Secretary for Justice v. Siegfried Lee Siu Fung and Others
Read the full judgment text of HCMP 2851/2004 on BabelCite. This High Court CFI judgment was delivered on 21 September 2006.
1. Following the oral examination conducted before me against the 2 nd Judgment Debtor Mr. Daniel Chan Kwong Tat (“Chan”) on 20 February and 16May 2006, the Judgment Creditor applied by way of an inter partes summons filed on 16 June 2006 (“the Summons”) for an order to imprison Chan for a period of 3 months under Section 21A of the High Court Ordinance and Order 49B Rule 1B of the Rules of High Court.
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HCMP 2851/2004 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO. 2851 OF 2004 ______________________ BETWEEN
______________________ Coram : Before Master S. Kwang in Court Date of Hearing : 21 September 2006 Date of Decision : 21 September 2006 Date of Handing Down Reasons for Decision : 23 October 2006 ____________________________________ REASONS FOR DECISION ____________________________________ The Application 1.Following the oral examination conducted before me against the 2nd Judgment Debtor Mr. Daniel Chan Kwong Tat (“Chan”) on 20 February and 16May 2006, the Judgment Creditor applied by way of an inter partes summons filed on 16 June 2006 (“the Summons”) for an order to imprison Chan for a period of 3 months under Section 21A of the High Court Ordinance and Order 49B Rule 1B of the Rules of High Court. 2.A call-over hearing of the summons was heard on 14 July 2006. While Chan was acting in person during the course of the oral examination, he was legally represented by Counsel at the said call over hearing. To put a proper foundation for the said application by the Judgment Creditor so that Chan could respond in good time, directions were made for filing and serving of written submissions by parties before the adjourned hearing. Since a prohibition order was in place against Chan since last December up to the said hearing, I also directed that the matter be restored before me with an early date be given. 3.The formal hearing came before me on 21 September 2006. Parties have filed their respective written submissions. Upon considering the same and hearing further oral submissions from Ms. Chan for the Judgment Creditor and Mr. Chang for the 2nd Judgment Debtor, I decided to dismiss the Summons. On costs, I made no order as to costs of the Summons save that costs of the hearing on 21 September 2006 be to the 2nd Judgment Debtor to be taxed if not agreed, such costs to be set off against the Judgment Debt. At the hearing, I indicated that I would give my reasons in writing later, which I now do. Background 4.To have a better understanding of the matter in particular the line of questioning put against Chan during the oral examination, it is desirable to give a brief summary of the events leading to the examination. 5.After conducting an extensive inquiry, the Insider Dealing Tribunal (“the Tribunal”) determined that Chan, amongst others, was involved in insider dealing of the listed shares of Siu Fung Ceramics Holding Limited. As a result, on 25 October 2004, Chan was ordered by the Tribunal, inter alia, to pay the Hong Kong SAR Government a penalty of HK$13,925,337.00 and a sum of HK$2,296,339.00 being approximately 10% of the cost of the inquiry on or before 31 March 2005 (“the Tribunal Order”). 6.In the meantime, the Judgment Creditor representing the Hong Kong SAR Government then registered the Tribunal Order pursuant to Section 29(1) of the repealed Securities (Insider Dealing) Ordinance in the Court of First Instance on 2 November 2004 so that the Tribunal Order shall become for all purposes an Order of the Court. 7.Chan failed to pay the said sums under the Tribunal Order. To enforce the Tribunal Order, an oral examination order was obtained against Chan. While Chan has been residing in New Zealand for a period of time, just when he returned and entered Hong Kong, the Judgment Creditor applied and obtained a prohibition order against Chan. Chan sought to discharge the prohibition order before me on 9 January 2006 but was unsuccessful. Directions were given on that occasion for the purpose of conducting the oral examination. Thereafter, a series of prohibition orders and various extensions thereof were granted by this Court to secure the personal attendance of Chan at the examination and this Summons. Order 49B of the Rules of High Court and the Law 8.The Judgment Creditor relies upon the provisions under Order 49B of the Rules of High Court for the oral examination and the Summons. The relevant parts of the provisions are set out below:
9.The Judgment Creditor relies upon grounds under subrule 1B(a) and (c) to seek the order for imprisonment against Chan; that is, Chan is able to satisfy the judgment, wholly or partly; and he has wilfully failed to make a full disclosure as required under rule 1A(2) or to answer any question. 10.Both Ms. Chan and Mr. Chang have no dispute that my previous judgment in Trading Consultants Ltd. V. John Stewart Sloan, DCCJ 2548 and 13438 of 2000 (unreported, 7/11/2001) has summarized the applicable legal principles, namely:
11.Mr. Chang further submitted that since the criminal standard of proof is applicable to the Summons, any inference that is to be drawn by the Court against Chan must be the only and irresistible one (see Kwan Ping Bong& another v. The Queen [1979] HKLR 1 at 5). The Judgment Creditor’s Case 12.Ms. Chan for the Judgment Creditor asserted in her submission that the 2nd Judgment Debtor was giving inconsistent oral testimonies during the oral examination and was evasive in answering questions posed by her. 13.The main complaint of the Judgment Creditor against Chan focused on his testimony as to the whereabouts of the sum of HK$25 million purportedly received by Chan from Siu Fung Ceramics Group (“the Company”) on his resignation of directorship. The Judgment Creditor argued that Chan refused or avoided to answer questions put to him in relation to the details of his accounts to which his receipt of the said sum of HK$25million was deposited back in 1996, and his subsequent dealings with the said sum. Contradictory statements were given by Chan on different occasions. 14.Further, Chan was evasive in confirming the present whereabouts of the money and wilfully failed to disclose bank information at which the money was deposited. The Judgment Creditor suggested that Chan has concealed the money in question or refused to make it available in satisfaction of the debt owed to the Government under the Tribunal Order. They took the view that Chan still has the money in hand and is therefore able to repay the debt. 15.The Judgment Creditor further urged the Court to draw a strong inference that Chan has failed to make full disclosure of his assets in light of his contradictory testimony and uncooperative attitude given in the course of the oral examination. 16.To support the Judgment Creditor’s arguments, Ms. Chan confirmed that she would only rely on the testimonies given by the 2nd Judgment Debtor during the oral examination. Before the hearing, the 2nd Judgment Debtor’s solicitors have prepared a separate bundle of documents consisting transcript of the Inquiry of the 2nd Judgment Debtor at the Tribunal. Ms. Chan, at the outset of the hearing, opposed the intended use of such transcript by Mr. Chang. 17.Mr. Chang explained that he was not relying upon the said transcript as direct evidence for the purpose of the Summons. Instead, he was trying to demonstrate that the questions put forward by Ms. Chan at the oral examination were factually incorrect by reference to such transcript. Mr. Chang suggested that the 2nd Judgment Debtor’s answers to those questions should be viewed in that context. 18.Ms. Chan argued that she did not have the transcript before the oral examination and has not read the same before she cross examined the 2nd Judgment Debtor. She only received some reliable information that the 2nd Judgment Debtor gave statements to the Tribunal about his receipt of HK$25 million from the Company. Therefore, she has to ask questions on this issue. 19.During the hearing, I deferred to rule on such objection raised by Ms. Chan until Mr. Chang considered whether he would refer to the transcript in his oral submission. Eventually, Mr. Chang decided not to refer to the transcript and the arguments rested there. Testimonies of the 2nd Judgment Debtor 20.It is impossible to rule on the Summons without referring the oral testimonies given by the 2nd Judgment Debtor during the oral examination. 21.The oral examination was conducted in Cantonese and the transcript of the same was of course written in Chinese. To properly understand the relevant and material parts of the testimonies of the 2nd Judgment Debtor, instead of translating the same in English, I would refer and set out the actual texts in Chinese. 22.The gist of Ms. Chan’s complaint against the 2nd Judgment Debtor was that on one hand he said that after receipt of HK$25 million, it was transferred to his overseas bank account but later he retracted from such answer and said that the overseas account belonged to Lee Siu Fung. 23.The relevant parts of the transcript of the testimonies given on 20 February 2006 are as follows:
Ms. Chan relied those parts of the testimony underlined to show that the 2nd Judgment Debtor admitted the overseas bank account belonging to him. 24.Ms. Chan then started to cross examine the 2nd Judgment Debtor on the details of the overseas bank account and in particular who owned such account. The 2nd Judgment Debtor then raised the issue of privilege against self-incrimination. Upon my explanation of his right to seek legal advice before answering the questions, the 2nd Judgment Debtor chose to answer the questions.
25.At this juncture, perhaps it is appropriate to refer to the submission of Mr. Chang that the factual allegations put into the questions posed by Ms. Chan were factually incorrect. In this connection, he purported initially referred to the transcript of the hearing of the Tribunal. 26.Ms. Chan denied such accusation. However, judging from those parts that I have highlighted above by italics, it must appear to the minds of any reasonable person that Ms. Chan was trying to confront the 2nd Judgment Debtor with what he had said previously at the hearing of the Tribunal. It is proper to assume that when she put those questions to the 2nd Judgment Debtor at the oral examination, Ms. Chan would have known the testimonies of the 2nd Judgment Debtor given at the Tribunal hearing. In fact, that was my impression. Otherwise, I would not remind Ms. Chan during the course of her cross examination that I did not have the transcript of the Tribunal hearing (line G at page 44 of the Bundle). Later, I further reminded Ms. Chan not to repeat what had been asked during the Tribunal hearing (line C at page 47 of the Bundle). 27.It turns out from the submission of Ms. Chan at this hearing that she did not have the transcript of the Tribunal hearing before the oral examination and she only obtained reliable information from some other sources about the money. Since eventually Mr. Chang chose not to refer to the transcripts of the Tribunal hearing, I cannot say whether the questions put by Ms. Chan were factually incorrect or not. Nevertheless, I must say that such questions put by Ms. Chan were at least misleading and I must consider the answers given by the 2nd Judgment Debtor in such context. 28.Mr. Chang further drew my attention to the facts that during the hearing of the Tribunal, when the 2nd Judgment Debtor was asked with similar line of questions about the details of the overseas account whereby the said sum of money was eventually transferred to, he also claimed the privilege against self-incrimination. At the hearing, Mr. Justice Lugar-Mawson, the Chairman of the Tribunal ruled that the 2nd Judgment Debtor was entitled to claim such privilege. 29.Ms. Chan did not dispute such fact. If I were informed of such ruling of the Tribunal at the time of the examination, and with the benefit of legal submission which the 2nd Judgment Debtor’s legal representative had made at the Tribunal, I might also allow the 2nd Judgment Debtor to claim privilege and not to answer such questions. 30.Under the possibility of criminal prosecution, the 2nd Judgment Debtor still chose to answer the questions. His answers must in my view carry considerable degree of truthfulness. 31.Ms. Chan continued putting to the 2nd Judgment Debtor that he was still in possession of HK$25million but the 2nd Judgment Debtor flatly denied the same. He maintained such denial throughout the examination. Upon pressing by Ms. Chan to seek confirmation who owned the overseas account, the 2nd Judgment Debtor eventually disclosed that it was owned by Lee Siu Fung.
32.Ms. Chan also complained the 2nd Judgment Debtor for failure to produce bank statements of the overseas account showing his receipt of HK$25 million since July 1996 to present. Instead, the 2nd Judgment Debtor simply alleged that the account did not belong to him but failed to produce any supporting information at the adjourned oral examination in May 2006.
33.I find it not surprising that the 2nd Judgment Debtor cannot find any bank statement of the overseas account since the same was not belonged to him. It is rather difficult to ask a person to prove something not belonging to him. In fact, as submitted by Mr. Chang, the 2nd Judgment Debtor had tried to provide to the Judgment Creditor the bank statement of HSBC for the relevant period back in 1996 when he transferred the money out to the overseas account. HSBC replied that they only retain records of up to 7 years only and therefore cannot provide the records as requested by the 2nd Judgment Debtor. Findings of the Complaints of the Judgment Creditor 34.The Judgment Creditor argued that the 2nd Judgment Debtor gave inconsistent testimony and was evasive. 35.As I can see, the only incident when the 2nd Judgment Debtor was said to give inconsistent testimony during the oral examination was when he was first asked in February 2006 whether the sum of HK$10 million was transferred to his overseas account and the 2nd Judgment Debtor answered in affirmative. Later, the 2nd Judgment Debtor maintained that the overseas account did not belong to him. He maintained such stance in the adjourned hearing about 3 months later in May 2006. 36.As mentioned above, the question was asked in a misleading manner. The 2nd Judgment Debtor was seemingly confronted by Ms. Chan for what he had given statement in the inquiry of the Tribunal about the transfer of HK$25 million. He later decided to waive his claim of privilege facing with the risk of criminal prosecution and corrected what he said initially. He maintained such stance all through the rest of the oral examination. I believe his clarification made at the examination. 37.The Judgment Creditor has not produced any statement or testimony given by the 2nd Judgment Debtor during the inquiry of the Insider Dealing Tribunal to contradict his testimony given in the present oral examination. There is plainly no independent evidence to contradict what the 2nd Judgment Debtor said about the ownership of the overseas account. 38.As held by me in Trading Consultants Ltd. V. John Stewart Sloan (op. cit), I have to judge the credibility of the 2nd Judgment Debtor from the totality of his evidence and through the observation of his gesture and demeanour when he gave evidence in court under oath. From the overall testimony given by the 2nd Judgment Debtor at the 2 hearings, despite the said inconsistency, I am satisfied that the 2nd Judgment Debtor was a credible and honest witness. I do not find him evasive. Facing with possible criminal prosecution, he was frank enough to disclose the real person who was at the material time holding the overseas account and masterminded the whole transaction in transferring the money to overseas. 39.I accept the explanation of the 2nd Judgment Debtor that he was instructed by Lee Siu Fung to transfer the money of HK$25 million through his own HKBC account to the Singapore BNP account on the same day when he received cheques from Lee Siu Fung. The Singapore account did not belong to him and was apparently belonged to Lee Siu Fung. After the money was transferred to such account, the 2nd Judgment Debtor did not know what had happened to the money. Conclusion 40.For reasons as stated above, the Judgment Creditor failed to prove beyond reasonable doubt that the 2nd Judgment Debtor has wilfully failed to make full disclosure. The only substantial asset that the Judgment Creditor tried to identify against the 2nd Judgment Debtor was the said sum of HK$25 million. In light of the above findings, the Judgment Creditor must also fail to establish his other ground of the application that the 2nd Judgment Debtor is able to satisfy the judgment, wholly or partly. 41.In the premises, the Summons for imprisonment of the 2nd Judgment Debtor must be dismissed. 42.Both parties asked for costs of the Summons. 43.While the Judgment Creditor may consider necessary to apply for the order for imprisonment against the 2nd Judgment Debtor in light of the alleged inconsistent statement given at the oral examination and his initial hesitation to answer question on the ownership of the overseas account, after receipt of the written submission of the Counsel for the 2nd Judgment Debtor, they should seriously consider withdrawing the application. Based on the evidence available, the Judgment Creditor could hardly discharge the onerous burden of proof. As such, to proceed further arguing the issue at the substantive hearing should follow with the necessary costs consequences. 44.To do justice and in order to be fair to all parties, I ordered that there be no order as to costs of the application save that costs of the hearing on 21 September 2006 be to the 2nd Judgment Debtor to be taxed if not agreed. 45.Since the 2nd Judgment Debtor is yet to pay the Judgment Debt owed to the Government under the Tribunal Order, I also ordered that the said costs to be set off against the said Judgment Debt. 46.Ms. Chan also sought to ask for costs of the oral examination at the hearing. Such application should normally be made at the conclusion of oral examination instead of at a later stage. However, no application was made until almost 4 months later after the conclusion of the examination. As the hearing of the Summons was overrun already and I see no urgency of such application, I ordered to adjourn such arguments on the costs of the oral examination to a date to be fixed with 1 hour reserved.
Ms. J Chan, Government Counsel of Department of Justice for the Judgment Creditor Mr. J. Chang, instructed by Messrs K.B. Chau & Co., Solicitors for the 2nd Judgment Creditor | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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