HKSAR v. Yu Lik Wai William and Another

CACC 237/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 237 OF 2015

(ON APPEAL FROM DCCC NO. 325 OF 2014)

____________

____________

____________________

J U D G M E N T

____________________

1.The 1^st and 2^nd applicants seek leave to appeal their convictions on 30 June 2015 after trial by District Court Judge C P Pang of a charge of conspiracy for an agent to solicit an advantage, between 8 December 2012 and 16 April 2013, contrary to section 9(1)(a) of the Prevention of Bribery Ordinance (“the Ordinance”) and section 159(A) of the Crimes Ordinance (Charge 1) and of dealing with property on 16 April 2013, namely $250,000, known or believed to be proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455 (Charge 2).

The trial

The prosecution case

2.Wideland International Limited owned a building at 217-219 Gloucester Road, Wanchai.  Its owners decided to operate a hotel in the building.  Mr Chung Siu Ping set up two companies, Big Faith Management Limited (BF) and Million Success Management Limited (MS), to manage the hotel.  He and the 1^st applicant, who was experienced in managing hotels, each became one of the only two shareholders and directors in each of the companies.  Mr Chung and other investors invested monies to convert the building for use as a hotel.  The 2^nd applicant was asked by the 1^st applicant to look for potential investors to operate a restaurant in the hotel.

3.Undercover ICAC officers presented themselves as potential investors in the restaurant to be set up in the hotel.  In all eight meetings were held between one or other of the ICAC officers and the 2^nd applicant and others in the period 8 December 2012 to 16 April 2013. In addition there was contact between the undercover ICAC officers and the 2^nd applicant by way of SMS, e-mail and telephone.  The 1^st applicant was present at the fifth, seventh and eighth meetings.  Five of the meetings were recorded covertly, namely the third, fourth and the fifth to eighth meetings.

4.The 2^nd applicant first raised the subject of a payment to be made to the 1^st applicant by investors in order to secure the appointment to run the restaurant.  At the third meeting the 2^nd applicant characterised that payment as an “under the table” payment.  The 1^st applicant was present at subsequent meetings when the 2^nd applicant described that payment in the same way.  At one such meeting, the seventh meeting, the 2^nd applicant suggested that the under the table payment could be encompassed in an exaggerated claim for renovation costs.

5.At the eighth and final meeting on 13 April 2013, one of the undercover ICAC officers gave an envelope containing $250,000 cash to the 1^st applicant, which he received.  That payment represented part of the payment of $980,000 which had been agreed at the seventh meeting, at which the 1^st and 2^nd applicants were present.  Then, the ICAC officers declared their identity as ICAC officers and the 1^st and 2^nd applicants were arrested.

The defence case

6.The 1^st and 2^nd applicants gave evidence in the defence case.  It was the 1^st applicant’s case that there was an agreement between him and Mr Chung under which he was permitted to deal with the arrangements for setting up the restaurant as he wished and that he was entitled to a ‘consultation fee’ for the work that he had done in that respect.  He honestly believed that he was entitled to do what he was doing.[1]

7.It was the 2^nd applicant’s case that he acted on the instructions of the 1^st applicant. He believed the 1^st applicant had the final say in respect of everything in the hotel project, in particular to grant a licence to investors to operate the restaurant and to receive a personal payment for doing so.  He believed that he was acting lawfully.[2]

Reasons for verdict

Rulings

(i)  Disclosure

8.The prosecution served on the defence, as unused material, three ‘Statements in Writing’ and two affirmations, which documents had been advanced in support of applications which resulted in the issue of three Executive Authorizations and two Judge Authorizations.  Pursuant to those Authorizations covert recording of the five meetings had been made.[3]  Prior to the opening of the prosecution case, Ms Lee Shin Man, Cindy, counsel for the 2^nd applicant applied to the judge for an order directing the prosecution to disclose information in the three statements in writing and the two affirmations, which had been redacted, pursuant to which covert recording of the five meetings had been made.[4]  The judge declined to do so.  He gave his reasons for his determination in his Reasons for Verdict.  He said that he found that there was no irregularity on the face of the documents and that the contended relevance of the material was only speculative.  In addition, he declined to inspect the relevant material himself.[5]

(ii)  Admissibility

9.Objection was taken at the trial on behalf of both applicants to the admissibility not only of the covert audio recordings of the five meetings but also of the other meetings and all other contacts between the undercover ICAC officers and the applicants, on the basis that the evidence was obtained unfairly, and in breach of the applicants’ rights to privacy and against self-incrimination.[6]  The judge ruled the evidence admissible and declined to exercise his discretion to exclude the evidence.  He gave his reasons for those determinations in his Reasons for Verdict.[7]

The 1^st applicant

10.The judge determined the 1^st applicant to be “an incredible and unreliable witness.” [8]  He found that the 1^st applicant had not told Mr Chung that “he would charge investor(s) a consultation fee.” [9]  The judge went on to determine of the contention that the applicant had been granted permission to receive the advantage by Mr Chung, that any such permission was not an “informed” permission.  Furthermore, the judge determined that “there was no promise made by Chung that the restaurant premises belonged to D1 or that it was “his”.”  The judge went on to find that, even if there had been such a promise, “...it could not have given D1 a ground for the belief that he could treat the restaurant premises as his own property and to get advantage from the caterer of the restaurant without permission of the companies.” [10]  Then, the judge found that the 1^st applicant must have known that permission was required him to “solicit and can accept any advantage from the caterer.” [11]

11.The judge said that the issues that arose in the 1^st applicant’s defence case were:[12]

“...what were the matters in his belief and whether these beliefs in the circumstances of the case amounted to lawful authority or reasonable excuse.”

12.In addressing the first issue, having noted that the 1^st applicant had extensive experience in “...hotels and F & B business for many years”, the judge determined:[13]

“...he would not have been so ignorant to believe that he could receive a sum as much as $0.5M without the consent of the companies. This is particularly when he did not make any financial contribution knowing that tens of millions of dollars had been invested by Chung and the investors he represented in the hotel project.”

13.Then, the judge determined that not only had the 1^st applicant not told Mr Chung that he would charge investors a consultation fee but also, in the contractual documentation drawn up to reflect the arrangement “...mentioned nothing about the consultation fee or any fee to be paid by the investor to D1.” [14]  Furthermore, the judge noted that although the 1^st applicant had interjected at the fifth meeting when one of the undercover ICAC officers had referred to a payment in terms of “under the table money” and said “call it consultation fees”, nevertheless when the 2^nd applicant had referred to the payment in similar terms at the seventh meeting, the 1^st applicant made no objection and continued with the conversation.[15]

14.In the result, under the rubric ‘Lawful authority or reasonable excuse’ the judge determined:[16]

“I do not believe that D1 was under the honest belief that he was entitled to do what he was doing. I find that he knew he needed to get permission. I find that he had no intention to disclose the payment he asked UCs to pay. He did not believe that permission would be given. I find that the Prosecution has proved that D1 has no lawful authority or reasonable excuse.”

15.Prior to making that determination, the judge adverted to the fact that section 24 of the ordinance:[17]

“...places the burden of proving the defence of “lawful authority or reasonable excuse” on the defendants.  The standard of proof is the balance of probabilities.”

16.Then, having noted that in its judgment in HKSAR v Ng Po On [18] the Court of Final Appeal had said of that phrase, in the context of the offence created by section 14 of the ordinance, it was to be read down as imposing “an evidential burden instead of a persuasive burden.”  The judge said that Mr Harris SC, leading counsel for the 1^st applicant at trial, and counsel for the prosecution submitted that the burden of proving reasonable excuse and lawful authority or offence contrary to section 9 “rests on the defendant on the balance of probabilities”.  In the result, the judge determined:

“Given the severity of the penalty of S 9 which distinguishes the S 14(4) offence, I agree that there is a persuasive burden on the defendant to prove on the balance of probabilities.”

17.Then, the judge went on to say:[19]

“Whether this interpretation of burden and standard of proof is correct is unimportant in this case.”

18.He explained that was because he had determined that he did not believe the 1^st applicant’s claim that he had “the honest belief that he was entitled to do what he was doing.”

The 2^nd applicant

19.The judge found the 2^nd applicant to be a “dishonest witness” [20] and rejected his evidence that he believed that the 1^st applicant had authority to receive the payment requested of the undercover ICAC officers and his assertion that he, the 2^nd applicant, was acting lawfully.  He found his evidence “...contradictory to documentary evidence and transcript of the meetings with UC’s.” [21]  Having found that the term “under-the-table-money” has only one sensible meaning, namely an “illegal corrupt kickback”, the judge found the 2^nd applicant’s conduct, in going along with the use of that term to describe what the 2^nd applicant said was a rental or licence fee, as “unbelievable”.[22]

20.Then, the judge rejected the 2^nd applicant’s claim that he thought the 1^st applicant “was the boss who could decide everything.”  The judge noted that, in the transcript of recorded conversations with the undercover ICAC officers, the 2^nd applicant said of the 1^st applicant that he had a “boss behind him.”  Further, in the lease document provided by the 1^st applicant as proof that he had the power to sign the catering agreement with the undercover ICAC officer the 1^st applicant had signed on behalf of a limited company.  Also, the undercover ICAC officers had been encouraged to encompass the payment in an inflated claim for renovation costs, for which a receipt would be provided.

21.In the result, the judge concluded:[23]

“...the only reasonable and irresistible inferences must be that D2 knew that D1 had to account for and needed to get permission to solicit and accept the $1.08M. He also knew that D1 had no authority to solicit and receive the money.”

Grounds of appeal against conviction

The 1^st applicant

22.By grounds 1 and 2, Mr Philip Wong submitted that the judge had “wrongly accepted and equated PW2 as the principals of AI (BF and MS)” for purposes of giving the requisite permission.  In consequence, the judge was in error to infer that the “1^st applicant did not have an honest belief because he did not ask PW2 for prior permission”.

23.By ground 3, it was submitted that the judge had erred in determining that the 1^st applicant had the burden of proving on the balance of probabilities the defence of lawful authority or reasonable excuse. 　He was wrong to do so without having had regard to the issue of proportionality.[24]　 Also, he was in error to have prayed-in-aid the fact that a greater penalty was made available for the commission of an offence contrary to section 9, than was made available for an offence under section 14 of the ordinance, as supporting a determination that the persuasive burden applied to the defence provided by section 24 in an offence contrary to section 9.　 Further, the judge had failed to apply that burden of proof in his determination that the 1^st applicant did not have “the honest belief that permission would be given.”

24.By grounds 4 and 5, it was submitted that the judge had erred in declining to order disclosure of material relevant to the Authorisations by which the five meetings between the undercover ICAC officers and one or other or both of the applicants had been covertly recorded. 　He erred in determining that they were protected from disclosure by section 61(1) of the Interception of Communications and Surveillance Ordinance, Cap. 589. 　The material requested was not “telecommunication interception products”. 　Finally, the judge was wrong to decline to inspect that material and to act on the assurance of counsel for the prosecution.

25.By ground 6, it was submitted that the trial was made unfair by the prosecution electing to charge the applicants with an offence of conspiracy to solicit an advantage together with the substantive offence of dealing with property knowing or believing it to represent the proceeds of an indictable offence.  By charging the latter offence, and not the offence of accepting an advantage, the prosecution had avoided being put to the election as to whether or not to proceed on the offence of conspiracy for the substantive offence.

The 2^nd applicant

26.By ground 1, Mr Ross submitted that the 2^nd applicant had been denied a fair trial by the admission into evidence of the covertly recorded audio recordings of three meetings, namely on 17 and 19 December 2012 and 15 January 2013, between undercover ICAC officers, the 2^nd applicant and others.  That was in breach of his rights of privacy provided by Articles 14(1), (3) (b) and Article 17 of the International Covenant on Civil and Political Rights (ICCPR), adopted by Article 39 of the Basic Law and Article 14 of the Hong Kong Bill of Rights Ordinance, Cap. 383.  The Authorizations, which were approved by a Senior ICAC officer, were approved by a person who was not capable of acting judicially.[25]  Moreover, they were granted on material which was not made on oath, namely on a Statement not an Affirmation.  Operation of Article 17 of the ICCPR, read with Article 39 of the Basic Law, rendered section 15(1)(a) of the Interception of Communications and Surveillance Ordinance, (ICSO) Cap. 589 unconstitutional. 

27.Mr Ross relied on the judgement of the European Court of Human Rights in In Klass & Others v Federal Republic of Germany, the European Court of Human Rights.  There, the Court was satisfied that there was no contravention of Article 8 of the European Convention on Human Rights in circumstances where, although the legislation permitted the interception of mail and telephone conversations at the behest of the head of one or other of the security agencies, because there was in place strict controls, including an initial control “carried out by an official qualified for judicial office.  This official examines the information obtained before transmitting (it) to the competent services such information as may be used in accordance with the Act.” [26]

28.By ground 2, it was submitted that the judge erred in failing to order the disclosure to the 2^nd applicantof non-redacted copies of the Statements and Affidavits advanced in support of the Authorizations granted for the covert recording of the five meetings.  The judge erred in following the judgment of Wright J in HKSAR v Ying Jim Ming, Jimmy [27] in which he decided that section 61 of ICSO was not in conflict with Basic Law or with Article 10 of the Hong Kong Bill of Rights Ordinance.

29.By ground 3, it was submitted that the evidence adduced by the prosecution of events concerning the 2^nd applicant after the conclusion of the third meeting ought to have been excluded, as having been obtained in infringement of the 2^nd applicant’s right of silence.  He contended that, once the 2^nd applicant had mentioned that the payments sought was an “under-the-table” payment, the ICAC undercover officers ought to have revealed their identity and cautioned the 2^nd applicant.  At that stage, the ICAC officers had sufficient evidence to charge the 2^nd applicant.  Further, the evidence ought to have been excluded as having been unfairly obtained in that one of the ICAC officers, Ah Chi and the person described at trial as X, a person well known to the 2^nd applicant, had ingratiated themselves with the 2^nd applicant, thereby tricking him into surrendering his right to silence.

The respondent’s submissions

The 1^stapplicant

Honest belief and reasonable excuse

30.Ms Alice Chan submitted that the judge was entitled to determine, as he did that the 1^st applicant did not have the honest belief that he was entitled to do what he was doing, namely negotiating to receive a personal payment in connection with agreement for others to operate a restaurant at the hotel: the 1^st applicant had made no financial contribution to the investment and had not reported the payment to Mr Chung who, together with others, had invested heavily in the hotel; the 1^st applicant was present at meetings when the payment was described as an ‘under-the-table’ payment.

Reasonable excuse: burden of proof

31.Ms Chan submitted that the judge was correct to determine that section 24 of the ordinance imposed a persuasive burden on the 1^st applicant in respect of the issue of reasonable excuse.  She contended that, given that the judge had determined that the 1^st applicant did not have a reasonable belief that he was entitled to receive a personal payment in connection with the agreement for others to operate a restaurant at the hotel, the issue of whether or not that belief was a reasonable excuse for the 1^st applicant to do what he had done did not arise.  So, as the judge said, his determination that there was a persuasive burden on the 1^st applicant was unimportant, indeed it was irrelevant.

Disclosure

32.Having noted that the judge had ruled that the decision of the prosecution not to disclose material to the court, on the basis that it did not meet the criteria of relevance set out in section 61(4) of ICSO, was reviewable by the court and that he had power to order disclosure of the material to himself, Ms Chan submitted that the judge was correct in not reviewing the material because its relevance had not been established and, in particular, to determine that “the asserted relevance with only speculative.” [28]  She contended that, by parity of reasoning, the judgment of this Court in HKSAR v Agara [29] was relevant.  At issue in that case, were the circumstances in which a defendant was entitled to disclosureof the identity of an informer.  In his judgment, Stock VP said that the “burden is on the defence to show that the information is necessary in order to demonstrate the accused’s innocence.” [30]

ICSO

33.Ms Chan invited the court to note that Article 30 of the Basic Law provides for an exception to the right to privacy, namely that “the relevant authority may inspect communication in accordance with legal procedures to meet the needs of public security or the investigation into criminal offences.”  She submitted that the ICSO provided the procedures to meet that requirement.  Section 3 described the conditions under which the exception was to be established.  In particular, section 3(1)(c) require that it be “necessary for, in proportion to, the purposeful to be furthered by carrying it out.”

34.Of the scheme of the ordinance, Ms Chan submitted that it is based on the difference in the degree of intrusion into people’s privacy.  The more intrusive the covert surveillance [31] was subject to control by a judge and the less intrusive covert surveillance by an Executive Authorization, granted by a senior officer of the law-enforcement agency.[32] Section 2(3) provided that Type 2 surveillance was to be regarded as Type 1 surveillance, for which a judge’s authorization was required if “...if it is likely that any information which may be subject to legal professional privilege will be obtained by carrying it out.”  Ms Chan submitted that, having regard to the level of intrusion involved, the requirements of the ordinance for the issue of a Type 2 Authorization by a non-judicial officer provided sufficient safeguards for the rights of privacy of those the subject of covert surveillance.

35.She invited the court to note that the covert surveillance had occurred at meetings between the parties in open and public places.  The fact of the earlier Executive Authorizations was readily apparent on the face of the affirmations filed in support of the grant of the Judicial Authorizations.  Moreover, the legislation provided for a Commissioner to oversee compliance with the requirements of the ordinance.[33]

Admissibility of evidence of the meetings: unfairness, breach of rights of privacy and the right against self-incrimination

36.Ms Chan said that the judge was entitled to determine, as he did, that the 2^nd applicant was an active, willing and enthusiastic participant in the meetings and that he had referred to a payment that would go into the pocket of the 1^st applicant personally.[34]  Further, the judge found that there had been no interrogation, prompting or any kind of improper means by the undercover ICAC officers.[35]  Ms Chan suggested that the judge demonstrated a close acquaintance with the judgment of the Court of Final Appeal in the Secretary for Justice v Lam Tat Ming [36].  The use of undercover officers was an “essential weapon in the armoury of law enforcement agencies”.  The law accepts that such operations unavoidably involves “... elements of subterfuge, deceit and trickery.” [37]

A consideration of the submissions

37.By grounds 1 and 2 of the grounds advanced by the 1^st applicant it was submitted that the judge “wrongly accepted and equated PW2 (Mr Chung Siu Pang) as the principals A1...” it was contended that from that error the judge had wrongly determined that the 1^st applicant required Mr Chung’s permission to solicit an advantage.  That error led him to conclude that the 1^st applicant did not have the honest belief that permission would be given.

38.In the Reasons for Verdict the judge recited the charges, in which the Particulars of Charge 1 averred that the 1^st and 2^nd applicant had conspired together:[38]

“...for the said Yu Lik Wai, William, being an agent, namely an employee and director of Big Faith Management Limited and Million Success Management Limited to, without lawful authority or reasonable excuse, solicit an advantage, namely, gift, loan, fee, reward or commission consisting of approximately $980,000... as an inducement to or reward for or otherwise on account of the said Yu Lik Wai, William doing or having done an act in relation to his principal’s affairs or business, namely, operating and managing a restaurant...” [Italics added.]

39.The judge went on to note of the issues arising at the trial that “it became apparent that the crux of the case is whether D 1 and D2 believed what they were doing was lawful.” [39]

40.Of the prosecution case he said:[40]

“...the Prosecution case is that D1 was an employee and an agent of MS and BP. Without the knowledge and consent of his principal, he sought the assistance of D2 to find people to operate the restaurant of the Hotel. Through D2, he asked for a kick back of $1.08M (later reduced to $0.98M) to be paid by the UCs in return for the catering contract. He had no permission or authority to do so. (1^st Charge)” [Italics added.]

41.Under the rubric ‘Undisputed Background’ the judge noted:[41]

“To facilitate the operation of the hotel project, Chung set up 2 companies - Million Success Management Limited (MS) and Big Faith Management Limited (BF). Each of the 2 companies had 2 shares of $1 each owned by Chung and D1 respectively. They were both appointed as directors of the 2 companies. Chung was the company secretary.”

42.Also, of their arrangements he said:[42]

“MS was responsible for the operation and management of the Hotel. D1 was appointed as the Chairman and CEO of the Hotel receiving from MS a monthly payment of HK$50,000, which was later reduced to HK$30,000. Chung was mainly involved in the construction work of the Hotel by converting it from a commercial building to a hotel. He was responsible for all the funding of the hotel project. He has injected more than $40,000,000 into the account of MS for the expenditure of the hotel project. He was not the only person providing the fund. He had some investors behind him.”

43.Of Mr Chung’s evidence, the judge said:[43]

“Chung was to provide funding of the Hotel project while D1 provided his expertise. Chung had final say in important matters. He had injected about $40,000,000 into the hotel project, out of which $2M was his own investment. The remaining was comprised of loan and investment of investors behind him.”

44.Of the issue of the 1^st applicant accepting an advantage from the contractor engaged to run the restaurant, the judge noted that Mr Chung had testified that:[44]

“... he would not allow D1 to collect advantage from contractor running the restaurant.

In cross-examination, when asked whether he would accept if D1 were able to find a suitable caterer to run and operate the restaurant with a “sensible arrangement”, he said he would consider it. Asked further whether he would object to a consultation fee being charged by D1 in such arrangement, Chung replied he could not decide himself as he was accountable to other investors. If they agreed, Chung would also agree.”

45.Of the role and status of the 1^st applicant in relation to the two companies, MS and BF, the judge said:[45]

“...D1 was more than a mere employee. He was a 50% shareholder and director of MS and BF. He was an investor in the hotel project by his input of expertise in management of hotel. He was one of the decision makers.

It cannot, however, be disputed that he owed a fiduciary duty to the two companies and the investors in the hotel project.  He needed permission to receive a personal benefit, in particular, when the consultation fee he was receiving, according to his version, was as much as $500,000.  He did not seek prior permission.”

46.Finally, in his consideration of the respective charges the judge said in respect of charge 1:[46]

“It is undisputed that D1 was in a fiduciary relationship with the two companies he was an agent.”

Conclusion

47.I am satisfied that it is not reasonably arguable that the judge determined that Mr Chung was the 1^st applicant’s principal, insofar as it was relevant to Charge 1.  He made it perfectly clear that he understood that Charge 1 alleged, and it was not disputed, that the 1^st applicant was in the relationship of the agent/principal with the two companies MS and BF and that it was their permission that was required by the 1^st applicant.  In that context, as noted earlier, the judge determined simply “He needed permission to receive a personal benefit ...he did not seek prior permission.”  By contrast, the judge noted that the 1^st applicant had not informed Mr Chung of his negotiations and that he was about to receive the payment of money.  Given the fact that Mr Chung was an equal shareholder and director of each of the two companies with the 1^st applicant, informing Mr Chung was merely a necessary preliminary step to any application to the companies for their permission.

Reasonable excuse: honest belief

48.By ground 3, complaint was made in respect of the judge’s determination of the approach taken to the issue of “reasonable excuse” in respect of the 1^st applicant.  Mr Wong acknowledged that those representing the 1^st applicant at trial had submitted that the burden of proving lawful authority and reasonable excuse rests on the defendant on the balance of probabilities.  In the result, the judge determined that it was for a defendant to prove the matter on the balance of probabilities.  Nevertheless, Mr Wong complained the judge was in error to so determine.  He submitted that there was an evidential burden only on a defendant.

49.Subsequent to the judge handing down his Reasons for Verdict, this Court handed down judgment in HKSAR v Chan Chi Wan Stephen [47] addressing, inter alia, the issue of the elements of the offence created by section 9 and of the operation of section 24 of the ordinance was addressed.  In the judgment of the Court, Yeung VP said that the offences there alleged of anagent accepting an advantage and offering an advantage to an agent:[48]

“Each offence comprises only three elements: (1) accepting or offering an advantage; (2) as a reward for certain conduct; and (3) such conduct was related to the principal’s affairs or business. Without reasonable excuse is not an element of the offence (see HKSAR v Yan Pak Cheung [2009] 1 HKC 339 and Chan Tat Chung Danny, etc.).

Reasonable excuse is one of the defences applicable to the offence of agent accepting an advantage and the offence of offering an advantage to an agent, but according to section 24 of the Ordinance, the burden of proving this defence is on the defendant.  In our view, in the case of the offence of conspiracy for an agent to accept an advantage, the prosecution only needs to prove that the defendant entered into an agreement, the object of which was to enable an agent to accept an advantage for his doing an act in relation to his principal’s business, and that is sufficient to discharge the burden of proof required in respect of the offence.  The prosecution bears no burden to negative the defence that the defendant has lawful authority/reasonable excuse etc..  When the elements of the offence is proved, it is for the defendant to prove the defence of lawful authority/reasonable excuse according to the civil standard of proof.  Only if he is able to do so can he exonerate himself from any liability.”  [Italics added.]

50.On 29 June 2016, in the Secretary for Justice v Chan Chi Wan, Stephen [49] the Appeal Committee of the Court of Final Appeal granted leave to the 1^st applicant in the hearing before this Court in relation to questions of law of great and general importance, including:

“In the context of a section 9 offence under POBO, what is the proper approach the Court should adopt in considering the defence of reasonable excuse?”

51.Clearly, the ambit of the question posed is extremely wide.  It would appear to encompass a consideration of the questions of on whom the burden of proof is placed and to what standard.  Another matter which may arise is whether or not the determination as to the honest belief of the defendant falls to be resolved separately, as the judge appears to have done in this case, or as part of the “proper approach” to the defence of reasonable excuse.

52.It is to be remembered that the judge had determined of the operation of section 24 of the ordinance, namely in respect of “lawful authority or reasonable excuse”, that “...there is a persuasive burden on the defendant to prove on the balance of probabilities.”  Nevertheless, he had gone on to say that that determination was “unimportant in this case.”  That was because he found “I do not believe that D1 was under the honest belief that he was entitled to do what he was doing.”  He did not state what burden and standard of proof that he applied in reaching that finding, although it is clearly to be inferred that it was a finding made on the basis that he was satisfied that the prosecution had proved that to be the case beyond a reasonable doubt.

53.In those circumstances, even if the judge was wrong in his determination that the defendant had the burden of proving, on the balance of probabilities, that he had a reasonable excuse, that error was of no consequence to the 1^st applicant, given that the judge did not have regard to that determination in making his findings.  Similarly, if the judge was wrong to treat the determination of whether or not the applicant had an honest belief, that he was entitled to do what he was doing, as preliminary issue separate from a consideration of whether or not that fell within the phrase “reasonable excuse”, it is clear that the judge applied the usual burden and standard of proof required in a criminal trial, namely that the prosecution prove the matter so that the judge was satisfied beyond reasonable doubt.  Accordingly, even if, properly construed, the defence provided for by section 24 of the ordinance gave rise to an evidential burden only and the issue of honest belief was to be resolved subject to such a burden at the same time that the issue of reasonable excuse was resolved, ultimately the judge had applied the correct burden and standard of proof, namely that the prosecution prove the matter so that the judge was satisfied beyond reasonable doubt.

54.Of course, having determined that the 1^st applicant did not have an honest belief that he could do what he did, it was not necessary for the judge to consider whether or not such belief gave rise to a reasonable excuse.

Conclusion

55.In the result, I am satisfied that this is not a reasonably arguable ground of appeal.

Disclosure and inspection of material relevant to the Authorizations

56.Section 61 of ICSO provides that:

“(1) Any telecommunications interception product shall not be admissible in evidence in any proceedings before any court other than to prove that a relevant offence has been committed.

(2) Any telecommunications interception product, and any particulars as to a telecommunications interception carried out pursuant to a relevant prescribed authorization, shall not be made available to any party to any proceedings before any court (other than any such proceedings instituted for a relevant offence).

(3) In any proceedings before any court (other than any such proceedings instituted for a relevant offence), any evidence or question which tends to suggest any of the following matters shall not be adduced or asked—

(a) that an application has been made for the issue or renewal of a relevant prescribed authorization, or the issue of a relevant device retrieval warrant, under this Ordinance;

(b) that a relevant prescribed authorization has been issued or renewed, or a relevant device retrieval warrant has been issued, under this Ordinance;

(c) that any requirement has been imposed on any person to provide assistance for the execution of a relevant prescribed authorization or a relevant device retrieval warrant;

(d) that any information has been obtained pursuant to a relevant prescribed authorization.

(4) Notwithstanding subsection (2) or any other provision of this Ordinance, where, for the purposes of any criminal proceedings (whether being criminal proceedings instituted for an offence or any related proceedings), any information obtained pursuant to a relevant prescribed authorization and continuing to be available to the department concerned might reasonably be considered capable of undermining the case for the prosecution against the defence or of assisting the case for the defence—

(a) the department shall disclose the information to the prosecution; and

(b) the prosecution shall then disclose the information to the judge in an ex parte hearing that is held in private.

(5) The judge may, further to the disclosure to him of the information under subsection (4)(b), make such orders as he thinks fit for the purpose of securing the fairness of the proceedings.

(6) Where any order is made under subsection (5) in any criminal proceedings, the prosecution shall disclose to the judge for any related proceedings the terms of the order and the information concerned in an ex parte hearing that is held in private.

(7) Notwithstanding subsection (5), no order made under that subsection authorizes or requires anything to be done in contravention of subsections (1), (2) and (3).

(8) In this section—

“judge”, in relation to any proceedings, means the judge or magistrate before whom those proceedings are or are to be heard, or any other judge or magistrate having jurisdiction to deal with the matter concerned;

“party”, in relation to any criminal proceedings, includes the prosecution;

“related proceedings”, in relation to any criminal proceedings, means any further proceedings (including appeal proceedings) arising from, or any proceedings preliminary or incidental to, those proceedings;

“relevant device retrieval warrant means a device retrieval warrant for the retrieval of any of the devices authorized to be used under a relevant prescribed authorization;

“relevant offence” means any offence constituted by the disclosure of any telecommunications interception product or of any information relating to the obtaining of any telecommunications interception product (whether or not there are other constituent elements of the offence);

“relevant prescribed authorization means a prescribed authorization for a telecommunications interception;

“telecommunications interception product” means any interception product to the extent that it is—

(a) any contents of a communication that have been obtained pursuant to a relevant prescribed authorization; or

(b) a copy of such contents.”

57.Although in his grounds of appeal and his written submissions Mr Ross challenged the constitutionality of section 61 of ICSO, submitting that it was in conflict with the Basic Law and Article 10 of the Hong Kong Bill of Rights and that it gave rise to an unfair trial, he accepted that counsel for the 2^nd applicant at trial had eschewed explicitly any such challenge.  At the trial, having adverted apparently to the judgment of Wright J in HKSAR v Ying Jim Ming, Jimmy, the judge said to counsel for the 2^nd applicant that the prosecution submitted that “this section is not unconstitutional”.[50]  In reply to an invitation to respond by stating her position, the following interchange ensued:[51]

“MS LEE: I would not quarrel with that proposition.

COURT: So you take no issue on unconstitutionality.

MS LEE: No.

...

COURT: Hold on one moment.  This is very important because you are not taking issue on the constitutionality of the section.  Therefore, I am of course bound by this section.”

58.In his Reasons for Verdict, the judge adverted to the position taken by counsel for the 2^nd applicant and to the consequences in respect of his analysis of the submissions before him:[52]

“Miss Lee does not take issue as to the constitutionality of any part of S61. She seems to accept the ruling of Wright J in HKSAR v Ying Jim Ming, Jimmy. In that case, Wright J discussed on the constitutionality of S 61(3)(d) and 61(4). At paragraph 47 of his judgment, he had this to say:-

“I am satisfied that, insofar as those provisions constitute a derogation from the right to full disclosure, they are rational and proportional and do not conflict with the Basic Law or Article 10 of Hong Kong Bill of Rights...”

I do not need to rule whether S 61 is inconsistent with the Basic Law and the Bill of Rights Ordinance.  If the common law principles of disclosure are in conflict with S 61, the latter would prevail unless it is repealed. ”

59.Subsequently, the judge said:[53]

“S 61 is indeed a piece of draconian legislation. As constitutionality of the section is not challenged, I shall not go into any depth of the constitutional controversy of this section of the Ordinance. Suffice it for me to say that I do not see any basis to suggest that the section should be regarded as repealed being inconsistent with the Basic Law and the Bill of Rights Ordinance.”

60.Having determined that section 61(2) of ICSO did not prevent the Court ordering the disclosure of the material to the Court itself and having ruled that the prosecution’s decision not to disclose the material was reviewable by the Court, the judge said:[54]

“The party which seeks the disclosure must identify the precise relevance to his case of the material. He should show that there are grounds for the belief of the relevance of the information.”

61.Of the ambit of the prosecution’s duty to disclose relevant material, the judge had said earlier:[55]

“The scope of duty imposed on the Prosecution to disclose is outlined in HKSAR v Lee Ming Tee [56] as follows :-

“The prosecution’s duty is to disclose to the defence relevant material (including information) which may undermine its case or advance the defence case. The duty is not limited to the disclosure of admissible evidence. Information not itself admissible may lead by a train of inquiry to evidence which is admissible....And material which is not admissible may be relevant and useful for cross-examination of a prosecution witness on credit.” ”

62.Of the nature of the supervisory process in respect of the protected information, the judge said:[57]

“It must first be noted that the protected information was vetted not only by a directorate officer of the ICAC but also by a panel judge for the Type 1 surveillance application in the subsequent applications. On the face of the documents, I did not see any irregularity.”

63.The judge went on to say:[58]

“There was no evidence or concrete ground put forward by the Defence to suggest that the protected information could reveal any illegality or impropriety of the whole surveillance operation or any individual ICAC officers. Miss Lee failed to identify the precise relevance to her case of the material she requested. I could not see any basis to support the assertion that the surveillance operation or any part of it was illegal, unauthorized or improper.”

64.In the result, having determined that the asserted relevance was “only speculative” and having found that the protected information about potential relevance to issues raised by the defence, the judge refused the application for disclosure to the defence.[59]  Similarly, having found there was an “...absence of sufficient basis to show a reasonable possibility of relevance” he refused to inspect the material himself.[60]  [Italics added.]

65.Notwithstanding those rulings, the judge said that he bore in mind those issues throughout the trial and concluded:[61]

“Until the end of trial when the defence has been disclosed, I do not see the relevance of the protected information to the issues in this case or the need to re-visit this issue.”

66.In his submissions, Mr Ross invited this Court not to follow HKSAR v Ying Jim Ming, Jimmy.

67.In HKSAR v Ying Jim Ming, Jimmy the three appellants were convicted on various charges of conspiring together and/or with Chu Ka Hang to accept or offer advantages, or with related substantive offences, in respect of building contracts.  Chu Ka Hang, an accomplice of the appellants, testified for the prosecution.

68.At issue at trial, were the circumstances in which Chu Ka Hang had come to plead guilty to various charges, to make a non-prejudicial statement and to testify for the prosecution.  Related to that issue were the circumstances in which Chu Ka Hang’s wife had been arrested, released on bail and then released unconditionally.  It was the position of the defence that her release was related to Chu Ka Hang’s decision to give evidence for the prosecution.  Chu Ka Hang denied that to be the case.

69.In cross-examination of an ICAC officer, in respect of the issue of why Mrs Chu been arrested, the ICAC officer said that he was not permitted to divulge the source of the evidence against Mrs Chu and he asserted that it was protected by a statutory provision.  However, eventually the ICAC officer said that it was obtained from “telephone tapping.”  Only then, did counsel for the prosecution intervene, informing the magistrate that he was unaware of the fact that there had been an interception of communications.  Then, he invited the magistrate to note that it was a matter for the ICAC to determine whether such material was disclosable, even to the prosecutor.

70.In consequence of that evidence, counsel for the 1^st appellant made submissions as to the constitutionality of section 61(4) and (3)(e) of ICSO. The magistrate ruled that those provisions were “not unconstitutional”.[62]

71.In his judgment, Wright J said:[63]

“The core of the argument advanced on behalf of the appellants concerns s. 61(4) and is that its effect is to make, in this case, the ICAC the judge in its own case as it affords it the right to make the primary determination as to whether the interception product contains disclosable material; that the ICAC invokes the provisions as justification for not disclosing the interception product; that nondisclosure prejudiced the appellants in their cross-examination of CHU, especially as to his credit; and that consequently the appellants were deprived of a fair trial.”

72.Wright J noted [64] that in his judgment in the Court of Final Appeal in HKSAR v Lee Ming Tee [65], with which all the other judges agreed, Sir Anthony Mason, NPJ said:

“155. The principles relating to disclosure articulated by the English courts are based on the defendant’s common-law right to a fair trial and on the principle of openness. It is, therefore, appropriate that this court should have regard to them in ascertaining the common law of Hong Kong. The principles recognise that the prosecution is under a duty of disclosure to the defence which extends to material in the possession or control of the prosecution which may undermine its case or advance the defence case.”

73.Then, Wright J went on to say:[66]

“By the time ICSO came into effect the Interception of Communications Act 1985 in England had been in operation for some 20 years and tested throughout the courts there as well as before the European Commission of Human Rights and the European Court of Human Rights. Certain of its provisions bear strong similarities to the Hong Kong legislation, ss. 9 and 6 being the substantial equivalents of ss. 61(1) and 59(1)(c) ICSO.

ICSO goes substantially further than the English legislation in spelling out administrative and procedural matters as well as creating the mechanism for ex parte review by a court of material perceived by the investigators to be disclosable, a feature which is absent from the English legislation as such.  However, the English practice now is that if it is desired not to disclose material which would otherwise be a disclosable an application is made ex parte to a judge for the withholding of the material on the basis of public interest immunity.  To all intents and purposes, therefore, the procedure is substantially the same as that prescribed by s. 61(4) ICSO.”

74.Next, Wright J adverted to the speeches of the House of Lords in R v Preston [67] in which the various judges, in the context of the operation of the Interception of Communications Act 1985, rejected the assertion that the appellants had been deprived of a fair trial due to the incomplete disclosure of unused material in respect of intercept products.  Section 9 of the Act provides that in any court proceedings no evidence shall be adduced and no questions asked in cross-examination which tend to suggest that a warrant has been issued.  Furthermore, he noted that the European Commission of Human Rights had declared inadmissible the appellants’ application to have the matter considered.

75.Then, Wright J noted that in Jasper v United Kingdom [68], the European Court of Human Rights had determined that there was no breach of Article 6 of the European Convention on Human Rights, so that the appellant’s trial was unfair, arising from the refusal of the prosecution to disclose on the basis of public interest immunity, which material would have been disclosable material.  He noted that the majority of the Court said:[69]

“...Article 6(1) requires, as indeed does English law, that the prosecution authorities should disclose to the defence all material evidence in their possession for or against the accused.

However, as the applicant recognised, the entitlement to disclosure of relevant evidence is not an absolute right. In any criminal proceedings there may be competing interests, such as national security or the need to protect witnesses at risk of reprisals or keep secret police methods of investigation of crime, which must be weighed against the rights of the accused. In some cases it may be necessary to withhold certain evidence from the defence so as to preserve the fundamental rights of another individual or to safeguard an important public interest...” [70]

76.In the result, Wright J concluded:[71]

“The point taken by the appellants before the magistrate is on all fours with the points taken in regard to the English legislation which, as indicated, is in substantially similar terms to the Hong Kong legislation. I am satisfied, with respect, that the reasoning in the various judgments, or majority judgments, to which I have referred is of equal applicability to s. 61 ICSO.

I am satisfied that, insofar as those provisions constitute a derogation from the right to full disclosure, they are rational and proportional and do not conflict with the Basic Law or Article 10 of the Hong Kong Bill of Rights: rational, in that they seek to preserve the confidentiality of the procedures, systems and methodology of telecommunications interception, both at the application and execution stages, which is in the public interest in the self-evident need to collect intelligence - as opposed to evidence - for ongoing prevention and detection of crime; proportional, in that, first, no imbalance arises between the prosecution and defence in any subsequent trial inasmuch as neither may introduce interception product as evidence, secondly, as any material would have had to have involved a communication to which the accused had been a party for it to have been admissible in any event meaning that the accused would be as aware of its content as would those responsible for the intercept, thirdly, there is restricted dissemination of the intelligence obtained and, fourthly, the intercept materials are disposed of expeditiously.”  [Italics added.]

77.It is to be noted that in Jasper v United Kingdom two separate issues were canvassed.  First, material in the possession of the prosecution was withheld on the grounds of public interest immunity.  The trial judge examined the material in question and ruled that it should not be disclosed.[72]  Secondly, the prosecutor refused to answer questions posed of him by the defence, including whether or not “...any listening device or telephone intercept were used, and whether there exists any resulting recording, note, memorandum or other record”.

78.Of the latter issue, the prosecutor said: [73]

“I have refused and still refuse to answer the questions set out in ... paragraph 9 because I contend that I am not required to reveal to any person whether there has been any interception of communications under the [Interception of Communications] Act [see paragraphs 31-34 below]. If I answer the question at 9(a) or 9(b), I shall be answering that question which I am not required to answer. ... I am confident I have done what is required of me in respect of it ... I take the view that were there to be any matter falling under the Interception of Communications Act it should not be the subject of any ex parte application ...”

79.Section 9 of the Act provided that :

“In any proceedings before any court or tribunal no evidence shall be adduced and no question in cross-examination shall be asked which (in either case) tends to suggest—

(a) that an offence under section 1 above has been or is to be committed by any of the persons mentioned in subsection (2) below ; or

(b) that a warrant has been or is to be issued to any of those persons.”

80.The judge refused to order the prosecution to provide the information requested by the defence:[74]

“I cannot invite [prosecution counsel] ... to go behind the stand that he is taking, at this stage, where he takes the view that even an ex parte application is unnecessary, which is the way he looks at it. ... I think we have taken the matter as far as we can in that particular aspect. One is bound, because I have no power [to order] otherwise, to accept the situation as the prosecutor tells it to be.”

81.Of that ruling, the majority of the Court said:[75]

“In addition, the applicant alleged that his trial had been unfair because the product of a telephone intercept had been withheld from the defence without being placed before the trial judge. However, the Court notes that it is not established that any such material existed at the time of the trial. Moreover, since under s 9 of the 1985 Act both the prosecution and the defence were prohibited from adducing any evidence which might tend to suggest that calls had been intercepted by the State authorities, the principle of equality of arms was respected.” [Italics added.]

82.As noted earlier, in his submissions Mr Ross contended that the judgment of Wright J in HKSAR v Ying Jim Ming, Jimmy ought not to be followed by this Court.  He said that Wright J’s reliance on the judgment of the majority of the Court in Jasper v United Kingdom was misplaced.  He argued that was because in Jasper the judge had inspected the material which was not disclosed.  Whilst that was correct in respect of the material for which public interest immunity was claimed, it was not the case, as is apparent from the passages of the judgment cited above, in respect of the material to which section 9 of the Interception of Communications Act, 1985 applied.  The judge had not inspected the material.  Nevertheless, the majority of the Court was satisfied that there was no violation of the right to a fair trial, provided for by Article 6 of the European Convention on Human Rights.

83.Although Mr Ross asserted in his written submissions that the judge found that “it was for the defence to show a reasonable probability of relevance before disclosure could be ordered”, in fact he made no such determination. In respect of the issue of disclosure to the 2^nd applicant, he said that the party must show “that there are grounds for the belief of the relevance of the information.” [76] It was in that context, that the judge said:[77]

“There was no evidence or concrete ground put forward by the defence to suggest that the protected information could reveal any illegality or impropriety of the whole surveillance operation or any individual ICAC officers..”

In the result, the judge concluded “the asserted relevance was only speculative.”

84.Having determined that section 61(2) of ICSO did not prohibit him of making an order for disclosure of the protected information to himself [78], so that he might inspect it, the judge said of his approach to the issue of whether or not he should do so that first he must be “persuaded that there would be (a) reasonable chance that the documents are relevant.”  He added, “must be some concrete grounds for belief which takes the case beyond a mere “fishing” expedition.”  In the result, the judge concluded that there was an absence of a “...sufficient basis to show a reasonable possibility of relevance.” [79]  In all the circumstances, in my judgment it is not reasonably arguable that the judge was wrong not to inspect the material himself.

85.Of course, the fact that no issue was taken as the constitutionality of section 61 of ICSO in the lower court necessarily resulted in there being no relevant evidence led, arguments canvassed and a considered ruling made by the judge.  Of course, whilst that is not a bar to the point being argued on appeal, it makes advancing a freestanding argument more difficult.  In any event, in my judgment, on the submissions advanced by Mr Ross, it is not reasonably arguable that the provisions of section 61 of ICSO are unconstitutional.

ICSO

86.In support of his submission that the person granting an authorization permitting covert surveillance must be “capable of acting judicially”, Mr Ross relied on to the judgment of the Supreme Court of Canada in Hunter v Southam.  In that case, Mr Hunter, the Director of Investigation and Research of the Combines Investigation Branch authorised the other appellants to exercise his authority under the Combines Investigation Act to enter and examine documents at the business premises of the Edmonton Journal, a division of the respondent corporation, Southam Inc.  The court held that sections 10(1) and (3) of the Act, pursuant to which the authorization was made, were of no force, given that they were contrary to section 8[80] of the Canadian Charter of Rights and Freedoms. In the judgment of the Court, Dickson J said:[81]

“For such an authorisation procedure to be meaningful is necessary that the person authorizing the search to be able to assess the evidence as to whether the standard has been met, in an entirely neutral and impartial manner.”

87.Dickson J went on to say:[82]

“While it may be wise, in view of the sensitivity of the task, to assign the decision whether an authorisation should be issued to a judicial officer, I agree with Prowse JA that this is not a necessary pre-condition and safeguarding the rights enshrined in s. 8. The person performing this function need not be a judge, but he must at a minimum be capable of acting judicially.” [Italics added.]

88.In the result, Dickson J concluded:[83]

“In my view, investing the Commission or its members with significant investigatory functions has the result of vitiating the ability of a member of the Commission to act in a judicial capacity when authorizing a search or seizure under s. 10(3). This is not, of course, a matter of impugning the honesty or good faith of the Commission or its members. It is rather a conclusion that the administrative nature of the Commission’s investigatory duties (with its quite proper reference points in considerations of public policy and effective enforcement of the Act) ill‑accords with the neutrality and detachment necessary to assess whether the evidence reveals that the point has been reached where the interests of the individual must constitutionally give way to those of the state. A member of the R.T.P.C. passing on the appropriateness of a proposed search under the Combines Investigation Act is caught by the maxim nemo judex in sua causa. He simply cannot be the impartial arbiter necessary to grant an effective authorization.

On this basis alone I would conclude that the prior authorization mandated by s. 10(3) of the Combines Investigation Act is inadequate to satisfy the requirement of s. 8 of the Charterand consequently a search carried out under the authority of subss. 10(1) and 10(3) is an unreasonable one.”

89.In Klass v Federal Republic of Germany the European Court of Human Rights noted that although the courts were excluded “in respect of the ordering implementations of measures of surveillance” nevertheless “subsequent control or review is provided...by two bodies appointed by the people’s elected representatives, namely, the Parliamentary Board and the G10 Commission.”  Of that scheme, the Court said:[84]

“The Court considers that, in a field where abuse is potentially so easy in individual cases and could have such harmful consequences for democratic society as a whole, it is in principle desirable to entrust supervisory control to a judge.” [Italics added.]

90.Of course, a fundamental component of the scheme of control of surveillance provided for by the ICSO is the layer “supervisory control” of a judge who has duties to enquire and to report on the operation of the scheme.  None of that material or material relating to the passage of the legislation by Legco has been referred to the Court.  Nevertheless, it is relevant to note that the legislation is of recent vintage and that it concerns the balance between privacy and the need for intrusive surveillance which issues are well-known in Hong Kong.

91.Also, it is to be noted that the ICSO replicates features of the Regulation of Investigatory Powers Act, 2000 in the United Kingdom, which also provides for a scheme in which some authorizations may be made by senior police officers.[85]

92.Mr Ross has not drawn the Court’s attention to any challenge made to the legislation in the United Kingdom, given that it too permits Authorisations to be granted by persons other than judicial officers.

Conclusion

93.In my judgment, no reasonably arguable grounds of appeal have been advanced under this heading.

Admissibility of evidence of the meetings: unfairness, breach of rights of privacy and the right against self-incrimination

94.In the course of his oral submissions, Mr Ross accepted that at trial no issue had been taken on behalf of the 2^nd applicant that his rights against self-incrimination were violated by the failure of the ICAC undercover officers to reveal their identities and to caution him during or out the end of the third meeting, at which the 2^nd applicant had made reference to the requirement for an under-the-table payment to be made in connection with securing the agreement to run a restaurant at the hotel.

95.By contrast, it had been submitted to the judge that the 2^nd applicant had been tricked by the role played by his good friend X and by that of the undercover officers, as a result of which it was unfair to admit the evidence at trial.  Also, it was contended that it was unfair to have covertly recorded the meetings.  The judge addressed and rejected those complaints. In doing so, he referred to the judgment of the Court of Final Appeal in the Secretary for Justice v Lam Tat Ming:[86]

“The law however recognises that the use of undercover operation is an essential weapon in the armoury of law enforcement agencies, particularly when the criminal activities are on-going: Secretary for Justice v Lam Tat Ming^[24]. The law accepts that law enforcement agencies may find it necessary to resort to tactics involving elements of subterfuge, deceit and trickery. It will very often be a question of proportionality. Nature and seriousness of the suspected crime must be considered. Corruption offences are serious crimes. The public interest in combating and preventing the offences is very high: HKSAR v Wong Kwok Hung.”

96.In the judgment of the Court, Li CJ said

“Where there is no undercover operation, and a suspect is questioned by a law enforcement officer, the suspect should first be cautioned under the Secretary for Security’s rules and directions. The caution would remind him of his right of silence. He is reminded that he has a choice whether to speak or to remain silent. If he chooses to speak and confesses, the confession to be admissible must be established to be voluntary. Thus, the suspect has the safeguard of the caution as well as the safeguard of the rule of voluntariness.”

97.Of the circumstances obtaining in an undercover operation, Li CJ said: [87]

“That situation must be contrast that with the situation where an undercover operation is mounted. It would be absurd to suggest in the context of such an operation that a caution could be administered to the suspect. He would of course not know that he is facing a law enforcement officer.... The suspect therefore would not have the benefit of the safeguards of the caution and the voluntariness rule.”

98.Of the fact that such an operation necessarily involved trickery and subterfuge, Li C J                  said:[88]     

“The law recognises that the use of undercover operations is an essential weapon in the armoury of the law enforcement agencies; particularly their use when the criminal activities are ongoing but also their use after crimes are completed to obtain evidence to bring the criminal to book. The use of undercover operations plays an important part in society’s struggle to combat crime especially serious crime, whether it be corruption, trafficking in dangerous drugs or terrorism. But the success and indeed viability of such undercover operations depend upon the concealment of the true identity of the law enforcement officer in order to establish the appropriate relationship with the alleged wrongdoers. They therefore unavoidably involve elements of subterfuge, deceit and trickery. The law accepts that law enforcement agencies may find it necessary to resort to tactics of that kind.” [Italics added.]

99.Of the circumstances in which an accused’s right of silence might be infringed in the context of an undercover operation, Li CJ said:[89]

“In the context of an undercover operation involving a suspect, when could it be said that his right of silence is infringed? In answering this question, the law has to apply practical commonsense.

Where the undercover officer plays a passive role and hears or overhears the confession or records it, there can be no basis for rejecting it. Keeton (1970) 54 Cr App R 267 and HKSAR v. Ng Wai-man [1998] 3 HKC 103 are examples of this situation. It has been volunteered freely without interrogation on the part of the officer even though he has misrepresented his identity thereby inducing the suspect to believe that he is speaking to a person who is not a person in authority.

The real problem arises where the undercover officer plays an active role in procuring the confession from the suspect by asking questions.  If it were not an undercover operation, the suspect would have to be cautioned reminding him of his right of silence and enabling him to make a choice whether or not to speak.  With an undercover operation, this obviously could not be done.  In this situation, once the officer actively questions the suspect, we enter into an area which may engage the exercise of the residual discretion.”

100.Of course, the factual context in which Li CJ was addressing those issues was of an offence that had already been committed.  So, of the application of those principles to such a situation, he said:[90]

“If all the officer does is to draw attention to the incident which gives rise to the offence charged, in the absence of any other relevant circumstances, there is no persuasive reason for excluding a confession made. The officer is doing no more than providing an opportunity for the suspect to speak. If however what the officer does amounts to interrogation, the discretion would ordinarily be exercised so as to exclude the confession. Such an interrogation would constitute a derogation of the accused’s right of silence and thus prejudice his fair trial.”

101.Of the different considerations relevant to undercover operations into past criminal offences in contrast to current or future criminal activity, Li CJ said:[91]

“That situation is to be contrasted with the undertaking of undercover operations to uncover ongoing criminal activities. There, “the accusatory stage” with a suspect will, generally speaking, not have been reached and different considerations would apply even where incriminating admissions are made of past offences.”

102.Under the rubric ‘Breach of defendants’ rights / unfairness’, the judge addressed the evidence of the roles of the respective applicants in their meetings with the undercover officers:[92]

“Mr Harris submitted D1 was persistently incited to acquiesce to the term “under-the-table money”.

As can be seen from the transcripts of all the meetings, far from interrogation by any UCs, D2 actively made reference to the payment of licence fee and that it would go to the pocket of D1 personally.  He even suggested that the payment could be concealed by inflating the renovation costs.  He suggested to pay cash and that half of it should be paid before signing of the catering contract.  D2 was active, willing and enthusiastic in the meetings.

In the meetings when D1 was present, D2 remained active and enthusiastic proposing how the money should be paid.  D1 never made objection or correction to the suggestions of D2.  It is noted that the term “under-the-table money” was used by UCs a few times.  However they did not prompt D1 or D2 to comment or explain on the meanings of this term.

I do not see any questioning by the UCs that interrupted the natural flowing of the conversation.”

103.In the result, the judge concluded:[93]

“Upon careful examination of the transcript of the meetings, I did not find interrogation, prompting or any kind of improper means by any of the UCs.”

104.Subsequently, he said:[94]

“Having considered all the circumstances of the case and submissions of counsel, I find that the overall behavior of the ICAC was not unfair.

In my view, the evidence was not unfair to the defendants in the light of their defence. ...

The tests in Mohammad Riaz Khan are met.  I refused to exercise my discretion to exclude the evidence.”

105.It is to be noted that the undercover operation went overt in the eighth meeting immediately after the 1^st applicant, in the presence of the 2^nd applicant, received $250,000 in cash from one of the undercover officers.  

106.Having regard to the judge’s findings in respect of the conduct of the respective applicants in their meetings with the undercover ICAC officer and to the fact that it was clear that potentially multiple persons were involved in the impugned conduct, together with the matters described in the in the judgment of Li CJ as relevant to an undercover operation, in my judgment it is not reasonably arguable that the 2^nd applicant’s rights of silence were breached, so that the evidence of the undercover ICAC officers ought to have been excluded.

The joinder of a charge of conspiracy to solicit an advantage with a charge of dealing with property known or believed represents the proceeds of an indictable offence

107.The short answer to the complaint by Mr Wong that it was impermissible of the prosecution to bring a charge of conspiracy to solicit an advantage (Charge 1) together with a charge of dealing with property known or believed represents the proceeds of an indictable offence (Charge 2) is that those charges were supported by evidence.  The fact that the evidence also supported a charge of accepting an advantage is nothing to the point.  The prosecution was entitled to bring the two charges.  In any event, as was conceded in the oral hearing, little significance attaches to the issue, given that the judge imposed concurrent sentences on each of the charges.  There is no merit in this proposed ground of appeal against conviction.

Conclusion

108.For the reasons set out above, in my judgment there are no arguable grounds of appeal against conviction advanced by the 1^st and 2^nd applicants.  Accordingly, I refuse them leave to appeal against conviction.

Ms Alice Chan, SADPP, of the Department of Justice, for the respondent

Mr Philip Wong, instructed by Jim & Co., for the 1^st applicant

Mr Phillip Ross, instructed by King & Co., assigned by Director of Legal Aid, for the 2^nd applicant

[1] Reasons for Verdict, paragraph 249.

[2] Reasons for Verdict, paragraph 293.

[3] Reasons for Verdict, paragraph 190.

[4] Reasons for Verdict, paragraph 190.

[5] Reasons for Verdict, paragraphs 140-5.

[6] Reasons for Verdict, paragraph 145.

[7] Reasons for Verdict, paragraph 146.

[8] Reasons for Verdict, paragraph 276.

[9] Reasons for Verdict, paragraph 261.

[10] Reasons for Verdict, paragraph 257.

[11] Reasons for Verdict, paragraph 263.

[12] Reasons for Verdict, paragraph 249.

[13] Reasons for Verdict, paragraph 253.

[14] Reasons for Verdict, paragraph 266.

[15] Reasons for Verdict, paragraphs 271-3.

[16] Reasons for Verdict, paragraph 282.

[17] Reasons for Verdict, paragraph 278.

[18] HKSAR v Ng Po On (2008) 11 HKCFAR 91.

[19] Reasons for Verdict, paragraph 281.

[20] Reasons for Verdict, paragraph 293.

[21] Reasons for Verdict, paragraph 284.

[22] Reasons for Verdict, paragraph 288.

[23] Reasons for Verdict, paragraph 307.

[24] HKSAR v Ng Po On.

[25] Hunter et Al v Southam Inc 11DLR (4^th ) 641, at 654.

[26] Klass & Others v Federal Republic of Germany 2 EHRR 214, paragraph 52.

[27] HKSAR v Ying Jim Ming, Jimmy (HCMA 432/2009; unreported,6 May 2010) .

[28] Reasons for Verdict, paragraph 141.

[29] HKSAR v Agara[2014] 2 HKLRD 647.

[30] HKSAR v Agara, paragraph 4.

[31] Type 1.

[32] Type 2.

[33] Sections 39 and 40.

[34] Reasons for Verdict, paragraph 184.

[35] Reasons for Verdict, paragraph 187.

[36] Secretary for Justice v Lam Tat Ming [2000] 2 HKLRD 431.

[37] Reasons for Verdict, paragraph 108.

[38] Reasons for Verdict, paragraph 6.

[39] Reasons for Verdict, paragraph 8.

[40] Reasons for Verdict, paragraph 15.

[41] Reasons for Verdict, paragraph 11.

[42] Reasons for Verdict, paragraph 13.

[43] Reasons for Verdict, paragraph 46.

[44] Reasons for Verdict, paragraphs 49-50.

[45] Reasons for Verdict, paragraphs 250-1.

[46] Reasons for Verdict, paragraph 300.

[47] HKSAR v Chan Chi Wan Stephen [2016] 3 HKLRD 186 (26 October 2015) .

[48] HKSAR v Chan Chi Wan Stephen, paragraphs 61-2.

[49] Secretary for Justice v Chan Chi Wan, Stephen (FAMC No. 4 of 2016) .

[50] Appeal Bundle, pages 1164 S - 1165 A.

[51] Appeal Bundle, page 1165 B-G.

[52] Reasons for Verdict, paragraphs 108-9.

[53] Reasons for Verdict, paragraph 120.

[54] Reasons for Verdict, paragraph 138.

[55] Reasons for Verdict, paragraph 106.

[56] HKSAR v Lee Ming Tee (No 2) (2003) 6 HKCFAR 336.  (See paragraph 170.)

[57] Reasons for Verdict, paragraph 140.

[58] Reasons for Verdict, paragraph 140.

[59] Reasons for Verdict, paragraph 141.

[60] Reasons for Verdict, paragraph 142.

[61] Reasons for Verdict, paragraph 144.

[62] HKSAR v Ying Jim Ming, Jimmy, paragraph 28.

[63] HKSAR v Ying Jim Ming, Jimmy, paragraph 32.

[64] HKSAR v Ying Jim Ming, Jimmy, paragraph 34.

[65] HKSAR v Lee Ming Tee (2003) 6 HKCFAR 336.

[66] HKSAR v Ying Jim Ming, Jimmy, paragraphs 40-1.

[67] R v Preston [1994] 2 AC 130.

[68] Jasper v United Kingdom (2000) 30 EHRR 441.

[69] HKSAR v Ying Jim Ming, Jimmy, paragraphs 45.

[70] Jasper v United Kingdom, paragraphs 51-2.

[71] HKSAR v Ying Jim Ming, Jimmy, paragraphs 46-7.

[72] Jasper v United Kingdom,paragraph 9.

[73] Jasper v United Kingdom,paragraph 11.

[74] Jasper v United Kingdom,paragraph 12.

[75] Jasper v United Kingdom,paragraph 57.

[76] Reasons for Verdict, paragraph 138.

[77] Reasons for Verdict, paragraph 140.

[78] Reasons for Verdict, paragraph 127.

[79] Reasons for Verdict, paragraph 142. [Italics added.]

[80] “Everyone has the right to be secure against unreasonable search and seizure.”

[81] Hunter et Al v Southam Inc, page 654

[82] Hunter et Al v Southam Inc, page 654.

[83] Hunter et Al v Southam Inc, page 656.

[84] Klass v Federal Republic of Germany,page 256.

[85] Blackstone-Criminal Practice 2016 D1. 192:

“Authorisation of directed surveillance or the use of covert human intelligence source must be by designated persons by a designated person (of the rank of superintendent or equivalent) (ss 28(1) and 29(1)).”

[86] Reasons for Verdict: paragraph 181.

[87] Secretary for Justice v Lam Tat Ming, page 442 D-F.

[88] Secretary for Justice v Lam Tat Ming, page 442 H-J.

[89] Secretary for Justice v Lam Tat Ming, page 443 C-G.

[90] Secretary for Justice v Lam Tat Ming, page 443 G-I

[91] Secretary for Justice v Lam Tat Ming, page 444 C-D.

[92] Reasons for Verdict, paragraphs 184-6.

[93] Reasons for Verdict, paragraph 187.

[94] Reasons for Verdict, paragraphs 206-7.