Li Tim Kam v. The Commissioner of Customs and Excise and Another

HCAL 52/2021

[2021] HKCFI 2965

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 52 OF 2021

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Before: Hon Chow JA (sitting as an additional judge of the Court of First Instance) in Court

Date of Hearing: 9 July 2021

Date of Judgment: 8 October 2021

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JUDGMENT

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INTRODUCTION

1.This is an application for judicial review of the following decisions, or alleged decisions:

(1)  the decision of the Commissioner of Customs and Excise (“the Commissioner”) contained in a letter to the Applicant’s solicitors, Huen & Partners, dated 27 February 2018 to forthwith forfeit certain electronic products (“the Goods”) seized by the Commissioner on 22 January 2018 (“the 1^st Decision”);

(2)  the decision of the Chief Executive contained in a letter from the Security Bureau to Huen & Partners dated 7 January 2019 rejecting the Applicant’s petition dated 2 May 2018 for the return of the Goods (“the 2^nd Decision”); and

(3)  the decision of the Commissioner contained in a letter to Huen & Partners dated 14 October 2020 refusing to exercise his discretion to allow the Goods to be dealt with in an upcoming forfeiture hearing (“the 3^rd Decision”).

2.In this judgment, unless the context indicates otherwise, references to “Section” or “s” shall be to the Import and Export Ordinance, Cap 60 (“the Ordinance.”)

BASIC FACTS

(i)     The forfeiture of the Goods

3.The Applicant is a Hong Kong permanent resident, and carries on a trading business.  According to the Applicant, in January 2018, he purchased the Goods from a wholesaler for the purpose of resale to two customers in Hong Kong and mainland China respectively. He hired Mr. So Hoi Po (“S1”), who operated a warehouse in Tsuen Wan, to help him store the Goods pending delivery to the purchasers after the Chinese New Year.  However, due to the fact that S1’s warehouse was fully committed at that time, it was agreed that the Goods would be stored in two vessels (“the Vessels”) owned by S1 and his relative (Mr So Ya Kau, “S2”)).

4.On 22 January 2018, while the Vessels were allegedly operating in the eastern waters of Hong Kong, they were intercepted by Marine Police in the course of a joint operation between the Police and the Customs and Excise Department (“C&ED”).  The Goods were at that time found to be stored in the secret compartments under the fuel tanks of the Vessels, and were seized by Customs officers in the presence of S1 and S2 as unmanifested cargoes under the Ordinance.

5.On 23 January 2018, two sets of Customs Form CED 69, Nos PMC-18-000023 and PMC-18-000024, entitled “Receipt for Article/Good/Thing/Vehicle/Ship Seized or Detained” (“the Form CED 69s”), in respect of the Goods were issued to S2 and S1 respectively.  In each Form CED 69, it was stated that the relevant items were seized on “22/01/2018”.  Each Form CED 69 contained the following “Notice to Owner/Claimant” -

“…

Any person claiming the seized article / goods / thing / vehicle / vessel / ship under the Import and Export Ordinance / Dutiable Commodities Ordinance / Copyright Ordinance may, within 30 days beginning on the date of seizure, give notice in writing to the Commissioner of Customs and Excise claiming that the seized article / goods / thing / vehicle / vessel / ship is/are not liable to forfeiture and of his full name and address for service of a summons in Hong Kong.  If no notice of claim has been given to the Commissioner of Customs and Excise within the stipulated period of time, the seized article / goods / thing / vehicle / vessel / ship shall be forfeited to the Government.”

6.By written acknowledgements dated 23 January 2018, S1 and S2 acknowledged that they received, inter alia, the Form CED 69s on 23 January 2018.

7.Also on 23 January 2018, S1 told the Applicant that he had 30 days to give notice of claim in respect of the Goods.

8.On 12 February 2018, the Commissioner posted 2 notices of seizure (“the Voluntary Notices of Seizure”) of the Vessels and some related equipment and miscellaneous items (excluding the Goods) on a departmental notice board at the C&ED Headquarters.  Pausing here, it may be noted that it is the Commissioner’s case that he did not give any notice of seizure of the Goods, as he was under no duty to do so under s 27(3A).  I shall come back to this matter later in this judgment.

9.By a letter dated 21 January 2018, Huen & Partners on behalf of S1 and S2 gave notice to the Commissioner that they intended to claim the Vessels and Goods.  By another letter dated 21 January 2018, Huen & Partners informed the Commissioner that they also acted for the Applicant (in addition to S1 and S2), the Applicant was the owner of the Goods while S1 and S2 were the owners of the Vessels seized on 22 January 2018, and gave notice that their clients intended to claim the Vessels and the Goods.

10.On 27 February 2018, the Commissioner wrote to Huen & Partners stating that the claim for the Vessels was under consideration, but the claim for the Goods was out of time and they had been forfeited to the Government by the operation of s 27(6).  The Commissioner’s letter stated (inter alia) as follows:

“Regarding your claim for the seized articles, pursuant to section 27(3A)(a)(ii) and 27(5)(a) of the Ordinance, any person claiming that the articles are not liable to forfeiture may give notice in writing to the Commissioner of Customs and Excise within 30 days beginning on the date of seizure, i.e. on or before 20 February 2018 in this case. Please be informed that the claim of the articles, on behalf of your client, on 21 February 2018 fell outside the statutory claim period. As no notice of claim in writing was given to the Commissioner on or before 20 February 2018, the seized articles in this case have been forfeited to the Government by the operation of section 27(6) of the Ordinance.”

The above constituted the 1^st Decision under challenge in the present application for judicial review, which is referred to in the Form 86 as “the Commissioner’s Automatic Forfeiture Decision”.

11.In a letter dated 20 March 2018 sent on behalf of the Applicant to the Commissioner, Huen & Partners accepted that, as a matter of law, the Commissioner did not have to serve notice of seizure of an article where it was seized in the presence of the person whose offence or suspected offence gave rise to the seizure, but contended that the Form CED 69s could be “construed” as notices of seizure under s 27(3), and they were served on 23 January 2018.  Hence, the 30-day period for giving notice of claim in respect of the Goods started to run from 23 January 2018, and the notice of claim given on 21 February 2018 fell within the statutory claim period under s 27(5)(b)(i).

12.By a letter dated 28 March 2018 to Huen & Partners, the Commissioner maintained the view expressed in his earlier letter of 27 February 2018.

(ii)     The Petition to the Chief Executive

13.On 2 May 2018, Huen & Partners on behalf of the Applicant submitted a petition (“the Petition”) to the Chief Executive for the return of the Goods under s 30.

14.By a letter dated 6 June 2018 from the Private Secretary to Chief Executive, Huen & Partners were asked to clarify whether they wished their letter of 2 May 2018 to be treated as a statutory petition under s 30:

“Please be informed that your aforesaid letter cannot be handled as a statutory petition under s.30 of the Ordinance unless the articles in question were forfeited to the Government under s.27(6) or pursuant to a court order under s.28(6) or (7) of the Ordinance. Please clarify, within 14 days of the date of this letter, whether you wish this Office to handle your letter as a statutory petition under s.30 of the Ordinance on the basis that there was no notice of claim given under s.27(5) of the Ordinance and that the articles were forfeited to the Government on that basis under s.27(6) of the Ordinance.”

15.Huen & Partners replied on 22 June 2018, stating as follows:

“We are instructed to reply to your office that it is our Client’s wish for your office to handle our request as statutory petition under s.30 of the Ordinance, and we confirm there was no notice of claim given under s.27(5) of the Ordinance, and that the articles have been forfeited under s.27(6) of the Ordinance. We believe this is the position taken by the Customs as well.” [emphasis added]

16.Eventually, by a letter dated 7 January 2019, the Security Bureau informed Huen & Partners that the Chief Executive had considered and decided to reject the Petition.  This is the 2^nd Decision under challenge in the present application for judicial review, which is referred to in the Form 86 as “the Chief Executive’s Rejection Decision”.

(iii)    The criminal prosecution against S1/S2 and forfeiture proceedings

17.Between 19 August 2019 and October 2019, S1 and S2 were tried on one count of exporting unmanifested cargo and one count of alteration of vessel for the purpose of smuggling in the Eastern Magistrates’ Court (ESCC 371/2019).  On 5 November 2019, the presiding Magistrate acquitted S1 and S2 of both charges, for reasons which are not relevant to the present application.

18.On 19 May 2020, the Commissioner took out a summons in the Eastern Magistrates’ Court (ESMP 982/2020) applying for the forfeiture of the Vessels and related equipment under s 28.  The Goods were omitted from the application because the Commissioner took the view that they had already been forfeited to the Government.

19.There were letters exchanged between the Commissioner and Huen & Partners on the question of whether the Goods ought to be included as part of the forfeiture application which it is not necessary to set out in this judgment, save to mention that:

(1)  By a letter dated 4 September 2020, Huen & Partners requested the Commissioner to exercise his “discretion” to allow the Applicant’s claim to the Goods to be heard at the forfeiture hearing.

(2)  By a letter dated 14 October 2020, the Commissioner informed Huen & Partners that he maintained the view that the Goods had been duly forfeited to the Government on 20 February 2018 pursuant to s 27(6).  This is the 3^rd Decision under challenge in the present application for judicial review, which is referred to in the Form 86 as “the Commissioner’s Discretion Decision”.

20.I am given to understand that the hearing of the forfeiture application in ESMP 982/2020 has been adjourned pending the outcome of the present application.

APPLICATION FOR LEAVE TO APPLY FOR JUDICIAL REVIEW

21.On 13 January 2021, the Applicant filed a Form 86 to apply for leave to apply for judicial review of the decisions mentioned in §1 above.  In the Form 86, the Applicant advances three grounds of judicial review[1]:

(1)  the Commissioner’s Automatic Forfeiture Decision is Wednesbury unreasonable and unlawful;

(2)  consequential to (1), the Chief Executive’s Rejection Decision is Wednesbury unreasonable and therefore unlawful; and

(3)  the Commissioner’s Discretion Decision is unlawful in that it amounts to a fettering of discretion.

22.On 15 January 2021, this court directed a rolled-up hearing of the application for leave to apply for judicial review and, if leave is granted, the substantive application for judicial review.

THE FORFEITURE REGIME UNDER SECTION 27

23.The relevant statutory provisions are contained in Part VI of the Ordinance, entitled “Forfeiture”.  Section 27 is the first provision in Part VI, and states, so far as material, as follows:

“Seized articles, etc. liable to forfeiture

(1) There shall be liable to forfeiture -

(a) any article which has been seized by a member of the Customs and Excise Service or an authorized officer in connexion with the contravention of any provision of this Ordinance;

whether or not any person has been convicted of an offence in respect of such contravention.

(2) The Commissioner may, within 30 days of the seizure of an article, vessel or vehicle, restore any article (other than an article referred to in Schedule 1) or any vessel or vehicle which is liable to forfeiture to the person who appears to him to be the owner thereof or the authorized agent of the owner; and upon such restoration sections 28, 29, 29A, 29B and 30 shall cease to apply to the article, vessel or vehicle.

(3) The Commissioner shall, subject to subsection (3A) and not later than 30 days beginning on the date of the seizure of an article, vessel or vehicle, serve notice of the seizure on a person who was to the knowledge of the Commissioner at the time of, or immediately after, seizure, an owner of the article, vessel or vehicle.

(3A) Subsection (3) shall not apply -

(a) if the article, vessel or vehicle was seized in the presence of -

(i) an owner, or an employee or agent of the owner, of the article, vessel or vehicle;

(ii) the person whose offence or suspected offence gave rise to the seizure;

…

(4) A notice given under subsection (3) or (3B) shall be deemed to have been duly served if -

(a) it is delivered to the person on whom it is to be served;

(b) it is sent by registered post addressed to such person at the place of residence or business of such person, if any, known to the Commissioner; or

(c) where it cannot be served in accordance with paragraph (a) or (b), the notice is exhibited at the Customs and Excise Department, in a place to which the public have access, for a period of not less than 7 days commencing within 30 days from the date of the seizure of the article, vessel or vehicle.

(5) If an article, vessel or vehicle is liable to forfeiture under subsection (1), the owner or the authorized agent of the owner of the article, vessel or vehicle or a person who was in possession of the article, vessel or vehicle at the time of seizure, or a person who has a legal or equitable interest in the article, vessel or vehicle, may within 30 days beginning -

(a) on the date of the seizure; or

(b) where notice under subsection (3) or (3B) is -

(i) served by delivery to the person to be served, on the date of service;

(ii) sent by registered post, 2 days after the date of posting; or

(iii) exhibited as described in subsection (4)(c), on the first day it is so exhibited,

give notice in writing to the Commissioner claiming that the article, vessel or vehicle is not liable to forfeiture and of his full name and address for service in Hong Kong.

(6)  If, on the date of expiration of the appropriate period of time specified in subsection (5) for the giving of a notice of claim, under that subsection, no such notice has been given in writing to the Commissioner the article, vessel or vehicle shall be forfeited forthwith to the Government.”

24.The operation of the statutory scheme of forfeiture under s 27 relevant for the purpose of this case can broadly be summarized as follows.  Section 27(1) provides that any article seized by a member of the Customs and Excise Service in connexion with the contravention of any provision of the Ordinance is liable to forfeiture, regardless of whether or not any person has been convicted of an offence in respect of such contravention. Section 27(2) provides that the Commissioner may, within 30 days of the seizure, restore the article to the owner thereof.

25.Sections 27(3) and 27(3A) set out the rules governing service of notice of seizure.  Section 27(3) provides that the Commissioner shall, within 30 days of the seizure, serve notice of the seizure on the person who was to the knowledge of the Commissioner at the time of, or immediately after, seizure, an owner of the article.  This obligation to serve notice of seizure is subject to s 27(3A), which provides that such notice is dispensed with where (inter alia) the article was seized in the presence of (i) an owner or an employee or agent of the owner, or (ii) the person whose offence or suspected offence gave rise to the seizure.

26.Section 27(5) provides that the owner of an article that is liable to forfeiture may give notice in writing to the Commissioner claiming that the article is not liable to forfeiture within a prescribed period, namely, 30 days beginning on either (i) the date of the seizure, or (ii) where notice of seizure is served by delivery to the person to be served, on the date of service.

27.Finally, s 27(6) provides that if no notice of claim under ss (5) is given to the Commissioner within the prescribed period, the article shall be forfeited forthwith to the Government.

28.In the present case, it is not in dispute that no notice of seizure of the Goods was required to be given by the Commissioner under s 27(3), because the Goods were seized in the presence of the agents (S1 and S2) of the owner (the Applicant), or in the presence of the persons (S1 and S2) whose offences or suspected offences gave rise to the seizure.

29.In order to determine whether the Goods were lawfully forfeited to the Government, the following issues require consideration:

(1)  did the Commissioner, as a matter of face, give notice of seizure of the Goods;

(2)  did the Applicant give notice of claim in respect of the Goods within the prescribed period under s 27(5); and

(3)  what was the legal consequence of the Applicant’s failure to give notice of claim within the prescribed period under s 27(5).

NO NOTICE OF SEIZURE WAS GIVEN BY THE COMMISSIONER

30.As earlier mentioned, the Applicant contends that the Form CED 69s constituted notices of seizure of the Goods within the meaning of s 27(3), while the Commissioner’s positon is the Form CED 69s were merely receipts of the Goods but not notices of seizure.  Each Form CED 69 is entitled “Receipt for Article / Goods / Thing / Vehicle / Vessel / Ship Seized or Detained” (檢取或扣留物品/貨物/東西/車輛/船隻/船舶收據). It contains a description of the items seized, and states the time and date of seizure/detention, the storage location of the seized items, and the name of the person from whom the items were seized or detained.  It also contains a standard paragraph entitled “Notice to Owner / Claimant” referred to in §5 above.

31.In my view, the Form CED-69s are not notices of seizure.  The title and contents of the form clearly indicate that it is intended to be a receipt of the items seized or detained by C&ED, not a notice of seizure or detention of the items to the person from whom the items were seized or detained.  The purpose of the document is to provide such person with a record of the items that have been seized or detained.

32.In this regard, the Form CED-69 may be contrasted with the standard form of notice of seizure (Form CED 118A) used by the C&ED, which expressly states as follows:

“NOTICE

In accordance with the provisions of section 27(3) of the Import and Export Ordinance, Chapter 60, I hereby give notice that the item(s) listed below was/were seized on [date and place], as being article, vessel or vehicle liable to forfeiture under section 27(1) of the said Ordinance …”

That 2 different forms were in use by C&ED, one for “notice of seizure” and the other for “receipt for things detained or seized”, were noted by Le Pichon JA in Chandiramani Bhagwan Kanayalal v Commissioner of Customs and Excise [2002] 2 HKC 43, at §26[2].

33.In all, I am of the view that the Form CED-69s did not constitute notices of seizure of the Goods, and the Commissioner never gave notice of seizure of the Goods to the Applicant (or anyone else on his behalf) under 27(3).

THE APPLICANT FAILED TO GIVE NOTICE OF CLAIM IN RESPECT OF THE GOODS WITHIN THE PRESCRIBED PERIOD UNDER S 27(5)

34.On the footing that the Commissioner was under no obligation to give notice of seizure of the Goods under s 27(3A) and did not give any such notice under s 27(3), the Applicant would be required to give notice of claim in respect of the Goods in writing to the Commissioner within 30 days beginning on the date of the seizure under s 27(5)(a). The seizure of the Goods occurred on 22 January 2018 in this case.  A notice of claim in respect of the Goods was therefore required to be given on or before 20 February 2018.  The notice of claim in respect of the Goods by Huen & Partners on behalf of the Applicant was given on 21 February 2018.  It follows that the notice of claim was late by 1 day.

35.For the sake of completeness, I should mention that, even if the Form CED 69s could be regarded as constituting notices of seizure of the Goods, they would be “voluntary” notices of seizure given by the Commissioner.  It would appear form the judgment of Bokhary PJ (with whom the other members of the Court of Final Appeal agreed) in Commissioner of Customs and Excise v Chandiramani (2005) 5 HKCFAR 618, at §§16, 22-23, that where the Commissioner gives a voluntary notice of seizure, a claimant is nevertheless required to give a notice of claim within the period of 30 days beginning on the date of the seizure:

“[16] … Then, on 16 June 2000, the CES exhibited a notice of seizure in respect of the goods. This notice was exhibited at the CES’s headquarters…

[22] In my view, therefore, the notice of seizure which the Commissioner exhibited was not required by law and was purely voluntary.

[23] Accordingly the time within which Mr Chandiramani and Mr Law had to serve a notice of claim was 30 days beginning on the date of the seizure i.e. 27 May 2000.”

Since I have come to the conclusion that no notice of seizure of the Goods was served by the Commissioner, it is not necessary for me to consider whether this approach should be applied in this case.

THE CONSEQUENCE OF THE APPLICANT’S FAILURE TO GIVE NOTICE OF CLAIM WITHIN TIME

36.This court recently considered the question of compliance with a statutory requirement as to time and the consequence of non-compliance with such requirement in Cheung Shui Kam v The Registrar of Companies [2020] HKCFI 2947:

“[31] … what is the consequence of a non-compliance with this statutory requirement as to time. The conventional approach where there has been non-compliance with a time or other procedural requirement laid down by statute for the commencement or prosecution of proceedings is to seek to ascertain whether the requirement which has not been complied with should be categorized as ‘directory’ or ‘mandatory’. This approach has been criticized as concentrating too much ‘on labels’ (see Re Au Kwok Hung [2001] 1 HKLRD 169, at 173J). The modern approach for determining the consequence of such non-compliance is to treat the matter as one of statutory construction, and the court’s task is to ascertain what the legislature intends to be the consequence of the non-compliance (see FH v WB [2019] 5 HKC 99, at §§65-66 per Au-Yueng J). In R v Secretary of State for the Home Department, ex p Jeyeanthan [2001] 1 WLR 354 at 362D-E, Lord Woolf identified three relevant questions which the court should consider:

‘(1) Is the statutory requirement fulfilled if there has been substantial compliance with the requirement and, if so, has there been substantial compliance in the case in issue even though there has not been strict compliance? (The substantial compliance question.)

(2) Is the non-compliance capable of being waived, and if so, has it, or can it and should it be waived in this particular case? (The discretionary question.) I treat the grant of an extension of time for compliance as a waiver.

(3) If it is not capable of being waived or is not waived then what is the consequence of the non-compliance? (The consequences question.)’

The above approach was endorsed by the Court of Appeal in Re Au Kwok Hung [2001] 1 HKLRD 169, at 174, adding that the second and third questions could often be decided together.

[32]  In respect of the substantial compliance question, the Court of Appeal in Re Au Kwok Hung said that a requirement which consisted of ‘doing a particular act by a particular date’ could not be regarded as anything other than a requirement which has to be complied with strictly.  At 175B, the Court of Appeal pointedly observed: ‘Why should a requirement, which consists simply of doing something by date X, be regarded as having been complied with (albeit substantially) if it is only done by date Y?’  Further, as observed by Kwan J (as she then was) in Re Merck Sharp & Dohme Ltd [2002] 1 HKLRD 820, at §22: ‘in the normal situation, where a time-limit is laid down by statute and no power is given to extend it, the time-limit should be strictly observed without being dispensed with, unless the substantive requirement itself can be dispensed with altogether’…”

37.I shall adopt the “modern” approach, and consider the 3 questions, ie the substantial compliance question, the discretionary question and the consequences question, in this case.

38.In respect of the first (substantial compliance) question, it is clear from the judgment of the Court of Appeal in Re Au Kwok Hung and that of Kwan J (as she then was) in Re Merck Sharp & Dohme Ltd that generally speaking, there is no question of a substantial compliance with a statutory requirement as to time - the time requirement is either complied with or not complied with.  In this case, the time requirement for giving notice of claim under s 27(5) was not complied with.

39.The second (discretionary) and third (consequences) questions can be taken with together.  In my view, the Commissioner had no discretion to extend, or waive, the time requirement for giving notice of claim under s 27(5), and a failure to give such notice within time means that the Goods were forfeited to the Government, for the following reasons:

(1)  The language and effect of s 27(6) is plain: “If, on the date of expiration of the appropriate period of time specified in subsection (5) for the giving of a notice of claim, under that subsection, no such notice has been given in writing to the Commissioner the article, vessel or vehicle shall be forfeited forthwith to the Government.”  The forfeiture is automatic once there is a failure to give notice of claim within the statutory period.  Section 27(6) does not, in my view, admit of any other construction.

(2)  There is nothing in the Ordinance to suggest that the Commissioner has any power to extend, or waive, the time requirement for giving notice of claim under s 27(5).

(3)  The apparent harshness of a strict application of the time requirement is mitigated by the fact that the Chief Executive has power to order the return of forfeited articles, vessels or vehicles to a claimant in a petition submitted under s 30.

(4)  It is important that there be certainty and finality in relation to forfeiture of goods, vessels and vehicles by the operation of law under s 27(6); in particular, the presence of any discretionary power to entertain out-of-time notices of claim could seriously affect the timing and progress of lawful disposition of seized goods, vessels and vehicles by C&ED (see §12(1) of the Affidavit of Wan Yin Ling Leah, Superintendent (Service Prosecution) of C&ED).

40.In all, I am of the view that the Goods were lawfully forfeited to the Government by the operation of s 27(6) upon the expiration of the statutory period for giving notice of claim in respect of the Goods.

GROUND 1 - IRRATIONALITY AND ILLEGALITY OF THE 1^ST DECISION

41.The Applicant contends that the 1^st Decision of the Commissioner is Wednesbury unreasonable and unlawful, arguing, amongst other matters, that the Form CED 69s amounted to “notices of seizure” of the Goods, and relying on an alleged legitimate expectation arising from the posting of the Voluntary Notices of Seizure by the Commissioner on the departmental notice board at the C&ED Headquarters on 12 February 2018.

42.I have already rejected the Applicant’s argument that the Form CED 69s constituted notices of seizure of the Goods within the meaning of s 27(3).  The posting of the Voluntary Notices of Seizure on the departmental notice board at the C&ED Headquarterson 12 February 2018 plainly cannot give rise to any relevant legitimate expectation which the Applicant can rely upon, because they only concerned the Vessels and some related equipment and miscellaneous items, but not the Goods.  There was nothing in those notices which could reasonably have led the Applicant to believe either that (i) the Commissioner considered that the seizure did not take place in the presence of some persons specified in s 27(3A)(a), or the Goods were stolen, or (ii) it was the enforcement practice of C&ED to voluntarily issue some form of written notice for all seized items, irrespective of what the legislation appeared to require, such that the 30-day period would start to run from the date of issuance of the notice, as alleged in §52 of the Form 86.

43.Ms Wan Yin Ling Leah has explained, at §24 of her Affidavit, why it is C&ED’s practice to post notices of seizure of vessels and vehicles on the departmental notice board at the C&ED Headquarters.  This is done essentially to cater for the fact that vessels and vehicles are often subject to hire purchase agreements and financial institutions may have legal or equitable interests in them.  The purpose of the notices is to given the financial institutions an opportunity to lodge appropriate claims to the relevant vessels or vehicles.

44.In any event, it is clear from an examination of the contents of the Voluntary Notices of Seizure that there was no promise or representation in respect of the matters referred to in §52 of the Form 86.

45.Underlying the Applicant’s complaint of irrationality of the 1^st Decision is an assumption that the Director made a “decision” to forfeit the Goods and had a “discretion” not to do so.  This assumption is incorrect as a matter of law.  As earlier mentioned, the forfeiture of the Goods in this case was by operation of law, ie s 27(6).  The Director had no relevant discretion to exercise.  He could not lawfully confer on himself a (non-existent) discretion not to forfeit the Goods, even if, for the sake of argument, he had previously purported to do so in some other cases.

46.In my view, Ground (1) of judicial review is based on an incorrect understanding of the legal regime governing the forfeiture of goods seized under Part VI of the Ordinance, and is misconceived.

47.In passing, I should mention that, under s 27(2), the Commissioner does have power to return any article (other than an article referred to in Schedule 1) or any vessel or vehicle which is liable to forfeiture to the person who appears to him to be the owner thereof or the authorized agent of the owner within 30 days of the seizure.  This provision is not, however, engaged in the present case because the Applicant never requested the Commissioner to exercise such power in his favour.  The Applicant’s position was that the notice of claim was given within time and should be accepted by the Commissioner so that he would have an opportunity to make representations to the court in subsequent forfeiture proceedings (see Huen & Partners’ letter dated 20 March 2018, at §§19-20).

GROUND (2) - IRRATIONALITY AND ILLEGALITY OF THE 2^ND DECISION

48.Ground (2) is said to be “consequential” to Ground (1).  Since I have rejected Ground (1), it follows that Ground (2) must also fail.

GROUND (3) - FETTERING OF DISCRETION IN RESPECT OF 3^RD DECISION

49.Ground (3) is likewise based on a misconceived notion that the Commissioner had a discretion to include the Goods as part of the forfeiture application in ESMP 982/2020.  If, as I consider it to be the case, the forfeiture of the Goods was by operation of law, there would be no legal basis for the Director to include the Goods in the forfeiture application.

50.In Section F1 of the Form 86, the Applicant contends that his property rights under Articles 6 and 105 of the Basic Law are engaged.  However, the Applicant has not challenged the constitutionality of the forfeiture regime under Part VI, or any provision, of the Ordinance.  That being so, the present application must be determined on the basis of the true meaning and effect of Part VI, in particular, s 27 of the Ordinance.

51.In Section F2 of the Form 86, the Applicants refers to the de minimus principle.  This principle has no relevance to the question of whether the Director ought to have included the Goods as part of the forfeiture application.  I am also unable to accept that the de minimus principle has application to the question of whether the Applicant was late in giving notice of claim under s 27(5), this not being a case where there could be any reasonable dispute on whether the notice was given within or outside the statutory claim period.  It is clear, on the facts, that the statutory period expired on 20 February 2018, and the notice of claim was only given on 21 February 2018 and was therefore late.

52.Lastly, in Section F3 of the Form 86, the Applicant refers to matters of “undue financial hardship and dire consequences to an innocent owner”.  Again, these matters were not relevant to the Commissioner’s decision not to include the Goods as part of the forfeiture application, once the correct view was taken that they had already been forfeited to the Government by operation of law.

53.For the above reasons, all 3 grounds of judicial review are not reasonably arguable, and have no realistic prospect of success.

DELAY

54.The applicable principles for extension of time to apply for leave to apply for judicial review are well established (see AW v Director of Immigration [2016] 2 HKC 393) and do not have to be repeated here.

(1)  The Applicant has delayed in seeking leave to apply for judicial review of the 1^st Decision made on 27 February 2018 and the 2^nd Decision made on 7 January 2019.  The present application was not made until 13 January 2021.  Taking the date of the 2^nd Decision as the date from which time to make the application started to run, the delay is more than 21 months, and is plainly very substantial.

(2)  There is no good explanation for the delay.  The suggestion raised in Mr Lam’s submission that it was reasonable for the Applicant to wait until the criminal prosecution against S1 and S2 had concluded (in November 2019) and he had received an answer from the Commissioner to his request that the Goods be included as part of the forfeiture application (in October 2020) before applying for leave to apply for judicial review of the 1^st and 2^nd Decisions is not accepted.  Having regard to the stance taken by the Commissioner that the notice of claim was late and the Goods had been forfeited to the Government under s 27(6), coupled with the rejection of the Petition by the Chief Executive, it must have been obvious to the Applicant (who at all material times had the benefit of legal advice) that the only remaining avenue open to him would be an application for judicial review.

(3)  I have concluded that the substantive application has no merits.  Even if, contrary to my view, the substantive application is reasonably arguable, I do not consider the merits to be strong.

(4)  I consider that either side would suffer prejudice if the discretion to extend time is exercised one way or the other.

(5)  I accept that the question of whether the Commissioner has a discretion to extend time, or waive compliance with the time limit, for giving notice of claim under s 27(5) is a question of some general or public importance.

(6)  The 3^rd Decision is not, in my view, a fresh decision.  It directly follows from, and is, in substance, a restatement of the 1^st Decision of the Commissioner made on 27 February 2018.  It is trite that the time limit for making an application for leave to apply for judicial review cannot be avoided by the device of artificially seeking or creating a “new” decision from the decision-maker.

55.Balancing all relevant considerations, I would not be prepared to exercise my discretion to extend time for the Applicant to apply for leave to apply for judicial review of the 1^st, 2^nd and 3^rd Decisions.

DISPOSITION

56.Leave to apply for judicial review of the 1^st, 2^nd and 3^rd Decisions is refused, and the present application for leave to apply for judicial review is dismissed.  The parties are agreed that costs should follow the event. Accordingly, an order is made that the Applicant shall pay the costs of the Putative Respondents, to be taxed if not agreed.

Mr Osmond Lam and Ms Vivian Henrietta Ho, instructed by Huen & Partners, for the Applicant

Mr William Liu, DLO (Civil Law)(Ag.) and Mr Aaron Lam, SALO (Civil Law)(Ag.) of, and Ms Kristy Wong instructed by, Department of Justice, for the 1^st and 2^nd Putative Respondents

[1] See §35 of the Form 86.

[2] The majority judgments of Rogers VP and Le Pichon JA in the Court of Appeal were reversed by the Court of Final Appeal (2002) 5 HKCFAR 618 on a different point.