Re Robert Henry Cosby
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HCAL000118/1999 HCAL118/99 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO.118 OF 1999 --------------------------
-------------------------- Coram: Stock J in Court Dates of hearing: 13 October 1999 Date of delivery of judgment: 13 October 1999 -------------------- J U D G M E N T -------------------- 1. This is an opposed application for leave to apply for judicial review of the decision of the Chief Executive to issue to a magistrate an authority to proceed, that is an order that the applicant be dealt with under Part II of the Fugitive Offenders Ordinance ("the Ordinance"). The relief sought is an order of certiorari to quash the decision to issue that order; an order of mandamus requiring the Chief Executive to order the applicant's release; and a number of declarations which I can say at once are entirely superfluous. 2. The applicant is a national of the United States and was the chief executive of a publicly listed company called Softpoint Inc. ("Softpoint") and has been indicted by a grand jury in Nevada. There are three counts in the indictment, the first two of which charge him with laundering funds obtained, it is said, as a result of fraud in the sale of securities. There is a third count in a form unknown to our procedure in that it specifies his potential liability if convicted in respect of the first two counts. 3. Essential to the proof of these offences in the United States is proof that the sums transferred represent the proceeds of unlawful activity. The alleged unlawful activity in this case is fraud by this applicant. Put very broadly, what is said is that Softpoint made fictitious sales of software to six overseas companies under the control of the applicant; and that those sales were recorded as accounts receivable. Shares were issued, it is alleged, to four of those companies and then sold on to an unsuspecting public and the proceeds of the sales applied against the fictitious accounts receivable. It is alleged that the purported but fictitious sales of software boosted the public trading in the company's stocks on the Boston Stock Exchange. 4. In February 1998, a warrant was issued for his arrest by a United States magistrate to answer the indictment, charging him with money laundering. A request has been made by the United States authorities for his surrender in respect of offences allegedly committed by the applicant in the United States. Pursuant to the issue of a provisional warrant of arrest, the applicant was arrested in Hong Kong on 17 July 1999, the authority to proceed was issued on 14 September, and the committal proceedings are due to be heard on 25 November 1999. The applicant is in custody. 5. The evidence thus far forwarded by the United States was that of an Assistant United States Attorney who has been assigned to prosecute this case, who attests to the history of the case and the charge; and also the affidavit of one Ronald Stoecklein who was hired by the applicant as a consultant. 6. The authority to proceed issued by the Chief Executive reads as follows :-
7. I have had some doubt whether judicial review rather than an application for a writ of habeas corpus was appropriate. Judicial review is generally appropriate where the decision sought to be impugned is within the authority of the person making the decision, but where it is suggested that there is a procedural error or failure to take into account relevant material, or the taking into account of irrelevant material, or because the decision is said to be irrational, and it seemed to me that where the legality of an authority to proceed is at the heart of an application, that habaes corpus is more appropriate. But since all parties urge me that the matter may be dealt with as a judicial review, and since there is some suggestion that the decision to issue the authority to proceed is deliberately framed in a way to circumvent the spirit of the legislation, I cannot say that the procedure is obviously inappropriate; and if appropriate directions are given as to time, there will be little practical difference. I am content to proceed on the application for leave. 8. The grounds of the application are hardly as precisely drafted as one would wish, but I think, having heard Mr Bell, that the following arguments emerge, or maybe said to emerge. 9. Section 22 of the Ordinance requires an authority to proceed to be drawn in a particular form. That form is required to specify the offence in respect of which the fugitive is wanted. It is well established that that can be stated in terms of Hong Kong Law. But the argument is that the authority to proceed does not state the offence in respect of which the applicant is wanted. He is not, it is said, wanted for an offence which can properly be described as conspiracy to defraud. He is wanted for money laundering and in this case, Mr Bell argues, there is no evidence that such laundering at the hands of the applicant took place as part of any conspiracy. He is wanted for a body of acts quite separate from anything which might, under Hong Kong law, be termed a conspiracy. If the acts for which he is wanted and prosecuted have an equivalent in Hong Kong, that equivalent might, it is said, be section 25 of the Organised and Serious Crimes Ordinance, of dealing with property known or believed to represent proceeds of an indictable offence. However, that is not the offence recited in the authority to proceed, and that is because at the date the applicant was said to have committed the laundering offences, section 25 was not an offence in Hong Kong and therefore cannot be a relevant offence as relevant offence is defined in the Fugitive Offenders Ordinance. 10. It is further argued that the magistrate cannot commit for an offence other than one to which the authority to proceed relates. That proposition derives from section 10(6) of the Ordinance. The offence to which the authority relates is on its face the offence of conspiracy to defraud. It is said that there can be no surrender for any conspiracy to defraud shown, or to be shown, on any of the papers presently in from the United States authorities because the laundering allegation is not an allegation against this applicant which, in Hong Kong law, could constitute, or properly be described as, a conspiracy to defraud. The only conduct in the case, so the argument goes, which can be said to be a conspiracy to defraud is the initial alleged fraud on those who invested in Softpoint's stocks on the Boston Stock Exchange. That is not an offence for which the applicant can now be prosecuted in the United States as the time limit for that offence has lapsed. The Chief Executive can only in due course surrender a fugitive for the offence or offences specified or described by the magistrate's committal order. But since there can be no surrender for the time barred offence, and since there is no intention to surrender for that offence, and since there is, so the argument runs, no other conspiracy to defraud - which can probably be so called in Hong Kong - and there can be no surrender for money laundering under section 25 of the Organised and Serious Crimes Ordinance, the authority to proceed is said to be an abuse. 11. This is an application for leave to apply for judicial review. All the applicant needs to show, at this stage, is that there is something raised which warrants further consideration. That is a low threshold, and I think that the mere statement of the issues raised, which I have outlined, shows that this threshold has been met, and subject to one matter, I am minded to grant leave. 12. It is said by the respondents that it is inappropriate to grant leave at this stage and that the proceedings should be permitted to continue; and that if the applicant is permitted by the magistrate to await an order for surrender by the Chief Executive, then challenge of the legality of that committal, or of any subsequent order for surrender, if made, can include the points now taken. The case cited to me in support of that proposition, R v. Oldham Justices & Another ex parte Cawley, is not on all fours at all. It was a case in which the proceedings before a magistrate were interrupted in mid-stream. It seems to me that in the circumstances of this case, if it can be shown that the authority to proceed is fundamentally at fault, and that the applicant is at present unlawfully detained, he should be allowed to make his case now. 13. I shall grant leave to apply for judicial review of the decision to issue the authority to proceed subject to the excision of some of the items of relief sought. I shall also give consequential directions.
Representation: Mr Adrian Bell, instructed by Messrs. Erving Brettell, for the Applicant Mr Nicholas Cooney of Department of Justice, for Chief Executive/Respondent Mr M.C. Blanchflower of Department of Justice, for the Government of the United States/Respondent |