Case Detail

CACC 198/2018

[2022] HKCA 338

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 198 OF 2018

(ON APPEAL FROM DCCC NO 431 OF 2017)

_______________

	HKSAR	Respondent
	v
	MAN YIU PUN (文耀彬)	Appellant

_______________

Before:

Hon Macrae VP, McWalters and Zervos JJA in Court

Date of Hearing:	3 December 2020
Date of Judgment:	3 December 2020
Date of Reasons for Judgment:	30 March 2022

__________________________________

REASONS FOR JUDGMENT

__________________________________

Hon Zervos JA (giving the Reasons for Judgment of the Court):

Introduction

1. The appellant stood trial before District Court Judge Dufton (the judge) on two charges of conspiracy to deal with property known or believed to represent the proceeds of an indictable offence, contrary to section 25 (1) and (3) of the Organized and Serious Crimes Ordinance, Cap 455 and sections 159A and 159C of the Crimes Ordinance, Cap 200. He was convicted of both charges and was sentenced to a total term of 4 years and 5 months’ imprisonment.

2. At the conclusion of the hearing we dismissed the appeal and said we would hand down our reasons in due course. These are our reasons.

The appeal ground

3. The appellant filed a notice of application for leave to appeal against his conviction and sentence. On 28 April 2020, the leave application was heard by a Single Judge, who granted leave only in relation to his conviction on the limited basis that “in determining that the [appellant] had reasonable grounds to believe, the judge may have erred in the matters to which he had regard and in the weight to which he gave those matters”.^{^[1]}

4. Mr Trevor Beel, who appeared for the appellant, in his Amended Perfected Grounds of Appeal dated 1 June 2020, articulated the terms of the ground on which leave was granted as follows:

“The judge erred in law in that he failed to evaluate the evidence in a safe and proper manner in regard to his findings and reasons that the appellant had reasonable grounds to believe at the time of the agreement with the 4^th defendant that the named property in both charges in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence. Thereby, in all the circumstances the conviction against the [appellant] is unsafe or unsatisfactory.”[2]

The charges and the defendants

5. In total, there were nine charges brought against four defendants; the appellant was the 3^rd defendant, (D3), at trial. All charges involved the offence of money laundering, either as a substantive offence or as a conspiracy to commit the substantive offence. The appellant was charged alone in respect of Charges 5 and 9, which were conspiracy offences where the unindicted co-conspirator was particularised as “a Nigerian male Okafor Joek Kingsley” (the 4^th defendant, (D4), at trial, also referred to as “Joe”). The 1^st defendant, (D1), was charged alone in respect of Charges 1 and 2, and jointly charged with the 2^nd defendant, (D2), in respect of Charges 3 and 4. Charge 4 was an alternative to Charge 3. Charges 1, 2 and 3 were conspiracy offences where the unindicted co-conspirator was particularised as “a Nigerian male alias Joe”. Charge 4 was a joint offence against D1 and D2. Both D1 and D2 testified that the unindicted co-conspirator in the charges they faced was D4.

6. D4 was alleged to be involved in the allegations against each of the other three defendants, but he was not charged with these offences. Instead, D4 was charged alone with three separate offences of money laundering under Charges 6, 7 and 8, in which it was alleged that he committed the offences together with another person, Casia Grace Garcia (PW4 at trial).

The particulars of Charges 5 and 9

7. The particulars of Charge 5 alleged that the appellant:

“… between a date unknown in December 2012 and the 21^st day of January 2013, both dates inclusive, in Hong Kong, conspired together with a Nigerian male OKAFOR Joek Kingsley, knowing or having reasonable grounds to believe that property, namely a total sum of $7,653,697.40 Hong Kong currency, in whole or in part directly or indirectly represented any person’s proceeds of indictable offence, to deal with the said property.”[3]

8. The particulars of Charge 9 alleged that the appellant:

“… on or about the 17^th day of September 2012, in Hong Kong, conspired together with a Nigerian male OKAFOR Joek Kingsley, knowing or having reasonable grounds to believe that property, namely a sum of $523,382.67 Hong Kong currency, in whole or in part directly or indirectly represented any person’s proceeds of indictable offence, to deal with the said property.”[4]

The trial

9. From the particulars of the charges, the duration of the conspiracy in Charge 5 was “between a date unknown in December 2012 and the 21^st day of January 2013”, whilst the duration of the conspiracy in Charge 9 was “on or about the 17^th day of September 2012”. Charge 9 was the first in time, in which it was alleged that the appellant used his own bank account on one occasion to assist D4 in laundering a sum of money through it. Charge 5 alleged that the appellant registered a business for D4 called Asia Supply Resources (“ASR”) and opened a business bank account for ASR which would enable D4 to receive monies into the account and then deal with these monies.

10. Most of the prosecution case was admitted at trial. This only necessitated the prosecution in calling one witness, a police officer who had visited the registered address of ASR.

11. The defence case was that the appellant trusted D4, and assisted him to set up and operate what he believed was a legitimate business and had no knowledge of any wrongdoing. The appellant testified that he had not conspired with D4 to launder the monies involved as he believed he was helping a friend.

12. D1 died during the course of the trial but only after he had testified in his defence. D4 also testified in his defence and parts of his evidence and D1’s evidence were relevant to the appellant’s case. The case against D2 was distinct from the appellant’s case, although there were similarities between them. It was alleged that D2 conspired with D1 and D4 to set up Asia Trading Co and open a bank account for the sole purpose of money laundering. D2’s case was that he assisted D4 to do genuine business in buying and selling clothes for D4 and did not suspect the monies remitted to the account were from illegal sources.[5]

Charge 5

13. It was an admitted fact that the appellant registered ASR as a sole proprietorship and commenced business on 26 October 2012.^{^[6]} Its business was declared to be “Import & Export, Resources” with its registered address at “2/F, No. 550 Canton Road, Kowloon”.^{^[7]} The appellant opened a bank account for ASR with Nanyang Commercial Bank on 31 October 2012.^{^[8]}

14. Between 1 December 2012 and 3 January 2013, a total sum of $7,653,697.40 was deposited into the ASR account. Except for the initial deposit of $50,000 cash, the monies deposited into the account were by way of eight overseas remittances. Between 6 December 2012 and 20 January 2013, all the monies in this account, other than $22.38, were withdrawn by way of ATM transactions and by multiple cheques being issued to various payees, including 11 cheques payable to D1, which were deposited into his personal savings account.[9] As the appellant was the account holder, he was the drawer of these cheques and retained custody of the cheque book, although he had provided the means for D4 to operate the account. The ASR account was eventually closed on 21 January 2013.

15. The offence period alleged under Charge 5 from 1 December 2012 to 21 January 2013 coincided with the financial transactions that took place through the ASR account, although the prosecution relied on the setting up of ASR and the registration of the account as evidence proving the existence of the conspiracy alleged.^{^[10]}

16. The appellant did not report to the Inland Revenue Department any income for himself or on behalf of ASR for the period from 1 April 2011 to 31 March 2015,^{^[11]} nor did he disclose ownership or interest in any real property.^{^[12]} Furthermore, between 1 January 2012 to 1 January 2015, no import or export declaration was lodged by ASR.^{^[13]}

Charge 9

17. It was an admitted fact that the appellant opened a savings account with the Hong Kong and Shanghai Banking Corporation on 28 September 1987. He was the sole signatory of it.^{^[14]} This was the bank account relevant for Charge 9.

18. The prosecution case was that the appellant had conspired with D4 to deal with $523,382.67 that had been remitted to the appellant’s personal account on 17 September 2012, knowing or having reasonable grounds to believe these monies represented the proceeds of an indictable offence. On 19 September 2012, $560,000 was withdrawn from the account.

The appellant’s cautioned interviews

19. The appellant was arrested when he was intercepted at Lo Wu Control Point on 2 May 2013.^{^[15]} The police conducted two cautioned interviews and two video records of interview with him. The voluntariness of the interviews was not challenged.^{^[16]}

20. In these interviews, the appellant admitted that he had set up ASR and opened the bank account for ASR at the direction of D4. He had known D4 for about 10 years. D4 wanted to do business with him and that was why ASR was established. Other than paying the registration fee for ASR, he had not invested any money in the business. He was the sole signatory of the ASR account and he had written cheques drawn on the ASR account on the instructions of D4. He received $1000 to $3000 a couple of times from D4 but could not recall the exact amounts. He closed the account due to complaints by the bank in respect of problematic remittances (Charge 5).[17]

21. He also admitted that he allowed D4 to use his personal savings account for monies to be remitted into that account, which he subsequently withdrew and gave to D4. On 19 September 2012, he and D4 went to the bank and withdrew $560,000 cash from his account and he gave cash in the sum of $523,382.67 to D4 (Charge 9).[18]

22. In support of its case, the prosecution submitted, amongst other things, that the appellant did not enquire into the business nature of the companies from which the monies were remitted; he blindly followed D4’s instructions; he did not know any of the payees; he turned a blind eye as to the source of the funds in not making any enquiry with D4; and his visit to a container depot in Kam Tin provided a doubtful basis for him believing D4 had “a big business” that generated the monies involved.^{^[19]}

The appellant’s defence

23. It was the defence case that there was no direct evidence to prove the existence of a conspiracy between the appellant and D4,^{^[20]} nor was there evidence to show that the appellant knew the funds represented the proceeds of crime.^{^[21]}

24. The appellant gave evidence and called his younger sister, Ms Man Yung Kuen. Ms Man testified that the premises of the registered address of ASR were owned by her and that they had been used as an office for the jade business of her husband and the appellant.^{^[22]}

25. The appellant testified that he was retired and had previously worked as a jade trader since 1986. He conducted his business out of a premises owned by his sister at 550 Canton Road.

26. In respect of Charge 5, the appellant said that he set up ASR and opened the ASR account for D4 in order to help D4 do business. As D4 was a foreigner and could not produce proof of residence for business registration, he asked the appellant to register the business and open a bank account for him. In respect of Charge 9, the appellant said he helped D4, who was his friend, to receive a remittance from his major customer by lending his personal savings account to D4 because he did not have a bank account.

27. In his records of interview,^{^[23]} the appellant said he first got to know D4 about 7 years ago at a bar in Lan Kwai Fong, as he would drink beer with him and sometimes do translation for D4 when D4 purchased goods in Yuen Long. He said D4 had taken him to a container depot in Kam Tin where many foreign workers were working and that they were helping D4 pack goods into containers.^{^[24]} He said he had seen an old identity card of D4, and on occasion he would help D4 move goods, for which D4 would pay him money. He said D4 traded new and second hand electrical appliances in Yuen Long, which he would forward to Africa for trading.^{^[25]}

28. The appellant explained that his personal savings account had been open for 30 years and was mainly used to pay expenses and bills. In September 2012, D4 had told him that he needed a bank account as he had a major customer from whom he needed to receive money and so the appellant helped him by lending him his account.^{^[26]}

29. In his first written record of interview, the appellant explained that in September 2012, D4 had said his major customer wanted to deposit money in his account but as D4 did not have an account he asked to borrow his account. He testified that D4 informed him that the remittance of $523,382.67 had been deposited into his account and as a result they went together to the bank on 19 September 2012. The appellant withdrew $560,000.00 in cash which he handed over to D4.

30. The appellant was referred to his record of interview where he said he only gave $523,382.67 to D4 and kept the rest for his personal use.^{^[27]} He said this was so long ago that he could not remember how much he had given to D4. He said he knew nothing at all about the source of the money and received no reward for having helped his friend.^{^[28]} It was put to the appellant in cross-examination that a withdrawal of $12,350 made on 19 September 2012 was his reward, to which proposition he disagreed.^{^[29]}

31. The appellant testified that D4 gave him $50,000 to open the ASR account, and that he gave the ATM card to D4, and issued the cheques on the instructions of D4.^{^[30]} The appellant was asked about the residential address in Sham Shui Po in the business registration. He said he was instructed by D4 to use that address and had no idea whose address it was. In cross-examination, he was asked why he did not ask D4 to produce a proof of address, and in response he said he had not thought about it.^{^[31]}

32. ASR’s registered address was the office of the appellant’s former partner in the jade trade, and was to be used as a correspondence address only.^{^[32]} He said that except for paying the registration fee he did not contribute any capital,^{^[33]} because he “did not believe those black guys”^{^[34]} and the business of ASR was buying things such as electrical appliances, auto parts and plastic flowers, which D4 would then ship to Nigeria.^{^[35]} The appellant said D4 would pay him “tea money” when there were profits to share. He did not think it unreasonable to have received this money as he had helped D4 transport the goods.^{^[36]}

33. Of the 8 overseas remittances (amounting to HK$7,653,697.40), the appellant said he did not know the companies which made the remittances, but was only told by D4 that his customers had remitted the money. He said that each time money was remitted to the account, D4 would inform him about it and instruct him to issue cheques, which he gave to D4. None of the ATM withdrawals were made by him as he had given the ATM card to D4.^{^[37]} He was instructed by D4 to write the names of the payees on the cheques.^{^[38]}

34. The appellant acknowledged that D1 was his friend, whom he had known for many years, and that he was a taxi driver. He did not ask D4 why monies were being transferred to D1 because he knew D1 and D4 were doing business together.^{^[39]}

35. The appellant said in his video record of interview that he did not find the deposit of the eleven cheques suspicious because he had asked D1 to source goods in mainland China for D4 and did not feel that D4 was doing something illegal.^{^[40]} However, he said he started to suspect something “when the bank contacted him saying money had been wrongly remitted but did not think of reporting his suspicion to the police”.^{^[41]}

36. In his evidence, D4 denied any involvement in relation to the offences in Charges 5 and 9. He denied ever asking the appellant to open a bank account for him and claimed he never had any ongoing business venture with D1. He also denied the allegations made against him by D1 and D2.^{^[42]}

The verdict on Charges 5 and 9

37. The judge conducted an extensive review of the evidence, during which he resolved factual issues and made findings of fact.

38. In addressing the facts and circumstances that were known to the appellant at the relevant time, the judge provided a detailed summary of the written records of interview and the video records of interview of the appellant[43] and a comprehensive outline of the defence evidence, including a full account of the appellant’s testimony when determining whether he had reasonable grounds to believe that the monies were the proceeds of crime.[44] The judge also addressed the evidence of D1 and D4 as it pertained to the appellant.[45]

39. The judge then engaged in a comprehensive discussion in respect of the evidence and submissions made on behalf of the parties. In explaining what evidence he accepted or rejected, the judge set out his findings in meticulous detail, addressing what was known to the appellant and admitted by him in his dealings with D4. He said:

“255. I have no hesitation in rejecting D3’s evidence and the explanations in the interviews that he registered Asia Supply Resources and opened the bank account for Joe to do business; that he lent his personal account to Joe because Joe said his major customer wanted to deposit money; and that he had no suspicion about the legitimacy of the monies withdrawn from the accounts because Joe had brought him to look at his business; he had helped Joe source goods by introducing D1 to him and Joe’s business was big.”[46]

40. The judge did not find the appellant’s evidence credible that the monies remitted to the ASR account were payments of goods by D4’s customers or that the payment into the appellant’s personal account was a deposit from a major customer of D4.[47] He discussed at some length the reasons why he did not find credible the appellant’s evidence that he was just helping a friend and had no suspicion about the monies remitted to the two accounts.

41. He noted the appellant’s evidence that he did not trust D4 and was afraid he would cheat him out of his money if he invested in ASR. He found it was inherently improbable that the appellant would register a business and open a bank account for D4 just to help a friend if he believed he might cheat him.[48] He rejected that ASR was registered to do genuine business or that there was any genuine business. He said:

“268. I find the evidence that D3 registered Asia Supply resources and opened the bank account because D4 was a foreigner, who had no proof of address and therefore could not open a bank account; that D4 took D3 to a container depot before and after the bank account was opened to see the business and that D4 had a lot of business, was entirely contrived in an attempt to show that the registry of Asia Supply Resources and the opening of the bank account was for genuine business and that the personal account was used for genuine business.”[49]

42. The judge also rejected the evidence of D1 and D4.[50]

43. As to the issue of whether the appellant had “reasonable grounds to believe” that he was dealing in the proceeds of crime, the judge concluded:

“Reasonable grounds to believe
278. By registering Asia Supply Resources and opening the bank account for Joe (Okafor Joek Kingsley) to use, D3 concealed the true holder of the account and the recipient of the monies remitted to the account.
279. I am satisfied so I am sure by transferring monies to the accounts of D1; Grace Garcia Casia (PW4); Julius Sendegeya and Chan Wai Kin, the only inference to draw is that these transfers were to conceal and disguise the true recipient of the monies passing through the account.
280. By allowing D4 to use his personal savings account D3 concealed the true recipient of the monies deposited in the account.
281. As the Court of Appeal observed in HKSAR v Wong Chor Wo & another at para 108:
‘In the normal course of events, if a man allows another person to use his bank accounts to deposit and withdraw funds, in the absence of evidence to the contrary, the inevitable inference will arise that the holder of the bank account has reasonable grounds to believe that the funds passing through the account represent the proceeds of an indictable offence.’
Asia Supply Resources
282. Having regard to all the circumstances, including:
(a) D3 did not report to the Inland Revenue Department any income for himself or on behalf of Asia Supply Resources for the period 1 April 2011 to 31 March 2015;
(b) D3 did not have any real property;
(c) D3 registered Asia Supply Resources and opened the bank account for Joe to use thereby concealing the true holder of the account and the recipient of the monies remitted to the account;
(d) shortly after the remittances were credited to the account D3, on the instructions of Joe, issued cheques transferring the monies; and
(e) the inherent improbability that buyers of goods would in the normal course of business remit payment for goods to a company who they had no dealings with,
I am satisfied so I am sure the only inference to draw is that D3 together with Joe had reasonable grounds to believe the monies deposited in the account, in whole or in part, directly or indirectly, represented the proceeds of an indictable offence and that anyone looking at those grounds objectively would so believe.
…
Personal savings account
284. Having regard to all the circumstances, including:
(a) D3 did not report to the Inland Revenue Department any income for himself or on behalf of Asia Supply Resources for the period 1 April 2011 to 31 March 2015;
(b) D3 did not have any real property;
(c) D3 allowed Joe to use the account thereby concealing the true recipient of the deposit of $523,382.67, which shortly after D3 withdrew and gave to Joe; and
(d) the inherent improbability that a buyer of goods would in the normal course of business remit payment for goods to a personal savings account of someone they did not know and who they had no dealings with,
I am satisfied so I am sure the only inference to draw is that D3 together with Joe had reasonable grounds to believe the deposit of $523,382.67 in whole or in part, directly or indirectly, represented the proceeds of an indictable offence and that anyone looking at those grounds objectively would so believe.”^{^[51]}

The appellant’s submissions

44. Mr Beel submitted the judge’s reasoning was flawed as there was no evidential foundation for making a finding as to the circumstances of the remittances from the buyers to the accounts. Mr Beel argued the “reality is that person or persons had nevertheless transferred money to the account irrespective of the nature of the account or in having no previous past dealings”.^{^[52]}

45. He argued that there was no relevance, nor should any weight be given to the judge’s findings for Charge 5 of (i) the appellant not reporting to the Inland Revenue Department any income for himself or on behalf of ASR; (ii) the appellant not having any real property; and (iii) the inherent improbability that buyers of goods would remit payment to a company with which they had no dealings.

46. Mr Beel submitted the position was the same for Charge 9.^{^[53]} He particularly emphasised the judge’s finding that the appellant had not registered any tax returns from 1 April 2011 to 31 March 2015, taking issue with the fact that the non-filing of tax returns took place prior to 17 September 2012 (the date “on or about” which the conspiracy in Charge 9 was alleged to have taken place). He argued that, before the judge could make a finding that the appellant concealed who the true beneficiary was, “any other explanation for the lie/deceit had to be properly considered and rejected”.^{^[54]} He suggested, other than being able to earn interest off the principal, there was no benefit to the appellant in having the money deposited in his account. As there was no benefit, the explanation offered by the appellant that he was doing so simply to help a friend remained a viable possibility. He noted that the appellant, in his video record of interview, stated he had declined D4’s offer to invest money in the business for two reasons. Firstly, “he didn’t believe in those black guys”, and secondly “he didn’t have the money”.^{^[55]} When asked by the judge about this he said he might have been tricked out of his money.

47. Accordingly, Mr Beel argued that there was no contradiction in a person declining to put money into a business because “he is wary of losing money but helping that same person set up the business without any personal financial risk because he is a friend. Further, his explanation that he didn’t have the money was a reasoned and viable explanation”.[56]

48. Finally, Mr Beel contended that the judge did not address the “simple question”, which was “why would the appellant, at this time in his life, embark on such criminal conduct where there was no evidential basis to show any benefit to the appellant.”^{^[57]}

The respondent’s submissions

49. Ms Samantha Chiu, for the respondent, referred to the Court of Final Appeal decision in HKSAR v Harjani Haresh Murlidhar,^{^[58]} where the Court reformulated the test for “reasonable grounds to believe”. The Court considered that the judgments in HKSAR v Pang Hung Fai^{^[59]} and HKSAR v Yeung Ka Sing Carson^{^[60]}merited clarification and explained the test that should be applied:

“26. … We remain of the view that the Seng Yuet Fong test correctly represents the law. In the interests of clarity, however, we would reformulate the test as follows
(i) What facts or circumstances, including those personal to the defendant, were known to the defendant that may have affected his belief as to whether the property was the proceeds of crime (‘tainted’)
(ii) Would any reasonable person who shared the defendant’s knowledge be bound to believe that the property was tainted?
(iii) If the answer to question (ii) is ‘yes’ the defendant is guilty. If it is ‘no’ the defendant is not guilty.”^{^[61]}

50. The Court under question (i) explained the test is subjective only in so far as it requires the tribunal to make findings as to the knowledge of the defendant at the time of the relevant transaction. And that, where, as here, the defendant gives evidence of the facts or matters which affected his belief about the nature of the property “the court has to decide whether he is, or may be, telling the truth about the existence of these facts and matters”.^{^[62]}

51. Under question (ii) the test is objective and requires the tribunal to take into account the facts or matters that the defendant claims affected his belief and consider whether a reasonable person with knowledge of those facts and matters would have believed that the property was tainted.

52. The Court advised caution where the defendant gives evidence as there were two interrelated questions: (i) is the defendant telling the truth when he says that he did not believe that the property was tainted; and (ii) could a reasonable person in the position of the defendant have failed to believe that the property was tainted?

53. In explaining the application of the objective test, which requires a court to make findings as to the knowledge of the defendant, the Court stressed:

“56. What this Court was emphasizing at [119] of Carson Yeung was the need to apply the test of ‘reasonable grounds to believe’ from the viewpoint of the defendant, having regard to all the facts and circumstances known to him, and not from the viewpoint of an objective bystander considering simply the adverse inferences to be drawn from the details of the transaction itself. This Court was certainly not intending to indicate that the defendant was entitled to be acquitted if he believed, or may have believed, that the property was not tainted, where he did not have reasonable grounds for such belief.
57. Once the court has determined, having due regard to the defendant’s evidence if he has testified, what facts and matters affected, or may have affected, his belief as to whether or not the relevant property was tainted, including any facts or matters that may have led him to form personal beliefs, perceptions or prejudices, the court must then ask the objective question of whether, any reasonable person, affected by all those facts and matters, would have been bound to conclude that the property was tainted.”

54. The judge in the present case did not have the advantage of the guidance in Harjani as that decision had not been handed down when he gave his verdict.^{^[63]} However, the judge relied on the test as laid out in Carson Yeung and Pang Hung Fai. He therefore reminded himself in the following terms:

“In deciding whether the defendant had reasonable grounds to believe the applicable standard is would those grounds lead to the belief and not could those grounds lead to the belief and in determining this the defendant’s belief, perception or prejudice are to be considered and given such weight as is warranted.”^{^[64]}

55. Relying on these principles, Ms Chiu noted that in so far as question (i) is concerned, the judge rejected the exculpatory explanations of the appellant, and correctly reminded himself that the burden remained on the prosecution. She submitted the judge then looked to the prosecution evidence to ascertain what facts and circumstances were known to the appellant.

56. Ms Chiu submitted that when the judge addressed the element of “reasonable grounds to believe”, he explained he had taken into account all the circumstances, which included the factors in paragraph 282(a)-(e). She submitted that these factors were directed to what facts and circumstances were known to the appellant at the material time which would have affected his belief.

57. As for paragraph 282(a) and (b), she submitted that it showed the appellant was a person of modest means as disclosed by his lack of taxable income and ownership of any real property. In these circumstances, he must have appreciated that the sum of $7.6 million was substantial and had nothing to do with him.[65]

58. As for paragraph 282(c), she submitted that it reflected the judge’s previous findings in paragraphs 278 to 280 and that the appellant must have been aware that the arrangement concealed D4 as the beneficiary of the account.[66].

59. As for paragraph 282(d), it showed that the account was used as a repository and conduit for the movement of funds.[67]

60. Ms Chiu submitted that, in the absence of any evidence to the contrary, a reasonable person, being aware of these facts and circumstances, would have believed that the sum of about $7.6 million, deposited in the account of ASR in Charge 5, was tainted. This she said effectively answered question (ii).

61. Ms Chiu addressed paragraph 282(e) separately. In this paragraph the judge considered it inherently improbable that buyers of goods would not, in the normal course of business, remit payment to a company with which they had no dealings. She submitted that this went to the issue as to what was known by the appellant that may have affected his belief as to the transactions taking place. She noted that D4 did not do business in the name of ASR and therefore it begged the question why would an overseas buyer of goods remit payment intended for D4 to ASR with which they had no dealings. She stated that the suggestion that there was a genuine business in existence through ASR having been rejected by the judge, meant this was not a fact or circumstance accepted by him as something known to the appellant at the material time and therefore did not necessarily go to the issue of the applicant’s “reasonable grounds to believe”. We have difficulty with this submission, as it was plain from the judge’s findings that the appellant would have known that ASR was not engaged in any business, or at least he would have been aware of the real circumstances of ASR given his intricate involvement in the financial transactions that took place through the ASR account.

62. In respect of Charge 9, Ms Chiu made the same points as she did for Charge 5. As for paragraph 284(a) and (b), it showed that the appellant was a person of modest means, who would have appreciated that the sum of $523,382.67 was a substantial amount of money which had nothing to do with him. As for paragraph 284(c), the deposit and withdrawal of the money through the appellant’s personal account concealed D4’s connection to the funds. She submitted that a reasonable person knowing these facts and circumstances would have believed that the funds were tainted. She treated paragraph 284(d) separately, but as we explained in addressing her submission in respect of Charge 5, we are of the view that it was a relevant consideration as it went to the appellant’s general appreciation of how business is conducted given he was a retired businessman.

63. Ms Chiu submitted that the mention of ASR in paragraph 284(a) may seem not to be relevant because the date alleged in Charge 9 was on or about 17 September 2012, whereas ASR was registered on 26 October 2012 and therefore was not then in existence. However, she did accept that paragraph 284(a) reflected that the appellant was of modest means, in that he did not declare any income or have any property in the period from 2011 to 2014, which included the date of the conspiracy in Charge 9.

Discussion

64. Mr Beel’s complaint about the appellant’s conviction on Charges 5 and 9 was that the judge did not properly address in his reasons for verdict the mental element of “reasonable grounds to believe”.

65. Before we turn to address this ground of appeal, it is appropriate to refer to the formulation by the Court of Final Appeal in Harjani of the test for the offence of money laundering in respect of the subjective element, which focuses on what facts and circumstances were known to the defendant that might have affected his belief as to whether the property was the proceeds of crime. The objective element focuses on whether a reasonable person armed with those facts and in those circumstances would be bound to believe that the property was the proceeds of crime.[68]

66. The judge in his reasons for verdict commenced his analysis of the evidence by noting that it was not in dispute that the transactions as alleged by the prosecution took place in relation to the two accounts in Charges 5 and 9 respectively. He went on to provide an overview of both the prosecution case and the defence case as well as an extensive review of the evidence. He then turned to address the evidence on the issue of “an agreement to deal with property”, which he did by examining the transactions that took place in the two accounts. At the conclusion of this process, he was satisfied on the evidence that the only inference to draw was that the appellant agreed with D4 to deal with the monies as alleged.[69]

67. The judge next considered the element of “knowing or having reasonable grounds to believe” by extensively addressing the evidence as presented by the prosecution and the defence on this issue. There was no dispute as to the transactions that took place in relation to each bank account. It was the appellant’s case that the transactions through the ASR account, which he set up and registered, were done to help out D4 and in accordance with his instructions. The transactions through his personal account were done by him to also help out D4, whom he considered a friend.

68. It is appropriate to bear in mind that the transactions that took place in relation to the ASR account concerned 8 inward remittances from 7 to 31 December 2012 in the sum of about $7.6 million and the withdrawal of those funds from 10 December 2012 to 7 January 2013, with 11 cheques in a total sum of about $5.3 million made payable to D1, whom the appellant introduced to D4. The appellant held the chequebook of ASR, and wrote and signed the cheques in question, on D4’s instructions.[70] The appellant claimed that he introduced D1 to D4 to assist him in purchasing products from mainland China. D1 was a taxi driver at the relevant time, who claimed that he received the funds because he believed the appellant was in a trading business with D4. However, D4 claimed he had never requested the appellant to register ASR and open a bank account, nor did he ask the appellant to receive and transact the monies on his behalf.

69. Having rejected the evidence of the appellant as well as D1 and D4, the judge went on to analyse the evidence as to whether he could be satisfied to the requisite standard that the appellant had reasonable grounds to believe that he was dealing in the proceeds of crime.

70. The judge found that the appellant, by registering ASR and opening a bank account for D4 to use, had concealed the true holder of the account and the recipient of the monies remitted to the account.[71] He also found that the appellant by allowing D4 to use his personal savings account had similarly concealed the true recipient of the monies deposited into the account.[72] He was guided by this Court’s observation in HKSAR v Wong Chor Wo and Another[73]that when a person allows another person to use his bank account to deposit and withdrew funds it puts the account holder on notice that it is prima facie money laundering.

71. After analysing the evidence, the judge addressed the ultimate question of whether the appellant had reasonable grounds to believe that the monies in question were the proceeds of crime. He explained that, “having regard to all the circumstances”, including the particular matters he mentioned, he was satisfied that the only inference to draw was that the appellant together with D4 had the requisite reasonable grounds to believe that the monies in Charges 5[74] and 9[75] were the proceeds of crime.

72. The conspiracy under Charge 9 was the first in time. It was alleged that on 17 September 2012, the appellant allowed D4 to use his personal account to launder $523,382.67. This was about six weeks before the appellant registered ASR as a business on 26 October 2012 and opened a bank account under the business name on 31 October 2012.

73. The conspiracy under Charge 5 was alleged to have occurred between a date unknown in December 2012 and 21 January 2013, which covered the period of the financial transactions of the monies that were deposited and withdrawn from the ASR bank account. One of the matters the judge mentioned was that the appellant registered ASR and opened the bank account for D4 to use thereby concealing the true holder of the account and the recipient of the monies remitted to the account.[76] Whilst the act of the appellant registering ASR and opening up a bank account under its name was outside the charge period, it was relevant evidence to prove the conspiratorial agreement to commit the offence of dealing in the proceeds of crime.[77] The same reasoning applies to subsequent events, such as the failure to file tax returns, that may also be relevant to prove the conspiratorial agreement.

74. The judge analysed at length the appellant’s evidence and why he rejected his exculpatory explanations. He also explained why he did not accept ASR was set up for a legitimate business purpose, and the appellant’s belief that he was only lending his account to D4 for him to receive payments for goods from overseas customers. The thrust of the defence case was that the appellant, an experienced businessman, allowed himself to be a party to a fraud on the Inland Revenue Department and the Nanyang Commercial Bank by D4, whom he did not know well and of whom he was commercially wary. However, the appellant did not query or question the underlying reasons for D4 needing his help and the manner in which he was to provide it. It is understandable why the judge did not accept the appellant’s exculpatory explanations.

75. On the issue of the subjective element of the test the judge did not misdirect himself, and clearly took into account the relevant facts and circumstances that might have affected the appellant’s belief as to whether the funds in question were the proceeds of crime. The judge explained that, when he drew the inference that the appellant had reasonable grounds to believe that the monies in Charges 5 and 9 were the proceeds of crime, he did so having “regard to all the circumstances”, which included the matters he emphasised. There were other matters he set out in his analysis of the evidence, such as the appellant’s dealings with and concerns about D4. Of particular relevance was the fact that he rejected the appellant’s evidence that he believed D4 was genuinely dealing with overseas customers.

76. When the judge drew the inference of guilt in respect of Charge 9 in paragraph 284, he explained he did so having regard to all the circumstances, which was a reference to his previous findings. He also mentioned that this included certain matters which he listed. One of which was “(a) D3 did not report to the Inland Revenue Department any income for himself or on behalf of Asia Supply Resources for the period 1 April 2011 to 31 March 2015”. Whilst the reference to ASR would appear to have no specific relevance to Charge 9, it was relevant that during this period he was a person of modest means. Whilst Charge 9 concerned only one payment, he would have appreciated given his financial circumstances that it was a substantial payment. We are satisfied that on the evidence the judge properly drew the inference of guilt against the appellant on this charge.

77. The judge having rejected the appellant’s exculpatory explanations of his conduct was faced with the fact that the receipt and dealing of remittances into the two bank accounts readily proved that the appellant was actively involved in the transactions. In our judgment, the judge was plainly concerned with the facts and circumstances that were known to the appellant which might have affected his belief as to whether the funds in Charges 5 and 9 were the proceeds of crime. He comprehensively addressed these matters when applying the objective element of the test.

Conclusion

78. For the reasons given, we dismissed the appellant’s appeal against conviction.

(Andrew Macrae)	(Ian McWalters)	(Kevin Zervos)
Vice President	Justice of Appeal	Justice of Appeal

Ms Samantha Chiu, SPP, of the Department of Justice, for the respondent

Mr Trevor Beel, instructed by Morley Chow Seto, Solicitors, for the appellant

[1] HSKAR v Man Yiu Pun, unrep., CACC 198/2018, 21 May 2020, at [38] per McWalters JA.

[2] Amended Perfected Grounds of Appeal, 5.

[3] Appeal Bundle (AB), 4.

[4] AB, 6.

[5] Reasons for Verdict, at [1]-[14], AB, 44-47.

[6] Admitted Facts, at [5], AB, 28.

[7] Admitted Facts, at [5], AB, 28.

[8] Admitted Facts, at [9], AB, 29.

[9] There were 11 cheques in respect of D1’s account totalling about HK$5.3 million; 1 cheque to “Chan Wai Kin” in the sum of HK$300,000; 2 cheques to “Sendegaya Julius” totalling HK$700,000; two cheques to the account of Casia Grace Garcia totalling HK$410,000 and another cheque to a different account of Casia Grace Chan in the sum of HK$240,000. See Prosecution Closing Submissions, at [49 (d)], AB, 485.

[10] Prosecution Closing Submissions, at [65], AB, 488.

[11] Admitted Facts, at [33], AB, 36.

[12] Admitted Facts, at [31], AB, 36.

[13] Admitted Facts, at [33], AB, 36.

[14] Admitted Facts, at [12], AB, 30.

[15] Admitted Facts, at [15], AB, 30.

[16] Admitted Facts, at [16], [17], [19], [20] and [21], AB, 30-31.

[17] Prosecution Closing Submissions, at [53], AB, 486.

[18] Prosecution Closing Submissions, at [54], AB, 486.

[19] Prosecution Closing Submissions, AB, 488-490.

[20] Defence Closing Submissions, at [23], AB, 520.

[21] Defence Closing Submissions, at [32], AB, 522.

[22] Reasons for Verdict, at [271], AB, 125; at [195], AB, 108; and at [197], AB,108.

[23] The appellant’s first written record of interview dated 3 May 2013 (exhibit P11); the second written record of interview dated 21 August 2013 (exhibit P13), and the two video recorded interviews dated 7 November 2013 and 29 August 2014, exhibits P13A and P14A, respectively.

[24] Reasons for Verdict, at [200], AB, 109.

[25] Reasons for Verdict, at [175(d) and (f)], AB, 95 and 96.

[26] Reasons for Verdict, at [175(g) and (h)], AB, 96.

[27] Reasons for Verdict, at [175(k)], AB, 97.

[28] Reasons for Verdict, at [175(m)], AB, 97.

[29] Reasons for Verdict, at [210], AB, 111.

[30] Reasons for Verdict, at [183], AB, 105.

[31] Reasons for Verdict, at [203], AB, 110.

[32] Reasons for Verdict, at [175(p)], AB, 97.

[33] Reasons for Verdict, at [175(r)], AB, 98.

[34] Reasons for Verdict, at [175(s)], AB, 98.

[35] Reasons for Verdict, at [175(t)], AB, 98.

[36] Reasons for Verdict, at [175(z)], AB, 99.

[37] Reasons for Verdict, at [223], AB, 114.

[38] Reasons for Verdict, at [218], AB, 113.

[39] Reasons for Verdict, at [215]-[218], AB, 113.

[40] Reasons for Verdict, at [175(ll)], AB, 101-102.

[41] Reasons for Verdict, at [175(mm)], AB, 102.

[42] Reasons for Verdict, at [246-250], AB, 119-120.

[43] Reasons for Verdict, at [175], AB, 95-102.

[44] Reasons for Verdict, at [190]-[225], AB, 106-115.

[45] Reasons for Verdict, at [226]-[250], at 115-120.

[46] Reasons for Verdict, at [255], AB, 121-122.

[47] Reasons for Verdict, at [256]-[265], AB, 122-124.

[48] Reasons for Verdict, at [266]-[267], AB, 124.

[49] Reasons for Verdict, at [268]-[269], AB, 124-125.

[50] Reasons for Verdict, at [226]-[250] and [273]-[277], AB, 115-120 and 126-127 .

[51] AB, 128-130.

[52] The Appellant’s Written Submission, at [28].

[53] The Appellant’s Written Submission, at [37] and [38].

[54] The Appellant’s Written Submission, at [29].

[55] The Appellant’s Written Submission, at [33].

[56] The Appellant’s Written Submission, at [35].

[57] The Appellant’s Written Submission, at [39].

[58] HKSAR v Harjani Haresh Murlidhar (2019) 22 HKCFAR 446.

[59] HKSAR v Pang Hung Fai (2014) 17 HKCFAR 778.

[60] HKSAR v Yeung Ka Sing Carson (2016) 19 HKCFAR 279.

[61] Reasons for Verdict, at [26], AB, 464.

[62] Reasons for Verdict, at [27], AB, 465.

[63] The decision of Harjani was handed down on 5 December 2019, whereas the Reasons for Verdict were handed down on 31 May 2018.

[64] Reasons for Verdict, at [20], AB, 50.

[65] Reasons for Verdict, at [282(a) and (b)], AB, 128.

[66] Reasons for Verdict, at [282(c)], AB, 128.

[67] Reasons for Verdict, at [282(d)], AB, 128.

[68] Harjani, at [27]-[30], [56] and [57].

[69] Reasons for Verdict, at [182] (Charge 5) and at [188] (Charge 9), AB, 104 and 106.

[70] Reasons for Verdict, at [175(bb)-(ee)], AB, 100.

[71] Reasons for Verdict, AB, at [278]-[279].

[72] Reasons for Verdict, AB, at [280].

[73] HKSAR v Wong Chor Wo and Another, unrep., CACC 314/2006, 16 June 2008.

[74] Reasons for Verdict, AB, 128-129.

[75] Reasons for Verdict, AB, 129-130.

[76] Reasons for Verdict, at [282], AB, 128.

[77] Prosecution Closing Submissions, AB, 504. See Harjani, at [104].

CACC 198/2018

[2020] HKCA 344

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 198 OF 2018

(ON APPEAL FROM DCCC 431 OF 2017)

________________________

BETWEEN

	HKSAR	Respondent
	and
	MAN YIU PUN (文耀彬)	Applicant

________________________

Before:

Hon McWalters JA in Court

Date of Hearing:	28 April 2020
Date of Judgment:	28 April 2020
Date of Reasons for Judgment:	21 May 2020

________________________

REASONS FOR JUDGMENT

________________________

A. Introduction

1. The applicant was tried in the District Court before District Judge Dufton (“the judge”) on two charges of conspiracy to deal with property known or believed to represent the proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap 455 and sections 159A and 159C of the Crimes Ordinance, Cap 200. He was convicted of both charges and was sentenced to a total term of 4 years and 5 months’ imprisonment. He now seeks leave to appeal against his convictions and his sentences.

2. At the hearing of the applications I granted the applicant leave to appeal his convictions but refused him leave to appeal his sentences. I said I would hand down my reasons for doing so at a later date. These are my reasons.

B. The Charge Sheet

3. There were in total nine charges on the Charge Sheet but only Charges 5 and 9 concerned the applicant. The applicant was tried with three other defendants and was D3 on the Charge Sheet. All charges involved the offence of money laundering, either in its substantive form or in an inchoate form as a conspiracy.

4. D1 was charged alone in respect of Charges 1 and 2 and jointly with D2 in respect of Charges 3 and 4. D2 was charged only with Charges 3 and 4 but Charge 4 was a substantive alternative to Charge 3 which was a conspiracy offence. D2 was convicted of Charge 3.

5. D4 was separately charged with 3 substantive charges of “money laundering”, Charges 6 to 8, which took place in a factual matrix that was not relevant to the case against the applicant.

6. The common link in all the charges was, in fact, D4. In Charges 1-3 the unnamed and unindicted, co-conspirator was particularized simply as “a Nigerian male alias Joe”. However, both D1 and D2 testified that this person was D4. In the applicant’s charges his unindicted, co-conspirator was named as being D4.

7. The duration of the conspiracy that is the subject of Charge 5 was particularized as being “between a date unknown in December 2012 and the 21^st day of January 2013”, whilst the duration of the conspiracy that is the subject of Charge 9 was particularized as being “on or about the 17^thday of September 2012.”

C. The trial

8. Most of the prosecution case was admitted. Only one witness was called in relation to the applicant’s charges. The prosecution case was quite simple and straightforward. In respect of Charge 5 it was that the applicant registered a business for D4 called Asia Supply Resources (“ASR”) and opened a business bank account for ASR which would enable D4 to receive monies into the account and then deal with these monies. For Charge 9 it was that the applicant used his own bank account on one occasion to assist D4 in laundering a sum of money through it.

9. The defence was that the applicant trusted D4, was assisting him to set up and operate what he believed was a legitimate business and had no knowledge of any wrongdoing. The applicant was a victim of D4, not his co-conspirator.

10. D1 died in the course of the trial but only after he had testified in his defence. D4 also testified in the defence case and parts of his evidence and D1’s evidence were relevant to the applicant.

C.1 The prosecution case

11. It is important to note that the conduct the subject of Charge 9 took place on 17 September 2012, some six weeks before the business registration of ASR which occurred on 26 October 2012. Furthermore, ASR’s bank account, which was the vehicle for the acts of money laundering that are the overt acts of the conspiracy that is the subject of Charge 5, was opened on 31 October 2012. But, the conspiracy in Charge 5, rather curiously, was particularized as not commencing until December 2012. This would suggest that, contrary to what the judge ultimately found, the prosecution was not presenting a case that the conspiracy was formed at the time ASR was registered and that its registration was one of the overt acts of the conspirators.

C.2 Charge 5

12. It was an admitted fact that the applicant registered ASR as a sole proprietorship and commenced business on 26 October 2012. Its business was declared as “Import & Export, Resources” with its registered address at “2/F, No. 550 Canton Road, Kowloon”. ASR ceased business on 2 December 2013. It was also an admitted fact that the applicant opened a business bank account for ASR with Nanyang Commercial Bank on 31 October 2012.

13. Between 1 December 2012 and 3 January 2013, a total sum of HK$7,653,697.40 was deposited into the ASR account. Save for the initial deposit of HK$50,000 cash, the monies deposited were by way of eight overseas remittances. Between 6 December 2012 and 20 January 2013, all the monies in this account, other than HK$22.38, were withdrawn by way of ATM and by multiple cheques being issued to various payees including 11 cheques payable to D1, which were deposited into his personal savings account. Being the account holder, the applicant was the drawer of these cheques and he retained custody of the cheque book even though he had provided all the means for D4 to operate the account. The ASR account was eventually closed on 21 January 2013.

C.3 Charge 9

14. In relation to Charge 9, the prosecution case was that the applicant conspired with D4 to deal with HK$523,382.67 that had been remitted to the applicant’s personal savings account with HSBC on 17 September 2012, knowing or having reasonable grounds to believe these monies represented the proceeds of an indictable offence. On 19 September 2012, $560,000 was withdrawn from the HSBC account.

15. It was an admitted fact the applicant opened the HSBC account on 28 September 1987, and was the sole signatory of it.

C.4 Arrest and cautioned interviews

16. The applicant was arrested for the present offences when he was intercepted at Lo Wu Control Point. The police conducted two cautioned interviews and two video-recorded interviews with him, the voluntariness of which were not challenged. In these interviews the applicant admitted allowing D4 to use his bank account to receive the monies the subject of Charge 9 and registering ASR and opening a bank account for it. He claimed he did all these things simply to help out a friend. Though now retired, he said he used to trade in jade ornaments.

D. The defence case

D.1 The applicant’s testimony

17. The applicant elected to testify and called one witness, his younger sister Ms Man. Ms Man testified that the 2/F premises that was the registered address of ASR was owned by her and had been used as an office for the jade business of her husband and the applicant.

18. The applicant testified that before his retirement he was a jade merchant, trading free-of-rent at the premises on the 2/F which was owned by his sister Ms Man. He said that a few years ago he became acquainted with D4 and they would often meet for meals and drinks.

19. He said D4 told him that he engaged in trading in Hong Kong and took him to a container depot at Kam Tin where he saw many black people were helping D4 pack goods into containers. On one occasion D4 said he would like to establish a company in Hong Kong in order to engage in business and in shipping goods but would have to do so by himself as his friend who had been helping him was no longer available. As D4 was a foreigner, and could not produce proof of residence for business registration, he asked the applicant to register the business and to open a bank account for him. The applicant eventually did this in order to help his friend. The applicant also explained that he used the 2/F premises as the business and correspondence address for ASR because he used to trade at those premises. He said that after he opened the account he gave D4 the bank card and password so that he could make withdrawals whilst he kept the cheque book in the office.

20. In relation to the ASR account, the applicant said the initial deposit of HK$50,000 was paid by D4. For the eight overseas remittances amounting to HK$7,653,697.40, he said he was told by D4 after each remittance that the monies were for the payment of goods but he never made any enquiries of any of the companies making the remittances nor did he ask D4 about the companies or ask to see the goods. He said he issued a total of 18 cheques on D4’s instructions and gave the cheques to him as he claimed the money was needed for the payment of goods. He said he did not make any of the ATM withdrawals himself as he had previously given the bank card to D4. He said he never had any suspicion about the legitimacy of the monies withdrawn from ASR account.

21. In relation to the HSBC account, the applicant added that D4 informed him that the single remittance of HK$523,382.67 was deposited by his customer and that the money had to be withdrawn for payment of goods. As a result, he went to the bank with D4 and withdrew HK$560,000.

D.2 D1’s testimony

22. In his evidence D1 said the applicant introduced D4 to him and he understood they were business partners. At one point D1 agreed to do business with the applicant and D4, and knowing that D4 could not set up a business bank account without address proof he agreed to lend his personal account to D4. The 11 cheques which the applicant had drawn on the ASR account were deposited into D1’s personal account from 10 December 2012 but D1 claimed that he did not know anything about ASR as they never told him about this company. He was informed of the first deposit by the applicant in a phone call. He denied knowing the actual sources of any of these cheques and maintained that he was told they were only for goods payments.

D.3 D4’s testimony

23. In his testimony D4 denied any involvement in Charges 5 and 9. He denied ever asking the applicant to open a bank account for him and claimed he never had any ongoing business venture with him or with D1.

E. The judge’s Reasons for Verdict on Charges 5 and 9

24. The judge attached full weight to the admissions the applicant made in his testimony as well as his records of interview in respect of setting up ASR, opening the ASR bank account for D4 to receive funds into it, and allowing D4 to use his HSBC account to receive funds which he withdrew and gave to D4. The judge rejected the applicant’s testimony that he had registered ASR and set up the ASR bank account to enable D4 to engage in genuine business trading, and that he had lent his HSBC account to him to receive payments from his customers, and that he had never had any suspicion about the legitimacy of all the remittances in question. The judge also rejected the evidence of both D1 and D4.

25. In reaching the conclusion that the applicant had “reasonable grounds to believe”, the judge made the following findings in his Reasons for Verdict:

“Reasonable grounds to believe
278.  By registering Asia Supply Resources and opening the bank account for Joe (Okafor Joek Kingsley) to use, D3 concealed the true holder of the account and the recipient of the monies remitted to the account.
279.  I am satisfied so I am sure by transferring monies to the accounts of D1; Grace Garcia Casia (PW4); Julius Sendegeya and Chan Wai Kin, the only inference to draw is that these transfers were to conceal and disguise the true recipient of the monies passing through the account.
280.  By allowing D4 to use his personal savings account D3 concealed the true recipient of the monies deposited in the account.
281.  As the Court of Appeal observed in HKSAR v Wong Chor Wo & another at para 108:
‘In the normal course of events, if a man allows another person to use his bank accounts to deposit and withdraw funds, in the absence of evidence to the contrary, the inevitable inference will arise that the holder of the bank account has reasonable grounds to believe that the funds passing through the account represent the proceeds of an indictable offence.’
Asia Supply Resources
282. Having regard to all the circumstances, including:
(a)  D3 did not report to the Inland Revenue Department any income for himself or on behalf of Asia Supply Resources for the period 1 April 2011 to 31 March 2015;
(b)  D3 did not have any real property;
(c)  D3 registered Asia Supply Resources and opened the bank account for Joe to use thereby concealing the true holder of the account and the recipient of the monies remitted to the account;
(d)  shortly after the remittances were credited to the account D3, on the instructions of Joe, issued cheques transferring the monies; and
(e)  the inherent improbability that buyers of goods would in the normal course of business remit payment for goods to a company who they had no dealings with,
I am satisfied so I am sure the only inference to draw is that D3 together with Joe had reasonable grounds to believe the monies deposited in the account, in whole or in part, directly or indirectly, represented the proceeds of an indictable offence and that anyone looking at those grounds objectively would so believe.
…
Personal savings account
284. Having regard to all the circumstances, including:
(a)  D3 did not report to the Inland Revenue Department any income for himself or on behalf of Asia Supply Resources for the period 1 April 2011 to 31 March 2015;
(b)  D3 did not have any real property;
(c)  D3 allowed Joe to use the account thereby concealing the true recipient of the deposit of $523,382.67, which shortly after D3 withdrew and gave to Joe; and
(d)  the inherent improbability that a buyer of goods would in the normal course of business remit payment for goods to a personal savings account of someone they did not know and who they had no dealings with,
I am satisfied so I am sure the only inference to draw is that D3 together with Joe had reasonable grounds to believe the deposit of $523,382.67 in whole or in part, directly or indirectly, represented the proceeds of an indictable offence and that anyone looking at those grounds objectively would so believe.”[1]

F. The judge’s Reasons for Sentence

26. In his Reasons for Sentence the judge said:

“Charge 5
23.  Taking into account:
(a)  the role of D3 in setting up Asia Supply Resources, opening the bank account and transferring the money;
(b)  the total amount credited to the account was $7,653,697.40; and
(c)  $7,403,697.38 was remitted from overseas thereby adding an international element to the charge,
I am satisfied the proper sentence after trial is 4 years and 6 months’ imprisonment.
Charge 9
24.  Taking into account:
(a)  the role of D3 in lending his personal savings account;
(b)  the amount involved was $523,382.67; and
(c)  that this was a single transaction,
I am satisfied the proper sentence after trial is 2 years and 6 months’ imprisonment. Taking into account totality of sentence to be served by D3, I am satisfied concurrent sentences are appropriate.”[2]

27. The judge noted that there had been a delay in bringing the case to trial through no fault of the prosecution or the defence and took the view that some credit should be given to the defendants for this factor. Accordingly, the sentences of each convicted defendant were reduced by 1 month. The final sentence of the applicant was, therefore, 4 years and 5 months’ imprisonment.

G. The grounds of appeal

28. The applicant was represented by Mr Trevor Beel in this appeal. He relied on 3 grounds of appeal against conviction, namely Grounds 1B, 1C and 2.

29. Grounds 1B and 1C make the same complaint. This complaint is that the judge “erred in law and or did not properly and safely determine when finding that the applicant had entered into a conspiracy, what if any, at the time of the applicant’s agreement with D4, were the grounds that were known and reasonable for the applicant to believe that any money was in whole or in part, directly or indirectly representing any persons proceeds of an indictable offence and thereby an agreement to do an unlawful act.”[3]

30. In respect of Charge 9 Mr Beel submitted that although, chronologically, this charge took place before Charge 5, nowhere in his Reasons for Verdict did the judge address what the grounds were that were known to the applicant at the time of the Charge 9 agreement, that would cause him to believe that the expected remittance was or would be the proceeds of an indictable offence.

31. Similarly, it was submitted in respect of Charge 5 that the judge again failed to set out the grounds that were known to the applicant when he entered into the agreement with D4 that caused him to have reasonable grounds to believe that any money entering the ASR account would be tainted.

32. It was also submitted in support of this ground of appeal that those matters set out by the judge at [282(a) and (b)] of his Reasons for Verdict are irrelevant or neutral in their effect in terms of establishing that the applicant had reasonable grounds to believe. Furthermore, the matter at [282(e)] has no evidential foundation without which it has no weight. After all, the reason why, in any fraud, a victim remits money to a fraudster’s bank account is because he has been lied to about that account or other matters enabling the fraud to take place. Here, there was no evidence as to what the remitters of the monies knew or believed about the ASR account and even if they knew of the existence of the applicant and his association with it.

33. Ground 2 complains that the judge erred in “failing to evaluate in a safe and proper manner or if at all the applicant’s evidence and in particular the applicant’s belief and perceptions in conjunction with all the surrounding evidential circumstances and thereby wrongly rejected the applicant’s evidence on the basis of credibility and inherent improbabilities”[4].

34. In respect of the application for leave to appeal against sentences, the applicant relied on only one ground of appeal which was composed of two complaints. The first complaint is that the judge erred in failing to award the applicant a sentencing discount in recognition of the applicant, in effect, admitting the prosecution case and conducting his defence in a manner that saved considerable court time as only one prosecution witness was called.

35. The second complaint is that it is clear that D4 was the ringleader yet he had been dealt with more leniently than the applicant and so the applicant feels a sense of injustice at the disparity of treatment. In respect of this second complaint Mr Beel submitted that whilst the applicant’s total sentence on its own is not wrong or manifestly excessive, when compared to the sentences received by D4, it is. D4 was sentenced to a total term of only 2 years and 11 months’ imprisonment for his three separate counts of money laundering. Yet, D4 was the named co-conspirator of the applicant in relation to Charges 5 and 9 and was clearly the instigator of the offences. In these circumstances the applicant was aggrieved at the inequity in their respective sentences.

H. Discussion: Conviction

36. The judge analyzed at length why he did not accept the applicant’s evidence. In particular, he set out in detail why he did not believe ASR was set up for a legitimate business purpose, and the applicant’s belief that he was only lending the HSBC account to D4 for him to receive payments for goods from overseas customers. I did not agree with Mr Beel that there was no basis for the judge to find the applicant’s evidence incredible and/ or inherently improbable. The judge saw and heard the applicant give evidence. The thrust of the defence, by an experienced Hong Kong businessman, was that he allowed himself to be a party to a fraud on the Inland Revenue Department and the Nanyang Commercial Bank by a black African person with whom he occasionally socialized and about whom he harboured a certain amount of commercial distrust. Yet, not knowing D4 well, and being commercially wary of him, the applicant did not query the underlying reasons for D4 needing his help and responded in a totally trusting and unquestioning way to all of D4’s requests. I am not at all surprised that the judge found the applicant’s evidence unbelievable. As I was not persuaded that it was reasonably arguable that the judge’s assessment of the applicant’s credibility was plainly wrong, I refused leave to appeal on this ground of appeal.

37. However, I was of the view that Mr Beel was on stronger ground in respect of his submission that it is reasonably arguable that some of the matters listed in [282] and [284] of the judge’s Reasons for Verdict are not primary facts capable of supporting an inference that the applicant had reasonable grounds to believe. Notwithstanding that Charge 9 occurred some six weeks before ASR was even set up, the judge repeated at [284(a)], in a “cut and paste” approach, the matter that he sets out at [282(a)] which, in its reference to ASR, can have no relevance to Charge 9. Furthermore, the matter at [282(e)] and [284(d)] on which the judge relied was conceded by counsel for the respondent as being irrelevant.

38. I was, therefore, persuaded to grant the applicant leave to appeal his convictions on the ground that in determining that the applicant had reasonable grounds to believe the judge may have erred in the matters to which he had regard and in the weight which he gave to those matters.

I. Discussion: Sentence

39. No complaint was made against the starting points adopted by the judge in respect of the sentences.

40. The complaint that the judge did not give credit for the way the defence was conducted was not advanced before the judge at the time of the mitigation address. It should have been as the trial judge is in the best position to assess the merit of such a submission. In any event the Court of Appeal in HKSAR v Chan Wai-hang[5] took the view that this factor, on its own, might not warrant a discount:

“39. However, the mere fact that a material amount of the prosecution evidence has been agreed will not of itself, without more, warrant a discount when, in the opinion of the Trial Judge – as in the present case – that evidence, or the great majority of it, was not in any event amenable to any sensible challenge.
40. Whatever may have been the case in the past, efficient case management is today an obligation placed on both counsel for the prosecution and the defence. The fact therefore that defence counsel, while at all times safeguarding the interests of his client, is able to enter into a sensible arrangement with prosecuting counsel as to the disposition of non-contentious evidence is not to be seen, without more, as a basis for being granted a discount in sentence.”

41. Given the fact that the prosecution case was confined to the receipt and dealing of remittances into bank accounts which were readily proven to be controlled by the applicant, the only issue was whether the applicant was able to provide credible exculpatory explanations of his conduct. This being so, it is difficult to see that the prosecution case was amenable to any sensible challenge by the applicant. I am not persuaded that it is reasonably arguable that any additional discount was warranted on the facts of this case.

42. Regarding the disparity between the sentences of the applicant and D4, I can well understand why the applicant might feel aggrieved as clearly on the facts of this case D4 was an instigator of all the criminality but his culpability was limited by the charges he was facing. The question for me is not whether the applicant is aggrieved but whether he is justifiably aggrieved.

43. Because D4 was not charged with the applicant’s criminality this is not an issue of disparity of sentences. The difference in charges explains why there was a difference in their culpability. It is this difference which caused them to receive different sentences.

44. However, it is the decision of the prosecution, on the evidence available to it, to decide who should be charged and if so with what charges. No challenge is made to the propriety of the prosecutorial decisions in respect of not charging D4 with the areas of criminality of which the applicant was convicted.

45. The applicant was sentenced on the basis of him being a co-conspirator with D4; that is, he knew the terms of the unlawful agreement, namely, to engage in money laundering, and intended to carry out that agreement. His sentences are in line with the authorities and I was not satisfied that it is reasonably arguable that any grievance he harbours is a justifiable one for which he is entitled to a sentencing discount.

J. Disposition

46. For these reasons I granted the applicant leave to appeal his conviction but refused him leave to appeal his sentences.

	(Ian McWalters)
	Justice of Appeal

Ms Samantha Chiu SPP, of the Department of Justice, for the respondent

Mr Trevor Beel, instructed by Morley Chow Seto, assigned by DLA, for the applicant

[1] Appeal Bundle, pages 127E-130H.

[2] Appeal Bundle, page 179H-180F.

[3] Paragraph 19 of the Perfected Grounds of Appeal Against Conviction

[4] Paragraph 21 of the Perfected Grounds of Appeal Against Conviction.

[5] [2012] 3 HKLRD 726, 734.

HKSAR v. MAN YIU PUN

Related cases with same parties

Files (2)