X v. The Commissioner of the Independent Commission Against Corruption

HCCM000049/2003

HCCM 49/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(CONFIDENTIAL MISCELLANEOUS PROCEEDINGS)

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Coram: Hon Lugar-Mawson J in Chambers

Date of Hearing: 3 December 2003

Date of Delivery of Judgment: 17 December 2003

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J U D G M E N T

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1.The Respondent, X, is the recipient of two notices (the notices) issued by the Applicant, the Commissioner of the ICAC under s. 14(1)(a) and s. 14(1)(b) respectively of the Prevention of Bribery Ordinance, Cap. 201 (POBO) under the authority of an order (the order) made under s. 14(1) of the POBO by Tong J on 21 July 2003. The order was made in response to an ex parte application made by the Applicant under section 14(1A) of the POBO on 17 July 2003.

2.The Respondent seeks to set aside both the order and the notices, or alternatively vary them.

3.Mr Bernard W K Chung appears for the Respondent, Mr Ian McWalters Senior Assistant Director of Public Prosecutions, Mr Marco Li, Government Counsel with him, appear for the Applicant.

4.The Respondent's main submission is that s. 14 of the POBO is an unjustifiable infringement of her right to privacy protected under A.14(1) of the BOR, as guaranteed by BL 39(2) of the Basic Law, and is therefore repealed by it.

5.If this submission fails then the Respondent argues that the Judge erred in that he did no more than examine the Applicant's affirmation in support of the application before being satisfied that there were reasonable grounds for suspecting that an offence under the POBO had been committed. What he should have done, it is said, is address the question of the relevance of the information required to the ICAC's investigation of the Respondent as well as question of the reasonableness of the requirements that were to be imposed on her. He should also have settled the contents of the notices by determining what the Applicant was allowed to require from the Respondent by them. If this submission is successful the Respondent seeks to vary the terms of the order and, as a necessary consequence, the terms of the notices.

6.If the submission is unsuccessful, the Respondent argues that the notices should be set aside on the basis that the Applicant exceeded his discretion in issuing them in the wide terms that he did. This is because he failed to take into account matters that were within his knowledge and which went to the relevance of the information required by them to the investigation, as well as the reasonableness of the requirements they imposed on the Respondent.

The statutory provision

7.The relevant parts of s. 14 of the POBO provide:

"(1A) The Commissioner or an investigating officer may, for the purpose of an investigation into, or proceedings relating to, an offence suspected to have been committed by any person under this Ordinance, make an ex parte application to the Court of First Instance in chambers for an order under subsection (1).

... ... ...

(1) Where on an application under subsection (1A) the Court of First Instance is satisfied that there are reasonable grounds for suspecting that an offence under this Ordinance has been committed it may make an order authorizing the Commissioner by a notice in writing to require-

(a) such person to furnish to the investigating officer specified in such notice a statutory declaration or, as the Commissioner sees fit, a statement in writing, enumerating-

(i) the property, being property in such categories or classes of property, movable or immovable, as may be specified in such notice, belonging to or possessed by, or which at any time during the 3 years immediately preceding the date of such notice or during such shorter period as may be specified in such notice belonged to or was possessed by, such person, his agents or trustees, specifying in respect of each property enumerated whether it is or was possessed jointly (and, if so, with whom) or severally; and specifying the date upon which, and the person from whom, each such property was acquired and whether by purchase, gift, bequest, inheritance or otherwise, and, where it was acquired by purchase, specifying the consideration paid therefor; and in respect of any property enumerated which has been disposed of, whether by sale, gift or otherwise, at any time during the 3 years immediately preceding the date of the notice or such shorter period as aforesaid, specifying how and to whom the same was disposed of and, where it was disposed of by sale, specifying the consideration given therefor;

(ii) all expenditure incurred by such person in respect of himself, his spouse, parents or children with regard to living expenses and other private expenditure during any period specified in such notice (not, however, being a period commencing earlier than 3 years from the date of the notice);

(iii) all liabilities incurred by such person, his agents or trustees, at such time or during such period as may be specified in such notice (not, however, being a time or a period commencing earlier than 3 years from the date of the notice), and specifying in respect of each such liability whether it was incurred jointly (and, if so, with whom) or severally;

(b) such person to furnish to the investigating officer specified in such notice a statutory declaration or, as the Commissioner sees fit, a statement in writing of any money or other property sent out of Hong Kong by him or on his behalf during such period as may be specified in the notice;..."

8.Put shortly, in the context of this case, s. 14(1A) empowers the Applicant, or an ICAC investigating officer, for the purpose of an investigation into, or proceedings relating to, an offence suspected to have been committed by any person under the POBO to make an ex parte application for information of the classes specified in 14(1) to a judge of the Court of First Instance in chambers.

9.Section 14(1) provides that the making of the order is at the judge's discretion. He must be satisfied that there are reasonable grounds for suspecting that an offence under the POBO has been committed and that information about their assets, expenditure and liabilities, (the extent of which is broad but defined) is required from a person who is suspected of having committed it.

10.Section 14 creates a distinction between those persons who are suspects at the time the Applicant invokes his powers and those who are not. In respect of suspects it creates an exceptional power that overrides their right to silence and their right against self-incrimination in relation to their financial affairs. It goes no further than that.

11.Section 14(1B) (not reproduced), which applies only in the case of an application for an order authorising the Applicant to issue notices against persons who are not suspects, imposes a further requirement that the judge has to be satisfied that the information required from the person to whom the notice is addressed is likely to be relevant to the investigation, or any subsequent proceedings. Section 14(1B) does not apply in the case of persons who are suspects.

12.Both suspects and non-suspects alike can be cross-examined on the contents of the statutory declaration made by them under s. 14's powers should they later be prosecuted for a POBO offence and tender themselves as a witness at trial.

13.In order to ensure compliance by the person against whom the power is exercised, subsections (4) & (5) of s. 14 create two offences. Subsection 14(4) makes it an offence for the recipient of a notice, without reasonable excuse, to neglect or fail to comply with the notice. The defence of reasonable excuse ameliorates the obligation to comply and thus a recipient who did all that could reasonably be expected on his part to provide the information required by the notice would not have neglected to comply with it and his failure to strictly do so would be excused. Subsection 14(5) creates an offence of wilfully making a false statement in purported compliance with the notice.

The BOR and the Basic Law

14.I take the BOR and Basic Law point first.

15.Article 14(1) of the BOR provides:

"(1) No one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence, nor to unlawful attacks on his honour and reputation."

And BL 39(2), in its relevant part, guarantees that right by providing that:

"The rights and freedoms enjoyed by Hong Kong residents shall not be restricted unless as prescribed by law. .."

16.The Respondent says that A.14(1) gives her a 'fundamental right'. It does not. The right to privacy given in A.14(1) is expressly qualified in the Article itself. A person is given a right to privacy that can only be interfered with in accordance with law and not even then if it is exercised in an arbitrary fashion.

17.I agree with Mr McWalters that the law which limits the right must be part of a properly passed statute, or be an established part of the common law. Section 14 is part of a regularly enacted Ordinance and no one has sought to argue that it is not. I also agree with Mr McWalters that, as the method and form of the qualifications is not stated in the Article, any form of qualification is allowed as long as it is provided for by law and is not enforced in an arbitrary manner: that is capriciously, or in bad faith.

18.The limiting law must also conform with international law's prescribed norms for laws on human rights. In that it must be clear and accessible to everyone - which s. 14 is. It must not be arbitrary (although that is already specifically mentioned in A.14(1)) and there should be adequate safeguards and effective remedies provided by law against illegal or abusive applications of the limitation.

19.It is now well recognised that in interpreting any law that seeks to restrict an individual's constitutionally guaranteed rights a balance has to be struck between the individual's private interests and those of society as a whole. The Privy Council in Ming Pao Newspapers v A-G of Hong Kong (PC) [1996] AC 907 in doing this applied the proportionality principle and held that any restriction on a freedom given in the BOR must be proportionate to the aims sought to be achieved by the restriction. The restriction must be one that is absolutely necessary to attain a legitimate purpose. What is necessary depends on the circumstances of each case.

20.The Court of Final Appeal in HKSAR v Ng Kung Siu & Anor [2000] 1 HKC 117, at page 140 (lines B - D) held that the word 'necessary' in that test should be given its ordinary meaning and that no assistance is to be gained by substituting for 'necessary' a phrase such as 'pressing social need'.

21.In Attorney General v Hui Kin Hong [1995] 1 HKCLR 227, the Court of Appeal recognized that special powers are necessary in order for the ICAC to be effective in eradicating corruption in Hong Kong. Bokhary JA, as he then was, said this at p. 235:

"Specific corrupt acts are inherently difficult to detect, let alone prove in the normal way. The true victim, society as a whole, is generally unaware of the specific occasions on which it is victimized. And unlike in dangerous drugs cases for example, there is no obviously unlawful commodity, like the drug themselves, which the criminal can be caught in possession of."

22.The Court of Appeal reaffirmed its support for the ICAC having special powers of investigation in HKSAR v Chan Sze Ting Mag App 106 of 1997, Wong J saying at page 11(lines I-J):

"In order to combat corruption vigorously, it is clear that those who are charged with investigation must be given the widest powers."

23.Guided by those principles, I agree with Mr McWalters that in determining whether s. 14 is consistent with the Basic Law and the BOR, I have ask myself and answer the following questions, save that in phrasing those questions I prefer the word 'limitation' to 'qualification':

(a) What is the limitation of the Respondent's right to privacy?

(b) What is its purpose?

(c) Why is it necessary?

(d) How is it applied objectively and rationally?

(e) Is the limitation one that is absolutely necessary to attain a legitimate purpose? Mr McWalters put the question as: 'Could a less 'draconian' restriction be equally or nearly as effective?'

24.I have also asked and answered a further question, which appears to be relevant to this issue:

(f) What adequate safeguards and effective remedies does the law provide against illegal or abusive applications of the limitation?

25.(a) What is the limitation?
The limitation is a defined intrusion into the Respondent's privacy consisting of a demand that she provides certain financial information, backed up by criminal sanctions should she fail to do so, or should she provide false information.

26.(b) What is the purpose of the limitation?
The purpose of s. 14 is to aid the investigation of suspected criminal offences involving corruption and to assist the investigation of those offences. On a higher level, its purpose is to help society, through the agency of the ICAC, the statutory body charged with the investigation of corruption offences, combat corruption.

27.(c) Why is it necessary?
It is necessary because the courts have held that corruption is a crime that has special features which makes it more difficult to detect, investigate and prove than other crimes. The ICAC must have this special power to enable it to combat corruption effectively.

28.(d) How is it applied objectively and rationally?
There is a two-stage filtering system before a notice can be issued against an individual. The first filter is that the Commissioner of the ICAC, or an investigating officer, decides whether or not there are sufficient grounds to make the ex parte application. In order to do so they must have a reasonable suspicion that an offence under the POBO has been committed. The next filter is the ex parte application to the judge in chambers. He will consider the application objectively and rationally. He has to be satisfied that the Commissioner has reasonable grounds for suspecting that an offence under the POBO and not just an offence under the criminal law at large has been committed. The adjective 'reasonable' is a well understood word in the legal field and the ordinary meaning applies to it. As the judge is not an investigator, he will be unaffected by any subjective influences that may be operating on the mind of the Commissioner or the investigating officers as a result of their involvement in the case. He will take into account all of the circumstances, including the impact the application will have upon the suspect. He will be conscious of the fact that the application is ex parte and that the consequences of granting it can be serious for a person from whom he has not heard.

29.(e) Is the limitation one that is absolutely necessary to attain a legitimate purpose?
Yes: there has been judicial recognition of restrictions of rights in the context of corruption offences. The Court of Appeal held in Hui Kin Hong (above) that a considerably more invasive provision (s. l0(1)(a) of the POBO) is consistent with the BOR.

30.(f) What adequate safeguards and effective remedies does the law provide against illegal or abusive applications of the limitation?
There are many: the criminal offences of perjury, attempting to pervert the course of public justice and misconduct in a public office are among the most obvious examples.

31.For the reasons given, I am satisfied that s. 14 of the POBO is not an unjustifiable infringement of the Respondent's right to privacy as protected under A.14(1) of the BOR and BL 39(2) of the Basic Law.

The Judge's approach

32.I turn now to the Judge's approach to the ex parte application.

33.Until 1996 s. 14, together with the other powers of investigation in the POBO, was under the Applicant's control and he exercised his powers without reference to judicial authority.

34.In 1995 a bill amending the POBO was placed before the Legislative Council. The Explanatory Memorandum to the Bill describes the purpose of the amendment to s. 14 (clause 6 of the amending bill) as follows:

"Clause 6 provides that the Commissioner cannot exercise his power to obtain information under section 14 unless the High Court authorizes him to do so."

35.At the time of the second reading of the bill the Attorney General, Mr J F Mathews, said:

"The first category relates to certain of the powers at present vested in the Commissioner of the ICAC, which are to be transferred to the courts. In particular, court approval will be needed in order for the ICAC to require a person to supply information under section 14 of the Prevention of Bribery Ordinance, to search premises (save in exceptional cases), or to prevent a suspect from disposing of property."

36.Subsections, s. 14(1A) and s. 14(1B), were added as a layer above s. 14(1) and subsection (1) was amended to make the High Court (now the Court of First Instance of the High Court) the tribunal that had to be satisfied of the triggering pre-conditions.

37.From this analysis of the background to the amendment to s.14 in conjunction with its structure, I agree with Mr McWalters that it is clear that the purpose behind the 1996 amendments was a narrow one and that the only role the legislature expected of the judge under s. 14(1) was to determine whether or not it is proper for the Applicant to access his powers of investigation given in s. 14 and be authorised to issue the notices.

38.Section 14(1) does not require the judge to have regard to the relevancy of the information required to the investigation before he grants the application. All he is required to do is be satisfied that there are reasonable grounds for suspecting that the subject of the proposed notices has committed an offence under the POBO. Were he required to determine the relevance of the required information to the investigation; this would have been spelt out in the legislation. The judge's duty is defined by the role he is required to play. As Mr McWalters said, he is an independent, external, supervisor performing the function of gatekeeper of the power and not an investigating magistrate. Once he has determined, within the parameters laid down by the legislature, that the Applicant can access his s.14 powers the judge's role is at an end and it is for the Applicant, operating within the parameters of s. 14(1)(a) to (f), to decide on the content of the notices.

39.I agree with Mr McWalters that it is a misapprehension to portray s. 14 as authorising the obtaining of irrelevant information. Every power that authorises the invasion of someone's privacy carries with its exercise the risk that matters irrelevant to, or unconnected with, the investigation for which the power was authorised may become known to the law enforcement agency in the course of exercising the power. A search warrant is the obvious analogy. A search warrant authorises a law enforcement officer to invade a person's privacy for the purpose of searching for the materials described in the warrant. In the course of searching the premises to which the warrant relates he will become aware of things outside the scope of the warrant. Indeed, he may find evidence of the commission of a crime other than the one he is investigating. For example an authorised search of premises for stolen goods may uncover the presence of dangerous drugs. Some, or even all, of the materials seized under the warrant, notwithstanding the officer's belief of their relevancy at the time of execution of the warrant, may subsequently prove to be irrelevant to the investigation. But the warrant does not authorise the officer to become aware of matters that are outside of its scope, or irrelevant to their investigation, that is simply a consequence arising from its execution.

40.Neither is there anything in s. 14(1), or any other section in the POBO, to suggest that the judge has to delve into the details of the investigation and settle the content of the notices. If the judge was required to determine the contents of the notices again this would mean that he was taking on the role of investigator. He would need to be provided with far more information about the investigation. He would have to be aware of how it has developed and the likely direction it will take. He may be required to make assumptions and to some extent speculate. This is not the role of a judge in the common law system of criminal justice.

41.I also agree with Mr McWalter's that had the legislature intended the Respondent to have a say in the information that could be required by the notices it would not have provided for an ex parte procedure. If it was intended that the Respondent had the right to put evidence before the judge with a view to having input as to what is to be required of her, then an inter partes procedure requiring notice to be given her would have been provided for. An example of how this may have been done is found in s. 84 of the Interpretation and General Clauses Ordinance, Cap 1, dealing with the search and seizure of journalistic material.

42.I am satisfied that the Judge was not required to determine what can reasonably be required of the Respondent, neither was he required to settle the contents of the notices. It is for the Respondent to comply with the notices and seek to establish in respect of any area of strict non-compliance why her neglect or failure, as presaged in her three affirmations filed in these proceedings, can be reasonably excused. That is not an issue for me to determine. Indeed, as she has yet to respond to them, it is an issue that has not even arisen.

The other issues

43.The above findings are sufficient for me to determine this issue, though in deference to Mr McWalters argument on the Respondent's claim that I have power to set the notices aside, I agree with him that this is not a matter that can be dealt with under O. 32 r. 6, which applies to the order only. The only means by which the Applicant's decision, as opposed to the Judge's, can be attacked is by judicial review.

44.Finally, despite Mr McWalters' interesting argument seeking to re-open the issue of my jurisdiction to hear the Respondent in these proceedings, I do not resile from my earlier ruling on that issue of 20 October 2003.

Decision

45.The Respondent's application to set the order and the notices aside is dismissed.

Representation:

Mr Ian McWalters, SADPP leading Mr Marco LI, GC, for the Applicant

Mr Bernard W K Chung, instructed by Messrs S Y Wong & Co., for the Respondent