O KIN TUEN v. COMMISSIONER OF CUSTOMS AND EXCISE

HCAL 2182/2025

[2026] HKCFI 606

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 2182 OF 2025

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J U D G M E N T

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A.  Introduction

1.  On 19 August 2021, HK$20 million cash (“Seized Money”) was seized by the Customs & Exercise Department (“C&ED”). The Seized Money is suspected proceeds of an indictable offence under section 25(1) of the Organised and Serious Crimes Ordinance Cap 455 (“OSCO”), and it was seized and retained under the power of a Warrant issued in accordance with sections 5(2)(d) and 5(5) of OSCO.

2.  Some three months or so later – and notwithstanding that it was not seized from him – the Applicant came forward claiming ownership of the Seized Money. The Commissioner of Customs & Excise (“Commissioner”) has refused to release the Seized Money to the Applicant (“Refusal Decision”), and has continued retention of it pending an active and ongoing criminal investigation (“Continued Retention”) (together, “Decisions”).

3.  By Form 86 dated 26 September 2025, the Applicant sought leave to apply for judicial review so as to challenge the Decisions. I gave directions to bring the matter to a rolled-up hearing on 27 January 2026. At the hearing, the Applicant was represented by Mr Anson Wong Yu Yat and Ms Leung Fu Ting Ivy of Counsel, and the Commissioner was represented by Ms Vivian Kao, Senior Government Counsel, and Mr Mike Yau, Government Counsel.

4.  At the end of the hearing I reserved my decision to be handed down later. This is my Judgment.

B.  Background

5.  The Cross-boundary Movement of Physical Currency and Bearer Negotiable Instruments Ordinance Cap 629 (“Cap 629”) is, as its long title identifies:

An Ordinance to establish a declaration and disclosure system to detect the cross-boundary movement of a large quantity of physical currency and bearer negotiable instruments into or out of Hong Kong; to provide for the powers to restrain the movement of physical currency and bearer negotiable instruments suspected to be related to money laundering and terrorist financing; and to provide for related matters.

6.  Broadly, under sections 5 and 6 of Cap 629, an authorised C&ED officer may require a person arriving in Hong Kong or who is about to leave Hong Kong to disclose whether that person is in possession of a large quantity of Currency and Bearer Negotiable Instruments (“CBNIs”), using the declaration form specified by the Commissioner.

7.  Upon internal review of CBNIs declarations, it was observed that two particular cross-border drivers (“Drivers”) made more than 25 declarations on their inbound or outbound journeys at the Hong Kong-Zhuhai-Macao Bridge Control Point (“HZMBCP”) between August 2020 and August 2021. Specifically, between May and August 2021, the Drivers declared themselves to be the owner of large amounts of cash (varying from around HK$3.5 million to HK$27 million) for export to Macao or later Zhuhai in 17 CBNIs declarations amounting in total to approximately HK$166 million. These sums were considered to be grossly incommensurate with the respective financial profile and background of the Drivers, who had declared themselves to be owners of the sums, and the sums are suspected to be proceeds of an indictable offence. One of the Drivers was a Tse Hin Ting (“Tse”).

8.  On 18 August 2021, C&ED made an ex parte application for, and a District Court Judge granted, various warrants pursuant to section 5 of OSCO. Of particular relevance to the present proceedings is a warrant (“Warrant”) with validity of execution until 31 August 2021, which empowered authorised C&ED officers to enter a tow truck with registration mark NP 619 (“NP 619”):

at any time and there to search for and seize and retain any material, including any computer equipment, digital device(s) and data contained therein, other than items subject to legal privilege, with respect to which an offence has been committed or is about to be committed against the provisions of [section 25(1) of OSCO], namely “Dealing with property known or believed to represent proceeds of indictable offence”.

9.  On 19 August 2021, Tse made a CBNIs declaration at the HZMBCP declaring that he was the owner of HK$20 million cash (i.e. the Seized Money) to be exported to Macao via the seven-seater vehicle driven by him with registration mark CL 789 (“CL 789”).

10.  Shortly after Tse departed Hong Kong via HZMBCP, a Choi Tak Wing (“Choi”) driving NP 619 arrived at the HZMBCP to depart for Zhuhai (note, not Macao). Choi made no CBNIs declaration, and reported/certified that NP 619 was unladen/empty.

11.  According to investigations by C&ED, Tse alighted from CL 789 in the HZMB restricted area and placed a bag (later found to contain the Seized Money) inside the front passenger side of the driving compartment of Choi’s NP 619, which was parked at the time. Choi then continued his outbound trip to Zhuhai with the bag containing the Seized Money.

12.  Subsequently, both vehicles CL 789 and NP 619 were separately intercepted. On execution of the Warrant, the bag containing the Seized Money was found in Choi’s possession inside NP 619. No money was found inside CL 789 driven by Tse. It is C&ED’s case that both certifications/declarations made by Choi and Tse – which were supposed to reflect the state of their respective vehicles throughout the journey – were false.

13.  Tse and Choi were arrested and cautioned for suspicion of committing an OSCO offence between May 2021 and August 2021. The Seized Money, being suspected crime proceeds, was seized and retained by the Commissioner as authorised by the Warrant.

14.  The Seized Money has been retained since then, for a period now in excess of four years and five months.

15.  This is so, notwithstanding that by letter dated 25 November 2021, the Applicant (through his formal legal representatives) claimed himself as the owner of the Seized Money.

16.  The letter suggested that the Applicant is the owner of the Seized Money, seized “against [Tse], the driver of vehicle bearing registration number CL 789”, which is of course factually inaccurate because the money was seized from Choi. The letter does not suggest the reason why it had taken more than three months for the Applicant to claim ownership. Nor is it clear why the Applicant – who claims that Tse was his driver – would have apparently not known that the money was seized from Choi, because Tse had given it to him.

17.  Since then, there has been correspondence between C&ED and solicitors for the Applicant in relation to the Applicant’s claim for the Seized Money to be given to him. I do not think it necessary to rehearse any of the detail of that correspondence. Suffice it to say that (1) the Applicant says that he has been fully co-operative and has provided all documents which he would be able to provide, and has exhausted his ability to be of any further meaningful assistance, whereas (2) C&ED say that the Applicant has repeatedly failed to provide or has only selectively provided documents and information critical to furthering the investigations, and has not provided explanation why is unable to provide some of the outstanding supporting documents that are reasonably expected to be in his possession, or at least accessible by or known to him.

18.  In his evidence filed for these proceedings, the Applicant has affirmed that in 2021 he had engaged in cryptocurrency trading using cash transactions, purchasing cryptocurrency in Macao with cash which he arranged to be delivered via cross-border drivers arranged by a Yeung Kin Wing (“Yeung”), with whom it seems the Applicant has since lost contact. The Applicant says that the delivery of cash from Hong Kong to Macao had been smooth until the events on 19 August 2021, when his driver Tse passed the Seized Money to Choi, a cross-border driver arranged by Yeung, and the cash was seized.

19.  In summary, the Commissioner has refused to release the Seized Money to the Applicant in part because there are significant doubts as to the Applicant being the owner of the money, and because the Seized Money is associated with an ongoing case and OSCO investigation.

20.  Insofar as it may be necessary for me to say so, I accept on the materials that the Commissioner is perfectly entitled to have at least significant doubts as to the Applicant being the owner of the Seized Money. Further, it seems to me that the Seized Money is not simply associated with an ongoing case and investigation; rather, it comprises the very subject matter of the potential criminal charge under section 25(1) of the OSCO.

21.  In the meantime, the Commissioner has also conducted extensive criminal investigations arising from the suspected money laundering offence under section 25 of the OSCO. The nature and extent of the investigations have been explained in some detail in the evidence, which has emphasised that the investigations have been directed at, but not limited to, activities potentially falling within the ambit of “organised crime” as defined under section 2 of OSCO, concerning cross-border criminal activities involving multiple persons and substantial planning and organisation, and underscoring the gravity and complexity of the matters under investigation. In broad summary, the investigations have included:

(1)  investigation of seven persons suspected to be involved, including their background, occupation, lifestyle and expenditure, source of income, bank accounts and other assets or financial means;

(2)  investigation of five counterparty companies suspected to be involved or having had dealings with persons under suspicion;

(3)  review of over 5,000 pages of financial documents from different entities;

(4)  examination of layers of suspected money laundering, involving over 1,570 transactions incorporated into a 46-page report prepared by a Treasury Accountant;

(5)  analysis of 4,470 crypto transactions, incorporated into a 429-page crypto expert report;

(6)  conducting 13 video-recorded interviews (“VRIs”), obtaining 150 witness statements and opinion from eight experts;

(7)  conducting searches and visits for different addresses in Hong Kong, and executing over 20 search warrants and obtaining 24 production orders;

(8)  examination of various digital devices;

(9)  contacting the relevant authorities in three other jurisdictions for assistance.

22.  Throughout the process, advice has been taken from the Prosecutions Division of the Department of Justice (“DOJ”). During the hearing, Ms Kao updated me that the further investigations required had been recently completed, and the matter was again with the DOJ for its further (perhaps final) advice.

23.  However, as at the time of the hearing, neither the Applicant nor Choi nor Tse had been prosecuted for any offence.

24.  As further part of the background, it is helpful to refer to the affirmation evidence filed in these proceedings by Tse and Choi. Each of them has affirmed the following (in identical wording):

I hereby confirm that to the best of my understanding, the Seized Money … belongs to the Applicant in these proceedings. In the event that the court allows these judicial review proceedings, I agree that the Seized Money should be released to the Applicant.

25.  Though there may be understandable reasons why Tse and Choi might wish to be circumspect about what they say openly in affirmation evidence filed in these proceedings, it seems to me that the evidential value of the above statement is not great:

(1)  Neither Tse nor Choi give any basis as to why it is their “understanding” that the Seized Money belongs to the Applicant.

(2)  Tse does not even go so far as to say that he was the Applicant’s driver at the material time.

(3)  Tse offers no explanation as to why he declared the Seized Money to belong to him (and not to the Applicant).

(4)  Tse offers no explanation as to why having made that declaration for the purposes of cross-border travel between Hong Kong and Macao, he then gave the Seized Money to Choi who was apparently travelling cross-border from Hong Kong to Zhuhai.

(5)  Neither Tse nor Choi mention any alleged involvement of Yeung.

(6)  Choi does not even say he was acting as instructed by Yeung or the Applicant.

(7)  Choi offers no explanation as to the circumstances in which he came to take possession of the Seized Money.

C.  Intended Grounds of Review

26.  The Applicant relies upon the following two grounds of review:

(1)  Ground 1: Illegality Ground

The Refusal Decision and the Continued Retention are illegal, in that the Seized Money has been seized and retained longer than is reasonably necessary for the investigation for the purpose of which the Warrant was issued.

(2)  Ground 2: Proportionality Ground

The Refusal Decision and the Continued Retention constitute a disproportionate interference with the rights to property of the Applicant.

27.  Though the two grounds have been addressed separately in submissions, there is obviously some degree of overlap between them. As it was put by Mr Wong in his written submissions, the gist of the challenge concerns the lawfulness of the continued retention of the Seized Money by the Commissioner more than four years and five months after it was seized.

28.  In his oral submissions, Mr Wong said that the two grounds of review should also be approached in the following context, and in light of certain basic propositions:

(1)  The Court need not decide anything about the underlying merits of any criminal charges which C&ED may bring against any person.

(2)  Nor does the Court need to decide on the truth or probability of truth of the version of events put forward by the Applicant.

(3)  Nor does the Court need to decide the true ownership of the Seized Money.

(4)  The Court’s focus instead should be on whether the Commissioner has the power to continue to retain the Seized Money, and if so whether the continued retention has become disproportionate.

(5)  Search and seizure under statutory powers constitute fundamental infringements of the individual’s immunity from interference by the state with his property and privacy constitutionally guaranteed under Articles 6 and 105 of the Basic Law (“BL6” and “BL105”).

(6)  Where there is a public interest which requires some impairment of those rights, the legislature may permit such impairment. But, in the absence of clear words, the legislature cannot be assumed to have legislated so as to interfere with the basic rights of the individual to a greater extent than is necessary to secure the protection of that public interest: see Keen Lloyd Holdings Ltd v Commissioner of Customs and Exercise (unreported, HCAL 113/2012 and HCAL 82/2013, McWalters JA, 23 December 2014) at §169.

(7)  Where the legislature authorises a significant interference with fundamental rights, the legislation must be interpreted by the Court as requiring that any such interference should be no greater than is objectively established to be necessary to achieve the legitimate aim of the interference, in substance a requirement of proportionality: see Pham v Secretary of State for the Home Department [2015] 1 WLR 1591 at §119.

(8)  The burden is on the law enforcement agency (“LEA”) to justify the seizure and retention of property: see Ghani v Jones [1970] 1 QB 693 at 696 and 708G-709C.

(9)  Particular emphasis should be placed upon the fourth of the matters identified in the Ghani case as required to be taken into account in balancing the interests of seeing whether there is a justification for the seizure of an article, namely that the LEA must not keep the article, nor prevent its removal, for any longer than is reasonably necessary to complete their investigations or to preserve it for evidence – so that for example if a copy will suffice, it should be made and the original returned.

(10)  The Court has to strike a “fair balance” between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights: see Capatina v Romania (Application number 911/2016, ECtHR, 28 May 2023) at §45.

(11)  When considering the question of proportionality in this case, the focus of the Court should be on the third step of the Hysan analysis – a reference to Hysan Development Co Ltd v Town Planning Board (2016) 19 HKCFAR 372 at §§131-141 – and the reference to “fair balance” is used in the context of that third step.

D.  Broad Overview of Commissioner’s Stance

29.  It is also helpful to record the broad points made by Ms Kao as to the context in which she said the grounds of review should be considered. In her submissions, she emphasised that:

(1)  The Court should not lose sight of the objective factual scenario (which I have canvassed in the background section above).

(2)  There is no challenge in these proceedings to the scope, validity, legality or subsequent execution of the Warrant.

(3)  There is no challenge to the constitutionality of section 5 of OSCO.

(4)  The Warrant was granted under section 5 of OSCO, only after judicial scrutiny as to whether or not the power should be granted to seize and retain.

(5)  The express purpose for the grant of that power was with respect to an offence which has been committed or is about to be committed against the provisions of section 25(1) of OSCO, namely dealing with property known or believed to represent the proceeds of an indictable offence.

(6)  The seizure and retention identify that the Seized Money should not be released pending conclusion of investigation and/or the decision on any prosecution – and this is so regardless of whether or not the Applicant can substantiate ownership of the Seized Money.

(7)  There is no requirement in law to seek any further order – such as a Restraint Order (“RO”) – in order to retain something already lawfully seized and retained.

(8)  Whilst it may be correct that no charges have yet been laid, the criminal investigation remained and remains ongoing.

30.  Ms Kao also emphasised that it is settled law that the Court should exercise great caution in interfering with a prosecutorial decision by way of judicial review, and be even more reluctant to review the criminal investigation process, in the absence of wholly exceptional circumstances. In particular, the Court should be slow to second-guess at what point enquiries should cease, or when a suspect can be dismissed from inquiry: see my own previous decisions in Tam Sze Leung v Commissioner of Police [2022] 1 HKLRD at §§138-139 (in a passage not criticised on appeal); and Yeung Wing Kit v Commissioner of Independent Commission Against Corruption[2021] HKCFI 3337 at §§32-33.

31.  This is because, under common law, the Police and other LEAs enjoy broad operational discretion as to how to carry out criminal investigative duties, where the exercise of discretion involves making difficult judgments as to the manner of the investigation, the approach of the investigation, and how best to utilise resources and manpower in addressing the statutory duties and objectives.

32.  It may also be helpful to note that the Commissioner does not challenge the Applicant’s standing to bring this judicial review application. Though the Commissioner has not been satisfied that the Applicant is the owner of the Seized Money, it is accepted that the question of standing is a different matter, and the Applicant has sufficient standing to seek the relief sought. Therefore, I do not need to address further the issue of standing, and it is open to the Applicant to argue all potential grounds.

E.  Material Statutory Provisions

33.  There can be no doubt as to the importance and undisputed need for provisions to combat money laundering and to facilitate the pursuit and confiscation of proceeds of crime. This is reflected in the long title of OSCO, which specifies that its purpose is:

… to create new powers of investigation into organized crimes and certain other offences and into the proceeds of crime of certain offenders; provide for the confiscation of proceeds of crime; make provision in respect of the sentencing of certain offenders; create offences relating to the proceeds of crime or property representing the proceeds of crime; and for ancillary and connected matters.

34.  As already indicated, the Warrant in this case was issued pursuant to, and to give the powers under, section 5 of OSCO, which in so far as is material for present purposes provides:

5. Authority for search

(1) An authorized officer may, for the purpose of an investigation into—

(a) an organized crime;

(b) the proceeds of organized crime of any person who has committed or is suspected of having committed an organized crime;

(c) the proceeds of a specified offence of any person who has committed, or is suspected of having committed, that specified offence,

apply to the Court of First Instance or the District Court for a warrant under this section in relation to specified premises.

(2) On such application the court may issue a warrant authorizing an authorized officer to enter and search the premises if it is satisfied—

…

(d) that the conditions in subsection (4)(a), (c) and (d) or subsection (4)(b), (c) and (d) are fulfilled.

(3) …

(4) The conditions referred to in subsection (2)(d) are —

(a) where the investigation is into an organized crime, that there are reasonable grounds for suspecting that the organized crime has been committed;

(b) where the investigation is into the proceeds of organized crime or a specified offence of a person—

(i) that the person has committed an organized crime or that specified offence, or that there are reasonable grounds for suspecting that he has committed an organized crime or that specified offence; and

(ii) that there are reasonable grounds for suspecting that the person has benefited from organized crime or that specified offence;

(c) that there are reasonable grounds for suspecting that there is on the premises material which is likely to be relevant to the investigation for the purpose of which the application is made, but that the material cannot at the time of the application be particularized;

(d) that—

(i) it is not practicable to communicate with any person entitled to grant entry to the premises; or

(ii) entry to the premises will not be granted unless a warrant is produced; or

(iii) the investigation for the purposes of which the application is made might be seriously prejudiced unless an authorized officer arriving at the premises could secure immediate entry to them.

(5) Where an authorized officer has entered premises in the execution of a warrant issued under this section, he may seize and retain any material, other than items subject to legal privilege, which is likely to be relevant to the investigation for the purpose of which the warrant was issued.

(6) …

(7) An authorized officer may photograph or make copies of any material seized under this section.

(8) …

35.  Ms Kao has emphasized section 5(5), and for his purposes Mr Wong has emphasised section 5(7).

36.  I also note that, in the application for the Warrant, the conditions referred to in subsection (2)(d) were those set out in subsection (4)(a), (c) and (d).

37.  OSCO Part III ‘Confiscation of Proceeds of Crime’ seeks to prevent persons benefiting from proceeds of crime, ultimately by their confiscation, preferably before such proceeds have been either partly or completely dissipated. To that end, Part IV ‘Enforcement, etc of Confiscation Orders’ makes provision, amongst other things, for the enforcement of confiscation orders, and for the preservation of assets, through restraint orders and charging orders in advance of an application for a confiscation order.

38.  Sections 14, 15 and 16 of OSCO deal with restraint orders (“ROs”) and charging orders. The powers to make the relevant orders are conferred on and to be exercised by the Court of First Instance, ensuring judicial scrutiny and oversight. These powers are triggered when an arrest warrant is issued or the defendant has been arrested, charged and/or indicted, or where the Court of First Instance is satisfied that, in all the circumstances of the case, there is reasonable cause to believe that the defendant may be charged with the offence after further investigation is carried out: see section 14(1)(a) and (ba).

39.  For present purposes, it is unnecessary to set out the various provisions in full. But, in addition to the judicial oversight, amongst the features of note are that:

(1)  the Court may make ROs and charging orders once proceedings have been instituted in Hong Kong against the defendant for a specified offence, and where such proceedings have not been concluded;

(2)  the Court must be satisfied to a specific evidential threshold namely, in all the circumstances of the case, that the defendant has benefited from that specified offence;

(3)  where a defendant has been arrested and released on bail or has refused bail, the Court must be satisfied that there is reasonable cause to believe that the defendant may be charged with the offence after further investigation is carried out;

(4)  in such cases, there are specific time limits for the expiry of any order granted, in that such orders must expire on a date not later than is reasonably necessary for the purposes of the investigation and in any event not later than 6 months after the date on which they are made;

(5)  in those cases, the Court may nevertheless extend such orders for a similar period of time, but only if satisfied that the defendant will be charged with the offence after further investigation is carried out, and again for a period no longer than is reasonably necessary for the purposes of that of instigation and in any case not more than 6 months;

(6)  though a restraint order may be made on an ex parte application, notice must be given to persons affected by the order;

(7)  there are the further procedural safeguards in that a restraint order may be varied or discharged on application by any person affected by it.

40.  Mr Wong has emphasized that ROs must expire on a date not later than is reasonably necessary for the purposes of the investigation, and must last for a maximum of six months extendable only for a further maximum of six months – so a maximum of 12 months in total.

41.  Part V ‘Miscellaneous’ creates various criminal offences including, as is material for present purposes, the offence of dealing with proceeds of indictable offence: see section 25(1), which provides (subject to a statutory defence which is not relevant for present purposes) that a person commits an offence if, knowing or having reasonable grounds to believe that any property in whole or in part directly or indirectly represents any person’s proceeds of an indictable offence, he deals with that property.

42.  I have already mentioned sections 5 and 6 of Cap 629 (above), which relate to disclosing when entering or leaving Hong Kong being in possession of a large quantity of CBNIs, using the specified declaration form.

43.  Part 3 of Cap 629 headed ‘Powers to Detect and Restrain Movement of CBNIs’ includes sections 16 to 19. Though not referenced in the Form 86, nor in the Applicant’s written skeleton submissions, Mr Wong sought to place reliance on those sections at the oral hearing. They provide as follows:

16. Powers to stop and search etc.

(1) An authorized officer may exercise any or all of the following powers for the purpose of performing the officer’s functions under this Ordinance—

(a) stop and search a person arriving in or about to leave Hong Kong and examine anything in the person’s possession;

(b) stop, board and search a cross-boundary conveyance and examine anything on the conveyance;

(c) require a person arriving in or about to leave Hong Kong or a person on board a cross-boundary conveyance—

(i) to produce the person’s identity card or travel document for inspection; and

(ii) to answer any question the officer considers necessary to ascertain whether there has been any contravention of Part 2;

(d) if any cargo is stored at any place before being exported, or after having been imported and before or at the time of its collection by the consignee—examine the cargo at the place.

(2) An authorized officer may seize and detain anything that—

(a) is found as a result of the exercise of a power under subsection (1); and

(b) the officer reasonably suspects to be connected with a contravention of Part 2.

(3) An authorized officer may use any force reasonably necessary for exercising a power under subsection (1) or (2).

17. Seizure and detention of CBNIs suspected to be crime proceeds or terrorist property

(1) In addition to the power conferred under section 16(2), an authorized officer may seize any CBNIs found as a result of the exercise of a power under section 16(1) if the officer reasonably suspects the CBNIs to be—

(a) property representing the proceeds of an indictable offence mentioned in section 25(1) of the Organized and Serious Crimes Ordinance (Cap. 455); or

(b) terrorist property within the meaning of section 2(1) of the United Nations (Anti-Terrorism Measures) Ordinance (Cap. 575).

(2) Subject to sections 18 and 19, an authorized officer may detain the CBNIs for a period of not more than 10 working days after the day of seizure.

(3) An authorized officer may use any force reasonably necessary for exercising a power under subsection (1) or (2).

(4) In this section—

working day (工作日) means a day that is not—

(a) a general holiday or a Saturday; or

(b) a black rainstorm warning day or gale warning day as defined by section 71(2) of the Interpretation and General Clauses Ordinance (Cap. 1).

18. Continued detention of CBNIs suspected to be crime proceeds by court order

(1) An authorized officer may, within the period mentioned in section 17(2), apply to the Court for an order to authorize the continued detention of CBNIs the officer reasonably suspects to be property mentioned in section 17(1)(a).

(2) The Court may make the order if it is satisfied that—

(a) there are reasonable grounds for suspecting that the CBNIs are property representing the proceeds of an indictable offence mentioned in section 25(1) of the Organized and Serious Crimes Ordinance (Cap. 455); and

(b) the detention of the CBNIs is justified while—

(i) their origin or derivation is further investigated;

(ii) consideration is given to the institution (whether in Hong Kong or elsewhere) of proceedings against a person for an offence with which the CBNIs are connected; or

(iii) consideration is given to the institution (whether in Hong Kong or elsewhere) of proceedings which may result in the forfeiture or confiscation of the CBNIs.

(3) An order made under subsection (2) may authorize the continued detention of the CBNIs for a period specified in the order. The period must not exceed 3 months beginning on the date of the order.

(4) On an application made by an authorized officer, the Court, if satisfied that the conditions mentioned in subsection (2) continue to exist, may by order (new order)—

(a) extend the period specified in an order made under subsection (2) for a period specified in the new order; or

(b) further extend a period extended under this subsection for a period specified in the new order.

(5) A new order must not—

(a) specify a period exceeding 3 months beginning on the date of the order; and

(b) result in the total period of the detention of the CBNIs exceeding 2 years beginning on the date of the order made under subsection (2).

(6) At any time while CBNIs are being detained under an order made under this section, the Court may direct their return to an interested person in relation to the CBNIs or, if there is more than one such interested person, any one of them, if—

(a) the Court is satisfied on an application made by an interested person in relation to the CBNIs that the conditions for their detention do not, or no longer, exist; or

(b) the Court is satisfied on an application made by an authorized officer that their detention is no longer justified.

(7) In this section—

Court (法院) means the Court of First Instance or the District Court;

interested person (關係人), in relation to any CBNI, means—

(a) the person from whom it was seized;

(b) a person by whom or on whose behalf it was imported or exported; or

(c) a person who otherwise has an interest in it.

19. Further provisions on detention of CBNIs suspected to be crime proceeds

If, at any time while CBNIs are being detained under section 17(2) or an order made under section 18, any of the following proceedings are instituted, the CBNIs may be detained until the proceedings have been concluded—

(a) proceedings instituted (whether in Hong Kong or elsewhere) against a person for an offence with which the CBNIs are connected;

(b) proceedings instituted (whether in Hong Kong or elsewhere) which may result in the forfeiture or confiscation of the CBNIs.

44.  Mr Wong has emphasized that, in addition to the judicial oversight needed, the seizure and detention of CBNIs under these sections can be only for a maximum first 10 working days, extendable three months at a time, aggregating to a maximum 2-year period. But I also note that once proceedings have been initiated on an offence with which the CBNIs are connected, or which may result in the forfeiture or confiscation of the CBNIs, then retention is permitted until the proceedings have been concluded. That is obviously consistent with the preservation of those materials – whether as evident or otherwise – in aid of the legitimate aim of combating money laundering and preventing persons taking the benefit of money laundering.

45.  I keep these various statutory provisions in mind.

46.  Further before turning to consider the individual grounds of review, I think it may be helpful to bear in mind what have been recognised as the fundamental principles of the law of search and seizure, which I would seek to summarise as follows:

(1)  the object of the seizure is to enable the LEA to obtain evidence which may assist in the conviction of a person for an offence with which he is charged or of which he is reasonably suspected to be guilty;

(2)  property seized under a lawful search does not cease to be the property of its owner;

(3)  the LEA seizing it may only retain it for as long as it is needed for the investigation or for any prosecution flowing from it;

(4)  once the seizure is no longer needed for the criminal investigation or any prosecution flowing from it, then it must be returned to its owner or otherwise disposed of in accordance with a court order;

(5)  hence, the LEA is under an obligation to return the seized property to its owner, unless a court orders otherwise (for example, by order of forfeiture or confiscation);

(6)  the LEA may only use the property for the purpose for which it was seized (such as the particular criminal investigation giving rise to the seizure);

(7)  there is a duty not to relinquish possession of the seized materials into the hands of a third party not otherwise authorised by law to receive them.

F.  Ground 1: Illegality Ground

47.  Under this ground, Mr Wong placed much reliance on the case of Lai Hing v J Cater [1976] HKLR 340, which he said provides authority for the following propositions:

(1)  The Court will scrutinise any assertion by the LEA that a seized item may itself be required as evidence at some future trial.

(2)  The test to be applied by the Court is to ask whether the article or document is in itself an essential proof of a fact in issue, or a fact relevant to a fact in issue, in the event of a prosecution. Therefore, if the fact can be proved otherwise, the article should be returned.

(3)  When considering whether retention is reasonably necessary, the Court will consider alternative mechanisms which provide safeguards to the individual concerned.

48.  In the Lai Hing case, ICAC officers acting under a warrant issued pursuant to the then section 17 of the Prevention of Bribery Ordinance Cap 201 (“POBO”) searched a deposit box belonging to the plaintiff and seized from it, amongst other things, a savings account book and three fixed term deposit receipts. The savings book was returned, but the three deposit receipts were retained, on the basis that the Commissioner of the ICAC considered the receipts to be required as evidence that some future trial. Trainor J held (at p353-355) that the power under section 17 permitted the Commissioner to seize an article or document and retain it falls so long as is reasonably necessary for him to obtain such information or evidence as is available from it to enable him to investigate the offence under the POBO. But, when that object had been achieved, the article or document should be returned, unless the article document is in itself an essential proof of the fact in issue, or fact relevant to a fact in issue, in the event of a prosecution. He further held that if the Commissioner is in doubt he should apply for a RO, as that right to apply would be the way to carry through on any intention to freeze the monies represented by the receipts. Then, the plaintiff would have the benefit of having the application of the Commissioner considered by the Court. But, acting as he did, the Commissioner frustrated the right of the plaintiff to have the merits of the Commission’s right to restrain considered, and any hardship investigated arising from imposing a RO.

49.  Mr Wong submitted that Trainor J’s interpretation of the then section 17 of the POBO should similarly apply to section 5(5) of the OSCO, namely that the power conferred was to permit an authorised officer to seize any material and retain it, only for so long as is reasonably necessary for the investigation for the purpose of which the warrant was issued. This, Mr Wong submitted, was also consistent with the long-standing common law principle identified in the fourth requisite in the Ghani case (see above), and with the provision in section 5(7) of the OSCO relating to the power to photograph or make copies of any material seized under section 5.

50.  But, Mr Wong submitted, the Commissioner in this case has gone against that interpretation, and has effectively frustrated the rights and protections available to the Applicant within the RO regime (see above).

51.  Mr Wong further submitted that neither of the two grounds put forward by the Commissioner to justify the retention of the Seized Money in fact provided any justification. First, he said, the claim to an ongoing investigation does not explain why only the original banknotes are necessary for any ongoing investigation, when the details of those banknotes are seen in the C&ED receipt given for them when they were seized. Nor did the Commissioner suggest that copies (if necessary, high quality colour copies) of the banknotes could not be made. Secondly, he said, the claim to the need to preserve the Seized Money for evidence is a bad one, because the Seized Money is not in itself an essential proof of a fact in issue at any presumed criminal trial.

52.  It is, of course, common ground that a LEA must not retain seized materials for any longer than is reasonably necessary to complete investigation or to preserve it for evidence for any prosecution of the criminal conduct flowing from the investigation. But I do not think the Commissioner has seized or retained the Seized Money illegally, or for longer than is reasonably necessary in this case.

53.  First, the Seized Money was seized and has been retained pursuant to the express power given under the Warrant, which was granted by the District Court Judge after judicial scrutiny of the application for the Warrant, in light of section 5 of the OSCO. Further, there is no need further to restrain the dealing with the Seized Money, and just like any other piece of critical physical evidence it would be kept until the end of the investigation and or criminal proceedings (and I do not think this point is circular, as Mr Wong suggested).

54.  Secondly, as Ms Kao correctly submitted, there is no proper basis to ask the Court exercising its judicial review jurisdiction to pre-determine the question of relevance or proof of materials before the criminal investigation comes to an end. As stated in Next Digital Ltd v Commissioner of Police (No 2) [2021] 5 HKC 411 at §82(2), that would impede on an existing criminal investigation, and require the Court to carry out the impossible task of determining at an earlier stage than its completion what are and what are not relevant materials for an on-going criminal investigation and potential prosecution. I am not persuaded that the Court could decide now that the actual Seized Money would not be able to assist the prosecution to prove relevant facts in any prosecution of the suspected offence under section 25(1) of the OSCO.

55.  Thirdly, and in any event, the Seized Money has been seized and retained in the context of an investigation against a suspected criminal organisation operating a cross-border money laundering operation, involving the transfer of substantial amounts of suspected proceeds of crime out of Hong Kong to Macau or Zhuhai. The Seized Money is a part of the alleged total, and is itself suspected to be property which in whole or in part directly or indirectly represents proceeds of an indictable offence – i.e. the Seized Money is the very subject matter of the potential offence, for the investigation of which the Warrant was issued. It seems to me that the Seized Money is also plainly in itself proof of a fact in issue, or a fact relevant to a fact in issue, in the event of a prosecution. The Seized Money – the actual banknotes – is the best evidence of alleged proceeds of an indictable offence, and it seems to me (with respect) to be somewhat absurd to suggest that it is sufficient evidence to have colour photocopies of the banknotes, or to rely on the receipt given upon seizure, such that the very subject matter of the charge should be released to the person facing that charge, or to an associate of the person facing that charge.

56.  Fourthly, it may well be that if charges are laid, consideration may be given to making an application for an RO in respect of the Seized Money. But, the fact that in other circumstances an application might be made for an RO – relevant to a different stage in the investigative process, and with a different relevant evidential standard – does not seem to me to mean that there was no lawful power to seize and retain the Seized Money under the Warrant.

57.  Fifthly, I also accept that it is appropriate for the Seized Money to be preserved and retained, so that it may be available for the purposes of justice until the conclusion of any trial.

58.  Sixthly, the Seized Money seems to me to be rather different in character from the fixed term deposit receipts in the Lai Hing case. The receipts in that case were not evidence of any offence, but merely showed deposits to the credit of the plaintiff. That is why it was held more appropriate to call a bank officer to testify about the deposit, if necessary to establish the deposit. Here, as I have already stated, the Seized Money is itself evidence of the commission of the suspected offence for which the Warrant was issued. Similarly, I also accept there is some force in Ms Kao’s submission that it is appropriate for the prosecution to ensure it can prove every link in the chain of evidence leading to proof of any offence charged.

59.  Seventhly – and relevant also to Ground 2 – where there is no time frame imposed for the investigation or prosecution of any indictable criminal offence, it would be simplistic to suggest that any particular period of time must be unreasonable. The time taken will necessarily depend on various factors including the complexity of the case, the difficulties encountered in further investigation, and the way in which the person under investigation responds to enquiries by the LEA.

60.  Ground 1 is not reasonably arguable with any realistic prospect of success. Alternatively, even if there is a proper basis for the grant of leave, I would refuse Ground 1 on substantive hearing.

G.  Ground 2: Proportionality Ground

61.  Ground 2 significantly overlaps with Ground 1, and I keep in mind some of the matters already traversed above.

62.  I accept Mr Wong’s submission that Ground 2 would require a holistic, factual and contextual assessment of the proportionality of the continued retention of the Seized Money in light of the constitutional protection afforded to the rights of property under BL6 and BL105.

63.  As already identified, the focus would be on the third step of the well-known proportionality analysis. The Court is less concerned with the first, second and fourth steps – which have not been put in issue between the parties. I also accept that the appropriate standard of review is towards the “manifestly without reasonable foundation” end of the spectrum, where the decision-maker (the Commissioner) is likely to be better placed than the Court to assess what is needed in the public interest. In such circumstances, as Ms Kao submitted, the Court will be astute not to insist on a potentially less intrusive measure than the one decided upon by the decision-maker when there is no dispute that there is a legitimate aim, and the search and continued retention is rationally connected to that aim.

64.  But of course Ground 2 only ‘has legs’ if the Applicant has property rights in the Seized Money with which there is interference through the seizure and retention of it. On this point, the submissions were starkly divergent.

65.  Perhaps partly contrary to one of his primary submissions – namely that the Court did not need to decide the true ownership of the Seized Money – Mr Wong submitted that it is at least clear that Choi has the “best title” to it, and Choi has expressly given his consent to the Seized Money being released to the Applicant as owner. Mr Wong relied on the case of Jaroo v Attorney General of Trinidad and Tobago [2002] 1 AC 871 at §§19-21, for the following propositions:

(1)  It is not necessary for a person who wishes to assert his constitutional right to the enjoyment of property against the state to show that he is the owner of the property which he wishes to enjoy or to demonstrate that he has some other good title to it. It is sufficient for him to show that at the relevant time he was in possession of the property.

(2)  Even if it be established on balance of probabilities that the money is the proceeds of crime, this is no defence to the plaintiff’s claims as they could rely on the right to possession as against the police.

(3)  In the absence of any evidence that anyone else is the true owner, once the police’s right of retention comes to an end, the person from whom the items were compulsorily taken is entitled to possession.

(4)  Save so far as legislation otherwise provided, possession, whether obtained lawfully or not, vested in the possessor a possessory title which was good against the world save anyone setting up or claiming under a better title.

(5)  Possession is entitled to the same legal protection whether or not it has been obtained lawfully or by theft or by any other unlawful means.

66.  On the other hand, Ms Kao submitted that the Court in its supervisory role should refrain from seeking to determine the question of ownership of the Seized Money, which may be answered in the criminal trial (though that may not be an element of the offence of money laundering, and it may be premature to say whether the question is relevant at trial), or by civil forfeiture or interpleader proceedings at an appropriate later period after criminal proceedings or the completion of investigation. Further, the Commissioner has the duty not to relinquish possession of the Seized Money to a third party unless otherwise authorised by a court order. Given that the Applicant’s claimed ownership remains unsubstantiated – at least as yet to the satisfaction of the Commissioner – release of the Seized Money may jeopardise the genuine owner’s property rights under BL6 or BL105.

67.  During the hearing, I explored with Counsel whether there was some middle path, where the apparent likelihood of ownership being established might be factored in to the proportionality analysis. I had in mind that if, say, an applicant has a strong claim to ownership that might weigh more in the balance in favour of the individual applicant, where as if the applicant has only a weak claim to ownership that might not be a strong factor for him weighing in the balance. However, with the benefit of their individual researches, Mr Wong and Ms Kao agreed that it is necessary for the Court to decide one way or the other whether the constitutional rights are engaged.

68.  First, I accept that it does not fall to me to decide who owns the Seized Money – indeed, I do not think I am in a position to make any such decision. But I would also point out that I do not accept that the only potential candidates for ownership would be Tse, Choi and the Applicant. On the other hand, as I have noted, it seems to be common ground that a decision has to be made by the Court to say that the constitutional rights are engaged or they are not. This is why Mr Wong submitted that pointing to Choi as having the “best title” is sufficient.

69.  But I do not think that helps the Applicant. If Choi has the best title, then it might be said that it is his rights in the property that are being infringed. But he makes no such claim, and I do not think that his assertion that the Applicant is the owner – made without any evidential explanation – takes the matter much further. It may be that Choi is able to say that he is not the owner, but the Court is not obliged to accept his bare assertion that the Applicant is the owner. The same goes for the assertion made by Tse. Indeed, in the overall circumstances revealed by the evidence, it seems to me that the Court is entitled to bring a very healthy degree of scepticism to the evidence which is said to demonstrate that it is the Applicant’s constitutional rights with which there has been an interference.

70.  Whilst it may be for the Commissioner to justify continued interference with property rights, I think it falls to the Applicant first to establish the appropriate standard that it is his property rights with which there has been interference.

71.  Ultimately, having considered the evidential materials, and like the Commissioner, I am not satisfied that the Applicant has substantiated property rights to the Seized Money triggering BL6 or BL105. That is fatal to the Applicant on Ground 2, and no proportionality assessment need be performed. Nevertheless, I can go on to consider the position on an assumption that the constitutional property rights rest with the Applicant.

72.  If the proportionality assessment is appropriate, Mr Wong submitted – and I accept – the consideration should take into account matters including at least: (1) the length of the period of retention; (2) the claimed justification for continued retention; (3) any indication as to how much longer the retention will continue; (4) whether there are any substantive or procedural safeguards in place to protect the individual’s rights; and (5) the availability of an alternative mechanism which provides better safeguards.

73.  As to the length of the period of retention, it is thus far already over four years and five months. In that regard, Mr Wong pointed to the timeframes under other statutory provisions, such as sections 14, 15 and 16 of the OSCO (essentially a maximum of one year) and sections 16, 17 and 18 of Cap 629 (essentially a maximum of two years). As he put it, the relevant periods provide some sort of benchmark as to how long is too long. Here, the retention of the Seized Money has been for more than four times and more than two times those periods respectively – so, Mr Wong submitted, the benchmarks identified that is too long. I think there is some force in that submission.

74.  Whilst it may not be possible prospectively to decide when retention will become “too long”, it must certainly be possible in any given set of circumstances to look back and decide that the line must have been crossed from not too long to too long – from proportionality to disproportionality. As part of that assessment, it seems to me that regard can be had to the kind of “flavour” benchmark times set out in other statutory provisions, so long as it is remembered that those are not directly applicable to the circumstances and that the provisions may be triggered at different stages of an ongoing process from investigation to prosecution.

75.  As to the justification for the retention thus far, Mr Wong relied on his submissions made under Ground 1, which I have already addressed.

76.  As to whether there is any indication as to how much longer the retention might continue, Mr Wong submitted that there is no indication at all. I do not think that is fair, where the evidence filed for the Commissioner identifies the arc of the investigations, and that the process of seeking intended likely final advice from the DOJ was underway, and Ms Kao has updated the Court to inform that the papers with the DOJ and such advice is awaited. There is at least a description of the period and events to happen, even if no number of weeks or months put upon it. It is plainly not simply open-ended.

77.  As to the question of substantive or procedural safeguards, Mr Wong submitted that there are none in place. He pointed out that, in contrast with the situation under the LNC Regime – dealt with in the Tam Sze Leung case – there is not even an internal periodic intermittent review. But, on the other hand, it seems to me that where the Applicant has been seeking the ‘return’ of the Seized Money, the Commissioner has necessarily considered whether or not he can and should properly continue to retain it. The correspondence between the Commissioner and the Applicant’s solicitors evidences engagement with that very question.

78.  As to an alternative available mechanism, Mr Wong relied upon what he described as the obvious alternative in the form of an application for RO. But, I have already held that the existence of a potentially less intrusive (or more protective) measure will not lightly be insisted upon by the Court where the first two steps of the proportionality analysis are satisfied and a wide margin of discretion exists.

79.  Though thus far extending to a period of around four and half years, the seizure and retention of the Seized Money is only temporary in nature (though I accept Mr Wong’s submission that the fact that the Applicant has not claimed any hardship does not necessarily mean that there was no prejudice in being kept from the funds over a lengthy period). I keep in mind the complexity of the criminal investigations, as highlighted in the Commissioner’s evidence and summarised by me above. I do not think that the overall length of time during which the Seized Money has been retained is, in the circumstances, unjustified. I also take into account that the original seizure and retention was pursuant to a statutory power given by Court Order in the Warrant, and there is no challenge of any kind to the Warrant. Even assuming interference with the Applicant’s property rights, the continued retention of the Seized Money can be seen to be reasonably necessary for the investigation, and enforcement of suspected offences of organised and serious crime.

80.  In short, I accept that the relevant fair balance has been struck, and there is no failure of proportionality.

81.  Ground 2 is not reasonably arguable with any realistic prospect of success. Alternatively, even if there is a proper basis for the grant of leave, I would refuse Ground 2 on substantive hearing.

H.  Result

82.  The Applicant’s judicial review application is dismissed.

83.  As to costs, it seems to me that costs should follow the event. Therefore, in the exercise of my discretion, I order that the Commissioner’s costs of these proceedings be borne by the Applicant, to be taxed if not agreed.

Mr Anson Wong Yu Yat and Ms Leung Fu Ting Ivy, instructed by Lau, Chan & Ko, for the applicant

Ms Vivian Kao, Senior Government Counsel, and Mr Mike Yau, Government Counsel, of the Department of Justice, for the putative respondent