SECRETARY FOR JUSTICE v. SO YA KAU AND ANOTHER

[English Translation – 英譯本]

HCMA 262/2022

[2023] HKCFI 2647

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CASE STATED

MAGISTRACY APPEAL NO. 262 OF 2022

(ON APPEAL FROM ESMP NO. 982 OF 2020)

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J U D G M E N T

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1.  In a marine operation conducted on 22 January 2018, the Hong Kong Customs and Excise Department (hereinafter “C&ED”) seized a batch of electronic products hidden in two vessels. The products were suspected of contravening the Import and Export Ordinance (hereinafter “IEO”). The two vessels and some equipment thereon were also seized.

2.  The Respondents were the owners of the two vessels and the equipment (hereinafter “the items involved”). The electronic products were the goods that they kept on board the vessels for the owner Li Tim Kam.

3.  On 21 February 2018, solicitors for the Respondents and Li Tim Kam gave written notice to the C&ED by way of two letters, claiming that the above items were not liable to forfeiture. The C&E Commissioner (hereinafter “the Commissioner”) replied in writing on 27 February 2018 that since the claim was made after the expiration of the time limit specified in section 27(5) of the IEO, the relevant electronic products had been forfeited pursuant to section 27(6). The Commissioner was still considering whether or not to forfeit the two vessels of the Respondents.

4.  In relation to the electronic products and the items involved, the two Respondents were each charged with one count of “attempting to export unmanifested cargo” and one count of “altering the structure of a vessel for the purpose of smuggling articles out of Hong Kong” in criminal case ESCC371/2019. They were acquitted of all charges by the trial magistrate on 5 November 2019 after trial.

5.  On 24 February 2020, the Commissioner made an application to the Magistrates’ Court for forfeiture of the two vessels and the equipment (items 1-27 in the annex to the application and summons mentioned below, excluding the seized electronic products mentioned above). Ms Bina Chainrai, the Principal Magistrate (as she then was),issued a summons on 19 May 2020, directing the two Respondents (the Claimants in the summons) to appear in court on 13 August 2020 when the C&ED’s forfeiture application would be disposed of. Having searched through the case file of the trial in ESCC371/2019, I confirm that the articles from items 1-27 are the exhibits that were produced in court by way of the admitted facts of the case.

6.  At the hearing on 13 August 2020, the forfeiture application was adjourned to 13 October. Subsequently, it was further adjourned twice on paper, pending the Court of First Instance’s disposal of the challenge brought by the owner of the electronic products against the Commissioner in relation to the Commissioner’s decision to forfeit the batch of electronic products and to not include the electronic products in the present case of forfeiture application for them to be considered together with the items involved. The forfeiture application was eventually brought up to court again on 15 November 2021 for disposal.

7.  The Court of First Instance handed down the judgment on 11 October 2021[1] whereby the application for leave to apply for judicial review lodged by the owner of the electronic products was dismissed. The decision of Hon Chow JA[2] included the ruling that, since the owner did not give a written notice of claim within the time limit specified under section 27(5) of the IEO, pursuant to the provision under section 27(6),the electronic products “shall be forfeited forthwith to the Government” on the date of expiration. The Commissioner had no discretion to not strictly follow the time limit imposed by the Ordinance.

8.  Based on Hon Chow JA’s decision, since the Respondents’ claim in relation to the items involved was likewise made after the expiration of the statutory time limit, the items involved had already been forfeited at the moment the time limit expired pursuant to section 27(6). Therefore, at the hearing of the forfeiture application on 15 November 2021, the Commissioner withdrew the forfeiture application, which was approved by Ms Ada Yim Shun Yee, Principal Magistrate (as she then was). The two Respondents then applied for the costs arising from their dealing with the forfeiture application which was eventually withdrawn.

9.  Principal Magistrate Yim (hereinafter “the Magistrate”) ruled that according to section 3(1)(a) of the Costs in Criminal Cases Ordinance Cap 492 (hereinafter “CCCO”), she had jurisdiction to dispose of the costs applications, and held that the Respondents ought to be awarded the costs up to 13 August 2020.

10.  The Appellant sought to review the Magistrate’s costs order on 26 November 2021. The Magistrate dismissed the review application on 18 November (sic) on the following reasons:

“15.1 The issue is on the interpretation of section 28(5) of the IEO. I accept the interpretation of the two Respondents on section 28(5) and section 3(1)(a).

15.2 The power of the Magistrates’ Court to award costs in this case comes from section 3(1)(a) of the CCCO. The Ordinance relates to the costs of the Defence in summary proceedings. The provision states that a magistrate has power to order that costs be awarded to the defendant when an information or a complaint laid before the magistrate is not proceeded with. Therefore, the relevant provision is applicable to legal proceedings commenced in the form of complaints.

15.3 I am entitled to rely on section 28(5) of the IEO which stipulates that (“)subject to the provisions of this Ordinance, an application under section 28(1) to a magistrate shall be deemed to be a complaint for the purposes of section 8 of the Magistrates Ordinance(”) (hereinafter “MO”). Section 8 confers on a magistrate the powers to dispose of the relevant complaints in accordance with law. One of the powers concerned in disposing of complaints is on (awarding) costs under section 3(1)(a) mentioned above. In my opinion, the power to make costs orders is to ensure that the relevant procedures in the legal proceedings are commenced and proceeded with genuinely and properly. The party that commences legal proceedings without proper justification would have to compensate the opposite party for the costs incurred by them. The costs involved serve to remind the party who intends to commence legal proceedings to think twice before taking action, because having commenced the proceedings, the party would have to pay the costs of the opposite party incurred in dealing with the relevant complaint eventually withdrawn, i.e. the costs that could have been avoided.

15.4 In light of the above decision, I order that the two Respondents be also awarded the costs of the review application in accordance with the CCCO.”

11.  The Secretary for Justice now appeals to the Court of First Instance against the above costs order by way of case stated pursuant to section 105 of the MO.

12.  Below are the questions of law arising from the case stated as set out by the Magistrate for the opinion of the Court of First Instance:

“Question 1: Whether I was wrong in ruling that in accordance with the provisions of the CCCO, I had jurisdiction to award costs in the forfeiture application?

Question 2: If the provisions of the CCCO were not applicable to the forfeiture application, whether I was wrong in ruling that I had jurisdiction to award costs in the forfeiture application?”

Arguments from Both Sides

13.  Both the Appellant and the Respondents agreed that a magistrate does not have an inherent jurisdiction to make costs orders. The relevant power shall be conferred on a magistrate by statute.

14.  The Appellant’s submission was that the IEO does not contain any provision that vests jurisdiction in a magistrate to make costs orders in relation to legal proceedings conducted under the Ordinance. Therefore, the Magistrate could not rely on the IEO to make any order as to costs.

15.  The Appellant took the view that section 3(1)(a) of the CCCO   which the Magistrate relied on is not applicable to forfeiture applications either, because a forfeiture application does not fall within the “information” or “complaint” as specified in the provisions. In section 28(5) of the IEO, “shall be deemed to be a complaint” only refers to the delivery of a summons for a forfeiture application which shall be conducted in accordance with the requirements under section 8 of the MO. Section 28(5) does not apply to the CCCO. The nature of a forfeiture application cannot be altered to accommodate the purposes of section 3(1)(a).

16.  The Respondents do not dispute that the IEO does not contain any provision which directly empowers the Magistrate to award costs to a Claimant in the event that a forfeiture application is withdrawn. However, the Respondents submitted that upon a correct interpretation of the relevant provisions of the IEO, the only plausible construction is that according to the IEO, the proceedings on withdrawal of a forfeiture application are deemed proceedings governed by the MO and the CCCO. The Magistrate therefore had the jurisdiction vested in her by the two Ordinances and could make the costs order in the present case accordingly.

17.  The Respondents submitted that with section 28(5) of the IEO which reads “Subject to the provisions of this Ordinance, an application under subsection (1) to a magistrate shall be deemed to be a complaint for the purposes of section 8 of the Magistrates Ordinance (Cap. 227)”, and section 8(6) of the MO which states that a magistrate may award costs after a summons is cancelled, the interplay of the two provisions vested in the Magistrate the jurisdiction to award costs to the Claimants after the forfeiture application was withdrawn.

Discussion

18.  Firstly, it is an undisputable fact agreed by both parties that the Magistrate does not have an inherent jurisdiction to award costs and that the power must be derived from statute. I take the same view.

19.  It is also an undisputable fact that the IEO does not vest in the Magistrate the power to award costs to the Claimants after the forfeiture application was withdrawn. This is also my view.

20.  The Magistrate ruled that her power to award costs to the Claimants came from section 3(1)(a) of the CCCO which reads:

“ 3. Defence costs in summary proceedings

(1) Where —

(a) an information or complaint laid before a magistrate is not proceeded with; …

the magistrate may order that costs be awarded to the defendant. ”

21.  The Magistrate held that as a forfeiture application under section 28(5) of the IEO shall “be deemed to be a complaint”, the proceedings of a forfeiture application are covered by section 3(1)(a) of the CCCO. Section 28(5) reads as follows:

“Subject to the provisions of this Ordinance, an application under subsection (1) to a magistrate shall be deemed to be a complaint for the purposes of section 8 of the Magistrates Ordinance (Cap. 227).”

22.  The operation of section 28(5) shall be governed by section 8 of the MO which reads as follows:

“ 8. Issue of summons to defendant and mode of service thereof

(1) In every case where a complaint is made to or an information laid before a magistrate or an officer of a magistrate’s court who is authorized in writing for that purpose by a magistrate, being a complaint or information in respect of which a magistrate has power to convict summarily or to make an order for the payment of money or otherwise, it shall be lawful, subject to this Part, for a summons to be issued by a magistrate or an officer of a magistrate’s court who is authorized under this subsection.

(1A) Every such summons shall be issued to the person against whom the complaint has been made or information laid, stating the matter of the complaint or information and requiring him to appear at a certain time and place before a magistrate to answer to the complaint or information and to be further dealt with according to law.

(1B) (a) (Repealed 12 of 1992 s. 2)

(b) A summons may be issued without consideration of the complaint or information by the magistrate or an officer of a magistrate’s court who is authorized under subsection (1), but, if a magistrate does consider the complaint or information, he may for good cause refuse to issue a summons.

(1C) (Repealed 12 of 1992 s. 2)

(1D) Every such summons shall be in the prescribed form.

(2)    (a) Every such summons shall be served—

(i) by hand; or

(ii) by post.

(b) Where a summons is served by post and the person to whom it is directed does not appear at the time and place specified in the summons for the appearance of that person, such service shall be deemed to have never been effected, and the summons shall thereafter be served by hand.

(c) Where a summons is served by hand, the police officer, the usher or other officer of a magistrate’s court, or officer of the Independent Commission Against Corruption who served the summons shall, save as provided in subsection (3), attend before a magistrate at any time and place specified by a magistrate to depose, if necessary, to its service.

(d) Nothing in this subsection shall oblige a magistrate or an officer of a magistrate’s court who is authorized under subsection (1) to issue a summons in any case where the defendant appears voluntarily or upon his recognizance or is in the custody of the police or charged on the charge sheet in which case it shall be lawful for a magistrate to hear and determine the case in all respects as if the defendant had appeared in answer to a summons.

(e) In this subsection—

served by hand (由專人送達) means served by a police officer, usher or other officer of a magistrate’s court, or officer of the Independent Commission Against Corruption on the person to whom the summons is directed—

(a) by delivering the summons to that person personally; or

(b) by leaving it with a third person for that person at that person’s last or most usual place of abode;

served by post (以郵遞方式送達) means sent by an usher or other officer of a magistrate’s court by ordinary post to the residential or business address of the person to whom it is directed.

(3) A statutory declaration by a police officer, usher or other officer stating that he delivered a summons to the person to whom it is directed personally or that he left it with a third person for that person at that person’s last or most usual place of abode, shall on its production be admissible in evidence without further proof, and until the contrary is proved the magistrate before whom it is produced shall presume—

(a) that the facts stated therein are true; and

(b) that the summons was duly served in accordance with subsection (2)(a)(i).

(4) Notwithstanding subsection (3) a magistrate may require the police officer, usher or other officer who served a summons to attend before him and give evidence on oath as to its service.

(5) Subject to subsection (6), at any time before the person to whom a summons is directed has appeared to answer the complaint or information, a magistrate may, where practicable upon first hearing the complainant or informant, cancel the summons by writing under his hand which shall be served in the manner provided for the service of a summons by hand in subsection (2).

(6) Where a summons has been cancelled under subsection (5) a magistrate may, within 2 months of the date of such cancellation, order that the complainant or informant shall pay to the defendant such costs, not exceeding $5,000, as he may think fit.”

23.  Section 8(1) of the MO empowers a magistrate to issue a summons in accordance with the provisions under section 8 where a complaint has been made, provided that the subject matter of the complaint shall be one in which the magistrate is entitled to make an order summarily.

24.  Applying the analysis in Secretary for Justice v N [2013] 1 HKLRD 130；HCMA 101/2012 (to be mentioned in greater detail below) regarding the meaning of “proceedings which a magistrate has power to determine in a summary way”, my view is that a forfeiture application is a matter in which a magistrate has power to “make an order summarily”.

25.  According to section 28(5) of the IEO, within the framework of section 8 of the MO, a forfeiture application is deemed to be a “complaint” under section 8. Therefore, the summons for the forfeiture application in this case issued by the Magistrate on 19 May 2020 was issued pursuant to the power vested in her by section 8 of the MO. As a result, the forfeiture summons was governed by section 8.

26.  The heading of section 8 of the MO reads “Issue of summons to defendant and mode of service thereof”. Section 8 (1) to (4) of the Ordinance only concerns the power to issue a summons, information that must be listed on a summons, the format as well as mode of service of a summons, and how to prove a summons has been served.

27.  Section 8(5) of the Ordinance empowers a magistrate to cancel a summons in a specified period. After a summons is served in accordance with the requirements under section 8(1) to (4), at any time before the person to whom a summons is directed has appeared in court to answer the complaint, a magistrate may cancel the summons by writing under his hand upon hearing the submissions from the complainant. A summons so cancelled shall be served to the defendant by hand again in accordance with section 8(2).

28.  Section 8(6) empowers a magistrate to deal with costs after a summons is cancelled under section 8(5). A magistrate “may, within 2 months of the date of such cancellation, order that the complainant or informant shall pay to the defendant such costs, not exceeding $5,000, as he may think fit.”

29.  Section 8(5) is clear in terms of both content and wording. Whether it be the Chinese or English version, its meaning is unequivocal, which is that, the time the subsection is applicable to is “any time before the person…has appeared to answer the complaint or information”. For a summons that has been cancelled, it “shall” be served on the defendant according to the mode of service provided for under section 8(2). Only upon an effective cancellation of the summons pursuant to section 8(5) can section 8(6) come into play.

30.  The summons for the forfeiture application in the present case was never cancelled pursuant to section 8(5). Therefore, section 8(6), which empowers a magistrate to order an informant or a complainant to pay the defendant costs, did not apply to the disposal of costs after the summons for the forfeiture application was withdrawn.

31.  It is true that the Magistrate did rule that it was not section 8 of the MO that vests in her the jurisdiction to award costs. Instead, it was section 3(1)(a) of the CCCO. The Magistrate’s finding was that “shall be deemed to be a complaint” under section 28(5) of the IEO makes the forfeiture application a “complaint” that is governed by section 3(1)(a).

32.  However, according to the wording of section 28(5), it is clear that the operation of “shall be deemed to be a complaint” under the subsection has to be for the purposes of section 8 of the MO. There is no legal basis in the Magistrate’s finding that section 28(5) can be broadly applied to the CCCO beyond the coverage of the subsection. The Magistrate’s view that as the forfeiture application under section 28 can be deemed a “complaint” for the purposes of section 8 of the MO, it also becomes a “complaint” governed by the CCCO is a view that cannot stand.

Proceedings of a forfeiture application are summary proceedings

33.  The Magistrate summarised in the case stated one of the grounds advanced by the Respondents, which is that as the proceedings of a forfeiture application are proceedings that may be disposed of summarily, section 3 of the CCCO is applicable, because the title of that section is “在簡易法律程序中的辯方訟費”, or “Defence costs in summary proceedings” in English. 

34.  In the abovementioned case of N, after the hearing disposing of the surrender and return of the respondent’s travel documents under sections 17A and 17B of the Prevention of Bribery Ordinance, the appellant requested counsel for the respondent to pay “wasted costs” pursuant to section 18(1) of the CCCO. The magistrate held that proceedings instituted pursuant to sections 17A and 17B were not “criminal proceedings” under section 18(1), and thus he had no jurisdiction to make a costs order pursuant to that subsection. The appellant appealed against the relevant decision by way of case stated.　

35.  In dealing with the appeal, Macrae J (as His Lordship then was)first held that the return proceedings were proceedings that a magistrate “has power to determine in a summary way” (summary proceedings), (and) pointed out the following matters in his judgment, namely the magistrate was scheduled to hear in chambers on 28 and 30 December a contested application for the return of travel documents; the respondent was at all times represented by counsel and solicitors; and, when the magistrate gave his ruling on costs on 4 January, the respondent was again represented by counsel and solicitors. His Lordship then held that the magistrate’s ruling was plainly made in proceedings which he had power to determine in a summary way^[3].

36.  Macrae J upheld the magistrate’s finding that there was no “information” laid or “complaint” made against the respondent at the time, and he also agreed with the finding that the proceedings in which the Commissioner of the Independent Commission Against Corruption successfully applied for the surrender of the respondent’s travel documents did not constitute having “instituted criminal proceedings” against the respondent. It followed that the respondent was not a “defendant” within the meaning of section 2 of the CCCO and the ICAC Commissioner not a “prosecutor” within the meaning of the same section, and therefore the magistrate was correct in holding that he had no power under section 18(1) to order the respondent’s legal representatives to pay wasted costs.

37.  Applying the logic in Macrae J’s judgment above to the present case, my decision is that a forfeiture application is also a matter that may be disposed of summarily by a magistrate.

38.  However, the title of a section is but a general indicator of its contents. The words and sentences forming the contents of the relevant section shall be the sole basis upon which the Court relies in applying the legislation. Although the title seems to show that section 3 applies to all cases of summary proceedings, when one starts to read the section, one would immediately realize that the legislature had made detailed categorization in respect of different types of proceedings. The Court cannot disregard the requirements of individual provisions and generally state that section 3 may be applied to all summary proceedings in a wholesale manner. Therefore, the question here goes back to whether proceedings on forfeiture applications are proceedings conducted by way of laying an “information” or making a “complaint” to a magistrate, as required in section 3(1)(a).  

“Information” or “complaint”

39.  The CCCO adopts the definition of “information” under the MO, but it does not define “complaint”. Under the MO, on the definition of “information”, it says that “information includes a charge” [4]. Under the MO, “charge” is not defined, nor is there a definition of “complaint”.

40.  Section 10 of the MO governs the manner in which a “complaint” is made or an “information” is laid:

“Manner of making complaint or laying information

(1) Every complaint and every information under this Part, unless some enactment otherwise requires, may respectively be made or laid without any oath being made of the truth thereof; except in case of an information where the magistrate receiving the same thereupon issues his warrant in the first instance to apprehend the defendant as aforesaid; and in every such case where the magistrate issues his warrant in the first instance the matter of the information shall be substantiated by the oath of the informant, or of some witness on his behalf, before any such warrant shall be issued.

(2) For every distinct offence of which any person is accused there shall be a separate complaint or information, and every such complaint or information shall be tried separately except in the following cases —

(a) when a person is accused of more offences than one of the same or a similar character he may, subject to the provisions of section 26, be charged with and tried at the same time for any such offence, whether it is committed with respect to the same person or not: Provided that if the magistrate is of opinion that a person accused will be prejudiced or embarrassed in his defence, he may order a separate trial of any such charge or charges;

(b) if in one series of acts so connected together as to form the same transaction, more offences than one are committed by the same person, he may be charged with and tried at the same time for every such offence; and

(c) if a single act or series of acts is of such a nature that it is doubtful which of several offences the facts which can be proved will constitute, the accused person may be charged with having committed all or any of such offences and any number of such charges may be tried at once; or he may be charged in the alternative with having committed some one of the said offences.

(3) Every such complaint or information may be made or laid by the complainant or informant in person or by his counsel or other person authorized in that behalf.

(4) Every such complaint or information shall comply with the Indictment Rules (Cap. 221 sub. leg. C) in so far as those rules are applicable mutatis mutandis to any such complaint or information.” (Emphasis added)

41.  Section 10 repeatedly mentions the “offence” in a complaint or an information. It shows that the manner of making a complaint or that of laying an information governed by section 10 are both founded on the basis that the targeted person of the complaint or information is suspected to have committed an “offence”.

42.  However, the summons of the forfeiture application contained no accusation that the Claimants had committed any offence, which made it clear that it was not a complaint made or information laid under section 10.

43.  The contents of the forfeiture application lodged by the Commissioner on 24 February 2020 are as follows (The original text is in English only):

“I, WONG Wai-chuen (Ms), acting Superintendent of Customs & Excise, pursuant to Section 28 of the Import and Export Ordinance, Chapter 60, Laws of Hong Kong (Import and Export Ordinance), hereby make application to your Worship to forfeit the items listed in the annex (items 1-27).

The articles were seized as liable to forfeiture on 22 January 2018, under Section 27(1) of the Import and Export Ordinance. They have been claimed by : Claimant 1 (for items 1-13): So Ya Kau…Claimant 2)for items 14-27): So Hoi Po…”

44.  The English and Chinese versions of the summons issued by the Principal Magistrate on 19 May 2020 are as follows:

“SUMMONS TO CLAIMANTS FOR FORFEITURE of ARTICLE/VESSEL/AIRCRAFT/VEHICLE/THING SEIZED IN THE MAGISTRATES’ COURT AT EASTERN

WONG Wai-chuen For Commissioner of Customs and Excise (Applicant) and So Ya Kau (Claimant 1), So Hoi Po (Claimant 2)

Application has been made under Sec.28 of the Import and Export Ordinance, Cap.60 for application for forfeiture of the articles seized in Case No.ESCC 371/2019 as listed in the Annex.

This summons requires you to appear on Thursday, the 13^th day of August, 2020 at 9:30a.m. in Court No.6 of Eastern Magistrates’ Courts before such magistrate as may then be sitting regarding the hearing of the said application.”

「法庭收到一項關於案件編號ESMP 982/2020的申請，內容是希望根據香港法例第60章進出口條例第28節處理ESCC 371/2019之証物。

法庭藉此傳票要求你於二零二零年八月十三日（星期四）上午九時三十分，準時到達東區裁判法院第六庭，到時法官將會聆訊上述申請，你可派代表出席此聆訊。」

(Translation: “The Court received an application in relation to ESMP 982/2020 which sought to dispose of the exhibits in ESCC 371/2019 according to section 28 of the Import and Export Ordinance, Cap.60, Laws of Hong Kong.

This summons requires you to appear on Thursday, the 13^th day of August, 2020 at 9:30 a.m. in Court No.6 of Eastern Magistrates’ Courts where the magistrate will hear the said application. You may send a representative to attend the hearing on your behalf.”)

45.  Neither the Commissioner’s forfeiture application nor the summons of the forfeiture application issued by the Magistrate contains any complaint made, information laid, or charge brought against the Claimants in the summons. The Respondents’ criminal case had concluded 6 months before the summons of the forfeiture application was issued. Both Respondents were acquitted of all the charges. All the charges brought against them in that case, accusing them of using the two vessels and the equipment on board in committing criminal offences, had come to an end. The Commissioner had no basis to make complaints, lay information, or bring charges against the Claimants that are the same or similar in the process of the forfeiture application.

46.  Moreover, assuming the forfeiture application summons was issued on the basis that someone had made a “complaint” or laid an “information”, at the forfeiture application hearing, the Magistrate shall determine that forfeiture application pursuant to the procedures under section 19 of the MO, which regulates the “proceedings at hearing” before a magistrate. The contents of section 19 are as follows:

“19. Proceedings at hearing

(1) Where the defendant is present at the hearing, the substance of the complaint or the information (or the summons which has been issued under section 8 pursuant to such complaint or information) shall be read over to him, and explained if necessary, and he shall be asked whether he admits or denies the truth of the complaint or information. If the defendant admits the truth of the complaint or information, his admission shall be recorded as nearly as possible in the words used by him, and the magistrate shall convict him or make an order against him accordingly; but if he does not admit the truth of the complaint or information as aforesaid, then the magistrate shall proceed to hear upon oath the complainant or informant and such witnesses as may be produced in support of the complaint or information, and also to hear the defendant and such evidence as may be adduced in defence; and also to hear and examine such other witnesses as the complainant or informant may examine in rebuttal, if the defendant or his counsel has examined any witnesses or given any evidence other than as to the defendant’s general character.

(2) The magistrate, having heard what each party has to say and the witnesses and evidence so adduced, shall consider the whole matter and determine the same, and shall convict or make an order against the defendant or dismiss the complaint or information, as the case may be.

(3) If the magistrate convicts a defendant or makes an order against him, he shall thereupon make a minute or memorandum of such adjudication (for which no fee shall be paid), and he shall cause the same to be lodged with the magistrates’ clerk, who shall register the same as hereinafter provided.

(4) If the magistrate dismisses the complaint or information, it shall be lawful for him, if he thinks fit, on being required to do so, to make an order of dismissal of the complaint or information, and he shall give the defendant in that behalf a certificate thereof, which said certificate shall be a bar to any subsequent complaint or information for the same matters respectively against the same party.” (Emphasis added by me)

47.  The MO has not defined “defendant” for the purpose of section 19. Assuming the “defendant” in section 19(1) can be construed as including the “claimant” in a forfeiture summons, then the Magistrate must, in accordance with the statutory requirements, read over the “substance” of the summons to the two Claimants at the hearing of the forfeiture application “and ask him [them] whether he admits or denies [they admit or deny] the truth of the complaint or information”.

48.  However, looking at the contents of the summons set out above, the substance was clearly that the Magistrate “sought” to dispose of certain exhibits pursuant to section 28 of the IEO. If the Magistrate, after reading out the summons, asked the Claimants whether they would admit or deny the substance of the summons, the two Claimants would certainly be at a loss, not knowing how they could answer the question. More importantly, their answers would definitely not be admitting or denying the truth of the content of the summons.

49.  The above analysis supports the proposition that a summons without a substantive complaint or information is unable to meet the requirements in relation to “complaint” and “information” under section 19 of the MO and section 3(1)(a) of the CCCO.

Whether the “Claimants” are “defendants”

50.  Section 3 of the CCCO empowers a magistrate to award costs to a “defendant”. I have examined the definitions of “defendant” under that section as set out below to see whether that would include a “claimant” in a forfeiture application summons:  

“2. Interpretation … defendant includes —

(a) an accused person;

(b) a defendant served with a copy of a notice of prosecution under section 7D of the Magistrates Ordinance (Cap. 227);

(c) any person against whom an information or a complaint is laid or criminal proceedings are instituted; and

(d) in the case of a defendant who is appealing against conviction or any other finding or verdict made in respect of him or sentence, an appellant;”

51.  According to the contents of the forfeiture application summons, the Claimants were not charged with any offence, so they were obviously not defendants. The Claimants did not raise an appeal in the forfeiture application either, so they were not appellants. 

52.  A “defendant” under section 7D of the MO is the “defendant” as mentioned in “any public officer or body corporate authorized to prosecute in respect of an offence may file in a magistrate’s court a notice of prosecution and shall, within 14 days of such filing, serve a copy of that notice by post on the defendant” where “the penalty which may be imposed upon conviction for an offence does not exceed a fine of $10,000 and imprisonment for 6 months”. In the same way, a claimant in a forfeiture application summons obviously is not a “defendant” under this definition. Therefore, endeavours may only be made to incorporate a “claimant” into the definition of “defendant” under the CCCO by way of subsection (c), i.e. an information or a complaint is laid or criminal proceedings are instituted against the “claimant”.

53.  Regarding the element of “any person against whom criminal proceedings are instituted”, I also rely on the analysis and findings of Macrae J in the N case.

54.  Regarding the issue of definition of “criminal proceedings” in the said case, Macrae J placed much reliance on the following passages in the English case of Customs and Excise Commissioners v City of London Magistrates’ Court [2000] 1 WLR 2020^[5] where Lord Bingham J wrote：

“It is in my judgment the general understanding that criminal proceedings involve a formal accusation made on behalf of the state or by a private prosecutor that a defendant has committed a breach of the criminal law, and the state or the private prosecutor has instituted proceedings which may culminate in the conviction and condemnation of the defendant.

…

Although the respondents were suspected of criminal offences, no formal accusation had been made against any of them on behalf of the state or any private prosecutor and there were no proceedings in being which could have led to the conviction of the respondents of any breach of the criminal law or to their condemnation.  In my judgment the only answer which can be given to the question posed is ‘No’.”

55.  Macrae J held that the CCCO is an ordinance that needs to be strictly construed, pointing out that proceedings commenced under section 17A or 17B did not constitute “criminal proceedings” within the definition under the CCCO, as they would not lead to any of the consequences mentioned in Lord Bingham J’s judgment. Therefore, the magistrate was correct in ruling that he had no jurisdiction to make an order for costs. 

56.  In our present case, the forfeiture application summons did not contain any accusation against the Claimants that they had committed a criminal offence, (and) the relevant proceedings would not culminate in the conviction and condemnation of the Claimants. Applying the analysis and findings of Macrae J in the N case, forfeiture proceedings are certainly not “criminal proceedings” within the definition under the CCCO, and therefore the Claimants were not “defendants” within the definition under the Ordinance, and the Commissioner was not a “prosecutor” within the definition.

57.  As a matter of fact, under the interpretation section of the CCCO, “defendant” is also defined as any person “against whom an information or a complaint is laid”. If, in law, a forfeiture application constitutes “an information or a complaint” laid against the Claimants, the Claimants may then fit in the definition of a defendant. This brings us back to the issue of whether a forfeiture application in the proceedings commenced pursuant to section 27 of the IEO amounts to a complaint made to or an information laid before a magistrate. 

58.  I have analyzed and dealt with this issue above and decided that a forfeiture application in the proceedings is not an “information” laid or a “complaint” made to a magistrate.  Therefore, it follows that the Claimants do not fit in the definition of “defendant” under section 3 of the CCCO.

Whether the forfeiture proceedings are proceedings incidental to the disposal of exhibits in ESCC 371/2019

59.  Having given her verdict in ESCC371/2019 on 5 November 2019, the magistrate at trial of the criminal case made the following order in respect of exhibits P1-P85 of the case (including items 1-27 in the annex to the forfeiture application):

·     “Only P86-P94 to be kept in court file.

·           No order made in respect of P1-P85 for the time being.

·           All the defence exhibits to be kept in court file (Exhibit D2 to be replaced by copy, original to be returned to defence).

·           Parties to fix the date for the forfeiture proceedings later.^[6]”

60.  In the criminal case, the magistrate did not dispose of the exhibits produced, and it appears that she did not make any costs order either. What the magistrate said was that no order was made in respect of the exhibits for the time being.

61.  I have considered whether the forfeiture application proceedings can be understood as “proceedings incidental to” the criminal case, and is thereby subject to section 15 of the CCCO, so that the Magistrate was allowed, under section 15, to grant costs of the forfeiture application to the two defendants in ESCC 371/2019 after the Commissioner withdrew the forfeiture application. I am of the view that section 15 does not allow that for the reasons set out below.

62.  Section 15 of the CCCO reads:

“15. General principles

In any criminal proceedings —

(a) the costs that may be awarded by virtue of an order shall not be punitive but shall be such sums as appear to a court or a judge reasonably sufficient to compensate any party to the proceedings for any expenses properly incurred by him in the course of those proceedings, including any proceedings preliminary or incidental thereto;

(b) a court or a judge may have regard to any assessment laid before it or him for their assistance by any party to the proceedings of the amount of costs properly so incurred by any such party;

(c) an order as to costs shall be such as a court or a judge considers just and reasonable;

(d) the amount to be paid in pursuance of an order as to costs shall, unless an order for taxation is made under section 20, be specified in that order;

(e) the question of whether or not an order as to costs ought to be made in respect of any expenses properly incurred by any party to the proceedings in the course of the proceedings, including any proceedings preliminary or incidental thereto, may be adjourned until the end of those proceedings;

(f) a court or a judge may take into account any other order as to costs which has been made in respect of those proceedings.”

63.  The entirety of the provisions under section 15 merely set the procedural parameters as to the nature of the costs (non-punitive and reasonably sufficient for compensation), the coverage, the need to be just and reasonable, the need to specify the amount, the possibility of adjourning the disposal of costs until after other proceedings have been completed, and the option of taking into account other costs orders which have already been made when awarding costs in the ESCC case (sic).

64.  Section 15 does not stipulate under what circumstances a magistrate would have power to grant costs to a party. Section 15(e) only allows the magistrate in ESCC 371/2019 to deal with the costs of ESCC 371/2019 after the completion of the forfeiture application concerning the electronic products and items involved, and does not confer upon the Magistrate jurisdiction to grant costs to the Claimants in the forfeiture application lodged under the IEO after the forfeiture application is withdrawn.

65.  Be that as it may, if, after the forfeiture application proceedings had been completed, the defendants and the prosecutor in ESCC 371/2019 returned and appeared before the trial magistrate, the magistrate was entitled to continue dealing with the costs of that criminal case, and in the process consider any costs orders which may have been made in the forfeiture proceedings, and at last make a costs order in ESCC 371/2019 as the magistrate considered “just and reasonable”.

66.  I am of the view that section 15 does not confer upon the Magistrate jurisdiction to grant costs to the Claimants after the withdrawal of the forfeiture application under the IEO.

Whether the Appellant is entitled to state a case pursuant to section 105 of the MO in respect of the costs order made after the withdrawal of the forfeiture application

67.  Lastly, I will deal with a matter that was not directly raised by either party, but would leave an impact after my ruling that proceedings on a forfeiture application are not proceedings instituted by making a complaint, laying an information or bringing a charge, i.e. whether the Appellant was entitled to lodge this appeal by way of case stated pursuant to section 105 of the MO. 

68.  A prerequisite for section 105 is that the proceedings before a magistrate must be a “complaint, information, charge, or other proceeding” which the magistrate has power to determine in a summary way. As I have decided that forfeiture application proceedings are not proceedings instituted by way of a complaint, an information, or a charge, only “other proceeding” is applicable. 

69.  As I have decided that forfeiture application proceedings are proceedings that a magistrate has power to determine in a summary way, they are thus “other proceeding(s) which he (a magistrate) has power to determine in a summary way” under section 105. The Appellant has the right to appeal against the costs order made by the Magistrate in those proceedings by way of case stated. 

Conclusion

70.  I rule that a forfeiture application made to a magistrate under the IEO is not an “information” laid or a “complaint” made to a magistrate. The expression “deemed to be a complaint” under section 28(5) of the IEO is only valid within the framework of section 8 of the MO. As forfeiture application proceedings are not proceedings in which an “information” is laid or a “complaint” is made to a magistrate, and they are not “criminal proceedings” either, the Claimants in the forfeiture application proceedings are not “defendant” as defined under the CCCO, nor is the Commissioner a “prosecutor” as defined under the Ordinance. Therefore, section 3(1)(a) of the CCCO is inapplicable to the present case, and the provision does not confer upon the Magistrate the power to award costs to the Claimants after the Commissioner had withdrawn the forfeiture application.  

71.  The Magistrate had adopted a relatively broad and purposive interpretation of the expression “deemed to be a complaint” under the IEO and section 3 of the CCCO. With this approach, the Magistrate’s interpretation and the consequent conclusion are sensible and within reason. However, as pointed out by Macrae VP in the N case, the CCCO is an ordinance that must be strictly construed and understood. The Magistrate’s interpretation was excessively liberal. For that reason, my view is that her decision was wrong.

72.  A magistrate has no inherent jurisdiction to grant costs, and must rely on the power conferred by statute. The statutory provisions relied on by the Magistrate did not confer upon her the power to grant costs to the Claimants after the forfeiture application was withdrawn, nor did any other provisions did it. Therefore, my answers to Questions 1 and 2 raised in the case stated must be “yes” and “wrong” respectively. 

Costs

73.  Costs in a case stated under section 105 of the MO is governed by section 120 of the same Ordinance which reads:

“120. Provisions as to costs

(1) On any appeal to which section 105 or 113 applies, the judge may make such orders as to costs, as he may think fit, and may—

(a) where he allows the appeal, direct that there shall be included in any costs to be paid by the respondent to the appellant the costs properly incurred by the appellant in the proceedings before the magistrate, or such fixed sum as the judge may consider reasonable in respect of the costs so incurred by him;

(b) in any case, in which the appeal is from an order or determination in respect of or in connection with an offence, in lieu of directing a taxation of costs, fix the sum to be paid by way of costs by either party to the appeal,

and in fixing, for the purposes of this subsection, the amount of any costs to be paid to a party to an appeal shall have regard to his means.”

74.  I have allowed the appeal, so I can make such orders as to costs as I think fit. However, as I have not had the opportunity to hear submissions by the two Respondents as to their means in accordance with section 120(1), I can only make the following suggestions at the present stage:

(1)The two Respondents do pay the Appellant the costs of this appeal, to be taxed if not agreed.

(2)There be no costs order for the review hearing before the Magistrate.

(3)There be no costs order for any stage of the proceedings related to the withdrawal of the forfeiture application.

(4)The issue of costs shall be disposed of on paper after hearing (sic) the Appellant’s and the Respondents’ written submissions regarding costs (including submissions on the Respondents’ means) within 14 days after the judgment is handed down, and a formal costs order shall be made within a reasonable time. No court hearing is required. 

Translated by the Court Language Section of the Judiciary and vetted by Mr P Y Lo, Barrister-at-law.