HKSAR v. Bowers Kevin Richard

DCCC 898/2018

[2019] HKDC 1225

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 898 OF 2018

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REASONS FOR VERDICT

1.The defendant, Mr Kevin Richard Bowers, a solicitor, pleads not guilty to two charges of doing an act tending and intended to pervert the course of public justice, contrary to Common Law and punishable under section 101I(1) of the Criminal Procedure Ordinance[1].

Introduction

2.On 6 July 2002 a winding-up petition was presented against Wing Fai Construction Company Limited, a subsidiary of Benefit Holdings International Limited which was wholly owned by China Rich Holdings Limited.   A winding-up order was made on 9 December 2002.

3.Ms Cheng Kelly Kit Yin was a director of Wing Fai Construction Company Limited between 28 February 1997 and 26 July 2001 and an executive director of China Rich Holdings Limited between 1 August 2000 and 31 July 2002. 

4.The liquidators commenced various civil actions including claims against China Rich Holdings Limited, Cheng Kelly Kit Yin and the directors of Wing Fai Construction Company Limited. 

5.In HCCW 735/2002 the liquidators alleged that Cheng Kelly Kit Yin and other former directors of Wing Fai Construction Company Limited applied for letters of credit by using sham or fictitious transactions.  In January 2004 the liquidators made a report to the Commercial Crime Bureau against the directors of Wing Fai Construction Company Limited.

6.Cheng Kelly Kit Yin was arrested on 14 May 2008 and charged with conspiracy to defraud on 10 December 2009 and first appeared in court on 11 December 2009.  The case was subsequently transferred to the District Court, DCCC 153/2010.   

7.From May 2009 Richards Butler, solicitors, acted on behalf of the liquidators.  Mr Bowers was the supervising partner. 

8.Mr Bowers on behalf of the liquidators entered into negotiations with the solicitors for China Rich Holdings Limited and Cheng Kelly Kit Yin to settle the civil actions. 

9.Ms Fenn Kar-bak, Lily of Lily Fenn & Partners acted on behalf of China Rich Holdings Limited and Mr Thomas Alexander Fyfe of Barlow Lyde & Gilbert acted on behalf of Cheng Kelly Kit Yin in the civil proceedings.

Prosecution case

10.The first charge arises from a meeting outside court on 25 February 2010 between Ms Fenn and Mr Bowers at which Mr Fyfe was also present.  The second charge arises from a meeting in a restaurant on 2 March 2010 between Mr Fyfe and Mr Bowers. 

11.The prosecution say that in these meetings Mr Bowers knowing the liquidators were witnesses in the criminal case intended to pervert the course of justice by representing to Ms Fenn and Mr Fyfe that the liquidators would not attend court and give evidence in the criminal case if settlement of the civil actions was agreed[2].

Defence case

12.In summary the defence case is that Mr Bowers did not have the specific intent to pervert the course of public justice and that what he said in the meetings did not have the tendency to pervert the course of justice[3].

Prosecution evidence

13.The prosecution called two witnesses Mr Fyfe and Ms Fenn[4].

14.Facts have been admitted pursuant to section 65C of the Criminal Procedure Ordinance,[5] including the winding up of Wing Fai Construction Company Limited; the appointment of the liquidators; the commencement of civil actions and the criminal investigation by the Commercial Crime Bureau.  I will refer to the admitted evidence as I review the evidence.

Defence evidence

15.Mr Bowers elected to give evidence.  

16.Admitted in evidence is that Mr Bowers has a clear record[6]. One character witness Mr Russell John Bennett was called and seven letters (exhibit D64) were submitted speaking of Mr Bowers positive good character[7]. 

17.I direct myself as to good character both as to credibility and propensity in accordance with the decision in HKSAR v Tang Siu Man[8]. 

18.In reaching my verdict I remind myself of the burden and standard of proof and that the burden is on the prosecution throughout.  A defendant has nothing to prove.  I direct myself that I must be sure of the guilt of the defendant on each charge before I can convict, each charge to be considered separately.  On the other hand, if the court thinks that the defence evidence pointing to innocence is true or may be true, it would follow that the defence has raised sufficient doubt in the prosecution case and the defendant entitled to be acquitted[9].

19.I remind myself that when drawing inferences from the evidence the inference must be the only reasonable inference to draw from the proved facts.  If from the facts proved there is a reasonable inference to draw against a defendant as well as one in his favour, the adverse inference cannot be drawn[10].  

The law

20.Both Ms Lam and Mr Harris SC have extensively set out the law relating to perverting the course of justice, in particular with reference to the cases heard by the Court of Final Appeal.  I do not therefore summarise the case law[11]. 

21.I have carefully considered all the evidence and the oral and written submissions of Ms Lam and Mr Harris SC.  I have fully familiarized myself with all the documentation.

22.In considering the evidence, I take into account that Ms Fenn, Mr Fyfe and Mr Bowers were testifying about discussions which took place over nine years ago and that it is important that the court be sure of what was said in each meeting[12].

Background

23.I will first summarise the admitted evidence dealing with the events preceding the two meetings on 25 February 2010 and 2 March 2010 together with a brief introduction about Ms Fenn, Mr Fyfe and Mr Bowers and their involvement in the civil actions[13].

Wing Fai Construction Company Limited (“Wing Fai”)

24.Admitted in evidence is that Wing Fai was incorporated in Hong Kong on 21 November 1980; between 22 November 1998 and 22 April 2002 Wing Fai Construction Company Limited was a subsidiary of Benefit Holdings International Limited which was in turn wholly owned by China Rich Holdings Limited (“China Rich”); and on 22 April 2002 Wing Fai was sold to Sino Glister International Investments Limited[14]. 

Ms Cheng Kelly Kit Yin (“Kelly Cheng”)

25.Admitted in evidence is that Kelly Cheng was a director of Wing Fai between 28 February 1997 and 26 July 2001 and an executive director of China Rich between 1 August 2000 and 31 July 2002[15].

Liquidation

26.Admitted in evidence is that on 6 July 2002 a winding-up petition was presented against Wing Fai and that a winding-up order was made on 9 December 2002[16].

Liquidators

27.Admitted in evidence is that on 6 July 2002 Mr Cosimo Borrelli and Mr David John Kennedy of RSM Nelson Wheeler Corporate Advisory Service Limited (“Nelson Wheeler”) were appointed as provisional liquidators and on 28 February 2003 were appointed by court as the joint and several liquidators; on 8 December 2004 Mr Nicholas Hill (“Mr Hill”) was appointed as an additional liquidator; Mr Kennedy resigned in December 2004 and Mr Borrelli resigned in June 2009 and that Mr Hill took over as sole liquidator from 18 July 2009[17].

28.Admitted in evidence is that Mr Kennedy made a report to the Commercial Crime Bureau (“the CCB”) against the former directors of Wing Fai and commenced a number of civil actions against China Rich, Kelly Cheng, directors of Wing Fai and others, including HCA 833/2004 and HCCW 735/2002[18].

29.Admitted in evidence is that from 2007-2011 Mr Bowers was a partner of Richards Butler who from 25 May 2009 acted for the liquidators[19].

DCCC 153/2010

30.Admitted in evidence is that the CCB investigated a case in which Wing Fai alleged Kelly Cheng and two other former directors of Wing Fai, Yip Kwong and Kam Shing, had applied for letters of credit by using sham or fictitious transactions; Mr Hill and Mr Ian John Pearson (“Mr Pearson”), the contract manager with Nelson Wheeler, gave witness statements to the CCB; Kelly Cheng was arrested on 14 May 2008 and charged on 10 December 2009 with conspiracy to defraud; Kelly Cheng appeared in court on 11 December 2009; 5 February 2010 and 26 February 2010 and that a list of prosecution witnesses was tendered to court on 26 February 2010[20].

31.Admitted in evidence is correspondence between Richards Butler and the Department of Justice and the CCB, exhibits P5, P6, P7, P8, P9 & P10[21].

Ms Fenn

32.Admitted in evidence is that at all material times Ms Fenn was a senior partner with Lily Fenn & Partners and acted for China Rich in HCA 833/2004[22].  Ms Fenn has practised as a solicitor for thirty-five years and is also a liquidator[23].  

33.Ms Fenn testified that she first acted on behalf of China Rich around 2004 together with her junior partners Toby Tse and Thomas Chan.  Ms Fenn would receive instructions from Kelly Cheng and Yip Kwong Robert (“Robert Yip”) on behalf of the corporate defendants.

34.Ms Fenn was aware that Richards Butler was acting for the liquidators.  Ms Fenn also personally knew Mr Hill.   

35.On 4 June 2009 Mr Hill telephoned Ms Fenn to discuss settlement of all the civil cases.  Mr Hill told Ms Fenn he had complained to the CCB against the three directors. This was the first time Ms Fenn said she became aware of a criminal investigation.  Ms Fenn did not discuss this with Kelly Cheng or keep abreast of the progress and development because Kelly Cheng was legally represented by Reimer & Partners.

Mr Fyfe

36.Admitted in evidence is that at all material times Mr Fyfe was a partner with Barlow Lyde & Gilbert and acted for Kelly Cheng in HCCW 735/2002 and HCA 833/2004[24].  Mr Fyfe was admitted as a solicitor in the United Kingdom and Hong Kong in 1997.  

37.Mr Fyfe testified that in September 2009 he became actively involved as the supervising partner having taken over from Camille Jojo and Seamus Donagan who had left Barlow Lyde & Gilbert.  Mr Fyfe was aware the liquidators had commenced a number of actions against China Rich, Kelly Cheng and others and that the liquidator was Mr Hill. 

38.Mr Fyfe was aware that Richards Butler was acting for the liquidators and communicated with both Mr Bowers and his associate Ms Oonagh Toner.

39.In cross-examination when asked whether Mr Bowers was someone who is trustworthy and who fights hard for his clients, Mr Fyfe replied, “He certainly fights hard. I think he pushes the envelope a bit, I would say, but that’s -- that’s all.”[25]

40.In re-examination when asked to explain what he meant by “pushes the envelope a bit”, Mr Fyfe replied, “I think his aggression in litigation can -- he’s a well-known aggressive litigator and I think at times he would go further than I would think appropriate.”  Asked if he could give an example about his aggressive litigation style in the litigation they were involved in Mr Fyfe replied, “No.”

41.When Mr Fyfe took over responsibility for the cases he became aware from the beginning that Kelly Cheng was involved in a criminal investigation arising out of a complaint made by the liquidators concerning letters of credit.  Mr Fyfe was also aware that there had been an unsuccessful attempt to settle the criminal case with the Department of Justice in October 2008.

42.In cross-examination Mr Fyfe identified notes of that meeting which were kept on his firm’s file and which he had seen (exhibit D2).  I note in cross-examination Ms Fenn said she was absolutely unaware of this meeting. 

43.Mr Fyfe did not represent Kelly Cheng in the criminal investigation and thought that she was represented by Mary Reimer.  Mr Fyfe was aware that Kelly Cheng was charged but could not remember when he learnt this but said it would have been almost immediately after she was charged.

44.In cross-examination Mr Fyfe said he was aware that Ms Fenn and Kelly Cheng were personal friends whereas Ms Fenn more than once disagreed in cross-examination that she was a personal friend of Kelly Cheng.

Mr Bowers

45.Mr Bowers was admitted as a solicitor in the United Kingdom in December 1992 and in Hong Kong in June 1997.  Mr Bowers has been on the panel of Hong Kong solicitors able to conduct the defence of claims and complaints made against firms and individual solicitors under the professional indemnity scheme, including claims relating to professional conduct.

46.Mr Bowers is also a prosecutor for the Hong Kong Law Society in cases of alleged breach of professional conduct; clerk to the disciplinary committee of the Hong Kong Confederation of Insurance Brokers[26]; an accredited mediator; an associate member of the Association of Certified Fraud Examiners and an examiner with the University of Hong Kong in relation to legal studies.

47.In May 2009 Richards Butler began acting for the liquidators.  Mr Bowers knew Mr Hill who he had first met in 2000 while working with Deacons.  When Mr Bowers took over conduct of the case Mr Hill gave him a background explanation of the cases including attempts made to reach a global settlement and that a report had been made to the CCB. 

48.Mr Hill provided Mr Bowers with correspondence relating to settlement discussion in which the liquidator first proposed settlement in the sum of $45 million which was later reduced to $35 million (see exhibits D1 and D4) and about a meeting with the Department of Justice (see exhibits D2 and D3).

49.Mr Bowers was not privy to the discussions between Ms Fenn and Mr Hill in June 2009 but was made aware of them by Mr Hill (see exhibit D5).

50.By August/September 2009 Mr Bowers described himself as up to speed.

51.In November 2009 there was a without prejudice meeting in the offices of Richards Butler in which Ms Fenn tabled a counter proposal of $12 million which was rejected by Mr Hill as derisory (see exhibits D10, D12 & D13).

52.Mr Bowers was aware that the respondents would only settle if there was an assurance regarding the criminal investigation (see exhibit D4C). 

53.Mr Bowers explained the strategy of Mr Hill was that the criminal investigation would be used as leverage in settlement negotiations and in this regard instructed him to cooperate with both the Department of Justice and the CCB (see exhibits D6, D7 & D16-D20).  

54.On 10 February 2010 the CCB informed Richards Butler that the next hearing was on 26 February 2010 and that Mr Hill and Mr Pearson were to be witnesses and asked if they were available and if it would be better to serve witness summonses at the offices of Richards Butler.  Richards Butler replied that they only acted for Mr Hill and that Mr Hill agreed to act as a prosecution witness but would not be able to attend on 26 February at such short notice (see exhibits D21 & D22). 

55.I now turn to consider the evidence relating to each charge

Charge 1

56.The particulars of charge 1 read as follows:

“BOWERS Kevin Richard, on or about the 25th day of February 2010, in Hong Kong, with intent to pervert the course of public justice, did an act which had a tendency to pervert the course of public justice, namely to impair or frustrate the criminal proceedings against CHENG Kelly Kit-yin and others in the case of DCCC 153 of 2010, by using unlawful or improper means, namely, by representing to FENN Kar-bak, Lily, solicitor acting for China Rich Holdings Limited of which CHENG Kelly Kit-yin was once a director, that the witnesses in the criminal case would not attend Court to give evidence and they would be out of jurisdiction if an amount of settlement sum was confirmed and settled.”

Evidence of Ms Fenn  

57.The prosecution principally relies on the evidence of Ms Fenn[27]. 

58.Ms Fenn attended the High Court on 25 February for a call-over hearing in HCA 833/2004.  Mr Bowers also attended the hearing as did Mr Fyfe, Selwyn Chan and David Luk from Barlow Lyde & Gilbert. 

59.In cross-examination Ms Fenn said she did not think Kelly Cheng attended the hearing because this was only a callover hearing for which there was no need for the client to attend[28]. At the end of cross-examination when Mr Harris SC put that Kelly Cheng attended the hearing Ms Fenn replied that she may have been there but she could not now confirm[29].

60.After the hearing, in the lobby outside the courtroom, Mr Bowers suggested sitting down and having a discussion.  Ms Fenn, Mr Fyfe, Selwyn Chan and David Luk were present.  In cross-examination Ms Fenn said Mr Bowers spoke in an ordinary manner, nothing special, that there were no raised voices and he did not suggest the discussion take place in a private conference room.

61.Mr Bowers mentioned settlement of all the civil proceedings and referred to the sum of $38 million which sum had first been raised by Mr Hill on 4 June 2009.In cross-examination Ms Fenn agreed that in her witness statements she made no mention of Mr Bowers referring to the sum of $38 million.

62.Ms Fenn said someone raised the issue of what would happen and how to deal with the criminal case if all the civil actions were settled but could not remember who said this.

63.Mr Bowers replied saying, “What is most important is the amount of the settlement sum.  If that can be confirmed and settled, the witnesses of the criminal proceedings would not attend court to give evidence as they were and would be out of the jurisdiction.”

64.When asked who Mr Bowers directed this statement at Ms Fenn replied Mr Fyfe.

65.Ms Fenn understood that if sufficient money was paid the criminal proceedings would not proceed as the witnesses would not come back to give evidence.  Ms Fenn did not know who the witnesses were but was given the impression that Mr Hill would not be coming back as the liquidator.  

66.In cross-examination Ms Fenn said she found this shocking because Mr Bowers was saying he would be arranging witnesses not to attend court to give evidence in the criminal proceedings.  Ms Fenn agreed that she did not report this to the Law Society although she was aware that there was a duty to report to the Law Society if she suspected professional misconduct or wrongdoing by a fellow solicitor[30].

67.After Mr Bowers said this no one made any follow up comments.  Ms Fenn suggested that they have further discussions without prejudice in the future.

68.Ms Fenn said the discussion was quite short, lasting 10-15 minutes and was basically a discussion between Mr Bowers and Mr Fyfe.  Ms Fenn said that she just sat there and listened because she knew nothing about the criminal proceedings. 

69.Ms Fenn said that this was the first time she learnt of the criminal proceedings. Prior to 25 February 2010 Ms Fenn said that she did not know Kelly Cheng had been arrested or charged and that when Mr Hill told her in June 2009 that he had complained to the CCB he did not say anything about arrests or charges.

70.When asked whether she was aware Kelly Cheng had to appear in court in any criminal proceedings when Mr Bowers spoke to her outside court Ms Fenn replied that she was not told anything about the criminal proceedings.

71.Ms Fenn said that only after the hearing on 25 February did she become aware that Kelly Cheng had been arrested.  Ms Fenn said she was told towards the end of February when she asked Kelly Cheng what had happened.  Kelly Cheng said she had been arrested but mentioned very little about the criminal case.  Ms Fenn did not press Kelly Cheng for details because that would have been embarrassing.  Kelly Cheng did not mention she had been charged and Ms Fenn could not remember when she knew that Kelly Cheng had been charged.

72.In cross-examination Ms Fenn said that although Mr Hill told her in June 2009 about making a report to the CCB she was unaware of any precondition to settling the civil actions that the criminal investigation be withdrawn[31].  By March 2011 Ms Fenn said she still did not know of this precondition and explained that was because she was not involved in the criminal proceedings[32].

Evidence of Mr Fyfe[33].

73.Prior to 25 February 2010 Mr Fyfe could not remember whether Mr Bowers had ever mentioned the criminal investigation. 

74.Mr Fyfe together with his associate Selwyn Chan and a paralegal David Luk attended the High Court on 25 February 2010 in connection with HCA 833/2004.  Ms Fenn and Mr Bowers were also in attendance.

75.After the court hearing Mr Bowers asked Mr Fyfe whether his client was interested in a settlement discussion, a without prejudice discussion.  Mr Fyfe did not remember the exact words spoken but they were essentially along these lines. Mr Fyfe understood Mr Bowers to mean a global settlement without explicitly saying global settlement.

76.When asked who else attended this discussion Mr Fyfe replied that there were quite a few people milling about as often as there is after a hearing but could not exactly recall who was also present.   Mr Fyfe thought that Ms Fenn was there as well describing her as “sort of part of the discussion”.  Mr Fyfe explained that some people were within earshot and sticking their head in and so he thought that Ms Fenn was certainly participating to some degree.

77.Mr Fyfe told Mr Bowers that he needed to take instructions from his client and would get back to him.  Mr Fyfe could not recall anything else said.

78.Mr Fyfe said the discussion lasted no more than one minute after which he went to speak about what had transpired with Kelly Cheng who had attended court but was not part of the discussion.

Evidence of Mr Bowers[34].

79.Mr Bowers attended the High Court on 25 February 2010 for a directions hearing.  Mr Bowers was the last to leave the courtroom.  On leaving the courtroom Mr Bowers saw Ms Fenn, Mr Fyfe, Selwyn Chan and David Luk standing in a loose circle not far from the door of the court.

80.Mr Bowers walked up and asked if they could all speak without prejudice.  Ms Fenn and Mr Fyfe both said yes.  Mr Bowers explained that it was his usual practice when coming out of court to ask the opposition if they could speak without prejudice and to see if there was any chance of settlement.  Mr Bowers said this occasion was no different and that he asked with a view to try reignite the stalled settlement negotiations.

81.Mr Bowers said that it would be good if they could go away and get their client’s instructions on settlement.  After so many years Mr Bowers said he could not remember the exact words but he said something along the lines of, “Settle with the liquidator, he’s done, he’s out.”   Mr Bowers said that he was a straight talker and that was probably his rather brash way of saying, “Settle with the liquidator, he’s discharged, he’s out of the picture, he’s done.”

82.Mr Bowers explained when saying this he had in mind that once there was a settlement the liquidator would report to the Department of Justice saying that the settlement was in the best interests of the company and the creditors and had been approved by the court and that it was then up to the Department of Justice whether or not to continue to prosecute.

83.Mr Bowers remembered Mr Fyfe saying he would go take instructions but did not remember anyone asking him any questions or expressing surprise or shock.  Mr Bowers said that the whole exchange lasted less than a minute after which he walked to the lift and left alone.

84.Mr Bowers said he did not mention $38 million or say that “the settlement sum was the most important thing”.  Mr Bowers explained that in commercial litigation with a monetary claim it was strikingly obvious that the settlement sum would be the most important thing therefore there was no need to say this and he would not have said anything like that.

85.Mr Bowers also did not say “confirmed and settled” which he described as Charles Dicken’s English and not his way of speaking.  Mr Bowers also did not say anything to do with “witnesses being, were or would be overseas or out of the jurisdiction” which again was not the way he spoke.  Mr Bowers also explained that he was only acting for Mr Hill and could not speak for anybody else therefore he would not have referred to “witnesses”.

86.Mr Bowers did not discuss with Mr Hill about the directions hearing either before or after the hearing because the hearing was unremarkable and that this would be covered in the weekly report to Mr Hill.  Similarly, because the hearing was totally unremarkable Mr Bowers did not make any attendance note.

87.As far as Mr Bowers was concerned nothing inappropriate or improper was advanced by him in the meeting.

88.The conversation took place in the public area outside court where people were milling around.  Mr Bowers said he did not mind who heard what was said and that he would have asked to go in a conference room if he had wanted the conversation to be held in private.

Discussion

89.Ms Lam submits that Ms Fenn gave clear and consistent evidence which was not shaken in cross-examination by reason of which the court can safely rely and place full weight on her evidence[35]. Mr Harris SC on the other hand submits that the evidence of Ms Fenn is manifestly unreliable[36].

90.Mr Harris SC places great significance on the fact that Ms Fenn claimed unequivocally that she had not given evidence in the criminal proceedings concerning Kelly Cheng[37].

91.Evidence has been adduced that in the criminal proceedings the defence applied for a stay of proceedings which was heard in May 2012.  In cross-examination Ms Fenn said she only learnt about the charges that Kelly Cheng was facing when Mary Reimer asked her to make a statement in relation to the intended application for a stay of proceedings.   

92.Ms Fenn made a total of four statements.  When Mr Harris SC questioned Ms Fenn about the statements he asked Ms Fenn to confirm she had given evidence in the stay application.  Ms Fenn replied that she did not attend court and did not give evidence.  Only after reading the transcript and the court playing back the audio of the stay proceedings did Ms Fenn accept that she did give evidence. 

93.Whilst one would not expect a solicitor to forget having given evidence in court, I do not find that this fact alone causes me to doubt the reliability of Ms Fenn’s evidence.

94.Nor does the fact that an attendance note which Ms Fenn said she made after the meeting could no longer be found due to the lapse of time; that Ms Fenn professed to know very little about the criminal proceedings prior to the meeting on 25 February 2010[38] and that Ms Fenn did not report the matter to the Law Society[39], cause me to doubt the reliability of Ms Fenn’s evidence. 

95.I do however accept the submission of Mr Harris SC that by reason of these matters the evidence of Ms Fenn about what was said in a meeting almost ten years ago must be treated with extreme caution[40].

96.Mr Harris SC refers to Ms Fenn’s evidence as riddled with self-contradiction[41].  The matters relied on by Mr Harris SC are minor in the extreme and certainly not material. 

97.In my view, more important are the inconsistencies in the evidence of Ms Fenn and that of Mr Fyfe, in particular the duration of the meeting and what was said at the meeting[42].

98.Ms Fenn said the discussion was quite short, lasting 10-15 minutes whereas Mr Fyfe said the discussion was no more than a minute.  Ms Lam submits that due to the time lapse the difference is more apparent than real and unsurprising[43]. 

99.I disagree.  Notwithstanding the meeting was over nine years ago the difference in time is substantial.  A meeting of not more than a minute indicates very little was said whereas a meeting of 10 to 15 minutes indicates much more was said. 

100.Mr Fyfe testified that all Mr Bowers said was to ask him if his client was interested in a without prejudice settlement discussion which is consistent with a meeting lasting no more than one minute.  Although Mr Fyfe could not remember the exact words spoken by Mr Bowers he did agree in cross-examination that nothing improper was suggested by Mr Bowers.

101.As will be seen later when discussing charge 2 Mr Fyfe testified that at the meeting with Mr Bowers five days later on 2 March 2010 Mr Bowers did speak about Mr Hill staying out of the jurisdiction[44].

102.I agree with Mr Harris SC that it would have been extraordinary for Mr Fyfe to not recall the contents of the February conversation yet recall the details of the March conversation[45], in particular as both discussions are alleged by the prosecution to have referred to witnesses staying out of the jurisdiction.

103.Further, when Ms Fenn was asked who Mr Bowers directed his statement at she replied Mr Fyfe.  If this is correct all the more surprising therefore that Mr Fyfe did not remember this as having been said.  In this context it is also worthy of note that in the particulars of charge and the prosecution opening it is particularised that the representation by Mr Bowers was made to Ms Fenn and not Mr Fyfe[46].

104.Taking into account, inter alia, that

(a)  the discussion was over nine years ago;

(b)  the discussion was held in the public area of the High Court and not in one of the private conference rooms;

(c)  the inconsistencies in the evidence of Ms Fenn and Mr Fyfe; and

(d)  in cross-examination Mr Fyfe agreed that at the meeting nothing improper was suggested by Mr Bowers.

I find that I am left with a doubt about exactly what Mr Bowers said in that discussion and whatever was said was said with an intention to pervert the course of justice. 

105.In reaching this finding I have not overlooked that on his own evidence Mr Bowers testified that when he came out of the courtroom he said “Settle with the liquidator, he’s done, he’s out.”   This suggests something more than what Mr Fyfe recalled was said in the short discussion. 

106.This however does not, in my view, overcome the material differences in the evidence of Ms Fenn and Mr Fyfe and Mr Fyfe’s agreement in cross-examination that nothing improper was suggested by Mr Bowers. 

107.The benefit of the doubt is given to Mr Bowers and he is acquitted of charge 1.

Charge 2

108.The particulars of charge 2 read as follows:

“BOWERS Kevin Richard, on or about the 2nd day of March 2010, in Hong Kong, with intent to pervert the course of public justice, did an act which had a tendency to pervert the course of public justice, namely to impair or frustrate the criminal proceedings against CHENG Kelly Kit-yin and others in the case of DCCC 153 of 2010, by using unlawful or improper means, namely by representing to FYFE Thomas Alexander, solicitor acting for CHENG Kelly Kit-yin in the civil actions, that HILL Nicolas would stay out of the jurisdiction to avoid being subpoenaed to give evidence in the criminal proceedings against CHENG Kelly Kit-yin and others if a global settlement sum of $38 million Hong Kong currency can be agreed.”

2 March 2010

Evidence of Mr Fyfe

109.The prosecution relies on the evidence of Mr Fyfe[47].

110.Mr Fyfe testified that acting on the instructions of his client he called Mr Bowers and suggested a meeting for a without prejudice discussion over a cup of tea at Robuchon in the Landmark.  In cross-examination Mr Fyfe said he could not remember the date he called Mr Bowers but had no reason to disagree that he called on him on Monday 1 March.

111.Mr Fyfe met the defendant at Robuchon in the Landmark.  No one else was present.  The meeting lasted about 20-30 minutes.  In recalling what was said in the meeting Mr Fyfe at times had to think what came next and could not remember the right order everything was said.  Mr Fyfe said what he told the court was as close as he could get.

112.After exchanging pleasantries Mr Fyfe thought there was a general discussion about the civil litigation and how they both became involved.

113.Mr Fyfe asked Mr Bowers about his settlement position.  Mr Fyfe thought Mr Bowers said he wanted $38 million less $9 million which was held in escrow by Clifford Chance.  Mr Fyfe, who described himself as fairly new to the litigation relative to Mr Bowers, asked what the $9 million was about.

114.Mr Fyfe told Mr Bowers that the difficulty was that whilst the criminal action was still proceeding there was no appetite/interest on the part of his client to have a settlement of the civil litigation.  In other words, his client would not pay $30 million if she still had to go to trial on the same facts for a criminal prosecution.

115.When Mr Fyfe said there was no way anyone could control the Department of Justice and therefore there was an impasse Mr Bowers said that if the liquidators were not to give evidence the prosecution would lose impetus.

116.Mr Fyfe questioned why the liquidators evidence was important as his understanding was the case would be made out principally on documents.  Mr Bowers explained that the prosecution required a liquidator to speak to the documents and thinks Mr Bowers explained this was for chain of evidence reasons.

117.Mr Bowers continued that there was only four persons who could do this, Mr Hill, David Kennedy, Mr Pearson and Cosimo Borrelli.  Mr Bowers said that he could speak for both Mr Hill and David Kennedy but not Cosimo Borrelli.  With regard to Mr Pearson Mr Bowers said that Mr Pearson had lost his job with International Risk.  Mr Fyfe did not know International Risk or what the defendant was suggesting by that statement.

118.Mr Bowers said that the next stage of the criminal action was a PTR or some callover hearing coming up in May 2010 and that if no liquidator was on the witness list then either the Department of Justice would abandon the prosecution or Kelly Cheng could apply to strike out.  Mr Fyfe did not know whether what Mr Bowers said was accurate or not.

119.Mr Bowers also referred to the fact that Mr Hill lived in Australia and that he could stay out of the jurisdiction and therefore could not be subpoenaed.  Mr Fyfe thought he explored some of this in some detail with Mr Bowers but could not remember exactly what.

120.Mr Fyfe referred to the fact that there was deep lack of trust and that Kelly Cheng felt the liquidators were out to get her.  Mr Fyfe thought he implied that how could one be certain Mr Hill would stay out of the jurisdiction.  Mr Bowers replied that they could agree as part of the settlement agreement that Mr Hill would stay out of the jurisdiction.

121.Mr Fyfe had two reactions to what Mr Bowers said. First, as a commercial litigator he had never heard of a geographical covenant and wondered how this could be included in an agreement and enforced. Second, Mr Fyfe thought that this was talking about paying for a witness to be absent from the jurisdiction which did not sound right. Mr Fyfe therefore queried with Mr Bowers whether this would be an agreement to pervert the course of justice. Mr Fyfe said that Mr Bowers seemed to reflect on it saying he would have to think about that.

Evidence of Mr Bowers[48]

122.In summary Mr Bowers testified that in the afternoon of 1 March he received a telephone call from Mr Fyfe inviting him to meet at the Robuchon café the next afternoon.  Mr Fyfe said that he was relatively new to the case and wanted to be filled in on the status of the settlement negotiations.  Mr Fyfe also said that he had taken instructions from his client following the discussion at court and wanted to have a without prejudice discussion to explore possible settlement.

123.Mr Bowers agreed to meet Mr Fyfe with the intention of reigniting the stalled settlement negotiations as he thought he may make more headway with Mr Fyfe than with Ms Fenn or any of the other parties including Mary Reimer.  Mr Bowers described discussing with Mr Fyfe as his best bet to make some progress in terms of settlement discussions.

2 March 2010

124.Mr Bowers did not inform Mr Hill in advance because he had standing instructions to progress settlement negotiations and there was nothing remarkable to notify Mr Hill about meeting Mr Fyfe for an informal chat on a without prejudice basis over a cup of tea.

125.Mr Bowers met Mr Fyfe at 3:45 in the afternoon.  Mr Bowers explained that usually his assistant Oonagh Toner would attend meetings with him but this was different having been arranged only the day before Ms Toner must have been busy.

126.Mr Bowers did not think there was anything improper about meeting Mr Fyfe alone for an informal without prejudice chat especially as they were sitting in the corridor of the Landmark on public view with hundreds of people walking past within earshot every few minutes.

127.The meeting lasted about 20-30 minutes during which Mr Bowers said nothing improper or inappropriate was said to Mr Fyfe.

128.After the meeting Mr Bowers sent an email to Mr Hill (exhibit D28, pages 71-72 defence bundle) setting out what was discussed.  The email was sent at 17:57 about one hour and forty minutes after the meeting had finished and while the events were still fresh in Mr Bowers’ mind.

129.The email was not kept secret.  A copy was sent to his assistant Oonagh Toner and copies were placed on the Wing Fai files which were accessed by numerous people.

130.Mr Bowers gave evidence about what was said in the meeting by reference to this email, Mr Harris SC taking Mr Bowers through the email point by point[49].

Point 1

131.Mr Bowers explained that going into the meeting he had no instructions to repeat any offer made previously by Mr Hill.  The previous offer made by Mr Hill in June 2009 and the offer made by Ms Fenn in the meeting held on 4 November 2009 were used as points of reference.  Neither Mr Bowers nor Mr Fyfe made any offer during the meeting.

Point 2

132.Mr Bowers was repeating what was said in the meeting and not giving advice.

Point 3

133.The global settlement suggested in the email 28 October 2009 was the offer of $38 million which Mr Bowers used as a point of reference for Mr Fyfe when filling Mr Fyfe in about the history of settlement negotiations.

134.Mr Bowers explained point 3 was the time when he and Mr Fyfe began to throw around ideas, speaking hypothetically in the context of civil commercial litigation.  Mr Bowers said they were thinking of legal ways to get around what Mr Fyfe referred to as an impasse by which Kelly Cheng (Mr Fyfe’s client) would be given some degree of comfort to bring her back to the settlement table.

135.Mr Bowers came up with the reference to a subpoena in a civil case.  Mr Bowers explained that in a civil case where a subpoena is served out of the jurisdiction the subpoena is not effective because there is nothing wrong in the witness not complying with the subpoena. Similarly, Mr Bowers said that the service of a statutory demand on a debtor who is overseas is likewise not enforceable.

136.Mr Bowers referred to a pre-trial review in the criminal case scheduled for 14 May and said to Mr Fyfe that if Mr Hill’s name did not appear on the witness list the defence could apply to strike out the case.  Mr Bowers explained that in a civil case if an important witness was overseas and could not be compelled to attend the plaintiff’s case would be weakened and the defence could apply to strike out the action.

137.Mr Bowers stressed that they did not discuss about evading or avoiding service and that neither he or Mr Fyfe had any clue whether a subpoena, or something similar, served out of the jurisdiction was enforceable in a criminal case.  Mr Bowers referred to point 7 of the email and the reference to making sure that nothing they were discussing was perverting the course of justice because they did not know.

138.Mr Bowers also explained that by saying Mr Hill was an important witness he was “talking up” his case because he had no idea if Mr Hill was an important witness.  Mr Bowers also told Mr Fyfe that he did not know if Mr Hill was on a witness list when in fact he had received a letter from the police informing him that Mr Hill and Mr Pearson would be required to give evidence.  Mr Bowers said at the time of the meeting he did not know whether Mr Hill or Mr Pearson had given witness statements and only became aware in mid to late 2011 that Mr Hill had given a witness statement.

139.Mr Bowers said he was therefore to a certain extent “bluffing” Mr Fyfe both on the importance of Mr Hill’s evidence and about knowing Mr Hill had already been asked to give evidence.  Mr Bowers said that by mentioning the pre-trial review in May he was trying to put time pressure on Mr Fyfe. 

140.At no stage in the discussion did Mr Bowers intend to frustrate, disadvantage or derail the criminal proceedings against Kelly Cheng.  Mr Bowers explained that this would have been totally against the whole case strategy of the civil action from the time his firm was first instructed, which was to assist the CCB and the Department of Justice which would “exert pressure and prompt we thought a more favourable commercial settlement of the civil actions”.  Mr Bowers said the last thing he wanted to do was in anyway derail the criminal proceedings because he would then lose his leverage in the settlement negotiations.  Mr Bowers also explained that he would not go against his instructions to assist the CCB and the Department of Justice and that there was no reason for him to do so.

141.Later in his evidence Mr Bowers said that at no time did he contemplate influencing Mr Hill not to cooperate with the prosecution and repeated that his instructions were to help the prosecution so as to increase and maintain leverage on a commercial settlement and to do otherwise would damage his case.

Point 4

142.Mr Bowers explained this was part of the discussion where he tried to build up Mr Hill as witness and that if he was not on the witness list the defence could apply to strike out the action.  Although Mr Bowers had no idea whether Mr Kennedy was on a witness list he mentioned his name to Mr Fyfe to increase leverage on Kelly Cheng because of previous hostility between Kelly Cheng and Mr Kennedy.

Point 5

143.Mr Bowers told Mr Fyfe that the element of mistrust was on both sides.  Mr Bowers said that they both agreed that the terms of any settlement were to be in writing in a formal settlement agreement.  Mr Bowers explained that he knew the formal settlement agreement had to be approved by all parties, the lawyers, the Committee of Inspection and the Companies Judge.

Point 6

144.Mr Bowers said he was being as accurate as possible about Mr Fyfe’s words and that Mr Fyfe said this in the context of discussing legal solutions in a civil context.

Point 7

145.Mr Bowers said he was concerned that what they discussed about subpoenas might not be the same; whether any settlement sum to be paid was proceeds of crime and whether any settlement sum could be used to pay the creditors.  Mr Bowers explained because they were not criminal lawyers all this needed to be checked out to make sure that nothing they were doing would get them or their respective clients into trouble.

146.Mr Bowers said it was a fact that Mr Hill was semi-retired and this was his last big case and that Mr Kennedy was retired as a liquidator.  Mr Bowers explained he thought that in the civil context if the liquidators settled and were discharged there was no reason for them to come back.  Mr Bowers repeated that no one in the discussion was talking about evading or avoiding service.

147.Mr Bowers said he not only told Mr Fyfe everything had to be “above board” but stressed everything had to be “above board”.

148.When Mr Hill replied to the email email saying “This is a risky game” (exhibit D28, page 70 defence bundle) Mr Bowers replied to Mr Hill a few minutes later (exhibit D28, pages 69-70 defence bundle) saying that was why he had stressed the importance of everything being above board[50].

149.Mr Bowers said that in the end he did not check or ask anyone to check because he knew Mr Hill would give evidence and that any settlement terms would have to be recorded in a formal settlement agreement poured over by lawyers, the Committee of Inspection and the Companies Judge.

150.Mr Bowers did not at any stage say or do anything to seek or dissuade Mr Hill from giving cooperation to the authorities.  Mr Bowers said that nothing came of the discussion with Mr Fyfe.

151.Mr Bowers testified that post the meeting he continued to follow his instructions to assist the CCB and the Department of Justice (see for example exhibits D32, D33, D38, D39, D43, D45, D47, D50, D52, D54 & D55).   Exhibits D32 and D33 are also admitted in evidence as exhibits P12 and P13[51].

Arrest

152.Mr Bowers attended the CCB by appointment in November 2016. This was the first time Mr Bowers was aware he was suspected of any criminal wrongdoing.  Mr Bowers was arrested on 3 September 2018 and subsequently charged[52].

Discussion

153.Whilst the evidence of Mr Fyfe and Mr Bowers is largely consistent with regard to what was discussed in the meeting there are two differences highlighted by Ms Lam and Mr Harris SC[53].

154.First, whether Mr Bowers said that Mr Hill lived in Australia and could stay out of the jurisdiction as testified by Mr Fyfe[54] or as testified by Mr Bowers that if the liquidators settled and were discharged there was no reason for them to come back/return[55].

155.Second, who raised whether what was being discussed would be an agreement to pervert the course of justice[56].

Did Mr Bowers say Mr Hill could stay out of the jurisdiction or there was no reason for the liquidators to come back/return?

156.In cross-examination Mr Fyfe said he could not remember Mr Bowers saying that if the liquidation was at an end there was no reason for the liquidator to travel to Hong Kong and repeated that Mr Bowers used the words “stay out of the jurisdiction”.

157.I accept the evidence of Mr Fyfe.  I found Mr Fyfe to be an impressive witness who readily told the court when he could not remember something.  Although describing him as an aggressive lawyer Mr Fyfe showed no animus towards Mr Bowers.  Quite the contrary.  One example of this already seen is in respect of charge 1 when Mr Fyfe agreed in cross-examination that in the meeting on 25 February 2010 nothing improper was suggested by Mr Bowers[57].

Who raised whether what was being discussed would be an agreement to pervert the course of justice?

158.Mr Bowers said he was the one who raised the matter about making sure that nothing that was discussed was perverting the course of justice, stressing that everything must be “above board”.

159.Mr Harris SC places much emphasis on the email (exhibit D28) written about 1 hour 40 minutes after the meeting which he submits largely corresponds with the evidence of Mr Bowers[58].    

160.As pointed out in court this is hardly surprising considering that Mr Bowers had the email in front of him when testifying and Mr Harris SC led Mr Bowers through the email, point by point reading out the content and asking Mr Bowers to explain. 

161.In cross-examination when Mr Harris put to Mr Fyfe that it was Mr Bowers’ recollection that he was the one who raised the question of ensuring that everything was legal and above board, Mr Fyfe replied that he did not remember that discussion and repeated that when the suggestion was made by Mr Bowers that it (the non-attendance of Mr Hill) could be put into the settlement agreement he said that that would be illegal and remembered Mr Bowers saying he would think about that. 

162.Notwithstanding the content of the email sent by Mr Bowers to Mr Hill for the reasons already given I find Mr Fyfe to be an impressive witness.  I accept the evidence of Mr Fyfe that when Mr Bowers said that Mr Hill staying out of the jurisdiction could be put into the settlement agreement Mr Fyfe queried whether this would be an agreement to pervert the course of justice to which Mr Bowers said he would have to think about that.

163.I do however accept that the fact shortly after the discussion Mr Bowers wrote to Mr Hill about what was said in the meeting is evidence of Mr Bowers’ conduct and is relevant in considering whether the prosecution have proved that by these words Mr Bowers intended to pervert the course of justice.  

Tendency to pervert the course of justice

164.Mr Harris SC submits that what the charge alleges in relation to making a witness unsusceptible to being subpoenaed is in fact impossible and thus cannot constitute perversion[59]. Simply put the basis of this submission is that Mr Hill could have been compelled to attend. 

165.Mr Harris SC also refers the court to various cases in other jurisdictions to show that to induce a witness to avoid process by leaving the jurisdiction is not illegal and therefore submits that what Mr Bowers said does not have the tendency to pervert the course of justice[60].   

166.I have no hesitation in rejecting these submissions.  This is not a case of lawyer advising a witness on whether he must attend court to give evidence.  The cases referred to by Mr Harris SC do not concern the charge of perverting the course of justice. 

167.The absence of a witness from any court hearing, whether that be civil or criminal, may have a material effect on the outcome of that case. 

168.I am satisfied to represent that a witness could stay out of the jurisdiction and not give evidence does have the tendency to pervert the course of justice, if that was said with the intention of perverting the course of justice. 

Intention to pervert the course of justice

169.I now turn to consider whether Mr Bowers in representing that Mr Hill could stay out of the jurisdiction and not give evidence in the criminal proceedings intended to pervert the course of justice or was only discussing ideas for a way out of what Mr Fyfe described as the impasse. 

170.The prosecution case is that Mr Bowers was in effect asking for a settlement sum in return for the liquidator not giving evidence[61].

171.Whilst this may be one interpretation of what Mr Bowers said having carefully considered all the evidence, I am not satisfied this is the only interpretation of what Mr Bowers said.    

172.Mr Fyfe, who could not remember the right order everything was said, did not say Mr Bowers explicitly asked for a settlement sum in return for the liquidator not giving evidence. 

173.Mr Hill was out of the jurisdiction at the time of the discussion and had been for almost a year[62]. I am not satisfied by saying Mr Hill lived in Australia and could stay out of the jurisdiction was indicative of Mr Bowers intending to pervert the course of justice. 

174.Further, I agree with Mr Harris SC that if Mr Bowers intended to pervert the course of justice there would be no need to discuss the legal concepts of subpoena, enforceability, service out of the jurisdiction and compellability[63].    

175.The suggestion made by Mr Bowers to include in the settlement agreement that Mr Hill stay out of the jurisdiction is not in my view the act of a person intending to pervert the course of justice.  No such clause could ever be included in a settlement agreement which ultimately had to be approved by the Companies Judge, something which was known to Mr Bowers.  I find inherently improbable that if Mr Bowers intended to pervert the course of justice he would suggest this very act be included in the settlement agreement[64]. 

176.As Mr Fyfe testified that when he queried with Mr Bowers whether this would be an agreement to pervert the course of justice Mr Bowers seemed to reflect on it saying he would have to think about that[65]and in re-examination said that it seemed some of what Mr Bowers said was “off the cuff”.

177.There is no evidence that Mr Bowers said he would seek to persuade or influence Mr Hill not to give evidence.  In cross-examination when Mr Harris SC put to Mr Fyfe that Mr Bowers never used the words or conveyed the idea that the liquidator could be persuaded to stay away, Mr Fyfe replied, “I don’t think so.  I don’t think the word persuaded was used”. 

178.I agree with Mr Harris SC that if Mr Bowers intended to pervert the course of justice he would not be making a record of what was said by writing to his client (exhibit D28) and leaving copies on the files for others to read[66].

179.Taking all these matters into account and the fact that Mr Bowers knew Mr Hill was willing to testify[67]; Mr Bowers’ instructions from the liquidator were all along to co-operate with the CCB and the Department of Justice[68]; the meeting was not initiated by Mr Bowers; the discussion was on a without prejudice basis in which Mr Fyfe agreed in cross-examination that they were looking and exploring and bouncing ideas for a way out of the impasse and that the meeting was held in a restaurant and not in private, I find I am not satisfied so I am sure that the only inference to draw is that Mr Bowers intended to pervert the course of justice.

180.As Mr Harris SC said when beginning his submission that what Mr Bowers said (even on his own case) may with the benefit of hindsight have been unwise, perhaps even disingenuous, possibly distasteful but not perverting the course of justice. 

181.The unwise words of Mr Bowers discussing the position if the liquidator does not give evidence when he full well knew Mr Hill would give evidence which discussion immediately rang alarm bells with Mr Fyfe and which Mr Hill responded by saying this is a risky game[69], have clearly brought the prosecution upon Mr Bowers.   

182.For the reasons given the benefit of the doubt is given to Mr Bowers and he is acquitted of charge 2.