On 10 April 2024, the Court of Final Appeal (“CFA”) in Tam Sze Leung v Commissioner of Police [2024] HKCFA 8 upheld the Court of Appeal’s (“CA”) decision affirming the validity of the Letters of No Consent (“LNC”) regime operated by the Hong Kong police.
Appeal to CFA
The appellants’ banks accounts had been frozen pursuant to the LNC regime after the police had communicated to the relevant banks that the accounts contained funds representing the proceeds of crime. The appellants originally challenged the LNC regime by way of judicial review.
On 30 December 2021, the Court of First Instance (“CFI”) granted a declaration in favour of the appellants, holding that the LNC regime was unlawful, not prescribed by law, and disproportionately interfered with their right to property.
On 14 April 2023, the CA overturned the CFI decision. The appellants successfully applied to the CFA for leave to appeal against the CA’s decision.
The background of the case and the previous decisions have been discussed here.
CFA’s Decision
The Court of Final Appeal has now unanimously held that the LNC regime is lawful and that:
- The actions undertaken by the police were not ultra vires, nor did they constitute any misuse of police power, in that the communications with the banks fell within the duties and powers of the police under the Police Force Ordinance (Cap. 232) to prevent money laundering and secure the suspect assets pending further investigation.
- Articles 6 and 105 of the Basic Law protecting the right to property were not engaged since the bank accounts were frozen as a result of the banks’ decision to comply with their anti-money laundering obligations. As such, the constitutional challenge based on property rights where the appellants were only temporarily deprived of the use of the funds could not be sustained. In any event, the Court was satisfied that the actions of the police were prescribed by law and were a proportionate measure.
- Articles 10 and 14 of the Bill of Rights protecting the right to access to legal advice / right to a fair hearing and the right to private and family life were also not engaged. The Court observed that the appellants had not adduced evidence of any hardship and had found funds to live their lives and to instruct solicitors and Counsel to present and argue the case. The Court further observed that it was open to the appellants throughout to seek relief against the banks for withholding their funds or to resort to the courts in bringing judicial review proceedings against the police, as they had done. The constitutional challenge was, therefore, untenable.
Conclusion
The LNC regime serves as an interim and expedient relief for victims of fraud, playing a vital role in preventing the dissipation of funds.
The finality of the decision affirms the LNC framework and the role of both the banks and the police when dealing with suspicious transactions and brings much needed clarity surrounding the use of the LNC regime after a landmark challenge.
Contacts
Nick Gall, Senior Partner
Tel +852 3405 7688
nickgall@gallhk.com
Felda Yeung, Partner
Tel +852 3405 7674
feldayeung@gallhk.com
Ashima Sood, Senior Associate
Tel +852 3405 7688
ashimasood@gallhk.com
Tanya Parmanand, Trainee Solicitor
Tel +852 3405 7678
tanyaparmanand@gallhk.com
