Cheng Poon Kei v. The Queen

HCMP000263/1977

IN THE COURT OF HONG KONG

(CRIMINAL JURISDICTION)

MISCELLANEOUS PROCEEDINGS NO. 263 OF 1977

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Coram: Li, J.

Date of Judgment: 19th May 1977 at 11.23 a.m.

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JUDGMENT

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1. This is an application for the reduction of bail money. I heard this case last week on the 12th of May. For reasons which I shall refer to later I adjourned this case for further enquiries and arguments until today. Having heard learned counsel for the Crown and solicitor for the applicant, I have come to the conclusion that this is a matter of public interest and that I should adjourn to open court to give my decision.

2. The applicant was arrested on the 21st of January this year in connection with two counts of conspiracy to traffic in dangerous drugs. I shall not refer to the details of the charges. Suffice it to say that such charges are serious charges. The applicant applied for bail but was refused on the ground that the charges were serious. The Crown opposed bail on the ground that he might tamper with witnesses or might not return to stand trial. Committal proceedings then took place and he was committed to stand trial on the 17th of March 1977. The applicant's wife who was charged with him and was committed to stand trial at the same time applied for bail. Bail was granted to her at $10,000 cash on condition that she surrendered all the travelling documents and would reports to a police station three times a week. The applicant did not apply for bail then. However, he applied for bail on the 19th of April 1977. The application was heard on the 22nd of April and it was strenucusly opposed by the Crown on the same grounds as before. Having heard the reasons for opposing bail and having heard the reason for the application for bail and having ascertained that the bill of indictment had not yet been filed even then, I came to the conclusion that it was a case that bail should be granted.

3. Perhaps I should add that despite the fact that even though he was arrested on the 21st of January, committed on the 17th of March yet by the 22nd of April no bill of indictment was filed. By his affidavit the applicant deposed that the Clerk of Court told the parties concerned that even if the bill of indictment were filed on the 16th of April, trial would not take place until the 1st of June this year. As a matter of fact I have ascertained that up to date no bill of indictment has been filed as yet. It means, taking the long vacation into consideration, that even if the bill of indictment were filed today trial will not take place until say, July or August. In other words, the applicant would have been in custody for some seven months before trial. For these reasons I granted bail on rather stringent terms. On the 22nd April 1977 I ordered that bail be granted in the sum of half a million dollars in cash, half a million dollars in surety, that the applicant was to report to police station once daily, and surrender all his travelling documents. In addition he must reside in his known place of residence in Waterloo Road, his own flat, between the hourse of 10 p.m. and 6 a.m. everyday.

4. On the 9th of May the applicant made this application to reduce the cash bail to $250,000. The reasons he gave were: that he had no such huge asset as was alleged by the prosecution and that the ready asset he had was a flat in Waterloo Road in which he lived with his wife, mother and daughter. He further deposed that for the purpose of obtaining bail or raising the cash for bail his wife intended to mortgage the flat for the sum of $300,000. Sometime in the latter part of April one Inspector Edwards telephoned his counsel enquiring whether bail money had been raised and that if so he (Inspector Edwards) would inform the Commissioner of Inland Revenue. Strange events then took place. On the 29th of April this year there was a notice signed by a District Judge, obviously on the application of the Commissioner of Inland Revenue, addressed to the Commissioner of Police to the effect that the applicant's wife, who was on bail at the time, he stopped from leaving the Colony unless she furnished a sum of $450,000 in tax.

5. Pausing here I have two observations to make: Firstly the District Judge had no option because under the Inland Revenue Ordinance he was nothing more than a rubber stamp. The Commissioner certified that tax was payable and that the applicant's wife might leave Hong Kong. The District Judge had to put his signature there and give notice to the Commissioner of Police. However, I do not know how much fact had been disclosed to the learned District Judge. The second observation is that this application to a District Judge to stop the applicant's wife from leaving the Colony is a complete farce. I do not know whether the Commissioner for Inland Revenue knew that the applicant's wife was at that time on bail on terms. If he knew then his application was for no other reason than to squeeze $450,000 from the applicant's wife so as to make it difficult for her to raise sufficient money to bail out her husband. If he did not know then he should have made enquiries from the police that this woman was already on bail on terms enquiries from the police that this woman was already on bail on terms requiring her to report to a police station three times a week. No other person can be more determined and keen than the Commissioner of Police to see to that she remains in the Colony. This notice to the Commissioner of Police or application for such a notice to the Commissioner of Police is a complete farce. Such application to the District Judge is also an abuse of judicial process. Even that is not sufficient for the Commissioner of Inland Revenue. On the 2nd of May and the 3rd of May, two letters were addressed to the solicitors arranging for the mortgage of the flat in Waterloo Road for the applicant's wife to the effect that the Commissioner was demanding $450,000 in tax for the year 1974/1975, 1975/1976 and 1976/1977. Later a further demand was made on the application's wife for another $45,000 in tax for the years of assessment in 1972/1973 and 1973/1974. Proceedings were instituted for the purposes.

6. Having heard all these facts, I adjourned the application on the 12th May 1977 for one week to enable the Crown to show cause why there was this sudden demand for tax. Perhaps I should add that I was informed on affidavit that no less than three bank accounts of the applicant and his wife were frozen by the Commissioner of Inland Revenue. By this I mean that the Commissioner of Inland Revenue gave notice to the bankers of the applicant and of the applicant's wife to the effect that no payment be made to either of them unless the applicant's wife had paid up the sum of $450,000 to the Commissioner. The applicant's wife ran an air-conditioning business. One of the accounts that was frozen was a business account of that firm. One can imagine the hardship caused not only to the applicant but also to his wife. All her business was stopped just because the Commissioner of Inland Revenue could not wait to collect his tax. For this reason I adjourned the case last week for further arguments also to enable the Crown to show cause why there was this sudden freezing of all the accounts.

7. Since the adjournment the Crown has filed three affidavits, all from police officers. One Inspector MAN Shing-hon admitted on affidavit that he, on the 22nd of April, on hearing that bail had been granted to the applicant, telephoned and informed the Commissioner of Inland Revenue Department. He said that this was a standing arrangement between the police and the Inland Revenue people. He said that "I so informed the Inland Revenue Department pursuant to an accepted Police Force procedure whereby officers investigating syndicated crimes concerning drugs, gambling or other types of offence involving large amounts of money should establish and maintain communication with an officer of the Inland Revenue Department during the course of and subsequent to such an investigation". No detail, however, was given as to what he informed the Commissioner of Inland Revenue. Inspector Edwards who was alleged to have telephoned counsel for the applicant filed an affidavit to the effect that all he was interested in that telephone call was to find out whether bail money had been raised because he would have to make suitable arrangement for the police station to which the applicant should report. I accept his explanation that nothing sinister occurred in the telephone call because there is no evidence to contradict it. Then there is another affidavit by Superintendent Williamson who said that he was the one who directed Inspector Man to telephone the Department of Inland Revenue. He said that "I did so pursuant to an accepted police procedure whereby officers investigating syndicated crimes concerning drugs, gambling and other types of offence involving large amounts of money should establish and maintain communication with an officer of the Inland Revenue Department during the course of and subsequent to any such investigation".

8. No affidavit, however, has been filed by any officer in the Inland Revenue Department. They preferred to stand on their right under the provisions for secrecy in the Inland Revenue Ordinance. That of course is their own right. However, I cannot help observing that whereas the information leading to the demand for tax might well be secret but the basis of assessment for the demand of $450,000 in tax has no secret in it whatsoever. Had the figure been challenged by the taxpayer, the applicant's wife, in the court proceedings the Commissioner would have to justify it. The Commissioner would have to justify his assessment in proceedings before the Board of Review. What secret is there, I do not know. However, as the Commissioner declined to explain his assessment, his failure to demand tax for the past five years and his sudden demand in a few days a sum of half a million dollars accompanied by drastic measures I am entitled also to draw my own conclusions. Even if the applicant's wife could raise a sum of half a million dollars in cash to bail the applicant out before paying tax, it doesn't mean that the half a million dollars would be lost completely to the Crown. Let us assume that this application for bail is just a means to enable the applicant to abscond and refuse to stand trial, such bail money will be estreated to the Crown. On the other hand, if he should surrender to his bail, the half a million dollars would be in the hands of the Supreme Court Accountant. The Commissioner can make an application to court that the half a million dollars, once the applicant surrenders to bail, be not returned to the applicant but he withheld for the purpose of paying the tax. Why, having waited for the last five years, suddenly the Commissioner decided to collect this tax within a few days? No explanation has been given as to the basis on which the Commission assessed the tax at $500,000. In view of the complete lack of explanation I am entitled to draw my own inference. In the course of opposing bail learned counsel for the Crown said that in the last few years as much as a total of $3,000,000 changed hands. I do not know whether the Commissioner was informed or made to believe that actually the applicant or his wife was in possession of a profit up to $3,000,000. Hence the 15% assessment to the amount of $450,000. Whatever happened, this information started from the police. Furthermore the Commissioner of Inland Revenue gave no explanation as to why approximately $500,000 were demanded.

9. Having regard to the aforesaid I have come to the conclusion that the purpose of the Commissioner's sudden demand for tax accompanied by the drastic measures he was entitled to take was not genuinely for recovery of tax but to assist the police to frustrate my order to grant bail or to ensure that the applicant would not be able to comply with the terms of my order for bail. In the course of so doing he had stopped the applicant or his wife from withdrawing money from their bank accounts for living expenses or business. He demanded his pound of flesh.

10. They say that the giving of information is an accepted Police Force procedure. I say that what the Commissioner of Inland Revenue did may be described as "inter-departmental cooperation", a term which I have heard before to my shock. It is right that Government departments should cooperate to assist members of the public, to serve members of the public but not to harass individuals even though the individual is suspected of crime. The Crown should put the cards on the table and everything should be above-board.

11. It is to my personal knowledge that a couple of years ago a person committed a minor traffic offence, and went abroad. As a result a traffic summons could not be served on him even though there was no intention to evade service. When he returned to Hong Kong to renew his driving licence the Transport Department refused to renew the licence for him until this person had been summonsed convicted and fined. They used the term "inter-departmental cooperation". In the meanwhile the Police was not in a hurry to serve the summons. That form of inter-departmental cooperation we can do without. I venture to suggest that the form of inter-departmental cooperation as in the present case, we can do without either. Such cooperation is not in the interests of justice.

I have explained that the Commissioner could have waited a little while without interfering with the finance of the applicant's wife and that there will be no danger of his not getting his tax if that were chargeable. As it stands he may well be entitled to do his worst. He may well be entitled to act in the way he has done. He is entitled to be the "merchant of venice". I have no control over him in this matter. However, I have control over my own court and my own order. It is a cardinal principle of justice and in matters of granting bail that the conditions should not be such as to amount to a total negation of bail. If such negation comes from an extraneous improper exercise of executive power it is my duty to correct it. I am informed by the solicitor for the applicant that at the moment they have raised a sum of money just short of $200,000 from friends and relatives who are prepared to assist the applicant. I said originally that half a million dollars was the proper amount. Having regard to the circumstances and having regard to the principle that the condition of bail should not be such as to amount to a total negation of bail, I will now reduce the bail money to a sum of $250,000 but the other conditions will remain the same.

Representation: