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HCMP003085/1989
1989, No. MP3085
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HEADNOTE
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RESTRAINT ORDER UNDER DRUG TRAFFICKING (RECOVERY OF PROCEEDS) ORDINANCE.
- APPLICATION TO VARY RESTRAINT ORDER. ORDER THAT FUNDS BE RELEASED ONLY FOR MAINTANENCE COSTS AND LEGAL FEES. PERIODICAL TAXATION OF LEGAL FEES WHERE PROCEEDINGS PROTRACTED.
1989 No. MP3085
IN THE SUPREME COURT OF HONG KONG
HIGH COURT
MISCELLANEOUS PROCEEDINGS
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IN THE MATTER of the Drug Trafficking (Recovery of Proceeds)Ordinance, 1989
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IN THE MATTER of male LAU KOON CHIU holder of Hong Kong Identity Card No.
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Coram: Hon. Ryan, J. in Chambers
Date of hearing: 1 March 1990
Date of delivery of ruling: 8 March 1990
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RULING
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1. The applicant was on the 16th November 1989 charged with the offences of conspiracy to traffic in dangerous drugs and with conspiracy to accept advantages. The offences are alleged to have been committed between the 1st January 1979 and the 30th June 1983 whilst the applicant was a Customs Senior Inspector stationed at Kai Tak Airport. He is alleged to have received the sum of $3,000 per pound as a reward for assisting drug traffickers to traffic in heroin through the airport. These payments are said to total approximately $1.5 million.
2. The Crown obtained ex parte a restraint order on the 16th November 1989 freezing all of the applicant's assets. These are estimated to be approximately $5 million in value.
3. The applicant has applied for a variation of that order to enable payment of maintenance expenses for himself and his family and legal fees. In addition, it is submitted that it is wrong for the court to freeze his total estate when the amount alleged to have been recieved through drug trafficking is only $1.5 million.
4. Section 9 of the Ordinance confers powers on the High Court to make a restraint order where (a) proceedings have been instituted in Hong Kong against the defendant for a drug trafficking offence; (b) the proceedings have not been concluded; and (c) the High Court is satisfied that there is a reasonable cause to believe that the defendant has benefited from drug trafficking.
5. Section 10 of the Ordinance states that the High Court may, by order, prohibit any person from dealing with any realisable property subject to such conditions and exceptions as may be specified in the order. The court, therefore, has a discretion as to what property is to be made the subject of the order.
6. In considering what property ought to be restrained, it is necessary to refer to other provisions in the Ordinance. Section 3 provides as follows: -
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"3. |
(1) where -
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(a) |
In proceedings before the High Court or the District Court a person is to be sentenced in respect of one or more drug trafficking offences and has not previously been sentenced in respect of his conviction for the offence, or as the case may be, any of the offences concerned; and
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(b) |
an application is made by or on behalf of the Attorney General for an order under this section, the High Court or the District Court, as the case may be, shall act as follows.
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(2) |
The court shall first -
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(a) |
impose such period of imprisonment or detention (if any);
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(b) |
make such other order in relation to sentence, not being an order provided for or referred to in subsection(6).
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as is appropriate in respect of the offence, or as the case may be, the offences concerned.
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(3) The court shall then determine whether the person has benefited from drug trafficking.
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(4) For the purposes of this Ordinance, a person who has at any time (whether before or after the commencement of this Ordinance) received any payment or other reward in connection with drug trafficking carried on by him or another has benefited from drug trafficking.
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(5) If the court determines that he has so benefited, the court shall determine in accordance with section 6 the amount to be recovered in his case by virtue of this section."
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Section 6 provides: -
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"6. (1) Subject to subsection (3), the amount to be recovered in the defendant's case under the confiscation order shall be the amount the High Court or the District Court, as the case may be, assesses to be the value of the defendant's proceeds of drug trafficking." |
7. Section 4 of the Ordinance sets out how the proceeds of drug trafficking are to be assessed. It is stated:-
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"4. |
(1) For the purposes of this Ordinance-
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(a) |
any payments or other rewards received by a person at any time (whether before or after the commencement of this Ordinance) in connection with drug trafficking carried on by him or another are his proceeds of drug trafficking; and
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(b) |
the value of his proceeds of drug trafficking is the aggregate of the values of the payments or other rewards.
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(2) The High Court or the District court, as the case may be, may, for the purpose of determining whether the defendant has benefited from drug trafficking and, if he has, of assessing the value of his proceeds of drug trafficking, make the following assumptions, except to the extent that the defendant shows that any of the assumptions are incorrect in his case.
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(3)
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Those assumptions are- |
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(a) |
that any property appearing to the court-
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(i) |
to have been held by him at any time since his conviction; or
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(ii) |
to have been transferred to him at any time since the beginning of the period of 6 years ending when the proceedings were instituted against him,
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was received by him, at the earliest time at which he appears to the court to have held it, as a payment or reward in connection with drug trafficking carried on by him or another;
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(b) |
that any expenditure of his since the beginning of that period was met out of payments received by him in connection with drug trafficking carried on by him or another; and
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(c) |
that, for the purpose of valuing any property received or assumed to have been received by him at any time as such a payment or reward, he received the property free of any other interests in it." |
8. The inquiry as to the value of proceeds from drug trafficking is directed at "any payments or rewards received at any time in connection with drug trafficking" and is not limited to payments or rewards directly connected with the charges upon which the person has been convicted. The Crown gets assistance in establishing what payments or rewards were so received from the assumptions in section 4(3). The court should, in my judgment, be reluctant to release any property from restraint (and certainly not property received within the 6 year period) until the proceedings are concluded, except for funds necessary for maintenance costs and legal expenses.
9. Mr McCoy further argues that a person can, at any time after the restraint order is made, show that the assumptions are incorrect in his case. I do not agree. The procedures set out in section 3 are that after conviction, the High Court or District Court proceeds to sentencing and then to a determination of whether the convicted pesrson benefited from drug trafficking. It is then, and only then, that the provisions of section 6 and section 4 come into play. The judge hearing an application to vary a restraint order has no power, at that point in the proceedings, to decide whether the applicant can rebut the assumptions.
10. Section 27 gives the High Court power to award compensation to a person where proceedings are not instituted or the person is acquitted or, if convicted, the conviction is quashed or he receives a pardon. This power is, however, limited to cases where there has been some serious default on the part of any party connected with the investigation or prosecution.
11. I propose only to release from restraint funds sufficient to enable the payment to the applicant of maintenance costs and legal expenses. The maintenance payments have been agreed between the parties.
12. In respect of the legal expenses, as I advised at the earlier hearing, I agree with Mr McCoy that the applicant's legal advisers should not have to wait until the proceedings have been concluded, which might not be until 1991, before receiving any remuneration. The bill for legal expenses incurred to date can be taxed forthwith by a Master and thereafter at three monthly intervals. The only matter which remains to be resolved is Mr McCoy's request for an order that the Crown be not entitled to appear at the taxation hearings. His submission is that the bill could reveal details of the applicant's line of defence and other privileged matters. I do not accept that the Crown should be shut out from the taxations. The Crown is a party to the proceedings and is entitled to be concerned that there is not an unnecessary or unjustified dilution of the assets. It will be for the Master to decide questions of privilege should they arise.
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(T.J. Ryan)
Judge of the High Court
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Representation:
Mr Boucaut, S.A.C.P., for Crown.
Mr McCoy, inst'd by Woo, Kwan, Lee & Lo for Defendant.
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