Sum Cheung Wai v. Tsui Hin Yuet

CACV 57/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 57 OF 2016

(ON APPEAL FROM HCA NO 640 of 2014)

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

1.The Plaintiff and the Defendant were friends and business partners. Unfortunately, their relationship turned sour and their disputes on the ownership of a company Donna Bodywear Co Ltd [“the Company”] resulted in two sets of litigation. The first set of litigation was a civil case in HCMP 1707 of 2010. By a judgment of Harris J of 23 July 2013, the Plaintiff’s claim that he was the sole owner of the company was vindicated.

2.The present appeal does not arise from that judgment (in respect of which an appeal had initially been brought but was subsequently dismissed by consent).  Instead, it arose from a second set of litigation which stemmed from a complaint made by the Defendant in December 2010 to the Commercial Crime Bureau [“CCB”] against the Plaintiff in respect of the affairs of the Company.  That complaint was made through a solicitor.  By a letter dated 3 December 2010, the solicitor purported to act on behalf of the Company and alleged that the Plaintiff as employee of the Company had stolen $17 million from the Company.  For the purpose of this judgment, it is not necessary to go into the details of the complaint.  After receiving the letter, CCB conducted investigation into the matter and from February 2011 to Jan 2013, the Defendant provided further information and material to CCB and attended interviews on various occasions.  The information supplied through the solicitor included the originating summons and the affirmation of the Plaintiff in HCMP 1707 of 2010.  Statements were also given by the Defendant to CCB.  The Defendant also procured his sister-in-law (who prepared the ledgers of the Company) to give information and statements to CCB. 

3.In his statement of 8 June 2012, the Defendant stated that he and his wife held 60% of the shareholdings in the Company and the Plaintiff held 40%.  Since 2004, the running of the business was left in the hands of the Plaintiff.  He also depicted a picture of the Plaintiff reneging on an agreement made in 2009 to purchase the 60% of the shareholdings at $8 million and that the Plaintiff suddenly disappeared in 2010 with all the staff and furniture of the Company.  He also stated in the statement that upon checking the accounts of the Company, he found that the Plaintiff had misappropriated $17.42 million from the company account.

4.He also referred to the first set of litigation in the statement: he alluded to the Plaintiff’s case in HCMP 1707/2010 that the Plaintiff was the sole owner of the Company.  As mentioned, the court documents had already been supplied to CCB and the latter was apprised of the civil disputes between the parties. 

5.He gave another statement to CCB on 14 January 2013.  In this statement, he told CCB he authorized the Plaintiff to operate the bank accounts of the Company on his own as he had no time to attend to the business.  He further said that the profit generated from the business, after being used to pay for the expenses of the Company, would be distributed between him, his wife and the Plaintiff according to their shareholdings.

6.On 23 January 2013, CCB obtained 2 search warrants from a magistrate to search the premises of the Plaintiff for evidence related to the Company’s affairs.  On 24 January 2013, police officers arrested the Plaintiff at Lo Wu.  He was detained for interview and searches were conducted at his office and home pursuant to the 2 search warrants.  The whole process took about 30 hours and after that the Plaintiff was released on bail.

7.The trial of HCMP 1707 of 2010 took place before Harris J on 5 to 7 June 2013.  Both parties were represented by leading counsel and they were cross-examined in the witness box.  As mentioned, on 23 July 2013 Harris J handed down his judgment finding in favour of the Plaintiff.

8.After his arrest, the Plaintiff was put on police bail until September 2013 when CCB informed him that he would not be charged and the investigation was closed.  The Plaintiff said he had incurred $105,000 in legal fees in relation to the matter.  He commenced this action (HCA 640 of 2014) on 9 April 2014 seeking damages for the malicious complaint of the Defendant to CCB.

9.HCA 640 of 2014 was tried before A Chan J [“the Judge”] in January 2016.  On 25 February 2016, the Judge dismissed the claim. It appears that counsel for the Plaintiff (not Mr Fung SC who was only instructed on behalf of the Plaintiff in this appeal but not below) ran the case solely on the basis of the cause of action of malicious prosecution. Though he had attempted to add a claim based on malicious procurement of search warrant on the third day of trial, the Judge refused to grant him leave to re-amend his Statement of Claim.  Thus at the beginning of the judgment, the Judge characterized the case as “the Plaintiff’s malicious prosecution action against the Defendant”.  In his discussion on the applicable law, he only referred to the law on the tort of malicious prosecution.

10.Before us, Mr Fung very properly accepted that, subject to his appeal against refusal of leave to re-amend, the appeal must be considered solely by reference to a cause of action in malicious prosecution.   

The tort of malicious prosecution

11.The Judge took the elements of the tort of malicious prosecution from the judgment of Ma CJHC (as he then was) in Oh v Richdale [2005] 2 HKLRD 285 at [12]:

“ There are 4 ingredients in the tort of malicious prosecution. These are identified in paragraph 16-06 of Clerk & Lindsell on Torts (18th ed.) in a passage that was said by the House of Lords, correctly to state the law: - see Martin v Watson [1996] 1 AC 74, at 80: -

‘ In action of malicious prosecution the plaintiff must show first that he was prosecuted by the defendant, that is to say, that the law was set in motion against him on a criminal charge; secondly, that the prosecution was determined in his favour; thirdly, that it was without reasonable and probable cause; fourthly, that it was malicious. The onus of proving every one of these is on the plaintiff.’

This passage has also been referred to as representing the law in the decision of the House of Lords in Gregory v Portsmouth City Council [2000] 1 AC 419.”

12.Of the four elements, the Judge found the third and fourth elements established.  However, the Judge found against the Plaintiff on the first element: he held that there was no prosecution and the Plaintiff could not be regarded as the prosecutor on the facts of the present case. Thus, he dismissed the Plaintiff’s claim with costs.

13.In this appeal, Mr Fung (appearing with Mr Chu who also appeared for the Plaintiff at the court below) submitted the Judge should have held that for the purpose of the tort of malicious prosecution, a prosecution had begun as long as the law had been set in motion and damages had accrued to the Plaintiff.  Further, counsel submitted the Judge should have held that the Defendant had procured the prosecution.  Counsel also submitted that the Judge should have allowed the amendment on the third day of trial and entertained the Plaintiff’s claim on malicious procurement of search warrants.

14.Notwithstanding the valiant efforts of Mr Fung, we come to the clear conclusion that the Plaintiff’s claim on malicious prosecution must fail in light of the fact that no criminal prosecution had been brought.

15.The requirement of prosecution is not only relevant to the first element in the tort, but also relevant to the second element. Without setting the criminal legal process into motion, there cannot be any determination of the criminal charge in favour of the Plaintiff.  As such, neither the first nor the second element can be established.  The second element of this tort was examined by this Court in梁麗娟及香港警務處處長 CACV 195/2014, 14 August 2015.  In that case, the claim of malicious prosecution was struck out because there was no determination of the criminal charge in favour of the plaintiff in that case.  A charge of common assault before a magistrate was disposed of by the plaintiff accepting to be bound over under Section 61 of the Magistrates Ordinance Cap 227.  The Court held that as the magistrate did not make a determination on whether she was guilty of the charge, the second element was not present.

16.Counsel did not dispute that it is essential for the Plaintiff to establish the second element.  In wake of the difficulty in identifying any determination of any criminal charge in the Plaintiff’s favour on the facts of the present case, Mr Fung submitted that the second element had to be modified in a context where no charge had been laid.  Counsel submitted that if an arrest and the execution of the search warrant did not result in anything which implicated the Plaintiff, it amounted to a determination in his favour for the purpose of establishing the second element.

17.With respect, we cannot accept this argument. The outcome of a search or arrest and a judicial determination of a criminal charge are materially different.  There could be many reasons why a search would not result in the police obtaining any relevant information or evidence and such reasons very often have nothing to do with the merit of a criminal charge.  On the other hand, a determination of a charge in a legal process is different in nature.  Whilst there are authorities showing that termination of the legal proceedings brought about by the consent of the parties (Craig v Hasell (1843) 4 QB 481 at 492) or the withdrawal of proceedings (Casey v Automobiles Renault Canada Ltd [1965] SCR 607) can satisfy the second element, in all those cases there were formal legal proceedings on foot as opposed to the mere arrest or execution of search warrant.

18.Having said so, we do not propose to determine this appeal on the second element as this was not addressed in the judgment below.  Instead we shall examine the question what constitutes prosecution for the purpose of the first element in the tort of malicious prosecution.

Prosecution

19.The Judge discussed the first element at [81] to [95] of the judgment.  He started by citing from paragraph 16-11 of Clerk & Lindsell on Torts 21^st Edn where the following proposition can be found:

“ ... To prosecute is to set the law in motion, and the law is only set in motion by an appeal to some person clothed with judicial authority in regard to the matter in question ...”

20.Thus, according the learned editors of that work, the test is whether the law has been set in motion by appealing to a judicial authority.  This test is perfectly sound if one recalls that the underlying mischief that the tort aims at (as suggested by Kwan JA in the course of hearing and Mr Fung quite rightly agreed) is the abuse of legal process.  Thus, in Jae Hoon Oh v Richdale [2005] 2 HKLRD 285, Ma CJHC (as the Chief Justice then was) said at [19(1)]:

“ The basis of the tort lies in the wrongful use that a person has made of the legal system (namely, the process of the Court) to set in motion a prosecution of another person on a criminal charge. In short, there is involved the abuse of the Court’s criminal process in order to secure the wrongful conviction of another person ...”

21.Though there is a current debate on whether the tort should embrace abuse of civil proceedings generally (see Willers v Joyce [2016] UKSC 43 where the Supreme Court by a 5:4 majority agreed with the decision of the Privy Council (by a 3:2 majority) in Crawford Adjusters (Cayman) Ltd v Sagicor General Insurance (Cayman) Ltd [2014] AC 366 to depart from the earlier House of Lords decision in Gregory v Portsmouth City Council [2000] 1 AC 419), the discussion of the law in those cases consistently identified the misuse of legal proceedings as the mischief to be remedied in the context of this tort.  By way of example, at [43] in the judgment of Lord Toulson (one of the majority in Willers v Joyce, supra),

“ It seems instinctively unjust for a person to suffer injury as a result of the malicious prosecution of legal proceedings for which there is no reasonable ground, and yet not be entitled to compensation for the injury intentionally caused by the person responsible for instigating it. It was that consideration which led the judges to create the tort of malicious prosecution, as can be seen in the case law.”

22.Hence, for the purpose of the tort of malicious prosecution, the law is set in motion when legal proceedings were brought.  In the context of criminal proceedings, the process in court usually commenced with the laying of the information or complaint, or the preferring of the indictment.  The accused person would then be brought before the court or summonsed to appear in court within a reasonable time. 

23.The significance of commencement of legal proceedings was recently considered by the English Court of Appeal in Crawford v Jenkins [2015] 1 All ER 476 in a discussion on the witness immunity rule.  At [54], Sir Timothy Lloyd had this to say:

“ ... there is a significant difference between a case where what happens is that the claimant is arrested by the police on the basis of information provided by the defendant, but no prosecution follows, and a case where criminal or civil proceedings are brought, in the case of criminal proceedings being based on information provided by the defendant and, in the case of civil proceedings, being brought by the defendant. If the interference with the claimant’s liberty or his assets is the result of a court order of some kind (arrest under a bench warrant or some form of execution) or is the effect of the issue of proceedings (as in the case of an insolvency petition), there can be no remedy by way of compensation to the claimant by recourse to the court which made the order. The order may be set aside, but that will not undo loss already caused. ...” (our emphasis)

24.Further, more pertinent for our purposes, at [56]:

“ ... If proceedings are commenced, and if the events complained of either lead to those proceedings or occur in the course of the proceedings, so that the court process is abused, then it is appropriate for the tort of malicious prosecution, or a related tort based on malicious abuse of the process of the court, to be available so as to afford the claimant a remedy, and it is justifiable that such a claim should not be defeated or precluded by the witness immunity rule. If, however, there are no court proceedings, the claimant’s arrest not being preceded or followed by any proceedings, whether criminal or civil, then there is no question of an abuse of the process of the court, no reason why (if the relevant fact can be proved) the person responsible for the arrest should not be answerable for the imprisonment, and correspondingly no reason to treat a claim for compensation for the arrest as one to which the otherwise general witness immunity rule does not apply.”

25.We shall have to come back to consider the precise limit of the witness immunity rule in respect of arrest which is not followed by any prosecution.  At this juncture, we wish to highlight that the distinction made by Sir Timothy Lloyd is a principled one and its reference to abuse of court process as its underlying premise is equally applicable to define the limits of the tort of malicious prosecution.  It is precisely for this reason that other specific torts covering cases where legal proceedings have not been commenced were developed: the Judge referred to malicious procurement of arrest and malicious procurement of search warrant at [94] of the judgment.  If Mr Fung were right in his submission that such distinction does not define the limits of the tort of malicious prosecution, it would not have been necessary for such other torts to be developed.

Amin v Bannerjee and Casey v Automobiles Renault Canada Ltd

26.Mr Fung relied heavily on two cases in support of his submission that the tort of malicious prosecution is not confined to cases where court proceedings had been invoked: Amin v Bannerjee [1947] AC 322 and Casey v Automobiles Renault Canada Ltd [1965] SCR 607.  The Judge gave due consideration to those cases at [84] to [92] of the judgment. At [90], the Judge came to this conclusion:

“ ... Neither Amin nor Casey supports the proposition that maliciously reporting to the police a crime which does not exist can constitution (sic) a prosecution. Indeed, in both cases, the complainant was in a position, and at least had attempted, to initiate the prosecution process. That cannot be said for the present case.”

27.The Judge was correct in pointing out that on the facts of these cases, the complainants had initiated legal proceedings.  In these cases, the complainants directly invoked the power of the courts without making any report to the police.

28.In Amin v Bannerjee, supra, which is an appeal to the Privy Council from the High Court at Calcutta, the second respondent filed a petition of complaint against the appellant in the court of the Police Magistrate at Sealdah under section 190 of the Code of Criminal Procedure. Under that section, the magistrate on receiving the complaint might take cognizance of it.  Section 200 of the Code provided that the magistrate would examine the complainant upon oath and the substance of the examination shall be reduced in writing and signed by the complainant.  Section 203 gave the power to the magistrate to dismiss the complaint if, after considering the statement on oath and the result of the investigation, he came to the judgment that there was no sufficient ground for proceeding.  On the other hand, if the magistrate decided there was ground, the case would be proceeded to the issue of process on the complaint, which the Code described as “the commencement of proceedings before Magistrates”.

29.As shown at p.323 of the report, after the receipt of the complaint, the magistrate decided to hold an inquiry under section 202 of the Code.  Notice of the inquiry was given to the appellant who attended with counsel.  The respondent gave evidence before the magistrate at the inquiry.  After the inquiry, the magistrate found that no case was made out and dismissed the complaint under section 203.

30.Notwithstanding that, when the appellant sued him for malicious prosecution the respondent argued that there had not been any prosecution since the case did not go beyond section 203 of the Code.  That argument succeeded at the courts below but was rejected by the Judicial Committee of the Privy Council.

31.Mr Fung placed reliance on the judgment of Sir John Beaumont in the Judicial Committee at p.330-331, in particular the following dicta:

“ That the word ‘prosecution’ in the title of the action is not used in the technical sense which it bears in criminal law is shown by the fact that the action lies for the malicious prosecution of certain classes of civil proceedings ...

To found an action for damages for malicious prosecution based on criminal proceedings the test is not whether the criminal proceedings have reached a stage at which they may be correctly described as a prosecution; the test is whether such proceedings have reached a stage at which damage to the plaintiff results.”

32.But it should be noted that His Lordship also said:

“ The foundation of the action lies in abuse of the process of the court by wrongfully setting the law in motion, and it is designed to discourage the perversion of the machinery of justice for an improper purpose.” (p.330, our emphasis)

“ But a criminal charge involving scandal to reputation or the possible loss of life or liberty to the party charged does necessarily and naturally involve damage, and in such a case damage to reputation will be presumed.” (p.331, our emphasis)

“ Their Lordships are not prepared to go as far as some of the courts in India in saying that the mere presentation of a false complaint which first seeks to set the criminal law in motion will per se found an action for damages for malicious prosecution. ... But in this case the magistrate took cognizance of the complaint, examined the complainant on oath, held an inquiry in open court under s 202 which the plaintiff attended, and at which ... he incurred costs in defending himself ...” (p.331)

33.Reading the judgment as a whole and bearing in mind the facts of the case, Sir John Beaumont did not hold that prosecution could have commenced without any proceedings in court as long as a plaintiff can show that he suffered damages after a defendant had made a complaint.  To the contrary, His Lordship was of the view that there had to be some form of legal proceedings on foot and the foundation of the tort of malicious prosecution is the abuse of the process of the court.  In the absence of any charge being preferred, the presumption of damage to reputation cannot be relied upon.  There is nothing in this judgment which suggests that criminal proceedings could be regarded as having been commenced simply because an accused person had incurred costs in defending himself. 

34.In this connection, Mr Fung very properly accepted that the test for the commencement of a prosecution should be objective.  If that were so, it could not vary depending on the stage at which an accused chose to engage lawyers (and incurred costs).  Otherwise, the tort would afford greater protection to a wealthy accused as compared with an accused who has no means to engage a lawyer.

35.In our judgment, taken to its highest, Amin only decided that the test of prosecution is satisfied when some form of court proceedings had been initiated by a complainant and as a result an accused person had incurred costs in defending himself.  It has no application to the present case when the Defendant made a report to CCB (not the court) and he himself did not initiate any court proceedings.

36.The other case relied upon by Mr Fung is Casey v Automobiles Renault Canada Ltd, supra, a decision of the Supreme Court of Canada on appeal from the Supreme Court of Nova Scotia.  It was a case of private prosecution.  The general sales manager of the respondent laid a charge of theft against the appellant before a magistrate.  On the basis of what the manager told him, the magistrate drafted the information which was signed by the manager.  The information remained in the office of the magistrate when about a few weeks later the manager sent a letter to the magistrate seeking to withdraw the charge.  The magistrate then regarded the charge as withdrawn and no summons had been issued.  In the meantime, the fact that the appellant was charged became widely known.  The appellant sued the respondent for malicious prosecution.

37.The issue was whether prosecution could be established when the magistrate had not acted upon the information to issue a summons.  After considering dicta in several cases pointing at different directions, the Supreme Court reached the conclusion that prosecution had been commenced when the information was laid.  In coming to that conclusion, the court (at p.622-623) placed much reliance on the judgment of Bowen LJ in Quartz Hill Consolidated Gold Mining Co v Eyre (1883) 11 QBD 674 (which concerned a claim based on the issue and advertisement of a winding up petition that had been withdrawn before it was served).  

38.Mr Fung relied on the judgment of Martland J at p.621:

“ In my opinion, the essence of the matter, in each case, was the filing of an information to deal with which was within the magistrate’s jurisdiction. At that point, in each case, the informant had done all he could do to launch criminal proceedings against the accused.”

Counsel laid emphasis on the last sentence which was repeated at p.623 in slightly different terms:

“ ... as the respondent had caused everything to be done which could be done wrongfully to set the law in motion against the appellant on a criminal charge, an action for malicious prosecution lay against the respondent ...”

39.In our judgment, this authority cannot assist the Plaintiff.  The discussion of Martland J was made in the context where information had been laid before a magistrate.  It cannot be doubted that criminal proceedings had begun in that case and the appellant suffered damages for being known as having been charged.  Applying the distinction discussed in Crawford v Jenkins, supra, the tort of malicious prosecution had been properly constituted because the process of the court had been invoked as soon as the magistrate, a judicial officer, received the information from the manager.  The same cannot be said in the present case.  The Plaintiff had never been charged and the case did not reach the court.  The sentence relied upon by counsel had to be read in the context of the case and the sentence before it shows that the court was referring to a situation where information had been laid before the magistrate, as such akin to the situation in Quartz Hill Consolidated Gold Mining Co v Eyre, supra. 

40.Properly understood, Casey v Automobiles Renault Canada Ltd, supra, was decided on a narrow point, viz the fact that a magistrate did not act upon the information to issue a summons could not exonerate a defendant from liability flowing from his laying of information before the magistrate.  Applying the underlying rationale in Quartz Hill Consolidated Gold Mining Co v Eyre, supra and Amin v Bannerjee, supra, it is not surprising that the Supreme Court came to such conclusion.  So understood, there is nothing exceptional in the decision.  But it would be an unwarranted extrapolation to draw from this decision a general proposition that as long as an informant gave all the information he could give to the police he could be liable for malicious prosecution on account of his having done all he could to launch criminal proceedings against the accused.                     

41.In the premises, Amin v Bannerjee, supra and Casey v Automobiles Renault Canada Ltd, supra provide no support to a proposition that (for the purpose of the tort of malicious prosecution) prosecution could be regarded as having been commenced without court proceedings having been invoked by a prosecutor.

The dichotomy between investigation and prosecution

42.The Judge drew a distinction between the investigation by CCB and prosecution by criminal proceedings.  Mr Fung submitted that such distinction is ill-founded. With respect, we do not agree with this submission.  As we have seen, the authorities do not support Mr Fung’s formulation of the test of prosecution.  The underlying policy considerations for the tort of malicious prosecution are the same as in the law relating to immunity granted to witnesses and the tort of wrongful procurement of arrests.  In that respect, there were illuminating discussions in Roy v Prior [1971] AC 470, Martin v Watson [1996] 1 AC 74, Taylor v Director of the Serious Fraud Office [1999] 2 AC 177, Darker v Chief Constable of the West Midlands [2001] 1 AC 435.   There are tensions between the principle that those who suffer a wrong should not be without a remedy and another principle that those involved in legal proceedings should be able to speak freely without fear of civil liability.  A further strand of policy which is relevant in cases where a determination has been made by a court of law is to avoid multiplicity of actions with one court having to revisit the truthfulness of evidence given in the earlier proceedings.  None of these policy considerations is absolute and the law has to strike a balance.  The balance is reflected in the laws governing immunities in respect of statements made to an investigating authority and the redress provided by the law of tort in appropriate circumstances, including the tort of malicious prosecution.  It must be stressed that the tort of malicious prosecution is only one aspect of the overall scheme of the law in this respect and it should be consistent with the general philosophy of a coherent body of laws.

43.We have already discussed the difficulties with the concept of finding a prosecution determined in favour of a plaintiff in relation to a “prosecution” when no proceedings have been brought in court.  We also alluded to the availability of other torts to provide redress in relation to a wrong committed prior to the commencement of prosecution in court: the malicious procurement of arrest (as in Roy v Prior, supra; Shamoon Ahmed v Mohammed Shafique [2009] EWHC 618 (QB)) and the malicious procurement of search warrant (as in Gibbs v Rea [1988] AC 786).  There are cases providing examples of some other possible causes of action: conspiracy to injure and misfeasance in public office (as in Darker v Chief Constable of the West Midlands, supra).  There were also unsuccessful attempts in bringing action based on defamation (see Taylor v Director of the Serious Fraud Office, supra; Westcott v Westcott [2009] 1 All ER 727) and false imprisonment (Davidson v Chief Constable of North Wales [1994] 2 All ER 597; Crawford v Jenkins, supra).

44.Though the courts had to examine the interaction of the underlying policy considerations in the context of the different facts and circumstances of the cases and the causes of action relied upon, the balance struck must be consistent and coherent with decisions in other cases. Thus, in Cabassi v Vila (1940) 64 CLR 130, Starke J said at p.141:

“ But it does not matter whether the action is framed as an action for defamation or as an action analogous to an action for malicious prosecution or for deceit or, as in this instance, for combining or conspiring together for the purpose of injuring another; the rule of law is that no action lies against witnesses in respect of evidence prepared ..., given, adduced or procured by them in the course of legal proceedings. The law protects witnesses and others, not for their benefit, but for a higher interest, namely, the advancement of public justice.”

45.See also Marrrinan v Vibart [1963] 1 QB 528, per Sellers LJ at p.535:

“ Whatever form of action is sought to be derived from what was said or done in the course of judicial proceedings must suffer the same fate ...”

46.These dicta were applied in Darker v Chief Constable of the West Midlands, supra, see Lord Clyde at p.456 and Lord Hutton at p.465.

47.Whilst Mr Fung is correct in submitting that the absolute immunity for a statement in court or part of the preparation of evidence for court proceedings cannot protect a defendant against a claim of malicious prosecution (see Taylor v Director of the Serious Fraud Office, supra, per Lord Hoffmann at p.215 and Lord Hope at p.219; Martin v Watson, supra, per Lord Keith at p.88), the law also recognized in the setting of a modern society like Hong Kong with professional public prosecution services that a complainant should not be readily regarded as a prosecutor, see Mahon v Rahn (No 2) [2000] 1 WLR 2150; Jae Hoon Oh v Richdale [2005] 2 HKLRD and the subsequent decision by a 3-member Court of Appeal in CACV 162 of 2003, 7 October 2005, applied in Pathak Ravi Dutt v Sanjeev Maheshwari CACV 129 of 2014, 14 December 2015. It was highlighted by Woo VP in Jae Hoon Oh v Richdale CACV 162 of 2003, 7 October 2005 at [16] and [18] that the crucial question is whether in light of all the evidence and circumstances the nexus between the lies of the defendant and the prosecution has been broken.  It was also emphasized that the fact that the prosecution would not have been brought but for the defendant’s lie is not a sufficient basis in law for treating the defendant as prosecutor, see Le Pichon JA in Jae Hoon Oh v Richdale CACV 162 of 2003, 7 October 2005 at [31].  In that case, the first instance judge said at [65] in his judgment reported at [2003] 4 HKC 318, cited by Woo VP on appeal:

“ ... it is not sufficient to show that the authority had taken the evidence of the Defendant into account. Such a test can be met in respect of almost every statement furnished by a witness. The threshold must be much higher. A plaintiff ... has to establish that the discretion of an independent and professional prosecuting authority had been prejudiced to the extent that it could properly be regarded as negating such discretion.”

48.Even in the context of a claim based on malicious prosecution, the concern that a complainant should be able to speak freely without fear of civil liability is an important one.  If one were to widen the concept of prosecution to encompass the making of a complaint or the giving of a statement to the police even though ultimately no charge is preferred, it would effectively discount the intervention in terms of the professional investigation by the police and the independent assessment of evidence by the professional public prosecutor.  We do not see why this is correct as this would subvert the safeguards provided in those cases.  The court will no longer be concerned to examine whether it was virtually impossible for the professional prosecutor to exercise independent discretion or judgment so that the complainant is properly regarded as having procured the prosecution.  The defendants in Jae Hoon Oh v Richdale, supra, Pathak Ravi Dutt v Sanjeev Maheshwari, supra and Hunt v AB [2009] EWCA Civ 1092 could all be held to be potentially liable on the basis they were the prosecutors by virtue of their statements to the police.       

49.To be fair, Mr Fung advanced his case not simply on the basis of the complaints to the police.  Counsel referred to actions taken by the police in the investigation process (the arrest and the obtaining and execution of the search warrants) which occasioned losses to the Plaintiff as crystallizing the process of prosecution. 

50.In our judgment, the fallacy of Mr Fung’s submission lies in treating the giving of information to the police as a sufficient basis for holding a complainant liable for damages occasioned by the independent acts of the police (or other investigating authorities) in the process of investigation.  Mr Fung referred to the arrest of the Plaintiff (and his detention pending bail being granted) and the execution of the search warrants as acts occasioning damages to the Plaintiff.  However, there are gaps in the evidence on the progress of the investigation.  Though a senior inspector had been called to give evidence, in light of how the Plaintiff’s case was run at the trial, the focus of counsel in cross-examination was not on the nexus between the arrest and application for search warrants on the one hand and the evidence of the Defendant on the other.  There is no evidence on whether CCB took any steps to obtain information from the Plaintiff or his solicitors on a voluntary basis (which, as far as we can see, would have been a reasonable approach to start with in light of the disclosure of the litigation between the Plaintiff and the Defendant and the court documents to CCB).  There is also no evidence on the reason behind CCB’s decisions to apply for search warrants on 23 January 2013 and to arrest the Plaintiff on 24 January 2013. 

51.The steps taken by CCB were prima facie decisions on the investigatory process over which the Defendant did not have any control.  Holding the Defendant responsible for such decisions through the application of an extended concept of prosecution in the tort of malicious prosecution carries with it a risk of disregarding the independent discretionary judgments on the part of CCB in the process of investigation which could have the effect of breaking the nexus between the making of a complaint and the actual investigatory steps taken by CCB. 

52.It is a fact that the complaint and statements of the Defendant had initiated the investigation.  However, it does not follow from such fact that the Defendant had procured each and every step in the investigatory process.  As discussed above, CCB could have proceeded with the investigation by various means and how they proceeded with it was very much a matter within their independent professional discretion and judgment.         

53.Looking at the matter from another angle, in terms of prosecution by way of commencement of legal proceedings, it is plain that CCB (and if the Department of Justice had been involved, the counsel in that department) had exercised independent judgment in deciding that the case should not proceed further and no charge should be laid.  As discussed above, the Defendant could not be held liable for malicious prosecution. Why should there be any difference when CCB decided independently to take some investigatory steps before coming to a conclusion on its decision not to prosecute?

54.Further, the immunity rule has no application to the tort of malicious prosecution because the action is not brought in respect of evidence given by a defendant.  Rather, it is brought in respect of the abuse of the process of the court by a defendant, see the explanation by Lord Morris in Roy v Prior, supra, at p.477-478, cited by Lord Keith in Martin v Watson, supra at p.88. Lord Morris said:

“ The essence of the complaint in [a case of malicious prosecution] is that criminal proceedings have been instituted not only without reasonable and probable cause but also maliciously. So also in actions based upon alleged abuses of the process of the court it will often have happened that the court will have been induced to act by reason of some false evidence given by someone. In such cases the actions are not brought on or in respect of any evidence given but in respect of malicious abuse of process.”

55.So understood, the rationale for holding that the immunity rule has no application to the tort of malicious prosecution can be regarded as a specific application of the more general rule that the immunity is limited to actions in which the statement of the witness constitutes the cause of action and does not extend to claims based on conduct or statements which would not form part of the evidence to be given (as in the case of fabrication of evidence in Darker v Chief Constable of the West Midlands, supra or the suborning of witness to give false evidence as in Singh v Reading Borough Council [2013] 1 WLR 3052).  The tortious acts of a defendant in a malicious prosecution are the malicious procurement of prosecution.  In a case where no court process has been initiated, there is simply no act of prosecution, not to mention the procurement of the same.

56.Thus, contrary to the submission of Mr Fung, the distinction drawn by the Judge between investigation and prosecution is a sound one.  Support for such distinction can also be derived from the judgments in Darker v Chief Constable of the West Midlands, supra, Lord Cooke at p.453H to 454B, and 454G to 455B, Lord Clyde at p.459A to E. 

57.Mr Fung prayed in aid the principle that those who suffer a wrong should not be without a remedy.  However, as we said above, that principle is not absolute and it has to be balanced against other policy considerations in the context of administration of justice.  In respect of the ‘wrongs” suffered by the Plaintiff as identified by Mr Fung, the law  provides redress in appropriate circumstances by way of the tort of malicious procurement of arrest and malicious procurement of search warrants.  But the Plaintiff did not rely on those causes of action at the court below and, as mentioned above, there were evidential gaps in establishing the nexus between the Defendant’s statements and information provided to CCB and the decisions of CCB in embarking on the application for search warrants and arresting the Plaintiff. The relevant authorities clearly established that it is not enough if a complainant merely acted as a witness in giving the information to the investigating authority: see Davidson v Chief Constable of North Wales [1994] 2 All ER 597; Shamoon Ahmed v Mohammed Shafique, supra). 

58.Mr Fung submitted that Crawford v Jenkins, supra presented an obstacle in a claim for malicious procurement of arrest.  We do not propose to go into that question at length as the Plaintiff did not rely on such a cause of action in the present case.  However, we note that in that case, the only matters relied upon to support the plea of procurement was the false complaints made to the police, see [13] and [16].  It was against such background that the English Court of Appeal held that the witness immunity rule should apply at [57].  

59.For these reasons, we come to the clear conclusion that in the absence of any charge laid against the Plaintiff by CCB, there cannot be any prosecution for the purpose of the tort of malicious prosecution.  The Judge was correct in dismissing the claim of the Plaintiff on this basis.

The complainant as prosecutor

60.It also follows from this conclusion that the Defendant cannot be regarded as a prosecutor.  As mentioned, quite plainly CCB (and perhaps the Department of Justice) had exercised independent judgment in deciding that no prosecution should be brought. 

61.We therefore do not see any need to repeat the discussion on the law in this respect.  In Hong Kong, the law is stated in Jae Hoon Oh v Richdale [2005] 2 HKLRD and the subsequent decision by a 3-member Court of Appeal in CACV 162 of 2003, 7 October 2005, applied in Pathak Ravi Dutt v Sanjeev Maheshwari CACV 129 of 2014, 14 December 2015.

Refusal of leave to re-amend

62.On the third day of the trial, after the close of the Plaintiff’s case, counsel for the Plaintiff sought leave to re-amend the Statement of Claim to add a cause of action based on the malicious procurement of search warrants.  Though the Plaintiff had sought information from CCB before trial, his solicitors were unable to get copies of the search warrants on a voluntary basis.  Such copies were obtained in the course of the evidence of the senior inspector.  However, there was no forewarning to the defence lawyers that the Plaintiff would rely on such a cause of action when the senior inspector gave evidence.  The application for re-amendment was only made after the senior inspector had finished giving evidence and the Plaintiff’s case had been closed.  Counsel for the Defendant therefore justifiably submitted to the Judge that he did not have the opportunity of cross-examining the senior inspector on the causal link between the Defendant’s evidence and the decision of CCB to apply for search warrants[1].  Counsel for the Defendant also said he needed time to reflect and consult the Defendant if such re-amendment were granted.

63.The Plaintiff should have been aware that search warrants had been obtained (as the warrants were executed in his presence).  Further, the Judge was of the view that those advising the Plaintiff should have been able to plead a cause of action based on the procurement of search warrants even without sight of the actual warrants.

64.Against this background, the Judge refused to grant leave to re-amend at a very late stage in the trial. 

65.Mr Fung accepted the high burden he carried in trying to persuade us to interfere with this case management decision of the Judge.  His main ground of appeal in this respect focused on the Judge’s assessment in his ruling that the additional cause of action would not change the complexion of the Plaintiff’s case.  Counsel submitted that the Judge was obviously wrong in so saying because the Plaintiff could succeed under the new cause of action without establishing prosecution had been commenced. 

66.With respect, if one were to read the transcript of the exchanges between the Judge and counsel for Plaintiff[2] before the Judge delivered his ruling, it is clear that the Judge was referring to the requirement of negating the independent discretion of CCB in order to implicate the Defendant in the procurement of the search warrants as similar to one in respect of a decision to prosecute.  Thus, in his ruling the Judge explicitly cross-referenced what he had ventilated with counsel on the issue of the independent judgment of the police and the evidence of the senior inspector.  The Judge did not fall into the error as submitted by Mr Fung.

67.Mr Fung further submitted that the senior inspector could have been re-called to be cross-examined by counsel for the Defendant.  However, whether this course was viable depends on many factors.  The Judge had to consider the disruption that the amendments could cause to the trial.  We had no idea whether the senior inspector would be available on short notice (as counsel for the Plaintiff did not address the Judge in this respect).  Defence counsel having indicated that he needed time to consider the implications with his client if the amendments were allowed, the Judge was entitled to be cautious bearing in mind that the amendments were to add a new cause of action at a very late stage. 

68.We are not as confident as Mr Fung that had the amendment been allowed the trial could still be completed within the time allotted for the case.  Quite apart from the adjournment which the defence was entitled to seek, it might well be that the conduct of the defence case might be different with additional evidence to be obtained from CCB regarding the decision to obtain the search warrants.  Pre-trial discovery would have to be sought to achieve that.

69.We are also not persuaded that had the amendment been granted, the Plaintiff would have succeeded in establishing the new cause of action bearing in mind the gaps in the evidence we have earlier alluded to.

70.On the whole, we do not see any basis for intervening with the Judge’s decision in refusing the re-amendments.

Disposition

71.We therefore dismiss the appeal and order the Plaintiff to pay the costs of the Defendant in this appeal.  Such costs are to be taxed if not agreed.

Mr Eugene Fung SC and Mr George Chu, instructed by Michael Pang & Co, for the plaintiff

Mr Maurice J Chan, instructed by Chak & Associates, for the defendant