Re Mrs Tang

DCMP000115/1977

Restraining Order granted under S.14C Prevention of Bribery Ordinance against wife's $1.9 million share in landed property - applicability of the statutory presumption in S.10(2) - discharge of restraining order under statute and inherent jurisdiction - sufficiency of evidence in support of restraining order.

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT VICTORIA

CIVIL JURISDICTION

Miscellaneous Proceedings No. 115 of 1977

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Coram: Judge Liu, Q.C. in Court.

Date of Judgment: 18 October 1970

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JUDGMENT

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1. In 1977, one TANG Wan was under investigation by the Independent Commission Against Corruption. The result of the then enquiry revealed that Mr. Tang and his wife were absent from Hong Kong. It is not in dispute that the evidence led on behalf of the Commissioner of the Independent Commission Against Corruption does establish that 19/30ths of the purchase price of a property known as "Little Stone Manor" and now registered in the name of the applicant company, Messrs. Yee Po Land Development Co. Ltd., is traceable to two bank deposits of Mrs. Tang.

2. Mr. Tang joined the Hong Kong police as a constable in 1946 at the age of 24, being single and unemployed, and in 1950 he married Mrs. Tang, then a 22 years old student. Having reached the rank of Inspector, Mr. Tang retired in May 1974. These bank deposits of Mrs. Tang's were slightly over $1.9 million of which $1.9 million became part consideration for the acquisition of the property now in the name of the applicant company. The managing director of the applicant company, one MAN Cheuk-bun, had played a significant role in the disposal of Mrs. Tang's bank deposits, and he was convicted of making a false statement in respect thereof contrary to Section 32 of the Crimes Ordinance. The circumstances are not entirely free from suspicion.

3. Section 14C(1)(b) of the Prevention of Bribery Ordinance reads as follows:-

"If, on application ex parte by or on behalf of the Commissioner, the Court is satisfied that a third party is holding any property for or on behalf of or to the order of a suspected person the Court may make an order under this subsection (hereinafter so referred to as a 'restraining order')".

4. On the 25th May, 1977, pursuant to Section 14C of the Prevention of Bribery Ordinance, the Commissioner sought and obtained a restraining order in respect to the said property to the extent of Mrs. Tang's $1.9 million, being 19/30ths of its purchase price of $30 million. Proceedings have been instituted against Mr. Tang under the Prevention of Bribery Ordinance, and thereupon the restraining order continued in force. The restraining order has been served on the applicant company which now applies for the same to be revoked.

5. It was contended by the Commissioner that the right to a revocation of a restraining order was limited in scope and that a revocation could be justified only by alleged undue hardship caused by the continuance in operation of the restraining order as envisaged by Section 14D(4)(a). Section 14D(4) presupposes that the application for a restraining order had been justifiably supported, and obviously "a third party" "holding property for or on behalf of or to the order of a suspected person" could hardly pretend to have suffered any personal grievance except on the ground of undue hardship. It is the submission of leading counsel for the applicant that the Commissioner disclosed insufficient evidence to satisfy the Court for the making of the aforesaid restraining order. Therefore, the circumstances in which we find ourselves to-day leave no room for Section 14D(4)(a) to spring into operation.

6. It is common ground that under Section 14C(1)(b) the Commissioner has to satisfy the Court that a third party is holding property for or on behalf of a suspected person. If in fact the restraining order was made under a fundamental misapprehension of law or fact, it is only just that the Court should exercise its inherent jurisdiction to revoke the ex parte restraining order. A man's full right of recourse to the courts may not be impaired except by very clear provisions particularly in the case of an order obtained on an ex parte application which signifies no permanency. Lord Justice Shaw observed in R. v. Hull Visitors, Ex p. St. Germain:

"An essential characteristic of the right of a subject is that it carries with it a right of recourse to the courts unless some statute decrees otherwise "whatever his status and however attenuated those rights and liberties may be". ⁽¹⁾

Some guidance and an analogy may be drawn from the Practice Direction issued by Lord Denning in Becker v. Noel & Another.⁽²⁾ In my judgment, on an application to revoke a restraining order on the ground of insufficiency of evidence, an applicant ought not be hindered by the provisions in Section 14D(4).

7. There is one single issue for determination, viz. whether Mrs. Tang was holding the bank deposits, as she is now holding the portion of property representing such bank deposits, for or on behalf of Mr. Tang.

8. On the application before the Court in May 1977, the Commissioner invoked, inter alia, the statutory presumption in Section 10(2) of the Prevention of Bribery Ordinance. Loading counsel for the applicant submitted that the statutory presumption in Section 10(2) is exclusively reserved for "proceedings for an offence under subsection (1)(b)". After all, so counsel urged, that is the very wording of Section 10(2). Further, it was emphatically stressed that such statutory presumption has not been expressly extended by the Legislature to Section 14C for the benefit of an applicant for a restraining order.

9. Section 10 is found in Part II of the Ordinance which sets out the "Offences", and Section 14 is in Part III which deals with "Powers of Investigation". The question which immediately leaps into prominence is: Was it intended by the Legislature to lay down double standard, one for establishing "control" with the ultimate aim of proving guilt under Section 10(1)(b) and another for investigating beneficial entitlements referable to the same alleged guilt?

10. One could readily appreciate the different situations in Section 10(1)(b) and Section 14C. The adverse effect of Section 10(1)(b) would not instantly travel beyond an accused person himself, but Section 14C seeks immediately to interfere with the apparent proprietary interest of a third party. Different stages of the proceedings are envisaged by these two subsections: whilst Section 14C is designed to encroach upon a third party's right to his property at a stage even before trial, Section 10 does not begin to bite at an accused person's beneficial interest until after verdict and only in execution of the fine or penalty imposed as a judgment debt. Vide S.23 District Court Ordinance and S.12(4) Prevention of Bribery Ordinance. The distinction really lies in the different approach under these two subsections. Section 10(2) raises a presumption of an accused person's control of "material possessions" when in fact he has no such control. "Material possessions" presumed to have come under an accused person's control are merely taken into account for quantifying his unexplained assets, and such presumption has little bearing on the question of property ownership in the hands of a third party, even "having regard to the closeness of his relationship to the accused". The Crown may be in a position to raise a statutory presumption for boosting an accused person's control of disproportionate assets, but the beneficial ownership of such assets in his presumed control will remain undecided until an allegation of trust in respect to these assets in favour of the accused is ultimately resolved in a civil suit. For assets to which the accused person's beneficial entitlement has been established, in addition to execution on the fine and penalty imposed under Section 12 of the Prevention of Bribery Ordinance, a corrupt civil servant may be compelled to account for his ill-gotten gains, but in such proceedings the Crown will have to prove them as proceeds of corruption, an undertaking of a no mean task.(3)

11. Section 10 and Section 14C were enacted for different situations, different stages and different purposes. It is therefore not surprising that for restraining the proprietary interest of an apparent owner in the person of a third party, the Legislature did not see fit to confer on the Commissioner the advantage of a presumption akin to that in Section 10(2). It was well said that "statutes which encroach on the rights of the subject, whether as regards person or property, are subject to a strict construction in the same way as penal Acts."⁽⁴⁾ In my judgment, the Commissioner could not crave in aid that statutory presumption on his application under Section 14C for a restraining order in May 1977.

12. Without the statutory presumption, the Commissioner is left with the entitlement of Mrs. Tang to a portion of the property registered in the name of the applicant company. Suspicion is no evidence. Any attempt to fuse into one Mrs. Tang's property and her husband's possessions is an affront to the whole concept of a feme sole. Landed interest traceable to the bank receipts of Mrs. Tang is no evidence that Mrs. Tang was holding it for or on behalf of Mr. Tang. Consequently, in my judgment, the Commissioner application in May 1977 was not well supported, and the restraining order must therefore be revoked with costs and a certificate for counsel.

Representation:

Mr. Dawson, counsel for the Crown.

Mr. Martin Lee, Q.C. with Mr. Suffiad and Mr. Raymond Liu instructed by Lo & Lo for the Applicant.

(1) [1979] 2WLR 42 at p.61B-F.

(2) [1971] 1 WLR 803

(3) Cheung Chi-kwong v. R. Privy Council Appeal No. 34 of 1978, judgment of which was delivered on 25th June 1979, p.7.

(4) Maxwell on Interpretation of Statutes, 12th Ed. p.251.

M. P 115 of 1977

8th October, 1979 - court : C.A.V.

18th October, 1979 - Written judgment delivered and handed down in Court

18th October, 1979

By Consent Further Ordered:

Cases and authorities cited in Judgment:-

Cases referred to in Submissions by Applicant's counsel:-

Representation:

Mr. Dawson, counsel for the Crown.

Mr. Martin Lee, Q.C. with Mr. Suffiad and Mr. Raymond Liu instructed by Lo & Lo for the Applicant.