Ewan Quayle Launder v. HKSAR

FACC No. 3 of 2001

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 3 OF 2001 (CRIMINAL)

(ON APPEAL FROM CACC NO. 147 OF 2000)

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Dates of Hearing: 14 and 16 November 2001

Date of Judgment: 13 December 2001

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J U D G M E N T

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Chief Justice Li :

1.I agree with the judgment of Sir Anthony Mason NPJ.

Mr Justice Bokhary PJ :

2.I agree with the judgment of Sir Anthony Mason NPJ.

Mr Justice Chan PJ :

3.I agree with the judgment of Sir Anthony Mason NPJ.

Mr Justice Litton NPJ :

4.I agree entirely with Sir Anthony Mason NPJ's judgment and would only add a few words as to why I think the proviso to s.83(1) of the Criminal Procedure Ordinance cannot be applied in this case. I will, for this purpose, adopt the abbreviations used in that judgment.

5.In considering this matter, it is necessary to view the conviction on count 1 against the background of the entire case.

6.At trial, the defence was not putting the appellant forward as a man of pristine character. His entire defence was that, in relation to the funds totalling $43,950,000 received from Tan, Chung and Pak, he was, in counsel's words, "moonlighting": helping those people (and others associated with them) to invest those sums anonymously through the Honeywell account with Impact Finance Ltd, a "fledgling" deposit-taking company. The transactions were designed in such a way that the appellant's hand in them was not revealed. This is hardly the activity of an upright banker, and there was no pretence at trial to put him forward as such. But, in a sense, the more disreputable his conduct overall, the greater the care that must be exercised in assessing his culpability on count 1.

7.At trial, the appellant faced a total of 13 charges, of which 10 related to payments by Tan and 3 by Chung and Pak. Count 1 concerned $4,500,000 from Tan, paid into Honeywell's account with Impact Finance. It was part of the sums totalling $31,950,000 from Tan covered by the other counts in the indictment, on which the appellant was acquitted by the jury. In other words, the jury must have come to the view that in relation to all but $4,500,000 (that is to say, $27,450,000) it was at least possible that the appellant was doing what he said he was doing : investing the money anonymously for Tan : and likewise regarding the sums paid by Chung and Pak totalling $12,000,000, in relation to which the appellant was acquitted altogether.

8.The only thing which distinguished count 1 from the other counts involving payment from Tan was the manner of transmission of the funds to Impact Finance : But how relevant was that? Given the disreputable nature of the appellant's transactions with Tan in the first place, the episode involving Thomas Bate in the Hyatt Hotel coffee-shop on 11 October 1980 was not inconsistent with the appellant's defence.

9.Over the period from October 1980 to June 1982 very large sums were paid over to the appellant, on the prosecution's case, as "general sweeteners", by way of goodwill payments. The prosecution was unable to be more precise than that in its averment. And if that were in truth the nature of those payments, Tan must have been a remarkably generous man because there was not a scrap of evidence to suggest that the appellant had shown him or the Carrian Group any particular favour of any kind. There was overwhelming evidence that all the elaborate internal procedures for the granting of facilities by Wardley to the Carrian Group were meticulously followed; the loans were amply secured; and when the security fell below levels as demanded by Wardley, Carrian was promptly required to put in additional security. It is against this background that the exercise of the proviso to s.83(1) of the Criminal Procedure Ordinance must be viewed. The prosecution cannot be said to have an overwhelming case against the appellant on count 1.

10.Further, the misdirection - that the jury could convict on count 1 for "having shown favour" - cannot be brushed aside as being fleeting and immaterial. The trial judge directed the jury's attention to a schedule which showed that prior to October 1980 Wardley had advanced 2 loans to the Carrian Group: one on 29 February 1980 of HK$92 million and the other on 12 September 1980 of US$7.5 million, and the judge told the jury that the first loan which Carrian had obtained from Wardley was that on 29 February 1980. And yet, on the indictment as it stood, the jury could not have taken those matters into account in convicting the appellant on count 1.

11.It cannot be said that a jury, properly directed, would inevitably have convicted the appellant. It follows that the appeal must be allowed.

12.I agree with Sir Anthony Mason NPJ that this is not a case for a new trial, not only because of the very long lapse of time since the events first occurred, but also because of the somewhat nebulous nature of the prosecution case.

Sir Anthony Mason NPJ :

13.This appeal is brought, pursuant to the grant of leave by the Appeal Committee, against the refusal by the Court of Appeal (Stuart-Moore VP, Mayo VP and Seagroatt J) of leave to appeal against the appellant's conviction by a jury of accepting an advantage in the sum of $4,500,000, contrary to s.9(1) of the Prevention of Bribery Ordinance, Cap. 201 (the Ordinance).

The trials

14.The appellant was charged in an indictment with thirteen offences of accepting advantages as an agent contrary to s.9(1)(b) of the Ordinance. At the first trial, in May and June 1999, in the Court of First Instance, before Mr Justice Lugar-Mawson and a jury, the jury could not reach a verdict. A new trial was ordered.

15.At the second trial, from which the present appeal arises, again before Mr Justice Lugar-Mawson and a jury, the appellant was found guilty on 25 March 2000 of count 1 in the indictment and acquitted on the remaining twelve counts. He was sentenced to five years' imprisonment, ordered to repay $4,500,000 to HSBC Investment Bank (Asia) Ltd and disqualified under s.168E of the Companies Ordinance, Cap. 32, from being a director, liquidator, receiver, or manager of company property, and participating in the management of a company.

The offence of which the appellant was convicted

16.Section 9(1) (a) and (b) of the Ordinance is in these terms:

"Any agent who, without lawful authority or reasonable excuse, solicits or accepts any advantage as an inducement to or reward for or otherwise on account of his -

(a) doing or forbearing to do, or having done or forborne to do, any act in relation to his principal's affairs or business; or

(b) showing or forbearing to show, or having shown or forborne to show, favour or disfavour to any person in relation to his principal's affairs or business,

shall be guilty of an offence."

The particulars given of the first count in the indictment (the count on which the appellant was convicted) were as follows:

"Ewan Quayle Launder, on or about the 11th day of October, 1980, in Hong Kong, being an agent of Wardley Limited, without lawful authority or reasonable excuse, accepted or agreed to accept an advantage, namely a gift, fee, reward or commission of HK$4,500,000 Hong Kong currency from George TAN Soon-gin as an inducement to or reward for or otherwise on account of the said Ewan Quayle Launder showing favour to Carrian Holdings Limited and/or Carrian Investments Limited and/or other companies controlled by the said George TAN Soon-gin in relation to his principal's affairs or business."

The appellant's case

17.It is not disputed that s.9(1)(b) creates one offence. The consequence is that, under the Indictment Rules, Cap. 221, it is possible to frame a charge under s.9(1)(b) alleging acceptance of an advantage for "showing or having shown favour". For some reason which does not appear, the particulars given of all thirteen counts in the indictment allege acceptance of an advantage for "showing" favours, omitting the alternative of "having shown" favours.

18.Mr McCoy SC for the appellant contended before the Court of Appeal, as he does before this Court, that the trial judge misdirected the jury in law, having regard to the way in which the counts had been drawn, that they could convict the appellant of the offences charged, if "favour" had been shown in the past, that is, before the appellant's acceptance of the alleged advantage. Mr McCoy SC's submission is that the allegation "showing favour" connotes present and future but not past favours.

19.Mr McCoy SC also submitted that, if the way in which the first count was expressed enabled the prosecution to present its case on the basis of past as well as present and future favours, substantial and grave injustice was occasioned by the trial judge's direction to the jury, that they could convict even on the basis of past favours. In this respect, the appellant's contention was that the prosecutor's case throughout the trial had been presented on the basis that the relevant advantage had been accepted for present and future favours only, not past favours.

The Appeal Committee's grant of leave

20.On the basis of these submissions, the Appeal Committee certified that the judgment of the Court of Appeal involved a point of law of great and general importance, namely:

"[Is it] an error of law for the trial Judge to repeatedly direct the jury in terms of s.9(1)(b) of the Prevention of Bribery Ordinance Cap. 201, that the [appellant] would be guilty if it was established that the advantage was for 'showing or having shown favour', when the particulars of the Count alleged only that the advantage was accepted as an 'inducement to or reward for or otherwise on account of showing favour'?"

21.Leave was granted to pursue the certified point of law and the related substantial and grave injustice argument.

22.In order to consider the certified point of law, it is necessary, first, to outline the prosecution's case and the defence case at the trial and, secondly, to refer to the relevant directions given by the trial judge to the jury. The appellant did not give evidence at the trial. Nor were any witnesses called to support the defence case.

The prosecution case

23.In 1973, the appellant was employed as a managing director of Wardley Limited (Wardley) which was the merchant banking subsidiary of the Hong Kong and Shanghai Bank. In January 1980, he was appointed Chief Executive of Wardley. He was a director and a member of the credit committee of Wardley. The credit committee consisted of senior personnel of the merchant bank. They met regularly to consider applications from customers and potential customers for loans and other financial services. The appellant also dealt with underwriting proposals.

24.The appellant had considerable influence and control over the granting of loans because he was a point of contact between Wardley and its major clients. One such client was George Tan Soon-gin (Tan). He controlled the "Carrian" group of companies. Two other major clients were Chung Ching-man (Chung) and his wife, Pak Choi-wah (Pak), who controlled the "Eda" group of companies. Carrian and Eda were granted substantial loans by Wardley between 1979 and 1982. The appellant participated in the granting of these loans. The Eda and Carrian groups went into liquidation in 1982 and 1983 respectively.

25.The prosecution's case, on the thirteen counts before the jury, was that between October 1980 and June 1982, while he was Chief Executive of Wardley, the appellant received $43,950,000 in the form of corrupt payments in connection with the loans given by Wardley to Carrian and Eda. The prosecution alleged that he had received those payments from or on behalf of Tan, who controlled the Carrian group, or alternatively from Chung and Pak, who controlled the Eda group. In association with the receipt of these payments, the appellant began to deposit substantial amounts of money into an account in the name of Honeywell Investment Centre (Honeywell) held at a newly registered deposit-taking company named Impact Finance Limited (Impact). Honeywell was incorporated in 1976 in Panama. In 1979, the appellant took control of Honeywell by acquiring the only two shares which had been issued.

26.The prosecution alleged that the corrupt payments were made soon after or at about the time Wardley granted new loans or renegotiated existing loans or provided other financial services to the Carrian and Eda companies. In some cases, the alleged bribe monies were said to have come from the bank accounts of relatives of Tan so that the source of the payments would be disguised. In other instances, Pak and Chung made arrangements for cashier's orders to be paid. The alleged corrupt payments were deposited into Honeywell's account with Impact for investment. The Honeywell funds were expended in various ways, including investment in internal interest deposits at Impact, the withdrawal of cash by the appellant, and the forwarding of monies, on the appellant's instructions, to his personal bank accounts in London or to companies or persons associated with him, or to be held in trust by his lawyers in Switzerland.

27.When Carrian and Eda began to fail in mid 1982, the appellant gave instructions that Honeywell would withdraw its money from Hong Kong. The appellant left Hong Kong in about August 1983, having been transferred to the London office of Wardley. Thereafter, Impact ceased to take further deposits in respect of the Honeywell account.

28.The broad basis of the prosecution's case in respect of all the charges was that the payments which found their way into the Honeywell account had been made to the appellant and were accepted by him as bribes. The prosecution alleged that these bribes were "general sweeteners" for the appellant in some way to show favour to the companies controlled by the persons who were in reality making the payments. The acceptance of the alleged advantages by the appellant, so the prosecution claimed, related to Wardley's affairs or business.

29.In both the opening and closing addresses of the prosecution, the case was presented generally as one in which it was alleged that the payments were made to the appellant as bribes or general sweeteners for the accused to show favour to the relevant companies. In opening, counsel for the prosecution said:

"With regard to all of the charges, it is alleged that the payments were made to the accused as bribes or a general sweetener for the accused to, in some way, show favour to the companies controlled by the persons making the payments with relation to their business dealings with Wardleys."

30.In relation to count one, counsel stated in opening:

"It is alleged that the cash and cheques were given to the accused by George Tan for the accused to show favour to the companies controlled by George Tan."

31.Likewise, in his closing address, counsel for the prosecution expressed the case in terms of payments accepted for favours to be shown. Two instances will suffice. The first passage from counsel's closing address was in these terms:

"... we say the irresistible inference is that Tan and Chung would have thought that the accused could, as chief executive, exert his influence and consequently, we say, these substantial sums of money were given to him for this purpose."

32.The second passage was as follows:

"And the prosecution says that common sense dictates that the only explanation is that the payments of these substantial amounts of money to the accused must have been in the expectation that the accused would show favour to them in relation to business dealings with Wardleys, and that the accused must have known or suspected that they were paid for this reason and accepted them on this basis."

33.The prosecution was unable to link particular payments received by the appellant with any particular loans made or to be made by Wardley to companies in the Carrian and Eda groups. No doubt that is why the prosecution described the payments as "general sweeteners", thereby seeking to avoid linking particular payments received by the appellant with any particular loan transactions, past, present or future.

34.It was the prosecution's case that, for the charges to be proved, it was unnecessary to show that anything more specific was agreed upon or that the appellant actually did anything to earn these general sweeteners.

Defence case

35.The case for the defence was presented on the basis that the payments which were made to the appellant had been made by persons who wanted him to invest the money on their behalf. The appellant's case therefore challenged two elements in the prosecution case: first, that when he accepted the payments he was acting for Wardley and was acting in relation to its affairs; and, secondly, that he accepted any "advantages". Further, counsel for the appellant suggested that none of the payments were corrupt and laid emphasis on the fact that the prosecution had been unable to call any evidence of a favour having actually been shown by the appellant to Tan or Chung and Pak.

36.The nature of the appellant's defence at the trial - that no advantages were accepted and no favour whatsoever was shown - meant that counsel for the appellant in his address to the jury did not distinguish between payments accepted for past favours and payments accepted for future favours.

37.The central issue in the case was concerned with the appellant's state of mind when he accepted the alleged advantages. It was and is common ground that the appellant's state of mind in accepting the payments was a critical element in the proof of the commission of the alleged offence.

The trial judge's directions

38.It is not in dispute that the trial judge, when he was directing the jury on the ingredients of the offence, did on no less than six occasions direct the jury that the prosecution must prove that the appellant accepted the relevant advantage as an inducement to or a reward for or otherwise on account of his "showing or having shown favour" to the relevant companies. The trial judge first embarked on this course when he read to the jury the provisions of s.9(1)(b). Thereafter he appears to have had in mind the terms of the section rather than the terms of the indictment.

39.The direction leaving open the alternative "having shown favour" gained some added force from his Lordship's references to s.11(1) of the Ordinance which negatives certain defences to a charge under s.9(1). In these references to s.11(1), his Lordship, repeating the terms of that provision, spoke of "his doing or having done any act".

40.No relevant objection was taken at the trial by counsel for the appellant. Nor was any re-direction sought.

The certified point of law

41.The Court of Appeal took the view that, as a matter of ordinary meaning, the acceptance of an advantage as "an inducement to or reward for or otherwise on account of [the appellant] showing favour" could - and presumably should - be construed as signifying that a present, past or future favour was contemplated. The Court of Appeal considered that the words omitted from the counts in the indictment, "or having shown", though they removed doubts as to the meaning of "for showing favour", in reality added nothing that was not already plain from the phraseology employed in the indictment.

42.The respondent seeks to support this interpretation of the expression "showing favour" both in the indictment and in s.9(1)(b) itself. The respondent points out that the Court of Appeal has interpreted the words "or otherwise on account of" in s.9 as applying to a general goodwill payment without the necessity of showing a specific intention on the part of the person charged in relation to a specific act or abstention (Attorney General v Chung Fat Ming [1978] HKLR 480; R v Tsou Shing Hing [1989] 1 HKC 93). The respondent also points out that the words "on account of" are wide enough to cover payments made "as an inducement to or reward for" (R v Ip Chiu [1977-1979] HKC 182 at 186; affirmed by the Privy Council sub nom Attorney General of Hong Kong v Ip Chiu [1980] HKLR 11 at 14.

43.The respondent then submits that the words "showing favour" can refer to each limb in the provision, that is, "an inducement to", "reward for" or "otherwise on account of", because the present tense "showing favour" is equally applicable to past or future conduct.

44.It may be accepted that the expression "an inducement to" looks to future action or abstention. Although the expression "reward for" is commonly applied to past conduct, it is capable of applying also to present or future conduct, while "otherwise on account of" is capable of applying to past, present or future conduct. The use of these three expressions does not throw any significant light on the meaning of "for showing ... favour". They are all capable of having an application according to their natural and ordinary meaning, whether one adopts the appellant's or the respondent's interpretation of "for showing ... favour".

45.It may be that, divorced from their context in s.9(1), the words "for showing favour" ordinarily mean present and future as distinct from past favours. That, however, is not a question which has to be decided in this case.

46.We are concerned with the natural and ordinary meaning of the words in their context in the statute (Pinner v Everett [1969] 1 WLR 1266 at 1273 C-D, per Lord Reid) and here the context is decisive. The words in the indictment take their meaning from the same words as used in s.9(1)(b). The statutory provision provides the relevant context from which the meaning of the words is to be ascertained.

47.Section 9(1)(b) draws a distinction between "showing favour" and "having shown favour". It is a distinction between the present and prospective on the one hand and the past on the other hand which is repeatedly drawn in the Ordinance. Recognition of the distinction requires that the different meanings of the two expressions must be observed in the use to which the expressions are put both in the Ordinance itself and in any indictment charging an offence under the Ordinance.

48.The legislative antecedents of s.9(1)(b) provide no support for the respondent's case. Section 9(1)(b) may be traced back to the Public Bodies Corrupt Practices Act 1889 (UK) and the Prevention of Corruption Act 1906 (UK). Section 1(1) of the 1889 Act applied to a public servant who accepted any advantage

"as an inducement to, or reward for, or otherwise on account of any member, officer, or servant of a public body ... doing or forbearing to do anything ..."

49.In R v Andrews Weatherfoil Ltd (1971) 56 Cr App R 31 at 42, the English Court of Criminal Appeal held that the use of the present tense in the phrase "doing or forbearing to do ..." in s.1(1) of the 1889 Act was applicable to past and future conduct, observing that the phrase was simply descriptive of the nature of the activity for the time being contemplated as the subject matter of the inducement or reward.

50.Section 1(1) of the 1906 Act applied to an agent who obtains or agrees or attempts to obtain any gift or consideration

"as an inducement or reward for doing or forbearing to do, or for having after the passing of this Act done or forborne to do, any act in relation to his principal's affairs or business, or for showing or forbearing to show favour or disfavour to any person in relation to his principal's affairs or business ..."

51.The use of the past perfect tense in s.1(1) of the 1906 Act was designed to express Parliament's intention that a reward for a past act without an antecedent agreement would only constitute an offence if it was in respect of any act done after the passing of the Act (R v Andrews Weatherfoil Ltd at 42).

52.Section 3(1) of the Prevention of Corruption Ordinance, Cap. 215, was in terms almost identical to s.1(1) of the 1889 Act. Section 4(2) of that Ordinance was in terms substantially similar to s.1(1) of the 1906 Act, incorporating the past perfect tense in the same way as s.1(1) of the 1906 Act had done.

53.In view of the similarity between the provisions of the 1889 and 1906 English Acts and their counterparts in s.3(1) and s.4(2) of Cap. 215, it is very likely that ss 3(1) and 4(2) would have been interpreted in accordance with what was said in R v Andrews Weatherfoil Ltd. What was then said by the English Court of Criminal Appeal, however, can have no application to the differently worded provisions of s.9(1) of the Ordinance which replaced s.4(2) and drew the distinction between "for showing" favour and "for having shown" favour. The same comment applies to s.11 of the Ordinance which, in negativing certain defences, draws a distinction between "doing or forbearing to do" and "having done or forborne to do" any act. Although the reason for the change does not appear, it is likely that it arose from doubts that "for showing" favour encompassed past as well as present and future conduct. The use of the past perfect tense in s.1(1) of the 1906 English Act and s.4(1) of Cap. 215 would have alerted lawyers and draftspersons to the problem.

54.Accordingly, the appellant's case on the interpretation of count 1 in the indictment is correct.

Materiality of the direction complained of

55.The respondent submits that the direction was not material because it would not have influenced the jury to consider the issue erroneously, when the summing-up is considered in its entirety. The references to "having shown favour" constituted a small part of a long summing-up of 120 pages, in which the judge on occasions referred only to "showing favour". Indeed, at the very beginning of the summing-up, the judge's first reference to this point was simply to "showing favour".

56.Further, the judge dealt very cursorily with the individual loan transactions. He made a very brief reference to the schedule of the loan transactions between Wardley and the Carrian and Eda groups, which was in evidence, and told the jury that he would not go through them. The schedule gave short particulars of two loan transactions which took place before the acceptance of the payment alleged in the first count. The judge did not invite the jury to consider the loan transactions individually, in particular the two loan transactions before the acceptance of the payment alleged in the first count. The schedule of transactions was adduced simply as background evidence to show the relationship between Wardley and Carrian and Wardley and Eda and to show that the appellant was acting for Wardley when he received the payments.

57.The respondent argues that, when attention is given to these matters and to the way in which the prosecution based its case on present or future favours as well as the way in which the defence case was presented to the jury, it is not to be supposed that the jury was distracted by the direction complained of from a correct approach to the first count.

58.In support of this argument, the point is made that no objection to the directions was made by counsel at the trial. The absence of such an objection may well be an indication that the direction was not then seen as being prejudicial to the appellant's case (Stirland v. Director of Public Prosecutions [1944] AC 315 at 328). It is not suggested that the failure to object at the trial constitutes a bar to an appeal on the point at issue.

59.On the other hand, the directions complained of related to a central element in the offence charged, namely what the prosecution must prove if it was to succeed. And the relevant direction clearly stated that guilt could be established in one of two ways. Considered in this light, it cannot be said that the relevant directions were not material and would have been disregarded by the jury. The jury had before them the schedule of transactions and could have related the repeated directions on "having shown favour" to the two loan transactions which preceded the acceptance of the payment in the first count. The direction in question left it open to the jury as a matter of law to convict on this basis and the possibility that the jury did so has not been and cannot be excluded.

The proviso

60.Under s.17(2) of the Hong Kong Court of Final Appeal Ordinance, Cap. 484, this Court may, for the purpose of disposing of any appeal, exercise any powers of the court from which the appeal lies. One such power exercisable in the present case by this Court is that conferred by s.83 of the Criminal Procedure Ordinance, Cap. 221. Section 83(1)(b) provides that, subject to the proviso, the Court of Appeal shall allow an appeal against conviction if it thinks

"(b) that the judgment of the court of trial should be set aside on the ground of a wrong decision on any question of law."

The proviso to s.83(1) authorises the Court of Appeal to dismiss the appeal, "if it considers that no miscarriage of justice has actually occurred".

61.It is well established that the test to be applied in a case in which the proviso is invoked is whether a reasonable jury, properly instructed, would, on the evidence, without doubt convict or would inevitably come to the same conclusion (Stirland at 321; Commissioners of Customs and Excise v. Harz [1967] 1 AC 760 at 823-824. The reasonable jury is a hypothetical jury, not the jury that convicted the appellant. As Lord Morris of Borth-y-Gest stated in Harz at 824

"the test to be followed is not that of seeking to assess what the particular jury that heard the case would or must have done if it had only heard a revised version of the evidence. For the purpose of the test the appellate court must assume a reasonable jury and must then ask whether such a reasonable jury hearing only the admissible evidence could if properly directed have failed to convict."

His Lordship was dealing with a case where a jury had convicted after taking account of inadmissible evidence but in principle the same approach must be applied to the application of the proviso to a case in which the conviction results from a misdirection in law.

62.Mr Blanchflower SC for the respondent submits that this is a case in which the proviso should be applied. He submits that the transaction which resulted in the conviction was an extraordinary transaction for a man in the appellant's position to engage in. According to the evidence, on Saturday 11 October 1980, the appellant met Thomas Bate, the general manager of Impact in the Hyatt Hotel coffee shop in Tsim Sha Tsui, the appellant's Wardley office being in Central. In the course of this meeting, the appellant passed $4,500,000 to Bate comprising $2 million in cash in a shopping bag and $2.5 million in the form of 10 cheques of $250,000 each, drawn on George Tan Soon-gin's account with the Wing Lung Bank. The appellant placed the shopping bag under the table and pushed it with his feet across to Bate. The space for the payee's name in the cheques was blank. The appellant requested Bate to fill in the payee's name for the reason, according to Bate, that the appellant did not want his handwriting to appear on the cheques. Bate then inserted Impact as the payee. Tan's signature appeared on each cheque. Bate subsequently deposited the cash and the cheques into Honeywell's account with Impact.

63.The appellant was the holder of the only two shares in Honeywell and therefore had the effective control of that company which was a repository of investments he caused to be made. Apart from the appellant, there was no evidence of other investors in Honeywell.

64.For the chief executive of the merchant banking arm of one of the world's largest banks to engage in a transaction of this kind was astonishing, to say the least of it. It was a transaction so designed as to conceal the appellant's connection with the payments. Not only did the appellant refrain from giving evidence in denial of the prosecution case, no witnesses were called by the defence. And it might be thought that the defence case that the appellant was undertaking in his own interests investment on behalf of his employer's customers without its knowledge was a rather unlikely venture which did him no credit at all.

65.Yet the fact is that there was no evidence linking the payments received by the appellant with the making of any particular loans. Nor was there evidence that the making of the relevant loans by Wardley to Carrian and Eda involved any irregularity and there was no specific evidence that the appellant brought his influence to bear in the making of the loans. It is possible that the jury may have considered that the surreptitious transaction on 11 October 1980 was consistent with an attempt to conceal from the appellant's employer his unauthorised investment activities on behalf those controlling Carrian and Eda.

66.The prosecution case was by no means overwhelming. Why the jury convicted on count one but acquitted on the other counts is by no means apparent. Perhaps the bizarre circumstances in which the payment was made was the critical factor in the jury's mind. Even so, the jury was divided, convicting the appellant by the minimum statutory majority of six to two after extended deliberations. The significance of that division gains some additional force from the jury's failure to reach agreement at the first trial.

67.In the light of these considerations, it cannot be said that a reasonable jury, properly instructed, would on the evidence without doubt convict the appellant. It is, accordingly, not a case for the application of the proviso, and the appeal should be allowed. In view of the long history of this matter and the fact that there have been two trials, I would make no order for a new trial.

The substantial and grave injustice point

68.It is unnecessary to deal with this ground of appeal.

Orders

69.I would allow the appeal and quash the appellant's conviction.

Chief Justice Li:

70.The Court unanimously allows the appeal and quashes the appellant's conviction. The Court would make no order for a new trial.

Representation:

Mr McCoy, SC, Mr Alexander King and Mr Edwin Choy (instructed by Messrs Haldanes) for the appellant

Mr Blanchflowler, SC, Mr B Ryan and Mr G Shiu (of the Department of Justice) for the respondent