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簡略案情

本案件是關於一間公司的股權買賣。原告同意將一間在深圳有業務的公司（下稱“T 公司”）的所

有股權賣給被告。但這個買賣並沒有完成，據被告稱不成交的原因是原告虛假聲稱或者虛假保證，

即 T 公司正在向深圳市工商行政管理局（“SABIC”）申請營業執照，並同時在跟其他相關的國家

部門申請牌照和批核。但事實上，T 公司從來沒有提交這些申請。被告還進一步認為原告已經違反

了繼續保持所有必須的牌照有效的保證。訴訟過程中，被告企圖根據《高等法院規則》第 26 號命令，

向原告施行質詢書，要求原告確認，在 T公司被 SABIC強制停業後，T公司有否再向 SABIC申請復業。

原告反對這申請，但被告強調這關係到原告有否滿足買賣中的陳述或者保證。最後，聆案官下令原

告答覆此質詢，原告遂向原訟庭法官提出上訴。

裁決摘要

法官認同聆案官的決定，認為該質詢書有助減少案件的一些枝節。但原告認為他有權拒絕提供相關

答案，理由是，若原告沒有取得相關政府執照與繳交法定稅項和收費的話，可能會被深圳市當局起

訴，所以原告可以根據《證據條例》第 65（1）（a）條，即原告有權為了避免 "自我導致入罪 " 的原因，

拒絕回答任何問題。雖然該權利只適用香港法律所指的刑事罪行，但原告認為香港特別行政區是中

華人民共和國的一部份，在避免“自我導致入罪”特權的問題上，中國法應被視為本地法而不是外

國法，所以，本案符合第 65（1）（a）條的要求。可是，法官拒絕接納原告的理由，並認為中國大

陸法律是外在的法律，不是本地法。裁定原告不享有第 65（1）（a）條的特權。法院進而解釋依據《基

本法》第 18條和第 84條，認為除卻非常特定的條件下，國家刑事法律不能應用在香港。在《基本法》

的框架下，香港既是中國的一部份，但同時擁有獨立的法律體制，這就是“一國兩制”的基礎。而且，

香港跟內地沒有刑事交互強制執行的協議，所以第 65（1）（a）條對原告沒有幫助。最後，法官駁

回上訴並下令原告對質詢書提供答案。

Salt & Light Development Inc. Exclusive Investments Limited v. Sjtu Sunway Software Industry Limited

Salt & Light Development Inc. 及其他 對 交大銘泰軟體產業有限公司HCA 2939/2004 ; HCA 2992/2004

Salt & Light Development Inc. Exclusive Investments Limited Beauhorse Professional Translation Limited v. Sjtu Sunway Software Industry Limited

Salt & Light Development Inc. 及其他及博翰專業翻譯有限公司 對 交大銘泰軟體產業有限公司HCA 2992/2004

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HCA 2939/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCEACTION NO. 2939 OF 2004

Between:

SALT & LIGHT DEVELOPMENT INC. 1st PlaintiffEXCLUSIVE INVESTMENTS LIMITED 2nd Plaintiff

- and -

SJTU SUNWAY SOFTWARE INDUSTRY LIMITED Defendant

ANDHCA 2992/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGIONCOURT OF FIRST INSTANCEACTION NO. 2992 OF 2004

BETWEENSALT & LIGHT DEVELOPMENT INC. 1st PlaintiffEXCLUSIVE INVESTMENTS LIMITED 2nd PlaintiffBEAUHORSE PROFESSIONALTRANSLATION LIMITED 3rd Plaintiff

- and -

SJTU SUNWAY SOFTWARE INDUSTRY LIMITED Defendant

Before: Mr Recorder McCoy, SC, in Chambers

Date of Hearing: 6 April 2006

Date of Judgment: 13 April 2006

JUDGMENT

1. In these 2 appeals from a decision of Master Kwan ordering that 6 interrogatories be answered by a named director of the Plaintiffs, the parties have sensibly agreed that the outcome of the appeal in HCA 2939/04 must be identical to that in the conjoined appeal HCA 2992/04. In those circumstances it was further agreed that HCA 2939/04 would be exclusively considered, the interrogatories being identical in both actions.

Background: Factual Context

2. By a Deed dated 23 August 2004 Salt & Light Development Inc. (1st Plaintiff ) and Exclusive Investments Limited (2nd Plaintiff ) agreed to sell and Sjtu Sunway Sof tware Industry Limited (Defendant) agreed to purchase 100,000 shares, as to 90,000 shares thereof held by the 1st Plaintiff and 10,000 shares held by the 2nd Plaintiff, in the capital of Beauhorse Professional Translation Limited ("Beauhorse"), being the entire issued share capital of Beauhorse. Beauhorse was incorporated in Hong Kong in 1990 and was in business in Hong Kong and in Shenzen, China. It is what occurred in China that is the sole focus of this litigation.

3. Before me the parties agreed that a crucial issue, if not the

decisive one at the trial would be the construction of the Deed and a Disclosure Letter of the same date. The Disclosure Letter, was formally adopted by the parties as an integral part of the Deed. That Letter was created by the Plaintiffs "for the purpose of limiting the scope of the indemnities, representations, warranties and undertakings contained in the Deed including its Schedules".

4. It suffices for present purpose to note Clause 7 Schedule 3 of the Deed:

"7. Government Licences, Approvals, Permits, etc.

The company [ Beauhorse] has at all relevant t imes maintained in force all such gover nment licences, registrations, approvals, permits, qualif ications and other authorisations as may be required by it for the purpose of carrying on its business as at the date hereof. The Company has complied in all respects with the terms and conditions of such licences, registrations, approvals, permits, qualifications and authorisations."

5. The other relevant provision is paragraph 10.2 of the Disclosure Letter which provides:

"The Company [ Beauhorse] has star ted its business operation in the PRC while it is still in the process of applications for necessary licences and approvals. The Company is thus facing administrative actions and/or prosecution in the PRC, as evidenced in the following documents."

6. There follows a reference to 2 documents, both dated 22 April 2004, from the Shenzen Administrative Bureau of Industry and Commerce ("SABIC"), referring to its investigation of Beauhorse for unlawfully carrying on a business without a business licence.

7. The Defendant's case is that by the Deed and Disclosure Letter the Plaintif fs falsely represented and falsely warranted the position, as Beauhorse had never submitted any application for the necessary licences or approvals before the Plaintiffs entered into the Deed. In addition, it is argued that Beauhorse was not just in default for having no business licence, but it also, for example, had not submitted any application for tax registration, filed any audited accounts and tax returns to the PRC authorities, nor paid any business tax or social security funds, as required by Chinese law.

8 . The Plaint if fs ' ca se is the denial of any breach, in the alternative if there was a breach that the Defendant had waived it and further that the Defendant was in any event estopped from alleging misrepresentation and/or breach of warranty. The Plaintiffs have sued for non–performance on the basis that the Defendant's rescission was baseless.

9. The original completion date was 22 October 2004, however the Defendant requested that the completion date be extended to 23 December 2004. Upon that date the Defendant did not complete. The Plaintiffs' action followed and the Defendant initially pleaded misrepresentat ion as its sole defence but by an Amended Defence introduced 9 months later a specific plea of breach of the contractual warranties was added. The Defendant has without an order required the Plaintiffs to answer 6 interrogatories, to which the Plaintiffs continue to resist: O26 r3.

Interrogatories: The Key Provision

10. The key provision to O26 RHC dealing with interrogatories is O26r1(1) which establishes that only interrogatories

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" ... which are necessary either –

(a) for disposing fairly of the cause or matter; or

(b) for saving costs"

shall be allowed. This overarching prov ision applies to both forms of interrogatories, those without an order and also ordered interrogatories: see O26 r1(5).

11. In Baronness Dunn v. Li Kwok Po David [1994] 2 HKC 597, 600F Barnett J in relation to O26 r1(1)(b) decided, correctly in my respectful judgment, that it was not for the interrogator to have to establish that irrespective of the content of the forthcoming answer that costs must be saved. In rejecting that submission be tellingly stated:

"An answer favourable to the interrogator would have to be a foregone conclusion. It would require a degree of prescience that would put the proprietors of Happy Valley and Shatin out of business. I am quite satisfied that what was intended and what has been achieved by the amendments to O26 r1 is that the party seeking to inter rogate must show that the inter rogatory is necessary 'if costs are to be saved'. Put another way, 'if any saving of costs is to be achieved'".

12. In Lee Nui Foon v. Ocean Park Corporation (No 2) [1995] 2 HKC 395 Cheung J (as he then was) helpfully summarized the general principles applicable to interrogatories. Cheung J at p 398 highlighted that the litigation value of interrogatories is maximized when directed to precise points on which either an admission or information is sought. That is the case here.

13. Both Hunter J in Cocoa Merchants Ltd. v. Ferryview Holdings Inc. [1987] HKLR 577, 580 and Cheung J in Lau Tak Wah Andy v. Hang Seng Bank Ltd. [2001] 2 HKC 548, 552 quoted with approval the remarks of Lord Esher MR in Marriott v. Chamberlain (1886) 17 QBD 154, 163 that:

"The right to interrogate is not confined to the facts directly in issue, but extends to any fact the existence or non–existence of which is relevant to the existence or non–existence of the facts directly in issue."

14. To this should be added that the relevance of an interrogatory is to be judged not only by reference to the case of the party putting forward the question, but also from the perspective of the case of the opponent. An interrogatory which is relevant to weakening the opponent 's ow n case is indistinguishable in pr inciple f rom one seeking to af f irmatively advance the interrogator's own case: see Plymouth Mutual Co–operative and Industrial Society Limited v. Trader 's Publishing Association Limited [1906] 1 KB 403, 417 (CA).

15. This comports with the approach of Lord Finlay LC in Blair v. Haycock Cadle Co. (1917) 34 TLR 39 (HL) that if the answer to an interrogatory might form a step in establishing liability it was sufficient justification for its invocation. Therefore whether a conclusive or definitive response to an issue might emerge from answers to interrogatories, was not a criterion in evaluating their validity.

"It was enough that they should have some bearing on the question and that they might form a step in establishing liability."

16. Lord Haldane at p 40 was to the effect that while an answer to one interrogatory might appear to produce a result insubstantial

in itself, yet a series of answers might well produce a valuable coherent significance, that would show they were "necessary".

17. While the prospect of minor incremental advances being established by the answers may suffice, the less an interrogatory appears to be targeted to the core issues in the proceedings the more likely a Court will be to exercise an adverse discretion to its employment. Otherwise the civil justice system would be wrongly encouraging "unnecessary" interrogatories in breach of O26 r1, "as a source of ammunition to be routinely discharged as part of an interlocutory bombardment pending the main battle": per Sir Thomas Bingham MR in Hall v. Sevalco Ltd. [1996] PIQR 344, 349 (CA).

18. In my judgment the correct test to apply, when the opposition to interrogatories is, as here, that the answer to them already exists in the pleadings, witness statements etc, is the approach of Colman J in Det Danske Hedeselskabet v. KDM International Plc [1994] 2 Lloyd's LR 534, 537:

"Fifthly; requests for information ascertainable by cross–examination at the trial are inappropriate unless the party questioning can establish that it is essential for the proper preparation of his case that such information is made available to him before trial, in the sense that if the matter is lef t until cross– examination at the trial that party will, or probably will be irremediably prejudiced in his conduct of the trial or the trial may be unduly interrupted or otherwise disorganized by the late emergence of the information."

19. This approach was itself approved by the English Court of Appeal in Hall v. Selvaco Ltd. as being applicable in all civ il proceedings. Although the interrogatories in that case were not allowed, this was principally because they were premature, having been served on the same day as a request for further and better particulars and before the exchange of witness statements. That timing is wrong in principle and could be justified only in an exceptional situation.

The 6 Interrogatories

20. Interrogatory 1 asks when did Beauhorse commence business in the PRC. It is opposed by the Plaintiffs on the basis that 2 documents emanating from SABIC record that Beauhorse has "since February 2004" operated in Shenzen (Shenzhen) and that it followed that the Defendant could not establish that it was necessary for disposing fairly of the action or necessary for saving costs for the Plaintiffs to answer it. Mr. Cheung for the Defendant however emphasizes that there is nothing in the pleadings or witness statements from the Plaintiffs on this issue. He submits it is a deliberate omission. The sole basis for the date being somehow definitive is that it is recited by a third party in these 2 documents.

21. It is quite unclear whether the date referred to by SABIC is its own conclusion after an investigation or whether it is based on an admission by Beauhorse or indeed otherwise. The Plaintiffs do not argue that the date is not an issue–they oppose the interrogatory on the basis that the date has already been established and it would follow that it is not "necessary" to answer it. The Defendant's pleadings directly put in issue, in para 9(2)(b) of the Amended Defence and Counterclaim, statements by or on behalf of Beauhorse to SABIC as being untrue or misleading and designed to reduce its liability and administrative penalty. This interrogatory must be answered by the Plaintiffs.

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22. Interrogatory 2 asks what were all the licences etc said to have been obtained and maintained by Beauhorse under Clause 7 Schedule 3 of the Deed.

23. The Plaintiffs in opposing this refer to an extract from the Defendant's own witness statement that records that a Plaintiffs' representative had admitted on an unstated day in September 2004 that no application for any "business licence" had ever been submitted by then. This could only explain or answer part of the interrogatory, even if that position is maintained at trial. The Earl of Selborne LC said in Lyell v. Kennedy (1883) 8 App Cas 217, 228:

" T h e d e f e n d a n t , t h e r e f o r e , m u s t a n s w e r t h e interrogatories relevant to that portion of the Plaintiffs' case. It is no sufficient objection that the Plaintiff may have, and to some extent (on his own shewing) has, other means of proving the facts inquired after. Admissions of the facts by the defendant might simplify the proof and materially diminish the expense of the trial."

24. However the Plaintiffs' opposition to answering is principally in reliance upon para 4 (1A)(b) of the Amended Reply which states in relation to the Disclosure Letter:

"Beauhorse did not have approvals or licences f rom business registration, tax, labour or social security authorities in the PRC for carrying on business in the PRC."

It is said this is a complete answer, already provided by the Plaintiffs.

25. Beauhorse has said what it did not have. But it has not said what it did have – which is what it is asked. The Amended Reply negatives a number of specific approvals or licences. It is not stated there that Beauhorse had absolutely no licences etc. whatsoever, in terms of the generality of Clause 7 Schedule 3. If that is the position it should say so, without the possible invo cat ion of sp ecial pleading. This is the whole p oint of interrogatories–to obtain crisp, clearly defined hard–edged trial issues, so that possible lurking ambiguities and potentialities in relation to material matters, which could otherwise become mischievous diversions at trial, are closed down well in advance. Interrogatory 2 requires a precise positive reply as to what licences etc. Beauhorse had; a list of what it had not, may not amount, in sum, to the same thing.

26. Interrogatories 3, 4 and 5 can be dealt with together as they ask in turn whether (and if so, when) Beauhorse has ever applied in the PRC for: a business licence, tax registration, business tax, Enterprise Income Tax, ever withheld and remitted in respect of its employees Individual Income Tax and whether it maintained Social Insurance Fund accounts. In my judgment these must be answered. They align with the objective of Interrogatory 2 by approaching it from a different direction.

27. The subject matter of these interrogatories is fundamental to the Defendant's case and substantially important to the Plaintiffs' own case, which avers that there was no non-compliance.

28. If this issue remains or becomes a live issue at trial (based on the true construction and effect of the Deed and the Disclosure Letter) the Defendant will need to scurry round at very short notice and seek to obtain witnesses from China, with all the inherent associated expense and the real r isk of dislocating the trial. It is to obviate that very prospect and in recognition of the underlying importance of the issues, that justifies the interrogatories sought by the Defendant here.

29. The interrogatories do not exceed the legitimate requirements of this litigation. A clear litigious purpose for the fair and efficient conduct of the trial is made out. Necessity is a stringent test but its resonance depends on all the circumstances. It involves a fact–sensitive analysis. In this regard I apply the words of Sir Thomas Bingham MR in Hall v. Sevalco Ltd. at 349 emphasising:

" ... the modern, cards face–up on the table, approach to civil litigation, which favoured maximum disclosure of relevant facts and evidence at an early stage of the litigation."

Interrogatory 6: Introduction

30. For the Plaintiffs it was argued that Interrogatory 6 (which asks whether Beauhorse had applied, since 10 September 2004, to SABIC, to recommence its business) should be disallowed, on the basis that it was a 'fishing interrogatory' (as characterized in the Hong Kong Civil Practice 2006 at 26/4/9), as the Defendant had no evidential basis to raise the alleged application to be based on any fact or event.

31. In the course of argument Mr. Johnny Fee for the Plaintiffs accepted that events which postdated the Deed and the Disclosure Letter ( both dated 23 August 2004) had obv ious lit igation relevance, as the original completion date under the contract was 22 October 2004 and the extended completion date was 23 December 2004. It was on 10 September 2004 that SABIC directed Beauhorse to cease business. Mr. Kam Cheung for the Defendant emphasised that in the Deed, the Plaint if fs had ex pressly warranted, that they had "maintained in force" all necessary licences etc.

32. The Defendant's case was that there had been a consummate failure as at the date of the Deed to comply with the warranty and that the Plaintiffs should answer on oath whether they had either attempted to or had succeeded in, quietly rectifying the position by making 'good title', as it were, before the date of the extended settlement. In my judgment this interrogatory is necessary as an answer would likely eliminate one significant dangling issue, namely the status of compliance by the Plaintiffs with the warranty not just at the time of the Deed but at any time prior to the original completion date or the extended date. It is justified on both limbs of O26 r1(a) and (b). Mr. Cheung rightly emphasised the high litigation value here of having an unequivocal statement prior to trial as to whether in fact all necessary licences etc. were ever sought and moreover ever obtained.

Interrogatory 6: Claim to the privilege against self–incrimination

33. However, Mr. Fee in relation to this interrogatory also invoked on the Plaintiffs behalf the privilege against self-incrimination. It was common ground that the Plaintiffs were at risk of prosecution in Shenzen [sic ], China for a range of possible offences arising out of the alleged omission to obtain, before the date of the extended settlement, various Government licences and also for default in relation to statutory taxes and fees. This submission requires close examination, as it raises some novel issues under Hong Kong law.

34. A claim to interrogatories, just as much to discovery, is defeated if the privilege against self-incrimination is available: O24 r5, Taranaki Co‑operative Dairy Company Limited v. Rowe [1970] NZLR 895 (CA).

35. That privilege is not a matter of procedure or of evidence. It is not adjectival. It is a substantive right.

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36. On analysis the issues to be resolved have turned out to be:

(1) C a n a c o m p a n y c l a i m t h e p r i v i l e g e a g a i n s t s e l f -incrimination under civil law in Hong Kong?

(2) Can a claim to the privilege against self–incrimination in civil law be based on a risk of proceedings under foreign law?

(3) Is a claim based on a risk of proceedings under the criminal law of China, a claim under foreign law?

(4) Does a Judge have an overriding discretion to exclude a compelled answer or document in civil proceedings based on a risk of proceedings under foreign law?

(5) How should the discretion be exercised in the present case?

Self–incrimination in civil law: United Kingdom statute

37. By s14 Civil Evidence Act 1968 [UK] a party to civil proceedings is not compelled to give answers or documents which will tend to criminate or tend to expose to proceedings for a penalty the person or his spouse under the law of any part of the United Kingdom – which includes the law of Scotland, with its Roman–Dutch (as opposed to common law), roots. But that section also therefore provides that potential criminal liability outside the United Kingdom is no valid basis for a claim to the privilege, within it.

38. S14(1)(a) "shall apply only as regards criminal offences under the law of any part of the United Kingdom and penalties provided for by such law".

Self–incrimination in civil law: Hong Kong statute

39. Section 65 Evidence Ord Cap 8 in its present format was added in 1969, and as the endnote to the section shows, was a response to the United Kingdom statutory initiative a year earlier. It contains 5 subsections.

40. It is only necessary to set out the terms of s65(1) to show that it is identical to the United Kingdom provision save that "under the law of any part of the United Kingdom" is substituted with "under the law of Hong Kong":

"65. Privilege against incrimination of self or spouse

(1) The right of a person in any legal proceedings other than criminal proceedings to refuse to answer any question or produce any document or thing if to do so would tend to expose that person to proceedings for an offence or for the recovery of a penalty–

(a) shall apply only as regards criminal offences under the law of Hong Kong and penalties provided for by such law; and

(b) shall include a like right to refuse to answer any question or produce any document or thing if to do so would tend to expose the husband or wife of that person to proceedings for any such cr iminal of fence or for the recovery of any such penalty."

41. The section speaks of a "person" having the right to refuse to incriminate him/herself and spouse. "Person" can be generally apt in law to include both humans and artificial juristic entities; see the expansive definition of "person" in s3 Interpretation and General Clause Ord Cap 1. S65(1)(a) is explicit that in civil

pro ceedings the "p erson" may invoke the pr iv i lege which generates the right, "only as regards criminal offences under the law of Hong Kong and penalties provided for by such law".

42. This is express statutory direction that in civil proceedings in Hong Kong, only a risk of incrimination under Hong Kong law, is available to provide the right not to be compelled to answer. Lord Diplock stated that this conclusion was declaratory of the common law position immediately prior to the enactment of s14 Civil Evidence Act 1968. See Rio Tinto Zinc Corporation v. Westinghouse Electric Corporation, [1978] AC 547, 637. See also Attorney General for Gibraltar v. May [1999] 1 WLR 998, 1003G (CA).

Self–incrimination in criminal law: Hong Kong statute

43. Some 34 years af ter s65 dealing w ith the civ il law was created, s65A was enacted in 2003, providing for the statutory right in criminal law and extending it to spouses too. Since 1991 though Article 11(2)(g) Hong Kong Bill of Rights Ord Cap 383, had, consistently with Article 14(3)(g) of the International Covenant on Civil and Political Rights, affirmed the privilege against self–incrimination that "[i]n the determination of any criminal charges against him" a person was "not to be compelled to testify against himself or to confess guilt."

44. Section 65A Evidence Ord Cap 8 provides:

"65A. Privilege against incrimination of self or spouse in criminal proceedings

The right of a person in criminal proceedings to refuse to answer any question or produce any document or thing if to do so would tend to expose that person to proceedings for an offence or for the recovery of a penalty or for a forfeiture shall include a like right to refuse to answer any question or produce any document or thing if to do so would tend to expose the husband or wife of that person to any such proceedings."

45. In contrast to the replicated United Kingdom model adopted for civ il proceedings, this section has no counterpart there. It is one of a number of amendments to criminal law in Hong Kong designed to specially elevate marriage as a formal status f rom which special r ights or pr iv ileges f low. See Ev idence (Miscellaneous Amendments) Ord 23 of 2003. The trend and m o m entum of c r iminal law re fo r m in oth er c o mm o n law jurisdictions has been actively in the opposite direction, to downplay matrimony and equalize it with civil unions, formal and informal. Uxorial privilege against self–incrimination has however been recognised at common law for almost 200 years: R v. All Saints, Worcester (Inhabitants) (1817) 6 M&S 194, 199–201, Stapleton v. Crofts (1852) 18 QB 367, 368; Riddle v. The King (1911) 12 CLR 622, 627–629 (HCA) per Griffith CJ.

Does s65 Evidence Ord Cap 8 apply to a corporate person?

46. This impor tant quest ion needs to be answered, as the Defendant submitted that the language affirming the privilege against self–incrimination, a "right" as the section itself calls it, does not extend to corporate persons. Therefore it would follow the Plaintiff companies could not claim the privilege against self–incrimination.

47. It was submitted on behalf of the Defendant that whatever the common law position was, it is to be noted that s65(1)(b) Evidence Ord states that in relation to the "person" asserting the privilege against self–incrimination, that "...the husband or wife of that

064

person" shall also be similarly protected.

48. Marriage vows do not apply to companies and on a literal reading the privilege would be therefore confined to the warm–blooded. But in my judgment that would be too austere a conclusion in the context of such a fundamental right. It was argued that this choice of legislative language necessar ily coloured the intention of s65(1)(a) as being deliberately restricted to individuals. I cannot safely conclude that the possible infelicity of language in s65(1)( b) was actually intended to explicitly abrogate the r ight in relation to corporate persons; which I also find to have existed prior to its enactment. "Fundamental rights cannot be overridden by general or ambiguous words": R v. Secretary of State for the Home Department ex parte Simms [2000] 2 AC 115, 121 per Lord Hoffman. A deeply embedded right cannot be extirpated so easily. As Gibbs CJ said in Hammond v. The Commonwealth (1983) 152 CLR 281, 291 (HCA):

"It would be necessary to f ind a clear expression of intention before one could conclude that the legislature intended to override so important a privilege as that against self–incrimination."

49. On a purposive construction, that gives full weight to the nature of the underlying constitutional r ight at stake, the expression "...husband or wife of that person..." must be read to embrace the coexistence of corporate and human forms to mean "husband or wife (where applicable), of that person". I reject the submission based on the language of the section, because I conclude that the weight of common law, both before and after s65(1) came into existence, supports the conclusion that the privilege did and does apply to corporate entities.

Does the privilege against self incrimination apply at common law to companies?

50. The common law has not given a single answer to the applicability of the priv ilege against self–incrimination to a corporate person. A narrow majority in the High Court of Australia in Environment Protection Authority v. Caltex Refining Co. Pty Limited (1993) 178 CLR 477 (HCA) (Mason CJ, Brennan, Toohey and McHugh JJ; Deane, Dawson and Gaudron JJ dissenting) has expressly rejected its availability. The United States Supreme Court has for a hundred years repeatedly reached the same conclusion: Hale v. Henke (1906) 201 US 43, Braswell v. United States (1988) 487 US 99. But the English Court of Appeal in Triplex Safety Glass Co. Ltd. v. Lancegaye Safety Glass (1934) Ltd. [1939] 2 KB 395 (CA), the New Zealand Court of Appeal in New Zealand Apple and Pear Marketing Board v. Master & Sons Ltd. [1986] 1 NZLR 191 (CA), the Alberta Court of Appeal in: Webster v. Solloway, Mills & Co. [1931] 1 DLR 831, the Supreme Court of Canada in Klein v. Bell [1955] 2 DLR 513 and the Court of Appeal of the Isle of Man In The Matter of Atrium Trading Ltd. (2003–2005) Manx LR 91 have all upheld it.

51. In Triplex Du Parcq LJ giving the judgment of the English Court of Appeal at 409 said:

"It is true that a company cannot suffer all the pains to which a real person is subject. It can, however, in certain cases be convicted and punished, with grave consequences to its reputation and to its members, and we can see no ground for depriving a juristic person of those safe–guards which the law of England accords even to the least deserving of natural persons. It would not be in accordance with principle that any person capable of committing, and incurring the penalties of, a

crime should be compelled by process of law to admit a criminal offence."

This decision has been assumed to be correct and acted upon in a number of judgments of the House of Lords, although curiously the actual point never appears to have been specifically decided. See: Rio Tinto Zinc Corporation v. Westinghouse Electric Corporation [1978] AC 547; British Steel Corporation v. Granada Television Ltd. [1981] AC 1096, at 1178; Rank Film Distributors Ltd. v. Video Information Centre [1982] AC 380.

52. In my judgment a dictum in the joint dissenting judgment of Deane, Dawson and Gaudron JJ in the Caltex Refining case at p 532 is very much in point:

"In the end, it is based upon the deep–seated belief that those who allege the commission of a cr ime should prove it themselves and should not be able to compel the accused to provide proof against himself. To make an exception in the case of a corporation may trouble the conscience less because a corporation 'has no body to be kicked or soul to be damned'. But that is hardly a sufficient justification for the exception having regard to the underlying principle and the purpose which it serves both of which apply to corporations."

Self incrimination at common law re foreign criminal offences

53. In Brannigan v. Davison [1997] AC 238 (PC), it was held that the common law privilege against self–incrimination did not apply where the person was at risk under a law of a different country of criminal or penal sanctions in relation to prior conduct or to the actual giving of evidence. In reaching this conclusion, Lord Nicholls of Birkenhead who delivered the judgment applied the decision of Lord Cranworth VC in King of Two Sicilies v. Willcox (1851) 1 Sim NS 301, who had similarly rejected the privilege under a claim based on foreign law.

54. The objections to extending the privilege to foreign law are closely considered by Lord Nicholls at 249F–250B, who concluded:

" If th e pr iv i le g e were appl icable w h en th e r i sk of prosecution is under the law of another country, the privilege would have the effect of according primacy to foreign law in all cases."

55. Section 65A does not, at least on its face, restrict the privilege to of fences committed in Hong Kong; compare the express restriction in s65. However, in R v. Au Yeung Chi Kwan [1993] 2 HKC 134 (CA), particularly relied upon by Mr. Fee, the Court of Appeal had endorsed a ruling in a criminal trial that a prosecution witness need not answer whether he had been guilty of various crimes in China.

56. The facts of the case relate to the armed robbery of the King Fook Jewellery Shop in Jordan Road in 1990, by 4 men, each of whom was armed with a gun. In the course of fleeing from the scene with a large quantity of watches and gold ornaments, one of the robbers callously shot dead an off duty immigration officer who was gallantly pursuing the robbers. At the trial of the organizers of the robbery, a number of their accomplices from China gave evidence. One of the accomplices gave evidence for the prosecution and was cross–examined. He admitted his involvement in the King Fook robbery. He also implicated the accused. He was cross–examined and in an effort to have the jury understand his true character and antecedents he was asked whether he had committed any offences in China. The witness himself objected to answering the question. Defence counsel

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asked the Judge to direct the witness to answer.

"Mr. Young: Well my Lord with respect, it can't incriminate him if it happened in China.

Court: It can when he gets back to China"

[See R v. Au Yeung Chi Kwan [1993] 2 HKC 134, 145C]

57. The Judge, Hooper J, then directed that the witness did not have to answer the question. On appeal the Court of Appeal rejected a ground based on the ruling, noting at 147C "it would be unrealistic and unfair ... that because the judge might not have had exact knowledge of the penal consequences of criminal law in China he should have required the witness to answer". No other Hong Kong decision in criminal or civil law appears to have had to deal with a claim to self–incrimination based on a legal system outside Hong Kong itself. Section 65A Evidence Ord was not in force at the time of Au Yeung Chi Kwan, which was therefore a decision at common law. It was the decision of the Privy Council 4 years later in Brannigan v. Davison [1997] AC 258 that the common law did not allow the privilege against self–incrimination to be based upon a risk under foreign law.

58. Power JA was, in my judgment, not purporting to lay down an absolute point of principle that in Hong Kong the privilege against self–incrimination could be based on foreign law. Rather the Court of Appeal was endorsing the trial Judge's exercise of his residual discretion to not require the witness to answer on the facts of the case. Seen this way, not only is the decision in Au Yeung Chi Kwan not inconsistent with Brannigan v. Davison, but is actually a prescient example of how the residual trial discretion remains available and operates in criminal law. I conclude that a similar residual discretion also exists in civil law.

59. The very factors Lord Nicholls of Birkenhead relied upon in Brannigan v. Davison ( involving a Commission of Inquiry) for excluding the privilege in relation to foreign law might apply with equal vigour in criminal trials. The validity of a claim to the privilege on the basis, say, that a witness might be in peril of the criminal law of Sao Tomé and Principe (the smallest and least populous country in Afr ica) could only be adjudicated upon with great difficulty. The ascertainment of the law of that country would be needed. An adjournment of unknown length may probably be required. In the context of any criminal trial, but particularly one before a jury, the scenario is wholly destructive of the integrity and fluency of the criminal justice process. But I do not have to resolve any issue in relation to criminal law in this civil proceeding.

Is the criminal law of China "the law of Hong Kong" under s65 Evidence Ord?

60. But for the Plaintif fs it was submitted that (1) of fences under Mainland China law should also be included within the expression "the law of Hong Kong" found in s65(1)(a) Evidence Ord, or alternatively (2) that the Court should in any event retain a supplementary discretion despite s65(1)(a) to decline to compel an answer in relation to foreign offences, including offences under Chinese law.

61. The Plaintiffs would superficially have support in what Lord Nicholls said in Brannigan v. Davison at 250C–D:

"Second, the contrast being drawn between foreign and domestic law is the contrast between the laws of two different countries. Special considerations may apply in countries with a federal structure, as in Australia and the

United States, or in countries with a unitary structure but having different laws applicable in different parts of the country, as in the United Kingdom".

62. But the contrast drawn between foreign and domestic law is not a contrast always between two different countries. Lord Nicholls did not have the unique position of Hong Kong and China in mind in delivering that dictum, which I respectfully distinguish. In Hong Kong a vivid contrast exists between its law and the law in the other parts of the constituent areas comprising the same country – the People's Republic of China. By s2 of the Interpretation and General Clauses Ord Cap 1 "People's Republic of China" is defined as "includes Taiwan, the Hong Kong Special Administrative Region and Macau".

63. It is the Plaintiffs' case that the Hong Kong SAR, being in law part of the country of the People's Republic of China, it follows that Mainland Chinese Law should not be seen, for the purpose of the privilege against self–incrimination, as "foreign law" but as "domestic law".

64. I reject the submission that Mainland Chinese criminal law is "domestic law" for this or any purpose in Hong Kong. In a non–pejorative, technical sense only, the criminal law of Mainland China is for the Hong Kong SAR external law and is therefore given either the appellation "foreign law" or "non–domestic law" –being in either event, not "the law of Hong Kong" within s65(1)(a) Evidence Ord.

65. A combination of Articles 18 and 84 of the Basic Law at a minimum, make it unarguable, that the criminal law of Mainland China, ("National Law" as it is properly described in the Basic Law), may be applied in Hong Kong, outside the very special pre–conditions set out there in Article 18.

66. Mr. Fee's submission would structurally and functionally subvert the separate constitutional model of the HKSAR. Hong Kong is an inalienable constituent part of China, but it enjoys under the Basic Law a separateness that critically includes a legal system operating under the Rule of Law. The paradox which supplies the covalent unifying power between China and the Hong Kong SAR, is that Hong Kong is a part of China yet apart from it, with its own laws – one country: two legal systems.

67. There may be some eventual reciprocity in the enforcement of certain civil law matters, but no such mutuality or convergence exists in criminal law.

Discretion to exclude for incrimination under foreign law

68. In Brannigan v. Davison Lord Nicholls of Birkenhead at 251B-D considered that the unqualified inapplicability of the privilege to foreign law was in itself a potentially unsatisfactory principle, as it would by definition deny a court tasked with that circumstance any discretion, regardless of the nature of the crime, under the foreign law and regardless of the likely practical consequences for the witness under that law.

69. In short, the graphic example of a witness or party in civil proceedings refusing to give a relevant answer or to produce a relevant document on the basis that it would incriminate him or his wife for murder contrary to the penal law of any legal system outside Hong Kong, is plainly that type of circumstance. There, the Court would have, in my judgment, the jurisdiction in civil law to exercise a discretion to excuse a witness from giving self–incriminating evidence.

70. In Arab Monetary Fund v. Hashim [1989] 1 WLR 565, Morritt J

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held first that there was no privilege against self–incrimination in relation to possible criminal offences under foreign laws because of the explicit language of s14 Civil Evidence Act 1968.

71. At 573H–574C Morritt J secondly held that no discretion resided in a Judge to exclude any relevant evidence in civil law on the basis that the compelled answer or document would place the witness in peril of a foreign criminal law. But Morritt J thirdly concluded that the general discretion involved in an equitable remedy (there an interlocutory injunction) was available, so that the foreign incrimination aspect did become a relevant factoring the discretion after all.

72. I respectfully disagree with the second conclusion, but respectfully agree with the f irst , and third: so in the result the outcome but not the reasoning is shared. I accept the Plaintiffs'submission that in a civil proceeding the Court has a residual discretion to take into account any incrimination under non-domestic law. Of course there is no discretion in relation to Hong Kong law. It is an absolute. But it does not follow that the other extreme also exists, so that no possibility of protection against compelled incrimination disclosure would exist. While at the interlocutory stages or at trial of a civil action, a judge does not normally have any discretion as to the admission of relevant and admissible evidence, the issue in relation to self-incrimination is outside that very normalcy. The consequences of a forced answer could be literally life-threatening. The privilege protects personal freedom and human dignity. It is "deep rooted" in Hong Kong law: Lam Chi Ming v. The Queen [1991] 2 AC 212, 22 per Lord Griffiths. It protects "the individual against the affront to dignity and privacy inherent in a practice which enables the prosecution to force the person charged to supply the evidence out of his or her own mouth": R v. Amway Corporation (1989) 56 DLR (4th) 309, 323 (SCC) per Sopinka J.

73. In civ il law the orthodox capacity for excluding relevant probative ev idence is very limited, yet it is wide enough to permit a claim to self-incrimination even under foreign law to be evaluated as a factor in the exercise of a judicial discretion. Lord Nicholls stated in Branningan v. Davison at p 251 D that a civil court had "inherent power to conduct its process in a fair and reasonable manner".

74. This special approach within civil law was adopted in Credit Suisse Fides Trust SA v. Cuoghi [1998] QB 818 (CA) per Millett LJ at 830 B, per Lord Bingham CJ at 833D–F, with whom Potter LJ at 830 G concurred. These authorities post–date the decision in Arab Monetary Fund v. Hashim [1989] 1 WLR 565 and I propose to apply them. Lord Bingham CJ held, directly inconsistent with the second conclusion of Morritt J in Arab Monetary Fund:

"Mr. Cuoghi was not entitled to claim the statutory right not to incriminate himself provided by section 14 of the Civil Evidence Act 1968. This right is, however, one widely respected among civilized nations irrespective of statute, and the judge was in my view fully entitled to indicate that he would exercise his discretion..."

75. In Beckkett Pte Ltd v. Deutsche Bank AG [2005] 3 SLR 555 (CA), the Singapore Court of Appeal considered an application for leave by Beckkett Pte Ltd. to be released from the implied undertaking to use documents obtained via discovery from Deutsche Bank AG, for the purpose of obtaining an injunction in Indonesia. There was a significant risk that the Bank might be prosecuted in Indonesia if leave to use the documents were given. The Court of Appeal refused to sanction the use of the documents.

76. Chao Hick Tin JA at paragraphs [35]–[36], after referring to Arab Monetary Fund v. Hashim [1989] 1 WLR 565 (Morritt J) and Credit Suisse Fides Trust SA v. Cuoghi [1998] QB 818 (CA) concluded that a residual discretion existed to take into account the possibility of a foreign prosecution and the risks of self–incrimination. See also: Re Casterbridge Properties [2002] BPIR 428 at [33] per Burton J in the English Chancery Division to the same effect.

The Privilege against Self‑incrimination of a Company does not extend to its Directors

77. As the Plaintiffs which alone claim the privilege are corporate a further consideration for the purposes of the exercise of the discretion arises. It is whether the foreign law self–incrimination of a company necessarily extends to also protect the directors of the company, which may themselves be both corporate or human, as the personages through which the Plaintiffs materially exist and operate.

78. In my judgment the priv ilege against self-incrimination claimed by a company is not descendible–it is personal to the company-incrimination of the self is privileged, incrimination of the company by the director(s), protects the company but not the directors. As the company has a separate legal personality it is that separate personality alone that is protected. It is a distinct legal person and it is that juristic person's privilege only. The principle in Salomon v. A Salomon & Co. Ltd. [1897] AC 22 must work both ways.

"If people choose to conduct their affairs through the medium of corporations, they are taking advantage of the fact that in law those corporations are separate legal entities, whose property and actions are in law not the property or actions of their incorporators or controlling shareholders cannot, for all purposes beneficial to them, insist on the separate identify of such corporations but then be heard to say the contrary when discovery is sought against such corporations"

Tate Access Inc. v. Boswell [1991] Ch at 531F–H per Sir Nicholas Browne–Wilkinson V–C.

79. The position is consistent too with the view of Lord Diplock in Rio Tinto Zinc Corporation v. Westinghouse Electric Corporation [1978] AC 547, 637G – 638A , so while a company may claim privilege in the same way as an individual, the privilege is that of the company and does to extend to the office holders. See also to this effect Sociedaide Nacional de Combustiveis de Angola UEE v. Lundquist [1991] 2 QB 310, 336 C (CA) per Beldam LJ. See also: Rochfort v. Trade Practices Commission (1982) 153 CLR 134, 145 (HCA) per Mason J (as he then was).

80. It follows that in exercising the discretion that I have found to exist, the separate circumstances of the directors are not included. But if this conclusion is not correct, the Plaintiffs still would not have the discretion exercised in their favour. SABIC dealt with Beauhorse, for its omission to obtain a business licence under sections 31 and 32 of the Administrative Penalty Law [PRC] ( 中 華 人 民 共 和 國 行 政 處 罰 法 ), by the imposition of a modest RMB5,000 administrative penalty. No reason has been advanced why any sanctions against the directors of the Plaintif fs in relation to this or other such offences would be disproportionate from that relativity, in their nature or severity.

81. In British Steel Corporation v. Granada Television Ltd. [1981] AC 1096, 1174 Lord Wilberforce ruled that discovery is a remedy

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which (being equitable) is discretionary. Therefore a balancing exercise must be performed. This applies too to interrogatories. In Bank of Valletta Plc v. National Crime Authority (1999) 165 ALR 60, 62 the Full Federal Court of Australia (Wilcox, Whitlam and Lehane JJ) stated that since Brannigan v. Davison the trend of authority:

"is that it is not a sufficient answer to a requirement that a person give evidence or produce documents to say that to do so will or may constitute a breach of a foreign law; nonetheless a court will weigh the effect of compliance on the person in determining whether or not to insist upon it."

82. A corporate person cannot suffer imprisonment. The alleged offences for which the privilege has been unsuccessfully claimed are typical of the lesser regulatory classification of criminal of fences against the minor f iscal interests of the State, in contradistinction to serious crimes against the breathing person that exist in all legal systems. Because s65 has deliberately contracted the privilege it is not for the Court to therapeutically widen it by an excessive allocation of discretionary power.

83. In my judgment the Court retains a very limited discretionary power not to compel disclosure only in circumstances where the offence is one that would expose an individual to a lengthy sentence of imprisonment or worse, under a foreign law. But I do not need to rule on the outer limits. The decision of Hoffman J in Arab Monetary Fund v. Hashim (No. 2) [1990] 1 All ER 673 supports the existence of only a very narrow discretion.

84. In circumstances necessarily exposing a person to lengthy imprisonment a Hong Kong civil court would understandably baulk at the consequences of compelled testimony or documents. But the present case does not begin to engage that type of scenario and is only very ordinary. I would not begin to exercise my discretion in the Plaintiffs' favour. The Defendant has an entitlement under Hong Kong civil law, in these proceedings, to learn the nature and extent of any non-compliance by the Plaintiffs, which is of the essence of this action.

85. The Order of Master Kwan is affirmed with only a necessary variation to the date for compliance. The Plaintiffs will answer within 28 days from the date of the sealed Order herein being served upon them: O26 r2(1)(a). The appeal is dismissed with costs to the Defendant in any event.

Recorder of the Court of First Instance of the High Court (Gerard McCoy)

Mr. Johnny Fee, of Messrs. Fairbairn Catley Low & Kong, for the Plaintiffs/Appellants

Mr. Kam Cheung, instructed by Messrs Mason Ching & Associates, for the Defendant/Respondent