The Tam Sze Leung saga continues. Last year, we wrote an article on Tam Sze Leung & Ors v Commissioner of Police [2021] HKCFI 2118, in which the Court of First Instance held on 30 December 2021 that the “letters of no consent” (“LNCs”) regime (“LNC Regime”) in Hong Kong was unlawful as it was ultra vires, not prescribed by law, and disproportionate.
The Commissioner of Police (the “Commissioner”) appealed the ruling and on 14 April 2023, the Court of Appeal (the “CA”) allowed the Commissioner’s appeal. Read the CA’s full judgment in Tam Sze Leung & Others v Commissioner of Police [2023] HKCA 537.
Below is a recap of of the grounds of review by the applicants (the “Applicants”) in the original judicial review application, alongside a summary of the CA’s findings in the recent judgment:-
| Grounds for Original Judicial Review | The CA’s Findings | |
| Ground 1-
Procedural Unfairness |
The issue and maintenance of LNCs are tainted by procedural impropriety and unfairness, in that there is a lack of notice (before or after the issue of the LNCs), no reasons have been provided, and there is no opportunity for a fair hearing or other opportunity to make meaningful representations. | Generally speaking, there should be no requirement for disclosure of anything which is material in a pending prosecution. It would be contrary to public interest for the grounds of an officer’s suspicions to be disclosed during ongoing investigations.
It is completely contrary to the statutory framework under Organized and Serious Crimes Ordinance (Cap. 455) (“OSCO”) as well as common sense if notice were to be given to the account-holder regarding the issue of LNCs. |
| Ground 2-
Ultra Vires / Improper Purpose |
The LNCs are ultra vires OSCO, which does not confer power on the Commissioner to operate a de facto property freezing regime by the use of such letters and attendant procedures. There is an associated alternative argument that the LNCs were issued for an improper purpose.
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An account is “frozen” because the bank has chosen not to comply with its customer’s instruction (due to concern about criminal liability under section 25(1) OSCO), as opposed to there being any enforceable order by the police – the police have no power to require the bank to do anything. The police have power to refuse consent and it is not ultra vires for them to inform a bank by a LNC that the bank does not have the police’s consent to deal with further funds in that account. The police have the power to alert banks of their investigations and their suspicions. A subsequent LNC does not become ultra vires simply because the police had “proactively reached out” and alerted the banks to the suspicious circumstances in the first place. It is not improper to refuse consent in order to prevent dissipation of property whilst police investigation is ongoing. |
| Ground 3-
Prescribed by Law |
The LNCs interfere with the Applicants’ constitutional rights under the Basic Law and Bill of Rights – specifically to (i) the use of a person’s property under arts. 6 and 105 of the Basic Law, (ii) a fair hearing under article 10 of the Bill of Rights, (iii) access to legal advice and to the court under article 35 of the Basic Law and article 10 of the Bill of Rights, and (iv) private and family life under article 14 of the Bill of Rights – and such interference is not “prescribed by law”.
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The statutory scheme does not fall foul of the “prescribed by law” requirement. Although the discretion for giving or refusing consent under section 25A(2)(a) is conferred on the police without any specified fetters or parameters, there are sufficient constraints as discussed above to guard against arbitrary or capricious refusal. There is no relevant uncertainty or vagueness in section 25(1) OSCO. There are remedies in private law for any infringement of property or contractual rights. |
| Ground 4-
Fair Hearing |
The LNCs breach the Applicants’ right to a fair hearing under article 10 of the Bill of Rights Ordinance (“BOR”).
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As held in Interush Ltd v Commissioner of Police [2019] HKCA 70, [2019] 1 HKLRD 892 (“Interush”), the CA doubts whether the police’s decision to withhold consent touches upon article 10 of BOR (right to fair hearing). In any event, there is access to the court by way of judicial review and a more intensive review is not essential for compliance with article 10 of BOR in the present context. The CA agreed with the CFI judge’s in that article 14 BOR (rights to private and family life) was irrelevant to this case. |
| Ground 5-
Proportionality |
The No Consent Regime and the LNCs disproportionately interfere with the Applicants’ fundamental rights mentioned in (3) above.
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Interush cannot be distinguished in this case; Interush is binding authority before the CA and the Courts below. The CA reaffirmed that sections 25 and 25A of OSCO and the practice of the Joint Force Intelligence Unit in issuing LNCs are not systemically unconstitutional. The Commissioner accepting that the No Consent Regime is an “informal freezing regime” is merely a generic description that seems no more than an acknowledgement of the effect of the combined operation of sections 25 and 25A of OSCO. |
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Ground 6- Blanket Freeze |
The decisions to refuse consent even to a partial release of funds are unlawful in that the LNCs cause a “blanket freeze”, without any distinction as to which assets are or could be alleged to represent the proceeds of crime and which assets could not.
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A fact-specific challenge amounts to an academic argument since the LNCs in this case have been superseded by the restraint order*. The CA did not entertain this issue. *In October 2021, restraint orders obtained by the Secretary of Justice (against the Applicants’ accounts) superceded the LNCs against the Applicants. |
The CA’s judgment is most welcome – clients, such as victims of online investment fraud, often do not want to or do not have the means to expend further financial resources on obtaining an injunction in Court to freeze the bank accounts holding the defrauded sums that belong to them. The LNC Regime is an inexpensive and effective way to freeze bank accounts before clients launch civil proceedings in the Court to recover their defrauded sums.
To find out more how Hauzen LLP can assist you, please feel free to contact us today.