Case Detail

HCCC 309/2019

[2023] HKCFI 3156

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

________________________

BETWEEN
	HKSAR
	and
	CHEN Keen	1^st Accused
	(alias Jack CHEN) (陳克恩)
	HAO May	2^nd Accused
	(formerly known as WANG May Yan)
	(alias May WANG)
	YEE Wenjye	3^rd Accused
	(also known as YU Wenjie)
	(alias Eric YEE)

________________________

Before:

Hon Anna Lai J in Court

Date of Hearing:	30 November and 1 December 2023
Date of Ruling:	5 December 2023

________________________

R U L I N G

________________________

1. By way of Notice of Motion, the 1^st accused and the 2^nd accused (collectively referred as the “Defence”) take out an application for certification under section 82(2)(b) of the Criminal Procedure Ordinance, Cap. 221 (“CPO”). The 3^rd accused also joins in the application insofar as Counts 2 and 4 are relevant.

2. Section 82 of the CPO provides:-

“Right of appeal
(1) A person convicted of an offence on indictment may appeal to the Court of Appeal against his conviction.
(2) The appeal may be—
(a) on any ground which involves a question of law alone; and
(b) with the leave of the Court of Appeal, on any ground which involves a question of fact alone, or a question of mixed law and fact, or on any other ground which appears to the Court of Appeal to be a sufficient ground of appeal;
but if the judge of the court of trial grants a certificate that the case is fit for appeal on a ground which involves a question of fact, or a question of mixed law and fact, an appeal lies under this section without the leave of the Court of Appeal.”

3. Without determining whether a convicted person has the right to apply for a certification in additional to his/her right to appeal to the Court of Appeal under the said provision, I have considered the matters stated in the Notice of Motion. I am of the view that this case is not fit for certification under section 82(2)(b) of the CPO.

Counts 1 and 3

4. In relation to Counts 1 and 3, the Defence has formulated three questions:

(1)  In the context of charges of conspiracy to defraud the Stock Exchange and shareholders of a listed company, where false representations are said to have been made as to connections between the directors of the listed company and the vendor in a very substantial acquisition governed by the Listing Rules, for the purpose of the direction on falsity, is the Judge required to determine and direct the Jury, as a matter of law, on the meaning of a “connected transaction” and “connected persons” under the Listing Rules? (“Proposed Question 1”)
(2)  Whether it is sufficient to convict the Defendants on the current indictment on the basis of a finding that D1 and D2 had been “working together” in the specified context without examining whether D2 was a “connected person” so as to render the acquisition of a “connected transaction” for the purposes of the Listing Rules? (“Proposed Question 2”)
(3)  When assessing falsity in the context of a charge of conspiracy to defraud alleging specific (false) representations as essential element of the offence (which representations were made by a director under and pursuant to specific Listing Rules requirements in a very substantial acquisitions) must the impugned representations be interpreted as having specific/special meanings in the context of “connected transactions” under the Listing Rules, or can they simply be given an unspecified “ordinary plain meaning?” (“Proposed Question 3”)

5. Proposed Question 1 is identical to Legal Question 1 in HKSAR v Chen Keen (2019) 22 HKCFAR 248 (“Chen Keen (No.1)”) which the Appeal Committee granted leave to appeal as a question law in respect of the first trial in 2016. Given it is a question of law, this Court has no jurisdiction to certify it under section 82(2)(b).

6. Proposed Question 2 is almost identical to the previous SGI Point 1 in Chen Keen (No.1) which the Appeal Committee granted leave under the substantive and grave injustice limb in the context of the evidence and directions given in the first trial.

7. Suffice to say the directions given in this trial on “working together/listing rule/connected transaction” are different from that in the first trial. For example, the evidence of Ms Katherine Chan (PW1) and Ms Cindy Ngai (PW8) which the Defence heavily relied upon has been repeatedly drawn to the attention to the jury. And, among other things, the jury were directed to assess the state of mind of the 1^st accused and the 2^nd accused such that if they concluded that in making those representations and/or declarations, and in answering the questions posed by the Hong Kong Stock Exchange, the 1^st accused and/or the 2^nd accused believed, or might have believed, that they were made in the context of the connected transaction rules in Chapter 14A of the Listing Rules, then the Prosecution’s allegation in particulars (a) and (b) of Counts 1 and 3 must fail. The jury were also directed that the Prosecution’s allegation in particular (c) of Counts 1 and 3 must fail if they concluded that the Commission Sharing Agreement (Exhibit P515) was not or might not be an agreement that created an interest with respect to the acquisition. By their guilty verdicts, it is obvious that the jury were sure the representations were not made in the connected transaction context, and/or they were sure that the Commission Sharing Agreement created an interest with respect to the acquisition. As such, I am of the view that the Proposed Question 2 is not reasonably arguable in light of the evidence and the directions given in this trial.

8. Proposed Question 3 is in effect an extension of the legal question in Proposed Question 1. Again, this Court has no jurisdiction to certify a question of law under section 82(2)(b).

Counts 2 and 4

9. The Defence has not formulated any question with regard to these two counts. In essence, it is alleged that the verdicts on Counts 2 and 4 are perverse in light of the removal of the concealment allegation from the indictment (former particular (b)). Suffice to say, the concealment allegation has always been run by the Prosecution as an alternative dishonest means to the false representation allegation (particular (a)). The jury are entitled to treat them separately and independently, and to return a guilty verdict on the remaining allegation. This ground is not reasonably arguable.

The Abuse Ground

10. Again no question was formulated under this ground. The Defence submits that the inability of the prosecution witnesses to recall factual events due to long lapse of time has caused grave unfairness to the accused. In this regard, a special direction has been given to remind the jury to take the factor of delay and its impact into account in assessing witnesses credibility’ and reliability. The jury were told that they had to acquit if they decided that as a result of the long lapse of time, the ability of the witnesses to remember key information had been impaired so that the quality of the evidence was incapable of making them sure of the Prosecution’s allegation. This ground is not reasonably arguable.

11. For the aforesaid reasons, I take the view that this is not an appropriate case for certification under section 82(2)(b) of the CPO.

(Anna Lai)
Judge of the Court of First Instance
High Court

Mr Neil S Mitchell, Counsel-on-fiat, leading Miss Ng Oi Lam, Joycelyn, SPP of the Department of Justice, and Mr Li Chun Ngai, Martin, Counsel-on-fiat, for the Prosecution

Mr Tim Owen, K C, leading Mr Benson Y M Tsoi, instructed by Boase, Cohen & Collins, for the 1^st Accused

Mr Ian Winter, K C, leading Ms Betty Chiu, instructed by Haldanes, for the 2^nd Accused

Mr David A.S. Khosa, instructed by Hobson & Ma, for the 3^rd Accused

HCCC 309/2019

[2023] HKCFI 2484

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

________________________

BETWEEN
	HKSAR	Respondent
and
	CHEN Keen	1st Applicant (D1)
	(alias Jack CHEN) (陳克恩)
	HAO May	2nd Applicant (D2)
	(formerly known as WANG May Yan)
	(alias May WANG)

________________________

Before:

Hon Anna Lai J in Court

Date of Applicants’ Submissions:	3 July 2023
Date of Respondent’s Submissions:	5 July 2023
Date of Ruling:	4 October 2023

____________________

R U L I N G

____________________

The Application

1. On 3 July 2023, the first day of the present trial, Notices of Motion were respectively filed by the 1^st accused and the 2^nd accused (collectively referred to as “the Applicants”) applying to this Court for an order to certify under section 32(2) of the Hong Kong Court of Final Appeal Ordinance, Cap. 484 (“HKCFAO”) that three points of law of great and general importance are involved in the rulings of this Court on 26 and 29 June 2023.

2. The three questions of law jointly raised by the Applicants are set out as follows:

(1)  In the context of charges of conspiracy to defraud the Stock Exchange and shareholders of a listed company, where false representations are said to have been made as to connections between the directors of the listed company and the vendor in a very substantial acquisition governed by the Listing Rules, for the purpose of the direction on falsity, is the Judge required to determine and direct the Jury, as a matter of law, on the meaning of a “connected transaction” and “connected persons” under the Listing Rules?
(2)  Whether it is sufficient to convict the Defendants on the current indictment on the basis of a finding that D1 and D2 had been “working together” in the specified context without examining whether D2 was a “connected person” so as to render the acquisition of a “connected transaction” for the purposes of the Listing Rules?
(3)  When assessing falsity in the context of a charge of conspiracy to defraud alleging specific (false) representations as essential element of the offence (which representations were made by a director under and pursuant to specific Listing Rules requirements in a very substantial acquisitions) must the impugned representations be interpreted as having specific/special meanings in the context of “connected transactions” under the Listing Rules, or can they simply be given an unspecified “ordinary plain meaning?”

3. On 6 July 2023, counsel for all parties asked this Court to deal with the applications on paper without a hearing.

Background

4. The questions of law have arisen from my ruling on 13 June 2023 (Reasons for Ruling handed down on 26 June 2023) that the particulars in the current indictment are not limited to the context of the Listing Rules, and the prosecution is not required to prove that the acquisition in question was a “connected transaction” under the Listing Rules (“the First Ruling”).

5. On 28 June 2023, the Applicants made a joint application for this Court to reserve for the consideration by the Court of Appeal three questions of law pursuant to section 81 of the Criminal Procedure Ordinance, Cap. 221. The questions of law were identical to the ones set out in the present applications. I refused the applications on 29 June 2023 with Reasons for Ruling handed down on 10 July 2023 (“the Second Ruling”).

6. On 30 June 2023, the Applicants lodged intended applications to the Court of Final Appeal (“CFA”) for leave to appeal against the First Ruling by way of Form B. In refusing to accept the Form Bs for filing, the Registrar of the CFA (“the Registrar”) expressed “serious doubts” as to whether the First Ruling is a final decision within the meaning of s.31(b) of the HKCFAO because it “does not finally dispose of the matter as it is yet to see what evidence will be adduced at trial and what directions will be given to the jury”. It would appear that the present applications are made pursuant to the comment by the Registrar that “If legal questions are raised, certification is requested from the lower court concerned: s.32(2) of the Ordinance”.[1]

7. On 3 July 2023, the Applicants lodged two intended summonses to the CFA seeking to re-open the final appeals in FACC 26 & 27/2018. The intended summonses were not accepted for filing.[2]

The Applicants’ Submission

8. As to the appropriate test for certification under section 32(2) of the HKCFAO, the Applicants submit that it does not involve the exercise of judicial discretion of the certifying court. Once the three conditions as confirmed by the Court of Appeal in HKSAR v Kwan Tat Yee[3] are satisfied, namely, a point of law (1) is involved in its decision; (2) is reasonably arguable; and (3) of great and general importance, the certifying court should certify the point(s) of law raised. Whether the lower court’s decision is a “final decision” under section 31(b) of the HKCFAO is to be determined by the CFA.

9. The Applicants contend that a refusal to certify the proposed legal questions would be perverse as they satisfy all the Kwan Tat Yee conditions:

(1)  The proposed legal questions are plainly reasonably arguably having already been held so by the CFA in HKSAR v Chen Keen[4] whether in the form of points of law of great and general importance or as points of substantial and grave injustice.
(2)  The questions are self-evidently of great and general importance in circumstances where the proposed question 1 (and thus the proposed question 3 which is similarly worded) has already been held by the CFA to have such importance.
(3)  The questions have a direct bearing on the true meaning of the indicated particulars of Charges 1 and 3 - which remain (as held by CFA[5]) as constituent elements of the charged conspiracy to defraud.

10. The Applicants submit that without a definitive ruling by the CFA as to the true meaning of the indicted particulars, the accused will be substantially deprived of their defences to the indicted conspiracy.

The Respondent’s Submission

11. The Respondent describes the present applications as the “last ditched attempt” of the Applicants to pursue the issue, noting various unsuccessful applications made by them previously in relation to the same set of questions. On 29 June 2023 this Court refused to reserve the questions for consideration of the Court of Appeal under section 81 of the Criminal Procedure Ordinance. On 30 June 2023 the Registrar declined to accept the filing of their applications for leave to appeal against the First Ruling, and expressed serious doubts that the said ruling is a final decision within the meaning of section 31(b) of the HKCFAO despite the fact that legal questions seem to have been framed. On 3 July 2023 the Registrar also refused to accept the filing of their applications to re-open the appeals under FACC 26 & 27/2018, on the ground that the CFA is functus and there is no exceptional ground which warrants the re-opening of the appeals.

12. Citing HKSAR v Chen Keen (No 2)[6], the Respondent submits that for certification which is intended to facilitate an application for leave to CFA, the ruling has to be a final decision capable of being appealed in the first place before the Court of First Instance can properly certify. This must follow from the wording of the section because otherwise a trial court could be faced with countless applications on interlocutory rulings.

13. In the present case, if the Applicants are convicted after trial, they could argue the merits of the Rulings before the Court of Appeal. On that basis the Rulings would not be a final determination for the purposes of section 31(b) of HKCFAO. As such this Court is not required to consider whether the proposed questions meet the Kwan Tat Yee requirements.

Discussion

14. Section 31 and 32 of the HKCFAO provides that:

“31. Criminal Appeals
An appeal shall, at the discretion of the Court, lie to the Court in any criminal cause or matter, at the instance of any party to the proceedings, from—
(a) any final decision of the Court of Appeal;
(b) any final decision of the Court of First Instance (not being a verdict or finding of a jury) from which no appeal lies to the Court of Appeal. (Amended 120 of 1997 s. 11)
32. Leave to appeal
(1) No appeal shall be admitted unless leave to appeal has been granted by the Court.
(2) Leave to appeal shall not be granted unless it is certified by the Court of Appeal or the Court of First Instance, as the case may be, that a point of law of great and general importance is involved in the decision or it is shown that substantial and grave injustice has been done. (Amended 120 of 1997 s. 12)
(3) Where the Court of Appeal or the Court of First Instance declines to certify as mentioned in subsection (2), the Court may so certify and grant leave to appeal. (Amended 120 of 1997 s. 12)
(4) The Court may when granting leave under subsection (1) impose a timetable on any party for the prosecution of the appeal and may either on the application of a party or of its own motion vary that timetable.”

15. Section 31 sets out the CFA’s jurisdiction to hear criminal appeals and section 32 sets out the procedural requirement. The two sections should be read in conjunction with each other. As such the decision involved has to be a final decision from which no appeal lies to the Court of Appeal.

16. As Ribeiro PJ said in the case of Pasa Danaville Dizon v HKSAR:[7]

“… Under section 31 of the Court’s statute, the Court has a discretion to grant leave to appeal only from any final decision of the Court of First Instance from which no appeal lies to the Court of Appeal. A final decision in that context must mean the lower court’s substantive decision disposing one way or another of the offence charged. …”

17. And echoed by Lam PJ noted in HKSAR v Chen Keen (No 2)[8]:

“As the applications were made in respect of the decision of a judge of the Court of First Instance in a criminal cause or matter, this Court’s jurisdiction is circumscribed by Section 31(b) of the Hong Kong Court of Final Appeal Ordinance (Cap. 484) (“HKCFAO”). Under that sub-section, this Court may only entertain an appeal in a criminal cause or matter from a final decision of the Court of First Instance (not being a verdict or finding of a jury) from which no appeal lies to the Court of Appeal.”

18. The Rulings given in this case cannot be said to be final decisions from which no appeal lies to the Court of Appeal. The merits of the rulings can be subject to potential review by the Court of Appeal if the Applicants were eventually convicted. Given that the rulings cannot be regarded as “final decisions” it would not be appropriate for me to grant the section 32(2) certificate.

Conclusion

19. For the above reasons, the applications are refused.

Postscript

20. These reasons are provided for the parties’ information only. The only part of this judgment which may be reported publicly are the above Conclusion. The remaining part of this judgment may not be reported until further order or until the conclusion of the trial.

	(Anna Lai)
	Judge of the Court of First Instance
	High Court

Mr Neil S Mitchell, Counsel-on-fiat, leading Miss Ng Oi Lam, Joycelyn, SPP of the Department of Justice, and Mr Li Chun Ngai, Martin, Counsel-on-fiat, for the Prosecution

Mr Tim Owen, K C, leading Mr Benson Y M Tsoi, instructed by Boase, Cohen & Collins, for the 1^st Accused

Mr Ian Winter, K C, leading Ms Betty Chiu, instructed by Haldanes, for the 2^nd Accused

[Subject to Reporting Restrictions as per Paragraph 21 of this judgment]

[1] Letter dated 30 June 2023 from the Senior Judicial Clerk I of the CFA to the Applicants, at [2] and [3]

[2] Letter dated 3 July 2023 from the Senior Judicial Clerk I of the CFA to the Applicants

[3]HKSAR v Kwan Tat Yee [2023] 1 HKLRD 289

[4]HKSAR v Chen Keen[2019] HKCFA 32

[5]Supra, at [54]

[6] (2022) 25 HKCFAR 34, at [17]-[18] and [21]

[7] (2009) 12 HKCFAR 960, at [11]

[8] (2022) 25 HKCFAR 34, at [7]

HCCC 309/2019

[2023] HKCFI 2401

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

________________________

BETWEEN
	HKSAR
	and
	CHEN Keen	1^st Accused
	(alias Jack CHEN) (陳克恩)
	HAO May	2^nd Accused
	(formerly known as WANG May Yan)
	(alias May WANG)
	YEE Wenjye	3^rd Accused
	(also known as YU Wenjie)
	(alias Eric YEE)

________________________

Before:

Hon Anna Lai J in Court

Date of Hearing:	5 September 2023
Date of Ruling:	20 September 2023

________________________

R U L I N G

________________________

The Application

1. This is a joint application by the Defence to exclude the intended evidence of Mr William Wong, the Vice President of the Listing Division of the Hong Kong Stock Exchange. It is submitted that any expertise Mr William Wong may possess would relate only to the interpretation of the Listing Rules which is a question of law. As such, his opinion would be inadmissible.

2. According to the Defence, in the trial before Deputy High Court Judge Bruce SC (“DHCJ Bruce”), Mr Wong was allowed to give evidence that the Commission Sharing Agreement (“CSA”) should have been disclosed with reference to the duty of disclosure. That is opinion evidence on an issue of law for the judge, because any expertise Mr Wong may possess would only relate to the interpretation of the Listing Rules which is a question of law. As such, his opinion would be inadmissible.

3. He is not a witness of fact, according to the Defence submission, in relation to any relevant issue because he was not involved in this transaction. Even if Mr Wong were a witness of fact, it is trite law that a witness of fact cannot give any opinion evidence. The only purpose of calling him would be to repeat Ms Cindy Ngai (PW8)’s evidence which is already before the jury. The question is whether he should be entitled to tell the jury that the CSA is disclosable.

4. The Defence also refer to the case of Wan Thomas[1] for the principle that the relevant question is the defendant’s belief when he made the declaration as required by the Listing Rules, and so the opinion of Mr Wong from the Stock Exchange is irrelevant.

5. The Defence also contend that Mr Wong is not a witness of fact to any relevant issue in this trial. The evidence of fact in this case has already been given by Ms Cindy Ngai (PW8). Mr Wong has no personal knowledge as to these matters. It is unnecessary for him to give evidence about the facts of this case because that has already been given by Ms Ngai.

6. The Defence contend that the issue in this case is a matter of law, so in light of the evidence given by Ms Cindy Ngai and Ms Katherine Chan (PW1), the representations made by the 1^st accused and the 2^nd accused, Mr Wong’s evidence should not be admitted.

7. However, at the hearing Mr Owen KC accepts that the evidence of Ms Katherine Chan in this trial is essentially the same as her evidence in the 2021 retrial before DHCJ Bruce. He says that Ms Ngai has already given evidence about her function and her role in the preparation, the drafting and approval of the circular, and she has been taken through the relevant Listing Rules. Therefore, it is completely unnecessary for Mr Wong to give evidence. Mr Owen also contends that all of the intended evidence of Mr Wong has already been given by Ms Ngai save that the Prosecution proposes to call Mr Wong to give opinion evidence about Chapter 14A, the deeming provision and the requirement to disclose certain matters. The Prosecution wants him to give opinion evidence as to whether the CSA was a disclosable document.

8. Mr Owen admits that the Defence had raised the same objection before DHCJ Bruce at the previous retrial but that was unsuccessful.

9. In reply, the Prosecution submits that Mr Wong is not being tendered as an expert witness, and he will give evidence on, inter alia, some aspects of the Stock Exchange of Hong Kong and the Listing Rules, including:

(1)  The principal function and the duty of the Stock Exchange;
(2)  The requirements for announcements and circulars and the vetting process;
(3)  The duty of disclosure and the requirement to present information of the directors;
(4)  The definitions in Chapter 1, in particular “connected persons”, and the deeming provision in Chapter 14A, and the power and the requirement to “know all the facts” including those in the past; and
(5)  The contents of the Announcement (Exhibit P6), and the Circular (Exhibit P341), in particular, the declarations and the meaning of the words appearing in the declarations, and the financial information appearing in the Appendices.

10. Mr Mitchell submits that Mr Wong is able to give evidence on a factual basis with reference to the Listing Rules. He also submits that Mr Wong, as a senior person in the Stock Exchange, can give evidence as to whether the CSA should have been disclosed to the Stock Exchange pursuant to the duties of disclosure of a director and what the effect was after the disclosure. He is able to give evidence based upon his own knowledge, his own practice and his long history of experience in the Listing Rules so, as such, his evidence would be relevant to the exercise of the Stock Exchange public duty in ensuring a fair and ordinary market.

Consideration

11. To begin with, I have examined the position of Mr Wong as a witness in the first trial before Madam Justice Pang (as she then was) in the 2016 trial. The position of the Prosecution at that time was that Mr Wong was to be tendered as an expert witness. As one can see from the transcript at Day 58, at page 15, in which Ms Draycott said: “as long ago as the pre-trial review, I suggested that this witness would be an expert witness.”

12. And she repeated that at page 17 of the transcript on the same day, saying that: “I indicated the problem in the pre-trial review months ago, that this man was going to be an expert.”

13. In that trial, the Defence objected to Mr Wong giving any opinion evidence on the application and interpretation of the Listing Rules on the ground that those were matters of law. Madam Justice Pang ruled that both the Prosecution and the Defence were “entitled to explore with Mr Wong as to how the work of the Stock Exchange in respect of the acquisition would or might have been or not have been affected if certain matters were brought to the attention of the Stock Exchange at that time and how the Stock Exchange would or may have or not have taken on board the matters raised as well as which were the particular rules the Stock Exchange was or would be relying on and invoking in such circumstances.”[2]

14. In her Ruling on this matter, Madam Justice Pang clarified her earlier comment that she “failed to see why any party should revisit precisely the same issue and seek to ask Mr Wong whether the alleged “contingent agreement” is subject to disclosure or not under the Listing Rules” was made in the context of an earlier submission about the contingent nature of the CSA, and “it cannot be taken to be of general application”. [3]

15. She also pointed out at paragraph 17 of her judgment that [4]:

“Mr Wong certainly does not hold himself out as the person capable of giving any “definitive interpretation” of the Listing Rules. In other words, even if he were to be asked questions relating to his understanding of the Listing Rules, he would not be giving any “definitive interpretation” of those Rules.”
“Therefore, while the Listing Rules form a part of the necessary background, any breach of the rules is not the be-all and end-all of the prosecution case. Put simply, for the conspiracy counts to be proved, a mere breach of or non-compliance with the Listing Rules is not sufficient. Instead, apart from proving the making of the false representation or the deliberate concealment, the prosecution will also need to prove the accused's necessary mens rea and the existence of the conspiracy.”

and she gave reasons as to why she did not see any “definitive interpretation” of the Listing Rules being a live issue in respect of Mr Wong’s evidence at paragraphs 15-26.

16. She then turned to “Understanding of the Listing Rules”. She turned to the question of “whether a representative from the Stock Exchange is entitled to give evidence on his understanding and application of the Listing Rules in the course of his work”. In conclusion, she ruled that Mr Wong “[can] be asked … as to what was expected to be done by 462’s directors under the Listing Rules in respect of the acquisition; what was done by the Stock Exchange; and how the work of the Stock Exchange would or might have been or not have been affected if certain matters were brought to the attention of the Stock Exchange at the time.” [5]

17. I also note that in the transcript at Day 58, at page 40, she repeated: “He is a witness who is going to testify on both the factual issues and about the operation of the Listing Rules.” As a result, Mr Wong was called as both a factual witness and an expert witness to give expert opinion on the general operation of the Stock Exchange.

18. The judge said at Day 55, at pages 47 and 48, of the transcript that Mr Wong “being an expert to give opinion on the general operation of the Stock Exchange. That is, when the Stock Exchange receives a request from a listed company about a VSA, how does the Stock Exchange proceed to deal with that request, what are the requirements, so on and so forth, the issue of no comment sheet and then the issue of the announcement, circular, so on and so forth.”

19. It is to be noted that in the Court of Appeal’s Judgment of CACC 172 of 2016, the Court were in general agreement with the reasoning given by Madam Justice Pang in respect of this matter.

20. I will now come to my observation on her summing up in respect of Mr William Wong's evidence. At pages 47-48 of the summing up Madam Justice Pang informed the jury that:

“For William Wong, actually, he was called both as a factual witness to tell you what happened in relation to the publication of the 462 circular, on the matters surrounding the publication, and as an expert on behalf of the Prosecution to testify on the operation of the Stock Exchange.
…
William Wong from the Stock Exchange has explained to you the operation of the Stock Exchange in the pre-vetting of announcements and circulars issued by listed companies as well as the Listing Rules.”

21. At page 192 of her summing up, she told the jury that:

“Now although in these proceedings you have heard quite a lot about the duty of disclosure, this is not what this case is all about. This is not so. This is just part of it, or part of the necessary background.”

22. And she continued about this matter at pages 194-5:

“So against such a background, and although much has been said about whether there was a need to disclose this agreement to 462 and the Stock Exchange, you have to bear in mind that this case is not about a breach of the disclosure requirement. For the conspiracy counts the breach of the Listing Rules is not the key. Even if you were to find that Jack Chen had breached the Rule by not disclosing the agreement, that breach alone is not sufficient to find any of the conspiracy counts. You can only find Jack Chen guilty if all the elements of the conspiracy offence which I have explained to you are proved beyond reasonable doubt, when you are sure.
Therefore, you may think although there was evidence about whether the agreement was disclosable or not, the core issue remains why there was no mentioning of it in the course of the acquisition by Jack Chen. Was it a deliberate and dishonest concealment on his part, pursuant to the conspiracy he had with May Wang to defraud 462 and the Stock Exchange?
Or, might it be that Jack Chen took the position or had the understanding that the agreement was in relation to a wholly different matter?
Or, might it be the case that Jack Chen thought that the agreement had already expired and/or had no application to the 462 acquisition? Or further, might it because of an unawareness of the disclosure requirement or a mere slip or inadvertence on the part of Jack Chen?
So while William Wong's opinion on the disclosure requirements concerning the commission agreement is there for your consideration, at the end of the day and after taking into account all the evidence adduced you may regard it more relevant and important to concentrate on what was Jack Chen's state of mind at the time as well as Jack Chen's relevant conduct and/or the interaction between Jack Chen and May Wang concerning this commission agreement, if any, and its relationship, if any, with the 462 acquisition. The facts are for you to find. How to approach the evidence and what is and is not important are entirely matters for you.”

23. Before the Court of Appeal, counsel acting on behalf of the 2^nd accused raised (at Ground 6) complaint that Mr William Wong was allowed to give “opinion evidence as to the meaning and interpretation of the Listing Rules” and “opinion evidence as to what the Listing Committee would do in hypothetical situations”. The Court of Appeal were in general agreement with the reasoning given by Madam Justice Pang, and also they were satisfied that the evidence of Mr Wong was admissible as such. [6]

24. I respectfully agree and I will follow Madam Justice Pang’s Ruling and adopt her reasons in the treatment of Mr William Wong’s evidence in this trial.

25. However, it is to be noted that in the 2021 retrial the same matter was raised before DHCJ Bruce and, as stated above, objection to Mr Wong’s evidence was raised by the Defence on exactly the same grounds on that occasion. As a result of that objection, DHCJ Bruce ruled that the witness, Mr Wong, would be permitted to express his experience of the day-to-day operation of the Listing Division. He would be entitled to express the standards that the Listing Division expects in relation to matters such as the announcement of the arrangements between 462 and the companies controlled by the 2^nd accused, so far as the announcement and, later, the circular. He has no personal knowledge of the exchanges between relevant parties in the development of the relevant documents, but he would be permitted to say that the Listing Division has a vetting process, and how that comes about and what the consequences of not following the strictures of the Listing Division would be. [7]

26. In his written Reason for Ruling which was given later on 12 October 2021, DHCJ Bruce said that “the issue of the construction and meaning of the Rules is an issue for direction of the Court if that became necessary.” He also gave his view that in the earlier trial before Madam Justice Pang, the issue had never arisen and did not arise. [8]

27. I am in respectful agreement with DHCJ Bruce that the construction and meaning of the Listing Rules is an issue or is a matter of law for this Court, and if – and only if – it becomes necessary, then this Court will give the jury the appropriate direction as to the correct construction of those Rules. For example, if in the course of his evidence Mr William Wong gives a wrong interpretation of the Listing Rule, then it will become necessary for this Court to correct that in its direction to the jury, but I must emphasise that this would only arise if the situation becomes necessary.

28. However, as Mr Owen rightly point out in the course of the argument, it appears that in the judgment of DHCJ Bruce there appears to have some “internal inconsistency” as to whether he should be treated as an expert who can give opinion evidence before the court. As rightly point out by Mr Owen, in his Ruling DHCJ Bruce said whether this is expert evidence isn't entirely straightforward. Later he said [9]:

“Having reviewed their committal depositions and their testimony at the previous hearing, I do not perceive that they were giving expert evidence to the meaning of any of the Listing Rules. They could not, in any event, give expert evidence as to the legal meaning of the Listing Rules as they are not qualified to do so. They are, on the basis of depositions and their former testimony, capable of giving evidence as to the operation of the Listing Division of the SEHK. Whether that evidence is truly opinion evidence is an interesting question. Plainly, both of these proposed witnesses [meaning Ms Cindy Ngai and Mr William Wong] are vastly experienced in the operation of the Listing Division. Expertise may be required by experience and subject to submission, it seems to me that their experience is sufficiently extensive to be characterised as expert.”

29. In allowing Mr Wong to give the evidence before the jury, DHCJ Bruce stated in his Reason for Ruling, at paragraph 22, that he did not perceive their evidence as expert evidence relating to the meaning of any of the Listing Rules. And he said that they were capable of giving evidence as to the operation of the Listing Division of the Stock Exchange, and the day-to-day operation of the Division was very much a rules-based operation. In relation to Counts 1 and 2 of the indictment, it is alleged that the SEHK was defrauded in the sense of acting contrary to its public duty. So it is “unavoidable that Mr Wong and Ms Ngai will need to explain what they did, why they did it and why they might have acted in another way, had they been aware of other facts and given that the operation of the Listing Division is fundamentally rule-based, [they] will of necessity have to refer to their understanding of the Listing Rules.” [10]

30. However, DHCJ Bruce pointed out that, if the position is that they give wrong evidence about their views of the Rules, then it would be necessary for the Court to give directions to the jury as to the correct position.[11] As I have said just now, I will adopt the same position if there is any error about his understanding of the Rules from the evidence of Mr Wong.

31. I agree that, strictly speaking, the opinion to be given by Mr Wong should be classified as expert opinion. Even though DHCJ Bruce did not allow him to give the evidence in the capacity of an expert as such, but having looked at his Ruling, especially those so-called “internal inconsistencies”, I consider that indeed he was allowing Mr Wong to give expert evidence, and that was why he was allowed to express his opinion on the operation of the Listing Rules in the Stock Exchange.

Conclusion

32. In my opinion, it is obviously clear that Mr Wong can give evidence, both as a factual witness as to what happened in relation to the publication of the Circular, or the matters surrounding the publication, and also to give opinion as an expert witness on behalf of the Prosecution regarding the operation of the Stock Exchange, and to explain the operation of the Stock Exchange in the pre-vetting of announcements and circulars issued by listed companies as well as the Listing Rules.

33. I accept that he can be asked as to what was expected to be done by the director of 462 under the Listing Rules in respect of the acquisition; what was done by the Stock Exchange; and how the work of the Stock Exchange would or might have been affected if certain matters had been brought to the attention of the Stock Exchange at the time.

34. So it is my view that Mr Wong is clearly entitled to give opinion evidence as an expert on those matters, as well as to give evidence as a factual witness. If the Prosecution seeks to tender him both as a factual and expert witness in due course, I am mindful to give permission for the Prosecution to do that.

35. Having said that, I must point out that I will also give a disclosure direction similar to that given by Madam Justice Pang in the summing up to the jury at the 2016 trial to have the matter clarified, even though I allow Mr Wong to give his opinion evidence about the disclosure of certain matters. This is my conclusion.

Postscript

36. These reasons are provided for the parties’ information only. The only part of this judgment which may be reported publicly is the above Conclusion. The remaining part of this judgment may not be reported until further order or until the conclusion of the trial.

(Anna Lai)
Judge of the Court of First Instance
High Court

Mr Neil S Mitchell, Counsel-on-fiat, leading Miss Ng Oi Lam, Joycelyn, SPP of the Department of Justice, and Mr Li Chun Ngai, Martin, Counsel-on-fiat, for the Prosecution

Mr Tim Owen, K C, leading Mr Benson Y M Tsoi, instructed by Boase, Cohen & Collins, for the 1^st Accused

Mr Ian Winter, K C, leading Ms Betty Chiu, instructed by Haldanes, for the 2^nd Accused

Mr David A S Khosa, instructed by Hobson & Ma, for the 3^rd Accused

[Subject to Reporting Restrictions as per Paragraph 36 of this judgment]

[1] HKSAR v Wan Thomas (2018) 21 HKCFAR 214

[2] See paragraph 2 in the Reasons for Ruling of Madam Justice Pang dated 15 February 2016

[3] See in detail paragraphs 7-12 of the Reasons for Ruling

[4] See paragraphs 17 and 20 respectively in the Reasons for Ruling

[5] See paragraph 30 of the Reasons for Ruling

[6] For detail please refer to paragraphs 141-146 of the Court of Appeal’s Judgment in CACC 172 of 2016

[7] See the transcript of Day 29, at pages 25-26.

[8] See paragraph 21 of DHCJ Bruce SC’s Reason for Ruling dated 12 October 2021

[9] See paragraph 22 of the Reason for Ruling

[10] See paragraph 26 of the Reason for Ruling

[11] See paragraph 27 of the Reason for Ruling

HCCC 309/2019

[2023] HKCFI 1803

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

________________________

BETWEEN
	HKSAR
	and
	CHEN Keen	1^st Accused
	(alias Jack CHEN) (陳克恩)
	HAO May	2^nd Accused
	(formerly known as WANG May Yan)
	(alias May WANG)
	YEE Wenjye	3^rd Accused
	(also known as YU Wenjie)
	(alias Eric YEE)

________________________

Before:

Hon Anna Lai J in Court

Date of Hearing:	7 September 2023
Date of Ruling:	15 September 2023

________________________

R U L I N G

________________________

1. The Prosecution proposes to call Mr Clive Russell Hudson to give expert accounting evidence and to tender his two reports dated 4 February 2021 and 25 March 2021 as evidence. The Defence jointly object to the admissibility of Mr Hudson’s evidence on the following 5 grounds:

(1)  The fundamental basis for the prosecution case has disappeared in light of the clear evidence from the Shinewing witnesses that the Tab 11 figures were never concealed from them - the concealment allegation at the heart of the case as opened to the jury is plainly unsustainable.
(2)  Mr Hudson’s instructions were always based on a fundamental misunderstanding of the issue in respect of Counts 2 and 4 and, hence, his resulting evidence is simply not relevant to any issue before the jury.
(3)  Mr Hudson does not in fact give “expert” evidence at all. Rather he purports to describe factually what are the differences in the figures between the Tab 11 Crafar farms’ accounts and D3’s financial statements. These are factual matters which are not in dispute and are already before the jury.
(4)  Mr Hudson is not a farm accountant. He is not competent to provide any valid opinion evidence on the reasonableness (or otherwise) of either the original Tab 11 figures or D3’s changes to those figures, which fall strictly into the province of farm accounting requiring specialist knowledge. He certainly cannot give expert evidence about the exercise of ascertaining a proper basis for the three years unaudited profit and loss figures attributable to the target assets. None of the opinions in his second report concerning the changes in the figures are admissible.
(5)  Mr Hudson’s evidence is not “necessary” since the changes are facts already before the Jury. The fact that the figures were changed or the extent of the changes is undisputed.

2. As rightly pointed out by Mr Mitchell, leading counsel for the Prosecution, Grounds 2 to 5 are identical to Grounds 1 to 4 of a similar objection raised by the Defence in the 2021 retrial before DHCJ Bruce. The learned judge allowed Mr Hudson to give expert evidence without giving a reasoned ruling.

Ground 1

3. In respect of Ground 1, the Defence submit that it has always been the central point of the Prosecution case on Counts 2 and 4 that the agreement necessarily involved the concealment of the Crafar external accounts to 31 March 2009 (the Tab 11 accounts). The Defence contend that the Prosecution case on concealment is contradicted by the documentary evidence as well as the Prosecution witnesses. The evidence of the ShineWing witnesses conclusively demonstrates that they were provided with the Tab 11 accounts as well as other underlying books and records of the target assets latest by 7 July 2009. The fact that there were losses in the 2009 Crafar Farm accounts was never concealed from ShineWing. ShineWing knew that adjustments were made to reflect the correct income stream generated by the target assets and the costs which directly go to the production of that income stream. It was not deceived into believing that the HK$92,520,000 gross profit figure related to the Crafarm group. Therefore, the fundamental basis for the Prosecution case has disappeared.

4. In reply, the Prosecution points out that this Ground involved a factual dispute to be resolved by the jury instead of an admissibility issue. It ignores the true issue in this case, which is whether the accused had formed the said conspiratorial agreements. The issue in this case is what these accounts were being presented as, whether they were presented as historical accounts attributable to the target assets. In order to determine whether there was a conspiratorial agreement one has to look at the actions and words of the accused. In assessing this issue, the element of concealment is relevant to the intention of the accused in presenting these accounts. The Prosecution disagrees that the evidence conclusively demonstrates that ShineWing had the Tab 11 accounts. Concealment is not simply a matter of looking at the evidence of the ShineWing witnesses. Even on their evidence it is not clear that the Tab 11 accounts were released to them at all. Reference was made to the emails between various reasons and the testimony of the ShineWing witnesses including Mr Barry Yip (PW7) who stated that only one set of accounts was presented as historical accounts.

5. It appears to me that this ground is more akin to a no case to answer submission which has little bearing to the admissibility of Mr Hudson’s evidence. Without going at length to issues which should be considered in a no case submission, on the totality of the documentary and testimonial evidence, I am satisfied that there is sufficient evidence of concealment to go before the jury. No doubt this issue will be canvassed in detail at the appropriate time.

Grounds 2, 3 and 5

6. In respect of Ground 2, the Defence submit that in his reports Mr Hudson did not address his mind to the fact that Appendix II of the Circular does not purport to present the net profit figures for the six Crafarms’ companies for the full 12 month period ending 31 May 2009. The Defence contend that Mr Hudson’s instructions from the ICAC (“whether the 2009 Crafarms Group profit and loss position for the 12 months ended 31 May 2009, presented by Natural Dairy to its shareholders in 2009, are a true representation of the Crafarms Group profit and loss position for that year when compared with the 2009 accounts actually prepared and signed off by the Crafarms Group accountants.”) were based on a fundamental misunderstanding of the nature of Appendix II because Appendix II is not the “Crafarms Group profit and loss position”. The issues are whether Appendix II was prepared based on the financial and other information properly compiled and derived from the underlying books and records of the target assets.

7. Reference is made to some passages in the summing up of Madam Justice Pang (as she then was) in the 2016 trial. Her Ladyship pointed out to the jury that the issue in this case was not whether the changes made by D3 were reasonable or justified. As such, Mr Hudson’s opinion on whether various changes made by D3 could be explained or justified is irrelevant to the true question that the jury has to decide, and his evidence is therefore inadmissible.

8. Grounds 3 and 5 contend that Mr Hudson’s evidence is unnecessary because the differences in the figures between the Tab 11 Crafar farms account and D3’s financial statements are undisputed factual matters. The fact that the figures were changed or the extent of the changes are facts already before the jury, therefore no expert evidence is necessary.

9. The Prosecution submits that Mr Hudson’s evidence will assist the jury by:

(1)  comparing D3’s final figures with the farms’ profit and loss position for the 10 months ended 31^st March 2009 as prepared by the farms’ accountant;
(2)  comparing the various sets of accounts prepared by D3 and provide his analyses and comments on the progressive changes made which show they were not justified in accounting terms;
(3)  commenting on the reasoning/justification/explanations D3 provided in his emails for the changes made in the accounts; and
(4)  comments on whether D3’s final figures were a true representation of the farms’ profit and loss position for the 12 months ended 31^st May 2009.

10. In reply, the Prosecution points out that the information which should have appeared in Appendix II is the historical income stream derived from all the farms and all their tangible assets, and that’s the same for the six farm companies, except for the debt because all the farms belonging to the six companies and all the fixed assets on them that belong to the Crafars were to be purchased. The figures should be historical, otherwise they were of little help to the shareholders who would want to know how the assets performed over the last 3 years instead of how they might perform if managed differently.

11. In respect of the differences in the figures, the Prosecution submit that the changes themselves maybe straightforward, but understanding how and why such changes were made is not easy. The Prosecution also relies on the pattern of changes (or lack thereof) to demonstrate the dishonesty of the accused and the falsity of the figures presented to ShineWing. Demonstrating the methodology employed by D2 and D3 as they changed the accounts by stages is an important indicator of the dishonestly of what they were doing.

12. It is important to identify the issues involved in Mr Hudson’s evidence before consideration of the above grounds. The relevant issues were identified by Pang J (as she then was) in her summing up to the jury at the 2016 trial [1]:

“About particulars (d) and (e), you may similarly think that at the end of the day the core issue is whether Eric was or was not playing with the figures and merely using the projected 2009 UBAH accounts as a pretext, or as an excuse, to provide such false figures to defraud 462 and the stock exchange pursuant to the conspiracy he had with Jack Chen and May Wang, rather than about the actual changes he made to the CraFarms’ historical accounts or about any ambiguity of the requirement for historical or actual figures under the Listing Rules.” (emphasis added)

13. And [2]:

“But in this case you may find that a direct comparison of Eric’s accounts with the tab 11 accounts is bound to result in differences. So the differences themselves may not be of much importance, but rather why there were such differences.
…
In other words, the issue for you after considering Panaho’s evidence and the rest of the evidence adduced before you is this: might it be that the differences were the results of the adjustments made by Eric in his preparation of the UBAH projected accounts. If so, the prosecution would fail to prove the alleged false representation concerning such financial information. Or, are you sure after considering all the evidence that the differences were the result of a false representation made dishonestly pursuant to the alleged conspiracies and that the claim of making adjustments was only put forth as an excuse to inflate the profit in order to paint a rosy picture for 462 and/or its shareholders in order that approval for the acquisition would more readily be given.” (emphasis added)

14. As the Court of Appeal pointed out at the outset of its Judgment [3]: “ Of the 3^rd appellant, it was the prosecution case that he had provided ShineWing with false figures in respect of the target company and target assets. He did so by manipulating the figures that had been provided to him by Mark King. ”

15. The above directions of Pang J were upheld by the Court of Appeal [4]:

“498. As the judge reminded the jury, there was no dispute that there were differences between the figures in the accounts provided by Mark King to the 3^rd appellant and the figures provided by him in the accounts supplied to ShineWing. Again, as the judge reminded the jury, the issue was whether or not the 3^rd appellant was “playing with the figures”, so that the figures that he provided were “utterly false accounts”. Or, were the figures the result of the 3^rd appellant making adjustments and producing projected accounts to ShineWing?
499. In that context, we are satisfied that the judge’s direction was correct. ... As the judge had suggested to the jury rhetorically, the real issue was why there was a difference between the figures provided by the 3^rd appellant to ShineWing compared with the figures provided to him by Mark King.”

16. Taking into account the content of Mr Hudson’s reports and the submission of parties in light of the issues identified by the Court of Appeal, I accept that Mr Hudson is an expert forensic accountant capable of giving evidence which could assist the jury in their determination of the relevant issues including whether D3 was making adjustments or manipulating the figures provided to him by Mark King. Mr Hudson did not conduct a simple comparison between the Tab 11 accounts and the final accounts supplied by D3. He looked at the changes in various stages. For instance, he can give evidence as to how the figures were changed, what changes were made, whether they were made in stages, whether they were made to all the farms, how the changes added up in accounting terms and whether the figures would appear in round number.

17. Furthermore, Mr Hudson’s opinion was acquired after lengthy and studious examination of the related documents. A vast amount of accounting material and a number of spreadsheets/summaries have been placed before the jury. The documentation involved is particularly cumbersome for them to handle. His evidence will no doubt assist the jury in understanding the significance of the figures.

Ground 4

18. Ground 4 can be dealt with briefly. The fact that Mr Hudson is not a farm accountant is a matter that will go to the weight of his evidence. No doubt counsel for the Defence would take the opportunity to explore this matter with Mr Hudson in his cross-examination.

19. To this regard, it would be helpful for Mr Hudson to read the transcripts of Mr Mark King and Mr David Wiltshire in this trial. I order that the same be provided to him before he gives evidence.

Conclusion

20. In my judgment, the expert evidence to be given by Mr Hudson is clearly relevant to Counts 2 and 4, and admissible for that purpose.

21. I rule that Mr Hudson is permitted to give expert evidence as a forensic accountant and to tender his two reports to the jury.

Postscript

22. These reasons are provided for the parties’ information only. The only part of this judgment which may be reported publicly is the above Conclusion. The remaining part of this judgment may not be reported until further order or until the conclusion of the trial.

(Anna Lai)
Judge of the Court of First Instance
High Court

Mr Neil S Mitchell, Counsel-on-fiat, leading Miss Ng Oi Lam, Joycelyn, SPP of the Department of Justice, and Mr Li Chun Ngai, Martin, Counsel-on-fiat, for the Prosecution

Mr Tim Owen, K C, leading Mr Benson Y M Tsoi, instructed by Boase, Cohen & Collins, for the 1^st Accused

Mr Ian Winter, K C, leading Ms Betty Chiu, instructed by Haldanes, for the 2^nd Accused

Mr David A.S. Khosa, instructed by Hobson & Ma, for the 3^rd Accused

[Subject to Reporting Restrictions as per Paragraph 22 of this judgment]

[1] Summing up in HCCC 83/2014, page 12H-N

[2] Summing up in HCCC 83/2014, page 138N-P and 139B-K

[3] CACC 172/2016, [2018] HKCA 121 at paragraph 26

[4] Judgment of CACC 172/2016, [2018] HKCA 121 at paragraphs 498-499

HCCC 309/2019

[2023] HKCFI 1802

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

________________________

BETWEEN
	HKSAR
	and
	CHEN Keen	1^st Accused
	(alias Jack CHEN) (陳克恩)
	HAO May	2^nd Accused
	(formerly known as WANG May Yan)
	(alias May WANG)

________________________

Before:

Hon Anna Lai J in Court

Date of Hearing and Ruling:	29 June 2023
Date of Reasons for Ruling:	10 July 2023

__________________________________

REASONS FOR RULING

__________________________________

The application

1. This was a joint application by the 1^st accused (“D1”) and the 2^nd accused (“D2”) to reserve for the consideration by the Court of Appeal the questions of law set out in the Notice of Motion pursuant to section 81 of the Criminal Procedure Ordinance, Cap. 221 (“CPO”). The questions of law had arisen from my ruling on 13 June 2023 (Reasons for Ruling handed down on 26 June 2023) that the particulars in the current indictment were not limited to the context of the Listing Rules, and the prosecution were not required to prove that the acquisition in question was a “connected transaction” under the Listing Rules (“the Ruling”).

2. After hearing submissions I refused the application. These are my reasons.

Background

3. On 29 April 2016, D1, D2 and the 3^rd accused were convicted on two counts of conspiracy to defraud contrary to common law after a lengthy trial before Anthea Pang J, as Anthea Pang JA then was, and a jury (HCCC 83/2014). D1 was also convicted on a count of money laundering in respect of his dealing with the alleged proceeds of such conspiracies to defraud (Count 3). Their convictions were subsequently quashed by the Court of Final Appeal with a retrial ordered[1].

4. The fresh indictment (HCCC 309/2019) consisted of four counts of conspiracy to defraud contrary to common law, and one count of money laundering. The retrial was heard before Deputy High Court Judge Bruce SC and a jury in 2021. On Day 57 of the retrial, a prosecution witness gave unsolicited evidence which was prejudicial to the accused. Upon the defence application, DHCJ Bruce discharged the jury on 16 June 2021 and the retrial was aborted as a result. Following the discharge of the jury, on 25 June 2021 the accused made applications to permanently stay the criminal proceedings. The applications were refused by DHCJ Bruce on 30 November 2021.

5. The retrial of the three accused was due to commence before another jury on 3 July 2023 with 100 days reserved.

The questions of law

6. The following questions of law were set out in the Notice of Motion filed by D1 and D2 on 28 June 2023:

(1)  In the context of charges of conspiracy to defraud the Stock Exchange and shareholders of a listed company, where false representations are said to have been made as to connections between the directors of the listed company and the vendor in a very substantial acquisition governed by the Listing Rules, for the purpose of the direction on falsity, is the Judge required to determine and direct the Jury, as a matter of law, on the meaning of a “connected transaction” and “connected persons” under the Listing Rules?
(2)  Whether it is sufficient to convict the Defendants on the current indictment on the basis of a finding that D1 and D2 had been “working together” in the specified context without examining whether D2 was a “connected person” so as to render the acquisition of a “connected transaction” for the purposes of the Listing Rules?
(3)  When assessing falsity in the context of a charge of conspiracy to defraud alleging specific (false) representations as essential element of the offence (which representations were made by a director under and pursuant to specific Listing Rules requirements in a very substantial acquisitions) must the impugned representations be interpreted as having specific/special meanings in the context of “connected transactions” under the Listing Rules, or can they simply be given an unspecified “ordinary plain meaning?”

7. It was submitted that Question 1 was identical to Legal Question 1 in respect of which the Court of Final Appeal granted leave for D1, D2 and the 3^rd accused to appeal against their convictions in HCCC 83/2014. Questions 2 and 3 were said to be closely related to the two issues on the Substantial and Grave Injustice (“SGI”) basis for which leave to appeal was also granted by the Court of Final Appeal[2]. Having quashed the accused’s convictions on the ground of duplicity (Legal Question 2) in their final appeals, the Court of Final Appeal concluded that it was unnecessary and undesirable to deal with the issues under Legal Question 1 and the SGI basis.

Defence submission

8. Section 81 of the CPO provides, inter alia:

“81. Power to reserve question of law for consideration of Court of Appeal
(1) The judge of the court of trial may reserve for the consideration of the Court of Appeal any question of law which may arise on the trial of any indictment.
(2) In exercising his power under subsection (1), the judge may act either of his own motion or on the application of the Secretary for Justice or the defence.
…”

9. The defence pointed out that section 81 of CPO provided a route of interlocutory appeal from a criminal court of first instance on a question of law arose “on the trial of any indictment”, and the court’s discretion to make a reference to the Court of Appeal was unfettered.

10. The defence referred to the case of HKSAR v Mak Wan Ling (No.1)[3] in which the Appeal Committee of the Court of Final Appeal identified the criteria in determining whether a ruling by the Court of Appeal on a question of law reserved under section 81 CPO was to be regarded as a final appeal for the purposes of section 31 of the Hong Kong Court of Final Appeal Ordinance, Cap. 484 (“HKCFAO”). In granting leave to appeal in respect of the question of law, the Court in that case held that a broad common-sense approach should be applied. If the issue of law dealt with and determined by the Court of Appeal in the section 81 reference was a substantive part of or a crucial issue in the trial or a point that went to the root of the case or a dominant feature of the case, then the judgment arising from the section 81 reference, even if it did not finally dispose of the whole action, should nevertheless be regarded as a final judgment. Otherwise, in the event of conviction it would not be opened to the applicant in that case to argue the issue of law to the contrary either at her retrial or on any intermediate appeal to the Court of Appeal. The applicant would then have to pursue an appeal to the Court of Final Appeal to challenge the conviction. This would be unduly cumbersome.

11. In the present case, counsel for D1 and D2 submitted that the question of legal certainty (and the true meaning of the pleaded particulars in Counts 1 and 3) was a fundamental question of law which required resolution in advance of the retrial. They said the defence would have raised this issue before DHCJ Bruce in their no case to answer submission in the previous retrial had that retrial proceeded further[4]. The issue was crucial and went to the root of the case or a dominant feature of the case upon which the jury would ultimately be directed. Moreover, the issue was found to be reasonably arguable by the Court of Final Appeal given that leave was granted to the accused in their appeals against the convictions in HCCC 83/2014.

12. Counsel submitted that the sensible approach would be to secure a final decision from the Court of Final Appeal before the present retrial proceeded. The quickest way to achieve this would be for this Court to refer the questions of law to the Court of Appeal pursuant to section 81 of the CPO; then for the Court of Appeal to consider itself bound by its own decision on this matter in CACC 172/2016[5], and to refer the matter to the Court of Final Appeal for determination.

13. Counsel accepted that the impending trial would need to be adjourned for an uncertain period of time should this application be granted, but contended that the risk of conviction on an unlawful basis would amount to a prejudice significantly greater than any further delay that might be occasioned by the interlocutory appeal to the Court of Appeal and the further appeal to the Court of Final Appeal.

14. Counsel for D1 and D2 also informed this Court that should this application be refused, they intended to appeal the Ruling to the Court of Final Appeal pursuant to section 31(b) of the HKCFAO and/or to make an application to the Court of Final Appeal to “re-open” the appeals in FACC Nos 26, 27 and 28 of 2018[6] such that the legal questions might be resolved by that Court directly.

Prosecution submission

15. The prosecution did not dispute that this Court had the jurisdiction to reserve a question of law for the consideration of the Court of Appeal either before or after conviction, and the powers to reserve were discretionary both as to the original reservation and as to the time at which the matter was to be placed before the Court of Appeal. The Court of Appeal would not be bound to resolve the questions of law referred to it. It could decline to do so and direct the judge to continue with the trial[7].

16. The position of the prosecution was that the questions of law stated in the Motion were not such as to warrant this Court making a reference to the Court of Appeal and, further, the test of “most exceptional circumstances” had not been met.

17. The prosecution submitted that the reservation should only be made in the most exceptional circumstances, as the Court of Appeal reiterated in Re Judge’s reservation (No.1) of 1994[8]:

“ On a more general note we feel bound to state for the guidance of judges that in our view resort should only be made to section 81 in the most exceptional cases. It is the duty of a judge to ensure that the trial over which he presides proceeds to conclusion with a minimum of disruption. To that end it is his duty to resolve issues of law, be they simple or difficult, as they arise in the course of a trial. It hardly needs stating that reference of any but the most exceptional points of law to the Court of Appeal would inevitably seriously disrupt the orderly disposal of other appeals that have already been listed for hearing and, where the trial is before a jury, result in inconvenience to jurors. We do not think that it was the intention of the legislature that other than in wholly exceptional cases the continuity of trials should be interrupted by references under section 81.
Where after reservation to it by a judge of a point of law this court concludes, on an examination of the papers and without hearing counsel, that the point of law is not one which it ought to consider at that stage, it will decline to consider it and direct the judge to continue with the trial. If a conviction then follows the point of law should be determined at the hearing of an appeal that takes its place in the list of those already awaiting hearing.” (emphasis added)

18. In HKSAR v Chen Keen (No.2)[9], the Court of Final Appeal re-emphasized that such a reference should only be made in the most exceptional circumstances. The underlying principle was the policy against fragmentation of the criminal process and the delay which would inevitably arise. The prosecution emphasized that this was very pertinent in the present case because of its long history. This application, if granted, would inevitably result in a delay in the commencement of the retrial and may even result in the whole retrial being refixed. Given the long history of this matter, it would be in the interest of all for the retrial to proceed to conclusion without disruption. Should the retrial proceed to the conviction of the accused, they would be at liberty to take the matter on appeal.

19. It was pointed out that the same issue had been canvassed by Pang J in the original trial and the Court of Appeal in CACC 172/2016. The Court of Final Appeal granted leave on this issue but decided that it was unnecessary and undesirable to deal with it after the appeals were allowed with convictions quashed and a retrial ordered. DHCJ Bruce had also expressed his views on this issue based on the evidence he had heard and the no case submissions filed by parties in the retrial.

20. The prosecution submitted that if the application was granted, the Court of Appeal would be asked to look at this matter without the benefit of any evidence because no evidence had been led on this particular matter. It would only have the benefit of the trials before Pang J and DHCJ Bruce who both rendered rulings or expressed views on the issue based upon the evidence they had heard.

21. In the event of this Court refusing this application, the prosecution submitted that it remained open for the defence to take such steps as they considered appropriate. Whether or not they could appeal the Ruling and/or make an application to re-open the final appeals would be a matter for the Court of Final Appeal.

Consideration

22. It is trite that a section 81 reservation should only be made in the most exceptional circumstances. In the case of R v Sin Yau Ming, Silke VP said[10]:

“While it is not for this court to fetter a discretion conferred upon a judge nevertheless recourse to and reservation under section 81 should be the subject of the most careful scrutiny and orders made only in the rarest of cases.
It is not helpful to reserve a question of law … and to require this court to consider its decision on the question raised before any evidential background is available.” (emphasis added)

23. The same view was shared by Kempster JA[11], “In the exercise of their discretion judges may well reserve questions and adjourn hearings pursuant to s 81 sparingly and bearing, among other considerations, the effect on jurors in mind.”, and Penlington JA[12], “ I do however also entirely agree that a reference to this Court before conclusion of the trial should be rare indeed.”

24. The principle was reiterated by Macdougall VP in giving the judgment of the Court of Appeal in Re Judge’s reservation (No.1) of 1994[13].

25. As explained by the Appeal Committee of the Court of Final Appeal in HKSAR v Chen Keen (No.2)[14]:

“17. The criminal appeal regime in Hong Kong is primarily governed by Pt. IV of the CPO and the criminal jurisdiction of the Court of Appeal is set out in s.13(3) of the High Court Ordinance (Cap.4). The prohibition against an immediate appeal is dictated by the policy against fragmentation of the criminal process. An interlocutory challenge to a decision made in the course of a criminal trial, if permitted, would result in the fragmentation of the criminal process which would inevitably bring disruption and delay to the final disposition of a criminal matter, see Yeung Chun Pong v Secretary for Justice.[15]To safeguard against such disruption and to foster prompt disposal of criminal matters, our criminal appeal regime does not provide for interlocutory appeals to the Court of Appeal. Instead, erroneous judicial decisions in the course of a trial could and should be corrected by way of appeal against conviction. Appeals in criminal matters to the Court of Appeal are thus primarily restricted to appeals against convictions and sentences, see ss.82 and 83G of the CPO. If an appellant is aggrieved by the judgment of the Court of Appeal in such an appeal, subject to leave being granted, a further appeal can be brought to this Court under s.31(a) of the HKCFAO.
18. Consistent with the policy against fragmentation and role of this Court as the court of final adjudication, s.31(b) on its proper construction does not permit an accused to pursue a direct appeal to this Court in respect of a decision of a trial judge when the trial has yet to be completed and the merits of the decision could potentially be reviewed in the Court of Appeal in an appeal against conviction.
19. The only exception is a reservation on a point of law to the Court of Appeal under s.81 of the CPO.[16]However, it was rightly held by the Court of Appeal in Re Judge’s Reservation (No 1) of 1994[17]at [10] and [11] that such a reference should only be made in the most exceptional circumstances as it was not the legislative intent that the continuity of trials should be interrupted by references under s.81. The Court of Appeal also indicated that if the point of law did not appear to the court to be one which ought to be considered at that stage, it would decline to do so and direct the trial to be continued.” (emphasis added)

26. The case of HKSAR v Mak Wan Ling (No.1)[18] concerned whether a section 81 decision of the Court of Appeal could be considered as a “final decision” under section 31 of the HKCFAO. This case was of little assistance on the trial judge’s discretion in the making of the section 81 reservation.

27. As rightly pointed out by the prosecution, this case had a long history. The offences were alleged to have been committed in the years of 2009-2010. Following the discharge of the jury in the retrial by DHCJ Bruce on 16 June 2021, on 20 December 2021 the present trial was listed to commence on 2 May 2023 with 90 days reserved. Ten additional days were subsequently added in accordance with parties’ estimation. The commencement of the trial was postponed to 3 July 2023 to deal with pre-trial issues raised by the defence, to await the Court of Final Appeal’s decision on a costs matter and to allow the 3^rd accused to sort out his legal representation.

28. If the application was granted, the commencement of the trial would have to be adjourned for an uncertain period of time to await results of the intended interlocutory appeal to the Court of Appeal and the intended final appeal to the Court of Final Appeal. This would cause tremendous problem to the prosecution as MLA arrangements had already been made for the overseas witnesses to give evidence at the impending trial. The availability of leading and junior counsel for parties to participate in the 100-day trial after the adjournment would be an added problem. In the circumstances, I considered that if the application was granted, refixing of the trial would be inevitable. All the valuable time and judicial resources as well as the substantial public funds spent thus far would be totally wasted.

29. If the trial had to be refixed, it would be fanciful to suggest that the fresh trial could take place in 2024 or early 2025 given its length, the constraint of judicial resources and the availability of counsel. This unwarranted delay would be utmost unfair to the prosecution which was ready to proceed all along, and the 3^rd accused who was not charged with the offences in Counts 1 and 3. Furthermore, given the age of this matter, the impact of the further delay on the memory of the witnesses and the accused would no doubt be stronger than most of the other cases. To this regard, I also took into account the prosecution’s difficulty in securing the attendance of some overseas witnesses who could not be compelled by the Hong Kong courts to give evidence (including those witnesses specifically required by the defence). Indeed one of the overseas witnesses whose evidence was said to be highly relevant by the defence had already expressed his unwillingness to testify anymore.

30. Having regard to all the circumstances including the continuity of the trial without disruption, the policy against fragmentation of the criminal process, the public interest to have the guilt or innocence of the accused determined at trial, and the adverse impact of the adjournment/delay as mentioned in the above paragraphs, I did not consider that this was one of the most exceptional cases that would justify an exercise of my discretion to make the section 81 reservation.

Conclusion

31. For the above reasons, D1 and D2’s application to reserve the proposed questions of law for the consideration of the Court of Appeal pursuant to section 81 of the CPO was refused.

Postscript

32. These reasons are provided for the parties’ information only. The only part of this judgment which may be reported publicly is the above Conclusion. The remaining part of this judgment may not be reported until further order or until the conclusion of the trial.

(Anna Lai)
Judge of the Court of First Instance
High Court

Mr Neil S Mitchell, Counsel-on-fiat, leading Miss Ng Oi Lam, Joycelyn, SPP of the Department of Justice, and Mr Li Chun Ngai, Martin, Counsel-on-fiat, for the Prosecution

Mr Tim Owen, K C, leading Mr Benson Y M Tsoi, instructed by Boase, Cohen & Collins, for the 1^st Accused

Mr Ian Winter, K C, leading Ms Betty Chiu, instructed by Haldanes, for the 2^nd Accused

[Subject to Reporting Restrictions as per Paragraph 32 of this judgment]

[1] FACC Nos 26,27 and 28 of 2018, (2019) 22 HKCFAR 248

[2] FAMC Nos 26, 27 & 28 of 2018, (2019) 22 HKCFAR 248

[3] (2019) 22 HKCFAR 51

[4] D1 and D2 were respectively represented by the same leading counsel in the previous retrial before DHCJ Bruce SC.

[5] [2018] HKCA 121 dated 16 April 2018, in relation to D1, D2 and the 3^rd accused’s appeal against their convictions in HCCC 83/2014.

[6] (2019) 22 HKCFAR 248

[7] R v Sin Yau Ming CACC 289/1990

[8] CAQL No. 1 of 1994, [1994] 2 HKCLR 41, [10]-[11]

[9] (2022) 25 HKCFAR 34

[10] CACC 289/1990, pp.10-11

[11] p. 33

[12] p. 52

[13] CAQL No. 1 of 1994, [1994] 2 HKCLR 41, [10]-[11] : see [17] above.

[14] (2022) 25 HKCFAR 34, [17]-[19]

[15] (2006) 9 HKCFAR 836 at [44] per Mason NPJ and Yeung Chun Pong v Secretary for Justice [2008] 3 HKLRD 1 at [67] per Stock JA (as he then was). See also R v Director of Public Prosecutions, ex p Kebilene [2000] 2 AC 326 at p.372.

[16] Section 81 is applicable to criminal trials in the Court of First Instance as well as criminal trials in the District Court by virtue of s.83 of the District Court Ordinance (Cap. 336). In the context of a trial before a magistrate, the determination of the constitutionality of an offence can be challenged by way of case stated to the Court of First Instance (which could be transferred to the Court of Appeal). In respect of such determination by the Court of First Instance (or the Court of Appeal, if the case had been transferred to it), a further appeal can be brought to the Court of Final Appeal, see Secretary for Justice v Yau Yuk Lung (2007) 10 HKCFAR 335 at [68] to [76]. At the same time, it was made clear at [74] that the well-settled requirement of finality is not to be disturbed.

[17] CAQL 1 of 1994, 21 June 1994.

[18] (2019) 22 HKCFAR 51

HCCC 309/2019

[2023] HKCFI 1719

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

________________________

BETWEEN
	HKSAR
and
	CHEN Keen	1^st Accused
	(alias Jack CHEN) (陳克恩)
	HAO May	2nd Accused
	(formerly known as WANG May Yan)
	(alias May WANG)
	YEE Wenjye	3^rd Accused
	(also known as YU Wenjie)
	(alias Eric YEE)

________________________

Before:

Hon Anna Lai J in Chambers (Open to Public)

Date of Hearing:	23, 27 and 28 February 2023
Date of Ruling:	17 March 2023
Date of Reasons for Decision:	29 June 2023

____________________

REASONS FOR DECISION

____________________

The application

1. This is a second application by the defence for a permanent stay of these proceedings. After hearing submissions in February 2023, I refused the application as I did not find this to be a case in which a fair trial would not be possible or there was an abuse of process which would justify a stay of these proceedings. I will now give my reasons.

Background

2. On 29 April 2016, the three accused (hereinafter referred to as “D1”, “D2” and “D3” respectively) were convicted on two counts of conspiracy to defraud contrary to common law after trial before Anthea Pang J, as Anthea Pang JA then was, and a jury (HCCC 83/2014, “the 2016 trial”). D1 was also convicted on a count of money laundering in respect of his dealing with the alleged proceeds of such conspiracies to defraud (Count 3). Their convictions were subsequently quashed by the Court of Final Appeal with a retrial ordered. The retrial was heard before Deputy High Court Judge Bruce SC and a jury in 2021. On Day 57 of the retrial, a prosecution witness gave unsolicited evidence which was prejudicial to the accused. Upon the defence application, DHCJ Bruce discharged the jury on 16 June 2021 and the retrial was aborted as a result (HCCC 309/2019, “the 2021 trial”).

3. Following the discharge of the jury, the accused made applications to permanently stay the criminal proceedings on the ground that it would be vexatious, unjust, oppressive and contrary to the interests of justice to continue with the trial. In the alternative, the stay was sought on the basis that it would be an abuse of process as a fair trial is not possible and/or that it would be an affront to the court’s sense of justice to try the accused for a further time. The application was heard by DHCJ Bruce on 25 June 2021.

4. On 30 November 2021, the judge ruled against the stay application. The accused then sought leave to appeal directly to the Court of Final Appeal. The application was dismissed as the Appeal Committee concluded that the Court had no jurisdiction to entertain the intended appeals.

5. The charges against the accused are now scheduled to be tried before another jury in July 2023. On 10 February 2023 the defence filed a Motion to apply for a permanent stay of these proceedings^{^[1]}.

Grounds of the application for stay

6. This application was made under both categories of abuse of process as set out in HKSAR v Lee Ming Tee & anor^{^[2]} (confirmed in HKSAR v Ng Chun To Raymond and Another^{^[3]}). The defence provided the following two grounds in the Notice of Motion dated 10 February 2023:

I.  The prosecution’s deliberate refusal to call and/or attempt to secure the attendance of five crucial witnesses (all of whom are professionals involved in the acquisition) in the upcoming Trial-3, knowing full well that they can give admissible and highly relevant evidence going to the truth of the matters underlying the criminal allegations and the prosecution’s case - amounts to an abuse of process. These include:-
(1)  Contrary to the prosecution’s position in the 2021 Trial-2, they are now unwilling to call Mr Navin Aggarwal (462’s lawyer in the Acquisition) in Trial-3 notwithstanding that the prosecution made an application for a witness summons compelling his attendance in Trial-2;^{^[4]}
(2)  Contrary to the ruling of Bruce DHCJ in Trial-2, the prosecution is now refusing to call Mr Nick Cross and Mr Kerry Knight to give evidence in Trial-3 despite being well aware (from Trial-2) that:-
(a)  Messrs Cross and Knight are willing and able to give highly relevant - indeed critical - evidence going to the truth of the matters underlying the criminal allegations and the prosecution’s case, and did so in Trial-2;
(b)  the necessary waiver for them to give that evidence has already been obtained by the prosecution from the liquidators of 462;
(c)  after full argument, Bruce DHCJ rejected the prosecution’s objections to calling both Mr Cross and Mr Knight, holding that the circumstances of the case and allegations (which the prosecution concedes remain the same) mandated that it was in the interests of justice that they be called by the prosecution (see Trial-2 Rulings dated 26/5/21 and 7/6/21).
(d)  Both Messrs Cross and Knight were called by the prosecution in Trial-2 and no sensible fresh reason has been advanced by the prosecution as to why they should not be called again in Trial-3.
(3)  The prosecution intend to suggest that the NZ$51.6m payment released by the law firm Knight Coldicutt was both dishonest and unauthorised (notwithstanding the fact that no such allegation is indicted) - knowing full well that Mr Cross and Mr Knight (of Knight Coldicutt) can give evidence directly contrary to such allegation.
(4)  The prosecution refuses to call Mr Wu Wing Kit (who was UBTL’s and UBFM’s lawyer in the Acquisition) in Trial-3 without even attempting to make any enquires with or obtain any witness statements from him, whilst knowing full well that he “can give relevant and admissible evidence”^{^[5]} that is material to the prosecution allegations - constituting a serious breach of their duty of disclosure as explained in Ng Chun To (supra)^{^[6]}.
(5)  The above must be viewed in the context of the prosecution’s clear position that:- (i) “…the fact is what [PW1] was being told it [i.e. the transaction documents] meant by the fancy lawyers who drafted it is relevant, and what she believed she was signing is a relevant consideration, and that’s one of the reasons why we have also given consideration to calling Mr Aggarwal, who was the man who drafted this an advised her”; (ii) “Mr Aggarwal or Mr Wu might be able to solve” the issue whether D1 wanted the farm agreements to be disclosed to PW1 (which directly contradict the case that D1/D2 were in a conspiracy to defraud 462/PW1); and (iii) Mr Aggarwal “…can say how he was instructed to put together this agreement and how those clauses protected 462”;^{^[7]} (iv) “…we wanted a witness to fill the gap I’ve told you about, and the candidates were Wu and Aggarwal”^{^[8]}. And that the consideration of calling Mr Wu was only ruled out in Trial-2 because of Bruce DHCJ’s previous involvement with Mr Wu in a connected trial (which is no longer a concern in Trial-3).^{^[9]}
(6)  That Mr David Wiltshire (the original farms accounts keeper who testified in Trial-2) is now unwilling to testify in Trial-3 - and no attempt has been made by the prosecution to utilise legal processes such as letters of request; mutual legal assistance or other steps to secure his attendance at Trial-3.
The above decisions by the prosecution result in serious abuse of process. Further or in the alternative, the above renders it impossible for the accused to have a fair trial in Trial-3.
II.  It is not possible now for the accused to have a fair trial 14 years after the events the subject of the Indictment because (1) the prosecution witnesses can no longer remember those events, the conversations that took place at the time, or the documents written to and by them; (2) because of the deliberate failure on the part of the investigators to put the contemporaneous documents to them when their witness statements were taken. This deprived the witnesses of the opportunity to refresh their memories from the documentary record when events were fresh in their minds. This has resulted in it not being possible for the defendants to adduce the truth of what happened from the prosecution witnesses who can no longer remember those events. These matters individually and collectively result in the continuation of these proceedings being an abuse of process and renders it impossible for the accused to have a fair trial.

7. Belatedly, in the course of the hearing of the argument on other issues, on 24 February 2023 the defence added a third ground to the application:

III. It is an abuse of process to maintain a prosecution case that is inconsistent with the core documentary record and contrary to the evidence of witnesses it refuses to call.

The law and applicable principles

8. A permanent stay of proceedings would only be justified in highly exceptional circumstances. It is an exceptional remedy and is only available as a last resort. The ultimate objective of the discretionary power to stay the proceedings is to ensure that there should be a fair trial according to law, which involves fairness both to the accused and to the prosecution^{^[10]}. The court would not normally intervene in the right of the prosecution to demand a verdict except that a fair trial is impossible or in rare cases. Even where the bases of abuse have been established, the court should only impose a stay as a last resort where a stay is the only means of doing justice. The burden is on the accused to show on a balance of probabilities that no fair trial could be held.

9. In general, if a prosecution is brought, the court’s duty is to try the case. But in the exercise of its inherent power to prevent an abuse of its own process, the court has jurisdiction to stay criminal proceedings in two circumstances^{^[11]}:

(1) Where, notwithstanding the remedial measures which are available to a court to ensure a fair trial, the circumstances are such that a fair trial for the accused is found to be impossible and continuing the prosecution would amount to an abuse of process. A long delay is only one factor in determining whether or not prejudice to the extent that no fair trial can be held has been caused.
(2) In rare cases where, even though a fair trial is available, there has been an abuse of power of a kind that rendered the trial of the accused an affront to the court’s sense of justice and propriety. The cases in this category would be rare since the public interest lay in the guilt or innocence of the accused being fairly and openly determined at trial. Powerful reason must exist for this to be displaced.

10. The principle was reiterated by the Court of Appeal in HKSAR v Ng Chun To Raymond^{^[12]}:

“The circumstances in which, in the exercise of a court’s discretion, a stay of proceedings will be justified are exceptional. Those circumstances are explained by Ribeiro PJ in HKSAR v Lee Ming Tee & anor. “In general,” he said, “if a prosecution is brought, the court’s duty is to try the case”; since “generally speaking a prosecutor has as much right as a defendant to demand a verdict ... on an outstanding indictment, and where either demands a verdict a judge has no jurisdiction to stand in the way of it.” But in exercise of its inherent power to prevent an abuse of its own process, the court has jurisdiction to stay criminal proceedings in two circumstances:
(1) where, notwithstanding the remedial measures which are available to a court to ensure a fair trial, the circumstances are such that “a fair trial for the accused is found to be impossible and continuing the prosecution would amount to an abuse of process.” (emphasis added) That is because “the continuation of processes which will culminate in an unfair trial can be seen as a ‘misuse of the court process’ which will constitute an abuse of process because the public interest in holding a trial does not warrant the holding of an unfair trial.” The burden is on the accused to show on a balance of probabilities that no fair trial can be held. The basis upon which such applications tend to be mounted include delay, unfair methods of investigation, and pre-trial publicity; and
(2) in rare cases where, even though a fair trial is available, the court is prepared to grant a permanent stay because there has been an abuse of power of a kind that renders the trial of the accused an affront to the court’s sense of justice and propriety. An example is the refusal of a court to exercise jurisdiction over an accused who has been unlawfully abducted from another jurisdiction.”

Consideration of Ground 1

11. It is pertinent to note that in the course of the pre-trial argument in February 2023, separate issues were raised by the defence in connection with the calling of Mr Nicholas John Cross, Mr Kerry Joel Knight, Mr Wu Wing Kit and Mr Navin Aggrawal as prosecution witnesses, and the admissibility of Mr David Wilshire’s evidence without him being called as a live witness.

12. As a result of my ruling on 27 March 2023, the prosecution were invited to call Messrs Cross and Knight or to tender them as prosecution witnesses^{^[13]}. As a result, the prosecution deferred to my invitation and would have those two persons called in the forthcoming trial.

13. I also ruled that the prosecution’s decision not to call Messrs Wu and Aggrawal was fully justified. Leaving aside the issue of legal professional privilege concerning Mr Wu (the lawyer who had given advice to D1 and D2 at the time) which did not appear to be forthcoming, I concluded that no unfairness was likely to occur because it would be open for the defence to have them called if they wish to do so^{^[14]}.

14. The situation regarding Mr Wilshire has since been overtaken by events. For reasons set out in the same judgment^{^[15]}, it was apparent that he was an unwilling overseas witness who could not be compelled by the Hong Kong courts to give evidence. The defence had made it clear that they would not need Mr Wiltshire to be called, but “there are consequences of him not being called by the prosecution”. Pursuant to my ruling on the admissibility of his evidence given in the previous trials, the prosecution have taken out MLA application in order to secure the live evidence of Mr Wiltshire by TV link. Nonetheless, given his reluctance to testify in the forthcoming trial, it remains uncertain as to whether the prosecution could succeed in doing so.

15. Given that the defence would not require the calling of Mr Wiltshire’s evidence, there is no basis for me to conclude that his unavailability would adversely affect the fairness of the trial. On the contrary, the defence would be able to comment on the impact of his absence on the strength of the prosecution case.

16. For the reasons stated above, I am satisfied that this ground would not have any effect on the fairness of the forthcoming trial.

Consideration of Ground 2

17. As Mr Mitchell for the prosecution rightly pointed out, the complaints under this ground are exactly the same as those contained in the Joint Defence Submissions filed before DHCJ Bruce save for the contention that “the unfairness is now aggravated by the prosecution’s refusal to call the witnesses stated above”. The only change of circumstances was that the previous ruling was made some 18 months ago, and this time-lapse was partially caused by counsel’s unavailability.

18. DHCJ Bruce summarized the accused’s argument as follows[16]:

“Grounds (f) and (g): Unacceptable delay
…
34. The accused complain that while in some respects the present case is a document-based case critical witnesses were often required to give testimony based on their own recollection. In this regard, those representing the accused instance the testimony of Mr Nicholas John Cross who, so it is contended, was asked to give his testimony from his own recollection rather than from documents. Cross-examination of the same witness on documents produced very little else by way of recollection.
35. Those representing the accused complain that the ICAC in taking statements from witnesses did so by reference to memory only and not from contemporaneous documents. It is complained that often such witnesses were faced with contemporaneous documents for the first time when they were cross-examined in the retrial ordered by the Court of Final Appeal. It is contended that, accordingly, the defence of being denied the opportunity of being able to test the witness by reference to their memory and to contemporaneous documents. It is contended that there were multiple occasions (the submissions say literally hundreds of occasions) when a witness said that he could not remember thus demonstrating the unreliability of the witness.
36. It is contended that the combination of circumstances identified by the accused render the trial unfair.”

19. There is no dispute about the applicable legal principles set out in the judgment of DHCJ Bruce as follows[17]:

“Delay
Principles engaged
72. The community expects that those charged with criminal offences will be tried without undue delay. That is a right vested in an accused person and guaranteed by Article 87 of the Basic Law.^{^[18]} Where there is an issue of delay, the determination of whether such delay can be characterised as undue delay and if it can be so characterised what the consequences are is determined by considering a wide variety of factors. This is because delay and more particularly undue delay has to be considered in the context of other factors that comprise the public interest in the just disposition of criminal proceedings. Central amongst those other factors are:
(1) The concern is that those who are charged with criminal offences have those charges determined according to law; and
(2) In determining a criminal charge, the accused is given a fair trial.
73. In addition, there will be cases where the interests of victims of criminal conduct are relevant considerations. These considerations include resolution and sometimes vindication of interests and the bringing of what is sometimes termed closure. There will also be cases where the interests or circumstances of the accused other than his or her interest in a fair trial will be a relevant consideration.
74. One of the best lists of factors to be considered in dealing with issues of delay comes from Jago v District Court (NSW) (1989) 168 CLR 23. In that case, Deane J suggested that the considerations which a Court ought to take into account in considering the issue of undue delay are as follows:^{^[19]}
(1) the length of the delay;
(2) reasons given by the prosecution to explain or justify the delay;
(3) the accused’s responsibility for and past attitude to the delay;
(4) proven or likely prejudice to the accused; and
(5) the public interest in the disposition of the charges of serious offences and in the conviction of those guilty of crime.
75. Deane J was careful to characterise the list as a list of considerations and not a definitive guide. His Honour held that these headings “provide convenient reference points for answering the question whether the effect of a delay in a particular case is such as to bring about a situation where any trial will necessarily be an unfair one from the accused’s point of view or a situation where the continuation of proceedings would be so unfairly oppressive that it would constitute an abuse of process. They should not, however, be treated as a code or permitted to divert attention from the fact that what will ordinarily be involved in answering that question is the formation of a value judgment in the context of the nature and seriousness of the alleged offence and having regard to all other relevant circumstances.”
76. Deane J’s list must be placed in context. In Australia, there was at the time of Jago (and remains) no constitutionally based free-standing right to a trial without undue delay. In Jago, the High Court of Australia held that there was not a freestanding right to trial without undue delay but held that undue delays should be considered in the context of the right to a fair trial.
77. The seminal decision on this topic is Attorney General’s Reference (No 2 of 2001) [2003] UKHL 68, [2004] 2 AC 72. In the context of a contention of delay in the context of a right to trial without undue delay which was constitutionally guaranteed, Lord Bingham held:^{^[20]}
“If, through the action or inaction of a public authority, a criminal charge is not determined at a hearing within a reasonable time, there is necessarily a breach of the defendant’s Convention right under article 6(I). For such breach there must be afforded such remedy as may (section 8(I)) be just and appropriate or (in Convention terms) effective, just and proportionate. The appropriate remedy will depend on the nature of the breach and all the circumstances, including particularly the stage of the proceedings at which the breach is established. If the breach is established before the hearing, the appropriate remedy may be a public acknowledgement of the breach, action to expedite the hearing to the greatest extent practicable and perhaps, if the defendant is in custody, his release on bail. It will not be appropriate to stay or dismiss the proceedings unless (a) there can no longer be a fair hearing or (b) it would otherwise be unfair to try the defendant. The public interest in the final determination of criminal charges requires that such a charge should not be stayed or dismissed if any lesser remedy will be just and proportionate in all the circumstances. The prosecutor and the court do not act incompatibly with the defendant’s Convention right in continuing to prosecute or entertain proceedings after a breach is established in a case where neither of conditions (a) or (b) is met, since the breach consists in the delay which has accrued and not in the prospective hearing. If the breach of the reasonable time requirement is established retrospectively, after there has been a hearing, the appropriate remedy may be a public acknowledgement of the breach, a reduction in the penalty imposed on a convicted defendant or the payment of compensation to an acquitted defendant. Unless (a) the hearing was unfair or (b) it was unfair to try the defendant at all, it will not be appropriate to quash any conviction. Again, in any case where neither of conditions (a) or (b) applies, the prosecutor and the court do not act incompatibly with the defendant’s Convention right in prosecuting or entertaining the proceedings but only in failing to procure a hearing within a reasonable time.”
Lord Bingham cited with approval Martin v Tauranga District Court [1995] 2 NZLR 419 and in particular the judgment of Hardie Boys J where he observed: “The right is to trial without undue delay; it is not a right not to be tried after undue delay. Further, to set at large a person who may be, perhaps patently is, guilty of a serious crime, is no light matter. It should only be done where the vindication of the personal right can be achieved in no other satisfactory way.” The decision in Attorney General’s Reference (No 2 of 2001) (above) has been consistently followed.^{^[21]}
78. In A-G v Cheung Wai Bun [1994] 1 AC 1, [1993] 1 HKCLR 249, Lord Woolf, following the decision in Attorney General’s Reference (No 2 of 2001) (above), indicated that if there was a difference between the considerations at common law and with respect to a constitutionally guaranteed right, the circumstances in which it was likely to matter were very limited.
79. The decision in Attorney General’s Reference (No 2 of 2001) (above) was decided in the context of whether or not a stay of proceedings should be ordered. Undue delay in criminal proceedings is one of a number of bases upon which a stay of proceedings might be ordered. Indeed, it is clear from the passage cited above from Attorney General’s Reference (No 2 of 2001) that the general principles about the exceptional nature of a stay are of the order the grant of a stay of proceedings on that basis.
80. It is appropriate to note the nature of the remedy of stay of proceedings. Lee Ming Tee & Anor (above) stands for the proposition that the staying of criminal proceedings would only be justified in highly exceptional circumstances. A stay would be granted if, first, notwithstanding the range of remedial measures available, a fair trial for the accused was impossible and continuing the prosecution would amount to an abuse of process. Secondly, in very rare cases, a stay might be granted, although the fairness of the trial was not in question, because the circumstances involved an abuse of process which so offended the Court’s sense of justice and propriety that the entire prosecution was tainted as an abuse of process. What is critical is the reason why such a remedy is exceptional. Ribeiro PJ observed:^{^[22]}
“There are cogent reasons why in principle and in practice such stays are highly exceptional.
In the first place, it is only in very unusual circumstances that a court can properly be satisfied that a fair trial is ‘impossible’. The ‘fairness’ achievable is judged in practical and not absolute terms. As Brennan J pointed out in Jago v District Court of New South Wales (1989) 168 CLR 23 at p.49:
‘If it be said that judicial measures cannot always secure perfect justice to an accused, we should ask whether the ideal of perfect justice has not sounded in rhetoric rather than in law and whether the legal right of an accused, truly stated, is a right to a trial as fair as the courts can make it. Were it otherwise, trials would be prevented and convictions would be set aside when circumstances outside judicial control impair absolute fairness.’
More importantly, the court’s primary endeavour is to ensure that a fair trial takes place, employing the law’s available resources, and not to abort it on the ground that fairness cannot be attained, save as a last resort.”
Ribeiro PJ also cited^{^[23]} a passage from Lord Lowry in R v Horseferry Road Magistrates Court, ex p Bennett [1994] 1 AC 42 as follows:^{^[24]}
The discretion to stay is not a disciplinary jurisdiction and ought not to be exercised in order to express the court’s disapproval of official conduct. Accordingly, if the prosecuting authorities have been guilty of culpable delay but the prospect of a fair trial has not been prejudiced, the court ought not to stay the proceedings merely ‘pour encourager les autres.’”
81. In short, there is a high public interest in the fair determination of criminal proceedings – especially proceedings alleging serious criminality. That interest exists no less when considering to permit a third trial on an indictment where two previous juries have disagreed. Lord Bingham’s test in Bowe (above) based “on an informed and dispassionate assessment of how the interests of justice in the widest sense are best served.” It must surely include this aspect of the public interest. In my opinion the same is true in determining whether to order a retrial. Ma CJ in Zhou Limei (No 2) (above) said so.^{^[25]}”

20. It is to be noted that DHCJ Bruce had the advantage of hearing almost all the evidence to be adduced by the prosecution at the 2021 trial where D1 and D2 were respectively represented by the same legal team. He was in a better position to assess the impact of the failure of the witnesses’ memories on the fairness of the proceedings. In his judgement, DHCJ Bruce provided very detailed analysis (which I do not intend to repeat here) before concluding that the accused would be able to get a fair trial. I do not see any proper basis for me to deviate from his well-analysed reasoning.

21. To alleviate the possible memory failure due to the length of the time lapse, I have directed the prosecution to provide the witnesses with the transcript of their evidence in the previous proceedings including the preliminary inquiry. The defence were contended with this arrangement.

22. For the reasons mentioned in paragraphs 11-16 above, I also reject the further contention that the unavailability of the witnesses specified in Ground 1 would render a fair trial impossible.

Consideration of Ground 3

23. By this ground the defence made serious allegations about the conduct of the prosecution. It was alleged that the prosecution case was inconsistent with the core contemporaneous documents (“the Documents”) contained in the unused materials. Notwithstanding that the defence adduced the Documents into evidence through cross-examination of witnesses in the 2021 trial, the prosecution had never addressed how its case could be put consistently with them. The defence submitted that the maintenance of a prosecution case that was inconsistent with the Documents and contrary to the evidence of witnesses which the prosecution refused to call amounts to an abuse of process in breach of the law and the Prosecution Code.

24. Mr Mitchell for the prosecution rejected the allegation that the prosecution is attempting to present a case in direct conflict with the documents, pointing out that there is a clear danger in presenting the Documents out of context of other evidence. He referred to some of the evidence given by the main witnesses in the 2021 trial to contend that the prosecution case is consistent with the evidence of the witnesses and consistent with the key documents such as the agreement and the deed of undertaking.

25. I agree with Mr Mitchell that the significance of the Documents would have to be assessed in light of the evidence to be given by the witnesses. Without hearing evidence I am unable to say that the intended prosecution case is inconsistent with the context of the Documents. As such I am not satisfied that the defence had established on the balance of probabilities that this ground amounts to any abuse of process.

Conclusion

26. Having considered the whole circumstances, I am satisfied that this is not a case in which a fair trial would not be possible. This was not a proper case to stay these proceedings. The defence application to stay the proceedings was refused.

Postscript

27. These reasons are provided for the parties’ information only. The only part of this judgment which may be reported publicly are the above Conclusions. The remaining part of this judgment may not be reported until further order or until the conclusion of the trial.

	(Anna Lai)
	Judge of the Court of First Instance
	High Court

Mr Neil S Mitchell, Counsel-on-fiat, leading Miss Ng Oi Lam, Joycelyn, SPP of the Department of Justice, and Mr Li Chun Ngai, Martin, Counsel-on-fiat, for the Prosecution

Mr Tim Owen, K C, leading Mr Benson Y M Tsoi, instructed by Boase, Cohen & Collins, for the 1^st Accused

Mr Ian Winter, K C, leading Ms Betty Chiu, instructed by Haldanes, for the 2^nd Accused

The 3^rd Accused appeared in person

[Subject to Reporting Restrictions as per Paragraph 27 of this judgment]

[1] D3 was unrepresented at the hearing of the arguments. He fully adopted all the arguments raised on behalf of D1 and D2 by counsel acting on their behalf.

[2] (2001) 4 HKCFAR 133

[3] [2013] 5 HKC 390 at §84

[4] Trial-2 Transcript 8 June 2021 Day 58 pp.7-8, 15 - application by Ms Draycott for his witness summons.

[5] Trial-2 Transcript 15 June 2021 Day 61 p.7 – submissions by Miss Draycott SC to the Court.

[6] See also R v Joof [2012] EWCA Crim 1475.

[7] Trial-2 Transcript 25 June 2021 Day 63 pp.61-63

[8] Trial-2 Transcript 25 June 2021 Day 63 p. 105 L2-4

[9] Trial-2 Transcript 25 June 2021 Day 63 pp. 103-104

[10]R v Derby Crown Court (1984) Cr App R 164

[11]Tan v Cameron [1992] 2 HKLR 254, HKSAR v Lee Ming Tee & Another (2001) 4 HKCFAR 133, and HKSAR v Ng Chun To Raymond & Anor [2013] 5 HKC 390

[12] CACC 178/2010, [2013] 5 HKC 390, at paragraph 84

[13] Reasons for Ruling handed down on 15 June 2023: [2023] HKCFI 1669, at paragraphs 40-60

[14] At paragraphs 61-69

[15] At paragraphs 70-77

[16][2021] HKCFI 3567, at paragraphs 34-36

[17][2021] HKCFI 3567, at paragraphs 72-81

[18] See also Article 11(2)(c), Hong Kong Bill of Rights Ordinance which provides the same guarantee.

[19] (1989) 168 CLR 23, 60 & 61.

[20] [2003] UKHL 68, [2004] 2 AC 72, §24.

[21] Cases include: Spiers v Ruddy [2007] UKPC D2, [2008] 1 AC 873; Burns v HM Advocate (HM Advocate General for Scotland intervening) [2008] UKPC 63, [2009] 1 AC 720; HKSAR v Kissel (Stay: Media) [2011] 3 HKLRD 1, [2011] HKEC 439; HKSAR v Liang Yaoqiang [2021] HKEC 3139, [2021] HKCFA 26. It has been so followed in the civil context as well: Moore v Council of the Law Society of Scotland [2015] 12 WLUK 780.

[22] (2001) 4 HKCFAR 133, 150.

[23] (2001) 4 HKCFAR 133, 151.

[24] At pp 74-75

[25] (2020) 23 HKCFAR 169, §9 (1) & (3).

HCCC 309/2019

[2023] HKCFI 1683

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

________________________

BETWEEN
	HKSAR
and
	CHEN Keen	1^st Accused
	(alias Jack CHEN) (陳克恩)
	HAO May
	(formerly known as WANG May Yan)	2^nd Accused
	(alias May WANG)
	YEE Wenjye	3^rd Accused
	(also known as YU Wenjie)
	(alias Eric YEE)

________________________

Before:

Hon Anna Lai J in Chambers (Open to Public)

Date of Hearing:	2, 3, 4 and 9 May 2023
Date of Ruling:	13 June 2023
Date of Reasons for Ruling:	26 June 2023

______________________________

REASONS FOR RULING

______________________________

1. The following matters were jointly raised by the defence: [1]

(1) The requirement for legal certainty.
(2) 21 propositions advanced by the defence on the relevant rights and obligations of the parties under the various contractual documents and instruments.

2. On 13 June 2023 I gave my ruling on item (1), and informed parties that the matter raised in item (2) is to be determined after hearing of the evidence. I will now give my reasons.

Legal certainty

Defence submission

3. Mr Owen KC submitted that the Court of Final Appeal’s judgment in the case of Mo Yuk Ping v HKSAR^[2] establishes that in order to ensure compatibility with the principle of legal certainty, an indictment alleging conspiracy to defraud must be sufficiently precise for them to be lawful. The outcome of the Court of Final Appeal’s decision in the present case[3] held that the dishonest means pleaded in particulars (a) to (e) of Counts 1 and 2 in the original trial (“the 2016 trial”) were the dishonest means forming part of the respective conspiratorial agreements agreed upon by the accused.

4. It follows that for Counts 1 and 3, the Prosecution must prove that the accused agreed dishonestly (emphasis added):

(a) to falsely represent that that UBNZ Trustee Limited (“UBTL” also known as “UTCL”), UBNZ Funds Management Limited and their respective ultimate beneficial owners were independent third parties to China Jin Hui Mining Corporation Limited (“462”)and its connected persons, and/or,
(b) to falsely represent that there was no existing or prior relationship or understanding between the said D1 and the said D2 with respect to the acquisition…, and/or,
(c) to conceal or fail to declare that the said D1 and the said D2 were parties to the Commission Sharing Agreement (“the CSA”) for the purpose of causing the Stock Exchange of Hong Kong Limited (“SEHK”) and/or the 462 and its existing shareholders to allow the publication of the announcement and/or the circular and/or to approve the acquisition.

5. The defence contended that the pleaded particulars can only exist as dishonest means within the legal context of the Listing Rules, in particular, chapters 14 and 14A. It is therefore necessary to examine whether in the context of the Listing Rules’ legal framework, misrepresentations were made as a result of the actions of the accused in the announcement and the circulars. Mr Owen said it is not necessary to plead the Listing Rules specifically pleaded in the particulars because the language was derived from the Listing Rules, and the duty of the SEHK only exists in the context of the Listing Rules.

6. It was submitted that the misrepresentations in particulars (a) and (b) were derived from the Listing Rules, and that the prosecution have to prove that the acquisition was a “connected transaction” between “connected persons” within the meaning of the Listing Rules. In respect of particular (c), the defence submitted that there was no legal framework which requires such a duty of disclosure.

7. In her summing up to the jury at the 2016 trial, Pang J directed the jury as follows:

“… you may think for particulars (a) to (c), the core issue at the end of the day is whether [D1] and [D2] were or were not as alleged by the prosecution indeed working together to defraud 462 and the Stock Exchange by making those false representations and/or the deliberate concealments, rather than about any in depth interpretation of the Listing Rules, which Rules you may think are only part of the background of the events surrounding the acquisition.
… you have to bear in mind that this case is not about a breach of the disclosure requirement. For the conspiracy counts the breach of the Listing Rules is not the key. Even if you were to find that [D1] had breached the rule by not disclosing the agreement that breach alone is not sufficient to found any of the conspiracy counts.”

8. A similar argument had been raised before the Court of Appeal when the accused appealed against their convictions at the 2016 trial. The argument was rejected by the Court of Appeal.[4] Leave was granted by the Court of Final Appeal on this issue but no reasoned judgment was given because the convictions were quashed solely on the ground of duplicity. The defence submitted that the Court of Appeal’s approach to the pleaded particulars was fundamentally wrong.

9. Reference was made to a ruling given by Deputy High Court Judge Bruce SC on an application to exclude aspects of the proposed testimony of Mr William Wong and Ms Cindy Ngai (staff of the SEHK) in the retrial (“the 2021 trial”).[5] In that ruling DHCJ Bruce held that the duty of the SEHK is defined by a reference to the Listing Rules.

10. Reference was also made to a witness statement taken from Mr William Wong (staff of the SEHK) on 30 July 2012 in which he sets out why the alleged conduct would, in his view, engage chapters 14 and 14A of the Listing Rules and, in particular, the connected transaction rule. It was submitted that the statement supported the defence contention that the prosecution case was entirely Listing Rules based.

11. As to the prosecution’s assertion that the prosecution case has always been consistent, Mr Owen KC asked the prosecution to disclose all relevant material which casts light on the basis for the charging decision and the wording in the particulars. He relied on the following passage from the Court of Appeal’s judgment[6] to submit that leading counsel then acting for the prosecution has waived legal professional privilege on this matter:[7]

“337. Nor in the particulars of either conspiracy offence in the present case is there any mention of the term “connected transaction”. The averment in particular (a) refers to “China Jin Hui Mining Corporation Limited (“CJHM”) and its connected persons”. It was always the case that the 1st appellant was a “connected person” under the Listing Rules by virtue of his directorship of 462: that was never in issue, nor could it be. Ms Draycott’s position was that while “connected person” had the meaning ascribed to it under the Listing Rules, it did not mean that there had to be a “connected transaction”, nor was it the prosecution’s allegation that this was a “connected transaction” within Rule 14 of the Listing Rules. That was never averred in the indictment and it was never the prosecution case.” (emphasis added)

12. In answer to this Court’s query, Mr Owen clarified that he was not alleging that leading counsel for the prosecution deliberately lied to the Court of Appeal. He simply relied on the above passage to suggest that she had waived privilege.

13. On the other hand, Mr Owen said even if it was the case that the prosecution did not give any consideration to the Listing Rules at the time, it ultimately makes no difference because the only relevant legal context in which duties of disclosure capable of amounting to dishonest means could exist.

14. As to the three central themes the prosecution proposed to advance in the present trial (see below), the defence submitted that the phrase “working together” is an un-indicted phrase that is being used to replace the indicted words. It would be unlawful for the prosecution to present their case on the basis of an allegation that D1 and D2 concealing the fact that they were “working together”. No such dishonest means are pleaded. The prosecution wrongly maintained that “it is not necessary for the prosecution to prove any of these failures to disclose, they are simply matters which the jury may consider when considering the counts on the indictment.”

15. The Court was accordingly invited to rule that particulars (a) to (c) bear the following meanings:

(1) That D1 and D2 represented to 462 and the SEHK that they were independent of each other such that D2 was not a connected person as defined by the Listing Rules such that the provisions of chapter 14A of the Listing Rules were not engaged.
(2) That D1 and D2 represented to 462 and the SEHK that D2 was not a connected person by virtue of any existing or prior relationship or understanding between D1 and D2 with respect to the acquisition as defined by the Listing Rules such that D2 was not a connected person and the provisions of chapter 14A of the Listing Rules were not engaged.
(3) That D1 concealed or failed to disclose that he held an interest in the acquisition by virtue of the CSA, which agreement rendered D2 a connected person as defined by the Listing Rules.

16. Further submissions were made by Mr Winter KC to the effect that the Listing Rules are the fundamental basis upon which particulars (a) to (c) could be sustained. These representations were made by 462 and its lawyers in response to the enquiries specifically made about the terms of the Listing Rules. Besides, the public duty of the SEHK is defined in the Listing Rules. Hence the submission that the Listing Rules are irrelevant is unsustainable. Mr Winter emphasised that this is a Listing Rules case, and the dishonest means must be resolved in accordance with the definitions in the Rules.

Prosecution submission

17. In his submission, Mr Mitchell emphasised that the prosecution have never said that the Listing Rules are irrelevant. The prosecution’s stance is that they have significance in the sense that they do provide an explanation why certain things were done and why they were done in a certain manner, but they are not determinative of the pleaded particulars.

18. It was submitted that the ordinary meaning of the phrases in the particulars are matters for the jury, and no judicial interpretation is needed. The prosecution submitted that the rulings sought by the defence are not required, and in any event do not bear the meaning given to them by the defence. The Listing Rules may explain why certain things were done and why they were done in a certain way.

19. In the present trial, the prosecution would ask the jury to consider whether the representations were false against three central themes which run through this case:

(1) D1 and D2 were working together (in the sense they were working on the same side) to push the acquisition. The phrase “working together” means that they were working together on the same side, as opposed to being on opposite sides with D2 as the vendor and D1 as the director of 462. As such “working together” needs no further explanation or direction from the court.;
(2) D1 and D2 had manouvered themselves to be on the opposite sides with D2 as the vendor and D1 as a director and joint chair of 462. D1 being a director was in a position to influence 462 to proceed with the acquisition; and
(3) They had agreed to make dishonest gains from the VSA initially by agreeing to share the profit of the sale of the farms to 462. Later as this became problematic due to the stance taken by OIO this morphed into maximising their gains by various means which in turn severely compromised the interests of 462, its shareholder and investors.

20. It was also made clear by the prosecuting counsel that the basis of the prosecution case was very clear that D1 and D2 were “working together” dishonestly, effectively on the same side of the acquisition. This has always been the prosecution case.

21. Section 21 of the Securities and Futures Ordinance, Cap. 571 (“SFO”) imposes the duty to ensure an orderly informed and fair market. It is not necessary to engage the Listing Rules to establish the public duty of the Stock Exchange. There is also an onus on individual directors to provide the information to the SEHK.

22. As to a director’s duty, clause 3.08 of chapter 3 of the Listing Rules provides, inter alia:

“… The Exchange expects the directors, both collectively and individually, to fulfil fiduciary duties and duties of skill, care and diligence to a standard at least commensurate with the standard established by Hong Kong law. This means that every director must, in the performance of his duties as a director:
(a) Act honestly and in good faith in the interests of the company as a whole;
(b) Act for proper purpose;
(c) Be answerable to the listed issuer for the 2 application or misapplication of its assets;
(d) Avoid actual and potential conflicts of interest and duty;
(e) Disclose fully and fairly his interests in contracts with the listed issuer; and.
(f) Apply such degree of skill, care and diligence as may be reasonably expected of a person of his knowledge and experience and holding his office within the listed issuer.”

23. The director also has a fiduciary duty to the company to disclose any financial interest or conflict of interest, and to disclose fully and fairly his interest in contracts. One would reasonably expect directors of a company to apply such degree of skill, care and diligence as may be reasonably expected of him.

24. Mr Mitchell submitted that D1 was a “connected person” by reason of him becoming a director of 462. However the general definition of “connected person” is not exhaustive as the Listing Committee of the Stock Exchange has the power to exercise their own judgment to deem a person a connected person. While the phrase “connected person” has the meaning ascribed to it under the Listing Rules, Mr Mitchell said it does not mean that there had to be a “connected transaction” in this case, nor was it the prosecution’s allegation that this was a “connected transaction” within chapter 14A. That was never averred in the indictment and it was never the prosecution case.

25. Mr Mitchell submitted that the phrase of “independent third parties” in particular (a) is not defined in the Companies Ordinance (Cap. 32), the announcement or the Listing Rules. It is a phrase which is easily understood. This phrase was made by D1 and D2 at several stages without reference to any connected persons and transactions.

26. As for the phrase of “working together”, it arose from a letter of complaint alleging that D1 and D2 worked together from the office at 175 Queen’s Street and the office is property owned by D2. This is not a new phrase adopted by the prosecution in the 2016 trial.

27. As for the phrase of “no existing or prior relationship” in particulars (b), these were made by D1 and D2 in the context of their responses to SEHK’s enquiries.

28. There is no basis for reading in the Listing Rules into these particulars, Mr Mitchell submitted. The particulars do not include the words Listing Rules and they do not cite “connected person” or “connected transactions” which chapter 14A is concerned with. Nor do they originate from any Listing Rules relating to connected persons and transactions. Instead, the terms “independent third parties” and “no existing or prior relationship or understanding” bear their ordinary meaning.

29. Mr Mitchell stressed that the prosecution do not have to prove what D1 and D2 were required to disclose in respect of particulars (a) and (b). D1 was appointed as a director and joint chair of 462. The appointment brought with it his duty to act in the interests of 462, its shareholders and investors. He had a fiduciary duty to 462 to declare any financial interest he had in agreements to be entered into by 462. It also engaged his duty to the SEHK to be honest and truthful as a director.

30. Mr Mitchell submitted that in the present case, the particulars do not refer to the Listing Rules (unlike the case of HKSAR v Cheng Chee Tock Theodore (No. 2)[8]) and were not limited by them. The representations were not confined to the specific context of a connected transaction under chapter 14A. The pleaded particulars address D1 and D2’s failure to disclose their relationship with respect to the acquisition and the false representations they made about that relationship, irrespective of whether that relationship could have made the acquisition a connected transaction. It is not necessary to show that the acquisition was in fact a connected transaction.

31. Mr Mitchell disagreed that a claim for legal professional privilege was waived by the leading counsel for the prosecution at the Court of Appeal hearing, pointing out rightly that privilege rests with the ICAC and the Department of Justice.

Consideration

32. I disagree that this is a Listing Rules case as submitted by the defence. Unlike the case of Cheng Chee Tock Theodore which was expressly concerned with a “connected transaction” under the Listing Rules and the dishonest breach of associated disclosure duties under those Rules, the Listing Rules is never mentioned in any of the pleaded particulars on any of the four counts. Nor is there any mention of “connected transaction”. The only term referable to the Listing Rules is the reference to “[462] and its connected persons” in particular (a). It was always the case that D1 was a “connected person” under the Listing Rules upon his appointment as the director of 462.

33. Likewise, the phrases of “independent third parties” and “no existing or prior relationship or understanding” are not defined in the Listing Rules. They are just ordinary words that should be given their plain and ordinary meaning.

34. As one may note from the opening of the prosecution in the 2016 trial, it was and it remains the prosecution case that D1 and D2 “worked together” to defraud SEHK and 462. Again these are ordinary words which do not bear any special meaning. The case correspondence shows that they were the words used by a complainant and SEHK simply adopted and repeated the same when they raised the enquiry with 462. I consider that in the present trial, clarity and precision can be achieved by phrase of “working together on the same side” as proposed by Mr Mitchell.

35. As Mr Mitchell rightly pointed out, it is not the prosecution case that the Listing Rules are irrelevant. They are significant in the sense that they define the public duty of the SEHK and the director’s duty in a listed company, explain the SEHK enquiries, provide an explanation as to why certain things were done and why they were done in a certain manner. Nevertheless, they are only part of the background of the events surrounding the acquisition.

36. The defence had drawn my attention to what DHCJ Bruce said in a ruling given in April 2021 (see paragraph 9 above). My observation is that those comments were made at a relatively early stage of the trial without the benefit of hearing all the prosecution evidence including the cross-examination of the witnesses. To the contrary, he made the following observation with regard to this matter in giving his ruling on an application to stay of proceedings on 30 November 2021:[9]

“112. As to those arguments address to the Court of Appeal and rejected, a highly simplified version of the argument is as follows. The offence of conspiracy to defraud is while not of itself bad for legal certainty, it is capable in either the presentation of the prosecution case or in the manner of drafting the indictment or both to be bad for legal certainty. The contention of those representing the accused is that both the indictment and the presentation of that indictment in the present case is bad for legal certainty. The essence of the complaint is that in the context of the present circumstances, the only way that the prosecution case would not fail that test is if the terms of the Listing Rules qualified the nature of the false representations. I am not sure that I am in strict law bound by the views of the Court of Appeal but I am in respectful agreement with the analysis of the Court of Appeal on this topic. It seems to me that the arguments on this topic presented by those representing the defence introduce an air of unreality into what I consider to be a comparatively straightforward prosecution case. Those representing the accused have invoked Lord Steyn’s observation that in the law, context is everything. I agree. In the specific context of this case as it was presented the presentation and the indictment do not violate the strictures which require legal certainty.”

37. As to the defence submission that the witness statement of Mr William Wong (see paragraph 10 above) indicated that the ICAC/prosecution may have the Listing Rules in mind when the charges were drafted, it is to be noted that D1 and D2 were arrested and charged with the offence of conspiracy to defraud (and money laundering) in December 2010, about 19 months before the said statement was taken from Mr Wong. It is apparent that no reference was ever made to the Listing Rules in the particulars of the charges laid against the accused all along, before and after the taking of statement from Mr Wong.

38. I do not accept Mr Owen’s submission that leading counsel then acting for the prosecution had given any waiver of privilege in the Court of Appeal hearing.

39. For the aforesaid reasons, I consider it appropriate for the prosecution to base their case on the “working together on the same side” formula. I rule that the phrases pleaded in particulars in (a) to (c) should be given their ordinary plain meaning.

Conclusion

40. The particulars in the indictment are not limited to the context of the Listing Rules. As such, the prosecution are not required to prove that the acquisition was a “connected transaction” under the Listing Rules.

Propositions on contract terms

41. The defence put forward 21 legal propositions on the relevant rights and obligations on certain clauses in various contractual documents and instruments.

42. The prosecution did not accept the legal construction of those clauses provides an answer to the counts on the indictment. They also query the reason for having this exercise conducted in a vacuum before the Court hears any evidence. The prosecution had grave reservation about the interpretation advanced by the defence, pointing out that some of the propositions appear to be taking the matter out of context.

43. On the other hand, the defence submitted that those propositions are essential legal directions on the interpretation of the core documents. They confirmed that the directions may be given at the time of the summing up.

44. It appears somewhat surprising that should the interpretation be essential, how come none of them needed to be given in the 2016 trial? They should have been given even if there was no dispute between parties as to their correct interpretation. Furthermore, the defence told me that 9 out of those 21 propositions were intended to be raised during the no case to answer submissions in the 2021 trial. When I queried why the remaining 12 propositions were not required then, I was told that they did not arise until the defence see what Mr Mitchell intended to say about the conversion and the conversion shares in his opening note. However, those 12 propositions were not raised despite the fact that the same matter had also been mentioned by Ms Draycott in her opening speech.

45. In the circumstances I take the view that it would be more appropriate to consider those propositions after hearing the prosecution evidence. That would give me more insight into the nature of the documents and their interrelationship.

Conclusion

46. Interpretation of the contractual clauses relating to the 21 propositions to be determined after hearing of the (prosecution) evidence.

Postscript

47. These reasons are provided for the parties’ information only. The only part of this judgment which may be reported publicly are the above Conclusions. The remaining part of this judgment may not be reported until further order or until the conclusion of the trial.

	(Anna Lai)
	Judge of the Court of First Instance
	High Court

Mr Neil S Mitchell, Counsel-on-fiat, leading Miss Ng Oi Lam, Joycelyn, SPP of the Department of Justice, and Mr Li Chun Ngai, Martin, Counsel-on-fiat, for the Prosecution

Mr Tim Owen, K C, leading Mr Benson Y M Tsoi, instructed by Boase, Cohen & Collins, for the 1^st Accused

Mr Ian Winter, K C, leading Ms Betty Chiu, instructed by Haldanes, for the 2^nd Accused

The 3^rd Accused appeared in person

[Subject to Reporting Restrictions as per Paragraph 47 of this judgment]

[1] D3 was unrepresented at the hearing of the arguments. He fully adopted all the arguments raised on behalf of D1 and D2 by counsel acting on their behalf.

[2] (2007) 10 HKCFAR 386.

[3] FACC 26,27 and 28 of 2018, (2019) 22 HKCFAR 248.

[4] CACC 172/2016, [2018] HKCA 121, at paragraphs 329-351.

[5] Ruling given on 9 and 13 2021, written judgment handed down on 12 October 2021.

[6] At paragraph 337.

[7] Mr Winter KC, who was present at the hearing of the appeal, confirmed that no express waiver had been given by Ms Draycott SC at the hearing.

[8] FACC 7/2014, (2016) 19 HKCFAR 86.

[9] Ruling dated 30 November 2021, at paragraph 112.

HCCC 309/2019

[2023] HKCFI 1670

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

________________________

BETWEEN
	HKSAR
and
	CHEN Keen	1^st Accused
	(alias Jack CHEN) (陳克恩)
	HAO May
	(formerly known as WANG May Yan)	2^nd Accused
	(alias May WANG)
	YEE Wenjye	3^rd Accused
	(also known as YU Wenjie)
	(alias Eric YEE)

________________________

Before:

Hon Anna Lai J in Chambers (Open to Public)

Date of Hearing:	20, 21, 23, 24, 27 and 28 February 2023
Date of Ruling:	27 March 2023
Date of Reasons for Ruling:	23 June 2023

_______________________________

REASONS FOR RULING

_______________________________

Background

1. On 29 April 2016, the three accused (hereinafter referred to as “D1”, “D2” and “D3” respectively) were convicted on two counts of conspiracy to defraud contrary to common law after trial before Anthea Pang J, as Anthea Pang JA then was, and a jury (HCCC 83/2014, “the 2016 trial”). D1 was also convicted on a count of money laundering in respect of his dealing with the alleged proceeds of such conspiracies to defraud (Count 3). Their convictions were subsequently quashed by the Court of Final Appeal with a retrial ordered. The retrial was heard before Deputy High Court Judge Bruce SC and a jury in 2021. On Day 57 of the retrial, a prosecution witness gave unsolicited evidence which was prejudicial to the accused. Upon the defence application, DHCJ Bruce discharged the jury and the retrial was aborted as a result (HCCC 309/2019, “the 2021 trial”).

2. The second retrial is now scheduled to recommence on 3 July 2023. Prior to its commencement, the defence jointly raised a number of pre-trial matters[1] including (i) whether the indictment in its present form engaged the principle of double jeopardy; and (ii) whether the prosecution case consisted of certain unindicted allegations.

3. After hearing submissions in February 2023, I gave my ruling on the above matters on 27 March 2023. I will now give my reasons.

Double Jeopardy

Indictment

4. In HCCC 83/2014, Count 1 alleged a conspiracy to defraud the Stock Exchange of Hong Kong Limited (“SEHK”) and Count 2 alleged a conspiracy to defraud China Jin Hui Mining Corporation Limited, a company listed on the SEHK (stock code “462”) and its existing shareholders. The particulars of Count 1 alleged that the three accused, between 7 May 2009 and 8 September 2009, in Hong Kong, conspired together to defraud the SEHK by dishonestly:

“(a) falsely representing that [UTCL], [UBFM] and their respective ultimate beneficial owners were independent third parties to [462] and its connected persons;
(b) falsely representing that there was no existing or prior relationship or understanding between [A1 and A2] with respect to the acquisition of the entire issued share capital of [UBAH] by [462] from [UTCL] (“the Acquisition”);
(c) concealing or failing to declare that [A1] had an interest in the Acquisition, in that [A1 and A2] were parties to an agreement signed between them and Latitude Asia Limited dated the 8th day of October 2008 to share the commission arising from or received through the sale and purchase of the dairy farms owned by the CraFarms Group in New Zealand;
(d) falsely representing that the gross profit of the properties and fixed assets relating to dairy farms owned by the CraFarms Group in New Zealand (“the Properties”) for the year ended the 31st day of May 2009 was approximately $92,520,000 Hong Kong currency;
(e) concealing or failing to disclose the true financial position of the Properties.
(f) causing SEHK to allow the publication by [462] of the announcement dated the 4th day of June 2009 and the circular dated the 8th day of September 2009 in relation to the Acquisition which contained the false representations as aforesaid.”

5. The Statement of Offence and the parties to the conspiracy specified in Count 2 were the same as in Count 1. It was alleged that the three accused, between 7 May 2009 and 19 July 2010, in Hong Kong, conspired together to defraud 462 and its existing shareholders by dishonestly making the same false representations and effecting the same concealments and non-disclosures as those set out in Particulars (a) to (e) in Count 1. Particulars (f) and (g) of Count 2 alleged as follows:

“(f) causing [462] and its existing shareholders to approve the agreement for the Acquisition;
(g) causing [462] to issue and release convertible notes and an optional bond for the payment of the Acquisition.”

6. The accused’s convictions were quashed by the Court of Final Appeal[2] on the ground that each of Counts 1 and 2 alleged two conspiracies with different agreed dishonest means in a single count. A retrial was ordered with the prosecution being at liberty to amend the indictment or to prefer a fresh indictment.

7. On the fresh indictment (HCCC 309/2019), the conspiracy charges in Counts 1 to 4 provide as follows:

“ Count 1: Particulars of Offence
CHEN Keen (alias Jack CHEN) and HAO May (formerly known as WANG May Yan) (alias May WANG), between the 7th day of May 2009 and the 8th day of September 2009, both dates inclusive, in Hong Kong, conspired together to defraud the Stock Exchange of Hong Kong Limited (“SEHK”) by dishonestly:
(a) falsely representing that UBNZ Trustee Limited (“UBTL” also known as “UTCL”), UBNZ Funds Management Limited and their respective ultimate beneficial owners were independent third parties to China Jin Hui Mining Corporation Limited (“CJHM”) and its connected persons;
(b) falsely representing that there was no existing or prior relationship or understanding between the said CHEN Keen and the said HAO May with respect to the acquisition of the entire issued share capital of UBNZ Assets Holdings Limited by CJHM from UBTL (“the Acquisition”);
(c) concealing or failing to declare that the said CHEN Keen had an interest in the Acquisition, in that the said CHEN Keen and the said HAO May were parties to an agreement signed between them and Latitude Asia Limited dated the 8th day of October 2008 to share commission arising from or received through the sale and purchase of dairy farms owned by the CraFarms Group in New Zealand;
(d) causing SEHK to allow the publication by CJHM of the announcement dated the 4th day of June 2009 and the circular dated the 8th day of September 2009 in relation to the Acquisition which contained the false representations as aforesaid.
Count 2: Particulars of Offence
CHEN Keen (alias Jack CHEN), HAO May (formerly known as WANG May Yan) (alias May WANG) and YEE Wenjye (also known as YU Wenjie) (alias Eric YEE), between the 7th day of May 2009 and the 8th day of September 2009, both dates inclusive, in Hong Kong, conspired together to defraud the Stock Exchange of Hong Kong Limited (“SEHK”) by dishonestly:
(a) falsely representing that the gross profit of the properties and fixed assets relating to dairy farms owned by the CraFarms Group in New Zealand (“the Properties”) for the year ended the 31st day of May 2009 was approximately $92,520,000 Hong Kong currency;
(b) concealing or failing to disclose the true financial position of the Properties;
(c) causing SEHK to allow the publication by China Jin Hui Mining Corporation Limited (“CJHM”) of the circular dated the 8th day of September 2009 in relation to the acquisition of the entire issued share capital of UBNZ Assets Holdings Limited by CJHM from UBNZ Trustee Limited.
Count 3: Particulars of Offence
CHEN Keen (alias Jack CHEN) and HAO May (formerly known as WANG May Yan) (alias May WANG), between the 7th day of May 2009 and the 19th day of July 2010, both dates inclusive, in Hong Kong, conspired together to defraud China Jin Hui Mining Corporation Limited (“CJHM”) and its existing shareholders by dishonestly:
(a) falsely representing that UBNZ Trustee Limited (“UBTL” also known as “UTCL”), UBNZ Funds Management Limited and their respective ultimate beneficial owners were independent third parties to CJHM and its connected persons;
(b) falsely representing that there was no existing or prior relationship or understanding between the said CHEN Keen and the said HAO May with respect to the acquisition of the entire issued share capital of UBNZ Assets Holdings Limited by CJHM from UBTL (“the Acquisition”);
(c) concealing or failing to declare that the said CHEN Keen had an interest in the Acquisition, in that the said CHEN Keen and the said HAO May were parties to an agreement signed between them and Latitude Asia Limited dated the 8th day of October 2008 to share the commission arising from or received through the sale and purchase of dairy farms owned by the CraFarms Group in New Zealand;
(d) causing CJHM and its existing shareholders to approve the agreement for the Acquisition;
(e) causing CJHM to issue and release convertible notes and an optional bond for the payment of the Acquisition.
Count 4: Particulars of Offence
CHEN Keen (alias Jack CHEN), HAO May (formerly known as WANG May Yan) (alias May WANG) and YEE Wenjye (also known as YU Wenjie) (alias Eric YEE), between the 7th day of May 2009 and the 19th day of July 2010, both dates inclusive, in Hong Kong, conspired together to defraud China Jin Hui Mining Corporation Limited (“CJHM”) and its existing shareholders by dishonestly:
(a) falsely representing that the gross profit of the properties and fixed assets relating to dairy farms owned by the CraFarms Group in New Zealand (“the Properties”) for the year ended the 31st day of May 2009 was approximately $92,520,000 Hong Kong currency;
(b) concealing or failing to disclose the true financial position of the Properties;
(c) causing CJHM and its existing shareholders to approve the agreement for the acquisition of the entire issued share capital of UBNZ Assets Holdings Limited by CJHM from UBNZ Trustee Limited (“the Acquisition”);
(d) causing CJHM to issue and release convertible notes and an optional bond for the payment of the Acquisition.”

Defence submission

8. The defence submitted that the indictment of HCCC 309/2019 in its present form would infringe the rule against double jeopardy given that particulars (a)-(c) in Count 1 are identical to those in Count 3, and particulars (a)-(b) in Count 2 are identical to those in Count 4. These “twin charges” allege an agreement to use exactly the same dishonest means commencing on exactly the same date, the only difference being the intended victim. It follows that the accused could not lawfully be convicted of the twin charges unless the jury are sure that the conspiracy in Count 3/Count 4 was a separate conspiracy from that in Count 1/Count 2.

9. Reference was made to the case of R v Ali (Ahmed) and Others[3] where the indictment included counts both for conspiracy to murder persons unknown (count 1A) and for conspiracy to commit such murders by the detonation of IEDs on board transatlantic passenger aircraft (count 1). An issue arose as to whether some of the defendants might only have agreed to commit murder on a smaller scale and by different methods, albeit that the proposed substantive offence would be the same in each case. In that case the English Court of Appeal held:[4]

“It is not permissible to put into an indictment an alternative factual basis which makes no difference to the offence committed whether it is for the purpose of enabling a jury to decide an issue of fact or for any other purpose. The judge must resolve the factual issues which are material to sentencing if the offences are the same; in limited circumstances, the judge may ask the jury a specific question.”

10. In the case of Ali, the court was nevertheless satisfied that the indictment addressed two distinctively different agreements as to the method and scale of the murder to be carried out. The two counts were different in fact and in law for the purpose of autrefois convict.

11. The principle in Ali was applied by the English Court of Appeal in SFO v Papachristos.[5]

12. The defence argued that the present case involves one single agreement to defraud two different victims. The mere existence of two alleged victims does not establish by and of itself the existence of two separate conspiracies. There is no evidential basis upon which the jury could conclude that both of Counts 1 and 3 and both of Counts 2 and 4 were committed on the basis of four distinct conspiracies. The current indictment is therefore defective as it gives rise to double jeopardy.

13. The defence proposed, for the sake of simplicity and clarity, either the jury be discharged from giving a verdict on Count 3/Count 4 once a verdict is returned on Count 1/Count 2. An alternative would be for the prosecution to elect to proceed with which of Counts 1 and 3, and which of Counts 2 and 4, the other Counts being withdrawn from the jury.

14. In his submissions Mr Owen KC suggested the prosecution to proceed with Count 1 and Count 4 only. He said Count 3 could be withdrawn because the economic interests of 462 were not endangered by the same false representations to the SEHK alleged in Count 1. Likewise, Count 2 could be withdrawn because the SEHK was not defrauded into failing to discharge its public duty by the pleaded particulars in Count 4.

Prosecution submission

15. Mr Mitchell submitted that the issue of double jeopardy does not arise. The objects of the conspiracies are clearly distinct, not only in terms of the intended victim but also in terms of the state of affairs to be intended. They also have different end dates. Hence the finding of guilt on each count is independent. Further, the prosecution are not required to prove each of the particulars in each count such that a jury could find an accused guilty on different counts and in respect of different particulars.

16. Mr Mitchell contended that the deceit against 462 and the deceit against SEHK represented two interlocking but distinct steps to ensure that the acquisition could take place. The deceit against 462 had to take place in order for the deceit against the SEHK to follow:

(1) 462 would have to be deceived into believing that D1 and D2 were independent of each other before agreeing to the announcement/circular being sent for approval to the SEHK.
(2) The SEHK would then have to be deceived into believing that the contents of the announcement/circular including the financial information were true (in the context of questions raised and answered by 462 and D2) before granting approval, thus opening the way for 462 to approve the acquisition and for the issue of the convertible notes.

17. As for the dishonest means intended and used between Counts 1 and 3 and those between Counts 2 and 4, Mr Mitchell said they were different in the following respects:

(1) The dishonest means intended and used for Counts 3 and 4 included the final announcement and circular. The end date was extended until 462 issued and released the convertible notes and an optional bond for the payment of the acquisition. For Counts 1 and 2, the dishonest means intended and used ended before the publication of the announcement and circular. They ended once the SEHK have completed their enquiries and received the responses in respect of the draft announcement and the circular. The consequence was the publishing of the final announcement and circular, that being the object intended by those conspiracies.
(2) The dishonest means in Count 3 included D1 concealing his interest in the acquisition at 462’s board of directors meeting where they approved the acquisition. This was not a dishonest means in Count 1 as this was an instance of concealment from 462, not from SEHK.
(3) In its judgment[6] the Court of Appeal identified the emails copied to D1 which illustrated how D3 was dishonestly preparing the false accounts to be prepared and forwarded to ShineWing and to be relied upon by 462. This was stage 1 (Count 4). Stage 2 was the publication in the circular which invoked the public duty of the SEHK in examining and vetting that circular, which was an entirely different matter (Count 2).

18. Regarding the authorities relied upon by the defence, Mr Mitchell submitted that the case of Ali supports the prosecution’s position. In that case the court emphasised the necessity to focus on whether there was a different agreement alleged in separate counts. The court was satisfied that count 1 alleged an infinitely more serious and sophisticated agreement than that of count 1A. Notwithstanding that all the defendants were party to both agreements, and notwithstanding the possibility of charging one single conspiracy to murder, the court concluded that it was appropriate to allege and charge two separate conspiracies.

19. Mr Mitchell said the case of Papachristos is distinguishable. There the court was concerned with the fairness of adding a second count which did not allege a different or separate conspiracy. In other words, both counts in that case alleged the same common purpose. Whereas in the present case, the prosecution are not alleging the same common purpose.

20. In respect of the defence suggestion for the prosecution to reduce the current four counts to two counts, Mr Mitchell disagreed, pointing out that most of the issues pertinent to the current four counts would be equally pertinent to just two counts.

Consideration

21. I should point out that a similar argument had been raised by the accused in their appeal against convictions in HCCC 83/2014. In that appeal, it was contended that the same fraud was prosecuted twice because the particulars in both counts were identical. The argument was rejected by the Court of Appeal for the following reasons:[7]

“40. No fewer than twelve grounds of appeal against conviction were advanced by Mr Winter QC on behalf of the 2^nd appellant. …
42. Ground 3 and Ground 7 criticised the judge for failing to separate and distinguish the two conspiracies alleged in Count 1 and Count 2 in that:
…
(b) The alleged conspiracy to defraud the SEHK was but a necessary part of defrauding 462.
(c) Count 2 (conspiracy to defraud 462) should have been particularised according to the prosecution’s actual case. Instead, it was premised on particulars that were copied directly from Count 1 (conspiracy to defraud the SEHK). As a result, the same fraud was prosecuted twice.
(d) This offended the doctrine of autrefois acquit or convict, with the consequence that the judge should have either compelled the prosecution to amend its allegations as regards Count 2 or withdrawn it from the jury.
(e) The judge did neither. On the contrary, she directed the jury wrongly that the frauds in Count 1 and Count 2 were effectively the same, their only difference being in the dates, the identity of the alleged victim and the consequences intended. This rendered the 2^nd appellant’s conviction on Count 2 unsafe.
…
92. The prosecution case was that the defendants agreed together to use dishonest means to ensure that the SEHK would allow 462 to publish an announcement and a circular concerning the Acquisition (Count 1). Once the SEHK had done that, the way was clear for 462 and its existing shareholders to be caused to approve the Acquisition and for 462 to issue convertible notes (Count 2). Without the SEHK’s approval of the announcement and circular in respect of a very substantial acquisition, the Acquisition could not have taken place. Counts 1 and 2 represented two distinct steps in the process of the Acquisition and were properly indicted as separate conspiracies. …
94. Furthermore, we accept that Counts 1 and 2 were separate but related conspiracies, in that the achievement of the objects of the first conspiracy was a step to achieving the ultimate purpose, which was the object of the 2^nd conspiracy. Accordingly, the prosecution was entitled to prefer two separate counts on the indictment. We do not accept that there is any merit in Mr Winter’s submissions that there was an improper mirror‑imaging of the conspiracies in Count 1 and Count 2.”

22. I am in respectful agreement with the analysis of the Court of Appeal on this matter.

23. In the present case, it is apparent that the objects of the conspiracies alleged in Counts 1-4 were distinct steps in the process of the acquisition. The achievement of the object of Count 1 was a step to achieving the ultimate object (462 approving the acquisition and to issue convertible notes for its payment) which was the object of Count 3. Likewise, the achievement of the object of Count 2 was a step to achieving the object of Count 4.

24. I am satisfied that the current Counts 1-4 are four related but separate conspiracies representing distinct steps to defraud different alleged victims. As such the prosecution are entitled to proceed with these four counts on the indictment.

Conclusion

25. The defence submission that the current form of the indictment infringes the rule against double jeopardy is rejected.

The unindicted allegations

26. The defence sought a ruling that it is not permissible for the prosecution to rely on certain allegations in connection with the following eight items on the ground that they are unindicted allegations:

(1)     Ownership of the farms: the prosecution alleged that D2, assisted by D1, lied about the ownership of the farms or at least held the exclusive right to purchase them such that the prospective purchaser could only buy the farms through them.
(2)    D2 was working together with D1: the prosecution alleged that D1 portrayed to PW1 that he and D2 were independent, and he was just an introducer. D1 therefore concealed from PW1 that he and D2 were working together, and the fact that they intended to share the profits and the Commission Sharing Agreement (“CSA”) which meant he would earn commission on the sale of the farms.
(3)     D2 refused to provide the valuation of the farms to Ms Katherine Chan (“PW1”): the prosecution alleged that following their first meeting in which D2 talked in vague terms about the farms, PW1 tried to get from D2 valuations of the farms but D2 failed to respond. This allegation was based on the evidence of PW1.
(4)     D1’s breach of statutory duty: the prosecution alleged that as a director of 462, D1 did not disclose to the board of directors the fact that he was working together with D2; he did not disclose the fact that he would profit from the transaction; and he did not disclose the CSA. As such D1 breached the statutory duty in section 162 of the Companies Ordinance, Cap. 32 (since been repealed) which required disclosure by directors of material interests in contracts with the company.
(5)     Falsification of the accounts for the year ending 31 May 2009: the prosecution alleged that D2, with the help of D3, falsified the farm accounts for the year ending 31 May 2009. D1 knew about this because he was copied into the emails in which different sets of accounts were passing between D2 and D3.
(6)     Sharing of profits by D1 and D2: it was alleged in the 2021 trial that D1 and D2 intended to share the profits from this deal.
(7)     PW1 did not know that Messrs Knight Coldicutt, the New Zealand solicitors, represented D2: this allegation was based on the evidence of PW1 that she did not know about this matter.
(8)     That the NZ$51.6 million paid to D2 was separate dishonest act: the prosecution alleged that there had been unauthorized transfer of the money to D2 and, in turn, in part to D1.

27. In respect of item (1), Mr Winter KC contended that this is fundamentally untrue. He said that at the very first time D2 met PW1 in the presence of D1, D2 made a PowerPoint presentation setting out the nature of this deal including the ownership of the farms. Subsequent email exchange also indicated that PW1 clearly understood that the farms were owned by the CraFarms, not D2.

28. In respect of item (2), Mr Winter contended that “working together” cannot be defined. D1, D2 and PW1 had been working extremely hard together to put this deal in place. Therefore all of D1, D2 and PW1 were working together on any level. So working together must mean something else.

29. Mr Mitchell submitted that “working together” is a general phrase which has no special meaning. There is nothing unusual about this phrase as co-conspirators would be working together to achieve the objects. He pointed out that this phrase was actually used in connection with one of the complaints (that D1 and D2 had been working together out of the premises in Auckland) forwarded by the SEHK. It was part of a whole series of questions raised by the SEHK, and they all tied up with the responses which were given by 462 on the representations made by D1 and D2.

30. In respect of item (3), Mr Winter said this is an untrue allegation. He said the documents written at that time clearly demonstrate that D2 did provide the valuation for the farms.

31. Mr Winter objected to item (4) as an allegation of a different crime which was unindicted, whereas Mr Mitchell argued the fiduciary duties of D1 as a director and chief executive officer of 462 have long been recognised in law.

32. In respect of item (5), Mr Winter contended that this allegation was based on a complete misunderstanding of the corporate fundamental difference between the UBNZ companies and the New Zealand farm companies. The only accounts that D2 would produce would be assumed basis account of UBNZ because UBNZ had never owned or run farms. Nonetheless it had nothing to do with D1.

33. In respect of item (6), Mr Winter argued that if this was a fraud that D1 and D2 would split the proceeds of the difference between the two purchase prices, they should have been so indicted a long time ago. Mr Mitchell was unclear as to how this became an allegation in the 2021 trial, but he observed that invariably frauds are perpetrated to achieve some financial gain.

34. In respect of item (7), Mr Winter contended that the allegation is untrue. Not only did PW1 know that, she specifically asked D2 to provide the name of the solicitor in New Zealand that she was already using, which D2 did.

35. In respect of item (8), it was the case of D1 and D2 that the NZ$51.6 million was part-payment of the share sale consideration price required under the original contract. So, D2 had the right to dispose of those monies as she chose. The defence accepted that the mere fact of the release of the money is admissible because it is alleged to be part of the intended result of the fraud, but it cannot be admitted as separate dishonesty.

36. To this regard Mr Mitchell said the prosecution would not allege separate dishonesty but would regard the payment to D2 and the division by her between the purchase of the four farms as evidence of dishonesty of both D1 and D2, and evidence that they had been and continued to be working together to share the profit in the price difference between the purchase of the farms from the Crafars and the sale to 462.

37. As for the remaining items (1), (3), (5) and (7), Mr Mitchell said that would simply be a matter of evidence.

38. The prosecution’s position was that all these matters were part and parcel of the whole scenario of events which are the substance of the charges on the current indictment. There is no reason why they should not be put before the jury.

39. I agree that the alleged items are matters of evidence and there is no proper basis for me not to permit the prosecution to make the allegations properly based on th e evidence. Whether they are accepted by the jury is a matter solely for them.

40. In respect to the NZ$51.6 million transfer, I respectfully agree with DHCJ Bruce in his ruling on the accused’s application for stay of proceedings that “the issue of whether the payment was unauthorised … certainly, if true, strengthened the prosecution case to a very substantial degree.”[8]

41. For the above reasons I rule that the prosecution are entitled to rely on the aforesaid allegations.

Conclusion

42. The defence submission in relation to the unindicted allegations is rejected.

Postscript

43. These reasons are provided for the parties’ information only. The only part of this judgment which may be reported publicly are the above Conclusions. The remaining part of this judgment may not be reported until further order or until the conclusion of the trial.

(Anna Lai)
Judge of the Court of First Instance
High Court

Mr Neil S Mitchell, Counsel-on-fiat, leading Miss Ng Oi Lam, Joycelyn, SPP of the Department of Justice, and Mr Li Chun Ngai, Martin, Counsel-on-fiat, for the Prosecution

Mr Tim Owen, K C, leading Mr Benson Y M Tsoi, instructed by Boase, Cohen & Collins, for the 1^st Accused

Mr Ian Winter, K C, leading Ms Betty Chiu, instructed by Haldanes, for the 2^nd Accused

The 3^rd Accused appeared in person

[Subject to Reporting Restrictions as per Paragraph 43 of this judgment]

[1] D3 was unrepresented at the hearing of the arguments. He fully adopted all the arguments raised on behalf of D1 and D2 by counsel acting on their behalf.

[2] FACC 26, 27 and 28 of 2018, (2019) 22 HKCFAR 248

[3] [2011] 2 Cr App R 22

[4] at paragraph 37

[5] [2014] EWCA Crim 1863

[6] CACC 172/2016, [2018] HKCA 121

[7] [7] CACC 172/2016, [2018] HKCA 121, at paragraphs 40, 42, 92 and 94

[8] HCCC 309/2019, [2021] HKCFI 3567, at paragraph 115

HCCC 309/2019

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

________________________

BETWEEN
	HKSAR
and
	CHEN Keen	1^st Accused
	(alias Jack CHEN) (陳克恩)
	HAO May
	(formerly known as WANG May Yan)	2^nd Accused
	(alias May WANG)
	YEE Wenjye	3^rd Accused
	(also known as YU Wenjie)
	(alias Eric YEE)

________________________

Before:

Hon Anna Lai J in Chambers (Open to Public)

Date of Hearing:	20, 21, 23, 24, 27 and 28 February 2023
Date of Ruling:	27 March 2023
Date of Reasons for Ruling:	15 June 2023

______________________________

REASONS FOR RULING

______________________________

Background

1. On 29 April 2016, the accused (hereinafter referred to as “D1”, “D2” and “D3” respectively) were convicted of various counts on an indictment after a lengthy trial before Anthea Pang J, as Anthea Pang JA then was, and a jury (“the 2016 trial”). Their convictions were subsequently quashed by the Court of Final Appeal with a retrial ordered. The retrial was heard before Deputy High Court Judge Bruce SC and a jury in 2021. On Day 57 of the retrial, a prosecution witness gave unsolicited evidence which was prejudicial to the accused. Upon the defence application, DHCJ Bruce discharged the jury and the retrial was aborted as a result (“the 2021 trial”).

2. The second retrial was scheduled to recommence on 2 May 2023 with 100 days reserved. The defence contended that this case was not ready for trial as a number of pre-trial matters including a second application for permanent stay of the proceedings need to be resolved prior to its commencement. Also the position of D3’s legal representation remains uncertain until the Court of Final Appeal reaches a decision on a costs order arising from the 2021 trial[1]. Periods of time were set aside to deal with the pre-trial arguments. The retrial is now fixed to commence on 3 July 2023.

Matters raised

3. Some of the matters jointly raised by the defence in the first round of the pre-trial arguments[2] which require resolution are:

(1)     Status of the previous rulings of Pang J in the 2016 trial and DHCJ Bruce in the 2021 trial.
(2)     The defence be permitted to make a joint opening speech immediately after the prosecution opening.
(3)     The prosecution be required to call or tender Messrs Nicholas John Cross and Kerry Joel Knight as prosecution witnesses.
(4)     The prosecution to confirm whether Messrs Wu Wing Kit and Navin Aggrawal would be called as prosecution witnesses.
(5)     Admissibility of the evidence of Mr David Wiltshire.

4. After hearing submissions in February 2023, I gave my ruling on the above matters on 27 March 2023. I will now give my reasons.

Status of the previous rulings

Defence submission

5. The defence submitted that it is the convention in England and Wales that rulings given by a first instance court in the same case are binding on the parties at a retrial unless the rulings can be shown to be clearly wrong. Contending that this convention also applied in Hong Kong, the defence invited this Court to order that all the rulings of Pang J in the 2016 trial and all the rulings of DHCJ Bruce in the 2021 trial should be binding on parties save for two rulings which the defence sought to overrule: (i) the ruling of Pang J in relation to the obligation to disclose the Commission Sharing Agreement[3]; and (ii) Pang J’s direction to the jury that it was sufficient to sustain that D1 and D2 were ‘working together’ in some unspecified way.

6. Pointing out that the law should generally be certain and consistent, Mr Owen KC submitted that there was a clear body of case law which confined the ability of a judge of coordinate jurisdiction to depart from earlier rulings. He referred to the following ruling of Deputy High Court Judge Louis Blom-Cooper QC in the English case of R v Hertsmere BC ex p. Woolgar[4]:

“A court is, other than exceptionally, bound to follow the previous decisions of its own as well as those of courts of co-ordinate jurisdiction. The only exceptions are: 1. The court is entitled and bound to decide which of two conflicting decisions of its own will follow (That does not apply here): 2. The court is bound to refuse to follow a decision of its own which, though not expressly overruled, cannot stand with a decision of a higher court (That, too, is not applicable here; there has been no judicial ruling by the Court of Appeal on section 72). 3. The court is not bound to follow a decision of its own, if it is satisfied either that the decision was given per incuriam, or it is convinced that the earlier decision was wrong. …
There is no distinction, jurisdictionally, to be made between a deputy High Court judge and the real thing, a High Court judge.…
The exception to the rule of precedent was stated, and never doubted, nearly half a century ago by Lord Goddard C.J. in Huddersfield Police Authority v Watson [1947] K.B. 842:
“I think the modern practice is that a judge of first instance, although, as a matter of judicial comity, he would usually follow the decision of another judge of first instance, unless he was convinced that the judgment was wrong, certainly is not bound to follow the decision of a judge of equal jurisdiction”.” (emphasis added)

7. Reference was also made to the principle of precedent stated by the English Court of Criminal in R v Rowe[5]: “the liberty of the Criminal Division to depart from precedent which it was convinced was erroneous was restricted to cases where the departure was in favour of the accused.”

8. According to Mr Owen, the threshold test is that the previous decisions of a court of coordinate jurisdiction should only be departed from if the decision is clearly wrong, as held by Hartmann J (as he then was) in Building Authority v Appeal Tribunal (Buildings)[6]:

“… It is a judgment given at first instance and is not therefore binding upon this Court. It is nevertheless persuasive authority, one from which I will only reluctantly dissent if I am satisfied that it was clearly wrong. Burrell J has summarized the applicable principles in Building Authority v Business Rights Ltd [1999] 3 HKC 247 (at 251):
‘It is trite to observe at the outset that this court is not bound by Gall J’s decision. However it would be wrong to give an opposing judgment merely because this court held a different opinion. I refer to two short statements which amply clarify the position. Firstly from Denning J, as he then was, in Minister of Pensions v Higham [1948] 2 KB 153, where he says (at 155):
... They [previous decisions] are not absolutely binding on the Superior Court itself or on the courts of co-ordinate jurisdiction but will be followed in the absence of strong reason to the contrary ...
and Lloyd LJ in R v Central Criminal Court, ex p Francis & Francis (a firm) [1988] 2 WLR 627 at 633:
This court is always reluctant not to follow its previous decisions. But if we are persuaded that a previous decision is clearly wrong, we are bound to say so ...’” (Emphasis added)

9. Mr Owen pointed out that most of the previous rulings given by Pang J and DHCJ Bruce were considered written rulings. He said this Court should follow the “Hartmann threshold test” to conclude that all the previous rulings of Pang J and DHCJ Bruce are binding on parties unless they were clearly wrong.

Prosecution submission

10. Mr Mitchell accepted there was some force for the defence to base their argument on the principle of certainty in law. However, it does not follow that the convention in England and Wales is necessarily applicable to Hong Kong, an entirely independent and separate legal jurisdiction with its own set of laws, practices, procedures and convention.

11. Mr Mitchell submitted that where a retrial is ordered by the appeal court in Hong Kong, rulings made at the previous trial are not necessarily binding at the retrial. This is because the previous rulings were made in the context of the proceedings (including any evidence presented up to the date of the ruling) as was then before the presiding judge. Depending upon the circumstances, it is open for the trial judge to revisit those rulings at any time prior to the verdict. It would therefore be wrong for this Court to simply adopt the previous rulings without being satisfied that they are correct in the present circumstances.

12. Having said that, Mr Mitchell clarified that the prosecution generally accepted the rulings made by both Pang J and DHCJ Bruce save and except (i) the ruling of DHCJ Bruce permitting the defence to make an opening statement immediately after the prosecution opening[7]; and (ii) the rulings of DHCJ Bruce inviting the prosecution to call Messrs Cross[8] and Knight[9] as prosecution witness. He submitted that the former ruling was wrong in the context of the well-established practice and procedure in Hong Kong, whereas the invitation to call Messrs Cross and Knight should not be followed in light of what happened as a result of the invitation.

Consideration

13. I should state at the outset that I do not consider the cases relied upon by the defence support their proposition that all the rulings given by a first instance judge in a criminal trial are binding at the retrial unless they are clearly wrong. The English case of R v Hertsmere BC ex p. Woolgar was an application for judicial review in which the deputy High Court judge was exercising the supervisory jurisdiction of the High Court over inferior courts and tribunals. Similarly, the case of Building Authority v Appeal Tribunal (Buildings) was also an application for judicial review. The case of R v Rowe involved the doctrine of precedent applicable to the Criminal Division of the English Court of Appeal. None of these cases discussed the binding effect of rulings made by a first instance judge in a criminal trial.

14. I agree with Mr Mitchell that the rulings of a judge in a criminal trial are made in the context of the proceedings before him. The judge in a criminal trial may need to rule on a variety of matters. For instance, some rulings may involve points of law; some may involve a mixture of law and facts; some on procedural arrangement; some on the exercise of discretion; and some may involve assessment of the weight of evidence or the credibility of witnesses. Depending on the circumstances, the trial judge is entitled to review his earlier ruling in light of new evidence to ensure that the trial is just and fair. It follows that in the case of a retrial, the judge may need to consider the suitability of the previous rulings in light of the prevailing circumstances of the retrial.

15. It is trite that this Court is not bound by the decisions of a court of coordinate jurisdiction. The decisions made by a judge of first instance do not bind the other first instance judges, and there is certainly no obligation on the other judges to follow them. The same applies in the case of a retrial. The decisions in the earlier trial do not create a precedent, and the judge is not bound to follow them at the retrial. This is not to say that they should be disregarded altogether. They are of persuasive value and may deserve due attention in the circumstances of the retrial.

16. In the present case, save for the matters specified in paragraphs 4 and 11 above, both parties are contented to follow generally the previous rulings by Pang J and DHCJ Bruce in the earlier trials. No doubt parties are better placed to consider the appropriateness of those rulings. There is no reason for me to doubt the correctness of those rulings. I would therefore adopt and follow those rulings insofar as they are applicable to the forthcoming trial.

Conclusion

17. The previous rulings of Pang J and DHCJ Bruce are not binding on this Court at the retrial.

Defence opening

Defence submission

18. The defence made an application for the giving of a joint opening speech immediately after the prosecution opening, pointing out that they were allowed to do so by DHCJ Bruce at the 2021 trial. No written reason was given by DHCJ Bruce but he explained to the jury in the following terms[10]:

“… That is actually quite unusual for the defence to get to say something to you like that at this stage, but I have determined, in the interests of justice that this is an appropriate course to take in this case because I’m concerned that you understand what the defence, in effect, disagree with in the prosecution case. It is intended that this is to help you understand the issues that you will need to consider and that you be able to understand those issues right from the start rather than waiting for a whole lot of witnesses to come along, and then you find out what the defence position is. …”

19. Mr Winter KC submitted that making a defence opening was an established practice subject to the court’s discretion. He referred to the Canadian case of R v Pickton^{^[11]} where the trial judge observed that “There is a substantial body of authority which holds that there is a discretion vested in the trial judge to permit counsel for the accused to open to the jury immediately following the Crown, but that discretion is to be exercised only in special or unusual circumstances.” Given the size and complexity of that case which could readily be characterized as special or unusual, the trial judge exercised his discretion to permit the defence to make brief opening remarks to the jury.

20. Mr Winter said such discretion has been frequently exercised in England and Wales, citing as examples two recent English trials in which he was allowed to make a defence speech to identify the issues for the jury. It is to be noted that in England and Wales, there is a general duty on the defence to disclose the details of its case ahead of trial.

21. It was submitted that given the complexity of the present case, it would be in the interest of justice for the defence to help the jury by identifying the issues to them in a short defence opening. Mr Winter also undertook on behalf of all the accused that should the defence be permitted to take the opening at the outset, the defence would forgo the making of a second opening speech before calling any defence evidence.

Prosecution submission

22. Mr Mitchell contended that DHCJ Bruce was wrong to permit the defence to make an opening statement immediately after the prosecution opening. This was unprecedented in Hong Kong, and there were no bases for setting this precedent in this particular trial. There had been far more complex and lengthy trials in Hong Kong where this highly unusual process has not been adopted in the past.

23. Mr Mitchell submitted that the practice of the defence making an opening statement is encapsulated in recent legislation in England and Wales whereby defence opening statements are permitted by rule 25.9(2)(c) of the Criminal Procedure Rules 2020 (“CPR”) when a defendant pleads not guilty in the Crown Court:

“25.9Procedure on plea of not guilty
(1) This rule applies where—
(a) the defendant pleads not guilty;or
(b) the defendant declines to enter a plea and the court treats that as a not guilty plea.
(2) In the following sequence—
(a) where there is a jury, the court must—
(i) inform the jurors of each offence charged in the indictment to which the defendant pleads not guilty, and
(ii) explain to the jurors that it is their duty, after hearing the evidence, to decide whether the defendant is guilty or not guilty of each offence;
(b) the prosecutor may summarise the prosecution case, concisely outlining the facts and the matters likely to be in dispute;
(c) where there is a jury, to help the jurors to understand the case and resolve any issue in it the court may—
(i) invite the defendant concisely to identify what is in issue, if necessary in terms approved by the court, and
(ii) if the defendant declines to do so, direct that the jurors be given a copy of any defence statement served under rule 15.4 (Defence disclosure), edited if necessary to exclude any reference to inappropriate matters or to matters evidence of which would not be admissible;
…
(g) the defendant may summarise the defence case, if he or she intends to call at least one witness other than him or herself to give evidence in person about the facts of the case;”

24. Mr Mitchell submitted that the CPR does not give the right to the defence to make an opening statement. After the prosecution opening, the court may invite the defence to identify concisely what is in issue: rule 25.9(2)(c). After the prosecution case, the defendant may summarise the defence case if he intends to call at least one witness other than himself: rule 25.9(2)(g). In Hong Kong, section 55 of the Criminal Procedure Ordinance (Cap.221) does not allow the defence to make an opening speech if the accused is the only witness for the defence. There is no equivalent legislation to allow the defence to make an opening statement after the prosecution opening. It is simply not part of the Hong Kong criminal practice and procedure.

25. Furthermore, the position with regard to the criminal practice and procedure in England and Wales is different from Hong Kong: the right of silence on arrest and caution has been abrogated; pre-trial disclosure has to be made by the defence in the form of a defence statement and provision of details of witnesses to be called in support of the defence. So the court in England and Wales would be in a better position to determine whether to issue the invitation to the defence to make an opening statement.

26. As to Mr Winter’s making of a defence statement in two recent English cases, Mr Mitchell said they were merely references with very little, if any, weight in the absence of written judgments setting out the context and reasoning behind.

27. In respect of the line of Canadian authorities, Mr Mitchell stressed that the discretion should be exercised only in special or unusual circumstances. He also helpfully referred to some of the pitfalls observed by the judge in R v D.(A.)[12], and the cases reviewed in an article entitled “Opening Address by Defence”[13].

28. Mr Mitchell said the special or unusual circumstances in favour of an early defence opening do not arise here. In respect of the length of trial, he pointed out that the 2021 trial was aborted after 57 days of evidence when the prosecution was about to close its case. Given Mr Winter’s indication that the forthcoming trial would be much shorter than the 2021 trial, this trial is reasonably lengthy but by no means one of the longest criminal trials conducted in Hong Kong.

29. In respect of the complexity of this case, Mr Mitchell referred to the conclusion of DHCJ Bruce after hearing 57 days of evidence that this was “a comparatively straightforward prosecution case” and in some respects, the arguments presented by the defence introduced an air of unreality[14]. To this regard to permit an early defence opening would have the danger of putting those matters before the jury. In any event, the defence would be apparent to the jury during the course of the prosecution evidence because defence counsel has the duty to put squarely the defence case to the witnesses in cross-examination.

30. As to Mr Winter’s undertaking not to make a defence opening after the close of the prosecution case, Mr Mitchell pointed out that it would be unfair to make such an undertaking on behalf of the unrepresented D3 at this stage. Nonetheless, he reminded this Court that the right to the defence opening would not even arise if no witness of fact is to be called in addition to the accused. So, he said, the making of a joint defence statement at the outset would place the accused in a better position than they might be in at the close of the prosecution case. Besides, it would be unfair to make give the undertaking on behalf of D3 at this stage.

Consideration

31. It falls upon me to consider this matter afresh given my earlier ruling that I am not bound to follow the previous decisions made by the judges in the earlier trials.

32. The way criminal trials are run in England and Wales have changed dramatically. Following the rule change which came into force on 5 October 2020, defence opening is permitted immediately after the prosecution opening where a defendant pleads not guilty. It would appear that the inspiration for the rule came from the recommendation in Sir Brian Leveson’s Review of Efficiency in Criminal Proceedings published on 23 January 2015. It took some years before the rule is introduced in the Magistrates’ Court and the Crown Court in England and Wales. The new rule is made on the basis of pre-trial disclosure, and the defence opening should be in accordance with the defence statement served under rule 15.4 of the CPR. In the circumstances it would be dangerous to adopt only part of the new English practice in view of the huge difference between the procedural framework of the two jurisdictions.

33. In Hong Kong there is no right for defence counsel to make an opening speech immediately following the opening speech for the prosecution. However, the court has an inherent discretion to permit an early defence opening. On the Canadian authorities, the discretion should be exercised only in special or unusual circumstances.

34. Are there any special or unusual circumstances to justify the discretion in the present case? In the 2021 trial, DHCJ Bruce did not give any written judgment on the reasons why he permitted the defence to give the joint opening. He explained to the jury that this was to help the jury to understand the issues right from the start. In the present case, Mr Winter confirmed that the only reason for this application is to identify the issues for the jury. The argument that an early defence opening would be able to identify the issues for the jury is an argument which could be advanced in almost every case. Yet the dearth of English authority on this practice and the complete absence of it in Hong Kong would suggest that the occasion where it may be appropriate to give permission is very rare indeed.

35. In my view, the length of a trial itself can rarely constitute a special or an unusual circumstance. It is to be noted that in the 2021 trial, a total of 18 witnesses were called by the prosecution. The unsolicited prejudicial evidence which resulted in the discharge of the jury was given by the last prosecution witness on Day 57. It would thus be reasonable to estimate that the prosecution case would take around 60 days. I was told by the defence that the forthcoming trial should be shorter. No doubt this is quite lengthy when compared with the run of the mill cases, but it is certainly not so exceptional as to justify an early defence opening.

36. In the case of Pickton, the trial judge allowed the application having regard to the size and complexity of that trial which was anticipated to run 12 months. Pre-trial applications were made over the year preceding the trial, and the prosecution intended to call 240 persons to testify in that trial. The present case would have no comparison with that case by any standard. As Mr Mitchell rightly pointed out, in the history of Hong Kong there were many other cases that could be regarded as far more complex than the present one. As such I do not agree that the complexity of this case is so unusual that it justifies an opening speech at the outset.

37. In this case, I would have thought the issues would become apparent to the jury at an early stage as witnesses are being examined and cross-examined. Besides, the jury will know what the essential issues are because Mr Mitchell will tell them in his opening speech. I am also mindful of the risk that the defence opening may serve as an untimely and confusing interruption of the prosecution case.

38. There are no special or unusual circumstances to justify the discretion to permit an early defence opening in this case. The normal procedure of speeches should remain accordingly.

Conclusion

39. The defence’s application to make a joint opening speech immediately following the prosecution opening is refused.

Calling of Messrs Nicholas John Cross and Kerry Joel Knight

40. At the 2021 trial, DHCJ Bruce made two rulings inviting the prosecution to call Messrs Nicholas John Cross and Kerry Joel Knight as prosecution witnesses. Both Messrs Cross and Knight worked for Messrs Knight Coldicutt, solicitors in New Zealand. The prosecution alleged that Mr Knight had previously represented D2 in matters relating to this case, and D1 had been instrumental in the appointment of Messrs Knight Coldicutt as solicitors for the listed China Jin Hui Mining Corporation Limited (“462”) in New Zealand.

41. Both Messrs Cross and Knight were not named on the back of the indictment. There was no application made by the defence to call either of them at the 2016 trial. On 15 April 2021, about two months into the 2021 trial, the defence applied for an order that the prosecution be directed to call Mr Cross to give evidence concerning the NZ$51.6 million which had been raised as part of the fund raising exercise by 462. The funds raised was sent to Messrs Knight Coldicutt to hold in escrow. Messrs Knight Coldicutt released NZ$51.6 million to D2, relying upon an email apparently from Mr Graham Chin of 462. Messrs Cross and Knight were the transactional lawyers. Background of the events leading to the defence application is outlined in paragraphs 3-16 of the ruling by DHCJ Bruce[15], and I do not intend to repeat it here. To put in a nutshell, the prosecution contended that the transfer of money supported the inference of dishonesty. The issue was whether there was authority to transfer the money and the characterisation of the transfer.

42. The prosecution resisted the application. It was made clear to DHCJ Bruce that the prosecution had strong reservations about the credibility and reliability of Mr Cross. In his ruling DHCJ Bruce referred to the principles authoritatively set out by the English Court of Appeal in R v Russell-Jones[16]:

“The principles which emerge from the authorities and from rules of practice appear to be:
(1) Generally speaking the prosecution must have at court all the witnesses named on the back of the indictment (nowadays those whose statements have been served as witnesses on whom the prosecution intend to rely), if the defence want those witnesses to attend. In deciding which statements to serve, the prosecution has an unfettered discretion, but must normally disclose material statements not served.
(2) The prosecution enjoy a discretion whether to call, or tender, any witness it requires to attend, but the discretion is not unfettered.
(3) The first principle which limits this discretion is that it must be exercised in the interests of justice, so as to promote a fair trial. See per Lord Parker CJ in Oliva (supra).
See also per Fullagar J in Ziems v The Prothonotary of the Supreme Court of New South Wales (1957) 97 C.L.R. 279, 292:
‘The present case, however, seems to me to call for a reminder that the discretion should be exercised with due regard to traditional considerations of fairness.’
The dictum of Lord Thankerton in the Palestine case “the court will not interfere with the exercise of that discretion, unless, perhaps, it can be shown that the prosecutor has been influenced by some oblique motive” does not mean that the Court will only interfere if the prosecutor has acted out of malice; it means that the prosecutor must call his mind to his overall duty of fairness, as a minister of justice. Were he not to do so, he would have been moved by a consideration not relevant to his proper task—in that sense, an oblique motive.
Clearly, however, to say merely that the prosecutor must act fairly gives little guidance as to how the discretion should be exercised in practice; and there are further limiting principles.
(4) The next principle is that the prosecution ought normally to call or offer to call all the witnesses who give direct evidence of the primary facts of the case, unless for good reason, in any instance, the prosecutor regards the witness’s evidence as unworthy of belief. In most cases the jury should have available all of that evidence as to what actually happened, which the prosecution, when serving statements, considered to be material, even if there are inconsistencies between one witness and another. The defence cannot always be expected to call for themselves witnesses of the primary facts whom the prosecution has discarded. For example, the evidence they may give, albeit at variance with other evidence called by the Crown, may well be detrimental to the defence case. If what a witness of the primary facts has to say is properly regarded by the prosecution as being incapable of belief, or as some of the authorities say “incredible”, then his evidence cannot help the jury assess the overall picture of the crucial events; hence, it is not unfair that he should not be called.
This limitation of the prosecution's discretion, which requires witnesses of the central facts to be called, is supported by what was said by Lord Roche in Seneviratne. This is also the sense in which, as it seems to us, Lord Hewart C.J.’s observation in Harris [1927] 2 K.B. 587, 590 should be read.
(5) It is for the prosecution to decide which witnesses give direct evidence of the primary facts of the case. A prosecutor may reasonably take the view that what a particular witness has to say is at best marginal.
(6) The prosecutor is also, as we have said, the primary judge of whether or not a witness to the material events is incredible, or unworthy of belief. It goes without saying that he could not properly condemn a witness as incredible merely because, for example, he gives an account at variance with that of a larger number of witnesses, and one which is less favourable to the prosecution case than that of the others.
(7) A prosecutor properly exercising his discretion will not therefore be obliged to proffer a witness merely in order to give the defence material with which to attack the credit of other witnesses on whom the Crown relies. To hold otherwise would, in truth, be to assert that the prosecution are obliged to call a witness for no purpose other than to assist the defence in its endeavour to destroy the Crown’s own case. No sensible rule of justice could require such a stance to be taken.”

43. Bearing in mind the relevance and potential importance of the witness’s testimony, DHCJ Bruce considered that the prosecution’s reservations “does not provide a justification for a refusal on the part of the Court to invite the prosecution to call Mr Cross as a witness.” Pointing out that the prosecution called Mr Cross in the earlier proceedings through the presentation of his deposition, the judge said it would be difficult for the prosecution to maintain that he was not a reliable or truthful witness.[17]

44. Subsequently, there was a further application by the defence seeking a court order to have the prosecution called Mr Knight. The judge considered that it would be in the interests of justice to invite the prosecution to call Mr Knight to testify, and he so ordered.[18] Counsel prosecuting on fiat[19] deferred to the judge’s invitation and proceeded to call those two persons.

Defence submission

45. Referring to the rulings given by DHCJ Bruce inviting the prosecution to call Messrs Cross and Knight, the defence said the interests of justice required the prosecution to call or tender those two witnesses at the forthcoming trial.

Prosecution submission

46. Mr Mitchell resisted the application, pointing out that the prosecution had strong reservations about their credibility and reliability in 2021, and that remains the position today. He submitted that the prosecution have a wide discretion to determine who would be called in support of the prosecution case. In the case of Richardson v R[20] the High Court of Australia examined the prosecutor’s discretion as to the witnesses to be called:

“Any discussion of the role of the Crown prosecutor in presenting the Crown case must begin with the fundamental proposition that it is for him to determine what witnesses will be called for the prosecution. He has the responsibility of ensuring that the Crown case is properly presented and in the course of discharging that responsibility it is for him to decide what evidence, in particular what oral testimony, will be adduced. He also has the responsibility of ensuring that the Crown case is presented with fairness to the accused. In making his decision as to the witnesses who will be called, he may be required in a particular case to take into account many factors, for example, whether the evidence of a particular witness is essential to the unfolding of the Crown case, whether the evidence is credible and truthful, whether in the interests of justice it should be subject to cross-examination by the Crown, to mention but a few. …
It is, therefore, a misconception to speak of the prosecutor as owing a duty to the accused to call all witnesses who will testify as to the events giving rise to the offence charged. …
It seems to us that there has been a tendency to overlook what was said by the Judicial Committee in Adel Muhammed el Dabbah v. Attorney-General (Palestine), where there is to be found an accurate and comprehensive statement of the function of the Crown prosecutor. … But it is important to recall that their Lordships, after observing:
“the prosecutor has a discretion as to what witnesses should be called for the prosecution, and the court will not interfere with the exercise of that discretion, unless, perhaps, it can be shown that the prosecutor has been influenced by some oblique motive”
said:
“It is consistent with the discretion of counsel for the prosecutor, which is thus recognized, that it should be a general practice of prosecuting counsel, if they find no sufficient reason to the contrary, to tender such witnesses for cross-examination by the defence, and this practice has probably become even more general in recent years, and rightly so, but it remains a matter for the discretion of the prosecutor.” (emphasis added)

47. Putting aside the prosecution’s concern about their credibility, Mr Mitchell submitted that neither Messrs Cross or Knight would be in a position to provide any critical evidence. Mr Cross previously gave evidence by way of deposition in New Zealand about the books of account of Messrs Knight Coldicutt. That evidence has already been reduced into Admitted Facts, and the calling of Mr Cross was not required.

48. At the 2021 trial, Mr Cross said he was not involved in the process of transferring the NZ$51.6 million at all, and had no knowledge of how the figure was arrived at. He had no recollection of the basis of the payments. He also failed to recall the authorisation email from Graham Chin. He did not recall any direct discussion or whatever about a joint venture company.

49. As for Mr Knight, he did not know or recall how the figure of NZ$51.6 million was arrived at. He did not recall seeing letters or emails about the funds transfer. He did not recall why the financial assistance issue arose nor did he recall the repayment of the funds. He did not know the NZ$51.6 million became part for financial assistance and part for acquisition of farms. He was not involved in getting the loan agreement signed.

50. In the circumstances, Mr Mitchell said it would be difficult to fathom how the testimony of Messrs Cross and Knight could assist the Court. It would be purely speculative to think they would reveal matters favourable to the defence. The defence would not be prejudiced by the absence of their evidence.

51. Mr Mitchell stressed that the prosecution case has very little to do with the NZ$51.6 million sent to Messrs Knight Coldicutt. In any event the issues surrounding the funds transfer would be dealt with by Mr YIP Kean Mun, another main witness.

Consideration

52. I am not bound by the previous rulings of DHCJ Bruce inviting the prosecution to call Messrs Cross and Knight as prosecution witnesses. I am in respectful agreement with his rulings on this matter. The reasoning for his rulings was compelling and it remains good as of today.

53. It is to be noted that DHCJ Bruce had the advantage of hearing a substantial part of Mr Cross’ testimony before observing that “he appears to be a witness genuinely trying to recall his part in the transaction in respect of which his evidence was required. It seems to me that he is generally credible and I certainly accept the parts in which he makes it plain that he had nothing to do with the decision to transfer of the NZ$51.6 million.”

54. With regard to the prosecution’s assertions about the veracity and reliability of Mr Knight, the judge noted, “The assertions are hearsay and appear to come from newspapers in New Zealand. While there are many circumstances in which hearsay assertions might persuade a Court that the witness is unworthy of belief, in the context of this case, I am not persuaded that these assertions are ones upon which this Court could properly and safely act.”

55. In respect of the contact between D2’s legal representative and Mr Knight, the judge commented, “That contact would only be sinister if during the contact or subsequently it was suggested to Mr Knight what he ought to say in the event of him being called to testify. There is not a scrap of evidence presently before the Court which would support such a conclusion.”[21]

56. There is no reason for me to doubt the correctness of DHCJ Bruce’s assessment of the situation concerning those two witnesses. Suffice to say that on the information before me, I am not satisfied that either Messrs Cross or Knight is not capable of giving truthful evidence.

57. It may be the case that those witnesses’ evidence is of marginal relevance to the prosecution case, but certainly it is potentially relevant to the transfer of NZ$51.6 million and the issue of the Graham Chin authorization. Whether they will be able to give any useful evidence on those issues is a matter to be seen. It would be inappropriate for me to form any view about their inability to recollect the relevant events at this stage.

58. In my decision, it would be in the interests of justice to invite the prosecution to call Messrs Cross and Knight or to tender them as prosecution witnesses.

59. I was advised by Mr Mitchell that Messrs Tanner De Witt, solicitors for the liquidators of 462 has granted a waiver in respect of the evidence of Mr Cross, but no such waiver has been granted in respect of Mr Knight. It would be appropriate for the matter to be referred back to Messrs Tanner De Witt for them to confirm the position with the joint provisional liquidators and the Cayman Islands about issues of legal professional privilege.

Conclusion

60. The prosecution is invited to call Messrs Cross and Knight as prosecution witnesses.

Calling of Messrs Wu Wing Kit and Navin Aggrawal

Defence submission

61. Towards the end of the 2021 trial, the prosecution indicated that consideration was being given to calling Messrs Wu Wing Kit and Navin Aggrawal to deal with the NZ$51.6 million issue. The defence said it would be in the interests of justice to have them called, and asked the prosecution to confirm whether they would be calling them to give evidence for the prosecution, and if not why not.

Prosecution submission

62. The prosecution confirmed that both Messrs Wu Wing Kit and Navin Aggarwal were not named on the back of the indictment, and no witness statement had been taken from them as prosecution witnesses. There has been no contact with either of them by the prosecution. No regard should be given to Ms Draycott’s remark which only came up in passing, Mr Mitchell said.

63. Mr Mitchell explained why it would not be appropriate for the prosecution to approach Mr Wu Wing Kit. First of all, he was the solicitor who advised D2 in the acquisition. He was also involved in advising D1 in associated matters. Secondly, he was prosecuted for the offence of money laundering in respect of an associated matter, namely handling part of the NZ$51.6 million which was sent to the client account of his firm, Mr Wu being the handling solicitor. He was convicted at the first trial in the District Court, and he was acquitted on retrial. As such there was no contact between Mr Wu and the prosecution any stage. In the circumstances it would be ridiculous for the prosecution to put him forward as an honest and truthful witness.

64. Given that Mr Wu was the lawyer who advised D2 (and D1) at the time, any legal professional privilege would rest with D1 and D2. Mr Mitchell pointed out that it would be open for the defence to waive such privilege and to have Mr Wu called if considered appropriate.

65. Mr Navin Aggarwal was convicted of theft of client money (including the money of a main prosecution witness Ms Katherine Chan) in Messrs K&L Gates and was sentenced to 12 years’ imprisonment. He could not be considered as an honest witness. In any event, he is unwilling to cooperate and has refused to testify.

Consideration

66. In this case, I do not accept that there is a duty on the prosecution to call Mr Wu or Mr Aggarwal. The prosecution neither want nor need their evidence. They are not listed on the back of the original or the fresh indictment. No witness statement was ever taken from them. Mr Wu was prosecuted for a related matter, and Mr Aggarwal has all along refused to cooperate with the prosecution. The prosecution have absolutely no idea of what they are going to say. In the circumstances any suggestion to have those persons called by the prosecution is simply preposterous.

67. It is the long-established right of the prosecutor to exercise his discretion to determine which witnesses to call, and to form his own view of which witnesses may be regarded as reliable and which unreliable. Leaving aside the issue of legal professional privilege which does not appear to be forthcoming from the defence, on the available information the prosecution are entitled to form the view that the evidence of those two persons is not worthy of belief. The decision not to have them called in the prosecution case is, in my view, fully justified.

68. In any event, no unfairness is likely to occur because the defence are at liberty to have those persons called as part of the defence case if they wish to do so.

Conclusion

69. The prosecution are not required to call Messrs Wu or Aggarwal.

The evidence of Mr David Wiltshire

70. Mr Wiltshire was the finance and administration manager of the CraFarms who sent the financial information to the farm accountants. He is an overseas witness and is not compellable by the Hong Kong courts to give evidence.

71. Mr David Wiltshire’s depositions were obtained in New Zealand in 2013 pursuant to two letters of request under the Mutual Legal Assistance in Criminal Matters Ordinance, Cap. 525 (“MLACMO”). Section 9(2) of MLACMO stipulates that the provisions of section 77F and 77G of the Evidence Ordinance (“EO”) shall, with necessary modifications, be applicable.

72. Mr Wiltshire had indicated his unwillingness to travel to Hong Kong as early as 2013. In his depositions, Mr Wiltshire said he had lost a lot out of all of this, costing him nearly his farm and his family, and the time. He was just a single businessman after leaving Crafarms and needed to earn for his family.

73. D3 was not present at the preliminary inquiry in New Zealand whereas D1 and D2 were represented by different counsel.

74. In the 2016 trial the prosecution applied to adduce Mr Wiltshire’s depositions on two alternative bases: section 70 and section 77F of the EO. Pang J ruled that the depositions were inadmissible under section 70 because they failed to satisfy a number of express requirements therein including that the examination was to take place before a magistrate. She eventually admitted a redacted version of the depositions under section 77F of the EO upon being satisfied that the conditions in section 77F(1)(d) were met including, inter alia, that it was not reasonably practicable to secure his attendance in Hong Kong. The redacted depositions were provided to the jury and a redacted version of the video recording of the proceedings was played before them.

75. At the 2021 trial, the prosecution called Mr Wiltshire as a live witness to give evidence by way of TV-link from New Zealand.

76. At present Mr Wiltshire is unwilling to give evidence in the forthcoming trial. When the ICAC asked about his willingness to testify in the forthcoming trial, Mr Wiltshire gave the following reply email on 21 June 2021:

“I confirm that I have received your request and after much thought and consideration respond as follows. I have now given evidence over three times in this matter which is on record. I stand by the evidence I have previously given and as time goes on it is much harder to remember details so I see no advantage in my giving further evidence on this matter.”

77. In February 2023, the ICAC emailed Mr Wiltshire asking again for his willingness to testify in the forthcoming trial. In his email of 22 February 2023, Mr Wiltshire gave the following reply:

“I am not interested in investing more of my time into this case. I have given a lot of support previously both in Auckland Court and online and my testimony has been recorded several times, and as the years go on it is harder for me to remember exact details clearly. You are best therefore to rely on previous court transcripts.”

Prosecution submission

78. As stated above the Wiltshire depositions were received in their redacted form under section 77F of the EO in the 2016 trial. Schedule 6 of the Criminal Procedure Ordinance, Cap. 221 (“CPO”) provides for the admissibility of a transcript of the record of the evidence given by any witness at the original trial provided that certain conditions are satisfied. The prosecution sought to adduce a transcript of the Wiltshire depositions read pursuant to paragraph 1(b) of Schedule 6.

79. In the alternative, the prosecution invited the defence to consider adducing the transcript of Mr Wiltshire’s testimony in the 2021 trial by way of agreement under section 65C of the. Noting that the scope of cross-examination of Mr Wiltshire in the 2021 trial was wider than that advanced in the 2016 trial, Mr Mitchell submitted that the alternative would alleviate any potential unfairness which might arise from using the depositions because D1 and D2, being represented by the same legal team, had to cross examine Mr Wiltshire in the 2021 trial [22]. He was also cross-examined by Mr David Khosa, counsel acting on behalf of D3 in both the 2016 and the 2021 trial. Besides, it would appear that even if Mr Wiltshire did give evidence again, it would not take the matter any further beyond the evidence he gave in the 2021 trial.

Defence submission

80. The position of the defence is that they do not need Mr Wiltshire to be called, but there are consequences of him not being called by the prosecution.

81. Mr Winter, on behalf of the defence, invited this Court to take note that during the preliminary inquiry in Hong Kong, the magistrate ruled that the New Zealand evidence inadmissible. That means the Wiltshire depositions had never formed part of the proceedings in Hong Kong until it was permitted to be adduced into evidence under section 77F of the EO in the 2016 trial.

82. Mr Winter submitted that Schedule 6 of the CPO is not applicable to Mr Wiltshire’s evidence in the 2016 trial because all Schedule 6 does is to dis-apply the provisions of section 70 of the EO (which deals with the admissibility of a deposition where a person is dead, etc.). Schedule 6 has no application because Mr Wiltshire’s depositions were admitted pursuant to section 77F of the EO. Furthermore, Schedule 6 only applies to the transcript of the record of evidence given by any witness at the original trial where a retrial is ordered pursuant to section 83F of the CPO. As such it has no application to the testimonial evidence of Mr Wiltshire in 2021 because the 2021 trial was not the original trial.

83. As to the prosecution’s suggestion of adducing the transcript of Mr Wiltshire’s evidence in the 2021 trial, Mr Winter pointed out that it would be wholly inadmissible as hearsay evidence. In England there is a statute permitting an agreement to be made for a hearsay statement to be admitted to prove the truth of its contents. But there is no similar provision in Hong Kong.

84. It follows that, Mr Winter said, at the forthcoming trial the prosecution should either call Mr Wiltshire to give live evidence or apply to adduce his depositions pursuant to section 77F(1)(d) of the EO. Nevertheless, it would be fundamentally unfair to adduce the depositions under section 77F because:

(a)     The reliability and accuracy of the CraFarms accounting records are at issue, but there was no cross-examination on the accuracy or reliability of the CraFarms accounts at the preliminary inquiry in New Zealand.
(b)     D3 was not present and was not represented at all in that preliminary inquiry, so he had no opportunity to cross examine Mr Wiltshire.
(c)     In the 2021 trial, Mr Wiltshire repeatedly conceded that he could not vouch for the reliability of the CraFarms accounting figures or the raw data from which they were produced. As such, the depositions contained false, unreliable and incomplete evidence which has been replaced by Mr Wiltshire’s testamentary evidence in the 2021 trial.

85. The defence invited this Court to rule that neither the depositions nor Mr Wiltshire’s testimony in the 2021 trial is admissible pursuant to Schedule 6 of the CPO.

Consideration

86. Where the Court of Appeal orders a retrial pursuant to section 83E of the CPO, section 83F of the Ordinance provides that Schedule 6 to the Ordinance shall apply. Paragraph 1 of Schedule 6 provides:

“Depositions
1. On a retrial, section 70 of the Evidence Ordinance (Cap.8) (admissibility in evidence in criminal proceedings of deposition of person dead, etc.) shall not apply to the depositions of any person who gave evidence at the original trial or to any written statement by such a person tendered under section 81A of the Magistrates Ordinance (Cap.227) in the committal proceedings before the original trial; but a transcript of the record of the evidence given by any witness at the original trial may, with the leave of the judge, be read as evidence—
(a) by agreement between the prosecution and the defence; or
(b) if the judge is satisfied that the witness is dead or unfit to give evidence or to attend for that purpose, or that all reasonable efforts to find him or secure his attendance have been made without success,
and in either case may be so read without further proof, if verified in accordance with rules and orders made under section 9.” (emphasis added)

87. One of the effects of paragraph 1 is to render depositions ordinarily admissible under section 70 of the EO or section 81A of the Magistrates Ordinance (Cap. 227) inadmissible if the deponent gave evidence at the original trial, but a transcript of the record of the evidence given may be admitted by agreement or where the witness becomes unavailable, etc. In my judgment, the evidence given at the original trial must be construed to mean “the oral evidence given by the live witness at the original trial”. In other words, a record of the oral evidence prevails over the deposition if the deponent became available to attend the original trial. It does not extend to evidence adduced by other means such as reading out of the section 70 deposition. It would be otiose for the provision to render the deposition inadmissible but at the same time admits a record of the same deposition read at the original trial.

88. I therefore disagree with the prosecution that a transcript of the record of the depositions read in the 2016 trial can be admitted under Schedule 6 of the CPO because Mr Wiltshire was not called to give oral evidence at that trial. As to Mr Wiltshire’s testimonial evidence given in the 2021 trial, it is common ground that Schedule 6 has no application because that was not the original trial.

89. In my judgment, paragraph 1 of Schedule 6 permits the production of a transcript of the record of the evidence given by any witness at the original trial by agreement or when the witness becomes unavailable, etc. As stated above the evidence given by any witness should mean the oral evidence given by the live witness. A transcript of the record of the live evidence given by any witness can be so admitted irrespective of whether the witness has provided any section 70/81A deposition previously.

90. For the sake of completeness, it would be necessary to point out that paragraph 1 of Schedule 6 only renders the section 70/81A depositions inadmissible in cases where the deponent has given oral evidence at the original trial. It does not affect the admission of the section 70/81A deposition in cases where no oral evidence was given by the deponent, nor does it affect the admissibility of the deposition under other statutory provisions such as section 77F of the EO.

91. I am mindful of the issues of unfairness said to be occasioned by the production of the Wiltshire depositions pursuant to section 77F of the EO. There is no section 77 F application made by the prosecution. As such it would not be appropriate for me to deal with this matter at this stage.

92. As to the prosecution’s suggestion of tendering a transcript of Mr Wiltshire’s testimonial evidence in the 2021 trial by agreement under section 65C of the CPO, I agree with Mr Winter that the transcript so admitted would be inadmissible hearsay for the purpose of establishing the truth of what was asserted in the transcript.

93. Section 65B of the CPO provides that a written statement by any person that complies with the pre-conditions articulated therein be admissible as evidence to the like extent as oral evidence to the like effect by that person. It would be open to the prosecution to consider whether to tender a transcript of Mr Wiltshire’s evidence in the 2021 trial by reducing it to a written statement in compliance with the conditions set out in section 65B of the CPO. This course of action is only appropriate with parties’ consent given that the other party may require the statement maker to attend court and give evidence (section 65B(4)).

Conclusion

94. Schedule 6 of the CPO is not applicable to a transcript of Mr Wiltshire’s evidence in the 2016 trial. The prosecution’s proposal to tender a transcript of his evidence in the 2021 trial by agreement pursuant to section 65C of the CPO is also rejected as inadmissible hearsay evidence.

Postscript

95. These reasons are provided for the parties’ information only. The only part of this judgment which may be reported publicly are the above Conclusions. The remaining part of this judgment may not be reported until further order or until the conclusion of the trial.

(Anna Lai)
Judge of the Court of First Instance
High Court

Mr Neil S Mitchell, Counsel-on-fiat, leading Miss Ng Oi Lam, Joycelyn, SPP of the Department of Justice, and Mr Li Chun Ngai, Martin, Counsel-on-fiat, for the Prosecution

Mr Tim Owen, K C, leading Mr Benson Y M Tsoi, instructed by Boase, Cohen & Collins, for the 1^st Accused

Mr Ian Winter, K C, leading Ms Betty Chiu, instructed by Haldanes, for the 2^nd Accused

The 3^rd Accused appeared in person

[Subject to Reporting Restrictions as per Paragraph 95 of this judgment]

[1][2023] HKCFA 11 dated 24 May 2023.

[2] D3 was unrepresented at the hearing of the arguments. He fully adopted all the arguments raised on behalf of D1 and D2 by counsel acting on their behalf.

[3] Ruling on 16 October 2015, at paragraphs 12-19.

[4] (1995) 27 HLR 703, at 716.

[5] [2007] EWCA Crim 635, at paragraph 23.

[6] HCAL 147/2002, at paragraph 22.

[7] Oral ruling on 26 February 2021.

[8] Ruling on 26 May 2021.

[9] Ruling on 7 June 2021, Reasons of Ruling dated 25 November 2021.

[10] Day 5 pages 72-73

[11] 2007 BCSC 61, at paragraph 6.

[12] [2003] O.J. No. 4900.

[13] Mack Crim LB 2015-18, Issue 18, September 4, 2015.

[14] Ruling on application for stay of proceedings dated 30 November 2021, at paragraph 112.

[15] Ruling dated 26 May 2021.

[16] [1995] 1 Cr App R 538.

[17] Paragraphs 24-26.

[18] Ruling dated 25 November 2021.

[19] Ms Charlotte Draycott SC.

[20] (1974) 131 CLR 116, at pages 119-120

[21] Reasons of Ruling dated 25 November 2021, at paragraphs 7-12.

[22] Mr Wiltshire was also cross-examined by Mr David Khosa, counsel acting for D3 in both the 2016 and the 2021 trial.

HCCC 309/2019

[2021] HKCFI 3567

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

__________________

BETWEEN
	HKSAR
and
	CHEN KEEN (alias JACK CHEN)	1^st Accused
	HAO MAY (formerly known as WANG MAY YAN) (alias MAY WANG)	2^nd Accused
	YEE WENJIE (also known as YU WENJIE) (alias ERIC YEE)	3^rd Accused

__________________

Before: Deputy High Court Judge Bruce SC in Court

Date of Hearing: 25 June 2021

Date of Ruling: 30 November 2021

_________________________________________

RULING

APPLICATION FOR STAY OF PROCEEDINGS

_________________________________________

INTRODUCTION

1. On 16 June 2021, I discharged the jury hearing the trial of these proceedings. By notice dated 19 June 2021 those representing the accused then made submissions that the prosecution should not be permitted to pursue a further trial before a fresh jury. In the circumstances following the discharge of a jury, the prosecution is, ordinarily, entitled to require the charges on the indictment to be tried by a fresh jury unless the proceedings are not permitted by the Court to proceed.

2. The grounds upon which those representing the accused contend that the prosecution are as follows:

(1) The further trial of the accused would, in the particular circumstances of the case be vexatious, unjust, oppressive and contrary to the interests of justice.[1]
(2) The test that the Court should determine is not that which is applicable to the determination of whether or not to permanently stay proceedings on the grounds of an abuse of process but are based on the same test that an appellate court applies in determining whether to grant a retrial.[2]
(3) (Alternative to Ground (2)) the proceedings should be permanently stayed as an abuse of the process of the Court on the basis that either (a) a fair trial is not possible at any further trial of this indictment and/or (b) it would be an affront to the Court’s sense of justice to try the accused for a further time.[3]

CASE FOR THE ACCUSED

Summary of Grounds

3. The outline of the case for the accused is contained within the Joint Defence Notice of Application for Permanent Stay of Proceedings dated 19 June 2021. The bases for the application are:[4]

(a) The defendants have been subjected to two lengthy trial procedures over the past decade, both of which failed for reasons beyond their control.
(b) They have already served lengthy periods of imprisonment and endured years of misery, anxiety, vast expense in legal costs and restrictions on their liberty which have effectively destroyed their ability to lead fulfilling lives both personally and professionally.
(c) D3 has served all but eight months of his entire sentence.
(d) D2 and D3, who are not Hong Kong citizens and who have no legal rights in this Special Administrative Region, have existed in a form of legal limbo for eleven years. They are only permitted to remain here because their bail conditions prevent them from leaving. They have not been able to see members of their families (such as D2’s daughter) or to exercise basic human rights such as to access state medical services, for a very long time. D2 has been unable to work because of the injunction taken out against her, itself dependent on the criminal prosecution, and has been forced to exist dependent on the charity of others.
(e) The experience of conducting the re-trial has exposed numerous fatal flaws in the prosecution’s indicted case and any decision on permitting the prosecution to pursue a further trial before a fresh jury must take account of those fatal flaws.
(f) It would be grotesque to fix any further trial process without regard to the diaries of Counsel who have acted for the defendants in the re-trial and for many years and accordingly no further trial could fairly be fixed before October 2022 which would mean that witnesses would be expected to recall events which took place some 13 years ago.
(g) Even if it were possible to re-commence a fresh trial next week, the delay and the manner in which witnesses were originally proofed in 2010/11 (without reference to the contemporaneous documentation which contradicts their recollected evidence) makes a fair trial impossible.
(h) The way in which the prosecution have sought to re-cast their case in the course of the re-trial in order to address the fatal flaws in the indicted case is unprincipled, unlawful, grossly prejudicial and was the key factor in causing the discharge of the jury. It is an abuse of process for a prosecution repeatedly to shift its case as the wrongness of the allegation it makes is exposed.

4. There was a further ground asserted in the Notice which is as follows:

(i) The in terrorem threat by Prosecuting Counsel to seek to call Mr Wu Wing Kit at any further re-trial is a blatantly transparent attempt to place pressure on Deputy High Court Judge Bruce SC to withdraw from acting as trial judge and is in itself an abuse of the process of the court in circumstances where the prosecution are self-evidently infuriated by rulings made in the re-trial and are determined to remove a Judge they regard as an inconvenient obstacle to the advancement of their flawed indictment.

While I consider this topic to be a matter which I am obliged to deal with, I do not consider that this is a basis upon which a Court could refuse permission to proceed. In my opinion, this is the position whether one considers this contention either by itself or in combination with the grounds upon which the Notice is truly based.

Grounds (a) to (d): Double jeopardy and hardship

General

5. Grounds (a) to (d) of the submissions of the accused were grouped together. Central to this group of Grounds is a chronology of events. A chronology was provided.[5] There is also a chronology provided by the prosecution which is broadly similar to that provided by the defence. However, while it is true that the prosecution chronology broadly accords with that of the chronology provided by the defence, further dates are provided and rather than setting out both chronologies I propose to create a chronology which takes account of the approach of both sides. That chronology is set out under the heading “Determination”. It is expressed in neutral language.

6. The essence of the position of the accused under these headings is: “All these matters have to be seen in the context that the defendants endured a lengthy and complex trial process in 2015/16, appeals and imprisonment for charges that have ultimately been found to be defective as a result of prosecutorial error. Throughout this time the Defendants were unable to make a living as free citizens whether for themselves or their family due to the restraint order and later the civil injunction.”[6]

7. The accused focused their submissions under this heading by reference to the considerations to the treatment in Ting James Henry v HKSAR (2007) 10 HKCFAR 632.[7] In this regard, the accused submit:

(1) By comparison to Ting’s case in order for the continuation of the present trial would amount to a second retrial whereas Ting on appeal to the Court of Final Appeal was potentially liable only for a first retrial;
(2) The time served by the accused until bail pending appeal was granted by the Court of Final Appeal was twice as long as the time served by Ting;
(3) The length of any further trial of the accused would be substantially greater than the trial which might have been faced by Ting because the case against the accused is somewhat more complex. In this regard Ting’s case lasted 38 days and the first trial of these accused of 107 days. It is also contended that the complexity is evidenced by the number of leading Counsel involved in the present case;
(4) A retrial would be an expensive exercise and any costs recovered would be diminished by taxation.
(5) The time which has elapsed between the offences, the subject of the indictment, is substantially longer than in Ting’s case (about 8 years). The offences in the present case are alleged to have occurred in 2009 and at the date of writing we are well over 12 years from that time.
(6) Any further trial of the present proceedings will involve numerous witnesses being called upon to testify. Those witnesses are mostly civilian witnesses and are, in some cases, resident outside Hong Kong. It is submitted that some of these witnesses would be giving evidence for the fourth time. They would be giving evidence about events which occurred about 12 years ago.
(7) The time which has elapsed prevents the parties from properly investigating issues. In this regard, the accused point to the fact that some documents have been destroyed and could not be located even after legal professional privilege was waived.
(8) In Ting’s case, the group of which he was chairman collapsed. In the present case there has been no collapse caused by the accused. It is contended that the shareholders have not lost their monies. It is contended that the “Very Substantial Acquisition” by the company which throughout these proceedings has been called 462 which was at the heart of the case continues albeit in a revised form. There is also said to be the issue of the possibility of the resumption of trading in shares in 462.
(9) The accused will not go unscathed in the event that there is not a further trial because they have already served a substantial time in prison. It is said that the civil proceedings initiated by the liquidators of 462 against the accused are well capable of recovering any improper profits said to be made by the accused. There is also a worldwide injunction against the assets of the accused at the instance of the liquidators. In short, it is contended by the accused that in the event that there is no further trial could not be said that the accused (either individually or collectively) “got away with it”.

8. In addition, the submission of the accused points to individual personal hardship. This is outlined in greater detail later in the submissions of the accused.

9. The accused in their submission summarise this aspect of the case for the accused as follows:[8]

“24. All these matters must also be considered in the context that the defendants (and their families) have already suffered great hardship in this process at considerable personal and financial expense.
25.In all the circumstances, it is submitted that it will be unjust, oppressive, disproportionate, and not in the interests of justice for a 2nd retrial to be ordered against these defendants.”

Specific consequences for the 1^st Accused

10. The 1^st Accused says that his reputation as a businessman has been seriously damaged by the allegations in this case. It is contended that this has resulted in an inability to obtain appropriate permits from government bodies.[9]

11. The 1^st Accused has suffered in his personal, political and business career. In submission, he points to the fact that he was hoping to be appointed as an honorary consul for Trade Commissioner in China and Macau for the Independent State of Samoa. The political party that the 1^st Accused was in the process of developing has been disbanded and his business career in New Zealand has been set back. So far as business is concerned the same position applies in relation to his businesses in the mainland.[10]

12. The position of the 1^st Accused is also said to be prejudiced by the civil proceedings now being taken against him (and his wife) by the liquidators of 462. There is a worldwide Mareva injunction against them which is based on the allegations made by the prosecution in the present criminal proceedings.[11]

13. The provision of legal expenses by the 1^st Accused has been based on borrowing from friends. It is contended that he has had to borrow to support living, family and school expenses as well. The liabilities of the 1^st Accused have included the obligation to support the legal expenses from the trial in the District Court of his wife.[12]

14. On a personal basis the trial has not only been a strain for the 1^st Accused but also his wife and 3 children. Perhaps, the only bright spot in this is that the 1^st Accused is now a grandfather 2 times over. It is contended by the 1^st Accused that the strain of these proceedings has extended beyond his immediate family. Even if there was not a causal connection between difficulties such as the illness of the father-in-law of the 1^st Accused, they are stresses and strains that 1^st Accused and his family have to bear in addition to the stress and strain of the trial.[13]

15. The imprisonment imposed upon 1^st Accused following his conviction on the first trial of these proceedings meant that he was not able to attend the funeral of his father. It is contended that the criminal proceedings have been nothing short of devastating for the 1^st Accused and his family.[14]

Specific consequences for the 2^nd Accused

16. The 2^nd Accused points to the fact that she is now a New Zealand national, having relinquished her citizenship of the People’s Republic of China. The bail conditions imposed on her prevent her leaving Hong Kong. As a result, she has been compelled to live here, in effect, from 2010. She has few family connections here and, as a result of the long separation has become a strange from family in New Zealand.[15]

17. One of the consequences of being unable to leave Hong Kong and without being the holder of a permanent identity card, she is not permitted to work without permission. She has applied on two occasions and on both occasions was refused permission to work. She lives on the charity of her former husband and some of her friends.[16]

18. The 2^nd Accused is unable to access government medical services and is forced to pay higher rates for private medical services. As a result of not having a permanent identity card, it is contended that she has also denied matters such as appropriate banking facilities.[17]

19. The 2^nd Accused has also experienced personal difficulties in relation to carrying through an adoption process. In addition, she has a 10-year-old daughter who cannot, for all practical purposes, live in Hong Kong. That daughter lives in the mainland with relatives. In consequence of this, the daughter has become estranged from her mother.[18]

20. It is contended by the 2^nd Accused that in consequence of the violation of her rights to a trial without undue delay is guaranteed by Article 11 of the Hong Kong Bill of Rights Ordinance, Cap 383 (and, of course, Article 87 of the Basic Law), the 2^nd Accused contends that that as a consequence of that there has been a denial her rights under Articles 8 and 14 of the Hong Kong Bill of Rights Ordinance (liberty of movement and protection of privacy, family, home, correspondence, honour and reputation, respectively).[19]

21. In connection with the business consequences for the 2^nd Accused, she contends that prior to her arrest as a result of the financial crash of 2008 her real estate business suffered and she was rendered bankrupt in December 2010. Implicit in her submissions is that by being detained in Hong Kong in the manner of which she complains, she has been denied the opportunity to make, in effect, her comeback in financial terms.[20]

22. The 2^nd Accused also relies on the considerable amount of money she has expended on legal expenses and the need to rely on the kindness of others to support herself. She points also to the restraint order and the civil proceedings in effect limiting her freedom - financial and otherwise.[21]

23. It is contended that the manner in which the prosecution has advanced its case against the 2^nd Accused has featured repeated errors. It is also contended that it is inappropriate, particularly against the background of the allegation of undue delay[22], to impose proceedings on the person in the position of the 2^nd Accused.[23]

Specific consequences for the 3^rd Accused

24. The 3^rd Accused holds a Singaporean passport and was, prior to the present proceedings, a resident of New Zealand. He has no right to remain and to work in Hong Kong and requests to the authorities for a work visa have repeatedly been turned down. Further, because his passport is retained by the authorities as part of the terms of his bail, this also inhibits his ability to work, obtain education or obtain medical treatment in the Hong Kong public system.[24]

25. The parents of the 3^rd Accused and are in their mid-70s and both have old age-related illnesses. The 3^rd Accused believes that the uncertainty in relation to his case has affected their well-being and has produced, in his parents, a degree of anxiety. His detention within Hong Kong, although he is out on bail, has caused him anxiety because he is not able to contribute to the welfare of his parents.[25]

26. The 3^rd Accused say that he has suffered reputational damage as a result of this case. This was of particular importance because he depends on relationships with banks and other financial institutions in order to advance his business as a mortgage advisor. He believes that in any event he will be unable to return to his former business due to the reputational damage he has suffered.[26]

27. The personal circumstances of the 3^rd Accused being a person without, in effect, friends or relatives in Hong Kong as resulted in a somewhat lonely life. He has a fiancé but she lives on the mainland. He has had to borrow money in order to fund his legal defence from family. In effect, his life has been on hold since his arrest in 2011.[27]

Ground (e): Fatal flaws in the case for the prosecution

28. The submissions of the accused incorporate by reference the submissions which were tendered in anticipation of a submission of no case to answer. It is contended that the effect of these submissions is to expose serious flaws in the prosecution case and that these floors are fatal or, alternatively, are sufficiently significant to militate against a decision which would have the effect of permitting a second trial on the present indictment.[28]

Ground (h): Constant shifting of the case for the prosecution

29. The accused contend that in consequence of the exposure by the defence of flaws in the prosecution case, the prosecution has shifted its case. It is contended by the accused that such shifts are “unprincipled, unlawful, grossly prejudicial and was a key factor causing the discharge of the jury.” It is also contended that it is an abuse of the process to for the prosecution shift its case in the manner that it has. It is contended[29] that it is fundamental that an accused is entitled to know the case against him so that he can properly defend himself.[30]

30. The accused advance the following particulars in support of this contention:[31]

(1) The allegations / innuendos that various documentations relied upon by the defence were forgeries (disguised as an issue of “provenance”);
(2) The allegation that Mr Navin Aggarwal was a co-conspirator, but now apparently he is also recategorized as a potential prosecution witness of fact;
(3) The allegation that Mr Wu Wing Kit was/is an unindicted co-conspirator, but now apparently capable of being reformed into a potential prosecution witness of fact – this is of significance as throughout the entire case the Prosecution had repeatedly emphasised that Mr Wu was D1 and D2’s lawyer.
(4) The Prosecution’s new suggestion that it need not prove that “Tab 11” were the “true and accurate” accounts of the Crafarms – when it was clear that (given Mr. Wiltshire’s and Mr. King’s evidence) they were unable to prove the accounts’ truth or accuracy.
(5) The allegation that the transfer of the NZ51.6m was “unauthorised” since the authorisation documents (particularly the Graham Chin email) were all questionable and had no provenance.
(6) The baseless suggestions that Messrs Kerry Knight and Nick Cross were not witnesses of truth but somehow implicated in the dishonest transfer of the NZ51.6m in February 2010 and implicated also in drafting a fraudulent sequence of transacting documents designed to advance the frauds on 462 and the HKSE. The characterisation, without any evidential basis at all, that Mr Knight is a legal cowboy. The Prosecutor does not even know of the material in the unused that demonstrates that Mr Knight was acting lawfully and upon instructions.

31. The accused also complain under this heading that the prosecution and Independent Commission Against Corruption have had over a decade to prepare for this trial with what are said to be unlimited resources against the accused.

Grounds (f) and (g): Unacceptable delay

32. The accused contend that, taken as a whole, the rights of the accused to trial without undue delay have been violated. These rights are to be seen in Article 11(2)(c) of the Hong Kong Bill of Rights Ordinance and Article 87 of the Basic Law.

33. It is contended, citing Archbold for Hong Kong 2021, §4-53 that the test propounded there is “The question the court will focus on is: would there still be a fair trial if the accused has been so seriously prejudiced by reason of the lapse of time in bringing him to trial.”

34. The accused complain that while in some respects the present case is a document-based case critical witnesses were often required to give testimony based on their own recollection. In this regard, those representing the accused instance the testimony of Mr Nicholas John Cross who, so it is contended, was asked to give his testimony from his own recollection rather than from documents. Cross-examination of the same witness on documents produced very little else by way of recollection.

35. Those representing the accused complain that the ICAC in taking statements from witnesses did so by reference to memory only and not from contemporaneous documents. It is complained that often such witnesses were faced with contemporaneous documents for the first time when they were cross-examined in the retrial ordered by the Court of Final Appeal. It is contended that, accordingly, the defence of being denied the opportunity of being able to test the witness by reference to their memory and to contemporaneous documents. It is contended that there were multiple occasions (the submissions say literally hundreds of occasions) when a witness said that he could not remember thus demonstrating the unreliability of the witness.

36. It is contended that the combination of circumstances identified by the accused render the trial unfair.

37. In this context those representing the accused take the example of Mr Ip Yu Chak, Barry. He was the senior partner of the accountants (ShineWing) who advised 462 on the “Very Substantial Acquisition”. It was contended “The contemporaneous knowledge of [ShineWing] that the figures emanating from D2 and D3 were assumed pro forma figures not least because UBAH had never traded; such that they could not be used in Appendix II,[32] or could only be used if very heavily caveated is an issue right at the heart of the case.”[33] The point was made that Mr Barry Ip gave only a three-page witness statement to the ICAC which was on matters which are either of little relevance or no relevance at all.

38. Those representing the accused complain that this witness was asked to give evidence from his recollection. As an example, they say that in cross-examination by the 2^nd Accused, this witness was asked what he had to do with the 2^nd Accused during the course of the processes that he undertook for 462. The 2^nd Accused contend that the answer that Mr Barry Ip spoke to her one or two times or maybe three times was inaccurate when compared to the documentation which was later shown to him. The contention was made that the contemporaneous record does not support this conclusion. As for the key issue of whether hypothesised accounts could be used he told the Court that he could not remember whether he told anyone including Ms Chan Wai Kay, Katherine that they could not be used. It was contended then that the failure of the ICAC to show to the witness the documentation which put what was said to be the contemporaneous record to him “and the failure of the prosecution to put the case on the basis of the contemporaneous documentation has resulted in the trial being dependent upon his recollection. This deprives the defence of the ability to prove the truth of what is contained in the documentation, because the witnesses can no longer remember.”[34]

39. A further issue arose because neither Ms Katherine Chan of 462 nor Mr Barry Ip (the accountant) could remember the scope of the participation of a person named in some of the correspondence as “Johnny”. The relevance of this was that it was contended that he had been instructed to produce accounts for UBNZ (one of the companies of the 2^nd Accused). The issue of whether or not this was being done at the instance of 462 was of some significance. It was contended that because nobody could remember who or where “Johnny” fitted into the scheme of things the issue could not be litigated and this was to the disadvantage of, in particular, the 2^nd Accused and the 3^rd Accused.

40. A further issue arose in relation to the issue of the existence and, if so, the nature and scope of an argument between 462 and the Stock Exchange of Hong Kong Limited over the necessity to produce a reporting accountants report in relation to the target assets to be acquired in the VSA. There was a documentary record which was copied to Mr Barry Ip (the accountant) but his testimony was he could not remember the topic. It was contended that he should have been shown the documentation in 2010 when his witness statement was being prepared to enable the accused to be able to take steps to properly cross-examine him. It was submitted that there is a world of difference between accepting the truth of a document and saying whether a witness could remember whether or not a document was true. Of this the accused contend: “That the former position might suffice for the purposes of the defendants being acquitted can only be known in hindsight. If it transpired that it was not sufficient to secure an acquittal then the conviction (or indeed a hung jury) would be as a result of the trial having taken place at a time and in circumstances when the recollection of the witnesses was insufficiently reliable to establish the truth of what happened, to the prejudice of the defendants. That is, by definition, unfair.”[35]

41. The accused complained that Mr Barry Ip could not remember whether those in charge of 462 to place pressure on him and his company to sign off on the accounts in Appendix II that, so it is contended, is critical to the knowledge of those in Mr Barry Ip’s accounting company as to whether the figure that were inserted had genuinely been ignorant of the true hypothesised basis of the figures emanating from the 3^rd Accused. The point made by the accused is that Mr Barry Ip could not remember anything of this issue.

42. The case for the accused is that the problems started with the statement taking process undertaken by the ICAC in 2010. In the contention of the accused, articulated in Appendix 1 to the written submissions of the accused is a list of the documents which were put to the potential prosecution witnesses when their statements were originally taken. The central argument was that few documents were put to them and none of the documents ultimately put by the defence in the course of cross-examination of those witnesses by the accused, particularly the 2^nd Accused. In this regard, the written submissions contend that few relevant documents wherever put to the witness Mr Yip Kean Mun who became the Chairman of 462 and was chairman at the critical stage where some of the funds of 462 were paid to the 2^nd Accused. Pausing there for a moment, while this payment is not the subject of a charge against the 2^nd Accused (it is capable of being relevant - at least to a degree - to the money-laundering charge levelled against the 1^st Accused) the sequence and legality (or otherwise) of that payment is circumstantially relevant to the state of mind of the 2^nd Accused. The written submissions of the accused make the point that in all of the statements of Mr Yip, few documents relevant to this transaction were ever put to him despite the fact that his memory of what happened in the sequence of what happened was critical to the case for the prosecution.

43. Those representing the accused have detailed in Appendix 2 to the Joint Defence Submissions the occasions when the principal witnesses for the prosecution said that they could not remember critical issues germane to the case. The submissions contend that this was of critical importance in relation to the testimony of Ms Katherine Chan (the chair of 462 during critical moments of the transaction which underlay the indictment) and Mr Yip who was her successor and was the chair of 462 at critical times including the time that 2^nd Accused receive money from 462 and the events which followed in the subsequent months. It was contended in relation to Ms Katherine Chan that critical to her memory lapses was the true nature of the of the transaction which underlay the VSA.

CASE FOR THE PROSECUTION

44. The prosecution submits that the kind of discretion contemplated in R v Bell [2010] EWCA Crim 3, [2010] 1 Cr App R 27 is not engaged in the present case. The prosecution submitted that Lord Judge CJ explicitly dealt with that point when he observed that the considerations in Bell do not apply in cases other than ones where two trials have resulted in juries being discharged because they were unable to reach a verdict. Lord Judge CJ observed:[36]

“This was not a situation in which either trial had, for whatever reason, such as illness or jury tampering, being brought to an untimely end, or where a conviction at the earlier trial had been quashed by the Court of Appeal.”

In short, the prosecution contends that the situation contemplated in Bell does not arise in the present case.

45. The prosecution contends that the situation is more akin to the considerations that arise when an appellate court considers ordering a retrial. In this regard, the prosecution observed that Lord Judge CJ specifically catered for this by citing the approval of the decision of the Privy Council in Bowe and another v R [2006] UKPC 10, [2006] 1 WLR 1623.[37] In that decision, Lord Bingham, delivering the advice of the Privy Council, held that not proceeding to a third trial where two previous juries have been unable to agree is more in the nature of a convention. Lord Bingham held that while the prosecution may justifiably take the view that in such a situation there is no realistic prospect of obtaining a verdict in a third trial the issue is really one for the prosecution. Lord Bingham said that there is no rule of law which prohibits a third trial but recognise that there may be situations where such a trial would be oppressive and unjust. He held that a Court would be entitled to prohibit such a further trial but the decision depends “on an informed and dispassionate assessment of how the interests of justice in the widest sense are best served.”

46. The prosecution makes the point that in the present case, unlike the situation in Bell (above), the present trial which has resulted in the discharge of the jury was an order for a retrial following a verdict of guilty. The appellate decision in favour of the convicted accused has characterised the decision as a decision “on a technicality”. The prosecution contend that the evidence in the present case which was sufficient to sustain a conviction in the first trial remains very powerful.

47. The prosecution also rely on Reid v R [1980] AC 343 for the proposition that a further trial is justified upon the basis that those who are guilty of serious crimes to be brought to justice and not escape because of some technical blunder. The relevance of the strength of the evidence was underlined in the decision of Au Pui Kuen v AG [1979] HKLR 16. The point is made that in coming to the decision in Ting James Henry (above), a case heavily relied on by those representing the accused, the Court of Final Appeal did observe[38]:

“It can be contrary to the interests of justice if the public feel enraged or even disquieted at the fact that a defendant, who may have committed a serious offence, apparently escapes the normal consequences of his crime because a failure in the trial process has resulted in his conviction being set aside.”

48. It is contended that only basis on which a Court could interfere in a situation such as the present case would be upon the basis that the continuation of the case would be such as to be an abuse of the process of the Court. It is contended by the prosecution that in such a situation the strength of the prosecution case is irrelevant.[39] The prosecution makes the point that the circumstances in which proceedings may be stayed as an abuse of process have been articulated in this jurisdiction by the Court of Final Appeal in HKSAR v Lee Ming Tee & Anor (2001) 4 HKCFAR 133. The remedy of a stay of proceedings is, so it is contended, a remedy of last resort and should only be granted where a fair trial is impossible and only after all alternative avenues for the conducting of a trial have been explored. The decision in Lee Ming Tee was followed and applied by the Court of Appeal in Yeung Chun Pong v S-J [2008] 3 HKLRD 1. The prosecution prayed in aid of their submissions, the observations in Yeung Chun Pong by Stock JA (as Stock NPJ then was) where he deprecated the use of stay of proceedings applications as generally an inappropriate and collateral attack on the criminal process.

49. In relation to the submissions of the accused where it is contended that in Ground (e) that there are fatal flaws in the case for the prosecution, it is contended by the prosecution that such a submission is irrelevant to the determination of whether a stay of proceedings should be ordered. It is contended that far from the contentions of the accused, the prosecution case is in robust health.

50. In relation to the contention by the prosecution in Grounds (f) and (g) that there has been unacceptable delay, the prosecution have offered a chronology. As I have indicated above, I combined the prosecution chronology with the chronology offered by the defence. In relation to the events which occurred, the prosecution contends, in effect, that a good deal of time was wasted in aspects of the conduct of the Preliminary Inquiry.[40] Further, prior to the setting down of the first trial, argument was set down for 3 to 6 February 2015 to hear arguments on the admissibility of evidence obtained in New Zealand. The basis of that argument was that the defence had not been informed of the depositions taken in New Zealand might be used at the trial.[41] Implicit in this point is a contention that time was wasted waiting for the resolution of that argument. The prosecution also contend that a great deal of time was wasted after the Court of Final Appeal handed down its judgement ordering a retrial. That was handed down on 30 August 2019. The prosecution relies on correspondence with those representing the parties. It was requested that the retrial be set down to commence either in or after January 2021 to accommodate counsel’s diaries. In the result, the trial was set down to commence on 11 January 2021. Further, the prosecution pointed to the fact that those representing the 2^nd Accused informed the prosecution and the Court that they were not in funds and as a result, the trial was adjourned to 8 February 2021. In short, the prosecution contends that there has been a good deal of time lost and, in some instances, wasted in these proceedings. It is contended that this is relevant to the issue of a stay of proceedings.

DETERMINATION

Chronology

51. Both sides have provided a chronology. Rather than set out two chronologies in the summary of argument, what I have done is set out one chronology which takes account of the contentions of both sides and is expressed in somewhat more neutral language. The sequence of events and the time taken for some of those events to unfold (such as the Preliminary Inquiry and the first trial of these proceedings) is critical to any proper evaluation of the competing contentions under all of the heads of argument. The chronology is as follows:

16 Dec 2010 1^st Accused and 2^nd Accused arrested and charged with conspiracy to defraud and money-laundering.
31 Jul 2011 3^rd Accused arrested on arrival in Hong Kong.
26 Oct 2011 Worldwide restraint order imposed against each accused and the wife of the 1^st Accused.
Wife of the 1^st Accused arrested and charged with money laundering.
14 Sep 2012 The accused elected a Preliminary Inquiry.
7 Jan 2013 to 13 Feb 2014 Preliminary Inquiry pursuant to Part III of the Magistrates Ordinance, Cap 227. All of the critical witnesses in the subsequent trials testified in the Inquiry. All accused committed for trial to the Court of First Instance.[42]
7 Oct 2013 to 25 Aug 2014 Trial before the District Court of wife of 1^st Accused and Wu Wing Kit[43] on money-laundering charges.[44] Both were convicted. They appealed against their convictions.
13 Oct 2015 to 29 Apr 2016 Trial in the Court of First Instance of the accused on charges of conspiracy to defraud and money-laundering.
26 May 2016 Appeal against conviction by wife of 1^st Accused and Wu Wing Kit allowed. Retrial ordered.[45]
6 Jun 2016 Sentencing of the accused. Total sentences were:
1^st Accused - 7 years and 9 months’ imprisonment
2^nd Accused - 8 years and 3 months’ imprisonment
3^rd Accused - 5 years’ imprisonment
The accused lodged appeals against conviction.
1 Sep 2017 Verdict on retrial of wife of 1^st Accused and Wu Wing Kit. Both acquitted.
21 Feb 2017 Application by 1^st Accused for bail pending appeal - refused.
12 Apr 2017 Application by 2^nd Accused for bail pending appeal - refused.
18 Jul 2017 to 28 Jul 2017 Appeal against conviction by accused to the Court of Appeal.[46]
16 Apr 2018 Appeal against conviction to Court of Appeal dismissed.
14 Dec 2018 Application for leave to appeal to the Court of Final Appeal granted. Bail pending appeal granted to each accused.[47]
30 Aug 2019 Appeal to the Court of Final Appeal allowed and retrial ordered.[48] The accused complain that they were not given the opportunity to oppose the order for retrial.
10 Oct 2019 Letter from those representing the accused asking for the trial to be fixed for after January 2021 to accommodate counsel’s diary.
8 Jan 2020 Order for costs in favour of accused.[49]
11 Nov 2020
11 Jan 2021 Solicitors for 2^nd Accused informed the Court that they were not in funds.
Date fixed for retrial.
8 Feb 2021 Adjourned date of retrial. The original date (11 Jan 2021) was adjourned in the hope that 2^nd Accused could come to some arrangement about legal funding for the retrial.
18 Feb 2021 Accused arraigned on retrial.
16 Jun 2021
6 Aug 2021 Discharge of jury.
Ruling awarding costs of the retrial to accused.

Principles that govern the disposition of this case

Terminology

52. As a matter of terminology, a retrial in its strictest sense is something that the Court of Appeal may grant on an appeal against conviction being allowed: section 83E(1), Criminal Procedure Ordinance, Cap 221.[50] The power to order a retrial under section 83E(1) arises “if it appears to the Court of Appeal that the interests of justice so require”.[51] The power of the Court of Final Appeal to order a retrial is to be found in section 17(2) of the Hong Kong Court of Final Appeal Ordinance, Cap 484.[52]

53. An order for a retrial pursuant to section 83E is procedurally different to the situation where a jury is discharged from rendering a verdict in a trial on indictment. Section 83E(2) imposes very specific limitations on the charge that the accused can face on such a retrial. Section 83F deals with a number of procedural matters. Perhaps, the most important is section 83F(4) which, through the Sixth Schedule has an important impact on modes of proof and the sentence which might be imposed on a conviction following a retrial. Section 2 of the Schedule 6 empowers the Court of trial on the retrial to sentence to impose a sentence different to that imposed on the earlier trial. While the evidentiary aids-to-proof in section 1 of that schedule are, in a very strict sense, different to the common law provisions for admissibility of evidence on the further hearing of a case, the differences are subtle and irrelevant for present purposes.

54. There are differences of more substance between a retrial in the sense that this word is used in the context of section 83E and a further trial on the same indictment following the discharge of a jury. The first is that pursuant to section 83E there must have been a conviction. In the context of a discharge of the jury that may occur at many different stages of the trial. Sometimes that discharge might occur very early in a trial and very different dynamics operate in such case. In the legal history of Hong Kong there has been a case where in relation to a single indictment, juries were discharged twice on the strength of things said improperly in the opening by the prosecutor. In that specific case, a third jury was empanelled in the trial proceeded. In such a case, it would be difficult to contend that a trial with a third jury caused injustice. These events occurred within days of each other and not a word of evidence had been given. One of the proceedings in the case of HKSAR v Liang Yaoqiang [2021] HKEC 3139, [2021] HKCFA 26, involved a jury being discharged part of the way through the testimony of the first prosecution witness. The cause of that discharge was press coverage arising out of some of the salacious aspects of the testimony of that witness.

55. The attribution of fault to the event or events which triggered the discharge of the jury varies. In some cases, fault could conceivably be relevant to whether a further trial on that indictment proceeds. Indeed, in the instant case, part of the case for the accused in submitting that the jury should be discharged was an allegation that the prosecution had been at fault for the situation which arose. As a matter of history, I rejected that allegation upon the basis that no one could have foreseen the answers from the witness which gave rise to the set of circumstances which triggered the discharge of the jury.[53]

56. By definition, to face in order for a retrial under section 83E, the accused will have gone through a full trial and have had to face a guilty verdict and have been the subject of a sentence. It is no small thing to say that a person in that situation has to face the fact that they have been convicted, and that will be their status until their appeal is heard and determined. In the present case, the accused have had the experience of a guilty verdict, a sentence of imprisonment, an unsuccessful appeal to the Court of Appeal and a successful appeal to the Court of Final Appeal with an order for a retrial. When the order for discharge in the second trial occurred - the trial occasioned by the order for a retrial by the Court of Final Appeal - the trial was still in the prosecution case. The prosecution case had almost come to a conclusion.

Further trial where two previous juries have disagreed

57. The defence submits that the relevant factors which inform the discretion to permit a further trial on the present indictment may be derived from Bell (above). In that case, the English Court of Appeal (Lord Judge CJ, Simon & Royce JJ) were considering whether to order a retrial following a successful appeal to that Court.

58. The context in which that issue arose is quite important. A judge and jury had earlier tried the appellant on two occasions the jury was discharged from rendering a verdict. It appears that on both occasions the reason for discharging the jury was that it could not agree on a verdict. Following the second discharge of the jury, the prosecution indicated that it intended to proceed with a third trial. Submissions to resist such a course were made by those representing the accused. The trial judge rejected that submission and a further trial was held on the same indictment. In that third trial, the accused was convicted. He appealed to the Court of Appeal. It was contended on appeal that the trial judge wrongly permitted the prosecution to proceed with the third trial on the same indictment.

59. In the course of submissions, the Court noted the point that the jury is empanelled for the first and second trial had not determined whether or not the accused was guilty. Of that submission, Lord Judge CJ, giving the judgement of the Court of Appeal held: “There is perhaps a danger of overlooking that the appellant was not acquitted at either of the two previous trials. A second re-trial is not an appeal against an acquittal; there has been no verdict. Its purpose is to establish whether the appellant has been proved to be guilty, or whether the true verdict should be that he is not guilty.”[54]

60. In considering the broader point, Lord Judge CJ observed:

“25 It was submitted by the prosecution that the judge was confined to deciding whether or not the decision of the Crown to proceed to a third trial was reasonable or unreasonable within the ambit of what, for shorthand, were identified as the Wednesbury principles [Association Provincial Picture Houses Ltd v Wednesbury Corp[1948] 1 KB 223]. The judge rejected the submission, acknowledging that the first decision whether a second re-trial was in the public interest should be made by the prosecution, but that it remained open to him to consider that question and decide whether or not the proposed second re-trial would be oppressive and unjust. We agree with the judge. The questions whether the public interest required a second re-trial and whether such a re-trial would be oppressive and unjust were inextricably linked. The Crown rightly addressed both. The decision to proceed was made, as it had to be made, in the round. But once made, the processes of the court were engaged, and the court has exclusive control over those processes. The ultimate question for the judge was whether the interests of justice (which require a fair trial in circumstances which are neither oppressive nor unjust) justified a second re-trial.
26 The judge reflected on all the relevant considerations and concluded that notwithstanding that there would almost certainly be no fresh evidence, so that a second re-trial would indeed replicate much of what had gone on at the previous trial, that feature was “outweighed … by the fact that this is a case of the utmost seriousness, namely, the alleged murder of a defenceless girl for sexual motive and by the strong public interest in the achievement of a positive decision and thus finality, if possible”. He noted that if the Crown decided that less evidence should be called at the second re-trial, it would be possible to ensure that no unfairness or disadvantage would be occasioned to the defendant, because the court could require the Crown to tender any witness it was no longer intended to call. Accordingly a second re-trial was appropriate.”

In the result, the English Court of Appeal held that the appellant had received a fair trial and the decision of the trial judge to permit the third trial to proceed was an appropriate one.

61. Nevertheless, the English Court of Appeal held that broader considerations applied. The Court was reluctant to provide guidelines. The Court observed:[55]

“We doubt the value of offering further guidance on the circumstances in which a second re-trial may be appropriate. We shall confine ourselves to reminding the Crown that the jurisdiction which permits a second re-trial after two jury disagreements in circumstances like the present must be exercised with extreme caution. The broad public interest in the administration of criminal justice leads us to the clear view that a second re-trial should be confined to the very small number of cases in which the jury is being invited to address a crime of extreme gravity which has undoubtedly occurred (as here) and in which the evidence that the defendant committed the crime (again, as here) on any fair minded objective judgment remains very powerful.”

Retrial under section 83E

62. In HKSAR v Zhou Limei (No 2) (2020) 23 HKCFAR 169, the Court of Final Appeal reviewed the principles which inform the discretion to order a retrial pursuant to section 83E(1) of the Criminal Procedure Ordinance. As already noted, the statutory criterion for making such an order is that the interests of justice so require. In Zhou Limei (No 2), Ma CJ observed:[56]

“The following principles, distilled from the above and other cases, are relevant in the present case:
(1) Whether or not a retrial should be ordered is a matter of discretion. This discretion is usually exercised, as it should be, by the Court of Appeal, relying on their “collective sense of justice and common sense.” And, as was put by Lord Bingham of Cornhill, there must be “an informed and dispassionate assessment of how the interests of justice in the widest sense are best served”; it is important to maintain “confidence in the efficacy of the criminal justice system.”
(2) The discretion whether or not to order a retrial depends entirely on what justice requires (this being the “critical question”).
(3) The interests of justice of course include a consideration of an accused’s interests and circumstances. The criminal justice system is there to bring matters to a conclusion without undue delay and without oppression; these are “accepted norms”. It should be acknowledged that any criminal trial is to some degree an ordeal for the accused. The interests of justice also include the interest of the public in seeing those who are guilty of serious crimes brought to justice and not escape merely because of a technical error in the conduct of a trial or in the summing up to a jury. In Au Pui Kuen v Attorney General of Hong Kong, Lord Diplock referred to the following passage from the judgment of Gould Ag CJ in Ng Yuk Kin v The Crown: that there may be cases where it “is in the interest of the public, the complainant, and the appellant himself that the question of guilt or otherwise be determined finally by the verdict of a jury, and not left as something which must remain undecided by reason of a defect in legal machinery”. In assessing the public interest, a court must take into account the views of the prosecution which is best qualified (and I would add has the duty) to present the views of the public, although it must ultimately be for the court to determine what is in the public interest. The strength of the prosecution case is also a relevant consideration.
(4) The interests of justice require all relevant factors, both for and against a retrial, to be taken into account. Such factors will not only vary from case to case, but their relative importance and weight will also be different in any given case.
(5) The above said, one factor that must be given significant weight is the fact that the accused has already undergone a trial, in particular where the trial is long and complex. This is all the more so when there is involved a second retrial, which means of course the possibility of a third trial for the same offence. In Mok Kin Kau v HKSAR, the ordering of a second retrial after two concluded trials and appeals, and the serving of the whole sentence, was said to be an “unusual course” and in such a situation, in the absence of a special or compelling reason, this was a “departure from accepted norms” sufficient to constitute a substantial and grave injustice. Although it is not unprecedented for a second retrial to be ordered, the cases accept that this is an “unusual” course to take, even where the accused has not served the whole of his or her sentence as was the case in Mok Kin Kau v HKSAR. Given that the ordering of a second retrial is an unusual course, a court would have to be persuaded by cogent and compelling reasons to make such an order. This is consistent with the interests of justice, but of course all relevant factors must be carefully weighed in this exercise of discretion.
(6) Another factor that should also be taken into account is the time that an accused has spent in custody and in relation to this facet, the time that an accused has been in custody will have to be seen against the likely sentence that he or she might receive on a retrial.”

63. This summary of principles was adopted by Cheung CJ in Liang Yaoqiang (above). Cheung CJ characterised these principles as “well-established”.[57]

64. The essence of the decision in Bell (above) was that two characteristics were identified which had to be satisfied prior to a second retrial taking place: (a) that the alleged offence was one involving a crime of extreme gravity, and (b) that the evidence against the accused on any fair-minded objective judgment remained very powerful. The decided cases stated that permitting a case to go forward to a second retrial would be the exception rather than the rule and it required the most careful consideration by a judge before he permitted such a retrial to take place. The decision in Bell (above) was followed in R v Ali [2011] EWCA Crim 1260, [2011] 3 All ER 1071, [2011] 2 Cr App R 22.

65. The issue was further considered in R v Burton [2015] EWCA Crim 1307, [2016] 1 Cr App R 7. In that case, the appellant was convicted of conspiracy fraudulently to evade the prohibition on the importation of a Class A drug, namely cocaine. On appeal, there were two principal issues. The first was whether the appellant should have been tried at all. This was a case where there have been two previous trials where the jury had not been able to agree. In the third trial, the trial judge, in permitting the prosecution to proceed, gave brief reasons. In the result, the principles articulated in Bell (above) were accepted as correct by the English Court of Appeal. They held that the judge who had permitted the third trial to proceed had not given adequate reasons for adopting the position. The Court reviewed the decision of the judge at trial. The assessment of the Court was that the case was serious but within the approach in Bell (above) not quite serious enough.[58] However, the Court was clearly unpersuaded that there was strong evidence against the appellant.[59] The Court observed that the rule requiring strong reasons for a third trial subsumed the overall interests of justice. The Court observed:[60]

“Turning to the wider interests of justice it seems to us that some of the relevant considerations such as the need for finality and the need to prevent oppression by the Crown seeking repeated trials until it can secure a guilty verdict are already built into the process by reason of the identified convention that ordinarily a second retrial will not be permitted.”

66. It appears, however, that the Court also was prepared to allow the appeal on defects which occurred within the trial.[61]

67. In my opinion, the principles articulated in Bell (above) and the authorities which follow it do not establish a hard and fast rule. It is based on the obvious and sensible proposition that if a case on indictment has been fairly presented twice and on each occasion a jury is unable to agree on a verdict then there would need to be something fairly compelling to justify that a further trial on that indictment should proceed. What Bell (above) says is in two parts. The first is that it enjoins a prosecuting authority to think very hard before embarking on a third trial on an indictment in the circumstances where a jury has been unable to agree in two previous trials on that indictment. If the prosecuting authority is determined to proceed, then it is open to the Court of trial to refuse to permit such a third trial. If such a trial was permitted by the Court of trial, and if the accused was convicted on that third trial it would be open to an appellate court to allow an appeal against conviction on the basis that the determination of the Court of trial to permit such a trial to proceed miscarried. The basis upon which judicial intervention either of the court of trial or, following a conviction, on appeal should be permitted (a) that the alleged offence was one involving a crime of extreme gravity, and (b) that the evidence against the accused on any fair-minded objective judgment remained very powerful. The decided cases stated that permitting a case to go forward to a second retrial would be the exception rather than the rule and it required the most careful consideration by a judge before he permitted such a retrial to take place. Lord Bingham held that permission to allow a further trial in these circumstances but the decision depends “on an informed and dispassionate assessment of how the interests of justice in the widest sense are best served.”

68. The position in the instant case is, from a procedural standpoint, clearly different. In the first case, the trial went to a conclusion and resulted in verdicts of guilty. There are, of course, distinctions between the present indictment and the former indictment. The flaws in that former indictment were identified by the Court of Final Appeal. I do not think that the identification of these flaws can be characterised as a mere technicality. Nevertheless, the evidence and the issues in the trial which resulted in the conviction being quashed because of flaws in the indictment is, in substance pretty much the same as the evidence and issues in the retrial ordered by the Court of Final Appeal. Certainly, the prosecution case has been the same in both proceedings. There are obvious differences of approach in the manner of the conduct of the defence as between the first trial and the retrial. But to discuss the differences always runs the risk of missing the broad similarity between the two proceedings so far as evidence and issues are concerned.

69. While procedurally the determination of whether to order a retrial is different to dealing with the decision to permit a further trial on the same indictment where two previous juries have not been able to agree, I regard the considerations which drive that determination as, within limits, essentially the same. It is true that an appellate court has information how a jury viewed the evidence in the prosecution case when, following a conviction, such an appellate court determines to quash the conviction and possibly order a retrial. However, information about how the jury approach the evidence at the trial which produced the conviction which is quashed might be illusory. This is because the jury may have been distracted by inadmissible evidence or being permitted to undertake prohibited reasoning. Accordingly, when determining whether to order a retrial, the verdict of the jury in the impugned trial may not be of much assistance.

70. Section 83E provides the statutory criterion for the determination of whether or not to grant a retrial. In Zhou Limei (No 2) (above), the Court of Final Appeal has articulated a number of the considerations which inform the manner in which the statutory criterion should be exercised. Making allowance for the difference in the procedural position between acceding to a further trial in the Bell (above) situation and the grant of a retrial, it seems to me that the considerations which inform the discretion are fundamentally the same. Ma CJ in Zhou Limei (No 2) was careful to make the point that the list of considerations which might inform the exercise of the discretion to order a retrial under section 83E was not an exclusive list. Further, the weight to be attached to any consideration will vary according to the circumstances. In both Zhou Limei (No 2) and Liang Yaoqiang (above) there was abundant evidence to establish the offence charged, but other considerations informed the decision. In neither case did the issue of whether the accused could obtain a fair trial fall for consideration by the appellate court when it determined that it was in the interests of justice to require a retrial. The right to a fair trial is constitutionally guaranteed. Nevertheless, in my opinion it would be absurd to say that fair trial issues would not be relevant in either the Bell (above) situation or the section 83E situation.

71. A further consideration which is capable of being considered under either the Bell (above) situation or the section 83E situation is the time taken including likely future time taken to bring a case to resolution. In my opinion, undue delay is well capable of being a cogent consideration in the determination of whether to permit a further trial under the Bell (above) situation or to order a retrial in the section 83E situation. Both situations require consideration of the overall interests of justice and given that the right to a trial without undue delay is guaranteed by Article 87 of the Basic Law I cannot conceive of how considerations of undue delay would not be relevant to the determination in either the Bell (above) situation or the section 83E situation. Indeed, the issue of whether to grant a stay of proceedings because the Court finds that there has been undue delay is, as the authorities clearly demonstrate (as to which see below), the right to a fair trial is central to that consideration.

Delay

Principles engaged

72. The community expects that those charged with criminal offences will be tried without undue delay. That is a right vested in an accused person and guaranteed by Article 87 of the Basic Law.[62] Where there is an issue of delay, the determination of whether such delay can be characterised as undue delay and if it can be so characterised what the consequences are is determined by considering a wide variety of factors. This is because delay and more particularly undue delay has to be considered in the context of other factors that comprise the public interest in the just disposition of criminal proceedings. Central amongst those other factors are:

(1) The concern is that those who are charged with criminal offences have those charges determined according to law; and
(2) In determining a criminal charge, the accused is given a fair trial.

73. In addition, there will be cases where the interests of victims of criminal conduct are relevant considerations. These considerations include resolution and sometimes vindication of interests and the bringing of what is sometimes termed closure. There will also be cases where the interests or circumstances of the accused other than his or her interest in a fair trial will be a relevant consideration.

74. One of the best lists of factors to be considered in dealing with issues of delay comes from Jago v District Court (NSW) (1989) 168 CLR 23. In that case, Deane J suggested that the considerations which a Court ought to take into account in considering the issue of undue delay are as follows:[63]

(1)   the length of the delay;
(2)   reasons given by the prosecution to explain or justify the delay;
(3)   the accused’s responsibility for and past attitude to the delay;
(4)   proven or likely prejudice to the accused; and
(5)   the public interest in the disposition of the charges of serious offences and in the conviction of those guilty of crime.

75. Deane J was careful to characterise the list as a list of considerations and not a definitive guide. His Honour held that these headings “provide convenient reference points for answering the question whether the effect of a delay in a particular case is such as to bring about a situation where any trial will necessarily be an unfair one from the accused’s point of view or a situation where the continuation of proceedings would be so unfairly oppressive that it would constitute an abuse of process. They should not, however, be treated as a code or permitted to divert attention from the fact that what will ordinarily be involved in answering that question is the formation of a value judgment in the context of the nature and seriousness of the alleged offence and having regard to all other relevant circumstances.”

76. Deane J’s list must be placed in context. In Australia, there was at the time of Jago (and remains) no constitutionally based free-standing right to a trial without undue delay. In Jago, the High Court of Australia held that there was not a freestanding right to trial without undue delay but held that undue delays should be considered in the context of the right to a fair trial.

77. The seminal decision on this topic is Attorney General’s Reference (No 2 of 2001) [2003] UKHL 68, [2004] 2 AC 72. In the context of a contention of delay in the context of a right to trial without undue delay which was constitutionally guaranteed, Lord Bingham held:[64]

“If, through the action or inaction of a public authority, a criminal charge is not determined at a hearing within a reasonable time, there is necessarily a breach of the defendant’s Convention right under article 6(I). For such breach there must be afforded such remedy as may (section 8(I)) be just and appropriate or (in Convention terms) effective, just and proportionate. The appropriate remedy will depend on the nature of the breach and all the circumstances, including particularly the stage of the proceedings at which the breach is established. If the breach is established before the hearing, the appropriate remedy may be a public acknowledgement of the breach, action to expedite the hearing to the greatest extent practicable and perhaps, if the defendant is in custody, his release on bail. It will not be appropriate to stay or dismiss the proceedings unless (a) there can no longer be a fair hearing or (b) it would otherwise be unfair to try the defendant. The public interest in the final determination of criminal charges requires that such a charge should not be stayed or dismissed if any lesser remedy will be just and proportionate in all the circumstances. The prosecutor and the court do not act incompatibly with the defendant’s Convention right in continuing to prosecute or entertain proceedings after a breach is established in a case where neither of conditions (a) or (b) is met, since the breach consists in the delay which has accrued and not in the prospective hearing. If the breach of the reasonable time requirement is established retrospectively, after there has been a hearing, the appropriate remedy may be a public acknowledgement of the breach, a reduction in the penalty imposed on a convicted defendant or the payment of compensation to an acquitted defendant. Unless (a) the hearing was unfair or (b) it was unfair to try the defendant at all, it will not be appropriate to quash any conviction. Again, in any case where neither of conditions (a) or (b) applies, the prosecutor and the court do not act incompatibly with the defendant’s Convention right in prosecuting or entertaining the proceedings but only in failing to procure a hearing within a reasonable time.”

Lord Bingham cited with approval Martin v Tauranga District Court [1995] 2 NZLR 419 and in particular the judgment of Hardie Boys J where he observed: “The right is to trial without undue delay; it is not a right not to be tried after undue delay. Further, to set at large a person who may be, perhaps patently is, guilty of a serious crime, is no light matter. It should only be done where the vindication of the personal right can be achieved in no other satisfactory way.” The decision in Attorney General’s Reference (No 2 of 2001) (above) has been consistently followed.[65]

78. In A-G v Cheung Wai Bun [1994] 1 AC 1, [1993] 1 HKCLR 249, Lord Woolf, following the decision in Attorney General’s Reference (No 2 of 2001) (above), indicated that if there was a difference between the considerations at common law and with respect to a constitutionally guaranteed right, the circumstances in which it was likely to matter were very limited.

79. The decision in Attorney General’s Reference (No 2 of 2001) (above) was decided in the context of whether or not a stay of proceedings should be ordered. Undue delay in criminal proceedings is one of a number of bases upon which a stay of proceedings might be ordered. Indeed, it is clear from the passage cited above from Attorney General’s Reference (No 2 of 2001) that the general principles about the exceptional nature of a stay are of the order the grant of a stay of proceedings on that basis.

80. It is appropriate to note the nature of the remedy of stay of proceedings. Lee Ming Tee & Anor (above) stands for the proposition that the staying of criminal proceedings would only be justified in highly exceptional circumstances. A stay would be granted if, first, notwithstanding the range of remedial measures available, a fair trial for the accused was impossible and continuing the prosecution would amount to an abuse of process. Secondly, in very rare cases, a stay might be granted, although the fairness of the trial was not in question, because the circumstances involved an abuse of process which so offended the Court’s sense of justice and propriety that the entire prosecution was tainted as an abuse of process. What is critical is the reason why such a remedy is exceptional. Ribeiro PJ observed:[66]

“There are cogent reasons why in principle and in practice such stays are highly exceptional.
In the first place, it is only in very unusual circumstances that a court can properly be satisfied that a fair trial is ‘impossible’. The ‘fairness’ achievable is judged in practical and not absolute terms. As Brennan J pointed out in Jago v District Court of New South Wales (1989) 168 CLR 23 at p.49:
‘If it be said that judicial measures cannot always secure perfect justice to an accused, we should ask whether the ideal of perfect justice has not sounded in rhetoric rather than in law and whether the legal right of an accused, truly stated, is a right to a trial as fair as the courts can make it. Were it otherwise, trials would be prevented and convictions would be set aside when circumstances outside judicial control impair absolute fairness.’
More importantly, the court’s primary endeavour is to ensure that a fair trial takes place, employing the law’s available resources, and not to abort it on the ground that fairness cannot be attained, save as a last resort.”

Ribeiro PJ also cited[67] a passage from Lord Lowry in R v Horseferry Road Magistrates Court, ex p Bennett [1994] 1 AC 42 as follows:[68]

The discretion to stay is not a disciplinary jurisdiction and ought not to be exercised in order to express the court’s disapproval of official conduct. Accordingly, if the prosecuting authorities have been guilty of culpable delay but the prospect of a fair trial has not been prejudiced, the court ought not to stay the proceedings merely ‘pour encourager les autres.’”

81. In short, there is a high public interest in the fair determination of criminal proceedings – especially proceedings alleging serious criminality. That interest exists no less when considering to permit a third trial on an indictment where two previous juries have disagreed. Lord Bingham’s test in Bowe (above) based “on an informed and dispassionate assessment of how the interests of justice in the widest sense are best served.” It must surely include this aspect of the public interest. In my opinion the same is true in determining whether to order a retrial. Ma CJ in Zhou Limei (No 2) (above) said so.[69]

Application to the present circumstances

82. The trial in these proceedings came to an abrupt and unfortunate end for the reasons I have examined in my ruling in which I ordered the discharge of the jury. Contrary to the submissions of the accused, I attribute no fault to either party. The basis upon which I discharged the jury was that a witness revealed critical and prejudicial information about the 1^st and 2^nd Accused, which no one could have foreseen coming out of the mouth of that particular witness. I agree with those representing the accused that it was not the fault of the accused.

83. The result is that it has taken a very long time to get to even this stage of the proceedings. Part of the reason that it is taken so long to get to where we are at the moment can be laid at the feet of the accused. I am not in a position to assess whether time was wasted in the Preliminary Inquiry before the Magistrate. There is more than a hint in the submissions of the prosecution that this was the case. It is true that a long time was taken on that proceeding but I am not in a position to come to any conclusion about whether it was a waste of time. The fact of the matter is that it took a long time for the first trial to be listed and the trial itself took a long time. The appellate proceedings which followed the first trial in their own way took a long time. While it would have taken some time to re-list the proceedings following the order for retrial by the Court of Final Appeal, clearly, a substantial proportion of the time between the order made by that Court and the hearing date before the Court of First Instance can be attributed to the desire of the accused to have specific counsel.

84. I do not doubt that the combination of circumstances both personal and economic articulated in the submissions on behalf of the accused have caused anxiety and frustration. That these proceedings have been protracted has, no doubt, exacerbated the position. A substantial part of the freedoms of the accused which have been cut down in this case have been caused by the civil proceedings. It takes little imagination to see the economic or financial consequences of those proceedings on each of the accused. That includes issues about the funding of their defence in the present and any future proceedings. It would be inappropriate for me to express any views about the merits of those proceedings or the appropriateness of bringing and maintaining the civil proceedings. I accept as true that the accused have suffered the obvious consequences of orders made in connection with those proceedings. In the specific case of the 1^st Accused, no doubt the anxiety produced by the proceedings against his wife have also had an impact on him. I have also taken careful account of the difficulties suffered by the 2^nd Accused and the 3^rd Accused in consequence of the criminal and civil proceedings. One of the points made by each of the accused is that while they are on bail at present, their various ties both personal and economic are largely in places other than Hong Kong. These facts and circumstances are greater than many if not most accused persons have to endure when facing accusations of serious criminality. However, those facts and circumstances suffered by the accused in the present case nevertheless do not provide a basis upon which this Court could interfere with the continuation of otherwise regular criminal proceedings.

85. This case concerns events in parts of 2008, all of 2009 and parts of 2010. It is idle to perform a precise calculation but the events the subject of these proceedings occupy about 24 months. The case itself, even to arrive at the present stage has taken a very long time. It is appropriate to consider the matter by reference to the considerations propounded by Deane J in Jago (above).

Deane J’s considerations

The first three considerations

86. The first consideration is the length of the delay. Given the nature of criminal proceedings and particularly given the nature of criminal proceedings where a complex and serious crime is alleged, there will be of necessity a good deal of time taken up between institution of proceedings and the ultimate resolution of those including appellate proceedings. In my opinion, although I was not and am not privy to the decisions taken as to how and when matters were listed, that aspect of the process appears to me to be appropriate. The time taken between the order for committal and the commencement of the first trial is about 1 year and 9 months. Neither party has contended that this was inordinate. The time taken for investigation and decision-making as to what charges to prefer appears to be appropriate. A long time was taken between charge and the commencement of the first trial. Some of that was taken up with the Preliminary Inquiry which went for what appears to me to have been a very long time. The first trial and the appellate proceedings took time commensurate with the nature of the proceedings and the issues which arose. I cannot say how long it should have taken to start the retrial after the order for such a retrial, but I have difficulty accepting that it would have taken between August 2019 and January 2021. The retrial, itself was consistent with the kind of issues, reasonably expeditious. Nevertheless, taken as a whole, it is inescapable that these proceedings have taken a very long time.

87. The next consideration concerns reasons given by the prosecution to explain or justify the delay. The prosecution suggests that there was delay in the Preliminary Inquiry. They also point to unnecessary time taken up between the order for a retrial in the Court of Final Appeal and the listing of the retrial. The prosecution point to issues about the availability of defence counsel being the cause of a substantial amount of time taken up. As I have already indicated, I do not have sufficient information to make a finding one way or another about delays or time being wasted in the Preliminary Inquiry. That said, instinctively the time taken does appear to be very, very long.

88. Also relevant is a consideration of the accused’s responsibility for, and past attitude to, the delay. In the oral submissions, there was nothing from those representing the accused to gainsay that there was unnecessary time taken up between the order for the retrial and the commencement of the retrial. However, it is not practicable to quantify that. Perhaps more importantly, a substantial number of topics that form the basis of the submissions on behalf of the accused arose before the commencement of the present trial.

89. I consider that the two main issues in Deane J’s list of considerations are (1) proven or likely prejudice to the accused, and (2) the public interest in the disposition of the charges.

Proven or likely prejudice to the accused

90. The issue of proven or likely prejudice to the accused arises in a number of aspects. The accused lay particular stress in their submissions upon the basis that many of the witnesses had difficulty in remembering aspects of the events which occurred in either 2009 or 2010. The appendices to the written submissions in support of the applications presently under consideration outline in considerable detail the memory issues various witnesses had. It is fair to say that different witnesses had different problems.

91. Ms Katherine Chan who was one of the two principal witnesses in the case, in common with many witnesses had difficulty in remembering details. However, in my opinion, as to the central issues in the case which were covered by her testimony she had a reasonably good memory. She was the chairman of 462. She was present when the 1^st and 2^nd Accused brought the proposal in March or April 2009 to her until she was supplanted as chairman of 462 in January 2010.

92. Mr Yip Kean Mun was the other principal witness. He became chairman after the demise of Ms Chan. He was a witness who had more difficulty in remembering details. It may well be that some of the details which this witness purported not to remember were things he would rather not remember. The central area of concern for his testimony involved events in 2010 over the disposition of money from 462 to the 2^nd Accused and whether that was authorised in law. The issue in this regard was complex. The prosecution case was that on no account was the disposition of money of 462 to the 2^nd Accused authorised at the time of the disposition. The case for the defence, and, in particular, the 2^nd Accused was that 462 had authorised such payment and she was entitled to it. It is fair to say that at the time the jury was discharged, this issue was still in the process of being tried. Perhaps, the most critical component of Mr Yip’s evidence concerned his interaction with another director of 462 over the payment of money to the 2^nd Accused. There were a number of possibilities as to how Mr Yip was involved in this aspect. The possibilities included various forms of complicity in the payment (on the assumption it was not authorised) and the possibility that he was negligent or inattentive as to what was unfolding in relation to the payment. Following the payment there was, in due course a series of queries by those in charge of the accounts for 462 as to this payment and its true nature. There was a good deal of evidence about how such a payment was to be treated in the books and accounts of the listed company. I emphasise that these are possibilities and the dangers of expressing a concluded view before all the evidence was in presents manifest dangers. There was a multitude of detailed facts and issues that had to be dealt with by Mr Yip both as to the run-up to the payment and its aftermath.

93. The witnesses from the accounting firm ShineWing from the managing partner to a series of young accountants who went to New Zealand to look at the books and records of the farms which were to be purchased by companies under the control of the 2^nd Accused, each had difficulties in remembering details of some aspects of their task. There were a number of critical components to this task. This accounting firm was appointed by 462 to prepare accounts for the circular to shareholders which is required under the Listing Rules where there was a proposed acquisition of the type contemplated in this case. The case for the prosecution was that the materials wich had to be supplied by the 2^nd Accused had to be historical figures which was past performance of the farms. The case for the accused was that of necessity these figures had to be what were characterised as pro forma figures and, more importantly, the firm of accountants and the staff concerned with the preparation of these accounts well knew that to be true and so did the chairman of 462, Ms Katherine Chan. In short, the case for the accused was there was never any contemplation of anybody being defrauded by these figures. To an extent, the detail of what these accountants learned from the 2^nd and 3^rd Accused was of some importance.

94. Each of the foregoing witnesses was cross-examined in substantial detail. Each of them had testified in the previous trial. That said, there were aspects of that detail that they had not faced in the previous trial.

95. Allied to this issue was a criticism levelled at the ICAC investigators. The submission on behalf of the accused was that the statements they took from witnesses such as foregoing witnesses were, by any measure, superficial and did not refer that witness to what was said to be critical documents in the case. Detailed examples were given in the written submissions and I do not propose to repeat them here. Part of the problem was that the vast majority of documents upon which these people were cross-examined and which revealed difficulties with their memory were documents which apparently were in the unused material. On that premise, so the argument ran, these were documents upon which statements could have been taken when the matter was supposed to be investigated. It is fair to say that a measure of the material produced for cross-examination from unused material amounted to three or four box files for each of the accused.[70]

96. Against that it has to be said that this complaint in part loses sight of the fact that these witnesses have been cross-examined in detail twice before. Once at the Preliminary Inquiry and then in the first trial. Both of those proceedings were considerably closer in time to the events in question. It is probably fair to say that there has been with respect to the conduct of the first trial something of a change of emphasis but viewing the documents which were the subject of cross-examination of these witnesses, perhaps, particularly, the accounting witnesses it is small wonder that they have difficulty in remembering these matters. It is certainly true that when one compares the witness statements taken by the ICAC they do not deal with perhaps even one-third of the documents put to these witnesses in the retrial. When investigators prepared this trial, it is obvious that they saw things in a different light to the way matters have been presented in the present trial. It is also true to say they certainly did not see things in the way that was put these witnesses by the 2^nd Accused and the 3^rd Accused in this trial. With the perfect clarity of hindsight at least some of those documents could possibly have been put to these witnesses when their statements were taken by the ICAC. Certainly not all of them. However, I do not think that any of this prejudiced a fair trial.

97. The point is made by those representing the accused that some documents have been destroyed. What I think is referred to in this regard are the documents concerning Ms Katherine Chan’s instructions to her lawyer and advice rendered by her lawyer in relation to the issue of whether she did some “deal” with the ICAC. The deal hinted that by the defence was a deal of immunity in exchange for testimony. It is right to point out that there was no disclosure of any such arrangement and the prosecution position is, as I understand it, there was no such deal. It is plain beyond argument that if there was such a deal then it must be disclosed. In the course of the trial, Ms Katherine Chan was cross-examined about events which occurred after she was arrested in connection with allegations of misconduct within 462. She was interviewed under caution by officers of the ICAC. She was bailed by the ICAC with a restriction on being able to leave Hong Kong. In the result, she was released from those restrictions and from bail. She then had a series of conversations with the ICAC. I determined that Ms Katherine Chan gave a limited waiver of privilege in relation to her dealings with her lawyer in relation to the first interview that she gave to the ICAC under caution. I held that the waiver did not extend beyond that. In the result, a document summons was issued and although it is fair to say that the issue was not perfectly determined, it was plain enough that the relevant documents had been destroyed. Those documents are, in my view, peripheral to the principal issues of trial. In my opinion, their absence is of little moment in this case.

98. It is also relevant to ask how important the details not remembered or not well remembered were. In my opinion, the relationship between the forest and the trees, in summoning up that hackneyed phrase, is rather apt in this case. For example, it was suggested to Ms Katherine Chan that the whole arrangement was a joint venture rather than the scheme that was revealed in the agreement between the companies standing for 2^nd Accused and 462. The reference to a joint venture came from an early communication from Knight Coldicutt, the New Zealand solicitors for 462. Although it was never truly articulated what that might mean in terms of obligations and benefits for both 462 and the company’s standing for the 2^nd Accused, what Ms Katherine Chan was unable to remember was how it came about that the New Zealand solicitors suggested this might be a joint venture. The central premise underlying the cross-examination was that 462 must have instructed those solicitors to say what they said otherwise they would not have said it. Ms Katherine Chan said that what was important to her was what the final deal was. That was revealed in the agreement signed for and on behalf of 462 on the one part and the companies standing for the 2^nd Accused on the other part. Certainly, Ms Katherine Chan could not recall the issue of how the New Zealand solicitors got this idea but, as she consistently said, what mattered was the final deal signed between the parties.

99. Another example arises in relation to the ShineWing accountants who went to New Zealand. They were unable to remember aspects of their approximately 3-week sojourn in New Zealand. The prosecution case was that there was a conspiracy to put false figures in the shareholders circular and the principal parties who generated those false figures were the 2^nd Accused and the 3^rd Accused. The case for the prosecution was that what was required under the Listing Rules was that the figures be historical figures. Essentially two central issues arose in this context. One was the source of the figures eventually put forward to go in the shareholders circular. The second was whether the accused had agreed to present false figures. There was an issue of whether the accountants were complicit in the figures placed in the circular. Did these accountants, in effect, go along with the figures supplied by the 2^nd Accused and the 3^rd Accused for publication in the circular. Of course, that was only the first link in the chain. From there it had to be established that Ms Katherine Chan on behalf of 462, the shareholders of 462 and the Stock Exchange appreciated the nature of the figures. Ms Katherine Chan denied this. Part of the prosecution case was devoted to the demonstration of the proposition that the figures could not possibly be true. The accountants were cross-examined on these topics at great length and in searching detail. There were many, many details concerning what they were doing in New Zealand and what they were expected to do down there which they could not remember. However, in my opinion, their failure in this regard did not detract from the central issues that have to be faced.

100. Had this case proceeded to a summing up, it would have been necessary to give directions as to the time taken from the events the subject of the indictment to the time when the witnesses came to testify about those events. The obvious starting point for such a direction would be Item 29 of the Specimen Directions issued by the Hong Kong Judicial Institute in 2013. There is, of course, a multitude of Hong Kong, English and Commonwealth authority to assist in the formulation of the appropriate directions in this regard. The direction in the specimen directions would almost inevitably have to be modified to fit the specific circumstances of the instant case. In my judgement, such directions formulated with the assistance of counsel would have fitted the bill in the present trial and, within limits, would do so in any future trial. It would be necessary to articulate in a realistic way, the nature and extent of the forensic disadvantage which might have been suffered by the accused. However, this must be qualified by the fact that the true nature of such a direction would have to take account of all of the evidence and speculating about such a direction in the absence of knowing whether one or more of the accused would testify rather underlines the nature of the speculation. Finally, whether or not the accused testified, the direction would have to tie the issues and problems back to both the burden and standard of proof. The jury would have to be directed that if they considered that the inability of the witnesses to remember certain details was such as to render their testimony unreliable on the central issues of the case then it would not be proper to convict the accused.

101. In my opinion, a proper direction as to the effect of the time taken between the conduct the subject of the indictment and the testimony of witnesses would be a very important weapon to ameliorate the effects of delay. However, in my opinion, it is by no means the only weapon available. In my opinion, there were ample avenues consistent with the due observance of the rules of evidence and procedure which might have avoided in the trial over which I presided and would be capable of avoiding such problems in any future trial. Some of those avenues concern the means available to refresh the memory of witnesses who plainly struggled at times to remember details of the case. It is inappropriate for a trial judge to intervene in the examination of witnesses except to prevent or minimise non-observance of the rules of evidence. There is also a danger in being what the Americans call an armchair quarterback as to how the rules might better be utilised to promote testimony where there has been a full, fair and transparent opportunity for the witness to refresh memory. In fairness, part of the problem is that while these witnesses did not do well in some aspects of the most recent trial, they were, to an extent, hardly any better in the first trial. It might fairly be said that part of this might come back to the criticism advanced in these submissions by those representing the accused that statements taken from some of these witnesses were less than adequate. There is no perfect solution but measuring the assessment of whether the accused could get a fair trial based on the performance of the witnesses at the most recent trial, ultimately I am of the opinion that they can get a fair trial.

Public interest in the disposition of the charge

102. The next issue is the public interest in the disposition of the case. In the present context that gives rise to a number of issues. The first of these issues is the seriousness of the charges levelled against the accused.

Seriousness of the charges

103. In my opinion, the conduct alleged against the accused, if proved, reveals a serious attack on an important part of the economic system in Hong Kong. That economic system depends in substantial part on the operation of publicly-listed companies. Unless the system of public companies is properly regulated and honestly conducted then those who invest in this economic system are at least less likely to do so. So much of the Hong Kong mode of economic activity depends on our reputation as an international financial centre. That reputation is underpinned by proper regulation and the honesty of those who are involved in the market. The Hong Kong model for proper regulation of publicly listed companies requires companies and those connected with the companies to honestly relate to the regulator market-relevant information and information about the operation of the companies. In making critical economic and financial decisions, shareholders depend on the regulator doing its job. That job cannot be done unless regulator receives honest information from those concerned with the operation of companies. Shareholders depend on honest information being given to them by the companies in which they hold shares. In the instant case, the conspiracies alleged are agreements to do acts which, in my judgement, have at least the potential to do great harm, not only to the economic interest of the publicly listed company through dishonest conduct and to interfere with the regulator’s ability to conduct an honest and efficient market in the sphere of publicly listed companies. The wider consequences for the economic activities represented by the conduct of publicly listed companies is an important component of the seriousness of these offences. The sums involved are relevant in that it demonstrates that the charges are not penny-ante charges. The seriousness derives from the economic context which is a context so vital to Hong Kong. That context may be different in other places.

104. There was a submission that after the failure of critical components of the deal such as the refusal by the New Zealand authorities to permit the sale of the dairy farms was, while disappointing, not the end of the story. The submission is that the company has rearranged the deal in a manner which does not require further shareholder approval and is still a deal in the interests of the company. Allied to that is a submission that nobody lost anything in this deal. I regard those submissions as wishful thinking. The suggestion that to leave the matter to the current civil proceedings would mean that the accused would not “get away with it” makes a number of assumptions about the civil proceedings. That submission I also regard as wishful thinking.

105. A relevant measure of the seriousness of this offence can be gleaned from the sentences imposed by Anthea Pang J (as Anthea Pang JA was then) at the first trial. There are two points about the sentence itself. First of all, the Schedule 6 to the Criminal Procedure Ordinance permits the trial judge on a retrial to impose a sentence which is different to that imposed at the proceedings which were the precursor to the retrial. In the event that the trial was to further proceed, it would, in law, be the continuation of the retrial. Had this case gone to its conclusion then I would have taken into account the reasoning and outcome in terms of sentence at the first trial. However, I could not rule out a different sentencing approach. The second point is that it would be appropriate to consider whether the effluxion of time and the stress of having undergone further proceedings might, to an extent, mitigate the penalty which might be imposed. A sentence which did not take that into account what, in my opinion, be a sentence which was imposed contrary to settled sentencing principles.

106. While I consider the sentence to be a relevant measure of the seriousness of the offence, I do not consider it is the only measure. Sentences imposed for trafficking in substantial quantities of dangerous drugs or the only sentence which could be imposed for murder reflect the seriousness of those crimes. Equally, the public interest in dealing with crimes and the nature of those which are the subject of the indictment is not measured by the sentence only. There is a public interest in ensuring that if, after a fair trial according to law those who act (or conspire to act) dishonestly in the context of the economic activity which underlies the indictments in the present case will be convicted and will be punished. The seriousness of the conduct in the present case must also be measured against the potential impact to the economic system upon which Hong Kong depends.

Strength of the prosecution case

107. The next issue is the strength of the case in support of the charges levelled against the accused. The prosecution assert that its case is in robust health. Those representing the defence contend that for two reasons, this is not so. The first is to incorporate the submissions on the intended no case to answer submission. In short, on this basis, it is contended that there are fatal flaws in the prosecution case. The second basis is that the inability of witnesses to remember key details substantially weakens the prosecution case.

108. Subject to one specific consideration, the prosecution case on the basis it was presented by the prosecution is well capable of being accepted by the jury. That was true during the retrial and on the premise that essentially the same case was presented again on a further trial, that would remain true. The specific consideration concerns the ability of some of the witnesses to recall aspects of the case. As I have already noted, the defence make great play of this point. My own assessment is that the core of the prosecution case upon the basis it was presented is clearly there for a jury to consider. I think that as presented, the jury could well convict. As I have already noted, many of the complaints about the inability to remember are as to matters of detail and are not matters at the core of the prosecution case. I think that it is likely that if the same case was presented a properly-directed jury might well convict. However, I perfectly recognise that it would be open to the jury, applying the directions they would receive on the burden and, perhaps more importantly, the standard of proof, that they could acquit. I do not take the injunction in the authorities that a Court should consider the strength of the prosecution case to mean that only “sure-win” prosecution cases would be eligible for further trial. There are two reasons for that. The first is my own experience as advocate and judge is there is pretty close to no such thing as a “sure-win” prosecution case. The second reason is that to refuse to permit basis to proceed upon the basis that there is at least the possibility that the jury may acquit having heard the whole of the case (including, possibly, the testimony of the accused and witnesses called on their behalf) would be to abrogate the responsibility to place cases on indictment before a jury. I can certainly see that there will be clear cases where there is a technical case to answer and nothing but wishful thinking on the part of the prosecutor where it would be wrong to permit such a case to proceed. The present case is not “sure-win”. On the basis of the present prosecution presentation that case is not a technical case built on nothing but hope and prayer. I think it is much stronger than that.

109. The defence say that the case for the prosecution is fatally flawed in a number of respects.

110. The written submissions on the part of the accused that there was no case to answer were delivered in advance of the end of the prosecution case.[71] Given the breadth of those submissions, it was appropriate to do this realising that some adjustment may need to be made to meet the reality of the situation. Some of the submissions could not, on any view, be considered to be “no case” submissions. Given that the prosecution case has not actually reached a stage where a submission of “no case” could be made the only basis upon which the submissions incorporated by reference in the advance “no case” submissions made by the accused is if on the state of the evidence there is no way that the accused could ever be convicted of these charges. In the present set of submissions, those representing the accused place the Court in a difficult position. The submission made by those representing the accused is:[72]

“Given the fatal flaws (both legally and factually) in the case advanced by the Prosecution in relation to each count on the present indictment, it is submitted that it is not in the interest of justice for a further trial to be held. In order to reach this conclusion, the Court does not have to provide a detailed ruling as if determining the issue of a case to answer. But there is an obligation on the Judge who has presided over a 5 month trial to factor into his decision whether to permit a second re-trial his assessment of whether the conduct of the re-trial has exposed significant flaws in the indicted case.”

The same point was made in oral submissions in support of the defence case. With great respect to the authors of those submissions, it is difficult to understand what the Court is being asked to do. The submissions contend that the Court “does not have to provide a detailed ruling as if determining the issue of a case to answer.” The Court is nevertheless asked to determine whether the defence have exposed significant flaws “in the indicted case” and factor that into the decision as to whether to permit a further trial.

111. Many, but not all, of the submissions as to whether there was a case to answer were also made to the Court of Appeal on the appeal against the convictions on the first trial. Those were rejected. I was told that these submissions were to be made before the Court of Final Appeal but things never got that far. Early on in the retrial, the Court was told that the submissions which were intended to be made before the Court of Final Appeal would be made at the end of the case.

112. As to those arguments address to the Court of Appeal and rejected, a highly simplified version of the argument is as follows. The offence of conspiracy to defraud is while not of itself bad for legal certainty,[73] it is capable in either the presentation of the prosecution case or in the manner of drafting the indictment or both to be bad for legal certainty. The contention of those representing the accused is that both the indictment and the presentation of that indictment in the present case is bad for legal certainty. The essence of the complaint is that in the context of the present circumstances, the only way that the prosecution case would not fail that test is if the terms of the Listing Rules qualified the nature of the false representations. I am not sure that I am in strict law bound by the views of the Court of Appeal but I am in respectful agreement with the analysis of the Court of Appeal on this topic. It seems to me that the arguments on this topic presented by those representing the defence introduce an air of unreality into what I consider to be a comparatively straightforward prosecution case. Those representing the accused have invoked Lord Steyn’s observation that in the law, context is everything. I agree. In the specific context of this case as it was presented the presentation and the indictment do not violate the strictures which require legal certainty.

113. The submissions also argue that the directions of the learned trial judge in the first trial as to the continuing effect of the Commission Sharing Agreement entered into between, amongst others, the 1^st Accused and the 2^nd Accused. I imply no disrespect to the Court of Appeal in noting that the Court agreed with Anthea Pang J as to the efficacy of the Commission Sharing Agreement without supplying elaborate reasons. I agree with the conclusion of the Court of Appeal, although if I was called upon to rule upon the topic, I would consider myself bound to give somewhat more elaborate reasons.

114. The other major topic upon which it is said that there are fatal flaws in the prosecution case is the nature of the financial figures placed in the Circular to Shareholders which is the subject of the 1^st and 2^nd Charges on the indictment. The case for the prosecution is that what was required and what Ms Katherine Chan, as chairman of 462 expected was that the figures would be historical figures. The case for the prosecution is that on a proper construction of the Listing Rules the relevant figures had to be historical as opposed to projections as to the future. The figures had to be true. The responsibility for the provision of those figures was the potential vendor of the farms and the owner of those farms was to be a company which was wholly owned by the 2^nd Accused. The prosecution case was that the figures were supplied by the 2^nd Accused and the 3^rd Accused. The conspiracy alleged was that the figures were false figures. The case for the defence was these were hypothecated figures because the company owned by the 2^nd Accused had never traded and therefore the figures could never have been understood as historical figures. Further, the case as put to the relevant accounting witnesses was that they perfectly well knew that the relevant figures were not historical figures of financial performance and by implication that Ms Katherine Chan as chairman knew that. In other words, nobody was defrauded. Everybody who was relevant to the process knew the true nature of the figures. As an issue of fact, this case could properly be put to a jury and they may, applying the burden of proof and the standard of proof, conclude that there is at least a reasonable doubt about the position. However, as presently advised, it would be impossible to say that the case as presented represented a fatal flaw. It will be readily apparent that this is a serious oversimplification of the issues which arise but, in my judgement, that is what they come to. For what it is worth, my prediction based on the evidence as it was presented in the trial over which I presided is that the jury would most likely have found in favour of the prosecution. I certainly could not say that this was a weak case or a case where acquittal was inevitable.

115. The next major issue which was in the process of being litigated at the time that the jury was discharged concerns the issue of whether there had been unauthorised transfer of the NZ$51.6 million to the 2^nd Accused and, in turn, in part to the 1^st Accused. The money in question was part of the funds held in the trust account of the New Zealand law firm of Knight Coldicut who acted for 462. These funds had been raised by 462 and were intended, in due course, to pay the companies of the 2^nd Accused for the interest that was held and was to be injected into 462. The interest that 462 was to acquire was, in two tranches, 20% and then 80% of a company holding the dairy farms which were to be acquired by that company. The issue of whether the payment was unauthorised was circumstantially relevant to the prosecution case that the 1^st Accused and the 2^nd Accused were acting dishonestly. I do not think that the evidence on this topic was absolutely critical to the proof of that matter but it certainly, if true, strengthened the prosecution case to a very substantial degree. If the jury considered that the payment was authorised then not only did that potentially damage the prosecution case, but may also have strengthened the defence case that at all times there was no dishonesty. On the prosecution case, much depended on the construction of the documents. At the time that the jury was discharged the issue as to whether the payment was an authorised was being litigated. It would be impossible for me on the present state of the evidence to assess the likely outcome of this aspect of the case. What I am sure about is that it was and is likely to be on any future trial quintessentially a jury issue.

116. So far as Count 5 is concerned, in the “no case” submissions there are in effect two submissions. First is that if the 1^st Accused has no case to answer in relation to Counts 3 and 4 then the 1^st Accused would be not guilty of Count 5. That proposition is unanswerable. That would be, on any view, a fatal flaw with respect to Count 5. The second proposition is that the 1^st Accused should never have been charged with money laundering because his criminality is said to be sufficiently covered by the 3^rd and 4^th Counts in the indictment. The basis for this is the decision of the United Kingdom Supreme Court in R v GH [2015] 1 WLR 2126. The Supreme Court held that Courts should discourage the use of charges like money laundering where the criminality covered by such a charge covered by other charges.[74] It is difficult to argue with such a proposition. However, the conduct the subject of the present charge is, in my opinion, substantially removed from the criminality which generated the property which was unlawfully dealt in by the 1^st Accused. In my opinion the charge was and remains appropriate. There is certainly no basis on which whether via a no case to answer submission or otherwise which would justify considering that there is a fatal flaw in Count 5.

Shifting the prosecution case

117. The accused submitted that the prosecution has sought to recast their case in the course of the retrial to address what are characterised as fatal flaws in the indicted case.

118. The accused contend that a defendant is entitled to know the case against him as indicted so he can properly defend himself. That is unquestionably true but must be understood by reference to the rules of evidence and procedure which govern a criminal trial. The rules of evidence and procedure seek to ensure that this is achieved in a multitude of ways including reliance on the opening supplied by the prosecution. In a case such as the present case the importance of the opening cannot be understated. However, inevitably issues arise in the prosecution case which may cause a change of emphasis. The authority cited by the accused instances circumstances in which a judge in the summing up tells the jury of a different basis for conviction which was not canvassed in the trial. In Hau Tung Ying v HKSAR (2011) 14 HKCFAR 453, it was held that in appropriate cases, the judge had the power to consider or direct the jury on the case on a basis different from that presented by the prosecution, provided that this was open on the indictment and the evidence, and the parties were first given an opportunity to address the Court. Such a situation must be rare and exceptional. Convictions had been quashed mainly because the defence had not been given the chance to address the Court on the new basis and had thereby suffered a disadvantage or prejudice and an unfair trial.

119. The key issue is notice. While there are obvious limits to that, the prosecution is entitled to give notice that it intends to adduce further evidence. Such evidence may conceivably be an attempt to patch up a deficiency in the prosecution case. There would be issues of notice and timing attendant on giving notice accompanied by such evidence. It may be that it would be necessary to amend the indictment, but this is by no means always necessary. However, there may be circumstances where the proposed recasting of the prosecution case is so fundamental that to permit such a course would be to deny the accused a fair trial. Many of the problems can be ameliorated by notice. The point that is made here is that there may be such a change has is capable of being ameliorated by notice. That said the prosecution cannot re-cast its case into something fundamentally different to the case it started out with even if the re-cast case fits within the indictment. That is not the situation in the present case.

120. The allegation that certain documents produced by the defence in the course of the trial might be forgeries was an issue which have a multitude of dimensions. What became apparent to me was that as the trial wore on the prosecution appeared to retreat from this allegation. The problem arose in relation to certain documents which were put to witnesses which were said to come from a specific source connected with the 2^nd Accused. Towards the end of the trial, the selfsame documents appeared to be capable of being produced from other sources which may have rendered the original assertion somewhat empty. The assertion by the prosecution, viewed by reference to later developments in the trial, might be seen as falling somewhat flat. The bigger issue might have been whether or not to mention it to the jury in the course of the summing up. In planning the summing up, I was torn between not mentioning it at all and directing so as to remove such prejudice as there may have been. My final decision was likely to have been based on closing submissions.

121. Those representing the accused also complained that the foreshadowing or, perhaps, more accurately, the hinting that further witnesses not presently intended to be called was the recognition of fatal flaws in the prosecution case. It is necessary to look at the particularised examples to determine whether they

(1) would have justified interference in the course of the proceedings in the retrial the subject of the discharge of the jury;
(2) whether in relation to foreshadowed conduct on the part of the prosecution such as the treatment of Mr Navin Aggarwal or Mr Wu Wing Kit as unindicted co-conspirators if it came to fruition in a future trial would be so inappropriate as to justify a refusal of permission to permit a further trial; and
(3) whether the prosecutorial conduct revealed in the examples would either justify a belief that there would be further misconduct of this type in any future trial placing in jeopardy the fair disposition of the charges in such a trial.

122. Part of the problem is the submissions of the accused do not identify with precision what they perceive the fatal flaws in the prosecution case to which these shifts in the prosecution’s position are supposed to address.

123. At various stages the idea was floated that Mr Navin Aggarwal (a partner in K & L Gates, Solicitors) who have been acting for 462 was a co-conspirator. As far as I could see, there was no evidence on the papers to support that conclusion. It may be that the investigators of the case and suspect that both the distance between suspicion and evidence may in the present circumstances be substantial. On the state of the evidence and the papers at the time of the discharge of the jury, the allegation that he was a co-conspirator was not soundly based. That there may be other evidence unavailable to the Court which supports this conclusion is possible but there was nothing that I saw which would support that conclusion. The other issue as far as Mr Aggarwal is concerned is that it is not plain how it might be said that he fitted in to the conspiracy. It may be that what the prosecution was really saying was they had not called Mr Aggarwal not so much because he was an unindicted co-conspirator but because they did not trust that he would give full and true evidence. For a good part of the history of these proceedings, Mr Aggarwal was in prison serving a sentence for some very serious defalcations which were not related to the present charges. Although it was not made plain to the Court, there was at least a hint in the prosecution position that Mr Aggarwal was not prepared to cooperate but there was either a belief (or possibly a hope) that he might now be prepared to cooperate and was prepared to be called to explain aspects of the evidence. This would be upon the basis that he was not an unindicted co-conspirator but simply that he could provide insights into some of the critical transactions. If there is such a statement in existence or there may be such a statement in existence in the future then it would have to be disclosed and appropriate notice of additional evidence given. If Mr Aggarwal was presented as an immunised witness on the basis that he was criminally complicit appropriate notice would have to be given of that. I cannot rule out the possibility that this was simply thinking aloud on the part of the prosecutor.

124. In relation to Mr Wu Wing Kit, he was a solicitor acting for the 1^st Accused and who from time to time provided legal services to the 2^nd Accused, the position is broadly the same. He had a closer connection with the 1^st Accused and the 2^nd Accused. There was talk at various times of Mr Wu being a witness. At the time of the conclusion of the present proceedings by the discharge of the jury, the Court was unaware of the existence of any witness statement.

125. As to the truth of the accounts prepared by Mr Mark Stuart King, in what became known in both the trial and the retrial as the “Tab 11” accounts, the prosecution position has always been that what is at issue is not whether these accounts are true but whether the accounts produced by the 2^nd Accused and the 1^st Accused are false. I would expect that this is the manner in which the prosecution intends to present its case at any future trial. In my opinion, there is, in any event, a good deal of circumstantial evidence which supports the correctness of the “Tab 11” accounts including the fact that the accounts produced by Mr King for the previous 2 years were accepted without demur as accurate. Further, it would be open to the jury to infer from the combined evidence of Mr King and the testimony of Mr David Anthony Wiltshire who was head of farm operations at the farms as well familiar with the operation of the farms the subject of the indictments that these accounts were accurate. However, I agree with the prosecution that the real issue is not so much that as whether the accounts prepared by or on behalf of the 2^nd Accused and the 3^rd Accused are false. The case for the prosecution was that these accounts have, at best, a tenuous connection with reality. I can see no basis on which the prosecution would not be permitted to present their case upon that basis at any future trial.

126. The next issue in the examples given of the prosecution unacceptably shifting its case concerns the issue of whether the transfer of the NZ51.6m was “unauthorised”. It has to be remembered that this transfer is not itself the subject of any of the counts on the indictment. It is being used by the prosecution to demonstrate dishonestly on the part of, particularly, the 1^st Accused and the 2^nd Accused and the fact that they continued to work together to, in effect, defraud 462. The assertion that there are issues with the provenance of certain documents produced and relied on by the defence to support the conclusion that there is at least a reasonable doubt as to whether or not the transfer was unauthorised is, in my opinion, a fairly minor aspect of the case. As I have indicated earlier under the heading of issues concerning the shift of the prosecution case, it seems to me that the “provenance” argument had, by the time of the discharge, fallen fairly flat. I apprehend the case for the prosecution on this topic to be substantially broader than authorisation established by the documents produced by the defence including the email of Mr Graham Chin. Indeed, if the sum total of the prosecution case was the doubtful “provenance” of those documents then I would guess that the prosecution case would be close to doomed to failure. I apprehend the core of the prosecution case was that that the contractual documents to which, amongst others, the 2^nd Accused was a party which could be interpreted as not permitting such a transfer at the particular time that it was done and that, accordingly, the transfer was unauthorised. The case for the prosecution is that on the contractual arrangements to which, amongst others, the 2^nd Accused was a party, certain preconditions had to have eventuated at the time of the transfer of any money and those preconditions did not exist.

127. The final example given about the characterisation of Mr Nick Cross and Mr Kerry Knight as untruthful witnesses and were somehow implicated in the unauthorised transfer of the NZ$51.6 million was an issue which was in the process of unfolding when I discharged the jury. Indeed, Mr Knight was testifying at the time that I intervened to discharge the jury. It follows from this that it is very difficult to say anything definitive about this issue. Certainly, I gained the impression that there was (1) no evidence in the testimony of Mr Cross which could justify the conclusion that he was involved in a dishonest way in the creation of documents to give effect to the transfer of the money. It is, of course, one thing for a solicitor in the position of Mr Cross to draft documents (or assist in their drafting) without being complicit in any dishonesty alleged to be involved in the release of funds it on in reliance on those documents and being complicit in an unauthorised release; and (2) there was no real suggestion that this was his position. In my view, any suggestion by the prosecution that he was so complicit would inevitably have fallen flat and would have been dismissed by the jury out of hand. However, I must qualify that observation by saying that not all of the evidence was in at the time. As to Mr Knight, we had only heard a fraction of the evidence that he was going to give. The characterisation of Mr Knight as a “cowboy” was, in my opinion, at least a possibility, but it was way too early for any concluded opinion to be formed. The argument under this head concludes with the assertion “The Prosecutor does not even know of the material in the unused that demonstrates that Mr Knight was acting lawfully and upon instructions.” Given the state of the evidence, I think the best comment I can make on that is that it would be necessary to wait and see.

128. None of the foregoing points under this heading examples provide any basis upon which it would be appropriate for this Court to refuse permission for a further trial to be held. In my opinion, they do not demonstrate that the prosecution had a propensity to adopt reckless and untrue positions when faced with a possibly fruitful assault on the prosecution case.

The “in terrorem” issue

129. In my opinion, this is a non-issue. If there is a witness statement taken from Mr Wu Wing Kit that would be one thing. It would then be necessary to see what that statement says. Finally, the appointment of the undersigned to hear any future trial of this indictment depends on whether or not there is an appointment under section 10 of the High Court Ordinance, Cap 4.

CONCLUSION

130. In light of the facts and circumstances which operate in this case, there is no basis upon which the Court could refuse permission for this matter to proceed to a further trial on the present indictment. To the extent that it is conceptually separate to the refusal to permit the intended trial to proceed, I refuse to order a stay of proceedings. In the circumstances, it is not appropriate to make any order for costs on the hearing of these proceedings.

	(Andrew Bruce, SC)
	Deputy High Court Judge

Ms Charlotte Draycott SC leading Mr Mitchell Neil S, Mr Li Chun Ngai Martin, on fiat and Miss Ng Oi-lam Joycelyn SPP of the Department of Justice, for HKSAR

Mr Tim Owen QC leading Mr Tsoi Y M Benson, instructed by Boase Cohen & Collins, for the 1^st accused

Mr Ian Winter QC leading Mr Cao Yuan Shan and Ms Betty Chiu, instructed by Haldanes, for the 2^nd accused

Mr David A S Khosa, instructed by Hobson & Ma, for the 3^rd accused

[1] Joint Defence Submissions, §2(1).

[2] Joint Defence Submissions, §2(1).

[3] Joint Defence Submissions, §2(2).

[4] These are taken directly from the Joint Defence Notice of Application for Permanent Stay of Proceedings dated 19 June 2021.

[5] Joint Defence Submissions §20 & 21.

[6] Joint Defence Submissions, §22.

[7] Joint Defence Submissions, §19 & 23.

[8] Joint Defence Submissions, §24 & 25. It will be apparent that I have slightly edited those paragraphs.

[9] Joint Defence Submissions, §26.

[10] Joint Defence Submissions, §27 & 28.

[11] Joint Defence Submissions, §29. A Mareva injunction is a form of injunction derived and developed from Mareva Compania Naviera SA v International Bulkcarriers SA, [1980] 1 All ER 213.

[12] Joint Defence Submissions, §30 & 31.

[13] Joint Defence Submissions, §33 & 34.

[14] Joint DefenceSubmissions, §35 & 36.

[15] Joint Defence Submissions, §37.

[16] Joint Defence Submissions, §38 & 39.

[17] Joint Defence Submissions, §40.

[18] Joint Defence Submissions, §42.

[19] Joint Defence Submissions, §43 & 44.

[20] Joint Defence Submissions, §45.

[21] Joint Defence Submissions, §46 & 47.

[22] Joint Defence submissions, §43 (above).

[23] Joint Defence Submissions, §48.

[24] Joint Defence Submissions, §49.

[25] Joint Defence Submissions, §50.

[26] Joint Defence Submissions, §51.

[27] Joint Defence Submissions, §52.

[28] Joint Defence Submissions, §53 & 54.

[29] This submission cites HKSAR v Hau Tung Ying (2011) 14 HKCFAR 453 in support of the contention.

[30] Joint Defence Submissions, §55 & 56.

[31] Joint Defence Submissions, §57.

[32] Appendix II is part of the Circular to Shareholders which is required under the Listing Rules. The Circular was exhibited as Tab 10 of the prosecution bundle entitled “Company Matters (Pt. 1)”. The appendix commences at internal page 202 of that document.

[33] Joint Defence Submissions, §68.

[34] Joint Defence Submissions, §72.

[35] Joint Defence Submissions, §75.

[36] [2010] 1 Cr App R 27, §4.

[37] Bowe and another v Rwas followed in the Court of Appeal in HKSAR v Li Yanhong(No 2) [2016] 1 HKLRD 946.

[38] (2007) 10 HKCFAR 632, §51.

[39] Prosecution Submissions, §17.

[40] Prosecution Submissions, §26 (b) and (c).

[41] Prosecution Submissions, §26 (e).

[42] A fourth person (Ms Miranda Ng) was also accused in the committal proceedings. The learned Magistrate discharged her. 2^nd Accused was discharged on the same charge as Ms Ng.

[43] Mr Wu was the solicitor acting for 1^st Accused. He also advised 2^nd Accused from time to time.

[44] DCCC 1022/2012.

[45] [2016] 3 HKLRD 533.

[46] CACC 172/2016.

[47] The chronology supplied by the accused contends that at the time of their release on bail the accused had served 2 years and 8 months in prison.

[48] (2019) 22 HKCFAR 248.

[49] [2019] HKCFA 51, §11. These were the taxed costs in the original trial in the Court of First Instance; of the applications for leave to appeal to the Court of Appeal and in the appeals to that Court; of the applications for bail pending appeal to that Court; of the applications to the Court of Appeal for certification; of the applications to the Appeal Committee for leave to appeal; and in the appeals to this Court, together with a certificate for three counsel.

[50] Section 83E(1) is, for all practical purposes the same as the power vested in the English Court of Appeal under section 7 of the Criminal Appeal Act, 1968.

[51] There is a power to order a retrial in relation to appeals against conviction by a Magistrate under section 119(1)(d) of the Magistrates Ordinance, Cap 227. Section 119(1)(d) is differently worded but, in practice, the criterion for the exercise of power to grant a retrial is precisely the same.

[52] Section 17(2) provides: “For the purpose of disposing of an appeal, the Court may exercise any powers of the court from which the appeal lies (including the power to order a retrial), or may remit the case to that court.”

[53] HCCC 309/2019, [2021] HKCFI 1751, Judgment dated 18 June 2021, §29.

[54] [2010] EWCA Crim 3, [2010] 1 Cr App R 27, §27.

[55] [2010] EWCA Crim 3, [2010] 1 Cr App R 27, §46.

[56] (2020) 23 HKCFAR 169, §9. Footnotes omitted.

[57] [2021] HKEC 3139, [2021] HKCFA 26, FACC 5/2021, §31.

[58] [2015] EWCA Crim 1307, [2016] 1 Cr App R 7, §38.

[59] [2015] EWCA Crim 1307, [2016] 1 Cr App R 7, §40.

[60] [2015] EWCA Crim 1307, [2016] 1 Cr App R 7. §41.

[61] [2015] EWCA Crim 1307, [2016] 1 Cr App R 7, §63.

[62] See also Article 11(2)(c), Hong Kong Bill of Rights Ordinance which provides the same guarantee.

[63] (1989) 168 CLR 23, 60 & 61.

[64] [2003] UKHL 68, [2004] 2 AC 72, §24.

[65] Cases include: Spiers v Ruddy [2007] UKPC D2, [2008] 1 AC 873; Burns v HM Advocate (HM Advocate General for Scotland intervening) [2008] UKPC 63, [2009] 1 AC 720; HKSAR v Kissel (Stay: Media) [2011] 3 HKLRD 1, [2011] HKEC 439; HKSAR v Liang Yaoqiang [2021] HKEC 3139, [2021] HKCFA 26. It has been so followed in the civil context as well: Moore v Council of the Law Society of Scotland [2015] 12 WLUK 780.

[66] (2001) 4 HKCFAR 133, 150.

[67] (2001) 4 HKCFAR 133, 151.

[68] (at pp 74-75).

[69] (2020) 23 HKCFAR 169, §9 (1) & (3).

[70] There were multiple repetitions over those box files but that does not diminish the point.

[71] As it turns out, these were delivered well in advance of the projected end of the prosecution case.

[72] Joint Defence Submissions, §54.

[73] A contention that the charge itself is bad for legal certainty would certainly fail in the High Court is because this Court is bound by the decision of the Court of Final Appeal in Mo Yuk Ping v HKSAR(2007) 10 HKCFAR 386, §81 in which it was held that the offence of conspiracy to defraud did not violate the doctrine of legal certainty.

[74] [2015] 1 WLR 2126, §49.

HCCC 309/2019

[2021] HKCFI 3546

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

________________________

BETWEEN

	HKSAR
	and
	CHEN KEEN (alias JACK CHEN)	1^st Accused
	HAO MAY (formerly known as WANG MAY YAN) (alias MAY WANG)	2^nd Accused
	YEE WENJIE (also known as YU WENJIE) (alias ERIC YEE)	3^rd Accused

________________________

Before:

Deputy High Court Judge Bruce SC in Chambers

Date of Hearing:	8, 9, 10, 17 and 18 February 2021
Date of Ruling:	19 February 2021
Date of Reason for Ruling:	25 November 2021

________________________

RULING

________________________

Introduction: Issue for Consideration

1. Prior to the formal arraignment of the accused, a series of pre-trial points were taken which require resolution. The points are:

(1)  Issue 1: An issue in relation to the disclosure of certain accounting documents.
(2)  Issue 2: Whether the prosecution can adduce evidence of the 1^st Accused’s previous shareholding in a company called Global Financial Investment Group Limited” (“GFIG” – which shareholding was no longer extant by the time the 1^st Accused joined China Jin Hui Mining Corporation Limited (“462”))  notwithstanding the unchallenged Ruling at the original trial that no allegation can be made that the 1^stAccused failed to disclose such shareholding to 462 or to any persons since there was no legal duty to disclose it (“the GFIG Point”).
(3)  Issue 3: Whether the prosecution can adduce evidence of the dispute between the 1^st Accused/the 2^nd Accused and PW2 Yip Kean Mun on the issue of allowing the Convertible Notes (CNs)  to be converted into shares - which conversion was eventually approved by 462’s Board’s after obtaining legal advice (“the Conversion Point”).
(4)  Issue 4: Whether the prosecution is permitted to adduce opinion evidence from Hong Kong Stock Exchange witness Wong Chun Ling William concerning (i)  the interpretation / meaning of the Listing Rules and (ii)  the “correct” application of any particular rule to the “facts” of the case (“the William Wong Point”). For the avoidance of doubt, the 1^st Accused does not seek the Court’s definitive ruling on the legitimate scope of questions for Mr Wong at this pre-trial stage. Rather we seek to alert both the prosecution and the Court to an issue which will arise for determination prior to Mr Wong being called (when the Court will have a better “feel” for the case)  and to ensure that the case is not opened to the jury on the basis that they will hear expert evidence from a Stock Exchange witness concerning the meaning and application of the Listing Rules to the facts of this case.
(5)  Issue 5: Whether the prosecution is permitted to adduce evidence that Dynasty Group Limited (the shareholding of which was owned by the 2^nd Accused)  went into liquidation on 3 October 2008; and that the 2^nd Accused left New Zealand on 10 October 2008 ‘on a one way ticket and came to Hong Kong, thus avoiding her examination by the liquidators which was fixed for 13 October’ (see paragraphs 2, 12 and 20)  (“the Liquidation Point”).
(6)  Issue 6: Whether the prosecution is permitted to adduce evidence relating to emails found in the 3^rd Accused’s computer which were emails from the 3^rd Accused to the 2^ndAccused relating to a “Deed of Debts” dated 3 February 2009 and a “Memorandum of Variation of Terms of Agreement” dated 3 February 2009 purportedly between the 1^st Accused and Sun Management Limited (both documents unsigned and the emails on the face of them were not addressed, sent or copied to the 1^st Accused)  as part of the prosecution’s case against the 1^st Accused (“the Deed of Debt Point”).
(7)  Issue 7: Whether the prosecution is permitted to adduce evidence of Barry Fraser’s own view or opinion regarding the duration of the Commission Sharing Agreement (CSA)  signed by the 1^st Accused, the 2^nd Accused and Barry Fraser in October 2008 (“the Duration of CSA Point”)
(8)  Issue 8: Whether the prosecution is to be permitted to open its case upon the basis of the second draft of the outline of the opening supplied by the prosecution to the parties.
(9)  Issue 9: Whether the prosecution is entitled to adduce evidence of two classes of document found in the possession of the 2^nd Accused.

2. It will be immediately apparent that the description of 6 out of the 9 outlined in the preceding paragraph are taken from the written submissions presented by the accused. The object of proceeding on that basis is that this best illustrates the issues that were taken but, as will appear in this judgment, the arguments were often narrowed in the course of exchanges between the parties and the Court.

3. In relation to the disclosure point, I gave an indication of my ruling on 19 February 2021 because I considered this issue to be urgent. The formal ruling will be delivered later. The obvious point was to permit those concerned with its execution to get on with the matter as quickly as possible. I gave an indication of my rulings on the balance of the issues arising on 19 February 2021 by letter from the Court to the parties. In relation to all of those rulings I undertook to publish my reasons for those rulings. These are those reasons.

Issue 1: disclosure

Submissions

Counsel for the defence

4. I was informed, and accept, that an important part of the defence case in this trial concerns the jury’s evaluation of the evidence that the prosecution proposes to adduce about the presentation of the financial information concerned with the financial position in relation to the dairy farms owned by the CraFarms Group, which were to be sold to 462. This is critical to the 2^nd Count on the indictment which alleges a conspiracy between all 3 accused between the 7^th day of May 2009 and the 8^th day of September 2009 conspired to defraud the Stock Exchange of Hong Kong Limited (“SEHK”) by dishonestly doing the three items listed in the particulars. Two of those particulars are immediately relevant for present purposes:

(a) falsely representing that the gross profit of the properties and fixed assets relating to the dairy farms owned by the CraFarms Group in New Zealand (“the Properties” for the year ended 31^stday of May 2009 was approximately $92,520,000 Hong Kong currency;
(b) concealing or failing to disclose the true financial position of the Properties.

5. It is something of a simplification to say that the prosecution case is that the accused took certain accounting data and altered it so that what appeared on that data which had hitherto shown that the farms were in financial difficulty and the accused dishonestly altered or manipulated that data to make it appear that the farms were in substantially better shape than that. The manipulated data was, so the prosecution case goes, used in support of assertions as to the financial health of the properties which were to be acquired by the 462. The source of the accounting material was one David Anthony Wilshire and an accountant by the name of Mark Stuart King.

6. Mr Wilshire and Mr King are slated to give evidence in the trial which is shortly to commence. They will, as it happens, be giving evidence from New Zealand via live television link pursuant to Part IIIB of the Criminal Procedure Ordinance, Cap 221.

7. One of the lines of defence that the accused wish to present is to cross-examine Mr Wilshire and Mr King as to whether the accounting figures in question are true and correct. Ultimately, that may go to whether there was the manipulation of the figures alleged by the prosecution and to the issue of whether what was presented to the SEHK was accurate or misleading. It is recognised (as it must be) by the prosecution that this is a legitimate line of cross-examination.

8. There is one further dimension to this issue. There has been litigation in the High Court of New Zealand in a case entitled Gibson and Stiassny v Stockco Ltd, Nugen Farms Ltd and the Crafar Brothers. The decision in that case was given on 5 July 2010. The plaintiffs in the case, Messrs Gibson and Stiassny are the liquidators appointed by one of the creditors of the farms. The decision of the New Zealand High Court (White J) reveals a number of things which are significant to, at least, the defence. These include that the liquidators have or may have a set of accounts which are different to those generated by Mr Wilshire and Mr King and that a solicitor connected with the farms and/or the Crafar brothers may also have relevant information.

9. Counsel for the defence seek orders that the prosecution make enquiries of Mr Wilshire and Mr King to see whether they have any accounting or other material. They also seek the same orders in relation to the liquidators and the solicitor concerned. It appears that the solicitor concerned did not fare well in the evaluation by White J of his credibility and Counsel for the defence did not press this point.

10. The issue arises because the stance of the exchange of correspondence between the prosecution and defence where the defence requested that the prosecution make enquiries of Mr Wilshire and Mr King, the solicitor and the liquidators. The prosecution declined to accede to such a request. I learned during the course of argument that such an enquiry had in fact been made in very recent times of Mr Wilshire. Mr Winter, QC contended that this carried with a recognition on the part of the prosecution that ensuring there was no further accounting material was a relevant line of enquiry.

11. In support of the application it was contended that Counts 2 and 4 of the Indictment allege that the conspirators falsely represented that the gross profit of the properties and fixed assets of the Farms for the year ended 31 May 2009 was HK$92,520,000; and that they concealed or failed to disclose “the true financial position of the properties”. The submission was that this necessarily requires proof of what the “true” value of the properties and assets of the Farms was and that the true gross profit, on the basis stated in Appendix II for the calculation of that gross profit, was not HK$92,520,000. Accordingly, so it is contended, it is appropriate to know whether Mr Wilshire and Mr King have further material and what material is held by the liquidators of the CraFarms Group.

12. It is contended that on any view these are legitimate issues and Mr Winter, QC contends that the prosecution does not (and could not) suggest otherwise. He contends that it is intended that in the cross-examination of Mr Wilshire and Mr King that he ought to be properly informed as to material which might tend to support the case that the accounts are not all the prosecution say they are. He contends that it is desirable that this issue be ventilated now as opposed to during the trial because that might carry with it the risk of delay and interruption.

13. In terms of timing there is a critical point to be made here that the judgment of White J in the High Court of New Zealand has been published for many years and the explanation offered by Mr Winter, QC was that it revealed issues in it which had hitherto been unrecognised.

Counsel for the prosecution

14. The prosecution makes two points in reply. First of all, it is contended that following enquiries on behalf of the defence in 2015, prosecution enquiries were made and it is clear that Mr King has nothing further. In this vein, there is testimony from the former trial that Mr Wilshire gave to Mr King all the material that he had. In this regard, the recent enquiry of Mr Wilshire has elicited the response that he has nothing germane to the case[1].

15. Secondly, the prosecution contends that none of this is relevant to the case at hand. The prosecution argues that “the issue is not whether the accounts given to [the 2^nd Accused] and [the 3^rd Accused] were accurate, generally accurate or a genuine attempt at accuracy but that [the accused] changed them to present what was an undoubtedly false picture”[2]. The prosecution contends that whatever the situation it was not permissible to change the accounts given to the 2^nd Accused and the 3^rd Accused to show “a completely different financial situation than that which they were given”. The prosecution contends that the “issue is whether the accounts in the Circular presented the ‘true financial position’ of the properties or concealed it[3]”. In short, the prosecution position is that this application is something of a distraction.

Consideration

16. It is contended by all parties that the law of disclosure in this regard is well-settled and well-known. That is true but I think it is appropriate to re-state it for present purposes because the specific contents of that law inform my decision.

17. In HKSAR v Lee Ming Tee & Securities and Futures Commission (Third Party) (2003) 6 HKCFAR 336, the Court of Final Appeal declared the position for Hong Kong. Mason NPJ, noted that in R v Keane [1994] 1 WLR 746, 752A-C, Lord Taylor LCJ adopted a test which had been suggested Jowitt J in R v Melvin (unrep, 20 December 1993). Jowitt J said:

“I would judge to be material in the realm of disclosure that which can be seen on a sensible appraisal by the prosecution: (1) to be relevant or possibly relevant to an issue in the case; (2) to raise or possibly raise a new issue whose existence is not apparent from the evidence the prosecution proposes to use; (3) to hold out a real (as opposed to a fanciful) prospect of providing a lead on evidence which goes to (1) and (2).”

18. Mason NPJ then noted that this test had been followed by the Court of Appeal (the judgment given by no less an authority than Steyn LJ) in R v Brown [1994] 1 WLR 1599 and gave further consideration to the expression “an issue in the case” and noted that Steyn LJ held that the expression must be given a broad interpretation rather than “the fairly narrow” way in which it is used in a civil case. In that light Mason NPJ then held[4]:

“170. The prosecution’s duty is to disclose to the defence relevant material (including information) which may undermine its case or advance the defence case. The duty is not limited to the disclosure of admissible evidence. Information not itself admissible may lead by a train of inquiry to evidence which is admissible: R v Preston [1994] 2 AC 130 at pp.163-164, per Lord Mustill. And material which is not admissible may be relevant and useful for cross-examination of a prosecution witness on credit.
171. The Melvin categories may be accepted as a broad statement of what, on a sensible appraisal by the prosecutor, is subject to disclosure. The Melvin formulation and the recognition that the credibility of a prosecution witness is relevant for the purpose of the Melvin categories have the consequence that disclosable material relevant to the cross-examination of a prosecution witness cannot be restricted to the three instances of disclosable material relevant to the credibility of a prosecution witness sanctioned by authority and referred to by Steyn LJ in R v Brown [1994] 1 WLR 1599 at p.1607A-C. It extends to other significant material which a reasonable jury could regard as tending to shake confidence in the credibility of the witness.”

19. The statement of Mason NPJ has been treated in Hong Kong as the appropriate starting point for the analysis of the obligation on the prosecution to disclose.

20. A concomitant of the obligation to disclose is an obligation on the part of the authorities to make appropriate enquiries. Their position is that the law enforcement body to believe that a person may have information which might undermine the case for the prosecution or assist the case for the suspect or the defendant, the prosecution or the investigator cannot decline to make enquiries of that person in order to avoid the need to disclose what that person might say[5]. However, there is an additional dimension to this which is that the material that the defence claim to be entitled to see is in the hands of persons in New Zealand. The duty of disclosure imposed on the prosecution requires it to make full and timely disclosure to the defence of all relevant or possibly relevant material available or known to it whether it is in Hong Kong or abroad. The prosecution is therefore obliged to take all reasonable steps to identify and obtain such material including material identified and located outside Hong Kong[6]. In BA v Attorney-General [2017] VSC 259, 266 A Crim R 497, 319 FLR 329, the Victorian Court of Appeal held that what was required was a “legitimate forensic purpose”. Further, the obligation is to make reasonable enquiries and this must be done recognising that there may not be any means of enforcing the enquiry. That may well be an issue for circumstances in which the overseas person or body declines to cooperate.

21. The critical issue is whether it is open to challenge the correctness of the accounts as presented by the prosecution as a starting point from which it is contended that they were, so the prosecution argues, shamelessly manipulated by the 2^nd and 3^rd Accused. That the issue may get nowhere is, so it seems to me, not to the point. It is contended by Mr Winter, QC that we know nothing of what the accounts in the hands of the liquidators might turn up. He says that there is some suggestion that they may have some bearing on important components of the accounts. In this context, these are the selfsame components of the accounts which the prosecution says were so shamelessly manipulated. It seems to me that there exists a legitimate forensic purpose in making the enquiries.

22. It seems to me that the prosecution is probably correct when it contends that it is unlikely that Mr King has any more material. Nevertheless, that is not the issue. Not every proper legitimate forensic purpose turns up material which might be the silver bullet for the defence. Accordingly, given that there is no challenge to Mr Wilshire’s recent reply, I do not think there is any prospect of further enquiries being made in relation to him. The likelihood is that an enquiry of Mr King the same result that it did previously. Nevertheless, as a matter of prudence (and nothing more) it seems that such an enquiry should be made. The accounts possibly prepared by on behalf of the liquidators might produce some matter of assistance to the defence.

Resolution

23. Accordingly, I gave directions to the prosecution to make enquiries of Mr King and the liquidators. I indicated in the course of submissions that given the timing of the proposition on the part of the defence that such material was wanted for a legitimate forensic purpose that this timing might inform decisions made by the Court in future depending on the outcome. However, that can be left for another time. There is also to be considered the fact that unlike the situation which might arise if the material was in Hong Kong, there is no mechanism which can make this a compulsory process. That too may inform the future disposition of the matter.

Issue 2: GFIG

The Objections

24. The issue is whether the prosecution can adduce evidence of the 1^st Accused’s previous shareholding in a company called Global Financial Investment Group Limited” (“GFIG” – which shareholding was no longer extant by the time the 1^st Accused joined 462) and invite the jury to conclude that the failure to disclose it justified an adverse view of the 1^stAccused. This invitation is made notwithstanding the unchallenged ruling at the original trial that no allegation can be made that there is something sinister in the conduct of the 1^st Accused because he failed to disclose such shareholding to 462 or to any persons since there was no legal duty to disclose it (“the GFIG Point”). Those representing the accused contend that the evidence is too remote from the event, the subject of the indictment, and that the introduction of this evidence would be to allow the jury to consider material which is more prejudicial than probative.

25. In order to understand the concern, it is necessary to appreciate that GFIG held a 60% shareholding in a New Zealand company known as UBNZ Funds Management Limited (“UBFM”). The other 40% of the shareholding in UBFM was held by the 2^nd Accused. The case for the prosecution was that the 1^st Accused held a controlling interest in GFIG. Further, the case for the prosecution is that the 1^st and 2^nd Accused were joint directors and shareholders of UBFM. This it is said contradicts the position of those accused that they were independent of each other.

26. UBFM is a very important company in the case. It was to become a guarantor of one of the critical transactions which is the subject of the indictment. On the prosecution case, it was critical that the 1^stAccused be seen to be independent of that company at the time of and leading up to this transaction. The reason for this was that it was important to the transaction that the 1^st and 2^nd Accused be seen as independent of each other.

27. The case for the prosecution is that the 1^st Accused on 8 May 2009 through GFIG divested himself of an interest in UBFM leaving the 2^ndAccused as the sole director of UBFM. It was also critical that this occurred before the 1^st Accused joined 462 so that from the outset he could be viewed as independent of the 2^nd Accused.

28. The formal company evidence is that the shares in UBFM held by GFIG were disposed on 8 May 2009. That day is significant because it is the day before the 1^st Accused became co-chairman of 462.

29. At the first trial of these proceedings, objection was taken to this evidence upon the basis that the 1^st Accused had no duty to disclose the transaction through which GFIG divested itself of any interest in UBFM. Indeed, the then trial judge, Anthea Pang J[7] gave a ruling in relation to this. She held (Ruling dated 16 October 2015) that the 1^st Accused had no duty to disclose his former shareholding[8]. Anthea Pang J concluded[9]:

“…As a result, I do not find such general past collaboration between the 1^st and the 2^nd Accused which was unrelated to the Acquisition to be a proper basis for the false representations alleged”.

30. It is pertinent to note that there was a further reference to this ruling by Anthea Pang J in a ruling by her on 23 October 2015. In that ruling Anthea Pang J held in the context of objections to the opening of the prosecutor[10]:

“… I have already made clear that I do not consider there to be a duty for the 1^st Accused to disclose his past shareholding in GFIG (UBFM). Nor is there such a duty of disclosure concerning his general past collaboration with the 2^nd Accused.
In the circumstances, any suggestion in the prosecution’s opening that the 1^st Accused has a duty to so disclose is not permissible and care should be taken not to convey such a message in those paragraphs.”

31. Counsel representing the accused contend that in order to make out a conspiracy to defraud in the present context, it has to be shown that the defendant “dishonestly concealed from another person information which he was under a duty to that person (or entity), or to which that person (or entity) was entitled to require them to disclose”. In this regard, reliance is placed on Adams v R [1995] 1 WLR 52. It is contended that the ruling of Anthea Pang J is plain and it is not open for the prosecution to go behind the ruling.

32. It is contended on behalf of the accused that in fact the prosecution did go behind the ruling at the earlier trial. That occurred when the prosecutor asked PW1 (Ms Chan Wai Kay, Katherine) whether it would have made a difference to her inviting the 1^st Accused onto the Board of Directors of 462 if she had known that he had dealt with his shareholding in relation to UBFM as I have hitherto described. Further, Counsel representing the defence point to paragraphs 64 and 65 in the second revision of the Draft Opening of the prosecutor. In passages in the Draft Opening are as follows:[11]

“64. May had several companies whose initials start with UB. There was UBNZ Trustee Ltd and UBNZ Funds Management Ltd. Later there was UBNZ Assets Holdings Ltd. If you see UB it means May. AF Co Annex III Put in Co bundle. All May except UBFM 60% held by GFIG. GFIG was a BVI belonging to Jack. This joint ownership shows their cooperation together before ever they came to this scheme, it is evidence of the close connection between Jack and May [P825 GFIG BVI Tab 36 Company Matters (2); P490 GFIG UBFM Tab 37 Company Matters (2)].
65. May intended to use her company UBTL as the vendor of the farms and UBFM as the warrantor. Jack’s shareholding in UBTL would show his connection to the Vendor of the farms if it was found out and would be awkward once he was Joint Chairman of the BoD so on 8 May, the day after his appointment, Jack transferred the shares his BVI company held in UBFM to UBTL, so that May was the sole director and shareholder of UBFM through UBTL. Again, you may not think this was a coincidence. (GFIG BVI Tab 36 Company Matters (2); GFIG UBFM Tab 37 Company Matters (2)] Why did they make these changes just at the time Jack joined 462 if it was not to hide their cooperation.”

33. The submission on behalf of the accused is that the prosecution ought not to be allowed to circumvent the ruling of Anthea Pang J when there was no duty under either the Listing Rules or a fiduciary duty to disclose general past dealings with the owner of a vendor or company.

34. Further, those representing the accused contend that the evidence is either irrelevant to the issues that the jury has to consider or insufficiently probative of those issues and that the prejudicial effect outweighs the probative value of such evidence. They contend that such evidence is simply too remote.

35. After submissions on this and other pre-trial issues had concluded, the prosecution notified the parties and the Court that it intended to adduce further evidence on the topic of the business relationship of the accused prior to the 1^st Accused joining 462. This was done by a Notice of Additional Evidence in the ordinary way. The material, the subject of the Notice, was provided electronically by way of e-mail and then just after Chinese New Year in hard copy. The essence of the material provided by the prosecution is broadly analogous to the GFIG transaction. There is also an increased and more articulated reference to Mr Wu Wing Kit, a solicitor in Fred Kan & Co, Solicitors and Mr Wu’s assistance, as solicitor to the 1^stAccused. The prosecution seek to go further and say that on occasion he also acted for the 2^nd Accused. In this regard, the prosecution point to his assistance in the provision of a BVI company called Super Worth[12]. The prosecution go further and say that it is significant that 1^st Accused paid the solicitor’s bill for the 2^nd Accused in relation to this piece of work[13].

36. Those representing the Accused take the point that the reference to Mr Wu is to imply that he had also joined the conspiracy. They also contend that in raising the issue of the provision of the BVI company called Super Worth International Limited (Super Worth), the prosecution are seeking to go behind a ruling of Anthea Pang J that prohibited the prosecution from adducing evidence or referring to a dispute between the intended second prosecution witness and the 1^st Accused over payments to be made from 462 to Super Worth[14].

Position of the Prosecution

37. The prosecution does not seek to question the ruling of Anthea Pang J of 16 October 2015. As is said in the submission of the prosecutor: “We proceed on the basis that [the 1^st Accused] was under no legal or fiduciary duty to disclose his shareholding in UBNZ Funds Management Limited (‘UBFM’) … through his BVI company Global Financial Investment Group Limited (‘GFIG’)”[15]. However, the prosecution goes on to submit that this ruling does not make the impugned transactions inadmissible for all purposes.

38. It is contended that the impugned transaction at the time it occurred in evidence that the 1^st Accused and the 2^nd Accused were painting a false picture of the acquisition, the subject of the indictment, and their role in that acquisition. In short, it is contended that the 1^st Accused was, in a sense, clearing the decks before proceeding with the conduct which is the subject of the indictment. The prosecution contend that even if this conduct occurred before the commencement of the alleged conspiracy, it is open to the prosecution to presented as circumstantial evidence of events which occurred before the crime to support the inference of guilt in relation to the crime. It is recognised by the prosecution that evidence merely characterised as background evidence would be inadmissible. However, that is not the point made by the prosecution. On behalf of the prosecution, Ms Draycott, SC contends that, as appears in the last sentence of paragraph 59 of the draft opening: “Why did they make these changes just at the time Jack joined 462 if it was not to hide their cooperation”.

39. The prosecution submits that the significance of the evidence of the impugned transactions is that the jury could conclude that there existed prior to the commencement of the conspiracy and prior to the 1^stAccused joining 462 as a director, a business relationship between the 1^st Accused and the 2^nd Accused. The new material notified by the Notice of Additional Evidence essentially goes to the same point. There is, of course, the addition of the references to the solicitor Mr Wu. As I have indicated earlier, the case for the prosecution is that he acted as solicitor for the 1^stAccused, but also from time to time (at least) acted as the solicitor for the 2^nd Accused. In addition to that, the case for the prosecution is that the 1^stAccused, through one of his companies, paid the legal bill of that solicitor for work done on behalf of the 2^nd Accused. Further, and, perhaps, most significantly, it is submitted that had the interest of the 1^st Accused in the impugned transaction been known, it would have undermined the pretence of independence of the 1^st Accused from the 2^nd Accused and the assertion on the part of the 1^st Accused that he did not intend to profit from the acquisition, the subject of the indictment. The prosecution placed considerable reliance on the timing of the impugned transaction as evidence of a dishonest attempt to conceal the true situation in furtherance of the conspiracy.

40. As to the issue of Super Worth being referred to in the opening and in the evidence, the prosecution contends that there is no intention to go behind the ruling of Anthea Pang J on 16 October 2015. It is contended that her Ladyship did not say that no reference could be made to Super Worth.

Consideration

41. The starting point for consideration of this issue are two rulings of Anthea Pang J on 16 October 2015 and 23 October 2015. Those representing the accused contend that they are correct. There is no challenge as to the correctness of the rulings on behalf of the prosecution. I am in respectful agreement with the rulings. There remains an issue as to the scope of those rulings.

42. In my view, the prosecution is entitled to adduce evidence of a business relationship between the 1^st Accused and the 2^nd Accused which predated the commencement of the conspiracies, the subject of the indictment. Nothing in the two rulings of Anthea Pang J contradicts that proposition. The existence of such a relationship between the 1^st Accused and the 2^ndAccused and the nature of that relationship is revealed in the impugned transaction. There are other bases in the proposed evidence from which a cooperative business relationship between the 1^st Accused and the 2^ndAccused may be inferred.

43. The problem arises because the prosecution contends that the impugned GFIG transaction was done for the purpose of concealing that relationship. In the two rulings to which reference is been made, Anthea Pang J held that there was no duty on the part of the 1^st Accused to reveal the impugned transaction. However, as can be seen in those two rulings, particularly confirmed in the second of the two rulings on 23 October 2015, Anthea Pang J held that “Nor is there such a duty of disclosure concerning his general past collaboration with the 2^nd Accused. In the circumstances, any suggestion in the prosecution’s opening that the 1^st Accused has a duty to so disclose is not permissible and care should be taken not to convey such a message in those paragraphs”[16]. Whatever doubts there may have been about the true scope of the ruling of Anthea Pang J on 16 October 2015, it is clear that Anthea Pang J considered that there was no obligation on the 1^st Accused not just to disclose to 462 the GFIG transaction, but also a previous relationship between the 1^st Accused and the 2^nd Accused.

44. On that premise, it is plain that Anthea Pang J held it is not open to the prosecution to conduct its case that the concealment by the 1^st Accused of the impugned transaction and the concealment of a business relationship between the 1^st Accused and the 2^nd Accused is a breach of any duty owed by the 1^st Accused to 462. The clear implication of this is that if there is no duty to disclose these matters then it is not open to the prosecution to criticise the 1^st Accused for not doing what he had no duty to do. I respectfully agree with the nett effect of the ruling of Anthea Pang J. While her Ladyship was directly concerned with the GFIG transaction, the principle which underlies her ruling is, in my opinion, equally applicable to any other of the transactions which the prosecution now wishes to rely on. In my opinion, it is not open to the prosecution to present its case upon the basis that an inference that is not telling the appropriate officers of 462 of the rearrangements he had undertaken either by himself or with the 2^nd Accused prior to joining 462 was a basis for concluding that the 1^st Accused or the 2^nd Accused was acting dishonestly. The prosecution will not be permitted to present its case upon that basis. That includes rhetorical devices such as the question posed in the opening “Why did they make these changes just at the time Jack joined 462 if it was not to hide their cooperation”. I am concerned with the effect, not the device.

45. As to the issue of the treatment of Super Worth, the BVI company provided by Mr Wu to the 2^nd Accused, it is important to note what was the subject of dispute before Anthea Pang J when she gave her ruling. What was at issue was “a payment to Super Worth sought by the 2^nd Accused pursuant to an agreement completely separate from 462’s acquisition of UBNZ Assets Holdings Limited (“UBAH”). This was a manufacturing agreement dated 9 June 2010 and was made between UBFM and Guo Yuan Natural Dairy (Jiangxi) Limited, a wholly-owned subsidiary of 462”[17]. In my view, there is nothing in that ruling which prevents reference being made to the provision of the BVI company to the 2^nd Accused by Mr Wu and the 1^st Accused paying the solicitors bill of the 2^nd Accused in relation to that provision.

46. There is nothing in the rulings of Anthea Pang J (or mine) which prevent the prosecution from proving that there existed a business relationship between the 1^st Accused, the 2^nd Accused and, for that matter, the 3^rd Accused. Evidence to establish that fact would have to make the ordinary criteria for admissibility. For the avoidance of doubt, I should indicate that it may include evidence which establishes that fact by inference. Further, my conclusion as to the “Super Worth” point now advanced by the prosecution is directed only to establishing those facts to support the inference that there was a cooperative business relationship between the 1^st Accused and the 2^nd Accused.

Issue 3: The Conversion Point

The objection

47. Those representing the accused object to certain evidence concerned with the decision by 462 to permit the conversion of certain convertible notes into shares. The agreement stated that the price for the farms was NZ$500 million and that the 2^nd Accused would be paid in money borrowed from the bank or money from selling convertible notes to the public, or if that still was not enough she would take the rest in convertible notes. In the result, part of the consideration was to be paid in convertible notes. The arrangement in relation to the convertible notes is that on maturity they could be converted into shares in 462. The maturity date was, for all practical purposes, some time in the future (There were different convertible notes and the maturity dates varied).

48. There came a time when the accused wished to convert the convertible notes into shares. The simple economics of this is that while a convertible note has a value, and is, thus, theoretically saleable, the notes once converted into shares were far more readily saleable and by reason of that, convertible into money. Part of the agreement was that 462 could agree to convert the convertible notes into shares prior to maturity. The accused wished for this conversion to occur prior to maturity and, on the prosecution case, pressured the then Chairman of the Board of Directors of 462 to permit such conversion. On the evidence available, there was a dispute between the then Chairman of the Board of Directors Mr Yip Kean Mun and the accused which was acrimonious and the communications on the part of the Chairman imputed improper motives on the part of the 1^stAccused and the 2^nd Accused. The flavour of the chairman’s assertions can be seen from the Draft Opening as follows[18]:

“Yip was adamant as Chairman of the Board that this must not happen. He thought it would be disastrous for the company if the shares were issued before UBAH had bought all the farms. It meant that the vendor would get its money before 462 got the farms with no guarantee that the farms could be bought at all. 462 would lose control of the shares and if the transaction did not take place they could not get them back.”

49. The case that the prosecution seeks to advance in this regard is that the exchanges with the Chairman became so acrimonious that it resulted in him retreating to Singapore in ill-health.

50. Those representing the accused contend that the attempt to introduce this evidence is an attempt to revive a charge previously levelled against the accused but which was not one of the charges upon which the accused were committed to this Court. The learned Magistrate who heard the committal held that there was insufficient evidence in relation to this charge to justify committal to the High Court.

51. It is also contended that there was an agreement by 462 to convert and that this was not in any way illegitimate, unlawful or improper. It was done after legal advice was requested by order of the Board of Directors although the Chairman to which references earlier been made was not Chairman at the time of the order of the Board. Moreover, it is contended that the evidence of this process all occurred well after the time during which the indictment avers that the conspiracy operated. Indeed, those representing the accused contend that the disputes postdated the alleged misrepresentations which form the core of the indictment so far as the conspiracy to defraud accounts are concerned. In the result, it is contended that the disputes and the conversion itself do not provide any evidence of any probative value on the real question is that the jury will need to consider in determining whether the charges of conspiracy to defraud are established.

Position of the prosecution

52. The first point made by the prosecution is that this evidence has nothing to do with the charge which the Magistrate hearing the committal proceedings dismissed. It makes the point that that charge alleged a conspiracy to defraud a commonly known as “Computershare” by a false representation that the Board of Directors of 462 had consented to conversion. The prosecution case on this argument is that this charge has nothing to do with the present issue.

53. The contentions of the prosecution are that this evidence is directed to establishing that although the 1^st Accused was no longer an officer of 462, he was still, in effect, running that company. It is contended by the prosecution that[19]:

“It is the Prosecution’s case that although [the 1^st Accused] was no longer an officer of 462, he was effectively still running it. He and [the 2^nd Accused] had put their people onto the Board of Directors including Yip Kean Mun (“PW2”) as Chairman. PW2, however was vehemently opposed to the conversion of the ‘consideration notes’ (the notes given to [the 2^nd Accused] as opposed to those sold to the investing public) as he believed that it meant that [the 2^nd Accused] would be paid in full for a fraction of what the company had bargained for (a shell company holding 2 of the least valuable farm companies without the Overseas Investment Office’s (“OIO”) consent instead of 6 farm companies with OIO consent). He fought over several days with [the 1^st Accused] and [the 2^nd Accused] who were pushing for the conversion. Conversion meant that [the 2^nd Accused] would become the majority shareholder with control of the company, or she could sell the shares when they resumed trading (which was imminent) and ‘cash in’. It was the result they had intended their fraud to achieve.”

54. Further, the prosecution contend that the issue was litigated before Anthea Pang J in the previous trial held[20]:

(1)  the charge dismissed by the magistrate has nothing to do with the issue;
(2)  the disputes over the conversion are relevant to the issues to be tried and the evidence has probative value directed to the issue of whether the accused were trying to get their hands on the proceeds of their alleged crime and this, of itself tended to prove the existence of the conspiracy; and
(3)  the events which are concerned in relation to the conversion issue took place between 19 and 22 July 2010 which was “slightly outside” the conspiracy period and was not fatal to its admissibility.

Consideration

55. In my judgment, evidence of conduct which postdates the conduct, the subject of the crime or crimes alleged in the indictment, is capable of proving or tending to prove that the crime or crimes on the indictment occurred or aspects of those crimes occurred. This sort of evidence is simply a species of circumstantial evidence. The admissibility of such evidence is well-established on the authorities. However, what is also manifested in those authorities is a concern that the Judge in summing up the case may explain to the jury how such evidence may be used and should be accompanied by a fact-specific warning as to the permissible (and, thus the non-permissible) use of such evidence[21].

56. In this case, the case for the prosecution is that what was motivating the accused to adopt the course they did was that the accused wish to convert the convertible notes into shares so they could, as the prosecution contended “cash in” as soon as the trading in 462 resumed. The case for the prosecution is that the accused were all anxious to get their hands on the proceeds of their crime before anyone woke up to what they had been up to.

57. It is one thing to state the prosecution case on this topic. It is another thing to consider how this might be proved. Mr Yip considered all of this was being done in indecent haste and indeed expressly or impliedly appears to have held the position that what the protagonists were trying to do was get out before they were caught. This, so the prosecution would doubtless contend, was all the more significant because originally at least Mr Yip was their man.

58. In my view, consistent with the views of Anthea Pang J and for the reasons that she gave, the fact that all 3 accused were pressing with apparent urgency to convert the convertible notes into shares is relevant, probative and admissible. The only aspect in which I respectfully depart from the views of Anthea Pang J is an aspect of how these propositions might be proved. In my opinion, it would not be appropriate to prove them by the expressions of opinion by Mr Yip. I think there is at least a respectable argument that Mr Yip saw right through the accused but his opinions on what they were up to are not an admissible mode of proving what the prosecution seeks to prove. That said, it would be open to the prosecution to call evidence including evidence through Mr Yip that there was disagreement - indeed heated disagreement - between him and the accused over the conversion of the convertible notes. What I am concerned not to admit is his opinion as to what was motivating the accused. Subject to that reservation, I am in agreement with the ruling made by Anthea Pang J in the earlier trial. In case there is any doubt about the issue, I agree with her that the fact that these events took place after the conspiracy period do not render the evidence inadmissible.

59. It was objected by those representing the accused that there is no way that a jury could draw the inference which the prosecution contend should be drawn. The defence say that there are competing inferences. The standard of proof makes the drawing of inferences one which requires of the jury the conclusion that the inference to be drawn against the accused must be the only reasonable inference in the circumstances[22]. The authorities reveal that this is quintessentially a jury issue and even if I was to consider that there were competing inferences it forms no part of my function to withdraw an issue from the jury upon that basis[23]. I cannot say that evidence which might found the inference sought to be drawn by the prosecution is so weak as to drive me to the conclusion that the evidence is so slight as to be more prejudicial than probative[24].

60. I do not consider that this is an attempt by the prosecution to revive the charge dismissed at committal. The elements of the offence and the particulars that the prosecution sought to prove are different to that which the prosecution now seeks to prove. Not the least consideration is that the company named in that charge has nothing to do with the issues.

61. Subject to the limitation I have imposed on the means by which the prosecution may prove their case in this regard, the prosecution may open on this topic and adduce evidence accordingly.

Issue 4: Opinion Evidence on the Listing Rules

62. At least for the time being this does not require a ruling. As those representing the accused have very properly pointed out, this is a matter which can be deferred for consideration to a later time. The real concern underlying the fact that the accused have raised this matter at this stage is how the prosecution is to be permitted to open on this topic. As will appear in relation to my conclusions as to Issue 8, I am of the view that the prosecution would in this specific case be permitted to open on the Listing Rules. As I indicate under that heading, I cannot conceive how the prosecution case could make any sense to a jury absent at least some presentation on that topic. Further, it may be that those representing the defence would wish to adduce a different view of the meaning of the Listing Rules. It is conceivable that this might be done by permitting the defence to open their case immediately after the conclusion of the prosecution opening. That also is a consideration for later on although that issue is fast looming for determination.

Issue 5: Matters relating to the Dynasty Group Limited

The objection

63. In order to understand this objection, it is necessary to understand the prosecution case. First of all, the prosecution points out that the 2^nd Accused was a businesswoman and had a group of companies in New Zealand under the umbrella of the Dynasty Group[25]. On 3 October 2008, the Dynasty Group went into liquidation[26]. In the draft opening of the prosecution it is contended: “On 10 October 2008 she left NZ on a one-way ticket and came to HK, thus avoiding her examination by the liquidators which was fixed for 13 October”[27].

64. The case for the accused in relation to this objection is that the prosecution is seeking to establish by the liquidation of the Dynasty Group and the 2^nd Accused’s actions that immediately followed that she is a dishonest woman and that her impecuniosity is such that she was not in a position to buy the farms personally. Those representing the accused contend that the liquidation of the Dynasty Group is incapable of sustaining these inferences and is, in the final analysis irrelevant to the present case.

65. The defence team make the point that this liquidation was something of the order of 6 months before she was approached to participate in this case. Further, those representing the accused contend that there is no evidence that she left New Zealand with a “one-way ticket with the intention of avoiding her examination by the liquidators”.

66. Those representing the accused contend that issue of whether the 2^nd Accused was ever in a position to personally buy the farms is irrelevant. It is contended that their case will be that she was never in that position but there is nothing wrong with that. As the written submissions of the accused say: “The farms were always sought on the basis that [the 2^ndAccused] would find an investor or a lender to fund their purchase”[28]. Those representing the accused characterises evidence as “pure prejudice[29]”.

Position of the Prosecution

67. The prosecution contends that the liquidation of the Dynasty Group:

(1)  must have been known to the 1^st Accused;
(2)  it is relevant to show that the characterisation by the 1^stAccused of the 2^nd Accused as a famous and wealthy businesswoman was dishonest;
(3)  that in turn provided the basis on which Katherine Chan of 462 might believe that the 2^nd Accused had paid a deposit of NZ$50 million on the farms which are central to the indictment.

In short, the lie on the part of the 1^st Accused about the financial status of the 2^nd Accused was a necessary act in furtherance of the conspiracy.

68. The prosecution makes the point that following the liquidation of the Dynasty Group on 3 October 2008, 2^nd Accused left New Zealand on 10 October 2008. The prosecution contend that she not only avoided her schedule meeting with the liquidators on 13 October 2008, but that she left at the time she did for the purpose of avoiding that meeting. The source of the knowledge of the 1^st Accused as to her financial position with respect to the Dynasty Group might be derived from the fact that the 1^st Accused bought property held by the Dynasty Group in Queen Street in Auckland. The 1^st Accused paid some of the creditors from the proceeds of the sale of that property.

69. The 2^nd Accused was made personally bankrupt in December 2010.

70. The case for the prosecution was that it was necessary for 2^ndAccused to represent to Katherine Chan that she had paid a deposit of NZ$50 million for the farms in order to induce the belief in Katherine Chan that 462 could only purchase the farms through the 2^nd Accused. The prosecution contends that if she had known the true financial position, she would not have believed that she either owned the farms or have a right to ownership of the farms.

71. It is contended by the prosecution that the position that the 2^ndAccused was not in a position to discharge her debts is established by her leaving New Zealand at the particular time that she did.

Consideration

72. The first thing to consider is that there is no evidence that the 1^st Accused knew of the winding up of the Dynasty Group. There is no evidence that he was aware of the personal financial circumstances of the 2^nd Accused. The fact that a company goes into liquidation in which a specific person is a substantial shareholder (in this case, the 2^nd Accused was, apparently, a 50% shareholder) of itself reveals nothing about the financial circumstances of a shareholder of the company. The very nature of a corporate liquidation is generally built upon the premise that the company, the subject of the liquidation, cannot meet its obligations as they fall due. That says nothing about the financial status of a shareholder.

73. The fact that it may have been a finding of the corporate liquidation process that the 2^nd Accused owed a substantial amount of money is not evidence from which it can be inferred that any other person, particularly the 1^st Accused, knew about that.

74. Assuming that the acquisition of the floor on the building in Queen Street in Auckland can be established, might by itself theoretically provide evidence that the purchaser was aware of the straitened circumstances of the vendors. However, the real issue is whether it does so in these circumstances. There is no evidence that the consideration for the acquisition of this floor was at a bargain or knockdown price. Even if it was, it is difficult to see how that of itself demonstrates knowledge of impecuniosity on the part of the 2^nd Accused. I have not ignored the prosecution’s proposition that it is necessary to look at the whole of the evidence on this topic. The same comment applies in relation to the Deed of Debt document which is considered as a later stage in these reasons.

75. There is a real danger of prejudice when a person unfamiliar with the strict law as to the effect of a corporate liquidation learns of a person’s company going into liquidation. Unexplained, that is redolent of conclusions of bad management or dishonesty or incompetence. Counsel for the 2^nd Accused submits that there is, viewing the liquidation proceedings, a very good explanation for the liquidation: the company was caught in the downdraught of the global financial crisis of that time. However, whether or not that could be established as true is not important for present purposes. What is important is that the implications of a liquidation redolent in the prosecution opening is capable of creating very real prejudice.

76. As the prosecution correctly observes, the Deed of Debt issue is intimately bound up with the issues which arise under this heading. However, as will shortly appear, in my judgement, that does not assist the prosecution.

77. Part of the opening of the prosecution which carries with it the implication that the 2^nd Accused left New Zealand (and left in haste) to avoid examination by the liquidators is, in my opinion, not a conclusion which flows from liquidation. While I do not say that an admission on the part of the 2^nd Accused (there is no such admission) that this explained her travel would be the only means of proof of that state of mind, but the specific facts put forward by the prosecution as to these matters fall far short of that. In my view, the effect of the assertion in the prosecution opening is, on the state of the evidence as I understand to be, highly prejudicial even if it could be said to have some probative value. (For the avoidance of doubt, what I mean in the previous sentence by the phrase “the state of the evidence” means the whole of the evidence on this topic.)

Issue 6: Evidence of material found on the computer of the 3^rd Accused and in the possession of the 2^nd Accused

78. There are two groups of documents. The first group is found on the computer of the 3^rd Accused and the second group is found on a hard disk seized from the residence of the 2^nd Accused[30].

The Prosecution Case

79. The prosecution wishes to adduce evidence of documents found on the computer of the 3^rd Accused entitled Deed of Debts and Memorandum of Variation of Terms of Agreement. The documents were attached to emails said to be sent by the 3^rd Accused to the 2^nd Accused.

80. In relation to the documents found on a hard disk said to be found at the residence of the 2^nd Accused, they are:

(1)  document purporting to be a signed copy of an Agreement for Sale and Purchase of Real Estate relating to LV 10,175 Queen Street, Auckland, between the 1^st Accused (Anfatex Global Financial Investment Holdings Limited)  as purchaser and Sun Management Limited as vendor.
(2)  document entitled Deed of Debts[31]. That document asserts that it is made on 11 February 2009 and is between Sun Management Limited as debtor and the 1^st Accused as creditor. The document purports to be signed on behalf of Sun Management Limited by the 2^nd Accused and the 1^st Accused. Significantly, on the prosecution argument the witness of the signature of the 1^st Accused is the 3^rd Accused.
(3)  document entitled Memorandum of Variation of Terms of Agreement dated 12 February 2009[32].

81. The purpose of seeking to adduce this evidence is to show an early and continuing connection - more particularly a business connection - between each of the accused and also knowledge by the 1^st Accused of the financial difficulties of the 2^nd Accused. The prosecution seeks to use this material to show that the 1^st Accused must have known that it was untrue for him to say to Katherine Chan that the 2^nd Accused was a wealthy woman. Further, the prosecution seeks to use this material to show that it was unlikely to be true that the 2^nd Accused had made a substantial deposit on the farms in question and thus 462 could only deal with her if it wanted to acquire the farms.

The Position of the Accused

82. The position of the accused is that the Deed of Debts and the Memorandum of Variation of Terms of Agreement found in the computer of the 3^rd Accused are unsigned. Accordingly, there is no evidence of adoption of these documents by either the 1^st Accused or 2^nd Accused. It is submitted that there is no evidence the 1^st Accused ever received the documents let alone signed them. Accordingly, it is contended that there is no basis upon which these documents could be said to demonstrate the knowledge of the 1^st Accused of the impecuniosity of the 2^nd Accused.

83. Those representing the accused also make the point that the prosecution must be relying on the truth of these documents and thus, given that on any view these documents clearly predate the averments in the indictment as to the commencement of the relevant conspiracies, it would not be open to the prosecution to adduce the documents as acts and declarations by one conspirator in furtherance of one or more of the conspiracies.

Consideration

84. Had these documents found in the computer of the 3^rd Accused been proved to have been endorsed or appropriately acknowledged by the 1^st Accused and the 2^nd Accused, the position might have been different. The finding of the documents in the computer of the 3^rd Accused and no evidence (direct or inferential) that the 1^st Accused ever saw those documents removes them from any consideration that they could be prayed in aid of the proposition that the 1^st Accused knew of the impecuniosity of the 2^nd Accused.

85. However, subject to proof of signature, the documents in a hard disk found said to be found at the residence of the 2^nd Accused are in a different position. The relevant signatures, if proved, are capable of demonstrating a knowledge of the 1^st Accused and the 2^nd Accused of the transactions the subject of the documents. That the 3^rd Accused signed as witness of the 1^st Accused in the Deed of Debts document connects him to a degree to the document. It would be open to the jury to infer his knowledge of the transaction, which is the subject of the document signed by the other two accused on the basis of his continuing association with the other two accused. In my judgement, the signatures on these documents (subject to proof) provide a basis for inferring a continuing business relationship between the 3 accused.

86. Plainly, evidence of cooperation between each of the accused prior to the commencement of the dates of the conspiracies is relevant and admissible.

87. In my judgment, the files and documents found on the computer of the 3^rd Accused simply do not establish the facts or inferences of impecuniosity on the part of the 2^nd Accused that the prosecution suggests they establish. However, that the two documents found in the computer of the 3^rd Accused are in identical terms to two of the three of the documents found on a hard disk said to be found in the house of the 2^ndAccused and that is therefore in some evidence which might support the inference of a business relationship between the 2^nd Accused and the 3^rdAccused. While I was sorely tempted to conclude that the prejudicial effect of these documents outweighed their probative value, I do not think I can come to this view.

88. Clearly, it could not be said that these were acts in furtherance of the conspiracies because they predate the date in the indictment of the commencement of those conspiracies. That proposition forms no part of my analysis of the position so far as these documents are concerned.

89. In my view, the documents said to be found on a hard disk in the residence of the 2^nd Accused are admissible for the purpose of establishing a business relationship between each of the accused. The documents found in the computer of the 3^rd Accused are some evidence of such a relationship between the 2^nd Accused and the 3^rd Accused. In this regard, I have changed my mind about the use that could be put to the documents found in the computer of the 3^rd Accused. I had formerly communicated a ruling in which I had indicated they were inadmissible. I have come to the view that they are admissible but for the limited purpose I have just identified.

Issue 7: The opinions of Barry Fraser on the Commission Sharing Agreement

90. This is now, by common consent, not an issue. Even if Mr Fraser expressed that few in the course of his evidence, it would be my responsibility to direct the jury on the law and my direction would not be in accordance with his opinions as to the duration of this Commission Sharing Agreement.

Issue 8: The opening by the prosecution

The Objections

91. The accused have indicated that they object to a number of passages in the opening of the prosecution. What has happened is, as is the usual practice in complex cases including cases alleging, in effect, commercial dishonesty, that the prosecution provides a draft opening to the accused. The draft opening under consideration is the version provided by the prosecution on 5 February 2021. That has been amended to an extent in consequence of a Notice of Additional Evidence and an accompanying note from the prosecution notifying further passages for the opening. That occurred at Chinese New Year.

92. The underlying basis for the objections (including further objections notified following the additional material to which reference has just been made) is that in the event that the prosecutor opened in the terms of the current draft of the opening, the defence would move for the discharge of the jury on the basis that the opening falls foul of the requirements of the law and practice of Hong Kong because:

(1)  there are passages in the opening which can be characterised as advocacy; expressions of personal opinion and or contain emotive language;
(2)  there are assertions in the opening which are not based on evidence expected to be called in the trial;
(3)  there are passages in the opening which are tendentious or represent only a partial summary of the relevant law or issues in the case; and
(4)  there are passages in the opening which are subject to pre-trial rulings.

93. Obviously, it will be necessary to address the pre-trial objections. As to those matters, there will be rulings prior to the time when the prosecutor would be called on to open her case. Accordingly, item (4) need not be the subject of direct consideration under this heading.

94. What Counsel for the accused have done is mark up with various colours the passages in the opening which they submit fall foul of items (1) to (4). The colours correspond to the passages in the proposed opening which Counsel for the accused characterise as falling into the offending categories. This has greatly alleviated many of the difficulties in going through the passages identified by Counsel for the accused.

95. On the part of the prosecution, Ms Draycott, SC makes the point that the documents supplied to those representing the defence described as “Revised Draft Opening for retrial 5.2.21” is more properly characterised as notes for opening. Thus, for example, in the document we do not see phrases such as “It is the prosecution case that …” which it is contended clarifies many of the passages subject of objection. So far as the passages identified as a concern under item (3) an appropriate variation of the foregoing so as to introduce the assertions of the law and practice of the Hong Kong Stock Exchange is intended. In that regard, Ms Draycott, SC makes the point that it will be made plain in the opening that issues of law are matters for the Court. In general, much of the language one would normally expect in an opening does not appear there because Ms Draycott, SC and her legal team saw no need to write all of that out.

Principles

96. The principles which set the standards for a prosecution opening are not greatly in dispute. Archbold Criminal Law Pleading Evidence & Practice, Hong Kong 2021 Ed., §4-123, identifies the principal purpose of an opening: “The purpose of the opening of the prosecution case is to inform the jury of the leading features of the case and to outline for them the evidence that is going to be called”. It will be immediately obvious for the purpose of considering the present proposed opening that the case is complex and involves events over a protracted period, multiple charges, a need to appreciate the rules that govern the operation of Hong Kong listed companies and, specifically in that regard, the rules which govern how such companies are required to deal with major transactions. The characterisation by the prosecution of this case as complex is accurate. Accordingly, the notion of the leading features of the case as identified by Archbold Criminal Law Pleading Evidence & Practice, Hong Kong has to be understood by reference to the case that the prosecution intends to present.

97. The editors of Archbold Criminal Law Pleading Evidence & Practice, Hong Kong cite for the proposition cited in the preceding paragraph a Canadian case R v Mallory (2007) 217 CCC (3d) 266, §338. Before referring to that case, it is necessary to note that the leading authority on prosecutorial duty in Canada is R v Boucher (1954) 110 CCC 263[33]. In Boucher, the Supreme Court of Canada held[34]:

“It cannot be over-emphasized that the purpose of a criminal prosecution is not to obtain a conviction, it is to lay before a jury what the Crown considers to be credible evidence relevant to what is alleged to be a crime. Counsel have a duty to see that all available legal proof of the facts is presented: it should be done firmly and pressed to its legitimate strength but it must also be done fairly. The role of prosecutor excludes any notion of winning or losing; his [or her] function is a matter of public duty than which in civil life there can be none charged with greater personal responsibility. It is to be efficiently performed with an ingrained sense of the dignity, the seriousness and the justness of judicial proceedings.”

98. R v Mallory is a decision of the Ontario Court of Appeal. As will shortly be seen, Boucher (above) was an important basis for the Court’s consideration of the issues. In Mallory, the Court considered the topic of a prosecution opening against the background of what might fairly be considered a fairly tendentious opening. The Court observed[35]:

“[336] The Crown’s role in the prosecution of criminal offences has long been recognized as quasi-ministerial. Success for the Crown is not measured in wins and losses. We repeat here the words of Rand J. in R v Boucher, supra, at 270, “The role of the prosecutor excludes any notion of winning or losing; his function is a matter of public duty … It is to be efficiently performed with an ingrained sense of the dignity, the seriousness and the justness of judicial proceedings.” Moreover, as Kerwin C.J. noted in R v Boucher at 265, the Crown’s role is to assist the jury:
but he exceeds that duty when he expresses by inflammatory or vindictive language his own personal opinion that the accused is guilty, or when his remarks tend to leave the jury an impression that the investigation made by the Crown is such that they should find the accused guilty.
[337] More recently, the Supreme Court acknowledged in R v Cook (1997), 114 CCC (3d) 481 at para. 21 (SCC), rev’g (1996), 107 CCC (3d) 334 (NBCA), that while ‘it is without question that the Crown performs a special function in ensuring that justice is served and cannot adopt a purely adversarial role towards the defence’ it is also ‘well recognized that the adversarial process is an important part of our judicial system and an accepted tool in our search for the truth’. Within the adversarial process the Crown is permitted to act as a strong advocate. Within the bounds set out in R v Boucher, supra, ‘the Crown must be allowed to perform the function with which it has been entrusted’: R v Cook, supra, at para. 21.
[338] It is well established that the opening address is not the appropriate forum for argument, invective, or opinion. The Crown should use the opening address to introduce the parties, explain the process, and provide a general overview of the evidence that the Crown anticipates calling in support of its case: see R v Griffin, [1993] O.J. No. 2573 at paras. 25-31 (Gen. Div.); R v Porter, [1992] O.J. No. 2931 (Gen. Div.); R v Sun, [2002] O.J. No. 2166 (S.C.J.); R v White, [1997] O.J. No. 5899 (Gen. Div.). Simply put, ‘the Crown’s opening address should be impartial and fair, a brief outline of the evidence that the Crown intends to call’: R v Griffin at para. 31. At the opening of the trial the rules constraining the Crown ‘should apply with even more vigour’ than at the closing when by then the jurors have heard and seen all about the case: R v Griffin at para. 23.”

99. In Hong Kong, the Full Court of the Supreme Court considered the issue in Kwan Cheung Tai and Yu Ming Shing v R [1959] HKLR 141. In that case, which concerned whether it was permissible for the prosecutor to open his case in relation to admissions attributed to the Accused, Hogan CJ held[36]:

“The reason for these objections seems, however, now to be fully met by the current practice of enquiring from counsel for the defendant whether there is any intention to object to the admission of the confession and where there is none it would seem that prosecuting counsel may properly refer to it when opening and, in these circumstances, there would appear to be no reason why counsel should not refer to or read specific extracts from the statement, provided he keeps within the bounds and limits of an opening address, the purpose of which is merely to inform the jury of the leading features of the case and to outline for them the evidence which is going to be proved but which is not intended to influence by advocacy their ultimate decision on the charges before them.”

100. It is manifest that there limits on what the prosecutor can do and say in an opening. In the New Zealand Court of Appeal in R v Roulston [1976] 2 NZLR 644 the Court examined those limits and observed[37]:

“… it has always been recognised that prosecuting counsel must never strain for a conviction, still less adopt tactics that involve an appeal to prejudice or amount to an intemperate or emotional attack upon the accused. Such conduct is entirely inappropriate and a basic misconception of the function of any barrister who assumes the responsibility of speaking for the community at the trial of an accused person. Naturally enough a proper balance needs to be maintained. The view expressed in Halsbury’s Laws of England [vol 10] (3^rd ed) para 761 that prosecuting counsel ‘should regard themselves as ministers of justice assisting in its administration’ ought not to lead to the assumption of a role so emasculated as to merit Lord Devlin’s remarks in Trial by Jury (1966 ed) pp 122-123:
‘… in some places the pendulum has swung so far, and the ministry has moved so close to the opposition, that the prosecution’s case is not adequately presented, and counsel, frightened of being accused of an excess of fervour; tend to do little except talk of reasonable doubt and leave the final speech on the facts to the judge.’
The feel and atmosphere of one trial may make it reasonable and even necessary for tactics to be employed that would seem out of place and disproportionate to the circumstances of another. Nevertheless, it is wrong for Crown counsel to become so much the advocate that he is fighting for a conviction and quite impermissible to embark upon a course of conduct calculated to persuade a jury to a point of view by the introduction of factors of prejudice or emotion. If such a situation should develop and there is a real risk that the conduct complained of may have tipped the balance against the Accused then an appellate court will not hesitate to follow the safe course and order a new trial.”

101. The clear implication of the message from Roulston is that while there are while there are clear limitations to be imposed upon a prosecutor, an element of firmness is clearly to be permitted.

102. In R v Rugari [2001] NSWCCA 64, 122 A Crim R 1[38], the New South Wales Court of Criminal Appeal cited with approval the foregoing passage and, perhaps wryly observed: “Thus although Crown Prosecutors are subject to considerable constraints, they must nevertheless discharge their obligations fearlessly in the interests of the Crown, acting on behalf of the community”[39].

103. Counsel for the accused also referred to Randall v R [2002] UKPC 19, [2002] 1 WLR 2237. That case, decision of the Privy Council, stressed the adversarial nature of proceedings. Lord Bingham, delivering the advice of the Privy Council, observed in this regard[40]:

“A contested criminal trial on indictment is adversarial in character. The prosecution seeks to satisfy the jury of the guilt of the accused beyond reasonable doubt. The defence seeks to resist and rebut such proof. The objects of the parties are fundamentally opposed. There may well be disputes concerning the relevance and admissibility of evidence. There will almost always be a conflict of evidence. Some witnesses may be impugned as unreliable, others perhaps as dishonest. Witnesses on both sides may be accused of exaggerating or even fabricating their evidence. Defendants may choose to act in an obstructive and evasive manner. Opposing counsel may find each other easy to work with or they may not. It is not unusual for tempers to become frayed and relations strained. In a fraud trial the pressure on all involved may be even more acute than in other trials. Fraud trials tend to involve a great deal of documentation, which is particularly cumbersome to handle in a jury trial. They tend to involve much unfamiliar detail, often of a technical nature, which it is difficult for many people to understand, assimilate, retain and recall. And fraud trials tend to be very long, which in itself tends to increase the strain on all involved, whether the defendant, witnesses, jurors, counsel or the judge.”

104. Against that background, Lord Bingham made the point that there are some basic rules that must be observed by the prosecution. In this context, he held that: “The duty of prosecuting counsel is not to obtain a conviction at all costs but to act as a minister of justice: R v Puddick (1865) 4 F & F 497, 499; R v Banks [1916] 2 KB 621, 623”[41]. His Lordship then cited with approval the passage from the Canadian Supreme Court in R v Boucher (above).

105. The Secretary for Justice has published guidelines for prosecutors. The current edition of these guidelines is Prosecution Code 2013. That code says paragraph 3.3“The prosecutor’s advocacy role must be conducted temperately and with restraint…”; paragraph 3.5(c) “refrain from using language or conduct that may inflame or bias the court against the accused…”; and paragraph 3.7 “A prosecutor must not lead the court or defence to believe that the prosecution has evidence supporting an aspect of its case unless the prosecutor believes on reasonable grounds that such evidence will be produced from material already available…”.

106. Generally, prosecuting counsel should not open on the law. However, in R v Lashley [2005] EWCA Crim 2016, [2006] Crim LR 83, Judge LJ held that: “The presumption should be that an opening address by counsel for the Crown should not address the law, saves in cases of real complication and difficulty where counsel believes and the trial judge agrees that the jury may be assisted by a brief and well-focussed submission”[42]. In that case, the English Court of Appeal was dealing with a comparatively simple case involving the dishonest use of a credit card. In terms of complication, it is fair to say that both in terms of the facts and, to an extent, the law the present case is clearly the other end of the scale. Part of this case involves the application of the Listing Rules through which the Hong Kong Stock Exchange regulates significant aspects of the conduct of listed companies in this jurisdiction. Those Rules are manifestly relevant to the evaluation of the critical issues of fact in this case. In my view, it is difficult to conceive of a prosecution opening in a case such as this which did not touch on the law. There is also the issue of what the prosecution has to prove to establish either an offence of conspiracy to defraud or the offence of dealing with property known or reasonably believed to represent the proceeds of an indictable offence. I would go so far as to say that I would positively encourage references to, in particular, the relevant aspects of the Listing Rules. I cannot conceive of how a jury could be expected to understand the significance of the conduct attributed to the various accused without realising that these Rules are a critical component of the analysis that the jury will be expected to undertake.

107. Those representing the accused contend that by reference to those passages in the proposed opening that there is more to the issues of law than is contended by the prosecutor in that opening. I asked for but, to date have not received from those representing the accused, the statement of where they disagree with the correctness of the propositions asserted by the prosecution in relation to the Listing Rules.

108. Against that background, it is appropriate to examine the passages which are the subject of complaint referred to in the draft prosecution opening.

109. In my opinion, what is at the heart of the concerns outlined above is that the accused have a fair trial. In this context, the nature of a fair trial is informed by the adversarial process which underlies our system of criminal justice. Nevertheless, there are appropriate constraints imposed on a prosecutor because a prosecutor is not just a party to the proceedings but prosecutes on behalf of the community. The prosecutor obtains a very substantial advantage in being able to make an opening statement which is almost always not followed by a rebuttal on the part of the defence. What the community expects is a clear statement by the prosecution of what evidence the prosecution proposes to call and to provide a framework against which that evidence is to be evaluated. This is particularly of importance in what is likely to be a long case with complex facts and difficult issues for resolution. The framework for that resolution includes not just a simple statement of the elements of the offence and a path to conviction. It requires real skill and a sense of restraint because the object of the exercise is, ultimately to assist the jury towards a focused resolution of what are, on any view, difficult issues.

Evaluation of the Objections

First category of objection

110. The first category of objection concerns passages in the opening which can be characterised as advocacy; expressions of personal opinion and or contain emotive language. There are a number of passages and I do not propose to cite all of them. What I propose to do is cite a sample of the impugned passages.

111. An example is to be seen in paragraph 10 of the opening. That says[43]:

“Their plan was to be the middleman, using the company’s money to finance Jack and May’s purchase of the assets from the original owner, as well as the company’s purchase of the same assets from Jack and May. They would get the difference in price without paying or risking a dollar of their own. But the idea grew from there and they thought if they set the selling price high but told the company that any money that could not be raised on the financial market could be paid in shares, the company might agree because the shares would cost it nothing.”

112. The example in paragraph 10 to which reference is just been made needs to be read with paragraph 11 of the opening which is as follows:

“This was undoubtedly clever because they take the money that was raised and could pay the farm owners, pocketing any extra the cash that could be raised and selling the farms to the company but also get the controlling shareholding in the company. If it worked, they could get the profit on the sale in cash but still own the farms through the company as shareholders. This was not going to be easy but the beauty of it was that they weren’t taking any risk themselves and could abandon the scheme at any time if it went wrong, taking whatever they could get. If it worked they would make millions. It would undoubtedly make the scheme work better if someone on their side was working from the inside of the company. Then they could manipulate the deal from both sides.”

113. Further, at paragraph 17 of the opening we see the following:

“The agreement shows that Jack and May were working together on the project intending to profit together, at least from that date. You will hear that this relationship of sharing in the profits was also something they lied about. Commission was however only the first way they aimed to profit.”

114. There are further passages which are marked as objectionable on the basis of the first category of objection. In some of them, for example paragraph 23, the prosecutor speaks of hiding certain facts. At paragraph 30, the prosecutor is quoted as saying that the 1^st Accused and the 2^nd Accused placed themselves on both sides of the deal. In my opinion, while I take the view that this is forcefully expressed, it does not step over the line and become the form of prohibited advocacy which the authorities say is unacceptable. The characterisation of the scheme as “undoubtedly clever” gets very close to the line of what would be acceptable in an opening but, in my opinion, it does not step over the line. In expressing this view, I proceed upon the assumption that there will be, the appropriate prefacing of these remarks by the proposition that this is the prosecution case and not the personal opinion of the prosecutor.

115. A further species of objection under this heading concerns the role of the Stock Exchange of Hong Kong Limited. For example, at paragraph 33, there is a reference to the Stock Exchange acting “as a gatekeeper to try to keep the market transparent and honest. The reasons are clearly to protect investors and shareholders by making sure companies tell the truth about what they are marketing and to promote a transparent, open and fair marketplace for everyone”. It could be argued that this spills over into the objections concerning the law and practice of the Stock Exchange which is the subject of the third objection. Again, however characterised, it seems to me that this is clearly an expression of the prosecution case firmly put.

Second category of objection

116. The second objection is that there are assertions in the opening which are not to be found in the evidence. Again, there are a number of examples. At paragraph 25 of the opening, the passage which is impugned is: “We believe he already knew of her status at 462 and that is why he contacted her”. On any view, the expression “we believe” is objectionable. Apart from that, what is asserted in the passage I have just quoted is essentially an inference from prove facts. The fact that the prosecution may, in the end, not be able to establish that inference is not to the point. If the passage was expressed “It would be open to you to conclude he already knew of her status at 462 and that is why he contacted her”. Then, in my opinion, no objection could be made on this ground.

Third category of objection

117. The third category of objection concerns what are asserted to be tendentious and/or partial summaries of the relevant law. Again, my preferred approach is to use examples. The first comes from paragraph 42 of the opening. The passage is as follows: “You may have heard of a Reverse Takeover. It is where someone or some private company buys a controlling shareholding in a listed company and then ‘injects’ an asset into it. It is a way of listing the asset without the checks and scrutiny I have explained to you. The [Stock Exchange of Hong Kong Limited] does not permit this to happen and seek to prevent such takeovers if they can, but it is not always easy”. In my opinion, the problem here is not a statement of law although there is some law which underlies the statement. This is more a statement of policy and it is open to the prosecution to put forward their understanding of the policy of the Stock Exchange of Hong Kong Limited.

118. Another example of this third objection may be seen in paragraph 46 of the opening. This is a long passage and the whole of that is impugned. The passage reads: “It follows that chief among the director’s duties is the duty to disclose, to make known to both the company and the [Stock Exchange] if he had a personal interest that might conflict with the interests of the company. As a director it is paramount that you are full and frank in your disclosure and do not hide matters that might influence or affect investors when they decide whether to trust the company with their money; they must be allowed to know the whole truth and to make their own informed decisions. The director’s duty is therefore not only to tell the truth but not to hide matters either. He must approach the company’s business with a clear and open mind so that he makes the best choices for the company. He may not keep to himself things which might sway the judgment one way or the other”.

119. The impugned passage in paragraph 46 of the opening is part of the prosecution’s summary of what a director’s duties are. To say the least, as I understand the prosecution case, that is utterly critical to the prosecution. At the heart of the prosecution case is the assertion that the 1^stAccused (the prosecution use “Jack”) abjectly failed in his duties as a director. That there might be a different view is relevant but not finally determinative. Unless I could be persuaded that the view of the prosecution is utterly untenable then it seems to me that what is said here is a view the prosecution is entitled to put. Even if I was persuaded to take a different view, what matters is Rule 3 of the Listing Rules which the jury will see and in respect of which, in due course, I intend to give appropriate directions. Whilst the impugned passage might conceivably be accused of over-simplification, I do not regard this in the context as objectionable.

Fourth category of objection

120. The final category of objections - the fourth category - is matters the subject of further ruling. I do not intend to take this further at the moment.

Resolution

121. Ultimately, the analysis I have undertaken against the principles of law and practice as I understand them to be is, of necessity, prospective rather than retrospective. I profoundly appreciate those representing the accused raising the issue at this stage in order that an application to discharge the jury may be avoided. To state the obvious, avoiding the risk of such a discharge is a highly desirable object. However, ultimately the test would have to be made as to whether there is an objection to what is actually said rather than looking prospectively. This is, with respect, not just the appropriate way to address the issue but, consistent with a smooth-running trial, the only way to address the issue. This is especially so given that the opening is likely to occupy substantial portions of two days. The idea of the prosecutor opening and then leaving it to the accused to take exception to that opening and to invite the Court to discharge the newly-empaneled jury is totally unacceptable. I mention this because it was faintly suggested by Ms Draycott, SC at one stage during submissions about one aspect of the opening that if the defence did not like that opening, they could always apply to the Court to discharge the jury after the opening. I also indicated to the parties that I had no desire to go through the prosecution’s draft opening on a line-by-line basis. I have already made rulings which will have an impact on specific passages of the opening and I hope my rulings are clear but if they are not, as will shortly appear, I intend to give liberty to apply.

122. In my judgment, looking prospectively at the draft of the opening, this is a clear, firm statement of what the prosecution case is. Looking prospectively, I do not think it is objectionable. If it is delivered appropriately it will provide the jury with a framework for analysis which they will desperately need if they are to come to a fair resolution of the case.

Issue 9: Documents found at the home of the 2^nd Accused

123. The prosecution seek to re-open a ruling of Anthea Pang J given on 26 October 2015 in respect of two documents found in the bedroom of the 2^ndAccused. They are letters of appointment and resignation which purport to be signed by Luo Ji and Ng Yat Fung Miranda who were, at one time, members of the Board of Directors of 462. Critically, these two persons were on the Board of Directors at the time of the decision to permit conversion of the convertible notes into shares.

124. The case for the prosecution is that these documents show that both of these to name persons were recruited to promote the interests of UBFM rather than 462 and gave the 2^nd Accused the option of dismissing them at will. The prosecution contend that whether or not the signatures on the document are those of the two named persons the documents show the intention of the 2^nd Accused to control the Board of Directors of 462.

125. In the ruling of Anthea Pang J of 26 October 2015, she restated the prosecution argument I have just summarised and she observed:

(1) In these circumstances, for the prosecution to say that they do not need to rely on the truthfulness of the content of these documents is not correct. Moreover, the prosecution are not calling any of the purported author’s of the documents to testify at trial. Without any evidence as to who prepared these documents, when, where, and under what circumstances they were prepared, they were simply documents with some scribblings or writings on them. In other words, there is no proof as to who wrote these documents and whether the content of these documents is true or not. Thus, to allow the prosecution to use these document clearly offends the documentary hearsay rule.
(2) Plainly, the prosecution cannot use some documents of unknown origin and unknown authorship to suggest that such documents are probative of an accused’s state of mind, or that the documents were prepared at the instigation or direction of an accused, when no evidence is to be called on this aspect. The fact that these documents were found in the 2^nd Accused’s home does not take it any further. This fact alone would not assist improving whether or not the content of the documents is true or not. In any event, the prejudicial effect of these documents outweighs its probative value, if any.

126. The prosecution submitted that the possession of these letters of resignation shows that the 2^nd Accused was in control of the signatory’s position on the Board of Directors of 462. The prosecution contend: “She held in her hand the means to get rid of them at will”. The prosecution goes on to argue that this was evidence that it was the intention of the 2^nd Accused when they were appointed that they should further her agenda rather than the best interests of 462, as they were obliged to do.

127. The prosecution went on to argue that it did not matter whether the documents were genuine. The prosecution contended that the judgment of Anthea Pang J conflates the issue of the truth of the contents with the reason that the 2^nd Accused had the documents. It also conflates the documents and the purpose to which you could put them. In oral argument the prosecutor went as far as to suggest that even if they were forgeries the 2^nd Accused could use them to get the two named persons off the Board if they did not do her bidding. There was an additional document of resignation from the Board of Directors of 462 which purported to be signed by Mr Wu Neng Kun. This Mr Wu was, apparently, the nephew of the 1^st Accused.

128. In my judgment, if the documents were genuine then there was some evidence from which it could be inferred that the 2^nd Accused intended to control the appointments of the two named persons. It is not good enough to say, as the prosecution does, that there is no reason to suppose that the documents are not genuine. As Anthea Pang J observed: “Without any evidence as to who prepared these documents, when, where, and under what circumstances were they prepared, they were simply documents with some scribblings or writings on them”. In my view, the documents only have probative value if they were genuine. Absent that, they are just documents.

129. I disagree with the prosecution contention that these documents could have been useful even if they were fake. In my view, that assumes without any proper foundation that 462 or it is officers were suitably gullible or pliable so as to act on these documents.

130. In short, I am in respectful agreement with the ruling of Anthea Pang J including her ultimate holding that even if the documents were admissible, any probative effect of the documents is outweighed by their capacity to cause prejudice. The documents are, accordingly, held to be inadmissible.

Conclusion

131. The object of hearing submissions over a number of days in relation to the issues raised in this case was to have the issues resolved before the commencement of the trial in order to promote the smooth-running of that trial. The first trial was constantly punctuated by issues in which the parties sought rulings from Anthea Pang J. From my reading of the transcript and her rulings, these were dealt with quickly and firmly. However, of necessity there were rulings from time to time in which the natural order of things was that the jury were sent away for some time while issues were raised. In my opinion, this will be a hard enough trial for the best of juries to comprehend. Those punctuations for the jury while counsel and the Court resolve issues of law and admissibility are not conducive to jury comprehension. Of course, there will be times when there will be a necessary punctuation for this purpose. It is important that these be kept to a minimum out of consideration for the jury.

132. Of course, prospective rulings such as these may require refinement as circumstances develop and there may not be complete clarity in the rulings that I have given. Accordingly, I indicate that there will be liberty to apply as far as these rulings are concerned.

	(Andrew Bruce, SC)
	Deputy High Court Judge

Ms Charlotte Draycott SC leading Mr Li Chun-ngai Martin, on fiat and Miss Ng Oi-lam Joycelyn SPP of the Department of Justice, for HKSAR

Mr Tim Owen QC leading Mr Tsoi Y M Benson, instructed by Boase Cohen & Collins, for the 1^st accused

Mr Ian Winter QC leading Mr Cao Yuan-shan and Ms Betty Chiu instructed by Haldanes, for the 2^nd accused

Mr David A S Khosa, instructed by Hobson & Ma, for the 3^rd accused

[1] Prosecution’s Reply on Disclosure dated 4 February 2021, §5 & 6.

[2] Prosecution’s Reply on Disclosure dated 4 February 2021, §8.

[3]Ibid.

[4] (2003) 6 HKCFAR 336, §170 & 171.

[5]R v Joof & Ors [2012] EWCA Crim 1475, at para [17]; HKSAR v Ng Chun To Raymond (吳鎮濤) & Anor [2013] 5 HKC 390, [2013] HKCU 1731, at para [75].

[6]HKSAR v Sze Mei Mun & Ors [2014] 5 HKC 513, [2014] 3 HKLRD 452; R v Flook [2010] 1 Cr App R 30; HKSAR v X [2016] 4 HKLRD 387, [2016] HKCU 1907. See also: BA v Attorney-General [2017] VSC 259, 266 A Crim R 497, 319 FLR 329

[7] As Anthea Pang JA then was.

[8] Ruling dated 16 October 2015, §8 & 9.

[9] Ruling dated 16 October 2015, §11.

[10] Ruling dated 23 October 2015, §8 & 9.

[11] Revised Draft Opening, §64 & 65.

[12] Draft Opening dated 24 February 2021 (updated), §72.

[13] Ibid.

[14] Ruling dated 16 October 2015, §32-36.

[15] Prosecution’s Reply to the Defence Joint Submissions dated 29 January 2021, §1.

[16] Ruling dated 23 October 2015, §8 & 9.

[17] Ruling dated 16 October 2015, §33.

[18] Draft Opening, §284.

[19] Prosecution’s Reply to the Defence Joint Submissions dated 29 January 2021, §11.

[20] Ruling dated 16 October 2015, §26-31.

[21]R v Chan Kwok Keung & Anor [1990] 1 HKLR 359 at 363; HKSAR v Yuen Yu Kin [2018] 4 HKLRD 717, [2018] HKCU 1996, [2018] HKCA 354; HKSAR v Zhou Limei [2020] 1 HKLRD 234, [2018] HKCA 592.

[22]Winnie Lo v HKSAR (2012) 15 HKCFAR 16, §114-116; HKSAR v Wong Tak Keung (2015) 18 HKCFAR 62; HKSAR v Ferosh (2018) 21 HKCFAR 159.

[23]DPP (NSW) v JMR (1991) 57 A Crim R 39, 43-44.

[24] See, for example, HKSAR v Wang Jinwei & Ors [2018] 1 HKLRD 459.

[25] Draft Opening, §2.

[26] Draft Opening, §2 & 12.

[27] Draft Opening, §2.

[28] Joint Defence Skeleton Argument on pre-trial matters, §54.

[29] Joint Defence Skeleton Argument on pre-trial matters, §56.

[30] Witness statements dated 18 and 28 January 2021 by Li Kai Pong in the Bundles of Additional Evidence (1) & (2). The statements simply records that Mr Li examined the hard disk. It does not assert that he found the hard disk at the residence of the 2^nd Accused.

[31] Bundle of Additional Evidence (2) dated 28 January 2021 at AE 49 to AE 51.

[32] Bundle of Additional Evidence (2) dated 28 January 2021 at AE 52 & AE 53.

[33] As will shortly appear, Boucher was cited with approval in relatively recent times by the Privy Council in Randall v R [2002] UKPC 19, [2002] 1 WLR 2237. That case is discussed later in these reasons.

[34] (1954) 110 CCC 263, 270.

[35] (2007) 217 CCC (3d) 266, §336-338.

[36] [1959] HKLR 141, 154-155. The quotation attributed to Sir Michael Hogan CJ in Archbold Criminal Law Pleading Evidence & Practice, Hong Kong is not accurate.

[37] [1976] 2 NZLR 644, 654.

[38] This decision is cited in Archbold Criminal Law Pleading Evidence & Practice, Hong Kong, §4-123.

[39] [2001] NSWCCA 64, 122 A Crim R 1, §52.

[40] [2002] UKPC 19, [2002] 1 WLR 2237, §9.

[41] [2002] UKPC 19, [2002] 1 WLR 2237, §10(1).

[42] [2005] EWCA Crim 2016, [2006] Crim LR 83, §13.

[43] The underlining is to mark the passages which were the subject of the objection in the submissions of the accused.

HCCC 309/2019

[2021] HKCFI 3046

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

__________________

BETWEEN
	HKSAR
and
	CHEN KEEN (alias JACK CHEN)	1st Accused
	HAO MAY (formerly known as WANG MAY YAN) (alias MAY WANG)	2nd Accused
	YEE WENJIE (also known as YU WENJIE) (alias ERIC YEE)	3rd Accused

__________________

Before: Deputy High Court Judge Bruce SC in Court

Date of Hearing: 30 March 2021

Dates of Ruling: 9 and 13 April 2021

Date of Reason for Ruling: 12 October 2021

__________________________________________________

APPLICATION TO EXCLUDE ASPECTS OF THE
PROPOSED TESTIMONY OF WILLIAM WONG
AND CINDY NGAI: RULING

__________________________________________________

INTRODUCTION: issues for consideration

1. The prosecution intends to call two witnesses from the Stock Exchange of Hong Kong Limited (“SEHK”). They are Mr Wong Chun-ling, William and Ms Ngai Sze-yee, Cindy. Both are employees of the SEHK. In 2012, Mr Wong was an Assistant Vice President of the Listing Division of the SEHK. In 2012, Ms Cindy Ngai was an Assistant Manager in the Listing Division. She is now an Assistant Vice President.

2. The SEHK is, amongst its many functions, the frontline regulator of companies listed on the Main Board of the Exchange (exchange company) and also the Growth Enterprise Market (GEM). Section 21 of the Securities and Futures Ordinance, Cap 571 (“the Ordinance”) articulates the duties of the Exchange. The relevant parts of section 21 provide:

(1)  It shall be the duty of a recognized exchange company to ensure-
(a)  so far as reasonably practicable, an orderly, informed and fair market-
(i) in the case of a recognized exchange company which operates a stock market, in securities that are traded on that stock market or through the facilities of that company; or
(ii) [not relevant]; and
(iii) [not relevant]; and
(b)  that risks associated with its business and operations are managed prudently.
(2)  In discharging its duty under subsection (1), a recognized exchange company shall-
(a)  act in the interest of the public, having particular regard to the interest of the investing public; and
(b)  ensure that the interest of the public prevails where it conflicts with the interest of the recognized exchange company.

The SEHK must operate its facilities in accordance with the rules made under section 23 of the Ordinance and approved under section 24.[1] The Exchange is required to formulate and implement appropriate procedures for ensuring that its exchange participants comply with the rules of the company.[2]

3. There are three levels of enforcement of the rules referred to in section 23. The first is sanctions imposed by the SEHK. The second is the obligation under section 21(5) of the Ordinance which provides as follows:

(5)  A recognized exchange company shall immediately notify the Commission if it becomes aware-
(a)  that any of its exchange participants is unable to comply with any rules of the company or any financial resources rules; or
(b)  of a financial irregularity or other matter which in the opinion of the company may indicate that the financial standing or integrity of an exchange participant is in question, or that an exchange participant may not be able to meet his legal obligations.

In that provision, the Commission is the Securities and Futures Commission (“Commission”). This provision is much more than a provision for enforcing rules made under section 23. The Commission under the Ordinance has a wide range of sanctioning powers and investigatory powers as well as the provision of criminal sanctions to regulate matters within its purview. The third level of enforcement is the use of ordinary criminal sanctions. The line between the second and third levels is, to some extent blurred because the Commission can in some circumstances prosecute. In any event, criminal proceedings may occur where the Commission is not the prosecutor or the informant. Within this category there are cases where the rules made under section 23 may be an important part of the background of a case involving a listed company and there are cases where the indictment alleges an offence and explicitly avers conduct which is in breach of those rules.

4. The Ordinance contemplates more than one recognised stock exchange in Hong Kong. There is only one at the moment and that was the position at the time germane to these proceedings.

5. Section 23 of the Ordinance empowers the SEHK to make rules. Section 23(1) provides that those rules “for such matters as are necessary or desirable” may be made for the purpose of:

(a) for the proper regulation and efficient operation of the market which it operates;
(b) for the proper regulation of its exchange participants and holders of trading rights;

Section 23(1)(c) is not presently relevant. What is necessary or desirable must be understood against the background of the duties of such an exchange articulated in section 21. Section 23(2) lists a non-exclusive list of topics upon which the Exchange may make rules. That subsection provides:

(2)  Without limiting the generality of subsection (1), a recognized exchange company which may operate a stock market may make rules for-
(a)  applications for the listing of securities and the requirements to be met before securities may be listed;
(b)  the entering into of agreements between the recognized exchange company and other persons in connection with the listing of securities, and the enforcement of those agreements by the company;
(c)  the cancellation and withdrawal of the listing of, and the suspension and resumption of dealings in, securities listed on the recognized stock market operated by the recognized exchange company;
(d)  the imposition on any person of obligations to observe specified standards of conduct or to perform, or refrain from performing, specified acts reasonably imposed in connection with the listing or continued listing of securities;
(e)  the admission of securities which are regulated in a jurisdiction outside Hong Kong to trading on a recognized stock market operated by the recognized exchange company;
(f)  the penalties or sanctions which may be imposed by the recognized exchange company for a breach of rules made under this section;
(g)  procedures or conditions which may be imposed, or circumstances which are required to exist, in relation to matters which are provided for in the rules made under this section;
(h)  dealing with possible conflicts of interest that might arise where a relevant corporation or a relevant recognized exchange controller seeks to be or is a listed corporation;
(i)  such other matters as are necessary or desirable for the proper and efficient operation and management of the recognized exchange company.

6. Sections 23(3)-(5) and 24(1)-(7) of the Ordinance recognise the importance of the Securities and Futures Commission and the Financial Secretary in the making of rules. Critically, section 24(8) declares:

Neither the rules under section 23 nor a notice under subsection (7) is subsidiary legislation.

7. The declaration under section 24(8) obviates the need for the rules made under section 23 to be treated as subsidiary legislation under the Interpretation and General Clauses Ordinance, Cap 1. Ordinarily, the definition of subsidiary legislation in section 3 of that Ordinance would make such rules a candidate for treatment as subsidiary legislation. The relevant part of section 3 provides a definition of subsidiary legislation to cover a: “any proclamation, rule, regulation, order, resolution, notice, rule of court, bylaw or other instrument made under or by virtue of any Ordinance and having legislative effect”. One of the important consequences of being one of the things mentioned in the definition of subsidiary legislation is that by reason of section 34 of the Interpretation and General Clauses Ordinance is to subject such items to the scrutiny of the Legislative Council. Plainly, such an arrangement might be viewed as inconsistent with the provisions of sections 23(3)-(5) and 24(1)-(7) of the Ordinance which give the Securities and Futures Commission and the Financial Secretary a great deal of input as the content of rules made under section 23 of the Ordinance.

SUBMISSIONS

The position of the accused

8. Counsel for the accused submit that Mr Wong and Ms Ngai should not be permitted to give evidence on:

(1)  What they consider to be the meaning or interpretation of specific provisions of the Listing Rules (the “Rules”);
(2)  What they consider to be the “correct” application or requirements of any particular rule to a given (assumed) factual scenario - for example, the duty of disclosure and what ought to be disclosed;
(3)  What their subjective “concern” / “motivation” may have been when relying on specific rules in his/her correspondence with 462;
(4)  Whether any rules have been breached in this case (whether as a matter of fact or a matter of hypothetical scenarios).

9. The basis for these submissions is:

(1)  the correct interpretation of the Rules, the requirements under particular rules and whether particular rules are engaged, are matters of law for the Court;
(2)  the witnesses’ subjective interpretation or view as to applicability / scope / meaning / requirements / breaches of the Rules are all inadmissible parol or opinion evidence; and
(3)  the witnesses’ subjective understanding of particular rules and their subjective reasons for referring 462 to particular rules are irrelevant to the charges that the Defendants face (the issue of which is the Defendants’ understanding of the representations made) and are thus inadmissible.

The position of the accused

10. The prosecution contention is that no definitive interpretation is required because the Listing Rules do not form part of the subject matter of the charges in the indictment. It is contended that “evidence of how the SEHK interpret and apply the Rules is relevant to the issue of the exercise of their public duty (to ensure so far as is practicable a fair, open and transparent market for the buying and selling of shares) and whether the actions/inaction of the Defendants dishonestly risked impeding that”.

DISCUSSION

11. What underlies the primary submissions of the accused is, in essence, twofold. First, the Listing Rules are a species of law or are rules to be treated as a species of law and it is, accordingly, for the Court to direct the jury as to the meaning of those Rules. Second, as the rules are a species of law or are rules to be treated as a species of law is not open to a witness, in this case a prosecution witness, to give expert evidence on the meaning and application of such laws. It is trite law that construction of domestic law is not a matter upon which expert evidence may be admitted: British Celanese Ltd v Courtaulds Ltd (1935) 52 RPC 171, 198; Chen Paul & Anor v Lord Energy Ltd [1998] 1 HKC 702, 703; Re Setaffa Investments [1998] 2 HKLRD 236, 244. The situation would be different if the issue was foreign law. Plainly, the effect of the legislative provisions to which I have referred make it plain that the Listing Rules made under section 23 are not subsidiary legislation.

12. The rule as to the construction of domestic (as opposed to foreign) statutory material may extend to provisions which are to be treated as a species of law: R v Spens [1991] 1 WLR 624, 93 Cr App R 194.

13. The decision in R v Spens is critical to the argument of the accused. In that case, the appeal concerned a conviction for conspiring to induce shareholders to enter into an agreement by the dishonest concealment of material facts, and with false accounting. At the heart of the conviction was a breach or breaches of the City Code on Take-overs and Mergers. The appellant complained that at a preparatory hearing the trial Judge had ruled that although the relevant Code was not law as such the issue of construction of the Code was a matter for him and not the jury. The Court of Appeal endorsed the following description of the Code:[3]

“The Code represents the collective opinion of those professionally involved in the field of take-overs on a range of business standards. It is not concerned with the financial or commercial advantages or disadvantages of a take-over.”

Later in the decision of the Court of Appeal, Watkins LJ observed:^{^[4]}

“The provisions of the Code have become well known in commercial and business circles and to bankers and stockbrokers among others. A breach, or breaches of it, can obviously have very serious penalising effects on the transgressor in take-over situations. The Code was formulated and brought into effect with the agreement of all those likely to be affected by it at the time. It is unlikely that any one engaged in taking over a company or business would be unaware of its provisions and its machinery, the working of the Panel especially.”

Watkins LJ observed that the Code does not have the force of law.^{^[5]}

14. The central contention of the appellant in R v Spens was that the construction of the Code was a matter for the jury and not for the Judge. The Court of Appeal held:^{^[6]}

“As to the present case, our view is that the Code sufficiently resembles legislation as to be likewise regarded as demanding construction of its provisions by a judge. Moreover, the Code is a form of consensual agreement between affected parties with penal consequences. A further and almost overriding consideration is that if the judge’s construction were not the governing influence, the inevitable danger of inconsistency in juries’ findings on the meaning of the Code would arise with possibly disastrous consequences. The very policy of the law militates, in our opinion, against that result.”

15. The correctness of the approach in Spens (above) has never been doubted. The approach underlies the basis of decisions of the English Court of Appeal in R v H [2015] EWCA Crim 46 and R v Merchant and Mathew [2018] 1 Cr App R 11 concerning the London Interbank Offered Rate (LIBOR) and R v Bermingham and Anor [2020] EWCA Crim 1662 about the Euro Interbank Offered Rate (Euribor) subject to a Code of Conduct. The issues in each of those cases was different to that in Spens (above) and, indeed, basically assumed the correctness of that approach.

16. In many respects, the decision of the Court of Final Appeal in HKSAR v Cheng Chee Tock Theodore (No 2) (2016) 19 HKCFAR 86 proceeded on the same kind of assumption. That case is more germane to the issue at hand because it considered the application of the Listing Rules in the context of a charge of conspiracy to defraud. As a matter of detail, it appears that the charge of conspiracy to defraud in Cheng Chee TockTheodore included specific reference to the Listing Rules. The Court of Final Appeal considered and applied aspects of the Listing Rules and as those representing the accused point out, there was never any suggestion that these were issues for the jury.

17. The issue was considered at the first hearing of these proceedings before Anthea Pang J[7]. She held:[8]

“I do not accept that [Mr Wong] cannot be asked, whether by the prosecution or by the defence, as to what was expected to be done by 462’s directors under the Listing Rules in respect of the acquisition; what was done by the Stock Exchange; and how the work of the Stock Exchange would or might have been or not have been affected if certain matters were brought to the attention of the Stock Exchange at the time.”

18. As Anthea Pang J rightly observed, this is an important component of the public duty of the SEHK. She further held:^{^[9]}

“… why such a course of actions was taken by an accused; why 462 or the Stock Exchange acted or responded in such a particular manner; why the acquisition was approved; why the announcement and the circular were allowed to be published by the Stock Exchange, etc. These past events do not appear to involve any ‘definitive interpretation’ of the Listing Rules but rather, what the parties thought they had to do or why they did so at the time.”

19. Anthea Pang J also considered the issue of whether in the context of explaining the operation of the Listing Division of the SEHK how the Listing Rules might be referred to. She held:^{^[10]}

“27. Next, I turn to the question of whether a representative from the Stock Exchange is entitled to give evidence on his understanding and application of the Listing Rules in the course of his work.
28. Plainly, given that one of the counts on the indictment is a conspiracy to defraud the Stock Exchange, I cannot see why its representative should not be allowed to tell us, in discharging the Stock Exchange’s functions, the general operation and the role of the Stock Exchange; which were the matters they would need to know or clarify in this acquisition; which were the particular rules the Stock Exchange relied on in processing the acquisition; and why he considered those rules to be applicable, etc.
29. In doing so, the representative would not be giving mere opinion evidence as such. He would be explaining the work of the Stock Exchange in respect of the acquisition; which were the rules that the Stock Exchange were relying on at the time or would rely on if new matters were brought to their attention; why such rules were applicable in respect of the acquisition; and why reliance was placed on such rules, etc. These are clearly matters of evidence, not matters of law, and are matters which are relevant in this case.”

20. The issue was considered by the Court of Appeal as well.^{^[11]} That Court agreed with the ruling of Anthea Pang J. The Court held that the evidence given at the first hearing by Mr Wong and Ms Ngai was admissible. The Court of Appeal made the point that the essence of the charges against the accused does not require to proof that there was a breach of the Listing Rules. The Court indicated that if that had been the case then a definitive direction as to the meaning of those Rules would have to be given by the trial Judge.

21. It seems to me that whatever the precise legal status the Listing Rules have, it is undoubtedly right that the issue of the construction and meaning of the Rules is an issue for direction by the Court if that became necessary. I can foresee circumstances in which it would be necessary to give directions on meaning of aspects of those Rules, even though the breach of them is not part of the case for the prosecution. The duty and daily operation of the SEHK is based on the Rules and the principles articulated in section 21 of the Ordinance. If Mr Wong and Ms Ngai proceeded on a legally incorrect appreciation of the Listing Rules, and that affected how they did their duty on behalf of the SEHK then it would be appropriate to give directions to the jury as to the meaning of the Listing Rules. I do not perceive that either Anthea Pang J or the Court of Appeal held that it was outside the province of the trial Judge to give such directions. In essence, the position of Anthea Pang J and the Court of Appeal was that the issue has never arose and does not arise. To the extent, I have a respectful disagreement with their position, my position is that a construction of the rules may arise and if it does then it is for the Court to direct the jury as to the correct construction of those rules.

22. Having reviewed their committal depositions and their testimony at the previous hearing, I do not perceive that they were giving expert evidence to the meaning of any of the Listing Rules. They could not, in any event, give expert evidence as to the legal meaning of the Listing Rules as they are not qualified to do so. They are, on the basis of the depositions and their former testimony, capable of giving evidence as to the operation of the Listing Division of the SEHK. Whether that evidence is truly opinion evidence is an interesting question. Plainly, both of these proposed witnesses are vastly experienced in the operation of the Listing Division. Expertise may be acquired by experience and subject to submission, it seems to me that their experience is sufficiently extensive to be characterised as expert.

23. Of course, the day-to-day operation of that Division is very much a rules-based operation. For example, underlying the requirements for announcements of price-sensitive information, what is required when a proposed transaction on the part of a listed company is of a certain size, the requirements of disclosure imposed on listed companies and their directors are all based on the Rules and it would be artificial in the extreme for Mr Wong and Ms Ngai to give their evidence about those topics as it applies or may apply to the accused without reference to the rules and to their understanding of the rules.

24. Ms Draycott, SC points out, in relation to Counts 1 and 2 of the indictment, it is alleged that the SEHK was defrauded in the sense of acting contrary to its public duty. The identification of what its duty was and how it would have acted, had it been aware of what the prosecution alleges are the true facts are critically important issues. The duty of the SEHK is defined by reference to the Listing Rules and aspects of the Ordinance. Further, in relation to Counts 3 and 4 of the indictment, the Listing Rules are important in understanding how the SEHK reacted to the events and representations germane to the particulars of those 2 counts.

25. It is correct to remember that on no account do any of the first 4 counts on the indictment allege a breach of the Listing Rules. However, in my opinion, that is not a complete answer to the problem. Each of the first 4 counts aver misrepresentation, failure to declare and concealment. If, in considering Counts 1 and 2, any of those activities diverted the SEHK from its duty, it is because the duty of the SEHK to do what it is required to do is referable to the requirements and standards of the Ordinance and the Listing Rules. The SEHK has many tools to carry out its regulatory obligations. Applying that to the present case, part of the determination of whether or not the accused are guilty of Counts 1 to 4 involves what, by reference to the Ordinance and the Rules, the SEHK would have done if the concealment is proved and if it was known by the SEHK. If those carrying out the duty of the SEHK had a wrong appreciation of the content of the Ordinance or the Rules that may affect the determination of whether or not the accused are guilty of some or all of the accusations in the indictment.

26. Thus, for example, the case for the prosecution on the failure to disclose a document known in this trial as the Commission Sharing Agreement (CSA) had many consequences including the potential treatment of the agreement between the 2^nd Accused and the listed company as a connected transaction under the Listing Rules. If the agreement between the 2^nd Accused in the listed company was treated as a connected transaction, its treatment in relation to SEHK’s determination of whether or not to approve the transaction would be significantly different and significantly more onerous than if the agreement was not to be treated in that way. Further, there would be procedural aspects of the Extraordinary General Meeting which would be different depending on whether or not the transaction was a connected one. The point of all this is that the duty of the SEHK as to the treatment of the transaction between the 2^nd Accused in the listed company might vary depending on whether or not there is an obligation to disclose the CSA. The public duty of the SEHK depends on the administration of rules depending on the circumstances. It is, in my opinion, unavoidable that Mr Wong and Ms Ngai will need to explain what they did, why they did it and why they might have acted in another way, had they been aware of other facts and given that the operation of the Listing Division is fundamentally rules-based, Mr Wong and Ms Ngai will of necessity have to refer to their understanding of the Listing Rules.

27. Even on the premise that the Ordinance and the Rules form part of the background to how officers of the Listing Division of the SEHK carried out their duties on behalf of the SEHK as submitted by the prosecution, whether or not they were right about their views of the rules and the Ordinance is pertinent and relevant to the issues to be tried. If that is the position then it will be necessary for the Court to give directions to the jury as to the correct position. Thus, even if Mr Wong and Ms Ngai firmly believed that there was an obligation to disclose the CSA but, on a correct construction of the Listing Rules that is not so, then it is the obligation of the Court to direct the jury to reflect this.

28. Let me be clear, in coming to this decision I do not say that Mr Wong and Ms Ngai were wrong or possibly wrong in their application of the Ordinance and the Rules. That issue will be a matter for submission in the future.

29. In an attempt to promote an ease of understanding on the part of the jury, what I propose to do is prior to the calling of Mr Wong and Ms Ngai, I will inform the jury that the interpretation of the Listing Rules is an issue for the Court and if the approach of Mr Wong and Ms Ngai to a particular Rule or Rules is at variance with the correct position, the jury would be obliged to follow the Court’s direction. Those directions would be given in the course of the summing up that becomes necessary. The precise content of any such direction at the time for summing up will have to await events.

30. There is an issue as to the legal effect of the CSA. The determination of the facts which might resolve that question is a matter in due course for the jury. If the CSA is of no legal effect then that would have a profound effect on the consequences of any breach of any obligation to disclose or failure to disclose such an agreement. Of necessity, it might be necessary in due course to give the jury some directions about that issue. However, I consider that it would be open to the prosecution to show the document to one or both of the witnesses and ask them on the assumption that the CSA was legally effective whether (and if so how) that would affect how the SEHK did its duty. I do not think it would be appropriate or helpful for Mr Wong and Ms Ngai to be asked theoretical or hypothetical questions. The questions should focus on either the proved facts or those facts which are capable of being proved.

(1)  Mr Wong and Ms Ngai are permitted to give evidence on their understanding of the Listing Rules in the context of how they carry out the day-to-day work of the Listing Division of the SEHK. In my opinion, such evidence is relevant.
(2)  These witnesses will be permitted to testify as to how on the basis of their understanding of the Ordinance and the Rules to express how they would, on behalf of the SEHK carry out their duty, in relation to specific on the basis of either proved facts or facts that the prosecution expects to be in a position to prove as opposed to theoretical or hypothetical events.
(3)  These witnesses will be permitted to explain by reference to the Rules why they acted in a specific way and what was the underlying basis for them acting in that way.
(4)  The witnesses are permitted to testify as to whether they considered that a particular rule has been breached but only in the context of how they, on behalf of the SEHK, did their duty and how they would have acted on the basis of the facts proved or expected to be proved by the prosecution. Accordingly, the understanding of either or both of these witnesses as to the Rules which underlie their actions is admissible for that purpose. Expressions of a more general nature as to the meaning of the Rules is not related to the execution of the duty of either of these witnesses on behalf of the SEHK is inadmissible. It follows that, for example, the expression by one or other of the witnesses that the rules are “not law” is irrelevant.
(5)  The understanding that either witness may have as to the meaning of a Rule which may underlie the basis on which they do their duty on behalf of the SEHK or would have done their duty in the light of facts proved or expected to be proved by the prosecution is subject to the directions by the Court on the meaning of that Rule and such directions are binding on the jury.

31. As presently advised it is intended that the Court will give the jury directions as to the meaning of the Ordinance and relevant Listing Rules in due course and any expression by either Mr Wong and Ms Ngai as to the meaning of the Rules is subject to those directions.

	(Andrew Bruce SC)
	Deputy High Court Judge

Ms Charlotte Draycott, SC leading Mr Li Chun Ngai Martin, on fiat and Miss Ng Oi Lam, Joycelyn SPP of the Department of Justice, for HKSAR

Mr Tim Owen QC leading Mr Tsoi Y M Benson, instructed by Boase Cohen & Collins, for the 1^st accused

Mr Ian Winter QC leading Mr Cao Yuan Shan and Ms Chiu Betty instructed by Haldanes, for the 2^nd accused

Mr David A S Khosa, instructed by Hobson & Ma, for the 3^rd accused

[1] Securities and Futures Ordinance, Cap 571, section 21(3).

[2] Securities and Futures Ordinance, Cap 571, section 21(4).

[3] [1991] 1 WLR 624, 626.

[4] [1991] 1 WLR 624, 627.

[5] [1991] 1 WLR 624, 626.

[6] [1991] 1 WLR 624, 632.

[7] As Anthea Pang JA then was.

[8] Ruling 15 February 2016, §30.

[9] Ruling 15 February 2016, §21.

[10] Ruling 15 February 2016, §27-29.

[11] CACC 172/2016, [2018] HKCA 121.

HCCC 309/2019

[2021] HKCFI 3024

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

__________________

BETWEEN
	HKSAR
and
	CHEN KEEN (alias JACK CHEN)	1st Accused
	HAO MAY (formerly known as WANG MAY YAN) (alias MAY WANG)	2nd Accused
	YEE WENJIE (also known as YU WENJIE) (alias ERIC YEE)	3rd Accused

__________________

Before: Deputy High Court Judge Bruce SC in Court

Dates of Hearing: 15, 17, 22, 24 to 26 March, 1, 15, 16, 21 to 23 April 2021

Date of Ruling: 26 March, 1 and 21 April 2021

Date of Reasons for Ruling: 12 October 2021

____________________________________________________

RULING:
APPLICATION TO ISSUE A SUMMONS FOR CERTAIN
DOCUMENTS HELD BY MS KATHERINE CHAN
OR HER FORMER SOLICITORS

____________________________________________________

INTRODUCTION

General

1. Ms Chan Wai-kay, Katherine (“Ms Chan”) testified as the first prosecution witness in this trial. In essence, her testimony was that in 2009 she became a director and then executive chairman of China Jin Hui Mining Corporation Limited the listed company at the centre of the charges levelled against the Accused. In this discussion, I propose to refer to that company by its stock code number “462”.

2. A proposal was put to Ms Chan by or through the 1^st Accused about a project which might be taken up by 462. The essence of the proposal was that 462 would buy in stages an interest in a New Zealand company which in turn owned or was to own certain dairy farms in New Zealand. The New Zealand company was owned or under the control of the 2^nd Accused. Ms Chan played an important role in the design of the proposal and the implementation of the proposal to which I have referred. To that end, her knowledge and understanding of what was involved in the proposal and its implementation is utterly critical to the determination of this case. As the proposal progressed through the various stages which are necessary for such a large deal, it is alleged by the prosecution that the 3^rd Accused became involved in that process.

3. It will be appreciated that the foregoing outline is superficial in the extreme and is expressed in as neutral as possible terms because much of the details of the proposal and its implementation is hotly contested by the Accused in this case.

4. Ms Chan’s testimony is the vital to the prosecution case. In the course of her cross-examination, a series of propositions were put to Ms Chan by Mr Winter, QC. The first proposition was that there came a time when Ms Chan was arrested by the ICAC in connection with her participation in the proposal and the implementation of the proposal. Although Ms Chan was never charged, the bases for the arrest were allegations which included bribery of Ms Chan by, amongst others, the 1^st Accused and an allegation that she was party to false and misleading statements in the announcement and the circular by 462 on 4 June 2009 and 8 September 2009 respectively. The second major proposition was that although Ms Chan was not worried about the allegation of bribery. However, she was worried about the allegation of the false and misleading statements. The third major proposition was that with the assistance of her lawyers, K & L Gates, she was able to be released on bail following her arrest and the ICAC were persuaded not to charge Ms Chan. In this connection, there was a period where she was prohibited from leaving Hong Kong. In due course, her liberty to travel was restored to her and following that she agreed to be a prosecution witness.

5. The essence of the accusation made by Mr Winter, QC is bound up in a question asked by him as follows:^{^[1]}

Rather than take the risk of being prosecuted and having to explain that you’d acted throughout on the advice of K&L Gates and ShineWing, you chose to implicate Ms Wang to buy your way out of the problem, didn’t you^{^[2]}?

The answer of Ms Chan was:^{^[3]}

I disagree. It is absolutely not true. I did not buy my way for anything.

6. The essence of the allegation was that Ms Chan decided to cooperate with the ICAC to get herself out of trouble or make sure she stayed out of trouble with respect to the allegation of being, in essence, a party to the supply of false figures in the announcements. It is possible a jury could view Ms Chan’s testimony in an adverse light if they thought that the propositions put by Mr Winter, QC had a sound basis.

7. It is important in understanding the issues which arise to note that no disclosures of any records of any “deal” between the ICAC and Ms Chan have ever been made. The prosecution asserts that no such records exist.

The claim and possible waiver of legal professional privilege

8. In the course of cross-examination of Ms Chan, Mr Winter, QC asked her about the events which occurred following her arrest. In the course of her answers, Ms Chan testified that although she remained silent when questioned by officers of the ICAC she did so because of advice from her lawyers (who were, at that time, K & L Gates) and while she acted on that advice she wished to answer the allegations put to her in the interview with the ICAC under caution. The transcript of this is important and is outlined below. The first passage of important areas is^{^[4]}:

Q. And you exercised perfectly lawfully, perfectly properly and there is no criticism about it at all, your right not to answer the question?
A. Yes. And I think -- I told my lawyer “I want to answer every question”. It was under his advice that I should not answer. I said, “I want” --
Q. Just pause a moment. You need to be careful about waiving your legal privilege and I think your Lordship ought to advise.
MS DRAYCOTT: I think --
COURT: Let me. You, of course, realise that whatever you told your lawyer is privileged unless you personally choose to reveal it.
A. I have no problem revealing.

Mr Winter, QC then asked:^{^[5]}

MR WINTER: Are you waiving your privilege over what you told your lawyer?
A. Yes, I’m waiving it.

There was a further exchange and then Mr Winter asked:^{^[6]}

MR WINTER: Madam Chan, are you sure you are waiving your privilege over your instructions to and advice from your lawyer in respect of your arrest, are you?
A. What does that mean, my Lord?
COURT: Well, waiving the privilege, that’s lawyer-speak for giving up your right to absolutely confidentiality of what passes between you and your lawyer.
A. Well, I said what I said just now.
COURT: Yes.

9. Ms Chan was then asked whether she asked the ICAC to be treated as a witness.^{^[7]} She said that she did not. She was then asked whether the ICAC approached her to be a witness. Her answer was as follows:^{^[8]}

A. They approach me and -- yes, they approach me and want me to be a witness. I'm not a Crown witness, for your information, I know you are trying to incriminate me, but I am not, I am a witness.

A great deal later in her testimony, after multiple references to the phrase “Crown witness”, it became obvious that what Ms Chan was referring to so far as that was concerned was a witness who gave testimony in exchange for some form of immunity.^{^[9]} It became obvious that she distinguished this from merely being a witness.

10. In cross-examination, Ms Chan faced accusations of various aspects in which she had lied in the course of her testimony. She was asked about the issue of giving a witness statement to the ICAC.^{^[10]} Ms Chan was questioned about the fact that she had a number of meetings she had with the ICAC. It was alleged in cross-examination that she “brokered” the deal with the ICAC.^{^[11]} This was vehemently denied.

11. The topic of the dealings by Ms Chan with the ICAC arose later in the cross-examination. In the course of that Ms Chan reiterated her position that she wished to tell the ICAC everything but that her lawyer had advised her not to do so and she followed that advice.[12] Mr Winter, QC then asked her a series of questions based on a document in his possession. The questions related to a series of attendances at the ICAC in February and April 2011, the thrust of which was to assert that her discussions with the ICAC started long before October 2011.[13] Ms Chan repeatedly put the proposition in answer to questions that she did not “trade” with the ICAC.[14] Further questions were asked about a solicitor’s account from K & L Gates to Ms Chan in relation to the dates of her dealings with the ICAC.[15] The solicitors account apparently referred to drafting statement.[16] Ms Chan told the Court that this concerned her answers to the questions that the offices of the ICAC had put to her when she was questioned under caution (and which she declined to answer such questions).

12. The matter was picked up in re-examination of Ms Chan by the prosecutor. She took Ms Chan through a series of documents and correspondence from Ms Chan’s solicitors and the ICAC. The point being made in these questions was there was nothing in the content of this material which suggested the proposal of a deal between Ms Chan and the ICAC. There were further exchanges about a meeting in the offices of Ms Chan’s solicitors. The re-examination then moved to a letter sent by Ms Chan. She was asked by the prosecutor what her motivation was in sending the letter. We then see the following exchange:^{^[17]}

Q. What was your intention in giving this information to the ICAC?
A. My intention was because during the interview my lawyer Stephen Lo doesn’t allow me to talk, even in our private meetings I said I wanted to talk, he doesn’t allow me. I said, “Why?” He said, “It’s for your protection”. I said, “I don’t need protection, I’m clean”, I said.
But -- so in the end I took it his advice, I kept silent, but I really regretted it, so I asked him to call back the ICAC. That was the intention. I want to -- because, you know, when you remain silent they still ask the question and recorded it in writing, right, so I have the questions in front of me, so I was just answering to the question they asked me.

13. The critical component of the exchange is that there is a continued reference by Ms Chan to the advice given to her by her solicitor in relation to the first interview by the ICAC where Ms Chan had declined to answer questions on the advice of that solicitor. A little later on in re-examination she confirmed that there was no suggestion from her solicitor that she become a witness at this stage.^{^[18]}

14. Ms Chan told the Court that she refused the offer by the ICAC of further bail. For all practical purposes, this forced the ICAC to decide whether to charge Ms Chan or let her go without charge. The ICAC chose the latter course. There was also the series of communications with the ICAC over whether Ms Chan could get her passport back because she wished to travel in the course of her business. She then testified that it was the ICAC who asked her to become a witness and she acceded to that proposal.[19]

ISSUES FOR CONSIDERATION

Application for summons for documents

15. Counsel for the 2^nd Accused has applied for a witness summons directed at the partners of K & L Gates for:

Documents to be produced: all communications (i) between Ms Chan and lawyers at K&L Gates and between K&L Gates and the ICAC during the period from 16 December 2010 (when Ms Chan was arrested by ICAC) and the date when she formally became a prosecution witness; and (ii) all records of meetings between Ms Chan and lawyers at K & L Gates, and/or all material recording the instructions she gave and the advice that she was given during that period, in relation to or connected with Ms Chan’s arrest by the ICAC on 16 December 2010 and/or her becoming a prosecution witness.

16. Counsel for the 2^nd Accused made submissions in support of that application. Given Ms Katherine Chan’s interest in the matter, the Court directed that she be informed of the hearing on that date and that should she wish to do so, she could attend herself or through counsel representing her. In the result, she attended herself. At that hearing, the Court asked Ms Chan what her position was. She said that she did not wish to waive her privilege. She told the Court that at the hearing when the matter was first raised she was confused about what rights she had and what rights she was being asked to waive. Mr Winter QC read out the relevant passages from the transcript and the Court asked her what her position was. She said:^{^[20]}

“… I was only talking about my lawyer told me not to say anything, I wanted to answer every question that the ICAC has…”

17. A little later on in the hearing, she asserted that she was only waiving her privilege in relation to this topic.^{^[21]} She then said that she did not understand what “legal professional privilege” was. Ms Chan asserted that she should have been given legal advice. The Court asked her to explain what she meant by getting legal advice, Ms Chan replied:^{^[22]}

“…I should have been given the opportunity to seek independent legal advice rather than have Mr Winter force on me and say I have waived my legal professional privilege. Even after your Lordship, you explained to me, I was thinking, and that’s why I answer, ‘Well, I said what I said’, meaning I already said those two sentence. I thought just by saying those two sentence:
“I told my lawyer [told me not to say anything]
‘I want to answer every question’.”
I was referring to those two sentence[s]. But they made the conclusion I gave this waiver already. I was not. I didn’t understand what it is. If I had understand, I would not have asked your Lordship, ‘What does that mean?’
That’s my explanation.”

Principles

18. Legal professional privilege attaches to confidential communications between lawyer and client made for the purpose of giving or receiving legal advice or for use in existing or anticipated litigation.^{^[23]} The law concerning legal professional privilege is no mere rule of evidence. In R v Derby Magistrates’ Court, Ex parte B [1996] AC 487 it was observed:^{^[24]}

“Legal professional privilege is thus much more than an ordinary rule of evidence, limited in its application to the facts of a particular case. It is a fundamental condition on which the administration of justice as a whole rests.”

Article 35 of the Basic Law enshrines the right to confidential legal advice. In Solicitor v Law Society of Hong Kong (2006) 9 HKCFAR 175, Bokhary PJ made the point that this underlines the proposition that the Courts must always be vigilant to accord proper protection of the right. ^{^[25]} The privilege is absolute and, if it is established, it yields to no competing interests such as, for example, the interests of justice.^{^[26]}

19. In the present case, the competing interest asserted is the interest in knowing whether or not Ms Chan came to an arrangement with the ICAC whereby she received a benefit for giving witness statements and, giving witness statements in the form that she did. On any view, the authorities are plain as to the interests at stake.^{^[27]} Any benefit accorded to Ms Chan by the ICAC would be subject to disclosure.^{^[28]} While disclosure is a constitutionally-protected right accorded to an accused person as part of fair trial rights, as I understand the authorities, it must yield to legal professional privilege.

20. Legal professional privilege may be waived by the person in whom the privilege is vested. Because of the fundamental and constitutionally-protected nature of the privilege, in determining whether or not there has been waiver if there is any doubt about whether there was any waiver of the privilege, the question should be resolved in favour of upholding the privilege: Goldlion Properties Ltd & Ors v Regent National Enterprises Ltd [2006] 1 HKLRD 793, §31. In Citic Pacific Ltd v SJ, Hartmann JA (as Hartmann NPJ then was) observed in this regard:^{^[29]}

“That being the case, it seems to me to be inherently contradictory to say that privilege, although a fundamental human right unassailable to competing issues of public interest, may nevertheless be lost in criminal matters without any intention on the part of the holder, indeed on no more than a whim of fate; that is, by accident or inadvertence, or even (at the outer extreme) by the surreptitious conduct of a third party. I do not accept that the Basic Law affords such frail protection. I am satisfied that, in both civil and criminal matters, privilege is not lost unless there is evidence that it has been intentionally waived by the holder of that privilege.”

21. Waiver may be expressly done or may be implied. It may also be a partial waiver.^{^[30]} In Citic Pacific Ltd v SJ, Hartmann JA held that evidence of the intention to waive privilege may be inferred from all the circumstances. He did say that waiver would not be lightly inferred.^{^[31]} He also held that whether there had been a full or partial waiver was to be determined by reference to all the circumstances of the alleged waiver, in particular what was expressly or impliedly communicated between the person sending and the person receiving, the documents in question, and what they must or ought reasonably to have understood.^{^[32]}

22. As far as I can see, none of the authorities explicitly suggest a standard of proof for facts which might establish waiver. Certainly, the burden of proof must be on the party which asserts the waiver. As to standard of proof, I consider that requiring proof on the balance of probabilities is consistent with the principles outlined in the authorities. The application of such a standard was considered in criminal proceedings albeit in a different context in HKSAR v Lee Ming Tee & Securities and Futures Commission (Third Party) (2003) 6 HKCFAR 336. In that case, Mason NPJ observed:^{^[33]}

“It is not in dispute that the civil standard was applicable and that the civil standard of proof on the balance of probabilities calls for a degree of satisfaction which varies according to the gravity of the fact to be established. The principle is that in a civil case, even a civil case involving allegations of the commission of a criminal offence, the tribunal of fact must be reasonably satisfied of the fact sought to be established, having regard to the gravity of what is sought to be established, though not with the degree of certainty which is indispensable in criminal proceedings…”

That approach is apt given that the effect of a determination that there has been a waiver of legal professional privilege or an aspect of it is to diminish a fundamental and constitutionally-protected right. The “gravity of what is sought to be established” relates to the proof of facts which may establish the waiver of legal professional privilege.

Evaluation

23. The principles which have been articulated as to the nature of legal professional privilege and the circumstances in which it can be waived. The standard of proof for waiver is stringent. There can be no doubt that but for an express or implied waiver which may have occurred, that any communications between Ms Chan and her legal advisers for the purpose of seeking and giving legal advice on the matters involving and consequent on her arrest on serious criminal allegations would be subject to the privilege.

24. Counsel for the 2^nd Accused argues that there has been complete waiver. In this regard, Mr Winter, QC contends that the affirmative answer by Ms Chan to the question “Madam Chan, are you sure you are waiving your privilege over your instructions to and advice from your lawyer in respect of your arrest, are you?”[34] makes the waiver as to legal advice sought and legal advice given in relation to criminal matters consequent on the arrest of Ms Chan until the decision to give a statement (or statements) to the ICAC is a complete waiver. It is to be noted that her response to this question following an intervention by the Court was “Well, I said what I said just now.” [35] That answer itself calls for evaluation.

25. When Ms Chan appeared as an interested party in the hearing to determine whether to grant the summons to seek privileged materials from her former solicitors, her position was:

(1) legal professional privilege was only waived in relation to the advise in connection with the interview under caution by the ICAC with Ms Chan;
(2) she did not waive her legal professional privilege at all because in the urgency of the situation she did not fully appreciate what was going on; and
(3) (connected to (2)) she should have been accorded the opportunity to obtain legal advice as to whether or not to waive her privilege.

26. In my opinion, the stance adopted by Ms Chan in the hearing to determine whether to issue the summons is inherently contradictory. On the one hand she asserts only a limited waiver and on the other hand she asserts she did not fully appreciate what was going on and, accordingly, there was no effective waiver at all. The evaluation of these circumstances starts with the advantage that the Court has having seen Ms Chan testify for many, many days. On any view, she is an intelligent, articulate woman well-versed in business affairs and, in particular, the business affairs of listed companies. While, as far as I can tell, she has only been the executive director of one listed company - 462, she has long been licensed by the Securities and Futures Commission in connection with listed companies and their obligations. It follows from that and it was apparent in relation to her dealings concerning 462 that she was well acquainted with the importance of legal advice. In my judgement, given her strong and articulate responses to questioning in the course of her testimony and, particularly, under a searching cross-examination on the part of Mr Winter, QC, the proposition that she did not appreciate what she was doing or saying is not one that I can, for present purposes, accept. All of that said, it is important to remember that the jury may, in due course, have to evaluate the testimony of Ms Chan in relation to a wide variety of matters highly critical to the issues which arise on the trial of the indictment. Nothing in my limited evaluation for the purposes of these proceedings should in any way detract from the primacy of their position. It is conceivable that I may have to undertake some evaluation of the testimony of Ms Chan in the event that there is a submission of no case to answer. Again, the danger of anyone inferring my attitude to Ms Chan as a witness of truth from my limited determination here would be, to put it bluntly, a fool’s errand.

27. Applying what I consider to be the appropriate standard of proof, the practical choice, so it seems to me, is between a full waiver and a partial waiver. In this regard, the strictures articulated by Hartmann JA in Citic Pacific Ltd v SJ (above) must not be ignored. Of all cases, this is the case where context is everything and the passage I have cited from the exchanges between Mr Winter, QC and Ms Chan to paragraphs above cannot be taken from their context. It immediately followed discussions about the conflict between Ms Chan and her legal advisers over the issue of what she should say in the interview under caution conducted by the ICAC shortly after her arrest. It seems to me that the inescapable conclusion is that when she said what she said to Mr Winter, QC, she was referring to that context and conceding nothing further. When Mr Winter, QC put the question which invited a more general waiver, her answer was, as I have noted “Well, I said what I said just now.” What she had said “just now” could be said to be the limited waiver. After careful reflection, I cannot interpret it as Ms Chan acceding to the broader waiver that Mr Winter, QC by his question sought.

28. I recognise that further questions were asked in cross-examination and in re-examination and that it is conceivable that that might weaken the conclusion I have just expressed. However, the strictures articulated by Hartmann JA underline the care and restraint that I must adopt in evaluating the circumstances to determine whether there has been an express or implied waiver of legal professional privilege. The same restraint must be applied in determining the extent of the implied waiver. There was such a waiver. It was a limited one.

CONCLUSION

29. Accordingly, I would be prepared to accede to a documentary summons on the basis that Ms Chan expressly gave a limited waiver of legal professional privilege in connection with the legal advice sought by her and tendered to her in relation to the interview under caution between her and the ICAC.

30. In my opinion, the terms of the summons proposed would have to be amended both as to the timeframe and as to scope. As presently drafted, the summons is in any event to wide and must be focused only to material evidencing communications between Ms Chan and her legal advisers in which she either seeks legal advice or legal advices is given to her.

	(Andrew Bruce SC)
	Deputy High Court Judge

Ms Charlotte Draycott, SC leading Mr Li Chun Ngai Martin, on fiat and Miss Ng Oi Lam, Joycelyn SPP of the Department of Justice, for HKSAR

Mr Tim Owen QC leading Mr Tsoi Y M Benson, instructed by Boase Cohen & Collins, for the 1^st accused

Mr Ian Winter QC leading Mr Cao Yuan Shan and Ms Chiu Betty instructed by Haldanes, for the 2^nd accused

Mr David A S Khosa, instructed by Hobson & Ma, for the 3^rd accused

[1] Transcript, Day 10, page 87.

[2] K & L Gates were the solicitors then acting for 462 and ShineWing are a firm of accountants then acting for 462.

[3] Ibid.

[4] Transcript, Day 10, pages 80-81.

[5] Transcript, Day 10, page 81.

[6] Transcript, Day 10, page 81-82.

[7] Transcript, Day 10, page 82.

[8] Ibid.

[9] Transcript, Day 14, page 83.

[10] Transcript, Day 10, page 86.

[11] Transcript, Day 10, page 87.

[12] Transcript, Day 11, page 49.

[13] Transcript, Day 11, pages 50-51.

[14] Transcript, Day 11, page 52.

[15] Transcript, Day 12, pages 84-85.

[16] Transcript, Day 12, page 86.

[17] Transcript, Day 14, page 73.

[18] Transcript, Day 14, page 74.

[19] Transcript, Day 14, pages 82-83.

[20] Transcript, Day 27, page 158.

[21] Ibid.

[22] Transcript, Day 27, pages 159-160.

[23] Three Rivers District Council and Ors v Governor and Company of the Bank of England (No 6) [2005] 1 AC 610; SJ v Shum Chiu [2008] 1 HKLRD 155, [2006] HKCU 2127; HKSAR v Wong Chi Wai (2013) 16 HKCFAR 539.

[24] [1996] AC 487, 507.

[25] (2006) 9 HKCFAR 175, §15.

[26] R v Derby Magistrates’ Court, Ex parte B [1996] AC 487; HKSAR v Wong Chi Wai (2013) 16 HKCFAR 539, §37.

[27] HKSAR v Lee Ming Tee & Securities and Futures Commission (Third Party) (2003) 6 HKCFAR 336, [2004] 1 HKLRD 513; HKSAR v Chan Kau Tai [2006] l HKLRD 400.

[28] R v Tsui Lai Ying and Others [1987] HKLR 857; Grey v R (2001) 47 ALJR 1708, [2001] HCA 65.

[29] [2012] 2 HKLRD 701, §51.

[30] Citic Pacific Ltd v SJ [2012] 2 HKLRD 701, §32-38. In this regard, the Court of Appeal followed British Coal Corporation v Dennis Rye Ltd & Anor (No 2) [1988] 1 WLR 1113, B & Ors v Auckland District Law Society & Anor [2003] 2 AC 736 and Berezovsky v Hine & Ors [2011] EWCA Civ 1089.

[31] [2012] 2 HKLRD 701, §52.

[32] [2012] 2 HKLRD 701, §56, citing Berezovsky v Hine & Ors [2011] EWCA Civ 1089.

[33] (2003) 6 HKCFAR 336, §70.

[34] Transcript, Day 14, page 156.

[35] Ibid.

HCCC 309/2019

[2021] HKCFI 2308

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

________________________

BETWEEN

	HKSAR
	and
	CHEN KEEN (alias JACK CHEN)	1^st Accused
	HAO MAY (formerly known as WANG MAY YAN) (alias MAY WANG)	2^nd Accused
	YEE WENJIE (also known as YU WENJIE) (alias ERIC YEE)	3^rd Accused

________________________

Before: Deputy High Court Judge Bruce SC in Court

Date of Hearing: 21 June 2021

Date of Ruling: 6 August 2021

________________________

RULING

APPLICATION FOR COSTS

________________________

INTRODUCTION

1. On 15 June 2021, the Court directed that the jury in this trial be discharged. The application for discharge made by each of the accused in these proceedings followed events on Day 57 of the trial during which Mr Kerry Joel Knight testified for the prosecution. The ruling of the Court which was published on 18 June 2021 outlines the nature of the testimony given by Mr Knight and its context.[1] Those paragraphs are incorporated by reference into this ruling.

2. The indictment in HCCC 309/2019 is unfulfilled. The Court has been informed that the prosecution wishes to empanel a fresh jury to try the accused.

3. The accused apply for the costs of this trial. As I understand the application, the application for costs is only for the costs of the retrial. All other issues of costs in relation to proceedings which preceded the order by the Court of Final Appeal for a retrial have been determined by that Court.[2]

PRINCIPLES GOVERNING THE AWARD OF COSTS

Jurisdiction

4. There is no inherent power to award costs. The power is entirely statutory. In S-J v Tang Bun [1999] 3 HKC 647, Woo J (as Woo VP then was) held:[3]

“It is well established law, and both parties before me accept, that a court has no inherent jurisdiction to award costs in criminal proceedings, and the power to award costs is derived from legislation: see A-G v Ip Wai Kwong [1982] HKLR 93, R v Mak Yuet Hang [1990] 1 HKLR 121, A-G v A Deputy District Court Judge [1991] 2 HKLR 507, A-G v Lam Sau Ki [1993] 2 HKC 330 and S-J v Chan Cheung Chor (HCAL 102/98, unreported).”

5. The position was confirmed by the Court of Appeal in HKSAR v Hon Ming Kong [2014] 3 HKLRD 470. In that case Stock VP giving the judgment the Court of Appeal (Stock and Yeung V-PP and Line J) held:[4] “The starting point is that there is no power inherent in a court to award costs in criminal cases; the power, if it is to be conferred, must be conferred by statute: Attorney-General v Ip Wai Kwong [1982] HKLR 93, 96”. This was confirmed in HKSAR v Chan Hing Kai (No. 2) [2020] 2 HKLRD 367, §3.

6. In Secretary for Justice v N [2013] 1 HKLRD 130, Macrae J[5] considered the construction of section 17 of the Costs in Criminal Cases Ordinance, Cap 492 (“the Ordinance”) and whether a wasted costs order could be made in the context of proceedings for the return of a travel document under section 17B of the Prevention of Bribery Ordinance, Cap 201. It was held that section 17 of the Ordinance did not cover the type of proceeding under section 17B. In the course of his ruling, Macrae J observed:[6]

“25. It must be remembered that there is no general right to costs in criminal cases. The CCCO delineates in specific terms the particular circumstances in which a costs order might be made in criminal proceedings. If a party to proceedings cannot bring himself within a particular section of that Ordinance, he cannot obtain an order for costs.”

Macrae J then observed:[7]

“26. I am therefore called to construe a statute dealing with specific types of criminal proceeding in which costs orders may be made: if the specific type of criminal proceeding does not come within the Ordinance, an order for costs cannot be made.”

He later added that the Ordinance “is a criminal statute which falls to be strictly construed”[8]. I understand the notion of the Ordinance being strictly construed as meaning what was articulated in paragraph 26 of the judgment. As Mr Owen, QC submitted, there is nothing inconsistent between a strict construction in the purposive construction. The issue in any application for costs is whether the facts and circumstances upon which such an application is based fall within any of the provisions of the Ordinance. If they do not then there is no jurisdiction to award costs on that application.

7. The Costs in Criminal Cases Ordinance, Cap 492 was enacted in 1996.[9] The Ordinance drew together many provisions governing the award of costs into one piece of legislation. Some of the provisions in the Ordinance draw their inspiration from the legislation to remain for England and Wales: the Prosecution of Offences Act 1985. As will shortly appear, a construction of this Act is germane to the issues which arise in the present case.

Principles upon which costs are awarded

8. The fundamental principle is that costs are meant to be compensatory. Section 15(a) of the Ordinance provides:

“the costs that may be awarded by virtue of an order shall not be punitive but shall be such sums as appear to a court or a judge reasonably sufficient to compensate any party to the proceedings for any expenses properly incurred by him in the course of those proceedings, including any proceedings preliminary or incidental thereto.”

The compensatory principle thus established does not, by itself, establish liability for costs. The principle operates when liability is established by a provision under the Ordinance. The compensatory principle is, in any event, a declaratory statement of established principle.

THE BASIS OF THE APPLICATION

9. The application made by the accused is based in the alternative onto provisions within the Ordinance. The first is section 4 and the second is section 17.

Issues in relation to section 4

10. Section 4 of the Ordinance provides as follows:

“Where a defendant is not tried for an offence for which he has been indicted or committed for trial, the District Court or the Court of First Instance may order that costs be awarded to the defendant.”

Defence submissions

11. Mr Owen, QC, in his oral presentation, submitted the issue is one of construction. He contends that while it is recognised that the only bases for costs being imposed against the prosecution (or against the defence for that matter) have to be found in the Ordinance, it is necessary to adopt a purposive approach to the Ordinance. The expression of what is a purposive approach he derives from Pollen Estate Trustee Co Ltd v Revenue and Customs Commissioners [2013] 1 WLR 3785, §24 is “the modern approach to statutory construction is to have regard to the purpose of the particular provision and interpret its language, so far as possible, in a way which best gives effect to that purpose”.

12. In deriving the purpose of the Ordinance, it is contended on behalf of the Accused that it should be viewed as a whole. It is contended that that viewed against the general principles in section 15(a) of the Ordinance, unless there exists a positive reason for refusing to make it order for costs, costs should ordinarily be awarded. In this regard, Mr Owen, QC relies on Chan Hing Kai (No 2) (above), §6-14 which declares that the exercise of the power to award costs to a successful appellant against conviction was in the unfettered discretion of the Court and fell to be exercised in the light of the circumstances of each case. As a general rule, a successful defendant on appeal should be awarded his costs unless there were positive reasons for not doing so.

13. Counsel contends that in the present case the accused did not bring these costs upon themselves; and are not responsible for the consequences which ultimately resulted in the discharge of the jury.

14. It is contended that the reality of the situation is that unless the accused are awarded the costs for the proceedings to date which are a retrial ordered by the Court of Final Appeal, they will be liable for their own costs and it is further contended that such a person should only be liable for the costs of a criminal trial if:

(1)  The accused is convicted of an offence (see section 12 of the Ordinance);
(2)  Where the conduct of the accused has brought the costs on himself; or
(3)  Justice otherwise required him to bear those costs.[10]

It is contended that the underlying basis for this is that an accused person in a criminal trial does not choose to participate in the trial process. As a consequence, he should not be made to bear the costs of a process forced upon him by the state. It is contended that if you look at the circumstances in which costs might be awarded to an accused person the purpose of the Ordinance in this regard becomes clear. Counsel for the accused contend: [11]

“This is why the Ordinance lists the variety of outcomes possible in such criminal proceedings (not tried, section 4; acquitted, section 5; partially acquitted, section 6; discharged after committal, section 7; or acquitted after appeal, section 7 - 9B). The plain and obvious purpose of the Ordinance was to ensure that a defendant forced to endure criminal proceedings brought by the state, but which proceedings did not result in conviction, would be compensated for the reasonable costs incurred in defending them.
The Ordinance went further however, recognising that even in proceedings where a defendant had to bear costs (either his own and/or the prosecution’s under section 12), there might be costs that he nevertheless should not bear. That is why section 17 gives the court jurisdiction to order costs where they have been unnecessarily or improperly incurred; and why section 18 permits wasted costs orders.”

15. Counsel for the accused contend that in understanding the purpose of section 4 it is necessary to look at the possible outcomes if an accused is committed for trial. Those outcomes are:

(1)  The case being dismissed pursuant to section 16 of the Criminal Procedure Ordinance;
(2)  His acquittal;
(3)  His conviction; or
(4)  The accused is discharged for a variety of reasons (such as jury disagreement)  or because the proceedings were stayed or adjourned without a future date being set and not to be proceeded with (this is encompassed within the language of an order that the indictment or charge sheet lie on the file not to be proceeded with without leave).

16. Section 7 of the Ordinance is necessary because of the way in which section 16 of the Criminal Procedure Ordinance is drafted. As it may be seen in the section it covers a multitude of events including the non-filing of an indictment under section 15 of the Criminal Procedure Ordinance as well as an application for discharge under section 16(1)(b) on the basis, to paraphrase the provision, that there is no prima facie case on the papers. The real reason section 7 of the Ordinance is necessary is because an application under section 16(1)(b) of the Criminal Procedure Ordinance can only be made “after the filing of the indictment and prior to his arraignment thereon” and thus although the outcome of a successful application under section 16(1)(b) is a deemed acquittal, it does not fall within the scope of section 5 of the Ordinance because that deals with an acquittal after trial. The underlying (and perfectly reasonable) assumption of section 7 is that a trial does not begin until arraignment. As noted earlier in this paragraph, once an indictment is filed and arraignment occurs, there can be no discharge under section 16(1)(b).

17. Those representing the accused contend that it is important to understand the word “tried” in its legal context. It is contended that the use of the past participle of the verb “to try” necessarily envisages the conclusion of the trial process such that the accused can properly be regarded as having been “tried”. It is contended that an accused person who is put on trial but the process is not concluded was not tried. It is contended that for a person to be characterised as “tried”, there would have to be a verdict. In short, it is contended that section 4 of the Ordinance is not limited to situations where an accused has been engaged in the trial process but that process has not reached the end of the trial so as to ascertain his guilt or innocence. That construction of the Ordinance dovetails, so those representing the accused contend, with costs following an acquittal after trial (section 5) or costs payable to the prosecution when convicted (section 12). It is noted by those representing the accused that section 12 makes no mention of the requirement for a trial because an accused person may plead guilty without having a trial. It is contended that an award of costs under section 12 could be made against a person who pleaded guilty and have been convicted as a result thereof. Accordingly, it is contended that this leaves section 4 to cater for all of the circumstances in which a trial does not conclude with a verdict. It is contended that this includes where juries are discharged or where proceedings are stayed or where proceedings are ordered to lie on the file.

18. Accordingly, it is contended by those representing the accused that the correct meaning of the words “where a defendant is not tried for an offence” thus means “where a trial is not concluded by the entering of a verdict”. It is contended that this meets the justice of the case.

19. Two authorities were cited in connection with the construction of section 4 of the Ordinance. The first is HKSAR v Lee Ming Tee & Anor [2003] 1 HKC 174. This was a decision following an application for costs following a 76-day trial which was aborted just before the jury retired to consider its verdict. The termination of the proceedings was not the fault of the defendants or the prosecution. A new trial was ordered. The cause of the late discharge was the non-disclosure by an expert witness called by the prosecution of certain pertinent matters. The witness had not disclosed these matters to the prosecution. Seagroatt J held that there was no statutory provision permitting costs including section 4 of the Ordinance.[12] Nevertheless, Seagroatt J recognise the injustice of taking an expensive trial to almost a jury verdict and the accused having to face a further trial. In essence, the reasoning of Seagroatt J appears to be that there is an unfettered jurisdiction to award costs in England and Wales and by reason of section 9(3) of the Criminal Procedure Ordinance, Cap 221 which enjoins a Hong Kong court to follow the practice and procedure of the courts of England and Wales that he could make such an order.

20. Those representing the accused argue that there was no real consideration of section 4 of the Ordinance in Lee Ming Tee & Anor (above). They contend that the reason for this is that counsel for the accused in that case conceded that section 4 of the Ordinance did not apply. There was no real examination of the ambit of section 4 by Seagroatt J.

21. Those representing the accused argue that the better view is that of Henry J in R v Central Criminal Court ex parte Lord Spens [1993] COD 194, also known as R v Spens.

Prosecution submissions

22. The prosecution submissions agree that the Costs in Criminal Cases Ordinance only gives a Court jurisdiction to award costs where a provision in the Ordinance, properly construed, permits such a course. In other words, it is contended by the prosecution (in common with the defence) that there is no inherent power to award costs.

23. The contention of the prosecution is that the jurisdiction granted to a Court is to make an award of costs is when proceedings have been brought to finality “whatever that means”.[13] In this regard, the prosecution supports the analysis of Seagroatt J in Lee Ming Tee & Anor (above) that section 4 of the Ordinance has no application to the present position.

24. It was argued that as section 17 of the Ordinance is the only section which deals with liability for costs arising at any time during the course for trial, it was argued that this narrows the field for section 4. The essence of the prosecution submissions is as follows: [14]

“These defendants are in the course of being tried. There is no question of them not being tried. To say someone is not tried does not mean that their trial is not yet concluded but that a decision has been taken, or a course of conduct adopted, that results in them not being tried at all. To suggest that the use of the past tense in s.4 indicates that it extends to those, who whilst being tried, are not yet “tried” in the sense of the trial being concluded is unduly stretching the language of the statute which could easily have used the language of s.17.

25. The prosecution submitted that the concluding event in section 4 of the Ordinance is when the jury is sworn. After that, it was submitted by the prosecutions, section 4 has no more work to do.

ANALYSIS

26. The Ordinance demands a purposive construction. The authority cited by those representing the accused[15] aptly puts the modern approach to the purposive construction. To this should be added section 19 of the Interpretation and General Clauses Ordinance, Cap 1 as follows:

“An Ordinance shall be deemed to be remedial and shall receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Ordinance according to its true intent, meaning and spirit.”

Section 19 is the statutory assertion of the requirement to give legislation a purposive construction. My understanding of the rules of construction of the meaning of a word or phrase is summarised by the Court of Appeal of South Australia in Conant v R [2021] SASCA 56. Their Honours (Lovell, Doyle and Livesey JJA)observed:[16]

“In assigning legal meaning to the words of a provision, the court starts with a consideration of the ordinary and grammatical meaning of the words taking into account both context and legislative purpose. Consideration of the context for the provision is undertaken at the first stage of the process of construction. Consideration of context in its widest sense includes surrounding statutory provisions, what may be drawn from other aspects of the statute and the statute as a whole. The purpose of the statute informs the interpretive task throughout. The text of the statute is important, for it contains the words being construed, and a very general purpose may not detract from the meanings of the words. The consequences of giving a provision its literal, grammatical meaning, may lead the court to adopt a construction that departs from the ordinary meaning of the words.”

27. The issue is the application of those principles to the interpretation of the Costs in Criminal Cases Ordinance. There are a number of levels to this. The first is the compensatory principle asserted in section 15(a) of the Ordinance which is cited above. However, how that principle operates depends on a variety of circumstances. It operates differently according to who may be entitled under various aspects of the statute to costs. Speaking generally so far as prosecution costs are concerned the discretion to award costs to the prosecution is conditioned upon the basis that prosecutions are instituted and maintained for public purposes and generally the accused should not be required to compensate the prosecution for a successful prosecution. In contrast, as those representing the accused submit, in criminal proceedings, an accused person does not come voluntarily to court and if that person is successful in resisting those criminal proceedings costs or to follow the event unless there are positive reasons to exclude them.

28. In considering this first level of analysis there are also provisions which are there to compensate one side or the other where there has been an unnecessary or improper act on the part of one side (see section 17 of the Ordinance) or the conduct of the legal or other representatives concerned of a party has resulted in wasted costs (see section 18 of the Ordinance). Although these provisions have a compensatory basis, it is fair to say that they are there to deter the kind of conduct which might justify an order under one section of the other.

29. The next level of analysis is to recognise that some of the provisions of the Ordinance are not new. In part (but only in part) the Ordinance consolidates a number of provisions for costs in other legislation. A further but closely related level of analysis is that generally speaking it is a good idea to have at least most of the cost provisions and, arguably, all of the important costs provisions in one piece of legislation so that in addition to any benefit in terms of ease of finding such provisions, they receive at least an approximately equivalent interpretation. There are still in the statutes of Hong Kong bits and pieces of costs legislation not in the Costs in Criminal Cases Ordinance.[17] It is in this context that it is appropriate to note that some of the language of the Ordinance replicates the Prosecution of Offences Act 1985. The replication in Hong Kong legislation of language from legislation elsewhere in the world, particularly the Commonwealth is an indication of a desirability of consistency of interpretation and a desire to consider authorities which have construed the relevant language in other jurisdictions (suitably adapted for local conditions). Indeed, section 16(2) of the Prosecution of Offences Act 1985 is the obvious progenitor of section 4 of the Ordinance. As will shortly appear, there are some English authorities which interpret section 16(2) which are critical to the interpretation of section 4.

30. It is common ground that unless a party can come within a particular provision of the Ordinance then the other party to the proceedings cannot be liable for costs. However, that is not to say that each provision should be interpreted in isolation. This is certainly so under the Part II - Defence Costs. Section 3 deals with the various circumstances in which it is appropriate to consider costs to the defence in summary proceedings. Summary proceedings are not just a mirror of proceedings on indictment and, both substantively and procedurally have very different features to proceedings on indictment. The obvious example of that is a review of a decision by a magistrate under section 104 of the Magistrates Ordinance, Cap 227. As has been earlier noted, section 3 of the Ordinance is not the exclusive repository of power to award costs in summary proceedings. The Magistrates Ordinance has numerous provisions and there is at least a respectable argument that many of them could reasonably have been included in section 3 of the Ordinance. The point of this is that section 3 could, on no account, be considered a code for costs or a provision which covers every eventuality in summary proceedings. However, it is important in understanding the relationship between section 3 and the balance of the section in Part II in relation to defence costs that section 3 is by no means a full statement of the circumstances in which costs might be ordered in summary proceedings.

Issues in relation to section 4

31. As to proceedings on indictment, leaving aside section 4 of the Ordinance, the Ordinance provides costs in the following circumstances:

(1)  acquittal after trial: section 5;
(2)  partial acquittal: section 6;[18]
(3)  discharge under section 16 of the Criminal Procedure Ordinance;[19]
(4)  defence costs on appeal to a magistrate: section 8;[20] and
(5)  defence costs on appeal before the Court of Appeal in the circumstances specifically enumerated: section 9;
(6)  defence costs on appeal by way of case stated before the Court of Appeal: section 9A;
(7)  defence costs on unsuccessful application by prosecutor for a certificate for the purposes of an appeal to the Court of Final Appeal before the Court of Appeal or Court of First Instance: section 9B.

32. It is correct to say that a number of the provisions under Part II of the Ordinance have been inserted after the initial enactment of the Ordinance. This is significant because the prosecution argued that there may well be a gap in relation to costs in the circumstances in which these accused find themselves. If so, the prosecution argues that this may well be an area for legislative intervention. It is contended that one of the consequences of this is that in interpreting the Ordinance, care should be taken not to, in effect, shoehorn circumstances into, say, section 4 where it was not intended that they come within that section. Care should be taken in accepting that argument uncritically because some of the provisions which have been, in effect, tacked on to the Ordinance were issues which existed before the enactment of the Ordinance. The most glaring (but not the only) example of that is the costs provisions in relation to a deemed acquittal under section 16 of the Criminal Procedure Ordinance. Section 16 was inserted into the Criminal Procedure Ordinance in 1983 which predates the enactment of the Costs in Criminal Cases Ordinance. However, that begs the question of what is the correct construction of section 4. Plainly, if the circumstances facing the accused in this case is not an event covered by section 4 then clearly the only remedy would be legislative intervention which would be cold comfort for the accused.

33. The prosecution argued that as section 17 of the Ordinance deals with costs arising at any time in the course of the trial, by implication, narrows the construction of section 4. In a sense, that is right because the plain implication of section 17 is that the conduct which would be the subject of an order under that section would not be a topic which would give rise to costs under section 4. However, section 17 deals only with a limited set of circumstances: unnecessary or improper acts. That might carry with it the implication that although those are excluded from consideration under section 4, it means that section 4 has a good deal more work to do because there are circumstances other than unnecessary or improper acts which might call for the imposition of costs.

34. The decision of Seagroatt J in HKSAR v Lee Ming Tee & Anor (above) appears to adopt a construction of section 4 which would not permit costs to be awarded in the present circumstances. As already noted, the issue was whether costs could or should be awarded following a stay of proceedings after a trial lasting many months which, by definition, did not reach a verdict. A fair reading of the judgment is that Seagroatt J was plainly influenced by the concession of leading counsel that section 4 could not avail the accused in that case. The basis on which costs were ordered appears to have been upon the basis, following section 9 of the Criminal Procedure Ordinance, the Judge followed what he perceived to be English procedure and found the basis for such an order in that procedure. It appears that Seagroatt J did not have the advantage of the arguments that have been heard in the present proceedings. While this Court is not strictly bound by the decision in Lee Ming Tee & Anor the principles of judicial calamity and join this court to accord great respect to that judgement.

35. Section 16(2) of the Prosecution of Offences Act 1985 which is the equivalent in England and Wales of section 4 of the Ordinance was considered case of R v Spens (above). There is a report of that case in the Independent which neither the parties nor the court of the noble to track down. However, an account of the decision of Henry J who was the trial judge in that case is sufficiently revealed in R v Spens (above). This is a report of the Queen’s Bench Division (Glidewell LJ & Hidden J) seeking to judicially review to decisions of Henry J but it reveals the essential facts and the essential approach of Henry J.[21] Lord Spens and another person were charged with, essentially, commercial crime offences. The trial reached Day 66. At that juncture, it was revealed that the other accused had suffered what was characterised as a serious breakdown of his mental health. A nolle prosequi was entered by the prosecution against that person. The trial judge discharged the jury in respect of both accused. Of course, as in the present case, Lord Spens was liable to be tried again. Henry J held that it was inappropriate. He considered the option of directing an acquittal. However, he considered that inappropriate and inconsistent with the nature of the consequences of the entry of a nolle prosequi on the part of the other accused. In the result, he ordered that the prosecution be stayed as against Lord Spens, not be preceded with again without leave. Henry J was then faced with an issue in relation to costs concerning Lord Spens. He considered that the appropriate provision was “Where a person is not tried for an offence which has been indicted or committed for trial [……] the court may make a defendant’s costs order in his favour.” That, of course, in substance replicates section 4 of the Ordinance. Henry J considered that he had power to make an order under that provision. He then held that the accused had brought suspicion upon himself and, in the exercise of his discretion declined to award costs. The key to the decision appears to be that Henry J considered that he had jurisdiction but declined to exercise it. The Queen’s Bench Division did not criticise this aspect of the decision of Henry J although the formal position of the Queen’s Bench Division was that it had no jurisdiction to interfere with this aspect of his decision.

36. The clear implication of the position of Henry J is that there would have been jurisdiction under section 4 of the Ordinance.

37. R v Spens (above) was considered in R v Stewart [2004] 3 Costs LR 501 at the Crown Court (Middlesex Guildhall). The Judge in that case appears to have thought that section 16(2) of the Prosecution of Offences Act 1985 was inapplicable to a case where the trial had been going on for some time but the case had to be stayed by reason of the, in effect, mental breakdown of the accused. The analysis of the Judge in that case seems to have been, in common with the submissions of the prosecution in the present case that the relevant legislation requires a concluding event. The Judge then came to the conclusion that the relevant concluding event was a stay of proceedings. He went on to consider that he had jurisdiction to award costs but the issue then arose as to how the discretion to award costs under that jurisdiction and considered whether the applicant for costs that brought the proceedings on himself. With great respect to the learned Judge in that case, I found his reasoning very difficult to follow.

38. The decision of Henry J is inconsistent with Seagroatt J in HKSAR v Lee Ming Tee & Anor (above). It is consistent with the central contention of those representing the accused that in section 4 the correct meaning of the words “where a defendant is not tried for an offence” thus means “where a trial is not concluded by the entering of a verdict”. Plainly, the trial in Lord Spens’ case had proceeded and that there had been a trial underway which was not concluded. Essentially, the argument of the accused is that Lord Spens was undergoing a trial but had not been tried and that must have been the construction of the relevant provisions by Henry J. Seagroatt J in Lee Ming Tee & Anor (above) was manifestly attempting to achieve the same outcome albeit that he would have exercised the discretion differently to Henry J. The differential in approach to the discretion is not the point. The issue is whether on a proper construction of section 4 of the Ordinance the Court had jurisdiction to at least consider the issue of costs before applying discretion. With respect to the judgment of Seagroatt J, I agree with his conclusion but not his reasoning. In my opinion, the use of the words “not tried” clearly suggests a liability for costs until the accused becomes “tried”, that is at the conclusion of the trial. Although section 4 does not define the conclusion of the trial it clearly links with section 5 which speaks of costs on an acquittal after trial. Indeed, the use of the phrase “after trial” in section 5 carries with it the implication that section 4 is meant to cover the position after committal or transfer up until the time which could be characterised as “after trial” has arrived.

39. The prosecution argued, as noted above, that consistent with all the other provisions in Part II of the Ordinance, in order to found jurisdiction to award costs, there is a concluding event in each section. For example, the argument was that the concluding event in section 5 was an acquittal after trial. The problem with the argument of the prosecution in relation to section 4 was that there was no concluding event that could be identified which could not have happened at some stage after a trial had gone for some time possibly for many months. Obviously a nolle prosequi could happen at the beginning of the trial process. However, it could equally occur at any stage until verdict. Normally, the order to leave a charge or indictment on the file not to be proceeded with without leave occurs at the beginning of the proceedings. That almost invariably occurs at the beginning of the proceedings but there is no reason in principle why it could not occur at a later stage. On the prosecution argument, if a nolle prosequi was entered before the jury was sworn then a Court would have jurisdiction to at least consider the issue of costs under section 4. Sometimes, but not invariably, a nolle prosequi is entered at the beginning of proceedings. However, on that argument, the minute proceedings moved beyond that point but never reached the point of an acquittal, the Court had no jurisdiction. The same analysis, on the prosecution argument, applies where there is a stay of proceedings before a jury is empanelled but not after or where there is a finding that an accused is unfit to conduct a trial. Again, normally, that is determined before a trial commences but as history demonstrates (see Spens and Stewart) that is not always the case. The question has, nevertheless, been correctly put by the prosecution: when is the concluding event in section 4? The answer is provided by the section itself: when the accused has been tried which is the opposite of being not tried.

40. In my opinion, as a matter of construction, the accused in the present case were undergoing a trial but could not have been regarded as having been tried because that carries with it the implication of bringing the process of being tried to a conclusion. Accordingly, I am of the opinion that section 4 of the Ordinance gives the Court jurisdiction to award costs to an accused person where the jury has been discharged while that accused is undergoing trial.

41. The remaining issue is the exercise of discretion reposed in the court in the event that there is jurisdiction. To date, the proceedings have been a long closely-contested case. The prosecution case alleges a series of concerted dishonest acts which evidence the conspiracies averred in the indictment. The case for the defence is that no illegality or dishonesty occurred in respect of the conduct of the accused. So far as the money laundering count on the indictment against the 1^st Accused, the essence of the defence position is that the money the subject of the charge was not the proceeds of an indictable offence. The normal position in relation to costs where there is an acquittal is that costs would follow the event unless there are positive reasons not to award them.[22] The classic examples of positive reasons are:

(1) The conduct of the accused has brought suspicion on himself or has misled the prosecution into thinking that the case against him was stronger than it turned out to be; and
(2) There was ample evidence to support a conviction but the accused was acquitted on a technicality which has no merit. However, an acquitted accused should not be deprived of costs on the ground that his acquittal was on a technicality if that would violate the presumption of innocence in his favour and the fact that sufficient evidence to justify charging an accused not in itself reason for depriving him of costs.

42. These examples are generally more apt in determining how to exercise the discretion where there has been an acquittal. They nevertheless provide some guidance in circumstances germane to the exercise of the discretion under section 4. The observations of Litton PJ in Tong Cun Lin v HKSAR (1999) 2 HKCFAR 531 were made in the context of an acquittal. They nevertheless are capable of being of general application and are as follows: [23]

“When a defendant has been brought to trial upon particular charges and is then found not guilty it is clearly right that he should normally be compensated out of public revenue for the costs incurred in defending those charges. In considering whether, despite this general rule, he should be deprived of all or part of his costs, the judge exercising the discretion must obviously look to his conduct generally, so long as such conduct is relevant to the charges he faced.”

43. In my opinion, those general observations are apposite to the present case under section 4.

44. There are also now a series of decisions of the Court of Final Appeal and Court of Appeal ordering costs in favour of an accused person facing a retrial notwithstanding that the person may have brought suspicion upon themselves or that there are otherwise disqualifying circumstances. The rationale for those cases is bound up with the notion that the person may have expended resources on the first trial and will need those resources to fund a further trial.[24] In the present circumstances, the prosecution has intimated that it wishes to continue to proceed against the accused and wants to hold a further trial. At the time of writing, there is presently a stay application on foot the primary object of which is to resist the course the prosecution proposes. At the time of writing, I have yet to determine the merits of that application. The reason I have cited the retrial cases is not because that is the basis upon which I propose to exercise my discretion. The citation of those authorities is to recognise that a possibly strong case against the accused or the accused possibly having brought suspicion upon themselves is not an automatic disqualification from an award of costs. The basis upon which I award costs is solely to compensate the accused for the conduct of the retrial ordered by the Court of Final Appeal.[25] The exercise of discretion has not been made upon the basis that:

(1)  Those representing the accused are no longer in funds;
(2)  The suggestion by the defence that there is a need to “top up” the finances of the accused;
(3)  The accused are financially embarrassed or in some way impecunious; or
(4)  The accused are unable to obtain funds from property which has been restrained in connection with this case but in other proceedings.

In my opinion, the foregoing bases upon which the discretion has not been exercised are irrelevant to the proper basis for the exercise of that discretion in this specific case. While it is difficult to see how they might be relevant in other circumstances, in my opinion that is certainly the position in the present case. On the premise that section 4 of the Ordinance gives jurisdiction, for the purposes of this case, the only basis upon which costs could be awarded is upon a compensatory basis within the scope of section 15(a) of the Ordinance and subject to the positive reasons exception suitably modified to the exercise of the discretion under the circumstances contemplated within section 4.

45. I take the determination by the Court of Final Appeal as to costs[26] as covering the field for all costs incurred by the accused whether at trial or on appeal up to the order for retrial. The order in this case covers costs after the event of that determination.

Issues in relation to section 17

46. Section 17 of the Ordinance provides as follows:

“Where at any time in the course of criminal proceedings a court or a judge is satisfied that costs have been incurred in respect of the proceedings by a party to the proceedings as a result of an unnecessary or improper act or omission by or on behalf of the other party to the proceedings, the court or the judge may, after hearing all such parties, order that all or part of the costs so incurred shall be paid to the first-mentioned party to the proceedings by the other party to the proceedings.”

47. The first thing to notice about this section as it speaks of any time in the course of criminal proceedings. Plainly, there must be a process which, in law, can be characterised as criminal proceedings. That was the point of Secretary for Justice v N (above). Liability for costs under this section could occur, for example, in the course of sentencing proceedings. The present case is, of course, a trial on indictment and the claim for costs on behalf the accused is squarely within the concept of criminal proceedings. In the course of submissions on behalf the prosecution, Ms Draycott, SC argued that the fact that this section contemplates liability for costs arising at any time in the course of criminal proceedings carries with it the implication that section 4 is narrower in its scope.

48. The focus of the contentions on behalf of the accused is that aspects of the examination-in-chief of Kerry Joel Knight by the prosecutor could be characterised as unnecessary or improper act or omission. Those representing the accused make the point that the notion of an unnecessary act or omission as opposed to an improper act or omission is disjunctive in section 17. It is submitted that fault is not a necessary precondition although the establishment of fault is relevant if it can be established.

49. Those representing the accused contend that the questioning on the part of the prosecutor of Mr Knight about his dealings with the 2^nd Accused was unnecessary. The test advanced is that whether the questioning was needed for the proper advancement of the indicted prosecution case.

50. In my opinion, the starting point for analysis must be relevance. If one views the questions which elicited the inadmissible and prejudicial material in isolation, then the questions were of limited if not marginal relevance. However, the jury were entitled to a rounded picture of Mr Knight if they were to make an assessment of his testimony. It appears to me that those questions were capable of providing relevant information for the jury to make the kind of assessment I would have expected them to make. Every counsel in criminal proceedings makes an assessment, indeed makes possibly thousands of assessments, in choosing questions. What one counsel as opposed to others go about establishing the kind of picture which it was appropriate to establish is very much a matter of judgement and questions such as whether, as counsel, I would have asked such questions or deferred such questions to a later stage in the examination of the witness are relatively meaningless. The answers to the questions if given now would, in any event, be liable to be heavily tinged with the clarity that hindsight brings. In my opinion, the questions were relevant. The answers were certainly unexpected and even more so given that Mr Knight was at times material to the issues at trial and presently a legal practitioner in New Zealand. I could not conclude that the questions were unnecessary.

51. It follows from that conclusion that the preconditions for the application of section 17 of the Ordinance do not exist. It follows that the prosecution is not liable under that section. I should add that even had I come to the conclusion that the questions were unnecessary, I would have hesitated long before exercising the discretion which is reposed in a Court under section 17 in determining whether or not to render a party liable for costs under that section. That decision does not arise.

52. It follows from this that the jurisdiction vested in the Court by section 17 does not arise in the circumstances of this case.

Orders

53. There will be a tentative order as follows:

(1)  The accused are to have their costs of the retrial including the costs of the costs application, such costs to be taxed if not agreed.
(2)  There will be a certificate for 2 counsel.
(3)  This tentative order will come into operation as the order of this Court in the absence of submissions within 14 days of the date of this tentative order as to the terms of the appropriate orders from the parties.

54. It is intended that the issue of any order for costs arising out of the application for the stay of proceedings is to be considered separately save that, consistent with the rulings in this case as to the construction of section 4 of the Ordinance, this Court has jurisdiction to entertain an application for costs under that section.

	(Andrew Bruce, SC)
	Deputy High Court Judge

Ms Charlotte Draycott SC, leading Mr Mitchell Neil S, Mr Li Chun Ngai Martin, Counsel on fiat and Miss Ng Oi-lam Joycelyn SPP of the Department of Justice, for HKSAR

Mr Tim Owen QC leading Mr Tsoi Y M Benson, instructed by Boase Cohen & Collins, for the 1^st Accused

Mr Ian Winter QC leading Mr Cao Yuan Shan and Ms Betty Chiu, instructed by Haldanes, for the 2^nd Accused

Mr David A S Khosa, instructed by Hobson & Ma, for the 3^rd Accused

[1] HCCC 309/2019, dated 18 June 2021, §6-18

[2] HKSAR v Chen Keen & Ors[2019] HKCFA 51, FACC 26/2018. §11.

[3] [1999] 3 HKC 647, 650.

[4] [2014] 3 HKLRD 470, §20.

[5] As Macrae VP then was.

[6] [2013] 1 HKLRD 130, §25.

[7] [2013] 1 HKLRD 130, §26.

[8] [2013] 1 HKLRD 130, §37.

[9] The Ordinance came into operation on 17 January 1997.

[10] The accused in relation to (3) point to the examples identified in HKSAR v Chan Hing Kai (No 2).

[11] Joint Defence Submission,§9 and 10

[12] [2003] 1 HKC 174, §24.

[13] Prosecution Submissions, §11.

[14] Prosecution Submissions, §16

[15] Pollen Estate Trustee Co Ltd v Revenue and Customs Commissioners [2013] 1 WLR 3785, §24

[16] [2021] SASCA 56, §30.

[17] Such legislation includes the Trade Descriptions Ordinance Cap 362 (section 28), the Magistrates Ordinance, Cap 227 (sections 7F, 8, 8A, 18B, 20, 23, 27, 36, 56, 61, 117, 118, 120, 124 and 131 are just some of the provisions in that Ordinance which impose costs on one or other party to the proceedings), the Criminal Procedure Ordinance, Cap 221 (sections include 9H, 9J, 16, 32, 34, 65F, 81A, 81D, 81F, 107), and the District Court Ordinance, Cap 336 (in its criminal jurisdiction: section 77A).

[18] This includes partial acquittal in summary proceedings.

[19] This provision is necessary because although a discharge under section 16 is a deemed acquittal, a discharge can only occur after the time for filing an indictment under the Criminal Procedure Ordinance has expired but before the accused has been arraigned and thus is not an acquittal after trial within the meaning of section 5 of the Costs in Criminal Cases Ordinance.

[20] There may be issues of quite how this provision sits with sections 117, 118 and 120 of the Magistrates Ordinance, Cap 227.

[21] As Henry LJ then was.

[22] The authorities on this topic are legion. They include Tong Cun Lin v HKSAR (1999) 2 HKCFAR 531; Hui Yui Sang v HKSAR (2006) 9 HKCFAR 308, [2006] 2 HKLRD 738; Ting James Henry v HKSAR [2008] 4 HKLRD 850; HKSAR v Chow Chi Wai (2016) 19 HKCFAR 515.

[23] (1999) 2 HKCFAR531, 535.

[24] HKSAR v Chen Keen & Ors[2019] HKCFA 51, FACC 26/2018; HKSAR v Chan Hing Kai (No 2) [2020] 2 HKLRD 367; HKSAR v Wu Wing Kit & Anor [2017] 3 HKC 490.

[25] HKSAR v Chen Keen & Ors (2019) 22 HKCFAR 248, §94.

[26] HKSAR v Chen Keen & Ors[2019] HKCFA 51, FACC 26/2018. §11.

HCCC 309/2019

[2021] HKCFI 1751

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

________________________

BETWEEN

	HKSAR	1^st Accused
	and
	CHEN KEEN (alias JACK CHEN) HAO MAY (formerly known as WANG MAY YAN) (alias MAY WANG)	2^nd Accused
	YEE WENJIE (also known as YU WENJIE) (alias ERIC YEE)	3^rd Accused

________________________

Before: Deputy High Court Judge Bruce SC in Court

Dates of Hearing: 10 and 15 June 2021

Date of Ruling: 15 June 2021

Date of Reasons for Ruling: 18 June 2021

________________________

RULING

APPLICATION FOR DISCHARGE OF THE JURY

________________________

The submission

1. On 7 June 2021, Mr Kerry Joel Knight testified in this trial as a prosecution witness. In the course of his testimony, he told the jury that earlier in 2021 he had a conversation with the 2^nd Accused. Mr Knight related to the jury that in the course of that conversation, the 2^nd Accused had told him that she had been convicted, that she had served time in jail and that she was undergoing a retrial.

2. As a matter of fact, each of the accused had previously been convicted. The indictment was cast in a slightly different and impermissible way in the previous trial and, indeed, this was the reason that the Court of Final Appeal determined that the appeal should be allowed. For present purposes, the main point is that in consequence of that determination, a retrial was ordered[1].

3. On any view, such evidence was irrelevant to the principal facts in issue and is, at minimum, capable of being highly prejudicial to at least the 1^st Accused and the 2^nd Accused. As will shortly appear, on a careful analysis of what was actually said, the testimony of Mr Knight in this regard was capable of affecting the position of the 3^rd Accused.

4. Counsel for the Accused informed me on 8 June 2021 that they sought the discharge of the jury. The jury were then and there sent away and submissions on the issue of discharge were heard on 10 June 2021.

Ruling

5. I have decided that the proper course to adopt is to order that the jury be discharged from continuing to try all 3 accused. It is right that parties and members of the community be provided with an explanation as to why I have adopted this course, and I have accordingly provided my reasons below.

The impugned testimony

Context

6. On 7 June 2021, which was Day 57 in the trial, the prosecution called Mr Kerry Joel Knight. Mr Knight was a witness I invited the prosecution to call, following a submission by those representing the accused that I should do so. The submission was opposed by the prosecution.

7. Mr Knight was, at times material to these proceedings, the senior partner of a New Zealand firm of Barristers and Solicitors by the name of Knight Coldicutt. That firm acted for the listed company at the centre of these proceedings: Natural Dairy (NZ) Holdings Limited. The stock code of this listed company was “462”. The firm held a substantial sum of money raised by 462 in escrow. Just over NZ$51 million was released from the monies held in escrow to the 2^ndAccused. In a judgment dated 26 May 2021 concerning whether to invite the prosecution to call Mr Nicholas John Cross, I described by reference to the evidence in the case the mechanics of how that money came to be released[2]. This can be seen in paragraphs 3-16. Those paragraphs also describe aspects of the events which occurred following the transfer of the NZ$51 million. The judgment concerned a ruling I had made as to whether I should invite the prosecution to call Mr Cross to give evidence. I incorporate those paragraphs by reference in this ruling.

8. To set the scene for Mr Knight’s testimony, it is also relevant to note that I also ruled that the prosecution should be invited to call Mr Knight to testify. It is fair to say that the prosecution did not want to call either Mr Cross or Mr Knight. It is relevant to note that both Mr Cross and Mr Knight gave statements. I use the word “statements” in what might be characterised as a somewhat loose manner because they were statements taken by those individuals themselves. In fairness, that is not to criticise the statements because much of this part of the evidence was presented on an improvised basis. Certainly, at the outset of the proceedings, neither the prosecution nor (probably) the defence ever contemplated calling these witnesses.

9. Mr Knight and Mr Cross were witnesses who could prove certain documents put to Mr Yip Kean Mun in the course of cross-examination. Mr Yip was the second prosecution witness in the trial. These documents were put to him in support of the case for the defence that the payment of the NZ$51 million was a lawful payment made with the authority of 462. Mr Cross and, perhaps more importantly, Mr Knight were likely to be able to speak to the circumstances which led up to that payment.

10. The case for the prosecution has always been that this was not a lawful payment because the Sales and Purchase Agreement dated 22 May 2009 between, in effect, the 2^nd Accused through companies under her control on the one part and 462 on the other part (which was, taken together with subsequent amendments, the founding commercial document for the transaction) did not permit money to be transferred from 462 to the 2^ndAccused at this stage of the commercial arrangements between the 2^ndAccused and her companies. The case for the prosecution is that money could only have been transferred at this specific time for the specific purpose of providing financial assistance to the companies controlled by the 2^nd Accused under the terms of the Sales and Purchase Agreement and for no other purpose. The case for the prosecution was that once certain events had occurred then payment could be made for the purpose of a purchase by 462, first, 20% of the shares of a company under the control of the 2^nd Accused and then second, at a later time, the balance of the shares in this company. The positive case being advanced by the 2^nd Accused in particular was that at this stage 462 was entitled to pay and she was entitled to receive the money as consideration for the sale of 20% of the shares of a company owned by the 2^nd Accused to 462 and that the payment was made with the authority of 462.

11. Plainly, on the documents put to the second prosecution witness, Mr Yip, by the defence, the assertion was that Knight Coldicutt who held the relevant funds in escrow had done so for the purpose of paying, on behalf of 462, for the 20% of the shares in the company owned by the 2^nd Accused. It was the positive case of the 2^nd Accused that this was done on the authority of 462 and the second prosecution witness knew it. Critically, he was the chairman of the board of 462. The positive case for the 2^nd Accused was that the documents in respect of which Mr Knight could speak demonstrated the payment on lawful authority. The essence of the prosecution case in this regard was that even if there was the appearance of lawful authority, there was no actual authority to do what had been done.

12. It is important to note that there is no charge on the indictment alleging that the transfer of NZ$51 the million was, in itself, ever the subject of a criminal charge. The events surrounding its transfer are said by the prosecution to be[3]:

(1)  circumstantial evidence which supports the inference of dishonesty in respect of the existing conspiracy charges;
(2)  circumstantial evidence which supports the inference that the 1^st Accused and the 2^nd Accused had been working together at times material to the existing conspiracy charges; and
(3)  given that the 1^st Accused received from a company under the control of the 2^nd Accused a substantial portion of the NZ$51 million without any obvious legal right to any of that money, this was evidence from which the jury could infer that the 1^stAccused was a member of the conspiratorial agreement with the 2^nd Accused and that his share was the proceeds of the criminal conspiracy is the subject of the indictment.

Of course, the receipt of the portion of the NZ$51 million by the 1^st Accused was also a fundamental element in support of the charge of which was Count 5 on the Indictment. Any summing up in this area would be, to say the least, a difficult area to navigate. In this regard, it is only appropriate that I pay tribute to the skillful manner in which Anthea Pang J navigated this area in her summing up in the first trial[4].

13. At the time the problems arose, the examination-in-chief of Mr Knight had not been concluded. Indeed, judging by the range of issues identified in his witness statement and by reference to what I understand to be the relevant issues in the case, his examination-in-chief was far from concluded.

The testimony

14. At the outset of her examination of Mr Knight, Ms Draycott, SC asked questions about how Mr Knight came to be aware that he (or possibly Mr Cross) was possibly going to be needed as a witness in these proceedings. This formed no part of the statements provided by Mr Knight. The examination proceeded as follows[5]:

Q. Mr Knight, who first contacted you in relation to these transactions involving the Crafar dairy farms this year?
A.  May Wang or maybe – yes, I think it was May Wang.
Q.  What was the nature of that communication?
A.  She brought me up to date to the fact that she was being released from prison and was in a re-trial.
It is to be noted that no objection was raised at this stage by the defence. A little later on, a further exchange between the prosecutor and Mr Knight occurred as follows[6]:
Q.  Was that all that she sent you, or were there other matters that she sent you?
A.  That was the gist of it. I don’t think she sent anything more in relation to what she – I mean, until I was asked to give evidence, I wasn’t even aware what she was charged with.

15. The examination of Mr Knight continued. The issue arose as to why certain documents possibly germane to the case at hand had not been preserved by the firm. In this context, a question was asked as to whether Mr Knight knew that the 1^st Accused and the 2^nd Accused had been arrested. The exchange is as follows[7]:

Q. Even though the fraud office[8] had made enquiries, and indeed presumably you knew Jack Chen and May Wang had been arrested?
A. And they had been charged. And that was the end of the case. So – and they’re in jail. So I don’t think any other lawyer would have done anything differently in the circumstanced (sic).

16. Further into the examination of Mr Knight, the prosecutor was asking about the destruction of documents and the events in 2010. In that context, the following exchange occurred[9]:

Q. I’m talking about why documentation wasn’t preserved.
A. I cannot – I cannot answer that. I was not – I had a health issue at that time. I wasn’t – in 2010 and 2011, I wasn’t in the office a lot. And that’s one of the reasons I left. And Brett Cran was in charge. I mean, he did what he did. And then as that case went on, and she got convicted, there was no – for seven years keeping the files – in 2017, it was long gone.

Earlier directions on previous proceedings

17. Earlier in the trial, when it became apparent that those representing the accused wished to cross-examine certain prosecution witnesses as to their previous testimony, it became necessary to explain to the jury that there had been earlier proceedings. Such a direction was requested by those representing the accused and the essence of its terms suggested. The direction given was[10]:

MR WINTER:  Your Lordship may feel this is now the appropriate time to give the jury the direction about the fact there’s been a previous piece of litigation in this case.
COURT:   All right.
MR WINTER:  Which will explain –
COURT:   What I will simply say is that there have been some proceedings before, as you probably guessed, so they will feel they knew all along.
MR WINTER:  Exactly.
[irrelevant short passage omitted]
(In the presence of the jury and witness)
COURT:   Members of the jury, I’m sure you’ve already guessed that there were other proceedings in this case at an earlier time. The documents which I suspect you’re about to see were dealt with in a particular way in those proceedings. That doesn’t apply anymore and they are relevant and admissible in these proceedings.
As I say, doubtless you guessed there was something else going on in the time between 2009 and now, but I would ask you – in fact, I will direct you – not to speculate about what those proceedings were, what the outcome may have been. Just concentrate on the evidence in this case, and that will do justice according to law.
All right?   Thank you very much.
MR WINTER:  Thank you very much, my Lord.

Who is affected by this testimony?

18. One of the features of the testimony given by Mr Knight is that it clearly refers to the 2^nd Accused. It is to be readily construed as affecting the 1^st Accused. It does not directly mention the 3^rd Accused. It is accepted by the prosecution if it is considered that what was said by Mr Knight results in it being appropriate to discharge the jury with respect to the 1^st Accused and the 2^nd Accused, it is also appropriate to discharge the jury with respect to the 3^rd Accused. That is a concession which is entirely proper.

Submissions

Submissions by those representing the accused

19. As an overview, the case for the accused is that the jury learned (1) the 2^nd Accused had been released from prison and was in a retrial; (2) that the 2^nd Accused of being convicted of the very thing with which she was charged in previous proceedings and (3) they (referring to the 1^st Accused and the 2^nd Accused) had been in jail as a result of such a conviction.

20. The case for the accused is that these items of information given to the jury through the testimony of Mr Knight created extreme prejudice to the fairness of the trial. It was submitted that this cannot be cured by any judicial direction to the jury. The defence rely on the fact that not only have the jury learned about previous criminal conduct on the part of at least the 2^nd Accused and the 1^st Accused, but also that it is for the very offences for which they are currently in the jury’s charge. It was, therefore, submitted that the jury could not get this information out of their minds.

21. The defence make the point that the in usual course of criminal proceedings great care is taken to ensure that the jury are not aware of previous convictions on the part of the accused and that except in very limited circumstances to provide that information to the jury is a grave departure from the standards of fairness required in a criminal trial.

22. The defence submit that this is a stage substantially worse than the case where the previous convictions of an accused person are revealed to the jury because the information in this case amounts, in effect, to information about a prior determination of guilt on the specific facts of this case. Given the directions that have already been given by the Court as to the burden and standard of proof[11], the present jury therefore have information that another jury was, on the evidence presented to them, satisfied beyond reasonable doubt as to the guilt of these accused. Counsel for the accused would face a very difficult task in trying to explain to the jury why they should come to a different conclusion to the first jury. Further, in dealing with this issue, the defence will have to grapple in their closing submissions before the jury with the issue of destruction of documents (which are relevant to the credibility of Mr Knight) in closing submissions and yet remind the jury of the context in which the issues of destruction were raised. Indeed, as will appear from the transcript quoted above, it is the fact of the conviction which provided Mr Knight with the justification for not taking steps to preserve the documents so that they were available for trial in 2021. As the defence submission says[12]: “On the one hand therefore the Jury is expected to put the conviction out of their mind; but on the other to rely on it when assessing the honesty and bona fides of Mr Knight.”

23. The submission is that the harm that has been done in this case is not capable of being remedied by direction. The point made about the difficulty faced by the defence to make closing submissions is repeated in the contemplation of how the jury would be directed on the topic of assessing listed Mr Knight’s credibility on this topic concerning how the documents came to be destroyed or not retained.

24. Those representing the accused contend that the situation is made worse by the fact that the witness who revealed this evidence was a lawyer. Further, it is contended that “The jury will rightly conclude that great care has been taken to conceal from them, for many months, the reality of why this trial is taking place so long after the key events”.[13]

25. Those representing the accused argue that the jury will now know, on the basis of the earlier directions given by the Court taken together with the impugned testimony of Mr Knight, what was kept from them when they were asked not to speculate about the previous proceedings to which the Court referred in the direction given. That, so the defence argues, heightens the inability of the jury to keep from their minds what they were told not to speculate about[14].

26. At the heart of the submissions is that it would be impossible to provide proper directions in all of the circumstances to ameliorate the prejudice created by the impugned testimony of Mr Knight. Accordingly, the Court is enjoined not to attempt the impossible[15].

27. It was also submitted that the stage at which the inadmissible material is received is not critical. Those representing the accused contend that in the event that this highly prejudicial material was received was early in the proceedings the Court would not have hesitated to discharge the jury and start again.

28. It was contended by those representing the accused that the revelation of the prejudicial material in this case would make directions in any summing up on good character to be impossible.

Submissions by the prosecution

29. The prosecution also made submissions. I have not included references to the response by the prosecution to allegations by those representing the accused of recklessness and, perhaps, a faint suggestion, despite the suggestion being expressly eschewed, of fault. As will appear later in these reasons, the prosecution was neither at fault nor was it reckless. In my opinion, no one could have imagined that the questions by the prosecutor in those circumstances would have produced the answers. Even less could anyone have imagined that such responses would come out of the mouth of a New Zealand barrister and solicitor.

30. The prosecution contends that the trial judge is in the best position to decide the degree of prejudice. In this regard, citing Imran Aslam v R [2011] EWCA Crim 2797, the prosecution contends that a discharge should only occur if it can be established that there is “a high degree of need”. The prosecution submits that there is a preference in the criminal law for proceeding with the trial once it is underway. The options available to a trial judge in the circumstances were outlined in the submissions of the prosecution. Essentially, the contention comes to the proposition that in the specific circumstances of this case a firm direction by the trial judge will meet the problem which has arisen in the present case.

31. It is fair to say that as to the principles and the relevant factors that the trial judge should take into account the prosecution and the defence are essentially in agreement.

32. The prosecution contends that the revelation that the accused was convicted and that the present proceedings are a retrial is not as prejudicial as where the jury learns of other previous convictions. In the written submissions of the prosecution, it is observed[16]:

“We believe that jurors would readily accept that in those circumstances the defendants are entitled to a new trial uncontaminated by the old. The jurors are seized of the evidence in relation to the current offending and unlike “previous conviction cases” there is no basis for them to speculate about the nature or extent of other offending about which they know nothing. The disclosure is thus capable of being contained by the giving of adequate directions.”

33. The prosecution referred to HKSAR v Mok Swee Chuan [2010] 3 HKC 318 in which in a retrial it emerged that the accused was facing a retrial. The Court of Appeal (Stock VP, Yuen JA & McMahon J) refused an appeal which was argued on the basis that the trial judge should have discharged the jury. As the Court of Appeal noted the trial judge had pointed out that the evidence had been different in the previous trial[17]. The Court also took account of the fact that this arose out of an entirely proper cross-examination of the accused by the prosecutor about a real inconsistency between his present testimony about at the previous trial. The Court also considered the prejudice of knowing about the previous trial was of no greater prejudice than the fact that the accused had in the present trial lied about what was said at the previous trial.

34. The essence of the prosecution position is best stated by the following passage from the prosecution’s written submissions[18]:

“Because the disclosure relates to matters within the same factual matrix but in prior proceedings, the issue can be more effectively and directly dealt with by direction(s) as the jury understands the issues and is not left to speculate about unspecified bad conduct on other occasions and what that means in terms of the defendants’ character. The remedy of a firm direction is thus more and not less, effective and appropriate than in a situation where previous convictions have been revealed. The jury do not know and do not need to know the circumstances of the earlier trial or subsequent appeal. Against the background of an appeal and consequent retrial, we suggest an ordinary person would readily understand the need for the previous proceedings to be put aside and that they should not form part of their consideration. It is not hard to understand that in all fairness the retrial must start afresh, untrammeled by the previous proceedings. By contrast the revelation of previous dishonesty may be harder to ignore.”

Principles

Values engaged

35. When faced with the reception into evidence of prejudicial material which might call into question the fairness of the trial, the trial judge has a discretion to discharge a jury. At the heart of that discretion is the obligation to accord to an accused person a fair trial. The central value engaged in this aspect of a fair trial is that the jury should receive and consider relevant and admissible information, but should not receive irrelevant and/or prejudicial material which might divert the attention of the jury from their task in evaluating the relevant and admissible material in rendering a true verdict against the accused. In this regard, as the authorities demonstrate, it has long been regarded as inappropriate to reveal to the jury the previous convictions of an accused person. There are exceptions to this rule but those exceptions, as the authorities and statute demonstrate, are carefully circumscribed. These exceptions do not arise and are not engaged in the present case. However, a reference to these situations does demonstrate a recognition of the dangers which arise here. The underlying assumption is that there is a risk that such material might prejudice the jury against the accused and divert them from their task. However, at the heart of those values is the concern to accord to an accused a fair trial. Another critical value which comes into play in dealing with the issue at hand is the strong preference under our system of criminal justice for a trial, once started, to be taken to its conclusion.

Fair trial

36. While, in a sense, it is unnecessary to cite authority to establish the critical primacy of the right to a fair trial, it is appropriate to state some of the basics. The right to a fair trial finds itself firmly rooted in the common law and the Hong Kong Bill of Rights Ordinance, Cap 383 and the Basic Law. Article 87 of the Basic Law declares[19]:

“Anyone who is lawfully arrested shall have the right to a fair trial by the judicial organs without delay and shall be presumed innocent until convicted by the judicial organs.”

37. Further, the system of justice which operates in Hong Kong is designed to ensure a fair trial. In Randall v R [2002] 1 WLR 2237 Lord Bingham observed:[20]

“There is, however, throughout any trial and not least a long fraud trial, one overriding requirement: to ensure that the defendant accused of crime is fairly tried. The adversarial format of the criminal trial is indeed directed to ensuring a fair opportunity for the prosecution to establish guilt and a fair opportunity for the defendant to advance his defence. To safeguard the fairness of the trial a number of rules have been developed to ensure that the proceedings, however closely contested and however highly charged, are conducted in a manner which is orderly and fair.”

38. Lord Bingham added:[21]

“But the right of a criminal defendant to a fair trial is absolute. There will come a point when the departure from good practice is so gross, or so persistent, or so prejudicial, or so irremediable that an appellate court will have no choice but to condemn a trial as unfair and quash a conviction as unsafe, however strong the grounds for believing the defendant to be guilty. The right to a fair trial is one to be enjoyed by the guilty as well as the innocent, for a defendant is presumed to be innocent until proved to be otherwise in a fairly conducted trial.”

39. While context is important and it is appropriate to recall that Randall was about egregious prosecutorial misconduct, which is rarely seen in Hong Kong, the principles stated by Lord Bingham are fundamental. In HKSAR v Lee Ming Tee & Anor [2001] 1 HKLRD 599,[22] the right to a fair trial is clearly articulated.”

Discretion to discharge

40. The trial judge has a discretion to discharge a jury. Some of the authorities which support this proposition are old but none the worse for that. They are: R v Charlesworth (1861) 9 Cox CC 44, 121 ER 786 and Winsor v R (1866) LR 1 QB 289. Indeed, the language which is often used in cases considering whether it is appropriate to discharge – “high degree of necessity” – echoes the language of Winsor v R[23].

41. In modern times, the discretion to discharge was recognised in R v Weaver [1968] 1 QB 353. In that case, an application to discharge the jury was made because two pieces of evidence, possibly prejudicial to the appellants, were inadvertently admitted during their trial of a charge of fraudulent conversion. The first – which was admitted notwithstanding efforts to prevent its disclosure by “editing” the depositions – was to the effect that, when cautioned, the appellants had recited in a light-hearted manner the words of the caution addressed to them by the police; the second was that the appellants’ address was known to the police and had been circulated. The application was refused and the accused were convicted. The Court of Appeal (Sachs LJ, Brabin & James JJ) rejected an appeal on the basis that the trial judge should have exceeded to the application to discharge. In the course of giving judgment for the Court, Sachs LJ observed[24]:

“Cases parallel to the present one have been brought before the Court of Criminal Appeal on a considerable number of occasions in the course of the last few years and the modern practice has become well defined. In each of those cases it has, of course, been natural for counsel for the appellant or applicant to cite a trio of cases which are mentioned in Archbold’s Criminal Pleadings, Evidence and Practice, 35^th ed (1962), para. 936, Rex v Peckham (1935) 25 Cr App R 125, 52 TLR 159, CCA; Rex v Palmer (1935) 25 Cr App R 97, CCA and Rex v Firth (1938) 26 Cr App R 148, [1938] 3 All ER 783 CCA. Those cases cannot, however, be looked at in isolation. As already stated, the modern practice evolved in the light of these cases is that in essence, as has now often been said (see, for instance, a passage which appears in Reg v Parsons [1962] Crim LR 631, 632, CCA), whether or not to discharge the jury is for the discretion of the trial judge on the particular facts and the court will not lightly interfere with the exercise of that discretion.”

42. R v Peckham, R v Palmer and R v Firth to which Sachs LJ referred, suggest that where there is anything prejudicial to the accused which comes out in the trial, the jury should be discharged. Perhaps the best example are of that is in R v Peckham where Lord Hewart CJ observed[25]:

“First counsel for the prosecution should always before opening acquaint themselves with the contents of the indictment by seeing either the actual indictment or a copy thereof; and secondly, where a statement injurious to the prisoner with regard to his previous record is made to the jury and counsel for the defence applies for the trial to be started afresh, the Court should begin the trial afresh before another jury.”

43. By the time of cases such as R v Weaver, the approach to the issue had changed. Hence, the reference by Sachs LJ to “modern practice”.

44. In Australia, earlier authorities such as R v Knape [1965] VR 469 are not quite as doctrinaire as R v Peckham, R v Palmer and R v Firth could be seen to be, but it is fair to say that there are clear echoes of those 3 cases in R v Knape. In Knape, the accused had been convicted on several counts of robbery and illegal use of a motor car. He appealed on the ground that evidence of his prior bad character had inadvertently been given at his trial. The circumstances under which that had occurred were as follows. The accused had called a witness on his behalf. During his evidence-in-chief, the witness was asked by the accused, for a relevant purpose, “How long have you known me?” The witness answered that he had known the accused since about 1960, and then added, non-responsively, that they had met “at Bendigo Training Prison”.

45. The trial judge assumed, that the jury were likely to infer, from that answer, that the accused had been a serving prisoner. However, in deciding not to discharge the jury in Knape, the trial judge took into account the fact that the accused, whilst awaiting trial, had absconded, a fact that was in evidence. Indeed, it was also in evidence that the accused and his alleged co-offenders had escaped from legal custody while the trial was being conducted. In addition, the jury would have known that Jones, with whom the accused clearly had a close association, had a long criminal record. In those circumstances, he concluded that the inadvertent disclosure of the bad character of the accused was of less significance than it might otherwise have been.

46. On appeal the Court (Winneke CJ, Pape and Starke JJ) concluded that the trial judge had erred in failing to discharge the jury. The Court held[26]:

“The law has long recognized the prejudicial effect of evidence of prior conviction and bad character, and that such evidence is calculated to render a fair trial improbable. Thus as a matter of high policy evidence of such matters, apart from the well-known exceptions, is rigidly excluded.”

47. Their Honours later added[27]:

“However, if evidence of bad character is inadvertently and improperly given there is undoubtedly a discretion in the trial judge to determine whether or not the jury should be discharged, a discretion to be exercised according to the circumstances of the particular case. An examination of the authorities leads us to the view that unless it can be said, upon the evidence, that the irregular disclosure could not in any way affect the judgment of the jury in coming to their decision of guilty or not guilty, the trial judge should exercise his discretion in favour of the accused.”

48. However, while it is appropriate to note that modern practice is, to some extent, now different to that which operated in R v Peckham, R v Palmer and R v Firth, and to an extent, R v Knape, what remains constant is the concern of our courts to ensure that jurors should not be distracted by prejudicial and irrelevant material such as knowledge of previous convictions unless there are good and sound reasons for that. What has changed is not the underlying policy that such material should be kept from the jury. What has changed is how that is dealt with in determining what to do if the policy is breached.

49. The current position in Australia is best exemplified by Crofts v R (1996) 186 CLR 427. In that case, the accused was tried on numerous counts alleging sexual offences against a child. The prosecutor elicited from the complainant’s evidence that the accused had committed not just those acts, but also a series of uncharged acts against the same child. Evidence of these acts were acknowledged to have been highly prejudicial. Nonetheless, the trial judge refused to discharge the jury, having decided instead to give them a strong warning against paying any attention to it. The High Court held that, in the circumstances, the refusal to discharge the jury had occasioned the risk of a substantial miscarriage of justice. The Court held that it was not possible to say with assurance that, but for the admission of the inadmissible evidence, the conviction was inevitable. The High Court of Australia (Toohey, Gaudron, Gummow and Kirby JJ, Dawson J dissenting), held[28]:

“No rigid rule can be adopted to govern decisions on an application to discharge a jury for an inadvertent and potentially prejudicial event that occurs during a trial. The possibilities of slips occurring are inescapable. Much depends upon the seriousness of the occurrence in the context of the contested issues; the stage at which the mishap occurs; the deliberateness of the conduct; and the likely effectiveness of a judicial direction designed to overcome its appropriate impact. As the court below acknowledged, much leeway must be allowed to the trial judge to evaluate these and other considerations relevant to the fairness of the trial, bearing in mind that the judge will usually have a better appreciation of the significance of the event complained of, seen in context, than can be discerned from reading transcript.
Nevertheless, the duty of the appellate court, where the exercise of discretion to refuse a discharge is challenged, is not confined to examining the reasons given for the order to make sure that the correct principles were kept in mind. The appellate court must also decide for itself whether, in these circumstances, the result of the refusal to discharge the jury occasioned the risk of a substantial miscarriage of justice. In other words, can the appellate court say with assurance that, but for the admission of the inadmissible evidence, the conviction was inevitable. In our view, in the particular circumstances of this case, that could not be said.”

50. R v Halliday (2009) 23 VR 419, followed the approach in Crofts. More recently, in Martin v R [2015] ACTCA 38 in the Court of Appeal of the Australian Capital Territory (Refshauge, Burns & Ross JJ) considered a case where the appellant was charged with murder. The defence was self defence. Part of the evidence of the prosecution included a recorded phone call between the accused and another person. What the jury did not know was that the accused was in prison when he made that call. There was an oblique reference to the accused “getting out”. Great care was taken by the prosecution to avoid any suggestion that the accused person was in prison at the time of the call. However, an unsolicited answer by a subsequent prosecution witness revealed that the accused was in jail for a purpose unconnected with the murder. Defence Counsel applied for the discharge of the jury. That application was refused. The Court of Appeal, following Crofts v R held that the context did not require appellate interference in the decision of the trial judge not to discharge the jury. Court of Appeal pointed to the fact that even on the defence case the murder occurred in the context of a plan to rob the victim. Martin v R was followed in R v ETJ (No 2) [2017] ACTSC 259 which was another case in which the incarceration of the accused was revealed, this time by a police officer who was a witness for the prosecution. The decision is one of first instance but none the worse for that. The learned trial judge declined to discharge the jury saying that there were many reasons why a person might be in jail including for non-payment of parking fines.

51. Bad behaviour or criminal conduct is sometimes revealed in the course of the trial. In R v Koppen (1975) 11 SASR 182, a witness for the prosecution in a charge of larceny as a servant, in a somewhat rambling answer bluntly hinted at other criminal conduct on the part of the accused. The Full Court of the Supreme Court of South Australia (Bray CJ, Hogarth & Sangster JJ) noted that no objection had been taken at the time to the impugned answer. Subsequently, the trial judge was asked to discharge the jury. The attack on appeal was to the exercise of discretion by the trial judge. In this regard, Bray CJ giving the principal judgment of the Full Court observed[29]:

“This question has usually arisen with regard to disclosure of the accused’s previous convictions inadvertently elicited or volunteered by a witness. In such a case the court has a discretion, to be exercised, of course, on judicial grounds, to discharge the jury or allow the trial to proceed. That discretion is ultimately controllable by an appellate court.”

52. Bray CJ then referred to the authority the bulk of which has been cited earlier in these reasons. His Honour concluded[30]:

“The latest decisions (see, for example, Reg. v Palin (1969) 53 Cr App R 535) stress the wide range of the discretion and declare that appellate courts will not lightly interfere with its exercise. I accept this, but I think it must be borne in mind that the law for very good reasons protects an accused person against the disclosure of his previous record or of his bad character, subject to clearly defined and limited exceptions. Breaches of the rule ought not, in my view, to be lightly treated, even if they were unsolicited or proceed from inadvertence, and the fact that they were not objected to at the time is not conclusive.”

53. Bray CJ noted that the exercise of discretion by the judge could not be successfully attacked. His honour said that his reasons for this included that “This was a long trial; the answers complained of were likely to be drowned in the volume of testimony; the hostility of the witness was obvious; and the jury were told that there was no suggestion that the appellant had committed any crimes in relation to pay”. Perhaps critical to understanding the reasoning of Bray CJ is his concluding comment on this issue. His honour held: “Whatever I might have decided if I had been presiding at the trial, it is not in my view possible for us to say that the bounds of the discretion were exceeded”. Hogarth J in a concurring judgment added[31]:

“Even so, if some really damaging and otherwise inadmissible material were to be volunteered by a witness, then I think it would be proper for a judge to exercise his discretion to discharge the jury. I myself have done so on occasion where this has happened.”

54. Hogarth J concurred with the Chief Justice that the Full Court could not interfere with the exercise of discretion. Sangster J took a slightly different line in concurring with Bray CJ placing more emphasis on the choice that counsel made not to object[32].

55. The defence also refer to R v Lawson [2007] 1 Cr App R 20. In that case, the appellants were convicted of conspiracy to import cannabis resin. A central plank of Lawson’s defence case was that he was duped by a person named Taylor who employed a number of people to do runs including a person named Hall-Jones with whom some of the appellants had associated. In the course of summing up, the judge inadvertently told the jury that Hall-Jones had been arrested for a drug smuggling operation, and implicitly, of his guilt of being involved in an offence involving drugs. As a result, Lawson applied to the trial judge to discharge the jury which application was refused.

56. On appeal the English Court of Appeal, after reviewing the specific facts and circumstances applicable to the case held that despite the strength of the prosecution case against the appellant, the reception of the prejudicial material in the case was of such importance to the central issue in the case that it could not be remedied by judicial direction, however strong. In making that determination the Court of Appeal held[33]:

“64. The ultimate question for the court in determining whether the judge correctly ruled against the appellants’ application to discharge the jury is whether, given the error he made and the steps he took to mitigate it, it is satisfied that the convictions are safe; Docherty. And, in determining that question in a case such as this of wrongly admitted prejudicial material, the appropriate test for the trial judge is that identified in Docherty, namely as to the “the most prejudicial interpretation” and its possible effect on the jury. Perhaps, more useful is the simpler and more broadly expressed formulation in Medicaments and Related Classes of Goods(No 2) [2001] 1 WLR 700, CA, whether a fair-minded and informed observer would conclude that there was a real possibility, or real danger, that the jury would be prejudiced against a defendant by wrongly admitted prejudicial information.
65. Whether or not to discharge the jury is a matter for evaluation by the trial judge on the particular facts and circumstances of the case, and this court will not lightly interfere with his decision. It follows that every case depends on its own facts and circumstances, including: 1) the important issue or issues in the case; 2) the nature and impact of improperly admitted material on that issue or issues, having regard, inter alia to the respective strengths of the prosecution and defence cases; 3) the manner and circumstances of its admission and whether and to what extent it is potentially unfairly prejudicial to a defendant; 4) the extent to and manner in which it is remediable by judicial direction or otherwise, so as to permit the trial to proceed. We repeat, all these matters and their combined effect are very much an evaluative exercise for the trial judge in all the circumstances of the case. The starting point is not that the jury should be discharged whenever something of this nature is put in evidence through inadvertence. Equally, there is no sliding scale so as to increase the persuasive onus on a defendant seeking a discharge of a jury on this account according to the weight or length of the case or the stage it has reached when the point arises for determination. The test is always the same, whether to continue with the trial would or could, by reason of the admission of the unfairly prejudicial material, result in an unsafe conviction.”

57. The reference to Docherty is a reference to the decision of the English Court of Appeal in R v Docherty [1999] 1 Cr App R 274. Reliance is placed on Docherty in the submissions on behalf of the prosecution.

58. Those representing the defence also rely on Arthurton v R [2005] 1 WLR 949, [2004] 2 Cr App R 33, the defendant was charged with unlawful sexual intercourse with a girl under the age of 13. Under cross-examination the police officer who had interviewed the defendant disclosed the fact that the defendant had previously been “arrested and charged for a similar offence”. The defence applied for a discharge of the jury which application was refused. In summing up the judge gave a good character direction and told the jury that they must not consider that the defendant was once involved in a similar offence. The defendant was convicted. His conviction was quashed by the Privy Council.

59. Dame Sian Elias giving the advice of the Privy Council held[34]:

“28 A decision to discharge a jury is a matter of discretion for the trial judge. It falls to be exercised in the context of the trial, the flavour of which may not be readily recaptured on appeal. It will often be a difficult decision. Questions of fairness arise in relation to others, as well as to the accused. The judge in the present case was conscious that the case was a retrial, involving a young complainant. In many cases jury directions will sufficiently meet fears of prejudice through disclosure of irrelevant or insufficiently probative evidence. Whether there is unfairness turns on the context, including in particular the issues at trial. The decision whether or not to discharge a jury is one an appellate court will not interfere with lightly, as cases such as Weaver and Palin emphasise. Where the trial judge has not fallen into any error of principle, it is necessary for the appellate court to form the view that there has been unfairness which, if not corrected, would amount to a miscarriage of justice.”

60. The defence also rely on the curious decision in R v Dubarry (1977) 64 Cr App R 7. The appellant was charged on one indictment with possessing an offensive weapon. His trial proceeded in the normal manner and the jury retired to consider their verdict, the jury room adjoining the court. The jury were unable to reach a verdict after one and a half hours’ deliberation and one of the jurors went to the door of the jury room and opened it to have a note delivered to the trial judge. The trial of the appellant on another indictment was then in progress, the appellant being in the dock. The dock officer drew the judge’s attention to the fact that the juror might have seen the appellant and realised that he was facing another trial. The judge dismissed the incident as an unfortunate accident, and that due to the geography of the Court he could not have done anything about it. An appeal was instituted upon the basis that the judge ought to have discharged the jury. The English Court of Appeal (Stephenson LJ, Thompson & Milmo JJ) held that knowledge of the fact that the appellant was standing trial on another indictment could well have tipped the balance against him, bearing in mind the time the jury had spent deliberating both before and after the incident in a short and simple case. The case is possibly also significant because Milmo J observed that the judge may not have realised that he had a discretion to discharge the jury[35]. Milmo J observed:

“Had he done so, and had he said that he had done so, and allowed the trial to continue, this Court would not have interfered, but it has come to the conclusion that it would not be safe or satisfactory in all the circumstances to allow this conviction to stand. It is unsatisfactory because of the undoubted irregularity, it is unsafe because, had that irregularity not occurred, the jury might have come to a different conclusion.”

61. There are a multitude of other examples. The prosecution pointed to the case of R v Morry (1970) 1 CCC (2d) 498 in which a trial was adjourned and during the adjournment there was a newspaper report of the accused attempting suicide. In this case, counsel representing the accused did not even ask for a discharge of the jury. Counsel asked for a change of venue to somewhere else within the province of British Columbia. This was the subject of complaint on appeal. Small wonder the Court of Appeal for British Columbia rejected this complaint. Further, the prosecution referred the Court to R v Docherty (above) in which there was a vague reference to the accused possibly being of bad character.

62. The prosecution also referred to the decision of the Court of Final Appeal in HKSAR v Chan Ka Man (2008) 11 HKCFAR 614. In so doing, the prosecution readily conceded that the facts and circumstances of that case are a long way from the facts and circumstances which give rise to the issue in the present case. Indeed, in that case, counsel representing the accused had expressly wanted the jury to know that the trail underway was in fact a retrial. Counsel appearing for the appellant before the trial judge, said that his client wanted the jury to be informed that it was a retrial, that at the first trial there had been nine counts and the appellant had been found guilty of four and acquitted of five counts. (That is to be compared with the efforts made in the present trial to keep that very fact from the jury).

63. Lord Woolf NPJ, giving the judgment of the Court of Final Appeal observed[36]:

“Counsel for the appellant appeared to accept that if the jury were to be told about the acquittals, they would also have to be told about the findings of guilt and to have been told why those findings were set aside. I agree, otherwise, the situation would be very unfair to the prosecution and the victim. But absent an appropriate direction of the Judge, this additional knowledge could mislead them into being prejudiced against the appellant on the retrial.”

64. In short, Lord Woolf recognised the prejudice that an earlier conviction which was the subject of a retrial could engender. Perhaps wistfully, his Lordship recognised that information that a trial is a retrial and that the accused has been convicted were distractions from the task of the jury. Lord Woolf concluded[37]:

“My view, like that of the Court of Appeal, is that this is not a case where the appeal should be allowed. If there is a lesson to be learnt from this case, it is that trial Judges, unless there is a clear justification for taking a different course, should not allow material which is not relevant to go before a jury. The danger of allowing this to happen is that it will, without justification, make both the task of the jury and the task of the judge more difficult. It can divert the jury from their primary task of deciding whether the defendant is or is not guilty of the offences with which he is charged. An outcome that is to be avoided if possible.”

Permitted use of previous convictions and discreditable conduct

65. The law permits the use of previous convictions and discreditable conduct in criminal trials in three main circumstances:

(1)  previous convictions and other bad conduct might be admissible as circumstantial evidence to prove a charge in restricted circumstances – part of which is permitted by section 54(1)(f)(i)  of the Criminal Procedure Ordinance, Cap 221; and
(2)  as exception (ii)  and (iii)  to the prohibition in section 54(1)(f)  of the Criminal Procedure Ordinance to the effect that a person charged and called as a witness in pursuance of this section shall not be asked, and if asked shall not be required to answer, any question tending to show that he has committed or been convicted of or been charged with any offence other than that wherewith he is then charged, or is of bad character. Exception (ii)  is that the accused “… has personally or by his advocate asked questions of the witnesses for the prosecution with a view to establish his own good character, or has given evidence of his good character, or the nature or conduct of the defence is such as to involve imputations on the character of the prosecutor or the witnesses for the prosecution” and exception (iii)  is that the accused “has given evidence against any other person charged in the same proceedings”.
(3)  Where the crime occurs in prison and the accused is a prisoner. Almost invariably the fact that the accused is a prisoner would, of necessity, come out[38].

66. The first main exception is to use previous criminal convictions or bad conduct as circumstantial proof of the facts of the charge facing the accused. As a general rule, evidence of a criminal conduct or other bad conduct by the accused, other than the act, the subject of the charge that he faces, is inadmissible. The basis for this rule is that such evidence is usually both irrelevant and, even if relevant, unfairly prejudicial to the accused. The rule is one of considerable antiquity and was authoritatively articulated by the Privy Council in Makin v AG of New South Wales [1894] AC 57. The modern (and binding) iteration of the prohibition and the exceptions to it is found in the decision of the Court of Final Appeal in HKSAR v Zabed Ali (2003) 6 HKCFAR 192. As can be seen from the decision, the primary focus is on relevance to an issue in the case. Once it is determined that the conviction or other discreditable conduct is relevant then the prosecution has to demonstrate that relevance goes beyond mere propensity. As Li CJ pointed out[39]:

“whether its probative force in support of an allegation against the accused is sufficiently great to make it just to admit it, notwithstanding that it is prejudicial to the accused. It is only where the test is satisfied that the evidence would be ruled admissible as a matter of law.”

67. In Myers v R [2016] AC 314, the Privy Council revisited the rule upon the basis that the admission of such evidence could only be justified if the probative force of such evidence is sufficiently great to make it just to admit such evidence. In making this conclusion the Privy Council pithily observed:[40]

“41. Moreover, to respect the general rule, where such justification does exist the evidence which is admitted ought normally to be restricted to that which is within the justification. The justification is the measure of the admissibility. The existence of such justification does not generally create “open season” to adduce any evidence of the defendant’s bad character or misbehaviour.”

68. In short, the rule recognises the prejudicial impact of previous convictions and previous discreditable conduct. The authorities set a high barrier to admissibility. That barrier recognises the danger of the prejudice caused by the reception into evidence of such material.

69. The second major exception to the rule prohibiting the reception into evidence of previous convictions (a person charged and called as a witness in pursuance of this section shall not be asked, and if asked shall not be required to answer, any question tending to show that he has committed or been convicted of or been charged with any offence other than that wherewith he is then charged) is what is commonly referred to as the accused losing he is “shield” in the circumstances described in section 54(1)(f)(ii) and (iii). It is no understatement to say that over the years the application of the exception to the principle enunciated in section 54(1)(f) has at least the appearance of inconsistency. However, there is now a clear recognition in modern authority that a Court should not permit the revelation of a previous convictions where that is to the prejudice of the accused. No longer is the section considered permission for a simple tit for tat approach.

70. In R v Tam Chung Shing & Ors [1991] 1 HKLR 458, the Court of Appeal (Yang CJ, Silke VP & Power JA[41]) considered an appeal following a conviction of conspiracy to defraud. In the course of cross-examining, one of the prosecution witnesses, serious implications against the honesty and character of that witness were put and clearly, on any view, the exception in section 54(1)(f)(ii) was engaged. However, Silke VP recognised that the critical issue at trial for the appellant was credibility and indicated that while the provision was engaged, the proof of a conviction of one of the appellants which was very similar to the charts the subject of the indictment was highly prejudicial. Silke VP observed[42]:

“The question which a judge may well think it right to ask himself when such application is made is: Given the nature of the conviction will the putting of questions as to the character of an accused be fraught with results which immeasurably outweigh the result of questions put by the defence and which may make a fair trial of the accused almost impossible.”

71. Silke VP considered that the conviction proved against the appellant was such as to create such prejudice[43]. The Court of Appeal considered the prejudice to be so great as to compel the Court to interfere with the exercise of discretion by the trial judge to permit such cross-examination.

Knowledge on the part of the jury that the proceeding is a retrial

72. It is contended by those representing the accused that there is prejudice in the jury knowing that the present proceedings are a retrial. That topic was considered in HKSAR v Chan Huandai [2016] 2 HKLRD 384, 2 HKC 136. In that case, the appellant faced a charge of trafficking in dangerous drugs. He was convicted after trial before a jury. As a matter of history, the conviction under consideration by the Court of Appeal in that case was a conviction after a retrial. In the trial, the jury had been instructed by the trial judge not to conduct research on the Internet. In defiance of that instruction some members of the jury, possibly as many as 6 out of 7 jurors conducted some research and learned that the case that they were considering was in fact a retrial. This was discovered after the verdict and before the appeal. Accordingly, the trial judge was never asked by those representing the accused to discharge the jury. The Court of Appeal (Yeung V-P, Poon[44] & Pang JJA) allowed the appeal. In doing so the Court held[45]:

“On the evidence now before us, we are satisfied that two members of the Jury had acted contrary to the Judge’s express directions by doing their own research about the case on the Internet after empanelment and before verdict. And through the Internet search and disseminating the information so obtained, at least six members of the Jury came to know that the case was a retrial. They had thereby made available extraneous information for their deliberation. Since neither the parties nor the Judge was aware of the irregularity during trial and before the return of verdict, nothing could have been done to remedy it. Their conduct had rendered the trial unfair to the prejudice of the applicant. The verdict returned by the Jury is unsafe and must be set aside.”

73. A superficial analysis of the foregoing paragraph might suggest that what triggered the decision by the Court of Appeal was the defiance on the part of the jurors of the instruction not to conduct independent research. That suggestion has to be considered against the background that not only did the jurors have extraneous information for their deliberation but the very nature of the extraneous information was the fact that the trial was a retrial. The clear implication of what the Court of Appeal held he is that it was the specific information which caused the verdict to be unsafe upon the basis that the research by the jurors had rendered the trial unfair to the prejudice of the appellant.

74. The other point about this case is the fact that the trial judge only learned of this misconduct on the part of the jurors after they had rendered their verdict of guilty and the accused had been convicted. The judge considered himself (I respectfully consider that he did so correctly) functus officio. That carries with it the implication of what might have been the situation had the trial judge learned of the misconduct on the part of the jurors before they rendered their verdict. In other words, it might be argued that it would have been open to the judge to direct or admonish the jury to ignore the facts that they had learnt. In my opinion, it is just conceivable that such a direction might have succeeded but that is to rather missed the point of what the Court of Appeal said. They were, with respect, pretty firm on the proposition that a jury should not learn of the fact of a retrial having existed. Plainly, the fact that the case was a retrial implies that on an earlier occasion a tribunal (in all probability a jury) had made a finding that the appellant was guilty. In other words, 7 other people just like the jury learning of the same evidence had already come to the view that the appellant was guilty. That is the prejudice of knowing of the fact that the trial the subject of appeal was a retrial.

75. Of course, it is easy to speculate that the previous conviction resulting in the retrial might have been because of inadmissible evidence or because of misdirection by the judge or for any of the other myriad reasons that the bases for the Court of Appeal allowing an appeal by reference to section 83(1) of the Criminal Procedure Ordinance. However, in my opinion, such speculation which rather assumes a lawyerly knowledge of the intricacies of appellate law and procedure, rather misses the point of the potential prejudice caused the jury by knowing that a trial is a retrial.

Considerations relevant to the determination

Fundamental consideration: fair trial

76. The authorities demonstrate that in determining whether or not to discharge a jury when inadmissible and prejudicial material is heard by them, a number of issues need to be considered in exercising the discretion vested in the trial judge. The most fundamental and overriding concern is whether in the circumstances of the case a fair trial can be held. There are other considerations identified in the authorities which require consideration and may, to an extent, inform the overriding consideration.

The nature and impact of the prejudicial material

77. This is one of the most important considerations. In my opinion, the components of the prejudicial material should be viewed together. In this case, the jurors have learned that the accused had been tried before. Not only have they been tried before but on that trial, they were convicted. They would have readily inferred that another jury found the accused guilty on fundamentally the same facts on fundamentally the same issues as are faced by the accused in this trial. It would be essentially dishonest to try to say to the jury that they do not know what facts and issues arose in the first trial. As has already been noted, they heard previous testimony from the previous trial by way of cross-examination and had read to them the transcript of two witnesses. What they must have learned from this that the topics covered in cross-examination and in the statements were certainly essentially along the same lines as the present trial. That said, the topics covered in cross-examination and in the reading of transcripts by no means covered the whole of the field. In essence, the jury could readily conclude that 7 or 9 other fellow members of the community considered these accused to be guilty after a trial.

78. At the beginning of the trial when I delivered introductory remarks to the jurors, I warned them that they would hear often in the trial references to the burden and standard of proof. They heard it from the prosecution in opening. In the event that this case was to go to them for a verdict, they would be told of this in a summing up and doubtless in closing submissions by counsel for the parties. Accordingly, it would be no stretch of imagination for the jury to presently realise that the other jury must likely have applied the burden and standard of proof to come to their verdict.

79. In my judgment, the prejudice which arises from this revelation might be contrasted with the position where jurors learned of the fact that an accused person was or had been in jail and have been previously convicted. In such a situation, an assessment of the prejudice might depend on what the jurors learned of the nature of the conviction or convictions. Whilst I consider that the direction given in ETJ (No 2) by the trial judge that the accused could have been in prison for many things including non-payment of parking fines was, to put it politely, wishful thinking, this cannot be said in the present case. Further, it is unlike the cases where the jury learned of an accusation, even a serious accusation made against the accused. That was the implication of Dubarry because the jurors saw the accused in the dock of another court room and that was more explicit in Arthurton.

80. Finally, the jurors will have learned that the accused were sent to prison. Viewed as a separate and discrete topic, it would be hardly surprising on the facts that this present jury could think that prison was close to inevitable. It would not be necessary to have a finely tuned appreciation of the principles which govern how a person is to be sentenced following conviction for conspiracy to defraud to work that out. However, I do not consider it is appropriate to view this specific topic in isolation.

81. The impact of the material must also be viewed against the fact that earlier in these proceedings the jury were directed that it would be understandable that they might conclude there were previous proceedings, but that they should not speculate about the nature of those proceedings or the outcome of such proceedings. That direction was perfectly fine in its context and circumstances and it would be justified to conclude that the jury took this on board. Now the jury know that there is a whole lot more to what they were told. While I doubt that they would resent the notion that the Court told them only a part of the story and the critical part was kept from them, the fact is that now they know a prejudicially greater part of that story. I agree with the submissions of the prosecution that the jury must have worked out with or without a direction that this case has a history and that it was likely that there were proceedings. That well-trained lawyers could have worked out that there must have been a conviction and a retrial and that the law is that you cannot have a retrial without a conviction (because section 83E of the Criminal Procedure Ordinance says so) is not to the point. Jurors would be unlikely to appreciate this. Accordingly, in my judgment, the interplay between the earlier direction and the present revelation only adds marginally to the prejudice arising from what the jury learned.

How did the prejudicial to material go before the jury before the jury?

82. I have held that it was inadvertent. On no account could anyone have expected a barrister and solicitor of New Zealand to have said such a thing. Criminal proceedings in New Zealand are essentially conducted in the same manner and with the same values and constraints as criminal proceedings in Hong Kong. Frankly, I was shocked that this witness would come out with what he came out with. An inappropriate reaction by either the Court or counsel representing the parties could have made the position even worse than it is at the moment. I pay tribute to counsel, perhaps particularly prosecuting counsel, for the way in which the matter was handled.

Whether other directions or other events earlier in the trial might ameliorate or exacerbate the situation

83. Previously in the trial, at the request of, in particular, those representing the accused, I directed the jury that there had been earlier proceedings and that they should not speculate about what had happened to those proceedings. The reason for that was that those representing the accused wished to cross-examine witnesses on previous statements. Further, transcript of testimony of two witnesses was read out before the jury. Clearly that implied an earlier event. The highly-sensitive listener would have noticed references to “my Lady” when addressing the tribunal in the transcript that was read and the extremely alert might have concluded that there was an earlier proceeding similar to the one before the present court. That, in the end, probably is a minor matter. However, the more important point is that now the jury know what was deliberately kept from them. In my opinion, to an extent, that makes things worse. That said, while I consider this this point is relevant, it is by no means determinative.

Whether the impact of the prejudicial material can now be ameliorated by judicial intervention

84. This is taken together with an assessment of the nature and impact of what was said is in the light of the prejudice which, arises the critical issue. The prosecution contended that a simple, clear direction would solve the problem. Those representing the accused say that no direction, simple or clear is possible and that any direction at this stage would only make matters worse. Clearly, both sides accept that there has been at least some prejudice by the revelation of the matters identified a few paragraphs earlier. Directions to the jury either in summing up and possibly as soon as they reassemble to continue this trial is the only conceivable thing that could save the situation. This is the only conceivable remedy to ameliorate the prejudice which has been revealed and could conceivably lead to a fair trial.

85. It is in relation to this issue that the declarations of appellate courts, some of which have been noted earlier in this judgment, where it is said that the judges appreciation or “feel” of the case is most important.

86. It is no understatement to say that this is probably the issue in respect of which I have given the most anxious consideration. I reject out of hand the suggestion that a simple direction would do the trick. Perhaps, it is my appreciation of this jury but I consider that the information having been revealed, if I was to give a direction it would have to be one which respects the collective intelligence of this jury. Simply saying “please ignore this” would never be appropriate in this case. The trouble is that after the anxious consideration to which I have referred, I cannot conscientiously think of any direction which would be effective to ameliorate the prejudice. I cannot see how a jury, perhaps particularly this jury, could put out of their minds this specific collection of items of information which, has taken together amount to the prejudice which arises in the present case. It may be that effect of the prejudice would only arise if the jury or a significant number of jurors came to the view that on the evidence before them that they were not quite convinced but that the previous opinions of 7 or 9 members of the previous jury might push them towards a verdict of guilty. All of that is in the end about as complete a piece of speculation as can be imagined. I do not think that it is fair to the jury to expect them to put out of their minds the prejudice which has been engendered when considering their verdict.

Jurors likely to follow direction

87. There are a multitude of authorities which declare that when jurors receive a direction from a trial judge, they must be taken to have understood and accepted that direction[46]. That is a fundamental working truth under which our criminal justice system works in relation to trials on indictment before a jury. As a generality, that is clearly true. However, the authorities also demonstrate that there are sometimes occasions where the rulings of appellate courts on appeals against conviction do not support this conclusion. These happen where the Court of trial has permitted the trial to proceed notwithstanding the reception of prejudicial material upon the basis that an appropriate direction can cure the perceived harm. There are many examples of this in cases such as R v Docherty (above). There are cases on the other side of that equation such as Arthurton v R (above); R v Halliday (above). This approach is also seen in cases where the Court permitted previous convictions to be put to an accused after he had “lost his shield”. See in this regard R v Tam Chung Shing & Ors (above).

88. The basis on which appellate courts have intervened contrary to the general assumption that juries who receive a direction from the trial judge must be taken to have understood and accepted the direction is that on this specific topic the verdict of the jury was unsafe and unsatisfactory. It is not correct to say as the prosecution submitted, that there is only intervention in obvious cases. Certainly, in cases such as Arthurton v R and R v Halliday that could fairly be said. It could not necessarily be said in relation to, for example, HKSAR v Chan Huandai (That said, nothing should be implied from these reasons that I disagree with the reasoning in Chan Huandai (above). Quite the opposite. The point I am making is that it does not have the same degree of blatant obviousness as the previous two cases mentioned.)

Length of the trial and the stage at which the material was placed before the jury

89. The issue arose on Day 57 of a complex trial alleging serious commercial dishonesty. The prosecution case was very close to finishing. On any view, the community has expended substantial resources on presenting this case and a substantial quantity of judicial time has been taken up in hearing the matter. It was contended by the defence that the time at which the prejudicial material was received is irrelevant. It was argued that had this prejudicial material been received at an early stage of these proceedings that the Court would not have hesitated to discharge the jury. I agree with that.

90. It does not wholly follow that the stage at which the material was received is completely irrelevant. If the time that it was received is early in the proceedings, then little is lost by discharging at that stage. It would be a dangerous thing indeed to continue on for days, weeks and perhaps months taking the risk that the exercise of discretion by the trial judge would pass muster on appeal in the event of a conviction. In the purest sense, the right to a fair trial trumps all and, on that premise, the fact that this occurred on Day 57 should be irrelevant. As Ms Draycott, SC correctly observed, in days past, trials rarely lasted more than 3 or 4 days and that may inform how judges dealt with the reception of prejudicial evidence. In the end, the primacy of the right to a fair trial does, in effect, trump issues of the time taken, the judicial resources taken up, the community resources taken up and the effort and cost expended by an accused person must ultimately give way to this fundamental right. In truth, what it has done is make me pause longer than perhaps I might otherwise have done before coming to the conclusion that I have.

The costs of the proceeding including, but not limited to the cost to the community of staging the case and the cost of defending that case.

91. In my opinion, this is largely bound up with the issues in the preceding paragraph and adds nothing to the consideration.

The issues in the trial

92. This is a complex commercial crime case involving allegations of conspiracy to defraud the shareholders of a listed company and that company and the regulators who have responsibility for managing the market in which listed companies conduct themselves. There are issues of credibility in determining whether or not the jury accept as true the testimony of some of the principal prosecution witnesses. For reasons I have earlier articulated, one of the issues in the trial concerns whether a payment to the 2^nd Accused and, arguably in turn to the 1^st Accused was lawfully made by the listed company. In relation to one of the main witnesses, Ms Katherine Chan, the prejudicial material almost certainly has no impact on her credibility. In relation to Mr Yip Kean Mun, his credibility might be affected by how the evidence as to the payment in question plays out. Part of the reason for this is that one of the critical emails which is said by those representing the accused to represent authority to make the impugned payment was copied to Mr Yip. That is important because he was chairman of the board of directors of the listed company at the time that the payment was made.

93. It is conceivable that there would be issues of credibility in many of the other aspects of this payment including the credibility of the witness who was the source of the prejudicial material, Mr Kerry Knight. As presently advised – his testimony has not concluded, I think it is at least on the cards that there might be issues as to the credibility his testimony about the impugned transaction. Part of the reason he says that he referred to the prejudicial material was to explain that he considered that there was no necessity to retain certain documentary records in relation to the transaction. It takes little imagination to see how it will be at least tricky for the defence to navigate that issue in case Mr Knight’s credibility has put in issue: please believe Mr Knight as to the reason he gives for not retaining the records of the solicitor’s firm, that is, because the accused had already been convicted of the charge which they presently face and there was no reason to retain the documents anymore. I say nothing of the challenges that summing up on this issue might present. Initially, I must confess that I did not see this as a very important issue. On careful reflection, I could foresee serious difficulties in navigating through this topic without adding to the prejudice which is already there.

Where the prejudicial material came from

94. There are cases where the source of the information could have an impact on the response of the Court to the prejudicial information. For example, if the material was deliberately elicited from a prosecution witness, there are authorities which would suggest that discharge is virtually automatic. Where the evidence comes from a prosecution witness but the answer was non-responsive (as in the present case) then the situation is clearly more subtle. There have been a number of cases where the evidence came from a non-responsive answer from a defence witness. This is bound up with the issue of fault. In my judgment, this is irrelevant to the present issue.

The relative strength of the prosecution and defence cases.

95. As I consider this to be irrelevant to the present case and it is at least possible that there will be a further trial, the less I say about this the better. Further, I am aware that the accused intend to make a no case to answer submission which includes submissions as to the law which should be applied to this case which would, if the submission succeeded, be damaging if not destructive to the prosecution case. Those submissions have not been formally made although I am generally aware of the nature of them. Perhaps, the appropriate thing to say is that absent those submissions case for the prosecution is a strong but not necessarily overwhelming case. It is, in the present circumstances largely irrelevant because of the specific content and circumstances of the prejudicial material under consideration in the present case.

Whether the receipt of the prejudicial information might prejudice the weight that a good character direction might otherwise have

96. It was contended by those representing the accused that the prejudicial information would prejudice any meaningful character direction. That rather assumes that there would be such a direction. The only conceivable candidates for such a direction would be the 1^stAccused and the 3^rd Accused. In the first trial, Anthea Pang J declined to give such a direction. I can readily understand the reasons why she chose that approach. I had not, myself, decided what approach I would take. I do not think that in the present circumstances this argument makes the case for the accused as to discharge any stronger.

Whether there was any relevant objection to the reception of the prejudicial material

97. For reasons I have already articulated, the absence of an objection at the time that the prejudicial material came out is irrelevant. There are cases where the absence of an objection could conceivably be relevant. Going slightly further, there are cases where those representing the accused positively wished the fact of a retrial and its sequalae to go before the jury. There is also one case where the history of drug convictions of a person charged with trafficking in a dangerous drug came out in the trial and very experienced counsel rather than apply for a discharge sought to make use of that material (the accused may have committed other offences but not this one) before the jury.

Whether counsel representing the accused could make sensible closing submissions without making the matter worse

98. In my opinion, the answer is that it would be at least difficult. I have already addressed this in another context. In my opinion, it is relevant to the decision I have to make but by no means decisive.

Conclusion

99. In my opinion, there can only be one conclusion in this case. The prejudice is substantial. My obligation is to accord to the accused a fair trial and the only way that I could do so in the circumstances would be to cure the prejudice by direction. After careful and anxious consideration, I conclude that that would not be possible. I think that it would be unfair to ask a jury to put out of their minds the information they received which was prejudicial to the accused. For the reasons I have earlier outlined, I will discharge the jury when next they are assembled.

100. This ruling and its content are not to be reported for one month from the date of delivering this ruling unless either party seek for extension to that order.

	(Andrew Bruce, SC)
	Deputy High Court Judge

Ms Charlotte Draycott SC, leading Mr Mitchell Neil S, Mr Li Chun Ngai Martin, Counsel on fiat and Miss Ng Oi-lam Joycelyn SPP of the Department of Justice, for HKSAR

Mr Tim Owen QC leading Mr Tsoi Y M Benson, instructed by Boase Cohen & Collins, for the 1^st Accused

Mr Ian Winter QC leading Mr Cao Yuan Shan and Ms Betty Chiu, instructed by Haldanes, for the 2^nd Accused

Mr David A S Khosa, instructed by Hobson & Ma, for the 3^rd Accused

[1] HKSAR v Chen Keen (陳克恩) (2019) 22 HKCFAR 248, [2019] HKCFA 32. This oversimplifies the basis for decision of the Court of Final Appeal.

[2] HKSAR v Chen Keen & Ors HCCC 309/2019, [2021] HKCFI 1428, dated 26 May 2021 (restricted).

[3] Transcript, Day 5, page 52, 53 (prosecution opening).

[4] My own planning for summing up this area in this trial involved extensive plagiarism of Anthea Pang J’s summing up suitably modified for the issues which had arisen in this trial.

[5] Transcript, Day 57, page 63, lines 12-18.

[6] Transcript, Day 57, page 64, lines 20-25.

[7] Transcript, Day 57, page 100, lines 21-25 and page 101, lines 1-2.

[8] This was a reference to the Serious Fraud Office of New Zealand.

[9] Transcript, Day 57, page 118, lines 3-10.

[10] Transcript, Day 10, pages 12-14.

[11] Opening Remarks, Transcript, Day 3, page 13.

[12] Defence written submissions, §8.

[13] Defence written submissions, §8.

[14] Defence written submissions, §9.

[15] Defence written submissions, §10.

[16] Prosecution Submissions, §15.

[17] [2010] 3 HKC 318, §19.

[18] Prosecution Submissions, §21.

[19] See also Article 14 of the International Covenant on Civil and Political Rights (incorporated by reference into the Basic Law – Article 39) and Articles 10 & 11 of the Hong Kong Bill of Rights Ordinance, Cap 383.

[20] [2002] 1 WLR 2237, §10.

[21] [2002] 1 WLR 2237, §28.

[22] The issue in Lee Ming Tee was whether a stay of proceedings should be imposed.

[23] See, for example Imran Aslam v R [2011] EWCA Crim 2797, §57.

[24] [1968] 1 QB 353, 359.

[25] (1935) 25 Cr App R 125, 129.

[26] [1965] VR 469, 472.

[27] [1965] VR 469, 473.

[28] (1996) 186 CLR 427, 440. The fairness of the trial as a critical criterion for determining whether or not to discharge the jury in circumstances such as those presented in Crofts may also be seen in the decision of the New South Wales Court of Criminal Appeal (Beazley P, R A Hulme J, R S Hulme AJ) in Younan v R [2016] NSWCCA 248, 316 FLR 122. See the extensive citation of authority at §32-40 as to the importance in making the decision as to the fairness of the trial.

[29] (1975) 11 SASR 182, 185.

[30] (1975) 11 SASR 182, 185.

[31] (1975) 11 SASR 182, 186.

[32] (1975) 11 SASR 182, 187.

[33] [2007] 1 Cr App R 20, §64-65.

[34] [2005] 1 WLR 949, §28.

[35] (1977) 64 Cr App R 7, 10-11.

[36] (2008) 11 HKCFAR 614, §17.

[37] (2008) 11 HKCFAR 614, §19.

[38] Martin v R [2015] ACTCA 38.

[39] (2003) 6 HKCFAR 192, §23.

[40] [2016] AC 314, §41.

[41] As Sir Noel Power NPJ then was.

[42] [1991] 1 HKLR 458, 469 D-E.

[43] The conviction in question was also for conspiracy to defraud. The appeal was allowed (R v Tam Chung Shing & Ors [1990] 1 HKLR 718). For those versed in Hong Kong lore, the decision at [1990] 1 HKLR 718 was known as the “sleeping juror” case.

[44] As Poon CJHC then was.

[45] [2016] 2 HKLRD 384, 2 HKC 136, §43.

[46] The authorities on this topic are legion. They include: R v Tam lp Cheung & Ors Cr App CA 360/90; R v Tang Wai Ming & Ors Cr App CA 151/88; Montgomery v HM Advocate [2003] 1 AC 641, 647B; R v Corbett [1988] 1 SCR 670; R v Glennon [1992] HCA 16, (1992) 173 CLR 592; Z v Director of Public Prosecutions [1994] 2 IR 476; Gilbert v R (2000) 201 CLR 414, §[13] & [31]; HKSAR v Kissel [2014] 1 HKLRD 460, §115; Dupas v R [2010] HCA 20, (2010) 241 CLR 237, §[28]-[29]; HKSAR v Chau Yui Ming[2018] HKCA 569 (CACC 441/2015); R v Allan (2002) 133 A Crim R 444; OKS v Western Australia [2019] HCA 10, 265 CLR 268, 276 A Crim R 530, 93 ALJR 438, 364 ALR 573.

HCCC 309/2019

[2021] HKCFI 304

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

__________________

BETWEEN
	HKSAR	1^st Accused
	and
	CHEN KEEN (alias JACK CHEN) HAO MAY (formerly known as WANG MAY YAN) (alias MAY WANG)	2^nd Accused
	YEE WENJIE (also known as YU WENJIE) (alias ERIC YEE)	3^rd Accused

__________________

Before: Deputy High Court Judge Bruce SC in Chambers

Date of Hearing: 19 January 2021

Date of Ruling: 4 February 2021

_____________

LIVE CCTV LINK−VIDEO RECORDING: RULING

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Introduction

1. The prosecution seeks to adduce the testimony of a number of witnesses outside of Hong Kong. At the time of writing, there are 3 such witnesses in New Zealand and 1 in Singapore. There may be others. What the prosecution wishes to do is adduce this evidence under the auspices of Part IIIB of the Criminal Procedure Ordinance, Cap 221. Part IIIB provides for Taking Evidence from Witnesses outside Hong Kong by Live Television Link.

2. The accused do not oppose such witnesses giving evidence under the auspices of Part IIIB. None of the bases for refusing such an application under section 79I(2) exist. Part IIIB Ordinarily, Rule 3(2) of the Live Television Link (Witnesses outside Hong Kong) Rules, Cap 221L require that the application to present the testimony of a witness under the provisions of Part IIIB should be made within 42 days of committal. For reasons which it is not necessary to recite, we are a long way past that date. The accused do not oppose an extension of time under Rule 8 of the Rules. It is appropriate to grant such an extension and to give permission for the witnesses nominated by the prosecution in their application to give evidence by way of live television link.

3. There is one further feature of the prosecution request for the giving of evidence by way of live television link in this case. The prosecution wishes to video record the examination, cross-examination and, where appropriate, re-examination of such witnesses in the absence of the jury. Such examination would be in the presence of the accused. The prosecution then wishes to play the video thus recorded to the jury as the testimony of those witnesses. The basis for this application is that this is a far more convenient course for the jury given that New Zealand is 5 hours ahead of Hong Kong time. The prosecution submits that to get in a reasonable day’s examination of the New Zealand witnesses, the jury would need to get up very early in the morning in order to hear the evidence. Obviously, that is not the position for Singapore but that does not diminish the issue raised by the prosecution.

4. Such a course would be much more convenient for the jury. However, those representing the accused raised the principled objection that such a course is not permissible under Part IIIB of the Ordinance. In essence, the contention of the accused is that the presentation of video recorded testimony is not permitted under the laws of evidence and procedure unless there is statutory authority for such a course.

Contentions of the parties

Prosecution

5. The contentions of the prosecution come from two sources. The first is the oral presentation of the prosecutor. The second comes from a written document from the prosecution team which essentially replicates - albeit with some refinements - what was submitted orally.

6. The prosecution contends that video recording witnesses in New Zealand has a number of advantages:

(1) such a procedure enables the Court to sit hours to suit the New Zealand witnesses and if necessary tailor the usual breaks to their convenience;
(2) this course enables objections to be edited out of the recording so that the jury does not have to wait whilst argument takes place; and
(3) it enables the New Zealand witnesses to be told well in advance of exactly when they will be needed so as to make the best use of their time.

7. The prosecution makes the point that significant inconvenience to the jury might be caused if, for example, the witnesses were in the United States of America. It is contended that “a jury could not be expected to stay up overnight to hear witnesses”.

8. The prosecution contended that the video recording of the evidence would make no different to the nature and quality of the evidence that the jury hears.

9. The prosecution also contend that the Court is empowered to make an order permitting the video recording of the New Zealand witnesses through the power vested in the Court under section 79I to impose conditions on the grant of permission to take evidence under Part IIIB.

10. Further, it is contended that if section 79I does not permit a Court to impose such conditions as would permit the video recording of the testimony of the New Zealand witnesses, the Live Television Link (Witnesses outside Hong Kong) Rules could be amended by the Chief Judge of the High Court to permit such a course. Section 79L permits the Chief Judge to make rules or to give directions. Finally, it was suggested that it was open to the Court to permit such a course under the inherent power of the Court.

11. Finally, the prosecution contends that the reliance on R v Reynolds [1950] 1 KB 606 by those representing the accused is inapplicable to the present situation. It is contended that this was decided at a time when the video recording of testimony could not be undertaken.

Defence

12. The essential contention of those representing the accused is that nowhere in Part IIIB is there any provision which expressly or impliedly permits the recording of testimony in the manner proposed by the prosecution. It is contended that it would be necessary for express statutory authority to exist to permit such a course. Those representing the accused point to the provisions in Part IIIA of the Criminal Procedure Ordinance as a case in point where such a course of permitted. Part IIIA deals with Special Procedures for Vulnerable Witnesses.

13. Under Part IIIA, there is an explicit provision for the video recording of the victims of certain sexual crimes. Section 79C permits a video recording a person who is said to be the victim in cases of serious sexual misconduct to be given in evidence with the permission of the Court in criminal proceedings. Those representing the accused make the point that where the Court gives permission for the video recording to be presented it is to stand as the examination-in-chief of that person and the person who gave the recording is still to be the subject of cross-examination.

14. It is contended that there is no other provision permitting video recorded testimony of a witness to be received in evidence.

15. Those representing the accused in this case contended that if these arguments are correct, then it would not be open to this Court to permit such a course by imposing conditions under section 79I(1) of the Ordinance. Further, it would not be open to amend the Live Television Link (Witnesses outside Hong Kong) Rules to permit the course proposed by the prosecution. It is contended that the making of such rule would be outside the scope of the power granted by the Ordinance under section 79L to make rules or to give directions. It is contended that such rules or directions could only facilitate the carrying into operation of the Ordinance as enacted rather than to expand the nature of the enactment.

16. It is also contended that what underlies the decision in R v Reynolds (above) is that the testimony of a witness germane to a fact in issue must be given in open court in the presence of the jury.

Analysis

17. There can be no doubt that the video recording of the testimony of witnesses who are outside Hong Kong and the presentation of that recording as the testimony of that witness before a jury could, in many circumstances, be of substantial advantage. That is particularly so where there is a substantial time difference between the place from which the witness proposes to testify and Hong Kong. The advantages in favour of such a course contended for by the prosecution appear to me to be powerful.

18. The real issue is whether the laws of evidence and procedure in Hong Kong permit such a course. Evidence could not be taken by live video link from another place outside Hong Kong unless such a course was permitted by statute: R v Diane [2010] 2 Cr App R 1, §13. Part IIIB of the Criminal Procedure Ordinance permits such a course provided it is done in accordance with the provisions contained in that Part. The question for consideration is whether it would be open to video record testimony given under Part IIIB and present to the jury not the evidence given by way of live television link but the video recording of that exercise.

19. The underlying principle which governs the reception of testimony in relation to a fact in issue is that it must be done in open court, unless there is a clearly recognised exception to the adoption of such a course. That, so it seems to me is the underlying rationale of R v Reynolds (above). The facts in that case can be taken from the headnote and are as follows:

“At the trial of the appellant on a charge of indecently assaulting a girl eleven years of age a discussion took place between the [trial judge] and counsel as to the child's capacity to give evidence on oath. During the discussion, by direction of the [trial judge], the jury left the court. In their absence, a school-attendance officer was called as a witness and gave evidence as to the class of school attended by the child, the quality of the home from which she came and her standard of education. After the witness had been examined and cross-examined the jury returned to court, and the child was sworn as a witness and gave evidence on oath.”

20. On appeal, the Court of Criminal Appeal of England (Lord Goddard CJ, Byrne & Morris JJ) held that such a procedure was irregular. Lord Goddard CJ held:

“… the evidence of the child must be given in the presence of the jury was that, although the duty of deciding whether the child may be sworn or not lies on the judge and is not a matter for the jury, it is most important that the jury should hear the answers which the child gives and see the demeanour of the child when she is questioned, because it will enable the jury to come to a conclusion as to the weight which they should attach to her evidence. If that was the reason why the court in Rex v Dunne [(1930) 21 Cr App R 176] held that it was essential that the evidence should be given in the presence of the jury, in this case that is so a fortiori, it seems to me, when a witness is called to assist the court by telling it what his experience may be of the child and of the character or impression that he may have formed of the child. The jury would then have all the facts before them with regard to the child’s truthfulness, or reputation for truthfulness, and all the information which could be given on the question whether the child was one who would be likely to tell the truth and on whose evidence they could rely.”

21. The judgment of Lord Goddard CJ then recites the underlying principle as follows:

“I may say - and I am sure that I do so with the concurrence of my brethren - that it should be regarded as most exceptional that any evidence should be given in a criminal trial otherwise than in the presence of the jury.”

22. It is also instructive to look at the brief report of R v Dunne (1930) 21 Cr App R 176. Apparently, in an issue of the competence of a child witness the Court of Criminal Appeal (Lord Hewart, CJ Avory & Talbot JJ) held that the trial judge should not take the child out of court and examine that child in order to determine the competence of the witness. The report of the decision is very brief and does not include any reasoning, but appears to have been a matter so obvious as to not require discussion that the procedure was so irregular that the conviction or to be quashed. The decision was followed in R v Reynolds (above). Both Reynolds and Dunne were in turn followed in R v David (1992) 95 Cr App R 256 in the Court of Appeal (Watkins LJ, MacPherson & Judge JJ).

23. Plainly, recorded evidence - including video recorded evidence - of events is a common feature of Hong Kong courts.

24. It is to be seen in video recordings of admissions against interest. Those are admissible upon the basis of being an exception to the rule against hearsay. There is no statutory provision for such a course, but the exception to the hearsay rule, which permits the reception into evidence of admissions and confessions has been established for many hundreds of years.

25. Section 79C of the Criminal Procedure Ordinance permits evidence to be video recorded. It identifies the class of persons who may be recorded and the class of persons who may do the recording. If such a recording is made it can, with the permission of the Court, stand as the evidence-in-chief of the person recorded. Section 79C is to be found in the context of Part IIIA of the Ordinance, which is concerned with the presentation of the evidence of those who are said to be the victim of certain sexual offences, the vulnerable, the mentally handicapped. Part IIIA represents a recognition of the special difficulties of persons who are within these categories giving evidence. It is to be noted that section 79C which permits video recording but does not permit it for the entire class of persons covered under Part IIIA but only a limited class. Even if video recorded evidence taken under this section was to be permitted by the Court, it may only be so permitted if the accused is permitted to cross-examine the witness. That can, of course, be done by live television link - which is permitted under Part IIIA. There are cogent policy reasons for the various forms of presentation of evidence of the class of persons covered by Part IIIA. There are cogent policy reasons for permitting the video recorded out-of-court testimony of a person who comes within the scope of section 79C.

26. The policy which underlies the enactment of Part IIIB is to facilitate the taking of evidence from a witness in criminal proceedings where for good reason that witness cannot come to Hong Kong. The ability to use technology to receive such evidence has the potential to enhance the ability of a Court of Hong Kong exercising criminal jurisdiction to do justice according to law.

27. Further, those representing the defence contended that it is no accident that the legislation in Part IIIB deals with a “live” television link. It is contended that this is to be distinguished from the language which describes the process in Part IIIA. I agree with this proposition although I am not sure it is necessarily decisive. More persuasive is the argument that if the legislature had wanted video recording to be a feature of Part IIIB it could easily have said so. I accept the argument that it cannot properly be said that the legislature overlooked such a course.

28. There are other statutory provisions in our law which permit recorded assertions of persons to stand as their evidence in criminal proceedings. An obvious example of that is a statement tendered under section 65B of the Criminal Procedure Ordinance. While that is not video recorded and must be a statement in writing, if a statement complies with the preconditions articulated in section 65B, and read in open court, it is taken as the evidence of the person who made the statement. There are provisions for cross-examination. If a party sought to tender the statement of a person in the absence of section 65B, even if such a statement happened to have all the characteristics required under section 65B, it would be inadmissible hearsay. That is because such a statement which is made outside Court would be tendered for the purpose of establishing the truth of what is asserted in the statement and is, thus, the purest hearsay. Hence, the necessity for the statutory provision. Strictly speaking, if a party to criminal proceedings recorded a video assertion of a person and wished to tender it as the testimony of a person, it would also be inadmissible hearsay. That is what underlies the decision of the English Court of Appeal in R v Diane (above). That would be true whether the person who was video recorded was in Hong Kong or elsewhere. Indeed, that would be true in relation to the presentation of an out-of-court recording of a person in the absence of section 79C, even if as a matter of fact the person being recorded and the person conducting the recording complied in every respect with the requirements in section 79C.

29. Of course, video recordings of events which occur outside Court can be tendered as a species of real evidence. That happens in Hong Kong with increasing frequency. A recent example of that is to be seen in HKSAR v Wong Cho Shing & Ors [2019] 4 HKC 401, [2019] HKCA 839. In that decision, the Court of Appeal restated and articulated the conditions for admissibility of such evidence. These principles also apply to audio recording (see, for example, R v Maqsud Ali [1966] 1 QB 688; Butera v DPP (1987) 164 CLR 180, 30 A Crim R 417). However, such recordings are concerned with a recording of the event, which is the subject of the charge or, is relevantly connected to the charge. It is not a recording which can be used testimonially.

30. Part IIIA of the Criminal Procedure Ordinance in provisions other that section 79C also permits witnesses within the classes specified in that Part to testify by way of closed-circuit television.

31. As to the inherent (or implied) power of the Court, it is impossible to define the full scope of this power. In R v Moke & Lawrence [1996] 1 NZLR 263, the New Zealand Court of Appeal was faced with a case where the accused, who were the parents of the victims, were convicted of abuse of their children which was not of a sexual nature. The amendments to the New Zealand law at the time of that decision were the approximate equivalent of Part IIIA and permitted children to give evidence by way of closed-circuit television, but did not cover the kind of offences which were the subject of the charges of which the accused were convicted in the Moke & Lawrence case. On appeal, the complaint was that the trial judge was wrong to permit the use of closed-circuit television in such circumstances. The Court of Appeal (Cooke P, McKay & Thomas JJ) held that there could be no objection to a Court exercising its inherent power to permit testimony by way of closed-circuit television where the conduct and the victims and the concern which underlay the use of closed-circuit television was closely analogous to the existing legislation. Giving the judgement of the Court, Thomas J observed:

“Indeed, it is both unwise and unnecessary to seek to define the scope of the Court's inherent jurisdiction. Broad principles governing its exercise is all that is required. The Court may invoke its inherent jurisdiction whenever the justice of the case so demands. It is a power which may be exercised even in respect of matters which are regulated by statute or by rules of Court providing, of course, that the exercise of the power does not contravene any statutory provision. The need to do justice is paramount.”

32. Thomas J considered the case of R v Accused (CA32/91) [1992] 1 NZLR 257; (1991) 7 CRNZ 230 and observed:

“The question in this case is whether the inherent jurisdiction should be exercised to admit evidential videotapes in circumstances which are parallel to those contemplated by Parliament in the Evidence Amendment Act and which would seemingly promote the very objective which Parliament had in mind in enacting that legislation. There is in this case no suggestion that the Court would be substituting another regime for a regime which Parliament had made dependent on the making of regulations (see Richardson J at p 267 [; p 241]), or that there is a statute which deals with the subject-matter of the evidence in issue (see Casey J at p 270 [; p 242]), or that the Court would be assuming a power that is not conferred upon it under a statute (because the regulation under it was not in force) and therefore lacked jurisdiction (see Hardie Boys J at p 272 [; p 246]). With respect to [counsel for the appellant], this Court need not feel constrained by that decision in exercising its inherent jurisdiction in this case if it is otherwise appropriate to do so.”

33. A decision of a Court which comprises Cooke P (as Lord Cooke of Thorndon then was) merits careful examination. The underlying rationale of such legislation as was under consideration in R v Moke & Lawrence is, as a statement of the charge below quoted by Thomas J put it:

“The purpose behind this exception [evidence by way of a videotaped interview] to long-established principles is the desire of the Courts and the community to minimise the stress to young complainants in having to repeat their allegations in public and in particular before a jury comprised of total strangers. It has been recognized that if the allegations are true the child has already suffered. That suffering should not have to be made worse in order that the wrongdoer be brought to justice. In such cases the accused’s right to a fair trial is seen as being preserved by requiring the interview to conform with certain strict rules and having the complainant available for cross-examination either in the courtroom but screened from the accused or by the use of closed-circuit television during which the child can be seen by the jury and the Court but does not have to see more than the Judge and the counsel. Whether or not an accused feels that his right to confront his accuser is diminished by the procedure, Parliament in the wider interests of justice has seen fit to restrict that right and no-one can now complain. But whether that right should be further abrogated in the interests of young complainants generally or the pursuit of justice is a matter that must exercise the minds of the Courts and must not be treated lightly.”

34. In my opinion, that was the context and content of the analogy that the Court of Appeal of New Zealand saw between what was actually done in the case, the subject of appeal and the legislation. Further, while nobody would dispute that adopting the course proposed by the prosecution in the instant case would promote convenience, the analogy between what is proposed and the course permitted in section 79C of the Criminal Procedure Ordinance and the policy reasons for it is not close. Convenience might well be a factor under section 79C, but it is a long way down the scale of important reasons for the enactment of that section. Accordingly, the invocation of the inherent jurisdiction of this Court does not assist the argument of the prosecution.

35. In my opinion, in order for the evidence of the overseas witnesses nominated by the prosecution to be admissible, the evidence must be presented by, as Part IIIB declares by “live” television link. It follows that it would not be open to a Court to impose conditions on the reception of that evidence, which had the effect of enlarging the scope of the presentation of that evidence by way of video recording it and presenting such recording to the jury as the evidence. Rule 6 of the Live Television Link (Witnesses outside Hong Kong) Rules gives examples of the kinds of things which might be conditions imposed by the Court. It is not open to a Court to impose conditions on the exercise of a discretion, which have the effect of enlarging the jurisdiction of the Court.

36. In my opinion, that is also true in relation to the concept of the Chief Judge of the High Court amending the rules to permit such a procedure. That power comes from section 79L of the Criminal Procedure Ordinance. Further, rules made by the Chief Judge of the High Court are subsidiary legislation within the meaning of the Interpretation and General Clauses Ordinance, Cap 1 (see section 3). As such, any amendment to the rules would have to go through the procedure prescribed by section 34, which might not produce the required speed. The Chief Judge can also give directions under section 79L. Those appear as Practice Direction 9.9.

Determination

37. For these reasons, although I perfectly recognise the convenience of the course proposed by the prosecution, I decline to accede to that proposal. I would, nevertheless, direct that the evidence taken pursuant to Part IIIB in this case be video recorded, but simply for the purpose of preserving the record of the Court.

38. I also recognise that it would be undesirable to have the evidence taken by live video link be interrupted by objections taken by counsel for one or other party during the examination of these witnesses. Of course, objections do arise which are unforeseen. Those cannot be helped. However, to the extent that an objection to the testimony of these witnesses can be foreseen, I direct that the party that wishes to take such an objection notify the Court and the other parties 3 clear days before the witness gives his or her evidence by live television link.

(Andrew Bruce, SC)
Deputy High Court Judge

Ms Charlotte Draycott SC, on fiat and Miss Ng Oi-lam Joycelyn SPP of the Department of Justice, for HKSAR

Mr Tim Owen QC leading Mr Tsoi Y M Benson, instructed by Boase Cohen & Collins, for the 1^st accused

Mr Cao Yuan-shan and Ms Chiu Betty instructed by Haldanes, for the 2^nd accused

Mr David A S Khosa, instructed by Hobson & Ma, for the 3^rd accused

HCCC 309/2019

[2020] HKCFI 3013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

__________________

BETWEEN

	HKSAR
and
	CHEN KEEN (alias JACK CHEN)	1st Accused
	HAO MAY (formerly known as WANG MAY YAN) (alias MAY WANG)	2nd Accused
	YEE WENJIE (also known as YU WENJIE) (alias ERIC YEE)	3rd Accused

__________________

Before: Deputy High Court Judge Bruce SC in Chambers

Dates of Hearing: 17 and 24 August 2020

Date of Ruling: 2 December 2020

_______________________________________________

APPLICATION FOR RECUSAL: RULING

_______________________________________________

INTRODUCTION

1. Chen Keen, Hao May and Yee Wenjye, D1, D2 and D3 respectively, face charges of conspiracy and money laundering.

2. A trial is scheduled to commence in mid-January 2021 and is expected to last something of the order of 6 months. I have been assigned to be the trial judge of this proceeding.

3. On 17 August, 2020, the prosecution applied for me to recuse myself. The grounds upon which that application was made are articulated in a little more detail later on in these reasons, but essentially it is that I represented Wu Wing Kit on a charge of what is colloquially called money laundering in the District Court. He was, at material times, the solicitor of D1 and D2 and, so the prosecution contends, must have been aware of their dishonest dealing in pursuance of the conspiracy.

4. Counsel for each of the accused in the present case submitted that the prosecution has not made out its case and that the application for recusal be dismissed.

5. Both sides agree that as the trial is a large one and involves, on both sides, the deployment of considerable resources, a decision on this application is needed quickly.

PROCEDURAL HISTORY

The trial of Wu Wing Kit

6. Wu Wing Kit faced a charge of what is colloquially called money laundering, contrary to section 25 of the Organised and Serious Crimes Ordinance, Cap. 455. He was tried before a judge of the District Court and convicted. I represented him at that trial.[1] I had no part in his representation prior to the commencement of the trial before the District Court and, following his conviction. Other counsel represented him on appeal to the Court of Appeal and the retrial that was ordered. The charge faced by Wu Wing Kit was that:

“…between 11th day of March 2010 and the 12th day of March 2010 … knowing or having reasonable grounds to believe that property, namely a chose in action in the sum of $68,950,000 Hong Kong currency, being a credit balance in the account numbered … maintained with the Hongkong and Shanghai Banking Corporation Ltd in the name of Fred Kan & Co Client Account, in whole or in part, directly or indirectly, represented the proceeds of an indictable offence, dealt with the said property.”

7. A useful Summary of the Facts and circumstances of the trial of Wu Wing Kit, which I conducted, appears in the judgment of the Court of Appeal on his appeal against conviction.[2] I have not included in the summary references to the case of Ye Fang.

8. The summary of the Court of Appeal of the facts and circumstances of the case at trial is as follows:[3]

“The trial
The 1st, 2nd appellants and Jack Chen
11. Jack Chen was the husband of the 2nd appellant and had been a client of the 1st appellant11 since 2005.
462
12. Jack Chen was the executive director and joint chairman of China Jin Hui Mining Corp Ltd (CJHM), later renamed Natural Dairy (NZ) Holdings Ltd (NDNZ), a publicly listed company in Hong Kong. At trial, it was referred to by its stock code number, namely 462, which reference is used in this judgment. 462 held a subsidiary company, Nation Resources Ltd (NRL). On 15 September 2009, Jack Chen resigned as an executive director and joint Chairman of 462.
Goldmate
13. Jack Chen was also the majority shareholder and a director of Goldmate Securities (USA) Ltd (Goldmate), previously named Shenlong International Investment Ltd.
The 1st appellant: Fred Kan & Co
14. The 1st appellant was a solicitor practising in Hong Kong and a partner of the firm Fred Kan & Co. (FKC).
The 2nd appellant: Dragon Joy
15. The 2nd appellant held the majority interest, through three New Zealand companies, in Dragon Joy Ltd (Dragon Joy), which in turn held the majority shares in Global Food Holdings Ltd (GFHL). The 2nd appellant’s interests in the three New Zealand companies were held on trust for her by Graham Chin.
The UBNZ Group
16. UBNZ Trustee Ltd (UBTL) is a company registered in New Zealand. Ms May Wang was a director and the sole shareholder of UBTL. In May 2009, UBTL held 100% of the shares of UBNZ Assets Holdings Ltd (UBAH), which had agreed to acquire 22 dairy farms in New Zealand through UBNZ Funds Management Ltd (UBFM). Walter Shum was a director of UBAH and UBFM.
17. Jack Chen introduced Ms May Wang to the 1st appellant in 2008 and she had been a client of FKC since then.
The UBTL and 462 agreement
18. By an agreement dated 22 May 2009, 462 agreed to purchase Ms May Wang’s interest in the New Zealand companies, and thereby the dairy farms. The agreement consisted of two parts. By the first part, 462 agreed to pay NZD100 million to purchase 20% of the issued share capital of UBAH and 20% of the debt owed by UBAH to UBTL. The NZD100 million was to be paid by monies raised in the issue of convertible notes, with a maturity date of 10 years. By the second part, 462 agreed to pay NZD400 million for an option to purchase the remaining 80% of the issued share capital of UBAH. Accordingly, the total consideration was NZD500 million. The agreement constituted a Very Substantial Acquisition under the Listing Rules of the Stock Exchange of Hong Kong (the 1st VSA).
462: Circular/EGM
19. On 8 September 2009, a Circular was issued by 462 to its shareholders concerning the 1st VSA. On 2 October 2009, the acquisition of UBAH’s shares was approved in an EGM by the shareholders of 462.
462: Convertible Notes (CN-C)
20. On 4 December 2009, 462 entered into a Placing agreement with Sun Hung Kai Investment Services Ltd (SHKIS) to place convertible notes, CN-C, for subscription by investors in an aggregate principal amount of HKD951 million. 462 undertook that all subscription monies under the CN-C would be applied solely for the purpose of the acquisition and the general working capital of 462 and its subsidiaries.
21. Between December 2009 and September 2010, HKD842 million was raised under the CN-C.
22. In the period 21 December 2009 to 2 February 2010, HKD692.27 million (equivalent to NZD125.6 million) of the HKD842 million was remitted by SHKIS to Knight Coldicutt, a firm of solicitors in New Zealand acting as escrow trustee.
23. On and between 11 February 2010 and 15 February 2010, Knight Coldicutt remitted a total of NZD25,262,070.17 to UBTL. On 2 March 2010, HKD73,736,482.56, equivalent to NZD13,682,776.50, was remitted from UBTL to an ICBC account held by Goldmate (the First Goldmate Account). On the same day, HKD73.7 million was transferred from the First Goldmate Account to another ICBC account held by Goldmate (the Second Goldmate Account).
The HKD68.95 million
24. On 11 March 2010, Goldmate transferred HKD69 million from the Second Goldmate Account back to the First Goldmate Account. On the same day, Jack Chen issued a cheque for HKD68.95 million on the First Goldmate Account in favour of FKC’s Client Account.
25. An Official Receipt for the transfer was signed by Ms Flora Chan and a member of the staff of the Accounts Department. The money was described as “Costs and Disbursements on Account” and the client as Goldmate.
26. On 12 March 2010, a cheque for HKD68.95 million, signed by the 1st appellant, was drawn on FKC’s Client Account in favour of the 2nd appellant, issued by the 1st appellant. A payment voucher of that date, written by Ms Flora Tam, described the payment as having been made to the 2nd appellant as “C&D refund to client”.
…
The prosecution case
(i) The 1st appellant
28. Ms Flora Tam, the 1st appellant’s secretary, testified that the 1st appellant told her, on a day before 11 March 2010, that Jack Chen would deposit about USD10 million into FKC’s Client Account and that the money would be transferred out the following day. He told her it was to be transferred to Jack Chen’s wife, Betty, namely the 2nd appellant. She did not recall if she was told that before or after the money was deposited into the FKC’s Client Account. She said that it was possible that she had obtained the information in respect of the 2nd appellant’s bank account from Jack Chen’s personal assistant, Lulu.
29. On 11 March 2010, FKC’s Client Account received a deposit of $68,950,000, which she understood to be the USD10 million, the deposit of which the 1st appellant had forewarned her. As he had instructed her, she put down Goldmate as the name of the client on the Official Receipt. In cross-examination, she denied suggestions to the contrary.
30. In her experience, $68,950,000 was a large amount, rarely seen, for “Costs and Disbursements” for an Initial Public Offer, acquisition of company or any work handled by the 1st appellant. The usual range was around $1,000,000. She signed the Official Receipt, dated 11 March 2010, together with a member of staff of the Accounts Department. The money was described as “Costs and Disbursements on Account”. Invariably, she sought the 1st appellant’s instructions before giving instructions to the Accounts Department as to how to deal with any money credited into FKC’s Client Account.
31. Ms Rachel Fong Siu Lan, the accounts clerk of FKC, said that she prepared the Official Receipt for this money. She followed Ms Flora Tam’s instructions in using the term “Costs and Disbursements on Account”.
32. The prosecution’s case was that, from his knowledge of and involvement in the background transactions with Jack Chen and Ms May Wang, the Judge could infer that the 1st appellant had knowledge or reasonable grounds to believe that the HKD68.95 million represented the proceeds of an indictable offence:
(a) HKD68.95 million was a large amount of money, rarely seen for costs and disbursements for any work handled by the 1st appellant;
(b) The bank account of FKC was used for no purpose other than to satisfy the request of a “third party” that the money be deposited into and remitted from the account;
(c) The 1st appellant was aware that Jack Chen had been disqualified in the Mainland in 2004 by the Chinese Securities Regulatory Commission, and prohibited from holding any senior management position in any listed company or securities company there for three years. Furthermore, the 1st appellant had executed a Form B for Jack Chen in the offices of FKC, which disclosed this matter;
(d) The 1st appellant was party to emails, and replies to the enquiries of the SEHK, reassuring the SEHK that Jack Chen was no longer involved in CJHM, when the 1st appellant clearly knew that Jack Chen was involved;
(e) The 1st appellant was aware of the proposal for 462 to acquire the share capital of UBAH, and that payments had been remitted to Knight Coldicutt to be held in escrow;
(f) The 1st appellant had acted for Jack Chen on various listing matters, but Jack Chen was not his client with regard to the HKD68.95 million, which was transferred by the 1st appellant as a favour to Jack Chen. It was on the 1st appellant’s instructions that the money was credited to the name of Goldmate;
(g) Ms May Wang had been a client of FKC from May 2008, which included the period of the 1st VSA transaction;
(h) At the time that the money was transferred from Knight Coldicutt ultimately to the 2nd appellant, the 1st appellant was aware of complaints about the relationship between Ms May Wang and Jack Chen, and allegations that the transaction was a sham;
(i) Of VSA-2, the 1st appellant had been aware that the parties were connected, but failed to disclose that fact to the Hong Kong Stock Exchange. Ms May Wang had been a director of GFHL previously, and the 1st appellant himself had an interest in the company;
(j) The 1st appellant knew that a number of dairy farms had been placed into receivership, but did not voice any doubt as to the projected valuation of valuable assets to be acquired under the 1st VSA;
(k) In a search of FKC offices, a number of files, entitled “Sale of Dairy Farms”, were seized. The 1st appellant had also been involved in drafting the announcements regarding CNC-C;
(l) The 1st appellant had failed to act according to or comply with The Law Society’s guidelines on anti-money laundering set out in Practice Direction P (Exhibits PP190-1): particularly in respect of “client due diligence”. He had done nothing to ascertain the names and identities of the “investor” of the HKD68.95 million.
…
The defence case
The 1st appellant
34. The 1st appellant gave evidence at trial. He first became aware of the deposit of $68.95 million on the morning of 11 March 2010, when his secretary, Ms Flora Tam, informed him that the money was, “… in the process of coming into” FKC’s Client Account, and that he should telephone Jack Chen about it. He did so and Jack Chen told him that he wanted him to represent investors who had agreed to purchase the 2nd appellant’s entitlement, through Dragon Joy, to receive the proceeds under the VSA-2 (an agreement for GFHL to sell its production lines and certain trademarks to 462). The 1st appellant told Jack Chen that, because of a potential conflict of interest arising from his prior knowledge of the 2nd appellant’s interest in Dragon Joy, he could not represent them. So, he asked Jack Chen to take the money away. However, Jack Chen persisted in his request that the monies be deposited into FKC’s Client Account and then passed on to the 2nd appellant, explaining that the investor wanted a solicitors’ firm to acknowledge receipt of the monies. Jack Chen having explained that the matter was urgent, and in response to his request for a favour, the 1st appellant agreed to his request. In response to his request for the details of the 2nd appellant’s bank account, Jack Chen suggested that he asked Ms Flora Tam to contact Lulu, his own secretary. As a result, he instructed Ms Flora Tam to do so.
35. The 1st appellant understood Jack Chen to be the person behind Goldmate, who made the $68.95 million deposit. From his dealings in respect of the 1st and 2nd VSA, he believed that the 2nd appellant’s interest was a valuable asset and that Jack Chen had a genuine commercial reason for the deposit of the monies and their transfer to the 2nd appellant. He relied on what Jack Chen told him, namely that the money represented a payment for the purchase of the 2nd appellant’s interest in Dragon Joy. Although the 1st appellant was aware of complaints and allegations made against Jack Chen, having been a party to e-mails in various transactions, those complaints were not substantiated. There was no basis for the 1st appellant to rely on them, given Jack Chen’s solicitor’s reply to the contrary and SEHK’s eventual approval of the listing.
36. It was the 1st appellant’s case, in cross-examination and in his own evidence, that Ms Flora Tam was an unreliable witness. He had been arranging for the termination of her employment for some time prior to the transaction, due to her continued late attendance at work. In those circumstances, it was suggested that it was unlikely that the 1st appellant would have forewarned her of the anticipated deposit of USD10 million and its transfer to the bank account of Jack Chen’s wife, the 2nd appellant, if the transaction was one of money laundering.
37. It was contended that the 1st appellant did not gain from the transaction. He was not aware of any event or fact which would give rise to reasonable grounds to believe that the monies had their provenance in the commission of an indictable offence. There was no evidence that the background transactions were part of an indictable offence. An unexpected receipt of money, without more, did not point irresistibly to money laundering. Also, failure to comply with the Law Society Practice Direction P did not equate to criminality.”

9. The Judge convicted Wu Wing Kit. Wu Wing Kit appealed to the Court of Appeal. It appears that Wu Wing Kit was convicted upon the basis of the 2^nd limb of the basis for liability under section 25 of Organised and Serious Crimes Ordinance. In other words, the issue was whether Wu Wing Kit had reasonable grounds to believe the property in question, in whole or in part, directly or indirectly, represented the proceeds of an indictable offence, dealt with that property.

10. The critical part of the appeal of Wu Wing Kit focused on the treatment by the District Judge of the issue. As a matter of legal history, the District Judge followed the judgement of the Court of Appeal in HKSAR v Pang Hung Fai CACC 34/2012. By the time that Wu Wing Kit’s case came before the Court of Appeal, the Court of Final Appeal had adopted a different approach to the Court of Appeal.[4] In the premises, the Court of Appeal allowed the appeal against conviction and ordered a retrial.

11. On the retrial, Wu Wing Kit faced what I believe to have been the identical charge that he faced at his first trial. He was represented by other counsel. He was found not guilty and was acquitted.

The present trial

12. It is also of great importance to understand the issues in the present trial. In order to understand that, it has to be recognised that this proceeding also has a history. That is best summarised in the judgement of Ribeiro & Cheung PJJ in the Court of Final Appeal as follows:[5]

“2. The 1st appellant, Chen Keen (alias Jack Chen), the 2^nd appellant, Hao May (alias May Wang) and the 3rd appellant, Yee Wenjye (alias Eric Yee), “A1”, “A2” and “A3” respectively, were convicted on 29 April 2016 on two counts of conspiracy to defraud contrary to common law after trial before Anthea Pang J and a jury. The first count alleged a conspiracy to defraud the Stock Exchange of Hong Kong Ltd (SEHK) and the second, a conspiracy to defraud China Jin Hui Mining Corporation Ltd, a company listed on the SEHK (referred to by its stock code number “462”) and its existing shareholders. The appellants were alleged to have conspired by using dishonest means to cause the SEHK and 462 to permit the acquisition by 462 of farms in New Zealand, held by companies owned by A2, to proceed. A1 was also convicted on a count of money laundering in respect of his dealing with the alleged proceeds of such conspiracies to defraud.”

13. Chen Keen, Hao May and Yee Wenjye had appeal against their conviction to the Court of Appeal. That appeal was dismissed.

14. The Court of Final Appeal allowed the appeal of Chen Keen, Hao May and Yee Wenjye on the basis that owing to defects in the manner in which the conspiracy charges were drawn, the convictions were unsafe and unsatisfactory. Even the most superficial reading of the judgement of that Court will realise that the preceding sentence is a gross oversimplification. The Court ordered that the convictions of all three appellants be quashed and that a retrial with the prosecution being at liberty to amend the indictment or to prefer a fresh indictment. The amendment has been made in the present trial, of which I am presently concerned is that which follows the orders of the Court of Final Appeal.

15. In order to properly determine the issues in this case, it is necessary to outline at least a sense of the likely case at trial. The most succinct summary can be derived from the judgment of Ribeiro & Cheung PJJ of the Court of Final Appeal. It is being used in this judgment as simply a broad outline of the case and the issues, but it is, in my judgement, sufficient to provide a basis to determine the issues arising in this application. It essentially accords with the reading in which I have done so far. That summary is as follows:[6]

“A. The factual background
A.1 Planning to acquire farms in New Zealand
4. A2 controlled three companies which are relevant for present purposes. She was the owner and sole director of UBNZ Trustee Ltd (UTCL) which had, as its wholly owned direct subsidiaries, UBNZ Funds Management Ltd (UBFM) and UBNZ Assets Holdings Ltd (UBAH).
5. In early 2008, A2 asked one Barry Fraser (Fraser) to help her look for New Zealand farms to purchase. Fraser identified certain cattle and dairy cattle farms (the Properties) owned by companies known as the “CraFarms Group” and A2 authorised him to enter into negotiations to acquire them. A1 then signed a commission sharing agreement (CSA) dated 8 October 2008 with A2 and Fraser (the latter signing on behalf of Latitude Asia Ltd, a company of which his two sons were directors). The CSA provided as follows:
‘All parties agree that all commission received through dairy farm purchases with CraFarms Group (Incorporating Plateau Farms Ltd, Hillside Ltd, Taharua Ltd, Nugen Farms Ltd, Ferry View Farms Ltd, Windburn View Ltd) will be shared equally between the said three parties. All commissions negotiated and paid by vendors and investors (if any) will be shared equally between the said three parties. Commissions will be payable by the vendor and investors (if any) upon settlement of dairy farm purchasers. Commissions will be held by a nominated company trust account. The said parties will only be able to claim commission upon submitting an invoice to the nominated company. The Confidentiality Agreement between CraFarms Group and UBS (sic) Funds Management NZ Limited forms part of this agreement.’
A.2 Arranging for 462 to acquire the farms
6. Some months later, in about April 2009, A1 approached Katherine Chan Wai Kay (referred to below as “Kathy Chan” or “PW1”) who was a director and chairman of 462 which was, at that time, a moribund company with trading in its shares suspended. A1 told PW1 that he knew of farms in New Zealand “which were a very wealthy woman’s farms” (naming her as May Wang). PW1 expressed an interest in having the farms injected into 462 and a few days later, A1 introduced PW1 to A2 when the supply of dairy products from New Zealand to Mainland China was discussed as a project with potential. A1 was then appointed a director and co-chairman of 462 to facilitate negotiations with A2.
7. On 18 May 2009, A2, through UBFM, entered into a series of agreements to purchase 22 farms owned by the six companies forming part of the CraFarms Group for a total consideration of NZD259 million.
8. In the following week, on 22 May 2009, 462’s board, chaired by PW1 and A1, approved the purchase by 462 of those farms with the minutes recording that the board was told that the ultimate beneficial owners of UTCL and UBFM were “third parties independent of the company and its connected persons.”
9. Later that day, 462 entered into an Agreement dated 22 May 2009 with UTCL and UBFM for the purchase from UTCL of the shares of its subsidiary UBAH (the Acquisition), the vendors undertaking that UBAH would become the owner of the Properties (which its fellow subsidiary UBFM had contracted to purchase from CraFarms) before completion under the Agreement.
10. The purchase would initially be of 20% of the shares in UBAH for the HK Dollar equivalent of NZD100 million with 462 having the option of acquiring the remaining 80% of UBAH for NZD400 million. The consideration was to be provided by the issue of convertible notes, that is, debt instruments convertible into shares in 462, to UTCL. It was agreed that 462 would perform due diligence inquiries. Conditions precedent to the Acquisition included permission from the SEHK to list and deal in converted shares; approval by 462’s shareholders; and all necessary approvals from the relevant New Zealand authorities (in particular the Overseas Investment Office (OIO) of New Zealand) for the transfer of ownership of the farms.
A.3 Due diligence and the Announcement
11. As the Acquisition qualified as a Very Substantial Acquisition (VSA) under the SEHK’s Listing Rules, trading in the shares of 462 was suspended between 25 May 2009 and 5 June 2009, pending the making of a public announcement. On 3 June 2009, a firm of accountants, ShineWing HK (CPA) Ltd (ShineWing) was engaged by 462 to conduct a due diligence check on UBAH and the farms. At about the same time, A2 engaged A3 as a consultant to compile accounts for the Acquisition and to provide the financial information to ShineWing.
12. The public announcement was published on 4 June 2009 (the Announcement). It stated that 462 had agreed conditionally to purchase from UTCL the UBAH shares (describing the principal terms of the agreement) and contained the following declaration:
‘To the best of the information, knowledge and belief of the Directors having made all reasonable enquiries, UTCL and UBFM and their respective ultimate beneficial owners are third parties independent of the Company and its connected persons.’
13. In New Zealand, Stretton’s were the CraFarms Group’s accountants, Mark King (King) being the accountant in charge. In the course of the due diligence exercise, in June 2009 King provided unaudited management accounts for the years ended 31 May 2006, 2007 and 2008 to A3 and A2 who forwarded the same to ShineWing and PW1.
14. In e-mails examined in detail by the Court of Appeal, A3 engaged in recasting the figures in various ways under pressure from A2. By 24 June 2009, the overall deficit of NZD5,420,975 shown in King’s figures had been altered to present an overall surplus of NZD14,875,785. After further manipulation, by 7 July 2009 the purported net profit figure for the 10-month period ended 31 March 2009 had been further revised upwards to NZD17,789,715. When the circular discussed below was published on 8 September 2009 (the Circular), it put the unaudited profit of UBAH for the year ended 31 May 2009 at NZD20 million, equivalent to HKD95.95 million.
15. The prosecution case was that the manipulation by A3 (in conjunction with A2 and with the acquiescence of A1) of the historical figures provided by King represented the dishonest falsification of those figures. The defence argued that the adjusted figures did not represent and were known by ShineWing not to represent historical figures but reflected honest projections by A3 of achievable improvements brought about by achieving efficiencies and a “change of management focus”.
A.4 Seeking SEHK’s approvals
16. During July and August, 462 was engaged in seeking the SEHK’s permission to issue the Circular required to be published for the Acquisition, being a VSA. This was referred to as a “pre-vetting” process and involved the SEHK raising a series of queries. In a letter dated 10 August 2009, the SEHK stated that it had received a complaint alleging that A2 was the sole shareholder and director of the vendor UTCL and that:
‘In respect of the Acquisition, Ms Wang is partnering with Mr Jack Keen Chen … the executive director of the Company. They work together in New Zealand under the same office at Level 10, 175 Queen Street, Auckland, New Zealand, and the office is a property owned by Ms Wang …’
17. The letter asked whether the allegations were accurate and went on as follows:
‘if Ms Wang is the beneficial owner of the Vendor, your confirmation whether there is any existing or prior relationship between Mr Chen and Ms Wang, or whether there is any prior arrangement(s) or understanding between Mr Chen and Ms Wang with respect to the Acquisition such that the Acquisition shall become a connected transaction under Chapter 14A …
We note that the circular on the Acquisition will be despatched by the Company in due course. Please ensure that all information relevant for shareholders to make an informed assessment on the Acquisition has been duly disclosed in such circular, including the information mentioned in the complaint above, where appropriate.’
18. A1 responded by saying that he had met A2 at non-business related events and that he had then been appointed as director of 462 to “assist and negotiate the acquisition”. He asserted that: “There were [sic] no existing or prior relationship between myself and Ms Wang with respect to the Acquisition”. A2 acknowledged that she was the sole shareholder of UTCL and likewise declared: “There was no existing or prior relationship between Mr Chen & me with respect to the Acquisition.”
A.5 The Circular and the Acquisition
19. On 8 September 2009, 462 published the Circular which stated that:
‘To the best of the information, knowledge and belief of the Directors having made all reasonable enquiries, each of the Target Company, the Vendor, the Warrantor, the ultimate beneficial owner of the Target Company, the Vendor and the Warrantor, the registered owners and the ultimate beneficial owners of the Properties and Fixed Assets are Independent Third Parties to the Company and its connected persons and in particular there is no existing or prior relationship or understanding between Mr Jack Keen Chen and Ms May Wang with respect to the Acquisition such that the Acquisition shall become a connected transaction under Chapter 14A of the Listing Rules.’
20. As noted above, the Circular put the unaudited profit of UBAH for the year ended 31 May 2009 at NZD20 million, equivalent to HKD95.95 million. The unaudited combined profit and loss statements attributable to the farms for the year ended 31 May 2009 annexed to the Circular also stated that the farms’ gross profits were HKD92,520,000 (“representing an improvement of 68.1% when compared to 31 May 2008”). The Circular further said that the statements had “been prepared based on the financial and other information provided by the management of the vendor”.
21. On 2 October 2009, at an Extraordinary General Meeting, 462 approved the Acquisition.
22. On 4 December 2009, the SEHK granted listing approval for 462 to issue convertible notes to UTCL. 462 then appointed Sun Hung Kai Investment Services Ltd (SHKI) as placing agent to market the additional convertible notes.
A.6 The Convertible Notes, their proceeds and the incomplete Acquisition
23. Consequently, on 21 December 2009, 462 issued to UBTL NZD50 million worth of notes convertible into 110,431,200 shares in 462 as the Acquisition deposit and NZD100 million worth of notes convertible into 276,077,999 such shares for the acquisition of 20% of UBAH’s shares. On the same day, the SEHK granted 462 listing approval to issue the additional convertible notes and an Optional Bond.
24. Between 16 July and 1 September 2010, sales of some of the convertible notes took place and the 462 board approved conversions of various batches of convertible notes into shares. Because of the SEHK’s concerns in the light of various complaints made against A1 and A2, 462 froze and stopped transfers for any CN-A and CN-B shares released to UTCL. A2 was declared bankrupt in New Zealand on 8 December 2010 and A1 and A2 were arrested on 16 December 2010.
25. On 12 January 2011, OIO refused to approve a transfer of the farms to UBAH and UBFM cancelled the sale and purchase agreements with the New Zealand farm companies.”

16. Wu Wing Kit is not a party to the present trial. He is not listed on the back of the indictment as a witness and, as far as I am aware, there is no intention on the part of the prosecution to call him. I cannot imagine circumstances in which any of the defendants would even contemplate calling him. There is no reference to him in the summing up of Anthea Pang J. Plainly, on the evidence, there are likely to be brief references to Wu Wing Kit in the evidence in relation to, for example, the provision of BVI companies to D1 and D2.

SUBMISSIONS

17. Counsel for the prosecution, Ms Draycott, SC submitted that the law deals with the apprehension of a real possibility of bias by a fair-minded and well-informed observer.[7] Ms Draycott submitted that the law is set out in Deacons v White & Case Ltd Liability Partnership & Ors (2003) 6 HKCFAR 322.[8] She then argued that: “It is respectfully submitted that where the tribunal has acted for one side in a criminal case, albeit a part that was severed for reasons of expediency, such an observer would apprehend or conclude that such a possibility [that the tribunal was biased] existed.”[9]

18. Ms Draycott submitted that there could be no question of forum shopping or impugning the integrity of the judge. She reminded the court that the court would be unlikely to countenance a judge presiding who had acted for the prosecution.[10]

19. It is appropriate also to note that Ms Draycott wrote to the Registrar, High Court inviting the Registrar to reassign the case to another judge. That letter is dated 26 June, 2020. She adopted and incorporated that letter into her submissions. In that letter, Ms Draycott argues that the nexus between the present case and the District Court case in which Wu Wing Kit was tried is “too close”. She went on: “We fear there is a real risk of unconscious bias where a Judge has defended someone for the same criminal conduct over which he is now asked to preside. He has obviously considered the same facts from the perspective of a defendant and formed a stance which he has advocated in the course of a parallel trial, seeking to persuade that Judge [that is, the District Court Judge] [that] the prosecution is wrong.” The submission goes on: “Despite the DHCJ Bruce’s best endeavours, some part of that mindset may carry over into in the current proceedings.” The letter also asserts that: “…DHCJ Bruce will also inevitably be privy to matters closely related to the present trial, but not in evidence, which he would be professionally bound not to disclose to the parties. We suggest such a connection is highly undesirable. One has but to imagine the consternation of the defence if DHCJ Bruce had prosecuted Wu Wing Kit and Ye Fang instead of defending in that trial, to appreciate the problems.”

20. The letter goes on to point out that the property, the subject of the charge in the District Court case, is part of the transaction where with the 1st accused faces a charge of money laundering.

21. It is also asserted that the case against Wu Wing Kit was severed from the original proceedings to avoid his and his co-defendant’s involvement in a long trial.

22. It was then submitted in the letter that Wu Wing Kit was aware of the relationship between D1 and D2 and, in particular, that the assertion by those accused that they were on opposite sides of the transaction. In oral submissions, it was accepted by Ms Draycott that if that had been true and Wu Wing Kit had provided the legal services he did in that context, then a conviction on the money-laundering charge was inevitable. The letter goes on to summarise the case against Wu Wing Kit at his trials (I was not concerned with the second trial and I proceed on the assumption that the case against Wu Wing Kit was, if not precisely the same as at the first trial, it was not materially different). In the letter, Ms Draycott went on to outline the close relationship that she asserted between Wu Wing Kit and D1 and D2. She asserted that he was a joint director and equal shareholder of Progress Great Ltd which is one of the BVI companies holding 15% of the shares in one of D2’s companies. Further, counsel for the prosecution asserted that there was a close relationship between D1 and Wu Wing Kit. That Wu Wing Kit had acted as a solicitor for D1 was not in dispute, but Ms Draycott went on to further point out that on many occasions D1 had said, in Wu Wing Kit’s presence, that he was one of D1’s very best lawyer friends in Hong Kong. It was not in dispute that Wu Wing Kit also acted for D2. However she went further and suggested that he, that is Wu Wing Kit, knew that D1 and D2 were working together on opposite sides of the VSA. The closeness was also indicated, so the prosecutor asserted, because Wu Wing Kit signed the agreement as a witness and was acting for D2.

23. Ms Draycott also pointed to issues with a BVI company known as Super Worth International Limited (Super Worth). She asserted that Super Worth was incorporated in BVI by Wu Wing Kit for D2. She went on: “His bill was paid by D1 whose duty as a director of the purchasing company lay with 462. The Heads of Agreement for the VSA between D2 and 462, stipulated that Super Worth would receive part of the consideration of the VSA. D2 sent a draft of the Heads of Agreement to [Wu Wing Kit] on 16 May 2009 for him to ‘have a look and let me know your comments’. [Wu Wing Kit] was therefore aware that he had set up a BVI company for D2, paid for by D1, in order to receive the proceeds of the VSA. In the final agreement D2 nominated UBTL as the recipient, but the original purpose of Super Worth is clear.”

24. Ms Draycott concluded her letter by noting that “[Wu Wing Kit] was acquitted at his second trial and nothing in this letter is intended to go behind that verdict or to disparage him in anyway.”

25. Ms Draycott made oral submissions on 17 August 2020. I do not propose to repeat the points that she made in her written submissions and the letter, which she incorporated into those submissions by reference. In the submissions, she did say: “Well, as I say, I am concerned about the relationship between your Lordship and the personnel in this trial are matters that you may know about them and matters which you may have formed views about in the course of representing Mr Wu. And I say this: that I think all of us here when we are asked to represent somebody do so to the utmost of our ability and we perceive matters from their point of view. We push that point of view, we advocate that point of view, and it’s very difficult to step back and lose that completely. And I just don’t see why we have this risk.” She asked, rhetorically, why I wished to “cling on” - her words - to this case when there were so many able judges available to do the case.

26. D1 provided written submissions. In those submissions, it was contended by Mr Owen, QC, what is critical is to identify what the judge is required to decide. It was submitted that this must be viewed in the context of a judge presiding on a jury trial where the judge is not required to decide matters of credibility or whether Wu Wing Kit is to be accepted as a witness.[11] In this connection, he preferred to Komal Patel v Chris Au [2016] 1 HKLRD 328. He contended, citing Kwan JA in the Falcon Private Bank Case in the Court of Appeal, that an applicant must demonstrate that there was a logical connection between the asserted apprehension of bias and a particular party or issue. Mr Owen made the point that not only was the charge different in Wu Wing Kit’s case, but the legal issues were different.

27. In the course of submissions, I asked Mr Owen what sort of issues I may have to decide in the course of the trial, if I were to continue as trial judge. The submission was that there would be issues of law to determine and I would have to deliver a summing up. That proposition was picked up by Mr Derek Chan, SC in his submissions on behalf of D2. In Mr Owen’s submissions, the position might be different if I was the trial judge in a District Court proceeding, where the judge is the tribunal of fact as well as tribunal of law. Again, that was picked up by Mr Chan. It was contended by both of them that I have no role in making findings of credibility. It was submitted by Mr Owen that there was no logical connection between what I might be required to decide in the case and my representation of Wu Wing Kit in the previous proceedings.

28. Counsel for D3, Mr David Khosa, provided a very helpful summary of the evidence and contentions in the first trial of Wu Wing Kit. As far as I can see, that accords entirely with the summary I have adopted from the Court of Appeal set out earlier in these reasons.

PRINCIPLES

29. The principles in this area are well-established. A judge may not hear a case if in all the circumstances, a fair-minded lay observer may reasonably apprehend that the judge may not bring an impartial mind to the resolution of the question or questions the judge is required to decide.[12] This was the test propounded by the Appeal Committee of the Court of Final Appeal in Deacons v White & Case Ltd Liability Partnership & Ors (2003) 6 HKCFAR 322. In that case, the Appeal Committee of the Court of Final Appeal made the point that it was not strictly necessary for the Court to decide the terms of the applicable test for Hong Kong.[13] Nevertheless, Ribeiro PJ for the court observed:[14]

“The court must first ascertain all the circumstances which have a bearing on the suggestion that the judge was biased. It must then ask whether those circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility, or a real danger, the two being the same, that the tribunal was biased.”

30. This test was also accepted as correct in Falcon Private Bank Ltd v Borry Bernard Edouard Charles Ltd (2014) 17 HKCFAR 281.[15] The onus of establishing that matter is on the party applying for recusal.

31. As set out by the High Court of Australia in Johnson v Johnson (2000) 201 CLR 488, Kirby J observed:[16]

“The hypothetical reasonable observer of the judge’s conduct is postulated in order to emphasise that the test is objective, is founded in the need for public confidence in the judiciary, and is not based purely upon the assessment by some judges of the capacity or performance of their colleagues. At the same time, two things need to be remembered: the observer is taken to be reasonable; and the person being observed is ‘a professional judge whose training, tradition and oath or affirmation require [the judge] to discard the irrelevant, the immaterial and the prejudicial’.”

In that case, Kirby J made the point that the fair-minded observer should not be confused with the complainant.

32. These principles give effect to the requirement that justice should both be done and be seen to be done.[17] The concern for the principles of the independence and impartiality of judicial officers is deeply rooted in the common law and the appearance of impartiality is essential for public confidence and the administration of justice.[18]

33. In this context, it is relevant to consider what the hypothetical reasonable observer brings to the required evaluation. Plainly, the hypothetical reasonable observer is fair-minded and hears both sides (or, perhaps where relevant, all sides) of the argument before coming to a conclusion.[19] In Helow v Secretary of State for the Home Department & Anor [2008] 1 WLR 2416, Lord Hope of Craighead observed:[20]

“2. The observer who is fair-minded is the sort of person who always reserves judgment on every point until she has seen and fully understood both sides of the argument. She is not unduly sensitive or suspicious, as Kirby J observed in Johnson v Johnson (2000) 201 CLR 488, 509, para 53. Her approach must not beconfused with that of the person who has brought the complaint. The ‘real possibility’ test ensures that there is this measure of detachment. The assumptions that the complainer makes are not to be attributed to the observer unless they can be justified objectively. But she is not complacent either. She knows that fairness requires that a judge must be, and must be seen to be, unbiased. She knows that judges, like anybody else, have their weaknesses. She will not shrink from the conclusion, if it can be justified objectively, that things that they have said or done or associations that they have formed may make it difficult for them to judge the case before them impartially.
3. Then there is the attribute that the observer is ‘informed’. It makes the point that, before she takes a balanced approach to any information she is given, she will take the trouble to inform herself on all matters that are relevant. She is the sort of person who takes the trouble to read the text of an article as well as the headlines. She is able to put whatever she has read or seen into its overall social, political or geographical context. She is fair-minded, so she will appreciate that the context forms an important part of the material which she must consider before passing judgment.”

That passage was followed by Zervos J in Komal Patel v Chris Au [2016] 1 HKLRD 328, §11.

34. In Johnson v Johnson (above), Kirby J considered the nature of the observer:[21]

“The attributes of the fictitious bystander to whom courts defer have therefore been variously stated. Such a person is not a lawyer. Yet neither is he or she a person wholly uninformed and uninstructed about the law in general or the issue to be decided. Being reasonable and fair-minded, the bystander, before making a decision important to the parties and the community, would ordinarily be taken to have sought to be informed on at least the most basic considerations relevant to arriving at a conclusion founded on a fair understanding of all the relevant circumstances. The bystander would be taken to know commonplace things, such as the fact that adjudicators sometimes say, or do, things that they might later wish they had not, without necessarily disqualifying themselves from continuing to exercise their powers. The bystander must also now be taken to have, at least in a very general way, some knowledge of the fact that an adjudicator may properly adopt reasonable efforts to confine proceedings within appropriate limits and to ensure that time is not wasted. The fictitious bystander will also be aware of the strong professional pressures on adjudicators (reinforced by the facilities of appeal and review) to uphold traditions of integrity and impartiality. Acting reasonably, the fictitious bystander would not reach a hasty conclusion based on the appearance evoked by an isolated episode of temper or remarks to the parties or their representatives, which was taken out of context. Finally, a reasonable member of the public is neither complacent nor unduly sensitive or suspicious.”

35. Further, such an observer would be aware of the judicial oath taken by both permanent and deputy Judges and Recorders.[22] Because my impartiality is impugned because of my acting for Wu Wing Kit at an earlier time, the observer would also be aware of the traditions and discipline of the legal profession and the ethical standards imposed and expected of those in the legal profession.[23] There is a similar tradition and discipline apposite to the judiciary.[24] Such an observer would also be expected to understand the obligations of lawyers as to the conduct of cases. In particular, such an observer would understand the professional obligation of a lawyer (whether solicitor or barrister) to be agnostic towards instructions given from a lay client. In HKSAR v Egan (2010) 13 HKCFAR 314, Ribeiro PJ observed:[25]

“In the absence of actual knowledge, a solicitor (or barrister) is bound to adopt an agnostic approach towards the client’s instructions in carrying out his professional duties since it is not his business to judge their truth or falsity. The solicitor or barrister may privately harbour distinct feelings of scepticism about his client’s story but that is wholly beside the point.”

36. Obviously, in criminal proceedings where a lawyer is instructed to defend a client, such a lawyer would be required to evaluate or form a view about his client for purposes such as deciding what advice to tender as to whether or not his client should testify. While popular culture might point to a different conclusion in this context, it is professionally inappropriate for a lawyer to become, as it were, a card-carrying member of the accused’s team adopting the accused’s view of the facts. After the case is concluded, the only obligation that such a lawyer would have in those circumstances would be to observe the obligation of legal professional privilege. The obligation does not extend to advocating his former’s position or beliefs. Further, the Bar Code imposes strict rules about the conduct of barristers who are told directly by their client that they are guilty or where to represent a client would be to have a conflict-of-interest.

37. The authorities demonstrate that it is important that judicial officers should be careful not to accede too readily to suggestions of appearance of bias as such may encourage parties to believe that by seeking the disqualification of a judge, they will have their case tried by someone thought to be more likely to decide their case in their favour: Re JRL; Ex Parte CJL (1986) 161 CLR 342. In that case, the High Court of Australia was concerned that a counsel who had been dealing with one of the parties in family law proceedings making representations to the judge in the case in the absence of the other party. In the course of considering the principles which applied, Mason J observed:[26]

“Although it is important that justice must be seen to be done, it is equally important that judicial officers discharge their duty to sit and do not, by acceding too readily to suggestions of appearance of bias, encourage parties to believe that by seeking the disqualification of a judge, they will have their case tried by someone thought to be more likely to decide the case in their favour.”

38. This matter was taken up by the Appeal Committee (Ribeiro and Tang PJJ and Chan NPJ) of the Court of Final Appeal in Falcon Private Bank Ltd v Borry Bernard Edouard Charles Ltd (2014) 17 HKCFAR 281. In giving the judgement of the Court, Ribeiro PJ observed:[27]

“Judges must be wary of unjustified applications for their recusal motivated by tactical or forum-shopping considerations. By its very nature, it is generally in quite exceptional cases that recusal is called for. As Kwan JA noted, Judges can generally be expected to exercise proper judicial standards even after they have found it necessary to criticise wayward legal representatives. Judges should accordingly feel confident of appellate support if they continue with the case where there are no reasonable grounds for apprehending a risk of bias. On the other hand, if there is a real possibility that a risk of bias might objectively be apprehended, this should be recognised and they should prudently arrange for a colleague take over the proceedings. To press on with hearing the matter in such cases poses a risk of costs being thrown away if, on appeal, it is held (as in the present case) that the judge should not have continued to hear the case. Even if there is a suspicion that forum shopping motivates an application, the fact and appearance of judicial impartiality must have priority and the prudent course should be followed where a real risk of apprehended bias exists.”

39. The English Court of Appeal expressly followed the observations of Mason J in Re JRL; Ex Parte CJL (above) followed in Locabail (UK) Ltd v Bayfield Properties Ltd & Another [2000] QB 451.[28]

40. In ZN v Secretary forJustice [2016] 1 HKLRD 174, Zervos J discussed the position where the applicant is an arm of the Hong Kong government. He observed that “When the litigant is the HKSARG, it should be rare indeed that it would make an application for the recusal of a judicial officer, and if it does it should be only in the most obvious cases: The HKSARG should be more reluctant to do so than the ordinary litigant, and thereby display greater confidence in and respect for the workings of the judiciary.”[29] In my judgement, if those observations I have just quoted are meant to imply a limitation on the right of the Secretary for Justice to apply to recuse a judicial officer, then I respectfully disagree. If it is a statement of aspiration, I wholeheartedly agree. The reason I am concerned about the limitation on the right of the Secretary to apply is, unlike the position of an accused person, the appellate review options available to the Secretary are distinctly limited. Accordingly, from that procedural standpoint alone, it is incumbent on the judge to whom the application is made to take, perhaps, especial care in dealing with such an application.

41. On any view, an application to a judge for recusal places that judge in an invidious position. The judge has to determine the application. Most of the authorities that I have considered, when considering the principles to be adopted, are appellate decisions reviewing the decision of the First Instance judge, who had to make the decision to recuse or otherwise. As to the appropriate considerations to bring to bear on such a decision, of great assistance to this court was the approach adopted by Zervos J in Komal Patel v Chris Au (above).

RESOLUTION

42. As Zervos J in Komal Patel v Chris Au (above) identified, the first task that a judge facing an application for recusal must consider is to identify how or why the judge is or may be biased by reference to the issues that the judge must consider in the case. In short, in the present case, the contention must be that there is a reasonable apprehension on the part of a reasonable and well-informed observer that I could possibly be biased against the prosecution in relation to its case against the 3 accused. The basis on which the prosecution says that such an observer may have such an apprehension is that I acted for Wu Wing Kit in his trial for money laundering.

43. While it is certainly true that the conspiracy charges faced by the 3 accused in this case are different charges, the practical reality is that there is some common evidence as between Wu Wing Kit’s trial and the present trial. D1 in the present case also faces a money laundering charge. However, while the prosecutor in the present case confidently asserts knowledge of Wu Wing Kit as a pertinent fact germane to both cases, the plain fact is that certainly at the trial that I conducted on his behalf, he denied knowing these facts. Indeed, I cannot conceive of circumstances in which there could be anything other than a verdict of guilty on the money laundering charge that Wu Wing Kit faced, if it were proved that he knew the facts that the prosecutor asserted. At the trial that I conducted as counsel, the learned trial Judge convicted Wu Wing Kit on the basis of the second limb of liability under section 25 of the Organised and Serious Crimes Ordinance. The issue before the Court of Appeal was whether the learned trial Judge adopted the correct test. I understand that Wu Wing Kit was never charged with the conspiracy charges faced by the accused in the present case.

44. It is said by the prosecutor, and these are her exact words, that “Well, as I say, I am concerned about the relationship between your Lordship and the personnel in this trial are matters that you may know about them and matters which you may have formed views about in the course of representing Mr Wu.” First of all, I have no relationship, professional or otherwise, with the accused in this case. I have a relationship with Mr Khosa and I will return to that topic in due course. My relationship and obligations (legal professional privilege aside) to Mr Wu are over.

45. What I “know” or what I have been told by Wu Wing Kit could only be relevant if it could conceivably affect the decision or decisions I was required to make in the present trial. Further, as was my professional obligation, I remained (and remain) agnostic about the instructions given to me by Wu Wing Kit. Whilst I am not permitted to reveal my instructions in Wu Wing Kit’s case, it is only right that on no account was I ever instructed that Wu Wing Kit knew of the dishonest activities alleged against, particularly D1 and D2. D3 had no real part to play in the issues at trial. If those had been my instructions, I would have recused myself a long, long time ago. Under the Bar Code, it is at least doubtful that I could have acted for him in the first place.

46. The prosecutor, in the course of her submissions, asked rhetorically why I wished to “cling on” to this case where there were so many able judges available to do the case. Plainly, there are many able judges serving Hong Kong. No doubt at least some are available. I have not enquired. I reject as absurd the suggestion that I am “clinging on” to this case.

47. Agnosticism as to instructions is a critical part of what a barrister is expected to do. Barristers are expected to provide objective advice. Agnosticism is a prerequisite of objective advice. That advice may be unpopular or unwelcome, but that is the obligation. If a barrister is not agnostic as to his or her instructions, that barrister runs the risk of failing in one of his or her principal duties. In my experience, leaving aside the need to render independent legal advice, counsel who lose their objectivity run the real risk of diminishing their ability to conduct a case.

48. I perfectly accept that being agnostic as to instructions has obvious limitations in the analysis of whether it is necessary for me to recuse myself. For example, agnosticism as to instructions would be of no relevance if Wu Wing Kit was an accused person in the present trial.

49. As I made plain in exchanges between myself and the prosecutor in oral argument, I did form views about Wu Wing Kit. As with virtually every trial I have ever done, I consider that my professional obligation means that I am required to form views. However, those views are limited to making an assessment of an accused for the purpose of the trial. The most striking example of that is an assessment of what sort of a witness the accused might make, if he or she was to go into the witness box. That is highly relevant to the advice that I am professionally obliged to render in the event that in the case I am instructed to defend the court holds that there is a case to answer. I try to avoid forming any emotional feelings about an accused and almost without exception I have been successful in that. (I have been conducting trials since 1977). I formed no emotional feelings about Wu Wing Kit. Even if I had, I cannot see how such emotions might affect any decision I might be called to make in the present trial.

50. I indicated that I would return to the topic of the fact that Mr Khosa who was my junior at the trial of Wu Wing Kit. Mr Khosa is a senior and respected member of the Bar. He is a person with whom I have enjoyed friendly relations with for many, many years. In that regard, he is to be regarded as in common with a fairly large portion of the Bar. As Sir Anthony Mason once observed at the talk that I attended, the Bar produces great friendships and great rivalries. It ought not to be surprising that this was my experience having been in practice as government counsel and as a barrister in this jurisdiction since 1982. Mr Khosa, and many other persons of his seniority, have regularly appeared before me since I started sitting as a Deputy Judge some years ago. Some of them I count as friends. Some of them I do not. Some of them have assisted me as Junior Counsel. Some have been opponents. So far, when they have appeared before me, the record clearly demonstrates they have all been treated the same. Counsel for the prosecution appeared to resile from a submission that the fact that Mr Khosa was my junior in the trial where I represented Wu Wing Kit was a relevant factor either for me or, presumably, the fair-minded lay observer acting reasonably. I make these points in case I have misapprehended her position.

51. Counsel for the prosecution also says “…I say this: that I think all of us here when we are asked to represent somebody do so to the utmost of our ability and we perceive matters from their point of view. We push that point of view, we advocate that point of view, and it’s very difficult to step back and lose that completely. And I just don’t see why we have this risk.” The central core of that submission is that it is contended that counsel as a generality and, perhaps me in particular, cannot step back after a case after having pushed that case before a tribunal as far as professionally appropriate. I fundamentally disagree. In my opinion, that completely misses the point about what we as counsel do. That said, I could readily see how if a person learned of their concept of what barristers do from watching legal dramas in popular culture, how the submission of the prosecutor might have a proper basis. However, it has none in the day-to-day world of the Bar. Even if I was wrong about that, even if, for example, I thought that Wu Wing Kit was, with respect to the first trial, be wrongly convicted or was unlucky to be convicted, I fail to see how that could influence me in making any determination against the prosecution germane to the accused in the present case.

52. I am not sure I wholly agree with the submissions of Mr Owen and Mr Chan as to certain aspects of what the judge in a jury trial is required to determine. In particular, issues of admissibility which are issues of law almost always depend on facts being found as a precondition to admissibility. In that regard, a judge in a jury trial has a fact-finding responsibility. However, I cannot conceive of any ruling of that kind which I may be called upon to give where I made rule against the prosecution out of some misplaced belief in or loyalty to Wu Wing Kit. (In making that observation, I am assuming Wu Wing Kit was not a witness.) Of course, some issues of admissibility may have an uncontroversial or accepted factual base. What the prosecution’s submissions come to must be that there is a perception that there is a real risk that I would skew my decision either as to law or as to facts because of that misplaced belief or loyalty to Wu Wing Kit.

53. Further, as Mr Owen and Mr Chan submitted, the judge has an important role at the conclusion of the prosecution case to determine whether or not there is a case to answer. The legal discipline in determining that issue is based on settled law.

54. It has always been my approach in the conduct of criminal trials that if there are any rulings, other than minor short-term matters as to whether counsel for a particular party is improperly asking leading questions or matters of that kind, that I give a reasoned decision. This is an obligation recognised by the Court of Appeal in HKSAR v Okafor [2012] 1 HKC 427, [2012] 1 HKLRD 1041.[30] It is my invariable practice that when giving reasons in recognition of those obligations, the reasoned decision is to be reduced to writing. In other words, there is open scrutiny of any decision I make.

55. Of course, I would be obliged to sum-up the case and its conclusion in the event that I hold that there is a case to answer. It is elementary that the obligation of the judge in such a circumstance is to sum-up not only the prosecution case, but to put the defence case as well. In this jurisdiction, prosecuting counsel are obliged in law to take exceptions where an error is made in the summing-up, whether it be of fact, law or emphasis. While there is no such obligation on defence counsel as presently the law stands, I suspect that the time is not far off when that may become an obligation imposed on defence counsel as well. Be that as it may, there is ample opportunity for scrutiny of the summing-up. Although it is not my invariable practice to do so, I cannot imagine circumstances in this specific case in which I would not consult with counsel prior to the summing-up. I cannot imagine circumstances in this case where those consultations would not be extensive, not just as to the applicable law (which, while somewhat tricky, is probably reasonably easy), but as to aspects of the facts as well. It is my invariable practice to invite counsel to make submissions in advance of a summing-up except in the most basic trials.

56. The point of all of this is simply to focus on what I will be required to consider (I use the word “consider” in contradistinction to “decide” quite deliberately) in the trial. That will be focused and counsel will have the opportunity at all stages to make submissions, particularly, by reference to a case such as the present one, I cannot imagine it being anything else.

57. However, even though I am wholly and utterly sure that I will bring an open mind, as opposed to a biased mind to this case, in many respects that is only part of the issue. The real issue then becomes whether a fair-minded lay observer may reasonably apprehend that the judge may not bring an impartial mind to the resolution of the question or questions the judge is required to decide. I make the point that such an observer, consistent with Kirby J in Johnson (above), in order to be a fair-minded observer, would have to know about aspects of how barristers go about their business and how judges go about their business. In many ways, that fair-minded lay observer is, in a sense, required to get the basics of a legal education starting with things that were learned in the first few classes of first year law school. In my judgement, I am sure that such a fair-minded lay observer would not reasonably apprehend that I may not bring an impartial mind to the resolution of the question or questions that I am required to decide.

58. Accordingly, I refuse this application.

	(Andrew Bruce, SC)
	Deputy High Court Judge

Ms Charlotte Draycott, SC, on fiat, and Miss Ng Oi-lam Joycelyn, SPP of the Department of Justice, for HKSAR

Mr Tim Owen, QC, leading Mr Tsoi Y M Benson, instructed by Boase Cohen & Collins, for the 1st accused

Mr Chan C L Derek, SC, leading Mr Cao Yuan-shan, instructed by Haldanes, for the 2nd accused

Mr David A S Khosa, instructed by Hobson & Ma, for the 3rd accused

[1] Junior Counsel representing Wu Wing Kit was Mr David Khosa Barrister at Law.

[2] HKSAR v Wu Wing Kit & Ye Fang (No 2) [2016] 3 HKLRD 533.

[3] HKSAR v Wu Wing Kit & Ye Fang (No 2) [2016] 3 HKLRD 533, §11-26, 28-32, 34-37. I have not included the footnotes to the summary by Lunn VP.

[4] HKSAR v Pang Hung Fai (2014) 17 HKCFAR 778. Perhaps as a matter of further legal history, the Court of Final Appeal has refined the test and the last word on the topic is now to be seen in HKSAR v Harjani Haresh Murlidhar (2019) 22 HKCFAR 446, [2019] HKCFA 47

[5] HKSAR v Chen Keen & Ors (2019) 22 HKCFAR 248, §2. Footnotes omitted.

[6] (2019) 22 HKCFAR 248, §4-25

[7] Prosecution Submissions dated 14 August, 2020, §10.

[8] Prosecution Submissions dated 14 August, 2020, §11.

[9] Prosecution Submissions dated 14 August, 2020, §13.

[10] Prosecution Submissions dated 14 August, 2020, §14.

[11] Submissions by 1^st Accused dated 16 August, 2020, §1.1(2).

[12] Porter v Magill [2002] 2 AC 357, 494.

[13] That because there was a concurrent between the parties to the appeal as to the applicable test.

[14] (2003) 6 HKCFAR 322, §20-24.

[15] (2014) 17 HKCFAR 281. See also ZN v Secretary for Justice [2016] 1 HKLRD 174, §28-32, 36-37

[16] (2000) 201 CLR 488, §12.

[17] Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, §6 per Gleeson CJ, McHugh, Gummow & Hayne JJ. The phrase is attributed to Hewart CJ in R v Sussex Justices; Ex parte McCarthy [1924] 1 KB 256, 259.

[18] Komal Patel v Chris Au [2016] 1 HKLRD 328, §3.

[19] Helow v Secretary of State for the Home Department [2008] 1 WLR 2416, §2.

[20] [2008] 1 WLR 2416, §2-3

[21] (2000) 201 CLR 488, §53. Footnotes omitted. This was cited w approval in Komal Patel v Chris Au [2016] 1 HKLRD 328, §13.

[22] The content of the oath is to be found in the Oaths and Declarations Ordinance, Cap. 11, section 17, Schedule 2, Part V.

[23] Ameyaw v McGoldrick & Ors [2020] EWHC 1787 (QB).

[24] See: Guide to Judicial Conduct published by the Judiciary of Hong Kong in 2004. In Part B, in §18, the guide notes “Impartiality is the fundamental quality required of a judge.” In §19 the Guide asserts “Justice must be done and must be seen to be done. Impartiality must exist both as a matter of fact and as a matter of reasonable perception. If partiality is reasonably perceived, that perception is likely to leave a sense of grievance and of injustice having been done, which is destructive of confidence in judicial decisions.”

[25] (2010) 13 HKCFAR 314, §185. This was followed in Vivien Fan v HKSAR (2011) 14 HKCFAR 641, §101

[26] Re JRL; Ex Parte CJL (1986) 161 CLR 342, 352 per Mason J.

[27] (2014) 17 HKCFAR 281, §38. As Zervos J observed in ZN v Secretary for Justice (above) §38-40, pair claims of bias were not sufficient to mount a recusal application. However, as will shortly appear, I respectfully disagree with the observations of Zervos J about the position where the applicant is an arm of the Hong Kong government: §1, 60-61.

[28] [2000] QB 451, §22.

[29] [2016] 1 HKLRD 328, §61.

[30] This decision has been followed and reinforced in HKSAR v Kong Pui Lam [2012] 4 HKC 551, [2012] 4 HKLRD 167 and HKSAR v Ngoma Juma Shabani [2015] HKCU 2049 (unreported, CACC 214/2014, 2 September 2015).

HKSAR v. CHEN KEEN (alias JACK CHEN) AND OTHERS

Related cases with same parties

Files (17)


16 Dec 2010	1^st Accused and 2^nd Accused arrested and charged with conspiracy to defraud and money-laundering.
31 Jul 2011	3^rd Accused arrested on arrival in Hong Kong.
26 Oct 2011	Worldwide restraint order imposed against each accused and the wife of the 1^st Accused.
	Wife of the 1^st Accused arrested and charged with money laundering.
14 Sep 2012	The accused elected a Preliminary Inquiry.
7 Jan 2013 to 13 Feb 2014	Preliminary Inquiry pursuant to Part III of the Magistrates Ordinance, Cap 227. All of the critical witnesses in the subsequent trials testified in the Inquiry. All accused committed for trial to the Court of First Instance.[42]
7 Oct 2013 to 25 Aug 2014	Trial before the District Court of wife of 1^st Accused and Wu Wing Kit[43] on money-laundering charges.[44] Both were convicted. They appealed against their convictions.
13 Oct 2015 to 29 Apr 2016	Trial in the Court of First Instance of the accused on charges of conspiracy to defraud and money-laundering.
26 May 2016	Appeal against conviction by wife of 1^st Accused and Wu Wing Kit allowed. Retrial ordered.[45]
6 Jun 2016	Sentencing of the accused. Total sentences were: 1^st Accused - 7 years and 9 months’ imprisonment 2^nd Accused - 8 years and 3 months’ imprisonment 3^rd Accused - 5 years’ imprisonment The accused lodged appeals against conviction.
1 Sep 2017	Verdict on retrial of wife of 1^st Accused and Wu Wing Kit. Both acquitted.
21 Feb 2017	Application by 1^st Accused for bail pending appeal - refused.
12 Apr 2017	Application by 2^nd Accused for bail pending appeal - refused.
18 Jul 2017 to 28 Jul 2017	Appeal against conviction by accused to the Court of Appeal.[46]
16 Apr 2018	Appeal against conviction to Court of Appeal dismissed.
14 Dec 2018	Application for leave to appeal to the Court of Final Appeal granted. Bail pending appeal granted to each accused.[47]
30 Aug 2019	Appeal to the Court of Final Appeal allowed and retrial ordered.[48] The accused complain that they were not given the opportunity to oppose the order for retrial.
10 Oct 2019	Letter from those representing the accused asking for the trial to be fixed for after January 2021 to accommodate counsel’s diary.
8 Jan 2020	Order for costs in favour of accused.[49]
11 Nov 2020 11 Jan 2021	Solicitors for 2^nd Accused informed the Court that they were not in funds. Date fixed for retrial.
8 Feb 2021	Adjourned date of retrial. The original date (11 Jan 2021) was adjourned in the hope that 2^nd Accused could come to some arrangement about legal funding for the retrial.
18 Feb 2021	Accused arraigned on retrial.
16 Jun 2021 6 Aug 2021	Discharge of jury. Ruling awarding costs of the retrial to accused.