HKSAR v. Ha, But Yee

FAMC No. 41 of 2016

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 41 OF 2016 (CRIMINAL)

(ON APPLICATION FOR LEAVE TO APPEAL FROM

CACC NO. 424 OF 2013)

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DETERMINATION

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Mr Justice Ribeiro PJ:

1.This application for leave to appeal was dismissed at the hearing for reasons which we now provide.

2.The applicant was convicted[1] before Patrick Li J and a jury of four offences of offering an advantage to an agent[2] and sentenced to seven years’ imprisonment.  The Court of Appeal quashed that conviction[3] and, after a further hearing, ordered the applicant to be re-tried before a different judge on a fresh indictment.[4] 

This leave application

3.The applicant now seeks leave to appeal on the substantial and grave injustice basis against the order for a retrial, arguing that such order should not have been made because:

(a)   the Court of Appeal had declined or failed to deal with a central ground of appeal challenging the admissibility of the evidence of a prosecution expert witness, Cheng Kai-sum (“Cheng”), essential to the prosecution’s case, which, if determined in the applicant’s favour would have compelled a finding of no case to answer and therefore removed any basis for a retrial (“the first ground”);

(b)   it would unjustly permit the prosecution to re-cast its case by adding a new expert witness to make good fundamental defects in Cheng’s evidence (“the second ground”); and

(c)   the applicant had, by the time his conviction was quashed, served about 2 ½ years of his seven-year sentence and because he was in poor health, having been diagnosed with liver cancer (“the third ground”).

The reason for quashing the conviction

4.The case against the applicant, who traded intensely in large volumes of derivative warrants issued by Deutsche Bank (“DB”), was that he and his family (“the Ha family”) had paid bribes totalling $24.8 million to a co-defendant (Ma Sin Chi, “Ma”), who was DB’s chief trader who played the role of liquidity provider in respect of derivative warrants, in return for information and assistance in trading such warrants resulting in the Ha family realising a profit exceeding $224 million over a period of some 16 months.

5.The prosecution relied heavily on Cheng who was accepted by the Judge as an expert witness qualified to testify on trading in derivative warrants.  Cheng gave evidence, inter alia, on the nature of the derivative warrant market; the role of various players, including traders, brokers and liquidity providers; how prices are set and the factors affecting prices; trading strategies; and the terminology used in trading.  He also gave evidence regarding the applicant’s trading patterns and the significance of aspects of recorded telephone conversations between the applicant and Ma discussing certain trades.

6.The defence mounted a series of attacks on Cheng including a challenge to his expertise and qualification to testify as such an expert, as well as a severe attack on his credibility, calling into question his integrity, impartiality and honesty as a prosecution witness.

7.The Court of Appeal quashed the conviction on the ground that the Judge had failed to give a proper direction on the defence case regarding Cheng’s credibility.[5]  Their Lordships held that “[on] this ground alone” they would allow the appeal, adding that there was “also one other ground of appeal which was of concern to us”.[6]  That was a complaint that the prosecution had strayed beyond the charges and prejudicially accused the applicant of uncharged wrongful conduct.  As that ground had not been adequately developed in argument, the Court of Appeal ultimately did not base its decision on this additional ground.

The first ground

8.The first ground of this application is founded on the Court of Appeal’s decision to quash the conviction solely because of the inadequacy of the direction on Cheng’s credibility.  McWalters JA, giving the judgment of the Court, stated that in view of the conclusion reached on “... the ground of appeal concerning the judge's directions to the jury on Mr Cheng's credibility, it is not necessary for us to consider the other grounds of appeal”.[7]

9.Focussing on this, Mr Andrew Bruce SC[8] argues that “by refusing to determine the ground of appeal which challenged the admissibility of the Respondent’s expert evidence, the CA avoided the issue of whether there was in fact no case to answer on the basis of the case advanced at trial”.[9]  He contends that “If Cheng’s evidence was inadmissible, as the Applicant had argued before the CA, it is inevitable that no retrial would or could have been ordered because there would have been no case to answer.”[10]  Ordering a retrial in this situation, he submits, constitutes a substantial and grave injustice to his client.

10.That submission does not fairly or accurately reflect the Court of Appeal’s actual decision.  It is abundantly clear from their Lordships’ judgment, as Mr Martin Hui SC[11] points out, that the repeated challenges to the admissibility of Cheng’s evidence on the grounds of his alleged lack of expertise and experience were meticulously scrutinised over the seven days spanned by the hearing.  Thus, the voir dire on this very question was closely examined, the Court of Appeal noting that the Judge had decided that criticisms of Cheng’s lack of trading experience in derivative warrants only went to weight and not admissibility.[12]  The issue of admissibility received further scrutiny when consideration was given to how the Judge had dealt with the editing of Cheng’s report to excise matters falling outside the proper ambit of expert testimony.[13]  Pausing at that stage, McWalters JA noted:

“Thus, by the time Mr Cheng came to commence his evidence he had survived a challenge to his expertise generally and, also specifically in respect of the contents of the telephone conversations, and his paragraph 128 had survived an objection to its admissibility based on the ground that its contents related to the interpretation of evidence, which was a matter for the jury and not of any expert.”[14]

11.His Lordship went on to note that Cheng had been cross-examined, inter alia on “his qualifications, ie his expertise” and on “his independence as an expert witness” and noted Cheng’s responses to criticisms in that context.[15]

12.Against that background, McWalters JA’s statement that “it is not necessary for us to consider the other grounds of appeal”[16] obviously does not mean that the Court of Appeal had refrained from considering the inadmissibility ground.  It obviously does not mean that the Court “refused to determine” that ground or “avoided the issue” as suggested by the applicant.  McWalters JA noted the centrality of Cheng’s evidence to the prosecution, commenting that “without his evidence there was no prosecution case”.[17]  It beggars belief to suggest that the Court of Appeal could nevertheless have proceeded without deciding whether such crucial evidence was admissible at all.

13.We agree with Mr Hui SC’s submission that when their Lordships stated: “... there was also one other ground of appeal which was of concern to us and that was the evidence of the acts of other assistance”,[18] they were implicitly saying that they did not regard the admissibility challenge as a ground causing them concern and therefore that inadmissibility of Cheng’s evidence was not a basis for allowing the appeal.  The Court of Appeal did not avoid the admissibility issue but resolved it against the applicant.  That is sufficient to dispose of the first ground.  As there is to be a retrial, we will refrain from discussing the proposition that a no case to answer conclusion would have been inevitable.

The second and third grounds

14.The second and third grounds raise matters of discretion which the Court of Appeal fully canvassed in its judgment on the retrial, applying the correct legal principles. Lunn VP,[19] giving the judgment of the Court, cited Au Pui Kuen v Attorney General,[20] on the discretion having to be exercised judicially to determine whether a retrial is required in the interests of justice after balancing factors in favour and against.  He also referred to this Court’s decision to like effect in Ting James Henry v HKSAR. [21]

15.The Court of Appeal concluded that a retrial was appropriate in the present case having taken into account all relevant factors, including the seriousness of the charges and their implications for Hong Kong as a financial centre, the apparent strength of the prosecution case, the time already spent in custody, the medical evidence and the applicant’s prognosis and the burdens of a fresh trial.  We do not consider it reasonably arguable that the Court of Appeal made an error of principle which would justify this Court interfering with its exercise of discretion.

16.For the aforesaid reasons, we refused leave to appeal.

Mr Andrew Bruce SC and Mr Joseph Lee, instructed by Howell & Co., for the Applicant

Mr Martin Hui SC, DDPP and Ms Peggy Lo, SPP of the Department of Justice, for the Respondent