LAM HANG v. COMMISSIONER OF CUSTOMS AND EXCISE

IN THE SUPREME COURT OF HONG KONG

MISCELLANEOUS PROCEEDINGS NO. 153 OF 1990

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J U D G M E N T

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1. The Applicant is seeking a certiorari or alternatively a declaration to quash a notice of intention to make a Forfeiture Order made by the respondent on the 26th September 1989.

2. He claims that the respondent should not have proceeded to make a Forfeiture Order as the provisions contained in Part VI of the Import and Export Ordinance Cap. 60 had not been strictly complied with.

3. The complaint which is made is that the respondent failed to comply with S.27(3) of the Ordinance which is in these terms:

"(3) Within 21 days after the seizure of any article, vessel or vehicle which appears to him to be liable to forfeiture under subsection (1), the Commissioner shall serve notice of such seizure upon the owner of the article, vessel or vehicle:

Provided that if there is more than one owner of any such article, vessel or vehicle, it shall be sufficient for the purposes of this subsection to give notice to one such owner."

4. The Applicant who claims to be the owner of the goods which were seized states that he was never served with any notice at the requisite time. Also it is apparent from the affidavit of Mr. Lam Ming Mon, on behalf of the respondent, that there has not been compliance with the alternative procedure laid down in S.27(4).

"(4) A notice given under subsection (3) shall be deemed to have been duly served if-

(a)    it is delivered to the person on whom it is to be served;

(b)    it is sent by registered post addressed to such person at the place of residence or business of such person, if any, known to the Commissioner; or

(c)    where it cannot be served in accordance with paragraph (a) or (b), the notice is exhibited at the Customs and Excise Department, in a place to which the public have access, for a period of not less than 7 days commencing within 21 days from the date of the seizure of the article, vessel or vehicle."

5. Mr. Rosenberg for the respondent conceeded that the definition of "owner" in S.2 of the Ordinance was specifically excluded from Part VI thereof and if he was unable to convince me that Mr. Chia, in whose possession the goods were when they were seized was an owner of the goods then there had not been strict compliance with the procedure laid down in Part VI.

6. I will now consider the relevant facts of the case as disclosed in the affidavits which were before me.

7. On the 8th September 1989 a lorry driven by Mr. Chia was stopped at the mankamto control point on its way from Hong Kong to China. Mr. Chia was asked whether the lorry contained any goods which required an export licence.

8. He made a declaration that there were no such goods in the lorry. A search was then undertaken and the Customs and Excise officers found 108 video cassette recorders and 64 cassette tapes in a concealed space in the lorry.

9. These goods, which I understand are valued at nearly $300,000 were seized by the respondent.

10. Mr. Chia then made a cautioned statement which included a claim that he was not the owner of the goods. He was later charged and convicted of an offence under Cap. 60 and fined $5,000.

11. On the 26th of September the respondent served a notice of his intention to forfeit the goods on Mr. Chia but did not serve it upon anyone else.

12. Mr. Chia did not take any steps to serve a counter notice on the respondent and the goods were rorreited on the 26th October pursuant to S.27(6).

13. The Applicant apparently resides in China. At all material times a Mr. Vincent Tung, the donee of a Power of Attorney has represented the Applicants interests.

14. According to him the Applicant through a Mr. Chan Chung, bought the goods in Hong Kong in early September. It was evident from the receipt exnibited to the papers that the goods were paid for at that time. Mr. Chan would make all the necessary arrangements for the export of the goods from Hong Kong and their importation to China. For these services he was to receive a commission of 10% of the value of the goods.

15. When nothing had happened by the end of October the Applicant attempted without success to contact Mr. Chan. He then made inquiries of undisclosed friends in Hong Kong and learnt of the fact that the goods had been seized by the respondent.

16. Mr. Lam Ming Mon stated in his affidavit that he had not believed the statement by Mr. Chia denying that he was the owner of the goods. His reason for this was the innerent incredibility of the version of events given by Mr. Chia. In all the circumstances it appeared to be obvious that at the least Mr. Chia had some equitable interest in the ownership of the goods having regard to the risks he was taking in smuggling the goods to China.

17. While I have considerable sympathy for Mr. Lam's suspicions I do not consider that he was justified in drawing an inference that Mr. Chia had on the material available demonstrated that on the balance of probabilities he was an owner of the goods.

18. This being the case I am satisfied that the purported service of the notice of forfeiture on Mr. Chia was not good service and that at the least there had been a procedural irregularity.

19. The next question which arises is what relief if any, should be afforded to the Applicant.

20. I must say immediately that I do not regard the irregularity to be a serious one. My reason for coming to this conclusion is that it would have been an entirely simple matter for the respondent to proceed with the forfeiture by complying with the provisions I have referred to in S.27(4). It is highly improbable that any notice exhibited by the respondent pursuant to the requirements of the section would have come to the attention of the Applicant or his "friends". I do not think that the Applicant has suffered any detriment as a result of the irregularity.

21. The next matter I must consider is the appropriateness of granting the relief which is sought.

22. I have no doubt that when a court entertains an application for judicial review it is incumbent upon it to weigh and consider all of the supporting evidence. It is necessary to consider its innerent probability and the nature of the burden which has to be discharged by the Applicant.

23. A helpful statement on these matters appears from a passage from the speech of Lord Scarman at P.112 of Ex parte Khawaja (1984 1 A.C. 74).

"Secondly, there is the problem of proof. The initial burden is upon the applicant. At what stage, if at all, is it transferred to the respondent? And, if it is transferred, what is the standard of proof he has to meet? It is clear from the passages cited from Lord Atkin's opinions in Liversidge v. Anderson [1942] A.C. 206 and Eshugbayi Eleko v. Government of Nigeria [1931] A.C. 662 that in cases where the exercise of executive discretion interferes with liberty or property rights he saw the burden of justifying the legality of the decision as being upon the executive. Once the applicant has shown a prima facie case, this is the law. It was so recognised by Lord Parker C.J. in Reg. v. Governor of Brixton Prison, Ex parte Ahsan [1969] 2 Q.B. 222, and by Lord Denning M.R. in the Court of Appeal in Reg. v. Governor of Pentonville Prison, Ex parte Azam [1974] A.C. 18, 32. And, I would add, it is not possible to construe section 3 of the Habeas Corpus Act 1816, as meaning anything different.

The law is less certain as to the standard of proof. The choice is commonly thought to be between proof beyond reasonable doubt, as in criminal cases, and the civil standard of the balance of probabilities: and there is distinguished authority for the view that in habeas corpus proceedings the standard is beyond reasonable doubt, since liberty is at stake. This appears to have been the view of Lord Atkin (Eshugbayi Eleko v. Government of Nigeria [1931] A.C. 662, 670), and certainly was the view of Lord Parker C.J. (Reg. v. Governor of Brixton Prison, Ex parte Ahsan [1969] Q.B. 222). But there is a line of authority which casts doubt upon their view. The Court of Appeal has held that the standard of proof of criminal offences in civil proceedings is that of the balance of probabilities: Hornal v. Neuberger Products Ltd. [1957] 1 Q.B. 247. As judicial review whether under the modern statutory procedure or section 3 of the Habeas Corpus Act 1816 is a civil proceeding, it would appear to be right, if Hornal's case was correctly decided, to apply the civil standard of proof. My Lords, I have come to the conclusion that the choice between the two standards is not one of any great moment. It is largely a matter of words. There is no need to import into this branch of the civil law the formula used for the guidance of juries in criminal cases. The civil standard as interpreted and applied by the civil courts will meet the ends of justice."

24. Adopting this type of criteria the Applicants evidence does not stand up to any serious or critical scrutiny.

25. As I have stated earlier in this judgment the Applicant claims to have paid the best part of $300,000 for the goods in Hong Kong. Very little evidence is given to indicate that the Applicant took any serious steps to safeguard his own interests.

26. The Applicant does not condescend to inform us what was his relationship with Mr. Chan Chung and why he was prepared to trust him to look after his interests on such a large transaction. He does not say if he knew the man previously or give us any idea how he could have been contacted. To say the least it is very convenient to the Applicants case that this man should have performed such an important function and then without any explanation have disappeared.

27. There is then the question of time. It will have been noted that according to the receipt exhibited the purchase was a casn transaction. No reason has been given why the Applicant was prepared to wait until late October before making inquiries to ascertain what had happened to the goods.

28. In the normal course of events one would expect that it would only take a matter of days to transmit goods from Hong Kong to China. The actual transportation would only take a day or so.

29. There is however some significance attaching to the question of time and delay.

30. It provides an explanation as to why the Applicant did not make any application under S.6 of the Ordinance and also why he was not in a position to serve a counter notice under part VI of the Ordinance.

31. This is of importance as it is necessary for the Applicant to show that he does not have an alternative means of redress. In this connection it may be helpful to note the observations of Lord Scarman on p. 852 of Ex parte Preston 1985 1 A.C. 835.

"My fourth proposition is that a remedy by way of judicial review is not to be made available where an alternative remedy exists. This is a proposition of great importance. Judicial review is a collateral challenge: it is not an appeal. Where Parliament has provided by statute appeal procedures, as in the taxing statutes, it will only be very rarely that the courts will allow the collateral process of judicial review to be used to attack an appealable decision. In the first part of his speech my noble and learned friend. Lord Templeman, has set out in detail the ample appeal procedures available to a taxpayer aggrieved by a decision of the commissioners to exercise their powers and duties under Part XVII of the Act of 1970 to counteract a tax advantage alleged to have been obtained by him.

32. Perhaps the most constructive way of considering this matter is to have regard to the overall situation rather than attempting to analyse in detail the more obvious shortcomings and inconsistencies in the evidence tendered in support of this motion.

33. At the end of the day the Applicant is putting forward a version of the events which have occurred which exactly suits his requirements to enable him to make out what on the face of it appears to be a strong moral claim for the return of the goods. However virtually no opportunity is given to the respondent of checking or calling in question any of the basic facts or assumptions which are made. This situation alone is sufficient to excite my suspicions.

34. However what I am required to do is to consider all of the material which is before me and to decide whether this is an appropriate case for me to grant the relief which is sought.

35. I am satisfied that if I adopt the tests laid down by Lord Scarman in Ex parte Khawaja and consider the evidence on the balance of probabilities it is overwhelmingly my view that the Applicant if indeed he exists, must have been aware of the seizure of the goods shortly after it occurred. I am simply not prepared to attach credence to the evidence which has been adduced in support of this motion.

36. As I have said earlier in this judgment I do not regard the irregularity which has occurred to have been a serious one.

37. For the reasons I have given I would not be disposed to grant the relief which is sought. This motion is dismissed. I will hear the parties on costs.