HKSAR v. Chen Keen and Others

CACC 172/2016

[2018] HKCA 470

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 172 OF 2016

(ON APPEAL FROM HCCC NO 83 OF 2014)

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J U D G M E N T

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1.This is the judgment of the Court.

2.The first applicant (“A1”) and the second applicant (“A2”) each seek to have two points of law of great and general importance arising out of this Court’s decision of 16 April 2018 certified under section 32(2) of the Hong Kong Court of Final Appeal Ordinance, Cap 484; the third applicant (“A3”) seeks to have a single point of law certified.  All of the parties are agreeable to determining these applications on the papers.

3.On behalf of A1 and A3, certification is sought in respect of the following question (A1’s second point of law and A3’s only point of law):

“Whether it is permissible in law to charge a single count of conspiracy to defraud, which identifies different agreed dishonest means (and/or different objectives) where the alleged co-conspirators have not all agreed to the use of the same dishonest means (and/or the pursuit of these same objectives)? Should a jury be directed to consider whether such a count is or may involve more than one conspiracy?”

(The words in brackets represent A3’s addition to the question)

A2 does not join in seeking certification of this question, and indeed had not argued it as one of her grounds of appeal at the hearing of the appeal.

4.The issue, from which this point of law is said to derive, was dealt with by the Court at paragraphs 55‑118 of its judgment under the heading ‘One conspiracy or two?’  It might be pointed out that this point was never taken at trial, notwithstanding that it was always the prosecution’s case that A3 was not involved with particulars (a) to (c) of either Count 1 or Count 2, but only with particulars (d) and (e).  We would comment that if this is a point of such great and general importance in its effect on the convictions as it is now portrayed, Mr Fitzgerald QC, who represented A1 at trial, never sought to make it to the trial judge as he did to the Court of Appeal when acting at the appeal on behalf of A3, with which submissions Mr Khosa and Ms Zahir have now persisted in this application.  Even at the appeal, his relevant ground of appeal on behalf of A3 (Ground 8), and his accompanying written argument and addendum, did not allege that the two counts were duplicitous in averring two separate conspiracies as between particulars (a) to (c) and (d) to (e) (see paragraphs 57-58 of our judgment).  They were concerned only with the sufficiency of the judge’s directions as to whether A3 could be said to have intended the consequences set out in particulars (f) of Count 1 and (f) and (g) of Count 2.

5.Be that as it may, we do not accept that there is any divergence of opinion between Hong Kong and the United Kingdom as to the common law offence of conspiracy to defraud.  As we explained, the jury had to be satisfied so that they were sure that each defendant dishonestly agreed to bring about the objectives averred in the indictment (particular (f) in Count 1; and particulars (f) and (g) in Count 2).  The overt acts from which the jury were invited to infer the existence of a dishonest agreement to achieve those objectives were set out in particulars (a) to (e) of each count.

6.The evidence plainly demonstrated that the applicants’ objective was dishonestly to induce 462 to approve the Acquisition and to issue convertible notes (and an optional bond) in order to purchase the New Zealand farms from A2 (Count 2).  While each applicant played a different role in that exercise, the objective was to ensure that the Acquisition went ahead and that funds were raised for the issue of the notes.  In order to achieve this aim, it was first necessary to deceive the Hong Kong Stock Exchange (“SEHK”) as to the true position, so that it could not properly perform its regulatory function in ensuring that 462 and the investing public were not deceived (Count 1).

7.Unfortunately, the point which is now sought to be argued has, we think, been excited by the judge giving a Kevin Brown direction, which, as we made clear in our judgment, was neither necessary nor applicable to either count as pleaded (see, in particular, paragraphs 68-82 of the judgment of the Court).  Nevertheless, the applicants can hardly complain about what Ms Draycott SC has called in her submissions an unnecessary direction which “favoured the defence and raised an additional hurdle for the prosecution”.

8.Not only does the case not involve any new or novel principle of law, which has not already been well established in both the United Kingdom and Hong Kong, but on analysis it did not arise on the facts because, as we explained at paragraphs 95-105 and 329 of our judgment, we considered it inconceivable that the jury could have been satisfied of A2 and A3’s involvement in manipulating the accounts without A1’s knowledge and connivance.

9.Nor do we think that Mr Khosa’s refinement of the argument on behalf of A3 arises on the facts found by the jury following the judge’s clear directions (see paragraph 78 of our judgment).

10.Accordingly, we decline to certify this question in either of its proposed forms.

11.A further question sought to be certified by A1 (his first point of law) is:

“In the context of charges of conspiracy to defraud the Stock Exchange and shareholders of a listed company, where false representations are said to have been made as to connections between the directors of the listed company and the vendor in a very substantial acquisition governed by the Listing Rules, for the purpose of the direction on falsity, is the judge required to determine and direct the jury, as a matter of law, on the meaning of a “connected transaction” and “connected persons” under the Listing Rules?”

12.A3 does not join in applying to certify this question, while A2, by the second part of her second question (see infra at paragraph 19), has a variation of it.

13.We have dealt with this issue under the heading ‘Connected transaction?’, at paragraphs 329-351 of the judgment of the Court.  The ultimate question for the jury was whether what the conspirators were doing was a fraud on HKSE (Count 1) and/or 462 (Count 2).  The defence may well for tactical reasons have wished to side-track, and perhaps ensnare, the prosecution in an immaterial debate on whether the transaction was a “connected transaction” under the Listing Rules, but the case put by the prosecution from beginning to end was one of conspiracy to defraud the HKSE and/or 462 by various specified dishonest means.  The term “connected transaction” did not appear anywhere in the particulars of each count, nor was there any reference to the Listing Rules.  

14.It is true that the term “connected persons” did appear in particular (a) of each count, but there was, and could be, no dispute that A1 and 462 were connected persons, since A1 was a director of 462.  However, the question was whether the relationship between A1 and A2 was properly disclosed to 462 and SEHK, the prosecution allegation at all times being that they were “working together”, notwithstanding that they were on opposite sides of the Acquisition.  Whether they were “connected persons” under the Listing Rules was not germane to either count of the indictment.

15.We do not think that this question raises a point of great and general importance nor does it arise in the circumstances of this case.  We decline to certify the question sought.

16.A2 seeks to have certified the following question (her first point of law):

“Whether in a case of Conspiracy to Defraud a public officer into breaching his public duty, it is necessary to prove that the conspirators specifically intended that the conduct, the subject of the conspiracy, should bring about such a breach of duty, as opposed to merely recognizing that it might?”

17.We dealt with this argument at paragraphs 119-126 of our judgment.  We concluded, at paragraph 126, that the argument was “of marginal academic interest but of no practical significance in the circumstances of this case”.  We shall not repeat the arguments.  Suffice it to say that in that concluding statement of the Court, we were clearly taking issue with the point as one of great and general importance, but also making clear that it did not arise on the facts of the case.

18.For those same reasons, we decline to certify this point of law.

19.We have already touched upon part (ii) of the second question for which A2 applies a certificate (her second point of law), namely:

“Whether in a case involving an allegation of Conspiracy to Defraud a public officer into breaching his public duty, it is necessary: (i) for the Prosecution to identify the legal duty in question and particularise the manner in which it was intended that the public officer should breach that legal duty; and (ii) for the jury to be directed as a matter of law as to the nature and ambit of the duty and the corresponding obligations on those required to provide the public officer with the information necessary for the proper discharge of that duty?”

20.It is suggested by part (i) of the question that because the indictment did not cite section 21 of the Securities and Futures Ordinance, Cap 571, namely, that the SEHK’s duty was to ensure, so far as reasonably practicable, an orderly, informed and fair market, it was not drafted with sufficient particularity.  The short answer is that none of the parties at trial ever asked for this to be spelled out, perhaps because it was so obvious. That the function of SEHK is to oversee the proper functioning of the stock market is not something, with respect, that a Hong Kong jury needed to have explained to them, given the nature of the evidence in a case such as this.

21.As for (ii), we have already addressed the variant of the point in A1’s first point of law.

22.We do not think that the question raises a point of great and general importance, nor do we think these issues arose on the facts of the case.  For these reasons we decline to certify the question.

Conclusion

23.For the above reasons, we decline to certify any of the various points of law put forward by the applicants.

Ms Charlotte Draycott SC, counsel on fiat and Ms Joycelyn Ng PP, of the Department of Justice, for the Respondent

Mr Clive Grossman SC and Mr Benson Tsoi, instructed by Boase, Cohen & Collins, for the 1^st Applicant

Mr Graham Harris SC and Ms Emily Yu, instructed by Haldanes, for the 2^nd Applicant

Mr David Khosa and Ms Yasmine Zahir, instructed by Hobson & Ma, for the 3^rd Applicant