XCHRX HO LAI FONG, Female v. SECRETARY FOR JUSTICE

1998, No. 218
(Civil)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

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D E C I S I O N

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Rogers, J.A. :

1. This is an application on behalf of the Respondent in the Action who is the Appellant (for convenience she will be referred to as "Ho" herein). The application is that the time for Ho to comply with paragraph 2 of the order of Suffiad, J. made on 25th August be extended until after the hearing and determination of Ho's appeal. The appeal which is referred to is, in fact, an appeal not against the order of Suffiad, J. but the order of 7th September this year of Deputy Judge Muttrie.

2. On that occasion, Deputy Judge Muttrie refused to extend the time for Ho to comply with paragraph 2 of Suffiad, J.'s order until the hearing and determination of the inter partes summons for the Restraint Order, which I shall come to in a minute.

3. These proceedings are taken under the Organized and Serious Crimes Ordinance, Cap. 455. They were lodged, as would already be apparent, on 25th August of this year with an ex parte application before Suffiad, J. That application was by ex parte Originating Summons and sought, in the first place, a restriction on the disposal of property and was a general restriction on disposing supplemented by a restriction on Ho disposing of certain named properties.

4. Paragraph 2 of the Order was for disclosure of information. The information which was sought and was required to be put on affidavit or affirmation on or before the 1st September, included the full value of any salary or other earnings, together with any money, goods or other assets held by Ho, whether in her name and whether located within or without Hong Kong. Ho was also required to identify with full particularity the nature and location of such assets and in whose name those assets were held. The order then went on to specify particulars which were required, including details of bank accounts.

5. The application was supported by one affirmation of Lee Siu Wai. For the purposes of this case and this Decision, I consider it inappropriate to set out the details of that affirmation because it relates to crimes not alleged to have been committed by Ho but the proceeds of which were alleged to have come into Ho's possession and control. Turning to the Organized and Serious Crimes Ordinance, the long title of that Ordinance commences with the words :-

"An Ordinance to create new powers of investigation into organized crimes and certain other offences and into the proceeds of crime of certain offenders; ....."

6. Section 3 of that Ordinance provides :

"(1) The Attorney General may, for the purpose of an investigation into an organized crime, make an ex parte application to the Court of First Instance for an order under subsection (2) in relation to a particular person or to persons of a particular description.

(2) The Court of First Instance may, if on such an application it is satisfied that the conditions in subsection (4)(a), (b) and (d) or subsection (4)(a), (c) and (d) are fulfilled, make an order complying with subsection (3) in respect of the particular person, or persons of the particular description, to whom the application relates."

7. It is not necessary for me to go into the matter on this occasion but it seems that in the context of proceedings of this nature, the Court may well have found itself satisfied in respect of subsection (2). However, I am told that the application before Suffiad, J. on 25th August was one which was made under section 15 of the Organized and Serious Crimes Ordinance. That section provided that the Court may make an order prohibiting any person from dealing with any realisable property, subject to such conditions and exceptions as may be specified in the order. The orders which are made under section 15 are subject to section 14 which provides :-

"(1) The powers conferred on the Court of First Instance by sections 15(1) and 16(1) are exercisable where -

(a) proceedings have been instituted in Hong Kong against the defendant for a specified offence or -

(i) an application for a confiscation order has been made in respect of the defendant where section 8(1)(a)(ii) or (7A) is applicable; or

(ii) an application has been made under section 20(1A) in respect of a confiscation order made against the defendant;

(b) the proceedings have not, or the application has not, as the case may be, been concluded; and

(c) the Court of First Instance is satisfied that there is reasonable cause to believe -

(i) in the case of an application referred to in paragraph (a)(ii), that the High Court will be satisfied as specified in section 20(1A);

(ii) in any other case, that the defendant has benefited from that specified offence.

(2) Those powers are also exercisable where the Court of First Instance is satisfied -

(a) that, whether by the laying of an information or otherwise, a person is to be charged with a specified offence; and

(b) that there is reasonable cause to believe that he has benefited from that specified offence."

8. In paragraph 17 of the affirmation of Lee Siu Wai, it is stated :-

"The investigation of the Money Laundering offence is still continuing. It is estimated that proceedings will be instituted in about 4 months."

9. Although this was tentatively queried by Mr. Chain on behalf of the Appellant, on the basis that there was not a sufficient proximity, in my view, that is sufficient to comply with section 14(2). At any rate for the purposes of today, I proceed upon the basis that the proceedings for a Restraint Order were properly constituted.

10. The Disclosure Order, as I have been told, was made in aid of the Restraint Order. I queried as to why a disclosure Order in terms of section 3 of the Ordinance was not sought. I was not satisfied as to the reason but leave the matter there.

11. Before Deputy Judge Muttrie, Mr. Chain sought an extension of time for the affidavit to be provided until after the hearing of the inter partes summons relating to the Restraint Order. That application was refused.

12. Before me, Mr. Chain submitted that if a stay were not granted, his appeal would be rendered nugatory. Mr. Chain does not aver that there was no jurisdiction in the Court to grant the disclosure Order but says that it should not in practice have been made ex parte.

13. In my view, if there was jurisdiction to make the disclosure Order, it is a matter of discretion for the Judge concerned as to whether he would make it ex parte or not. Of course that jurisdiction must be exercised judicially. In relation to disclosure Orders which are in aid of Mareva injunctions, for example, there is sometimes good sense in making an order requiring the early making of a disclosure affidavit. Experience has shown that those in respect of whom Restraint Orders are necessary, are liable to the temptation to dispose of or secrete assets. The requirement that they disclose their assets on paper early is an important one. Frequently in the initial period after litigation has commenced, those who are prone not to disclose their assets are not in a position to secrete them initially; after a period of weeks or months, the situation changes and parties are liable to become more astute. It is a matter that the Court can weigh in coming to its conclusion as to whether to grant an ex parte order.

14. Mr. Chain, whilst acknowledging that perhaps there might be something to be said in that respect, said that Ho was prepared to make an affirmation in compliance with the disclosure Order provided that affirmation was sealed and filed with Court pending the hearing of the appeal.

15. I then inquired of Mr. Chain as to what the irreparable harm, if any, would be, if, instead of the affidavit being sealed and not disclosed it were given to the Secretary for Justice. Initially, he said that once the disclosure is made, it would alert the Secretary for Justice to assets the disposal of which could be restrained. Since the Order covers all of Ho's assets, this is not a particularly troubling point. It was then made a point with some stress that the information in the affidavit was liable to be splashed in the newspapers. He said there was a great deal of publicity given to this case. Whether that is right or wrong, I am unable to comment on the material before me, nevertheless, paragraph 4 of the order of Suffiad, J. is clear. It says :-

"The information disclosed in compliance with this Order shall not be used for any purposes, other than these proceedings and confiscation proceedings, and shall not be disclosed or otherwise divulged to any third party without the leave of the court."

16. Mr. Chain also indicated that the other objection would be that the disclosure invaded the applicant's privacy. It seems to me that is a marginal consideration in this case and could, if necessary, be compensated in damages. The appeal is an appeal against Deputy Judge Muttrie's order and the matter will, by the time that appeal comes on, have been decided in any event on the return date of the inter partes summons.

17. In my view, I should not interfere with the discretion which has been exercised by Deputy Judge Muttrie and I should not, in the exercise of my own discretion, stay the effect of the order which has been granted by Suffiad, J. which, in my view, has been delayed too long already in any event.

(Anthony Rogers)

Justice of Appeal