Hong Kong (Attorney General) v. Reid et al., (1993) 163 N.R. 221 (PC)

• Case Date: November 01, 1993
• Jurisdiction: Canada (Federal)
• Citations: (1993), 163 N.R. 221 (PC)

Hong Kong (A.G.) v. Reid (1993), 163 N.R. 221 (PC)

MLB headnote and full text

The Attorney General for Hong Kong (appellant) v. Charles Warwick Reid and Judith Margaret Reid and Marc Molloy (defendants)

(Appeal No. 44 of 1992)

Indexed As: Hong Kong (Attorney General) v. Reid et al.

Judicial Committee of the Privy Council

London, England

Lord Templeman, Lord Goff of Chieveley, Lord Lowry,

Lord Lloyd of Berwick and

Sir Thomas Eichelbaum

November 1, 1993.

Summary:

Reid, a New Zealand national, became the Acting Director of Public Prosecutions for Hong Kong. Reid pleaded guilty to accepting bribes. Reid was sentenced to eight years imprisonment and ordered to pay the Crown HK$12.4 million, being the value of the assets controlled by Reid which could only have been derived from bribes. Reid declined to pay any of the HK$12.4 million. Among Reid's assets were three properties located in New Zealand. The Crown com­menced an action in New Zealand to claim the properties on the ground of constructive trust. The Crown registered caveats against the properties. When the Crown attempted to renew the caveats, Reid opposed the renewal on the ground the Crown had no equitable interest in the properties.

The High Court of New Zealand declined to renew the caveats. The Crown appealed.

The New Zealand Court of Appeal dis­missed the appeal. The Crown appealed.

The Judicial Committee of the Privy Council advised Her Majesty that the appeal should be allowed.

Bankruptcy - Topic 488

Property of bankrupt - Exemption or exclusion - Trust property - Bribes - A prosecutor accepted bribes for obstructing certain prosecutions - The Crown sued to recover the proceeds - The Judicial Com­mittee of the Privy Council observed that "[i]f a trustee mistakenly invests monies which he ought to pay over to his cestui que trust and then becomes bankrupt, the monies together with any profit which has accrued from the investment are withdrawn from the unsecured creditors as soon as the mistake is discovered. A fortiori if a trustee commits a crime by accepting a bribe which he ought to pay over to his cestui que trust, the bribe and any profit made therefrom should be withdrawn from the unsecured creditors as soon as the crime is discovered" - See paragraph 25.

Criminal Law - Topic 5622

Punishments (sentence) - Forfeiture order - Proceeds of enterprise crime - Bribes - A Crown prosecutor accepted bribes for obstructing certain criminal prosecutions - The Crown sued to recover the proceeds on the ground of constructive trust - The Judicial Committee of the Privy Council held that the Crown had an equitable interest in the property - Their Lordships stated that "[w]hen a bribe is accepted by a fiduciary in breach of his duty then he holds that bribe in trust for the person to whom the duty was owed. If the property representing the bribe decreases in value the fiduciary must pay the difference. ... If the property increases in value, the fiduciary is not entitled to any surplus in excess of the initial value of the bribe ..." - See paragraph 7.

Trusts - Topic 2308

Constructive trusts - General principles - Circumstances when imposed - Bribes - [See Criminal Law - Topic 5622 ].

Trusts - Topic 2344

Constructive trusts - Basis for imposition - Breach of confidence or fiduciary re­lationship - Bribes - [See Criminal Law - Topic 5622 ].

Cases Noticed:

Keech v. Sandford (1726), Sel. Cas. Ch. 61 (L.C.), apprvd. [para. 9].

Fawcett v. Whitehouse (1829), 1 Russ. & M. 132; 39 E.R. 51 (L.C.), consd. [para. 10].

Sugden v. Crossland (1856), 3 Sm. & G. 192; 65 E.R. 620, consd. [para. 11].

Tyrrell v. Bank of London (1862), 10 H.L. Cas. 26; 11 E.R. 934 (H.L.), consd. [para. 13].

Hay's Case - see Canadian Oil Works Corp., Re.

Canadian Oil Works Corp., Re (1875), 10 Ch. App. 593 (L.J.J.), consd. [para. 14].

McKay's Case - see Morvah Consols Tin Mining Co, Re.

Morvah Consols Tin Mining Co., Re (1875), 2 Ch. D. 1 (C.A.), consd. [para. 15].

Pearson's Case - see Caerphilly Colliery Co., Re.

Caerphilly Colliery Co., Re (1877), 5 Ch. D. 336 (C.A.), consd. [para. 16].

Metropolitan Bank v. Heiron (1880), 5 Ex. D. 319 (C.A.), not folld. [para. 18].

Lister & Co. v. Stubbs (1890), 45 Ch. D. 1 (C.A.), not folld. [para. 23].

Powell & Thomas v. Jones (Evan) & Co., [1905] 1 K.B. 11 (C.A.), refd to. [para. 28].

Attorney General v. Goddard (1929), 98 L.J.K.B. 743, refd to. [para. 28].

Regal (Hastings) Ltd. v. Gulliver, [1942] 1 All E.R. 378 (H.L.), consd. [para. 28].

Reading v. Attorney General, [1951] A.C. 507; [1951] 1 All E.R. 617 (H.L.), consd. [para. 29].

Islamic Republic of Iran Shipping Lines v. Denby, [1987] 1 Lloyd's Rep. 367, refd to. [para. 30].

Sumitomo Bank Ltd. v. Kartika Ratna Thahir, [1993] 1 S.L.R. 735, apprvd. [para. 31].

Boardman v. Phipps, [1966] 3 All E.R. 721; [1967] 2 A.C. 46 (H.L.), consd. [para. 32].

Tai Hing Cotton Mill Ltd. v. Liu Chong Hing Bank Ltd., [1985] 2 All E.R. 947; [1986] A.C. 80 (P.C.), expld. [para. 33].

Hart v. O'Connor, [1985] A.C. 1000; [1985] 2 All E.R. 880 (P.C.), consd. [para. 34].

Authors and Works Noticed:

Millet, Peter, Bribes and Secret Commis­sions, [1993] R.L.R. 7, generally [para. 31].

Counsel:

David Oliver, Q.C., for the Attorney Gen­eral of Hong Kong;

Antony White, for the respondents.

This appeal was heard in London, England, by Lord Templeman, Lord Goff of Chieve­ley, Lord Lowry, Lord Lloyd of Berwick and Sir Thomas Eichelbaum of the Judicial Committee of the Privy Council.

The judgment of the Judicial Committee was delivered on November 1, 1993, by Lord Templeman.