LAW KIN WAH v. COMMISSIONER OF POLICE

CACV 162/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 162 OF 2006

(ON APPEAL FROM HCAL NO. 99 OF 2004)

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REASONS FOR JUDGMENT

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Hon Cheung JA :

1. I agree with the reasons given by Sakhrani J.

Hon Sakhrani J :

2. On 10 November 2006 we allowed the appeal of the applicant and set aside the order of Yam J made on 15 June 2005 dismissing the application for judicial review.  We made an order in the terms of paragraphs 1, 2, 2a and 3 of the amended notice of appeal thereby making orders of certiorari to bring up and quash the decision of the Appropriate Tribunal made on 19 May 2003, the decision of the Senior Police Officer made on 28 May 2003, the decision of the Force Discipline Officer made on 31 July 2003 and the decision of the Deputy Commissioner of Police (Management) made on 17 September 2003.  

3. We also made an order that the costs of the appeal be costs to the applicant but that the order for costs made by Yam J in favour of the respondent should not be disturbed.  As the applicant was legally aided we also made an order that the applicant’s own costs be taxed in accordance with Legal Aid Regulations.

4. We indicated at the time that reasons in writing would be provided.  These are my reasons.

5. The issue in this appeal is whether there was procedural unfairness in the police disciplinary proceedings against the applicant so that orders of certiorari should be made quashing the various decisions made in the disciplinary proceedings. 

6. At the time of the disciplinary proceedings the applicant was a police sergeant (Sergeant 14110).  He joined the police force as a constable in 1984 and was promoted to sergeant in 1998.  Until he faced the charges in the disciplinary proceedings, the applicant had an unblemished record in the force with his overall work performance generally graded as “very good”. 

The facts

7. According to the revised brief facts of the case (“the brief facts”) presented at the disciplinary proceedings, the applicant became the subject of an investigation in respect of his financial situation in May 2001.  This was because he was found to be involved in loan transactions with a licensed moneylender whose offices were raided in connection with an unrelated case.

8. On 15 June 2001 a statement was taken from the applicant which revealed that he had borrowed two loans for his brother in late 1999 and July 2000 which were later settled by his brother.  Apart from two government loans from the Treasury ($20,000) and police welfare fund($10,000) in February 2001 as well as outstanding credit card debts of about $6,000- $7,000, he stated that he had no other debts at that time.

9. On 3 January 2002 the applicant reported that he had filed an application for bankruptcy on 2 January 2002.  He was prohibited from carrying arms on 17 January 2002 until 13 March 2002.

10. On 9 February 2002 a statement was taken from the applicant which revealed that he owed a total of $696,500 to licensed financial institutions and credit card companies.  He claimed that the debts were incurred in order to pay off the investment debts by his sister and brother-in-law since 1998.  He gave details of the amounts borrowed for his sister and brother-in-law.  He explained that in July/August 1998 he started to borrow $180,000 from a bank for his sister and brother-in-law.  In September 2000 the loan was extended and he borrowed a further $120,000 from different sources.  In December 2000 he further borrowed another $200,000 as his sister persuaded him that she would repay all the debts after the sale of her mother-in-law’s flat later on.  Since then until October 2001 the applicant had continuously borrowed a total of $540,000 from various banks and financial institutions.  As the amount of repayment by his sister to him became less and less the applicant had to repay the loans by drawing cash with his credit cards.

11. In December 2001 the applicant’s brother-in-lawfiled for bankruptcy.  As a result the applicant also filed a petition for bankruptcy on 2 January 2002.  He was subsequently classified as an ‘Officer with Unmanageable Debts’ (OUD).

12. As there were discrepancies between his statements of 15 June 2001 and 9 February 2002 a further statement was taken from the applicant on 20 February 2002.  The applicant claimed that he had no intention to cover up the debts borrowed for his sister as he thought that when giving his first statement of 15 June 2001 there was an inquiry only of his own financial situation.  However, when he filed a petition for his own bankruptcy he disclosed all the debts borrowed for his sister and brother-in-law.

13. On 7 May 2002 a bankruptcy order was made against the applicant on his petition.

14. Statements were taken from the applicant’s sister and brother-in-law which corroborated the applicant’s version as to borrowings made by him for his sister and brother-in-law.  However, no documentary proof of the money transactions were provided.

15. The above facts were contained in the brief facts which were admitted by the applicant in the disciplinary proceedings against him.

The Charges

16. The applicant faced two disciplinary charges as follows :

(1)	Charge A : being a contravention of Police Orders, contrary to Regulation 3(2)(e) of the Police(Discipline) Regulations, Cap 232(“the Regulations”).
	The particulars of Charge A were :
	“	SGT 14110 LAW Kin-wah of the Hong Kong Police Force, you are charged that on 17th January 2002 onwards in Hong Kong, you did fail to be prudent in your financial affairs by incurring unmanageable debts of HK$696,500, which serious pecuniary embarrassment, as evidenced by the making of a bankruptcy order against you, stemming from your financial imprudence, has impaired your operational efficiency, contrary to PGO 6-01 (8).”
(2)	Charge B: Making a statement which is false in a material particular, contrary to Regulation 3(2)(j) of the Regulations.
	The particulars of Charge B were :
	“	SGT 14110 LAW Kin-wah of the Hong Kong Police Force, you are charged that at about 1640 hours on 15th June 2001, at Room 126 of Wanchai Police Station, in Hong Kong, you did make a statement in connection with the discharge by the police force of any of its duties or functions, to Woman Inspector LAM Sui-chu, namely that apart from debts owed to ‘Rich Propser Limited’, to the Treasury, to the Police Welfare Fund and to Chase Manhatten Credit Card, you had no other debts, such a statement being false in a material particular.”

17. Chapter 6 of the Police General Orders deals with conduct and discipline of police officers.  Paragraph 8 provides that :

“A police officer shall be prudent in his financial affairs.  Serious pecuniary embarrassment stemming from financial imprudence which leads to the impairment of an officer’s operational efficiency will result in disciplinary action.”

The disciplinary proceedings

18. As the applicant was a junior police officer within the meaning of the Regulations the disciplinary proceedings against him were governed by Part II of the Regulations.

19. As Ma CJHC observed at paragraph 6 of his judgment in Cheung Wing Fai v Commissioner of Police (CACV 129 of 2005, unreported, 8 December 2005):

“	Essentially, there are four possible hearings in such proceedings under Part II of the Regulations (this Part relates to junior police officers like the Applicant) : -
	(1)	The first hearing is before a superintendent, known under the Regulations as the appropriate tribunal.  This hearing is an oral one where evidence is adduced by both the prosecution and the person charged (known as a defaulter).  Witnesses may be called, examined and cross-examined.  The defaulter may be represented by a fellow police officer but not by a barrister or solicitor (unless he or she is also a police officer).  A review is possible before the appropriate tribunal.  See here regulations 8 to 13 of the Regulations.
	(2)	Where a defaulter has been found guilty or has pleaded guilty, and has been sentenced by the appropriate tribunal (called an award under the Regulations), the finding of guilt and the award must then be dealt with by a senior police officer (being a Chief Superintendent, Assistant Commissioner or Senior Assistant Commissioner) where the appropriate tribunal is of the view that his powers of punishment are insufficient, he may ask the senior police officer to impose the award.  This was what happened in the present case.  This is the second hearing in the disciplinary process which (I assume) may or may not involve an oral hearing.  See regulations 11(6) and 14(1)-(5).
	(3)	After the hearing before the senior police officer, unless where presumably the charge against the defaulter has been dismissed, the matter then proceeds to the Force Discipline Officer.  Like the senior police officer, the Force Discipline Officer is in a position to confirm or vary the finding of the senior police officer, or order a rehearing by another appropriate tribunal, or confirm or vary the award imposed on the defaulter.  This is the third hearing and again I assume this may or may not be an oral one, although like the hearing before the senior police officer, I suspect it is often not.  See regulations 14(5)-(7).
	(4)	The final hearing under the Regulations is an appeal by petition by the defaulter to the Commissioner of Police.  The Commissioner may permit the defaulter to appear in person.  See regulation 15.”

20. The applicant was represented by a senior inspector at the hearing before the Appropriate Tribunal (“the AT”).  At the hearing on 30 January 2003 the applicant pleaded guilty to both charges.  However, the AT had reservations whether the facts presented proved the charges and entered not guilty pleas to both charges.  The case was adjourned to 20 February 2003 as the AT was of the view that the facts submitted by the prosecution could be improved.

21. At the resumed hearing on 20 February 2003 the brief facts were admitted by the applicant.  

22. It is plain from the record of proceedings that not only were the brief facts agreed by the prosecuting officer and the applicant but that the exhibits E1 to E8 were agreed evidence for the purpose of the proceedings.  These included exhibit E7, the statement of the applicant’s sister, and exhibit E8, the statement of his brother-in-law.

23. The applicant gave evidence but did not call his sister and brother-in-law to give evidence.  The AT found him guilty of charges A and B.

24. However, in finding him guilty of charge A the AT was not prepared to accept the truth of the applicant’s stated reason for his extensive borrowings namely, for his sister and brother-in-law.

25. The AT considered that the punishment that he could award was insufficient and forwarded the matter to the Senior Police Officer (“the SPO”) to make the award.

26. On 28 May 2003 in respect of Charge A the SPO made an award of severe reprimand.  In addition to that punishment he made an award of compulsory retirement with deferred benefits.  In respect of Charge B he made an award of reprimand.

27. The matter then came before the Force Discipline Officer (“the FDO”).  On 31 July 2003 the FDO confirmed the guilty findings for Charges A and B.  He also confirmed the awards of severe reprimand and the additional award of compulsory retirement with deferred benefits for Charge A and reprimand for Charge B.

28. There was then an appeal to the Deputy Commissioner of Police (Management) (“DCP Man”) in respect of the award for Charge A.  On 17 September 2003 he dismissed the appeal and confirmed the award of compulsory retirement with deferred benefits.

The proceedings below

29. The applicant was granted leave to apply for judicial review for an order of certiorari to quash the decisions of the AT, the FDO and DCP Man by Chung J on 10 September 2004.

30. The matter was heard by Yam J on 15 June 2005.  On 7 July 2005 he dismissed the application with costs to the respondent.

31. The point taken on appeal is whether there was procedural unfairness by the AT, the SPO, the FDO and DCP Man in rejecting the agreed facts and agreed evidence before coming to their decisions in the disciplinary proceedings.  That was not a point taken in the Court below.

32. In Cheung Wing Fai where there were disciplinary proceedings also against a junior police officer, the agreed evidence as to the reason for the indebtedness of the applicant in that case was rejected.  It was held on appeal by this Court (Ma CJHC, Stone and Sakhrani JJ) that the rejection of the agreed evidence was neither proper nor fair.  Orders for certiorari were made quashing the various decisions.

33. Mr Lau, for the applicant, relying on Cheung Wing Fai, which was decided after the decision of Yam J in this case,submitted that the orders made against the applicant in respect of Charge A should also be quashed.  Mr Lau accepted that he was raising a new point which was not raised in the Court below.  The other grounds of appeal were not pursued.

34. No complaint was made against the award in respect of Charge B and there was no appeal in respect of Charge B.

35. In the Advisory Paper on the management of OUD and PGO 6-01(8) the point is made that when considering the appropriate award in a disciplinary case against an OUD, the causes of the pecuniary embarrassment should be taken into account.  If the causes are considered reprehensible, then a greater award will be considered.

36. Obviously, the cause for the indebtedness of the applicant was an important factor to bear in mind when deciding on the penalty.  It would have a direct bearing on the award to be made.  In the disciplinary proceedings the cause for the applicant’s indebtedness namely, borrowings for his sister and brother-in-law were not accepted by the AT nor by the SPO,FDO and DCP Man despite the fact that on the agreed facts and agreed evidence that was the cause of his indebtedness.  As a result the applicant was awarded the very serious penalty of compulsory retirement with deferred benefits in addition to a severe reprimand for Charge A.

37. Mr Law, for the respondent, submitted that the statements of the sister and brother-in-law were agreed only as to admissibility but were not agreed as to their contents.  I am unable to accept this submission.  

38. It is plain from the record of the proceedings before the AT that the brief facts were presented by the prosecuting officer and admitted by the applicant.  Thus the brief facts were agreed facts before the AT.  

39. And the statements of the applicant’s sister and brother-in-law namely, Exhibits E7 and E8 were also regarded as agreed evidence.  The evidence of the sister and brother-in-law in their statements corroborated the applicant’s claim that the extensive borrowings were for his sister and brother-in-law.  The brief facts make it plain that the contents of these statements were accepted as being true.  For instance, at paragraph 10 of the brief facts it is accepted that the debts incurred were confirmed by the applicant’s sister and brother-in-law to have been borrowed on their behalves.  Thus it is clear that the prosecuting officer accepted and agreed that the debts incurred by the applicant were confirmed by his sister and brother-in-law to have been borrowed on their behalves.  

40. I would also observe that at the hearing on 14 April 2003 before final submissions were made to the AT the representative of the applicant made it plain that the defence would not be calling the sister and brother-in-law. He re-iterated that their statements had been admitted as agreed evidence. If the AT was of the view that he was not bound by the contents of the statements of the sister and brother-in-law then as a matter of fairness he should have expressed that view to the applicant and his representative so as to enable them to consider their position.

41. It was certainly the understanding of the defence that the statements of the sister and brother-in-law were agreed as to contents. That must also have been the understanding of the prosecuting officer as in his final written representations to the AT he made submissions on the basis that the cause of the applicant’s indebtedness was for his sister (see paragraphs 6 and 7).

42. I have no hesitation in coming to the view that the brief facts were agreed facts and that the statements of the sister and brother-in-law were agreed evidence as to their contents.

43. The AT did not accept that the applicant’s borrowings were for his sister and brother-in-law.  In the circumstances, in my judgment it was neither proper nor fair for the AT to disregard the agreed facts and agreed evidence in coming to his decision.

44. In my judgment it is plain that there was procedural unfairness in the proceedings before the AT.

SPO’s decision

45. In his deliberations at paragraph 9, the SPO said that he had serious doubts as to the veracity of the applicant’s claim that he had accumulated the debts to assist his sister and brother-in-law.  

FDO’s decision

46. In the FDO’s deliberations at paragraph 3, he was unconvinced of the genuineness of the applicant’s claim that he had borrowed to assist his sister and brother-in-law.

DCP Man’s decision

47. In the DCP Man’s deliberations at paragraph 3, he had grave doubts about the truth of the applicant’s assertion that his financial difficulty was purely caused by his assistance to his elder sister and brother-in-law.  

48. The genuineness of the applicant’s claim that he had made the extensive borrowings for his sister and brother-in-law should not have been doubted in the light of the agreed facts and the agreed evidence.  In the circumstances it was improper and unfair for the SPO, FDO and DCP Man to doubt this.

49. For those reasons, the appeal was allowed, the order of Yam J was set aside and orders for certiorari were made.

50. As the applicant succeeded on a new point not taken in the Court below it was proper to make an order that the order for costs made by Yam J in favour of the respondent should not be disturbed but that the costs of the appeal should be costs to the applicant.  As the applicant was legally aided his own costs should be taxed in accordance with Legal Aid Regulations.  These are my reasons for the costs order that we made.

Hon Kwan J :

51. I agree with the reasons of Sakhrani J.