XCHRX SECRETARY FOR JUSTICE v. LEE CHEUNG WAH

HCMP 113/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 113 OF 2001

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J U D G M E N T

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The Application

1. The Secretary for Justice applies, under O.115 r.2A of the Rules of the High Court, for a confiscation order, pursuant to s.3 of the Drug Trafficking (Recovery of Proceeds) Ordinance¹, Cap. 405 against the respondent, LEE Cheung-wah. The respondent is said to have absconded from Hong Kong.

2. Under s.3(1) (a) (ii) and (b), upon an application by, or on behalf of, the Secretary for Justice, the Court of First Instance has power to make a confiscation order in relation to a person who has died or absconded and against whom proceedings for one or more drug trafficking offences have been instituted.

Procedure and Conditions

3. In applications against an absconder, such as the respondent is said to be, the procedure to be followed and conditions of which the court must be satisfied, are:

(a) That the application is made by the Secretary for Justice [s.3(1)(b)] - condition 1.

(b) In relation to the absconder, that:

(1) Proceedings for one or more drug trafficking offences have been instituted against him, but not concluded [s.3(l)(a)(ii)] - condition 2.

(2) He has absconded [s.3(1)(a)(ii)(B)] - condition 3.

(3) Six months have elapsed from the date on which he absconded [s.3(2)(c)(i)] - condition 4.

(4) His exact whereabouts are unknown and reasonable steps have been taken to give notice to him of the proceedings [s.3(2)(c)(ii)(B)] - condition 5.

(5) He could have been convicted of a drug trafficking offence [s.3(2)(c)(iii)] - condition 6 - and

4. If satisfied of the above 6 conditions, the court shall then determine whether he benefited from drug trafficking [s.3(3)]. In Secretary for Justice v LEE Chau-ping and Another [1999] 2 HKC 103 I held that the balance of probabilities was the applicable standard for making this determination.

5. If satisfied of the above matters, the court must then determine:

(a) The value of his benefit from drug trafficking [s.3(5) ,s.6(1)].

(b) The amount of the confiscation order [s.3(6)].

(c) The amount that might be realised for purposes of making a certificate. [s.6(2)].

The section 5 statement

6. By s.5(1) where an application is made for a confiscation order against an absconder, the applicant may tender to the court a statement containing matters relevant to the determination of both, whether he could have been convicted in respect of the offence and whether he has benefited from drug trafficking. The statement may also contain matters relevant to the court's assessment of the value of his proceeds of drug trafficking. If the absconder's whereabouts are unknown, a copy of the statement shall deemed to have been served on him [s.5(7)].

7. In this application the Applicant filed a s.5 statement made by D.S.I. Rohit Bhagat, dated 26 April 2001.

Findings

8. As to the conditions of which I must be satisfied:

Condition 1

9. I am satisfied that the Secretary for Justice brings the proceedings.

Condition 2

10. 8. Section 2(11)(a) defines when proceedings for an offence are instituted:

'(11) Proceedings for an offence are instituted in Hong Kong-

(a) when a magistrate issues a warrant or summons under section 72 of the Magistrates Ordinance (Cap.227) in respect of the offence.'

11. Arrest warrants were issued against the respondent on 7 December 1995 and 26 May 1999, alleging that he had committed offences of money laundering, contrary to s.25(1) of the Ordinance, and conspiracy to traffic in dangerous drugs. The 1999 warrant replaced the 1995 warrant and remains in force.

12. Section 2(12A) defines when proceedings are concluded in respect of a dead or absconding person:

'(12A) An application for a confiscation order made in respect of a defendant where section 3(1)(a)(ii) or (7) [defendant dies or absconds after conviction] 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.'

13. I am satisfied that proceedings have been instituted but not concluded against the respondent.

Conditions 3 & 4

14. The word 'absconded' is defined in s.2(1) to mean:

'...in relation to a person, includes absconded for any reason whatsoever, and whether or not, before absconding, the person had been -

(a) taken into custody; or

(b) released on bail.'

15. The Immigration Department's records show that the respondent's last recorded travel movement was on 19 August 1995 when he entered Hong Kong From Macau. At the trial of his co-accused (HCCC 219 of 1996) his family members and his former employees testified that they had last seen him on dates in either October or November 1995. It may be safely inferred that he absconded because he became aware of the arrest of the co-conspirators in Sydney, Australia, on Saturday, 25 November 1995. I am satisfied that the respondent absconded in late November 1995. And I am satisfied that more than six months have elapsed since he absconded.

Condition 5

16. Under s.3(2)(c)(ii)(B) if a person whose exact whereabouts are not known, then reasonable steps must have been taken to give him notice of 'those proceedings'. In Attorney General v Lee Chau-ping [1997] 4 HKC 371, Findlay J opined that the phrase 'those proceedings' in the sub-paragraph referred to the proceedings for the prosecution of a drug trafficking offence, and not the proceedings for an application for a confiscation order. With respect, that conclusion appears unsupportable, it is far more logical and in keeping with purpose of the ordinance for the phrase to refer to the proceedings for an application for a confiscation order and that is how I propose to construe the provision.

17. The s.5 statement contains evidence of the steps taken by the police to notify him of the confiscation proceedings, including the fact that he is he is the subject of an Interpol 'Red Notice' and on the Hong Kong Police Force's 'Wanted List', and the Immigration Department's 'Stop List'. The Immigration Department's Travel Movement Records show that he last entered Hong Kong on 19 August 1995. Recent enquiries about his present whereabouts, have been made of his wife, sister, and two former employees, they claim not to know where he is. I am satisfied that reasonable steps have been taken to notify the respondent of the confiscation proceedings.

Condition 6

18. I have had regard to the matters set out in paragraphs 23 to 208 in the s.5 statement, relying on that, I am satisfied, on the balance of probabilities, that the respondent could have been convicted of the offence of conspiracy to traffic in dangerous drugs.

Determinations

19. A person who has at any time received any payment or other reward in connection with drug trafficking carried on by him or another has benefited from drug trafficking. [s.3(4)].

20. The ordinance provides that the standard of proof required to determine whether a person benefited from drug trafficking is on the balance of probabilities [s.3(12)].

21. Section 4(1) defines a person's proceeds of drug trafficking:

'(1) For the purposes of this Ordinance -

(a) a person's proceeds of drug trafficking are-

(i) any payments or other rewards received by him at any time (whether before or after the commencement of this Ordinance) in connection with drug trafficking carried on by him or another; and

(ii) any property derived or realised, directly or indirectly, by him from any of the payments or other rewards; and

(b) the value of the persons proceeds of drug trafficking is the aggregate of the values of-

(i) the payments or other rewards; and

(ii) that property.'

22. Under s.4(3) the Court may, for the purpose of determining whether the person benefited from drug trafficking and, if he has, of assessing the value of his proceeds of drug trafficking, make the following assumptions:

'(a) that any property appearing to the court -

(i) to have been held by him at any time-

(A) since his conviction;

(B) where section 3(1)(a)(ii) [the person absconded or died] is applicable, since the application was made for a confiscation order in his case; 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 his proceeds of drug trafficking.'

23. From the s.5 Statement I am satisfied, on the balance of probabilities that the respondent benefited from drug trafficking: he received a total of $6,946,000.

24. Section 6(1) provides that the amount to be recovered under the confiscation order is the value of the person's proceeds of drug trafficking. Accordingly, a confiscation order may be made against the respondent in the amount of $6,946,000.

25. For the purpose of a certificate made under s.6(2) the amount that might be realised at the time a confiscation order is made against the person is defined in s.7(3) to mean:

'(a) the total of the values at that time of all the realisable property held by the person, less

(b) where there are obligations having priority at that time, the total amounts payable in pursuance of such obligations, together with the total of the values at that time of all gifts caught by the Ordinance.'

26. Section 7(1) defines the phrase 'realisable property' as:

'(a) any property held by the Defendant;

(b) any property held by a person to whom the Defendant has directly or indirectly made a gift caught by this Ordinance; and

(c) any property that is subject to the effective control of the Defendant.'

27. In this case I am told at paragraph 213 of the s.5 statement that the value of the respondent's realisable property as at 24 April 2001 is $1,272,440.87.

28. Section 6(2), provides that if the Court is satisfied that the amount that might be realised at the time the confiscation order is made is less than the amount the court assesses to be the value of his proceeds of drug trafficking - which in this case it is - the court must issue a certificate giving the court's opinion as to the amount appearing to the court to be so realized. I ask that a draft certificate be prepared for my approval.