The Judicial Committee of the Privy Council Decisions

Privy Council Appeal No. 3 of 1997

 

Commissioner of the Independent Commission

Against Corruption Appellant

v.

Ch'ng Poh Respondent

 

FROM

 

THE COURT OF APPEAL OF HONG KONG

 

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JUDGMENT OF THE LORDS OF THE JUDICIAL

COMMITTEE OF THE PRIVY COUNCIL,

Delivered the 16th June 1997

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Present at the hearing:-

Lord Browne-Wilkinson

Lord Lloyd of Berwick

Lord Nolan

Lord Hoffmann

Lord Clyde

  ·[Delivered by Lord Lloyd of Berwick]

 

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1. On 21st May 1996 Mr. A.R. Wright, a magistrate at the Eastern Magistrate's Court, Hong Kong, issued a warrant under section 10B of the Independent Commission Against Corruption Ordinance authorising officers of the Commission ("ICAC") to search the premises of a firm of solicitors ("X & Co.").  Although the warrant does not refer to a specific offence, it is common ground that the only basis for the application was an alleged offence under section 9 of the Prevention of Bribery Ordinance.  That section provides:-

"9.(1)  Any agent who, without lawful authority or reasonable excuse, solicits or accepts any advantage as an inducement to or reward for or otherwise on account of his -

 

(a)doing or forbearing to do, or having done or forborne to do, any act in relation to his principal's affairs or business; or

 (b)showing or forbearing to show, or having shown or forborne to show, favour or disfavour to any person in relation to his principal's affairs or business,

 

shall be guilty of an offence.

 

  (2) Any person who, without lawful authority or reasonable excuse, offers any advantage to any agent as an inducement to or reward for or otherwise on account of the agent's -

 

(a)doing or forbearing to do, or having done or forborne to do, any act in relation to his principal's affairs or business; or

(b)showing or forbearing to show, or having shown or forborne to show, favour or disfavour to any person in relation to his principal's affairs or business,

 

shall be guilty of an offence."

 

2. On 22nd May 1996 the warrant was executed, and a quantity of documents were seized.  On 12th June 1996, Ch'ng Poh, a prisoner serving a five year sentence for conspiracy to defraud, gave notice of an application for leave to apply for judicial review on two grounds.  The first ground was that the magistrate had no jurisdiction to issue the warrant under section 10B of the ICAC Ordinance.  The second ground was that some of the documents were subject to legal professional privilege, since X & Co. were then acting as Ch'ng Poh's solicitors in respect of his appeal against conviction.

 

3. The application came before Seagroatt J. on 2nd July 1996.  He held that while the evidence, if true, showed that very serious criminal offences had been committed, these were a matter for the police rather than ICAC.  He therefore quashed the warrant, and ordered the return of the documents to X & Co.

 

4. On 21st August 1996 the Court of Appeal, by a majority, dismissed ICAC's appeal, and subsequently refused leave to appeal to the Board.  The reason given by the Court of Appeal for refusing leave was that since the documents had in the meanwhile been voluntarily surrendered by Ch'ng Poh and X & Co., and were by then in the possession of ICAC, the issue as to the validity of the warrant was academic.  Their Lordships were nevertheless persuaded to grant special leave to appeal.  For the adverse decision of the Court of Appeal was said to be of considerable importance to ICAC in the discharge of its statutory duties.  The case has been argued by Mr. Guthrie Q.C. on ICAC's behalf.  Neither Ch'ng Poh nor X & Co. were represented.

 

5. The facts alleged in support of the application for the warrant are set out in a lengthy information sworn by Mr. Gerald Roger Osborn.  The information is helpfully summarised by Litton V.-P., who gave the leading judgment in the Court of Appeal.  Since it is important in this case to understand the nature of the case being made by ICAC, it is necessary to set out the facts as summarised in full.  Mr. Guthrie was good enough to agree that the summary is fair and accurate.  It reads as follows:-

"(1)Ch'ng Poh had been convicted in July 1994 of offences of conspiracy to defraud and publishing a false statement in the annual reports of a limited company.  He was sentenced to a total of 5 years' imprisonment and ordered to pay costs not exceeding $15 million.

 

(2)A key prosecution witness at his trial was one C.H. Low, an accomplice.

 

(3)After his conviction, Ch'ng Poh lodged an appeal against conviction to the Court of Appeal.

 

(4)Mr. A, a partner in the firm of solicitors X & Co., was Ch'ng Poh's solicitor on his appeal.  The firm did not act for Ch'ng Poh at his trial.

 

(5)Warwick Reid, the former head of the Commercial Crimes Unit in the Legal Department, imprisoned for corruption in July 1990, was approached by Mr. A in prison; Mr. A proposed to Reid that if Reid could assist Ch'ng Poh's appeal by swearing an affidavit that would discredit C.H. Low as a witness, Reid would be paid a very substantial sum: the implication being that some of the statements in that affidavit would be false.

 

(6)Mr. A later visited Reid in prison again and asked him to sign a prepared affidavit which Mr. A had brought along with him.  Reid refused because he wanted payment first.  Mr. A handed a name card to Reid and told Reid that the person named on the card, a T.K. Li, would contact him in New Zealand after his release from prison.

 

(7)T.K. Li did contact Reid in New Zealand later, after Reid's release, and paid him NZ$1 million and US$25,000 for making the affidavit.  The affidavit was sworn on 2 December 1994, three days after Reid's return to New Zealand from prison in Hong Kong.

 

(8)In mid-December 1994 Reid went to Singapore and met  C.H.  Low  and  T.K.  Li.  A discussion took place

on how much C.H. Low would be paid for not contradicting what Reid had said in his affidavit and generally for not co-operating with the ICAC.  There were further discussions later concerning payment for C.H. Low's silence.  T.K. Li acted as the go-between for Ch'ng Poh.

 

(9)In one intercepted telephone conversation between Reid and C.H. Low, Reid said he would telephone Mr. A to enquire about the progress regarding the proposal to pay C.H. Low for not co-operating with the ICAC."

 

6. In the penultimate paragraph of the information Mr. Osborn summarised ICAC's case as follows:-

"The evidence gathered to date supports the allegations that REID was paid NZ$1 million for signing the false affidavit and that he also tried to persuade C.H. Low not to co-operate with the ICAC or give evidence contradicting REID's affidavit in return for payment."

 

7. It is quite clear, therefore, that the case being made by ICAC was that Reid had been bribed by Mr. A., and that Reid and Mr. A. had between them attempted to bribe Low.

 

8. From where did the NZ$1 million come?  The answer is obvious.  The money was coming from Ch'ng Poh, who hoped thereby to secure his acquittal on appeal.  Mr. A. was acting as Ch'ng Poh's agent in bribing, or attempting to bribe, Reid and Low.

 

9. If that is the correct reading of the information - and it is difficult to see how a magistrate would read it in any other way - section 9(1)(a) of the Bribery Ordinance was simply not engaged.  As Litton V.-P. put it:-

"Section 9(1)(a) criminalizes corrupt transactions with agents: not dishonest acts by agents."

 

10. It was, as he said, a case of a dishonest solicitor "prepared to do his client's dirty work".  Mr. A., Ch'ng Poh and Reid were no doubt engaged in a conspiracy to pervert the course of justice.  A search warrant might have been obtained by the police under the general criminal law.  But there was no jurisdiction to issue a warrant under section 10B of the ICAC Ordinance.

 

11. But Mr. Guthrie argues that the information sworn by Mr. Osborn is susceptible of another meaning, and that both Seagroatt J. and the Court of Appeal misunderstood the nature of the case being  made by ICAC.  He concedes that Mr. A. was the agent of Ch'ng Poh in bribing Reid, but he was also the agent of the partners in X & Co.  Although there is no direct evidence of Mr. A. having received a bribe from Ch'ng Poh, it is obvious that such must have been the case.  If so, says Mr. Guthrie, Mr. A. would have accepted an advantage without lawful authority from the partners in X & Co. as an inducement to do an act in relation to X & Co.'s affairs.  Since X & Co. were acting as Ch'ng Poh's solicitors in the appeal, one assumes, for example, that the affidavit sworn by Reid was filed in the name of X & Co.  The filing was, so it is said, an act done by Mr. A. in relation to his principal's affairs (i.e. the affairs of X & Co.) which was induced by a bribe received by Mr. A. from Ch'ng Poh.  It therefore falls within section 9.  The error of Seagroatt J. and the Court of Appeal lay in assuming that an agent can have only one principal.

 

12. In his printed case Mr. Guthrie went further.  Even if Mr. A. had received no more than the firm's ordinary fee, this would still be an "advantage" for the purposes of section 9.  However Mr. Guthrie did not press the argument that far in his oral argument before the Board.

 

13. In support of his main argument Mr. Guthrie relied on the dissenting judgment of Liu J.A. in the Court of Appeal and the decision of the Divisional Court in Morgan v. Director of Public Prosecutions [1970] 3 All E.R. 1053.

 

14. The short answer to this argument is that the Court of Appeal did not misunderstand the nature of ICAC's case.  For the very same argument was indeed advanced in the Court of Appeal, and was rejected by Litton V.-P. in the following trenchant observations:-

"Mr. McWalters submits that the judge had misunderstood Mr. Reading's argument on behalf of the ICAC: the judge thought that the ICAC's case was that Mr. A was the offeror of the bribe (offering a bribe to Reid to make the false affidavit) whereas in truth the ICAC's case was that Mr. A was the offeree: receiving some hidden benefit from Ch'ng Poh by rendering the dishonest services, in relation to his `principal's affairs', that is, his own firm's affairs.  It is not surprising that the judge had `misunderstood' the argument.  Only by the application of the most convoluted logic, in reading the information, could one begin to glimpse such a conclusion.  A magistrate, in reading the information, is required to give it an ordinary straight-forward interpretation.  He is not required to undergo mental gymnastics in order to justify the issue of the warrant."

 

15. Their Lordships agree.  But since the scope of section 9 raises a question of some importance for ICAC, their Lordships add some further observations of their own.

 

16. The six sections of the Ordinance which precede section 9 are all concerned with the bribery of public servants.  Section 4 makes it an offence to bribe or attempt to bribe a public servant on account of his performing or abstaining from performing any act "in his capacity" as a public servant.  Section 9 is the only section in the Ordinance dealing with persons other than public servants.  It is confined to agents.  It does not say, like section 4, that the agent must have been acting in his capacity as an agent.  Instead the act done (or not done) by the agent must be an act done or not done "in relation to his principal's affairs".  But as Keith J. pointed out in Reg. v. Ng Man Ho [1993] 1 H.K.C. 632 at page 638 the alternative words serve much the same purpose.  They are clearly intended to be restrictive.  It is not enough that the recipient of the bribe should be an agent in fact.  Otherwise any partner in a firm of solicitors, accepting an advantage without authority or reasonable excuse, would be caught by the section.  This would be much too wide.  Moreover it would mean that a dishonest solicitor who happened to have one or more partners would be caught by the section, but a sole practitioner would not.

 

17. So what do the limiting words mean?  They mean that, for the section to apply, the person offering the bribe, must have intended the act or forbearance of the agent to influence or affect the principal's affairs.  Accordingly section 9 would apply if Ch'ng Poh had bribed Mr. A. to secure him a benefit at X & Co.'s expense, for example, to arrange a reduction in X & Co.'s ordinary professional fees; or if X & Co. were induced to act in a way in which they would not otherwise have acted.  Thus it is an essential ingredient of the offence under section 9 that the action or forbearance of the agent should be aimed at the principal.  If it is sufficient for the purposes of the person offering the bribe that the agent should act on his own without involving his principal, then, whatever other offence may have been committed, it is not a corrupt transaction with an agent for the purposes of section 9.

 

18. If the facts put before the magistrate had been that Ch'ng Poh offered Mr. A. a bribe in order to secure the filing by X & Co. of an affidavit which they both knew to be false, then a case might just have been made out.  But as already mentioned, that is not a fair reading, or indeed a possible reading, of the information sworn by Mr. Osborn.

 

As for Morgan v. Director of Public Prosecutions, on which Liu J.A.  relied  in  his  dissenting  judgment,  the  facts were that Mr. Morgan was a shop steward and a convenor, at Rover & Co. Ltd.'s factory.  As such he was the agent of the union.  But he was also an agent of the car company by whom he was employed.  Accordingly when he persuaded the car company to re-employ a subcontractor from whom he had received a bribe, he was acting "in relation to" the car company's affairs.  Indeed the case is a good example of the sort of circumstances in which section 9 applies.  The fact that Mr. Morgan was also acting in relation to the union's affairs did not affect the position.  The case shows that an agent can act simultaneously for two principals.  But that is as far as it goes.  Properly understood it affords no support for Mr. Guthrie's argument.  Their Lordships will humbly advise Her Majesty that the appeal ought to be dismissed, with no order as to costs.

 

© CROWN COPYRIGHT as at the date of judgment.