HKSAR v. Chen Keen (Alias Jack Chen) and Others

HCCC 309/2019

[2021] HKCFI 2308

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

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BETWEEN

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Before:  Deputy High Court Judge Bruce SC in Court

Date of Hearing:  21 June 2021

Date of Ruling:  6 August 2021

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RULING

APPLICATION FOR COSTS

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INTRODUCTION

1.On 15 June 2021, the Court directed that the jury in this trial be discharged.  The application for discharge made by each of the accused in these proceedings followed events on Day 57 of the trial during which Mr Kerry Joel Knight testified for the prosecution. The ruling of the Court which was published on 18 June 2021 outlines the nature of the testimony given by Mr Knight and its context.[1]  Those paragraphs are incorporated by reference into this ruling.

2.The indictment in HCCC 309/2019 is unfulfilled. The Court has been informed that the prosecution wishes to empanel a fresh jury to try the accused.

3.The accused apply for the costs of this trial. As I understand the application, the application for costs is only for the costs of the retrial. All other issues of costs in relation to proceedings which preceded the order by the Court of Final Appeal for a retrial have been determined by that Court.[2]

PRINCIPLES GOVERNING THE AWARD OF COSTS

Jurisdiction

4.There is no inherent power to award costs. The power is entirely statutory. In S-J v Tang Bun [1999] 3 HKC 647, Woo J (as Woo VP then was)  held:[3]

“It is well established law, and both parties before me accept, that a court has no inherent jurisdiction to award costs in criminal proceedings, and the power to award costs is derived from legislation: see A-G v Ip Wai Kwong [1982] HKLR 93, R v Mak Yuet Hang [1990] 1 HKLR 121, A-G v A Deputy District Court Judge [1991] 2 HKLR 507, A-G v Lam Sau Ki [1993] 2 HKC 330 and S-J v Chan Cheung Chor (HCAL 102/98, unreported).”

5.The position was confirmed by the Court of Appeal in HKSAR v Hon Ming Kong [2014] 3 HKLRD 470. In that case Stock VP giving the judgment the Court of Appeal (Stock and Yeung V-PP and Line J)  held:[4] “The starting point is that there is no power inherent in a court to award costs in criminal cases; the power, if it is to be conferred, must be conferred by statute: Attorney-General v Ip Wai Kwong [1982] HKLR 93, 96”.  This was confirmed in HKSAR v Chan Hing Kai (No. 2) [2020] 2 HKLRD 367, §3.

6.In Secretary for Justice v N [2013] 1 HKLRD 130, Macrae J[5] considered the construction of section 17 of the Costs in Criminal Cases Ordinance, Cap 492 (“the Ordinance”)  and whether a wasted costs order could be made in the context of proceedings for the return of a travel document under section 17B of the Prevention of Bribery Ordinance, Cap 201. It was held that section 17 of the Ordinance did not cover the type of proceeding under section 17B. In the course of his ruling, Macrae J observed:[6]

“25. It must be remembered that there is no general right to costs in criminal cases. The CCCO delineates in specific terms the particular circumstances in which a costs order might be made in criminal proceedings. If a party to proceedings cannot bring himself within a particular section of that Ordinance, he cannot obtain an order for costs.”

Macrae J then observed:[7]

“26. I am therefore called to construe a statute dealing with specific types of criminal proceeding in which costs orders may be made: if the specific type of criminal proceeding does not come within the Ordinance, an order for costs cannot be made.”

He later added that the Ordinance “is a criminal statute which falls to be strictly construed”[8]. I understand the notion of the Ordinance being strictly construed as meaning what was articulated in paragraph 26 of the judgment. As Mr Owen, QC submitted, there is nothing inconsistent between a strict construction in the purposive construction. The issue in any application for costs is whether the facts and circumstances upon which such an application is based fall within any of the provisions of the Ordinance. If they do not then there is no jurisdiction to award costs on that application.

7.The Costs in Criminal Cases Ordinance, Cap 492 was enacted in 1996.[9] The Ordinance drew together many provisions governing the award of costs into one piece of legislation. Some of the provisions in the Ordinance draw their inspiration from the legislation to remain for England and Wales: the Prosecution of Offences Act 1985. As will shortly appear, a construction of this Act is germane to the issues which arise in the present case.  

Principles upon which costs are awarded

8.The fundamental principle is that costs are meant to be compensatory. Section 15(a)  of the Ordinance provides:

“the costs that may be awarded by virtue of an order shall not be punitive but shall be such sums as appear to a court or a judge reasonably sufficient to compensate any party to the proceedings for any expenses properly incurred by him in the course of those proceedings, including any proceedings preliminary or incidental thereto.”

The compensatory principle thus established does not, by itself, establish liability for costs. The principle operates when liability is established by a provision under the Ordinance. The compensatory principle is, in any event, a declaratory statement of established principle.

THE BASIS OF THE APPLICATION

9.The application made by the accused is based in the alternative onto provisions within the Ordinance. The first is section 4 and the second is section 17.

Issues in relation to section 4

10.Section 4 of the Ordinance provides as follows:

“Where a defendant is not tried for an offence for which he has been indicted or committed for trial, the District Court or the Court of First Instance may order that costs be awarded to the defendant.”

Defence submissions

11.Mr Owen, QC, in his oral presentation, submitted the issue is one of construction. He contends that while it is recognised that the only bases for costs being imposed against the prosecution (or against the defence for that matter)  have to be found in the Ordinance, it is necessary to adopt a purposive approach to the Ordinance. The expression of what is a purposive approach he derives from Pollen Estate Trustee Co Ltd v Revenue and Customs Commissioners [2013] 1 WLR 3785, §24 is “the modern approach to statutory construction is to have regard to the purpose of the particular provision and interpret its language, so far as possible, in a way which best gives effect to that purpose”.

12.In deriving the purpose of the Ordinance, it is contended on behalf of the Accused that it should be viewed as a whole.  It is contended that that viewed against the general principles in section 15(a)  of the Ordinance, unless there exists a positive reason for refusing to make it order for costs, costs should ordinarily be awarded. In this regard, Mr Owen, QC relies on Chan Hing Kai (No 2) (above), §6-14 which declares that the exercise of the power to award costs to a successful appellant against conviction was in the unfettered discretion of the Court and fell to be exercised in the light of the circumstances of each case.  As a general rule, a successful defendant on appeal should be awarded his costs unless there were positive reasons for not doing so.

13.Counsel contends that in the present case the accused did not bring these costs upon themselves; and are not responsible for the consequences which ultimately resulted in the discharge of the jury.

14.It is contended that the reality of the situation is that unless the accused are awarded the costs for the proceedings to date which are a retrial ordered by the Court of Final Appeal, they will be liable for their own costs and it is further contended that such a person should only be liable for the costs of a criminal trial if:

(1)  The accused is convicted of an offence (see section 12 of the Ordinance);

(2)  Where the conduct of the accused has brought the costs on himself; or

(3)  Justice otherwise required him to bear those costs.[10]

It is contended that the underlying basis for this is that an accused person in a criminal trial does not choose to participate in the trial process. As a consequence, he should not be made to bear the costs of a process forced upon him by the state. It is contended that if you look at the circumstances in which costs might be awarded to an accused person the purpose of the Ordinance in this regard becomes clear.  Counsel for the accused contend: [11]

“This is why the Ordinance lists the variety of outcomes possible in such criminal proceedings (not tried, section 4; acquitted, section 5; partially acquitted, section 6; discharged after committal, section 7; or acquitted after appeal, section 7 - 9B). The plain and obvious purpose of the Ordinance was to ensure that a defendant forced to endure criminal proceedings brought by the state, but which proceedings did not result in conviction, would be compensated for the reasonable costs incurred in defending them.

The Ordinance went further however, recognising that even in proceedings where a defendant had to bear costs (either his own and/or the prosecution’s under section 12), there might be costs that he nevertheless should not bear. That is why section 17 gives the court jurisdiction to order costs where they have been unnecessarily or improperly incurred; and why section 18 permits wasted costs orders.”

15.Counsel for the accused contend that in understanding the purpose of section 4 it is necessary to look at the possible outcomes if an accused is committed for trial.  Those outcomes are:

(1)  The case being dismissed pursuant to section 16 of the Criminal Procedure Ordinance;

(2)  His acquittal;

(3)  His conviction; or

(4)  The accused is discharged for a variety of reasons (such as jury disagreement)  or because the proceedings were stayed or adjourned without a future date being set and not to be proceeded with (this is encompassed within the language of an order that the indictment or charge sheet lie on the file not to be proceeded with without leave).

16.Section 7 of the Ordinance is necessary because of the way in which section 16 of the Criminal Procedure Ordinance is drafted.  As it may be seen in the section it covers a multitude of events including the non-filing of an indictment under section 15 of the Criminal Procedure Ordinance as well as an application for discharge under section 16(1)(b)  on the basis, to paraphrase the provision, that there is no prima facie case on the papers. The real reason section 7 of the Ordinance is necessary is because an application under section 16(1)(b)  of the Criminal Procedure Ordinance can only be made “after the filing of the indictment and prior to his arraignment thereon” and thus although the outcome of a successful application under section 16(1)(b)  is a deemed acquittal, it does not fall within the scope of section 5 of the Ordinance because that deals with an acquittal after trial. The underlying (and perfectly reasonable)  assumption of section 7 is that a trial does not begin until arraignment. As noted earlier in this paragraph, once an indictment is filed and arraignment occurs, there can be no discharge under section 16(1)(b).

17.Those representing the accused contend that it is important to understand the word “tried” in its legal context.  It is contended that the use of the past participle of the verb “to try” necessarily envisages the conclusion of the trial process such that the accused can properly be regarded as having been “tried”.  It is contended that an accused person who is put on trial but the process is not concluded was not tried.  It is contended that for a person to be characterised as “tried”, there would have to be a verdict.  In short, it is contended that section 4 of the Ordinance is not limited to situations where an accused has been engaged in the trial process but that process has not reached the end of the trial so as to ascertain his guilt or innocence. That construction of the Ordinance dovetails, so those representing the accused contend, with costs following an acquittal after trial (section 5)  or costs payable to the prosecution when convicted (section 12). It is noted by those representing the accused that section 12 makes no mention of the requirement for a trial because an accused person may plead guilty without having a trial. It is contended that an award of costs under section 12 could be made against a person who pleaded guilty and have been convicted as a result thereof. Accordingly, it is contended that this leaves section 4 to cater for all of the circumstances in which a trial does not conclude with a verdict.  It is contended that this includes where juries are discharged or where proceedings are stayed or where proceedings are ordered to lie on the file.

18.Accordingly, it is contended by those representing the accused that the correct meaning of the words “where a defendant is not tried for an offence” thus means “where a trial is not concluded by the entering of a verdict”.  It is contended that this meets the justice of the case.

19.Two authorities were cited in connection with the construction of section 4 of the Ordinance.  The first is HKSAR v Lee Ming Tee & Anor [2003] 1 HKC 174. This was a decision following an application for costs following a 76-day trial which was aborted just before the jury retired to consider its verdict.  The termination of the proceedings was not the fault of the defendants or the prosecution. A new trial was ordered.  The cause of the late discharge was the non-disclosure by an expert witness called by the prosecution of certain pertinent matters.  The witness had not disclosed these matters to the prosecution. Seagroatt J held that there was no statutory provision permitting costs including section 4 of the Ordinance.[12]  Nevertheless, Seagroatt J recognise the injustice of taking an expensive trial to almost a jury verdict and the accused having to face a further trial.  In essence, the reasoning of Seagroatt J appears to be that there is an unfettered jurisdiction to award costs in England and Wales and by reason of section 9(3)  of the Criminal Procedure Ordinance, Cap 221 which enjoins a Hong Kong court to follow the practice and procedure of the courts of England and Wales that he could make such an order.

20.Those representing the accused argue that there was no real consideration of section 4 of the Ordinance in Lee Ming Tee & Anor (above). They contend that the reason for this is that counsel for the accused in that case conceded that section 4 of the Ordinance did not apply. There was no real examination of the ambit of section 4 by Seagroatt J.

21.Those representing the accused argue that the better view is that of Henry J in R v Central Criminal Court ex parte Lord Spens [1993] COD 194, also known as R v Spens.

Prosecution submissions

22.The prosecution submissions agree that the Costs in Criminal Cases Ordinance only gives a Court jurisdiction to award costs where a provision in the Ordinance, properly construed, permits such a course. In other words, it is contended by the prosecution (in common with the defence)  that there is no inherent power to award costs.

23.The contention of the prosecution is that the jurisdiction granted to a Court is to make an award of costs is when proceedings have been brought to finality “whatever that means”.[13]  In this regard, the prosecution supports the analysis of Seagroatt J in Lee Ming Tee & Anor (above)  that section 4 of the Ordinance has no application to the present position.

24.It was argued that as section 17 of the Ordinance is the only section which deals with liability for costs arising at any time during the course for trial, it was argued that this narrows the field for section 4. The essence of the prosecution submissions is as follows: [14]

“These defendants are in the course of being tried. There is no question of them not being tried. To say someone is not tried does not mean that their trial is not yet concluded but that a decision has been taken, or a course of conduct adopted, that results in them not being tried at all. To suggest that the use of the past tense in s.4 indicates that it extends to those, who whilst being tried, are not yet “tried” in the sense of the trial being concluded is unduly stretching the language of the statute which could easily have used the language of s.17.

25.The prosecution submitted that the concluding event in section 4 of the Ordinance is when the jury is sworn. After that, it was submitted by the prosecutions, section 4 has no more work to do.

ANALYSIS

26.The Ordinance demands a purposive construction. The authority cited by those representing the accused[15] aptly puts the modern approach to the purposive construction. To this should be added section 19 of the Interpretation and General Clauses Ordinance, Cap 1 as follows:

“An Ordinance shall be deemed to be remedial and shall receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Ordinance according to its true intent, meaning and spirit.”

Section 19 is the statutory assertion of the requirement to give legislation a purposive construction. My understanding of the rules of construction of the meaning of a word or phrase is summarised by the Court of Appeal of South Australia in Conant v R [2021] SASCA 56. Their Honours (Lovell, Doyle and Livesey JJA)observed:[16]

“In assigning legal meaning to the words of a provision, the court starts with a consideration of the ordinary and grammatical meaning of the words taking into account both context and legislative purpose. Consideration of the context for the provision is undertaken at the first stage of the process of construction. Consideration of context in its widest sense includes surrounding statutory provisions, what may be drawn from other aspects of the statute and the statute as a whole. The purpose of the statute informs the interpretive task throughout. The text of the statute is important, for it contains the words being construed, and a very general purpose may not detract from the meanings of the words. The consequences of giving a provision its literal, grammatical meaning, may lead the court to adopt a construction that departs from the ordinary meaning of the words.”

27.The issue is the application of those principles to the interpretation of the Costs in Criminal Cases Ordinance.  There are a number of levels to this.  The first is the compensatory principle asserted in section 15(a)  of the Ordinance which is cited above.  However, how that principle operates depends on a variety of circumstances.  It operates differently according to who may be entitled under various aspects of the statute to costs. Speaking generally so far as prosecution costs are concerned the discretion to award costs to the prosecution is conditioned upon the basis that prosecutions are instituted and maintained for public purposes and generally the accused should not be required to compensate the prosecution for a successful prosecution. In contrast, as those representing the accused submit, in criminal proceedings, an accused person does not come voluntarily to court and if that person is successful in resisting those criminal proceedings costs or to follow the event unless there are positive reasons to exclude them.

28.In considering this first level of analysis there are also provisions which are there to compensate one side or the other where there has been an unnecessary or improper act on the part of one side (see section 17 of the Ordinance)  or the conduct of the legal or other representatives concerned of a party has resulted in wasted costs (see section 18 of the Ordinance). Although these provisions have a compensatory basis, it is fair to say that they are there to deter the kind of conduct which might justify an order under one section of the other.

29.The next level of analysis is to recognise that some of the provisions of the Ordinance are not new. In part (but only in part)  the Ordinance consolidates a number of provisions for costs in other legislation. A further but closely related level of analysis is that generally speaking it is a good idea to have at least most of the cost provisions and, arguably, all of the important costs provisions in one piece of legislation so that in addition to any benefit in terms of ease of finding such provisions, they receive at least an approximately equivalent interpretation. There are still in the statutes of Hong Kong bits and pieces of costs legislation not in the Costs in Criminal Cases Ordinance.[17]  It is in this context that it is appropriate to note that some of the language of the Ordinance replicates the Prosecution of Offences Act 1985. The replication in Hong Kong legislation of language from legislation elsewhere in the world, particularly the Commonwealth is an indication of a desirability of consistency of interpretation and a desire to consider authorities which have construed the relevant language in other jurisdictions (suitably adapted for local conditions). Indeed, section 16(2)  of the Prosecution of Offences Act 1985 is the obvious progenitor of section 4 of the Ordinance. As will shortly appear, there are some English authorities which interpret section 16(2)  which are critical to the interpretation of section 4.

30.It is common ground that unless a party can come within a particular provision of the Ordinance then the other party to the proceedings cannot be liable for costs. However, that is not to say that each provision should be interpreted in isolation. This is certainly so under the Part II - Defence Costs. Section 3 deals with the various circumstances in which it is appropriate to consider costs to the defence in summary proceedings. Summary proceedings are not just a mirror of proceedings on indictment and, both substantively and procedurally have very different features to proceedings on indictment. The obvious example of that is a review of a decision by a magistrate under section 104 of the Magistrates Ordinance, Cap 227. As has been earlier noted, section 3 of the Ordinance is not the exclusive repository of power to award costs in summary proceedings. The Magistrates Ordinance has numerous provisions and there is at least a respectable argument that many of them could reasonably have been included in section 3 of the Ordinance. The point of this is that section 3 could, on no account, be considered a code for costs or a provision which covers every eventuality in summary proceedings. However, it is important in understanding the relationship between section 3 and the balance of the section in Part II in relation to defence costs that section 3 is by no means a full statement of the circumstances in which costs might be ordered in summary proceedings.

Issues in relation to section 4

31.As to proceedings on indictment, leaving aside section 4 of the Ordinance, the Ordinance provides costs in the following circumstances:

(1)  acquittal after trial: section 5;

(2)  partial acquittal: section 6;[18]

(3)  discharge under section 16 of the Criminal Procedure Ordinance;[19]

(4)  defence costs on appeal to a magistrate: section 8;[20] and

(5)  defence costs on appeal before the Court of Appeal in the circumstances specifically enumerated: section 9;

(6)  defence costs on appeal by way of case stated before the Court of Appeal: section 9A;

(7)  defence costs on unsuccessful application by prosecutor for a certificate for the purposes of an appeal to the Court of Final Appeal before the Court of Appeal or Court of First Instance: section 9B.

32.It is correct to say that a number of the provisions under Part II of the Ordinance have been inserted after the initial enactment of the Ordinance. This is significant because the prosecution argued that there may well be a gap in relation to costs in the circumstances in which these accused find themselves.  If so, the prosecution argues that this may well be an area for legislative intervention. It is contended that one of the consequences of this is that in interpreting the Ordinance, care should be taken not to, in effect, shoehorn circumstances into, say, section 4 where it was not intended that they come within that section. Care should be taken in accepting that argument uncritically because some of the provisions which have been, in effect, tacked on to the Ordinance were issues which existed before the enactment of the Ordinance. The most glaring (but not the only)  example of that is the costs provisions in relation to a deemed acquittal under section 16 of the Criminal Procedure Ordinance. Section 16 was inserted into the Criminal Procedure Ordinance in 1983 which predates the enactment of the Costs in Criminal Cases Ordinance. However, that begs the question of what is the correct construction of section 4. Plainly, if the circumstances facing the accused in this case is not an event covered by section 4 then clearly the only remedy would be legislative intervention which would be cold comfort for the accused.

33.The prosecution argued that as section 17 of the Ordinance deals with costs arising at any time in the course of the trial, by implication, narrows the construction of section 4. In a sense, that is right because the plain implication of section 17 is that the conduct which would be the subject of an order under that section would not be a topic which would give rise to costs under section 4. However, section 17 deals only with a limited set of circumstances: unnecessary or improper acts. That might carry with it the implication that although those are excluded from consideration under section 4, it means that section 4 has a good deal more work to do because there are circumstances other than unnecessary or improper acts which might call for the imposition of costs.

34.The decision of Seagroatt J in HKSAR v Lee Ming Tee & Anor (above)  appears to adopt a construction of section 4 which would not permit costs to be awarded in the present circumstances. As already noted, the issue was whether costs could or should be awarded following a stay of proceedings after a trial lasting many months which, by definition, did not reach a verdict. A fair reading of the judgment is that Seagroatt J was plainly influenced by the concession of leading counsel that section 4 could not avail the accused in that case. The basis on which costs were ordered appears to have been upon the basis, following section 9 of the Criminal Procedure Ordinance, the Judge followed what he perceived to be English procedure and found the basis for such an order in that procedure. It appears that Seagroatt J did not have the advantage of the arguments that have been heard in the present proceedings. While this Court is not strictly bound by the decision in Lee Ming Tee & Anor the principles of judicial calamity and join this court to accord great respect to that judgement.

35.Section 16(2)  of the Prosecution of Offences Act 1985 which is the equivalent in England and Wales of section 4 of the Ordinance was considered case of R v Spens (above).  There is a report of that case in the Independent which neither the parties nor the court of the noble to track down.  However, an account of the decision of Henry J who was the trial judge in that case is sufficiently revealed in R v Spens (above). This is a report of the Queen’s Bench Division (Glidewell LJ & Hidden J)  seeking to judicially review to decisions of Henry J but it reveals the essential facts and the essential approach of Henry J.[21]  Lord Spens and another person were charged with, essentially, commercial crime offences.  The trial reached Day 66.  At that juncture, it was revealed that the other accused had suffered what was characterised as a serious breakdown of his mental health.  A nolle prosequi was entered by the prosecution against that person.  The trial judge discharged the jury in respect of both accused. Of course, as in the present case, Lord Spens was liable to be tried again. Henry J held that it was inappropriate.  He considered the option of directing an acquittal. However, he considered that inappropriate and inconsistent with the nature of the consequences of the entry of a nolle prosequi on the part of the other accused.  In the result, he ordered that the prosecution be stayed as against Lord Spens, not be preceded with again without leave.  Henry J was then faced with an issue in relation to costs concerning Lord Spens.  He considered that the appropriate provision was “Where a person is not tried for an offence which has been indicted or committed for trial [……] the court may make a defendant’s costs order in his favour.”  That, of course, in substance replicates section 4 of the Ordinance.  Henry J considered that he had power to make an order under that provision. He then held that the accused had brought suspicion upon himself and, in the exercise of his discretion declined to award costs.  The key to the decision appears to be that Henry J considered that he had jurisdiction but declined to exercise it.  The Queen’s Bench Division did not criticise this aspect of the decision of Henry J although the formal position of the Queen’s Bench Division was that it had no jurisdiction to interfere with this aspect of his decision.

36.The clear implication of the position of Henry J is that there would have been jurisdiction under section 4 of the Ordinance.

37.R v Spens (above)  was considered in R v Stewart [2004] 3 Costs LR 501 at the Crown Court (Middlesex Guildhall). The Judge in that case appears to have thought that section 16(2)  of the Prosecution of Offences Act 1985 was inapplicable to a case where the trial had been going on for some time but the case had to be stayed by reason of the, in effect, mental breakdown of the accused. The analysis of the Judge in that case seems to have been, in common with the submissions of the prosecution in the present case that the relevant legislation requires a concluding event. The Judge then came to the conclusion that the relevant concluding event was a stay of proceedings. He went on to consider that he had jurisdiction to award costs but the issue then arose as to how the discretion to award costs under that jurisdiction and considered whether the applicant for costs that brought the proceedings on himself. With great respect to the learned Judge in that case, I found his reasoning very difficult to follow.

38.The decision of Henry J is inconsistent with Seagroatt J in HKSAR v Lee Ming Tee & Anor (above). It is consistent with the central contention of those representing the accused that in section 4 the correct meaning of the words “where a defendant is not tried for an offence” thus means “where a trial is not concluded by the entering of a verdict”.  Plainly, the trial in Lord Spens’ case had proceeded and that there had been a trial underway which was not concluded.  Essentially, the argument of the accused is that Lord Spens was undergoing a trial but had not been tried and that must have been the construction of the relevant provisions by Henry J. Seagroatt J in Lee Ming Tee & Anor (above)  was manifestly attempting to achieve the same outcome albeit that he would have exercised the discretion differently to Henry J.  The differential in approach to the discretion is not the point. The issue is whether on a proper construction of section 4 of the Ordinance the Court had jurisdiction to at least consider the issue of costs before applying discretion. With respect to the judgment of Seagroatt J, I agree with his conclusion but not his reasoning.  In my opinion, the use of the words “not tried” clearly suggests a liability for costs until the accused becomes “tried”, that is at the conclusion of the trial. Although section 4 does not define the conclusion of the trial it clearly links with section 5 which speaks of costs on an acquittal after trial. Indeed, the use of the phrase “after trial” in section 5 carries with it the implication that section 4 is meant to cover the position after committal or transfer up until the time which could be characterised as “after trial” has arrived.

39.The prosecution argued, as noted above, that consistent with all the other provisions in Part II of the Ordinance, in order to found jurisdiction to award costs, there is a concluding event in each section. For example, the argument was that the concluding event in section 5 was an acquittal after trial. The problem with the argument of the prosecution in relation to section 4 was that there was no concluding event that could be identified which could not have happened at some stage after a trial had gone for some time possibly for many months. Obviously a nolle prosequi could happen at the beginning of the trial process. However, it could equally occur at any stage until verdict. Normally, the order to leave a charge or indictment on the file not to be proceeded with without leave occurs at the beginning of the proceedings. That almost invariably occurs at the beginning of the proceedings but there is no reason in principle why it could not occur at a later stage. On the prosecution argument, if a nolle prosequi was entered before the jury was sworn then a Court would have jurisdiction to at least consider the issue of costs under section 4.  Sometimes, but not invariably, a nolle prosequi is entered at the beginning of proceedings. However, on that argument, the minute proceedings moved beyond that point but never reached the point of an acquittal, the Court had no jurisdiction. The same analysis, on the prosecution argument, applies where there is a stay of proceedings before a jury is empanelled but not after or where there is a finding that an accused is unfit to conduct a trial. Again, normally, that is determined before a trial commences but as history demonstrates (see Spens and Stewart)  that is not always the case. The question has, nevertheless, been correctly put by the prosecution: when is the concluding event in section 4? The answer is provided by the section itself: when the accused has been tried which is the opposite of being not tried.

40.In my opinion, as a matter of construction, the accused in the present case were undergoing a trial but could not have been regarded as having been tried because that carries with it the implication of bringing the process of being tried to a conclusion.  Accordingly, I am of the opinion that section 4 of the Ordinance gives the Court jurisdiction to award costs to an accused person where the jury has been discharged while that accused is undergoing trial.

41.The remaining issue is the exercise of discretion reposed in the court in the event that there is jurisdiction. To date, the proceedings have been a long closely-contested case. The prosecution case alleges a series of concerted dishonest acts which evidence the conspiracies averred in the indictment. The case for the defence is that no illegality or dishonesty occurred in respect of the conduct of the accused. So far as the money laundering count on the indictment against the 1^st Accused, the essence of the defence position is that the money the subject of the charge was not the proceeds of an indictable offence. The normal position in relation to costs where there is an acquittal is that costs would follow the event unless there are positive reasons not to award them.[22] The classic examples of positive reasons are:

(1)  The conduct of the accused has brought suspicion on himself or has misled the prosecution into thinking that the case against him was stronger than it turned out to be; and

(2)  There was ample evidence to support a conviction but the accused was acquitted on a technicality which has no merit. However, an acquitted accused should not be deprived of costs on the ground that his acquittal was on a technicality if that would violate the presumption of innocence in his favour and the fact that sufficient evidence to justify charging an accused not in itself reason for depriving him of costs.

42.These examples are generally more apt in determining how to exercise the discretion where there has been an acquittal. They nevertheless provide some guidance in circumstances germane to the exercise of the discretion under section 4. The observations of Litton PJ in Tong Cun Lin v HKSAR (1999)  2 HKCFAR 531 were made in the context of an acquittal. They nevertheless are capable of being of general application and are as follows: [23]

“When a defendant has been brought to trial upon particular charges and is then found not guilty it is clearly right that he should normally be compensated out of public revenue for the costs incurred in defending those charges. In considering whether, despite this general rule, he should be deprived of all or part of his costs, the judge exercising the discretion must obviously look to his conduct generally, so long as such conduct is relevant to the charges he faced.”

43.In my opinion, those general observations are apposite to the present case under section 4.

44.There are also now a series of decisions of the Court of Final Appeal and Court of Appeal ordering costs in favour of an accused person facing a retrial notwithstanding that the person may have brought suspicion upon themselves or that there are otherwise disqualifying circumstances.  The rationale for those cases is bound up with the notion that the person may have expended resources on the first trial and will need those resources to fund a further trial.[24] In the present circumstances, the prosecution has intimated that it wishes to continue to proceed against the accused and wants to hold a further trial. At the time of writing, there is presently a stay application on foot the primary object of which is to resist the course the prosecution proposes. At the time of writing, I have yet to determine the merits of that application. The reason I have cited the retrial cases is not because that is the basis upon which I propose to exercise my discretion. The citation of those authorities is to recognise that a possibly strong case against the accused or the accused possibly having brought suspicion upon themselves is not an automatic disqualification from an award of costs.  The basis upon which I award costs is solely to compensate the accused for the conduct of the retrial ordered by the Court of Final Appeal.[25]  The exercise of discretion has not been made upon the basis that:

(1)  Those representing the accused are no longer in funds;

(2)  The suggestion by the defence that there is a need to “top up” the finances of the accused;

(3)  The accused are financially embarrassed or in some way impecunious; or

(4)  The accused are unable to obtain funds from property which has been restrained in connection with this case but in other proceedings.

In my opinion, the foregoing bases upon which the discretion has not been exercised are irrelevant to the proper basis for the exercise of that discretion in this specific case. While it is difficult to see how they might be relevant in other circumstances, in my opinion that is certainly the position in the present case. On the premise that section 4 of the Ordinance gives jurisdiction, for the purposes of this case, the only basis upon which costs could be awarded is upon a compensatory basis within the scope of section 15(a)  of the Ordinance and subject to the positive reasons exception suitably modified to the exercise of the discretion under the circumstances contemplated within section 4.

45.I take the determination by the Court of Final Appeal as to costs[26] as covering the field for all costs incurred by the accused whether at trial or on appeal up to the order for retrial. The order in this case covers costs after the event of that determination.

Issues in relation to section 17

46.Section 17 of the Ordinance provides as follows:

“Where at any time in the course of criminal proceedings a court or a judge is satisfied that costs have been incurred in respect of the proceedings by a party to the proceedings as a result of an unnecessary or improper act or omission by or on behalf of the other party to the proceedings, the court or the judge may, after hearing all such parties, order that all or part of the costs so incurred shall be paid to the first-mentioned party to the proceedings by the other party to the proceedings.”

47.The first thing to notice about this section as it speaks of any time in the course of criminal proceedings. Plainly, there must be a process which, in law, can be characterised as criminal proceedings. That was the point of Secretary for Justice v N (above). Liability for costs under this section could occur, for example, in the course of sentencing proceedings. The present case is, of course, a trial on indictment and the claim for costs on behalf the accused is squarely within the concept of criminal proceedings. In the course of submissions on behalf the prosecution, Ms Draycott, SC argued that the fact that this section contemplates liability for costs arising at any time in the course of criminal proceedings carries with it the implication that section 4 is narrower in its scope.

48.The focus of the contentions on behalf of the accused is that aspects of the examination-in-chief of Kerry Joel Knight by the prosecutor could be characterised as unnecessary or improper act or omission. Those representing the accused make the point that the notion of an unnecessary act or omission as opposed to an improper act or omission is disjunctive in section 17. It is submitted that fault is not a necessary precondition although the establishment of fault is relevant if it can be established.

49.Those representing the accused contend that the questioning on the part of the prosecutor of Mr Knight about his dealings with the 2^nd Accused was unnecessary. The test advanced is that whether the questioning was needed for the proper advancement of the indicted prosecution case.

50.In my opinion, the starting point for analysis must be relevance. If one views the questions which elicited the inadmissible and prejudicial material in isolation, then the questions were of limited if not marginal relevance.  However, the jury were entitled to a rounded picture of Mr Knight if they were to make an assessment of his testimony.  It appears to me that those questions were capable of providing relevant information for the jury to make the kind of assessment I would have expected them to make.  Every counsel in criminal proceedings makes an assessment, indeed makes possibly thousands of assessments, in choosing questions.  What one counsel as opposed to others go about establishing the kind of picture which it was appropriate to establish is very much a matter of judgement and questions such as whether, as counsel, I would have asked such questions or deferred such questions to a later stage in the examination of the witness are relatively meaningless.  The answers to the questions if given now would, in any event, be liable to be heavily tinged with the clarity that hindsight brings. In my opinion, the questions were relevant. The answers were certainly unexpected and even more so given that Mr Knight was at times material to the issues at trial and presently a legal practitioner in New Zealand. I could not conclude that the questions were unnecessary.

51.It follows from that conclusion that the preconditions for the application of section 17 of the Ordinance do not exist.  It follows that the prosecution is not liable under that section.  I should add that even had I come to the conclusion that the questions were unnecessary, I would have hesitated long before exercising the discretion which is reposed in a Court under section 17 in determining whether or not to render a party liable for costs under that section.  That decision does not arise.

52.It follows from this that the jurisdiction vested in the Court by section 17 does not arise in the circumstances of this case.

Orders

53.There will be a tentative order as follows:

(1)  The accused are to have their costs of the retrial including the costs of the costs application, such costs to be taxed if not agreed.

(2)  There will be a certificate for 2 counsel.

(3)  This tentative order will come into operation as the order of this Court in the absence of submissions within 14 days of the date of this tentative order as to the terms of the appropriate orders from the parties.

54.It is intended that the issue of any order for costs arising out of the application for the stay of proceedings is to be considered separately save that, consistent with the rulings in this case as to the construction of section 4 of the Ordinance, this Court has jurisdiction to entertain an application for costs under that section.

Ms Charlotte Draycott SC, leading Mr Mitchell Neil S, Mr Li Chun Ngai Martin, Counsel on fiat and Miss Ng Oi-lam Joycelyn SPP of the Department of Justice, for HKSAR

Mr Tim Owen QC leading Mr Tsoi Y M Benson, instructed by Boase Cohen & Collins, for the 1^st Accused

Mr Ian Winter QC leading Mr Cao Yuan Shan and Ms Betty Chiu, instructed by Haldanes, for the 2^nd Accused

Mr David A S Khosa, instructed by Hobson & Ma, for the 3^rd Accused