LEE KWOK WING JACKSON v. SECRETARY FOR JUSTICE

HCAL 142/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO.142 OF 2002

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J U D G M E N T

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1. This is an application for judicial review in which the applicant, a police officer, challenges the lawfulness of his conviction of a disciplinary offence which has led to his removal from the Force.

2. The applicant joined the police force in 1982 as a constable and was promoted to the rank of sergeant in 1995. In or about 1997, the applicant lent a sum of $400,000 to his brother, the moneys to be invested in an import and export business in Malaysia. Some $320,000 of that loan had been borrowed by the applicant from various financial institutions. The brother never repaid the loan to the applicant. This seemingly placed an intolerable financial burden on the applicant whose debts began to spiral. Over a three-year period his debts increased so that by 20 November 2000 he was indebted to various institutions in a sum of approximately $741,000.

3. The applicant sought protection from his creditors in bankruptcy. He was declared bankrupt on 20 February 2001. A few months later, in June 2001, the applicant was charged with an offence against discipline; more particularly, a contravention of Police General Order 6-01(8) made pursuant to the Police (Discipline) Regulations, Cap.232. The Police General Order in question reads :

"A police officer shall be prudent in his financial affairs. Serious pecuniary embarrassment from whatever cause is regarded as a circumstance which impairs the efficiency of an officer."

4. The charge as originally worded was amended before the disciplinary hearing had reached the stage when a finding had been communicated to the applicant. The amended charge read :

"Sergeant 20431, Lee Kwok-wing, of the Hong Kong Police Force, you are charged that on the 17th day of December 2000 you did fail to be prudent in your financial affairs by accruing debts of HK$741,320, which serious pecuniary embarrassment resulting from your financial imprudence impaired your operational efficiency, contrary to Police General Orders 6-01(08)."

5. The applicant was found guilty as charged. By way of this application for judicial review, the applicant now challenges the finding of the Disciplinary Tribunal made on 11 September 2001 finding him guilty.

6. The second decision challenged is the decision of a more senior officer made on 18 September 2001 confirming the finding of guilty and imposing on the applicant an award of compulsory retirement with reduced benefits.

7. The third decision challenged is the decision of a yet more senior officer, contained in a memorandum dated 20 December 2001, confirming the finding of guilty and varying the award to one of compulsory retirement with deferred benefits.

8. The fourth and final decision challenged is the decision of the Deputy Commissioner of Police contained in a memorandum dated 10 April 2002 dismissing the applicant's appeal.

9. While there are four decisions challenged, it is apparent, having heard counsel, that the focus of this application for judicial review is centred on the disciplinary hearing itself, the hearing which, on 11 September 2001, resulted in the applicant being found guilty of a breach of PGO 6-01(8).

10. The first challenge is to the effect that the finding of guilt of the Disciplinary Tribunal (and thereafter the decisions of the other officers confirming that finding) was Wednesbury unreasonable in that there was insufficient evidence, or no evidence at all, to show that the efficiency of the applicant was impaired as a result of his financial indebtedness.

11. In respect of this challenge, Mr Wong, who appeared for the applicant, attempted to distinguish the findings of the Court of Appeal in the decision of Leung Fuk Wah Oil v. The Commissioner of Police [2002] 3 HKLRD 653. I am satisfied, however, that the findings of the Court were not in this instance capable of being distinguished.

12. The Court of Appeal stated unequivocally that the offence is to be read on the basis of its ordinary English meaning, namely, that "serious pecuniary embarrassment from whatever cause" is regarded as a circumstance which impairs the efficiency of an officer. In short, that serious pecuniary embarrassment of itself is considered to be a circumstance which impairs the efficiency of an officer and it is not therefore necessary for a disciplinary tribunal to be satisfied that, first, there is serious pecuniary embarrassment and, thereafter, separately, that the serious pecuniary embarrassment has, in that particular case, resulted in the impairment of the efficiency of the officer.

13. Prior to the Court of Appeal's decision in Leung Fuk Wah Oil (supra) there was what is called a 'two-pillar approach'. The Court of Appeal disapproved of that earlier approach :

"In Ng Kam Chuen v Secretary for Justice [1999] 2 HKC 291, the court construed PGO6-01(8) as meaning a 'two pillar' charge sounding both to financial prudence and the consequent impairment of efficiency. In so far as this means or is interpreted as meaning the prosecution is required to adduce evidence on both financial imprudence and impairment of efficiency, then we are unable to accede to this construction for the reasons that we have indicated."

14. If I may put it in plain language, the Court of Appeal without any ambiguity said that PGO 6-01(8) is to be read to the following effect. A police officer must be prudent in his financial affairs because of the particular status that he holds in the community and because of the particular pressures to which he may be subject if he does allow himself to fall into a situation of serious pecuniary embarrassment. If he does fall into a situation of such embarrassment then that alone is to be regarded as impairing his efficiency. Why? Because the officer cannot thereafter be trusted fully by the force to carry out, without impairment, all of the duties to which he may, as a police officer, from time to time, be called upon to fulfil.

15. In the present case it is not in any way disputed that the applicant had fallen into a situation of serious pecuniary embarrassment. That being the case, it was not necessary for the tribunal, as a separate matter, to prove that that embarrassment had impaired his efficiency. I find nothing of substance in the first ground of challenge.

16. The second ground of challenge is also based on Wednesbury unreasonableness. It is to the effect that there was insufficient evidence before the Disciplinary Tribunal to support the finding that the indebtedness of the applicant was a result of his financial imprudence.

17. The Court of Appeal in Leung Fuk Wah Oil accepted that imprudence was a matter which was required to be demonstrated. In this regard, the court said :

"Serious pecuniary embarrassment is treated seriously because it is regarded as a circumstance which impairs efficiency. Imprudence is necessary in order to exclude financial problems due to unforeseen and compassionate circumstances which the police force clearly recognised should be treated sympathetically."

In the course of his submissions, Mr Wong suggested that this dicta, in so far as it refers to financial problems due to unforeseen and compassionate circumstances, was to be read disjunctively as opposed to conjunctively. That would mean, he said, that, if a financial problem was unforeseen by the officer that of itself would mean that it was not imprudent.

18. I disagree. The test cannot be the purely subjective one advocated by Mr Wong. On that basis a foolish but confident officer who risked unmanageable debt through risky investments would not be considered imprudent even though objectively his actions were manifestly rash. The words of the Court of Appeal are plain enough and carry a plain enough meaning. Unforeseen and compassionate circumstances include such obvious incidents as an unexpected serious illness in the family which results in unmanageable medical expenses. The word 'and' is intended, except in the rarest of factual circumstances, to be read conjunctively.

19. In respect of the applicant, it was argued by Mr Wong that there was no evidence that he himself had been imprudent. He had lent money to his brother whom he trusted. His brother was investing in a business which appeared to be bound for success. At that time, said Mr Wong, nobody could know that the financial crisis of late 1997 was to happen. But that is a very narrow, unrealistic way to view matters. The Disciplinary Tribunal viewed it from an objective stance, saying :

"By adopting a reasonable man's standard, it is only common sense that any investment carries risk. The defendant allegedly borrowed some $320,000 from unknown sources to help his brother investing in an import/export business in Malaysia. However, he did not require any security or collateral proof.

According to the Random House College Dictionary (1979) the word 'risk' means exposure to the chance of injury or loss, a hazard or dangerous chance. The word 'imprudent' means lacking discretion, unforeseeing and rash.

The defendant's act under the circumstances was clearly risky and imprudent as the defendant should have considered the dire consequence to him if the investment went bad, as it was proven to be the case later."

20. The Tribunal, on that basis, found that the element of financial imprudence had been established. It is apparent to me that the tribunal went to the heart of the matter when it observed that the circumstance of this business investment, without any security or collateral, was clearly risky and that the defendant should have considered the dire consequences to him if the investment went bad. The Tribunal was entitled to look to the inherent risk factor and what in fact happened; namely, that when the investment went bad and the moneys were not repaid, the applicant was not in a position to absorb the loss. Indeed, that original loss led to increasing financial difficulties and a spiralling of his debts. In this regard, in the following paragraph, the Tribunal said :

"The elements of serious pecuniary embarrassment were evidently proved by the defendant's repeatedly acquiring revolving loans, personal loans, overdrafts, and inability to pay his salary tax for 1999/2000. The defendant did not have any foreseeable means to meet the repayment schedules with his sergeant's monthly salary of $25,580 as at December 2000. Over the past three years his debts have snowballed to $741,320."

The Tribunal went on to say the following :

"In the defendant's case, he has not produced any evidence or documentary proof to support his version resulting in his outstanding debts of $741,320."

21. As to the issue of Wednesbury unreasonableness, I am unable to see how it can be said that the Tribunal in this instance acted as no reasonable tribunal would act by finding that the debt of the applicant had been as a result of financial imprudence. I am satisfied that the tribunal was stating what is self-evident. A police officer is subject to disciplinary regulations which state that he must be prudent in his financial affairs because of his particular status in society, a matter to which I have already referred. If the applicant in this instance, in borrowing $320,000 from various unknown sources in order to assist his brother, was knowingly not in a position to repay the debt if the investment failed, and yet sought no protection by way of security, then he was embarking on a risky venture, one which would have profound implications on his own financial position. That was imprudent. The second ground of challenge must also fail.

22. I now move to the third ground of challenge, namely, that the proceedings were unlawful in that the Disciplinary Tribunal failed to apply the correct burden and standard of proof.

23. In this regard Mr Wong referred me to a portion of the findings of the Disciplinary Tribunal which I have already quoted, namely, the portion of the findings which commences with the sentence: "By adopting a reasonable man's standard, it is only common sense that any investment carries risk." Mr Wong submitted that this, when read in the context of the entire paragraph, somehow reduced the standard of proof. I am unable to agree. The sentence I have quoted quite patently stands on its own. It may be rephrased in the following language : "Looking to the reasonable man on the Wanchai omnibus, he would say that it is only common sense that any business investment carries risk". An observation of that kind is, in my judgment, entirely legitimate. The observation has nothing to do with the burden of proof.

24. It was further argued that, by noting that the applicant had not produced any evidence to support his version of how he came to be in such debt, the Tribunal had reversed the burden of proof. But, in my view, observation of the Tribunal does not in any way reverse the burden. The applicant chose to put forward a version of events as to how he got into debt but chose not to support that version with any independent evidence. Why should the Tribunal be prevented from commenting on that fact?

25. I turn now to the fourth challenge; namely, that there were procedural irregularities which led to material unfairness.

26. In this regard, Mr Wong said that after the evidence had been concluded and when quite clearly on the transcript the parties were preparing for their final submissions, the tribunal called a further witness. The witness was an officer by the name of Phillips. It was suggested that the calling of this witness, without an opportunity first being given to the applicant to object, constituted a material unfairness.

27. But it is apparent from a study of the transcript that the applicant was represented by an inspector at the disciplinary hearing. The inspector took no objection to the calling of the new witness and, indeed, without any request for an adjournment, asked the new witness various questions. Those questions were to the issue and there is nothing to suggest that they were in any way asked under complaint. How can there in the circumstances have been a procedural unfairness?

28. Mr Wong also complained of unfairness in the late amendment of the charge. I accept that it was amended late in the day but, under Regulation 10 of the Police (Discipline) Regulations, a charge may be amended, or a further charge added, at any time prior to a finding being communicated to the person charged. In the circumstances, the Disciplinary Tribunal was entitled to agree to an amended charge as it had not, at that time, communicated any finding of guilt or innocence to the applicant.

29. The applicant was advised (in terms of Regulation 10) by the tribunal that, if he required an adjournment in order to consider his position, he was entitled to that adjournment. The transcript of proceedings records that the defendant did not seek an adjournment. He remained by his plea of not guilty to the amended charge and asserted, so the transcript has it, that he did not need an adjournment and further informed the tribunal that he wished to call no further witnesses.

30. Mr Wong has suggested that it was a material irregularity and a fundamental breach of fairness not to somehow give the applicant an opportunity before the amendment was made to make submissions as to the making of the amendment. But that goes contrary to the clear wording of Regulation 10 of the Police (Discipline) Regulations. In any event, in light of the fact that the defendant, having been advised of the amendment, said that he did not require an adjournment and had no intention to call any further witnesses, I fail to see how, in substance, it can be suggested that there was any unfairness or, as it was previously termed in our courts, a breach of natural justice.

31. I come now to the final challenge which is one of bias. It has been suggested that the general conduct of the tribunal, illustrated by a number of separate matters, indicates that it was biased.

32. The test to be applied is, as I understand it, to the following effect. The court must first ascertain all the circumstances which have a bearing on the suggestion that the tribunal was biased. It must then ask whether those circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility or a real danger (the two being effectively the same) that the disciplinary tribunal was biased in the manner in which it conducted its proceedings.

33. It is true that the tribunal itself asked all questions of the first witness for the prosecution in evidence-in-chief. But as Mr Chow, for the respondent noted, the statement of this first witness was tendered as evidence by consent. The tribunal was therefore asking questions to elaborate the evidence already before it and was doing so before cross-examination so that any questions it raised would be known to the defence and could be built upon in cross-examination. In such circumstances I fail to see how that can, of itself, lead to any suggestion of bias.

34. As to the second witness called by the prosecution, the questions asked of that witness by the tribunal in-chief were not exhaustive; further questions were asked by the prosecuting officer.

35. It has been suggested that to these actions must be added the fact that the tribunal itself initiated the calling of these two witnesses and indeed initiated the amendment to the charge itself.

36. What must be looked at, of course, are all the circumstances which have a bearing on the suggestion of bias. I have been through the transcript and I am at a loss to see how it can be suggested that these various actions, either taken individually or together, can be said to result in bias.

37. Again, what must be remembered is that this was a Disciplinary Tribunal hearing. The essence of the hearing is to get to the truth of the matter and to ensure that the charge that is faced is, in all respects, the correct one. Again what must be remembered is that we are not talking here about lawyers drawing up charges; we are talking about charges being drawn by lay persons in order to ensure the fair determination of an alleged disciplinary offence. To ensure that charges correctly reflect what is alleged, the regulations specifically allow the tribunal to amend a charge at any time up until the findings of guilt or innocence. In the circumstances, I am satisfied that this final challenge must also fail.

38. In the circumstances, the application for judicial review is dismissed.

39. Costs follow the event in matters of this kind. Costs are awarded to the respondent in respect of the application, such costs to include costs of the discovery application and hearing.