Tang Hanbo v. The Securities and Futures Commission and Another

HCAL 229/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 229 OF 2016

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D E C I S I O N

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1.This is an eleventh hour application for leave to cross-examine two of the deponents of the 1^st Respondent (SFC) at the hearing of the Applicant’s (Tang) application for judicial review (JR) which is to begin tomorrow.

2.The Summons in question was only filed on 1 November 2017.  There is no indication in the Summons on the parameters of the proposed cross-examination.

3.In the JR, Tang seeks to challenge: (1) a search warrant dated 27 July 2016 (Warrant) issued by a Magistrate which allowed the SFC to search his residence; and (2) the subsequently transmission by SFC of some of the materials seized from the execution of the Warrant to China Securities Regulatory Commission (CSRC). 

4.The ground of challenge in the JR is that the SFC investigator had informed the Magistrate that the Warrant was for investigating suspected breaches of Hong Kong laws and codes in relation to a Hong Kong listed company, but in fact it was primarily or at least significantly for assisting CSRC in their investigation of alleged breaches of Mainland law in respect of Mainland stocks.

5.Given the imminence of the hearing of the JR, it is necessary to deal with this application swiftly.  It must be mentioned that this application has taken up the precious time which this court has in preparing for the said hearing.  I shall provide my reasons for the determination of this application in succinct terms. 

6.Firstly, the issue of potential factual disputes was raised by this court with Tang’s team of counsel at the hearing of the application for leave to apply for JR on 2 May 2017, and the court queried whether it was more appropriate to ventilate Tang’s grievances in a private action when the Warrant had been executed and the transmission of materials already taken place and resulted in penalty imposed by CSRC on Tang.  However, senior counsel repeatedly assured the court that there would be little scope for factual dispute. 

7.Whilst it is right that Tang’s legal advisors did not have sight of the evidence of the SFC until a later stage when it was filed (7 August 2017), it is equally right that Tang had been forewarned about the potential factual conflicts.  I fail to see any valid excuse for bring this application at the 11^th hour. 

8.It is disputed that if this application is allowed, the hearing of the JR inevitably would have to be adjourned and re-fixed.

9.Secondly, I accept that there is prejudice to the SFC (more accurately, to public interest) caused by the delay in this application if it is allowed.  The reason is that on 30 August 2017 the SFC had agreed with Tang to put on hold the use of the materials seized in the execution of the Warrant in the intended interviews with Tang and his wife. Consequently, SFC’s investigation of Tang for breaches of Hong Kong laws and codes is hampered.  The agreement was reached when the hearing of the JR was fixed.  Any delay in the resolution of the JR would be detrimental to public interest. 

10.Thirdly, it is trite that cross-examination in a JR will only be ordered in the most exceptional cases: see Dembele Salifou v Director of Immigration [2015] 4 HKC 297 at §11.

11.Further, I agree with the dicta of Mr Justice Reyes in Yue Yuen Marketing Co Ltd v Commissioner of Inland Revenue [2012] 4 HKLRD 761 at §45 that the court should not allow any cross-examination in a JR without well-defined boundaries.  Undisciplined cross-examination is unhelpful to the court, and an applicant is not allowed to flesh out a speculative case by way of cross-examination. 

12.There is no well-defined boundaries for the cross-examination in question.  The submissions made on behalf of Tang suggest that the court should not accept what was stated in the documents produced by the SFC without cross-examination.  In blunt terms, the suggestion is that they might have been generated to cover the tracks of the officers in question. Cross-examination along this line would be very extensive, involving matters of nuts and bolts. 

13.I am unable to accept that there are real or substantial inconsistencies and contradictions in the evidence which justify this application.  The criticisms advanced in support of this application are largely forensic analysis of parts of the evidence of the SFC.  I agree with the submissions of the SFC that the evidence must be evaluated as a whole and in its proper context.  There are ample contemporaneous documents which will assist the court to determine the merits of Tang’s case.

14.This application must be properly justified. The court looks at the substance of the assertions that the deponents are untruthful.  The exercise is not one of combing through the evidence with a microscope and say, eg, that X had failed to mention in his evidence the presence of Y[1]. There can be a number of explanations for the omission.  Unless there is adequate reason to believe that the omission was something sinister, cross-examination would only serve the purpose of a fishing exercise.

15.For these reasons, this application is declined.  I make an order nisi that the costs of and occasioned by it be paid by Tang.

Mr Edward Chan SC, Mr Laurence Li and Mr Tony Chow, instructed by C L Chow & Macksion Chan, for the Applicant

Mr Benjamin Yu SC, instructed by the Securities and Futures Commission, for the 1^st Respondent