HKSAR v. Chen Keen (Alias Jack Chen) and Others
Read the full judgment text of HCCC 309/2019 on BabelCite. This High Court CFI judgment was delivered on 19 February 2021.
1. Prior to the formal arraignment of the accused, a series of pre-trial points were taken which require resolution. The points are:
Cited by 2 cases · Cites 13 cases
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HCCC 309/2019 [2021] HKCFI 3546 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CRIMINAL CASE NO 309 OF 2019 ________________________ BETWEEN
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________________________ RULING ________________________ Introduction: Issue for Consideration 1.Prior to the formal arraignment of the accused, a series of pre-trial points were taken which require resolution. The points are:
2.It will be immediately apparent that the description of 6 out of the 9 outlined in the preceding paragraph are taken from the written submissions presented by the accused. The object of proceeding on that basis is that this best illustrates the issues that were taken but, as will appear in this judgment, the arguments were often narrowed in the course of exchanges between the parties and the Court. 3.In relation to the disclosure point, I gave an indication of my ruling on 19 February 2021 because I considered this issue to be urgent. The formal ruling will be delivered later. The obvious point was to permit those concerned with its execution to get on with the matter as quickly as possible. I gave an indication of my rulings on the balance of the issues arising on 19 February 2021 by letter from the Court to the parties. In relation to all of those rulings I undertook to publish my reasons for those rulings. These are those reasons. Issue 1: disclosure Submissions Counsel for the defence 4.I was informed, and accept, that an important part of the defence case in this trial concerns the jury’s evaluation of the evidence that the prosecution proposes to adduce about the presentation of the financial information concerned with the financial position in relation to the dairy farms owned by the CraFarms Group, which were to be sold to 462. This is critical to the 2nd Count on the indictment which alleges a conspiracy between all 3 accused between the 7th day of May 2009 and the 8th day of September 2009 conspired to defraud the Stock Exchange of Hong Kong Limited (“SEHK”) by dishonestly doing the three items listed in the particulars. Two of those particulars are immediately relevant for present purposes:
5.It is something of a simplification to say that the prosecution case is that the accused took certain accounting data and altered it so that what appeared on that data which had hitherto shown that the farms were in financial difficulty and the accused dishonestly altered or manipulated that data to make it appear that the farms were in substantially better shape than that. The manipulated data was, so the prosecution case goes, used in support of assertions as to the financial health of the properties which were to be acquired by the 462. The source of the accounting material was one David Anthony Wilshire and an accountant by the name of Mark Stuart King. 6.Mr Wilshire and Mr King are slated to give evidence in the trial which is shortly to commence. They will, as it happens, be giving evidence from New Zealand via live television link pursuant to Part IIIB of the Criminal Procedure Ordinance, Cap 221. 7.One of the lines of defence that the accused wish to present is to cross-examine Mr Wilshire and Mr King as to whether the accounting figures in question are true and correct. Ultimately, that may go to whether there was the manipulation of the figures alleged by the prosecution and to the issue of whether what was presented to the SEHK was accurate or misleading. It is recognised (as it must be) by the prosecution that this is a legitimate line of cross-examination. 8.There is one further dimension to this issue. There has been litigation in the High Court of New Zealand in a case entitled Gibson and Stiassny v Stockco Ltd, Nugen Farms Ltd and the Crafar Brothers. The decision in that case was given on 5 July 2010. The plaintiffs in the case, Messrs Gibson and Stiassny are the liquidators appointed by one of the creditors of the farms. The decision of the New Zealand High Court (White J) reveals a number of things which are significant to, at least, the defence. These include that the liquidators have or may have a set of accounts which are different to those generated by Mr Wilshire and Mr King and that a solicitor connected with the farms and/or the Crafar brothers may also have relevant information. 9.Counsel for the defence seek orders that the prosecution make enquiries of Mr Wilshire and Mr King to see whether they have any accounting or other material. They also seek the same orders in relation to the liquidators and the solicitor concerned. It appears that the solicitor concerned did not fare well in the evaluation by White J of his credibility and Counsel for the defence did not press this point. 10.The issue arises because the stance of the exchange of correspondence between the prosecution and defence where the defence requested that the prosecution make enquiries of Mr Wilshire and Mr King, the solicitor and the liquidators. The prosecution declined to accede to such a request. I learned during the course of argument that such an enquiry had in fact been made in very recent times of Mr Wilshire. Mr Winter, QC contended that this carried with a recognition on the part of the prosecution that ensuring there was no further accounting material was a relevant line of enquiry. 11.In support of the application it was contended that Counts 2 and 4 of the Indictment allege that the conspirators falsely represented that the gross profit of the properties and fixed assets of the Farms for the year ended 31 May 2009 was HK$92,520,000; and that they concealed or failed to disclose “the true financial position of the properties”. The submission was that this necessarily requires proof of what the “true” value of the properties and assets of the Farms was and that the true gross profit, on the basis stated in Appendix II for the calculation of that gross profit, was not HK$92,520,000. Accordingly, so it is contended, it is appropriate to know whether Mr Wilshire and Mr King have further material and what material is held by the liquidators of the CraFarms Group. 12.It is contended that on any view these are legitimate issues and Mr Winter, QC contends that the prosecution does not (and could not) suggest otherwise. He contends that it is intended that in the cross-examination of Mr Wilshire and Mr King that he ought to be properly informed as to material which might tend to support the case that the accounts are not all the prosecution say they are. He contends that it is desirable that this issue be ventilated now as opposed to during the trial because that might carry with it the risk of delay and interruption. 13.In terms of timing there is a critical point to be made here that the judgment of White J in the High Court of New Zealand has been published for many years and the explanation offered by Mr Winter, QC was that it revealed issues in it which had hitherto been unrecognised. Counsel for the prosecution 14.The prosecution makes two points in reply. First of all, it is contended that following enquiries on behalf of the defence in 2015, prosecution enquiries were made and it is clear that Mr King has nothing further. In this vein, there is testimony from the former trial that Mr Wilshire gave to Mr King all the material that he had. In this regard, the recent enquiry of Mr Wilshire has elicited the response that he has nothing germane to the case[1]. 15.Secondly, the prosecution contends that none of this is relevant to the case at hand. The prosecution argues that “the issue is not whether the accounts given to [the 2nd Accused] and [the 3rd Accused] were accurate, generally accurate or a genuine attempt at accuracy but that [the accused] changed them to present what was an undoubtedly false picture”[2]. The prosecution contends that whatever the situation it was not permissible to change the accounts given to the 2nd Accused and the 3rd Accused to show “a completely different financial situation than that which they were given”. The prosecution contends that the “issue is whether the accounts in the Circular presented the ‘true financial position’ of the properties or concealed it[3]”. In short, the prosecution position is that this application is something of a distraction. Consideration 16.It is contended by all parties that the law of disclosure in this regard is well-settled and well-known. That is true but I think it is appropriate to re-state it for present purposes because the specific contents of that law inform my decision. 17.In HKSAR v Lee Ming Tee & Securities and Futures Commission (Third Party) (2003) 6 HKCFAR 336, the Court of Final Appeal declared the position for Hong Kong. Mason NPJ, noted that in R v Keane [1994] 1 WLR 746, 752A-C, Lord Taylor LCJ adopted a test which had been suggested Jowitt J in R v Melvin (unrep, 20 December 1993). Jowitt J said:
18.Mason NPJ then noted that this test had been followed by the Court of Appeal (the judgment given by no less an authority than Steyn LJ) in R v Brown [1994] 1 WLR 1599 and gave further consideration to the expression “an issue in the case” and noted that Steyn LJ held that the expression must be given a broad interpretation rather than “the fairly narrow” way in which it is used in a civil case. In that light Mason NPJ then held[4]:
19.The statement of Mason NPJ has been treated in Hong Kong as the appropriate starting point for the analysis of the obligation on the prosecution to disclose. 20.A concomitant of the obligation to disclose is an obligation on the part of the authorities to make appropriate enquiries. Their position is that the law enforcement body to believe that a person may have information which might undermine the case for the prosecution or assist the case for the suspect or the defendant, the prosecution or the investigator cannot decline to make enquiries of that person in order to avoid the need to disclose what that person might say[5]. However, there is an additional dimension to this which is that the material that the defence claim to be entitled to see is in the hands of persons in New Zealand. The duty of disclosure imposed on the prosecution requires it to make full and timely disclosure to the defence of all relevant or possibly relevant material available or known to it whether it is in Hong Kong or abroad. The prosecution is therefore obliged to take all reasonable steps to identify and obtain such material including material identified and located outside Hong Kong[6]. In BA v Attorney-General [2017] VSC 259, 266 A Crim R 497, 319 FLR 329, the Victorian Court of Appeal held that what was required was a “legitimate forensic purpose”. Further, the obligation is to make reasonable enquiries and this must be done recognising that there may not be any means of enforcing the enquiry. That may well be an issue for circumstances in which the overseas person or body declines to cooperate. 21.The critical issue is whether it is open to challenge the correctness of the accounts as presented by the prosecution as a starting point from which it is contended that they were, so the prosecution argues, shamelessly manipulated by the 2nd and 3rd Accused. That the issue may get nowhere is, so it seems to me, not to the point. It is contended by Mr Winter, QC that we know nothing of what the accounts in the hands of the liquidators might turn up. He says that there is some suggestion that they may have some bearing on important components of the accounts. In this context, these are the selfsame components of the accounts which the prosecution says were so shamelessly manipulated. It seems to me that there exists a legitimate forensic purpose in making the enquiries. 22.It seems to me that the prosecution is probably correct when it contends that it is unlikely that Mr King has any more material. Nevertheless, that is not the issue. Not every proper legitimate forensic purpose turns up material which might be the silver bullet for the defence. Accordingly, given that there is no challenge to Mr Wilshire’s recent reply, I do not think there is any prospect of further enquiries being made in relation to him. The likelihood is that an enquiry of Mr King the same result that it did previously. Nevertheless, as a matter of prudence (and nothing more) it seems that such an enquiry should be made. The accounts possibly prepared by on behalf of the liquidators might produce some matter of assistance to the defence. Resolution 23.Accordingly, I gave directions to the prosecution to make enquiries of Mr King and the liquidators. I indicated in the course of submissions that given the timing of the proposition on the part of the defence that such material was wanted for a legitimate forensic purpose that this timing might inform decisions made by the Court in future depending on the outcome. However, that can be left for another time. There is also to be considered the fact that unlike the situation which might arise if the material was in Hong Kong, there is no mechanism which can make this a compulsory process. That too may inform the future disposition of the matter. Issue 2: GFIG The Objections 24.The issue is whether the prosecution can adduce evidence of the 1st Accused’s previous shareholding in a company called Global Financial Investment Group Limited” (“GFIG” – which shareholding was no longer extant by the time the 1st Accused joined 462) and invite the jury to conclude that the failure to disclose it justified an adverse view of the 1st Accused. This invitation is made notwithstanding the unchallenged ruling at the original trial that no allegation can be made that there is something sinister in the conduct of the 1st Accused because he failed to disclose such shareholding to 462 or to any persons since there was no legal duty to disclose it (“the GFIG Point”). Those representing the accused contend that the evidence is too remote from the event, the subject of the indictment, and that the introduction of this evidence would be to allow the jury to consider material which is more prejudicial than probative. 25.In order to understand the concern, it is necessary to appreciate that GFIG held a 60% shareholding in a New Zealand company known as UBNZ Funds Management Limited (“UBFM”). The other 40% of the shareholding in UBFM was held by the 2nd Accused. The case for the prosecution was that the 1st Accused held a controlling interest in GFIG. Further, the case for the prosecution is that the 1st and 2nd Accused were joint directors and shareholders of UBFM. This it is said contradicts the position of those accused that they were independent of each other. 26.UBFM is a very important company in the case. It was to become a guarantor of one of the critical transactions which is the subject of the indictment. On the prosecution case, it was critical that the 1st Accused be seen to be independent of that company at the time of and leading up to this transaction. The reason for this was that it was important to the transaction that the 1st and 2nd Accused be seen as independent of each other. 27.The case for the prosecution is that the 1st Accused on 8 May 2009 through GFIG divested himself of an interest in UBFM leaving the 2nd Accused as the sole director of UBFM. It was also critical that this occurred before the 1st Accused joined 462 so that from the outset he could be viewed as independent of the 2nd Accused. 28.The formal company evidence is that the shares in UBFM held by GFIG were disposed on 8 May 2009. That day is significant because it is the day before the 1st Accused became co-chairman of 462. 29.At the first trial of these proceedings, objection was taken to this evidence upon the basis that the 1st Accused had no duty to disclose the transaction through which GFIG divested itself of any interest in UBFM. Indeed, the then trial judge, Anthea Pang J[7] gave a ruling in relation to this. She held (Ruling dated 16 October 2015) that the 1st Accused had no duty to disclose his former shareholding[8]. Anthea Pang J concluded[9]:
30.It is pertinent to note that there was a further reference to this ruling by Anthea Pang J in a ruling by her on 23 October 2015. In that ruling Anthea Pang J held in the context of objections to the opening of the prosecutor[10]:
31.Counsel representing the accused contend that in order to make out a conspiracy to defraud in the present context, it has to be shown that the defendant “dishonestly concealed from another person information which he was under a duty to that person (or entity), or to which that person (or entity) was entitled to require them to disclose”. In this regard, reliance is placed on Adams v R [1995] 1 WLR 52. It is contended that the ruling of Anthea Pang J is plain and it is not open for the prosecution to go behind the ruling. 32.It is contended on behalf of the accused that in fact the prosecution did go behind the ruling at the earlier trial. That occurred when the prosecutor asked PW1 (Ms Chan Wai Kay, Katherine) whether it would have made a difference to her inviting the 1st Accused onto the Board of Directors of 462 if she had known that he had dealt with his shareholding in relation to UBFM as I have hitherto described. Further, Counsel representing the defence point to paragraphs 64 and 65 in the second revision of the Draft Opening of the prosecutor. In passages in the Draft Opening are as follows:[11]
33.The submission on behalf of the accused is that the prosecution ought not to be allowed to circumvent the ruling of Anthea Pang J when there was no duty under either the Listing Rules or a fiduciary duty to disclose general past dealings with the owner of a vendor or company. 34.Further, those representing the accused contend that the evidence is either irrelevant to the issues that the jury has to consider or insufficiently probative of those issues and that the prejudicial effect outweighs the probative value of such evidence. They contend that such evidence is simply too remote. 35.After submissions on this and other pre-trial issues had concluded, the prosecution notified the parties and the Court that it intended to adduce further evidence on the topic of the business relationship of the accused prior to the 1st Accused joining 462. This was done by a Notice of Additional Evidence in the ordinary way. The material, the subject of the Notice, was provided electronically by way of e-mail and then just after Chinese New Year in hard copy. The essence of the material provided by the prosecution is broadly analogous to the GFIG transaction. There is also an increased and more articulated reference to Mr Wu Wing Kit, a solicitor in Fred Kan & Co, Solicitors and Mr Wu’s assistance, as solicitor to the 1st Accused. The prosecution seek to go further and say that on occasion he also acted for the 2nd Accused. In this regard, the prosecution point to his assistance in the provision of a BVI company called Super Worth[12]. The prosecution go further and say that it is significant that 1st Accused paid the solicitor’s bill for the 2nd Accused in relation to this piece of work[13]. 36.Those representing the Accused take the point that the reference to Mr Wu is to imply that he had also joined the conspiracy. They also contend that in raising the issue of the provision of the BVI company called Super Worth International Limited (Super Worth), the prosecution are seeking to go behind a ruling of Anthea Pang J that prohibited the prosecution from adducing evidence or referring to a dispute between the intended second prosecution witness and the 1st Accused over payments to be made from 462 to Super Worth[14]. Position of the Prosecution 37.The prosecution does not seek to question the ruling of Anthea Pang J of 16 October 2015. As is said in the submission of the prosecutor: “We proceed on the basis that [the 1st Accused] was under no legal or fiduciary duty to disclose his shareholding in UBNZ Funds Management Limited (‘UBFM’) … through his BVI company Global Financial Investment Group Limited (‘GFIG’)”[15]. However, the prosecution goes on to submit that this ruling does not make the impugned transactions inadmissible for all purposes. 38.It is contended that the impugned transaction at the time it occurred in evidence that the 1st Accused and the 2nd Accused were painting a false picture of the acquisition, the subject of the indictment, and their role in that acquisition. In short, it is contended that the 1st Accused was, in a sense, clearing the decks before proceeding with the conduct which is the subject of the indictment. The prosecution contend that even if this conduct occurred before the commencement of the alleged conspiracy, it is open to the prosecution to presented as circumstantial evidence of events which occurred before the crime to support the inference of guilt in relation to the crime. It is recognised by the prosecution that evidence merely characterised as background evidence would be inadmissible. However, that is not the point made by the prosecution. On behalf of the prosecution, Ms Draycott, SC contends that, as appears in the last sentence of paragraph 59 of the draft opening: “Why did they make these changes just at the time Jack joined 462 if it was not to hide their cooperation”. 39.The prosecution submits that the significance of the evidence of the impugned transactions is that the jury could conclude that there existed prior to the commencement of the conspiracy and prior to the 1st Accused joining 462 as a director, a business relationship between the 1st Accused and the 2nd Accused. The new material notified by the Notice of Additional Evidence essentially goes to the same point. There is, of course, the addition of the references to the solicitor Mr Wu. As I have indicated earlier, the case for the prosecution is that he acted as solicitor for the 1st Accused, but also from time to time (at least) acted as the solicitor for the 2nd Accused. In addition to that, the case for the prosecution is that the 1st Accused, through one of his companies, paid the legal bill of that solicitor for work done on behalf of the 2nd Accused. Further, and, perhaps, most significantly, it is submitted that had the interest of the 1st Accused in the impugned transaction been known, it would have undermined the pretence of independence of the 1st Accused from the 2nd Accused and the assertion on the part of the 1st Accused that he did not intend to profit from the acquisition, the subject of the indictment. The prosecution placed considerable reliance on the timing of the impugned transaction as evidence of a dishonest attempt to conceal the true situation in furtherance of the conspiracy. 40.As to the issue of Super Worth being referred to in the opening and in the evidence, the prosecution contends that there is no intention to go behind the ruling of Anthea Pang J on 16 October 2015. It is contended that her Ladyship did not say that no reference could be made to Super Worth. Consideration 41.The starting point for consideration of this issue are two rulings of Anthea Pang J on 16 October 2015 and 23 October 2015. Those representing the accused contend that they are correct. There is no challenge as to the correctness of the rulings on behalf of the prosecution. I am in respectful agreement with the rulings. There remains an issue as to the scope of those rulings. 42.In my view, the prosecution is entitled to adduce evidence of a business relationship between the 1st Accused and the 2nd Accused which predated the commencement of the conspiracies, the subject of the indictment. Nothing in the two rulings of Anthea Pang J contradicts that proposition. The existence of such a relationship between the 1st Accused and the 2nd Accused and the nature of that relationship is revealed in the impugned transaction. There are other bases in the proposed evidence from which a cooperative business relationship between the 1st Accused and the 2nd Accused may be inferred. 43.The problem arises because the prosecution contends that the impugned GFIG transaction was done for the purpose of concealing that relationship. In the two rulings to which reference is been made, Anthea Pang J held that there was no duty on the part of the 1st Accused to reveal the impugned transaction. However, as can be seen in those two rulings, particularly confirmed in the second of the two rulings on 23 October 2015, Anthea Pang J held that “Nor is there such a duty of disclosure concerning his general past collaboration with the 2nd Accused. In the circumstances, any suggestion in the prosecution’s opening that the 1st Accused has a duty to so disclose is not permissible and care should be taken not to convey such a message in those paragraphs”[16]. Whatever doubts there may have been about the true scope of the ruling of Anthea Pang J on 16 October 2015, it is clear that Anthea Pang J considered that there was no obligation on the 1st Accused not just to disclose to 462 the GFIG transaction, but also a previous relationship between the 1st Accused and the 2nd Accused. 44.On that premise, it is plain that Anthea Pang J held it is not open to the prosecution to conduct its case that the concealment by the 1st Accused of the impugned transaction and the concealment of a business relationship between the 1st Accused and the 2nd Accused is a breach of any duty owed by the 1st Accused to 462. The clear implication of this is that if there is no duty to disclose these matters then it is not open to the prosecution to criticise the 1st Accused for not doing what he had no duty to do. I respectfully agree with the nett effect of the ruling of Anthea Pang J. While her Ladyship was directly concerned with the GFIG transaction, the principle which underlies her ruling is, in my opinion, equally applicable to any other of the transactions which the prosecution now wishes to rely on. In my opinion, it is not open to the prosecution to present its case upon the basis that an inference that is not telling the appropriate officers of 462 of the rearrangements he had undertaken either by himself or with the 2nd Accused prior to joining 462 was a basis for concluding that the 1st Accused or the 2nd Accused was acting dishonestly. The prosecution will not be permitted to present its case upon that basis. That includes rhetorical devices such as the question posed in the opening “Why did they make these changes just at the time Jack joined 462 if it was not to hide their cooperation”. I am concerned with the effect, not the device. 45.As to the issue of the treatment of Super Worth, the BVI company provided by Mr Wu to the 2nd Accused, it is important to note what was the subject of dispute before Anthea Pang J when she gave her ruling. What was at issue was “a payment to Super Worth sought by the 2nd Accused pursuant to an agreement completely separate from 462’s acquisition of UBNZ Assets Holdings Limited (“UBAH”). This was a manufacturing agreement dated 9 June 2010 and was made between UBFM and Guo Yuan Natural Dairy (Jiangxi) Limited, a wholly-owned subsidiary of 462”[17]. In my view, there is nothing in that ruling which prevents reference being made to the provision of the BVI company to the 2nd Accused by Mr Wu and the 1st Accused paying the solicitors bill of the 2nd Accused in relation to that provision. 46.There is nothing in the rulings of Anthea Pang J (or mine) which prevent the prosecution from proving that there existed a business relationship between the 1st Accused, the 2nd Accused and, for that matter, the 3rd Accused. Evidence to establish that fact would have to make the ordinary criteria for admissibility. For the avoidance of doubt, I should indicate that it may include evidence which establishes that fact by inference. Further, my conclusion as to the “Super Worth” point now advanced by the prosecution is directed only to establishing those facts to support the inference that there was a cooperative business relationship between the 1st Accused and the 2nd Accused. Issue 3: The Conversion Point The objection 47.Those representing the accused object to certain evidence concerned with the decision by 462 to permit the conversion of certain convertible notes into shares. The agreement stated that the price for the farms was NZ$500 million and that the 2nd Accused would be paid in money borrowed from the bank or money from selling convertible notes to the public, or if that still was not enough she would take the rest in convertible notes. In the result, part of the consideration was to be paid in convertible notes. The arrangement in relation to the convertible notes is that on maturity they could be converted into shares in 462. The maturity date was, for all practical purposes, some time in the future (There were different convertible notes and the maturity dates varied). 48.There came a time when the accused wished to convert the convertible notes into shares. The simple economics of this is that while a convertible note has a value, and is, thus, theoretically saleable, the notes once converted into shares were far more readily saleable and by reason of that, convertible into money. Part of the agreement was that 462 could agree to convert the convertible notes into shares prior to maturity. The accused wished for this conversion to occur prior to maturity and, on the prosecution case, pressured the then Chairman of the Board of Directors of 462 to permit such conversion. On the evidence available, there was a dispute between the then Chairman of the Board of Directors Mr Yip Kean Mun and the accused which was acrimonious and the communications on the part of the Chairman imputed improper motives on the part of the 1st Accused and the 2nd Accused. The flavour of the chairman’s assertions can be seen from the Draft Opening as follows[18]:
49.The case that the prosecution seeks to advance in this regard is that the exchanges with the Chairman became so acrimonious that it resulted in him retreating to Singapore in ill-health. 50.Those representing the accused contend that the attempt to introduce this evidence is an attempt to revive a charge previously levelled against the accused but which was not one of the charges upon which the accused were committed to this Court. The learned Magistrate who heard the committal held that there was insufficient evidence in relation to this charge to justify committal to the High Court. 51.It is also contended that there was an agreement by 462 to convert and that this was not in any way illegitimate, unlawful or improper. It was done after legal advice was requested by order of the Board of Directors although the Chairman to which references earlier been made was not Chairman at the time of the order of the Board. Moreover, it is contended that the evidence of this process all occurred well after the time during which the indictment avers that the conspiracy operated. Indeed, those representing the accused contend that the disputes postdated the alleged misrepresentations which form the core of the indictment so far as the conspiracy to defraud accounts are concerned. In the result, it is contended that the disputes and the conversion itself do not provide any evidence of any probative value on the real question is that the jury will need to consider in determining whether the charges of conspiracy to defraud are established. Position of the prosecution 52.The first point made by the prosecution is that this evidence has nothing to do with the charge which the Magistrate hearing the committal proceedings dismissed. It makes the point that that charge alleged a conspiracy to defraud a commonly known as “Computershare” by a false representation that the Board of Directors of 462 had consented to conversion. The prosecution case on this argument is that this charge has nothing to do with the present issue. 53.The contentions of the prosecution are that this evidence is directed to establishing that although the 1st Accused was no longer an officer of 462, he was still, in effect, running that company. It is contended by the prosecution that[19]:
54.Further, the prosecution contend that the issue was litigated before Anthea Pang J in the previous trial held[20]:
Consideration 55.In my judgment, evidence of conduct which postdates the conduct, the subject of the crime or crimes alleged in the indictment, is capable of proving or tending to prove that the crime or crimes on the indictment occurred or aspects of those crimes occurred. This sort of evidence is simply a species of circumstantial evidence. The admissibility of such evidence is well-established on the authorities. However, what is also manifested in those authorities is a concern that the Judge in summing up the case may explain to the jury how such evidence may be used and should be accompanied by a fact-specific warning as to the permissible (and, thus the non-permissible) use of such evidence[21]. 56.In this case, the case for the prosecution is that what was motivating the accused to adopt the course they did was that the accused wish to convert the convertible notes into shares so they could, as the prosecution contended “cash in” as soon as the trading in 462 resumed. The case for the prosecution is that the accused were all anxious to get their hands on the proceeds of their crime before anyone woke up to what they had been up to. 57.It is one thing to state the prosecution case on this topic. It is another thing to consider how this might be proved. Mr Yip considered all of this was being done in indecent haste and indeed expressly or impliedly appears to have held the position that what the protagonists were trying to do was get out before they were caught. This, so the prosecution would doubtless contend, was all the more significant because originally at least Mr Yip was their man. 58.In my view, consistent with the views of Anthea Pang J and for the reasons that she gave, the fact that all 3 accused were pressing with apparent urgency to convert the convertible notes into shares is relevant, probative and admissible. The only aspect in which I respectfully depart from the views of Anthea Pang J is an aspect of how these propositions might be proved. In my opinion, it would not be appropriate to prove them by the expressions of opinion by Mr Yip. I think there is at least a respectable argument that Mr Yip saw right through the accused but his opinions on what they were up to are not an admissible mode of proving what the prosecution seeks to prove. That said, it would be open to the prosecution to call evidence including evidence through Mr Yip that there was disagreement - indeed heated disagreement - between him and the accused over the conversion of the convertible notes. What I am concerned not to admit is his opinion as to what was motivating the accused. Subject to that reservation, I am in agreement with the ruling made by Anthea Pang J in the earlier trial. In case there is any doubt about the issue, I agree with her that the fact that these events took place after the conspiracy period do not render the evidence inadmissible. 59.It was objected by those representing the accused that there is no way that a jury could draw the inference which the prosecution contend should be drawn. The defence say that there are competing inferences. The standard of proof makes the drawing of inferences one which requires of the jury the conclusion that the inference to be drawn against the accused must be the only reasonable inference in the circumstances[22]. The authorities reveal that this is quintessentially a jury issue and even if I was to consider that there were competing inferences it forms no part of my function to withdraw an issue from the jury upon that basis[23]. I cannot say that evidence which might found the inference sought to be drawn by the prosecution is so weak as to drive me to the conclusion that the evidence is so slight as to be more prejudicial than probative[24]. 60.I do not consider that this is an attempt by the prosecution to revive the charge dismissed at committal. The elements of the offence and the particulars that the prosecution sought to prove are different to that which the prosecution now seeks to prove. Not the least consideration is that the company named in that charge has nothing to do with the issues. 61.Subject to the limitation I have imposed on the means by which the prosecution may prove their case in this regard, the prosecution may open on this topic and adduce evidence accordingly. Issue 4: Opinion Evidence on the Listing Rules 62.At least for the time being this does not require a ruling. As those representing the accused have very properly pointed out, this is a matter which can be deferred for consideration to a later time. The real concern underlying the fact that the accused have raised this matter at this stage is how the prosecution is to be permitted to open on this topic. As will appear in relation to my conclusions as to Issue 8, I am of the view that the prosecution would in this specific case be permitted to open on the Listing Rules. As I indicate under that heading, I cannot conceive how the prosecution case could make any sense to a jury absent at least some presentation on that topic. Further, it may be that those representing the defence would wish to adduce a different view of the meaning of the Listing Rules. It is conceivable that this might be done by permitting the defence to open their case immediately after the conclusion of the prosecution opening. That also is a consideration for later on although that issue is fast looming for determination. Issue 5: Matters relating to the Dynasty Group Limited The objection 63.In order to understand this objection, it is necessary to understand the prosecution case. First of all, the prosecution points out that the 2nd Accused was a businesswoman and had a group of companies in New Zealand under the umbrella of the Dynasty Group[25]. On 3 October 2008, the Dynasty Group went into liquidation[26]. In the draft opening of the prosecution it is contended: “On 10 October 2008 she left NZ on a one-way ticket and came to HK, thus avoiding her examination by the liquidators which was fixed for 13 October”[27]. 64.The case for the accused in relation to this objection is that the prosecution is seeking to establish by the liquidation of the Dynasty Group and the 2nd Accused’s actions that immediately followed that she is a dishonest woman and that her impecuniosity is such that she was not in a position to buy the farms personally. Those representing the accused contend that the liquidation of the Dynasty Group is incapable of sustaining these inferences and is, in the final analysis irrelevant to the present case. 65.The defence team make the point that this liquidation was something of the order of 6 months before she was approached to participate in this case. Further, those representing the accused contend that there is no evidence that she left New Zealand with a “one-way ticket with the intention of avoiding her examination by the liquidators”. 66.Those representing the accused contend that issue of whether the 2nd Accused was ever in a position to personally buy the farms is irrelevant. It is contended that their case will be that she was never in that position but there is nothing wrong with that. As the written submissions of the accused say: “The farms were always sought on the basis that [the 2nd Accused] would find an investor or a lender to fund their purchase”[28]. Those representing the accused characterises evidence as “pure prejudice[29]”. Position of the Prosecution 67.The prosecution contends that the liquidation of the Dynasty Group:
In short, the lie on the part of the 1st Accused about the financial status of the 2nd Accused was a necessary act in furtherance of the conspiracy. 68.The prosecution makes the point that following the liquidation of the Dynasty Group on 3 October 2008, 2nd Accused left New Zealand on 10 October 2008. The prosecution contend that she not only avoided her schedule meeting with the liquidators on 13 October 2008, but that she left at the time she did for the purpose of avoiding that meeting. The source of the knowledge of the 1st Accused as to her financial position with respect to the Dynasty Group might be derived from the fact that the 1st Accused bought property held by the Dynasty Group in Queen Street in Auckland. The 1st Accused paid some of the creditors from the proceeds of the sale of that property. 69.The 2nd Accused was made personally bankrupt in December 2010. 70.The case for the prosecution was that it was necessary for 2nd Accused to represent to Katherine Chan that she had paid a deposit of NZ$50 million for the farms in order to induce the belief in Katherine Chan that 462 could only purchase the farms through the 2nd Accused. The prosecution contends that if she had known the true financial position, she would not have believed that she either owned the farms or have a right to ownership of the farms. 71.It is contended by the prosecution that the position that the 2nd Accused was not in a position to discharge her debts is established by her leaving New Zealand at the particular time that she did. Consideration 72.The first thing to consider is that there is no evidence that the 1st Accused knew of the winding up of the Dynasty Group. There is no evidence that he was aware of the personal financial circumstances of the 2nd Accused. The fact that a company goes into liquidation in which a specific person is a substantial shareholder (in this case, the 2nd Accused was, apparently, a 50% shareholder) of itself reveals nothing about the financial circumstances of a shareholder of the company. The very nature of a corporate liquidation is generally built upon the premise that the company, the subject of the liquidation, cannot meet its obligations as they fall due. That says nothing about the financial status of a shareholder. 73.The fact that it may have been a finding of the corporate liquidation process that the 2nd Accused owed a substantial amount of money is not evidence from which it can be inferred that any other person, particularly the 1st Accused, knew about that. 74.Assuming that the acquisition of the floor on the building in Queen Street in Auckland can be established, might by itself theoretically provide evidence that the purchaser was aware of the straitened circumstances of the vendors. However, the real issue is whether it does so in these circumstances. There is no evidence that the consideration for the acquisition of this floor was at a bargain or knockdown price. Even if it was, it is difficult to see how that of itself demonstrates knowledge of impecuniosity on the part of the 2nd Accused. I have not ignored the prosecution’s proposition that it is necessary to look at the whole of the evidence on this topic. The same comment applies in relation to the Deed of Debt document which is considered as a later stage in these reasons. 75.There is a real danger of prejudice when a person unfamiliar with the strict law as to the effect of a corporate liquidation learns of a person’s company going into liquidation. Unexplained, that is redolent of conclusions of bad management or dishonesty or incompetence. Counsel for the 2nd Accused submits that there is, viewing the liquidation proceedings, a very good explanation for the liquidation: the company was caught in the downdraught of the global financial crisis of that time. However, whether or not that could be established as true is not important for present purposes. What is important is that the implications of a liquidation redolent in the prosecution opening is capable of creating very real prejudice. 76.As the prosecution correctly observes, the Deed of Debt issue is intimately bound up with the issues which arise under this heading. However, as will shortly appear, in my judgement, that does not assist the prosecution. 77.Part of the opening of the prosecution which carries with it the implication that the 2nd Accused left New Zealand (and left in haste) to avoid examination by the liquidators is, in my opinion, not a conclusion which flows from liquidation. While I do not say that an admission on the part of the 2nd Accused (there is no such admission) that this explained her travel would be the only means of proof of that state of mind, but the specific facts put forward by the prosecution as to these matters fall far short of that. In my view, the effect of the assertion in the prosecution opening is, on the state of the evidence as I understand to be, highly prejudicial even if it could be said to have some probative value. (For the avoidance of doubt, what I mean in the previous sentence by the phrase “the state of the evidence” means the whole of the evidence on this topic.) Issue 6: Evidence of material found on the computer of the 3rd Accused and in the possession of the 2nd Accused 78.There are two groups of documents. The first group is found on the computer of the 3rd Accused and the second group is found on a hard disk seized from the residence of the 2nd Accused[30]. The Prosecution Case 79.The prosecution wishes to adduce evidence of documents found on the computer of the 3rd Accused entitled Deed of Debts and Memorandum of Variation of Terms of Agreement. The documents were attached to emails said to be sent by the 3rd Accused to the 2nd Accused. 80.In relation to the documents found on a hard disk said to be found at the residence of the 2nd Accused, they are:
81.The purpose of seeking to adduce this evidence is to show an early and continuing connection - more particularly a business connection - between each of the accused and also knowledge by the 1st Accused of the financial difficulties of the 2nd Accused. The prosecution seeks to use this material to show that the 1st Accused must have known that it was untrue for him to say to Katherine Chan that the 2nd Accused was a wealthy woman. Further, the prosecution seeks to use this material to show that it was unlikely to be true that the 2nd Accused had made a substantial deposit on the farms in question and thus 462 could only deal with her if it wanted to acquire the farms. The Position of the Accused 82.The position of the accused is that the Deed of Debts and the Memorandum of Variation of Terms of Agreement found in the computer of the 3rd Accused are unsigned. Accordingly, there is no evidence of adoption of these documents by either the 1st Accused or 2nd Accused. It is submitted that there is no evidence the 1st Accused ever received the documents let alone signed them. Accordingly, it is contended that there is no basis upon which these documents could be said to demonstrate the knowledge of the 1st Accused of the impecuniosity of the 2nd Accused. 83.Those representing the accused also make the point that the prosecution must be relying on the truth of these documents and thus, given that on any view these documents clearly predate the averments in the indictment as to the commencement of the relevant conspiracies, it would not be open to the prosecution to adduce the documents as acts and declarations by one conspirator in furtherance of one or more of the conspiracies. Consideration 84.Had these documents found in the computer of the 3rd Accused been proved to have been endorsed or appropriately acknowledged by the 1st Accused and the 2nd Accused, the position might have been different. The finding of the documents in the computer of the 3rd Accused and no evidence (direct or inferential) that the 1st Accused ever saw those documents removes them from any consideration that they could be prayed in aid of the proposition that the 1st Accused knew of the impecuniosity of the 2nd Accused. 85.However, subject to proof of signature, the documents in a hard disk found said to be found at the residence of the 2nd Accused are in a different position. The relevant signatures, if proved, are capable of demonstrating a knowledge of the 1st Accused and the 2nd Accused of the transactions the subject of the documents. That the 3rd Accused signed as witness of the 1st Accused in the Deed of Debts document connects him to a degree to the document. It would be open to the jury to infer his knowledge of the transaction, which is the subject of the document signed by the other two accused on the basis of his continuing association with the other two accused. In my judgement, the signatures on these documents (subject to proof) provide a basis for inferring a continuing business relationship between the 3 accused. 86.Plainly, evidence of cooperation between each of the accused prior to the commencement of the dates of the conspiracies is relevant and admissible. 87.In my judgment, the files and documents found on the computer of the 3rd Accused simply do not establish the facts or inferences of impecuniosity on the part of the 2nd Accused that the prosecution suggests they establish. However, that the two documents found in the computer of the 3rd Accused are in identical terms to two of the three of the documents found on a hard disk said to be found in the house of the 2nd Accused and that is therefore in some evidence which might support the inference of a business relationship between the 2nd Accused and the 3rd Accused. While I was sorely tempted to conclude that the prejudicial effect of these documents outweighed their probative value, I do not think I can come to this view. 88.Clearly, it could not be said that these were acts in furtherance of the conspiracies because they predate the date in the indictment of the commencement of those conspiracies. That proposition forms no part of my analysis of the position so far as these documents are concerned. 89.In my view, the documents said to be found on a hard disk in the residence of the 2nd Accused are admissible for the purpose of establishing a business relationship between each of the accused. The documents found in the computer of the 3rd Accused are some evidence of such a relationship between the 2nd Accused and the 3rd Accused. In this regard, I have changed my mind about the use that could be put to the documents found in the computer of the 3rd Accused. I had formerly communicated a ruling in which I had indicated they were inadmissible. I have come to the view that they are admissible but for the limited purpose I have just identified. Issue 7: The opinions of Barry Fraser on the Commission Sharing Agreement 90.This is now, by common consent, not an issue. Even if Mr Fraser expressed that few in the course of his evidence, it would be my responsibility to direct the jury on the law and my direction would not be in accordance with his opinions as to the duration of this Commission Sharing Agreement. Issue 8: The opening by the prosecution The Objections 91.The accused have indicated that they object to a number of passages in the opening of the prosecution. What has happened is, as is the usual practice in complex cases including cases alleging, in effect, commercial dishonesty, that the prosecution provides a draft opening to the accused. The draft opening under consideration is the version provided by the prosecution on 5 February 2021. That has been amended to an extent in consequence of a Notice of Additional Evidence and an accompanying note from the prosecution notifying further passages for the opening. That occurred at Chinese New Year. 92.The underlying basis for the objections (including further objections notified following the additional material to which reference has just been made) is that in the event that the prosecutor opened in the terms of the current draft of the opening, the defence would move for the discharge of the jury on the basis that the opening falls foul of the requirements of the law and practice of Hong Kong because:
93.Obviously, it will be necessary to address the pre-trial objections. As to those matters, there will be rulings prior to the time when the prosecutor would be called on to open her case. Accordingly, item (4) need not be the subject of direct consideration under this heading. 94.What Counsel for the accused have done is mark up with various colours the passages in the opening which they submit fall foul of items (1) to (4). The colours correspond to the passages in the proposed opening which Counsel for the accused characterise as falling into the offending categories. This has greatly alleviated many of the difficulties in going through the passages identified by Counsel for the accused. 95.On the part of the prosecution, Ms Draycott, SC makes the point that the documents supplied to those representing the defence described as “Revised Draft Opening for retrial 5.2.21” is more properly characterised as notes for opening. Thus, for example, in the document we do not see phrases such as “It is the prosecution case that …” which it is contended clarifies many of the passages subject of objection. So far as the passages identified as a concern under item (3) an appropriate variation of the foregoing so as to introduce the assertions of the law and practice of the Hong Kong Stock Exchange is intended. In that regard, Ms Draycott, SC makes the point that it will be made plain in the opening that issues of law are matters for the Court. In general, much of the language one would normally expect in an opening does not appear there because Ms Draycott, SC and her legal team saw no need to write all of that out. Principles 96.The principles which set the standards for a prosecution opening are not greatly in dispute. Archbold Criminal Law Pleading Evidence & Practice, Hong Kong 2021 Ed., §4-123, identifies the principal purpose of an opening: “The purpose of the opening of the prosecution case is to inform the jury of the leading features of the case and to outline for them the evidence that is going to be called”. It will be immediately obvious for the purpose of considering the present proposed opening that the case is complex and involves events over a protracted period, multiple charges, a need to appreciate the rules that govern the operation of Hong Kong listed companies and, specifically in that regard, the rules which govern how such companies are required to deal with major transactions. The characterisation by the prosecution of this case as complex is accurate. Accordingly, the notion of the leading features of the case as identified by Archbold Criminal Law Pleading Evidence & Practice, Hong Kong has to be understood by reference to the case that the prosecution intends to present. 97.The editors of Archbold Criminal Law Pleading Evidence & Practice, Hong Kong cite for the proposition cited in the preceding paragraph a Canadian case R v Mallory (2007) 217 CCC (3d) 266, §338. Before referring to that case, it is necessary to note that the leading authority on prosecutorial duty in Canada is R v Boucher (1954) 110 CCC 263[33]. In Boucher, the Supreme Court of Canada held[34]:
98.R v Mallory is a decision of the Ontario Court of Appeal. As will shortly be seen, Boucher (above) was an important basis for the Court’s consideration of the issues. In Mallory, the Court considered the topic of a prosecution opening against the background of what might fairly be considered a fairly tendentious opening. The Court observed[35]:
99.In Hong Kong, the Full Court of the Supreme Court considered the issue in Kwan Cheung Tai and Yu Ming Shing v R [1959] HKLR 141. In that case, which concerned whether it was permissible for the prosecutor to open his case in relation to admissions attributed to the Accused, Hogan CJ held[36]:
100.It is manifest that there limits on what the prosecutor can do and say in an opening. In the New Zealand Court of Appeal in R v Roulston [1976] 2 NZLR 644 the Court examined those limits and observed[37]:
101.The clear implication of the message from Roulston is that while there are while there are clear limitations to be imposed upon a prosecutor, an element of firmness is clearly to be permitted. 102.In R v Rugari [2001] NSWCCA 64, 122 A Crim R 1[38], the New South Wales Court of Criminal Appeal cited with approval the foregoing passage and, perhaps wryly observed: “Thus although Crown Prosecutors are subject to considerable constraints, they must nevertheless discharge their obligations fearlessly in the interests of the Crown, acting on behalf of the community”[39]. 103.Counsel for the accused also referred to Randall v R [2002] UKPC 19, [2002] 1 WLR 2237. That case, decision of the Privy Council, stressed the adversarial nature of proceedings. Lord Bingham, delivering the advice of the Privy Council, observed in this regard[40]:
104.Against that background, Lord Bingham made the point that there are some basic rules that must be observed by the prosecution. In this context, he held that: “The duty of prosecuting counsel is not to obtain a conviction at all costs but to act as a minister of justice: R v Puddick (1865) 4 F & F 497, 499; R v Banks [1916] 2 KB 621, 623”[41]. His Lordship then cited with approval the passage from the Canadian Supreme Court in R v Boucher (above). 105.The Secretary for Justice has published guidelines for prosecutors. The current edition of these guidelines is Prosecution Code 2013. That code says paragraph 3.3“The prosecutor’s advocacy role must be conducted temperately and with restraint…”; paragraph 3.5(c) “refrain from using language or conduct that may inflame or bias the court against the accused…”; and paragraph 3.7 “A prosecutor must not lead the court or defence to believe that the prosecution has evidence supporting an aspect of its case unless the prosecutor believes on reasonable grounds that such evidence will be produced from material already available…”. 106.Generally, prosecuting counsel should not open on the law. However, in R v Lashley [2005] EWCA Crim 2016, [2006] Crim LR 83, Judge LJ held that: “The presumption should be that an opening address by counsel for the Crown should not address the law, saves in cases of real complication and difficulty where counsel believes and the trial judge agrees that the jury may be assisted by a brief and well-focussed submission”[42]. In that case, the English Court of Appeal was dealing with a comparatively simple case involving the dishonest use of a credit card. In terms of complication, it is fair to say that both in terms of the facts and, to an extent, the law the present case is clearly the other end of the scale. Part of this case involves the application of the Listing Rules through which the Hong Kong Stock Exchange regulates significant aspects of the conduct of listed companies in this jurisdiction. Those Rules are manifestly relevant to the evaluation of the critical issues of fact in this case. In my view, it is difficult to conceive of a prosecution opening in a case such as this which did not touch on the law. There is also the issue of what the prosecution has to prove to establish either an offence of conspiracy to defraud or the offence of dealing with property known or reasonably believed to represent the proceeds of an indictable offence. I would go so far as to say that I would positively encourage references to, in particular, the relevant aspects of the Listing Rules. I cannot conceive of how a jury could be expected to understand the significance of the conduct attributed to the various accused without realising that these Rules are a critical component of the analysis that the jury will be expected to undertake. 107.Those representing the accused contend that by reference to those passages in the proposed opening that there is more to the issues of law than is contended by the prosecutor in that opening. I asked for but, to date have not received from those representing the accused, the statement of where they disagree with the correctness of the propositions asserted by the prosecution in relation to the Listing Rules. 108.Against that background, it is appropriate to examine the passages which are the subject of complaint referred to in the draft prosecution opening. 109.In my opinion, what is at the heart of the concerns outlined above is that the accused have a fair trial. In this context, the nature of a fair trial is informed by the adversarial process which underlies our system of criminal justice. Nevertheless, there are appropriate constraints imposed on a prosecutor because a prosecutor is not just a party to the proceedings but prosecutes on behalf of the community. The prosecutor obtains a very substantial advantage in being able to make an opening statement which is almost always not followed by a rebuttal on the part of the defence. What the community expects is a clear statement by the prosecution of what evidence the prosecution proposes to call and to provide a framework against which that evidence is to be evaluated. This is particularly of importance in what is likely to be a long case with complex facts and difficult issues for resolution. The framework for that resolution includes not just a simple statement of the elements of the offence and a path to conviction. It requires real skill and a sense of restraint because the object of the exercise is, ultimately to assist the jury towards a focused resolution of what are, on any view, difficult issues. Evaluation of the Objections First category of objection 110.The first category of objection concerns passages in the opening which can be characterised as advocacy; expressions of personal opinion and or contain emotive language. There are a number of passages and I do not propose to cite all of them. What I propose to do is cite a sample of the impugned passages. 111.An example is to be seen in paragraph 10 of the opening. That says[43]:
112.The example in paragraph 10 to which reference is just been made needs to be read with paragraph 11 of the opening which is as follows:
113.Further, at paragraph 17 of the opening we see the following:
114.There are further passages which are marked as objectionable on the basis of the first category of objection. In some of them, for example paragraph 23, the prosecutor speaks of hiding certain facts. At paragraph 30, the prosecutor is quoted as saying that the 1st Accused and the 2nd Accused placed themselves on both sides of the deal. In my opinion, while I take the view that this is forcefully expressed, it does not step over the line and become the form of prohibited advocacy which the authorities say is unacceptable. The characterisation of the scheme as “undoubtedly clever” gets very close to the line of what would be acceptable in an opening but, in my opinion, it does not step over the line. In expressing this view, I proceed upon the assumption that there will be, the appropriate prefacing of these remarks by the proposition that this is the prosecution case and not the personal opinion of the prosecutor. 115.A further species of objection under this heading concerns the role of the Stock Exchange of Hong Kong Limited. For example, at paragraph 33, there is a reference to the Stock Exchange acting “as a gatekeeper to try to keep the market transparent and honest. The reasons are clearly to protect investors and shareholders by making sure companies tell the truth about what they are marketing and to promote a transparent, open and fair marketplace for everyone”. It could be argued that this spills over into the objections concerning the law and practice of the Stock Exchange which is the subject of the third objection. Again, however characterised, it seems to me that this is clearly an expression of the prosecution case firmly put. Second category of objection 116.The second objection is that there are assertions in the opening which are not to be found in the evidence. Again, there are a number of examples. At paragraph 25 of the opening, the passage which is impugned is: “We believe he already knew of her status at 462 and that is why he contacted her”. On any view, the expression “we believe” is objectionable. Apart from that, what is asserted in the passage I have just quoted is essentially an inference from prove facts. The fact that the prosecution may, in the end, not be able to establish that inference is not to the point. If the passage was expressed “It would be open to you to conclude he already knew of her status at 462 and that is why he contacted her”. Then, in my opinion, no objection could be made on this ground. Third category of objection 117.The third category of objection concerns what are asserted to be tendentious and/or partial summaries of the relevant law. Again, my preferred approach is to use examples. The first comes from paragraph 42 of the opening. The passage is as follows: “You may have heard of a Reverse Takeover. It is where someone or some private company buys a controlling shareholding in a listed company and then ‘injects’ an asset into it. It is a way of listing the asset without the checks and scrutiny I have explained to you. The [Stock Exchange of Hong Kong Limited] does not permit this to happen and seek to prevent such takeovers if they can, but it is not always easy”. In my opinion, the problem here is not a statement of law although there is some law which underlies the statement. This is more a statement of policy and it is open to the prosecution to put forward their understanding of the policy of the Stock Exchange of Hong Kong Limited. 118.Another example of this third objection may be seen in paragraph 46 of the opening. This is a long passage and the whole of that is impugned. The passage reads: “It follows that chief among the director’s duties is the duty to disclose, to make known to both the company and the [Stock Exchange] if he had a personal interest that might conflict with the interests of the company. As a director it is paramount that you are full and frank in your disclosure and do not hide matters that might influence or affect investors when they decide whether to trust the company with their money; they must be allowed to know the whole truth and to make their own informed decisions. The director’s duty is therefore not only to tell the truth but not to hide matters either. He must approach the company’s business with a clear and open mind so that he makes the best choices for the company. He may not keep to himself things which might sway the judgment one way or the other”. 119.The impugned passage in paragraph 46 of the opening is part of the prosecution’s summary of what a director’s duties are. To say the least, as I understand the prosecution case, that is utterly critical to the prosecution. At the heart of the prosecution case is the assertion that the 1st Accused (the prosecution use “Jack”) abjectly failed in his duties as a director. That there might be a different view is relevant but not finally determinative. Unless I could be persuaded that the view of the prosecution is utterly untenable then it seems to me that what is said here is a view the prosecution is entitled to put. Even if I was persuaded to take a different view, what matters is Rule 3 of the Listing Rules which the jury will see and in respect of which, in due course, I intend to give appropriate directions. Whilst the impugned passage might conceivably be accused of over-simplification, I do not regard this in the context as objectionable. Fourth category of objection 120.The final category of objections - the fourth category - is matters the subject of further ruling. I do not intend to take this further at the moment. Resolution 121.Ultimately, the analysis I have undertaken against the principles of law and practice as I understand them to be is, of necessity, prospective rather than retrospective. I profoundly appreciate those representing the accused raising the issue at this stage in order that an application to discharge the jury may be avoided. To state the obvious, avoiding the risk of such a discharge is a highly desirable object. However, ultimately the test would have to be made as to whether there is an objection to what is actually said rather than looking prospectively. This is, with respect, not just the appropriate way to address the issue but, consistent with a smooth-running trial, the only way to address the issue. This is especially so given that the opening is likely to occupy substantial portions of two days. The idea of the prosecutor opening and then leaving it to the accused to take exception to that opening and to invite the Court to discharge the newly-empaneled jury is totally unacceptable. I mention this because it was faintly suggested by Ms Draycott, SC at one stage during submissions about one aspect of the opening that if the defence did not like that opening, they could always apply to the Court to discharge the jury after the opening. I also indicated to the parties that I had no desire to go through the prosecution’s draft opening on a line-by-line basis. I have already made rulings which will have an impact on specific passages of the opening and I hope my rulings are clear but if they are not, as will shortly appear, I intend to give liberty to apply. 122.In my judgment, looking prospectively at the draft of the opening, this is a clear, firm statement of what the prosecution case is. Looking prospectively, I do not think it is objectionable. If it is delivered appropriately it will provide the jury with a framework for analysis which they will desperately need if they are to come to a fair resolution of the case. Issue 9: Documents found at the home of the 2nd Accused 123.The prosecution seek to re-open a ruling of Anthea Pang J given on 26 October 2015 in respect of two documents found in the bedroom of the 2nd Accused. They are letters of appointment and resignation which purport to be signed by Luo Ji and Ng Yat Fung Miranda who were, at one time, members of the Board of Directors of 462. Critically, these two persons were on the Board of Directors at the time of the decision to permit conversion of the convertible notes into shares. 124.The case for the prosecution is that these documents show that both of these to name persons were recruited to promote the interests of UBFM rather than 462 and gave the 2nd Accused the option of dismissing them at will. The prosecution contend that whether or not the signatures on the document are those of the two named persons the documents show the intention of the 2nd Accused to control the Board of Directors of 462. 125.In the ruling of Anthea Pang J of 26 October 2015, she restated the prosecution argument I have just summarised and she observed:
126.The prosecution submitted that the possession of these letters of resignation shows that the 2nd Accused was in control of the signatory’s position on the Board of Directors of 462. The prosecution contend: “She held in her hand the means to get rid of them at will”. The prosecution goes on to argue that this was evidence that it was the intention of the 2nd Accused when they were appointed that they should further her agenda rather than the best interests of 462, as they were obliged to do. 127.The prosecution went on to argue that it did not matter whether the documents were genuine. The prosecution contended that the judgment of Anthea Pang J conflates the issue of the truth of the contents with the reason that the 2nd Accused had the documents. It also conflates the documents and the purpose to which you could put them. In oral argument the prosecutor went as far as to suggest that even if they were forgeries the 2nd Accused could use them to get the two named persons off the Board if they did not do her bidding. There was an additional document of resignation from the Board of Directors of 462 which purported to be signed by Mr Wu Neng Kun. This Mr Wu was, apparently, the nephew of the 1st Accused. 128.In my judgment, if the documents were genuine then there was some evidence from which it could be inferred that the 2nd Accused intended to control the appointments of the two named persons. It is not good enough to say, as the prosecution does, that there is no reason to suppose that the documents are not genuine. As Anthea Pang J observed: “Without any evidence as to who prepared these documents, when, where, and under what circumstances were they prepared, they were simply documents with some scribblings or writings on them”. In my view, the documents only have probative value if they were genuine. Absent that, they are just documents. 129.I disagree with the prosecution contention that these documents could have been useful even if they were fake. In my view, that assumes without any proper foundation that 462 or it is officers were suitably gullible or pliable so as to act on these documents. 130.In short, I am in respectful agreement with the ruling of Anthea Pang J including her ultimate holding that even if the documents were admissible, any probative effect of the documents is outweighed by their capacity to cause prejudice. The documents are, accordingly, held to be inadmissible. Conclusion 131.The object of hearing submissions over a number of days in relation to the issues raised in this case was to have the issues resolved before the commencement of the trial in order to promote the smooth-running of that trial. The first trial was constantly punctuated by issues in which the parties sought rulings from Anthea Pang J. From my reading of the transcript and her rulings, these were dealt with quickly and firmly. However, of necessity there were rulings from time to time in which the natural order of things was that the jury were sent away for some time while issues were raised. In my opinion, this will be a hard enough trial for the best of juries to comprehend. Those punctuations for the jury while counsel and the Court resolve issues of law and admissibility are not conducive to jury comprehension. Of course, there will be times when there will be a necessary punctuation for this purpose. It is important that these be kept to a minimum out of consideration for the jury. 132.Of course, prospective rulings such as these may require refinement as circumstances develop and there may not be complete clarity in the rulings that I have given. Accordingly, I indicate that there will be liberty to apply as far as these rulings are concerned.
Ms Charlotte Draycott SC leading Mr Li Chun-ngai Martin, 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 1st accused Mr Ian Winter QC leading Mr Cao Yuan-shan and Ms Betty Chiu instructed by Haldanes, for the 2nd accused Mr David A S Khosa, instructed by Hobson & Ma, for the 3rd accused [1] Prosecution’s Reply on Disclosure dated 4 February 2021, §5 & 6. [2] Prosecution’s Reply on Disclosure dated 4 February 2021, §8. [3] Ibid. [4] (2003) 6 HKCFAR 336, §170 & 171. [5] R v Joof & Ors [2012] EWCA Crim 1475, at para [17]; HKSAR v Ng Chun To Raymond (吳鎮濤) & Anor [2013] 5 HKC 390, [2013] HKCU 1731, at para [75]. [6] HKSAR v Sze Mei Mun & Ors [2014] 5 HKC 513, [2014] 3 HKLRD 452; R v Flook [2010] 1 Cr App R 30; HKSAR v X [2016] 4 HKLRD 387, [2016] HKCU 1907. See also: BA v Attorney-General [2017] VSC 259, 266 A Crim R 497, 319 FLR 329 [7] As Anthea Pang JA then was. [8] Ruling dated 16 October 2015, §8 & 9. [9] Ruling dated 16 October 2015, §11. [10] Ruling dated 23 October 2015, §8 & 9. [11] Revised Draft Opening, §64 & 65. [12] Draft Opening dated 24 February 2021 (updated), §72. [13] Ibid. [14] Ruling dated 16 October 2015, §32-36. [15] Prosecution’s Reply to the Defence Joint Submissions dated 29 January 2021, §1. [16] Ruling dated 23 October 2015, §8 & 9. [17] Ruling dated 16 October 2015, §33. [18] Draft Opening, §284. [19] Prosecution’s Reply to the Defence Joint Submissions dated 29 January 2021, §11. [20] Ruling dated 16 October 2015, §26-31. [21] R v Chan Kwok Keung & Anor [1990] 1 HKLR 359 at 363; HKSAR v Yuen Yu Kin [2018] 4 HKLRD 717, [2018] HKCU 1996, [2018] HKCA 354; HKSAR v Zhou Limei [2020] 1 HKLRD 234, [2018] HKCA 592. [22] Winnie Lo v HKSAR (2012) 15 HKCFAR 16, §114-116; HKSAR v Wong Tak Keung (2015) 18 HKCFAR 62; HKSAR v Ferosh (2018) 21 HKCFAR 159. [23] DPP (NSW) v JMR (1991) 57 A Crim R 39, 43-44. [24] See, for example, HKSAR v Wang Jinwei & Ors [2018] 1 HKLRD 459. [25] Draft Opening, §2. [26] Draft Opening, §2 & 12. [27] Draft Opening, §2. [28] Joint Defence Skeleton Argument on pre-trial matters, §54. [29] Joint Defence Skeleton Argument on pre-trial matters, §56. [30] Witness statements dated 18 and 28 January 2021 by Li Kai Pong in the Bundles of Additional Evidence (1) & (2). The statements simply records that Mr Li examined the hard disk. It does not assert that he found the hard disk at the residence of the 2nd Accused. [31] Bundle of Additional Evidence (2) dated 28 January 2021 at AE 49 to AE 51. [32] Bundle of Additional Evidence (2) dated 28 January 2021 at AE 52 & AE 53. [33] As will shortly appear, Boucher was cited with approval in relatively recent times by the Privy Council in Randall v R [2002] UKPC 19, [2002] 1 WLR 2237. That case is discussed later in these reasons. [34] (1954) 110 CCC 263, 270. [35] (2007) 217 CCC (3d) 266, §336-338. [36] [1959] HKLR 141, 154-155. The quotation attributed to Sir Michael Hogan CJ in Archbold Criminal Law Pleading Evidence & Practice, Hong Kong is not accurate. [37] [1976] 2 NZLR 644, 654. [38] This decision is cited in Archbold Criminal Law Pleading Evidence & Practice, Hong Kong, §4-123. [39] [2001] NSWCCA 64, 122 A Crim R 1, §52. [40] [2002] UKPC 19, [2002] 1 WLR 2237, §9. [41] [2002] UKPC 19, [2002] 1 WLR 2237, §10(1). [42] [2005] EWCA Crim 2016, [2006] Crim LR 83, §13. [43] The underlining is to mark the passages which were the subject of the objection in the submissions of the accused. |
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