Sino Bright Enterprises Co., Ltd v. Secretary for Justice

HCAL 1060/2017

[2019] HKCFI 2882

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 1060 OF 2017

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J U D G M E N T

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A. INTRODUCTION

1.This is the applicant’s application for judicial review to challenge the decision of the then Secretary for Justice (“SJ”) on 20 October 2017 (the “Decision”), in which he decided not to prosecute the former provisional liquidators of the Grande Holdings Limited (“Grande”), namely Mr Fok Hei-yu Vincent (the “1^st interested party”) and Mr Roderick John Sutton (the “2^nd interested party”), in relation to two counts of agent soliciting an advantage, contrary to section 9(1) of the Prevention of Bribery Ordinance, Cap 201 (“POBO”), and one count of blackmail, contrary to section 23 of the Theft Ordinance, Cap 210.

2.Leave to apply for judicial review was granted on the papers by Li J on 29 March 2018.

B.  THE APPLICANT’S CASE

3.According to the Originating Summons (Form 86A) dated 9 April 2018, the applicant seeks, inter alia, the following relief: –

(1) an order of certiorari to quash the Decision;

(2) further or alternatively, a declaration that the SJ’s failure to give adequate reasons for the Decision rendered it unlawful and void;

(3) an order of mandamus to direct the SJ to reconsider the Decision in accordance with the law and to provide adequate reasons for it;

(4) further or other relief; and

(5) an order for costs.

4.The applicant’s principal bases for challenging the Decision are as follows: –

(1) the Decision is amenable to judicial review because the SJ has failed to act in accordance with the Prosecution Code and failed to provide reasons for the Decision;

(2) the 3 grounds for judicial review are: –

(a) the SJ has failed to provide adequate reasons to support the Decision (Ground 1);

(b) the Decision is irrational, if not perverse (Ground 2); and

(c) the SJ has failed to act in accordance with the Prosecution Code, which rendered the Decision illegal (Ground 3).

C. SUMMARY OF THE RESPONDENT’S POSITION

5.In summary, the respondent submits that this is a clear case where the application for judicial review should be refused for the following reasons: –

(1) a judicial review of a prosecutorial decision is rare and exceptional and hence “truly exceptional circumstances” must exist to justify judicial intervention.  Judicial intervention is justified only where it can be shown that the SJ has acted outside “the limits of his constitutional power”.  The requirement is not satisfied in this case.  The application for judicial review should be refused on this ground alone; and

(2) in any event, the applicant has failed to establish a case for judicial review, in particular: –

(a) the SJ is not required to provide reasons for the decision not to prosecute.  This is entirely consistent with the general practice recognised by the courts in Hong Kong and other common law jurisdictions.  Circumstances of this case do not support a departure from the general practice.  Even if reasons are offered, they should be in very general terms;

(b) the Decision is a rational one. The Advising Counsel, Ms Ng Shuk-kuen, Senior Public Prosecutor (“Ms Ng”) made the decision not to prosecute based on the evidence available before her, and with due consideration of the legal opinions rendered by Senior Counsel retained by the applicant.  The conclusion that there is insufficient evidence to prosecute the 1^st and 2^nd interested parties for any offence is a correct one; and

(c) the Decision is a legal one.  In accordance with the Prosecution Code (2013), Ms Ng assessed the sufficiency of evidence and rightly concluded that there was no reasonable prospect of conviction based on the available evidence.

D.  THE DECISION

6.The Decision involves 3 alleged offences (collectively, the “Alleged Offences”) which occurred on the following occasions during the course of Grande’s liquidation: –

(1) The 1^st Alleged Offence took place on or around 30 April 2014 when the 1^st and 2^nd interested parties, as Grande’s joint and several provisional liquidators, via their legal representative Mr Timothy Peter Kentish (“Kentish”) of Messrs Lipman Karas, solicited for an advantage in a draft restructuring agreement exchanged between the provisional liquidators and the applicant (the “Draft Agreement”).  The Draft Agreement contained a Clause 2.2.7 which solicited for, inter alia: –

(a) The applicant’s support and/or procurement of support for the appointment of the provisional liquidators as official liquidators of Grande; and

(b) The applicant’s consent to an order for the dismissal of a personal action (HCA 92/2014) against FTI Consulting (Hong Kong) Limited (“FTI”) and the 1^st interested party.

(collectively, the “Advantages”).

(2) The 2^nd Alleged Offence occurred on 22 May 2014 during a meeting between the 1^st interested party and representatives of the applicant and McVitie Group Holdings Limited (“McVitie”) at FTI’s office at Level 22, The Center, 99 Queen’s Road Central, Central, Hong Kong (the “Meeting”). At the Meeting, the 1^st interested party, acting on behalf of himself and the 2^nd interested party, solicited once again for the Advantages by saying: –

(a) If support from the applicant and McVitie for the appointment of the 1^st and 2^nd interested parties as Grande’s official liquidators is forthcoming, and if the applicant would stay the civil action no HCA 92/2014 against the 1^st interested party and FTI personally, then the provisional liquidators would not only review the proof of debts (“PODs”) of the applicant and the two other companies which were previously objected to on an earlier occasion, but would also “build in the necessary commercial arrangements” so that the same PODs previously objected to could be admitted for the purpose of Grande’s restructuring scheme; and

(b) If the applicant does not accede to the provisional liquidators’ request as solicited, Grande’s restructuring process would be “back to square one” whereby Grande will return to normal liquidation, the provisional liquidators would not agree to the applicant’s proposed self-rescue plan, and the applicant would be expected to suffer financially.

(3) The 3^rd Alleged Offence took place on 23 May 2014 during a telephone conversation between the 1^st interested party, acting on behalf of himself and the 2^nd interested party, and Mr Ian Grant Robinson (“Robinson”) of the applicant (the “Call”).  During the Call: –

(a) The 1^st interested party demanded for the applicant’s support towards the appointment of him and the 2^nd interested party as Grande’s official liquidators with express menaces, by stating that the absence of support from the applicant, McVitie and/or Gain Alpha would “… make the whole things very ugly…” and would amount to a “deal breaker” for any proposals put forth by the applicant for the benefit of Grande’s restructuring; and

(b) The 1^st interested party also asked that the personal action against him be “preferably withdrawal” or stayed.

E.  FACTUAL BACKGROUND

E1.    Background of winding-up proceedings for Grande

7.The applicant is a major creditor of Grande and presented a winding up petition on 30 May 2011.  Since then, trading of Grande’s shares was suspended on the Hong Kong Stock Exchange (“HKSE”).

8.The interested parties were appointed as the joint and several liquidators of Grande on 31 May 2011 by an order of the High Court.  On 31 March 2012, the interested parties submitted a resumption proposal to the HKSE.  The proposal was, however, rejected and Grande was placed in the second stage of delisting by the HKSE.

9.A second proposal was submitted but it was also rejected by the HKSE on 28 June 2013.  As a result, Grande was placed in the third stage of the HKSE’s de-listing procedures and was given until 24 December 2013 to submit a viable proposal for the resumption in trading of the shares. 

10.On 12 September 2013, DHCJ Le Pichon made a winding-up order against Grande.

11.From then on, the interested parties and the applicant engaged in a series of long and often hostile negotiations in relation to restructuring proposals for Grande.  The relevant background has been set out in the affidavits filed by Mr Kentish and the 1^st interested party in the winding-up proceedings:

(1) From October 2013, the applicant pressed the interested parties to engage in the Self-Rescue Plan.  The interested parties, however, did not consider the aforesaid Self-Rescue Plan to be in the best interests of Grande’s general body of creditors, as it failed to provide creditors with the option of a cash dividend.  Further, a body of creditors (known as the “Kayne Creditors”) would not support a resumption proposal without a substantial cash dividend.

(2) On 10 December 2013, the applicant issued summons seeking orders to compel the interested parties to submit the Self-Rescue Plan.  In addition, the Kayne Creditors also assigned their claim in the winding up to McVitie, another creditor of Grande.

(3) Given that (i) there was no viable alternative proposal; (ii) Kayne Creditors had assigned their claim against Grande to McVitie; (iii) the applicant’s indication that it would meet the costs of the Self-Rescue Plan, the interested parties agreed to submit the proposal to the HKSE on 16 December 2013.

(4) On 15 January 2014, the applicant commenced a civil action under HCA 92/2014 against the 1^st interested party and FTI personally for damages and for loss it allegedly suffered as a result of the 1^st interested party and/or FTI’s misrepresentation and false advice prior to the appointment of the interested parties.

(5) The interested parties had, since January 2014, sought for the payment of their fees and expenses in relation to the preparation of the Self-Rescue Plan.  However, despite a series of ultimatums to Messrs K&L Gates (“K&L Gates”), solicitors for the applicant both in these proceedings and in the winding-up proceedings, no positive response from the applicant was given.  This gave rise to concerns because if the resumption proposal were to continue, the costs of the proposal would need to be met out of the assets of Grande.

(6) A further ultimatum was issued on 5 March 2014 to K&L Gates that unless the resumption proposal was improved by 10 March 2014 with the inclusion of a cash dividend, it would be withdrawn by the interested parties.

(7) Thereafter, on 12 March 2014, an urgent application was made by the applicant for orders that the interested parties do not withdraw the resumption proposal.  At the hearing on the same day, the applicant undertook to meet the costs of the resumption proposal going forward and to pay HK$ 5 million into court as security for the undertaking.  Upon the provision of the undertaking, the interested parties agreed not to withdraw the resumption proposal for the time being.

(8) The 1^st Creditors’ meeting was then held on 14 March 2014. At the meeting, the applicant, McVitie and Gain Alpha were against the appointment of the interested parties as Grande’s official liquidators.  However, the independent creditors voted for the 1^st and 2^nd interested parties to remain in office.

(9) The applicant, McVitie and Gain Alpha are all associated parties of Mr Ho Wing On (former chairman and director of Grande), against whom the interested parties had filed a protective writ on behalf of Grande for proceedings alleging, inter alia, stripping assets from the company through 14 separate transactions.

12.Thereafter, from March 2014 the interested parties and the applicant continued negotiations in attempt to reach a restructure agreement based on the applicant’s resumption proposal.  In addition, the HKSE informed the interested parties that it required a restructure agreement to be entered between Grande and the applicant by the end of April 2014.  It was the events after April 2014 that led to the applicant’s present allegations against the interested parties.

E2.    Events leading to the Alleged Offences

13.In short, the applicant claims that the interested parties had committed the following offences in the course of their negotiations with the applicant in relation to the restructure agreement:

(1) Two counts of soliciting for an advantage contrary to section 9(1) of the POBO.

(2) One count of blackmail contrary to section 23 of the Theft Ordinance.

14.The relevant factual background for each of the Alleged Offence is set out below.

E2a.  First alleged solicitation of advantage

15.On 29 April 2014, the 1^st interested party informed Mr Kentish that, as previously requested, the applicant was willing to provide a cash dividend to creditors.  Although the amount was not considered to be sufficient by the 1^st interested party, it appeared to Mr Kentish that the parties were close to reaching an agreement.  Mr Kentish then sent an email to the 1^st interested party highlighting further matters which should desirably be addressed in the proposed restructure agreement (“29 April 2014 Email”).

16.The issues mentioned in the 29 April 2014 Email include: (i) the applicant and others withdraw their opposition to the appointment of the interested parties; (ii) the action by the applicant against the 1^st interested party and FTI be withdrawn (“Relevant Proposals”).  According to Mr Kentish, the rationale behind the email was that it would be in the interests of all parties for the various outstanding disputes to be resolved and further costs avoided.

17.Significantly, the rationale for (i) and (ii) above were:

(1) For (i), it was considered that there were strong reasons for the court to disregard the votes cast by creditors associated with Mr Ho (ie the applicant, McVitie and Grand Alpha), and it was very likely that the 1^st and 2^nd interested parties would be appointed as liquidators of Grande in spite of their opposition.  If the applicant’s camp could withdraw their opposition, substantial costs could be saved.

(2) For (ii), given that HCA 92/2014 was essentially a complaint against the conduct of the interested parties as provisional liquidators of Grande, and the proceedings would have to be discontinued if the applicant’s resumption proposal was approved by the HKSE and creditors to enable the interested parties to be released.

18.The overarching concern was that of costs in relation to each of the above, which was apparently a concern shared by the applicant.

19.Thereafter on 30 April 2014, Mr Chiang of the applicant informed the 1^st interested party that the applicant was willing to increase the amount of cash dividend.  As a result, a revised draft restructuring agreement was prepared and circulated amongst the relevant parties.  The covering email of the draft agreement by the 1^st interested party expressly stated that the draft was provided “on a without prejudice basis for the purpose of further advancing negotiations.” (“30 April 2014 Email”).

20.The draft agreement contained, inter alia, the Relevant Proposals in clause 2.2.7 referred to in paragraph 6(1) above:

(1) The applicant do take “all steps necessary to support the appointment of the Provisional Liquidators as Liquidators of the Company…”, including to procure McVitie and Gain Alpha to also support the appointment of the interested parties as liquidators of Grande (Clause 2.2.7 (c));

(2) The applicant consent to orders for the dismissal of HCA 92/2014 with no order as to costs (Clause 2.2.7(f)).

21.The applicant now contends that the email attaching the draft agreement on 30 April 2014 amounted to a solicitation of advantage by an agent contrary to section 9(1) of the POBO: see Lawrence Lok SC’s legal opinion dated 22 May 2017 (“Mr Lok SC Opinion”).

22.On 2 May 2014, a revised restructuring agreement was signed with clause 2.2.7 removed and replaced with a new clause 2.4, which required the parties to negotiate and resolve the outstanding legal actions within a period of 4 weeks instead of contesting them unnecessarily to the detriment of Grande (“Executed Agreement”).

E2b.  Second alleged solicitation of advantage

23.The second alleged offence arose from the Meeting amongst, inter alios, Mr Robinson and Mr Chiang for the applicant and the 1^st interested party at FTI’s offices.  

24.The applicant claims that the 1^st interested party had solicited again for (i) support for the appointment of the interested parties as Grande’s official liquidators; and (ii) a stay of HCA 92/2014.  The solicitation was allegedly made in exchange for the interested parties to review the proof of debts of the applicant, McVitie and Gain Alpha previously objected to at the 1^st Creditors’ Meeting and to admit the same for the purpose of Grande’s restructuring scheme.

E2c.   Alleged blackmail

25.The alleged blackmail took place during the Call between the 1^st interested party and Mr Robinson on behalf of the applicant on 23 May 2014.  It is alleged that the 1^st interested party had made unwarranted “threats” to the applicant, McVitie and Gain Alpha in order to gain their support of the interested parties’ appointment as liquidators of Grande.

F. DISCUSSION

F1.    The Decision is not amenable to Judicial Review

26.The starting point is that a prosecutorial decision of the SJ is generally not amenable to judicial review. Prior to the handover in 1997, judicial review had little, if any, role to play in relation to prosecutorial decisions.

27.In Keung Siu-wah v Attorney General [1990] 2 HKLR 238, the Court of Appeal expressed the view that it was a “constitutional imperative” that the courts would not interfere with the Attorney General’s prosecutorial discretion and a decision to prosecute or not to prosecute was not amenable to judicial review.  Fuad VP, with whom the other judges agreed, stated at p 253B-D that, “I entertain no doubt whatever that the decision to prosecute in the instant case, likewise, is not subject to the judicial review process; such a decision does not fall within the criteria for a reviewable decision stated by Lord Diplock in Council of Civil Service Unions at pp.408-409.  Only the Attorney General has access to all the necessary information.  The cases stress (e.g. Chief Constable of North Wales Police v Evans [1982] 1 WLR 1155, 1173) that judicial review is concerned with reviewing, not the merits of the decision in respect of which the application for judicial review is made, but the decision-making process itself.  In the case of a decision by the Attorney General to institute a prosecution how is this review to be conducted?” and “I can imagine few subjects less adapted to the judicial review procedure under O.53 than the exercise of the Attorney General's discretion in deciding whether to institute criminal proceedings and what charge should be preferred”.

28.See also the observation of Penlington JA at pp 255J-256A that “… the authorities are overwhelming that the decision of the Attorney General whether or not to prosecute in any particular case is not subject to judicial review”.

29.Following the handover in 1997, Article 63 of the Basic Law (“BL63”) is the bulwark of prosecutorial independence.  It provides that, “The Department of Justice of the Hong Kong Special Administrative Region shall control criminal prosecutions, free from any interference”.  

30.The control in criminal prosecutions of course encompasses the making of prosecutorial decisions of whether or not to prosecute.  This prerogative is also underpinned in section 15(1) of the Criminal Procedure Ordinance, Cap 221.

31.In Kwan Sun-chu Pearl v Department of Justice HCAL 56/2005, Hartmann J (as he then was) refused leave to judicially review a decision not to prosecute based principally on Keung Siu-wah, ibid.  Furthermore, His Lordship held that absent any dishonesty, bad faith or some other exceptional circumstances, judicial review would not be available, even taking into account the development of the law since Keung Siu-wah (§§13-16).  On the evidence, His Lordship could not “find any grounds for suggesting that the Department of Justice came to a plainly wrong decision not to prosecute; that is, a decision which is unreasonable in law” (§10).

32.On appeal in Kwan Sun-chu Pearl v Department of Justice [2006] 3 HKC 207, the Court of Appeal affirmed Hartmann J’s decision and reasoning.  At §7, Tang JA (as he then was) expressed his agreement with Hartmann J’s decision and went on to say that “Whether Keung Siu Wah v Attorney General precludes judicial review in relation to the decision of the Department of Justice not to prosecute whatever the circumstances is an open question so far as the Court of Final Appeal is concerned and it may be that despite Young v Bristol Aeroplane Co Ltd [1944] KB 718 CA, the matter is open to review by this court”.

33.Then came the landmark case of RV v Director of Immigration [2008] 4 HKLRD 529, where Hartmann J qualified Keung Siu-wah and held that the SJ’s control of criminal prosecutions is a constitutional power and must therefore be exercised within constitutional limits.  On a true construction of the Basic Law, the courts have jurisdiction to judicially review the SJ’s power to control criminal prosecutions and to determine whether or not he had acted within the limits of his constitutional power.  That was not considered a defiance of the binding pre-1997 precedent of Keung Siu-wah but the recognition of a new constitutional order under the Basic Law.  See §§55-70.

34.At §§71-75 of RV, Hartmann J identified three circumstances under which “judicial encroachment” is called for, viz (1) where the SJ acts in obedience to a political instruction (§71); (2) where the SJ acts in bad faith, for example, if one of his officers instituted a prosecution in return for payment of a bribe (§72); or (3) where there is a rigid fettering of discretion, for example, a refusal to prosecute a specific class of offences detailed in a statute lawfully brought into law (§73). Importantly, His Lordship emphasized that the role of the SJ must not be reduced to “that of an ordinary administrator” and that the circumstances justifying judicial encroachment “must be truly exceptional and must demonstrate that the Secretary has acted outside of his very broad powers” (§74).

35.In this regard, the Court of Appeal’s judgment in Re C (A Bankrupt) [2006] 4 HKC 582 is pertinent.  At §20, Stock JA (as he then was) observed in the leading judgment that “I apprehend that it is to such interference, that is to say, interference of a political kind, to which Art 63 is directed.  But the rule that ensures the Secretary’s independence in his prosecutorial function necessarily extends to preclude judicial interference, subject only to issues of abuse of the court’s process and, possibly, judicial review of decisions taken in bad faith”. (emphasis supplied).

36.The decision in RV was expressly adopted by the Court of Appeal in Re Leung Lai Fun [2018] HKLRD 523.  At paragraph 10, the court held as follows: –

“10. Article 63 of the Basic Law provides that ‘The Department of Justice shall control criminal prosecutions, free from any interference’. As Hartmann J had pointed out in RV v Director of Immigration [2008] 4 HKLRD 529, this provision includes the protection of the independence of the Department of Justice’s control of criminal prosecutions from judicial encroachment. It is only if the case belongs to those extremely rare situations, such as where there is evidence proving that the Department of Justice has acted in obedience to political instruction when making the decision, or is acting in bad faith, such as to cause the Court to find that the prosecutorial decision is unconstitutional, that the Court will have jurisdiction to review the decision concerned. Otherwise the Court should not encroach on the right of the Department of Justice to control prosecutions. This is the major premise which is founded on principle.” (emphasis supplied)

37.As noted by Chow J in Kwok Cheuk Kin v Secretary for Justice [2019] HKCFI 2215, handed down on 6 September 2019, Re Leung Lai Fun is the latest judicial guidance from the Court of Appeal on the issue of the amenability of the Secretary for Justice’s prosecutorial decisions to judicial review.  It can also be noted that Re Leung Lai Fun is a case which involved a decision not to prosecute.

38.As submitted by the respondent, although the “truly exceptional” circumstances Hartmann J referred to in RV are not stated to be exhaustive, its ambit must be narrowly confined.  Classic judicial review grounds such as irrationality and illegality cannot, without more, constitute “truly exceptional” circumstances which warrant a judicial review of a prosecutorial decision, or else the SJ’s role would effectively be reduced to “that of an ordinary administrator”.

39.Prior to the instant case, the only case in which leave was granted to commence judicial review against a decision not to prosecute is D v Director of Public Prosecutions [2015] 4 HKLRD 62.  There the prosecutorial decision was challenged primarily on the basis that the Director of Public Prosecutions had misunderstood or misapplied the test for recklessness and thus reached a clearly wrong decision.

40.However, the decision in D does not in any way alter the position that a decision not to prosecute is generally not amenable to judicial review, save and except in limited and “truly exceptional” circumstances.  In Re Leung Lai Fun, Supra, the Court of Appeal, after referring to the principles in RV, observed that: –

“11. As regards the case cited by Ms Leung, D v Director of Public Prosecutions [2015] 4 HKLRD 62 that judgment did not raise any legal concept inconsistent with the principle mentioned above. In that case, the Judge took into account the particular circumstances of the case and took the view that the applicant's case was reasonably arguable. That was the Judge’s preliminary view and there was no further development of the case. In any event, the decision is not binding upon this Court.”

41.The exercise of judicial restraint when reviewing prosecutorial decisions by the public authorities is shared across common law jurisdictions: See in Canada, Krieger v Law Society of Alberta 2002 SCC 65 at §§32, 47; in Singapore, Yong Vui Kong v Public Prosecutor[2012] 2 SLR 872 at §17; in Fiji, Matalulu and Another v Director of Prosecutions[2003] 2 HKC 457; in Mauritius (held by the Privy Council), Mohit v Director of Public Prosecutions of Mauritius[2006] UKPC 20 at §§17, 21.  

42.As such, the applicant’s reliance on the English authorities is misconceived.  In particular, the applicant omitted the Court of Appeal’s clear statement of principle in Re Leung Lai Fun, and invites this court to effectively conduct an extensive review of the merits of the underlying evidence in deciding that the Decision was perverse or irrational.  I agree that this approach essentially relegates the SJ’s decision to that of an ordinary administrator, as cautioned against by Hartmann J in RV.

43.Applying the principles enunciated in the Hong Kong cases cited above, it is abundantly clear that the instant application does not involve any “truly exceptional circumstances” so that the SJ’s prosecutorial decision is vitiated on constitutional grounds.

44.As submitted by the respondent, it is pertinent to note that the applicant has not suggested that in reaching the Decision, the SJ or the Advising Counsel Ms Ng was acting in obedience to any political instruction or in bad faith.  Nor has it been suggested that there was any rigid fettering of prosecutorial discretion.  The applicant’s contention that the Decision was plainly wrong and contrary to the evidence does not and cannot bring the Decision within the narrow class of prosecutorial decisions that the court may judicially review.  In truth, the applicant can at best argue that there may on one view be sufficient evidence to prosecute the 1^st and 2^nd interested parties.  As can be seen in Re Leung Lai Fun, such an “error of law”, even if established, does not render the Decision judicially reviewable. 

45.I agree that the instant application for judicial review should be dismissed on this ground alone.

46.In this regard, the applicant has submitted that a distinction should be drawn between a decision to prosecute and a decision not to prosecute.  The applicant says this is because judicial review is the only means by which a citizen can seek redress against a decision not to prosecute.

47.Whilst this distinction has been drawn in some previous decisions, in my view, it cannot override the statement of principle in RV and Re Leung Lai Fun that the prosecutorial decision has to be “unconstitutional” before the court will have “jurisdiction” to review the decision concerned (see paragraph 36 above).  In this regard, as already noted above, Re Leung Lai Fun itself was a case where the Director of Public Prosecutions had decided not to prosecute.

F2.    No valid case for Judicial Review

48.In any event, I agree that none of the 3 grounds for judicial review put forward by the applicant has any merit.

Ground 1 – Duty to give adequate reasons

49.In its skeleton submissions at paragraph 16, the applicant properly “concedes that Ground 1 is now theoretical, as reasons for the Decision have been disclosed pursuant to the Affirmation of Ms Ng dated 4 June 2018”.  Given the academic nature of the matter, no relief should be granted.  

50.But in any event, the proposition that the SJ has no duty to provide reasons for prosecutorial decisions is well supported by authorities.

51.In Hong Kong, the courts have consistently rejected the notion that there is a general duty to give reasons for prosecutorial decisions.  In Ma Pui-tung v Department of Justice, HCAL 15/2008 (Judgment dated 25/02/08), Saunders J acknowledged the DPP’s established practice:

“The refusal of the DPP to give reasons:

32. Mr Ma challenges a refusal on the part of the DPP to give reasons for the decisions he has made. There is no evidence whatsoever to suggest that there has been a refusal to give reasons, in fact the letters from the Department of Justice to Mr Ma of 12 October 2007 and 21 November 2007, explain that the reason that a prosecution is not warranted is that it is considered there is insufficient evidence to warrant commencing a criminal prosecution.

33. In any event, the attitude of the DPP to the giving of reasons for a decision to prosecute or not prosecute is well known. It is the general practice of the DPP to refrain from giving reasons for decisions not to institute or continue with criminal proceedings, other than in the most general terms, absent exceptional circumstances.

34. The question as to whether a DPP should be required to give reasons for such a decision was considered by the Court of Appeal of Northern Ireland in Re Boyle [2006] NICA 16, (unreported, 28 April 2006). The court there concluded that there was no obligation on the Northern Ireland DPP to give reasons.

35. I am satisfied that it is not reasonably arguable that the position should be any different in Hong Kong. At paragraph 14 of the judgement in Re Boyle, the court cited the relevant passages from an affidavit filed on behalf of the DPP, explaining the position of the DPP in relation to the giving of reasons. I have no doubt whatsoever that that explanation is equally appropriate in Hong Kong. There is nothing in the argument made before me by Mr Ma to suggest otherwise.” (emphasis supplied)

52.In the more recent decision of Re Lau Hei-wing [2016] 3 HKLRD 652, Li J likewise held that there is no positive duty on the SJ to give reasons: –

“Duty to give reasons

22. Mr Kim argued that the expanded considerations in the Prosecution Code 2015 imposed on the SJ a duty to give reasons.

23. He relied on the judgment of Secretary for Security v Prabakar. In that case, Li CJ pointed out that the high standard of fairness required the Secretary for Security to give reasons if the torture claim was rejected. The reasons needed not be elaborate but must be sufficient for the potential deportee to consider the possibilities of administrative review and judicial review.

24. In my judgment, the position of the Secretary for Security is very different in torture claims. The Secretary decides the rights of a claimant under Part VIIC of the Immigration Ordinance. He is under a duty to act according to a high standard of fairness. That requires him to give reasons for his decision.

25. In deciding the venue of trial, the SJ is exercising a prosecutorial choice which is free from interference by virtue of Article 63 of the Basic Law. There is no positive duty to give reasons. The SJ needs not give reasons as to the weight of individual factors contributing to the choice of venue. In most cases, the circumstances are obvious. In my view, in the majority of cases like the present one, the most important factor is the sentence likely to be imposed on conviction.

26. Where the SJ chooses to give reasons in exceptional circumstances departing from the norm, the adequacy of the reasons must be left to the professional judgment of the SJ. An extended debate as to various contributing factors should always be avoided.” (emphasis supplied)

53.In H v DPP [1994] 2 IR 589, O’Flaherty J of the Irish Supreme Court held as follows at p. 603: –

“ Thus, Blayney J. starts from the premise that the decision of the Minister is open to full judicial review. However, it is clear from the decision in The State (McCormack) v. Curran [1987] I.L.R.M. 225 that the discretion of the Director of Public Prosecutions is reviewable only in certain circumstances as set out by Finlay C.J. at p.237 of the report: -

‘If, of course, it can be demonstrated that he reaches a decision mala fide or influenced by an improper motive or improper policy then his decision would be reviewable by a court.’

It would seem then that as the duty to give reasons stems from a need to facilitate full judicial review, the limited intervention available in the context of the decisions of the Director obviates the necessity to disclose reasons.” (emphasis supplied)

54.This dovetails neatly with the position in Hong Kong: the very limited intervention available to challenge prosecutorial decisions of the SJ obviates the necessity to disclose reasons.

55.Accordingly, Ground 1 must fail.

Ground 2 – Irrationality

56.The applicant claims that the Decision is irrational and perverse.  The following grounds are advanced:

(1) There has been excessive reliance on the evidence filed by Mr Kentish and the 1^st interested party in the winding-up proceedings;

(2) There has been misapplication of the Chan Chi Wan Stephen Judgment by the SJ;

(3) There was a wrong assumption that clause 2.2.7 was intended for a legitimate purpose.

57.The interested parties invited the court to note that none of the aforesaid grounds are set out in the Form 86 filed by the applicant.  They further submit that it is trite that no grounds shall be relied upon or any relief sought at the hearing except the grounds and relief set out in the Form 86 statement.

58.In the end, I decide that I do not have to rule on this, as the respondent was quite prepared to deal with the applicant’s complaints head-on.  Indeed, Mr Hui SC, counsel for the respondent has very fairly confirmed that no prejudice has been caused to the respondent by the applicant not including the allegations in the Form 86, but only in its Skeleton Submissions.

59.The test for irrationality is established in R v Secretary of State for Trade and Industry, ex parte Lonrho [1989] 1 WLR 525.  Lord Keith stated (at 539H to 540B) that: –

“The absence of reasons for a decision where there is no duty to give them cannot of itself provide any support for the suggested irrationality of the decision. The only significance of the absence of reasons is that if all other known facts and circumstances appear to point overwhelmingly in favour of a different decision, the decision-maker, who has given no reasons, cannot complain if the court draws the inference that he had no rational reason for his decision.”

60.As the SJ is under no duty to give reasons for prosecutorial decisions, the applicant’s argument that “the SJ’s failure to provide reasons of the Decision cultivates the inference that it has not been made rationally” simply cannot stand.

61.Further, I agree with the respondent’s submission that the facts and circumstances of this case do not point overwhelmingly in favour of a decision to prosecute.  Detailed explanations are set out in Ms Ng’s Legal Advice and her Affirmation. The careful analysis speaks for itself.

62.As submitted by the respondent: –

(1) in reaching the Decision, Ms Ng has duly considered all evidence available;

(2) Ms Ng has considered the legal opinions rendered by two Senior Counsel for the applicant when reviewing the Decision.  Despite reaching a different conclusion, the Decision is not one that no reasonable prosecutor could have reached; and

(3) there is no mistake in the application of law and facts as alleged or at all.

63.Therefore, there is nothing other than mere speculation to suggest that the Decision is irrational.  As it turns out, the applicant’s speculation at paragraphs 79-84 of the Form 86 that “the SJ may have mistaken the solicited favours not to amount to an advantage when it is clear that the [interested parties] have solicited from the applicant advantages under the POBO” is wholly misconceived.

64.Insofar as the offence of agent soliciting an advantage is concerned, Ms Ng in fact found established that (1) there was a principal/agent relationship between Grande and the interested parties, (2) there was a solicitation by the interested parties and (3) the solicitation of advantage was inducement to the interested parties doing an act in relation to the affairs of Grande or showing favour in relation to the applicant.

65.The key element of offence that Ms Ng found not established on the evidence was the mens rea, namely whether the interested parties intended that the conditions in the draft restructuring agreement should be solicited as an inducement or reward for or otherwise on account of their acting in relation to the principal’s affairs or business. 

66.It is clear that Ms Ng’s analysis was based primarily on the Court of Final Appeal’s decision in Secretary for Justice v Chan Chi-wan Stephen (2017) 20 HKCFAR 98.  I agree the applicant has not been able to demonstrate that Ms Ng had erred in her analysis in any respect, let alone that her analysis and conclusion were plainly wrong or perverse. 

67.Ground 2 has no merit and must be rejected.

Ground 3 – Illegality

68.In making a prosecutorial decision, prosecutors in Hong Kong are guided by the Prosecution Code (2013).  There is no evidential basis for the applicant to suggest that the SJ has failed to act in accordance with the Prosecution Code (2013).

69.As correctly pointed out by the applicant, in reaching a decision to prosecute, the SJ must first be satisfied that there is sufficient evidence to support a reasonable prospect of conviction.  Only where there is sufficient evidence would the issue of public interest then come into consideration.  There being insufficient evidence to start with in this case, any prosecution against the 1^st and 2^nd interested parties would fail in limine.

70.I agree that it can be seen from the Affirmation of Ms Ng and the Affidavit of Ms Ho Wai Man Winnie that both of them have strictly adhered to the Prosecution Code (2013).  Their decision not to prosecute was based purely on evidential considerations.

71.I agree there is no merit in Ground 3, which is rejected accordingly.

G.  CONCLUSION

72.In the premises, the applicant has failed to establish the requisite “truly exceptional” circumstances to warrant/justify the court’s intervention of the SJ’s prosecutorial decision.  To the contrary, the facts and history of this case strongly militate against any basis for challenge of the Decision by way of judicial review.  The matters raised by the applicant would not cause the court to find that the prosecutorial decision was “unconstitutional”.  The application should be dismissed on this basis alone. 

73.Further, for the reasons set out above, none of the 3 grounds raised by the applicant for judicial review of the Decision has been successfully made out.

74.Accordingly, the applicant’s application for judicial review is dismissed.

75.I see no reason why costs should not follow the event.  I order that the costs of these proceedings be paid by the applicant to the respondent and the 1^st and 2^nd interested parties, such costs are to be taxed if not agreed.

76.The above order as to costs is nisi and shall become absolute in the absence of any application within 21 days to vary the same.

77.Lastly, I express my gratitude to counsel for their helpful assistance in this matter.

Mr Lawrence Lok, SC leading Ms Mavis Lam, instructed by Messrs K & L Gates, for the applicant

Mr Martin Hui, SC and Mr Ira Lui, ADPP, instructed by the Department of Justice, for the respondent

Mr Victor Dawes, SC leading Mr Peter Dong, instructed by Messrs Lipman Karas, for the 1^st and 2^nd interested parties