HKSAR v. Luk Kin Peter Joseph and Another
Read the full judgment text of CACC 283/2014 on BabelCite. This Court of Appeal judgment was delivered on 16 November 2015.
1. By leave granted by McWalters JA on 19 January 2015, the 1 st and 2 nd appellants appealed against their convictions on 5 August 2014 after trial by District Court Judge Browne of a charge of conspiracy between 10 October and 18 December 2008 for agents to use a document, namely the minutes of the Board of Directors of Biogrowth Assets Limited (“BAL”), with intent to deceive their principal, contrary to section 9(3) and 12(1) of the Prevention of Bribery Ordinance, Cap. 201 (“the Ordinance”)
Cited by 1 case · Cites 7 cases
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CACC 283/2014 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CRIMINAL APPEAL NO. 283 OF 2014 (ON APPEAL FROM DCCC NO. 851 OF 2013) ____________ BETWEEN
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________________________ J U D G M E N T ________________________ Hon Lunn VP: 1.By leave granted by McWalters JA on 19 January 2015, the 1st and 2nd appellants appealed against their convictions on 5 August 2014 after trial by District Court Judge Browne of a charge of conspiracy between 10 October and 18 December 2008 for agents to use a document, namely the minutes of the Board of Directors of Biogrowth Assets Limited (“BAL”), with intent to deceive their principal, contrary to section 9(3) and 12(1) of the Prevention of Bribery Ordinance, Cap. 201 (“the Ordinance”) and section 159A and 159C of the Crimes Ordinance, Cap. 200 (Charge 1). Further, the 1st appellant appealed against his conviction of offering an advantage, namely 1.5 million shares of China Mining Resources Group (“CMRG”), on or about 3 November 2008 to an agent, namely the 2nd appellant, contrary to section 9(2)(a) and 12(1) of the Ordinance (Charge 2), and the 2nd appellant appealed against her conviction of accepting that advantage as an agent, namely from the 1st appellant, contrary to section 9(1)(a) and 12(1) of the Ordinance (Charge 3). The Trial The Charges Charge1 2.The Statement of Offence of Charge 1 alleged that the appellants had conspired as agents to use a document with intent to deceive their principal contrary, inter alia, to section 9(3) of the Ordinance. The Particulars of Offence averred of the appellants that they:
Charge 2 3.The Statement of Offence of Charge 2 alleged that the 1st appellant had offered an advantage to an agent, namely the 2nd appellant, contrary to section 9(2)(a) and 12(1) of the Ordinance. The Particulars of Offence averred that the 1st appellant:
Charge 3 4.The Statement of Offence of Charge 3 alleged that the 2nd appellant as an agent had accepted an advantage, contrary to section 9(1)(a) and 12(1) of the Ordinance. The Particulars of Offence of Charge 3 were drafted in similar terms to Charge 2, but to reflect the reciprocal offence of the 2nd appellant’s acceptance of that advantage. Background 5.The charges arose from the sale by BAL of the entire issued share capital, namely 20 million shares, of Cell Therapy Technologies Centre Limited (“CTTC”) to United Easy Investment Limited (“UEIL”) for a consideration of $15 million on 21 November 2008. On that day CMRG published an announcement of the sale and purchase agreement between the parties, in which it stated that:
6.It was an admitted fact that BAL, a company incorporated in the British Virgin Islands, was a wholly-owned subsidiary of CMRG and that CTTC, a company incorporated in Hong Kong, was a wholly-owned subsidiary of BAL. CMRG, a company incorporated in Bermuda, previously known as Innomaxx Biotechnology Group Limited, was a company which had been listed on the Stock Exchange of Hong Kong Limited since 1997. CMRG 7.On or about 24 September 2004 the 1st appellant acquired 261,689,500 million shares of CMRG, which then represented 12.43% of the issued share capital of CMRG. The 1st appellant was a director of Innomaxx/CMRG on and between 2 August 2005 and 6 July 2007 and Chief Executive Officer on and between 28 November 2005 to 7 July 2007. The 2nd appellant, a qualified accountant, was appointed the financial controller of Innomaxx on 1 January 2006 and company secretary on 1 May 2006. On 17 January 2007 she resigned as company secretary. Her subsequent resignation as financial controller of the company took effect on 1 June 2007. BAL 8.The 1st appellant was a director of BAL on and between 28 September 2005 and 21 November 2008. The 2nd appellant was a director of BAL on and between 1 June 2007 and 21 November 2008. CTTC 9.Having been appointed directors of CTTC on 28 September 2005 and 1 June 2007 respectively, the 1st and 2nd appellants remained directors of the company at all material times. In addition, on 1 June 2007 the 2nd appellant was appointed the financial controller of CTTC. UEIL 10.UEIL was a company incorporated in the British Virgin Islands on 19 February 2007. From 20 April 2007, Madam Ho Pui Fan was its sole director and shareholder at all material times. On 1 December 2010, Madam Ho sold the single share that she held in UEIL to the XSS Group Limited for US$ 1. XSS 11.The XSS Group was a company incorporated in the British Virgin Islands on 8 October 2008. On 28 March 2009, the 1st appellant was appointed its sole director. From that date until 4 September 2011, the 1st appellant held all its issued shares. The prosecution case 12.It was the prosecution case that the minutes of the meeting of the Board of Directors of BAL, dated 21 November 2008 and signed by the appellants, which stated that it was resolved that BAL enter into an agreement with UEIL to sell the 20 million issued shares of CTTC for a consideration of $15 million, contained a statement under the rubric ‘DECLARATION OF INTERESTS’ which the appellants knew to be false, namely that “none of the directors was interested in the transactions therein contemplated.” On the contrary, the 1st appellant was the ultimate beneficial owner of UEIL, the acquisition and funding of which he had orchestrated with the assistance of the 2nd appellant. Madam Ho, the aunt of the 1st appellant’s wife, was merely the nominee of the 1st appellant. In those circumstances, the 1st appellant was not only interested in the sale and purchase of CTTC by UEIL but also a “connected person” under rule 14 A 11(1)(a) and rule 1.01 of the Listing Rules of the SEHK. The resolution stipulated that Mr Chen Shou Wu, a director and Vice-President of CMRG, was authorised to execute the agreement on behalf of BAL and that any one of the two directors of BAL was authorised to sign the related Bought and Sold note and the Instrument of Transfer. 13.The prosecution contended that the purpose of the conspiracy, the subject of Charge 1, entered into by the appellants was to circumvent the consequences, arising from the Listing Rules of the SEHK, of it being declared that the 1st appellant was a party interested in the sale and purchase of CTTC and therefore a connected persons. The Listing Rules required that the fact the 1st applicant was a connected person be disclosed in an announcement by CMRG and that the prior approval of independent shareholders in a general meeting be sought and secured. Further, that CMRG secured the advice of independent financial advisers in respect of the transaction. 14.It was contended that to achieve that objective, Madam Ho had been put forward as the apparent owner of an independent third-party purchaser of CTTC, namely UEIL. As part of that conspiracy the appellants had signed the minutes “with intent to mislead Biogrowth and CMRG (including its directors)” in respect of those assertions.[1] Further, that they intended that those minutes would be relied upon by the Board of Directors of CMRG so that they would be misled into proceeding with the transaction on that basis and publishing an announcement asserting that was the nature of the sale and purchase of CTTC by UEIL, with the result that the transaction was processed and completed on 21 November 2008 without compliance with the Listing Rules. Charges 2 and 3 15.There was no dispute that the 1st appellant had given the 2nd appellant a share certificate, issued on 26 October 2008 in respect of 1.5 million CMRG shares; that the share certificate was stamped with a chop dated 3 November 2008 in respect of the payment of stamp duty; and that the Registry of CMRG shares recorded the date of the transfer of their shares into the name of the 2nd appellant is being 7 November 2008. 16.At issue, was when and for what purpose the 1st appellant had given the 2nd appellant the share certificate. 17.It was the prosecution case that the gift of those shares by the 1st appellant to the 2nd appellant was “…as an inducement or reward… for processing the disposal of CTTC.” [2] In particular, it was asserted that the appellants knew “that the real owner of UEIL was D1 and UEIL was not an independent third party when they signed the Biogrowth minutes to complete the disposal.” [3] 18.The prosecution contended that, at the direction of the 1st appellant, the 2nd appellant was involved in the purchase of UEIL from Offshore Corporations Hong Kong Limited (“OIL”) in April 2007.[4] She provided OIL with a copy of Madam Ho’s identity card and instructions that the registered office was to be an address in Knutsford Terrace, for the attention of the 1st appellant.[5] That address was the registered address of XSS Limited, a company owned by the 1st appellant and his wife. By an e-mail to the 2nd appellant dated 28 April 2007, OIL acknowledged payment of US$860 for the acquisition of UEIL.[6] Further, the prosecution relied on evidence of the 2nd appellant’s involvement in the repayment of a loan of $2 million to UEIL on 20 October 2008.[7] 19.Of the 2nd appellant’s role in the processing of the sale of CTTC, the prosecution pointed to her provision by e-mail to Richard Yeung of CMRG dated 7 November 2008 of the hitherto unknown identity of the buyer of CTTC, namely UEIL, together with corporate information of UEIL.[8] Further, having been provided with the revised draft Sale and Purchase agreement by an e-mail from Richard Yeung dated 11 November 2013, copied to the 1st appellant, the 2nd appellant had responded with comments on that proposed agreement in an e-mail to Richard Yeung dated 13 November 2013, also copied to the 1st appellant, suggesting, inter alia, that the vendor of CTTC be BAL, rather than CMRG, and that a loan due from CMRG to CTTC be paid on completion, rather than within three business days of completion.[9] 20.By an e-mail dated 17 November 2008, Richard Yeung forwarded to the 1st and 2nd appellants a further revised draft of the Sale and Purchase agreement, incorporating the suggested changes, sent to him on 14 November 2007 by Sabrina Fung, CMRG’s lawyer.[10] The Sale and Purchase agreement stipulated as a condition of completion of the agreement the provision to the purchaser by the vendor of a copy of the minutes of the latter’s Board of Directors approving the agreement and the contemplated transactions. 21.By an e-mail dated 20 November 2008, Mary Leung sent the 2nd appellant a copy of the draft minutes of BAL and CCTC, which she had received from the solicitors of CMRG. Each of the set of minutes stated, “It was Noted that none of the directors was interested in the transactions herein contemplated.” [Note: please confirm.]” By an e-mail on the same date the 2nd appellant returned the minutes to Mary Leung with the text “[Note: please confirm.]” deleted.[11] 22.In support of the case against the 2nd appellant, the prosecution relied on out-of-court admissions made by the 2nd appellant to officers of ICAC in video recorded interviews that the 1st appellant had given her the 1.5 million CMRG shares two weeks before the completion of the sale on 21 November 2008. Further, that the gift was a “private bonus” for her painstaking work on the transaction.[12] 23.It was the prosecution case, that it was no coincidence that shortly after the 1.5 million CMRG shares were transferred to the 2nd appellant, stamp duty having been paid on 3 November 2008 and the shares transferred to her name with the Registrar of the company’s shares on 7 November 2008, the 2nd appellant took the first steps to process the sale of CCTC to UEIL by informing Richard Yeung on 7 November 2008 of the identity of UEIL as the purchaser and providing him with related corporate information.[13] 24.The prosecution suggested that the 1st appellant gave the 1.5 million CMRG shares to the 2nd appellant as an inducement/reward for her processing the sale of CTTC. The Defence case 25.The 1st appellant availed himself of the right to give evidence, whereas the 2nd appellant did not. The 1st appellant: Charge 1 26.It was the 1st appellant’s case that his involvement in the disposal of CTTC by CMRG had its genesis in a proposal that he buy CTTC and its blood cord business which was first made to him by Richard Yeung, a fellow director of CMRG, in July 2007. At that time the 1st appellant resigned as a director of CMRG.[14] Richard Yeung had been appointed a director of CMRG at the behest of Investec on 17 January 2007.[15] Investec, a shareholder of CMRG, had introduced the Lead Sun Investments Limited transaction. In consequence, mining became the principal business of CMRG, as Innomaxx was renamed in January 2007. As a result of a share placement by CMRG in the course of that transaction, Investec became a major shareholder of CMRG.[16] 27.In carrying forward the proposal that he buy CTTC, on the advice of Richard Yeung, the 1st appellant caused the 2nd appellant to make enquiries of Mr Stephen Chiu. He was an investment banker with Goldbond Capital Holdings Limited, as it was before it was renamed Piper Jaffray Asia Limited, who provided financial advisory services. The 1st appellant acknowledged that, as a result of that advice, he was aware that at that time a disposal of CTTC to him by CMRG would be a ‘connected’ transaction and the proposal did not go ahead.[17] 28.The 1st appellant said that in early 2008, at the request of Richard Yeung, he had made attempts to identify a third party as a purchaser of CTTC, referring several of them to Richard Yeung. However, no agreement was reached with any of those third parties.[18] 29.In October 2008, the 1st appellant agreed to Richard Yeung’s renewed suggestion that he buy CTTC.[19] An e-mail dated 10 October 2008 from Ms Mary Leung, the company secretary of CMRG, to the company’s lawyers in which he was named as the proposed buyer of CTTC from CMRG reflected that agreement.[20] The 1st appellant said that he understood that, since it was more than a year since his resignation as a director of CMRG, he would not be considered a ‘connected’ person. He was not aware that since he remained a director of CTTC, a subsidiary company on CMRG, he remained to be considered a ‘connected’ person in the proposed transaction.[21] He and Richard Yeung agreed a price of $15 million as the consideration for his purchase of CTTC, which was to be paid by his assumption of the debt owed by CMRG to CTTC.[22] 30.The 1st appellant said that in early November 2008 Richard Yeung approached him and asked him if the proposed disposal of CTTC could be to a third party, telling him that in those circumstances the sale could be completed faster.[23] He agreed and approached three potential investors, one of whom was Madam Ho. She agreed to acquire CTTC, on condition that the 1st appellant continued to look after the business. Later, she told him that she would make the acquisition through UEIL.[24] He informed Richard Yeung that he had secured a purchaser of CTTC and that she was the aunt of the 1st appellant’s wife. Two days later Richard Yeung confirmed approval of the proposal.[25] The 1st appellant informed the 2nd appellant that UEIL was to buy CTTC.[26] 31.Around 10 November 2008, Richard Yeung informed him that the consideration was not to be paid by assignment of the $15 million debt owed by CMRG. Rather, UEIL was required to pay $15 million. The debt was to be repaid three days after completion of the transaction. 32.At Madam Ho’s request he arranged for a short-term loan of $7 million to UEIL to enable her to make the payment of the $15 million consideration in the acquisition of CTTC.[27] 33.The 1st appellant said that he was not involved in the purchase of UEIL in April 2007, but prior to that he had suggested to Madam Ho that if she wished to buy a BVI company, she should contact the 2nd appellant.[28] There was no dispute, as reflected in an e-mail of 20 April 2007 from the 2nd appellant to OIL, that the 2nd appellant had arranged the purchase of UEIL from them, providing a copy of Madam Ho’s identity card and an address at Knutsford Terrace together with a reference to “Attn: Peter Luk”.[29] The 1st appellant accepted that he had instructed the 2nd appellant to help Madam Ho to purchase BVI companies, but it was Madam Ho who chose the name UEIL.[30] The 1st appellant denied that he owned or had any interest in UEIL until December 2010.[31] 34.The 1st appellant said that he had signed the minutes of the BAL board meeting dated 21 November 2008 and asked that they be returned to the 2nd appellant. He did not give any thought as to what would happen to them nor did he discuss them with the 2nd appellant. There was nothing false in the minutes.[32] Charge 2 35.It was the evidence of the 1st appellant that the share certificate representing 1.5 million CMRG shares had been issued to him on the date the certificate bore, namely 26 October 2006, as one of two share certificates issued that day. The other share certificate was for 7,150,000 CMRG shares. The combined total of 8.65 million CMRG shares represented his exercise of a share option, after the completion of the Lead Sun transaction at the end of October 2006. The option had been granted to him in January 2006. The 1st appellant had offered to give the 2nd appellant CMRG shares in June 2006, in face of her threatened resignation from CMRG. The promised gift of the shares was contingent upon the Lead Sun transaction being successfully completed. In prospect of honouring his promise of the gift of the shares, he caused the shares issued, as a result of the exercise of his share option, to be split into two share certificates. In about November 2006, sometime after he received those share certificates, he signed the back of the share certificate representing 1.5 million CMRG shares and gave it to the 2nd appellant. He denied having done that around 3 November 2008 and having given the 2nd appellant those shares as an inducement or reward for her helping him conceal the fact that UEIL was not an independent third party in the sale of CTTC. The 2nd appellant 36.Issue was taken on behalf of the 2nd appellant at trial that it was proved that the 2nd appellant was a party together with the 1st appellant to the conspiracy alleged in Charge 1.[33] In particular, that the 2nd appellant was a party to an agreement in which it was intended to use the false BAL minutes to mislead her principals. There was insufficient evidence to establish that the 2nd appellant knew that the 1st appellant controlled UEIL and that Madam Ho was a mere nominee.[34] So, there was insufficient evidence to establish that the 2nd appellant knew of the alleged falsity in the BAL minutes.[35] 37.In respect of Charge 3, the 2nd appellant relied on the evidence of the 1st appellant as to the circumstances in which he said that he had given her the 1.5 million CMRG shares certificate. That had been done in November 2006 by the 1st appellant to honour his promise of earlier that year to give her those shares on the successful completion of the Lead Sun transaction. It had nothing to do with the disposal of CTTC in November 2008.[36] The answers of the 2nd appellant in an out-of-court video record of interview were not to be taken as an admission that she had been given those shares as a private bonus two weeks before the disposal of CTTC in November 2008 for her part in working on that transaction. Grounds of appeal against conviction The 1st appellant Charge1 38.By Ground 1, Mr Duncan SC submitted that the judge erred in law in finding that BAL could be deceived by the appellants, given that they were the sole directors of BAL and, in the absence of any management, its only controlling minds. By Ground 2, it was contended that the judge erred in law in finding that the appellants were agents of CMRG. By Ground 5, it was submitted that the judge erred in finding that the BAL minutes constituted a “document” for the purposes of section 9(3) of the Ordinance. It was said that, in consequence, the judge erred in convicting the 1st appellant of Charge 1. Charge 2 39.By Ground 3, Mr Duncan contended that the judge erred in law in finding that no permission had been given by BAL to the 2nd appellant to accept the 1.5 million shares from the 1st appellant. Given that the appellants were the sole directors and thus the controlling minds of BAL, the latter knew of and thus gave permission to the 1st appellant to give the 2nd appellant the 1.5 million CMRG shares. 40.By Ground 4, Mr Duncan submitted that the judge erred in fact in concluding that there was a proper evidential basis for finding that the 1.5 million shares in CMRG given to the 2nd appellant by the 1st appellant constituted an “advantage” for the purposes of section 9(2)(a) of the Ordinance. The appellants were not directors or employees of CMRG. They acted as directors of BAL only. In the result, there was no relationship of principal and agent between CMRG and the appellants. It was submitted that, for the reasons advanced in Grounds 3 and 4, the judge erred in convicting the 1st appellant on Charge 2. The 2nd appellant Charge 1 41.By Ground 1, Mr McCoy SC submitted on behalf of the 2nd appellant that the judge erred in law and in fact in finding that there was a principal-agent relationship for the purposes of a conspiracy to commit an offence contrary to section 9(3) of the Ordinance. In his written submissions he acknowledged that, given that the appellants were directors of BAL, they were prima facie agents of BAL. On the other hand, he submitted that was no evidence of any such relationship of the appellants with CMRG. Charge 3 42.By Ground 2, it was contended that in convicting the 2nd appellant of Charge 3, the judge failed to consider whether or not she had permission and therefore lawful authority from the relevant principal to accept the 1.5 million shares. By Ground 3, Mr McCoy submitted that the judge erred in law and in fact in finding that there was sufficient evidence to prove that the 2nd appellant had the requisite mens rea for a conviction under section 9(1)(a) of the Ordinance. 43.By Ground 4, it was contended that the judge erred in convicting the 2nd appellant of Charge 3 in failing to have regard to the fact that the share certificate in respect of 1.5 million CMRG shares was issued in October 2006, and in accepting that the 2nd appellant’s out-of-court statements referred to November 2008, when in fact they referred to 2006. A consideration of the submissions 44.No issue was taken by either of the appellants with the judge’s finding that the appellant’s “…knew that the de facto owner of UEIL was D1 and not an independent third party when they signed the BAL minutes to complete the disposal.” [37] It was upon that allegation, that the allegations stipulated in the Particulars of Offence of Charge 1 were predicated. 45.Most of the arguments advanced in the appeal on behalf of the appellants were not matters with which issue was taken in the trial. In particular, that is the case in respect of the submissions that the knowledge of the appellants that UEIL was not an independent third party, rather it was the nominee of the 1st appellant, and the falsity of the assertions to the contrary in the minutes of BAL was to be attributed to BAL. That was said to follow, given that they were the only two directors of BAL, which was a ‘shell’ company. It had no management and did no business, so that they were in its controlling mind. In consequence, they could not conspire to deceive BAL. To do so, was to conspire to deceive themselves. Similarly, issue was taken in the appeal, but not at trial, that the appellants did not enjoy an agent : principal relationship with CMRG. 46.Further, none of those grounds formed part of the Initial Grounds of Appeal dated 25 August 2014 settled by Mr Duncan on behalf of the 1st appellant. It appears that the genesis of those submissions was the brief observations made by McWalters JA, in granting bail to the 1st appellant on 16 September 2014, in which he said:[38]
47.Having observed that there was no doubt that the 1st appellant was the agent of BAL, McWalters JA said:[39]
Reasons for Verdict An element in the offences - the relationship of agent : principal 48.In his analysis of the law relevant to the offences, the judge noted that it was an element of the offence of all three charges that the respective appellant enjoyed an agent : principal relationship.[40] 49.In respect of Charge 1, he noted that it was an offence:[41]
50.In respect of Charges 2 and 3, the judge noted that it was an offence:[42]
The prosecution case 51.In addressing the prosecution case in respect of Charge 1, the judge said that it was alleged that the appellants had conspired together to use the BAL minutes “with intent to deceive” their principals, BAL and/or CMRG”.[43] Also, that the appellants had conspired to use the BAL minutes “with intent to mislead BAL and CMRG (including its directors)”.[44] 52.Of the elements of Charge 1, proof of which was required by the prosecution, the judge went on to say:[45]
53.It is to be noted, as Mr McCoy pointed out to the Court, that the phrase in the brackets in (1) above was not read out by the judge in his oral rendition of the reasons for verdict, albeit that it is to be found in the written version which he signed. 54.Of the elements of Charges 2 and 3, the judge said:[46]
55.Of the relationship between the appellants, as agents, and BAL and CMRG, the judge said:[47]
56.Of the other side of the relationship, namely that of the companies as principals, the judge said that he was in no doubt that the appellants:[48]
57.The judge’s approach to the issue of proof of the principal : agent relationship of the appellant with BAL and CMRG resonates closely with the written closing submissions of the prosecution.[49] No issue with those assertions was taken in the written submissions of Mr Duncan, who appeared at trial for the 1st appellant, nor in those of Mr Harris SC, who appeared for the 2nd appellant. No doubt, that goes a long way to explaining why, notwithstanding that the judge had identified the issue of proof of the principal : agent relationship of the appellants with the two companies as an element of the offence, the judge did not dwell on the matter in his Reasons for Verdict. 58.Be that as it may, given that it is an element of the offence, it is necessary for this Court to be satisfied that the relationship was established on evidence accepted by the judge. The Ordinance 59.Section 9(3) of the Ordinance provides that:
‘Agent’ 60.Section 2 of the Ordinance provides an inclusive definition of an ‘agent’, namely that it includes “a public servant and any person employed by or acting for another.” Also, it provides an inclusive definition of ‘principal’. However, it is of no assistance in the circumstances of this case. 61.Section 9(1)(a) of the Ordinance provides that:
62.Section 9(2)(a) of the Ordinance provides that:
63.Section 9(4) and (5) provide for the grant of permission to offer or accept an advantage:
Ambit of Charge 1 64.Mr Duncan and Mr McCoy each took issue with the ambit of the offence averred in Charge 1, as stipulated in the Particulars of Offence and as advanced in the prosecution case. Whilst Mr Duncan accepted that it was averred that the appellants were in an agent : principal relationship with BAL, he contended that there was no such stipulation in the charge in respect of CMRG. He contended that the defence of the 1st appellant had been conducted on the basis that the prosecution case was of his agent : principal relationship with BAL only. 65.For his part, Mr McCoy submitted that insofar as the Particulars of Offence of Charge 1 articulated the prosecution case in respect of the agent : principal relationship it did so by reference to the fact that the appellants were directors of BAL. He accepted that the 2nd appellant was an agent of BAL. On the other hand, he submitted that the fact that the 2nd appellant was a director and therefore agent of BAL did not, per se, lead to her being an agent of CMRG. In any event, he contended that no agent : principal relationship between the appellants and CMRG was alleged in any of the charges brought against the appellants. 66.In reply, Mr Tam SC submitted that in their conduct in handling the sale of CTTC as directors of BAL on the instructions of directors of CMRG, of which BAL was a wholly-owned subsidiary, the appellants were acting as agents of CMRG. He pointed to the prosecution written opening, in which notice was given that the prosecution intended to call three directors of CMRG to give evidence that “… D2 was not permitted to accept an advantage (namely the 1.5 million CMRG shares) as a reward for doing an act in relation to the affairs or business of CMRG or CTTC.” [50] 67.There is no doubt that the manner in which the agent : principal relationship had been stipulated in the Particulars of Offence of Charge 1 made the task of identifying the principal less than immediately obvious. The Statement of Offence stipulated a conspiracy “for agents to use document with intent to deceive their principal…” Then, in the Particulars of Offence it was asserted that the appellants “being agents, namely directors of (BAL), which was a wholly-owned subsidiary of (CMRG),... conspired together with intent to deceive (BAL) and/or CMRG… to use a document in respect of which (BAL) and/or CMRG was interested…which was false and the material particular…is and wish to their knowledge was intended to mislead (BAL) or CMRG.” 68.Obviously, the simple and unambiguous mode of particularising the identity of the principal(s) would have been to have stipulated the name(s) of the principal(s) immediately after the word agents, namely “being agents of their principal(s) X, Y, Z”. The basis on which it was asserted that the agent : principal relationship existed was a matter that logically fell to be addressed next in sequence. 69.As is immediately apparent from section 9(3), the term ‘principal’ is used three times. First, as the party the agent intended to deceive. Secondly, as the party interested in the receipt, account or other document which was used by the agent. Thirdly, as the party the agent intended to mislead by the use of the receipt, account or document, which the latter knew contained a statement which is false material particular. 70.It follows, that the Particulars of Offence of Charge 1 required the prosecution to stipulate three times the identity of the principal, with whom the appellants enjoyed an agent : principal relationship. In that context, it is to be noted that, first it was averred that the appellants conspired together “with intent to deceive (BAL) and/or CMRG”. Secondly, it was averred that the parties interested in the minutes of BAL were “(BAL) and/or CMRG”. Thirdly, was averred that the parties that the appellants intended to mislead were “(BAL) and/or CMRG”. 71.Clearly, in Charge 1 both BAL and/or CMRG were stipulated as principals in an agency relationship with the appellants. Ambit of Charges 2 and 3 72.Mr Duncan and Mr McCoy both contended that the prosecution case in respect of Charges 2 and 3, in particular as articulated in the Particulars of Offence, was restricted to one principal and that was BAL. For his part, Mr Tam submitted that it was the prosecution case that the principals of the appellants identified in Charges 2 and 3 were BAL and/or CMRG. 73.First, it is to be noted that the only reference to the word ‘principal’ in the Particulars of Offence of Charges 2 and 3 was in the singular, not the plural. In the respective Particulars of Offence of the two charges it was alleged that the 2nd appellant was an agent, “…namely a director of Biogrowth Assets Limited (“Biogrowth”), which was a wholly-owned subsidiary of China Mining Resources Group Limited (“CMRG”),” and that the advantage was offered/accepted as an inducement to or award for or otherwise on account of the 2nd appellant:
That averment begs the question of the identity of the principal for whom the sale was processed? In addressing that issue it is to be noted that charge 1 averred that the appellants were agents of two principals. That charge was concerned with a period of time 10 October to 18 December 2008, which encompassed the dates stipulated in Charges 2 and 3. 74.In its written opening, the prosecution addressed the issue in describing the prospective evidence of three directors of CMRG. It was stated that it was anticipated that they would testify that:[51]
75.It is to be noted that in that passage of the written opening, which clearly related to Charges 2 and 3, no reference was made to BAL as a principal of the 2nd appellant. Given that only one principal had been stipulated in the Particulars of Offence of each of the charges, it is surprising that the stipulation of two principals in the written prosecution opening did not give rise to a request of the prosecution that the latent inconsistency be resolved, either by amendment to the opening or the Particulars of Offence of those charges. But, no issue was taken. 76.In the event, the three directors of CMRG identified in the written opening were called as witnesses for the prosecution. Of the evidence of Mr Chan Sze Hon (PW3), the judge noted that he had testified that “…staff members of CMRG or its subsidiaries were not permitted to accept any advantages without the consent of the company”.[52] Clearly, in context, that was CMRG. Similarly, the judge noted that Mr Chu Kang Nam said:[53]
77.The fact that the prosecution called directors of CMRG to address the issue of the grant or otherwise of permission to the offer of or acceptance by the 2nd appellant of an advantage was entirely consistent with the identification of CMRG as the principal of the 2nd appellant in respect of Charges 2 and 3, and whose permission was required for the purposes of section 9(4) and (5) of the Ordinance. Conclusion Charge 1 78.I am satisfied that it was the prosecution case as stipulated in the Particulars of Offence of Charge 1 and the prosecution opening speech that the appellants enjoyed an agent : principal relationship with BAL and/or CMRG, and that was apparent to the judge and the defendants at trial. Charges 2 and 3 79.Clearly, the prosecution case as stipulated in the Particulars of Offence of Charges 2 and 3 averred that the offence was committed in relation to one principal only. The date stipulated as the date of the commission of the offences, the subject of those charges, namely on or about 3 November 2008, fell approximately in the middle of the period stipulated for the conspiracy the subject of Charge 1. So, whilst it was the prosecution case that the appellants enjoyed an agent : principal relationship in the overall period of time with both CMRG and BAL, for the purposes of Charges 2 and 3 it was stipulated that the offence occurred in respect of one principal only. 80.I am satisfied that those Particulars identified CMRG as that principal. The reference to CTTC, in addition to CMRG, in the written opening of the prosecution served only to create an element of unnecessary confusion. However, any element of confusion was dissipated by the fact that the prosecution, having indicated in its written opening that it intended to rely on the evidence of the three directors of CMRG to address the issue of the grant or otherwise of permission to an agent to accept an advantage, led evidence to that effect. Clearly, it was alleged that the 2nd appellant was the agent of CMRG, and that the latter was her principal. The prosecution case in its written closing speech 81.In the prosecution written closing speech, the issue of the companies with whom it was alleged that the appellants had an agent : principal relationship was addressed and the principals were identified. It was asserted:
82.As noted earlier, that assertion was followed immediately by counsel identifying the elements of the offence in Charge 1, including: “(1) the principal-agent relationship (this is not in dispute)”. Subsequently, in summarising the prosecution submissions in relation to Charge 1, counsel said:
83.In the context of his submissions in respect of Charges 2 and 3, counsel asserted again:[56]
84.In alleging that, for the purposes of Charges 2 and 3, the appellants were agents of BAL, counsel for the prosecution was changing the way in which the case had been opened. No doubt, that explains how the judge was misled into having regard to that relationship in respect of those charges. 85.As noted earlier, neither leading counsel for the appellants took issue at all in their own written or oral closing speeches with the unambiguous stipulation that it was the prosecution case the appellants enjoyed an agent : principal relationship with BAL and/or CMRG. The judge’s reasons for his findings of an agent : principal relationship between the appellants and both BAL and CMRG 86.Counsel for the appellants complained that there was a paucity of analysis and reasoning given by the judge for his bare finding that the appellants were agents of not only BAL but also CMRG. 87.Clearly, that came about because the judge treated the matter as not being in dispute. That he did so is entirely understandable. The prosecution invited him to do so and, at the very least, the defence acquiesced in that approach. But, his acceptance that was the relationship enjoyed by the appellants with those principals, was supported by the close analysis of the evidence made by the judge, which led him to his ultimate conclusions that the appellants were:
88.Counsel took no issue with the judge’s findings that the fact that the appellants were directors of BAL by itself placed them in an agent : principal relationship with BAL. They were right not to do so. Clearly that was that case. By contrast, issue was taken with the suggestion that the mere fact that they were directors of BAL, together with the fact that it was a wholly-owned subsidiary of CMRG, created an agent : principal relationship between them and CMRG. There is no dispute that ordinarily, directors do not owe duties to shareholders. The issue that arises is whether or not the appellants were agents of CMRG, on the basis that they were “acting for” CMRG and whether the judge found that to be the case.[60] Reasons for verdict 89.Insofar as the judge provided any specific explanation for finding that the appellants were agents of BAL and CMRG, as noted earlier, the judge merely averted to the fact that the appellants were directors of BAL and CTTC:[61]
90.Again, as noted earlier, that finding resonated with his earlier statement in respect of the elements of the offence of Charge 1, namely that the principal : agent relationship “was not in dispute”. [62] Further, it is clear that the judge understood that what was not in dispute was the prosecution case that the principals of the appellants were BAL and/or CMRG:[63]
91.Nowhere in the opening or closing speeches of any counsel or in the Reasons for Verdict was reference made to the definition of the term “agent” in section 2 of the Ordinance, as including “…any person employed by or acting for another.” Of course, that is entirely consistent with there being no issue with the prosecution case as to the asserted agent : principal relationship enjoyed by the appellants. 92.In his analysis of the evidence relevant to the disposal of CTTC, in particular in respect of the role of the appellants, the judge adverted first to the background circumstances in which the disposal came about.[64] Then, he noted that in October 2008 the proposal to dispose of CTTC to the 1st appellant was revived and the first draft of a Sale and Purchase agreement, dated 17 October 2008, was prepared. As evidenced by the e-mails dated 17 October 2008 between Mary Leung and Sabrina Fung, the proposed sale by CMRG was of all the shares of BAL.[65] 93.Then, Richard Yeung told the 1st appellant that it would be easier to dispose of CCTC to a third party. The judge noted that the 1st appellant “…went along with Richard Yeung’s suggestion to find other potential buyers” [66]. Earlier, the judge noted that the 1st appellant said that in carrying out Richard Yeung’s request he had identified three potential investors.[67] 94.The 1st appellant said that in November 2008 he identified UEIL to Richard Yeung as that buyer.[68] By an e-mail dated 7 November 2008, the 2nd appellant provided Richard Yeung with the certificate of incorporation, register of directors and members of UEIL as the proposed purchaser.[69] The judge noted that the 1st appellant agreed that he had instructed the 2nd appellant to provide that information to Richard Yeung and that “… throughout the whole CTTC transaction D2 was complying with his instructions.” [70] 95.As the judge noted, Richard Yeung forwarded that information to Sabrina Fung of CMRG’s lawyers, which information was incorporated in a revised draft of the Sale and Purchase agreement sent on 10 November 2008 to Richard Yeung, which he forwarded to the 2nd appellant by an e-mail on 11 November 2008, “FYI”. The revised draft stipulated UEIL as the purchaser and CMRG as vendor of the shares of CTTC.[71] Then, in an e-mail in response to Richard Yeung dated 13 November 2008, also copied to the 1st appellant, the 2nd appellant sent “some markups in the attached files” and said:[72]
96.By an e-mail, dated 17 November 2008, Richard Yeung forwarded to the 2nd appellant, “FYI”, the revised draft of the Sale and Purchase agreement dated 14 November 2008.[73] Now, it provided that the vendor was BAL. In addition, as the judge noted, the clause which provided that CMRG was required to repay the debt of HK$14.749 million within three days was deleted and a new clause inserted which required CMRG to repay the debt to CTTC upon completion. 97.By an e-mail dated 20 November 2008, from Mary Leung to the 2nd appellant, the latter was provided with draft minutes of BAL and CTTC.[74] Both sets of minutes contained a clause under the rubric ‘Declaration of Interests’, in which it was stated :
98.Within one hour, the 2nd appellant responded by e-mail, attaching the minutes “with some minor markups”. The text in bold type, requiring confirmation, had been deleted in each set of minutes.[75] 99.Obviously, in providing Richard Yeung with UEIL as the prospective purchaser of CTTC, in response to his request for a purchaser to be identified, the 1st appellant took the first step, of a number of steps that he and then the 2nd appellant took, that evidence the fact that they were acting for CMRG. No doubt, there was an element of overlap in the capacity in which they did so. Clearly, the fact that the appellants were directors of BAL did not prevent them acting for CMRG in processing the sale of CTTC. Some of their acts were clearly for the mutual benefit of CMRG and BAL. The 2nd appellant acted in that way in providing Richard Yeung, attached to her e-mail of 7 November 2008, the corporate documentation related to UEIL. The 1st appellant acknowledged that that was done at his request. 100.The e-mail dated 13 November 2008 sent by the 2nd appellant to Richard Yeung was prefaced by the statement:
The e-mail was copied to the 1st appellant. The multiple suggestions that were made in the e-mail evidence the fact that the appellants were there acting for CMRG or, at least, acting for both CMRG and BAL. For example, it was suggested that CMRG was to be displaced as vendor by BAL. Next that “Lisco’s and vendor’s board approval on such transaction” was needed. In all, it was suggested that the approval of CMRG, BAL and UEIL was required. All of those suggestions were accepted and acted upon by CMRG. 101.Of the significance of the need for the board minutes of the parties, in particular that of BAL, the judge said:[76]
102.Of the conduct of the appellants, the judge found:[77]
103.It is to be noted that the judge concluded:[78]
104.Similarly, in respect of Charges 2 and 3, he concluded:
105.Of the 2nd appellant, having determined that she had been given the 1.5 million CMRG shares about two weeks before the disposal of CTTC, the judge said:[79]
106.The judge went on to conclude:[80]
Conclusion 107.In the result, I am satisfied that, although the judge accepted, on the basis that there was no dispute, that the appellants were the agents of CMRG for the purposes of Charge 1,[81] and his finding to the like effect in respect of Charges 2 and 3,[82] that acceptance was confirmed in any event by his analysis of the evidence and the ultimate determinations which he made, to which reference has been made. Could the appellants conspire together with intent to deceive BAL? 108.As the judge noted, the 1st appellant had been appointed a Director of BAL on 28 September 2005. Similarly, he noted that the 2nd appellant had been appointed a director of BAL on 7 June 2007. Both of them resigned as directors of BAL on 21 November 2008.[83] In particular, the judge noted that at the time of the disposal of CTTC, the appellants “were the only directors of both BAL and CTTC.” [84] Given that the issue was not raised at trial, not surprisingly the judge did not advert to the evidence of the management, if any, of BAL relevant to its decision-making process. In the course of the hearing, the Court raised the issue of what evidence supported the undisputed contention made to McWalters JA in the bail application that the company was a ‘shell’ company. Eventually, Mr Tam was able to point to an e-mail dated 10 October 2008 sent by Ms Mary Leung, the company secretary of CMRG, to the latter’s lawyers in relation to the proposed disposal of CTTC. In it, she provided information in respect of BAL:[85]
109.There was no dispute before this Court that in those circumstances the appellants fall to be considered as the directing minds or brains of the company, namely the decision-makers. Clearly, as distinct and separate persons in fact and in law, the appellants could conspire with one another. The issue is whether or not in so conspiring they could do so “with intent to deceive” BAL, by their use of the minutes of BAL dated 21 November 2008 containing the false statement, thereby intending to “mislead” BAL. 110.In R v McDonnell [86], Nield J ruled at first instance in a trial at Bristol Assizes that “a company and a director cannot be convicted of conspiracy when the only human being who is said to have broken the law or intended to do so is the one director”. [87] There, the defendant was indicted, inter alia, with two counts of conspiracy of conspiring with a company, each count concerning a separate company. The defendant was the “sole person in either of the companies…responsible for any of the acts of the company and no one else had any authority to act for the company or any responsibility for the acts of the company.” [88] 111.In Attorney-General’s Reference (No 2. of 1982) [89] the Court of Appeal of England and Wales cited the judgment of Nield J in R v McDonnell with approval. The court was concerned with addressing the question, inter alia, of “whether two men in total control of a limited company (by reason of their shareholding and directorships) are (while acting in concert) capable of jointly stealing the property of the company.” 112.In addressing the question of whether the defendants were able to avail themselves of the defence to the ingredient of dishonesty provided by section 2(b) of the Theft Act, 1968, namely that the appropriation of the other persons property was done in the belief that “he would have the other’s consent”, Kerr LJ identified the essence of the defence argument, namely:[90]
113.Of the argument that the company be regarded as “the other”, Kerr LJ said:
114.By parity of reasoning, given the coincidence of identity of the appellants with the mind and will of BAL, I am satisfied that the appellants could not be guilty of an offence of conspiring to deceive BAL in the manner alleged in Charge 1. In effect, the charge averred that they conspired with each other to deceive themselves, acting as the mind and will of BAL. Conclusion 115.Notwithstanding that the issue was not raised at trial, I am satisfied that the judge fell into error in finding Charge 1 was proved, inter alia, on the basis that included a determination that the appellants had conspired with intent to deceive BAL to use the false BAL minutes in respect of which BAL was interested which to their knowledge was intended to mislead BAL. For the reasons set out earlier, they could not do so. 116.On the other hand, subject to two remaining issues, I am satisfied that there was overwhelming evidence on which the judge was entitled to find that the appellants had conspired with the same intent in respect of CMRG. The out-of-court statements of the 2nd appellant 117.Issue was taken by Mr McCoy with the judge’s determination that in a video recorded interview conducted of the 2nd appellant she had accepted that the gift of the 1.5 million CMRG share certificate was made by the 1st appellant in respect of the acquisition of CTTC by UEIL in November 2008. The judge found:[91]
118.The judge set out in some detail the sequence of the questions and answers in the interview, noting that when she had been asked whether Mr Cai Yuan or the 1st appellant had ever privately transferred shares to her, the 2nd appellant had said “I really cannot remember well.” Then, the judge said out the series of ensuing questions and answers, including:[92]
119.Of the submission, made in the closing address of counsel for the 2nd appellant, that she may have been confused about which transaction was being talked about, the judge determined:[93]
120.I am satisfied that the judge was correct to make those findings. There is no merit whatsoever in this ground of appeal. 121.It is to be noted that the judge had rejected the 1st appellant’s evidence, on which the 2nd appellant relied, that he had given the 1.5 million CMRG share certificate to the 2nd appellant in November 2006:[94]
“any receipt, account or other document” 122.In his reasons for verdict, the judge noted that it had been submitted[95] that the minutes of BAL dated 21 November 2008 were not a document within the phrase, “any receipt, account or other document” set out in section 9(3) of the Ordinance.[96] The judge rejected that argument. 123.The judge said that it was contended that, by the application of the eiusdem generis rule of construction, the word ‘document’ should be construed as a document of the same nature as a “receipt” or “account”, namely a record of financial information.” [97] None of the authorities to which he had been referred was on point. Having noted that the BAL minutes “relate only to one matter, the sale of CTTC to UEIL” [98], the judge observed that the documents tabled at the meeting of the Board of Directors were the “agreement, draft instruments of transfer and draft bought and sold note.” [99] Then, he found that the BAL minutes were “a key document in relation to this sale.” In the result, he determined that:[100]
In consequence, he determined the minutes to be “…a document for the purposes of s. 9(3) of the POBO.” 124.Mr Duncan renewed the submissions that he had made to the judge before this Court. Mr McCoy did not associate himself with those submissions. 125.The word ‘document’ is defined in section 2 of the Ordinance. It is provided that, unless the context otherwise requires:
Mr Tam submitted that is the meaning to be given to the word ‘document’ in section 9(3) of the Ordinance. 126.In my judgment context requires the phrase “other document” to be construed other than as defined in section 2 of the Ordinance. Its meaning is to be determined by application of the eiusdem generis rule of construction. 127.The phrase “any receipt, account or other document” is to be found in section 1(1) of the Prevention of Corruption Act 1906, the third paragraph of which subsection provides for an offence in circumstances where:
128.In R v Tweedie [101] the Court of Appeal of England and Wales allowed an appeal against conviction of an employee of a company in respect of an offence, contrary to section 1(1) of the Prevention of Corruption Act, 1906. The employee dealt in precious metals for the company. He had provided the accounting staff of the company with a trading sheet, which falsely recorded the sale of precious metals the previous day. Although, the appellant had been instructed to sell precious metals he had failed to do so. From the trading sheet invoices would be made out to the customers in those accounts the trading was recorded. In the judgment of the Court, Lawton LJ said that the paragraph in question of section 1(1) of the Act was the third of three paragraphs, the first two paragraphs of which dealt with dishonest conduct between an employee and a third party. He said that in consequence, “the words “or other document” should, in our judgment, be construed as meaning a document which would pass inter partes.” By contrast, the document in question was never intended to go to a third party. 129.In the judgment in HKSAR v Leung Yat Ming[102] this Court distinguished R v Tweedie and determined that there was no requirement that there must be a tripartite relationship and that there be inter partes documents. In the judgment of this Court of Appeal Mayo JA, noted that, by contrast with section 1(1) of the Act, section 9 of the Ordinance provides for offences in three separate subsections of which section 9(3) is but one. In that case, the appellants, who were married to each other, in sequence at different periods of time had provided their respective employees, the University of Hong Kong and the Chinese University of Hong Kong with applications for a private tenancy allowance in respect of residential premises. In doing so they each declared that they, their spouse or other relations had no financial interest in the premises. That was false. Their employees, but not any third party, had an interest in the documents. 130.In the course of his judgment, Lawton LJ adverted to the fact that Hobhouse J, as Lord Hobhouse then was, had observed in the course of argument that the words “… “receipt” and “account”… as a matter of ordinary use of English refer to documents inter partes either in creation or use. A receipt is made out to someone who has paid a debt. An account is rendered by one person to another.” [103] 131.In giving examples of the meaning of “receipt” and an “account” Hobhouse J was doing no more than illustrating the tripartite nature of those documents, when knowingly used by an agent with intent to deceive his principal. Certainly, the common usage of the word ‘receipt’ is not confined to an acknowledgement of payment of a debt. Commonly, as Mr Tam submitted, a receipt is issued in acknowledgement of the performance of a variety of acts. They include the giving of notice of the termination of employment or of a lease of premises; the fact of the delivery or posting of a letter; the deposit or delivery of goods in a range of circumstances, from an umbrella at a theatre, clothes with a dry cleaner and the deposit of goods with a pawnbroker. Given the wide range of circumstances in which a receipt might be issued or received and then used by an agent in relation to his principal, I am satisfied that the meaning of “other document” is not to be circumscribed by reference only to the phrase “account”, which clearly has a much more limited meaning. 132.A company is required to make and retain minutes of the meetings of the Board of Directors. As is entirely clear, the making and the provision of the BAL minutes recording the matters contained therein, including the resolutions that were made, was a requisite step in processing the transaction of the sale of CTTC. As such, it was a business record within the relationship of agent and principal. In the result, I am satisfied that the minutes of BAL fell within the meaning to be ascribed to the phrase “any receipt, account or other document” and the judge was correct to so rule. Attribution of knowledge of the falsity to BAL: permission to offer/accept the advantage 133.At the hearing, in light of the judge’s determination that BAL was a stipulated principal in the prosecution case as advanced in respect of all three charges, the Court received lengthy submissions in respect of the argument that the knowledge of the appellants of the falsity of the minutes of BAL was to be attributed to BAL. However, BAL was not the intended victim of the conspiracy. Rather, that was CMRG. So, whilst knowledge of the falsity was to be attributed to BAL, the fraud exception did not apply.[104] Further, in those circumstances, it was contended that it was to be inferred that BAL had given implied consent to the accepting and giving of the advantage of 1.5 million CMRG shares. For his part, Mr Tam submitted that BAL was an intended victim and the fraud exception applied. 134.Not surprisingly, it was not contended that such permission was to be implied or inferred in respect of CMRG. As the judge noted in his consideration of Charges 2 and 3, it was the evidence of Mr Chu Kang Nam that:
In the result, the judge found that there was no evidence that in November 2008 the permission of the company had been either sought or given.[106] 135.In light of my determination that the judge fell into error in finding that the appellants had conspired with intent to deceive BAL, as alleged in Charge 1, and that BAL was not stipulated as a principal in Charges 2 and 3, it is not necessary to consider the submissions in respect of attribution or that it is to be inferred that the appellants had permission from BAL to offer/accept the advantage. 136.The issue that remains in respect of Charge 1 is the consequences, if any, to the safety of the conviction of the appellants in respect of their conspiracy with intent to deceive CMRG flowing from the judge’s error in finding that they had conspired with intent to deceive BAL in that charge. A similar issue as to the safety of the conviction arises in respect of Charges 2 and 3, given the judge’s error in finding those charges proved on a basis that included an agent : principal relationship between the appellants and BAL. 137.There is no dispute that the ultimate purpose of the conspiracy was to deceive the Board of Directors of CMRG by misleading them by the use of the BAL minutes of 21 November 2008, which falsely stated that the appellants had no interest in the transaction, into approving the sale without complying with the Listing Rules. BAL was a shell company of which the appellants were the directing minds. Their purpose in signing the false BAL minutes was merely a step in achieving the ultimate purpose of the conspiracy. The fact that the judge found that in so conducting themselves the appellants conspired to deceive BAL or offered/accepted an advantage as an agent of BAL in no way undermines or jeopardizes his finding that the appellants conspired to deceive CMRG or offered/accepted an advantage as an agent of CMRG. 138.Accordingly, I am satisfied that the judge’s errors do not undermine the safety of the appellants’ convictions in Charges 1 to 3 in respect of CMRG only. Hon Macrae JA: 139.Although the Court is agreed on the disposal of these appeals, there is a divergence of opinion concerning Ground 5 of the 1st appellant’s appeal so far as the approach to be taken to the construction of the words “or other document” in section 9(3) of the Prevention of Bribery Ordinance, Cap 201. In those circumstances, I shall briefly explain my own approach. 140.I view the construction of the section in simple terms. If, as McWalters JA suggests, the context and purpose of the section and legislation indicates that the words “or other document” were deliberately intended to broaden the scope of the offence so as to encompass a document of any kind, I wonder why the legislature did not simply draft the section to read:
Instead, it has stipulated:
141.If a broad meaning is to be ascribed to the offence, and “other document” is to be interpreted in effect as “any document” whatsoever, then “receipt” and “account” are redundant surplusage. 142.On the other hand, an agent who issues any piece of paper to his principal in which the principal may be said to be interested, but which contains a material falsity designed to mislead him, would infringe the broad interpretation of the section. An employee, for example, who leaves a note or memo for his employer to the effect that he is seeing a client when he is in fact meeting his wife during office hours would run the risk of being caught by the broadness of such a section. 143.In my view, the ejusdem generis principal must apply to the interpretation of the section and, if applied, would catch the BAL minutes in question for the reasons encapsulated in Lunn VP’s judgment at para 132 supra. Hon McWalters JA: 144.I agree with Lunn VP and Macrae JA that the appeals against conviction should be dismissed. I agree that they should be dismissed for the reasons contained in the judgment of Lunn VP except in relation to ground 5 of the 1st appellant’s amended perfected grounds of appeal which concerns the first charge only. My disagreement with Lunn VP relates to the approach he takes to the construction of the words “other document” in the phrase “any receipt, account or other document” which is an element of an offence under section 9(3) of the Prevention of Bribery Ordinance, Cap 201 (“POBO”). 145.The 1st appellant’s ground of appeal asserts that the minutes of the Board of Directors of BAL is not a “document” for the purpose of section 9(3). In support of this ground the 1st appellant argued that the ejusdem generis principle of construction applied to limit the width of meaning that the word “other” might bear so that a document could only be an “other document” for the purposes of section 9(3) if it belonged to the same genus as an account and a receipt and this genus did not extend to the minutes of a company’s Board of Director’s meeting. 146.The submissions of the 1st appellant raise an issue of statutory interpretation. In a nutshell Lunn VP, with whom Macrae JA agrees, is of the view that the ejusdem generis principle of construction applies but that the genus created by the legislation, namely a business record within the relationship of agent and principal, is sufficiently wide to encompass the minutes of the Board of Directors of BAL that are the subject of the first charge. For the reasons which follow I am of the view that the ejusdem generis principle of construction is not engaged. 147.The modern approach to statutory interpretation was explained by Li CJ in HKSAR v Cheung Kwun Yin (2009) 12 HKCFAR 568 at 574E-575B:
148.Following this approach the first step is to look at the context and purpose of the relevant provisions. The Court of Final Appeal has on numerous occasions emphasized the importance of this first step. In T v Commissioner of Police (2014) 17 HKCFAR 593, Ma CJ, though in the minority in the conclusion he reached, at pages 604-605 summarised the law as follows:
149.But, as Fok PJ emphasized in HKSAR v Fugro Geotechnical Services Ltd (2014) 17 HKCFAR 755, one must still start with the words being construed. In giving the judgment of the court he said at pages 765‑766, paragraph 22:
150.The two possible meanings of the phrase “other document” are the unrestricted one of “other document of any kind” or the restricted one of “other document of a similar kind”, referring to the nature or genus of document encapsulated by the words “account, receipt”. 151.If the intention of the legislature was to give to the words a restricted meaning then that would suggest that the ejusdem generis principle of construction was intended to apply so that the scope of the words was constrained by the scope of the genus as represented by the words “account, receipt”. It would then be necessary to describe that genus and identify its parameters. 152.However, if, after having regard to context and purpose, it is decided that the legislature intended the words to bear an unrestricted meaning then the ejusdem generis principle simply has no application. 153.It therefore becomes necessary to have regard to context and purpose as a tool to assist in determining which of the two possible alternative meanings these words bear. 154.The context of the provision is that section 9(3) is part of an Ordinance whose long title is:
155.The Ordinance seeks to achieve this purpose by, inter alia, the creation of offences in Part II and, in Part III, the grant of special powers of investigation to the Commissioner of the Independent Commission Against Corruption and his investigating officers. It is, in its scope, an ambitious attempt to deal in depth with a serious social issue. 156.The section 9(3) provision, being an offence-creating provision, is contained in Part II of the ordinance. Part II contains many offences, the bulk of which are aimed at protecting the integrity of the public sector. It is noteworthy that the ordinance seeks to protect the public sector by the creation of a range of offences whose scope extends into conduct well beyond bribery. This is one of the indicia of the thoroughness with which the legislature sought to deal with conduct which could impact upon the integrity of the public sector. 157.The offences created in section 9 are the only ones whose focus is specifically, but not exclusively,[107] on the private sector. Section 9 offences seek to protect the integrity of the private sector, and the commercial dealings in which its members are engaged, by focusing on the principal : agent relationship and creating offences that undermine that relationship. 158.The bribery offences contained in section 9(1) and 9(2) target conduct both external to the relationship (offering an advantage) and internal to the relationship (soliciting and accepting an advantage) but both require the involvement of an outsider, a third party. 159.That is not so with section 9(3) which targets a broader range of conduct as it does not require or depend upon the involvement of any outside person. The agent may simply be intending to benefit himself at the expense of his principal. This much is clear from the judgment in HKSAR v Leung Yat Ming [1999] 2 HKLRD 402, distinguishing R v Tweedie [1984] 1 QB 729. 160.Consistent with the approach it has taken in respect of the public sector, the legislature has also seen fit in respect of the private sector to target and criminalize conduct beyond the solicitation, offer and acceptance of bribes. By targeting non-bribery conduct that also undermines the integrity of the principal : agent relationship, section 9(3), in its own distinct and separate way, plays a broader role in protecting and preserving the integrity of this special relationship. 161.In my view the context of the section 9(3) offence is that it is part of an armory of offences whose purpose is to prevent and punish activity that is corrupt, in the broad sense of that word. Its specific context within the POBO is to criminalize conduct which corrupts the principal : agent relationship and by so doing undermines the integrity of the private sector. 162.With this context and purpose in mind it then becomes necessary to ascertain the meaning of the words “other document” which the legislature employed when it enacted the phrase “receipt, account or other document.” 163.I am of the view that given the context in which the words are used and the purpose for which they were employed, the general words “or other document” were deliberately used by the legislature in order to broaden the scope of the offence to encompass a document of any kind, thereby making the offence more effective in the role it was intended to play. 164.Having reached this conclusion, there is no justification for having recourse to the ejusdem generis rule for to do so would be to narrow the meaning of the words contrary to the intention of the legislature as ascertained from the context and purpose of section 9(3). 165.I agree with the majority that the definition of “document” in section 2 of the ordinance does not assist in the construction of the section 9(3) words “other document”. In my view that definition merely relates to the method by which a document is made, recorded or preserved. Hon Lunn VP: Conclusion 166.In the result, for the reasons that we have given, we refuse the appeals against conviction.
Mr William Tam, SC, DDPP and Ms Samantha Chiu, SPP of the Department of Justice, for the respondent Mr Peter Duncan, SC and Mr Joe Chan, instructed by V. Hau & Chow, for the 1st appellant Mr Gerard McCoy, SC and Mr Albert Wong, instructed by Leung & Lau, for the 2nd appellant [1] Appeal Bundle, page 763 - the prosecution written closing speech. [2] Appeal Bundle; page 775, paragraph 53 - prosecution written closing speech. [3] Appeal Bundle; page 777, paragraph 65 - prosecution written closing speech. [4] Appeal Bundle; pages 770-1, paragraph 34 - prosecution written closing speech. [5] Trial documentary exhibits, pages 1690-3. [6] Trial documentary exhibits, page 1847. [7] Appeal Bundle; page 771, paragraph 34 - prosecution written closing speech. [8] Appeal Bundle; page 781, paragraph 72 - prosecution written closing speech. [9] Appeal Bundle; page 772, paragraph 43 - prosecution written closing speech. [10] Appeal Bundle; page 773, paragraphs 45-6 - prosecution written closing speech. [11] Appeal Bundle; page 774, paragraph 50 - prosecution written closing speech. [12] Appeal Bundle; page 782, paragraph 80 - prosecution written closing speech. [13] Appeal Bundle; page 781, paragraph 72 - prosecution written closing speech. [14] Reasons for Verdict; paragraph 145. [15] Reasons for Verdict; paragraph 133. [16] Reasons for Verdict; paragraph 132. [17] Reasons for Verdict; paragraphs 150-2. [18] Reasons for Verdict; paragraph 133. [19] Reasons for Verdict; paragraphs 154-5. [20] Trial documentary exhibits, page 1401. [21] Reasons for Verdict; paragraph 156. [22] Reasons for Verdict; paragraphs 157-8. [23] Reasons for Verdict; paragraph 161. [24] Reason Verdict; paragraph 162. [25] Reasons for Verdict; paragraph 164. [26] Reason for Verdict; paragraph 167. [27] Reason for Verdict; paragraphs 170-1. [28] Reasons for Verdict; paragraph 192. [29] Trial documentary exhibits, page 1690. [30] Reasons for Verdict; paragraph 193. [31] Reasons for Verdict; paragraph 172. [32] Reasons for Verdict; paragraphs 173-4. [33] Appeal Bundle; 836, paragraph 8 - 2nd appellant’s closing speech. [34] Appeal Bundle; 850, paragraph 45 - 2nd appellant’s closing speech. [35] Appeal Bundle; 851, paragraph 51 - 2nd appellant’s closing speech. [36] Appeal Bundle; 846-9, paragraphs 33 to 41 - 2nd appellant’s closing speech. [37] Reasons for Verdict; paragraph 353. [38] Reasons for Decision, paragraph 7. [39] Reasons for Decision, paragraph 8. [40] Reasons for Verdict; paragraphs 244 and 250-1. [41] Reasons for Verdict; paragraph 244. [42] Reasons for Verdict; paragraph 250. [43] Reasons for Verdict; paragraph 255. [44] Reasons for Verdict; paragraph 265. [45] Reasons for Verdict; paragraph 256. [46] Reasons for Verdict; paragraph 251. [47] Reasons for Verdict; paragraph 389. [48] Reasons for Verdict; paragraph 378. [49] Appeal Bundle; pages 760-1 and 780, at paragraph 69. [50] Appeal Bundle; page 8, paragraph 14. [51] Appeal Bundle; page 8, paragraph 14. [52] Reasons for Verdict; paragraph 78. [53] Reasons for Verdict; paragraph 80. [54] Appeal Bundle; pages 760-1. [55] Appeal Bundle; page 780, paragraph 69. [56] Appeal Bundle; page 780, paragraph 70. [57] Reasons for Verdict; paragraph 378. [58] Reasons for Verdict; paragraph 398. [59] Reasons for Verdict; paragraph 404. [60] Section 2 of the Ordinance. [61] Reasons for Verdict; paragraph 389. [62] Reasons for Verdict; paragraph 256. [63] Reasons for Verdict; paragraph 255. [64] Reasons for Verdict; paragraphs 268-280. [65] Trial documentary exhibits, pages 1412-1432. [66] Reasons for Verdict; paragraph 285. [67] Reasons for Verdict; paragraph 163. [68] Reasons for Verdict; paragraph 290. [69] Trial documentary exhibits, 1593. [70] Reasons for Verdict; paragraph 237. [71] Trial documentary exhibits, pages 1597-1622. [72] Trial documentary exhibits, pages 1623-1646. [73] Trial documentary exhibits, pages 1671-1688. [74] Trial documentary exhibits, pages 1503-1511. [75] Trial documentary exhibits, pages 1512-1521. [76] Reasons for Verdict; paragraph 328. [77] Reasons for Verdict; paragraph 330. [78] Reasons for Verdict; paragraph 378. [79] Reasons for Verdict; paragraph 404. [80] Reasons for Verdict; paragraph 406. [81] Reasons for Verdict; paragraph 256. [82] Reasons for Verdict; paragraph 389. [83] Reasons for Verdict; paragraphs 21 and 22. [84] Reasons for Verdict; paragraph 2. [85] Trial documentary exhibits, page 1401. [86] R v McDonnell [1966] QB 233. [87] R v McDonnell, page 246 A-B. [88] R v McDonnell, page 237 D-E. [89] Attorney-General’s Reference (No 2. of 1982) 1 QB 624, at page 642 D-E. [90] Attorney-General’s Reference (No 2. of 1982), page 642 C-D. [91] Reasons for Verdict; paragraph 366. [92] Reasons for Verdict; paragraph 371. [93] Reasons for Verdict; paragraph 373. [94] Reasons for Verdict; paragraph 339. [95] Appeal Bundle; pages 802-3; paragraphs 76 to 79 - 1st applicant’s written closing speech. [96] Reasons for Verdict; paragraph 379. [97] Reasons for Verdict; paragraph 379. [98] Reasons for Verdict; paragraph 380. [99] Reasons for Verdict; paragraph 386. [100] Reasons for Verdict; paragraph 386. [101] R v Tweedie [1984] 1 QB 729. [102] HKSAR v Leung Yat Ming [1999] 2 HKLRD 402. [103] R v Tweedie, page 734 E-F. [104] Moulin Global Eyecare Trading Limited v Commissioner of Inland Revenue (2014) 17 HKCFAR 218 (the Court of Final Appeal); Bilta (UK) Ltd. (in liquidation) and others v Nazir and others (No 2) [2015] 2 WLR 1168 (the Supreme Court of the United Kingdom). [105] Reasons for Verdict; paragraph 392. [106] Reasons the Verdict; paragraphs 399 and 405. [107] The definition of “agent” includes a public servant. |
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