Read the full judgment text of CACV 230/2015 on BabelCite. This Court of Appeal judgment was delivered on 17 January 2019 before Cheung JA, Yuen JA, G Lam J.
Constitutional law – property rights – access to court – Organized and Serious Crimes Ordinance (Cap 455) ss 25, 25A – consent regime – 'Letter of No Consent' – whether engaging Articles 6 and 105 of the Basic Law – whether 'prescribed by law' – proportionality – manifestly without reasonable foundation standard – margin of discretion – alleged pyramid scheme – informal freezing of bank accounts – chose in action – chilling effect – systemic and fact-specific challenges – judicial review – appeal from HCAL 167/2014. The applicants, Interush Limited and Interush (Singapore) Pte Limited, operated an alleged pyramid scheme under the Pyramid Schemes Prohibition Ordinance (Cap 617) through which members paid fees and could earn bonuses. Following newspaper coverage in November 2013, the Police and Customs & Excise investigated and issued 'Letters of No Consent' to HSB and BEA, preventing dealings with the applicants' accounts. The applicants applied for judicial review seeking declarations that sections 25(1) and 25A of the Organized and Serious Crimes Ordinance ('OSCO') are unconstitutional for being inconsistent with the protected property rights under Articles 6 and 105 of the Basic Law and access to court rights under Articles 35 and 80 of the Basic Law and Article 10 of the Hong Kong Bill of Rights. Patrick Li J refused the judicial review, holding that property rights were not engaged because the 'no consent' letter did not itself freeze the accounts and the freezing effect was caused by banks acting on their own initiative. Held, dismissing the appeal: (1) Property rights are engaged. Although the 'Letter of No Consent' does not by itself freeze the accounts, the practical impact of the criminal law on banks 'informally freezes' the accounts, affecting the applicants' use of money held in the form of a chose in action (following The Chief Officer, Customs & Excise v Garnet Investments Ltd). The 'assumption of risk' argument was rejected as contrary to Hysan Development Co Ltd v Town Planning Board (2016) 19 HKCFAR 372. (2) The applicants were not entitled to raise the 'prescribed by law' argument for the first time on appeal, as it was not raised in the Form 86, before the Judge, or in the Notice of Appeal. (3) Applying the four-step proportionality test from Hysan and the 'manifestly without reasonable foundation' standard, the consent regime was proportionate and justified. The absence of express time limits did not render it disproportionate, as there is an implied duty on public bodies to act reasonably, and reasonableness is not measured by reading in time limits. The restraint order regime and overseas jurisdictions were not appropriate comparators, given the margin of discretion owed to the legislature and executive. (4) The fact-specific Wednesbury unreasonableness challenge failed; the delay in applying for a restraint order was justified by the cross-border complexity of the case. (5) The right of access to court under Article 35 of the Basic Law and Article 10 of the Hong Kong Bill of Rights was not engaged, as the applicants retained judicial review and civil claim remedies. The respondents' application to adduce new evidence was refused as it was exceptional to introduce new evidence in an appeal from judicial review. Costs awarded to the respondents save for costs relating to the application for new evidence, which were to be borne by the respondents. Certificate for two counsel granted.
Legal issues: Engagement of property rights by consent regime under OSCO ss 25/25A · Whether the consent regime is 'prescribed by law' · Proportionality of the consent regime under OSCO ss 25/25A · Fact-specific Wednesbury unreasonableness challenge · Engagement of access to court rights
Outcome: Appeal dismissed; respondents' application to adduce new evidence refused.
Cited by 3 cases · Cites 2 cases