glidewell, L.J. in R. v. Hallstrom, ex parte W [1985] 3 All ER 775 at 789 to 790).

36. These are by no means exhaustive. But they are factors which I would also take into consideration in the present case in deciding whether it is appropriate to grant the application for judicial review even if it can be said that the applicant has an alternative remedy available to him.

Principles applicable in judicial review

37. Both parties have made submissions on the grounds upon which a decision may be judicially reviewed, particularly on the ground of "Wednesbury unreasonableness". This principle has been cited so often that one tends to lose sight of what it actually refers to. I shall perhaps start with what Lord Greene, M.R. said in that case (Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [1948] 1 KB 223) at p.229 :

"For instance, we have heard in this case a great deal about the meaning of the word 'unreasonable'. It is true the discretion must be exercised reasonably. Now what does that mean? Lawyers familiar with phraseology commonly used in relation to exercise of statutory discretions often use the word 'unreasonable' in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of things that must not be done. For instance, a person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting 'unreasonably'. Similarly, there may be something so absurd that no sensible person could ever dream that it lay within the powers of the authority. Warrington, L.J., in Short v. Poole Corporation gave the example of the red-haired teacher, dismissed because she had red hair. That is unreasonable in one sense. In another sense it is taking into consideration extraneous matters. It is so unreasonable that it might almost be described as being done in bad faith; and in fact these things run into one another."

38. Lord Scarman in Nottinghamshire County Council v. Secretary of State for Environment [1986] 1 AC 240, sought to explain this principle at p.249B :

" 'Wednesbury principles' is a convenient legal 'shorthand' used by lawyers to refer to the classical review by Lord Greene, M.R. in the Wednesbury case of the circumstances in which the court will interfere to quash as being illegal the exercise of an administrative discretion. No question of constitutional propriety arose in the case and the Master of the Rolls was not concerned with the constitutional limits to the exercise of judicial power in our parliamentary democracy. There is a risk, however, that the judgment of the Master of the Rolls may be treated as a complete, exhaustive, definitive statement of the law.

The law has developed beyond the limits understood to apply to judicial review as practised by the courts in 1948. The ground upon which the courts will review the exercise of an administrative discretion by a public officer is abuse of power. Power can be abused in a number of ways : by a mistake of law in misconstruing the limits imposed by statute (or by common law in the case of the common law power) upon the scope of the power; by procedural irregularity; by unreasonableness in the Wednesbury sense; or by bad faith or an improper motive in its exercise. A valuable, and already 'classical' but certainly not exhaustive analysis of the grounds upon which courts will embark on the judicial review of an administrative power exercised by a public officer is now to be found in Lord Diplock's speech in Council of the Civil Service Unions v. Minister for the Civil Service [1985] AC 374."

39. When one turns to that case, Council of the Civil Service Unions v. Minister for the Civil Service, it can be noticed that Lord Diplock referred to the three common grounds upon which a decision can be controlled by judicial review : illegality, irrationality and procedural impropriety, adding that there might be, in the course of time, further grounds. He said at p.410E :

"By 'illegality' is a ground for judicial review I mean that decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it. Whether he has or not is par excellence a justifiable question to be decided, in the event of dispute by those persons, the judges, by whom the judicial power of stay is exercisable.

By 'irrationality' I mean what can by now be succinctly refers to as 'Wednesbury unreasonableness' (Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [1948]1 KB 223. It applies to a decision which is so outrageous in his defiance of logic or of excepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it. Whether a decision falls within this category is a question that judges by their training and experience should be well equipped to answer, or else there would be something badly wrong with our judicial system.

I have described the third head as 'procedural impropriety' rather than failure to observe basic rules of nature justice of failure to act with procedural fairness towards the person who will be affected by the decision. This is because susceptibility to judicial review under this head covers also failure by an administrative tribunal to observe procedural rules that are especially lay down in the legislative instrument by which its jurisdiction is conferred, even where such failure does not involved any denial of natural justice."

40. It would seem therefore that "Wednesbury unreasonableness" is a concept which covers a variety of situations. It is only one, but by far the most common, ground relied on for challenging a decision upon judicial review. It is a legal shorthand used to describe an administrative decision which is reached when the tribunal has failed to direct itself properly on the law, has overlooked relevant matters or has taken irrelevant matters into consideration or is a decision which no reasonable sensible person would have come to. It must be a decision which can be regarded as "irrational", as Lord Diplock put it.

41. I shall also remind myself that it is not sufficient that I think the District Judge's decision is unreasonable or that I do not agree with it. It must also be shown, and the burden is on the applicant, that it is a decision which no reasonable tribunal would have come to because the District Judge has fallen into the errors which have been referred to above. I shall also adopt the approach which Griffiths, L.J., had emphasized in R. v. Chief Registrar of Friendly Societies, ex parte New Cost Building Society [1984] QB 277 at 260 :

"The court must take a broad view of the decision and not allow itself to be bogged down in minutiae, or led into the error of taking over the role of a fact finding tribunal ... particular care must be taken before stigmatising a decision as one at which no reasonable person could have arrived, for this is coming dangerously close to the court substituting its own decision for that of the tribunal."

42. When counsel's grounds and submissions are properly understood, it would seem that the main ground of attack in the present case is that the decision of the District Judge is Wednesbury unreasonable or irrational suggesting that he had made some wrong assumptions and had failed to avail the applicant's solicitors of an opportunity to rebut the assumptions wrongly taken by him.

Material facts placed before the court

43. In about 1987, the applicant and the two complainants, namely, Mr Lucas Sasmito and Mr Tsang Kwong Fun entered into a joint venture to buy, develop and/or sell properties in Hong Kong. The joint venture was in the form of a limited company called Asia Wide Investment Ltd. in which Mr Sasmito owned 85% interest, Mr Tsang 5% and the applicant 10%. Mr Sasmito was most of the time resident in Indonesia and was responsible for making major decisions. Mr Tsang was responsible for the management and monitoring of the company's finances while the applicant had the task of implementing strategies and preparing documentation. One of the strategies of the joint venture was to purchase properties in the name of various companies to be formed from time to time and then either sold or developed those properties for sale.

44. In February 1988, they made use of a company called Trans-World Investment Ltd. which was owned by Asia Wide, having 60% interest therein and the applicant's own companies having the remaining 40%. Trans-World was used to purchase two properties at Bulkeley Street in Kowloon. The first was No.97 which was purchased in March 1988 at $2.05 million and the second was No.95 which was purchased in May 1988 at another $2.05 million. The total price for these two properties was therefore $4.1 million.

45. On 16th September 1988, a sale and purchase agreement was signed for the sale of the shares in Trans-World to Jade Lion at $4.8 million. This was completed on 13th December 1988. On 21st April 1989, Jade Lion entered into an agreement for the sale of the two properties to China Heart Investment Ltd. for $9.4 million. This was completed on 21st August 1989. It is not disputed that Jade Lion was at the material time beneficially owned by the applicant through his younger brother and sister-in-law.

46. It seems that according to the District Judge, the two complainants first became suspicious of what the applicant had done in January 1989, and became alerted to the relationship between the applicant and Jade Lion. They started to make enquiries firstly through their accountants and later through private investigators. However, during the meantime, the joint venture continued business in buying and selling properties in the Hong Kong market. However not before too long, there were differences between the parties. The break-up of the joint venture came to a head in approximately the middle of 1990. In July, 1990, the solicitors for the two complainants, Messrs Philip K.H. Wong & Co., wrote to the solicitors for the applicant, Messrs Baker & McKenzie, with regard to these differences. There was, however, no mention made in the initial correspondence about the alleged suspicious dealings over the two properties at No.95 and 97 Bulkeley Street. Then on 3rd September 1990, the solicitors for the complainants wrote to the solicitors for the applicant making certain allegations of breach of fiduciary duty on the part of the applicant in respect of the transactions involving the two properties. On 7th September 1990, the solicitors for the applicant replied purporting to answer the allegations contained in that letter. These two letters are of some importance and I shall come back to them at a later stage.

47. It appears, however, that having received the reply from Messrs Baker & McKenzie, neither the complainants nor their solicitors followed up or did anything on the matter. It was in fact the applicant who first started legal proceedings against the two complainants in respect of the joint venture business. In that litigation, again no mention whatsoever was made by the complainants of the transactions regarding these two properties. That was High Court Action No.6631 of 1991. There was subsequently another action HCA No.8145 of 1992.

48. On 9th May 1991, an accountant firm instructed by Mr Tsang Kwok Fun wrote to the Inland Revenue Department saying that the joint venture had sold the shares in Trans-World because the owners of adjoining properties (No.93 and 99 Bulkeley Street) had refused to sell the sites to the joint venture and hence, the joint venture considered that the investment would not generate satisfactory dividend income in future.

The complainants said that it was only in November 1991 that they hired the private investigators (John Picken) to investigate into the matters. It was said that the report of the private investigators came out in August 1993 and it was then that the complainants found out the identity of the Directors of Jade Lion and the fact that the properties were sold to China Heart.

However, it was not until 21st April 1994 that the two complainants reported to the police accusing the applicant of fraud in handling the transactions. That was almost 6 years after the sale of the two properties to Jade Lion. They alleged that in August or September 1988, the applicant had made various verbal misrepresentations upon which they relied in agreeing to sell the shares in Trans-World which owned the properties to Jade Lion.

This was the subject matter of the charge preferred against the applicant in these proceedings. On 24th June 1994, the applicant was arrested by the CCB.

On 16th September 1994, the applicant supplied a written statement to the CCB answering the allegations made against him. It was only 4 days later on 20th September 1994 that the complainants applied to amend the defence in HCA No.6731 of 1991 to add a counterclaim with regard to the sale of the properties to Jade Lion. This was apparently done when the applicant in his statement to the CCB mentioned that notwithstanding their complaint, the complainants had made no counterclaim in respect of sale of such properties in their pleadings in that High Court action. It was on 6th March 1995 that the applicant was charged by the CCB.

49. Before the District Judge, leading counsel for the applicant argued that by reason of the delay in bringing the charge against the applicant, he had suffered and would continue to suffer prejudice so that he would not be able to have a fair trial. Counsel submitted that the alleged offence was in August 1988, almost 7 years ago. The complainants said that they learned that the alleged representations by the applicant were untrue in January 1989. Yet they continued to carry on the joint venture business with him. Even after they had a dispute regarding the business, there was no mention by the complainants with regard to the sale of the properties. It was only in September 1990 that the complainants alleged breach of fiduciary duty on the part of the applicant and that was 17 months after the alleged discovery of the misrepresentation. Furthermore, the subsequent conduct of the complainants, including the declarations to the Inland Revenue Department was inconsistent with the allegations of fraud by the applicant. The report to the CCB was only made in April 1994 when they had apparently failed to settle the civil proceedings between them. In none of the court documents filed by the complainants in the High Court action commenced by the applicant against them was there any reference to this alleged fraud. Counsel argued that such lapse of time was clearly an undue delay on the part of the complainants to make any complaint against the applicant for criminal wrongdoing.

50. It was further submitted that no satisfactory reason was offered by the complainants for not reporting the matter to the police as soon as they discovered the untruth of the applicant's alleged misrepresentation. In fact there was no reason why the complainants had not acted with despatch much earlier. It was pointed out that the engagement of a private investigator should not have made any difference because even according to the complainants, they were aware of the events more than 3 years before they made report to the police. It was suggested that the motive of the complainants' report against the applicant was dubious and not for the purpose of the administration of criminal justice. Counsel submitted that none of the delay could be laid at the door of the applicant.

51. Counsel submitted that the unjustifiable delay had caused prejudice to the applicant and would inevitably lead to unfairness at the trial. This was because the alleged misrepresentations were made orally and were not recorded in writing anywhere. There was nothing to refresh the memories of the complainants as well as that of the applicant. Memories after such a long lapse of time were clearly unreliable. As a result, counsel pointed out that the applicant could not have a clear recollection or as to what happened more than 61/2 years ago. He said that some of the witnesses who were still in Hong Kong had difficulty in recalling relevant evidence. One witness, Mr Stephen Yeung, who might give evidence for the applicant was now in Canada and had indicated in a letter that he had no recollection of the matters. Another potential witness for the applicant in his defence was Madam Chung Lin Ling who was now in New Zealand and had indicated that she was unwilling to come to give evidence. Another witness, an employee of Vigers who had assessed the properties and prepared a valuation report could not be found. The solicitors involved in the transaction had indicated that they could not locate the relevant files. Another witness, Mr Tsang Yau, who was a potential witness for the applicant in his defence and who might be able to contradict the evidence of a prosecution witness, Mr Choi King Hung, would not be able to have a clear recollection of the events.

52. Counsel submitted that because of all these difficulties, the applicant had found it difficult to raise a defence to the charge, to rebut particular aspects of the prosecutions case and to attack the credibility of the prosecutions witnesses. He might be compelled to give evidence on his own defence. It was argued that these are the reasons for saying that the applicant would not have a fair trial.

The District Judge's reasons

53. The District Judge refused the application to have a permanent stay of the criminal proceedings against the applicant. In essence, he took the view that the applicant had not suffered and would not suffer any prejudice so that he would not have a fair trial. He said that while the complainants and their lawyers were kept in the dark, the applicant and his lawyers were well aware of the allegations made by the complainants as early as September 1990 when the complainants' solicitors wrote a letter to the solicitors for the applicant. It was his opinion that the applicant's solicitors, Messrs Baker & McKenzie, being an international law firm would have taken full instructions from the applicant upon receipt of the complainant's letter. They were therefore able in September 1990 to address their minds to the facts and allegations relating to the transactions which took place in 1988. The District Judge took the view that judging from the nature of the complaints as set out in the letter of the 3rd September 1990, there was no distinction between what the complainants had alleged in 1990 which was couched in terms of a civil dispute and what they alleged when they reported to the police in 1994 which was an allegation of criminal activity. He also said that there was no reason to doubt that the applicant's lawyers did not have the file of instructions which they took in relation to the complaint letter in 1990. In other words, the applicant and his lawyers are equipped today as they were in 1990 to deal with the allegations. He further held that by reason of that, he could not infer or presume any prejudice to the applicant.

54. The second reason given by the District Judge was that it was not enough for the applicant to say that after a lapse of so many years, he could not remember the events in 1988. This was because he could always refer to the Baker & McKenzie file of instructions in September 1990 to refresh his memory. Furthermore, the District Judge said that because the accusation made by the complainants are so serious that it would not be difficult for the applicant's memory to be jogged with indignation. The District Judge further took the view that because the transactions in question had resulted in a substantial profit for the applicant that the applicant must be expected to have a clear recollection of the events at that time. The District Judge said that even without the Baker & McKenzie file to refresh his memory, the applicant would not find it difficult to recall the events.

55. Another reason given by the District Judge was that although the explanations given by the complainants for not making a report against the applicant much earlier were not satisfactory, it would be difficult at the present stage to say that they were actually acting with ulterior motives in complaining against the applicant. This is a matter which could best be left to the oral evidence and cross-examination at the trial.

56. The District Judge accepted, as leading counsel for the applicant submitted, that there were materials to discredit the complainant's case. However, he said that because the applicant could make use of these documents and materials to attack the prosecution case, it could not be said that the defence would be affected. He added that at the trial a judge could certainly give allowance to any weakness in the prosecution case or to the prejudice which the defence might be under and would "there and then" stay the proceedings if that was really the case during the course of the trial. He also took the view that the applicant was merely trying to stop the trial with affidavits and legal submissions before the prosecution had a chance to present its case and that was not in the public interest.

57. It is important to note that the District Judge also remarked that if he had found that the applicant had satisfied him that there would be difficulty in raising a defence, rebutting the prosecutions case and/or attacking the credibility of the prosecutions witnesses, he would feel compelled to enter the arena and stay these proceedings.

Grounds relied upon by the applicant

58. Leading counsel for the applicant relied on a number of grounds in saying that the District Judge was Wednesbury unreasonable. First, the judge was wrong to assume that the applicant's solicitors would take and had already taken full instructions when the complainants started to raise the matter in the letter dated 3rd September 1990 which did not raise any criminal fraud. There was also no basis to assume that the solicitors had the file containing full instructions which could be used to refresh the applicant's memory. The judge had failed to appreciate the difference between the complainants' civil allegations made in that letter and the criminal allegations made when they reported to the police in 1994.

59. Second, counsel complained that the District Judge had failed to appreciate the difficulties facing the applicant in preparing his defence. He was wrong to conclude that the unusual transaction and the exceptional gain involved would have led the applicant to recall the events in 1988. He was also wrong to say that the witnesses were only peripheral and not useful to the main issues. The judge was also wrong to say that since the defence had materials and documents to attack the prosecution case, therefore the applicant was not and would not be prejudiced.

60. Counsel further submitted that the District Judge had failed to appreciate that the complainants had not given any satisfactory explanation as to why there was such an unjustifiable delay in reporting the matter to the police.

Principles to be applied in a stay application

61. Leading counsel for the applicant had criticized the District Judge for having erred in matters of law. I think it is appropriate now to deal with the principles which are applicable on the hearing of an application for a stay of criminal proceedings on the ground of abuse of process of the court. Counsel for the Attorney General had very helpfully referred me to almost all the relevant authorities in this area. Without showing any disrespect to him, I do not propose to set them out here. With regard to the principles which are applicable, I can do no better than repeating what Barnett, J. said in the George Tan case [1991] 2 HKLR at p.405G which was approved by the Court of Appeal. Some of those principles are as follows :

"...

(2) Once a person has been charged and is before the court, the court has a power to consider whether its procedure is being abused and to stay the proceedings in appropriate cases. (Jago v. District Court of New South Wales [1989]87 ALR 577.)

...

(3) To stay proceedings or refuse jurisdiction is a grave and serious matter (Harris); is very strictly confined (R. v. Oxford City Justices ex parte Smith [1982]75, Cr App R 200); and should be used only in a clear case. (R. v. Bow Street Stipendiary Magistrate, ex parte Director of Public Prosecutions [1989 ] 91, Cr App R 283, commonly known as : Cherry's case). There will be few occasions where it will be appropriate to intervene. (R. v. Forest of Dean Justices, ex parte Farley [1990] RTR 228.)

(4) Delay that has occasioned, or will occasion, prejudice in the preparation or conduct of the defence is a ground for exercising the court's power to stay. (R. v. Derby Crown Court, ex parte Brooks, [1984] 80 Cr App R 164). The relevant period of delay dates from commission of the alleged. (R. v. Sunderland Magistrate's Court, ex parte Z [1989] CLR 56 and R. v. Telford Justices, ex parte Badhan [1991]2 WLR 866.)

(5) Where delay is substantial, prejudice will be presumed and the prosecution will have to rebut that presumption. (Cherry's case)

(6) 'The ultimate objective is to ensure that there should be a fair trial according to law, which involves fairness both to the defendant and to the prosecution.' (Sir Roger Ormrod in Derby Crown Court p.169.) This involves balancing the interests of the accused with the community's interest in seeing an accused person brought to trial. (Jago's case)

(7) In carrying out that exercise, when based upon delay, the court should consider five factors :

(a) the length of the delay.

(b) any reasons given by the prosecution to justify a delay.

(c) the defendant's responsibility for, and attitude to, the delay.

(d) the proven or likely prejudice to the defendant, including any period of lengthy pre-trial custody and the defendant's health.

(e) the public interest in deposing of serious criminal charges and the conviction of those guilty of the crime.

Those five factors I derive principally from Jago and also from Bell v. Director of Public Prosecutions of Jamaica [1985]2 All ER 585. Of those five, factors (d), prejudice and (e), public interest are the most important. I do not say that this is exhaustive or constitutes an inflexible code. The court should, of course, weigh any and all relevant material and come to a proper judgment."

62. I would respectfully adopt the same in the present case. These are also the principles which the District Judge should apply in dealing with the application. I think it is only fair to say that the applicant complained that the District Judge had wrongly applied these principles.

Delay

63. It is unfortunate that the District Judge did not make a specific finding on the important, although not crucial, issue of whether there was any delay in reporting the matter to the police and bringing the charge against the applicant. He said at the end of his ruling : "There is a lot of force in (counsel's) argument that the complainants were guilty of unjustifiable delay in reporting this matter to Commercial Crimes Bureau. I could not, however, make such a finding without hearing them in evidence."

64. With respect, I do not think it can really be argued that there was no delay in the present case. Whether such delay can be justified (by giving evidence or otherwise) is another matter. The transactions in question were completed at the end of 1988. The District Judge himself said that it was in about January 1989 that the complainants were alerted by a stray fax giving rise to suspicions as to the propriety of these transactions and started inquiries. He added that the earliest possible time for the complainants to become aware of the final price of the properties was in April 1989. However, he said that it was not known when the complainants had sufficient information about the transactions. To illustrate his point, he referred to the complainants' letter of the 3rd September 1990 to the applicant's solicitors, particularly, the use of the words "third party" as showing that the complainants did not know the details. I do not think that is correct. If they had started enquiries in January 1989, it would not be difficult to find out who the directors and shareholders of Jade Lion were by making a company search or to find out who the subsequent purchaser of the properties was by making a land search. In fact, it seems that this was what they had done. Contrary to what the judge thought, in that very letter, the resale price of $9.4 million, the composition of Jade Lion and other details concerning the resale were mentioned. These must have been obtained through searches and inquiries. So they did know the details. And if they had known these, they must also have found out who the third party purchaser was. Furthermore, both complainants would be able to recall what, if any, misrepresentations had been made to them by the applicant just a few months before when they were fresh in their minds. It is therefore wrong to assume that the complainants did not know sufficient information in 1989 and 1990 to raise the matter with the applicant or even report to the police.

65. The dispute between the applicant and the complainants with regard to the joint venture business started in about 1989 or 1990. It is also difficult to understand why there was no mention of these suspected transactions in the correspondence between their solicitors. Whatever the reason for such silence, it would be wrong to assume that since there was no mention in these previous correspondence therefore the complainants did not have knowledge about the transactions in question. Apart from the letter dated 3rd September 1990, no steps had been taken by the complainants to bring this matter to the attention of the police. It was not even made a subject matter of the on-going litigation. It was not until April 1994 that they did so. And that was apparently after their attempt to settle the civil litigation had failed. There was therefore a lapse of more than 5 years since the complainants were first alerted to any suspicions in the transactions in early 1989.

66. The District Judge referred to some explanations given by the complainants in their affirmations and statements. He remarked that those explanations were not satisfactory. However, he seemed to be content that perhaps this matter could be more fully canvassed at the trial. I do not think one could speculate as to whether the complainants could come up with a more satisfactory explanation at the trial when they are cross-examined. They may or may not have an ulterior motive in reporting the matter to the police. A lack of satisfactory explanation in delaying to pursue the matter or report to the police until much later is one thing. The presence of any ulterior motive is another, although the lack of a satisfactory explanation may lead one to infer that there may be an ulterior motive to serve. Whether there was any ulterior motive on the part of the complainants may be extracted by cross-examination. However, it is clear from the materials before the court, and even the judge seemed to agree, that the explanation given was clearly not satisfactory. The lack of satisfactory explanation may also cast doubt on the reliability of the allegations which have been made.

67. In my view, there was clearly a delay. The District Judge should not have made the assumption that in 1989 and 1990, the complainants did not have sufficient information to raise the matter with the applicant or refer the matter to the police. Similarly, he could not have concluded that they did not raise the matter with the applicant's solicitors because they did not know sufficient to do so. Furthermore, he had not placed sufficient weight to the lack of a satisfactory explanation for the delay on the part of the complainants. It is quite clear and it is not disputed that the applicant was not in any way responsible for any part of the delay. Applying the principles I have mentioned earlier, the question of delay and any explanation therefor are important considerations in a stay application. However, it seems that the District Judge had failed to have sufficient regard to these matters.

Prejudice

68. Counsel for the Attorney General submitted and I accept that delay alone is not sufficient for the court to stay the proceedings. The applicant must also show on the balance of probability that he has suffered and will continue to suffer prejudice so that he cannot have a fair trial.

(1) applicant put on notice

69. With regard to this issue, the District Judge held that there was no actual or perceived prejudice to the applicant. The main reason for this was that as early as September 1990, the applicant was put on notice of what the allegations against him were and his solicitors must have taken full instructions on them.

70. First of all, the District Judge took the view that the allegations made in the complainants' letter of 3rd September 1990 were the same or similar to those made by them when they reported the matter to the police in April 1994. It is therefore necessary to examine that letter to see what the allegations were at that time. The important parts of that letter read as follows:

"We are instructed that our clients (the complainants) were at all material times passive investors in Asia Wide and Asia Wide's daily management was the responsibility of Mr Tsang Yuk Kiu (the applicant), its Executive Director, at all material times. Therefore our clients have only agreed that Asia Wide should sell its shareholdings in Trans-World at the said consideration based on recommendations by your client, Mr Tsang Yuk Kiu. We are further instructed that our clients have recently found out that Jade Lion was all material times controlled by Messrs Tsang Yuk Yin and Wong Yuk Wah, who were apparently husband and wife and Mr Tsang Yuk Yin is a brother of your client Mr Tsang Yuk Kiu. Furthermore, our clients also found out from the search at the Land Office that Trans-World sold the said premises to a third party at the total consideration of HK$9.4 million on 21st April 1989 which was the date of the agreement and such transaction was completed on 20th May 1989.

Our clients therefore wish to put on record the following:-

1. They were at all material times relying on your client's advice and recommendation in reaching their decision to cause Asia Wide to sell its shares in Trans-World at the said consideration;

2. It is apparent that the said consideration for Asia Wide's share in Trans-World was below market value;

3. At all material times, our clients were not aware that Jade Lion, which purchased Asia Wide's shares in Trans-World was controlled by your client's brother and his family member.

By virtue of the aforesaid, our clients would like to reserve all their rights hereunder and in particular our client's rights to claim against your client, Mr Tsang Yuk Kiu, for damages suffered by virtue of his breach of fiduciary duty as an Executive Director of Asia Wide."

71. It is therefore quite clear that before the 3rd September 1990, the complainants and their solicitors were well aware of who the directors and shareholders of Jade Lion were; that these two directors were the relatives of the applicant; that the properties were resold to a third party; the price of that subsequent sale; and the date of the sale and purchase agreement as well as the date of completion. As I have mentioned, if the complainant and their lawyers could be made aware of these facts, they must have knowledge of the name of the "third party". It is also important to note that in that letter it only referred to the applicant's "advice and recommendation" without giving any further detail as to what such advice and recommendation were.

72. In their letter dated 7th September 1990, Messrs Baker & McKenzie replied:

"We have instructions to comment as follows:

1. In mid 1988, one of your clients, Mr Tsang Kwong Fun informed our client, Mr Tsang Yuk Kiu, that Mr Lucas Sasmito (also one of your clients) had no more interest in waiting for the merger of the adjoining buildings of the Property and decided to sell the shares in Trans-World Property Ltd. 'the shares').

2. Afterwards, our clients found Jade Lion Investment Ltd. ('Jade Lion') which offered to purchase the shares at $4.80 million. At that time, Mr Tsang Kwong Fun had informed Mr Tsang Yuk Kiu that he had consulted some property surveyors and agents who advised that the offer from Jade Lion was fair by comparison with market values then prevailing. Moreover, Mr Tsang Kwong Fun informed Mr Tsang Yuk Kiu that Mr Sasmito was satisfied with the price and agreed to proceed with the sale without further delay.

3. The increase in the purchase price of the property subsequent to the sale of the shares was due to the fact that the subsequent sale was effectuated by another developer who had acquired the large buildings adjoining to the property. This happened almost six months after the sale of shares from our respective clients to Jade Lion.

Due to the difference in time and the circumstances relating to the sale of the shares from our respective clients to Jade Lion and the subsequent sale of the property by Jade Lion to its purchaser, our clients considered that the difference in purchase prices in the two sales is fully explicable.

4. Lastly, we are instructed that at all material times during the negotiation of the sale and purchase of the shares, Mr Tsang Kwong Fun was fully aware that Mr and Mrs Tsang Yuk Yin were the Directors of Jade Lion.

Our clients are surprised to receive your letter which put forward allegations which, in our clients' opinion, are totally unfounded."

73. As I see it, the main emphasis relied on by the complainants and their solicitors in their letter was the non-disclosure by the applicant as a fiduciary. This is different from the "verbal misrepresentations" alleged to have been made by the applicant to the complainants as related to the police several years later. Although the letter also referred to advice and recommendation, no particulars were given as to what they were. The last paragraph in that letter made it quite clear that the complainants and their solicitors were anticipating civil litigation on the ground that there was a breach of fiduciary duty on the part of the applicant. That was how the solicitors for the applicant took it and responded to it. If it was correct to say, as the District Judge did, that at that time, the events which happened in 1988 and 1989 were still fresh in the mind of the applicant, it could also be said that the verbal misrepresentations which were alleged to have made by the applicant must be equally fresh in the minds of the complainants. If the "implications" made in that letter must have been clear to the applicant's solicitors, they must equally be clear to the solicitors for the complainants. If the complainants and his lawyers were insinuating that there were criminal activities on the part of the applicant by deliberately misleading the complainants, this would certainly have been stated clearly in that letter. If the complainants' solicitors had only "perceived this as a civil matter", why should one expect the applicant's solicitors to perceive it as a criminal matter and "take full instructions" ? After all, the complainant's solicitors were professional people, as much as the solicitors for the applicant were. An allegation of criminal conduct is quite different from an allegation of breach of fiduciary duty.

74. With respect, I think the District Judge had erred in failing to appreciate the difference between the allegations contained in that letter and the allegation of fraud made in April 1994 to the police. It follows that it was wrong to assume that the applicant and his solicitors upon receipt of the complainants' letter must have been alerted to the possibility of criminal misconduct. It was also wrong to assume that upon receipt of that letter, the solicitors for the applicant must have taken full instructions on the events which happened in 1988.

75. Further, I fail to see the basis for the comment made by the District Judge in his ruling : "by contrast with the prodigious time research and analysis put into this case by Messrs Baker & McKenzie (the applicant's solicitors)". Whatever instructions, research and analysis which that firm might have taken or carried out depended to a large extent on what the allegations were and what sort of case they were to meet. And these were to be found in the letter of 3rd September 1990. I do not think it is fair to them to assume that they must have been aware of allegations which were not expressively made in the letter, and must have been alerted to all the circumstances which might give rise to such allegations and spent "prodigious time in research and analysis" on the matter. In my view, the District judge had also erred in making the assumption that not only had Messrs Baker & McKenzie taken full instructions on matters which were not made clear to them in the letter but also that there was a file containing those instructions which had been kept and which could be used to refresh memory. As it turns out, the solicitors had now put on oath that they had not taken the instructions as the District Judge had suspected or assumed they had or should have taken. They also confirmed in their affidavits that the file they had kept in fact contained only those matters which were contained in their reply.

76. In this connection, I find there is some force in leading counsel's submission that the District Judge had also breached the rules of nature justice by not alerting the parties to this aspect of the case during the hearing before him. If he had, there would have been evidence before him to that effect. As it turns out, not only were there no full instructions taken in September 1990, the file now in the possession of the solicitors would not be of help to the applicant as the judge expected.

77. The District Judge also remarked that in view of the peculiar circumstances of the transactions and the exceptional profit involved, the applicant's memory would be jogged and he would feel so offended by the allegations that it would not be difficult for him to recall the events in 1988. That may or may not be the case. But it would be very dangerously close to suggesting that since he had committed what was alleged against him, he must be in the best position to recall what happened. One must not speculate on what was or was not on the mind of the applicant. Nor must one pre-judge the issues.

78. In my view, the District Judge had adopted an incorrect approach to the question of whether the applicant had suffered and/or would continue to suffer prejudice. This was due to the fact that he had made those wrong and unfounded assumptions of fact to which I have referred. They had affected his determination on the issue of prejudice.

(2) unreliability of prosecution case

79. Leading counsel for the applicant drew the District Judge's attention to a number of documents and matters to show that the prosecution case was not reliable. These included the following :

(1) The letters from the complainants' solicitors to the applicant's solicitors in July 1990 made no reference to the transactions in question,

(2) The explanation given by the complainants' accountants to the Inland Revenue Department on the instruction of complainants was inconsistent with the complaint to the police,

(3) The complainants made no complaint or counterclaim in respect of the transactions in the civil litigation between the parties,

(4) It was only after the applicant had made a statement to the CCB drawing attention to this that the complainants saw fit to add a counterclaim,

(5) There was an inconsistency in their affidavits of 14th June 1995 seeking to explain the delay in making a complaint to the CCB and this was contradicted by the earlier statements made to the police,

(6) The complainants' solicitors refused to show a copy of the private investigator's report to the applicant's solicitors.

80. The District Judge took the view that because the applicant had a lot of materials to attack the prosecution case, therefore he was in no way prejudiced by the lapse of time. With respect, I cannot agree. The strength and weaknesses of the prosecution case, including in particular any discrepancies in the evidence intended to be adduced are factors for the consideration of a judge hearing an application for stay of proceedings. Why should a defendant face a long and expensive trial if that is to be the prosecution case he has to face after such a long delay in charging him and bringing him to court ? However, I am conscious of the fact that even if I do not agree with the District Judge, this is not sufficient to intervene on an application for judicial review. But this attitude of the District Judge illustrates not only that he had taken the wrong matter into consideration, the correctness of his approach is also cast in doubt. If his logic was correct, it would mean that even if the prosecution case shows some inherent weaknesses, so long as a defendant's chances of getting an acquittal are high, then he has no need to fear and should go to trial. If that is in fact what was in the judge's mind, I must say, with respect, that this must be a wrong approach altogether.

(3) loss of potential witnesses for the defence

81. The applicant further submitted that he would be prejudiced at the trial because some of his witnesses, including himself did not have clear recollection of the events in 1988 and 1989, some of the witnesses were unwilling to give evidence for the defence and some of the documents could not be traced. The District Judge had this to say in his ruling :

"Mr Huggins has taken me through a list of potential witnesses for the defence to show how little they can now recall. Frankly, these are all peripheral witnesses despite Mr Huggin's claim that we will never know what they might have remembered if it wasn't so long ago. This case is about 3 people only, the 3 partners, and what was and was not said, agreed, implied or understood between them orally. Most of the potential defence witnesses I have been referred to would normally not be called in evidence for either side."

82. It is true to say that the joint venture business involved the complainants and the applicant only. The offence of course related to the verbal misrepresentations alleged to have been made by the applicant to the complainants way back in 1988. It is not disputed that none of these alleged misrepresentations were reduced into writing. To a very large extent, therefore, the case for the prosecution depends on the oral evidence of the two complainants and this in turn relies on their recollection of events which were said to have happened 6 to 7 years ago. It is trite that as time passes by, memories will fade. It must also be borne in mind that in the letter dated 3rd September 1990, that is about 1½ years after the alleged offence, no mention was made as to what was said and what was not true. The complainants and the applicant are of course the key witnesses to the incident. However, it is because reliance has to be placed very heavily on the recollection of the 2 complainants of what was said 6 to 7 years ago that it is important to see whether what they are going to say on other matters relating to the transactions in question can be borne out by the evidence of other witnesses. So while it is true that some of the witnesses are 'peripheral', I do not think it can be said that their evidence is not of significance. It may not be so to the prosecution case, but it certainly is as far as the defence case is concerned. We are here of course to deal with whether the defendant is prejudiced to the extent that he is unable to secure a fair trial. The importance of other witnesses is therefore relevant, as counsel for the applicant put it, to raising in evidence a defence, rebutting certain aspects of the prosecution case, and attacking the credibility of the prosecution witnesses, in particular the complainants. I shall perhaps deal with some of the difficulties which it was suggested would be faced by the applicant in his defence at the trial.

83. It was submitted that since the allegations related to oral conversations between the complainants and the applicant, the applicant was required to recall events which happened 6 to 7 years ago. And as such oral representations were not recorded in writing, the applicant was to this extent because of the lapse of time handicapped in recalling those events and/or conversations. It was said that the same handicap should face the two complainants. In my view, it cannot be said that because the prosecution witnesses are handicapped by loss of memory through a lapse of time, it would not affect the defendant if he is also under the same disadvantage. Afterall it is the applicant who is facing a trial in which the oral evidence of the witnesses is of vital importance, particularly in the context of this case.

84. It was alleged by one of the complainants that the applicant had made various long distance phone calls to him and tried to persuade him to agree to the sale of the two properties in question. It was pointed out that Mr Sasmito has given three different days as the dates on which the telephone conversations took place. It was said that the dates of the conversations could be important in that if Mr Sasmito was correct in saying that the conversations took place 10 days before the signing of the sale and purchase agreement on 16th September 1988, then this could not be correct because it was well before 10 odd days that solicitors were instructed and title deeds were provided for the purpose of preparing a sale and purchase agreement. It was the applicant's intention to illustrate how unreliable Mr Sasmito's recollection was by reference to records of the Hong Kong Telecom. However, due to the lapse of time, such records are no longer available. The applicant will be deprived of a piece of information to discredit Mr Sasmito.

85. Another important allegation was that the applicant had persuaded the complainants to sell the properties at less than market value. In fact, and I do not think it is disputed, before the sale took place, a valuation was obtained from Vigers who had provided a valuation report on the properties. It is now doubtful whether Vigers has still kept such records of the valuation and the communication with either the applicant or Mr Tsang Kwong Fun, one of the complainants. The valuation report was apparently prepared by one Mr Chan of Vigers. However, this person had already left the company and could not be contacted.

86. It was also alleged that in the transactions in question, the applicant had requested one of the complainants to draw a cheque in the sum of $24,000 for payment as commission. And there was no reference in the audited accounts of Asia Wide or Trans-World relating to this alleged commission. In a letter to the Inland Revenue Department dated 9th May 1991, it was said that a commission in the sum of $14,400 and not $24,000 was paid. The applicant said he had no recollection of what the $14,400 was, why it was paid and to whom. In any event, this was inconsistent with the allegation that there was a commission of $24,000 paid. A Crown witness Miss Thong Mei Lan would be saying that the applicant requested Mr Tsang for such a cheque which was left blank. This lady also said that the cheque was handed to a Miss Chung Lin Ling who was the Accounts Clerk of Trans-World and was asked to obtain the relevant information from the applicant. Miss Chung had earlier informed the applicant that she had never seen the cheque or the information sheets which was alleged to have been given by her to Miss Thong. This aspect of the case may be described as "peripheral" but in my view, it is clearly relevant. However, Miss Chung has now emigrated to New Zealand and through her husband has indicated that she is not willing to give a statement or to be witness at the trial. So to this extent, the applicant will not be able to deal with the evidence regarding the alleged commission paid to him.

87. Another witness against the applicant was an employee called Mr Choi King Hung of China Heart, the purchaser of the properties from Trans-World. He would be saying that he had got in touch with the applicant through an estate agent Mr Tsang Yau of the Tai Chung Estate Company. However, Mr Tsang Yau said in his statement given to the defence that he had never heard of Mr Choi until much later in 1992 and he had nothing to do with the sale of the properties in question nor had heard of a company called China Heart. The long lapse of time would have caused Mr Tsang Yau to have lost his memory as to what happened in 1988 or 1989. The unreliability of Mr Tsang's evidence would affect the defence case.

88. Another important allegation against the applicant was that he did not tell the complainants that he was interested in Jade Lion. The applicant's brother and his brother-in-law were directors of Jade Lion. It was pointed out that both Mr Tsang Kwong Fun, one of the complainants and the applicant's brother and his wife lived in the same Mei Foo Estate. In fact, they knew each other. Furthermore, a solicitor Mr Stephen Yeung who had handled the transactions was also a lawyer for the couple. It was suggested that this solicitor Mr Stephen Yeung would have mentioned the relationship between Jade Lion and the applicant, his brother and sister-in-law to the complainants. However, enquiries from Mr Yeung showed that he had no recollection of the transactions in 1988 or what sort of introduction he had made to the parties at the relevant time.

89. I should also mention that the solicitors for the applicant had written to two firms of solicitors who had handled the transactions at the relevant time, i.e. Messrs M.N. Cheung & Co. and Messrs Fairbairne, Kwok & Catley & Co. Such enquiries reviewed that both solicitor firms were not able to locate the relevant files. These files would contain instructions given by or information given to the applicant regarding the transactions in question.

In my view, these potential witnesses and/or documents are clearly necessary and relevant to the defence case. They would assist the applicant in rebutting some of the allegations raised in the prosecution case, in attacking the prosecution witnesses' credibility and are helpful to the applicant's case. Without them, it cannot be said that the applicant has not suffered any prejudice or will not suffer any prejudice at the trial.

Counsel for the Attorney General had quite fairly conceded that there might be some prejudice to the applicant but said that it was not so great as to result in an unfair trial. He went through the applicant's "heads of prejudice" carefully and submitted that the trial judge would certainly give allowance for any difficulties which the applicant had and would resolve the matter in his favour. It was also said that if there was a lack of memory on the part of any witness, it would be the prosecution which would be prejudiced and further, the trial judge would always bear this in mind in approaching the evidence. Furthermore, it was submitted that some of the difficulties were not caused by the delay.

With respect, I do not agree with this submission. Loss of memory and loss of witnesses are caused by the delay in bringing the matter to court. If the case had been brought up much earlier, this would not happen and some of the witnesses who may be called by the defence had not emigrated yet. Whatever allowance the trial judge may want to give, he cannot bring back lost memory or witnesses. This is a case which relies very heavily on the oral evidence of the witnesses. The applicant has to prepare for the case he has to meet. It would be quite unfair for him as a defendant to guess or to wait and see what facts the witnesses can recall and what they cannot. That the prosecution may also be prejudiced is neither here nor there. The crucial question is whether the applicant is so affected and so handicapped in his defence that there is a substantial risk that he cannot have a fair trial. It is he who is on trial. I do not think it would be very much comfort to him to ask him to go through the trial expecting the judge to resolve any difficulty in his favour. I am sure a fair minded judge would do so, but that is not the correct approach to the question. The court must weigh and balance the public interest in bringing a suspected criminal to trial on the one hand and the interest of the individual of getting a fair trial on the other. If there is a real and substantial risk of unfairness because of the delay in bringing him to trial, I think the court ought to intervene.

The cursory way in which the District Judge dealt with the points on prejudice raised by the applicant in the passage I have quoted above suggested that he had not appreciated the nature of the case against the applicant and the importance of these other documents and evidence to the defence. Such a failure suggests that he had adopted a wrong approach towards the points raised by the applicant, particularly the alleged difficulties facing him at the trial. I am satisfied that if the judge had done so, he would have been satisfied on the balance of probability that these difficulties do exist, that the applicant's fear of an unfair trial is genuine and that such a risk is real.

90. Finally, the District Judge said that the applicant was trying to stop the trial with affidavits and legal submissions before the prosecution had a chance to present this case. He said that it would not be right to pre-empt the decision of the court which would be seized of all the evidence presented or to be presented in the proper manner, viva voce and subjected to cross-examination. In my view, this is a misunderstanding of the nature of the application. The applicant is trying to illustrate by means of affidavits and legal submissions that there was an undue delay which was caused by the complainants, that there was no satisfactory explanation for such delay, that the report to the police against him had a ulterior motive and that the applicant had suffered and would continue to suffer prejudice to the extent that he would not have a fair trial. It is for the judge to assess the materials placed before him and consider whether this was such a case or the criminal proceedings should go on. If he is so satisfied, he should exercise his discretion in staying the proceedings even though the consequence of an order to stay the criminal proceedings is to pre-empt a trial. In fact, the District Judge had remarked on p.272 of the bundle :

"Were these to be shown to my satisfaction on the balance of probabilities, I would feel compelled to enter the arena and stay these proceedings."

Conclusion

91. Having considered the materials placed before the District Judge and also before me and having considered the District Judge's reasons for his ruling, I have come to the conclusion that he had based many of his findings on several wrong assumptions, had adopted an incorrect approach towards the matters in issue and had failed to appreciate the nature of the prosecution case and that of the defence case. His decision cannot stand.

92. I am also satisfied that the applicant has made out a case that there was undue delay by the complainants, that there was no satisfactory explanation for such delay, that he has suffered and will suffer prejudice at the trial such that there is a real risk that he may not be able to have a fair trial. I do not think in the circumstances of this case the applicant should be asked to go through a lengthy and expensive trial. This case falls within the category of exceptional circumstances so that the court should exercise its discretion and intervene. For the reasons I have given, I would quash the decision of the District Judge and grant a permanent stay of the proceedings.