HKSAR v. Dildar Husain Rizvi

HCCC 235/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO. 235 OF 2006

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Before: Hon Wright J in Court

Date of Hearing: 23 January 2007

Date of Ruling: 2 February 2007

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RULING

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1.This is an application for costs pursuant to the acquittal of the applicant on a single charge of publishing a false statement contrary to section 21(1) of the Theft Ordinance, Cap. 210.  That acquittal came about as a consequence of the prosecution offering no evidence against the applicant.  This course was followed due to the unwillingness or inability of a witness, one Kapoor, to travel to Hong Kong from India to testify. That witness would have testified under an immunity from prosecution. His evidence was perceived as being vital to the prosecution case.

2.The offence was alleged to have occurred in May 1988.  Prior to that time the applicant had been the Regional General Manager of the Bank of Credit and Commerce Hong Kong Ltd (BCCHKL). The misleading, false or deceptive statement was alleged to have been contained in the audited financial statements of BCCHKL in that those accounts did not reflect a substantial loss incurred by BCCHKL on a share portfolio which it held at the time of the worldwide stock market collapse in October 1987.

3.Kapoor was an employee in the regional office of BCCHKL, junior to the applicant. According to the statements of Kapoor and another witness a scheme was put into effect which was designed to “transfer” the loss from BCCHKL to another company or companies owned or operated by a cooperative customer of BCCHKL, in order that the accounts of BCCHKL would not be adversely affected.  This was to be achieved by way of BCCHKL exercising a bogus “put” agreement.

4.The basis of the prosecution case was that the applicant was a party to, or at least was well aware of, the execution of that scheme.  It follows, says the prosecution, that he knew that the respective financial statements were materially misleading, false or deceptive.  The applicant's position is that if such a scheme existed, or was executed, he was unaware of it: thus, insofar as he was concerned, the audited financial statements properly reflected the financial affairs of BCCHKL for the period to which those accounts related.  The fundamental issue at trial, then, would have been the applicant's knowledge.

The applicable principles

5.The Costs in Criminal Cases Ordinance, Cap. 492, by virtue of sec. 25, does not apply to these proceedings.  The application is governed by the provisions of sec. 51A and 73A of the Criminal Procedure Ordinance, Cap. 221 (the Ordinance). Sec. 73A provides

(1) Where after trial in the court a person is acquitted, the court may order that payment out of the public revenue of the costs of the defence, including the costs of any proceedings before a magistrate.

(2) The costs payable to any person under this section shall be such sums as appear to the court reasonably sufficient to compensate that person for any expenses properly incurred by him in or about the defence.

whilst sec. 51A provides

Where an accused person arraigned on an indictment pleads not guilty and the prosecutor proposes to offer no evidence against him, the court before which the accused person is arraigned may, if it thinks fit, order that a verdict of not guilty shall be recorded without the accused person being given in charge to the jury, and the verdict shall have the same effect as if the accused person had been tried and acquitted.

6.In considering these sections, Hooper, J., in R v Richard Wallis [1989] 1 HKLR 501 at p. 506 held

Reading these two sections together, it appears to me that the intention of the Legislature must have been that the effect of an acquittal after trial in the court was the provision of jurisdiction to the court to award costs to the acquitted defendant and that a person acquitted under "the same effect section" should be treated as if he had been acquitted after trial in the court, thus providing the court with the same jurisdiction to award costs.

The Legislature was aware of the terms of "the same effect section" when "the jurisdiction section" was promulgated and it would have been easy in the amending Ordinance to insert an amendment to the former to exclude such an effect if that was intended.

Furthermore there is no logical reason why an acquitted defendant against whom no evidence has been laid at all should be placed in a less advantageous position than one against whom evidence was led.

7.He went on to add, at p. 508E

... I consider that there may be some merit in the Crown's argument that an acquittal under section 51A may be analogous to an acquittal on a technicality which has no merit.  The Practice Direction (c) would enable the court to refuse to award an acquitted defendant costs where there is ample evidence to support a conviction.  It seems to me that if the Crown could show that there was ample evidence to support a conviction... but that it had taken the course which it had in what it perceived to be the public interest, this may well provide a good ground for refusing costs...

8.That was not a line which the prosecution chose to pursue in this matter.

9.It is settled (TONG Cun Lin v HKSAR [2000] 1 HKLRD 113) that an application for costs under section 73A of the Ordinance should be decided in accordance with the prevailing practice directions in England, the relevant portion of which reads:

It should be accepted as normal practice that an order should normally be made for the payment of the costs of an acquitted defendant out of central funds... unless there are positive reasons for making a different order.  Examples of such reasons are:

(a) ...

(b) where the defendant's own conduct has brought suspicion on himself and has misled the prosecution into thinking that the case against him is stronger than it is the defendant can properly be left to pay his own costs.

(c) where there is ample evidence to support a conviction but the defendant is acquitted on a technicality which has no merit.  Here again, the defendant can properly be left to pay his own costs.

10.The test is twofold. The headnote (1) in TONG Cun Lin is in error if it is read as suggesting that it is sufficient that an accused either through his own conduct has brought suspicion on himself or has misled the prosecution into thinking that the case against him was stronger than it in fact was.  See also Penlington, J., in NG Yui-kin and Others v R [1983] HKLR 356 at p. 361I

The sole question is... has the defendant's own conduct brought suspicion on himself and has misled the prosecution into thinking the case against him was stronger than it was.

11.Whether the Court of Final Appeal took a different approach in regard to applications under the Costs in Criminal Cases Ordinance, Cap. 492, in HUI Yui Sang  v HKSAR [2006] 2 HKLRD 738 at § 12 is not a matter which would affect this application.

12.As to the factors which should be taken into account in exercising the discretion, Litton, P.J., had this to say in TONG Cun Lin at p 117F

... the judge exercising the discretion must obviously look to [the accused’s] conduct generally, so long as such conduct is relevant to the charges he faced.  This cannot be confined to any particular period of time.  Since, however, the discretion is being exercised in the context of an acquittal - the averments constituting the charges having been found by the jury as not amounting to the crimes alleged - it follows that, generally speaking, the conduct most relevant to the matters under consideration must be the defendant's conduct during the investigation and at trial: how he first responded to the investigators, the answers he gave when confronted with the accusations, the consistency of those answers with his subsequent defence, etc.  Wrapped up with this is the strength of the case against the defendant and the circumstances under which he came to be acquitted:

Those factors will require modification where, as here, there has been no trial and the evidence remains untested.

13.I would respectfully adopt also the observation of Hartmann, J., in HKSAR v LI Siu Tong and Others HCMA547/2000

... there must be such a proximity between the behaviour that is condemned and the alleged criminal conduct that it can reasonably be said not just that the appellants behaved badly but that their conduct brought suspicion upon themselves in respect of their alleged criminal conduct.

The applicant’s conduct

14.In support of its contention that I should exercise my discretion in its favour the prosecution points to two factors in the applicant's conduct, together with two other matters, the first being the applicant's absence from Hong Kong and his refusal to return to Hong Kong before the institution of extradition proceedings.

15.There is no serious dispute about a summary of events prepared by the prosecution based upon a statement by the Chief Investigator of the ICAC who has been dealing with this matter. 

16.On 1 April 1988 the applicant left Hong Kong.  In itself there is no significance to this event as it appears that his departure was because he was transferred in the course of his employment with BCCHKL.  It was not until well over three years later that, on 3 September 1991, a report was made to the ICAC concerning this matter.  There can be no suggestion that the applicant left Hong Kong in order to avoid the consequences of his alleged conduct.

17.A further three years elapsed before, on 6 December 1994, a warrant was authorised for the applicant's arrest – an event which was made known internationally. 

18.Three years after that, on 4 December 1997, the applicant was detained on his arrival in the United States of America pursuant to the warrant of arrest.  The extradition treaty between the United States of America and the People's Republic of China had not been ratified.  Consequently, there was no power to continue the applicant’s detention although the Chief Investigator of the ICAC was able to speak to the applicant on the telephone.

19.He gave the applicant details of the offence.  The applicant said that he was unaware of the charge, which he then denied.  He was told that it would be in his interests to return voluntarily to Hong Kong in order to clear his name particularly in view of the fact that he could be arrested throughout the world.  The applicant indicated that he would consider the suggestion and respond to the request thereafter.

20.On 10 February 1998 the applicant did contact the officer concerned saying that he was calling from his home in Pakistan.  It appears that the applicant retired from employment in 1990.  He sought further information regarding the offence for which he was wanted.  Once again he was given a brief summary.  He requested that he be sent full details of the evidence against him together with supporting documents. The officer told him this was not possible, repeating that it would be in the applicant’s best interests to return to Hong Kong voluntarily.  The applicant said that he would take advice and consider whether to do this.

21.Nothing further was heard from the applicant.

22.During 2006 the applicant travelled to Canada to attend a family function.  After his arrival in Canada extradition proceedings were commenced against him.  Initially he indicated that he would contest the proceedings but subject to obtaining professional advice.  He obtained that advice whereupon he agreed to return voluntarily to Hong Kong which he did in late 2006.

23.The gravamen of the prosecution's submission under this heading is the applicant’s unwillingness to comply with the request of the ICAC to return to Hong Kong. 

24.In the period between December 1997 and his return to Hong Kong the applicant had travelled between Pakistan and Bangladesh on some nine occasions.  The prosecution submits that, as there is no extradition agreement with Bangladesh, these travels demonstrate consciousness on the part of the applicant of the necessity to confine his travels only to such countries: that may or may not be so.

25.The real relevance of those travels is that it is suggested on behalf of the applicant that a reason for his not returning to Hong Kong as requested by the ICAC was ill health which rendered travelling difficult.  That does not appear to be consistent with his known travelling during that period.

26.It is relevant to note that

·      the applicant was entitled to keep a low profile in the hope that the matter would not be pursued;

·      it was over nine years from the time of his unrelated departure from Hong Kong before the applicant even became aware of the potential proceedings against him;  and

·      the applicant had already left Hong Kong by the time the audited financial statements were actually published.

27.Whilst the applicant’s refusal to return would not be probative of guilt it plainly was a factor which the prosecuting authorities were entitled to take into account in weighing their suspicions and assessing the strength of the case against him.

28.The second factor in the applicant’s conduct upon which the prosecution relies is the applicant’s refusal to put his version of events to those investigating the charge. After his return to Hong Kong once he had received professional advice, he declined to respond to the charge when it was put to him and after being cautioned.  He was entitled to take that stance.

29.Flight from and avoidance of this jurisdiction and/or a failure or refusal to provide an explanation during the course of an investigation may give rise to suspicions on the part of the prosecuting authorities and may mislead the prosecuting authorities into thinking that the case is stronger than indeed it is.  Whether that is so will be fact sensitive.

Other factors

30.The prosecution relies on two further factors:  the strength of the case against the applicant and the circumstances in which he came to be acquitted.

31.The former of those two factors is unlikely to be of real assistance in matters such as this.  The difficulty which will inevitably arise whenever an application is made following upon an acquittal by virtue of the prosecution offering no evidence is that, whatever the provisions of section 54A of the Ordinance may say, the evidence will not have been tested in the presence of the judge.  It cannot be right simply to say that in these circumstances the court must assume the prosecution evidence, from the statements, to be true.

32.It will be a particularly difficult exercise where, on the face of it, as here, there is little or no real challenge to the facts, other than perhaps for tactical purposes, with the defence relating essentially to the state of mind of the accused person in which the outcome of the trial would largely be determined by an assessment of credibility of the witnesses.

33.The latter factor is that the applicant was acquitted in this matter due to the absence of a vital witness.  That absence was said to be as a result of Kapoor’s ill health which necessitated surgery, coincidentally on the very day upon which this application made: the prosecution was informed by Kapoor that he did not know when or if he would be in a position to travel to Hong Kong in the future.

34.The prosecution points out, with justification, that Kapoor would have been available on an earlier date when the trial could have proceeded but for the applicant avoiding Hong Kong.

Extradition costs

35.The applicant seeks an order that any order for costs in his favour  include the costs occasioned by the extradition proceedings.  In this connection he relies upon the decision of the Court of Appeal in HKSAR v LUI Kin-hong, Jerry CACC378/1998. 

36.The accused in that matter appealed an order for costs awarded against him in favour of the prosecution pursuant to the provisions of sec. 72(1) of the Ordinance.  The Court of Appeal considered whether costs occasioned by extradition proceedings were part of the prosecution and conviction process.  That section is couched in substantially the same terms as sec. 73A.

37.The Court said

64.The argument here was that the extradition proceedings in the USA were not part of the "prosecution and conviction" process described in section 72(1). The purpose of those extradition proceedings were, it is said, merely to determine whether the Applicant was or was not to be extradited. The further point was made that by virtue of the terms of the relevant bilateral agreement, the costs of the extradition fall, in any event, upon the authorities in the requested jurisdiction, namely, the USA.

65. As a matter of principle, it is difficult to see why the cost of bringing back to the jurisdiction for trial a defendant who seeks to avoid trial and is then convicted is a cost which should fall on the public purse. The question, again, is whether these costs fall outside the meaning of the phrase "incurred in and about the prosecution and conviction for the offence."

66. Extradition proceedings are proceedings lodged at the request of the executive of a requesting jurisdiction, after the issue of a warrant of arrest, in an attempt to secure the presence at committal and trial of a fugitive offender. It is a step, a vital step, to ensure that the prosecution might be carried to a successful conclusion. The fugitive's return is requested not for some investigation preliminary to a decision whether to prosecute, not to "assist the authorities", nor for some ill-defined or generic offence; but to answer for the very crimes in respect of which the information has been laid and for which, by the laying of the information and the issue of the arrest warrant, the prosecution has already been launched. The papers sent to the requested jurisdiction will contain the testimony in support of that specific prosecution, testimony sent to a jurisdiction, in the present case, which will determine whether there is probable cause shown in respect of the specific offences of which the fugitive stands accused, and upon his return, Hong Kong's domestic law precludes trial in respect of any offence other than those upon which his return has been granted. We do not, in the circumstances, see why this process is a process other than one which is in or about the prosecution and conviction of the (alleged) offender.

38.It would follow, therefore, that in an appropriate case it would be proper for a court to order that the prosecution pay an accused person’s costs in connection with extradition proceedings.  Again, whether a court is justified in exercising its discretion to deprive an accused person of such costs will be a fact sensitive decision.

39.Although it has been necessary to consider each of the arguments advanced by the prosecution individually, it is against the factual matrix as a whole which my decision must be made. 

Order

40.Applying the tests which I have set out, the facts in this matter are not such as, in my judgment, would justify depriving the applicant of all of his costs. 

41.I am satisfied that I should exercise my discretion in favour of the prosecution in so far as the costs of the extradition proceedings are concerned.  Although the applicant eventually did not contest the extradition proceedings themselves his conduct was such as to bring suspicion on himself and to mislead the ICAC into thinking its case against him was stronger than it actually may have been and, further, to render those very proceedings necessary.

42.As a result the prosecution is to pay the applicant’s taxed costs, such costs to exclude any work done or services rendered in connection with or relating to the extradition proceedings or prior to his arrival in Hong Kong consequent upon those proceedings.

Mr Richard Turnbull, Senior Assistant Director of Public Prosecutions of the Department of Justice, for the HKSAR

Mr Adrian Bell, instructed by M/s Boase, Collins and Cohen for the applicant.