Kot See for v. Lam Man Cheung and Another
Read the full judgment text of CACV 536/2019 on BabelCite. This Court of Appeal judgment was delivered on 18 March 2021.
1. In this appeal, the 2 nd Defendant sought to overturn parts of an order made by Deputy High Court Judge M K Liu (“the Judge”) on 3 May 2019. The relevant parts of the order were paragraphs 2 to 4 which were in the following terms:
Cited by 2 cases · Cites 14 cases
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CACV 536/2019 [2021] HKCA 348 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO 536 OF 2019 (ON APPEAL FROM HCA 743/2019) _______________________________
_______________________________ Before: Hon Lam VP and Barma JA in Court Date of Hearing: 4 February 2021 Date of Judgment: 18 March 2021 ________________________ JUDGMENT ________________________ Hon Lam VP (giving the Judgment of the Court): 1.In this appeal, the 2nd Defendant sought to overturn parts of an order made by Deputy High Court Judge M K Liu (“the Judge”) on 3 May 2019. The relevant parts of the order were paragraphs 2 to 4 which were in the following terms:
2.These paragraphs provided for disclosure of information concerning and the delivery up of several pieces of antiques which are parts of a collection of Chinese porcelain antique collection called the Tianminlou Collection and the subject matters in respect of which the Plaintiff seeks, amongst other things, proprietary relief in the Writ and the Amended Statement of Claim. 3.The Plaintiff’s (Kot’s) claim was summarized by the Judge at [16] of the judgment of 24 July 2019 as follows:
4.The 2nd Defendant is Tang and his summons of 14 May 2019 to discharge the order was dismissed by the Judge on 24 July 2019. Leave to appeal was initially refused by the Judge. On 21 November 2019, this Court granted leave to appeal and a stay of execution of paragraphs 2 to 4 of the order pending appeal. 5.In this appeal, Mr Ho SC (appearing together with Mr Chan for the 2nd Defendant)’s main ground of appeal is that in making such order the Judge failed to give proper effect to the privilege against incrimination (“PSI”) which protected the 2nd Defendant from being compelled to give evidence that would incriminate himself. Counsel said this is a fundamental right under the Basic Law and the Judge erred in his approach in holding that it was a matter of balance and the concern of the 2nd Defendant could be taken care of by the Plaintiff’s undertaking that he (including his nominees, agents or servants or any of them) would not divulge any information disclosed by the 2nd Defendant in compliance with the Injunction to the police or the Department of Justice or any law enforcement agency. 6.In the Notice of Appeal, the following matters were highlighted as matters showing that the 2nd Defendant faces a real and appreciable risk of prosecution if he complied with the order:
Risk of prosecution 7.The offences for which Mr Ho said the 2nd Defendant faces a real and appreciable risk of prosecution are the common law offence of conspiracy with the 1st Defendant to defraud and the offence of knowingly dealing with property known or believed to represent proceeds of an indictable offence contrary to section 25 of the Organized and Serious Crimes Ordinance (“OSCO”) Cap 455. These are offences pleaded in the Amended Statement of Claim of the Plaintiff. 8.Section 25(1) of the OSCO sets out the primary elements of the offence and it reads:
9.The meaning of proceeds of an offence is set out in Section 2(6)(a) of the OSCO:
10.In our view, it is doubtful if the subject antiques can be regarded as proceeds of an offence. There is nothing before us suggesting that there is a real and appreciable risk that such contention is tenable. It appears to us the taking of the antiques by the 2nd Defendant was, according to the Plaintiff’s allegations, part of the perpetuation of fraud instead of the dealing with the proceeds of an offence already committed. 11.In any event, on the facts as alleged, it is plain that the more appropriate and straightforward charges would be fraud under Section 16A or obtaining property by deception under Section 17 of the Theft Ordinance, Cap 210. These sections provide:
12.It is noteworthy that Section 16A is a provision introduced in Hong Kong by an amendment to our Theft Ordinance in 1999 after the publication of a Report on Creation of a Substantive Offence of Fraud by the Law Reform Commission in July 1996. There is no equivalent in the English Theft Act 1968. Instead, there is a new Fraud Act 2006 where there is a statutory provision abrogating PSI under Section 13. 13.In Hong Kong, with the addition of Section 16A to our Theft Ordinance, the scope of Section 33(1) of the Theft Ordinance (as discussed below) has been expanded insofar as it also covers PSI claim for the offence of fraud under Section 16A. This is significant for present purposes because though the common law offence of conspiracy to defraud remains in our criminal law, there is indeed substantial overlap in the offence of conspiracy and the statutory offence of fraud in situations where there is more than one fraudster participating in the fraudulent scheme. 14.Coming back to Section 25 of OSCO, there is actually no evidence to suggest that the offence under OSCO was being considered by the police. At the police interview of 2 January 2019, the police officer only cautioned the 2nd Defendant for the offence of “conspiracy to obtain property by deception” and it appeared that he was arrested accordingly. 15.We agree with the submission of Mr Yuen SC (appearing together with Ms Mak for the Plaintiff) that the fact that the Plaintiff’s pleading referred to the offence under Section 25 of OSCO to support an averment on the unlawful nature of the act is not evidence of risk of such prosecution. 16.We further agree with Mr Yuen that the way in which the Plaintiff pleaded the conspiracy claim in the Amended Statement of Claim could not preclude this Court from analysing the applicability of Section 33 on the facts of the present case. The formulation of a civil cause of action is not the same exercise in the preferment of a criminal charge on the same setl of fact. Obtaining property by deception is not a civil cause of action. On the other hand, it is plain to us that fraud has been pleaded against both the 1st and 2nd Defendants. Whilst it is true that a plea of conspiracy is also advanced, the Plaintiff’s case is that the fraud had actually been perpetuated. The cause of action of fraudulent misrepresentation was pleaded under Section D2 of the Amended Statement of Claim against both the 1st and 2nd Defendants. 17.On the materials before us, we are of the view that the risk of the 2nd Defendant facing a criminal prosecution under Section 25 of OSCO is fanciful, contrived and remote. 18.Given the factual matrix in the case, it is plain to us that if the Plaintiff’s factual allegations were established, the obvious options are offences of fraud under Section 16A of the Theft Ordinance, obtaining property by deception under Section 17 of the Theft Ordinance and the common law offence of conspiracy to defraud. 19.Contrary to the submissions of Mr Yuen, on the materials before us it is not possible to say that a charge of conspiracy to defraud is fanciful or contrived. As Mr Ho demonstrated at the hearing before us, on the facts of this case the Plaintiff’s claim and likewise a prosecution against the 2nd Defendant depend on the establishment of the conspiracy between him and the 1st Defendant in the perpetuation of the fraudulent scheme as pleaded. 20.The main difference between a conspiracy charge and charges for the substantive offences under the Theft Ordinance is that in respect of the former the crucial element is the agreement (or conspiracy) between the defendants whilst in the latter the actus reus consisted of the substantive deceptive conduct on the parts of the defendants which caused the loss suffered by the victim. In a case where the defendants are acting in concert in a fraudulent scheme (as alleged by the Plaintiff here), in many instances it is also possible for the same set of facts to support a charge of conspiracy as well. 21.In the present context, the mere advancement of the loans by the 2nd Defendant and the taking of the subject antiques as collateral cannot establish the offences under either Section 16A or Section 17. The prosecution would have to prove further that the 2nd Defendant acted in concert with the 1st Defendant before deception or fraud can be established by showing that the loan transactions were the means to facilitate the 2nd Defendant to obtain the subject antiques at gross undervalue as part of the overall fraudulent scheme which entailed that the Plaintiff (by reason of the lack of return from the fictitious London investment) would not be in a position to redeem the same. There are therefore substantial overlaps on the facts of the present case between the conspiracy charge and the substantive charges under Sections 16A and 17. 22.On the facts as alleged by the Plaintiff, it is quite obvious that the conspiracy had been carried into effect and the fraud had been perpetuated. In other words, the actus reus of the substantive offences under Sections 16A and 17 had been committed. 23.In Pacific Harbor Advisors Pte Ltd v Winson Federal Ltd HCA 1257/ 2013, 29 January 2016 Deputy High Court Judge Le Pichon referred at [49] to the general rule that where there is an effective and sufficient charge of a substantive offence a charge of conspiracy is undesirable, citing Archbold Hong Kong 2016 paragraph 36-57 which in turn cited Verrier v DPP [1967] 2 AC 195. Her Ladyship applied that principle in that case and held that given that charges of the substantive offences of theft and false accounting were the obvious charges an additional charge of conspiracy was remote and fanciful. 24.When application for leave to appeal was made to the Court of Appeal in that case in HCMP 532/2016, 10 May 2016, at [11] this Court preferred to rest our decision regarding the charge of conspiracy on the basis of the principle in Khan v Khan [1982] 1 WLR 513 which we shall discuss below. 25.The general approach discussed in Verrier v DPP, supra, remains good law today: see Archbold Hong Kong 2021 paragraph 36-54. However, as it is made clear in Archbold, it is not a rigid rule and each case must be considered on its own facts. There are indeed exceptions. 26.In the present case, Mr Ho submitted the exception set out in paragraph (2)(a) of paragraph 36-57 is applicable. In particular, it is more appropriate to have an indictment charging conspiracy which would simplify issues, shun complexity and avoid multiplicity of counts and presenting the case in a manner which may more accurately reflect the overall criminality. 27.Whilst the preferment of criminal charges must be a matter for the prosecuting authority, we can see the force of this submission on the facts as presently set out before us. In light of the centrality of the conspiracy between the 1st and the 2nd Defendants in the factual allegations raised by the Plaintiff in the present case, Mr Yuen failed to persuade us that the risk of the 2nd Defendant being charged with conspiracy is fanciful. 28.At the same time, we do not find any basis for suggesting that only a charge of conspiracy would be considered or proceeded upon by the prosecution if there is sufficient evidence to substantiate the facts as alleged by the Plaintiff. Mr Ho realistically accepted that the substantive charges under Sections 16A and 17 of the Theft Ordinance cannot be ruled out. 29.We are of the view that there is at least an equal risk that the 2nd Defendant may face a prosecution for the substantive offences and prosecution for conspiracy. We shall proceed on this basis in the following analysis. 30.We also reject Mr Yuen’s submission that compliance with the order would not generate any risk of incrimination against the 2nd Defendant. By way of example, Mr Ho postulated that if the 2nd Defendant were to answer the interrogatories by stating that possession of the subject antiques were passed to the 1st Defendant or that they were stored in a warehouse controlled by the 1st Defendant, such answers would reinforce the case of conspiracy or acting in concert between the two defendants. Section 33(1) of the Theft Ordinance 31.Section 33(1) of the Theft Ordinance abrogates PSI in civil proceedings for recovery of property with safeguards to protect a defendant from the use of incriminating materials provided by him under compulsion in subsequent criminal proceedings:
32.Though conspiracy to defraud is a common law offence, the English Court of Appeal held in Khan v Khan [1982] 1 WLR 513 that the court should have regard to the substance of the criminal proceedings and the real reasons for requiring the defendant to make the statements in determining whether the protection under the equivalent of our Section 33(1) should be uplifted by reason of inclusion of an alternative or additional charge to a charge under the Theft Act. Stephenson LJ said at p.519 E to H:
33.The approach was further explained by Morritt LJ in Renworth Ltd v Stephansen [1996] 3 All ER 244 at p.254:
34.Locally, though Khan v Khan, supra, was distinguished by Sakhrani J in Pheby v Paier [2003] 2 HKLRD 323, the judgment of Renworth Ltd v Stephansen, supra, had not been cited to the learned judge. Likewise, in International Management Group v Lun Sheung Mei Serina [2006] 2 HKC 463, Recorder E Chan SC held that section 33 could not cover potential charges for conspiracy and forgeries. Neither Khan v Khan nor Renworth Ltd v Stephansen was cited. 35.Subsequently, in Pacific Harbor Advisors Pte Ltd v Winson Federal Ltd HCMP 532/2016, 10 May 2016, this Court adopted the approach in the English authorities and held that in a case where offences under the Theft Ordinance are the obvious charges to be laid, the additional charge of conspiracy to defraud would not render the protection under Section 33 inapplicable. 36.In our judgment, as a matter of Hong Kong law, Pheby v Paier and International Management Group v Lun Sheung Mei Serina should be read subject to the approach adopted in Pacific Harbor Advisors Pte Ltd v Winson Federal Ltd in this respect. 37.We are of the view that it is necessary to adopt a purposive interpretation of Section 33 and Morritt LJ’s approach reflects the proper construction of the section. Whilst we are mindful of the principle of legality[1] (which is applicable since PSI is a fundamental but not absolute right), such principle does not preclude the court from holding that a statutory provision has abrogated common law PSI by necessary implication: see A v Commissioner of ICAC (2012) 15 HKCFAR 362; Beghal v Director of Public Prosecution [2016] AC 88. 38.Before we discuss how purposive interpretation of Section 33 leads to an approach similar to the one adopted by Morritt LJ, it is useful to remind ourselves of the recent observations of Lord Hughes JSC (with whom Lord Neuberger PSC, Lord Hodge JSC and Lord Dyson MR agreed) in Beghal v Director of Public Prosecution, supra at [61] on statutory abrogation of PSI:
His Lordship continued with a citation of the often-quoted dicta of Lord Hoffmann in R v Secretary of State for the Home Department, Ex p Simms [2000] 2 AC 115 at p.131. For present purposes, it suffices for us to quote part of it:
39.In the context of Section 33(1) of the Theft Ordinance, there is no doubt that the legislature enacted this provision to abrogate PSI under the common law and confer limited statutory protection on a defendant by precluding the use of incriminating statements, obtained under a court order in civil proceedings, in future criminal prosecution of the same defendant. The only issue in the present appeal is the scope of its operation: whether Section 33(1) also impliedly abrogated PSI arising from a conspiracy charge arising from substantially the same facts as a charge under Section 16A or 17. 40.In Beghal v Director of Public Prosecution, supra, the Supreme Court addressed a challenge to the power of detention and interrogation under section 53(1) of and Schedule 7 to the Terrorism Act 2000. One of the grounds of challenge was that such power was incompatible with the right to a fair trial under article 6 of the European Convention for the Protection of Human Rights which encompasses some of the rights under PSI in common law[2]. The prior question was whether the statutory provisions in question (which did not expressly abrogate PSI of the person subject to questioning) had the effect of abrogating PSI under the common law. This issue was addressed by Lord Hughes at [59] to [64]. 41.After referring at [63] to instances where statutes were held to have impliedly abrogated PSI because the transparent purpose of such provisions would be stultified if a person required to give the requisite information could refuse to answer by claiming privilege, Lord Hughes applied the same test at [64] to the provisions in the Terrorism Act 2000 in the following manner:
42.Thus, the court should apply a purposive construction of the statutory provision in question and ask itself whether the availability of PSI would nullify the statutory objective. If the answer is affirmative, PSI for conspiracy charge in a case where charges under Sections 16A or 17 can be preferred is abrogated by necessary implication. We shall come back to the judgment of Lord Hughes later when we discuss the risk of answers given under compulsion being used directly for criminal prosecution. 43.A similar approach was adopted by our Court of Final Appeal in A v Commissioner of ICAC, supra at [31] to [32] and [71] to [74] in respect of Section 14 of the Prevention of Bribery Ordinance Cap 201. Ribeiro PJ summed up the relevant test at [71]:
44.Coming back to Section 33(1), there is no doubt that the legislative objective is to abrogate PSI under common law to facilitate a plaintiff to obtain the necessary information in his effort to recover his property or to obtain an account of his property whilst at the same time ensuring that the information so disclosed would not be used as evidence against the person giving such information in subsequent criminal proceedings. 45.It is perhaps worth emphasising that there are two fundamental rights being engaged[3]. First, the right of silence (or right against self-incrimination) under common law which, as Lord Mustill helpfully discussed in R v Director of Serious Fraud Offices, ex p Smith [1993] AC 1 at 30, is actually a disparate group of immunities which differ in nature, origin, incidence and importance. Six different class of immunities were identified, some general and some specific. As held in Pacific Harbor Advisors Pte Ltd v Winson Federal Ltd [2016] 6 HKC 14, for present purposes, we should focus on item (2) in that list, viz a general immunity from being compelled on pain of punishment to answer questions the answers to which may incriminate them. 46.But there is another side of the coin. There is another class of fundamental right which is also engaged: the right of access to court by a plaintiff seeking remedies by civil proceedings for wrong done to him. This right is also an entrenched right protected under Article 35 of the Basic Law, see the discussion at [82] to [86] of YBL v LWC [2017] 1 HKLRD 823. Associated with it is also the right to lawful protection of one’s private property under Articles 6 and 105, see Hysan Development Co Ltd v Town Planning Board (2016) 19 HKCFAR 372 at [29] to [35]. Take the present case as an illustration, if the 2nd Defendant can rely on PSI to refuse to provide the information required under the disclosure order, the Plaintiff’s efforts to obtain timely and effective remedy from the court for the preservation of the subject antiques could be frustrated. 47.This second class of fundamental right was plainly the one the legislature had regard to when Section 33 was enacted to redress the balance which the common law previously had tilted in favour of PSI. In Rank Film Ltd v Video Information Centre [1982] AC 380 at p.409, Lord Denning MR referred to paragraphs 200-205 of the Eighth Report of the Criminal Law Revision Committee on Theft and Related Offence (1966) (Cmnd. 2977) in discussing the policy underlying Section 31 of the Theft Act 1968, on which our Section 33 modelled. His Lordship then explained the policy consideration by reference to the scenario where a property owner brought a civil action to recover property which he had been deprived of and sought to interrogate the defendant how the property came to be taken and what had become of it:
48.Section 31 of the Theft Act 1968 was not the first statutory attempt to abrogate common law PSI in respect of property offences. Previously, there were statutory provisions covering specified offences under various statutory provisions (discussed at paragraph 201 of the Eighth Report). Section 31 was a step in broadening the scope of abrogation to cover all offences under the Theft Act. Such change was deemed necessary because the limitation of the abrogation to particular offences was unsatisfactory as the prosecution could charge some offence to which the rules did not apply, see paragraph 202 of the Eighth Report, where the following conclusion was expressed:
49.At paragraph 200, which was also quoted by Lord Denning, the Criminal Law Revision Committee[4] highlighted the underlying policy as follows:
50.There was no discussion in the Eighth Report on conspiracy to defraud. It is perhaps not that surprising given that the report was published in 1966, when the scope of the offence of conspiracy to defraud had yet to be elucidated by the judgment of the House of Lords in R v Scott [1975] AC 819[5] and the general approach on undesirability of charging conspiracy when a charge of substantive offence could be advanced (as discussed in R v Dawson [1960] 1 WLR 163 and reiterated in Verrier v DPP, supra) had therefore carried a greater impact. Thus, in cases where property had to be recovered, the substantive office had been committed. Against such background, the legislature adopted references to “an offence under this Act” describing the scope of abrogation of common law PSI and subsequent protection in Section 31 of the Theft Act[6]. 51.In Rank Film, Lord Denning also held that Section 31 should apply by analogy to a charge of conspiracy to defraud, see p.409G to 410D. However, because the subject matter in that case was copyright which other members of the Court of Appeal[7] and the House of Lords[8] did not regard as coming within the definition of “property” under the Theft Act, Lord Denning’s minority view did not prevail. 52.Subsequently, in Istel Ltd v Tully [1993] AC 45, Lord Templeman discussed the rationale behind various statutory provisions (including Section 31 of the Theft Act) abrogating PSI for the purpose of civil proceedings at p.53B to 55G. The observation at p.55F summed up the position:
53.Stephenson LJ obviously had in mind the statutory objective of Section 31 when in Khan v Khan, supra, he refused to frustrate the assistance given by Section 31 to persons seeking to recover their property by the bare possibility of an alternative charge of a non-Theft Act offence being introduced into the criminal proceedings. 54.Likewise, Morritt LJ in Renworth Ltd v Stephansen, supra, rejected the extreme position that a person might refuse to answer questions which would expose him to the risk of proceedings for the Theft Act offence, on the ground that his answer might expose him to proceedings for another offence, however unlikely it may be that he would ever be charged with that second offence alone. 55.For reasons we have already canvassed in discussing the substantial overlap between a charge of conspiracy to defraud with a charge under Sections 16A or 17 of the Theft Ordinance in many cases where more than one defendant is alleged to be involved in a fraudulent scheme, taking such extreme position would largely nullify the effect of Section 33(1) and frustrate the statutory objective underlying the same in those cases. 56.Section 33(1) refers to two different focal points in its operation. The first focal point is the civil court where a plaintiff seeks to recover (or obtain an account of) his property or money of which he has been deprived by act(s) which can constitute offence(s) under the Theft Ordinance. As explained by Morritt LJ, those acts could also constitute other offences under other statutes or common law. Ex hypothesi the property or money has already been taken and the substantive offence(s) have been committed. Thus, reference is made naturally to the substantive offences under the Ordinance though in the course of events leading to the perpetration of such substantive offences the inchoate offence of conspiracy would also have been committed. 57.The statutory objective at this point is to facilitate a plaintiff in the recovery of his property in civil proceedings by removing the obstacle previously imposed by the common law rule on PSI. The statutory solution is the abrogation of PSI for the purposes of such civil proceedings. 58.The second focal point is the criminal trial of a defendant who has previously been compelled by a civil court to make some incriminating statements. Section 33(1) provides that in such trial the criminal court should not admit such incriminating statements as evidence against that defendant. Thus, even though the common law PSI is abrogated, statutory protection is put in place to safeguard the right against self-incrimination under article 11(2)(g) and the right to fair trial under article 10 of the Hong Kong Bill of Rights. 59.When a civil court considers the issue arising from Section 33(1), it usually occurs at a very early stage of proceedings and there is not much information concerning the likely charge (if any) that the prosecuting authority would actually prefer against the defendant. Take the present case as an example, though the 2nd Defendant had been cautioned and interviewed by the police, up to the time when the appeal is heard we do not have further information on the likelihood of the 2nd Defendant actually being charged and, if so, charged with which offence. 60.Hence, in many instances (as in the present case), the civil court cannot rule out the conspiracy charge as fanciful and contrived whilst at the same time the substantive charges under Sections 16A and 17 appear to be at least equally apt. 61.Though a civil court cannot bind a criminal court on the admission of evidence in a criminal trial (a topic to which we shall return later), in order to give effect to Section 33(1), it is obliged to undertake an assessment on the future risk of self-incrimination the defendant would be subject to in determining whether the claim of PSI provides a valid ground for refusing to make an order for interrogatory or discovery. It is inherent in such assessment that the civil court should consider whether the interest of a defendant is sufficiently protected by the safeguard in Section 33(1). It is in this context we consider if the approach of Morritt LJ represents the law in Hong Kong. 62.In our judgment, in a case like the present one where the likelihood of a charge of conspiracy to defraud cannot be said to be overwhelmingly higher than a charge of substantive offences under the Theft Ordinance and the factual matrix supporting these charges were substantially the same, the court should adopt the approach of Morritt LJ in assessing the risk of a defendant being exposed to self-incrimination without the protection of Section 33(1). In other words, if the underlying facts and evidence were the same for both the conspiracy charge and the charges under the substantive offences in the Theft Ordinance, the court should proceed on the basis that the additional charge of conspiracy to defraud would not render the abrogation and protection under Section 33 inapplicable. Otherwise, the statutory objective of Section 33 would be substantially curtailed. 63.Examining Section 33(1) by way of purposive construction, we should consider if the statutory provision unmistakably by necessary implication abrogates the 2nd Defendant’s PSI in respect of a charge of conspiracy when substantive charges under Sections 16A or 17 are equally likely to be brought. We would answer in the affirmative because any other approach would substantially deprive Section 33(1) of its effect and frustrate the statutory objective. Likewise, in such circumstances, the statutory protection under the latter part of the sub-section should also be extended to the charge of conspiracy if it were to be brought. 64.Though the view of Lord Denning that the statutory provision applied by analogy to the charge of conspiracy was rejected in Rank Film, we do not believe such rejection precludes us from adopting the more nuanced approach of Morritt LJ. As we have said, the rejection by the judges in Rank Film was on the ground that property does not include copyright. Therefore, there was no substantive offence under the Theft Act to trigger the operation of Section 31 of that Act. There was no consideration of the issue from the perspective of implied statutory abrogation in a situation like the one we are considering. 65.Applying the approach of Morritt LJ (which we respectfully endorse as the correct one to be applied in the context of Section 33 of the Theft Ordinance in Hong Kong), on the facts of the present case (as discussed above) the risk of prosecution for conspiracy to defraud could not be separate and distinct from the risk of prosecution in connection with the offences under Sections 16A and 17 of the Theft Ordinance. In light of that conclusion, the protection under Section 33 should also be available to the 2nd Defendant in respect of the charge of conspiracy even though it would not be laid under the Theft Ordinance. Sufficient safeguards 66.Mr Ho submitted that the Section 33 protection against the use of answers in a criminal trial would not be adequate as it would not preclude derivative use. PSI protects a defendant not only against use of statements for criminal prosecution, but also the risk of prosecuting authority making indirect use of the information from the defendant to obtain independent evidence for direct use in the criminal trial. 67.In our judgment, there is nothing to suggest that the Plaintiff would act in breach of the implied undertaking that information obtained through discovery would only be used for the purpose of this action. Mr Yuen intimated to the court that the Plaintiff is willing to give an express undertaking to that effect. Thus, even though the Plaintiff had previously made a report to the police, we cannot see any basis for there being a real or appreciable risk that the answers provided by the 2nd Defendant pursuant to the order would be passed onto the police. 68.Mr Ho also suggested that the police might obtain a court order or search warrant to compel the Plaintiff to disclose such information. Counsel placed great reliance on the judgment of Hobhouse LJ in the unreported decision of Johnstone v United Norwest Co-operatives Ltd [1994] 11 February 1994, Lexis Citation 2846. For the reasons we shall further elaborate below, the legal position has developed since then with higher regard being placed on the relevant human rights consideration. Thus, in Secretary for Justice v Florence Tsang Chiu Wing [2014] 6 HKC 285 at [23], the Court of Final Appeal held that the court will not release or modify the implied undertaking given on discovery save in special circumstances and where the release or modification will not occasion injustice to the person giving discovery. We find the likelihood of a court granting such order or search warrant to the police in disregard of the 2nd Defendant’s fundamental right against self-incrimination to be fanciful. 69.Hence, there is no foundation for the suggestion that there would be derivative use by the police. 70.Moreover, it is doubtful if PSI can be relied upon to protect against derivative use. As held by Ribeiro PJ in HKSAR v Lee Ming Tee (2001) 4 HKCFAR 133 at p.177:
71.We are therefore not persuaded by Mr Ho that the exclusion of statements given by the 2nd Defendant pursuant to the order from being admitted as evidence in a criminal trial under Section 33 would not be an adequate protection. 72.Mr Ho also relied on several authorities and submitted that short of an undertaking from the prosecuting authority the court would not accept other form of safeguard (apart from a statutory abrogation and protection) as adequate: AT &T Istel Ltd v Tully [1993] AC 45; Manufacturer’s Life Insurance Co of Canada v Harvest Hero International Ltd [2002] 1 HKLRD 838. 73.As regards the exclusion in a criminal trial of evidence obtained under compulsion, Mr Ho submitted that such discretionary protection is too uncertain and nebulous to be considered as an adequate protection. He also submitted that in principle a civil court should not be engaged in a proportionality analysis involving a balancing exercise between the severity of the nature of compulsion and the pressing social purpose of a particular criminal offence at an early stage. 74.These questions only arise if Section 33 does not afford statutory protection to the 2nd Defendant. Whilst we have held that Section 33 is applicable in the present circumstances, we can also observe that the law has moved forward in these respects and there is now greater certainty on how the power to admit evidence in a criminal trial would be exercised in cases where answers were compulsorily obtained as a result of PSI being abrogated for other purposes. AT &T Istel Ltd v Tully, supra and Johnstone v United Norwest Co-operatives Ltd, supra were decided before Saunders v United Kingdom (1996) 23 EHRR 313 in which the European Court of Human Rights examined the admission of compulsorily obtained evidence in a criminal trial from the angle of the right to fair trial and presumption of innocence under article 6 of the European Convention. 75.With such development, the UK Supreme Court acknowledged in Beghal v Director of Public Prosecutions, supra, at [66] and [67] that it is now possible for the civil court to have regard to the inevitable outcome in the exclusion of compulsorily obtained evidence in the assessment of risk of self-incrimination. Lord Hughes JSC said at [66]:
76.Thus, self-incriminating evidence obtained under compulsion should be excluded by the criminal court: see also R v K (A) [2010] QB 343. 77.Though these English cases were decided under the section 78 of the Police and Criminal Evidence Act 1984, similar power to exclude evidence existed under the common law in Hong Kong. As held by the Court of Final Appeal in HKSAR v Muhammad Riaz Khan (2012) 15 HKCFAR 232 at [20], the court should consider the following before admitting evidence obtained in breach of a defendant’s constitutional rights with a view to strike a proper balance between the interests of individual defendant and those of the society as a whole:
78.In respect of the direct use of a self-incriminating statement obtained under compulsion, in light of the implication of the use of such evidence on the right to a fair trial as discussed by the Court of Final Appeal in Koon Wing Yee v Insider Dealing Tribunal (2008) 11 HKCFAR 170, it is difficult to see how the balance could be struck in favour of the admission of such evidence. Nor can we see how such direct use could be reconcilable with PSI as protected under art 11(1) of the Hong Kong Bill of Rights. As submitted by Mr Yuen, such use would be a disproportionate response to the social need for the prosecution of the criminal offence. 79.We do not read the judgment of the Court of Appeal in Manufacturer’s Life Insurance Co of Canada v Harvest Hero International Ltd, supra, as precluding us from giving effect to our above analysis. In that case, the plaintiff actually succeeded in the appeal and the order for discovery was made. Though Rogers V-P identified two possible safeguards for the protection of the right against self-incrimination (one of them being an assurance by the Secretary for Justice), His Lordship did not hold that these were the only possible means to achieve the objective. No argument on safeguard based on the court’s control over the admission of evidence in a criminal trial had been advanced in that case. 80.The same observation can be made regarding the decision in Hui Chi Ming v Koon Wing Yee HCA 1479/2009, 25 September 2009. 81.We are of the view that notwithstanding the lack of assurance from the Department of Justice (which is understandable in light of the fact that the criminal investigation is at an early stage), sufficient safeguards are in place to protect the 2nd Defendant from the use of his answers given under compulsion of the order in a subsequent criminal prosecution (if any) against him. Disposition 82.For the above reasons, we uphold the decision of the judge and dismiss the appeal. We also order the 2nd Defendant to pay the costs of the Plaintiff in this appeal, such costs are to be taxed if not agreed.
Mr Rimsky Yuen SC and Ms Esther Mak, instructed by Mayer Brown, for the plaintiff Mr Ambrose Ho SC and Mr Jeff Chan, instructed by Li & Lai, for the 2nd defendant [1] See R v Secretary of State for the Home Department, Ex p Simms [2000] 2 AC 115 per Lord Hoffmann at p.131; A v Commissioner of ICAC (2012) 15 HKCFAR 362 at [24] to [29] and [67] to [71]. [2] For the difference in scope of PSI under common law and the entrenched rights under articles 10 and 11 of the Hong Kong Bill of Rights, see A v Commissioner of ICAC (2012) 15 HKCFAR 362 at [109] to [113]. [3] As Lord Lowry highlighted at the beginning of his judgment in Istel Ltd v Tully [1993] AC 45 at p.64C, “… this appeal exemplifies the conflict between two principles, one that no one ought to be compelled to incriminate himself and the other that justice should be done between the parties to an action.” [4] The Committee was chaired by Sellers LJ and there were several judges including Winn LJ, Edmund Davies J and Lawton J in its membership. [5] In Scott the House of Lords confirmed that for the purpose of establishing the offence of conspiracy to defraud the intention needs not be an intention to deceive as an intention to defraud has a wider meaning, see the discussion by Sir Anthony Mason NPJ in Mo Yuk Ping v HKSAR (2007) 10 HKCFAR 386 at [28] to [33]. [6] This is in contrast with the more comprehensive references to “related offence” in a similar provision in Section 13 of the Fraud Act 2006, specifically defined under Section 13(4) as including conspiracy to defraud. [7] See Bridge LJ at p.415C to E; Templeman LJ at p.421B to C and 425B to C. [8] Lord Wilberforce at p.443A; Lord Fraser at p.445F. [9] See also the discussion at Section D(ix) at p.163 to 170 on the absence of a free-standing derivative use immunity at common law. |
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