HKSAR v. LEE MING TEE AND ANOTHER

HCCC191/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO.191 OF 1999

--------------------

-----------------

R U L I N G

-----------------

1. This is an application by both defendants for a permanent stay of these proceedings. The 1st defendant, Lee Ming Tee and the 2nd defendant, Tse Chu Fai, Ronald are jointly charged with two counts of conspiracy to defraud, contrary to Common Law and four counts of publishing a false statement or account, contrary to s.21(1) of the Theft Ordinance.

2. The alleged criminal activities are all related to the Allied Group of Companies. The six counts in the re-amended indictment centre around four transactions. They are :

i) the placement of 320 million Allied Group Limited ("AGL") new shares announced on 23 July 1990;

ii) the placement of 128 million Allied Tung Wing Limited ("ATWL") new shares announced on 23 July 1990;

iii) the issue of new Allied Properties (HK) Limited ("APL") shares upon the conversion of its 1990 share warrants by 31 December 1990; and

iv) the top-up placement of 140 million APL new shares announced on 6 June 1991.

3. The two conspiracy counts alleged that the defendants conspired with other persons to defraud those named in the particulars of the indictment by prejudicing them in the exercise of their public duties dishonestly. The false accounting counts alleged that the defendants, by means of publishing a series of false accounting statements which they knew to be false or misleading in material particulars, represented to the companies' members and/or creditors about the funds and proceeds related to the share transactions referred to previously. The prosecution alleged that the criminal activities took place between June 1990 and June 1992.

4. The following is a brief chronology of the main events and I shall refer to the other relevant events in their proper context later in this judgment.

The grounds for the application

5. Learned senior counsel for the defendants argued that there cannot now be a fair trial because the defendants had suffered irreparable prejudice. Their arguments are based on three broad fronts. Firstly, the manner in which the Inspector conducted the inspection and his handling of the information he gathered from the defendants was an abuse of his powers under the Companies Ordinance. It was further submitted that the inspection was conducted in such a way that it had violated the defendants' rights under the Bill of Rights Ordinance and/or of their rights under Common Law. Secondly, the combined effect of the publicity of the companies inspection, the publication of the abridged report by the Financial Secretary, the police raid at the office of the Allied Group and the subsequent media coverage had been so prejudicial that a fair trial is no longer possible. In so far as these events were orchestrated by the authorities involved to bring about maximum publicity, this is an abuse of the authorities' power. Thirdly, by reasons of the delay in prosecuting the defendants, a fair trial is no longer possible.

6. I bear in mind that, in the light of well established legal principles, the power of the court to stay criminal proceedings should only be exercised in the most exceptional circumstances. The burden is on the defendants to make out their case. To justify a stay, there must be a fundamental defect which goes to the root of the case against the defendants and which is of such a nature that nothing that a trial judge can do in the conduct of a trial can relieve against its unfair consequences. In an appropriate case, a court should exercise its power to suppress abuses of the judicial process and safeguard a defendant from oppression or prejudice (see Silke V-P in R v. Tan Soon Gin [1992] 1 HKLR 149; R v. Horsferry Road Court ex parte Bennett [1994] 1 AC 42). The categories of abuse, by necessity, are never closed. Violation of a defendant's fundamental right in Common Law or a right which is recognised by the Bill of Rights Ordinance, must be, in my view, a most compelling ground to stay any criminal proceedings brought against a defendant in violation of such rights. It is with the above legal principles that I approach the issues raised in this application.

The Companies' investigation and the Steering Group

7. Mr Nicholas Allan was appointed by the Financial Secretary on 14 August 1992, pursuant to s.143(1)(c) of the Companies Ordinance, to investigate the Allied Group of Companies. He was directed, inter alia,

"... to obtain evidence in a form admissible in criminal or civil proceedings in respect of any matter which may constitute fraud or other offence against Hong Kong law that is identified in the course of the investigation."

According to this direction, the Financial Secretary envisaged the use of evidence gathered by the Inspector in future criminal proceedings.

8. Even before the appointment of Mr Allan, on 8 August 1992, the Financial Secretary had established a Steering Group to monitor the Inspector's progress once he is appointed. The composition of the Steering Group included the then Deputy Secretary for Monetary Affairs, representatives from the Attorney General's Chambers, the Securities and Futures Commission and the Monetary Affairs Branch. From August 1992 to October 1993, the Steering Group met with the Inspector on many occasions. From time to time, officers of the Commercial Crime Bureau and Crown Counsel responsible for prosecution from the Attorney General's Chambers also attended the meetings. Members of the Legco were informed of the Steering Group's existence as early as in October 1992. The stated purpose of the Steering Group was to monitor the progress of the inspection and for its members to meet regularly to receive and review progress reports from the Inspector, and consider with the Inspector the most cost effective and efficient way of proceeding with the inspection. In addition, it was also to ensure full value for money is achieved.

9. The 1st defendant was interviewed by the Inspector on four occasions between November and December 1992. The 2nd defendant was interviewed on seven occasions between December 1992 to January 1993. The interviews were conducted pursuant to the Inspector's powers under s.145 of the Companies Ordinance. Section 145(3A) provides :

"A person is not excused from answering a question put to him under this section by an Inspector on the ground that the answer might tend to incriminate him but, where such person claims, before answering the question, that the answer might tend to incriminate him, neither the question nor the answer shall be admissible in evidence against him in criminal proceedings other than proceedings in relation to a charge of perjury or proceedings for an offence under section 36 of the Crimes Ordinance (Cap.200) in respect of the answer.

(3AA)    If a claim of tendency to incriminate is not made in advance under subsection (3A), an answer given by a person to a question put to him in exercise of powers conferred by this section may be used in evidence against him."

10. The interviews were followed by requests from the Inspector to the defendants for written explanations and clarifications. Pursuant to the Inspector's requests, both defendants supplied to the Inspector a large body of material. It is not in dispute that material compulsorily acquired by the Inspector, including transcripts of his interviews of the defendants, documents and submission in writing on behalf of the defendants concerning the transactions under investigation were passed onto the prosecution via the Steering Group, or otherwise, at a later stage, pursuant to search warrants executed on the Inspector and on the Inspector's legal advisors.

11. The Steering Group's role was challenged by the 1st defendant together with a number of companies in the Allied Group before Kaplan J in June 1993. Their application was for leave to apply for judicial review on the basis that the Steering Group was ultra vires and/or there was an appearance of bias. The independence of the Inspector was strenuously defended. In opposing the application, the Inspector assured the court that none of the conclusions he has reached had been subject to the opinions of the members of the Steering Group nor has he consulted the Group individually, or as a group, in relation to his conclusions.

12. Mr Gerard McMahon, who was the representative of the SFC in the Steering Group, assured the court and the applicants by affidavit dated 2 June 1993 by saying :

"I can assure the applicants that the Inspector has not sought my opinion in relation to the conclusions he is reaching in respect of the inspection and nor have I offered any opinions in relation thereto. ... I have not sought to nor have I in any way improperly influenced the Inspector or prevented him from adopting an independent approach to his investigation."

13. In the light of the strongest assurances from the members of the Steering Group, as well as from the Inspector himself, Kaplan J concluded, at p.27 of his judgment :

"There is absolutely no evidence at all that anything improper has occurred involving the Inspector himself. There is no evidence whatsoever that members of the Steering Committee, either collectively or individually, have discussed with the Inspector any matters which related to the conclusion at which he has arrived. It is perfectly plain from the evidence placed before me that the Inspector has carried out his inspection, as one would expect, in a completely impartial and independent way ... ."

The applications for leave to apply for judicial review were refused.

14. In the present application, senior counsel for the applicants had kindly taken me through the relevant unused materials in this case. There are some startling revelations. In what appeared to be a covering memo from Mr McMahon attached to a draft document which subsequently became chapter 6 of the abridged report, I have counted no less than 58 written annotations. They all appear to me to be comments by Mr McMahon. The memo was dated February 1993 and it reads :

"I am enclosing my copy of the draft chapter on 5 February. You may find some of my written comments useful. Kindly return to me in due course."

The memo and the comments were written just some four months before Mr McMahon filed his affirmation assuring the court in the strongest possible terms of the Inspector's independence in opposition to the Allied Group's application. At the very least, Mr McMahon appeared to have a poor memory. This apparent forgetfulness appeared to have been a problem of the Inspector as well. The contents of the affidavit referred to above, in the light of the unused material now available before this court, are inaccurate at best. It also came to light that one Stephen Tisdall had redrafted a chapter concerning one of the share placings in the present indictment in March 1993. The document was passed on to the Inspector via a covering note from the Inspector's legal advisors.

15. Had Kaplan J been privy to such information, he might have arrived at a very different conclusion. However, it is not for me to speculate now with the benefit of hindsight aided by the unused material. Suffice it for me to say that such conduct demonstrates the extent to which the Inspector and some of the members of the Steering Group would go to in maintaining the appearance that they were independent of each other. There is strong evidence before this court that they were not.

Express or implied gateway

16. The defendants' case under the Companies' investigation point is founded upon the fact of the Inspector passing over compulsory acquired material to the prosecution and the police. Two consequences follow, it was said. The first is that it constituted an abuse of process. On the balance of probabilities, any subsequent criminal trial would be rendered unfair by reason of the ex parte Bennett principle. In addition to the former, it is also submitted that it is a violation of the defendants' rights under Articles 10 and 11 of the Hong Kong Bill of Rights Ordinance.

17. The prosecution responded by submitting that ss.142, 143, 145, 146 and 147 of the Ordinance when read together, requires the Financial Secretary and his agent, in this case, the Inspector, to investigate and report commercial wrongdoing. The Inspector is the agent of the Financial Secretary. If the Financial Secretary is required, by virtue of s.146(4), to inform the authorities of suspected criminal conduct, then his agent is entitled to inform the authorities without having to go through the Financial Secretary. The section reads :

"146(4) The inspector may at any time in the course of his investigation, without the necessity of making an interim report, inform the Financial Secretary of matters coming to his knowledge as a result of the investigation tending to show that an offence has been committed or that civil proceedings ought in the public interest to be brought by any body corporate."

18. Senior counsel for the prosecution submitted that in addition to the express authority under s.146(4), there is also implied authority for the Inspector to supply materials gathered to the prosecuting authorities. Public interest and expedience demand reasonable co-operation between Government bodies. Mr Aiken, SC, relied on the following passages in R v. Attorney General and Another, ex parte Allied Group Limited and Others [1993] HKPLR 404, at 411 where Pennlington JA said :

"There can be no dispute, and indeed it is not suggested, that where there is evidence uncovered pointing to possible criminal conduct those responsible for the initiation of criminal proceedings should be made aware of those facts as soon as possible."

Bokhary JA (as he then was) made this observation at p.417 :

"If possible criminal offences come to light in a course of the inspection, the proper authorities should be notified without delay. At the end of the inspection, one hopes for a usual report. If, happily, it exonerates people, then it should do so in terms which leave no lingering suspicion. And if, unhappily, it condemns people, it should be clear as to the basis for such condemnation."

19. The above passages, however, must be read in the context that the issue before the Court of Appeal in that case was whether the independence of the Inspector has been compromised. The court there was not concerned with whether the passing on of information to the prosecution authorities would violate the rights of those who were the subject of the inspection.

20. Independent of the express or implied gateway to pass on the information obtained, Mr Aiken, SC, relied on the case of R v. Sang [1980] AC 402 which, it was said, is authority for the proposition that if the material supplied is relevant to the criminal trial, the courts have no discretion to exclude such material so that no issue of abuse of power can rise.

21. The prosecution contends that there is yet a third way under which the information can be passed on to the police : officers from the Commercial Crime Bureau obtained the original documents by a search warrant which was executed after the inspection has been concluded. In so far as those documents and information were lawfully obtained by the police through a normal and legitimate process, the defendants cannot argue that any of their rights has been violated.

22. It appears to me that Mr Aiken, SC, has directed the thrust of his argument at the admissibility and the eventual use of the material at the trial of the defendants. This may be so if the case indeed proceeds to trial. But at this stage, my concern is whether there is any legal basis for the Inspector to supply the information gathered to the police and the prosecution authorities. It does not fall upon this court to make any ruling in respect of the admissibility of those information as yet. The gist of the prosecution submission is this : as long as the materials supplied by the Inspector are admissible at the trial, the legitimacy of the act and the decision of the Inspector is assured.

23. The better way to approach this problem is, in my view, to determine whether there is an express or implied gateway for the Inspector to pass on the information. If there is indeed such gateways, the Inspector could not have been ultra vires. If on the contrary, there is no such gateway, then it may support the defendants' submission that the Inspector had abused his power. The court will then have to consider what rights, if any, and to what extent had such rights been violated.

24. The Inspector derives his power under s.145 of the Companies Ordinance which powers are to enable him to gather information for the purpose of his investigation and to report to the Financial Secretary. Such powers do not extend to investigation of criminal offences or to gather admissible evidence for possible future judicial proceedings. It is a well established principle of law that a statutory power is only to be used for the purpose for it was conferred by the legislature and not for some collateral purpose. (Marcel v. Commissioner of Police for the Metropolis [1991] 2 WLR 1124.) Since s.145 removes the privilege against self-incrimination for the purpose of the Companies' inspection, the defendants were under a duty to answer the Inspector's questions and to provide explanation and documents to him when required. If the Inspector comes across any matter which tends to show that an offence has been committed, he should inform the Financial Secretary under s.146(4) of the Ordinance. There are no provisions in the Companies Ordinance under which the Inspector could pass on the information to anyone other than to the Financial Secretary. Therefore, he was not entitled, as he did in the present case, to pass the documents to the police and the prosecuting authorities.

25. The prosecution's argument of an express gateway does not bear scrutiny. There are no such provisions in the Ordinance. There are, however, provisions in s.152C for disclosure of materials acquired under ss.152A or 152B to a competent authority. But this does not include information and material obtained under s.145. Since there are express provisions under s.152C, the legislature therefore must have first considered providing such gateways but decided not to provide one for the information and material acquired compulsorily under s.145. This, in my view, supports the defendants' contention that there are no express gateway through which the Inspector could pass on information obtained under s.145 to a third party.

26. To reinforce my view, the Hong Kong Companies Ordinance is modeled on the UK Companies Act of 1948 and, subsequently on the 1985 Act. The UK law was amended in 1986 to provide a gateway for the Inspector's material acquired under the equivalent provision to s.145 (UK s.434). If such a gateway already existed expressly or by implication in the previous legislation, there would have been no need for the UK amendment in 1986.

27. The prosecution suggests that the amendment was a tidying up exercise in the UK to remove any existing doubts. Mr Aiken, SC, relies on the case of R v. Harris [1970] All ER 1252. With respect, Harris was not concerned with passing of information to a third party by a gateway. It was concerned with the admissibility at trial of compelled answers and is not directly in point. If Harris still represents the law in England, it would have been unnecessary for the Attorney General in UK to issue the guidance on 3 February 1998 on the use of compulsory acquired material. The effect of the guidance is that such material should not be used as part of the prosecution evidence or for the purpose of cross-examination. The prosecution also referred to London & County Securities v. Nicholson [1980] 3 All ER 361. This is a civil case and the facts there do not involve passing over of material to the prosecution or police.

28. I conclude on the issue of "express gateway" by finding that there is no such express provision in the Ordinance whereby the Inspector can pass compulsorily acquired information to any third party. The Inspector is, however, under a duty to inform the Financial Secretary and not anyone else under s.146(4) of matters tending to show that an offence has been committed. But this he has chosen not to do.

29. Moving on now to the issue of implied authority or gateway under the Ordinance, it is suggested that it cannot have been the intention of the Ordinance nor can it be in the public interest, that the prosecuting authority or police is denied access to the Inspector's information and must start its own investigation from afresh. It would result in an absurd duplication of efforts and funding, it is said.

30. The law is clear that gateways cannot be implied because statutory powers may only be used for the purposes for which they were expressly conferred. (See Marcel v. Commissioner of Police of the Metropolis & Others [1991] 2 WLR 1118.) If there be a gateway, it must be created by express words in the legislation. The authorities cited to me do not sanction the existence of implied gateways, however important the collateral purpose may be. (See also Morris v. Director of Services Fraud Office [1993] Ch.372.)

31. The prosecution also relied on the judgment of the Court of Appeal in R v. Attorney General and Another, ex parte Allied Group Limited and Others referred to previously. The passages quoted was to emphasize that the Inspector's suspicion about possible criminal conduct should be communicated to the prosecution authorities without delay. The Court of Appeal did not address the issue of expressed and/or implied gateways as they are now before this court. I think the dicta of Pennlington and Bokhary JJA should be understood in the context that it only allows for the Inspector to inform the authorities of suspected criminal conduct. It does not go so far as to permit or allow for the supply of compulsory obtained information by the Inspector to the prosecuting authorities or the police. It would then be for the authorities to decide whether to start their own investigation.

32. I do not find it to be an attractive proposition that public interest, whether in terms of financial savings or the public's right to be informed, could justify an Inspector acting ultra vires. I find that there is no implied gateway whether under the Companies Ordinance or in law to enable the Inspector to pass on the information to the police and the prosecuting authorities as he did in the present case.

33. The prosecution, relying on R v. Sang [1980] AC 402, contends that it matters not whether the Inspector was ultra vires or was abusing his power as long as the information supplied is relevant and admissible in the subsequent criminal proceedings. This appears to me to be the familiar argument that the end invariably justifies the means, however improper the means may be. Mr Aiken, SC, seems to have lost sight of the fact that, if the act of passing on the information is ultra vires or is an abuse of the Inspector's power, the proceedings might be stayed regardless whether the information is admissible at the subsequent trial. The point which Sang decided is that courts do not have a discretion to exclude evidence obtained as a result of the activities of an agent provocateur, provided they are relevant to the issues at the trial.

34. The present issue is different. The court is concerned here with information supplied to the Inspector by the defendants under compulsion. This type of evidence is usually presented to the court at the trial in the form of a confession statement. Sang decides that courts still have a discretion generally with regard to evidence obtained from a defendant after the commitment of the offence. I venture to pose this question : does it mean that if, at the trial, the evidence is ruled admissible by the judge, then the activities of the Inspector would not have been ultra vires? Or is the converse true? I do not think Mr Aiken, SC, has sufficient understanding of the point decided in Sang. Indeed, if the prosecution submission in this regard is correct, that is despite all the irregularities, the information provided to the Inspector are admissible as evidence at the trial because the court does not have a discretion to exclude the evidence, the result would be that there is nothing which the court can do at the trial to put right the previous irregularities. This cannot be correct. Sang does not assist the prosecution at all on this issue.

35. The third argument advanced by the prosecution to justify the Inspector's activities is that the material was obtained by the police by executing a search warrant after the conclusion of the Companies' inspection. The procedures were regular.

36. It is well documented in the unused material before this court that the information obtained by the Inspector was fed continuously to the prosecution authorities and the police. They included a vast amount of originals. The information sworn by the police to apply for the search warrants were based on materials which the Inspector had no power whether expressed or implied to pass over to the police. There was no independent police investigation. That being the case, the information, based upon which the search warrants were obtained, were misleading. It appears to me that the application for a warrant and the subsequent search and seizure of the material were no more than a cosmetic exercise by the police to comply with the best evidence rule that originals should be used where possible at a criminal trial. The police had been in possession of the material they eventually seized although the same were returned to the Inspector or his solicitors before the execution of the search warrants. The fact that they were seized again at the execution of the warrant, with full media coverage, has the hallmark of a dramatic show piece.

37. The argument of the prosecution on the regularity of the search warrants ignores the fact that the compelled testimonies and documents supplied by the 1st and 2nd defendants to the Inspector had been passed over to the police well before the execution of the search warrants by irregular means. I find no attraction in this argument.

38. It is my conclusion on this issue that not only was the Inspector ultra vires, the way in which he subsequently responded to the challenges by the 1st and 2nd defendants in the judicial review proceedings, and the orchestrated drama with the police clearly shows that he was in abuse of his powers.

Privilege against self-incrimination and derivative use immunity

39. The privilege against self-incrimination is recognised as a fundamental principle in all major common law jurisdictions. It is a prerequisite to the concept of a fair trial. The principle is stated by Lord Browne-Wilkinson in Re : Arrows (No.4) [1995] 2 AC 75, at p.95 as :

"One of the basic freedoms secured by English law is that (subject to any statutory provisions to the contrary) no-one can be forced to answer questions or produce documents which may incriminate him in subsequent criminal proceedings ... The principle has been carried over into the jurisprudence of all common law countries including the United States. It is one of the basic rights protected by the European Convention for the Protection of Human Rights and Fundamental Freedom."

40. This right is also recognised by the European Human Rights Court. In Saunders v. UK [1996] 23 EHRR 313, Commissioner Loucaides observes :

"The presumption of innocence would in fact be a meaningless protection if an accused person was compelled to give evidence against himself. Therefore the privilege against self-incrimination must be recognized as a sine qua non of the effectiveness of the protection in question. In my view, the privilege in question and the presumption of innocence are two sides of the same coin."

41. In some jurisdictions, this right is entrenched as a constitutional right whereas in other jurisdictions, this right is recognised and protected by evidential procedures during a criminal trial. This right can, however, be interfered by statutory provisions. In UK, for example, s.434 of the Companies Act 1985 which is the equivalent of s.145(3A) of the Hong Kong Ordinance overrides the privilege against self-incrimination and it was held not to be unfair to use evidence in criminal proceedings the transcripts of interviews with the Inspector. In Saunders v. UK (supra), the European Court, however, held that such a provision was in violation of the right to a fair trial.

42. In virtually all common law jurisdictions, there are examples of statutes providing in a variety of non-criminal contexts for an individual to be compelled to give oral testimony or to produce documentation. Those statutes usually arise from a particular public interest which requires the truth be discovered quickly. Sometimes the privilege is replaced with an immunity of varying degrees regarding the use of compulsorily acquired material. That is what is described as "use immunity" which is the strict prohibition of such materials being used in criminal proceedings.

43. There is also what is described as "derivative use immunity" whereby the prosecuting authorities or the police are stopped from using or profiting from material discovered as a result of enquiries arising out of compelled testimony.

44. The law appears to be settled regarding use immunity : answers given under compulsion cannot be used against a defendant in subsequent criminal proceedings. There is, however, no uniform judicial opinion about derivative use immunity.

45. In UK, this privilege is well-recognised in civil litigation. The privilege entitles a party to refuse to give discovery of documents which may incriminate him. (See Rank Film Distributors v. Video Information Centre [1982] AC 380.) In Istel v. Tully [1993] AC 45, the Crown Prosecution Service accepted that they would not seek to use any of the material disclosed in the civil proceedings in any way and would only utilize material which they had independently obtained.

46. Official Receiver v. Stern, the Times Law Reports, 19 January 2000, was a case which concerned the use of information obtained under compulsion as the basis for an application to disqualify a director. Objection was taken by the director to use the official report as the basis of the application on the ground that the report contained compulsorily obtained information and it would be unfair to use it. Scott V-C observed :

"It may be right that the use of compulsorily obtained evidence in criminal proceedings can be barred under community law without the need to examine whether the use of the evidence has made the hearing unfair."

The issue of derivative use immunity in criminal proceedings has yet to be decided in UK.

47. In the United States, the leading authority is Kastigar v. US 406 US 441, in which the Supreme Court of the United States considered the extent of the immunity required for it to be co-extensive with the privilege conferred by the Fifth Amendment to the constitution. Interrogation is either carried out subject to the Fifth Amendment or with the benefit of an immunity which is co-extensive with that protection. The opinion of the court was delivered by Powell J who spoke of the burden of proof on the prosecution :

"is to prove that the evidence it proposes to use is derived from a legitimate source wholly independent of compelled testimony."

48. In Australia, the privilege against self-incrimination does not enjoy constitutional protection and may be abrogated by statute. The case of Hamilton v. Oades [1988-89] 166 CLR 486 refers. In Sorby v. The Commonwealth [1983] 152 CLR 281, the High Court of Australia decided that the privilege :

"also protects the witness against the indirect use of information."

Some attempt was made by the prosecution to call into question the judgment of Murphy J in Sorby but this was not the principal judgment. The principal judgment was given by Gibbs CJ and it was agreed by the remainder of the court. Sorby was followed in Reid v. Howard [1993] 31 NWSLR 298.

49. In Canada, the position regarding derivative use immunity is unclear. The two principal authorities are decisions of the Supreme Court of Canada in Thomson Newspapers Limited v. Director of Investigation and Research [1990] 67 DLR 161 and R. v. S. (RJ) [1995] 121 DLR 589. These decisions recognized that the principle against self-incrimination is one of the fundamental principles of justice protected by the Canadian Charter of Rights. Thomson was concerned with the Restrictive Trade Practices Commission where the statute provided for the compulsory attendance of witnesses on the basis that their evidence would not be used against them in any criminal proceedings. A majority of the Supreme Court held that the provision did not violate the Canadian Charter of Rights.

50. R. v. S. (RJ) was concerned with two young offenders indicted for burglary who were to be tried separately. The prosecution subpoenaed one to give evidence at the trial of another. On an application to quash the subpoena, a majority of the Court held that it did not violate the Charter as s.5 of the Canada Evidence Act 1989 prohibited the use of the witnesses' evidence in other proceedings and a charter prohibited to use of a limited class of evidence derived from that testimony.

51. In South Africa, the leading authority is Ferreira v. Levin [1996] 1 BCLR 1 (CC) 1 which is a decision of the Constitutional Court. The case was in relation to a provision of the Companies Act of South Africa which was very similar to that in the UK Companies Act. That part of the provision which provided that the conscripted answers to a company Inspector could be used subsequently as evidence in criminal proceedings was declared invalid and unconstitutional.

52. In Saunders, the European Court of Human Rights did not appear to have considered the issue of derivative use immunity. It did, however, consider the direct use at trial of Mr Saunders' interviews with the Inspector but it was never called upon to decide whether any derivative use was contrary to Article 6.

53. The issue of derivative use immunity has not been decided in Hong Kong. It was briefly averted to in Fu Kin Chi, Willy v. The Secretary for Justice [1998] 1 HKLRD 271. The point was neither developed nor decided since the case was principally concerned with whether the privilege against self-incrimination had been abrogated by the Police Force Ordinance.

54. The compatibility issue with the Bill of Rights Ordinance was raised in the judicial review proceedings brought by the 2nd defendant in November 1992 before Jones J. The power of the Inspector was challenged by the 2nd defendant but the court held that the benefits of the Bill of Rights were not conferred on Mr Tse at that stage as he was not a "person charged". It was decided that Article 11 of the Bill of Rights was applicable only to persons who were charged or convicted with a criminal offence.

55. What is not in dispute in this case is that a huge amount of material had been passed to the prosecution and the police by the Inspector in the course of his investigation. They include answers given to the Inspector under compulsion and follow-up written explanations and clarifications in response to requests by the Inspector. It was never suggested by the prosecution that the police or the prosecution authorities did not make use of the materials supplied. It is not a case of inadvertance. On the contrary, it was a carefully considered action on the part of the Inspector despite an abundance of caution from his legal advisors and from the representative of the Attorney General's Chambers.

56. In the case of the 2nd defendant, he raised with the Inspector on 1 December 1992, his privilege regarding the use and derivative use of the answers he was about to give in the interview. The issue was raised again with the Inspector in the letter dated 4 December 1992 from the solicitors of the 2nd defendant :

"Our client reserves all his rights including his rights under the Hong Kong Bill of Rights Ordinance, in particular, his right to object to the use or the admissibility of his evidence or any derivative evidence arising from such examination, in any proceedings whether or not taken as a result of the Inspector's enquiry, as being contrary to, inter alia, the Hong Kong Bill of Rights Ordinance ..."

No assurances were given by the Inspector. Instead, the Inspector had passed all the relevant material to the police who had received and acted upon them. Mr Aiken, SC, suggested that at its worse the Inspector had, despite independent legal advice, made a mistake and it is nowhere near the degree of seriousness to c.ome within the extremely rare exception to the general rule established on facts in ex parte Bennett. The Inspector's conduct cannot amount to an affront to the integrity of the court and it does not shock the public conscience.

57. I have also been politely reminded by the prosecution that I should not venture to make new law. While I am thankful of this curt and gratuitous reminder, I am prepared to recognize that the privilege of derivative use immunity should be enjoyed by a person within these jurisdictions and this right is to be treated as an extension of his right to use immunity.

58. I am of the view that the proper approach to this issue is this : in Hong Kong, any person charged with a criminal offence has a right against self-incrimination. This right is recognised and protected by Article 11(1) which reads :

"Everyone charged with a criminal offence shall have the right to be presumed innocent until proved guilty according to law."

And Article 11(2)(g) provides that a person should :

"Not to be compelled to testify against himself or to confess guilt."

This latter right has been partially removed under s.145(3A) of the Companies Ordinance. A person's right against self-incrimination, in my view, can only be removed for the stated purpose of the legislation. Since the stated purpose of s.145(3A) is to facilitate the Inspector's enquiry, any suggestions that the answers could be used for any other purpose, or as in this case to facilitate police investigation, would be inconsistent with Article 11(2)(g) if a person is eventually charged with a criminal offence. It cannot be the intention of the legislature that s.145(3A) could circumvent the provisions of Article 11(2)(g) of the Bill of Rights Ordinance. The view which I have taken above would reinforce my earlier conclusion that there is no implied gateway for the Inspector to pass on the information to anyone other than to the Financial Secretary. Any kind of gateway would render Article 11(2)(g) nugatory. It is based on the same information that the defendants were subsequently arrested and charged. The activities of the Inspector is a blatant violation of the defendants' rights under Article 11(2)(g) of the Bill of Rights Ordinance. On this basis, I rule that the present proceeding against the defendants should be stayed.

59. If, however, this case goes to trial, I shall no doubt be hearing arguments concerning the admissibility of those evidence gathered by the police as a result of having been supplied the information gathered by the Inspector in the course of the inquiry.

Prejudicial publicity

60. Under this head, both defendants contend that there can no longer be a fair trial of the issues in this case because of the publication of highly prejudicial material concerning the defendants. In order to succeed the defendants must show, on a balance of probabilities, that there is a serious risk that a jury may be so tainted by prejudice as a result of the adverse publicity that a fair trial is no longer possible. An applicant, however, is not required to establish actual prejudice or bias on the part of the jury. The alleged adverse publicity takes three forms. They include publication of an abridged version of the Inspector's Report; the events transpired and reported by the media at a press conference held on 18 September 1993; the police raid; the subsequent media coverage of the defendants and the cumulative effect of these events. In addition, it is also contended the authorities had conducted themselves in such a way that it is a clear abuse of the defendant's rights to have a fair trial.

61. The factual basis of the complaint are these : an abridged version of the Inspector's report was published on 18 September 1993. The 688-page document was introduced to the public via a press conference presided by the then Financial Secretary, Mr Hamish Macleod and his Deputy Mr Tam Wing Bong. The contents of the report were widely publicized by the media in the days that followed. The abridged report remained on sale to the public until May of this year and it was only in response to this court's enquiry that steps were taken by the prosecution to withdraw them from sale and from the shelves of public libraries. In all, over 400 copies were sold. At the time of the publication and the press conference, police officers from the Commercial Crime Bureau conducted a massive raid lasting two days on the premises of the Allied Group of Companies. It was an event widely covered by the media.

62. The contents of the report, albeit in abridged form, touch directly on the issues to be tried in these proceedings. It contained the material and evidence gathered by the Inspector in the course of the investigation and his opinions about the activities which later formed the basis of the charges against the defendants. The Inspector also made reference to what the defendants said to him pursuant to his powers under section 145 of the Companies Ordinance. After making numerous adverse findings regarding the credibility and the activities of the defendants, the Inspector concluded in chapter 22 of the report by stating that as a result of the investigation, he was of the opinion that the activities of both defendants tend to show that criminal offences had been committed.

63. The publication of the Inspector's report at a time when criminal proceedings are contemplated appears to be an unprecedented move. Never before had reports of a similar nature been published before the conclusion of criminal proceedings against the parties who had been the subject of an investigation. The reasons behind such restraint seem to be clear : if the report contains adverse findings or comments against those who are likely to be charged with criminal offences, then publication of the report would have a highly prejudicial effect on the subsequent criminal proceedings.

64. This was indeed the advice the Inspector and the Steering Group received from the representative of the then Attorney General's Chambers. Based again on the unused material before me, the authenticity of which is not disputed by the prosecution, the issue of publication was discussed amongst the Inspector and the members of the Steering Group. Crown Counsel from the Attorney General's Chambers was unequivocal in expressing his concern that publication of the report may compromise future criminal proceedings. His repeated reminder had not been taken seriously.

65. Again it is apparent from the unused material that the Financial Secretary was labouring under pressure from certain members of the Legislative Council who demanded that the report should be made public. From an initial estimated expenditure of $30 million, the figure was revised upwards in December 1992 to $41 million. By September 1993 $46 million has been spent on the investigation and a number of Legislative Council members were eager to see the results. As the expenses of the investigation mounted, those concerned had to approach the Financial Subcommittee for additional funding. To put it simply, the Financial Secretary was under pressure to deliver at least some result of the investigation, failing which he had to face the prospects of no further monetary vote to finance the investigation. Looking at it from this aspect, the publication of the report was not without justification, at least in the minds of those who had to request for additional funds. In deciding to publish the abridged report, the authorities had assumed the risk of the possible prejudicial effect on the fairness of any subsequent criminal proceedings in court.

66. The final decision to publish the report was reached in a meeting on 31 August 1993. The representative from the Attorney General's Chambers also attended. The Secretary of Financial Services, Mr Cartland was recorded to have said :

"he hopes to get the attention the report deserves."

67. The publication was a high-profile media event. A press conference was held to introduce the report to the public. In the transcript of the press conference which is before this court, one of the reporters whom I believe to have possessed some legal knowledge, raised the following question :

"Do you think it would be prejudicial for anyone charged to get a fair trial in Hong Kong given the amount of publicity?"

The obvious possible legal repercussions had somehow eluded the Financial Secretary and his Deputy. The reporter clearly had a better appraisal of the legal implications than the two top government officials. Later at the same press conference, another reporter asked :

"Do you want us to read it, then summarize it in our newspaper? Do we have any special or absolute privilege for libel if we do that?"

It was not surprising that there was no answer to this question. Those who were present at the press conference were asked repeatedly by the Financial Secretary to read the report. No doubt many would have read it in the days to come.

68. A police raid was arranged to take place at about the same time of the publication. In the days between 15 to 19 September, the police mounted a massive raid at the office of the Allied Group of Companies. The raid received high profile and extensive media coverage. The public was shown news footage and photograph of police seizing a huge quantity of documents from the office.

69. The series of co-ordinated events must have created an indelible impression of guilt to those who had any form of exposure to the media.

70. The actual or potential prejudice complained of in this case is unique. It was not media generated as in the case of HKSAR v. Ip Kai Foon, Crim.App. Nos.138 and 139 of 1997 and the English case of R. v. West (1996) 2 Cr.App. Rep.374 where both cases involved what can be described as sensational reporting by the media. This case is concerned with an investigation report which was the product of an Investigator appointed by the Financial Secretary. It was published with the sanction of top government officials. The press conference must have confirmed the report's official status in the minds of those who were following the events.

71. Senior counsel for the prosecution tried to argue that the document, even in its abridged form, is a lengthy document which makes heavy reading. It would be of little or no interest at all to ordinary members of the public who would form the bulk of the members of a jury panel. The small number of copies sold would have meant that very few people would have read it and those who had read the report would have forgotten its contents with the passage of time. With these factors operating together, it was said, the effect of prejudicial publicity if any, however adverse, would be minimal.

72. Looking at the events in its proper context, the publication of the report, the press conference and the police raid were co-ordinated moves by the authorities calculated to achieve maximum publicity. Those involved included the Inspector, top government officials, prosecutors, the Steering Group and the police. It would be ironical now for the prosecution to argue that the carefully orchestrated objective of the authorities to bring about maximum adverse publicity has not been attained at the time or had since faded with the passage of time.

73. I note that there are newspapers in both languages making reference to the contents of the report as late as August 1998. Senior counsel for the prosecution argued that they are no more than factual reporting. In some newspapers, both Mr Lee and Mr Tse were described as fugitives of the law and were responsible for the falsified accounts of the Allied Group of Companies. If that be factual reporting, then as a matter of fact, the defendants had already been convicted by the Inspector and the subsequent media opinion. This must be prejudice in its worse form.

74. Mr Aiken, SC, further submitted that even if prejudicial material was reported by the media, it was nevertheless of the usual type which can be safely dealt with by instructions to the jury by the judge at the trial. He relied on the English Court of Appeal's decision in R v. West (1996) 2 Cr.App.Rep.374 in which the Lord Chief Justice said at page 385 regarding adverse pre-trial media coverage :

"... It is true that there were also reports which were adverse to the applicant, .... But, however lurid the reporting, there can scarcely ever have been a case more calculated to shock the public who were entitled to know the facts. The question raised on behalf of the defence is whether a fair trial could be held after such intensive publicity adverse to the accused. In our view it could. To hold otherwise would mean that if allegations of murder are sufficiently horrendous so as inevitably to shock the nation, the accused cannot be tried. That would be absurd. Moreover, providing the judge effectively warns the jury to act only on the evidence given in court, there is no reason to suppose that they would do otherwise."

His Lordship also made reference to his speech in ex parte The Telegraph PLC (1994) 98 Cr. App. R.91 at page 98 to what he said about the ability and integrity of jurors :

"... a court should credit the jury with the will and ability to abide by the judge's direction to decide the case only on the evidence before them. The court should also bear in mind that the staying power and detail of publicity, even in cases of notoriety, are limited and that the nature of a trial is to focus the jury's minds on the evidence put before them rather than on matters outside the courtroom."

Mr Aiken, SC, relied on both passages cited above and he also submitted that this is an appropriate case to enquire from the potential jurors whether if they have read the report or whether they had exposure to any of the media coverage previously on the subject. I have to consider these suggested solutions to the problems in the light of R. v. Andrews (UK Court of Appeal transcript 14 October 1998). I note the following observations of Roch LJ regarding the practice of questioning potential jurors to ascertain possible bias :

" In our opinion, the question of potential jurors whether orally or by use of a questionnaire in cases where there is no suggestion that potential juror may have an interest in the case, such as having lost money in transactions which form the basis of the trial, is to be avoided save in the most exceptional circumstances. There are two reasons for this. First the use of such questioning is of doubtful efficacy. As was cited with approval by Mason CJ and Toohey J in their joint judgment in Murphy v. The Queen [1989] 167 CLR 94 at page 103 :

'A challenge for cause based on partiality runs into an obvious difficulty : "It seems unlikely that a prejudiced juror would recognize his own personal prejudice, or, knowing it, would admit it.".'

Second, the use of such questions may produce the result which both sides and the court wish to avoid, namely it may bring to the attention of the juror or remind the juror of those matters which the parties and the court would wish the juror to disregard. The assumption which our law makes and which our law has to make is that jurors will be faithful to their oaths to return true verdict."

Later, he cited with approval a further passage in Murphy at page 291 :

"... In this era of rapid dissemination of news by the media, it would be na?ve to think that in the case of a crime involving considerable notoriety, it would be possible to select twelve jurors who had not heard anything about the case. Prior information about a case, and even the holding of a tentative opinion about it, does not make partial a juror sworn to render a true verdict according to the evidence...

The decision of what steps should be taken to avoid a real danger that jurors might be biased when there has been reporting of the case of which complaint is made on behalf of a defendant is for the judge...."

Perhaps the difficulties facing the prosecution on this issue can be summed up by what I think is a very cogent warning from the Prosecutor who attended at the Steering Group meeting on 25 February 1993.

"If publish, in front of jury no fair trial because of public prejudice, because Hong Kong is a small community and Allied Group is a well known company : jury commercially minded and well informed, thus any extensive publicity would cause prejudice to the jury."

His advice had fallen on deaf ears. His concern in the passage cited above is fully justified. I am of the view that any exercise of jury vetting is counter-productive. Even if such a course is taken at the trial, it would still leave the defendants at risk. On a broader front, the prosecution should not be permitted to invoke the exceptional remedies in Andrews where the prejudice is created by the authorities themselves. It was a deliberate violation of the defendants' rights to a fair trial in order to justify the expenses incurred in the inspection. I find that on the balance of probabilities; there can no longer be a fair trial of the issues in this case.

The delay point

75. I would turn now to the third ground of the defendants' application. Both defendants pursued this ground with equal vigor. It is submitted that there has been substantial and unreasonable delay on the part of the prosecution in bringing the defendants to trial. The 1st defendant has the additional complaint that by reason of the delay, his health has deteriorated to such extent that a fair trial of him is no longer possible.

76. The offences were alleged to have been committed between 1990 and 1991. Police investigation commenced in about late 1992. In December 1994, the Attorney General wrote to the Listing Committee of the Stock Exchange informing its members that criminal proceedings would be instituted against the defendants. The 1st defendant was, however, not arrested in Hong Kong until August 1998, almost six years after the initial police investigation. Throughout the period between 1992 and his arrest, the 1st defendant enjoyed unrestricted freedom of movement in and out of Hong Kong.

77. Events leading to the arrest of the 2nd defendant are slightly more complicated. A warrant was issued in Hong Kong in March 1997 when the 2nd defendant was in Australia. Another warrant was issued in New South Wales, Australia some two months later. The 2nd defendant, having waived his right to an extradition hearing, returned to Hong Kong on 26 August 1998. He was brought before a magistrate on 28 August. For both defendants, it was some eight years after the alleged criminal activities when they were charged.

78. It was based on these milestone dates that senior counsel for the defendants founded their argument. Two consequences, it was said, flow from this delay. It was a violation of the defendants' right to be tried under the Common Law, and also of Article 11(2)(c) of the Hong Kong Bill of Rights. The section in the article provides :

" (2) In the determination of any criminal charge against him, everyone shall be entitled to the following minimum guarantees, in full equality -

...

(c) to be tried without undue delay ..."

As a consequence of the delay, it was submitted that the defendants had suffered serious prejudice. With the passage of time, the defendants' recollection of the events has faded, documents had since been lost; key witnesses had since died or become unavailable and the defendants could no longer give proper instructions to challenge the prosecutions case or to conduct the defence efficiently.

79. The case of the 1st defendant is even more accentuated for he had suffered from cognitive impairment in respect of his memory, attention and ability to concentrate. A number of medical reports and expert medical evidence were called in support of this issue.

80. The leading English authority on permanent stay of proceedings on grounds of delay is in Attorney-General's Reference (No.1 of 1990) [1992] 95 Crim. App. Rep. 296. In Lord Lane's speech at page 302, he said :

" Stays imposed on the grounds of delay or for any other reason should only be employed in exceptional circumstances. If they were to become a matter of routine, it would be only a short time before the public, understandably, viewed the process with suspicion and mistrust. ...

In principle, therefore, even where the delay can be said to be justifiable, the imposition of a permanent stay should be the exception rather than the rule. Still more rare should be cases where a stay can properly be imposed in the absence of any fault on the part of the complainant or prosecution. Delay due merely to the complexity of the case or contributed to by the actions of the defendant himself should never be the foundation for a stay."

Further down at page 303 he said :

" In answer to the second question posed by the Attorney-General, no stay should be imposed unless the defendant shows on the balance of probabilities that owing to the delay he will suffer serious prejudice to the extent that no fair trial can be held : in other words, that the continuance of the prosecution amounts to a misuse of the process of the court. In assessing whether there is likely to be prejudice and if so whether it can properly be described as serious, the following matters should be borne in mind : first, the power of the judge at common law and under the Police and Criminal Evidence Act 1984 to regulate the admissibility of evidence; secondly, the trial process itself, which should ensure that all relevant factual issues arising from delay will be placed before the jury as part of the evidence for their consideration, together with the powers of the judge to give appropriate directions to the jury before they consider their verdict."

81. The above principles were adopted by the Privy Council in George Tan Soon-gin v. His Honour Judge Cameron and Another [1992] 2 HKLR 254. Lord Mustill, in giving the opinion of the Board said at page 266 :

"... Although the jurisdiction to stay a pending prosecution is undoubted, it is equally beyond doubt that the discretion to prevent a prosecution from going to trial should be very sparingly exercised."

The Board advised that there is no presumption of prejudice in a long delay, and consequently, no shifting of the burden of disproving prejudice to the prosecution. The burden remains with the defendants. The period of delay is only one factor to be considered in determining whether or not prejudice has been caused. The overriding consideration for the court must be that which was observed by Lord Taylor CJ in R. v. Wilkinson [1996] 1 Crim. App. Rep.81 at page 85 :

"... whether or not to allow a case where there has been long delay to proceed must be whether it is possible to hold a fair trial."

82. The passages quoted above summarizes the position in Common Law.

83. In considering an application for a permanent stay for breach of Article 11(2)(c), I am guided by the tests formulated by Bokhary JA (as he then was) in the case of R. v. William Hung [1994] 1 HKCLR 47. If a case of violation of a person's right under the Ordinance is made out, the Ordinance provides for remedies whereby a court under the provisions of section 6(1)(b) may :

"... grant such remedy or relief, or make such order, in respect of such a breach, violation or threatened violation as it has power to grant or make in those proceedings and as it considers appropriate and just in the circumstances."

The remedies sought by both defendants here is for the court to order that these proceedings be stayed permanently.

84. The first question to be addressed by the court when faced with an application is whether or not there has been undue delay in bringing the defendants to trial?

85. Article 11(2) refers to "determination of any criminal charge". The defendants were charged in August 1998. If this case is to go to trial at all, the date for the trial will be in the middle of October this year by which time it would have been two years and two months since the defendants were first charged.

86. In the Hung case, the appellant was arrested and charged in September 1990. He was committed to the High Court for trial and the hearing commenced on 16 April 1992 and concluded two days later. Between the appellant's arrest and his subsequent trial, there was a lapse of one year and seven months. It was held by the Court of Appeal that there had been undue delay in bringing the applicant to trial and that was a violation of the defendant's right under Article 11(2)(c) of the Ordinance. The Hung case involved one count of drug trafficking and the issues there were relatively straightforward.

87. The issues in the present case is much more complex. I bear in mind the number of amendments made to the indictment and the efforts of the prosecution in trimming down the number of issues to be tried. The defence also took time to consider their positions and, in the meantime, they instituted proceedings to challenge the validity of the indictment. I cannot say that a time lapse of two years and two months from the date of charging the defendants until the date of trial can be described as undue delay within the meaning of the provisions of the article. However, this would have been my conclusion only if the wording of the article were construed in its strict sense. I cannot disregard the fact that investigation of the alleged criminal activities had commenced by the end of 1992. It was almost six years before the defendants were formally charged and brought before a court.

88. In determining the issue of undue delay, I am of the view that courts should also take into consideration of the time taken by the investigation process. The time span, from investigation in 1992 until the shceduled trial in October 2000 must, in my view, be undue delay. The prosecution cannot claim justification by reason of the complexity of this case without offering any further explanation for the inordinate amount of time taken in order to bring the defendants to court.

89. Having so found, the next step, following Hung's case, is to consider whether or not a permanent stay is the appropriate remedy pursuant to the provisions of section 6(1)(b). The test to be applied was formulated by the Lord Chief Justice in Attorney-General's Reference (No.1 of 1990) and is similar whether it be an application under common law or under the Bill of Rights Ordinance. It falls upon this court to consider whether the undue delay has prejudiced a fair trial for each defendant.

90. Three common points are taken by the defendants on the issue of the prejudice. They are, firstly, a key witness, one Mr Hung had passed away in the meantime; secondly, documents crucial to the defence case were lost or no longer available; thirdly, the defendants can no longer have a clear recollection of events which occurred some eight to ten years ago; and fourthly, both defendants had been led into a false sense of security in believing that they will no longer be charged after a lapse of so many years.

91. I note the prosecution case against the defendants is based mainly on possible inferences to be drawn by the jury on various contemporaneous documents. In the course of the trial, if there is to be one at all, the defendants would be shown documents as and when they are produced, and no doubt the documents would have been supplied with the prosecution bundles well before. They would have ample time to read the documents and refresh their minds. The fact that Mr Hung had passed away, and therefore no longer available to give evidence, is not critical. I was informed that another gentleman, one Mr P.C. Lui whose evidence would be along the same lines as that of Mr Hung would give evidence at the trial and therefore available for cross-examination by the defence.

92. From the tenor of the respondent's responses to the enquiry by the Inspector, it would be fair for me to comment here at this stage that the likely stance to be taken by the defendants at the trial is that they have no knowledge of the criminal activities alleged by the prosecution, or alternatively they did not participate in any such activities. Fading memory or inability to recall specific events therefore, has very little negative impact on defences of this nature.

The 1st Defendant's health

93. What remains to be considered is the physical and mental condition of the 1st defendant and the possible effects they may have on his application.

94. The 1st defendant contends that, during the period of the delay, his health has deteriorated. He relies on the report of Dr J. Watson, Consultant Neurologist dated 10 March 2000 and that of Ms Corinne Roberts, Consulting Clinical Neuro-psychologist dated 9 March. Both experts appeared in court and testified in support of the 1st defendant's case. The reports and the experts' oral testimony are that the 1st defendant has been prejudiced in the sense that he is now less able to defend himself efficiently in these proceedings.

95. Ms Roberts assessed the general intellectual ability of the 1st defendant with the Wechsler Adult Intelligence Scale - Revised ("WAIS-R") which comprised a number of sub-test designed for examining different aspects of the 1st defendant's cognitive functioning. On the 1st defendant's general intellectual ability, based on the 1st defendant's background, Ms Roberts estimated that his previous optimal level of functioning would have been in the high to the superior I.Q. range. On the state of his memory functions, she observed :

"He does not have a significant impairment of basic memory making skills. The difficulties he does experienced with recalling day-to-day situations are likely to result from inattention or lapses in concentration."

On his language skills, it was said :

"There was no evidence of impairment of fundamental language skills. Mr Lee's comprehension was good and he had no difficulty following instructions, nor in expressing himself...."

As for his executive skills, Ms Roberts observed that :

"On test of attention and concentration, Mr Lee's performance was poorer than expected."

Ms Roberts concluded her opinion by stating in page 8 of her report :

"However, there were indications of some attentional difficulties which affected Mr Lee's performance on a number of the sub-test which contributed to the overall I.Q. scores."

At page 9, she expressed that the results of the test were consistent with a mild deterioration in Mr Lee's attention and concentration. In the penultimate paragraph of the report, she stated :

"The neuropsychological profile is consistent with a mild reduction in the efficiency of Mr Lee's cognitive functioning in comparison to his estimated previous optimum level. These difficulties would be sufficient to interfere with the efficiency of his decision-making, or getting things done at the rate he could accomplish in the past. He has a number of medical conditions including diabetes and hypertension which are risk factors for small vessel cerebral vascular decease. In addition, Dr Watson noted symptoms suggestive of obstructive sleeping apnoea, a condition recognized as affecting cognitive functioning. In my opinion, the combined effect of these conditions is the most likely explanation for the cognitive deficits demonstrated on testing.

The problems Mr Lee demonstrates are relatively subtle and not sufficient to impede his ability to understand what he is charged, nor to plea. He would not have difficulty understanding what is going on in court in a general sense, nor in understanding the effect of evidence that might be given against him. However, he is likely to experience difficulty in keeping track of large amounts of detailed information, and in sustaining his concentration over the course of a prolonged trial."

96. Based on his academic achievement, Dr Watson estimated that Mr Lee's full scale pre-morbid I.Q. to be in the region of 125 to 130, a score which would have placed him on the top 2% of the population. His present I.Q. score, based on the tests he had undergone, would be in the region of 100 to 103. This would place him with the average population. Therefore, over the years, he had experienced a significant I.Q. drop from the top 2% right to the middle of the average population.

97. Mr Lee was also examined by two experts commissioned by the prosecution. Dr Edmond Woo, a medical neurologist, found no objective evidence of any cognitive dysfunction. He found Mr Lee is at risk for cerebral vascular decease, including hypertension, diabetes and hypercholesterolemia. There were physical signs consistent with a previous minor stroke, but, however, there was no other focal neurological deficit. Dr Woo concluded by making the following observation :

"Mr Lee has a normal mental state examination. He also has an excellent memory of events in the distant past. There are no radiological changes to support the diagnosis of cognitive dysfunction. Therefore Mr Lee does not have any evidence of organic neurological decease. He has normal mental capacity...."

98. Professor Peter Lee of the Department of Psychiatry, the University of Hong Kong, performed a battery of psychological test on the 1st defendant in May of this year. His test scores are roughly compatible with those obtained by Dr Kartsounis in September 1999 and Ms Roberts in February 2000 in Australia. The 1st defendant achieved an adjusted I.Q. score of 103 on the Wechsler Scale. He also found deterioration of his intelligence level from his peak achievement. But his figures were less than those obtained by Ms Roberts and he referred to this as a mild detriment from the 1st defendant's peak level of functioning. Professor Lee concluded by saying :

"Mr Lee might be suffering from a genuine but mildly compromised capacity in his brain functions. His cognitive and memory functioning and performance from various tests administered was also likely to be adversely influenced by his unresolved stress and preoccupation with the on-going trial where he himself is the defendant.... Under such conditions, Mr Lee may not have been able to put forward a fully optimal level of performance.

Given the mild and highly specific nature of Mr Lee's documented cognitive and memory deficits, I do not think that he would be significantly compromised or disadvantaged in any court proceedings he has to face in the immediate near future. He would be fully capable of defending himself and instructing his solicitors in any usual court proceedings."

99. As usual in cases of this nature, I have to extricate myself from the labyrinth of diversified and sometimes contradictory medical opinions. What is being presented to the court is this : the 1st defendant is aged 59; based on his academic achievement and subsequent performance in the field of business, he would have been regarded as a very intelligent man in terms of I.Q. scores. His intelligence would have peaked in his more youthful years and had since experienced a gradual decline. His present I.Q. score is about average. This, I was told, was normal in the case of most people. Mr Lunn, SC for the 1st defendant submitted that the deterioration was the result of his impairment of cognitive functions which had occurred after the commencement of the investigation. The question remains, however, is whether the defendant is so gravely ill or physically or mentally impaired as to make it impossible to conduct a fair trial? On this issue, the onus remains on the 1st defendant to show that he is in such a state and that the deterioration had occurred between the period of the delay, that is from 1991 until the present.

100. The 1st defendant's state of health can best be summed up in the following passage in Dr Watson's report :

"I am of the opinion that Mr Lee would more probably than not sustain further prejudice in defending his case now, compared with a patient of the same age, in normal health with respect to the cerebral vascular risk factors, and without evidence of problems in attention, concentration and memory retrieval. If, hypothetically, he had stood trial some five to seven years ago, more probably than not he would have been much better placed in terms of memory, attention and concentration. First, this is for the common sense reason that the events would have been more proximate and therefore more easily remembered, a situation that pertains for all of us. Second, the current pattern of cognitive deficits is probably related to his medical conditions, accumulative effect of which can be expected to have been progressive over a period of years."

101. The court is told that the 1st defendant has experienced difficulties in recollection, attention focusing and concentration. He is also suffering from diabetic condition and there was a possible minor cardiac episode in late 1998. However, the medical evidence indicates that the 1st defendant's condition is far from serious. The sum of the medical evidence does not support the contention that the deterioration occurred during the period of the delay and his symptoms cannot be specifically related to any particular cognitive dysfunction and as such. The symptoms are equally consistent with progressive aging as experienced by people of his age group. The possibility that they were stress-induced cannot be excluded. To me, the solution to this possible problem, if ever there is one, would be simple and straightforward. If the 1st defendant experiences difficulties in recollection, he would be at liberty to take time to read those documents. If it is a case of inability to concentrate, this can be overcome by the court granting short adjournments where appropriate to the 1st defendant. I am not persuaded that the 1st defendant's condition is such that it is impossible now to conduct a fair trial.

102. The application to stay the proceedings based on his medical and health condition as well as other possible effects of the undue delay must fail.

103. Likewise, I make the same ruling regarding the 2nd defendant's application under this issue.

104. I might venture to add that I would not subscribe to any suggestion that one of the unintended consequences of the delay is to enhance the "fade factor" of any possible adverse publicity. I do not think it is open to the prosecution to pursue this line of argument.

105. Having regard to the history of this case and the conduct of the authorities, I come to the conclusion that this is a clear case that they had abused their powers and the consequence of which is that the defendants' right to a fair trial has been irreparably violated. A fair trial is no longer possible. The independence of our Judicial system must be fearlessly protected and our courts should not suffer themselves to be used, or perceived to be used, as a vehicle to condone or to endorse official impropriety of any form. To allow this case to go to trial would be an abuse of the judicial process.

106. For the reasons given, I would allow the defendants' application and order that these proceedings be stayed permanently.