PATHAK RAVI DUTT v. SANJEEV MAHESHWARI

CACV 129/2014

CIVIL APPEAL NO 129 OF 2014

(ON APPEAL FROM HCA 1935 OF 2011)

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REASONS FOR JUDGMENT
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Hon Poon JA (giving the Reasons for Judgment of the Court) :

A. INTRODUCTION

1.  By a judgment dated 23 May 2014, Mimmie Chan J (“the Judge”) dismissed all the plaintiff’s claims based on fraudulent misrepresentation, breach of the Agreement[1] and malicious prosecution.  The plaintiff now appealed, focusing on his claim of malicious prosecution only.[2]

2.  On 24 November 2015, after hearing the parties, we dismissed the appeal with reasons to be handed down, which we now do.

B. BACKGROUND

3.  The background may be briefly stated as follows.

4.  The plaintiff is an Indian national.  Before he came to Hong Kong in June 2007, he said he was working in Krishna Diamonds, a diamond trading company in Mumbai owned by a Mr Mundra, the defendant’s uncle.

5.  The defendant, also an Indian national, had been living and working in Hong Kong since 1993.  He was a diamond and precious gems trader and dealer.

6.  In about January or February 2007, the parties signed a Domestic Helper Contract (“DH Contract”) whereby the defendant employed the plaintiff as a foreign domestic helper.  Subsequently, the plaintiff arrived in Hong Kong on 17 June 2007 to take up the employment.  The defendant terminated his employment with the plaintiff on 19 November 2007.  On the same day, upon the defendant’s report to the police, the plaintiff was arrested for theft of diamonds.  He was charged with the offence of theft on the following day.  On 7 July 2008, the plaintiff was tried before the District Court.  He was acquitted on 18 August 2008.

7.  The plaintiff subsequently commenced the proceedings below to sue the defendant for loss and damage for breach of the Agreement, fraudulent misrepresentation and malicious prosecution.

C. PROCEEDINGS BELOW

C1. The parties’ respective case

8.  The plaintiff’s case on the Agreement is this.  In May 2006, while he was still working in Krishna Diamonds, the defendant approached him.  The defendant told the plaintiff that he would like to employ him as a skilled diamond employee once he had established his own diamond business in Hong Kong.  The defendant offered to employ the plaintiff as a diamond assorted cum trading/dealing salesman in Hong Kong.  He further promised the defendant that he would pay him a higher salary than Krishna Diamonds was paying him; that he would arrange for and obtain a proper employment visa for him to work in Hong Kong; that he would provide him food expenses and reasonable accommodation in Hong Kong; and that he would pay for his air fares between Hong Kong and Mumbai.  The plaintiff eventually accepted the defendant’s offer (“the Agreement”).  He then resigned from Krishna Diamonds at the end of January 2007.

9.  On fraudulent misrepresentation, the plaintiff alleged that in order to induce him to sign the DH Contract, the defendant orally represented to him that he was signing “a document in relation to immigration matters in relation to his entering Hong Kong” and that the plaintiff “would only work in relation to the diamond trade in Hong Kong”.  The plaintiff went on to allege that it was only after his arrival in Hong Kong and on 28 July 2007 that he discovered that the defendant’s representation was untrue and were fraudulently made.  In fact, the DH Contract was a contract to employ him as a domestic employee and he was required to work as such as well as in the defendant’s diamond business.  The plaintiff asked to be returned to India but the defendant refused and insisted that he should complete the two years’ contract.

10.  On 19 November 2007, the plaintiff terminated his employment with the defendant since he had not paid him the salary.  The plaintiff reported to the police that the defendant had taken away his passport.  The plaintiff alleged that as a result or in retaliation, the defendant maliciously and without cause falsely accused him of stealing diamonds from the defendant’s office, which led to his arrest and the charge of theft being laid against him.  But the plaintiff was eventually acquitted after trial in the District Court on 18 August 2008.

11.  The defendant gave a diametrically opposed version. In gist, he said he first came to know the plaintiff in June 2002 when the plaintiff was working as a domestic servant in his uncle’s home.  In 2006, the plaintiff, through the plaintiff’s sister, asked the defendant to employ him as a domestic helper in Hong Kong.  After some initial reluctance, the defendant agreed to do so as an extra helper (in addition to the Indian maid he was then having) to carry out more physically demanding chores at home.  He travelled to Mumbai to discuss with the defendant the terms of the DH Contract.  Before the plaintiff left for Hong Kong, he knew full well that he would be employed as a domestic helper.

C2. The Judge’s judgment

12.  The Judge was not impressed with either party’s evidence.  She found both of them unreliable and found that neither had told the court the whole truth.  For the reasons that she gave, she rejected the plaintiff’s evidence on the Agreement and fraudulent misrepresentation.  She found that the parties had not entered into the Agreement; that the plaintiff was fully aware of the true nature of the DH Contract when he signed it and that he knew he was employed as a domestic helper by the defendant.

13.  Turning to malicious prosecution, the Judge first referred to the general principles as summarized by Ma CJHC (as the Chief Justice then was) in On Jae-Hoon Eugene v Richdale.[3] She then said :

“58. The plaintiff in this case claims that the defendant and his wife had lied to the police, in wrongly accusing the plaintiff of stealing diamonds entrusted to him by the defendant in the morning of 19 November 2007.  The defendant and his wife had given statements to the police as to the alleged circumstances of how the plaintiff had been given diamonds, which he allegedly never returned.  The defendant gave evidence at the trial of DCCC 1234 /2007.  The plaintiff claims that it was not possible for the police to exercise any independent judgment or discretion before charging the plaintiff, since whether the misappropriation of the diamonds had taken place was a matter entirely within the defendant’s knowledge.

59. In his submissions on the defence to the claim of malicious prosecution, counsel for the defendant has focused on whether the nexus between any lie told or procured by the defendant and the prosecution had been broken, by virtue of the independent judgment of the police or prosecution.

60. In the case of Oh Jae-Hoon Eugene, the court already dismissed the argument that it is sufficient merely to show that but for the lie, the police would not have prosecuted the plaintiff.  As Ma CJHC pointed out (at paragraph 23) of his judgment, where a sophisticated and established prosecuting authority such as the Hong Kong Police Force or the Department of Justice is involved in a prosecution, caution must be exercised before identifying anyone else as a prosecutor.  The tort involves the malicious prosecution of another person, not a malicious reporting to the authorities. 

61. Whether independent judgment has been exercised by the prosecution is a question of fact depending on the circumstances of each case.  In this case, although it can be said that the plaintiff and the defendant were the main protagonists, the police had obtained statements from a number of witnesses (including the defendant, his wife and the supplier of the diamonds) in November and December 2007 and in April 2008, and had considered such statements (for whatever they were worth) as well as the CCTV footage which recorded the image of the defendant’s office at the time of the alleged theft.  The fact that such evidence was ultimately rejected by the court at DCCC 1234/2007 as unhelpful does not alter the fact that such evidence had been considered and no doubt evaluated by the police before the final decision was made to prosecute the defendant and to pursue DCCC 1234/2007.  The defendant’s testimony was rejected by the trial judge in DCCC 1234/2007 as being fraught with inherent improbabilities.  After a full trial and after considering all the evidence, the learned judge in DCCC 1234/2007 observed that there was a suspicious time gap between the time when the plaintiff left the defendant’s office and the time when he went to the police station, but that the suspicion was not sufficient to support a conviction. 

62. In Commercial Union Assurance v Lamont [1989] 3 NZLR 187, Richardson J observed at p 199:

‘To proceed on the premise that wherever it emerges that false information was given to the police the intelligent exercise of the discretion to prosecute was impossible, does not reflect the ordinary performance by (the police) or their important responsibilities.

… The core requirement is that the defendant actually procured the use of the power of the States to hurt the plaintiff.  One should never assume that tainted evidence persuaded the police to prosecute.  In some very special cases, however, the prosecutor may in practical terms have been obliged to act on apparently reliable and damning evidence supplied to the police.  The onus properly rests on the plaintiff to establish that it was the false evidence tendered by a third party which led the police to prosecute before that party may be characterized as having procured the prosecution.’

63. On the evidence, I cannot agree that the facts of the case of theft were such that it was impossible for the police and the prosecuting authorities to exercise any independent discretion or judgment as to whether to prosecute the plaintiff.  If, at any time after the plaintiff was charged for the offence of theft on 20 November 2007, the police considered, upon reviewing further police statements and/or the CCTV footages, that the evidence did not support the charge, no doubt the decision to prosecute the plaintiff could have been reviewed or revoked or changed by a decision not to pursue the matter to trial.  The fact of a failed criminal prosecution does not in my view necessarily mean that false information had been given to the police or the prosecution.  Moreover, as Lam J (as he then was) pointed out at first instance in Eugene Jae Hoon Oh v Richdale, the court would not necessarily infer from the fact that false information had been given to the police that the police investigation was tainted.  Nor was the police obliged to act even if a decision had to be made on the strength of the defendant’s evidence alone.  If the police were not satisfied, after reviewing the statements and the CCTV footage, that there was a case of theft, they would not have proceeded with the trial of DCCC 1234/2007.  There is nothing to suggest that the defendant’s evidence had so prejudiced either the police investigation or the discretion to prosecute that these can be said to have been totally negated.  As the court emphasized in Oh Jae Hoon, this is not to be lightly inferred and caution should be exercised.

64. On the facts and evidence of this case, I am not satisfied on a balance of probabilities that the prosecuting authorities did not and had not been able to exercise independent judgment in investigating the complaint of theft, and in its decision to prosecute the plaintiff for theft.  Since the necessary ingredients of the tort of malicious prosecution have not been proved, I dismiss the plaintiff’s claim.”

D. GROUNDS OF APPEAL

14.  In contending that the Judge erred in holding that she was not satisfied on the balance of probabilities that the prosecuting authority did not and had not been able to exercise independent judgment in investigation and prosecuting him, the plaintiff raised two grounds of appeal :

(1) This was a one-on-one case where the offence of theft was entirely within the knowledge of the defendant and the police had to rely on what the defendant had told them before making a prosecution.

(2) The Judge had taken into account matters after the decision to prosecute had been made.  The Judge should have only taken into account matters in the time interval between the allegation of theft made by the defendant and the decision to charge (and hence prosecute) the plaintiff.

15.  In elaborating the grounds of appeal, Mr Sadhwani, counsel for the plaintiff, argued that the charge laid against the plaintiff by the police at 2345 hours on 20 November 2007 represented the decision by the police as the prosecuting authority to prosecute the plaintiff.  In the time interval between the arrest and charge, the decision to prosecute was made.  He submitted that the cause of action of malicious prosecution completed at the time when the charge was laid against the plaintiff.  Thus, he reasoned, what occurred in the time interval between the arrest and charge was crucial to ascertain what had influence the police to lay charge against the plaintiff.  And during the time, the real and damning evidence against the plaintiff was the defendant’s evidence only.  That being the case, it was virtually impossible for the police to exercise any independent judgment as to whether or not to prosecute the plaintiff.  He also argued that the Judge erred in taking into account the post-charge and hence post-prosecution matters as she did.

16.  Counsel’ submissions call for a closer scrutiny.

E. DISCUSSION

17.  In an action for malicious prosecution, the plaintiff must prove four essential elements :

(1) He was prosecuted by the defendant, that is to say, the law was set in motion against him by the defendant on a criminal charge.

(2) The prosecution was determined in his favour.

(3) The prosecution was without reasonable and probable cause.

(4) The prosecution was malicious.

See Clerk & Lindsell on Torts, 21^st Edition, §16-09 at pp 1182 - 1183.

18.  In the context of the first element, two further issues arise from the plaintiff’s contentions in the present case :

(1) What constituted a prosecution?  Was it the laying of the charge against the plaintiff on 20 November 2007? (Issue 1)

(2) Was the defendant the prosecutor? (Issue 2)

See Clerk & Lindsell on Torts, supra, §16-11 at pp 1184.

E1. Issue 1 – Did the laying of the charge constitute a prosecution?

19.  In support of his argument, Mr Sadhwani prayed in aid the general statement “the law was set in motion against a claimant by the defendant on a criminal charge”. He argued that the law was set in motion against the plaintiff when the police, upon the defendant’s complaint, laid the charge of theft against him on 20 November 2007.

20.  In Mohamed Amin v Jogendra Kumar Bannerjee & Others,[4] the Privy Council approached the question as to what constituted a prosecution by looking at the nature of the cause of action of malicious prosecution, focusing on the consideration of when damage was caused to the claimant as a result of the malicious prosecution in determining when the prosecution was constituted.  Depending on the facts, it might take place when the charge was laid or thereafter.

21.  The law of malicious prosecution had developed since Mohamed Amin v Jogendra Kumar Bannerjee & Others.  In Gregory v Portsmouth City Council,[5] the House of Lords held that the law of malicious prosecution was available only in respect of proceedings where the criminal law was, without reasonable and proper cause, set in motion and in a few special cases of abuse of civil legal proceedings. It was unnecessary and undesirable for the tort to be extended to civil proceedings generally.  However subsequently in Crawford Adjusters (Cayman) Ltd v Sagicor General Insurance (Cayman) Ltd,[6] the Privy Council, by a majority of 3-2, departed from Gregory v Portsmouth City Council and held that the rationale for excluding a tort of malicious prosecution of civil proceedings was no longer valid.  The speeches of their Lordships in both cases merit a closer analysis for the purposes of understanding the nature of the tort of malicious prosecution and articulating the correct test for prosecution.  The present appeal is however not the occasion for us to do so as we have not received Mr Sadhwani’s submissions on the cases.

22.  More importantly, as will be seen shortly, Issue 2 is determinative of this appeal, even if one were to accept Mr Sadhwani’s argument that the prosecution was constituted when the charge was laid against the plaintiff.  So we do not think it is necessary for us to express any definitive view on Issue 1.[7]  To Issue 2 we now turn.

E2. Issue 2 – Was the defendant the prosecutor?

23.  The relevant principles, derived from the authorities including those cited by Mr Sadhwani, on the question as to who is to be regarded as the prosecutor where a complainant, who has allegedly manipulated the criminal system for dishonest or nefarious means, is involved had been comprehensively summarized by Ma CJHC (as he then was) in On Jae-Hoon Eugene v Richdale, supra, at [19].  For present purposes, we only need to state the applicable test in simple terms thus : are the circumstances such that the facts relating to the alleged crime are exclusively within the knowledge of the defendant so that it is virtually impossible for the police to exercise any independent discretion or judgment on the matter.

24.  Proceeding from the basis that the prosecution was constituted when the charge was laid, Mr Sadhwani submitted that the police had not exercised any independent judgment when they laid the charge because by then the only real evidence came from the defendant and the police had not viewed the CCTV footage.  With respect, we disagree. The plaintiff, who bears the burden of proof, had not adduced any evidence to the effect that the police had not viewed the CCTV footage before charging him.  Further, the CCTV footage was in fact supplied to the police at about 2:30 pm on 19 November 2007, more than 24 hours before the charge was laid.  The reasonable inference to be drawn is that the police, in carrying out their investigation, must have viewed the CCTV footage and taken that into account before laying the charge.  It is quite inconceivable that a sophisticated and established investigating authority such as the Hong Kong Police Force[8] would have failed to do so.  So it is wrong to assert, as Mr Sadhwani did, that before the charge was laid, the police only had the evidence of the defendant.

25.  Mr Sadhwani then argued that the CCTV footage was of little value because the District Judge, who tried the plaintiff in the criminal trial, did not find it useful.  We do not think the District Judge’s view on the footage is a relevant factor.  We are not concerned with what took place at the criminal trial but rather whether the police had exercised an independent judgment in deciding to charge the plaintiff after evaluating all evidence, including the CCTV footage, available at the time.

26.  In the circumstances, the police, and not the defendant, was the prosecutor, even if the prosecution was constituted when the charge was laid against him on 20 November 2007.  The Judge was entirely correct on this matter.

F.  DISPOSITIONS

27.  For the above reasons, we upheld the Judge’s judgment and dismissed the plaintiff’s appeal.

28.  Costs should follow the event.  We order the plaintiff to pay the defendant costs, to be taxed if not agreed.  The plaintiff is legally aided, his own costs are to be taxed in accordance with the legal aid regulations.  But such costs should not include the solicitors’ costs for preparing the appeal bundles, because (1) they are repetitious as they mostly contain document already in the core bundles; and (2) not a single document in the appeal bundles had been referred to for the purpose of the appeal.  We so ordered.