NG CHI KEUNG v. SECRETARY FOR JUSTICE

HCAL27/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO.27 OF 2013

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J U D G M E N T

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Introduction

1.  On 21 September 2012, Mr Joseph To, magistrate of the Eastern Magistrates’ Courts, issued three summonses against all interested parties.  The applicant alleged in the summonses that the interested parties conspired to pervert the course of justice by making a false report to the Commercial Crime Bureau (‘CCB’) that he had dishonestly misappropriated 50,070,000 shares (‘Subject Shares’) of Sino Union Petroleum and Chemical International Limited (Sino Union).  

2.  On 12 October 2012, the Director of Public Prosecutions (DPP) took over the private prosecution pursuant to s 14(1) of the Magistrates Ordinance, Cap 227.  

3.  On 28 December 2012, the DPP formally withdrew the summonses on the ground that there was no reasonable prospect of conviction. 

4.  On 30 January 2013, the applicant filed an application for leave to judicial review the decision of the DPP.  Leave was refused by Deputy Judge Wright on 7 February 2013.  The applicant appealed. 

5.  On 30 April 2014, the Court of Appeal allowed the appeal and granted leave for the judicial review.  

Background

6.  The applicant and the interested parties had a long history of business dealings and litigation.  Before considering the judicial review, it is essential to set out the basic background and chronology of events leading up to this hearing. 

7.  The 1^st interested party was the Chairman of Sino Union.  The 2^nd interested party was the general manager of Sino Union, Shenzhen branch.  The 3^rd interested party was the executive director of Hong Kong General Association of International Investment (‘HKGAII’).  The 1^st interested party was the founding president of HKGAII. 

8.  Around August 2007, the 2^nd interested party opened an account in Cheer Union Securities Limited (‘Cheer Union’) for trading Sino Union shares.  The applicant was the general manager and responsible officer of Cheer Union.  The 2^nd interested party subsequently deposited 45 million Sino Union shares in his account[1].  He authorised two persons to manage the account for him[2].

9.  Around July 2007, the 3^rd interested party opened an account in Cheer Union.  He deposited 4.95 million Sino Union shares in his account.  He authorised two persons to manage the account for him[3]. 

10.  In December 2007, on the request of the 1^st interested party, the applicant arranged the 1^st interested party to meet Mr Koon Wing Yee (‘Koon’) to discuss the latter’s investment in Sino Union shares.  The applicant recalled that during one of the meetings, the 1^st interested party promised to transfer 250 million Sino Union shares to Koon if the latter purchased a total of $200 million worth of Sino Union shares. (‘Incentive Agreement’) 

11.  According to the applicant, in May 2008, the 1^st interested party instructed him to transfer 50 million Sino Union shares[4] to Koon as part of the 250 million Sino Union shares agreed under the Incentive Agreement.  These shares would be taken from the accounts of the 2^nd and 3^rd interested parties.  

12.  According to the applicant, he withdrew the shares using the withdrawal forms signed by the 2^nd and 3^rd interested parties.  These Subject Shares were delivered to the 1^st interested party. 

13.  In May 2009, the 2^nd interested party discovered that 45 million Sino Union shares were withdrawn from his account.  He reported the matter to the CCB.  He also complained to Securities and Futures Commission (‘SFC’) against the applicant.  He however confirmed that the signatures on the withdrawal form and other related documents were his.  He maintained that they were signed at the time when he opened the account. 

14.  In early 2009, the 3^rd interested party also discovered that 4.95 million Sino Union shares were withdrawn from his account.  He reported to the CCB.  He confirmed his signature on the withdrawal form and other related documents but could not recall the circumstances of signing them.

15.  The key events which ensued are set out as follows:

a  In May 2009, the 1^st interested party complained to Organised Crime and Triad Bureau (OCTB) about certain conduct of the applicant, Koon and others. 

b  In June 2009, the applicant, Koon and others were jointly charged with two counts of conspiracy to blackmail the 1^st interested party and one count of theft of 100 million Sino Union shares belonging to the 1^st interested party.[5]  This case was transferred to the Court of First Instance around March 2010 pending trial.  (‘HCCC 66/2010’)

c  In June 2009, the 2^nd interested party complained to SFC alleging theft of the shares in his account by the applicant.

d  On 23 June 2009, the 1^st interested party commenced civil action against the applicant, Koon and others for illegally coercing him to transfer 100 million Sino Union shares from Mr Zhao to Chan Kwai Nam.  The 1^st interested party paid $135 million for the purchase price.[6]  (‘HCA 1479/2009’)

e  In January 2010, the 2^nd and 3^rd interested parties complained to CCB against the applicant for theft of their shares in the account with Cheer Union. 

f  About 1 March 2010, the 2^nd interested party commenced civil action against the applicant and Cheer Union for theft of his shares.  (‘HCA 287/2010’)

g  In August 2010, Senior Public Prosecutor, Ms Bianca Cheng, advised not to prosecute the applicant for theft. 

h  On 8 September 2011, the applicant commenced civil action against all interested parties for making a false report to CCB.  (‘HCA 1529/2011’)

i  On 8 December 2011, the applicant reported to CCB that all interested parties made a false report of theft against him. 

j  On 17 February 2012, Ms Lily Wong, Senior Public Prosecutor (SPP), advised not to prosecute the applicant for theft after CCB conducted further investigation. 

k  On 17 April 2012, SFC banned the applicant for 10 years for failing the duties of a licensed person[7].

l  On 19 July 2012, the applicant filed information to conduct private prosecution against all interested parties. 

m  On 7 September 2012, Ms Lily Wong, SPP, advised not to prosecute all interested parties for conspiracy to pervert the course of justice.  She opined that there was insufficient evidence and no reasonable prospect of conviction[8].

n  On 12 September 2012, Ms Lily Wong’s advice was endorsed by Mr David Leung, Senior Assistant Director of Public Prosecutions and Mr Kevin Zervos, DPP[9]. 

o  On 13 September 2012, the applicant was informed of the decision through his solicitor[10]. 

p  On 21 September 2012, Mr Joseph To, magistrate, issued a summons against each interested party[11]. 

q  On 24 September 2012, Ms Lily Wong, SPP, wrote to seek the approval of the Secretary for Justice (‘SJ’) to take over the summonses[12].

r  On 10 October 2012, the SJ delegated the authority to handle this matter to DPP.  The DPP decided to take over the proceedings[13]. (‘1^st Decision’) 

s  On 12 October 2012, Mr Siu Kai Yip, SPP, formally took over the three summonses.  He sought 8 weeks adjournment to consider further information from the applicant before making a final decision whether to discontinue[14].

t  On 16 October 2012, the applicant wrote to the DPP through his solicitor and supplied further documents[15].  In the interim, Mr Siu Kai Yip, SPP, reconsidered the evidence.  He advised to withdraw the summonses[16]. 

u  On 27 December 2012, the DPP informed the applicant that the summonses would be withdrawn.  Bearing in mind the Prosecution Policy and Practice 2009 in particular paragraphs 7 and 11, the DPP concluded that there were issues of credibility and reliability of the applicant.  There was no reasonable prospect of conviction.  He relied on the case of R (Gujra) v Crown Prosecution Service [2012] 3 WLR 1227[17]. (‘2^nd Decision’) 

v  On 28 December 2012, the three summonses against all interested parties were withdrawn[18]. 

w  On 30 January 2013, the applicant sought leave to judicial review the 1^st and 2^nd decisions of the DPP. 

x  On 7 February 2013, leave was refused.  The applicant appealed. 

y  On 25 March 2014, the applicant, Koon and others were acquitted of all charges in HCCC 66/2010. 

z  On 30 April 2014, the Court of Appeal allowed the appeal and grant leave for the judicial review. 

The Judicial Review

16.  In this judicial review, the applicant challenged:

a  The 1^st decision of the DPP to take over the private prosecution on 10 October 2012.  

b  The 2^nd decision of the DPP to discontinue the private prosecution on 27 December 2012. 

17.  The applicant sought the following relief:

a  An order of certiorari to quash the 1^st and the 2^nd Decision.

b  If only the 2^nd Decision is quashed, the DPP to reconsider the decision not to prosecute. 

c  A declaration that the SJ and/or DPP had breached its own policy in arriving at the 1^st and the 2^nd Decision.

18.  In giving judgment for the Court of Appeal, Stock VP[19] concluded,

“20. It seems to us impossible correctly to conclude that the reasoning of the minority in Gujra does other than illustrate a reasonably arguable case.  Not only is that self evident from the stature of the argument’s proponents but also from the prima facie cogency of the arguments themselves.  In his judgment refusing leave, the Deputy Judge, having referred to Gujra, concluded that he was “satisfied that I should follow the majority decision”; but he failed to say why the reasoning of the minority did not give rise to a reasonably arguable case and he failed to analyse the assertions of illegality in the context of the Hong Kong setting; a setting which has its own specific constitutional provisions and its own sensitivities to prosecutorial decisions. 

21. The two relevant provisions of the Basic Law are articles 35 and 63.  Article 35 provides that Hong Kong residents shall have the right to access to the courts, and article 63 says that the Department of Justice “shall control criminal prosecutions, free from any interference.”  It seems obvious that the one cannot be read with a blind eye to the other and the question of how the one sits with the other strikes us as an important constitutional question.  That fact and the obvious respectability of the dissenting views in Gujra persuaded us that the point raised as to the lawfulness of the policy clearly warranted the grant of leave.”

The grounds against the 1^st decision

19.  Mr Bell, SC, for the applicant pointed out that the DPP failed to follow the Statement of Prosecution Policy and Practices 2009 (‘Prosecution Policy’), in particular, paragraphs 11.6 (b) and 11.7[20].  In gist, the DPP failed to consult the applicant before making the 1^st decision. There was no public interest or exceptional circumstances for taking over.  The 1^st Decision was not personally approved by the SJ. 

20.  Mr Huggins, SC, for the respondent argued that the Prosecution Policy did not create a legal obligation to consult the applicant.  Any intervention by the court on failure to consult the parties could not be justified in light of Article 63 of the Basic Law[21].  Besides, the applicant had his own motive to serve given the background of the case.  It was perfectly rational for the DPP to intervene and remove any perception of prejudice on the part of the applicant.  It would not be in the public interest for weak and borderline cases to proceed.  There was no requirement for formal written delegation by SJ. 

Consulting the applicant

21.  Code 11.6 (b) provides that “In considering whether to take over a prosecution the following factors are relevant: ….. (b) the wishes of the parties;…..”  The prosecutor was required to consider the wishes of the parties.  There was no positive duty to consult.  Where the wishes of the parties were clear as in this case, I do not see the need to have a meeting or interview as Mr Bell suggested. 

22.  Since making a report to CCB on 8 December 2011, the applicant had a series of correspondence with the CCB as well as the Department of Justice (DoJ)[22].  The applicant indicated in the letter dated 23 March 2012 that he had consulted senior counsel and would commence private prosecution against all interested parties if the DoJ had not decided to do so before 25 April 2012.  Not only did he repeatedly press for charges against the interested parties, he even complained that the CCB had not put sufficient focus on the evidence against the 1^st interested party[23].

23.  While legal advice from DoJ was pending, the applicant commenced private prosecution proceedings on 20 July 2012.  Eventually, the DoJ decided not to prosecute all interested parties on 7 September 2012.  The applicant was informed of the decision on 13 September 2012.  

24.  All along, the DoJ was fully aware of the stance of the applicant.  They must have considered that in coming to their decision to take over. 

No public interest or exceptional circumstances to take over

25.  On 7 September 2012, Ms Lily Wong, SPP, advised not to prosecute the interested parties.  Her advice was endorsed by her superiors[24] before informing the applicant on 13 September 2012.  

26.  In her advice, Ms Wong doubted the credibility of the applicant[25].  She opined that the applicant had a motive to serve.  She concluded that there was insufficient evidence to support a charge of conspiracy to pervert the course of justice[26].  

27.  In her note to the SJ seeking approval to take over the private prosecution, Ms Wong relied on the same grounds.  She indicated that there was no reasonable prospect of conviction.  She recommended reviewing any further evidence from the applicant before making the final decision to continue or to discontinue by offering no evidence[27].

28.  Given the previous business dealings of the parties, coupled with the pending criminal trial in which the applicant was one of the defendants and the 1^st interested party was the victim, it was reasonable for Ms Wong to conclude that the applicant had his own motive to serve in commencing the private prosecution.  I agree that public interest required that the DoJ to take over and preserve public confidence.  

29.  The summonses against all interested parties were eventually issued on 21 September 2012.  To allow the private prosecution to proceed on the same basis would thwart the earlier decision not to prosecute.  Public interest was at risk.  The taking over was in accordance with code 11.6 (c)(iii) of the Prosecution Policy.  

30.  Lastly, Ms Wong had already concluded that there was no reasonable prospect of conviction, it was prudent to take over and consider further evidence before a final decision whether to proceed. 

No proper delegation—no personal approval by SJ

31.  Mr Bell, SC, pointed out that the delegation of the 1^st decision was just a handwritten sentence by the DPP on the file note of Ms Lily Wong dated 24 September 2012[28]. Mr Bell argued that the sentence—this case has been delegated to me as DPP—was not capable of amounting to personal approval and/or delegation of specific authority. 

32.  Section 14(1) of the Magistrates Ordinance, Cap 227, empowers the SJ to intervene at any stage of a private prosecution. 

33.  Under s 7 of the Legal Officers Ordinance, Cap 87, the SJ may authorise any legal officer to exercise any of the rights and duties of the SJ.  The section is silent as to the mode of authorisation.  

34.  In more general terms, s 43(1) of the Interpretation and General Clauses Ordinance, Cap 1, reinforces this power of delegation.  This subsection provides that ‘Where any Ordinance confers powers or imposes duties upon a specified public officer, such public officer may delegate any other public officer or the person at the time being holding any office designated by him to exercise such powers or perform such duties on his behalf…” 

35.  It is true that code 11.7 of the Prosecution Policy states that a private prosecution will not be taken over unless it is approved personally by the SJ.  In my view, this code cannot be read as limiting the power of delegation under the two sections above. 

36.  A short answer to this issue is s 43(3), Cap 1, which provides that:

“Where any Ordinance confers any power or imposes any duty upon a specified public officer and such power is exercised or such duty is performed by any other public officer, the specified public officer shall, unless the contrary is proved, be deemed to have delegated the latter public officer under subsection (1) to exercise the power or perform the duty.”

37.  The SJ had the power to intervene under s 14(1) of Cap 227.  He had the power to delegate his duties to any legal officer under Cap 87 and Cap 1. The DPP occupied a public office responsible for all criminal prosecutions.  By a letter dated 10 October 2012, he informed the Principal Magistrate that he was so delegated to take over the private prosecution.[29]  In my view, in the absence of evidence to the contrary, the SJ must be deemed to have delegated the power to intervene the private prosecution to the DPP.  

38.  Mr Bell further argued that in agency law, any claim of authority could not come from the agent himself.  He cited several authorities on this aspect[30].  I only need to refer to the case of R (Bloggs 61) v Secretary of State for the Home Department.  

39.  The claimant in that case pleaded guilty to conspiracy to supply cannabis resin in 2000.  He was sentenced to 7 years imprisonment.  He assisted the investigation and gave evidence leading to the conviction of a co-defendant.  He alleged that the police told him that he would remain in the protected witness unit for the whole term of his imprisonment.  In 2002, the Prison Service reviewed his status and decided to return him to the general prison population.  His judicial review of this decision was dismissed.  The judge held that the police representation did not create a legitimate expectation that the claimant would remain in the protected witness unit for the whole of his imprisonment term.  The Court of Appeal dismissed his appeal holding, inter alia, that the police had no actual or ostensible authority to bind the Prison Service.  The claimant could not rely on the principle of legitimate expectation to bind the Prison Service even if he did not know that the police had no authority, actual or ostensible, to speak for the Prison Service[31].  

40.  The Court of Appeal in that case reiterated the warning of the House of Lords that ‘public law has already absorbed whatever is useful from the moral values which underlie the private law concept of estoppel and the time has come for it to stand on its own two feet’[32].

41.  In my view, an officer of a government department or a public body may bind the latter only if he acts on actual or ostensible authority.  

42.  Bearing this in mind, this court has to decide whether the DPP had actual or ostensible authority to take over the private prosecution.  That is a matter of inference from the evidence as follows:

a  The SJ has power to delegate his duties in law.  There is no requirement as to the form of delegation. 

b  There was a sentence in the note of Ms Lily Wong dated 24 September 2012 by which the DPP revealed that he had delegation of authority by the SJ. 

c  The DPP’s letter dated 10 October 2012 to the Principal Magistrate acknowledging delegation by the SJ. 

d  It was not in dispute that the SJ was in conflict of interest being counsel for the 1^st interested party in HCA 1529/2011. 

e  The DPP is the responsible officer for all criminal prosecutions. 

43.  The only reasonable inference is that the DPP had at least ostensible authority, if not actual, to take over the private prosecution.  The DPP’s decision was as good as that of the SJ. 

No explanation for failure to follow Prosecution Policy

44.  Mr Bell argued that the DPP failed to explain the departure from the Prosecution Policy rendering the 1^st decision perverse.  

45.  From the analysis above, I do not accept there was any problem in law or in fact leading to the 1^st decision.  I reject this ground. 

46.  Mr Huggins argued that once this court ruled that the 1^st decision was lawful, the private prosecution was taken over and became a public prosecution. It was in accordance with the Prosecution Policy for the DPP to apply the ‘reasonable prospect of conviction’ test (‘RPC’) in deciding whether to discontinue.  

47.  This factual background was different from that of Gujra.  In that case, the Director of Public Prosecution of the United Kingdom (UKDPP) applied the RPC to private prosecution before taking over with a view to discontinue.  Mr Huggins argued that this would be sufficient to dispose of the judicial review. 

48.  It is clear from the legal advice of Ms Lily Wong dated 7 September 2012 that she applied the RPC and concluded that there was insufficient evidence to charge the interested parties with pervert the course of justice.  However, in her later note to the SJ dated 24 September 2012 she recommended taking over and consider further evidence before making the final decision.  It is all too obvious that the private prosecution was taken over with a view to discontinue unless further evidence pointed otherwise.  

49.  Attractive though Mr Huggins’ argument may be, I do not agree it can dispose of the judicial review at this stage.  I therefore proceed to consider the challenge against the 2^nd decision. 

The grounds against the 2^nd decision

50.  Firstly, Mr Bell submitted that the adoption of RPC constituted an impermissible and unlawful emasculation of the common law right to private prosecution. (Common Law Right Issue).  It also constituted unjustified interference to the right of access to the courts enshrined in Article 35 of the Basic Law. (Basic Law Right Issue) 

51.  Mr Huggins argued that the right to bring private prosecution was not absolute.  It was subject to Article 63 of the Basic Law by which the DoJ was empowered to control criminal prosecutions free from any interference.  It was also desirable and rational to have a uniform test for both private and public prosecution. 

Common Law Right Issue

52.  In Hong Kong, the right to conduct private prosecution is recognised under s 14(1) of the Magistrates’ Ordinance.  This right is similarly recognised under s 6(1) of POA[33].  Section 14(1) provides that:

“A complainant or informant who is not acting or deemed to act on behalf of the Secretary for Justice may if he so wishes and without any prior leave conduct in person or by counsel on his behalf the prosecution of the offence to which the complaint or information related but the Secretary for Justice may at any stage of the proceedings before the magistrate intervene and assume the conduct of the proceedings…” (my emphasis)

53.  This section specifically preserves the power to intervene by the SJ.  It is similar to s 6(2) of the POA.[34]

54.  The magistrate courts in Hong Kong adopt the prima facie evidence test (PFE) when considering whether to issue a summons for private prosecution[35].  For public prosecutions, the DPP adopts the reasonable prospect of conviction test (RPC).  

55.  Mr Bell submitted that the Crown Prosecution Services (CPS) headed by the UKDPP was independent[36].  Section 6(2) of the Prosecution of Offences Act 1985 (POA) limited the common law right of private prosecution[37]. The UKDPP had the independent power to take over and discontinue proceedings.  Further, the legislative intent of POA was to eliminate the inconsistent approach in initiating and conducting prosecutions.  It was in this context that the majority in Gujra discussed whether the UKDPP emasculated the right to bring a private prosecution in adopting the RPC.  Whether the legislative intent of POA would be frustrated. 

56.  Whereas in the present judicial review, this court was not concerned with the interpretation of any legislative intent.  Mr Bell pointed out that in Hong Kong the DPP worked under the SJ and remained a delegate.  

57.  Given the different background above, Mr Bell urged this court to adopt the reasoning of the minority in Gujra as follows:

a  Private prosecution was a safeguard against the feeling of injustice when public authorities decided not to prosecute. 

b  There was no pressing need to assimilate the two tests—PFE and RPC. 

58.  Mr Bell argued that in adopting the RPC in the 2^nd decision, the DPP unlawfully emasculated the common law right of private prosecution. 

59.  Mr Huggins emphasized that the right to bring private prosecution was not absolute.  Prior to a trial, the DoJ was empowered to discontinue prosecution if it was not in the public interest.  At the pre-trial stage, courts had no role in the protection against unjustified prosecution.  It was rational to have a uniform test for both kinds of prosecutions. 

60.  Mr Huggins urged this court to adopt the majority view in Gujra, in particular, the reasoning of Lord Neuberger:

a  It was oppressive on potential defendants to face criminal proceedings unless there was a good chance of securing a conviction.

b  Court time should not be taken up dealing with speculative prosecutions.

c  Public fund should be devoted to cases likely to succeed.

d  A low conviction rate might undermine public confidence in the criminal justice system.

Is the DPP independent?

61.  The opening paragraph of the Prosecution Policy—‘The Independence of the Department of Justice’—states that:

“The Department of Justice is responsible for the conduct of criminal proceedings in Hong Kong. In the discharge of that function the Department enjoys an independence which is constitutionally guaranteed. Article 63 of the Basic Law of Hong Kong stipulates that the Department ‘shall control criminal prosecutions, free from any interference.’ That the notion of prosecutorial independence enjoys an entrenched status enables prosecutors to discharge their duties to the public within secure parameters. Prosecutors act independently without the fear of political interference or improper or undue influence. At the same time, the Secretary for Justice is accountable for their decisions and actions.”

62.  Article 63 of the Basic Law is the bulwark of prosecutorial independence.  The protection applies to the department not a person.  In my view, it applies to the SJ as well as to the DPP and other prosecutors. I agree with the opinion of Mr Granville Cross, the former DPP in this aspect.  In his paper to the Legislative Council 20 June 2011, Mr Cross reiterated that:

“It is logical for the DPP, as a law officer of the department, and a career prosecutor, to discharge the prosecution functions of the department, and to do so independently of the SJ, who, as a political appointee, is a member of the government and answerable to the Chief Executive.”[38]

63.  This value is emphasised throughout the Prosecution Policy.  It is put succinctly in these few words—‘In the discharge of the prosecution function the prosecutor is as independent as the judge.’ [39]

64.  The DPP is under the SJ in the administration hierarchy, however, he is in reality responsible for all criminal prosecutions.  As the head of the Prosecutions Division, he must be the champion of this value.  There is no reason to doubt his independence.  In his paper to the Legislative Council, Mr Cross, had not doubted the independence of the DPP in the existing hierarchy but opined that an independent DPP would be ‘better for the appearance of justice’. 

65.  In England, there is an independent Crown Prosecution Services.  It is not under a government department headed by the Attorney General as the DoJ headed by the SJ in Hong Kong.  However, under s 2 of the POA, the UKDPP is appointed by the Attorney General.  The remuneration of the UKDPP is determined by the Attorney General.  Under s 3 of the POA, the UKDPP discharges his functions under the superintendence of the Attorney General.  

66.  I see little difference in prosecutorial independence between the UKDPP and the DPP of Hong Kong.  In my view, the distinction put forward by Mr Bell to justify adopting the minority view in Gujra is misconceived.  

The Gujra case

67.  In August 2010, Mr Gujra brought a private prosecution against three men for common assault and abusive behaviour.  On 16 November 2010, the UKDPP, through the Crown Prosecution Services, took over and discontinued the proceedings.  Mr Gujra applied for judicial review arguing that it was wrong for the UKDPP to apply RPC.  It was the policy of the Crown Prosecution Services since 23 June 2009 for all private prosecutions.  The Divisional Court dismissed the judicial review.  Mr Gujra appealed arguing that the policy adopted by the UKDPP was unlawful because it improperly restricts the statutory right of a citizen to bring a private prosecution.  The Supreme Court dismissed the appeal by a majority of 3:2.  

68.  In England, the right to initiate a private prosecution is recognised under s 6(1) of the POA.  The UKDPP has the power to take over under s 6(2) of the POA.  In the past, in deciding whether to take over and discontinue a private prosecution, the UKDPP asked himself whether there was clearly no case to answer for the defendant[40]. However, since 23 June 2009, the UKDPP changed his policy.  He adopted the RPC as an evidential criterion.  If a private prosecution failed the RPC, he would take over and discontinue the proceedings.

The majority view in Gujra

69.  Lord Wilson held that the policy and object of s 6 POA was not frustrated even for the UKDPP to adopt the RPC.  The RPC was actually the recommendation of the Royal Commission in 1981 for all prosecutions.  There was no limit to the discretion of UKDPP under s 6(2) of the POA in taking over a private prosecution.  A prosecution lacking a reasonable prospect of success drew inappropriately on court resources.  If the ‘no case to answer test’ was applied to a private prosecution, a person might be the defendant in a private prosecution despite a public prosecution would not be justified.  

70.  His Lordship pointed out that the issue of emasculation of the right to bring a private prosecution, which the appellant (Mr Gujra) relied heavily, arose from the case of Ex P Duckenfield [41].  

71.  In that case, police officers who had been made defendants to private prosecutions for manslaughter and other offences in connection with the Hillsborough disaster applied for judicial review of the UKDPP's decision to decline to take over the prosecutions in order to discontinue them.  Applying his old policy, the UKDPP declined to conclude that there was clearly no case for the officers to answer[42]. 

72.  His Lordship cited the observation of Laws LJ at p 68 in Ex P Duckenfield:

“In truth, however, it could not be right for the DPP to apply across the board the same tests, in particular the ‘reasonable prospect of conviction’ test … in considering whether to take over and discontinue a private prosecution as the Code enjoins Crown Prosecutors to follow in deciding whether to institute or proceed with a prosecution themselves; the consequence would be that the DPP would stop a private prosecution merely on the ground that the case is not one which he would himself proceed with. But that, in my judgment, would amount to an emasculation of section 6(1) and itself be an unlawful policy; and in fairness [counsel for the officers] made it clear that he did not submit so much. The very premise of section 6(1) must be that some cases will go to trial which the DPP himself chooses not to prosecute.” (my emphasis)

73.  Lord Wilson disagreed.  His Lordship pointed out that private prosecutions were still frequently instituted.  The great majority survived the three current tests for intervention and discontinuance[43]; they proceeded as private prosecutions or, occasionally, as prosecutions which the UKDPP took over and continued.  His Lordship commented:

“If, as the last sentence suggests, it was the preliminary view of Laws LJ in relation to this unargued point that the effect of applying the reasonable prospect test would be to eliminate private prosecutions, he was, as will be apparent from what I have said above, much mistaken”

74.  Lord Neuberger agreed with Lord Wilson.  His Lordship held that the right to initiate a private prosecution remained virtually unlimited and those meeting the evidential and public interest tests would be allowed to continue.  It was desirable to have a consistent approach for all prosecutions.  His Lordship was mindful of cutting down individuals’ right of access to the courts, however, the right to conduct a private prosecution had always been subject to limitations.  

75.  Lord Kerr concurred adding that the right to bring a private prosecution had been modified by successive enactments.  It was not immutable.  Access to justice in the field of private prosecution was not denied by the change of policy.  The new policy might restrict private prosecutions but it was acceptable as a matter of law. 

The minority view in Gujra

76.  Lord Mance pointed out that the reasonable prospect test would emasculate the right to bring a private prosecution.  This right was an important safeguard against inertia or partiality of the public authorities.  It should not be rendered ineffective by the power to intervene under s 6(2) of the POA.  The private prosecutor was very likely to take a different view than the UKDPP as to where the public interest lay. There was no evidence of any actual problems or unfairness created by private prosecutions before the change of policy in June 2009.  Different tests for private and public prosecutions had existed for a long time.  They arose from the right to institute a private prosecution and of the right of access to the courts.  There was no urgent need to change the policy. 

77.  Lady Hale pointed out that different prosecutors might take different views.  The victim would be in the hands of the prosecutor who considered his case on paper only.  The realistic prospect of success test defined in the Code was difficult to apply[44]. The reasonable prosecutor had to ask himself what a reasonable court might do.  Judicial review of the prosecutor’s decision would not be a sufficient safeguard.  There could be violation of articles 3 & 8 of the European Convention of Human Rights[45]. 

Discussion

78.  The critical issue in Gujra was whether the change in prosecution policy emasculated the right to bring a private prosecution.  Since 23 June 2009, the UKDPP had shifted the evidential criterion from PFE to RPC for taking over of private prosecutions.  The exact policy was set out by Lord Wilson in paragraph 25 of his judgment.  The UKDPP directed all prosecutors of the CPS as follows:

“You should take over and continue with the prosecution if the papers clearly show that:

• the evidential sufficiency stage (equivalent to RPC) of the Full Code Test is met; and

• the public interest stage of the Full Code Test is met; and

• there is a particular need for the CPS to take over the prosecution …

A private prosecution should be taken over and stopped if, upon review of the case papers, either the evidential sufficiency stage or the public interest stage of the Full Code Test is not met.

However, even if the Full Code Test is met, it may be necessary to take over and stop the prosecution on behalf of the public where there is a particular need to do so, such as where the prosecution is likely to damage the interests of justice …

You should not take over a private prosecution if the papers clearly show that:

• the evidential sufficiency stage of the Full Code Test is met; and

• the public interest stage of the Full Code Test is met; and

• there is no particular need for the CPS to take over the prosecution (either to stop or continue with the prosecution).”

79.  In effect, the UKDPP applied the evidential sufficiency test (which is the same as reasonable prospect of conviction test) to each private prosecution which came to the notice of CPS.  If it failed the evidential sufficiency test, it would be taken over and discontinued.  In other words, those private prosecutions which only satisfied the “no case to answer” test prior to the change, would not be allowed to proceed. 

80.  The minority in Gujra held that this would substantially weaken the right to bring a private prosecution and was against the intention of s 6 of the POA. 

81.  In Hong Kong, the Prosecution Policy is distinctly different. Under Part 11 of the policy, the right to bring a private prosecution is recognised and the power to intervene by the SJ is emphasized.  The important part relevant to the present judicial review is code 11.6:

“In considering whether to take over a prosecution the following factors are relevant:

(a) whether the public interest will be advanced if the prosecution is taken over;

(b) the wishes of the parties;

(c) whether the prosecution will be taken over to be terminated. If so, regard will be had to whether:

i the proceedings are vexatious or oppressive;

ii there are reasonable prospects of success;

iii a decision already taken by the DoJ will be thwarted;

iv there is any duplication of proceedings involving the same incident;

v the DoJ should offer no evidence or enter a nolle prosequi;

(d) whether there will be a fair trial;

(e) the seriousness of the charge;

(f) whether the proceedings are contrary to public interest.” (my emphasis)

82.  According to code 11.6 (c), the DPP would only apply the RPC when considering taking over with a view to terminate the private prosecution[46]. The code was silent as to the evidential criterion, if any, for ‘other private prosecutions’[47]. It appeared from the Prosecution Policy that the DPP was less concerned with the quality of the evidence in ‘other private prosecutions’.  The DPP would leave them to the magistrates to ensure that there would be at least prima facie evidence before issuing summonses. 

83.  The statistics submitted by the respondent demonstrated this clearly.  From 1996—2000, there were 30 applications for private prosecutions allowed by the magistrates, about 65 summonses were issued.  From 2001 to 7 September 2013, there were 21 applications for private prosecutions allowed by the magistrates.  There were 24 applications refused or withdrawn.  A total of 41 summonses were issued.  Throughout these years, the DPP took over and discontinued only two private prosecutions.[48]

84.  The statistics does not show whether the bulk of ‘other private prosecutions’ satisfied PFE or RPC.  One fact is clear—intervention by the DPP was extremely rare.  There is no evidence that the DPP adopted the RPC across the board to restrict private prosecutions.  

85.  In Part 8 of the Prosecution Policy, the RPC is discussed:

“code 8.1: …The SJ does not support the proposition that a bare prima facie case is enough to justify a decision to prosecute. The proper test is whether there is a reasonable prospect of a conviction. …

code 8.2: A proper assessment of the evidence will take into account such matters as the availability, competence and credibility of witnesses and their likely impression on the court, as well as an evaluation of the admissibility of evidence implicating the accused. The prosecutor should also consider any defences which are plainly open to or have been indicated by the accused, and any other factors which could affect the prospect of a conviction. In a matter as vital as the liberty of the citizen the prosecutor will wish, in the event of uncertainty, to err on the side of caution.

86.  Under code 8.1, the RPC is applied when considering whether to initiate or to continue criminal proceedings.  There is a list of other factors that a prosecutor has to consider in evaluating the evidence in code 8.3 including voluntariness of a record of interview, reliability of witnesses, credibility of witnesses etc.  Code 8.4 requires the prosecutor to apply judgment, experience and common sense in the determination of what is the just course.  

87.  It is certainly not easy to apply the RPC, however, the difficulty raised by Lady Hale[49], would not occur in Hong Kong.  

88.  It is true that different prosecutors might take different views of a case.  This phenomenon would arise no matter the PFE or RPC is adopted.  The risk of error must be left to the professionalism and integrity of the DPP and his team. 

89.  In my view, there was no unjustified limitation on the right to bring a private prosecution in Hong Kong.  There was no attempt to assimilate the evidential criteria for private and public prosecutions.  The worries raised in the minority judgment of Gujra would not affect the integrity of the Prosecution Policy in Hong Kong.  

90.  When initiating public prosecutions, the DPP applied the RPC.  Mr Bell had no complaint about this.  However, he argued that after taking over a private prosecution, the DPP should continue adopting the PFE.  I find this argument illogical.  I agree with Mr Huggins that once a private prosecution is taken over, it becomes a public prosecution.  The DPP should apply the same evidential criterion for a public prosecution—RPC—even though it originates from a private prosecution.  This is consistent with code 8.1 of the Prosecution Policy that the RPC is applicable when considering the initiation or continuation of criminal proceedings. 

91.  The issue of legislative intent extensively discussed in Gujra does not arise in the present judicial review.  I conclude that the power to intervene under s 14(1) would not create unjustified restriction on the right to bring a private prosecution in Hong Kong. 

Basic law right issue

92.  Mr Bell argued that if RPC was applied, it emasculated the right to bring private prosecutions.  This infringed article 35 of the Basic

Law[50] in the sense that access to court was restricted.  Article 63 of the Basic Law[51] did not justify adopting RPC in private prosecutions.  SJ’s control of criminal prosecutions would not be affected by applying the PFE.  In taking over with a view to discontinue a private prosecution, the SJ usurped the functions of a court by applying RPC. 

93.  Mr Huggins pointed out that, according to the majority view in Gujra, the right of access to the courts was not restricted even applying RPC.  Alternatively, this right was not absolute.  In applying RPC, the SJ maintained a fair, consistent and uniform approach of prosecutions in Hong Kong.  It was a proportionate measure to achieve these aims. 

Is article 35 of the Basic Law infringed?

94.  As discussed above, the RPC was not applied across the board in Hong Kong.  Statistics from the respondent revealed that SJ rarely took over private prosecutions.  In Hong Kong, RPC only applies when the DPP took over with a view to terminate a private prosecution.  In reality, if the DPP decided to take over, those cases which only satisfied PFE would be discontinued.  I accept this approach limited the right to bring a private prosecution and restricted the right of access to the courts.  Would this infringe article 35? 

95.  In Ng Yat Chi and Max Share Ltd & Another, a vexatious litigant was prohibited from commencing any fresh legal proceedings, in respect of the same claim or subject matter, as in the previous proceedings.  In rejecting the argument that this order infringed BOR 10 and BL 35, Ribeiro PJ commented:

“…In relation to BL 35 and BOR 10, it has been established in the jurisprudence of the European Court of Human Rights in relation to the closely analogous right of access under art. 6(1) of the European Convention on Human Rights, that such right is by its nature not absolute, but may be subject to limitations. Such limitations are valid if they pursue a legitimate aim, are proportionate to that aim and are not such as to impair the very essence of the right.”[52]

96.  Again in a more recent case of Leung Chun Ying v Ho Chun Yan Albert[53], Ma CJ agreed that article 35 was not absolute citing Ng Yat Chi:

“In the context of the right of access to court, the European Court of Human Rights has said that the right is not an absolute one and any restrictions placed on it must be examined to see whether the essence of the right has been impaired.”

97.  In light of the above, the first question is whether the limitation to bring private prosecutions achieves a legitimate aim.  Under code 11.6 (c), in considering whether to take over a private prosecution with a view to terminate, the SJ/DPP would consider whether:

i the proceedings are vexatious or oppressive;

ii there are reasonable prospects of success;

iii a decision already taken by the DoJ will be thwarted;

iv there is any duplication of proceedings involving the same incident;

v the DoJ should offer no evidence or enter a nolle prosequi;

98.  On top of that, in considering whether to take over, the SJ/DPP also considers whether the public interest will be advanced by taking over; the wishes of the parties; whether there will be a fair trial; the seriousness of the charge and whether the proceedings are contrary to the public interest. 

99.  Broadly speaking, in taking over with a view to terminate a private prosecution, the SJ protects public interest and ensures a fair trial.  These must be legitimate aims. 

100.  The next question is whether the measure employed by the SJ/DPP is proportionate to those aims.  After taking over, there is a list of factors which need to be considered before termination of a case.  The SJ/DPP only terminate those cases which fail RPC.  In reality, there are other private prosecutions which the SJ/DPP never intervene or continue with the proceedings after taking over.  The limitation is very narrow and in my view proportionate to the legitimate aims.

101.  Mr Bell pointed out that the power of the magistrates to screen applications for private prosecutions and the SJ’s power to intervene would be sufficient to guard against abuse.  The application of RPC was more than necessary. 

102.  As set out above, the SJ/DPP considers a list of factors before deciding to take over and terminate.  Some of those factors are probably not known to the magistrate. Further, after taking over, the private prosecution becomes a public prosecution.  It is for the SJ to apply RPC in deciding whether to continue.  This is logical and consistent with code 8.1 of the Prosecution Policy. 

103.  Despite the above limitation, the majority of private prosecutions would proceed.  In my view, the right to bring a private prosecution, as well as the right of access to the courts, are preserved. 

Does article 63 justify adopting RPC?

104.  Article 63 grants the exclusive power to control criminal prosecutions to the Department of Justice.  This power is free from any interference. 

105.  The prosecutorial independence under Article 63 is not absolute.  The SJ/DPP must act within his constitutional power.  He must not act on political instruction, in bad faith or fettered by a rigid policy.  In RV v Director of Immigration, Hartmann J[54] reviewed a long line of authorities and concluded:

“I am bound therefore by the judgment of the Court of Appeal in Re C (Bankrupt) to recognise that art.63 of the Basic Law enshrines the independence of the Secretary for Justice to control criminal proceedings as he thinks best and that, in the exercise of that power, the Secretary is free of both political interference and “judicial encroachment”. 

But it seems to me that the judgment of the Court of Appeal recognises that today the power of the Secretary for Justice to control criminal prosecutions is a constitutional power.  It is a power bestowed by the Basic Law and defined by that Law.  As such, it must be exercised within constitutional limits.

…Put another way, the limits of the constitutional power are defined by the constitution itself.  Any definition of those limits must therefore require an interpretation of the Basic Law and that is a function of the courts.”[55]

106.  I entirely agree with Hartmann J.  His Lordship went on to stress that the SJ’s control of criminal prosecutions was amendable to judicial review.  However, it must be an exceptional circumstance that a court would hold that the SJ acted outside of his constitutional power:

“The prosecutorial independence of the Secretary is a linchpin of the rule of law. That is the way it has been prior to the Basic Law and the way it now remains. The exceptional circumstances of which I speak must be truly exceptional and must demonstrate that the Secretary has acted outside of his very broad powers…”[56]

107.  In controlling criminal prosecutions, the SJ/DPP may initiate criminal proceedings; stop them by entering nolle prosequi or offering no evidence; may intervene private prosecutions etc.  The SJ/DPP exercises these wide powers and discretion without political interference or judicial interference save and except when there is abuse of the courts’ process.  That is the spirit of Article 63[57].

108.  Mr Bell submitted that even adopting the PFE, the SJ remained in control of criminal prosecutions in Hong Kong.  

109.  In my judgment, the SJ/DPP has full discretion in deciding whether to apply PFE or RPC in the initiation and continuation of criminal proceedings.  The main justifications for adopting RPC are public interest and public fund.  Mr Michael Thomas, QC, the former Attorney General, succinctly emphasized this:

“…Even if there is evidence that tends to prove the necessary ingredients of an offence, a bare prima facie case is, generally speaking, not enough to warrant a prosecution. There must be a reasonable prospect of securing a conviction because it is not in the interests of public justice, nor indeed of the public purse, that weak, or borderline, cases should be prosecuted.”[58]

110.  In the present context, there is no evidence that the SJ/DPP was under any improper influence or bad faith in adopting the RPC.  I do not see any reason that this court should interfere.  It is within his constitutional power. 

111.  The next question arising is whether the adoption of RPC under Article 63 impaired the essence of the right of access to the courts enshrined in Article 35.  

112.  I have already analysed this issue under the section on Article 35, the same reasoning applies[59], I need not repeat.  In my view, even adopting the RPC, Article 63 is compatible with Article 35.  The right of access to the courts is preserved. 

No proper delegation—DPP had no power to make the 2^nd decision.

113.  I have dealt with the issue of delegation above in relation to the 1^st decision. Similar reasoning applies to the 2^nd decision.  

114.  There is one point I like to mention.  Mr Bell pointed out that s 15(1) of the Magistrates Ordinance—the power to enter nolle prosequi—was relevant.  He pointed out that the DPP indicated to the magistrate on 28 December 2012 that they would not prosecute the interested parties.  This was in effect offering no evidence.  However, the DPP chose to withdraw the summonses.  This showed that the 2^nd decision was actually a nolle prosequi in disguise. 

115.  Mr Bell argued that the power to enter nolle prosequi must be entered on the direction of the SJ according to code 17.1 of the Prosecution Policy.  It had not been delegated.  The delegation to DPP was therefore not valid. 

116.  In my view, the power to intervene a private prosecution originates from s 14(1) of the Magistrates Ordinance.  From the date of intervention, the SJ is deemed to be a party to the proceedings[60].  The SJ can exercise all the powers as a party to the proceedings which include withdrawal of the summonses, offering no evidence and entering nolle prosequi. 

117.  While there is no clear provision in the Magistrates Ordinance mentioning withdrawal of a summons, s 8(5) empowers a magistrate to cancel a summons ‘at any time before the person to whom a summons is directed has appeared to answer the complaint or information’.  The present case was exactly this situation.  The interested parties had not appeared to answer the summonses.  I agree with Mr Huggins that withdrawal is one of the methods for discontinuing the summonses.  The fact that the DPP used the term ‘discontinue’ or ‘withdrawal’ would not affect their intention not to prosecute.  In fact, Mr Siu Kai Yip, SPP, did inform the magistrate that there would not be any prosecution in future on 28 December 2012. 

118.  In the circumstances, I do not find s 15(1) relevant.  Besides, I have ruled that the delegation of authority to the DPP is valid.  The delegation must be understood to mean all the powers incidental to and connected with the handling of this private prosecution[61]. In my view, the DPP must have full authority to deal with all aspects of the private prosecution. 

Wednesbury Unreasonableness

119.  Mr Bell pointed out that there were procedural and/or substantive unreasonableness of the 1^st and 2^nd decision.  He argued that the decision not to prosecute was amenable to judicial review.[62]  He relied on the cumulative effect of five aspects as follows:

a) There was overwhelming evidence against the interested parties. 

b) The private prosecution does not depend essentially on the evidence of the applicant. 

c) There was no basis to say that there were issues about the applicant’s credibility and reliability. 

d) Failure to seek independent advice notwithstanding apparent bias. 

e) Failure to consult the applicant. 

120.  Mr Huggins submitted that courts should be slow to interfere with the decision of the DPP unless it was manifestly such that it could not be honestly and reasonably arrived at.  It was not for the court to substitute the DPP’s view with its own view.  He stressed that only in highly exceptional cases that the courts would disturb the decision of an independent prosecutor.[63]  

121.  I accept that the decision of the DPP is amendable to judicial review.  However, it should only be disturbed in highly exceptional cases.  In R (Corner House Research) v Serious Fraud Office, Lord Bingham explained:

“The reasons why the courts are very slow to interfere are well understood. They are, first, that the powers in question are entrusted to the officers identified, and no one else. No other authority may exercise these powers or make the judgments on which such exercise must depend. Secondly, the courts have recognised (as it was described in the cited passage from Matalulu v Director of Public Prosecutions)

“the polycentric character of official decision-making in such matters including policy and public interest considerations which are not susceptible of judicial review because it is within neither the constitutional function nor the practical competence of the courts to assess their merits.”

Thirdly, the powers are conferred in very broad and unprescriptive terms.”[64]

122.  Bearing this principle in mind, I now turn to the arguments. 

Overwhelming evidence against the interested parties and credibility of the applicant

123.  Mr Bell pointed out that the DPP paid no or insufficient consideration to the evidence against the interested parties.  He relied heavily on the judgment of To J in HCA 1529/2011.  In that case, To J commented that there was overwhelming contemporaneous documents signed by the 2^nd and 3^rd interested parties.  These documents proved their knowledge of the withdrawal of the Subject Shares which were delivered to the 1^st interested party. 

The judgment of To J — HCA 1529/2011

124.  In September 2011, the applicant commenced civil action (HCAL 1529/2011) against all interested parties for making a false report—that the applicant had stolen the Subject Shares—to CCB.  

125.  By then, the 1^st interested party had already taken out civil action (HCA 1479/2009) against the applicant, Koon, Chan Kwai Nam and others.  The 1^st interested party alleged that he was coerced to transfer 100 million Sino Union shares to Chan Kwai Nam.  These two cases were connected. 

126.  The 1^st interested party applied to strike out the claim in HCAL 1529/2011 under Order 18 rule 19[65]. He argued, inter alia, that since the two actions were connected, the applicant’s claim was premature as the issues in HCAL 1479/2009 had not yet been determined by a court.

127.  The application was dismissed by To J on 31/5/2012.  His Lordship concluded that the pleadings were supported by contemporaneous documents exhibited in the affidavit of the plaintiff (the applicant). 

128.  His Lordship stressed that the claim must be impossible to succeed before a court would strike it out.  There should not be a trial on affidavit.  Disputed facts would be resolved in favour of the party sought to be struck out.  His Lordship pointed out that in striking out actions, a court was concerned with the allegation of facts pleaded, not the evidence in support of the facts, which would be for the trial court[66].

129.  The 1^st interested party sought leave to appeal against this judgment.  He raised a new ground[67]— that the ‘incentive agreement’[68] alleged by the applicant made no commercial sense.  

130.  To J refused leave[69] holding that the new ground was not mentioned in the original striking out application.  His Lordship pointed out that the issues raised in this new ground were all factual issues for the trial court.  It was inappropriate to resolve them on affidavit evidence.  

131.  His Lordship further commented that the falsity about the misappropriation of the Subject Shares was supported by contemporaneous documents including withdrawal forms, stock withdrawal receipts and delivery orders etc, signed by the 2^nd and 3^rd interested parties[70].  Even if the plaintiff (the applicant) failed to prove the ‘Incentive Agreement’, he still had at least a strong prima facie case based on the documentary evidence[71]. 

132.  It is this comment that Mr Bell relied heavily to support his argument that there was overwhelming evidence against all interest parties.  

133.  It is obvious that To J relied on the facts pleaded to determine the striking out application.  His Lordship repeatedly stressed that any dispute of facts would be a matter for the trial court.  He also reiterated that in a striking out application, disputed facts would be resolved in favour of the party sought to be struck out, ie the applicant in the present judicial review. 

134.  Understandably, To J had no access to other evidence such as the witness statements of the interested parties, the transcript of the applicant’s interview by SFC and most importantly the finding of the SFC and the order to ban him from being a licensed person for 10 years. The latter evidence was pivotal in the decision of the DPP. 

The findings of SFC

135.  In her legal advice to CCB[72] dated 7 September 2012, Ms Lily Wong, SPP, pointed out that the SFC found the complaint by the 2^nd interested party, in relation to theft of the shares in his account, not substantiated[73].  However, the SFC prohibited the applicant from re-entering the industry for 10 years commencing from 17 April 2012.  The SFC announcement contained the following salient points:

a  The Executive Director of SFC opined that this was an appalling state of affairs. 

b  The investigation arose from a complaint over $65 million worth of Sino Union shares held in an account at Cheer Union. 

c  The applicant explained that the account was opened at the request of a third party in August 2007 and operated by the account holder and the third party’s associates. 

d  Despite Cheer Union records suggesting that these shares were withdrawn by and delivered to the account holder, the applicant claimed that the shares were delivered to the third party. 

e  The true position about the beneficial ownership of the account and the shares was entirely unsatisfactory and contrary to all relevant standards of conduct expected of licensed persons.

f  The applicant failed his duties to establish true customer identity and to keep proper records of transactions.

g  The applicant co-operated with the SFC and agreed not to challenge the disciplinary proceedings. 

136.  Ms Lily Wong, SPP concluded that the handling of the account of the 2^nd interested party was severely criticised by the SFC.  The applicant lost his credibility. 

137.  In my view, the comment in paragraph 135(c)—(f) is fatal to the applicant.  It cast grave doubt on the reliability of the documentary evidence mentioned by To J in HCAL 1529/2011. 

Witness statements of the interested parties

138.  In her legal advice to CCB[74] dated 7 September 2012, Ms Lily Wong, SPP, set out the salient points of the 2^nd interested party’s statements to CCB as follows:

a  He opened a security account in Cheer Union around August 2007.  He authorised Pun Tak Keung and Chan Chau Lan to operate the account. 

b  He signed some blank forms including stock withdrawal forms and ‘bought and sold notes’ given to him by the applicant. 

c  He deposited 49.5 million Sino Union shares in that account.  In May 2009, he found that 45.12 million Sino Union shares were missing. 

d  The ‘bought and sold notes’ indicated these shares were sold to Chan Kuok Keung on 13 June 2008. 

139.  Ms Lily Wong also set out the salient points of the 3^rd interested party’s statements to CCB as follows:

a  He opened a security account in Cheer Union in July 2007.  He authorised Pun Tak Keung and Chan Chau Lan to operate the account. 

b  In early 2009, he found 4.95 million Sino Union shares missing.  

c  The ‘bought and sold notes’ showed that the shares were transferred to Chan Kwai Nam. 

d  He recognised his signatures in the ‘bought and sold notes’ but could not recall the circumstances of signing them.  He recalled that the applicant had given him some documents to sign. 

140.  Ms Lily Wong also set out the salient points in the applicant’s statements to the CCB as follows:

a  He confirmed that the 2^nd and 3^rd interested parties had each opened a security account in Cheer Union in July/August 2007. 

b  Pun Tak Keung and Chan Chau Lan were authorised to operate the accounts respectively. 

c  In February and May 2008, a total of 45.12 million Sino Union shares were withdrawn from the 2^nd interested party’s account.  The shares were subsequently sold to Chan Kuok Keung. 

d  In May 2008, a total of 4.95 million Sino Union shares were withdrawn from the 3^rd interested party’s account.  The shares were subsequently sold to Chan Kwai Nam. 

e  Pun Tak Keung and Chan Chau Lan instructed the applicant to withdraw the shares with documents signed by the 2^nd and 3^rd interested parties. 

141.  Ms Lily Wong pointed out in her advice that Pun Tak Keung refused to cooperate with the CCB.  She however considered the privileged statement[75] given by Pun Tak Keung to SFC.  Pun Tak Keung said that he had no idea of the withdrawal of the shares from the account of the 2^nd interested party. 

142.  Ms Lily Wong also mentioned in her advice that Chan Chau Lan also refused to cooperate with the CCB.  In her statement to the SFC, Chan Chau Lan said that she knew nothing about the shares from the account of the 2^nd interested party[76].

Other factors

143.  Ms Lily Wong pointed out that the applicant well knew the allegation of theft against him given the civil actions[77], he only reported to CCB until December 2011.  

144.  Ms Lily Wong also pointed out that there was no written record about the withdrawal instruction from Pun Tak Keung.  There was no record of delivery of the account portfolio to the 2^nd, 3^rd interested party and Pun Tak Keung. 

145.  Ms Lily Wong also opined that given the ongoing criminal proceedings in HCCC 66/2010[78], coupled with the civil actions[79], the applicant had an obvious motive to serve in the private prosecution. 

Interview record of the applicant by the SFC—‘Incentive Agreement’

146.  After the private prosecution was taken over on 12 October 2012, Mr Siu Kai Yip, SPP, reviewed the interview record of the applicant by the SFC.  He pointed out the inconsistency as follows:

a  During the interview on 26 November 2009, the applicant said that the 1^st interested party agreed to transfer 250 million Sino Union shares to Koon as ‘consultancy fee’[80]. 

b  During another interview on 26 April 2010, the applicant said he did not know the exact nature of the above transfer.  It might be compensation to Koon[81].

147.  In the statement of claim dated 8 September 2011 of HCAL 1529/2011, the applicant described the above transfer as an ‘Incentive Agreement’[82] for the first time. 

148.  When the applicant reported to the CCB about the false allegation of theft on 12 April 2012, he also described the above transfer as ‘Incentive Agreement’[83].

149.  Whether there was an agreement to transfer 250 million Sino Union shares to Koon was important.  According to the applicant, the Subject Shares were part of these 250 million shares given to Koon by the 1^st interested party pursuant to that agreement.  Whether the applicant had allegedly stolen the Subject Shares hinged on the existence of the agreement and its nature.  Mr Siu Kai Yip, SPP, rightly stressed the inconsistent explanation of the applicant set out above. 

150.  Mr Bell criticised the DPP for failure to consider the comments of To J in HCAL 1529/2011 that there was strong prima facie documentary evidence.  

151.  The judgments of To J were handed down on 21 August 2012.  There is no evidence that the DPP was notified of those judgments.  In the summary of facts dated 7 September 2012 for the application of private summonses in the magistrate court, the applicant did not even mention those judgments.  It was until 16 October 2012 that the solicitor for the applicant mentioned about those judgments when they proposed the DPP to brief out the case for legal advice[84]. In my view, the DPP should not be criticised for not considering the judgments of To J.  The burden would be too onerous to require the DPP to keep tract of the civil actions between the parties. 

152.  In any event, a substantial part of the documentary evidence pointed out by To J was also mentioned in the witness statements of the 2^nd and 3^rd interested parties.  Besides, Pun Tak Keung and Chan Chau Lan contradicted the applicant in relation to withdrawing shares from the accounts.  Ms Lily Wong was well aware of the documentary evidence although those judgments were not drawn to her attention.  She must have considered the documentary evidence when giving her advice on 7 September 2012.  

153.  Her advice was endorsed by two senior officers, Mr David Leung, SADPP and Mr Zervos, DPP on 12 September 2012.  The decision not to prosecute was made known to the applicant on 13 September 2012. 

Failure to consult

154.  Mr Bell criticized the DPP for failure to interview/consult the applicant before finalizing the decision to discontinue the private prosecution. 

155.  As of 13 September 2012, the applicant was well aware of the position of the DPP.  On 12 October 2012 when the private prosecution was taken over, Mr Siu Kai Yip, SPP, had made it clear in court that the DPP would consider further evidence before making the final decision.  In fact counsel for the applicant, Mr Marash, SC, indicated that the applicant would provide all the papers and submissions in support of the private prosecution to the DPP[85].

156.  Subsequently, the applicant filed further documents consisting of four box files[86].  Mr Siu Kai Yip considered the further documents.  He also reviewed the evidence so far available and also the transcript of interview of the applicant by the SFC.  He concluded that the further information would not affect the original decision not to prosecute. 

157.  In sum, Mr Bell argued that, the failure to consider To J’s judgment and the failure to interview the applicant, had rendered the decision to discontinue unreasonable and unfair.  The decision should be quashed.  Mr Bell relied on several authorities.[87]  I like to discuss the principles set out in R (B) v DPP[88]. 

158.  In that case, the claimant gave a coherent and credible account of an assault in which part of his ear was bitten off.  He also identified the assailant.  However, he had a history of psychotic illness having paranoid beliefs and hallucinations.  At the trial of the assailant on a charge of wounding with intent, the prosecutor offered no evidence against the assailant.  The prosecutor relied on a medical report which concluded that the claimant’s mental condition might affect his perception and recollection of the incident.  The prosecutor concluded that the claimant could not be a reliable witness and there was no realistic prospect of  conviction.  The Queen’s Bench Division declared that the decision to terminate the prosecution was irrational and therefore unlawful.  

159.  In his judgment, Toulson LJ stressed that judicial review of a prosecutorial decision was available but was a highly exceptional remedy.  His Lordship agreed with the reasoning of Lord Bingham of Cornhill CJ in R v DPP, Ex p Manning:

“In most cases the decision will turn not on an analysis of the relevant legal principles but on the exercise of an informed judgment of how a case against a particular defendant, if brought, would be likely to fare in the context of a criminal trial (in a serious case such as this) before a jury. This exercise of judgment involves an assessment of the strength, by the end of the trial, of the evidence against the defendant and of the likely defences. It will often be impossible to stigmatise a judgment on such matters as wrong even if one disagrees with it. So the courts will not easily find that a decision not to prosecute is bad in law, on which basis alone the court is entitled to interfere. At the same time, the standard of review should not be set too high, since judicial review is the only means by which the citizen can seek redress against a decision not to prosecute and if the tests were too exacting an effective remedy would be denied.”[89]

160.  His Lordship held that in applying the “realistic prospect of conviction test”, a prosecutor should adopt a merits-based approach and ask himself whether, on the balance, the evidence was sufficient to merit a conviction taking into account what he knew about the defence case. 

161.  His Lordship opined that the prosecutor should not have applied a purely predictive approach based on past experience.  Had the prosecutor applied the merits-based approach, he would not conclude that it was more likely than not that the claimant’s evidence was the result of hallucinations.  The prosecutor should not solely rely on the medical report as the doctor was available for further clarification in the trial.  

162.  I respectfully agree with the approach suggested by Toulson LJ.  

163.  As analysed above, the DPP and his team had considered the evidence of the applicant, the documentary exhibits and the possible defence raised by the interested parties.  In a criminal trial, even if the defence is rejected, the burden is always on the prosecution to prove the offence beyond all reasonable doubt.  The credibility of the applicant is therefore of ultimate concern.  In my view, the finding of the SFC cast grave doubt on the credibility of the applicant who accepted it without appeal.  In fact, he had not offered any comment on the SFC finding in his correspondence with the DPP.  

164.  The situation must be assessed in light of the pending criminal trial in which the applicant was one of the defendants (HCCC 66/2010).  The allegation against the applicant by the 1^st interested party in HCCC 66/2010 was substantially related to the allegation against the 1^st interested party by the applicant in the private prosecution.  It would be most undesirable to interview the applicant again given this background. 

165.  In my judgment, the DPP had considered all relevant evidence.  I do not think that the decision to terminate the private prosecution was bad in law.  

Apparent bias

166.  Mr Bell argued that the SJ had acted for the 1^st interested party in the striking out action in HCAL 1529/2011.  There was apparent bias despite that he delegated the power to deal with the private prosecution to the DPP.  He pointed out that delegation would not dispel apparent bias as the delegate would be duty bound to act with the mandate given by the delegator.  He relied on the comment of Lord Kerr in The Belize Bank Limited v The Attorney General of Belize.[90] 

167.  In that case, the newly elected Belize government was suspicious about the former government using a fund of US$10 million to guarantee a loan which the Belize Bank had made to a private company.  The fund was paid by the Venezuela government to finance housing and sport complex projects in Belize.  The new Prime Minister, who was also the Minister for Finance, made public statements that he would bring to account those who had robbed the people of Belize.  The Central Bank of Belize subsequently issued a directive to the Belize Bank to return the fund.  The Belize Bank appealed.  An Appeal Board had to be constituted.  The Minister for Finance was obliged by law to appoint the lay members of the Appeal Board[91].  The Belize Bank (“the Bank”) challenged the appointments on the ground of apparent bias.  The Bank argued principally that the new Prime Minister, who was also the Minister for Finance, had made robust public statements criticising the diversion of the fund and created the appearance of bias. 

168.  The Privy Council dismissed the appeal by the Bank.  Their Lordships held that an informed and fair-minded observer would have no difficulty to conclude that the lay members of the Appeal Board would behave in a perfectly proper fashion.  Those statements by the new Prime Minister did not give rise to any risk that the lay members would be influenced[92].

169.  In the leading judgment which the majority agreed, Lord Kerr pointed out that the question to ask was—whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased. 

170.  His Lordship stressed that the notional observer must have full knowledge of the relevant facts necessary for him to make a dispassionate judgment.  The information should not be restricted to the material immediately in the public domain[93].  

171.  His Lordship pointed out that it was necessary for the informed observer to be aware of the following:

a  The appeal system from the Central Bank’s directives,

b  The lay members were required to take an oath,

c  The lay members could not outvote the chairman,

d  The lay members were professionals of integrity.

e  The lay members were recommended by the Financial Secretary who was a civil servant with no political allegiance.  There was no evidence that he had consulted anyone about the recommendations. 

f  The Chief Justice of Belize appointed the chairman of the Appeal Board.  It had nothing to do with the Minister for Finance[94].

172.  It was argued by the Bank that the Minister for Finance should have delegated the power of appointing the lay members to another official.  This would avoid apparent bias. In rejecting this argument, Lord Kerr made the following comment which Mr Bell relied:

“…If appointment by the minister created the appearance of bias, why should appointment by his specially chosen delegate not do so also? But the circumstance that the minister was, in effect, statutorily obliged to make the appointment and could not insulate his decision from the charge of apparent bias by delegating that duty must inform the consideration of the fair minded observer as to whether there was an appearance of bias. ”[95]

173.  His Lordship pointed out that it was necessary first to consider the circumstances of the appointment, and then whether the public comments by the Prime Minister/Minister for Finance would create a risk of bias in the Appeal Board.

174.  His Lordship analysed several authorities[96] on the circumstances of appointment to demonstrate that the finding of apparent bias was fact sensitive.  I venture to recap the salient points as follows:

a  In determining whether a body could be considered ‘independent’, the court had to consider the manner of appointment, the duration of the appointment, the existence of guarantees against outside pressures and whether the body presented an appearance of independence.[97]

b  The fact that members of Boards of Visitors were appointed by the Home Secretary, who was himself responsible for the administration of prisons, did not establish that the members were not independent of the executive; to hold otherwise would mean that judges appointed by or on the advice of a Minister having responsibilities in the field of the administration of the courts were also not independent.[98] 

c  It would be wrong to say that where a minister had the power of appointment to a Board, the appearance of bias could only be avoided by the engagement of outside agencies to conduct the appointment exercise.  The more important aspect was the principles and procedures based on which the appointment was made [99]. 

d  There should not be anything which suggested that the appointees were constrained to act other than in accordance with their oath[100].

175.  His Lordship concluded that all the evidence pointed to the conclusion that the two lay members were not mere ciphers of the Minister for Finance.  They would act properly.  

176.  His Lordship went on to consider the public comments by the Prime Minister/Minister for Finance.  He concluded that those statements did not cast adverse comment on the Bank.  It would not give rise to the risk that the lay members would behave improperly. 

177.  Bearing the approach of the Belize Bank case in mind, I turn to consider the delegation in the present case. 

Facts for assessing apparent bias

178.  It is important first to revisit the basis of the striking out action in HCAL 1529/2011.  The 1^st interested party was represented by the SJ who argued, inter alia, that the applicant’s claim was premature.  The claim was closely connected with HCAL 1479/2009, it should be deferred until after the issues in HCAL 1479/2009 were determined by a court.  The SJ never touched upon the merits of both cases nor did he comment on the integrity of the applicant and any interested parties.  

179.  Under s 14(1), Magistrates Ordinance, only the SJ has the power to intervene private prosecutions.  If the SJ is in conflict, only he can delegate this power to another officer.  

180.  Even if the case is briefed out to a counsel in private practice, the ultimate decision would still be that of the SJ.  It is impossible for the SJ to insulate from the charge of apparent bias. 

181.  The DPP is the officer responsible for all criminal prosecutions.  His decision is free from interference under Art 63 of the Basic Law.  The Prosecution Policy stresses repeatedly the independent role of a public prosecutor.  

182.  There is no criticism on the integrity of the SJ and the DPP.  There is no reason to doubt the independent role of the DPP.  

183.  The decision not to prosecute the interested parties was made on 7 September 2012 by Ms Lily Wong, SPP.  It was endorsed by a senior officer and subsequently the DPP on 12 September 2012.  After the taking over on 12 October 2012, the evidence was reviewed by Mr Siu Kai Yip, SPP.  His advice to terminate the private prosecution was again endorsed by a senior officer and the DPP.  The decision not to prosecute was the advice of several prosecutors, not the decision of the DPP alone. 

184.  The chronology of events in paragraph 183 leads to another relevant aspect.  It was discussed in the case of Deacons v White[101]. 

185.  Suffice it just to mention the basic facts in that case. The plaintiff alleged breach of a confidentiality agreement.  Deputy Judge Poon[102], the trial judge, made two interlocutory orders around March 2003 in relation to discovery.  Deputy Judge Poon later discovered that his friend was a salaried partner of the plaintiff.  This was a mistake as the friend was actually a capital partner.  Later in early June 2003, Deputy Judge Poon acceded to the request of all parties and recused himself.  The 3^rd & 4^th defendants then applied to set aside the two interlocutory orders on the basis that there was reasonable apprehension of bias.  The Court of Appeal refused leave. 

186.  The Court of Final Appeal refused leave holding that the test for reasonable apprehension of bias was well settled.  There was no question of great general or public importance.  

187.  In their appeal to the Court of Final Appeal, the 3^rd & 4^th defendants disputed whether Deputy Judge Poon was not aware of the actual status of his friend at the time of making the interlocutory orders.  Ribeiro PJ pointed out the correct approach in this situation:

“ The importance of the judge’s knowledge of a key fact to the existence of any apparent bias was acknowledged in Locabail (UK) Ltd v Bayfield Properties Ltd (above, at 477) :-

“When applying the test of real danger or possibility (as opposed to the test of automatic disqualification under the Dimes case, 3 HL Cas 759 and Ex parte Pinochet (No 2) [2000] 1 AC 119) it will very often be appropriate to inquire whether the judge knew of the matter relied on as appearing to undermine his impartiality, because if it is shown that he did not know of it the danger of its having influenced his judgment is eliminated and the appearance of possible bias is dispelled.  As the Court of Appeal of New Zealand observed in Auckland Casino Ltd v Casino Control Authority [1995] 1 NZLR 142, 148, if the judge were ignorant of the allegedly disqualifying interest: ‘there would be no real danger of bias, as no one could suppose that the judge could be unconsciously affected by that of which he knew nothing ...”

 In the Medicaments case, the proper approach, applying the reasonable apprehension of bias test to such contested questions of fact, especially questions relating to the state of the judge’s knowledge, was explained as follows (at §86) :-

“The material circumstances will include any explanation given by the judge under review as to his knowledge or appreciation of those circumstances. Where that explanation is accepted by the applicant for review it can be treated as accurate. Where it is not accepted, it becomes one further matter to be considered from the viewpoint of the fair-minded observer. The court does not have to rule whether the explanation should be accepted or rejected. Rather it has to decide whether or not the fair-minded observer would consider that there was a real danger of bias notwithstanding the explanation advanced.” ”[103]

188.  In my view, this approach is relevant to the question whether there was apparent bias when the DPP decided to terminate the private prosecution. 

189.  As mentioned above, the decision not to prosecute the interested parties was made on 7 September 2012.  The DPP endorsed this decision on 12 September 2012.  The applicant was informed of the decision on 13 September 2012.  On 21 September 2012, the private summonses were issued, it was then decided to seek approval from the SJ to take over with a view to terminate.  The note was written by Ms Lily Wong, SPP, dated 24 September 2012.  Consequently, the SJ delegated the power to deal with the private prosecution on 10 October 2012 to the DPP.  

190.  Up till 24 September 2012, all the evidence showed that the DPP was not aware that the SJ was in conflict of interest.  By then, the DPP had already recommended not to prosecute the interested parties. 

191.  It is true that there was further consideration by Mr Siu Kai Yip, SPP.  The DPP made the final decision on 27 December 2012 to terminate the private prosecutions.  In the further legal advice, the reasons to terminate were substantially the same as what the DPP had endorsed on 12 September 2012.

192.  Given the facts set out in paragraphs 178—191 above, a fair-minded and informed observer would not conclude that there was apparent bias for the DPP to be delegated the power to handle the private prosecution. 

Conclusion

193.  The 1^st and 2^nd decision of the DPP to take over and terminate the private prosecution are lawful.  These decisions do not infringe Article 35 and 63 of the Basic Law.  I am also satisfied that the decisions are not unreasonable.  I dismiss the application for judicial review.  

194.  I make an order nisi that costs of this application be to the respondent.  This order shall become absolute 14 days from the date of this judgment unless any of the parties applies by summons for variation.