HKSAR v. Cheah Hanson

CACC 134/2019

[2024] HKCA 825

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 134 OF 2019

(ON APPEAL FROM DCCC NO 184 OF 2014)

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J U D G M E N T

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Hon Macrae VP (giving the Judgment of the Court):

1.The applicant and his co-defendant (Chow Yuen-kong, hereinafter referred to as “D2”) were charged in the District Court, both individually and jointly, with various fraud related offences. So far as the applicant was concerned, he was charged jointly with D2 with one charge of fraud (Charge 1), two charges of using a false instrument (Charges 3 and 5), and one charge of dealing with property known or believed to represent the proceeds of an indictable offence (Charge 8). The applicant also faced two further charges of fraud (Charges 2 and 4) and one of possessing false instruments (Charge 6), which were alleged against him individually.

2.On 30 November 2018, following a trial before HH Judge K Lo (“the judge”), the applicant was convicted on all charges, and, on 17 April 2019, sentenced to 5 years’ imprisonment. He subsequently filed an application for leave to appeal against both conviction and sentence on 29 April 2019, within the time limit prescribed.

3.On 28 September 2020, the applicant was refused leave to appeal against conviction and sentence by the Single Judge[1], counsel having advanced on behalf of the applicant 10 grounds of appeal against conviction, all of which were dealt with seriatim by the Single Judge in his judgment. On 8 October 2020, he filed a Notice of Renewal of his application for leave to appeal against conviction only. It is to be noted that none of the 10 original grounds of appeal concerned any allegation of flagrant incompetence by his trial lawyers.

4.On 10 November 2020, the applicant raised with the Registrar of Criminal Appeals for the first time by way of correspondence two new grounds of appeal, which he now, at this appeal, relies upon concerning the conduct of his leading counsel at trial. The grounds were not, however, formally put into writing as grounds of appeal in a set of re-re-amended perfected grounds of appeal against conviction until 6 January 2023. It follows that by November 2020, when these grounds were first mentioned in correspondence with the Registrar of Criminal Appeals, they were out of time by some 18 months and had not been considered by the Single Judge. By the time they were eventually articulated as formal grounds of appeal, they were out of time by some 3 years and 9 months.

5.We asked the applicant to explain why these new grounds had not been advanced before the Single Judge in 2020 through counsel representing him at the time. He explained that he did not realise that flagrant incompetence could be a ground of appeal and did not have the benefit of legal advice in custody before the hearing. We cannot accept his explanation. The applicant is an intelligent, educated man. If he believed that his case had not been adequately or properly put by his leading counsel at trial, we cannot believe he would not have raised the matter with his new counsel and solicitors at the time he was represented at his leave hearing before the Single Judge. And even if he did raise the matter, he appears to have accepted the way the grounds were presented on his behalf by counsel at the leave hearing.

6.The result is that the applicant has clearly not adhered to the procedural time limits and requirements (by applying for an extension of time and providing an explanation for the delay in filing the new grounds) in seeking to renew his application for leave to appeal against conviction on these two new grounds of appeal. This Court has recently seen fit to reiterate its concern about conforming with time limits in HKSAR v Ahmed Shahnwaz[2]:

“An applicant seeking an extension of time in which to appeal bears the burden of providing an explanation that satisfactorily explains the delay. There must be good and substantial reasons for the delay before an extension of time is granted. The hurdle is even higher when an extension of time is sought to advance a new ground after refusal of leave by the Single Judge: HKSAR v Yim Shek Wo[3]. …”

7.Advancing any new ground of appeal after the hearing of the leave application has been determined, seriously undermines the appellate process and the administration of justice, because the applicant has thereby failed to give appropriate notice and allow timeous consideration of the ground in question. This is a particularly serious failure where the new ground concerns an attack on the conduct of trial counsel, who are then required to remember the circumstances of a case conducted years before. In the present case, the verdict was delivered on 30 November 2018: the order of the Registrar of Criminal Appeals requiring the defence team to answer the applicant’s allegations, was issued on 26 April 2021. When the re-re-amended perfected grounds of appeal against conviction were eventually filed, the Court requested, on 16 January 2023, a further response from the applicant’s legal representatives at trial to the allegations made against them. This resulted in the hearing fixed for 17 February 2023 being vacated. This chronology exemplifies how the administration of justice can be adversely affected by an inordinate delay in filing grounds of appeal.

8.In future, we do not expect the Registrar of Criminal Appeals to require trial counsel to answer any complaint unless and until formal grounds of appeal alleging flagrant incompetence are articulated in a set of perfected grounds of appeal against conviction. To do otherwise is to encourage a ‘fishing expedition’ by applicants on appeal in the hope that something will turn up in counsel’s affirmation, which may then form the basis of a ground of complaint.

9.Moreover, where an applicant delays any complaint of flagrant incompetence against his legal representatives until after his application for leave to appeal on other grounds of appeal has been heard and determined by the Single Judge, it will inevitably call into question the very genuineness and validity of his complaint, and run the risk of being seen as a ground of last resort.

10.At the trial before the judge, the applicant was represented by leading counsel, Mr Ching Y Wong SC (“Mr Wong SC”) leading Mr Wong Tong Kwong, Mr Peter Wong and Mr Leung Hon Kei, Mark. At the hearing of his renewed application before this Court, the applicant acted in person, although, as we have said, he was represented by different counsel at the hearing before the Single Judge.

Particulars of the charges

11.Charge 1, a joint allegation against the applicant and D2 of fraud, contrary to section 16A of the Theft Ordinance, Cap 210, averred that, between early August and 16 August 2008, the two defendants by deceit, namely by falsely representing to Sami Said Al-angari (hereinafter referred to as “PW1”) that there was an investment program called a Bond Trading Program, in which he could invest a principal of US$1 million to be placed on deposit at the Hong Kong and Shanghai Banking Corporation (“HSBC”), and after 3 months, he would receive a minimum profit of US$4 million plus his principal, induced him to remit US$1 million to the applicant’s account, which resulted in benefit to themselves, or in prejudice or a substantial risk of prejudice to PW1.

12.Related to Charge 1 was Charge 8, in which the applicant and D2 were jointly alleged to have dealt with property known or believed to represent the proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organised and Serious Crimes Ordinance, Cap 455. It was averred that, on or about 20 August 2008, the applicant and D2, together with Li Jing-qian (“LJQ”), dealt with the sum of US$1 million particularised in Charge 1, knowing or having reasonable grounds to believe that it represented the proceeds of an indictable offence.

13.Charge 2 was an allegation of fraud against the applicant alone and averred that, between 16 and 20 August 2008, the applicant by deceit, namely by falsely representing to PW1 that an overpayment of US$1 million to the HSBC bank account in his name on 16 August 2008 would be invested in an investment program similar to that mentioned in Charge 1, and induced him to believe that the sum would be so invested, which resulted in benefit to the applicant, or in prejudice or a substantial risk of prejudice to PW1.

14.Charge 3 alleged that the applicant and D2 had jointly used copies of false instruments, contrary to section 74 of the Crimes Ordinance, Cap 200, in that, on a day in 2009, the applicant and D2 used copies of false instruments, namely a time deposit certificate dated 12 March 2009 showing a deposit of £6,000,000,000 and a “Confidential Memo” related to the time deposit certificate that were both purportedly issued by HSBC, which were, and which they knew or believed to be, false, with the intention of inducing somebody to accept them as copies of genuine instruments, and by reason of so accepting them to do or not to do some act to his own or any other person’s prejudice.

15.Charge 4 alleged fraud against the applicant alone and averred that, between 28 October and 23 November 2011, the applicant by deceit, namely by falsely representing to PW1 that a sum of US$70,000 was needed to pay bank charges for the release of US$2 million to PW1, and induced the latter to remit the sum of US$70,000 to the applicant’s account, which resulted in benefit to the applicant, or in prejudice or a substantial risk of prejudice to PW1.

16.Charge 5 was an allegation of using a false instrument, contrary to section 73 of the Crimes Ordinance, Cap 200, in which it was averred that, on or about 2 November 2012, the applicant and D2 jointly used a false instrument, namely an image file of a letter dated 2 November 2012, purportedly issued by Standard Chartered Bank (Hong Kong) Limited (“SCB”) stored in the internal memory of a Samsung mobile telephone which was and which they knew or believed to be false, with the intention of inducing somebody to accept it as genuine, and by reason of so accepting it to do or not to do some act to his own or any other person’s prejudice.

17.Charge 6, which was laid against the applicant alone, was an allegation of possessing false instruments, contrary to section 75(1) of the Crimes Ordinance, Cap 200, in which it was alleged that, on or about 20 November 2012, the applicant had in his custody or under his control instruments, namely (a) an internal computer hard disk containing: (i) 5 image files of time deposit certificates; (ii) 5 image files of “HSBC EuroClear Password” relating respectively to time deposit certificates purportedly issued by HSBC; (iii) 4 image files of a “Confidential Memo” relating respectively to time deposit certificates purportedly issued by HSBC; (iv) 4 image files of a “Confirmation Letter” relating respectively to time deposit certificates purportedly issued by HSBC; (v) 4 image files of documents containing bank codes relating respectively to time deposit certificates purportedly issued by HSBC; (vi) an image file of a certificate showing a balance of US$5,000,000,000 purportedly issued by HSBC; and (vii) an image file of a letter entitled “Availability and Reservation of Funds” purportedly issued by HSBC; (b) an internal memory of a Samsung mobile telephone containing an image file of a letter dated 2 November 2012 purportedly issued by SCB; and (c) an “Asset Management Agreement” (AMA”) dated 14 August 2008 purportedly signed by PW1, which were and which they knew or believed to be false, with the intention of inducing somebody to accept them as genuine, and by reason of so accepting them to do or not to do some act to his own or any other person’s prejudice.

The prosecution case

18.The central allegation in the case against the applicant was that he and D2 had defrauded a Saudi Arabian businessman, PW1, who testified as witness for the prosecution at trial. In 2007, the applicant, who had no previous convictions in Hong Kong, became acquainted with PW1, to whom he represented himself as an experienced fund manager. The applicant subsequently introduced PW1 to a Bond Trading Investment programme, variously referred to as a Bond Trading Programme (“BTP”) or Private Placement Programme (“PPP”). PW1 was invited to invest a principal sum of US$1 million to be deposited with HSBC for a period of 3 months, whereupon he would receive a minimum profit of US$4 million plus the initial principal.

19.On 13 August 2008, the applicant sent an email to PW1, detailing the terms of the investment[4], and enclosing an AMA for him to sign (Exhibit P36(1)[5]). The AMA attached to the email bore the date 14 August 2008 and was between Fortress World Limited, represented by the applicant who was stated to be its Executive Director, referred to as the Asset Manager, and PW1, referred to as the Fund Contributor. It set out the terms and conditions as essentially stated in the covering email. It also listed the HSBC bank account of Fortress World Limited and the contact details of the bank officer responsible for the account, a Mr Ronnie Kan. The AMA also stated that the applicant and D2 were shareholders and directors of Fortress World Limited and the only two signatories to the bank account. The applicant did not dispute that the contact particulars and the name of the HSBC bank officer were false.[6] It was also not disputed that a draft of the AMA had previously been sent by D2 to the applicant by email (Exhibit P37(1)[7]), which instructed the applicant to amend the draft “for the USD1 million from PW1”[8].

20.On 16 August 2008, intending to remit US$1 million to the applicant, PW1 mistakenly remitted a total sum of US$2 million[9]. Since PW1 at that time trusted the applicant, he remitted the sum to the applicant’s personal account with HSBC in Hong Kong, as provided by the applicant[10]. On 20 August 2008, the applicant emailed PW1 and made a proposal that the applicant would look for a similar programme to the PPP for the overpayment of the US$1 million. PW1 agreed to the applicant’s proposal.

21.Rather than investing in the two purported investment programmes, PW1’s funds were transferred to other bank accounts without his approval. On the same day that PW1 remitted the US$2 million, the applicant transferred US$1 million of PW1’s funds to an account held by LJQ (“the LJQ account”). On or about 21 August 2008, the applicant exchanged a sum of US$75,000 in his bank account for HK$584,842.50, before transferring the sum of HK$585,000 to another bank account with Hang Seng Bank held in the name of Highlink Corporation Limited (“Highlink”). On or about 18 September 2008, the applicant transferred a sum of US$385,926.54 to a bank account with Hang Seng Bank held in the name of Travelzen Group Ltd. About 4 days later, the applicant exchanged the sum of US$50,000 for HK$388,345 and on the same day transferred a sum close to HK$2 million to the LJQ account. On or about 3 October 2008, the applicant transferred the sum of US$198,428.04 to a bank account with SCB held in the name of a person called Foo Boon-seng. On or about 10 October 2008, the applicant further transferred a sum of US$150,000 to an account with HSBC held in the name of Chiu Tak-keung, Duncan.

22.When, after November 2008, PW1 found that he had not received any return as promised from the purported PPP, he persistently requested the applicant to end the investment and return his money. The applicant gave various excuses to delay the repayment of the funds, telling PW1 that the funds were invested and producing documents to confirm that position. On a day in 2009, the applicant had a meeting with PW1 in Hong Kong, during which he gave to PW1 a colour copy of a time deposit certificate purportedly issued by HSBC and dated 12 March 2009 showing a deposit of £6 billion (Exhibit P125), and a confidential memo relating to the said time deposit (Exhibit P124). These two documents, which were the two instruments particularised in Charge 3, were admitted by the applicant to be false.

23.On 22 November 2011, the applicant emailed PW1 saying that he was short of US$70,000 for a bank invoice fee and asked PW1 to lend him the sum in order to have the funds released. The applicant further said that upon release of the funds, the applicant would immediately return the US$70,000 and the US$2 million. As a result, PW1 transferred the said sum to the applicant’s bank account. By mid-June 2012, PW1 still had not received any money from the applicant[11], save for a sum of US$100,000 on 11 March 2009[12].

24.On 2 November 2012, PW1, his solicitor (Mr Azmat Mui Moosden) and a private investigator met the applicant at the “MO Bar” in the Mandarin Hotel in Central. At the meeting, the applicant said that SCB was not able to return the £6 billion which came from various investors and was being blocked initially at HSBC. The money was then transferred from HSBC to SCB in 2009. The applicant also showed PW1 an image on his mobile telephone (Exhibit P148), displaying a letter dated 2 November 2012, purportedly issued by SCB (“Exhibit P93”), confirming that which he told PW1 and his solicitor. The letter, which was the instrument particularised in Charge 5, was also admitted by the applicant to be false.

25.On 20 November 2012, police officers arrested the applicant and seized from his residence his mobile telephone (“Exhibit P148”) and a notebook computer (“Exhibit P149”). Police officers also seized, from the applicant’s office, the AMA purportedly signed by PW1, which also bore the signatures of the applicant and D2.

26.Exhibit P148 contained an image of Exhibit P93, while Exhibit P149 contained images of the two HSBC documents (Exhibits P70 and P44(28)) and a large number of similar documents purportedly issued by HSBC or HSBC Bank PLC were particularised in Charge 6. All these images were admitted by the applicant to be false.

27.Apart from the applicant’s admission of falsity by way of admitted fact at trial, all documents particularised in Charges 3, 5, 6 and 7 were confirmed by staff members of SCB (Ms Nam Wai-yan) and HSBC (Mr Anthony Fok) to be false.

28.On 20 February 2013, the police conducted a video-recorded interview (the “VRI”) with the applicant. The voluntariness of the VRI was not disputed.

The defence case

29.The applicant elected to testify in court. In essence, he said it was D2 who was to blame for the fraud perpetrated on PW1. He claimed that he relied on D2, who had deceived him, and that he did not know that the PPP was false. The applicant believed that he and D2 were conducting legitimate investment business and he did not know that what D2 had told him was not true. In respect of PW1’s first remittance of US$2 million, US$1 million was transferred to LJQ to fund his US$680 million PPP programme. In respect of the US$1 million overpayment by PW1 in the first remittance, US$150,000 was invested into a joint venture in Qatar called Highlink, and US$150,000 was mixed with the applicant’s own funds and loaned to Foo Boon-seng. All these transfers were made with the consent of PW1. In March 2009, a sum of US$100,000 was returned to PW1. In respect of the second remittance of US$70,000 in November 2011, the applicant said that D2 asked him for help with US$70,000 being part of the bank charges for the release of US$2 million held in SCB since late 2011[13]. Therefore, he had asked PW1 to lend him the amount as a personal loan[14]. In respect of the false documents particularised in Charge 6, the applicant believed they were genuine at the time[15].

30.Following the applicant’s evidence, D2 also elected to testify. However, he was not cross-examined by counsel for the applicant[16].

The reasons for verdict

31.The judge found on the evidence that the applicant had represented to PW1 that his funds would be deposited in HSBC in Hong Kong and become part of the investment programme he offered, as evidenced by the applicant’s email to PW1 on 20 August 2008. However, after the funds were remitted into the applicant’s account, he transferred US$1 million to the account of LJQ. The judge noted that according to the applicant, the funds were paid to LJQ for him to defray bank charges purportedly to start a PPP using a bank instrument owned by LJQ at Hua Xia Bank. The judge found that the funds were not deposited into HSBC in Hong Kong, as represented[17].

32.The judge also noted that in his VRI, the applicant admitted that the AMA provided that the funds from PW1 would be deposited in HSBC in Hong Kong and were not to be used for bank charges in order for the applicant or D2 to participate in a joint venture agreement with LJQ[18].

33.The judge found that PW1 was never an investor in a PPP with HSBC or in any other PPP intended under the AMA[19]. Furthermore, the asset manager in the AMA was a company named Fortress World Limited, in which the applicant and D2 were directors and shareholders. Moreover, the particulars of the contact details of the officer at HSBC were false, which both the applicant and D2 must have known at the time[20].

34.In her reasons, the judge explained that what actually took place was as follows:

“323. The truth of the matter was that the money from PW1 was never intended by both defendants to be so applied, as was stated in the Asset Management Agreement or anything about a Bond Trading Programme with such return.

324. In court, D1 at one time did say actually when he sent the Asset Management Agreement to PW1 he did not know what would happen to the money later. I reject this evidence. It was agreed between D1 and D2 that they had, even according to their evidence, jointly decided to raise the US$1 million, they say, as bank charges for the joint venture with LJQ.

325. D1 was saying that he intended to pay the profits and the principal to PW1 on receipt of profits from the JVA between the defendants and LJQ, and that, unfortunately, the PPP with LJQ did not materialise or work out, and as said earlier in the video recorded interview with police, D1 admitted under the terms of the Asset Management Agreement that money from the PW1 should be deposited with HSBC-HK. This is counter 268, 269 of the 21 November 2012 video recorded interview.

326. It is clear that at no time did D1, as asset manager of PW1, did tell PW1 what actually was the position, what would happen to his money, and the risk pertaining thereto. There is absolutely no doubt in the mind of this court that the representation made to PW1 by D1 was false, ie that his money would be so invested in the BTP as mentioned in the Asset Management Agreement, and that D1 knew the same to be false and yet intentionally falsely represented to PW1 with intent to defraud him and did induce him to remit the sum of US$1 million to D1’s bank account as stated in Charge 1. His dishonest intent is evident. He knew the purpose of the funds from the start.

327. The same had resulted in substantial prejudice to PW1 in this case, total loss of US$1 million, and at the same time financial advantage to D1 and D2.”

35.The judge further held:

“341. Clearly, on the evidence before this court, it is the joint efforts of D1 and D2 to cause PW1 to invest this by payment of US$1 million allegedly for purpose as set out in the Asset Management Agreement, but, in fact, was not. Even on the evidence of the defendants, which I do not accept, of course, that they were for the purpose as a loan to them for banking charges so that they could participate in a JVA with LJQ.

342. The representation as presented in the Asset Management Agreement was false. The defendants knew they were false. Their dishonest intent was evident and they had the intention to defraud PW1 and induce him to invest by remitting the US$1 million, which he did, relying on such representation.”

36.Having conducted a comprehensive review and evaluation of the evidence, the judge found that the applicant’s evidence was not credible[21]. Both the applicant and D2 were found guilty of Charge 1.

37.Having concluded that the purported PPP investment programme offered by the applicant and D2 was false, the judge held that the applicant made the same false representation to PW1 about investing the overpaid US$1 million in a similar investment programme. She found that the applicant had used PW1’s funds for his own financial benefit and contrary to the purpose for which those funds were supposed to be used, and without PW1’s authorisation[22]. The judge found the applicant guilty of Charge 2.

38.In respect of the US$70,000 payment by PW1 to the applicant supposedly to pay bank charges for the release of PW1’s funds, the judge rejected D1’s evidence and found that he had falsely represented to PW1 that this was the purpose for the funds, which he had instead used for his own benefit[23]. The judge found the applicant guilty of Charge 4.

39.In respect of Charge 6, the judge rejected the explanation given by the applicant in support of his defence that he did not know of the falsity of the documents. The judge held that:

“443. … The only necessary irresistible inference was that he knew that these are all false documents and he had kept it in his custody for use, with the intention that he or another would use them to induce persons to accept that these are genuine instruments and that he dealt with people of substantial worth and, by reason of so accepting them, to do or not to do some act to his own or any person’s prejudice.”

40.As for Charge 5, the judge said:

“475. This court therefore also has to consider whether on the day that D1 actually already knew the instrument was false, as the time gap between his alleged time of receipt of the instrument to its actual use of the instrument at the MO bar was only a matter of hours. But a single call to the bank would only take a few minutes.

476. The evidence from D1 was also that after the meeting and before the due date for payment, and after the due date for payment, he did not check with George Lai, coupled with the fact that, when asked in court as to the nature of the US$2 million due to him from D2, D1 was hesitant in answering and said they might have come from PPP, which contradicted his earlier evidence that all PPP actually failed.

477. In the circumstances, even considering that possibility, I found beyond reasonable doubt that when he showed the instrument to PW1 he at that point in time already knew that was a false document.

478. Now, knowing the document was false, D1 used it by showing it to PW1, intending, without doubt, in my view, to induce him to believe that the Standard Chartered Bank letter was genuine and, if so accepted, at least waited for longer before taking further action for recovery of the money, bearing in mind that PW1 was then on the verge of suing D1, as then said by D1 and as said by D2. This would amount to prejudice to PW1 within the meaning of the section.”

41.In respect of Charge 3, the judge held:

“485. As this court found earlier, both defendants knew these were false instruments. On the occasion when D1 met PW1, it is not in dispute that D1 showed the instrument to PW1. D2 was not present. There is no evidence that it is D2 who has asked D1 to show the instruments to PW1 or that he had supplied it with the intent that D1 shall use it on PW1, so the actual using of this instrument on that particular occasion only concerned D1.

486. It must have been his dishonest intent of D1, intending to induce PW1 to accept these are genuine documents, leading him to believe that D1 would soon be able to repay him by reason of having such large sum in a company of which he himself was interested in and, in so accepting, refrain from taking recovery action for the investment sums due to PW1, which resulted of course to a prejudice to the PW1.

487. This is the only irresistible inference in the circumstances.”

42.The judge reasoned that as a consequence of the conviction of the applicant on Charge 1, he was also guilty of dealing with the proceeds of the fraud on PW1, namely US$1 million[24]. Accordingly, the judge found the applicant guilty of Charge 8.

The grounds of appeal

43.In his re-re-amended perfected grounds of appeal (2^nd iteration) filed on 1 March 2023, which were said to have been advised by a King’s Counsel based in London, and adopted by the applicant, the applicant advanced two grounds of appeal against his conviction. Ground 1 alleged that Mr Wong SC was flagrantly incompetent in failing to cross-examine D2 in respect of the evidence which suggested that D2 had deceived the applicant, thereby rendering the conviction unsafe and unsatisfactory. Ground 2 averred that the judge, absent any cross-examination of D2 by Mr Wong SC, had failed properly to evaluate the evidence which suggested that D2 had deceived D1; and thereby reached erroneous findings of fact, thus rendering the convictions unsafe and unsatisfactory.

Affirmations of complaint against the applicant’s trial counsel

44.The applicant filed two affirmations in support of his allegation against Mr Wong SC, his former leading counsel at trial.

45.In his affirmation dated 26 March 2021, the applicant deposed that the foundation of his defence was his reliance on D2’s representations concerning the PPP investment scheme and related matters. The applicant pointed to numerous emails and SMS messages sent to him by D2 concerning the investment. However, defence counsel had decided not to cross-examine D2 at all, nor to put to D2 any of the emails and SMS messages written by D2 to the applicant, which were said to amount to false representations by D2. As a result, the judge had given little or no weight to the evidence tendered by the applicant.

46.The applicant filed a further affirmation on 6 January 2023 in reply to the affirmations of legal representatives at trial. In his second affirmation, the applicant further deposed that in the morning of 5 September 2018, before the hearing at which D2 was expected to be cross-examined by the applicant, leading counsel did not mention the reason for not alerting D2 to the documentary evidence, which he was nevertheless going to include and refer to in his closing submission.

Response of the applicant’s trial legal representative

47.In his first affidavit, filed on 21 May 2021, Mr Tang Chi Keung (“Mr Tang”) of Messrs Paul CK Tang & Chiu, the solicitors acting for the applicant at trial, said that after D2 had finished his evidence-in-chief, Mr Wong SC informed him that D2 was not going to be cross-examined because there was already sufficient evidence to substantiate the applicant’s defence. In his second affirmation in response to the applicant’s second affirmation, Mr Tang deposed again that in the morning before the hearing of 5 September 2018, Mr Wong SC said he had decided not to cross-examine D2 because there was sufficient evidence to support the applicant’s defence.

48.In his first affirmation in response to the applicant’s allegation, filed on 4 May 2021, Mr Wong SC said of the applicant’s instructions that the applicant’s belief in D2, and the genuineness of what D2 had sent him, was the basis of his approach to the case. The applicant’s defence depended entirely upon the judge accepting the applicant’s evidence that he had relied, or possibly relied, upon D2 telling him the truth. The rejection of his evidence by the judge was effectively the end of the matter. In respect of not cross-examining D2, Mr Wong SC said that it was a tactical move because he was of the view that there was sufficient evidence given by the applicant on documents and the communications between him and D2 to raise a doubt about D2’s evidence. The tactic had been explained to the applicant and he consented to it.

49.In his second affirmation, Mr Wong SC further deposed that important communications between the applicant and D2 had been discussed beforehand and adduced during examination-in-chief of the applicant for the purpose of demonstrating that the applicant had trusted and relied on what D2 had told him, which trust and reliance had caused him to lose about HK$4 million himself. It was his considered view that the applicant’s evidence was sufficient to raise a reasonable doubt in relation to the charges. The applicant had never complained after giving evidence that there were other important communications between himself and D2 which were not dealt with in his evidence. Not only did D2 not dispute the evidence of the applicant in cross-examination, his evidence did not contradict the applicant’s account. Therefore, it was not necessary for the applicant to put to D2 what the applicant had already stated in his evidence. Mr Wong SC was concerned that putting things to D2 in cross-examination ran the risk of D2 raising matters which the applicant’s evidence did not deal with. Doing so would have been unwise, since the applicant would not then have the opportunity of giving further evidence on any new matters raised by D2.

50.Mr Wong SC conceived that it was his duty as leading counsel to consider the whole case and to advise on what were the best tactics to adopt. The reasons for not cross-examining D2 were clearly explained to the applicant. Moreover, both the applicant and the rest of the legal team agreed with his advice. If the applicant had raised any concerns about the tactic, or given instructions that further communications were to be put to D2, an application for more time or an adjournment to discuss such instructions would have been sought, given that there was never any issue of urgency. Mr Wong SC maintained that if the applicant had indicated that he did not understand or did not agree with his advice, D2 would have been cross-examined because those would have been the applicant’s instructions.

51.Junior counsel in their various affirmations essentially confirmed that which had been deposed by Mr Wong SC.

The applicant’s submissions on appeal

52.The applicant has argued that the failure to cross-examine D2 on key documents led the judge to have a misleading impression of the evidence. Documents passing between the applicant and D2 were either referenced compendiously, or insufficiently explored or not referenced at all; in particular, they were not explored during the cross-examination of D2. It was submitted that the judge’s findings would not have survived an analysis, which the court should have given the evidence.

53.Highlighting five areas of the case, namely, Exhibit P93 (the SCB letter); the evidence of the sources of funds; the CIMB Bank correspondence; D2’s purported contact with the Hong Kong Monetary Authority; and drawing inferences from the tone of the email correspondence from D2, the applicant submitted that each of the areas was available as evidence for cross-examination of D2. However, there was no such cross-examination.

54.The applicant pointed out that the part of the judge’s reasons for concluding that the applicant must have known of the fraud was that the applicant was a sophisticated, smart and resourceful person and yet he never sought verification of the authenticity of various documents provided to him by D2. The applicant argued that the proposition that various false documents could have been verified with a simple telephone call was neither correct, nor a sufficient foundation for a criminal conviction. The applicant submitted that a failure to verify was not evidence of complicity in a deception. Rather, the failure to verify arose because the deception had succeeded. It was flawed logic to suggest that the applicant must have known of the falsity of the documents because he did not verify their contents. Sophistication, smartness and resourcefulness did not guarantee that one could not be deceived.

55.The applicant submitted that a finding that the applicant had been deceived by D2 would have caused the unravelling of all the charges, since:

(1)  The AMA and PPP presented by D1 to PW1 had been presented to D1 by D2 (Charges 1 and 2)

(2)  The deposit certificate shown by the applicant to PW1 had been provided to the applicant by an associate of D2, and D1 had received assurances from D2 about it (Charge 3);

(3)  D2 had provided the applicant with the explanation for the required US$70,000 (Charge 4);

(4)  D2 provided the applicant with Exhibit P93 (Charge 5);

(5)  D2 or others associated with him provided the applicant with electronic versions of each false document (Charge 6);

(6)  The allegation of money laundering had to be predicated on the movement of money proceeding from a crime, which the applicant knew he was committing (Charge 8).

The respondent’s submissions

56.Mr Phil Chau SC, leading counsel for the respondent at trial as well as in the present appeal, pointed out that both grounds of appeal advanced by the applicant were premised on the decision not to cross-examine D2 being a wrong one, which thereby deprived the applicant of the opportunity to make good his defence that he too had been deceived by D2.

57.Mr Chau argued, firstly, that the decision not to cross-examine D2 was made by the applicant himself upon considering his leading counsel’s advice. Therefore, the applicant was bound by his own decision. Citing Chong Ching Yuen v HKSAR[25], Mr Chau submitted that the decision whether to cross-examine a particular witness falls under the wide discretion of counsel and does not provide any ground for appeal unless flagrant incompetence can be shown. The applicant could have no valid grievance even if he had relinquished the decision to his trial counsel, since the decision concerned a judgment as to tactics.

58.Secondly, Mr Chau pointed out that D2 could not have given evidence as to the applicant’s state of mind in his dealings with D2. At best, and for the sake of argument, cross-examination might have confirmed that D2 had lied, but not whether the applicant believed the lies or what his state of mind was when he promoted them to PW1. Mr Chau added that confirmation of D2’s lies was unnecessary since this had already been made out, and D2’s role was to feed the applicant with false documents for the latter’s use. Therefore, the applicant was not prejudiced by his own decision not to cross-examine D2 and the fairness of the trial had not been undermined.

59.Thirdly, Mr Chau argued that there was no basis for the applicant’s assertion that the decision not to cross-examine led to a misleading impression of the evidence to emerge. The applicant’s evidence-in-chief had already canvassed at length the core documents referred to in his grounds of appeal as well as the allegedly neglected correspondence. The defence closing submission at trial also referred extensively to his correspondence with D2 to corroborate his defence. The respondent submitted that the judge was fully aware of the applicant’s case and had comprehensively considered the correspondence between them. Mr Chau highlighted the judge’s finding that the voluminous correspondence between the applicant and D2 supported the prosecution case that the respective roles of the applicant and D2 in the fraud were divided. The judge also noted the total absence of correspondence with financial institutions purportedly involved in the PPP, which would inevitably have existed if the representations made were in fact true.

60.Finally, Mr Chau submitted that the applicant was unable to substantiate his complaint of flagrant incompetence, or that the fairness of the trial had been undermined in any way by his leading counsel at trial not cross-examining D2. Accordingly, there was no merit in either grounds of the appeal.

Discussion

61.There are cases in any advocate’s experience which call for special care and discretion when handling the evidence of a particular witness. Defendants who are unrepresented present notorious and peculiar difficulties for counsel cross-examining on behalf of a co-accused, especially when there is scope for actual or potential conflict. They will call for a careful tactical assessment as to how best to deal with them. An advocate can exercise a large measure of control over his own witnesses, bringing out matters in favour of his client and avoiding matters detrimental to his cause. But he has very little control over an unrepresented defendant. Nor, outside the normal rules of evidence and fairness, can he dictate what prosecuting counsel may or may not ask in respect of matters, which defence counsel has raised (or not raised) with an unrepresented defendant.

62.In the present case, D2 was unrepresented until he was convicted by the judge. Moreover, as the applicant and his defence team would have appreciated, and as a matter of chronology, D2’s evidence at the trial was to come after the applicant’s evidence had concluded. In these circumstances, Mr Wong SC made a decision, according to his affirmation in response of 3 May 2021, that:

“Putting to D2 the documents and communications that we were going to rely on in our closing submissions to demonstrate that he had been lying to [the applicant] would have alerted D2 to those documents and communications. More importantly, it would have given him the opportunity to explain them under cross-examination; and such explanation would probably be against the evidence given by [the applicant] … thereby weakening [the applicant’s] evidence. Such tactics were explained to [the applicant] and he agreed to it.”

63.Whether we agree with the strategy or not is not the point: the question is whether it was a valid tactical approach, which could reasonably have been employed by the applicant’s leading counsel and his defence team. As Gleeson CJ (later Gleeson NPJ) put it, in the High Court of Australia decision of TKWJ v R[26]:

“On the face of it, that was an understandable decision. It was certainly not self-evidently unreasonable, or inexplicable. It was the kind of tactical decision routinely made by trial counsel, by which their clients are bound. And it was the kind of decision that a Court of Criminal Appeal would ordinarily have neither the duty nor the capacity to go behind. Decisions by trial counsel as to what evidence to call, or not to call, might later be regretted, but the wisdom of such decisions can rarely be the proper concerns of appeal courts. It is only in exceptional cases that the adversarial system of justice will either require or permit counsel to explain decisions of that kind. A full explanation will normally involve revelation of matters that are confidential. A partial explanation will often be misleading. The appellate court will rarely be in as good a position as counsel to assess the relevant considerations. And, most importantly, the adversarial system proceeds upon the assumption that parties are bound by the conduct of their legal representatives.”

64.In an earlier decision of the Court of Appeal of New South Wales in R v Birks[27], Gleeson CJ (at the time Chief Justice of New South Wales) had characterised the principles in this way[28]:

“As a general rule, a party is bound by the conduct of his or her counsel, and counsel have a wide discretion as to the manner in which proceedings are conducted. Decisions as to what witnesses to call, what questions to ask or not to ask, what lines of argument to pursue and what points to abandon, are all matters within the discretion of counsel and frequently involve difficult problems of judgment, including judgment as to tactics. The authorities concerning the rights and duties of counsel are replete with emphatic statements which stress both the independent role of the barrister and the binding consequences for the client of decisions taken by a barrister in the course of running a case. For example, in Rondel v Worsley [1969] 1 AC 191 at 241, Lord Morris of Borth-y-Gest quoted with approval the following statement of the Lord President in the Scottish case of Batchelor v Pattison and Mackersy (1876) 3 R (Ct of Sess) 914, concerning the role of an advocate:

‘… His legal right is to conduct the cause without any regard to the wishes of his client, so long as his mandate is unrecalled, and what he does bona fide according to his own judgment will bind his client, and will not expose him to any action for what he has done, even if the client’s interests are thereby prejudiced.’

In Halsbury’s Laws of England (4^th ed), Vol 3(1), par 518 at 420, it is stated that:

‘… a barrister is ordinarily instructed on the implied understanding that he is to have complete control over the way in which the case is conducted. Unless and until his instructions are withdrawn, counsel has, with regard to all matters that properly relate to the conduct of the case, unlimited authority to do whatever he considers best for the interests of his client. This authority extends to all matters relating to the action, including the calling and cross-examination of witnesses, challenging a juror, deciding what points to take, choosing which of two inconsistent defences to put forward, and even to agreeing to a compromise of the action, or to a verdict, order or judgment’.”

65.This same passage has been approved by the Hong Kong Court of Final Appeal in Chong Ching Yuen v HKSAR[29], Sir Thomas Eichelbaum NPJ concluding, in a judgment that was agreed with by all other judges of the Court[30]:

“It follows, almost inevitably, that ordinarily, a tactical decision by counsel which, in hindsight, ought to have been made differently, will not provide any ground for appeal, any more than if such decision had been made by the defendant personally. Nor will other forms of mere error of judgment.”

66.The applicant, therefore, is not entitled to say now that he would have preferred things to have been done differently at trial, if the tactical decision was made by his counsel for valid and understandable reasons, whether he agreed with the tactic or not; which, as it happens, he did. Mr Wong SC’s position is that his tactical decision was a considered one, which was explained and agreed with by the applicant himself. If there is any issue as to whether the applicant properly agreed with this approach, we think the preponderance of evidence is that he did: indeed, the applicant says, in his own affirmation affirmed on 5 January 2023, that he “deferred to Mr Wong SC for his professional judgment” on the matter[31], although he claims that he consented in haste when the matter was unexpectedly raised in a conference room before the proceedings resumed on 5 September 2018.

67.We have had the benefit in this appeal of receiving very capable submissions from the applicant in person, and it is clear to us that the applicant is a highly articulate and intelligent man. When, for example, a proposition was put to him by the Court, he was more than capable, firmly but courteously, of disagreeing with it, and giving reasons for his position. We cannot believe, if the applicant did not agree with Mr Wong SC’s tactical approach, that he would have accepted it.

68.Mr Wong SC reasoned that such were the documents and materials in his possession that a reasonable doubt could be raised without running the risk of an unrepresented defendant undoing the case after the applicant had completed his evidence. As we have said, unrepresented defendants require particular finesse and care, particularly if they perceive that blame is being directed exclusively at them by a co-accused in cross-examination.

69.The applicant would like us to embark on a detailed analysis of various documents to show that the applicant was (or may have been) duped by D2. The Court was invited, for example, to examine the “tone” of certain contemporaneous correspondence and emails passing between D2 and the applicant[32], and consider the inferences properly to be drawn from such tone[33], which is said to be inconsistent with the actions of fraudsters, at least on the applicant’s part. The point, however, such as it is, does not depend on cross-examination but on an examination of the documents themselves. On other occasions, we were asked to find that D2’s deceit “could and should have been exposed by cross-examination” of D2 on certain documents[34]. However, as Mr Chau has pointed out, D2’s deceit was already made manifest by the prosecution in relation to the SCB correspondence; the fact that D2 did not have US$35 million in his bank account, contrary to what was shown on the SCB bank statement; and the fact that he had never been in contact with Hong Kong Monetary Authority. In any event, D2 could not be asked directly what was in the mind of the applicant, and there was always the risk that he might have come up with answers detrimental to the applicant if he felt he was being asked indirectly.

70.We do not find it necessary to engage the applicant on each and every document he now says could and should have been put to D2, because his leading counsel at trial had decided that he would still be able to make the points he wanted to make from the documents, without the risk of the applicant’s case being undermined by D2 in cross-examination. Moreover, the applicant agreed with this course. Since the tactic adopted was “not self-evidently unreasonable, or inexplicable”, that is the end of the matter so far as an appellate court is concerned, however much the applicant may now regret the tactic. We are not here to retry the case once the course adopted by the defence at trial has failed. One must not lose sight of the overwhelming nature of the case, as Mr Wong SC has noted in his affirmation[35]:

“If one looked at the figures involved with each charge, it is amazing that such extremely large sums were involved and (the applicant’s) only instructions were that he believed D2 or that the documents were sent to him and he accepted them as genuine and true. That was not evidence which could/would have been easy to accept”.

71.We do not know how D2 might have reacted if the suggestion was put to him that he had single-handedly and deliberately duped the applicant for his own purposes. Yet, Mr Wong SC was still able to advance this proposition in his closing address. On the principal charge, for example, Mr Wong SC submitted[36]:

“So we say, in paragraph 5.7.2, that the 1^st defendant has this charge of evidential burden in respect of this offence, that he genuinely trusted the 2^nd defendant and relied on what the 2^nd defendant told him. And this is so, because all the relevant communication between him and the 2^nd defendant, and we shall come to that again later, including emails, SMS etc, clearly proves this. Indeed, the 1^st defendant’s trust and rely upon D2 had caused him to lose the $4 million in respect of the two flats at Vienna Court, and such loss is well supported by documents.

The matters, of course, are there. What we are saying here, no doubt your Honour understands this, that we don’t just rely on the 1^st defendant’s oral testimony in court. There are all these documents which we will be giving your Honour a table of some of these documents and a chronology. His case is supported by these documents. And these documents were made well before has was arrested. It could have been validated. Between him and the 2^nd defendant these documents showed that there was no collusion whatsoever. He’s been chasing the 2^nd defendant for money to repay Sami”

72.In our judgment, the complaint against Mr Wong SC on the grounds of flagrant incompetence is not reasonably arguable, nor is the allied complaint that because of the absence of Mr Wong SC’s cross-examination of D2, the judge could not and did not properly evaluate the evidence and the inferences to be drawn therefrom. These are demonstrably grounds of last resort, the applicant’s application for leave having earlier failed before the Single Judge.

73.We refuse leave to appeal against conviction and dismiss the appeal.

Mr Phil Chau SC and Mr Martin Li, counsel on fiat, instructed by the Department of Justice, for the Respondent

The Applicant appeared in person