Koon Wing Yee v. The Securities and Futures Commission

CACV 367/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 367 OF 2008

(ON APPEAL FROM HCAL 145 OF 2008)

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BETWEEN

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REASONS FOR JUDGMENT

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Before: Hon. Tang V-P and Yuen JA in Court

Date of hearing and judgment: 3 April 2009

Date of reasons for judgment: 7 May 2009

Hon. Tang V-P:

1.I agree with the judgment of Yuen JA.

Hon. Yuen JA:

2.This is an appeal by Koon Wing Yee from a judgment of Andrew Cheung J given on 3 December 2008 refusing leave for judicial review.  At the conclusion of the hearing, we dismissed the appeal with costs.  At the same time we dismissed his application for a stay of execution which was dependent upon the success of the appeal.  My reasons appear below.  

3.The matter arose out of a notice issued by the Securities and Futures Commissions (“SFC”) on 7 November 2008 requiring Koon to attend for an interview under s.183(1) Securities and Futures Ordinance Cap. 571 (“SFO”) in connection with an investigation into suspected market misconduct or offences under various sections of the SFO. 

4.Koon asserts that as he would be compelled to answer questions at the interview, the process would infringe his human rights.  He does not dispute that s.187(2) SFO provides him with immunity against self-incrimination in criminal proceedings against him if he so claims before giving the answer (the “direct use” prohibition), but he says that derivative use may be made of his answers to lead to evidence which could be used against him in criminal proceedings.

5.Koon has in fact received a number of such notices in the same investigation and he has sought in various previous proceedings to avoid attending interviews essentially on the same ground - that there would be an abrogation of the privilege against self-incrimination.  It is necessary to refer to those proceedings as they have been relied upon in Koon’s submissions.

HCAL 7/2007 (CACV 369/2007) 

6.In HCAL 7/2007, Koon sought to rely on articles 11(2)(g) (briefly, testimonial privilege), 10 (right to fair trial) and 14 (right of privacy) of the Hong Kong Bill of Rights (“BOR”).  Koon advanced that application on the basis that proceedings in the Market Misconduct Tribunal would be criminal in nature. 

7.Saunders J dismissed those proceedings on 2 November 2007 on the ground that the application was premature, as the CFA had held in HKSAR v Lee Ming Tee (2001) 4 HKCFAR 133 that testimonial privilege was not engaged until a criminal trial was in progress and no criminal charges have been brought.

8.That decision was upheld by this court (Rogers V-P, Le Pichon JA and Stone J) in CACV 369/2007 on 29 July 2008.  Its reasons were handed down on 3 September 2008.

9.After the Court of Appeal judgment, two notices were issued by the SFC to Koon, one on 17 October 2008 and one on 7 November 2008. 

HCAL 134/2008

10.The October notice was made the subject of HCAL 134/2008, in which Koon sought protection under article 10 BOR (right to fair trial).  This time, Koon advanced his application on the basis that proceedings in the Market Misconduct Tribunal would be civil in nature.  The application was dismissed by Andrew Cheung J on 31 October 2008.  There is no appeal from that decision.

HCAL 145/2008 (CACV 367/2008)

11.The November notice was made the subject of the present proceedings in which Koon sought protection under article 8 of the Basic Law (maintenance of common law) and article 14 BOR (right to privacy).  Koon’s application proceeded on the basis that derivative use of answers could lead to the risk of criminal prosecution in respect of the conduct under investigation.

12.The application was dismissed by Andrew Cheung J on 3 December 2008 and is the subject of the present appeal.

FAMV 53/2008

13.Between the time of Andrew Cheung J’s judgment and the hearing of this appeal, the Appeal Committee of the Court of Final Appeal (the Chief Justice, Bokhary and Ribeiro PJJ) determined Koon’s application for leave to appeal CACV 369/2007 on 19 February 2009.  Koon’s counsel has placed much emphasis on that part of the Determination where Ribeiro PJ referred to the principle stated in Lee Ming Tee that “in the criminal context, a broader privilege against self-incrimination may be deduced as an integral part of the right to a fair trial protected by Article 10 of the Bill of Rights  ... which extends to answers compulsorily obtained before the start of criminal proceedings” (paragraph 5).  In other words, article 10 BOR provides not only testimonial privilege at trial, but also rights before a criminal trial is commenced.  Accordingly, Saunders J and the Court of Appeal fell into error when they held that the challenge under article 10 BOR was premature (in contradistinction to the challenge under article 11(2)(g) BOR in respect of testimonial privilege). 

This appeal

14.Koon argued before this court that as Andrew Cheung J had also referred to prematurity (paragraph 8), his order was also made in error.  Koon therefore submitted that he is entitled to challenge the interview process by reason of this privilege which is broader (and as such, applies earlier) than testimonial privilege. 

Discussion

15.In my view it is important to note that in the Determination, the Appeal Committee went on to consider the “critical question ... whether it is reasonably arguable that the applicant is entitled to invoke the broader privilege based on article 10" (paragraph 7).  This is actually what Koon is trying to argue on this appeal.  The Appeal Committee noted that the broader privilege under article 10 “arises as an integral part of the right to a fair criminal trial” (emphasis added), and concluded that the privilege was not abrogated for two reasons: (i) “since section 187(2) renders answers to the SFC’s questions inadmissible for direct use in criminal proceedings in a court of law, the applicant faces no risk of self-incrimination in respect of any such court procedure”, and (ii) proceedings in the Market Misconduct Tribunal were not criminal, but civil in nature.  The Appeal Committee refused leave to appeal on the grounds that it was not reasonably arguable that the broader privilege could be invoked to challenge the interview process.

16.Although the Appeal Committee referred to direct use, it is clear from the Determination that it did not consider that derivative use entitled Koon to invoke the broader privilege either.  Derivative use had been argued in those proceedings (see paragraph 16 of Saunders J’s judgment) and the Court of Final Appeal had decided in Lee Ming Tee that a statutory prohibition of direct use inferentially permitted derivative use (p.161) and held that “a derivative use immunity does not exist as a free-standing common law concept or doctrine” (p.170).

17.Accordingly I do not see how it can be said that the Appeal Committee’s Determination assists Koon.  On the contrary, the Determination expressly held that Koon’s argument of a broader privilege based on article 10 was not reasonably arguable.  Koon’s reliance on article 8 of the Basic Law for the maintenance of the common law does not assist him in light of the passage at p.170 I have referred to in the preceding paragraph.

18.In any event even if the Appeal Committee’s Determination on article 10 BOR were to be read as being restricted to direct use, the present application to prohibit blanket derivative use cannot succeed.  The question of the fairness of using evidence obtained from independent sources facilitated by answers compulsorily given cannot be answered in a vacuum.  In Lee Ming Tee the Court of Final Appeal had held that “the impact of ... derivatively using compulsorily obtained evidence on the fairness of a trial and on the presumption of innocence must be assessed, not in absolute terms, but by balancing the competing public interests, and not by focusing on one aspect, such as the absence of any derivative use immunity, in isolation, but by taking the trial process as a whole” (p.179E-F). 

19.As for Koon’s reference to article 14 BOR (right of privacy), this court is bound by the judgment of the Court of Appeal (Sir Derek Cons V-P, Litton JA and Wong J) in Ex parte Lee Kwok Hung [1993] 2 HKLR 51 which held that similar provisions under the SFO were not inconsistent with the rights of privacy.  In any event, I would hold that the right to privacy has nothing to do with the privilege against self-incrimination which is protected by other provisions in the Bill of Rights and indeed Sir John has not sought to press this article as a self-contained argument.    

20.In the circumstances, as Koon had no reasonably arguable case with realistic prospects of success, the judge’s dismissal of his application for leave was correct and the appeal was dismissed with costs.  As Koon’s application for a stay was consequential upon the success of his appeal, that application was also dismissed with costs. 

Sir John Swaine SC instructed by William Sin & So for the Applicant (Appellant)

Mr Adrian Bell instructed by the Securities and Futures Commission for the Respondent (Respondent)