Keen Lloyd Holdings Ltd and Others v. Commissioner of Customs and Excise and Another
Read the full judgment text of HCAL 113/2012 on BabelCite. This High Court CFI judgment was delivered on 16 April 2015.
1. In response to my judgment dated 23 December 2014 the respondents have applied to vary one of the orders of relief I made, namely, the declaration I made in paragraph 184(iii) of my judgment that section 21(1)(a) of the Import and Export Ordinance, Cap 60 (“IEO”) is unconstitutional. In its place the respondents seek a remedial interpretation that will preserve the legislature’s intention to provide wide powers of search to officers of the Customs and Excise Service but which will ensure tha
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HCAL 113/2012 and IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 113 OF 2012 ____________
____________ IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 82 OF 2013
Date of Hearing: 26 February 2015 Date of Judgment: 16 April 2015 _______________ JUDGMENT Introduction 1.In response to my judgment dated 23 December 2014 the respondents have applied to vary one of the orders of relief I made, namely, the declaration I made in paragraph 184(iii) of my judgment that section 21(1)(a) of the Import and Export Ordinance, Cap 60 (“IEO”) is unconstitutional. In its place the respondents seek a remedial interpretation that will preserve the legislature’s intention to provide wide powers of search to officers of the Customs and Excise Service but which will ensure that those powers are compliant with the Bill of Rights (BOR) and the Basic Law. Should the application now be entertained? 2.The parties are in agreement that, as a matter of law, a judge can revisit his judgment and amend it as long as the order has not been sealed, after which time he would be functus officio. 3.A discussion of the law on this issue can be found in the judgment of the Court of Appeal in Sun Jianqiang v Trans-Island Limousine Service Ltd [2004] 1 HKC 533. There the court referred to English authorities which discussed the rationale for the power and how it should be exercised. It must be exercised judicially and not capriciously and only where extraordinary or exceptional circumstances demanded recourse to it in the interests of justice. In considering whether recourse should he had to the power the court had to balance the need for certainty and finality in a court’s decision with the duty of the court to do justice between the parties and avert an unnecessary appeal. 4.There is no special meaning to be given to “exceptional circumstances”. It is not a term of art and simply means strong reasons. As Rix J said in Noga v Abacha [2001] 3 All ER 513 at 526d the formula of exceptional circumstances must not be allowed to become a straitjacket of it its own and the interests of justice remain the overriding consideration. Rix J went on to say that an exceptional case does not have to be uniquely special and he favoured the term “strong reasons” as an acceptable alternative. In accepting this term our Court of Appeal in the Sun Jianqiang case said at page 543I-544A:
5.In the recent United Kingdom Supreme Court decision of In re L (Children) [2013] 1 WLR 634 Baroness Hale of Richmond JSC said that in deciding whether to exercise this power the court should be guided by its overriding objective of dealing with the case before it justly. 6.In deciding whether to entertain the respondents’ application I take into account the fact that in the course of making his final submission on the application for judicial review, counsel for the respondents, Mr Robert Pang SC, did indicate that should the court be against him on the constitutionality of section 21(1)(a) of the IEO then he would wish a further opportunity to be heard on the form of relief the court should order. I took note of his position and did not require him to complete, then and there, such submissions as he wished to advance on the issue of relief. Implicitly, my conduct would have encouraged him to believe that he would be given a further opportunity to address me. In these circumstances it seems to me it would not be just to now deny him that opportunity. 7.But there is, in my view, another matter relevant to the exercise of my discretion and that is the nature of the application the respondents seek to make. It is an application for the court to remedially interpret the infringing legislation as an alternative to making a declaration of unconstitutionality. The reason the nature of the application is relevant to the exercise of my discretion is because the Court of Final Appeal has said in HKSAR v Lam Kwong Wai & anor (2006) 9 HKCFAR 574 that courts have a duty to consider the alternative of remedial interpretation before making a declaration of contravention. At page 611B-D Sir Anthony Mason NPJ, in delivering a judgment with which all other members of the court agreed, said:
8.I would, therefore, be failing in my judicial duty if I did not consider the alternative of remedial interpretation. To entertain the respondents’ application now not only provides procedural fairness to the respondents, it also prevents the court from falling into appellable error and averts an unnecessary appeal on this point. 9.For all these reasons I conclude that it would be just to entertain the respondents’ application and I exercise my discretion to reconsider what relief I should grant in respect of my finding of the unconstitutionality of section 21(1)(a) of the IEO. The court’s approach to remedial interpretation 10.The rationale for employing the tool of remedial interpretation is that it enables the court to lessen the impact that its finding of contravention would otherwise have on the legislative process. As was said by Sir Anthony Mason NPJ in Lam Kwong Wai, by upholding the legislation in an altered form rather than striking it down:
11.But courts must remember that their role is only to interpret legislation, not to amend it. The enactment and amendment of legislation is the exclusive role of our Legislative Council. The importance of not crossing the boundary line that separates interpretation from amendment when employing the tool of remedial interpretation was emphasized by Lord Nicholls of Birkenhead in his judgment in In re S (Care Order: Implementation of Care Plan) [2002] AC 291. In this case he was discussing the use of remedial interpretation within the context of the provisions of the United Kingdom’s Human Rights Act. At page 313E, paragraph 39 he spoke of the Act reserving the amendment of primary legislation to Parliament and by this means preserving parliamentary sovereignty. He said:
12.This important distinction between the different constitutional roles of legislature and judiciary must be borne in mind by courts when considering whether to remedially interpret contravening legislation. Courts must, therefore, resist the temptation to allow a well intentioned desire to lessen the legislative consequences of their findings of contravention where to do so would result in it crossing the constitutional boundary. 13.But when is this boundary line crossed? As Lord Nicholls noted at page 313F of the In re S case: “The greater the latitude with which courts construe documents, the less readily defined is the boundary.” 14.At one extreme is judicial interpretation which gives a section an effect quite different from that which the legislature intended; what Lord Bingham of Cornhill described in R (Anderson) v Home Secretary [2003] 1 AC 837 at 883, paragraph 30 as “judicial vandalism”. Whilst a court may more readily recognize when it is being invited to embark on “judicial vandalism”, with anything less obvious than that the boundary line between robust interpretation and impermissible judicial creativity may be difficult to discern. 15.Attempts have been made by appellate courts to articulate a means of identifying the dividing line. In Sheldrake v DPP [2005] 1 AC 264 Lord Bingham of Cornhill, in referring to different formulas of words that had been employed, said at page 304B-C:
16.This passage was quoted by Sir Anthony Mason NPJ in the Lam Kwong Wai case and at page 608C of his judgment he said:
17.At page 610 H-J of his judgment in Lam Kwong Wai, Sir Anthony provided his own “insight” when he said:
Again, at page 612A of his judgment, Sir Anthony repeated this formula, saying that the remedial interpretation on which the court settles must, so far as is possible, give effect to the legislative intention and do “no violence to fundamental or essential elements of the legislation.” 18.In a similar vein is the comment by Ribeiro PJ in HKSAR v Ng Po On (2008) 11 HKCFAR 91 where, at 109B, he said:
19.A court will be at risk of doing violence to fundamental or essential elements of the legislation if its remedial interpretation involves a significant departure from a fundamental feature of the legislation as such an interpretation could have repercussions for the operation of the legislation that the court cannot anticipate. This important point was made in the In re S case by Lord Nicholls when he said at page 313F-G, paragraph 40:
20.Likewise, courts will also need to be wary of adopting a proposed remedial interpretation if there are a number of different routes by which the offending provisions can be made Basic Law compliant. In such a situation it will be harder to assume that the remedial interpretation of the court would give effect to the legislature’s intention. A choice between two or more alternatives may be a choice properly made by the legislature rather than the court. 21.Whatever formula of words the court employs to provide it with insight in the performance of its task, it is important to recognize that underlying the application of any of them is a requirement that the court have a clear understanding of the legislative context in which the offending provision resides. This involves the court taking note not just of the social issue or area of government activity that the legislation addresses but also the means by which the legislature, through the drafting tools and concepts employed, has striven to achieve its goals in addressing the particular social issue or area of government activity. 22.Once the court has an accurate and complete appreciation of these matters it will be in a position to assess the impact of the proposed remedial interpretation and that it should do by standing back from the legislation and, with the benefit of objectivity that distance provides, consider the remedial interpretation that is sought within the context of the contravening legislation. In Ghaidan v Godin-Mendoza [2004] 2 AC 557 at page 598G-H Lord Rodger of Earlsferry explained it in this way:
23.This being my task, the starting point for me must be to obtain an accurate and complete understanding of the legislative context of which the proposed remedial interpretation will be a part. The IEO search warrant regime 24.The IEO regulates a very important activity as cross-border commerce is the life blood of Hong Kong. Part of that regulatory process mandates the Customs and Excise Service as the law enforcement agency responsible for enforcing the legislation and investigating any breaches of it. It is clear from the provisions of the IEO that the legislature intended to confer wide powers of entry and search on the Customs and Excise Service. These powers are both warrantless and warrant based. 25.The distinction the legislation creates between the warrantless power and the warrant based power is founded upon the nature of the premises to be searched. Thus, by section 20(1)(a) a warrantless power is given in respect of any premises or place registered under the IEO or occupied by a person who, inter alia, has been registered under the IEO.[1] This particular warrantless power is not directly relevant to the judicial review but it does form part of the legislative context. When read with sections 21 and 22, it becomes apparent that the entry and search regime enacted by the legislature reflects a decision by it that whether the entry and search power, when used against premises, shall be warrantless or warrant based will depend upon the nature of the premises to be searched. 26.Like section 20, section 21 also includes a warrantless power to enter and search any premises, place, vessel, aircraft or vehicle. Premises and places may be entered and searched and vessels, aircraft and vehicles may be stopped, boarded, removed, detained and searched.[2] But then, section 22 comes into play and it has the effect of carving out from the section 21 warrantless power, those premises or places which fall within the definition of “domestic premises”. For these premises or places a magistrate’s warrant is needed. The reason section 22 also carves out certain places is because the definition of “domestic premises” is not just confined to “premises” falling within the definition but also “places”. The definition is as follows:
27.However, there is yet another warrantless entry and search power and it is contained in section 21(3). This sub-section creates a warrantless power, subject to section 22, to enter and search “any premises or place connected with the manufacture, processing, production, storage, distribution or sale of any article in respect of which a licence or validated production notification has been issued or a production notification has been lodged under this Ordinance.” Because it is drafted as being subject to section 22 it does not include domestic premises. Clearly the reason why this power is warrantless is because of the specific character of the premises to which it relates. 28.There are, therefore, four different entry and search powers of premises. They are:
29.Also relevant to the remedial interpretation sought is the fact that the existing IEO entry and search regime caters to the situation where circumstances may require greater expedition in searching a domestic premises than the process of obtaining a magistrate’s warrant would otherwise allow. Thus section 22(1)(b), as read with section 22(3)(b), empowers a member of the Customs and Exercise Service of or above the rank of Assistant Superintendent to authorize the entry and search of domestic premises if he reasonably suspects that, unless the premises are entered and searched immediately, the item subject to seizure under section 21 which is reasonably suspected to be present in the domestic premises, is likely to be removed from the premises. The constitutionality issue 30.In my judgment I was only concerned with the constitutionality of section 21(1)(a), that is, the warrantless power to enter and search premises other than domestic premises. I concluded that in order to be constitutional this power should be confined to those situations when it is not practicable to obtain a warrant from a person acting judicially. The corollary of this is that when it is practicable to obtain a warrant from a person acting judicially then that must be done. The effect of my ruling is to require that the section 21(1)(a) power, in so far as it relates to premises, should become a judicial warrant power unless it is impracticable to obtain a warrant from a judicial officer. The remedial interpretation sought 31.The remedial interpretation requested by the respondents is attached as an Appendix to this judgment. It is very simple in its mechanism but more complex in its consequences. The respondents ask that wherever the words “domestic premises” appear in section 22 of the IEO, they are replaced with the single word “premises”. This would require that the word “domestic” be deleted in sections 22(1) to 22(4). In addition the following sub-paragraph should added to section 22(1):
32.Of the four powers mentioned in paragraph 28 of this judgment, only the power contained in section 20(1)(a) will not be affected by the requested remedial interpretation. All other powers will be. Discussion 33.The effect of the proposed remedial interpretation is to eliminate any distinction between domestic premises and other premises. As a consequence, a judicially authorized warrant will be required for all premises referred to in section 21. The addition of the proposed new section 22(1)(c) would enable a member of the Customs and Exercise Service to enter and search premises without a warrant when it is not reasonably practicable to obtain a magistrate’s warrant under section 22(2) or an authorization under section 22(3). 34.I shall address firstly the question of whether the new section 22(1)(c) can be justified. I am of the view that to read in this new provision would involve the court in judicial legislation. The reason I say this is because the legislature has already provided for the situation where expedition is needed. It does that by the provision in section 22(3) which allows the requirement of a magistrate’s warrant to be bypassed and an authorization given by an Assistant Superintendent instead. That authorization, however, may only be given where there is a likelihood that the thing subject to seizure under section 21 is likely to be removed from the premises. 35.If the respondents wish a power wider than section 22(3) in terms of the trigger for dispensing with a magistrate’s warrant or a power to dispense even with an authorization by an Assistant Superintendent then it must go to the Legislative Council and have such a scheme enacted. For that would be a scheme different from the existing legislative regime. 36.This brings me to the primary question of whether the court would be legislating by removing the distinction, deliberately created by the legislature, between domestic and other premises. The applicants submit it would be an impermissible intervention by the court in the legislative process. I agree and I do so because of the impact the remedial interpretation would have on the entry and search regime contained in both sections 21 and 22. 37.First, removing the distinction between domestic and other premises also removes it from the section 21(3) entry and search power, thereby transforming the section 21(3) power from a warrantless power into a warrant based power. Whether section 21(3), as a warrantless power in respect of non-domestic premises possessing the specific character to which it applies, can be justified is not an issue I have had to address. Were I to adopt the proposed remedial interpretation, the effect of so doing would be to strike down a legislative provision which is not relevant to the judicial review and which may be constitutionally sound. I appreciate that the decision of the Court of Final Appealin Koon Wing Yee v Insider Dealing Tribunal (2008) 11 HKCFAR 170 allows a court to use the power of remedial interpretation to strike down a non-infringing legislative provision. However, this is a power to be employed only in an exceptional case and I am not persuaded that in the circumstances of the present case recourse to the power is justified or would be appropriate. 38.Another impact, which the respondents have not mentioned but which, it seems to me, would be created by the remedial interpretation, is that section 21 contains other powers which are clearly contemplated may be needed to be employed in the course of exercising the power of entry and search. These are set out in section 21(2). One such power is a power to require information and that is contained in section 21(2)(c). But, that power, as drafted in section 21(2)(c)(i) and (ii), limits the exercise of the power to only “the premises, place, vessel, aircraft or vehicle entered or boarded under this section.” In order not to lose the benefit of this power in respect of premises, which are no longer entered under section 21 but only under section 22, the words “or section 22” would have to be added to the end of this phrase where it appears in section 21(2)(c)(i) and (ii). To add these words as part of the remedial interpretation illustrates the extent to which the court would have to be involved in “amending” other areas of the entry and search regime in order not to prejudice the operation of other elements of it. 39.Finally, it seems to me that there is a further impact flowing from removing domestic premises from section 22. Once the term becomes simply “premises” the definition of “domestic premises” ceases to have any application to section 22. But the definition of “domestic premises” also includes “places” that are within the definition. Thus, by causing the definition to no longer apply to section 22 the requirement for a magistrate’s warrant is narrowed in that a warrant would no longer be needed in respect of, for want of a better term, “domestic places”. The effect of this is to lessen the power of the magistrate. 40.The respondents submit that an alternative remedial interpretation would be to replace the words “domestic premises” in section 22 with the words “premises or place”. This may deal with the third of the three problems that I identify above as flowing from the proposed remedial interpretation, but not the first two. It also means that all non-domestic places would now require a warrant – a question which has not been before me as it is outwith the parameters of the judicial review. 41.All these impacts flow from the fact that the scheme the legislature has enacted in sections 20-22 is one which relies on the nature of the premises for determining whether the entry and search power shall be warrantless or warrant based. They highlight the complexity of the regime enacted by the Legislative Council and how dependent that regime is on the type of premises to be searched. Such a regime does not readily allow for remedial interpretation. The remedial interpretations sought by the respondents involve a significant departure from a fundamental feature of the IEO entry and search regime which can lead to repercussions, and those I have managed to identify I have set out, which the court cannot fully anticipate. For these reasons I decline to remedially interpret section 22 in either of the ways proposed by the respondents. Conclusion 42.I therefore refuse the application for a remedial interpretation. The costs of this application are costs in the cause and are therefore awarded to the applicants. 43.In paragraph 184(iii) of my judgment of 23 December 2014, in consequence of my declaration of unconstitutionality of section 21(1)(a), I ordered that seizures effected under warrants 3, 4 and 9 had to returned to the persons from whom they were seized. I omitted to order, but do now order, that insofar as copies of these seizures have been provided to others, the Commissioner of Customs and Excise use his best endeavours to retrieve all such documents from those others.
Mr Robert Pang SC and Mr Edwin Choy, instructed by the Secretary for Justice, for the respondents Mr Adrian Bell SC and Ms Tanie Toh, instructed by Ho Tse Wai, Philip Li & Partners, for the applicants Appendix RESPONDENT’SPROPOSED REMEDIAL INTERPETATION Section 21: Special powers of the members of the Customs and Excise Service, etc.
Section 22: Restrictions upon exercise of special powers of members of the Customs and Excise Service, etc.
[1] There is also a power to stop, board and search any vessel aircraft or vehicle and this power, and the powers in section 20(1)(a), are free of any qualification or limitation of any kind. [2] The power under section 21 is a much more limited power as it can only be used by members of the Customs and Excise Service if the member reasonably suspects that there is in or on the premises, place, etc “any article in respect of which an offence has been committed under this Ordinance or which is, or contains evidence of the commission of such offence”. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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