Re Koon Wing Yee

HCAL 145/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 145 OF 2008

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Before: Hon A Cheung J in Court

Date of Hearing: 21 November 2008

Date of Judgment: 3 December 2008

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J U D G M E N T

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Application for leave

1.This is yet another application by the applicant to challenge a notice issued under s 183(1) of the Securities and Futures Ordinance (Cap 571) requiring the applicant to attend an interview and to answer questions that an investigator appointed under s 182(1) of the Ordinance may raise with the applicant in connection with suspected market misconduct or offences under ss 274, 275, 278, 295, 296 and 299 of the Ordinance.

Background

2.This is already the third attempt by the applicant to challenge a s 183(1) notice.  The previous two attempts were both unsuccessful.  In the first attempt (HCAL 7/2007) the applicant sought to challenge a similar notice (relating to the same subject matter of investigation) on the ground that attending the interview required by the notice would lead to the removal of the right to silence in a criminal trial and thus a breach of art 11(2)(g) of the Hong Kong Bill of Rights in relation to proceedings before the Market Misconduct Tribunal under Part XIII of the Ordinance.  The application for leave proceeded on the (erroneous) basis that proceedings before the Market Misconduct Tribunal would be criminal in nature.  Leave was refused by Saunders J and the applicant’s appeal was dismissed by the Court of Appeal (CACV 369/2007), on both occasions on the ground that as no proceedings before the Market Misconduct Tribunal were on foot and there might never be any, the challenge based on art 11(2)(g) was simply premature. 

3.The Court of Appeal subsequently refused the applicant’s application for leave to appeal to the Court of Appeal.  The applicant’s application before the Court of Final Appeal for leave to appeal is still pending (FAMV 53/2008).

4.The second attempt made by the applicant was directed against a notice dated 17 October 2008 (also relating to the same subject matter of investigation) requiring him to attend an interview on 3 November 2008 (HCAL 134/2008).  The applicant, this time, proceeded on the basis that proceedings in the Market Misconduct Tribunal would be civil in nature (which is correct – see Chau Chin Hung v Market Misconduct Tribunal, HCAL 123/2007, 124/2007 and 22/2008, 22 September 2008).  He contended that requiring him to attend the interview and to answer questions even though to do so might tend to incriminate him (as is required under s 184(4)) would infringe his right to a fair hearing guaranteed under art 10 of the Bill of Rights.  The application for leave was again unsuccessful, for the reason that the right to a fair hearing would not be engaged unless and until there were proceedings before the Market Misconduct Tribunal, and there were as yet none.  The Court found the application indistinguishable from the binding decision of the Court of Appeal in the earlier attempt.

Present arguments

5.In his latest attempt, which relates to a notice dated 7 November 2008, the applicant argues that s 184(4) is unconstitutional as it purports to abrogate his privilege against self-incrimination.  He argues that the privilege is an important common law right preserved by art 8 of the Basic Law.  It is also consistent with art 14 of the Bill of Rights and abrogation of that privilege is inconsistent with that article.  The applicant contends that the ‘direct use prohibition’ under s 187(2) of the Ordinance which has been enacted to replace the privilege against self-incrimination is ‘unjustifiably narrow and ineffectual’ in that it does not prevent the ‘derivative use’ of the potentially incriminating answers obtained in the interview in any future criminal proceedings, under Part XIV of the Ordinance.

6.The applicant argues that his challenge this time is not premature, hypothetical or academic because in the context of interference with his privacy, his privacy is invaded when he is compelled, against his wishes, to give an answer that might incriminate him.

Preliminary observations

7.Although the various attempts to challenge notices issued under s 183(1) relate to different notices, the notices all concern the same subject matter of investigation.  I have serious reservations as to whether the applicant’s mounting of challenges based on different grounds on a piecemeal basis is not an abuse of the process of the court, in that generally speaking, a litigant is expected and indeed required to raise in a piece of litigation all issues that could and should be raised in one go.

8.Secondly, I also doubt whether the present application is not premature in the sense that unless and until the investigator asks a question at the interview, the answering of which the applicant claims might tend to incriminate him, no question of the constitutionality of s 184(4) arises.

9.A fortiori, there is no question of staying the notice so as not to require the applicant to attend the interview and to answer questions generally, as the applicant asks this Court to do by way of relief.

10.But most importantly, in my view, the proposed challenge is unarguable.

Article 8 of the Basic Law

11.It is undoubtedly true, as has been pointed out by Ribeiro PJ in HKSAR v Lee Ming Tee (2001) 4 HKCFAR 133, 156D-E, that the privilege against self-incrimination at common law is a deep-rooted privilege, having been established in England since at least the 16^th century.  However, it is equally beyond doubt, leaving aside for the moment any possible consequences of the Bill of Rights, that such common law right can be overridden by legislation: Lee Ming Tee at p 156F/G.

12.Thus, leaving aside any possible consequences of the Bill of Rights, the legislature is fully entitled to remove the common law privilege against self-incrimination by s 184(4) and replace it with a direct use prohibition in criminal proceedings under s 187(2).

13.Nothing in art 8 of the Basic Law prevents the legislature from so doing.  Quite to the contrary, art 8 specifically provides for the change of the common law previously in force in Hong Kong prior to 1997 by ‘any amendment by the legislature of the Hong Kong Special Administrative Region’. 

14.There is nothing in the applicant’s argument based on art 8 of the Basic Law.  To be fair to Mr Swaine who appears for the applicant at the hearing, he does not rely on art 8.

Art 14 of the Hong Kong Bill of Rights

15.As regards art 14 of the Hong Kong Bill of Rights, it provides that no one shall be subjected to ‘arbitrary or unlawful interference with his privacy, family, home or correspondence, nor to unlawful attacks on his honour and reputation’ and everyone has ‘the right to the protection of the law against such interference or attacks’.

16.Art 14 is based on art 17 of the International Covenant on Civil and Political Rights (ICCPR).  On a plain reading, it has nothing to do with the right against self-incrimination, which is covered specifically by and in terms of the ‘testimonial immunity’ guaranteed under art 14(3)(g) of the ICCPR which is equivalent to art 11(2)(g) of the Hong Kong Bill of Rights (see Lee Ming Tee at p 171H to I), and the right to a ‘fair hearing’ under art 14(1) of the ICCPR (ie art 10 of the Hong Kong Bill of Rights).  Both of these articles have been relied on by the applicant in his two previous premature attempts to challenge a s 183(1) notice – no substantive decisions have yet been made on the contentions raised.

17.That art 14 of the Hong Kong Bill of Rights (ie art 17 of the ICCPR) has nothing to do with the privilege against self-incrimination appears to be confirmed by leading textbooks on the ICCPR, such as Manfred Nowak, UN Covenant on Civil and Political Rights: CCPR Commentary (2^nd revised ed) 344 et seq and Joseph, Schultz & Castan, The International Covenant on Civil and Political Rights: Cases, Materials and Commentary (2^nd ed) 449 et seq, which all discuss the right against self-incrimination in the context of art 14 of the ICCPR.  Not a single reference to art 17 of the ICCPR can be found.

Lee Kwok-hung

18.At the hearing, however, Mr Swaine managed to cite to the Court the case of Ex parte Lee Kwok-hung, which is reported in [1993] 2 HKLR 51.  That case concerned a notice served on the appellant by the Securities and Futures Commission under s 33(4) of the Securities and Futures Commission Ordinance (Cap 24) (now repealed) requiring him to attend an interview relating to suspected insider dealing activities.  S 33(6) removed the interviewee’s privilege against self-incrimination.  The appellant therefore challenged the constitutionality of s 33(4) on the basis of art 5 (protecting liberty and security of person) as well as art 14 of the Bill of Rights.  In relation to art 14, the appellant argued that the notice was unconstitutional because at the interview, he would be required to answer questions that might potentially incriminate him in any future proceedings, including criminal proceedings.

19.Litton JA (as he then was) took the view that the interference with privacy was not ‘arbitrary’ as it was done pursuant to law (p 58).  Nor was it ‘unlawful’ in the sense that it contravened the standards of ‘universal concepts of justice’, because after conducting a ‘balancing exercise’, his Lordship found that the interests of society to investigate into suspected insider dealing activities prevailed over the interests of the individual (pp 60-61).

20.Sir Derek Cons VP (as he then was) took the view that there was no violation or threatened violation of art 14 at all.  This was because a person who trades in shares publicly listed on the official market must know that he is entering an area of commerce that is strictly regulated for the benefit of the community as a whole and of those others who also trade therein.  Vis-à-vis the authorities responsible for that regulation he cannot maintain that his trading is a private matter.  In other words, no ‘privacy’ is involved.  See p 62.

21.However, as a fallback position, the Vice President agreed that the interference was not ‘unlawful’ but primarily on the ground that it was not against the domestic legislation and common law (pp 62-63).  But if the right test for ‘unlawfulness’ was that favoured by Litton JA, his Lordship also agreed that the balance came down in favour of upholding the society’s interests in investigating into suspected insider dealing activities.

22.The third member of the Court, Wong J (as he then was) did not express any separate views but was content to agree with the conclusions of the other two.

Discussion on art 14

23.In my view, this case does not assist the applicant at all.

24.Even assuming that art 14 is potentially engaged, and even further assuming that a balancing/proportionality test has to be applied, as to which see the much more recent discussion on this topic by Hartmann J (as he then was) in The Democratic Party v The Secretary for Justice, HCAL 84/2006 (21 May 2007) paras 54-65, any balancing exercise must, in my view, result in upholding the interests of the society.

25.It must be noted that in Lee Kwok-hung, the Court of Appeal did not consider the implications of arts 10 or 11(2)(g) of the Bill of Rights, which both have material relevance to the privilege against self-incrimination, as have been pointed out above.  Whilst art 11(2)(g) concerns only a testimonial immunity, art 10 goes further and guarantees a person’s right to a fair hearing – including a criminal hearing.  And that right includes the right against self-incrimination.  Such a right is not absolute and any restriction is subject to the proportionality test.  See Lee Ming Tee, supra, at pp 172-179.  

26.In other words, an interviewee who has given potentially incriminating answers against his wishes in an interview may challenge the use of the questions and answers when is charged in criminal proceedings subsequently.  So far as direct use is concerned, the matter is covered entirely by s 187(2) of the Ordinance which prohibits such use.

27.So far as derivative use is concerned, he can, if and when faced with criminal proceedings subsequently, challenge such use on the basis of the right to a fair hearing guaranteed under art 10 of the Bill of Rights, in which case the proportionality test will have to be applied.  (I say nothing about the likely outcome of such a challenge.)

28.In my view, this is very important to whatever balancing exercise or proportionality test that one may have to apply in relation to art 14.  For it must be remembered that the way the applicant seeks to overcome the premature argument that defeated his previous attempts based on arts 10 and 11(2)(g) of the Bill of Rights is that even though there are now no criminal proceedings on foot, his privacy is being interfered with here and now at the interview, and whether such interference is justified or not is a matter of conducting a balancing exercise or applying the proportionality test, which, counsel submits, requires a full investigation at the substantive hearing (and thus leave has to be granted).

29.But taking a step back, this is a startling proposition.  The applicant, like any interviewee, may never be charged in any criminal proceedings at the end of the day.  If the applicant is right, and s 184(4) is struck down pursuant to art 14 because it might eventually lead to the derivative use of self-incriminating answers against an interviewee in subsequent criminal proceedings, it would mean that nobody, regardless of whether he is subsequently charged in criminal proceedings or not, can be asked questions that he claims might incriminate him in some future criminal proceedings (if any).

30.This can hardly be justified as a general proposition, if the person is never charged in any subsequent criminal proceedings.

31.But what about the person who is charged in subsequent criminal proceedings?  How is the proportionality test or balancing exercise to be conducted in relation to his interests, as against the interests of the society?  Is there not an arguable case here?

32.In my view, the answer is ‘no’.  This is because if such an interviewee is eventually charged in criminal proceedings, he can then object to the derivative use of his incriminating answers in such criminal proceedings by relying on art 10 of the Bill of Rights, and the objection will have to be resolved by the application of the proportionality test.  (Indeed that was essentially why his previous two applications were held to be premature.)

33.His interests will not be compromised at all by his only raising the objection to such use then or only by his raising it in terms of art 10 rather than art 14, in such eventuality.

34.Therefore in my view, the balancing exercise or proportionality test, when used in relation to art 14 at the time of the interview, is capable of yielding one answer only, namely, that any interference with the privacy of the interviewee is justified.  If the interviewee is never subsequently charged in any criminal proceedings, the interference with his privacy must be justified (Mr Swine has not contended otherwise).  If, on the other hand, he is subsequently charged in criminal proceedings, he can raise his objection to the derivative use of the incriminating answers there and then under art 10.  

35.Whether an interviewee will eventually be charged in criminal proceedings is an unknown future event that cannot be predicted at the time of interview.  His ability to challenge any derivative use of incriminating answers in any future criminal proceedings against him is sufficiently protected under art 10 of the Bill of Rights.  That being the case, there can be no further concern about compelling an interviewee to answer potentially incriminating questions at the interview, and advancement of the interests of the society in investigating into suspected insider dealing activities therefore becomes the only relevant concern at the interview stage when conducting the balancing exercise or proportionality test.  In those circumstances, there can be only one answer, namely, that requiring an interviewee to answer potentially incriminating questions should be allowed for the sake of thorough investigation. 

36.In my view, this is the proper way art 14 works in the context of a s 183(1) interview, without compromising the society’s interests in investigating into suspected insider dealing activities.

37.For these reasons, the applicant’s argument based on art 14 of the Hong Kong Bill of Rights must also be rejected.

Outcome

38.The present application is dismissed, with a costs order nisi that there be no order as to costs.  The putative respondent took the initiative to attend the oral hearing because it wished to draw the Court’s attention to Lee Ming Tee, which was not specifically mentioned in the Form 86A.  But the case was extensively referred to in the previous court judgments pertaining to the applicant’s first two attempts and the Court’s attention had been drawn to these judgments in the papers filed.  In any event, a single letter could have alerted the Court to the case.  The oral hearing was dominated by discussion on Lee Kwok-hung, which did not feature in the papers.  Mr Bell for the putative respondent was, understandably, unable to offer much assistance to the Court on that case. 

39.I have already sounded a warning that the bringing of repeated challenges based on different grounds that could and should have been raised together in one go against the constitutionality of a s 183(1) notice could amount to an abuse of the process of the court, and if repeated in future, this could lead to the making of an appropriate restricted proceedings order against the applicant.  This is particularly so when I do have doubts as to whether the present application for leave could not have been made earlier, thus allowing the Court more time to hold an oral hearing before the scheduled interview, which, in the event, had to be postponed.  But as I have dismissed the application for leave, I would say no more about this aspect of the case.

Mr John JE Swaine, instructed by William Sin & So, for the applicant

Mr Adrian Bell, for the putative respondent (the Securities and Futures Commission)