HKSAR v. Lo King Fat and Another

Case No.CACC 368/2014

Court

Court of Appeal

Date23 Oct 2015

Judge—

Case Document

100%Judiciary

CACC 368/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 368 OF 2014

(ON APPEAL FROM HCCC NO. 476 OF 2012)

________________________

BETWEEN
	HKSAR	Respondent
	and
	LO King-fat (盧敬發)	1^st Applicant
	IP Wing-lun (葉泳倫)	2^nd Applicant

________________________

Before: Hon Macrae JA in Court

Date of Hearing: 16 October 2015

Date of Judgment: 23 October 2015

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JUDGMENT
____________________

1.The two applicants faced an indictment which contained two counts, namely Conspiracy to defraud, contrary to common law and punishable under section 159C(6) of the Crimes Ordinance, Cap 200 (Count 1), and Conspiracy to offer advantages to an agent, contrary to section 9(2)(a) and 12(1) of the Prevention of Bribery Ordinance, Cap 201 and sections 159A and 159C of the Crimes Ordinance (Count 2). The 1^st applicant was charged with both offences, whereas the 2^nd applicant was charged with the offence in Count 2 alone. After trial before Deputy Judge Lugar-Mawson and a jury, the 1^st applicant, who was D1 at trial, was convicted on Count 1 but acquitted of Count 2, while the 2^nd applicant, who was D5 at trial, was convicted on Count 2. They were each sentenced to 3 years’ imprisonment. I shall, as have counsel in argument, refer in this judgment to the two applicants by their numerical trial designations.

2.By Count 1, the prosecution alleged that between 1 January 2008 and 14 May 2010, D1 and Choy Ping-fai (“D2”), conspired with Tan Sim-chew (“Tan”), Fu Zi-cong and Chan Yiu-kuen (“Holfred Chan”) to defraud The Stock Exchange of Hong Kong Limited (“SEHK”), Benefun International Holdings Limited (“Benefun”), and Benefun’s existing shareholders and potential investors, by dishonestly: (a) falsely representing that the acquisition of Ample Rich Enterprise Limited (“Ample Rich”) by Benefun from Blackpool Stadium Limited (“Blackpool”) for the consideration of $500 m was a transaction conducted and concluded at arm’s length; (b) concealing the fact that $100 m of the $500 m was to be paid to Tan, chairman of Benefun, and/or his authorised person(s); (c) falsely representing that the acquisition would not result in a change in the composition of Benefun’s board of directors; (d) causing SEHK to approve the publication by Benefun of an announcement and a circular in respect of the acquisition; and (e) causing Benefun to approve, confirm and ratify an agreement in relation to the acquisition.

3.By Count 2, the prosecution alleged that the two applicants, D2, Lai Yiu-keung (“D3”), Chang Kin-man (“D4”), and Sik Siu-kwan (“D6”) had in the same period conspired with Holfred Chan to offer, without lawful authority or reasonable excuse, advantages to Tan, chairman and executive director (and as such, an agent) of Benefun, the advantages being (i) a gift, loan, fee, reward or commission consisting of Benefun’s promissory note to the value of $100 m, and/or (ii) the payment of $80 m, as an inducement to or reward for or otherwise on account of Tan doing or having done certain acts in relation to his principal Benefun’s affairs or business, namely causing (a) Benefun to acquire a plantation business in Xinjiang, China, (b) causing Benefun to commit to pay a purchase price of $500 m, and/or (c) causing a change to the composition of Benefun’s board of directors.

4.By his Notice of application for leave to appeal filed on 30 October 2014, D5 sought leave to appeal against his conviction on Count 2. On 18 August 2015, D1 filed his Notice of application for leave to appeal against conviction on Count 1 out of time, by which date his application was more than 9 months out of time. However, Mr Tam SC, for the respondent, takes no issue with the lateness of D1’s Notice in the light of his explanations on affirmation.

The prosecution case

Benefun, Tan, D1 and Holfred Chan

5.Benefun was a limited company listed on the main board of SEHK and was at all material times governed by the Listing Rules (“the Rules”), made pursuant to section 23 of the Securities and Futures Ordinance, Cap 571.

6.Under the Rules, a connected transaction includes any transaction between a listed issuer and a connected person, for example, a director or a substantial shareholder of the issuer. In May and June 2008, Tan was the chairman and an executive director of Benefun; he and his associates held some 41% of its shares. Tan was therefore a connected person within the meaning of the Rules.

7.D1 was Benefun’s financial director and company secretary. Upon his appointment as Benefun’s director back in May 1997, he had signed an undertaking to SEHK to comply with the Rules: to act honestly and in good faith in the issuer’s interest, to avoid actual and potential conflicts of interest and duty, and to disclose fully and fairly his interest in contracts with the issuer. Needless to say, Tan had the same duties and responsibilities under the Rules; and both he and D1 must have been aware of this.

8.Holfred Chan, D1’s subordinate, was Benefun’s company accountant; he gave evidence for the prosecution under an immunity from prosecution.

D5 and Super Aim

9.D5 was a certified public accountant.

10.On 8 April 2008, Super Aim Group Limited (“Super Aim”) was incorporated in the British Virgin Islands and was purchased by a Hong Kong company of which D5 was the sole director and shareholder. On the same day, D5 attested a power of attorney, by virtue of which D4 became the authorised agent to manage Super Aim’s affairs. On 25 April 2008, D5 paid for the costs incurred in the acquisition of Super Aim. He retained Super Aim’s company kit and chop in his own office.

The undisclosed agreements between Tan and Super Aim

11.In 2007, Benefun had run into financial difficulties, incurring losses of over $38 m, as a result of which Tan and his associates wished to divest themselves of their interests in Benefun. On 5 May 2008, Tan and D4, acting for Super Aim, entered into an agreement, the principal terms of which were as follows: (i) Tan would, for a consideration of $80 m, sell to Super Aim 626m shares in Benefun, ie, 32% shareholding of which Tan was the legal and beneficial owner; (ii) Super Aim would ensure that all the original assets of Benefun were transferred – free of charge – to Tan or persons designated by him; (iii) Tan would cause the appointment to Benefun’s board of directors such number of persons as Super Aim would nominate to constitute a majority in the board; (iv) Tan and Super Aim would cause the passing of a resolution with respect to the acquisition of a mining business, the pre-determined price or consideration for which was $500 m; (v) the consideration for this acquisition would be settled by a $100 m promissory note to be held by Tan or his authorised representative and $400 m worth of convertible notes; (vi) Benefun would settle the $100 m promissory note with its assets, including a company and certain property development projects in Zhangzhou, and a company and various properties in Xiamen.

12.Between 30 May and 4 June 2008, D1 sent drafts of a supplementary agreement to D6 and prepared two time-tables for the implementation of the Super Aim agreements. The supplementary agreement was executed on or about 4 June 2008.

13.On 4 June 2008, D6 called a meeting at the offices of Messrs Johnny K K Leung & Co, Solicitors, at which D1 and D5 attended, together with D2, D3, D4, D6, Holfred Chan and a person named Peter Ho. D3 was to be the purchaser of Tan’s own 32% shareholding in Benefun. At the meeting, a cheque issued by D3 for $20 m in favour of Tan was given to Holfred Chan, and an escrow instruction letter was given to Messrs Johnny K K Leung & Co, under cover of which Benefun’s documents were placed inside an envelope.

14.D2, who was also at the meeting, had been introduced to D4 by Peter Ho in April 2008; his role was to arrange for an underlying asset worth $500 m. On 10 June 2008, he was able to acquire a long-term operating right over a forestry plantation on the mainland for a mere RMB81 m, while a valuation report subsequently referred to in Benefun’s circular published on 30 September 2008 “hammered” – said the prosecution – the price or value of the operation right into RMB530 m in order to fit the Super Aim agreements.

Blackpool vis-à-vis D5 and D2’s undertaking to perform Super Aim’s contractual obligations

15.The plantation operation right was held by Ample Rich, a wholly-owned subsidiary of Blackpool. D5 was one of Blackpool’s contact persons in a time-table or work schedule prepared by Veda Capital.

16.On 24 June 2008, Benefun entered into an agreement with Blackpool to acquire Ample Rich for $500 m to be settled by way of $400 m worth of convertible notes and a $100 m promissory note in favour of Blackpool, redeemable at the expiry of 18 months from the date of the agreement (ie, from 24 December 2009). On the same day, D2 executed an undertaking, which stipulated specifically that Blackpool beneficially owned Super Aim, by virtue of which Blackpool undertook to perform the Super Aim agreements.

Benefun’s announcement and circular vis-à-vis D1 and D5

17.Under the Rules, Benefun’s acquisition of Ample Rich amounted to a Very Substantial Acquisition (VSA). Accordingly, full and frank disclosure to independent shareholders was required in respect of the following matters: (i) the arrangement for the sale by outgoing shareholders of their shares; (ii) the injection of assets into the issuer; and (iii) the buyback of the issuer’s assets by outgoing controlling shareholders. In addition, an announcement and a circular had to be vetted by SEHK and then published on its news website. The issuer’s directors had the sole responsibility under the Rules for deciding what information was material and must therefore be disclosed in the announcement and circular, which were to contain complete and accurate information in all material respects.

18.D1, together with others, was involved in the drafting and publication of Benefun’s announcement on the acquisition of Ample Rich, which was published on 7 July 2008. In respect of the 30 September 2008 circular, calling for an Extraordinary General Meeting (“EGM”) to be held on 20 October 2008 to approve the acquisition, both D1 and D5 had been shown its drafts, either directly or indirectly. The announcement and the circular were lengthy documents, but they contained no reference to the Super Aim agreements, Tan’s disposal of his shares, Tan’s buyback of the Xiamen properties, or D2’s undertaking to perform the Super Aim agreements; and there were, in both documents, misrepresentations concerning the circumstances of the acquisition.

19.In the announcement, it was said, contrary to the terms of the Super Aim agreements, that after the acquisition, Benefun intended to retain the existing management and professional team of the PRC company, and its directors confirmed that there would be no change in the composition of the board. It further stated, again contrary to the Super Aim agreements, that to the best of the directors’ knowledge, information and belief, the vendor and its ultimate beneficiary were not connected persons within the meaning of the Rules, that no shareholders had any material interests in the acquisition and that no shareholders were required to abstain from voting to approve the acquisition, including the issue of the convertible notes. The announcement also averred that the consideration was arrived at after arm’s length negotiation, when the truth was that the consideration had been pre-determined with no negotiation at all. Similar false representations were made in the circular.

20.On 20 October 2008, Tan, Holfred Chan, and the two applicants attended the EGM, as did D2’s wife. The acquisition was approved unanimously.

Change in composition of Benefun’s board and D5

21.All of the four executive and three independent non-executive directors appointed to Benefun’s board before 1 January 2008 resigned or stepped down between 14 July 2008 and 14 May 2010; active steps had been taken to secure the resignation of one of them. Of the directors who were appointed after 1 January 2008, available evidence showed that one was D2’s wife, another joined the board at D2’s invitation, and yet another at the invitation of D2’s wife.

22.A handwritten note and other documentation relating to Benefun’s change of directors were seized in D5’s office, and D5 had sent e-mails to D6 and to one of Tan’s associates concerning Benefun’s change of directors. Further, D6 had advised D5 that firm control of the board would be maintained until full payment to Tan of the outstanding $30 m was made.

Tan’s disposal of Benefun’s shares and the $80 m payment to Tan and D5

23.Under the Super Aim agreements, Tan was to sell 626 m shares in Benefun for $80 m. Between 30 June and 31 July 2008, he and his associates sold through the market and by private placement some 488 m shares in Benefun. Between 13 May and 26 June 2008, D3 paid him a total of $50 m. There were, however, problems in respect of the payment of the balance of $30 m.

24.On 18 November 2008, D6 sent an e-mail to D5 spelling out conditions which must be fulfilled before the completion of the acquisition, in particular, confirmation as to the payment to Tan of the outstanding balance of $30 m. There followed a series of e-mails, some involving D5, in which references were made to matters pertaining to the agreement and the undertaking. In early February 2009, D5 was present at a meeting with Tan, D4 and Holfred Chan, in which the issue of the outstanding balance was addressed. The balance of $30 m was not fully paid to Tan until 15 October 2009.

Settlement of the $100 m promissory note with Benefun’s assets

25.On 9 July 2008, D1 sent Tan a list of BVI companies and asked him to select one to be the holder of the promissory note. Headfame International Limited (“Headfame”) was the chosen company and on 16 July 2008, Holfred Chan purchased it at Tan’s instructions. The only shareholder of Headfame was Tan’s nominee, who also acted as one of the two directors, while a colleague of Holfred Chan at Benefun was asked “to lend his name” to stand as the other director of Headfame. D1 had control of Headfame’s bank account, being the contact person in the account opening document and having possession of blank cheques pre-signed by the only authorised signatory to the account.

26.In October 2008, Blackpool assigned, via an intermediary who paid Blackpool a nominal sum of $10, the $100 m promissory note to Headfame also for a nominal consideration of $10. The promissory note was subsequently redeemed by (i) Benefun paying Headfame $43 m on 31 December 2008; (ii) Benefun assigning, via its subsidiary Fun Xiamen for which D1 acted, the Xiamen properties to Headfame for $50 m, which was settled on 21 May 2009 by a partial redemption of the promissory note for that amount; and (iii) Benefun paying Headfame $2.8 m directly on 27 May 2009 and $5,916,878.29 indirectly via Zhangzhou Gao Hui on 31 May 2009 (the overpayment in the sum of $1,716,898.29 was subsequently returned to Benefun in two amounts between 4 and 29 March 2009).

Convertible notes

27.Upon the completion of the acquisition on 19 November 2008, three convertible notes with a face value of $270 m, $60 m and $70 m, thus totalling $400 m, were issued in favour of Blackpool. Since SEHK’s permission for the conversion shares to be allotted and issued was required, Benefun sought such an approval on 24 October 2008, which approval was granted on 30 November 2008.

28.Neither D1 nor D5 had received any allotment of Benefun’s shares upon conversion of the notes.

The prosecution’s position

29.The prosecution alleged that D1 had conspired with others to defraud SEHK, Benefun and its existing shareholders and potential investors on these bases. First, the Super Aim agreements took no account of the interests of the independent shareholders and the investing public; these shareholders and the investing public had been seriously misled by the announcement and the circular, there being no disclosure in them of the Super Aim agreements and its related dealings. Secondly, the independent non-executive directors of Benefun were deprived of material information necessary for the making of an informed decision in respect of the Ample Rich acquisition. Thirdly, SEHK had been misled and prevented from discharging its statutory duty to regulate the issuer pursuant to the Rules.

30.Further, the prosecution alleged that the $80 m and/or the $100 m permission note received by Tan himself and Headfame constituted an advantage which D5 had conspired with others to offer Tan.

The defence case

31.D1 and D5 were persons of good character. They elected not to testify before the jury. Since the first ground of appeal advanced on behalf of D5 by Mr Blanchflower SC, with him Mr Chan, criticizes the judge’s summing-up of D5’s case for what it does not include, as well as for its dismissal of those points which were included, I should say something about the case advanced at trial by his then counsel (who was neither Mr Blanchflower nor Mr Chan).

32.D5’s counsel at trial had argued that there was no, or no sufficient, evidence implicating D5 in the conspiracy to offer an advantage to Tan in Count 2. Making references to that part of the prosecution evidence favourable to D5, including D6’s video recorded interviews, counsel argued that there was no evidence to show that D5 was involved in the negotiation or implementation of the Super Aim agreements, and no evidence to show that he was aware of (i) the fact that the Super Aim agreements were being performed, or (ii) D2’s undertaking to perform the Super Aim agreements, which undertaking was said to be pivotal to the prosecution case. It was stressed before the jury that knowledge of the Super Aim agreements alone could not make D5 a party to the conspiracy to offer advantages to Tan. It was pointed out that D5 was not charged with the conspiracy in Count 1 and was not, therefore, alleged to have been involved in the false representations contained in the announcement and circular. While D5 did deal with the distribution of the convertible notes from November 2008, it was submitted that he did so, and that he was in possession of relevant documents, only in his professional capacity as an accountant, and not while acting in furtherance of a conspiracy, the existence of which would have required detailed investigation by a forensic accountant after the event.

The jury’s question and the judge’s response

33.After the jury had retired on the first day of their deliberations, and before they re-commenced their discussions on the second day of their deliberations, they asked the judge a question concerning Count 2. It was posed as a hypothetical example in the following terms: “For example: A provide interest to Tan through B. B no intention to provide interest to Tan. B just helped to handle the process. B has knowledge on agreement. In this situation whether (1) A & B regarded as conspirator to offer advantage? (2) If B is not regarded as conspirator, 2^nd Count on A can be established?”

34.Following discussions with counsel, the judge replied to the jury’s question as follows:

“COURT: Thank you ladies, thank you, sir. I hope you got some rest in the night. I’m sorry we kept you waiting but we have a question from you which I’ve needed to discuss with counsel. We’ve concluded those discussions and my first job is to read your question out so it’s on the court record.

It is headed ‘Question concerning 2nd count’. “For example, A provide interest to Tan through B; B no intention to provide interest to Tan, B just helped to handle the process. B has knowledge on agreement. In this situation, whether, one, A and B regarded as conspirator to offer advantage; if B is not regarded as conspirator, 2nd count on A can be established.”

As to your first question, all I can do is repeat the direction I gave you yesterday and the direction I gave you last week, and it is: in order to establish the guilt of the defendants on the 2nd count, the prosecution must prove beyond reasonable doubt against each defendant, first, that he was party to an agreement with at least one of the other defendants and/or with Holfred Chan that the promissory note and the $80 million payment, or just one of them, be offered to Tan.

So you must be satisfied that he was party to an agreement with at least one of the other defendants and/or Holfred Chan that the promissory note and the $80 (million?) payment, or just the promissory note, or just the $80 (million?) payment be offered to Tan. That’s the first step.

The second step is that you must be sure, the prosecution must have satisfied you to the standard of proof beyond a reasonable doubt that at the time he joined that agreement, he and his co-conspirators intended the $100 million promissory note and/or the $80 (million?) payment to be an inducement to, or reward for, Tan doing or having done certain acts in relation to Benefun’s affairs or business. That is to say for Tan ensuring, or having ensured that Benefun acquired the Xinjiang plantation, that Benefun paid $500 million for it, and/or that there was to be a change in the constitution of Benefun’s board, or just two, or just one of those acts.

I spoke to you yesterday that if you decided it was just one or two of those acts, you must be unanimous or at least of a majority of six to two in deciding which act or acts it was.

The third thing you have to be satisfied of in respect of each defendant is that at the time he joined that agreement, he intended that it be carried out. So you must be satisfied that each defendant intended that the agreement be carried out.

The fourth thing you have to be satisfied of is that the defendant whose case you are then considering did not have lawful authority or reasonable excuse for offering the advantages to Tan. So that’s all I can tell you in relation to your first question.

As far as your second question is concerned, which is, “If B is not regarded as a conspirator, the 2nd count on A be established,” the answer to that is, yes, it can be established provided you are sure that A was party to an agreement with at least one other of the defendants and/or with Holfred Chan. The essence of a conspiracy is that there are at least two persons involved in the agreement.

So that’s all I can say to you, ladies and gentlemen. Thank you.

Now, I’ve got to formally direct you to return to the jury room to continue with your deliberations. Before I do that, we have to swear in a new usher, so can that usher please take the oath or affirmation.

(Usher affirmed)

COURT: Thank you very much indeed. Lead the jury away to the retirement room.”

D1’s grounds of appeal

35.Mr Ross, counsel for D1 on this application but not at trial, seeks leave to argue two grounds of appeal.

36.First, it is said that the judge erred in directing the jury that they could convict D1 on Count 1 by finding that he was a member of one conspiracy to defraud and that D2 was a member of another or a different conspiracy to defraud. In other words, he was encouraging in the jury a process of reasoning by which they could find two separate conspiracies, but with neither involving D1 and D2 acting together as conspirators.

37.The passage which is said to have encouraged this possible line of reasoning was as follows:

“I said to you last week that you must consider the case for and against - I am dealing now with the 1^st count of conspiracy to defraud - I said you must consider the case for and against the 1^st and 2^nd defendants separately. Let me just read them out to you. At the top is the case number, 476/2012: Direction sheet for the jury, 1^st count, conspiracy to defraud. You must consider the case for and against the 1^st and 2^nd defendants separately. In order to establish the guilt of the 1^st defendant and 2^nd defendant on the 1^st count, the prosecution must prove beyond reasonable doubt against each defendant, firstly, that he entered into an agreement with at least one of the persons named in the Particulars of Offence to use at least one of the above five means set out in the particulars to achieve their objects.

It need not necessarily be an agreement with each other; that is to say, the agreement need not necessarily be between the 1^st and 2^nd defendants. You may, for example, find that the agreement as regards the 2^nd defendant was between the 2^nd defendant, Tan, Fu and Holfred Chan and the 1st defendant was not part of it. Or that - and again it is by way of example only - the agreement as regards the 1^st defendant is between the 1^st defendant, Tan, Fu and Holfred Chan and the 2^nd defendant was not part of it.”[1]

The judge had in fact given the same direction earlier in his summing-up, also in the context of a direction to the jury to consider the case of D1 and D2 separately.[2]

38.Mr Tam, in response, argues that the direction has been removed from its context, which was a direction in relation to the separate consideration of verdicts. The judge was merely making the point, by way of example, that because the jury found D1 guilty of the conspiracy in Count 1 did not mean that they must find D2 guilty of the same count; or mutatis mutandis that they must find D1 guilty because they found D2 guilty. He submits that it is unrealistic to suggest that the jury would have embarked on the line of reasoning contended for by Mr Ross, when the prosecution had made it clear that there was only ever one conspiracy to defraud involving D1 and D2, and when the judge had specifically warned the jury in relation to their consideration of Count 1 that:[3]

“It is important that you bear in mind that the defendants can only be convicted of the conspiracy charged against them. They cannot be convicted of unrelated, similar or parallel conspiracies within the period covered by the charge.”

The judge repeated this direction in relation to Count 2.[4]

39.Mr Tam might also have added that, since the prosecution had only ever alleged one conspiracy, and since the jury ultimately convicted both D1 and D2 (who were the only defendants on trial for this offence) of Count 1, the jury cannot sensibly have embarked on the impermissible process of reasoning suggested by Mr Ross, even accepting the possibility that they could have interpreted the judge’s direction on separate consideration of verdicts in this way.

40.In my judgment, this ground of appeal is neither realistic nor reasonably arguable and leave to appeal against conviction on this ground is refused.

41.By his second ground of appeal, Mr Ross submits that the judge erred in failing to direct the jury that D1 could not be convicted unless a proper majority of the jurors were satisfied that D1 had conspired to defraud the same persons or entities referred to in Count 1, namely SEHK, Benefun or Benefun’s existing shareholders and potential investors. He argues that the judge should have given a so-called Kevin Brown direction, in accordance with the authority of the same name.[5] The parties said to have been defrauded may have had different interests at stake and the jury ought to have been told to agree on which party was defrauded by the allegedly fraudulent conduct.

42.In fact, the judge did give a Kevin Brown direction in respect of the five particulars of alleged fraudulent conduct ((a) – (e) in para 2 supra), having earlier given a similar direction in respect of the particulars in Count 2.[6] In respect of Count 1, he said this:[7]

“The same comments apply in the case of the 1^st count where five dishonest alleged acts are particularised. If you find there was a conspiracy, as the prosecution alleges there was, you do not have to be sure that it was part of the agreement that the conspirators agreed that all five dishonest acts be committed. You could - again it is by way of example - decide that only four of the acts were agreed upon and intended to be brought about, or just three of the acts, or two of them, or even just one. If you are of that view, then that, again, is sufficient for you to be satisfied that a conspiracy existed.

But just as much as is the case in the 2^nd count, you have to be unanimous or of a sufficient majority in deciding which dishonest acts or act it was, and in this case, a sufficient majority is at least six of you, six of the eight of you.”

43.Mr Tam points out that it was never an issue at the trial that the parties defrauded may have had different interests at stake nor was it ever contended by the defence that while, for example, SEHK may have been defrauded, Benefun was not. Since it was never in issue, it was unnecessary to complicate an already lengthy and complex summing-up with a further Kevin Brown direction concerning the so-called “victims” of the fraudulent conduct. Besides, the prosecution case was that SEHK, Benefun, and its existing shareholders and potential investors, were all affected by each of the five fraudulent acts. Because the details were concealed from the company, the acquisition was approved at an EGM, and SEHK was then caused to approve the publication of Benefun’s misleading announcement and circular in respect of the acquisition, which in turn deceived the general public, including Benefun’s existing shareholders and potential investors. In reality, there was no sensible distinction between the so-called “victims” and, once the jury agreed on one of the particulars of fraudulent conduct, then each of the persons or entities identified in the count was defrauded.

44.Again, I do not consider that the ground of appeal that there should have been a Kevin Brown direction (or rather, a further Kevin Brown direction) in relation to the particular parties defrauded is either realistic or reasonably arguable. I refuse leave to appeal against conviction on this ground as well.

45.In the circumstances, leave to appeal against conviction by D1 on both grounds of appeal is refused.

D5’s grounds of appeal

46.Mr Blanchflower SC put forward two grounds of appeal on D5’s behalf: first, the judge erred in failing properly to summarise D5’s case and the evidence and points in D5’s favour, leading to a summing-up which was unbalanced and unfair; and secondly, the judge erred in his answer to the jury’s question (in particular, the first part of that question) by providing the jury with a standard direction on the elements of conspiracy without addressing whether, in the scenario described by the jury, A and B could be guilty of conspiracy to offer an advantage to Tan.

47.So far as the first ground is concerned, it is submitted by Mr Blanchflower that the judge, instead of setting out the salient features of D5’s case, as he had earlier said he would do[8], merely repeated certain points for the prosecution before demolishing those made on behalf of the applicant by his counsel at trial. This he achieved in less than 2 pages of summing-up.

48.Mr Tam, on the other hand, points out that D5 had not given evidence, nor was there any record of interview before the jury setting out his case. He accepts that there were matters mentioned in D5’s counsel’s closing speech which were not dealt with by the judge but submits that it is not the function of the judge to give a second speech for the defence. He says that the case of D5 was sufficiently balanced and fair in the circumstances.

49.The closing speech of counsel for D5 was given over 24 and 25 September 2014. The judge’s summing-up commenced on 29 September and concluded on 7 October, which was also the day on which the judge dealt with D5’s case. Mr Blanchflower argues that in those circumstances it was particularly important for the judge to remind the jury of the salient features of defence counsel’s speech: instead, his summary was rudimentary, unhelpful and dismissive. Mr Tam counters that argument by saying that there is no authority requiring a judge in a lengthy or complex case to repeat points made in the speeches of defence counsel, particularly where the issues are obvious to a jury.

50.I do not intend to go further into the merits of this debate, on which there are respectable points to be made on each side. I am satisfied that this ground of appeal is reasonably arguable and I grant leave to appeal on this ground.

51.The second ground of appeal complains that the judge did not specifically and properly answer the jury’s question after they had retired to consider their verdicts. Indeed, since he expressed himself as not fully understanding the question, the judge should have clarified it with the jury instead of simply repeating a legal direction he had already given twice before. He relies inter alia on the decision of the Court of Appeal for British Columbia in R v Shannon (2011) BCCA 270, at para’s 46 to 53.

52.It seems to me that the jury’s question, which I have set out at para 33 supra, was in fact readily understandable. The jury were posing a hypothetical question concerning the conspiracy in Count 2 that if A provided an advantage to Tan through B, who knew about the agreement and helped to handle the arrangement but did not himself intend to provide any advantage to Tan, whether A and B were both conspirators or, if B was not a conspirator, whether Count 2 could be established against A alone.

53.Mr Blanchflower suggests that, although the jury had prudently dressed their question up as a hypothetical set of facts, A and B most probably referred to D2 and D5. If that be correct, and if my understanding of the question is right, it seems to me that the answer the judge gave[9] would have answered the jury’s question. Certainly, they did not come back to the judge on the issue.

54.As for whether the approach advocated in Shannon should apply in this jurisdiction which, as Mr Blanchflower recognises, has traditionally shied away for obvious reasons from directly questioning jurors about their thought processes without warning, particularly when they are in the middle of their deliberations, the question does not arise if my understanding of the jury’s question is correct.

55.The judge properly raised the jury’s question with all counsel and the consensus appears to have been that the safest course was to repeat the direction as to the meaning of conspiracy in respect of Count 2.[10] Counsel for D5 did not demur: indeed, he did not say anything. Nor did counsel for D2.

56.In all the circumstances, I do not consider this to be a reasonably arguable ground of appeal.

Conclusion

57.Accordingly, I refuse D1 leave to appeal on both of his grounds of appeal. In respect of D5, I grant leave to appeal on his first ground of appeal but refuse leave to appeal on his second ground.