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CACC 176/2015
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CRIMINAL APPEAL NO. 176OF 2015
(ON APPEAL FROM HCCC NO. 561 OF 2013)
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BETWEEN
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HKSAR
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Respondent
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and
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Yik Siu Hung (翼小紅)
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1st Applicant
(2nd Defendant)
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Yip Sui Kuen, Kitty (葉瑞娟)
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2nd Applicant
(3rd Defendant)
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| Before: Hon Lunn VP in Court |
| Date of hearing: 15 September 2017 |
| Date of Judgment: 27 October 2017 |
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J U D G M E N T
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1. The 1st and the 2nd applicants, to whom I shall refer by their designation at trial as the 2nd and 3rd defendants respectively, seek leave to appeal against their convictions on 20 May 2015, after trial by Anthea Pang J and a jury, of various counts on an indictment. The 2nd defendant seeks leave to appeal in respect of two counts of conspiracy to defraud, contrary to common law (Counts 1 and 2) and of dealing with property known or believed to represent the proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organised and Serious Crimes Ordinance, Cap. 455 (Counts 3, 4 and 6). The 3rd defendant seeks leave to appeal in respect of Count 2 and a count of dealing with property known or believed to represent the proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organised and Serious Crimes Ordinance, Cap. 455 (Count 5). The 3rd defendant was acquitted of Count 1.
2. The erstwhile 1st defendant was acquitted of Counts 1 and 2 and of a count of dealing with property known or believed to represent the proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organised and Serious Crimes Ordinance, Cap. 455 (Count 7).
The trial
3. The prosecution case arose from the sale of oilfields located in Utah, in the United States of America to Pearl Oriental Innovation Ltd, a company listed on the Stock Exchange of Hong Kong (“SEHK”) and referred to as “POIL” at the trial. On 16 November 2009, a Memorandum of Understanding for the acquisition of those oilfields was signed between Thurston Energy LCC (“Thurston”) and Shiny One Ltd (“SOL”), a company incorporated in the British Virgin Islands, of which the 2nd defendant was the sole shareholder and, together with Wong Kwan, a director. On 12 December 2009, a sale, purchase and development agreement was signed by Shiny One USA LCC (“SOU”), a company incorporated on 8 December 2009 in Delaware, United States of America, of which SOL was the sole member and Wong Kwan the President, Secretary and Treasurer and Thurston for the acquisition of those oilfields by SOU from Thurston.
4. On 21 December 2009, additional shares were issued by SOL with the result that Wong Kwan and the 2nd defendant held 35 and 65 percent of the shares respectively.
5. On 4 January 2010, the possible purchase of the oilfields was discussed at a meeting of the directors of POIL. At that time, Wong Kwan and the 1st defendant were the chairman, deputy chairman and executive directors respectively of POIL. The 3rd defendant was deputy financial controller of POIL.
6. On 7 January 2010, Wong Kwan and the 2nd defendant transferred their shares in SOL to Festive Oasis Ltd (“FOL”). The shares of FOL were owned by Marvel Sunlight Ltd (“MSL”), 65 percent, and by Charcon Assets Ltd (“CAL”), 35 percent. The 2nd defendant was the sole shareholder of MSL, whereas Wong Kwan was the sole shareholder of CAL.
7. On 9 January 2010, the board of directors of POIL approved the acquisition of all of the shares of FOL and on that date entered into a sale and purchase agreement for the acquisition of those shares with MSL and CAL. The 2nd defendant signed the agreement on behalf of MSL and Wong Kwan signed the agreement on behalf of CAL.
8. On 25 January 2010, POIL published an announcement concerning that acquisition in which it made three representations, which were stipulated in the Particulars of Offence of Counts 1 and 2 as being false representations and made dishonestly.
9. On 24 May 2010, POIL published a circular to its shareholders which contained the three allegedly false representations, articulated in almost identical terms.
10. On 8 June 2010, in a Special General Meeting the shareholders of POIL approved the acquisition of all of the shares of FOL and the issue of new shares as part of the consideration of that acquisition.
11. Earlier, on 9 March and 10 May 2010, POIL had paid $156 million and $234 million to the 2nd defendant as consideration for the acquisition of part of the shares of FOL. On 17 May 2011, as the remaining part of the consideration for the acquisition of the shares of FOL, POIL allotted 282,600,000 shares to MSL.
12. The Particulars of Offence of Count 1 averred that, on and between 1 December 2009 and 17 May 2011 the three defendants at trial, conspired together and with Wong Kwan to defraud the Stock Exchange of Hong Kong (“SEHK”) by dishonestly:
“ (a) falsely representing that before the investment opportunity was first introduced to Pearl Oriental Innovation Limited (“POIL”) by Marvel Sunlight Limited (‘MSL’) and Charcon Assets Limited (“CAL”) for the acquisition of certain natural gas and oil fields in Utah, United States of America, MSL had already reached an agreement for its investment with Thurston Energy, LLC, the owner of the said natural gas and oil fields;
(b) falsely representing that MSL, being one of the vendors in POIL’s acquisition of the entire issued share capital of Festive Oasis Limited (“FOL”’) (“the Acquisition”), and its beneficial owners were third parties independent of POIL and its connected persons;
(c) falsely representing that the original acquisition cost incurred by CAL, a company solely owned by the said Wong Yuk-kwan alias Wong Kwan, on 35 per cent interest of FOL was $70 million US currency;
(d) causing SEHK to allow the publication by POIL of an announcement and a circular in relation to the Acquisition.”
13. Count 2 averred that the defendants, together with Wong Kwan, conspired together on and between the same dates to defraud POIL, its existing shareholders and its potential investors by dishonestly making the false representation set out at (a) to (c) of the Particulars of Offence of Count 1:
“ (d) causing POIL to approve the agreement for the Acquisition and the allotment and issue of new shares for its payment.”
14. It was the prosecution case that the three representations stipulated in the Particulars of Offence at paragraphs (a) to (c) of Counts 1 and 2 were false. Further, that the 2nd and 3rd defendants knew them to be false but, nevertheless, intended to use the false representations to defraud the SEHK by causing it to act contrary to its public duty in the manner alleged in particular (d) of Count 1 and intended to use the same false representations to defraud POIL, its existing shareholders and potential investors in the manner alleged in particular (d) of Count 2.
15. Counts 3 and 4 averred that the 2nd defendant had dealt with property, namely receiving into her bank account deposits of $156 million and $234 million on 9 March and 10 May 2010 respectively, from POIL as part payment of the acquisition costs of the shares of FOL, knowing them to be the proceeds of an indictable offence. Count 6 averred that the 2nd defendant had dealt with property, namely the allotment to MSL of 282,600,000 POIL shares has part payment of the acquisition cost of the shares of FOL, knowing them to be the proceeds of an indictable offence.
16. Count 5 averred that the 3rd defendant had dealt with property, namely $3 million transferred to her bank account from the 2nd defendant, knowing it to be the proceeds of an indictable offence. There was no dispute that the money had been received by the 3rd defendant.
The defence case
17. Neither the 2nd nor 3rd defendants availed themselves of their right to give evidence at trial. It was their case, as advanced in submissions, including submissions of no case to answer in respect of all the counts that they faced at trial, that there was “simply insufficient or no evidence that these two conspiracies ever existed”.[1] Even if the conspiracies existed, there was insufficient evidence that either was a “knowing party to these conspiracies”. There being no evidence of the conspiracies, there was no evidence that the monies or shares dealt with by the respective defendants represented the proceeds of an indictable offence.[2]
Ruling: no case to answer
18. In rejecting the submissions made on behalf of the 2nd and 3rd defendants that there was no case to answer on any of the counts which they faced respectively, the judge said:[3]
“ I find that there is a case to answer in respect of each of the counts faced by each respective accused. In other words, I consider that on one possible view of the evidence, a reasonable jury, properly directed, could properly come to the conclusion that each accused is guilty of each count he or she faces.”
Grounds of appeal against conviction
The 2nd defendant
19. In the amended perfected grounds of appeal against conviction advanced by Mr Duncan SC, on behalf of the 2nd defendant, it was submitted that the judge erred in ruling that the 2nd defendant had a case to answer on the five counts on which she was subsequently convicted. He contended that there was no evidence to establish essential elements of the offences averred by Counts 1 and 2, namely that the 2nd defendant:
(a) knew of the existence of any of the three representations, stipulated in particulars (a) to (c) of the Particulars of Offence;
(b) knew that any of the three representations was to be included in the announcement and the circular published by POIL; and
(c) knew that the purpose of including any of the three representations, of which she was proved to be aware, was in the case of Count 1, to cause SEHK to approve the publication of the announcement and the circular; and in the case of Count 2, to cause POIL’s shareholder to approve the acquisition of the oilfields and the allotment of new shares.
20. In the alternative, it was submitted that, on the evidence adduced at trial by the prosecution, no reasonable jury properly directed could reject all realistic explanations that would be consistent with innocence. So, it was contended, the judge ought to have ruled that there was no case to answer.
21. Finally, it was submitted that, if the judge ought to have ruled no case to answer in respect of Counts 1 and 2, it followed that there was no case to answer in respect of the remaining counts faced by the 2nd defendant of dealing with property knowing it to be the proceeds of an indictable offence.
22. Of the evidence adduced in the prosecution case, in his written submissions Mr Duncan invited the Court to note that there was no evidence in respect of the 2nd defendant’s background or financial means; that the 2nd defendant was ever employed by POIL; that she knew of the existence of the three representations; that she was familiar with the Listing rules and knew that the SEHK would be involved in approving publication of the announcement and circular; that she was involved in the preparation and drafting of those documents or in any way contributed to their making.
23. In his oral submissions, Mr Duncan confirmed that no issue was taken with the falsehood of the three representations made in the announcement and in the circular and stipulated in the Particulars of Offence of each of Count 1 and Count 2. He submitted that it was an essential ingredient of the conspiracies averred by Counts 1 and 2 that the 2nd defendant was a party to an agreement to make these stipulated misrepresentations dishonestly to the named parties, the SEHK and POIL, its shareholders and potential investors. He contended that there was no evidence that the 2nd defendant knew, let alone was a party to an agreement, that false representations were to be made to those named parties. There was no evidence that the 2nd defendant knew that POIL was a listed company, let alone that the Listing rules applied to the transaction in which it acquired the oilfields. Reliance was placed on the first limb of the judgment in Galbraith.
The 3rd defendant
24. On behalf of the 3rd defendant, Mr Kwok SC submitted that the judge had erred in ruling that there was a case to answer on Counts 1, 2 and 5. He submitted that there was insufficient evidence adduced in the prosecution case in respect of the very same matters identified in Mr Duncan’s grounds of appeal.
25. By ground 2, he submitted that, having regard to the fact that the 3rd defendant had been acquitted of Count 1, the conviction of the 3rd defendant on Count 2 was “a perverse and inconsistent verdict”. It was the prosecution case in respect of both counts that the conspirators had made use of the same means to defraud the respective victims.
26. By ground 3, it was contended that the judge’s summing up was “not fairly balanced”. First, it was submitted that the judge had “highlighted to the jury matters that were adverse” to the 2nd defendant’s case, in particular that she was a witness to signing certain documents, for example the sale and purchase agreement dated 9 January 2010 between POIL on the one hand and MSL and CAL on the other hand [4] and in the supplemental agreements.[5] Also, the judge pointed out that the 3rd defendant had signed as a witness on the instrument of transfer concerning the transfer of 282,600,000 POIL shares from MSL to CAL.[6]
27. Complaint was made in the same vein that the judge reminded the jury of documents that had been seized from a room where the 3rd defendant worked, namely: a schedule entitled ‘Yik Siu Hung and Wong Kwan, Account dealings as at 17 May 2011’, a document entitled ‘Shareholders Cooperation Agreement’, ‘Supplemental Agreement’ and ‘Completion of Cooperation Agreement’.[7] It was pointed out that the judge had returned to the same issue reminding the jury of the 3rd defendant’sexplanations in her video recorded interview in respect of those documents.[8]
28. It was submitted that the judge had not balanced her account of the evidence by referring to evidence that weakened the prosecution case. First, in respect of the evidence of Ms Eliza Lee. She had been asked by Wong Kwan to take up a position as a director or company secretary of his companies. Secondly, that she had been asked by him to sign documents as a witness. Thirdly, at his request she had set up or purchased offshore companies, paid relevant expenses and received reimbursement. Fourthly, at his request, that she had become an authorised signatory of the bank accounts of some of Wong Kwan’s companies. Fifthly, that she had received a bonus from one of Wong Kwan’s companies of $700,000 for her services. Finally, that there were other members of staff, such as Ms Tracie Chan who perform similar duties.
29. Next, complaint was made that no reference was made by the judge to the evidence of Zhou Li Yang that he would ask one or other of Ms Christy So, Ms Tracie Chan or the 3rd defendant to witness the signing of documents.
30. Then, complaint was made that the judge had not reminded the jury of the evidence of Ms Christy So that it was the practice within the company that the originals of agreement signed by POIL were kept in the room where the 3rd defendant worked. Further, that she too had been asked to sign documents, sometimes as a representative of one of the parties. Also, that the 3rd defendant had not made any comment on the drafts of the announcement or the circular.
31. Finally, it was submitted that the judge erred in directing the jury not to allow criticisms made on behalf of the 3rd defendant of the manner in which the prosecution had presented its case to distract the jury from a consideration of the evidence.
The respondent’s submissions
32. For the respondent, Mr Jonathan Kwan opposed the grounds of leave to appeal of both defendants indicating that, if leave was granted, he would oppose the appeal against conviction.
33. Mr Kwan invited the Court to note that there was no challenge to the fact that the three representations central to the allegations of conspiracy to defraud in Counts 1 and 2 were false.
No case to answer
34. Mr Kwan submitted that the appropriate test to be applied in determining whether or not there was a case to answer was that articulated in the judgment of this Court delivered by Kempster JA in the Attorney General v Li Fook Shiu, Ronald.[9]
The 2nddefendant
35. Of the evidence adduced in the prosecution case relevant to the 2nd defendant, Mr Kwan submitted that it established that at times relevant to Counts 1 and 2, she was the owner, either wholly or by majority, of the companies MSL, FOL, SOL and SOU. Further, there was undisputed evidence that following her receipt from POIL in cash and shares of the bulk of the proceeds of the sale of the oilfields she transferred those monies to Wong Kwan or CAL, a company wholly owned by Wong Kwan, shortly after their receipt.
The 3rd defendant
36. Of the evidence adduced in the prosecution case relevant to the 3rd defendant, Mr Kwan invited the Court to note that she was the person responsible for purchasing MSL on 6 January 2010. On 9 January 2010, she acted as a witness to the signing of the sale and purchase agreement between POIL on the one hand and MSL and CAL on the other hand. On 14 January 2010, she had been sent an email attached to which was a draft of the announcement, as the draft was circulated amongst various parties. Two of the three false representations were made in that draft. In early November 2009, the 3rd defendant had been involved in the arrangements that led to Wong Kwan’s visit to the oilfields. She witnessed the signing of the instrument of transfer dated 17 May 2011 of 282,600,000 POIL shares from MSL to CAL. Finally, on 26 January 2011 she received a payment of $3 million from the 2nd defendant.
Perverse and inconsistent verdicts
37. Of the submission made on behalf of the 3rd defendant that her conviction on Count 2 was inconsistent with her acquittal on Count 1, Mr Kwan invited the Court to note that, whilst the stipulated false representations were the same, the stipulated “victims” were quite different. In Count 1, it was averred that the object of the false representation was to cause the SEHK to allow the publication of the announcement and the circular, thereby defrauding SEHK. Whereas in Count 2 the object of the false representations was to cause POIL to approve the agreement for the acquisition and the allotment and issue of new shares for its payment, thereby defrauding POIL, its existing shareholders and its potential investors. The jury was entitled to be satisfied that the 3rd defendant was a party to a conspiracy to defraud POIL, its shareholders and potential investors, notwithstanding the fact that it was not satisfied that she was a party to a conspiracy to defraud the SEHK.
Unbalanced summing up
38. Mr Kwan submitted that there was no merit in the allegation made on behalf of the 3rd defendant that the summing up was unbalanced in respect of her case. The matters complained of were all matters that the judge had addressed in the summing up.
A consideration of the submissions
No case to answer
39. In ruling that there was a case to answer for all three defendants on all of the counts which they faced, and having noted that the submission made on behalf of the 1st defendant was on the basis of the 1st limb of the test enunciated in Galbraith, the judge said:[10]
“ As for Mr Wong and Mr Kwok, each of them makes the submission on both limbs of the Galbraith test saying that even if there is evidence against the 2nd and 3rd accused, the evidence is of so tenuous a nature that taking the prosecution case at its highest, a jury, properly directed, could not properly convict upon such evidence in respect of any of the counts each of the 2nd and 3rd accused faces.
Having heard counsel’s submissions and having reviewed the evidence as well as considering the authorities submitted, I find that there is a case to answer in respect of each of the counts faced by each respective accused. In other words, I consider that on one possible view of the evidence, a reasonable jury, properly directed, could properly come to the conclusion that each accused is guilty of each count he or she faces.
There is no need, and indeed it is inappropriate, for me to give any reasons for my ruling at this stage.”
The 2nd defendant
40. As noted earlier, the particular focus of the submission made on behalf of the 2nd defendant in this Court was that there was no evidence that the 2nd defendant knew that it was intended the false representations stipulated in the Particulars of Offence be made to the stipulated parties, namely the SEHK in Count 1 and POIL and its shareholders in Count 2.
41. For his part, in his oral submissions Mr Kwan, invited the Court to note the undisputed evidence of the 2nd defendant’s involvement, together with Wong Kwan, as a director or shareholder or both, in the various companies concerned in the steps that led to the acquisition of the oilfields by POIL.
42. Also, he invited the Court to have regard to the undisputed evidence of the 2nd defendant’s role in making payments on behalf of those companies, together with her role in receiving monies that had their provenance in the payments by POIL for the acquisition, which monies were then distributed to the benefit of Wong Kwan. He submitted that it was to be inferred from the undisputed evidence that the 2nd defendant knew from the sale and purchase agreement of 9 January 2010, to which she was a signatory, that the acquisition cost of US$225 million was a Very Substantial Acquisition which, for a publicly listed company, would require not only the involvement of the SEHK but also the approval of the shareholders in a Special General Meeting. In those circumstances, it was to be inferred that she knew that representations as to the nature of the transaction would be required to be made to those parties.
43. There was no dispute as to the involvement of the 2nd defendant in the companies that were used in the steps that led to the acquisition by POIL. On the acquisition of the BVI company SOL from Offshore Incorporations Hong Kong Ltd (“OIL”) on 16 October 2009, the 2nd defendant became the shareholder of the sole share issued and she and Wong Kwan became directors. On 16 November 2009, Wong Kwan, as a director of SOL entered into a Memorandum of Understanding with Thurston for the acquisition of the oilfields, pursuant to which an ‘Exclusivity Payment’ of US$500,000 was required to be made to Thurston within 15 days. On 27 November 2009, pursuant to the agreement, the 2nd defendant transferred US$500,000 from her Hang Seng Bank to a bank account of Thurston.[11] Earlier, on 24 November 2009, the 2nd defendant had transferred a sum of US$100,000 from her Bank of China bank account by telegraphic transfer to a bank account of Fulbright and Jaworski, a law firm who acted for SOL and/or SOU in the acquisition of the oilfields.[12] On 2 December 2009, the 2nd defendant transferred US$4,500 from her Hang Seng Bank bank account to a bank account of Haas Petroleum Engineering Services Inc (“Haas”), being part of a retainer payable by SOL to Haas under a Consultancy Agreement in respect of the oilfields.[13]
44. On 25 June 2008, the 2nd defendant had deposited into her Hang Seng Bank bank account a cheque drawn on the account of Wong Kwan for $2 million, which monies were then placed on time deposit. Having been mixed with other monies the $2 million formed part of a time deposit of $2.8 million in her bank account, which she uplifted prematurely on 27 November 2009, and which formed part of the payment of US$500,000 made to Thurston on that date.[14]
45. On 6 January 2010 Marvel Sunlight Ltd (“MSL”) and Festive Oasis Ltd (“FOL”), companies incorporated in the British Virgin Islands, were sold by OIL.
46. On 7 January 2010, the 2nd defendant was appointed the first director of MSL and, following the issue of one share, became its sole shareholder. On the same day the 2nd defendant and Wong Kwan were appointed the first directors of FOL and 650 and 350 FOL shares issued to MSL and Charcon Assets Ltd (“CAL”) respectively.[15] CAL was another company incorporated in the British Virgin Islands of which Wong Kwan was its sole director and shareholder and had been such since 14 October 1993.[16]
47. On 7 January 2010, the 2nd defendant and Wong Kwan transferred 65 and 35 SOL shares respectively to FOL.[17]
48. On 9 January 2010, the board of directors of POIL approved the acquisition of the oilfields for a total consideration of US$225 million and approved the allotment an issue of new shares for the payment of the acquisition costs. A sale and purchase agreement was signed on the same day in which POIL acquired all the shares of FOL held by MSL and CAL respectively. The 2nd defendant signed the agreement on behalf of MSL and Wong Kwan did so on behalf of CAL. Their signatures were witnessed by the 3rd defendant.[18] An original copy of the agreement was seized by an ICAC officer from the 2nd defendant’s residence.[19]
49. POIL was a company incorporated in Bermuda, which had been listed on the Main Board of the SEHK since 30 April 1993. It was an admitted fact that “at all material times” Wong Kwan was the Chairman and Chief Executive of POIL.[20]
The 2nd defendant’s receipt and disbursement of monies paid and shares allotted by POIL
50. It was an admitted fact that on 9 March and 10 May 2010, the 2nd defendant had received into her bank accounts payments made by POIL of $156 million and $234 million respectively.[21] Payments on 30 April 2010 to Wong Kwan by cheques drawn on bank accounts of the 2nd defendant of $40 million and $30 million respectively had their provenance in the payment of $156 million. Payments on 12 May and 2 June 2010 to Wong Kwan by cheques drawn on bank accounts of the 2nd defendant each of $50 million at their provenance in the payment of $234 million.
51. Similarly, it was an admitted fact that the 282,600,000 shares of POIL allotted to MSL on 17 May 2011 were transferred to CAL that day. The 2nd defendant signed the instrument of transfer for MSL, witnessed by the 3rd defendant. By a cheque drawn on his bank account, Wong Kwan paid the stamp duty of $678,245 for both buyer and seller.
52. As was noted in the written submissions advanced on behalf of the 2nd defendant it was the prosecution case in response to the submission of no case as then advanced that it was to be inferred from all the evidence that the fact that Wong Kwan was the sole beneficial owner of the oilfields had been deliberately and dishonestly concealed by the facade of share ownership. Wong Kwan, not the 2nd defendant, was the true beneficial owner of 65 percent of the shares of FOL held through MSL in the name of the 2nd defendant. It was to be inferred that, with knowledge of the true beneficial ownership of the oilfields, the 2nd defendant knew that it would be necessary to make misrepresentations of that issue.
53. It was not the prosecution case that the 2nd defendant was involved herself in making false representations. Rather, it was that she was party to an agreement pursuant to which it was intended that such false representations would be made.
54. As noted earlier, specific issue was taken in this Court in respect of the 2nd defendant’s knowledge that false representations would be made to the SEHK, POIL and its shareholders. Evidence relevant to that issue was the fact that Wong Kwan was the chairman of POIL and that the latter was a publicly listed company and had been since 1993. The fact that the 2nd defendant had received a deposit of $2 million in June 2008 spoke to a relationship between the 2nd defendant and Wong Kwan over a period of time. There was considerable evidence of the 2nd defendant’s cooperation with Wong Kwan in company affairs relevant to the alleged conspiracies in the period October 2009 to January 2010. In that context, there is considerable force in Mr Kwan’s submission that there was evidence available to the jury from which they could infer that the 2nd defendant knew that POIL was a publicly listed company and, knowing that the acquisition cost of the oilfields to POIL was US$225 million, that the acquisition would be subject to regulatory control and approval of the shareholders of POIL for the acquisition. Further, that in those circumstances the jury could infer that the 2nd defendant knew that it would be necessary to make false representations to the SEHK and POIL and its shareholders and that she was a party to an agreement to do so.
55. In the judgment of this Court in the Attorney General v Li Fook Shiu, Ronald[22] the proper approach of a judge seized with, inter‑alia, an application of no case to answer was addressed by Kempster JA:[23]
“ In relation equally to primary facts and to inferences to be drawn from such facts his concern is not with present proof to his satisfaction but with potential future proof to that of a jury. Both primary facts and the inferences therefrom are “matters generally speaking within the province of the jury” in the language of Galbraith.”
56. Kempster JA went on to say:[24]
“ If elaboration of the approach explained in Galbraith is called for we are of the opinion that a judge faced with a submission of “no case” or an application for discharge in circumstances where the Crown’s case depends, as it usually does, upon an inference or inferences from primary facts, may ask himself:
(1) Is there some evidence that the crime has been committed? If not, the judge will rule no case or discharge the count in question. If there is;
(2) Is the evidence of primary facts of a quality permitting a jury to accept it? If not, the judge will stop the case or discharge the count. But, if such evidence is of appropriate quality;
(3) Could, may or might a jury properly directed be satisfied beyond reasonable doubt of such inferences as have to be drawn if all the elements of the prosecution case are to be established? If he concludes that a jury could, may or might so be satisfied, he will rule against the submission or application.”
57. I am satisfied that it is not reasonably arguable that the judge approached her ruling in respect of the application that the 2nd defendant had no case to answer on the wrong basis. She found in terms that “…on one possible view of the evidence, a reasonable jury, properly directed, could properly come to the conclusion that each accused is guilty of each count he or she faces.” Further, for the reasons set out earlier I am satisfied that it is not reasonably arguable that, having identified the law correctly, the judge erred in her ruling in respect of the 2nd defendant in respect of Counts 1 and 2.
Conclusion
58. Accordingly, I refuse the 2nd defendant leave to appeal against conviction.
The 3rd defendant
No case to answer
59. In addition to the undisputed evidence adduced in the prosecution case that the 3rd defendant was involved in some of the steps that were taken that led to the making of the sale and purchase agreement, dated 9 January 2010, between POIL, on the one hand, and MSL and CAL on the other hand, there was also evidence that she was the recipient of a draft of the announcement and several drafts of the circular subsequently issued by POIL. Attached to an email dated 14 January 2010 was a draft version of the announcement, which contained two of the three allegedly false representations stipulated in the Particulars of Offence of Counts 1 and 2. The circular, dated 24 May 2010, contained all three allegedly false representations. Earlier, drafts of versions of the circular were attached to emails sent to various parties, including the 3rd defendant. The draft circular attached to the email dated 3 February 2010 contained all three allegedly false representations.[25]
60. There was no dispute that the 3rd defendant had not contributed to the text or any amendments to either the announcement or the circular. Ms Christy So said that it was on the instructions of Mr Nelson Cheung that drafts of the circular were sent to the stipulated parties. She did not know why the list was compiled as it was.[26] Finally, there was the undisputed evidence that, on 26 January 2011, the 3rd defendant had received a payment from the 2nd defendant of $3 million.
61. Context was given to the undisputed evidence by the account that the 3rd defendant had given in her out-of-court video recorded interviews with ICAC officers.
62. Inhersummingup,thejudgesummarisedthataccountatconsiderable length. Of the 3rd defendant’s relationship with Wong Kwan, the judge said:[27]
“ …she said she had known Wong Kwan since 1988 when she started working as a receptionist in his company. Thereafter, she was promoted and dealt with accounting matters. She also said that as the employer/employee relationship had been for so many years, she and Wong Kwan were relatively close and they got along more like friends.”
63. Of the undisputed evidence of the 3rd defendant’s role in both the acquisition of and initial payment for some of the companies involved in the acquisition of the oilfields by POIL, the judge said:[28]
“ About her purchasing of SOL, MSL and FOL from OIL, she said, very often, when Wong Kwan did the projects, he was - meaning Wong Kwan - was very anxious, so Wong Kwan and his parties would ask her to get a company for them. She would very often help the working partner to set up such a company but she would get back the money she paid for the acquisition.”
64. Of the 3rd defendant’s description of the 2nd defendant, the judge said:[29]
“ …she said she came to know Yik through Wong Kwan around 2004 to 2006 and they were probably partners, meaning Yik Siu‑hung and Wong Kwan were probably partners, working together and she did not ask if they were boyfriend and girlfriend. As to Yik Siu-hung’s role in the Utah project, she said Yik co-operated with Wong Kwan having a company, but she could not quite remember their shareholding. When asked whether she meant Yik Siu-hung and Wong Kwan clubbed together to acquire the oilfields, she said she could recall it was written in this way in the announcement.”
65. Of the payment of $3 million on 26 January 2011 to the 3rd defendant from the 2nd defendant, the judge summarised the former’s explanation:[30]
“ …she said, for the Utah project, she had helped them to do the placement of shares and to set up the company for her, meaning Yik Siu-hung, therefore, she considered that the money was given to her as the 2nd accused had often said, “Kitty, you are working in a very hard manner, I shall not give you a bad treat”. She also stated that she worked hard on the project and she did a lot of documentation and the placement of the shares as well as helping with the technical reports. Wong Kwan did not ask other people to work and always depended on her or the secretary to work, but at that time, she remembered that Wong Kwan’s secretary seemed to be on leave.”
66. Of the fact that the payment was made by a third party to an employee of POIL, the judge said:[31]
“ When asked why an independent third party like Yik Siu‑hung, having no connection with the listed company, that is POIL, or having no connection with an employee of the listed company, would make the payment of HK$3 million to her, she said that Wong Kwan’s friends often gave her gifts. She also referred to the sum as being a very small sum, given the huge amount being involved in the transaction, that is, in the project.”
67. Finally, of the 3rd defendant’s contention that she had withdrawn $2 million of those monies in cash and repaid it to the 2nd defendant, the judge said:[32]
“ At the end, she said that as she did not want to receive so much money from the 2nd accused, so she got HK$2 million in cash from the bank and returned it to Yik Siu-hung, probably not very long afterwards. The money was returned to Yik Siu-hung either when Yik came up to their office or somewhere near their office. There were just the two of them and nobody witnessed the return. She stated that she had told Wong Kwan about the $3 million and Wong Kwan also asked her not to take so much from Yik Siu-hung.”
68. In fact, in describing having withdrawn from her bank account and handing over no less an amount than $2 million in cash, the 3rd defendant said that she could not even remember whether she had withdrawn the money in one tranche or in two tranches. The following exchange had ensued: [33]
“ Q. Well at that time, over the course of your giving (it) to her, did anyone see (it/you)?
A. No, how could anyone see (it/us)?
Q. …. That is, (it happened) only between you and her.
A. That’s right.
Q. Do (you) remember where it was?
A. Probably at, maybe, maybe (when) she came up to (our) office, or somewhere near the office. That’s it.
Q. Fine.
A. I do not remember.”
69. Having regard to all the evidence adduced by the end of the prosecution case, I am not satisfied that reasonably arguable grounds of appeal have been advanced to support the submission that the judge erred in refusing to rule that the 3rd defendant had no case to answer on Counts 1 and 2. There was evidence that, having been involved in taking steps that the jury could be satisfied concealed Wong Kwan’s beneficial ownership of the oilfields, the 3rd defendant was a recipient of a draft of both the announcement and circular in which representations relevant to that issue were made. Moreover, the 3rd defendant had received a payment of $3 million from the 2nd defendant, who was described in the representations as being the owner, in effect, of 65 percent of the oilfields and independent of POIL. From all the evidence, the jury “could, may or might” be satisfied not only that they were false representations, and known to be such by the 3rd defendant, but also that the 3rd defendant was a party to an agreement in which it was intended that the false representation be made to the SEHK, POIL and its shareholders.
Conclusion
70. Accordingly, I refuse the 3rd defendant leave to appeal against her conviction on ground 1.
Ground 2: perverse and inconsistent verdicts
71. By ground 2 it was contended on behalf of the 3rd defendant that her conviction on Count 2 was a perverse and inconsistent verdict having regard to her acquittal on Count 1. There was no dispute that the three allegedly false representations stipulated in the Particulars of Offence of each of the two counts were the same. On the other hand, it was acknowledged that the alleged victims of the two conspiracies were different: in Count 1, it was the SEHK; in Count 2, it was POIL, its shareholders and potential investors. Similarly, the object or the state of affairs which it was alleged the conspirators intended to bring about was different: in Count 1, it was to cause the SEHK to allow the publication of an announcement and then a circular by POIL; in Count 2, it was to cause POIL to approve the agreement for the acquisition and the allotment and issue of new shares for its payment.
72. In those circumstances, as was to be expected, the judge gave the jury the standard direction as to their approach to considering verdicts in respect of each defendant on each count:[34]
“ You must consider each count separately as well as consider the case for and against each accused separately in respect of each count. The evidence concerning each count and each accused is not the same.”
73. In respect of Counts 1 and 2, the judge went on to identify both the similarities and differences the alleged false representations stipulated in the respective Particulars of Offence:[35]
“ …although the representations particularised in (a), that is paragraph (a) to (c) on the indictment, counts 1 and 2, are the same, those were two separate conspiracies and aimed at defrauding different entities. For count 1, it was the SEHK. For count 2, it was POIL, its existing shareholders or its potential investors.” [Italics added.]
74. The judge went on to direct the jury:[36]
“ Hence, although the prosecution case is that the two counts of conspiracy go hand in hand and that the conspiracy counts are interlinked with the money-laundering counts, you still have to consider each count and each accused separately.
Your verdicts in respect of each accused and each count need not be the same. In other words, if you were to conclude that an accused is guilty or not guilty of one count, it would not necessarily follow that he or she is similarly guilty or not guilty of the other counts.”
75. Then, the judge went on to emphasise the direction to the jury:[37]
“ The important points which you have to bear in mind is that these are separate accused, and the conspiracies put before you were separate conspiracies and their purposes were not the same. You must therefore reach your verdicts in respect of each accused on each count, having focused on each separately and having formed a separate decision about it.” [Italics added.]
76. Subsequently, in the context of directions in respect of the jury’s consideration of Counts 1 and 2 the judge said:[38]
“ …you must be sure, separately, in respect of each count and each accused that: (1) there was in fact an agreement, or conspiracy, between the accused whose case you are considering and one or more of the other accused or Wong Kwan referred to in the count; and (2) at the time of the agreement, the accused intended that the agreement be carried out; and (3) the agreement was to defraud, that is, they have agreed to use dishonest means to bring about a state of affairs which they intended to or realised might cause the party or any one of the parties named in the count into acting or failing to act so that the named party or parties (in Count 2 - they are POIL, or its existing shareholders or its potential investors) - so that the named party or parties would suffer economic loss or so that their economic interest would be put at risk, or so that the named party - this is in relation to Count 1, that is the SEHK - would perform an act contrary to its public duty.
Pausing here; in this case, the prosecution alleged two separate and distinct conspiracies in Counts 1 and 2, they are separate and distinct conspiracies.” [Italics added.]
77. Not surprisingly, Mr Kwok did not raise any objections to those directions during or at the end of the summing up.
78. There is no dispute that the burden is on the defendant to show that verdicts, in respect of counts he faced on an indictment, “are not merely inconsistent but are so inconsistent as to demand interference by an appellate court. The judgment to that effect of the Court of Appeal of England and Wales in R v Durante [39] was cited with approval by this Court in HKSAR v Chan Shek Wai [40] and reaffirmed recently by the Court of Appeal of England and Wales in R v Fanning.[41]
79. With respect, in his written submissions Mr Kwok advanced no reasonably arguable grounds to show that the verdicts were inconsistent let alone that they required interference by an appellate court. His oral submissions hardly touched on the issue. As the judge reminded the jury, the victims of the two conspiracies were quite different, as was the state of affairs that it was alleged that the conspirators sought to bring about. Clearly, the two conspiracies were distinct and separate. The judge directed the jury correctly, it was open to them to convict the 3rd defendant on one of those counts but not on the other. In the result, I am not satisfied that this ground of appeal is reasonably arguable.
Unbalanced summing up
80. The complaint made on behalf of the 3rd defendant that the judge’s summing up was unbalanced was simply not made out. The judge did remind the jury of the evidence of Ms Eliza Lee of the use made of her by Wong Kwan in purchasing and operating companies:[42]
“ Miss Lee herself had been made the director of some of Wong Kwan’s private companies, had signed as a witness on documents and had purchased BVI companies on the instructions of Wong Kwan, sometimes making the payment first and getting the reimbursement later.”
81. The judge went on to add:[43]
“ Miss Lee said she also had to attend to Wong Kwan’s private companies and his personal affairs. She agreed that Tracie Chan and the 3rd accused might also be the ones who asked to run these errands for Wong Kwan.”
82. Similarly, the judge reminded the jury of the evidence of Mr Zhou Li Yang to like effect:[44]
“ Further, Mr Zhao agreed that although the 3rd accused signed as a witness on the S & P and the other supplemental agreements, it could have been somebody like Christy So, Tracie Chan, or indeed anyone who happened to be in the office.”
83. Also, the judge reminded the jury of the evidence of Ms Christy So of the circumstances in which she too had been asked to sign documents:[45]
“ Miss So confirmed that, from time to time, she had been asked to sign as a witness on documents and there was nothing unusual about that. However, she said those were documents which involved POIL or its subsidiary companies. She also stated that as an employee of POIL, she would not sign as a witness on documents which were not related to POIL or its subsidiaries.”
84. Of the fact that various documents, such as the ‘Shareholders Cooperation Agreement’ and the ‘Supplemental Agreement’ had been found in the room in which the 3rd defendant worked, the judge reminded the jury of the evidence relevant to that issue:[46]
“ In this connection, you would also recall PW 11, Miss Christy So Sui Man telling us that for bank documents relating to BVI companies and for the originals of the agreement signed between POIL and other companies, then it was their practice of those documents, that is, bank documents and the originals of the agreement signed by POIL between other companies, it was their practice for these documents to be kept at the 3rd accused’s room.”
85. Of the fact that the draft announcement had been circulated to the 3rd defendant in an email [47] on 14 January 2010, the judge reminded the jury of the evidence of Ms Christy So:[48]
“ She said that she sent it to the 3rd accused because Nelson Cheung asked to do so, but she did not know why.”
86. Subsequently, the judge had reminded the jury “…that was the first email about the draft announcement to the 3rd accused.” [49]
87. Of the amendments to the drafts of the announcement sent in the various emails, the judge reminded the jury that it was the evidence of Ms Christy So that:[50]
“ that it was mainly made by Nelson Cheung and Gary Yu. She did not have any impression of having received any comments from the 3rd accused.”
88. In that context, the judge reminded the jury of the evidence adduced through Ms Christy So in cross‑examination that the earlier drafts of the announcement had been circulated to other parties, prior to 14 January 2010 and in particular that:[51]
“ Miss So agreed that the two representations about the independence of MSL and the US $70 million acquisition cost were added between 8 and 13 January 2010 … and that it was Nelson Cheung whoaddedthelatterone,thatisUS$70millionacquisition costs.”
89. Much earlier in her summing up the judge had made the general point on behalf of all three defendants that “…the defence have drawn your attention to the evidence that the announcement and the circular were in fact not prepared by any of these accused but by Nelson Cheung, Gary Yu, Christie So and Graham Lam.” [52]
90. In his closing speech on behalf of the 3rd defendant, Mr Kwok was critical of what he said was the limited ambit of evidence adduced by the prosecution. He said, inter‑alia:[53]
“ I would say the prosecution have been unfairly selective in the presentation of the evidence. They only produce documents which they think will bring suspicion on the part of the 3rd defendant.”
91. As an illustration of that criticism, he pointed to the fact that the email dated 14 January 2010 to which was attached a draft of the announcement, which the prosecution adduced into evidence, whilst it showed amendments that had been made it did not indicate by whom the amendments were made. Moreover, it was only one of a series of emails that had been circulated on that subject. By contrast, the defence had adduced other emails, which stipulated the author of the amendments. Of the documents produced on behalf of the 3rd defendant, in contrast to that produced by the prosecution, Mr Kwok said:[54]
“ They showed you a document which would not show that. However, they seized a computer. From the computer, there is a hard disk which one can see the chain of emails. Not only the one on the 14th but that before the 14th, after the 14th, all the way up to the 25th when the announcement was made.”
From which documentation Mr Kwok observed to the jury that the 3rd defendant had made “no comment, no contribution at all.” [55]
92. In his oral submissions, Mr Kwok drew attention to the fact that in his closing speech for the prosecution, Mr Oderberg had observed that the jury had been swamped with paper by all of the parties, including himself. He cautioned the jury that not all of the thousands of pages were “valuable or even useful paper.” Then, he said:[56]
“ …one of the counsel in order to persuade you about certain roles played by people in the company POIL, what their duties were, what their responsibilities were what their knowledge may be of matters going on inside the company, has produced many, many, many pages of documents… Now, you might think that four or five would have been enough. You may think that what he put you was a perfectly reasonable proposition and you accept it. You don’t need to be swamped with pages.”
There was no dispute that the counsel to which reference was made was Mr Kwok.
93. In the result, Mr Oderberg suggested to the jury “You are perfectly entitled to limit yourself now to what you think is relevant.”
94. For her part, having directed the jury at an early stage of her summing up that they were to “decide the case only on the evidence that you have heard and seen” [57], the judge said at the close of her summing up:[58]
“ I have told you that you have to come to your verdicts based only on the evidence adduced, not on any other matters. Criticisms have been made about the way the prosecution presented the exhibits or presented the prosecution’s case; however, you should not allow such criticism stood to detract (sic) (distract?) you from your consideration of the evidence. The evidence before you is what is important, not how the prosecution have presented or arranged their exhibits.”
95. Clearly, the judge was correct to remind the jury that it was to the evidence that they were to have regard in resolving the issues they were required to decide. Earlier, she had directed the jury correctly “Emotions and moral judgments play no part in the jury’s deliberation in a criminal trial.” [59] That direction was equally applicable to the pejorative criticisms of each other made by counsel in their closing speeches. The task of the jury was to consider the evidence. The judge’s direction made that crystal clear to the jury.
96. I am satisfied on the submissions made to this Court that this is not a reasonably arguable ground of appeal.
Conclusion
97. For the reasons that I have set out, I refuse the 2nd and 3rd defendants leave to appeal against their convictions.
98. The 2nd and 3rd defendants are advised that they have the right to renew their applications for leave to appeal against conviction to the Full Court, but they are informed that if they do so, and the Full Court determines of a respective applicant that the renewal is without justification, the Full Court may order that some of the time that the respective applicant spent in custody pending the determination of her application shall not be reckoned as part of the term of her sentence.
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(Michael Lunn) |
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Vice President
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Mr Jonathan Kwan, Counsel on fiat and Ms Florrie Chan, SPP, of Department of Justice, for the respondent
Mr Peter Duncan, SC, Mr Anthony Lo and Mr Yuan-shan Cao, instructed by Patrick Mak & Tse, for the 1st applicant
Mr Eric Kwok, SC and Mr Tony Li, instructed by Simon C. W. Yung & Co., for the 2nd applicant
[1] Summing up, page 619 L.
[2] Summing up, page 619 R-T.
[3] Appeal Bundle 2, page 502.
[4] Summing up, page 636 F-G and page 664 R-S.
[5] Summing up, page 666 B.
[6] Summing up, page 641 K-L.
[7] Summing up, page 641 N-U.
[8] Summing up, pages 689 T - 690 G.
[9] Attorney General v Li Fook Shiu, Ronald [1990] 1 HKC 1 at 12 H-I
‘Both primary facts and the inferences therefrom are “matters generally speaking within the province of the jury” in the language of Galbraith. Both can critically be affected by later evidence or lack of evidence from the defence. Assuming all proper directions, the test is not what the judge thinks the jury, and still less he, “must” conclude at that moment, but what a jury “could, may or might” properly conclude in the future.’
[10] Appeal Bundle 2, page 502.
[11] Appeal Bundle 1: Admitted Facts; page 48, paragraph 46.
[12] Appeal Bundle 1: Admitted Facts; page 48, paragraph 44.
[13] Appeal Bundle 1: Admitted Facts; page 48, paragraphs 43 and 47.
[14] Appeal Bundle 1: Admitted Facts; pages 47-8, paragraphs 40-42 and 45-46.
[15] Appeal Bundle 1: Admitted Facts; pages 44-5, paragraphs 20-22 and 24-26.
[16] Appeal Bundle: Admitted Facts; page 44, paragraphs 17-18.
[17] Appeal Bundle: Admitted Facts; page 44, paragraph 12.
[18] Summing up, page 615 P-Q.
[19] Appeal Bundle: Admitted Facts; page 55, paragraph 100.
[20] Appeal Bundle: Admitted Facts; pages 42-3, paragraphs 1 and 3.
[21] Appeal Bundle 1: Admitted Facts; pages 49-50, paragraphs 50 and 58.
[22] Attorney General v Li Fook Shiu, Ronald [1990] 1 HKC 1.
[23] Attorney General v Li Fook Shiu, Ronald,at 12 G-I.
[24] Attorney General v Li Fook Shiu, Ronald, at 13 A-D.
[25] Exhibit P577.
[26] Appeal Bundle 2, pages 366-7.
[27] Summing up, page 686 G-J.
[28] Summing up, pages 687 S - 688 B.
[29] Summing up, pages 686 P - 687 A.
[30] Summing up, page 688 C-H.
[31] Summing up, page 688 I-L.
[32] Summing up, page 688 M-Q.
[33] Appeal Bundle 7; page 1867, counter #s 1909-1916.
[34] Summing up, page 627 Q-S.
[35] Summing up, page 628 E-H.
[36] Summing up, page 628 K-P.
[37] Summing up, page 631 A-D.
[38] Summing up, page 649 E-P.
[39] R v Durante [1972] 1 WLR 1612, at 1617 E.
[40] R v Chan Shek Wai (CACC 472/2001; unreported, 2 August 2002, at paragraph 39).
[41] R v Fanning [2016] 2 Cr. App. R. 19, at paragraphs 15 and 22.
[42] Summing up, page 679 D-G.
[43] Summing up, page 679 I-K.
[44] Summing up, page 667 M-O.
[45] Summing up, pages 670 T - 671 D.
[46] Summing up, pages 689 T - 689 D.
[47] Exhibit P576.
[48] Summing up, page 670 H-I.
[49] Summing up, page 671 K-L.
[50] Summing up, page 670 J-K.
[51] Summing up, page 671 G-J.
[52] Summing up, page 638 H-J.
[53] Appeal Bundle 3, page 601.
[54] Appeal Bundle 3, page 601.
[55] Appeal Bundle 3, page 601.
[56] Appeal Bundle 3, page 507.
[57] Summing up, page 621 K.
[58] Summing up, page 697 J-N.
[59] Summing up, page 622 A-B.
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