AB v. X AND OTHERS

HCMP 971/2021

[2022] HKCFI 132

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 971 OF 2021

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D E C I S I O N

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A.  Introduction

1.  On 3 August 2021, Master Hui dealt on the papers with the ex parte application of the applicant (“AB”) relating to a letter of request dated 4 June 2021 (“Letter of Request”) issued by Administrative Law Judge Jennifer Whang (“ALJ”) on behalf of the Board of Governors (“Board”) of the Federal Reserve System of the United States of America regarding administrative enforcement proceedings brought against AB in Washington DC (“US Proceedings”).

2.  The Master ordered the four named individuals identified in the Letter of Request to be examined before Mr Laurence Li SC, viva voce upon oath or affirmation, on the matters specified in the Letter of Request, and he gave further related directions as to the ordered examinations (“Order”).

3.  By summonses dated 10 November 2021, 22 November 2021 and 15 November 2021 (“Set Aside Applications”), three of the respondent witnesses – (“X”), (“Y”) and (“Z”) respectively – have applied for the Order to be set aside. The fourth witness named in the Letter of Request has made no similar application.

4.  Each Set Aside Application is made on the following three grounds:

(1)  The Letter of Request was not issued by a “court or tribunal” as is required by section 75(a) of the Evidence Ordinance Cap 8 (“EO”), and accordingly the Court lacked jurisdiction to make the Order.

(2)  The US Proceedings are not “civil proceedings” for the purposes of section 75(b) of the EO, under either Hong Kong law or US law.

(3)  The ex parte application was tainted by material non-disclosure.

5.  In so far as the first two points raise questions of US law, expert opinion evidence has been filed. X relies on the opinion of Mr Frederick Robinson, which is also adopted for reliance by Y and Z. AB relies on the opinion of Mr Kenneth Yeadon. Of course, for the purposes of Hong Kong proceedings, questions of foreign law, here US law, are questions of fact.

6.  The Letter of Request originally requested the examinations to be conducted not later than 31 December 2021, but that period has subsequently been extended by the ALJ to 18 February 2022. The material obtained on any examinations is intended for use at trial in the US Proceedings in July 2022.

7.  As a result of that extension of time, AB has also applied (“Amendment Summons”) for the Order to be varied, broadly (a) to permit the examinations to be conducted before Mr Li or such other fit and proper person as is nominated by AB, and (b) to set fixed dates in February 2022 for the examination of each of the witnesses. I am told that Mr Li remains available to conduct the examinations on the dates in February 2022 identified.

8.  The Amendment Summons also sought an early date for the hearing of the Set Aside Applications, which I fixed for 10 January 2022.

9.  At the hearing on that date: AB was represented by Mr Richard Zimmern of Counsel; X was represented by Mr Timothy Parker and Mr Josh Baker of Counsel; Y was represented by Mr Nick Luxton of Counsel; and Z was represented by Mr John Hickin, a Solicitor.

10.  Mr Parker’s submissions on the first two grounds, to which I make reference in this Decision, were essentially adopted by Mr Luxton and Mr Hickin. There was also some overlap on and adoption of the submissions on the third ground, though because of its nature there was greater variation in the submissions.

11.  This is my Decision.

B.  The Provisions of the EO

12.  It is common ground that the jurisdiction and powers to give judicial assistance to a foreign court in response to a letter of request is statutory and conferred by Part VIII of the EO, which is headed ‘Evidence for Proceedings in Other Jurisdictions’. Material for present purposes are sections 74-76, which provide as follows:

74. Interpretation

In this Part, unless the context otherwise requires—

civil proceedings, in relation to the requesting court, means proceedings in any civil or commercial matter;

live television link means a system in which two places are equipped with, and linked by, audio visual facilities that enable persons at one place to see and hear persons at the other place, and vice versa, at the same time;

requesting court has the meaning given in section 75;

request includes any commission, order or other process issued by or on behalf of the requesting court.

Evidence for civil proceedings

75. Application to the Court of First Instance for assistance in obtaining evidence for civil proceedings in another court

Where an application is made to the Court of First Instance for an order for evidence to be obtained in Hong Kong and the court is satisfied—

(a) that the application is made in pursuance of a request issued by or on behalf of a court or tribunal (the requesting court) exercising jurisdiction in a country or territory outside Hong Kong; and

(b) that the evidence to which the application relates is to be obtained for the purposes of civil proceedings which either have been instituted before the requesting court or whose institution before that court is contemplated,

the Court of First Instance shall have the powers conferred on it by this Part.

76. Power of a court in Hong Kong to give effect to an application for assistance

(1) Subject to this section, the Court of First Instance shall have power, on any such application as is mentioned in section 75, by order to make such provision for obtaining evidence in Hong Kong as may appear to the court to be appropriate for the purpose of giving effect to the request in pursuance of which the application is made; and any such order may require a person specified therein to take such steps as the court considers appropriate for that purpose.

(2) Without prejudice to the generality of subsection (1) but subject to this section, an order under this section may, in particular, make provision—

(a) for the examination of witnesses by any means, including by way of a live television link;

(b) for the production of documents;

(c) for the inspection, photographing, preservation, custody or detention of any property;

(d) for the taking of samples of any property and the carrying out of any experiments on or with any property;

(e) for the medical examination of any person.

(3) An order under this section shall not require any particular steps to be taken unless they are steps which can be required to be taken by way of obtaining evidence for the purposes of civil proceedings in the court making the order (whether or not proceedings of the same description as those to which the application for the order relates); but this subsection shall not preclude the making of an order requiring a person to give evidence otherwise than on oath where this is asked for by the requesting court.

(4) An order under this section shall not require a person—

(a) to state what documents relevant to the proceedings to which the application for the order relates are or have been in his possession, custody or power; or

(b) to produce any documents other than particular documents specified in the order as being documents appearing to the court making the order to be, or to be likely to be, in his possession, custody or power.

(5) A person who, by virtue of an order under this section, is required to attend at any place shall be entitled to the like conduct money and payment for expenses and loss of time as on attendance as a witness in civil proceedings before the Court of First Instance.

13.  Reference can also be made to section 77 which provides, in part, that a person shall not be compelled by virtue of an order under section 76 to give any evidence which he could not be compelled to give either in civil proceedings in Hong Kong, or in civil proceedings in the country or territory in which the requesting court exercises jurisdiction.

14.  The purpose of section 75 is to give effect to an international treaty, namely the 1970 Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (“Convention”). Therefore, when construing the section, it should if possible be given a meaning that conforms to that of the treaty. Therefore, the Convention may be referred to as an aid to interpretation, and it is also legitimate to refer to the travaux préparatoires, at least to resolve ambiguities (where that material is public and accessible).

15.  The Convention identifies that it is concerned with mutual assistance between “judicial” organs of the State Parties. For example, the Preamble identifies that the purpose of the Convention is to “improve mutual judicial co-operation in civil or commercial matters”. Then, Article 1 of the Convention provides:

In civil or commercial matters a judicial authority of a contracting State may, in accordance with the provisions of the law of that State, request the competent authority of another Contracting State, by means of a Letter of Request, to obtain evidence, or to perform some other judicial act.

A Letter shall not be used to obtain evidence which is not intended for use in judicial proceedings, commenced or contemplated.

The expression ‘other judicial act’ does not cover the service of judicial documents or the issuance of any process by which judgements or orders are executed or enforced, or orders for provisional or protective measures.

16.  Article 2 of the Convention emphasises the need for a Contracting State to designate a Central Authority which will undertake to receive Letters of Request “coming from a judicial authority of another Contracting State. Article 9 refers to the “judicial authority” which executes a Letter of Request. Article 12(a) permits the receiving State to refuse the execution of a letter of request where, amongst other things, execution would “not fall within the functions of the judiciary”. Article 27(a) carves out a freedom to transmit letters of request through other channels, but records that they are to reach “judicial authorities”.

17.  If reference is made to the French language text of the Convention, which has equal authenticity with the English language text, the corresponding phrases also include “coopération judiciaire mutuelle”, “l’autorité judiciaire” and “actes judiciaires”. Between the English and French texts, it is clear that the Convention is concerned with mutual assistance between judicial organs of States, and the phrase “court or tribunal” needs to be seen in that context.

18.  Reference can also be made to the travaux préparatoires, from which it can be seen that those drafting the Convention declined to specify whether administrative tribunals are or are not “judicial authorities”, since their powers and functions significantly vary across Contracting States. The 1970 Explanatory Report includes the following paragraphs, which are to be found in a section headed ‘Matters excluded from the Convention’ (italics in original):

253. Proceedings before administrative tribunals – It was pointed out in the discussion of article 1 that the term ‘judicial authority’ is not defined. To what extent will this include ‘administrative tribunals’?

254. Commission III decided that all courts of arbitration were excluded from the definition of ‘judicial’ authority. As to administrative tribunals generally, no decision was or could be reached. There is an enormous variation in powers and functions of administrative tribunals in various legal systems. Some of them have every attribute of courts, except in name. Others have no resemblance to judicial tribunals. Exact definition is not possible, and each case must be examined on its own facts.

19.  Where the Convention has adopted the phrase “court or tribunal”, it seems to me that there may be a perceived difference between a “court” and a “tribunal”, but the essence of the composite phrase is a recognition of different terminology adopted in different jurisdictions, and requires considering whether the relevant body under review – whatever its given name – has the appropriate and necessary “judicial” attributes.

20.  The procedural framework for the Hong Kong Courts to facilitate the execution of requests for the taking of evidence from foreign courts under the Convention is provided by Order 70 of the Rules of the High Court. Whilst Order 70 sets out the underlying rules of procedure, it is the EO which provides the substantive basis and rules for the Hong Kong Courts’ jurisdiction to recognise letters of request from foreign courts.

21.  The various provisions make clear that the powers conferred on the Court give rise to the exercise of a discretion.

C.  The Letter of Request

22.  It is helpful next to set out some of the content of the Letter of Request.

23.  The Letter of Request is headed with the title of the US Proceedings, as follows (ignoring the reference to docket numbers, bold in original):

UNITED STATES OF AMERICA

BOARD OF GOVERNORS OF THE FEDERAL

RESERVE SYSTEM

WASHINGTON, D.C.

In the Matter of

[AB], individually, and as a

former institution-affiliated party of

[THE FIRM]

CENTRAL, HONG KONG, CHINA

(A NON-BANK SUBSIDIARY OF A

REGISTERED BANK HOLDING CO)

24.  The text of the Letter of Request commences:

ADMINISTRATIVE LAW JUDGE Jennifer Whang, on behalf of the Board of Governors of the Federal Reserve System … requests international assistance to obtain testimonial evidence from non-party witnesses located in the Hong Kong SAR of the People’s Republic of China for use in a civil proceeding before this Court in the above-captioned matter.

This Court request the assistance described herein as necessary in the interest of justice. This Court asks that [AB] through his legal representatives, be allowed to take sworn testimonial evidence from the witnesses located in Hong Kong …, for use at a hearing before this Court.

Based on information provided by [AB], this Court finds that there are sufficient grounds to obtain the testimonial evidence sought through this Letter of Request, which is likely to be relevant to the issues in dispute and is not pre-trial discovery. The evidence requested should therefore be produced in the interests of justice, and without this evidence, justice cannot be completely done.

25.  It can be seen that the ALJ describes herself “on behalf of the Board” as being a “Court”, before which there is a “civil proceeding”, and there are similar references/descriptions elsewhere in the Letter of Request. The Letter of Request also goes on to describe the ALJ, at a given address of the Office of Financial Institution Adjudication (“OFIA”), as the “Requesting judicial authority”.

26.  The Letter of Request identifies the names and addresses of the parties and their representatives. Amongst other things, it points out that AB is represented in Hong Kong for the purpose of applying for execution of the Letter of Request by his Hong Kong solicitors, Reynolds Porter Chamberlain. But that is notably footnoted as follows:

For the avoidance of doubt, nothing in this Letter of Request should be construed as a submission by [AB] to the jurisdiction of the Courts of Hong Kong for the purpose of issues related to this Letter of Request, nor is Reynolds Porter Chamberlain instructed by [AB] to accept service of proceedings related to such issues in Hong Kong.

27.  In passing, it can be noted that this is consistent with the fact that AB has declined to give any evidence in the Set Aside Applications, notwithstanding the allegations of material non-disclosure, and that (as has been revealed by his lawyers) he declines not just to submit to the jurisdiction of the Hong Kong Courts but also to reveal his whereabouts.

28.  It is partly by reference to that footnote that the point has been made in argument that the Letter of Request was probably largely drafted by lawyers acting for AB, and (as is perhaps obvious from its text in any event) the ALJ has placed significant reliance on what has been stated by AB in her decision to issue the Letter of Request.

29.  Under the heading of ‘Description of the Case’, the Letter of Request states:

This Letter of Request concerns and administrative enforcement action pending before and Administrative Law Judge. The enforcement action relates to a client referral hiring program (the “CRP”) operated by [AB’s] employers – […] (together the “Firm”) – from about 2005 to 2013 (“the Relevant Period”), through which the Firm hired individuals referred from clients or potential clients. [AB] is alleged to have violated 12 U.S.C. §1818, under which the Federal Reserve can seek to find and debar a banking official if he: a) violated any law or regulation; b) engaged in an “unsafe or unsound” practice in connection with his bank; or c) breached his fiduciary duties to his bank. The Federal Reserve alleges that [AB] is liable under all three prongs because, based on his involvement in the CRP, [AB] directly violated the United States Foreign Corrupt Practices Act (“FCPA”) and the Firm’s anti-bribery policies and procedures, and indirectly participated in the Firm’s FCPA violation.

30.  Where appropriate, I will adopt the definitions used there and elsewhere in the Letter of Request.

31.  The description of the case continues that the Board is seeking by the proceedings to prohibit AB from any participation in the affairs of any banking institution, and further to impose a US$1 million “civil monetary penalty” on him. The description points out that AB fully denies the allegations.

32.  Under the heading ‘Current Stage of the Proceedings’, the Letter of Request notes that the enforcement actions were commenced on 9 March 2017, and that the parties have exchanged documents including over 1.2 million documents provided by the Federal Reserve, and have conducted discovery dispositions. Reference is also made to a previous Hong Kong court order permitting the examination of Z (and the other witness not relevant to the current Set Aside Applications), but the former ALJ presiding over the matter would not permit any testimony to be taken in the case after 18 April 2018. (As an aside, I understand that the Hong Kong order, against which a challenge had been made but not heard, has therefore been stayed, in effect permanently.) Following the appointment of the new ALJ, the decision not to permit testimony after that date was reconsidered, and on 17 April 2020 an order was issued permitting AB to take testimony for use at the administrative hearing.

33.  The Letter of Request states that the case raises various issues including: (1) whether AB violated the FCPA or other unspecified anti-bribery laws; (2) whether AB violated the Firm’s internal policies; and (3) whether AB’s actions constituted either unsafe or unsound banking practices or a breach of fiduciary duties to the Firm.

34.  It is then stated that:

This Court will make a recommendation to the Federal Reserve regarding whether [AB] engaged in conduct that violated the FCPA or the Firm’s internal policies, breached his fiduciary duties, or engaged in unsafe or unsound banking practices. The Court may also recommend, and the Federal Reserve may also impose, the serious penalties mentioned in Section H, Paragraph 2 above, potentially resulting in adverse reputational and other consequences.

35.  The reason for the reference to the making of ‘recommendations’ will become clear when the relevant rules of practice and procedure of the Code of Federal Regulations (“CFR”) are considered: see below.

36.  The Letter of Request then goes on to set out that the action relates to AB’s alleged involvement in the Firm’s CRP, which involved the Firm hiring individuals referred by clients and potential clients into junior analyst or summer intern roles at the Firm. Particular reference is to 13 candidates who were considered for employment under the CRP. Accordingly, the Letter of Request states, the factual issues in the case involve those set out in a long §8, being:

… the extent of operation of the region-wide CRP across all levels of the Firm; when the region-wide CRP began operating and its method of operation; when [AB] became involved in the CRP; whether he operated within the parameters of a pre-existing program for the offer of employment to referral candidates; whether his supervisors were aware of his involvement in the CRP and the extent of such knowledge; whether the CRP prohibited extending offers to relatives or friends of existing or potential clients, or other relationship contacts, including those with a government connection; whether [AB] was able to operate, and/or did in fact operate, the CRP without the knowledge or involvement of the Firm, including in particular the knowledge of [AB’s] supervisors and the Firm’s Legal & Compliance Department (“L&C”) and Human Resources Department; whether [AB’s] involvement in the CRP was open, or conducted clandestinely; whether [AB] was able to approve a referral higher under the CRP without the formal or other approval or involvement of L&C and/or other employees of the Firm; whether [AB] operated within the boundaries of the CRP as established by the Firm; whether [AB] operated within the boundaries of the Firm’s anti-bribery policies; whether [AB] failed to pre-clear any referral candidates through L&C and/or the Firm’s Junior Resource Management Department (“JRM”), which played an administrative function in the CRP; whether L&C or other persons involved in the CRP complied with their respective obligations under the CRP; what information L&C requested from [AB] in respect of potential referral hires, including in particular the thirteen candidates referred to in the Federal Reserve’s Notice of Intent filed in this action; whether L&C and JRM (and who within those teams) signed off on the offers of employment to potential candidates through CRP involving [AB], including in particular the thirteen candidates in the Notice of Intent; whether [AB] controlled L&C; whether there was any offer of employment given through the CRP by him of which other persons with relevant authority within the Firm were not aware; whether [AB] was in fact the “driving force” behind the CRP; whether [AB] in fact established and/or subsequently modified the CRP, and if so whether this was done without the knowledge or approval of his supervisor or other persons with relevant authority from the Firm; whether [AB] was seen within the Firm as the “gatekeeper” of the region-wide CRP and/or was a “keeper” of the CRP according to its procedures; the process through, and bases on, which an offer was approved through the CRP to each of the thirteen candidates; whether the 13 candidates had any governmental connection for the purposes of the FCPA or other applicable anti-bribery Law; who in fact made and/or delivered the official offer of employment to each of the thirteen candidates, and how; whether [AB], or the Firm generally, received a specific or improper benefit in exchange for the offer of employment to any of the thirteen candidates, or there was any direct link between the offer of employment and any reward (or inappropriate advantage) to either [AB] or the Firm.

37.  In a section headed Relevance of the Witnesses, the Letter of Request sets out – likely on the basis put forward by AB – the roles of the witnesses, and their ability to testify in particular about particular aspects of the CRP. In respect of each witness, he or she is described as being “the only available source for the information that [AB] is seeking”. The Letter of Request notes that AB has received extensive documentary discovery from the Federal Reserve, which together with AB’s own knowledge of the facts underlying the case indicate that each witness has knowledge of facts that bear on issues in the case, including the operation of the CRP. The requested evidence is said to be relevant to the resolution of the proceedings, AB’s defences, and the level of sanction (if any) imposed on AB.

38.  One paragraph of the Letter of Request, §26 in Section I, states:

The testimony requested hearing will be [AB’s] only opportunity to gather critical testimony from the Witnesses to support his defenses. The testimonial evidence sought from the Witnesses will be used at the hearing – which is akin to a traditional trial. This Court will take the Witnesses’ testimony as part of the record in its evaluation of the merits of the Federal Reserve action and [AB’s] defenses.

39.  The Letter of Request permits each witness to have legal counsel present at the examination and to be allowed to take legal advice on matters of privilege both under the laws of the United States and Hong Kong. Section Q of the Letter of Request deals specifically with privilege or duty to refuse to give evidence under the laws of the State of origin, as well as the laws and procedural rules of Hong Kong. It also seems that representatives of the Firm will be allowed to be present so as to protect the Firm’s own claims to any relevant privilege.

40.  Appendix 2 to the Letter of Request sets out the ‘Subject Matter of Examination’ as follows:

The examinations will address topics including the anti-bribery and other policies in place at the Firm and the policies related to the CRP during the relevant period (about 2005 to 2013), the operation in practice during the relevant period of those policies and the CRP, [AB’s] compliance during the relevant period with those policies and the rules, and [A’s] involvement with and use of the CRP during the relevant period, including without limitation:

1. History of the CRP within [the Firm] during the relevant period;

2. Purpose of the CRP at inception and during the relevant period;

3. Changes, and the reasons for the changes, to the CRP during the relevant period;

4. Administration of the CRP within the Firm during the relevant period;

5. Candidate approval process for the CRP during the relevant period;

6. The L&C Department’s involvement in the CRP during the relevant period;

7. The firm’s anti-corruption and hiring policies and procedures during the relevant period;

8. CRP candidates named in the Federal Reserve’s Notice of Intent and the bases on which they were offered employment;

9. Interactions between Firm bankers and referring clients regarding the CRP during the relevant period;

10. Interactions between the witness and [AB] in relation to the approval of hires by the Firm during the relevant period;

11. Operation of CRPs in other offices of the Firm during the relevant period.

41.  The Letter of Request is signed next to the description ‘Signature of the Requesting Authority’, by the ALJ, described as such and at the address of OFIA. The ‘Seal of the Requesting Authority’ placed beneath the signature is the seal or chop of the OFIA.

D.  The Authority and Powers of the ALJ and the Board

42.  The authority and powers of the ALJ and the Board are to be found in the CFR within ‘Title 12 Banks and Banking ˃ Chapter II – Federal Reserve System ˃ Subchapter A – Board of Governors of the Federal Reserve System ˃ Part 263 – Rules of Practice for Hearings ˃ Subpart A – Uniform Rules of Practice and Procedure’. The citation of each rule or section – or similar rules in other codes – follows the form ‘12 CFR 263.1’.

43.  The material parts of the rules seem to me to be as follows:

§263.1 Scope.

This subpart prescribes Uniform Rules of practice and procedure applicable to adjudicatory proceedings required to be conducted on the record after opportunity for hearing under the following statutory provisions:

…

(b) Removal and prohibition proceedings under section 8(e) of the FDIA (12 U.S.C. 1818(e));

…

(e) Assessment of civil money penalties by the Board against institutions, institution-affiliated parties, and certain other persons for which the Board is the appropriate agency for any violation of:

…

(10) The terms of any final or temporary order issued under section 8 of the FDIA or of any written agreement executed by the Board, the terms of any conditions imposed in writing by the Board in connection with the grant of an application or request, and certain unsafe or unsound practices or breaches of fiduciary duty or law or regulation pursuant to 12 U.S.C. 1818(i)(2);

§263.3 Definitions.

For purposes of this subpart, unless explicitly stated to the contrary:

(a) Administrative law judge means one who presides at an administrative hearing under authority set forth at 5 U.S.C. 556.

(b) Adjudicatory proceeding means a proceeding conducted pursuant to these rules and leading to the formulation of a final order other than a regulation.

(c) Decisional employee means any member of the Board’s or administrative law judge’s staff who has not engaged in an investigative or prosecutorial role in a proceeding and who may assist the Agency or the administrative law judge, respectively, in preparing orders, recommended decisions, decisions, and other documents under the Uniform Rules.

(d) Enforcement Counsel means any individual who files a notice of appearance as counsel on behalf of the Board in an adjudicatory proceeding.

(e) Final order means an order issued by the Board with or without the consent of the affected institution or the institution-affiliated party, that has become final, without regard to the pendency of any petition for reconsideration or review.

...

(i) OFIA means the Office of Financial Institution Adjudication, the executive body charged with overseeing the administration of administrative enforcement proceedings for the Board, the Office of Comptroller of the Currency (the OCC), the Federal Deposit Insurance Corporation (the FDIC), and the National Credit Union Administration (the NCUA).

(j) Party means the Board and any person named as a party in any notice.

...

(l) Respondent means any party other than the Board.

…

§263.4 Authority of the Board.

The Board may, at any time during the pendency of a proceeding, perform, direct the performance of, or waive performance of, any act which could be done or ordered by the administrative law judge.

§263.5 Authority of the administrative law judge.

(a) General rule. All proceedings governed by this part shall be conducted in accordance with the provisions of chapter 5 of title 5 of the United States Code. The administrative law judge shall have all powers necessary to conduct a proceeding in a fair and impartial manner and to avoid unnecessary delay.

(b) Powers. The administrative law judge shall have all powers necessary to conduct the proceeding in accordance with paragraph (a) of this section, including the following powers:

(1) To administer oaths and affirmations;

(2) To issue subpoenas, subpoenas duces tecum, and protective orders, as authorized by this part, and to quash or modify any such subpoenas and orders;

(3) To receive relevant evidence and to rule upon the admission of evidence and offers of proof;

(4) To take or cause depositions to be taken as authorized by this subpart;

(5) To regulate the course of the hearing and the conduct of the parties and their counsel;

(6) To hold scheduling and/or pre-hearing conferences as set forth in §263.31;

(7) To consider and rule upon all procedural and other motions appropriate in an adjudicatory proceeding, provided that only the Board shall have the power to grant any motion to dismiss the proceeding or to decide any other motion that results in a final determination of the merits of the proceedings;

(8) To prepare and present to the Board a recommended decision as provided herein;

(9) To recuse himself or herself by motion made by a part or on his or her own motion;

(10) To establish time, place and manner limitations on the attendance of the public and the media for any public hearing; and

(11) To do all other things necessary and appropriate to discharge the duties of a presiding officer.

§263.38 Recommended decision and filing of record.

(a) Filing of recommended decision and record. Within 45 days after expiration of the time allowed for filing reply briefs under §263.37(b). the administrative law judge shall file with and certify to the Board, for decision, the record of the proceeding. The record must include the administrative law judge’s recommended decision, recommended findings of fact, recommended conclusions of law, and proposed order; all prehearing and hearing transcripts, exhibits, and ruling; and the motions, briefs, memoranda, and other supporting papers filed in connection with the hearing. The administrative law judge shall serve upon each party the recommended decision, findings, conclusions, and proposed order.

(b) Filing of index. At the same time the administrative law judge files with and certifies to the Board for final determination the record of the proceeding, the administrative law judge shall furnish to the Board a certified index of the entire record of the proceeding. The certified index shall include, at a minimum, an entry for each paper, document or motion filed with the administrative law judge in the proceeding, the date of the filing, and the identity of the filer. The certified index shall also include an exhibit index containing, at a minimum, an entry consisting of inhibit number and title or description for: Each exhibit introduced and admitted into evidence at the hearing; each exhibit introduced but not admitted into evidence at the hearing; each exhibit introduced and admitted into evidence after the completion of the hearing, and each exhibit introduced but not admitted into evidence after the completion of the hearing.

§263.39 Exceptions to recommended decision.

(a) Filing exceptions. Within 39 days after service of the recommended decision, findings, conclusions, and proposed order under §263.38, a party may file with the Board written exceptions to the administrative law judge’s recommended decision, findings, conclusions or proposed order, to the admission or exclusion of evidence, or to the failure of the administrative law judge to make a ruling proposed by a party. A supporting brief may be filed at the time the exceptions are filed, either as part of the same document or in a separate document.

(b) Effect of failure to file or raise exceptions.

(1) Failure of a party to file exceptions to those matters specified in paragraph (a) of this section within the time prescribed is deemed a waiver of objection thereto.

(2) No exception need be considered by the Board if the party taking exception had an opportunity to raise the same objection, issue, or argument before the administrative law judge and failed to do so.

(c) Contents.

(1) All exceptions and briefs in support of such exceptions must be confined to the particular matters in, or omissions from, the administrative law judge’s recommendations to which that party takes exception.

(2) All exceptions and briefs in support of exceptions must set forth page or paragraph references to the specific parts of the administrative law judge’s recommendations to which exception is taken, the page or paragraph references to those portions of the record relied upon to support each exception, and the legal authority relied upon to support each exception.

§263.40 Review by the Board.

(a) Notice of submission to the Board. When the Board determines that the record in the proceeding is complete, the Board shall serve notice upon the parties that the proceeding has been submitted to the Board for final decision.

(b) Oral argument before the Board. Upon the initiative of the Board or on the written request of any party filed with the Board within the time for filing exceptions, the Board may order and hear oral argument on the recommended findings, conclusions, decision, and order of the administrative law judge. A written request by a party must show good cause for oral argument and state reasons why arguments cannot be presented adequately in writing. A denial of a request for oral argument may be set forth in the Board’s final decision. Oral argument before the Board must be on the record.

(c) Agency final decision.

(1) Decisional employees may advise and assist the Board in the consideration and disposition of the case. The final decision of the Board will be based upon review of the entire record of the proceeding, except that the Board may limit the issues to be reviewed to those findings and conclusions to which opposing arguments or exceptions have been filed by the parties.

(2) The Board shall render a final decision within 90 days after notification of the parties that the case has been submitted for final decision, or 90 days after oral argument, whichever is later, unless the Board orders that the action or any aspect thereof be remanded to the administrative law judge for further proceedings. Copies of the final decision and order of the Board shall be served upon each party to the proceeding, upon other persons required by statute, and, if directed by the Board or required by statute, upon any appropriate state or Federal supervisory authority.

§263.62 Relevant considerations for assessment of civil penalty.

In determining the amount of the penalty to be assessed, the Board shall take into account the appropriateness of the penalty with respect to the final resources and good faith of the person charged, the gravity of the misconduct, the history of previous misconduct, the economic benefit derived by the person from the misconduct, and such other matters as justice may require.

44.  Hence, the relevant provisions identify:

(1)  the application of the uniform rules of practice and procedure to certain adjudicatory proceedings – including those in the form of the US Proceedings,

(2)  adjudicatory proceedings are those which will lead to the formulation of a final order other than a regulation;

(3)  a final order is an order issued by the Board that has become final (without regard to the pendency of any petition for reconsideration or review);

(4)  the OFIA is an executive body charged with overseeing the administration of administrative enforcement proceedings for the Board;

(5)  the Board may, at any time, perform or direct the performance of or waive performance of any act which could be done or ordered by the ALJ – which, in simple terms, means that the Board may at its discretion take over or direct any aspect of the adjudicatory process;

(6)  the ALJ shall have all powers necessary to conduct a proceeding in a fair and impartial manner;

(7)  those powers as described include powers which might, in my view, typically be regarded as “judicial”;

(8)  the product of the ALJ’s process is a certified record of the proceeding and the making of recommendations as to (a) the decision, (b) findings of fact, (c) conclusions of law and (d) the proposed order;

(9)  parties may file with the Board written exceptions to all or any of the ALJ’s recommendations;

(10)  once the Board determines the record in the proceedings is complete, the Board will consider the final decision;

(11)  the Board may order and hear oral argument on the recommendations of the ALJ, and any oral argument before the Board must be on the record;

(12)  it is the Board which renders a final decision;

(13)  the final decision of the Board will be based upon its review of the entire record of the proceeding, except that the Board may limit the issues to be reviewed to those findings and conclusions to which opposing arguments or exceptions have been filed;

(14)  it is the Board which determines the amount of any civil penalty to be assessed;

(15)  in reaching its final decision and its determination of any penalty, the Board is plainly not bound by any recommendation made by the ALJ;

(16)  indeed, the recommendations made by the ALJ are not binding even on the parties, as they may take written exceptions to the recommendations, which exceptions will be considered by the Board when it reaches its final decision.

45.  Elsewhere – at 12 USCS 1813, part of the United States Code Service, Title 12 Banks and Banking – can be found the definition of “institution-affiliated party”. It means, amongst other things, “any director, officer, employee or controlling stockholder (other than a bank holding company or savings and loan holding company) of, or agent for, and insured depository institution”. As I understand it, it is common ground that not only AB, but also X, Y and Z, fall within that definition.

E.  Hong Kong Criminal Proceedings

46.  Also relevant background, at least in the context of the allegations of material non-disclosure, is that there have been criminal proceedings brought in the District Court of Hong Kong [redacted] arising from the operation of the CRP. The defendant was CD, who faced two charges of offering an advantage to an agent in violation of section 9(2)(b) of the Prevention of Bribery Ordinance Cap 201. CD was acquitted on both charges, for reasons identified in the Reasons for Verdict [redacted], given by the Deputy Judge.

47.  The prosecution called six witnesses, including: EF, former Junior Staff Manager of the Firm (as PW1); Z (as PW2), Y (as PW3); and GH, [redacted] of L&C (as PW4). The Department of Justice had given a letter of immunity to four of the six prosecution witnesses, including EF, Y and GH, but not Z.

48.  Amongst other matters, the Reasons rehearsed that:

(1)  Z joined the Firm in 2007 and was a JRM assistant at the relevant time. She was secretary to EF and her direct supervisor was EF;

(2)  Y joined the Firm in 2005 and was promoted to be Assistant Deputy General Manager of L&C in 2010. Her direct supervisor was GH at the relevant time. In regard to the application process of the CRP [redacted], normally Z of JRM would submit the candidate’s CV and questionnaire to Y, which Y would then pass to her direct superior for approval. Normally, her direct supervisor would email the approval results to Y, which Y would pass to Z primarily by email;

(3)  in regard to the applications under the CRP, the normal procedure was that the questionnaire would be submitted to Y for her review and examination. After Y asked for any missing information, GH would normally decide whether to grant approval or not. Then he would give instructions to Y either by email or verbally.

49.  The Reasons also identified how the prosecution sought to deviate from the basis of prosecution, when in closing submissions the prosecution sought to contend that CD was involved in a joint enterprise with other colleagues working at the Firm (including the prosecution witnesses). However, the prosecution never pointed out the charge of joint enterprise to EF, Z, Y and GH when they gave their testimony, and the defence never had the opportunity to cross-examine any of the prosecution witnesses on this new prosecution basis of joint enterprise. Therefore, the Deputy Judge refused to consider the new basis of prosecution. However, she went on to state that, as a matter of fact, she did not find any evidence of the defendant being involved in a joint enterprise with other prosecution witnesses (other than PW5) or with other colleagues at the Firm in committing the offences with which she was charged. The Deputy Judge expressed the belief that the prosecution changed its position at the final stage of the case only because it noticed that the testimonies and witness statements of the prosecution witnesses, as well as a large number of emails, supported or agreed with CD’s conduct as disclosed in the emails.

50.  Separately, it can also be noted that AB was apparently arrested by the Independent Commission Against Corruption in Hong Kong, in connection with the Firm’s hiring practices.

F.  “Court or Tribunal”

F.1  The Correct Approach

51.  Under the EO, Hong Kong Courts have jurisdiction to give effect to a letter of request only where it is issued by a body that is a “court or tribunal” under both the law of the requesting State and as a matter of Hong Kong law. This was made clear by Barnett J in Re Troielli [1995] 2 HKC 785 at 793H-794A:

The tail cannot, of course, be allowed to wag the dog. That the requesting party considers that it falls within the definition of court or tribunal cannot confer jurisdiction on a Hong Kong court if the requesting party is not a court within the meaning of s 75 according to Hong Kong law.

I am unable to accept Mr Ma’s submission [namely, that ‘court or tribunal’ should be interpreted as ‘the judiciary or judicial authorities’ and that the Italian law magistrates performing the function of a public prosecutor come under the judicial umbrella]. In my judgment, Pt VIII of the Ordinance plainly contemplates the situation where an organ of the foreign judicial authority is seized of and in control of proceedings in which it will ultimately determine the rights between the parties to those proceedings or the guilt of an accused person. That, I think, is demonstrated by the nature and extent of orders that may be made under s 76. Further, all the leading authorities such as Norway and Rio Tinto Zinc Corp & Ors v Westinghouse Electric Corp [1978] AC 547 are clear that fishing or mere investigation is not permissible. It is therefore difficult to see how a purely investigatory authority can be a court.

52.  In this case, the Letter of Request was issued by the ALJ on behalf of the Board. Therefore, Mr Parker submits that it must be demonstrated that the Board – and not the ALJ – is a “court or tribunal” under both US and Hong Kong law.

53.  I agree with Mr Parker that the Board is the correct body whose status is in question. As he identifies: (1) the Notice of Intent (“NOI”) identifies that the US Proceedings are “before the Board” and are brought because “the Board” has opinion or reasonable cause to believe that A committed the charges alleged; (2) it is only the Board which makes the final decision and determines the penalty, if any, to be applied; (3) the Board has full authority over the US Proceedings, including the ability to perform or waive performance of things the ALJ may do; and (4) the Letter of Request states that it was issued by the ALJ “on behalf of the Board” and is headed with the title of proceedings before the Board.

54.  There is some dispute in the present case as to the extent of deference that must be given to the requesting court. Mr Zimmern places reliance on the passage from Westinghouse at 654, quoted in Troielli at 796F, that the court of request should not be astute to examine the issues in the action and the circumstances of the case with excessive particularity for the purpose of determining in advance whether the evidence of that person will be relevant and admissible. Barnett J went at 796G-797A on to say:

In my judgment, that principle should apply to the overall approach by this Court to a letter of request. This court in the interests of international comity should strive to give effect to a letter of request if at all possible. The letter should stand or fall on its own. The function of the Crown Solicitor is little more than that of a conduit for placing the letter before this Court although plainly he will help, as in this case, to ensure there is no glaring omission or error in the letter. If objection is subsequently taken to the letter or order made on it, it is in my view permissible to look at any material then provided to see whether jurisdiction exists. Even if there was initial non-disclosure (which in my view there was not in this case) it remains a matter of discretion whether to set aside the order or not. Provided any non-disclosure was not deliberate and the matter undisclosed was not seriously prejudicial, the usual approach should be to exercise discretion in favour of the requesting court.

55.  Mr Zimmern also refers to Prediwave Corp v New World TMT Ltd [2007] 4 HKC 207 at §39, where it was said that although what is stated in the letter of request is not conclusive, save in the clearest cases the court should accept the statements contained in the letter of request that the evidence sought is relevant admissible evidence for the trial of the foreign proceedings.

56.  So, says Mr Zimmern, where the ALJ has expressed the clear view that she considers herself properly to be a “Court” capable of issuing the Letter of Request, the Hong Kong Court should not be astute to examine that position with excessive particularity. However, I agree with Mr Parker that jurisdiction under the EO either exists or it does not. Whether it exists is a question of Hong Kong law, to be determined by the Hong Kong Court. Indeed, in the passages quoted above, Barnett J specifically recognised that if an objection is taken to a letter or order made on it, it is permissible to look at any material to see whether jurisdiction does exist, and the tail cannot wag the dog.

F.2  US Law

57.  It may be that greater deference would be given to the foreign court as regards its own perception of its status as a matter of the foreign law.

58.  But, as it happens in this case, the ALJ’s description of herself as “this Court” is acknowledged to be legally incorrect by both experts on US law who have filed expert opinion evidence in this case. Nor does it matter that she is a “Judge”. The experts agree that neither the ALJ nor the Board is a “court” as a matter of US law. Under US law, the Board is not a court, nor part of the judicial arm created by and under the United States Constitution. Rather, it is a statutory, administrative body answerable to Congress.

59.  Mr Robinson identifies that the Board is a banking agency, and the central governing body of the Federal Reserve System, which itself has various roles in establishing and implementing US monetary policy, as well as responsibility for the US banking system. When setting monetary policy, the Board can and does take social and economic factors into consideration. The Board also has the statutory authority to initiate and pursue administrative actions, and to assess civil monetary penalties against entities and individuals subject to its jurisdiction. For that purpose, the Board has and exercises investigatory powers, and has adopted the regulations that outline the authority of the ALJ as regards the conduct of adjudicatory hearings. The ALJ makes recommendations. It can be said that the Board both prosecutes and adjudicates upon proceedings including the US Proceedings. Far from being independent of the parties, the Board is one of the parties in the US Proceedings.

60.  Mr Yeadon also accepts that administrative proceedings, of the sort conducted by the Board, “are distinct from judicial proceedings under US law”.

61.  The relevant focus for present purposes is, therefore, whether the Board is a “tribunal”.

62.  As to that, Mr Robinson expresses the opinion in his first report that the US does not have distinctive legal tribunals outside the context of military courts, and that under US law there is little relevant difference between a “court” and a “tribunal”. Mr Zimmern seeks to emphasise that the idea that the only legal tribunal under US law is a military court is contrary to an inductive reasoning based on Mr Robinson’s own opinion expressed in his first report, which included statements that: (1) the ALJ hears the evidence presented in the case conducted in a fair and impartial manner, being a manner similar to formal court proceedings, and thereafter renders a recommendation to the Board; (2) the Board is an independent regulatory authority that operates under a statutory framework to help ensure that the Board makes decisions based on available evidence and analysis, without taking politics into consideration; and (3) the Board makes a final order, which is subject to appeal to the US Federal Court of Appeals. Whilst I acknowledge those points, I am not sure they necessarily lead to the conclusion that the ALJ or the Board constitute a “tribunal”.

63.  On the other hand – and apparently not placing any reliance on what was said by Mr Robinson in his first report – whilst agreeing that there is no authoritative legal definition of what a “tribunal” is under US law, Mr Yeadon opines that the ALJ was competent to issue the Letter of Request under 28 USC 1781(a)(2), as a “tribunal” within the meaning of that section. Though not referenced in the Letter of Request itself, that was the section under which A apparently made the application for the issue of the Letter of Request. Though the term “tribunal” is undefined in that section, Mr Yeadon opines that its meaning can be discerned from the cases on a different section, 28 USC 1782(a), which empowers US courts to give effect to letters rogatory issued by foreign tribunals. Hence, his conclusion that the ALJ on behalf of the Board qualifies as a “tribunal” under US law.

64.  His reasoning is as follows:

(1)  Section 1782 works in tandem with section 1781. Therefore, US Supreme Court guidance in the context of section 1782 is useful to analyse whether the ALJ is a tribunal under US law. This is because identical words or phrases used in different parts of the same statute are presumed to have the same meanings.

(2)  In Intel Corp v Advanced Micro Devices, Inc 542 US 241, 246 (2004), the Supreme Court held that the Directorate-General of Competition for the Commission of the European Communities (“DGC”) was a tribunal within the meaning of section 1782(a). That body is the EU’s primary anti-trust enforcer, and it accepts complaints and conducts preliminary investigations. The DGC’s decisions are subject to review in the Court of first instance and the European Court of Justice. Evidence collected by the DGC is presented to the two reviewing courts in the form of record created as part of its administrative proceeding.

(3)  The Supreme Court reasoned that the DGC was a tribunal when it acted as a first-instance decision maker in a “proceeding that leads to a dispositive ruling, i.e. a final administrative action both responsive to the complaint and reviewable in court”.

(4)  The Supreme Court observed that the replacement in 1964 of the term “judicial proceeding” in section 1782 with the phrase “a proceeding in a foreign or international tribunal” shifted the terminology to reflect the intent of Congress to provide the possibility of US judicial assistance in connection with administrative and quasi-judicial proceedings abroad.

(5)  The ALJ is similarly a first-instance decision maker that issues a decision responsive to a petitioner complaint that is reviewable by the Board. The ALJ hears disputes, weighs evidence, and issues rulings that will finally bind the parties in accordance with the Board’s rules and regulations. When examined under the same functional lens as was used by the Supreme Court to examine the DGC in Intel, the ALJ must necessarily be considered a tribunal under section 1781.

(6)  The ALJ’s powers enable the ALJ to receive evidence and render a recommended decision in the public proceeding that leads to a dispositive ruling reviewable in court. Because the ALJ acting on behalf of the Board is a “first-instance decision maker” as contemplated by the US Supreme Court in Intel, the ALJ qualifies as a tribunal.

(7)  The ALJ also falls within the common usage and widely accepted dictionary definitions of tribunal.

65.  As can be seen, Mr Yeadon’s focus is on whether the ALJ on behalf of the Board is a tribunal – as that is the question he was asked to answer. So, where I have accepted the correct focus should be on the Board itself, I tend to agree with Mr Parker’s submission that Mr Yeadon has not opined on the correct question, namely whether the Board is a tribunal. But, in any event, I am not sure Mr Yeadon’s reasoning works, for various reasons.

66.  Perhaps most obviously, I do not think the ALJ can properly be described as a “first-instance decision maker”. Save perhaps as regards procedural decisions (and even those are subject to interference by the Board), or in the sense that the ALJ decides what to recommend, the ALJ makes no actual “decision”; the ALJ makes recommendations as to someone else’s, the Board’s, possible decision. No one is bound by those recommendations, not even the parties to the adjudicatory process which leads to them (because they can take exception to them as part of the continuing decision-making process before the Board), and certainly not the Board as the maker of the final decision.

67.  I also accept the opinion expressed by Mr Robinson in his second report that Mr Yeadon’s offered analysis faces difficulties from its inception, where it is accepted by Mr Yeadon that proceedings before the Board are not “judicial”. In the context of the Convention, and so under section 75 of the EO, it is the quality of acting “judicially” that is important.

68.  Further, as Mr Robinson explains, section 1781(a) refers to “tribunals, offices and agencies” which may execute letters of credit, whereas section 1781(b) refers only to “tribunals” which may issue them. The two functions are different, so that it does not lead to an assumption that the references to “tribunal” are to be treated as synonymous. Further, section 1782 authorises US courts to provide assistance to persons within their jurisdiction by ordering the provision of testimony, statements, documents or things for use in proceedings “in foreign or international tribunals”. What constitutes a foreign “tribunal” in this context does not seem to me to inform what might constitute a US “tribunal”, let alone one which may issue letters of request.

69.  I also note that Mr Robinson identifies that the drafting change made in 1964, putting in place the textual provisions interpreted in Intel, was explained at the time as being to improve “judicial” procedures in the US, and the explanation does not make reference to expanding the scope of domestic tribunals which could issue letters, nor make reference to administrative agencies.

70.  At bottom, it seems to me that the Board is an administrative banking agency, and what might be seen as the bifurcated process – going through the adjudicatory process leading to the ALJ’s recommendations and ultimately a final decision by the Board – is simply the procedure adopted for effecting enforcement with the administrative and regulatory requirements, being an important part of the Board’s overall mandate.

71.  In my view, neither the ALJ on behalf of the Board nor the Board is a “court or tribunal” under US law.

F.3  Hong Kong Law

72.  Mr Parker advances two propositions as to what are the attributes that make a “court or tribunal” “judicial” under Hong Kong law. He says: (1) first, a judicial body exercises the judicial and not administrative power of the State; and (2) second, a court or tribunal must be independent and impartial.

73.  As to the first proposition, Mr Parker points to the fact that it has been held at common law, and under the Basic Law, that a “court” for the purposes of the law of contempt is a tribunal which exercises judicial but not administrative power of the State: see The Stock Exchange of Hong Kong Ltd v New World Development (2006) 9 HKCFAR 234 at §76. In that case, references were made to other cases involving consideration of other bodies which were held not to be courts, because they discharged or performed administrative functions, even if they were supposed to act judicially.

74.  As to the second proposition, Mr Parker places reliance on the decision of G Lam J (as he then was) in Television Broadcasts Ltd v Communications Authority [2016] 2 HKLRD 41 (“TVB”). In addressing the question as to whether the Authority is an independent and impartial tribunal within the context of Article 10 of the Hong Kong of Rights (“BOR 10”), it was stated at §100 that:

Independence in this context connotes independence of both the executive and the parties … Impartiality requires not only that the tribunal be free of subjective prejudice or bias, but also that it be impartial from an objective viewpoint … While independence and impartiality import different concepts, the two are closely linked …

75.  In passing, I note that in §104 G Lam J referred with apparent approval to the description of a tribunal in Van de Hurk v Netherlands (A/288) (1994) 18 EHRR 481 at §45 that:

… the power to give a binding decision which may not be altered by a non-judicial authority to the detriment of an individual party is inherent in the very notion of a ‘tribunal’, as is confirmed by the word ‘determination’ … This power can be seen as a component of the independence required by Article 6(1).

76.  The ALJ does not fit within such a description.

77.  From §§105-118, G Lam J considered whether the Authority is not independent and impartial because it is a policy-making body with an advisory role and numerous statutory functions other than that of investigating and determining allegations of breach of the competition proceedings. Ultimately, he concluded that it was not an independent and impartial tribunal for the purpose of adjudicating alleged infringements of the copyright provisions under the (then, but since repealed) Broadcasting Ordinance, because of the additional range of policy functions which would cause a fair-minded observer to question whether the Authority was capable of excluding policy considerations when deciding on allegations of anti-competitive conduct.

78.  Mr Parker submits that a body is unlikely to have the relevant “judicial” attributes where it sits in its own cause, or where it concurrently exercises, alongside its adjudicative role, policy functions that could cause an objective observer to question its ability to adjudicate free from any considerations other than the merits of the case before it. So, Mr Parker submits, the Board is neither (a) independent, because it is not independent of the investigator and prosecutor or of the parties before it, and is a judge on its own cause, nor (b) impartial in the objective sense, because of the other powers exercised concurrently.

79.  Mr Zimmern first submits that it is wrong to impose “judicial” into section 75(a) when the relevant phrase under consideration is “court or tribunal”. But I have already identified that those words need to be seen in the intended context of the Convention, where the plain focus is on “judicial” authorities and mutual “judicial” cooperation.

80.  Mr Zimmern secondly submits that reliance on the TVB case is misplaced. This is because BOR 10 is not here engaged; to the contrary, A is seeking through the Letter of Request assistance from the Hong Kong Court to protect his rights in the US Proceedings. Further, even if independence and impartiality under Article 10 are fundamental to the definition of “court or tribunal” outside of Hong Kong, Mr Zimmern submits that a far too simplistic application of the facts and the law has been taken. The relevant test is that of apparent bias, namely whether a fair-minded and informed observer, with knowledge of the relevant facts, would conclude that there was a reasonable apprehension of bias (partiality), and the question of independence and impartiality is not a dogmatic one to be answered on a theoretical basis. Mr Zimmern submits that the application of the test to the facts identifies that the ALJ on behalf of the Board is an independent and impartial tribunal.

81.  I do not think there can be any real dispute that independence and impartiality are fundamental requirements of judicial process. I do not think this turns on whether the case falls within the application of BOR 10 or not. Therefore, decision-making bodies which do not display independence and impartiality are unlikely to be considered to be a “judicial” authority.

82.  However, I do not think the fact that the Board (or the Federal Reserve) has other wider obligations and powers, including policy-setting, would lead to the conclusion that the Board is not independent and impartial. Indeed, what I have referred to as the bifurcated process, which to an extent ‘outsources’ the investigatory and enforcement process to the ALJ/OFIA – defined as the executive body charged with overseeing the administration of administrative enforcement proceedings for the Board–might be seen as an attempt to create greater separation and independence from the other aspects of the Board’s activities. These are essentially the points made by Mr Robinson, on which Mr Zimmern has placed reliance.

83.  But, what seems to me to be more problematic is the fact that the Board is both the decision-maker and a party to the proceedings leading to its own decision. This is compounded by the fact that the Board can override the process which is otherwise ‘outsourced’ to the ALJ/OFIA.

84.  On balance, it seems to me that the Board does not have sufficient “judicial” qualities as would constitute it a “court or tribunal” for the purposes of the EO.

85.  Thus I conclude that the ALJ and the Board is/are not a “court or tribunal” under either US or Hong Kong law. Therefore, I accept Mr Parker’s submission that, that being so, the Master lacked the jurisdiction under section 75(a) to make the Order, so that it falls to be set aside.

86.  Whilst that would be dispositive of the Set Aside Applications, I shall of course go on to consider the other aspects.

G.  “Civil Proceedings”

G.1  The Correct Approach

87.  Section 74 defines “civil proceedings” as meaning “proceedings in any civil or commercial matter”. The words “civil or commercial matter” are drawn directly from Article 1 of the Convention (see above).

88.  The proper construction of that phrase has been considered in previous cases. In the Westinghouse case, at 633E-H, Lord Diplock stated, when considering the equivalent section in the English legislation):

I would not be inclined to place any narrow interpretation on the phrase “evidence … to be obtained for the purposes of civil proceedings”. The Act applies to civil proceedings pending or contemplated in courts and tribunals of all countries in the world. It is not confined to countries that are parties to the Hague Convention … Nor is it limited to courts of law. It extends to tribunal’s. These courts and tribunals make use of a wide variety of different systems of procedure and rules of evidence in civil matters … In my view, “civil proceedings” includes all the procedural steps taken in the course of the proceedings … if the procedural system of the requesting court provides for the examination of witnesses … for the purpose of enabling a party to ascertain whether there exists admissible evidence to support his own case or to contradict that of his opponent, the High Court has jurisdiction to make an order under the Act.

89.  In In re Norway’s Application (Nos 1 & 2) [1990] 1 AC 723, the question arose as to whether proceedings in a Norwegian city court relating to a matter of tax assessment were “civil proceedings”. In his consideration, Lord Goff emphasised the purpose of Act as being to give effect to the Convention and to codify into one statute powers previously found in various sources. On that basis, Lord Goff thought it apt to referred to pre-convention legislation. However, he came to the conclusion, at 803H, that the words “civil or commercial matters” in the Act cannot be construed with reference to any internationally acceptable meaning. Accordingly, by reference to three alternative ways in which the question as to how those words should be construed, Lord Goff held that it was necessary to consider the question by reference to both systems of law in the foreign/requesting and domestic/requested jurisdictions. As he put it, at 804B, jurisdiction would only be established if the relevant proceedings were proceedings in a civil or commercial matter under the laws of both countries.

90.  As to the question to be posed in respect of the requesting court, Lord Goff held, at 805B, that the question was a matter for the law and practice of the requesting state, having regard to the manner in which classification is ordinarily made in that country. But as to English law, Lord Goff expressed, at 806F, no doubt that the words in the section should be given their ordinary meaning, so that proceedings in any civil matter should include all proceedings other than criminal proceedings, and proceedings in any commercial matter should be treated as falling within proceedings in civil matters.

91.  Therefore, for present purposes, and leaving aside other points, if the Order is to be maintained the US Proceedings must be shown to be within the meaning of “civil proceedings” – that is, “proceedings in any civil or commercial matter” – in both US law and Hong Kong law.

92.  Further, there is of course a connection between the issues as to (1) whether the requesting body is a “court or tribunal” and (2) whether the relevant proceedings are “civil proceedings”. In fact, the second point is secondary to the first. If the requesting body is not a “court or tribunal” for the purposes of section 75, the secondary question simply falls away. It is only if the requesting body is regarded as a “court or tribunal” that it is necessary to consider whether the proceedings conducted in that “court or tribunal” are “civil proceedings”. But it might also be thought that if there is difficulty in identifying the relevant body as conducting “civil proceedings”, label typically given to one aspect of “judicial” activity, that may reflect that the body is not acting “judicially”, so not a “court or tribunal”.

G.2  US Law

93.  Though it may not ultimately matter in which order the two systems of law are considered, and I note that Mr Parker chose to deal first with Hong Kong law in this context, it seems to me the logical starting point is to look at the position under US law.

94.  One point to note, and to which it is necessary to give due deference, is the statement made by the ALJ in the Letter of Request itself that the US Proceedings are “a civil proceeding”. But I also have the benefit of the expert opinion evidence.

95.  In this aspect, I am not sure that either expert has been asked to address precisely the correct question. The correct question is simply whether the US Proceedings are “civil proceedings”, meaning proceedings in any civil or commercial matter. Mr Robinson addresses the question: Are the US Proceedings classified as “criminal” or “civil”, “quasi-criminal” or some other type, under US law? Mr Yeadon addresses the question: Are proceedings before an ALJ on behalf of the Board civil or criminal proceedings?

96.  In answering those two questions, it seems that the experts agree that the US Proceedings are “administrative” in nature:

(1)  In his first report, Mr Robinson says that the US Proceedings are “administrative” in nature. He refers to Administrative Procedure Act (“APA”) and the practice and procedure governing the proceedings and adopted by the Board, and says that the proceedings “are somewhat similar to a civil proceeding under US law”. But he points out that, whilst evidence that is admissible under the US Federal Rules of Evidence is admissible in the US Proceedings, evidence that would be inadmissible under those rules may not be ruled to be inadmissible in the US Proceedings if such evidence is relevant, material, reliable, and not unduly repetitive: see 12 CFR 263.36(a)(3).

(2)  Mr Yeadon says that proceedings before the ALJ are administrative proceedings conducted under the authority of the Board and the APA, and “similar to civil proceedings in a US federal district court”. He says the “ALJ proceedings are not criminal”. Nevertheless, as a threshold matter, Mr Yeadon goes on to say that administrative proceedings are distinct from judicial proceedings under US law. He makes the point that federal judicial proceedings may be civil or criminal. He says “[a]dministrative proceedings share some of the same characteristics of civil proceedings, but are different than criminal proceedings”. He points to the differing standards of proof between civil and administrative cases on the one hand and criminal proceedings on the other, and also identifies different evidentiary standards, with the less stringent being in administrative proceedings, as opposed to civil or criminal proceedings. Mr Yeadon further refers to the nature of the charges and sanctions sought against A to show that the administrative proceeding is a civil matter and is not criminal. The sanctions sought include a prohibition from any participation in the affairs of any banking institution and the imposition of “a civil penalty” of US$1 million. By reference to authority, he states that where civil penalties are imposed by an administrative agency like the Board, the administrative proceedings are civil, not criminal.

97.  Mr Parker submits that the question put to Mr Yeadon was faulty, falling into the vice cautioned against by Lord Goff in the Norway case. As I have said, I am not sure the question put to Mr Robinson was sufficiently precise either. But, in any event, Mr Parker submits that on the US classification of the nature of proceedings, the common ground between the experts is that they are neither “civil” nor “criminal”, but “administrative”.

98.  I think this highlights the connection between the two questions as to whether the requesting body is a “court or tribunal” and whether it is conducting “civil proceedings”. In practical terms, the very fact that both US law experts have difficulty in clearly delineating the US Proceedings as being “civil proceedings”, and can only say that they are “administrative proceedings” which are similar to civil proceedings, tends to identify that the body conducting those proceedings is not acting in a “judicial” capacity, and so is not a “court or tribunal”. Strictly, the secondary question simply does not arise.

99.  However, if the question is looked at on its own, I do not think the common ground that the US Proceedings are administrative in nature necessarily precludes a conclusion that they are “proceedings in a civil or commercial matter”. Where both experts agree that the proceedings are “similar to” a civil proceeding under US law, where the sanctions sought are civil sanctions (by nature and by label) as a matter of US law, where the ALJ has described the proceedings in which she sits as “a civil proceeding”, and where any appeal to a court from the Board’s decision would likely be regarded as a “civil appeal”, I do not think that the Hong Kong Court should decline jurisdiction to make the Order only on the basis that the US Proceedings are not “civil proceedings” as a matter of US law.

G.3  Hong Kong Law

100.  As to the position under Hong Kong law, the starting position would seem to be straightforward. In general terms, proceedings which are not criminal proceedings are civil proceedings.

101.  However, Mr Parker has relied upon the Hong Kong law which identifies that whether or not proceedings involve the determination of a criminal charge is a question of substance, not form: see in particular Koon Wing Yee v Insider Dealing Tribunal (2008) 11 HKCFAR 170. In that case, the question was whether the proceedings before the Tribunal involve the determination of a criminal charge under BOR 10 (equality before courts and right to fair and public hearing) and BOR 11 (rights of persons charged with or convicted of criminal offence).

102.  I do not think I need to engage in any detailed analysis of the reasoning in the case because, as Mr Parker himself accepts, on the Koon Wing Yee approach, proceedings may involve the determination of a criminal charge even if the mode of the proceedings is “civil” in nature: see Competition Commission v Nutanix Hong Kong Ltd [2019] 3 HKC 307 at §§50 and 64. Therefore, I do not think the question which was being posed in the Koon Wing Yee case properly or directly addresses the question posed in the current proceedings. Indeed, in one sense, the question arose at all because the relevant proceedings before the Tribunal were clearly not – or at least were not clearly – criminal proceedings, so that it was necessary to consider whether the determination was ultimately that of a criminal charge (irrespective of the mode of proceedings), so triggering the rights under BOR 10 and 11. Therefore, even if the combination of serious and dishonest conduct constituting the wrong, and a potentially severe penalty, are taken to operate powerfully in favour of classification of the charge as criminal, I do not think that is the same thing as saying that the US Proceedings are criminal proceedings.

103.  I therefore reject Mr Parker’s submission that, if the US Proceedings are to be seen (as a matter of Hong Kong law) as involving the determination of a criminal charge in the Koon Wing Yee sense, that must mean that they are not “civil proceedings” under section 75 of the EO. Indeed, echoing a phrase used in Wong Hung Sun v HKSAR [2009] 12 HKCFAR 877 at §72, the character of the US Proceedings – the procedural and surrounding nature of which I have set out at some length above – seems to me to be such that they are properly described as civil proceedings relating to a civil matter, denying them the character of criminal proceedings – even if the charges are such as might under Hong Kong law trigger the rights afforded by BOR 10 and 11.

104.  There is also force in Mr Zimmern’s submission that the Board’s function in the US Proceedings is clearly regulatory and protective, as well as perhaps punitive. The main purpose of the proceedings is to enforce federal banking laws through exercising the powers of the federal regulatory and enforcement authority. What is sought is a civil injunction against participation in banking activity and an expressly defined civil monetary penalty.

105.  My conclusion is that the US Proceedings are “civil proceedings” as a matter of Hong Kong law, for the purposes of section 75.

H.  Material Non-Disclosure

H.1  X’s Allegations of MND

106.  The complaint is that various material facts and matters were not placed before the Master by AB when making his ex parte application, contrary to the duties of good faith, full and frank disclosure, and to present the application fairly. Further, as Mr Parker emphasises, AB has chosen not to give any evidence in response to the allegation (or any evidence at all), so he has neither denied that he was aware of the facts relied on when he made the ex parte application, nor does he dispute their materiality.

107.  The two particular aspects of material non-disclosure alleged by X are (1) the risk of self-incrimination and prosecution, in Hong Kong and/or in the US, and (2) the fact that AB had previously obtained a statement from X for use in the US proceedings, but had agreed to its being withdrawn.

108.  As to the first matter, the Master was not told:

(1)  of the Hong Kong criminal proceedings against CD, and the findings by the Deputy District Court Judge that the CRP was liable to contravene the law and be exploited by criminals, and where the actus reus of the offence was found to be made out;

(2)  the attempt in those proceedings by the prosecution to broaden the charge to one of conspiracy involving “colleagues” at the bank, specifically the prosecution witnesses but also other colleagues (as might include X);

(3)  AB had himself been arrested by the ICAC in Hong Kong, and it may well be – and is likely – that the ICAC interest is not confined to CD and X;

(4)  corruption investigations are generally handled in a manner which is not publicised, and where unauthorised disclosure of such investigations is prohibited, so that it remains unknown whether other persons including X remain under investigation and face potential prosecution;

(5)  the very essence of the evidence sought by AB from X, his direct subordinate, about the CRP could well implicate X in its operation;

(6)  the charges brought against AB by the Board expressly include allegations relating to the failure of AB’s subordinates to follow policies and procedures or otherwise to violate applicable anti-bribery laws;

(7)  the NOI expressly refers to “other bankers” involved in what is said to be the corrupt practices engaged in by AB;

(8)  the US criminal investigations into the CRP, involving the Firm, were resolved by the Firm entering into a non-prosecution agreement that expressly did not cover its employees;

109.  Though it is possible that the Master would have anticipated the point, it was at least not made expressly clear to the Master that the examination would involve questions both by AB’s lawyers and prosecuting lawyers for the Board – the very body as might target other persons in the US – and which examination would also be apparently without the benefit of any prior sight of the 1.2 million documents disclosed in the proceedings.

110.  As to the test of materiality, I have no difficulty in deciding that the question is to be considered by reference to what was or was not disclosed to the Hong Kong Court, namely the Master. Though there may also be criticisms of what was or was not said to the ALJ prior to the issuing of the Letter of Request, it is the allegations of non-disclosure to the Hong Kong Court which are here relevant. It was the Hong Kong Court which was exercising the discretion in whether or not to grant the Order, and if so on what terms.

111.  It seems to me that it was plainly material that the proposed examination of X (and indeed the other respondents, Y and Z) would expose them to potential self-incrimination, not least where criminal investigations had been undertaken and could well be ongoing. As Mr Parker submits, had the Master been expressly made aware of these points, various options would have been open to him, and these points were relevant to the weighing operation as to how to exercise the discretion in response to the ex parte application. The Master might have, for example: (1) refused the application altogether, either because it would be oppressive and/or because it would perhaps give rise to an assertion of privilege against self-incrimination in response to so many of the questions as would render the examination a waste of time and costs; (2) required a list of questions to be prepared, to ensure that they would not be oppressive or obviously incriminatory: see USA v Philip Morris [2004] 1 CLC 811 at §22; (3) required further information or undertakings of the sort which satisfied the court in Philip Morris at §§20 and 58; (4) required AB to seek undertakings from the Secretary for Justice or ICAC in Hong Kong that no prosecution would be brought against X: see Manufacturer’s Life Insurance [2002] 1 HKLRD 828 at §§34-35; (5) required that, in any event, the examination should be conducted by Hong Kong Counsel before and/or by a High Court Judge: see Philip Morris at §58.

112.  Mr Zimmern makes a submission similar to that made by Counsel in the Philip Morris case, and dealt with by Moore-Bick J at first instance, in a passage not criticised in the Court of Appeal. Moore-Bick J said:

Mr MacLean submitted that a blanket objection of this kind is contrary to the terms of section 3 of the 1975 act which, he submitted, contemplates that claims to privilege are to be taken as and when questions are put to the witness. I accept that section 3 naturally contemplates that an order for the examination of the witness will already have been made by the time any question of privilege arises, but I think his submission mistakes the nature of Miss Dohmann’s argument which is that it would be pointless in this case to make an order for the examination of Mr Foyle because he could not be required to answer any question of substance put to him. In most cases the issue of privilege is unlikely to be of such potentially wide significance and so there will rarely be any basis for making a submission of the kind made by Miss Dohmann. Nonetheless, if the court were satisfied on the evidence before it that the exercise would indeed be pointless because the witness could and would refuse to answer any questions of substance put to him, I can see no reason why in the exercise of its discretion it should not refuse to make an order for his examination. No doubt such a course would only be justified in the clearest case.

113.  Mr Parker submits that the present is such a clear case. But, for the purpose of establishing materiality – as distinct from the consequence of a failure to give full and frank material disclosure – Mr Parker does not need to go that far. He merely needs to establish that this was a matter which would be relevant to the weighing operation in the exercise of the discretion. Where the entire thrust of the intended examination relates to the existence and operation of a program which the Board considers to have been inherently corrupt, or at least extensively corruptly used, I think it plainly was material.

114.  I do not think it a sufficient answer to this allegation of material non-disclosure to point to the parts of the Letter of Request and the Order made on it which specifically reference the right to invoke the privilege against self-incrimination. Such a right exists in almost every case, and the reference might almost be regarded as ‘boilerplate’; it does not sufficiently bring to the attention of the Court the specific matters relating to the specific case. That there may be some protections built in to the Letter of Request and the Order does not mean that there was no need to make appropriate full and frank disclosure.

115.  Similarly, the arguments deployed by Mr Zimmern about whether the perceived risk of self-incrimination is real (for example, against the chronology of the events having taken place between 2005 and 2013 without the witnesses being charged for offences or made subject to other enforcement action, and the fact that no serious allegations are made against the witnesses in the NOI), seem to me to be arguments about the weight to be given to the factor, which only tends to show the materiality.

116.  Further, in the absence of any explanation otherwise from AB, and where he plainly had direct knowledge and access to public information, it is difficult to avoid the conclusion which I reach that the non-disclosure was deliberate.

117.  As to the second aspect of alleged material non-disclosure, namely AB’s previous unsuccessful attempt to procure by allegedly improper means a statement from X, I do not think I need to determine whether the attempt was or was not improper. Even on the account provided by AB’s US lawyer, AB had a statement from X and then voluntarily agreed for it to be withdrawn. Mr Parker submits that this was a material matter which ought to have been brought to the attention of the Master, as the Master might have thought that AB had had his ‘bite at the cherry’ and should not have another ‘bite’, so as to vex X again. I accept Mr Zimmern’s submission that, where the withdrawn declaration is not before the Court, it may be difficult to say that it contains the very evidence now sought. However, it is an obvious inference that the material in the withdrawn document would at least significantly overlap with the material which is sought to be obtained through the examination under the Letter of Request procedure.

118.  On that basis, I think the fact of the prior declaration and its withdrawal was relevant to the weighing operation in the exercise of the Master’s discretion. In other words, it was material and ought to have been disclosed. But, I can see that it is more difficult to infer that the non-disclosure in this respect was deliberate in the sense of any deliberate suppression of material, as it made have been thought – albeit erroneously – not to have been material.

H.2  Y’s Allegations of MND

119.  For Y, Mr Luxton also relies upon the failure to have informed the Court of the particular risk for Y of self-incrimination in complying with the Order. In addition to the general matters already canvassed within X’s submissions, Mr Luxton points to the specific matters relating to Y.

120.  One matter is that Y was a prosecution witness (PW3) in the case against CD, having been given a letter of immunity. But that letter of immunity was limited to any offences disclosed by Y in the course of her testimony, which was focused on the specific matters dealt with in that trial. That the letter of immunity was given does, as Mr Luxton submits, tend to suggest that the Department of Justice was aware that Y could have given evidence on matters that may be self-incriminating. Further, as already indicated above, Y was one of the persons said to have been a party to the joint enterprise which the prosecution wished to pursue in that trial. Where the Board (the prosecuting authority) would have the opportunity under the Letter of Request to examine Y regarding her involvement in the CRP, that obviously raises the possibility of using her evidence for potential action against her in future.

121.  Mr Luxton points specifically to the Note 70/6/5 in the Hong Kong Civil Procedure 2022, which – referencing authorities including the Philip Morris case – states:

To limit the evidence requested in the order recognising the request, the witness should apply as an interested party following service of the order requesting his evidence. At the return hearing, the witness should invoke his claim to privilege to the applicable questions that he has been requested to answer. Where the witness claims that all his answers would be subject to privilege, he ought to submit that the order for evidence against him should not be made because it would be a waste of the court’s resources to insist upon examination, in accordance with the underlying objectives of the High Court Rules (O.1A). If such a challenge succeeds, the order will not be made and the witness need not even attend any examination.

122.  Mr Luxton also refers to First American Corporation v Zayed [1999] 1 WLR 1154. In that case, Sir Richard Scott V-C confirmed at 1165B-C that the question as to what evidence would and what evidence would not be relevant to an issue in the foreign action is primarily a matter for the foreign court, so that the requested court must look at the issue of the relevance of the requested testimony, if it is raised, in broad terms, leaving to the foreign court in all but the clearest cases the decision as to whether particular answers or answers on particular topics would constitute relevant admissible evidence. He summarised that the requested court should ask first whether the intended witness can reasonably be expected to have relevant evidence to give on the topics mentioned in the schedule of requested testimony, and second whether the intention underlying the formulation of those topics is an intention to obtain evidence for use at the trial or is some other investigatory, and therefore impermissible intention.

123.  However, the Vice-Chancellor went on to identify two other considerations of importance. The first is that the requested court should, if it can properly do so, accede to letters of request issued by foreign courts seeking evidence for use in foreign litigation. But the second matter of importance is that in deciding what response to make to a letter of request, the court should bear in mind the need to protect intended witnesses from an oppressive request. As he put it, there is a balance to be struck in each case between the legitimate requirements of the foreign court and the burden that those requirements may place on the intended witness.

124.  In the First American case, there was an allegation that accountants were aware of the fraud in the case, but did nothing about it and therefore were strictly a party to the fraud. The accountants denied the allegations. The Vice-Chancellor stated at 1168F-G:

First American have given no undertaking that they will not join [the accountants’ firm] in a civil action, whether the existing action or a new action, in an attempt to recover damages for [the firm’s] alleged knowing complicity in the fraud. First American’s lawyers plainly believe that they already have material that justifies them in making public allegations to that effect. It is, it seems to me, inherently oppressive to hold over the head of two witnesses serious allegations of complicity in fraud and the real possibility of being joined as defendants in a civil action based on that alleged complicity, while at the same time requesting an opportunity for a wide examination of the two witnesses on the very topics that would be relevant in an action against them.

125.  In the particular case, whilst recognising the general force in the proposition that the fact that evidence so obtained may be used in other proceedings and indeed may be central in those proceedings is no reason for refusing to allow it to be requested, he held that allegations of fraud raise special considerations. Therefore, so long as First American held themselves free to use any information they may obtain from the two witnesses in a civil action for fraud in which the witnesses, or their firm, are defendants, those requests were oppressive.

126.  I find this reasoning persuasive, and the possibility that the requested examination might be regarded as oppressive ought to have been drawn to the attention of the Court. In short, I agree that there was a material non-disclosure in this respect.

127.  The second aspect of alleged material non-disclosure as regards Y is essentially based on the suggestion that the Letter of Request significantly embellishes Y’s role in the CRP. In so far as it stated Y “was responsible for the approval process for the CRP both at a high level and regarding individual potential CRP referral hires”, Mr Luxton submits that was a significant mis-statement of Y’s role within L&C and in relation to the CRP. At the time, Y was a paralegal within L&C, and she did not have the authority alleged. As she described in her own evidence in the Hong Kong trial, she was more akin to an administrator or coordinator, rather than being a responsible person or decision-maker.

128.  Mr Luxton submits that AB must have known that the statement in the Letter of Request was false, not least because of his own status as a former employee. Further, it is notable that it was his solicitor who provided the supporting affirmation for the ex parte application for the Order, asserting Y’s role based solely on information contained in the Letter of Request. Mr Luxton also points to the unexplained failure to have sought evidence from GH, who himself gave evidence in the Hong Kong trial that he would normally decide whether to grant approval or not. It would seem obvious that GH [redacted] was in a better position to provide relevant evidence than Y, a paralegal – at least casting serious doubt on the assertion in the Letter of Request that Y “is the only available source for certain information that AB is seeking”.

129.  I agree these matters were relevant to the weighing exercise to be performed by the Master. Therefore, the failure to disclose them was a material non-disclosure. From all the circumstances, it seems to me that AB’s failure to disclose these matters must have been deliberate.

130.  On the question of oppression, there is also force in Mr Luxton’s submission that the broad and imprecise categories of questions to be found in Appendix 2 (see above) to the Letter of Request, all of which topics are said to be relevant to all of the witnesses, tend to leave the distinct impression that this is a scatter-gun attempt over a wide range or arc of fire in the hope that something is hit upon. Mr Luxton submitted that, at most, any permitted examination of Y should be limited to those matters identified in paragraphs 6 and 10 of Appendix 2.

H.3  Z’s Allegations of MND

131.  For Z, Mr Hickin also relies on two areas of material non-disclosure, being (1) the risk to Z of self-incrimination and (2) the failure to produce the ALJ’s orders dated 17 April 2020.

132.  As noted above, Z was a prosecution witness (PW2) in the Hong Kong criminal trial. She was also one of those parties against whom the prosecution wished to allege a joint enterprise. As with the other two witnesses, I agree that there was material non-disclosure in this respect.

133.  Mr Hickin also relies on Note 70/6/5, and submits that the majority (if not all) of the wide-ranging topics set out in Appendix 2 to the Letter of Request are likely to lead to an invocation of the privilege against self-incrimination and a refusal to answer any questions during the proposed examination that potentially risk subjecting Z to criminal liability. I agree that this is a material matter which ought to have been disclosed.

134.  Mr Hickin emphasises that the matters in respect of which AB seeks to examine Z took place over 16 years ago and have been subject to multiple investigations, enquiries and court proceedings over the years including the failed attempt on AB’s part to examine Z in 2018. Because of the historic nature of the events in question, recollections are likely to have faded. Further, given the delays on AB’s part in pursuing the matter, Z should not be subjected to endless requests of this kind. Further, Z at all material times held a relatively junior position and her duties were largely administrative in nature. The need to examine Z at all – let alone on the full range of matters in Appendix 2 – is highly questionable. So, Mr Hickin submits that the request to examine Z is oppressive and should not be permitted.

135.  As to the prior ALJ orders, Mr Hickin refers to the fact that the ALJ had herself expressed doubts about the need for each of the witnesses covered by the Order to give evidence in the US Proceedings, and noted the prospect of “redundancy and duplication among the testimony”. Notwithstanding that Z has raised this concern, AB has still failed to produce the Orders in question. This, says Mr Hickin, was material non-disclosure.

136.  I disagree in this respect. It does seem that, at some prior time, the ALJ was doubtful about the need to seek evidence from these witnesses, and that she warned of the need to be cautious and to avoid duplication or redundancy. However, whatever previous views were expressed, the ALJ was subsequently persuaded to issue the Letter of Request. I do not think any prior expression of doubt was a matter of any materiality that needed to be brought to the attention of the Master, who was faced with the clear expression of necessity embodied in the request with which he was dealing.

H.4  Consequences of MND

137.  Mr Parker submits – and Mr Luxton and Mr Hickin adopt the submission – that the material non-disclosure was such that the Order should be set aside, and there should be no re-grant, despite committee considerations. He relies on the facts that: (1) the omission was significant and would have changed the entire landscape of the ex parte application; (2) the omission had the potential to be highly prejudicial to the witnesses; (3) the risk of self-incrimination remains, and is real and substantial; (4) the witnesses have reasonably expressed their fears, and have stated that they will assert their privilege, rendering the exercise futile; (5) the proposition that comity calls for execution of letters of request where possible carries little weight in the context that the examinations are sought by AB for his own purposes, and the ALJ has not herself called for the witnesses’ evidence, having indeed earlier cautioned about the need to be selective and proportionate; (6) the ALJ has in any event made clear that the trial will proceed even without any of the witnesses AB belatedly seeks to examine in Hong Kong.

138.  Mr Zimmern of course submits to the contrary. He says that, to the extent that any non-disclosure is found, it was not sufficiently material, was not deliberate and not seriously prejudicial. Therefore, the usual approach should be to exercise discretion in favour of the requesting court.

139.  However, I have found that the non-disclosure was serious and in certain respects was deliberate. In my view, there is a real possibility if not probability that, had the matters been properly disclosed, the Master would simply not have made the Order because to have done so would likely have been largely if not entirely futile, so a waste of time and resources. My own view is that the questions over which a claim to privilege could not be successfully maintained would be few in number. I also specifically note that whilst AB has sought the evidence from the witnesses, he has been far from clear about his own active involvement in the US Proceedings. I accept the point made for him that he does not necessarily have to be in the US to take part in the proceedings, but where he has chosen not to reveal his whereabouts, it is at least a realistic possibility that he may choose not fully to engage with the US Proceedings and that he cannot be compelled to attend or participate.

140.  Indeed, the fact that the ALJ has made clear that the trial in July 2022 will go ahead in any event seems to me to be indicative of the limited procedural and substantive value that the ALJ thinks would properly be available from the requested evidence. (As an aside, that fact does not sit happily together with the statement on the face of the Letter of Request that, without the evidence, justice cannot be completely done.)

141.  On the overall balance of matters, I think the material non-disclosure of itself would lead to the setting aside of the Order, and that no re-grant would be appropriate. This is a reason to set aside the Order in addition to the jurisdictional point.

I.  Amendment Summons

142.  As I have decided that jurisdiction to make the Order was not properly founded, the Amendment Summons falls away.

143.  However, for the sake of completeness I would make the following comments:

(1)  There is some force in the criticism that it should not be left to AB to nominate, without specific Court approval, any potential replacement for Mr Li as the examiner.

(2)  However, where Mr Li has apparently confirmed his availability for the February dates, this is a non-issue.

(3)  As to those dates, I think it is helpful to set aside specific dates for each of the individual witnesses. I note the complaint that that will curtail flexibility, but there is some degree of flexibility which might be possible on the days in between the examination dates. In any event, I think the balance against the chronology would be to ensure some fixed time set aside for each witness as the amendment proposed.

(4)  Were the examination to be going ahead, I would think it entirely appropriate in the current circumstances for the witnesses to give evidence ‘remotely’, using VCF.

J.  The Fourth Witness

144.  I have already noted that the Letter of Request is not limited to seeking the examination of X, Y and Z. There is a fourth witness, who has not made any application to set aside the Order. But, even though I have heard no submissions from that witness, where I have held that there was no jurisdiction to have made the Order, it seems to me that the entirety of the Order should be set aside. In other words, the setting aside is not limited to the position of X, Y and Z. That the fourth witness has not taken any objection to jurisdiction cannot of itself confer jurisdiction if it does not exist.

J.  Result

145.  The Order is set aside.

146.  I make no order on the Amendment Summons.

147.  As to costs, I presently see no reason why costs should not follow the event on each of the Set Aside Applications and the Amendment Summons. Therefore, AB shall pay the costs of X, Y and Z to be taxed if not agreed. For the avoidance of doubt, I would not give any certificate for two Counsel. However, as I indicated at the hearing, the costs order will be an order nisi in the first instance. It will become absolute if no variation application is made within 14 days. If such an application is made, it will be dealt with on paper.