PACIFIC HARBOR ADVISORS PTE LTD AND ANOTHER v. WINSON FEDERAL LTD AND OTHERS

HCMP 532/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 532OF 2016

(ON AN INTENDED APPEAL FROM HCA NO 1257 of 2013)

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REASONS FOR JUDGMENT

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Hon Lam VP (giving the Reasons for Judgment of the Court):

1.  This is an application for leave to appeal against the decision of Deputy High Court Judge Le Pichon on 29 January 2016 concerning the examination of the 3^rd Defendant. By that decision, the learned judge held that the 3^rd Defendant could not refuse to answer 140 questions on the ground of privilege against self-incrimination [“PSI”]. The examination was scheduled to be resumed before the master on 25 July 2016 accordingly.

2.  The learned judge refused to grant leave to appeal on 23 February 2016.

3.  The 3^rd Defendant renewed the application for leave before us.

4.  Having considered the written as well as oral submissions of counsel, we refuse to grant leave.

5.  There is no dispute on the principles to be applied and they were alluded to by the judge by citing Renworth Ltd v Stephansen [1996] 3 All ER 244 and Den Norske Bank SA v Antonatos [1999] QB 271.  She also referred to Khan v Khan [1982] 2 All ER 60.  We wish to highlight that according to these authorities, there has to be a real risk of prosecution (not a theoretical or fanciful risk) before one can rely on PSI to refuse to answer questions in an examination.  In assessing whether there is a real risk, the matter must be looked at realistically and the court should consider the substance of the proceedings in light of all the materials before it.  

6.  It is plain from the judgment of the judge that this was the approach adopted by her.

7.  Based on the submissions of Mr Duncan SC (appearing with Mr Au for the 3^rd Defendant), the complaint of the 3^rd Defendant was that the judge did not apply this approach correctly in coming to the conclusion that there was no real risk when a statement from a witness to the Commercial Crimes Bureau of the Police referred to offences like conspiracy to defraud and tax evasion which are not covered by the protection in the Theft Ordinance.

8.  It should be noted that the judge made these findings: (1) the obvious offences are theft and false accounting under the Theft Ordinance (§44 of the judgment); and (2) unless the facts give rise to additional culpability, an additional charge would not be appropriate and “a contrived addition to other charges” is unrealistic and highly unlikely to happen (§53 of the judgment).

9.  The judge also referred to the judgment of Stephenson LJ in Khan v Khan [1982] 2 All ER 60 with regard to the charge of conspiracy to defraud being added to the charges under the Theft Act (§47 of the judgment).

10.  Having read the relevant materials, we agree with the judge that the obvious charges are those under the Theft Ordinance. Subject to what we shall say below, Mr Duncan failed to persuade us that the judge’s findings on the risk in respect of other charges being fanciful were not warranted by the evidence.

11.  In respect of conspiracy to defraud, we prefer to rest our decision on the principle in Khan v Khan, supra.  We agree with the observations of Stephenson LJ that the phrase “proceedings for an offence under this Ordinance” in Section 33(1) of the Theft Ordinance should be construed in the same way as the equivalent section under the Theft Act and, as such, encompasses the trial of offences under the Theft Ordinance even though the defendant in the same trial is also charged with other offences not under this ordinance.  See also the discussion of Morritt LJ in Renworth Ltd v Stephansen, supra at p.252 to 255.  We are of the view that on the materials before us, the risk of the 3^rd defendant being prosecuted for a conspiracy charge without also being charged with an offence under the Theft Ordinance is fanciful.     

12.  Different considerations apply to the tax evasion offence.  On the evidence, it is reasonably arguable that the risk is not fanciful and the Inland Revenue Department may seek a prosecution of such a charge independently from any prosecution of the offences under the Theft Ordinance.  We invited submissions on R v K (A) [2010] QB 343; Re Weihong Petroleum Co Ltd [2002] 1 HKLRD 541 and Secretary for Justice v FTCW [2014] 1 HKLRD 849; (2014) 17 HKCFAR 739 and counsel assisted us with some submissions on these authorities.  In the end, we came to the view that there should be fuller argument on this point which has some general ramifications on PSI in the context of an examination.  We therefore granted leave to appeal on this aspect of the case and gave directions for the expeditious hearing of the appeal on 16 June 2016. 

13.  The question of relevance was not before the judge and parties should not regard her decision as having determined the same.  Objection as to relevance can still be raised at the resumed examination before the Master.

14.  For these reasons, we granted leave to appeal in the limited extent as indicated and ordered the costs of the application to be in the cause of the appeal.