CAMP 543/2021
[2022] HKCA 454
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
MISCELLANEOUS PROCEEDINGS NO 543OF 2021
(ON AN INTENDED APPEAL FROM HCMP 54/2011)
________________________
IN THE MATTER OF THE ORGANIZED AND SERIOUS CRIMES ORDINANCE CAP 455
________________________
BETWEEN
THE SECRETARY FOR JUSTICE
Applicant
and
TAM KIT-I
Respondent
________________________
Before:
Hon Cheung and Chow JJA in Court
Dates of Written Submissions:
11, 24 February and 2 March 2022
Date of Judgment:
24 March 2022
________________
JUDGMENT
________________
Hon Chow JA (giving the Judgment of the Court):
INTRODUCTION
1. On 30 November 2021, the Respondent (Madam Tam) issued a summons (“the Summons”) seeking leave to appeal the order of Campbell-Moffat J dated 2 December 2019 (“the Order”) refusing to discharge a restraint order originally made on 14 January 2011 by V Bokhary J and continued on 30 March 2011 (“the OSCO Restraint Order”) under s 15(1) of the Organized and Serious Crimes Ordinance, Cap 455 (“the OSCO”).
2. On 6 January 2022, the court directed a rolled-up hearing of (i) the application for leave to appeal, and (ii) the substantive appeal if leave to appeal was granted.
3. Subsequently, in view of the COVID-19 situation in Hong Kong and with the agreement of the parties, the court directed that the application would be disposed of by way of written submissions. For this purpose, the court has received and considered (i) the Respondent’s submissions for leave to appeal / appeal (rolled up) dated 11 February 2022, (ii) the written submissions for the Applicant to oppose leave to appeal / substantive appeal (rolled-up) dated 24 February 2022, and (iii) the Applicant (Respondent)’s reply dated 2 March 2022. This is the court’s judgment on the application.
4. In what follows, unless the context indicates otherwise, references to “Section” or “s” shall be to the OSCO.
BASIC FACTS
(i) Background
5. Madam Tam is a permanent resident of the Macao Special Administrative Region (“the Macao SAR”). She was employed as the financial controller of a group of companies in Macao owned by Mr Ng Fok, a works contractor and a permanent resident in Macao, who had frequent business dealings with Mr Ao Man-long (“Mr Ao”), formerly the Secretary for Transport and Public Works of the Macao SAR. In that position, Mr Ao was in charge of various areas of public administration in the Macao SAR including public works, transportation, land, town planning, housing, civil aviation, port control, communication and environmental protection. He held this position until 6 December 2006, when he was arrested for various offences.
6. On 30 January 2008, 22 April 2009 and 31 May 2012, Mr Ao was convicted by the Court of Final Appeal of Macao of a total of 90 counts of corruption, money laundering and other related offences, and sentenced to 29 years’ imprisonment. He was found to have received large sums of money by way bribes and to have set up numerous companies and bank accounts as conduits to receive the bribes from various works contractors with whom he had corrupt dealings in Macao between December 1999 and December 2006. The accounts used by Mr Ao included:
(1) an account held in the name of Ecoline Property Limited at ICBC (Asia) Ltd, Hong Kong (“the Ecoline Account”), of which Mr Ao was one of the authorized signatories;
(2) an account held in the name of Mr Ao’s father at Hang Seng Bank, Hong Kong (“the Father’s Account”), of which Mr Ao was the sole authorized signatory, and
(3) an account held in the name of Best Choice Ltd at Hang Seng Bank, Hong Kong (“the Best Choice Account”), of which Mr Ao was the sole authorized signatory.
7. Madam Tam held an account, no 213794-001, at Wing Hang Bank, Hong Kong (“the Wing Hang Account”), which was opened on 1 March 2006. Investigations by the ICAC revealed the following transactions through the Wing Hang Account:
(1) 1st transaction involving HK$25 million -
(a) On 21 March 2006, Madam Tam transferred HK$25 million from her account at Banco Weng Hang SA to the Wing Hang Account.
(b) On 17 June 2006, 3 cash cheques drawn on the Wing Hang Account totalling HK$25 million were deposited into the Father’s Account.
(c) Such money was kept in the Father’s Account and eventually confiscated by the Macao Government through civil proceedings in Hong Kong.
(2) 2nd transaction also involving HK$25 million -
(a) Between 18 and 25 August 2006, 5 cash transfers each for HK$5 million, totalling HK$25 million, were made from the Ecoline Account to the Wing Hang Account.
(b) On 4 December 2006, 5 cash cheques totalling HK$2,600,000 were drawn on the Wing Hang Account and deposited into the Best Choice Account.
(c) The remaining HK$22.4 million remained in the Wing Hang Account.
(d) On 6 December 2006, when Mr Ao was arrested, 13 pre-signed and completed cheques, for amounts totalling HK$22,400,000, drawn on the Wing Hang Account were found in Mr Ao’s safe.
8. On 13 February 2007, V Bokhary J made a restraint order in respect of the Wing Hang Account against Madam Tam and Mr Ao in HCMP 59/2006 upon the application of the ICAC under s 14C of the Prevention of Bribery Ordinance, Cap 201, whereby the sum of HK$22,400,000 (as of 14 December 2006) in the Wing Hang Account was frozen. That restraint order was subsequently extended thrice on 1 February 2008, 20 January 2009 and 15 January 2010 (“the POBO Restraint Orders”). The last of the POBO Restraint Orders expressly provided that its operation would extend for a period of 12 months from the date thereof (in other words, it would expire on 15 January 2011).
9. On 23 February 2007, 4 February 2008, 4 February 2009 and 19 February 2010, Madam Tam was seen by ICAC officers in Macao for the purpose of service of the POBO Restraint Orders on her. On 4 February 2009 and 5 June 2009, the ICAC invited Madam Tam to come to Hong Kong for an interview in respect of alleged offences involving the Wing Hang Account. Madam Tam declined those invitations by claiming that she was suffering from illness. Her last visit to Hong Kong was on 6 June 2008. She departed Hong Kong on the same day. Madam Tam currently resides in Macao.
10. Legal advice from the Department of Justice to the ICAC was to the effect that there was insufficient evidence to charge Madam Tam with any corruption offence, but there was sufficient evidence to charge her with the offence of “dealing with property known or believed to represent proceeds of an indictable offence” regarding the 2nd transaction involving HK$25 million mentioned above contrary to s 25(1). An information was accordingly laid before a Magistrate at Eastern Magistracy. On 12 January 2011, Magistrate Marco Li issued a warrant for the arrest of Madam Tam for the said offence.
(ii) The OSCO Restraint Order
11. On 14 January 2011, upon the application of the Secretary for Justice, V Bokhary J made a restraint order against Madam Tam under s 15 in HCMP 54/2011, whereby Madam Tam was prohibited from in any way disposing of, dealing with or diminishing the value of, inter alia , the monies held in the Wing Hang Account (with a balance of HK$22,400,900 as at 22 December 2010). As earlier mentioned, that restraint order was subsequently extended by V Bokhary J on 30 March 2011. It is expressly provided in the OSCO Restraint Order that “it will remain in force unless it is varied or discharged by a further order of the Court”.
(iii) The Confiscation Application
12. On 24 May 2014, the Secretary for Justice made an application for a confiscation order (“the Confiscation Application”) in HCMP 1207/2014 for the sum of HK$22.4 million in the Wing Hang Account on the basis that Madam Tam had “absconded” under s 8(1)(a)(ii)(B). That provision states as follows:
“Where -
(a) either -
(i) …
(ii) proceedings for one or more specified offences have been instituted against a person but have not been concluded because the person -
(A) …
(B) has absconded; and
(b) an application is made by or on behalf of the Secretary for Justice for a confiscation order,
the Court of First Instance … shall act as follows.”
13. The Confiscation Application was heard by the Judge on 8- 9 September 2015 and 12 April 2016. By a written decision dated 10 August 2016 (“the 2016 Decision”), the Judge rejected the Confiscation Application. The Judge held that there were 6 pre-conditions to be satisfied before the court would look at the issue of what benefit the respondent (asset holder) had received and what, if any, order should be made, and one of the pre-conditions was that “[t]he asset holder must have absconded” (§§13-14 of the 2016 Decision). The Judge considered, however, that Madam Tam had not “absconded” within the meaning of s 8(1)(a)(ii)(B). Her reasoning for this conclusion was set out in the following passages of the 2016 Decision:
“[10] There is no need to go further than this part of OSCO because this application turns purely upon whether the respondent can be said to be an absconder within the meaning of section 8. Under section 2 ‘absconded’ is defined as ‘… absconded for any reason whatsoever, and whether or not, before absconding, the person had been (a) taken into custody or (b) released on bail.’
[11] Ms Chan submits that it is not necessary that an absconder be charged (and therefore remanded or bailed), before she is regarded as absconding. I do not agree. A simple reading of the plain language of section 2 indicates that proceedings have commenced because they refer to custody or bail , both of which can only happen after arrest or charge. Ms Chan’s interpretation of that section suggests that it was intended to cover situations where neither custody nor bail were in place i.e. no steps of prosecution have been taken. My reading of the section suggests that it is not necessary that the absconder be in custody, she could also abscond if on bail. In other words, some steps towards prosecution must have taken place even if those steps are only at the stage of police bail rather than court bail. That reading of the definition, in my mind, sits comfortably with the fact that section 8 requires that proceedings have been instituted at section 8(1)(a)(ii). I do not read that requirement to mean ‘have been instituted ’ at the time of the application for confiscation rather than at the time of the absconding. There was no warrant issued on 6 June 2008.[1]
[12] Ms Chan also relies upon the Oxford English Dictionary definition of abscond: ‘to go away suddenly and secretly, especially in order to avoid arrest ’. She argues that the prospect of prosecution is sufficient and no more is required. She does not say what circumstances amount to a prospect of prosecution nor how imminent that prosecution should be in the mind of the absconder given that the warrant was not issued for some two and a half years. But even if that were the case, and knowledge of imminent prosecution could be proved against the respondent, then the applicant would still need to show that the respondent went away ‘suddenly and secretly ’ in anticipation of imminent action by the prosecuting authorities. Was that the situation on 6 June 2008? I think not. Hong Kong is not the respondent’s place of residence. She travelled here for the day. She did not spend the night here. We do not know why she travelled here at that time but we know she arrived and later she left. There is no evidence that anything occurred during that time which would put the respondent on notice of imminent arrest as opposed to her state of mind at any other later time of which there is some evidence before the court. Indeed, it was not the intention of the authorities to arrest her at that time. Why then is it said that she absconded ‘suddenly and secretly ’ on 6 June 2008, when she returned home that day. There was nothing sudden nor secret about the respondent returning to Macao. What is the mens rea required? Surely the respondent must be attributed with an intention to abscond because there is the additional requisite of wishing to avoid arrest? But there was no arrest to avoid at that time and so the prosecution must be suggesting that it extends to an intention to avoid arrest at some unknown future date no matter how far in the future that may be. That cannot be right.
[17] At the time that the respondent left this jurisdiction, whilst she may have been aware of the proceedings against Ao, there was nothing before the court to show that she was aware of proceedings to be instituted against her. That came after her return to Macao and is clearly why she chose not to return. Nor was there any evidence before the court to show that her return to Macao was either sudden or secret. I also find that proceedings must be instituted or imminent and within the knowledge of the absconder before someone can be said to be seeking to evade arrest…
[18] Accordingly, I conclude the respondent has not absconded and this application fails. However, the Restraint Order made under HCMP 54/2011 remains extant …”
(iv) The Discharge Application
14. On 31 January 2019, Madam Tam issued a summons (“the Discharge Application”) in HCMP 54/2011 seeking, inter alia , an order that:
(1) the OSCO Restraint Order be discharged; or
(2) alternative to (1) above, the OSCO Restraint Order be varied and limited in its scope so as to cover only Madam Tam’s Wing Hang Account and the credit balances therein.
15. The Discharge Application was heard by the Judge on 28-29 May 2019. By a written decision dated 2 December 2019 (“the 2019 Decision”), the Judge rejected the Discharge Application save for the application to vary which was not opposed by the Secretary for Justice. Five grounds were advanced on behalf of Madam Tam in support of the Discharge Application:
(1) The Secretary for Justice’s application dated 14 January 2011 for the OSCO Restraint Order was a misuse of power under s 15.
(2) The use of the words “without limit of time” was also a misuse of the power under s 15. Such powers were intended for temporary restraint of assets pending trial.
(3) There was material non-disclosure in January 2011, which had continued to date.
(4) The OSCO Restraint Order was automatically discharged under s 15(5)(b), when the court refused an application by the Secretary for Justice for a confiscation order under s 8(1)(a)(ii)(B) in HCMP 1207/2014.
(5) In any event, the OSCO Restraint Order was too broadly drawn. The property identified was in excess of jurisdiction and disproportionate.[2]
16. For the purpose of this judgement, it is only necessary for us to consider the 4th ground (automatic discharge) relied upon by Madam Tam and how it was disposed of by the Judge at §§17-20 of the 2019 Decision, as follows:
“[17] Mr Kat submits that the OSCO regime protects against repeated attempts to apply for restraint or confiscation. There was an application in 2014 to obtain a Confiscation Order under what has been referred to as the ‘absconder’ proceedings in accordance with section 8(1)(a)(ii)(B), which was unsuccessful. He submits that the dismissal of that application under HCMP 1207/2014 concluded the proceedings in respect of the sums under the OSCO [Restraint Order] and, in the absence of fresh proceedings, by reason of section 15(5)(b), the OSCO [Restraint Order] is automatically discharged.
[18] The applicant, in response, submits that a clear reading of section 15(5)(b) indicates that a RO ‘shall be discharged on the conclusion of the proceedings or application concerned’. Mr Li accepts that ‘proceedings’ clearly refers to criminal proceedings and ‘application’ refers to an application for a Confiscation Order under section 8(1)(a)(ii) or (7A), which includes what has been referred to as the ‘absconder’ proceedings under section 8(1)(a)(ii)(B). He maintains however that none of the incidents under section 2(16) have occurred despite the prior ‘absconder’ proceedings. For this he relies upon section 2(16A)(a), which reads:
‘An application for a confiscation order made in respect of a defendant where section 8(1)(a)(ii) or (7A) is applicable is concluded -
(a) if the Court of First Instance or the District Court decides not to make such an order, when it makes that decision.’
[19] Although an application was made for a Confiscation Order under Order 117, rule 3A pursuant to section 8(1)(a)(ii)(B) of OSCO, in the event, Mr Li maintains that those proceedings turned upon the issue of whether respondent could be said to be an absconder. In other words, was section 8(1)(a)(ii)(B) applicable in order to be able to maintain the application. The application was unsuccessful because this Court found that the respondent did not fall to be construed as such. As she was not an absconder, section 8(1)(a)(ii)(B) was not applicable and therefore section 2(16A) does not come into play. Neither does section 15(5)(b).
[20] Even if it had been the case, the plain wording of the [2016] Decision was that the [OSCO Restraint Order] remained extant. This was the position of both parties after hearing them specifically on the point. It is not now open to the respondent to seek to go behind that concession made on her behalf by those she instructed. Accordingly, there has been no discharge.”
17. In short, the Judge gave 2 reasons for rejecting the Automatic Discharge Ground, namely:
(1) since Madam Tam was not an “absconder”, s 8(1)(a)(ii)(B) was not applicable to her, and hence there was no “conclusion” of the relevant application under s 15(5)(b); and
(2) in any event, Madam Tam had made a “concession” in the Confiscation Application that the OSCO Restraint Order would remain “extant” and it was not open to her to go back on that concession.
18. On 16 November 2021, the Judge refused to grant Madam Tam leave to appeal the 2019 Decision.
THE PRESENT APPLICATION
19. By the Summons issued on 30 November 2021, Madam Tam renewed her application for leave to appeal. Three grounds of intended appeal are raised in the draft notice of appeal attached to the Summons. They are summarized at §13 of the Respondent’s submissions for leave to appeal / appeal (rolled up) dated 11 February 2022, as follows:
(1) The Judge misconstrued and misapplied the provisions of the OSCO to permit a restraint order to be imposed on an individual not resident or domiciled in Hong Kong, indefinitely or in perpetuity, for the purpose of compelling attendance in Hong Kong on pain of confiscation, and contrary to Articles 6 and 105 of the Basic Law.
(2) The OSCO Restraint Order was automatically discharged in accordance with the OSCO upon the conclusion of the Secretary for Justice’s application or proceedings in HCMP 1207 of 2014 (ie the Confiscation Application) for a confiscation order pursuant to s 15(5)(b).
(3) The OSCO Restraint Order was obtained and thereafter continued for the purpose of indefinite restraint and ultimate confiscation, which was a misuse or abuse of the OSCO provisions and powers.
GROUND (2) - AUTOMATIC DISCHARGE
20. For the purpose of disposing of the present application, we need only consider Ground (2), which raises the question of whether, upon the true construction of the OSCO and in the events which have occurred, the OSCO Restraint Order has been discharged automatically under s 15(5)(b).
21. The OSCO is an Ordinance “to create new powers of investigation into organized crimes and certain other offences and into the proceeds of crime of certain offenders; provide for the confiscation of proceeds of crime; make provision in respect of the sentencing of certain offenders; create offences relating to the proceeds of crime or property representing the proceeds of crime; and for ancillary and connected matters” (see the long title to the OSCO).
22. The OSCO provides for a statutory regime for (i) the confiscation of proceeds of crime under Part III, and (ii) enforcement of confiscation orders under Part IV. Part III of the OSCO concerns the making of confiscation orders in specified circumstances (the details of which it is not necessary to examine in this judgment), while Part IV concerns the making of, inter alia , restraint orders.
23. Section 14(1)(a), in Part VI of the OSCO, provides that the power conferred on the Court of First Instance by s 15(1) to make a restraint order is exercisable where -
“(a) Proceedings have been instituted in Hong Kong against the defendant for a specified offence[3]
(i) an application for a confiscation order has been made in respect of the defendant where section 8(1)(a)(ii) or (7A) is applicable; or
(ii) an application has been made under section 20(1A) in respect of a confiscation order made against the defendant”.
24. In other words, the Court of First Instance’s power to make a restraint order may be exercised where -
(1) proceedings have been instituted against a person for a specified offence (as defined in s 2(1)); or
(2) an application has been made for a confiscation order or in respect of a confiscation order against that person.
25. In either situation, the purpose of a restraint order is to serve as a temporary measure to freeze the assets of a person pending the making of a confiscation order. That this is so is made clear in s 19(2), which provides that the powers to make, inter alia , a restraint order under s 15 “shall be exercised with a view to making available for satisfying the confiscation order or, as the case may be, any confiscation order that may be made in the defendant’s case the value for the time being of realisable property held by any person by the realisation of such property”.
26. In Secretary for Justice v Tam Lam Chuan [2005] 3 HKC 545, §15, Ma CJHC (as he then was) explained the position as follows:
“One of the main objects of OSCO is to tackle the proceeds of crime. It finds a parallel in the Drug Trafficking (Recovery of Proceeds) Ordinance, Cap.405 which deals with the proceeds of drug trafficking. Like that ordinance, OSCO makes provision for confiscation orders: see Part III of the Ordinance. We are in this appeal concerned with the making of restraint orders, the granting and operation of which are governed by sections 14 and 15 in particular of OSCO. As section 19(2) makes clear, the power to grant a restraint order (a power conferred on the Court of First Instance) is one that is exercisable with a view to the making of a confiscation order. In other words, a restraint order is a temporary measure used to freeze the assets of a person against whom a confiscation order may in due course be made.”
27. As a temporary measure, a restraint order is not intended to be maintained permanently or indefinitely. Section 15(5)(b) expressly provides that a restraint order shall be discharged “on the conclusion of the proceedings or application concerned”.
28. Section 2(16), (16A) and (16B) defines the circumstances in which proceedings for an offence, an application for a confiscation order, and an application in respect of a confiscation order are treated as being “concluded”. Of relevance for the present purpose is s 2(16A) relating to the conclusion of an application for a confiscation order. That subsection states as follows:
“An application for a confiscation order made in respect of a defendant where section 8(1)(a)(ii) or (7A) is applicable is concluded –
(a) if the Court of First Instance or the District Court decides not to make such an order, when it makes that decision; or
(b) if such an order is made as a result of that application, when the order is satisfied.”
29. It is not in dispute that the Confiscation Application is an “application concerned” in relation to the OSCO Restraint Order for the purpose of s 15(5)(b).[4]
30. Section 8(1)(a) under Part III of the OSCO sets out certain basic pre-conditions which must be satisfied before the court may make a confiscation order. Those pre-conditions are either -
(i) in proceedings before the Court of First Instance or the District Court a person is to be sentenced in respect of one or more specified offences (as defined in s 2(1)) 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; or
(ii) proceedings for one or more specified offence have been instituted against a person but have not been concluded because the person -
(A) has died; or
(B) has absconded.
31. As earlier mentioned, the Secretary for Justice’s application for a confiscation order against Madam Tam was based on the contention that she had “absconded” within the meaning of s 8(1)(a)(ii)(B). The Judge held against that contention. It follows that the condition in 8(1)(a)(ii)(B) was not satisfied, and the Confiscation Application failed.
32. In our view, it does not follow from the fact that the condition in 8(1)(a)(ii)(B) was not satisfied, or, in the Judge’s words, “section 8(1)(a)(ii)(B) was not applicable”, that the Confiscation Application was not concluded. It does not seem to us to matter what may be the reason why the Confiscation Application failed. The fact remains that the Judge decided not to make the confiscation order sought by the Secretary for Justice, thereby concluding the application. There was no appeal against the 2016 Decision of the Judge. We consider it to be clear that there was “conclusion” of the Confiscation Application and, by the operation of s 15(5)(b), the OSCO Restraint Order was accordingly discharged.
33. The Judge’s alternative reason for refusing to discharge the OSCO Restraint Order was that there was a concession made by or on behalf of Madam Tam in the Confiscation Application that the OSCO Restraint Order would remain “extant”. Mr Nigel Kat, SC, who appears for Madam Tam in the present application but not in the Confiscation Application[5] , says that “[n]either the vires of the [OSCO Restraint Order] nor its discharge by operation of law was argued … The point was left open, to be argued on another occasion”.[6]
34. Having reached the above conclusion, it becomes unnecessary for us to consider Grounds (1) and (3) in Madam Tam’s draft notice of appeal.
DISPOSITION
35. Madam Tam’s application for leave to appeal the Order is granted. We direct Madam Tam to file and serve a notice of appeal in the form of the draft attached to the Summons within 14 days. Upon the filing and service of the notice of appeal, the appeal shall be allowed, the Order shall be set aside, and a declaration shall be granted that the OSCO Restraint Order was discharged upon the conclusion of the Confiscation Application on 10 August 2016, without any further order of the court. We also make an order nisi that the Secretary for Justice shall pay Madam Tam’s costs here and below (including the costs of the application before the Judge for leave to appeal), to be taxed if not agreed, with certificate for 2 counsel. The order as to costs shall become absolute upon the expiration of 14 days from the date of this judgment unless the Secretary for Justice shall apply to vary the same prior to the expiration of the 14-day period.
(Peter Cheung)
(Anderson Chow)
Ms Betty Fu, Assistant Director of Public Prosecutions (Ag.) and Mr Douglas Lau, Public Prosecutor, of Department of Justice, for the Applicant
Mr Nigel Kat, SC, Mr Paul Wu and Mr Benson Tsoi, instructed by H.M. Tsang & Co., for the Respondent
[1] The date that Madam Tam last left Hong Kong lawfully.
[2] See §7 of the 2019 Decision.
[3] The expression “specified offence” is defined in s 2(1) to mean: (a) any of the offences specified in Schedule 1 or Schedule 2 to the OSCO; (b) conspiracy to commit any of those offences; (c) inciting another to commit any of those offences; (d) attempting to commit any of those offences, or (e) aiding, abetting, counselling or procuring the commission of any of those offences.
[4] See §18 of the 2019 Decision.
[5] Mr Paul Wu appears for Madam Tam in both the Confiscation Application and the present application.
[6] See §19 of the Applicant (Respondent)’s Reply dated 2 March 2022.