THE ATTORNEY GENERAL v. KO SAI-MAN AND OTHERS

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J U D G M E N T

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Kempster, JA (giving the judgment of the Court):

1. This is an appeal by the Attorney General, on behalf of the Government of the United States of America, from a decision of Mayo J given on 29 March 1991 refusing an application to continue a Restraint order which had been made by Bokhary J on 4 September pursuant to s 10 of the Drug Trafficking (Recovery of Proceeds) Ordinance (Cap 405) as modified by the Drug Trafficking (Recovery of Proceeds) (Designated Countries and Territories) Order 1991.

2. As is recited in the preamble, the ordinance, fully enacted on 1 December 1989, provides, in relation to criminal proceedings in the Colony, "... for the tracing, confiscation and recovery of the proceeds of drug trafficking ...". By the terms of the 1991 Order, made on 8 January 1991 under s 28, the Governor-in-Council directed that subject to modifications specified in Schedule 2 the Ordinance should apply to the external confiscation orders of the United States of America (a "designated country") and to proceedings which had been or were to be instituted in that country which might result in the making of an external confiscation order by its courts. An "external confiscation order" is defined, by s 28(4) and by s 3(1) as modified, as "an order made by a court in a designated country for the purpose of recovering payments or other rewards received in connection with drug trafficking or their value". By s 3(2) "... the reference to an order includes any order, decree, direction or judgment, or any part thereof howsoever described".

3. Section 10(1) of the modified ordinance allows the High Court of Hong Kong "by order (in this Ordinance referred to as 'restraint order')" to "prohibit any person from dealing with any realisable property, subject to such conditions and exceptions as may be specified in the order". By s 10(4)(a) such an order "may be made only on an application by or on behalf of the government of a designated country .." and by s 10(2)(a) where such an application "relates to an external confiscation order made in respect of specified property, to the property which is specified in that order ... " which, by s 7(1), constitutes "realisable property".

4. The appellant contends that an external confiscation order was made in respect of specified property by the issue on 16 October 1991 by the United States District Court for the Eastern District of New York of a "Warrant for Arrest of (specified) Articles in Rem" directed to the Marshal of that District. It recites a "verified amended complaint in rem" brought by the United States of America to condemn and forfeit the same identified property constituting shares, accounts, monies and other personal property said to have been bought with the proceeds of drug trafficking and requires notices to be given to all parties claiming the assets in question. Four potential claimants, including three who are respondents to this appeal, are named.

5. In our opinion the warrant, directed to realisable property as defined by s 7(1) of the ordinance as modified, was an order plainly within the ambit of ss 28(4) and 3(1). Contrary to the view of Mayo J there is no requirement in the context of external confiscation orders that there should be criminal proceedings on foot or that the order should be "final"; as is obligatory for registration under s 29(1)(a) and realisation under s 12(1). In saying that it had been submitted to him that the order of the United States District Court relied upon was a final order the judge was, we were told, under a misapprehension.

6. We do not consider it presently of significance that at an early stage application was made for the Restraint order on the footing that proceedings for an external confiscation order "were to be instituted".Section 9(2) allows the Nigh Court to exercise its powers to make such an Order where it "is satisfied that proceedings are to be instituted in a designated country ... and it appears to the court that an external confiscation order may be made in them". This suffices to dispose in the appellant's favour of the issue raised by the Respondents' Notice and we do not propose to express any opinion in relation to the alternative ground of appeal based on the judge's finding that there was no defendant in the United States proceedings.

7. We allow the appeal and, in the absence of any reference to the application of Ko Sai Man and Chiu Kim Chun dated 18 November 1991 to vary, order that the Restraint Order granted on 4 September 1991 be restored. We also make an order nisi that the appellant should have his costs here and below.