HKSAR v. T. K. C.

HCMA 74/2024

[2024] HKCFI 1539

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO 74 OF 2024

(ON APPEAL FROM ESMP 289 OF 2024)

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J U D G M E N T

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1.  This is an appeal against a Magistrate’s order for dismissing the Appellant’s application under section 17B and 17BA of the Prevention of Bribery Ordinance, Cap 201 (“the Ordinance”).

Background

2.  As briefly stated by the Respondent, on 23 December 2023, the Appellant has surrendered his Singaporean passport in compliance with a Notice to Surrender Travel Document, obtained by the ICAC under the provisions of section 17A of the Ordinance. The expiring date of the Notice is on 21 June 2024.

3.  On 2 February 2024, the Appellant made an unsuccessful application before a Magistrate under the provisions of sections 17B and 17BA of the Ordinance for the return of his passport and to leave Hong Kong. The Appellant had made the 1^st affirmation dated 29 January 2024 in support of the application. The applicant now appeals against the above Magistrate’s order.

Magistrate’s Decision

4.  As stated by the Magistrate, the Appellant is a Singaporean. He arrived at Hong Kong on 17 December 2023. On 22 December 2023, when he was going to leave Hong Kong, the ICAC stopped and arrested him at the Hong Kong International Airport, and applied and obtained a court order to detain his passport under section 17A of the Prevention of Bribery Ordinance, Cap 201.

5.  Section 17A provides power to a Magistrate upon application to serve written notice against a person who is the subject of an investigation in respect of an offence reasonably suspected to have been committed by him under the Ordinance to surrender his travel document and not to leave Hong Kong for a period of six months. The time limit could be extended for a further three months upon application by the ICAC.

6.  Under sections 17B and 17BA, such person may apply to ICAC Commissioner or to a Magistrate for the return of the surrendered travel document and to leave Hong Kong. As set out in section 17B(3) and 17BA(3), such application shall only be granted upon satisfaction that having regard to all the circumstances, including the interests of the investigation, a refusal of such application would cause unreasonable hardship to the applicant.

7.  The Appellant premised his case upon commercial and family grounds. Commercially, the Appellant allegedly operates a tobacco company known as W, which generates an average annual return of over HK$30 million, and C is the main client. Secondly, the Appellant had to attend a meeting with C in Singapore to discuss their business plan for 2024. Absent which, the Appellant will suffer serious financial consequence. Third, as an older generation businessman, the Appellant is accustomed to meeting his clients face to face. If not, his client might doubt his integrity. And then on family reason, the appellant complained that being stuck in Hong Kong, he could not meet his family in Singapore.

Magistrate’s Analysis

8.  The Magistrate relied on the case of HKSAR v Y, HCMA 551/2003, in which the court would take into consideration the following matters for an application of this type:

(1)  It would decide whether the applicant had demonstrated hardship. If not, that is the end of the matter.

(2)  If the hardship was demonstrated, the court would need to consider whether the applicant had demonstrated that it was unreasonable.

(3)  In doing that the court would need to consider the circumstances of the case including the interests of the investigation.

(4)  There should, therefore, be some material before the court to allow it to decide what those interests are, that is, material allowing the court to determine what weight to attach to those investigatory interests. In the event there was no such material it may well be that little weight could be attached to the investigatory interests in that regard by the court and that accordingly, even a low level of hardship may be considered unreasonable.

(5)  After balancing the interests of the Applicant and the investigation, given all the circumstances of the case the court must then decide whether to refuse the return of the applicant’s passport would impose unreasonable hardship upon him.

9.  On commercial ground, the Magistrate failed to see how he would suffer unreasonable hardship. Firstly, if the Appellant’s company can generate an annual turnover of over HK$30 million, it could be safely assumed that it has administrative staff capable of representing the company. Secondly, digital conference is so common in the business world nowadays, so by switching mode of meeting would hardly raise any suspicions. Thirdly, the appellant affirmed that he had been conducting business with C for over 25 years, so it is highly unlikely that C would take issue on the change of mode in meeting. The Magistrate further considered that a detention of travel document will cause some inconvenience to the Appellant. Yet, it falls far too short of being “unreasonable hardship” or even low level of hardship.

10.  And on family reason, the Appellant’s family could simply visit him in Hong Kong or communicate through virtual meetings.

11.  As to the interest of investigation, Mr Leung, SC, also appeared below, suggested that there was little to show that investigation related to Hong Kong. The persons and events involved appeared to be outside the jurisdiction. The investigation might not even be related to an offence under the POBO.

12.  However, the Magistrate also examined the “Case Synopsis” submitted by ICAC where it alleged the Appellant conspiring with another to accept advantages from one Mr Lee for awarding packaging contracts, contrary to section 9 of the POBO. Some related funds were allegedly transferred to the Appellant’s personal account in Hong Kong. The Magistrate also evaluated the written information of the ICAC officer, Mr Siu. The Magistrate confirmed that the Appellant rightfully falls under the class of section 17A, i.e. a person who is a subject of an investigation in respect of an offence reasonably suspected to have been committed by him under this Ordinance.

13.  Mr Leung, SC, also submitted that the Appellant is a frequent traveller to Hong Kong and he was willing to put up a considerable sum of about HK$5 million to guarantee his return to Hong Kong. However, the Magistrate stated that given the severity of the alleged crime, and that his family and his biggest client C were allegedly in Singapore, there is a likely chance that he would flee from the present investigation. There is strong interest of the investigation to prohibit the Appellant from leaving Hong Kong by detaining his travel documents.

14.  So having balanced all the relevant factors, the Magistrate refused the Appellant’s applications for the release of his travel document and to leave Hong Kong.

Appeal Grounds

15.  Firstly, Mr Leung, SC, submitted that the learned Magistrate erred in finding that the Appellant suffered no unreasonable hardship. And secondly, the Appellant now seeks to adduce fresh evidence of the events subsequent to the application. And then a 2^nd affirmation of the Appellant has been submitted to this court. That affirmation is dated 28 March 2024.

16.  On legal principle, apart from the HKSAR v Y as stated above, Mr Leung, SC, also referred to R v T [1995] 1 HKCLR 174, Leonard J held that to be unreasonable hardship, we must go beyond the level of “considerable inconvenience”. And also in HKSAR v Yang RUI, (unreported, HCMA 1236/2003), Beeson J held that being unable to work in Hong Kong and the effect of delay in obtaining other employment would have on the subject’s future prospects and on his family could amount to unreasonable hardship.

17.  Mr Leung, SC, stated that the errors of facts made by the learned Magistrate:

(1)  Firstly, the Magistrate failed to place any sufficient consideration on the characteristics of the Appellant as a traditional Singaporean businessman with Chinese cultural background. While digital conference may be a “possible” tool, the Appellant still insists on meeting clients in person to show his integrity, which have been the key to his success for decades. So the Appellant is now barred from maintaining his long-term standing commercial practice.

(2)  Secondly, tobacco trading is an industry requiring close bonding and personal goodwill. Attending international conferences in person is necessary and that cannot be replaced by those representatives.

(3)  Thirdly, there was evidence that the appellant has made clear that face-to-face meetings are the custom of the trade and by switching to online mode of meeting, his clients and business partners would definitely be astounded and make speculations about what had happened to him when his freedom of travel is restricted.

(4)  Fourthly, on family and humanitarian ground, the appellant has been forced to separate from his family in Singapore since December 2023. If this appeal is dismissed, this would invariably mean that he would have to stay in Hong Kong for at least another half-a-year. The Appellant has no real property in Hong Kong. Even if the family comes to Hong Kong to visit him, they have no place to reside for an unknown period of time if coming to Hong Kong. It is unreasonable to require his family to break their present status quo in Singapore. And furthermore, the prosecution has an allegation that illicit funds were used to purchase a property in Singapore in the name of the Appellant’s wife, so it would be highly likely that the Appellant’s wife, if come to Hong Kong, would be arrested or detained by the authorities.

18.  And on the recent development of circumstances, by the 2^nd affirmation of the Appellant, on 16 February 2024, the Appellant now already received an email from C saying that if his travel restriction and absence to the meetings continue, C would consider looking for alternatives. So now it seems that the Appellant is now facing a real substantial risk of losing a major client that would certainly cause unreasonable hardship to his business and go far beyond the level of considerable inconvenience.

19.  And the 2^nd affirmation also stated that since 1 January 2021, the Appellant had been appointed as a managing director and general manager of F. The Appellant is required to attend in person various international conferences. Now, the Appellant could no longer perform that duty so that on 1 February 2024, he received a letter from the board of directors of F requesting him to confirm whether he could still be able to perform his duty. If he fails to do that, his position in office would be removed and he would be held responsible for the financial losses of F. And on 28 February 2024, all directors in F unanimously decided that the Appellant shall be removed from the board of directors and all his other positions in office shall be terminated. So the situation has now developed to a point which amounts to a serious and unreasonable commercial hardship to the Appellant.

20.  And on future prospects of business projects, according to the 2^nd affirmation, the Appellant has been engaging in a potential commercial project to set up a manufacturing plant in Indonesia. It is necessary for all the investors, including the Appellant to meet up face-to-face frequently. And other than the Indonesia projects, the Appellant also got a business engagement with CT, so that the Appellant have to visit Malaysia in April 2024. Mr Leung now also submitted in court that the trip have been postponed to June 2024. So the inability for the Appellant to travel abroad has severely hindered his business development and his future business opportunities.

21.  On financial hardship, the losing of trust and commercial relationship with clients and F had already caused substantial financial hardship on the Appellant. Now, Mr Leung also submitted to this court that actual loss resulted. The actual loss concerning F is about HK$3 million and another company that would amount to US$3 million already. And the fact that now all his Hong Kong bank accounts have been frozen. There is no account from which he can withdraw money and now the Appellant is only using his remaining cash and credit card to pay his daily expenses. And it is certainly unknown that how long he had to be grounded in Hong Kong, he can only stay in hotel or service apartment. The cost is high and as a visitor he cannot be allowed to work here, so he will not have any financial resources to survive in Hong Kong in the near future.

22.  And Mr Leung, SC, also submitted that there is no risk of absconding. There will be no prejudicial effect on the interest of the investigation by the ICAC if the court allows the appeal and grants the application because there had been substantial degree of connection with Hong Kong and there is no risk of absconding. Mr Leung, SC, says the latest movement record of the Appellant showing that there had been frequent visit to Hong Kong in the year of 2022 and 2023. The Appellant owns a company in Hong Kong and actively participates in the management. He needs to visit Hong Kong on a frequent and regular basis, so he used to come to Hong Kong.

23.  Apart from that, the Appellant has a substantial amount of assets with a total value of over $100 million in two securities accounts and also one private bank account in Hong Kong with HSBC. The fact that he had still been keeping his assets in Hong Kong after he was arrested demonstrates that he has absolutely no plan to abscond. And he has not taken any steps to transfer any funds out of Hong Kong into Singapore account subsequent to his arrest. And even after that, the Appellant, after arrest, still continued to have some deal with Hong Kong clients as usual. So on 29 February 2024, his company also signed an annual sales agreement with CT. The Appellant has concrete plans to visit Hong Kong regularly in future.

24.  So in conclusion, the bail had been extended to 5 April 2024. The updated version is to be extended to 30 May 2024 and yet there has not been any prosecutory decision been made. Thus to deny him the ability to leave Hong Kong, he could not try his best to salvage his dying business. That would clearly amount to unreasonable hardship to him. To conclude, Mr Leung, SC, submitted that he has substantial assets and a wealth of clients in Hong Kong. He has got a strong Hong Kong connection. His past travel record demonstrate that he has travelled to Hong Kong on a monthly basis. He has a well-established reputation in the tobacco business. He will not risk his name being tarnished and any adverse suggestion on him as a fugitive. So there is no risk for him to not return to Hong Kong.

25.  Now, in court, Mr Leung, SC, further submitted some latest developments and additional information for this court’s consideration. Firstly, concerning the movement record of the Appellant, showed that he had frequent visits to Hong Kong. Secondly, from the latest case synopsis submitted on 8 May 2024, where there had also been another one submitted on 2 February 2024, but the latest version showing that the holding charge consideration had been deleted. And the third, Mr Leung, SC, only got the affirmation of Mr Siu of ICAC in this morning from which the allegation was said to be very flimsy. There lacked any connection to Hong Kong except the meeting held in Hong Kong, and for most persons connected had been overseas persons. And even concerning the alleged transfer to the bank of the Appellant, that only concerned the money laundering offences but not the offences concerning the POBO. And fourthly, as already mentioned here, that the actual financial loss suffered already comes to $3 million concerning F and another company already got actual losses, about US$3 million.

26.  And on family ground, Mr Leung, SC, submitted that the Appellant is restricted to disclose his investigation to his wife. That would be an offence according to the Ordinance so that he now also faces integrity and infidelity issue in his marital status for staying in Hong Kong for over five months already. Yet, it is agreed between the parties that he can still disclose to his wife that his passport has been detained by the ICAC. That falls under the exceptions of the Ordinance.

Respondent’s Reply

27.  On the Appellant’s application to adduce new evidence, the 2^nd affirmation, to this court for consideration, the Respondent referred to the paragraph in HKSAR v Y [2003] 4 HKC 40 at page 44 that the court said:

“13. A person may, it seems to me, given changes in circumstances, make a number of applications under the provisions of section 17B. But any appeal launched pursuant to section 17B(8) of the Ordinance is not a compendium of all such unsuccessful applications. Any appeal must deal with only one such unsuccessful application and be grounded on the material produced for the purposes of that application and the magistrate’s reasonings in refusing that particular application.”

28.  Shall there be any changes in the circumstances after the unsuccessful application, the proper course for the Appellant is to make a fresh application under section 17B and/or 17BA to a Magistrate, instead of adducing new evidence in the appeal hearing. To that, I do agree with the Respondent’s observation. To allow fresh evidence to be adduced is just going through the backdoor to make new application to this court instead of going properly to the Magistrate. Such practice is not permissible and is not to be commended.

29.  Further, Respondent also refers to section 83V of Cap 221, subparagraph 2 stating that:

“(2) ……unless it is satisfied that the evidence, if received, would not afford any ground for allowing the appeal, exercise its powers of receiving it if:

(a) it appears to it that the evidence is likely to be credible and would have been admissible in the proceedings…...”

30.  The Respondent doubts the authenticity and credibility of the document exhibited in the 2^nd affirmation. “TKC-6”, “TKC-12” and “TKC-13” are copies of emails from overseas companies with unverified author. And “TKC-7” to “TKC-11” are only letters, minutes and resolutions of F and that company had not been even mentioned in the 1^st affirmation. And even if these document exhibits are likely to be credible, the content of which could not demonstrate unreasonable hardship.

31.  Furthermore, the documents do not spell out why the physical presence of the Appellant is necessary. And “TKC-7” to “TKC-11” could not show how the termination of the position caused or would cause the Appellant unreasonable hardship. Further, there is no reasonable explanation why his bank information could not be adduced during the first application to the Magistrate on 2 February 2024.

32.  Again, I consider that the Respondent’s contention is entirely correct. First, the document as stated above could not be verified and not likely to be credible. Particularly given the relationship with F had not been disclosed earlier. And secondly, I also fail to see why the physical presence is necessary when the Appellant had already been removed from the board of directors and his position be terminated. So therefore, I do refuse further affirmation to be adduced.

33.  Respondent also stated that the Magistrate had already acknowledged that the detention of travel documents and the ban on leaving Hong Kong will naturally cause some inconvenience to the Appellant. Yet, it falls far too short of being “unreasonable hardship” or even low level of hardship. It is reasonable and fair for the Magistrate to observe the scale of the Appellant’s business, to conclude that there must be company representative to attend the meeting on behalf of the Appellant. So the Magistrate was fair and correct to find that virtual tools are alternative options.

34.  And on family ground, the Appellant’s family members could visit him in Hong Kong and communicate with him through the virtual meetings. And it is merely a speculation that the Appellant’s wife may be intercepted.

35.  So the Magistrate correctly considered all the circumstances, including the interest of the investigation and that the application had failed to demonstrate unreasonable hardship, so the Magistrate’s conclusion that there is strong interest of investigation to prohibit Appellant from leaving Hong Kong by detaining his travel document is sound.

Consideration

36.  According to the recent and latest Court of Final Appeal case HKSAR v Hui Lai Ki [2024] HKCFA 7, the court held that the magistracy appeal is conducted by way of rehearing on the evidence before the trial court, supplemented by such further evidence, the intermediate appellate court might admit within its statutory power on such rehearing. If a judge comes to a different view on the evidence before the court, that itself is an error which justifies the appellate intervention to reverse the decision of the magistrate.

37.  I have also read through the case synopsis and as observed by the Magistrate, the Appellant was allegedly conspiring with another to accept advantages for awarding packaging contracts, contrary to section 9 of the POBO and that a very substantive sum was allegedly transferred to the Appellant and that there had been various discussions and meetings with different parties in Hong Kong. No doubt, there is strong interest of the investigation in this case and the Appellant.

38.  The Appellant now seeks to state that the refusal to grant his application for the return of his travel documents would cause him unreasonable hardship. Firstly, on commercial grounds, the Magistrate had duly considered the Appellant’s case and rightly pointed out that there were alternative options like digital conference or online mode to be adopted instead of physical appearance, particularly given the very long-term relationship with C and that even in traditional business, I also fail to see how and why the physical presence is a must. As such, it is also highly doubtful even the content of those emails and the 2^nd affirmation to be considered.

39.  Particularly given that there had also been scheduled C’s visit to Hong Kong to meet the Appellant as shown in the schedule on 23 to 26 January 2024 as attached to the Appellant’s 1^st affirmation (appeal bundle, page 50). Even if physical meetings is deemed necessary, I also see no reason why the Appellant could not meet the staff of C in Hong Kong. In any event, that meeting had been scheduled and arranged beforehand just like that in January 2024.

40.  And secondly, as to the existence of F and the Appellant’s appointment in that company, that had not been disclosed earlier. Further, his position had already been removed and he had been terminated to his position, thus there is no further implication as to whether his application be granted or not.

41.  Thirdly, on the future prospects and financial hardship, interesting enough, while it is submitted on the one hand that the order prohibiting his leaving Hong Kong would cause serious business loss to him, on the other hand, the Appellant could still successfully sign an agreement with CT in Hong Kong on 29 February 2024.

42.  Fourthly, it is submitted that the Appellant is now using up his remaining cash and credit card to pay his daily expenses and did not have any financial resources to survive and stay in Hong Kong. Yet, it had not been shown and disclosed how much he now had and his credit card limit and also the actual figure of the remaining balance. Not to mention whether there was any other resources he may have to support his living here. And yet he also has substantial amount of assets, total value of over $100 million, in two securities accounts.

43.  And on family ground, likewise, as to the possibility of interception of the Appellant’s wife coming to Hong Kong, that is truly a speculation and that certainly virtual meetings can be arranged by all means. Further, as to the latest information submitted concerning the deletion of the holding charge, Respondent stated that instead of holding charge, in fact the prosecution is likely to lay actual charge on the Appellant. And on another matter concerning whether the Respondent could disclose anything to his wife, the Respondent also agreed that the Appellant can disclose to his wife the fact that his passport had been detained by the authorities, that is, the ICAC of Hong Kong. That falls into the exceptions of the Ordinance.

44.  To conclude, this is a balancing exercise to make, given the seriousness of the alleged underlying offences, a very substantial amount was involved and the possible involvement of the Appellant in the case, the chance of absconding could not be underestimated and there is strong interest in future investigation and I consider the Appellant had failed to demonstrate unreasonable hardship in all the circumstances, even if the 2^nd affirmation were to be taken into account.

45.  Therefore, the Magistrate’s order to refuse the Appellant’s application cannot be faulted. And I also confirm the decision after going through all the evidence and affirmation before me. The appeal is to be dismissed accordingly.

46.  In any event, I understand that the order is to be expired on 21 June 2024, roughly about one-odd month to go. By then, there may or may not be further extension. And even if it has to be extended, further application has to be made before the Magistrate upon latest information.

47.  So to conclude, the appeal is dismissed accordingly.