Attorney General v. Joseph Lo Chak Man and Others

HCMP001224/1993

1993, No. MP 1224

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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Coram: The Hon. Mr. Justice Kaplan in Chambers

Date of hearing: 17 June 1993

Date of handing down judgment: 29 June 1993

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J U D G M E N T

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1. On 25th March 1993, Master Jennings made an order that the Attorney General do recover possession of the land and premises known as G/F., House B, D.D. 222, Lot 385, Hang Hau Road, Hang Hau, Sai Kung, New Territories (The premises). The Order was sought and made under the provisions of Order 113 of the Rules of The Supreme Court. The 3 defendants, who occupy the premises, now appeal.

2. The registered Crown Lessee of the premises is LAW Wai-wah. She apparently fled Hong Kong for Taiwan just before she was about to be arrested for a money laundering offence which related to drug trafficking.

3. The legal title of LAW to the premises was forfeited by the Government of the U.S.A. under an external Confiscation Order made by Judge Glasser, a United States District Judge for New York on 17th October 1991.

4. Judge Glasser's order was registered in Hong Kong by Gall J. on 25th February 1992 pursuant to the provisions of the Drug Trafficking (Recovery of Proceeds) Ordinance 1989 Cap. 405. By virtue of the provisions of the Drug Trafficking (Recovery of Proceeds) (Designated Countries and Territories) Order 1991, the external Confiscation Order is enforceable by the Attorney General and the proceeds of enforcement are payable to the Hong Kong Government.

5. On 10th April 1992, Gall J. appointed Receivers over the property for the purpose of enforcing the external Confiscation Order.

6. The 1st and 2nd defendants are the brothers of LAW. Each of them asserted that they, and the other occupiers, occupy the premises as licencees of LAW. By letter dated 24th October 1992, solicitors acting for the Receivers wrote to the defendants terminating any licence they had to occupy the premises and they further required possession by 25th November 1992.

7. The application to register, in Hong Kong, the external Confiscation Order made by Judge Glasser was made in HCMP 1711 dated 18th February 1992. It was an application made against one LAW Kin-man and 37 other Respondents. It was in those proceedings that Gall J. made the order for registration.

8. By a summons issued in HCMP 1711 of 1991 on 14th December 1992, the Attorney General applied for an order for possession of these premises.

9. On 13th February 1993, LO Chak-man (D1) filed a summons in HCMP 1711 seeking leave to apply out of time to set aside the order of Gall J. dated 25th February 1992. LO was the 4th Respondent in HCMP 1711. Previously he had not contested the order of forfeiture in New York nor its registration here. The Attorney General knows of no interest LO has in any of the property covered by the order of 25th February 1992. That order covered various properties including the premises the subject matter of these proceedings.

10. On 16th June 1993, Deputy High Court Judge Daniell in HCMP 1711 gave leave to the Attorney General to withdraw the claim for possession in respect of the premises the subject matter of this appeal.

11. Mr. Dykes appeared for the defendants on this appeal and took a number of points.

Abuse of Process

12. Mr. Dykes submitted that up to the moment when Deputy High Court Judge Daniell gave leave to withdraw the claim for possession in HCMP 1711, these proceedings under Order 113 were an abuse of process on the grounds that there were in existence 2 sets of proceedings claiming possession of these premises and that this was an abuse of process, vexatious and oppressive.

13. By the time the appeal came on before me, the Attorney General had rectified this matter. The hearing before me, although an appeal, is still a rehearing de novo.

14. Mr. Dykes submits that I should look at the matter as things stood on 17th May 1993 when the originating summons was taken out under Order 113 and on 25th May 1993 when the Master made his order. I disagree. To show the technicality of this submission, it would have been open to me to give the Attorney General leave to issue a fresh originating summons under Order 113 dispense with service, abridge time and hear the same immediately. There could have been no prejudice to the defendants had I taken that course. They were represented by solicitors and counsel who would have been able to argue the matter without any inconvenience. The reason why the Attorney General could not get possession of HCMP 1711 was because there was in existence an application to set aside the registration of the external Confiscation Order. I will return to this point later.

15. I am further satisfied that there has been no abuse of process because this Court has never gone into the merits of the claim for possession in HCMP 1711 and the claim for possession has been withdrawn before any Court has done so in those proceedings. The observations of the English Court of Appeal in Jelson (Holdings) Ltd. v Harvey [1983] 1 WLR 1401 are apposite to this situation. (See also White Book 1993 Vol. 1, p.346, para. 18/19/17.) The problem with the claim for possession in HCMP 1711 was that no order binding non parties who were in possession of the premises could have been made in those proceeding unlike the case under Order 113. This defect was remedied by withdrawing the claim for possession in HCMP 1711 and proceeding under Order 113.

The attack on the New York Order

16. Mr. Dykes' next submission was that the registration of the New York Order in Hong Kong was going to be attacked on the grounds that the New York Court had no jurisdiction to make the order which it did and that

there had been material non-disclosure before Gall J. because he was not informed that another United States District Court Judge in New York had so held.

17. The problem with this submission as I see it is that none of the defendants to these proceedings have any locus standi to apply to set aside the registration of the New York Order in Hong Kong. None of them have any legal or equitable interest in the property. Such licence as they may have had, has been determined by the Receivers acting on behalf of the Attorney General who is now the legal owner following the registration of the external Confiscation Order. The only person who can have any locus standi to challenge the registration is the former legal owner LAW from whom there has been, as yet, a thundering silence.

18. In any event, an application to set aside registration made at any time but especially so late and after it had not been previously opposed cannot possibly amount to a stay of proceeding. Even if LAW herself had made application to set aside the registration, I do not see how that application would, in itself, have amounted to a stay of the effect of the registration any more than an appeal has that effect.

19. The simple fact of the matter is that LAW's interest in these premises has been extinguished. The defendants' right to occupy as licencees has been terminated. The orders of Judge Glasser and Gall J. are binding orders neither of which have yet been set aside. It would be an absurdity if I was to disregard these orders and allow this appeal on the basis that these orders were going to be attacked by persons who have never had any legal title to these premises.

20. As Mr. Barlow pointed out the situation here is somewhat ironic. If the defendants had been leasees, their denial of the plaintiffs' title would have entitled the plaintiff to forfeit (see Warner v Sampson [1959] 1 QB 297 and Halsbury's Laws of England Vol. 27, para. 424).

21. I can see no possible basis for these defendants to oppose an order for possession of these premises under Order 113 and in those circumstances I have no hesitation in dismissing this appeal. It follows that the stay that I granted on 9th June 1993 is now lifted.

22. I make a costs order nisi in favour of the Attorney General.

Representation:

Mr. Philip Dykes inst'd by Lo, Wong & Tsui for Defendants

Mr. B. Barlow inst'd by Attorney General for Plaintiff