Securities and Futures Commission v. Hontex International Holdings Co Ltd and Others

CACV 128/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 128 OF 2012

(ON APPEAL FROM HCMP NO. 630 OF 2010)

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REASONS FOR JUDGMENT

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Hon Tang Ag CJHC (giving the reasons for judgment of the Court):

1.The trial of these proceedings began before Harris J on 4 June 2012. At the commencement of the trial, the learned judge dealt with certain preliminary matters raised by the Defendant including

1)  whether these proceedings involve the determination of a criminal charge or are essentially criminal in nature;

2)  if so, and to the extent that they are criminal in nature, whether the court should exercise any of its jurisdiction to grant declaratory reliefs or make findings of contraventions of the relevant provisions pursuant to section 213 of Securities and Futures Ordinance (Cap. 571) ("the SFO");

3)  the relevant standard of proof in these proceedings; and

4)  whether legal professional privilege had been waived in respect of certain documents concerning the Defendants?

2.On 7 June 2012, Harris J held that

1)  These proceedings do not involve the determination of a criminal charge within the meaning of Articles 10 and 11 of the Hong Kong Bill of Rights;

2)  The issue whether the court should exercise its jurisdiction, if existed, pursuant to section 213 of the SFO should only be determined at the end of a trial after hearing all evidence and full arguments on all issues;

3)  The trial of these proceedings would not be adjourned pending the resolution of the preliminary issue by the appellate court.

3.The learned judge has granted leave to the Defendants to appeal.  A Notice of Appeal was filed in the afternoon on 7 June 2012.

4.At the same time the Defendants also applied to us by summons pursuant to Order 59 rules 14 and 14A and the inherent jurisdiction of the court for the adjournment of the trial before Harris J, pending resolution of the above mentioned appeal.

5.Mr Charles Manzoni, SC (appearing for the Defendants) submitted that irrevocable damage / irreparable and fundamental prejudice and injustice may be caused to the Defendants if the trial is allowed to go ahead. He cited as an example, the fact that records of interview which would be inadmissible if the proceedings were criminal in nature would be admitted.  He said the disclosure of such information may damage the reputation of the Defendants. Moreover, since the prosecution of some of the officers of these Defendants remains a possibility (in the event of their returning to the jurisdiction), the disclosure of prejudicial materials may prejudice any possible criminal proceedings.  Also, it is said that the trial would be a complete waste of time, cost and resources if Harris J turned out to be wrong.

6.We have no doubt that the learned judge was right in refusing to adjourn the trial.  He was in a much better position to weigh the advantages and disadvantages of adjourning the trial.  This Court cannot possibly interfere with the learned judge's exercise of discretion.

7.For the above reasons, we have dismissed the summons.  But we would add that although the learned judge has given leave to appeal and there is now a pending appeal, it is for consideration whether the appeal should only be listed for hearing after the conclusion of the present proceedings before Harris J.

Mr Charles Manzoni, SC & Mr Norman Nip, instructed by Li & Partners for the 1^st, 2^nd and 5^th Defendants

Mr Simon Westbrook, SC leading Mr Roger Beresford and Ms Connie Lee, instructed by Securities and Futures Commission, the Plaintiff