THE QUEEN v. KO CHI YUEN

Criminal Law and Procedure - Drug Trafficking (Recovery of Proceeds) Ordinance Cap. 405 - whether repealed by Hong Kong Bill of Rights Ordinance Cap. 383.

IN THE HIGH COURT OF JUSTICE

CASE NO. 285 OP 1991

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RULING

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1. On the 12th of October this year the Defendant pleaded guilty to manufacturing a dangerous drug contrary to section 6(1)(a) of the Dangerous Drugs Ordinance, Cap. 134. The drug involved was methylamphetamine hydrochloride, commonly known as "ice", and the quantity which he admitted to manufacturing was 408.57 grammes.

2. On the same occasion he pleaded guilty to possession of a dangerous drug for the purpose of unlawful trafficking therein contrary to section 7 of the Dangerous Drugs Ordinance. The drug in question was again methylamphetamine hydrochloride and the quantity in his possession was 19.9268 kilogrammes.

3. These offences are "drug trafficking offences" for the purposes of the Drug Trafficking (Recovery of Proceeds) Ordinance ["the Ordinance"] as to which see sections 2(1) and Schedule I. References to a section in this ruling, unless the contrary appears, will be references to a section of the Ordinance.

4. Following the Defendant's conviction on his pleas of guilty, the Crown made formal application for a confiscation order under section 3 of the Ordinance. On the 16th of October this year I sentenced the Defendant to concurrent terms of seventeen years' imprisonment on each count.

5. Mr. Dunn, who appears for the Defendant, has raised a preliminary point of law, submitting that section 4(2) of the Ordinance has been repealed by section 3(2) of the Hong Kong Bill of Rights Ordinance [“the Hong Kong Bill”]. The basis of the submission is that the provisions of section 4(2) of the Ordinance do not admit of a construction consistent with section 8, Article 11 of the Hong Kong Bill.

6. I have heard argument as to where the burden of proof lies and as to what standard of proof, if any, is required of the Crown or the Defendant. Mr. Dunn is faced with the duty of advising his client as to how to deal with the allegations of fact which are set out in a statement tendered by the Crown pursuant to the provisions of section 5 of the Ordinance and he says that before he can properly do so, he needs a ruling on the issues which have been raised.

7. In a case such as this, where there si an application under section 3 of the Ordinance for a confiscation order and I have sentenced the convicted person to imprisonment for one or more drug trafficking offences as defined, it is provided by section 3(3) as follows:-

"(3) The court shall then determine whether the person has benefited from drug trafficking."

8. In the present case, it is an admitted fact that the Respondent has to a limited extent benefited from drug trafficking. Section 3(5) reads, and in it the word "he" refers to the Defendant:-

"(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."

9. In order to do that, I have to assess the value of the Defendant's proceeds of drug trafficking and the amount of those proceeds which may be realised at the time of any confiscation order I may make. Section 4 of the Ordinance reads, so far as is material for the purpose of this application, as follows, and I shall now proceed to read out the first part of section 4:-

"4(1) For the purposes of this Ordinance -

(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

(b) the value of his proceeds of drug trafficking is the aggregate of the values of the payments or other rewards.

(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.

(3) Those assumptions are -

(a) that any property appearing to the court -

(i) to have been held by him at any time since his conviction; or

(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,

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;

(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

(c) that, for the purpose of valuing any property received or assumed to have been received by him at any time as such payment or reward, he received the property free of any other interests in it.”

10. Subsections (4) and (5) are not relevant to the present proceedings.

11. It was submitted by Mr. Dunn on behalf of the Defendant that subsections (2) and (3) of section 4, which are interdependent, do not admit of a construction consistent with section 8, Article 11(1) of the Hong Kong Bill, cannot be justified and have been repealed by section 3(2) of the Hong Kong Bill.

12. Article 11(1) reads:-

“(1) Everyone charged with a criminal offence shall have the right to be presumed innocent until proved guilty according to law.”

Section 3(2) reads:-

“(2) All pre-existing legislation that does not admit of a construction consistent with this Ordinance is, to the extent of the inconsistency, repealed.”

13. Mr. Dunn referred to R v. SIN Yau-ming (1992) HKCLR 127 and to R. v. LEE Kwong-kut (1992) 2 HKCLR 76 in support of his contention that section 4(2) of the Ordinance has been repealed as being inconsistent with section 8, Article 11(1) of the Hong Kong Bill. Both cases related to statutory presumptions, express in the former and implied in the latter, designed to assist the prosecution to prove the guilt of a person charged with a criminal offence.

14. It was submitted by Mr. Bailey for the Crown that Article 11 of the Hong Kong Bill does not apply to an application for a confiscation order for the simple reason that such an application follows conviction so that a defendant is not then charged with a criminal offence and faces, in confiscation proceedings, no risk of a further conviction.

15. Mr. Bailey cited a number of examples from Canada of cases where it was held that section 11(d) of the Canadian Charter of Rights and Freedoms ["the Canadian Charter"] was inapplicable to proceedings where a person was not charged with a criminal offence.

16. In R. v. Milton et al and The Queen (1986) 32 CCC (3d) 159, a case in the British Columbia Court of Appeal, Craig J.A., giving the judgment of the court, said at page 170:-

"Counsel for the petitioner alleges also that the seizure and forfeiture contravene s. 11(d) of the Charter which provides:

11. Any person charged with an offence has the right

(d) to be presumed to be innocent until proven guilty according to law in a fair and public hearing by an independent and impartial tribunal;"

17. He went on to say:-

"The trial judge held that s.11(d) was inapplicable because none of the petitioners had been charged with an offence. Counsel for the petitioner submitted that this is too narrow an approach. I disagree. Section 11 means exactly what it says; that is, that the applicability of the various paragraphs depend on whether the person has been charged with an offence."

18. In R. v. Porter (1989) 48 CCC (3d) 252, a case in the Federal Court, Trial Division, Joyal J. said:-

"It is clear that s.11 only applies to a person charged with an offence. It is a condition sine qua non to the presumption of innocence, …"

19. In R. v. Langevin (1984) 11 CCC (3d) 336, a case in the Ontario Court of Appeal, the appellant was convicted of rape. After his conviction, on a plea of guilty, the Crown applied to have him declared a dangerous offender, pursuant to section 688 of the Criminal Code. The trial judge heard the application, found the appellant to be a dangerous offender and sentenced him to an indeterminate period of detention as he was then by section 688 empowered to do, in view of his finding.

20. One of the grounds of appeal was that section 689(2) of the Criminal Code provided that the application to have the appellant declared a dangerous offender:-

" ... shall be heard and determined by the court without a jury."

21. The appellant argued that the provision violated section 11 of the Canadian Charter.

22. In delivering the judgment of the Court, Lacourciere J.A. said:-

"Section 689(2) of the Code provides that an application under Part XXI "shall be heard and determined by a court without a jury."

The appellant argues that this violates s.11(f) of the Charter which provides as follows:

11. Any person charged with an offence has the right

(f) except in the case of an offence under military law tried before a military tribunal, to the benefit of trial by jury where the maximum punishment for the offence is imprisonment for five years or a more severe punishment;

Section 11(f) of the Charter applies only to persons "charged with an offence". As stated earlier, a person convicted is no longer a "person charged with an offence". Part XXI is concerned with the finding that an offender is a "dangerous offender" and relates to the sentence. It is part of the sentencing procedure.

..... In my view, s.11(f) is worded clearly and is confined to the "trial".

23. Mr. Bailey also cited in support of his argument the Canadian decisions in Lyons v. R. (1987) 37 CCC (3d) 1 and R. v. Vaillancourt (1988) 43 CCC (3d) 238.

24. In the present case, the Crown argues that since the Defendant, having been convicted, is no longer charged with a criminal offence, Article 11(1) has no relevance to the proceedings.

25. Mr. Dunn, referring to the discretionary assumptions in section 4 as presumptions, submitted that the presumptions must fail because a judge can arrive at a decision adverse to a defendant while there still exists a reasonable doubt in his mind. The presumptions, he said; violated the presumption of innocence. He quoted the words of Dickson C.J.C. in R. v. Oakes (1986) 26 D.L.R. (4th) 200 at page 222 as follows:-

"If an accused bears the burden of disproving on a balance of probabilities an essential element of an offence, it would be possible for a conviction to occur despite the existence of a reasonable doubt."

26. The Court in Oakes was concerned, as those words show, with a case where a defendant was charged with a criminal offence and where the law provided for mandatory statutory presumptions.

27. Mr. Bailey has submitted that this Court is not concerned with a defendant who is charged with a criminal offence and it is considering assumptions which the Court may, but not must, make, rather than mandatory presumptions, so that the authorities relied on by Mr. Dunn are irrelevant.

28. Mr. Dunn invited this Court to distinguish the Canadian cases to which I have referred, on the basis that they do not relate to confiscation proceedings. He went on to argue that though the Ordinance does not define benefiting from drug trafficking as an offence in itself, the effect of a finding that the defendant has benefited from drug trafficking is the equivalent of a further conviction and is followed by an additional punishment, to wit, a confiscation order.

29. Mr. Dunn says that Article 11 does apply because the confiscation proceedings are, in his submission, criminal proceedings because (a) the standard of proof which the Crown must meet is the criminal standard of proof beyond reasonable doubt; (b) because a confiscation order is appealable as a sentence; and (c) because a defendant who fails to obey a confiscation order, which according to him is itself a punishment, faces a substantial term of imprisonment, the machinery of enforcing payment being that which is used to enforce a fine rather than the machinery used to enforce a civil judgment.

30. Mr. Dunn cited the decision of the English Court of Appeal in David Dickens (1990) 91 Cr. App. R. 164 as authority for the proposition that it is for the Crown to prove beyond reasonable doubt that the Defendant has benefited from drug trafficking and the amount of such benefit.

31. In that case the Court was considering the provisions of the Drug Trafficking Offences Act, from which the Ordinance is derived. In delivering the judgment of the Court, the Lord Chief Justice said, at page 168:-

"In our judgment the context of the Act and the nature of the penalties which are likely to be imposed, make it clear that the standard of proof required is the criminal standard, namely proof so that the judge feels sure or proof beyond reasonable doubt."

32. Mr. Bailey submitted that the approach of the English Court of Appeal was flawed because, he said, the proceedings are not criminal proceedings, they are civil proceedings, and because there is no burden of proof on the Crown. He said that the Crown may assume an evidential burden under section 5 by producing a statement to assist the Court but it is not required at any stage to prove anything. The proceedings are, according to him, civil and of an inquisitorial rather than an adversarial nature.

33. Mr. Dunn's reply is that if Mr. Bailey's argument were correct, the judge would have to set about an inquisitorial exercise in order to ascertain the facts.

34. Mr. Bailey is quite correct in saying that having applied for an order under section 3, the Crown is not obliged to do anything more. It is not required to file a section 5 notice or call witnesses. It is, however, also true to say that in relation to a criminal prosecution, the Crown is not obliged to call evidence in support of a contested criminal charge.

35. If it chooses to call no evidence, the accused will be acquitted. Likewise, a plaintiff in a civil action, if he is content to have judgment entered against him, can decline to call evidence in support of his claim. But this has nothing to do with the burden or standard of proof.

36. I have noted that in a case of Dereck Malcolm Finch, apparently unreported, decided by the Court of Appeal in England in July 1992, Lloyd L.J. had this to say about an argument put forward by counsel for the Crown in an appeal against a confiscation order under the Drug Trafficking Offences Act 1986.

"The thrust of his skeleton argument, …… is that there is no burden on the prosecution under the Act, or on the defence, and that the decision of this court in Dickens 1990 2 WLR 1384 and Enwezor 1990 12 CAR (S) 661, and no doubt numerous other cases, were wrong. Mr. Mitchell submits that there is support for this argument in another recent decision in which he had appeared for the prosecution. We refer to Redbourne, decided on 19th June 1992.

We note that Mr. Mitchell seems to have adopted exactly the same line of argument in that case as in the present. As in the present case, he asked for an adjournment so that the case might be considered by a five judge court. This was declined. He then submitted that Dickens and Enwezor were wrongly decided, first because the burden of proof on the prosecution is not the criminal burden of proof, but the balance of probabilities; and secondly that there was in truth no burden on the prosecution at all."

37. Lloyd L.J. then noted that the Court in Redbourne declined to deal with the first point on the ground that it had been settled in Dickens and Enwezor.

38. As far as the second point was concerned, he noted that it had been unceremoniously rejected in Redbourne and that there was nothing in Redbourne which was inconsistent with Dickens, Enwezor or Cominskey 1990 93 CAR 227.

39. Mr. Bailey included a transcript of the judgment in Finch in the bundle which he helpfully provided to this Court, but he made no reference to it in argument although it does appear to indicate that the argument he was putting forward to this Court has twice been rejected by the English Court of Appeal.

40. I too reject that argument. If the Crown applies to the Court for an order against a subject to pay money to the Crown, then it is for the Crown to prove the facts which it alleges to be the justification for the order sought.

41. The confiscation proceedings are embedded in the sentencing process and a confiscation order is treated for the purposes of appeal as a sentence passed for the offence of which the person concerned has been convicted. That is provided in section 3(7).

42. A confiscation order may apply to an enormous sum of money. Failure to obey an order can result in a consecutive sentence of up to ten years' imprisonment. The Crown seeks the assistance of statutory assumptions albeit they/are not mandatory.

43. However one may classify the proceedings, and there has been considerable argument on the question of classification, the legislation is undoubtedly draconian. I respectfully adopt the view expressed in Dickens (supra), that the standard of proof required is proof beyond reasonable doubt.

44. Mr. Dunn submitted that a confiscation order is part of the sentence and these proceedings are therefore criminal. He cited R. v. Johnson (1990) 91 Cr. App. R. 332 in which it was held that a confiscation order under the Drug Trafficking Offences Act 1956 was made on conviction and, therefore, could be treated as part of the sentence and thus amenable to appeal.

45. There was nothing surprising in that, for the definition of "sentence" in the United Kingdom is so wide as to include a hospital order and even an order for costs (see Hayden (1975) 60 Cr. App. R. 304, [1975] 1 W.L.R 852). I have already mentioned that it is specifically provided in the Ordinance that for the purposes of appeal, a confiscation order shall be treated as a sentence.

46. Mr. Bailey argues that section 3(7) was necessary because a confiscation order is not a "penalty" for the offence of which the person concerned has been convicted. It may well be that section 3(7) was not strictly necessary because a confiscation order falls within the definition of "sentence" in section 80(1) of the Criminal Procedure Ordinance, which definition includes "any order made by a court in dealing with an offender, including a hospital order."

47. Mr. Dunn's point is that if a confiscation order is a sentence, the proceedings are criminal and Article 11, according to him, will then apply.

48. The next matter relied on by Mr. Dunn was that failure to pay can result in imprisonment. He points to Part III of the Ordinance, which deals with the enforcement of confiscation orders. Section 8(1)(a) provides that where a court makes a confiscation order "the court shall make an order fixing a term of imprisonment which he is to serve if any of the amount which he is liable to pay is not duly paid or recovered".

49. The section goes on to provide that the procedure for enforcing fines contained in section 114 of the Criminal Procedure Ordinance shall apply as if the order were a fine. There is a table set out in section 8(2) which prescribes maximum periods of imprisonment; depending on the amount unpaid. They range from twelve months' for an amount not exceeding $200,000 to ten years for an amount exceeding $10 million and they are to be consecutive to the sentence passed for the offence of which the defendant is convicted.

50. Mr. Dunn says that if the confiscation proceedings were truly civil in nature, this machinery for enforcing payment would not be available. His case is that such a term of imprisonment is an alternative form of punishment for the notional offence of benefiting from the proceeds of drug trafficking.

51. If one looks at the long title of the Ordinance, one sees that one of its objects is expressed to be " ... to provide for the tracing, confiscation and recovery of the proceeds of drug trafficking ....". It is clear from the scheme of the Ordinance that a confiscation order is to be treated as quite separate from any punishment imposed on the offender for the crime or crimes of which he stands convicted. The aim is to find and confiscate the proceeds of drug trafficking rather than to punish the person in whose hands they are found.

52. The unusually harsh provisions for enforcement of payment are evidently there to ensure, so far as possible, that an offender will pay up rather than face a consecutive term of imprisonment and keep the money. Just as the confiscation order is not a penalty for any drug offence committed by the defendant, so the term of imprisonment prescribed for non-payment is not a penalty for any such offence. It is a penalty for failure to obey the order of the Court.

53. Imprisonment is available to the Court in its civil jurisdiction as a sanction for disobedience to its orders. It cannot be said that a person facing an application for a confiscation order is "charged with a criminal offence" simply because if he disobeys any order made, he will go to prison.

54. Mr. Dunn's argument is based upon the proposition that a finding that a person has benefited from drug trafficking is a conviction of a criminal offence. Such a finding is not a criminal conviction. Indeed, the legislature has been at pains to ensure that a person facing an application for a confiscation order can make admissions in the proceedings without incriminating himself.

55. Section 5(6) provides that:-

"No acceptance by the defendant under this section that any payment or other reward was received by him in connection with drug trafficking carried on by him or another shall be admissable in evidence in any proceedings for an offence."

56. The present proceedings cannot result in a conviction of the Defendant for a criminal offence. Even if one were to classify the present proceedings as criminal proceedings, they would be post-conviction criminal proceedings.

57. Section 8, Article 11 of the Hong Kong Bill does not say "anyone the subject of criminal proceedings". It says "everyone charged with a criminal offence". The trial of a criminal charge ends upon conviction. The criminal proceedings continue until the completion of the sentencing process. If that process entails the resolution of issues of fact for the purpose of deciding what penalty, if any, should be imposed on conviction, the burden of proving the facts lies upon the Crown and the standard of proof is proof beyond reasonable doubt (see: R. v. McGrath & Casey (1983) 5 Cr. App. R. (S) 460, CSP L2.2 (n); R. v. Nabil Ahmed (1984) 6 Cr. App. R. (S) 391, CSP L2.2 (f); R. v. Gandy (1989) 11 Cr. App. R. (S) 564, CSP L2.2 (f).)

58. That process, following conviction, is nevertheless a post-conviction process and the convicted defendant cannot be regarded as being at that stage charged with a criminal offence simply because the Crown faces the criminal standard of proof in relation to part of the sentencing process.

59. I find that the Canadian cases to which I have earlier referred are not distinguishable simply because they were not concerned with confiscation proceedings. They are relevant and persuasive and I rule that section 8, Article 11 of the Hong Kong Bill has no relevance to the present proceedings because the defendant is not a person charged with a criminal offence. There is no issue of guilt or innocence to be tried by this Court in the confiscation proceedings.

60. I would mention two matters briefly. One is that Mr. Bailey invited me to consider some passages in Hansard but I have not found it necessary to do so. And he invited me to distinguish Dickens on the basis that there are differences between the English Act and our Ordinance. But having compared the Act and the Ordinance, I do not find that the differences are such as to lead me to think that it is necessary to distinguish the decision in Dickens.

61. In fact, I have found great assistance in the guidance given by the English Court of Appeal in Dickens and I respectfully adopt its conclusion that if the Defendant seeks to show that any statutory assumption is incorrect in his case, he must show on the balance of probabilities that it is incorrect.

62. That concludes my ruling and the Defendant is now required to indicate to what extent he accepts each allegation in the section 5 statement served by the Crown and, so far as he does not accept any allegation, to indicate any matters he proposes to rely on.