Re Domer Ishler

HCMP003249/1993

MP No. 3249 of 1993

H E A D N O T E

Letter of Request - Order 70 rule 3 of the Rules of the Supreme Court - whether request emanates from requesting court or grand jury - status and function of Grand Jury in the United States - s. 75 and s. 77B Evidence Ordinance, Cap. 8.

MP No. 3249 of 1993

IN THE SUPREME COURT OF HONG KONG

MISCELLANEOUS PROCEEDINGS

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Coram: The Hon. Mr. Justice Wong in Chambers

Date of hearing: 17 February 1994

Date of handing down judgment: 25 March 1994

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J U D G M E N T

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1. This is an ex parte application by the Crown Solicitor under Order 70 r.3 of the Rules of the Supreme Court for an order for the examination of the managers or such other authorised officers of the Hong Kong and Shanghai Banking Corporation Limited and the Standard Chartered Bank and the production at the examination of documents specified in the summons. The documents and information sought relate to particulars of the bank accounts of Camaro Trading Company Limited and a Visa Card in the joint names of Camaro Trading Company Limited and Domer Lee Ishler.

2. On 27 July 1993 the United States Department of Justice transmitted to the Hong Kong Government a Request for Judicial Assistance from the District Court for the Northern District of Alabama. The request states that United States law enforcement authorities have informed that Court that, if the assistance requested is obtained, it is likely that criminal proceedings will be instituted against Domer L. Ishler, a U.S. citizen, and 20th Century Marketing, an Alabama corporation wholly owned by Ishler, for tax evasion and related offences. It is also alleged that Camaro Trading Company Limited in Hong Kong is either owned or controlled by Ishler. Ishler and 20th Century Marketing are being investigated by a Federal Grand Jury.

3. The summons was issued on 15 September 1993 and was adjourned when it came before Deputy Judge W. Wong on 21 September.

4. The jurisdiction of the court to grant judicial assistance to foreign courts is derived from section 75 of the Evidence Ordinance, Cap. 8. It reads :

"Where an application is made to the High Court for an order for evidence to be obtained in Hong Kong and the court is satisfied -

(a) that the application is made in pursuance of a request issued by or on behalf of a court or tribunal ("the requesting court") exercising jurisdiction in a country or territory outside Hong Kong; and

(b) that the evidence to which the application relates is to be obtained for the purposes of civil proceedings which either have been instituted before the requesting court or whose institution before that court is contemplated, the High Court shall have the powers conferred on it by this Part."

Section 75 applies to civil proceedings but it is made applicable to criminal proceedings by section 77B(1) which provides :

"The provisions of sections 75, 76 and 77 shall have effect in relation to the obtaining of evidence for the purposes of criminal proceedings as they have effect in relation to the obtaining of evidence for the purposes of civil proceedings."

5. Mr. Stone who appears for Camaro Trading Company Limited on notice opposes the application. He takes two points. The first one is what he calls a point of substance on principle or jurisdiction. The second is a subsidiary point relating to the particularity of paragraphs (e), (f) and (g) under 2(3) of the summons at p.6 and p.7. He also argues that it is an impossibility to examine a limited company.

6. He submits that as his client's bank accounts are in danger of being violated, it is important that everything on paper is in place to meet the bench mark under section 75 of the Evidence Ordinance. In this connection, he refers to a decision of Ryan J. dated 21 January 1993 concerning an earlier application on the same subject matter. Ryan J. dismissed the application on the ground that the request had come from a wrong court. He said at p.4 (p. 126 of the bundle) of the judgment :

"The facts point overwhelmingly to the Alabama Court being the venue. Mr. Stone's submission is that in the circumstances the United States District Court for the Southern District of New York is the requesting court within the terms of s.75, but that is not the court before which the likely proceedings will be instituted."

7. Mr. Stone argues that the request does not seem to be a request by the Alabama Court, it is a request on behalf of the Grand Jury. He produces an American textbook on Criminal Procedure and under the heading of "what is grand jury and its function", it reads :

"A grand jury is the body of qualified persons selected and organised for the purpose of inquiring into the commission of crimes within the jurisdiction from which its members are drawn, determining the probability of guilt, and finding indictments against supposed offenders. A grand jury is an adjunct or appendage of the court under whose supervision it is impaneled, and has no existence aside from that court. Although the grand jury is under the control of the court to the extent that it is organised by the court and the legality of its proceedings is determined by the court in accord with statutes, the court is not empowered to control the course of a grand jury investigation and the court may not compel an indictment nor may it prevent an indictment except by summary discharge of the grand jury."

Foreign law is a question of fact to be proved by evidence and there is no such evidence. Be that as it may, even accepting this passage at its face value, it still does not assist or advance Mr. Stone's argument. A grand jury has no existence of its own. It is the creature of the court under whose supervision and control it operates. The grand jury is therefore a part of that court with its own function to perform certain duties relating to the investigation and determination of issues which may later come before the court for final adjudication and judgment. It is true that the court has no power to direct the grand jury to return or to prevent it from returning an indictment. Nor does the High Court in Hong Kong have power to compel or direct a magistrate in committal proceedings to commit or not to commit a defendant for trial. Mr. Stone acknowledges that a grand jury investigation is equivalent or similar to committal proceedings. If the committal proceedings and the subsequent trial are part and parcel of a continuous criminal process, it must follow that the grand jury investigation and the subsequent trial are also the same process. In any event, I am satisfied that the terms of the Letter of Request indicate overwhelmingly and unequivocally that the request comes from the United States District Court for the Northern District of Alabama and that it relates to criminal proceedings likely to be instituted in that court.

8. I reject the arguments that the request is made on behalf of the Grand Jury and that it is not clear that proceedings are likely to be instituted in the United States District Court for the Northern District of Alabama.

9. Mr. Stone further attacks the request as an extraterritorial search warrant for information for pre-trial purpose. He says that it is a discovery exercise which is not permitted in our law. Reliance is placed on a number of English decisions : Radio Corporation of America v. Rauland Corporation [1956] 1 QB 618; Penn Taxas Corporation v. Murat Anstalt [1964] 1 QB 40; Penn Taxas Corporation v. Murat Anstalt (No. 2) [1964] 2 QB 647; Rio Tinto Zinc Corporation and Others v. Westinghouse Electric Corporation [1978] AC 547 and In Re State of Norway's Application [1987] 1 QB 433.

These cases turned on the construction of the Foreign Tribunals Evidence Act 1856 and the Evidence (Proceedings in Other Jurisdictions) Act 1975, two English statutes which do not provide for letters of requests where criminal proceedings are only likely to be instituted. But section 77B of the Evidence Ordinance makes specific provisions for the obtaining of evidence in relation to proceedings which have been instituted or whose institution is likely if the evidence is obtained. There is a useful passage in 70/1-6/5 at p.1207 of the White Book, 1993 which reads :-

"In relation to legal systems which do not recognise the distinction between the stages of pre-trial and trial, as in the case of many European Continental systems, it seems that the English Court may have to give effect to the request of the foreign Court, since all the material which such a Court gathers in the way of evidence forms part of the material on which that Court makes its final adjudication so that the evidence is the equivalent of testimony at the trial."

Discovery is certainly not permissible under both English law and Hong Kong law. In this case I am satisfied that this is not a discovery exercise that Mr. Stone suggests.

10. I also find that the submission of the impossibility of examining a limited company is without any substance. What the summons seeks is to examine the managers or other authorised officers of the two banks. In Mid Pacific Services Inc. and Others v. Crown Solicitor [1992] 1 HKLR, Master Woolley included in the order for the examination of the manager or such other authorised officer of the Hong Kong and Shanghai Banking Corporation and this part of the order was upheld by the Court of Appeal.

11. Mr. Stone agrees that documents forming a compendious class of documents capable of identification are permissible if rule against him on the question of principle or jurisdiction. He has no objection to the production of documents with the exception of items (e), (f) and (g) in 2(3) of the summons at p.6 and p.7. He says that these three items are too general and not sufficiently particularised. These items relate to the corporate VISA card account in the joint names of Camara Trading Company Limited and Domer Lee Ishler and are :

"(e) the bank's copies of charge slips for the period from 1 January 1987 to the date on which the account was closed (which the available evidence indicates was on or shortly after 17 August 1989), but in any event no later than 31 December 1989;

(f). the payment slips (remittances, advices) relating to the particular payments specified in the monthly statements of credit card account for the period from 1 January 1987 to the date on which the account was closed (which the present evidence indicates was on or shortly after 17 August 1989), but in any event no later than 31 December 1989;

(g) payment instruments relating to the particular payments specified on the monthly statements of credit card account for the period from 1 January 1987 to the date on which the account was closed (which the present evidence indicates was on or shortly after 17 August 1989), but in any event no later than 31 December 1989."

12. In re Asbestos Insurance [1985] 1 WLR 331, the House of Lords held that :

"'particular documents specified in the order' in section 2(4)(b) of the Evidence (Proceedings in Other Jurisdictions) Act 1975 was to be construed strictly so as not to permit mere "fishing" expeditions; that, although several documents might be described compendiously, the exact document in each case had to be clearly indicated and the documents had to be actual documents shown to exist or to have existed rather than conjectural documents that might or might not exist or have existed."

Mr. Hamlin submits that items (e), (f) and (g) have met these criteria and it would be difficult for any requesting court to particularise the documents in much greater detail. The Chartered Bank will not have any problem in identifying them. I agree.

13. For these reasons, an order in terms of the summons in its entirety is granted and I direct the witnesses to be examined and to produce the documents as specified before a Master of this Court. I make an order nisi for costs to the Crown Solicitor.

Representation:

Mr. Patrick Ronald Paul Hamlin, Crown Counsel for Attorney General's Chambers

Mr. William Stone, instructed by M/s. Day & Chan for Respondent (Camaro Trading Co. Ltd.)