The Secretary for Justice v. James Henry Ting

cacv 331/2007
and
CACV 332/2007

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 331 of 2007

(on appeal from HCCW NO. 49 of 2000)

______________________

______________________

BETWEEN

______________________

AND

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 332 of 2007

(on appeal from HCCW NO. 50 of 2000)

______________________

______________________

BETWEEN

______________________

Before : Hon Rogers VP in Chambers

Date of Hearing : 2 October 2007

Date of Decision : 2 October 2007

______________________

D E C I S I O N

______________________

1.This is an application for a stay pending appeal of the two orders which were made by Kwan J on 25 September, which was only last week.  The matter before the judge below was a question of two appeals from the master.  The master had ordered the release of transcripts of examinations which had been taken under section 221 of the Companies Ordinance.

2.The two companies involved, Akai Holdings Limited and Kong Wah Holdings Limited, have, and their liquidations have, been the subject of various matters before this and other courts for some time.  The Companies were ordered to be wound up as long ago as August 2000.  It might be said, without any hyperbole, that the collapse of the two Companies was somewhat staggering.  The group appears to have had liabilities in excess of a billion US dollars, whereas only a few years earlier, it had a market capitalisation of 4.5 billion US dollars.

3.I wish to say no more about it, other than the fact that the master before whom the examination took place, said this in his judgment:

“	There was more than a whiff of fraudulent misconduct behind the collapse of the Companies which Mr Ting headed.  The massive insolvency did not result from mere financial incompetence on the part of those who controlled and managed the Company.”

4.That would appear to have been evident from the brief facts which I have outlined, but the fact that it was stated by the master before whom the examination was taken, reinforces the matter.  To my mind, there is grave public interest involved in this case.  It goes beyond the creditors; it goes to the standing and reputation of Hong Kong’s financial systems and the proper regulation thereof.  In this case, it behoves those who are responsible for investigating the matters to make sure that every possible investigation is undertaken.

5.Both the master before whom the examination took place and the judge below ordered the release of the transcripts to the Department of Justice.  The order read that: (1) the transcripts should be released to the Department of Justice; (2) the transcripts should be kept confidential and the Department of Justice shall not disclose the court transcripts to any third party other than to the CCB; (3) the Department of Justice cannot use the court transcripts in other proceedings; (4) the court transcripts shall be used by the CCB only in matters arising out of the investigation of Kong Wah Holdings Limited and Akai Holdings Limited (“the Companies”); (5) the costs of the appeal (and before the master) be paid by the Appellant to the Department of Justice and the Liquidators of the Companies (“the Liquidators”) (including all costs reserved).

6.The effect, therefore, of the order is that the transcripts can be released simply to the Department of Justice.  They can be shown to the Commercial Crimes Bureau, but it must be emphasised that these transcripts are to be kept confidential.  The Commercial Crimes Bureau cannot therefore show the transcripts to any other party.  All it can do is use the information contained in those transcripts for the purposes of their investigations into matters arising out of the collapse of the two Companies.  What those investigations are, are not for this Court to surmise.  It may be thought that there would be other people involved, other than Mr Ting, who is the person who has been the subject of the examination and who is seeking the stay pending his appeal.

7.I turn therefore to the grounds upon which this application for stay is made.  In short, the application is put upon the basis that unless there is a stay of the order pending this appeal, the appeal will be rendered nugatory.  My attention has been drawn to a decision of Ma J, as he then was, back in July 2002 in Wenden Engineering Service Company Limited v Lee Shing Yue Construction Company Limited, HCCT90/1999.  He there quoted from what he said in Star Play Development Limited v Bess Fashion Management Company Limited, an unreported decision of 7 June of that year, HCA4726/2001.  At paragraph 9(5), he said: 

“	How relevant is the court’s consideration of the merits or strength of the appeal?  In my view, while it is impractical and even undesirable for the court in dealing with an application for a stay of execution, to go deeply into the merits and strengths of an appeal, it must however form a preliminary view of these aspects.  This I believe to be an inevitable consequence of the starting point I have earlier mentioned in referring to Order 59, rule 13(1).
	(6)	The existence of merely an arguable appeal cannot by itself amount to sufficient reason to justify a stay.  It can be put in this way:  the existence of an arguable appeal (that is, one with reasonable prospects of success) is the minimum requirement before a court would even consider granting a stay.  In other words, however exceptional the circumstances may be otherwise justifying a stay of execution, if the court is not convinced that there exist arguable grounds of appeal, no stay will be granted.”

8.Admittedly, I have only had since last week to consider the matter, but I have considered the grounds of appeal and I have also considered the arguments that have been raised for and against those.  I have considered the judgments both of the master and the judge below.  I have to say - and I say no more because this appeal is coming up - that I do not see that there is any likelihood of this appeal being allowed.  It has been strongly urged upon me that there are merits to this appeal, particularly on the constitutional ground.  I say no more about the matter but, in my view, the grounds that are put forward and the arguments put forward are not sufficient for me to consider that, given the safeguards which the judge has imposed, the stay should be ordered.

9.In coming to my conclusion, I consider that one of the relevant factors is also the fact that it is now just over seven years since these Companies were put into liquidation and there is, in my view, a strong public interest that all investigations are now concluded as quickly as possible.  It is already a very long time and to wait until this appeal comes on before the matter is taken any further, in my view, is wrong and it would hamper the proper investigations which, in my view, have to be made, from being made.

10.I therefore decline to grant a stay in this case.

(Submissions on costs)

11.Costs in the appeal.

Mr R G Turnbull SADPP, of the Department of Justice, for the Applicant/Respondent

Mr Clive Grossman SC, instructed by Messrs Andrew W Y Ng & Co., for the Respondent/Appellant

Mr Nick Gall, of Messrs Laracy Gall, for the Liquidators