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Keen Lloyd Holdings Ltd And Others v Commissioner Of Customs And Excise And Another

Judgment Cited authorities 29 Cited in Precedent Map Related
Vincent
Judgment Date22 April 2016
Year2016
Citation[2016] 2 HKLRD 1372
Judgement NumberCACV107/2015
Subject MatterCivil Appeal
CourtCourt of Appeal (Hong Kong)
CACV97/2015 KEEN LLOYD HOLDINGS LTD AND OTHERS v. COMMISSIONER OF CUSTOMS AND EXCISE AND ANOTHER

CACV 97 and 107/2015
(Heard together)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NOS 97 & 107 OF 2015

(ON APPEAL FROM HCAL NO 113 OF 2012)

____________________

BETWEEN
Keen LLoyd Holdings Limited 1st Applicant
Yinggao Shipping (H.K.) Limited 2nd Applicant
Shan Ao international Limited 3rd Applicant
Young Crystal Limited 4th Applicant
ECO Metal (Hong Kong) Limited 5th Applicant
and
Commissioner of Customs and Excise
 1st Respondent
Department of Justice 2nd Respondent

____________________

(ON APPEAL FROM HCAL NO 82 OF 2013)

____________________

AND BETWEEN
Keen LLoyd Holdings Limited 1st Applicant
Yinggao Shipping (H.K.) Limited 2nd Applicant
Shan Ao international Limited 3rd Applicant
Young Crystal Limited 4th Applicant
ECO Metal (Hong Kong) Limited 5th Applicant
Leung Ka Yip 6th Applicant
Chun Chor Shing 7th Applicant
Mak Pui Cheong 8th Applicant
Chun Yuet-Ming, Jessica 9th Applicant
Chin Kam Chiu 10th Applicant
and
Commissioner of Customs and Excise 1st Respondent
Department of Justice 2nd Respondent

____________________

(Consolidated by order of the Honourable Mr Justice McWalters
dated the 22nd day of May 2013)

(Heard together)

Before: Hon Lam VP, Kwan JA and Harris J in Court
Dates of Hearing: 15-17 March 2016
Date of Judgment: 22 April 2016

_________________

JUDGMENT
_________________


Hon Lam VP, Kwan JA and Harris J:

A. INTRODUCTION

A1. The applications for judicial review and the appeals

1. The appeals we are concerned with relate to the execution of 16 search warrants by the Hong Kong Customs and Excise Department (“C&E”) in the course of a joint operation with the Huangpu Customs of the PRC (“the Mainland Customs”) in investigating suspected cross-border smuggling of goods on a massive scale from Hong Kong to the Mainland via the Pearl River and related money laundering activities by Keen Lloyd Holdings Limited and its subsidiaries (“the Keen Lloyd group”).

2. The search warrants were issued judicially on various dates: 3 September 2011 (six warrants), 6 September 2011 (five warrants), 2 November 2011 (two warrants), 18 January 2012 (two warrants) and 30 January 2012 (one warrant). Half of them were issued by a district judge pursuant to the Organised and Serious Crimes Ordinance, Cap 455 (“OSCO”), and the rest were issued by a magistrate pursuant to the Import and Export Ordinance, Cap 60 (“IEO”). Save for the three warrants issued in January 2012, all 13 warrants were executed on 12 January 2012, between two to four months after they were issued. That was the date when the covert operations of both C&E and the Mainland Customs turned overt simultaneously.

3. Of the warrants issued under the IEO, three (numbered 3, 4 and 9) were in respect of non-domestic premises and it would not have been necessary to obtain a judicial warrant for these premises. The searches could have been made without a warrant pursuant to section 21(1)(a), on the basis that the provision is constitutional.

4. From 31 January 2012 to 21 June 2012, C&E provided to the Mainland Customs copies of some of the documents seized during the searches as well as hard disks cloned from some of the computer hard disks seized.

5. On 24 August 2012, four companies of the Keen Lloyd group and another entity filed a notice of application for leave to apply for judicial review, challenging the decision of C&E to provide law enforcement agencies in the PRC with documents seized pursuant to the warrants. Leave to bring judicial review was granted on 31 August 2012. This is HCAL 113 of 2012.

6. On 6 May 2013, ten applicants including the five applicants in HCAL 113 of 2012 filed a notice of application for leave to apply for judicial review. Leave to bring judicial review was granted on 22 May 2013 and this is HCAL 82 of 2013. The application was amended twice in the course of the hearing to extend the scope of the attack on the warrants. In the final re-amended notice of application filed on 23 January 2014, challenge was made to (1) the decision of C&E to obtain the 16 search warrants for the main or substantial purpose of providing law enforcement agencies in the PRC with data, documents and materials seized, to further the investigation of offences committed in the PRC and eventually to use the seized properties for prosecution purposes in the PRC; (2) the decision of C&E to execute 13 search warrants three to four months after they were issued; and (3) the decision of C&E to apply for three search warrants under the IEO against three commercial premises, the decision of the magistrate to issue those three search warrants and the decision of C&E to execute those search warrants invalidly issued. The challenge of the decisions in (3) went to the constitutionality of section 21(1)(a) of the IEO.

7. The two applications for judicial review were consolidated and heard by McWalters JA, sitting as an additional judge of the Court of First Instance, on 11 days from August 2013 to January 2014. The respondents to the applications were C&E and the Department of Justice. Evidence was taken over four days in August 2013. The deponents of affirmations filed on behalf of the respondents were cross-examined by the applicants. The respondents did not apply to cross-examine the deponents for the applicants. The judge handed down his judgment on 23 December 2014 (“the 1st judgment”).

8. By the 1st judgment, it was declared that the three warrants issued in respect of commercial premises purportedly under section 22(2) of the IEO (numbered 3, 4 and 9) were issued without legal authority. Insofar as the entry into those three premises could have been made without a warrant under section 21(1)(a), it was declared that this provision is inconsistent with Article 29 of the Basic Law and is unconstitutional.

9. Of the 13 warrants executed two to four months after they were issued[1], it was held that they were not executed within a reasonable time from the date of their issue and had lapsed by the date of their execution. A declaration was made that all seizures effected under the 13 warrants were illegally made and must be returned to the persons from whom they were seized and insofar as copies of these seizures have been provided to others, it was ordered that C&E should use its best endeavours to retrieve all such documents from those others.

10. The judge rejected the applicants’ challenge that the decision of C&E to apply for the 16 warrants was for an unlawful or improper purpose.

11. As for the decision of C&E to provide copies of some of the seizures to the Mainland Customs, the judge held that this was unlawful.

12. The end result was that of the 16 warrants, only three (warrants numbered 6, 7 and 15) were held to be valid. They were all issued pursuant to OSCO and executed within a reasonable time of their issue, and none of the seizures effected under them were shared by C&E with the Mainland Customs.

13. After the 1st judgment was handed down and before the order was sealed, C&E and the Department of Justice applied to vary one of the orders of relief being the declaration that section 21(1)(a) of the IEO is unconstitutional. They sought a remedial interpretation of this provision to make it compliant with the Basic Law and the Hong Kong Bill of Rights (“HKBOR”). By a judgment handed down on 16 April 2015 (“the 2nd judgment”), the judge refused the application for remedial interpretation.

14. Two appeals (CACV 97 of 2015 and 107 of 2015) were brought by C&E and the Department of Justice to challenge the decisions against them in the 1st and 2nd judgments. For ease of reference, the appellants will be referred to in this judgment as “C&E” and the respondents to the appeals, who are the applicants to the judicial review, will be referred to as “the applicants”.

15. The applicants brought a cross-appeal in CACV 97 of 2015 to challenge the finding that they have failed to show there was impropriety in the decision of C&E to apply for the 16 warrants. They sought to vary the judgment asking for a declaration that the remaining three warrants (numbered 6, 7 and 15) are invalid and consequential relief regarding the seizures made thereunder.

16. The appellants appeared by Mr Wong Yan Lung, SC[2] and the applicants were represented by Mr Adrian Bell, SC[3].

A2. Factual background

17. For the purpose of these appeals, the background facts, as taken from the 1st judgment, may be stated as follows.

18. C&E has a substantial number of Hong Kong-Mainland cross-border smuggling cases and has maintained close liaison with the Mainland Customs. On 1 March 2000, C&E and the General Administration of Customs of the PRC entered into a “Co-operative and Mutual Assistance Arrangement” (i.e. a Customs Cooperative Arrangement, “CCA”), by which they agreed to “provide co-operation and mutual administrative assistance in accordance with [the CCA] to the extent that their respective law, authority, competence and resources allow, with a view to ensure the proper application of the customs law to combat violations of the customs law” (clause 1).

19. They agreed to exchange available intelligence on their own initiative or on request (clause 2). Intelligence for this purpose would cover “intelligence which may be useful for the other party in the investigation of activities in violation of the customs law” and “intelligence in respect of the sources of illicit goods and illicit...

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