Cheng Kelly Kit Yin and Others v. Secretary for Justice

HCAL127/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 127 OF 2012

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BETWEEN

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J U D G M E N T

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A. INTRODUCTION

1.In May 2012, the defendants in DCCC153/2010 applied for a permanent stay of the criminal proceedings.  It was refused by the District Judge on 5 June 2012.  In July 2012, they re-opened the stay application, which the Judge also refused on 10 September 2012 (“the Decision”).

2.On 8 October 2012, the applicants, who are the 1^st to 3^rd defendants in the criminal proceedings, applied for leave to judicially review the Decision.  They sought an order of certiorari quashing the Decision and an order of mandamus either directing the Judge to grant a permanent stay of the prosecution against them or remitting the re‑opened stay application back to the District Court to be heard by another judge. 

3.Pursuant to my directions, the putative respondent, the Secretary for Justice, filed a response dated 31 October 2012, opposing the leave application.  The applicants filed a reply dated 8 November 2012.  I then directed an oral hearing, which took place on 10 December 2012.[1]

4.This is my determination on the leave application.

B. THE CHARGES

5.In the criminal proceedings, the applicants are charged with 10 charges of conspiracy to defraud; the 1^st applicant and the other two defendants (“D4” and “D5”), one charge of conspiracy of defraud; the 2^nd and 3^rd applicants, one charge of money laundering; D4 and D5, another charge of money laundering.  The factual circumstances leading to the charges are as follows.

6.At all material times, Wing Fai Construction Company Limited (“Wing Fai”) engaged in the business of, among other things, engineering and construction.  It maintained bank accounts with 4 banks (“the Banks”).  The 1^st applicant was a director of Wing Fai until her resignation on 22 April 2002.  The 2^nd applicant, the 1^st applicant’s daughter, and the 3^rd applicant were shareholders and directors of Famous Capital Enterprises Ltd (“Famous”).  The 3^rd applicant was also the account clerk of Wing Fai.  D4 and D5 were the shareholders and directors of King Capital Engineering Ltd (“King”) and King’s account clerk and project manager respectively.

7.Between 3 September 2001 and 19 January 2002, Wing Fai made a total of 11 applications to the Banks for letters of credit to be issued in favour of Famous or King, as the case may be, for the purported sales and purchases of asphalt, concrete mix and steel bars when none of the underlying transactions in fact existed.  The application documents were all signed by the 1^st applicant.  Supporting documents submitted by Famous and King were signed by the 3^rd applicant and D4 respectively.  11 Letters of credit totaling HK$31 million were then issued by the Banks.  This constituted the 11 charges of conspiracy to defraud.  Further, some of the proceeds of the letters of credit were deposited into the bank account of Famous, which were then applied by the 2^nd and 3^rd applicants as signatories of the account between 12 September 2001 and 1 February 2002.  Some other proceeds were deposited into King’s bank account, which were paid by D4 and D5 to another company by way of a cheque dated 30 January 2002 and signed by them.  This constituted the two charges of money laundering.

8.On 22 April 2002, Wing Fai was sold to Sino Glister International Investments Limited.  A winding up petition was soon presented thereafter.  On 6 July 2002, provisional liquidators were appointed. On 9 December 2002, Wing Fai was ordered to be wound up.  Liquidators were appointed on 28 February 2003.

9.Following investigations, the liquidators made a report to the Commercial Crime Bureau on 20 January 2004.  The 1^st applicant, the 3^rd applicant and D4 were arrested on 14 May 2008; D5, the following day; and the 2^nd applicant, 18 July 2008.  They were formally charged on 10 December 2009.

10.The defendants’ principal defence in the criminal proceedings appears to be that there was no economic loss or any risk of such loss to the Banks or Wing Fai.

C. THE STAY APPLICATION

C1. The defendants’ complaints

11.In the first stay application, the defendants relied on two complaints.

12.They first complained that the liquidators had themselves or had through their legal representatives used the criminal proceedings as leverage against the defendants to pressure them into a global settlement of the various civil proceedings that were ongoing between them. They had further failed to disclose some material facts to the police when they filed a complaint against some of the defendants.  The police and the DOJ had been influenced by the liquidators’ conduct to the extent that they had abdicated their responsibilities as an independent investigator and prosecutor respectively.  The conduct of both the liquidators and prosecutors amounted to an abuse of process.

13.The defendants next complained that there was unjustifiably delay.

C2. The defendant’s evidence

14.In around October 2008, the liquidators initiated discussion about settlement of all the ongoing civil proceedings concerning Wing Fai.  At a meeting on 13 October 2008, Mr Nicholas Hill of the liquidators proposed to Mr Camille Jojo, then managing partner of Barlow Lyde and Gilbert representing the directors of Wing Fai, the figure of HK$35 million for a global settlement.  Mr Hill further agreed to attend a without prejudice meeting at the DOJ on 16 October 2008 (“the October Meeting”) with the handling counsel, Mr Gavin Shiu, Senior Assistant Director of Public Prosecution, Ms Denise Chan, Senior Public Prosecutor, Mr Clive Crossman, SC and Mr Walker Sham of counsel, representing the 1^st applicant and Mr Jojo.

15.According to the notes of the October Meeting which bore the initial of Mr Crossman and Mr Sham, indicating that it was prepared by them, Mr Crossman said that the best way forward was to achieve a global settlement.  That was endorsed by Mr Hill.  Mr Crossman then asked for an indication as to how that was going to be received by the DOJ.  To this, Mr Shiu retorted, “There is no quid pro quo.”  What he meant was crystal clear : any global settlement in all the civil proceedings would have no bearing as to whether criminal prosecution would be brought against the defendants.  Further discussion then ensued.

16.In June 2009, Mr Hill called Ms Lily Fenn, senior partner of Lily Fenn and Partners which represented the holding companies of Wing Fai, and sought a global settlement of the civil proceedings for HK$38 million.  He said in that event, there would be no worries for the criminal matter as the liquidators would withdraw the complaint.

17.However, no settlement was reached.  On 4 September 2009, solicitors representing the liquidators informed the DOJ of the same and indicated that they were ready to assist in the prosecution.

18.The liquidators’ attempt to extract a global settlement in return of dropping the criminal case did not stop.  In February and March 2010, a gentleman of the liquidators identified as “A” told Mr Thomas Fyfe, partner of Barlow Lyde and Gilbert, that after settlement for HK$38 million, Mr Hill would stay outside Hong Kong and would not give evidence in the criminal proceedings, which would then lose its impetus.

19.On unjustifiably delay, the defendants’ contended that they had suffered prejudice.  A potential defence witness had become unavailable because of his deteriorating mental condition.  And bank documents were routinely destroyed after a designated period of time.

C3. Missing files before 4/9/2009

20.In August 2011, the defendants made a written request for further disclosure from the DOJ for all correspondence, documents, notes of meetings and other contact between the liquidators on the one hand and the DOJ and police on the other.  The DOJ replied that all the relevant files at the DOJ containing such documents before 4 September 2009 had been misplaced and could no longer be located.  The DOJ also supplied a copy of a further letter which the police had been able to retrieve from the correspondence with the liquidators.

C4. The prosecution’s evidence

21.The prosecution called Mr Shiu, Ms Chan and Mr Berlin Ho of CCB to give evidence in opposing the stay application.

22.Ms Chan was the advising counsel.  The case was first allocated to her for advice in June 2007.  Between then and the time when the defendants were formally charged in December 2009 as the case developed, Ms Chan had given a total of 6 advices, the last of which was in November 2009. She confirmed that the decision in favour of prosecution was made in accordance with the statement of prosecution policy and practice issued by the DOJ.

23.Ms Chan could not recall the details of the October Meeting.  Pursuant to Mr Shiu’s instructions, she made some enquiry with the police after the Meeting.  Ms Chan kept some rough notes of the Meeting, which was placed in a file.  That file, together with other files, was handed over to another counsel of the Prosecutions Division for further handling in March 2010.

24.Mr Shiu was the supervising counsel.  He approved of Ms Chan’s advices and endorsed her decision to prosecute.  Referring to the October Meeting, he recalled that Mr Crossman was trying to convince Ms Chan and him that it was not an appropriate case to prosecute.  But they just heard the representations without making any commitment. Mr Shiu said he was mindful of the role that the liquidators might be playing or seeking to play in the criminal prosecution.  He questioned their integrity and asked the police for information.

25.I have not been referred to Mr Berlin Ho’s evidence, which presumably has no bearing on the present leave application.

26.After the close of the evidence, and immediately before oral submissions were made, the prosecution produced some further document which Ms Chan had only just found (“the Further Documents”).  It would appear that Ms Chan was upset by the evidence of Mr Shiu that it was she who arranged the October Meeting.  She then checked her computer and found the Further Documents.  The Further Documents were immediately made available to the defence by the DOJ’s letter dated 31 May 2012.  The Further Documents were (1) emails between Ms Shiu and Ms Chan (2) emails between Ms Rebecca Nip, Mr Shiu’s secretary, and Ms Chan; and (3) a minutes of meeting prepared by Mr Shiu dated 2 September 2008 (“the Minutes”) of a meeting that he attended on 1 September 2008 with Mr Crossman, Mr Sham and Mr Felix Ng, pupil to Mr Crossman (“the September Meeting”).

27.According to the Further Documents, Mr Shiu had in fact attended two earlier meetings with Mr Crossman about this case.  The first meeting was held in June 2008, the second, the September Meeting.  The Minutes recorded that at the September Meeting, the defence suspected that not all documents had been revealed by the liquidators and that the 1^st applicant had been pressed to settle the civil proceedings which would help the criminal case.

28.The fact that Ms Chan had retrieved the Further Documents was placed before the District Judge by way of admitted facts with the Further Documents enclosed.  Neither the prosecution nor the defendants sought to adduce any further oral evidence arising from the Further Documents before the court.  Closing submissions were made on 1 June 2012.  The Judge then adjourned the matter for ruling.

C5. The Judge’s ruling

29.On 5 June 2012, the Judge delivered his ruling.

30.The Judge rejected the argument that the DOJ had abdicated its duties.  He accepted the evidence of Mr Shiu and Ms Chan.  In particular, he found that Ms Chan had acted professionally and without any regard to anything the liquidators might have to say on the criminal proceedings and that she made her decision on prosecution based on the evidence and the evidence alone.  He concluded that whatever the motives and conduct of the liquidators or their legal representatives, the police and in particular the DOJ had proved that they had maintained their independence, impartiality and objectivity throughout. He said :

“The prosecution of the defendants does not amount to an abuse of process. The integrity of the criminal justice system [has] not been compromised. On the contrary, if the motives and conduct of the liquidators are as being alleged by the defendants, it has been demonstrated that the system is working perfectly, with the criminal investigation and prosecution being handled impartially by the Police and the [DOJ].”

31.The Judge next found that there was no unjustifiably delay.

32.Accordingly, he dismissed the stay application.

D. THE RE-OPENED STAY APPLICATION

33.That is, however, not the end of the matter.

D1. Further development leading to the re-opened stay application

34.It transpired that unbeknown to the prosecution and the defence, on 25 May 2012 and before he gave evidence on the stay application on 29 May 2012, Mr Shiu directed Ms Nip to download various documents from the DOJ document management system onto his two thumb drives and delete them the same from the system.  Ms Nip was interviewed by DOJ officers on 4 June 2012.  Eventually, the DOJ reported the matter to the police.  On 7 June 2012, the police entered the DOJ’s office to seize the office computers of Mr Shiu and Ms Nip and the thumb drives.  The police’s action was widely reported in the media.

35.The above events prompted the defendants to apply to re‑open the stay application before the Judge. 

D2. Further evidence

36.Several points emerged from the further evidence heard by the Judge on the re-opened stay application on 11 and 12 July 2012.

37.First, in her testimony, Ms Nip described how on 25 May 2012 Mr Shiu asked her to download and delete the documents.  She added that he had asked her to do something like this occasionally before but she could not remember the details of those occasions and what the documents were.

38.Second, under cross-examination, Mr Shiu was pressed as to why he asked Ms Nip to delete the documents on 25 May 2012.  He had this to say :

“A. Well, my concern was that in fact -- was that I wanted to be in control of them, in possession of them and that when my colleagues wanted them I would be -- know when they got them in what context and I’d also be able to explain to them the context of the drafts because, as I have just been saying to you, they are drafts. I am not 100 per cent certain whether are the final version that went on the record. The record is the hard copy which has been lost and I was just a little bit concerned. In fact, if anything, I was a bit concerned that my secretary would get dragged into some potential conflict of my colleagues and that’s one of the concerns. That was one of my concerns.

Q. So you were really trying to protect her, in effect.

A. That’s one of the reasons, yes, and it was only a momentary decision.  It wasn’t one that I sort of sat down and thought about for five or ten minutes.  It was just one of those momentary things.  And obviously, now, I regret that I did that and probably would have been better ways of doing it but -- and I do apologise for that but it was a momentary thought but it seemed like a good idea at the time, one of those sort of things.”

39.Third, the police carried out investigation into Mr Shiu’s and Ms Nip’s office computers and Mr Shiu’s two thumb drives. According to the statement of Chief Inspector Chan Tin-chu dated 9 July 2012, the police scanned the documents stored in the devices by using a set of key words with a view to identifying any document relevant to the criminal case. 91 documents were identified and sent to the DOJ for determining their relevancy.

40.I pause to note that when CIP Chan said 91 documents were identified to be relevant, he must have meant that they were potentially relevant because they matched the key words used in the scanning test.  Whether any of the 91 documents was actually relevant must be determined by the DOJ.  That must be the reason why they were sent over to the DOJ for actual relevancy to be determined.

41.Fourth, the DOJ performed their own investigation.  Mr Chan Sai-cheong, Rick, technical staff, examined the backup drives of the Department and confirmed that :

(a) between 3October 2010 and 20 May 2012 (“Phase 1”), 356 documents were deleted;

(b) between 20and 25May 2012 (“Phase 2”), 27 documents were deleted.  These 27 documents do not include the Minutes, which were deleted from the central system of the DOJ sometime between 24and 25 May 2012.  The Minutes were specifically restored; and

(c) between 25 May 2012 and 7 June 2012 (“Phase 3”), 121 documents were deleted.

42.All the deleted documents were restored (‘the Restored Documents’). Three officers of the Prosecutions Division, namely Ms Louisa Lai, DDPP, Mr David Leung, SADPP and Ms Sabra Lo, PP, examined the Restored Documents.  Their evidence was presented to the court by way of witness statements.  It is their undisputed evidence that the documents deleted in Phase 1 and Phase 3 were not relevant to the criminal proceedings.  For the 27 documents deleted in Phase 2, 7 documents were identified to be or likely to have been created by Mr Shiu or Ms Nip.  Those 7 documents were annexed to the witness statement of Ms Louisa Lai received as evidence in the re-opened stay application.  The documents did not include the Minutes.

43.Fifth, Ms Chan re-iterated in her oral testimony that when she made the decision to prosecute, she was not influenced in any way by anything said or communicated to her by the liquidators and that she made the decision based on the evidence available to her only.

D3. The defendants’ contentions

44.The defendants’ contentions were based on Mr Shiu’s conduct.

45.First, they argued that Ms Nip had previously, pursuant to Mr Shiu’s instruction, deleted other documents from the computer server of the DOJ.  That being the case, it is impossible for the court to be sure if the documents that she deleted on 25 May 2012 contained any information relevant to the present case.  No fair trial was possible.

46.Second, they argued that Mr Shiu’s conduct in causing Ms Nip to delete the documents from the computer server and his failure to inform the prosecution, the defence or the court of the same had prejudiced the integrity of the criminal proceedings to such an extent that it should be stayed permanently even if a fair trial was possible.

D4. The Decision

47.The Judge gave the Decision on 10 September 2012.

48.Since the applicants are challenging the reasoning of the Judge, I will simply quote his ruling so that his reasoning can be fully and properly understood.  The Judge first disposed of the argument that there could not be a fair trial thus:

“The first limb: fair trial

The main thrust of this part of the defendants argument is in relation to the instruction given by Mr Shiu to Ms Nip to locate and remove certain documents from the computer server. It must be noted that the removal was from the server onto a thumb drive, it was not an order to destroy the documents.

According to the evidence adduced during the re-opened stay application, all the documents removed from the relevant computers were restored. According to David Leung and Sabra Lo’s witness statements, none of the restored documents are relevant to the present case. This was not disputed by the defendants.

It is the defendants’ allegation that since Shiu did not tell the court about the deletion when he first gave evidence in the stay application, it is not possible to now know whether he is telling the truth when he said that there are no other documents relating to the case that had been deleted or removed.

The defendants argue that this assertion is supported by the evidence of Nip when she said that she had previously occasionally deleted documents as instructed by Shiu. They therefore ask the court to draw the inference that there must have been other documents in relation to this case which had been deleted and that Mr Shiu had not told the court about. They say that without those missing documents, there can be no fair trial.

I find that what Ms Nip meant when she gave that answer in examination-in-chief was to show that what she was asked to do on 25^th May was nothing out of the ordinary, that she had done search and delete operations for Mr Shiu before. There is insufficient evidence to support the drawing of an inference that since Nip had done other deletions before, there must be documents relating to this case that had gone missing.

Bad faith and motive of Mr Shiu

In relation to whether Shiu had caused the deletion of the documents in bad faith and his motive behind, it must first of all be noted that Shiu has been with the Department of Justice for a long time and is a very experienced government counsel. He must have known about the backup system of the department. If his intention was to destroy all traces of the documents, he should have done it himself and should have tried to get to the backup files as well. Instead he chose to ask the person who would most likely to be investigated for any deletion of files to do it for him.

Furthermore, the instructions for Ms Nip to delete was given on 25^th May, which was just days after the 3 strongly worded memos from David Leung, Wesley Wong and Kevin Zervos. If the deletion by Mr Shiu was to hide the documents, why would he ask Ms Nip to do so at the particular time? He had already been alerted that his superiors were ‘on to him’ as it was, and if he was to make any stealth deletions, he ought to have done so himself.

The proposition that Mr Shiu was not trying to hide anything is in turn supported by what was in fact restored from the computers. As mentioned above, the evidence of David Leung and Sabra Lo in relation to the restored documents is that none were found to be relevant to the present case. There was nothing for Shiu to hide.

The 1^st September 2008 meeting notes

As for Shiu’s failure to mention about the 1^st September meeting and any records of the meeting, it must first of all be noted that the meeting was supposed to have been held between Gavin Shiu and the defendants’ (or some of the defendants’) legal representatives. Mr Shiu could not have been no naive as to have though that the deletion of the notes on his own computer would hide the fact that such a meeting had taken place. As least not from the defendants.

Furthermore, the 1^st September notes were recovered by Ms Denise Chan from her computer. There is no evidence of any attempt on Mr Shiu’s part to instruct Ms Chan to look through her computer’s archive to delete any relevant documents, nor any attempt on Mr Shiu’s part to do so himself. If Mr Shiu was acting as a rogue prosecutor, as the defendants are accusing him to be, he ought to have done much more to cover his tracks, if those tracks required covering.

I find that I can accept Mr Shiu’s explanation given in court of why he instructed Ms Nip to locate and delete the files from the servers. It may not have been the wisest move on his part but I do not find that there were any sinister motives behind the deletions. I find that there is not enough evidence to prove that Mr Shiu had acted in bad faith in the deletion of the documents and his failure to disclose to the court such deletions.

I note the discrepancies between Mr Shiu and Ms Nip’s evidence as to how Shiu instructed Nip in relation to the location and deletion of the documents. For the reasons given above, whether it was Shiu or Nip giving the correct version in court, it would not affect my finding on the lack of bad faith on Mr Shiu’s part. There is no point at all for Mr Shiu to lie about whether he was handed the 1^st September meeting notes or note by Ms Nip. He had already admitted to instructing Nip to delete the documents.

Furthermore, as pointed out above, the meeting was supposed to have been with the legal representatives of the defendants, unilateral deletion of the records of that or any meeting on his part would do nothing to conceal the meeting from anyone, especially not the defendants.

Conclusions on the first limb

I find that none of what had transpired between my last ruling on the stay application and the closing of the re-opened stay application in terms of evidence would cause me to change my ruling as to whether there can be a fair trial.

The pre 4^th September 2009 missing files remain missing, the only difference is that now the defendants are saying that given the conduct of Gavin Shiu in his instructions to Nip to delete documents in May 2012, it is likely that Gavin Shiu was the person who had caused the disappearance of those missing files as well.

I find that no such inference can be drawn.

I find that Denise Chan was still the key person who made the recommendation of whether to prosecute the defendants and on what charges. There is nothing in the re-opened application to cause me to find differently as to her professional integrity and independence. Gavin Shiu merely accepted Ms Chan’s recommendation in the process.

I find that, even when taking into consideration the new evidence adduced in the re-opened stay application, the defendants have failed to prove on the balance of probabilities that the defendants will not be able to have a fair trial.  As such, the defendants’ application on the basis of not being able to have a fair trial fails.”

49.The Judge then addressed the second complaint that it was an affront to the public conscience as follows :

“The second limb : affront to the public conscience

Since I have found that this is not a case where the defendants will not be able to have a fair trial, I move on to consider the so called second limb of the defendants’ application, applying the principle stated by Lord Steyn in R v Latif [1996] 1 WLR 104 at 112 G-H, as referred to in the case of HKSAR v Lee Ming Tee, CACC 1/2003 at paragraph 182:

‘In this case the issue is whether, despite the fact that a fair trial was possible, the judge ought to have stayed the criminal proceedings on broader considerations of the integrity of the criminal justice system. The law is settled. Weighing countervailing considerations of policy and justice, it is for the judge in the exercise of his discretion to decide whether there has been an abuse of process, which amounts to an affront to the public conscience and requires the criminal proceedings to be stayed : Reg v Horseferry Road Magistrates’ Court, Ex parte Bennett [1994] 1 AC 42.’

It is generally recognised that only in exceptional circumstances will a stay be granted when a fair trial is possible. An indication of what this means is conveyed by L’Heureux-Dubé J’s observations in R v O’Connor at 277b-c :

“… a stay of proceedings is only appropriate ‘in the clearest of cases’, where the prejudice to the accused’s right to make full answer and defence cannot be remedied or where irreparable prejudice would be caused to the integrity of the judicial system if the prosecution were continued.”

In the absence of a finding of “bad faith”, this standard will rarely, if ever be satisfied in a case where a fair trial is still possible. Even if there be a finding of “bad faith”, that finding would not necessarily conclude the matter’

It is not disputed by either party that at the end of the day the court has to conduct a balancing act in the exercise of its discretion under the second limb.

The big picture is this. The liquidators reported certain suspicious activities concerning a case that they were dealing with to the authorities. There was nothing improper in that reporting and the liquidators were in fact legally bound to do so once they found the irregularities. The reporting was done with the leave of the court.

The investigating authorities decided to wait while the parties conducted negotiations as well as engaged in numerous and lengthy legal battles.

In the mean time, personnel handling the case in the Department of Justice had changed. Certain documents had been misplaced. We do not know what those documents are and who had misplaced them.

Ms Denise Chan of the Department of Justice was the last person to be tasked with coming up with a legal opinion as to whether there was enough material to bring a prosecution and if so who to charge and with what, based on the information provided by the liquidators and the investigation by the Police.

There would appear to have been 2 meetings in June and September 2008 been Mr Gavin Shiu and legal representatives of some of the defendants. Mr Shiu cannot recall whether those meetings had taken place or their contents. There is not other evidence to suggest the contents of those meetings except the 1^st September notes mentioned above. It would appear that Mr Clive Grossman SC would have been present at both those meetings.

There was however one meeting between the Department of Justice and some of the defendants’ legal representatives that full minutes are available. This was the meeting on 16 October 2008. The minutes show that the Department of Justice, through Mr Gavin Shiu, had tersely indicated that there would be ‘no quid pro quo’ from the department should the parties choose to settle.

Documentary evidence show that after the meeting, Mr Shiu had inquired with the Police about the integrity of the liquidators. Ms Chan was also alive to that issue. According to Ms Chan, she made the decision to prosecute independently and without being influenced by any of the parties.

Long after the defendants have been arrested and charges laid, Mr Shiu in May 2012, for innocent motives (as I have found) instructed his secretary to seek out some files and copy them to a thumb drive and then delete them from the office computer. On the face of it, this is suspicious action, but if one looks at the contents of the documents deleted and restored as well as the circumstances surrounding the deletion, there was nothing much in relation to the deletions that it relevant to the present case.

Now the defendants are saying this deletion, this failure to inform the court of the deletion and the failure to disclose to the defendants about the deletion is so serious an affront to the public conscience that all proceedings against the defendants have to be stopped.

I find that taking all circumstances into consideration, a proper balancing exercise would lead one to conclude that no such stay should be granted. By my reasoning above, I find that the conduct of Mr Shiu was not done with bad faith. I further find that his action in instructing Ms Nip to make the deletions and his failure to tell the court about the instructions is not so serious that ‘irreparable prejudice would be caused to the integrity of the judicial system if the prosecution were continued.’

As I said before, Shiu might not have engaged in the wisest course of action, but it does not appear that he did so to hide anything.  What he had done, bearing in mind all the circumstances of the case, did not cause any damage to the integrity of the criminal justice system.”

50.The Judge accordingly ruled that his earlier refusal to stay the criminal proceedings do stand.

E. THE GROUNDS FOR JUDICIAL REVIEW

51.In the Form 86, the applicants raised the following grounds for the intended judicial review :

(1) That this application gives rise to exceptional circumstances and leave should be granted;

(2) That the decision of the Judge was unreasonable and irrational and should not have been reached by any reasonable tribunal having regard to have evidence and relevant legal principles;

(3) That on any objective analysis of the evidence, the conclusions reached the Judge as to the motives and conduct of Mr Shiu in ordering his secretary to delete documentation which was relevant to live issues before a court from the DOJ server and to place it on his personal thumb drive without disclosing the same to the Department or to the parties in the stay application or to the court in his witness statement or in his oral evidence, and without complying with a personal written direction to him from the Director of Public Prosecutions to provide a detailed written explanation of his involvement in the issues raised by the stay application, defy logic and the acceptable and expected standards of a prosecutor;

(4) That any reasonable tribunal should have found on the evidence that Mr Shiu acted in bad faith and that his conduct and the wider ramifications of his lack of candour undermined the prosecution’s fundamental duty of disclosure and the integrity of the proceedings such that a permanent stay should have been ordered;

(5) That this application has additionally a wider importance to the system of criminal justice in Hong Kong, to the standards which the court expect and require of prosecutors, and to the public perception as to whether those standards are in fact maintained.

F. DISCUSSION

F1. The law

52.To obtain leave for applying for judicial review, an applicant must satisfy the arguablility test as propounded by Li CJ in Po Fun Chan v Winnie Cheung :[2]

“Under this test, arguability must mean reasonable arugability. A claim for relief which is not reasonably arguable could not be regarded as arguable. A reasonable arguable case is one which enjoys realistic prospects of success. …”

53.Whether there is a reasonable case must depend on the actual context of the case.  Here, in satisfying the arguability test, the applicants must show a reasonably arguable case which enjoys a realistic prospect of success based on the well-established principles governing the permanent stay of criminal proceedings.  The parties have cited a number of cases on the principles on stay.  For present purposes, I think I only need to refer to the judgment of Ribeiro PJ in HKSAR v Lee Ming Tee & another :[3]

“The trial of course proceeds in the vast majority of cases. However, the court also unquestionably has jurisdiction to stay criminal proceedings brought by the Secretary in the exceptional cases where such a course is justified. That jurisdiction rests on the court’s inherent power to prevent abuse of its own process: Connelly v DPP (1964) AC 1254 at 1354, 1361.

In most such cases, the court only grants the stay because, notwithstanding the range of remedial measures available at the trial, a fair trial for the accused is found to be impossible and continuing the prosecution would amount to an abuse of process. …

A second line of stay cases… proceeds on a different basis. These are the rare cases where the court is prepared to grant a permanent stay even though a fair trial undoubtedly remains possible. The leading authority is the decision of the House of Lords in R v Horseferry Road Magistrates’ Court, Ex parte Bennett [1994] 1 AC 42, where, although the fairness of the trial was not in question, the court granted a stay because the circumstances involved an abuse of power which so offended the court’s sense of justice and propriety that the entire prosecution was tainted as an abuse of process.

While the jurisdiction on this dual basis clearly exists, it is only most sparingly exercised: Tan v Cameron [1992] 2 AC 205 at 221; Jago v The District Court of New South Wales (1989) 168 CLR 23 at 31; Ex parte Bennett [1994] 1 AC 42 at 74.

There are cogent reasons why in principle and in practice such stays are highly exceptional.

In the first place, it is only in very unusual circumstances that a court can properly be satisfied that a fair trial is “impossible”. The “fairness” achievable is judged in practical and not absolute terms. …

Secondly, in cases where a fair trial remains possible even though official misconduct may be involved in the bringing of the prosecution, the court does not exercise the jurisdiction to stay proceedings as a means of disciplining the police or prosecuting authorities. …

The public interest lies in the guilt or innocence of the accused being fairly and openly determined at trial. For this to be displaced, powerful reasons must exist for concluding that such a trial, although fair, would nonetheless constitute an intolerable abuse of the court’s process. The instances where such an argument has any prospects of success must necessarily be very rare.

Thirdly, in cases where the ground on which a stay is sought concerns alleged unfairness in the use of particular classes or items of evidence, the courts, for procedural reasons, are extremely reluctant to determine the evidential questions on a stay application.  This is because the fairness of using the evidence may be incapable of evaluation prior to the trial itself.  The impact of such evidence on the fairness of the trial may need to be considered in the context of the evidence as a whole so that the question may best be dealt with as a question of admissibility to be determined by the trial judge and possibly made subject to his residual discretion to exclude the same. …”

F2. Two main issues

54.The grounds on which judicial review is sought and the parties’ submissions on whether leave should be given boil down to two main issues :

(1) Whether it is reasonably arguable that because of Mr Shiu’s conduct complained of, no fair trial is possible?

(2) Whether it is reasonably arguable that Mr Shiu’s conduct complained of amounts to an affront to public conscience so that even if a fair trial is possible the criminal proceedings should be stayed?

55.Once these issues are resolved, whether the grounds stated in the Form 86 satisfy the arguability test will become apparent.

F3. The 1^st Issue

56.The applicants argued that Mr Shiu did not tell the court about the deletion of documents when he first gave evidence in the stay application in May 2012, it was not possible to now know if he was telling the truth when he said that there were no other documents relating to the case that had been deleted or removed.  According to Ms Nip, she had previously, as directed by Mr Shiu, deleted documents from the central computer system in the past, it was reasonable to infer that there must have been other documents deleted might have contained information relevant to the case; and that Mr Shiu was responsible for the missing of the case files prior to 4 September 2009. 

57.In my view, the applicant’s argument is simply untenable.  As noted, the undisputed evidence before the Judge is that all the documents deleted from the DOJ’s central system since 3 October 2010, including those deleted by Ms Nip on 25 May 2012, had been recovered.  Three officers of the Prosecution Division had examined all the Restored Documents with care.  All were found to be irrelevant to the criminal proceedings except those which were annexed to Ms Lai’s witness statement.  There is no basis to suggest that some other documents which were relevant to the criminal proceedings were or might have been deleted from the DOJ’s central system, whether by Mr Nip or Ms Nip since 3 October 2010.  Further, it was not even suggested to either Ms Nip or Mr Shiu that before 3 October 2010, Ms Nip had or might have, pursuant to Mr Shiu’s instruction, deleted documents that were relevant to the criminal case; or that Mr Shiu was responsible for the missing of the case files before 4 September 2009.  There is simply no basis to ask the court to draw such inferences any way.  The gap between the conduct of Mr Shiu complained of and the inferences the applicants ask the court to draw, even on a reasonably arguable basis, is too wide to be bridged.  Their argument is based on sheer speculation and no more. 

58.I find that it is not reasonably arguable that the Applicants would be deprived of a fair trial because of Mr Shiu’s conduct complained of.

F4. The 2^nd Issue

59.The applicants argued that even if a fair trial is possible, Mr Shiu was motivated by bad faith and bad motive.  His conduct was an affront to public conscience and had broken the court’s confidence in the prosecution.  The integrity of the criminal proceedings has been undermined.

60.In my view, Mr Shiu’s conduct in instructing Ms Nip to delete the documents in May 2012 was rather unusual.  His explanation may not be entirely satisfactory.  But the effect of his conduct must be assessed and determined objectively in the overall circumstances of the case. Having evaluated the evidence carefully, I find myself in complete agreement with the reasoning and conclusion reached by the Judge on this matter.  I would only add a few words.

61.First, when the overall circumstances are viewed objectively, there is no basis, even on a reasonably arguable basis, to attribute any bad faith or bad motive to Mr Shiu as alleged.

62.Second, much has been said about the fact the documents deleted by Ms Nip on 25 May 2012 contained the Minutes.  But the Minutes had already been provided to the defendants before closing submissions were made on the 1^st stay application.  The defendants did not see the need to recall either Mr Shiu or Ms Chan.  I fail to see how they can place any reliance on the late disclosure of the Minutes now.  Further, at the September Meeting, the main point made by Mr Crossman acting for the 1^st applicant concerned the liquidators’ conduct.  But it is beyond dispute that at the subsequent meeting on 16 October 2012, Mr Shiu had made the prosecution’s position very clear.  Any global settlement pursued by the liquidators would have no bearing as to whether criminal prosecution would be brought against the defendants.  Ms Chan’s evidence, rightly accepted by the Judge, is that the decision for prosecute was based on evidence available to her alone and that she was in no way influenced by the liquidator’s conduct.

63.Third, I fail to see how Mr Shiu’s instruction to Ms Nip in May 2012 could have affected the integrity of the decision to prosecute made in December 2009, which as Ms Chan re-iterated, was based on evidence made available to her only.

64.Fourth, I fail to see how Mr Shiu’s instruction to Ms Nip in May 2012 could have affected the integrity of the criminal proceedings conducted before the Judge as alleged.

65.The applicants placed heavy reliance on Dairy Farm Company Ltd v The Director of Food and Environmental Hygiene[4].  In that case, the prosecution with held evidence which would have assisted in proving the defendant’s innocence.  No proper explanation was offered.  The Court of Appeal found that the prosecution was presented with bad faith[5]; and that the conduct of the prosecution have been such that the integrity of the system of justice would be ignored if the prosecution were permitted to continue[6].

66.I do not think the applicants can derive any assistance from Dairy Farm for the simple reason that the facts in the present case are so materially different that any suggestion that the prosecution was trying to hide relevant documents from the defence is doomed to fail.

67.Finally, I do not think there are exceptional circumtances in the present case that warrant the exercise of this court’s supervisory jurisdiction to interfere with the criminal proceedings.

F5. Arguability of the grounds

68.It follows that all the grounds relied on in Form 86 are not reasonably arguable.

G. CONCLUSION

69.For the above reasons, I find that the applicants have failed to satisfy the arguability test.  Leave to mount the judicial review is accordingly refused.

70.Costs should follow the event.  I make an order nisi that the applicants do pay the Secretary for Justice the costs of the leave application with a certificate for two counsel, to be taxed if not agreed.

Mr Jonathan Caplan QC leading Mr Cheng Huan SC and Mr Bernard Cheng, instructed by Haldanes, for the 1^st, 2^nd and 3^rd applicants

Mr Daniel Marash SC leading Mr Ira Liu SSP, of the Department of Justice, for the putative respondent

Please refer to CACV20/2013 for the relevant appeal(s) to the Court of Appeal.