XCHRX HUI DONG COUNTY PORT AQUATIC TRADE CO. v. CUSTOMS AND EXCISE DEPARTMENT

HCAL 1154/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 1154 OF 2000

____________

_____________

D E C I S I O N

_____________

Introduction

1. This is the Applicant's application for leave to apply for judicial review. The relief sought is an order to quash the decision of the Customs and Excise Department made on 16 March 2000 to forfeit a vessel owned by the Applicant. The Applicant also seeks a Court order for the return the said vessel to the Applicant. I directed that there be an ex parte hearing to enable the Applicant to make submissions in support of the application.

2. According to the papers filed by the Applicant, the relevant background facts are as follows:-

(a) the Applicant is the owner of the vessel;

(b) on 16 February 2000, there were 7 crew members on board the vessel, including a Mr Cheung Tam-sik;

(c) on that day, the vessel has already been chartered by the Applicant to Mr Cheung for a monthly fee;

(d) on that day, the vessel was intercepted by the marine police inside Hong Kong waters on suspicion that the crew members and the vessel were involved in "smuggling" activities;

(e) as a result, the vessel was seized by the police on 16 February 2000; and

(f) further, the 7 crew members were later prosecuted for "smuggling" offences but were acquitted after trial.

3. On 31 March 2000, the 7 crew members instructed the Applicant's solicitors to ask for the return of the vessel from the Customs and Excise Department. The Customs and Excise Department stated in a letter dated 10 April 2000 that since no notice of claim had been received on the expiration of the relevant period provided for in section 27(5) of the Import and Export Ordinance, Cap. 60, the claim made in the letter of 31 March 2000 was out of time. Section 27(5) of Cap. 60 reads as follows:-

"If an article, vessel or vehicle is liable to forfeiture under subsection (1), the owner or the authorized agent of the owner of the article, vessel or vehicle or a person who was in possession of the article, vessel or vehicle at the time of seizure, ..... may within 30 days beginning -

(a) on the date of the seizure; or

(b) where notice under subsection (3) or (3B) is -

(i) served by delivery to the person to be served, on the date of service;

(ii) sent by registered post, 2 days after the date of posting; or

(iii) exhibited as described in subsection (4)(c), on the first day it is so exhibited,

give notice in writing to the Commissioner claiming that the article, vessel or vehicle is not liable to forfeiture and of his full name and address for service in Hong Kong." (underline supplied).

The consequence of a failure to serve a notice pursuant to section 27(5) is provided for in section 27(6):-

"If, on the date of expiration of the appropriate period of time specified in subsection (5) for the giving of a notice of claim, under that subsection, no such notice has been given in writing to the Commissioner the article, vessel or vehicle shall be forfeited forthwith to the HKSAR Government." (underline supplied).

It is obvious that the Customs and Excise Department relied on section 27(1) and section 27(6) of Cap. 60 to forfeit the vessel. Section 27(1) of Cap. 60 provides:-

"There shall be liable to forfeiture -

(a) any article which has been seized by a member of the Customs and Excise Service or an authorized officer in connexion with the contravention of any provision of this Ordinance;

(b) any vessel not exceeding 250 gross tons and any vehicle so seized and which has been used in connexion with, or is the subject of, the contravention of any provision of this Ordinance,

whether or not any person has been convicted of an offence in respect of such contravention." (underline supplied).

According to section 27(3) of Cap. 60, the Customs and Excise Department must serve a notice of seizure on the owner of a vessel not later than 30 days from the date of seizure of the vessel. However, section 27(3) does not apply if section 27(3A) applies:-

"Subsection (3) shall not apply -

(a) if the article, vessel or vehicle was seized in the presence of -

(i) an owner, or an employee or agent of the owner, of the article, vessel or vehicle;

(ii) the person whose offence or suspected offence gave rise to the seizure; or

(iii) in the case of a vessel or vehicle, the master or person in charge; or

(b) in relation to an owner who does not have a permanent address in Hong Kong at the time of seizure."

The Basis of this Application

4. Mr Wu for the Applicant does not argue that the vessel is not liable to forfeiture. He rather argues that there is sufficient material for leave to be given to challenge the Customs and Excise Department's decision on the following grounds:-

(1) the Customs and Excise Department erred in law in relying on section 27(3A);

(2) alternatively, the Customs and Excise Department erred in indiscriminantly relying on section 27(3A);

(3) the Applicant was unaware of the vessel's seizure until 28 April 2000 and it is improper, irrational and unreasonable for the Customs and Excise Department to rely on sections 27(5) and 27(6) to forfeit the vessel; and

(4) the Customs and Excise Department should have, but failed to, give consideration to return the vessel under section 27(2).

5. Before turning to the above arguments under the separate headings below, the test to be adopted in this application for leave is:

"whether the material before [the judge] disclosed matters which, on further consideration, might demonstrate an arguable case for the grant of the relief sought.":

see R v. the Director of Immigration Ex parte Ho Ming Sai (1993) 3 HKPLR 157, at 161 and 170 affirmed in Wong Chung Ki v. The Chief Executive CACV 1/2000.

Could the Customs and Excise Department Rely on Section 27(3A)?

6. There are 2 matters which Mr Wu contends justify leave to be given in relation to this part of his arguments:-

(a) there is an absence of evidence that the vessel was seized in the presence of the 7 crew members; and

(b) there is no evidence that the vessel was seized by the Customs and Excise Department.

7. Mr Wu submits that because of the above, it is arguable that the 2 conditions of section 27(3A) have not been met. Thus, the Customs and Excise Department could not properly rely on this provision.

8. In relation to the point that there is no evidence that the vessel was seized in circumstances which fall within section 27(3A) of Cap. 60, the following matters have to be noted. One, as a fact, a "Receipt for Things Detained or Seized" dated 17 February 2000 (exh. "HMK-7" to the affirmation of Hui Mo Kin) clearly shows that the vessel was seized by the Customs and Excise Department at 1330 hours on 17 February 2000 with the knowledge of Mr Cheung. Further, Mr Wu concedes at the hearing that section 27(3A)(a)(ii) is applicable. He argues, however, that the Customs and Excise Department relied on other grounds for seizing the vessel and the evidence in support of those grounds is either absent or insufficient.

9. I consider, and Mr Wu does not disagree, that even on the facts presented by the Applicant, there is ample evidence or basis to conclude that section 27(3A)(a)(iii) and/or section 27(3A)(b) is/are applicable to this case. Mr Wu argues that this is irrelevant because his complaint is that the decision of the Customs and Excise Department was unreasonable in the Wednesbury sense. He said it is not for the Court to supplement the correct reason for doing an act when the public body or authority has given an improper reason for so acting. This is so even if there is ample and legitimate reason or basis in support of such an act.

10. The so-called "Wednesbury principle" has been summarized in The Supreme Court Practice 1999, Vol. 1, para. 53/14/31 as follows:-

"Decisions of persons or bodies which perform public duties or functions will be liable to be quashed, or otherwise dealt with by an appropriate order in judicial review proceedings where the Court concludes that the decision is such that no such person or body properly directing itself on the relevant law, and acting reasonably could have reached that decision."

With the above in mind, I disagree with Mr Wu's argument. If the Customs and Excise Department "had properly directed itself on the relevant law" (in the context of this case, the provisions of sections 27(3A)(a)(iii) and/or 27(3A)(b)), the Customs and Excise Department could clearly and properly have concluded that section 27(3A) applies to the facts of this case. There is therefore no valid reason to interfere with that conclusion. In other words, there is nothing unreasonable "..... verging on absurdity" in the words of Lord Scarman in Nottinghamshire City Council v. Secretary of State for the Environment [1986] AC 240 at 248.

11. Further to the above, the Applicant has not by evidence disputed that the vessel was seized by the police after it was stopped on 16 February 2000. Nor has it disputed by evidence that the 7 crew members were arrested by the police on board the vessel at that time. In fact, the Applicant has not adduced any evidence regarding what happened on 16 February 2000 to dispute what the Customs and Excise Department asserted in correspondence about the seizure of the vessel. I find this particularly strange in view that the same firm of solicitors has been instructed to represent the 7 crew members in the earlier criminal proceedings and to represent the Applicant in this application. The burden of proving that the matters warrant further consideration (albeit a low burden) rests with the Applicant in this application. In these circumstances, I do not consider that there is sufficient material raised as regards the contention that the vessel was arguably not seized in the presence of the crew members.

12. As regards whether it was the police or the Customs and Excise Department which seized the vessel on 16 February 2000 or 17 February 2000, it can be inferred from the "Statement of Admitted Facts" (exh. "HMK-1" to Mr Hui's affirmation) and the "Receipt for Things Detained or Seized" dated 17 February 2000 (exh. "HMK-7" of Mr Hui's affirmation) that the investigation of the suspected offences was handed over by the police to the Customs and Excise Department shortly after the interception of the vessel and the arrest of the crew members. Exh. "HMK-7" is evidence that the Customs and Excise Department seized the vessel on 17 February 2000 after it has taken over the investigation of the case.

Did the Customs and Excise Department Err in Relying on Section 27(3A) in this Case?

13. Mr Wu argues that even if the Customs and Excise Department was entitled to rely on section 27(3A) (which I concluded it was), it should not do so where the Applicant's identity was at all times known to the Customs and Excise Department. I do not agree. The scheme of Cap. 60, in particular, sections 27(3A), 27(5) and 27(6) thereof, shows that the legislation intends to cast the burden upon the owner of a vessel to keep itself informed of its whereabouts and to make a claim in time, not for the Customs & Excise Department to seek out the owner.

14. As for Mr Wu's complaint that the Customs and Excise Department indiscriminantly relied on section 27(3A), I do not find that there is any evidence to support such a complaint. I rather consider there is evidence which shows the contrary (see the paragraphs under the heading "Whether the Customs and Excise Department Failed to Consider s. 27(2)" below)

15. Further, I do not find that the justice of this case warrants leave to be given under this head of complaint taking into account the circumstances of this case. As stated earlier, the same firm of solicitors which acted for the 7 arrest crew members was the firm of solicitors acting for the Applicant in this application and yet the evidence filed in this application appears to be relatively scanty, selective and incomplete. The Applicant apparently has chosen to "play the cards close to its chest". In the absence of explanation, I have grave reservation about the Applicant's assertion that it only became aware of the seizure in April 2000 when its crew members well knew of it since February 2000.

The Relevance of the Applicant's Knowledge of the Seizure

16. But even if the Applicant only knew of the seizure since the end of April 2000, I do not consider that that should affect my decision.

17. The provisions of Cap. 60 clearly intend that the owner's knowledge of the Customs and Excise Department's intention to forfeit the vessel is irrelevant. For example, section 27(3A)(b) of Cap. 60 expressly provides that no notice needs to be given by the Customs and Excise Department if the owner does not have a permanent address in Hong Kong at the time of seizure. I can well imagine that a ship owner operating in an overseas country whose ship has been seized in Hong Kong without its knowledge may feel an even greater sense of grievance than the Applicant. But it is not for the Court to impose a duty on the Customs and Excise Department (for example, to serve a notice of seizure on the said overseas ship owner) which has not been imposed by the legislation.

Whether the Customs and Excise Department Failed to Consider Section 27(2)

18. I do not find that there is any evidence that the Customs and Excise Department had failed to consider its power under section 27(2) of Cap. 60. It is true that the Customs and Excise Department decided at the end to forfeit the vessel, but that does not mean that it had considered from the outset that there was no discretion to return the vessel. The letter dated 5 April 2000 rather shows that the Customs and Excise Department well knew of its discretionary power and had given the matter due consideration.

Conclusion

19. For the above reasons, I will refuse the application.

20. Before leaving the matter, I should mention that many Applicants in applications for leave to apply for judicial review have overlooked that because these applications are made ex parte, there is a duty on their part (just as there is a similar duty in other types of ex parte applications) to make full and frank disclosure of all matters (whether favourable or adverse to their case): see The Supreme Court Practice 1999, Vol. 1, para. 53/14/37. It is therefore important for Applicants to put forward all matters otherwise the Court may refuse to grant an order on that ground alone: R v. Kensington Commissioners Ex parte Polignac [1917] 1 KB 486.