Henry Litton: Red Alert: Hong Kong Judicial Independence Under Existential Threat (Comment on the Admission of Owen KC)

Red Alert: Hong Kong Judicial Independence Under Existential Threat

The distressing tale of the admission of Owen KC to the Hong Kong Bar

Henry Litton 

Does the National Security Law (NSL) by itself render unlawful an act of a High Court judge plainly lawful under common law? If trust in the foundation of the legal system were sorely shaken, like an earthquake, it cannot be easily restored.

Introduction

The common law shares fundamental values right across the globe, but the practice and procedures of the courts often differ. Barristers play an important role in that process. An outside perspective has sometimes proved extremely valuable in throwing light on particularly complex issues.

The Court’s discretion in ad hoc admissions

Because there is a strong public interest in the proper administration of justice, s.27(4) of the Legal Practitioners Ordinance confers a broad discretion on the High Court to admit barristers from overseas to conduct particular cases in the local courts. This is referred to as ad hoc admissions, the judicial discretion to be exercised on a case by case basis.

     How to discharge the functions under s. 27(4) is a matter largely of value judgement, and there is no one better qualified to do that than a seasoned High Court judge. The criteria for that exercise are well established. Apart from personal qualifications and the nature of the case involved, there is the question whether the barrister concerned would add a significant dimension to the case.

      All this is covered by Article 94 of the Basic Law which provides as follows:

“On the basis of the system previously operating in Hong Kong, the Government of the Hong Kong Special Administrative Region may make provisions for local lawyers and lawyers from outside Hong Kong to work and practise in the Region”.

The focus of ad hoc admissions

As can be seen, the discretion to admit an overseas barrister under s.27(4) is narrowly focussed. It is concerned with case management. The public interest involved is the proper conduct of legal proceedings and the part to be played by the barrister in that process, in relation to the particular case for which he has been briefed.

     How this purely domestic matter has evolved to become one of international notoriety, fomenting a constitutional crisis in Hong Kong of gigantic proportions is, to say the least, surprising and disturbing. This distressing story is set out below.

The prosecution of Mr Lai Chee Ying for sedition

When Mr Jimmy Lai Chee Ying, founder of the newspaper Apple Daily, faced serious criminal charges, his solicitors engaged the services of Mr Timothy Owen KC from the United Kingdom to lead a team of local barristers.

      Mr Lai is charged with conspiracies with three others. The indictment falls under two broad headings: (1) conspiracies to publish and distribute seditious material contrary to sections 10, 159A and 159C of the Crimes Ordinance and (2) conspiracies to collude with a foreign country or external elements to endanger national security, contrary to Article 29(4) of the NSL.

Mr Owen KC’s ad hoc admission to the Hong Kong Bar

In order to render legal services in Hong Kong, Mr Owen KC applied for an ad hoc admission. His application was supported by a counsel’s certificate setting out matters that might arise at the trial (or before the trial as preliminary issues) including the scope and reach of NSL 29(4), the interface between that provision and the fundamental rights and freedoms under Chapter III of the Basic Law. The certificate also envisaged a challenge to the constitutionality of the provisions in the Crimes Ordinance under which Mr Lai was charged.

     No question arose regarding Mr Owen KC’s qualifications. He was described by the Court of Appeal as “a renowned specialist in criminal, public and human rights law, with substantial experience in cases concerning national security and freedom of speech. He has a wealth of experience in different jurisdictions and has appeared before the courts of Hong Kong in quite a few important cases”.

     He was not, of course, briefed to deal solely with the issues raised in counsel’s certificate. The trial was scheduled to last many weeks and his main responsibilities would be to deal with the evidence and other issues as the trial proceeds, leading the local team.

     As regards s.10 of the Crimes Ordinance under which Mr Lai was charged, this has been in the statute book since colonial times and Mr Owen KC would plainly have much to contribute to the constitutional issue said to be involved concerning that section, if indeed he should think such a challenge appropriate.

     As regards the interpretation and application of NSL 29(4), the Court of Final Appeal has, in an earlier case concerning Mr Lai’s bail application, embarked upon a detailed analysis of the compatibility between provisions in the NSL and those appearing in the Criminal Procedure Ordinance. The CFA, with great skill, navigated comfortably in those troubled waters; there is no reason to think that NSL 29(4) would pose insuperable problems in Mr Lai’s prosecution in a common law court, handled by a common law barrister of Mr Owen KC’s standing.

     Mr Owen KC’s application was dealt with by Poon CJHC on paper who, applying well-worn criteria, allowed the admission.

Court of Appeal

The Secretary for Justice was dissatisfied and took the matter on appeal to the Court of Appeal (Kwan VP, Chu VP and Au JA). That court found no basis to interfere with Poon CJHC’s exercise of judicial discretion and dismissed the appeal, adding that if they were to exercise the discretion afresh, they would have reached the same conclusion.

      They then made this caveat: 

“The forthcoming criminal trial is a high profile case attracting substantial publicity locally and abroad. It involves the resolution of legal issues of great general public importance that would impact substantially on the development of NSL jurisprudence and sedition offences. Public perception of fairness in the trial is of vital importance in the administration of justice. The court must adopt a flexible and sensible approach to arrive at a decision that would best suit the public interest in this application. It is clearly in the public interest to grant the application for admission on grounds of public perception as well as the other grounds that have been canvassed”.

     In dismissing the Secretary’s appeal, the court ordered the applicant’s legal costs to be paid by the government.

The Secretary’s application for leave to appeal to the CFA

On 15 November 2022 the Secretary for Justice lodged a Notice of Motion seeking leave to appeal to the CFA. This consisted of two dense pages of submissions, raising entirely new points for rejecting Mr Owen KC’s ad hoc admission, never mentioned before in the proceedings. Considering that the trial was due to start on 1 December, this must have been received by the Court of Appeal with a sense of shock. Because of the imminence of the trial, the Court of Appeal also dealt with the matter on paper.

     It is difficult to make sense of the new points advanced by counsel Mr Rimsky Yuen SC on the Secretary’s behalf. The Court of Appeal must have found the same difficulty. Instead of trying to summarise the points made (said to be of great and general importance) the entire text of the Notice of Motion was set out in the judgment.

     The first point was this: when, in respect of an NLS-related case, an application for ad hoc admission is made under s.27(4) of the Legal Practitioners Ordinance, the “public interest” to be considered must “arise” from the “uniqueness of NSL” which should “generally take precedence and/or override other public interest considerations”. That was because the NSL was a national law of the PRC which has a “continental legal system”.

Where this leads to is not clear

The second point was this: the ad hoc admission of overseas counsel in cases involving NSL was “incompatible with the overall objective and design of the NSL; the involvement of overseas barristers in national security cases would itself pose a national security risk”.

     In elaboration of this new point, counsel argued that overseas counsel might, in the course of conducting a case, come into possession of 'state secrets', and there was no effective means of enforcing confidentiality in regard to such secrets. This was rejected out of hand by the Court of Appeal: firstly, because factually the criminal trial involved no state secrets and secondly Mr Owen KC was bound by his own professional rules which apply wherever the courts might be and “whatever law they may be applying”.

     The truly startling thing is this: At every stage of the proceedings the Secretary was represented by senior counsel. The proposition now put forward is fundamental; there would have been no point in discussing the merits of Mr Owen KC’s ad hoc admission, however elevated, if Poon CJHC’s discretion under the Legal Practitioners Ordinance had been overridden by the NSL; Poon CJHC would, in effect, have exceeded his legal authority in admitting Mr Owen KC to the Hong Kong Bar under s. 27(4).

      But there was not a whisper of this in the lower courts. It wasn’t till the application for leave to appeal against the Court of Appeal’s judgment that the point was put forward in the Notice of Motion, when the Secretary was represented by a different counsel Mr Rimsky Yuen SC.

      What, then, were other leading counsel doing in the lower courts? Was Mr Yuen SC putting forward points of argument of his own invention, dreamt up for the first time, or was he acting under instructions from the Secretary for Justice? Had other counsel in the lower courts in fact considered those points and had them rejected as totally without merit?

       The overall purport of Mr Yuen SC’s submissions was that the judicial discretion in s.27(4), exercised by the First Instance judge in Mr Owen KC’s favour, was in some way fettered or eliminated by the provisions of the NSL; this required the judge to dismiss Mr Owen’s application.

      This was roundly rejected by the Court of Appeal. That court said that the discretion was 

“to be exercised in a judicial manner …..assisted by relevant principles and guidelines laid down in the authorities over time. If [ counsel’s ] contention is upheld, the court would no longer be required to carry out a balancing exercise of the relevant aspects of public interest in a flexible and sensible manner to arrive at a decision that best suits the public interest ….Its discretion could only be exercised in a particular way”.

       The Secretary’s application for leave to appeal was dismissed and, following the usual rule, the legal costs were awarded against the Secretary: in other words, the taxpayers had once more to foot the bill.

The Secretary’s application to the Appeal Committee of the CFA

The Secretary renewed his application for leave to appeal before the Appeal Committee of the CFA (Cheung CJ, Ribeiro PJ and Fok PJ), insisting that where an ad hoc admission involved cases under the NSL the normal criteria were no longer appropriate and a radically new approach had to be adopted. It was argued by counsel that there should in effect be a blanket ban on ad hoc admissions in NSL cases subject only to undefined “exceptional circumstances”. This would effectively mean that the court should be deprived of its statutory discretion.

     From what was a purely case management matter, it has been blown up into a cause celebre, with far-reaching consequences unforeseen.

      One of the matters put to the Appeal Committee by counsel for the Secretary was this: the admission of any overseas counsel (not simply Mr Owen KC) in NSL cases would tend to defeat the aim of countering “interference in the HKSAR’s affairs by foreign or external forces”. This is an alarmingly wide proposition with strong political flavours, destructive of the discipline of law. There was no scintilla of evidence in support of such submission.

     In refusing leave to appeal, the Appeal Committee was at pains to emphasise the importance of suppressing activity endangering national security, as required by NSL 3. But such issues must be properly raised, to enable the court to deal with them competently. Here the Secretary has, as the Committee said, “fundamentally changed his case only at the stage of seeking leave to appeal to this Court, raising undefined and unsubstantiated issues said to involve national security which were not mentioned or explored in the courts below. No appropriate basis has been made out for the grant of leave to appeal”.

     Applying the well-known Flywin principles (named after the CFA case Flywin Co Ltd v Strong & Associates Ltd where the court, in essence, determined it would not entertain points not raised in the courts below, unless there were exceptional circumstances) the Appeal Committee dismissed the Secretary’s application, with the usual order for legal costs awarded against the government.

      The Appeal Committee gave its determination with admirable promptness, on Monday, 28 November, leaving two clear days before the trial due to start on Thursday, 1 December. Mr Owen KC’s right of audience to represent Mr Lai at the trial was now firmly established and unchallengeable.

The trial postponed

The defendants have been detained in prison pending trial for a very long time. There was a strong public interest in having the trial brought on as soon as possible. That duty fell on the Secretary for Justice. Indeed, NSL 42 itself required him to ensure that cases concerning national security be handled in a “timely manner”.

      And yet, the trial has been postponed to an indefinite date next year. Why? Was this on the Secretary’s initiative? His professional duty was clear: to bring on the trial as soon as possible. So the question creeps in: was there political interference in his decision-making?

      He had “control of criminal prosecutions, free from interference”: Basic Law 63. Why did he not act as his duty clearly required, in a strong and resolute manner, and have the trial commence on Thursday, 1 December as arranged?

       This naturally has led to much speculation in the media. There are press reports suggesting that the Chief Executive has referred the matter to the Standing Committee of the National People's Congress (NPCSC) for an “interpretation” of the NSL, whatever that means.

      An article in The Australian (Australia’s leading national newspaper), 15 December 2022 edition, under the heading “Barrister row puts Lai trial on hold” reads:

“The trial of Jimmy Lai, the jailed Hong Kong publisher, on national security charges has been postponed for more than nine months while the Chinese authorities try to prevent a British barrister from defending him. Mr Lai, known for his outspokenness against Beijing … had instructed Tim Owen KC, from Matrix Chambers in London, to represent him on charges of colluding with foreign forces, causing a row over whether the barrister is eligible to do so. The Hong Kong government has appealed to Chinese officials in Beijing to decide on the matter, but without a quick answer, the territory’s High Court decided on Tuesday to adjourn the trial until September next year.... Mr Lai’s trial is seen as part of China’s attempts to stifle press freedom in Hong Kong in the wake of the 2019 pro-democracy protests in the former British colony... After Hong Kong’s highest court refused to hear a government appeal against the barrister’s case, John Lee, the territory’s chief executive, asked the standing committee of the National People’s Congress, the Chinese parliament, to give a ruling. The Hong Kong government argues the involvement of overseas lawyers in national security cases would itself pose a risk. The standing committee, which convenes this week, has not listed the item on its agenda”.

The NPCSC’s involvement?

If the facts stated in this article are accurate, it is difficult to see how the NPCSC could be involved in any way.  The sole matter before the court was Mr Owen’s ad hoc admission. The sole legal issue arising therefrom was Poon CJHC’s exercise of judicial discretion under s.27(4) of the Legal Practitioners Ordinance. He did so under clear common law principles, as Basic Law 8 so required.

      He was simply dealing with a matter of case management for the better conduct of the criminal trial. This could be of no possible concern to the NPCSC. What is more, it is now a fait accompli. Mr Owen has as full a right of audience at that trial as any other barrister. But the government seems to still insist that Mr Owen’s ad hoc admission is unlawful, seeking a radical change in the legal landscape.

       The matter having been escalated to such levels, it is difficult to see a happy outcome. If Mr Owen’s ad hoc admission to the Hong Kong Bar could become the subject of Beijing’s exercise of sovereign power, overturning Poon CJHC’s lawful discharge of judicial functions, the judiciary’s independence would have been torn to shreds, Hong Kong’s high degree of autonomy destroyed, with incalculable consequences to follow.

     Would the government thwart Mr Owen KC’s appearance in court by other means when the criminal trial at last begins perhaps next year? Say, to deny him an entry permit? That is now, alas, an open question.

Where does this lead?

In the life of nations, and of communities, a small mistake, an act of neglect, rashness, or unmindfulness could lead to disastrous consequences.

Public perception

The Court of Appeal, wisely and presciently, highlighted the importance of flexibility and common sense in the approach to this matter, saying that public perception of fairness in the trial is “of vital importance”, both locally and overseas.

     Here, the Secretary wore 'two hats'. He was both the prosecuting authority and 'the protector of public interest'. What role did he play when he first opposed Mr Owen KC’s ad hoc admission?

      Once Chief Judge Poon had ruled on the matter, why did the Secretary appeal that decision, repeating the same arguments in the Court of Appeal? When his primary responsibility was to ensure a fair trial as soon as possible, why did he persist in his attempt to exclude Mr Owen KC from acting for the defence? His then counsel Mr Benjamin Yu SC acknowledged that it was a pure matter of appeal against the exercise of judicial discretion and that the established principles applied to such an appeal. How could the Secretary have imagined that such an appeal had any chance of success?

      Was the Secretary not aware of the fact that the more he pursued that goal the stronger the perception that he was seeking an unfair advantage over the defence?

      The fact that the trial has been adjourned raises other troubling questions: what representations did the Secretary make to the trial court to cause it to postpone the trial? Why did the court order an adjournment, and a lengthy one at that, when public interest required adherence to the trial dates which had been set long in advance?

Conclusion

If the matter causing this sequence of events is 'state secrets', the source must come in the first place from the State: that is to say, the prosecuting authorities.

      It is a fact that no state secrets are involved in this case. But take the hypothetical situation where 'state secrets' become an important ingredient in the prosecution case. The government has a choice: to use it evidentially, thereby it ceases to be secret, or not to use it. In the latter case, if it contains material relevant to the defence, it must be disclosed as “unused material” under common law rules. Counsel for the prosecution would surely then seek the judge’s ruling, in camera, whether this duty of disclosure must be discharged. The responsibility then passes to the judge. The common law is well-equipped to deal with such a situation.

       This is all predicated on the basis that counsel for the prosecution can be trusted to safeguard state secrets, come what may.  Assume that a local senior counsel leads the prosecution team. Will this call for an inquiry into his background before he can be briefed? What is his record while a student? Does he have a foreign passport, dual nationality? Does he have a second home overseas? Does he have close family ties overseas?

      Mr Owen KC was not briefed for the prosecution. He was briefed for the defence: one frame removed, as it were, from the prosecution as regards state secrets. If he cannot be trusted to act professionally, what about senior counsel in Hong Kong who have foreign passports, dual nationality, second homes, close family ties overseas? Can they be trusted?

      This involves counsel, but what about judges? Can they be trusted to be true to their oaths of office if they have foreign passports, dual nationality, second homes, close family ties overseas?

Where will such mistrust ultimately lead?

Did this lead to Mr Rimsky Yuen SC putting forward the propositions that the discretionary power in s.27(4) of the Legal Practitioners Ordinance was “incompatible with the overall objective and design of the NSL” and that “the involvement of overseas barristers in national security cases would itself pose a national security risk”?

      It is like an earthquake. Once trust in the foundations of the legal system is sorely shaken, stability cannot be easily restored. The legal landscape would have changed forever. The rule of law, as it exists today, will be gone.

Henry Litton on The Stranglehold of Black Letter Law (Comment on Kwok Cheuk Kin v Secretary for Health)

   THE  STRANGLEHOLD  OF  BLACK  LETTER  LAW

Introduction 

The case of Kwok Cheuk Kin v Secretary for Health [2022] HKCFI 3225 (Coleman J) shows how, in the field of public law, lack of judicial discipline squeezes common sense out of the system, resulting in a suffocating stranglehold on the administration.

The Vaccine Pass regime

When the “fifth wave” of the Covid-19 pandemic sparked by the Omicron variant hit Hong Kong, the Prevention and Control of Disease ( Vaccine Pass ) Regulations, Cap 599L, were promulgated. Section 3(1) conferred wide powers on the Secretary for Health to devise measures to deal with the situation.  The Vaccine Pass regime was brought in, comprising many different components. These measures were introduced incrementally as the situation shifted.

      On 21 February 2022 the Secretary, in implementation of that regime, published directions applying to a wide range of public venues including shopping malls, supermarkets, places of public entertainment, sports premises, buses, the MTR etc, which required persons entering to have been vaccinated, as evidenced by a Vaccine Pass.

      At the time this scheme came into effect, many people had received their three doses of vaccines, following a prescribed time table, qualifying for a Vaccine Pass. But many others were unvaccinated, particularly amongst the elderly; and some were unvaccinated for underlying health reasons.

Medical Exemption

Hence, when the Vaccine Pass regime was set up, an exemption was introduced. If a person carried a Medical Exemption Certificate issued by a registered medical practitioner, certifying that he had been “assessed as medically unsuitable for vaccinations”, he was exempt from the Vaccine Pass requirements under the Regulations.

      It was probably thought at the time that such exemption would be relatively rare.

Enforcement

Plainly, the government did not have the resources to police the venues and facilities to ensure that the Vaccine Pass regime was enforced. The burden was cast on the “person-in-charge” of each venue or facility to inspect the Vaccine Pass or the Exemption Certificate, to exclude those who did not qualify, to collect the information and to pass that on to the Health Department.

      Each of the places was required to display a notice as follows:

“Vaccine Pass Applicable Premises

This is a premises subject to active checking of Vaccine Pass under the Vaccine Pass Direction issued by the Secretary for Health pursuant to the Prevention and Control of Disease ( Vaccine  Pass ) Regulation ( Cap. 599,sub. Leg.L ). Every person who enters or remains on this premises is required under the law to have been vaccinated in the manner specified in the Direction, unless he or she is an exempted person …..The person-in-charge of this premises is required under the law to  ensure that every person who enters or remains on this premises to have been vaccinated …”

Abuse of the Medical Exemption regime

Towards the end of September 2022, the Health Department became aware of abuse of the exemption regime. Suspicion was focused on seven private doctors who, collectively, had issued over 20,000 certificates.

      For example, one of those doctors, on one day, had issued 382 certificates. It was utterly impossible that he could have assessed each of those patients as “medically unsuitable for vaccination” before issuing the certificate as s. 17(1)(a) of the Regulations required.

      It would have needed enormous resources, which the Health Department lacked, to study each of those people to see if it was fraudulent. Yet, this was a serious health issue involving a huge number of persons who might gain entry to shopping malls, supermarkets etc, on the basis of fraudulent certificates, spreading the highly infectious Omicron variant of the disease.

      A broad-brush approach had to be adopted and urgent action was required. As enforcement of the Vaccine Pass regime was left to persons in charge of the venues, they had to be alerted to this situation as soon as possible, and in the clearest possible terms. Plainly they could not have been contacted individually. The most effective way was through a press release.

Action taken by the Health Department

On 27 September 2022 the government issued this press release in Chinese and in English :

“Regarding individual private doctors suspected to have failed to provide proper medical consultations to patients in accordance with the guidelines of the Department of Health and abused the issuance of COVID-19 Vaccination Medical Exemption Certificates, the government announced today ( September 27 ) that all Medical Exemption Certificates issued by the private doctors concerned will not be accepted and will be invalidated from October 12 onwards. Members of the public who hold a Medical Exemption Certificate issued by the private doctors concerned may consult other doctors depending on their needs to determine whether they are suitable for receiving COVID-19 vaccination, or may continue to be medically exempted……… ………Having considered that the citizens concerned may need time to consult other doctors, the Medical Exemption Certificates issued by those seven private doctors will be deemed invalid from October 12 onwards”.

      The private doctors concerned, seven of them, were named in the press release, their places of work identified.  There was nothing more the Department could have done to deal with the situation.

      Unless the Department had gone radically wrong in assessing the situation, it would seem that the doctors, or at any rate many of them, were churning out certificates as if they were operating  printing machines, doubtless for substantial payment, in total disregard of their professional responsibilities, putting many people’ health at risk. It was a clear fraud on the system, though its precise extent had yet to be ascertained.

      There might have been a few cases, of course, where the person named in the certificate was, say, an old patient whose medical history was well known to the doctor, in which case it would not have taken much time for the doctor to make an assessment for exemption. Hence the Department allowed about two weeks before the certificates to become “invalidated” or be “deemed invalid”. That gave time to the patient to consult other doctors or go to a government outpatient clinic for an assessment.

Wording of the press release

There is no magic in the phraseology of the press release.  By the words “invalidated” or “deemed invalid”, all they meant was that the certificates were false -did not comply with the Regulations for exemption - and must be treated by all concerned as null and void. There was no other way any sensible person could have understood the press release.

      Section 17(1)(a) of the Regulations says:

“Specified medical exemption certificate

… for the purposes of this Regulation, a medical certificate is a specified medical exemption certificate only if the medical certificate ( a ) contains an opinion from a registered medical practitioner that the person to who it is issued is clinically assessed to be unsuitable for being vaccinated with whichever type of the specified vaccines …”.  

      A valid certificate issued in good faith expresses an opinion formed after a clinical assessment. These are actual happenings. If these conditions were absent there could be no valid certificate.

Kwok Cheuk Kin v Secretary for Health: Ex parte application for leave   

On 7 October 2022, Kwok Cheuk Kin, acting in person, lodged a Form 86 in the High Court seeking leave ex parte to commence judicial review proceedings against the Secretary for Health.

      The whole process is extremely odd.

       Nothing is known about the contents of Mr Kwok’s Form 86. Did it raise an arguable case in public law against the Secretary? If so, what did it say? What relief was sought in the application and what were the grounds on which it was sought?  ( Order 53 r. 3(2)(a)(iii) of the Rules of the High Court required these to be set out in Form 86 ).

      The papers went before Coleman J.

       As is now known, Mr Kwok was not one of those whose medical exemption certificate risked being “invalidated” on 12 October. What business was it of his that the certificates of others should be “invalidated”? He had no conceivable interest in the matter. Yet on 10 October  Coleman J granted leave on the papers, without a hearing.

      Was the judge not interested in compliance with Order 53 r.3(7)  which says that the court “shall not grant leave unless it considers that the applicant has a sufficient interest in the matter to which the application relates”? Or was he misled into thinking that Mr Kwok had standing under the rules? Did it not occur to him to query the applicant’s standing to bring the proceedings?

      Another odd aspect of the case is this. Having been given leave on 10 October, the applicant’s next step under the rules would have been to lodge an originating summons in Form 86A within 14 days, commencing judicial review proceedings against the Secretary. But something intervened. The judge convened a hearing on the next day ( 11 October ) because, he said, of the “potential urgency, namely that the impugned decision would come into effect on 12 October (tomorrow)”.

      “Urgency” said the judge. Urgency for whom? Surely not for Mr Kwok unless, of course, the judge thought that the “invalidation” of the exemption certificates the next day concerned him personally.

      But, as is now known, the applicant was not the holder of one of the questionable certificates: the judge said so in para 148 of his later judgment of 21 October, after an inter partes hearing.

      Mr Kwok had no standing to bring proceedings under the rules; from the very start he should have been barred from pursuing the application.

The 11 October hearing

The hearing on 11 October was, the judge said, for the purpose of considering whether “interim relief” should be granted, pending the inter partes hearing he had scheduled for 20 October.

      Did Mr Kwok ask for the interim relief or was the hearing arranged on the judge’s own motion? It must have been the latter – unless, of course, if Mr Kwok was doubling down on his deception that he was personally involved in the story, inventing an urgency which did not exist.

      When the matter is seen in the round, the impression given is that the judge was conducting a one-man band, playing to a tune firmly formed in his own head: that there was a legal issue to be resolved, namely the “impugned decision of the Secretary to invalidate certain specified medical exemption certificates issued under the Prevention and Control of Disease   ( Vaccine Pass ) Regulation Cap 599L” (para 4 of his Reasons for Decision of 11 October 2022).

      This impression is reinforced by the opening paragraphs of the Reasons for Decision which state as follows:

      “1. However desirable the intended result, there is a right way and a wrong way of going about it. In legal terms, there may be a lawful way or unlawful way of going about it.

      2. The question which arises in these proceedings is whether the impugned decision of the Secretary of Health was taken the right way, namely lawfully within his powers”.

      “Impugned” said the judge. Impugned by who? By Mr Kwok, acting in person? Or was this an issue raised by the judge himself?

      And the “key point”, said the judge, was the legality of the “Secretary’s decision”, having regard to the scheme in Cap 599L.

      Who’s “key point”?  Mr Kwok’s? Was he really concerned about compliance with the elaborate statutory scheme set out in Cap 599L?

Duty of full and frank disclosure

When an applicant goes before a court on an ex parte basis, he has a duty of full and frank disclosure, for obvious reasons. He levels accusations against an authority – here the Secretary for Health – behind that authority’s back. The ex parte judge has only the applicant to rely on for accurate information, to decide whether leave should be granted to proceed.

      Here the judge was led to believe that the applicant himself was among the persons whose medical exemption certificates were to be “invalidated” the next day ( 12 October ).  That, of course, would have meant that the applicant had satisfied the threshold requirement in Order 53 Rule 3(7) of the Rules of the High Court which says: “The Court shall not grant leave unless it considers that the applicant has a sufficient interest in the matter to which the application relates”.

      The words in Order 53 r.3(7 )“The Court shall not grant leave” are mandatory, they go to the court’s jurisdiction. It lacks jurisdiction to entertain the matter unless that requirement is met.

      There was no statement from Mr Kwok that he had been clinically assessed by his doctor, or that he had indeed a health condition justifying the issue of such certificate. As the judge said later on, “I would fully endorse the sentiment that the Applicant has been less than forthcoming” (para 157 of his later judgment of 21 October 2022 ).

Was there is real legal issue?

The judge appeared uninterested in the discipline required under Order 53 of the Rules of the High Court regarding applications for judicial review. His mind was set on “the correct approach to section 3 of Cap 599L, in the context also of the scheme of Cap 599L as a whole, and sections 4, 5, and 17 in particular”. This seems to have been so at the very beginning, leading him to treat the case as a “meritorious vires challenge” which, he said, struck at “the core of the rule of law” (paras 150 -151 of his 21 October judgment).

      This set the tone of his entire approach to the case, reinforced by the two opening paragraphs of his Reasons for Decision of 11 October as set out above. He was on a mission to safeguard the rule of law, holding the Secretary to strict legality.

       But was there a real issue, or simply a phantom one created by either Mr Kwok or the judge himself?

The inter partes hearing

On 20 October the parties appeared before the judge represented by senior counsel on both sides.

     There was no originating summons – Form 86A – before the court. The judge proceeded on an amended Form 86 ( the application for leave ). As amended the ground for review was as follows:

“Illegality: No power for the Secretary to overturn or invalidate a Medical Exemption Certificate or a selection of Medical Exemption Certificates”.

      How Mr Kwok had first formulated the issue in his Form 86, which caused the judge to give him leave on paper, is not revealed.

      The 36-page judgment subsequently handed down by the judge is a formidable document in terms of its weight in words. Stripped of verbiage, it was common ground that there were “strong and legitimate doubts” as to an unknown number of “questionable” medical exemption certificates, and that the Secretary faced “an unfolding public health emergency” (paras 98 & 99).

The ground for relief

The formal order made by the judge, at the end of the hearing, on the basis of the ground for relief put forward in the amended Form 86, was as follows:

“An order of certiorari quashing the Decision and those parts of the Directions which give effect and/or implement the Decision”.

      The “Decision” to which the formal order referred was said to be the Secretary’s “decision to invalidate” the exemption certificates issued by the seven doctors.

      In the judge’s view ( para 128 ), the Secretary had no legal power to invalidate a medical exemption certificate as defined by s.17 of Cap 599L.

       That was, in one sentence, the basis of the judge’s quashing order (“certiorari”).  Nothing turns separately on the “Directions” referred to in his formal order.

      This brings one back to the press release of 27 September where it was announced that the questionable certificates would not be accepted and would be “invalidated from October 12 onwards”.

Exercise of power?

The judge took this as an exercise of power by the Secretary and posed the question: where is the legal power behind such act? He premised this approach in the first sentence of his judgment by saying: “A Government minister gets his or her legal powers from legislation – and not from an announcement made in a press release”.   

      At the hearing there was a lengthy debate as to the meaning of the English words “validity” and “invalidity”, and a query as to whether they accurately reflected the Chinese version. This was in the context of the Secretary having exercised power to “invalidate” the certificates (paras 23 -25 of the judgment). It was a sterile debate.

      The short answer to the point is that, with regard to those certificates, the Secretary exercised no power of any kind. That had been done long before when he set up the Vaccine Pass scheme. In the press release of 27 September he was giving notice to the world, and in particular to the persons in charge of venues and facilities, that the certificates issued by the seven named doctors were an abuse of the system and that, as from 12 October, no one should regard those certificates as having any validity.

      The Secretary did nothing to “invalidate” the certificates. That was done by the doctors themselves in issuing them without clinical assessment as s.17 of the Regulations required. Full stop.

      Whether the Secretary was wise to have left the matter hanging in the air until 12 October is debatable. It was to give time to a possibly very small number of patients who might have had a genuine health problem justifying an exemption. But it also left open a window of opportunity of about two weeks for the virus to spread.

       None of the seven doctors came forward to say the Secretary was mistaken. Perhaps even more telling is the fact that not one of the 20,000 certificate holders did either.

      The bulk of those certificates was fraudulent; that was an established fact. There was simply no room for the judge’s intervention. He took the view that the Secretary had “invalidated” those certificates when, in fact, it was the doctors themselves who did that. The Secretary was simply dealing administratively with the consequence of such invalidity.

      Put simply, there was no act of a public authority capable of being “quashed” in terms of s.21K of the High Court Ordinance. What the judge did was outside the statutory scheme controlling judicial reviews. In condemning the Secretary for acting without legal authority, it transpired that it was the judge himself who had so offended.

The aftermath

This unwarranted intervention by the High Court left the administration in a quandary. So long as the judge’s order stood, it had to be respected. The effect of the order was to prolong the validity of those certificates beyond 12 October. Most of them were not due to expire until November. So what to do? There was, as the judge said, “an unfolding public health emergency”. An appeal would take too long.

      So the government acted by adding a provision to Cap 599L: s.17A , entitled “Invalidation of individual medical certificates”, empowering the Secretary to “declare” questionable certificates invalid.

      This was adding an unnecessary cog to an already unwieldy administrative wheel.

       The judicial review process is about good governance. The judge’s intervention through that process created more complications to the Vaccine Pass regime, adding more red tape.

      There was, almost immediately after the amendment to Cap 599L was published, an attack on s.17A.  The newspaper report about it was that the attack failed.

      Thus the saga ended. Another dent to the rule of law.

Henry Litton on The Case of the Wolf and the Sheep in Hong Kong (Pearls and Irritations)

The Case of the Wolf and the Sheep in Hong Kong
Henry Litton

Pearls and Irritations

27 Nov 2022

Recently, a correspondent on Australia’s national broadcaster casually referred to Hong Kong as a “police state”. This ignores that the courts operate under common law rules. The role of the judge is key. They are not mouth-pieces of the central government. In HKSAR v Lai Man-ling & 4 Others, Hong Kong’s image overseas has been tarnished by a decision to convict people for writing a children’s book, a judgement which no one can understand and which was wrong.

Radio National is Australia’s national broadcaster, exercising wide influence.

In commenting on the outcome of the recent 20th Party Congress whereby Mr Xi Jinping’s term as General Secretary of the Chinese Communist Party was extended for another five years, the correspondent casually referred to Hong Kong as a “police state”. This was not an isolated incident. Many Western media outlets, in commenting on criminal convictions by the Hong Kong courts in national security-related cases, have categorised those courts as mouth-pieces of the Central Government, ignoring the fact that the courts operate under common law rules and principles. To dispel such misconceptions – or to quash such bias – it is of importance that in reaching their verdicts courts should make their reasons clear, intelligible and transparent.

HKSAR v Lai Man-ling & 4 Others [ Criminal Case No.854/2021, 10/9/2022 ]

This brings into prominence the case where five university-trained speech therapists were convicted of conspiracy to publish and distribute seditious publications and sentenced to 19 months’ imprisonment. These were books of cartoons with accompanying commentary. The story line concerned wolves subjugating a village of sheep. The case has attracted worldwide attention. The District Judge’s Reasons for Verdict is 68 pages long, with 47 footnotes: dead on arrival for the average reader... Click here to read the full article.

Henry Litton Comments on Yeung Lai Ping v Secretary for Justice (CACV 206/2019)

Commentary on Yeung Lai Ping v Secretary for Justice (CACV 206/2019)

Henry Litton, Honorary Professor

HEALTH WARNING: Reading this article might arouse such sense of outrage it could damage your health, particularly for those suffering from high blood pressure.

Introduction

This is the story of a public health provider that cares neither for the welfare of its patients nor the health of its employees; and when an employee injured at work sought redress for harm done, the department deployed lawyers to crush her by the weight of black-letter law.

Background

Yeung Lai Ping (the plaintiff) qualified as a dentist when she was 23. She practised for about 4½ years, then resumed full-time studies, obtaining a Master of Dental Surgery degree when she was 30.

     In February 1997 she joined the Department of Health as a dental officer, and in the course of her practice performed a considerable number of surgical extractions (SX). This involved the removal of bone and cutting of teeth, operating in an awkward position and the use of some force. It also involved the use of hand-held drills for about 20-30 minutes in each session. The drill, inevitably, would transmit vibrations to the wrist.

     The wrist is prone to strain. The structure of the wrist comprises eight small bones, allowing it to be flexible. But sprain can easily occur, as typists and tennis players well know. The symptoms are pain, numbness and swelling. Repeated over-exertion might result in carpal tunnel syndrome and triangular fibrocartilage tear. These are very serious conditions.

Work at North District Hospital

In September 1998 the plaintiff was posted to work as a dental officer in the dental unit of North District Hospital (NDH): a newly opened hospital. The dental unit had only two dentists – the plaintiff and Dr Tsui, her supervisor.

     Prior to working in NDH the plaintiff had no problem with SX. Her patients were well-served by her exercise of skill in surgical extraction operations.

     Her work schedule at NDH was gruelling. Her appointment book was marked three months in advance. The number of SX required of her was far greater than that of Dr Tsui. Between October 1998 to September 1999 she performed 710 SX. Over the same period Dr Tsui did 479 SX.

    Her work in NDH over a period of 13 months resulted in her developing carpal tunnel syndrome and triangular fibrocartilege tear. This eventually ended her career as a dentist.

The legal proceedings

On 2 September 2002 the plaintiff issued a writ seeking damages against the government. It was not until 14 years later that the action was heard in court. That took place in December 2016 and March 2017. Judgment was delivered in April 2019. The judge found that the department had failed to maintain a safe and healthy workplace and had breached its duty of care to the plaintiff. She was awarded substantial damages and costs.

The findings of fact

The plaintiff first developed symptoms in her right hand and wrist in mid-1999. This was known to Dr Tsui who had monitored closely her appointments. As the judge found, a reasonable and prudent employer had the duty to consider the plaintiff’s capabilities and condition, and adjust her duties particularly as regards SX. Those capabilities had, of course, a direct impact on her patients’ welfare. Because the dental unit was so short-staffed and the demands of the patients so pressing, there was no real choice that her SX might have been lessened.

     From July 1999 the plaintiff wore a hand splint and sought medical and physiotherapy treatment. Her work schedule did not diminish. In October she took three weeks’ sick leave and returned to work on 25 October, with the symptoms only partially relieved. Dr Tsui made no inquiry of her condition and put her back onto the same gruelling schedule. Things came to a head on 30 October (a Saturday) when she was given three SX to perform. On the third SX she suffered excruciating pain in her right wrist and could not continue the operation (to the distress of her patient, of course). She was later diagnosed to have suffered carpal tunnel syndrome and a tear to the triangular fibrocartilage complex which effectively ended her career as a dentist.

     The judge found as a fact that, on the plaintiff’s return from sick leave, Dr Tsui told her he would not change her schedule; complaints from her would not have resulted in her rescheduling; and, in particular, the 3 SX fixed for 30 October. It would seem that Dr Tsui himself was under pressure. The fault was in the heartless system of the department which was interested in numbers and not in the welfare of people under its care.

     It was on these facts that the trial judge found for the plaintiff. What civilised legal system in the world would not have arrived at the same conclusion? And, it might be added, what caring public health provider in the world would not have felt sympathy for the plaintiff, accepted responsibility for the incident and moved on? Not the Hong Kong Department of Health.

Appeal

The Health Department launched an appeal, dealt with by the Court of Appeal (CA) by its judgment of 8 March 2021, comprehensively reviewing the judge’s findings and affirming his conclusions.

Application for leave to further appeal

On 7 April 2021 the department sought leave from the CA to take the matter to the Court of Final Appeal. The CA determined the matter a year later on paper, by its ruling of 20 May 2022.

     This is a 22-page document where the CA comprehensively disposed of the eight purported questions for the CFA’s consideration. They were all dismissed. The CA rejected the application for leave to appeal in its entirety.

     Beneath its dignified language, one can sense boiling outrage rightly felt by the CA. The trial judge, three years earlier, had made clear findings of fact, putting an end to litigation which started in 2002. The fact that the department had grievously failed to discharge its duty of care to the plaintiff could hardly be in doubt. The CA had affirmed those findings. And yet the Health Department was not satisfied; it wanted lawyers to engage in a point-scoring nit-picking forensic game to deprive the plaintiff of redress, as if the health and well-being of Yeung Lai Ying were of no account; it wanted the plaintiff back in the grinding forensic machine to face further delay and anxiety. Having been responsible for damaging the plaintiff’s health, ending her dental career, it cared not whether further proceedings might not damage her mental health as well.

The eight questions

The eight questions were farcical. Question 1 was a pure pleading point which no modern judge would for a moment entertain. Question 2 was this:

“Whether factual findings on the nature of injury suffered by a plaintiff employee, and causation between such injury and the alleged breach of duty committed by the defendant employer, may be made by resorting to ‘common sense’ to fill a gap not covered by the medical evidence, when the medical experts have not been asked to give an opinion on those issues?”

Common sense indeed. What is singularly missing is common sense in the department’s whole approach; common sense and compassion. The following six questions simply piled absurdity on absurdity and bear no examination.

Conclusion

The time limit for the department to seek leave from the Appeal Committee to take the matter to the CFA has yet to expire. Is it conceivable that the department would take this inhumane step? Is this trial by ordeal starting in 2002 not long enough?

     The Minister for Food and Health bears ultimate responsibility for the department. Is she aware of this outrage?

Law in a Goldfish Bowl (Henry Litton)

LAW IN A GOLDFISH BOWL

Henry Litton, Honorary Professor

Introduction

On 27 September 2021 the Court of Final Appeal (CFA) handed down a judgment, Secretary for Justice v Leung Kwok Hung [2021] HKCFA 32, which raises a troubling question: Is the highest court in the land concerned with, or even interested in the due process of law?

     The process in question was a simple prosecution for a statutory offence in a magistrates court. The incident giving rise to the prosecution took place way back in November 2016. When the matter eventually reached the CFA nearly five years later the facts constituting the offence had still not been established. Hence Fok PJ, who gave the only judgment, introduced the matter by setting out what he called “the alleged facts”.

     “Alleged facts”. Alleged by whom? Presumably the prosecution. But is the prosecution infallible? What if those facts were wrong, or through the passage of time could not be proved in court?

     What the CFA determined were pure matters of law. But they don’t float in the air, unattached to reality on the ground. If the underlying facts giving rise to questions of law had been admitted by the defence at trial, that would have been a different matter. That wasn’t so in this case. Hence the issues determined by the CFA were based upon mere supposition.

     Is this due process of law? Is the court not concerned that, in a criminal prosecution, the guilt or innocence of the accused had still not been ascertained after so many years?

The alleged facts

In November 2016, the appellant Leung was a Legislative Councillor. On 15th of that month, he was at a committee meeting in the Council chamber. A government servant Mr Ma Siu-cheung, Undersecretary for Development, was in attendance. He had with him a folder containing confidential papers. In the course of the meeting Leung asked Mr Ma to produce some documents; he then crossed over from his seat to Mr Ma and snatched the folder from him. He passed the folder to another Councillor Mr Chu for him to read. The chairperson repeatedly asked Leung to return the folder to Mr Ma and for him to resume his seat. Eventually the chairperson ordered Leung to withdraw from the chamber and suspended the meeting. Mr Chu having read the contents of the folder returned it to a security guard who gave it back to Mr Ma.

     If these facts were true, Leung had undoubtedly acted in a disorderly manner and created a disturbance which interrupted the proceedings of the committee while the committee was sitting.

The criminal charge

Arising out of this, on 12 May 2017, Leung was charged with an offence under s.17(c) of the Legislative Council (Powers and Privileges) Ordinance, Cap. 382. The section reads:

“Any person who creates or joins in any disturbance which interrupts or is likely to interrupt the proceedings of the Council or a committee while the Council or such committee is sitting commits an offence and is liable to a fine of $10,000 and to imprisonment for 12 months …….”.

The criminal proceedings

In January 2018 Leung appeared before a magistrate to face the charge. If the primary facts were proved, it would seem clear that he had indeed created a disturbance whilst the committee was sitting and that it interrupted those proceedings; and Mr Ma would presumably have testified as to that. The proceedings would not have lasted more than half a day.

     As it was, the hearing lasted four days 15-18 January 2018). No findings of fact were made by the magistrate. The only finding she made was this: that, as a matter of law, s.17(c) of the Ordinance was not applicable to Leung because he was a Legislative Council member. This was, in effect, a declaratory judgment which she had no jurisdiction to make. She then adjourned the hearing.

A magistrate’s jurisdiction

A magistrate derives his jurisdiction from the Magistrates Ordinance, Cap. 227. Nowhere else. A magistrates court is one of summary jurisdiction, unlike the High Court which is a court of unlimited jurisdiction. A High Court judge has an inherent jurisdiction derived from common law to protect the court’s process. In contrast, the proceedings in a magistrates court are bound by the four corners of the Magistrates Ordinance. Section 19 of the Ordinance lays down the process for summarily dealing with a criminal charge. It is comprehensive. There is no room for deviation.

     The substance of the complaint must first be read over to the accused, and he must be asked if he pleads guilty or not guilty. If he pleads not guilty, the magistrate shall, in terms of s. 19, proceed to hear the matter in support of the charge, and also hear the accused and such evidence as may be adduced in defence, and also to examine such other witnesses as the complainant may put forward in rebuttal.

     Section 19(2) goes on to say:

“The magistrate, having heard what each party has to say and the witnesses and evidence so adduced, shall consider the whole matter and determine the same, and shall convict or make an order against the defendant or dismiss the complainant or information, as the case may be”.

“Preliminary issue”

When Leung first appeared before the magistrate in answer to the charge, he asked the magistrate to give what Fok PJ described as “a ruling on preliminary issues regarding the ambit and constitutionality of section 17(c)". In particular she was asked to rule on whether the section applies to a member of LegCo and to proceedings other than those involving a person called to give evidence under oath. She was also asked to rule on whether the provision is unconstitutional in "violating the freedom of speech and debate of the member and/or LegCo’s exclusive authority over its internal affairs enshrined in the Basic Law”.

     Wherein lies a magistrate’s jurisdiction to give such “rulings”? Assuming she complied, did the “rulings” bind only the defendant or every other LegCo member?

     Order 15 Rule 16 of the Rules of the High Court empowers a High Court judge to make “binding declarations of right” whether some other relief is sought or not. This has no application to a magistrate exercising a criminal jurisdiction under the Ordinance.

     Of course, if a defendant were minded to have the criminal proceedings against him delayed – and perhaps derailed – such a manoeuvre would be a sure-fire way of achieving that objective. As demonstrated in this case.

     What should have happened in the magistrate’s court is this. The charge having been read to Leung, he should have been asked to plead to the charge: Guilty or not guilty. If he pleaded not guilty, or refused to plead, the magistrate should then have entered a Not Guilty plea and called upon the prosecution to begin its case. Any invitation to give so-called “preliminary rulings” should have been rejected outright.

The points of law

The points of law as put to the magistrate were jumbled and obscure. As eventually synthesized by Fok PJ, they boiled down to this: Leung was not subject to liability under s 17(c) because: (a) Article 77 of the Basic Law, together with sections 3 and 4 of the Legislative Council (Powers and Privileges) Ordinance, gave him immunity from legal action in respect of his statements, speeches and debates in Council or before a committee of LegCo; and (b) the “principle of non-intervention” precluded the courts from examining the conduct of LegCo members in proceedings in the chamber.

     These points verged on the absurd and should have been given short shrift. As to (a), the Ordinance laid down the framework for a secure and dignified environment for LegCo to carry out its constitutional role and penalised unruly conduct which interrupted proceedings. Leung’s behaviour was clearly unruly. He was charged not because of anything he had said in the course of debate, but because of his thuggish behaviour. If the facts as alleged were proved, he clearly came within the terms of s.17(c).

     As to (b), it is extraordinary that Leung, a lawmaker, should have argued that he was above the law. In fact, in a previous case in which Leung himself was again a party, the CFA had so ruled: Leung Kwok Hung v President of the Legislative Council ( No.1 ) [2014 17 HKCFAR 689.

Exercise of judgment

There are times when courts must examine propositions of law with deep application and care. There are other times when a robust approach is necessary. That, too, is an exercise of judgement, in distinguishing between the two situations. To entertain arguments with knitted-brow when a proposition should be dismissed out of hand is to degrade the discipline of law, and encourage forensic games being played in court – particularly in the lower courts. This was such a case. The harm lies open for all to see – if they chose not to close their eyes.

Leadership role

It must surely be the role of the CFA to show leadership in the administration of law; to demonstrate vigour and discipline in its processes; to decline entering into tortuous examination of legal propositions simply because counsel has raised them – particularly when such propositions involve contrived interpretations of the Basic Law.

     Simply see what Fok PJ said about the issues raised in the magistrates court:

“Despite the breadth of the questions for which leave to appeal was sought and granted, in light of the parties’ submissions in their respective written cases and at the hearing before this Court, the issues have been more focussed …”

     And when one reads the rest of Fok PJ’s judgment, it is clear that Leung simply had no case. Full stop. Anyone with a degree of common sense would have dismissed the propositions of law advanced by counsel out of hand.

Conclusion

All this raises an even wider question. Is the culture of the Judiciary in tune with the principle of One Country Two Systems? Is the energy of the Judiciary directed towards the effective and vigorous implementation of that principle? And what does it say about Hong Kong’s future as 2047 gets ever nearer and the answer is No?

How to Catch a Thief? (Henry Litton)

HOW TO CATCH A THIEF?

Henry Litton, Honorary Professor

Introduction

Hong Kong has a wide panoply of laws protecting personal rights, including rights of property. Many would say that the courts have, for the past 20-odd years, over-emphasized personal rights to the detriment of community interests. They have, on many occasions, allowed lawyers to turn the Basic Law into a weapon of mass destruction, to strike at regulatory regimes established by local law. The Face Mask case is a good example.

     The culture of the Judiciary leans heavily in that direction. Would the courts go even further and, applying the same criteria, allow the full weight of the law to be deployed to protect private property which might constitute the proceeds of serious crime? Everyone would say: You must be joking.

     This essay examines two recent cases where Bench and Bar danced hand in hand, flirting with this possibility. And it would seem that, in the second of the two cases – Tam Sze Leung v Commissioner of Police [2021] HKCFI 3118 (Coleman J) – a judge of first instance has in effect struck down the entire statutory regime dealing with the investigation of organised and serious crime involving banks and other financial institutions, though he did not actually say so: pending, he said, a “further round of submissions” from counsel. Tam Sze Leung bears the title “Judgment” – 79 pages of it – but all it “adjudged” as things stand today is this: counsel for the applicants, according to the judge, had won the debate on two legal points, but he shied away from the consequences of that finding. No order was made. So the matter hangs in the air. And there is a further problem. An earlier judgment from the Court of Appeal – Interush Ltd v Commissioner of Police [2019] HKCA 70 (Cheung, Yuen JJA and G Lam J)– had ruled that the statutory regime was constitutional.

Banks and Financial Institutions

Banks are, on the whole, highly respected institutions. Most people have bank accounts. Bank of China, HSBC, Bank of East Asia are household names with global reach. The range of their customers would be immense, from princes to peasants, from the highly respectable, the questionable, to the downright crook. Whilst, in theory, a cardinal principle of good banking is “know your customer”, in practice that is not possible in every case.

International Transfers

Moving money internationally is core banking business, and that is where organised crime comes in. Drug trafficking, for instance, takes place on an international scale; the proceeds are immense. Money is the life-blood of drug trafficking and other serious organised crimes. When money is placed in a bank account, held by a proxy, it takes on a veneer of respectability. When transferred through banking processes, the money gets “laundered”. The UN Office on Drugs and Crime estimates that the amount of money laundered globally is 2-5% of world GDP; that is, US$800 billion to US$2 trillion annually.

War on Money Laundering

To combat this worldwide menace, developed countries have adopted similar solutions: to enlist the help of banks and other financial institutions in the investigation of organised crime, and to adopt measures to deprive criminals of their proceeds of crime.

Hong Kong Legislation

In Hong Kong the Drug Trafficking (Recovery of Proceeds) Ordinance (Cap 405), was amended in 1995 to add Part V to the statute; in particular, sections 25(1) and 25A. These sections, in essence (1) require a bank, when it “knows or suspects” that money held in an account represents the proceeds of crime, to disclose that knowledge or suspicion to an authorised officer; and (2) criminalise the bank if, having such knowledge or suspicion, it deals with those proceeds without consent from the authority.

     At the same time provisions identical to sections 25 and 25A of Cap 405 were enacted to deal with other organised and serious crimes by passing the Organized and Serious Crimes Ordinance (Cap 455).

Investigative Process

As part of the mechanism in its investigative process, the Hong Kong police has set up a unit called the Joint Financial Intelligence Unit (JFIU) to work with the banks. The head of that unit constitutes the “authorised officer” for the purposes of statutory disclosures under s 25A of the Ordinance.

     The relationship between the banks and the JFIU is a delicate one. Banks have contractual obligations to their account-holders. Where police suspicion is aroused, its focus is on the criminals involved; any money and assets held in a bank account is only one of the components in their investigation. By its very nature, it is an ongoing process and there can be no parameters to an investigation. One clue leads to another.

“No Consent Scheme”

Banks have internal records which, when analysed, might provide clues to the source of funds kept in an account. But, at the start of an investigation, these records are not accessible to the police. Hence any investigation under Part V of Cap 455 must necessarily involve liaison with the relevant bank. For this purpose the police has formulated guidelines or protocols in their Force Procedure Manual under the heading of “NO-CONSENT Mechanism in respect of Property held by Financial Institutions”.

      Where the police, from external sources, have reason to believe that an account-holder might be involved in serious organised crime, the first step, obviously, is to relay its concern to the highest management levels of the bank. Confidentiality would be crucial to preserve the integrity of the investigation. There can be no standard response from the bank. It may concern a long-standing customer of utmost integrity, or perhaps a case of mistaken identity; or it could be a borderline case that requires further investigation internally. It is a matter for the bank alone to assess what risks it runs in continuing to deal with the customer. All this comes under a label called a “Suspicious Transactions Report” (STR).

     When the police has received the STR, how the JFIU and the bank then manage their relationship would depend on multiple factors relevant to the investigation. If, for instance, amounts are regularly taken out of a suspect account, the police might wish for that to continue, in order not to arouse the account-holder’s suspicion; or it might be to trace the recipient of those funds. The local account-holder might be a mere nominee for a kingpin overseas, the prime target of the investigation. In terms of s 25A what this means is that, though the funds have come under suspicion – and dealing would constitute an unlawful act – the bank is relieved of criminal liability by the police taking no action, allowing the dealing to continue. But the primary responsibility for not dealing with tainted property rests always with the bank.

“LNCs”

There may come a time when the investigation has matured to the extent that funds in the account should be temporarily frozen to enable the next step to be taken: arrest of the suspect and an ex parte application made under s 15 of the Ordinance for a restraint order over the funds. The mechanism for this process, where the police tells the bank that withdrawals are no longer allowed, as far as the police is concerned, came to be known as “letters of no consent” (LNCs). The effect, of course, is that the bank comes under notice that any dealing with the funds would be considered a criminal act under s 25(1) of the Ordinance.

     The suspension (or “freezing”) of the account would be an act of the bank, depending on its assessment of the situation. In some cases, banks have written agreements with account-holders which confer a wide discretion on the bank to suspend an account, to protect the bank’s own interests. The bank would then not need an LNC to suspend the customer’s account, if it considers it necessary to do so.

    At the time when an LNC is issued, the bank would probably have far more information on the customer than the police, through its internal records, or interviews with the customer. The police is not infallible. It is possible that the bank disagrees with the police assessment. To preserve a valued relationship with the customer, it is possible that the bank ignores the LNC, or delays acting on it.

     It is worth noting that the statute itself contemplates the possibility of the police having made a mistake; s 29 of Cap.455 makes provisions for the government to pay compensation where, for instance, criminal proceedings against the suspect resulted in acquittal.

Convenient Labels

As can be seen, "STRs" (suspicious transactions reports), “LNCs” (letters of no consent) etc are mere labels to indicate steps in an ongoing investigation, sign-posting the stage of the continuing liaison between the police and the bank under the s 25 and s 25A statutory regime. In the meanwhile the account-holder remains in ignorance; the integrity of the investigation might be fatally compromised if he knew what was going on. There can be no hard and fast rules regulating the conduct of the parties – the police and the bank – in operating what came to be known as the “No Consent Regime”.

     “Regime” is, perhaps, too strong a word, as no rights or liabilities of any kind exist under that arrangement. Plainly, there is no room for judicial intervention in this process. Under normal circumstances, there can be no justiciable issues which could arise from the way banks and the police work together under the s 25 and s.25A statutory regime. It is fruitless to speculate as to what might happen if the police used the LNCs process for some ulterior or illegitimate purpose. In the two cases under discussion, there was no suggestion that the police had acted improperly in any way.

      But this, alas, did not deter lawyers chancing their arms.

A. Interush Ltd v Commissioner of Police [2019] HKCA 70 (Cheung, Yuen JJA and G Lam J)

This is a judgment (49 pages) delivered by the Court of Appeal on 17 January 2019, following a hearing in October 2018. It dealt with events going back to 2013.

     The first-named company had substantial accounts with the Heng Seng Bank and the Bank of East Asia. It was suspected of operating a pyramid scheme involving Mainland investors, contrary to the Pyramid Schemes Prohibition Ordinance (Cap 617).

     On 1 November 2013, the police started an investigation, having been alerted by a newspaper article. On the same day the Bank of East Asia suspended the company’s accounts under the terms of a merchants’ agreement, and the Heng Seng Bank gave an STR to the JFIU.

     On 6 November the police sent to the Heng Seng Bank an LNC covering the accounts held by the applicants. That bank also suspended the company’s accounts. It is not clear when suspension took place. In subsequent proceedings the Heng Seng Bank asserted that, under its agreement with the company, it too had the contractual right to suspend accounts at its discretion, to protect its own interests. By implication, it was saying that the LNC was an unnecessary step.

     Following searches at the company’s office, five members of the company’s senior management were arrested. Two days later the CEO surrendered to the police. He too was arrested, and subsequently charged. Analysis of the company’s books revealed massive transactions involving 49,000 “investors” from several provinces in China. Inevitably, the investigation took a considerable time.

     In July 2014 the company started civil proceedings against the two banks. Later on in the same year, it applied for judicial review against the police.

The Judicial Review

On 10 February 2015, Au J gave leave to start proceedings for judicial review. The application was heard by Patrick Li J in June 2015. The judge described it as a judicial review “on the constitutionality of s. 25 and 25A” of Cap 455. At the same time the applicants also challenged “the propriety of the decision-making process under s.25A(2)(a) - no consent scheme”.

     Section 25A(2)(a) says:

“If a person who has made a disclosure referred to in subsection (1) does any act in contravention of section 25(1) ( whether before or after such disclosure ),and the disclosure relates to that act, he does not commit an offence under that section if (a) that disclosure is made before he does that act and he does that act with the consent of an authorized officer...”

After much huffing and puffing, counsel’s arguments boiled down to one point: There was no time limit to an LNC and that rendered the “no-consent scheme” unlawful. As to which Patrick Li J said:

“It may minimize dispute if time limits are set out in the law. This however is a matter of social choice after balancing the rights of an individual and the public interest in crime prevention and law enforcement. Ultimately, it is the decision of the Legislative Council. It is impossible for this court to decide what is the appropriate time limit”.

By his judgment of 5 August 2015, the judge dismissed the application.

     Over three years later, the company’s appeal was heard by the Court of Appeal on 19 and 22 October 2018. By that time the matter was utterly stale and of no practical consequence, for the “indictable offence” under which the company’s CEO was charged failed: he was acquitted after trial on 31 May 2017.

Constitutional Challenge

Why the Court of Appeal proceeded with hearing the appeal is a mystery. The relief sought in the judicial review application is breath-taking. The applicants wanted, among other declaratory relief, a declaration that ss 25(1) and 25A of the Organized and Serious Crimes Ordinance are unconstitutional for being inconsistent with the protected rights under Articles 6 and 105 of the Basic Law, reversing Patrick Li J’s finding. In other words, the entire scheme for combating organised and serious crime, involving banks and financial institutions (and other third parties), must be erased from the statute book, in the protection of the applicant’s private property rights (which might have constituted proceeds of crime).

     At para 6.5 Cheung JA, giving the first judgment, said this:

“In my view, section 25 whether by itself or in combination with section 25A does not engage property rights. Section 25 merely sets out the creation of the offence of dealing with property known or believed to be the proceeds of an indictable offence. By no stretch of the imagination can this section be held to have an effect on the property rights of the applicants. However, section 25A is a different story. In coming to this view I respectfully adopt the analysis in Garnet”.

An Odd Approach

This is a very odd approach. “Garnet” refers a judgment of the Guernsey Court of Appeal where BNP bank account-holder Garnet Investment Ltd had sought the relevant authority’s consent to allow dealings with its bank account; the authority (Financial Intelligence Service) had refused to give consent. The factual basis of the applicant’s case was that the authority’s refusal was a wrongful act in public law. It was fact-specific. If the application for relief had succeeded, that would have affected the applicant company, the BNP bank and no-one else. But in the case before Cheung JA, the relief sought was a declaration that the entire statutory scheme comprised in s 25(1) and 25A was unconstitutional; if granted it would have affected the entire community, not simply the applicant companies and the banks involved.

     The case turned on a proper interpretation of Articles 6 and 105 of the Basic Law, as applied to s 25(1) and 25A; it is bizarre to think that a Guernsey court had anything to say about that.

The Mountain of Words

With such an approach, it is not surprising that the judgment descended into an account of counsel’s arguments and counter-arguments covering multiply pages of indigestible text. The case as presented to the court on paper was a constitutional challenge to the statutory scheme comprised in ss 25(1) and 25A of Cap 455. But the arguments were not so directed. They were aimed at discrediting the so-called No Consent regime or the LNC scheme. But these were just labels. They created no rights or liabilities giving rise to justiciable issues and practical relief. No wonder the judgment dissolved into clouds of words. At para 6.44 the judge sets out Senior Counsel’s arguments covering three full pages; and at para 6.44 (f) the reader is asked to study the Canadian Criminal Code, sections 462.31 and 462.33, and “the useful summary” of the Canadian regime in AG of Quebec v Laurent Laroche and Garage Cote [2002] 3 SCR 708 at paras 23-46. And there are many other pieces of reading from Australian sources, and New Zealand sources (covering more than half the page). Had the judge read any of them? What did he make of them? How were they relevant to any issue he had to resolve? No one knows. The reading list is simply left in the air. The oddity of this approach is even greater when, at para 6.51, one finds the judge saying: “…..a comparison with the anti-money laundering provisions in other countries is not appropriate. As Mr McCoy had submitted, it is not helpful to refer to these provisions without an understanding of the vast landscape of powers available to those jurisdictions with anti-money laundering and anti-terrorist financing measures”.

      The “No Consent Scheme” was an abstraction, a label given to a highly flexible arrangement between the police and the banks, not amenable to judicial review. What was put before the court for debate was a constructed narrative, not a real case. Counsel was tilting at windmills, and the court solemnly dealt with this farcical exercise.

The Core Issue Side -Stepped

The core issue before the court was this: Were ss 25(1) and 25A of Cap 455 compatible with Articles 6 and 105 of the Basic Law (articles requiring the HKSAR to protect property)? That, at any rate, was how the matter was formulated at the beginning of Cheung JA’s judgment. By the end of the judgment, that had been forgotten and the matter had shrunk to whether the “no consent scheme” was constitutional.

     Godfrey Lam J, in his short judgment, tried to salvage something from the wreckage. He said this (para 11.2):

“The applicants’ main argument before us boils down to the contention that the consent regime found in ss 25 and 25A OSCO was deficient in not providing for an express fixed time limit after which the “informal freeze” would expire and cease …….It is true that OSCO does not lay down any express expiry time for the informal freeze. But equally it contains nothing that prevents the authorities from exercising their powers in a way that common law principles and respect for the property rights protected by Articles 6 and 105 of the Basic Law may require, or impedes the courts from giving relief where there is a failure by the authorities, in any particular case. The applicants have in my view failed to demonstrate that the consent regime systematically mandates a result that is incompatible with the Basic Law such that the relevant provisions should be declared unconstitutional”.

Yuen JA said she agreed with both judgments, whatever that meant.  And thus it was that the appeal was dismissed.

     Did the Interush Judgment Establish a Precedent?  Had the Court of Appeal in Interush firmly ruled that the statutory scheme under s 25 and s.25A was constitutional? It appeared so. Was there a lacuna in the law which lawyers were able to exploit ? They took it as such, and this promptly led to the next case.

B. Tam Sze Leung v Commissioner of Police [2021] HKCFI 3118 (Coleman J)

The Facts

This case concerns a family of four. They had accounts with various leading banks in Hong Kong. The total value of the accounts was around HK$30 million to $40 million (including cash and assets of fluctuating value).

     Some time in the past (the judgment is imprecise as to dates) the family came under suspicion of offences contrary to the Securities and Futures Ordinance (Cap 571) and their premises were searched. On 25 November 2020, the Securities and Futures Commission (SFC) referred the matter to the police for investigation. On 27 November, the JFIU alerted the banks to this fact and asked the banks to file STRs, asking them to suspend the operation of the accounts. The banks filed their STRs at various dates, and these were first referred to the Financial Investigation Division of the police which, after examination, asked the JFIU to issue LNCs on dates between 1 and 17 December 2020.

     When the successive accounts got suspended by the banks, the applicants consulted solicitors. By letter dated 8 December, the solicitors asked the police whether LNCs had been issued and to provide the legal basis for issuing them. In reply the police told the solicitors that the applicants were “currently under investigation by Financial Investigations Division, Narcotics Bureau for a case of Dealing with property known or believed to represent proceeds of indictable offence” and asked the solicitors to ask their clients to contact the police. The applicants never did so.

    On 4 March 2021, the applicants were arrested for “money-laundering”; they remained silent under questioning and were released on police bail. The investigation continued. In April, production orders were obtained and served on 29 entities including banks and security firms. Over 10,000 pages of material were produced.

     On 11 October, restraint orders were made, ex parte, by a High Court judge on the accounts, with a return date for an inter partes hearing on 13 December 2021.  In consequence of the restraint orders, the LNCs were withdrawn by the police.

Application for Leave to Start Judicial Review Proceedings

Way back in February 2021, the applicants had applied ex parte to the High Court for leave to start proceedings against the Commissioner of Police. This was entertained by Chow J. He shirked the responsibility of deciding whether the applicants had an arguable case; this was surprising, as he must have had before him the Court of Appeal’s judgment in Interush (delivered back in January 2019, which seemed to cover the same grounds as the matter before him). Chow J ordered a “rolled up” hearing: that is to say, that the Commissioner of Police should be heard as to whether there was an arguable case against him.

Abuse of Process

The process is strictly governed by rules. Order 53 Rule 3(2) says that an application must be made ex parte in Form 86 which must contain, among other matters, “the relief sought and the grounds on which it is sought”.  The relief sought would be in a few words; for example, certiorari, an order to quash a decision or action on the ground of procedural unfairness, or ultra vires, excess of jurisdiction, or gross unreasonableness etc. There are only a handful of grounds, known to the law, on which a challenge to the exercise of executive authority can be made. This is fundamental to the separation of powers. It is not the business of the courts to run the government of the Hong Kong SAR.

     As to a “constitutional challenge” to statute law, often referred to as a “systemic challenge”, there can only be two platforms: the Hong Kong Bill of Rights and the Basic Law. Hence, a properly completed Form 86 cannot possibly constitute more than one or two sheets of A4 paper. Where there are multiple grounds it is a certainty that the application has no real focus and is an abuse of the process.

     Here, according to Coleman J’s judgment, “the Form 86 comprised over 60 pages of closely typed description and argument …..”. Why Chow J did not dismiss the application out of hand, but ordered a “rolled up” hearing instead, is incomprehensible. It was an abuse of process staring the judge in the face.

Coleman J commented as follows:

“The recent culture in the context of judicial review proceedings for there to be excessive prolixity and complexity, in what are supposed to be concise grounds for judicial review, as often as not serves to conceal rather than illuminate the essence of the case being advanced”.

“Conceal rather than illuminate the essence of the case being advanced” indeed !

The Jumble of Garbled Arguments

Coleman J heard the matter on 19 and 20 October 2021, by which time some eight months had passed since Chow J had dealt with the matter. Much had happened on the ground, which made of the hearing even more of a farce.

     Not only was Coleman J faced by a Court of Appeal judgment which had a binding effect on him, there were also two significant events affecting the judicial review. One, the applicants had been arrested, and two, restraint orders had been made on the accounts a week before the hearing, and the LNCs had been withdrawn.

     What possible standing could the applicants have to maintain their application for relief when Coleman J began the hearing on 19 October 2021?  Undeterred, the judge soldiered on, and produced a 79-page judgment which no-one could possibly understand.

The Grounds for Relief

Stripped of verbiage, the grounds set out in the judgment boiled down to three:

One, the issue of the LNCs by the police was tainted by procedural unfairness.

Two, the “No Consent Regime” was not authorized by ss 25 and 25A of Cap 455.

Three, the statutory scheme under s 25 and 25A violated constitutional protection of private property under Articles 6 and 105 of the Basic Law.

     As regards One, that was an absurdity. Counsel’s argument was that a suspect must be given an opportunity to make representations to the police before LNCs are issued. To catch a thief, the police must first tell him they are about to set out to catch him.

     As regards Two, the judge said there were two concerns: “(1) the true extent of the Commissioner’s powers to freeze funds held at banks, outside the statutory regime providing for obtaining restraint orders granted by the High Court and (2) the sufficiency of safeguards over any such powers”.

     To talk of the “Commissioner’s powers to freeze funds” is to grossly distort and misrepresent the mechanism governing the relationship between the police and the banks. The prime feature of that relationship is flexibility – which the judge himself acknowledged later on in his judgment. He said (para 53):

“…the consent regime gives the police operational freedom to grant relief from criminal liability in circumstances where it is considered to be in the interests of law enforcement to do so, such as avoiding a suspected criminal becoming aware of the suspicions, or permitting a controlled transfer to take place so that funds can be traced for investigative purposes…”

In sending out an LNC the police is not “exercising power” of any kind. If the account is suspended, the “freezing” is done by the bank concerned, not the police.

     Earlier on, the judge had referred to the “fundamental right” of suspects to use their own property in the “form of funds held in a bank account” (para 5). “Fundamental right”? That is absurd. An account-holder’s right is a contractual right; the right of a creditor (the account holder) vis-a-vis the debtor (the bank). If nothing else were said, the account holder would have a right to withdraw the sum held on demand. But there could be strings attached, depending on the terms under which the sums are held. But with that misconception in mind at the outset, no wonder the judgment got tangled up with counsel’s arguments.

     The huge volume of submissions by counsel, and the citation of overseas cases, boiled down to one thing: that there exists no theoretical time limit for the duration of LNCs. But, in so far as one can find the core determination of the Court of Appeal’s judgment in Interush it is set out in Patrick Li J’s judgment which was upheld by that court: 

“It may minimize dispute if time limits are set out in the law. This however is a matter of social choice after balancing the rights of an individual and the public interest in crime prevention and law enforcement. Ultimately, it is the decision of the Legislative Council. It is impossible for this court to decide what is the appropriate time limit”.

It is binding on Coleman J at first instance. Notwithstanding this, he found “the No Consent Regime as operated by the Commissioner is ultra vires” (para 93).

      As to Three, that is an absurdity. Under the statutory regime in ss 25 and 25A of Cap 455 the court is dealing with suspected proceeds of serious crime. To think that Articles 6 and 105 could extend to protect such property is to make mock of the Basic Law. Yet the judge devoted tens of pages of his judgment to this issue. Ultimately he found that the No Consent Regime as operated by the Commissioner is not “prescribed by law” (para 118) and that it failed “the proportionality assessment” (para 160), presumably striking down the entire statutory scheme in ss 25 and 25A, though he did not say so, provisions which the Court of Appeal appears to have ruled as constitutional.

The Outcome

If the judgment made sense, why did the judge not make orders appropriate to his determinations? The reader is left reeling by this stage.  In para 168 (page 78) the judge said this:

“Mr Chan (counsel for the applicants) and Mr Dawes (counsel for the Commissioner) are in agreement that there can usefully be a further round of submissions on relief, once the parties have had the opportunity to consider this judgment. At the same time, I can deal with any other consequential matters as might arise”.

Is this effective administration of law, or is this – once again – a case where the court becomes a debating chamber and the weight of a judgment is measured by the volume of words rather than the effect of remedies? Earlier in his judgment, Coleman J referred to “the recent culture in the context of judicial review proceedings” where “excessive prolixity and complexity” plague the process.

     The judge offered no relief at the conclusion of his 79-page judgment, and invited a “further round of submissions”. In the meanwhile, what is the Commissioner supposed to do? To suspend all operations under ss 25 and 25A of Cap 455 ? Or to treat the judgment simply as a jumble of words, of no practical consequence?

Post Script

Not surprisingly, the parties found themselves entangled in a sticky web of words, after the determination was handed down on 30 December 2021. There was no “judgment” or “order” on which the Commissioner could lodge an appeal. So time for appeal had not begun. But, out of an abundance of caution, the Commissioner lodged an application on 19 January 2022, seeking an extension of time to enable an appeal to be lodged “28 days from the date of the Court’s decision on relief, costs and consequential matters”.

    The matter went before Coleman J, who made no order on that application. He said that the time for filing any notice of appeal had not begun. He then added: there was “no relevant final form of order made, from which any appeal might lie”.

     And thus the matter rests. Just a jumble of words. A dead letter. Presumably the Commissioner and the banks will continue to deal, as they have done in the past, under the framework of ss 25 and 25A of the Ordinance, regardless of what the judge had said.

The Rule of Law

The rule of law requires effective action, not just words. Its focus is always on remedies. A courtroom is not a coffee house, where arguments and suppositions are freely traded. It is a venue for the determination of rights and liabilities. A court, acting properly, never acts in vain.

     This case brings into sharp focus the deep-seated malaise in the Judiciary. At times judges seem to forget their own constitutional role and justify their actions by deferring to counsel. The practice is not only demeaning; it compromises Hong Kong’s future.

      The White Paper issued by the Central Government in December last year is an extremely important document for Hong Kong. It sets the course firmly for the principle of One Country Two Systems to apply in the long term.

      At the heart of the Hong Kong system is the rule of law; that is to say, the common law as practised in the courts. The question will soon be asked: Is it capable of vigorous and effective implementation of the principle of One Country Two Systems ? Is it fit for purpose?