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 27 March 2023.
1. On 29 April 2016, the three accused (hereinafter referred to as “ D1 ”, “ D2 ” and “ D3 ” respectively) were convicted on two counts of conspiracy to defraud contrary to common law after trial before Anthea Pang J, as Anthea Pang JA then was, and a jury (HCCC 83/2014, “ the 2016 trial ”). D1 was also convicted on a count of money laundering in respect of his dealing with the alleged proceeds of such conspiracies to defraud (Count 3). Their convictions were subsequently quashed by the Court
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HCCC 309/2019 [2023] HKCFI 1670 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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_______________________________ REASONS FOR RULING _______________________________ Background 1.On 29 April 2016, the three accused (hereinafter referred to as “D1”, “D2” and “D3” respectively) were convicted on two counts of conspiracy to defraud contrary to common law after trial before Anthea Pang J, as Anthea Pang JA then was, and a jury (HCCC 83/2014, “the 2016 trial”). D1 was also convicted on a count of money laundering in respect of his dealing with the alleged proceeds of such conspiracies to defraud (Count 3). Their convictions were subsequently quashed by the Court of Final Appeal with a retrial ordered. The retrial was heard before Deputy High Court Judge Bruce SC and a jury in 2021. On Day 57 of the retrial, a prosecution witness gave unsolicited evidence which was prejudicial to the accused. Upon the defence application, DHCJ Bruce discharged the jury and the retrial was aborted as a result (HCCC 309/2019, “the 2021 trial”). 2.The second retrial is now scheduled to recommence on 3 July 2023. Prior to its commencement, the defence jointly raised a number of pre-trial matters[1] including (i) whether the indictment in its present form engaged the principle of double jeopardy; and (ii) whether the prosecution case consisted of certain unindicted allegations. 3.After hearing submissions in February 2023, I gave my ruling on the above matters on 27 March 2023. I will now give my reasons. Double Jeopardy Indictment 4.In HCCC 83/2014, Count 1 alleged a conspiracy to defraud the Stock Exchange of Hong Kong Limited (“SEHK”) and Count 2 alleged a conspiracy to defraud China Jin Hui Mining Corporation Limited, a company listed on the SEHK (stock code “462”) and its existing shareholders. The particulars of Count 1 alleged that the three accused, between 7 May 2009 and 8 September 2009, in Hong Kong, conspired together to defraud the SEHK by dishonestly:
5.The Statement of Offence and the parties to the conspiracy specified in Count 2 were the same as in Count 1. It was alleged that the three accused, between 7 May 2009 and 19 July 2010, in Hong Kong, conspired together to defraud 462 and its existing shareholders by dishonestly making the same false representations and effecting the same concealments and non-disclosures as those set out in Particulars (a) to (e) in Count 1. Particulars (f) and (g) of Count 2 alleged as follows:
6.The accused’s convictions were quashed by the Court of Final Appeal[2] on the ground that each of Counts 1 and 2 alleged two conspiracies with different agreed dishonest means in a single count. A retrial was ordered with the prosecution being at liberty to amend the indictment or to prefer a fresh indictment. 7.On the fresh indictment (HCCC 309/2019), the conspiracy charges in Counts 1 to 4 provide as follows:
Defence submission 8.The defence submitted that the indictment of HCCC 309/2019 in its present form would infringe the rule against double jeopardy given that particulars (a)-(c) in Count 1 are identical to those in Count 3, and particulars (a)-(b) in Count 2 are identical to those in Count 4. These “twin charges” allege an agreement to use exactly the same dishonest means commencing on exactly the same date, the only difference being the intended victim. It follows that the accused could not lawfully be convicted of the twin charges unless the jury are sure that the conspiracy in Count 3/Count 4 was a separate conspiracy from that in Count 1/Count 2. 9.Reference was made to the case of R v Ali (Ahmed) and Others[3] where the indictment included counts both for conspiracy to murder persons unknown (count 1A) and for conspiracy to commit such murders by the detonation of IEDs on board transatlantic passenger aircraft (count 1). An issue arose as to whether some of the defendants might only have agreed to commit murder on a smaller scale and by different methods, albeit that the proposed substantive offence would be the same in each case. In that case the English Court of Appeal held:[4]
10.In the case of Ali, the court was nevertheless satisfied that the indictment addressed two distinctively different agreements as to the method and scale of the murder to be carried out. The two counts were different in fact and in law for the purpose of autrefois convict. 11.The principle in Ali was applied by the English Court of Appeal in SFO v Papachristos.[5] 12.The defence argued that the present case involves one single agreement to defraud two different victims. The mere existence of two alleged victims does not establish by and of itself the existence of two separate conspiracies. There is no evidential basis upon which the jury could conclude that both of Counts 1 and 3 and both of Counts 2 and 4 were committed on the basis of four distinct conspiracies. The current indictment is therefore defective as it gives rise to double jeopardy. 13.The defence proposed, for the sake of simplicity and clarity, either the jury be discharged from giving a verdict on Count 3/Count 4 once a verdict is returned on Count 1/Count 2. An alternative would be for the prosecution to elect to proceed with which of Counts 1 and 3, and which of Counts 2 and 4, the other Counts being withdrawn from the jury. 14.In his submissions Mr Owen KC suggested the prosecution to proceed with Count 1 and Count 4 only. He said Count 3 could be withdrawn because the economic interests of 462 were not endangered by the same false representations to the SEHK alleged in Count 1. Likewise, Count 2 could be withdrawn because the SEHK was not defrauded into failing to discharge its public duty by the pleaded particulars in Count 4. Prosecution submission 15.Mr Mitchell submitted that the issue of double jeopardy does not arise. The objects of the conspiracies are clearly distinct, not only in terms of the intended victim but also in terms of the state of affairs to be intended. They also have different end dates. Hence the finding of guilt on each count is independent. Further, the prosecution are not required to prove each of the particulars in each count such that a jury could find an accused guilty on different counts and in respect of different particulars. 16.Mr Mitchell contended that the deceit against 462 and the deceit against SEHK represented two interlocking but distinct steps to ensure that the acquisition could take place. The deceit against 462 had to take place in order for the deceit against the SEHK to follow:
17.As for the dishonest means intended and used between Counts 1 and 3 and those between Counts 2 and 4, Mr Mitchell said they were different in the following respects:
18.Regarding the authorities relied upon by the defence, Mr Mitchell submitted that the case of Ali supports the prosecution’s position. In that case the court emphasised the necessity to focus on whether there was a different agreement alleged in separate counts. The court was satisfied that count 1 alleged an infinitely more serious and sophisticated agreement than that of count 1A. Notwithstanding that all the defendants were party to both agreements, and notwithstanding the possibility of charging one single conspiracy to murder, the court concluded that it was appropriate to allege and charge two separate conspiracies. 19.Mr Mitchell said the case of Papachristos is distinguishable. There the court was concerned with the fairness of adding a second count which did not allege a different or separate conspiracy. In other words, both counts in that case alleged the same common purpose. Whereas in the present case, the prosecution are not alleging the same common purpose. 20.In respect of the defence suggestion for the prosecution to reduce the current four counts to two counts, Mr Mitchell disagreed, pointing out that most of the issues pertinent to the current four counts would be equally pertinent to just two counts. Consideration 21.I should point out that a similar argument had been raised by the accused in their appeal against convictions in HCCC 83/2014. In that appeal, it was contended that the same fraud was prosecuted twice because the particulars in both counts were identical. The argument was rejected by the Court of Appeal for the following reasons:[7]
22.I am in respectful agreement with the analysis of the Court of Appeal on this matter. 23.In the present case, it is apparent that the objects of the conspiracies alleged in Counts 1-4 were distinct steps in the process of the acquisition. The achievement of the object of Count 1 was a step to achieving the ultimate object (462 approving the acquisition and to issue convertible notes for its payment) which was the object of Count 3. Likewise, the achievement of the object of Count 2 was a step to achieving the object of Count 4. 24.I am satisfied that the current Counts 1-4 are four related but separate conspiracies representing distinct steps to defraud different alleged victims. As such the prosecution are entitled to proceed with these four counts on the indictment. Conclusion 25.The defence submission that the current form of the indictment infringes the rule against double jeopardy is rejected. The unindicted allegations 26.The defence sought a ruling that it is not permissible for the prosecution to rely on certain allegations in connection with the following eight items on the ground that they are unindicted allegations:
27.In respect of item (1), Mr Winter KC contended that this is fundamentally untrue. He said that at the very first time D2 met PW1 in the presence of D1, D2 made a PowerPoint presentation setting out the nature of this deal including the ownership of the farms. Subsequent email exchange also indicated that PW1 clearly understood that the farms were owned by the CraFarms, not D2. 28.In respect of item (2), Mr Winter contended that “working together” cannot be defined. D1, D2 and PW1 had been working extremely hard together to put this deal in place. Therefore all of D1, D2 and PW1 were working together on any level. So working together must mean something else. 29.Mr Mitchell submitted that “working together” is a general phrase which has no special meaning. There is nothing unusual about this phrase as co-conspirators would be working together to achieve the objects. He pointed out that this phrase was actually used in connection with one of the complaints (that D1 and D2 had been working together out of the premises in Auckland) forwarded by the SEHK. It was part of a whole series of questions raised by the SEHK, and they all tied up with the responses which were given by 462 on the representations made by D1 and D2. 30.In respect of item (3), Mr Winter said this is an untrue allegation. He said the documents written at that time clearly demonstrate that D2 did provide the valuation for the farms. 31.Mr Winter objected to item (4) as an allegation of a different crime which was unindicted, whereas Mr Mitchell argued the fiduciary duties of D1 as a director and chief executive officer of 462 have long been recognised in law. 32.In respect of item (5), Mr Winter contended that this allegation was based on a complete misunderstanding of the corporate fundamental difference between the UBNZ companies and the New Zealand farm companies. The only accounts that D2 would produce would be assumed basis account of UBNZ because UBNZ had never owned or run farms. Nonetheless it had nothing to do with D1. 33.In respect of item (6), Mr Winter argued that if this was a fraud that D1 and D2 would split the proceeds of the difference between the two purchase prices, they should have been so indicted a long time ago. Mr Mitchell was unclear as to how this became an allegation in the 2021 trial, but he observed that invariably frauds are perpetrated to achieve some financial gain. 34.In respect of item (7), Mr Winter contended that the allegation is untrue. Not only did PW1 know that, she specifically asked D2 to provide the name of the solicitor in New Zealand that she was already using, which D2 did. 35.In respect of item (8), it was the case of D1 and D2 that the NZ$51.6 million was part-payment of the share sale consideration price required under the original contract. So, D2 had the right to dispose of those monies as she chose. The defence accepted that the mere fact of the release of the money is admissible because it is alleged to be part of the intended result of the fraud, but it cannot be admitted as separate dishonesty. 36.To this regard Mr Mitchell said the prosecution would not allege separate dishonesty but would regard the payment to D2 and the division by her between the purchase of the four farms as evidence of dishonesty of both D1 and D2, and evidence that they had been and continued to be working together to share the profit in the price difference between the purchase of the farms from the Crafars and the sale to 462. 37.As for the remaining items (1), (3), (5) and (7), Mr Mitchell said that would simply be a matter of evidence. 38.The prosecution’s position was that all these matters were part and parcel of the whole scenario of events which are the substance of the charges on the current indictment. There is no reason why they should not be put before the jury. 39.I agree that the alleged items are matters of evidence and there is no proper basis for me not to permit the prosecution to make the allegations properly based on th e evidence. Whether they are accepted by the jury is a matter solely for them. 40.In respect to the NZ$51.6 million transfer, I respectfully agree with DHCJ Bruce in his ruling on the accused’s application for stay of proceedings that “the issue of whether the payment was unauthorised … certainly, if true, strengthened the prosecution case to a very substantial degree.”[8] 41.For the above reasons I rule that the prosecution are entitled to rely on the aforesaid allegations. Conclusion 42.The defence submission in relation to the unindicted allegations is rejected. Postscript 43.These reasons are provided for the parties’ information only. The only part of this judgment which may be reported publicly are the above Conclusions. The remaining part of this judgment may not be reported until further order or until the conclusion of the trial.
Mr Neil S Mitchell, Counsel-on-fiat, leading Miss Ng Oi Lam, Joycelyn, SPP of the Department of Justice, and Mr Li Chun Ngai, Martin, Counsel-on-fiat, for the Prosecution Mr Tim Owen, K C, leading Mr Benson Y M Tsoi, instructed by Boase, Cohen & Collins, for the 1st Accused Mr Ian Winter, K C, leading Ms Betty Chiu, instructed by Haldanes, for the 2nd Accused The 3rd Accused appeared in person [Subject to Reporting Restrictions as per Paragraph 43 of this judgment] [1] D3 was unrepresented at the hearing of the arguments. He fully adopted all the arguments raised on behalf of D1 and D2 by counsel acting on their behalf. [2] FACC 26, 27 and 28 of 2018, (2019) 22 HKCFAR 248 [3] [2011] 2 Cr App R 22 [4] at paragraph 37 [5] [2014] EWCA Crim 1863 [6] CACC 172/2016, [2018] HKCA 121 [7] [7] CACC 172/2016, [2018] HKCA 121, at paragraphs 40, 42, 92 and 94 [8] HCCC 309/2019, [2021] HKCFI 3567, at paragraph 115 | |||||||||||||||||||||||||||||||||||||||||||
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