P v The Commissioner Of The Independent Commission Against Corruption

CourtCourt of Final Appeal (Hong Kong)
Judgment Date31 May 2007
Citation[2008] 1 HKLRD 214; (2007) 10 HKCFAR 293
Judgement NumberFACC11/2006
SubjectFinal Appeal (Criminal)
FACC000011/2006 P v. THE COMMISSIONER OF THE INDEPENDENT COMMISSION AGAINST CORRUPTION

FACC No. 11 of 2006

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 11 OF 2006 (CRIMINAL)

(ON APPEAL FROM HCCM NO. 17 OF 2006)

____________________

Between:

P Appellant
and
THE COMMISSIONER OF THE Respondent
INDEPENDENT COMMISSION AGAINST CORRUPTION

____________________

Court: Chief Justice Li, Mr Justice Bokhary PJ, Mr Justice Chan PJ, Mr Justice Ribeiro PJ and Lord Millett NPJ

Dates of Hearing: 11 and 16 May 2007

Date of Judgment: 31 May 2007

______________________

J U D G M E N T

______________________

Chief Justice Li:

1. Corruption is an evil which cannot be tolerated. For the purpose of combating corruption, special powers of investigation have been conferred by statute on the Independent Commission Against Corruption (“the ICAC”). These powers are necessary as crimes of corruption are inherently difficult to investigate and prove. But as their exercise intrudes into the privacy of citizens, the statutory scheme provides that they are exercisable only after judicial authorization has been obtained. In this way, the scheme seeks to balance the public interest in fighting corruption and the public interest in the protection of the individual.

2. A judicial safeguard is thus introduced between the citizen and the state. The need for independent scrutiny by the courts provides protection for the citizen against the unjustified use of the special investigatory powers. This appeal raises questions of principle concerning the special investigatory power in s. 14(1)(d) of the Prevention of Bribery Ordinance, Cap 201 (“the POBO”) and the proper functioning of the judicial safeguard. (References to sections in this judgment are to sections in the POBO save where otherwise stated).

The ex parte Order

3. On 8 May 2006, upon the ex parte application of Mr Au Kwan-lung (“Au”), an investigating officer of the ICAC supported by his affirmation, Deputy Judge M Poon (“the Judge”) of the Court of First Instance (“the CFI” or “the court”) granted an order authorizing the Commissioner of the ICAC (“the Commissioner”) to issue a notice in writing under s. 14(1)(d) to the appellant (“the ex parte Order” or “the Order”). This provision relates to the obtaining of information and documents from a non-suspect. The application was dealt with on the papers without an oral hearing. No draft notice was placed before the Judge. The Order recited that it was made “upon hearing Counsel for the Applicant” and that the Judge was satisfied that there are reasonable grounds for suspecting that an offence or offences under the POBO has or have been committed. The authorization given by the Order was in these terms:

“The Commissioner of the [ICAC] be authorised to issue a notice in writing under Section 14(1)(d) of the [POBO] to [the appellant].”

The Notice

4. Nearly ten days later, on 17 May 2006, pursuant to the Order, the ICAC served a notice under s. 14(1)(d) dated 15 May 2006 on the appellant (“the Notice”). It was signed by the Deputy Commissioner. Para 1 stated that an investigation was being carried out into offences suspected to have been committed under the POBO by three named persons. Para 2 stated:

“I believe that you are acquainted with facts relevant to the above investigation and in exercise of the powers conferred on me by Section 14(1)(d) of [the POBO], and pursuant to [the ex parte Order made on 8 May 2006] under Section 14(1) of [the POBO] (copy attached), I hereby require you to produce or deliver or otherwise furnish to [Au], an investigating officer of [the ICAC] the original or a copy of any document in your possession or under your control or to which you may reasonably have access (not being a document readily available to the public), namely the financial statements, general ledgers, profit and loss accounts, vouchers and deposit and withdrawal records of the safe(s) of [a named Mainland company] from 1st January 2002 to 31st December 2005, which, in his opinion, may be relevant to the said investigation.”

Para 3 specified the period of 28 days from the date of the notice for compliance. The final paragraph referred to the criminal offences and penalties for failure to comply with the notice without reasonable excuse and for making any false statement in answer to the Notice. As stated in the Notice, a copy of the Order was attached.

5. Au’s affirmation in support of the application for the Order is protected by public interest immunity although such immunity will lapse at some stage. R v Inland Revenue Commissioners, Ex parte Rossminster (“Rossminster”) [1980] AC 952 at 999B-D, 1001A-B, 1011A-1012D, So Wing Keung v Sing Tao Ltd (“Sing Tao”) [2005] 2 HKLRD 11 at 59F-J. The notice of motion for the application may also be protected. In accordance with the confidentiality provision in Order 119 r 5 of the Rules of the High Court, Cap 4 (“the Rules”), these documents have been placed in a sealed packet and no person is able to gain access thereto except by an order of a judge.

The background

6. The background to the Order can be shortly stated. As stated in the Notice, the ICAC was conducting an investigation into offences under the POBO suspected to have been committed by three named individuals. They were the chairman, the chief executive officer and the purchasing manageress of a listed company. Its wholly owned subsidiaries include two incorporated in Hong Kong and the Mainland respectively (“the HK subsidiary” and “the Mainland subsidiary”). The group is engaged in manufacturing and trading. The Mainland subsidiary carries on manufacturing in Zhongshan in the Pearl River Delta close to Hong Kong. It is the Mainland company named in the Notice. Its documents specified in the Notice are located in Zhongshan. The POBO offences which the three individuals were suspected to have committed related to their alleged involvement in soliciting and receiving illegal rebates from suppliers for placing orders.

7. The ICAC had reason to suspect that the rebates were initially paid into bank accounts of the purchasing manageress. Subsequently, a substantial part of the monies was paid into the HK subsidiary’s account. Its accounting records did not show these sums as rebates or discounts. Part of the sums were recorded as “inter-companies items held on behalf of [the Mainland subsidiary] for [its named contractor] in the Mainland” and the balance was booked into a “contra account” of the HK subsidiary. The ICAC believed that substantial sums were subsequently withdrawn over a period from the HK’s subsidiary’s bank account by cash cheques and that a substantial sum in cash was taken to Zhongshan and placed in the Mainland subsidiary’s safe.

8. The chairman is the controlling shareholder of the listed company and is the appellant’s father. Over 10 months before the Order was made, on 20 June 2005, the chairman, the chief executive officer, the purchasing manageress and some suppliers were arrested by the ICAC. Shortly thereafter in late June 2005, the appellant became the chairperson of the listed company upon her father’s resignation and an executive director. Since August 2005, she, replacing her father, has been the managing director and the statutory representative of the Mainland subsidiary and its directors have consisted of the appellant, her sister and one other.

9. On 21 June 2005, the day after the arrests, ICAC officers in the company of officers of the Anti-Corruption Bureau of the Guangdong Province People’s Procuratorate paid a visit to the premises of the Mainland subsidiary and its contractor (named in the accounting entry referred to above) in Zhongshan. The Mainland subsidiary provided the ICAC with certain accounting records. However, according to the ICAC, these records did not relate to the sums they were investigating.

The appellant’s challenge

10. The appellant did not comply with the Notice. Her excuse was that the Mainland subsidiary had rejected her request for the documents on the ground that providing them to her “to carry” to Hong Kong would contravene Mainland laws. According to the appellant, she did not participate in the board’s deliberation on this matter. On 14 June 2006, the appellant applied by summons to the Judge to set aside the ex parte Order, the Notice and its service. Affirmations were filed by the appellant and Au of the ICAC in this application. She contended that in law the ex parte Order and the Notice could not extend to documents outside Hong Kong. Further, she relied on the non-disclosure by the ICAC on the ex parte application of the fact that they had obtained some documents from the Mainland subsidiary on their visit to their premises in Zhongshan on 21 June 2005.

The Judge

11. On 28 September 2006, the Judge dismissed her application. She held that (1) She has jurisdiction to set aside the ex parte Order and the Notice under Order 32 r 6; (2) The criteria laid down in the POBO do not require the court to consider where the documents are located; and (3) The alleged non-disclosure did not go to any issue she had to decide and was not material.

12. In November 2006, the appellant was arrested by the ICAC and charged with the offence of non-compliance with the Notice. The hearing of that case has been adjourned pending the hearing of this appeal.

Leave to appeal

13. On 13 December 2006, the Appeal Committee certified the two points of law referred to below and granted leave to appeal on those points.

The questions

14. The questions before the Court are:

(1) Whether the CFI has the jurisdiction to set aside or vary the ex parte Order, and if so, what grounds may be entertained by the CFI in exercising this jurisdiction under the statutory scheme (“the jurisdiction question
...

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