Lloyd's Maritime and Commercial Law Quarterly
PERSONAL AND PROPRIETARY CLAIMS AGAINST BRIBEES
Attorney-General for Hong Kong v. Reid
The background
The salaries paid to expatriates working in Hong Kong are high when measured against United Kingdom domestic salaries. But they were clearly not high enough for Charles Reid, a New Zealander working in the Government legal service in Hong Kong. Mr Reid, whose career culminated in the office of Acting Director of Public Prosecutions, supplemented his income by taking illicit payments in return for obstructing the prosecution of certain criminals. The scale on which he did this was considerable. When he was apprehended and prosecuted, he had amassed assets under his control worth some H.K. $12.4 million, which could only have been derived from the bribes. In 1990 Mr Reid was sentenced to eight years’ imprisonment and ordered to pay this sum to the Crown. It could be seen as an indictment of the process for enforcing a judgment that in 1993 no part of this sum had been paid.
The Attorney-General for Hong Kong, acting on behalf of the Crown, sought to assert a right to three freehold properties in New Zealand which it was alleged had been acquired with the bribes. The claim failed at first instance and in the New Zealand Court of Appeal.1 An appeal was taken to the Judicial Committee of the Privy Council.2 This Comment examines that decision.
It was not disputed that money from the bribes had been used for the purchases. But it was necessary to show also that the Crown had a proprietary right to the bribes and to any property acquired with them. On this point, the English Court of Appeal had held in Lister v. Stubbs
3 that, although a fiduciary taking bribes was under a personal obligation to account for them to his principal, the principal had no proprietary right to the bribes. The New Zealand courts considered themselves to be bound by this decision. But in the Privy Council’s opinion Lister v. Stubbs was wrong in principle and inconsistent with earlier authorities. Since the decision concerned liability to account for ill-gotten gains, no-one could be allowed to claim that he had ordered his affairs in reliance on the decision; it should not be followed, and the claim of the Crown to the land in New Zealand should therefore succeed.
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