HKSAR v. Y

HCMA551/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO.551 OF 2003

(ON APPEAL FROM ESMP 709 OF 2003)

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J U D G M E N T

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1. This is an appeal against a magistrate's refusal to order the return of the appellant's travel documents pursuant to an application made by the appellant under the provisions of section 17B(1) of the Prevention of Bribery Ordinance, Cap.201 ("the Ordinance").

2. Those documents had been originally surrendered by the appellant in compliance with an order obtained by the Independent Commission Against Corruption ("ICAC") under the provisions of section 17A of the Ordinance on 10 February 2003 following his arrest on 8 February 2003. The appellant has in fact made two unsuccessful applications under section 17B for the return of those documents. The first was on 23 April 2003 and the second, which is the subject of this appeal, on 16 May 2003.

3. For the purpose of those two applications, the appellant made two affirmations. Both are before me for the purpose of this appeal, but I bear in mind that the ruling appealed against is the refusal of the magistrate to order the return of the appellant's travel documents on 16 May 2003.

4. As an initial matter this appeal was heard in chambers. That is a practice previously adopted by this court in dealing with such appeals. In my view, such a practice is correct. Applications by the ICAC for the surrender of a suspected person's travel documents are originally dealt with under section 17A of the Ordinance in chambers : see section 17A(7), and any subsequent application by that person for the return of those travel documents pursuant to section 17B of the Ordinance is also dealt with in chambers : see section 17B(8)(a).

5. It is obviously the intention of the legislature that proceedings associated with the surrender and return of an arrested person's travel documents are dealt with in chambers to preserve the secrecy of the circumstances of an ICAC investigation into a corruption suspect. That intention is not a one-way street simply so as to benefit the investigators by not having the details of their investigation revealed so as to compromise it, but is also intended to benefit the suspect by ensuring the fact an investigation is taking place into his suspected involvement in a bribery offence does not get released prematurely and unnecessarily into the public arena and thereby prejudice his personal and working life.

6. While there is no express enactment requiring appeals from unsuccessful section 17B applications to be heard in chambers, it would make no sense at all if such appeals were held in open court. To do so would immediately undermine and defeat the legislative intent that a magistrate deal with section 17A and 17B matters in chambers.

7. Section 17B(8) of the Ordinance states that Part VII of the Magistrates Ordinance, Cap.227, i.e. the provisions of that Ordinance dealing with appeals from a magistrate's order or determination shall apply to the present proceedings "with necessary modifications". In my judgment, one such necessary modification is that these proceedings be conducted in chambers.

8. So far as the present appeal is concerned, the application made by the magistrate for the return of the appellant's travel documents under the provisions of section 17B of the Ordinance requires the applicant to establish that a refusal to grant the application would cause him unreasonable hardship.

9. Section 17B is in these terms :

"(1) A person who has surrendered a travel document under section 17A may at any time make application in writing, either to the Commissioner or to a magistrate or both for its return, and every such application shall contain a statement of the grounds on which it is made.

(2) A magistrate shall not consider an application made under subsection (1) unless he is satisfied that reasonable notice in writing of it has been given to the Commissioner.

(3) The Commissioner or a magistrate shall only grant an application made under subsection (1) where the Commissioner or the magistrate, as the case may be, is satisfied that having regard to all the circumstances, including the interests of the investigation referred to in section 17A(1), a refusal to grant the application would cause unreasonable hardship to the applicant."

10. The unreasonable hardship relied upon by the appellant before the magistrate so as to satisfy the provisions of section 17B(3) was set out in his affirmations of 17 April 2003 and 10 May 2003. He said he was the controlling shareholder and chief executive of a holding company which through a wholly-owned subsidiary was involved in a development project in Shenzhen. He said that various banks behind the project were concerned at the growing debts of that project and his presence in Shenzhen and the PRC was required to negotiate with those banks about a restructuring of that debt. He said he had to personally attend those meetings, and to be prevented from doing so amounted to an unreasonable hardship.

11. Before proceeding I wish to emphasise one matter. That is that the present appeal is solely an appeal against the magistrate's order of 16 May 2003 dismissing the appellant's second application.

12. I emphasise that because not only a considerable part of the material before me, including the appellant's two affirmations of 17 April and 10 May 2003 but also argument advanced on his behalf referred to both of his unsuccessful applications under section 17B of the Ordinance.

13. A person may, it seems to me, given changes in circumstances, make a number of applications under the provisions of section 17B. But any appeal launched pursuant to section 17B(8) of the Ordinance is not a compendium of all such unsuccessful applications. Any appeal must deal with only one such unsuccessful application and be grounded on the material produced for the purposes of that application and the magistrate's reasonings in refusing that particular application. Accordingly, I treat this as an appeal against the magistrate's decision of 16 May 2003.

The present appeal

14. Mr Lam for the appellant relies on two specific grounds of appeal. They are :

(1) that the appellant was the legal representative of the development company responsible for the Shenzhen project and that by finding that his not being able to personally attend upon the PRC banks and negotiate that company's debts to those banks was not an unreasonable hardship the magistrate was wrong in law; and

(2) that the magistrate arrived at her decision without being able to consider all of the circumstances of the case, including the interest of the ICAC investigation, as required by section 17B(3) and was accordingly again wrong in law.

15. So far as the first ground is concerned, the magistrate had found that another person could be appointed or could have been appointed in the stead of the appellant as the legal representative of the development company so as to negotiate with the creditor banks and so remove any reason or necessity for the appellant to be able to travel to China and to Shenzhen in particular. The magistrate said in this regard in her Statement of Findings that in her view adequate provision could be made for the replacement of the appellant as the legal representative of the development company in Shenzhen. In arriving at that conclusion the magistrate had carefully examined the Articles of Association of the appellant's holding company as annexed to his affirmation and the availability of the appellant's co-directors to act in the capacity of the legal representative of the development company.

16. She pointed out also in that regard that as the appellant was the majority shareholder of the holding company and it wholly owned the development company the appellant would and could effectively control all the decisions of any legal representative.

17. Mr Lam did not convincingly challenge the magistrate's findings in this regard as a matter of law. He was unable to demonstrate before me how the magistrate's findings, so far as this particular aspect of the case was concerned went against or were unsupported by the evidence before her.

18. Rather Mr Lam argued that the magistrate's findings failed to give due weight to the realities of the appellant's company's circumstances. Mr Lam says that the appointment of another legal representative for the purpose of the negotiations between the development company and the creditor banks simply failed to properly take into account how necessary the appellant's personal presence was in such negotiations particularly where sums in the vicinity of RMB1.6 billion may have been involved.

19. With respect to Mr Lam's submission the magistrate did consider the practicalities of the situation. Firstly, she considered the documents provided by the appellant in support of his application and from those documents concluded that much of the debt owed to the creditor banks was very old debt indeed in the sense that the banks had initially demanded repayment some years ago. Various court orders, some uncertain in effect, had been made by mainland courts in favour of the creditor banks some time ago. In short, the magistrate concluded that the situation had festered for some two years or more, and that there was no convincing evidence that the debt situation had grown more urgent recently and that the creditor banks required a meeting on the Mainland in the near future. That meant that the factual basis of the magistrate's decision was that there had not been demonstrated any pressing need for anyone, whether the appellant or any other appointed legal representative of the development company, to go to Shenzhen to negotiate with the banks.

20. Given the expiry of the original section 17A order on 9 August 2003, the magistrate in my view rightly concluded that the appellant had failed to demonstrate that his personal presence was required in dealings with the creditor banks in Shenzhen during the period of time of the surrender of his travel documents.

21. In this regard, in her Statement of Findings, the magistrate said :

"In paragraph 11 of the 2nd Affirmation, the Appellant alleged that it was of paramount importance for him to attend personal meetings with the representatives of the banks in Shenzhen. As explained above, there was no suggestion from any bank that a personal meeting was required. Further, Shenzhen is literally adjacent to Hong Kong and there was no suggestion that it was impossible to arrange for a meeting to be held in Hong Kong with the bank representatives."

22. In my judgment, that was a finding adequately supported by evidence before the magistrate and indeed on that evidence the only proper finding open to her. There is no merit in the first ground of appeal.

23. So far as the second ground of appeal is concerned, Mr Lam argues that the provisions of section 17B(3) require the magistrate to take into account "all the circumstances, including the interests of the investigation for which the passport was surrendered" in determining whether a refusal to return the passport or travel document would cause unreasonable hardship to the appellant. He says that the magistrate must have failed to do that because there was no suggestion of any evidence placed before her as to the nature of the investigation. Mr Lam's argument in this regard is based on an assumption that the phase "including the interests of the investigation for which the travel document was surrendered" means that there must be some information before the magistrate as to the nature, scope or status of the investigation. If the appellant believed that there was any omission in the material available to the magistrate in this regard at the time of the second application before her, then it is surprising that nothing was said to her in this regard by the appellant or the appellant's representative at the time.

24. I might add I simply do not know at this stage whether the magistrate did have access to the original material provided for the purposes of the section 17A application. There is nothing in the papers to suggest whether she did or did not. It seems to me that as section 17B proceedings are decided by balancing the interests of the investigation with those of the appellant, there is no good reason for any magistrate dealing with an application under section 17B to not have access to the original papers at least, provided for the purposes of the section 17A application. And that in no way is to suggest that those papers or their contents should necessarily be revealed to the applicant. It may be that a synopsis of that information could be provided to the court and to the applicant in a form which would not prejudice the investigation. By the time a section 17B application is made, an applicant would be broadly aware of such allegations as a result, e.g. of any interview of him conducted by the investigators. Nor indeed is there any reason why a magistrate in determining a section 17B application should not be told of additional information to that contained in the section 17A papers.

25. The purpose such proceedings are held in chambers is, it seems to me, to allow such information to be provided to the magistrate, and if there is no harm to the investigatory process, to the applicant.

26. That information was, insofar as the background of the investigation was concerned in the present case, properly provided to me and to the appellant in the body of Mr Zervos' written submission for the purposes of the appeal. But even if in the present case the magistrate was unaware of the general nature or extent or status of the ICAC investigation, other than that there was one, that is not the end of the matter. That is because the magistrate found that the appellant had not even begun to establish on his own evidence that he would suffer any hardship as the result of the non-return of his passport.

27. In my judgment in deciding upon an application under the provisions of section 17B, the following steps would generally be taken by the court :

(1) It would decide whether the applicant had demonstrated hardship. If not, that is the end of the matter.

(2) If hardship was demonstrated the court would need to consider whether the applicant had demonstrated that it was unreasonable.

(3) In doing that the court would need to consider the circumstances of the case including the interests of the investigation.

(4) There should, therefore, be some material before the court to allow it to decide what those interests are, i.e. material allowing the court to determine what weight to attach to those investigatory interests. In the event there was no such material it may well be that little weight could be attached to the investigatory interests in that regard by the court and that accordingly, even a low level of hardship may be considered unreasonable.

(5) After balancing the interests of the applicant and the investigation, given all the circumstances of the case the court must then decide whether to refuse the return of the applicant's passport would impose unreasonable hardship upon him.

28. In the present case, after taking into account the contents of the appellant's affirmation and the documents produced particularly by his second affirmation in support of his application, the magistrate said :

"The documents produced by the Appellant did not support the allegations in the 2nd Affirmation. To the contrary, the documents are directly contradictory to the Appellant's allegations. In those circumstances, I was not satisfied that it was necessary for the Appellant to continue as legal representative of [the development company] or that there was any urgency for him to go to Mainland China. The Appellant had not even begun to demonstrate any hardship (much less unreasonable hardship). The Application was wholly devoid of merit and was misconceived. The Application was accordingly dismissed."

29. In arriving at that conclusion the magistrate had thoroughly examined the appellant's evidence in his affirmation and had, as a result of the contradictions between his own documentary evidence and his assertions in his affirmation, placed little weight on his evidence in that regard. She was entitled to do so. Her criticisms of the appellant's evidence were reasoned and sensible.

30. Accordingly, her conclusions in this regard cannot be criticized. And that remains so even if she was not provided with any significant material as to the nature, scope and extent of the investigation. That is because the appellant had not established any hardship whatsoever, and the balancing exercise requiring such material was rendered unnecessary.

31. Mr Lam's final argument was that his client suspected that the ICAC investigation may be directed at non-bribery offences and that the travel documents were therefore held on a wrong premise. If that were so, it would be quite wrong. Leonard J said in R. v. T [1995] 1 HKCLR 174 :

"... The provisions in the Prevention of Bribery Ordinance are draconian and are there specifically because it is considered that special powers are needed for the investigation of offences under the Prevention of Bribery Ordinance. The temptation to try to extend those powers and to make use of them in other investigations must be resisted."

32. But in the present case from the material provided to me by Mr Zervos for the respondent, it is quite apparent from the background of the investigation that there must be real and genuine suspicions of corruption. Further the appellant acknowledges in his own affirmation he was in large part questioned about matters which appeared related to allegations of bribery. In my view, there is no substance in this final complaint of the appellant.

33. For the above reasons, the appeal is dismissed.