HKSAR v. Chang Wai Hang Alab

[English Translation – 英譯本]

CACC 71/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 71 OF 2014

(ON APPEAL FROM DCCC 721/2013)

__________________

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REASONS FOR JUDGMENT

Hon Poon JA (giving the reasons for judgment of the Court):

A.   Introduction

A1. Conviction

1.The applicant was charged with two charges of dealing with property known or believed to represent proceeds  of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance[1].

2.The first charge particularized that the applicant, between the 14th day of September, 2010 and the 2nd of February 2012, both dates inclusive, in Hong Kong, knowing or having reasonable grounds to believe that property, namely, a total sum of €1,680,267.40 European currency, $77,169.33 United States currency and $69,381.99 Hong Kong currency in the account with The Hongkong and Shanghai Banking Corporation Limited(“HSBC”) in the name of China Mineral Offshore Holdings Limited(“China Mineral Offshore”) (“account 1”), in whole or in part directly or indirectly represented the proceeds of indictable offence, dealt with the said property.

3.The second charge particularized that the applicant, between the 24th day of November 2010 and the 4th day of October 2011, both dates inclusive, in Hong Kong, knowing or having reasonable grounds to believe that property, namely, a total sum of €1,042,796.16 European currency and $870,017.75 Hong Kong currency in the account with the Hongkong and Shanghai Banking Corporation Limited(‘account 2”) in the name of Asian Green Technology Holdings Limited (“Asian Green”), in whole or in part directly or indirectly represented the proceeds of indictable offence, dealt with the said property.

4.The applicant pleaded not guilty to all the charges and stood trial before H. H. Judge Gary Lam (“the trial judge”).

5.The trial judge found him guilty of both charges on 5 February 2014 and sentenced him to a total of 4 years and 6 months’ imprisonment on 21 February 2014.

A2.   Abandonment of appeal

6.The applicant applied for leave to appeal against the two convictions by filing Form XI on 3 March 2014. On 14 April, the Court informed him of the arrangement of setting the matter down for hearing and directed him to file grounds of appeal and written submissions within 7 days. He did not do as directed.  The Court later set the matter down for hearing for 10 July 2014.

7.The applicant filled in a “Prisoner’s Statement” on 30 May 2014:

“I am determined to cancel the application to appeal against conviction in respect of DCCC 721/2013. I understand that once the appeal is cancelled, I cannot under general circumstances apply to appeal against the convictions in this case again.”

8.On 3 June 2014, the applicant signed and submitted to the Court a Notice of Abandonment of Appeal to abandon his application for leave to appeal against conviction. The Prisoner’s Statement was attached to the Notice of Abandonment of Appeal. On 4 June, the Court informed the applicant that his application for leave to appeal was dismissed as he had abandoned it.

A3.   Two applications

9.On 10 November 2014, the Court of Final Appeal handed down its judgment on HKSAR and Pang Hung Fai[2].

10.On 29 September 2015, the applicant applied to court to ask the Court of Appeal to treat his Notice of Abandonment of Appeal as a nullity and to restore his application for leave to appeal (“application to treat the abandonment as a nullity”). He filed an affirmation by Chiu Bo Kwong (transliteration) (“Mr Chiu”), a fellow prisoner, to support his application.

11.The applicant said in his affirmation that when he initially lodged the appeal, he was not legally represented. He was misled by Mr Chiu into believing that an application to appeal would jeopardize his chance of getting parole, and only gave up the appeal as he also had used up all his savings on the trial. The wording used in the Prisoner’s Statement was taught to him by Correctional Services Officers when they arranged him to sign the Notice of Abandonment of Appeal. He had not sought legal advice, and was under the impression that even if the Notice of Abandonment of Appeal had been filed, he could still restore the appeal in future as long as there was ground to do so. The abandonment would not lead to the permanent loss of the chance to appeal. Mr Chiu also made an affirmation to confirm that on a day in March 2014, he told the applicant that if he insisted on applying for appeal, his chances of getting parole from the Release under Supervision Board would be jeopardizied.

12.The applicant learned of the Court of Final Appeal’s decision on HKSAR v Pang Hung Fai after he had abandoned the appeal. After seeking legal advice, he felt that there was strong ground to appeal against the convictions in the present case. He therefore made an “application to treat the abandonment as a nullity” and attached the “preliminary grounds of appeal against conviction” drafted by his counsel, Mr Wong Man Kit, SC and the transcript of the trial proceedings to the affirmation. Mr Wong advanced a total of eleven grounds of appeal with ground one being the most important one, namely, the trial judge did not apply the legal principle laid down by the Court of Final Appeal in HKSAR v Pang Hung Fai and therefore erred in finding that the applicant had reasonable ground to believe that the properties in charge one and charge two was “black money”.

13.The applicant considered that it was not fair to him if he was unable to appeal again, and said that if the Court of Appeal found that the Notice of Abandonment of Appeal was still valid and rejected his application to treat the abandonment as a nullity, he would apply to ask the Court of Appeal to advise the Chief Executive to refer the present case to the Court of Appeal to deal with pursuant to section 83P (“section 83P”) of the Criminal Procedure Ordinance[3] (“the section 83P application”).

A4.   Application refused

14.On 22 January 2016, after hearing the matter, we rejected the application to treat the abandonment as a nullity and the section 83P application. We now give reasons for the decision.

B.   The trial

B1.   Facts of the case

15.The two companies involved in the case were set up in 2010[4]. They opened the accounts involved in the case with The Hong Kong and Shanghai Banking Corporation Limited on 14 September and 24 November respectively. Their shareholder was an Irishman by the name John Hegarty (“Hegarty”). The only director of these two companies was a company called LB Corporation Services Ltd (“LBCS”) solely owned by the applicant. LBCS had once been also the company secretary of Asian Green. The applicant was the sole signatory of the bank accounts of the two companies involved in the case. He was also the sole owner of Scripo Limited (“Scripo”), a BVI company and A&C Business Consultant Ltd (“A&C”), and was the sole signatory of the bank accounts of the companies. The accounts involved in the case had a number of deposits and withdrawals made with the bank account of Scripo, and A&C had been the company secretary of the two companies involved in the case[5]. The applicant transferred on 31 July 2010 the shares he solely owned in A&C to his elder sister. She and her mother were to become the directors of the company.

16.The evidence given by two of the prosecution witnesses[6] showed that they were deceived abroad. From February to May 2011, they wired a total of €1,238,616.88 and €36,135.78 to account 1 and account 2 respectively to purchase the shares of China Mineral Offshore and Asian Green[7].

17.Record showed that there were deposits in the total amounts of €1,680,267.40, US$77,169.33 and HK$69,381.99 made into account 1 from the time it was opened to the time it was closed[8]. When that account was closed on 2 February 2012, its balance was $0. The transaction record included: 5 withdrawals made from that account by the applicant for a total amount of €13,000,000 in cash and transfer in the sum of €85,000 to the account of Transworld Management Limited etc. From the time account 2 was opened to the time it was closed, deposits in the total amount of €1,042,796.16, US$71,359.69 and HK$870,017.75 had been made to it. Its closing balance on 4 October 2011 was $0. Transaction record included: several large sums were withdrawn from it for transfer to the account of Transworld Management Limited etc[9]. A number of large sums were also paid in and out of the bank account of Scripo from the two accounts in question. Transfer made to Scripo totalled almost HK$5 million and the total amount transferred back from Scripo to the accounts involved in the case was over HK$3.4 million[10]

18.The applicant had no dispute regarding the transaction records of the accounts involved in the case and the Scripo account and the fact that the two prosecution witnesses were deceived into making deposits[11]. The dispute was whether the applicant knew that there was property in the accounts known or believed to represent the proceeds of indictable offence, ie, “black money”.

19.As regards the records showing the movements of funds the company accounts involved in the case and those controlled by the applicant (Scripo o, LBCS and A&C) had with his personal account/s and the exchanges of currencies etc, the prosecution argued that judging by the pattern of the movements of the funds, including the large-sum transactions taken place within short periods of time and the quick withdrawals of money deposited with substantial parts of it transferred to the company accounts the applicant controlled or to his personal account/s etc, they could prove that he had knowledge and was dealing with “black money”.

20.The applicant said that he worked in accounting since he obtained the degree in accounting in 1992, and he set up his own company in 1997[12]. Later, in April 2010, he joined Lehman Brown CPA Company Limited (“Lehman Brown CPA”) as a partner[13] at the invitation of an old acquaintance, Dickson Leung. The Beijing head office of Lehman Brown CPA was an accounting firm with over two hundred members of staff[14]. The applicant was under the supervision of Dickson Leung, Russell Brown and Zhou Han etc in the Beijing head office[15]. The applicant only became a registered accountant in 2013[16]. At the time of the offence, the registered accountants of Lehman Brown CPA were Dickson Leung and the wife of the applicant[17].

21.There is no dispute that the wife of the applicant became a 25% shareholder[18] of Lehman Brown CPA on 1 October 2010. Lehman Brown CPA transferred some business of secretarial services companies to the applicant, and all the aforesaid companies, with the exception of Scripo, used the same registered business address[19]. The applicant said LBCS was set up exactly for dealing with the business relating to Lehman Brown CPA, and Scripo was set up as a company to collect the marketing fee of LBCS[20].

22.The applicant recalled that he was introduced by a senior partner of the Beijing head office to a client by the name John Calipari (“Mr C”) in May 2010[21]. Mr C instructed the applicant to set up a company and to open a bank account with Hegarty as the beneficial owner of the company[22]. The applicant claimed that he had perused the information of the investment project[23] and the documents on the trustee agreement between Mr C and Hegarty etc[24]. As he had seen similar business model in other clients, he did not suspect anything[25]. He believed that Mr C was a decent businessman[26] and therefore opened the account involved in the case at his request. He later dealt with the deposits in the account according to the instructions Mr C gave. After the applicant had withdrawn cash from HSBC, he would usually hand the money over to Mr C direct in the bank to leave evidence under the supervision and monitoring of the HSBC.[27]

23.On being asked if he had kept on file the documents Mr C gave him, the applicant explained that he was unable to photocopy the relevant documents due to the limitations of the venue/s of the meeting/s. He had asked Mr C for copies but was in the end not given them. The applicant agreed that he should keep copies[28]. As regards what he knew about the source of the deposits, the applicant said he learned from Mr C that the money was paid in by investors for purchasing shares[29].

24.As regards the question of the transfers he made from the accounts involved in the case to the bank accounts controlled by him, including those of Scripo and A&C, and the transfer back to the two accounts involved in the case part of the money from the aforesaid accounts, the applicant explained that it was because his personal cash flow was insufficient, so Mr C agreed to lend him the money of the two companies involved in the case to help with cash flow[30]. The loans and repayments he made could be found in the transaction records. He agreed that only Hegarty was the beneficial owner of the money[31] but he claimed that he had carefully read his trustee agreement which said that Mr C had full authority to make decisions[32]. The applicant also claimed that he had given Mr C a winning soccer lottery ticket to repay part of the loan[33].

B2.   The findings of the trial judge

25.In the analysis of the trial judge, the applicant had been in the accounting business for a number of years. He also testified that he knew he must keep proper file on the relevant documents when providing his service and dealt with his own money and that of the clients separately. There was no dispute that the applicant had dealt with the money in the two accounts involved in the case, and the two companies did not have any actual business. Besides, their transaction records showed pattern of “money laundering”: huge sums of money were received within a short span of time and withdrawn in full shortly afterwards.

26.The trial judge did not believe the applicant’s claims that he had read documents such as the trustee agreement and the investment projects and that he only carried out the instructions because he trusted Mr C. The trial judge took the view that for someone as experienced as the applicant, it was not possible that not one single copy was kept in the file. He pointed out that the applicant had even failed to carry out this most basic due diligence. He did not accept what he said regarding this and considered that for someone as experienced as the applicant, such degree of negligence was inconceivable.

27.The trial judge pointed out that the applicant had emailed Mr C telling him that the bank was concerned with “money laundering” activities and therefore knew that the business of the company and the source of the money were very important. On top of that, with the applicant’s experience in the business, he should be clear about the risks that existed in dealing with the money in the accounts involved in the case, but he had never tried to find out the background of the clients and the content of the deposits. This was deliberately “turning a blind eye” to the source of the deposits in the relevant bank accounts. As regards the applicant’s claim that he relied on the vetting of HSBC, the trial judge took the view that this was untenable, as HSBC was not aware of the affairs of Mr C and so could only vet the applicant who was the sole signatory of the account.

28.As regards the applicant’s claim that he did not know the source of the money and the background of the depositors, nor did he try to verify what Mr C said. The trial judge took the view that it was “fantasy tale” that the applicant did not only turn a blind eye to the pattern of the payments in and out of the accounts in question (frequent deposits were made which were then withdrawn within a few days), he also never suspected anything. All he said in explanation was because he trusted Mr C. He also blindly carried out his instructions, going so far as to make use of clients’ money to help with his own cash flow in breach of professional ethics.  Besides, no written record whatsoever was kept whether it was a large amount transaction, a loan or a repayment to client.

29.In view of the above reasons, the trial judge found that at the time of the offence, the applicant absolutely had reasonable ground to believe that the money in the accounts in question came from source of an unlawful nature, and dealt with it with such knowledge. He therefore found the applicant guilty.

C.   “Application to treat the abandonment as a nullity”

30.We will first discuss the “application to treat the abandonment as a nullity”.

C1.   Legal principles

31.This Court discussed in detail the relevant local and English cases, as well as those of other common law jurisdictions, including R v Medway[34], R v Bridges [35]in HKSAR and Lai Siu Cheung[36], before laying down the legal principles[37] applicable to Hong Kong in respect of an application to treat the abandonment as a nullity. They can be summarized as follows:

(1)   Once an appeal has been dismissed, the Court of Appeal is functus officio. It does not have inherent jurisdiction to hear an appeal that has been dismissed. To do so would require statutory authorization and for that none exists, save the power conferred by section 83P.

(2)   Therefore, the Court of Appeal no longer has the jurisdiction to deal with the appeal once it has been abandoned, and therefore dismissed.

(3)   If an applicant applies to the Court of Appeal to restore the hearing of his appeal that has been abandoned and therefore dismissed, he must prove that as a matter of law, his abandonment may properly be treated as if it had never occurred, that is his abandonment was in law a nullity. It is only then that leave may be granted to the application. This is the only situation where the Court of Appeal may restore the hearing of an appeal that has been dismissed due to abandonment.

(4)   The only test to establish that an appellant’s act of abandoning the appeal is a nullity is that the court must be satisfied that the abandonment was not the result of a deliberate and informed decision, in other words, the appellant’s mind did not go with the act of abandonment.

(5)   Whether the abandonment may be treated as a nullity concerns the applicant’s understanding of the effect or consequences of the document he is signing or, perhaps, misapprehending the effect at law of an appeal were he to persist. An appellant who, properly informed, knows what the document is that he is signing and the effect of it and, with that knowledge, deliberately signs the Notice of Abandonment of Appeal, may not satisfy the court that his act of abandonment is a nullity.

(6)   If an applicant relies on the ground of having been given wrong advice to support his application:

(i)   If the wrong advice he relied on goes to the nature or effect of the act of abandonment, then the Notice of Abandonment may be treated as a nullity.

(ii)   If he signed the Notice of Abandonment of Appeal under the influence of the wrong legal advice he was given about the prospects of success on his appeal, the Court of Appeal may not treat the Notice as a nullity as it was wrong advice regarding the merits of the appeal which does not go to the signing of the Notice of Abandonment or its nature or effect.

C2.   Grounds and submissions of the applicant

32.The applicant said in his affirmation:

“ 4. Later, I met a prisoner who was serving his sentence while I was serving my sentence at Tong Fuk Correctional Institute. His name was Chiu Bo Kwong. When he learned that I was applying for leave to appeal against the convictions, he told me that if I applied for appeal, my chances of getting parole would be jeopardized. I understood that Mr Chiu was imprisoned for theft and was released on parole in February 2015 to stay at Phoenix House and regained liberty in August 2015.

5. As the chance to be released on parole was extremely important to me, and at that time, I firmly believed what Mr Chiu Bo Kwong said, that is, if I applied for appeal, my chances of getting parole would be jeopardized; besides, at that time I had spent almost all my savings on the trial, I therefore decided to abandon the appeal.

...

9. ...Although it was written on the Prisoner’s Statement that I understood that I could not under general circumstances apply to appeal against the convictions in this case again, I did not know at that time that once I abandoned the appeal, I would lose the chance to appeal for good. At that time, I thought if in future I hoped to appeal again, I could do so as long as I had the grounds to do so. The wording in this Prisoner’s Statement was taught to me by the Correctional Officers of the Tong Fuk Correctional Institute. At that time, I had not sought any legal advice.

...

11.   Later, I learned that a crucial judgment was made by the Court of Final Appeal in HKSAR and Pang Hung Fai (FACC8/2013). After seeking legal advice, I believed that I had strong grounds to appeal against the convictions entered in the trial. Besides, it was my intention to lodge an appeal last year; it was only abandoned as I was misled by Mr Chiu Bo Kwong into believing that applying for appeal would jeopardize my chance of getting parole. When I abandoned the appeal, I thought I could still appeal again in future as long as I had the grounds to do so, that’s why I wrote to the court, hoping that the appeal could be restored...”

33.The applicant’s submissions can be summarized in three points:

(1)   The applicant wrongly believed the advice Mr Chiu gave that “applying for appeal against conviction will jeopardize the chance of getting parole”. As a result, he abandoned the appeal.

(2)   When he abandoned the appeal, he thought that he could still appeal again in future as long as he had grounds to do so; and

(3)   He is now aware of the decision by the Court of Final Appeal in HKSAR and Pang Hung Fai and having sought legal advice, he feels that he has strong ground to appeal against the convictions.

34.Mr Wong, SC referred the Court to the English cases of R v Maxim Julian Bellos[38]and R v Keating[39] and urged upon us that the circumstances of the present case were identical to those in Keating: The applicant was likewise misled by other people (the counsel representing him) into thinking that lodging an appeal would bring about bad consequences and therefore filed a Notice of Abandonment under the misconception. His act of abandonment should be treated as a nullity.

C3.   Respondent’s submissions

35.Mr William Tam, SC, Deputy Director of Public Prosecutions, acting for the Respondent argued that according to the legal principles established in the relevant cases, the focus of the test determining whether or not a Notice of Abandonment of Appeal might be treated as a nullity was whether or not the court was satisfied that the abandonment was not the result of a deliberate and informed decision, and whether or not the applicant did not understand the nature and effect of the Notice that he was signing. A deliberate decision made on the basis of wrong legal advice might not render the Notice to be nullified as it did not go to whether or not he was aware of the nature and effect of the document. Mr Tam, SC stressed that the Court of Appeal would not enquire if the grounds of appeal were strong before finding that the Notice of Abandonment should be treated as a nullity.

36.Mr Tam, SC argued that the fact that the applicant was misled by Mr Chiu into believing that “applying for appeal may jeopardize his chance of getting parole” had nothing to do with his understanding of the nature and effect of the Notice of Abandonment of Appeal. The was no discussion and analysis in Keating on the question of whether the applicant did it knowingly and deliberately, and at the time when the decision in Maxim Julian Bellos was given, the UK had already repealed the Criminal Appeal Act, Section 17, a section that carried effect similar to that of section 83P of the Ordinance. Different legal frameworks require consideration of different factors, and therefore no parallel can be drawn. These two English cases are not binding on the courts of Hong Kong either.

37.As regards the applicant’s submission that he learned about the decision in Pang Hung Fai after his appeal had been dismissed, Mr Tam, SC submitted that Lai Siu Cheung laid down the principle that the prospects of success was not the basis for considering whether or not the Notice of Abandonment should be treated as a nullity. And the fact that the applicant regretted the decision after learning about Pang Hung Fai and made an application to treat the abandonment as a nullity showed that he understood the nature and effect of the Notice. Besides, after the applicant had submitted the Notice of Abandonment on 3 June 2014, he waited until 29 September 2015 before he applied for treating the abandonment as a nullity. And according to Ooi Lim Khoon[40], the longer the delay, the more difficult it may be for the applicant to convince the court that he changed his mind not only because he had reconsidered the prospects of success of the appeal.

38.Mr Tam, SC argued that the applicant was only trying to justify himself when he said: “when abandoning the appeal, (I) thought (I) could appeal again in future as long as (I) had the grounds to do so”. It was not convincing because it was clearly stated on the Notice of Abandonment of Appeal that the applicant gave up all further legal proceedings, and it was also written in the applicant’s statement: “(I) understand that after cancelling the appeal, under general circumstances..., (I) cannot not apply to appeal against the convictions in this case again.”

C4.   The views of this Court

39.As pointed out above, if the applicant gave up the appeal because he was misled by wrong advice that caused him to misunderstand the consequence of insisting on pursuing the appeal, although his act of signing the Notice of Abandonment of Appeal was deliberate, in the eyes of the law, he did not do it knowingly.  When an appellant was misled by wrong advice into believing that his sentence may be affected if he insisted on pursuing the appeal, this principle is also applicable. The Court may treat the abandonment of the appeal as a nullity: see R v Johnson[41], the other Australian case referred to in R v Bridges; R v Keating and R v Maxim Julian Bellos[42]. Therefore, we do not accept the submission of Mr Tam, SC in paragraph 36 above.

40.However, we are of the view that the applicant had failed to produce evidence to satisfy us that we should accept that he was misled by Mr Chiu into misunderstanding the consequence of insisting on pursuing the appeal when he signed the Notice of Abandonment of Appeal and that he did not abandon his appeal knowing exactly what he was doing.

41.First, in R v Keating, it was understandable why the appellant accepted the advice of the counsel. But in the present case, Mr Chiu was only a fellow prisoner of the applicant. There is no evidence to show that he was a lawyer or legally-trained. It was neither reasonable nor credible that the applicant should deeply believe what he said.

42.Further, the applicant had not produced any evidence to prove that what Mr Chiu said was wrong at law. Mr Wong, SC cited Regulation 6 of the Prisoner (Release under Supervision) Regulations[43]. The regulation provides that when considering an applicant’s case, the Board shall give effect to the matters mentioned in the First Schedule. However, the matters set out in the First Schedule do not necessarily support the claim that what Mr Chiu said was wrong. In our view, Mr Wong, SC has failed to convince us that what Mr Chiu said was wrong in law.

43.Lastly, the applicant was a professional accountant and a well-educated person. He understands Chinese and English. In his Prisoner’s Statement, he wrote: I am determined to cancel the application to appeal against conviction in respect of DCCC 721/2013. I understand that once the appeal is cancelled, I cannot under general circumstances apply to appeal against the convictions in this case again.” Directly above where the applicant’s signature appeared on the Notice of Abandonment of Appeal, it clearly stated: “I...now inform you, I abandon all further legal proceedings in respect of the appeal”. In our view, it was impossible for the applicant not to know that after he had signed the Notice of Abandonment of Appeal, he would no longer be able to appeal against conviction again. He claimed that it was his understanding at that time that after abandoning the appeal, he could still apply to appeal in future as long as he had grounds to do so. Clearly, it was after he became aware that the decision in Pang Hung Fai might be to his advantage and he hoped to appeal again that he used the excuses that he was misled by Mr Chiu, was taught the wording by the officers of Tong Fuk Correctional Institute when filling in the document, had not sought legal advice and thought that he could still appeal again in future as long as he had the grounds to do so etc. to explain why he indicated he knew what consequences there would be in the Prisoner’s Statement and the Notice of Abandonment of Appeal. As pointed out by the respondent, he was trying to justify himself. We do not accept this.

44.As regards the applicant’s reliance on Pang Hung Fai, this is relevant to what prospects of success his appeal had. However, as pointed out above, the legal advice the applicant got regarding the prospects of success of the appeal when he abandoned the appeal is not a ground at all in considering whether his Notice of Abandonment of Appeal should be treated as a nullity, less so the legal advice he got after he had abandoned the appeal.

45.In view of the above reasons, we consider that the applicant has failed to prove that his Notice of Abandonment of Appeal was a nullity and we dismiss his application to treat the abandonment as a nullity.

D.   The section 83P application

46.We next deal with the section 83P application.

D1.   The provision

47.Section 83P of the Criminal Procedure Ordinance provides:

“(1) Where a person has been convicted on indictment..., the Chief Executive may, if he thinks fit, at any time either-

(a) refer the whole case to the Court of Appeal and the case shall then be treated for all purposes as an appeal to the Court of Appeal by that person; or

(b) if he desires the assistance of the Court of Appeal on any point arising in the case, refer that point to the Court of Appeal for its opinion thereon, and the Court of Appeal shall consider the point so referred and furnish the Chief Executive with its opinion thereon accordingly.

(2) A reference by the Chief Executive under this section may be made by him either on an application by the person referred to in subsection (1), or without any such application.

(3)     For the avoidance of doubt, it is hereby declared that this section also applies in a case where an appeal has been heard and determined by the Court of Final Appeal.”

48.According to section 83P(2), a convicted person may make an application to the Chief Executive and the Chief Executive may also refer the matter to the Court of Appeal without any such application. Section 83P(1) gives the Chief Executive unfettered discretion to consider whether or not to refer a certain case to the Court of Appeal. Mr Tam, SC informed this Court, when the Chief Executive received a petition made under section 83P, he would refer the matter to the Department of Justice and the Legal Policy Division of the Department of Justice would take over the matter and compile a legal opinion report after consulting the Prosecutions Division for the consideration of the Chief Executive.  Factors the Chief Executive would consider included the prospects of success of the appeal, whether there was any delay in the application and the finality of the case etc. Prospects of success of the appeal are not the only determining factor.

49.If the Chief Executive refused to refer the matter to the Court of Appeal, the applicant may apply for judicial review against the decision: see R v Secretary of State of the Home Office Department, Ex p Hickey and Others (No 2)[44].

50.When the Chief Executive refers the matter to the Court of Appeal, it will treat the matter as having been granted leave to appeal and hear it accordingly: see R v Chart[45].

D2.   The submissions of the applicant

51.Mr Wong, SC referred us to R v Tam Kwok[46], R v Wong Wai Leung[47],and HKSAR v Lai Siu Cheung[48], and emphasized that the Court of Appeal had the power to consider if there was sufficient merit in the grounds of appeal before giving its advice and assistance to the Chief Executive to refer the matter to the Court of Appeal. Mr Wong, SC submitted the following grounds of appeal to assist the Court of Appeal to decide whether it should advise the Chief Executive:

(1)   The trial judge failed to use the correct test: Instead of asking ‘Whether anyone looking at the grounds that the applicant was aware of objectively would believe or should know that the property being dealt with was “black money”’, he used, by mistake, the concept of a common sense, right-thinking member of the community. In other words, he used the test of whether an average reasonable man would so believe (see Pang Hung Fai and HKSAR v Wing Kit and Ye Fang[49] );

(2)   The trial judge made no finding on the beliefs, thoughts and intentions of the applicant regarding the property being dealt with and the people and matters relating to it, and the effect they had on whether or not the applicant reasonably believed that the property being dealt with was “black money” (see HKSAR v Yeung Ka Shing Carson[50] and HKSAR and Yang Sigai[51]);

(3)   Charge one and charge two contained duplicitous charge for they prosecuted the applicants for the dealings he had on numerous dates over a period of time. The total amounts in the charges were the aggregates of the smaller amounts that were involved in a number of dealings (see  HKSAR v Salim, Majed[52], Yeung Ka Shing Carson and Yang Sigai);

(4)   The prosecution must prove that the property being dealt with was “black money”; and in the present case, the money that was proved to have been obtained by deception in charge one was only the over 1.2 million euros that Mr K deposited into the account, and the over 30000 euros that Mr H deposited into the account in charge two (see Oei Hengky Wiryo[53], Yeung Ka Shing Carsonand Yang Sigai);

(5)   According to Pang Hung Fai, the trial judge should consider from the perspective of the applicant the factor that the applicant had immense trust in Mr C. The trial judge failed to do so.

(6)   The trial judge failed to follow the principle laid down in Pang Hung Fai to consider that the applicant had informed the HSBC the business plan and situation of Mr C, and HSBC allowed the applicant to open the account in question which strengthened the trust the applicant had in Mr C. Besides, there had previously been other customers who requested for the same kind of service. This also reduced the suspicion that the applicant had.

(7)   The prosecution had no evidence to prove that the applicant knew that Mr C was deceiving people into depositing money into account one and account two, and the failure to conduct due diligence was not the same as knowing that the money was obtained by deception;

(8)   The trial judge and the prosecution agreed that the applicant had no duty to investigate the source and background of the deposits and the depositors, but found the applicant guilty of the charges on the basis that he did not conduct due diligence to find out about the background of the clients, the source of the deposits and the background of the depositors.

(9)   The trial judge rejected the evidence of the applicant that he had seen the business documents of Mr C; and

(10)   It was wrong for the trial judge to say that the applicant turned a blind eye to the frequent deposits made to the accounts which were then withdrawn shortly. The applicant explained in his evidence that he understood that this matched the business mode of Mr C, and the holders of the accounts receiving the money looked like professional people and so he had no suspicion.

(11)   On the basis of the above grounds, the convictions against the applicant in both the first and the second charges were obviously unsafe and unsatisfactory.

52.The submissions of Mr Wong, SC mainly centred around ground one. He pointed out that according to the judgment the Court of Final Appeal made in HKSAR and Pang Hung Fai, the reasons that a court had to consider were not only the facts but also some of the relevant circumstances[54]. It should consider the applicant’s beliefs, understanding and prejudices and not to omit these concepts based on those of a reasonable man from the considerations as viewed through the eyes of the applicant[55], and the correct test for “having reasonable grounds to believe” is “would anyone looking objectively at the reasons known to the defendant believe or should know that the property being dealt with represented the proceeds of an indictable offence”.[56]

53.Mr Wong, SC submitted that the trial judge did not follow the above principles, and it could be seen from footnotes 16-18 of the judgment of this case that he erred as below in his decision:

(1)   The guilty verdict was based on the applicant turning a blind eye to the source of the deposits. Relied wrongly on the Court of Appeal cases of Wan Yet Kwai[57] and Tam Lap Shek[58], the wrong test was used: the trial judge said as long as the applicant had reasonable ground to believe that he himself might be dealing with black money, even if there might exist other possibilities, he was still guilty. The “test of sufficiency” was also wrongly relied on;

(2)   He never considered the matter through the eyes of the applicant with his beliefs, understanding and prejudices. Instead, he removed them with the concepts of “someone with common sense, a right-thinking reasonable person”;

(3)   Even if it was known that the money in question was improper, it did not mean that it must relate to an indictable offence and represented the proceeds of that offence. According to paragraph 112 of Pang Hung Fai, the court must be satisfied that the applicant knew/and had reasonable ground to believe that the money represented the proceeds of an indictable offence. There is no such evidence in the present case.

54.Finally, Mr Wong, SC submitted that if this Court rejected the section 83P application, he still hoped that we would express our views on the grounds of appeal the applicant advanced.

D3.   Submissions of the Respondent

55.Mr Tam, SC took the view that section 83P was a discretion conferred on the head of the Executive, under the separation of powers, in the absence of exceptional circumstances, it should be left to the Chief Executive himself to decide.

56.Mr Tam, SC pointed out that according to HKSAR v Hung Chan Wa & Another[59], time might not be extended for the re-opening of an appeal even on the ground that a subsequent judgment had held the previous understanding of the law to be incorrect. There must be finality in litigation.

57.Mr Tam, SC replied as follows to the grounds of appeal the applicant intended to advance:

(1)   In respect of the first ground, even after Pang Hung Fai, the Court had dismissed a number of applications for appeal that relied on the same type and the same grounds of appeal. Even if a subsequent judgment had held the previous understanding of the law to be incorrect, it does not mean that the appeal must be allowed. It must depend on the facts of the case, the evidence, the credibility of the witnesses and the findings of facts etc. Paragraph 85 of HKSAR and Pang Hung Faialso pointed out that the judge and the jury in many cases might not accept at all the evidence the defendant gave regarding his beliefs, understanding or prejudices on people or things. In the present case, the trial judge had the benefit of observing and listening to the witnesses. After considering the overall circumstances, he had sufficient reason not to accept the explanation the applicant gave in his evidence in this regard:

(1)   The applicant had had about 18 years of experience in accounting;

(2)   He knew nothing at all about the background and business of Mr C and Hegarty, the men behind the two companies involved in the case. He did not know them.

(3)   In these circumstances, he still agreed to be the sole account holder and signatory;

(4)   Knowing full well that there was the risk of money laundering, he withdrew and transferred away a total of about HK$28 million within a short time when he did not have a good understanding of the nature and use of a number of large-amount deposits made overseas and knowing that the two companies involved in the case had no actual business in Hong Kong; and

(5)   No document and receipt were kept in the file. The only excuse he gave was he trusted Mr C.

In the absence of credible excuse, the guilty verdict was a matter of course. Therefore, this ground lacked merit.

(2)   As regards grounds 2 to 4, they concerned points of law that the Court of Final Appeal was going to deal with. These points were not settled yet;

(3)   In relation to grounds 5, 6, 9 and 10, the reply was the same as that to ground 1.

(4)   In respect of ground 7, the decided cases on money laundering did not require the prosecution to prove that the defendant knew the details behind the offence before he could be convicted.

(5)   As regards ground 8, although the applicant did not have any duty under the law to make investigation, it was untenable that the applicant who was a professional accountant should actively participate in flow of funds activities with money whose source was unknown without making investigation when there were clear signs that money laundering activities were going on.

58.Mr Tam, SC concluded by saying that the Court of Appeal should not express any view on the discretion contained in section 83P of the Ordinance.

D4.   The views of this Court

59.Section 83P does not give the Court of Appeal power to invite the Chief Executive or “advise or assist” him to refer a case to the Court of Appeal. The cases Mr Wong referred us to did mention that the Court of Appeal might, pursuant to section 83P, invite the Chief Executive to refer the case to the Court of Appeal where the Court of Appeal could not treat the abandonment as a nullity when the appellant had abandoned the appeal and therefore suffered unfairness as a result of not being able to restore the appeal[60]. But those cases only mentioned the big principle of preventing injustice but did not discuss in detail how the Court of Appeal should go about it.

60.In our view, even if the Court of Appeal had the power, it should not invite the Chief Executive to refer the case to the Court of Appeal casually on application made pursuant to section 83P.

61.First, as mentioned above, pursuant to section 83P(2), a convicted person may at any time, without having to apply to the Court of Appeal first, make the relevant petition himself to the Chief Executive to request the Court of Appeal to invite or to “advise or assist” the Chief Executive to refer the case to the Court of Appeal. As a matter of fact, if an applicant feels that not allowing him to appeal is not fair to him, he should immediately act on his own pursuant to section 83P to petition the Chief Executive without having to spend time again to wait for the hearing and decision of the Court of Appeal.

62.Secondly, it appears that there is not much point in reality to ask the Court of Appeal to do this. It is because even if the Court of Appeal did so, it would not be binding on the Chief Executive. Mr Wong, SC submitted that if the Court of Appeal did so, its reasons and decision carried quite a lot of weight, it would be more powerful then the person applying for it by himself. But he also agreed that however much weight the Court of Appeal’s opinion had, it had no binding effect on the Chief Executive at all. And in fact, it is also not possible for the Chief Executive to only obey the invitation or “advice or assistance” of the Court of Appeal without making his own independent consideration, or he would be undermining his own comprehensive discretion under section 83P. The law does not allow this. On the contrary, even if the Court of Appeal does not invite or “advise or assist” the Chief Executive to refer the case to the Court of Appeal, it will not hurt the interest of the applicant, because he can still petition the Chief Executive pursuant to section 83P. The limited and precious judicial resources of the Court of Appeal should not be spent on these applications that are not of much practical point.

63.Thirdly, the Court should respect the comprehensive discretion that section 83P confers on the Chief Executive when considering and deciding whether or not it should refer a certain case to the Court of Appeal. In the absence of extremely exceptional circumstances, the Court of Appeal should not take the initiative to advise or assist the Chief Executive to refer a case to the Court of Appeal, because when it does so, it is very likely that people may misunderstand it to mean that the Court is trying to influence the Chief Executive on how he should exercise its comprehensive discretion under section 83P. The Court of Appeal should avoid doing so the best it can.

64.As regards what the extremely exceptional circumstances are under which the Court of Appeal may invite the Chief Executive to consider exercising his discretionary powers under section 83P would depend on the actual circumstances of each case. Overall speaking, the applicant must put forward cogent and forceful important points to convince the court that his conviction is clearly so unsafe and unsatisfactory that disallowing him to appeal is clearly unfair to him. It is not sufficient for an applicant to merely say that the prospects of success of his appeal are reasonably arguable.

65.In the present case, the applicant only said that his appeal had very good prospects of success but the respondent did not agree to that. After carefully considering the grounds of appeal and submissions from both sides, we consider that the applicant has not been able to put forward cogent and forceful important points to convince us that his convictions are clearly unsafe and unsatisfactory, or that disallowing him to appeal is clearly unfair to him. In other words, the applicant has not been able to convince this court that there are any extremely exceptional circumstances that require us to take the initiative to advise and assist the Chief Executive to refer the case to the Court of Appeal.

66.In the result, we dismiss the section 83P application.

67.Mr Wong, SC requested us to express our views on the grounds of appeal the applicant advanced should this Court reject the section 83P application. As regards this, it is our view that we do not have the jurisdiction to express our view on an appeal that is not commenced before us. And even if this Court (does have) the jurisdiction over the (case), it is also extremely inappropriate to do so. Therefore, we reject the request of Mr Wong, SC.

Mr Tam Yiu Ho, William, SC, Deputy Director of Public Prosecutions and Miss Sham Wing Yan, Jessie, Public Prosecutor of the Department of Justice, for the Respondent.

Mr Wong Man Kit, SC and Tung S.Y. Sylvia, instructed by Messrs Morley Chow Seto, for the Applicant.

Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr. Patrick W.S. Cheung, Barrister-at-law.