HKSAR v. Kiu Mei Ling and Others
Read the full judgment text of CACC 110/2019 on BabelCite. This Court of Appeal judgment was delivered on 21 April 2021.
1. The 1 st , 2 nd and 3 rd applicants are members of the one family. They were D1, D2 and D3 respectively at trial and I will refer to them by their trial designations. D1 is the wife of D3, and D2 is their son.
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CACC 110/2019 [2021] HKCA 78 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CRIMINAL APPEAL NO 110 OF 2019 (ON APPEAL FROM HCCC NO 348 OF 2017) _______________
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________________ J U D G M E N T ________________ Introduction 1.The 1st, 2nd and 3rd applicants are members of the one family. They were D1, D2 and D3 respectively at trial and I will refer to them by their trial designations. D1 is the wife of D3, and D2 is their son. 2.On 14 January 2019, the applicants stood trial before Deputy High Court Judge Lunn (the judge) and a jury variously charged with two offences of fraud (Counts 1 and 2)[1] and three offences of money laundering (Counts 3, 4 and 5).[2] On 25 March 2019, at the conclusion of the trial the applicants were convicted of the counts they each faced. D1 was convicted of all five counts on the indictment and sentenced to a total term of 11 years’ imprisonment. D2 was convicted of Counts 2 and 3 and sentenced to a total term of 7 years’ imprisonment. D3 was convicted of Counts 4 and 5 and sentenced to a total term of 6 years and 6 months’ imprisonment. 3.On 8 April 2019, D1 filed a notice of application for leave to appeal against conviction and sentence. On 16 April 2019, D2 filed a notice of application for leave to appeal against conviction only. On 9 April 2019, D3 filed a notice of application for leave to appeal against conviction and sentence. 4.The applicants were granted legal aid in respect of their applications for leave to appeal against conviction and were legally represented at the leave hearing. However, D1 and D3 appeared in person in respect of their applications for leave to appeal against sentence. At the leave hearing, D1 and D3 abandoned their leave applications against sentence and their sentence appeals were dismissed. The counts on the indictment 5.There were five counts on the indictment. Counts 1 and 2 concerned allegations of fraud, with Count 1 against D1 only, and Count 2 jointly against D1 and D2. Counts 3, 4 and 5 concerned allegations of money laundering, with Count 3 jointly against D1 and D2, and Counts 4 and 5 jointly against D1 and D3.[3] 6.The particulars of Count 1 alleged that, between 24 May 2004 and 31 May 2009, D1:
7.The particulars of Count 2 against D1 and D2 were expressed in the same terms as in Count 1, except the offence period was between 1 June 2009 and 31 March 2011; the Information was produced by “Kiu Mei-ling and/or Ha Ting-pong”; and the sum involved was $12,368,388.81.[5] 8.The particulars of Count 3 alleged that, between 30 September 2004 and 18 March 2011, D1 and D2:
9.The money allegedly laundered in Count 3 concerned four bank accounts held by D2 (referred to as “D2-account 1, 2, 3 and 4”). The particulars of Counts 4 and 5 against D1 and D3 were in the same terms as in Count 3, except the money allegedly laundered in each count concerned a single bank account held by D3 (referred to as “D3-account 1 and D3-account 2”). In Count 4, the offence period was between 30 June 2004 and 3 January 2011, involving a total sum of $10,586,616.66; while in Count 5 the offence period was between 20 October 2004 and 18 March 2011, involving a total sum of $16,468,193.65.[7] The prosecution case 10.Bonjour Cosmetic Wholesale Center Limited (Bonjour) is a publicly listed company in Hong Kong that retails in cosmetic products and operates a beauty parlour. At the material times, Mr Wilson Ip (Mr Ip) was the Chief Executive Officer and Chairman of Bonjour, and Mr Alan Chan (Mr Chan) was its Executive Officer. 11.On 24 May 2004, D1 was employed as the Manager of the Human Resources and Administration Department (HR Department) of Bonjour. On 23 August 2004, D2 was employed as a HR clerk in the HR Department and on 1 June 2009 he was promoted to Assistant HR Manager of the HR Department. D1 and D2 remained in their respective positions until their dismissal on 22 March 2011. 12.The HR Department was responsible for the calculation of the payroll of all staff of Bonjour. The salaries of office staff was paid once a month, while the salaries of retail staff was paid multiple times in a month because their salaries consisted of commissions. 13.The period of the fraud counts coincided with the duties that D1 and D2 respectively performed in respect of the payment of salaries at Bonjour. Both D1 and D2 (when he was promoted to the position of Assistant HR Manager) were responsible for the calculation of salaries on the company’s payroll online system. The payroll details on the online system were edited so that payments or overpayments (payments in excess of D1 and D2’s salaries) were received into bank accounts held in the names of D1, D2 or D3 or names of others as appointed by D1. The edited payroll details were then stored in a USB drive which was given to Ms Vanky Chung, the Manager of the Accounting Department of Bonjour. 14.The procedure that took place was that D1 or D2 would login to Ms Vanky Chung’s computer and insert the USB drive to upload the payroll details onto the computer. D1 or D2, as the case may be, falsely represented to Ms Vanky Chung that the salary payment information they presented was true and accurate, and that the management of the company had agreed and approved the overall payroll amounts. As a result, Ms Vanky Chung entered the password which enabled the payroll details to be sent to the company’s bank to effect payment by autopay in accordance with the uploaded information. 15.It was alleged that as a result of the fraud perpetrated by D1 and D2, they successfully misappropriated funds of Bonjour in the sum of $28,123,360.71 in Count 1 and $12,368,388.81 in Count 2. It was further alleged that the proceeds of the frauds were paid into the bank accounts variously held or controlled by D1, D2 and D3, which after having been deposited would be withdrawn in cash or used to pay personal bills. 16.On 22 March 2011, a query was raised by Ms Doris Ho (Ms Ho), the Manager of the Beauty Department of Bonjour, with Mr Chan about the level of salary that was paid to one of the company’s employees, a Ms Michelle Hong (Ms Hong). Ms Ho was concerned that the salary purportedly paid to Ms Hong was too high for her position. As a result, Mr Chan asked D1 to ascertain from Ms Hong’s personal file what was her salary entitlement. She advised Mr Chan that Ms Hong had remembered the figures incorrectly and had made a mistake. After further inquiries, it was revealed that an overpayment had been made of Ms Hong’s salary. Mr Chan approached D1 again, but she gave no explanation for the discrepancy. He considered the issue to be “very serious” and reported the matter to Mr Ip. As a consequence, Mr Chan terminated the employment of D1 and D2 on the same day. 17.The incident with Ms Hong’s salary generated concern within the company and inquiries were made about salary payments generally. The company then engaged Mr Lee Ho Cheung, an accountant, to check if there were any problems with Bonjour’s payroll. As a result of his findings, the matter was reported to the police on 6 April 2011. 18.In respect of Count 1, it was the prosecution case that D1 committed fraud against Bonjour by falsely representing to Bonjour that (1) the salary payment information that she produced for Bonjour was “true and accurate”(referred to as “the 1st particular”); and (2) “the management of Bonjour had agreed and approved the overall payroll amounts” (referred to as “the 2nd particular”), and thereby induced Bonjour to make payments and overpayments of salary in the period between 24 May 2004 and 31 May 2009, in a total sum of $28,123,360.71, which she misappropriated. 19.It was alleged that D1 made the false representations to Ms Vanky Chung on each and every occasion she presented to her the Bonjour payroll data in the USB drive to be uploaded to the EasyPay Online and HR Lite payment systems for transmission to the company’s account, at the Hongkong and Shanghai Banking Corporation (HSBC). The explicit representation that was made to Ms Vanky Chung was that Mr Ip had been informed of the payroll, agreed to it and approved the amount (the 2nd particular). The implied representation was that Mr Ip having approved it, the salary payment information was “true and correct” (the 1st particular). 20.In respect of Count 2, it was the prosecution case that both D1 and D2 committed fraud against Bonjour by making the same false representations as particularised in Count 1, and thereby induced Bonjour to make payments and overpayments of salary in the period between 1 June 2009 and 31 March 2011, in a total sum of $12,368,388.81, which they misappropriated. The commencement date of Count 2, coincided with D2’s appointment as Assistant HR Manager, and during the period D1 and D2 were responsible for the payment of the payroll. 21.It was alleged that D1 and D2 made the false representations, in the same manner as alleged in Count 1, to Ms Vanky Chung on each and every occasion when either of them presented the Bonjour payroll to be uploaded to the EasyPay Online and HR Lite payment systems for transmission to the company’s account. 22.In respect of the money laundering counts, the prosecution case against D1 was that she knew that the property the subject of Counts 3, 4 and 5 was the proceeds of the indictable offence that she committed, namely, the frauds alleged in Counts 1 and 2. 23.Count 3 concerned monies variously deposited into D2’s four bank account (D2-accounts 1 to 4). The prosecution case against D2 was that after he was appointed Assistant HR Manager on 1 June 2009, he knew that the property in Count 3 was the proceeds of the indictable offence, namely the proceeds of the fraud that he allegedly committed together with D1 in Count 2. However, prior to 1 June 2009, the case against D2 was that he had reasonable grounds to believe that the property in Count 3 was the proceeds of an indictable offence. 24.Counts 4 and 5 concerned monies variously deposited into D3’s two bank accounts (D3-accounts 1 and 2). The prosecution case against D3 was that he had reasonable grounds to believe that the monies deposited into his accounts in Counts 4 and 5, were the proceeds of an indictable offence. 25.It was not in dispute at trial that the basic monthly salary of D1 commenced at $15,000 in 2004 and ended at $25,100 in 2011.[8] In August 2004, D2 commenced employment with Bonjour as a HR clerk with a basic monthly salary of $6,500.[9] 26.It was an admitted fact that between 2004 and 2011 the total monies received by D1 from Bonjour was $2,995,683.05, and the total monies transferred to D2’s accounts was $11,524,690.36 and to D3’s accounts was $27,054,810.31.[10] It was also an admitted fact that “D3 has never been employed by Bonjour in any way, nor had he had any kind of business dealings with Bonjour.”[11] D3 was recorded as an employee of Bonjour on the payroll data and purportedly received a monthly salary. 27.The admitted facts set out transfers by Bonjour between September 2004 and March 2011, in which 35 persons were named as payees of salary payments in the total sum of $14,862,438.42, which was paid to various bank accounts in the names of D1, D2 and D3, the bulk of which was paid into D3’s bank accounts.[12] Also included were tables of the method of withdrawal of the monies deposited into the bank accounts held by D1, D2 and D3, which were mainly ATM cash withdrawals and some credit card and other payments.[13] The defence case 28.The defence case advanced on behalf of D1, D2 and D3 was mainly presented through the evidence of D1.[14] She was the only one who gave evidence and no other witnesses were called by the applicants. 29.D1 accepted that she effected the transfers of the monies to the bank accounts to D2 and D3 (the Ha bank accounts) alleged by the prosecution through the Bonjour EasyPay Online and HR Lite payment systems, stipulating the name of the payee as an employee or former employee of Bonjour or D3 (even though he was not an employee). She also used other names. However, she said she did this on the instructions of Mr Ip or Mr Chan. She acknowledged that, having effected the transfers, she withdrew the monies in cash, which she said she paid to Mr Ip or Mr Chan. There were as well other payments that she claimed she made for the company. She accepted that she used two bank accounts of D3 (D3-accounts 1 and 2) and four bank accounts of D2 (D2-accounts 1 to 4) to receive the monies. She further admitted that on occasion, she had transferred monies between those accounts. 30.D1 additionally claimed that on occasion Ms Vanky Chung was involved in providing her with information from Mr Ip as to the amount of money to be deposited in the Ha bank accounts to be withdrawn as cash and then paid either to Mr Ip or Mr Chan. She said that on occasions she gave Ms Vanky Chung cash that she had withdrawn from the Ha bank accounts under the arrangement, which monies were to be conveyed to Mr Ip. It was her case that Ms Vanky Chung was not only aware of the arrangement in which monies were paid by Bonjour to the Ha bank accounts and withdrawn as cash, and then paid to Mr Ip, but that she also participated in the arrangement. It was submitted as part of the defence case that Ms Vanky Chung could not therefore be deceived as alleged by the prosecution. 31.D1 testified that after she joined the company in about June 2004, Mr Ip approached her and asked her to reimburse him on the next payroll as he had tipped employees at the retail shops. When she asked for Mr Ip’s bank account details, he said there was no need to go to such trouble, and asked her to pay herself first and give the money back to him. D1 then told him that she was a bankrupt and could not use her bank account. Mr Ip then told her to use a family member’s bank account and as he was the boss it was “okay”.[15] The amount she arranged on this first occasion was $6,000. She did this by using the payroll online system. She said she used the available bank account particulars of an existing employee and edited the account by deleting the bank account number and replacing it with the bank account number of D2-account 4. From the financial records, D1 had not made the transfer in another employee’s name but rather in D2’s name and to his bank account, even though at the time he was not an employee of the company. When queried about this, she said it was also possible to simply add an additional bank account number to the payroll data. Having withdrawn the money from D2 or D3’s bank account, she then put the cash in Mr Ip’s office drawer.[16] 32.D1 said that Mr Ip would indicate to her how much he wanted and she would then transfer the monies from Bonjour to the Ha bank accounts, which she would withdraw in cash and provide to him. She said that Mr Ip also gave her specific names of persons he wanted to tip and asked her to arrange transfers to them in the same way. She followed these instructions and changed the bank account details on the payroll online system and made transfers to D2 and D3’s bank accounts. She continued placing the money inside Mr Ip’s office drawer, and if necessary, she asked Ms Vanky Chung for the key to his office to do so.[17] 33.After 2005, D1 said that an understanding developed between her and Mr Ip so that she did not need his express instructions about the deposit of monies into the accounts. She said she would record the monies paid in a red and black book and sometimes Mr Ip would sign it. She claimed that when she was dismissed she was not permitted to take the book with her.[18] 34.In early 2005, D1 said that Mr Chan requested her to make similar payments to him and he told her to do the same as she did for Mr Ip. She said that subsequently Mr Ip instructed her to do as Mr Chan requested and from then on she effected transfers on Mr Chan’s instructions and paid him cash as well.[19] She said on occasions, Ms Vanky Chung was involved in providing her with information from Mr Ip as to the amount of money to be deposited into the Ha bank accounts to be paid back either to Mr Ip or Mr Chan in cash. There were also occasions when she gave the cash to Ms Vanky Chung.[20] 35.There were also some smaller odd sums of money that were used by D1 to reimburse colleagues who had made upfront payments to other colleagues who had left the company.[21] 36.D1 claimed that in 2005 as a result of her good performance, she was given a housing allowance of $35,000, which was increased in 2007 to $45,000 and then to $50,000. She also claimed that Mr Ip said to her that she should enjoy a higher salary and that at the expiry of her bankruptcy order, he would compensate her with additional payments. She said that Mr Ip would stipulate a figure and told her that it was compensation. She estimated she had received on this basis over $300,000.[22] 37.D1 testified that on 22 March 2011, Mr Chan came and saw her and said that if Mr Ip asked her why Ms Hong received such a high salary, she should tell Mr Ip that he knew about it. She then attended a meeting with Mr Ip and Mr Chan, and said what she was told to say. This erupted into an argument between them about the increase of salaries, at which point Mr Chan stated that he had nothing to do with the high salary received by Ms Hong and that it had been done by D1. Later in the afternoon, Mr Chan informed D1 that she was suspended for one month and that she and her son were to leave the office.[23] 38.On 24 March 2011, D1 returned to the office at the request of Mr Chan. She said that Mr Chan asked her to admit the case and she would be paid $15 million in return. In response, she denied stealing money from the company, and said that her son had nothing to do with the matter. Mr Chan then took her to another room to meet a lawyer. The lawyer repeated the allegation that she had taken money from the company, and the offer that if she admitted the matter she would be paid $15 million. In response, she repeated her denial and her assertion that the matter had nothing to do with her son. She said that Mr Chan threatened her that if she did not admit it, he would implicate her son.[24] 39.In respect of the cases of D2 and D3, it was D1’s evidence that she controlled the bank accounts of D2 and D3 and that they knew nothing about the transactions that were taking place in their bank accounts. 40.D1 said that she controlled both of the HSBC bank accounts in the name of D3 and possessed the only bankcard for them, which she used exclusively to operate withdrawals of money at ATM machines to make payments and transfers. D3 would sign blank cheques for her use, and she did not tell him anything about the payments she made. She said that she operated and controlled those accounts and D3 knew nothing of the activities that went on in them.[25] 41.D1 said that she controlled and used exclusively the Hang Seng Bank account of D2 (D2-account 4). She said she possessed the only bankcard for the account, which she used to make withdrawals of money at ATM machines and to make payments and transfers. She said that she had possessed the bankcard since 2000, which coincided with the acquisition of a property by D2. She said that she told D2 nothing of the activities that went on in the bank account. As to the other bank accounts of D2, she said that she received transfers of monies from Bonjour into those accounts and she never told D2 that the monies had come from Bonjour. On occasion, she explained to D2 that she made a deposit into one of those bank accounts to pay a credit card bill that had been incurred for spending that he had made on her behalf. On other occasions, she did not reply to inquiries from D2 about activities in the accounts. Sometimes, she told him that it was the payment of a housing allowance or that it was her own salary. She also testified that D2 was not involved in editing payroll data on the online payroll system.[26] Denial of the defence case 42.Mr Ip[27] and Mr Chan[28] both testified for the prosecution and denied the claims put to them that they had instructed D1 to manipulate the online payroll system and obtain for them company funds in cash. Ms Vanky Chung also testified for the prosecution and she denied knowledge of or involvement in the arrangement as claimed by D1.[29] 43.Mr Ip denied that he told D1 to pay money into her own account and then given him the money. He also denied that he told her that she could pay the money into the bank accounts of her family members.[30] He added that there was no reason why D3 should receive a salary from Bonjour. He was unaware at the time that, between 2004 and 2011, D3’s bank accounts had received over $26 million in payments from Bonjour. He had not authorised such payments.[31] He was also unaware that during this period D2’s bank accounts had received over $11 million in payments from Bonjour. He had not authorised such payments. As for the salary payments by Bonjour to named payees into the bank accounts of others, he said he had not authorised D1 to make such payments. He was unaware that it was being done in the period from 2004 to 2011.[32] He also denied that D1 was entitled to a housing allowance.[33] 44.Mr Chan rejected the suggestion that in early 2005, he had asked D1 about payments that had been made by Bonjour to D3’s bank account. He disagreed he had discovered payments arranged by D1 from Bonjour’s accounts to bank accounts of her family. He also disagreed that D1 told him that Mr Ip instructed her to make those payments and that D1 was receiving those monies. Similarly, he rejected the suggestion that he had requested D1 to make payments from Bonjour through the bank accounts of her family and to pay him in cash in the same way as Mr Ip was paid. He further rejected the suggestion he had asked D1 to use the name of his wife to effect such transactions.[34] 45.Mr Chan testified that on 22 March 2011, he made inquiries with D1 about the discrepancy with Ms Hong’s salary and she offered no explanation. He considered that the matter was “very serious”. He denied D1’s claims that he met her and told her what to say about Ms Hong’s salary at a meeting with Mr Ip. He also denied that on 24 March 2011, he told D1 that she would be paid $15 million if she took up all responsibility for the matter.[35] 46.Ms Vanky Chung testified that she trusted D1 when she uploaded the password to permit access and transmission of the USB data to the EasyPay Online system.[36] Of the representations made to her by D1 and D2, her evidence as summarised by the judge was as follows:
47.Ms Vanky Chung testified that she did not know that Bonjour had deposited from its bank account over $27 million into the bank accounts of D3, whom she knew to be the husband of D1, in the period from June 2004 to March 2011. She said that if she had known of those payments she would not have allowed instructions to be given to the bank. Similarly, she did not know that over $11 million had been deposited into the bank accounts of D2, in the same period. She said had she known that those payments included payments in excess of those to which D2 was entitled to receive from Bonjour as salary, she would not have allowed instructions to have been given to the bank for those payments to be made. This additionally included payments in excess of the amounts of salary to which staff were entitled to receive from Bonjour.[38] 48.It is noteworthy that there were a number of significant matters that D1 had testified about which had not been put to relevant witnesses, nor was there independent evidence of certain records that D1 said existed or of certain events and conversations that D1 said took place.[39] As far as the latter matters were concerned, the judge reminded the jury that they should take into account the delay in investigating and prosecuting the case against the applicants.[40] An overview of the case 49.This is a rather unusual case because the defence substantially admitted the prosecution case. Nonetheless, the trial ran for 48 days and as already noted the key prosecution witnesses were extensively challenged, with Mr Ip and Mr Chan being accused of perpetrating the frauds on Bonjour. The judge when sentencing the applicants noted that the company was defrauded of the total sum of $40,491,749 in the period from May 2004 to March 2011 and none of the monies was recovered. It was also revealed that D1 had convictions for 43 charges of theft and 2 charges of false accounting in the District Court on 28 April 1983, for which she was sentenced to a total of 18 months imprisonment.[41] 50.The principal of the alleged frauds on Bonjour was D1. She accepted that she falsified payroll data and transferred company funds to the bank accounts of D2 and D3. However, she claimed that she did this on instructions from members of senior management of the company, to whom she would provide the funds in cash. She also claimed that D2 and D3 knew nothing of the transfers of the company funds into their respective bank accounts. The jury found the applicants guilty of the counts that they faced and in so doing rejected the defence case. 51.Before the salary payment data contained on the USB drive could be transmitted to HSBC through the EasyPay Online and HR Lite payment systems, it was necessary for Ms Vanky Chung to input a password. She inputted the password on numerous occasions in consequence of the dishonest and false representations that were made by D1 (Count 1) and D1 and D2 (Count2). She testified that she did so because she trusted D1 as she was the Manager of the HR Department. In that capacity, D1 was trusted to check and collate the calculations of salary payments of both office and retail staff as well as commission payments to retail staff and present them to Ms Vanky Chung in the USB drive to be uploaded to the EasyPay Online system. 52.On 24 May 2004, D1 commenced her employment with Bonjour as the Manager of the HR Department. D1 discovered that it was possible to change the information in respect of the bank account details of a particular payee as well as changing the name of the payee and the details of the staff code of the employee but still effect payment without detection. D1 admitted in evidence that she caused the payment made on 30 June 2004 of $15,000 to the account of D3 (D3-account 1), thereby making her husband as payee using her own staff code number of 01669. She did this by editing her own payment details. She deleted her own name and bank account and inserted those of D3. Those monies represented D1’s salary at the time. She diverted the monies to her husband’s account because she was about to be made the subject of a bankruptcy order.[42] She repeated this exercise with her salary payment on 31 July 2004, which was diverted into the bank account of D3. 53.In August 2004, D1 made five payments to the same account in which D3 was named as the payee but the payments were not her salary and clearly not a salary to her husband because he was never employed by Bonjour. Those payments totalled over $121,000 although there was a payment of $14,000 into D1’s own newly opened bank account, which may have been her salary. 54.Thereafter, D1 used the names of other employees or former employees as the payee in the salary payment instructions to HSBC but stipulated the bank account of D2 or D3 to which the transfer of monies were made. On occasion, she transferred the monies to her own account. In the period from 2004 to 2011, D1 received from Bonjour the total sum of $2,995,683.05, D2 received from Bonjour in his bank accounts the total sum of $11,524,690.36 and D3 received from Bonjour in his bank accounts the total sum of $27,054,810.31.[43] The monies were mostly withdrawn in cash or on other occasions were used to make credit card and other payments.[44] 55.D1’s son, D2, joined D1 in defrauding Bonjour when he was appointed Assistant HR Manager on 1 June 2009. D2 in his position had access to the confidential information of salary payments made to office and retail staff. As a result, he would sometimes accompany D1 to Ms Vanky Chung’s office and together with D1 made representations to Ms Vanky Chung about the propriety nature of the data contained on the USB drive that she was asked to uploaded on the EasyPay Online system. The grounds of appeal 56.There is considerable common ground between the applicants in their respective applications and it would therefore be useful to briefly describe the issues they raise. 57.Mr Selwyn Yu, SC, together with Mr CK Leung (who was also trial counsel) and Mr Ryan Law, for D1, advance three grounds of appeal.[45] Ground 1 complains that the judge erred in directing the jury that they could convict D1 on Counts 1 and 2 on an alternative basis. Ground 2 complains that the judge erred in directing the jury that they could convict D1 on Counts 1 and 2 on the basis of explicit and implied representations which were not part of the prosecution case, and in failing to give a Kevin Brown direction to the jury (this was not particularised in the ground but was contained in D1’s written submission). Ground 3 provides that in the event the appeal by D1 against conviction on Counts 1 and 2 is allowed, then the jury could not have been sure that D1 knew the property with which she dealt in Counts 3, 4 and 5 represented the proceeds of an indictable offence, namely the frauds averred in Counts 1 and 2. 58.Mr Adonis Cheung (who was also trial counsel), for D2, advances three grounds of appeal.[46] Ground 1 complains that the judge wrongly allowed the prosecution to shift its case to allege an alternative basis and as a result left open to the jury to improperly convict D1 and D2 on Count 2. Ground 2 complains that the judge failed to give proper direction to the jury about the implicit and explicit nature of the false representations particularised in Count 2. Ground 3 provides that in the event the appeal of D1 and D2 against conviction on Counts 1 and 2 is allowed, the conviction on Count 3 is unsustainable because the money laundering offences were linked to the fraud alleged in those counts. 59.Mr Dick Lee, for D3, advances three grounds of appeal.[47] Ground 1 complains that the judge erroneously allowed the prosecution to proceed on a different and alternative basis at the conclusion of the trial which resulted in an unfair trial. Ground 2 complains that the judge failed to properly sum up the evidence of D1 that supported D3’s case and this resulted in an unfair and unbalanced summing-up to the prejudice of D3. Ground 3 complains that D3’s convictions on Counts 4 and 5 were unsafe and unsatisfactory. 60.As is apparent, all three applicants complain that the judge improperly allowed the jury to consider an alternative basis to variously convict D1 and D2 on Counts 1 and 2. D1 and D2 essentially complain that the alternative basis was materially different from the prosecution case that was opened to the jury and as a consequence they were denied the opportunity to contest the alternative basis when defending themselves against Counts 1 and 2. D3’s complaint is different because he was not charged with Counts 1 and 2. His complaint is that he decided not to give evidence on the basis of the prosecution case that was opened to the jury, and if he had known the alternative basis was to be relied on by the prosecution, he might have elected to give evidence. He argues that the alternative basis was not particularised in the relevant counts and was not part of the prosecution case, and was never put to D1 when she testified at trial. He contends that as he was relying on the credibility and reliability of D1, the failure to put the alternative basis to D1 also acted to his disadvantage. 61.These combined grounds of appeal can be distilled into the following issues. The prosecution shifted its case and the jury were improperly invited to convict D1 and D2 of Counts 1 and 2 on an alternative basis. As a consequence, D1, D2 and D3 received an unfair trial (The alternative basis). The judge erred in directing the jury on the false representations in Counts 1 and 2 by referring to their explicit and implicit nature and failing to give a Kevin Brown direction (The directions on the false representations). The money laundering convictions are unsustainable if the appeals against the convictions on Counts 1 and 2 are allowed (The unsustainability of the money laundering convictions). The judge failed to sum up the evidence in favour of D3, particularly from D1, and with appropriate reference to the test in relation to the second limb of “reasonable grounds to believe” (The failure to sum up evidence in favour of D3). 62.I turn now to address the grounds of appeal under the headings that I have just described. The alternative basis 63.It is complained by Mr Yu, for D1, that the prosecution during the course of the trial, or more particularly in its closing address to the jury, sought to depart from its original case and seek a conviction on an alternative basis. He contends that in discussion between the judge and counsel as to the directions to be given to the jury if they accepted that the defence case was or might be true, the prosecution submitted that the applicants could be convicted of the fraud counts “subject to the element of dishonesty and the other things for it was still a fraud practice on Bonjour.” He further contends that this was repeated by the prosecution in its closing address to the jury, when prosecuting counsel said that if what D1 said was true it still would be stealing from and practicing a fraud on the company. It will be important therefore to ascertain exactly what was said by prosecuting counsel and the context in which it was said.[48] 64.Before addressing this argument, it is necessary to recall that the two fraud counts alleged that the relevant applicants falsely represented that the salary payment information was true and accurate (the 1st particular), and the management of the company had agreed and approved the overall payroll amounts (the 2nd particular). During the course of the trial, it emerged that the 2nd particular was explicitly represented whilst the 1st particular was implicit in the 2nd particular. 65.In supporting his argument under this ground, Mr Yu makes three points. 66.The first point is that the alternative basis was not open to the jury on the indictment and on the evidence. It is argued that if it was true or might be true that Mr Ip and Mr Chan had agreed and approved the overall payroll amounts, then the 2nd particular would not be false, and as the 1st particular is derived from the 2nd particular then that would need to be addressed with appropriate directions. It is further argued that if it was true or might be true that Ms Vanky Chung was a knowing participant in the alternative basis, then she could not be deceived by the false representations. 67.The second point is that it was made known to the prosecution that the defence case would be presented on the alternative basis, but it chose not to incorporate this aspect of the defence case as part of the prosecution case. It is complained that the judge should not have left open to the jury the alternative basis and so widened the scope of the prosecution case. 68.The third point is that the original prosecution case and the alternative basis were starkly different and could have given rise to a different defence to D1. As a result, D1 was not given the opportunity to put forward a defence against the alternative basis. It is argued that under the alternative basis there was a potential defence available to D1 to challenge the element of dishonesty. It is submitted that Ms Vanky Chung, to whom it was alleged the false representations were made, was not cross-examined by the applicants on the elements of “dishonesty”, “intent to defraud” or “inducement” in the context of the alternative basis. Nor was D1 cross-examined by the prosecution on these elements in order to address the state of mind of the applicants. 69.Mr Cheung, for D2, echoes the arguments advanced on behalf of D1 in relation to Count 2, on which D2 was convicted. He complains that the prosecution in its closing address was allowed to leave to the jury to consider a verdict on the fraud counts on a different basis to the one on which it had opened. He submits that this was “an important change of the factual basis of the prosecution case.”[49] It was acknowledged by Mr Cheung that a trial judge has power to direct a jury on a basis different from that presented by the prosecution, but that such power must not be exercised unless the different basis is open on the indictment and the evidence; the parties have been given the opportunity to address the trial judge before that course is taken; and there is no disadvantage or prejudice caused to the accused. In support of these principles, he cites the case of Hau Tung Ying v HKSAR.[50] 70.Mr Cheung further submits that the prosecution position at the conclusion of the trial was that it would not seek a conviction on the alternative basis, but prosecuting counsel in his closing address, while not accepting the different basis that Mr Ip and Mr Chan were involved, said that a fraud was still practiced on a public company. It is complained that the prosecution invited the jury to convict the applicants on the alternative basis and the judge gave directions to the jury to that effect. 71.Mr Cheung finally submits that D1 was not asked questions about her state of mind as to the involvement of Mr Ip and Mr Chan in addressing the element of dishonesty. 72.It is complained by Mr Lee, for D3, that D3’s decision not to give evidence might have been different if the prosecution case was allowed to proceed on the alternative basis, and as D3’s case relied on the credibility of D1, any disadvantage caused to D1 would have also affected D3. 73.The first thing to note in addressing this ground is that D1’s evidence essentially amounted to her admitting that over a period of many years she edited the payroll details on the online payroll system of Bonjour and obtained funds from Bonjour that were deposited into the Ha bank accounts, which she then withdrew in cash. She claimed, however, that she did this on the instructions of Mr Ip and Mr Chan, members of senior management of Bonjour, who would receive the cash, and that Ms Vanky Chung, the Accounts Manager of Bonjour, was also involved in this scheme. All three denied D1’s claims. (a) The discussion between the judge and counsel 74.In seeking to support this ground, Mr Yu relies heavily on the discussions that took place between counsel and the judge about the directions he was to give to the jury. 75.In light of the nature of the prosecution case, it was of significance that D1’s defence at trial amounted to admitting she falsified payroll data of Bonjour and misappropriated company funds, albeit on the instructions of members of the senior management of the company. Naturally, this became the subject of discussion in terms of the directions to be given to the jury, particularly in respect of the money laundering counts. It is apparent from the following exchange between Mr Leung and the judge, that Mr Leung fully understood that the prosecution case was that D1 was the sole culprit of the frauds (together with D2 during the period of Count 2) and it was Mr Leung who raised the notion of the prosecution relying on an alternative basis for conviction of the money laundering counts because the misappropriated monies belonged to a public company and were therefore the proceeds of an indictable offence. 76.The discussion between Mr Leung and the judge was as follows:
77.Mr Cheung, trial counsel for D2, endorsed Mr Leung’s submission. He said:
He went on to explain:
78.Trial counsel for D3, extrapolated from this discussion that D1 had admitted a crime but had not been given the opportunity to plead guilty to it. He said:
79.Clearly, from this discussion, the issue of an alternative basis was first raised by Mr Leung and specifically in respect of a conviction on the money laundering counts. It was noted that the monies that had been misappropriated belonged to a publicly listed company, so in that sense the monies were the proceeds of an indictable offence. However, Mr Leung argued that the monies were the proceeds of a theft against a public company and not the fraud as stipulated in Counts 1 and 2. He sought to rely on this distinction to contend that the wrong criminal offence had been particularised as the predicate offence of the money laundering counts. He complained that the prosecution should not be allowed to rely on this alternative basis in respect of the money laundering counts. 80.This led to a general discussion about the fraud counts and how the judge should direct the jury in light of the defence case. 81.The issue arose whether the jury could convict on the alternative basis if the jury did not believe Mr Ip and Mr Chan. Prosecuting counsel pointed out that he had not opened the case on that basis and he seemed to suggest that a conviction on the fraud counts would not be available although he qualified his position after further discussion.[55] 82.The judge questioned prosecuting counsel as to what would follow if D1’s evidence was accepted about the role of Mr Ip and Mr Chan directing the transactions to take place. In response, prosecuting counsel said that there was still a false representation that the payroll information was true and correct and would involve dishonest approval from management.[56] It was in this context, the judge asked what direction should be given to the jury.
83.After the above exchange, Mr Leung asked the judge for time to take instructions from D1 as to whether there was a change of plea, and raised the question that if the jury found Ms Vanky Chung knew about the fraud, the representation could not be false. The judge responded that it could still be a false representation but it would be difficult to prove that the inducement had effect.[58] 84.After further discussion, the judge informed counsel that he proposed to direct the jury on this narrow issue as follows:
85.Later that morning, Mr Leung informed the judge that the prosecution had rejected the offer for D1 to plead guilty on the alternative basis, and that instructions had to be taken as to whether or not the element of dishonesty would be challenged.[60] The case was then adjourned to the afternoon. 86.Mr Leung noted that an offer by D1 to plead to the offences on the basis that she was instructed to do what she did had been rejected by the prosecution. Mr Leung then acknowledged that bearing in mind the directions of the court he accepted that if the jury were to find that what D1 said “may be true, it still amount to an offence and that is -- we would not dispute it would be dishonest.” He immediately added that on this alternative basis he needed to take instructions from his client as to whether he should challenge the element of dishonesty.[61] (b) The closing addresses 87.Central to the complaint under this ground is what prosecuting counsel said in his closing address:
88.It is complained that by these remarks, prosecuting counsel had shifted his case and was inviting the jury to convict on an alternative basis. These remarks have to be read in context. Immediately before prosecuting counsel made them, he said:
89.Prosecuting counsel in his closing address invited the jury to find that D1 and later together with D2 defrauded Bonjour through the false representations alleged in the fraud counts. The impugned remarks of prosecuting counsel were very general and related to the fact on D1’s own admission she was dishonest. The closing addresses of D1 and D2 overshadowed the remarks of prosecuting counsel and went considerably further. 90.In light of the evidence of D1, having essentially admitted she had misappropriated funds of the company, Mr Leung, for D1, addressed the matter as follows:
91.As best as I can understand the comments of Mr Leung, it was he who highlighted to the jury that D1, on her own case, raised for consideration whether she was stealing from the company, stating to them that the prosecution case was being put on an alternative basis. He said:
92.From the latter comments of Mr Leung in this passage, it is clear that he understood that the prosecution were maintaining that D1 through her false representations to Ms Vanky Chung, committed a fraud on Bonjour. It was simply not correct to assert that the alternative basis was the prosecution case. 93.Mr Cheung, for D2, made similar remarks to the jury in his closing address:
94.Whatever may have been said by counsel in their closing addresses, the judge made sure the jury were put on course and not distracted by this somewhat artificial point about the alternative basis. (c) The judge’s summing-up 95.Mr Yu and Mr Cheung complain that the judge’s comments in relation to D1’s evidence presented an alternative basis on which the jury could convict them of Counts 1 and 2. When examining what the judge actually said, it is clear that he did not direct the jury that they could convict D1 and D2 on a basis other than as particularised in the two counts. The judge’s comments were as follows:
96.There is nothing in what the judge said to the jury that amounted to putting an alternative basis for conviction of D1 and D2 in respect of Counts 1 and 2. All that he said to the jury was that they should take into account D1’s evidence in determining whether she had made the false representations alleged in Counts 1 and 2. I should add that throughout his summing-up, the judge emphasised with the jury that they had to be satisfied of the ingredients of the two fraud counts, and that is evident even from the passages complained about by D1 and D2. (d) No alternative basis 97.It is complained that prosecuting counsel in his closing address sought to depart from the original prosecution case and seek a conviction against the defendants on an alternative basis. The alternative basis arose from D1 admitting that she falsified the payroll data and misappropriated funds of the company, although claiming she did so on the instructions of senior members of management. It is complained that the prosecution shifted its case and sought a conviction against D1 and D2 in respect of the two fraud counts on the basis that D1 admitted to stealing monies from the company. In my view, there is no substance to these complaints. 98.As the case developed, principally by D1’s evidence, the issue for the jury was whether Mr Ip and Mr Chan were involved as claimed by D1. The jury by its verdict clearly rejected the evidence of D1 as to the involvement of Mr Ip and Mr Chan, and were satisfied that she perpetrated this fraud together with the involvement of her family members. 99.The discussion that took place and the comments made by the prosecution in its closing address simply related to the fact that D1 had given evidence in which she acknowledged that she had falsely transferred company funds to the Ha bank accounts. 100.Prosecuting counsel’s remarks in his closing speech need to be considered in their proper context. First, prosecuting counsel emphasised throughout his closing address that a conviction should be found based on the evidence and satisfying the ingredients of the offence as particularised in Counts 1 and 2. The impugned comments were in essence an acknowledgement that D1 accepted the monies had been misappropriated from the company. Secondly, prosecuting counsel’s comments should also be considered in light of the comments made by defence counsel for D1 and D2 in their closing addresses. Both counsel went considerably further in what they said on this subject, highlighting that D1’s admission related to Counts 1 and 2 and that the prosecution were inviting the jury to convict on an alternative basis when that was not the case. 101.It is contended by D1 and D2 that the judge allowed the prosecution to invite the jury to consider a verdict on Counts 1 and 2 on a different factual basis from the one the prosecution opened to the jury. It is submitted that in discussion with the judge about his directions to the jury his proposed remarks were inviting the jury to consider two different bases on which they could return a verdict in respect of Counts 1 and 2. The judge’s proposed remarks and what he told the jury in his summing-up did nothing of the sort. He simply invited the jury to consider D1’s evidence in respect of the prosecution case as particularised in the two counts. He did not direct the jury to convict D1 and D2 of Counts 1 and 2 on an alternative basis. 102.The key issue in this ground of appeal is what the judge told the jury in relation to this matter in his summing-up. There is nothing inappropriate or inaccurate in what the judge said to the jury about taking into account D1’s evidence when they considered the particulars alleged in Counts 1 and 2. D1 had given evidence that she had edited the payroll data and the monies derived from this falsification of the records was transferred into her family’s bank accounts, which she would withdraw in cash. She claimed she did this on the instructions of Mr Ip and Mr Chan and after she withdrew the cash she would pass it on to them. She also said that Ms Vanky Chung was a party to this arrangement. They all gave evidence denying any knowledge or involvement in the arrangement as alleged by D1. This was the key issue for the jury to decide. 103.The judge emphasised throughout his summing-up to the jury that they had to be sure that D1 falsely represented to Ms Vanky Chung that the salary payment information was true and accurate and the management had agreed and approved the overall payroll amounts. The judge’s direction met no resistance from counsel when it was suggested to them. On this key issue the judge was simply telling the jury that they could take into account D1’s evidence, which was a correct direction to the jury in the circumstances. 104.It was D1’s case that members of senior management were behind the arrangement and Ms Vanky Chung was also involved and therefore she did not commit the fraud as alleged against her. On the other hand, it was the prosecution case that the members of senior management and Ms Vanky Chung were not involved and it was D1 who orchestrated the fraud and involved D2 and D3 in the process. The prosecution did not shift its case, it simply accommodated the evidence that emerged from D1, who essentially admitted that she falsified payroll records and misappropriated company funds. It was obviously not something that took the defence by surprise as it came from D1 herself. The complaint that D1, D2 and D3 were disadvantaged by the alternative basis is unsubstantiated. (e) The element of dishonesty 105.It is difficult to understand the submission by both Mr Leung and Mr Cheung that D1 had not been examined as to whether she was dishonest. By D1’s evidence, she admitted that she falsified payroll data and effected the misappropriation of company funds. Of course, there was no reference by the prosecution in its opening address to the jury of the involvement of Mr Ip and Mr Chan in the alleged frauds, because it was not their case that they were involved. The prosecution response to the defence accusation that members of senior management were involved was that it was false. Mr Ip and Mr Chan refuted any involvement in the frauds as claimed by D1. In cross-examination of D1, prosecuting counsel challenged her evidence that she committed the frauds at the behest of Mr Ip and Mr Chan.[72] It was put to D1 that the monies from the fraudulent scheme went to her benefit and that of her family.[73] 106.In addition, the judge gave clear and precise directions to the jury that they had to consider the element of dishonesty and explained the test they had to apply. When addressing the element of deceit in the fraud counts, he said:
107.I am not persuaded that this ground of appeal is reasonably arguable. The directions on the false representations 108.It is complained by D1 and D2 that it was not the prosecution’s case that the false representation that the management of Bonjour had agreed and approved the overall payroll amounts (the 2nd particular) was explicit, or that the false representation that the salary payment information produced by D1 for Bonjour was true and accurate (the 1st particular) was an implied representation derived from the previous representation. 109.D1 further complains that this matter was only raised by counsel in discussion with the judge prior to closing speeches. The judge noted the 1st particular was implied by the relevant applicant handing over the USB drive with the payroll information to Ms Vanky Chung and representing it had been agreed and approved by management (the 2nd particular). However, when the judge directed the jury that the 1st particular was implied from the 2nd particular, he did so without mentioning the handing over of the USB drive to Ms Vanky Chung. It is complained that this resulted in prejudice to D1 because Ms Vanky Chung was not cross-examined on the basis that the 1st particular was an implied false representation. 110.It is also complained by D1 that the judge’s directions on the false representations were insufficient and that he failed to include a Kevin Brown direction in dealing with the two particulars. 111.The complaint that the 1st particular was said to be explicit and the 2nd particular implicit is fatuous. It did not matter whether they were explicit or implicit, the issue was whether D1 and D2 made false representations as alleged. 112.D1’s evidence was that the salary information was not true and accurate. The judge summarised the evidence to the jury in respect of D1 and D2 representing to Ms Vanky Chung that Mr Ip had approved the payroll data:
113.The jury would have undoubtedly understood that the 1st particular was implicit from the 2nd particular. The 2nd particular on its own proved the offence if the jury had accepted the evidence of Mr Ip, Mr Chan and Ms Vanky Chung. The jury obviously accepted their evidence as indicated by their verdicts. 114.The eponymously named Kevin Brown[78] direction simply does not arise. It has been held that where several false representations are alleged and it is clear from the manner in which the trial has been presented that all the representations stand or fall together, a Kevin Brown direction will not be necessary.[79] It was neither here nor there that the 1st particular was implicit, instead of explicit, and clearly the two particulars stood and fell together. 115.I am not persuaded that this ground of appeal is reasonably arguable. The unsustainability of the money laundering convictions 116.It is submitted by D1 and D2 that in the event their appeals against conviction in respect of the fraud counts are allowed, the jury could not have been sure that D1 knew, and in the case of D2, knew or had reasonable grounds to believe, that the property with which they dealt with in the money laundering counts represented the proceeds of an indictable offence. It would therefore follow that their appeals against conviction on the money laundering counts must also be allowed. 117.Given that the prosecution conducted its case on the basis that the proceeds in the money laundering counts originated from the frauds as alleged in Counts 1 and 2, the respondent accepts that the case against D1 was that she knew the nature of those monies and should the appeal against conviction in relation to the fraud counts be allowed, D1’s conviction of the money laundering counts should also be allowed.[80] 118.The respondent also accepts that the same applies to D2 in respect of Count 2, because that was the period during which D2 had attained the position of Assistant HR Manager and together with D1 submitted the USB drive to Ms Vanky Chung and made the false representations as alleged. It is acknowledged that for this period, the prosecution case proceeded on the basis that D2 knew the monies deposited had originated from the fraud that he and D1 committed.[81] However, the same did not apply to the period of Count 1 because the prosecution relied on the limb of reasonable grounds to believe in proving the money laundering count based on the substantial aggregate sums of monies deposited into his bank accounts, the modest increases in his and D1’s salaries during that period, and the several bank accounts of D2 that were involved.[82] 119.The respondent’s response to this ground of appeal, in my view, is correct. However, this ground is purely academic, as I do not consider the ground challenging the convictions on the fraud counts to be reasonably arguable. It follows that this ground too is not reasonably arguable. The failure to sum up evidence in favour of D3 120.Mr Dick Lee, on behalf of D3, complains that the judge failed to summarise the evidence of D1 that was relevant to D3’s case, and failed to direct the jury on how D1’s evidence was to be used in respect of D3’s “belief, perception or prejudice”, when considering the mental element of reasonable grounds to believe in respect of the money laundering counts. 121.The respondent disagrees that the judge failed to summarise the evidence relevant to D3’s case, and submits that the references to the summing-up by Mr Lee in his written submission are incomplete.[83] The respondent points to numerous other instances where the judge addressed the jury on the evidence that was relevant to D3, such as D3’s age and work history; how D3 came to part with his bankcard that operated his two bank accounts to D1; how D1 exclusively controlled and used those two bank accounts without telling D3; and how D1 explained certain deposits, transfers, use of cheques and credit card payments that took place in D3’s bank accounts.[84] 122.In my view, the judge gave a very detailed summary of D1’s evidence and appropriately addressed that part of her evidence that concerned D3. 123.In his summing-up to the jury, the judge explained to them that he would remind them of those parts of the evidence which appeared to him to be significant, but added that they could disregard evidence he had mentioned or emphasized and take into account evidence they considered important.[85] He also reminded them when considering the case against the applicants to take into account the whole of the evidence, particularly the evidence concerning each of them.[86] 124.In respect of the facts and circumstances known to D3 that might have affected his belief whether the money in his bank accounts were the proceeds of crime, his defence was that he knew nothing about the monies transferred into the accounts. D3 did not give evidence and therefore no account was given by him about his personal belief. The judge explained to the jury:
125.Whilst the judge noted that D2 and D3 did not testify and there was “no evidence from them of their belief, perception or prejudice, if any,” in respect of D1, he went on to summarise the evidence that was before the court in respect of their good character and personal circumstances.[88] He also pointed out to the jury that in relation to the money laundering counts, they were entitled to take into account everything they had heard about D2 and D3.[89] 126.The judge continued his directions to the jury by comprehensively addressing the individual counts and the evidence. He provided to the jury written directions in respect of the fraud counts and the money laundering counts.[90] In the written directions the judge drew the jury’s attention to the mental element of “knowing or having reasonable grounds to believe”. After explaining the element of “knowing”, he went on to address “reasonable grounds to believe” and stated:
127.In the course of addressing the jury on the written directions in respect of the case against D3, the judge emphasised that they should take into account D3’s “beliefs, perceptions or prejudices” when considering the alternative mental element of “reasonable grounds to believe”. He said:
128.The judge set out the respective cases of the prosecution and the defence in relation to Counts 4 and 5 as follows:
129.Having explained to the jury the notions of belief, perception and prejudice, the judge made it clear to them that they were to take into account D3’s “belief, perception and prejudices”, when determining whether or not he had reasonable grounds to believe that the monies were the proceeds of crime. 130.When the judge made reference to the Court of Final Appeal decision in his summing-up, he was referring to HKSAR v Pang Hung Fai (2014) 17 HKCFAR 778, in which the Court said that the personal beliefs, perceptions and prejudices of an accused could be taken into account when applying the words of the statutory formulation of “having reasonable grounds to believe”. The Court added that when assessing the whole of the evidence the judge or jury can give such weight to an accused’s belief, perception or prejudice as she or he believes is warranted.[93] The judge correctly applied the law as stated at the time but since then the test for “having reasonable grounds to believe” has been reformulated in HKSAR v Harjani Haresh Murlidhar (2019) 22 HKCFAR 446, as follows: (i) What facts or circumstances, including those personal to the defendant, were known to the defendant that may have affected his belief as to whether the property was the proceeds of crime (“tainted”)? (ii) Would any reasonable person who shared the defendant’s knowledge be bound to believe that the property was tainted? (iii) If the answer to question (ii) is “yes” the defendant is guilty. If it is “no” the defendant is not guilty. 131.The subjective element of the test focuses on what facts and circumstances were known to the defendant that might have affected his belief as to whether the property was the proceeds of crime. It is clear from the judge’s summing-up that he directed the jury’s attention to the subjective element of the test and emphasised that they should take into account the facts and circumstances that were known to D3 when determining whether he had “reasonable grounds to believe”. D3 did not give evidence, and instead relied on the evidence of D1 that he knew nothing about the funds deposited in his bank accounts. To this extent, D3’s case depended on whether D1’s evidence was accepted by the jury. 132.There is no substance to the criticism that the judge did not adequately address this issue in the circumstances of the case. I consider this ground of appeal not to be reasonably arguable. 133.D3 also complains that his convictions on Counts 4 and 5 are unsafe and unsatisfactory but with the rejection of his other grounds of appeal there is no basis to submit that this ground is reasonably arguable. Conclusion 134.For the reasons I have given, I do not consider that the grounds of appeal are reasonably arguable and leave is therefore refused to D1, D2 and D3. 135.The applicants are reminded of their right to renew their applications for leave to the Court of Appeal, but they are also informed of the consequences of doing so, which may include a direction for any loss of time spent in custody pending their appeal, if the Court were to come to the view that there was no justification for the renewal of their applications.
Ms Vinci Lam, DDPP and Ms Claudia Ng, SPP of the Department of Justice, for the Respondent Mr Selwyn Yu, SC leading Mr Leung Chun Keung and Mr Ryan Law, instructed by Eric Yu & Co, assigned by the Director of Legal Aid, for the 1st applicant (for conviction only) The 1st applicant appeared in person for sentence Mr Cheung Kam Wing, Adonis, instructed by Ivan Tang & Co, assigned by the Director of Legal Aid, for the 2nd applicant (for conviction only) Mr Lee Kwok Fu, Dick, instructed by Francis Kong & Co, assigned by the Director of Legal Aid, for the 3rd applicant (for conviction only) The 3rd applicant appeared in person for sentence [1] Fraud, contrary to section 16A of the Theft Ordinance, Cap 210. [2] Dealing with property known or believed to represent proceeds of an indictable offence, contrary to sections 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap 455. [3] See the judge’s overview on Counts 1 and 2 at Appeal Bundle (AB), 182I-185B and on Counts 3, 4 and 5 at AB, 187J-189B. [4] AB, 1 and 2. [5] AB, 2. [6] AB, 2 and 3. [7] AB, 3 and 4. [8] AB, 15, Admitted Facts, at [3]-[5]. [9] AB, 16, Admitted Facts, at [6] and [7]. [10] AB, 23-55, Admitted Facts, at [37]-[39]. [11] AB, 16, Admitted Facts, at [8]. [12] AB, 22 and 23, Admitted Facts, at [36]. See also Annexure 14, AB, 125-134. [13] AB, 29-97, Annexures 1 to 9. See also AB, 164J-165F. [14] AB, 177T-180A. [15] AB, 246A-I. [16] AB, 247B-248O. [17] AB, 250M-252D. [18] AB, 252D-R. [19] AB, 255E-256G. [20] AB, 260Q-261C. [21] AB, 261I-J and 273N-Q. [22] AB, 259K-260O. [23] AB, 269A-U. [24] AB, 270A-271D. [25] AB, 274S-277G. [26] AB, 271M-274R. [27] AB, 189L-202T. [28] AB, 203C-215E. [29] AB, 215G-230Q. [30] AB, 194M-S. [31] AB, 192B-E. [32] AB, 189L-202T. [33] AB, 200K-201C. [34] AB, 208M-U. [35] AB, 212B-J. [36] AB, 224A-C and 226U. [37] AB, 224N-225E. [38] AB, 227R-228H. [39] For example, it was not put to Ms Vanky Chung that D1 had given cash to her and told her it was for Mr Ip (AB, 230H-K, 249C-H and 261A-C). It was not put to Mr Ip that he had signed the “red and black book” reflecting the transactions that he asked D1 to do, or to Mr Chan that D1 had inquired about the “red and black book” (AB, 252N-R); D1 said she made a written record of the housing allowance signed by Mr Ip but did not make a copy – she showed it to an auditor but could no longer recall who it was – it was not put to Mr Ip that he had signed such a document (AB, 260B-I); it was not put to Mr Ip that he offered to compensate D1 for her low salary once her bankruptcy order had been discharged and that he made such payments (AB, 260P-Q); it was not put to Chau Kam-chee that a wrongful payment of $79,000 to him was returned to the company by him making a $50,000 cash payment to Ms Vanky Chung in D1’s presence (AB, 271E-K). [40] AB, 176H-177A. [41] AB, 284-299, the judge’s reasons for sentence. [42] AB, 1838D-1839B. [43] AB, 22-25, Admitted Facts, at [37]-[39]. [44] AB, 164J-165F. [45] D1’s Amended Perfected Grounds of Appeal dated 2 June 2020. [46] D2’s Amended Perfected Grounds of Appeal dated 16 July 2020. [47] D3’s Amended Perfected Grounds of Appeal dated 4 May 2020. [48] D1’s Amended Perfected Grounds of Appeal, at [6]-[8]. This is how the “alternative basis” was described by D1 in the Amended Perfected Grounds of Appeal but was not articulated in D1’s Written Submissions dated 16 July 2020. [49] D2’s Written Submission, at [17]. [50] [2011] 2 HKLRD 782, at [42]-[46] and [53]. [51] AB, 1876S-1880K. [52] AB, 1880T-1881C. [53] AB, 1883Q-1884O. [54] AB, 1885A-J. [55] AB, 1886A-1887H. [56] AB, 1887G-1889K. [57] AB, 1886D-P, 1889M-R. [58] AB, 1890Q-1891H. [59] AB, 1902L-Q. [60] AB, 1903S-1904S. [61] AB, 1904D-S. [62] AB, 439B-F [63] AB 438C-439A. [64] AB, 443J-Q. [65] AB, 486H-K. [66] AB, 486N-487J. [67] AB, 534E-535I. [68] AB, 546B-P. [69] AB, 177T-178G. [70] AB, 183D-P. [71] AB, 184A-L. [72] AB, 1684Q-1843F. [73] AB, 1843B-G. [74] AB, 181K-S. [75] AB, 156F-K. [76] AB, 182O-183C. [77] AB, 224O-225J. [78] R v Kevin Brown (1984) 79 Cr App R 115, 119. See also HKSAR v Chen Keen (2019) 22 HKCFAR 248. [79] R v More (1988) 86 Cr App R 234. [80] AB, 439I. [81] AB, 160A-H, 279G-L (summing-up), 439G-U (prosecution closing speech). [82] AB, 277P-279F. [83] See D3’s Written Submissions at [31] and [32], which delineates a considerable body of evidence in respect of D3, even though it is incomplete. [84] AB, 178T-179H, 249K-250E, 274S-276U. [85] AB, 173A-H. [86] AB, 173J and 178U. [87] AB, 178G-N. [88] AB, 178G-179S. [89] AB, 178U. [90] AB, 180J-K. The money laundering written directions were marked MFI-2. They were not included in the Appeal Bundle. [91] AB, 186F-T. [92] AB,188A-189B. [93] At [83]-[85]. |
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