Secretary for Justice v. Chan Thao Phoumy and Another

HCMP 1895/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1895 OF 2007

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BETWEEN

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Before: Hon Andrew Cheung J in Chambers

Date of Hearing: 15 November 2010

Date of Judgment: 15 November 2010

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J U D G M E N T

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1.This hearing has been scheduled to deal with the registration of an external confiscation order sought by the Secretary for Justice against the two defendants in relation to various assets and moneys in their respective names.

2.The 1st defendant has been sentenced to life imprisonment for drug trafficking on the Mainland, and, for obvious reasons, he has not appeared in these proceedings to resist the application for registration and enforcement.

3.On the other hand, his wife, the 2nd defendant, who has been acquitted in the relevant criminal proceedings on the Mainland, has been defending the present proceedings.  In particular, it is her case that the moneys and assets in her name which the intended registration of the external confiscation order made by the court on the Mainland seeks to cover belong to her beneficially.

4.The application for registration and the opposition to registration raise various issues of law and fact, including, amongst other things, issues concerning PRC law. 

5.Expert evidence has been filed, and the Court has directed that live evidence from the experts be heard at the present hearing. However, the Court’s attention was drawn this morning to the fact that the 2nd defendant is charged with a number of laundering offences in the District Court.  The subject matters of those charges overlap, or appear to overlap to a substantial degree, with the moneys and assets sought to be covered by the registration of the external confiscation order sought in the present proceedings.

6.The Court has been informed that originally, the trial before the District Court was scheduled to take place in June this year. However, due to the question of funding, that trial has been put back to December this year.  It has been set down for 20 days.

7.Mr Clive Grossman SC, Mr Y L Cheung with him, appearing for the 2^nd defendant, has therefore raised with the Court certain concerns on behalf of their client.  After hearing submissions from the parties, those concerns may be summarised thus. First, there is a possibility of the District Court making a finding of fact in favour of the 2nd defendant in the criminal case that goes contrary to or is inconsistent with the finding or purported finding made by the PRC court underpinning the external confiscation order in question.  Of course, in that event, most probably the 2nd defendant would be acquitted of all or at least some of the laundering charges that she now faces in the District Court.

8.In any event, the thrust of the point is that in that event, the Court in these proceedings might need to take that (hypothetical) finding of the District Court into account: (i) in evaluating the evidence required to be considered by the Court in determining an application for registration or enforcement of an external confiscation order; and (ii) in deciding whether it is or is not “contrary to the interests of justice” to exercise the Court’s discretion to order the enforcement of such an order.

9.In this regard, one notes that the certificate required to be filed pursuant to paragraph 5 of the Drug Trafficking (Recovery of Proceeds) (Designated Countries and Territories) Order (Cap 405A) is not stated by that Order to be final or to constitute conclusive evidence of the facts so stated in the certificate.

10.The Court’s provisional view – the word “provisional” is emphasised so as to avoid any pre-judgment of any relevant argument – is that the hypothetical finding of the District Court that the Court has described might well be admissible as evidence in relation to the matters required to be covered by the certificate filed under paragraph 5[1], in which event it would be a matter of weighing up the entire evidence available to decide whether the requirements for applying for registration laid down in the statute have been complied with fully or not.

11.In any event, section 29(1)(c) of the Drug Trafficking (Recovery of Proceeds) Ordinance (Cap 405) gives the Court of First Instance a discretion not to register an external confiscation order if it is of the opinion that enforcing the order in Hong Kong would be “contrary to the interests of justice”.

12.It is arguable, and the Court would not like to put it higher than that at this stage, that the hypothetical finding by the District Court would be relevant to the Court’s determination of whether the enforcement of the external confiscation order would or would not be contrary to the interests of justice.

13.All this boils down to this.  That is to say, this Court may not be able to fully dispose of the question of whether to register the external confiscation order at the present hearing without knowing in advance the outcome of the District Court prosecution.  That is the first matter of concern.

14.The second matter of concern is of a lesser magnitude of significance.  It is this.  If the 2nd defendant were to be convicted of the laundering charges in the District Court, the assets and moneys involved would most likely be liable to be confiscated under a domestic confiscation order in favour of the SAR Government.  From at least the perspective of the 2nd defendant, if that were to happen, it would render the success or otherwise of her opposition to the application for registration of the external confiscation order in these proceedings quite academic.  That is looking at it from her perspective.[2]

15.The Court fully recognises that apart from her assets and moneys, the present application also concerns those in the name of the 1st defendant, who is, of course, not involved in the District Court proceedings.  Moreover, insofar as the moneys and assets involved in the present proceedings that are under the name of the 2nd defendant are not covered by the criminal charges in the District Court, they do have, as it were, an independent life of their own requiring the Court’s determination in these proceedings.

16.At the end of the day, what all this raises is a question of case management.  That is to say, whether the Court should nonetheless proceed with the scheduled hearing.

17.It has been submitted on behalf of the Secretary for Justice by Mr Horace Wong SC, Mr Clark Wang with him, that the Court should take that course and deal with as many issues as may be possible at the present hearing, leaving those issues that would be dependent on the outcome of the District Court proceedings to be dealt with later by the Court.  In the meantime, the Court would simply adjourn part-heard the proceedings after hearing all those issues that can be heard.

18.Mr Grossman notably has not made any application for an adjournment, but it is plain from his submissions that he is in favour of the Court taking such a course of its own motion.  He points out that the scheduled trial before the District Court is a long one; there is no guarantee as to when the District Court would render its judgment; and, depending on the outcome, there could be appeals, and so forth.  He points out the obvious fact that it would be highly undesirable for the Court to hear partly an application and then to adjourn it for an indefinite period of time, which could be many months.

19.During argument, the Court pointed out that the hearing dates fixed may be regarded as milestone dates under the Civil Justice Reform (CJR) provisions.  In any event, the Court must bear in mind the underlying objectives set out in the Rules and the Court’s own case management powers newly given under the CJR.

20.The Court has borne in mind all the submissions, and in particular the various matters urged upon the Court by counsel.  Specifically, the Court can see the attraction of the course proposed by Mr Wong, particularly when all the parties, and the Court as well, have already spent so much time and effort in preparing for the hearing and the experts are in Court, ready to give evidence at any time.

21.On the other hand, the Court is struck by the very undesirable scenario painted by Mr Grossman which it has described.  It would be highly undesirable for the Court to deal with the matter on a part‑heard basis and to have to adjourn the hearing of the remainder of the issues for an indefinite period of time.  In the present case, the delay could be many months.

22.In a normal case, costs would be a significant factor to be borne in mind even in this post-CJR era.  However, given the parties involved in the present case, and given the stance of the 2nd defendant herself in favouring a general adjournment of the hearing, the significance of the question of costs has substantially diminished.

23.As I said, I have borne in mind the underlying objectives, the Court’s own case management powers, the question of possible prejudice to the parties, the delay that unfortunately these proceedings have already experienced thus far, the reasons why this question of adjournment needs to be considered at all, and the fact that a parallel criminal prosecution is going on.  The Court has also borne in mind the availability of counsel and the availability of the Court itself in considering whether it should accede to Mr Wong’s suggestion of hearing the case partly, as well as the difficulties of fixing dates, both in the case of a part-heard situation and in the case of a general adjournment.

24.The Court has come to the conclusion that on balance, it would be better to adjourn the hearing generally to until after the outcome of the District Court prosecution is known.

25.The Court will give all necessary directions that may be required to be given in the meantime.

[Submissions on directions and costs]

26.The estimated length of hearing shall be revised to 4 days.  A directions hearing shall be fixed after the outcome of the District Court prosecution is known.  Costs in the cause.

Mr Horace Wong SC and Mr Clark Wang, instructed by the Department of Justice, for the applicant

1^st defendant, in person, absent

Mr Clive Grossman SC and Mr Y L Cheung, instructed by William Sin & So, for the 2^nd defendant

Mr Rimsky Yuen SC and Ms Janet Ho as amici curiae